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, 1999

        [ ] 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 [ ] 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 Common Stock,  $.001 - 16,844,535 issued and outstanding as of September
30, 1999.

(This amount includes 10,044 shares paid for but unissued  awaiting  appropriate
issue  documentation  and  excludes  26,235,000  shares  issued  to  secure  the
Registrant's obligations and subscription receivable for 500,000 shares)

<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 September 30, 1999,
and the related audited balance sheet of the Registrant as of December 31, 1998,
the unaudited  related  statements  of  operations  and cash flows for the three
month  and  nine  month  periods  ended  September  30,  1999  and 1998 and from
inception  (September 7, 1989) through  September 30, 1999, are attached  hereto
and incorporated herein by this reference.

         Operating  results for the quarter and nine months ended  September 30,
1999 are not necessarily  indicative of the results that can be expected for the
year ending December 31, 1999.

The following financial statements are included in this report:

         Consolidated Balance Sheet as of September 30, 1999 and
           December 31, 1998...............................................F-1

         Consolidated  Statements of Operations for the Nine Months
           and Quarter ended September 30, 1999,1998, and from
           inception (September 7, 1989) through September 30, 1999.....F-2, 3

         Consolidated  Statements of Changes in Common  Stockholders'
           (Deficit) for the Nine Months and Quarter ended September
           30, 1999, 1998 and from inception (September 7, 1989)
           through September 30, 1999......................................F-4

         Consolidated Statements of Cash Flows for the Nine Months
           and Quarter ended September 30, 1999, 1998 and from
           inception (September 7, 1989) through September 30, 1999.....F-5, 6

         Notes to the Consolidated Financial Statements..................F-7,8

                                       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 a network of 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 five years and has set up the business and administrative
procedures  for clinic  operations,  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 clinic  operation.  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 open  additional  clinics in major
metropolitan  areas,  to launch its  treatment  process  and  products  over the
Internet and to commence a major  advertising and marketing  campaign to support
each of its business units.  Management feels that through advertising,  working
with  health  insurance  companies  and HMOs  and  supplemented  by a  physician
referral program,  revenues could be increased  substantially  thereby improving
the 10% to 15% of clinic capacity currently being experienced.

LIQUIDITY AND CAPITAL RESOURCES

         At  September  30, 1999,  the Company had current  assets of $7,796 and
current  liabilities  of  $3,506,122;  generating a working  capital  deficit of
$3,498,326.  Which is a 25% increase from December 31, 1998. The increase in the
deficit is due primarily to the Company's (i) operating loss ($799,000) and (ii)
the unsuccessful  pursuit of infusion capital ( $350,000) and (iii) the interest
to service existing debt ($264,000).

RESULTS OF OPERATIONS

         During the first nine months  ending  September  30, 1999,  the Company
revenues   remained  minimal  as  the  clinics   continued  to  emphasize  skill
maintenance  and training.  At the current  level of business,  less than 10% of
capacity,  it will  be very  difficult  to  maintain  skill  levels  and  retain
important staff  personnel.  Over the last three years,  revenues have decreased
33% annually and expenses have increased 3% to 6%.

         The Company's  operating  expenses increased by 10,7% or $20,348 in the
first nine months of 1999,  as  compared  to the same  period in 1998.  This was
driven by an increase in salaries and other semi-fixed clinic costs. G & A costs
increased  46% when you  compare  the nine  months of 1999 to the nine months of
1998.  The  principal  increases  were  officers   compensation   ($82,000)  and
professional services ($79,500). The officers salaries increase reflects the new
Company policy of accruing the full amount  authorized as  compensation  for the
period  and not just  the  smaller  amounts  actually  paid.  The  increases  in
professional   services  of  $79,500  are  attributable  to  outside   counsel's
preparation  for the pending  litigation with  Lindbergh-Hammar  and legal costs
associated with the Berkshire-Halifax matter.

         Interest expense for the first nine months increased to $264,300in 1999
versus  $177,906  in  1998.  This  increase  reflects  the  Company's  continued
dependency  on debt  financing as a vehicle for funding  operations.  During the
comparative  nine  months  ending in  September  of 1999 and 1998,  the net debt
increase was $264,000 and $773,000, respectively.

                                       3
<PAGE>

         For the first  three  quarters  of 1999 the  Company  had a net loss of
$799,349  compared  to a net loss of  $556,844  in the same  period of 1998.  To
summarize  previously  discussed  factors,  the lack of fundamental  operational
funding  prohibits  the Company from building its revenue base  sufficiently  to
support its continuing  operation.  The Company anticipates that the losses will
continue  until  funding  is  obtained  which  will be used to launch  the major
elements of the business plan.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

                  None.

ITEM 2.  CHANGES IN SECURITIES
         During  the third  quarter  the  following  common  share  transactions
occurred:

         a.       Issued  127,000   restricted  common  shares  were  issued  to
                  consultants for services rendered.
         b.       Issued  2,500  restricted   common  shares  to  creditors  for
                  extensions of due dates.
         c.       Issued 176,900 restricted common shares for cash consideration
                  totaling $18,845
         d.       Issued 272,304  restricted common shares for debt and interest
                  totaling $56,627.
         e.       Issued  500,000  restricted  common  shares  as  interim  loan
                  collateral to be returned at debt satisfaction.

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

                       None

                                       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 15,  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 SHEET
                    SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
                    ----------------------------------------

                                     ASSETS

                                                                                        1999               1998
                                                                                     -----------       -----------
                                                                                     (Unaudited)
CURRENT ASSETS
<S>                                                                                  <C>               <C>
     Cash                                                                            $         -       $     2,589
     Accounts receivable - trade                                                           2,364             7,175
     Inventory                                                                             4,832             7,158
     Prepaid expenses                                                                        600               600
                                                                                     -----------       -----------
Total Current Assets                                                                       7,796            17,522
                                                                                     -----------       -----------
PROPERTY AND EQUIPMENT
     Clinic and office equipment                                                          43,038            41,554
     Less accumulated depreciation                                                       (33,539)          (28,492)
                                                                                     -----------       -----------
        Net Property and Equipment                                                         9,499            13,062
                                                                                     -----------       -----------
OTHER ASSETS                                                                              10,200               200
                                                                                     -----------       -----------
TOTAL ASSETS                                                                         $    27,495       $    30,784
                                                                                     ===========       ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable - trade                                                        $   224,657       $   237,609
     Accrued interest                                                                    476,571           356,260
     Accrued salaries                                                                    489,331           291,114
     Payroll taxes                                                                       102,331            85,136
     Other accrued expenses                                                               34,370            60,628
     Notes and advances currently due:
        Short-term shareholder advances                                                   92,840            18,157
        Vendors                                                                          112,333           112,333
        Stockholders and others                                                        1,973,689         1,783,946
                                                                                     -----------       -----------
Total Liabilities                                                                      3,506,122         2,945,183
                                                                                     -----------       -----------

STOCKHOLDERS' DEFICIT
     Preferred stock, $0.001 par value, 1,000,000
        shares authorized 49,258 issued and outstanding                                       49                49
     Common stock, $0.001 par value, 50,000,000 shares
        authorized, 43,579,535 shares issued and outstanding                              43,580            38,823
     Additional paid-in capital                                                        1,552,961         1,322,096
     Accumulated development stage deficit                                            (5,023,981)       (4,224,632)
                                                                                     -----------       -----------
                                                                                      (3,427,392)       (2,863,664)

     Less shares issued for collateral or notes receivable                               (51,235)          (50,735)
                                                                                     -----------       -----------
Total Stockholders' Deficit                                                           (3,478,627)       (2,914,399)
                                                                                     -----------       -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                          $    27,495       $    30,784
                                                                                     ===========       ===========
</TABLE>
 The accompanying footnotes are an integral part of this financial information

                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

                                                                   For the Quarter Ended
                                                                        September 30            From Inception
                                                                  ----------------------------  To September 30,
                                                                     1999               1998           1999
                                                                  ----------         ---------     ------------
REVENUES
<S>                                                               <C>                <C>           <C>
    Professional fee income                                       $    4,300         $   6,710     $    226,329
    Product sales                                                      7,070            11,676          445,968
                                                                  ----------         ---------     ------------
            Total Revenues                                            11,370            18,386          672,297
                                                                  ----------         ---------     ------------

OPERATING EXPENSES
    Cost of products sold                                                993               930           50,611
    Salaries                                                          46,081            40,047          602,406
    Employee leasing                                                       -                 -          218,745
    Payroll taxes                                                      3,710             3,395           56,628
    Physicians fees                                                    9,175            11,400          262,460
    Rent                                                               8,444             8,317          197,815
    Advertising                                                          250             1,056          214,587
    Depreciation                                                       1,281             1,314           33,237
    Other                                                              6,917              (132)          74,491
                                                                  ----------         ---------     ------------
            Total Operating Expenses                                  76,851            66,327        1,710,980

GENERAL AND ADMINISTRATIVE EXPENSE                                   136,136            71,588        2,760,901
INTEREST                                                              82,936           113,164          814,679
                                                                  ----------         ---------     ------------
            Total Expenses                                           295,922           251,079        5,286,560
                                                                    --------          --------       ---------

LOSS BEFORE DISCONTINUED OPERATIONS AND
    THE PROVISION FOR INCOME TAXES                                  (284,552)         (232,693)      (4,614,263)

    LOSS FROM DISCONTINUED OPERATIONS                                      -                 -         (409,718)
                                                                  ----------         ---------     ------------

NET LOSS BEFORE INCOME TAXES                                        (284,552)         (232,693)      (5,023,981)

    PROVISION FOR INCOME TAXES                                             -                 -                -
                                                                  ----------         ---------     ------------

NET LOSS                                                          $ (284,552)       $ (232,693)    $ (5,023,981)
                                                                  ==========        ==========     ============

    Loss per share before discounted operations                   $   (0.007)       $   (0.012)    $     (0.352)
    Loss per share from discounted operation                              -                 -            (0.031)
                                                                  ----------         ---------     ------------

BASIC LOSS PER COMMON  SHARE                                      $   (0.007)       $   (0.012)    $     (0.383)
                                                                  ==========        ==========     ============
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING                         19,031,828        19,347,819       13,107,518
                                                                  ==========        ==========     ============
</TABLE>
 The accompanying footnotes are an integral part of this financial information

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

                                                                    For the Nine Months Ended
                                                                          September 30,          From Inception
                                                                  ----------------------------   To September 30,
                                                                      1999             1998            1999
                                                                  ----------         ---------     ------------
REVENUES
<S>                                                               <C>                <C>           <C>
     Professional fee income                                      $   12,242         $  21,047     $    226,329
     Product sales                                                    24,792            37,990          445,968
                                                                  ----------         ---------     ------------
             Total Revenues                                           37,034            59,037          672,297
                                                                  ----------         ---------     ------------
OPERATING EXPENSES
     Cost of products sold                                             2,603             3,600           50,611
     Salaries                                                        122,836           114,755          602,406
     Employee leasing                                                      -                 -          218,745
     Payroll taxes                                                    10,310             9,930           56,628
     Physicians fees                                                  24,592            30,600          262,460
     Rent                                                             27,882            25,482          197,815
     Advertising                                                       2,035              (120)         214,587
     Depreciation                                                      3,981             3,943           33,237
     Other                                                            17,002             2,703           74,491
                                                                  ----------         ---------     ------------
             Total Operating Expenses                                211,241           190,893        1,710,980

GENERAL AND ADMINISTRATIVE EXPENSE                                   360,840           247,082        2,760,901
INTEREST                                                             264,302           177,906          814,679
                                                                  ----------         ---------     ------------
             Total Expenses                                          836,383           615,881        5,286,560
                                                                  ----------         ---------     ------------

LOSS BEFORE DISCONTINUED OPERATIONS AND
     THE PROVISION FOR INCOME TAXES                                 (799,349)         (556,844)      (4,614,263)

     LOSS FROM DISCONTINUED OPERATIONS                                     -                 -         (409,718)
                                                                  ----------         ---------     ------------

NET LOSS BEFORE INCOME TAXES                                        (799,349)         (556,844)      (5,023,981)

     PROVISION FOR INCOME TAXES                                           -                  -                -
                                                                  ----------         ---------     ------------

NET LOSS                                                          $ (799,349)       $ (556,844)    $ (5,023,981)
                                                                  ==========        ==========     ============

     Loss per share before discounted operations                  $   (0.019)       $   (0.058)    $     (0.352)
     Loss per share from discounted operation                             -                  -          (0.0313)
                                                                  ----------         ---------     ------------

BASIC LOSS PER COMMON  SHARE                                      $   (0.019)       $   (0.058)    $     (0.383)
                                                                  ==========        ==========     ============
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING                         16,582,627         9,629,382       13,107,518
                                                                  ==========        ==========     ============
</TABLE>
 The accompanying footnotes are an integral part of this financial information

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
            ---------------------------------------------------------
                                   (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>
Balance forward December 31, 1998                  $ 49    38,822,821    $ 38,823       $ 1,322,096    $ (4,224,631)    $(2,863,664)
Shares issued in connection with:
     Note extensions                                  -        70,000          70                 -              -              70
     Securities sold for cash                         -        70,000          70             6,930              -           7,000
     Services rendered                                -        83,000          83                 -              -              83
     Employee benefits                                         30,000          30                 -              -              30
Shares issued to potential investor to be used
   as interim loan collateral                         -        30,000          30                 -              -              30
Net loss for the quarter ended March 31, 1999         -             -           -                 -       (227,502)       (227,502)
                                                     --    ----------      ------         ---------     ----------      ----------
Balance March 31, 1999 of stockholders'
     equity-per committed contracts                  49    39,105,821      39,106         1,329,026     (4,452,133)     (3,083,952)
Shares issued in connection with:
     Loan extensions                                           62,314       62.31             2,990                          3,052
     Securities sold for cash                                 400,000         400           139,600                        140,000
     Services rendered                                      2,957,696       2,958                 -                          2,958
     Retirement of debt and interest                            5,000           5             6,337                          6,342
Cost of Raising Funds                                                                           (16)                           (16)
Shares return by potential investor                           (30,000)        (30)                                            (30)
Net loss for the quarter ended June, 1999             -             -           -                 -       (287,296)       (287,296)
                                                     --    ----------      ------         ---------     ----------      ----------
Balance June 30, 1999 of stockholders'
     equity-per committed contracts                  49    42,500,831      42,501         1,477,937     (4,739,428) ... (3,218,941)

Shares issued in connection with:

     Loan extensions                                            2,500           3                                                3
     Securities sold for cash                                 176,900         177            18,668                         18,845
     Services rendered                                        127,000         127                                              127
     Retirement of debt and interest                          272,304         272            56,355                         56,627

Shares issued to potential investor to be used
   as interim loan collateral                                 500,000         500                                              500
Net loss for the quarter
       ended September 30, 1999                       -             -           -                 -       (284,552)       (284,552)
                                                     --    ----------      ------         ---------     ----------      ----------
Balance September 30, 1999 of stockholders'
     equity-per committed contracts                  49    43,579,535      43,580         1,552,960     (5,023,981)     (3,427,392)

     Less: unfunded common shares issued              -   (26,735,000)        (51)          (51,184)             -         (51,235)
                                                     --    ----------      ------         ---------     ----------      ----------

Net Equity September 30, 1999                      $ 49    16,844,535    $ 43,529       $ 1,501,776   $ (5,023,981)    $(3,478,627)
                                                   ====    ==========    ========       ===========   ============     ===========
</TABLE>
 The accompanying footnotes are an integral part of this financial information

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

                                                                            For the Quarter Ended
                                                                                 September 30                     From
                                                                          ----------------------------         Inception To
                                                                            1999               1998           Sept. 30, 1999
                                                                          ---------          ---------          -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                     <C>                <C>              <C>
        Net loss                                                           (284,552)          (232,693)        $ (5,023,981)
     Adjustments to reconcile net (Loss) to net cash
        used by operating activities:

        Depreciation and depletion                                            1,562              1,707               33,539
     Depreciation and losses on fixed asset disposals

        Clinic assets                                                                                -               15,234
        Oil and gas assets                                                                                            4,189
     Loss on disposal of oil and gas properties                                                                     382,933
     Expenses paid with common shares                                                            1,054                    -
     Increase (decrease) in working capital
        (Increase) decrease in receivables                                    1,128             (7,778)              (2,364)
        (Increase) decrease in related party receivable                                                                   -
        (Increase) decrease in inventory                                        893                (12)              (4,832)
        (Increase) decrease in prepaid expenses                                                 (5,269)                (600)
        Increase (decrease) in accounts payable                             (54,180)            (4,087)             224,657
        Increase (decrease) in accrued interest                              29,062             33,254              476,571
        Increase (decrease) in other accruals                                66,489             10,729              626,032
                                                                          ---------          ---------          -----------
        Net cash used by operating activities                              (239,598)          (203,095)          (3,268,623)
                                                                          ---------          ---------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES
        Purchase of fixed assets                                                  -                  -               (29,248)
        Investment in Beehive Project                                                          (500,000)                        -
        (Increase) decrease in other assets                                 (10,000)              211              (10,200)
                                                                          ---------          ---------          -----------
        Net cash provided (used) by investing activities                    (10,000)          (499,789)            (39,448)
                                                                          ---------          ---------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES
        Proceeds from borrowings                                            173,767            843,216           2,640,633
        Expenses paid by shareholder                                              -                  -                38,323
        Repayment of loans                                                                    (200,616)            (456,791)
        Proceeds from sale of common shares                                  18,972            145,000              679,508
        Capital contributed by shareholder                                        -                  -              154,800
        Collection of share subscriptions                                         -                  -              141,726
        Common shares exchanged for debt                                     56,630                  -               78,412
        Exercised stock options                                                   -                  -              125,250
        Redemption of common shares                                               -                  -              (20,409)
        Cost of raising capital                                                   -                  -              (73,382)
                                                                          ---------          ---------          -----------
        Net cash provided used by financing activities                      249,369            787,600            3,308,070
                                                                          ---------          ---------          -----------
NET INCREASE (DECREASE) IN CASH                                                (230)            84,717                    0
     Balance at beginning of period                                             230                230                    -
                                                                          ---------          ---------          -----------
     Balance at end of period                                             $       0          $  84,947          $         0
                                                                          =========          =========          ===========
</TABLE>
 The accompanying footnotes are an integral part of this financial information

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                           For the Nine Months Ended
                                                                                  September 30,                  From
                                                                          ----------------------------        Inception To
                                                                            1999               1998          Sept. 30, 1999
                                                                          ---------          ---------          -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                       <C>                <C>                <C>
         Net loss                                                         $(799,349)         $(556,844)         $(5,023,981)
     Adjustments to reconcile net (Loss) to net cash
         used by operating activities:

         Depreciation and depletion                                           5,047              5,122               33,539
     Depreciation and losses on fixed asset disposals

         Clinic assets                                                            -             (5,413)              15,234
         Oil and gas assets                                                       -                  -                4,189
     Loss on disposal of oil and gas properties                                   -                  -              382,933
     Expenses paid with common shares                                             -              2,204                    -
     Increase (decrease) in working capital
         (Increase) decrease in receivables                                   4,811               (842)              (2,364)
         (Increase) decrease in related party receivable                          -                  -                    -
         (Increase) decrease in inventory                                     2,326                422               (4,832)
         (Increase) decrease in prepaid expenses                                  -              9,794                 (600)
         Increase (decrease) in accounts payable                            (12,952)            (3,293)             224,657
         Increase (decrease) in accrued interest                            120,311             97,621              476,571
         Increase (decrease) in other accruals                              189,154             31,994              626,032
                                                                          ---------          ---------          -----------
         Net cash used by operating activities                             (490,653)          (419,235)          (3,268,623)
                                                                          ---------          ---------          -----------
CASH FLOWS FROM INVESTING ACTIVITIES
         Purchase of fixed assets                                            (1,484)                 -             (29,248)
         Investment in Beehive Project                                                        (500,000)                   -
         (Increase) decrease in other assets                                (10,000)                11              (10,200)
                                                                          ---------          ---------          -----------
         Net cash provided (used) by investing activities                   (11,484)          (499,989)             (39,448)
                                                                          ---------          ---------          -----------
CASH FLOWS FROM FINANCING ACTIVITIES
         Proceeds from borrowings                                           264,426          1,059,860            2,640,633
         Expenses paid by shareholder                                             -                  -               38,323
         Repayment of loans                                                       -           (276,402)            (456,791)
         Proceeds from sale of common shares                                169,043            155,000              679,508
         Capital contributed by shareholder                                       -                  -              154,800
         Collection of share subscriptions                                        -             51,454              141,726
         Common shares exchanged for debt                                    66,094                  -               78,412
         Exercised stock options                                                  -                  -              125,250
         Redemption of common shares                                              -                  -              (20,409)
         Cost of raising capital                                                (16)                 -              (73,382)
                                                                          ---------          ---------          -----------
         Net cash provided used by financing activities                     499,547            989,912            3,308,070
                                                                          ---------          ---------          -----------
NET INCREASE (DECREASE) IN CASH                                              (2,589)            70,688                    0
     Balance at beginning of period                                           2,589             14,259                    -
                                                                          ---------          ---------          -----------
     Balance at end of period                                             $       0          $  84,947          $         0
                                                                          =========          =========          ===========
</TABLE>
 The accompanying footnotes are an integral part of this financial information

                                      F-6
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                               September 30, 1999
                                   (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.  The
acquisition  of Medisys  by Ceron was  accounted  for as a  purchase  by Medisys
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.   On  January  16,  1996,  Wasatch
reorganized  for the purpose of changing its domicile  from Delaware to Utah and
modifying its capital structure.  For the purpose of this financial presentation
"Inception"  shall mean September 7, 1989, which was the commencement of Medisys
operations.

NOTE 2 - CHANGES IN PRESENTATION

         Certain  financial  presentations  for the third  quarter and the first
nine months of 1997 have been  reclassified to conform to the 1998  presentation
and the discontinued oil and gas operations.

NOTE 3 - GENERAL AND ADMINISTRATIVE EXPENSES

         General and administrative  expenses for the comparative  calendar nine
and three-month  periods of 1998 and 1997 and from inception  through  September
30, 1998 are as follows:
<TABLE>
<CAPTION>
                                           Nine Months                   Three Months          Inception to
                                       1999           1998            1999           1998      Sept., 1998
                                       ----           ----            ----           ----      -----------
<S>                                     <C>           <C>               <C>          <C>        <C>
   Officer's Compensation               $193,603       $112,807          $79,085      $15,930    $1,169,128
   Profession  Services                  109,500         29,009           12,693        3,400       353,433
   Funding Fees                           18,877         47,080              205       47,080        67,640
   Fund Raising                           40,903         16,045           40,903            -        58,657
   Travel                                  2,815          7,666            1,563        1,394        75,935
   Telephone                               5,113         10,164            1,944        3.699        66,189
   Insurance                                                773                            57        15,912
   Postage                                                1,851                            39        15,822
   Payroll Tax                                             (25)                          (25)        16,408
   Debt Extinguishment Gain             (13,098)                        (13,098)                   (13,098)
   Other                                   3,127         21,700           12,842           14       914,713
                                        --------      ---------         --------     --------    ----------
                                        $360,840      $ 247,082         $136,136     $ 71,588    $2,760,899
                                        ========      =========         ========     ========    ==========
</TABLE>

                                       F-7
<PAGE>

                          WASATCH PHARMACEUTICAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                               September 30, 1999
                                   (unaudited)

NOTE 4 - 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.

NOTE 5 - COMMON STOCK

         During the third quarter of 1998, the following common share and common
share option  transactions  occurred (See the 10Q's for the quarters ended March
31 and June 30, 1998 for transactions occurring during those periods):

         a.       Issued  127,000   restricted  common  shares  were  issued  to
                  consultants for services rendered.
         b.       Issued  2,500  restricted   common  shares  to  creditors  for
                  extensions of due dates.
         c.       Issued 176,900 restricted common shares for cash consideration
                  totaling $18,845
         d.       Issued 272,304 restricted common shares for the Extinguishment
                  of debt.
         e.       Issued  500,000  restricted  common  shares  as  interim  loan
                  collateral to be returned at debt satisfaction.

                                       F-8