EUROMED, INC.
                           8214 WESTCHESTER SUITE 500
                               DALLAS, TEXAS 75225
                                  214-692-3544
                                  214-987-2091



December 01, 1998


Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Attention:        John L. Krug
                  Mail Stop 7-6

Re:               EuroMed, Inc.

Dear Mr. Krug:

         On behalf of EuroMed,  Inc. I hereby transmitt the 10k for the period
 end 12/31/97.


Best Regards,

Elbert G. Tindell
Chairman of the Board
<PAGE>
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

    Form 10-K
(Mark One)
[X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ended: December 31, 1997

                                       OR

[  ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                        For the transition period from to

                           Commission File No.0-27720

                                  EUROMED, INC.
             (Exact name of registrant as specified in its charter)

                 Nevada                                      88-031770
         (State or other jurisdiction          (IRS Employer Identification No.)
        of incorporation or organization)

                  8214 Westchester, Suite 500
                                Dallas, TX 752254
                    (Address of principal executive offices)

                                  214-220-0693
               Registrant's telephone number, including area code

           Securities registered pursuant to Section 12(b) of the Act

          Title of each class Name of each exchange on which registered

None None  Securities  registered  pursuant to Section 12(g) of the Act:  Common
Stock, par value $.01 per share (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 [ ] No [x]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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-K or any amendment to this
Form 10-K.

      The aggregate market value of the voting stock held by  non-affiliates  of
the  registrant  as computed by  reference to the average of the closing bid and
asked  prices of such  stock,  as reported by the  Bulletin  Board,  on December
1,1998 ($0.75).  Shares of voting stock held by each officer and director and by
each person who owns 10% or more of the Company's  outstanding voting stock have
been  excluded  in that  such  persons  may be  deemed  to be  affiliates.  This
determination of affiliate status is not necessarily a conclusive  determination
for other purposes.

      The number  shares  outstanding  of the  registrant's  common  stock as of
December 1, 1998 was:

                      1,407,000 shares of common stock, par
value $.01 per share.




<PAGE>
                                  EUROMED, INC.

                      For the Year Ended December 31, 1997

                                Table of Contents

                                                                          Page

Part I

    Item 1:        Business.............................................  .....3

    Item 2:        Properties.................................. .....   .....
    Item 3:        Legal Proceedings.............................        ......3

    Item 4:        Submission of Matters to a Vote of Security Holders... ... 

Executive Officers of the Registrant...............................    .

Part II

    Item 5:        Market for the Registrant's Common Equity and Related
                   Stockholder Matters.............................            4

    Item 6:        Selected Financial Data.................. ....          ....5

    Item 7:        Management's Discussion and Analysis of Financial Condition 
                  and Results of Operations.................                   6

    Item 8:        Financial Statements and Supplementary Data.................7

    Item 9:        Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure.................                   25

Part III

    Item 10:       Directors and Executive Officers of EuroMed, Inc...........25

    Item 11:       Executive Compensation..................................   25

    Item 12:       Security Ownership of Certain Beneficial Owners and
                   Management.......................................          29

    Item 13:       Certain Relationships and Related Transactions..... .  ..

Part IV

    Item 14:       Exhibits, Financial Statement Schedules, and Reports on 
                    Form 8-K....................................             .30







                                     PART I

Item 1. Business

Swiss  Nassau  Corporation  was  incorporated  on May 17,  1994 in the  state of
Nevada,  United States of America,  with  authorized and issued share capital of
1,000 shares of common stock with no par value (the "Common Stock).  On June 15,
1994,  computer  equipment  with  estimated  value of $4,998 was  contributed in
exchange for all of the shares of Swiss Nassau Corporation. On October 20, 1995,
Swiss Nassau Corporation  changed its name into EuroMed,  Inc. ("EuroMed" or the
"Company")  and increased its authorized  shares to 20,000,000  shares of Common
Stock with a new par value of $0.01 per share,  and 5,000,000  preferred  shares
with a par value of $0.01 per share. On October 20, 1995, EuroMed, Inc. effected
a 150 for 1 stock split of its Common Stock.

On November  17,  1995,  all of the shares of  Galenica  B.V.  ("Galenica")  and
Confedera B.V. ("Confedera"),  both based in Oosterhout,  the Netherlands,  were
exchanged by the ultimate shareholder of both companies for all of the shares of
a newly-formed  company,  EuroMed Europe B.V. ("EuroMed Europe").  Prior to this
transaction Galenica and Confedera were owned by B.V. Wisteria  ("Wisteria"),  a
Netherlands limited liability company, which is owned by Pantapharma B.V., which
is owned by A. Francois  Hinnen.  All of the shares of EuroMed  Europe were then
exchanged for 1,850,000  shares of Common Stock.  Neither EuroMed Europe nor the
Company  had  any  operations,   and  these   transactions   were  completed  in
contemplation  of an initial public  offering  ("IPO") of shares of EuroMed.  In
March 1996 EuroMed  completed its IPO by selling  1,150,000 shares of its common
stock at $6.50 per share.  The  proceeds  of the IPO and  850,000  shares of its
common stock were used to acquire Mutarestes B.V. and Subsidiary  ("Mutarestes")
in July 1996 (estimated  acquisition price of $11,729,500).  Almost immediately,
upon completion of the acquisition of Mutarestes,  differences developed between
various officers,  directors and shareholders.  Mutarestes was subsequently sold
in July 1997 with a significant  loss being recognized and the 850,000 shares of
common stock being  returned to the Company.  In addition,  A.  Francois  Hinnen
returned 850,000 shares of common stock to the Company to mitigate the effect of
the loss on the Mutarestes transactions.

As a result of the failed  acquisition of Mutarestes and a significant change in
the Dutch law as it related to the wholesale price of pharmaceuticals, the Board
of  Directors  concluded  that it was in the best  interest of EuroMed to divest
itself of its  remaining  Dutch  pharmaceutical  operations.  In November  1997,
EuroMed Europe and its subsidiaries were sold.  EuroMed recognized a substantial
loss on the  disposal  of  EuroMed  Europe;  therefore,  the Board of  Directors
negotiated with A. Francois  Hinnen the return of 1,000,000  shares of EuroMed's
common  stock to lessen the  effects of the loss on disposal  for the  remaining
shareholders of EuroMed.

EuroMed currently has no business  operations;  however, its President and Board
of Directors are actively seeking appropriate business acquisitions.

Item 3.  Legal Proceedings

    The  Company is still  involved in three  legal  proceedings,  two in Nevada
State  Court  and one in the  United  States  District  Court  for the  Northern
District  of Texas.  There has been no  substantive  activity  in the past three
months in the first Nevada suit filed by the Company  against  former  directors
Gregory Alan Gaylor and Robert Jansonius.

    The second legal  proceeding is a lawsuit filed by the Company in the United
States District Court for the Northern District of Texas against Gaylor in which
a Final Judgment in the total amount of approximately $16 million was awarded in
favor of the Company against Gaylor.  Gaylor has not tendered any payments under
the Final Judgment and it remains wholly unsatisfied.

    The third  legal  proceeding  is a Nevada  lawsuit  filed by Gaylor  and Jan
Bouwman  (another  former  director),  on behalf of themselves and the Company's
minority shareholders, against the Company. A special master was appointed, with
the Company's agreement, to investigate Gaylor and Bouwman's allegations against
the Company.  The special  master  conducted  hearings in December  1997, but no
report has been issued by the special master as of yet.


                                     PART II

Item 5:  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
Matters

         The  Company's  common  stock has been  included  for  quotation of the
Bulletin  Board  National  Market under the symbol "EMED" since  December  1996.
Before this time from March 19,  1996 to December  30, 1996 the stock was traded
on the Nasdaq National market under the symbol "EMED".

The  following  table sets forth the high and low sales prices on the Nasdaq for
the Common Stock for fiscal year 1997.
                                            1997
                                                                    Dividends
    Quarter                           High             Low           per Share
------------------------------------------------------------------------------ 
    First Quarter                    $2.63            $0.63              -
    Second Quarter                    1.50             0.50              -
    Third Quarter                     0.75             0.19              -
    Fourth Quarter                    0.75             0.16              -

         At November 27, 1998 the Company had 31  stockholders  of record of its
common stock and 1,407,000 shares outstanding.

         Dividend Policy

         The  Company has never paid cash  dividends  on its Common  Stock.  The
Company  presently  intends  to  retain  all cash for use in the  operation  and
expansion  of the  Company's  business and does not  anticipate  paying any cash
dividends in the near future.  In addition,  the Company's  existing bank credit
agreement  prohibits the  declaration or payment of cash dividends on its Common
Stock.




<PAGE>


Item 6:  Selected Financial Data

    The  following  selected  consolidated  financial  data for each of the five
years in the period ended December 31, 1997,  have been derived from the audited
consolidated  financial  statements of the Company included herein. The selected
consolidated  financial data set forth below should be read in conjunction  with
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" and the consolidated financial statements and notes thereto included
elsewhere in this report.
<TABLE>
<CAPTION>

                                                                                     FISCAL YEAR ENDED DECEMBER 31,

                                                                   1993*          1994*          1995*          1996            1997
<S>                                                            <C>             <C>               <C>           <C>           <C>    

       Statement of Operations Data:
       Sales                                                 $        --    $        --    $        --    $        --    $        --
       Gross Profit                                                   --             --             --             --             --
       Selling, General and Administrative Expenses                   --             --             --        590,313        618,198
       Net (Loss) from Continuing Operations                          --             --             --      (538,798)      (618,198)
       Net Income (Loss)                                         444,000        637,000        836,000    (7,708,361)    (2,273,879)
       Weighted Average Number of Shares Outstanding           2,000,000      2,000,000      2,000,000      3,276,923     2,940,769
       Income (Loss) per Share:
                Continuing Operations                                                                   $    (.21)       $     (.16)
                Discontinued Operations
                         Income (Loss) on Operations               $.22           $.34           $.42         (2.19)          (0.24)
                         Estimated Loss on Disposal                                                                           (0.32)
       Total                                                       $.22          $ .34         $  .42    $   (2.35)          $ (.77)
                                                                                                            

       Balance Sheet Data at Year End                            $   --           $ --          $  --       $   --          $    --
       Total Current Assets                                          --             --              --     $ 32,347      $ 1,202,170
                                                                                                                     
       Net Assets of  Discontinued Operations                        --             --             --      5,207,529              --
       Total Assets                                                  --             --             --      5,239,876       1,202,170
       Current Liabilities                                           --             --             --         13,576          88,223
       Stockholders' Equity                                          --             --             --      5,226,300       1,113,947
</TABLE>

*There were no operating activities in EuroMed, Inc. in these years.


<PAGE>


Item 7: Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Results of Operations
 .........
Year ended December 31, 1997 Compared to Year ended December 31, 1996

As of  December  31,  1997  the  Company  had no  sales.  Selling,  general  and
administrative  expenses for the year ended  December 31, 1997 were $618,198 and
were comprised  primarily of legal and professional fees incurred as part of the
legal proceeding described in Part I, Item 3, Legal Proceedings.

Selling,  general and  administrative  expenses for the year ended  December 31,
1996 were $590,313 and were comprised primarily of legal and accounting expenses
incurred with the Company's  initial public offering and  professional  fees for
the recurring  public  reporting.  The $69,600  interest was earned on the funds
raised on the initial public  offering prior to the time the funds were expended
for the investment in Mutarestes B.V.

Liquidity and Capital Resources

Cash (used in) continuing  operations was $(509,524) for the year ended December
31, 1997 compared with $(530,811) used by operations for the year ended December
31, 1996. The cash used in operations was offset  partially by advances from the
discontinued operations.

Net cash provided by financing activities was $0 for the year ended December 31,
1997  compared  with  $6,115,250  for the year  ended  December  31,  1996.  The
Company's  initial  public  offering  of  shares  on  March  19,  1996,  was the
significant source of cash for the year ended December 31, 1996.

Cash and cash  equivalents  at the end of the year ended  December  31, 1997 was
$232,170 compared with $26,757 at the year ended December 31, 1996. The increase
is due to collection of amounts due from the disposal of the subsidiary.

Management  is of the  opinion  that  proceeds  from  the  sale of  discontinued
operations should be sufficient to finance and sustain operations at the present
level for at least twelve months or until such time as a merger is completed.

Nasdaq Delisting

 .........On  November  22,  1996,  the Nasdaq  Market  Authorities  notified and
removed EuroMed from trading on the Nasdaq market.  This step was confirmed as a
result of a hearing held December 3, 1996. The hearing  established that EuroMed
had violated several of Nasdaq's statutory requirements for participation in its
markets including, the nondisclosure of a material business acquisition in which
the Company  would  expend  stockholder  cash  assets as well as a common  stock
dilution by filing the 13d late,  the release of public  information  before the
Nasdaq  markets  were   informed,   and  nonpayment  to  Nasdaq  fees  for  said
transactions. On December 30, 1996, the EuroMed Stock was listed on the Bulletin
Board Exchange.

Item 8: Financial Statements and Supplementary Data











 .........TABLE OF CONTENTS





Auditors' Reports                                                    F-3 and F-4
Balance Sheets as of December 31, 1996 and 1997                              F-5

Statements of Operations for the years ended December 
31, 1995, 1996 and 1997                                                      F-7

Statements of Shareholders' Equity and Comprehensive Income (Loss)
 .........for the years ended December 31, 1995, 1996 and 1997                F-8

Statements of Cash Flows for the years ended December 31, 1995, 1996
 .........and 1997                                                            F-9

Notes to the Financial Statements                                           F-11


































                                AUDITOR'S REPORT




Board of Directors and Stockholders
EuroMed, Inc. and Subsidiaries


We have  audited the balance  sheets of EuroMed,  Inc.  and  Subsidiaries  as of
December  31,  1997  and  1996,  and  the  related   statements  of  operations,
shareholders'  equity and  comprehensive  income (loss),  and cash flows for the
years then ended. These financial  statements are the responsibility of EuroMed,
Inc. and Subsidiaries'  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
in the  United  States of  America.  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 financial  statements  referred to above present fairly, in
all material respects,  the financial position of EuroMed, Inc. and Subsidiaries
as of December 31, 1997 and 1996,  and the results of their  operations and cash
flows for the years then ended, in conformity with generally accepted accounting
principles in the United States of America.





/s/ KILLMAN, MURRELL & COMPANY, P.C.
KILLMAN, MURRELL & COMPANY, P.C.
October 16, 1998
Dallas, Texas



















                                AUDITOR'S REPORT




To the Board of Directors of
EuroMed, Inc. and subsidiaries

       We have audited the  consolidated  balance  sheets of EuroMed,  Inc., and
subsidiaries  as of  December  31,  1994  and  1995,  the  related  consolidated
statements of income, shareholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1995. These  consolidated  financial
statements are the responsibility of EuroMed, Inc. and subsidiaries  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 in the United States of America.  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 EuroMed,
Inc. and subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and cash flows for each of the years in the  three-year  period ended
December 31, 1995, in conformity with generally accepted  accounting  principles
in the United States of America.


/s/ KPMG ACCOUNTANTS N.V.
KPMG Accountants N.V.

Amstelveen, The Netherlands
February 15, 1996






















       EUROMED, INC. AND SUBSIDIARIES

                                 BALANCE SHEETS

                           DECEMBER 31, 1996 AND 1997

                                     ASSETS
<TABLE>
<CAPTION>

                                                              1996                               1997
                                                         --------------                    ----------
<S>                                                     <C>                                 <C>

Current Assets
   Cash and cash equivalents                              $     26,757                       $   232,170
   Receivables - Note 4
       Proceeds from sale of subsidiary                              -                           670,000
       Due from EuroMed Europe, B.V.                                 -                           300,000
   Prepaid expenses                                              5,590                                 -
                                                         -------------                   ---------------

       TOTAL CURRENT ASSETS                                     32,347                         1,202,170

Net Assets of Discontinued Operations                        5,207,529                                 -
                                                           -----------                   ---------------

           TOTAL ASSETS                                    $ 5,239,876                       $ 1,202,170
                                                           ===========                       ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and other accrued liabilities            $     13,576                      $     88,223
                                                          ------------                      ------------

Commitments and contingencies - Notes 2 and 3                        -                                 -

Stockholders' Equity - Note 3
   Common Stock, par value $.01 per share;
       20,000,000 shares authorized; 4,000,000
       and 1,430,000 shares issued and outstanding,
       respectively                                             40,000                            14,300
   Additional paid-in capital                               12,013,000                        10,167,138
   Retained (deficit)                                       (6,661,362)                       (8,935,241)
   Cumulative currency translation 
 adjustment                                                    (33,088)                              -
                                                              ------------             ---------------
                                                             5,358,550                         1,246,197
           Less:  23,000 Treasury
Shares, at cost                                               (132,250)                         (132,250)
                                                          ------------                      -------------

           TOTAL STOCKHOLDERS' EQUITY                        5,226,300                         1,113,947
                                                           -----------                       -----------

              TOTAL LIABILITIES AND
                STOCKHOLDERS' EQUITY                       $ 5,239,876                       $ 1,202,170
                                                           ===========                       ===========
</TABLE>








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

                         EUROMED, INC. AND SUBSIDIARIES

                            STATEMENTS OF OPERATIONS

                  YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
<TABLE>
<S>                                                                 <C>                 <C>                 <C> 

                                                                       1995              1996           1997
                                                                   -------------          ------------   --------

Selling, general and administrative
 expenses                                                         $           -        $  (590,313)     $  (618,198)
                                                                    -------------        -----------    -----------

   Operating (loss)                                                           -         (590,313)        (618,198)

Other Income (Expense)
   Interest income                                                            -           69,602                -
   Interest (expense)                                                         -          (18,087)               -
                                                                  -------------     ------------  ---------------

   Loss before income taxes                                                   -         (538,798)        (618,198)

Income taxes - Note                                                           -                -                -
                                                                  -------------  ---------------  ---------------

   Net (loss) from continuing operations                                      -      $  (538,798)     $  (618,198)

Discontinued operations - Note 4
   Operating income (loss) from
discontinued operations                                                 836,000       (7,169,563)        (713,695) 
Loss on sale of
discontinued
operations                                                               -                    -         (941,986)
                                                                 -------------      -------------     ------------

       Net income (loss)                                             $  836,000      $(7,708,361)     $(2,273,879)
                                                                     ==========      ===========      ===========

Weighted average number of shares
outstanding                                                          2,000,000          3,276,923        2,940,769
                                                                      ==========       ===========      ===========

Income (loss) per share:
   Continuing operations                                          $           -    $        (.16)   $        (.21)
   Discontinued operations -
       Income (loss) on operations                                          .42            (2.19)            (.24)
       Estimated loss on disposal of
 discontinued operations                                                      -                -             (.32)
                                                                  -------------  ---------------   --------------

           Total                                                     $      .42    $       (2.35)   $        (.77)
                                                                     ==========    =============    =============

</TABLE>














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


                         EUROMED, INC. AND SUBSIDIARIES

       STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)
                         (IN THOUSANDS OF U.S. DOLLARS)

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
<TABLE>
<CAPTION>

                                     Common        Common                            Cumulative
                                    Stock         Stock      Additional   Retained    currency    Treasury     Total
                                    EuroMed      Galenica &   Paid-in     Earnings/ translation    Share    Shareholders'
     Inc.         Confedera       Capital        (Deficit)   adjustment   Purchase     Equity
<S>                                  <C>          <C>        <C>            <C>       <C>            <C>        <C>

Balance as of December 31,
 1994                               $    -      $       56   $      12    $    211  $      (22)$       - $       257
   Formation of the operating group:
       Change in par value and 150
           for 1 stock split              2              -          (2)          -           -          -        -
       Acquisition of Galenica B.V.
           and Confedera B.V. by
           EuroMed, Inc. through
           the issuance of 1,850,000
           shares of common
           stock                        18             (56)         38           -           -            -            -
   Comprehensive income:
       Net income                        -               -           -         836           -            -          836
       Currency translation
           adjustment                    -               -           -           -          24            -           24
                     ------------
              Total comprehensive
                 income                  -               -           -           -           -            -          860
                                   -------     -----------  ----------   --------- -----------    ---------  -----------

Balance as of December 31, 1995         20               -           48      1,047           2            -        1,117
       Sale of common stock
           March 1996, net of
           issuing cost of $1,228       12               -       6,236           -           -            -        6,248
       Acquisition of subsidiary
           July 1996 - note              8               -       5,729           -           -            -        5,737
       Treasury stock purchase           -               -           -           -           -         (132)        (132)
   Comprehensive (loss):
       Net loss                          -               -           -      (7,708)          -            -       (7,708)
       Currency translation
           adjustment                    -               -           -           -         (35)           -          (35)
                                                                                                         
              Total comprehensive
                 loss                    -               -           -           -           -            -       (7,743)
                                   -------     -----------  ----------   --------- -----------    ---------  -----------

Balance as of December 31, 1996         40               -      12,013      (6,661)        (33)        (132)       5,227
   Shares acquired in the disposal
       of an investment in
       Mutarestes, B.V.                (17)              -      (1,683)          -           -            -       (1,700)
   Shares acquired from stockholder
       in settlement of claims         (10)              -        (190)          -           -            -         (200)
   Share issued in exchange for
       services                                          1           -          27           -            -            -   28
   Comprehensive (loss):
       Net loss                          -               -           -            -     (2,274)           -            -   (2,274)
       Currency translation
           adjustment                    -               -           -           -          33            -           33
                                                                                                            ------------
              Total comprehensive
                 (loss)                  -               -           -           -           -            -       (2,241)
                                   -------     -----------  ----------   --------- -----------    ---------  -----------

Balance as of December 31, 1997      $  14     $         -     $10,167     $(8,935)$         -      $  (132)  $    1,114
                                     =====     ===========     =======     ======= ===========      =======   ==========
</TABLE>

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



                         EUROMED, INC. AND SUBSIDIARIES

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

   YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

                                                                     1995              1996             1997
                                                                   -------          -----------    ---------
<S>                                                              <C>              <C>              <C>    

Cash flows from operating activities:
Net income (loss) from continuing activities                      $      -         $  (538,798)    $  (618,198)
Adjustments to reconcile net income (loss) to cash
   flow from operations
       Stock issued for services rendered                                -                   -          28,438
Changes in operating assets and liabilities:
   Other receivables and prepaid expenses                                -              (5,590)          5,590
   Accounts payable and other accrued liabilities                        -              13,577          74,646
                                                                  --------        ------------    ------------

           Net cash (used in) continuing
              operations                                                 -            (530,811)       (509,524)
                                                                  --------         -----------     -----------
           Net cash provided by discontinued operations                  -             434,318         414,937
                                                                  --------         -----------     -----------
           Net cash (used in) operating activities                       -             (96,493)        (94,587)
                                                                  --------        ------------    ------------

Cash flows from investing activities:
   Proceeds from disposal of discontinued operations                     -                   -         300,000
   Investment in Mutarestes B.V. and Subsidiary                          -          (5,992,000)              -
                                                               -----------         -----------  --------------

       Net cash (used in) provided by  investing activities              -          (5,992,000)        300,000
                                                               -----------         -----------     -----------

Cash flows from financing activities:
   Common stock issued                                                   -           6,247,500               -
   Purchase of Treasury Shares                                           -            (132,250)              -
                                                               -----------        ------------  --------------

       Net cash provided by financing activities                         -           6,115,250               -
                                                               -----------         -----------  --------------

Net increase in cash and cash equivalents                                -              26,757         205,413

Cash and cash equivalents at the beginning of the year                   -                   -          26,757
                                                               -----------     ---------------    ------------

Cash and cash equivalents at the end of the year                $        -        $     26,757     $   232,170
                                                                ==========        ============     ===========

Cash paid during the year:
   Interest                                                     $        -        $     18,087  $            -
                                                                ==========        ============  ==============
   Income taxes                                                 $        -      $            -  $            -
                                                                ==========      ==============  ==============

Supplemental schedule of noncash investing and financing activities:
       Increase in assets                                       $        -        $    62,096                -
       Assumption of liabilities                                         -            (33,403)               -
       Reduction in due from affiliated companies in
           connection with acquisition of Galenica Belgium S.A.          -            (28,693)               -        
  Common     stock                                                       -          (8,500)            17,000
       Additional paid-in-capital                                                  (5,729,000)       1,683,000
       Investment in Mutarestes                                          -          5,737,500       (1,700,000)
                                                                ----------         ----------      -----------

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

                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   DECEMBER 31, 1995, 1996 AND 1997

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company History

Swiss  Nassau  Corporation  was  incorporated  on May 17,  1994 in the  state of
Nevada,  United States of America,  with  authorized and issued share capital of
1,000 shares of common stock with no par value (the "Common Stock).  On June 15,
1994,  computer  equipment  with  estimated  value of $4,998 was  contributed in
exchange for all of the shares of Swiss Nassau Corporation. On October 20, 1995,
Swiss Nassau Corporation  changed its name into EuroMed,  Inc. ("EuroMed" or the
"Company")  and increased its authorized  shares to 20,000,000  shares of Common
Stock with a new par value of $0.01 per share,  and 5,000,000  preferred  shares
with a par value of $0.01 per share. On October 20, 1995, EuroMed, Inc. effected
a 150 for 1 stock split of its Common Stock.

On November  17,  1995,  all of the shares of  Galenica  B.V.  ("Galenica")  and
Confedera B.V. ("Confedera"),  both based in Oosterhout,  the Netherlands,  were
exchanged by the ultimate shareholder of both companies for all of the shares of
a newly-formed  company,  EuroMed Europe B.V. ("EuroMed Europe").  Prior to this
transaction Galenica and Confedera were owned by B.V. Wisteria  ("Wisteria"),  a
Netherlands limited liability company, which is owned by Pantapharma B.V., which
is owned by A. Francois  Hinnen.  All of the shares of EuroMed  Europe were then
exchanged for 1,850,000  shares of Common Stock.  Neither EuroMed Europe nor the
Company  had  any  operations,   and  these   transactions   were  completed  in
contemplation  of an initial public  offering  ("IPO") of shares of EuroMed.  In
March 1996 EuroMed  completed its IPO by selling  1,150,000 shares of its common
stock at $6.50 per share.  The  proceeds  of the IPO and  850,000  shares of its
common stock were used to acquire Mutarestes B.V. and Subsidiary  ("Mutarestes")
in July 1996 (estimated  acquisition price of $11,729,500).  Almost immediately,
upon completion of the acquisition of Mutarestes,  differences developed between
various officers,  directors and shareholders.  Mutarestes was subsequently sold
in July 1997 with a significant  loss being recognized and the 850,000 shares of
common stock being  returned to the Company.  In addition,  A.  Francois  Hinnen
returned 850,000 shares of common stock to the Company to mitigate the effect of
the loss on the Mutarestes transactions.

As a result of the failed  acquisition of Mutarestes and a significant change in
the Dutch law as it related to the wholesale price of pharmaceuticals, the Board
of  Directors  concluded  that it was in the best  interest of EuroMed to divest
itself of its  remaining  Dutch  pharmaceutical  operations.  In November  1997,
EuroMed Europe and its subsidiaries were sold.  EuroMed recognized a substantial
loss on the  disposal  of  EuroMed  Europe;  therefore,  the Board of  Directors
negotiated with A. Francois  Hinnen the return of 1,000,000  shares of EuroMed's
common  stock to lessen the  effects of the loss on disposal  for the  remaining
shareholders of EuroMed.

EuroMed currently has no business  operations;  however, its President and Board
of Directors are actively seeking appropriate business acquisitions.

Description of Business

Prior to  November  1997,  EuroMed and its  operating  companies,  Galenica  and
Confedera (collectively,  the "Companies"),  which are based in Oosterhout,  The
Netherlands,  primary business was the wholesale distribution of medicines.  The
Companies'  customers were primarily located in The Netherlands.  The Companies'
products were readily  available and the companies are not dependent on a single
supplier or a few suppliers.  Business  operations  ceased in November 1997 upon
the disposal of Galenica and Confedera.



                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   DECEMBER 31, 1995, 1996 AND 1997


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.

Taxation

Income taxes are accounted for in accordance with the provisions of Statement of
Financial  Accounting  Standards No. 109 "Accounting for Income Taxes." Deferred
tax assets  and  liabilities  are  recognized  for the  future tax  consequences
attributable to differences  between the financial statement carrying amounts of
existing  assets and liabilities  and their  respective tax bases.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recognized or settled.  The effect on tax assets and  liabilities of a change
in tax rates is  recognized  in income in the period that includes the enactment
date.

EuroMed has recognized  significant losses from its disposal of subsidiaries and
general  corporate  expenses  incurred in the United States.  Realization of any
portion  of the  deferred  tax  asset  resulting  from  the net  operating  loss
carryforward  is not  considered  more likely than not. No deferred tax asset or
valuation  allowance  has  been  estimated  due to  the  anticipated  change  in
ownership which severely restricts the use of the net operating carryforward.

Pension and Other Post-Retirement and Post-Employment Plans

The Companies have no defined benefit pension plan nor other  post-retirement or
post-employment plans.

Foreign Currencies Translation

The functional currency of the foreign  subsidiaries was the Dutch guilder.  The
reporting  currency herein is the US dollar. The translation of guilders into US
dollars is performed for balance sheet  accounts  using exchange rates in effect
at the  balance  sheet  dates and for income  statement  amounts  using  average
exchange  rates  during  the  period.   The  gains  and  losses  resulting  from
translations are included in stockholders' equity.

Cash Equivalents

All  highly  liquid   investments   purchased   with   original   maturities  of
approximately three months or less are considered to be cash equivalents.





                                   (Continued)

                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   DECEMBER 31, 1995, 1996 AND 1997


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings (Loss) Per Share

Earnings per share for the year ended December 31, 1995 is based upon net income
divided by 2,000,000 shares of Common Stock outstanding.  Loss per share for the
years ended December 31, 1996 and 1997 is based upon the weighted average number
of common shares outstanding during the year.

Reclassification of 1996 Balance Sheet

Due to the disposal of all  subsidiaries  in 1997, the assets,  liabilities  and
operations  applicable  to these  subsidiaries  as of  December  31,  1996  were
reclassified  into  single  balances  in  the  accompanying  balance  sheet  and
statements of operations and cash flows.


NOTE 2:  LONG-TERM INCENTIVE PLAN

The Company  adopted its 1995  Long-Term  Incentive Plan ("Plan") as of November
18, 1995. An aggregate of 300,000 shares of Common Stock has been authorized and
reserved for issuance  under the plan pursuant to the exercise of options or the
grant of restricted  stock awards.  The Plan provides for the grant of incentive
stock options,  non-qualified  stock options,  restricted stock awards and stock
appreciation  rights.  All of the  Company's  and its  subsidiaries'  employees,
independent  directors  and advisors  are  eligible to receive  awards under the
plan, but only employees of EuroMed and its subsidiaries are eligible to receive
incentive stock options.  The exercise price for incentive stock options granted
under the Plan may be no less than the fair market  value of the Common Stock on
the day of the grant.

As of December 31, 1997,  1996 and 1995,  no grants have been awarded under this
plan.


NOTE 3:  RELATED PARTY TRANSACTION

The Board of  Directors  authorized  the  issuance of common  stock to EuroMed's
President and to an unaffiliated  individual for services rendered to EuroMed in
November and December 1997. The summary below sets forth these transaction:
<TABLE>
<S>                                           <C>                 <C>                <C>              <C>
 

                                                                   Fair                Number
                                                Month             Value Per             of             Expense
       Individual                              Issued              Share              Shares            Amount
       -------------------------------------------------------------------------------------------------------
       Elbert Tindell, President             December 1997      $      .20            100,000         $ 20,000

       William Rapaglia                      November 1997       $  .28 1/8            30,000            8,438
                                                                                      ------------------------
                                                                                      130,000         $ 28,438
                                                                                      ========================
</TABLE>


                                   (Continued)


                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   DECEMBER 31, 1995, 1996 AND 1997


NOTE 3:  RELATED PARTY TRANSACTION (CONTINUED)

In addition to the $28,438  charge against  fourth (4th) quarter  operations,  a
$23,000 bonus for Elbert Tindell was approved in December 1997.

In December  1997,  the Board of  Directors  authorized  the issuance of 100,000
warrants to purchase  common stock of EuroMed to each of the three (3) Directors
of EuroMed at a price of $.30. The fair value of the common shares was $.20 (Bid
Price) at the date the  warrants  were  authorized;  therefore,  no expense  was
recognized in connection with the warrant issue.

In December  1997,  the Board of  Directors  authorized  the  following  monthly
compensation:
<TABLE>
<S>                                            <C>                                                   <C>

                                                                                                      Monthly
           Name                                  Position                                              Amounts

           Elbert Tindell                        Chief Executive Officer and
                                                    Chairman of the Board                               $5,000

           Robert A. Shuey, III                  Chief Financial Officer and
                                                    Director                                            $3,000

           Jesse Shelmire, IV                    Director                                               $3,000
</TABLE>


     In December,  Mr. Shuey and Mr. Shelmire were each paid $7,000 for services
rendered as Directors of EuroMed.


NOTE 4:  DISCONTINUED OPERATIONS

In the summer of 1997, EuroMed's management concluded the sale of its investment
in Mutarestes  B.V. and  Subsidiary  and  determined  that EuroMed should divest
itself of the  remaining  operating  subsidiaries.  On November  26,  1997,  the
Company  executed  the  "Purchase  Agreement  by and between  EuroMed,  Inc. and
Neopharm B.V." Selected provisions of the agreement are as follows:

       !   80% of capital stock sold to Neopharm B.V. of EuroMed Europe B.V.
       !   Sale Proceeds $1,000,000
       !   Retainment of $300,000 receivable from EuroMed Europe B.V.
       !   Assignment to the Company of $500,000 of the claim against 
           the purchaser of Mutarestes B.V.





                                   (Continued)



                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   DECEMBER 31, 1995, 1996 AND 1997


NOTE 4:  DISCONTINUED OPERATIONS (CONTINUED)

Management has determined that the remaining 20% interest held in EuroMed Europe
B.V. had no realizable  value and the  collection of the $500,000  claim against
the purchase of Mutarestes  B.V. was not probable;  therefore no value was given
to these assets at September 30, 1997. Additionally, in connection with the sale
of EuroMed Europe B.V., the Company entered into a settlement agreement with Dr.
A.
Francois Hinnen and his affiliates which included the following provisions:

       !   Hinnen's affiliate to return 1,000,000 shares of EuroMed's common
 stock
       !   Hinnen to resign as director of EuroMed
       !   Hinnen and his affiliates resign as the managers of EuroMed's 
operating subsidiaries
       !   Hinnen to receive EuroMed's 51% interest in Confedera Philippines, 
Inc. and title to a used automobile and personal computer
       !   Each party to the agreement to release each other for any claims 
they may have against each other

   The financial statement of EuroMed Europe B.V. as of September 30, 1997 
are as follows:

                              EUROMED EUROPE, B.V.
                                  BALANCE SHEET

                               September 30, 1997
<TABLE>
<S>                                                                                  <C>       

                                     ASSETS

                      Current Assets                                                  $6,850,655

                      Vehicles, Furniture and Equipment, net                             399,959

                      Other Assets                                                       510,281

                         Total Assets                                                 $7,760,895

                             LIABILITIES AND EQUITY

                      Liabilities                                                     $5,963,189

                      Equity                                                           1,797,706

                                                                                      $7,760,895

</TABLE>




                                   (Continued)


                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   DECEMBER 31, 1995, 1996 AND 1997


NOTE 4:  DISCONTINUED OPERATIONS (CONTINUED)


                              EUROMED EUROPE, B.V.
                             STATEMENT OF OPERATIONS
                      NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<S>                                                                              <C>      

                                                                                   ('000 omitted)

                      Sale                                                             $  26,395

                      Cost of Sale                                                        24,760

                         Gross Profit                                                      1,635

                      Selling, general and administrative expense                          2,349

                         Net (Loss)                                                   $     (714)
                                                                                      ==========



The loss on the disposal of the Subsidiary is as follows:
           Net investment in EuroMed Europe, B.V.                                    $ 2,063,763

           Professional fees incurred in connection
              with sale of EuroMed Europe                                                 55,223

                                                                                       2,118,986

           Proceeds from sale                                                         (1,000,000)

           Fair value of A. Francois Hinnen's affiliate
              stock returned to company (1,000,000 shares @ $.20)                       (200,000)
                                                                                    ------------

                      Net loss                                                      $    918,986
                                                                                    ============

</TABLE>







                                   (Continued)


                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1996 AND 1997


NOTE 5:  ACQUISITION AND DISPOSAL OF A SIGNIFICANT ASSET

EuroMed, Inc. and EuroMed Europe entered into a Stock Purchase Agreement,  dated
as of June 19, 1996 (the "Purchase  Agreement") with Mr. A. Doets, Dr. N. Th. P.
Roozekrans,   Mutarestes  B.V.   ("Mutarestes"),   Pluripharm,   a  wholly-owned
subsidiary of Mutarestes ("Pluripharm"), and Financieringsmaatschappij De Nieuwe
Wereld,  B.V., a  wholly-owned  subsidiary of Pluripharm  ("FDNW"),  pursuant to
which Doets and  Roozekrans  sold to EuroMed  Europe all of the capital stock of
Mutarestes,  Pluripharm  and FDNW.  The purchase  price paid by EuroMed for such
companies  consisted of: (i)  $5,992,000 (10 million Dutch  guilders);  and (ii)
850,000 shares of Common Stock. The closing of the Purchase  Agreement  occurred
on July 5,  1996.  The  purchase  price paid under the  Purchase  Agreement  was
determined  pursuant to  arms-length  transactions,  and were based upon,  among
other things,  multiples of earnings and potential earnings. The cash portion of
the  purchase  price  was  funded  by the  use of  available  funds  of  EuroMed
(8,560,000 Dutch guilders),  which included  proceeds from the Company's initial
public offering  completed on March 19, 1996, with the remaining  portion of the
purchase price  (1,440,000  Dutch  guilders)  being funded through a loan to the
Company from Bank MeesPierson,  N.V. The purchase price was determined by mutual
agreement of the companies'  management and no independent valuation was used to
arrive at the purchase price.  Pluripharm,  the operating company, is engaged in
the  wholesale   distribution  of  branded  and  generic  medicines  within  the
Netherlands.  Prior to the acquisition of Mutarestes B.V. by EuroMed Europe, the
only  relationship the two companies had was that each sold  pharmaceuticals  to
the other. These sales between the two companies were as follows:

  Amount
                           Year ended December 31, 1995            $2,914,000
                           Six months ended June 30, 1996          $1,798,000

The Company divested itself of the capital stock of Pluripharm and other related
assets in the second  quarter of 1997. The Company took this step primarily as a
result of the changing pharmaceutical wholesale market in The Netherlands, which
has resulted in  significantly  lowered  prices and decreased  margins,  and the
Company's inability to consolidate the Pluripharm  operations into the Company's
operations in The  Netherlands.  The operations were not consolidated due to the
objections of the management of Pluripharm  and the problems  resulting from the
litigation  initiated  by the  various  owners/managers  of the  companies.  The
divestiture  includes;  (i)  Houdstermaatschappij  Singultus  B.V.  ( a  private
company with limited liability under the laws of the Netherlands, which is owned
by management of Pluripharm) will acquire all of the capital stock of Pluripharm
for an estimated $3,104,000  (6,100,000 Dutch guilders),  and (ii) the return of
850,000 shares of common stock. The terms of divestiture  agreement included the
provision that EuroMed will not be entitled to any of the earnings of Pluripharm
during the time of ownership.








                                   (Continued)



   EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1996 AND 1997


NOTE 5:  ACQUISITION AND DISPOSAL OF A SIGNIFICANT ASSET (CONTINUED)



The following summarizes the investment in Mutarestes B.V. and Subsidiary and 
the resulting estimated loss upon disposal:

       Acquisition
           Cash                                                  $ 5,877,000
           Cost of acquisition                                       115,000
                                                                ------------
                  Total cash advanced                              5,992,000

           850,000 shares of common stock issued
               at a fair value of $6.75 per share                  5,737,500
                  Total investment                                11,729,500

       Disposal

           Estimated cash proceeds                                 3,104,000

           Disposal costs                                           (302,000)
                  Net cash provided                                2,802,000
           Stock returned to Company:
               850,000 shares of common stock
                  held by the owners of Mutarestes
                  B.V. at a fair value of $1.50
                  (March 1997)                                     1,275,000

               850,000 shares of common stock
                  held by Francois Hinnen at a
                  fair value of $.50 (September 1997)               425,000
                                                                 ------------
                                                                   4,502,000
           Estimated net loss                                    $ 7,227,500
                                                                 ===========

The fair value, of 850,000 shares  returned to EuroMed by Mr.  Francois  Hinnen,
CEO of EuroMed,  is included in the loss  estimate  since the Board of Directors
requested  that Mr.  Hinnen  give up  shares  to help  mitigate  the loss on the
disposal for those  shareholders  who purchased  stock in the March 1996 initial
public offering.





                                   (Continued)



   EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1996 AND 1997


NOTE 5:  ACQUISITION AND DISPOSAL OF A SIGNIFICANT ASSET (CONTINUED)

The  following  pro  forma  balance  sheet   (balance  sheet  does  not  include
reclassifications  related to discontinued  operations) reflects the sale of the
investment  as if it had  occurred on December  31, 1996 (in  thousands  of U.S.
dollars):

                         EUROMED, INC. AND SUBSIDIARIES

                      PRO FORMA CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 1996

                                     ASSETS
<TABLE>
<CAPTION>


                                                                                      Pro Forma               Pro Forma
                                                                   Historical        Adjustments               Total
<S>                                                                  <C>              <C>                    <C>    

Current Assets
   Cash and cash equivalents                                        $    411            $ 2,802               $  3,213
   Receivable and prepaid assets                                       2,747                  -                  2,747
   Inventory                                                           4,526                  -                  4,526
   Investment in Mutarestes B.V. and Subsidiary                        4,502             (4,502)                     -
                                                                    --------            -------             ----------

           Total Current Assets                                       12,186            (1,700)                 10,486

Net Vehicles, Furniture and Equipment                                    409                  -                    409

Other Assets                                                             779                  -                779
                                                                      --------          ---------           --------

           Total Assets                                              $13,374            $(1,700)               $11,674
                                                                     =======            =======                =======


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities                                                 $  8,057          $       -                 $8,057
Long-Term Debt                                                            90                   -                 90
                                                               ---------                     ---------          ---------

           Total Liabilities                                           8,147                  -                  8,147

Stockholders' Equity                                                   5,227             (1,700)                 3,527
                                                                    --------            -------               --------
           Total Liabilities and Stockholders     ' Equity           $13,374            $(1,700)               $11,674
                                                                     =======            =======                =======
</TABLE>



                                   (Continued)


   EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1996 AND 1997


NOTE 5:  ACQUISITION AND DISPOSAL OF A SIGNIFICANT ASSET (CONTINUED)

The following pro forma  statement of operations for the year ended December 31,
1996 reflects the operations of EuroMed,  Inc. and Subsidiaries  (statement does
not include  reclassifications related to the discontinued operations of EuroMed
Europe) without the loss on the disposal of a significant asset (in thousands of
U.S. dollars, except loss per share):
<TABLE>
<CAPTION>

                                                                                      Pro Forma          Pro Forma
                                                                   Historical        Adjustments          Total
<S>                                                                 <C>              <C>              <C>

Sales                                                                $35,471           $      -        $   35,471

Cost of Goods Sold                                                    32,426                  -            32,426
                                                                     -------           --------        ----------

   Gross Profit                                                        3,045                  -             3,045

Selling, general and administrative expense                            3,342                  -             3,342
                                                                     -------           --------       -----------

   Operating Loss                                                      (297)                 -               (297)

Other Income (Expense)
   Interest Income                                                       187                  -               187
   Interest Expense                                                     (359)                 -              (359)

   Loss on investment in Mutarestes B.V. and
       Subsidiary                                                       (7,227)             7,227                  -
                                                                       -------             ------      -------------

   Loss before income taxes                                           (7,696)             7,227              (469)

Income Taxes                                                              12                  -                 12
                                                                    --------           --------       ------------

Net (Loss)                                                            $(7,708)            $7,227        $      (481)
                                                                      =======             ======        ===========

Pro Forma (Loss) per share                                                                            $      (.15)
                                                                                                        ===========

Weighted average number of shares outstanding                                                            3,276,923
                                                                                                          =========
</TABLE>








                                   (Continued)


                         EUROMED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1996 AND 1997


NOTE 6:  QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                  Continuing Operations
                                     Income
                                                                (Loss) Before          Net Income            Earnings
                                            Revenues             Income Taxes           (Loss)               Per Share
<S>                                         <C>                   <C>                   <C>                   <C>     

           1997

          December                       $        -              $   (26,839)         $   (26,839)             $  (.01)
         September                                -                 (147,839)            (147,839)                (.06)
       June                                       -                 (177,408)            (177,408)                (.05)
       March                                      -                 (266,112)            (266,112)                (.07)

           1996

       December                                   -                 (107,458)            (107,458)                (.03)
       September                                  -                  (45,578)             (45,578)                (.01)
       June-                                 33,024                   33,024                  .01
       March                                      -                 (418,786)            (418,786)                (.18)

</TABLE>



Item 9:  Changes in and Disagreements with Accountants on Accounting and 
Financial Disclosure

       On  November  19,  1996,  KPMG  Accountants  N.V.  ("KPMG")  resigned  as
EuroMed's  independent  public  accountant.  No report of KPMG for  EuroMed  has
contained an adverse  opinion or a disclaimer  of opinion,  or was  qualified or
modified as to uncertainty,  audit scope, or accounting  principles.  There have
been  no   disagreements   between   KPMG  and  EuroMed  as  described  in  Item
304(a)(1)(iv)  of  Regulation  S-K or  events  of the  kind  set  forth  in Item
304(a)(1)(v) of Regulation S-K.

       EuroMed  provided  KPMG  with the  above  disclosures  prior to  filing a
Current  Report  Form 8-K with  the  Commission.  KPMG  responded  to the  above
disclosures by stating that they resigned as principal  accountants  for EuroMed
because they believe that the current internal  control  structure of EuroMed is
not adequate to develop reliable financial statements.  KPMG did not disclose to
EuroMed specific concerns or problems.

       On February 20, 1997, EuroMed engaged Killman,  Murrell and Company, P.C.
("Killman") as its independent  public  accountant.  Prior to engaging  Killman,
EuroMed  discussed  with Killman the reason  given by KPMG for its  resignation.
Killman has told EuroMed that it believes EuroMed has resolved the problems that
led to KPMG's  resignation.  EuroMed provided Killman with the above disclosures
prior to filing a Current Report on Form 8-K with the Commission and Killman did
not file any response to such disclosures.




       PART III

Item 10. Directors and Executive Officers of EuroMed, Inc.
<TABLE>
 
<S>                                                               <C>    <C>   
     Name                                                        Age                           Position
Elbert G. Tindell                                                 51       President, Chief Executive Officer and Chairman
                                                                           of the Board
Jesse Shelmire, IV                                                40       Director
Robert A. Shuey, III(1)                                           42       Director
</TABLE>

(1) Member of the Audit Committee and the Compensation Committee

       Elbert G. Tindell,  has served as CEO and a director of the Company since
October 15, 1997.  Mr.  Tindell is involved in the  management  and direction of
public and private  Companies in the United  States,  Asia Pacific,  and Europe.
Specializing   in  the   re-engineering   of  corporate   environments   through
implementing capital restructuring and planning strategies.  Prior to graduating
from the  University  of North Texas,  Mr.  Tindell  served in the United States
Marine Corps from January 1967 to December 1970.

       Jesse Shelmire, IV has served as a director of the Company since November
27, 1996. Mr. Shelmire has 15 years of experience in the investment  banking and
stock underwriting business.  Upon graduating from the Warton School of Business
he worked  from 1981 to 1989,  for Smith  Barney,  Inc. in their  Dallas,  Texas
office.  From 1989 to 1993,  he served as the  Portfolio  Manager for  Stonegate
Securities,  Inc. of Dallas,  Texas where he managed  $250  million of assets in
equity and fixed income accounts,  he served at Dillon-Gage  Securities corp. as
Director  of  Corporate  Finance  from 1993 to 1995 and he served as Director of
Corporate  Finance for LaJolla  Securities  Corporation  from 1994 to 1995.  Mr.
Shelmire  currently serves as Managing Director of Investment  Banking for First
London Securities Corporation in Dallas, Texas.

       Robert A. Shuey,  III has served as a director of the Company  since June
1996. Mr. Shuey is employed by National Securities  corporation of Dallas, Texas
as the Director of Corporate Finance.  Prior to that, Mr. Shuey was with LaJolla
Securities  Corporation  from  1994 to  1995  in the  position  of  Director  of
Corporate  Finance.  Mr. Shuey was employed as Director of Corporate  Finance by
Dillon-Gage Securities Corp., an investment banking firm, from 1994 to 1995, and
prior to that held the position of Senior Vice President,  Corporate finance, of
Dickinson & Company,  a brokerage firm. Mr. Shuey was Vice President of Rauscher
Pierce Refnes,  Inc. from June 1984 to September  1987. From May 1980 until June
1984, he was director of the corporate  finance  department and a Vice President
of  Institutional  Equity  Corporation.  Prior to that  time,  Mr.  Shuey was an
associate in the corporate finance department of Salomon Brothers, Inc.

Meetings and Committees of the Board of Directors

       The business of the Company is managed  under the  direction of the Board
of Directors.  The Board of Directors  meets on a regularly  scheduled  basis to
review  significant  developments  affecting  the  Company and to act on matters
requiring  approval of the Board of Directors.  It also holds  special  meetings
when an  important  matter  requires  action by the Board of  Directors  between
scheduled  meetings.  The Board of Directors met 17 times and acted by unanimous
written  consent 0 times during 1997.  During 1997,  each member of the Board of
Directors participated in at least 75% of all Board of Directors meetings during
the period for which he was a director.

       The Board of Directors has two standing  committees:  the Audit Committee
and the Compensation Committee. The functions of these committees, their current
members, and the number of meetings held during fiscal 1997 are described below.

     Audit Committee.  The Audit Committee makes recommendations to the Board of
Directors  regarding the appointment of independent  auditors,  reviews the plan
and cope of any audit to the  Company's  financial  statements  and  reviews the
Company's  significant  accounting  policies  and  related  matters.  Mr.  Shuey
currently is the sole member of the Audit Committee. The Audit Committee did not
meet in 1997.

     Compensation Committee. The Compensation Committee makes recommendations to
the Board of Directors  regarding the compensation of executive officers and the
administration  of the  Company's  1995  Long-Term  Incentive  Plan.  Mr.  Shuey
currently is the sole member of the  Compensation  Committee.  The  Compensation
Committee did not meet in 1997.

     Nominating Committee. The Company does not have a nominating committee. The
functions  customarily  performed by a nominating committee are performed by the
Board of Directors as a whole.


Item 11. Executive Compensation.

       The following table sets forth certain information regarding compensation
paid during the Company's  last  completed  fiscal year to the  Company's  Chief
Executive Officer and each of the Company's  executive  officers (other than the
Chief Executive Officer) whose total annual salary and bonuses earned during the
fiscal year ended December 31,1997, exceeded $100,000:

                    Management Compensation and Transactions

Summary Compensation Table
<TABLE>
<CAPTION>

                                                         Annual Compensation                                   Long-Term
                                                                                                          Compensation Awards
                 Name/Title            Year      Salary($)      Bonus($)            Other           Securities          All Other
                                                                               Compensation($)      Underlying       Compensation($)
                                                                                                     Options/
                                                                                                      SARs(#)
<S>                                   <C>      <C>              <C>                 <C>               <C>                 <C>

         A. Francois Hinnen(1)         1997                        --                --                 --                 --
                                       1996     $125,000           --                --                 --                 --
                                       1995     $125,000           --                --                 --                 --
         Elbert G. Tindell(2)          1997                      $23,000                                                20,000(3)
                                       1996                        --                --                 --                 --
                                       1995                        --                --                 --                 --
</TABLE>

(1)    Mr. Hinnen contracted his services to Confedera and Galenica through 
Pantapharma B.V.   Mr. Hinnen resigned effective November 27, 1997.

(2) Mr. Tindell was appointed Chief Executive Officer on October 15, 1997.
(3)    All other compensation is comprised of 100,000 shares of common stock
 issued to Mr. Tindell having a fair market value of $0.20 per
       share.

Compensation of Directors

       During 1997 the Company  paid Mr.  Shelmire and Mr. Shuey $7,000 each for
serving on the Board of  directors  and warrants to purchase  100,000  shares of
Common Stock at $0.30 per share.

Report of the Compensation Committee of the Board of Directors on Executive 

Compensation

       The  Company's  executive  compensation  program is  administered  by the
Compensation  Committee of the Board of Directors.  The  compensation  Committee
presently consists of one member, Mr. Shuey, who is an independent,  nonemployee
director.  The  Compensation  Committee is committed to a strong,  positive link
between business,  performance and strategic goals, and compensation and benefit
programs.

Overall Executive Compensation Policy

       The  Company's  compensation  policy is  designed  to support the overall
objective of enhancing value for the Company's stockholders by:

       C Attracting,  developing,  rewarding and retaining  highly qualified and
       productive  individuals.  C Relating  compensation  to both  Company  and
       individual   performance.   C  Ensuring   compensation  levels  that  are
       externally  competitive and internally equitable. C Encouraging executive
       stock   ownership  to  enhance  a  mutuality   of  interest   with  other
       stockholders.

       The following is a description of the elements of the Company's executive
compensation and how each relates to the objectives and policy outlined above.

Base Salary

       The  Committee  reviews each  executive  officer's  salary  annually.  In
determining  appropriate  salary  levels,  the  Committee  considers  individual
performance,  internal  equity,  as well as pay  practices  of  other  companies
relating to executives of similar responsibility.

       By  design,  the  Committee  strives  to  set  executives'   salaries  at
competitive  market levels.  The Committee  believes maximum  performance can be
encouraged  through the use of  appropriate  incentive  programs.  The Company's
long-term compensation philosophy is that long-term incentives should be related
to improvement in long-term  stockholder value,  thereby creating a mutuality of
interest  with  stockholders.  In  furtherance  of this  objective,  the Company
intends  to  award  to its  executive  officers  stock  options.  Stock  options
encourage and reward  effective  management that results in long-term  corporate
financial success, as measured by stock price appreciation.

Rationale for CEO Compensation

     During Mr. Hinnen's tenure as CEO in 1997, he received no compensation from
Euromed Inc. Mr.  Tindell was appointed CEO after the  resignation of Mr. Hinnen
effective  November  27,  1997.  Prior to the year  end,  Mr.  Tindell  received
commissions and directors fee in the amount of $43,000.
Section 16 Requirements

       Section  16(a) of the Exchange Act,  requires the Company's  officers and
directors,  and  persons  who own  more  than 10% of a  registered  class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the Securities  and Exchange  Commission  (the "SEC").
Such persons are required by SEC  regulation  to furnish the Company with copies
of all Section 16(a) forms they file.

       Based  solely on its review of the copies of such  forms  received  by it
with respect to fiscal 1997, or written  representations  from certain reporting
persons,  the Company  believes that all filing  requirements  applicable to its
officers,  directors and persons who own more than 10% of a registered  class of
the Company's equity securities have been complied with.



<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management.

         Principal Stockholders and Management Ownership.

       The  following  table sets forth  information  with respect to beneficial
       ownership  of Common  Stock as of  December  31,  1997 by (i) all persons
       known  to the  Company  to be the  beneficial  owner of 5% or more of the
       Common  Stock,  (ii)  each  director  of the  Company,  (iii)  the  chief
       executive  officer  and each of the  Company's  four  other  most  highly
       compensated  executive officers whose total annual  compensation for 1996
       based on salary and bonus  earned  during  1997  exceeded  $100,000  (the
       "Named  Executive  Officers"),  and (iv) all the  Company  directors  and
       executive  officers  as a group.  This table does not  include  shares of
       Common  Stock that may be purchased  pursuant to options not  exercisable
       within 60 days of December 31, 1997.  All persons listed have sole voting
       and  investment  power with  respect  to their  shares  unless  otherwise
       indicated.

<TABLE>
<CAPTION>

         Name of Beneficial Owner                                                   Amount and Nature            Percent
                                                                                      of Beneficial                of
                                                                                        Ownership  Class
 
<S>                                                                                          <C>        <C>   

A. Francois Hinnen (1)                                                                          71,500                5.00%
Jesse Shelmire, IV                                                                             100,000   (2)          6.99%
Robert A. Shuey, III                                                                           100,000   (2)          6.99%
Elbert G. Tindell                                                                              200,000   (3)         13.98%
All directors and executive officers as a group (3 persons)                                    400,000   (4)         27.96%
</TABLE>

*      Less than 1%

(1)    Of the shares  beneficially owned by Mr. Hinnen 71,500 are owned directly
       through B.V. Wisteria,  a Netherlands  limited liability  company,  which
       company  is owned is owned  by  Pantapharma  B.V.,  which is owned by Mr.
       Hinnen.

(2)    These shares  represent 100,000 options to purchase 100,000 shares of 
common stock.

              (3)Included in the 200,000 shares,  100,000  represents the option
to purchase 100,000 shares of common stock.

(4)     Of these shares 300,000 (20.98%) represent the option to purchase 
100,000 shares of common stock.


<PAGE>


                                     PART IV

Item 14:  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

a.     Exhibit

Number         Description of Exhibit
<TABLE>
<S>            <C>    

   3.1         Articles of Incorporation(1)
   3.2         Bylaws of the Company(1)
   4.1         Specimen of Series A Common Stock Certificate(1)
   10.1        Consulting, Management and Noncompetition Agreement, dated as of July 5, 1996, by and between Purchaser and Doets.(3)
   10.2        Consulting, Management and Noncompetition Agreement, dated as of July 5, 1996, by and between Purchaser and
               Roozekrans.(3)
   10.3        Consulting, Management and Noncompetition Agreement,dated as of July 5, 1996, by and between Purchaser and Hinnen.(3)
   16.1        Letter of the Change of Certified Accountants(2)
   23.1        Murrell & Company, P.C., Certified Public Accountants.*
   21.1        Subsidiaries of the Registrant(4)
   27.1        Financial Data Schedule*
</TABLE>



                  *   Filed Herein
                  (1)                                        Previously filed as
                                                             an  exhibit  to the
                                                             Company's
                                                             Registration
                                                             Statement       No.
                                                             33-80805   on  Form
                                                             S-1             and
                                                             incorporated herein
                                                             by reference.
                  (2)                                        Previously filed as
                                                             an  exhibit  to the
                                                             Company's   Current
                                                             Report    on   Form
                                                             8-K/A    (Amendment
                                                             No.     1)    dated
                                                             November  19,  1996
                                                             and    incorporated
                                                             herein           by
                                                             reference.
                  (3)                                        Previously filed as
                                                             an  exhibit  to the
                                                             Company's   Current
                                                             Report    on   Form
                                                             8-K/A    (Amendment
                                                             No.  1) dated  July
                                                             5,     1996     and
                                                             incorporated herein
                                                             by reference.
                  (4) Previously filed.

b.  Form 8-K.

               The Company  filed a report o Form 8-K dated  December 8, 1997 to
report on Item 2 event.



<PAGE>




                                                                  
                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or  15(d)  of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                  EuroMed, Inc.


Dated: December 1, 1998                               By: /s/ Elbert G. Tindell
                                                           -------------------
                                           Chairman of the Board and President

   Pursuant  to the  requirements  of  Section  13 or  15(d)  of the  Securities
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.



                Signature         Title                      Date
/s/ Elbert G. Tindell           President and                 December 1, 1998
Elbert G. Tindell                Chairman of the Board


/s/ Robert A. Shuey, III        Chief Executive Officer,      December 1, 1998
---------------------------
Robert A. Shuey, III            Chief Financial Officer,
                                Treasurer and Director