<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D. C. 20549

                                   FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
               For the quarterly period ended June 30, 2001.

[_]  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 - 26476
                       --------------------------------


                               SAFESCIENCE, INC.
            (Exact name of Registrant as specified in its charter.)

                NEVADA                               33-0231238
     (State or other jurisdiction of               (IRS Employer
     incorporation or organization)              Identification no.)

                             Park Square Building
                        31 St. James Avenue, 8th Floor
                          Boston, Massachusetts 02116
         (Address of principal executive offices, including zip code.)

                                (617) 422-0674
              Registrant's telephone number, including area code.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by the Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                    YES    [X]         NO    [_]
The number of shares outstanding of the Registrant's Common Stock, $.01 par
value per share, at August 13, 2001 was 28,693,020 shares.
<PAGE>

                               SAFESCIENCE, INC.


                                     INDEX

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                 <C>
Part I -  Financial Information

  Item 1. Financial Statements

          Consolidated Balance Sheets as of June 30, 2001
          and December 31, 2000 (Unaudited)....................            2

          Consolidated Statements of Operations
          for the Three and Six Months Ended June 30, 2001
          and 2000 (Unaudited).................................            3

          Consolidated Statements of Cash Flows
          for the Six months ended June 30, 2001
          and 2000 (Unaudited).................................            4

          Notes to Unaudited Consolidated Financial Statements.         5-12

  Item 2. Management's Discussion and Analysis of
          Financial Condition and Results of Operations........        13-26

Part II - Other Information

  Item 4. Submission of Matters to a Vote of Securities Holders           27

  Item 6. Exhibits and Report on Form 8-K......................        27-28

Signatures.....................................................           29

</TABLE>
<PAGE>

                                                                          Page 2


                               SAFESCIENCE, INC.

                          CONSOLIDATED BALANCE SHEETS
                          ---------------------------
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                                            June 30,     December 31,
                                                                                              2001           2000
                                                                                          -----------   ------------
<S>                                                                                       <C>
                                ASSETS
                                ------
         Current assets:
               Cash and cash equivalents                                                  $   589,431   $  2,547,353
               Stock subscription receivable                                                        -      2,000,000
               Prepaid expenses  and other current assets                                     217,566        288,134
                                                                                          -----------   ------------
                                 Total current assets                                         806,997      4,835,487
                                                                                          -----------   ------------

         Property and equipment, at cost
               Computer, office and laboratory equipment                                      463,693        455,994
               Furniture and fixtures                                                         284,748        281,274
               Motor vehicles                                                                  25,026         25,026
                                                                                          -----------   ------------
                                                                                              773,467        762,294
                  Less-accumulated depreciation and amortization                             (394,051)      (324,932)
                                                                                          -----------   ------------
                                                                                              379,416        437,362
                                                                                          -----------   ------------
         Other assets:
               Notes receivable - related parties                                                   -        128,659
               Restricted cash                                                                108,128        108,128
               Deposits                                                                        81,201        269,481
                                                                                          -----------   ------------
                                 Total other assets                                           189,329        506,268
                                                                                          -----------   ------------
                                 Total assets                                             $ 1,375,742   $  5,779,117
                                                                                          ===========   ============
                  LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
                  ---------------------------------------------
         Current liabilities:
               Accounts payable                                                           $ 1,384,112   $  1,360,615
               Accrued liabilities                                                            524,678        797,964
               Net liabilities of discontinued operations (Note 5)                            103,976        908,571
                                                                                          -----------   ------------
                                 Total current liabilities                                  2,012,766      3,067,150
                                                                                          -----------   ------------
         Commitments (Note 8)
         Other equity                                                                               -        866,216
                                                                                          -----------   ------------
         Stockholders' equity (deficit):
               Preferred stock, $.01 par value
                 Authorized -5,000,000 shares
                 issued and outstanding - None                                                      -              -
               Common stock, $.01 par value
               Authorized -100,000,000 shares
               Issued and outstanding  - 25,930,311 and 23,998,504
                    shares at June 30, 2001 and  December 31, 2000, respectively              259,303        239,985
               Additional paid-in capital                                                  50,907,214     48,243,184
               Note receivable from former officer -Issuance of common stock               (2,675,000)    (2,675,000)
               Accumulated deficit                                                        (49,128,541)   (43,962,418)
                                                                                          -----------   ------------
                                 Total stockholders' equity (deficit)                        (637,024)     1,845,751
                                                                                          -----------   ------------
                                 Total liabilities and stockholders' equity(deficit)      $ 1,375,742   $ 5,779,117
                                                                                          ===========   ============
</TABLE>
<PAGE>

                                                                          Page 3

                               SAFESCIENCE, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     -------------------------------------

                                   Unaudited

<TABLE>
<CAPTION>
                                                 Three-Months Ended June 30,          Six Months Ended  June 30,
                                               ------------------------------       ------------------------------
                                                     2001             2000               2001               2000
                                               -----------       ------------       -----------        -----------
<S>                                            <C>               <C>                <C>                <C>
Operating expenses:
     Research and development                  $   984,537       $ 1,465,826        $ 2,726,632        $ 2,676,539
     General and administrative                  1,052,282         1,211,522          2,383,043          2,126,568
     Restructuring charge (Note 4)                       -         1,730,927           (182,625)         1,730,927
                                               -----------       -----------        -----------        -----------
         Total operating expenses                2,036,819         4,408,275          4,927,050          6,534,034
                                               -----------       -----------        -----------        -----------
Operating loss                                  (2,036,819)       (4,408,275)        (4,927,050)        (6,534,034)
                                               -----------       -----------        -----------        -----------

Other income (expense):
     Other expense                                 (19,036)         (188,295)           (24,780)          (221,005)
     Interest income                                 2,434           107,402             29,936            128,461
                                               -----------       -----------        -----------        -----------
             Total other income (expense)          (16,602)          (80,893)             5,156            (92,544)
                                               -----------       -----------        -----------        -----------
Loss from continuing operations                 (2,053,421)       (4,489,168)        (4,921,894)        (6,626,578)


Loss from discontinued operations                  (57,600)       (1,148,888)          (244,229)        (1,708,019)
                                               -----------       -----------        -----------        -----------
Net loss                                       $(2,111,021)      $(5,638,056)       $(5,166,123)       $(8,334,597)
                                               ===========       ===========        ===========        ===========

Basic and diluted net loss per common share
   from continuing operations                  $     (0.08)      $     (0.25)       $     (0.19)       $     (0.37)
                                               ===========       ===========        ===========        ===========
Basic and diluted net loss per common share
   from discontinued operations                $     (0.00)      $     (0.07)       $     (0.01)       $     (0.10)
                                               ===========       ===========        ===========        ===========

Basic and diluted net loss per common share    $     (0.08)      $     (0.32)       $     (0.20)       $     (0.47)
                                               ===========       ===========        ===========        ===========
Weighted average number of common
     shares outstanding                         25,817,699        17,629,370         25,462,315         17,550,872
                                               ===========       ===========        ===========        ===========
</TABLE>
<PAGE>

                                                                          Page 4

                               SAFESCIENCE, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                                                   Six Months Ended
                                                                                                       June 30,
                                                                                              -----------------------
                                                                                              2001               2000
                                                                                              ----               ----
<S>                                                                                    <C>                  <C>
Cash flows from operating activities:
     Net loss                                                                          $(5,166,123)         $(8,334,597)
     Adjustments to reconcile net loss to net cash:
       used in operating activities:

         Operating expenses paid in:
           Common stock and options                                                        283,066               28,080
           Warrants                                                                        456,024                    -
         Non-cash compensation                                                             238,054              272,000
         (Increase) in accounts receivable allowances                                            -              (76,000)
         Depreciation and amortization                                                      69,119               94,183
         Changes in assets and liabilities:
                Accounts receivable                                                              -             (116,029)
                Inventory                                                                        -             (391,459)
                Prepaid expenses and other current assets                                   70,568             (168,011)
                Accounts payable                                                            23,497              563,126
                Accrued liabilities                                                       (144,627)           1,077,466
                Net liabilities of  discontinued operations                               (804,595)                   -
                                                                                       -----------          -----------
                        Net cash used in operating and discontinued activities         $(4,975,017)         $(7,051,241)
                                                                                       -----------          -----------
Cash flows from investing activities:

     Purchase of property and equipment                                                    (11,173)            (109,764)
     Deposits                                                                              188,280                    -
     Repayment of loans to related parties, net                                                  -              178,734
                                                                                       -----------          -----------
                             Net cash provided by investing activities                 $   177,107          $    68,970
                                                                                       -----------          -----------
Cash flows from financing activities:
     Proceeds from sale of common stock, net of issuance costs                             875,000           10,615,149
     Costs incurred from issuance of common stock                                          (35,012)                   -
     Stock subscription receivable                                                       2,000,000                    -
                                                                                       -----------          -----------
             Net cash provided by financing activities                                 $ 2,839,988          $10,615,149
                                                                                       -----------          -----------

Net (decrease) increase in cash and cash equivalents                                   $(1,957,922)         $ 3,632,878
Cash and cash equivalents, beginning balance                                           $ 2,547,353          $ 3,377,067
                                                                                       -----------          -----------
Cash and cash equivalents, ending balance                                              $   589,431          $ 7,009,945
                                                                                       ===========          ===========
Supplemental disclosure of cash flow information
     Cash paid for interest                                                            $    20,099                    -
                                                                                       ===========          ===========
</TABLE>
                  The accompanying notes are an integral part
                  of these consolidated financial statements.
<PAGE>

                                                                          Page 5


                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001


(1)  Summary of Significant Accounting Policies

(a)  Organization

SafeScience, Inc. (the Company) was formed in 1992 for the research and
development of pharmaceutical products based on carbohydrate chemistry. Today,
the Company has two wholly-owned subsidiaries: International Gene Group, Inc.
and SafeScience Products, Inc.  International Gene Group, Inc. focuses on the
development of carbohydrate-based pharmaceutical products related to two major
areas of disease: cancer and fungal infections.  SafeScience Products, Inc.
focuses on developing agricultural products some of which are also based upon
carbohydrate chemistries.  These products were either licensed from or jointly
developed with third parties (Note 6).  SafeScience, Inc., International Gene
Group, Inc. and SafeScience Products, Inc. maintain an office in Boston,
Massachusetts.

As of June 30, 2001, the Company has an accumulated deficit of approximately
$49,129,000. In the Annual Report on Form 10-K for December 3, 2000, the Company
reported that its financial statements were subject to issues about its ability
to continue as a going concern. The Company's future is dependent upon its
ability to obtain additional financing to fund its operations. The Company
expects to incur substantial additional operating costs related to ongoing
research and development activities, sales and marketing activities, preclinical
studies and clinical trials. On July 10, 2001 the Company completed a business
venture in a series of transactions with Elan Corporation, plc ("Elan") and Elan
International Services, Ltd. ("EIS") which included (i) the formation of a
subsidiary, SafeScience Newco, Ltd. 80.1% owned by the Company and 19.9% owned
by EIS, (ii) the purchase by EIS of $5,000,000 of the Company's securities, and
(iii) provided future funding, subject to conditions, for the Company's portion
of the research and development costs of GBC-590 in the field of oncology in the
amount of $9,612,000 over two years. (Note 2) As a result of this subsequent
event, the Company believes that its existing funds, together with additional
capital from current commitments from EIS, will be sufficient to fund its
operating expenses and capital requirements as currently planned into the second
quarter of 2002.

Principal risks to the Company include risks of product development (such as
failure to demonstrate efficacy or safety), risk related to the United States
Food and Drug Administration and other regulatory procedures, market acceptance
risks, the impact of competitive products and pricing, the results of current
and future licensing, joint ventures and other collaborative relationships, the
need to obtain adequate financing to fund future operators, developments
regarding intellectual property rights, litigation and dependence on key
individuals.  See "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Certain Factors That May Affect Future Results" for
additional risks the Company faces.

(b)  Principles of Consolidation

The Company's consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, International Gene Group, Inc., and
SafeScience Products, Inc. All material intercompany transactions and accounts
have been eliminated in the consolidated financial statements.

(c) Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission, and reflect all adjustments, consisting of only normal
recurring adjustments, which, in the opinion of management, are necessary for a
fair statement of the results of the interim periods presented.  These financial
<PAGE>

                                                                          Page 6


                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

statements do not include disclosures associated with the annual financial
statements and, accordingly, should be read in conjunction with the attached
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the financial statements and footnotes for the year ended
December 31, 2000 included in the Company's Annual Report on Form 10-K.

(d) Reclassifications

Certain prior period amounts have been reclassified to conform with current
period presentation.

(e) Use of Estimates

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

(f)  Cash and Cash Equivalents

Cash and cash equivalents at June 30, 2001 were $589,431, including $572,745
held by a single bank. Of that amount $212,931 was in an overnight investment
account, which reinvests daily in government securities funds and money market
funds. Restricted cash of $108,128 represents funds held under an irrevocable
standby letter of credit. The letter of credit serves as a security for the
Company's facility lease. The funds are being held in an investment account.

(g)  Depreciation and Amortization

The Company provides for depreciation and amortization using straight-line and
accelerated declining balance methods to allocate the cost of property and
equipment over their estimated useful lives as follows:



Asset Classification                             Estimated Useful Life
--------------------                             ---------------------


Computer, office and laboratory equipment             3 - 5 years

Furniture and fixtures                                    7 years

Motor vehicles                                            4 years

(h) Research and development

Research and development costs, which primarily consist of wages, expenses for
consultants, supplies and testing, are charged to operations as incurred.
<PAGE>

                                                                          Page 7

                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

(i)  Net Loss Per Share

The Company applies Statement of Financial Accounting Standards Statement (SFAS)
No. 128, Earnings per Share.  Basic loss per share is computed using the
weighted-average number of shares of common stock, par value $0.01 ("Common
Stock") outstanding.  The dilutive effect of the potential issuance of common
stock upon the exercise of outstanding stock options and warrants is determined
using the treasury stock method in accordance with SFAS No. 128.  Diluted
weighted average shares outstanding at June 30, 2001 and 2000 excludes the
potential issuance of Common Stock upon the exercise of outstanding warrants and
stock options because to do so would be antidulitive for the periods presented.
At June 30, 2001 and 2000, there were outstanding warrants exercisable for
4,851,360 and 302,754 shares, respectively, with a weighted average exercise
price of $2.90 and $14.60, respectively, and outstanding stock options
exercisable for 986,251 and 541,294 shares, respectively, with a weighted
average exercise price of $6.34 and $11.24 respectively.

(j)  Comprehensive  Income

Effective January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income.  SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in the financial statements.
Comprehensive income is defined as the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
nonowner sources.  The comprehensive net loss is the same as reported net loss
for all periods presented.

(k) Disclosures about Segments of an Enterprise

The Company followed SFAS No. 131, Disclosures About Segments of an Enterprise
and Related Information, in the fiscal year ended December 31, 1998.  SFAS No.
131 establishes standards for reporting information regarding operating segments
in annual financial statements and requires selected information for those
segments to be presented in interim financial reports issued to stockholders.
SFAS No. 131 also establishes standards for related disclosures about products
and services and geographic areas.  Operating segments are identified as
components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision-maker, or decision-
making group, in making decisions how to allocate resources and assess
performance.  Due to the discontinuation of its consumer and commercial products
business, the Company operates in one segment.

(l) Concentrations of Risk

SFAS No. 105, Disclosure of Information About Financial Instruments with Off-
Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk,
requires disclosure of any significant off-balance-sheet risk and credit risk
concentrations.  The Company has no significant off-balance-sheet risk or credit
risk concentrations.  The Company maintains its cash and cash equivalents with
multiple financial institutions and invests in investment-grade securities.
<PAGE>

                                                                          Page 8

                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

(2) JOINT VENTURE

  On July 10, 2001, the Company closed a business venture with Elan and EIS.
As part of the transaction, EIS and the Company formed a Bermuda exempted
limited liability company, SafeScience Newco, Ltd., to further advance GBC-590.
The Company owns all of the common stock and 60.2% of the non-voting preferred
shares of SafeScience Newco, Ltd. and EIS owns 39.8% of the non-voting preferred
shares of SafeScience Newco, Ltd. Of the outstanding combined common and non-
voting preferred shares of SafeScience Newco, Ltd., the Company owns 80.1% and
EIS owns 19.9%.

          Elan and the Company entered into license agreements under which the
Company licensed to SafeScience Newco, Ltd. its intellectual property related to
GBC-590 for use in the field of oncology and Elan licensed to SafeScience Newco,
Ltd. proprietary oral drug delivery technology.

          As part of the transaction, EIS also purchased 2,700,000 shares of the
Company's Common Stock, 1,116.79 shares of SafeScience Series C non-voting
preferred stock ("Series C Stock") convertible into 1,116,790 shares of Common
Stock after two years and a five-year warrant to purchase 381,679 shares of
Common Stock at an exercise price of $2.43 per share for an aggregate purchase
price of $5,000,000. EIS also purchased shares of SafeScience Series A
convertible exchangeable non-voting preferred stock ("Series A Stock") for
$12,015,000.  The Series A Stock bears a 7% dividend payable-in-kind. The Series
A Stock is convertible after two years into Common Stock and is exchangeable at
the option of EIS at any time for all of the preferred stock of SafeScience
Newco, Ltd. held by the Company which, if exchanged, would give EIS 50%
ownership of the fully-diluted equity interest in SafeScience Newco, Ltd.  The
Series A Stock is redeemable by the Company, if still outstanding on July 10,
2007, at its option, for either cash or shares of Common Stock of the Company at
their fair market value at the time of redemption.  The proceeds from the
issuance of the Series A Stock were used by the Company to purchase its equity
interest in SafeScience Newco, Ltd.  Consequently, the value assigned to the
Company's investment in SafeScience Newco, Ltd. is the same as the value of the
Series A Stock issued, which was approximately $12,015,000. EIS purchased its
equity interest in SafeScience Newco, Ltd. for $2,985,000. SafeScience Newco,
Ltd. used the proceeds from the sale of its securities to the Company and EIS to
license Elan's proprietary oral drug delivery technology.

          Upon mutual agreement, EIS and the Company will fund SafeScience
Newco, Ltd.'s research and development according to their respective equity
holdings in SafeScience Newco, Ltd.  Subject to mutual agreement, EIS will
purchase from the Company up to $9.612 million of Series B convertible preferred
stock, which bears a 7% dividend payable-in-kind and is convertible into Common
Stock.  The Company will utilize the proceeds of the sale of Series B Preferred
Stock to fund its portion of SafeScience Newco, Ltd.'s research and development
costs.

          The Company will not consolidate the financial statements of
SafeScience Newco, Ltd. but will instead account for its investment in
SafeScience Newco, Ltd. under the equity method of accounting because the
Company has 50% control of the Steering Committee of SafeScience Newco Ltd.
Net losses of SafeScience Newco, Ltd. will be recognized by the Company at their
80.1% interest to the extent of the Company's investments in or advances to
SafeScience Newco, Ltd.
<PAGE>

                                                                          Page 9


                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

          Reflecting the transactions with Elan and EIS, the Company immediately
expensed its $12,015,000 investment in SafeScience Newco, Ltd., because the
technical feasibility of using the contributed technology has not been
established and SafeScience Newco, Ltd. had no alternative future use for the
technology.

(3) STOCKHOLDERS' EQUITY (DEFICIT)

(a) Stock Option Plan

The Company has entered into agreements with various employees and consultants
for the grant of stock options and shares of Common Stock at prices determined
by the Company's Compensation Committee.  During the six months ended June 30,
2001 and 2000, the Company issued 107,212 and 2,061 shares of Common Stock,
respectively, and recorded charges to operations of $88,333 and $28,080 relating
to those issuances of Common Stock. During the six months ended June 30, 2001,
the Company granted options to purchase 227,129 shares of Common Stock and
recorded charges to operations of $296,952 relating to these issuances.

The following table summarizes all stock option activity to employees and
consultants for services for the six months ended June 30, 2001.

<TABLE>
<CAPTION>
                                              Stock Options
                                     -------------------------------
                                                    Weighted Average
                                                        Exercise
                                     Number of          Price Per
                                       Shares             Share
                                       ------             -----
<S>                                <C>             <C>
Balance December 31, 2000           1,147,056             $6.44
Granted                               227,129               .14
Cancelled                             (97,757)             4.95
                                    ---------             -----
Balance March 31, 2001              1,276,428             $5.43
Granted                                     -                 -
Cancelled                            (130,277)             5.19
Exercised                            (159,900)             0.01
                                    =========             =====
Balance June 30, 2001                 986,251             $6.34
                                    =========             =====
</TABLE>
<PAGE>

                                                                         Page 10

                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

(b)  Warrants

The following table summarizes all warrant activity for the six months ended
June 30, 2001.

<TABLE>
<CAPTION>
                                       Warrants
                                     -------------------------------
                                                    Weighted Average
                                                        Exercise
                                     Number of          Price Per
                                       Shares             Share
                                       ------             -----
<S>                                <C>             <C>
Balance December 31, 2000            2,665,104            $4.02
Granted                              2,915,701             1.12
Exercised                             (729,445)             .00
                                     ---------            -----
Balance March 31, 2001               4,851,360            $2.90
Granted                                      -                -
Exercised                                    -                -
                                     ---------            -----
Balance June 30, 2001                4,851,360            $2.90
                                     =========            =====
</TABLE>


(4) RESTRUCTURING CHARGE

During the second quarter of 2000, the Company implemented a restructuring plan
to reduce its size and realign its organization to conform with strategic
changes.  The major component of the restructuring relates to the elimination of
approximately eight employees across the following functions:  sales and
marketing (six), general and administrative (one) and research and development
(one).  Components of the charge include severance and other related expenses.
At June 30, 2001, approximately $378,000 of accrued restructuring charges
remained which are comprised of severance costs.  Approximately $357,700 of the
expense has been paid by the issuance of common stock. The total cash impact of
the restructuring is expected to amount to approximately $864,000. The total
cash paid as of June 30, 2001 was approximately $639,000 and the remaining
amounts will be paid through June 2002. During the quarter ended March 31, 2001
the Company recorded a reduction of  $182,625 in the estimated costs of this
restructuring.

(5) DISCONTINUED OPERATIONS

On November 15, 2000, the Company engaged a merchant bank to explore
alternatives including sale or other disposition of the Company's consumer,
commercial and agriculture business areas. The Company terminated operations of
its consumer and commercial product business areas on February 23, 2001 and
began the process of liquidating all assets and liabilities pertaining to those
operations.  Accordingly, the Company has treated its consumer and commercial
products operations as a discontinued operation in accordance with Accounting
Principles Board Opinion No. 30 and has reclassified the 2000 financial
statements to reflect this treatment.  For the year ended December 31, 2000, the
Company had recorded a reserve in the amount of $1,750,000 which included
approximately $983,000 to reduce the carrying value of assets to their estimated
liquidation value and
<PAGE>

                                                                         Page 11

                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

a liability of approximately $767,000 to accrue for the cost of closing the
operations. During the quarters ended March 31 and June 30, 2001, the Company
recorded additional charges of $186,629 and $57,600, respectively, to reflect
additional consulting expenses and rental expense related to surplus space
costs, respectively.

(6) LICENSING AGREEMENTS

On January 26, 2001, SafeScience executed an agreement with Wayne State
University and the Barbara Ann Karmanos Cancer Institute granting an exclusive
world-wide license to SafeScience to patents and patent applications related to
"GBC-590 Material" issued to or applied for by Wayne State University and the
Barbara Ann Karmanos Cancer Institute. This agreement adds the rights to these
issued patents and patent applications to the Company's existing patent
portfolio which consolidates the rights to all of the parties' existing GBC-590
intellectual property within SafeScience. SafeScience made an initial payment of
$300,000 upon signing the agreement and agreed to pay up to an additional
$1,635,000 in license payments at the rate of 5% of cash raised through the sale
of securities of the Company. The Company is obligated to raise a total of
$3,000,000 through the sale of such securities by October 1, 2001. Once a total
of $3,000,000 has been raised, the Company becomes liable for the unpaid balance
of the $1,635,000 and has twelve months to pay such balance. Additional payments
of up to $3,000,000 are contingent upon reaching future commercialization
milestones. The Company also granted Wayne State University and the Barbara Ann
Karmanos Cancer Institute warrants to jointly purchase 1,375,000 shares of
Common Stock at $1.15 that will vest in quarterly installments over two years.
In addition, the Company will pay a 2% royalty jointly to Wayne State University
and the Barbara Ann Karmanos Cancer Institute on net sales of GBC-590. During
the six months ended June 30, 2001, the Company recorded an expense of $456,024
related to warrants which vested under this agreement and expense of $43,750 in
payment of the 5% amount due on sales of securities.

(7) RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities.  This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities.  It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value.  Pursuant to SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133, SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000.  The Company
believes that the adoption of SFAS No. 133 will not have a material impact on
its financial results or financial position.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets". These standards, among other things,
significantly modify the current accounting rules related to accounting for
business acquisitions, amortization of intangible assets and the method of
accounting for impairments. The Company has not completed an analysis as to the
magnitude of the impact of these new pronouncements on the Company's financial
statements, nor has it been determined whether or not it will adopt these
pronouncements as of the beginning of its fiscal year 2002 or 2003. At this
time, these new pronouncements are not expected to have a material affect on the
statement of position or results of operations of the Company.

(8) COMMITMENTS

On January 26, 2001, SafeScience executed an agreement with Wayne State
University and the Barbara Ann Karmanos Cancer Institute granting an exclusive
world-wide license to SafeScience to patents and patent applications related to
"GBC-590 Material" issued to or applied for by Wayne State University and the
Barbara Ann Karmanos Cancer Institute. This agreement required an initial
<PAGE>

                                                                         Page 12


                               SAFESCIENCE, INC.

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2001

payment of $300,000 and additional contingent payments of  $1,635,000. The
Company is obligated to raise a total of $3,000,000 through debt, equity or
other means by October 1, 2001. Once a total of $3,000,000 has been raised, the
Company becomes liable for the unpaid balance of the $1,635,000 and has twelve
months to pay such balance. The transactions closed with Elan and EIS included
an equity investment of $5,000,000 which satisfied this requirement. Additional
payments of up to $3,000,000 are contingent upon reaching future
commercialization milestones. The Company also granted Wayne State University
and the Barbara Ann Karmanos Cancer Institute warrants to jointly purchase
1,375,000 shares of Common Stock at $1.15 that will vest in equal quarterly
installments over two years begining on March 31, 2001. In addition, the Company
will pay a 2% royalty jointly to Wayne State University and the Barbara Ann
Karmanos Cancer Institute on net sales of GBC-590.
<PAGE>

                                                                         Page 13


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
financial statements and the notes thereto.

The following 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.  All forward-looking statements involve risks
and uncertainty. Although the Company believes that the assumptions underlying
the forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this report will prove to be
accurate. The Company's actual results may differ materially from the results
anticipated in the forward-looking statements.  See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Certain Factors that
May Affect Future Results" included herein for a discussion of factors that
could contribute to such material differences.  In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.  The Company disclaims any obligation to update or revise the
information provided in this report to reflect future events.

OVERVIEW

SafeScience, Inc. is a biotechnology company developing novel pharmaceutical
products based on carbohydrate compounds. The Company's lead drug candidate GBC-
590, a potential treatment for multiple forms of cancer, is in Phase II clinical
trials for pancreatic and colorectal cancers. The Company also develops
agricultural products.  The Company's near term objective is to continue to
proceed through the various phases of United States Food and Drug Administration
(FDA) clinical trials for GBC-590 and to continue to pursue Federal and state
registration of its agriculture products and seek alternatives, including sale,
for its agricultural products business area.

SAFESCIENCE, INC.

SafeScience conducts its business through two wholly-owned subsidiaries:
International Gene Group, Inc. and SafeScience Products, Inc.


INTERNATIONAL GENE GROUP, INC.

  International Gene Group, Inc. ("IGG") develops human therapeutics. IGG has
been focused on developing GBC-590, a complex carbohydrate intended to fight
cancerous tumors and metastasis, which it exclusively licenses from Dr. David
Platt and Wayne State University and the Barbara Ann Karmanos Cancer Institute.
Phase I FDA clinical trials for GBC-590 have been completed. Phase II clinical
trials for GBC-590 designed to evaluate safety and efficacy for pancreatic and
colorectal cancers began in the second quarter of 2000.  The Company plans to
conduct expanded Phase IIb dose escalation trials beginning in late-2001 for
colorectal cancer patients and early-2002 for pancreatic cancer patients.
<PAGE>

                                                                         Page 14


  IGG has also developed a complex carbohydrate antifungal agent which is being
tested in animals to inhibit Candida infections.

Theoretical Background of GBC-590.  Cells recognize one another through pairs of
complementary structures on their surface.  A structure on one cell carries
encoded biological information that a structure on another cell can decipher.
While nucleic acids and proteins were previously recognized as the major classes
of biological materials involved in cell recognition, it has recently been
scientifically established that carbohydrates play a role as well.  The majority
of a cell's surface components contain carbohydrate structures, which change
characteristics as the cell develops, differentiates and sickens.

It is contended that cell adhesion plays a role in cancer and cancer metastasis.
Metastasis is the process by which cancer cells spread throughout the body,
beginning at the primary tumor.  The spread of the cancer cells throughout the
body is the main cause of death for cancer patients.  These cells, once
circulating in the bloodstream after their detachment from the primary tumor,
must adhere to new cells in other parts of the body in order to proliferate to
form new tumor colonies.  Malignant cells may thus recruit the very adhesion
molecules that are part of the body's natural defense mechanism to promote their
own metastasis.  The Company believes that drugs, which inhibit this process of
adhesion, may inhibit metastasis.

GBC-590 may offer a novel approach to controlling the progression of cancer, by
disrupting the cellular recognition process of roaming cancer cells and
preventing them from reattaching to each other and to normal tissue.  The GBC-
590 compound acts as a "molecular decoy" by recognizing Galectin-3, a "lectin",
on cancer cells, attaching itself to the Galectin-3 and preventing those cells
from aggregating. By binding to Galectin-3, GBC-590 may thus prevent metastasis.
In addition, independent research has shown that Galectin-3 is involved in
regulating cell growth and apoptosis (cell death).  By binding to Galectin-3,
GBC-590 may induce cancer cell death. Furthermore, independent research has
shown that Galectin-3 plays a role in angiogenesis.  Angiogenesis, identified in
the 1980's, is the biological process by which cancer cells form new blood
vessels allowing them to obtain the nutrients necessary for tumor growth.  By
binding to Galectin-3, GBC-590 may inhibit angiogenesis.


The Company believes that GBC-590 has the potential for therapeutic effect on
multiple cancer types (i.e. colorectal, prostate, pancreatic, breast and liver)
because the target for GBC-590 on the cancer cells is Galectin-3 which is over
expressed on all these cancer types.

Phase I clinical trials of GBC-590, at the MD Anderson Cancer Center in Houston,
Texas and at Pennsylvania Oncology and Hematology Associates, an affiliate of
the University of Pennsylvania - School of Medicine in Philadelphia,
Pennsylvania, were completed in 1999.  Phase I is intended to assess toxicity;
GBC-590 showed no dose limiting toxicity in patients.

Institutional Review Board (IRB) approval was received at the following sites
prior to conducting the recently completed Phase II clinical trial for
colorectal cancer and/or the ongoing Phase II clinical trial for pancreatic
cancer:
<PAGE>

                                                                         Page 15

 .  Beth Israel/Deaconess Hospital in Boston, Massachusetts;
 .  University of Chicago Pritzker School of Medicine;
 .  University of Rochester Cancer Center;
 .  Christiana Healthcare in Wilmington, Delaware;
 .  Ocala Oncology Center in Ocala, Florida;
 .  Hematology and Oncology Associates in Kansas City, Missouri; and
 .  Medical Oncology Associates in San Diego, California.

On March 23, 2001, the Company announced that GBC-590 demonstrated positive
clinical activity in colorectal cancer patients in the recently completed Phase
IIa clinical trial. Specifically, five of 23 patients showed tumor stabilization
for periods of two to six months before disease state progression was observed,
with one of the five patients showing a period of tumor shrinkage. Based on this
promising, early data, the Company plans to conduct an expanded Phase IIb dose
escalation trial. Higher doses of GBC-590 than administered in the Phase IIa
study have already been tested in animals with no dose limiting toxicity
observed. This clinical trial is planned to enroll up to 75 colorectal cancer
patients separated into three groups each receiving a different dose level of
GBC-590. There can be no assurances at present that intravenous injection of
GBC-590 will prove effective in reducing or eliminating the spread of cancer in
humans or be safe at higher doses. On July 23, 2001, the Company announced the
completion of patient enrollment in its Phase IIa pancreatic cancer clinical
trial. Additional Phase IIb trials are planned for pancreatic cancer patients.


CAN-296.  CAN-296 is an anti-fungal agent derived from a naturally occurring
complex carbohydrate, designed for treatment of Candida and Aspergillus
infections.  Candida, a common fungal disease, can take on two forms: deep-
seated infections, which can be fatal and superficial infections such as
athlete's foot, skin infections and vaginitis.


CAN-296 has been tested in vitro and in animals against many Candida pathogenic
isolates including resistant strains and demonstrated positive activity.  There
are no assurances that application of CAN-296 will prove effective in reducing
or eliminating Candida infection in humans, and there have been no clinical
studies or tests conducted to prove such an effect.  Additional studies in
animals are being conducted, and based on those results, the Company will decide
whether to proceed to file an Investigational New Drug ("IND") application.



SafeScience Products, Inc.

Historically, SafeScience Products developed agriculture products and developed,
marketed and distributed chemically safe consumer and commercial products.

In the agricultural area, SafeScience Products has developed and/or licensed
products that include a Federal EPA-approved plant defense booster to treat
fungal pathogens.  An additional insecticide product (Bb447) is being tested and
developed.

On February 15, 2001, the Company received notice of unconditional registration
from the United States Environmental Protection Agency's Office of Pesticide
Programs, Biopesticides
<PAGE>

                                                                         Page 16


and Pollution Prevention Division for its Elexa-4 Plant Defense Booster. Elexa-4
is an effective non-toxic treatment against fungal pathogens such as powdery
mildew and boytrytis on grapes, and powdery mildew and gray mold on
strawberries, as well as, a variety of additional crops. Elexa-4 works by
stimulating the plants own natural defense system to defend against attack by
diseases. A number of research trials show Elexa-4 to be as effective at powdery
mildew disease protection and control as leading traditional synthetic chemical
fungicides on our initially targeted crops of grapes, strawberries and roses. We
have filed for state registration in California and other states for Elexa-4. On
June 8, 2001 conditional registration by the State of California was received
for use as a fungicide for various diseases on grapes, strawberries and
greenhouse and nursery roses. The Company is exploring alternatives for its
agricultural products business area.

Discontinued Operations

On November 15, 2000, the Company engaged a merchant bank to explore
alternatives including sale or other disposition of the Company's consumer,
commercial and agriculture business areas. The Company terminated operations of
its consumer and commercial product business areas on February 23, 2001 and
began the process of liquidating all assets and liabilities pertaining to those
operations. Accordingly, the Company has treated its consumer and commercial
products operations as a discontinued operation in accordance with Accounting
Principles Board Opinion No. 30 and has reclassified the 2000 financial
statements to reflect this treatment. For the year ended December 31, 2000, the
Company had recorded a reserve in the amount of $1,750,000 which includes
approximately $983,000 to reduce the carrying value of assets to their estimated
liquidation value and a liability of approximately $767,000 to accrue for the
cost of closing the operations. The net losses of the discontinued operations
are included in the statements of operations under discontinued operations.
During the quarters ended March 31 and June 30, 2001, the Company recorded
additional charges of $186,629 and $57,600, respectively, to reflect
additional consulting expenses and rental expense related to surplus space
costs, respectively.

RESULTS OF OPERATIONS: THREE MONTHS ENDED JUNE 30, 2001 VERSUS JUNE 30, 2000

          Research and development costs decreased from $1,465,826 for the three
months ended June 30, 2000 to $984,537 for the three months ended June 30, 2001,
a decrease of $481,289, or 32.8%. This decrease was primarily due to reductions
in agriculture R&D expense and GBC-590 development costs, partially offset by
the cost of vesting of warrants issued to Wayne State University and the Barbara
Ann Karmanos Cancer Institute.

          General and administrative expenses decreased from $1,211,522 for the
three months ended June 30, 2000 to $1,052,282 for the three months ended
June 30, 2001, a decrease of $159,240, or 13.1%. This decrease was primarily due
to a reduction in payroll, partially offset by non-cash compensation for stock
options granted to employees.

          Interest income decreased from $107,402 for the three months ended
June 30, 2000 to $2,434 for the three months ended June 30, 2001, a decrease of
$104,968, or 97.7%. This decrease was attributable to a decrease in cash
available for temporary investment.
<PAGE>

                                                                         Page 17


RESULTS OF OPERATIONS: SIX MONTHS ENDED JUNE 30, 2001 VERSUS JUNE 30, 2000

          Research and development costs increased from $2,676,539 for the six
months ended June 30, 2000 to $2,726,632 for the six months ended June 30, 2001,
an increase of $50,093, or 1.9%.  This increase was primarily attributable to
costs related to the clinical trials of GBC-590 including drug production costs
and $799,754 paid under the terms of the licensing arrangement with Wayne State
University and the Barbara Ann Karmanos Cancer Institute, partially offset by a
reduction in agriculture research and development expenses and payroll expense.

          General and administrative expenses increased from $2,126,568 for the
six months ended June 30, 2000 to $2,383,043 for the six months ended June 30,
2001, an increase of $256,475, or 12.1%. This increase was primarily due to non-
cash compensation for stock options granted to employees and legal fees,
partially offset by reduced payroll expenses.

          Interest income decreased from $128,461 for the six months ended
June 30, 2000 to $29,936 for the six months ended June 30, 2001, a decrease of
$98,525, or 76.7%. This decrease was attributable to a decrease in cash
available for temporary investment.

MATERIAL CHANGES IN FINANCIAL CONDITION

          As of June 30, 2001 current liabilities totaled $2,012,766 with total
current assets of $806,997 resulting in a working capital deficit of $1,205,769
compared with working capital of $1,768,337 at the end of the prior fiscal year.
Total shareholders' deficit was $637,024 on June 30, 2001 compared with
shareholders' equity of $1,845,751 as of December 31, 2000. On July 10, 2001,
the equity investment of $5,000,000 by EIS restored both the working capital
deficit and the shareholders' deficit to positive levels. The Company intends to
sell additional equity to increase its capital base throughout the remainder of
the year.


LIQUIDITY AND CAPITAL RESOURCES

          For the six months ended June 30, 2001, the Company's operations
utilized cash of approximately $4,975,000 primarily to fund its operating loss
and loss on discontinued operations. The Company also invested $11,173 in fixed
asset purchases. The uses of cash were partially offset by equity financings,
which resulted in net proceeds of approximately $840,000 to the Company during
the six months ended June 30, 2001 and the receipt of $2,000,000 from a stock
subscription receivable. We are pursuing additional funds through sales of our
securities and through potential partnering arrangements with pharmaceutical or
mature biotechnology companies.

          As of June 30, 2001, the Company had an accumulated deficit of
approximately $49,129,000 and cash balances of $589,431. In the Annual Report on
Form 10-K for December 31, 2000, the Company reported that its financial
statements were subject to issues about its ability to continue as a
going-concern. The Company's future is dependent upon its ability to obtain
additional financing to fund its operations. The Company expects to incur
substantial operating costs, including costs related to ongoing research and
development activities, sales and marketing activities, preclinical studies and
clinical trials. On July 10, 2001 the Company completed a business venture in a
series of transactions with Elan Corporation, plc ("Elan") and Elan
International Services, Ltd. ("EIS") which included the purchase by EIS of
$5,000,000 of the Company's securities and provided future funding, subject to
conditions, for the Company's portion of the research and development costs of
GBC-590 in the field of oncology in the amount of $9,612,000. As a result of
this subsequent event, the Company believes that its existing funds, together
with additional capital from current commitments from EIS, will be sufficient to
fund its operating expenses and capital requirements as currently planned into
the second quarter of 2002.

<PAGE>

                                                                         Page 18


RECENTLY ISSUED ACCOUNTING STANDARDS


In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. As amended in
June 1999, the statement is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. In June 2000, the FASB issued statement No.
138, which is a significant amendment to SFAS No. 133. SFAS No. 133 and its
amendments establish accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively, the derivatives) and for hedging activities. The
Emerging Issues Task Force (EITF) has also issued a number of derivative-related
tentative and final consensuses. The adoption of these statements did not have a
material impact on our consolidated financial position or results of operations.

In September 2000, The EITF issued 00-19 "Accounting for Derivative Financial
Instruments Indexed to and Potentially Settled in a Company's Own Stock", which
requires freestanding contracts that are settled in a company's own stock,
including common stock warrants, to be designated as an equity instrument, asset
or a liability. Under the provisions of EITF 00-19, a contract designated as an
asset or a liability must be carried at fair value, with any changes in fair
value recorded in the results of operations. A contract designated as an equity
instrument must be included within equity and no fair value adjustments are
required. In accordance with EITF 00-19, the Company had determined that the
outstanding adjustable warrant, as of December 31, 2000, which required the
issuance of 729,445 shares of the Company's common stock should be designated as
temporary equity. Under the transition rules of EITF 00-19, the Company is
required to record as temporary equity as of December 31, 2000, the intrinsic
value of the warrants outside of stockholders' equity. As of December 31, 2000,
the Company had reclassified the intrinsic value of the warrants of $866,216 to
temporary equity from additional paid-in capital.  As of December 31, 2000,
these warrants had a fair value of approximately $866,216. On February 5, 2001,
the Company issued 729,445 shares of common stock in satisfaction of the
warrants and reclassified the temporary equity to permanent equity.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets". These standards, among other things,
significantly modify the current accounting rules related to accounting for
business acquisitions, amortization of intangible assets and the method of
accounting for impairments. The Company has not completed an analysis as to the
magnitude of the impact of these new pronouncements on the Company's financial
statements, nor has it been determined whether or not it will adopt these
pronouncements as of the beginning of its fiscal year 2002 or 2003. At this
time, these new pronouncements are not expected to have a material affect on the
statement of position or results of operations of the Company.

MARKET RISK

The Company is not exposed to significant market risk related to changes in
currency exchange rates as measured against the U.S. dollar.  As of June 30,
2001, the Company has evaluated its risk and determined that any exposure to
currency exchange is not significant to the Company's overall consolidated
financial results.  There can be no assurance that the Company's exposure will
remain at these levels, especially in the event of significant and sudden
fluctuations in the value of local currencies.  The Company does not use
derivative financial instruments for speculative or trading purposes.
<PAGE>

                                                                         Page 19



INTEREST RATE SENSITIVITY

The Company is exposed to market risk related to changes in interest rates which
could positively or negatively affect results of operations.  The Company
maintains short-term investments in an overnight money market account comprised
of U.S. treasury bills.  If market interest rates were to increase immediately
and uniformly by 10% from levels that existed at June 30, 2001, the fair value
of the portfolio would decline by an immaterial amount.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES FACING
SAFESCIENCE, INC. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO THE
COMPANY OR THAT IT CURRENTLY DEEMS IMMATERIAL MAY ALSO IMPAIR ITS BUSINESS
OPERATIONS.

IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, THE COMPANY'S BUSINESS, FINANCIAL
CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED. IN
THOSE CASES, THE TRADING PRICE OF THE COMPANY'S COMMON STOCK COULD DECLINE.

WE HAVE EXPERIENCED SIGNIFICANT OPERATING LOSSES THROUGHOUT OUR HISTORY, WE
EXPECT THESE LOSSES TO CONTINUE AND WE MAY NOT ACHIEVE PROFITABILITY IN THE
FUTURE

We began operations more than eight years ago and began to generate revenue only
in the second quarter of 1999.  Through December 31, 2000, we only generated
$2,723,000 from product sales.  On February 23, 2001 we announced the
discontinuation of our consumer and commercial product business from which all
of our revenues to date have been generated.  We do not expect to generate
product revenue for several years if at all.  We have incurred approximately
$49.1 million of operating losses since our inception, including $17.3 million
in the year ended December 31, 2000, and $5.2 million for the six months ended
June 30, 2001.  Extensive operating losses can be expected to continue for the
foreseeable future.

MANY OF OUR PRODUCTS ARE STILL IN DEVELOPMENT, THERE ARE UNCERTAINTIES
ASSOCIATED WITH RESEARCH AND DEVELOPMENT ACTIVITIES AND WE MAY BE UNABLE TO
BRING NEW PRODUCTS TO MARKET

Many of our proposed products require further research, development, laboratory
testing, regulatory approval and/or demonstration of commercial scale
manufacturing before they can be proven to be commercially viable.  Many of
these proposed products are in the development stage and are subject to the
risks inherent in the development of new products, particularly those products
based upon biotechnology.  Potential products that appear to be promising at
early stages of development may not reach the market for a number of reasons.
Such reasons include the possibilities that potential products are found during
testing to be ineffective, or unsafe, that they fail to receive necessary
regulatory approvals, are difficult or uneconomical to manufacture on a large
scale, fail to achieve market acceptance or are precluded from commercialization
by proprietary rights of third parties.  We cannot predict with any degree of
certainty when, or if, the
<PAGE>

                                                                         Page 20

research, development, testing and/or regulatory approval process for our
proposed products will be completed. Our product development efforts may be
unsuccessful, required regulatory approvals from U.S. or foreign authorities may
not be obtained, and products, if introduced, may not be capable of being
produced in commercial quantities at reasonable costs or be successfully
marketed. The failure of our research and development activities to result in
any commercially viable products or technologies would materially adversely
affect our future prospects.

WE MAY NOT GENERATE REVENUES IN THE FUTURE BECAUSE WE HAVE CEASED OPERATION OF
OUR CONSUMER AND COMMERCIAL PRODUCT AREAS

We have generated substantially all our prior revenues from our consumer and
commercial products. We have discontinued operations for our consumer and
commercial product business areas and are exploring alternatives for our
agricultural product business.  We will not generate revenues or other funds on
an ongoing basis unless we receive current payments with respect to the sale of
these areas, receive payments in connection with any potential licensing or
other partnering arrangement with other pharmaceutical or biotechnology
companies, or we are able to bring to market pharmaceutical or agricultural
products.



WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FUNDING WHEN NEEDED, WHICH COULD REDUCE
OUR ABILITY TO FUND OR EXPAND OPERATIONS

We believe that our existing funds, together with additional capital from
current commitments from EIS, are sufficient to fund our operating expenses and
capital requirements into the second quarter of 2002. We are pursuing additional
funds through sales of our securities and may also seek funds in conjunction
with the in-licensing of additional bio-pharmaceutical products where we acquire
in-licenses and development funds in exchange for our securities. Additional
equity financing may result in dilution to our shareholders. The resale of our
common stock by selling stockholders may negatively affect our ability to obtain
financing. If the market price of our common stock declines, some potential
investors may either refuse to offer us any financing or will offer financing at
unacceptable rates or unfavorable terms. If we are unable to obtain financing on
favorable terms, we may be unable to fund or expand our operations or we may
only be able to fund or expand our operations on terms that adversely affect our
financial condition. If we are unable to obtain financing necessary to fund our
operations, we may have to sell or liquidate SafeScience.

OUR FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY OR OUR INFRINGEMENT ON THE
PROPERTY RIGHTS OF OTHERS MAY IMPEDE OUR ABILITY TO OPERATE FREELY

We rely significantly upon proprietary technology. To the extent that we
currently rely upon certain unpatented, proprietary technology, processes and
know-how and the protection of such intellectual property by confidentiality
agreements, others may independently develop similar technology and know-how or
confidentiality may be breached. Any claims against us or any purchaser or user
of our products or patents, including GBC-590, asserting that our products or
patents infringe or may infringe proprietary rights of third parties, if
determined adversely to us, could have a material adverse effect on our
business, financial condition or results of operations.  Any claims, with or
without merit, could be time-consuming, result in costly litigation, divert the
efforts of our technical and management personnel, or require us to enter into
royalty or licensing agreements, any of which could have a material adverse
effect upon our operating results.  Such royalty or licensing agreements, if
required, may not be available on terms acceptable to us, if at
<PAGE>

                                                                         Page 21


all. In the event a claim against us is successful and we cannot obtain a
license to the relevant technology on acceptable terms, license a substitute
technology or redesign our products to avoid infringement, our business,
financial condition and results of operations would be materially adversely
affected.

WE DEPEND ON TECHNOLOGY LICENSED TO US BY THIRD PARTIES AND IF WE ARE UNABLE TO
CONTINUE LICENSING THIS TECHNOLOGY WE MAY BE UNABLE TO GENERATE REVENUES

We license our technology, including GBC-590, from third parties.  We anticipate
that we will continue to license technology from third parties in the future.
This technology may not continue to be available on commercially reasonable
terms, if at all. For example, our license with Wayne State University and the
Karmanos Cancer Institute may be terminated if we do not receive FDA or
equivalent agency approval to sell GBC-590 by January 1, 2006. The technology we
license from third parties would be difficult to replace. The loss of any of
these technology licenses would result in delays in the availability of our
products until equivalent technology, if available, is identified, licensed and
integrated and could materially adversely affect our future prospects. The use
of replacement technology from other third parties would require us to enter
into license agreements with these third parties, which could result in higher
royalty payments and a loss of product differentiation.

WE EXPECT TO REMAIN DEPENDENT ON COLLABORATIONS WITH THIRD PARTIES FOR THE
DEVELOPMENT OF NEW PRODUCTS

Our current business strategy is to enter into agreements with third parties
both to license rights to our potential products and to develop and
commercialize new products.  We may not be able to enter into or maintain these
agreements on terms favorable to us.  If we are unable to maintain productive
relationships with our collaborative partners our ability to develop our
products will be harmed.


THE DEVELOPMENT OF GBC-590 IS NOT IN OUR EXCLUSIVE CONTROL AND IS JOINTLY
DETERMINED WITH ELAN AND EIS

We are developing GBC-590 through collaboration with Elan and EIS.   SafeScience
Newco, Ltd. is a company that we formed and jointly own with EIS to develop GBC-
590 in the field of oncology.  We own 80.1% and EIS owns 19.9% of SafeScience
Newco, Ltd. Despite our majority ownership of SafeScience Newco, Ltd., we do not
control the development activities regarding GBC-590, because we control only
50% of the voting interest of the joint management committee of SafeScience
Newco, Ltd. which determines the plans for the development of GBC-590. As a
result, development of GBC-590 will depend on our ability to negotiate
development issues with EIS.

EIS has the right to exchange our Series A convertible exchangeable preferred
stock it owns for all of the preferred securities we own of SafeScience Newco,
Ltd. at any time until July 10, 2007, which would give EIS a 50% ownership
interest in SafeScience Newco, Ltd.  If EIS exercises this right, our ownership
in SafeScience Newco, Ltd. will be substantially diluted, which would reduce the
return to which we would be entitled if GBC-590 is successful.
<PAGE>

                                                                         Page 22

IF OUR PRODUCTS ARE NOT ACCEPTED BY AGRICULTURAL AND MEDICAL COMMUNITIES OUR
BUSINESS WILL SUFFER

Our principal product areas are agricultural products and pharmaceuticals.
Commercial sales of our proposed products in these areas will substantially
depend upon the products' efficacy and on their acceptance by the agricultural
and medical communities.  Widespread acceptance of our products will require
educating the agricultural and medical communities as to the benefits and
reliability of the products. Our proposed products may not be accepted, and,
even if accepted, we are unable to estimate the length of time it would take to
gain such acceptance.

IF THE THIRD PARTIES WE RELY ON FOR MANUFACTURING OUR PRODUCTS ARE UNABLE TO
PRODUCE THE NECESSARY AMOUNTS OF OUR PRODUCTS, DO NOT MEET OUR QUALITY NEEDS OR
TERMINATE THEIR RELATIONSHIPS WITH US, OUR BUSINESS WILL SUFFER

We do not presently have our own manufacturing operations, nor do we intend to
establish any unless and until in the opinion of management, the size and scope
of our business so warrants.  While we have established manufacturing
relationships with firms to provide us with GBC-590 and Elexa that we believe
will provide the capability to meet our anticipated requirements for the
foreseeable future, we have not entered into any long-term arrangements for
manufacturing and such arrangements may not be obtained on desirable terms.
Therefore, for the foreseeable future, we will be dependent upon third parties
to manufacture our products.

Our reliance on independent manufacturers involves a number of risks, including
the absence of adequate capacity, the unavailability of, or interruptions in,
access to necessary manufacturing processes and reduced control over delivery
schedules.  If our manufacturers are unable or unwilling to continue
manufacturing our products in required volumes, we will have to identify
acceptable alternative manufacturers.  The use of a new manufacturer may cause
significant interruptions in supply if the new manufacturer has difficulty
manufacturing products to our specifications.  Further, the introduction of a
new manufacturer may increase the variation in the quality of our products.

WE FACE INTENSE COMPETITION AND RAPID TECHNOLOGICAL CHANGES IN THE MARKETS IN
WHICH WE COMPETE, AND OUR FAILURE TO SUCCESSFULLY COMPETE OR ADAPT TO CHANGING
TECHNOLOGY COULD MAKE IT DIFFICULT TO ACQUIRE AND RETAIN CUSTOMERS

Many companies, including large pharmaceutical, chemical, biotechnology and
agricultural concerns, universities and other research institutions, with
financial resources and research and development staffs and facilities
substantially greater than ours, may develop or attempt to develop products that
compete with our products.  These companies may have the ability to devote far
greater resources to researching, developing and marketing their products than
we are able to do.  In addition, the biotechnology industry is one in which
technological change is extremely rapid.  Our ability to anticipate changes in
technology and industry standards together with regulatory changes and to
successfully develop and introduce new and enhanced products on a timely basis
will be significant factors in our ability to grow and remain competitive.  Any
products which we do develop may become technologically obsolete before we have
had the ability to realize significant revenues or profits.
<PAGE>

                                                                         Page 23


OUR BUSINESSES ARE SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION AND FAILURE TO
ACHIEVE REGULATORY APPROVAL OF OUR PRODUCTS WOULD SEVERELY HARM OUR BUSINESS

The FDA regulates the manufacture, distribution and promotion of pharmaceutical
products in the United States pursuant to the Federal Food Drug and Cosmetic Act
and related regulations.  We must receive premarket approval by the FDA for any
commercial sale of our pharmaceutical products.  Before receiving such approval
we must provide proof in human clinical trials of the nontoxicity, safety and
efficacy of our pharmaceutical products, which trials can take several years.
Premarket approval is a lengthy and expensive process.  We may not be able to
obtain FDA approval for any commercial sale of our product.  By regulation, the
FDA has 180 days to review an application for approval to market a
pharmaceutical product; however, the FDA frequently exceeds the 180-day time
period.  In addition, based on its review, the FDA may determine that additional
clinical trials are required. Except for any potential licensing or marketing
arrangements with other pharmaceutical or biotechnology companies, we will not
generate any revenues in connection with our pharmaceutical products unless and
until we obtain FDA approval to sell our products in commercial quantities for
human application.

The investigation, manufacture and sale of agricultural products are subject to
regulation by the EPA, including the need for approval before marketing, and by
comparable foreign and state agencies.  Our agricultural products will be able
to be commercially marketed for use either in the United States or other
countries only by first obtaining the necessary approvals.  While we hope to
obtain regulatory approvals for our proposed products, we may not obtain these
approvals on a timely basis, if at all. We have received approval from the EPA,
California and other states for Elexa 4%.

REIMBURSEMENT PROCEDURES AND FUTURE HEALTHCARE REFORM MEASURES ARE UNCERTAIN AND
MAY ADVERSELY IMPACT THE SALE OF OUR PHARMACEUTICAL PRODUCTS

Our ability to sell our pharmaceutical products successfully will depend in part
on the extent to which government health administration authorities, private
health insurers and other organizations will reimburse patients for the costs of
our pharmaceutical products and related treatments.  In the United States,
government and other third-party payers have sought to contain healthcare costs
by limiting both coverage and the level of reimbursement for new pharmaceutical
products approved for marketing by the FDA.  In some cases, these payers may
refuse to provide any coverage for uses of approved products to treat medical
conditions even though the FDA has granted marketing approval.  Healthcare
reform may increase these cost containment efforts.  We believe that managed
care organizations may seek to restrict the use of new products, delay
authorization to use new products or limit coverage and the level of
reimbursement for new products.  Internationally, where national healthcare
systems are prevalent, little if any funding may be available for new products,
and cost containment and cost reduction efforts can be more pronounced than in
the United States.

ISSUANCES OF OUR SECURITIES ARE SUBJECT TO FEDERAL AND STATE SECURITIES LAWS AND
CERTAIN PRIOR OFFERINGS OF OUR SECURITIES MAY NOT HAVE COMPLIED WITH APPLICABLE
SECURITIES LAWS

Issuances of securities are subject to federal and state securities laws.
Certain prior private placement offerings of our securities may not have
complied with requirements of applicable state securities laws. In such
situations a number of remedies may be available to regulatory authorities and
stockholders who purchased securities in such offerings, including, without
limitation, rescission rights.
<PAGE>

                                                                         Page 24


OUR GROWTH MAY BE LIMITED IF WE ARE UNABLE TO RETAIN AND HIRE ADDITIONAL
QUALIFIED PERSONNEL AS NECESSARY

Our success will depend on our ability to retain key employees and our
continuing ability to attract and retain highly qualified scientific, technical
and managerial personnel.  Competition for such personnel is intense and we may
not be able to retain existing personnel or attract qualified employees in the
future.  At present, we employ approximately 11 full-time employees and one part
time worker.  We depend upon the personal efforts and abilities of our officers
and directors, and would be materially adversely affected if their services
ceased to be available for any reason and comparable replacement personnel were
not employed.

THE BUSINESSES IN WHICH WE ENGAGE HAVE A RISK OF PRODUCT LIABILITY, AND IN THE
EVENT OF A SUCCESSFUL SUIT AGAINST US, OUR BUSINESS COULD BE SEVERELY HARMED

The testing, marketing and sale of agricultural and pharmaceutical products
entails a risk of product liability claims by consumers and others.  While we
currently maintain product liability insurance which we believe to be adequate,
such insurance may not continue to be available at a reasonable cost or may not
be sufficient to fully cover any potential claims.  In the event of a successful
suit against us, the lack or insufficiency of insurance coverage could have a
material adverse effect on our business and financial condition.

WE ARE CONTRACTUALLY OBLIGATED TO ISSUE SHARES IN THE FUTURE, INCLUDING THE
CONVERSION OF OUTSTANDING PREFERRED STOCK AND WARRANTS HELD BY EIS WHICH MIGHT
CAUSE SIGNIFICANT DILUTION TO OUR EXISTING SHAREHOLDERS.

As of June 30, 2001 there were outstanding options to purchase 986,251 shares of
common stock, at a weighted average exercise price of $6.34 per share and
warrants to purchase 4,851,360 shares of common stock at a weighted average
price of $2.90 per share.  Moreover, we may in the future issue additional
shares and warrants to raise capital, acquire other companies or technologies,
to pay for services, or for other corporate purposes. Any such issuances will
have the effect of further diluting the interest of current shareholders.

    In July 2001, in connection with a business venture and financing
transaction, we sold to EIS 1,116.79 shares of our Series C convertible non-
voting preferred stock, 4,944.44 shares of our Series A convertible exchangeable
non-voting preferred stock and a warrant to purchase 381,679 shares of our
common stock.  Each share of our Series A preferred stock and Series C preferred
stock is presently convertible after July 10, 2003 into 1,000 shares of our
common stock.  The Series A preferred stock bears a 7% dividend payable in
Series A preferred stock, which compounds annually. Accordingly, a total of
6,442,909 shares of our common stock could be issued to EIS, assuming the
exercise of the warrants and the conversion into common stock of all shares of
Series A and Series C preferred stock currently outstanding, but not including
any dividends to be issued on the Series A preferred stock. This amount of
shares represents 22.5% of our currently outstanding common stock. Pursuant to
provisions in our agreement with EIS, if the exercise or conversion of any of
our securities held by EIS would result in EIS owning more than 9.9% of our
common stock at any time EIS may opt to receive non-voting securities instead of
common stock. In addition EIS may purchase up to 5,654.1176 shares of our
Series B convertible non-voting preferred stock in the future at a price per
share of $1,700. The Series B preferred stock bears a 7% dividend payable in
Series B preferred stock which compounds annually. A total of 5,654,118 shares
<PAGE>

                                                                         Page 25


of common stock could be issued to EIS assuming the purchase of all the Series B
preferred stock but not including any dividends to be issued on the Series B
preferred stock.

WE MUST COMPLY WITH THE LISTING REQUIREMENTS OF THE NASDAQ SMALLCAP MARKET OR
OUR COMMON STOCK MAY DECLINE AND ITS LIQUIDITY WOULD BE ADVERSELY AFFECTED

Our common stock could be delisted from The Nasdaq Stock Market for the
following reasons:

 .  if the bid price of our common stock falls below $1.00 per share for thirty
(30) consecutive business days;

 .  if we have less than (A) $2,000,000 in net tangible assets (total assets less
total liabilities and goodwill) or (B) $2,500,000 in equity and our market
capitalization falls below $35 million; or

 .  if the value of our common stock held by our stockholders (other than our
directors and executive officers) is less than $1,000,000.

On November 1, 2002, the $2,000,000 net tangible assets test will no longer be a
listing requirement. There are other quantitative and qualitative criteria of
the Nasdaq SmallCap Market which if violated could lead to delisting of our
common stock.

On June 6, 2001 we received a letter from The Nasdaq Stock Market notifying us
that the staff had determined that we did not comply with the minimum standards
for continued listing. On July 13, 2001 we filed a Current Report on Form 8-K/A
containing our unaudited May 31, 2001 balance sheet on a pro-forma basis
reflecting the closing of the transaction with Elan and EIS. On July 16, 2001,
we were notified by Nasdaq that they deemed us to be in compliance with the net
tangible assets/market capitalization/net income requirement and all other
requirements necessary for continued listing on the Nasdaq SmallCap Market.
Accordingly, SafeScience's oral hearing that had been scheduled for Thursday,
July 19, 2001 was canceled and the hearing file was closed. However, we may not
be able to maintain our compliance with Nasdaq continued listing requirements in
the future.

If Nasdaq delisted our common stock, we would likely seek to list our common
stock for quotation on a regional stock exchange.  However, if we were unable to
obtain listing or quotation on such market or exchange, trading of our common
stock would occur in the over-the-counter market on an electronic bulletin board
for unlisted securities or in what are commonly known as the "pink sheet."  In
addition, delisting from Nasdaq and failure to obtain listing or quotation on
such market or exchange would subject our common stock to so-called "penny
stock" rules.  These rules impose additional sales practice and market making
requirements on broker-dealers who sell and/or make a market in such securities.
Consequently, broker-dealers may be less willing or able to sell and/or make a
market in our common stock.  Additionally, an investor would find it more
difficult to dispose of, or to obtain accurate quotations for the price of, our
common stock.  As a result of a delisting, it may become more difficult for us
to raise funds through the sale of our securities.

IF A SIGNIFICANT NUMBER OF SHARES BECOME AVAILABLE FOR SALE OUR STOCK PRICE
COULD DECLINE

Many shares of common stock presently issued and outstanding are "Restricted
Securities" as that term is defined in Rule 144 promulgated under the Act.  In
general, under Rule 144, a person (or persons whose shares are aggregated) who
has satisfied a one year holding period may sell, within any three month period,
an amount which does not exceed the greater of 1% of the then outstanding shares
of common stock or the average weekly trading volume during the four calendar
weeks prior to such sale.  Rule 144 also permits the sale of shares, under
certain circumstances, without any quantity limitation, by persons who are not
affiliates of SafeScience and who have beneficially owned the shares for a
minimum period of two years.  The possible sale of these restricted shares may,
in the future, increase the number of free-trading shares and
<PAGE>

                                                                         Page 26

may have a depressive effect on the price of our securities. Moreover, such
sales, if substantial, might also adversely affect our ability to raise
additional equity capital.

BECAUSE OUR CURRENT MANAGEMENT CONTROLS A SIGNIFICANT PERCENTAGE OF OUR COMMON
STOCK, THEY HAVE SUBSTANTIAL CONTROL OVER US

The holders of the common stock do not have cumulative voting rights.  Two of
our directors, one of whom is an executive officer of SafeScience, own
approximately 16% collectively of the outstanding shares of common stock.  These
stockholders can substantially influence all matters requiring stockholder
approval, including the election of directors and the approval of significant
corporate transactions. One of the conditions of the transactions between us,
Elan and EIS requires that we expand our board of directors to six members on
the next regularly scheduled stockholder's meeting at which time EIS will be
entitled to appoint one director. At such time members of the board of directors
and their affiliates shall own approximately 25% of the outstanding common stock
assuming EIS has not converted or exercised any of our securities held by it,
and the same number of shares are outstanding at such time as are currently
outstanding. This concentration of ownership could have the effect of delaying
or preventing a change in control or otherwise discouraging a potential acquirer
from attempting to obtain control of us, which in turn could materially
adversely affect our stock price.

THE PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE, WHICH COULD RESULT IN
SUBSTANTIAL LOSSES BY YOU

The market price of the common stock, which is traded on the National
Association of Securities Dealers Automated Quotation (NASDAQ - Small Cap) has
been, and may continue to be, highly volatile.  The stock market has from time
to time experienced extreme price and volume fluctuations, particularly in the
biotechnology sector, which have often been unrelated to the operating
performance of particular companies.  In addition, factors such as announcements
of technological innovations or new products, either by us or by our competitors
or third parties, as well as market conditions within the various industries in
which we compete, may have a significant impact on the market price of our
common stock.

AN INVESTMENT IN OUR STOCK IS SPECULATIVE AND ENTAILS A HIGH DEGREE OF RISK

There is nothing at this time upon which to base an assumption that our plans
for our business will prove successful.  If our plans prove unsuccessful, the
purchasers of our shares may lose all or a substantial part of their investment.
Our operations are subject to numerous risks associated with the development of
agricultural and pharmaceutical products, including the competitive and
regulatory environment in which we operate.  In addition, we may encounter
unanticipated problems, including manufacturing, distributing and marketing
difficulties, some of which may be beyond our financial and technical abilities
to resolve.  The failure adequately to address such difficulties could have a
material adverse effect on our prospects and our financial condition.

WE HAVE NOT PAID AND DO NOT INTEND TO PAY ANY DIVIDENDS

To date, we have not paid any cash dividends on our common stock.  Our Board of
Directors does not intend to declare any cash dividends in the foreseeable
future, but instead intends to retain all earnings, if any, for use in our
business operations.  Furthermore, as we may be required to obtain additional
financing, there may be restrictions on our ability to declare any cash
dividends on common stock in the future.
<PAGE>

                                                                         Page 27


PART II - OTHER INFORMATION


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On June 5, 2001, the Company held its Annual Meeting of Stockholders. Four items
were voted upon:  (1) an amendment of the Articles of Incorporation; (2) the
election of directors;  (3) the ratification of the appointment of auditors and
(4) an amendment of the 2000 Stock Incentive Plan.

The proposed amendment to the Articles of Incorporation providing for the
classification of the Board of Directors into three classes of directors with
staggered terms of office was approved by a vote of 13,528,918 in favor,
3,436,600 against with 40,901 abstentions out of a total of 17,006,419 votes
cast.

The nominees for director and subsequently approved by the shareholders were
Bradley J. Carver, David W. Dube, Theodore J. Host, and Brian G. R. Hughes. The
following table indicates the term expiration dates and the number of votes cast
with respect to each candidate, the number of votes in favor and the number of
votes withheld.

<TABLE>
<CAPTION>

                        Term        Total        Votes       Votes
Nominee               Expiration  Votes Cast   In Favor    Withheld
-------               ----------  ----------  ----------  ---------
<S>                   <C>         <C>         <C>         <C>
Bradley J. Carver       2004      23,720,527  20,391,801  3,328,726
David W. Dube           2004      23,720,527  20,398,468  3,322,059
Theodore J. Host        2002      23,720,527  20,398,468  3,322,059
Brian G. R. Hughes      2003      23,720,527  20,441,325  3,279,202
</TABLE>
     The appointment of Arthur Andersen LLP as auditors for the Company for the
fiscal year ended December 31, 2001 was approved by a vote of 23,589,037 in
favor, 99,001 against with 32,489 abstentions out of a total of 23,720,527 votes
cast.

     The Amendment of the 2000 Stock Incentive Plan to increase the number of
shares reserved for issuance by 1,250,000 shares was approved by a vote of
19,938,470 in favor, 3,649,689 against with 132,368 abstentions out of a total
of 23,720,527 votes cast.



ITEM 6.  EXHIBITS AND REPORT ON FORM 8-K.

(a)  Exhibits


4.1   Certificate of Designations, Preferences and Rights of Series A,
      Series B and Series C Preferred Stock of SafeScience, Inc.

10.1  Securities Purchase Agreement dated June 22, 2001 between
      SafeScience, Inc. and Elan International Services, Ltd.*
<PAGE>

                                                                         Page 28


10.2  Subscription, Joint Development and Operating Agreement
      dated as of June 29, 2001 among Elan Corporation, plc., Elan
      International Services, Ltd., SafeScience, Inc. and SafeScience
      Newco, Ltd.*

10.3  SafeScience License Agreement dated as of June 29, 2001
      between SafeScience, Inc. and SafeScience Newco, Ltd.*

10.4  Elan License Agreement dated as of June 29, 2001 between Elan
      Corporation, plc. and SafeScience Newco, Ltd.*

10.5  SafeScience Registration Rights Agreement dated as of
      June 29, 2001 between SafeScience, Inc. and Elan
      International Services, Ltd.*

10.6  SafeScience Newco Registration Rights Agreement dated as of
      June 29, 2001 among SafeScience Newco, Ltd., SafeScience,
      Inc. and Elan International Services, Ltd.*

10.7  Warrant dated July 10, 2001 issued to Elan
      International Services, Ltd.

* Previously filed with the commission as an exhibit to and incorporated by
  reference from the Company's Current Report on Form 8-K filed with the
  Commission on June 29, 2001


(b)   Reports on Form 8-K.

On April 9, 2001 the Company filed a Current Report on Form 8-K to report the
issuance of press releases regarding (i) the appointment of members to its
Scientific Advisory Board, (ii) the discontinuation of its consumer and
commercial product lines, and (iii) the results of GBC-590 in Phase IIa clinical
trials for colorectal cancer.

On May 23, 2001, the Company filed a Current Report on Form 8-K to report the
amendment of its license agreement with Wayne State University and the Barbara
Ann Karmanos Cancer Institute.

On June 18, 2001, the Company filed a Current Report on Form 8-K to report the
issuance of press releases regarding (i) the signing of a letter of intent with
Elan Corporation, plc to enter into a business venture, and (ii) the receipt of
a Nasdaq Staff Determination indicating that the Company failed to comply with
the minimum net tangible assets, market capitalization or net income requirement
and that its shares were subject to delisting.

On June 29, 2001 the Company filed a Current Report on Form 8-K to report the
signing of a securities purchase agreement and joint venture agreements  with
Elan Corporation, plc. and Elan International Services, Ltd. In addition the
Company reported the granting of an exemption by Nasdaq from shareholder
approval for the transaction with Elan Corporation, plc. and Elan International
Services, Ltd.
<PAGE>

                                                                         Page 29

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.

Dated this 14th day of August 2001.
           ----               -----


     SAFESCIENCE, INC.
     (the "Registrant")



     BY:   /s/ Bradley J. Carver
           -----------------------------------------------------
           Bradley J. Carver, CEO, President, Treasurer,
           and a member of the Board of Directors



     BY:   /s/ John W. Burns
           -----------------------------------------------------
           John W. Burns, Senior Vice President, CFO & Secretary



     BY:   /s/ Patrick J. Joyce
           -----------------------------------------------------
           Patrick J. Joyce, Controller, Principal
           Accounting Officer