UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB



                                   (Mark One)

         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
             EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2002


         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
             EXCHANGE ACT OF 1934

       For the transition period from _______________to_________________

                         Commission file number: 0-22899

                          Wasatch Pharmaceutical, Inc.
                ------------------------------------------------
               (Exact name of registrant as specified in charter)

                Utah                                          84-0854009
    -------------------------------                  --------------------------
    State or other jurisdiction of                   (I.R.S. Employer I.D. No.)
    incorporation or organization

                     310 East 4500 South, Murray, Utah 84108
               --------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (801) 263-3949
                 ----------------------------------------------
                 Issuer's telephone number, including area code


                                 Not Applicable
              ----------------------------------------------------
              (Former name, former address, and former fiscal year,
                         if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports). Yes [ ] No [X ] and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

        Indicate the number of shares outstanding of each of the issuer's
            classes of common stock, as of the last practicable date.

                   Class A No Par Common Stock, 29,596,122,825
              shares issued and outstanding as of December 1, 2002.

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

The Registrant's unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB pursuant to the rules and regulations of
the Securities and Exchange Commission and, therefore, do not include all
information and footnotes necessary for a complete presentation of the financial
position, results of operations, cash flows, and stockholder's equity in
conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature.

The unaudited balance sheet of the Registrant as of September 30, 2002 and the
audited balance sheet of the Registrant as of December 31, 2001 along with the
related unaudited statements of operations, cash flows and supplemental cash
flows for the nine month and three month periods ended September 30, 2002 and
2001 and the period from inception (September 7, 1989) through September 30,
2002, and the statement of changes in common stockholders' deficit for the nine
month periods ended September 30, 2002 and for the period from inception
(September 7, 1989) through September 30, 2002 are attached hereto.

Operating results for the period ended September 30, 2002 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2002.

The following financial statements are included elsewhere as an exhibit to this
report:

         Consolidated Balance Sheet as of September 30, 2002
           Consolidated Assets.............................................F-1

         Consolidated Liabilities and Shareholders' Equity.................F-2

         Consolidated Statements of Operations for the Nine and
           Three Months Ended September 30, 2002 and 2001 and the
           Cumulative Amounts From Inception (September 7, 1989)
           To September 30, 2002...........................................F-3

         Consolidated Statements of Changes in Stockholders'
           Deficit for the Nine month period ended September 30, 2002......F-4

         Consolidated Statements of Cash Flows for the Nine
           Months Ended September 30, 2002 and 2001 and the
           Cumulative Amounts From Inception (September 7, 1989)
           to September 30, 2002...........................................F-5

         Notes to the Consolidated Financial Statements....................F-6

                                        2
<PAGE>
<TABLE>
<CAPTION>
                                  WASATCH PHARMACEUTICAL, INC.
                                 (A Development Stage Company)
                                   CONSOLIDATED BALANCE SHEET
                                       September 30, 2002



                                             ASSETS

<S>                                                                                      <C>
CURRENT ASSETS
Cash                                                                                     $         430
Accounts receivable - trade                                                                     10,357
Allowance for uncollectibles                                                                    (2,289)
Advances to officers and employees                                                             144,516
Inventory                                                                                      215,909
Prepaid expenses                                                                               290,262
                                                                                         -------------
Total Current Assets                                                                           659,185
                                                                                         -------------
PROPERTY AND EQUIPMENT
Office fixtures and equipment                                                                  154,213
Leasehold improvements                                                                          64,544
Internet system and equipment                                                                   37,063
Machinery and equipment                                                                         36,713
                                                                                         -------------
                                                                                               292,534
Less accumulated depreciation                                                                 (152,396)
                                                                                         -------------
Net Property and Equipment                                                                     140,138
                                                                                         -------------
OTHER ASSETS
Intangibles - net of amortization                                                               33,228
Deposits                                                                                        14,279
                                                                                         -------------
Total Other Assets                                                                              47,508
                                                                                         -------------
TOTAL ASSETS                                                                             $     846,830
                                                                                         =============


            The accompanying footnotes are an integral part of this Financial Statement

                                                 F-1
<PAGE>
<CAPTION>
                                  WASATCH PHARMACEUTICAL, INC.
                                 (A Development Stage Company)
                                   CONSOLIDATED BALANCE SHEET
                                       September 30, 2002



                              LIABILITIES AND SHAREHOLDERS' EQUITY

<S>                                                                                      <C>
CURRENT LIABILITIES
Accounts payable - trade                                                                 $     792,113
Accrued interest                                                                             1,208,044
Accrued salaries                                                                               486,929
Payroll taxes                                                                                  167,658
Other accrued expenses                                                                          58,128
Notes and advances currently due:
Shareholder and vendor notes                                                                 1,403,363
Special financing notes                                                                      1,220,434
Officer Compensation and other notes                                                           897,348
                                                                                         -------------
Total Liabilities                                                                            6,234,018
                                                                                         -------------
STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value, 1,000,000
   shares authorized 49,258 issued and outstanding                                                  49
Common stock, No par value and a $.000001 stated value,
   authorized 30,000,000,000 shares, 26,155,616,084
   shares issued and outstanding.                                                               26,156
Additional paid-in capital                                                                   7,838,595
Accumulated development stage deficit                                                      (13,103,322)
                                                                                         -------------
                                                                                            (5,238,522)
Less shares issued for future transactions                                                    (148,665)
                                                                                         -------------
Total Stockholders' Deficit                                                                 (5,387,188)
                                                                                         -------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                              $     846,830
                                                                                         =============

             The accompanying footnotes are an integral part of this Financial Statement

                                                F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                  WASATCH PHARMACEUTICAL, INC.
                                                  (A Development Stage Company)
                                              CONSOLIDATED STATEMENT OF OPERATIONS
                                                           (Unaudited)


                                                                                                                 Cumulative
                                                         For the Nine Months Ended    For the Quarter Ended     Amounts From
                                                               September 30,               September 30,        Inception To
                                                        --------------------------   ------------------------   September 30,
                                                            2002          2001          2002          2001          2002
                                                        ------------  ------------   -----------   ----------   ------------
<S>                                                     <C>           <C>            <C>           <C>          <C>
REVENUES
Professional fee income                                 $      4,525  $      8,005   $       462   $    2,550   $    251,606
Product sales                                                 31,899        34,202        10,139        6,273        547,441
                                                        ------------  ------------   -----------   ----------   ------------
                                                              36,424        42,207        10,601        8,823        799,048
                                                        ------------  ------------   -----------   ----------   ------------
SKIN CARE TREATMENT AND PRODUCT EXPENSE
Cost of products sold                                         16,168        12,397         6,022        2,921         90,337
Salaries                                                     213,054       238,584        49,697       90,023      1,351,352
Employee leasing                                                   -             -                          -        218,745
Payroll taxes                                                      -        16,870             -        6,383        143,005
Physicians fees                                                7,300        20,400             -        6,900        331,784
Rent                                                          64,780        59,860        21,074       21,383        394,600
Advertising                                                    7,970        22,830         1,633        1,994        297,964
Depreciation                                                  26,276        26,224         8,709        8,921         96,413
Consulting                                                                                                            30,010
Other                                                         13,291        36,778         5,229        4,357        167,514
                                                        ------------  ------------   -----------   ----------   ------------

Total                                                        348,838       433,943        92,363      142,882      3,121,725
GENERAL AND ADMINISTRATIVE EXPENSE                         1,604,885     1,571,912       343,403      263,312      8,220,539
INTEREST                                                     300,821       389,056        99,460       70,142      2,150,391
                                                        ------------  ------------   -----------   ----------   ------------

Total Operating Expenses                                   2,254,544     2,394,910       535,225      476,335     13,492,654
                                                        ------------  ------------   -----------   ----------   ------------
LOSS FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                                     (2,218,120)   (2,352,703)     (524,624)    (467,512)   (12,693,606)

PROVISION FOR INCOME TAXES                                         -             -             -            -              -
                                                        ------------  ------------   -----------   ----------   ------------
LOSS FROM CONTINING OPERATIONS                            (2,218,120)   (2,352,703)     (524,624)    (467,512)   (12,693,606)

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX                      -             -             -            -       (409,717)
                                                        ------------  ------------   -----------   ----------   ------------
NET LOSS                                                $ (2,218,120) $ (2,352,703)  $  (524,624)  $ (467,512)  $(13,103,323)
                                                        ============  ============   ===========   ==========   ============


BASIC LOSS PER COMMON SHARE                             $      (0.00) $      (3.31)  $     (0.00)  $    (0.59)
                                                        ============  ============   ===========   ==========

BASIC WEIGHTED AVERAGE SHARES OUTSTANDING
Stated in Thousands                                        9,486,099           710    14,080,191          789
                                                        ============  ============   ===========   ==========



                         The accompanying footnotes are an integral part of this Financial Statement

                                                           F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                  WASATCH PHARMACEUTICAL, INC.
                                                  (A Development Stage Company)
                                  CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' (DEFICIT)
                                    For the Six Months and Three Months Ended June 30, 2002
                                                           (Unaudited)


                                                Preferred                              Additional   Accumulated        Total
                                                 Stock           Common Stock            Paid-In     Development    Stockholders'
                                                 Amount        Shares       Amount        Capital    Stage Deficit     Deficit
                                                --------  --------------  ----------    -----------  -------------   ------------
<S>                                             <C>           <C>         <C>           <C>          <C>             <C>
Balance forward December 31, 2001               $     49      31,760,842  $   31,761    $ 6,123,649  $ (10,885,203)  $ (4,729,743)

Shares issued in connection with:
Consulting fees                                              112,095,872     112,096        479,890                       591,986
Loan Fee's                                                         1,780           2          6,228                         6,230
Cash received on exercise of Warrants                          3,539,128       3,539        171,026                       174,565
Securities sold for cash                                         301,300         301         24,699                        25,000
Retirement of debt and interest                                8,801,000       8,801        111,179                       119,980
Officer's stock award                                            209,864         210          3,061                         3,271

Miscellaneous
Costs of funds raised                                                                        (2,391)                       (2,391)
Rounding Shares                                                        1

Shares issued for future transactions
New collateral issues                                        374,500,000     374,500              -                       374,500
Collateral returned                                           (8,802,780)     (8,803)             -                        (8,803)
Notes cancelled on exercised options                          (4,633,332)     (4,633)      (458,700)                     (463,333)

Net loss for the quarter ended March 31, 2002          -               -           -              -       (719,882)      (719,882)
                                                --------  --------------  ----------    -----------  -------------   ------------
Shareholders Equity March 31, 2002                    49     517,773,675     517,774      6,458,640    (11,605,084)    (4,628,620)

Restatement of share value to no par
  Common stock issued                                                       (517,256)       517,256                             -
  Collateral shares issued prior to par
    value change                                                                           (389,448)                     (389,448)

Shares issued in connection with:
Consulting fees                                            1,435,454,476       1,435        676,565                       678,000
Securities sold for cash                                     548,137,933         548        120,452                       121,000
Retirement of debt and interest                            1,070,000,000       1,070        363,430                       364,500

Shares issued for future transactions
New collateral issues                                     12,790,500,000      12,791                                       12,791
Collateral returned                                       (1,070,000,000)    (1,070)                                       (1,070)
Shares issue3d in trust for debenrure offering                13,750,000          14                                           14

Net loss for the quarter ended June 30, 2002           -               -           -              -       (973,614)      (973,614)
                                                --------  --------------  ----------    -----------  -------------   ------------
Shareholders Equity June 30, 2002                     49  15,305,616,085      15,306      7,746,895    (12,578,698)    (4,816,448)

Shares issued in connection with:
Consulting fees                                            1,150,000,000       1,150         83,850                        85,000
Finders fees                                                  30,000,000          30            720                           750
Legal fees                                                    30,000,000          30            970                         1,000
Securities sold for cash                                     840,000,000         840         27,410                        28,250

Shares issued for future transactions
New collateral issues                                      8,800,000,000       8,800                                        8,800
Collateral returned                                                                -                                            -
                                                                                   -                                            -
Prior quarter adjustments for retired debt                                                  (21,250)                      (21,250)
                                                                                                                                -
Net loss for the quarter ended Sept 30, 2002           -               -           -              -       (524,624)      (524,624)
                                                --------  --------------  ----------    -----------  -------------   ------------
Shareholders Equity Sept 30, 2002                     49  26,155,616,085      26,156      7,838,595    (13,103,323)     5,238,522


Common shares issued for future
  consideration
Shares issued as collateral for
  Company obligations                                    (20,910,327,000)    (20,910)             -                       (20,910)
Obligation to purchase shares issued                             (10,378)         (0)      (102,742)                     (102,742)
Shares issued in escrow for Debenture
  Transaction                                                (13,750,000)        (14)                                         (14)
Subscription receivable for shares issued              -      (5,000,000)         (5)       (24,995)             -        (25,000)
                                                --------  --------------  ----------    -----------  -------------   ------------
Total                                                  - (20,929,087,378)    (20,929)      (127,737)             -       (148,666)
                                                --------  --------------  ----------    -----------  -------------   ------------
Shareholders Net Equity Sept 30, 2002           $     49   5,226,528,707  $    5,227    $ 7,710,858  $ (13,103,323)  $  5,387,188
                                                --------  --------------  ----------    -----------  -------------   ------------

                  The accompanying footnotes are an integral part of this Financial Statement

                                                      F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                  WASATCH PHARMACEUTICAL, INC.
                                  (A Development Stage Company)
                              CONSOLIDATED STATEMENT OF CASH FLOWS
                                           (Unaudited)


                                                         For the Nine Months Ended        Amounts From
                                                               September 30,              Inception To
                                                       -------------------------------    September 30,
                                                           2002               2001            2002
                                                       ------------       ------------    -------------
<S>                                                    <C>                <C>             <C>
Cash Flow from Operating Activities
Net loss                                               $ (2,218,120)      $ (2,352,703)   $ (13,103,322)
Adjustments to reconcile net (Loss) to net cash
used by operating activities:
Depreciation and depletion                                   56,328             57,596          166,573
Depreciation and losses on fixed asset disposals
Clinic assets                                                     -                  -           43,590
Oil and gas assets                                                -                  -            4,189
Loss on disposal of oil and gas properties                                           -          382,933
Expenses paid with common shares                            880,704            416,924        1,955,209
Increase (decrease) in working capital
(Increase) decrease in receivables                          (30,842)            (1,807)        (152,583)
(Increase) decrease in inventory                              7,659           (115,312)        (215,909)
(Increase) decrease in prepaid expenses                    (287,462)             2,358         (290,262)
Increase (decrease) in accounts payable                       8,529             30,118          792,114
Increase (decrease) in accrued interest                     205,267            199,866        1,208,043
Increase (decrease) in other accruals                      (739,277)           203,948          712,714
Common stock exchanged for current assets                   527,038                             527,038
Notes given for deferred compensation                       868,975                  -          868,975
                                                       ------------       ------------    -------------
Net cash used by operating activities                      (721,201)        (1,559,010)      (7,100,699)
                                                       ------------       ------------    -------------
Cash Flow from Investing Activities
Purchase of fixed assets                                     (2,105)           (91,639)        (278,743)
(Increase) decrease in other assets                           2,433             (5,421)         (82,950)
                                                       ------------       ------------    -------------
Net cash provided (used) by investing activities                328             (97,060)       (361,693)
                                                       ------------       ------------    -------------
Cash Flow from Financing Activities
Proceeds from borrowings                                    380,550          1,105,862        5,251,139
Expenses paid by shareholder                                      -                  -           38,323
Repayment of loans                                          (11,152)          (453,122)      (1,428,724)
Proceeds from sale of common shares                         348,815          1,017,950        3,453,133
Capital contributed by shareholder                                -                  -          154,800
Collection of share subscriptions                                 -                  -          141,726
Exercised stock options and warrants                          5,000                  -          130,250
Redemption of common shares                                       -                  -          (20,409)
Cost of raising capital                                      (2,391)           (14,471)        (257,417)
                                                       ------------       ------------    -------------
Net cash provided by financing activities                   720,822          1,656,220        7,462,822
                                                       ------------       ------------    -------------
NET INCREASE (DECREASE) IN CASH                                 (50)               150              430
Balance at beginning of period                                  480                230                -
                                                       ------------       ------------    -------------
Balance at end of period                               $        430       $        380    $         430
                                                       ============       ============    =============

             The accompanying footnotes are an integral part of this Financial Statement

                                                F-5
</TABLE>
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                               September 30, 2002
                                   (Unaudited)

NOTE 1 - NATURE AND HISTORY OF THE BUSINESS

The consolidated financial statements include Wasatch Pharmaceutical, Inc., a
development stage company, (the Company or Wasatch), and its wholly owned
subsidiaries, Medisys Research Group, Inc. (Medysis), American Institute of Skin
Care, Inc. (AISC) and AISC Online, Inc. (AISC Online).

Medisys Research Group, Inc., the original company, was incorporated on
September 7, 1989 (the "Date of Inception" as that term is used in these
financial statements). In January 1994, Medisys incorporated a wholly owned
subsidiary, American Institute of Skin Care, Inc., to operate and administer
Medisys' clinical skin treatment programs. On December 29, 1995, Ceron Resources
Corporation, a Delaware corporation with publicly traded common stock, and
Medisys executed an Agreement and Plan of Reorganization whereby Ceron issued
85% of its to be outstanding shares of common stock in exchange for all of the
issued and outstanding common stock of Medisys.

In January 1996, for the purpose of changing its corporate domicile to Utah, the
combined Ceron and Medisys entity merged into a newly formed Utah corporation -
Wasatch Pharmaceutical, Inc. In January 2001, AISC Online, Inc., was
incorporated as a wholly owned Wasatch subsidiary to provide skin treatment
products and services through the Internet.

The Statement of Operations for the nine months and the three months ended
September 30, 2002 and 2001 and for the period from inception (September 7,
1989) through September 30, 2002, the Statement of changes in Stockholders
Deficit for the nine months and the three months ended September 30, 2002 and
the Balance Sheet as of September 30, 2002 include, in the opinion of
management, all of the adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for these periods
and the financial condition as of that date. Historical interim results are not
necessarily indicative of results that may be expected for any future period.

NOTE 2 - CHANGES IN PRESENTATION

Certain financial presentations for the first and second quarter of 2001 have
been reclassified to conform to the 2002 presentation.

NOTE 3 - GOING CONCERN

The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern. Such principles contemplate
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company is in the development stage and has not
established a source of revenues sufficient to allow it to continue as a going
concern. The Company is negotiating an agreement to raise short-term funding and
plans to seek long-term funding through a stock offering or private placement.
Management believes that sufficient funding will be raised to meet the operating
needs of the Company during the remainder of development stage, although
historically, the Company has not been able to raise sufficient capital to pay
for its current operating needs. Revenues are minimal and substantial losses
continue. On September 9, 2002, the Company filed a Chapter 7 federal bankruptcy
proceeding to forestall a Writ of Execution that had been filed as a result of a
judgment against the Company in the amount of $235,657. (See Part II, Item I
Legal Proceedings in the 10QSB) The bankruptcy filing was dismissed November 25,
2002.

                                      F-6
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                               September 30, 2002
                                    Unaudited


Included in the balance sheet at September 30, 2002 are certain prepaid
expenses, totaling $290,262 that will be charged to operations in 2002 and 2003.

NOTE 4 - INVENTORIES

Inventories are valued at the lower of average costs or market and are comprised
of the following at September 30, 2002:

                Completed treatment kits              $   6,014
                Finished treatment solutions             41,185
                Unfilled Bottles                        131,508
                Shipping supplies                        30,677
                Other supplies                            6,525
                                                      ---------
                      Total                           $ 215,909
                                                      =========


NOTE 5 - INTANGIBLE ASSETS

Intangible assets are valued at the lower of net realizable value to the Company
or cost and are comprised of the following at June 30, 2002:

                Trademark application costs            $    33,228
                Product development costs                   42,530
                                                       -----------
                              Total cost                    75,759

                Product development amortization           (42,530)
                                                       -----------

                          Net carrying value           $    33,228
                                                       ===========

The trademark application is pending but when it is granted the costs incurred
will be amortized over their statutory lives. Product development costs are the
costs of developing product names, bottles and strategy and will be amortized
over eighteen months.

Intangible assets are periodically reviewed for impairment based on an
assessment of future cash flows. All intangible assets are amortized on a
straight-line basis.


NOTE 6 - GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the comparative nine months and the
three months ended September 30, 2002 and 2001 and Cumlative Amounts for the
period from inception (September 7, 1989) through September 30, 2002 are as
follows:

                                      F-7
<PAGE>
<TABLE>
<CAPTION>
                                  WASATCH PHARMACEUTICAL, INC.
                                  (A Development Stage Company)
                         Notes to the Consolidated Financial Statements
                                       September 30, 2002
                                            Unaudited


                                                                                     Cumulative
                                     Nine Months               Three Months          Amounts To
                                 Ended September 30,       Ended September 30,         Sept 30,
   Expense Description             2002         2001         2002         2001           2002
                               -----------  -----------    ---------    ---------    -----------
<S>                            <C>          <C>            <C>          <C>          <C>
Officer's compensation         $   296,500  $   473,800    $  95,000    $ 153,800    $ 2,724,274
Profession services              1,000,126      600,568      170,182       85,423      2,449,349
Employee Compensation               77,474       58,758       36,282       10,786        192,044
Loss on Capital Venture                                                                  500,000
Investor Related Expense             1,645        4,482        1,485        1,650        707,887
Loan & Other Fees                   73,852      170,192        2,118       36,660        274,366
Bad Debts                                                                                 65,849
Depreciation & Amort.               30,052       31,372        8,826       10,639         72,178
Licensing Expense                      409        1,016          109          168         40,409
Public Relations                       199       44,580          199                      90,936
Rent                                31,854       32,588       10,598       10,383         98,686
Travel Expense                      28,960       36,878        4,383        7,410        193,183
Communications Expense              11,357       17,402        2,817        5,474        115,900
Insurance                            1,875        2,135        (616)                      22,459
Postage and Delivery                 6,554       50,698        1,950       11,257         54,306
Payroll Tax Costs                   23,915                     1,717                      83,329
Other                               20,113       47,443         8352        6,434        535,430
                               -----------  -----------    ---------    ---------    -----------
           Total               $ 1,604,885  $ 1,571,912    $ 343,403    $ 340,083    $ 8,220,585
                               ===========  ===========    =========    =========    ===========
</TABLE>

NOTE 7 - CONTINGENT COMPENSATION LIABILITY

The Company, through its board of directors, formally recognized that Mr. Gary
V. Heesch, CEO, and David K. Giles, CFO, have, from inception, performed
valuable technical and management services during the Company's development
stage without receiving adequate compensation. These under-compensated services
were performed prior to September 1, 2000, at which time employment contracts
were executed with these two executive officers. While recognizing the
obligation, the Company did not establish its dollar value because the amount is
predicated upon the Company's ability to pay such amount out of cash profits
without jeopardizing the financial stability of the Company.

In order to obtain capital through borrowings, the Company had to satisfy a
lender requirement that such loans are made to Mr. Heesch and/or Mr. Giles,
personally, and that they be secured with Company common stock that was issued
or could have been issued to them at least two years prior to the original date
of the previously mentioned loans. Consequently, during the last year restricted
shares have been issued to Mr. Heesch and Mr. Giles as compensation and used as
collateral on these aforementioned personal loans. Because the loan proceeds
went directly to the Company, the Company has assumed the obligation to repay
each of these loans. These compensatory shares would not have been issued to Mr.
Heesch and Mr. Giles if it were not for the requirements of the lender.

                                      F-8
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                               September 30, 2002
                                   (Unaudited)

NOTE 7 - CONTINGENT COMPENSATION LIABILITY (Continued)

Mr. Heesch and Mr. Giles have agreed that when the Company liquidates these
special purpose loans, they will return the compensatory collateral shares to
the Company. Mr. Heesch and Mr. Giles also agreed that the Company is not
obligated to make any cash payments for these prior obligations when the shares
are returned.

NOTE 8 - POTENTIAL LIABILITY

In September, 2001, a Securities Purchase Agreement was entered into between a
trust set up by Gary Heesch, CEO and David Giles, CFO and an investment firm.
The trust was in possession of 250,000 Class A and 250,000 Class B warrants
which entitled the holder to purchase registered common shares of Wasatch
Pharmaceutical, Inc. These warrants were transferred to the investment firm
which negotiated with Wasatch Pharmaceutical to purchase 500,000 shares of
common stock through the exercise of the warrants. The investment firm paid a
down payment of $150,000 towards the exercise price of the stock with the
balance of the purchase price to be determined by the future market value of the
stock. The $150,000 went directly to Wasatch Pharmaceutical, Inc. and was
recorded as an advance on future stock purchases in the liability section.

As part of the transaction, the investment firm required that Gary Heesch
personally sign a Put Agreement in which Mr. Heesch agreed to repurchase the
500,000 shares at a fixed cash purchase price of $.38 per share. In an Addendum
to Put Agreement dated January 7, 2002, Mr. Heesch agreed to repurchase 800,000
shares at $.38 per share for a two month extension on the Put Agreement.
Subsequent to the Put Agreement, the market price of the Company's stock fell
significantly below the $.38 per share "Put" price. On February 12, 2002, Mr.
Heesch was notified by the investment firm that it has elected to sell Mr.
Heesch the 800,000 shares at a cash price of $.38 per share or $304,000. When
Mr. Heesch was not able to pay the purchase price of $304,000, the investment
firm filed a lawsuit against him and subsequently was awarded a judgment against
Mr. Heesch in the amount of $308,119.

Because the $150,000 advance went to Wasatch Pharmaceutical, Inc. and Mr. Heesch
acted only as a facilitator in the transaction, receiving no personal benefit,
the Board of Directors is considering whether to accept the liability on the
judgment against Mr. Heesch in the amount of $308,119.

NOTE 9 - SUBSEQUENT COMMON STOCK TRANSACTIONS

On November 18, 2002, the Board of Directors approved the issuance of 3.44
billion shares of restricted common stock to David Giles, CFO, as additional
collateral on the outstanding debt owing to him.

As of December 1, 2002, 29,596,122,825 shares of the Company's common stock had
been issued and are outstanding. Included in that total is 24,350,327,000 common
shares issued that are returnable to the Company if it meets its obligations
under existing note and loan agreements and 5,000,000 common shares that have
been contracted for and issued without receipt of the final payments of $25,000
on existing stock subscription agreements.

                                      F-9
<PAGE>

Item 2. Management Discussion And Analysis Of Financial Conditions And Results
Of Operations

Forward-Looking Information

         This quarterly report on Form 10-QSB of Wasatch Pharmaceutical, Inc., a
Utah corporation (the "Company"), for the nine months ended September 30, 2002,
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which are intended to be covered by the safe
harbors created thereby. To the extent that such statements are not recitations
of historical fact, such statements constitute forward-looking statements that,
by definition, involve risks and uncertainties. In any forward-looking
statement, where the Company expresses an expectation or belief as to future
results or events, such expectation or belief is expressed in good faith and
believed to have a reasonable basis, but there can be no assurance that the
statement of expectation or belief will be achieved or accomplished.

         The following are factors that could cause actual results or events to
differ materially from those anticipated, and include, but are not limited to:
general economic, financial and business conditions; the Company's ability to
minimize expenses and exposures related to its distribution and sale of its
products in which other companies have control over the final sale and
utilization of its products; changes in and compliance with governmental laws
and regulations, including various state and federal drug laws and regulations;
the Company's current dependency on the ability of Gary V. Heesch, a director
and chief executive officer, to continue to obtain funding for the Company's
operations and, to the extent he should ever become unwilling to do so, the
Company's ability to obtain the necessary additional financing from outside
investors and/or bank and mezzanine lenders; and the ability of the Company to
generate sufficient revenues to cover operating losses and position it to
achieve positive cash flow. If the Company is unable to raise additional
financing from outside investors and/or bank and mezzanine lenders sufficient to
generate revenues to cover its operating costs, it may be forced to seek
unplanned protection under the Federal Bankruptcy Statutes.

         Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of the date
hereof. The Company's believes the information contained in this Form 10-QSB to
be accurate as of the date hereof. Changes may occur after that date, and the
Company will not update that information except as required by law in the normal
course of its public disclosure practices. Additionally, the following
discussion regarding the Company's financial condition and results of operations
should be read in conjunction with the financial statements and related notes
contained in Item 1 of Part 1 of this Form 10-QSB, as well as the financial
statements in Item 7 of Part II of the Company's Form 10-KSB for the fiscal year
ended December 31, 2001.

Overview

         The Company has developed proprietary technology for the treatment of
various skin disorders, including acne, eczema, and psoriasis. After
successfully completing controlled clinical studies, the company established
prototype clinics to duplicate the success rates achieved in the clinical
environment and to establish medical, business and administrative procedures
that could be duplicated in an Internet network of patients and doctors and
Company owned clinics across the country. One prototype treatment clinic is
currently in operation in Utah. Although the Company has confirmed the
technology through the successful treatment of hundreds of patients and has set
up the business and administrative procedures, the clinics have not reached a
profitable level due to the lack of funds for advertising and marketing.

         On September 9, 2002, the Company filed for protection under Chapter 7
bankruptcy laws in the United States Bankruptcy Court, District of Utah. This
bankruptcy filling was dismissed on November 25, 2002. See Part II, Item 1,
Legal Proceedings.

                                       3
<PAGE>

         The Company is also seeking funding to establish an Internet presence,
open additional clinics in major metropolitan areas and launch a major
advertising and marketing campaign to support each of its business strategies.
Based on successful historical models, management concludes that through direct
patient treatment on the Internet, working with health insurance companies and
HMOs, an advertising campaign and a physician referral program, revenues could
be substantially increased utilizing formerly trained employees who have been
laid off but have indicated a willingness to return to the Company's employment
once funding has been received.

Liquidity And Capital Resources

         At September 30, 2002 the Company had current assets of $659,200,
current liabilities of $6,269,000 , which results in a working capital deficit
of $5,609,800 that is a $45,600 increase in the deficit that existed at December
31, 2001. The increase in the working capital deficit is due to the Company's
additional borrowings and accrued interest on existing debt which is partially
offset by continuing investment in prepaid contract services to be utilized in
raising capital funds. There was an operating loss of $2,253,120 and $559,600
for the nine-month and three-month periods ended September 30 2002. These
operating losses were financed with borrowings and common stock issues.

         There was additional shareholder investment of $348,000 ($121,000 in
the third quarter) and common stock issued for goods and services totaling
$880,700 ($129,400 in the third quarter.) The Company borrowed $380,550 on
short-term obligations during the first nine months of 2002 ($13,650 during the
third quarter). During the nine months, notes totaling $345,000 matured but went
un-liquidated to default. These notes were foreclosed and under the terms of the
indebtedness, 1,078,801,000 shares of the Company's common stock were issued as
compensation for the defaulted debt.

         In addition, at September 30, 2002, officers and executives of the
company have accumulated unpaid annual compensation totaling $1,355,904,
including $868,975 in notes. This represents the annual compensation approved
for the management but unpaid as a result of inadequate resources.

         The Company, through its board of directors, formally recognized that
Mr. Gary V. Heesch, CEO, and David K. Giles, CFO, have, from inception,
performed valuable technical and management services during the Company's
development stage without receiving adequate compensation. These
under-compensated services were performed prior to September 1, 2000, at which
time employment contracts were executed with these two executive officers. While
recognizing the obligation, the Company did not establish its dollar value
because the amount is predicated upon the Company's ability to pay such amount
out of cash profits without jeopardizing the financial stability of the Company.

Results Of Operations

         For the three months ended September 30, 2002, the Company's revenues
remained nominal at $10,600. Revenues for the nine months ended September 30,
2002 were $36,400. The Company's operating expenses for its sales unit decreased
$68,000 in the first nine months of 2002, as compared to the first nine months
of 2001. The comparable third quarter sales unit operations saw the expenses
decrease $33,900. The decreases reflect the Company's emphasis on retaining only
the essential personnel and resources in anticipation of obtaining funding for
the Internet division and the Utah clinics.

         The Company's corporate general and administrative expenses increased
$51,300 to $1,623,200 for the three quarters of 2002 when compared to the same
quarters of 2001. This stabilized cost level is again reflective of the
management drive to retain essential resources while it is seeking capital
funds. The G&A for the comparable quarters of 2002 and 2001 increased $98,500
because of increased non-cash stock compensation fees paid in search of
long-term funding.

         The Company had a net loss of $559,600 for the third quarter of 2002 as
compared to a loss of $467,500 in the same period of 2001. The year to date loss
for 2002, when compared to nine months of 2001 decreased due to a large loss in
quarter one of 2001 ($1,001,900). Roughly 50% ($880,700) of the year to date
loss was funded by issuing common stock for goods and services. The Company
anticipates that the losses will continue until it obtains the funding that will
enable management to fully implement the Company's business plan.

                                        4
<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         As more fully described under Item 3, Legal Proceeding of the 10KSB
filed for the year ended December 31, 2001, a default judgment in Kentucky was
granted against Wasatch for the amount of $235,657 on a Promissory Note. The
judgment was transferred to Utah and the Third District Court in the State of
Utah ordered a Sheriff's Sale for May 1, 2002. The Sheriff's Sale was suspended
based on a preliminary settlement agreement, however, the parties did not
complete the final settlement agreement. A second Sheriff's Sale had been
ordered for September 9, 2002.

         On August 1, 2002, a Complaint was filed against Wasatch in the Third
District Court in and for the County of Salt Lake, State of Utah as a result of
a default in the payment of a Promissory Note for $300,000 that was due
September 20, 2001. Gary Heesch, CEO of the Company, signed as a personal
guarantor of the Promissory Note. An extension agreement was signed December 21,
2001 which committed Wasatch to pay a total of $400,000 in principal and
interest by March 30, 2002 plus provide 400,000 of free trading stock with a
value of at least $40,000. Wasatch is in default on this payment and was not
able to provide the 400,000 shares of free trading stock. The complaint prays
for a judgment on the Note for $440,000, interest at the rate of 24% from June
1, 2001 until paid, a late fee of 10% of the principal amount due on the Note,
or $44,000 and Plaintiff's costs and attorney's fees. On September 3, 2002, a
Default Judgment was entered in the Third District Court against Wasatch
Pharmaceutical, Inc. and Gary Heesch in the amount of $618,977.81.

         On July 1, 2002, a Default Judgment was entered in the Third District
Court, State of Utah, Salt Lake County, against Wasatch Pharmaceutical, Inc. in
the amount of $7,914.63 for failure to pay for copying costs.

         On July 19, 2002, a Default Judgment was entered in the Third District
Court, State of Utah, Salt Lake County, Small Claims Department against American
Institute of Skin Care in the amount of $2,334.68 for failure to pay for
advertising.

         On August 12, 2002, a Complaint was filed in the Fourth Judicial
District Court in Utah County, State of Utah against American Institute of Skin
Care for default in lease payments on the Company's clinic in Provo, Utah. The
amount of the past due lease payments is $2,900 plus court costs, attorney's
fees and penalties of approximately $1,600. On August 23, 2002 a Default
Judgment was entered in the Fourth Judicial District Court against Wasatch
Pharmaceutical, Inc., aka American Institute of Skin Care in the amount of
$6,543.09.

         The Internal Revenue Service and the Utah State Tax Commission have
each filed a Notice of Intent to Levy for delinquent payroll taxes owing in the
combined amount of $167,659.

         To this date, the Company has not had the resources to fully implement
its plan for the development and expansion of its Internet and clinic
operations. Due to the lack of working capital, the Company's financial
statements contain a "going concern" disclosure, which places into question the
Company's ability to continue without substantial increases in revenues or
additional long-term financing. At August 31, 2002, the Company was forced to
lay off all of its employees because of the shortage of cash flow. On September
9, 2002, the Company filed for relief under Chapter 7 of the federal bankruptcy
law. The purpose of the filing was to forestall a Writ of Execution by one
creditor who had obtained a judgment against the Company for $235,000 and was in
the process of executing on that judgment. On November 25, 2002, the bankruptcy
filing was dismissed. The Company is seeking funding, part of which will be used
to satisfy this judgment and several other judgments and tax liens which total
approximately $1 million. For details of the judgments, see Item I, Legal
Proceedings. As funding is received, the Company will enter into negotiations
with these creditors to settle or establish payment schedules over time to
fulfill its debt obligations. As of the date of this filing, adequate funding
has not been received and there are no guarantees that it will.

                                        5
<PAGE>

Item 2.  Changes In Securities

         Unless otherwise noted, the following transactions for the Registrant's
third quarter of fiscal 2002 were all classified as the sale or transfer of
unregistered securities issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act. All such sales or transfers were without
direct or indirect general solicitation or advertising. In addition, to the best
of the Registrant's knowledge, the share recipient was sophisticated in
financial investments and received a variety of financial and other information
from and about the Registrant and had access to the Registrant's reports filed
with the Securities and Exchange Commission.

         On August 28, 2002, 300 million restricted common shares were issued to
Mr. Gary Heesch, CEO of the Registrant, for past services and obligations. These
shares were then pledged as collateral on a $10,000 loan made to Mr. Heesch
personally and then the loan proceeds were transferred directly to the Company.
The Company assumed the loan obligations on the same terms and conditions that
Mr. Heesch was committed.

         On August 13, 2002, the Company went into default on a $100,000 loan
which had originally been made to Gary Heesch, but had been assumed by the
Company when the funds were received directly by the Company. A total of 1
billion shares of restricted common stock had been pledged as collateral on the
loan. As of the date of this filing, the lender had not given notice of
foreclosure on the 1 billion shares which are being held by the lender.

         The Registrant agreed to compensate, with shares of common stock, a
management consultants for his loyal and valuable services performed during the
past several years. Due to the results oriented nature of the work, the
benchmark for recognizing and establishing the value of their loyal services was
not determinable. In the third quarter of 2002, management concluded that it
should recognize his loyalty and contributions of the past. Consequently, the
Registrant and the consultants agreed that the fair value for these prior
services was $55,000. The following shares of the Company's common stock were
issued as compensation:

         o        On August 28, 2002, the Registrant issued 500 million shares
                  of the Registrant's restricted common stock.

         o        On September 3, 2002, the Registrant issued 50 million shares
                  of the Registrant's restricted common shares.

In 1st quarter, 2002, the Registrant issued 310 million restricted shares of its
common stock to Gary Heesch, CEO, Dave Giles, CFO, and Robert Arbon, Director of
the Registrant, as security on unpaid compensation. The total compensation owing
to the aforementioned three officers was $870,300. A nominal value was used to
record the shares of common stock collateral because they are issued as security
for future payments that are contingent upon the Company achieving profitability
and a positive cash flow. Due to declining stock values during the 2nd quarter,
the Registrant issued an additional 2.85 billion Company common shares to Mr.
Heesch and 2,85 billion shares to Mr. Giles as security on this debt. During the
3rd quarter, the Registrant issued an additional 2 billion common shares to Mr.
Heesch and 2 billion common shares to Mr. Giles. On November 18, 2002, the Board
of Directors voted to issue 3.44 billion common shares to David Giles as
additional collateral on this debt. These additional shares were also recorded
at a nominal value.

         Under the terms of a Promissory Note for $300,000 dated June 20, 2001
and due December 16, 2001, the Registrant was obligated to issue restricted
common shares of the Company as collateral for the loan and to maintain a value
for these collateral shares equal to twice the amount of the $300,000 principal
value of the loan. Through the 1st quarter 2002, the Registrant had issued 39.5
million restricted common shares to fulfill this collateral share value
obligation. During the 2nd quarter, the market value of the common stock
declined significantly going from a high of $.01 to a low of $.0001. Due to this
significant decline in market value, the Registrant issued an additional
4,965,500,000 collateral shares. During the 3rd quarter, the Registrant issued
an additional 4.5 billion of common stock collateral shares. These shares were
recorded at a nominal value.

Item 3.  Defaults Upon Senior Securities  - None.

Item 4.  Submission Of Matters To A Vote Of Securities Holders  - None.

Item 5.  Other Information  - None.

                                        6
<PAGE>

Item 6.  Exhibits And Reports On Form 8-K

         (a)      Exhibits.

                  Exhibit
                  Number:

                  1.1      Certification of Gary V. Heesch, President (chief
                           executive officer) of Wasatch Pharmaceutical, Inc.
                           and David K. Giles Treasurer (chief accounting
                           officer) of Wasatch Pharmaceutical, Inc., pursuant to
                           18 U.S.C.ss.1350, as adopted pursuant toss.906 of the
                           Sarbanes-Oxley Act of 2002.

         (b)      Reports on Form 8-K -

         A Form 8-K was filed July 17, 2002 to report that on July 15, 2002, the
Board of Directors approved and then filed an Amendment to the Articles of
Incorporation to increase the authorized common shares from twenty billion to
thirty billion. Also the Registrant disclosed that additional restricted shares
of common stock were issued as collateral to Gary Heesch, CEO, (two billion
shares) and David Giles, CFO, (two billion shares) under the aforementioned
Compensatory Stock Issue Agreement and to Collier Management and Development
Company (4.5 billion shares) under the terms of a $300,000 loan agreement. The
additional share issue was necessary due to the continuing deterioration of the
market share value of the Registrant's common stock.

         A Form 8-K was filed October 28, 2002 to report that on September 9,
2002, the Company had filed a Chapter 7 bankruptcy filing. The Company announced
its intent to seek a dismissal of the bankruptcy filing.



                                   SIGNATURES

Pursuant to the requirements 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.

WASATCH PHARMACEUTICAL, INC.


Dated:   December 1,  2002



By: /s/ David K. Giles
   -----------------------------------------------
David K. Giles
Chief Financial Officer & Corporate Secretary

                                        7