<PAGE>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                 WASHINGTON D.C.

                                   FORM 10-KSB

[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the Fiscal Year ended December 31, 2002

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

                          Commission File No. 000-29462

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                          -----------------------------
             (Exact name of Registrant as specified in its charter)

           Delaware                                 59-2762023
  -------------------                             -------------------
  (State of other jurisdiction          (I.R.S. Employer Identification Number)
   of incorporation or organization)

                  43 West 33rd Street, New York, New York 10001
                               -------------------
                     Address of principal executive offices

        Registrant's telephone number, including area code: 212-695-3334

        Securities registered pursuant to Section 12(b) of the Act: NONE

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  registrant  was required to filed such  reports),  and (2) has been
subject to such filing requirement for the past 90 days. [X] Yes[ ] No

Check  if no  disclosure  of  delinquent  filers  in  response  to  Item  405 of
Regulation S-B is contained in this Form,  and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  of  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form-KSB. [X]

State issuer's revenues for its most recent reporting period (Fiscal year).....$

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant at April 15, 2002,  was  approximately  $873,600.  As at December 31,
2002, the number of shares issued and outstanding was  246,939,950.  The closing
price of the common stock at that date was $0.0042.

<PAGE>

<TABLE>
<CAPTION>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                               Form 10-KSB - Index

                   For the Fiscal Year Ended December 31, 2002
<S>               <C>
PART I                                                                                  Page

Item 1.           Business                                                              3
Item 2.           Properties                                                            3
Item 3.           Legal Proceedings                                                     4
Item 4.           Submission of Matter to a Vote of
                           Security Holders                                             4

PART II

Item 5.           Market of Registrant's Securities and
                           Related Stockholder Matters                                  4
Item 6.           Management's Discussion and Analysis of
                           Financial Condition and Results of Operations                5
Item 7.           Consolidated Financial Statements and
                           Supplementary Data                                           7
Item 8.           Changes in and Disagreements with Accountants
                           on Accounting and Financial Disclosures                      7

PART III

Item 9.           Directors and Executive Officers of the Registrant                    8
Item 10.          Executive Compensation                                                9
Item 11.          Security Ownership of Certain Beneficial Owners
                           and Management                                               10
Item 12           Certain Relationships and Related Transactions                        11


Part IV

Item 13.          Exhibits, Consolidated Financial Statements,
                           Schedules and Reports on Form 8-K                            11
Item 14. Controls and Procedures                                                        12

Financials                                                                follow  page  13
Signatures                                                                              14

</TABLE>
                                       2


<PAGE>


         This Form  10-KSB  contains  forward  looking  statements,  within  the
meaning of Section  27A of the  Securities  Act of 1933 and  Section  21E of the
Securities  Exchange  Act of  1934,  regarding  future  events  and  the  future
performance of the Company involve risks and  uncertainties  which may cause our
actual  results in future  periods to be  materially  different  from any future
performance  suggested  herein.  We  believe  that its  business  strategy  that
includes focus on future  acquisitions is not unique.  There can be no assurance
that our strategy will be successful.  There can be no assurance that sufficient
capital can be obtained to market  ourselves  and  increase our market share and
our performance and actual results could differ  materially from those projected
in the forward looking statements contained herein.



PART I

Item 1.           Business

         APPI continues to focus on the research and  development of plant based
dietary supplements. During July 1999, the Company acquired exclusive rights and
interests to a thirteen-step  process which utilizes  virtually the whole of the
nutrients found in plants to manufacture all natural herbal dietary supplements.
The purchase  price for the process was 12,000,000  shares of Common Stock.  The
shares were issued February 13, 2001. A further 6,000,000 shares will become due
when marketing of the product commences. The Company intends to use this process
to manufacture  products that it hopes to distribute  worldwide  through various
sales distribution contracts.

         On February  28,  2000,  the  Company  entered  into an Asset  Purchase
Agreement  with  Dr.   Bielory  to  purchase  his  various   allergy  and  nasal
formulations. This Agreement was approved by the Board of Directors on September
6, 2000.  Dr. Bielory was granted a five year option to purchase an aggregate of
18,000,000 shares of the Company's Common Stock, par value $0.0007 per share, at
an exercise  price of $180.00.  Dr.  Bielroy  exercised an option for 12,000,000
shares in the first quarter of 2001.

         Sinusol(TM),  being one of the formulations purchased from Dr. Bielory,
is a  generalized  base  solution for the  development  of an extensive  line of
specialty  products  related to allergy and sinus  conditions.  The  ingredients
include a mixture of gently  pH-balanced  essential mineral oils that combat the
various   symptoms   related  to  allergies  and  sinus   disorders,   including
congestions,  irritated  nasal  mucosa  and  bacterial  and  fungal  infections.
Specialized advanced formulations are being reviewed for patent submission.


Item 2.           Description of Property

         The Company continues to lease space at 43 West 33rd Street,  New York,
New York 10001.  The current  amount of space is sufficient  for the Company for
the foreseeable  future. Due to the cash problems of the Company, it is possible
that the Company  would be forced to vacate the  leasehold  at some point in the
future, although no such action is imminent or contemplated.


                                       4
<PAGE>

Item 3.           Legal Proceedings

         The  Company  received a letter  from the  counsel  for  Warner-Lambert
objecting to the trademark application the Company had flied with respect to its
Sinusol(TM)  product.  Warner-Lambert felt that the Sinusol(TM) product would be
too similar to the Warner-Lambert  product they had trademarked,  called ANUSOL.
The parties have agreed to a settlement  agreement whereby the opposition to the
trademark  application  filed by the Company will be  withdrawn  and the Company
shall be permitted to continue to market the  Sinusol(TM)  product.  The Company
agreed not to use or seek to register  trademarks or service marks in the United
States  containing the suffix "-NUSOL",  except for its pending  application for
SINUSOL and any other related application for SINUSOL or various permutations of
SINUSOL, including without limitation SINUSOL-ES, SINUSOL PLUS or similar marks.
Nothing in the  settlement  agreement  shall  prevent APPI from using the suffix
"-USOL" in any trademark or service mark.

         The  Company is a party to an action in the Civil  Court of the City of
New York, County of New York, entitled,  Bowne of New York City, LLC v. Advanced
Plant Pharmaceuticals.  This is an action for unpaid fees for filing the reports
of the Company on EDGAR. The suit seeks $15,805.42 in unpaid fees for filings on
the EDGAR system.  The Company  disputes the total amount due. If the Company is
unable to work out a resolution of this action,  it could have a material affect
upon  the  Company.  Counsel  for the  Company  has  been in  contact  with  the
attorney's  for Bowne,  and it is likely  that a  resolution  will be able to be
reached.

         The Company was sued by Airgate  International  Corp.  ("Airgate") that
provided  services to the Company.  These services  involved  importing  certain
items and supplies for the Company. The suit seeks the sum of$7,350.00 in unpaid
invoices.  If the Company is unable to work out a resolution of this action,  it
could have a material affect upon the Company.  Counsel for the Company has been
in contact with the  attorney's  for Airgate,  and intends to file and answer to
the  complaint.  However,  it is  likely  that a  resolution  will be able to be
reached,  although the terms and conditions cannot be predicted.  It is possible
that the Company will have to pay the entire  amount  sought under less than the
most favorable terms.


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

         There were no matters  submitted to a vote of  shareholders  during the
fourth quarter of 2001.


                                       5
<PAGE>


PART II

Item 5.         Market of Registrant's Securities and Related Stockholder
                Matters

         a. The Company's  Common Stock is traded under the symbol "APPI" on the
NASDAQ Over the Counter Bulletin Board.

         The Company,  at December 31, 2001, had  205,691,013  shares issued and
outstanding.  During the fiscal years of 2000 and 2001,  the price of the shares
of Common  Stock of the  Company  reached  the  following  high and low for each
quarter.

CALENDAR QUARTER                  ENDED BID PRICES
                                     HIGH                       LOW

FISCAL YEAR 2001
March 31, 2001                    $0.35                      $0.08
June 30, 2001                     $0.03                      $0.06
September 30, 2001                $0.02                      $0.06
December 31, 2001                 $0.01                      $0.02

FISCAL YEAR 2002
March 31, 2002                    $.0120                     $.0110
June 30, 2002                     $.0240                     $.0001
September 30, 2002                $.0240                     $.0110
December 31, 2002                 $.0120                     $.0001

FISCAL YEAR 2003
March 31, 2003                    $.0240                     $.0001


       b.             Holders
As of April 30, 2002, there were  approximately 350 record holders of our common
stock.  To the best of our  knowledge,  such figure  does not take into  account
those  stockholders whose certificates are held in the name of broker-dealers or
other nominees.  We believe that there are more beneficial  owners of our common
stock, most of whose shares are held in street name.


Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

         APPI  focuses on the research and  development  of plant based  dietary
supplements.  During  July  1999,  the  Company  acquired  exclusive  rights and
interests to a thirteen-step  process, which utilizes virtually the whole of the
nutrients found in plants to manufacture all natural herbal dietary supplements.
The Company intends to use this process to manufacture products that it hopes to
distribute worldwide through various sales distribution contracts.



                                       6
<PAGE>

         Management  believes that it can continue to obtain additional capital.
However, if additional financing is not obtained, the Company might be forced to
cease operations.

         Since its inception,  the Company has had significant  operating losses
and working capital deficits  aggregating  $10,750,419.  The Company's continued
existence  has been  dependant on cash  proceeds  received  from the sale of its
common  stock and the  willingness  of vendors  to accept  stock in lieu of cash
payments for their  services.  Employees  have also  accepted  deferrals of wage
payments.  The Company  hopes to reverse this trend by  generating  cash inflows
through the sale of new products that they have  developed.  To accomplish  this
objective, the Company will require working capital to satisfy current operating
expenses,  and to produce  inventory,  during the interim period  preceding such
time as the revenue cycle begins generating cash.  However,  to date, sales have
not been  material  and the Company has run out of capital.  As of December  31,
2002,  the  Company  has $219 in cash and  total  current  liabilities  exceeded
current assets by $3,300,433.

     Since  the  beginning  of January 2002 we do not generally have any cash on
hand  or  Very  little  in  the  way  of  accounts receivable. The Company's two
employees  have  deferred  payment  of  their  salaries  off  and on ever since,
sometimes,  receiving  stock  in  kind.  While we are negotiating with potential
investors  to secure cash infusions into the Company, if we do not find any cash
investors  we  will be unable to operate our business for any significant length
of  time.

         If we secure  funds we intend to use our  Process to expand our product
line to include herbal dietary  supplements  such as St. John's Wort, Kava Kava,
Ginko  Biloba  and  Echinacea.  We  estimate  that the  initial  production  and
preliminary  marketing of these four herbal  products to potential  domestic and
international distributors and wholesalers will cost approximately $60,000.

         We do not expect to purchase or sell any  manufacturing  facilities  or
significant  equipment  over the  next  twelve  months.  We do not  foresee  any
significant  changes in the number of  employees  we will  employ  over the next
twelve months.

Other products we are currently marketing are:

LO-CHOL

Born out of the  latest  scientific  research,  Lo-Chol's  patented  formula  is
derived from the "whole plant" parts ofsix selected  plants that work in concert
to help tip your lipid balance (good and bad cholesterol)  towards a more normal
level. These six plants (with exotic names like  Cinnamomumzeylancium and Allium
sativum)  are   synergistically   combined  using  a  proprietary  "whole  plant
technology" (a special pharmaceutical-grade process) that delivers virtually all
the natural  phyto-chemicals and active ingredients in the plants. Unlike almost
all other  herbal  supplements  on the  market,  Lo-Chol  does not  contain  any
extracts.  Instead,  it  utilizes  the entire  part of a specific  plant that is
processed and standardized to deliver optimum potency and nutritional  benefits.
This is a significant  advantage  that puts Lo-Chol and other APPI products in a
class by themselves.


                                       7
<PAGE>

ACA

ACACaplets  contain a carefully  selected group of 11 natural plant  substances,
which   work  in   harmony   to  help   chronic   fatigue   and   boost   normal
metabolicprocesses  that  support  immune  system  function.   These  11  plants
(including Boswelliacaterii,  Impatiens balaminia and Curcuma zedoria) have long
and storied histories in ancient herbal medicine and folklore. Many are referred
to in the  Bible  as well as  Ayurveda,  "India's  natural  science  of life and
well-being".  Now,  incorporated  together  in  ACA,  they  offer  the  best  of
traditional herbal wisdom and modern science.

SINUSOL(TM)

Developed  in  concert  with  a  leading  board  certified   Allergy  and  Sinus
specialist,  SINUSOL(TM)  is a unique nasal and sinus  solution that  pleasantly
cleanses and  moisturizes  the nasal and  sinusmucosa.  Sinusol(TM)  thins nasal
solutions  to clear  stuffy  and  blocked  allergic  nasal  passages  as well as
relieves  sneezing  and sinus  pressure.  Sinusol(TM),  is the safe and  natural
alternative  to over the counter  nasal sprays and saline  products that contain
irritating preservatives and additives.

On April 12,  2002,  the Board of  Directors  executed a written  consent of the
Board of  Directors  whereby the Company  will spin off its product  LHM123,  an
"Alzheimer's " product (the "Product").  The Product is to be spun off into it's
own separate  company.  The Board of Directors has approved a stock  dividend of
shares of the new  company at the rate of six hundred  (600)  shares of APPI for
each share in the new company. The record dividend date has been set as July 31,
2002,  payable as soon  thereafter  as possible.  In addition,  the Company will
receive an additional two million shares of common stock, which will be retained
by the Company,  as consideration  for the Product being  transferred to the new
company.  It is intended that the new company will file the necessary  documents
to become a separately traded entity on the OTC BB. It is also intended that the
new company will file a registration  statement on Form SB-2 to register  shares
to raise additional capital for the new company.


Item 7.           Consolidated Financial Statements and Supplementary Data

         The  information  required by Item 7 appears at Page F-1, which appears
after page 13.


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

         (a) On March 11, 2003, the  Registrant  was officially  notified by its
Independent Auditor, Michael C. Finklestein, C.P.A., that it had resigned as the
Independent  Auditor of the  Registrant.  The Board of  Directors  accepted  the
resignation as of March 11, 2003.


                                       8
<PAGE>

         During his tenure,  Michael C. Finklestein,  C.P.A.,  issued reports on
Registrant's  financial  statements  up  to  December  31,  2001,  that  neither
contained an adverse opinion or disclaimer of opinion however,  there report was
qualified as to the uncertainty of a going concern.

         During the period of his  engagement and for the period of the two most
recent fiscal years and any  subsequent  interim  period  preceding this action,
there was no disagreement between Registrant and Michael C. Finklestein,  C.P.A.
on any  matter  of  accounting  principals  or  practices,  financial  statement
disclosure or audit scope and procedure, which disagreement(s),  if not resolved
to the satisfaction of Michael C. Finklestein, C.P.A., would have caused them to
make reference to the subject matter of the  disagreement in connection with its
opinion.

         During the period of his engagement,  Michael C.  Finkelstein,  C.P.A.,
advised the Registrant that the internal controls  necessary to develop reliable
financial statements did not exist.

         The  disclosure  contained  herein  has been  submitted  to  Michael C.
Finklestein, C.P.A.for its review and for them to have an opportunity to comment
on the disclosure.

         (b) Effective March 11, 2003, Livingston, Wachtell & Co., LLP, has been
retained as  independent  auditor of Advanced  Plant  Pharmaceutical,  Inc., the
Registrant,  and was retained as  independent  auditor of the registrant for the
fiscal year ending December 31, 2002.  Prior to the  engagement,  Registrant did
not consult with  Livingston,  Wachtell & Co., LLP regarding the  application of
accounting principles to a specified  transaction,  or the type of audit opinion
that may be rendered with respect to the Registrant's  financial statements,  as
well did not consult with Livingston,  Wachtell & Co. LLP. As to the application
of accounting principles to a specific completed or contemplated transaction, or
the type of audit opinion that might be rendered on the small business  issuer's
financial  statements and either written or oral advice was provided that was an
important factor  considered by the small business issuer in reaching a decision
as to the accounting, auditing or financial reporting issue



PART III

Item 9.           Directors and Executive Officers of the Registrant

Directors and Executive Officers of Advanced Plant Pharmaceuticals, Inc.

Name                              Age               Position
-------------                     -----              --------
David Lieberman                     40               President and Director


                                       9
<PAGE>

         David  Lieberman  has served as President of the Company  since July 1,
1996, and as a member of its Board of Directors since June 1996.  Since 1991, he
has worked in the  offices  of the Chief  Rabbi of Bnai  Brak,  Israel.  He also
serves  as a  consultant  for  Osem  Industries,  Inc.,  an  international  food
conglomerate located in Israel.

         All directors hold office until the next annual meeting of stockholders
and the election and  qualification of their  successors.  Directors  receive no
cash compensation for serving on the Board of Directors other than reimbursement
of reasonable expenses incurred in attending meetings.

EXECUTIVE OFFICERS

         Officers are elected  annually by the Board of  Directors  and serve at
the direction of the Board of Directors.  The Company's  executive officer David
Lieberman is also the sole director of the Company.  Information  with regard to
such persons is set forth above under the heading "Nominees." On March 18, 2003,
Dr. Belory resigned as the Chairman of the Board of Directors of the Company.

THE COMMITTEES

         The  Board  of  Directors  does  not  have  a  Compensation,  Audit  or
Nominating  Committee,  and the usual functions of such committees are performed
by the entire Board of Directors.


Item 10.          Executive Compensation

         The  Employment  Agreement  with Mr. David  Lieberman as the  Company's
president expired in June 2002. The employment agreement provided for employment
on a full-time  basis and contains a provision that Mr. David Lieberman will not
compete  or engage in a business  competitive  with our  current or  anticipated
business until the expiration of his  agreement.  Pursuant to the agreement,  we
paid Mr. David Lieberman a base salary of $135,000 per annum, a portion of which
is deferred,  and have granted him a five-year option to purchase 750,000 shares
of our common  stock at an  exercise  price of $.01 per share.  In 1999,  we had
issued Mr.  Lieberman 17 million  shares of our common stock as partial  payment
against  accrued  salary  payable to him. The Company  will  continue to pay Mr.
Lieberman as if he had an employment contract.
<TABLE>
<CAPTION>


TABLE
                                                                                    OTHER ANNUAL
NAME AND PRINCIPAL POSITION                 YEAR     SALARY ($)   COMPENSATION($)    OPTIONS(#)
------------------------------------------------      -------  ---------------  ---------------
<S>                                         <C>          <C>            <C>                <C>

David Lieberman                             2002     $135,000 (1)
         Chief Executive Officer            2001     $135,000 (2)      $30,000
                                            2000     $135,000 (3)
---------------
</TABLE>

(1)  Of the $135,000  owed to Mr.  Lieberman as salary for the fiscal year 2002,
     all has been accrued but not paid.

(2)  Of the $135,000  owed to Mr.  Lieberman as salary for the period,  $100,000
     was paid through the issuance of 8,000,000  shares of common  stock,  which
     also included a $30,000 bonus.  The total balance  outstanding  for accrued
     salary owed to Mr. Lieberman as of December 31, 2001, $424,500.


                                       10
<PAGE>

(3)  Of the $135,000  owed to Mr.  Lieberman as salary for this period,  $14,000
     was paid to him and the  remaining  $121,000 has accrued to him,  leaving a
     total of $299,000 due but not yet paid.

         The Company has a consulting Agreement with C.J. Lieberman. Pursuant to
said Agreement,  he is to receive options to purchase 750,000 shares. His duties
are to  consult  with  the  Company  on the  acquisition  of new  pharmaceutical
products,  marketing and general  business advice for expansion of marketing and
other  various  needs of the  Company  in  connection  with  the  pharmaceutical
industry.


Item 11.          Security Ownership of Certain Beneficial Owners and Management

         The  following  table sets forth certain  information  as of the filing
date  concerning  the  beneficial  ownership  of the Common  Stock,  (i) by each
stockholder  who is known by the Company to own  beneficially in excess of 5% of
the  outstanding  Common Stock;  (ii) by each director;  (iii) by each executive
officer;  and (iv) by all executive officers and directors as a group. Except as
otherwise  indicated,  all persons  listed  below have (i) sole voting power and
investment  power with  respect to their shares of Common  Stock,  except to the
extent that authority is shared by spouses under applicable law, and (ii) record
and beneficial ownership with respect to their shares of Common Stock.

<TABLE>
<CAPTION>


Name and Address                    Amount and Nature                                   Percent of Class
Of Beneficial                       of Beneficial Ownership (3)
Owner                               Common (1)                  Preferred(2)    Common           Preferred
--------------------------          -------------------       ------------      ------       ---------------
<S>                                  <C>                       <C>             <C>                   <C>

David Lieberman (1)                 17,000,000       1,250,000                  14.26            50%
Dr. Leonard Bielory                 12,260,000       -0-                        5.05             -0-
C.J. Lieberman                        4,000,000      1,250,000                  *                50%

All Executive Officers              17,000,000                                  14.26
and Directors as a Group  (1 person)

*  Less than 1%

</TABLE>

1.   Officer  and/or  Directors  of the Company.  The address of each  executive
     officer  and/or  director  is c/o the Company at 43 West 33rd  Street,  New
     York, New York 10001.

2.   Series A Preferred Stock shall have one vote per share as it relates to the
     Series A Preferred Stock and 150 votes as it related to the common stock of
     the  Corporation,  giving the  preferred  shareholders  of the  Corporation
     control over any vote of the common stock holders.

3.   The number of shares of Common Stock  beneficially  owned by each person or
     entity is determined  under the rules  promulgated  by the  Securities  and
     Exchange  Commission  (the  "Commission").  Under  such  rules,  beneficial
     ownership  includes any shares as to which the person or entity has sole or
     shared voting power or investment  power.  The  percentage of the Company's
     outstanding  shares is  calculated  by including  among the shares owned by
     such person any shares which such person or entity has the right to acquire
     within 60 days after April 18,  2001.  The  inclusion  herein of any shares
     deemed  beneficially  owned does not  constitute an admission of beneficial
     ownership of such shares.


                                       11
<PAGE>

Item 12           Certain Relationships and Related Transactions

During 2002, the Company issued 41,248,937 shares of its common stock to certain
inside individuals and other related parties,  to satisfy various liabilities of
the Company as follows:


                    FAIR
NUMBER OF SHARES   VALUE   DESCRIPTION

20,000,000                  Shares to Ezral Silberberg for working capital
2,000,00                    Shares to Barry Ginsberg for working capital
750,000                     Shares to Mark Cooper for compensation
2,000,000                   Shares to Sam Berkowitz for salary
1,000,000                   Shares to Barry Clare for compensation
5,000,000                   Shares to Summa Capital for fees and compensation
5,000,000                   Shares to C.J. Lieberman for consulting fees
183,000                     Shares to Mark Cooper for compensation
425,000                     Shares to Michael S. Krome, P.C., for legal services
4,000,000                   Shares to C.J. Lieberman for consulting fees



                                     Part IV

Item 13.          Exhibits, Consolidated Financial Statements,
                           Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report:

         (1)(2)  CONSOLIDATED   FINANCIAL  STATEMENTS  AND  FINANCIAL  STATEMENT
SCHEDULES.

         A list of the Consolidated  Financial  Statements filed as part of this
Report is set forth in Item 8 and appears at Page F-1 of this Report; which list
is incorporated  herein by reference.  The Financial Statement Schedules and the
Report of Independent Auditors as to Schedules follow the Exhibits.

         (a)(3) EXHIBITS.

         All  of  the  items  below  are   incorporated   by  reference  to  the
Registrant's  General Form 10SB and amendments for Registration of Securities as
previously filed.


                                       12
<PAGE>

                       EXHIBITS AND SEC REFERENCE NUMBERS

         Number               Title of Document
         ------            -----------------------
         2(a) Certificate of Incorporation (2) 2(b) Agreement and Plan of Merger
         (2)
         2(c) By-Laws (2)
         99.1            Certification of President and Chief Financial Officer

(1) Filed Herewith.
(2) Filed as exhibits to Form 10-SB, dated, July 23, 1999, as amended from time
    to time


(b) Reports on Form 8-K

On March 18,  2003,  we filed an  Current  Report on Form  8-K,  indicating  the
changes in Item 4, Changes In Registrants  Accountants,  for the  resignation of
Michael Finkelstein,  C.P.A. and appointing  Livingston,  Wachtell & Co., LLP as
Registrant's Accountant;  Item 5, Other Events, that being the classification of
the  Series A  Preferred  Stock  by the Sole  Director  and the  Certificate  of
Designation  for  the  Series  A  Preferred  Stock;   Item  6,  Resignations  of
Registrant's  Directors,  wherein the  Chairman of the Board of  Directors,  Dr.
Leonard Bielory resigned from the Board of Directors of the Registrant.



Item 14  CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of our management,  including
our  principal  executive  officer  and  principal  financial  officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls and procedures  within 90 days of the filing date of this Annual Report
on Form 10-KSB.  Based on that evaluation,  our principal  executive officer and
principal  financial  officer have  concluded that these controls and procedures
are effective.  There were no significant changes in our internal controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their  evaluation.

Disclosure  controls and procedures are our controls and other  procedures  that
are  designed to ensure that  information  required to be disclosed by us in the
reports  that we file or submit  under the  Securities  Exchange  Act of 1934 is
accumulated  and  communicated  to  our  management,   including  our  principal
executive  officer and principal  financial  officer,  as appropriate,  to allow
timely decisions regarding required disclosure.

                                       13
<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

         Date:     April 15, 2003       By: /s/ David Lieberman
                                         ----------------------------
                                         David Lieberman
                                         President and Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the  following  persons on behalf of the  Registrant in
the capacities and on the dates indicated.

         DATE                              SIGNATURE / TITLE


         Date:       April 15, 2003        By: /s/ David Lieberman
                                            ----------------------------
                                            David Lieberman
                                            Sole Director



                                       14
<PAGE>


CERTIFICATIONS

I, David Lieberman, certify that:
            1. I have reviewed this quarterly  report on Form 10-KSB of Advanced
Plant Pharmaceuticals, Inc.;
            2. Based on my knowledge, this quarterly 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
quarterly report;
            3.  Based on my  knowledge,  the  financial  statements,  and  other
financial  information included in this quarterly report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of Advanced Plant  Pharmaceuticals as of, and for, the periods presented in this
quarterly report;
            4.Advanced Plant  Pharmaceutical'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  Advanced
Plant Pharmaceuticals and we have:
                       a) designed such  disclosure  controls and  procedures to
ensure that material information relating to Advanced
Plant Pharmaceuticals, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this
quarterly report is being prepared;
                       b)  evaluated  the   effectiveness   of  Advanced   Plant
Pharmaceutical's disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the
"Evaluation Date"); and
                       c) presented  in this  quarterly  report our  conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;
            5. Advanced Plant  Pharmaceutical's  and I have disclosed,  based on
our most recent evaluation,  to Advanced Plant Pharmaceutical's auditors and the
audit  committee of registrant's  board of directors (or persons  performing the
equivalent function):
                       a)  all   significant   deficiencies  in  the  design  or
operation of internal controls which could adversely affect
Advanced Plant Pharmaceutical's ability to record, process, summarize and report
financial data and have identified for Advanced Plant Pharmaceutical'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 Advanced Plant Pharmaceutical's internal controls; and
            6. Advanced Plant  Pharmaceutical's  other certifying officers and I
have  indicated in this quarterly  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.

April 15, 2003
                              /s/ David Lieberman
                              -------------------------------
                              David Lieberman
                              President and Chief Financial Officer


                                       15
<PAGE>



                      ADVANCED PLANT PHARMACEUTICALS, INC.

                                DECEMBER 31, 2002



                                    I N D E X

<TABLE>
<CAPTION>


                                                                                           PAGE NO.
<S>                                                                                           <C>

INDEPENDENT AUDITORS' REPORT                                                                  2


BALANCE SHEET                                                                                 3


STATEMENTS OF OPERATIONS                                                                      4


STATEMENTS OF STOCKHOLDERS' DEFICIENCY                                                        5


STATEMENTS OF CASH FLOWS                                                                      6


NOTES TO FINANCIAL STATEMENTS                                                                 7




</TABLE>
<PAGE>





         To the Board of Directors and Shareholders
         Advanced Plant Pharmaceuticals, Inc.
         New York, N.Y.


                          INDEPENDENT AUDITORS' REPORT
                         -----------------------------

         We have  audited  the  accompanying  balance  sheet of  Advanced  Plant
         Pharmaceuticals,   Inc.  as  of  December  31,  2002  and  the  related
         statements of operations,  stockholders'  deficiency and cash flows for
         the year ended December 31, 2002.  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 audits.
         The financial statements of Advanced Plant Pharmaceuticals,  Inc. as of
         December  31, 2001 were  audited by other  auditors  whose report dated
         April 17, 2002, on these financial  statements  included an explanatory
         paragraph describing  conditions that raise substantial doubt about the
         company's ability to continue as a going concern.

         We conducted our audits 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 audits provide a
         reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
         fairly, in all material  respects,  the financial  position of Advanced
         Plant Pharmaceuticals,  Inc. as of December 31, 2002 and the results of
         its operations and its cash flows for the year ended December 31, 2002,
         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. As discussed in Note 1 to
         the financial  statements,  the Company has suffered  recurring  losses
         from   operations  and  has  a  net  capital   deficiency  that  raises
         substantial  doubt about its  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/ Livingston, Wachtell & Co., LLP
         New York, N.Y.
         April 13, 2003

                                       2

<PAGE>



                      ADVANCED PLANT PHARMACEUTICALS, INC.

                                  BALANCE SHEET

                                DECEMBER 31, 2002
<TABLE>
<CAPTION>


                                     ASSETS


<S>                                                                                                       <C>
Current assets
     Cash and cash equivalents                                                                  $           219
     Accounts receivable                                                                                  2,409
     Inventory                                                                                           56,540
                                                                                                ---------------

           Total current assets                                                                          59,168
                                                                                                ---------------

Other assets
     Intangible assets - net                                                                            719,920
     Other assets                                                                                         8,544
                                                                                                ---------------

           Total other assets                                                                           728,464
                                                                                                ---------------

           Total assets                                                                         $       787,632
                                                                                                ===============


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities
     Accounts payable                                                                           $       187,691
     Due to stockholder - asset acquisition                                                           1,440,000
     Loans payable - stockholders                                                                     1,480,012
     Accrued expenses                                                                                   148,398
     Due to distributor                                                                                 103,500
                                                                                                ---------------

           Total liabilities                                                                          3,359,601
                                                                                                ---------------

Stockholders' deficiency
     Common - $.0007 par value,
         250,000,000 shares authorized;
         246,939,950 shares issued and outstanding                                                      173,278
     Paid-in-capital                                                                                  8,005,172
     Deficit                                                                                        (10,750,419)
                                                                                                ---------------

           Total stockholders' deficiency                                                            (2,571,969)
                                                                                                ---------------

           Total liabilities and stockholders' deficiency                                       $       787,632
                                                                                                ===============

                   The accompanying notes are an integral part
                          of the financial statements.

</TABLE>

                                      3
<PAGE>
<TABLE>
<CAPTION>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                            STATEMENTS OF OPERATIONS

                                DECEMBER 31, 2002

                                                                 YEARS ENDED DECEMBER 31,
                                                                2002                  2001
                                                                ----                  ----
<S>                                                             <C>                <C>

Revenues                                                   $        21,161      $        37,121

Cost of sales                                                       18,456               39,520
                                                           ---------------      ---------------

         Gross profit (loss)                                         2,705               (2,399)

Operating expenses                                                 672,244            1,004,387
                                                           ---------------      ---------------

         Loss from operations                                     (669,539)          (1,006,786)

Other income (expense)                                               4,800                 (655)
                                                           ---------------      ---------------

Loss before provision for loss on
    Impairment of assets                                          (664,739)          (1,007,441)

  Provision for loss on impairment of assets                    (1,593,944)                   -
                                                           ---------------      ---------------

         Net loss                                          $    (2,258,683)     $    (1,007,441)
                                                           ===============      ===============

  Loss per share of  common stock
    Basic and diluted                                      $          (.01)     $          (.01)
                                                           ================     ===============


</TABLE>

                   The accompanying notes are an integral part
                          of the financial statements.
                                       4
<PAGE>
<TABLE>
<CAPTION>

                     ADVANCED PLANT PHARMACEUTICALS, INC.

                      STATEMENT OF STOCKHOLDERS' DEFICIENCY

                                DECEMBER 31, 2002


                                                COMMON STOCK         ADDITIONAL
                                              $.0007 PAR VALUE        PAID-IN
                                        SHARES              AMOUNT    CAPITAL          DEFICIT
                                      -------------   ------------    -------          -------
<S>                                         <C>             <C>          <C>           <C>

Balance - January 1, 2001              135,592,198   $     94,915   $  6,508,623   $ (9,962,177)

Common stock issued for services
    and payment of debt at $.01971
    per share                           58,098,815         49,069      1,096,258            -

Exercise of stock option                12,000,000            -              -              -

Prior period adjustment                        -              -              -        2,477,882

Net loss -                                    2001            -              -       (1,007,441)
                                       ------------   ------------   ------------    ------------


Balance - December 31, 2001            205,691,013        143,984      7,604,881     (8,491,736)

Common stock issued for cash,
    services and payment of debt at
$.01041 per share                       41,248,937         29,294        400,291            -

Net loss - 2002                                -              -              -       (2,258,683)
                                      ------------   ------------   ------------    ------------


Balance - December 31, 2002            246,939,950   $    173,278   $  8,005,172   $(10,750,419)
                                      ============   ============   ============    ============

</TABLE>
                   The accompanying notes are an integral part
                          of the financial statements.
                                       5
<PAGE>

<TABLE>
<CAPTION>
                      ADVANCED PLANT PHARMACEUTICALS, INC.

                            STATEMENTS OF CASH FLOWS


                                                                              YEAR ENDED DECEMBER 31,
                                                                             2002                 2001
                                                                             ----                 ----
<S>                                                                          <C>                  <C>

Cash flows from operating activities
     Net loss from operations                                           $    (2,258,683)     $    (1,007,441)
     Adjustments to reconcile net loss from operations to net cash
     used by operating activities:
          Provision for losses on impairment of
            Assets                                                            1,593,944                    -
         Depreciation and amortization expense                                      375              164,352
         Services paid with common stock                                        429,585              945,327
         Accounts receivable                                                       (955)              (1,454)
         Inventory                                                                9,536              (66,076)
         Other assets                                                            (4,400)               4,449
         Accounts payable                                                       (25,888)              43,190
         Accrued expenses                                                        75,418             (228,361)
                                                                        ---------------      ---------------

     Net cash used in operations                                               (181,068)            (146,014)
                                                                        ----------------     ----------------

Cash flows from financing activities
     Loans payable - stockholders - net                                         173,971              153,330
     Payments on short-term loans payable net                                    -                  (200,000)
     Net proceeds from issuance of common stock                                  -                   200,000
                                                                        ---------------      ---------------

     Net cash provided by financing activities                                  173,971              153,330
                                                                        ---------------      ---------------

Net increase (decrease) in cash and cash equivalents                             (7,097)               7,316

Cash and cash equivalents - beginning of year                                     7,316                    -
                                                                        ---------------      ---------------

Cash and cash equivalents - end of year                                 $           219      $         7,316
                                                                        ===============      ===============



Supplemental cash flow information: Cash paid during the year for:
                  Interest                                              $        -           $        -
                                                                        ===============      ===============
                  Income taxes                                          $        -           $        -
                                                                        ===============      ===============

Information about noncash activities:
         Common stock issued to satisfy loans payable                   $       336,000      $       275,000
         Common stock issued for services                                       429,585              945,327


</TABLE>
                   The accompanying notes are an integral part
                          of the financial statements.
                                       6

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

       Advanced Plant Pharmaceuticals, Inc. ("The Company" or "APPI") focuses on
       the sale of plant based dietary health supplements.  The Company owns the
       rights to a thirteen step  manufacturing  process,  which  utilizes whole
       plants to  manufacture  all  natural  dietary  supplements.  The  Company
       intends to use this  process  to  manufacture  products  that it hopes to
       distribute worldwide through various sales distribution  contracts.  APPI
       was  incorporated  in November  1994 and had devoted  most of its efforts
       since inception to 1999 conducting research and development and acquiring
       agreements to the rights of this process and one major sinus product. The
       Company's  operations  are  located  in Long  Island,  New  York  and its
       corporate offices are located in New York City.

       These financial  statements have been prepared  assuming that the Company
       will  continue as a going  concern.  The Company  presently has operating
       risks and liquidity  concerns and has incurred an accumulated  deficit of
       $10,750,419  through  the  year  ended  December  31,  2002  and  current
       liabilities  exceeded  current  assets  by  $3,300,433.  There  can be no
       assurance  that the  Company  will be able to  successfully  acquire  the
       necessary  capital to mitigate their  operating  risks and continue their
       on-going development efforts and bring products to the commercial market.
       These factors,  among others, create a substantial  uncertainty about the
       Company's ability to continue as a going concern.

       CONTROL BY PRINCIPAL STOCKHOLDERS

       The  director,   executive   officers  and  other  related   parties  own
       beneficially  and in the  aggregate,  the majority of the voting power of
       the outstanding  shares of the common stock of the Company.  Accordingly,
       the director, executive officers and related parties, if they voted their
       shares uniformly,  would have the ability to control the approval of most
       corporate actions,  including  increasing the authorized capital stock of
       APPI and the dissolution, merger or sale of all of the Company's assets.

       CASH AND CASH EQUIVALENTS

       The Company  considers all highly liquid debt  securities  purchased with
       original  or  remaining  maturities  of three  months  or less to be cash
       equivalents.

       FAIR VALUE OF FINANCIAL INSTRUMENTS

       The carrying amounts of cash and cash equivalents,  accounts  receivable,
       accounts  payable and accrued  liabilities  approximate fair market value
       because of the short maturity of those instruments. It is not practicable
       to estimate the fair value of loans  payable to  stockholders  due to the
       fact that they are related party transactions.

                                       7
<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

       INVENTORIES

       Inventories  are  stated  at the  lower of cost or  market.  The  Company
       intends to determine cost on a first-in, first-out basis. At December 31,
       2002,  inventories  consisted of $ 47,670 of raw materials and $ 8,870 of
       finished goods and are stated at estimated cost.

       REVENUE RECOGNITION

       Product revenue is recognized upon shipment to customers. The Company has
       adopted Securities and Exchange  Commission's  Staff Accounting  Bulletin
       (SAB) No. 101, which provides  guidance on the recognition,  presentation
       and disclosure of revenue in financial statements.

       PROPERTY AND EQUIPMENT

       Property and equipment are stated at cost less accumulated  depreciation.
       Depreciation  is recorded  principally  using the  straight-line  method,
       based on the estimated useful lives of the assets (machinery and computer
       equipment, 3-10 years). Depreciation Expense for the years ended December
       31, 2002 and 2001 was $ 375 and $ 333, respectively.

       LONG LIVED ASSETSTO BE DISPOSED OFAND IMPAIRMENT OF LONG LIVED ASSETS

       The Company adopted SFAS No.144 in 2002. SFAS 144 retains the fundamental
       provisions of SFAS 121 for recognizing and measuring impairment losses on
       long-lived assets held for use and long-lived assets to be disposed of by
       sale, while also resolving  significant  implementation issues associated
       with SFAS 121. The adoption of SFAS 144 did have a material effect on the
       Company's financial position and results of operations in 2002.

       INTANGIBLE ASSETS

       The Company  accounts for intangible  assets in accordance with SFAS 142.
       Such assets with useful lives are amortized on a straight-line basis over
       the estimated  useful life of the asset.  Intangible  assets are reviewed
       for impairment whenever events or changes in circumstances  indicate that
       the  carrying  amount may not be  recoverable.  If the fair value is less
       than  the  carrying  amount  of the  asset,  an  impairment  loss is then
       recognized.

       STOCK ISSUED FOR SERVICES

       The value of stock issued for services are based on management's estimate
       of the fair value of the Company's stock at the date of issue or the fair
       value of the services received, whichever is more reliably measurable.

       RESEARCH AND DEVELOPMENT COSTS

       Research and development costs are expensed as incurred.

                                       8
<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

       INCOME TAXES

       The Company uses the asset and liability  method of accounting for income
       taxes as required by Statement of Financial  Accounting Standards No. 109
       ("SFAS  109"),  ACCOUNTING  FOR  INCOME  TAXES.  SFAS  109  requires  the
       recognition  of  deferred  tax assets and  liabilities  for the  expected
       future tax  consequences  of temporary  differences  between the carrying
       amounts and the tax basis of certain  assets and  liabilities.  Since its
       inception, the Company has incurred net operating losses.

       The  Company has a  carryforward  federal  net  operating  tax loss carry
       forwards expiring in the years 2009 to 2022. The potential tax benefit of
       this net operating  loss has been offset by a full  valuation  allowance.
       The utilization of the net operating loss may be subject to a substantial
       limitation due to the "Change of ownership  provisions" under Section 382
       of  the  Internal  Revenue  Code  and  similar  state  provisions.   Such
       limitation  may result in the expiration of the net operating loss before
       its full utilization.

       LOSS PER SHARE

       The  Company  computed  basic  and  diluted  loss per share  amounts  for
       December  31,  2002 and  2001  pursuant  to the  Statement  of  Financial
       Accounting  Standard  (SFAS) No. 128,  "Earnings  Per Share." No dilution
       resulted  from  the  9,000,000  and  5,500,000   employee  stock  options
       outstanding at December 31, 2002 and 2001,  respectively,  because of the
       net loss.

       Basic loss per common share ("LPS") is calculated by dividing net loss by
       the  weighted  average  number of common  shares  outstanding  during the
       period. Diluted earnings per common share are calculated by adjusting the
       weighted  average   outstanding   shares,   assuming  conversion  of  all
       potentially dilutive stock options.

       The numerator and denominator used in the basic and diluted LPS of common
       stock computations are presented in the following table:
<TABLE>
<CAPTION>


                                                                     YEAR ENDED DECEMBER 31,
                                                                   2002                 2001
<S>                                                                <C>                  <C>
                                                                   ----                 ----
          NUMERATOR FOR BASIC AND DILUTED LPS
              Net loss to common shareholders                 $ 2,258,683          $ 1,007,441
          DENOMINATOR FOR BASIC AND DILUTED LPS
              Weighted average shares of common stock
                  Outstanding                                 242,041,841          160,245,699
          LPS - basic and diluted                                   $(.01)               $(.01)
                                                                    =====                =====

</TABLE>


                                        9
<PAGE>
                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS


1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

       USE OF ESTIMATES

       The  preparation of financial  statements in conformity  with  accounting
       principles  generally  accepted in the United States of America  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 reported amounts
       of revenues and expenses  during the  reporting  period.  Actual  results
       could differ from those estimates.

       SIGNIFICANT ESTIMATES

       Several  areas  require  significant  management  estimates  relating  to
       uncertainties  for which it is  reasonably  possible that there will be a
       material  change in the near term. The more  significant  areas requiring
       the use of  management  estimates  related to the valuation of inventory,
       intangible assets, all accrued liabilities and the valuation of the stock
       options  and stock  issued  for debt and  services  provided  by  related
       parties.

       EQUITY BASED COMPENSATION

       The Company  accounts  for  employee  stock  options in  accordance  with
       Accounting  Principles  Board Option No. 25 (APB),  "Accounting for Stock
       Issued to Employees." Under APB No.25 the Company recognizes compensation
       expense related to employee stock options,  when options are granted at a
       price below the market price, on the day of grant.

       SFAS No. 123, "Accounting for Stock-Based  Compensation,"  prescribes the
       recognition of compensation expense based on the fair value of options on
       the grant date and allows  companies  to continue  applying APB No. 25 if
       certain pro forma  disclosures  are made assuming the  hypothetical  fair
       value method application.

       RECLASSIFICATION

       Certain  prior year's  amounts have been  reclassified  to conform to the
       2002 presentation.


2. RELATED-PARTIES STOCK AND ASSET TRANSACTIONS

       On  July  16,  1999,  the  Company  entered  into a  Technology  Purchase
       Agreement  ("agreement")  with Mr. C.J. Lieberman (brother of the current
       President  and  Director of the  Company)  whereby  the Company  acquired
       exclusive rights and interests to a thirteen-step  manufacturing process,
       which  utilizes  virtually all of the nutrients  found in certain  plants
       needed to manufacture herbal dietary health supplements.


                                       10


<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



2.     RELATED-PARTIES STOCK AND ASSET TRANSACTIONS (Continued)

       The purchase price for the thirteen-step  process was the issuance to Mr.
       C.J.  Lieberman of 18 million shares of the Company's common stock, which
       was to be issued to him in two phases.  In 2001, the agreement called for
       12 million shares of the Company's stock to be issued at the first phase.
       As of December 2002, none of the stock related to this agreement had been
       issued. The Company, therefore,  accrued and included in the caption "due
       to  stockholder  - asset  acquisition"  in 2000,  $1,440,000,  which  was
       managements'  determination  of the common  stock value of the 12 million
       shares at the time of the  agreement,  in  anticipation  of  issuing  the
       common stock shares to Mr. C.J.  Lieberman.  Due to the asset impairment,
       discussed below, no further liability was recorded on the remaining value
       of  the  6,000,000  shares  not  issued  and  not  recorded  in  "due  to
       stockholder - asset acquisition".

       This agreement,  entered into in 1999 was initially recorded in 2000 as a
       transfer between entities under common control and was therefore recorded
       on the  Company's  records as research  and  development  expenses  and a
       liability in accrued  expenses.  In 2001  management  concluded that this
       transaction  was  recorded  in error  and made a  correction  to the 2000
       financial  statements,  in 2001, by recording a prior period  adjustment.
       The prior period  adjustment  (correction)  made to the Company's records
       was to record an intangible asset,  totaling $ 1,440,000,  on the balance
       sheet and a credit to retained earnings. Due to the lack of sales for the
       approximate  three year period  ending  December 31,  2002,  and based on
       management's current projection of the future present value of cash flows
       from its products sales, an impairment loss in the amount of $909,600 was
       recorded in 2002. The  accumulated  impairment  loss which includes prior
       years'  amortization   totaled  $1,029,600  at  December  31,  2002.  The
       estimated fair value of the intangible asset,  estimated by management to
       be $410,400 and is included under the caption "Intangible assets-net", at
       December 31, 2002

       Unless future sales are generated,  this  intangible  asset is subject to
       future impairment loss provisions.

       In  addition,  the  Company  agrees  to pay to C.J.  Lieberman  a royalty
       payment of $.01 per bottle plus,  1% of the  Company's  suggested  retail
       price plus 10% of the  Company's  net  profits  from the sale of products
       manufactured with the process.  In the event that the Company enters into
       an  agreement  with a third party for the sale of  products  manufactured
       with the process, the agreement must unconditionally  provide for payment
       to the  Company of not less than $20  million.  Upon  receipt of the sale
       proceeds by the Company,  the Company shall issue to Mr. C.J. Lieberman 5
       million shares for each $20 million paid to the Company, not to exceed 25
       million shares.

                                       11
<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS


2.     RELATED-PARTIES STOCK AND ASSET TRANSACTIONS (Continued)

       Upon his resignation as President in 1996, the Company  retained Mr. C.J.
       Lieberman as a consultant. His current consultant's agreement, dated June
       10,  1999,  provides  for  monthly  consulting  fees of $9,000  ($108,000
       annually),  reimbursement of all direct expenses incurred while providing
       services to the Company and a five-year option to purchase 750,000 shares
       of the  Company's  common  stock at an exercise  price of $.02 per share.
       There were 9 million shares of common stock issued to Mr. C.J.  Lieberman
       in payment for his services rendered during 2002.

       As of December 31, 2002,  included on the balance sheet in "Loans payable
       - stockholders" are accrued salaries,  consulting and other expenses paid
       on behalf of the  Company by Mr.  C.J.  Lieberman.  The  balance  due was
       $275,282 at December 31, 2002.

       The President and director of the Company, Mr. David Lieberman,  lent the
       Company his personal funds, or paid expenses on behalf of the Company. As
       of December 31, 2002,  included on the balance sheet in "Loans  payable -
       stockholders" are accrued salaries, consulting and other expenses paid on
       behalf  of the  Company  by Mr.  David  Lieberman.  The  balance  due was
       $516,533 at December 31, 2002.

       On February 28, 2000 the Company entered into an Asset Purchase Agreement
       with Dr. Leonard Bielory  (Chairman of the Board of Directors of APPI who
       resigned in 2003) whereby the Company  acquired the exclusive  rights and
       interest to allergy and sinus formulations he developed  ("Assets").  The
       purchase  price  includes  options to purchase  18 million  shares of the
       Company's  common  stock at an  aggregate  exercise  price  of $180.  The
       options are to be issued in two phases.  The first phase was completed in
       2000 and the options required to purchase the Assets,  12 million shares,
       were issued during the fourth  quarter of 2000.  The fair value of the 12
       million  shares,  as  determined by  management,  was  $1,079,880  and is
       included in "Intangible  assets - net" on the balance  sheet.  Due to the
       lack of sales for the  approximate  three year period ending December 31,
       2002,  and  based  on  management's  current  projection  of  the  future
       anticipated  present value of cash flows from this  product's  sales,  an
       impairment  loss in the amount of $ 684,344  was  recorded  in 2002.  The
       accumulated  impairment loss,  which includes prior years'  amortization,
       totaled $770,360 at December 31, 2002. The net intangible asset, as shown
       on the  balance  sheet  under the  caption  "Intangible  assets-net",  at
       December 31, 2002 was $309,520.  Unless future sales are generated,  this
       intangible asset is subject to future impairment provision losses.

       Additionally,  the Company agrees to pay Dr. Bielory a royalty payment of
       $.01 per bottle,  plus 1% of the  suggested  retail price of each product
       sold,  plus 10% of the Company's net profits before taxes from such sales
       of products manufactured with these assets.

                                       12
<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



2.     RELATED-PARTIES STOCK AND ASSET TRANSACTIONS

       In the event that the Company enters into an agreement with a third party
       for the sale of products  manufactured with these assets, which agreement
       unconditionally provides for payments to the Company of not less than $20
       million  whether  in lump sum or over a period  of four  years  from such
       third party,  the Company shall issue to Dr. Bielory 5 million shares for
       each  $20  million  required  to be paid to the  Company,  not to  exceed
       twenty-five million shares.

       On March 15, 2000 the Company  entered into an employment  agreement with
       Dr. Leonard Bielory whereby under the terms of the agreement, the Company
       is required to pay Dr. Bielory certain monthly  amounts,  some contingent
       on the Company achieving specified net profit levels.


3. INTANGIBLE ASSETS

       Intangible assets consist of the above mentioned  agreement with Mr. C.J.
       Lieberman  to  purchase  the  thirteen-step   manufacturing  process,  to
       manufacture herbal dietary supplements and the agreement with Dr. Bielory
       for  the  exclusive   rights  and  interest  to  his  allergy  and  sinus
       formulations.  Such intangible  assets,  which have indefinite lives, are
       not subject to  amortization,  in accordance  with SFAS 142. These assets
       are  recorded on the balance  sheet,  net of the  accumulated  impairment
       provisions and were $ 719,920 at December 31, 2002.

4. CAPITAL STOCK

       The Company is authorized to issue 250 million shares of it common stock,
       par value  $.0007 per share.  The holders of common stock are entitled to
       one  vote  for  each  share  held  on  all  matters  to  be  voted  on by
       stockholders.

       The Company is also  authorized  to issue 5 million  shares of  preferred
       stock, par value $.0007 per share.  There is currently no preferred stock
       outstanding  and the  Company  has no  current  plans to issue  preferred
       stock.

       The Company issued  41,248,937 shares of its common stock during 2002 for
       cash,  to  satisfy  various  liabilities  and for  professional  services
       rendered to the Company.


                                       13
<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



5.     STOCK OPTIONS

       The Company has adopted an employee, directors, consultants, and advisors
       compensatory  stock compensation and performance based stock option plans
       which  allows for the  issuance of shares of common stock of the Company.
       The exercise  price of each option is generally less than or equal to the
       market price of the  Company's  stock on the date of grant.  The exercise
       price for options  granted is determined  by the board of directors.  The
       maximum term of the options and the vesting  period will be determined by
       the Board and are set forth in each option agreement.

       In  accordance  with various  employment  and  consulting  contracts  the
       Company  has issued  stock  options to its  officers,  employees  and key
       consultants.

       In electing  to  continue  to follow APB No. 25 for  expense  recognition
       purposes,  the  Company is obliged to provide  the  expanded  disclosures
       required  under  SFAS  No.  123  for  stock-based  compensation  granted,
       including if materially  different from reported  results,  disclosure of
       pro forma net loss and loss per share had  compensation  expense relating
       to 2002 and 2001 grants been  measured  under the fair value  recognition
       provision  of SFAS No. 123.  At  December  31,  2002,  all stock  options
       outstanding,  other  than the  options  granted  to Dr.  Bielory  for the
       exclusive rights and interest to his allergy and sinus  formulations were
       "underwater options."

       The  weighted-average  fair values at date of grant for  options  granted
       during 2002 and 2001 were  approximately $ 1.00, and were estimated using
       the   Black-Scholes   option   valuation   model   with   the   following
       weighted-average assumptions:

         Expected life in years                   4
         Interest rate                            6 %
         Volatility                               146.89%
         Dividend yield                           0%


       Had  compensation  expense  been  recognized  using the fair value method
       prescribed in SFAS No. 123, the Company's net loss and net loss per share
       in 2002 and 2001 would not have been significantly affected.


                                       14
<PAGE>

<TABLE>
<CAPTION>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS


5. STOCK OPTIONS

           The following table summarizes stock option activity for 2002 and
           2001:

                                                                      Weighted                                   Weighted
                                                                      Average                                    Average
                                                                      Exercise              Options              Exercise
                                                   OPTIONS             PRICE              EXERCISABLE             PRICE
                                              ---------------       -------------        --------------       ----------
<S>                                             <C>                     <C>                <C>                      <C>
           Balance at December 31,  2000        17,500,000          $      .01              17,500,000           $  .01
                 Granted                               -                  -                    -                     -
                 Exercised                      12,000,000                .089              12,000,000            .089
                 Cancelled                             -                  -                                          -
                                              ---------------       -------------        --------------              -

         Balance at December 31,
              2001                              5,500,000                  .03                5,500,000            .03
                 Granted                        6,000,000                  .007               6,000,000            .01
                 Exercised                             -                  -                    -                    -
                 Cancelled                      2,500,000                 -                   2,500,000            .-
                                              -----------           -------------        --------------       -----------

         Balance at December 31,
              2002                              9,000,000           $        .01              9,000,000       $     03
                                              ===========           ============         ==============       ==========
</TABLE>

        As of December  31, 2002,  there were  9,000,000  common  stock  options
        outstanding  with a  weighted-average  remaining life of 2.5 years and a
        weighted  average  exercise  price of $.01 per  share.  During the first
        quarter of fiscal 2001,  Dr.  Bielory  exercised the 12 million  options
        granted to him in 2000.


6.      LOANS PAYABLE - STOCKHOLDERS

        Loans payable - stockholders consists of unsecured, non-interest bearing
        short-term  loans.  The loan  agreements  provide the  Company  with the
        option of repaying  the loans with either cash or  restricted  shares of
        the Company's common stock.

        On January 11, 2002,  20 million  shares of the stock were issued to Mr.
        Silberberg,  an existing  stockholder,  in partial settlement of a loan.
        The total loan amount converted to capital was $336,000.

        On January 11,  2002,  2 million  shares of the stock were issued to Mr.
        Ginsberg,  an existing stockholder for cash and in partial settlement of
        a loan to the  Company.  The total loan amount  converted to capital was
        $18,000.

                                       15
<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



6.      LOANS PAYABLE - STOCKHOLDERS (Continued)

        On February 28, 2001, the Company entered into a loan agreement with Mr.
        Berkowitz,  an employee and shareholder of the Company. The agreement is
        for a maximum  loan  amount of  $100,000.  As of  December  31, 2002 the
        Company has borrowed $56,449 on this loan. The loan is interest free and
        includes  the  option to be paid back in Company  stock.  If the loan is
        paid in Company stock,  the stock  conversion price is $.0165 per share.
        During  2002,  2 million  shares of the common  stock were issued to Mr.
        Berkowitz as partial repayment of the loan.


7.      COMMITMENTS AND CONTINGENCIES

        The  Company  has  employment  agreements  with  four  employees,  and a
        consulting contract with a key consultant,  who are also stockholders of
        the Company. At December 31, 2002, the Company has a total liability for
        accrued salaries to stockholders of $687,661.  There are certain payroll
        tax liabilities  owed to the IRS on some of the salaries to stockholders
        that were paid in prior  years,  pursuant  to these  agreements.  During
        2002,  Mr.  Cooper  was  issued   2,580,000  shares  for  his  financial
        recordkeeping services.

        On February 17, 2000 the Company  retained the services of First Madison
        Securities,  Inc. ("FMS").  FMS will act as consultant and non-exclusive
        financial  advisor and  investment  banker to the Company in  connection
        with strategic planning, securities transactions,  valuations, mergers &
        acquisitions,  alternative  financing  structures and capital formation.
        FMS will also act as placement agent for the Company.

        As compensation for these services, the Company will issue FMS 6,000,000
        restricted shares of its common stock as follows;  1,700,000 shares upon
        signing the agreement,  1,700,000  shares within three months of signing
        the  agreement  and  2,600,000  shares  within six months of signing the
        agreement. The restricted shares shall be registered with the Securities
        and  Exchange  Commission  to  become  free  trading  shares  as soon as
        possible with FMS bearing all registration costs.

        The  Company  will  also pay FMS a  placement  fee for any  transactions
        consummated,  directly or indirectly, through FMS during the term of the
        agreement or within two years thereafter. The placement fee will consist
        of a payment equal to 10% of the gross proceeds  raised from the sale of
        applicable securities,  reimbursement of non-accountable  expenses equal
        to 3% of the gross proceeds from the sale of any  applicable  securities
        plus  warrants to purchase  common stock equal to 10% of the  applicable
        shares  sold.  Additionally,  the  Company  will  reimburse  FMS for all
        reasonable  out-of-pocket  expenses  incurred in the performance of this
        agreement,  up to a maximum of $25,000.  Through  December  31,2002 this
        contract has not been exercised or terminated.


                                       16

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS



7.      COMMITMENTS AND CONTINGENCIES (Continued)

        On January 22, 2001,  the Company  entered  into a consulting  agreement
        with  Summa  Capital,  Inc.,  which  is  owned  by the son of a  current
        employee  and  shareholder  of  the  Company.  In  accordance  with  the
        agreement, Summa Capital will provide consulting services in the area of
        investor relations, public relations, marketing and capital markets. The
        agreement is renewable every three months but may be cancelled by either
        party on a monthly  basis.  Compensation  payable to Summa Capital under
        this  agreement  includes  $3,000 per month payable in advance,  300,000
        shares of  Company  stock at the end of each  three  month  period and a
        percentage  of the net  proceeds of any money raised by the Company from
        sources introduced by Summa Capital.  Additionally,  at the beginning of
        every three month renewal  period Summa  Capital is to receive  two-year
        warrants  convertible  into 300,000 shares of the Company's common stock
        and five-year  warrants to purchase an additional  300,000 shares of the
        Company's  stock.  The  amounts  paid  in  stock  and  cash  under  this
        consulting  agreement  during the year ended  December 31, 2002 and 2001
        was $24,314 and $23,100, respectively.  During 2002, 5 million shares of
        common stock were issued to Summa Capital, Inc.

        On March 6, 2001,  the Company  entered  into an  agreement  whereby the
        Company appointed  National Brokers  Associates (NBA) as their exclusive
        sales  management  organization.  The  agreement is for a one year term.
        Compensation under the agreement involves percentage of sales volume and
        includes  minimum  payments of $5,000 per month of which 80% can be paid
        with Company stock at a discounted  conversion rate. The agreement calls
        for the issuance of additional  shares of the Company's stock if certain
        sales levels are achieved.  During 2002,  560,000 shares of common stock
        were returned to the Company for work not completed by NBA.


8.      SUBSEQUENT EVENTS

        In  2003  The  Board  of  Directors  of  the  Company  elected  and  the
        stockholders  voted to amend the  Certificate  of  Incorporation  of the
        Company to change authorized  number of shares from 250,000,000  million
        shares  of Common  Stock and  5,000,000  shares  of  preferred  stock to
        600,000,000  million  shares of Common  Stock and  10,000,000  shares of
        preferred stock (the "Authorization  Change");  by means of an amendment
        to the Company's  Certificate of  Incorporation.  The Board of Directors
        determined that it was in the best interests of the Company to make this
        change at this time,  due to the fact that the Company has issued almost
        the  entire   authorized  amount  permitted  under  the  Certificate  of
        Incorporation.  This would  limit the  ability  of the  Company to issue
        shares to raise  capital,  pay for various  services  and other  related
        activities.


                                      17


<PAGE>