UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 ---------------
                                   Form 10-KSB
(Mark One)
                    ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
   (X)                 OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2002
                                       Or

                  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
                                  -------------
                         Samaritan Pharmaceuticals Inc.
                 (Name of small business issuer in its charter)

              Nevada                             88-0431538
 (State or other jurisdiction of             (I.R.S.Employer
   Incorporation or organization)            Identification No.)

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

                                 (702) 735-7001
                            Issuer's telephone number

        Securities to be registered Pursuant to Section 12(b) of the Act:
                                      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 registrant had no revenues in the fiscal year ended December 31, 2002.

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 February 7, 2003, was approximately $8,185,750 based
upon, as a reasonable assumption, that the issuer's shareholders list, standing
alone, supplies an accurate presentation of those shareholders who are non
affiliates, determined by the issuer to be those persons who are not officers,
Directors or owners of 10% or more of the common stock. The company had
64,555,960 common shares issued and outstanding as of February 7, 2003.

Transitional Small Business Disclosure Format (Check one): Yes__ No _X_

<PAGE>

                         SAMARITAN PHARMACEUTICALS, INC.

                                   FORM 10-KSB
                   GENERAL FORM FOR REGISTRATION OF SECURITIES

                                Table of Contents

                                     Part I

Item 1.  Description of Business....................................       2

Item 2.  Description of Property....................................       19

Item 3.  Legal Proceedings..........................................       19

Item 4.  Submission of Matters to a Vote of Security Holders........       19

                                     Part II

Item 5. Market For Common Equity and Related Stockholder Matters..         19

Item 6.  Management's Discussion and Analysis or Plan of Operation.        22

Item 7.  Financial Statements...................................           28

Item 8.  Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosures..................           29

                                    Part III

Item 9.  Directors, Executive Officers, Promoters and Control
       Persons; Compliance With Section 16(a) of the Exchange Act.         29

Item 10.  Executive Compensation................................           32

Item 11.  Security Ownership of Certain Beneficial
               Owners and Management............................           38

Item 12.  Certain Relationships and Related Transactions........           38

Item 13.  Exhibits and Reports on Form 8-K......................           39

Item 14.  Controls and Procedures ..............................           40

             Signatures.........................................           41

<PAGE>

This annual report contains forward-looking statements. These statements relate
to future events or Samaritan Pharmaceutical's future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may," "will," "should," "expect," "plan," "intend," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue," the negative of these terms
or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially. In evaluating these statements, you
should specifically consider various factors, including the risks outlined in
"Risk Factors." These Factors may cause Samaritan Pharmaceuticals, Inc.'s actual
results, to differ materially from any forward-looking statement.

Although  Samaritan   Pharmaceuticals,   Inc.  believes  that  the  expectations
reflected  in  the   forward-looking   statements  are   reasonable,   Samaritan
Pharmaceuticals,  Inc.  cannot  guarantee  future  results,  events,  levels  of
activity,   performance,   or   achievements.    Moreover,   neither   Samaritan
Pharmaceuticals,  Inc.  nor any  other  person  assumes  responsibility  for the
accuracy  and  completeness  of  these  forward-looking  statements.   Samaritan
Pharmaceuticals,  Inc.  does not  assume  any  obligation  to update  any of the
forward-looking  statements  after  the  date of this  report  to  conform  such
statements to actual results or to changes in Samaritan's expectations.

                                     PART I

Item 1.     Description of Business.

Overview

            Samaritan was formed in March 1996 and became public in October
1997. Our principal executive offices are located at 101 Convention Center
Drive, Suite 310, Las Vegas, NV 89109, and our telephone number is
(702)735-7001.

            Samaritan Pharmaceuticals, Inc. is a development stage biotechnology
company engaged in the research and development of novel therapeutic and
diagnostic products to treat chronic debilitating diseases such as Alzheimer's,
Cancer, central nervous system ("CNS") disorders, cardiovascular disease and
HIV.

            Our overall corporate strategy is to build a robust technology
pipeline by 1. In-licensing early-stage patented technologies from Academic
Research Centers, 2. Focus on the discovery and the development of new drug
compounds and technology to add to our pipeline at Samaritan Laboratories, in
collaboration with Georgetown University.

            Competition

            The biotechnology and biopharmaceutical industries are characterized
by rapidly advancing technologies, intense competition and a strong emphasis on
proprietary products. Many entities, including pharmaceutical and biotechnology
companies, academic institutions and other research organizations are actively
engaged in the discovery and research and development of products that could
compete directly with our products under development.

            Many companies, including major pharmaceutical companies, are also
developing alternative therapies that may compete with our products in our
research fields. These competitors may succeed in developing and marketing
products that are more effective than or marketed before ours.

                                       2
<PAGE>

            Virtually all of our competitors have significantly greater
financial resources and expertise in research and development, manufacturing,
preclinical testing, conducting clinical trials, obtaining regulatory approvals
and marketing. Others have partnered with large established companies in order
to obtain access to these resources. Smaller companies may also prove to be
significant competitors, particularly through the establishment of collaborative
arrangements with large, established companies.

            Our ability to commercialize our products and compete effectively
will depend, in large part, on:

 -- Our success in discovering and developing innovative products that serve
    unmet medical needs that are cost effective;

 -- Our ability to advance through clinical trials, gain acceptance from the
    FDA and other regulatory agencies and to successfully manufacture and
    market these products;

 -- The margins of our products relative to other products or competing
    treatments;

 -- The ability to gain reimbursement status from appropriate government
    agencies, insurers and other third-parties;

 -- The effectiveness of our sales and marketing efforts and those of
    our partners;

 -- The perception by physicians and other members of the health care community
    of the safety, efficacy and benefits of our products compared to those of
    competing products or therapies;

 -- Favorable publicity directly or indirectly relating to our products and
    technology.

            Competition among products approved for sale will be based, among
other things, upon efficacy, reliability, product safety, price and patent
position. Our competitiveness will also depend on our ability to advance our
technologies, license additional technology, maintain a proprietary position in
our technologies and products, obtain required government and other public and
private approvals on a timely basis, attract and retain key personnel and enter
into corporate partnerships that enable us and our collaborators to develop
effective products that can be manufactured cost-effectively and marketed
successfully.

            If competitors introduce new products and processes with therapeutic
or cost advantages, our products can be subject to progressive price reductions
or decreased volume of sales, or both. When we introduce new products with
patent protection, they usually must compete with other products already on the
market or products that are later developed by competitors. Manufacturers of
generic products typically invest far less in research and development than
research-based pharmaceutical companies; accordingly, they are able to price
their products significantly lower than branded products. Therefore, when a
branded product loses its market exclusivity, it often faces intense price
competition from generic forms of the product. In many countries outside the
United States, patent protection is weak or nonexistent. In order for us to
successfully compete for business with managed care and pharmacy benefits
management organizations, we must demonstrate that our products offer not only
medical benefits but also cost advantages as compared with other forms of care.
There also is no assurance that our research and development efforts will result
in commercially successful products or that our products or processes will not
become outmoded from time to time as a result of products or processes developed
by our competitors.

                                       3
<PAGE>

Research Agreement

            On June 8, 2001, Samaritan Pharmaceuticals signed a seven-year
research collaboration with Georgetown University. The objectives of the
Georgetown University Samaritan Pharmaceuticals research collaboration are (1)
to develop "one molecule" drugs and extend clinical studies to in vivo
experiments in animal models simulating Alzheimer's disease, (2) to develop an
accurate, reliable diagnostic for nuero-degeneration (Alzheimer's), and (3) to
focus on new drug development in Oncology and Neurology with the ability to
protect the brain from neuronal damage and tumor growth.

            Under the agreement, Samaritan receives worldwide exclusive rights
to any novel therapeutic agents or diagnostic technologies that may result from
the research collaboration directed by Dr. Vassilios Papadopoulos with his team
of seven research professionals (including five Ph.D. level research scientists)
who have expertise in the fields of endocrinology, pharmacology, cell biology,
organic and steroid chemistry and computer modeling.

            Dr. Papadopoulos is the Head of the Division of Hormone Research and
a Professor at the Department of Cell Biology, Pharmacology and Neurosciences at
Georgetown University Medical Center. He has authored over 150 scientific
publications in the field of steroid hormone production and presented his work
at numerous national and international meetings.

License Agreements

            On June 18, 2001, Georgetown University granted Samaritan an
Exclusive Worldwide License to Georgetown's patent application for "Early
Detection of Alzheimer's." Georgetown's research efforts toward this patent
application accumulated over a seven-year period. The patent application,
entitled, "Neurosteroids as Markers for Alzheimer's Disease", naming inventors
Vassilios Papadopoulos, Rachel C. Brown and Caterina Cascio, is believed to
detect early damage resulting from Alzheimer's. Their findings, that brain
levels of DHEA, are increased in Alzheimer's pathology; have significant
relevance, given the fact that many companies are currently advocating
increasing DHEA with supplements as a means to prevent the development of
Alzheimer's disease and, therefore, may put prospective Alzheimer's patients at
risk.

                                       4
<PAGE>

            On July 25, 2001, Georgetown University granted Samaritan an
Exclusive Worldwide License to Georgetown's patent application for a breast
cancer diagnostic test that can be used as a tool to improve the detection,
diagnosis, prognosis, prevention and possibly the treatment of breast cancer.
The patent application, entitled, "Peripheral-type Benzodiazepine Receptor: A
Tool for Detection, Diagnosis, Prognosis, and Treatment of Human Breast Cancer,"
naming as inventors, Vassilios Papadopoulos and Martine Culty, identifies a
protein named Peripheral-type Benzodiazepine receptor (PBR) to be responsible
for part of the changes in cellular and molecular functions in the development
and progression of breast cancer. Although today there are methods for the
detection of breast tumors, such as a mammogram, little is known about the early
prognosis of a tumor to metastasize. Georgetown's scientists have identified a
correlation between high levels of PBR and the aggressiveness of a tumor.
Biopsies, considered to be safe procedures, would be used for PBR measurements
and if the levels are high, scientists believe it could serve as a marker for
the aggressiveness of a tumor with early detection, diagnosis and prognosis.
Georgetown's research efforts toward this patent application have accumulated
over an 8-year period and, in addition, Samaritan plans to explore research
seeking possible prevention technology and drugs to inhibit, block or arrest the
production of this protein PBR identified as a marker for breast cancer.

            On September 11, 2001, Georgetown University granted Samaritan an
Exclusive Worldwide License to Georgetown's patent application for "Cholesterol
Recognition Amino Acid Sequence." The invention has identified a "cholesterol
fingerprint" present in proteins known to interact with and bind cholesterol.
This chemically synthesized peptide, containing the "cholesterol fingerprint"
amino acid sequence, binds cholesterol and could be used as a drug to remove
cholesterol from other proteins, cells and tissues.

            On December 13, 2001, Georgetown University granted Samaritan an
Exclusive Worldwide License to Georgetown's patent application for
"Peripheral-type Benzodiazepine Receptor Associated Proteins: cloning,
expression and methods of use", naming as inventors, Vassilios Papadopoulos and
Hua Li, identifies proteins that are associated and regulate the function of the
Peripheral-Type Benzodiazepine Receptor in health and disease. The role of this
receptor is in cholesterol compartmentalization, steroid formation, cell death,
tumor growth and metastasis, Alzheimer's disease pathology, as well as in other
brain pathologies. It is hoped the discovery of these proteins, might provide
new tools to use for understanding the cause of diseases and develop new methods
of treatment.

                                       5
<PAGE>

Government Regulation

            Governmental authorities in the United States and other countries
extensively regulate the preclinical and clinical testing, manufacturing,
labeling, storage, record-keeping, advertising, promotion, export, marketing and
distribution, among other things, of our therapeutics products.

            In the United States, the FDA under the Federal Food, Drug and
Cosmetic Act, the Public Health Service Act and other federal statutes and
regulations subjects pharmaceutical products to rigorous review. If we do not
comply with applicable requirements, we may be fined, our products may be
recalled or seized, our production may be totally or partially suspended, the
government may refuse to approve our marketing applications or allow us to
distribute our products, and we may be criminally prosecuted. The FDA also has
the authority to revoke previously granted marketing authorizations. In order to
obtain approval of a new product from the FDA, we must, among other
requirements, submit proof of safety and efficacy as well as detailed
information on the manufacture and composition of the product. In most cases,
this proof entails extensive laboratory tests, and preclinical and clinical
trials. This testing, the preparation of necessary applications and processing
of those applications by the FDA are expensive and typically take several years
to complete. The FDA may not act quickly or favorably in reviewing these
applications, and we may encounter significant difficulties or costs in our
efforts to obtain FDA approvals that could delay or preclude us from marketing
any products we may develop. The FDA may also require post-marketing testing and
surveillance to monitor the effects of approved products or place conditions on
any approvals that could restrict the commercial applications of these products.
Regulatory authorities may withdraw product approvals if we fail to comply with
regulatory standards or if we encounter problems following initial marketing.
With respect to patented products or technologies, delays imposed by the
governmental approval process may materially reduce the period during which we
will have the exclusive right to exploit the products or technologies.

            After an IND becomes effective, a sponsor may commence human
clinical trials. The sponsor typically conducts human clinical trials in three
sequential phases, but the phases may overlap. In Phase I clinical trials, the
product is tested in a small number of patients or healthy volunteers, primarily
for safety at one or more doses. In Phase II, the sponsor continues to evaluate
safety, but primarily evaluates the efficacy of the product in a patient
population. Phase III clinical trials typically involve additional testing for
safety and clinical efficacy in an expanded population at geographically
dispersed test sites. The sponsor must submit to the FDA a clinical plan, or
"protocol," accompanied by the approval of the institution participating in the
trials, prior to commencement of each clinical trial. The FDA may order the
temporary or permanent discontinuation of a clinical trial at any time.

            The sponsor must submit to the FDA the results of the preclinical
and clinical trials, together with, among other things, detailed information on
the manufacture and composition of the product, in the form of a new drug
application or, in the case of a biologic, a biologics license application. In a
process which generally takes several years, the FDA reviews this application
and, when and if it decides that adequate data is available to show that the new
compound is both safe and effective and that other applicable requirements have
been met, approves the drug or biologic for marketing.

            The amount of time taken for this approval process is a function of
a number of variables, including the quality of the submission and studies
presented, the potential contribution that the compound will make in improving
the treatment of the disease in question, and the workload at the FDA. It is
possible that our products will not successfully proceed through this approval
process or that the FDA will not approve them in any specific period of time, or
at all.

                                       6
<PAGE>

            Congress enacted the Food and Drug Administration Modernization Act
of 1997, in part, to ensure the availability of safe and effective drugs,
biologics and medical devices by expediting the FDA review process for new
products.

            The Modernization Act establishes a statutory program for the
approval of fast track products, including biologics. A fast track product is
defined as a new drug or biologic intended for the treatment of a serious or
life-threatening condition that demonstrates the potential to address unmet
medical needs for this condition. Under the fast track program, the sponsor of a
new drug or biologic may request the FDA to designate the drug or biologic as a
fast track product at anytime during the clinical development of the product.
The Modernization Act specifies that the FDA must determine if the product
qualifies for fast track designation within 60 days of receipt of the sponsor's
request. The FDA can base approval of a marketing application for a fast track
product on an effect, on a clinical endpoint or on another endpoint that is
reasonably likely to predict clinical benefit. The FDA may subject approval of
an application for a fast track product to post-approval studies to validate the
surrogate endpoint or confirm the effect on the clinical endpoint and prior
review of all promotional materials. In addition, the FDA may withdraw its
approval of a fast track product on a number of grounds, including the sponsor's
failure to conduct any required post-approval study with due diligence. If a
preliminary review of clinical data suggests that a fast track product may be
effective, the FDA may initiate review of sections of a marketing application
for a fast track product before the sponsor completes the application. This
rolling review is available if the applicant provides a schedule for submission
of remaining information and pays applicable user fees. However, the time
periods specified under the Prescription Drug User Fee Act concerning timing
goals to which the FDA has committed in reviewing an application do not begin
until the sponsor submits the entire application. We may request fast track
designation for our HIV drug and other products.

            We cannot predict whether the FDA will grant these designations, nor
can we predict the ultimate impact, if any, of the fast track process on the
timing or likelihood of FDA approval of our therapeutics. The FDA may, during
its review of a new drug application or biologics license application, ask for
additional test data. If the FDA does ultimately approve the product, it may
require post-marketing testing, including potentially expensive Phase IV
studies, and surveillance to monitor the safety and effectiveness of the drug.
In addition, the FDA may in some circumstances impose restrictions on the use of
the drug, which may be difficult and expensive to administer, and may require
prior approval of promotional materials.

            Before approving a new drug application or biologics license
application, the FDA will also inspect the facilities at which the product is
manufactured and will not approve the product unless the manufacturing
facilities are in compliance with current Good Manufacturing Practices
("cGMPs"). In addition, the manufacture, holding, and distribution of a product
must be in compliance with cGMPs. Manufacturers must continue to expend time,
money and effort in the areas of production, quality control, record keeping and
reporting to ensure full compliance with those requirements. The labeling,
advertising, promotion, marketing and distribution of a drug or biologic product
must be in compliance with FDA regulatory requirements. Failure to comply with
applicable requirements can lead to the FDA demanding that production and
shipment cease, and, in some cases, that the manufacturer recall products, or to
FDA enforcement actions that can include seizures, injunctions and criminal
prosecution. These failures can also lead to FDA withdrawal of approval to
market the product.

                                       7
<PAGE>

            We have not received approval in the U.S. or any foreign states or
foreign jurisdictions for the commercial sale of any of our potential
therapeutics products. However, the FDA has accepted our IND for the clinical
examination of our HIV drug. Completion of testing, studies and trials may take
several years, and the length of time varies substantially with the type,
complexity, novelty and intended use of the product. There can be no assurance
that any of our development programs will be successfully completed, that any
IND will become effective or that additional clinical trials will be allowed by
the FDA or other regulatory authorities or that we will successfully develop any
marketable pharmaceutical product.

            Sales of pharmaceutical products outside the United States are
subject to foreign regulatory requirements that vary widely from country to
country. Whether or not we have obtained FDA approval, we must obtain approval
of a product by comparable regulatory authorities of foreign countries prior to
the commencement of marketing the product in those countries. The time required
to obtain this approval may be longer or shorter than that required for FDA
approval. The foreign regulatory approval process includes all the risks
associated with FDA regulation set forth above, as well as country specific
regulations.

Environmental Matters

            We currently rely primarily on third party independent contractors
and the research efforts of Georgetown University, AIDS Research Alliance and
the University of Iowa to conduct research and development on and manufacture
clinical supplies of our proposed drugs. However, to the extent that any of our
current and future research and development activities involve the use of
hazardous materials and chemicals, or produce waste products, we will be subject
to federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of these materials. Although we would expect that
our safety procedures for handling and disposing of these materials would comply
with the standards prescribed by such laws and regulations, we may be required
to incur significant costs to comply with environmental and health and safety
regulations in the future. In addition, the risk of accidental contamination or
injury from hazardous and radioactive materials cannot be completely eliminated.
The potential liability for damages stemming from accidents involving these
materials may exceed our insurance coverage or available resources.

Product and Clinical Studies Liability

            Administration of any drug to humans involves the risk of allergic
or other adverse reactions in certain individuals. Accordingly, it is possible
that claims might be successfully asserted against us for liability with respect
to injuries that may arise from the administration or use of our products during
clinical trials or following commercialization. We presently carry what we
believe is adequate clinical studies and product liability insurance.

Employees

            As of December 31, 2002, we had 5 employees that work directly for
Samaritan Pharmaceuticals and 7 scientists that work under our collaboration
agreement with Georgetown University. In addition, we make extensive use of
consultants.
                                       8
<PAGE>

RISK FACTORS

            Should any of the following risks occur, in addition to risks and
uncertainties not presently known to us, our business, the price of our stock,
our financial condition, and the results of our operations could be materially
impacted, and you could lose all or part of your investment in our common stock.
Additional risks not listed below, known or unknown, may also affect the value
of our shares.

1.       Risks Related To Our Financial Condition

            We are a development stage company with a history of operating
losses; we expect to continue to incur losses and we may never be profitable. We
are still in our development stage. We have been unprofitable since our
inception and have incurred significant losses. These losses have resulted
principally from costs incurred in our research and development programs and
from our general and administrative costs. We have derived no significant
revenues from product sales or royalties. We do not expect to achieve
significant product sales or royalty revenue in the near future and are not able
to predict when we might do so. Furthermore we may never do so. We expect to
continue to incur substantial additional operating losses in the future. These
losses may increase significantly as we expand development and clinical trial
efforts although we prioritize our capital to technologies closest to
commercialization.

            The clinical development of a therapeutic product is a very
expensive and lengthy process and may be expected to utilize $5 to $20 million
over a three to six year development cycle. We currently do not have available
the financial resources to complete the clinical development of any of our
therapeutic products without a strategic partner, and we are in need of and are
seeking to raise additional capital. Accordingly, we cannot assure you that any
of our product development efforts will be successfully completed, that any of
our products will be proven to be safe and effective, that regulatory approvals
will be obtained at all or be as broad as sought, that our products will be
capable of being produced in commercial quantities or that any of our products,
if introduced, will achieve market acceptance or generate significant revenues.

            Although we believe we could license the manufacturing and marketing
rights to our products in return for up-front licensing and other fees and
royalties on any sales, there can be no assurance that we will be able to do so
in the event we seek to do so. Accordingly, we expect our substantial losses to
continue as we develop our portfolio and, even if one or more of our products
under development should be commercialized, there can be no assurance that we
can ever generate significant revenues to achieve or sustain profitability.

            We need to obtain additional funds to develop our therapeutics
products and our future access to capital is uncertain. The allocation of
limited resources is an ongoing issue for us as we move from research activities
into the more costly clinical investigations required to bring therapeutic
products to market.
                                       9
<PAGE>

            Even though we believe that our cash on hand and our financing
     commitment  with Fusion  Capital should be sufficient to meet our projected
operating  and capital  requirements,  we might require  substantial  additional
funds.  The amount of which will  depend,  among  other  things,  on the rate of
progress  and the cost of our  research  and product  development  programs  and
clinical  trial  activities,  the  cost  of  preparing,   filing,   prosecuting,
maintaining and enforcing patent claims and other intellectual  property rights,
and the cost of  developing  manufacturing  and  marketing  capabilities,  if we
decide  to  undertake  those  activities.  We do not  have  any  commitments  or
arrangements  to obtain  any such funds and there can be no  assurance  that any
additional  funds,  whether  through  exercise  of  the  Warrants  and  Options,
additional  sales of  securities or  collaborative  or other  arrangements  with
corporate  partners or from other  sources,  will be  available to us upon terms
acceptable to us or at all. If we are unable to obtain  additional  financing we
might be required to delay,  scale back or eliminate certain of our research and
product development programs or clinical trials, or be required to license third
parties  to  commercialize  products  or  technologies  that we would  otherwise
undertake  ourselves,  or cease certain  operations  all together,  any of which
might have a material adverse effect upon us.

            If we raise additional funds by issuing equity securities, dilution
to stockholders may result, and new investors could have rights superior to
holders of shares purchased in this offering.

2.       Risks Related to our Operations

            We are subject to extensive regulation which can be costly and time
consuming and subject us to unanticipated delays; even if we obtain regulatory
approval for a product, the product may still face regulatory difficulties.

            All of our potential products and manufacturing activities are
subject to comprehensive regulation by the Food and Drug Administration (FDA) in
the United States and by comparable authorities in other countries. The process
of obtaining FDA and other required regulatory approvals, including foreign
approvals, is expensive and often takes many years and can vary substantially
based upon the type, complexity and novelty of the products involved.
Preclinical studies involve laboratory evaluation of product characteristics and
often animal studies to assess the efficacy and safety of the product. The FDA
regulates preclinical studies under a series of regulations called the current
Good Laboratory Practices regulations. If the sponsor violates these
regulations, the FDA, in some cases, may invalidate the studies and require that
the sponsor replicate them.

                                       10
<PAGE>

            Certain of our potential products may be novel, and regulatory
agencies may lack experience with them, which may lengthen the regulatory review
process, increase our development costs and delay or prevent their
commercialization. There is limited successful commercialization of products
based on technology such as ours. In addition, we have had only limited
experience in filing and pursuing applications necessary to gain regulatory
approvals, which may impede our ability to obtain timely FDA approvals, if at
all. We will not be able to commercialize any of our potential therapeutic
products until we obtain FDA approval, and so any delay in obtaining, or
inability to obtain, FDA approval would harm our business. We have not yet
sought FDA approval for any of our therapeutic product.

            If we violate regulatory requirements at any stage, whether before
or after marketing approval is obtained, we may be fined, forced to remove a
regulated product from the market and experience other adverse consequences
including delay, which could materially harm our financial results.
Additionally, we may not be able to obtain the labeling claims necessary or
desirable for the promotion of our therapeutic products. We may also be required
to undertake post-marketing trials. In addition, if we or others identify side
effects after any of our therapeutic products are on the market, or if
manufacturing problems occur, regulatory approval may be withdrawn and
reformulation, additional clinical trials, changes in labeling, and additional
marketing applications may be required.

            An investigational new drug application ("IND") must become
effective before human clinical trials may commence. The IND is automatically
effective 30 days after receipt by the FDA, unless before that time the FDA
requests an extension to review the application or raises concerns or questions
about the conduct of the trials as outlined in the application. In the latter
case, the sponsor of the application and the FDA must resolve any outstanding
concerns before clinical trials can proceed. However, the submission of an IND
may not result in the FDA authorizing us to commence clinical trials in any
given case.

            The process of developing therapeutic products requires significant
research and development, preclinical testing and clinical trials, as well as
regulatory filings and patent prosecution, all of which are extremely expensive
and time-consuming. If testing of a particular product does not yield successful
results, then we will be unable to commercialize that product.

            Some of our potential therapeutic programs are in research or
preclinical development, the results of which do not necessarily predict or
prove safety or efficacy in humans. Therefore, we must demonstrate each
product's safety and efficacy in humans through extensive clinical testing.
Although for planning purposes we project the commencement, continuation and
completion of our clinical trials, we may experience numerous unforeseen events
during, or as a result of the testing process, that could delay or prevent
commercialization of our products, including the following:

-- the results of preclinical studies may be inconclusive, or they may not be
   indicative of results that will be obtained in human clinical trials;

-- after reviewing test results, we or our collaborators may abandon projects
   that we might previously have believed to be promising;

-- we, our collaborators or regulators, may suspend or terminate clinical trials
   if the participating subjects or patients are being exposed to unacceptable
   health risks;

-- we may have to delay clinical trials as a result of scheduling conflicts with
   participating clinicians and clinical institutions, or difficulties in
   identifying and enrolling patients who meet trial eligibility criteria;

-- safety and efficacy results attained in early human clinical trials may not
   be indicative of results that are obtained in later clinical trials; and

-- the effects our potential products have may not be the desired effects or may
   include undesirable side affects or other characteristics that preclude
   regulatory approval or limit their commercial use if approved.

                                       11
<PAGE>

            Clinical testing is very expensive, can take many years and may not
be completed on schedule, and the outcome is uncertain. The data collected from
clinical trials may not be sufficient to support regulatory approval of any of
our products, and the FDA may not ultimately approve any of our therapeutic
products for commercial sale, which may adversely affect our business and
prospects. If we fail to commence or complete, or experience delays in, any of
our planned clinical trials, our stock price and our ability to conduct our
business as currently planned could be harmed.

            We are currently dependent on one source of supply for our HIV drug,
the University of Iowa, and there would be a material adverse effect on our
business and prospects if we were unable to obtain adequate supplies. University
of Iowa manufactures the material in a facility which adheres to current Good
Manufacturing Practices, or cGMP, regulations enforced by the FDA through its
facilities inspection program. If our supplier was unable to produce and provide
us with the HIV product, especially of cGMP grade, we will be forced to identify
an alternative supplier or produce the product ourselves. In the case of the
former, we currently do not have an alternative supplier capable of meeting our
needs and might experience delays in replacing our supplier. We would be
required to design, in addition, if the suppliers produce an inadequate supply,
or fail to produce or deliver the product on a timely basis; our clinical
testing may be delayed, thereby delaying the submission of products for
regulatory approval or the market introduction and subsequent sales of our
products. Any such delay may lower our revenues and potential profitability and
otherwise have a material adverse effect on us.

            In the event of dissolution of the Georgetown University
Collaboration, we cannot now determine which assets of the Collaboration we
would acquire, other than the assets we have already licensed. Aside from the
HIV technology, we are substantially dependent upon our licensed product
opportunities.

                                       12
<PAGE>

            Our potential therapeutic products are not the result of our own
internal basic research but rather arise from our ability to license
technologies from third parties. Licenses may require us to achieve certain
preclinical and clinical milestones within defined time periods. Our failure to
meet any such obligations could result in the imposition of financial penalties
or the non-exclusivity or termination of our licenses, which could have a
material adverse effect upon our business and prospects.

            We are dependent upon third parties for certain research and
development, and all clinical studies and manufacturing and marketing of our
therapeutic products, which could impair our ability to commercialize our
products. Given our limited personnel resources and experience, we are dependent
upon third parties to perform research and development related to our programs
to supervise and perform all our clinical trials, manufacture all our
pharmaceutical products for use in clinical trials and prepare and submit
applications for regulatory approval of our clinical testing and
commercialization of our products. There can be no assurance that we will be
able to obtain these services from third parties by entering into collaborative
arrangements or license agreements on commercially reasonably terms or at all or
that any or all of the contemplated benefits from such collaborative
arrangements or license agreements will be realized. Failure to obtain such
arrangements would result in delays in the development of our proposed products
or the loss of exclusivity or termination of our licenses.

            If we were required to fund such product development internally, our
future capital requirements would increase substantially, and there can be no
assurance that we could obtain additional funds to meet such increased capital
requirements on acceptable terms, or at all.

            For example, we intend to rely on third-party contract manufacturers
to produce materials needed for clinical trials and product commercialization.
Third-party manufacturers may not be able to meet our needs with respect to
timing, quantity or quality. If we are unable to contract for a sufficient
supply of needed materials at an acceptable price and other terms, or if we
should encounter delays or difficulties in our relationships with manufacturers,
our clinical testing may be delayed, thereby delaying the submission of products
for regulatory approval or the market introduction and subsequent sales of our
products. Any such delay may lower our revenues and potential profitability.

            Moreover, we and any third-party manufacturers that we may use must
continually adhere to cGMP. If our facilities or the facilities of these
manufacturers cannot pass a pre-approval plant inspection, the FDA pre-market
approval of our therapeutics will not be granted. In complying with cGMP and
foreign regulatory requirements, we and any of our third-party manufacturers
will be obligated to expend time, money and effort in production, record-keeping
and quality control to assure that our products meet applicable specifications
and other requirements. If we, or any of our third-party manufacturers, fail to
comply with these requirements, we may be subject to regulatory action, which
could disrupt our business development and delay our market entry.

                                       13
<PAGE>

            By relying on these partners and third parties we will have less
control, and may have virtually no control, over the timing, resources and other
aspects of clinical trials than if we performed them ourselves; and we may be
unable to control the amount and timing of resources which our collaborative
partners would devote to our programs or potential products. We can't assure you
that collaborators will not pursue other technologies or product candidates
either on their own or in collaboration with others. Should a collaborative
partner fail to develop or commercialize successfully any product candidate to
which it has rights, our business and stock price may be materially and
adversely affected.

            Collaborative arrangements or license agreements may also require us
to expend funds and to meet certain milestones, and there can be no assurance
that we will be successful in doing so.

            In addition, we can't assure you that disputes will not arise in the
future with respect to the ownership of rights to any technology developed with
or by third parties. These and other possible disagreements with collaborators
could lead to delays in the collaborative research, development or
commercialization of certain product candidates or could require or result in
litigation or arbitration, which would be time consuming and expensive, and
would have a material adverse effect upon our business, financial condition and
results of operations.

            In addition, we have limited experience with sales, marketing or
distribution. We may choose to utilize one or more pharmaceutical companies with
established distribution systems and direct sales forces to market our products.
In the event we choose to utilize such a distribution network and are unable to
reach an agreement with one or more pharmaceutical companies to market our
products, we may be required to market our products directly and to develop a
marketing and sales force with technical expertise and with supporting
distribution capability. There can be no assurance that we will be able to
establish, or have the financial and managerial resources to establish, in-house
sales and distribution capabilities or relationships with third parties, or that
we will be successful in commercializing any of our potential products. To the
extent that we enter into co-promotion or other licensing arrangements, any
revenues we receive will depend upon the efforts of third parties and we can't
assure you that these efforts will be successful.

            Technology with respect to therapeutics and other biopharmaceutical
fields is rapidly evolving, and there can be no assurance of our ability to
respond adequately. We are engaged in biopharmaceutical fields characterized by
extensive research efforts, rapidly evolving technology and intense competition
from numerous organizations, including pharmaceutical companies, biotechnology
firms, academic institutions and others. New developments are expected to
continue at a rapid pace in both industry and academia. We cannot assure you
that research and discoveries by others will not render any of our potential
products obsolete, uneconomical or otherwise unmarketable or unprofitable.

            In order to compete successfully, we will need to complete the
development of and obtain regulatory approval of one or more of our products
that keep pace with technological developments on a timely basis. Any failure by
us to anticipate or respond adequately to technological developments will have a
material adverse effect upon our prospects and financial condition.

                                       14
<PAGE>

            We may not be able to adequately protect our proprietary rights. Our
success will depend in significant part on our ability to obtain and maintain
elements of business protection practices, including but not limited to U.S.
patent protection for our licensed technologies, preservation and defense of our
trade secrets and proprietary rights, and operations that do not infringe upon
the proprietary rights of third parties. Because of the length of time and
expense associated with bringing new products through development and regulatory
approval to the marketplace, the pharmaceutical industry has traditionally
placed considerable importance on obtaining patent and trade secret protection
for significant new technologies, products and processes. We can't assure you
that patents will be issued from the patent applications we own, or have
licensed or that the patent issued to us will provide us with significant
protection against competitive applications or otherwise be commercially
valuable. In addition, patent law relating to certain of our fields of interest,
particularly as to the scope of claims in issued patents, is still evolving.
Patent positions may not be as strong as in other more well-established fields,
and it is unclear how this uncertainty will affect our patent rights.

            Litigation, which could be costly and time consuming, may be
necessary to enforce any patents issued in the future to us or our licensors or
to determine the scope and validity of the proprietary rights of third parties.
The issuance of a patent is not conclusive as to its validity or enforceability
and it is uncertain how much protection, if any, will be given to our patents if
we attempt to enforce them and they are challenged in court or in other
proceedings, such as oppositions, which may be brought in foreign jurisdictions
to challenge the validity of a patent. A third party may challenge the validity
or enforceability of a patent after its issuance by the U.S. Patent and
Trademark Office. It is possible that a competitor may successfully challenge
our patents or that a challenge will result in limiting their coverage.
Moreover, the cost of litigation to uphold the validity of patents and to
prevent infringement can be substantial. If the outcome of litigation is adverse
to us, third parties may be able to use our patented invention without payment
to us. Moreover, it is possible that competitors may infringe our patents or
successfully avoid them through design innovation. To stop these activities we
may need to file a lawsuit. These lawsuits are expensive and would consume time
and other resources, even if we were successful in stopping the violation of our
patent rights. In addition, there is a risk that a court would decide that our
patents are not valid and that we do not have the right to stop the other party
from using the inventions. There is also the risk that, even if the validity of
our patents were upheld, a court would refuse to stop the other party on the
ground that its activities are not covered by, that is, do not infringe, our
patents.

            Our competitive position is also dependent upon unpatented
technology and trade secrets which may be difficult to protect. We can't assure
you that others will not independently develop substantially equivalent
proprietary information and techniques which would legally circumvent our
intellectual property rights, that our trade secrets will not be disclosed or
that we can effectively protect our rights to unpatented trade secrets.

                                       15
<PAGE>

            As the biotechnology industry expands and more patents are issued,
the risk increases that our potential products may give rise to claims that they
infringe upon the patents of others. Any such infringement litigation would be
costly and time consuming to us.

            Currently, we have not registered all of our potential trademarks
and there can be no assurance that we will be able to obtain registration for
such trademarks.

            The use of our technologies could potentially conflict with the
rights of others. Our competitors, or others, may have or acquire patent rights
that they could enforce against us. If they do so, then we may be required to
alter our products, pay licensing fees or cease activities in that area. If our
products conflict with patent rights of others, third parties could bring legal
actions against us or our collaborators, licensees, suppliers or customers,
claiming damages and seeking to enjoin manufacturing and marketing of the
affected products. If these legal actions are successful, in addition to any
potential liability for damages we could be required to obtain a license in
order to continue to manufacture or market the affected products. We may not
prevail in any legal action and a required license under the patent may not be
available on acceptable terms or at all.

            We may suffer material adverse consequences as a result of
litigation or other proceedings relating to patent and other intellectual
property rights. The cost to us of any litigation or other proceeding relating
to intellectual property rights, even if resolved in our favor, could be
substantial. Some of our competitors may be better able to sustain the costs of
complex patent litigation because they have substantially greater resources. If
there is litigation against us, we may not be able to continue our operations.

            Should third parties file patent applications, or be issued patents
claiming technology also claimed by us in pending applications, we may be
required to participate in interference proceedings in the U.S. Patent and
Trademark Office to determine priority of invention. We also may be required to
participate in interference proceedings involving our issued patents and pending
applications. As a result of an unfavorable outcome in an interference
proceeding, we may be required to cease using the technology or to license
rights from prevailing third parties, who may not offer us a license on
commercially acceptable terms.

            We are exposed to potential liability claims, and our insurance
against these claims may not be sufficient to protect us. Our business exposes
us to potential clinical trial and product liability risks, which are inherent
in the testing, manufacturing, marketing and sale of pharmaceutical products.
Although we have clinical trial and product liability insurance, there can be no
assurance that the coverage it provides will be adequate to satisfy all claims
that may arise. Regardless of merit or eventual outcome, such claims may result
in decreased demand for a product, injury to our reputation, withdrawal of
clinical trial volunteers and loss of revenues. Thus, even though we are
insured, a product liability claim or product recall may result in losses that
could be material.

                                       16
<PAGE>

            Competition in our industry is intense and many of our competitors
have substantially greater managerial resources than we have. Competition in our
fields of research is intense and is accentuated by the rapid pace of
technological development. Many of our competitors have substantially greater
research and development capabilities and manufacturing, marketing, financial
and managerial resources than we do. Research and discoveries by others may
result in breakthroughs which may render our products obsolete even before they
generate any revenue. There are products currently under development by others
that could compete with the products that we are developing. Competitors also
may succeed in developing and marketing products that are more effective than or
marketed before our products. Our competitors may develop safer or more
effective therapeutic products, reach the market more rapidly and thereby reduce
the potential sales of our products, or establish superior proprietary
positions.

            We also anticipate that we will face increased competition in the
future as new companies enter our markets and as scientific developments
continue to accelerate. If any of our products receive marketing approval, the
inability of our products to compete effectively in the marketplace will
materially and adversely affect our business operations.

            We must expand our operations to commercialize our products, which
we may not be able to do. We will need to expand and effectively manage our
operations and facilities to successfully pursue and complete future research,
development and commercialization efforts. To grow, we will need to add
personnel, including management, and expand our capabilities, which may strain
our existing managerial, operational, financial and other resources. In
addition, we will need to renew our current lease or locate different facilities
when our lease expires. To compete effectively and manage our growth, we must
train, manage and motivate a substantially larger employee base, accurately
forecast demand for our products and implement operational, financial and
management information systems. In the event that we fail to expand or manage
our growth effectively, our product development and commercialization efforts
could be curtailed or delayed. If we lose key management and scientific
personnel or cannot recruit qualified employees, our product development
programs and our research and development efforts will be harmed.

            Our success is dependent upon the continued services and performance
of Dr. Janet Greeson, our chief executive officer; president and chairman; and
Dr. Vassilios Papadopoulos, our chief scientific officer. The company does not
maintain key man insurance on either officer or the loss of their services could
delay our product development programs and our research and development efforts
at Georgetown University. In addition, the loss of Dr. Janet Greeson may result
in the loss of the Georgetown University Collaboration.

            In addition, competition for qualified employees among companies in
the biotechnology and biopharmaceutical industry is intense and we cannot assure
you that we would be able to recruit qualified personnel on acceptable terms to
replace them.

                                       17
<PAGE>

            The success of our products will depend in some part upon the
availability of health care reimbursement. Our ability to commercialize our
therapeutic products successfully will depend in part on the extent to which
reimbursement for the cost of such products and related treatments will be
available from government health administration authorities, private health
insurers and other organizations. Significant uncertainty exists as to the
reimbursement status of newly approved health care products, and we cannot
assure you that reimbursement for any technology we may market will be
available, or if available, that the payor's reimbursement policies will not
materially adversely affect our ability or the ability of any of our corporate
partners to sell these products profitably.

3.       Risks Related to our Common Stock

            We are authorized to issue additional shares of our common stock
without stockholder approval, which could have an adverse affect upon the rights
of our stockholders and the market price of our common stock. We have a
substantial number of shares of common stock un-issued and not reserved for
specific issuances, of which we could issue an amount equal to 20% of our
outstanding shares of common stock, without any action or approval by our
stockholders in accordance to Samaritan Pharmaceuticals, Inc. 2001 Stock
Incentive Plan (the "2001 Plan"), thus substantially diluting the percentage
ownership of Samaritan Pharmaceuticals held by purchasers of the securities
offered hereby and potentially adversely affecting the market price of our
common stock.

            Market volatility may affect our stock price and the value of your
investment may be subject to sudden decreases.

            The trading price for our common stock has been, and we expect it to
continue to be, volatile. The price at which our common stock trades depends
upon a number of factors, including our historical and anticipated operating
results and general market and economic conditions, which are beyond our
control. Factors such as fluctuations in our financial and operating results,
the results of preclinical and clinical trials, announcements of technological
innovations or new commercial products by us or our competitors, developments
concerning proprietary rights and publicity regarding actual or potential
performance of products under development by us or our competitors could also
cause the market price of our common stock to fluctuate substantially. In
addition, the stock market has, from time to time, experienced extreme price and
volume fluctuations. These broad market fluctuations may lower the market price
of our common stock. Moreover, during periods of stock market price volatility,
share prices of many biotechnology companies have often fluctuated in a manner
not necessarily related to their operating performance. Accordingly, our common
stock may be subject to greater price volatility than the stock market as a
whole.

                                       18
<PAGE>

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 base rent of $2,620 per month. In addition,
under the Research Collaboration agreement between Georgetown University and
Samaritan Pharmaceuticals, Georgetown provides space which is located at
Samaritan Research Laboratories, Georgetown University Medical Center, Medical
Dental Building, Suite SE 111, 3900 Reservoir Road, NW, Washington, DC 20007.

Item 3. Legal Proceedings

            We are, from time to time, involved in various legal proceedings in
the ordinary course of our business and are currently executing a settlement
agreement signed by all parties to resolve previously reported pending lawsuits.
We believe based on the settlement agreement that the resolution of any
currently pending legal proceedings, either individually or taken as a whole,
will not have a material adverse effect on our business, financial condition or
results of operations.

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

None

                                     Part II
                                  -------------

Item 5. Market for Common Equity and Related Stockholder Matters


(a)         Market Information

            The Company's Common Stock is traded on the NASDAQ
over-the-counter("OTC") Bulletin Board under the symbol "SPHC.OB" and the name
of Samaritan Pharmaceuticals, Inc.

            The following table sets forth (a) the range of high and low bid
closing quotations for our common stock on the over-the-counter market for each
quarter within the last two fiscal years. The over-the-counter quotes reflect
inter-dealer prices without retail mark-up, mark-down or commission and may not
represent actual transactions. The quotations may be rounded for presentation.

                                   Bid Prices


           Period                                   Low     High
Quarter Ended December 31, 2002                     0.15    0.24
Quarter Ended September 30, 2002                    0.15    0.30
Quarter Ended June 30, 2002                         0.13    0.20
Quarter Ended March 31, 2002                        0.14    0.30


Quarter Ended December 31, 2001                     0.11    0.15
Quarter Ended September 30, 2001                    0.14    0.27
Quarter Ended June 30, 2001                         0.20    0.40
Quarter Ended March 31, 2001                        0.44    0.75



                                       19
<PAGE>

 (b) Holders

            As of December 31, 2002 there were approximately seven hundred
fifty-two (752) 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
numerous beneficial owners.

(c) Dividends

            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.

(d) Equity Compensation Plan Information


                  Number of securities    Weighted average        Number of
                  to be issued upon       exercise price of       securities
                  exercise of             outstanding             remaining
                  outstanding options     options, warrants        for future
Name of Plan      warrants, and rights    and rights               issuance
------------      -----------------        ------------------      ----------
Equity compensation
Plans approved
By security holders    5,074,858             $0.16                  2,586,192
(1)

Equity compensation
Plans not approved
By security holders   3,094,350              $0.24                    ----
(2)

Total                 8,169,208

(1)  Samaritan  Pharmaceuticals,  Inc.  2001  Stock  Incentive  Plan filed as an
exhibit to DEF 14 A, including any amendments, on April 3, 2001 and incorporated
herein by reference

(2) Agreements  between Samaritan  Pharmaceuticals,  Inc., Doug Bessert,  Eugene
Boyle and Dr.  Janet  Greeson  filed as an  exhibit  to  10-QSB,  including  any
amendments, on August 14, 2002 and incorporated herein by reference.

Trust Agreements

            Samaritan Pharmaceuticals, Inc. has entered into trust agreements
with institutional trustees providing for the payment out of the assets of the
trusts of benefits accrued under our various benefit plans, employment
agreements and other employment arrangements as we specify from time to time. To
the extent not already irrevocable, the trusts would become irrevocable upon a
change of control of Samaritan Pharmaceuticals. We may make contributions to the
trusts from time to time, and additional funding could be required upon a change
of control. To the extent funded, the trusts are to be used, subject to their
terms and to the claims of our general creditors in specified circumstances, to
make payments under the terms of the benefit plans, employment agreements and
other employment arrangements from time to time specified by us.

                                       20
<PAGE>

(e) Recent sales of  unregistered  securities;  use of proceeds from  registered
securities

            Securities, unregistered, were sold by the Company in the fourth
quarter of 2002 under an exemption from registration. The title of these
securities was the Common Stock of the Company. They were sold for cash unless
otherwise noted in this section. They were sold in private transactions to
persons believed to be of a class of private investors acting on their own
comprised of "accredited investors" (as such term is defined in Regulation D of
the U.S. Securities and Exchange Commission or "SEC") and a limited number of
non-accredited investors. All investors, to the best knowledge of the Company,
not affiliated with the Company, purchased the shares with an apparent
investment intent. The Company relied upon, among other possible exemptions,
Section 4(2) of the Securities Act of 1933, as amended. It's reliance on said
exemption was based upon the fact that no public solicitation was used by the
Company in the offer or sale, and that the securities were legended shares,
along with a notation at the respective transfer agent, restricting the shares
from sale or transfer as is customary with reference to Rule 144 of the SEC.

Management notes that stock was issued as follows during the three months ended
December 31, 2002

No. of shares          Issued Pursuant To                    Price/valuation
-------------          ------------------                    ---------------
  612,500          Subscriptions due at December 31 2002        $ 62,500
2,000,000          Sale of common stock                         $300,000
  937,500          Sale of restricted stock                     $ 93,750

            The total offering price, during the fourth quarter as to these
shares, was $456,250, less expenses, estimated to be a total of $10,000 for
printing, legal, postage, and other expenses related to the offering. The SEC
declared effective the Company's registration statement on Form SB-2, Commission
Registration No. 333-52296, on December 20, 2000 (as amended and supplemented
from time to time, "Registration Statement").

            Under the Registration Statement, certain selling shareholders may
sell shares of Common Stock, which is the title of the class of securities
registered, acquired from the Company. The Company does not receive any proceeds
from the sale of securities being offered by the selling shareholders under the
Registration Statement. The Company registered the shares for sale to provide
the selling shareholders with freely tradable securities, but the registration
of the shares does not necessarily mean that any of the shares will be offered
or sold by the selling shareholders. However, we may receive payments under
agreements relating to the shares and may receive proceeds from the exercise of
warrants. Such proceeds are intended for use as to working capital and other
corporate purposes. The offering under the Registration Statement has not
terminated. The Registration Statement registered a total of 11,825,000 shares
for a total anticipated offering price, subject to conditions, of $20,000,000.
The amount of shares sold to the selling shareholder to date is 7,113,300 for
aggregate proceeds of $1,312,738. The Company received, under its agreements as
noted above, proceeds of $1,312,738 and incurred, in connection with the
registration, estimated expenses of $32,000 for legal, printing, and
related offering expenses, with net proceeds to the Company of approximately
$1,280,706 used primarily for working capital (again not from the sale of the
securities under the Registration Statement, but from agreements with the
selling shareholders). The payment of offering related expenses by the Company
as to direct or indirect payment to others (not officers, Directors, or persons
holding 10% or more of any class of security of the Company nor any affiliates
of the Company).

                                       21
<PAGE>

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

            We are a discovery and development stage biopharmaceutical company.
Since our inception, we have focused our resources primarily on research and
development. To date, none of our proprietary products has reached a commercial
stage and hence, we do not have, nor do we anticipate in the near future,
revenue. We will continue to have significant general and administrative
expenses, including expenses related to clinical studies, collaboration with
Georgetown University, and patent prosecution.

            We have funded our operations through a series of private placements
and through our agreement with Fusion Capital. The Company believes potential
private placements, the 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.

            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 has thus far been able to meet
its capital needs, and believes that extensive discussions and certain
agreements with various potential sources of funding may eventually reach
necessary funding agreements. The Board of Directors directed the officers to
file Form SB-2 registration statement, offer registered securities to the market
and/or as part of agreements with shareholders and others to allow them, as
selling shareholders, to sell their shares, once received, in a registered
offering, as in the case of Fusion Capital. The officers complied and the SEC
declared such registration statement effective. Given the Company has been able
to substantially meet its cash needs during the past 12 months, and management's
estimation of what may occur in the months ahead, the Company believes it will
be able to continue to find avenues to obtain capital needed for operations.

            On November 13, 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 Samaritan's technology various stages of the FDA process 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. After the U.S. Securities & Exchange Commission declared effective a
registration statement, each month Samaritan has the right to sell to Fusion
Capital $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. Samaritan also has the right to terminate the
agreement at any time without any additional cost. Other terms and conditions
apply.

                                       22
<PAGE>

Business Model

            Our business model is primarily focused on the commercialization of
our product pipeline and patent portfolio. We seek potential products, mainly
from the Georgetown-Samaritan collaboration, and then focus on the continual
development of these products. Our first development objective for a potential
drug candidate is to file for an Investigational New Drug ("IND") application,
to conduct human clinical trials, with the eventual goal of obtaining marketing
approval for each of the selected technologies.

     We currently have several technologies in our product pipeline: requesting
an End of Phase II Meeting with the FDA for HIV clinical trial with positive
data; an animal (rat) model for Alzheimer's disease; Novel Neuroprotective
compounds; a Peptide to bind cholesterol; an Alzheimer's and Breast Cancer
Diagnostic/Theranostic; and a series of novel compounds.

Business Value

            What separates Samaritan and the promise of Samaritan is predicated
on generating the best value through the development of true medical advances
based on the insights, intuition and creativity of its scientists at Samaritan
Research Laboratories, Georgetown University Medical Center.

            Samaritan believes its collaboration fosters scientific creativity
and will advance drug leads more rapidly, thereby, decreasing the average travel
time from lab to patients. Currently, the average drug discovery and preclinical
testing time is six and a half years, with Phase I being one and a half years
and Phase II averaging two years. Samaritan believes it can drastically reduce
the average time to commercialization and produce attractive later-stage
licensing opportunities.

            Samaritan plans to license its drug candidate's late stage, after
the technology is validated with "proof of concept" science, thereby capturing
the greater portion of the potential value of its drug candidates. The closer
the technology is to "proof of concept" FDA Phase I and II, corporate marketing
and/or development partnerships are sought, in a manner that strategically fits
with the Company's overall goal of building shareholder value. In certain
disease categories, Samaritan may process its drug candidates through all human
clinical trials.

                                       23
<PAGE>

Summary of Research and Development

            We have a series of therapeutic projects either in "discovery
research", "preclinical trials", "product development" or "clinical
development"; and we utilize these formal stages of product progression to track
progress, performance, competition, and cost for each project. Our programs
primarily are aimed at satisfying defined medical needs in the areas of
Alzheimer's, cancer, infectious diseases, neurology and tissue engineering, and
are based on an intellectual property position that, we believe, is both broad
and strong. Several of our development programs involve ex vivo technologies in
which patients' tissues are manipulated outside the body and, as such, may be
less costly to investigate and quicker to develop than in vivo agents. We expect
to apply for and receive regulatory approval from the U.S. FDA to use certain of
our technologies to initiate human trials that may commence in the future.

            During the fiscal year ended December 31, 2002, we concentrated the
majority of our efforts on Samaritan Research Laboratories, our collaboration
with Georgetown University. We have the benefit of a strong portfolio of
opportunities, each of which must compete for resources and priority status. A
key currency in the biotechnology and pharmaceutical market is patents and
strong intellectual property. A central activity for us has been, and continues
to be, the acquisition, development and maintenance of intellectual property
positions directly in support of defined product development opportunities. We
continue to expend significant funds and efforts on licenses and patent
protection. In addition, we are continually examining our intellectual property
positions in relation to competitive activities and our ability to operate and
defend our positions in relation to products. We believe that this is a key
value element for our development.

            We are seeking additional equity funding. If additional funds are
raised through the issuance of equity or convertible debt securities, the
percentage ownership of our stockholders will be reduced and our stockholders
may experience dilution of their interest in us.

            Samaritan Pharmaceuticals will continue to seek additional,
non-dilutive funding from grants and other similar sources. Although to date,
Samaritan Pharmaceuticals has not been granted any monies from such funding
sources. As a small, newcomer to the biotech industry and as part of the several
hundred companies that constitute the public biotech industry, we are not well
known. We have initiated efforts to improve the awareness and understanding of
our company. We believe, despite the external market conditions, we will be able
to successfully accomplish this goal in the long run.

                                       24
<PAGE>

Highlights of the main products or technologies closest to out-licensing or
commercialization:

(1)      An HIV Drug with promising Phase II results.
         --------------------------------------------
           Early data suggest no serious side effects and (CD4) immune system
improvement. The analysis of data is presently being prepared for FDA
submission.

(2)      A Pharmacological (rat) model for Alzheimer's disease.
         ------------------------------------------------------
           Four weeks treatment of a rat results in its loss of memory and
Alzheimer's disease-like brain pathology. This model is ideal for pharmaceutical
companies and scientists to screen their Alzheimer's drugs for prevention,
stabilization of the disease and cures for Alzheimer's disease.

(3)      Alzheimer's disease compounds.
         -------------------------------
           Compounds offer protection against beta-amyloid neurotoxicity, a
condition associated with Alzheimer's disease.

(4)      A Peptide therapeutic that binds cholesterol.
         ------------------------------------------------

           Peptide can be used to clean the blood of excessive cholesterol in
acute high cholesterol conditions.

(5)      An Alzheimer's Diagnostic kit.
         -----------------------------
            A simple blood test that identifies specific circulating brain
steroids that have been oxidized in the brains of Alzheimer's patients.

(6)      A Breast Cancer Theranostic kit.
         ---------------------------------
            A biopsy test that predicts the aggressiveness of a breast cancer
tumor which allows a physician, in a timely manner, to recommend the best and
possibly the least invasive treatment for a patient.


A.  Drug Candidates

Drug                  Synthesis &  Biological  Toxicity  Mechanism
Candidates Indication  Purification Testing     Testing   of Action  Metabolism
--------------------------------------------------------------------------------
SP-10       HIV,         xxxx         xxxx       xxxx     xxxx          In
            Alzheimer's                                               Progress
            Cortisol
            Disease
--------------------------------------------------------------------------------
SP-02       HIV          xxxx         xxxx       xxxx
to          Alzheimer's
SP-25
--------------------------------------------------------------------------------
SP-26       HIV          xxxx         In
to          Alzheimer's               Progress
SP-50
--------------------------------------------------------------------------------
SP-222      Alzheimer's, xxxx         xxxx       xxxx     xxxx          In
                                                                      Progress

--------------------------------------------------------------------------------
SP-222b     Stem Cell    xxxx         xxxx       xxxx     xxxx          In
            Therapy                                                   Progress
--------------------------------------------------------------------------------
SP-222c     Cancer       xxxx         xxxx       xxxx     xxxx          In
                                                                      Progress
--------------------------------------------------------------------------------
SP-223      Alzheimer's, xxxx         xxxx       xxxx     xxxx          In
                                                                      Progress
--------------------------------------------------------------------------------
SP-234      Alzheimer's  xxxx                                           In
To                                                                    Progress
SP-250
--------------------------------------------------------------------------------
SP-1000     Cholesterol  xxxx        xxxx
            Reducer
--------------------------------------------------------------------------------
SP-5000     Cancer       xxxx                                           In
            Diagnosis,                                                Progress
            Treatment

                                       25
<PAGE>

HIV Drug

            On March 7, 2003, Samaritan Pharmaceuticals Inc. and Samaritan
Research Labs, Georgetown University, announced that its HIV Phase Ib/IIa
clinical trail data and analysis, conducted at, and led by Dr. Steven J. Brown,
of the AIDS Research Alliance, Los Angeles, CA, has been provided to Samaritan.

            These clinical trial results will be submitted for publication to
several medical journals. To prevent denial of publication for reasons of
"pre-publication," and to preserve Samaritan's rights under our patent
applications, the results will be kept confidential, pending publication.

            Phase II is a dose finding and "proof of concept" study conducted in
a relatively small number of carefully selected HIV patients, plus a
placebo-controlled group. In the Clinical trial, patients received several doses
of the test drug (dose finding) and the resulting data allowed researchers and
statisticians to make a quantitative assessment of drug effects. Samaritan
believes our HIV drug has future potential and is developing its strategy for
further development in Phase III. In evaluating the company's statements about
Samaritan's HIV drug, you should specifically consider various factors,
including the risks outlined in "Risk Factors."

B. Animal Testing Models for Alzheimer's

            Samaritan is conducting research and development of animal models
for Acute Alzheimer' and Chronic Alzheimer's. We are currently doing in-vitro
validation and in-vivo testing with animal models. The models, if successful,
will allow efficacy testing for new therapies.

C. Diagnostics/Theranostics

            One of the major problems with the diagnosis and treatment of
diseases is the inability of clinicians to determine the onset of disease,
thereby enhancing a doctor's ability to prescribe therapy. Samaritan is
conducting research and development of diagnostic kits whereby the onset of
diseases can be detected. Our diagnostics also requires FDA approval before we
can market them to the public. We are applying to the FDA for IDE's in the near
future. The following is a chart of our progress to date.

Test                   In Vitro       Human Testing     Human Testing
                       Testing     (Small Test Group) (Large Sample Size)
--------------------   --------     ----------------   ------------------
Breast Cancer          Completed      Completed          Completed
(BC Agress-Analysis)

Alzheimer's
(AD Predict-Analysis)  Completed      Completed          In Progress

Alzheimer's            In Progress
Generation II

Alzheimer's            In Progress   In Progress
Generation III

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

                                       26
<PAGE>

FORWARD-LOOKING STATEMENTS

This report and other oral and written statements made by us to the public
contain forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon management's current expectations that are subject to
a number of factors and uncertainties that could cause actual results to differ
materially from those described in our forward-looking statements. Such
statements address the following subjects: our need for and ability to obtain
additional capital, including from the sale of equity and/or from federal or
other grant sources; our expected future losses; the sufficiency of cash and
cash equivalents; our ability to generate revenues; our ability to develop
commercially successful products, including our ability to obtain FDA approval
to initiate further studies of our potential products and our technologies; the
high cost and uncertainty of the research and development of pharmaceutical
products; the unpredictability of the duration and results of the U.S. Food and
Drug Administration's review of new drug applications; the possible impairment
of our existing, and the inability to obtain new, intellectual property rights
and the cost of protecting such rights as well as the cost of obtaining rights
from third parties when needed on acceptable terms; our ability to enter into
successful partnering relationships with respect to the development and/or
commercialization of our product candidates; our dependence on third parties to
research, develop, manufacture and commercialize and sell any products
developed; our ability to improve awareness and understanding of our company,
our technology and our business objectives; whether our predictions about market
size and market acceptability of our products will prove true; and our
understandings and predictions regarding the utility of our potential products
and our technology.

Statements in this report expressing our expectations and beliefs regarding our
future results or performance are forward-looking statements that involve a
number of substantial risks and uncertainties. When used in this Form 10-KSB,
the words "anticipate," "believe," "estimate," "expect," "intend," may be,"
"seek," "plan," "focus," and "potential" and similar expressions as they relate
to the Company or its management are intended to identify such forward-looking
statements. Our actual future results may differ significantly from those stated
in any forward-looking statements.

As a result of the foregoing and other factors, we may experience material
fluctuations in future operating results on a quarterly or annual basis which
could materially and adversely affect our business, financial condition,
operating results and stock price. We are not under any duty to update any of
the forward-looking statements in this report to conform these statements to
actual results, unless required by law. For further information, refer to the
more specific risks and uncertainties discussed above and throughout this
report.

                                       27
<PAGE>

Item 7. Financial Statements

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


                         SAMARITAN PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        - -----------------------------


                                      INDEX
                                                                    Page Number
                                                                    -----------
INDEPENDENT AUDITORS' REPORT                                            F-2

CONSOLIDATED FINANCIAL STATEMENTS:

       Balance Sheet                                                    F-3

       Statements of Operations                                         F-4

       Statements of Shareholders' Deficit                            F-5-F-6

       Statements of Cash Flows                                         F-7

       Notes to Financial Statements                                 F-8 - F-15



                                       28

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholders
Samaritan Pharmaceuticals, Inc.

         We have audited the accompanying consolidated balance sheet of
Samaritan Pharmaceuticals, Inc. (a development stage company) as of December 31,
2002 and the related consolidated statements of operations, shareholders'
deficit and cash flows for the years ended December 31, 2002 and 2001. 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 auditing standards generally
accepted in the United States of America. 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 Samaritan Pharmaceuticals, Inc.
(a development stage company) as of December 31, 2002 and the consolidated
results of its operations and its cash flows for the years ended December 31,
2002 and 2001 in conformity with accounting principles generally accepted in the
United States of America.

         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, 2003. 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/ Sherb & Co., LLP
                                                            Sherb & Co., LLP
                                                    Certified Public Accountants

New York, New York
April 9, 2003
                                       F-2

<PAGE>



                         SAMARITAN PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

                               December 31, 2002

                                     ASSETS

CURRENT ASSETS:
       Cash                                                  $          357,826
       Prepaid expenses                                                   3,000
                                                             -------------------
            TOTAL CURRENT ASSETS                                        360,826
                                                             -------------------
PROPERTY AND EQUIPMENT                                                   35,205
                                                             -------------------
OTHER ASSETS:
       Patent registration costs                                        197,366
       Purchased technology rights                                       52,671
       Deposits                                                          15,720
                                                             -------------------
            TOTAL OTHER ASSETS                                          265,757
                                                             -------------------
                                                             $          661,788
                                                             ===================

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
       Accounts payable                                      $          465,313
       Accrued expenses                                                 724,675
       Short-term borrowings                                            156,955
                                                             -------------------
            TOTAL CURRENT LIABILITIES                                 1,346,943
                                                             -------------------
DEFERRED REVENUE                                                        250,000
                                                             -------------------

SHAREHOLDERS'  DEFICIT:
       Common stock, 100,000,000 shares authorized at $.001
            par value, 64,549,908 issued and outstanding                 64,550
       Additional paid-in capital                                    16,794,240
       Accumulated deficit during development stage                 (17,793,945)
                                                             -------------------
            TOTAL SHAREHOLDERS' DEFICIT                                (935,155)
                                                             -------------------
                                                             $          661,788
                                                             ===================






        See accompanying notes to the consolidated financial statements.



                                       F-3

<PAGE>

                         SAMARITAN PHARMACEUTICALS, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

       FROM INCEPTION (SEPTEMBER 5, 1994), AND FOR THE FOR THE NINE MONTHS
               AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001




<TABLE>
<CAPTION>


                                            From
                                          Inception
                                     (September 5, 1994)           December 31,
                                     December 31, 2002           2002           2001
                                     -------------------    ------------   ------------
<S>                               <C>                     <C>            <C>
REVENUES:                         $             50,000    $           -   $          -
                                     -------------------    ------------   ------------
EXPENSES:

Research and development                     3,901,341        1,097,248      1,068,902
Interest, net                                   43,672           20,307          9,420
General and administrative                  12,939,872        2,419,215      2,623,148
Depreciation and amortization                1,096,840          520,383        516,116
Forgiveness of debt                           (137,780)               -       (137,780)
                                      ------------------    ------------   ------------
                                            17,843,945        4,057,153      4,079,806
                                      -------------------    ------------   ------------
NET LOSS                          $        (17,793,945)   $  (4,057,153)  $ (4,079,806)
                                      ===================    ============   ============

Loss per share, basic & diluted:  $              (1.09)   $       (0.08) $       (0.17)
                                      ===================    ============   ============
Weighted average number of
  shares outstanding:

  Basic and diluted                         16,324,613       50,788,659     24,467,817
                                      ===================    ============   ============
</TABLE>


        See accompanying notes to the consolidated financial statements.

                                       F-4

<PAGE>

                        SAMARITAN PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT

             FROM INCEPTION (SEPTEMBER 5, 1994) TO DECEMBER 31, 2002

<TABLE>
<CAPTION>

                                      Number    Par Value  Reserved     Additional                                          Total
                                        of       Common       for        Paid in                 Deferred  Accumulated Shareholders'
                                     Shares      Stock     Conversion    Capital     Warrants   Compensation   Deficit    Deficit
                                  -----------   --------   ----------   ---------- ----------- ------------ -----------  -----------
<S>                    <C>                    <C>        <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          -           -            -       636,090
Warrants issued for cash                   -          -            -            -      5,000           -            -         5,000
Shares issued as compensation
 for services                        714,500         71            -    1,428,929          -           -            -     1,429,000

Net loss                                   -          -            -            -          -           -    (2,152,843)  (2,152,843)
                                  -----------   --------   ----------   ---------- ----------- ------------ -----------  -----------
December 31, 1996                  6,799,886        680            -    2,064,410      5,000           -    (2,152,843)     (82,753)

Issuance of stock, prior to
 acquisition                         206,350         21            -      371,134          -           -            -       371,155
Acquisition of subsidiary for
 stock                             1,503,000        150            -       46,545          -           -            -        46,695


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

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

December 31, 1997                  7,689,690      7,690          820    2,474,430      5,000           -    (3,132,478)    (644,538)

Conversion of parent's shares        696,022        696         (696)           -          -           -            -             -
Shares issued for cash, net of
 offering costs                      693,500        694            -      605,185          -           -            -       605,879
Shares issued in cancellation
 of debt                             525,000        525            -      524,475          -           -            -       525,000
Shares issued as compensation        400,000        400            -      349,600          -           -            -       350,000

Net loss                                   -          -            -            -          -           -    (1,009,945)  (1,009,945)
                                  -----------   --------   ----------   ---------- ----------- ------------ -----------  -----------
December 31, 1998                 10,004,212     10,005          124    3,953,690      5,000           -    (4,142,423)    (173,604)

Conversion of parent's shares         13,000         13          (13)           -          -           -            -             -
Shares issued in cancellation
 of debt                              30,000         30            -       29,970          -           -            -        30,000
Shares issued for cash, net
 of offering costs                    45,000         45            -       41,367          -           -            -        41,412
Shares issued as compensation      3,569,250      3,569            -      462,113          -           -            -       465,682
Detachable warrants issued                 -          -            -            -    152,125           -            -       152,125
Detachable warrants exercised        100,000        100            -      148,900   (149,000)          -            -             -
Debentures converted to stock      1,682,447      1,682            -      640,438          -           -            -       642,120

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

December 31, 1999                 15,443,909     15,444          111    5,276,478      8,125           -    (5,813,678)    (513,520)

        See accompanying notes to the consolidated financial statements.

                                       F-5
<PAGE>

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          -           -            -       860,035
Shares issued in cancellation
 of debt                             875,000        875            -      660,919          -           -            -       661,794
Shares issued in cancellation
 of accounts payable                 100,000        100            -       31,165          -           -            -        31,265
Shares issued as compensation      3,372,945      3,373            -    2,555,094          -    (759,560)           -     1,798,907
Warrants exercised                    38,807         39            -        3,086     (3,125)          -            -             -
Warrants expired                           -          -            -        5,000     (5,000)          -            -             -

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

December 31, 2000                 21,534,807     21,535            -    9,390,184          -    (759,560)   (9,656,986)  (1,004,827)

Shares issued for cash, net
 of offering costs                 6,497,088      6,497            -    1,257,758          -           -            -     1,264,255
Shares issued as compensation      9,162,197      9,162            -    1,558,599          -    (230,512)           -     1,337,249
Shares issued on previously
 purchased shares                    342,607        342            -      188,208          -           -            -       188,550
Shares issued in cancellation
 of accounts payable                 200,000        200            -       68,880          -           -            -        69,080
Amortization of deferred
 compensation                              -          -            -            -          -     495,036            -       495,036
Stock options issued for services          -          -            -      439,544          -           -            -       439,544

Net loss                                   -          -            -            -          -           -    (4,079,806)  (4,079,806)
                                  -----------   --------   ----------   ---------- ----------- ------------ -----------  -----------
December 31, 2001                 37,736,699     37,736            -   12,903,173          -    (495,036)  (13,736,792)  (1,290,919)

Shares issued for cash, net
 of offering costs                18,657,500     18,658            -    2,077,641          -           -             -    2,096,299
Shares issued as compensation      3,840,525      3,841            -    1,044,185          -           -             -    1,048,026
Shares issued on previously
 purchased shares                     50,000         50            -        4,950          -           -             -        5,000
Shares issued in cancellation
 of accounts payable               4,265,184      4,265            -      539,291          -           -             -      543,556
Amortization of deferred
 compensation                              -          -            -            -          -     495,036             -      495,036
Stock options issued for servies           -          -            -      225,000          -           -             -      225,000
Net loss                                   -          -            -            -          -           -    (4,057,153)  (4,057,153)
                                  -----------   --------   ----------   ---------- ----------- ------------ -----------  -----------
December 31, 2002                 64,549,908  $  64,550  $         -  $16,794,240 $        -  $        -  $(17,793,945) $  (935,155)
                                  ===========   ========   ==========   ========== =========== ============ ===========  ===========

</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-6

<PAGE>


                         SAMARITAN PHARMACEUTICALS, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FROM INCEPTION (SEPTEMBER 5, 1994) AND FOR THE YEARS
                        ENDED DECEMBER 31, 2002 AND 2001




<TABLE>
<CAPTION>



                                                                                From  To
                                                                                Inception                      Years Ended
                                                                            (September 5, 1994)                    Ended
                                                                                   To                          December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:                                       DECEMBER 31, 2002           2002                2001
                                                                            -----------------           -----               -----

<S>                                                                <C>                        <C>                 <C>
Net loss                                                           $            (17,793,945)  $      (4,057,153)  $      (4,079,806)
Adjustments to reconcile net loss to net cash used in
    operating activities:
          Depreciation and amortization                                             105,839              25,347              21,080
          Expenses paid through issuance of stock                                 6,475,364           1,048,026           1,337,249
          Stock options issued for services                                         664,544             225,000             439,544
          Amortization of deferred compensation                                     990,072             495,036             495,036
(Increase) decrease in assets:
          Prepaids and other current assets                                         (16,241)             17,284             (18,000)
Increase (decrease) in liabilities:
          Deferred revenue                                                          250,000                   -                   -
          Accounts payable and accrued expenses                                   1,735,600             221,440             452,296
                                                                     -----------------------    ----------------    ----------------
NET CASH USED IN OPERATING ACTIVITIES                                            (7,588,767)         (2,025,020)         (1,352,601)
                                                                     -----------------------    ----------------    ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of technology                                                             (108,969)                  -                   -
Purchase of furniture and equipment                                                 (84,745)            (19,676)                  -
Patent registration costs                                                          (206,785)             (1,700)           (115,006)
                                                                     -----------------------    ----------------    ----------------
NET CASH USED IN INVESTING ACTIVITIES                                              (400,499)            (21,376)           (115,006)
                                                                     -----------------------    ----------------    ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from warrants                                                              157,125                   -                   -
Proceeds from debentures                                                            642,120                   -                   -
Proceeds from stock issued for cash                                               5,883,913           2,105,087           1,264,255
Common stock to be issued                                                           193,550                   -               5,000
Offering costs                                                                      (11,071)             (8,787)             (1,234)
Short-term loan repayments                                                         (131,467)           (131,467)                  -
Short-term loan proceeds                                                          1,612,922             135,022             315,900
                                                                     -----------------------    ----------------    ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                         8,347,092           2,099,855            1,583,921

CHANGE IN CASH                                                                      357,826              53,459             116,314
CASH AT BEGINNING OF PERIOD                                                               -             304,367             187,853
                                                                     -----------------------    ----------------    ----------------
CASH AT END OF PERIOD                                              $                357,826   $         357,826   $         304,167
                                                                     =======================    ================    ================

NON-CASH FINANCING & INVESTING ACTIVITIES:

Purchase of net, non-cash assets of  subsidiary
     for stock                                                     $                    195   $               -   $               -
Short-term debt and accounts payarble retired through
    issuance of stock                                              $              2,433,735   $         543,556   $          69,080
Issuance of common stock, previously subscribed                    $                  5,000   $           5,000   $         188,550

</TABLE>


         See accompanying notes to the consolidated financial statements


                                       F-7

<PAGE>



                         SAMARITAN PHARMACEUTICALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. The Company  Samaritan  Pharmaceuticals,  Inc.  (sometimes  the  "Company" or
"Samaritan")  was formed in March 1996 and became public in October 1997. It was
named Samaritan Pharmaceuticals in April 2001 to reflect a change in the charter
and strategic focus of its business.

Samaritan Pharmaceuticals is an emerging product-driven biopharmaceuticals
company. Samaritan is dedicated to saving lives by focusing on the development
of unique therapeutic products for Alzheimer's, Aging Related Disorders, Cancer,
Cholesterol Reduction, HIV, and Parkinson's disease. Samaritan has an emerging
pipeline, with one drug candidate Anticort completing Phase II, two Predictive
Medicine Diagnostics and several preclinical drug candidates. Samaritan's
collaboration with Georgetown University is designed to accelerate discovery and
the development of new products through the "proof of concept" phase and expand
Samaritan's intellectual property coverage for proven drug candidates.

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 $17,793,945. 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 and
private placements.

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 filing 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. Because the patents were not
approved at December 31, 2002, no amortization was recorded for 2002 and 2001.

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 was approximately $10,896 and $10,896 for the years ended December
31, 2002 and 2001. Accumulated amortization at December 31,2002 was $56,298.

                                      F-8
<PAGE>

         E. Earnings (loss) per share

The Company reports loss per common share in accordance with Statement of
Financial Accounting Standards ("SFAS") no. 128, "Earnings Per Share."
Generally, the per share effects of potential common shares such as warrants,
options, convertible debt and convertible preferred stock have not been
included, as the effect would be antidilutive.


         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. Income Taxes

Pursuant to Statement of Financial Accounting Standards No. 109 ("SFAS 109")
"Accounting for Income Taxes", the Company accounts for income taxes under the
liability method. Under the liability method, a deferred tax asset or liability
is determined based upon the tax effect of the differences between the financial
statement and tax basis of assets and liabilities as measured by the enacted
rates which will be in effect when these differences reverse.

         H. Research and Development Costs

Research and development costs are expensed when incurred.

         I.  Impairment of Long-Lived Assets

The Company reviews long-lived assets and certain identifiable assets 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, 2002, the Company does not believe that any
impairment has occurred.

         J.  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, accounts payable and
accrued expenses approximates fair value because of the short maturity of those
instruments.

                                      F-9
<PAGE>

             K. Stock Based Compensation

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," ("SFAS 123"), encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and related Interpretations.
Accordingly, compensation cost for the Company's stock at the date of the grant
over the amount of an employee must pay to acquire the stock. The Company has
adopted the "disclosure only" alternative described in SFAS 123 and SFAS 148,
which require pro forma disclosures of net income and earnings per share as if
the fair value method of accounting had been applied.

         L. New Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
No. 143 is not expected to have a material impact on the Company's consolidated
financial statements.

In July 2002, the FASB issued Statement No. 146 (SFAS 146), "Accounting for
Costs Associated with Exit or Disposal Activities." This Standard supercedes the
accounting guidance provided by Emerging Issues Task Force Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity" (including "Certain Costs Incurred in a Restructuring").
SFAS No. 146 requires companies to recognize costs associated with exit
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The Company is currently
evaluating this Standard.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure -- an Amendment of FASB Statement No.
123." SFAS No. 148 provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. The Company does not currently intend to adopt the fair value
based method of measuring compensation associated with stock awards and grants.
As a consequence of continuing to utilize the intrinsic value method of
measuring such compensation, the Company will be required to provide additional
disclosures in its quarterly financial statements which will reflect the impact
on net income and earnings per share on a pro forma basis as if the Company had
applied the fair value method to stock-based employee compensation.

                                      F-10
<PAGE>

2.       PROPERTY AND EQUIPMENT

Property and equipment, at cost, consist of the following as of December 31,
2002:

                                       Estimated Useful Life
                                            (Years)
                                       -----------------------
          Furniture and Fixtures              5-7                   $ 84,745
          Accumulated depreciation                                   (49,540)
                                                                  -------------
                                                                    $ 35,205
                                                                  =============
3.       SHORT-TERM BORROWINGS

On October 5, 2001 the Company issued a note for $237,302. The note is payable
on demand and bears interest at 12% per annum. The note had a balance of
$120,834 at December 31, 2002.

At December 31, 2002 the Company had an amount due to an entity for $36,121.
This loan is unsecured, due on demand and does not accrue interest.

4.       SHAREHOLDERS' DEFICIT

On April 24, 2001, the Company amended its articles of incorporation to increase
the authorized number of shares to 100 million and to authorize a class of 5
million shares of preferred stock.

         A. Stock Option Plan

The Company has a stock option plan (Samaritan Pharmaceuticals 2001 Stock Option
Plan). There were 5,074,858 options granted and 2,586,192 options remaining
pursuant to the plan as of December 31, 2002.

B Options Outstanding

The following table summarizes the Company's stock options outstanding at
December 31, 2002:

                                                                    Weighted
                                                                     Average
                                                  Shares          Exercise Price
                                                 ------------   --------------
Outstanding and exercisable at
 December 31, 2000                                       -           $  -

Granted                                           5,418,615            .55

Exercised and expired                                     -              -

Outstanding and exercisable at
 December 31, 2001                              ---------------  ---------------
                                                  5,418,615            .55

Granted                                           5,317,841            .20

Expired                                          (1,742,248)         (1.05)
                                                ---------------  ---------------
Outstanding and exercisable at
 December 31, 2002                                8,994,208          $ .25
                                                ===============  ===============

                                      F-11

<PAGE>


The Company applies APB No. 25, "Accounting for Stock Issued to Employees," and
related interpretations in accounting for its stock options. As a result no
compensation expense has been recognized for employee and director stock
options. Had the Company determined compensation cost based on the fair value at
the grant date for its stock options under SFAS No. 123, "Accounting for
Stock-Based Compensation," the Company's net loss would have been reported as
follows:

                                                  December 31,
                                              2002           2001
                                         -------------   -------------
Net Loss:

            As reported                      $ (4,057,153)   $ (4,079,806)
            Pro Forma                        $ (4,924,153)   $ (4,407,806)

Basic and diluted loss per common share:
            As reported                      $      (0.08)   $      (0.17)
            Pro Forma                        $      (0.10)   $      (0.18)

The Company utilizes the Black-Scholes option-pricing model to calculate the
fair value of each individual issuance of options with the following assumptions
used for grants during the year ended December 31, 2002 and 2001. The per-share
weighted average fair value of stock options granted during 2002 was $0.18 on
the date of grant using the Black Scholes pricing model and the following
assumptions for the year ended December 31, 2002:

                    Expected dividend yield            0%
                    Risk-free interest rate          5.0%
                    Annualized volatility            150%

                                      F-12
<PAGE>

At December 31, 2002 the range of exercise price for all of the Company's
outstanding stock options was $.10-$3.50, with an average remaining life of 6.3
years and an average exercise price of $.25.

         C. 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 the year ended December 31, 2001, the Company issued an aggregate of
9,162,917 shares of common stock in consideration of services rendered or to be
rendered to the Company. Such shares were valued at an aggregate of $1,567,761
ranging from $.29-$.50 per share, representing the fair value of the shares
issued. The issuances were recorded as $230,512 of deferred compensation and the
balance of $1,337,249 as non-cash compensation expense. During the year ended
December 31, 2001 the Company exchanged 542,607 shares of the Company's common
stock in settlement of indebtedness.

During the year ended December 31, 2002, the Company issued an aggregate of
3,840,525 shares of common stock in consideration of services rendered or to be
rendered to the Company. Such shares were valued at an aggregate of $1,048,026
ranging from $.17-$.25 per share, representing the fair value of the shares
issued. The issuances were recorded as non-cash compensation expense. During the
year ended December 31, 2002 the Company exchanged 4,265,184 shares of the
Company's common stock in settlement of accounts payable.

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, 2002 of approximately
$14,000,000 expiring through 2017.

Deferred income tax assets as of December 31, 2002 of $4,700,000 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,
                                             ------------------------
                                              2002             2001
                                             -------          ------

Tax Benefit Computed at Statutory Rates       (35%)            (35%)
Income Tax Benefit Not Utilized                35%              35%
                                             -------          ------
Net Income Tax Benefit                          -                -
                                             =======          ======

                                      F-13
<PAGE>

7.       COMMITMENTS AND CONTINGENCIES

A. The Company leases various facilities under operating lease agreements
expiring through April 2005. Rental expense for the year ended December 31, 2002
was $38,769. Future minimum annual lease payments under the facilities lease
agreements for agreements lasting more than one year are as follows:

                                 2003 $ 32,080
                                 2004 $ 33,040
                                 2005 $ 11,120

B. On June 8, 2001 the Company signed a seven year research collaboration and
licensing agreement with Georgetown University ("Georgetown"). The agreement
commenced July 1, 2001 and terminates June 30, 2008. As consideration for
Georgetown's performance under this Agreement the Company shall pay Georgetown
$650,000 per year in quarterly installments commencing with the quarter ended
September 30, 2001. As of December 31, 2002 the Company has incurred costs of
$990,322 which has been recorded as research and development expense in the
Company's financial statements.

C. The Company has entered into employment agreements with three officers. Two
agreements started January 1, 2001 and the third commenced April 1, 2001. Two
agreements are for five years and one agreement is for two years with annual
compensation for all three at $780,000 with an annual increase not less than 5%
per year. Each officer at his option can receive payment in Company common stock
calculated at the lowest closing price of the stock quoted for the period for
which the salary has been earned divided by the current discount rate for
restricted stock offered by the Company.

Each officer is entitled to a bonus payable in ten year warrants based on a
calculation of the Company's market capitalization. In addition each officer is
guaranteed annual incentive stock options of the greater of 250,000 or a
percentage of the issued and outstanding shares on the anniversary date of the
agreement. The percentage ranges from 1% to 4%. Such options vest 25% each
quarter and are priced at the lowest closing price of the Company's common stock
in the quarter preceding the grant. The options terminate after ten years.

8.         LITIGATION

Samaritan, from time to time, is involved in various legal proceedings in the
ordinary course of our business and are currently executing a settlement
agreement signed by all parties to resolve previously reported pending lawsuits.
Samaritan believes, based on the settlement agreement, that the resolution of
any currently pending legal proceedings, either individually or taken as a
whole, will not have a material adverse effect on its business, financial
condition or results of operations.

                                      F-14
<PAGE>

9.       FUSION TRANSACTION

On November 13, 2000, Samaritan entered into a stock purchase agreement with
Fusion Capital Fund II, LLC, ("Fusion") pursuant to which Fusion Capital agreed
to purchase up to $10 million of the Company's common stock over a 25 month
period from January 17, 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. At such time as Fusion Capital purchases
$10,000,000 of the Company's common stock, the Company, at its discretion, may
elect to enter into an additional $10,000,000 common stock purchase agreement.
This amount may be increased or decreased by Samaritan. The selling price per
share is equal to the lowest of (a) the lowest sale price of the 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 the common stock during the 15
trading days prior to the date of submission of a purchase notice by Fusion
Capital; or (c) $20.00. As of January, 2000, the Company elected to enter into
such additional $10,000,000 for a total of $20,000,000. 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
stock purchase agreement if Fusion Capital or its affiliates would beneficially
own more than 4.99% of the 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 purchase all or
a portion of the remaining amount of the 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 the Company may
elect to terminate the stock purchase agreement without any liability or payment
to Fusion.

Under the terms of the stock purchase agreement, Fusion Capital received
1,054,945 shares of common stock on November 6, 2000.

In connection with this agreement, the Company agreed to pay to consultants
200,000 warrants exercisable for the Company's common stock. The warrants were
issuable upon the initial funding by Fusion.

During the year ended December 31, 2002 pursuant to the agreement, Fusion
purchased 5,170,000 shares for $756,337. At December 31, 2002, Fusion had
advanced additional funds of $162,500 to be repaid through additional issuances
subsequent to year end. The amount advanced is reflected as short-term
borrowings in the accompanying financial statements.

10.      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.

                                      F-15
<PAGE>

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

            The company had a change in registrant's certifying accountant filed
as an 8-K, on September 27, 2002 and incorporated herein by reference.

                                    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.

Class I
(Term Expires 2004)

Name of Director           Age   Served Since       Positions with Company

Dr. Janet Greeson          58    10/97               CEO, Chairman, Pres.
Paul Burkett               81    10/97               Dir, Audit
Welter Holden              72    10/97               Dir, Compensation

Class II
(Term Expires 2003)

Name of Director           Age   Served Since       Positions with Company

Eugene Boyle               37     06/00               Dir, CFO, COO
Brian Sullivan             50     03/01               Dir, Compensation
Cynthia Thompson           43     03/99               Dir, Compensation & Audit

Class III
(Term Expires 2002)

Name of Director           Age   Served Since       Positions with Company

Douglas Bessert            45     03/01               Dir, VP, Secretary
H. Thomas Winn             62     03/99               Dir, Audit
Dr, Vassilios Papadopoulos 41     03/01               Dir, CSO


Business Experience of Director

Class I Directors

       Dr. Janet Greeson, Chairman of the Board, CEO, President and a
Co-Founder, has spearheaded the majority of the financing for the company since
its inception and led the efforts that resulted in the recent Georgetown
University collaboration. She is also a co-inventor in Samaritan's first patent
application, under the Georgetown University collaboration, for an Alzheimer's
drug. Dr. Greeson's strong leadership and team building skills, business acumen,
negotiation skills and knowledge of public markets has been key to Samaritan's
growth. In the past, Dr. Greeson, a seasoned healthcare professional with over
two decades of corporate experience, focused on emerging growth, mergers and
acquisitions. She is a renowned public speaker and the best selling author of
"It's Not What You're Eating, It's What's Eating You." Her past guest
appearances on numerous radio and TV Talk shows has positioned her to open doors
to TV Producers to tell the Samaritan story in a concise and professional
manner. Dr. Greeson developed "Psychiatric Hospital Programs" for the US Navy
and went on to develop, grow and sell her privately held "Psychiatric Hospital
Units" to Columbia/HCA (NYSE:HCA).

                                       29

<PAGE>


            Dr. Greeson has an eclectic past, once working with Mother Theresa,
and was privileged to be the U.S.  Congressional Nominee for the State of Nevada
in 1994, winning the primary without spending a dollar to campaign.  Dr. Greeson
currently serves on the Board of Restaurant Connections  International,  Inc., a
company with approximately 17 licensed Pizza Huts in Brazil; on the Board of The
CEO  Council,  an  organization  that  provides a common  voice and platform for
officers  and  directors  of public  companies;  and on the  Board of  Intuitive
Solutions, Inc., a Financial Consulting company.

Paul J. Burkett is a co-founder and has been a Board Director since October 31,
1997, the Company's date of inception. 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 consulting and
venture capital firm. Since 1983, Mr. Burkett has been a Vice-President and a
Director of Nevada Gold and Casinos, Inc., (AMEX:UWN) a developmenter of gaming
properties. Since March 1998, Mr. Burkett has been the President of Goldfield
Resources, a wholly owned subsidiary of Nevada Gold and Casinos that owns
approximately 9000 acres of mining claims in Goldfield Nevada.

      Welter "Budd" Holden is a co-founder and has been a Board Director since
October 31, 1997, the Company's date of inception. Mr. Holden assisted the
Company in recruiting and networking patients for clinical trials. He is a well
known designer who has consulted with the rich and famous throughout his whole
life. He is a renowned networker and has presented Samaritan to many of his past
clients, including principals of pharmaceutical companies. Although for the past
five years Mr. Holden has been an independent consultant providing architectural
and interior design advice, he spends at least half of his time trying to
further Samaritan. Mr. Holden is the Chairman of our Business Advisory Board. He
received his BA in architectural and interior design from the Pratt Institute.

      Class II Directors

      Mr. Eugene Boyle has been our Chief Financial Officer, Chief Operations
Officer,  and a Director  since  2000.  Mr.  Boyle  attended  Notre Dame and has
received a BSE from Tulane University. He is a veteran of the US Navy serving as
a Lt.  during the Gulf War. Upon  discharge he then returned to graduate  school
earning his MBA in  Entrepeuneurship  from Babson College,  Boston,  Mass. He is
presently  in his last year of  Off-Campus  Law School.  Mr.  Boyle  devotes the
majority of his time to business development aspects of Samaritan,  SEC filings,
patent prosecution and numerous other legal and business affairs.

                                       30
<PAGE>

            In the past, Mr. Boyle was employed by Columbia/HCA (NYSE:HCA) as
its Chief Operations Officer for the southeast region and also assisted with
mergers and acquisitions of numerous hospitals. He also serves on the Advisory
Board of Nevada Gold and Casinos (AMEX:UWN).Mr. Boyle is a Charted Financial
Analyst candidate, has passed the series 7 and 63 securities brokerage
registered representative exams, although he is not a practicing representative.

      Mr. Brian Sullivan has been a working Director since April 2001 and is
totally committed to Samaritan. He is passionate about Samaritan and facilitates
all of the public relations strategy for the Company. He administrates
Samaritan's Research Laboratory at Georgetown University in Washington, DC and
has been an incredible asset to the Company aligning us with HIV activist
groups, Aging Institutes and various governmental agencies. Also, Mr. Sullivan
has been instrumental in using his acumen for relationships to present the
Company to many high net worth private investors. In the past, 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
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. 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.

      Ms. Cynthia C. Thompson has been a Director since March 31, 1999 and heads
the  Compensation  Committee  since April 2001. Ms.  Thompson is the founder and
Chief Executive  Officer,  since May 1998, of Service  Interactive,  Inc., which
services 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.

      Class III Directors

      Mr. Doug Bessert, Vice President of Investor Relations and Corporate
Secretary, has been a Director since March 2001.  Mr. Bessert has an extensive
network of contacts which provides an active basis for Samaritan's ability to
raise private capital.  Mr. Bessert received his BS in Marketing from the
University of Wyoming.  Mr. Bessert has over 20 years of financial and investor
relationship experience, with an emphasis in small entrepreneurial companies.
Mr. Bessert devotes the majority of his time to the affairs of Samaritan's
shareholders.  Prior to joining Samaritan, he served as a Branch Manager at a
stock brokerage firm in charge of nine other brokers, handling all compliance
and investor problems for the office.  Mr. Bessert was the Founder and CFO of
Thorofare Resources Inc., a regional Oil and Gas company with production and
employees in 8 states.  He also was a Financial Consultant that managed
portfolios for over 230 clients managing in excess of $43 million in assets.
During his tenure as a financial consultant, he was heavily involved in
leveraged buyouts, raising private capital, and acquisitions of many entities.

                                       31
<PAGE>

            Mr. H. Thomas  Winn has served as a Director  since March 31, 1999
and heads the Audit  Committee since April 2001.  Presently,  Mr. Winn serves as
the Chairman, CEO,  President  and a Director of Nevada  Gold & Casinos,  Inc.,
(AMEX:UWN) a developer of gaming properties, since January 1994. He also serves
as Chairman and President of Aaminex Capital  Corporation,  a consulting and
venture capital firm since 1983.

            Dr.  Vassilios  Papadopoulos,  D.Pharm.,  Ph.D., is head of the
Division of Hormone  Research and  professor  of Cell  Biology,  Pharmacology  &
Neuroscience at Georgetown  University  Medical Center.  He was appointed Senior
Scientific  Advisor in June of 2000 followed by being appointed Chief Scientific
Officer in April 2001. Dr.  Papadopoulos and his group of scientists  originally
assisted  Samaritan  with work on using Procaine(HCL) to control  stress-induced
cortisol  production  by the human  adrenal  cells.  Dr.  Papadopoulos  has over
eighteen years of experience and over 130 peer review  article  publications  in
the  Biopharmaceutical  field and numerous  patents in the field of  cholesterol
chemistry.

            Dr. Papadopoulos' previous achievements include: Gold Medal from the
City of Athens for Outstanding Performance in Secondary Education; Sandoz Award,
Endocrine Society of Australia (1988); James Shannon Director's Award from
NIDDK, NIH (1991-1993); Research Career Development Award, NICHD, NIH
(1993-1998). Member, Environmental Health Sciences Review Committee, NIEHS, NIH
(1999-2003) Ad Hoc Reviewer for NICHD Program Projects Study Section, NIH
(1991), NIEHS Program Projects Study Section, NIH (1995), Reproductive Biology
Study Section, NIH (1996,1998), NIDDK Review Committee (2000), National Science
Foundation (1991-1998), National Research Foundation of Switzerland (1992,1998),
Israel Science Foundation (1993-2000), U.S.-Israel Binational Science Foundation
(1996,1997), Department of Veterans Affairs (1996), Australian Research Council
(1997,1998,2000), National Health and Medical Research Council of Australia
(1999), Alzheimer's Association (1999,2000).

            No Director or executive officer of the Company has any family
relationships  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, with Director Winn as Chairman, who is independent and a
financial expert as used in Item 7(d)(3)(iv) of Schedule 14 A (240.14a-101 of
this chapter) under the Exchange Act. The Company has also formed a Compensation
Committee, with Director Thompson, as Chairman; a Business Advisory Board, with
Director Holden, as Chairman; and a Scientific Advisory Board, with Director
Papadopoulos, as Chairman.

Item 10 Executive Compensation.

      The Compensation Committee (CC) of the Board of Directors administers our
executive compensation program. Each member of the CC is a non-employee
director. The CC is responsible for establishing salaries and administering the
incentive programs for our Chief Executive Officer, and other executive
officers.

                                       32
<PAGE>

Compensation Philosophy

      The CC has designed Samaritan's compensation program based on the
philosophy that all of our executives are important to our success, with our
executive officers setting the direction of our business and having overall
responsibility for our results. Like other pharmaceuticals companies, we operate
in a highly competitive and difficult economic environment. Accordingly, the CC
has structured Samaritan's compensation to accomplish several goals:

-- attract and retain very talented individuals,

-- reward creativity in maximizing business opportunities, and

-- enhance shareholder value by achieving our short-term and
       long-term business objectives.

Base Salary
      The CC considers the peer data discussed above as well as individual
performance when approving base salaries for executive officers. The CC
evaluates individual performance based on the achievement of corporate or
divisional operating goals and subjective criteria, as well as the Chief
Executive Officer's evaluation of the other executive officers. No specific
weight is assigned to any particular factor. Dr. Greeson, Mr. Boyle, Mr. Bessert
and Dr. Papadopoulos each have employment agreements negotiated on an
arm's-length basis with the CC that provide a minimum annual base salary. In
setting base salary, the Board considered the contributions of each executive to
our company, compensation paid by peer companies and outside compensation
reports.

Stock Options
      The short and long-term compensation program includes stock options
granted under the Stock Incentive Plan as well as non-qualified stock options
      The Option Plan is designed to:

-- reward executives for achieving long-term financial performance goals over a
     three-year to ten-year period,

-- provide retention incentives for executives, and

-- tie a significant portion of an executive's total compensation to our
     long-term performance.

      Stock options for our executive officers and key associates are part of
our incentive program and link the enhancement of shareholder value directly to
their total compensation. The CC determines the number of stock options granted
based upon several factors:

-- level of responsibility,

-- expected contribution towards our performance, and

-- total compensation strategy for mix of base salary, short-term incentives and
long-term incentives. The following tables and notes present information
concerning compensation to the Company's Chief Executive Officer and to the
Company's most-highly compensated executive officers other than the Company's
Chief Executive Officer who were serving at December 31, 2002

                                       33
<PAGE>

<TABLE>
<CAPTION>

                                         Summary Compensation Table
--------------------------------------------------------------------------------------------------------------

                                                                             Long Term Compensation
---------------------------- -------- -------------- ------------- -------------------------------------------

                           Annual Compensation                                   Awards
---------------------------- ------------------------------------- -------------------------------------------
Name and Principle Position   Year     Salary ($)      Accrual       Restricted Stock         Securities
                                                      Salary ($)      Awards ($)          Underlying Options
                                                                                                 (#)
---------------------------- -------- -------------- ------------- --------------------- ---------------------
<S>                          <C>        <C>            <C>                  <C>               <C>
Janet Greeson,               2002       $264,983       $131,917            -0-                1,532,210
Chairman, CEO, and
President (1)
---------------------------- -------- -------------- ------------- --------------------- ---------------------
                             2001       $101,600       $124,083          $152,317             1,532,210
---------------------------- -------- -------------- ------------- --------------------- ---------------------
                             2000       $ 30,000       $150,000          $180,000             1,779,684
---------------------------- -------- -------------- ------------- --------------------- ---------------------
Eugene Boyle, CFO, COO  (1)  2002        $97,533       $167,067            $-0-                766,105
---------------------------- -------- -------------- ------------- --------------------- ---------------------
                             2001        $62,072       $51,463           $138,465              766,105
---------------------------- -------- -------------- ------------- --------------------- ---------------------
                             2000         $-0-           $-0-            $182,000              444,921
---------------------------- -------- -------------- ------------- --------------------- ---------------------
Doug Bessert, VP  (1)        2002        $87,000       $98,062             $-0-                444,921
---------------------------- -------- -------------- ------------- --------------------- ---------------------
                             2001        $20,000       $ 2,083           $82,917               383,052
---------------------------- -------- -------------- ------------- --------------------- ---------------------
</TABLE>

(1) The Company engaged the executive pursuant to a written agreement between
Samaritan Pharmaceuticals, Inc., Doug Bessert, Eugene Boyle and Dr. Janet
Greeson filed as an exhibit to 10-QSB, including any amendments, on August 14,
2002 and incorporated herein by reference.

                                       34
<PAGE>

<TABLE>
<CAPTION>

                             Option Grants in Last Fiscal Year
-----------------------------------------------------------------------------------------------
                                      Individual Grants
-----------------------------------------------------------------------------------------------
            Name                  Number of        % of Total
                                  Securities        Options
                                  Underlying       Granted to      Exercise
                               Options Granted    Employees in    Base Price
                                    (#)(1)        Fiscal Year       ($/Sh)      Expiration Date
------------------------------ ----------------- --------------- ------------- ----------------
<S>                               <C>                 <C>           <C>          <C>
Janet                             1,532,210           30.8%         $0.14        01/02/2012
Greeson (1)
------------------------------ ----------------- --------------- ------------- ----------------
Janet                             1,779,684           35.8%         $0.14        04/25/2012
Greeson (1)
------------------------------ ----------------- --------------- ------------- ----------------
Eugene                             766,105            15.4%         $0.14        01/02/2012
Boyle (1)
------------------------------ ----------------- --------------- ------------- ----------------
Eugene                             444,921             9.0%         $0.14        04/25/2012
Boyle (1)
------------------------------ ----------------- --------------- ------------- ----------------
Doug                               444,921             9.0%         $0.14        04/12/2012
Bessert (1)
------------------------------ ----------------- --------------- ------------- ----------------
</TABLE>

(1) The company engaged the executive pursuant to a written agreement between
Samaritan Pharmaceuticals, Inc., Doug Bessert, Eugene Boyle and Dr. Janet
Greeson filed as an exhibit to 10-QSB, including any amendments, on August 14,
2002 and incorporated herein by reference.

(2) Executive is employed and receives compensation from Georgetown University,
whom the company has a collaboration agreement for research and development.

                                       35
<PAGE>

<TABLE>
<CAPTION>


           Aggregate Option Exercises in Last Fiscal Year and FY-End Option Values
-----------------------------------------------------------------------------------------------

Name                           Shares          Value          Number of          Number of
                            Acquired on       Realized        Securities      Unexercised In
                             Exercised         ($)(1)         Underlying         the Money
                                (#)                          Unexercised        Options at
                                                              Options at        FY-End ($)
                                    FY-End(#)
-------------------------- --------------- --------------- ----------------- ------------------

<S>                          <C>                 <C>          <C>                 <C>
Janet                        1,779,684          -0-           4,844,104           45,966
Greeson
-------------------------- --------------- --------------- ----------------- ------------------
Eugene                        444,921           -0-           1,977,131           22,983
Boyle
-------------------------- --------------- --------------- ----------------- ------------------
Doug                          483,052           -0-             877,973            8,898
Bessert (2)
-------------------------- --------------- --------------- ----------------- ------------------

</TABLE>

(1) The Company engaged the executive pursuant to a written agreement which
allow the executive to defer compensation into a trust agreement described
below.

(2) Executive is employed and receives compensation from Georgetown University,
whom the company has a collaboration agreement for research and development.

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).

Employment Agreements

            The Company engaged the executive pursuant to a written agreement
between Samaritan Pharmaceuticals, Inc., Doug Bessert, Eugene Boyle and Dr.
Janet Greeson filed as an exhibit to 10-QSB, including any amendments, on August
14, 2002 and incorporated herein by reference.

            In each agreement, the executive is entitled to base salary and
stock options based on a formula not to be less 250,000 options per year. The
executive is also entitled to convert his salary into shares of the Company
based on the formula for the Company's security. See "Executive Compensation"
for amounts of base salary and stock options for each executive. The executive
is also allowed to participate in all of Samaritan Pharmaceutical's benefit
programs, if the Company offers the programs to any other employee.

            If executive terminates by reason of death, disability, incapacity
or termination by Samaritan Pharmaceuticals other than for cause, the executive
will be entitled to continuation of base salary and health and similar benefits
for defined periods, payment of stock options and deferred compensation awards.
In each case, the executive agreed to a non-complete clause for the term of his
employment.

                                       36
<PAGE>

            In the event of a change of control, the executive would also vest
in his or her options. The executive would also no longer be subject to
non-competition undertakings. If a change of control were followed by
termination of employment resulting from a change of control termination, in
lieu of the severance benefits described above, the executive would be entitled
to receive a payment equal to three times base salary and yearly options. For up
to three years following termination Samaritan Pharmaceuticals would also be
obligated to provide continued health and other insurance and disability
benefits. We would also be obligated to pay all legal fees and expenses
reasonably incurred by the executive in seeking enforcement of contractual
rights following a change of control. If change of control payments and benefits
to any of Dr. Greeson, Mr. Boyle, and/or Mr. Bessert were sufficient to result
in an excise tax under the so-called "golden parachute" provisions of the Code,
we would be obligated to pay the executive a tax gross-up payment. All three
executives are also awarded options based on increases in market capitalization
starting with the market capitalization of $12,500,000.

            In addition to the salary and other benefits described above, Mr.
Bessert was awarded 100,000 options at $1.00 on restricted stock that were
vested as the signing of his employment contract.

            Dr. Papadopoulos has an engagement agreement with Samaritan
Pharmaceuticals,  Inc.,  which does not  prohibit  Dr.  Papadopoulos  from being
employed by other  entities.  Dr.  Papadopoulos  has disclosed  that he receives
payments and benefits from other entities including Georgetown University. He is
compensated  on a  monthly  basis,  which  he has  the  option  to  convert  his
compensation into shares plus he receives 250,000 warrants per year for the life
of the contract.

Trust Agreements

            The Company has entered into trust agreements and appointed trustees
that are non directors or officers providing for the payment out of the assets
of the trusts accrued under the Company's various benefit plans, employment
agreements and other employment arrangements as the Company specify from time to
time. To the extent not already irrevocable, the trusts would become irrevocable
upon a change of control of Samaritan Pharmaceuticals. The Company may make
contributions to the trusts from time to time, and additional funding could be
required upon a change of control. To the extent funded, the trusts are to be
used, subject to their terms and to the claims of the Company's general
creditors in specified circumstances, to make payments under the terms of the
benefit plans, employment agreements and other employment arrangements from time
to time specified by the Company.

Indemnification Agreements

            The Company has entered into indemnification agreements with each of
its directors and officers, indemnifying them against expenses, settlements,
judgments and fines incurred in connection with any threatened, pending or
completed action, suit, arbitration or proceeding, where the individual's
involvement is by reason of the fact that he or she is or was a director or
officer or served at our request as a director of another organization (except
that indemnification is not provided against judgments and fines in a derivative
suit unless permitted by Nevada law.) An individual may not be indemnified if he
or she is found not to have acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of Samaritan
Pharmaceuticals, except to the extent Nevada law shall permit broader
contractual indemnification. The indemnification agreements provide procedures,
presumptions and remedies designed to substantially strengthen the indemnity
rights beyond those provided by Samaritan Pharmaceutical's Certificate of
Incorporation and by Nevada law.

                                       37
<PAGE>

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 December 31, 2002, 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:

Name and Address of                         Number              Percentage Owned
Beneficial Owner                           of shares               of Class
---------------                          -------------            --------------


Welter Holden (2)                            350,250                   .5%
P.O. Box 211
144 Gallows Lane
Litchfield CT 06759

Dr. Janet Greeson (1) (2)                    5,044,104                6.9%
101 Convention Center Dr # 310
Las Vegas, NV 89109

Paul Burkett (2)                             403,500                   .5%
4518 Whitset
Studio City, CA 91604

Cynthia Thompson (2)                         659,555                   .9%
3040 Post Oak Blvd. #695
Houston, Texas 77056

H. Thomas Winn (2)                           175,000                   .2%
3040 Post Oak Blvd. #675
Houston, Texas 77056

Eugene Boyle (1) (2)                         3,371,381                4.6%
101 Convention Center Drive #310
Las Vegas, Nevada, 89109

Dr. Vassilios Papadopoulos (1) (2)           750,000                  1.0%
Georgetown University
Samaritan Research Lab
Medical Building, SE 111
3900 Reservoir Road, NW
Washington, D.C. 2007

Brian Sullivan (2)                           853,250                  1.2%
P.O. Box 211
144 gallows Lane
Litchfield CT 06759

Doug Bessert (1) (2)                         877,973                  1.2%
101 Convention Center Drive #310
Las Vegas, Nevada, 89109

Samaritan Pharmaceuticals, Inc.
Executive Trust (4)
FBO Dr. Janet Greeson
PO Box 22790
Santa Fe, NM 87502                       4,831,560                    6.6%

Samaritan Pharmaceuticals, Inc.
Executive Trust (4)
FBO Eugene Boyle
PO Box 22790
Santa Fe, NM 87502                       2,603,850                    3.5%

Samaritan Pharmaceuticals, Inc.
Executive Trust (4)
FBO Doug Bessert
PO Box 22790
Santa Fe, NM 87502                       1,084,610                    1.5%

Samaritan Pharmaceuticals, Inc.
Executive Trust (4)
FBO Dr. Bassilios Papadopoulos
PO Box 22790
Santa Fe, NM 87502                         850,000                    1.2%

All officers and Directors               21,855,033                  29.8%
as a group 9 persons (1) (2)

(1) Includes  shares of common stock which each of the  following  directors and
executive officers had the right to acquire on December 31, 2002 or within sixty
(60) days  thereafter  through  the  exercise  of  options:  Dr.  Janet  Greeson
(4,844,104 options),  Dr. Vassilios  Papadopoulos (750,000 options),  Mr. Eugene
Boyle (1,977,131 options),  Mr. Doug Bessert (877,973 options).  Excludes vested
deferred shares payable in shares held in trust by the company.

(2) Officer and/or Director.

(3) Calculated on the basis of 73,550,168 shares of Common Stock issued and
outstanding and percentages are rounded and so are approximates.

(4) Dr. Janet Greeson, Eugene Boyle, Doug Bessert and Dr. Vassilios Papadopoulos
do not have the power to vote or direct the disposition of these shares in the
respective trusts and therefore each disclaims beneficial ownership of the
shares in the respective trusts.

Item 12. Certain Relationships and Related Transactions.

None.
                                       38
<PAGE>

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

(a) Reports on Form 8-K.
Samaritan Pharmaceuticals filed one Current Reports on Form 8-K during the forth
quarter of fiscal 2002. 1) Certification of Janet Greeson, Chief Executive
Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 and Certification of Eugene Boyle, Chief
Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Exhibits

Listed below are all exhibits filed as part of this report. Some exhibits are
filed by the Registrant with the Securities and Exchange Commission pursuant to
Rule 12b-32 under the Securities Exchange Act of 1934, as amended.

Exhibits
No.                      Description
----------------------------------------------------------------------
2.1      Agreement and Plan of Reorganization (1)
3.1      Articles of Incorporation, as amended and restated (5)
3.2      By-Laws (3)
4.1      Form of common stock certificate (1)
4.2      1997 Stock Option Plan (1)
4.3      2001 Stock Option Plan (4)
10.1     Assignment between Linda Johnson and the Company dated
         September 6, 2000. (5)
10.2     Assignment between Linda Johnson and Spectrum Pharmaceuticals
         Corporation dated May 14, 1999. (5)
10.3     Agreement containing the assignment of U.S. Patent Application
         07/233,247 with improvements dated May 22, 1990. (5)
10.4     Agreement between AIDS Research Alliance Agreement and the
         Company dated March 5, 1999 (1)
10.5     Common Stock Purchase Agreement between Company and Fusion
         Capital Fund II, LLC, dated November 2, 2000 (2)
         Form of Registration Rights Agreement between Company and
         Fusion Capital Fund II, LLC. (2)
10.6     First Amendment to Common Stock Purchase Agreement Amendment
         Between Company and Fusion Capital Fund II, LLC dated as of
         January 3, 2001 (2)
10.7     Agreement between Samaritan Pharmaceuticals, Inc. and Doug
         Bessert (5)
10.8     Agreement between Samaritan Pharmaceuticals, Inc. and Eugene
         Boyle (5)
10.9     Agreement between Samaritan Pharmaceuticals, Inc and Janet
         Greeson (5)
14.1     Code of Ethics
16.1     Letter on change in certifying accountant (6)
21.1     List of Subsidiaries (1)
23.1     Opinion re:  Legality of Law Offices of Richard Rossi, P.A.(2)
99.1     Certification of Chief Executive Officer
99.2     Ceritification of Chief Finanical Officer
99.3     Certification of Vice President


(1) Filed as an exhibit to Form 10-SB, including any amendments, on July 21,
1999 and incorporated herein by reference.

(2) Filed as an exhibit Form SB-2, including any amendments, on December 19,
2000, and incorporated herein by reference.

(3) Filed as an exhibit to Form 10KSB, including any amendments, on April 3,
2001 and incorporated herein by reference.

(4) Filed as an exhibit to DEF 14 A, including any amendments, on April 3, 2001
and incorporated herein by reference

(5) Filed as an exhibit to 10-QSB, including any amendments, on August 14, 2002
and incorporated herein by reference.

(6) Filed as an exhibit to Form 8-K,  on  September  27,  2002 and  incorporated
herein by reference

Financial statement schedules

The Financial Statements filed as part of this report are listed and indexed at
Page F-1.

                                       39
<PAGE>

Item 14. Controls and Procedures.

            Based on their evaluation, as of a date within 90 days of the filing
date of this Form 10-K, the Company's Chief Executive Officer and Chief
Financial Officer have concluded that the Company's disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934, as amended) are effective. There have been no significant
changes in internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

                                       40
<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.

                             SAMARITAN PHARMACEUTICAL, INC


Dated: April 15, 2003         By: /s/ Janet Greeson, Ph.D.
                                ---------------------------------
                                Janet Greeson, Ph.D.
                                President
                                Chief Executive Officer, Chairman

Dated: April 15, 2003         By: /s/ Eugene Boyle
                                -------------------------------------
                                 Eugene Boyle,
                                 Chief Financial Officer, Director

Dated: April 15, 2003         By: /s/ Doug Bessert
                                  -------------------------------------
                                  Doug Bessert
                                  Executive Vice President, Director

Dated: April 15, 2003         By: /s/ Vassilios Papadopoulos, Ph.D.
                                 ------------------------------
                                  Vassilios Papadopoulos, Ph.D.
                                  Chief Scientific Officer, Director

Dated: April 15, 2003         By: /s/ H. Thomas Winn
                                 --------------------------------
                                 H. Thomas Winn
                                 Director

                                       41
<PAGE>

                                 CERTIFICATIONS

I, Janet Greeson CEO, certify that:

1.  I  have   reviewed   this  annual   report  on  Form  10-QSB  of   Samaritan
Pharmaceuticals, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

            b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

            c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

            a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

            b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: 15 April 2003

_/s/ Janet Greeson C.E.O_
 -----------------------
Janet Greeson C.E.O

                                       42

<PAGE>

I, Eugene Boyle CFO, certify that:

1.  I  have   reviewed   this  annual   report  on  Form  10-QSB  of   Samaritan
Pharmaceuticals, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

            b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

            c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

            a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

            b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: 15 April 2003

/s Eugene Boyle CFO
Eugene Boyle CFO

                                       43
<PAGE>


I, Doug Bessert, Vice President and Secretary, certify that:

1.  I  have   reviewed   this  annual   report  on  Form  10-QSB  of   Samaritan
Pharmaceuticals, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

            b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

            c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

            a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

            b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: 14 April 2003

/s/ Doug Bessert
Doug Bessert VP

                                       44