<PAGE>

                                  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 September 30, 2000
                         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 21,045,436 shares of common stock, $.001 par value, outstanding as of
November 14, 2000.







<PAGE>




                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                                   FORM 10-QSB


                 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000

                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

                                                                            Page
Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets (Unaudited) as of
               September 30, 2000 and December 31, 1999........................3

         Condensed Consolidated Statements of Operations and Comprehensive
         Loss  (Unaudited)  for the Three and Nine Months Ended  September
         30,  2000 and 1999 and for the  Cumulative  Period from April 30,
         1990    (Date    of    Inception)     through    September    30,
         2000..................................................................4

         Condensed  Consolidated  Statements of Cash Flows (Unaudited) for
         the Nine  Months  Ended  September  30, 2000 and 1999 and for the
         Cumulative Period from April 30, 1990 (Date of Inception) through
         September 30, 2000....................................................5

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

Item 2.  Management's Discussion and Analysis or Plan of Operation............13


                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings...................................................22

Item 2.  Changes in Securities and Use of Proceeds............................22

Item 6.  Exhibits and Reports on Form 8-K.....................................23

Signatures    ................................................................25


<PAGE>




                         PART I -- FINANCIAL INFORMATION
                          Item 1. Financial Statements

                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   September 30,    December 31,
                                                                                            2000            1999
                                                                                 ---------------   -------------
ASSETS
Current Assets:
<S>                                                                              <C>               <C>
     Cash                                                                        $     2,702,510   $     207,934
     Available-for-sale marketable securities                                             10,997          94,811
     Accounts receivable, net                                                            183,411          94,933
     Inventory                                                                           177,748          35,262
     Prepaid expenses and other assets                                                    70,585          46,551
                                                                                 ----------------  --------------
         Total Current Assets                                                          3,145,251         479,491
                                                                                 ----------------  --------------
Property and Equipment:
     Equipment                                                                           550,917         173,532
     Leasehold improvements                                                               81,419          10,229
     Less: Accumulated depreciation and amortization                                     (75,396)        (27,016)
                                                                                 ---------------   --------------
         Net Property and Equipment                                                      556,940         156,745
                                                                                 ----------------  --------------
Goodwill and Other Intangible Assets, net                                              1,149,292          18,750
                                                                                 ----------------  -------------
Other Assets                                                                                  --          34,883
                                                                                 ---------------   -------------
Notes Receivable - Related Party                                                           7,861           7,000
                                                                                 ---------------   -------------
                                                                                 $     4,859,344   $     696,869
                                                                                 ================  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Promissory note                                                             $       100,000   $          --
     Member interest purchase obligation                                                 190,000              --
     Capital lease obligation, current portion                                            15,100           8,850
     Note payable                                                                             --          19,590
     Accounts payable                                                                    367,776         123,352
     Accrued liabilities                                                                 178,567          30,660
                                                                                 ---------------   -------------
         Total Current Liabilities                                                       851,443         182,452
                                                                                 ---------------   --------------
Capital Lease Obligation, net of current portion                                          32,871          14,197
                                                                                 ---------------   --------------
Commitments and Contingencies (see note 7)
Stockholders' Equity:
     Convertible redeemable  preferred stock series 2000-A,  $1,000 stated value
         per share;  4,500 shares  authorized;  4,000 shares outstanding in 2000
         (aggregate liquidation preference
         of $ 4,081,444)                                                               3,681,444              --
     Common stock, $0.001 par value; 50,000,000 shares authorized,
         21,045,436 shares outstanding in 2000 and 20,219,770 shares
         outstanding in 1999                                                              21,045          20,220
     Additional paid-in capital                                                       12,978,783       7,001,564
     Deficit accumulated during the development stage                                (12,608,497)     (6,231,062)
     Deferred compensation                                                               (97,745)       (273,599)
     Unrealized loss on investments in marketable securities                                  --         (16,903)
                                                                                 ---------------   -------------
         Total Stockholders' Equity                                                    3,975,030         500,220
                                                                                 ---------------   -------------
                                                                                 $     4,859,344   $     696,869
                                                                                 ===============   =============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.
                                       3

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                            Cumulative. from
                                                                                                             April 30, 1990
                                                                                                                (Date of
                                                  For the Three Months           For the Nine Months           Inception)
                                                  Ended September 30,            Ended September 30,             Through
                                              ----------------------------- -------------------------------
                                                   2000           1999           2000            1999         September 30,
                                                                                                                  2000
                                              --------------- ------------- --------------- --------------- ------------------
<S>                                           <C>             <C>           <C>             <C>                <C>
Revenues                                      $    226,489    $   303,784   $    383,108    $    426,083       $   1,172,735
Cost of Revenues                                   126,804         49,650        220,597          73,947             523,473
                                              --------------- ------------- --------------- --------------- ------------------
   Gross Profit                                     99,685        254,134        162,511         352,136             649,262
                                              --------------- ------------- --------------- --------------- ------------------
Operating Expenses:
   Selling, general and administrative           1,399,426        600,638      3,095,537       1,126,647           5,599,424
   Research and development                         97,046         25,983        218,834          42,091           4,303,366
                                              --------------- ------------- --------------- --------------- ------------------
     Total Operating Expenses                    1,496,472        626,621      3,314,371       1,168,738           9,902,790
                                              --------------- ------------- --------------- --------------- ------------------
Loss from Operations                            (1,396,787)      (372,487)    (3,151,860)       (816,602)         (9,253,528)
Other Income (Expense):
   Interest income                                  38,094          6,993         61,044          28,163             108,369
   Interest expense                                 (6,221)        (1,212)       (18,995)         (3,564)           (117,248)
   Realized loss on available-for-sale
     marketable securities                         (25,530)      (140,346)      (100,717)       (140,346)           (241,064)
                                              --------------- ------------- --------------- --------------- ------------------
     Total Other Income (Expense), net               6,343       (134,565)       (58,668)       (115,747)           (249,943)
                                              --------------- ------------- --------------- --------------- ------------------
Loss before Income Taxes                        (1,390,444)      (507,052)    (3,210,528)       (932,349)         (9,503,471)
Income Tax Benefit                                      --             --             --              --              61,881
                                              --------------- ------------- --------------- --------------- ------------------
Net Loss                                        (1,390,444)      (507,052)    (3,210,528)       (932,349)         (9,441,590)
Preferred Stock Dividends                        1,026,986             --      3,166,907              --           3,166,907
                                              --------------- ------------- --------------- --------------- ------------------
Net Loss Attributable to Common Stockholders
                                              $ (2,417,430)   $  (507,052)  $ (6,377,435)   $   (932,349)   $    (12,608,497)
                                              =============== ============= =============== =============== ==================

Basic and Diluted Net Loss Per Common Share
                                              $      (0.12)   $     (0.03)  $      (0.31)   $      (0.05)
                                              =============== ============= =============== ===============

Weighted Average Number of Common Shares
   Outstanding                                  20,988,556     20,205,748      20,740,192     20,181,895
                                              =============== ============= =============== ===============

Other Comprehensive Loss:
  Net loss                                    $ (1,390,444)   $  (507,052)  $ (3,210,528)   $   (932,349)   $     (9,441,590)
  Unrealized holding loss on available for
     sale marketable securities                         --         (4,857)            --        (133,070)                 --
  Losses included in net income                         --        140,346         16,903         140,346                  --
                                              --------------- ------------- --------------- --------------- ------------------
Comprehensive Loss                            $ (1,390,444)   $  (371,563)  $ (3,193,622)   $   (925,073)   $     (9,441,590)
                                              =============== ============= =============== =============== ==================
</TABLE>

     See accompanying notes to condensed consolidated financial statements.
                                       4


<PAGE>

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


<TABLE>
<CAPTION>
                                                                                                                   Cumulative. from
                                                                                                                 April 30, 1990
                                                                  For the Nine Months Ended                    (Date of Inception)
                                                                             September  30,
                                                                                                                   Through
                                                                            2000                 1999           September 30, 2000
                                                               ---------------------    ------------------      -------------------
Cash Flows From Operating Activities
<S>                                                            <C>                       <C>                     <C>
     Net loss                                                  $    (3,210,528)          $    (932,349)          $      (9,441,590)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Loss on marketable securities                                 100,717                 140,346                     241,063
         Depreciation and amortization                                 148,955                  84,336                     292,221
         Loss on disposal of property and equipment                      5,573                     --                        5,573
         Amortization of deferred compensation                         329,657                 158,470                     722,752
         Interest income on related-party note receivable                 (861)                    --                         (861)
         Common stock issued for services                                  --                   80,000                     124,355
         Common stock issued for purchased research
               and development                                             --                      --                    3,766,440
         Deferred income tax benefit                                       --                      --                      (61,881)
         Changes in assets and liabilities, net of effects
               of the acquisition of
              PureSoft Solutions L.L.C.:
                Accounts receivable, net                               (65,642)               (261,175)                   (160,575)
                Notes receivable                                       (50,000)                     --                     (50,000)
                Inventory                                             (123,684)                (23,367)                   (158,946)
                Prepaid expenses and other assets                      (24,035)                (44,003)                    (40,586)
                Other assets                                            34,884                     --                           --
                Accounts payable                                       211,139                  27,843                     334,491
                Accrued liabilities                                     47,462                 (32,540)                    210,552
                                                               ---------------           --------------          ------------------
     Net Cash Used In Operating Activities                          (2,596,363)               (820,983)                 (4,216,992)
                                                               ---------------           --------------          ------------------

Cash Flows From Investing Activities
     Purchases of property and equipment                              (405,951)                (53,716)                   (561,766)
     Proceeds from sale of marketable securities                           --                      --                      302,847
     Acquisition of PureSoft Solutions L.L.C.,
         net of cash acquired                                         (202,422)                    --                     (202,422)
     Issuance of related-party notes receivable                           --                       --                       (7,000)
                                                               ---------------           --------------          ------------------
     Net Cash Used In Investing Activities                            (608,373)                (53,716)                   (468,341)
                                                               ---------------           --------------          ------------------

Cash Flows From Financing Activities
     Proceeds from issuance of notes payable                               --                    4,336                     275,565
     Principal payments on notes payable                              (369,590)                    --                     (525,565)
     Proceeds from loans from stockholders                                 --                      --                      158,934
     Principal payments on loans from stockholders                         --                  (10,323)                    (86,500)
     Principal payments on capital lease obligations                    (8,097)                 (2,947)                    (12,994)
     Proceeds from the issuance of Series 2000-A
         preferred stock                                             3,600,000                      --                   3,600,000
     Proceeds from issuance of common stock                          2,476,999                      --                   3,978,403
                                                               ----------------          --------------          ------------------
     Net Cash Provided By (Used In) Financing Activities             5,699,312                  (8,934)                  7,387,843
                                                               ---------------           --------------          ------------------
Net Increase (Decrease) In Cash                                      2,494,576                (883,633)                  2,702,510
Cash At Beginning Of The Period                                        207,934               1,286,299                         --
                                                               ---------------           --------------          ------------------
Cash At End Of The Period                                      $     2,702,510           $     402,666           $       2,702,510
                                                               ==================        ==============          ==================
</TABLE>



     See accompanying notes to condensed consolidated financial statements.
                                        5

<PAGE>

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



<TABLE>
<CAPTION>
                                                                                             Cumulative, from
                                                                                              April 30, 1990
                                                                                           (Date of Inception)
                                                      Nine Months Ended September 30,            through
                                                   --------------------------------------
                                                          2000                1999         September 30, 2000
                                                   -------------------- -----------------  -------------------
Supplemental disclosure of cash flow information:
<S>                                                <C>                  <C>                <C>
   Cash paid during the period for interest        $        18,739      $         3,564    $       116,994

Supplemental Schedule of Non-cash Investing and
   Financing Activities:
   Acquisition of PureSoft Solutions L.L.C.
   Fair value of assets acquired                         1,735,509                   --
   Liabilities assumed                                     183,730                   --
   Promissory note                                         450,000                   --
   Fair value of stock options issued                      261,779                   --
   Member interest purchase obligation                     190,000                   --
   Noncash preferred stock dividends                     2,139,921                   --
   Equipment acquired through capital lease
        obligations                                         33,021                8,063
   Stock option grants at less than fair value             193,750                   --
   Stock option forfeitures                                 39,947                   --
</TABLE>





     See accompanying notes to condensed consolidated financial statements.
                                        6

<PAGE>


                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
              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, 1999.

Operating  results for the three and nine months ended  September 30, 2000,  are
not necessarily  indicative of the operating results to be expected for the year
ending December 31, 2000.

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 September 30, 2000 and 1999, there were outstanding  common stock equivalents
to purchase 6,223,135 and 1,785,000 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.

NOTE 2-ACQUISITION OF PURESOFT SOLUTIONS L.L.C.

On March  15,  2000,  the  Company  entered  into an  agreement  (the  "PureSoft
Agreement")  to acquire  100% of the common stock of PureSoft  Solutions  L.L.C.
("PureSoft"),  a  New  Hampshire  limited  liability  company  involved  in  the
manufacturing and distribution of health care products. As consideration for the
purchase,  the Company agreed to pay $50,000 in cash,  issue options to purchase
87,534  common  shares at $0.01 per share and issue a $450,000  promissory  note
bearing  interest at 8.5% per year with a $300,000 payment due on June 15, 2000,
and  quarterly  payments  of $50,000  thereafter  through  March 15,  2001.  The
PureSoft  Agreement  also  provides  that the Company will, on April 1, 2001 and
April 1, 2002, issue additional shares of its common stock. The number of shares
to be issued is contingent  upon the net income before income taxes of PureSoft,
and shall vary in proportion to any over- or  under-achievements  of established
performance milestones stated in the PureSoft Agreement, provided, however, that
the  aggregate  minimum  number  of shares  have a market  value of no less than
$190,000.  In  addition,  the  PureSoft  Agreement  required the Company to make
working capital advances of $300,000 to PureSoft on each of March 15, 2000, June
15, 2000, and August 15, 2000. All of the working capital  advances were paid on
or before the respective due dates and the $50,000 quarterly  payments have been
made on schedule.

The  acquisition  was  accounted for as a purchase.  The purchase  price totaled
$1,551,779  and consisted  of: (1) $50,000 paid in cash to the PureSoft  owners;
(2) $600,000 paid in cash as working capital advances prior to the purchase; (3)
the $450,000  promissory note; (4) stock options with an estimated fair value of
$261,779  based on the  Black-Scholes  option-pricing  model;  and (5)  $190,000
representing the minimum earn-out value of shares to be awarded.  The contingent
shares which may be issued based upon  PureSoft's  achieving  specific levels of
net income  before  income  taxes will be recorded at the then fair value of the
shares issued and will,  accordingly,  affect the recorded amount of goodwill to
the extent the fair value of the shares issued exceeds $190,000.


                                       7
<PAGE>

The purchase price  allocations to tangible  assets  included  $447,578 of cash,
$22,836 of accounts  receivable,  $18,802 of inventory,  and $14,911 of property
and equipment.  The purchase price  allocations to liabilities  assumed included
$33,285 of accounts  payable,  $100,445 of accrued  liabilities,  and $50,000 of
related party notes payable. The excess of the purchase price over the estimated
fair value of the net assets  acquired was  $1,231,382  and was  capitalized  as
goodwill to be amortized over five years.

The following  unaudited pro forma financial statement data presents the results
of operations of the Company as if the  acquisition  of PureSoft had occurred at
the  beginning of each  period.  The pro forma  results  have been  prepared for
comparative  purposes only and do not purport to be indicative of future results
or what would have occurred had the  acquisitions  been made at the beginning of
the applicable period.

<TABLE>
<CAPTION>
                                                     For the Nine Months Ended  September 30,
                                                     ---------------------------------------------
                                                              2000                   1999
                                                     ------------------ --------------------------
<S>                                                  <C>                <C>
                 Revenues                            $      432,955     $      497,950
                 Net loss                                (3,442,728)        (1,125,204)
                 Net loss  attributable  to  common
                   stockholders                          (6,609,635)        (1,125,204)
                 Basic  and  diluted  net  loss per
                    common share                              (0.32)             (0.06)
</TABLE>


NOTE 3-AVAILABLE-FOR-SALE MARKETABLE SECURITIES

The Company has investments in marketable equity securities which are classified
as  available-for-sale  securities.  During the nine months ended  September 30,
2000, the market value of these  securities  declined and management  determined
that the decline was other than temporary. Accordingly, a write-down of $100,717
was recorded to adjust the carrying value of the securities to market value.

NOTE 4-SERIES 2000-A CONVERTIBLE PREFERRED STOCK (See NOTE 8)

On May 16, 2000,  the Company  executed a  securities  purchase  agreement  (the
"Purchase  Agreement") with Aspen Capital  Resources,  L.L.C. (the "Purchaser"),
whereby  the  Purchaser  purchased  1,000  shares of Series  2000-A  Convertible
Preferred  Stock  ("Series  2000-A  Preferred   Stock")  from  the  Company  for
$1,000,000,  less a 10%  placement  fee payable to the  Purchaser,  and warrants
exercisable for the purchase of additional shares of Company common stock by the
Purchaser.  The Purchase Agreement  provided for the subsequent  purchases of an
additional  3,000  shares of Series  2000-A  Preferred  Stock with  accompanying
warrants for an aggregate purchase price of $3,000,000. The first two subsequent
closings were for $1,000,000 each and the last two for $500,000 each, all of the
foregoing  being subject to a similar 10% placement fee to the Purchaser.  As of
September  30,  2000,  the  Company  had issued  4,000  shares of Series  2000-A
Preferred  Stock in exchange for net proceeds of  $3,600,000.  The placement fee
was netted against the proceeds receivable under the Purchase Agreement.

Redemption  - The  Company  may be  requested  to redeem all of the  outstanding
shares of Series 2000-A  Preferred  Stock at a price equal to 125% of the stated
value per share,  plus  accrued  and unpaid  dividends  and  penalties,  if any,
through the date of  redemption if (i) an event of  noncompliance  as defined in
the Purchase  Agreement  occurs, or (ii) if, after the first date upon which the
Company's  common stock is quoted in the NASDAQ Stock Market  System or reported
on the National  Association of Securities Dealers' ("NASD") OTC Bulletin Board,
the average of the closing quoted bid prices for the Company's  common stock for
22  consecutive  trading days, is less than or equal to $2.00 per share.  If the
Company opts not to make the redemption  payment when due, dividends will accrue
on all outstanding  Series 2000-A  Preferred Stock from and after the redemption
date at 21% per year until paid in full and the conversion price will be reduced
by $0.50 per share.


                                       8
<PAGE>





Under the Purchase  Agreement,  an event of noncompliance shall have occurred if
(i) the Company  fails to pay on any  dividend  payment  date the full amount of
dividends then accrued,  (ii) the Company fails to make any  redemption  payment
which it is required to make,  (iii) the Company  breaches or otherwise fails to
perform or observe any material  provision of the Purchase  Agreement,  and such
failure  is not cured  within 15 days  after the  occurrence  thereof,  (iv) any
representation or warranty contained in the Purchase Agreement or required to be
furnished to any holder is false or misleading in any material respect,  (v) the
Company  makes an  assignment  for the benefit of creditors or admits in writing
its  inability  to pay its debts  generally  as they  become  due,  or an order,
judgment or decree is entered  adjudicating  the Company  bankrupt or insolvent,
(vi) any material  provision of the Purchase Agreement shall at any time for any
reason be declared  to be null and void,  (vii) (A) any  registration  statement
required to be filed by the Company and declared effective by the Securities and
Exchange  Commission  (the "SEC")  pursuant to the Purchase  Agreement shall not
become  effective  as provided in the  Purchase  Agreement  or shall cease to be
effective,  (B) the SEC shall issue any stop order suspending the  effectiveness
under the Securities Act of any registration  statement  required to be filed by
the Company and declared effective by the SEC pursuant to the Purchase Agreement
or any state securities  commission suspends the qualification of the securities
covered  thereby for offering for sale in any  jurisdiction,  (C) any proceeding
for purposes of either (A) or (B) above is initiated, or (D) after September 18,
2000 the common stock is  suspended  from trading on or the price for the common
stock is not quoted or reported on the NASDAQ Stock Market  System or the NASD's
OTC Bulletin  Board,  (viii) the Company at any time shall not have the required
number of reserved and available authorized but unissued shares of common stock,
or (ix) the occurrence of any material adverse change in the business, condition
(financial  or  otherwise),  prospects,  or results of operations of the Company
taken as a whole.

As of September 30, 2000, the Company's  common stock was not listed and trading
on the NASDAQ Stock Market System or the NASD OTC Bulletin Board.  The purchaser
has waived any penalty or event of non-compliance resulting from such event. The
Company's common stock began trading on the NASD's OTC Bulletin Board on October
26, 2000.

After May 16,  2001,  the  Company  has the  right to redeem  all or some of the
outstanding shares of Series 2000-A Preferred Stock by paying 125% of the stated
value per share,  plus  accrued  and unpaid  dividends  and  penalties,  if any,
through the date of redemption.  However,  the Company may not redeem any Series
2000-A  Preferred  Stock unless all dividends  accrued on all of the outstanding
Series 2000-A Preferred Stock through the immediately preceding dividend payment
date have been paid in full. If the Company does not make the redemption payment
when due, dividends will accrue on all outstanding Series 2000-A Preferred Stock
from and after the redemption  date at 21% until paid in full and the conversion
price will be reduced by $0.50 per share.

Conversion - Holders of Series 2000-A  Preferred  Stock have the right,  but not
the obligation to convert the stated value and any accrued and unpaid  dividends
thereon into shares of the  Company's  common stock by dividing the stated value
of such shares to be converted  together  with any accrued but unpaid  dividends
thereon by the conversion  price (the "Conversion  Price"),  which is 80% of the
average of the three  lowest  closing bid prices for the common  stock quoted on
the NASDAQ  Stock  Market  System or reported on the NASD's OTC  Bulletin  Board
during the 15 trading days preceding the conversion  date,  subject to a maximum
Conversion Price of $4.00 per share and a minimum  Conversion Price of $2.00 per
share,  subject to  adjustment.  As of September  30, 2000,  no shares of Series
2000-A Preferred Stock had been converted into common stock. Upon the occurrence
of an event of noncompliance (see above), the minimum Conversion Price shall not
be subject to any limitations.

On or after  November  16,  2001,  the  Company may require the holder of Series
2000-A  Preferred Stock to convert all of the shares of Series 2000-A  Preferred
Stock into shares of common  stock by  delivering  to the holder  30-days  prior
written notice of the exercise of this right.

During  the nine  months  ended  September  30,  2000,  the  Company  recorded a
preferred stock dividend of $1,000,000 related to the 20% discount on the shares
of Series 2000-A Preferred Stock then convertible.  Additionally,  on August 17,
2000,  the  Company  agreed to allow the holder of the Series  2000-A  Preferred
Stock to convert up to  $1,000,000  in stated value of Series  2000-A  Preferred
Stock at a  Conversion  Price of $2.00  per  share and  recorded  an  additional
preferred stock dividend of $250,000 related to this reduction in the Conversion
Price.


                                       9
<PAGE>

Adjustment of the  Conversion  Price - If after May 16, 2000, the Company issues
or sells any shares of common  stock or grants any rights or options to purchase
common stock or any stock or other  securities  convertible into or exchangeable
for common stock or issues or sells any  convertible  securities,  and the value
per share for such common stock  issuable is less than the fair market value per
share,  the  Conversion  Price of the Series 2000-A  Preferred  Stock is reduced
according to a formula defined in the Purchase Agreement.

Registration  Rights  - On June  14,  2000,  the  Company  filed a  registration
statement to  registration  statement  with the SEC to register or qualify under
applicable  federal and state securities laws the resale by the Purchaser of (i)
all  shares of common  stock  issuable  upon  conversion  of the  Series  2000-A
Preferred  Shares,  (ii) all of the shares of the  common  stock  issuable  upon
exercise  of the related  warrants,  and (iii) all of the  additional  shares of
common  stock  issued or issuable  to the  Purchaser  pursuant  to the  Purchase
Agreement. The registration statement was declared effective on July 7, 2000.

If such  registration  statement  ceases to remain  effective as provided in the
Purchase  Agreement,  the Company is required to issue to the  Purchaser on such
date and on every date which is 30 days or a multiple  thereof  after such date,
until such  registrations or qualifications  shall become effective,  additional
shares of common  stock  equal in number to 5% of the total  number of shares of
common stock issued or issuable upon  conversion  of all issued and  outstanding
Series 2000-A  Preferred  Shares and to cause the resale of all such  additional
shares to be included in the registrations or qualifications.

Dividends - The holder of Series 2000-A  Preferred  Stock is entitled to receive
cumulative  dividends  equal  to 8% per  year and  payable  quarterly  provided,
however, that if there is an event of noncompliance,  as defined in the Purchase
Agreement,  the holder of Series  2000-A  Preferred  Stock  shall be entitled to
receive cumulative  dividends equal to 21% per year. The holder of Series 2000-A
Preferred  Stock at its option may elect to receive payment of dividends in cash
or in shares of the Company's common stock at the Conversion Price.

The Company has recorded $81,444 in Series 2000-A Preferred Stock dividends from
the date of  issue  through  September  30,  2000.  This is in  addition  to the
$1,250,000 of dividends  related a beneficial  conversion  feature of the Series
2000-A Preferred Stock.

Warrants - The Purchase  Agreement  provides  for the issuance of Series  2000-A
Warrants (the  "Warrants")  in  connection  with each closing of the purchase of
Series 2000-A Preferred Stock.  Each Warrant entitles the holder to purchase one
share of common stock at an exercise price of $3.00 per share.

The number of Warrants  ultimately  issued by the Company will vary depending on
the  Conversion  Price  of the  Series  2000-A  Preferred  Stock.  The  Purchase
Agreement  provides that the ultimate  number of warrants shall be determined by
dividing the  aggregate  stated value of the shares of Series  2000-A  Preferred
Stock by the Conversion Price determined as of the earlier of November 16, 2001,
the date on which  the  holder of the  Warrants  converts  its  shares of Series
2000-A  Preferred  Stock,  or the date on which  the  shares  of  Series  2000-A
Preferred Stock are redeemed.

The Warrants are  exercisable  from June 1, 2001, or earlier upon the occurrence
of an event of default,  as defined in the  Warrants,  or a change in control of
the  Company,  and may be exercised  through May 16, 2004.  The Warrants are not
subject to early redemption by the Company.

The Company  recorded  $1,835,463 in Series  2000-A  Preferred  Stock  dividends
related to the potential  issuance of the Warrants  during the nine months ended
September 30, 2000.  This is in addition to the $1,250,000 of dividends  related
to a beneficial  conversion  feature and the $81,444  related to the 8% dividend
rate.

Voting  Rights  - Each  share  of  Series  2000-A  Preferred  Stock  issued  and
outstanding  shall  have the  number of votes  equal to the  number of shares of
common  stock  into  which  the  share  of  Series  2000-A  Preferred  Stock  is
convertible.

Reserved Shares - The Company is required to reserve shares of its common stock,
solely for the purpose of issuance upon the conversion of all outstanding Series
2000-A Preferred Stock.



                                       10
<PAGE>

NOTE 5-STOCKHOLDERS' EQUITY

During the nine months ended  September  30,  2000,  the Company  received  cash
proceeds  in the  amount of  $2,476,999  under the terms of a private  placement
offering by issuing 825,666 investment units, at $3.00 per unit. Each investment
unit  consists  of one share of the  Company's  common  stock  and a warrant  to
purchase  one-half share of common stock at $4.50 per share. The warrants expire
on December 31, 2001.

NOTE 6-STOCK OPTIONS

During the nine months ended  September 30, 2000,  the Company  granted  461,000
options  under its 1998 Stock  Option  Plan.  Of the  options  granted,  155,000
options  have an exercise  price of $1.75 per share and 306,000  options have an
exercise price of $3.00 per share.  The options are exercisable as follows:  40%
on the date of grant and 60% over a two-year period from the date of grant.  All
options  granted  during this period  expire on the fifth  anniversary  of their
respective  grant date. The Company recorded  $193,750 of deferred  compensation
related to options that have exercise  prices below the fair market value on the
date of grant.  Amortization  of deferred  compensation  amounted to $85,858 and
$329,657  for the  three  months  and nine  months  ended  September  30,  2000,
respectively.

Additionally,  the Company  granted  options to purchase 87,534 common shares at
$0.01 per share in connection  with the  acquisition of PureSoft.  These options
are exercisable immediately and have no expiration date.

NOTE 7-COMMITMENTS AND CONTINGENCIES

Operating  Lease - On March 1, 2000,  the Company  added  additional  office and
laboratory  space and  renegotiated  the lease for its current office space. The
new  lease is for a  three-year  term,  is  renewable  on an annual  basis,  and
currently  requires lease  payments of $7,325 per month with annual  escalations
equal to the lesser of the change in the consumer price index or 5%.

Capital  Lease - On June 2,  2000,  the  Company  entered  into a capital  lease
arrangement for telephone and computer  equipment in the amount of $33,021.  The
lease is for a five-year term and requires lease payments of $735 per month.

Legal  Contingencies-  An individual  asserted a claim against the Company under
the terms of an agreement  allegedly  entered into in 1991,  which  purported to
promise  shares  of  common  stock  of Linco  Industries,  Inc.  ("Linco"),  the
predecessor of the Company prior to its reorganization on September 15, 1998, if
certain conditions were met by the individual in representing Linco to potential
customers.  Management  believes  that the alleged  1991  agreement is no longer
enforceable  because the  conditions  were not met within a reasonable  time and
because the  individual  failed to fulfill other  material  terms of the alleged
1991 agreement.  Because of the claim, Linco's founders and the Company filed an
action for declaratory  judgment seeking a determination that the individual has
no legal  rights  against the  Company.  The  individual  responded  and filed a
counterclaim that he had "fully performed" under the 1991 agreement. The parties
are conducting  discovery.  Management  believes that the individual's  claim is
without merit and should not  ultimately  result in any liability to the Company
based on  sufficient  defenses  and an  indemnification  obligation  of  Linco's
founders in favor of the Company.

NOTE 8-SUBSEQUENT EVENT-SERIES 2000-A PREFERRED STOCK

On November 13, 2000, the Company  entered into an agreement (the  "Modification
Agreement") with Aspen Capital Resources, L.L.C. (the "Purchaser"),  whereby the
Purchaser  and the  Company  agreed  to  modify  certain  terms of a  securities
purchase  agreement  dated May 16, 2000 (the "Purchase  Agreement")  pursuant to
which  the  Purchaser  purchased  4,000  shares  of  Series  2000-A  convertible
Preferred  Stock  ("Series  2000-A  Preferred   Stock")  from  the  Company  for
$4,000,000,  and  warrants  (the  "Warrants")  exercisable  for the  purchase of
additional  shares of Company  common stock by the purchaser.  As modified,  the
Purchase  Agreement  provides that the Company may be requested to redeem all of
the outstanding shares of Series 2000-A Preferred Stock at a price equal to 125%
of the stated value per share,  plus accrued and unpaid dividends and penalties,
if any,  through  the date of  redemption  if (i) an event of  noncompliance  as
defined in the Purchase  Agreement occurs;  (ii) if, after January 31, 2001, the
average of the closing  quoted bid prices for the Company's  common stock for 22
consecutive  trading days is less than or equal to $1.00 per share,  or (iii) if
(A) the aggregate balance of the Company's cash and cash equivalent  accounts is
less  than  $1,000,000  at any time  after  November  13,  2000 and on or before
January 31, 2001 and (B) at


                                       11
<PAGE>

any time  thereafter,  the average  closing bid price for the  Company's  common
stock for the  previous  22  consecutive  trading  days is less than or equal to
$1.00 per share.  If the Company  opts not to make the  redemption  payment when
due, dividends will accrue on all outstanding Series 2000-A Preferred Stock from
and  after  the  redemption  date at 21% per  year  until  paid in full  and the
conversion price will be reduced by $0.50 per share.

Under the terms of the Modification  Agreement,  the Company waived its right to
redeem after May 16, 2001 all or some of the outstanding shares of Series 2000-A
Preferred  Stock by paying 125% of the stated value per share,  plus accrued and
unpaid dividends and penalties, if any, through the date of redemption.

Further,  as modified,  the Purchase  Agreement  grants holders of Series 2000-A
Preferred Stock the right to convert the stated value and any accrued and unpaid
dividends  thereon  into shares of the  Company's  common  stock by dividing the
stated value of such shares to be converted together with any accrued but unpaid
dividends  thereon by the conversion  price,  which is 80% of the average of the
three lowest  closing bid prices for the common stock quoted on the Nasdaq Stock
Market system or reported on the NASD's OTC Bulletin Board during the 15 trading
days preceding the conversion  date,  subject to a maximum  conversion  price of
$1.20 per share.

On June 14, 2000,  the Company filed a  registration  statement  with the SEC to
register  or qualify  under  applicable  federal and state  securities  laws the
resale by the Purchaser of (i) shares of common stock  issuable upon  conversion
of the  Series  2000-A  Preferred  Shares,  (ii) all of the shares of the common
stock  issuable  upon  exercise  of the related  warrants,  and (iii) all of the
additional  shares of common stock issued or issuable to the Purchaser  pursuant
to the Purchase Agreement.  The registration statement was declared effective on
July 7,  2000.  The  Company  has  agreed  to file  an  additional  registration
statement  covering  additional  shares  issuable upon  conversion of the Series
2000-A  Preferred  Shares as a result of reducing the maximum  conversion  price
from $4.00 to $1.20.

Finally,  as  modified,  the  Purchase  Agreement  provides  for the issuance of
2,000,000  Warrants.  Each Warrant  entitles the holder to purchase one share of
common  stock  at an  exercise  price of  $2.25  per  share.  The  Warrants  are
exercisable  from November 1, 2001,  or earlier upon the  occurrence of an event
of default,  as defined in the Warrants,  or a change in control of the Company,
and may be exercised through May 16, 2004. The Warrants are not subject to early
redemption by the Company.


                                       12
<PAGE>


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 September 30, 2000 for the three and nine months then
ended together with the December 31, 1999 annual financial statements.  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.

Plan of Operation

First  Scientific  is a  development  stage  company  engaged  in the  research,
development  and   commercialization   of   patent-pending   topical  skin  care
technologies. The Company sells its technologies and products, both domestically
and internationally,  into four active market segments,  including  professional
health  care,  food  service,   hospitality,  and  janitorial/sanitation,   with
additional  target  market  opportunities  in the retail and health and  fitness
segments. The Company's operations are located in Utah and New Hampshire.

The Company maintains information  concerning its business,  its products,  test
results,  media  coverage and  investor  relations  at the  Company's  Web site,
www.firstscientific.com.  Additional information on PureSoft Solutions L.L.C. is
located at  www.puresoft.ws.  Reference  to these  websites is not  intended and
should not be construed as incorporation of information contained on these sites
as part of this report.

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

Antimicrobial Technology - MicrobNZ(TM)

MicrobNZ(TM)  is a highly  effective,  long-lasting  and  fast-acting  treatment
against a broad spectrum of pathogens,  including Escherichia coli,  Pseudomonas
aeruginosa,   Staphylococcus   aureus  and  drug  resistant   bacteria  such  as
Methicillin  resistant  Staphylococcus  aureus (MRSA) and  Vancomycin  resistant
Enterococcus  (VRE).  MicrobNZ(TM)  does not  contain  irritating  or  degrading
ingredients and improves and moisturizes the skin with use.

MicrobNZ(TM)  formulation has exceeded the Food and Drug Administration  ("FDA")
protocols required for classification as a Health Care Personnel Handwash and as
a  First-Aid  Antiseptic  (21  CFR  333).  Additionally,  MicrobNZ  can be  used
facility-wide  and is appropriate for patient,  public,  and staff  handwashing.
First  Scientific  markets its  antimicrobial  technology under the MicrobNZ(TM)
brand.

Skin Healing Technology

First Scientific's  markets its patent-pending,  skin healing technology for the
treatment and prevention of rashes.  The Company has demonstrated  shelf life of
its  products  for  periods in excess of two years.  This  technology  meets FDA
requirements for an over-the-counter  drug product.  First Scientific  currently
supplies a version of this  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.


                                       13
<PAGE>

Outlook

The cash  requirements  of First  Scientific  through  the end of 2000 will vary
based  upon a number  of  factors  including,  but not  limited  to,  continuing
research  and  development  levels,  increased  market  development,  facilities
enhancement,  additional  personnel,  travel,  and  other  expenses  related  to
projected  growth.  Management  believes  existing cash and cash  generated from
anticipated sales will be sufficient to meet the Company's  obligations  through
at least the end of 2000.

Product  research and  development  is an ongoing  process at First  Scientific.
Existing products are continuously being refined and new technology developed to
solve unmet market needs. Ongoing spending is anticipated in future quarters for
lab equipment, furniture and fixtures.

The Company's  existing  facilities and equipment are projected to be sufficient
to meet most of its growth needs.  However,  should First Scientific be required
to perform  expanded  testing or  manufacturing  for its customers or should the
Company undertake in-house  manufacturing,  additional capital would be required
to  establish  such  activities.  Management  is  actively  pursuing  additional
outsourced manufacturing capacity for its products.

First Scientific  benefits from an experienced  executive  management team and a
board of directors  comprising  several  senior-level  business  executives  and
medical professionals.  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.

In late September  2000, the Company  shipped  $304,000 of product to Alliegence
Corporation,  a large  distributor that serves the professional  medical market.
The shipments were initial stocking orders of MicrobNZ(TM)  technology products.
The Company  anticipates  that these  shipments are the beginning of a stream of
shipments  that  will  represent  significant  sales  in the  coming  year.  The
transaction terms were FOB destination and contained certain rights of return by
the distributor. As a result of these terms and the lack of sell-through history
for MicrobNZ(TM)  products,  the recording of sales was deferred. The Company is
in the process of training the distributor's sales force and expect that process
to be completed in November 2000 with product sell-through  beginning before the
end of 2000.  Subsequent to September 30, 2000, the Company has received payment
for 80% of the above mentioned shipments.

Recent Developments

PureSoft  Solutions L.L.C.  Acquisition - On March 15, 2000, the Company entered
into an agreement (the "PureSoft Agreement") to acquire 100% of the common stock
of PureSoft  Solutions L.L.C.  ("PureSoft"),  a New Hampshire  limited liability
company involved in the  manufacturing and distribution of health care products.
As  consideration  for the purchase,  the Company agreed to pay $50,000 in cash,
issue  options to purchase  87,534  common shares at $0.01 per share and issue a
$450,000  promissory  note  bearing  interest  at 8.5% per year with a  $300,000
payment due on June 15,  2000,  and  quarterly  payments  of $50,000  thereafter
through March 15, 2001.  The PureSoft  Agreement  also provides that the Company
will, on April 1, 2001 and April 1, 2002, issue additional  shares of its common
stock.  The  number of shares to be  issued is  contingent  upon the net  income
before  income taxes of PureSoft,  and shall vary in  proportion to any over- or
under-achievements of established  performance milestones stated in the PureSoft
Agreement, provided, however, that the aggregate minimum number of shares have a
market  value of no less than  $190,000.  In addition,  the  PureSoft  Agreement
required the Company to make working capital advances of $300,000 to PureSoft on
each of March 15, 2000,  June 15, 2000,  and August 15, 2000. All of the working
capital advances were paid on or before the respective due dates and the $50,000
quarterly payments have been made on schedule.

The  significance of the PureSoft  Agreement for the Company is the introduction
of new  markets  into  which  the  Company  can  sell,  and  which  can  provide
significant revenue to the Company in future periods. Additionally, PureSoft has
introduced the Company to manufacturers whose pricing is considerably lower than
previously   attained  by  the  Company.   Development  of  such   manufacturing
relationships  may provide  greater  operating  margins and may give the Company
negotiating  leverage regarding pricing with other manufacturers with whom it is
dealing now or in the future.


                                       14
<PAGE>

Tianjin  ZhongZin  Pharmaceutical  Group  Corporation  Limited - The Company has
signed a letter of intent with Tianjin ZhongZin Pharmaceutical Group Corporation
Limited of Tianjin,  the People's Republic of China ("Tianjin").  This letter of
intent describes due diligence,  product surveys, market feasibility studies and
product registration  preparation to be performed which may serve as a basis for
a joint venture between the Company and Tianjin for the sale and distribution of
the Company's  products in China. There can be no assurance that the information
obtained pursuant to the letter of intent will be favorable or will serve as the
basis of forming a joint  venture or other  agreement  between  the  Company and
Tianjin.

Results of Operations

Three  months  ended  September  30,  2000  compared to the three  months  ended
September 30, 1999

During the three months ended September 30, 2000, the Company recorded  revenues
of  $226,489,  reflecting  a decrease of $77,295,  or 25%,  compared to the same
period in the previous year.  Revenues in 1999 included  $156,337 from contracts
to qualify and test  products for  customers.  In 2000 the source of revenue has
shifted to the sale of product, representing 100% of total revenues.

Selling,  general and  administrative  expenses were $1,399,426 and $600,638 for
the three months ended September 30, 2000 and 1999,  respectively,  representing
an increase of $798,788,  or 133%.  The  increase  over the prior year is due to
growth and  development  related  expenses  including an increase in  marketing,
sales and travel  related  expenses of $149,000 and the  expansion of operations
reflecting  increases in payroll  expenses of $404,000 due to the addition of an
enhanced sales force in the year 2000 as well as the addition of  administrative
support personnel;  and consulting,  legal,  investor relations and professional
fees of $156,000.

The Company  incurred  research and  development  expenses of $97,046 during the
three months  ended  September  30,  2000,  an increase of $71,063 from the same
period in the  previous  year.  This  increase  was due to the  expansion of the
Company's  testing  facilities,  including  a new lab and  personnel  to support
testing  at  the  lab.  Management  anticipates  an  increase  in  research  and
development  expenses  for future  periods as the  Company  expands  its product
offerings.

The Company  recorded a loss of $25,530  related to the decrease in market value
of its marketable  securities.  The value has decreased  consistently  since the
time of purchase  and the Company  has no reason to believe  that the  near-term
prospects of the issuer will change.

Net interest  income was $31,873 and $5,781 for the three months ended September
30, 2000 and 1999,  respectively.  This represents an increase of $26,092 and is
due  primarily to interest  income that the Company has  realized  from a higher
cash balance generated from issuance of common and preferred stock.

Nine months ended September 30, 2000 compared to the nine months ended September
30, 1999

During the nine months ended September 30, 2000, the Company  recorded  revenues
of  $383,108,  reflecting  a decrease of $42,975,  or 10%,  compared to the same
period in the previous year.  Revenues in 1999 included  $271,247 from contracts
to qualify and test products for customers,  while in 2000 the source of revenue
has shifted to the sale of product, representing 79% of total revenues.

Selling,  general and administrative expenses were $3,095,537 and $1,126,647 for
the nine months ended September 30, 2000 and 1999, respectively, representing an
increase of $1,968,890,  or 175%, from 1999 to 2000. The increase over the prior
year is due to growth and development  related expenses in marketing,  sales and
travel of $271,000.  and the  expansion of  operations  reflecting  increases in
payroll  expenses of $775,000 due to the addition of an enhanced  sales force in
the year 2000 as well as administrative support personnel, non-cash compensation
charges  associated  with  the  issuance  of  stock  options  of  $171,000,  and
consulting, legal, and professional fees of $439,000.


                                       15
<PAGE>




The Company  incurred  research and development  expenses of $218,834 during the
nine months  ended  September  30, 2000,  an increase of $176,743  from the same
period in the  previous  year.  This  increase  was due to the  expansion of the
Company's  testing  facilities  including a new lab and personnel to support the
testing  at  the  lab.  Management  anticipates  an  increase  in  research  and
development  expenses  for future  periods as the  Company  expands  its product
offerings.

The Company  recorded a loss of $100,717 related to the decrease in market value
of its marketable  securities.  The value has decreased  consistently  since the
time of purchase  and the Company  has no reason to believe  that the  near-term
prospects of the issuer will change.

Net interest  income was $42,049 and $24,599 for the nine months ended September
30, 2000 and 1999,  respectively.  This represents an increase of $17,450 and is
due  primarily to interest  income that the Company has  realized  from a higher
cash balance  generated from issuance of common and preferred  stock,  partially
offset by interest expense incurred through capital lease  obligations that have
been entered into primarily for office equipment.

Liquidity and Capital Resources

First  Scientific had cash of $2,702,510 as of September 30, 2000,  representing
an increase of  $2,494,576  from  December  31,  1999.  Working  capital,  as of
September  30, 2000,  increased  to  $2,293,808  compared to working  capital of
$297,039 at  December  31,  1999.  The  Company  had an  accumulated  deficit of
$12,608,497 at September 30, 2000, most of which had been funded out of proceeds
received from the issuance of stock.

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 $2,596,363 in operating  activities  during the nine
months  ended  September  30,  2000.  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 will rely  primarily on cash
balances  and the sale of its  equity  and debt  securities  to  satisfy  future
capital  requirements  until such time as  sufficient  revenue  can  satisfy its
operating 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.

PureSoft  Solutions L.L.C.  Acquisition - On March 15, 2000, the Company entered
into an agreement (the "PureSoft Agreement") to acquire 100% of the common stock
of PureSoft  Solutions L.L.C.  ("PureSoft"),  a New Hampshire  limited liability
company involved in the  manufacturing and distribution of health care products.
As  consideration  for the purchase,  the Company agreed to pay $50,000 in cash,
issue  options to purchase  87,534  common shares at $0.01 per share and issue a
$450,000  promissory  note  bearing  interest  at 8.5% per year with a  $300,000
payment due on June 15,  2000,  and  quarterly  payments  of $50,000  thereafter
through March 15, 2001.  The PureSoft  Agreement  also provides that the Company
will, on April 1, 2001 and April 1, 2002, issue additional  shares of its common
stock.  The  number of shares to be  issued is  contingent  upon the net  income
before  income taxes of PureSoft,  and shall vary in  proportion to any over- or
under-achievements of established  performance milestones stated in the PureSoft
Agreement, provided, however, that the aggregate minimum number of shares have a
market  value of no less than  $190,000.  In addition,  the  PureSoft  Agreement
required the Company to make working capital advances of $300,000 to PureSoft on
each of March 15, 2000,  June 15, 2000,  and August 15, 2000. All of the working
capital advances were paid on or before the respective due dates and the $50,000
quarterly payments have been made on schedule.

The  acquisition  was  accounted for as a purchase.  The purchase  price totaled
$1,551,779  and consisted  of: (1) $50,000 paid in cash to the PureSoft  owners;
(2) $600,000 paid in cash as working capital advances prior to the purchase; (3)
the $450,000  promissory note; (4) stock options with an estimated fair value of
$261,779  based on the  Black-Scholes  option-pricing  model;  and (5)  $190,000
representing the minimum earn-out value of shares to be awarded.  The contingent
shares which may be issued based upon  PureSoft's  achieving  specific levels of
net income  before  income  taxes will be recorded at the then fair value of the
shares issued and will,  accordingly,  affect the recorded amount of goodwill to
the extent the fair value of the shares issued exceeds $190,000.


                                       16
<PAGE>

The purchase price  allocations to tangible  assets  included  $447,578 of cash,
$22,836 of accounts  receivable,  $18,802 of inventory,  and $14,911 of property
and equipment.  The purchase price  allocations to liabilities  assumed included
$33,285 of accounts  payable,  $100,445 of accrued  liabilities,  and $50,000 of
related party notes payable. The excess of the purchase price over the estimated
fair value of the net assets  acquired was  $1,231,382  and was  capitalized  as
goodwill to be amortized over five years.

Series 2000-A Preferred Stock

On May 16, 2000,  the Company  executed a  securities  purchase  agreement  (the
"Purchase  Agreement") with Aspen Capital  Resources,  L.L.C. (the "Purchaser"),
whereby  the  Purchaser  purchased  1,000  shares of Series  2000-A  Convertible
Preferred  Stock  ("Series  2000-A  Preferred   Stock")  from  the  Company  for
$1,000,000,  less a 10%  placement  fee payable to the  Purchaser,  and warrants
exercisable for the purchase of additional shares of Company common stock by the
Purchaser.  The Purchase Agreement  provided for the subsequent  purchases of an
additional  3,000  shares of Series  2000-A  Preferred  Stock with  accompanying
warrants for an aggregate purchase price of $3,000,000. The first two subsequent
closings were for $1,000,000 each and the last two for $500,000 each, all of the
foregoing  being subject to a similar 10% placement fee to the Purchaser.  As of
September  30,  2000,  the  Company  had issued  4,000  shares of Series  2000-A
Preferred  Stock in exchange for net proceeds of  $3,600,000.  The placement fee
was netted against the proceeds receivable under the Purchase Agreement.

The Company may be requested to redeem all of the  outstanding  shares of Series
2000-A  Preferred  Stock at a price equal to 125% of the stated value per share,
plus accrued and unpaid  dividends and  penalties,  if any,  through the date of
redemption if (i) an event of noncompliance as defined in the Purchase Agreement
occurs,  or (ii) if, after the first date upon which the Company's  common stock
is  quoted  in the  NASDAQ  Stock  Market  System or  reported  on the  National
Association of Securities  Dealers'  ("NASD") OTC Bulletin Board, the average of
the closing quoted bid prices for the Company's  common stock for 22 consecutive
trading days, is less than or equal to $2.00 per share.  If the Company opts not
to  make  the  redemption  payment  when  due,  dividends  will  accrue  on  all
outstanding  Series 2000-A Preferred Stock from and after the redemption date at
21% per year  until  paid in full and the  conversion  price  will be reduced by
$0.50 per share.

Under the Purchase  Agreement,  an event of noncompliance shall have occurred if
(i) the Company  fails to pay on any  dividend  payment  date the full amount of
dividends then accrued,  (ii) the Company fails to make any  redemption  payment
which it is required to make,  (iii) the Company  breaches or otherwise fails to
perform or observe any material  provision of the Purchase  Agreement,  and such
failure  is not cured  within 15 days  after the  occurrence  thereof,  (iv) any
representation or warranty contained in the Purchase Agreement or required to be
furnished to any holder is false or misleading in any material respect,  (v) the
Company  makes an  assignment  for the benefit of creditors or admits in writing
its  inability  to pay its debts  generally  as they  become  due,  or an order,
judgment or decree is entered  adjudicating  the Company  bankrupt or insolvent,
(vi) any material  provision of the Purchase Agreement shall at any time for any
reason be declared  to be null and void,  (vii) (A) any  registration  statement
required to be filed by the Company and declared effective by the Securities and
Exchange  Commission  (the "SEC")  pursuant to the Purchase  Agreement shall not
become  effective  as provided in the  Purchase  Agreement  or shall cease to be
effective,  (B) the SEC shall issue any stop order suspending the  effectiveness
under the Securities Act of any registration  statement  required to be filed by
the Company and declared effective by the SEC pursuant to the Purchase Agreement
or any state securities  commission suspends the qualification of the securities
covered  thereby for offering for sale in any  jurisdiction,  (C) any proceeding
for purposes of either (A) or (B) above is initiated, or (D) after September 18,
2000 the common stock is  suspended  from trading on or the price for the common
stock is not quoted or reported on the NASDAQ Stock Market  System or the NASD's
OTC Bulletin  Board,  (viii) the Company at any time shall not have the required
number of reserved and available authorized but unissued shares of common stock,
or (ix) the occurrence of any material adverse change in the business, condition
(financial  or  otherwise),  prospects,  or results of operations of the Company
taken as a whole.

As of September 30, 2000, the Company's  common stock was not listed and trading
on the NASDAQ Stock Market System or the NASD OTC Bulletin Board.  The purchaser
has waived any penalty or event of non-compliance resulting from such event. The
Company's common stock began trading on the NASD's OTC Bulletin Board on October
26, 2000.



                                       17
<PAGE>

After May 16,  2001,  the  Company  has the  right to redeem  all or some of the
outstanding shares of Series 2000-A Preferred Stock by paying 125% of the stated
value per share,  plus  accrued  and unpaid  dividends  and  penalties,  if any,
through the date of redemption.  However,  the Company may not redeem any Series
2000-A  Preferred  Stock unless all dividends  accrued on all of the outstanding
Series 2000-A Preferred Stock through the immediately preceding dividend payment
date have been paid in full. If the Company does not make the redemption payment
when due, dividends will accrue on all outstanding Series 2000-A Preferred Stock
from and after the redemption  date at 21% until paid in full and the conversion
price will be reduced by $0.50 per share.

Holders of Series 2000-A  Preferred Stock have the right, but not the obligation
to convert the stated  value and any accrued and unpaid  dividends  thereon into
shares of the Company's common stock by dividing the stated value of such shares
to be converted  together with any accrued but unpaid  dividends  thereon by the
conversion  price (the "Conversion  Price"),  which is 80% of the average of the
three lowest  closing bid prices for the common stock quoted on the NASDAQ Stock
Market System or reported on the NASD's OTC Bulletin Board during the 15 trading
days preceding the conversion  date,  subject to a maximum  Conversion  Price of
$4.00 per share and a minimum  Conversion  Price of $2.00 per share,  subject to
adjustment. As of September 30, 2000, no shares of Series 2000-A Preferred Stock
had  been  converted  into  common  stock.  Upon the  occurrence  of an event of
noncompliance  (see above), the minimum Conversion Price shall not be subject to
any limitations.

On or after  November  16,  2001,  the  Company may require the holder of Series
2000-A  Preferred Stock to convert all of the shares of Series 2000-A  Preferred
Stock into shares of common  stock by  delivering  to the holder  30-days  prior
written notice of the exercise of this right.

During  the nine  months  ended  September  30,  2000,  the  Company  recorded a
preferred stock dividend of $1,000,000 related to the 20% discount on the shares
of Series 2000-A Preferred Stock then convertible.  Additionally,  on August 17,
2000,  the  Company  agreed to allow the holder of the Series  2000-A  Preferred
Stock to convert up to  $1,000,000  in stated value of Series  2000-A  Preferred
Stock at a  Conversion  Price of $2.00  per  share and  recorded  an  additional
preferred stock dividend of $250,000 related to this reduction in the Conversion
Price.

If after May 16, 2000, the Company issues or sells any shares of common stock or
grants  any rights or options  to  purchase  common  stock or any stock or other
securities  convertible into or exchangeable for common stock or issues or sells
any  convertible  securities,  and the value per  share  for such  common  stock
issuable is less than the fair market value per share,  the Conversion  Price of
the Series 2000-A  Preferred Stock is reduced  according to a formula defined in
the Purchase Agreement.

On June 14, 2000,  the Company filed a  registration  statement to  registration
statement with the SEC to register or qualify under applicable federal and state
securities  laws the resale by the  Purchaser  of (i) all shares of common stock
issuable upon conversion of the Series 2000-A Preferred Shares,  (ii) all of the
shares of the common stock issuable upon exercise of the related  warrants,  and
(iii) all of the  additional  shares of common  stock  issued or issuable to the
Purchaser  pursuant to the Purchase  Agreement.  The registration  statement was
declared effective on July 7, 2000.

If such  registration  statement  ceases to remain  effective as provided in the
Purchase  Agreement,  the Company is required to issue to the  Purchaser on such
date and on every date which is 30 days or a multiple  thereof  after such date,
until such  registrations or qualifications  shall become effective,  additional
shares of common  stock  equal in number to 5% of the total  number of shares of
common stock issued or issuable upon  conversion  of all issued and  outstanding
Series 2000-A  Preferred  Shares and to cause the resale of all such  additional
shares to be included in the registrations or qualifications.

The holder of Series 2000-A  Preferred  Stock is entitled to receive  cumulative
dividends equal to 8% per year and payable quarterly provided,  however, that if
there is an event of noncompliance,  as defined in the Purchase  Agreement,  the
holder of Series 2000-A Preferred Stock shall be entitled to receive  cumulative
dividends equal to 21% per year. The holder of Series 2000-A  Preferred Stock at
its option may elect to receive payment of dividends in cash or in shares of the
Company's common stock at the Conversion Price.



                                       18
<PAGE>

The Company has recorded $81,444 in Series 2000-A Preferred Stock dividends from
the date of  issue  through  September  30,  2000.  This is in  addition  to the
$1,250,000 of dividends  related a beneficial  conversion  feature of the Series
2000-A Preferred Stock.

The Purchase  Agreement provides for the issuance of Series 2000-A Warrants (the
"Warrants")  in  connection  with each closing of the purchase of Series  2000-A
Preferred  Stock.  Each  Warrant  entitles  the holder to purchase  one share of
common stock at an exercise price of $3.00 per share.

The number of Warrants  ultimately  issued by the Company will vary depending on
the  Conversion  Price  of the  Series  2000-A  Preferred  Stock.  The  Purchase
Agreement  provides that the ultimate  number of warrants shall be determined by
dividing the  aggregate  stated value of the shares of Series  2000-A  Preferred
Stock by the Conversion Price determined as of the earlier of November 16, 2001,
the date on which  the  holder of the  Warrants  converts  its  shares of Series
2000-A  Preferred  Stock,  or the date on which  the  shares  of  Series  2000-A
Preferred Stock are redeemed.

The Warrants are  exercisable  from June 1, 2001, or earlier upon the occurrence
of an event of default,  as defined in the  Warrants,  or a change in control of
the  Company,  and may be exercised  through May 16, 2004.  The Warrants are not
subject to early redemption by the Company.

The Company  recorded  $1,835,463 in Series  2000-A  Preferred  Stock  dividends
related to the potential  issuance of the Warrants  during the nine months ended
September 30, 2000.  This is in addition to the $1,250,000 of dividends  related
to a beneficial  conversion  feature and the $81,444  related to the 8% dividend
rate.

Each share of Series 2000-A  Preferred Stock issued and  outstanding  shall have
the number of votes equal to the number of shares of common stock into which the
share of Series 2000-A Preferred Stock is convertible.

The Company is required to reserve  shares of its common  stock,  solely for the
purpose  of  issuance  upon the  conversion  of all  outstanding  Series  2000-A
Preferred Stock.

On November 13, 2000, the Company  entered into an agreement (the  "Modification
Agreement") with Aspen Capital Resources, L.L.C. (the "Purchaser"),  whereby the
Purchaser  and the  Company  agreed  to  modify  certain  terms of a  securities
purchase  agreement  dated May 16, 2000 (the "Purchase  Agreement")  pursuant to
which  the  Purchaser  purchased  4,000  shares  of  Series  2000-A  convertible
Preferred  Stock  ("Series  2000-A  Preferred   Stock")  from  the  Company  for
$4,000,000,  and  warrants  (the  "Warrants")  exercisable  for the  purchase of
additional  shares of Company  common stock by the purchaser.  As modified,  the
Purchase  Agreement  provides that the Company may be requested to redeem all of
the outstanding shares of Series 2000-A Preferred Stock at a price equal to 125%
of the stated value per share,  plus accrued and unpaid dividends and penalties,
if any,  through  the date of  redemption  if (i) an event of  noncompliance  as
defined in the Purchase  Agreement occurs;  (ii) if, after January 31, 2001, the
average of the closing  quoted bid prices for the Company's  common stock for 22
consecutive  trading days is less than or equal to $1.00 per share,  or (iii) if
(A) the aggregate balance of the Company's cash and cash equivalent  accounts is
less  than  $1,000,000  at any time  after  November  13,  2000 and on or before
January 31, 2001 and (B) at any time  thereafter,  the average closing bid price
for the Company's  common stock for the previous 22 consecutive  trading days is
less  than or equal to $1.00  per  share.  If the  Company  opts not to make the
redemption  payment when due,  dividends will accrue on all  outstanding  Series
2000-A  Preferred Stock from and after the redemption date at 21% per year until
paid in full and the conversion price will be reduced by $0.50 per share.

Under the terms of the Modification  Agreement,  the Company waived its right to
redeem after May 16, 2001 all or some of the outstanding shares of Series 2000-A
Preferred  Stock by paying 125% of the stated value per share,  plus accrued and
unpaid dividends and penalties, if any, through the date of redemption.

Further,  as modified,  the Purchase  Agreement  grants holders of Series 2000-A
Preferred Stock the right to convert the stated value and any accrued and unpaid
dividends  thereon  into shares of the  Company's  common  stock by dividing the
stated value of such shares to be converted together with any accrued but unpaid
dividends  thereon by the conversion  price,  which is 80% of the average of the
three lowest  closing bid prices for the common stock quoted on the Nasdaq Stock
Market system or reported on the NASD's OTC Bulletin Board during the 15 trading
days preceding the conversion  date,  subject to a maximum  conversion  price of
$1.20 per share.


                                       19
<PAGE>

On June 14, 2000,  the Company filed a  registration  statement  with the SEC to
register  or qualify  under  applicable  federal and state  securities  laws the
resale by the Purchaser of (i) shares of common stock  issuable upon  conversion
of the  Series  2000-A  Preferred  Shares,  (ii) all of the shares of the common
stock  issuable  upon  exercise  of the related  warrants,  and (iii) all of the
additional  shares of common stock issued or issuable to the Purchaser  pursuant
to the Purchase Agreement.  The registration statement was declared effective on
July 7,  2000.  The  Company  has  agreed  to file  an  additional  registration
statement  covering  additional  shares  issuable upon  conversion of the Series
2000-A  Preferred  Shares as a result of reducing the maximum  conversion  price
from $4.00 to $1.20.

Finally,  as  modified,  the  Purchase  Agreement  provides  for the issuance of
2,000,000  Warrants.  Each Warrant  entitles the holder to purchase one share of
common  stock  at an  exercise  price of  $2.25  per  share.  The  Warrants  are
exercisable  from November 1,  2001, or earlier upon the  occurrence of an event
of default,  as defined in the Warrants,  or a change in control of the Company,
and may be exercised through May 16, 2004. The Warrants are not subject to early
redemption by the Company.

Common stock and warrants-  During the nine months ended September 30, 2000, the
Company  received cash  proceeds in the amount of $2,477,000 by issuing  825,666
investments units, at $3.00 per unit. Each investment unit consists of one share
of the Company's common stock and a warrant to purchase one-half share of common
stock at $4.50 per share. The warrants expire December 31, 2001.

Stock  options  -  During  the nine  months  ended  September  30,  2000,  First
Scientific  granted  461,000  options  under the 1998 Stock Option Plan.  Of the
options  granted,  155,000 options have an exercise price of $1.75 per share and
306,000  options  have an  exercise  price of $3.00 per share.  The  options are
exercisable as follows:  40% on the date of grant and 60% over a two-year period
from the date of grant.  All options  granted  during this period  expire on the
fifth anniversary of its respective grant date. The Company recorded $193,750 of
deferred  compensation  related to options that have  exercise  prices below the
estimated fair market value on the measurement date.  Additionally,  the Company
granted  options  to  purchase  87,534  common  shares  at  $0.01  per  share in
connection  with the  acquisition  of PureSoft.  These  options are  exercisable
immediately and have no expiration date.

Marketable  Securities  - The  Company  has  investments  in  marketable  equity
securities  that are  classified as  available-for-sale  securities.  During the
three  months ended  September  30,  2000,  the market  value of the  securities
declined and management  determined  that the decline was other than  temporary.
Accordingly, a write-down of $25,530was recorded to adjust the carrying value of
the securities to their market value.

Operating  Lease - On March 1, 2000,  the Company  entered  into an agreement to
renegotiate  its present lease and to lease an  additional  5,300 square feet of
space adjacent to its existing space to house its expanded testing, research and
development and sales/marketing functions. Contracts for furniture, fixtures and
equipment were entered into during the current quarter to adequately outfit this
space.  The  Company  presently  has no plans  to add  additional  research  and
development or office facilities.

Capital  Lease - On June 2,  2000,  the  Company  entered  into a capital  lease
arrangement for telephone and computer  equipment in the amount of $33,021.  The
lease is for a five years and requires lease payments of $735 per month.

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.


                                       20
<PAGE>

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.



                                       21
<PAGE>


PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

An  individual  asserted  a claim  against  the  Company  under  the terms of an
agreement  allegedly  entered into in 1991, which purported to promise shares of
common stock of Linco Industries, Inc. ("Linco"), the predecessor of the Company
prior to its  reorganization  on September 15, 1998, if certain  conditions were
met by the individual in representing Linco to potential  customers.  Management
believes that the alleged 1991  agreement is no longer  enforceable  because the
conditions  were not met within a  reasonable  time and because  the  individual
failed to fulfill other material terms of the alleged 1991 agreement. Because of
the claim,  Linco's  founders  and the Company  filed an action for  declaratory
judgment seeking a determination that the individual has no legal rights against
the Company.  The  individual  responded  and filed a  counterclaim  that he had
"fully  performed"  under  the  1991  agreement.   The  parties  are  conducting
discovery.  Management believes that the individual's claim is without merit and
should not ultimately result in any liability to the Company based on sufficient
defenses and an  indemnification  obligation of Linco's founders in favor of the
Company.

Item 2. Changes in Securities and Use of Proceeds

(a)  Amendment  to the  Rights  of the  Holders  of  Series  2000-A  Convertible
Preferred Stock.

On November 13, 2000, the Company  entered into an agreement (the  "Modification
Agreement") with Aspen Capital Resources, L.L.C. (the "Purchaser"),  whereby the
Purchaser  and the  Company  agreed  to  modify  certain  terms of a  securities
purchase  agreement  dated May 16, 2000 (the "Purchase  Agreement")  pursuant to
which  the  Purchaser  purchased  4,000  shares  of  Series  2000-A  convertible
Preferred  Stock  ("Series  2000-A  Preferred   Stock")  from  the  Company  for
$4,000,000,  and  warrants  (the  "Warrants")  exercisable  for the  purchase of
additional  shares of Company  common stock by the purchaser.  As modified,  the
Purchase  Agreement  provides that the Company may be requested to redeem all of
the outstanding shares of Series 2000-A Preferred Stock at a price equal to 125%
of the stated value per share,  plus accrued and unpaid dividends and penalties,
if any,  through  the date of  redemption  if (i) an event of  noncompliance  as
defined in the Purchase  Agreement occurs;  (ii) if, after January 31, 2001, the
average of the closing  quoted bid prices for the Company's  common stock for 22
consecutive  trading days is less than or equal to $1.00 per share,  or (iii) if
(A) the aggregate balance of the Company's cash and cash equivalent  accounts is
less  than  $1,000,000  at any time  after  November  13,  2000 and on or before
January 31, 2001 and (B) at any time  thereafter,  the average closing bid price
for the Company's  common stock for the previous 22 consecutive  trading days is
less  than or equal to $1.00  per  share.  If the  Company  opts not to make the
redemption  payment when due,  dividends will accrue on all  outstanding  Series
2000-A  Preferred Stock from and after the redemption date at 21% per year until
paid in full and the conversion price will be reduced by $0.50 per share.

Under the terms of the Modification  Agreement,  the Company waived its right to
redeem after May 16, 2001 all or some of the outstanding shares of Series 2000-A
Preferred  Stock by paying 125% of the stated value per share,  plus accrued and
unpaid dividends and penalties, if any, through the date of redemption.

Further,  as modified,  the Purchase  Agreement  grants holders of Series 2000-A
Preferred Stock the right to convert the stated value and any accrued and unpaid
dividends  thereon  into shares of the  Company's  common  stock by dividing the
stated value of such shares to be converted together with any accrued but unpaid
dividends  thereon by the conversion  price,  which is 80% of the average of the
three lowest  closing bid prices for the common stock quoted on the Nasdaq Stock
Market system or reported on the NASD's OTC Bulletin Board during the 15 trading
days preceding the conversion  date,  subject to a maximum  conversion  price of
$1.20 per share.

On June 14, 2000,  the Company filed a  registration  statement  with the SEC to
register  or qualify  under  applicable  federal and state  securities  laws the
resale by the Purchaser of (i) shares of common stock  issuable upon  conversion
of the  Series  2000-A  Preferred  Shares,  (ii) all of the shares of the common
stock  issuable  upon  exercise  of the related  warrants,  and (iii) all of the
additional  shares of common stock issued or issuable to the Purchaser  pursuant
to the Purchase Agreement.  The registration statement was declared effective on
July 7,  2000.  The  Company  has  agreed  to file  an  additional  registration
statement  covering  additional  shares  issuable upon  conversion of the Series
2000-A  Preferred  Shares as a result of reducing the maximum  conversion  price
from $4.00 to $1.20.


                                       22
<PAGE>


Finally,  as  modified,  the  Purchase  Agreement  provides  for the issuance of
2,000,000  Warrants.  Each Warrant  entitles the holder to purchase one share of
common  stock  at an  exercise  price of  $2.25  per  share.  The  Warrants  are
exercisable  from November 1,  2001, or earlier upon the  occurrence of an event
of default,  as defined in the Warrants,  or a change in control of the Company,
and may be exercised through May 16, 2004. The Warrants are not subject to early
redemption by the Company.

(c)     Sales of Unregistered Securities

During the three months ended September 30, 2000,  First  Scientific sold 66,666
shares of common stock to one accredited investor for $200,000 in cash, or $3.00
per share,  pursuant to Rule 506 of  Regulation  D under the  Securities  Act of
1933, as amended.  The capital  contribution  was in  connection  with a private
placement  undertaken  by the  Company,  which  continues as of the date of this
Report.  The offer and sale of the shares of common stock  issued in  connection
with the private  placement was not registered under the Securities Act of 1933,
as  amended  (the  "Act"),  or under any  state  securities  "blue  sky" laws in
reliance upon exemptions from the  registration  provisions of the Act and those
laws for  transactions  involving  non-public  offers  and  sales of  restricted
securities to accredited  investors.  All shares sold in these  transactions are
restricted   securities  and  their  resale  is  subject  to  restrictions   and
limitations  under  applicable law.  Certificates  evidencing the shares sold to
these  investors  were  marked  with a  restrictive  legend and each  holder was
required to execute a representation  and warranty to the effect that the shares
were acquired for  investment  purposes and not with a view to  distribution  or
resale of the securities.


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,
          L.L.C., 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)
     10.10Stock  Options  Agreement  with David  Wilich,  Frank  Wilich and Gene
          Dubois.(6)
     27   Financial data schedule(8)
        -------------------

     (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.
     (8)  Filed herewith.


 (b)         Reports on Form 8-K

     A  report  on Form  8-K was  filed  on  March  31,  2000,  relating  to the
     acquisition of PureSoft  Solutions,  LLC, a New Hampshire limited liability
     company.

     A report on Form 8-K was  filed on May 31,  2000,  relating  to the sale to
     Aspen  Capital  Resources,  LLC, of shares of the  Company's  Series 2000-A
     Preferred Stock.

     A report on Form 8-K was filed on June 8,  2000,  and  amended  on June 14,
     2000,  amending the Form 8-K filed on March 30, 2000, and providing certain
     financial information required under Form 8-K.

     A report  on Form 8-K was filed on August 1,  2000,  relating  to  engaging
     Arthur Andersen LLP as independent public accountants.



<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: November 14, 2000            By: /s/ Randall L. Hales
                                       -----------------------------------------
                                        Randall L. Hales, CEO and President

DATED: November 14, 2000            By: /s/ John L. Theler
                                       -----------------------------------------
                                        John L. Theler, Vice President
                                        Finance/CFO (Principal
                                        Financial and Accounting Officer)