UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

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

                      For the year ended December 31, 1999

                           Commission File No. 0-28227

                            IVES HEALTH COMPANY, INC.
                 (Name of small business issuer in its charter)

                                    Oklahoma
         (State or other jurisdiction of incorporation or organization)

                                   73-1430235
                        (IRS Employer Identification No.)

                           817 North J.M. Davis Blvd.
                               Claremore, OK 74017
                                  (918)283-1226
        (Address, including zip code and telephone number, including area
                     code of registrant's executive office)

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

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 par value
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act pf 1934  during the  preceding  12
months (or for such shorter period that the Registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [X] No [ ]

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

State Issuer's revenues for its most recent fiscal year. $ 469,567.

State  the   aggregate   market  value  of  the  voting  common  stock  held  by
non-affiliates, computed by reference to the price at which the common stock was
sold,  or the  average  bid and  asked  prices  of such  common  stock,  as of a
specified date within the past 60 days: February 14, 2000: $ 2,707,686

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  As of March 23, 2000,  there were
12,846,946 shares of the Company's common stock issued and outstanding.

Documents Incorporated by Reference: None

<PAGE>

                                     PART I

Item 1. Description of Business.

     Ives Health Company, Inc. (A Development Stage Company) ( the "Registrant",
"Company" , "Ives" or "New Ives" ) was formed  pursuant to an agreement  between
Maxxon,  Inc. and M. Keith Ives,  entered into and made  effective  December 31,
1997. Ives Health Company Inc., (a wholly owned subsidiary of Maxxon,  Inc.) and
Maxxon,  Inc.  agreed  to  separate.   The  separation  was  accomplished  by  a
non-pro-rata  split-off of non-monetary  assets in accordance with Issue 96-4 of
the Emerging Issues Task Force, and the issuance of 7,000,000 shares of New Ives
common stock to M. Keith Ives, and 1,700,000  shares of New Ives common stock to
Maxxon,  Inc. New Ives began operations  January 1, 1998 and was incorporated in
Oklahoma on February 12, 1998.

     Prior to August of 1997,  Ives Health  Company,  Inc., was a privately held
company  incorporated  in the state of  Oklahoma  in 1993 and was engaged in the
business  of selling  and  distributing  homeopathic  supplements,  weight  loss
products, vitamins, and other alternative medicines to the public through retail
grocery stores and other distribution outlets. In August, 1997, the shareholders
of Ives exchanged all of their issued and  outstanding  shares for Maxxon shares
in a tax free share exchange.  As a result,  Ives Health Company became a wholly
owned  subsidiary of Maxxon.  Mr. Keith Ives became a shareholder  of Maxxon and
remained  President  and a director of Ives Health  Company.  Mr. Ives had never
been the holder of more than 5% of the issues and  outstanding  stock of Maxxon.
Mr. Ives also became a director of Maxxon.  Note: Maxxon,  Inc. is a development
stage company in the process of developing a safety syringe.  Its stock has been
traded on the OTC Bulletin Board under the symbol, "MXON".

     After a short  period of time,  it became  apparent to both Maxxon and Ives
management  that the business of Maxxon and Ives apparently did not fit together
as  originally  believed,  that Maxxon was not able to obtain  financing for the
Ives  operations  as  expected,  and that the  management  style of  Maxxon  was
incompatible  with the management  style of Mr. Ives. The parties  determined to
separate. At that time, Ives Health Company,  Inc., a wholly owned subsidiary of
Maxxon Inc.,  changed it's name to SEVI Health Company a wholly owned subsidiary
of Maxxon Inc.,  in order to free up the name of Ives Health  Company,  Inc. The
new Ives Health Company was again incorporated as of February 12, 1998. Mr. Ives
became the principal  stockholder of that new company.  Substantially all of the
assets  of the old Ives  Health  Company  which  later  became  a  wholly  owned
subsidiary  of Maxxon,  Inc.,  which later became SEVI Health  Company,  Inc., a
wholly owned  subsidiary of Maxxon,  Inc.,  were  transferred  into New Ives the
registrant.   The  assets  included  inventory,   equipment,   contract  rights,
intellectual  property rights,  and product  specification.  The new Ives Health
Company,  Inc.  commenced a Regulation D, Rule 504 offering in which  additional
capital was raised.

     The Company is engaged in developing and marketing  innovative,  safe, high
quality natural medicines and nutritional supplements,  which are guaranteed for
potency and  purity,  including  homeopathic  medicines,  weight loss  formulas,
natural  remedies,  and nutritional  supplements.  Ives Health Company presently
offers 27  different  products  as  follows:  Aches and  Pains,  Acne,  Allergy,
Antacid,  Arthritis,  Cough & Sore Throat,  Energy,  Headache, and Sinus are all
homeopathic medicines that provide temporary symptomatic treatment for relief of
aches and pains, acne, allergies,  upset stomach, pain in joints, cough and sore
throat,  fatigue,  head pain due to stress, and runny nose and sinus congestion.
Each of the  homeopathic  medicines  comes in tablet  form with 30  tablets in a
bottle and sells for $5.98 per bottle.  Step 1 - Beginning Weight Loss sells for
$19.95,  Step  2 -  Continuing  Weight  Loss  sells  for  $36.95,  and  Step 3 -
Maintaining  Weight  Loss  sells for  $30.95.  Other  products  are as  follows:
L-Chromatine - affects fat metabolism  while aiding muscle mass gain - $9.95 for
60 tablets  in a bottle,  De-Tox -  designed  to cleanse  and purify the body of
toxins - $3.65 for 9 tablets in a bottle,  Flora-Plus  - provides  bacteria  and
enzymes which improves digestion - $9.95 for 30 tablets in a bottle,  Poly-Pep -
Free form amino  acids which help  improve  nutrient  absorption  - $9.95 for 30
tablets in a bottle,  Orangetic - A high energy  performance  drink containing a
specific blend of nutrients - $19.95 for 30 day supply in powder form, Arthritis
Formula - Hydrolyzed  collagen  peptides which feed the joints - $48.00 for a 30
day supply in powder  form,  Antioxidant  - Helps  eliminate  free  radicals and
peroxides in the blood - $11.95 for 60 tablets in a bottle, Cholest-Away - Helps
lower and control cholesterol and triglyceride levels - $21.30 for 60 tablets in
a bottle,  Immune 2000 - Boosts immune system function while reducing  secondary
infections  - $19.85  for 60 tablets  in a bottle,  Prostate  Formula - enhances
overall  prostate  health - $39.50 for a three  month  supply,  270 tablets in a
bottle,  PMS  Formula  - Helps  build  optimum  levels  of  hormonal  balancers;
decreases  cramping,  nausea and headache during  menstruation - $10.95 for 15cc
liquid in a bottle, Relaxagent - relieves stress without drowsiness - $15.95 for
90 tablets in a bottle,  Trace  Minerals - Achieves RDA blood levels of 77 trace
minerals - $11.20 for 120 tablets in a bottle,  and VEGI BEARS (original  flavor
and sour) - a nutritional snack food - $5.99 for 60 bears in a box..

     The  Company  sells  to  wholesale  pharmacy  distributors,  various  chain
pharmacies, and independent retail pharmacies.  Three of the Company's principal
distribution alliances are with Albertsons,  Winn Dixie, and Dillons with over a
1000 pharmacy  locations,  as well as over 700  independent  retail  pharmacies,
distributing IHC's products in 36 states.

<PAGE>

Item 1. Continued

     During 1999 Ives  announced a new product called Immune 2000. All rights to
this product were  purchased  from Dr. Robert  Slayton Bedeen in July of 1999 as
part  of the  Quantum  Resources  acquisition.  Immune  2000 is a  product  that
resulted from 10 years of research and  development.  It has been tested on AIDS
patients and significantly increased their immune system function while reducing
secondary infections, offering them a better quality of life.

     The  principal   suppliers  of  Ives'  raw  materials  are:   International
Formulation and Manufacturing (IFM), Vegi Snack Foods, Inc., Summa Laboratories,
Inc.; Animal Technologies, Inc. and American Labs.

     Ives primary  distribution  focus is through  regional  and national  chain
pharmacies.  Ives is currently distributing through Mays, Drug Warehouse,  Price
Mart,  Horizon,  Pamida and The Medicine  Shoppes  (these are regional  chains).
National  chains  currently  selling  our  products  on  a  regional  basis  are
Albertsons (2700 national locations), Dillons and Winn-Dixie (1200 plus national
locations).  Walgreens,  K-Mart, and Eckerds are our next three targeted chains.
Walgreens,  K-Mart, and Eckerds have expressed interest in Ives products.  While
there are no  distributor  agreements  with these  companies at this time,  Ives
anticipates  that such  agreements will be entered into with each company in the
near future. Discussions are continuing with these companies as well as Krogers,
CVS, Brookshire, Publix, and Randalls, and Ives expects to execute agreements in
the late 1st quarter or early 2nd  quarter,  2000,  with many of these  chains..
Ives  estimates that 70% of our  distribution  will be through large grocery and
pharmaceutical chain stores.

     Ives is dependent at this time upon  product  sales to 3 large  grocery and
pharmaceutical  chains,  Albertsons,  Winn  Dixie and  Dillons,  which  have 318
stores,  707 stores  and 71  stores,  respectively,  currently  purchasing  Ives
products.  As the number of customers  increases,  the  dependence  of Ives upon
these chains will decrease.  Ives  anticipates that the growth of the acceptance
of its  products  will  result in the  addition of other  large  grocery  and/or
pharmaceutical chains as customers.

     IHC has an  exclusive  license  agreement  with Dr.  Robert  Slayton-Bedeen
relating to certain Technology developed by Dr. Bedeen. A Royalty agreement with
Dr. Bedeen reads as follows: a) Ten percent (10%) of the first $100,000 and five
percent (5%) on the excess over $100,000 of the adjusted sales revenue  actually
received by Licensee  (gross  revenue  received from sales of Licensed  Products
less 28%)  during  the first  five (5) years of the term of this  agreement.  b)
Three percent (3%) of the adjusted  sales revenue  during the second five years.
c) Two percent (2%) of the adjusted  sales revenue  during the  remaining  forty
(40) years. On November 30, 1998, the Company purchased for $10,000 and expensed
the cost of the royalty provision that was required under the License Agreement.
The purchase  thereby  eliminated any royalty  payments to the previous owner of
the technology.

     The  purpose of the  license  agreement  with Dr.  Bedeen was to obtain all
rights to  formulations  (including  the rights to  manufacture,  distribute and
sell) that Dr. Bedeen had developed with respect to products named, Immune 2000,
T-factor and a revolutionary burn creme. This agreement has not been significant
to Ives Health Company in the past. This agreement will be a significant part of
Ives  year 2000  expansion.  The  aforementioned  products  will be the  primary
products  sold in the new Hospital and Doctor  Direct  Division of Ives which is
scheduled to be created in the spring of 2000.

     IHC's research and development  department  currently  operates as follows:
internal tracking,  quality control, test results, product development and other
important data are done internally in conjunction  with an outside joint venture
with Albertsons, which is overseen by Dr. Ruth Miller. Through December 31, 1999
Ives has spent an estimate of $50,000, which includes R & D employee's wages.

     The Company had 14 full-time  employees at the year ended December 31, 1998
and 14 full-time employees as of December 31, 1999.

Item 2. Description of Property:

     The  Company  owns  land  and  building  at 817  North  J.M.  Davis  Blvd.,
Claremore,  OK 74017, and all furniture,  fixtures, and equipment.  The land and
building has a mortgage  against it, held by Seven Brothers LLC. The balance due
at December 31, 1998 was $164,574.  The balance due on the building  mortgage as
of December 31, 1999, was $154,305.  The Company purchased the land (.565 acres)
and  building  (13,180  sq.  ft.  ) in  July,  1998  for  $270,000,  the cost of
remodeling was $99,747.  The appraised value after remodeling was $462,000.  The
Company carries adequate insurance  coverage on all property and equipment.  The
Ives building at 817 North J.M. Davis Blvd. in Claremore, OK, is used mostly for
packaging,  storage  and  shipping  of Ives  products  and a lesser  part of the
building houses the corporate  offices of the company.  The equipment located in
the building is limited to computers, a labeling machine, two packaging machines
and a forklift.

Item 3. Legal Proceedings

     The  Company  is  defendant  in  lawsuits   arising  from  normal  business
activities.  Management has reviewed  pending  litigation with legal counsel and
believes  that the action is without  merit or that the ultimate  liability,  if
any, resulting from it will not materially affect the Company's  earnings,  cash
flows or financial position.

<PAGE>

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

     None.

                                     PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters:

     Market Information
     ------------------
     The  Company  received  approval  on June 30, 1999 from NASD for its common
stock to be traded publicly on the pink sheets.  Ives' hopes to be listed on the
NASD's  Over-The-Counter  Bulletin Board in the near future.  The trading symbol
for Ives common stock is IVEH.  Quotations  on the OTC  Bulletin  Board and pink
sheets reflect bid and ask quotations,  may reflect inter-dealer prices, without
retail  markup,   mark-down  or  commission,   and  may  not  represent   actual
transactions.  The opening  price for Ives'  common  stock was  $2.00/share  and
trading has ranged from $0.03/share to $2.00/share in the pink sheets.

     Sales of Common Stock during 1998:
     ----------------------------------
     At date of  incorporation  ,  February  12,  1998,  50,000,000  shares were
authorized of which  7,000,000  were issued to M. Keith Ives and 1,700,000  were
issued to Maxxon. Inc. During 1998 the Company has been involved in a continuous
offering of its common stock  pursuant to SEC  Regulation D, Rule 504. That rule
was amended effective April 7, 1999. Pursuant to that Rule,  generally an issuer
may raise up to  $1,000,000  through the sale of its  securities in any 12 month
period of time without federal registration.

     From April 20, 1998  through  December  31, 1998 the Company  sold  877,650
shares of common stock to various purchasers  pursuant to Rule 504 of Regulation
D and Section 4 (2) of the  Securities  Act of 1933.  The 552,650  shares issued
under the 504 offering to individual  investors were sold at an average purchase
price of $0.72 per share. The 305,000  restricted shares issued to employees and
officers,  and 20,000  restricted  shares issued to Summa  Laboratories  for the
purchase  of rights to product  formulas  were issued at par value at an average
price of $0.001 per share. The stock  certificates for Summa  Laboratories  were
prepared in 1998, but the terms of the agreement  were not completed  until 1999
when the Summa formula  investment  was recorded at a fair market value of $0.80
per share.  The total  shares  issued and  outstanding  at Dec. 31,  1998-,  was
9,577,650 shares.

     Sales of Common Stock during 1999:
     ----------------------------------
     From  January 1, 1999  through  December  31, 1999 the Company sold 400,736
shares of common stock to various purchasers  pursuant to Rule 504 of Regulation
D and Section 4 (2) of the Securities  Act of 1933.  The average  purchase price
was $0.72 per share which includes commissions, fees and expenses.

     During  1999  the  Company  issued   2,868,560  common  shares  to  various
employees,  officers  and  directors  pursuant to Rule 504 of  Regulation  D and
Section  4 (2) of the  Securities  Act of 1933.  These  shares  were  issued  to
employees and officers for services rendered and were issued at an average price
of $0.05 per share.

     Common Stock Subject to Options or Warrants:
     --------------------------------------------
     None.

     Holders:
     --------
     As of March 23, 2000, the Company had 127 shareholders of record.

     Cash Dividends:
     ---------------
     The Company has not paid any cash  dividends  on its Common  Stock and does
not foresee that such dividends will be paid in the near future.

Item 6. Plan of Operation:

     There is no assurance  that  material  expenses  will not be incurred  that
could  jeopardize the stability of the Company nor that  shareholders  or future
shareholders will have or make available sufficient funds to cover such material
expenses.  However, it is the belief of the Company,  that the following summary
of the Company should occur.

     The  overall  goal of the  management  team is to develop  IHC into a major
player in the arena of natural health products.  Objectives leading to that goal
include being a structured  and  professional  organization  of integrity,  thus
maintaining strong  relationships with suppliers and customers.  Marketing goals
include  having  products in 15,000  pharmacies in the U.S. by the year 2001. Of
these 15,000 pharmacies,  30% are expected to be independent  pharmacies and 70%
are expected to be regional and national chains,  i.e.  Albertsons,  Winn-Dixie,
Wal-Mart, Walgreens, K-Mart, Eckerds, etc.

<PAGE>

Item 6 continued

     As of  January  31,  2000,  Ives  products  are  sold  in  146  independent
pharmacies and 1096 chain  pharmacies (318 Albertsons,  707 Winn Dixies,  and 71
Dillons) for a total of 1242 pharmacy  locations that carry our products.  There
are 2400  additional  Albertsons  stores that Ives has the  opportunity  to sell
products to. It is Ives plan to sell  products  nationwide by selling to as many
chain pharmacies as possible by the end of the year 2000. Most stores that carry
Ives products vend our entire product line.  Ives has no exclusive  arrangements
for the wholesale distribution of our products.

     The  Company's  products can  generally  be grouped  into five  categories:
Homeopathic  medicines (pure medicines),  Weight  Management,  Natural Remedies,
Nutritional food  supplements,  and Health and Beauty Aids. IHC will continue to
implement the same positive  marketing strategy that brought the Company to this
point. It will sell the bulk of its product through  wholesale  distributors and
play off the success of its current  wholesalers and generate  business with new
wholesalers.  Also  IHC  will  continue  to seek  regional  and  national  chain
pharmacies.  Other  strategies  include  attending  more  pharmacy  trade shows,
getting  endorsements from strategic pharmacy,  physician,  and health insurance
providers (by conducting our innovative validation testing),  hiring more direct
sales representatives,  and increasing regional advertising while expanding to a
national advertising campaign. Our greatest need is advertising dollars in order
to create more consumer awareness and demand (mass over time).

     The Company's powders,  capsules,  tablets and liquids in bulk are produced
by  International  Formulation & Manufacturing,  Inc. of San Diego,  California,
Summa RX Laboratories,  Inc. in Mineral Wells, Texas, Animal Technologies,  Inc.
in  Tyler,  Texas,  and  American  Labs,  Inc.  of Omaha,  Nebraska.  All of the
preceding companies are FDA registered drug companies. All final packaging, i.e.
(shrink-wrapping,  UPC coding,  expiration dating, and quality control, etc.) is
performed by IHC in Claremore,  Oklahoma. Future products will be handled on the
same basis.  The long-term goal of IHC is to manufacture  products from start to
finish.

     Management  of Ives  believes  that  Ives is a leader  in the  industry  in
promotional  incentives  and profit  margins for its products.  In the July 1999
issue of Pharmacy  Today  Magazine  it was stated  that the  average  margins on
over-the-counter  pharmaceutical  products  is 23% and the  average  margins  on
prescription  drugs is 7-11% with a total average margin for  pharmaceuticals of
17%. Ives Health  Company  products  boast an average margin of 38% which is far
above our competitors.  The average incentive by other pharmaceutical  companies
to wholesalers and brokers is 3%. Ives give a 5-8% commission to wholesalers and
brokers.

     Management  believes  that to achieve its  objectives , the Company  should
seek  additional  funding of $750,000,  whether it be through  long-term debt or
additional sales of stock or both. The funds will be used for company expansion,
which will include the following: increasing inventory, significantly increasing
advertising  expenses,  creating a multi-level  marketing division where private
label products will be sold to consumers directly over the internet,  creating a
hospital and doctor direct division where the products purchased from Dr. Bedeen
and Quantum  Resources  will be sold directly to hospitals and doctors  offices,
creating an international  sales division where products will be sold abroad and
retirement of existing debt.  Management also believes that the 4th quarter 1999
refocus on large chain pharmacy sales should significantly increase sales of the
company which combined with the above company expansion will result in projected
gross sales of $2 million for the year 2000 with positive net earnings.

     Due to the  refocus on large  chain  pharmacy  sales in the 4th  quarter of
1999,  company financial  conditions had significantly  improved by December 31,
1999.  As of  January  31,  2000,  Ives  Health  Company  was  posting  positive
operational cash flow. Ives is presently providing working capital from the sale
of inventory;  however,  is seeking to borrow  additional  working capital which
will be used to implement the aforementioned company expansion.

<PAGE>

Item 7. Financial Statements

                            Ives Health Company, Inc.
                            -------------------------
                          (A Development Stage Company)
                          -----------------------------
                           December 31, 1999 and 1998
                           --------------------------

                                    CONTENTS
                                    --------

Independent Auditor's Report                                                   1

FINANCIAL STATEMENTS

         Balance Sheets                                                        2

         Statements of Operations                                              3

         Statements of Cash Flows                                              4

         Statements of Shareholders' Equity                                    5

         NOTES TO FINANCIAL STATEMENTS                                      6-12

<PAGE>

INDEPENDENT AUDITOR'S REPORT

     To the Board of Directors and Shareholders of Ives Health Company, Inc.:

     We have  audited  the  balance  sheet  of Ives  Health  Company,  Inc.,  (A
     Development  Stage Company),  an Oklahoma  Corporation,  as of December 31,
     1999 and 1998 and the related statements of operation, shareholders' equity
     and cash flows from January 1, 1998 (inception) to December 31, 1999. These
     financial  statements are the  responsibility of the Company's  management.
     Our  responsibility is to express an opinion on these financial  statements
     based on our audit.

     We conducted  our 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  misstatement.  An audit includes  examining,  on a test basis,
     evidence   supporting   the  amounts  and   disclosures  in  the  financial
     statements. An audit also includes assessing the accounting principles used
     and  significant  estimates made by management,  as well as evaluat ing the
     overall  financial  statement  presentation.  We  believe  that our  audits
     provides a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
     in all material  respects,  the financial  position of Ives Health Company,
     Inc., (A Development  Stage Company),  as of December 31, 1999 and 1998 and
     the  results  of its  operations  and its cash  flows for the years  ending
     December 31, 1999 and 1998 and from January 1, 1998 (inception) to December
     31, 1999 in conformity with generally accepted accounting principles.

     HENDERSON SUTTON & CO., P.C.

     /s/ HENDERSON SUTTON & CO., P.C.
     --------------------------------
     Certified Public Accountants
     Tulsa, Oklahoma
     March 15, 2000

                                       1
<PAGE>

Item 7. Financial Statements continued:

                            IVES HEALTH COMPANY, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998

                                     ASSETS

                                                         1999           1998
                                                     -----------    -----------
Current Assets

     Cash                                            $     3,165    $    24,787
     Accounts Receivable                                  78,704          8,853
          Less Allowance For Doubtful Accounts           (10,000)          --
     Inventories                                         153,970        156,819
     Prepaid expenses                                    110,952           --
     Loans to officers                                     5,000           --
                                                     -----------    -----------

         Total Current Assets                            341,791        190,459
                                                     -----------    -----------

Property and Equipment

     Property, Plant & Equipment                         491,180        445,586
     Less Accumulated Depreciation                        62,097         21,136
                                                     -----------    -----------

         Net Property and Equipment                      429,083        424,450
                                                     -----------    -----------

Other Assets

     Goodwill-net                                        284,700        306,600
     Deposits                                                600            900
     Marketing design program-net                         13,849         31,778
     Investments                                          39,825         34,055
                                                     -----------    -----------

         Total Other Assets                              338,974        373,333
                                                     -----------    -----------

    TOTAL ASSETS                                     $ 1,109,848    $   988,242
                                                     -----------    -----------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

     Accounts Payable                                $   252,847    $   179,940
     Payroll & sales taxes payable                        22,924         11,092
     Accrued Expenses                                     11,283         22,998
     Note payable to officer                             121,137         41,752
     Current Portion of Long Term Debt                   151,434        272,219
                                                     -----------    -----------

         Current Liabilities                             559,625        528,000
                                                     -----------    -----------

Long-Term Liabilities

      Notes Payable                                      681,758        556,904
      Less current portion long-ter  debt               (151,434)       272,219
                                                     -----------    -----------

         Total Long-term Liabilitie                      530,324        284,685
                                                     -----------    -----------

         Total Liabilities                             1,089,949        812,685
                                                     -----------    -----------

Shareholders' Equity

      Common Stock (Par $.001)                            12,847          9,578
            12,846,946 and 9,577,650 outstanding at
            December 31, 1999 and 1998 respectively

      Additional Paid in Capital                       1,100,040        668,725
      Retained earnings                               (1,092,988)      (502,746)
                                                     -----------    -----------

         Total Shareholder's Equity                       19,899        175,556
                                                     -----------    -----------

      TOTAL LIABILITIES & SHAREHOLDER'S EQUITY       $ 1,109,848    $   988,242
                                                     -----------    -----------

   (The accompanying notes are an integral part of these Financial Statements)

                                       2
<PAGE>

Item 7. Financial Statements continued:

                            IVES HEALTH COMPANY, INC.
                          (A Development Stage Company)
                             STATEMENT OF OPERATIONS
                               FOR THE YEARS ENDED
                           DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                          JANUARY 1, 1998
                                            (INCEPTION)
REVENUES                               TO DECEMBER 31, 1999        1999            1998
                                       --------------------    ------------    ------------
<S>                                         <C>                <C>             <C>
     Sales                                  $    864,421       $    469,567    $    394,854

      Cost of Sales                              522,565            330,526         192,039
                                            ------------       ------------    ------------

         Gross Profit                            341,856            139,041         202,815
                                            ------------       ------------    ------------


OPERATING EXPENSES

        Selling Expenses                         525,979            196,830         329,149
        General & Administrative Expenses        856,256            532,563         323,693
        Depreciation & Amortization              105,222             77,694          27,528
        Interest & Factoring Expense              97,387             72,196          25,191
                                            ------------       ------------    ------------

         Total Operating Expenses              1,584,844            879,283         705,561
                                            ------------       ------------    ------------

NET OPERATING LOSS                            (1,242,988)          (740,242)       (502,746)

         Gain On Contract Default                150,000            150,000            --

         Income Tax Expense                         --                 --              --
                                            ------------       ------------    ------------

                  NET LOSS                  $ (1,092,988)      $   (590,242)   $   (502,746)
                                            ------------       ------------    ------------

Weighted Average of Shares Outstanding                           10,146,618       9,034,076
                                                               ------------    ------------

Net Loss Per Share                                             $      (.058)   $      (.056)
                                                               ============    ============
</TABLE>

   The accompanying notes are an integral part of these Financial Statements.

                                       3
<PAGE>



Item 7 Financial Statements (Continued)

                            IVES HEALTH COMPANY, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                  FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                    JANUARY 1, 1998
                                                      (INCEPTION)
                                                  TO DECEMBER 31, 1999        1999           1998
                                                  --------------------     -----------    -----------
Cash Flows From Operating Activities
<S>                                                   <C>                  <C>            <C>
   Net loss from operations                           $(1,092,988)         $  (590,242)   $  (502,746)
   Depreciation                                            50,529               40,961          9,568
   Amortization                                            62,738               36,641         26,097
   Stock Issued for services                              151,436              151,436           --
  (Increase) decrease in accounts receivable              (68,704)             (59,851)        (8,853)
  (Increase) decrease in inventories                     (153,971)               2,848       (156,819)
  (Increase) decrease in prepaid expenses                (110,951)            (110,951)          --
   Increase(decrease) in accounts payable                 244,234               72,908        171,326
   Increase (decrease) in accrued payroll taxes            22,924               11,832         11,092
   Increase (decrease) in accrued expenses                 11,282              (11,716)        22,998
                                                      -----------          -----------    -----------
   Net Cash Provided (Used) by Operating Activities      (883,471)            (456,134)      (427,337)
                                                      -----------          -----------    -----------
Cash Flows From Investing Activities
   Loans to Officers                                       (5,000)              (5,000)          --
   Property Plant and Equipment                          (479,612)             (45,594)      (434,018)
   Deposits                                                  (600)                 300           (900)
   Investments                                            (22,557)              13,418        (35,975)
   Other Assets                                           (34,055)                --          (34,055)
                                                      -----------          -----------    -----------
   Net Cash Provided (Used) by Investing Activities      (541,824)             (36,876)      (504,948)
                                                      -----------          -----------    -----------
Cash Flows From Financing Activities
   Notes payable to Officers                               45,898                4,147         41,751
   Long term debt                                         756,758              199,854        556,904
   Sale of Common Stock for Cash,                         625,804              267,387        358,417
   Net of offering cost
                                                      -----------          -----------    -----------

   Net Cash Provided (Used) by Financing Activities     1,428,460              471,388        957,072
                                                      -----------          -----------    -----------
NET INCREASE (DECREASE) IN CASH                             3,165              (21,622)        24,787

CASH AT BEGINNING OF YEAR                                  24,787               24,787           --

CASH AT END OF YEAR                                   $    27,952          $     3,165    $    24,787
                                                      ===========          ===========    ===========

Non-cash financing & investing activities:

   Stock issued for product formulas                  $    16,000          $    16,000    $      --
                                                      ===========          ===========    ===========
</TABLE>

  (The accompanying notes are an integral part of these Financial Statements)

                                       4
<PAGE>

Item 7. Financial Statements continued:

                            IVES HEALTH COMPANY, INC.
                          (A Development Stage Company)
                  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                               FOR THE YEARS ENDED
                           DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                                                Deficit
                                            Price          Common Stock                        During the
                                             Per           ------------           Paid-in      Development
                                            Share      Shares         Amount      Capital         Stage
                                           ---------------------------------------------------------------
<S>                                        <C>       <C>             <C>         <C>           <C>
BALANCE AT JANUARY 1, 1998                 $   --           --       $    --     $       --    $        --

Shares Issued in Conjunction With            .001    8,700,000         8,700          6,000             --
The Maxxon/Ives Split-Off Transaction

To Record Goodwill                                                                  328,500             --

Shares Issued Under 504 Offering              .72      552,650           553             39             --

Shares Issued to Employees & Officers        .001      305,000           305           (305)            --

Shares Issued for Summa License              .001       20,000            20            (20)            --

Less Offering Cost                                                                  (64,112)            --

Net Loss For the Year                                                                             (502,746)
                                           ---------------------------------------------------------------


BALANCE DECEMBER 31, 1998                            9,577,650         9,578        668,725       (502,746)
                                           ---------------------------------------------------------------


Shares Issued to Employees & Officers         .05    2,868,560         2,858        148,578             --
for Services

Shares Issued Under 504 Offering              .72      400,736           411        289,847

Shares Issued for Summa License               .80                                    16,000

Less Offering Cost                                                                  (23,110)

Net Loss For The Year                                                                             (590,242)
                                           ---------------------------------------------------------------

BALANCE AT DECEMBER 31, 1999                        12,846,946       $12,847     $1,100,040    $(1,092,988)
                                           ---------------------------------------------------------------
</TABLE>

   (The Accompanying notes are an integral part of these Financial Statements)

                                       5
<PAGE>

Item 7. Financial Statements continued:

                            IVES HEALTH COMPANY, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 1 - SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

This summary of significant  accounting  policies of Ives Health  Company,  Inc.
(the "Company") is presented to assist in understanding the Company's  financial
Statements.  The  financial  statements  and  notes are  representations  of the
Company's  management who is responsible  for their  integrity and  objectivity.
These accounting  policies conform to generally accepted  accounting  principles
and  have  been  consistently  applied  in the  presentation  of  the  financial
statements.

ORGANIZATION

Ives Health  Company,  Inc.  ("IVES" or the "Company") was formed pursuant to an
agreement  between  Maxxon,  Inc.  and M.  Keith  Ives,  entered  into  and made
effective  December 31, 1997. IVES, (a wholly owned subsidiary of Maxxon,  Inc.)
and Maxxon,  Inc.  agreed to separate.  The  separation was  accomplished  by, a
non-pro-rata  split-off of non-monetary  assets in accordance with Issue 96-4 of
the Emerging Issues Task Force, a recapitalization and the issuance of 7,000,000
shares of new Ives common stock to M. Keith Ives,  and  1,700,000  shares of new
Ives common shares to Maxxon, Inc. The new IVES began operations January 1, 1998
and was incorporated in Oklahoma on February 12, 1998.

Ives Health Company, Inc. (A Development Stage Company) is engaged in developing
and marketing innovative,  safe, high quality natural non-prescription medicines
and nutritional supplements. IVES products, which are guaranteed for potency and
purity,  include natural  medicines,  herbal  formulas,  vitamins,  minerals and
homeopathic medicines. The Company wholesales the products to pharmacies.

CASH AND CASH EQUIVALENTS

The Company  considers all highly liquid assets with  maturities of three months
or less to be cash equivalents.

INVENTORY

Inventory  consists  primarily  of  bulk  product  that  will be  packaged  into
capsules,  bottled,  and packaged for  distribution  to customers.  Inventory is
stated at the  lower of cost or  market  value  using  the  first-in,  first-out
method.  Obsolete products are written off in the year they are determined to be
obsolete.

FISCAL YEAR END

The Company's fiscal year ends on December 31.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost. All material  property and equipment
additions are  capitalized  and  depreciated on a  straight-line  basis over the
estimated useful life of the asset.

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 contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

<PAGE>

Item 7. Financial Statements continued:

INCOME TAXES

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," which requires the measurement
of deferred tax assets for deductible  temporary  differences and operating loss
carry-forwards,   and  of  deferred  tax  liabilities   for  taxable   temporary
differences.  Measurement of current and deferred tax  liabilities and assets is
based on  provisions  of enacted tax law.  The effects of future  changes in tax
laws or rates are not  included in the  measurement.  Valuation  allowances  are
established  when necessary to reduce deferred tax assets to the amount expected
to be  realized.  Income tax  expense is the tax  payable for the period and the
change during the period in deferred tax assets and liabilities.

EARNINGS PER SHARE

Earnings (Loss) per Share
-------------------------
The  Company  computes  net income per share in  accordance  with SFAS No.  128,
"Earnings per Share" and SEC Staff Accounting  Bulletin No. 98 ("SAB 98"). Under
provision  of SFAS No.  128 and SAB 98 basic  net  income  (loss)  per  share is
calculated by dividing net income (loss)  available to common  stockholders  for
the  period  by the  weighted  average  shares of  common  stock of the  Company
outstanding  during the  period.  Diluted  net income per share is  computed  by
dividing the net income for the period by the weighted  average number of common
and common equivalent shares  outstanding  during the period. The calculation of
fully  diluted  income  (loss) per share of common  stock  assumes the  dilutive
effect of stock options outstanding.

Segment Information
-------------------
Effective  January 1, 1998, the Company  adopted the provisions of SFAS No. 131,
"Disclosures  about  Segments of an  Enterprise  and Related  Information."  The
Company  identifies  its  operating  segments  based  on  business   activities,
management  responsibility  and  geographical  location.  During the years ended
December 31, 1999 and 1998, the Company  operated in the single business segment
engaged in developing and marketing selected healthcare products.

New Accounting Standards
------------------------
The Company adopted SFAS No. 130, "Reporting  Comprehensive Income" and SFAS No.
131,  "Disclosures  about  Segments of an  Enterprise  and Related  Information"
during 1998. The Company had no comprehensive income items during 1999 and 1998.
Therefore,  net loss equals  comprehensive  income. The Company operates in only
one  business  segment.  The  company  adopted  SFAS No.  133,  "Accounting  for
Derivative  Investments and Hedging  Activities" during 1999. As of December 31,
1999,  the Company did not engage in hedging  activities  or other  transactions
involving derivatives.

REVENUE RECOGNITION

Revenue is  recognized  monthly  based upon the terms of the sale.  The  Company
issues credit to customers on a discount  basis of 2% if paid within ten days of
the  invoice  or the  full  balance  due  within  thirty  days  of the  invoice.
Management  uses the allowance  method of recognizing bad debts. A provision for
doubtful  accounts was not required at December 31, 1999 and 1998 of $10,000 and
$0, respectively.

NOTE 2 - PROPERTY AND EQUIPMENT

The following is a summary of the major classes of property and equipment:

                                        Estimated
                                       Useful Life     1999       1998
                                       -----------     ----       ----

          Building                       30 years    $249,347   $249,347
          Building Improvements          30 years     100,400    100,400
          Land                                 --      20,000     20,000
          Equipment                      5-7 years     68,387     65,171
          Furniture                      5-7 year      11,075     10,668
          Master Dies                    5 years        4,355         --
          Vehicles                       3 years       37,616         --
                                         ---------   --------   --------
                                                      491,180    445,586
          Accumulated Depreciation                     62,097     21,136
                                                     --------   --------
          Property and equipment (net)               $429,083   $424,450
                                                     --------   --------

<PAGE>

Item 7. Financial Statements continued:

NOTE 3 - OTHER ASSETS

     GOODWILL
     --------
     Effective  December  31,  1997 M. Keith Ives  exchanged  275,360  shares of
     Maxxon Inc.  common  shares valued at $1.01 per share (using the average of
     the last five  trading  days in 1997) for  7,000,000  common  shares of the
     Company's stock.  Maxxon retained 1,700,000 shares of the newly formed Ives
     Health Company,  Inc. After the issuance of the 8,700,000 common shares, M.
     Keith Ives owned 80.5% of the outstanding  shares and Maxxon owned 19.5% of
     the outstanding  shares. The exchange was accounted for as a purchase using
     the fair market value of the Maxxon common stock as consideration for 80.5%
     of the newly formed company.  The transaction was a non-pro-rata  split-off
     of certain  non-monetary  assets,  whereby  Maxxon  exchanged  assets for a
     non-controlling  interest in a new entity.  The transaction was recorded in
     accordance  with the  Emerging  Issues Task Force  Issues # 96-4 and #89-7.
     Goodwill in the amount of $328,500 was recorded with a resulting  credit to
     Paid-in Capital.  The Goodwill is being amortized over its estimated useful
     life of fifteen years.

     INVESTMENT IN LICENSING AND OPTION TO PURCHASE AGREEMENTS
     ---------------------------------------------------------
     On August 24, 1998,  the Company  entered  into a License  Agreement to the
     rights  to  certain  technology  known as (1) the  T-Factor  Immune  System
     Optimizer and (2) The Burn Treatment Therapy.  The rights to the technology
     were acquired for future  development  of the  technology  for the consumer
     market.  The rights to the license,  which included a royalty  provision to
     the  seller  and  extends  through  August  24,  2049,  were  acquired  for
     approximately  $25,000.  The cost  related to the  license  and rights were
     capitalized and is being amortized over five years.

     On July 30, 1999,  the company  purchased for $10,000 and expensed the cost
     of the royalty provision that was required under the License Agreement. The
     purchase  thereby  eliminated any royalty payments to the previous owner of
     the technology.

     In  January  1998,  Ives  Health  Company  paid  $10,000  for the option to
     purchase VEGI-Snack Foods, Inc., where Ives had the exclusive right to sell
     VEGI  BEARS  and  related  products  and  retained  the  right to  purchase
     VEGI-Snack  Foods,  Inc.  until the end of 1999.  The  option  to  purchase
     VEGI-Snack Foods expired at the end of 1999 and the $10,000 investment made
     to secure this purchase option was written off during 1999..

     Investments                           1999       1998
     -----------                           ----       ----

     Veggie Snack Foods                  $     --    $ 10,000
     Quantum License                       34,602      24,602
     Summa Formulas                        16,000          --
                                         --------    --------

              Total Investments          $ 50,602    $ 34,602

              Accumulated Amortization    (10,777)       (547)
                                         --------    --------
                                         $ 39,825    $ 34,055

     Marketing Design Program
     ------------------------
     During  1998,  the  Company  incurred  $35,975  in  costs  related  to  the
     development  of a  marketing  design  program.  During 1999 the program was
     curtailed  and the  cost and  related  accounts  payable  were  reduced  by
     $13,418.  The remaining  costs are expected to benefit the Company over the
     five-year amortization period.

                                           1999        1998
                                           ----        ----

     Marketing design                    $ 22,557    $ 35,975
     Accumulated amortization              (8,708)     (4,197)
                                         --------    --------
     Net capitalized                     $ 13,849    $ 31,788

<PAGE>

Item 7. Financial Statements continued:

NOTE 4 - NOTES PAYABLE-OFFICERS

     During 1998 M. Keith Ives and JoEtta Hughes, officers of the Company loaned
     the Company funds to cover operating expenses. The notes accrue interest at
     a Rate of 10% per year and are payable on demand. During 1998 payments were
     made to the  officer in the amount of $81,711 to reduce the note  balances.
     As of December  31,  1998,  there  remained a balance due JoEtta  Hughes of
     $41,752.  During  1999  certain  officers  &  shareholders  of the  company
     advanced  $270,487  to the  company to cover  certain  operating  expenses.
     During  the year at total of  $191,101  was paid on these  notes  leaving a
     balance due of $121,137 at December 31, 1999.

<TABLE>
<CAPTION>
NOTE 5 - NOTES PAYABLE                                                     1999       1998

         NationsBank, N.A
<S>                                                                      <C>        <C>
               Note dated June 17, 1998 bearing interest @ 9%, due       $ 39,613   $ 48,660
               in sixty monthly installments of $1,097, principle and
               interest through June 2, 2003.  Note is secured by
               inventory and equipment, a security agreement with
               William D. Elliott, a shareholder and by a personal
               guarantee of M. Keith Ives, an officer and major
               shareholder of the Company.  Certain personal assets of
               Mr. Ives also collateralize the note.

         Seven Brothers, LLC
               Interest @ 8.5%, due in one hundred twenty monthly        $154,305   $165,840
               installments of $1,888, principle and interest, through
               August 1, 2008.  Note is secured by land and building.

               Interest @ 45% calculated according to the actuarial            --   $ 30,000
               Method, principle and interest due December 20, 1998.

         Dr. Bedeen - Balance due on technology purchase                       --   $  9,600
         Paid during 1999.

         State Bank & Trust, N.A
               Interest @ Wall Street Prime plus 1.5%, currently               --   $102,804
               9.25%, due January 25, 1999.
               Paid with financing from Armstrong Bank.  This note
               was secured by personal stock and an annuity
               owned by M. Keith Ives.  Mr. Ives also personally
               Guaranteed the note.

         State Bank & Trust, N.A
               Interest @ Wall Street Prime plus 1.5%, currently               --   $ 20,000
               9.25%, payable monthly with principle due January
               25, 1999. The note was retired with proceeds from
               the Armstrong Bank financing.  Mr. Ives personally
               guaranteed this note.

         Local America Bank
               Interest @ 9.99%, in monthly installments of                    --   $ 20,000
               approximately $1,200 monthly through June 15, 2000,
               personally guaranteed by M. Keith Ives and secured
               by personal automobiles.  Paid during 1999.

<PAGE>

Item 7.  Financial Statements continued:

NOTE 5 - NOTES PAYABLE (CONTINUED)                                         1999       1998

         Dr. Craft Loan Agreement
               Dr. Craft advanced Ives $160,000 under an agreement             --   $160,000
               to provide additional funding.  Dr. Craft defaulted on
               agreement and under terms of agreement $160,000 was
               retained by Ives and booked as gain on contract default.

         Armstrong Bank
               Interest @ 9.30%.  Originated July 9, 1999                $121,382         --
               Personally guaranteed by Dr. Bill Elliot (shareholder)
               and M. Keith Ives.

         Armstrong Bank
               Interest @ 8.75%.  Originated July 9, 1999.               $273,849         --
               Personally guaranteed by Dr. Bill Elliot (shareholder)
               and M. Keith Ives.

         Armstrong Bank
               Interest @ 9.50 %.  Originated June 18, 1999              $ 42,379         --
               Personally guaranteed by Dr. Bill Elliot (shareholder)
               and M. Keith Ives.

         State Bank
               Interest @ 10.12%.  Originated September 24, 1999         $ 19,755         --
               Personally guaranteed by M. Keith Ives.

         Ford Motor Credit
               Interest @ 8.90%.  Originated August 3, 1999.  Loans      $ 30,476         --
               to purchase three automobiles.  Secured
               by three 1998 Ford Taurus automobiles. Monthly
               payment equals $1075.

         TOTAL NOTES PAYABLE                                             $681,759   $556,904
                                                                         --------   --------

         Less current maturities:                                        $151,434   $272,219
                                                                         --------   --------

         Long-term Debt                                                  $530,325   $284,685
                                                                         ========   ========
</TABLE>

     Maturities of long-term debt is as follows for the next five years:

               2000                           $ 151,434
               2001                             116,760
               2002                             122,215
               2003                             107,204
               2004                             105,682
               Thereafter                        78,464
                                              ---------
               Total                          $ 681,759
                                              ---------

<PAGE>

Item 7. Financial Statements continued:

NOTE 6 - INCOME TAXES

     The Company has incurred net  operating  losses since  inception  and has a
     loss  carry-forward  of  approximately  $1,093,000  at December  31,  1999,
     expiring  in  years  beginning  2014.  Deferred  tax  assets  have not been
     recorded for future  reduction in income taxes that may result from the net
     operating loss carry-forward.

     The deferred tax assets and liabilities are as follows at December 31,1999:

                                               1999          1998
                                           -----------    ---------
     Net operating loss carry-forward      $ 1,092,988    $ 502,746
     Depreciation                               16,480        8,252
                                           -----------    ---------
            Total                            1,076,508      510,998
     Less valuation allowance               (1,076,508)    (510,998)
                                           -----------    ---------

     Net Deferred Tax Liability            $         0    $       0
                                           -----------    ---------


     Deferred   taxes  reflect  a  combined   federal  and  state  tax  rate  of
     approximately 40%. For financial reporting purposes,  a valuation allowance
     equal to the deferred tax asset has been established in accordance with the
     provisions of FASB Statement No. 109,  "Accounting  for Income Taxes".  The
     Company will continually review the adequacy of the valuation allowance and
     will recognize these benefits only as assessment  indicates that it is more
     likely than not that the benefits will be realized.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

     LITIGATION

     The  Company  is  defendant  in  lawsuits   arising  from  normal  business
     activities.  Management has reviewed pending  litigation with legal counsel
     and  believes  that the  action  is  without  merit  or that  the  ultimate
     liability,  if any,  resulting  from it will  not have a  material  adverse
     affect on the Company's earnings, cash flows or financial position.

NOTE 8 - COMMON STOCK AND ADDITIONAL PAID-IN-CAPITAL

     In February 11, 1998, the Company issued  7,000,000  shares of common stock
     to M. Keith Ives and 1,700,000 common shares to Maxxon, Inc., in accordance
     with the separation  agreement between M. Keith Ives and Maxxon,  Inc.. The
     shares were issued in a tax free exchange under the terms of the agreement.

     From April 20, 1998  through  December  31, 1998 the Company  sold  877,650
     shares  of  common  stock to  various  purchasers  pursuant  to Rule 504 of
     Regulation D and Section 4 (2) of the  Securities  Act of 1933. The 552,650
     shares issued under the 504 offering to individual  investors  were sold at
     an average purchase price of $0.72 per share. The 305,000 restricted shares
     issued to employees and officers,  and 20,000  restricted  shares issued to
     Summa  Laboratories  for the  purchase of rights to product  formulas  were
     issued at par value at an  average  price of $0.001  per  share.  The stock
     certificates for Summa Laboratories were prepared in 1998, but the terms of
     the  agreement  were  not  completed  until  1999  when the  Summa  formula
     investment was recorded at a fair market value of $0.80 per share.

     From  January 1, 1999  through  December  31, 1999 the Company sold 400,736
     shares  of  common  stock to  various  purchasers  pursuant  to Rule 504 of
     Regulation D and Section 4 (2) of the  Securities  Act of 1933. The average
     purchase  price was $0.72 per share which  includes  commissions,  fees and
     expenses.

     During 1999 the Company issued 2,868,560 to various employees, officers and
     directors  pursuant  to Rule 504 of  Regulation  D and Section 4 (2) of the
     Securities Act of 1933. These shares were issued to employees, officers and
     directors  for  services  rendered  and were issued at an average  price of
     $0.05 per share.

<PAGE>

Item 7. Financial Statements continued:

NOTE 9 - RELATED PARTY TRANSACTIONS

     During  the year ended  December  31,  1998,  officers  loaned the  Company
     $91,044 to cover  certain  operating  expenses.  During  1998,  the Company
     repaid a total of $81,711.  The remaining note  payable-officer  balance of
     $41,752  accrues  interest at a rate of 10% per year.  During 1999  certain
     officers & shareholders of the company advanced  $270,487 to the company to
     cover certain operating  expenses.  During the year a total of $191,101 was
     paid on these notes leaving a balance due of $121,137 at December 31, 1999.

NOTE 10 - EARNING PER SHARE

     The following table  reconciles the number of common shares  outstanding as
     shown  on the  Balance  Sheet  with  the  weighted  average  common  shares
     outstanding  as shown on the  Statement  of  Operations  for the year ended
     December 31, 1999 and 1998.

                                                     1999        1998
                                                     ----        ----
     Common shares outstanding                    12,846,946   9,577,650

     Effect of using weighted average common
     And Common equivalent shares outstanding      2,700,328     543,574
                                                  ----------   ---------
     Weighted average common shares outstanding   10,146,618   9,034,076
                                                  ----------   ---------


Item 8. Changes In and  Disagreements with Accountants on Accounting and
        Financial Disclosure:

          None.

                                    PART III

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

     Directors are elected for one-year  terms or until the next annual  meeting
of  shareholders  and until their  successors  are dully elected and  qualified.
Officers serve at the discretion of the Board of Directors. Only one

     Director is not an employee of the Company and only devotes time  necessary
for the meetings.

     The Directors and Officers of the  Registrant as of the date of this report
are as follows:

     Name                        Age         Position
     ---------------------------------------------------------------------------
     M. Keith Ives               42          President and Director
     Michael Harrison            45          CEO and Director
     Perry Ives                  36          Vice-president and Director
     JoEtta Hughes               43          CFO and Director
     Tony Fauver                 44          Production and QC Mgr. And Director
     Jim Jones                   68          Director, Member
     ---------------------------------------------------------------------------

(a)  Identify directors and executive officers.

     (1) - (4) Names, ages, positions, offices, business experience.

     A) M. Keith Ives, age 42, is President,  of Ives Health Company.  Mr. Ives,
upon graduating from college,  went to work for McKesson Drug Co. as a territory
sales  manager  where he gained  expertise  in sales,  pharmacology,  marketing,
business management,  and business  consulting.  After seven years with McKesson
Drug Co.  Mr.  Ives  decided  to start his own  pharmaceutical  company  for two
primary  reasons ( to specialize in natural  preventive  health  products and to
find products  which would help improve the quality of life for his wife who had
contracted Multiple Sclerosis).  To accomplish this goal, he bought an insurance
agency  to gain  experience  in  personnel  management,  sales  management,  and
knowledge  about the  insurance  industry  and their role on the  pharmaceutical
industry. Simultaneously, he became a distributor for a direct marketing company
to gain the  knowledge  necessary  in applying  direct  marketing  to his future
pharmaceutical  business. Mr. Ives then started a pharmaceutical company and has
been the driving force to realizing his goals.  Mr. Ives'  perseverance  has led
this company to its present position and with proper funding,  IHC will become a
leader in the growing preventive health care industry.

<PAGE>

     Item 9.  Directors,  Executive  Officers,  Promoters  and  Control  Persons
Continued:

RESPONSIBILITIES  - Mr. Ives  oversees  the day to day  operations,  coordinates
closely with Fred Oberloh,  National  Sales Manager,  on company  promotions and
sales,  makes direct sales calls,  conducts  ride-alongs  with  wholesale/broker
representatives  to secure new business,  attends  local,  regional and national
trade shows,  promotes  the  company's  growth and vision to the  pharmaceutical
industry, via alternative medicine seminars both live & televised,  and conducts
the business of securing funds for IHC's growth. Mr. Ives has been recognized by
his employers,  peers,  and his customers for his  outstanding  achievements  in
sales,  service,  consulting and management.  These achievements  include: #1 in
annual multi-million dollar sales volume seven of ten years before starting IHC,
Mr.  Ives and the sales  people he  managed  were  always in the top 5% of sales
producers for their respective companies.

     B) Michael  Harrison,  age 45, was hired as CEO of Ives  Health  Company on
December 27, 1999. Mr.  Harrison  managed the largest oil operation in the state
of Kansas from 1987-1991.  Applied operation management skills which resulted in
net earnings  increased from 14 million dollars in 1987 to 31 million dollars in
1991.  Successfully  performed  duties a financial  consultant for the corporate
financial   planning  and  analysis   department  of  OXY  USA  from  1991-1993.
Co-instructor of an in-house business decision making school.  Evaluated 106 oil
companies for possible acquisition during 1992. Managed divestment of $5 million
of  company  properties  at  auction  during  1992.  Acquired  the world  renown
Hasty-Bake  Barbecue Grill Company in 1993.  Successfully  marketed and operated
company  resulting  in doubling of sales and  significant  increase in earnings.
Developed  marketing strategy and revitalized dealer network.  Reestablished and
redesigned  many old  products.  Sold  majority  interest in company to minority
partner in 1996.  Divestiture  resulted  in a profit of five times the  original
cash  investment  in the  company.  Acquired  100% of RPC Company an  industrial
powder coating operation in 1996. Secured bank and SBA financing for acquisition
and subsequent  expansion involving buyout of competition.  Tripled revenues and
earnings of company in three years. Increased net value of company ten times the
original investment by November 1999.

RESPONSIBILITIES  - Mr.  Harrison is  responsible  for the daily  operations and
administration  of the  company.  He is the  company's  primary  deal maker with
respect to future  acquisitions and financing.  Mr. Harrison is also responsible
for all future performance  predictions of the company as well as a liaison with
the SEC on corporate  filing  matters.  Mr. Harrison works very closely with Mr.
Keith Ives in the planning and future  direction of the company and with respect
to targeted  sales  efforts.  Mr.  Harrison has been  instrumental  in attaining
continuing  education  (CE)  certification  status for Ives Health  Company with
local and national pharmacy boards.  By utilizing CE certification,  Ives Health
Company can better inform  pharmacists  about the  generalities of Ives products
and at the same time award the  pharmacists  with local or  national  continuing
education credits.

     C) JoEtta  Hughes,  age 43, is CFO of Ives Health  Company.  Ms. Hughes has
comprehensive experience in accounting,  the pharmaceutical industry,  warehouse
and personnel  management and has worked for McKesson Drug Co. and a division of
Cooper and Lybrand  accounting  firm.  She  graduated  valedictorian  from Bryan
Institute  in  computer  programming  and  accounting.  She  is  currently  Vice
President of the local chapter of Business and Professional  Woman's  Federation
as well as state  Membership  Chair.  She sits on the advisory boards for Rogers
University and OSU.

RESPONSIBILITIES  - Ms. Hughes conducts all of the in-house  financial  business
for IHC and works closely with IHC's CPA. While her main duties are  financially
related,  she  contributes a great deal to the day to day  operations,  customer
service,  data entry,  secretarial  duties, and consulting with M. Keith Ives in
running the  company.  In order for IHC to be  successful  Mr. Ives felt he must
have Ms.  Hughes on board to draw from her expertise in the  pharmaceutical  and
accounting  fields.  She has been  instrumental  in applying  her  abilities  in
keeping the company functioning.

     D) Perry Ives, age 36, Vice President,  of Ives Health Company has 13 years
experience  in  employee  relations  and day to day  operations  as  maintenance
supervisor  for  apartment   management  firms.  He  graduated  high  school  in
Stillwater,  OK and received his Associates Degree in Computerized Accounting at
Condie College in California with a 3.99 GPA. Perry is responsible for producing
our television and radio commercials,  and our newspaper  advertisements.  He is
presently  developing  a CD ROM that  will be used as an  educational  marketing
tool. Perry's diversified abilities and his knowledge of daily operations of IHC
have proven to be a valuable asset to the company.

RESPONSIBILITIES  - Director of Marketing and Advertising  while  overseeing the
day to day  operations  and product  production.  Mr. Ives  primary  function is
designing and implementing  in-house sales and marketing materials,  creating ad
slicks,  and  supporting the efforts of JoEtta Hughes in accounting and computer
work.  Mr.  Ives  has  demonstrated  his  diversified  abilities  in  the  daily
operations of IHC and has proven to be capable of exceeding every challenge that
the company has thrown his way. He has been  instrumental in performing work the
company would have had to out source,  thus  assisting the company's  efforts to
control costs.

     E) Tony Fauver,  age 44, is the  Director/Production  & Quality Control and
has 17  years  experience  in  warehouse  management,  production,  and  quality
control.  Mr.  Fauver  has been  employed  with IHC since May of 1997.  Born and
raised in  Edwardsville,  Illinois.  Tony  received  his  training in the United
States Army. His  experience as a General  Manager of a  manufacturing  company,
plus his  experience in sales and  purchasing  has made him a valuable  asset to
Ives Health  Company,  Inc. His  knowledge of general  management  principles is
synonymous  with Ives Health  Company's high standards for the production of our
all natural products and weight management program.

     F) Jim Jones,  age 68, is currently a member of Ives Health Company's Board
of Directors.  Mr. Jones was a successful  insurance agent before his retirement
in 1992.  Although he considers  himself  retired,  he still acts as Ives Health
Company's independent insurance agent.  Throughout his career, he has sat on the
Board of Directors for banks, insurance cos., & several corps.

<PAGE>

Item 9. (b) Identify Significant Employees

     1) Fred Oberloh,  age 50, is National Sales Manager at IHC. Mr. Oberloh has
been in the  pharmaceutical  industry  for  over 20 years  as a  Regional  Sales
Manager with Pittman Moore Drug Company. Fred has been another welcomed addition
to our management team and started with IHC in January,  1999. His strengths are
a work ethic, which is beyond reproach and his attention to detail.

RESPONSIBILITIES - Managing local,  regional and national chain accounts at both
the Corporate and Pharmacy levels. Overseeing the sales and service function for
three  Sales  Representatives,   creating,  initiating  and  implementing  sales
promotions & bonus buys while informing IHC accounts on these promotions.

(c)  Family Relationships.

     M. Keith Ives, President, JoEtta Hughes, CFO and Perry Ives, Vice President
are siblings.

Item 10. Executive Compensation.

                           SUMMARY COMPENSATION TABLE
                              As of Dec., 31, 1999


Executive/                      Annual       Stock
Position              Year      Salary       Bonus
--------------------------------------------------------------------------------
M. Keith Ives,        2000     $72,000      To be determined by
President                                   performance of Co.
--------------------------------------------------------------------------------
Michael Harrison,     2000     $70,000      To be determined by
CEO                                         performance of Co.
--------------------------------------------------------------------------------
JoEtta Hughes,        2000     $60,000      To be determined by
CFO                                         performance of Co.
--------------------------------------------------------------------------------
Perry Ives,           2000     $36,000      To be determined by
Vice President                              performance of Co.
--------------------------------------------------------------------------------

     (In  addition to the above,  executives  of the Company  receive  insurance
benefits.)

<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management

     The  following  shareholders  own of record  more  than 5% and/or  includes
security  ownership  of  management   personnel  as  of  December  31,  1999  of
12,846,946:

<TABLE>
<CAPTION>
Title of Class   Name and Address of Beneficial Owner            Amount and Nature
                                                                 Of Beneficial Owner  % of Class
------------------------------------------------------------------------------------------------
                                                                 As of December 31,
                                                                        1999
------------------------------------------------------------------------------------------------
<S>              <C>                                                 <C>                 <C>
Common           M. Keith Ives, Officer/Director                     8,439,260           65.7%
                 22972 Woodridge Dr., Claremore, OK 74017
------------------------------------------------------------------------------------------------
Common           Maxxon, Inc., Beneficial Owner                      1,700,000           13.2%
                 8908 S. Yale Ave, Ste 409, Tulsa, OK 74137
------------------------------------------------------------------------------------------------
Common           Bill Elliott, Beneficial Owner                        150,187            1.2%
                 Route 1, Box 156, Tahlequah, OK 7446
------------------------------------------------------------------------------------------------
Common           Pat Storms, Beneficial Owner                          349,975            2.7%
                 15849 Sheffield Rd., Siloam Springs, AR 72761
------------------------------------------------------------------------------------------------
Common           JoEtta Hughes, Officer/Director                       549,984            4.3%
                 Claremore, OK 74017
------------------------------------------------------------------------------------------------
Common           Perry Ives, Officer/Director                          329,800            2.6%
                 316-A S. Choctaw, Claremore, OK 74017
------------------------------------------------------------------------------------------------
Common           Tony Fauver/Director                                   80,000            0.6%
                 Claremore, OK 74017
------------------------------------------------------------------------------------------------
Common           Jim Jones, Director                                     2,000             N/A
                 6937 E  97th St. South, Tulsa, OK 74133
------------------------------------------------------------------------------------------------
Common           All Officers and Directors as a group (4 persons)   9,401,044           73.2%
------------------------------------------------------------------------------------------------
</TABLE>

     Note:  Maxxon is a  company  with over  12,000,000  shares of common  stock
issued  and  outstanding  at  December  31,  1999.  Ives  does  not know who the
principal  shareholders  are. Mr. Gifford Mabee is the President,  but Ives does
not know who other officers are. Maxxon filed a form 10-SB on December 22, 1999.
Information regarding Maxxon can be found from that filing.

<PAGE>

Item 12. Certain Relationships and Related Transactions:


                  Through  December  31,  1999,  the  Company  has  had  various
         relationships  which  resulted  in shares  of stock  being  issued  for
         consulting or services rendered.

<TABLE>
<CAPTION>
Title of Class   Name of Beneficial Owner                             Nature of Beneficial      Amount of Beneficial
                                                                      Ownership                 Ownership
--------------------------------------------------------------------------------------------------------------------
<S>              <C>                                                  <C>                          <C>
Common           ICMS, Inc. Bill Shepard, President                   Consulting                     2,500
                 2761 E. Skelly Drive, # 700, Tulsa, OK 74105
--------------------------------------------------------------------------------------------------------------------
Common           Joyce Bliss                                          Legal                          2,000
                 800 W Downing , Tahlequah, OK 74464
--------------------------------------------------------------------------------------------------------------------
Common           Bill Elliott                                         Financial Consulting         127,366
                 Route 1, Box 156, Tahlequah, OK 74464
--------------------------------------------------------------------------------------------------------------------
Common           Russell Barber                                       Legal                          1,322
                 P O Box 518, Poteau, OK 74953
--------------------------------------------------------------------------------------------------------------------
Common           S.B. Stock USA, Inc. Elliott Pierson, Preside        T.V. Commercial                4,375
                 5050 N. 8th St., Suite 12, Phoenix, AZ 85014         Compensation
--------------------------------------------------------------------------------------------------------------------
Common           Nasri Barakat                                        Sales Consulting               7,000
                 106 Summit Road, Tahlequah, OK 74464
--------------------------------------------------------------------------------------------------------------------
Common           Mark Hubbard                                         Financial Consulting          50,000
                 708 Maria, Springdale, AR 72762
--------------------------------------------------------------------------------------------------------------------
Common           Pat Storms                                           Sales / Marketing             48,000
                 15849 Sheffield RD., Siloam Springs, AR 72761
--------------------------------------------------------------------------------------------------------------------
Common           William O. Scaife                                    Sales / Marketing             27,000
                 10426 Innisbrook Dr. , Jacksonville, FL 32222
--------------------------------------------------------------------------------------------------------------------
Common           Wallace W. Hayes                                     Sales / Marketing              7,000
                 10426 Innisbrook Dr., Jacksonville FL 32222
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Additional Related Party Transactions are as follows:

     During 1998 M. Keith Ives and JoEtta Hughes, officers of the Company loaned
the Company funds to cover certain operating expenses. The notes accrue interest
at a rate of 10% per year and are payable on demand.  During 1998  payments were
made to the officers in the amount of $81,711 to reduce the note balances. As of
December 31,  1998,  there  remained a balance due to JoEtta  Hughes of $41,752.
During 1999 certain officers and  shareholders of the company advanced  $270,487
to the company to cover operating expenses.  During 1999 a total of $191,101 was
paid on these notes leaving a balance of $121,137 at December 31, 1999.

Item 13. Exhibits and Reports on Form 8-K:

     None.

<PAGE>

                                   SIGNATURES

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

                                   IVES HEALTH COMPANY, INC.

Date: March 29, 2000               /s/ Michael Harrison
                                   --------------------
                                   By: Michael Harrison, Chief Executive Officer

                                POWER OF ATTORNEY

     KNOWN ALL MEN BY THESE  PRESENTS,  that  each  individual  whose  signature
appears below hereby  constitutes and appoints  Michael Harrison and/or M. Keith
Ives,  his true and  lawful  attorneys-in-fact  and  agents,  to sign any or all
amendments to this Report on Form 10-SB,  and to file the same with all exhibits
thereto and other and documents in connection therewith, with the Securities and
Exchange  Commission,  granting unto the  attorney-in-fact  agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection  therewith,  as fully to all intents and purposes as he
or she might or could do in person  hereby  ratifying and  confirming  that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.

     Pursuant to the  requirements  of the Exchange Act of 1934,  this Report on
Form  10-KSB has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                    Capacity                             Date
--------------------------------------------------------------------------------

/s/ M. KEITH IVES            President and Director               March 29, 2000
------------------------
M. Keith Ives

/s/ MICHAEL HARRISON         CEO and Director                     March 29, 2000
------------------------
Michael Harrison

/s/ PERRY IVES               Vice-President and Director          March 29, 2000
------------------------
Perry Ives

/s/ JOETTA HUGHES            Secretary, Treasurer and Director    March 29, 2000
------------------------
JoEtta Hughes

/s/ TONY FAUVER              Prod. & QC Mgr. and Directo          March 29, 2000
------------------------
Tony Fauver

/s/ JIM JONES                Director                             March 29, 2000
------------------------
Jim Jones