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

                                   FORM 10-KSB

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934

                  For the fiscal year ended December 31, 2000.

|_|   TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                  For the transition period from _____to______

                         Commission file number 0-26775

                 STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
                 (Doing Business as: Samaritan Pharmaceuticals)
                 (Name of small business issuer in its charter)

         Nevada                                           88-038402
(State or other jurisdiction of                (I.R.S. Employer Identification
incorporation or organization)                 Number)

101 Convention Center Drive, Suite 310, Las Vegas, Nevada          89109
       (Address of Principal Executive Offices)                  (Zip Code)

Issuer's telephone number (702) 735-7001

        Securities to be Registered Pursuant to Section 12(b) of the Act:

Title of each class                    Name of each exchange on which registered
      NONE                                               NONE

      Securities Registered Pursuant to Section 12(g) of the Exchange Act:

                     Common Stock, $.001 par value per share
                                (Title of class)

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

Check if there is no 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. |_|

The issuer's revenues for its most recent fiscal year (December 31, 2000 ) are
$-0-.

The aggregate market value of the issued voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and asked price
of such common stock, as of March 26, 2001, was approximately $9,000,000. The
number of shares of the Common Stock issued as of March 28, 2001, is 23,402,794.

<PAGE>

                 STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
                 (Doing Business as: Samaritan Pharmaceuticals)

                                   FORM 10-KSB
                    ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                Table of Contents

                                   Part I                                   Page

Item 1.  Description of Business............................................   3

Item 2.  Description of Property............................................   8

Item 3.  Legal Proceedings..................................................   8

Item 4.  Submission of Matters to a Vote of Security Holders................   9

                                     Part II

Item 5.  Market For Common Equity and Related Stockholder Matters...........   9

Item 6.  Management's Discussion and Analysis
            or Plan of Operation............................................  10

Item 7.  Financial Statements...............................................  12

Item 8.  Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosures...........................................  12

                                    Part III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
            Compliance With Section 16(a) of the Exchange Act...............  12

Item 10.  Executive Compensation............................................  14

Item 11.  Security Ownership of Certain Beneficial
            Owners and Management..........................................  15

Item 12.  Certain Relationships and Related Transactions....................  16

Item 13.  Exhibits and Reports on Form 8-K..................................  17

             Signatures.....................................................  18


                                       2
<PAGE>

                                     PART I

Item 1. Description of Business

The public may read and copy any materials we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC and the address of that
site is http://www.sec.gov. Our Internet address is
www.samaritanpharmaceuticals.com.

History and Development of the Company

The Company was originally incorporated in the State of Nevada on March 26,
1996. On October 21, 1997, we entered into an agreement to acquire up to 100%
but no less than 86% of the issued and outstanding shares of Steroidogenesis
Inhibitors, Inc., a Nevada corporation ("SI, Inc."). In connection with the
agreement, the Company issued an additional 4,497,000 restricted shares to
effect a share exchange with the shareholders of Steroidogenesis Inhibitors,
Inc. and acquired 88.51% of the common stock of SI, Inc.

The Company changed its name to Steroidogenesis Inhibitors International ("SII")
on November 6, 1997, and control of the Company changed as the result of the
reorganization, issuance of shares and the appointment of new officers and
directors of the Company. The Company then focused its plan of operations on the
business of developing a new class of pharmaceuticals described below.

We are focused on being a biopharmaceutical scientific incubator, developing
therapeutic drugs primarily for the treatment of high cortisol related diseases.
The Company's lead proprietary drug ANTICORT(TM) is the subject of FDA Phase
Ib/IIa clinical trial for indications in HIV. The Company is also exploring the
efficacy of ANTICORT(TM) as an effective treatment for other high cortisol
related diseases such as Alzheimer's, Parkinson's, and Cancer. Our hope, with no
guarantee of success, is to "incubate" pharmaceutical drugs, both proprietary
and non-proprietary, through development by purchase, license, research
arrangements, or other means. The Company has entered into a license agreement
with a Canadian company, Steroidogenesis Inhibitors Canada, Inc (SI Canada.)
This agreement is the subject of litigation between the parties. See, "Legal
Proceedings."

Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for ANTICORT(TM) discussed below.

The Company is a researcher and developer of pharmaceuticals for the treatment
of diseases where elevated levels of the stress hormone cortisol plays a
significant role in the immune system. The Company has developed the drug
ANTICORT(TM), which is based upon a high dose of a stabilized and complex form
of procaine hydrochloride ("HCL"). Patients suffering from AIDS, HIV and other
serious diseases such as Alzheimer's, have increased levels of cortisol, a
powerful immuno-suppressive hormone. Management hopes that ANTICORT(TM) may be
shown to return levels of cortisol to normal when tested in clinical research
settings. Initially, the Company has chosen to focus on the application of
ANTICORT to benefit people with AIDS. While not a cure for AIDS, the Company
believes that ANTICORT,(TM) if clinically proven, may benefit people with AIDS.

Our Company is seeking to complete the development, including FDA clinical
trials and obtaining FDA approval, of our own anti-cortisol drug, ANTICORT(TM).

Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for ANTICORT(TM).


                                       3
<PAGE>

Background of Anti Cortisols

It is essential to understand the foundational component upon which the
Company's products and technologies are based: a hormone called cortisol.

Cortisol is a hormone manufactured by the cortex, the outer layer of the adrenal
gland, located on top of the kidneys. Cortisol is a vital hormone which helps
the human body cope with stress. When needed, the body responds by increasing
the levels of adrenaline and other hormones in the blood, and by mobilizing
large amounts of glucose and other anti-stress factors to provide the energy and
zest needed in conditions that require instant action (i.e., fight or flight).
Once the stressful situation is over, the level of cortisol returns to normal.
But, if the stressful situation is continuous over an extended period of time,
or is relatively permanent as in a stressful job, the level of cortisol might
remain elevated and not return to normal levels. It is under these conditions
that cortisol, a necessary and vital hormone during times of crises, may be
harmful to the body. The foregoing is our opinion, and is not clinically proven.

The Product

ANTICORT(TM) is a drug, based upon procaine hydrochloride ("HCl") developed in
capsule form to hopefully lower cortisol, subject to clinical proof and
governmental approvals. HCl is better known as a local anesthetic used to numb
small portions of skin. Procaine is believed to lower the previously elevated
cortisol level. It is this aspect of procaine vs. cortisol, that attracted our
attention, and resulted in our decision to test it clinically; i.e., as an
anticortisol in the treatment of diseases associated with elevated levels of
cortisol. We, of course, hope to prove our opinion through clinical trials.

While Management believes that ANTICORT(TM) may help with all high cortisol
diseases, the Company is focusing its initial attention on AIDS. Note that there
is no clinical proof that the foregoing diseases are due to high cortisol.

Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for ANTICORT(TM).

ANTICORT(TM) remains subject to substantial clinical trials, and related
requirements, including those imposed by the United States Food and Drug
Administration. The Company cannot provide any assurance that these tests will
ultimately be proven successful or that the Company's ANTICORT(TM) product will
be commercially marketable.

Clinical Trials

A decision was made to prepare and submit an Investigation New Drug Application
(IND) to the FDA, requesting approval to clinically test ANTICORT(TM) in an HIV+
population, with CD4 cells over 300, a viral load of more than 10,000 copies and
with or without the patient consuming other anti-HIV medications.

This IND Application was reviewed and modified, with the oversight of comments
and consideration of the requirements of the FDA, many times over a period of
one year, and ultimately the Company received FDA approval to commence clinical
trials for FDA Phase Ib/IIa. This FDA Phase Ib/IIa study, carried out under the
approval of the FDA (IND#52,663) is currently in progress at the AIDS Research
Alliance, an independent testing organization, in Hollywood, CA. The purpose of
the study, in summary, is to administer increased doses of ANTICORT(TM) to see
if: a) there are any side effects, and b) to ascertain if any improvements would
be noticed as one or more levels of ANTICORT(TM) are used. The study is under
way and there are no results to report at this time.

Government authorities in the United States and other countries extensively
regulate the research, development, testing, manufacture, promotion, marketing
and distribution of drug products. Drugs are subject to rigorous regulations by
the FDA in the Untied States and similar regulatory bodies in other countries.
The steps ordinarily required before a new drug may be marketed in the United
States, which are


                                       4
<PAGE>

similar to steps required in most other countries, include and may not be
limited to, preclinical laboratory tests, preclinical studies in animals,
formulation studies and the submission to the FDA of an investigational new drug
(IND) application for a new drug; the submission of a new drug application to
the FDA which was granted (IND#52,663); adequate and well-controlled clinical
trials to establish the safety and efficacy of the drug for each indication; and
FDA review and approval of the new drug application prior to any commercial sale
or shipment of the drug.

Preclinical tests include laboratory evaluation of product chemistry, toxicity
and formulation, as well as animal studies.

Clinical trials to support new drug applications are typically conducted in
three steps, but the steps may overlap. During Phase I the introduction of the
drug into healthy human subjects or patients. The drug is tested to assess body
metabolism, reactions and safety, including side effects associated with
increasing doses. Phase II usually involves studies in limited patient
populations to assess the efficacy of the drug in specific, targeted
indications; assess dosage tolerance and optimal dosage; and to identify
possible adverse effects and safety risks. If a compound is found to be
potentially effective and have an acceptable safety profile in Phase II
evaluations, then Phase III, also called Pivotal Studies or Advanced Clinical
Trials, are undertaken to further demonstrate clinical efficacy and test for
safety within an expanded patient population at geographically dispersed
clinical study sites.

After successful completion of the required clinical testing, generally a new
drug application is prepared for filing, in which case the original application
must be resubmitted with the additional clinical information. Once the
submission has been accepted for filing, the FDA has 180 days to review the
application and respond to the applicant. The review process is often
significantly extended by FDA requests for additional information or
clarification. The FDA may refer the new drug application to an appropriate
advisory committee for review, evaluation and recommendations as to whether the
application should be approved. However, the FDA is not bound by the
recommendation of an advisory committee.

If FDA evaluations of the new drug application and the manufacturing facilities
are favorable, the FDA may issue an approval letter. An approval letter will
usually contain a number of conditions that must be met in order to secure final
approval of the new drug application and authorization of commercial marketing
of the drug for certain indications. The FDA may refuse to approve the new drug
application or issue a no approvable letter, outlining the deficiencies in the
submission. This process often requiring additional testing or information.

The duration of the Phase Ib, for the US clinical trial of ANTICORT(TM), may be
about six months or longer. There is no guarantee how long it will take or
whether it will be successful.

Then, the FDA requests double blind studies which means that the drug would be
administered under a code number known only by the monitor of the study. The
monitor administers to patients either a capsule containing the active drug, or
a placebo, i.e., an inactive ingredient (for example: sugar, oatmeal, etc.)
identical in color with the original product. The duration of the Phase II, a
double blind study, where the product is used in one or two groups of 40
patients (twenty on the active ingredient and twenty on placebo) would take
about 12 to 14 months.

The Phase II double blind studies would be followed by Phase III pivotal
studies, where the drug would be administered, still on a double blind basis, to
200-3,000 patients.

Only after these studies, are successful, would an NDA (New Drug Application) be
submitted to the FDA requiring the issuance of an approval or approvable letter.

In the case of AIDS, the situation is different since it deals with a killer
disease, for which help is needed as soon as possible. As such, if a drug shows
promise of being effective, it might be put on a "fast track" status with
subsequent conditional or compassionate approval. Approval, if granted, would
take less time but would still include the extensive Phase III process. In
certain cases, where a drug is showing


                                       5
<PAGE>

outstanding statistical and clinical results, approval might be granted after
only one clinical study, with the obligation to continue with additional
studies, even after approval.

In the case of ANTICORT(TM) we cannot know or foresee future events. As such,
there is no guarantee that the drug would be successful when used by HIV
positive individuals nor can we guarantee the duration of clinical studies
needed or that a "fast track" status will apply.

Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for ANTICORT(TM).

Research and Development

We estimate that we have approximately $50,648 spent on research and
development, including payments towards clinical studies, during the fiscal year
ending December 31, 1998, approximately $376,591 for the year ending December
31, 1999 and approximately $1,077,590.47 for the year ending December 31, 2000.

Our expenditures, unaudited to December 2000, approximate $3,000,000 on
ANTICORT(TM) by our Company, including subsidiary, relate mostly to working
capital, the additional research on ANTICORT(TM), expenses incurred over a year
with research organizations, travel, documentation and other research-related
expenses.

It is of interest to note that it is our belief, based upon our knowledge of the
industry, that the rule of thumb concerning money needed for a pharmaceutical
corporation to reach the Phase I status is approximately $10,000,000. Phase II
status generally incurs a cost of approximately $100,000,000. Therefore we
believe we are doing well to try and streamline our expenditures.

We anticipate that the current clinical studies, namely Phase Ib and IIa, will
be completed by the middle of 2001, for submisson to the FDA for their review
and consideration.

Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for ANTICORT(TM).

Patents and Trademarks

In 1997, Cortisol Medical Research, Inc., an anticortisol research and
development company founded by a former Director of the Company and others,
assigned all patents pending or to be filed relating to ANTICORT(TM) to SI,
Inc., the Company's subsidiary. The Company has filed an application for, and
was issued, a U.S. Trademark for the name "ANTICORT(TM)" on July 28, 1998. The
trademark number, issued by the U.S. Patent and Trademark Office, is 2,176,048.
The Company acquired US Patent 4,956,391 (Protected complex of procaine for the
treatment of symptoms from narcotics addiction, tinnitus and alzheimers
disease.) This patent expires September 11, 2007 and procaine in our proprietary
drug ANTICORT(TM), is the main ingredient. The Company may also prepare and file
applications for additional patents. Although the Company cannot anticipate when
such applications, if any, may be filed or whether the Company will be granted
any additional protection for its intellectual property in the United States or
in other countries. While these patents are pending, the Company cannot estimate
when these will be issued, or rejected. Also, a suit has been filed against the
former Director as to the issue of false representations of ownership of
ANTICORT(TM) to the Company for the transfer of rights to ANTICORT(TM) in
exchange for Company shares. See Item 3. "Legal Proceedings."

While Management believes that the Company has protected its intellectual
property rights, and upon the filing of additional patent applications may
further strengthen the protection of its intellectual property, the Company
cannot assure any existing or prospective owner of its securities that such
protections will be a safeguard in all circumstances against the duplication of
the Company's product. The Company cannot provide any assurance that any patents
which may be issued will not be challenged, invalidated or circumvented, or that
any rights granted to the Company under those patents will provide proprietary
protection or competitive advantages to the Company. Also, the Company has
relied, and will continue to


                                       6
<PAGE>

rely, on trade secrets to protect its technology, especially where patent
protection has not been applied for or may not be appropriate or obtainable. The
Company has tried to protect its technology and processes in part by
confidentiality agreements with its employees, consultants and certain
contractors. However, these agreements could be breached or, in any event, the
Company's trade secrets could otherwise become known or independently discovered
by competitors, as to which the Company may have no intellectual property
protection.

Markets for ANTICORT(TM)

Readers are cautioned that there is no guarantee that the Company will
successfully obtain the necessary governmental approvals for ANTICORT(TM).

Initially, the Company will focus on the use of ANTICORT(TM) in HIV+ patients.
It was previously estimated that 33.8 million people worldwide are infected with
HIV, 16.3 million are dead already, 5.3 million new cases were reported in 1999
alone, and 16,000 people are newly infected every day. As funds become available
to the Company to continue research and development of ANTICORT(TM), the Company
will be able to direct its attention to Alzheimer's and Cancer. This focus will
require the successful completion of clinical studies.

Competition

The Company anticipates facing competition in the HIV and AIDS markets by
companies testing drugs to increase immune resistance (immuno-modulators) of
AIDS patients. Also, among the competitors are companies that are researching
gamma interferon (Genentech) and Interleukin 2 (IL-2 Chiron) both in San
Francisco and the GMSCF (granulocyte macrophage colony stimulating factor) by
Immunex, in Seattle.

The Company may also face competition from companies that are directing their
AIDS research towards attacking this virus. With a number of leading
pharmaceutical companies presently engaged in research and development of
protease inhibitors and other anti-HIV agents in the fight against HIV and AIDS,
there are at least 12 products of this type presently on the market.

The pharmaceutical industry is highly competitive with numerous large and small
companies performing research and development. While the Company realizes it may
be competing with companies that have greater resources, it is confident that
when its ANTICORT(TM) product receives FDA approval, it can effectively market
its products and maintain a competitive edge.

Licensing Agreements

In February of 1996, SI Inc., entered into a licensing agreement with S.I.
Canada. The agreement grants S.I. Canada exclusive rights to manufacture, use,
distribute and sell ANTICORT(TM) in Canada for $300,000, which has been paid to
SI, Inc. S.I. Canada also has the option to acquire licensing rights in certain
other British Commonwealth countries on payment of licensing fees.

The Company considers the Agreement to be terminated and the parties are in
litigation. See Item 3. "Legal Proceedings."

In order to increase distribution and market share, the Company intends to enter
other licensing agreements for its products. The Company anticipates that the
principal elements of any licensing agreement would be the following:

      -Definition of the territory and cash advance at the signing of the
contract.

      -The licensee will finance all the work, research and other matters needed
to secure their own regulatory agency approval for ANTICORT(TM). Conversely,
some of the licensing countries might elect to wait until the Company receives
FDA approval in the United States. In this event, the Company would subsequently


                                       7
<PAGE>

send them the United States approval plus the necessary documentation so the
licensees would be able to secure their own approval without the time and money
required for their own testing.

      -Royalties representing a minimum guaranteed dollar amount, subject to
annual increases.

The Company is presently in negotiation with foreign representatives to license
ANTICORT(TM) in other countries. The Company is seeking additional licensing
agreements and joint ventures with entities interested in AIDS with a view to
having ANTICORT(TM) tested and approved in other countries.

Employees

The Company has six full-time employees.

Item 2. Description of Property

The Company's executive offices are currently located at 101 Convention Center
Drive, Suite 310, Las Vegas, Nevada 89109. The 1,100 square foot office space is
rented at a price of $2,650 per month. The Company does not have laboratory
facilities and therefore outsources all research and clinical testing and
trials.

Item 3. Legal Proceedings

      A. Litigation with Canadian Licensee

On November 4, 1999, the Company filed suit in Nevada, District Court, Clark
County, Case No. A410592, against Altachem Pharma, Ltd. of Alberta, Canada,
formerly known as Steroidogenesis Inhibitors Canada, Inc. (Altachem) and
Steroidogenesis Inhibitors Canada, Inc. (SI Canada) seeking a declaratory
judgment, damages and other relief as determined by the Court. SI Canada is the
licensee for the Canadian territory for the ANTICORT product, and Altachem is
believed to be the parent.

The Company claimed that the Defendants have interfered with arrangements made
with Pashua Partners, L.P. (Pashua). Pashua intended to provide funding and
other benefits to the Company. While the Company was in the course of finalizing
arrangements with Pashua, SI Canada and Altachem claimed that they were entitled
to step into the shoes of Pashua for the pending transaction, even though they
were simply a licensee for one Territory.

Although the Company's lawsuit in Nevada was eventually dismissed on a
jurisdictional basis, the Company is currently pursuing the identical claims in
the Queens Bench in Edmonton, Alberta, Canada, where SI Canada and Altachem are
subject to jurisdiction. In or about November 1999, a lawsuit was filed in
Canada where the Company, SI Canada, and Altachem are pursuing their respective
claims. Management believes the litigation will be resolved without a material
adverse effect on the Company.

      B. Litigation with Former Director

The Company is currently engaged in litigation with former director Alfred
Sapse. Following his resignation, two lawsuits were initiated against the
Company by Sapse. In addition, after discovering breaches of fiduciary duties by
Sapse, the Company filed a lawsuit against Sapse, Cortisol Medical Research,
Inc, (Cortisol) and Sapse for the return and cancellation of illegally issued
shares.

In or about June 2000, Sapse filed a lawsuit against the Company in the District
Court, Clark County, Nevada, Case No. A420721. The principal allegations in the
lawsuit concern the issuance of shares to members of the board of directors as
compensation for services rendered. Since that time, the Board and the
recipients of the shares have agreed to rescind the issuance of the shares, and
have entered into agreements


                                       8
<PAGE>

providing for reissuance at a future date. Management believes the litigation
will be resolved without a material adverse effect on the Company.

In or about September 2000, Sapse filed another lawsuit in District Court, Clark
County, Nevada, Case No. A424126. Sapse alleged claims of defamation and
invasion of privacy claims. Shortly after the lawsuit was filed, the Court
awarded the Company summary judgment, dismissing Sapse's claims against the
Company.

In or about October 2000, the Company filed a lawsuit against Sapse, Cortisol,
and Renee Sapse, to remedy a self dealing transaction initiated by Sapse. The
Company is actively pursing claims in this lawsuit because Sapse improperly
caused the issuance of shares, thus resulting in unfair dilution of
shareholder's value. As such, the Company is taking all action necessary to
return the improperly issued shares to the Company. Making a preliminary finding
that Sapse had breached his fiduciary duties to the Company, the Court has
frozen and sterilized hundreds of thousands of shares improperly issued by
Sapse.

Similarly, the Company filed suit in District Court, Dallas County, Texas to
stop the transfer of shares currently in the possession of Sapse, Cortisol and
Renee Sapse. The Company succeeded in restricting the transfer of all shares in
their possession so that the Company may eventually recover all improperly
issued shares by Sapse.

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

None

                                     PART II

Item 5. Market For Common Equity and Related Stockholder Matters

The Company's Common Stock is traded on the NASD OTC Bulletin Board under the
symbol SPHC and the name of Samaritan Pharmaceuticals. The Company is in the
process of pursuing a new corporate name, which it hopes to adopt shortly.

The following bid quotations have been reported for the period beginning October
1, 1997, when the Company's Common Stock was first priced for trading on the OTC
electronic bulletin board and ending the quarter ended December 31, 2000, and
may be rounded for presentation. To the extent that the Company is unable to
determine a bid price on a quarterly date, the prices below are determined on
the closest date available to the Company:

                                   Bid Prices

                Period                                   High         Low
                ------                                   ----         ---

      Quarter Ended March 31, 1999                       2.50         0.37
      Quarter Ended June 30, 1999                        2.56         0.43
      Quarter Ended September 30, 1999                   1.97         0.43
      Quarter Ended December 31, 1999                    0.87         0.31
      Quarter Ended March 31, 2000                       4.10         1.69
      Quarter Ended June 30, 2000                        3.60         1.46
      Quarter Ended September 30, 2000                   1.98         1.29
      Quarter Ended December 31, 2000                    1.30         0.65


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<PAGE>

Such quotations reflect inter-dealer prices, without retail mark-up, markdown or
commission. Such quotes are not necessarily representative of actual
transactions or of the value of the Company's securities, and are in all
likelihood not based upon any recognized criteria of securities valuation as
used in the investment banking community.

The Company has been advised that 12 member firms of the NASD are currently
acting as market makers for the common stock.

As of March 27, 2001 there were 584 holders of record of the Company's common
stock. Certain of the shares of common stock are held in "street" name and may,
therefore, be held by several beneficial owners.

As of March 27, 2001 there were 23,402,794 shares of common stock issued and
outstanding. Of those shares approximately 12,412,604 shares are "restricted"
securities of the Company within the meaning of Rule 144(a)(3) promulgated under
the Securities Act of 1933, as amended, because such shares were issued and sold
by the Company in private transactions not involving a public offering. Of these
restricted securities, approximately 6,644,962 shares held by affiliates may be
sold pursuant to a registration statement or pursuant to Rule 144.

In general, under Rule 144, as currently in effect, subject to the satisfaction
of certain other conditions, a person, including an affiliate of the Company (in
general, a person who has a control relationship with the Company) who has owned
restricted securities of common stock beneficially for at least one year is
entitled to sell, within any three-month period, that number of shares of a
class of securities that does not exceed the greater of (i) one percent (1%) of
the shares of that class then outstanding or, if the common stock is quoted on
NASDAQ, (ii) the average weekly trading volume of that class during the four
calendar weeks preceding such sale. A person who has not been an affiliate of
the Company for at least the three months immediately preceding the sale and has
beneficially owned shares of common stock for at least two (2) years is entitled
to sell such shares under Rule 144 without regard to any of the limitations
described above.

No prediction can be made as to the effect, if any, that future sales of shares
of common stock or the availability of common stock for future sale will have on
the market price of the common stock prevailing from time-to-time. Sales of
substantial amounts of common stock on the public market could adversely affect
the prevailing market price of the common stock.

The Company has never paid a cash dividend on its common stock. The payment of
dividends may be made at the discretion of the Board of Directors of the Company
and will depend upon, among other things, the Company's operations, its capital
requirements, and its overall financial condition.

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

The following discussion and analysis should be read in conjunction with the
Financial Statements appearing elsewhere in this Registration Statement.

Plan of Operations

In October 1997, the Company acquired approximately eighty-nine percent (89%) of
the outstanding shares of S. I., Inc., which is a subsidiary of the Company.
Since the acquisition of its controlling interest in S. I., Inc., the Company
has focused its operations on developing its proprietary drug, ANTICORT(TM). To
develop ANTICORT(TM) the Company has been engaged in research and clinical
studies.

The Company remains a development stage Company with immaterial revenues and
substantial general and administrative expenses, including expenses related to
its clinical studies programs. The Company's cash has been provided from its
fund-raising activities, all of which have been conducted on a private basis (as
to fund raising, the Company has received capital in private placements of
restricted stock to persons known by Management and believed to be accredited
investors.) The Company believes potential private


                                       10
<PAGE>

placements, the common stock purchase agreement with Fusion Capital, and an
eventual registered public offering, if successful, will assist the Company in
meetings its cash needs, but there is no guarantee.

The Company plans to complete its clinical studies, particularly the study
authorized by the FDA, and eventually with the success of those studies market
its ANTICORT(TM) product directly or through licensing agreements with third
parties.

While the Company is in the FDA Clinical Trial Phase it has not generated
revenues to meet capital needs, but has been successful in obtaining capital
infusions in private transactions from existing shareholders or persons familiar
with management. These sporadic private placements are only to persons who are,
in management's opinion, accredited investors, willing to assume the risk of
loss of their entire investment. Management anticipates that these subscriptions
will continue. Except for an agreement to sell shares to Fusion Capital Fund II,
LLC ("Fusion Capital"), discussed below, no commitment exists for continued
investments, or for any underwriting.

The Company needs to complete various research and development steps as part of
its plans. These steps include the completion of Phase I and start and
completion of Phase ll clinical trials as to its ANTICORT(TM) product. These
steps also include the application and obtaining of FDA final approval, and
development of a complete product manufacturing and marketing plan or plans.

On November 2, 2000, we entered into a common stock purchase agreement with
Fusion Capital Fund II, LLC, a Chicago-based institutional investor, whereby
Fusion Capital agreed, subject to contract terms, to buy $20 million of the
Company's common stock. The aggregate equity investment committed to the Company
by Fusion Capital is $20 million. These funds will be used to further develop
the proprietary drug ANTICORT(TM), through FDA clinical trials and for
acquisitions, alliances and other corporate opportunities. More specifically,
Fusion Capital has agreed to purchase from the Company up to $20 million of the
common stock over a 50-month period, subject to a three-month extension by the
Company. Each month SPHC has the right to sell to Fusion Capital up to $400,000
of its common stock at a price based upon the market price of the common stock
on the date of each sale without any fixed discount to the market price. At the
Company's sole option, Fusion Capital can be required to purchase lesser or
greater amounts of common stock each month up to $20 million in the aggregate.
The Company has the right to control the timing and the amount of stock sold to
Fusion Capital. SPHC also has the right to terminate the agreement at any time
without any additional cost.

Management does not believe that the Company will develop any material revenues
until the Company completes a clinical study which demonstrates the efficacy of
ANTICORT(TM) for significant medical purposes and the Company subsequently
manufactures and markets ANTICORT(TM) directly, or with a joint venture
marketing or manufacturing Company, or pursuant to one or more licensing
agreements. An exception may be that the Company could, with no guarantee,
recognize revenues as part of plans under way, to expand the focus of the
Company beyond just ANTICORT(TM).

Management estimates the Company's operating expenses to be a minimum of
$150,000 per month, depending upon the Company's payments to outside research
and other consultants. The Company is also dependent upon the proceeds of
financing from the sale of its securities to fund its clinical studies,
particularly the clinical study planned with the Aids Research Alliance in
California. The Company's contract with the Aids Research Alliance requires it
to pay $650,000 for the clinical study. The Company paid $324,122.50 of the
$650,000 contract amount, through March 15, 2000, and since then has paid
approximately (un-audited) $150,000 through November 1, 2000. The Company is
current with the Aids Research Alliance.

The Company has incurred research development stage losses since inception.
These losses consist primarily of research and related expenditures, marketing
costs, and consulting, and administrative overhead and expenses, incurred while
the Company seeks to complete development of its product, which includes studies
and obtaining FDA final approval. No significant revenues have been earned by
the Company, or cash flow from operations, to help pay these operating needs.


                                       11
<PAGE>

These losses were $1,671,254 and $1,009,972 during the years ending 1999 and
1998, respectively, and $3,843,308 for 2000. The increase is primarily the
result of increased expenditures for research and development, consultants for
business, public relations, financial strategies and legal expense.

Item 7. Financial Statements

Please see the attached Financial Statements and accompanying footnotes, which
should be read with the statements.

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosures

None.

                                    PART III

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

The following table sets forth the directors, executive officers and other
significant employees of the Company, their ages, and all offices and positions
with the Company. Officers and other employees serve at the will of the Board of
Directors.

<TABLE>
<CAPTION>
                                      Term Served As    Positions
    Name of Director         Age      Director Since    With Company
    ----------------------   -----    ----------------  -----------------
<S>                          <C>      <C>               <C>
    Dr. Janet Greeson        57       Oct. 1997         Director, C.E.O., Secretary
    Albert Wollen            54       Feb. 2000         Director, President
    Eugene Boyle             35       June 2000         Director, Chief Financial Officer,
                                                        Chief Operating Officer
    Douglas Bessert          43       March 2001        Director, Vice President
    Welter Holden            68       Oct. 1997         Director
    Paul Burkett             77       Oct. 1997         Director
    Cynthia Thompson         40       March 1999        Director
    H. Thomas Winn           60       March 1999        Director
    Brian Sullivan           48       March 2001        Director
</TABLE>

      Janet Greeson, Ph.D. has been our Chief Executive Officer since October
30, 2000, and our Secretary, Executive Vice President and a Director, since the
Companies inception as a public company, November 1997. Dr. Greeson was our
President from June, 2000, until October 30, 2000. Dr. Greeson is a well known
psychologist and author, and has appeared on numerous radio and TV shows. She
has been an executive in the business of healthcare for over 25 years and
founded, grew and merged over 20 companies which were acquired by Columbia/HCA
(NYSE:COL) and went on to facilitate over 20 more hospital acquisitions for
Columbia. Dr. Greeson has an eclectic past, she served on the Board of Directors
of an International Anonymous organization as an Executive Director for eight
years, worked with Mother Theresa and was the U.S. Congressional Nominee for the
State of Nevada in 1994. Dr. Greeson currently serves on the Advisory Board of
Directors of Maxheal Inc., a company pursuing the sale of various
pharmacological products, and on the Board of Restaurant Connections
International, Inc., a company with approximately 13 licensed Pizza Hut
locations in Brazil. Dr. Greeson devotes substantially all of her time to the
affairs of Samaritan Pharmaceuticals.


                                       12
<PAGE>

      Albert Wollen has been a Director of the Company since February 14, 2000,
and became President on October 30, 2000. He served as Chief Executive Officer
from February 14, 2000 to October 30, 2000. From 1985 to February 1993, he was
an executive with Ladenburg Thalmann & Co., an investment banking and brokerage
firm, located in New York, serving as Syndicate Manager. From approximately
February, 1995, to December, 1999, he was one of four co-founders and Managing
Directors of Raintree Capital, L.L.C., which founded a company called First
America Automotive, devoted to the sale of new automobiles of various
manufacturers.

      Eugene Boyle has been our Chief Financial Officer, Chief Operation
Officer, and a Director since June 16, 2000. Mr. Boyle received a BSE in
Computer Engineering and Applied Mathematics from Tulane University and an MBA
from Babson College. From 1993 to 1994, Mr. Boyle was employed by Columbia/HCA
as its Chief Operations Officer for the southeast region. Mr. Boyle assisted
with mergers and acquisitions of numerous hospitals, and he was responsible for
reducing operational expenses. Mr. Boyle has passed the series 7 and 63
securities brokerage registered representative exams, although he is not a
practicing representative.

      Doug Bessert has been a Director since March 15, 2001. Mr. Bessert
received his BS in Marketing from the University of Wyoming. Since April 1999,
Mr. Bessert has been the founder and a consultant of Douglas D. Bessert
Financial Consultants, a financial consulting firm that manages portfolios for
over 230 clients. From October 1981 until November 2000, Mr. Bessert was a
partner, developer, and marketer at Country Lane Estates, a real estate
development company.

      Welter "Budd" Holden has been a Director since October 31, 1997. Mr.
Holden assisted the Company in recruiting and networking patients for clinical
trials. For the past five years, Mr. Holden has been an independent consultant
providing architectural and interior design advice. Mr. Holden is the Chairman
of our Business/Scientific Advisory Board. Mr. Holden received his BA in
architectural and interior design from the Pratt Institute.

      Paul J. Burkett has been a Director since October 31, 1997. Since 1996 Mr.
Burkett has worked in independent mining and real estate ventures. Mr. Burkett
has served as a member of the Board of Directors of Aaminex Capital Corporation,
a company holding inactive mining properties in Nevada and equity in Nevada Gold
and Casinos, Inc. Since 1993 Mr. Burkett has been a Vice-President and a
Director of Nevada Gold and Casinos, Inc., a public gaming and real estate
development firm. Since March 1998, Mr. Burkett has been the President of
Goldfield Resources, a wholly owned subsidiary of Nevada Gold and Casinos that
owns approximately 500 inactive mining claims.

      Cynthia C. Thompson has been a Director since March 31, 1999. Ms. Thompson
is the founder, and since May 1998, has served as the Chief Executive Officer of
United States Service Company, a service company serving food and beverage
original equipment manufacturers and food service vendors nationwide. In May
1998, Ms. Thompson founded Intuitive Solutions International, Inc., a Houston,
Texas firm engaged in capital formation and operations management consulting,
where she serves as the President. From May 1987 to May 1993 Ms. Thompson was a
representative at E.F. Hutton/Shearson Lehman Brothers in the Regional
Institutional Group assisting with bank and institutional accounts. From May
1993 to May 1994, she was a corporate accounts representative with Oppenheimer &
Company, Inc., and from May 1994 to May 1998, she was the Director, Corporate
Finance Department, of D.E. Frey & Company, Inc., a brokerage firm.

      H. Thomas Winn has served as a Director since March 31, 1999. Mr. Winn has
served as the Chairman, Chief Executive Officer, President and a Director of
Nevada Gold & Casinos, Inc., a public gaming and real estate development firm,
since January 1994. He has also served as Chairman and President of Aaminex
Capital Corporation, a consulting and venture capital firm since 1983.

      Brian Sullivan has been a Director since March 15, 2001. Mr. Sullivan has
a BA in Psychology and English from the University of Massachusetts at Amherst,
and a Masters in Victorian Philosophy from the University of Hall in England.
From 1982 to 1996, Mr. Sullivan served as Director of Pratesi of Beverly Hills,
where he was responsible for negotiating a relationship with Neiman-Marcus,
starting new


                                       13
<PAGE>

franchises, and opening new stores. From 1996 through 1997, Mr. Sullivan was
Director of Antiques at Charles Pollack, in Los Angeles, increasing sales by
over $1M in one year.

Directors serve until the next annual meeting of shareholders or until their
successors are elected and qualified. Officers serve at the discretion of the
Board of Directors. No Director or executive officer of the Company has any
family relationship with any other director or executive officer of the Company,
except that Mr. Boyle is the son of Dr. Greeson.

The Company has formed, by determination of the Board of Directors, an Audit
Committee, and a Compensation Committee, and has also formed a
Business/Scientific Advisory Board, with all of these under completion as to who
will be appointed, policies and meeting schedules, with, however, Director
Holden to act as initial Chair of the Business/Scientific Advisory Board.

Item 10. Executive Compensation

The following table summarizes the compensation paid to our chief executive
officer and the other four most highly paid executive officers whose total
salary and bonus exceed $100,000 for the year ending December 31, 2000, whom we
refer to as our named executive officers:

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                               Long-Term
                                                                       Annual Compensation                    Compensation
                                                                       -------------------                    ------------

                                                                                              Salary           Securities
        Executive Officer                                  Salary            Bonus            Accrued         Underlying
        -----------------                 Year             ------            -----            -------           Options
                                          ----                                                                  -------
<S>                                       <C>              <C>                 <C>            <C>                  <C>
          Janet Greeson*                  1998                0                0                 0                 0
                                          1999             40,000              0                 0                 0
                                          2000             30,000              0              282,000              0

          Eugene Boyle*                   1998                0                0                 0                 0
                                          1999                0                0                 0                 0
                                          2000                0                0              182,000              0
</TABLE>

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

      * On June 16, 2000, Dr. Greeson, Ms. Thompson and Messrs. Boyle, Burkett,
      Holden, Winn and Wollen received, respectively, 1,000,000, 250,000,
      500,000, 100,000, 100,000, 100,000 and 1,000,000 shares of the Company's
      common stock as compensation for past services rendered to the Company. On
      February 28, 2001, the Company's Board of Directors rescinded all such
      shares effective as of November 2, 2000, subject to an agreement to
      re-issue the rescinded shares upon stockholder approval of an increase in
      the authorized shares of common stock. Such rescinded shares are not
      included in the amounts shown in the table above.

1997 Stock Option Plan

Our 1997 Stock Option Plan (the "Plan") was adopted by our Board of Directors
and approved by our stockholders at the 1997 Annual Meeting. Two million five
hundred thousand shares of common stock were reserved for issuance upon exercise
of options granted under the Plan.

The purpose of the Plan is to promote the success of our Company and its
subsidiaries by facilitating the retention of competent personnel and by
furnishing incentive to officers, directors, employees, consultants, and
advisors upon whose efforts the Company's success will depend to a large degree.

The Compensation Committee of our Board of Directors administers our Plan. The
Committee has sole power and authority, consistent with the provisions of our
Plan, to determine which eligible participants will receive awards, the form of
the awards and the number of shares of our common stock covered by each


                                       14
<PAGE>

award. The committee may impose terms, limits, restrictions and conditions upon
awards, and may modify, amend, extend or renew awards, to accelerate or change
the exercise timing of awards or to waive any restrictions or conditions to an
award.

Our Plan permits the granting of options to purchase shares of our common stock
intended to qualify as incentive stock options under the Internal Revenue Code
and stock options that do not qualify as incentive options. The option exercise
price of each option will be determined by the committee. The term of each
option will be fixed by the committee. The Committee will determine at what time
or times each option may be exercised and, the period of time, if any, after
retirement, death, disability or termination of employment during which options
may be exercised.

As of March 28, 2001, the Company has not granted any options to purchase any of
the Company's Common Stock under the Plan. Our Board of Directors has agreed to
terminate the Plan upon stockholder approval of the Samaritan Pharmaceuticals,
Inc. 2001 Stock Incentive Plan.

401(k) Plan

We adopted a tax-qualified employee savings and retirement plan, or 401(k) plan,
covering our full-time employees located in the United States. The 401(k) plan
is intended to qualify under Section 401(k) of the Internal Revenue Code of
1986, as amended, so that contributions to the 401(k) plan by employees, and the
investment earnings thereon, are not taxable to employees until withdrawn from
the 401(k) plan. Under the 401(k) plan, employees may elect to reduce their
current compensation up to the statutorily prescribed annual limit and have the
amount of such contribution contributed to the 401(k) plan. The 401(k) plan does
permit additional matching contributions to the 401(k) plan by us on behalf of
participants in the 401(k).

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding beneficial ownership of our
common stock as of March 27, 2001, by all persons known by us to own
beneficially 5% or more of the outstanding shares of our common stock, each
director, and all executive officers and Directors as a group:

<TABLE>
<CAPTION>
Name and Address of                            Number of Shares               Percentage
Beneficial Owner                               of Beneficially Owned          Ownership of Class(1)
----------------------                         ---------------------          ---------------------
<S>                                                       <C>                    <C>
Welter Holden(2)(3)(6)(8)                                 200,000                 .9%
205 Bradford Street
Provincetown, MA 02657

Dr. Janet Greeson(2)(3)(6)(8)                             200,000                 .9%
8058 Pinnacle Peak Ave,
Las Vegas, NV 89113

Paul Burkett(2)(3)(6)(8)                                  128,500                 .5%
4518 Whitset
Studio City, CA 91604

Cynthia Thompson(2)(3)(5)(6)(8)                           154,000                 .7%
3040 Post Oak Blvd. #695
Houston, Texas 77056

H. Thomas Winn(2)(3)(6)(8)                                100,000                 .4%
3040 Post Oak Blvd. #675
Houston, Texas 77056
</TABLE>


                                       15
<PAGE>

<TABLE>
<S>                                                     <C>                      <C>
Cortisol Medical Research(4)                            1,545,100                6.6%
2915 W. Charleston #7
Las Vegas, NV 89102

Albert "Bert" Wollen (2)(3)(6)(7)(8)                      200,000                 .9%
Windermere Capital
5847 San Felipe, S. 310
Houston TX 77057

Eugene Boyle (2)(6)(8)                                  1,319,000                5.6%
101 Convention Center Drive #310
Las Vegas, Nevada, 89109

Brian Sullivan(2)(6)                                      750,000                3.2%
101 Convention Center Drive #310
Las Vegas, Nevada, 89109

Douglas Bessert(2)(3)                                         -0-                -0-

All officers and Directors                              3,051,500               13.1%
as a group (9) persons (2)(6)(8)
</TABLE>

--------
(1) Calculated on the basis of 23,402,794 shares of Common Stock issued and
outstanding and percentages are rounded and so are approximates.
(2) Officer and/or Director.
(3) The Director owns less than one percent.
(4) Includes 1,545,100 shares held by Cortisol Medical Research, Inc., subject
to dispute by the Company. See, " Legal Proceedings."
(5) 24,000 shares are held by Intuitive Solutions International, Inc., which Ms.
Thompson controls, and 10,000 are held in her name.
(6) Includes, in accordance with Rule 13d-3, shares an officer or Director may
be deemed the beneficial owner, except note: Mr. Boyle is a son of Dr. Greeson,
and they each disclaim beneficial ownership of each other's shares.
(7) Includes 200,000 shares held by Windermere Capital, L.L.C., a company he
owns and controls.
(8) Includes shares issued to the Directors and that are the subject of a suit.
See, " Legal Proceedings." On June 16, 2000, Dr. Greeson, Ms. Thompson and
Messrs. Boyle, Burkett, Holden, Winn and Wollen received, respectively,
1,000,000, 250,000, 500,000, 100,000, 100,000, 100,000 and 1,000,000 shares, of
the Company's common stock as compensation for past services rendered to the
Company. On February 28, 2001, the Company's Board of Directors rescinded all
such shares effective as of November 2, 2000, subject to an agreement to
re-issue the rescinded shares upon stockholder approval of an increase in the
authorized shares of common stock. The rescinded shares are not included in the
amounts shown in the table above.

Item 12. Certain Relationships and Related Transactions

The following transactions are believed by Management to be on terms as fair to
the Company as those the Company could have obtained from unrelated third
parties and arms-length negotiations.

On June 16, 2000, Dr. Greeson, Ms. Thompson and Messrs. Boyle, Burkett, Holden,
Winn and Wollen received, respectively, 1,000,000, 250,000, 500,000, 100,000,
100,000, 100,000 and 1,000,000 shares, of the Company's common stock as
compensation for past services rendered to the Company. On February 28, 2001,
the Company's Board of Directors rescinded all such shares effective as of
November 2, 2000, subject to an agreement to re-issue the rescinded shares upon
stockholder approval of an increase in the authorized shares of common stock.


                                       16
<PAGE>

During the middle of 1999, before Mr. Wollen became an officer of the Company,
his company, Windermere Capital, L.L.C., advanced, on behalf of Pashua Partners,
a company which was under negotiations for a funding of the Company, the sum of
$50,000 as an initial payment of a $500,000 intended loan to the Company. The
loan was not finalized since the funding transaction was not completed due to
matters relating to certain litigation. See, Legal Proceedings." Windermere
Capital, L.L.C. has cancelled the debt in exchange for 200,000 shares of common
stock, in restricted form with reference to SEC Rule 144.

Item 13 Exhibits And Reports On Form 8-K.

Exhibits
No.                      Description
-------------------------------------------------------------------------
2.1   Agreement and Plan of Reorganization*
3.1   Articles of Incorporation, as amended*
3.2   By-Laws (adopted March, 2001)
4.1   Form of common stock certificate*
4.2   1997 Stock Option Plan*
10.1  License Agreement between Cortisol Medical Research, Inc., and
      Steroidogenesis Inhibitors, Inc., dated September 6, 1994*
10.2  Exclusive Licensing Agreement between Steroidogenesis Inhibitors, Inc.,
      and Steroidogenesis Inhibitors Canada, dated February 10, 1996*
10.3  Consulting Agreement between Performance Strategies, Inc., and the Company
      dated July 15, 1998*
10.4  Form of Consulting Agreement between The Augustine Equity Fund and the
      Company dated December 17, 1999*
10.5  Agreement between AIDS Research Alliance Agreement and the Company dated
      March 5, 1999*
10.6  Assignment between Alfred T. Sapse, M.D., and Steroidogenesis Inhibitors
      International dated July 15, 1999*
10.7  Assignment between Steroidogenesis Inhibitors, Inc., and the Company dated
      July 15, 1999*
10.8  Common Stock Purchase Agreement between Company and Fusion Capital Fund
      II, LLC., dated November 2, 2000**
10.9  Form of Registration Rights Agreement between Company and Fusion Capital
      Fund II, LLC.**
21    List of Subsidiaries**

--------------
* Incorporated by reference to the Company's SEC Form 10-SB filing, including
any amendments, on file with the Commission.
* * Incorporated by reference to the Company's SEC Form SB-2 filing, including
any amendments, on file with the Commission.

Reports On Form 8-K.

None.


                                       17
<PAGE>

                                   SIGNATURES

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

                             STEROIDOGENESIS INHIBITORS
                             INTERNATIONAL, INC.


Dated: April 3, 2001         By: /s/ Albert "Bert" Wollen
       --------------            ---------------------------------------------
                                 Albert "Bert" Wollen, President

Dated: April 3, 2001         By: /s/ Eugene Boyle
       --------------            ---------------------------------------------
                                 Eugene Boyle, Chief Financial Officer
                                 (principal financial officer)

Dated: April 3, 2001         By: /s/ Dr. Janet Greeson
       --------------            ---------------------------------------------
                                 Dr. Janet Greeson, Chief Executive Officer
                                 (principal executive officer)

Dated: April 3, 2001         By: /s/ Budd Holden
       --------------            ---------------------------------------------
                                 Budd Holden, Director


                                       18
<PAGE>

                  STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC

                          (A DEVELOPMENT STAGE COMPANY)

                        CONSOLIDATED FINANCIAL STATEMENTS

                                      INDEX

                                                          Page Number
                                                      ---------------------
INDEPENDENT AUDITORS' REPORTS                                F - 2

CONSOLIDATED FINANCIAL STATEMENTS:

       Balance Sheet                                         F - 3

       Statements of Operations                              F - 4

       Statements of Shareholders' Deficit                   F - 5

       Statements of Cash Flows                              F - 6

       Notes to Financial Statements                         F - 7


                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Steroidogenesis Inhibitors International, Inc.

      We have audited the accompanying consolidated balance sheet of
Steroidogenesis Inhibitors International, Inc. (a development stage company) as
of December 31, 2000 and the related consolidated statements of operations,
shareholders' deficit and cash flows for the year ended December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our 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,
the consolidated financial position of Steroidogenesis Inhibitors International,
Inc. (a development stage company) as of December 31, 2000 and the consolidated
results of its operations and its cash flows for the years ended December 31,
2000 in conformity with generally accepted accounting principles.

      The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has incurred significant
losses and as more fully described in Note 1, the Company anticipates that
additional funding will be necessary to sustain the Company's operations through
the year ending December 31, 2001. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

                                                    /s/Feldman Sherb & Co, P.C.

                                                    Feldman Sherb & Co., P.C.
                                                    Certified Public Accountants

New York, New York
March 29, 2001


                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Steroidogenesis Inhibitors International, Inc.

      We have audited the accompanying consolidated balance sheets of
Steroidogenesis Inhibitors International, Inc. (a development stage company) and
subsidiary as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash flows for the
years ended December 31, 1999 and 1998. All information included in these
financial statements is the representation of the owners of the Company. 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 consolidated financial statements referred to above
present fairly, the in all material respects, the financial position of
Steroidogenesis Inhibitors International, Inc. and subsidiary as of December 31,
1999 and 1998 and the results of its operations, and its cash flows for the
years ended December 31, 1999 and 1998, in conformity with generally accepted
accounting principles.

      The accompanying cumulative statements of operations, stockholders' equity
(deficit) and cash flows regarding the period from inception (September 5, 1994)
through December 31, 1999, include activity prior to our engagement as auditors
upon which we have not performed procedures. Therefore, we do not express an
opinion on them.

                                             /s/ Tabor and Company

                                                 Tabor and Company
                                                 Certified Public Accountants
Decatur, Georgia
March 6, 2000


                                      F-2A
<PAGE>

                 STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2000

                                     ASSETS

<TABLE>
<S>                                                                   <C>
CURRENT ASSETS:
      Cash                                                            $   187,853
                                                                      -----------
           TOTAL CURRENT ASSETS                                           187,853
                                                                      -----------

PROPERTY AND EQUIPMENT                                                     40,163

OTHER ASSETS:
      Offering costs                                                        1,050
      Patent registration costs                                            90,079
      Purchased  technology rights                                         74,463
      Deposits                                                             15,720
                                                                      -----------
           TOTAL OTHER ASSETS                                             181,312
                                                                      -----------

                                                                      $   409,328
                                                                      ===========

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
      Accounts payable                                                $   511,605
      Accrued expenses                                                    464,000
      Common stock to be issued                                           188,550
                                                                      -----------
           TOTAL CURRENT LIABILITIES                                    1,164,155
                                                                      -----------

DEFERRED REVENUE                                                          250,000

SHAREHOLDERS' DEFICIT:
      Common stock, 25,000,000 share authorized at $.001
           par value,  21,534,807 issued and outstanding                   21,535
      Additional paid-in capital                                        9,390,184
      Deferred compensation                                              (759,560)
      Accumulated deficit during development stage                     (9,656,986)
                                                                      -----------
           TOTAL SHAREHOLDERS' DEFICIT                                 (1,004,827)
                                                                      -----------

                                                                      $   409,328
                                                                      ===========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       F-3
<PAGE>

                 STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

             FROM INCEPTION (SEPTEMBER 5, 1994) TO DECEMBER 31, 2000
               AND FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                 From                     For the Years
                                              Inception                       Ended
                                          September 5, 1994                December 31,
                                                  To            ---------------------------------
                                          December 31, 2000        2000                  1999
                                         -------------------    ------------         ------------
                                            (Unaudited)
<S>                                        <C>                  <C>                  <C>
REVENUES                                   $     50,000         $         --         $     50,000
                                           ------------         ------------         ------------

EXPENSES:

Research and development                      1,735,191            1,077,590              379,491
Interest, net                                    13,945                   --               13,945
General and administrative                    7,897,509            2,746,810            1,309,874
Depreciation and amortization                    60,341               18,908               17,945
                                           ------------         ------------         ------------
                                              9,706,986            3,843,308            1,721,255
                                           ------------         ------------         ------------

Net loss                                   $ (9,656,986)        $ (3,843,308)        $ (1,671,255)
                                           ============         ============         ============

Loss per share-basic and diluted           $      (1.01)        $      (0.21)        $      (0.12)
                                           ============         ============         ============

Weighted average number of
shares used in calculation of basic
and diluted loss per share                    9,597,152           17,947,520           13,391,109
                                           ============         ============         ============
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       F-4
<PAGE>

                  STEROIDOGENESIS INHIBITORS INTERNATIONS, INC.
                          (A DEVELOPMENT STATE COMPANY)

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT

             FROM INCEPTION (SEPTEMBER 5, 1994) TO DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                                 Shares
                                                      Number       Par Value    Reserved     Additional
                                                        of          Common         for        Paid in                    Deferred
                                                      Shares        Stock      Conversion     Capital       Warrants   Compensation
                                                    -----------  -----------   -----------  ---------------------------------------
<S>                                                  <C>         <C>           <C>          <C>           <C>              <C>
Inception at September 5, 1994                               --  $        --   $        --  $        --   $        --    $       --

Shares issued for cash, net of offering costs         6,085,386          609            --      635,481            --            --
Warrants issued for cash                                     --           --            --           --         5,000            --
Shares issued as compensation for services              714,500           71            --    1,428,929            --            --

Net loss                                                     --           --            --           --            --            --
                                                    -----------  -----------   -----------  ---------------------------------------
December 31, 1996                                     6,799,886          680            --    2,064,410         5,000            --

Issuance of stock, prior to acquisition                 206,350           21            --      371,134            --            --
Acquisition of subsidiary for stock                   1,503,000          150            --       46,545            --            --

Shares of parent redeemed, par value $.0001          (8,509,236)        (851)           --          851            --            --
Shares of public subsidiary issued, par value $.001   7,689,690        7,690           820       (8,510)           --            --

Net loss                                                     --           --            --           --            --            --
                                                    -----------  -----------   -----------  ---------------------------------------

December 31, 1997                                     7,689,690        7,690           820    2,474,430         5,000            --

Conversion of parent's shares                           696,022          696          (696)          --            --            --
Shares issued for cash, net of offering costs           693,500          694            --      605,185            --            --
Shares issued in cancellation of debt                   525,000          525            --      524,475            --            --
Shares issued as compensation                           400,000          400            --      349,600            --            --

Net loss                                                     --           --            --           --            --            --
                                                    -----------  -----------   -----------  ---------------------------------------

December 31, 1998                                    10,004,212       10,005           124    3,953,690         5,000            --

Conversion of parent's shares                            13,000           13           (13)          --            --            --
Shares issued in cancellation of debt                    30,000           30            --       29,970            --            --
Shares issued for cash, net of offering costs            45,000           45            --       41,367            --            --
Shares issued as compensation                         3,569,250        3,569            --      462,113            --            --
Detachable warrants issued                                   --           --            --           --       152,125            --
Detachable warrants exercised                           100,000          100            --      148,900      (149,000)           --
Debentures converted to stock                         1,682,447        1,682            --      640,438            --            --

Net loss                                                     --           --            --           --            --            --
                                                    -----------  -----------   -----------  ---------------------------------------

December 31, 1999                                    15,443,909       15,444           111    5,276,478         8,125            --

Conversion of parent's shares                           128,954          129          (111)         (18)           --            --
Shares issued for cash, net of offering costs         1,575,192        1,575            --      858,460            --            --
Shares issued in cancellation of debt                   875,000          875            --      660,919            --            --
Shares issued in cancellation of accounts payable       100,000          100            --       31,165            --            --
Shares issued as compensation                         3,372,945        3,373            --    2,555,094            --      (759,560)
Warrants exercised                                       38,807           39            --        3,086        (3,125)           --
Warrants expired                                             --           --            --        5,000        (5,000)           --

Net loss                                                     --           --            --           --            --            --
                                                    -----------  -----------   -----------  ---------------------------------------

December 31, 2000                                    21,534,807  $    21,535   $        --  $ 9,390,184   $        --      (759,560)
                                                    ===========  ===========   ===========  ===========   ===========    ==========

<CAPTION>
                                                                           Total
                                                         Accumulated   Shareholders'
                                                           Deficit        Deficit
                                                         -----------    -----------
<S>                                                      <C>            <C>
Inception at September 5, 1994                           $        --    $        --

Shares issued for cash, net of offering costs                     --        636,090
Warrants issued for cash                                          --          5,000
Shares issued as compensation for services                        --      1,429,000

Net loss                                                  (2,152,843)    (2,152,843)
                                                         -----------    -----------
December 31, 1996                                         (2,152,843)       (82,753)

Issuance of stock, prior to acquisition                           --        371,155
Acquisition of subsidiary for stock                               --         46,695

Shares of parent redeemed, par value $.0001                       --             --
Shares of public subsidiary issued, par value $.001               --             --

Net loss                                                    (979,635)      (979,635)
                                                         -----------    -----------

December 31, 1997                                         (3,132,478)      (644,538)

Conversion of parent's shares                                     --             --
Shares issued for cash, net of offering costs                     --        605,879
Shares issued in cancellation of debt                             --        525,000
Shares issued as compensation                                     --        350,000

Net loss                                                  (1,009,945)    (1,009,945)
                                                         -----------    -----------

December 31, 1998                                         (4,142,423)      (173,604)

Conversion of parent's shares                                     --             --
Shares issued in cancellation of debt                             --         30,000
Shares issued for cash, net of offering costs                     --         41,412
Shares issued as compensation                                     --        465,682
Detachable warrants issued                                        --        152,125
Detachable warrants exercised                                     --             --
Debentures converted to stock                                     --        642,120

Net loss                                                  (1,671,255)    (1,671,255)
                                                         -----------    -----------

December 31, 1999                                         (5,813,678)      (513,520)

Conversion of parent's shares                                     --             --
Shares issued for cash, net of offering costs                     --        860,035
Shares issued in cancellation of debt                             --        661,794
Shares issued in cancellation of accounts payable                 --         31,265
Shares issued as compensation                                     --      1,798,907
Warrants exercised                                                --             --
Warrants expired                                                  --             --

Net loss                                                  (3,843,308)    (3,843,308)
                                                         -----------    -----------

December 31, 2000                                        $(9,656,986)   $(1,004,827)
                                                         ===========    ===========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       F-5
<PAGE>

                 STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

 FROM INCEPTION (SEPTEMBER 5, 1994 to December 31, 2000) AND FOR THE YEARS ENDED
                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                               From                 For the Years
                                                             Inception                   Ended
                                                        Septmeber 5, 1994             December 31,
                                                                to           -----------------------------
                                                        December 31, 2000       2000              1999
                                                        -----------------    -----------       -----------
                                                            (Unaudited)
<S>                                                        <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                   $(9,656,986)      $(3,843,308)      $(1,671,255)
Adjustments to reconcile net loss to net cash used in
    operating activities:
            Depreciation and amortization                       59,412            18,908            17,945
            Expenses paid through issuance of stock          4,090,089         1,798,907           479,627
(Increase) decrease in assets:
            Notes receivable-related party                          --            11,478             1,412
            Prepaids and other current assets                  (15,525)               --            (6,313)
            Other assets                                            --             2,000                --
Increase in liabilities:
            Deferred revenue                                   250,000                --                --
            Due to related parties                                  --                --                --
            Accounts payable and accrued expenses            1,061,664           778,166           214,793
                                                           -----------       -----------       -----------

NET CASH USED IN OPERATING ACTIVITIES                       (4,211,346)       (1,233,849)         (963,791)
                                                           -----------       -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of technology rights                                 (108,969)               --                --
Purchase of property and equipment                             (65,069)          (18,007)          (18,580)
Increase in patent registration costs                          (90,079)          (34,532)          (20,129)
                                                           -----------       -----------       -----------

NET CASH USED IN INVESTING ACTIVITIES                         (264,117)          (52,539)          (38,709)
                                                           -----------       -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from warrants                                         157,125                --           152,125
Proceeds from debentures                                       642,120                --           628,175
Proceeds from stock offerings                                2,514,571           860,035            41,412
Common stock to be issued                                      188,550           188,550                --
Offering costs                                                  (1,050)           (1,050)               --
Short-term loan proceeds                                     1,162,000           425,000           182,000
                                                           -----------       -----------       -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                    4,663,316         1,472,535         1,003,712
                                                           -----------       -----------       -----------

CHANGE IN CASH                                                 187,853           186,147             1,212
CASH AT BEGINNING OF PERIOD                                                        1,706               494
                                                           -----------       -----------       -----------

CASH AT END OF PERIOD                                      $   187,853       $   187,853       $     1,706
                                                           ===========       ===========       ===========

NON-CASH FINANCING & INVESTING ACTIVITIES:

Purchase of net, non-cash assets of subsidiary
     for stock                                             $       195       $                 $        --
                                                           ===========       ===========       ===========
Debt retired through issuance
    of stock                                               $ 1,890,179       $   693,059       $   672,120
                                                           ===========       ===========       ===========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       F-6
<PAGE>

                 STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      A. The Company:

      Steroidogenesis Inhibitors International, Inc. (the Company), was
incorporated as Steroidogenesis Inhibitors, Inc., in Nevada in September, 1994.
The Company was organized to engage in securing the patent for and the licensing
of a drug called ANTICORT, a trademarked, proprietary drug. ANTICORT was
developed by Cortisol Medical Research, Inc., the majority shareholder, from
whom the Company purchased the rights. ANTICORT was developed for the treatment
of diseases related to deficiencies in the immune system.

      On October 21, 1997, the Company acquired 100% of the outstanding stock of
WEBX Media, Inc., through a reorganization agreement. Under the agreement, the
principal shareholders of the Company exchanged their stock on a share for share
basis for the stock of the Subsidiary. At the time of the acquisition, the
Subsidiary was a non-operating public shell with no significant assets. The
Company then converted such shares into shares of the Subsidiary for the purpose
of becoming a public company.

      The accompanying financial statements have been prepared on the basis that
the Company will continue as a going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.
The Company has incurred a loss since inception of $9,656,987. As such, the
financial statements reflect recurring losses, working capital deficiencies,
negative cash flows from operating activities, and adverse key financial ratios.
The Company is dependent upon outside capital to continue in existence and to
achieve profitable operations.

      Management's plans for dealing with the adverse effects of the conditions
cited above is to raise working capital through equity financing arrangements.
In November 2000, the Company entered into a common stock purchase agreement
with an institutional investor through which up to $20,000,000 worth of common
stock can be issued by the Company (See note 11). Furthermore, management notes
that many expenditures can be deferred until funds are available to continue
development. While such a strategy would not be preferred due to a competitive
market, management is willing to pursue it if necessary.

      B. Basis of Consolidation:

      The accompanying financial statements include the accounts of the Company
and its subsidiary. All intercompany balances and transactions have been
eliminated in consolidation.

      C. Property and Equipment

      Property and equipment are recorded at cost. Depreciation is provided
using the straight line method over the estimated useful lives of the assets.

      D. Intangibles

      1. Legal fees associated with registering ANTICORT, and derivative patents
are recorded at cost. Amortization, once the patent is approved, will be
calculated using the straight-line method, over the estimated useful lives of
the patents.

      2. Purchased technology rights are recorded at cost and are being
amortized using the straight line method over the estimated useful life of the
technology. Amortization of purchased technology was approximately $10,900 for
the year ended December 31, 2000. Accumulated amortization at December 31, 2000
was $34,510.


                                      F-7
<PAGE>

      E. Earnings (loss) per share

      The Company has adopted SFAS, No. 128, Earnings per Share. Net income
(loss) per common share has been restated for all periods presented to conform
to the provisions of SFAS No. 128. Basic earnings (loss) per share is computed
by dividing net income (loss) available to common stockholders by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share reflects the per share amount that would have resulted if diluted
potential common stock had been converted to common stock, as prescribed by SFAS
No. 128.

      F. Use of Estimates

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

      G. Research and Development

      Research and development are treated as expenses when incurred.

      H. Impairment of Long-Lived Assets

      The Company reviews long-lived assets, certain identifiable assets and
goodwill related to those on a quarterly basis for impairment whenever
circumstances and situations change such that there is an indication that the
carrying amounts may not be recovered. At December 31, 2000, the Company does
not believe that any impairment has occurred.

      I. Fair Value Of Financial Instruments

      Statement of Financial Accounting Standard No. 107 "Disclosures about Fair
Value of Financial Instruments" (SFAS 107) requires the disclosure of fair value
information about financial instruments whether or not recognized on the balance
sheet, for which it is practicable to estimate the value. Where quoted market
prices are not readily available, fair values are based on quoted market prices
of comparable instruments. The carrying amount of cash and accounts payable
approximates fair value because of the short maturity of those instruments.

      J. New Accounting Pronouncements

      In June 1998 and June 2000, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" and SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities." These statements
establish accounting and reporting standards requiring that every derivative
instrument be recorded on the balance sheet as either an asset or liability
measured at its fair value. SFAS Nos. 133 and 138 also require that changes in
the derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS Nos. 133 and 138 are effective for
fiscal years beginning after June 15, 2000. The Company does not expect that the
adoption of these new standards will have a material impact on the Company's
earnings or financial position.

      In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"), which clarifies certain existing accounting principles for the
timing of revenue recognition and its classification in the financial
statements. In June 2000, the SEC delayed the required implementation date of
SAB 101. As a result, SAB 101 will not be effective for the Company until the
quarter ended September 30, 2001. In October 2000, the SEC issued further
guidance on the interpretations included in SAB 101. The Company is currently
analyzing the impact of this Staff Accounting Bulletin.


                                      F-8
<PAGE>

      In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities--a
replacement of FASB Statement No. 125" ("SFAS 140"). SFAS 140 revises the
standards for accounting for securitizations and other transfers of financial
assets and collateral and requires certain disclosures, but it carries over most
of SFAS 125's provisions without reconsideration. This Statement is effective
for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. This Statement is effective for
recognition and reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending after
December 15, 2000. The Company is currently analyzing this new standard.

      K. Accounting for Stock Options

      The Company adopted Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock Based Compensation". SFAS 123 encourages the
use of a fair-value-based method of accounting for stock-based awards under
which the fair value of stock options is determined on the date of grant and
expensed over the vesting period. Under SFAS 123, companies may, however,
measure compensation costs for those plans using the method prescribed by
Accounting Principles Board Opinion No. 25, ("APB No.25"), "Accounting for Stock
Issued to Employees." Companies that apply APB No. 25 are required to include
pro forma disclosures of net earnings and earnings per share as if the
fair-value-based method of accounting had been applied. The Company elected to
account for such plans under the provisions of APB No. 25.

2.    REVERSE ACQUISITION OF SUBSIDIARY

      On October 21, 1997, the Company acquired 100% of the outstanding stock of
WEBX Media, Inc., through a reorganization agreement. Under the agreement, the
principal shareholders of the Company exchanged their stock on a share for share
basis for the stock of the Subsidiary. At the time of the acquisition, the
Subsidiary was a non-operating public shell with no significant assets. The
Company then converted such shares into shares of the Subsidiary for the purpose
of becoming a public company.

      The acquisition has been accounted for as a reverse acquisition under the
purchase method for business combinations. Accordingly, the combination of the
two companies is recorded as a recapitalization of the Company, pursuant to
which the Company is treated as the continuing entity.

3.    DEFERRED REVENUE

      The Company received $250,000 from Steroidogenesis Inhibitors Canada,
Inc., ( SI- Canada) for a licensing agreement. The licensing agreement has a
duration of ten years beginning with the date the drug is approved for use in
Canada. Pursuant to the agreement, the Company has agreed to provide assistance
in securing such approval. The revenue will be recognized as expenses are
incurred in providing such assistance. The Company is currently involved in
litigation with this entity.

4.    COMMITMENTS AND CONTINGENCIES

      The Company has contracted with the Aids Research Alliance to perform
clinical testing required pursuant to the Company's efforts to secure FDA
approval for ANTICORT. Approximately $469,000 of the $700,000 amended contract
was paid as of December 31, 2000. Accrued at December 31, 2000, and paid in
early January was $30,000. The Company leases various facilities under operating
lease agreements expiring through April 2002. The facilities lease agreements
provide for a base monthly payment of $2,620 per month. Rent expense for the
year ended December 31, 2000 was $33,119. Future minimum annual lease payments
under the facilities lease agreements are as follows: 2001 $32,400, 2002 $2,779.


                                      F-9
<PAGE>

5.    PROPERTY AND EQUIPMENT

      Property and equipment, at cost, consist of the following as of December
31, 2000:

      Furniture and Fixtures                                       $65,069
      Less accumulated depreciation                                 24,906
                                                                   -------
                                                                   $40,163
                                                                   =======

6.    INCOME TAXES

      The Company follows Statement of Financial Accounting Standards No. 109 -
Accounting for Income Taxes, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have
been included in the financial statements or tax returns. Under this method,
deferred tax assets and liabilities are based on the differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
The Company has net operating loss at December 31, 2000 of approximately of
$8,000,000, expiring through 2015. Deferred income tax assets as of December 31,
2000 of $2,700,000 as a result of net operating losses, have been fully offset
by valuation allowances. The valuation allowances have been established equal to
the full amounts of the deferred tax assets, as the Company is not assured that
it is more likely than not that these benefits will be realized.

      A reconciliation of the statutory U.S. Federal rate and effective rates is
as follows:

                                                    Years ended December 31,
                                               -------------------------------
                                                       2000         1999
                                               -------------------------------
      Net operating loss benefit                         35%          35%
      Benefit not utilized                              (35%)        (35%)
                                               -------------------------------
      Effective Rate                                     --           --
                                               ===============================

7.    SHAREHOLDERS' DEFICIT

      A. Stock warrants and options:

                                                       Shares        Weighted
                                                                     Average
                                                                  Exercise Price
                                                     ----------   --------------
      Outstanding and exercisable at December         1,318,500         4.88
      31, 1998
      Granted                                           150,000         0.32
      Exercised                                        (100,000)        0.01
      Expired                                        (1,218,500)        5.00
                                                     ----------      -------
      Outstanding and exercisable at December           150,000         2.65
      31, 1999
      Exercised and expired                            (150,000)        0.32
                                                     ----------      -------
      Outstanding and exercisable at December                --           --
      31, 2000                                       ==========      =======


                                      F-10
<PAGE>

      The 1,218,500 options granted during the year ending December 31, 1998,
were pursuant to a 506 offering. This included the 525,000 shares of stock
issued in satisfaction of the short-term debt at December 31, 1997. During the
year ended December 31, 1999, 150,000 detachable warrants were issued with
convertible debentures. The warrants were valued at the difference between the
exercise price at the trading price of the stock on the date the warrants were
issued. Of the warrants issued, 100,000 were exercised during 1999. The
remaining warrants had a cashless exercise feature which adjusted the amount of
shares to be issued for the trading price of the stock on the date exercised. In
full satisfaction of those outstanding detachable warrants, 38,807 shares were
issued in February, 2000.

      B. Stock as compensation and settlement of debt

      The Company issues stock as compensation for services and supplies,
valuing such issues premised upon the fair market value of the stock or the
services, whichever is more clearly determinable. During 1998, the Company
issued 400,000 shares for services rendered by non-employees. During 1999, the
Company issued 3,569,250 shares of stock as compensation, valuing such issuances
at $465,682. An additional 100,000 shares were issued in January for services
incurred and accrued during 1999.

      During the year ended December 31, 2000, the Company issued an aggregate
of 3,372,945 shares of common stock to various consultants, in consideration of
services rendered or to be rendered to the Company. Such shares were valued at
an aggregate of $2,558,467 ranging from .25-.98 per share, representing the fair
value of the shares issued. The issuances were recorded as $759,560 of deferred
compensation and the balance of $1,798,907 as non-cash compensation expense.
During the year ended December 31, 2000 the Company exchanged 875,000 shares of
the Company's common stock in settlement of indebtedness.

      C. Stock option plan

      The Company has a stock option plan under which 2,500,000 shares are
reserved. At December 31, 2000, no options have been granted pursuant to the
plan.

      D. Other

      Outstanding shares does not include 594,352 of shares which were issued
without Board approval and are subjected to a court order that prohibits voting
or selling such shares.

      E. Stock Warrants

      During the year ended December 31, 2000, the Company issued 100,000
warrants. The following table summarize information about stock warrants at
December 31, 2000:

                  Exercise Price            Warrants            Remaining
                                        Outstanding and      Contractual Life
                                       Exercisable Number
                                          Outstanding

                      $1.00                 100,000                 4

8.    RELATED PARTY TRANSACTIONS

      The Subsidiary purchased the technology rights from an entity controlled
by the president of the Company for $108,968 which represented the shareholders
historical cost of the rights. SI-Canada, subsequent to securing the licensing
agreement with the Company, issued 300,000 share to the president of the
Company. During 1999, consulting fees of $24,000 were paid to an entity owned by
a family member of a director.


                                      F-11
<PAGE>

9.    RISKS AND UNCERTAINTIES

      Marketability of the product is dependent, among other things, upon
securing additional capital to successfully complete the clinical testing of the
product, securing FDA approval, and procurement of viable patents.

10.   LITIGATION

      A. Litigation with Canadian Licensee

      On November 4, 1999, the Company filed suit in Nevada, District Court,
Clark County, Case No. A410592, against Altachem Pharma, Ltd. of Alberta,
Canada, formerly known as Steroidogenesis Inhibitors Canada, Inc. (Altachem) and
Steroidogenesis Inhibitors Canada, Inc. (SI Canada) seeking a declaratory
judgment, damages and other relief as determined by the Court. SI Canada is the
licensee for the Canadian territory for the ANTICORT product, and Altachem is
believed to be the parent.

      The Company claimed that the Defendants have interfered with arrangements
made with Pashua Partners, L.P. (Pashua). Pashua intended to provide funding and
other benefits to the Company. While the Company was in the course of finalizing
arrangements with Pashua, SI Canada and Altachem claimed that they were entitled
to step into the shoes of Pashua for the pending transaction, even though they
were simply a licensee for one Territory.

      Although the Company's lawsuit in Nevada was eventually dismissed on a
jurisdictional basis, the Company is currently pursuing the identical claims in
the Queens Bench in Edmonton, Alberta, Canada, where SI Canada and Altachem are
subject to jurisdiction. In or about November 1999, a lawsuit was filed in
Canada where the Company, SI Canada, and Altachem are pursuing their respective
claims. Management believes the litigation will be resolved without a material
adverse effect on the Company.

      B. Litigation with Former Director

      The Company is currently engaged in litigation with former director Alfred
Sapse. Following his resignation, two lawsuits were initiated against the
Company by Sapse. In addition, after discovering breaches of fiduciary duties by
Sapse, the Company filed a lawsuit against Sapse, Cortisol Medical Research,
Inc, (Cortisol) and Sapse for the return and cancellation of illegally issued
shares.

      In or about June 2000, Sapse filed a lawsuit against the Company in the
District Court, Clark County, Nevada, Case No. A420721. The principal
allegations in the lawsuit concern the issuance of shares to members of the
board of directors as compensation for services rendered. Since that time, the
Board and the recipients of the shares have agreed to rescind the issuance of
the shares, and have entered into agreements providing for reissuance at a
future date. Management believes the litigation will be resolved without a
material adverse effect on the Company.

      In or about September 2000, Sapse filed another lawsuit in District Court,
Clark County, Nevada, Case No. A424126. Sapse alleged claims of defamation and
invasion of privacy claims. Shortly after the lawsuit was filed, the Court
awarded the Company summary judgment, dismissing Sapse's claims against the
Company.

      In or about October 2000, the Company filed a lawsuit against Sapse,
Cortisol, and Renee Sapse, to remedy a self dealing transaction initiated by
Sapse. The Company is actively pursing claims in this lawsuit because Sapse
improperly caused the issuance of shares, thus resulting in unfair dilution of
shareholder's value. As such, the Company is taking all action necessary to
return the improperly issued shares to the Company. Making a preliminary finding
that Sapse had breached his fiduciary duties to the Company, the Court has
frozen and sterilized hundreds of thousands of shares improperly issued by
Sapse.

      Similarly, the Company filed suit in District Court, Dallas County, Texas
to stop the transfer of shares currently in the possession of Sapse, Cortisol
and Renee Sapse. The Company succeeded in restricting the transfer of all shares
in their possession so that the Company may eventually recover all improperly
issued shares by Sapse.


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<PAGE>

11.   FUSION TRANSACTION

      On November 2, 2000, we entered into a common stock purchase agreement
with Fusion Capital Fund II, LLC, ("Fusion") pursuant to which Fusion Capital
agreed to purchase up to $20 million of the Company's common stock over a 50
month period from January 26, 2001, which period may be extended an additional
three months at the Company's discretion.

      Subject to the limits on purchase and the termination rights described
below during each month, Fusion Capital shall purchase up to $400,000 of the
Company's common stock. The obligation of Fusion Capital to purchase each month
is subject to customary conditions, all of which are outside the control of
Fusion Capital as well as the Company's right to suspend purchases described
below. This monthly amount may be increased or decreased by us. The selling
price per share is equal to the lowest of (a) the lowest sale price of our
common stock on the day of submission of a purchase notice by Fusion Capital; or
(b) the average of the three lowest closing sale prices of our common stock
during the 15 trading days prior to the date of submission of a purchase notice
by Fusion Capital; or (c) $20.00.

      The selling price will be adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction
occurring during the 15 trading days in which the closing sale price is used to
compute the purchase price. Notwithstanding the foregoing, Fusion Capital may
not purchase shares of common stock under the common stock purchase agreement if
Fusion Capital or its affiliates would beneficially own more than 9.9% of our
then aggregate outstanding common stock immediately after the proposed purchase.

      If the closing sale price of the Company's common stock is below $20.00,
the Company has the unconditional right to suspend purchases until the earlier
of (1) our revocation of such suspension and (2) such time as the sale price of
our common stock is above $20.00. If the closing sales price of the Company's
common stock on each of the five trading days immediately prior to the first
trading day of any monthly period is at least $5.00, the Company has the right
to require that Fusion Capital purchase all or a portion of the remaining amount
under the common stock purchase agreement during the next two monthly periods.
If the closing sale price of the Company's common stock is below $20.00 for any
10 consecutive trading days, then we may elect to terminate the common stock
purchase agreement without any liability or payment to Fusion.


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