-



                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                             Form 10-KSB

        [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934
           For the fiscal year ended December 31, 1999, or

        [ ]  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 0-24378

                       First Scientific, Inc.
            (Name of small business issuer in its charter)

                   DELAWARE                            33-0611745
        -------------------------------          ----------------------
        (State or other jurisdiction of            (I.R.S. Employer
        incorporation or organization)           Identification Number)

       1877 West 2800 South, Suite 200
                 Ogden, Utah                              84401
       -------------------------------            ----------------------
     (Address of principal executive offices)           (Zip Code)

 Registrant's telephone number, including area code:  (801) 393-5781

        Securities to be registered under Section 12(g) of the Act:

                                                  Name of each exchange
       Title of each Class                         on which registered

               None                                      None

       Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, $.001 Par Value
                           (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-B is not contained herein, and will not
be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Registrant's revenues for its most recent fiscal year were $553,631.

The aggregate market value of the voting stock held by
non-affiliates of the Registrant as of December 3, 1997:
Not applicable, shares not traded.

As of March 13, 2000 Registrant had outstanding 20,711,436  shares
of Common Stock.

                 DOCUMENTS INCORPORATED BY REFERENCE

                                 None

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]



<PAGE>


                        FIRST SCIENTIFIC, INC.
                          INDEX-FORM 10-KSB


                                PART I
                                                                  Page

Item 1. Description of Business. . . . . . . . . . . . . . . . . . . 1

Item 2. Description of Property. . . . . . . . . . . . . . . . . . . 9

Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 9



                               PART II

Item 5. Market for the Common Equity and Related Stockholder Matters 9

Item 6. Management's Discussion and Analysis and Plan of Operations.10

Item 7. Financial Statements . . . . . . . . . . . . . . . . . . . .15



                               PART III

Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance
    with Section 16(a) of the Exchange Act . . . . . . . . . . . . .15

Item 10.   Executive Compensation. . . . . . . . . . . . . . . . . .17

Item 11.   Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Item 12.   Certain Relationships and Related Transactions  . . . . .20

                               PART IV

Item 13.   Exhibits and Reports on Form 8-K. . . . . . . . . . . . .21

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Index to Financial Statements and Schedules. . . . . . . . . . . . .23

<PAGE>
                              i-



PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Forward Looking Statements and Information May Prove Inaccurate

When used in this Form 10-KSB and in other filings by the Company
with the SEC, in the Company's press releases or in other public or
stockholder communications or oral statements made with the approval
of an authorized executive officer of the Company, the words or
phrases "would be," "will allow," "intends to," "believes," "plans,"
"will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are
intended to identify "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.

The Company cautions readers not to place undue reliance on any
forward looking statements, which speak only as of the date made,
are based on certain assumptions and expectations which may or may
not be valid or actually occur, and which involve risks of product
demand, market acceptance, economic conditions, competitive products
and pricing, difficulties in product development, commercialization,
and technology, and other risks.  In addition, sales and other
revenues may not commence and /or continue as anticipated due to
delays or otherwise.  As a result, the Company's actual results for
future periods could differ materially from those anticipated or
projected.

The Company does not intend to update the forward looking statements
contained in this report, except as may occur as part of its ongoing
periodic reports filed with the Securities and Exchange Commission.

Organization and General Development

Whenever in this discussion the term"Company" is used, it should be
understood to refer to First Scientific, Inc. ("First Scientific")
and its wholly owned subsidiary, First Scientific Corporation, on a
consolidated basis, except where the context clearly indicates
otherwise.

First Scientific, Inc. is a Delaware corporation organized on June
11, 1992 under the name of SPPS Financial Corporation ("SPPS").
SPPS  was a corporation without operations until September 15,1998
when it entered into a reorganization with Linco Industries, Inc.

First Scientific Corporation was incorporated as a Utah corporation
on April 30, 1990 under the name of Linco Industries, Inc.
("Linco").  Linco was formed to take advantage of a linseed oil
based soap formula. After limited success with this product,  Linco
began to focus its resources on developing a rash treatment and
prevention baby wipe solution. This product was marketed through a
private label agreement with a national distributor. In 1994, Linco
recruited Dr. Edward Walker, a chemistry professor at nearby Weber
State University and director of the  Utah State Center for
Excellence for Chemical Technology at Weber State University, as a
shareholder and director.  In March of 1998 Dr. Walker, at his own
request, relinquished his stock ownership in  Linco in exchange for
a royalty agreement. This royalty agreement was subsequently
acquired by the Company during the reorganization with SPPS, as
described below.  Through the acquisition of  his technology, Dr.
Walker became a major shareholder in the Company and now serves as
Director of Research and Development and as a member of the Board of
Directors of the Company.

On September 15, 1998, Linco entered into and completed an agreement
with SPPS pursuant to which SPPS issued 8,798,080 shares of its
common stock in exchange for 100% of the issued and outstanding
common stock of Linco. Concurrently, SPPS changed its name to First
Scientific, Inc. In connection with the agreement, First Scientific
issued 5,201,920 shares of common stock to Dr. Edward Walker for the
cancellation of a royalty agreement and for rights to technology
relating to an instant chemical skin sanitizer formulation and
issued or received subscriptions for 2,666,659 shares of common
stock in exchange for approximately $2,000,000 of cash and
marketable securities through a private placement memorandum. The
agreement between Linco and SPPS has been accounted for as the
reorganization of Linco and the issuance of shares to the SPPS
shareholders  at historical cost. Concurrent with the reorganization
Linco changed its name to First Scientific Corporation.


<PAGE>
                                   -1-

Linco developed a proprietary formula for an antibacterial cleansing
and moisturizing solution in 1996.  Products from this formulation
can be produced in the form of wipes or bottle sprays. In 1996,
Linco also invented a second proprietary formulation, a
Dimethicone-based solution that can be delivered to the
incontinent/geriatric market in wipe form.  In 1998, Linco developed
a third proprietary formula, a lotion/ soap antimicrobial cleansing
and moisturizing solution that can be dispensed in tubes or bottles.
 These products were developed with market differentiating
characteristics. First, neither the antibacterial nor the
dimethicone formulations contained alcohol and therefore could be
used repetitively without damaging or drying the skin. Second, the
formulas combine FDA approved active chemical agents with natural
botanical oils, preservative, and fragrance ingredients.
Benzethonium Chloride is used in the antimicrobial cleansing and
moisturizing formulas, and Dimethicone, a proven drug for treating
and preventing diaper rash, is used in the rash product. To the
knowledge of management, no competitor has been able to develop such
combinations.

Testing, Research, and Product Development

First Scientific's relationship with the State of Utah's Center of
Excellence for Chemical Technology at Weber State University (the
"Center") allows convenient access for testing of the ingredients
and chemical solutions it formulates. Chemical testing expenses are
paid by the Company to the university on a fee-for-service basis.
This kind of agreement is similar to those that the Center enters
into with other companies. The university has no proprietary rights
in the Company's products. This relationship enables the Company to
conduct mandated tests for good manufacturing practice ("GMP") and
to test incoming raw materials to determine if they meet the strict
specifications demanded for Food and Drug Administration ("FDA")
registered products. Without this arrangement, the Company would
need to invest a large amount for testing equipment. It is
anticipated that the Company will maintain its relationship with
Weber State University.

Efficacy tests, which are particularly mandated by the FDA,
Environmental Protection Agency ("EPA") and Occupational Safety and
Health Administration ("OSHA") and required by the sellers of the
Company's products, are performed by independent certified labs
which adhere to government established protocols.  The Company will
also continue to test its own products, or to have them tested by
outside FDA compliant labs, to determine new uses, such as showing
efficacy in combating HIV, hepatitis, the flu, and athletic rashes.
Independent FDA-compliant laboratories have tested the Company's
antimicrobial products with respect to in-vivo efficacy, in-vitro
time kill, in-vitro Minimum Inhibitory Concentration,
trans-epidermal moisture gain/loss and skin irritation, surpassing
FDA testing protocols. These tests conducted following FDA protocols
found that First Scientific's antimicrobial products deliver:

-  High pathogenic efficacy by removing 99.99% of bacteria, fungi,
   yeast and viruses in 15 seconds or less.
-  Improved skin condition with frequent use vs. the skin degrading
   actives found in leading antimicrobial products that contain
   alcohol, CHG, PCMX, Triclosan(R) and iodine.
-  Continued bacteria killing efficacy for hours after use.
-  Fast-acting efficacy against a broad spectrum of microorganisms,
   including MRSA and VRE.

Independent laboratories have also tested and validated the
Company's Dimethicone-based skin protection products with favorable
results.

The three formulations the Company has invented are unique, and are
used to produce distinct products. First Scientific has another
company's chemical formulation for a fourth product available to
market: a hard surface antibacterial disinfectant.  The Company's
three formulations are FDA registered and proprietary, while the
fourth formulation, an antimicrobial hard-surface disinfectant
cleaner, is EPA registered.

<PAGE>
                                   -2-

Products
First Scientific is primarily engaged in commercializing
patent-pending formulations originally developed by Linco.  These
include:

Antimicrobial Formulation

     First Scientific's patent-pending antimicrobial formulation was
completed following several years of rigorous development and
testing. Independent laboratory testing has proven this
formulation's ability to soothe and condition the skin while
eliminating 99.99% of pathogens. The antimicrobial formulation has
exceeded the Food and Drug Administration (FDA) protocols required
for classification as a Health Care Personnel Handwash and as a
first-aid antiseptic (FDA tentative final monograph 21 CFR 333). The
Company's antimicrobial formula can be used as a facility-wide
product appropriate for patient, public and staff handwashing. This
formulation can be delivered in a variety of package types as an
antimicrobial handwash, antimicrobial lotion, antibacterial spray
and antibacterial towelettes. The Company is initially marketing its
antimicrobial formula to domestic and international professional
health care distributors and manufacturers wanting to sell such a
formula under their own private label.  Other markets, including
foodhandling, hospitality, government, education institutions,
e-commerce, retail, network marketing and select niche markets have
also been identified by the Company and are targeted for market
expansion.  These markets will be penetrated through private label
sales or through regional distributors selling the Company's own
Fresh Cleanse(R) brand.

Skin Protection Formulation

     First Scientific's patent-pending, skin protection formulation
brings together Dimethicone with skin-conditioning emollients and
botanical oils to create a unique solution for the treatment and
prevention of rashes due to incontinence. The Company has
demonstrated shelf life of this stable Dimethicone oil-in-water
emulsion for periods in excess of two years. In addition to meeting
the required protocols, as outlined by the FDA, the formulation
meets the requirements as an over-the-counter drug product. This
product, in towelette form, is used for the treatment and prevention
of skin rashes caused by infant and adult incontinence. The Company
currently supplies the skin protection formula to a third-party
manufacturer, which produces a waterless, patient-bathing product
for ConvaTec, a division of Bristol-Myers Squibb Company.

Product Uses and Benefits

First Scientific's patent-pending formulations can be used in the
following manner:

  Product and Primary Delivery Mode                       Benefits
----------------------------------------    ----------------------------------

Antimicrobial and antibacterial products    Aseptic sanitizing while improving
including handwashes, lotions, sprays and   skin/hand condition
towelettes



Skin protective, Dimethicone-based          Cleansing plus treatment and protec-
towelettes and sprays                       tion of skin rashes caused by infant
                                            and adult incontinence

<PAGE>
                                   -3-

Product Forms / Types
First Scientific's antimicrobial and skin protection formulas are
available in the following forms / types:

First Scientific Product Forms:                       Types:
-------------------------------          --------------------------

Antimicrobial Formula:

Antimicrobial Soap / Health Care         -     Pump bottles
Personnel Handwash                       -     Tubes
                                         -     Cartridge pouches
                                         -     Refill bulk containers

Antimicrobial Hand-sanitizing Lotion     -     Pump bottles
                                         -     Squeeze bottles
                                         -     Cartridges
                                         -     Refill bulk containers

Antibacterial Sanitizing Spray           -     Spray bottles

Antibacterial Towelettes                 -     Individual packets
                                         -     Bulk containers (plastic tubs)
                                         -     Flow wrap packaging

Skin Protection Formula:

Towelettes                               -     Bulk containers (plastic tubs)
                                         -     Flow wrap packaging


   Markets for the Company's Products

         The market for antimicrobial products is growing
   rapidly. This trend is a result of new strains of bacteria
   that, once they infiltrate the body, are in many cases
   resistant to, or even totally unaffected by, existing drugs.
   Moreover, hospital-acquired infections are leading to
   increasing insurance settlements.

         As a result of these and other trends in infection
   control, FDA and EPA requirements for cleanliness are becoming
   increasingly important issues every day in the industries
   affected by bacteria and other infectious microorganisms. In
   response, more stringent and regular inspections are routinely
   conducted.

         Antimicrobial and antibacterial products are now relied
   on to protect personal health and workplace environments from
   illnesses and deaths caused by a variety of pathogens.  This
   is also developing into a major concern for the hospitality
   industry, schools, government, money-handling businesses and
   other significant markets.  The mass media is chronicling
   these cases on a frequent basis. The media is warning and
   educating people regarding the spread of bacteria. The FDA,
   EPA and other national and international public regulatory
   agencies, along with private watchdog groups, are also
   demanding higher standards to fight the pathogens that
   threaten the world's population.

         Several manufacturers have responded to this demand by
   marketing antimicrobial and antibacterial products. However,
   independent testing reveals that of these products contain
   skin irritating active ingredients, such as alcohol, PCMX,
   CHG, Triclosan  and iodine, causing skin degradation.
   Management believes First Scientific is uniquely positioned to
   deliver to health care providers, food handlers, and even the
   consumer at home, more effective, gentle-to-use antimicrobial
   and skin protection products.

<PAGE>
                                   -4-

           The Company's Dimethicone-based skin protection
   formula sales are targeted at hospitals and long-term care
   facilities, as well as the infant care market. Additionally,
   with people living longer and professional and family in-home
   care becoming more prevalent due to skyrocketing health care
   costs, predictable market growth is anticipated. However,
   there can be no assurance as to future levels of sales or
   market share the Company can obtain or sustain. First
   Scientific also plans to pursue the infant diaper rash
   treatment and prevention market where there is substantial
   competition, yet likely sales potential.

   Market Category Potential

   Professional Health Care

           Health care workers, through patient contact, are a
   leading cause of transmission of nosocomial, or
   hospital-acquired, infection. In the case of Hepatitis B,
   health care workers are between 5 and 15 times more likely to
   contract the virus than the general U.S. population
   (Association of Infection Control Professionals).  Moreover,
   nosocomial infection is the most common immediate cause of
   death in nursing home patients, and the leading cause of
   patient hospitalization. The Center for Disease Control
   estimates over 1.5 million cases of nosocomial infection in
   long-term care facilities and nursing homes occur each year,
   or an average of one infection per year per patient. According
   to the American Journal of Infection Control (June/August
   1991), between 5% and 18% of all patients have an active
   infection at any given time.

           The large, fast-growing professional health care
   market comprises a small group of dominant manufacturers and
   medical supply distribution companies.  They sell to
   hospitals, nursing/long-term care facilities, physician and
   dental offices, laboratories and other health-related
   organizations or to group purchasers.  The manufacturers,
   distribution companies and group purchase organizations
   control product flow to the market. Marketplace success in the
   professional health care category will be driven by
   establishing strategic alliances with manufacturers and
   distribution companies to get First Scientific's products to
   the end user. Hospitals (47%), physician offices (19%), and
   nursing/long-term care facilities (13%) account for more than
   75% of the annual handwashing occasions in the professional
   health care arena.

           Additionally, an annual industry study conducted by
   Kovach & Associates, a leading consulting firm, confirms the
   market opportunity for handwash products in the professional
   heath care market with total dollars just over $408 million.
   Four key segments accounting for the majority of sales includes:

              Segment                  % Total dollars
   ----------------------------        ---------------

   Hospital/Nursing                            30.6%

   Nursing homes                               24.5%

   Hospital operating rooms                    12.2%

   Hospital housekeeping                       22.9%

   TOTAL                                       90.2%

   Foodhandling

           Foodborne illness kills over 10,000 people each year.
   Over 70% of all outbreaks originate in foodservice operations
   and, as many as 40% are the result of poor handwashing and
   cross-contamination. Each year over 80 million estimated cases
   of food poisoning occur in the United States alone. The U.S.
   spends between $7.6 and $23 billion annually on health care
   and lost productivity resulting from foodborne illness. The
   average incident costs for a foodservice company is over
   $75,000 and results in significant future sales losses.
   (Source: FDA)

           The hands are particularly important in transmitting
   foodborne pathogens.  Food employees with dirty hands and/or
   fingernails may contaminate the food being prepared.
   According to the U. S. Food and Drug Administration's 1999
   Food Code, employee handwashing is a Critical Control Point
   under food safety plan and prevention guidelines. Therefore,
   the FDA recommends that any activity which may contaminate the
   hands must be followed by thorough handwashing in accordance
   with the procedures outlined in the Code.

<PAGE>
                                   -5-


           The foodhandling category has a similar distribution
   chain with specialized distribution companies like Sysco,
   Monarch, Alliant, etc., providing consumable goods and
   supplies to food service companies and restaurants. Dine-in
   restaurants (29%), fast food restaurants (28%) and food
   service companies (14%) account for 71% of the annual hand
   washing in the foodhandling arena.  Sources confirm a market
   opportunity for handwash products in the foodhandling market
   with total dollars just over $168 million.

   Other Major Market Segments

           There is additional market potential for the Company's
   products with government, education institutions, e-commerce,
   retail and select niche industries and sectors.  For instance,
   education institutions alone represent a $950 million market.
   First Scientific also believes that international markets
   could provide excellent marketing opportunities for its
   products because their demands parallel those of domestic
   markets.

   Target End User Markets

           Reflecting the constraints of limited resources and
   the need for focused sales efforts, First Scientific will
   proceed to generate sales revenue by focusing its
   marketing/sales strategy toward the following end user
   markets, both domestically and in select international markets:

   Antimicrobial Formula:

           Professional Health Care: material management and
   purchasing personnel at hospitals, nursing homes/long-term
   care facilities, medical clinic personnel, lab technicians,
   infection control practitioners, nurses -all types, homecare
   agency personnel, physicians, dentists, dermatologists

           Food Preparation & Handling: food processing plant
   personnel, restaurant workers, hospitality businesses and
   their personnel, central commissary, school cafeteria
   personnel and other institutions, service providers and their
   patrons

           e-commerce: On-line consumers

           Education Institutions: Public and private

           Governments: Local, state and Federal

           Select Niche Industries: money-handlers,
   students/faculty/administrators, custodians, daycare,
   cosmetologists, law enforcement and correctional facility
   personnel, EMTs

   Skin Protection Formula:

           Professional Health Care: material management and
   purchasing personnel at hospitals, nursing homes/long-term
   care facilities and homecare agency personnel

           e-commerce: On-line consumers


<PAGE>
                                   -6-


   Marketing and Sales

           First Scientific develops and markets break-through,
   proprietary antimicrobial healing and skin protecting products
   that advance healthy living. The Company's innovative products
   are proven effective by independent laboratory testing and end
   consumer analysis.

   Marketing Plan

           First Scientific has developed a comprehensive
   two-pronged marketing plan to address its primary private
   label and distribution sales targets and secondary audiences.
   The plan outlines strategies and tactics for establishing
   corporate and product awareness and generating sales.
   Marketing campaigns during fiscal year 2000 are directed
   toward establishing and building a superior market position
   for First Scientific with the emphasis on the company's
   break-through antimicrobial formulation.  As new products are
   developed, strategic marketing plans will be developed for
   them to provide fast and effective market penetration.

           In support of its marketing plan, the Company has
   engaged outside consultants, including: Kinara Advertising,
   Forthgear Design, Scribe Public Relations and Marketing, and
   Kovach & Associates Inc., a nationally-recognized, St.
   Louis-based health care consulting firm.

   Sales Approach

           First Scientific anticipates that near-term revenue
   growth will result from private-label agreements within the
   professional health care industry.  This approach provides
   quick market penetration with lower capital requirements. Due
   to the large cash investment required to launch, penetrate and
   sustain branded products, the Company is aligning with market
   leaders that already have an established sales force,
   distribution and customer base. For this reason, private
   labeling is a compelling business sales tactic for the
   Company. Moreover, the Company can offer proprietary products
   to a number of customers by altering botanical and/or
   fragrance formulations while maintaining required FDA protocols.

           Additionally, as opportunities arise, the Company
   simultaneously intends to promote its Fresh Cleanse  brand,
   which it intends to sell into several of the identified user
   groups. The Company plans to  carefully qualify its
   distribution relationships, choosing those with an established
   market presence. The Company also plans to pursue distribution
   agreements in the professional health care, foodhandling,
   hospitality, government, education institutions, retail,
   select niche markets, as well as service e-commerce sales.

           In support of this plan, First Scientific is
   assembling a sales team that will be organized in alignment
   with the end consumer markets as outlined above. The sales
   team will concentrate its efforts on securing significant
   market share in its target markets.

   Pricing / Margin Strategy

           Premium pricing can be realized only where/when First
   Scientific has a significant product performance advantage
   while being mindful of competitive pricing realities. First
   Scientific's objective, across all categories, is to base
   price for value delivered to achieve weighted margins that
   meet or exceed industry standards.

   Competition

           First Scientific's competitors are those companies
   already providing antimicrobial and antibacterial products,
   and the promise of a bacteria-free environment, to the
   professional health care, foodhandling and other
   workplace/consumer environments. First Scientific's speed to
   market and demonstrated capability of designing unique
   products to address market opportunities and customer needs
   provides the competitive edge to compete against larger,
   entrenched competitors. However, the Company's competitors are
   mostly large, well established marketers that have recognized
   brands and customer bases that pose a significant barrier to
   financial statement sales/marketing plans.

<PAGE>
                                   -7-

           The Company has not been able to identify a competitor
   that provides a single product that simultaneously eliminates
   bacteria, improves skin condition and is effective for hours
   after use. Additionally, independent testing reveals that
   competitive products incorporating skin irritating active
   ingredients, such as alcohol, PCMX, CHG, Triclosan  and
   iodine, cause skin degradation.  This product landscape
   provides First Scientific with a critical competitive
   advantage. Management believes the Company is well positioned
   to deliver products that specifically address problems
   associated with degradation of the skin caused by the
   irritating aspects of competitors' products, while also
   improving the skin's overall condition and providing
   antimicrobial persistence at higher levels.

   Summary of Business

           The Company is considered a development stage company
   for financial reporting purposes and, since inception, has
   incurred losses from operations. As of December 31, 1999, the
   Company has had cumulative net losses since inception totaling
   $6,231,062, with $4,084,532 of this total attributable to
   research and development expense. The Company is primarily
   engaged in the development of scientific chemical formulations
   and is currently marketing its products to private label
   companies that are major distributors in the over-the-counter,
   medical, health care and multi-level arenas, with nominal
   sales being made by a small distributor of First Scientific's
   branded products.  Future development of Company's own brands,
   especially in medical markets, will be pursued on a
   case-by-case basis as profitable opportunities arise.  The
   Company has developed  unique formulations; two are
   moisturizing antimicrobial sanitizing formulations that remove
   99.69% to 99.99% of bacteria from the skin without the harsh
   effects of alcohol or iodine (these products can be delivered
   in wipes, spray, lotion and lotion-soap forms) and the third,
   a topical rash prevention and treatment formulation that
   cleanses and moisturizes the skin for treatment against skin
   rashes caused by incontinence and other irritations (in wipe
   form).

           Management believes the worldwide potential market for
   such products has grown significantly in recent years and
   could continue growing at an aggressive rate. Regarding the
   Company's antimicrobial formulation, this growth is due to the
   increase in bacteria related disease, sickness and death from
   methicillin-resistant and other bacteria, the demands of
   government and health care agencies/providers to create
   healthier treatment environment and the insistence of the
   public in general for healthier living and working conditions.
   Potential market for the Company's diaper and other rash
   formulation could result from  growth of the incontinent
   geriatric population, as baby boomers grow older, and the
   product's application for the infant market.  The Company also
   markets a fourth complimentary product; an antimicrobial
   hard-surface cleaner that is E.P.A. registered for use.

           Management believes the potential markets for its
   products will continue to expand and that the Company's
   potential for becoming a significant participant in such
   markets is a reasonable expectation; however, the Company has
   not generated significant sales during its history.  The
   approximate $2,000,000 funding First Scientific received in
   the third quarter of 1998 provided a strong base for expanded
   and focused marketing and sales efforts.  These efforts are
   backed up by additional  management and staff, new executive
   offices, the upgrading of existing  research and development,
   mixing and storage facilities and expanded testing
   accommodations. The Company has raised $1,475,000 under a
   private placement equity offering during 2000, has a
   subscription agreement for $2,000,000, and is continuing to
   seek additional equity capital under similar arrangements.
   Funds raised through these private placements are planned to
   be used to expand the Company's sales and marketing efforts
   (see Description of Property section below), to build out a
   state-of-the-art research and development laboratory (see
   Description of Property section below), to provide
   manufacturing capacity, to acquire distribution and
   complimentary products and to provide sufficient capital to
   bring First Scientific to a positive working capital position.
   The Company maintains its own internet web page, which can be
   found at 'www.firstscientific.com.'

<PAGE>
                                   -8-

   ITEM 2.  DESCRIPTION OF PROPERTY

           The Company currently occupies space at two locations.
    The Company's executive offices are located at 1877 West 2800
   South, Suite 200, Ogden, Utah 84401.  This location is
   presently comprised of 2,012 square feet of office space on
   the second level of a three-year-old office warehouse building
   in the Ogden Industrial Park.  Executive, administration,
   finance, operations and sales/marketing are housed in this
   facility.  The second facility is located at 2711 Midland
   Drive, Ogden, Utah 84401 (approximately one-half mile from the
   executive offices).  As of December 31, 1999 research and
   development, stability testing, warehousing and records
   storage are performed at this FDA compliant facility, which
   consists of 2,200 square feet in a small office warehouse
   complex.  The Company also has a written agreement for the use
   of laboratory and testing facilities at Weber State University
   in Ogden, Utah  and is in the process of leasing its own
   dedicated space at the university for expanded operations.
   During the first quarter of 2000, the Company entered into a
   lease agreement for an additional 3,000 square feet located
   adjacent (same floor to the west) to its executive offices
   which will be used for sales, marketing, communications and an
   employee lunch/break area and 2,000 square feet immediately
   south (same floor to the south) of its executive offices that
   will be occupied by a state-of-the-art research, product
   development and testing lab.

   ITEM 3.  LEGAL PROCEEDINGS

           On January 5, 1999 the Company was advised of a claim
   against it allegedly arising out of an Agreement in Principle
   made in 1991 (the "1991 Agreement") by Linco Industries, Inc.
   ("Linco", now known as First Scientific Corporation, is a
   wholly owned subsidiary of the Company, first Scientific,
   Inc.). The 1991 Agreement purported to promise shares of Linco
   common stock to an individual (the "Claimant") if certain
   conditions were met by the Claimant in representing Linco to
   potential customers. The Company has not made any settlement
   offer in an attempt to resolve the matter. Management
   maintains that the 1991 Agreement is no longer valid because
   the conditions in the 1991 Agreement were not met in a
   reasonable time and because of the failure of other material
   terms.

           Additionally, an indemnification agreement in favor of
   the Company by the former founding Linco shareholders requires
   the latter to satisfy any obligations which Linco may have
   incurred prior to the reorganization. Consequently, the
   Company would require that any eventual settlement or award
   resulting from the 1991 Agreement be satisfied entirely by the
   founding shareholders of Linco. The Linco founders have
   assured the Company that they will defend this matter in the
   event any legal proceedings should be filed against the
   Company. In response to the Claimant's demands, the Linco
   founders filed an action in the District Court of Weber
   County, State of Utah (Civil Case No. 99090484) including
   First Scientific, Inc., First Scientific Corporation and Linco
   Industries, Inc., as co-Plaintiffs, for declaratory judgement
   that the Claimant (the Defendant in said action) has no
   entitlement against any of the Plaintiffs, including the
   Company. The Claimant was served and responded by filing with
   the court for a change of venue from Weber County, Utah to
   Utah County, Utah, which the court granted.

           On December 3, 1999, the Claimant answered the
   complaint and filed a counterclaim against the Company and
   other plaintiffs claiming he had "fully performed" under the
   199 Agreement. The declaratory judgment action is now in the
   discovery phase, and has not yet been adjudicated. To the
   knowledge of the Company, as of December 31, 1999, no
   subsequent legal or court action has been taken by the Claimant.

<PAGE>
                                   -9-

                                 PART II

   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
   MATTERS

   Securities of the Company

           The reorganization of the Company completed in 1998
   left the Company with 20,169,770 shares of common stock
   outstanding as of  December 31, 1998, and 20,219,770 common
   shares outstanding at December 31, 1999.  The Company also has
   1,000,000  preferred shares authorized with no shares issued.
   There is currently no public market for any of the Company's
   common shares.

           There are approximately 288 shareholders of record of
   the Company's common stock as of December 31, 1999.

   Sales of Unregistered Securities

           On April 30, 1999 the Company agreed to issue 10,000
   shares of common stock to Weldon Phillips for marketing
   services during 1997 and 1998. The services were valued at
   $10,000 based upon the fair value of the common stock in April
   1999. The fair value of the common stock was established by
   management based upon an evaluation of the perceived
   performance of the Company to date. The shares were issued in
   reliance upon Section 4(2) of the Securities Act of 1933, as
   amended (the "Act") and Rule 506 of Regulation D promulgated
   thereunder.  The Company believes that Mr. Phillips is an
   accredited investor.

           On August 7, 1999, the Company agreed to issue 40,000
   shares of common stock to Kinara Graphics, Inc. for their
   creative services in developing and presenting promotional and
   other materials regarding First Scientific and its products.
   The services were valued at $70,000, or $1.75 per share, based
   upon an evaluation by management of the perceived fair value
   of the Company's common stock on the date of the agreement.
   The shares were issued in reliance upon Section 4(2) of the
   Act and Rule 506 of Regulation D promulgated thereunder. Based
   on information obtained by the Company in connection with its
   business relationship with  Kinara Graphics, Inc., management
   believes, that  Kinara Graphics, Inc., through its
   representatives, has such knowledge on business and financial
   matters as to be able to evaluate the merits and risks of an
   investment in First Scientific.


   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
   CONDITION AND                     RESULTS OF OPERATIONS

   Selected Financial Data

           The following selected financial data of the Company
   as of December 31,1999 and 1998 and  cumulative from April 30,
   1990 (date of inception) through December 31, 1999, are
   derived from, and are qualified by reference to, the financial
   statements of the Company, included elsewhere in this Form
   10-KSB.  The information set forth below should be read in
   conjunction with Management's Discussion and Analysis.





   Revenue                            $   553,631   $    83,149   $   789,627

   Net Loss                            (1,468,317)   (4,280,512)   (6,231,062)

<PAGE>
                                   -10-

   Basic and Diluted Loss per share         (0.07)        (0.33)        (0.55)

   Weighted Average Shares
      Outstanding                      20,182,373    12,800,937     1,332,280

   Cash Dividends Declared per
      Common Share                              -             -             -

   Summary Consolidated Balance
      Sheet Data

   Working Capital                    $   297,039   $ 1,348,846

   Total Assets                           696,869     1,788,818

   Stockholder's Equity                   500,220     1,595,208

   Accumulated Deficit                  6,231,062     4,762,745




   Management's Discussion and Analysis and Plan of Operation

   General

                This discussion should be read in conjunction
   with the annual financial statements included elsewhere in
   this document ("the accompanying financial statements").
   Whenever in this discussion the term "First Scientific" or
   "Company" is used, it should be understood to refer to First
   Scientific, Inc. and its wholly owned subsidiary on a
   consolidated basis, except where the context clearly indicates
   otherwise.

                The following Management's Discussion and
   Analysis of Financial Condition and Plan of Operation contains
   forward-looking statements which involve risks and
   uncertainty. Our actual results could differ materially from
   those anticipated in these forward-looking statements as a
   result of certain factors discussed in this section.  The
   Company is a development stage company engaged in the
   research, development and commercialization of unique
   formulations for sale in the professional health care, food
   handling, hospitality, government, education, e-commerce,
   retail, network marketing and other niche markets. Linco
   Industries, Inc.,("Linco") was reorganized into First
   Scientific, Inc. during September 1998. The first of the
   Company's patent-pending formulations is a moisturizing
   antimicrobial formula that combines skin-softening emollients
   and botanicals proven to soothe and condition while
   eliminating 99.99% of pathogens. This formulation can be
   packaged as an antimicrobial handwash, antimicrobial lotion,
   antibacterial spray and antibacterial towelettes. The second
   formulation is a skin protection formula that brings together
   Dimethicone with skin-conditioning emollients and botanical
   oils to create a solution for the treatment and prevention of
   rashes. This product, in towelette form, is used for the
   treatment and prevention of skin rashes caused by infant and
   adult incontinence.  The Company currently supplies the skin
   protection formula to a third-party manufacturer, which
   produces a waterless, patient-bathing product for ConvaTec, a
   division of Bristol-Myers Squibb Company.

   Plan of Operation

                First Scientific is a development stage company
   which, since inception, has incurred losses from operations.
   As of December 31, 1999, the cumulative net losses of First
   Scientific since inception total $6,231,062 of which
   $3,766,440 is attributable to a non-recurring charge for
   acquired research and development, as described in Note 3 to
   the accompanying financial statements. First Scientific is
   engaged primarily in the development and marketing of chemical
   formulations that management feels will have worldwide sales
   opportunities.  As of December 31, 1999, First Scientific has
   had minimal sales from its products and testing services, but
   is in the process expanding the marketing of its products
   through private label relationships with companies that are
   major distributors in the medical, healthcare,

   <PAGE>
                                   -11-

   over-the-counter, and multi-level arenas, both domestically
   and internationally.  Marketing materials have been produced
   to assist with a  formal product launch of  its antimicrobial
   formulation that took place during the third quarter of 1999.
   Development of First Scientific's own brands will be handled
   mostly through regional distributors, especially in medical
   markets, and will be pursued on a case-by-case basis as
   profitable opportunities are identified and evaluated.  The
   Company anticipates meeting its contractual obligations with
   ConvaTec which should produce increasing revenue in the
   future.  Subsequent to year end 1999, in January of 2000,
   First Scientific signed a private label distribution agreement
   with PureSoft Solutions, LLC, a leading New Hampshire-based
   manufacturer and supplier of hard surface disinfectants and
   skin care products.  PureSoft plans to market the Company's
   antimicrobial handwash and other products under the PureSoft
   product label to specialty niche markets already serviced by
   PureSoft and to long-term care, professional health care and
   other professional markets.

                ConvaTec has engaged First Scientific, on a fee
   for service basis, to perform testing procedures that fulfill
   FDA compliance requirements relating to product sales to this
   customer.  ConvaTec has reported favorable results regarding
   First Scientific's testing procedures and operating protocols.
     The prospects for ongoing testing work with this customer
   appears likely. This relationship has allowed First Scientific
   to gain experience and to develop standard operating
   procedures that satisfy, not only this customer's needs, but
   that should withstand the most critical evaluations and
   requirements of future customers, and therefore, may provide
   new revenue opportunities.

                First Scientific currently outsources
   manufacturing of its products. The Company has developed
   relationships with three manufacturers, and is in the process
   of qualifying another, who have U.S. Food and Drug
   Administration ("F.D.A.") compliant facilities and experience
   in manufacturing in accordance with F.D.A. requirements and
   Good Manufacturing Practices ("GMP") standards. These
   companies are generally in the business of manufacturing for
   various customers who require F.D.A. compliant facilities for
   their products.  First Scientific is able to produce a
   concentrate of its antimicrobial formulation at its own
   facility under F.D.A. protocols; however, in most cases, the
   Company's outsourced manufacturers will produce the Company's
   formulations and package products according  to pre-defined
   specifications.  First Scientific filed for patent protection
   with the U. S. Patent Office for its antimicrobial formulation
   during the third quarter of 1999.  First Scientific uses this
   same outsourced manufacturing  procedure in the production of
   its dimethicone-based rash prevention and treatment
   formulation and product because currently First Scientific
   cannot economically mix concentrate itself for this product.
   First Scientific has also filed a patent for this formulation
   with the U. S. Patent Office. Strict confidentiality
   agreements are in place with the Company's outsourced
   manufacturers to further protect its product formulations.

                For the foreseeable future, the Company plans to
   outsource its manufacturing and has discontinued the pursuit
   of its own production facility.  It is anticipated that new
   and existing outsourced manufacturing relationships will
   become more cost effective as increased business is run
   through these facilities.

                The cash requirements of First Scientific through
   the end of first quarter 2000 will vary based upon a number of
   factors including, but not limited to, continuing research and
   development levels, increased market development, facilities
   enhancement and/or acquisitions, additional personnel, travel
   and other expenses related to projected growth. With the new
   business First Scientific is now actively pursuing, management
   believes existing cash, cash equivalents and cash generated
   from anticipated sales will be sufficient to meet obligations
   over the next 30-60 days.  First Scientific will need
   additional equity funding  to meet its working capital and
   expansion needs until projected positive cash flow is reached
   in the third quarter of 2000.  In order to meet these
   projected cash needs, a Regulation D  506 Private Placement
   Memorandum was initiated by the Company in the fourth quarter
   on 1999.  As of the date of this filing, $1,475,000 cash has
   been received under the private placement, and an additional
   $2,000,000 has been subscribed for. Even though management
   believes that funding sufficient to meet its operating needs
   will be raised in a timely manner, there is no assurance that
   all of such funding will be raised.

<PAGE>
                                   -12-

   Employees and Consultants

                As of December 31, 1999, the Company had 11
   full-time employees in management, administrative, and
   technical positions.  This number does not include contract
   distributors who are independent contractors rather than First
   Scientific employees.  The Company also utilize several
   consultants and advisors.  As First Scientific continues to
   grow, additional personnel will need to be added to enable the
   Company to meet its projected growth. Subsequent to year end
   1999, the Company has hired a vice-president of logistics,
   three sales managers to handle specific markets, a chemist and
   a part-time database specialist.  Management anticipates
   hiring additional sales /marketing and lab personnel, one
   finance specialist and an executive assistant  during year
   2000. There can be no assurance that First Scientific will be
   successful in recruiting or retaining key personnel.   None of
   our employees is a member of a labor union and we have never
   experienced any business interruption as a result of any labor
   disputes.

   Management's Discussion and Analysis of Financial Condition
   and Results of Operations

   Financial Position

                First Scientific had $207,934 in cash as of
   December 31, 1999. This represents a decrease of  $1,078,365
   from December 31, 1998. Working capital, as of December
   31,1999, decreased to $297,039 compared to working capital of
   $1,348,846 at December 31, 1998.
   Results of Operations

   Results of Operations

                During the 12 months ended December 31, 1999, the
   Company had total operating revenues of $553,631, comprised
   primarily of product testing, raw materials sales and a
   licensing fee from a major customer, compared with total
   operating revenues of $83,149 for 1998, comprised  primarily
   of product sales. Cumulative operating revenue from inception
   (April 30, 1990) through December 31, 1999 totaled $789,627.
   Gross profits for 1999 and 1998 were $405,408 and $28,152
   respectively.  As of December 31, 1999, the cumulative net
   losses of First Scientific since inception total $6,231,062 of
   which $3,766,440 is attributable to a non-recurring charge for
   acquired research and development.

                Prior to December 1998, Company revenues were
   generated from sporadic sales of a Linseed oil based soap
   product and a rash prevention product created for a
   distributor who sells this product under private labels to an
   over-the-counter customer. First Scientific decided to
   discontinue the sale of these products and to concentrate on
   marketing of its antimicrobial and rash treatment/prevention
   products.

                On August 12, 1999, First Scientific signed a
   supply agreement with ConvaTec, a division of Bristol-Myers
   Squibb Company. The agreement provides for First Scientific to
   provide raw materials to a third party manufacturer who will
   deliver the finished product to ConvaTec. The contract also
   provides for a license fee to be paid to First Scientific and
   for First Scientific to provide testing services for
   contracted on a fee-for-service basis. Revenues under this
   contract were $305,358 for the year ended December 31, 1999.

                During the third and forth quarters of 1999, the
   Company began initial negotiations, including the exchange of
   non-disclosure agreements, with several professional health
   care market share leaders concerning its professional health
   care handwash.  These negotiation are continuing as of the
   filing of this document and are expected to finalize with
   signed contracts during the second quarter of 2000.

                First Scientific's regional distribution
   agreement with WelMed, Inc., produced minimal revenues during
   the year ended December 31, 1999.  Initial warehousing
   inventory shipped to WelMed during the fourth quarter of 1999.
   This agreement covers several western states. WelMed has a
   non-exclusive distribution rights to First Scientific's
   products in these states and exclusive rights to First
   Scientific's Fresh Cleanse(R) branded products to hospitals,
   nursing homes, medical clinics and doctors offices in this
   territory.

<PAGE>
                                   -13-

            Should anticipated sales from the Company's existing
   agreement with ConvaTec or from other negotiations now taking
   place or other potential sales opportunities which First
   Scientific anticipates materializing, not come to fruition,
   the ability of First Scientific to sustain operations beyond
   the first quarter of 2000 wold be seriously impacted.  To
   mitigate such circumstances and to provide working capital to
   hire needed personnel, to lease additional space and to outfit
   a  research/testing lab, the Company has received cash
   proceeds of $1,475,000 and subscriptions for an additional
   $2,000,000 under a private placement offering.

                Private label agreements, such as those discussed
   above, create certain risks for First Scientific.  These risks
   include (i) reliance for sales of products on other parties,
   and therefore reliance on the other parties' marketing
   ability, marketing plans and credit-worthiness; (ii) if First
   Scientific's products are marketed under other parties'
   labels, goodwill associated with use of the products generally
   inures to the benefit of the other parties rather than First
   Scientific; (iii) First Scientific may have only limited
   protection from changes in manufacturing costs and raw
   material costs; and (iv) if First Scientific continues to rely
   on other parties for all or substantially all of its sales,
   First Scientific may be limited in its ability to negotiate
   with such other parties upon eventual renewals of their
   agreements. It is the belief of management that these risks
   are mitigated by initial market demands, the apparent
   uniqueness of the Company's formulations, large existing and
   expanding markets for its products and the caliber of
   customers with whom First Scientific is currently negotiating.
    However, First Scientific recognizes that, in the short run,
   it will be dependent on a few large customers where the bulk
   of its sales are envisioned to be generated.  Until a broader
   base of customers has been established, the loss of one such
   customer could have a serious material adverse impact on the
   operating viability of First Scientific.

                First Scientific uses as many as 20 specific
   chemical and botanical ingredients to formulate each of its
   products. In most cases, supplies of ingredients for First
   Scientific's formulations continue to remain readily available
   from multiple sources.  First Scientific continues to maintain
   very good relationships with its suppliers and does not
   anticipate problems that would cause significant interruption,
   delay or availability of any ingredients.

                General and administrative expenses were
   $1,666,555 for the twelve months ended December 31, 1999,
   compared with $550,449 for the comparable period from the
   prior year. Cumulative general and administrative expenses
   from inception through December 31, 1999 were $2,503,887. The
   increase in expenditures between the 1999 and 1998 periods was
   due to the continued transition of First Scientific from a
   one-man product development entity, with minimal sales, to an
   increased operational staff capable of administrating
   anticipated growth. Executive office space into which First
   Scientific moved during 1998  is being augmented as the
   finance, sales/marketing and research and development
   functions increase to match anticipated growth.

                Research and development expenses were $94,982
   for the 12 months ended December 31, 1999 compared to $47,368
   after acquired purchased technology in the amount of
   $3,766,440 is eliminated from the prior year ended December
   31, 1998.  The increase in expenditures between the 1999 and
   net amounts for the 1998 periods resulted from the continued
   refinement of First Scientific's formulations and the
   development of new product variations to meet customer
   requests. Management anticipates an increase in research and
   development expenses for future periods, as First Scientific
   expands its research capabilities and product offerings.

   Liquidity and Capital Resources

                Prior to the Merger on September 15, 1998, the
   Company had financed its operations principally through
   founder loans, small private placements of equity securities
   and sporadic product sales.  On September 15, 1998 an
   additional private placement of approximately  $2,000,000 was
   received by the company in cash and marketable equity
   securities. During the year ended December 31, 1999, sales,
   testing fees and a licensing fee constituted the source of the
   majority of funds from the operations of First Scientific. The
   Company used net cash in operating activities of  $996,074
   during the twelve months ended December 31, 1999 and
   $1,620,629 since inception, while $284,987 was used in 1998.
   Investing activities used $75,154 net cash during the twelve
   months ended December 31, 1999, primarily for the purchase of
   equipment, while $215,907 was provided in 1998, primarily from
   the sale of marketable securities, and a net of $140,032
   cumulatively was provided since inception. The mentioned

<PAGE>
                                   -14-

   securities were received in exchange for common stock.  A
   portion of these securities were sold immediately upon their
   receipt while the Company retained as an investment marketable
   securities valued at $94,811 at December 31, 1999. As of
   December 31, 1999, the First Scientific's liabilities totaled
   $196,649 compared to $193,610 at December 31,1998. The Company
   had working capital as of December 31, 1999 of $297,039
   compared to $1,348,846 on December 31,1998.

                    The Company's working capital and other
       capital requirements for the foreseeable future will
       vary based upon a number of factors, including
       expenditures related to continuing research and
       development, FDA testing requirements, market
       development, facilities enhancement, control of
       manufacturing, additional personnel, travel and other
       costs related to projected growth. Management is
       presently projecting average monthly cash requirements
       of approximately $371,000 for the next 12 months,
       however, since the Company lacks experience at its
       projected level of activity, this number could change
       substantially.  Management further projects that cash
       on hand, together with funds generated from sales the
       Company is now in the process of negotiating, together
       with the proceeds from the aforementioned private
       placement offering, will be sufficient to meet
       projected operating requirements during year 2000.
       Should sales not materialize as anticipated, the
       Company would need revenue from sales to customers that
       have not yet been identified to meet its projected
       operating needs over the next twelve months.  There is
       no assurance that any sales, presently or yet to be
       identified, will come to fruition or that any debt or
       equity funding will be available to the Company, or if
       available, at terms favorable to the Company.

       ITEM 7.  FINANCIAL STATEMENTS

                    The financial statements are set forth
       immediately following the signature page.


                                   PART III

       ITEM 9.  MANAGEMENT AND CERTAIN SECURITY HOLDERS

       Directors and Executive Officers

                    The table below sets forth the name, age
       and positions or offices of each director and executive
       officer of First Scientific, Inc. and its wholly owned
       subsidiary, First Scientific Corporation.  The Board of
       Directors and officers of First Scientific, Inc. also
       serve as the Board of Directors and Officers of First
       Scientific Corporation.

            Name                   Age              Position
       ----------------            ---      ----------------------

       Randall L. Hales             32     President, CEO,
       Director
       Gordon M. Davis              55     CFO, VP
       Administration, Secretary
       Reed J. Tanner               45     VP Operations
       Jerral R. Pulley             65     Chairman, Board of Directors
       Doug R. Warren               66     Director, Vice Chairman of the Board
       Edward B. Walker Ph.D.       46     Director
       Peter J. Sundwall Jr., M.D.  3      Director
       Darrell J. Saunders, D.D.S.  5      Director
       Gary L. Crittenden           46     Director
       Dan C. Jorgensen             61     Director

<PAGE>
                                   -15-


       The directors are elected for one-year terms, which
       expire at the next annual meeting of shareholders.
       Executive Officers are elected annually by the Board of
       Directors to hold office until the first meeting of the
       Board following the next annual meeting of shareholders
       and until their successors have been elected and
       qualified.

       Randall L. Hales - President, CEO, Director
       -------------------------------------------
               Randall L. Hales received his bachelor's degree
       from the school of engineering at Brigham Young
       University.  He began his career working at David
       Weekley homes in 1990, and before leaving in 1995 was
       general manager of operations.  Mr. Hales joined
       Daltile International in March of 1995 and served as
       managing director of its $300 million glazed wall tile
       division in Dallas, Texas.  In 1999, Mr. Hales began
       employment with First Scientific as VP of Sales and
       Marketing and became CEO and president in November of
       1999. Throughout his career, he has been responsible
       for company operations, manufacturing, sales, marketing
       and general management.

       Gordon M. Davis - CFO, VP Administration, Corporate
       Secretary
       ---------------------------------------------------
               Gordon M. Davis obtained a Bachelor of Science
       degree in business management from the University of
       Utah and has spent his career in banking, finance,
       management, and consulting. Over the past five years,
       Mr. Davis was president of Satellite Image Systems,
       Salt Lake City, Utah in 1992 and 1993 and President of
       EE Multimedia, Inc., Salt Lake City, Utah in 1995.
       During 1996 Mr. Davis was part owner of a solarium
       company in Salt Lake City, Utah. During 1997 and 1998,
       he was a consultant to a real estate development
       project in South America and served as a management and
       financial consultant to other early stage development
       ventures, including First Scientific, which hired him
       as a full-time employee in August, 1998.

       Reed J. Tanner - VP Operations
       ------------------------------
               Reed J. Tanner was formerly a career U.S. Air
       Force non-commissioned officer. He served as supervisor
       of U.S. Air Force Ammunition Control Point, responsible
       for inventory, location, and logistical support of Air
       Force non-nuclear munitions stockpile. Mr. Tanner was
       employed from June 1996 to September 1996 by BDM
       Corporation, identifying ozone-depleting chemicals in
       Air Force maintenance manuals as specified by EPA. He
       also has experience as a subject matter expert for
       technical writing of U.S. Air Force munitions technical
       manuals for Sverdrup Technology, ASG where he was
       employed during 1997 and 1998. He joined First
       Scientific in May1998.

       Jerral R. Pulley - Chairman, Board of Directors
       -----------------------------------------------
               Jerral R. Pulley is an experienced executive
       skilled at providing strategic direction, innovative
       marketing solutions and creating new streams of
       business revenue. Since 1997, Mr. Pulley has been a
       partner in the consulting firm, The Client Synergy
       Group, and immediately prior to that while in Boston,
       he served as senior vice president and general manager
       of S.C. Publishing, and as CEO of Polymerics, a leading
       art/craft company with $90 million in revenue. Mr.
       Pulley's background includes serving in senior
       executive roles at several prominent corporations
       including: Binnery & Smith (Crayola), as VP Corporate
       Development; Ryder, as senior VP Strategic
       Planning/Corporate Development; Bordon, Group VP
       (Consumer Products Division); Life Savers, EVP;
       Pepsico, VP Marketing Planning. Mr. Pulley also spent
       12 years at Procter & Gamble where his last assignment
       was starting up a Toilet Goods Division in the United
       Kingdom.  Mr. Pulley has served on several boards of
       directors and presently is a director of Sundog
       Technologies, Inc., a software provider in Salt Lake
       City; UB Networks, a high-speed access provider in
       Newport Beach, Calif.; and also served as vice chairman
       of the Henry's Fork Foundation, a non-profit
       organization concerned with proper watershed
       stewardship. Mr. Pulley holds a bachelor's degree from
       the University of Utah and an MBA from UCLA.

       Douglas R. Warren - Director, Vice Chairman of the Board
       --------------------------------------------------------
               Douglas R. Warren, was the president of First
       Scientific since its acquisition of Linco Industries,
       Inc in 1998. He served as president of Linco since its
       founding in 1990 and directed all aspects of operations
       including manufacturing, distribution and sales. Prior
       to the acquisition of Linco by the Company, Mr. Warren
       developed several important business relationships with
       suppliers and potential customers.  Mr. Warren was also
       the founder and owner of Warren's Restaurants, Ogden,
       Utah and a principal in the development of the Park
       Meadows golf course and condominium development, Park
       City, Utah.

<PAGE>
                                   -16-

       Dr. Edward B. Walker - Director
       -------------------------------
               Dr. Edward B. Walker graduated from Weber State
       University and obtained his doctorate degree in
       chemistry from Texas Tech University. After completing
       a post-doctoral fellowship in the Stanford University
       Department of Biochemical Pharmacology, Dr. Walker
       returned to Weber State University in 1981, where he is
       currently a professor of chemistry and director of the
       Utah Center of Excellence for Chemical Technology.  Dr.
       Walker's basic research interests over the years have
       focused on the biochemistry of natural products and
       their effects on living systems. In addition, he spends
       a significant portion of his time in applied research,
       helping Utah inventors and corporations develop new and
       enhanced products, refine their quality assurance
       programs, and improve manufacturing methods. Dr. Walker
       has been issued various U.S. and foreign patents for
       his inventions, ranging from novel drugs derived from
       plants to flow cells used in spectrophotometers. Dr.
       Walker has received the Utah Governor's Medal for
       Science and Technology, Weber State University's Master
       Teacher Award, and is a Cortez Professor in the Honors
       Program at WSU. He has authored many scientific
       publications and two university-level chemistry
       textbooks. Dr. Walker is also director of research and
       development for First Scientific.

       Dr. Peter V. Sundwall, Jr. - Director
       -------------------------------------
               Dr. Peter V. Sundwall, Jr., graduated cum laude
       from the University of Utah with a degree in
       Psychology. He went on to earn a master's degree in
       Educational Psychology from the University of Utah. Dr.
       Sundwall received his Doctor of Medicine degree from
       the University of Utah Medical School where he
       graduated with honors in Family Medicine and received
       the Golden Cane award for excellence in patient care.
       Dr. Sundwal1 completed his Family Practice Residency at
       St. Peters Hospital in O1ympia, Washington. In June of
       1997, Dr. Sundwall started practicing family medicine
       at Intermountain Health Care in Highland, Utah. He is
       currently an associate physician with the American Fork
       Clinic, American Fork, Utah.


       Dr. Darrell J. Saunders - Director
       ----------------------------------
               Dr. Darrell  J. Saunders graduated from the
       University of Nebraska with a D.D.S. degree in 1961.
       Dr. Saunders has practiced dentistry in Ogden, Utah
       since the 1960s. He served on the Ogden City Council
       for 18 years, serving one term as assistant mayor and
       another as chairman of the City Council. Dr. Saunders
       also was on the Board of Directors for the Utah League
       of Cities and Towns and was a member and Chairman of
       the Board for the Central Weber Sewer District. He was
       recently appointed by the mayor of Ogden to serve on
       the Sesquicentennial Advisory Committee to help plan
       the activities for Ogden's sesquicentennial celebration
       in 2001.

       Gary L. Crittenden - Director
       -----------------------------
               Gary L. Crittenden joined Monsanto Chemical
       Company in 1999 as senior vice president and CFO.
       Previously, Mr. Crittenden was executive vice president
       and chief financial officer of Sears Roebuck and
       Company from 1996 through 1998.  Prior to joining
       Sears, he was senior vice president and chief financial
       officer at Melville Corporation, Rye, New York from
       1994.  Mr. Crittenden has also served as a consultant
       to Bain & Company in Boston, where he also held senior
       management and marketing positions. Mr. Crittenden
       serves on the board of directors for Ryerson-Tull and
       Wilson's, The Leather  Expert.  Mr. Crittenden earned a
       bachelor's degree from Brigham Young University and an
       MBA degree from Harvard University.

       Dan C. Jorgensen - Director
       ---------------------------
               Former Citicorp senior executive Dan C.
       Jorgensen has been president of Jorgensen and
       Associates since 1994, which is involved with energy,
       financial services and investment projects in
       developing countries and Russia.  In addition to
       founding Citicorp Insurance USA and Citicorp Insurance
       Bermuda, Mr. Jorgensen has also served as senior vice
       president Special Finances Division at AIG.  Mr.
       Jorgensen serves on several boards including: Institute
       for Professional Medical Education, Calif.; Conseco
       Bank, Utah; Utah Symphony, Utah; Snow College
       Foundation, Utah; and Foundation Jean Monnet pour l'
       Europe, Lausanne, Switzerland.  Mr. Jorgensen holds a
       bachelor's degree from Brigham Young University and an
       MBA degree from Harvard University.

<PAGE>
                                   -17-


       ITEM 10.  EXECUTIVE COMPENSATION

               Summary Compensation Table. The following table
       sets forth, for the three fiscal years ended December
       31, 1999, the compensation paid to the Company's Chief
       Executive Officer and all other officers and directors
       (collectively, the "Named Executive Officers") at
       December 31, 1999 whose salary and bonus for all
       services in all capacities exceed $100,000 for the
       fiscal year ended December 31, 1999.

                                                                   Long-term
                                       Annual Compensation        Compensation
                                   ---------------------------    ------------
                                                         Other
                                                        Annual     Securities
      Name and                                         Compensa-   Underlying
 Principal Position         Year    Salary     Bonus     tion       Options
---------------------     -------  --------   -------  ---------   ----------
Douglas R. Warren           1999   $ 81,327   $    -   $  10,000      100,000
 President, CEO (1)         1998     29,298        -           -      120,000
                            1997          -        -           -            -

Randall L. Hales            1999   $ 58,650   $    -   $       -      500,000
 President, CEO             1998          -        -           -            -
                            1997          -        -           -            -


Jerral R. Pulley            1999   $      -    $   -   $  95,000            -
 Chairman of the            1998          -        -      50,000    1,000,000
 Board                      1997          -        -           -            -

           (1) Mr. Warren resigned as President, CEO of First
       Scientific on November 17, 1999

       Options Grants in the Last Fiscal Year

       The following table sets forth the options granted to
       named executive officers in the last fiscal year.

<TABLE>
<CAPTION>


       Position            Granted     Granted    Year      Price          Date
 ---------------------   -----------  ---------- --------  -------    ---------------
<S>                     <C>          <C>        <C>       <C>        <C>

 Douglas R. Warren         8/25/99      100,000      11%     $ 0.7    September 2004-
                                                                      September 2006

 Randall L. Hales         08/15/99      250,000      28%     $0.75    May  2005-
                                                                      May  2007
                          11/22/99      250,000      28%     $1.25    November 2004-
                                                                      November 2006

</TABLE>

           (1)  Mr. Warren resigned as President, CEO of First Scientific on
                November 17, 1999


 Aggregated Option Exercises in Last Fiscal Year and Year End Option Values

<PAGE>
                                   -18-

               The following table sets forth information
       concerning the exercise of options to acquire shares of
       the Company's Common Stock by the Named Executive
       Officers during the fiscal year ended December 31,
       1999, as well as the aggregate number and value of
       unexercised options held by the Named Executive
       Officers on December 31, 1999

<TABLE>
<CAPTION>

                                             Underlying unexercised        Value of unexercised
                                                   Options at            Inn-the-money options at
                       Acquired On  Value     December 31, 1999 (#)         December 31, 1999 ($)
                         Exercise  Realized  -------------------------   ---------------------------
         Name               (#)      ($)     Exercisable Unexercisable   Exercisable   Unexercisable
 ---------------------   --------  ------    ----------- -------------   -----------   -------------
<S>                     <C>       <C>      <C>         <C>             <C>           <C>
 Douglas R. Warren (1)     None     N/A       148,000      72,000         148,000          72,000
 Randall L. Hales          None     N/A       100,000     400,000          50,000         325,000
 Jerral R. Pulley          None     N/A       400,000     600,000         400,000         600,000

</TABLE>

(1)  Mr. Warren resigned as President, CEO of First Scientific on
     November 17, 1999

       ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
       OWNERS AND MANAGEMENT

               The following table lists the number of shares
       of Common Stock beneficially owned as of December 31,
       1999, by each person known by the Company to be the
       beneficial owner of more the five percent (5%) of the
       Common Stock, by each director of the Company, by the
       Chief Executive Officer, and by all officers and
       directors of the Company as a group.  Unless noted
       otherwise, each person named has sole voting and
       investment power with respect to the shares indicated.

                                                    Percentage
                                      Number of       of Class
       Names of Beneficial Owners        Shares    Outstanding
       --------------------------  ------------    -----------
       Edward B. Walker               5,434,170          25.5%

       Darrell J. Saunders            2,191,450          10.3%

       Douglas R. Warren (1)          2,086,118           9.8%

       Charles L. Crittenden          1,991,452           9.4%

       Jerry Pulley (2)                 500,000           2.4%

       Peter Sundwall (3)                50,000            .2%

       Randall L. Hales (4)             100,000            .5%

       Dan C Jorgensen (5)               14,000            .1%

       Gary Crittenden (6)               14,000            .1%

       All officers and directors
         as a group (11 persons) (7) 10,617,738          49.9%

               The percentages set forth above have been
       computed based on 21,273,770 shares, which is the
       number of shares of the Common Stock outstanding and
       exercisable options held by officers and directors
       outstanding as of December 31, 1999.

       (1)   Includes 148,000 shares issuable upon presently
             exercisable options


(PAGE)
                                   -19-

       (2)    Includes 500,000 share issuable upon presently
              exercisable options and options which become
              exercisable in the next 60 days.

       (3)    Includes 50,000 shares issuable upon presently
              exercisable options.

       (4)   Includes 100,000 shares issuable upon presently
             exercisable options.

       (5)   Includes 14,000 shares issuable upon presently
             exercisable options.

       (6)   Includes 14,000 shares issuable upon presently
             exercisable options.

       (7)   Includes 1,054,000 shares issuable upon presently
             exercisable options and options which become
             exercisable in the next 60 days.


       ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

               One-year renewable agreements were entered into
       with two directors of the Company, one for $10,000 per
       month, effective August 1, 1998 for marketing and sales
       consulting, and one for $7,000 per month, effective
       October 1, 1998, for consulting on product research,
       development and testing.  The $10,000 agreement has
       been reduced to $7,500 per month  commencing August 1,
       2000  and the $7,000 agreement has been increased to
       $8,000 per month beginning October 1, 1999.

               During November 1999, the company advanced
       $7,000 cash to an officer and shareholder in exchange
       for a note with an interest rate of 9.5% per annum. the
       loan is to be reduced from 33% of any bonuses paid to
       the officer.


                            PART IV

        EXHIBITS AND REPORTS

       ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

               (a)Exhibits

               The following Exhibits are filed herewith
       pursuant to Rule 601 of Regulation S-B or are
       incorporated by reference to previous filings.

       Exhibit #         Description

       2.1     Agreement and Plan of Reorganization,  dated
               August 10, 1998, between the Registrant, Linco,
               Linco Acquisition Corp. and Edward Walker*
       3.1     Articles of Incorporation **
       3.2     Bylaws**
       3.3     Amendment to articles of Incorporation changing
               name to First Scientific, Inc.
               and effecting a forward stock split.*
       10.1    Non-qualified Stock Option Agreement with
               Jerral R. Pulley***
       10.2    Non-qualified Stock Option Agreement with Peter
               Sundwall, M.D.***
       10.3    1998 Stock Incentive Plan****
       10.4    Agreement with Weldon Phillips*****
       10.5    Employment Agreement with Randy Hales*****
       10.6    Consulting Agreement with Jerral R. Pulley*****


<PAGE>
                                   -20-

       10.7    Consulting Agreement with Edward Walker*****
       10.8    Exclusive License and Supply Agreement with
               Convatec
               (Confidential Treatment Requested for Certain
               Portions)******
       27      Financial data schedule*******

       ______________________
       *       Incorporated by reference to the same-numbered exhibit
               to the form 8-K filed October 2, 1998 by the Company
               with the Securities and Exchange Commission.
       **      Incorporated by reference to the same-numbered
               exhibit to the Company's Registration Statement on Form
               10-SB, file No. 0-24378.
       ***     Incorporated by reference to the same-numbered
               exhibit to the Form 10-QSB filed November 16,1998 with
               the Securities and Exchange Commission.
       ****    Incorporated by reference from Quaarter Report on Form
               10-QSB, as filed on June 15, 1999.
       *****   Incorporated by reference to the same numbered
               exhibit to the form 10-QSB filed November 16, 1999 with
               the Securities and Exchange Commission.
       ******  Incorporated by reference from Amended Quarter
               Report on Form 10-QSB/A as filed on March 8, 2000.
       ******* Filed herewith


               (b)  Reports on Form 8-K

               A report on Form 8-K was filed during the reporting
            quarter on December 6, 1999.

<PAGE>
                                   -21-


                           SIGNATURES

               Pursuant to the requirements of the Securities
       and Exchange Act of 1934, the Registrant has duly
       caused this report to be signed on its behalf by the
       undersigned thereunto duly authorized.

       REGISTRANT

       FIRST SCIENTIFIC, INC.
       Registrant



       DATED: March 13, 2000

                                  By: /s/ Randall L. Hales
                                  ------------------------------
                                    Randall L. Hales, President

       DATED: March 13, 2000

                                  By: /s/  Gordon M. Davis
                                  --------------------------------
                                  Gordon M. Davis, Vice President
                                  Administration/CFO (Principal
                                  Financial and Accounting Officer

<PAGE>
                                   -22-



                    FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                       (A Development Stage Enterprise)


                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                         Page

    Report of Independent Certified Public Accountants . . . . . . . . .  F-1

    Consolidated Balance Sheets - December 31, 1999 and 1998 . . . . . .  F-2

    Consolidated Statements of Operations for the Years Ended
     December 31, 1999 and 1998 and for the Cumulative
     Period from April 30, 1990 (Date of Inception) through
     December 31, 1999 . . . . . . . . . . . . . . . . . . . . . . . . .  F-3

    Consolidated Statements of Stockholders' Equity for
     the Cumulative Period from April 30, 1990 (Date of
     Inception) through December 31, 1997 and for the Years
     Ended December 31, 1998 and 1999. . . . . . . . . . . . . . . . . .  F-4

    Consolidated Statements of Cash Flows for the Years Ended
     December 31, 1999 and 1998, and for the Cumulative Period
     from April 30, 1990 (Date of Inception) through December
     31, 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6

    Notes to Consolidated Financial Statements . . . . . . . . . . . . .  F-7


<PAGE>


      HANSEN, BARNETT & MAXWELL
      A Professional Corporation
      Certified Public Accountants



                                                     (801) 532-2200
    Member of AICPA Division of Firms               Fax (801) 532-7944
            Member of SECPS                     345 East 300 South, Suite 200
 Member of Summit International Associates     Salt Lake City, Utah 84111-2693



                     REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


       To the Board of Directors and the Shareholders
       First Scientific, Inc.

       We have audited the accompanying consolidated balance sheets of First
       Scientific, Inc. and Subsidiary, a development stage enterprise, as
       of December 31, 1999 and 1998, and the related consolidated
       statements of operations, stockholders' equity (deficit), and cash
       flows for the years then ended and for the cumulative  period from
       April 30, 1990 (date of inception) through December 31, 1999. These
       financial statements are the responsibility of the Company's
       management. Our responsibility is to express an opinion on these
       financial statements based on our audits.

       We conducted our audits in accordance with generally accepted
       auditing standards. Those standards require that we plan and perform
       the audit to obtain reasonable assurance about whether the financial
       statements are free of material misstatement. An audit includes
       examining, on a test basis, evidence supporting the amounts and
       disclosures in the financial statements. An audit also includes
       assessing the accounting principles used and significant estimates
       made by management, as well as evaluating the overall financial
       statement presentation. We believe that our audits provide a
       reasonable basis for our opinion.

       In our opinion, the consolidated financial statements referred to
       above present fairly, in all material respects, the financial
       position of First Scientific, Inc. and Subsidiary as of December 31,
       1999 and 1998, and the results of their operations and their cash
       flows for the years then ended and for the cumulative period from
       April 30, 1990 (date of inception) through December 31, 1999, in
       conformity with generally accepted accounting principles.


                                          HANSEN, BARNETT & MAXWELL

       Salt Lake City, Utah
       March 2, 2000

                                   F-1
<PAGE>


                    FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                       (A DEVELOPMENT STAGE ENTERPRISE)
                         CONSOLIDATED BALANCE SHEETS



                                                          DECEMBER 31,
                                                   --------------------------
                                                      1999          1998
                                                   ------------  ------------
                                    ASSETS
   Current Assets
       Cash. . . . . . . . . . . . . . . . . . . . $    207,934  $  1,286,299
       Investment in securities available-for-sale       94,811       194,784
       Trade receivables . . . . . . . . . . . . .       94,933           614
       Inventory . . . . . . . . . . . . . . . . .       35,262        26,619
       Prepaid expenses. . . . . . . . . . . . . .       46,551        29,356
                                                   ------------  ------------
          Total Current Assets . . . . . . . . . .      479,491     1,537,672
                                                   ------------  ------------
   Property and Equipment
       Property and equipment. . . . . . . . . . .      173,532        95,378
       Leasehold improvements. . . . . . . . . . .       10,229            -
       Less: accumulated depreciation. . . . . . .      (27,016)       (2,982)
                                                   ------------  ------------
          Net Property and Equipment . . . . . . .      156,745        92,396
                                                   ------------  ------------
   Notes Receivable - Related Party. . . . . . . .       7,000            -

   Purchased Technology, Net . . . . . . . . . . .       18,750       108,750

   Long-Term Investments . . . . . . . . . . . . .           -         50,000

   Other Assets. . . . . . . . . . . . . . . . . .       34,883            -
                                                   ------------  ------------
   Total Assets. . . . . . . . . . . . . . . . . . $    696,869  $  1,788,818
                                                   ============  ============

                    LIABILITIES AND STOCKHOLDERS' EQUITY
   Current Liabilities
       Accounts payable. . . . . . . . . . . . . . $    123,352  $     54,334
       Customer deposits . . . . . . . . . . . . .           -         33,750
       Accrued liabilities . . . . . . . . . . . .       30,660        75,979
       Capital lease obligation - current portion.        8,850         2,070
       Notes payable - related party . . . . . . .           -         22,693
       Note payable. . . . . . . . . . . . . . . .       19,590            -
                                                   ------------  ------------
          Total Current Liabilities. . . . . . . .      182,452       188,826
                                                   ------------  ------------
   Long-Term Capital Lease Obligation. . . . . . .       14,197         4,784

   Stockholders' Equity
       Preferred stock - $0.001 par value;
        1,000,000 shares authorized; no shares
        issued or outstanding. . . . . . . . . . .           -             -
       Common stock -  $0.001 par value;
        50,000,000 shares authorized; issued
        and outstanding: 1999 - 20,219,770
        shares, 1998 - 20,169,770 shares . . . . .       20,220        20,170
       Additional paid-in capital. . . . . . . . .    7,001,564     6,429,114
       Unearned compensation . . . . . . . . . . .     (273,599)      (84,056)
       Deficit accumulated during the
        development stage. . . . . . . . . . . . .   (6,231,062)   (4,762,745)
       Unrealized loss on investment in
        securities . . . . . . . . . . . . . . . .      (16,903)       (7,275)
                                                   ------------  ------------
          Total Stockholders' Equity . . . . . . .      500,220     1,595,208
                                                   ------------  ------------
   Total Liabilities and Stockholders' Equity. . . $    696,869  $  1,788,818
                                                   ============  ============

   The accompanying notes are an integral part of these financial statements.

                                    F-2
<PAGE>

                    FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                       (A Development Stage Enterprise)
                    CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                           Cumulative from
                                                                            April 30, 1990
                                                     For the Years Ended   (Date of Inception)
                                                          December 31,           Through
                                                   --------------------------  December 31,
                                                      1999           1998          1999
                                                   ------------  ------------  ------------
  <S>                                             <C>           <C>           <C>
   Revenues from services. . . . . . . . . . . . . $    194,947  $         -   $    194,947
   Product Sales . . . . . . . . . . . . . . . . .      358,684        83,149       594,680
                                                   ------------  ------------  ------------
       Total Sales . . . . . . . . . . . . . . . .      553,631        83,149       789,627
   Cost of Sales . . . . . . . . . . . . . . . . .      148,223        54,997       302,876
                                                   ------------  ------------  ------------
       Gross Profit. . . . . . . . . . . . . . . .      405,408        28,152       486,751
                                                   ------------  ------------  ------------
   Operating Expenses
       General and administrative expense. . . . .    1,666,555       550,449     2,503,887
       Research and development expense. . . . . .       94,982     3,813,808     4,084,532
                                                   ------------  ------------  ------------
         Total Operating Expenses. . . . . . . . .    1,761,537     4,364,257     6,588,419
                                                   ------------  ------------  ------------
   Loss from Operations. . . . . . . . . . . . . .   (1,356,129)   (4,336,105)   (6,101,668)

   Other Income and (Expense)
       Realized loss on investment in securities .     (140,346)           -       (140,346)
       Interest income . . . . . . . . . . . . . .       32,643        14,682        47,325
       Interest expense. . . . . . . . . . . . . .       (4,485)      (20,970)      (98,254)
                                                   ------------  ------------  ------------
   Loss Before Income Taxes. . . . . . . . . . . .   (1,468,317)   (4,342,393)   (6,292,943)

   Benefit from Income Taxes . . . . . . . . . . .           -         61,881        61,881
                                                   ------------  ------------  ------------
   Net Loss. . . . . . . . . . . . . . . . . . . . $ (1,468,317) $ (4,280,512) $ (6,231,062)
                                                   ============  ============  ============
   Basic and Diluted Loss Per Common Share . . . . $      (0.07) $      (0.33) $      (0.55)
                                                   ============  ============  ============
  Weighted Average Number of Shares Used
   in Per-Share Calculation. . . . . . . . . . . .   20,182,373    12,800,937    11,332,280
                                                   ============  ============  ============
</TABLE>
  The accompanying notes are an integral part of these financial statements.

                                    F-3
  <PAGE>


                      FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                         (A Development Stage Enterprise)
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                                                           Deficit     Accumulated
                                                                                                         Accumulated      Total
                                       Common Stock           Additional    Receivable     During the       Other     Stockholders'
                                  -------------------------     Paid-in        From       Development  Comprehensive     Equity
                                    Shares        Amount        Capital     Shareholder      Stage          Loss        (Deficit)
                                  ------------  ------------  ------------  ------------  ------------  ------------  ------------
 <S>                             <C>           <C>           <C>           <C>           <C>           <C>           <C>
  Balance - April 30, 1990 (Date
   of Inception). . . . . . . . .           -   $         -   $         -   $         -   $         -   $         -   $         -

  Net loss for the period from
   April 30, 1990 (Date of
   Inception) through December
   31, 1997 . . . . . . . . . . .           -             -             -             -       (482,233)           -       (482,233)

  Issuance for receivable from
   shareholder, April 30, 1990,
   $0.00 per share. . . . . . . .    7,114,350         7,114         7,886       (15,000)           -             -             -

  Issuance for services:
    April 30, 1990, $0.00
     per share. . . . . . . . . .    2,371,450         2,371         2,629            -             -             -          5,000
    January 1993, $0.07
     per share. . . . . . . . . .      284,574           285        19,070            -             -             -         19,355
    January 1995, $0.02
     per share. . . . . . . . . .    2,371,450         2,371        47,629            -             -             -         50,000

  Issuance for cash:
    October 7, 1993, $0.07
     per share. . . . . . . . . .      514,605           515        34,485            -             -             -         35,000
    March 27, 1996, $0.12
     per share. . . . . . . . . .       83,001            83         9,917            -             -             -         10,000
    October 10, 1996, $0.25
     per share. . . . . . . . . .       99,601           100        24,900            -             -             -         25,000

  Set off notes receivable
   from shareholders against
   loans payable to shareholders,
   December 31, 1993. . . . . . .           -             -             -         15,000            -             -         15,000

  Shares redeemed in exchange
   for release of personal
   guarantee of Company debt,
   December 31, 1994, $0.00
   per share. . . . . . . . . . .   (2,371,450)       (2,371)        2,371            -             -              -            -
                                  ------------  ------------  ------------  ------------  ------------  -------------  -----------
  Balance - December 31, 1997 . .   10,467,581        10,468       148,887            -       (482,233)            -      (322,878)
                                                                                                                       -----------
  Net Loss. . . . . . . . . . . .           -             -             -             -     (4,280,512)            -    (4,280,512)
  Unrealized loss on securities
   available-for-sale . . . . . .           -             -             -             -             -          (7,275)      (7,275)
                                                                                                                       -----------
  Comprehensive Loss. . . . . . .                                                                                       (4,287,787)

  Stock redeemed in exchange for
   release of personal guarantee
   of Company debt and upon
   execution of license and
   royalty agreement, June 1,
   1998, $0.00 per share. . . . .   (1,778,588)       (1,779)        1,779            -             -              -            -

  Issuance for cash:
    May 7, 1998,  $0.29 per share       21,343            21         6,229            -             -              -         6,250
    July 9, 1998, $0.34 per share       87,744            88        29,912            -             -              -        30,000
    September through December
     1998, $0.75 per share. . . .    1,860,203         1,860     1,393,293            -             -              -     1,395,153

  Conversion of shareholder loans
   and a liability for deferred
   salaries, September 14, 1998
   to capital without issuance
   of additional shares . . . . .           -             -        181,877            -             -              -       181,877
                                                                                                                     (Continued)
</TABLE>
  The accompanying notes are an integral part of these financial statements.

                                     F-4
<PAGE>

                      FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                         (A Development Stage Enterprise)
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                                             Deficit
                                                                                           Accumulated  Accumulated     Total
                                        Common Stock           Additional                   During the     Other     Stockholders'
                                  -------------------------     Paid-in       Unearned    Development  Comprehensive   (Deficit)
                                     Shares        Amount       Capital     Compensation      Stage        Loss          Equity
                                  ------------  ------------  ------------  ------------  ------------  ------------  ------------
 <S>                             <C>           <C>           <C>           <C>           <C>           <C>           <C>
  Issuance to acquire SPPS,
   September 15, 1998, $0.00
   per share. . . . . . . . . . .    3,333,330  $      3,333  $     (3,333) $         -   $         -   $         -   $         -

  Issuance upon conversion of debt:
    September 17, 1998, $0.75
     per share. . . . . . . . . .       66,667            67        49,933            -             -             -         50,000
    September 30, 1998, $0.34
     per share. . . . . . . . . .      169,781           170        57,880            -             -             -         58,050

  Issuance in exchange for
   available-for-sale securities,
   (less $48,460 deferred income
   tax) September 17, and November
   18, 1998, $0.75 per share
   before tax . . . . . . . . . .      673,123           673       455,713            -             -             -        456,386

  Issuance for cancellation of
   royalty agreement and
   contribution of technology
   (less $13,421 deferred income
   tax) September 17, 1998,
   $0.75 per share. . . . . . . .    5,201,920         5,202     3,882,817            -             -             -      3,888,019

  Compensation related to grant
   of stock options, September
   17, 1998 . . . . . . . . . . .           -             -        174,194      (174,194)           -             -             -

  Issuance for restricted equity
   securities, November 18, 1998,
   $0.75 per share. . . . . . . .       66,666            67        49,933            -             -             -         50,000

  Amortization of unearned
   compensation . . . . . . . . .           -             -              -        90,138            -             -         90,138
                                  ------------  ------------  -------------  -----------  ------------  ------------  ------------
  Balance - December 31, 1998 . .   20,169,770        20,170      6,429,114      (84,056)   (4,762,745)       (7,275)    1,595,208
                                                                                                                      ------------
  Net Loss. . . . . . . . . . . .           -             -             -              -    (1,468,317)           -     (1,468,317)

  Unrealized loss on securities
   available-for-sale . . . . . .           -             -             -              -            -       (149,974)     (149,974)
  Reclassification adjustment for
   realized losses on securities
   included in net loss . . . . .           -             -             -              -            -        140,346       140,346
                                                                                                                      ------------
  Comprehensive Loss. . . . . . .                                                                                       (1,477,945)

  Issuance for Services:
    April 30, 1999; $1.00 per
     share. . . . . . . . . . . .       10,000            10         9,990             -            -             -         10,000
    September 30, 1999; $1.75
     per share. . . . . . . . . .       40,000            40        69,960             -            -             -         70,000

  Compensation related to grant
   of stock options:
    May 12, 1999. . . . . . . . .           -             -         62,500        (62,500)          -             -             -
    August 30, 1999 . . . . . . .           -             -        220,000       (220,000)          -             -             -
    November 22, 1999 . . . . . .           -             -        210,000       (210,000)          -             -             -

  Amortization of unearned
   compensation . . . . . . . . .           -             -             -         302,957           -             -         302,957
                                  ------------  ------------  ------------  -------------  -----------  ------------  -------------
  Balance - December 31, 1999 . .   20,219,770  $     20,220  $  7,001,564  $    (273,599) $(6,231,062) $    (16,903) $     500,220
                                  ============  ============  ============  =============  ===========  ============  =============
</TABLE>
 The accompanying notes are an integral part of these financial statements.

                                    F-5
<PAGE>

                      FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                         (A Development Stage Enterprise)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Cumulative from
                                                                              April 30, 1990
                                                     For the Years Ended   (Date of Inception)
                                                          December 31,           Through
                                                   --------------------------  December 31,
                                                      1999           1998          1999
                                                   ------------  ------------  ------------
<S>                                               <C>           <C>           <C>
 Cash Flows From Operating Activities
   Net loss . . . . . . . . . . . . . . . . . . .   $ (1,468,317) $ (4,280,512) $ (6,231,062)
   Adjustments to reconcile net loss to
    net cash used in operating activities:
       Loss on investments in securities
        available-for-sale. . . . . . . . . . . .        140,346            -        140,346
       Depreciation and amortization. . . . . . .        114,034        29,129       143,266
       Common stock issued for services . . . . .         50,000            -        124,355
       Common stock issued for purchased
        research and development. . . . . . . . .             -      3,766,440     3,766,440
       Compensation from stock options
        granted . . . . . . . . . . . . . . . . .        302,957        90,138       393,095
       Deferred tax benefit . . . . . . . . . . .             -        (61,881)      (61,881)
       Changes in operating assets and liabilities:
         Deposits . . . . . . . . . . . . . . . .        (34,884)           -        (34,884)
         Accounts receivable. . . . . . . . . . .        (94,319)        7,811       (94,933)
         Inventory. . . . . . . . . . . . . . . .         (8,643)        3,262       (35,262)
         Prepaid expenses . . . . . . . . . . . .         12,805       (26,422)      (16,551)
         Accounts payable . . . . . . . . . . . .        (69,018)       52,035       123,352
         Accrued liabilities. . . . . . . . . . .         45,321       101,263       163,090
         Customer deposits. . . . . . . . . . . .        (33,750)       33,750            -
                                                    ------------  ------------  ------------
         Net Cash Used in Operating Activities. .       (996,074)     (284,987)   (1,620,629)
                                                    ------------  ------------  ------------
 Cash Flows From Investing Activities
   Cash paid for property and equipment . . . . .        (68,154)      (86,940)     (155,815)
   Cash received from sale of securities
    available-for-sale. . . . . . . . . . . . . .             -        302,847       302,847
   Cash paid for note receivable - related party.         (7,000)           -         (7,000)
                                                    ------------  ------------  ------------
         Net Cash Provided by (Used in)
          Investing Activities. . . . . . . . . .        (75,154)      215,907       140,032
                                                    ------------  ------------  ------------
 Cash Flows From Financing Activities
   Proceeds from borrowing  . . . . . . . . . . .         19,590        61,050       275,565
   Principal payments on notes payable. . . . . .             -       (117,338)     (155,975)
   Proceeds from loans from stockholders. . . . .             -         19,930       158,934
   Principal payments on loans from stockholders.        (22,693)      (46,742)      (86,500)
   Principal payment under capital lease
    obligation. . . . . . . . . . . . . . . . . .         (4,034)         (862)       (4,896)
   Proceeds from issuance of common stock . . . .             -      1,431,403     1,501,403
                                                    ------------  ------------  ------------
         Net Cash Provided by Financing
          Activities. . . . . . . . . . . . . . .         (7,137)    1,347,441     1,688,531
                                                    ------------  ------------  ------------
 Net Increase (Decrease) in Cash. . . . . . . . .     (1,078,365)    1,278,361       207,934

 Cash at Beginning of Period. . . . . . . . . . .      1,286,299         7,938            -
                                                    ------------  ------------  ------------
 Cash at End of Period. . . . . . . . . . . . . .   $    207,934  $  1,286,299  $    207,934
                                                    ============  ============  ============
 Supplemental Cash Flow Information - See Note 10

 </TABLE>
  The accompanying notes are an integral part of these financial statements.

                                   F-6
<PAGE>

                    FIRST SCIENTIFIC, INC. AND SUBSIDIARY
                       (A DEVELOPMENT STAGE ENTERPRISE)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
       POLICIES

       NATURE OF BUSINESS - On April 30, 1990, Linco Industries, Inc.
       (Linco) was incorporated under the laws of the State of Utah. Linco
       developed, manufactured, and distributed a linseed oil based soap on
       a very limited basis. More recently, Linco developed and acquired two
       scientific formulations: a  non-alcohol based antibacterial
       sanitizing formulation that removes bacteria while moisturizing the
       skin and a topical rash prevention and treatment formulation that
       cleanses and moisturizes the skin for use with incontinent and other
       skin rash situations. During the year ended December 31, 1999, a
       majority of the Company's sales were from services related to
       validation testing for other companies in order to verify their
       products are in compliance with FDA requirements.

       REORGANIZATION - On September 15, 1998, Linco entered into a
       reorganization agreement with SPPS Financial Corporation ("SPPS"), a
       publicly held Delaware corporation, whereby a newly-formed,
       wholly-owned subsidiary of SPPS was merged into Linco. Under the
       terms of the agreement, the Linco shareholders exchanged all of the
       3,710 issued and outstanding shares of common stock of Linco for
       8,798,080 shares of SPPS common stock. SPPS had no assets,
       liabilities or operations and had 3,333,330 common shares outstanding
       at the date of the agreement. The agreement has been accounted for as
       the reorganization of Linco, with a related 2,371.45 -for-1 stock
       split, and the issuance of 3,333,330 common shares to the SPPS
       shareholders. Those shares were recorded at zero. The accompanying
       financial statements have been restated for all periods presented for
       the effects of the stock split from the reorganization of Linco. In
       connection with the reorganization, SPPS changed its name to First
       Scientific, Inc. This reorganization was not deemed to be the
       acquisition of a business; accordingly no pro forma information is
       presented.

       PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial
       statements include the accounts and transactions of Linco (now First
       Scientific Corporation) for all periods presented and the accounts
       and transactions of First Scientific, Inc. from September 15, 1998.
       Intercompany accounts and transactions have been eliminated in
       consolidation. The consolidated entities are collectively referred to
       herein as the "Company" or "First Scientific."

       DEVELOPMENT STAGE ENTERPRISE - Since inception, the Company has spent
       most of its efforts in developing and marketing various products and
       is considered to be in the development stage. It has not yet had
       sufficient sales to sustain operations and has relied upon cash flows
       from financing activities (primarily debt and equity issuances) to
       sustain operations.

       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 in these financial statements and accompanying notes.  Actual
       results could differ from those estimates.

       FINANCIAL INSTRUMENTS - The amounts reported as cash, securities
       available-for-sale, trade receivables, accounts payable, customer
       deposits, accrued liabilities, and notes payable and capital lease
       obligation are considered to be reasonable approximations of their
       fair values. The fair value estimates presented herein were based on
       market information available to management at the time of preparation
       of the financial statements.

       CONCENTRATION OF RISK - The concentration of business with a small
       number of customers subjects the Company to a concentration of risk
       such that the loss of a customer could significantly effect revenues.
       Historically, the Company has relied on sales to a small group of
       domestic customers but has not been limited by geographic region.

       During the year ended December 31, 1999, sales totaling of $202,656
       and $305,458, totaling $508,014 or 92% of sales were to the  two
       respective customers.  During the year ended December 31, 1998, sales
       totaling $53,531 or 64% were to one different customer.

       INVESTMENTS -Investment in marketable equity securities were
       categorized as available for sale at December 31, 1999 and 1998.
       Available-for-sale securities are stated at fair value, with
       unrealized gains and losses, net of deferred income taxes, reported
       as a component of accumulated other comprehensive loss.

       INVENTORY - Inventory is stated at the lower of cost or market.  Cost
       is determined using the first-in, first-out method.

       PROPERTY & EQUIPMENT - Property and equipment are stated at cost.
       Maintenance and repairs of equipment are charged to operations and
       major improvements are capitalized.  Upon retirement, sale, or other
       disposition, the cost and accumulated depreciation are eliminated
       from the accounts and gain or loss is included in operations.
       Depreciation is computed using the straight-line method over the
       estimated useful lives of the property and equipment, which are three
       to seven years.  Depreciation expense was $24,034 and $2,879 for the
       years ended December 31, 1999 and 1998, respectively.

       SALES RECOGNITION - Sales are recognized upon shipment of products.
       Revenue from  services provided under contracts are recognized as the
       services are performed. Customers' pre-payments are recorded as a
       liability pending completion and shipment of the order.

       RESEARCH AND DEVELOPMENT EXPENSE - Current operations are charged
       with all research and product development expenses.

       BASIC AND DILUTED LOSS PER SHARE - Basic loss per common share is
       computed by dividing net loss by the weighted-average number of
       common shares outstanding during the period.  Diluted loss per share
       is calculated to give effect to potentially issuable common shares
       except during loss periods when those potentially issuable common
       shares would decrease the loss per share. There were 2,205,000 and
       1,315,000 potentially issuable common shares which were excluded from
       the calculation of diluted loss per common share for the years ended
       December 31, 1999 and 1998, respectively.

       NOTE 2 - BUSINESS CONDITION

       First Scientific has incurred losses from operations for the two
       years ended December 31, 1999 and 1998 of $1,468,317 and $4,280,512,
       respectively, and has accumulated deficits since inception in the
       amount of $6,231,062 through December 31, 1999.  First Scientific has
       had negative cash flows from operations of $996,074 and $284,987 for
       the years ended December 31, 1999 and 1998 and $1,620,629 since
       inception.

       The Company's ability to move from  the development stage is
       dependent upon its ability to generate sufficient cash flow from
       operations to meet its obligations on a timely basis, to obtain
       additional financing, and ultimately to attain successful operations.
       Management believes it will be able to obtain sufficient equity
       financing to continue marketing efforts and continue to expand
       Company operations.  During the year ended December 31, 1999 the
       Company completed testing, completed brand promotional and collateral
       materials, and began shipments of its products to new customers.
       Subsequent to December 31, 1999, First Scientific has issued stock
       for cash proceeds of $1,475,000, and has entered into a letter of
       intent to acquire control of an operating marketing and distribution
       enterprise. Although recent and potential orders or the successful
       acquisition of operating subsidiaries are not assured,  management
       believes these recent orders, other similar potential sales, and
       sales by acquired companies will provide sufficient cash flows to
       sustain operations.

       NOTE 3 - ACQUISITION OF TECHNOLOGY

       In connection with the reorganization agreement with SPPS during
       1998, the Company issued 5,201,920 shares of common stock valued at
       $3,901,440, or $0.75 per share, to a director for the transfer of all
       rights and ownership of technology relating to scientific
       formulations and the cancellation of the Company's obligation under a
       royalty agreement relating to the use of the technology. The value of
       the contributed technology was determined based upon the fair value
       of common stock issued for cash following the reorganization with
       SPPS.  The scientific formulations were developed by the director and
       the Company and the common shares were issued to fully transfer the
       director's interest in the technology to the Company. The technology
       relates to two non-alcohol based antibacterial sanitizing
       formulations that remove bacteria while moisturizing the skin and a
       dimethicone-based topical rash prevention and treatment formulation
       that cleanses and moisturizes the skin for treatment of skin rashes
       caused by incontinence and other irritations. The technology was in
       process except for one formulation valued at $135,000. The cost of
       the completed technology was capitalized and is being amortized over
       a period of 18 months. In process technology was valued at $3,766,440
       and was charged to operations at the date acquired. Amortization
       expense for the purchased technology for the years ended December 31,
       1999 and 1998 was $90,000 and $26,250, respectively.

       NOTE 4-INVESTMENT IN SECURITIES AVAILABLE-FOR-SALE AND OTHER
       COMPREHENSIVE LOSS

       The Company has investments in marketable equity securities which are
       classified as available-for-sale securities. During the year ended
       December 31, 1999, equity securities which were previously restricted
       from resale, with a cost of $50,000, were reclassified to securities
       available-for-sale when the restriction of resale expired, and were
       transferred at their fair value of $50,000. The market value of all
       available-for-sale securities held by the Company declined during
       1999 and, at September 30, 1999, management determined that the
       decline was other-than-temporary. Accordingly, a write-down was
       recognized of $140,346 to adjust the carrying value of the
       available-for-sale securities to their market value of $111,714.
       At December 31, 1999 and 1998 available-for-sale securities consisted
       of the following:

                                                       December 31,
                                                 ----------------------
                                                    1999        1998
                                                 ----------  ----------
             Cost. . . . . . . . . . . . . . . . $  111,714  $  202,059
             Gross unrealized losses . . . . . .    (16,903)     (7,275)
                                                 ----------  ----------
             Estimated Fair Value. . . . . . . . $   94,811  $  194,784
                                                 ==========  ==========

       NOTE 5 - RELATED PARTY TRANSACTIONS

       NOTES PAYABLE TO RELATED PARTIES - Since inception, the Company has
       partially relied on funds advanced by shareholders to meet its
       obligations and fund its development activities.  These advances have
       been classified as related party notes payable and accrue  interest
       at the rate of 10% per year.  Notes payable to related parties were
       none  and $22,693 at December 31, 1999 and 1998, respectively. During
       September 1998, the shareholders converted $90,000 of  outstanding
       notes payable, together with accrued interest, to additional paid-in
       capital.

       NOTES RECEIVABLE - RELATED PARTY - During November 1999, the Company
       loaned $7,000 to an officer and shareholder in exchange for a note
       with an interest rate of 9.5% per annum. The loan is to be reduced
       from 33% of any bonuses payable to the officer.

       NOTE 6 - NOTES PAYABLE
                                                       December 31,
                                                 ----------------------
                                                    1999        1998
                                                 ----------  ----------
       SHORT-TERM NOTES PAYABLE
         Note payable to a finance company,
          interest at 12.75%, unsecured. . . . . $   19,590  $       -

       SHORT-TERM ADVANCE - During August 1998, an investor advanced $50,000
       to the Company to meet current expenses. During September 1998, the
       advance was converted into 66,667 shares of common stock at $0.75 per
       share.

       NOTE 7 - COMMITMENTS AND CONTINGENCIES

       CONSULTING AND EMPLOYMENT AGREEMENT  - Effective October 1, 1999,
       First Scientific entered into a five-year consulting agreement with a
       shareholder and director to provide scientific, product development
       and regulatory consulting to the Company. The agreement automatically
       renews yearly unless either party elects not to extend the agreement.
       Payments under the agreement are $8,000 monthly, which monthly amount
       will increase by $1,000 each anniversary date. First Scientific also
       has a consulting agreement with a director who provides marketing and
       sales consulting to the Company. The one-year agreement is for $10,000
       per month through July 2000, and $7,500 thereafter.

       CAPITAL LEASES - The Company leases various equipment under capital
       lease agreements. Equipment under capital leases as of December 31,
       1999 and 1998 was as follows:

                                                    1999        1998
                                                 ----------  ----------
            Equipment. . . . . . . . . . . . . . $   20,478  $    7,716
            Less accumulated depreciation. . . .     (1,971)       (750)
                                                 ----------   ---------
                                                 $   18,507   $   6,966
                                                 ==========   =========

       The following is a schedule by year of future minimum lease payments
       under capital leases together with the present value of the net
       minimum lease payments as of December 31, 1999:

             Year Ending December 31
                     2000. . . . . . . . . . . . $   11,895
                     2001. . . . . . . . . . . .     11,014
                     2002. . . . . . . . . . . .      5,490
                     2003. . . . . . . . . . . .         -
                     2004. . . . . . . . . . . .         -
                                                 ----------
             Total minimum lease payments. . . .     28,399
             Less amount representing
              executory costs. . . . . . . . . .        644
                                                 ----------
             Net minimum lease payments. . . . .     27,755
             Less amount representing interest .      4,708
                                                 ----------
             Present value of net minimum
              lease payments . . . . . . . . . .     23,047
             Less current portion. . . . . . . .      8,850
                                                 ----------
             Obligations Under Capital Leases
              - Long-Term. . . . . . . . . . . . $   14,197
                                                 ==========

       OPERATING LEASES - The Company leases its office space, warehouse
       space and storage space under operating leases. The office space
       lease is for a two-year term, once the lease term is up, it is
       renewable on an annual basis, and currently requires lease payments
       of $2,602 per month with annual escalations equal to the lesser of
       the change in the consumer price index or 5%.  The warehouse space
       lease is a month to month lease.  The storage space lease is for a
       14-month period with the full payment being paid in advance.  Rent
       expense for the years ended December 31, 1999 and 1998 was $42,229
       and $20,571, respectively.

       Future minimum rental payments required under the operating leases
       described above, as of December 31, 1999, are $22,102 during the year
       ending December 31, 2000.

       LEGAL ACTION - An individual has filed a claim against the Company
       under the terms of an agreement in principal allegedly made by the
       Linco Founders in 1991, which purported to promise shares of common
       stock if certain conditions were met by the individual in representing
       the Company to potential customers. First Scientific's management
       maintains that the 1991 agreement is no longer valid because the
       conditions were not met in a reasonable time and because the
       individual failed to fulfill other material terms. During the quarter
       ended December 31, 1999, the Company filed an action for declaratory
       judgement that the individual has no entitlement against the Company.
       In December 1999, the individual responded that he had "fully performed"
       under the 1991 agreement, and filed a counter-claim against the Linco
       founders and the Company.  The action is now only in the discovery
       phase. Management believes this claim should not ultimately result in
       any potential liability to the Company based upon sufficient defenses
       and also upon an indemnification agreement from the Linco founders.

       NOTE 8 - COMMON STOCK

       On April 30, 1990, the Company issued 7,114,350 common shares in
       exchange for promissory notes from shareholders in the amount of
       $15,000.  Concurrently, 2,371,450 common shares, valued at $5,000
       based upon the value of the promissory notes, were issued for legal
       and accounting services. The founding shareholders thereafter made
       loans to the Company to fund operations. On December 31, 1993, the
       notes receivable from shareholders were set off against notes payable
       to the shareholders.

       On January 20, 1993, the Company issued 284,574 shares of common
       stock valued at $19,355 in exchange for laboratory and technical
       services provided to the Company.  The shares were valued at $0.07
       per share based upon the value of an outside private placement on
       October 7, 1993 in which 514,605 common shares were issued in
       exchange for cash in the amount of $35,000, or $0.07 per share.

       During 1994, the Company redeemed 2,371,450 common shares in exchange
       for the release by a bank of an original shareholder's personal
       guarantee of $75,000 in notes payable. The shares were valued at
       zero. There were no unstated rights or privileges in connection with
       this transaction.  On January 20, 1995, the Company issued 2,371,450
       common shares for technical and director services, as well as for
       compensation relating to a new shareholder's  personal guarantee of
       notes payable. The Company determined the fair value of the services
       provided to be $50,000.

       The Company issued 83,001 and 99,601 common shares to a private
       investor for cash proceeds of $10,000 and $25,000, or $0.12 and $0.25
       per share, on March 27, and October 10, 1996, respectively.  On May
       7, 1998, an additional 21,343 common shares were issued in a private
       placement for cash in the amount of $6,250.

       On June 1, 1998, the Company redeemed 1,778,588 common shares from an
       individual who had served on the Board of Directors and had developed
       certain technology for use by the Company, including the primary
       formulas used by the Company in its products.  The Company also
       obtained the  release of the individual's personal guarantee of
       Company debt.  The common stock was also redeemed in exchange for the
       release by the Company of any ownership claim it may have had to
       certain technology. The technology was deemed worthless at that time
       and the common stock had no significant value. The individual vacated
       his position on the board of directors. Whether the transferred
       technology had any value was in question. Accordingly, the shares
       redeemed were valued at zero and no gain was recognized on the
       transfer of the technology.  There were no unstated rights or
       privileges associated with the redemption. In connection with the
       redemption, the Company entered into a license and royalty agreement
       with the individual which provided the Company with the use of the
       technology. The royalty agreement granted a 25% gross profits
       interest in the products the Company sells which are based upon the
       technology. The agreement also provided for a minimum annual royalty
       of $60,000 regardless of the Company's sales volume.

       Independent of the above redemption and because of the cash
       investment in common stock by a third party,  on September 15, 1998,
       in compliance with the third party's request, the individual came
       back to being a member of the board of directors, terminate the
       license and royalty agreement and transferred the entire ownership of
       the technology to the Company, all in exchange for 5,201,920 common
       shares. The technology, and the shares issued, were valued at
       $3,888,019 net of deferred taxes of $13,421, or $0.75 per share as
       further described in Note 2.

       On July 9, 1998, the Company issued 87,744 shares of common stock to
       a private investor for $30,000 in cash or $0.34 per share.

       On September 15, 1998, for accounting purposes, the Company was
       deemed to have issued 3,333,330 common shares, valued at $0, to the
       shareholders of SPPS in connection with the reverse acquisition of
       SPPS. No assets were received nor were any liabilities assumed in
       connection with this acquisition.

       On September 14, 1998, related party notes payable together with
       accrued interest in the amount of $90,000 and $91,877 of deferred
       salary were converted into additional paid-in capital without the
       issuance of additional shares. No unstated rights or privileges were
       granted in connection with these contributions to capital.

       In contemplation of the reorganization of the Company, an advance in
       the amount of $50,000 was received from an investor on August 6, 1998
       in order to meet short-term expenses. The advance was converted into
       66,667 shares of common stock at $0.75 per share on September 17,
       1998.

       The Company issued 169,781 shares of common stock at $0.34 per share
       on September 30, 1998 upon conversion of a $50,000 convertible note
       payable, together with interest in the amount of $8,050. The note was
       convertible at the rate on the date that an outside investment of
       more than $25,000 was received by the Company. Such an outside
       investment occurred during July 1998 at $0.34 which established the
       conversion price of the note. No beneficial conversion feature is
       ascribed to the conversion because at the measurement date the rate
       per share was not priced below market.

       The Company issued 1,860,203 shares of common stock in a private
       placement offering for cash proceeds of $1,395,153 or $0.75 per share
       from September through December 1998.

       On September 17, and November 18, 1998, the Company issued 403,796
       and 269,327 shares of common stock in exchange for securities
       available-for-sale valued at $254,387 net of deferred tax and
       $201,999, respectively. The shares were shares issued at $0.75 per
       share before deferred income tax of $48,460. Additionally, the
       Company issued 66,666 shares of common stock at $0.75 per share in
       exchange for restricted securities valued at $50,000 on November 18,
       1998.

       On April 30, 1999 the Company agreed to issue 10,000 shares of common
       stock to an individual for marketing services during 1997 and 1998.
       The Company awarded the individual an exclusive distributorship in
       the Western United States for the Company's Fresh Cleanse Brand to
       the professional health care market. The marketing services were
       valued at $10,000 based upon the fair value of the common stock
       issued. The fair value of the common stock was established by
       management based upon an evaluation of the perceived performance of
       the Company to date. The shares were issued on September 30, 1999.

       On August 7, 1999, the Company agreed to issue 40,000 shares of
       common stock to an outside service provider for their creative
       services in developing and presenting promotional and other materials
       regarding First Scientific and its products. The services were valued
       at $70,000, or $1.75 per share, based upon an evaluation by
       management of the perceived fair value of the Company's common stock
       on the date of the agreement.

       NOTE 9 - STOCK OPTIONS

       On September 30, 1998, the Company granted stock options to two
       outside directors to purchase a total of 1,050,000 shares of common
       stock at $0.75 per share. The options vest according to a schedule
       over three years and expire September 30, 2003. The options granted
       were valued at their fair value of $174,194 on the grant date, which
       amount  will be recognized by the Company as the options vest.

       The fair value of the options was determined by using the
       Black-Scholes option-pricing model with the following assumptions:
       dividend yield of 0.0%, expected volatility of 0.0%, risk-free
       interest rate of 5.0% and expected life of 5 years. The expected
       volatility was assumed to be 0.0% because, at the grant date, the
       Company was a privately held enterprise and there was no market for
       its common stock.

       The Board of Directors approved the 1998 Stock Option Plan (the
       "Plan") during December 1998, which authorized options to purchase
       2,500,000 shares of common stock. Options granted under the Plan
       generally expire 10 years from the date of grant. Options to purchase
       265,000 common shares were granted under the Plan on December 31,
       1998, with an exercise price of $0.75 per share.

       During the year ended December 31, 1999, options to purchase 890,000
       common shares were granted under the 1998 Stock Option Plan to
       various employees.

       A summary of the status of the Company's stock options as of December
       31, 1999 and 1998 and changes during the years then ended are
       presented below:

<TABLE>
<CAPTION>
                                                     1999                      1998
                                            ----------------------   ----------------------
                                                     Weighted-Average         Weighted-Average
                                               Share  Exercise Price   Share   Exercise Price
                                            ----------  ----------   ----------  ----------
 <S>                                       <C>         <C>          <C>         <C>
    Outstanding at beginning of year . . .   1,315,000  $     0.75           -   $       -
    Granted. . . . . . . . . . . . . . . .     890,000        0.99    1,315,000        0.75
                                            ----------               ----------
    Outstanding at end of year . . . . . .   2,205,000        0.85    1,315,000        0.75
                                            ==========               ==========
    Options exercisable at end of year . .     928,250        0.84      221,000        0.75
                                            ==========               ==========
    Weighted-average fair value of
     options granted during the year . . .              $     1.54               $     0.13
                                                        ==========               ==========
</TABLE>

    The following table summarizes information about stock options outstanding
    at December 31, 1999:

<TABLE>
<CAPTION>

             Options Outstanding                        Options Exercisable
  -------------------------------------------   --------------------------------------------
    Range of       Number   Weighted-Average                      Number
    Exercise    Outstanding     Remaining      Weighted-Average Exercisable  Weighted-Average
     Prices     At 12/31/99  Contractual Life   Exercise Price  At 12/31/99   Exercise Price
  ------------   ----------  ----------------   --------------  -----------   --------------
<S>             <C>         <C>                <C>             <C>           <C>
 $0.75 - $1.25    2,205,000      7.3 years           $0.85         928,250        $ 0.84

 </TABLE>

       The Company measures compensation to employees under stock-based
       options and plans using the intrinsic value method prescribed in
       Accounting Principles Board Opinion 25, Accounting for Stock Issued
       to Employees, and related interpretations. Compensation for options
       to outside directors is measured using the fair value method set
       forth under Statement of Financial Accounting Standards No. 123,
       Accounting for Stock-Based Compensation.  Stock-based compensation
       charged to operations was $241,021 and $61,936 for the year ended
       December 31, 1999 from options granted to employees and to outside
       directors, respectively. Stock-based compensation charged to
       operations was $0 and $90,138 for the year ended December 31, 1998
       from options granted to employees and to outside directors,
       respectively. Had compensation cost for the Company's options granted
       to employees been determined based on the fair value at the grant
       dates consistent with the alternative method set forth under
       Statement of Financial Accounting Standards No. 123, net loss and
       loss per share would have increased to the pro forma amounts
       indicated below:


<TABLE>
<CAPTION>
                                                                  Cumulative from
                                                                   April 30, 1990
                                           For the Years Ended   (Date of Inception)
                                               December 31,           Through
                                         --------------------------  December 31,
                                             1999         1998          1999
                                         ------------  ------------  ------------
   <S>                                  <C>           <C>           <C>
    Net loss:
         As reported . . . . . . . . .   $ (1,468,317) $ (4,280,512) $ (6,231,062)
         Pro forma . . . . . . . . . .     (1,631,892)   (4,390,379)   (6,504,504)

    Basic and diluted loss per share:
         As reported . . . . . . . . .   $      (0.07) $      (0.33) $      (0.55)
         Pro forma . . . . . . . . . .          (0.08)        (0.34)        (0.57)


       NOTE 10 - CASH FLOW INFORMATION

       SUPPLEMENTAL CASH FLOW INFORMATION - Interest was paid in the amount
       of $5,213 and  $17,516 during the years ended December 31, 1999 and
       1998, respectively.

       NONCASH INVESTING AND FINANCING ACTIVITIES - During the year ended
       December 31, 1998, the Company deferred compensation to employees of
       $57,000. For the period from April 30, 1990 through December 31,
       1999, the Company deferred compensation to employees in the amount of
       $83,877. During the year ended December 31, 1993, the Company set off
       receivables from the stockholders in the amount of $15,000 against
       related party notes payable in the same amount.

       An advance from an investor in the amount of $50,000 was converted
       into 66,667 shares of common stock  on September 17, 1998. On
       September 14, 1998, accrued expenses of $91,877 for deferred salaries
       and related party notes payable together with accrued interest in the
       amount of $90,000 were converted into additional paid-in capital
       without the issuance of additional shares. On September 15, 1998, the
       Company issued 5,201,920 shares of common stock in exchange for the
       rights to technology valued at $3,901,440 before tax and the
       cancellation of a license and royalty agreement central to the
       Company's products. On September 15, 1998, for accounting purposes,
       the Company was deemed to have issued 3,333,330 common shares, valued
       at $0, to the shareholders of SPPS in connection with the reverse
       acquisition of SPPS. No assets were received nor were any liabilities
       assumed in connection with this acquisition.

       On September 30, 1998, the Company issued 169,781 common shares upon
       the conversion of a $50,000 note payable together with accrued
       interest in the amount of $8,050. During and September and December
       1998, the Company issued 673,123 shares of common stock in exchange
       for $456,386 of securities available-for-sale, net of deferred tax.
       During December 1998 the Company issued 66,666 shares of common stock
       in exchange for $50,000 of restricted equity securities. During
       October 1998 the Company purchased computer equipment and incurred a
       capital lease obligation in the amount of $7,716

       During the year ended December 31, 1999, the Company acquired
       equipment valued at $20,478 through a capital lease agreement .  Also
       during the year ended December 31, 1999, the Company issued 50,000
       shares of common stock for services valued at $80,000 of which
       $30,000 was recorded as a prepaid expense.

       NOTE 11 - INCOME TAXES

       The following presents the components of the net deferred tax asset
       at December 31, 1999:

            Purchased technology amortization . . . . . . . . . $   6,994
            Depreciation. . . . . . . . . . . . . . . . . . . .     8,803
            Difference in fair value and tax basis of
             contributed securities.  . . . . . . . . . . . . .    89,762
                                                                ---------
            Total Deferred Tax Liabilities. . . . . . . . . . .   105,559
                                                                ---------
            Operating loss carry forwards . . . . . . . . . . .  (689,993)
            Unrealized loss on investment in securities
             available-for-sale. .  . . . . . . . . . . . . . .   (58,653)
                                                                ---------
               Total Deferred Tax Assets. . . . . . . . . . . .  (748,646)
                                                                ---------
            Valuation allowance for deferred tax assets . . . .   643,087
                                                                ---------
            Net Deferred Tax Asset. . . . . . . . . . . . . . . $      -
                                                                =========

       The valuation allowance for deferred tax assets  increased by
       $545,906 and $120,899 during the years ended December 31, 1999 and
       1998, net of $185,206 reductions from deferred taxes on acquisitions
       during the year ended December 31, 1998. The valuation allowance
       included $6,305 and  $2,713 at December 31, 1999 and 1998,
       respectively, for which subsequently recognized tax benefits will be
       allocated to unrealized loss on investment in securities
       available-for-sale.

       The Company has U.S. Federal net operating loss carry forwards of
       $1,849,846 at December 31, 1999 which expire, if unused, in years
       2013 through 2015.  The benefit from income taxes consisted of the
       following for the years ended December 31, 1999 and 1998:

                                                        1999        1998
                                                     ----------  ----------
            Deferred Tax Benefit
               Federal. . . . . . . . . . . . . . .  $       -   $   53,586
               State. . . . . . . . . . . . . . . .          -        8,295
                                                     ----------  ----------
            Benefit from Income Taxes . . . . . . .  $       -   $   61,881
                                                     ==========  ==========

       The following is a reconciliation of the income tax benefit computed
       at the federal statutory tax rate with the provision for income taxes
       for the years ended December 31, 1999 and 1998:

                                                        1999        1998
                                                     ----------  ----------
       Income tax benefit at statutory rate (34%). . $  499,228  $1,476,414
       Non deductible expenses, primarily purchased
        research and development . . . . . . . . . .     (1,776) (1,439,649)
       Change in valuation allowance . . . . . . . .   (545,906)   (118,186)
       State benefit, net of federal tax . . . . . .     48,454     143,302
                                                     ----------  ----------
       Benefit from Income Taxes . . . . . . . . . . $       -   $   61,881
                                                     ==========  ==========
       NOTE 12 - SUBSEQUENT EVENTS

       During the first quarter of 2000 the Company received cash proceeds
       in the amount of $1,475,000 under the terms of a private placement
       offering and issued 491,666 investment units, or $3.00 per unit.
       Each investment unit consists of one share of the Company's common
       stock and a warrant to purchase one-half share of common stock at
       $5.00 per share. The warrants expire December 31, 2001.

       During January 2000 the Company issued 155,000 non-qualified employee
       stock options to purchase common shares at $1.75 per share.  The
       options issued had an intrinsic value of $1.25 per share on the date
       of the grant. Accordingly, the Company will recognize compensation
       expense to the employees of $193,750 over the three-year vesting
       period of the stock options.





</TABLE>