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, 1998

                               Commission File No.

                            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 [ ] 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. $ 464,582.

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: September 30, 1999: $ 2,741,942

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable date: As of September 30, 1999 there were
10,280,471 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 State Company) ( the "Registrant"
or "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   quasi-reorganization   (new  "IVES"),   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  re-organized  IVES  began  operations  January  1,  1998  and  was re-
incorporated in Oklahoma on February 11, 1998.

     The Company is engaged in developing and marketing  innovative,  safe, high
quality natural medicines and nutritional supplements,  which are guaranteed for
potency and purity, include homeopathic medicines, weight loss formulas, natural
remedies, and nutritional  supplements.  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.

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

     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.

     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.

     The Company had 14 full-time  employees at the year ended December 31, 1998
and 14 full-time employees at the third quarter ending September 30, 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,  balance due at
December 31, 1998 was $164,574.  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.

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  financial
position.

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' shares opened at $2.00 and
the low was recorded at $1.00, from July, 1999 through September, 1999.

<PAGE>

Item 5 continued

     Sales of Common Stock during 1998:
     ----------------------------------

     At date of  incorporation  ,  February  11,  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.  As of December  31,  1998,  the
Company had raised  $418,193 at $0.80 per share  equating to 547,649 shares from
the 504 offering.  The Company also issued  330,000 shares of stock to employees
for services  rendered.  The total shares issued and outstanding at December 31,
1998 was 9,577,650 shares.

     Common Stock Subject to Options or Warrants:
     --------------------------------------------

     None.

     Holders:
     --------

     As of September 30, 1999, the Company had 126 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. Management's Discussion and Analysis or Plan of Operation:

     Plan of Operations:
     -------------------

     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 in to a major
player in the arena of natural health products.  Objectives leading to that goal
include being  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, where
as 30% being independent  pharmacies and 70% regional and national chains,  i.e.
Albertsons, Winn-Dixie, Wal-Mart, Walgreens, K-Mart, Eckerds, etc.

     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.

     The Company's primary  distribution  focus is through regional and national
chain pharmacies.  We are 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) and Winn-Dixie (1200 national  locations).
Wal-Mart , Walgreens,  K-Mart, and Eckerds are our next targeted chains. IHC has
established  a  strong  alliance  with  wholesale   distributors   who  sell  to
independent  pharmacies and continued growth with these  distributors is another
reason for IHC achieving  nationwide  distribution.  IHC's most noted  strengths
with their wholesalers are product quality, a strong in-store marketing package,
high profit margins for both the wholesaler and the retail pharmacy, product and
alternative  medicine  education,  validation  testing and the best  promotional
incentives and profit margins in the industry.

<PAGE>

Item 7. Financial Statements:

                            IVES HEALTH COMPANY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                DECEMBER 31, 1998


                                    CONTENTS
                                    --------

Independent Auditor's Report                                                   1

FINANCIAL STATEMENTS

     Balance Sheet                                                             2

     Statement of Operation                                                    3

     Statement of Shareholders' Equity                                         4

     Statement of Cash Flows                                                   5

     NOTES TO FINANCIAL STATEMENTS                                          6-12


                          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, 1998 and the related
statement of operation, shareholders' equity and cash flows from January 1, 1998
(inception)  to  December  31,  1998.   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

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

HENDERSON SUTTON & CO., P.C.

/s/ HENDERSON SUTTON & CO., P.C.
--------------------------------
Certified Public Accountants

November 4, 1999

<PAGE>

Item 7. Financial Statements continued:

                            Ives Health Company, Inc.
                          (A Development Stage Company)
                                  Balance Sheet
                                December 31, 1998

                                     ASSETS

Current Assets
     Cash                                                            $   24,787
      Accounts Receivable                                                 8,853
     Inventories                                                        156,819
                                                                     ----------
                                                                        190,459
                                                                     ----------
Property and Equipment
     Property, Plant & Equipment                                        445,586
     Less Accumulated Depreciation                                       21,136
                                                                     ----------
                                                                        424,450
                                                                     ----------
Other Assets
     Investments                                                         34,601
     Other Assets                                                        32,131
                                                                     ----------
                                                                         66,733
                                                                     ----------
         Total Assets                                                $  681,642
                                                                     ----------

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
     Accounts Payable                                                $  191,032
     Accrued Expenses                                                    14,382
     Current Portion of Long Term Debt                                  126,155
                                                                     ----------
                                                                        331,569
                                                                     ----------
Long-Term Liabilities
      Notes Payable                                                     556,904
      Note Payable - Shareholder                                         43,387
                                                                     ----------
                                                                        600,291
      Less Current Portion of Long Term Debt                            126,155
                                                                     ----------
              Total Liabilities                                         805,705
                                                                     ----------
Shareholders' Equity
      Common Stock, 50,000,000 shares authorized,
            Par value $.001, 9,577,650 shares issued
            and outstanding                                               9,578
      Additional Paid in Capital                                        347,206
      Deficit Accumulated during the development stage                 (480,846)
                                                                     ----------
                                                                       (124,063)
                                                                     ----------
               Total Liabilities and Shareholders' Equity            $  681,642
                                                                     ----------

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

<PAGE>

Item 7. Financial Statements continued:

                            Ives Health Company, Inc.
                          (A Development Stage Company)
                             Statement of Operations
                      For the Year Ended December 31, 1998

REVENUES

     Sales Revenue                                                   $  464,582
                                                                     ----------
         Total Sales Revenue                                            464,582
                                                                     ----------
      Cost of Sales
          Cost of Sales                                                 198,546
          Selling Expense                                               239,721
                                                                     ----------
         Total Cost of Sales                                            438,267
                                                                     ----------
Net Sales                                                                26,314

EXPENSES

       Operating Expenses
              General & Admin. Expense                                  269,816
                                                                     ----------
         Total Operating Expenses                                       269,816
                                                                     ----------
         Other Expenses
               Non-operating Expense                                    237,345
                                                                     ----------
           Total Other Expenses                                         237,345
                                                                     ----------
                  Total Expenses                                        507,161
                                                                     ----------
NET LOSS                                                             $ (480,846)
                                                                     ----------

Net Loss per Share                                                   $    (0.05)
                                                                     ----------

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

<PAGE>

Item 7. Financial Statements continued:

                            Ives Health Company, Inc.
                          (A Development Stage Company)
                              Statement Cash Flows
                      For the Year ended December 31, 1998

Cash Flows From Operating Activities
      Cash received from customers                                   $  516,284
      Cash paid for operating goods                                    (284,842)
      Cash paid to employees                                           (367,723)
      Cash paid for other goods and services                           (188,955)
      Interest paid, net of amount capitalized                          (25,191)
                                                                     ----------
      Net Cash Provided (Used) by Operating Activities                 (350,426)
                                                                     ----------
Cash Flows From Investing Activities
      Plant & equipment purchases                                      (254,892)
      Cash Paid for Other Investments                                   (35,975)
      Cash Paid for Marketing Design                                    (34,601)
                                                                     ----------
      Net Cash Provided (Used) by Investing Activities                 (325,468)
                                                                     ----------
Cash Flows From Financing Activities
      Proceeds from short-term debt                                          --
      Repayment of short-term debt                                           --
      Proceeds from Issuance of Common Stock                            344,959
      Proceeds from long-term debt                                      483,543
      Repayment of long-term debt                                      (135,069)
                                                                     ----------
      Net Cash Provided (Used) by Financing Activities                  693,433
                                                                     ----------

         NET INCREASE (DECREASE) IN CASH                                 17,538

         CASH AT BEGINNING OF YEAR                                        7,249
                                                                     ----------
         CASH AT END OF YEAR                                         $   24,787
                                                                     ----------
Reconciliation of Net Income (Loss) to Net Cash
   Provided (Used) by Operating Activities
      Net income (loss)                                              $ (480,846)
      Adjustments to reconcile net income (loss) to net
        Cash provided (used) by operating activities
           Depreciation                                                   9,568
           Amortization of intangible assets                              4,836
           (Increase) decrease in accounts receivable                    51,702
           (Increase) decrease in prepaid assets                         27,806
           (Increase) decrease inventories                              (86,295)
           (Increase) decrease in Other Assets                            3,380
           Increase (decrease) in accounts payable                      115,658
           Increase (decrease) in other accrued liabilities               3,765
                                                                     ----------
           Total adjustments                                            130,420
                                                                     ----------
Net Cash Provided (Used) by Operating Activities                     $ (350,426)
                                                                     ----------

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

<PAGE>

Item 7. Financial Statements continued:

                            Ives Health Company, Inc.
                          (A Development Stage Company)
                  Statement of Changes in Shareholders' Equity
                      For the Year Ended December 31, 1998

<TABLE>
<CAPTION>
                                                                                                         DEFICIT
                                                  PRICE                                   ADDITIONAL    DURING THE
                                                   PER       COMMON STOCK                  PAID-IN      DEVELOPMENT
                                                  SHARE         SHARES        AMOUNT        CAPITAL        STAGE
                                                -------------------------------------------------------------------
<S>                                                <C>         <C>           <C>           <C>          <C>
BALANCE AT DECEMBER 31, 1997                                   8,700,000     $    8,700    $    6,000   $ (272,050)
                                                -------------------------------------------------------------------
Reorganization and Recapitalization of Ives                                    (272,050)      272,050

ISSUANCE OF COMMON STOCK FOR :
------------------------------
     Cash                                          0.773         877,650            878       677,368

OTHER TRANSACTIONS AFFECTING EQUITY
-----------------------------------
     Offering Costs                                                             (64,112)

Net Income at December 31, 1998                                                                           (480,846)
                                                -------------------------------------------------------------------

BALANCE AT DECEMBER 31, 1998                                   9,577,650     $    9,578    $  347,206   $ (480,846)
                                                -------------------------------------------------------------------
</TABLE>

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

                            Ives Health Company, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 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.

<PAGE>

Item 7. Financial Statements continued:

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
quasi-reorganization  (new  "IVES"),  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  re-organized  IVES began
operations  January 1, 1998 and was  re-incorporated in Oklahoma on February 11,
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 local 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.

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 per share are computed  based on the weighted  average number of common
shares outstanding during the periods presented,  including, if dilutive, shares
issuable under the stock issuable under the stock option plans and warrants.

<PAGE>

Item 7. Financial Statements continued:

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 direct write-off method of recognizing bad debts.

NOTE 2 - PROPERTY AND EQUIPMENT

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

                                   ESTIMATED
                                  USEFUL LIFE
                                  -----------
     Building                        30 years     $249,347
     Building Improvements           30 years      100,400
     Land                                  --       20,000
     Equipment                      5-7 years       65,171
     Furniture                      5-7 years       10,668
                                                  --------
                                                   445,586
     Accumulated Depreciation                       21,136
                                                  --------
     Property and equipment (net)                 $424,450
                                                  --------

NOTE 3 - INTANGIBLES

     LICENSING AGREEMENT, NET
     ------------------------

     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 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.

     During  1998,  the  Company  incurred  $35,975  in  costs  related  to  the
     development  of a  marketing  design  program.  The costs are  expected  to
     benefit the Company Over the five-year amortization period.

     Technology License                                           $ 24,601
     Marketing design                                               35,975
                                                                  --------
     Total                                                          60,576
                                                                  --------
       Accumulated amortization                                     (4,744)
                                                                  --------
     Net capitalized                                              $ 55,832
                                                                  --------

NOTE 4 - NOTES PAYABLE-OFFICERS

     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  officer  in the amount of $81,196 to reduce the
     note balances. As of December 31, 1998, there remained a balance due JoEtta
     Hughes of $43,387.

<PAGE>

Item 7. Financial Statements continued:

Note 5 - Notes Payable - Bank

     NationsBank, N.A.
          Note dated June 17, 1998 bearing interest @ 9%, due         $   48,611
          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             165,659
          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

     State Bank & Trust, N.A.
          Interest @ Wall Street Prime plus 1.5%, currently              103,034
          9.25%, due January 25, 1999. This note was
          subsequently combined with the $20,000 note due
          State Bank & Trust, N.A. April 25, 1999 and is now
          payable in thirty-six monthly installment of $3,800,
          principle and interest, through May 25, 2002. Note
          is secured by personal stock and an annuity owned
          by M. Keith Ives.  M. Keith Ives personally
          guarantees the note.

          Interest @ Wall Street Prime plus 1.5%, currently               20,000
          9.25%, payable monthly with principle due January
          25, 1999. The note was renewed January 25, 1999 and
          on April 25, 1999 combined with the $103,034 note
          due State Bank & Trust, N.A. and is now due based on
          the terms described on the $103,034 note. M. Keith Ives
          personally guarantees the 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.

     Dr. Craft
          Interest @ 10%, renewable annually.                            160,000
                                                                      ----------
                                                                      $  556,904
                                                                      ----------

<PAGE>

Item 7. Financial Statements continued:

     Maturities of long-term  debt,  subsequent to the  refinancing  through the
     report date is as follows for the next five years:

     1999                                                          $126,155
     2000                                                           191,257
     2001                                                            44,886
     2002                                                            49,418
     2003                                                            32,970
     Thereafter                                                     112,218
                                                                   --------
     Total                                                         $556,904
                                                                   --------

NOTE 6 - INCOME TAXES

     The Company has incurred net  operating  losses since  inception  and has a
     loss carry-forward of approximately $480,846 at December 31, 1998, expiring
     in years  beginning  2013.  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:

     Net operating loss carry-forward                            $ 480,846
     Depreciation                                                    8,252
            Total                                                  489,098
     Less valuation allowance                                     (489,098)
                                                                 ---------

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

     Deferred   taxes  reflect  a  combined   federal  and  state  tax  rate  of
     approximately 40%. For financial reporting purposes,  a valuation allowance
     of $489,098 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  materially  affect  the
     Company's financial position.

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

     In February 1998, the Company  issued  8,700,000  shares of common stock in
     accordance  with  The  quasi-reorganization  and  separation  agreement  as
     discussed in Note 1. Maxxon,  Inc. was issued 1,700,000 shares and M. Keith
     Ives and founders were issued 7,000,000 shares.

     During the year 1998,  877,650  shares of the Company's  common shares were
     issued under SEC  Regulation , D., rule 504. The stock was issued for $0.80
     per share.

     In 1998,  the Company  issued  Perry Ives and JoEtta  Hughes,  officers and
     directors of the company,  275,000  shares of Ives common stock in exchange
     for $270,415 of notes owed by the Company to the two officers.

<PAGE>

Item 7. Financial Statements continued:

NOTE 8 - CONTINUED

     On April 20, 1998, the Company  completed a private  offering for 1,000,000
     shares of common stock at $0.80 per share. As of December 31, 1998, 877,650
     shares have been issued.

NOTE 9 - RELATED PARTY TRANSACTIONS

     During  the year ended  December  31,  1998,  officer  loaned  the  Company
     $125,000 to cover  certain  operating  expenses.  During 1998,  the Company
     repaid a total of $81,613.  The remaining note  payable-officer  balance of
     $43,387 accrues interest at a rate of 10% per year.

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, 1998.

     Common shares outstanding                                    9,577,650

     Effect of using weighted average common
     And Common equivalent shares outstanding                       595,712
                                                                  ---------
     Weighted average common shares outstanding                   8,981,938
                                                                  ---------

NOTE 11 - SUBSEQUENT EVENTS

     Prior  to  the  report  certain  Notes  Payable-bank  were  re-financed  in
     accordance  with the terms as  described in note five of Notes to Financial
     Statements.

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
     Perry Ives                 35            Vice-president and Director
     JoEtta Hughes              43            Secretary, Treasurer and Director
     Jim Jones                  60            Director, Member
     ---------------------------------------------------------------------------

<PAGE>

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

(a)  Identify directors and executive officers.

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

     A) M. Keith Ives,  age 42, is  President,  CEO and  Director at IHC.  After
college Mr. Ives went to work for McKesson Drug Co. Ad 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 hi pharmaceutical company and has
been the  driving  force to  realizing  his goals.  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) JoEtta Hughes, age 43, is  Secretary/Treasurer,  COO/CFO and Director at
IHC. 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 is  Membership  Chairman of  Claremore  Business and  Professional
Woman's  Organization,  which reinforces her skills.  Her background makes her a
valuable asset to IHC.

RESPONSIBILITIES  - Ms. Hughes conducts all of the in-house  financial  business
for IHC and works  closely  with IHC's CPA, E.  Carolyn  Tolman.  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.

     C) Perry  Ives,  age 35,  is Vice  President,  Director  of  Marketing  and
Advertising  and Director at IHC. Mr. Ives has 13 years  experience  in employee
relations and day to day  operations  as  maintenance  supervisor  for apartment
management firms. He has years of experience in sales,  management,  operations,
accounting,  marketing and advertising before coming to IHC. He draws from these
experiences  to  develop a  well-rounded  approach  on  handling  the  efficient
operations  of the day to day  business to assist IHC's growth for the past five
years. 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.

     D) Jim  Jones,  age 60,  is a  member  of the  board.  Mr.  Jones  is IHC's
insurance agent and consultant.

(b)  Identify Significant Employees.

     1) Tony Fauver, age 44, is Director/Production & Quality Control at IHC. Mr
Fauver has 17 years experience in warehouse management,  production, and quality
control  and has been  employed  with  IHC  since  May of  1997.  He has been an
extremely valuable addition to our staff. RESPONSIBILITIES - Mr. Fauver oversees
production and quality  control while  ordering all raw  materials,  negotiating
contracts  with  pharmaceutical   ingredient  suppliers,   packaging  companies,
shipping companies and quality control laboratories.

<PAGE>

Item 9. (b) Identify Significant Employees continued:

     2) Fred Oberloh,  age 40, 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.

     3) Margaret  Salmans,  age 30, Director of Research and Development at IHC.
Ms.  Salmans has been with IHC since April,  1999, and is an  accomplished  data
entry  and  appointment  coordinator,  who has  assumed  her  position  in R & D
prematurely.  She has done an exemplary job in conducting our product validation
testing  program while  coordinating  with Dr. Ruth Miller,  D.O.,  whom we have
sub-contracted   with  to  validate  our  products   effectiveness  and  safety.
RESPONSIBILITIES  - Managing  the R & D  department  and staff,  conducting  the
product  validation  testing,  recording  the  results of product  testing,  and
providing those results to the proper institutions.

(c)  Family Relationships.

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

(d)  Involvement in certain legal proceedings.

     NONE

Item 10. Executive Compensation.

                           SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------
M. Keith Ives,        1998     $64,124.97   NONE
Pres.,CEO
--------------------------------------------------------------------------------
JoEtta Hughes,        1998     $33,594.68   175,000 shares,
Sec/Trea, COO\CFO                           restricted stock
                                            12/31/1998
--------------------------------------------------------------------------------
Perry Ives, V.Pres,   1998     $27,408.70   100,000 shares,
Mrkt.  Dir.                                 restricted stock
                                            12/31/1998
--------------------------------------------------------------------------------

Item 11. Security Ownership of Certain Beneficial Owners and Management.

     The following table lists the beneficial  ownership of the Company's voting
securities  by each person  known by the Company to be the  beneficial  owner of
more than 5% of such securities, as well as by all directors and officers of the
issuer. Unless otherwise indicated,  the shareholders listed possess sole voting
and investment power with respect to the shares shown:

<PAGE>

Item 11. Security  Ownership  of  Certain  Beneficial  Owners   and   Management
         continued:

<TABLE>
<CAPTION>
Title of Class    Name and Address of Beneficial Owner                Amount and Nature
                                                                      Of Beneficial Owner     % of Class
--------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                     <C>
Common            M. Keith Ives, Officer/Director                     6,439,260               63.0 %
                  22972 Woodridge Dr., Claremore, OK 74017
--------------------------------------------------------------------------------------------------------
Common            Maxxon, Inc., Beneficial Owner                      1,700,000               16.5 %
                  8908 S. Yale Ave, Ste 409, Tulsa, OK 74137
--------------------------------------------------------------------------------------------------------
Common            Bill Elliott, Beneficial Owner                      181,241                 1.8 %
                  Route 1, Box 156, Tahlequah, OK 74464
--------------------------------------------------------------------------------------------------------
Common            Pat Storms, Beneficial Owner                        349,975                 3.4 %
                  15849 Sheffield Rd., Siloam Springs, AR 72761
--------------------------------------------------------------------------------------------------------
Common            JoEtta Hughes, Officer/Director                     336,000                 3.3 %
                  Claremore, OK 74017
--------------------------------------------------------------------------------------------------------
Common            Perry Ives, Office/Director                         129,800                 1.3 %
                  316-A S. Choctaw, Claremore, OK 74017
--------------------------------------------------------------------------------------------------------
Common            Jim Jones, Director                                 5,000                   N/A
                  6937 E  97th St. South, Tulsa, OK 74133
--------------------------------------------------------------------------------------------------------
Common            All Officers and Directors as a group (4 persons)   6,907,060               67.2 %
--------------------------------------------------------------------------------------------------------
</TABLE>

Item 12. Certain Relationships and Related Transactions.

     Through September,  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                         1322
                  P O Box 518, Poteau, OK 74953
------------------------------------------------------------------------------------------------------------------------
Common            S.B. Stock USA, Inc. Elliott Pierson, President     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 3222
------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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

     NONE

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused  this  report to be signed on its behalf by the  undersigned,  there unto
duly authorized.

                                      IVES HEALTH COMPANY, INC.

                                      /s/ JOETTA HUGHES
                                      ------------------------------------------
                                      By: JoEtta Hughes, Secretary and Treasurer

Date: November 11, 1999

                                POWER OF ATTORNEY

     KNOWN ALL MEN BY THESE  PRESENTS,  that  each  individual  whose  signature
appears  below hereby  constitutes  and appoints  JoEtta  Hughes and/or M. Keith
Ives, his or her true and lawful  attorneys-in-fact  and agents,  to sign any or
all  amendments  to this  Report on Form  10-KSB,  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               November 4, 1999
---------------------
M. Keith Ives

/s/ PERRY IVES             Vice-President and Director          November 4, 1999
---------------------
Perry Ives

/s/ JOETTA HUGHES          Secretary, Treasurer and Director    November 4, 1999
---------------------
JoEtta Hughes

/s/ JIM JONES              Director                             November 4, 1999
---------------------
Jim Jones