U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                AMENDMENT NO. 2
                                       TO
                                   FORM 10-QSB

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                  For the quarterly period ended March 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 Number 000-27353


                            SELECT THERAPEUTICS INC.
        (Exact name of small business issuer as specified in its charter)

        Delaware                                               98-0169105
State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                             Identification No.)

50 Cummings Park, Woburn, MA                                  01801
(Address of principal executive offices)                    (Zip Code)

                                 (781) 939-0995
                (Issuer's telephone number, including area code)

                                       N/A
             (Former name, former address and former fiscal year, if
                           changed since last report)

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___

The aggregate  number of shares  outstanding of the Issuer's  Common Stock,  its
sole class of common equity, was 11,862,308 as of May 10, 2000.

Transitional Small Business Issuer Disclosure Format: Yes ___ No _X_



<PAGE>


This  amendment to the Quarterly  Report on Form 10-Q for the  quarterly  period
ended  March 31,  2000 (the  "Report")  is being  filed to reflect a  $1,281,250
noncash stock compensation  charge in the three months ended March 31, 2000 that
was already  reflected  in the Report in the nine months  ended March 31,  2000.
This  amendment  also  corrects  share issue costs  during the nine months ended
March 31, 2000 to $4,926,800 and the weighted  average number of shares and loss
per share to 8,559,318 and $(0.23),  respectively.  The information appearing in
Part I, Items 1 and 2 below  amends and restates  the  information  appearing in
Part I, Items 1 and 2 of the Report.


                        PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

SELECT THERAPEUTICS INC.
(A DEVELOPMENT STAGE ENTERPRISE)

Consolidated Balance Sheets
(Stated in U.S. dollars)
(Unaudited)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
                                                           March 31,        June 30,
                                                               2000             1999
                                                                           (Audited)
------------------------------------------------------------------------------------
<S>                                                     <C>             <C>
Assets

Cash and cash equivalents                               $    176,667    $    120,881
Restricted cash                                                   --          72,000
Cash held in trust                                         8,695,350              --
Accounts receivable                                               --           7,380
Inventory                                                     22,805          32,130
Prepaid expenses and other assets                             18,780          21,740
Property, plant and equipment                                112,437         104,547
Intangible assets                                            705,769         900,581

------------------------------------------------------------------------------------
                                                        $  9,731,808    $  1,259,259
------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Liabilities:
     Accounts payable                                   $    164,536    $     43,309
     Accrued liabilities                                     388,738         655,798
     -------------------------------------------------------------------------------
                                                             553,274         699,107

Shareholders' equity:
     Capital stock:
         Authorized:
              1,000,000 preferred shares
              50,000,000 common shares,
                $0.0001 par value
         Issued:
              Nil Preferred Shares
              11,862,308 common shares
                (June 30, 1999 - 5,634,094)                    1,186             563
              1,735,902 warrants (1999-nil)                3,805,302              --
     Contributed surplus                                  11,748,986       5,145,191
     Stock options                                         1,281,250              --
     Deficit accumulated during the development stage     (7,658,190)     (4,585,602)
------------------------------------------------------------------------------------
                                                           9,178,534         560,152

------------------------------------------------------------------------------------
                                                        $  9,731,808    $  1,259,259
------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                       F-1
<PAGE>


SELECT THERAPEUTICS INC.
(A DEVELOPMENT STAGE ENTERPRISE)

Consolidated Statements of Operations
(Stated in U.S. dollars)
(Unaudited)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                               Nine months ended            Three months ended
                                                   March 31,                    March 31,
----------------------------------------------------------------------------------------------
                                             2000           1999           2000           1999
----------------------------------------------------------------------------------------------

<S>                                   <C>            <C>            <C>            <C>
Revenue                               $   170,590    $   110,750    $    77,465    $   110,750
Cost of revenue                                --         77,556             --         77,556
----------------------------------------------------------------------------------------------
                                          170,590         33,194         77,465         33,194

Interest income                               524         32,570              8          5,829

Research and development                1,050,050      1,103,923        718,426        802,131
Selling, general and administration     1,968,966        714,442      1,239,125        146,948
Depreciation                               29,874         11,437          9,958          8,825
Amortization                              194,812        108,230         64,937         64,938
----------------------------------------------------------------------------------------------
                                        3,243,702      1,938,032      2,032,446      1,022,842
----------------------------------------------------------------------------------------------
Loss for the period                   $(3,072,588)   $(1,872,268)   $(1,954,973)   $  (983,819)
----------------------------------------------------------------------------------------------

Loss per share                        $     (0.44)   $     (0.36)   $     (0.23)   $     (0.19)

Weighted average number of shares       6,956,082      5,228,791      8,559,318      5,228,791

----------------------------------------------------------------------------------------------
</TABLE>

Consolidated Statements of Changes in Shareholders' Equity
(Stated in U.S. dollars)

Nine months ended March 31, 2000
(Unaudited)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Deficit
                                                                                            accumulated
                                                                                             during the
                                Common shares               Warrants          Contributed   development        Stock
                              Shares      Amount       Number      Amount       surplus         stage         Options        Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>         <C>         <C>         <C>          <C>           <C>            <C>           <C>
Balance, June 30, 1998     4,981,313   $     498          --   $       --   $  3,180,529  $ (2,118,274)  $         --  $  1,062,753

Issue of common shares       652,781          65          --           --      1,964,662            --             --     1,964,727

Loss for the year                 --          --          --           --             --    (2,467,328)            --    (2,467,328)
-----------------------------------------------------------------------------------------------------------------------------------

Balance, June 30, 1999     5,634,094         563          --           --      5,145,191    (4,585,602)            --       560,152

Issue of common shares     6,228,214         623          --           --      6,603,795            --             --     6,604,418

Issue of warrants                 --          --   1,735,902     3,805,302            --            --             --     3,805,302

Loss for the year                 --          --          --           --             --    (3,072,588)            --    (3,072,588)

Issue of stock options            --          --          --           --             --            --      1,281,250     1,281,250

-----------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000   11,862,308   $   1,186   1,735,902   $ 3,805,302  $ 11,748,986  $ (7,658,190)  $  1,281,250  $  9,178,534
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                       F-2
<PAGE>


SELECT THERAPEUTICS INC.
(A DEVELOPMENT STAGE ENTERPRISE)

Consolidated Statements of Cash Flows
(Stated in U.S. dollars)
Nine months ended March 31, 2000 and 1999
(Unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                                                     2000            1999
-----------------------------------------------------------------------------------------

Cash provided by (used in):

<S>                                                          <C>             <C>
Operating activities:
     Loss for the period                                     $ (3,072,588)   $ (1,872,268)
     Items not involving cash:
         Depreciation                                              29,874          11,437
         Amortization                                             194,812         108,230
         Issue of common shares for services                       90,000         933,730
         Stock compensation                                       599,000              --
         Issue of stock options for services                      682,250              --
     Changes in non-cash operating working capital:
         Accounts receivable                                        7,380         (15,500)
         Inventory                                                  9,325         (18,528)
         Prepaid expenses and other assets                          2,960          21,000
         Accounts payable                                         121,227        (754,659)
         Accrued liabilities                                     (267,060)        396,058
-----------------------------------------------------------------------------------------
                                                               (1,602,820)     (1,190,500)

Financing activities:
     Repayment of loans due to the former shareholders
       of Sierra Diagnostics Inc.                                      --        (285,999)
     Proceeds from issuance of common shares                   10,319,720              --
     Restricted cash                                               72,000         (72,000)
-----------------------------------------------------------------------------------------
                                                               10,391,720        (357,999)

Investing activities:
     Additions to property, plant and equipment                   (37,764)       (118,280)
-----------------------------------------------------------------------------------------
                                                                  (37,764)       (118,280)


Decrease in cash                                                8,751,136      (1,666,779)

Cash and cash equivalents, beginning of period                    120,881       2,070,705

-----------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                     $  8,872,017    $    403,926
-----------------------------------------------------------------------------------------

Supplementary disclosure:
     Non-cash financing and investing activities:
         Issue of common shares to purchase licenses         $         --    $    138,730
         Issue of common shares related to the acquisition
           of Sierra Diagnostics Inc.                                  --         780,997
         Issue of common shares for services                       90,000         795,000

-----------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                       F-3
<PAGE>


SELECT THERAPEUTICS INC.
(A DEVELOPMENT STAGE ENTERPRISE)

Notes to Consolidated Financial Statements
(Stated in U.S. dollars)
Nine months ended March 31, 2000 and 1999
(Unaudited)

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


Basis of presentation:


In the opinion of management, the unaudited consolidated financial statements of
Select Therapeutics Inc. (the "Company") included herein have been prepared on a
consistent  basis  with  the  June  30,  1999  audited  consolidated   financial
statements and include all material adjustments,  consisting of normal recurring
adjustments,  necessary to fairly  present the  information  set forth  therein.
These interim  financial  statements should be read in conjunction with the June
30, 1999  audited  consolidated  financial  statements  and notes  thereto.  The
Company's  results of operations for the first three fiscal quarters of 2000 are
not necessarily indicative of future operating results.


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


Cash and cash equivalents


Cash and cash equivalents includes cash, mutual funds, and cash held in trust.


Capital stock


(a) During the nine  months  ended  March 31,  2000 the  Company  completed  the
following capital stock transactions:

(i)  36,000 common shares were issued in the amount of $90,000 as  consideration
     for consulting services;

(ii) In July 1999,  50,000  common shares were issued for gross cash proceeds of
     $125,000.

(iii)In August 1999, the Board of Directors  approved the reduction of the April
     1998 private  offering common share price from $3.00 per share to $2.00 per
     share and authorized the issuance of an additional 381,264 common shares to
     the subscribers of the April 1998 private offering.

(iv) In October 1999, the Company  completed a private  placement  consisting of
     151,000 units.  Each unit consists of one common share and two warrants for
     gross cash  proceeds of $188,750.  No portion of proceeds was  allocated to
     the warrants (note (vii)).


                                      F-4

<PAGE>


SELECT THERAPEUTICS INC.
(A DEVELOPMENT STAGE ENTERPRISE)

Notes to Consolidated Financial Statements (continued)
(Stated in U.S. dollars)
Nine months ended March 31, 2000 and 1999
(Unaudited)

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

(v)  In November  1999,  the Company issued a total of 58.75 units at a price of
     $23,400 per unit for total gross  proceeds of $1,374,750  through a private
     offering.  Each unit  consists of 13,000  common  shares of the Company and
     13,000 warrants. No portion of proceeds was allocated to the warrants (note
     (vii)).  In addition,  the Company  issued 7.4 units as  consideration  for
     services  rendered in  connection  with the private  offering of shares and
     accordingly an amount of $173,160 has been recorded as share issue costs;

(vi) During March 2000, the Company,  through a private  offering,  issued 47.50
     units  at a price  of  $200,000  per  unit  for  total  gross  proceeds  of
     $9,500,000. Each unit consists of 100,000 common shares of the Company. The
     Company  issued  a total of  573,952  warrants  for  services  rendered  in
     connection   with  the  March  2000  private   placement.   These  warrants
     representing  shares  issue costs have been fair  valued at their  issuance
     date and recorded as warrants in the amount of $3,805,302 with an offset to
     contributed surplus in the same amount; and

Share issue costs incurred in the nine months ended March 31, 2000 in the amount
of $4,926,800 (1999 - $Nil) have been netted against contributed surplus.

(vii)As a result of the  foregoing  capital  transactions,  there are a total of
     1,735,902  warrants  outstanding.  Each  warrant  entitles  the  holder  to
     purchase  one common share at exercise  prices  ranging from $1.85 to $3.00
     and has expiration  dates between  September 30, 2002 and March 2003. These
     warrants are not redeemable by the holder for cash.

     If the closing  price of the  Company's  common shares ranges from $3.00 to
     $4.00 or more for 10  consecutive  trading days, the Company may redeem the
     warrant at a price of $0.001 per warrant.

(b)  Stock Options:

     In September 1999, the Company granted a member of management who is also a
     director,  300,000  options to purchase  common shares of the Company at an
     exercise  price of $1.73 per share.  The options  vest as  follows:  75,000
     immediately,  75,000 on completion of the Company's next private placement,
     75,000  after six months of  employment  and 75,000 upon the earlier of the
     first anniversary of his employment  commencement date or the completion of
     a significant equity placement by the Company. The options are fully vested
     and expire on September 30, 2004.

     In March  2000,  the  Company  also  granted a total of 950,000  options to
     certain directors,  management and consultants to purchase common shares of
     the Company with  exercise  prices of $4.25 and $5.00 which expire on March
     1, 2007. The options vest immediately.

     The Company  granted options at an exercise price less than the fair market
     value of the  underlying  shares on the date of the grant and has  recorded
     compensation  expense in the amount of $599,000  which has been  calculated
     based on the  difference  between the exercise  price of the option and the
     fair value of the shares at the date of grant.  The  Company  issued  stock
     options to consultants and has recorded $682,250 in the year ended June 30,
     2000 as compensation expense for services rendered.

                                       F-5

<PAGE>

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.

                           FORWARD-LOOKING STATEMENTS

      THIS REPORT, INCLUDING WITHOUT LIMITATION, ITEM 2, MANAGEMENT'S DISCUSSION
AND ANALYSIS OR PLAN OF OPERATION,  CONTAINS STATEMENTS WHICH ARE NOT HISTORICAL
FACTS   AND  ARE   FORWARD-LOOKING   STATEMENTS   WHICH   REFLECT   MANAGEMENT'S
EXPECTATIONS,   ESTIMATES  AND   ASSUMPTIONS.   SUCH  STATEMENTS  ARE  BASED  ON
INFORMATION  AVAILABLE  AT THE TIME THIS FORM  10Q-SB WAS  PREPARED  AND INVOLVE
RISKS  AND  UNCERTAINTIES  THAT  COULD  CAUSE  FUTURE  RESULTS,  PERFORMANCE  OR
ACHIEVEMENTS  OF THE COMPANY TO DIFFER  SIGNIFICANTLY  FROM  PROJECTED  RESULTS.
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER  MATERIALLY  INCLUDE,  WITHOUT
LIMITATION,  THE HIGH COST AND  UNCERTAINTY  OF THE RESEARCH AND  DEVELOPMENT OF
PHARMACEUTICAL PRODUCTS, THE UNPREDICTABILITY OF THE DURATION AND RESULTS OF THE
U.S.  FOOD AND  DRUG  ADMINISTRATION'S  REVIEW  OF NEW  DRUG  APPLICATIONS,  THE
COMPANY'S INABILITY TO OBTAIN ADDITIONAL CAPITAL, THE POSSIBLE IMPAIRMENT OF, OR
INABILITY TO OBTAIN, INTELLECTUAL PROPERTY RIGHTS AND THE COST OF OBTAINING SUCH
RIGHTS  FROM THIRD  PARTIES AND THE  COMPANY'S  DEPENDENCE  ON THIRD  PARTIES TO
RESEARCH, DEVELOP, MANUFACTURE AND SELL ITS PRODUCTS, IF ANY.

Overview

      The Company is a development  stage  biopharmaceutical  company  formed to
acquire and develop rights to selected  early-stage  compounds and  technologies
which have potential use as therapeutics or diagnostics.  Since its inception on
December  6,  1996,  substantially  all of the  Company's  resources  have  been
dedicated to research and development and technology  acquisition.  To date, the
Company has not  generated  significant  product  revenues.  Sales of  Gonostat,
launched in January 1999, and potential sales of other  diagnostic  products are
not expected to generate  sufficient  revenues to cover the Company's  operating
costs during the next three years.

      Although the Company  raised gross proceeds of $9.5 million from a private
equity  placement  in March  2000,  the  continuation  of the Company as a going
concern is dependent on additional  equity  financing and on the  development of
economically viable products.  The Company has incurred losses of $3,072,588 and
$1,872,268 in the nine months ended March 31, 2000 and 1999,  respectively,  and
negative cash flow is expected to continue for the Company for at least the next
three  years.  There can be no  assurance  that funding will be available to the
Company  or that the  Company  will be able to develop  an  economically  viable
product.

                                        2

<PAGE>

      The process of developing the Company's  therapeutic products will require
significant  additional  research  and  development,   preclinical  testing  and
clinical trials, as well as regulatory  approvals.  These  activities,  together
with the Company's general and administrative  expenses,  are expected to result
in operating  losses for at least three more years. The Company will not receive
product revenue from  therapeutic  products unless it completes  clinical trials
and successfully  commercializes or arranges for the commercialization of one or
more of its products, as to the success of which no assurance can be given.

      The  Company is subject to risks  common to  biopharmaceutical  companies,
including  risks inherent in its research and  development  efforts and clinical
trials,   reliance  on  collaborative   partners,   enforcement  of  patent  and
proprietary  rights,  the need for future  capital,  potential  competition  and
uncertainty of regulatory approval. In order for a product to be commercialized,
it  will  be  necessary  for  the  Company  and  its  collaborators  to  conduct
preclinical  tests and clinical trials,  demonstrate  efficacy and safety of the
Company's  product  candidates,  obtain  regulatory  clearances  and enter  into
manufacturing,  distribution  and  marketing  arrangements  either  directly  or
through  sublicensees.  There can be no assurance that the Company will generate
revenues or achieve and sustain profitability in the future.

      During the  quarter  which  ended March 31,  2000,  SELECT's  management's
efforts  continued  to be  directed to  obtaining  funds and  repositioning  the
Company.  Product  development  efforts  continued but were  constrained by both
funding and management availability.  In March 2000 the Company closed a private
placement for $9,500,000.  Investors included institutions and individuals.  The
funds from this placement are believed to be sufficient to cover  operations for
the next 18 months.  This placement is a key step in the process of building the
Company and is the first time that institutions have participated in SELECT.

Program Review

      During the quarter ended March 31, 2000,  the Company was able to maintain
and  expand  its  research   collaborations  and  strengthen  its  portfolio  of
intellectual  property.  Academic  research on  applications  of Verotoxin  (VT)
continued in collaborating institutions. However, due to the significant funding
requirements, production of clinically qualified materials was not initiated and
all  clinically  oriented  programs  were  halted  for both  purging  and direct
applications  of the toxin.  In April  2000,  following  the  receipt of the net
proceeds from the $9.5 million  private  placement  completed in March 2000, the
Company  recommenced  these activities and both programs moved forward.  Both of
these

                                        3

<PAGE>

programs  continue to be viewed as promising and  management  believes that with
the Company's recently obtained near-term funding, both can move forward rapidly
since institutional collaborations are in place with clinical investigators.

      The application of VT to present  antigens to dendritic cells continues to
be a promising  approach to the  development of therapeutic  vaccines for cancer
and other diseases which circumvent the immune system's  surveillance.  Research
carried out under the Company's  option  agreement  with the Institut  Curie has
resulted in very promising  findings.  On December 2nd the Company announced the
extension of the option agreement and that a plan for clinical  investigation of
the technology is being  developed in  collaboration  with Dr. Evan Hersh at the
Arizona   Cancer  Center.   As  with   chemotherapeutic   applications   of  VT,
significantly increased levels of expenditure will be required as investigations
move  from the  research  laboratory  setting  to the  clinical  setting.  These
expenses   include  but  are  not  limited  to   development  of  materials  and
formulations  which are compliant with regulatory  requirements and the costs of
patient recruitment and monitoring in trial settings.

      Both the purging  program and the dendritic cell program  involve  ex-vivo
therapies  (i.e.  treatments  that are carried out on patient tissues which have
been removed from the patient). A common  characteristic of ex-vivo therapies is
that, relative to systemic administration,  they are less costly to investigate.
Select's focus is on identification  of opportunities  which combine low cost of
development  with a strong  proprietary  position and potentially  short time to
market.  There can be no  assurance  that viable  products  will result from the
Company's programs.

      The Company owns as a 100% subsidiary Sierra Diagnostics Inc.  ("Sierra"),
a developer and manufacturer of diagnostic products for consideration comprising
stock  and  assumption  of  debts  and  operating  costs.  Sierra  has a base of
proprietary  technology relating to assays for sexually transmitted diseases and
handling of clinical  samples.  It launched  two  products in 1999 both of which
have  significant  revenue  potential.  The  first  product,  Gonostat(TM)  is a
clinical  laboratory test for gonorrhea  which offers unique  advantages in cost
and performance  relative to other technologies  available in the market.  There
can,  however be no assurance of performance  in the market.  The second product
brought to market by Sierra is a sample  preservation and handling product which
eliminates the need for refrigeration of clinical samples intended for molecular
(DNA/RNA based) assays.  This product fits into the general practice of clinical
testing and is expected to find wide  application  due to  elimination of sample
degradation  and thus the need for repeat  testing or  sampling  with  attendant
costs

                                        4

<PAGE>

and  inconvenience.  Sales of products  based on this  technology and efforts to
license  the  technology  to third  parties  are  beginning  but no  significant
revenues had been generated.

      Sierra  Diagnostics has operated within its expense  projections but sales
of   Gonostat(TM),   while   contributing  on  a  gross  margin  basis,   lagged
expectations.  This resulted in a higher than  anticipated  cash requirement for
Sierra.  At the end of October Sierra entered into a distribution  agreement for
sales of its  products  to  within  third  world  countries  and  believes  that
operating results for fiscal 2001 will significantly improve. SELECT has engaged
a sales and marketing  group on a consulting  basis to assist in developing  the
market  for  both   diagnostic   products  and  to  evaluate  other   diagnostic
opportunities for the Company.  To date, the operations of Sierra have generated
losses and there can be no assurance that profitable operations will be achieved
or that, if achieved, they can be maintained.

      SELECT is developing a portfolio of proprietary product  opportunities and
is aggressively  pursuing patents. In addition to licensed patents,  the Company
has  agreements  which  provide for options on related  inventions  arising from
sponsored work.  Together with a strong network of  institutional  investigators
management believes that it has been able to identify and build protection for a
significant base for development of unique products. Competition in the areas of
the  Company's  interests  is intense  and both the  scientific  and  commercial
environments  change rapidly. By focusing on intellectual  property  development
and using external contractors, Select hopes to be able to maintain the required
flexibility  to adapt to changing  circumstances.  The  Company's  key resources
include qualified  subcontractors  and it believes that it can move rapidly into
clinical  investigations  and development of products based on its  intellectual
property  given  adequate  funding.  The funding  required as the Company enters
clinical  trials  significantly  exceeds the  magnitude  of funds  raised by the
Company to date and there can be no assurance  that such funding is available on
acceptable terms if at all.

Financial Condition

      During the quarter the Company's cash position  increased from $371,121 to
$8,872,017,  consisting  of cash and cash  equivalents  and cash  held in trust,
principally  reflecting  the net proceeds of the Company's  $9.5 million  equity
private  placement.  The Company also decreased its accounts payable and accrued
liabilities from $797,597 to $553,274 in the quarter.  Management  believes that
adequate funding for continuation of operations and development of the Company's
technology assets has been obtained but notes that

                                        5

<PAGE>

significantly  greater  resources  will  be  required  in  order  to  bring  its
therapeutic products to market.

Results of Operations

     For the  quarter  ended  March  31,  2000,  SELECT  incurred  a net loss of
$1,954,973  compared with a loss of $983,819 for the corresponding  three months
ended  March 31,  1999.  For the nine  months  ended  March 31, 2000 the Company
incurred losses of $3,072,588 versus $1,872,268 for the corresponding  period in
1999.  The  Company  has  been  unprofitable  from  its  formation  and  has  an
accumulated  deficit of $7,658,190 through March 31, 2000. The net loss for each
of the three and nine  months  ended March 31,  2000  included a non-cash  stock
compensation charge of $1,281,250.  Excluding this non-cash charge, the net loss
is a result of routine  operations of the Company in its  development  stage. We
expect losses to continue and increase for the next several years as the Company
pursues  development  and   commercialization   of  its  intellectual   property
resources.

     Revenue  of  $170,590  during the nine  months  ended  March 31,  2000 were
principally from the sale of Gonostat(TM).  During the corresponding  quarter in
1999, there were revenues of $110,750 from sales and interest income was $5,829.
SELECT's sole operating revenues to date arise from sales of diagnostic products
through its wholly  owned  subsidiary,  Sierra  Diagnostics.  The Company has no
other product or license revenues.  Management  anticipates that future revenues
may consist  primarily of product sales either  directly by the Company or, more
likely,  through  collaborative  development and marketing agreements with other
companies in the pharmaceutical  industry.  Sierra's  operations are expected to
achieve  breakeven  during fiscal 2000 and  thereafter be  profitable.  However,
there can be no assurance that such performance will be realized or maintained.

Costs and Expenses

     Operating expenses for the nine months ended March 31, 2000 were $3,243,702
compared  to  $1,938,032  in the same period of 1999.  Expenditures  required to
advance the Company's development projects,  notably initiation of manufacturing
of GMP qualified  materials,  were deferred during the period but recommenced in
April 2000.

     All  research  and  development  activities  of the Company are expensed as
incurred.   Personnel   costs  including   retained   consultants  and  external
contractors are the largest ongoing cost of operations.  The Company has no long
term employment  contracts or liabilities for severances.  At March 31, 2000 the
Company  employed  seven  people,  mainly at  Sierra  Diagnostics  and  retained
services  of three  key  consultants  who are an  integral  part of the  Company
management.

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<PAGE>

      Locating and retaining  appropriate  personnel resources is a priority and
the Company  anticipates  that personnel costs will increase if adequate funding
is obtained.  The  percentage  of  expenditures  related to personnel  and other
operations is expected to decline as increasing commitments are made to external
manufacturing and clinical studies.

Capital Expenditures

     There were no significant capital expenditures during the last nine months.

     Patent costs are expensed  due to the  uncertainties  involved in realizing
value from specific patents.

LIQUIDITY AND CAPITAL RESOURCES

     The Company has financed its operations since inception  primarily  through
private  placements  of its Common  Stock.  As of March 31, 2000 the Company had
received  approximately  $9,340,000  in net  proceeds  from the  sale of  equity
securities  during the quarter.  Warrants and options for the purchase of common
shares were issued at various  times and  exercise  prices as  disclosed  in the
notes to the  financial  statements  both as part of certain  placements  and as
compensation   in   consideration   of  placement   activities   and  management
performance.

      The Company's limited financial resources forced it to curtail some of its
planned operations through March 2000. Although these activities  recommenced in
April 2000, the Company will require substantial  additional funding in order to
complete its research and  development  activities  and sublicense any potential
products. The Company's future capital requirements will depend on many factors,
including scientific progress in its research and development programs, the size
and  complexity of such programs,  the scope and results of preclinical  studies
and  clinical  trials,  the ability of the  Company to  establish  and  maintain
corporate  partnerships,  the time and costs  involved in  obtaining  regulatory
approvals,  the costs  involved  in filing,  prosecuting  and  enforcing  patent
claims,   competing   technological  and  market   developments,   the  cost  of
manufacturing preclinical and clinical material and other factors not within the
Company's  control.  There can be no  assurance  that the  additional  financing
necessary to meet the Company's short and long-term capital requirements will be
available on acceptable terms or at all.

      Insufficient  funds  may  require  the  Company  to delay,  scale  back or
eliminate  some or all of its research or development  programs,  to lose rights
under  existing  licenses  or to  relinquish  greater  or all  rights to product
candidates at an earlier stage of development  or on less  favorable  terms than
the Company would otherwise choose or may adversely affect the Company's ability
to operate as a going concern. If additional funds are raised by

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<PAGE>

issuing equity securities, substantial dilution to existing
stockholders may result.

      The Company  currently has funds sufficient to continue  operations for 18
months,  including  funds  required  to  move  current  projects  into  clinical
investigations.  Management  has been in  discussions  with a number of  parties
regarding  additional  financing  required to maintain and develop the Company's
position and while it is optimistic that such funds may be available there is no
assurance that this will be the case. Sales of Sierra's products to date are not
sufficient to cover operating  costs.  Sierra  Diagnostic's  ongoing  operations
require  compliance with FDA requirements and that a base level of manufacturing
be maintained.

Year 2000

      Year 2000 (Y2K) issues arise because many computer  systems use two rather
than  four  digits to  identify  the year thus  creating  ambiguities  which may
produce  errors before,  on or after January 1, 2000. If not  addressed,  errors
could impact all aspects of operations including financial  reporting,  clinical
and  production  records or controls and  communications.  Errors may range from
minor to  significant  systems  failures and could be imported  from  suppliers'
systems.

      We have assessed,  taken  corrective  actions in light of, and continue to
monitor our vulnerability to Y2K issues in all aspects of our business including
information and computer systems and critical  suppliers and service  providers.
To the best of our knowledge,  systems and equipment  critical to our operations
are Y2K compliant. However, it is not possible to be certain that the systems of
our suppliers,  service  providers or other third parties upon which we rely are
compliant or that they will  unaffected  by problems in their own supply  chain.
Based on the nature of our  operations  and ongoing  assessments we believe that
Select has little direct exposure to Y2K issues.

      We estimate  that our direct  costs of  addressing  the Y2K issue are less
than  $5,000,  which are being  expensed  in the normal  course of our  business
operations.

Summary

      SELECT is a reporting entity under the Securities and Exchange Act of 1934
and believes it now satisfies the financial  requirements for listing its Common
Stock on the NASDAQ-Small Cap Market. The Company has succeeded in obtaining the
funds it required to position the Company for continuing  operations and forming
development partnerships with other companies. We believe

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<PAGE>

it has a strong  portfolio of product  opportunities in therapeutics for cancer,
two of which have been  advanced to the stage at which  clinical  investigations
may begin (subject to adequate funding resources).  Sierra sales growth has been
slower than  expected,  but  significant  sales growth is  anticipated in fiscal
2001. We are adding new products and  technology to Sierra as part of an overall
plan to develop a diagnostics business with both sales and earnings.

      Research results from key collaborations continue to be encouraging.  Most
notably the program at the  Institut  Curie,  with  respect to  presentation  of
antigens to dendritic cells, has progressed well and moved significantly towards
clinical  experiments  aimed at  validating  the  potential of this approach for
development of therapeutic vaccines for cancers.

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                                   SIGNATURES


      In accordance  with the  requirements  of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Dated: July 11, 2001                         SELECT THERAPEUTICS INC.



                                             By: /s/ Steve M. Peltzman
                                                 -------------------------------
                                                 Name: Steve M. Peltzman
                                                 Title: Chief Executive Officer

                                             By: /s/ Michelle C. Guertin
                                                 -------------------------------
                                                 Name: Michelle C. Guertin
                                                 Title: Chief Accounting Officer

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