UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


                                   FORM 10-QSB



                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



                       For the quarter ended June 30, 2001
                         Commission File Number: 0-24378


                             FIRST SCIENTIFIC, INC.
        (Exact name of small business issuer as specified in its charter)


             DELAWARE                                     33-0611745
-----------------------------------------      ---------------------------------
      (State or other jurisdiction             (IRS Employer Identification No.)
    of incorporation or organization)

               1877 West 2800 South, Suite 200, Ogden, Utah 84401
          (Address of principal executive offices, including zip code)

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


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      ____
         -------


There were 33,571,951 shares of common stock, $0.001 par value, outstanding as
of August 15, 2001.




                                       1


<PAGE>


                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                                   FORM 10-QSB


                        THREE MONTHS ENDED JUNE 30, 2001

                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                                        Page

Item 1.  Financial Statements

<S>                                                                                                       <C>
         Condensed Consolidated Balance Sheet (Unaudited) as of June 30, 2001.............................3

         Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
              for the Three and Six Months Ended June 30, 2001 and 2000...................................4

         Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six
              Months Ended June 30, 2001 and 2000.........................................................5

         Notes to Condensed Consolidated Financial Statements (Unaudited).................................7

Item 2.  Management's Discussion and Analysis or Plan of Operation.......................................11


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings...............................................................................15

Item 2.  Changes in Securities and Use of Proceeds.......................................................15

Item 5.  Other Information...............................................................................16

Item 6.  Exhibits and Reports on Form 8-K................................................................16

Signatures    ...........................................................................................18
</TABLE>














                                       2



<PAGE>


                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       June 30,
                                                                                         2001
                                                                                       --------
ASSETS
   Current Assets:
<S>                                                                              <C>
       Cash                                                                      $       244,614
       Accounts receivable, net of allowance for doubtful accounts of $16,000             32,185
     Common stock subscription receivable                                                457,889
     Inventory                                                                           519,638
     Prepaid expenses and other assets                                                    39,773
                                                                                 ---------------
        Total Current Assets                                                           1,294,099
                                                                                 ---------------

Property and Equipment:
     Equipment                                                                           615,891
     Leasehold improvements                                                               83,763
     Less: Accumulated depreciation and amortization                                    (172,059)
                                                                                 ---------------
          Property and Equipment, net                                                    527,595
                                                                                 ---------------

Goodwill and Other Intangible Assets, net                                                964,585
                                                                                 ---------------
Other Assets                                                                              14,454
                                                                                 ---------------
                                                                                 $     2,800,733

LIABILITIES AND STOCKHOLDERS' DEFECIT
   Current Liabilities:
     Accounts payable                                                            $       453,935
     Accrued liabilities                                                                 173,553
     Deferred revenue                                                                    294,614
     Related-party promissory notes payable                                               61,000
     Capital lease obligations, current portion                                           12,806
     PureSoft purchase obligation                                                        190,000
                                                                                 ---------------
        Total Current Liabilities                                                      1,185,908
                                                                                 ---------------

   Capital Lease Obligations, net of current portion                                      23,846
                                                                                 ---------------

   Commitments and Contingencies (Notes 2, 3, 5 and 6)
     Convertible Redeemable Preferred Stock Series 2000-B, $1,000 stated value;
         4,000 shares authorized, 3,652 shares outstanding together with accrued
         dividends of $ 266,900 (aggregate liquidation preference of $3,918,989)
         3,518,900

   Stockholders' Deficit:

     Common stock, $0.001 par value; 50,000,000 shares authorized,
         33,571,951 shares outstanding                                                    33,572
     Additional paid-in capital                                                       15,145,951
     Accumulated deficit                                                             (17,065,333)
     Common stock subscription receivable                                                (42,111)
                                                                                 ---------------
          Total Stockholders' Deficit                                                 (1,927,921)
                                                                                 ----------------
                                                                                 $     2,800,733
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3

<PAGE>


                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                           Three Months Ended            Six Months Ended
                                                                June 30,                        June 30,
                                                      ----------------------------  -----------------------------
                                                           2001           2000          2001             2000
                                                      -------------- -------------- --------------  --------------

Revenues:
<S>                                                   <C>            <C>            <C>             <C>
   Products                                           $     185,141  $      72,634  $     510,878   $      73,603
   Services and licenses                                        ---         18,810            ---          83,016
                                                      -------------- -------------- --------------  --------------
     Total Revenues                                         185,141         91,444        510,878         156,619
                                                      -------------- -------------- --------------  --------------

Cost of Revenues:
   Products                                                 129,632         63,995        339,592          64,277
   Services                                                     ---            ---            ---          29,516
                                                      -------------- -------------- --------------  --------------
     Total Cost of Revenues                                 129,632         63,995        339,592          93,793
                                                      -------------- -------------- --------------  --------------

Gross Profit                                                 55,509         27,449        171,286          62,826
                                                      -------------- -------------- --------------  --------------


Operating Expenses:
   Selling, general and administrative                      966,612        938,183      2,293,217       1,608,910
   Research and development                                  82,846        118,872        148,769         171,115
   Amortization of goodwill and other intangibles            61,569         19,124        123,138          37,874
                                                      -------------- -------------- --------------  --------------
     Total Operating Expenses                             1,111,027      1,076,179      2,565,124       1,817,899
                                                      -------------- -------------- --------------  --------------


Loss from Operations                                     (1,055,518)    (1,048,730)    (2,393,838)     (1,755,073)
                                                      -------------- -------------- --------------  --------------


Other Income (Expense):
   Interest income                                            1,208         13,920          8,251          22,950
   Interest expense                                          (2,058)       (11,020)        (5,832)        (12,773)
   Loss on disposal of property and equipment               (19,992)           ---        (19,992)            ---
   Realized loss on marketable securities                   (27,104)       (75,188)       (27,104)        (75,188)
                                                      -------------- -------------- --------------  --------------
     Total Other Expense, net                               (47,946)       (72,288)       (44,677)        (65,011)
                                                      -------------- -------------- --------------  --------------

Net Loss                                                 (1,103,464)    (1,121,018)    (2,438,515)     (1,820,084)
Preferred Stock Dividends                                  (193,860)    (2,139,921)      (266,900)     (2,139,921)
                                                      -------------- -------------- --------------  --------------
Net Loss Attributable to Common Stockholders          $  (1,297,324) $  (3,260,939) $  (2,705,415)  $  (3,960,005)
                                                      ============== ============== ==============  ==============

Basic and Diluted Net Loss Per Common Share           $       (0.05) $       (0.16) $       (0.11)  $       (0.19)
                                                      ============== ============== ==============  ==============

Basic and Diluted Weighted Average Number of
   Common Shares Outstanding                             28,140,595     20,764,689     25,659,294      20,614,647
                                                      ============== ============== ==============  ==============

Comprehensive Loss:
   Net loss                                           $  (1,103,464) $  (1,121,018) $  (2,438,515)  $  (1,820,084)
   Realized losses on marketable securities
     included in net loss                                       ---          1,205            ---          16,903
                                                      -------------- -------------- --------------  --------------
   Comprehensive loss                                 $  (1,103,464) $  (1,119,813) $  (2,438,515)  $  (1,803,181)
                                                      ============== ============== ==============  ==============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       4

<PAGE>

                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)




<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                             June 30,
                                                               --------------------------------
                                                                     2001             2000
                                                               --------------------------------
Cash Flows From Operating Activities:
<S>                                                            <C>               <C>
    Net loss                                                   $    (2,438,515)  $  (1,820,084)
    Adjustments to reconcile net loss to net cash used in
        operating activities:
         Depreciation and amortization                                 191,115          57,392
         (Loss)gain on marketable securities                           (27,104)         75,188
         Non-cash compensation                                          43,683         243,800
         Loss on disposal of property and equipment                     19,992           5,573
         Changes in assets and liabilities, net of effects of
           the acquisition of PureSoft Solutions LLC:
               Accounts receivable, net                                104,727           4,586
            Inventory                                                 (197,737)        (17,052)
            Prepaid expenses and other current assets                   78,927          32,427
            Other assets                                                 8,087             133
            Accounts payable                                           115,212          99,442
            Accrued liabilities                                        (59,375)        (12,944)
            Deferred revenue                                           (57,075)            ---
                                                               ----------------  --------------
                Net Cash Used In Operating Activities               (2,218,063)     (1,331,539)
                                                               ----------------  --------------

Cash Flows From Investing Activities:
    Purchases of property and equipment                                (20,991)       (163,449)
    Acquisition of PureSoft Solutions LLC, net of
        cash acquired                                                      ---        (202,422)
                                                               ----------------  --------------
              Net Cash Used In Investing Activities                    (20,991)       (365,871)
                                                               ----------------  --------------

Cash Flows From Financing Activities
   Principal payments on notes payable                                 (14,000)       (362,783)
   Proceeds from issuance of notes payable                              25,000             ---
   Principal payments on capital lease obligations                      (7,704)         (4,248)
   Payment of preferred stock dividends                                (79,036)            ---
   Proceeds from issuance of preferred stock                               ---       2,700,000
   Proceeds from issuance of common stock                            1,327,105       2,277,001
                                                               ----------------  --------------
              Net Cash Provided By Financing Activities              1,251,365       4,609,970
                                                               ----------------  --------------

Net Increase (Decrease) In Cash                                       (987,689)      2,912,560
Cash At Beginning Of The Period                                      1,232,303         207,934
                                                               ----------------  --------------
Cash At End Of The Period                                      $       244,614   $   3,120,494
                                                               ================  ==============
</TABLE>












      See accompanying notes to condensed consolidated financial statements.


                                       5

<PAGE>

                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                  Six Months Ended June 30,
                                                               -------------------------------
                                                                     2001            2000
                                                               ---------------   -------------

Supplemental Disclosure of Cash Flow
   Information:

<S>                                                            <C>               <C>
   Cash paid during the period for interest                    $         2,058   $      11,709


Supplemental Schedule of Non-cash
   Investing and Financing Activities:

   Acquisition of PureSoft Solutions LLC:
     Fair value of assets acquired                                         ---       1,651,592
     Liabilities assumed                                                   ---         183,730
     Promissory note                                                       ---         450,000
     Fair value of stock options issued                                    ---         261,779
     Member interest purchase obligation                                   ---         106,083
   Non-cash preferred stock dividends                                  266,900       2,139,921
   Equipment acquired through capital lease obligations                    ---          33,021
   Stock option grants at less than fair value                             ---         193,750
   Common stock subscription                                           500,000             ---
</TABLE>














See accompanying notes to condensed consolidated financial statements




                                       6


<PAGE>


                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation--The accompanying condensed consolidated financial
statements are unaudited. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. The Company believes that the following disclosures are adequate to
make the information presented not misleading.

These condensed consolidated financial statements reflect all adjustments
(consisting only of normal recurring adjustments) that, in the opinion of
management, are necessary to present fairly the financial position and results
of operations for the periods presented. These financial statements should be
read in conjunction with the Company's consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2000.

Operating results for the three and six months ended June 30, 2001, are not
necessarily indicative of the operating results to be expected for the year
ending December 31, 2001.

The Company was in the development stage from inception (April 30, 1990) through
December 31, 2000. The Company has incurred significant losses since its
inception. The Company expects these losses to continue at least through
December 31, 2001. As of June 30, 2001, the Company has an accumulated deficit
of $17,065,333, a stockholder's deficit of $1,927,921, limited working capital
of $108,191 and $156,717 of accounts payable over 60 days past due. The Company
used cash in operating activities of $2,218,063 during the six months ended June
30, 2001. These factors, as well as the risk factors set out in the Company's
Annual Report on Form 10-KSB, raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty. Management plans to fund the operations of the Company through
proceeds from sales of debt and equity securities (see Note 5) and, if
necessary, the sale of certain of its technologies. There can be no assurance
that management's plans will be successful.

Net Loss Per Common Share--Basic and diluted net loss per common share are
calculated by dividing net loss attributable to common stockholders by the
weighted average number of shares of common stock outstanding during the period.
At June 30, 2001 and 2000, there were outstanding common stock equivalents to
purchase 24,232,780 and 6,397,035 shares of common stock, respectively, that
were not included in the computation of diluted net loss per common share as
their effect would have been anti-dilutive, thereby decreasing the net loss per
common share.

Reclassifications - Certain reclassifications have been made in the prior period
condensed consolidated financial statements to conform with the current period
presentation.

Recenntly Enacte Accountin Standards  In July 2001, the Financial  Accounting
Standards Board issued Statement of Financial  Accounting Standards ("SFAS") No.
141,  "Business  Combinations" and SFAS No. 142,  "Goodwill and Other Intangible
Assets." SFAS No. 142 changes the accounting for goodwill and intangible  assets
with  indefinite  lives  from  an  amortization  method  to  an  impairment-only
approach.  Accordingly,  effective January 1, 2002, amortization of goodwill and
intangibles  assets with indefinite  lives will  discontinue.  Other  intangible
assets will  continue  to be  amortized  over their  useful  lives.  The Company
amortized  $61,569 and  $123,138 of goodwill for the three months and six months
ended June 30, 2001, respectively.

Effective  January 1, 2002, the Company will apply the  requirements of SFAS No.
142 and  management  will perform an impairment  test of goodwill and intangible
assets  with  indefinite   lives.   The  effect  of  the  application  of  those
requirements  on the Company's  financial  position and result of operations has
not been quantified.


NOTE 2-ACQUISITION OF PURESOFT SOLUTIONS LLC

On March  15,  2000,  the  Company  entered  into an  agreement  (the  "PureSoft
Agreement")  to  acquire  100% of the common  stock of  PureSoft  Solutions  LLC
("PureSoft"),  a  New  Hampshire  limited  liability  company  involved  in  the
manufacturing and distribution of health care products. The remaining promissory
note payment of $50,000 was due on March 15, 2001.  This amount  represents  the
final fixed payment  specified in the PureSoft  Agreement.  This payment has not
been made as thef Company is in  litigation  with the former  owners of PureSoft
(See Note 3). The  PureSoft  Agreement  also  contemplates  an earn-out  whereby
provides that the Company will issue  additional  consideration of not less than
$190,000 either in the form of cash or shares of its common stock based upon the
pre-tax  net income of  PureSoft  generated  from April 1, 2000 to June 30, 2002
(see Note 3).

The following unaudited pro forma financial statement data for the six months
ended June 30, 2000 represents the results of operations of the Company as if
the acquisition of PureSoft had occurred on January 1, 2000. The unaudited pro
forma results have been prepared for illustrative purposes only and do not
purport to represent what the Company's results of operations actually would
have been had the acquisition been made when assumed, nor is it indicative of
actual or future operating results that may occur.

          Revenues                                               $      206,466
          Net loss                                                   (2,044,802)
          Net loss  attributable  to  common
            stockholders                                             (4,284,723)
          Basic  and  diluted  net  loss per
             common share                                                 (0.20)



                                       7

<PAGE>

NOTE 3-LEGAL PROCEEDINGS

In June 2001,  the Company became aware of  information  indicating  that one or
more of the former  PureSoft  owners had engaged in conduct  which  violated the
terms of their  respective  employment  agreements with the Company,  as well as
separate  legal  duties  owed to the  Company.  On June 29,  2001,  the  Company
terminated  the  employment  of the  officers of PureSoft  and filed a Complaint
against  them in the  Third  District  Court  of Salt  Lake  County,  Utah.  The
Complaint  alleges that the  defendants,  acting on behalf of the Company and/or
PureSoft:  (1) entered into material  agreements  that were not disclosed to the
executive  officers  of the  Company  prior  to the  execution  of the  PureSoft
Agreement; (2) paid PureSoft's "landlord," Colcord Properties LLC ("Colcord"), a
limited  liability  company  of  which  one  of  the  defendants  is  a  member,
approximately $53,000 of the Company's funds for eight months advance rental and
a security deposit equal to two months of rent,  without disclosing the interest
of the  defendant  in Colcord;  (3) entered into a lease with  Colcord,  without
disclosing all material facts concernint the least to the executive  officers of
the Company;  (4) paid Colcord an additional  $23,539 for "office build out" and
"office  wiring,"  which were not required by or even  referenced  in the lease,
without the authorization or approval of the executive  officers of the Company;
(5) paid themselves each a "bonus," without the authorization or approval of the
executive  officers of the  Company;  (6) paid a salary of $4,500 a month to the
spouse  of one of the  defendants  for  "accounting  services";  and (7) did not
disclose a warehouse  lease to the executive  officers of the Company,  by which
the Company was obligated to pay above market rates to an entity owned by one of
the  defendants.  The Complaint  contains  claims for breach of fiduciary  duty,
breach  of  contract,   conversion,  and  declaratory  relief  relating  to  the
employment  contracts,  the lease with  Colcord  and the  warehouse  lease.  The
defendants deny the allegations in the Complaint.

Subsequently to June 30, 2001, a Canadian  company known as National  Healthcare
Manufacturing  Corporation  ("National")  contacted the Company and alleged that
the formulas  for several of the  products  marketed by PureSoft and sold to the
Company under the Puresoft Agreement were  misappropriated  from National by one
of the defendants,  who previously worked for National.  The Company is involved
in ongoing negotiations with National to resolve the issues raised in National's
allegations.

NOTE 4-PREFERRED STOCK

The Company's authorized capital stock includes 1,000,000 shares of preferred
stock, $0.001 par value per share. As of June 30, 2001, there were 3,652 shares
outstanding of Series 2000-B Convertible Redeemable Preferred Stock ("Series B
Preferred Stock") issued pursuant to an agreement (the "Series B Preferred Stock
Agreement") with an entity controlled by an individual who is currently a
director of the Company.

Accrued  dividends  of $79,036 at December 31, 2000 were paid in cash in January
2001.  Dividends of $266,900  were accrued  during the six months ended June 30,
2001,  however the  Company did not make the  required  dividend  payments.  The
Company has the option to pay these  dividends in additional  shares of Series B
Preferred Stock and therefore, these dividends are included in the amount of the
preferred  stock  listed  on  the  condensed  consolidated  balance  sheet.  The
Company's  failure  to  pay  the  dividends  when  due  triggered  an  event  of
noncompliance  under the Series B Preferred Stock  Agreement.  The triggering of
the  event  of  noncompliance  resulted  in the  dividend  rate of the  Series B
Preferred Stock increasing from 8 percent per year to 21 percent per year.

The Series B Preferred Stock Agreement included a provision for optional
redemption of all of the outstanding shares of Series B Preferred Stock by
paying $6.5 million to the Series B preferred stockholder, on or before April 2,
2001. The Company did not exercise the provision for optional redemption prior
to its expiration date.

NOTE 5-PRIVATE PLACEMENT OF COMMON STOCK

On March 29, 2001, the Company  entered into a stock purchase  agreement with an
individual who is a director of the Company to purchase  3,149,558 common shares
from the Company for a purchase  price of  $1,000,000.  The total purchase price
consisted of $400,000 paid on March 29, 2001 and a $600,000 non-interest bearing
promissory  note  consisting  of a $400,000  payment due on April 29, 2001 and a
$200,000 payment due on May 29, 2001. The promissory note was  collateralized by
1,889,735 shares of common stock held by the director. In May 2001, the director
delivered marketable securities having a market value of $403,720 to the Company
in  payment  for the  $400,000  due on April  29,  2001 and the  Company  issued
1,259,823 of the 1,889,735  shares held as collateral.  The Company has released
the director from the  obligation  to pay the  remaining  $200,000 due under the
promissory note and cancelled the associated shares of common stock.


                                       8

<PAGE>


The March 29, 2001 stock purchase agreement includes an anti-dilution  provision
for a period  commencing on March 29, 2001 and  continuing  until the earlier of
(i) December 31, 2001 or (ii) the date of  conversion  of the Series B Preferred
Stock.  The  anti-dilution  provision  requires the Company to issue  sufficient
additional  shares  of  common  stock  to the  director  at no cost so that  the
purchased shares represent a total of 11.1 percent of the issued and outstanding
shares of the common stock of the Company on a fully diluted  basis,  as defined
in the stock purchase  agreement.  The  anti-dilution  provision is in effect so
long as the  director  continues  to own and hold  the  purchased  shares  which
require the Company to issue sufficient  additional shares of common stock at no
cost upon  conversion of the Series B Preferred  Stock to common stock such that
the aggregate  purchased  shares represent a total of 11.1 percent of the issued
and outstanding  shares.  In connection with the Company  releasing the director
from the obligation to pay the remaining $200,000 due under the promissory note,
the anti-dilution provision was reduced from 11.1 percent to 8.9 percent.

On June 6, 2001, the Company entered into another stock purchase  agreement with
the same director to purchase  8,006,869  common shares for a purchase  price of
$1,000,000.  The total purchase  price  consisted of $500,000 to be paid on June
15,  2001 and  $500,000  to be paid on July 15,  2001.  On June  18,  2001,  the
director  delivered  marketable  securities having a market value of $497,520 to
the  Company in payment  for the  $500,000  due on June 15, 2001 and the Company
issued 50 percent of the 8,006,869 shares under the agreement. On July 23, 2001,
the director delivered  marketable  securities having a market value of $244,530
to the Company  towards  payment of the $500,000 due on July 15, 2001. On August
16, 2001, the director delivered marketable  securities having a market value of
$213,359 to the Company  towards  payment of the  $500,000 due on July 15, 2001.
The  remaining  $42,111  has  been  classified  as a common  stock  subscription
receivable  in the  accompanying  condensed  consolidated  balance sheet and the
remaining shares will be issued upon receipt of the finall payment.

The June 6, 2001 stock purchase agreement includes an anti-dilution provision
for a period commencing on June 6, 2001 until the earlier of (i) December 31,
2001 or (ii) the date of conversion of the Series B Preferred Stock. The
anti-dilution provision requires the Company to issue sufficient additional
shares of common stock to the director at no cost so that the purchased shares
represent a total of 22.4 percent of the issued and outstanding shares of the
common stock of the Company on a fully diluted basis, as defined in the stock
purchase agreement. The anti-dilution provision is in effect so long as the
director continues to own and hold the purchased shares which require the
Company to issue sufficient additional shares of common stock at no cost upon
conversion of the Series B Preferred Stock to common stock such that the
aggregate purchased shares represent a total of 22.4 percent of the issued and
outstanding shares.


NOTE 6 -  RELATED-PARTY TRANSACTIONS

On January 22, 2001, the Company entered into an agreement with Pharmulations,
LLC ("Pharmulations"), an entity owned and controlled by Dr. Edward B. Walker, a
shareholder and former director of the Company whereby the Company purchased
rights to three new product formulations and paid Pharmulations a transfer fee
of $15,000. Under the terms of the purchase agreement the Company has a period
of up to eight months in which to test the product and determine whether it
wishes to market the product. Upon the Company's acceptance of the product, the
Company will pay a royalty to Pharmulations equal two percent of net sales of
the particular product for a period of 14 years, if a patent is obtained by the
Company for the product, or seven years if no patent is obtained. Royalties
shall commence on the first to occur of (i) the date the Company first begins
distributing the product and (ii) eight months after the rights to the product
are delivered to the customer. Royalties are due within 45 days of the end of
each calendar quarter. During the royalty period, the Company shall pay
royalties at an annual minimum rate of $50,000 per product payable in four equal
quarterly payments within 45 days after the end of each calendar quarter subject
to offset for payments made in previous quarters of such annual period so long
as the $50,000 annual minimum is met. The Company may determine annually that
the market or revenue for a particular product does not warrant exclusive rights
and the related minimum royalty. In such event, the Company shall notify
Pharmulations and if the Company has not paid Pharmulations at least $100,000 in
total royalty payments, the Company must pay an amount equal to the difference
between the royalties previously paid and $100,000 and transfer all right, title
and interest in the product and the products formulation back to Pharmulations.
Upon notice Pharmulations will grant to the Company, if the Company requests, a
non-exclusive license to manufacture, modify, market and sell the product
subject to a royalty equal to three percent of net product sales and a minimum
royalty of $6,000 per year for a period of the greater of ten years from the
date of the grant of the non-exclusive license or the original license period.

On May 29, 2001, the Company borrowed $25,000 from an individual who is an
officer and director of the Company. As of June 30, 2001, $14,000 was repaid.
The remaining $11,000 bears interest at eight percent per year and is due on or
before June 30, 2002.


                                       9


<PAGE>

                                        1
Item 2.  Management's Discussion and Analysis or Plan of Operation.

The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's
consolidated results of operations and financial condition. The discussion
should be read in conjunction with the unaudited condensed consolidated
financial statements as of June 30, 2001 and for the three and six months ended
June 30, 2001 and 2000 and related notes thereto together with the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2000. Whenever in
this discussion the term "First Scientific" or the "Company" is used, it should
be understood to refer to First Scientific, Inc. and its wholly owned
subsidiaries on a consolidated basis, except where the context clearly indicates
otherwise.

Legal Proceedings

In June 2001,  the Company became aware of  information  indicating  that one or
more of the former  PureSoft  owners had engaged in conduct  which  violated the
terms of their  respective  employment  agreements with the Company,  as well as
separate  legal  duties  owed to the  Company.  On June 29,  2001,  the  Company
terminated  the  employment  of the  officers of PureSoft  and filed a Complaint
against  them in the  Third  District  Court  of Salt  Lake  County,  Utah.  The
Complaint  contains  claims for breach of  fiduciary  duty,  breach of contract,
conversion,  and declaratory  relief relating to the employment  contracts,  the
lease with Colcord and the warehouse  lease.  For details of the allegattions of
the Complaint,  see Part II, Item 1. Legal  Proceedings  contained  elsewhere in
this report. The defendants deny the allegations in the Complaint.

Subsequently, a Canadian company known as National Healthcare Manufacturing
Corporation ("National") contacted the Company and alleged that the formulas for
several of the products marketed by PureSoft and sold to the Company under the
Purchase Agreement were misappropriated from National by one of the defendants,
who previously worked for National. The Company is involved in ongoing
negotiations with National to resolve the issues raised by National's
allegations.

The Company is considering engaging its auditor, Arthur Andersen LLP, and its
counsel, Durham Jones & Pinegar, to conduct a special investigation of the
activities of the defendants during the time that they were employees of the
Company and responsible for the operations of PureSoft.

Plan of Operation

First Scientific is engaged in the research, development and commercialization
of break-through, patent-pending skin care technologies that advance healthy
living. The Company's market focus centers on introducing its technologies and
products to the professional healthcare market, both domestically and
internationally. Future market opportunities have been identified in food
service, hospitality, retail and other major market segments. The Company's
progress in the professional healthcare market is advancing quickly with several
large contracts in place with market leaders. The existing contracts provide
access to all acute care settings, long-term care, physician offices, alternate
care sites and laboratories. Late in the second quarter, the Company began its
first retail endeavor by introducing the MicrobNZ products into a national
retail outlet with 1,100 locations.

First Scientific currently operates from four locations: corporate offices,
warehousing, mixing, stability testing, records storage and a state-of-the-art
FDA compliant research and development facility in Ogden, Utah; a sales office
in Chicago, Illinois; an East coast distribution facility located in Nashua, New
Hampshire and a New Fields, New Hampshire, office which serves primarily as a
sales and marketing support office.


The Company maintains information concerning its business, products, test
results, media coverage and investor relations at the Company's Web site,
www.firstscientific.com. Reference to the website is not intended and should not
be construed as incorporation of information contained on the site as part of
this report.

First Scientific is primarily engaged in commercializing the following
technology platforms and products:


The complimentary care products help position the Company by providing a
complete product offering that supports the platform technologies.

Antimicrobial Technology - MicrobNZ(TM), Protection at the Microbial Level
MicrobNZ is highly efficacious, long-lasting with a high degree of persistence,
and fast-acting against a broad spectrum of pathogens, including Escherichia
coli, Pseudomonas aeruginosa, Staphylococcus aureus and drug resistant bacteria


                                       10

<PAGE>

such as Methicillin resistant Staphylococcus aureus (MRSA) and Vancomycin
resistant Enterococcus (VRE). The MicrobNZ formulation does not contain any
irritating or degrading active ingredients such as Triclosan(R), CHG
(Chlorhexidine Gluconate), PCMX (Chloroxlyenol), iodine, or alcohol. And, unlike
these other degrading active ingredients, products formulated with MicrobNZ
significantly improve and moisturize the skin.

First Scientific's antimicrobial formulation has exceeded the Food and Drug
Administration (FDA) protocols required for classification as a Healthcare
Personnel Handwash and as a First-Aid Antiseptic (21 CFR 333).

MicrobNZ can be used in a facility-wide healthcare setting and is appropriate
for patient, public and staff handwashing. This technology is currently packaged
as an antimicrobial handwash, antimicrobial lotion, antimicrobial spray,
antimicrobial foam and antimicrobial towelettes. First Scientific markets its
antimicrobial technology to domestic and international organizations in the
professional healthcare market under the MicrobNZ brand.

Skin Healing Technology - ShieldZ(TM)
First Scientific's patent-pending, ShieldZ technology brings together
Dimethicone with skin-conditioning emollients and botanical oils to create a
unique formulation for the treatment and prevention of rashes. The Company has
demonstrated shelf life of this stable Dimethicone oil-in-water emulsion for
periods in excess of three years. ShieldZ meets FDA requirements to be
considered an over-the-counter drug product. Packaged in large towelette form it
is used for the treatment and prevention of skin rashes caused by infant and
adult incontinence. First Scientific currently supplies a version of the ShieldZ
technology as a waterless, rinse-free, patient-bathing product to ConvaTec, a
division of Bristol-Myers Squibb Company.

Manufacturing

The Company currently contracts the manufacturing of its products to carefully
selected facilities that meet both GMP (Good Manufacturing Practices) and FDA
standards. These contract manufacturers supply product to various customers who
require GMP and FDA compliant facilities for the manufacturing of their
products. First Scientific employs in-house regulatory experts that work closely
with contract manufacturers to establish and monitor product specific quality
standards, and also to design and implement more efficient manufacturing
processes.

Outlook

The Company's cash requirements through the end of 2001 will vary based upon a
number of factors including, but not limited to, continuing research and
development levels, increased market development activities, facilities
enhancements, additional personnel, travel and other expenses related to
projected growth. With respect to the year 2001, the Company expects that
additional cash funding will be needed beyond the $1,000,000 received and to be
received in connection with the sale of 8,006,869 shares of common stock to an
individual who is a director of the Company on June 6, 2001. While the Company
has continued to reduce its recurring operating expenses during the three months
ended June 30, 2001 compared to the three months ended March 31, 2001, the
Company expects that additional funding will be required to meet operating needs
and remain a going concern. In April 2001, the Company began implementing
further cost reductions and expects to reduce monthly expenses to a level
approaching $150,000 per month beginning in the third quarter.

Product research and development is an ongoing process. Existing products are
continuously being refined and new technology developed to solve unmet market
needs. The Company's existing facilities and equipment are projected to be
sufficient to meet most of its growth needs.

The Company benefits from an experienced executive management team and a board
of directors comprising several senior-level business executives. The Company
has assembled an in-house team of respected, results-oriented research and
development, marketing, sales and operations professionals, as well as outside
advertising, public relations and healthcare market consultants to advise
management on business strategy and product innovation.


                                       11


<PAGE>


Results of Operations

Three months ended June 30, 2001 compared to the three months ended June 30,
2000

During the three months ended June 30, 2001, the Company recorded revenues of
$185,141, reflecting an increase of $93,697, or 102 percent, compared to the
same period in the previous year. Approximately 20 percent of the revenues in
the three months ended June 30, 2000 were derived from contracts to qualify and
test products for customers. In the three months ended June 30, 2001 the source
of revenues has shifted to the sale of products, representing 100 percent of
total revenues.

Selling, general and administrative expenses were $966,612 and $938,183 during
the three months ended June 30, 2001 and 2000, respectively, representing an
increase of $28,429. The increase over the prior year is due to the growth and
development related expenses associated with expanded operations. Payroll
expenses increased $124,000 due to the addition of sales and additional
administrative support personnel primarily associated with PureSoft Solutions.
Marketing, sales and travel related expenses increased $58,000 due to product
launch training with several large customers and the addition of sales personnel
located outside of Utah and New Hampshire. Rent expense increased $54,000 in
connection with the write-off of prepaid rent and a security deposit related to
the termination of a New Hampshire facility lease commitment. Consulting, legal,
investor relations, professional fees and various miscellaneous expenses
decreased $231,000 due to consolidating efforts in order to focus on core
business opportunities which took place during the three months ended June 30,
2001.

The Company incurred research and development expenses of $82,846 during the
three months ended June 30, 2001, a decrease of $36,026 compared to the same
period in the previous year. This decrease was due to the completion of the
Company's testing facilities, including a new lab and personnel to support
testing at the lab.

Six months ended June 30, 2001 compared to the six months ended June 30, 2000

During the six months ended June 30, 2001, the Company recorded revenues of
$510,878, reflecting an increase of $354,259 compared to the same period in the
previous year. Revenues in the six months ended June 30, 2000 were primarily
derived from contracts to qualify and test products for customers. In the six
months ended June 30, 2001 the source of revenue has shifted to the sale of
products, representing 100 percent of total revenues.

Selling, general and administrative expenses were $2,293,217 and $1,608,910
during the six months ended June 30, 2001 and 2000, respectively, representing
an increase of $684,307. The increase over the prior year is due to growth and
development related expenses associated with expanded operations. Payroll
expenses increased $650,000 due to the addition of sales and additional
administrative support personnel primarily associated with PureSoft Solutions.
Marketing, sales and travel related expenses increased $155,000 due to product
launch training with several large customers and the addition of sales personnel
located outside of Utah and New Hampshire. Rent expense increased $54,000 in
connection with the write-off of prepaid rent and a security deposit related to
the termination of a New Hampshire facility lease commitment. Consulting, legal,
investor relations, professional fees and other miscellaneous expenses decreased
$149,000 due to consolidating efforts in order to focus on core business
opportunities.

The Company incurred research and development expenses of $148,769 during the
six months ended June 30, 2001, a decrease of $22,346 compared to the same
period in the previous year. This decrease was due to the completion of the
Company's testing facilities, including a new lab and personnel to support
testing at the lab.

Liquidity and Capital Resources

First Scientific had cash of $244,614 as of June 30, 2001, representing a
decrease of $988,000 from December 31, 2000. As of June 30, 2001 working capital
was $108,191. The Company had an accumulated deficit of $17,065,333 at June 30,
2001, most of which had been funded out of proceeds received from the issuance
of stock. This deficit includes $3,776,000 attributable to non-recurring charges
for the purchase of in-process research and development and $3,586,000
attributable to dividends and beneficial conversion features on preferred stock.
The remaining $9,703,000 deficit resulted primarily from costs incurred in
connection with research and development; compliance of its proprietary products
with FDA requirements; and operating expenses related to startup sales,
marketing and administration.


                                       12

<PAGE>

Historically, the Company has financed its operations principally through loans,
private  placements  of equity  securities,  and minimal  product  sales.  First
Scientific  used net cash of $2,218,063 in operating  activities  during the six
months ended June 30, 2001 related primarily to the net loss from operations. In
the short term,  the Company will be dependent on a few large  customers for the
bulk of the Company's revenue. Until a broader base of customers is established,
the loss of one such customer could have a serious,  material  adverse effect on
the Company's  operating  viability.  Because the Company  presently has limited
revenue,  the Company will rely primarily on these factors,  as well as the risk
factors set out in the Company's Annual Report on Form 10-KSB, raise substantial
doubt about the  Company's  ability to continue as a going  concern.  Management
plans to fund the operations of the Company through  proceeds from sales of debt
and equity securities and, if necessary, the sale of certain of its technologies
cash  balances and proceeds  from the sale of its equity and debt  securities to
satisfy future capital requirements.  There can be no assurance that the Company
will be able to secure this funding or that the terms of such  financing will be
favorable to the Company. Furthermore, the issuance of equity or debt securities
which are or may become  convertible  into equity  securities of the Company may
result in substantial dilution to the stockholders of the Company.

As of June 30, 2001, the Company had $500,000 due from an individual who is a
stockholder and director of the Company related to the purchase of 4,003,425
shares of the Company's common stock. On July 23, 2001, the director provided
marketable securities having a market value of $244,530 to the Company towards
payment of the $500,000 due July 15, 2001. On August 16, 2001, the director
provided marketable securities having a market value of $213,359 towards payment
of the $500,000 due July 15, 2001.

Forward-Looking Statements

When used in this Form 10-QSB and in other filings by First Scientific with the
SEC, in First Scientific's press releases or other public or stockholder
communications, or in oral statements made with the approval of an authorized
executive officer of First Scientific, the words or phrases "would be," "will
allow," "intends to," "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 safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and Section
21E of the Securities Exchange Act of 1934, as amended.

First Scientific 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 various risks and uncertainties, including but not
limited to risk 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 or continue as anticipated due to delays or otherwise.
As a result, First Scientific's actual results for future periods could differ
materially from those anticipated or projected.

Unless otherwise required by applicable law, First Scientific does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statements.


                                       13

<PAGE>


PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

In March 2000, the Company entered into a Purchase Agreement (the "Purchase
Agreement") to acquire PureSoft Solutions LLC ("PureSoft), located in New
Hampshire. The transaction closed on June 2, 2000. Following the closing,
PureSoft operated in New Hampshire as a subsidiary of the Company.

In June 2001,  the Company became aware of  information  indicating  that one or
more of the former  PureSoft  owners had engaged in conduct  which  violated the
terms of their  respective  employment  agreements with the Company,  as well as
separate  legal  duties  owed to the  Company.  On June 29,  2001,  the  Company
terminated  the  employment  of the  officers of PureSoft  and filed a Complaint
against  them in the  Third  District  Court  of Salt  Lake  County,  Utah.  The
Complaint  alleges that the  defendants,  acting on behalf of the Company and/or
PureSoft:  (1) entered into material  agreements  that were not disclosed to the
executive  officers  of the  Company  prior  to the  execution  of the  PureSoft
Agreement; (2) paid PureSoft's "landlord," Colcord Properties LLC ("Colcord"), a
limited  liability  company  of  which  one  of  the  defendants  is  a  member,
approximately $53,000 of the Company's funds for eight months advance rental and
a security deposit equal to two months of rent,  without disclosing the interest
of the  defendant  in Colcord;  (3) entered into a lease with  Colcord,  without
disclosing all material facts concernint the least to the executive  officers of
the Company;  (4) paid Colcord an additional  $23,539 for "office build out" and
"office  wiring,"  which were not required by or even  referenced  in the lease,
without the authorization or approval of the executive  officers of the Company;
(5) paid themselves each a "bonus," without the authorization or approval of the
executive  officers of the  Company;  (6) paid a salary of $4,500 a month to the
spouse  of one of the  defendants  for  "accounting  services";  and (7) did not
disclose a warehouse  lease to the executive  officers of the Company,  by which
the Company was obligated to pay above market rates to an entity owned by one of
the  defendants.  The Complaint  contains  claims for breach of fiduciary  duty,
breach  of  contract,   conversion,  and  declaratory  relief  relating  to  the
employment  contracts,  the lease with  Colcord  and the  warehouse  lease.  The
defendants deny the allegations in the Complaint.

Subsequently, a Canadian company known as National Healthcare Manufacturing
Corporation ("National") contacted the Company and alleged that the formulas for
several of the products marketed by PureSoft and sold to the Company under the
PureSoft Agreement were misappropriated from National by one of the defendants,
who previously worked for National. The Company is involved in ongoing
negotiations with National to resolve the issues raised in National's
allegations.

The Company is  considering  a special  investigation  of the  activities of the
defendants  during  the  time  that  they  were  employees  of the  Company  and
responsible for the operations of PureSoft.


Item 2. Changes in Securities and Use of Proceeds

On March 29, 2001, the Company  entered into a stock purchase  agreement with an
individual who is a director of the Company to purchase  3,149,558 common shares
for a purchase  price of  $1,000,000.  The total  purchase  price  consisted  of
$400,000 paid on March 29, 2001 and a $600,000  non-interest  bearing promissory
note  consisting  of a  $400,000  payment  due on April 29,  2001 and a $200,000
payment due on May 29, 2001. The promissory note was collateralized by 1,889,735
shares  of  common  stock.  In  May  2001,  the  director  delivered  marketable
securities  having a market  value of $403,720 to the Company in payment for the
$400,000 due on April 29, 2001 and the Company issued 1,259,823 of the 1,889,735
shares held as  collateral.  The  Company has  released  the  director  from the
obligation  to pay the  remaining  $200,000  due under the  promissory  note and
cancelled the associated common shares.

On June 6, 2001, the Company  entered into a stock  purchase  agreement with the
same  director  to  purchase  8,006,869  common  shares for a purchase  price of
$1,000,000.  The total purchase  price  consisted of $500,000 to be paid on June
15,  2001 and  $500,000  to be paid on July 15,  2001.  On June  18,  2001,  the
director  delivered  marketable  securities having a market value of $497,520 to
the  Company in payment of the  $500,000  due on June 15,  2001 and the  Company
issued 50 percent of the 8,006,869 shares under the agreement. On July 23, 2001,
the director delivered  marketable  securities having a market value of $244,530
to the Company  towards  payment of the $500,000 due on July 15, 2001. On August
16, 2001, the director delivered marketable  securities having a market value of
$213,359  towards  payment of the $500,000 due on July 15, 2001.  The  remaining
$42,111   promissory  note  payment  has  been  classified  as  a  common  stock
subscription  receivable  in the  accompanying  condensed  consolidated  balance
sheet.


                                       14

<PAGE>

Item 5.  Other Information

In February 2001, John L. Theler resigned as the Company's Chief Financial
Officer to pursue other interests. Until a new CFO is named, Randall L. Hales,
the Company's Chief Executive Officer, will act as CFO.

In March 2001, Gary L. Crittenden resigned as a member of the Company's board of
directors and audit committee chair due to personal scheduling constraints.

In April 2001, Edward B. Walker, PhD resigned as a member of the Company's board
of directors.

In May 2001, Douglas R. Warren,  Frank A. Cereska, Dan C. Jorgensen and Peter J.
Sundwall Jr., MD all resigned as members of the Company's board of directors.


Item 6. 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(1)
   2.2          Purchase  Agreement  dated as of March 15,  2000  among the
                Registrant  and  David  Wilich,  Frank Wilich, Jr., Gene Dubois
                and PureSoft Solutions, LLC, a New Hampshire limited liability
                company(7)
   3.1          Articles of Incorporation(2)
   3.2          Bylaws(2)
   3.3          Amendment  to  Articles  of  Incorporation   changing
                name to First Scientific, Inc. and effecting a forward stock
                split(1)
   10.1         Non-qualified Stock Option Agreement with Jerral R. Pulley(3)
   10.2         Non-qualified Stock Option Agreement with Peter Sundwall,M.D.(3)
   10.3         1998 Stock Incentive Plan(4)
   10.4         Agreement with Weldon Phillips(5)
   10.5         Employment Agreement with Randy Hales(5)
   10.6         Consulting Agreement with Jerral R. Pulley(5)
   10.7         Consulting Agreement with Edward Walker(5)
   10.8         Exclusive License and Supply Agreement with Convatec
                (Confidential Testament Requested for Certain Portions)(6)
   10.9         Employment Agreement with David Wilich(7)
   10.10        Stock Options Agreement with David Wilich, Frank Wilich and Gene
                Dubois(6)

        -------------------
     (1)     Incorporated by reference to the same-numbered exhibit to the Form
             8-K filed with the Securities and Exchange Commission October 2,
             1998, by First Scientific.
     (2)     Incorporated by reference to the same-numbered exhibit to the
             Company's Registration Statement on Form 10-SB, file No. 0-24378.
     (3)     Incorporated by reference to the same-numbered exhibit to the Form
             10-QSB filed with the Securities and Exchange Commission November
             16, 1998.
     (4)     Incorporated by reference from Quarterly Report on Form 10-QSB,
             filed on June 15, 1999.
     (5)     Incorporated by reference to the same numbered exhibit to the form
             10-QSB filed November 16, 1999.
     (6)     Incorporated by reference from Amended Quarter Report on Form
             10/QSB/A filed on March 8, 2000.
     (7)     Incorporated by reference from Report on Form 8-K, filed on March
             30, 2000.

(b)      Reports of Form 8-K
None.


                                       15


<PAGE>


                                   SIGNATURES


In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                        FIRST SCIENTIFIC, INC.
                                              Registrant


DATED: August 20, 2001                   By:    /s/ Randall L. Hales
                                             -----------------------------------

                                            Randall L. Hales, CEO, President and
                                            Principal Accounting Officer