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

         [ ] 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).....$13,250.00

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant at April 17, 2001,  was  $3,759,553.00.  As at December 31, 2000, the
number of shares issued and  outstanding was  135,592,198.  The bid price of the
common stock at that date was $0.47.


                                       1

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.

                               Form 10-KSB - Index

                   For the Fiscal Year Ended December 31, 2000

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             4
Item 7.     Consolidated Financial Statements and
                     Supplementary Data                                        5
Item 8.     Changes in and Disagreements with Accountants
                     on Accounting and Financial Disclosures                   5

PART III

Item 9.     Directors and Executive Officers of the Registrant                 6
Item 10.    Executive Compensation                                             7
Item 11.    Security Ownership of Certain Beneficial Owners
                     and Management                                            8
Item 12     Certain Relationships and Related Transactions                     9


Part IV

Item 13.    Exhibits, Consolidated Financial Statements,
                     Schedules and Reports on Form 8-K                         9

Signatures                                                                    10





                                       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.  None
of these shares were isssued  during the year 2000.  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.

         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.


                                       3
<PAGE>

Item 3.           Legal Proceedings

         The Company is not party to any legal  proceedings.  There are no known
threatened actions against the Company.


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 2000.


                                    PART II


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

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

         The Company,  at December 31, 2000, had  135,592,198  shares issued and
outstanding.  During  the  fourth  quarter  of 2000,  the price of the shares of
Common Stock of the Company reached the following high and low for each month.

           Oct.       Nov.       Dec.      Jan.        Feb.       March

High       $.13       .12        .08       .08         .06        .065
Low         .066      .059       .03       .038        .04        .035


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.


                                       4
<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.  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 materialized and
the Company has run out of capital.

         As of the  beginning of August 2000 we did not have any cash on hand or
accounts receivable.  The Company's two employees have deferred payment of their
salaries  for the past eight  weeks.  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.

         In addition,  upon the securing of funds, the Company intends to market
its new products, obtained in February, 2000, obtained from Dr. Bielory.

         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.


Item 7.           Consolidated Financial Statements and Supplementary Data

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


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

         None


                                       5
<PAGE>

                                    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              38          President and Director

Dr. Leonard Bielory          46          Chairman and Scientific Director

         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.

         Leonard Bielory, M.D. serves as Chairman and Scientific Director of the
Company  since March 15,  2000.  Dr.  Bielory is  presently  the Director of the
Division of Allergy,  Immunology  and  Rheumatology  and is the  Director of the
Division of Asthma and Allergy at the New Jersey Medical School where he is also
an Associate  Professor of Medicine,  Pediatrics and Ophthalmology.  Dr. Bielory
serves as the Chairman of the Board and  President of the  University  Physician
Associates  -- the New Jersey  Medical  School  Faculty  Practice.  Dr.  Bielory
currently serves as a consultant on allergy and immunology to Newark Beth Israel
Hospital, Newark, NJ, and to Saint Barnabas Medical Center, Livingston, NJ.

         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 two executive  officers,
David  Lieberman  and Dr.  Leonard  Bielory are also  directors  of the Company.
Information  with  regard to such  persons is set forth  above under the heading
"Nominees." On April 7, 2000,  Mr. Barry Clare  resigned as the Company's  Chief
Operating Officer. He remains an employee 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.


                                       6
<PAGE>

Item 10.          Executive Compensation

         The  Employment  Agreement  with Mr. David  Lieberman as the  Company's
president expires in June 2002. The employment agreement provides 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
will pay 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.

         Dr. Leonard Bielory is employed to serve as our Chairman and Scientific
Director.  Pursuant to the terms of this agreement,  we pay to Dr. Bielory, on a
monthly basis, the $126,000 that we owe to him for accrued consulting fees. This
agreement  is for a period  of two  years  and we will pay Dr.  Bielory  monthly
compensation  consisting of $500 per month, with an extra payment dependant upon
our net profits.  In addition,  the 1999 agreement granted Dr. Bielory an option
to purchase  12,000,000  shares for his  products  that he sold to the  Company,
which he has exercised,  plus another option to purchase  6,000,000  shares once
the product is marketed,  for a total of 18,000,000.  Dr. Bielory  exercised his
option to purchase the 12,000,000  shares in or about November 2000,  which were
delivered in April, 2001. We have also granted Dr. Bielory a five-year option to
purchase  750,000  shares of our common stock at an exercise price of $.4375 and
upon signing of his employment  agreement we agreed to issue 225,000  restricted
shares of our common stock to him in the year 2000.

TABLE
                                                    OTHER ANNUAL
NAME AND PRINCIPAL POSITION  YEAR    SALARY ($)    COMPENSATION($)  OPTIONS(#)
---------------------------  ----  --------------  ---------------  ----------
David Lieberman              2000  $135,000(1)
    Chief Executive Officer  1999  $135,000(2)        $30,000(3)    750,000(3)
                             1998  $135,000(4)(5)        --            --
---------------

(1)      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.
(2)      Of the $135,000 owed to Mr.  Lieberman as salary for 1999,  $19,000 was
         paid to him and the remaining  $116,000 has accrued to him, but has not
         yet been paid.
(3)      The market value of the  Company's  Common Stock at the time the option
         was granted to Mr.  Lieberman  was $.05 per share,  resulting  in Other
         Annual Compensation to Mr. Lieberman of $30,000.
(4)      During 1999, the Company issued to Mr. Lieberman  17,000,000  shares of
         its Common  Stock,  valued in the  aggregate at  $170,000,  or $.01 per
         share.  Such issuance was  reimbursement  to Mr. Lieberman for $67,500,
         $80,000 and $22,500 of salary  accrued to Mr.  Lieberman  for  services
         rendered by him as the Company's  President during 1996, 1997 and 1998,
         respectively, but yet unpaid.
(5)      Of the $135,000 owed to C.J.  Lieberman as salary for this period,  (a)
         $50,000 was paid to Mr.  Lieberman in the form of an issuance to him of
         800,000 shares of Common Stock valued at the time of issuance at $.0625
         per share, and (b) $22,500 was paid to C.J. Lieberman in the form of an
         issuance to him of a portion of the  17,000,000  shares  issued to C.J.
         Lieberman  as  discussed  in Note 3, above.  The  remaining  $62,500 of
         salary due C.J.  Lieberman  has  accrued  to him,  but has not yet been
         paid.


                                       7
<PAGE>

         The Company has a consulting Agreement with C.J. Leiberman. 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.


Name of Beneficial                  Amount and Nature           Percent of Class
Owner(3)                     of Beneficial Ownership Common(1)  Common (5)
--------------------------   ---------------------------------  ----------------
David Lieberman                     22,670,000(2)                    16.72%
37 Harotem Street
Ashdod, Israel 77572

Dr. Leonard Bielory                 12,260,000(3)                     9.04%
400 Mountain Avenue
Springfield, NJ 07081

Ezriel Silberberg                   11,686,667                        8.61%
c/o Justman
4614 Tenth Avenue
Brooklyn, New York  11219

Officers and Directors and
other 5% owners
as a group (3 persons)              46,616,667(2)(3)                 34.38%

---------------
(1)      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.
(2)      Does not include (i) 1,950,000 shares which Mr. Lieberman has the right
         to acquire upon exercise of stock options;  (ii)  12,000,000  shares to
         which  Mr.  Lieberman's  brother,  C.J.  Lieberman,  was  to be  issued
         pursuant  to an Asset  Purchase  Agreement,  dated June 10,  1999,  and
         authorized by the Board of Directors on September 6, 2000,  but to this
         date has not  been  issued;  and  (iii)  1,050,000  shares  which  C.J.
         Lieberman  has the right to acquire upon the exercise of stock  options
         issued to him as partial  consideration for his acting as President of,
         and a consultant to, the Company.
(3)      Does not include the options to  purchase  6,000,000  shares  which Dr.
         Bielory has the right to acquire upon the exercise of options granted.


                                       8
<PAGE>

Item 12           Certain Relationships and Related Transactions

         Pursuant  to the  Purchase  Agreement  between  the  Company  and  C.J.
Leiberman from 1999,  the 5,000,000  shares due under said agreement were issued
in 2000.


                                    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.

                       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)



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

(b)     Reports on Form 8-K

None


                                       9
<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 23, 2001   By: /s/ David Lieberman
                                    ----------------------------
                                    David Lieberman
                                    President

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 23, 2001   By: /s/ David Lieberman
                                    ----------------------------
                                    David Lieberman
                                    President

         Date: April 23, 2001   By: /s/ David Lieberman
                                    ----------------------------
                                    David Lieberman
                                    Director

         Date: April 23, 2001   By: /s/ Dr. Leonard Bielory
                                    ----------------------------
                                    Dr. Leonard Bielory,
                                    Chairman of the Board of Directors




                                       10
<PAGE>


                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------

                              FINANCIAL STATEMENTS
                              --------------------

                               FOR THE YEARS ENDED
                               -------------------

                           DECEMBER 31, 2000 AND 1999
                           --------------------------


<PAGE>


                                Table of Contents
                                -----------------
                                                                         Page
                                                                         ----
Independent Auditor's Report .............................                F-2

Balance Sheet ............................................                F-3

Statements of Operations .................................                F-4

Statements of Cash Flows .................................                F-5

Statements of Shareholders' Equity (Deficit) .............                F-6

Notes to the Financial Statements ........................            F-7 - F-16










                                      F-1

<PAGE>

                             Michael C. Finkelstein
                           Certified Public Accountant

704 Ginesi Drive - Suite 23                          1370 Avenue of the Americas
Morganville, New Jersey 07751                        New York, New York 10019
Tel. (732) 972-2700                                  Tel. (212) 689-4633
Fax. (732) 972-5001                                  Fax. (212) 664-1700


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Advanced Plant Pharmaceuticals, Inc.

We  have   audited   the   accompanying   balance   sheet  of   Advanced   Plant
Pharmaceuticals,  Inc. (the  "Company") as of December 31, 2000, and the related
statements of operations,  shareholders' equity and cash flows for the two years
then ended.  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.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 respects, the financial position of Advanced Plant Pharmaceuticals,  Inc. as
of December  31, 2000 and 1999,  and the results of their  operations  and their
cash flows for each of the two years then ended,  in conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has suffered recurring losses from operations
and has negative working capital that raises substantial doubt about the ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 2. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.







Michael C. Finkelstein & Co., CPA
Morganville, New Jersey
April 17, 2001

                                        F-2

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                                  BALANCE SHEET
                                  -------------
                             AS OF DECEMBER 31, 2000
                             -----------------------





                                     ASSETS

Current assets:

  Cash and cash equivalents                                  $      --

                                                             -----------
     Total current assets                                           --

Other assets                                                       9,301

                                                             -----------
                                                             $     9,301
                                                             ===========


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

  Accounts Payable                                           $   170,388
  Accrued expenses payable                                     2,512,557
  Loans payable                                                  581,495
  Due to distributor                                             103,500
                                                             -----------
     Total current liabilities                                 3,367,940
                                                             -----------


Shareholders' Equity:

  Common stock, $.0007 par value, 250,000,000
   shares authorized and 135,592,198 shares issued                94,915
  Capital in excess of par value                               6,508,623
  Accumulated deficit                                         (9,962,177)
                                                             -----------
     Total shareholders' equity                               (3,358,639)
                                                             -----------

                                                             $     9,301
                                                             ===========




                 See accompanying notes to financial statements.
                                       F-3

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                            STATEMENTS OF OPERATIONS
                            ------------------------
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                 ----------------------------------------------



                                                  2000           1999
                                              -----------    -----------

Net Sales                                     $    13,250    $     7,695

Cost of goods sold                                 69,688         25,770
                                              -----------    -----------
     Gross profit                                 (56,438)       (18,075)
                                              -----------    -----------

Operating expenses:

   Research and development                     2,615,630         31,222
   General and administrative                   2,106,038        804,033
                                              -----------    -----------
     Total operating expenses                   4,721,668        835,255
                                              -----------    -----------
       Operating loss                          (4,778,106)      (853,330)

Other expense (income)                                628          2,440
                                              -----------    -----------
     Loss before provision for income taxes    (4,778,734)      (855,770)

Provision for income taxes                           --             --
                                              -----------    -----------
     Net loss                                 $(4,778,734)   $  (855,770)
                                              ===========    ===========


Basic Loss per common share                   $     (0.04)   $     (0.01)
                                              ===========    ===========





                 See accompanying notes to financial statements.
                                       F-4

<PAGE>
<TABLE>
<CAPTION>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------
                      FOR THE YEARS ENDED 31, 2000 AND 1999
                      -------------------------------------



                                                              2000           1999
                                                          -----------    -----------
<S>                                                       <C>            <C>
Cash Flows from Operating Activites:
  Net Loss from operations                                $(4,778,734)   $  (855,770)
  Adjustments to reconcile net loss from
   operations to net cash used by operating activities:
     Depreciation and amortization expense                        927            635
     Compensation expense attributed to stock options       1,079,880         97,500
     Services paid with common stock                        1,241,999        365,799
     Decrease in prepaid expenses                                --           12,153
     Increase (decrease) in accounts payable                   80,303        (64,203)
     Increase in accrued expenses                           1,666,460         38,942
     Change in certain other assets and liabilities            (1,000)          --
                                                          -----------    -----------
     Net cash used by operations                             (710,165)      (404,944)
                                                          -----------    -----------
Cash Flows from Investing Activities:                            --             --
                                                          -----------    -----------

Cash Flows from Financing Activities:
  Proceeds from short-term loans payable                      722,439        150,019
  Payments on short-term loans payable                        (25,000)        (2,547)
  Net proceeds from issuance of common stock                     --          266,000
                                                          -----------    -----------
     Net cash provided by financing activities                697,439        413,472
                                                          -----------    -----------
Net increase in Cash and cash equivalents                     (12,726)         8,528

Cash and cash equivalents at beginning of period               12,726          4,198
                                                          -----------    -----------
Cash and cash equivalents at end of period                $      --      $    12,726
                                                          ===========    ===========

Supplemental Cash Flow Information:
  Cash Paid During the Period for:
     Interest                                                    --             --
                                                          ===========    ===========
     Income Taxes                                                --             --
                                                          ===========    ===========

  Information about Noncash Activities:
     Common stock issued to satisfy loans payable         $   275,000    $    51,600
                                                          ===========    ===========
     Common stock issued for services                     $ 1,241,999    $   365,799
                                                          ===========    ===========

</TABLE>


                 See accompanying notes to financial statements.
                                       F-5

<PAGE>
<TABLE>
<CAPTION>

                         ADVANCED PLANT PHARMACEUTICALS
                         ------------------------------
                   STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                   -------------------------------------------
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                 ----------------------------------------------




                                                         Common Stock               Capital
                                                   Number of                     in excess of     Accumulated      Treasury
                                                    Shares         Par Value       Par Value        Deficit          Stock
                                                 ------------    ------------    ------------    ------------    ------------
<S>                                              <C>             <C>             <C>             <C>             <C>

Balance at December 31, 1998                       54,646,675          38,253       3,187,687      (4,327,673)           (180)

    Issuance of common stock                       53,852,831          37,697         690,702
    Stock options granted below market                                                 97,500
    Net loss for period                                                                              (855,770)
                                                 ------------    ------------    ------------    ------------    ------------
Balance at December 31, 1999                      108,499,506          75,950       3,975,889      (5,183,443)           (180)

    Issuance of common stock                       27,070,417          18,949       1,498,050
    Stock options granted below market                                              1,079,880
    Stock subscriptions receivable written-off                                        (45,000)
    Cancellation of treasury stock                       (500)                           (180)                            180
    Conversion of old class shares to new              22,775              16             (16)
    Net loss for period                                                                            (4,778,734)
                                                 ------------    ------------    ------------    ------------    ------------
Balance at December 31, 2000                      135,592,198          94,915       6,508,623      (9,962,177)           --
                                                 ============    ============    ============    ============    ============

                                                     Stock
                                                 Subscriptions
                                                  Receivable         Total
                                                 ------------    ------------


Balance at December 31, 1998                             --        (1,101,913)

    Issuance of common stock                          (45,000)        683,399
    Stock options granted below market                                 97,500
    Net loss for period                                              (855,770)
                                                 ------------    ------------
Balance at December 31, 1999                          (45,000)     (1,176,784)

    Issuance of common stock                                        1,516,999
    Stock options granted below market                              1,079,880
    Stock subscriptions receivable written-off         45,000            --
    Cancellation of treasury stock                                       --
    Conversion of old class shares to new                                --
    Net loss for period                                            (4,778,734)
                                                 ------------    ------------
Balance at December 31, 2000                             --        (3,358,639)
                                                 ============    ============

</TABLE>

                 See accompanying notes to financial statements.
                                       F-6

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------

NOTE 1   NATURE OF OPERATIONS
         --------------------

     Advanced Plant  Pharmaceuticals,  Inc. ("the Company" or "APPI") focuses on
     the  research  and  development  of plant based  dietary  supplements.  The
     Company  owns the  rights to a  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.

     The Company expects, in the near term, to finance these efforts through the
     sale of its common  stock  until such time,  if ever,  that the  operations
     achieve a positive cash flow.  There is no guarantee  that the Company will
     accomplish this goal. See Note 8, "Financial Results and Liquidity."

NOTE 2   GOING CONCERN
         -------------

     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.  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.  To accomplish this  objective,  the Company will
     require  working  capital  to satisfy  current  operating  expenses  and to
     produce  inventory  until such time, if ever, that the revenue cycle begins
     generating  cash.  The  Company's  past  attempts to establish a market for
     their products has so far been  unsuccessful and resulted in minimal sales.
     There is no assurance  that future  efforts will result in a more favorable
     outcome.

NOTE 3   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

     Cash Equivalents
     ----------------

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid debt instruments purchased with a maturity of three months or
     less to be cash equivalents.

     Other Assets
     ------------

     Other assets consist of patents  ($4,449),  security  deposits  ($4144) and
     computer equipment ($708).

     Patents are amortized on a  straight-line  method over their economic lives
     and are  reviewed  for  impairment  whenever  the facts  and  circumstances
     indicate that the carrying amount may not be recoverable.

     Computer  equipment  is  depreciated  on a  straight-line  method  using an
     estimated useful life of three years.


                                       F-7

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------

NOTE 3
(Continued)

     Research & Development Costs
     ----------------------------

     Research and development costs are expensed as incurred.

     Income Taxes
     ------------

     APPI has  incurred  significant  losses  from  operations.  The Company has
     elected not to record any tax benefits  relating to potential net operating
     loss carryforwards due to the uncertainty of realizing those benefits.

     The Company intends to follow Statement of Financial  Accounting  Standards
     No. 109 (SFAS 109),  "Accounting  for Income Taxes" when either  operations
     achieve profitability or the realization of net operating loss benefits can
     more readily be measured, whichever comes first.

     Earnings per Share
     ------------------

     Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
     Share"  discusses the  computation  and  presentation of earnings per share
     ("EPS").  Basic EPS,  as defined by SFAS No.  128,  is computed by dividing
     income available to common shareholders by the  weighted-average  number of
     common shares outstanding for the reporting period,  ignoring any potential
     effects of dilution. Diluted EPS reflects the potential dilution that would
     occur  if  securities,  or other  contracts  to issue  common  stock,  were
     exercised or  converted  into common stock that then shared in the earnings
     of the entity.

     There were 17,500,000 and 5,500,000 common stock options  outstanding as of
     December 31, 2000 and 1999 respectively. As a result of the losses reported
     in  the  periods   presented   these  options,   if  exercised,   would  be
     antidilutive.  Accordingly,  only Basic EPS is presented in these financial
     statements.  The weighted-average  number of shares used in the computation
     of per share data was 111,939,686 in 2000 and 92,577,304 in 1999.

     Stock-Based Compensation
     ------------------------

     APPI has satisfied various loans, trade payables,  employee  back-wages and
     other  liabilities  through  the issue of its  common  stock.  The  Company
     accounts for such stock-based  compensation  using the fair-value method as
     prescribed by SFAS No. 123, "Accounting for Stock-Based  Compensation." The
     Company has also issued  stock  options to key  employees.  As  permissible
     under SFAS No.  123,  the  Company  accounts  for stock  options  using the
     intrinsic  value method as prescribed  under  Accounting  Principles  Board
     Opinion No. 25 ("APB No. 25"). All disclosures required by SFAS No. 123 are
     presented in Note 4 "Stock Options."

                                       F-8

<PAGE>


                      ADVANCED PLANT PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 3
(Continued)

     Use of Estimates
     ----------------

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions. These estimates and assumptions affect the reported amounts of
     assets and  liabilities,  the disclosure of contingent  liabilities and the
     reported amounts of revenues and expenses. Actual results could differ from
     these estimates.

NOTE 4   RELATED-PARTIES TRANSACTIONS
         ----------------------------

     On July 16, 1999, the Company entered into a Technology  Purchase Agreement
     with C.J.  Lieberman (brother of the current President) whereby 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 herbal dietary supplements.  The purchase price for the process
     includes  18,000,000  shares of the Company's  common stock issuable in two
     phases.  As of December  2000,  none of the stock related to this agreement
     has been issued. The Company accrued $1,440,000, in anticipation of issuing
     12 million shares that became due in 2000 per the  agreement.  This amount,
     which  represents  the fair  market  value of the stock  when it became due
     under the  agreement,  is included in "Research and  development"  costs in
     2000 and "Accrued expenses payable" at December 31, 2000.

     In addition,  the Company agrees to pay to C.J. Lieberman a royalty payment
     of $.01 per bottle  with  respect  to each  product  manufactured  with the
     process,  1% (one percent) of the Company's  suggested retail price of each
     product  manufactured  with  the  process  and  10%  (ten  percent)  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,  which
     agreement  unconditionally  provides for payment to the Company of not less
     than  $20,000,000 upon receipt by the Company of such $20,000,000 from such
     third party, the Company shall issue to C.J.  Lieberman five million shares
     for each $20,000,000 paid to the Company, not to exceed twenty five million
     shares.

     During 2000,  the Company  issued  5,000,000  shares of its common stock to
     C.J.  Lieberman  as  payment  of accrued  salary  payable of  approximately
     $250,000 that was still  outstanding  since his resignation as President in
     1996.

     Upon his  resignation  as  President  in 1996,  the Company  retained  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.

                                       F-9

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------

NOTE 4
(Continued)

     The  employment  contract  period is through June 10, 2002. At December 31,
     2000, the Company had an outstanding  balance of unpaid consulting fees due
     C.J.  Lieberman  of $250,124  relating to this  consulting  contract.  This
     balance is included in "Accrued expenses payable" at December 31, 2000.

     Due to the absence of revenues,  cash flow has been unpredictable and often
     non-existent.  As a result, C.J Lieberman frequently lent the Company funds
     or directly paid expenses on behalf of the Company. These transactions were
     accounted for in a loan account.  When funds were available,  Mr. Lieberman
     would take advances against this loan account.  As of December 31, 2000 the
     loan account had a balance  payable to Mr.  Lieberman of $10,959,  which is
     included in "Loans Payable" at December 31, 2000.

     The President,  David  Lieberman,  has also lent the Company funds, or paid
     expenses  on behalf of the  Company.  The balance  owed to David  Lieberman
     relating to these  transactions  was  $22,783 at  December  31, 2000 and is
     included in "Loans payable" on the balance sheet. The Company also owed the
     President unpaid salary of $299,500 at December 31, 2000, which is included
     in "Accrued expenses payable".

     On February 28, 2000 the Company  entered into an Asset Purchase  Agreement
     with Dr.  Leonard  Bielory  (Chairman  of the Board of  Directors  of APPI)
     whereby the company  acquired the exclusive  rights and interest to allergy
     and sinus formulations  ("Assets").  The purchase price includes options to
     purchase  18,000,000  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 required  options to purchase 12
     million  shares were  issued  during the fourth  quarter of 2000.  The fair
     value of the 12 million  share  options was  $1,079,880  and is included in
     "Research  and   development"   expense  in  the  2000  income   statement.
     Additionally,  the Company agrees to pay Dr.  Bielory a royalty  payment of
     $.01 per  bottle  with  respect  to each  product  manufactured  with these
     Assets, 1% (one percent) of the suggested retail price of each product sold
     that  was  manufactured  with  the  Assets  and 10%  (ten  percent)  of the
     company's  net  profits  before  taxes from such  sales (net  profits to be
     determined  by  the  Company's   regularly   retained   independent  public
     accountants using generally accepted accounting  principles).  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 $20,000,000,  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  $20,000,000
     required  to be paid to the  Company,  not to exceed  twenty  five  million
     shares.





                                      F-10

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------

NOTE 4
(Continued)

     On March 15, 2000 the company entered into a two-year employment  agreement
     with Dr.  Leonard  Bielory  whereby Dr. Bielory will serve as the Company's
     Scientific  Director and its Chairman of the Board of Directors.  Under the
     terms of the agreement, the Company is required to pay Dr. Bielory wages of
     $500 per month  for the  first  twelve  months  and up to $2,500  per month
     thereafter,  contingent  on the  Company  achieving  specified  net  profit
     levels.  Commencing  on March 15, 2000 and each January 1  thereafter,  Dr.
     Bielory is to receive  options to purchase  750,000 shares of the Company's
     common  stock  as  additional  compensation  under  this  agreement.  As of
     December 31, 2000, none of the stock options  required under this agreement
     have  been  issued.  On  April  10,  2000,  Dr.  Bielory  received  225,000
     restricted  shares of the Company's  common stock as a signing  bonus.  The
     stock had an aggregate fair market value of $96,749 on the day of issue.

NOTE 5   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.

     During 2000,  the Company issued  27,070,417  shares of its common stock to
     satisfy various liabilities of the Company as follows:

Number of Shares     Fair Value           Description
----------------     ----------           -----------

                                    Payment of accrued salary
                                    payable to CJ Lieberman
                                    from prior years for his
                                    past service as President
      5,000,000     $  250,000      past service as President.

                                    Signing bonus payable to Dr. Leonard Bielory
        225,000     $   96,749      pursuant to his contract.

      6,000,000     $  180,000      Payment of employee bonus to Barry Clare.

                                    Payment of various consulting fees and other
      2,178,750     $  715,250      Operating expenses.

     13,666,667     $  275,000      Payment for various loans.


                                       F-11

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------

NOTE 6   STOCK OPTIONS
         -------------

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

     On June 10, 1999 the Company  entered into new employment  agreements  with
     the President and two  employees and a new  consulting  contract with a key
     consultant. Pursuant to these agreements, the Company granted each of these
     individuals  options to purchase  750,000  shares of the  Company's  common
     stock.  These  options,  which  expire on June 10,  2004,  have a  weighted
     average  exercise  price of  approximately  $.02,  which was below the then
     current  market  price for the stock.  The  Company  recorded  compensation
     expense  of  $97,500  in 1999 to  recognize  the  intrinsic  value of these
     options as defined in APB No. 25.

     During  June  1999,  the  Company  agreed  to cancel a prior  stock  option
     agreement, that granted 400,000 options to an employee in 1997, and replace
     it with a new option agreement.  Pursuant to the new option agreement,  the
     Company replaced the 400,000  cancelled  options with 1,000,000  options to
     purchase common stock at $.05 per share. The new options expire on June 30,
     2002. There was no compensation costs attributed to these options since the
     exercise price equaled the market price as of the grant date.

     The weighted average fair value of all options granted in 1999 was $.05 per
     option share. The fair value of options granted in 1999 was estimated using
     the  Black-Scholes  option  pricing model with the  following  assumptions:
     risk-free  interest  rate of  5.61%,  expected  option  life of 4.4  years,
     expected dividend yield of zero and expected volatility of 160.86%.

     During  October 2000,  the Company  granted  options to purchase 12 million
     shares of the Company's  common stock to Dr. Leonard Bielory as required by
     the Asset Purchase agreement.  These options, which expire in October 2005,
     have an  exercise  price of  $.00001  per  share,  which was below the then
     current  fair  market  value  of  $.09  per  share.  The  Company  recorded
     compensation expense of $1,079,880 in 2000 to recognize the intrinsic value
     of these options as defined in APB No. 25.

     The fair  value of the  options  granted  in 2000 was  estimated  using the
     Black-Scholes   option  pricing  model  with  the  following   assumptions:
     risk-free  interest rate of 6%, expected option life of 4 months,  expected
     dividend yield of zero and expected volatility of 146.89%.

     Had  compensation  expense  been  recognized  using the fair  value  method
     prescribed  in SFAS No. 123, the  Company's net loss in 2000 would not have
     been affected.  The net loss in 1999 would have  increased by $52,599.  The
     effect on net loss per share would have been negligible in both years.





                                      F-12

<PAGE>
<TABLE>
<CAPTION>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------

NOTE 6   STOCK OPTIONS
         -------------
(Continued)

     The following table summarizes stock option activity for 2000 and 1999:

                                                   Weighted                  Weighted
                                                   average                   average
                                                   exercise     Options      exercise
                                        Options     price     exercisable     price
                                      ----------   -------    ----------    ---------
<S>                                   <C>          <C>        <C>           <C>
    Balance at December 31, 1998       1,900,000      $.09     1,800,000         $.09
         Granted                       4,000,000       .03             -            -
         Exercised                             -         -             -            -
         Cancelled                     (400,000)       .25             -            -
                                      ----------   -------    ----------    ---------
                                                                       -

    Balance at December 31, 1999       5,500,000      $.03     5,500,000         $.03
         Granted                      12,000,000    .00001             -            -
         Exercised                             -         -             -            -
         Cancelled                                     .25             -            -
                                      ----------   -------    ----------    ---------

    Balance at December 31, 2000      17,500,000      $.01    17,500,000         $.01
                                      ==========   =======    ==========    =========

</TABLE>

As of December 31, 2000, there were 17,500,000 common stock options outstanding
with a weighted-average remaining life of 4.5 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.

NOTE 7   ACCRUED EXPENSES PAYABLE

     Accrued expenses payable at December 31, 2000 consist of the following:

         Asset Purchase Agreement (Note 4)                    $1,440,000
         Obligations under consulting agreements                 356,424
         Salaries and payroll taxes payable                      402,286
         Accrued bonuses payable                                 240,000
         Legal and accounting fees                                22,500
         Other expenses                                           51,347
                                                              ----------
                  Total Accrued Expenses payable              $2,512,557
                                                              ==========

NOTE 8   LOANS PAYABLE

     Loans Payable consists of unsecured,  non-interest bearing short-term loans
     typically of less than three months duration.  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.

                                       F-13

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------


NOTE 9   COMMITMENTS AND CONTINGENCIES
         -----------------------------

     The Company has employment  agreements with four employees and a consulting
     contract with a key  consultant to the Company.  At December 31, 2000,  the
     Company  was  committed  under  these  agreements  to  wages  and  fees  of
     approximately $399,000 for 2001 and approximately $176,000 in 2002.

     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, 2000,
     this contract has not been exercised or terminated.

NOTE 10  DUE TO DISTRIBUTOR
         ------------------

     In 1995, the Company  entered into a distribution  agreement with a foreign
     distributor in anticipation of bringing a product to market.  The agreement
     required an advance payment for product by the distributor. The Company was
     unable to  produce  the  anticipated  product  and in 1997  entered  into a
     settlement  agreement  with the  distributor  calling for eighteen  monthly
     installment  payments of $5,750 and 60,000 shares of the  Company's  common
     stock to be issued to the distributor. As of December 31, 2000, the Company
     has  neither  issued  the  common  stock  nor made  any of the  installment
     payments as required by the settlement  agreement.  The Company has elected
     not to accrue any liability  for the 60,000  shares of common stock,  which
     had a fair market value of approximately $2,815 at December 31 2000.






                                       F-14

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------


NOTE 11  FINANCIAL RESULTS AND LIQUIDITY
         -------------------------------

     As of  December  31,  2000,  the Company  had no cash  balances.  Since its
     inception,  the Company has had  significant  operating  losses and working
     capital deficits.  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.  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, if ever,
     that the revenue cycle begins generating cash.

     To market and generate sales of its products,  the Company has entered into
     various  distribution  agreements  over the years.  As of December 31 2000,
     none of the  distribution  agreements  has  resulted  in any  sales for the
     Company. The impact of any current or future distribution agreements on the
     Company's cash flow is uncertain. There is no guarantee that cash generated
     from new product sales will occur, or be sufficient to fund operating costs
     which  can  be  expected  to  increase  as  the  Company   "ramps  up"  for
     manufacturing and distribution activities.  There also is no assurance that
     the Company will continue to be able to finance operations through the sale
     of its  common  stock,  the  exchange  of stock  for  services  or from the
     proceeds of unsecured loans with private lenders.

NOTE 12  SUBSEQUENT EVENTS
         -----------------

     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.

     On February 28, 2001,  the Company  entered into a loan  agreement with Sam
     Berkowitz, an employee and shareholder of the Company. The agreement is for
     a maximum loan amount of $100,000 and is due on June 30, 2001.  As of April
     12,  2001 the  company  has  borrowed  $56,000  on this  loan.  The loan is
     interest free and includes the option to be paid in Company  stock.  If the
     loan is paid in Company  stock,  the stock  conversion  price is $.0165 per
     share.



                                      F-15

<PAGE>

                      ADVANCED PLANT PHARMACEUTICALS, INC.
                      ------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 2000 AND 1999
                           --------------------------


NOTE 12  SUBSEQUENT EVENTS
         -----------------
(Continued)

     On March 16,  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
     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.

     In addition to the shares that may potentially be issued for the agreements
     previously   discussed,   the  Company  is  currently  considering  issuing
     approximately  8,730,000 shares of common stock to pay off various payables
     existing at December 31, 2000 and incurred in the  subsequent  2001 period.
     The fair market value of these shares at December 31, 2000 is approximately
     $409,000.

     None of the shares  relating  to these  subsequent  events has been used to
     calculate earnings per share data since they would be antidilutive.











                                      F-16