SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

             [X] Quarterly report pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                 For the quarterly period ended October 31, 1999

       [ ] Transition report under Section 13 or 15(d) of the Exchange Act

                         Commission file number 0-25659

                           VIRILITEC INDUSTRIES, INC.
        (Exact name of small business issuer as specified in its charter)

                                    Delaware
                         (State or other jurisdiction of
                         incorporation or organization)

                                   11-3447894
                        (IRS Employer Identification No.)

 100 Cedarhurst Avenue, Suite 201, Cedarhurst, New York               11516
(Address of principal executive offices)                            (Zip Code)


                            (800) 775-0712 ext. 4144
                           (Issuer's telephone number)


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,  and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X]  No [  ]

As of December 31, 1999, the Registrant had 4,702,100 shares of its Common Stock
outstanding.

Transitional Small Business Disclosure Format:    Yes  [  ]   No [X]

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements.


                            VIRILITEC INDUSTRIES INC.

                          (A DEVELOPMENT STAGE COMPANY)

                          100 CEDARHURST AVE. SUITE 201

                           CEDARHURST, NEW YORK 11516


                              FINANCIAL STATEMENTS


                         FOR THE PERIOD AUGUST 11, 1998

                         (INCEPTION) TO OCTOBER 31, 1999

<PAGE>

                               ACCOUNTANT'S REPORT



Virilitec Industries Inc.
100 Cedarhurst ave. Suite 201
Cedarhurst, NY 11516

I have reviewed the accompanying  balance sheet of Virilitec  Industries Inc. (a
development stage company) as of October 31, 1999 and the related  statements of
operations and accumulated  deficit,  stockholders equity and cash flows for the
three months then ended and the statement of operations and accumulated deficit,
stockholders'  equity and cash flows for the period August 11, 1998  (Inception)
to October 31, 1999, in accordance  with  Statements on Standards for Accounting
and  Review  Services  issued by the  American  Institute  of  Certified  Public
Accountants.  All  information  included in these  financial  statements  is the
representation of the management of Virilitec Industries Inc.

A review consists  principally of inquiries of company  personnel and analytical
procedures  applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, I do not express such an opinion.

Based on my review, I am not aware of any material  modifications that should be
made  to the  accompanying  financial  statements  in  order  for  them to be in
conformity with generally accepted accounting principles.




                                       Joseph Morgenstern
                                       Certified Public Accountant

January 20, 2000


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                OCTOBER 31, 1999


                                     ASSETS

                                                      Subsequent
                                                        Event
                                            Actual    Pro-Forma

Current Assets:
  Cash                                   $     248      $20,248
  Due from officer                           3,240        3,240
                                          --------    ---------

    Total Current Asset                      3,488       23,488
                                          --------    ---------

Equipment, net                               2,100        2,100

License fee                                  8,500        8,500
                                          --------     --------

     Total Assets                        $  14,088    $  34,088
                                          ========     ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:
  Accounts payable and
    accrued expenses                     $   1,670    $   1,670
                                         ---------    ---------

Commitments and other matters

Stockholders' Equity:

Common stock, $.0001 par value;
20,000,000 shares authorized;
4,682,100 shares issued and
outstanding, of which 3,175,000
shares are restricted shares                   469          471

 Additional paid-in capital                212,121      232,119
                                         ---------     --------
                                           212,590      232,590
 Deficit accumulated during the
  development stage                       (200,172)    (200,172)
                                         ----------   ----------

    Total Stockholders' Equity              12,418       32,418
                                         ---------    ---------

      Total Liabilities &
       Stockholders' Equity             $   14,088   $   34,088
                                         =========    =========


See accountant's report.
The accompanying notes are an integral part of these financial statements.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                OCTOBER 31, 1999


                                     ASSETS



Current Assets:
  Cash                                                  $     248
  Due from officer                                          3,240
                                                         --------

    Total Current Asset                                     3,488
                                                         --------

Equipment, net                                              2,100

License fee                                                 8,500
                                                         --------

     Total Assets                                       $  14,088
                                                         ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:
  Accounts payable and
    accrued expenses                                    $   1,670
                                                         ---------

Commitments and other matters

Stockholders' Equity:

Common stock, $.0001 par value;
20,000,000 shares authorized;
4,682,100 shares issued and
outstanding, of which 3,175,000
shares are restricted shares                                 469

 Additional paid-in capital                              212,121
                                                        ---------
                                                         212,590
 Deficit accumulated during the
  development stage                                     (200,172)
                                                       ----------

    Total Stockholders' Equity                            12,418
                                                       ---------

      Total Liabilities &
       Stockholders' Equity                           $   14,088
                                                       =========


See accountant's report.
The accompanying notes are an integral part of these financial statements.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
                             AND ACCUMULATED DEFICIT
                   FOR THE THREE MONTHS ENDED OCTOBER 31, 1999
                    AND FOR THE PERIOD ENDED AUGUST 11, 1998
                         (INCEPTION) TO OCTOBER 31, 1999
                                                Cumulative Amounts
                                                   For the Period
                                   Three          August 11, 1998
                                Months Ended      (Inception) To
                               October 31, 1999   October 31, 1999
                              ------------------ -----------------

Sales                               $   -0-            $   -0-

Costs and expenses:

 Officer's salary                    (10,000)           (48,460)

 Other compensation expense             -0-             (52,500)

 Management fees                        -0-             (38,500)

 Compensation expense of
 international counsel               ( 4,936)           (35,000)

 General and administrative
    expenses                          (5,982)           (11,356)

  Travel                              (6,600)           (12,380)
  Depreciation                        (  300)            (1,500)
  Taxes                                 -0-              (  500)
  Interest income                       -0-                  24
                                    ---------          --------

     Net Loss                       ( 27,818)          (200,172)

Accumulated deficit,
 beginning of period                (172,354)              -0-
                                     --------           ------

Accumulated deficit,
 end of period                     $(200,172)         $(200,172)
                                   ==========         ==========


See accountant's report.
The accompanying notes are an integral part of these financial statements.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                             AND ACCUMULATED DEFICIT
                   FOR THE THREE MONTHS ENDED OCTOBER 31, 1999
                       AND FOR THE PERIOD AUGUST 11, 1998
                         (INCEPTION) TO OCTOBER 31, 1999
                                                         Deficit
                           Common Stock                Accumulated
                         $.0001 Par Value  Additional  During The
                         ----------------  Paid - In   Development
                           Shares  Amount   Capital       Stage

Common stock issued in     3,100,000 $  310  $(  310)
connection with the
formation of the Company

Common stock issued          933,000     93   41,417
Contributed services:
  Officer's salary                            14,615
  Rent                                           750
  Other comp. expenses       525,000     52   52,448
  Compensation of
  international counsel       50,000      5   10,091
Net loss - August 11,1998
through December 31, 1998                              $   (78,783)
                          ---------- ------  -------   ------------
Balance-December 31, 1998  4,608,000    461  119,010       (78,783)
                          ---------- ------ --------   ------------

Common stock issued            4,100           4,400
Contributed services:
  Officer's salary                            16,667
  Rent                                           750
  Management fees             55,000      6   38,494
  Compensation of
   international counsel                      14,135
Stock issuance costs                         (24,440)

Net loss - five months
ended May 31, 1999                                          (79,342)
                           ---------- ------  -------   ------------
Balance - May 31, 1999     4,667,100 $  467  $169,016   $  (158,125)
                          ---------- ------  --------   ------------


Contributed services:
  Officer's salary                             7,178
  Rent                                           300
  Compensation of
   international counsel                       5,833
Stock issuance costs                            (540)

Net loss - two months
ended July 31, 1999                                       (14,729)
                         ---------- ------  -------     ----------
Balance - July 31, 1999   4,667,100 $  467  $181,732    $(172,354)
                         ---------- ------  --------    ----------


See accountant's report.
The accompanying notes are an integral part of these financial statements.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                             AND ACCUMULATED DEFICIT
                   FOR THE THREE MONTHS ENDED OCTOBER 31, 1999
                       AND FOR THE PERIOD AUGUST 11, 1998
                         (INCEPTION) TO OCTOBER 31, 1999

                                                         Deficit
                           Common Stock                Accumulated
                         $.0001 Par Value  Additional  During The
                         ----------------  Paid - In   Development
                           Shares  Amount   Capital       Stage

Balance - July 31, 1999   4,667,100 $  467  $181,732    $(172,354)
                         ---------- ------  --------    ----------

Contributed services:
  Officer's salary                            10,000
  Rent                                           450
  Compensation of
   international counsel                       4,936
Common stock issued         15,000      2     14,998

Net loss - three months
ended October 31, 1999                                    (27,818)
                         ---------- ------  -------     ----------

Balance-October 31, 1999  4,682,100 $  469  $212,121    $(200,172)
                         ========== ======  ========    ==========

See accountant's report.
The accompanying notes are an integral part of these financial statements.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS
                   FOR THE THREE MONTHS ENDED OCTOBER 31, 1999
                       AND FOR THE PERIOD AUGUST 11, 1998
                         (INCEPTION) TO OCTOBER 31, 1999


                                                Cumulative Amounts
                                                 For the Period
                                 Three months    August 11, 1998
                                     Ended       (Inception) To
                                October 31, 1999  October 31, 1999
                               -----------------------------------




Cash Flows From Operating Activities
  Net loss                              $( 27,818       $(200,172)
  Adjustments to reconcile net
   loss to net cash used in operating
   activities:
    Depreciation                               300          1,500
    Contributed services                    15,386        176,710
    Changes in operating assets
     and liabilities:
    Accrued expenses                           400          1,670
    Due from officer                        (3,320)        (3,240)
                                          ---------       --------

     Net cash used in operating
      activities                           (15,052)       (23,532)
                                          ---------      ---------

Cash Flows From Investing Activities
   Capital expenditures                       -0-          (3,600)
   License fee                                -0-          (8,500)
                                           --------       --------

         Net cash used in investing
      activities                              -0-         (12,100)
                                            -------       --------

Cash Flows From Financing Activities
  Stock offering                            15,000         60,910
  Cost of stock offering                      -0-         (25,030)

    Net cash from financing
      activities                            15,000         35,880
                                          ---------      --------

  Net increase (decrease) in cash             ( 52)         ( 248)
  Cash at beginning of period                  300          -0-
                                            -------      ---------
  Cash at end of period                $       248    $       248
                                          =========     ==========


See accountant's report.
The accompanying notes are an integral part of these financial statements.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                OCTOBER 31, 1999

THE COMPANY
Virilitec Industries Inc. (the Company) was incorporated on August 11, 1998 with
total authorized shares of 20,000,000,  par value $.0001. The Company was formed
to  license  and  distribute  a  line  of  bioengineered  virility  supplements.
Initially,  the Company intends to market its product in international  markets,
using independent sales agents.  The Company is in the development stage and its
efforts through October 31, 1999 have been principally devoted to organizational
activities and raising  capital.  Management  anticipates  incurring  additional
losses as it pursues its organizational and development  efforts.  The Company's
initial  stock  offering  was closed on April 6, 1999.  The Company  believed it
raised  sufficient  funds from the offering to finance its  operations.  Company
also believes it will be able to obtain any additional funds required.

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

Depreciation
Equipment,  primarily computers, is depreciated by the straight-line method over
its estimated  useful life.  When property is retired or otherwise  disposed of,
the cost and  accumulated  depreciation  are removed  from the  accounts and any
resulting gain or loss is included in operations.

Amortization
The licensing fee will be amortized on the straight-line  basis over the life of
the  agreement.  All  mandatory  additional  annual  payments will be charged to
operations as they become due.

Stock issuance costs
Stock issuance costs represent expenses related to the Company's offering. These
expenses  include the direct costs of the offering  such as legal,  filing fees,
printing  and  related  consulting  fees.  These  costs were  deducted  from the
proceeds of the offering.

Stock Offering
The  Company's  initial  offering  consisted of up to 460,000 units at $1.00 per
unit. Each unit entitles the holder to one (1) share of common stock, $.0001 par
value and one (1)  redeemable  Class A warrant  entitling the holder to purchase
one (1) share of  restricted  common  stock at an  exercise  price of $10.00 per
share.  The Company is currently  conducting  a second  stock  offering of up to
100,000 shares at $1.00 per share. As of the date of these financial statements,
15,000 shares have been sold.


<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                OCTOBER 31, 1999

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
-------------------------------------------

The  Company  has  issued an  aggregate  of  525,000  shares of stock to certain
officers  and  directors  in exchange  for present  and  anticipated  management
services.  The stock has been recorded at its  estimated  fair value of $.10 per
share. The Company later issued an aggregate of 105,000 shares to consultants in
exchange for services.  The stock has been recorded at its estimated  fair value
of $.70 per share with a corresponding amount as compensation expense.

CAPITALIZATION

The Company currently has 4,682,100 shares of common stock outstanding, of which
management owns 3,675,000.  Included in the 3,675,000  shares owned by directors
and company  management are 3,175,000 shares of restricted  shares as defined in
the Securities Act of 1933 and the regulations thereunder. Management which owns
3,125,000  restricted  shares has  agreed  not to sell any of such  shares for a
period of one year following the final closing of the Stock Offering referred to
above.

OPTIONS

The Company has granted  stock  options to certain  officers  and  directors  to
purchase additional shares of restricted common stock of the Company as follows:
                                                     Exercise
Option Holders                   Number of Options Price (Per Share)
President and Chairman                 175,000             2.50
of Board of Directors
President                              150,000             4.00
Vice President/Director                 25,000             2.00
Vice President/Director                 50,000             3.00
Secretary/Treasurer and Director        25,000             2.50
Secretary/Treasurer and Director        50,000             4.00

Under the terms of the  Company's  licensing  agreement,  the  Company  has also
agreed to grant  stock  options to its  manufacturer  to  purchase  up to 300,00
additional  restricted shares of the common stock of the Company for a period of
five years beginning October 31, 1999 according to the following schedule:
                                                 Exercise
Effective Date              Number of Shares  Price (Per Share)
10/31/1999                       100,000            10.00
03/31/2000                       100,000            10.00
10/31/2000                       100,000            10.00

This  options  shall  become  effective  only in the  event  the  licensing  and
distribution  agreement  between the Company  and the  manufacturer  is still in
effect on the date the options are due to be effective.


<PAGE>



                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                OCTOBER 31, 1999


LICENSING AND DISTRIBUTION AGREEMENT
The  Company  has  entered  into a fifty (50) year  licensing  and  distribution
agreement,  whereby the Company was granted  exclusive  rights to  distribute  a
certain  nutritional  supplement  designed to enhance human male sperm count and
potency.  Under the terms of the  agreement,  the  Company's  independent  sales
agents will place orders  directly with the  manufacturer,  which will fill such
orders. The sales agents will pay the manufacturer upon order placement, and the
manufacturer,  acting as  collections  agent for the  Company,  will forward the
Company's portion of sales proceeds to the Company.  The manufacturer has agreed
to periodic  review of its order receipts in order to ensure that the Company is
receiving its appropriate revenue.

The Company has paid an initial non-refundable one time licensing fee of $8,500.
The Company will also pay an annual  licensing fee of $10,000,  commencing on 90
days after the product is manufactured  and delivered and each year  thereafter,
on the  anniversary of the first payment's due date as long as the licensing and
distribution  agreement has not been terminated  before the date such payment is
due. The Company's  agents are required to pay the  manufacturer  $1.85 for each
unit of the product sold of which the  manufacturer  retains  $1.45 and forwards
$.40 to the  company.  The  parties  have  agreed to certain  minimum  sales and
production  quotas.  If either the company or the manufacturer  fail to meet the
minimum sales and  production  quotas,  either party may terminate the agreement
without penalties.


INCOME TAXES
As of July 31,  1999,  the Company has an operating  loss carry  forward for tax
purposes of approximately $172,000, which expires in 2014. The Company has fully
reserved  the tax  benefit of the  operating  loss  carry  forward  because  the
likelihood of realization of the benefit cannot be established.

COMMITMENTS
The Company maintains its corporate offices rent free at an office of one of its
shareholders at 100 Cedarhurst Ave. Suite 201, Cedarhurst, NY 11516. The Company
has agreed to either  sublet the space it is  currently  using at a cost of $150
monthly, or relocate its office to another location. Management anticipates that
the monthly rental cost of another item should be no more than $500. The company
included rent expense of $150 a month in the General and Administrative expenses
with a corresponding amount in paid in capital.

The  president  of the company  will  receive an annual  salary of $40,000.  The
President has waived  payment,  accordingly;  the pro-rata amount is included in
general  and  administrative  expenses  with a  corresponding  amount in paid in
capital.



<PAGE>

                            VIRILITEC INDUSTRIES INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                OCTOBER 31, 1999


COMMITMENTS (CONTINUED)

On September 18, 1998, the Company  entered into an agreement with an individual
to  perform  the  duties of  international  counsel  for a period of one year in
exchange for 50,000 shares of company stock.  The total fair market value of the
shares and services has been determined to be $35,000; accordingly, the pro-rata
portion  of  this  amount  has  been  charged  to   compensation   expense  with
corresponding  amounts charged to stock and paid-in  capital.  The agreement has
not been renewed.

The Company has also hired an  individual to act as its local agent in the State
of Israel. The agent's duties will include supervising the completion of the new
manufacturing  facility  of  its  supplier,  reviewing  applications  for  local
licenses  and  approvals,  as well as  overseeing  the initial  product runs and
testing for quality control. The agreement will terminate at the later of either
March 31, 2000, or 45 days after the  aforementioned  manufacturing  facility is
operational  and  delivers its first  shipment to the  Company.  The Company has
issued 55,000 shares to the agent as compensation for these services.  The value
of these services has been  determined to be $38,500 and has been recorded as an
expense with corresponding offsets to common stock and paid-in capital.

SUBSEQUENT EVENT

The Company is currently  conducting  a second  stock  offering of up to 100,000
shares at $1.00 per share. Subsequent to the date of these financial statements,
but prior to their issuance, 20,000 additional shares have been sold.

<PAGE>

Item 2.  Plan of Operations.

         The  following  discussion  should  be read  in  conjunction  with  the
financial  statements  and  related  notes  which  are  included  under  Item 1.
Statements  made  below  which  are not  historical  facts  are  forward-looking
statements.   Forward-looking   statements   involve   a  number  of  risks  and
uncertainties  including,  but not  limited  to,  general  economic  conditions,
availability  of our  product,  our ability to market our  product,  competitive
factors and other risk factors as stated in other of our public filings with the
Securities and Exchange Commission.

         The  Company  was  formed  to  license   and   distribute   a  line  of
bioengineered virility nutritional  supplements,  designed to enhance human male
sperm count and potency (the "Product"). The Product is a nutritional supplement
derived from natural  materials  and  compounds.  While the Company  believes it
contains  properties that could stimulate human male sperm production and sexual
virility,  it does not make any claims  whatsoever that the product does in fact
induce the desired results.  The Company has not clinically  tested the product,
nor has it  been  clinically  tested  in a  previous  formulation.  There  is no
statistical data to support any claims of effectiveness and the Company makes no
such clinical claims.

         The Company is currently waiting for the initial production date of the
Product. Until the production facilities of its supplier, Vitahealth Scientific,
Inc.  ("Vitahealth")  are  operational,  the Company  cannot begin to market the
Product  with an  expectation  to be able to deliver  goods  within a reasonable
amount of time.  The Company has been advised by  Vitahealth  that it expects to
begin delivery of the Product during the first quarter of 2000.

         Vitahealth had  originally  planned to lease and construct its facility
based upon commitments  made to Vitahealth by the Company  regarding the initial
licensing  fee and ongoing  support.  Because the  Company's  financing  via its
initial offering did not proceed  according to management's  initial  timetable,
the  Company  could not honor  those  commitments  on a timely  basis.  As such,
Vitahealth  had to  abandon  the  original  site  selected  for  its  production
facility. As it now had a new time window available due to the financing delays,
Vitahealth  decided  to  reformulate  the  Product  and  to try  to  refine  the
production run. When the Company  completed its offering,  the reformulation was
not yet  finished.  Once the  reformulation  was  completed,  Vitahealth  had to
reselect  a site and  negotiate  tenancy  as well as  redesign  and  outfit  the
production facility in the new plant.

         The Company has  interviewed  sales  agents only in Israel and England,
and has  identified  agents it  intends  to retain  as  distributors  as soon as
production  commences.  Because of the delays involved with  commencing  Product
production, the Company was uncertain as to exactly when such agents could begin
the sales process and could not, in good faith,  make  commitments  to potential
distributors.   As  such,   management   has  delayed   interviewing   potential
distributors  in other  countries.  As soon as initial  sales via the Israel and
England  distributors  are  processed,  the  Company  will resume its efforts to
identify and engage additional international distributors.

         The Company intends to allow each master  distributor  exclusive rights
within his/her own country.  Any sales generated in their territory shall be for
the sole benefit of the sales  agents.  When a sales agent becomes a distributor
for the  Company,  they agree to purchase the Product from the Company for $1.85
per capsule,  and the Company's  independent  sales agents are projected to sell
them for approximately $2.15 to $2.25 per capsule. However, the sales agents can
sell  the  capsules  at  whatever  price  they   determine.   The  sales  agents
compensation is the difference between what they pay the Company for the product
and the price they sell the Product.

<PAGE>

         At the present time,  management has full faith in Vitahealth's ability
to deliver the Product.  However,  the Company cannot  guarantee that additional
delays  will not  further  delay the  commencement  of sales  and  distribution.
Currently,  management  is  prepared to give  Vitahealth  every  opportunity  to
complete the production facility,  even at the cost of postponing the production
deadline  again.  While  management   continually  reviews  the  status  of  the
production  facility to determine when the Company will begin sales there are no
plans or intentions  at this time to exercise the  Company's  right to terminate
the Vitahealth agreement due to missing the production deadline.

         As the Company has not yet begun to sell the  Product,  it is difficult
for management to evaluate the growth curve of Product sales.  Additionally,  it
is expected that the delays  involved with  initiating  production has tarnished
the earlier market  'excitement'  for human sexual virility and potency products
created by Viagra(R). When considering those factors,  Management believes it is
likely that the initial sales quotas will not be met and it will have a right to
terminate the Vitahealth  Agreement  pursuant to the sales quota clauses present
in the agreement.  Having considered the various factors involved with its right
to terminate the agreement based on sales quota requirements,  management has no
plans to do so at this time. It is management's  opinion, that there is a market
for a human sexual  potency  nutritional  supplement  and is fully  committed to
providing  Vitahealth  with the  opportunity  to be the sole  supplier of such a
product to the Company. While the Company will review the sales numbers as sales
are  commenced,  and retains the right to reevaluate  its position on an ongoing
basis,  there are no plans or  intentions at this time to exercise the Company's
right to terminate  the  Vitahealth  agreement  due to sales quotas for at least
three months following initial production and sale of the Product.

         The  Company  expects to fund $4,000 of initial  advertising  in health
journals and media so distributors will have such publications in hand for sales
purposes.  The Company also intends to use the Internet for  advertising as that
currently  allows the greatest  visibility  for very small costs.  In fact,  the
Company  believes that it may be able to obtain free access on certain  websites
looking for products such as the Company's. Subsequently, the company intends to
reserve 20% of revenues for ongoing  advertising and marketing up to $10,000 (in
advertising  expenditures - or $50,000 total revenues) monthly per country,  and
10% of all additional revenues.

         While the Company is committed to retaining Vitahealth as its supplier,
there is no guarantee  that  Vitahealth's  production  delays or lack of product
salability as evidenced by underpreforming the sales quotas will not necessitate
the eventual  termination of the Vitahealth  agreement.  Should the agreement be
terminated  for any reason,  the Company at this time intends to locate  another
provider of human sexual potency and virility nutritional  supplements to become
its supplier.  There is no guarantee that the Company will be able to locate and
retain  such a provider  and the Company has not even begun to attempt to locate
one. The Company  continually  evaluates the business market to attempt to place
itself at the most profitable  position.  While the Company currently intends to
continue to operate as discussed,  there can be no guarantee that uncontrollable
variables  will not force a  substantive  change in the  Company's  operation or
plans of operation.

<PAGE>

         At present the only cash  outlay of the Company is in banking  fees and
in legal and  accounting  fees  incurred by the  Company as it prepares  filings
associated with being a reporting company (quarterly  unaudited reports,  annual
reports,  etc.).  Management  believes there is enough cash on hand to fund such
activities for the next 12 months. When the Company becomes operational, further
costs  (such as salary  for Mrs.  Roth) are  expected  to be  covered by revenue
generated by the Company's  sales. The agreement with Mrs. Roth calls for her to
be paid up to $40,000 from the  proceeds of sales of the  Product.  Should sales
levels  not allow for her to receive  her full  compensation,  she will  receive
compensation  from  available  funds after the Company  satisfies  all its other
obligations.  The only other anticipated  expense not currently  provided for is
the  advertising  budget.  Management  is currently  exploring  various  options
including  the sale of  additional  stock  and/or  warrants,  bank  financing or
personal  loans by  management  or family  members.  Other than as  specifically
identified,  the Company does not anticipate the need to raise  additional funds
in the next 12 months.

         The  Company  does not  expect to  conduct  any  product  research  and
development or to purchase or sell a plant or significant equipment. The Company
intends to retain marketing and public relations  consultants as necessary,  and
to hire support staff for its President only if warranted by its sales volume on
an as needed basis.

                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings.

                            None.

Item 2.  Changes in Securities.

                            None.

Item 3.  Defaults Upon Senior Securities.

                            None.

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

                            None.

Item 5.  Other Information.

                            None.

Item 6.  Exhibits and Reports on Form 8-K.

         (a)      A financial data schedule is filed herewith as an exhibit.

         (b) No reports on Form 8-K were filed during the quarter for which this
report is being filed.

<PAGE>

                                   SIGNATURES



         In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the  undersigned  thereto  duly
authorized.


Date: February 3, 2000

                                        VIRILITEC INDUSTRIES, INC.


                                        /s/Bella Roth
                                        Bella Roth, President and Chairman




                                        /s/Moshe Laufer
                                        Moshe Laufer
                                        Secretary, Treasurer and Director