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 March 31, 1998

        [ ] 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


                    714 East 7200 South, Midvale, Utah 84047
               (Address of principal executive offices) (Zip Code)

                                 (801) 566-9688
                 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 [X ] No [ ] 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 Common Stock, $.001- 5,968,773 Outstanding as of March 31, 1998

         (This amount  includes  56,477  shares paid for but  unissued  awaiting
appropriate  documentation  and excludes  2,623,664 shares subscribed to but not
paid for.)

<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 foot notes 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 March 31, 1998, and
the related audited balance sheet of the Registrant as of December 31, 1997, the
unaudited  related  statements of operations  and cash flows for the three month
periods  ended March 31, 1998 and 1997 and from  inception  (September  7, 1989)
through  March 31, 1998,  are attached  hereto and  incorporated  herein by this
reference.

         Operating  results  for  the  quarter  ended  March  31,  1998  are not
necessarily  indicative  of the results that can be expected for the year ending
December 31, 1998.

         The following financial statements are included in this report:

         Consolidated Balance Sheet as of March 31, 1998 and
           December 31, 1997.............................................   F-1

         Consolidated Statements of Operations for the Quarter ended
           March 31, 1998, 1997 and from inception (September 7, 1989)
           through March 31, 1998.......................................    F-2

         Consolidated Statements of Changes in Common Stockholders'
           (Deficit) for the Quarter ended March 31, 1998................   F-3

         Consolidated Statements of Cash Flows for the Quarter ended
            March 31, 1998, 1997, and from inception (September 7, 1989)
            through March 31, 1998.......................................   F-4

         Notes to the Consolidated Financial Statements..................   F-5

                                       2
<PAGE>

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
        OF OPERATIONS

OVERVIEW

         The Company has  proprietary  technology  for the  treatment of various
common skin disorders,  including acne, eczema, and psoriasis.  After completing
successful clinical studies, prototype clinics were established with the goal of
duplicating  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 through  Company
clinics  across the country.  Two prototype  treatment  clinics are currently in
operation in Utah. Although the Company has confirmed the technology through the
successful  treatment  of hundreds of patients  over the last four years 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.

         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.

         The Company is seeking  funding to establish  an Internet  presence and
open  additional  clinics  in major  metropolitan  areas  and to  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  and  supplemented  by a  physician  referral  program,  revenues  could be
increased  substantially  with the  infrastructure in place that is operating at
10% to 15% of clinic capacity.

LIQUIDITY AND CAPITAL RESOURCES

         At March 31,  1998,  the  Company  had  current  assets of $43,909  and
current  liabilities  of  $1,857,950,  generating a working  capital  deficit of
$1,814,041, which is a 7.9% increase from December 31, 1997. The increase in the
deficit is due to the Company's  operating loss of $160,287 for the  three-month
period ended March 31, 1998.  The deficit was financed  with new  borrowings  of
$98,724,  additional  shareholder investment of $26,154 and creditor forbearance
of $35,409.

RESULTS OF OPERATIONS

         For the three months ended March 31, 1998,  the Company had revenues of
$21,076, compared to revenues of $22,247 for the same period of 1997, a decrease
of $1.171or 5.3%. The Company's operating expenses increased by 67.7% or $26,909
in the first three  months of 1998,  as  compared  to the first three  months of
1997.  This was  primarily  due to an  increase  in salary  expense  for  clinic
technicians.

         The Company's  corporate expenses decreased to $79,514 from $82,555 and
interest  expense  increased  to $35,220  from  $21,821.  These  variations  are
attributable to the timing of expenditures  for fund raising  activities and the
increasing  Company  debt.  For the first  quarter of 1998 the Company had a net
loss of $160,287 compared to a loss of $ 126,499 in the same period of 1997. The
Company  anticipates  that the losses will  continue  until  funding is obtained
which will be used to launch the Company's business plan.

                                       3
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


ITEM 2.  CHANGES IN SECURITIES

         During the first  quarter  the  following  common  share
transactions occurred:

a.       Exchanged oil and gas properties for 1,800,000 shares of Wasatch common
         Stock.
b.       Issued 43,334  restricted  common shares to creditors for extensions of
         due dates.
c.       Issued 73,340 restricted common shares for cash totaling $ 10,000.
d.       Rescinded an exchange of 750,000  restricted  common  shares for 12,000
         preferred shares of an insurance company.
e.       Forgave a $520,390 debt for issued common stock in connection  with the
         above exchange for oil and gas properties.
f.       Issued 92,436 common shares that were  previously paid for but unissued
         awaiting appropriate documentation.

         The  common  shares  were  issued in  reliance  on the  exemption  from
registration  provided  by Section 4 (2) of the  Securities  Act of 1934 and the
"Safe Harbor" of Regulation D, Rule 504.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES  - None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS  - None.

ITEM 5.  OTHER INFORMATION  - None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

         Exhibit
         Number:      Exhibit

             27       Financial Data Schedule (included only in the electronic
                      filing of this document).

     (b) Reports on Form 8-K

         On March 9, 1998,  The Company  filed the  following  report on Form 8K
describing the disposition of certain assets.

                                     Summary

         In  November  1997,  after  determining  the oil and gas  developer  of
Wasatch's West Virginia oil and gas  properties  would not be able to meet their
commitments in accordance the contractual  arrangements,  the Board of Directors
authorized  management  to exchange  the  Company's  West  Virginia  oil and gas
properties  for the common  shares  originally  issued by Wasatch.  Negotiations
commenced and an  acceptable  solution was reached in February  1998.  Under the
agreed upon  exchange  arrangement,  Wasatch would return title to the fifty oil
and gas wells  acquired in exchange  for  1,800,000  of the shares  issued and a
release from all obligations associated with the oil and gas operations.

         Affiliates of the principals to the oil and gas  transaction  had given
the Registrant notes receivable for common shares issued. It was agreed that the
amount due on shares issued,  at the time of the exchange  ($520,390),  would be
forgiven.  This  reduction in the  obligation  was  reflected  in the  financial
statements  as a charge to Additional  Paid In Capital  during the quarter ended
March 31, 1998.

                                       4
<PAGE>

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: April 14,  2000

By: /s/ David K. Giles
    ------------------------
    David K. Giles
    Principal Accounting Officer

                                       5
<PAGE>
<TABLE>
<CAPTION>
                          WASATCH PHARMACEUTICAL, INC.
                         (A Development Stage Company)
                          Consolidated Balance Sheets
                                                                            March 31,           December 31,
                                                                              1998                  1997
                                                                       --------------------   ------------------
                                                                           (Unaudited)
CURRENT ASSETS
<S>                                                                               <C>                  <C>
    Cash                                                                          $ 31,362             $ 14,259
    Accounts receivable - trade                                                      7,535                7,839
    Inventory                                                                        4,412                3,642
    Prepaid expenses                                                                   600               15,663
                                                                       --------------------   ------------------
       Total Current Assets                                                         43,909               41,403
                                                                       --------------------   ------------------

PROPERTY AND EQUIPMENT
    Furniture and office equipment                                                  41,554               41,554
       Less accumulated depreciation                                               (23,370)             (21,662)
                                                                       --------------------   ------------------
    Net Property and Equipment                                                      18,184               19,892
                                                                       --------------------   ------------------
OTHER ASSETS                                                                           875                  875
                                                                       --------------------   ------------------
    TOTAL ASSETS                                                                  $ 62,968             $ 62,170
                                                                       ====================   ==================

CURRENT LIABILITIES
    Accounts payable - trade                                                     $ 223,701            $ 229,234
    Accrued interest                                                               262,132              229,484
    Other accrued expenses                                                         207,342              198,293
    Notes and advances currently due
       Short-term shareholder loans                                                 24,054               31,581
       Vendors                                                                     112,333              112,333
       Stockholders                                                              1,028,388              921,388
                                                                       --------------------   ------------------

    TOTAL LIABILITIES                                                            1,857,950            1,722,313
                                                                       --------------------   ------------------

STOCKHOLDERS' EQUITY
    Preferred stock, $0.001 par value, 1,000,000
    shares authorized 49,258 issued & outstanding
       Series A                                                                         49                   49
    Common stock, $0.001 par value, 50,000,000
     shares authorized, 8,592,437 shares and
    9,225,763 shares issued and outstanding.                                         8,592                9,226
    Additional paid-in capital                                                   1,281,959            1,792,421
    Accumulated development stage deficit                                       (2,926,236)          (2,765,949)
                                                                       --------------------   ------------------
                                                                                (1,635,636)            (964,253)
       Less notes receivable from stockholders                                    (159,346)            (695,890)
                                                                       --------------------   ------------------
    Total Stockholder's Equity                                                  (1,794,982)          (1,660,143)
                                                                       --------------------   ------------------
    TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY (DEFICIT)                                            $ 62,968             $ 62,170
                                                                       ====================   ==================
</TABLE>
            The accompanying footnotes are an integral part of these
                             financial statements.

                                      F-1
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                      Consolidated Statement of Operations
                                   (Unaudited)

                                                                        For The
                                                                   Three Months Ended                For The
                                                                       March 31,                   Period From
                                                           -----------------------------------     Inception To
                                                                1998               1997             March 31, 1998
                                                           ----------------   ----------------   ---------------------
   REVENUES
<S>                                                         <C>                <C>               <C>
       Professional fee income                                     $ 7,572            $ 7,248           $ 192,420
       Product sales                                                13,504             14,999             382,443
                                                           ----------------   ----------------   -----------------
               TOTAL REVENUES                                       21,076             22,247             574,863
                                                           ----------------   ----------------   -----------------

    OPERATING EXPENSES
       Cost of products sold                                         1,423              1,019              44,500
       Salaries                                                     36,809             18,503             361,530
       Employee leasing                                                  -                  -             218,745
       Payroll taxes                                                 3,435              2,375              36,594
       Physicians fees                                              10,200             10,200             207,868
       Rent                                                         11,718              8,035             146,861
       Advertising                                                    (632)             4,359             211,919
       Depreciation                                                  1,314              1,687              25,314
       Other                                                         2,362             (6,458)             59,244
                                                           ----------------   ----------------   -----------------
           Total Operating expenses                                 66,629             39,720           1,312,576

    GENERAL & ADMINSTRATIVE EXPENSE                                 79,514             82,555           1,447,322
    INTEREST                                                        35,220             21,821             331,482
                                                           ----------------   ----------------   -----------------
               TOTAL EXPENSES                                      181,363            144,096           3,091,380
                                                           ----------------   ----------------   -----------------
    INCOME (LOSS) BEFORE DISCONTINUED
       OPERATIONS AND THE PROVISION
       FOR INCOME TAXES                                           (160,287)          (121,849)         (2,516,517)

    LOSS FROM DISCONTINUED OPERATIONS                                    -             (4,650)           (409,718)
                                                           ----------------   ----------------   -----------------
    INCOME (LOSS) BEFORE THE PROVISION
       FOR INCOME TAXES                                           (160,287)          (126,499)         (2,926,235)
    Provision for Income Taxes                                           -                  -                   -
                                                           ----------------   ----------------   -----------------
    NET INCOME (LOSS)                                           $ (160,287)        $ (126,499)       $ (2,926,235)
                                                           ================   ================   =================
    NET (LOSS) PER COMMON SHARE                                   $ (0.016)          $ (0.018)           $ (0.492)
                                                           ================   ================   =================
    WEIGHTED AVERAGE SHARES OUTSTANDING                         10,017,472          7,198,178           5,950,765
                                                           ================   ================   =================
</TABLE>
                 The accompanying footnotes are an integral part
                         of these financial statements.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                  Consolidated Statements of Changes in Common
                            Stockholders' (Deficit)
                                   (Unaudited)

                                                                               For The
                                                                         Three Months Ended               For The
                                                                              March 31,                 Period From
                                                                   --------------------------------    Inception To
                                                                        1998             1997         March 31, 1998
                                                                   ---------------  ---------------   ----------------
    CASH FLOWS FROM OPERATING
       ACTIVITIES
<S>                                                             <C>                <C>              <C>
       Net Income (Loss)                                        $        (160,287) $      (126,499) $      (2,926,235)
    Adjustments to Reconcile Net Income
       (Loss) to Net Cash Provided (Used)
       by Operating Activities

        Depreciation                                                        1,706            2,589             25,706

        Loss on fixed asset disposal                                            -                -            400,019
          Oil and gas assets                                                    -                -                  -
        Expenses paid with common shares                                       43                -                 43
        Increase (decrease) in working capital
          (Increase) decrease in receivables                                  305              929             (7,535)
          (Increase) decrease in related party receivable                       -                -                  -
          (Increase) decrease in inventory                                   (770)          (1,227)            (4,412)
          (Increase) decrease in prepaid expenses                          15,063                -               (600)
          Increase (decrease) in accounts payable                          (5,532)          21,267            223,703
          Increase (decrease) in accrued interest                          32,647           21,677            262,132
          Increase (decrease) in other accruals                             9,050           30,846            207,342
                                                                   ---------------  ---------------   ----------------
    Net Cash Provided (Used) by
        Operating Activities                                             (107,775)         (50,418)        (1,819,837)
                                                                   ---------------  ---------------   ----------------
    CASH FLOWS FROM INVESTING
       ACTIVITIES
        Purchase of fixed assets
          Clinics                                                               -          (25,096)           (27,764)
      (Increase) decrease in other assets                                       -          (11,757)              (875)
                                                                   ---------------  ---------------   ----------------
    Net Cash Provided (Used) by
        Investing Activities                                                    -          (36,853)           (28,639)
                                                                   ---------------  ---------------   ----------------
    CASH FLOWS FROM FINANCING
       ACTIVITIES
        Proceeds from borrowings                                          141,296           55,000          1,334,329
        Expenses paid by shareholder                                            -                -             38,324
        Repayment of loans                                                (42,572)          (5,000)          (165,325)
        Proceeds from sale of common shares                                10,000                -            358,205
        Capital contributed by shareholder                                      -                -            154,800
        Collection of share subscriptions                                  16,154           30,000            115,714
        Common shares exchanged for debt                                        -                -             12,317
        Exercised stock options                                                 -                -            125,250
        Redemption of common shares                                             -                -            (20,409)
        Costs of raising funds                                                  -           (3,517)           (73,366)
                                                                   ---------------  ---------------   ----------------
    Net Cash Provided (Used) by
        Financing Activities                                              124,879           76,483          1,879,838
                                                                   ---------------  ---------------   ----------------
    NET INCREASE (DECREASE) IN
       CASH AND CASH EQUIVALENTS                                           17,104          (10,788)            31,363
    CASH AND CASH EQUIVALENTS
        At Beginning of Period                                             14,259           11,990                  -
                                                                   ---------------  ---------------   ----------------
        At End of Period                                           $       31,362   $        1,202    $        31,363
                                                                   ===============  ===============   ================
</TABLE>
                   The accompanying footnotes are an integral
                      part of these financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                      Conslidated Statements of Cash Flows
                                   (Unaudited)


                                                 Preferred       Common Stock           Additional      Accumulated        Total
                                                   Stock    ----------------------       Paid - In      Development    Stockholders'
                                                  Amount     Shares        Amount         Capital      Stage Deficit       Equity
                                                 ---------  ----------   ---------      ------------  ---------------    -----------
<S>                                                <C>      <C>           <C>           <C>            <C>              <C>
First Quarter
Stockholders equity-per committed contracts
    Balance December 31, 1997                      $ 49     9,225,763     $ 9,226       $ 1,792,421    $(2,765,949)     $ (964,253)

    Shares issued for note extensions                          43,334          43                                               43
    Shares  sold for cash                                      73,340          73             9,928                         10,001
    Exchange of preferred shares held for
         investment for originally issued shares             (750,000)       (750)                                            (750)
    Charge for per share price reduction of
         shares held under subscription notes                                              (520,390)                      (520,390)
    Net loss for the three months ended
         March 31, 1998                                                                                   (160,287)       (160,287)
                                                   ----     ---------     -------       -----------    -----------    ------------
Stockholders Equity March 31, 1998 including
    commitments for future transactions              49     8,592,437       8,592         1,281,959     (2,926,236)     (1,635,636)

Shares issued for future transactions                      (2,623,664)     (2,624)         (156,747)                      (159,371)
                                                   ----     ---------     -------       -----------    -----------    ------------

Stockholders Equity March 31, 1998                 $ 49     5,968,773     $ 5,969       $ 1,125,212    $(2,926,236)   $ (1,795,006)
                                                   ====     =========     =======       ===========    ===========    ============
</TABLE>
                   The accompanying footnotes are an integral
                      part of these financial statements.

                                      F-4
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)

                 Notes to the Consolidated Financial Statements
                                   (unaudited)

NOTE 1 - NATURE AND HISTORY OF THE BUSINESS

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

         Medisys  Research  Group,  Inc.,  a  Utah  corporation,  (Medisys)  was
incorporated  on  September  7, 1989 for the  purpose  of  developing  treatment
programs for various skin disorders.  On January 21, 1994, American Institute of
Skin Care,  Inc.  (AISC) was  incorporated  as a wholly owned Utah subsidiary of
Medisys to administer the skin treatment programs developed by Medisys.

         On December 29, 1995, Ceron Resources Corporation and Medisys completed
an  Agreement  and  Plan  of  Reorganization  whereby  Ceron  issued  85% of its
outstanding  shares  of  common  stock in  exchange  for all of the  issued  and
outstanding  common  stock  of  Medisys  and the  name was  changed  to  Wasatch
Pharmaceutical, Inc.

         Medisys accounted for the acquisition of Medisys by Ceron as a purchase
because the shareholders of Medisys control the surviving company.  There was no
adjustment  to the carrying  value of the assets or  liabilities  of Ceron in as
much as its market  value  approximated  the  carrying  value of net assets.  In
summary,  Ceron is the  acquiring  entity for legal  purposes and Medisys is the
surviving entity for accounting purposes.

         For the purpose of this financial  presentation  "Inception" shall mean
September 7, 1989, which was the commencement of Medisys operations.

         Disposition  of Oil and Gas Business - On November  20,  1996,  Wasatch
exchanged 2,000,000 of its common shares for a 25% interest in fifty oil and gas
wells  located  in  western  West  Virginia.  Under the terms of the  agreement,
Wasatch's  was entitled to 25% of the revenues and incurred 25% of the operating
expenses from the wells.

         At the time they were acquired,  the properties  were not  economically
productive.  The  transaction  was based on the property  developer  raising the
funds to increase  productivity  in each of the wells in 1997. The Company would
not bear any of the enhanced  production costs. There were no costs incurred for
reworking wells in 1997 or 1996.

         In  accordance  with  generally  accepted  accounting   principles  for
non-monetary  transactions,  the  acquired  properties  were  recorded at a fair
market  value that was derived  from the cash price for  comparable  recoverable
reserves but is not in excess of risk discounted future net revenues.

         In third quarter of 1997,  Wasatch called upon the oil and gas property
developer to demonstrate its ability to meet  commitments  under the acquisition
agreement.  The  developer  acknowledged  that  they  were  unable  to meet  the
contractual commitments..

         In November 1997, the Wasatch Board of Directors authorized  management
to exchange the Company's  West Virginia oil and gas  properties  for the common
shares issued by Wasatch.  Negotiations commenced and an acceptable solution was
reached in February 1998.  Under the agreed upon exchange  arrangement,  Wasatch
would  return  title to the fifty oil and gas wells  acquired  in  exchange  for
1,800,000  of the  original  shares  issued and a release  from all  obligations
associated  with the oil and gas  operations.  In  addition,  Wasatch  agreed to
forgive a $520,390 debt owed it for the purchase of common stock by an affiliate
of the developer.

                                      F-5
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)

                 Notes to the Consolidated Financial Statements
                                   (unaudited)

NOTE 1 - NATURE AND HISTORY OF THE BUSINESS (Continued)

         The exchange  transaction  results in a material  loss on disposal of a
segment of business.  Consequently, the loss from the exchange and the loss from
operations are retroactively  included in the loss from discontinued  operations
at December 31, 1997.

NOTE 2 - CHANGES IN PRESENTATION

         Certain financial presentations for the first quarter of 1997 have been
reclassified to conform to the 1998 presentation.

NOTE 3 - GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  expenses for the  comparative  three month
periods ended and from inception through March 31, 1998 are:


                                                 First Quarter        Inception
                                           ----------------------     March 31,
                                               1998        1997         1998
                                           ----------- ----------  ------------
         Officer's compensation              $34,242      32,825      $617,645
         Legal and accounting                 13,289      15,776       228,067
         Finders fees                          7,250           0         7,250
         Travel                                4,647       4,995        68,621
         Telephone                             3,639       4,261        51,507
         Insurance                               455         162        15,512
         Postage                                 875           0        14,458
         Payroll tax penalties                     0           0        16,433
         Other                                15,119      24,536       435,079
                                           ---------- -----------  ------------
         Total                               $79,514     $82,555    $1,447,322
                                           ========== ===========  ============

NOTE 4 - GOING CONCERN PREMISE

         The  Company's  financial   statements  are  prepared  using  generally
accepted accounting principles applicable to a going concern, which contemplates
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 to operate.
The Company is seeking an  agreement  to raise  short-term  funding and plans to
seek  long-term  funding  through a stock  offering.  Management  believes  that
sufficient  funding  will be raised to meet the  operating  needs of the Company
during the remainder of development stage.

                                      F-6