<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 June 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 20,978,770 shares of common stock, $.001 par value, outstanding as of
August 18, 2000.







<PAGE>


                     FIRST SCIENTIFIC, INC. AND SUBSIDIARIES
                                   FORM 10-QSB


                    THREE AND SIX MONTHS ENDED JUNE 30, 2000

                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

                                                                            Page

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets (Unaudited) - June 30, 2000
              and December 31, 1999............................................3

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

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

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

Item 2.  Management's Discussion and Analysis or Plan of Operation............12


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings....................................................18

Item 2.  Changes in Securities and Use of Proceeds............................18

Item 6.  Exhibits and Reports on Form 8-K.....................................18

Signatures    ................................................................20



<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>
                                                                                   June 30,         December 31,
                                                                                     2000               1999
                                                                                 ---------------   -------------
                                                       ASSETS
Current Assets
<S>                                                                              <C>               <C>
     Cash                                                                        $     3,120,494   $     207,934
     Available-for-sale marketable securities                                             36,526          94,811
     Accounts receivable, net                                                            113,183          94,933
     Inventory                                                                            71,116          35,262
     Prepaid expenses                                                                     13,710          46,551
                                                                                 ----------------  --------------
         Total Current Assets                                                          3,355,029         479,491
                                                                                 ----------------  --------------
Property and Equipment
     Equipment                                                                           336,873         173,532
     Leasehold improvements                                                               52,970          10,229
     Less: Accumulated depreciation and amortization                                     (46,808)        (27,016)
                                                                                 ---------------   --------------
         Net Property and Equipment                                                      343,035         156,745
                                                                                 ----------------  --------------
Goodwill and Other Intangible Assets, net                                              1,128,341          18,750
                                                                                 ----------------  -------------
Other Assets                                                                              34,750          34,883
                                                                                 ---------------   -------------
Notes Receivable - Related Party                                                           7,414           7,000
                                                                                 ---------------   -------------
                                                                                 $     4,868,569   $     696,869
                                                                                 ================  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
     Promissory note                                                             $       150,000   $          --
     Member interest purchase obligation                                                 106,083              --
     Capital lease obligation, current portion                                            18,394           8,850
     Note payable                                                                          6,807          19,590
     Accounts payable                                                                    256,079         123,352
     Accrued liabilities                                                                 118,161          30,660
                                                                                 ---------------   -------------
         Total Current Liabilities                                                       655,524         182,452
                                                                                 ---------------   --------------
Capital Lease Obligation, net of current portion                                          33,426          14,197
                                                                                 ---------------   --------------
Stockholders' Equity
     Convertible redeemable  preferred stock series 2000-A,  $1,000 stated value
         per share:  4,500 shares  authorized;  3,000 shares outstanding in 2000
         (aggregate liquidation preference
         of $3,013,333)                                                                2,713,333             --
     Common stock, $0.001 par value: 50,000,000 shares authorized;
         20,978,770 shares outstanding in 2000, and 20,219,770 shares
         outstanding in 1999                                                              20,979          20,220
     Additional paid-in capital                                                       11,859,923       7,001,564
     Deficit accumulated during the development stage                                (10,191,067)     (6,231,062)
     Deferred compensation                                                              (223,549)       (273,599)
     Unrealized loss on investments in marketable securities                                  --         (16,903)
                                                                                 ---------------   -------------
         Total Stockholders' Equity                                                    4,179,619         500,220
                                                                                 ---------------   -------------
                                                                                 $     4,868,569   $     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 Six Months           Inception)
                                                     Ended June 30,                 Ended June 30,               Through
                                              ----------------------------- -------------------------------
                                                   2000           1999           2000            1999         June 30, 2000
                                              --------------- ------------- --------------- --------------- ------------------
<S>                                           <C>             <C>           <C>             <C>                <C>
Revenues                                      $     91,444    $   121,929   $    156,619    $    122,299       $     946,246
Cost of Revenues                                    63,995         24,049         93,793          24,297             396,669
                                              --------------- ------------- --------------- --------------- ------------------
   Gross Profit                                     27,449         97,880         62,826          98,002             549,577
                                              --------------- ------------- --------------- --------------- ------------------
Operating Expenses:
   Selling, general and administrative             957,307        240,595      1,646,784         526,010           4,150,671
   Research and development                        118,872          9,846        171,115          16,108           4,255,647
                                              --------------- ------------- --------------- --------------- ------------------
     Total Operating Expenses                    1,076,179        250,441      1,817,899         542,118           8,406,318
                                              --------------- ------------- --------------- --------------- ------------------
Loss from Operations                            (1,048,730)      (152,561)    (1,755,073)       (444,116)         (7,856,741)
Other Income (Expense):
   Interest income                                  13,920          9,024         22,950          21,170              70,275
   Interest expense                                (11,020)        (1,187)       (12,773)         (2,351)           (111,027)
   Realized loss on available-for-sale
     marketable securities                         (75,188)            --        (75,188)             --            (215,534)
                                              --------------- ------------- --------------- --------------- ------------------
     Total Other Income (Expense), net             (72,288)         7,837        (65,011)         18,819            (256,286)
                                              --------------- ------------- --------------- --------------- ------------------
Loss before Income Taxes                        (1,121,018)      (144,724)    (1,820,084)       (425,297)         (8,113,027)
Income Tax Benefit                                      --             --             --              --              61,881
                                              --------------- ------------- --------------- --------------- ------------------
Net Loss                                        (1,121,018)      (144,724)    (1,820,084)       (425,297)         (8,051,146)
Preferred Stock Dividends                        2,139,921             --      2,139,921              --           2,139,921
                                              --------------- ------------- --------------- --------------- ------------------
Net Loss Attributable to Common Stockholders
                                              $ (3,260,939)   $  (144,724)  $ (3,960,005)   $   (425,297)   $    (10,191,067)
                                              =============== ============= =============== =============== ==================

Basic and Diluted Net Loss Per Common Share
                                              $      (0.16)   $     (0.01)  $      (0.19)   $      (0.02)
                                              =============== ============= =============== ===============

Weighted Average Number of Common Shares
   Outstanding                                  20,764,689     20,169,770     20,614,647      20,169,770
                                              =============== ============= =============== ===============

Other Comprehensive Loss:
  Net loss                                    $ (1,121,018)   $  (144,724)  $ (1,820,084)   $   (425,297)   $     (8,051,146)
  Unrealized holding loss on available for
     sale marketable securities                         --        (77,714)            --        (128,213)                --
  Losses included in net income                      1,205             --         16,903              --                 --
                                              --------------- ------------- --------------- --------------- ------------------
Comprehensive Loss                            $ (1,119,813)   $  (222,438)  $ (1,803,181)   $   (553,510)   $     (8,051,146)
                                              =============== ============= =============== =============== ==================
</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
                                                                                                     (Date of
                                                                  For the Six Months Ended           Inception)
                                                                           June 30,                   Through
                                                                   2000                1999         June 30, 2000
                                                               ----------------- -------------   ------------------
Cash Flows From Operating Activities
<S>                                                            <C>               <C>             <C>
     Net loss                                                  $    (1,820,084)  $    (425,297)  $      (8,051,146)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Loss on marketable securities                                  75,188             --              215,534
         Depreciation and amortization                                  57,392          55,605             200,658
         Loss on disposal of property and equipment                      5,573             --                5,573
         Amortization of deferred compensation                         243,800          30,968             636,895
         Interest income on related-party note receivable                 (414)            --                 (414)
         Common stock issued for services                                  --              --              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                                 4,586        (120,490)            (90,347)
                Inventory                                              (17,052)        (20,244)            (52,314)
                Prepaid expenses                                        32,841          16,539              16,290
                Other assets                                               133             --              (34,751)
                Accounts payable                                        99,442         (22,102)            222,794
                Accrued liabilities                                    (12,944)        (59,302)            150,146
                                                               ----------------  --------------  -----------------
         Net Cash Used In Operating Activities                      (1,331,539)       (544,323)         (2,952,168)
                                                               ---------------   --------------  -----------------

Cash Flows From Investing Activities
     Purchases of property and equipment                              (163,449)        (40,983)           (319,264)
     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                            (365,871)        (40,983)           (225,839)
                                                               ---------------   --------------  ------------------

Cash Flows From Financing Activities
     Proceeds from borrowings                                              --            4,336             275,565
     Principal payments on notes payable                              (362,783)            --             (518,758)
     Proceeds from loans from stockholders                                 --              --              158,934
     Principal payments on loans from stockholders                         --           (6,667)            (86,500)
     Principal payments on capital lease obligations                    (4,248)         (1,926)             (9,144)
     Proceeds from the issuance of Series 2000-A
         preferred stock                                             2,700,000              --           2,700,000
     Proceeds from issuance of common stock                          2,277,001             --            3,778,404
                                                               ----------------  -------------   -----------------
     Net Cash Provided By (Used In) Financing Activities             4,609,970          (4,257)          6,298,501
                                                               ---------------   --------------  -----------------
Net Increase (Decrease) In Cash                                      2,912,560        (589,563)          3,120,494
Cash At Beginning Of The Period                                        207,934       1,286,299                 --
                                                               ---------------   -------------   -----------------
Cash At End Of The Period                                      $     3,120,494   $     696,736   $       3,120,494
                                                               ===============   =============   =================
</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
                                                          Six Months Ended June 30,             (Date of
                                                    -------------------------------------- Inception) through
                                                           2000               1999           June 30, 2000
                                                    ------------------- ------------------ -----------------
Supplemental disclosure of cash flow information:
<S>                                                 <C>                 <C>                <C>
   Cash paid during the period for interest         $        11,709     $         2,351    $       109,963

Supplemental Schedule of Non-cash Investing and
   Financing Activities:
   Acquisition of PureSoft Solutions L.L.C.
       Fair value of assets acquired                      1,651,592                  --
       Liabilities assumed                                  183,730                  --
       Promissory note                                      450,000                  --
       Fair value of stock options issued                   261,779                  --
       Member interest purchase obligation                  106,083                  --
   Noncash preferred stock dividends                      2,139,921                  --
   Equipment acquired through capital lease
        obligations                                          33,021               3,727
   Stock option grants at less than fair value              193,750                  --
</TABLE>



     See accompanying notes to condensed consolidated financial statements.

                                       5



<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  and have  been  prepared  pursuant  to the rules and
regulations of the Securities and Exchange  Commission.  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  although 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 condensed consolidated 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 months and six months ended June 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 June 30, 2000 and 1999,  there were outstanding  common stock  equivalents to
purchase 6,397,035 and 1,315,000 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.


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

On March  15,  2000,  the  Company  entered  into an  agreement  (the  "PureSoft
Agreement") to acquire 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 of 80% of the ownership
of  PureSoft,  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 purchase an
additional 7%, and the remaining 13% ownership  interest in PureSoft on April 1,
2001,  and April 1, 2002,  respectively,  by issuing 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 an aggregate minimum of 35,361 shares of the
Company's  common  stock  are to be  issued  for the  remaining  20 %  ownership
interest.  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 date.  The  acquisition  was  accounted  for as a
purchase.

On March 15, 2000, the Company paid $50,000 to the PureSoft  owners and $300,000
to PureSoft and issued the options. The options were recorded at their estimated
fair  value  of  $261,779,  or  $2.99  per  share,  based  on the  Black-Scholes
option-pricing  model. The PureSoft  Agreement would have been void in the event
the Company did not make the required $300,000  promissory note payment together
with  accrued  interest  and the working  capital  advance on or before June 15,
2000,  and the $50,000 paid to the  PureSoft  owners,  the $300,000  advanced to
PureSoft,  and the  options  would have been  forfeited.  On June 2,  2000,  the
Company made the required payments and consummated the acquisition.


                                       7
<PAGE>


The  purchase  price  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) the estimated fair value of the
stock options of $261,779;  and (5) the estimated fair value of $106,083 for the
minimum of 35,361 shares to be issued for the remaining 20% ownership  interest,
and totaled  $1,467,862.  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.

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 market value of the net assets  acquired was $1,147,465 and was capitalized
as goodwill to be amortized over a period of 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 Six Months Ended June 30,
                                    -------------------------------------
                                          2000               1999
                                    ------------------ ------------------
<S>                                 <C>                <C>
Revenues                            $      206,466     $      171,024
Net loss                                (2,044,802)          (528,764)
Net loss  attributable  to  common
  stockholders                          (4,284,723)          (528,764)
Basic  and  diluted  net  loss per
   common share                              (0.20)             (0.03)
</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 three months ended June 30, 2000,
the market value of these securities declined and management determined that the
decline  was other than  temporary.  Accordingly,  a  write-down  of $75,189 was
recorded to adjust the carrying value of the securities to market value.

NOTE 4-SERIES 2000-A CONVERTIBLE 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  provides for the subsequent  purchases of an
additional  3,000  shares of Series  2000-A  Preferred  Stock with  accompanying
warrants  for an  aggregate  amount of  $3,000,000.  The  first  two  subsequent
closings shall be 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 June 30, 2000, the Company had issued 3,000 shares of Series 2000-A Preferred
Stock in exchange for net proceeds of  $2,700,000.  The placement fee was netted
against the proceeds receivable under the Purchase Agreement. Subsequent to June
30, 2000, the Company issued an additional 500 shares of Series 2000-A Preferred
Stock in exchange for net proceeds of $450,000.

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


                                       8
<PAGE>

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.

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 June 30, 2000, 3,000 shares of Series 2000-A
Preferred  Stock were  convertible  into common stock.  All remaining  shares of
Series  2000-A  Preferred  Stock to be issued under the Purchase  Agreement  are
convertible upon issuance. 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 six months  ended June 30,  2000,  the  Company  recorded a preferred
stock  dividend of $750,000  related to the 20% discount on the shares of Series
2000-A Preferred Stock then convertible.

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 will, subsequent to
June 30,  2000,  record a preferred  stock  dividend of $250,000  related to the
reduction in the conversion price.

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


                                       9
<PAGE>

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 - The  Company  was  required  to use its best  efforts  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  and to  maintain  such  registrations  or
qualifications  effective  for  all  periods  during  which  any  Series  2000-A
Preferred  Share may be  converted  or any related  warrants  may be  exercised.
Accordingly,  the Company filed a  registration  statement with the SEC covering
the required number of shares, which 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  within 5 days
after the last business day of each calendar quarter 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. Unless all accrued dividends and
interest thereon, if any, have been paid in full, no dividend on any other stock
shall be declared, paid, or made.

The Company  recorded $13,333 in Series 2000-A Preferred Stock dividends for the
six months  ended June 30, 2000.  This is in addition to the $750,000  dividends
related to the beneficial conversion feature.

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 holder of the
Warrants will be entitled to receive one warrant for every share of Common Stock
received on the  conversion of the Series 2000-A  Preferred  Stock.  Because the
number is variable,  the number of Series  2000-A  Warrants to be issued is also
variable.  However,  pursuant  to the  Purchase  Agreement,  the  number of such
Warrants to be issued will be fixed no later than November 16, 2000, assuming no
event of default has occurred. 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,  2000,  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  December  1, 2000,  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, provided that
at the time of exercise a registration statement relating to the common stock is
then in  effect  and the  common  stock is  qualified  for sale or  exempt  from
qualification  under  applicable  state  securities  laws.  The Warrants are not
subject to early redemption by the Company.

The Company  recorded  $1,376,588 in Series  2000-A  Preferred  Stock  dividends
related to the  potential  issuance of the Warrants  during the six months ended
June 30,  2000.  This is in addition to the  $750,000  dividends  related to the
beneficial conversion feature and the $13,333 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.

                                       10
<PAGE>

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.


NOTE 4-STOCKHOLDERS' EQUITY

During the six months ended June 30, 2000, the Company received cash proceeds in
the amount of  $2,277,000  under the terms of a private  placement  offering  by
issuing  759,000  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 December
31, 2001.

NOTE 5-STOCK OPTIONS

During the six months ended June 30, 2000, the Company  granted  225,000 options
under its 1998 Stock Option Plan. Of the options  granted,  155,000 options have
an exercise  price of $1.75 per share and 70,000  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 $243,799 and $85,857 for the
six months and the three months ended June 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 6-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.  Company  management  maintains that the alleged 1991 agreement is no
longer valid because the  conditions  were not met within a reasonable  time and
because  the  individual  failed to  fulfill  other  material  terms of the 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.  Company  management  believes this claim should not
ultimately  result in any liability to the Company based on sufficient  defenses
and an indemnification agreement it has with Linco's founders.



                                       11
<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 March 31, 2000, together with the annual financial
statements as of December 31, 1999.  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,  Inc. 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 LLC is
located at  www.puresoft.ws.  Reference to these URLs 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), Protection at the Microbial Level

MicrobNZ is highly efficacious,  long-lasting with a high degree of persistence,
and  fast-acting  against a broad spectrum of pathogens,  including  Escherichia
coli, Pseudomonas aeruginosa,  Staphylococcus aureus and drug resistant bacteria
such as  Methicillin  resistant  Staphylococcus  aureus  (MRSA)  and  Vancomycin
resistant  Enterococcus  (VRE).  The MicrobNZ  formulation  does not contain any
irritating  or  degrading  active   ingredients   such  as   Triclosan(R),   CHG
(Chlorhexidine  Gluconate),  PCMX  (Chloroxlyenol),  iodine, or alcohol.  Unlike
these other  degrading  active  ingredients,  products  formulated with MicrobNZ
significantly improve and moisturize the skin.

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

MicrobNZ can be used  facility-wide  and is appropriate for patient,  public and
staff handwashing. This technology can be packaged as an antimicrobial handwash,
antimicrobial  first-aid antiseptic lotion,  antimicrobial  first-aid antiseptic
spray,  and  antimicrobial  first-aid  antiseptic  towelettes.  First Scientific
markets its antimicrobial technology under the MicrobNZ brand.

Skin Healing Technology

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

Manufacturing

The Company  currently  contracts the manufacturing of its products to carefully
selected  facilities that meet both GMP (Good  Manufacturing  Practices) and FDA
standards.  These contract manufacturers supply product to various customers who
require  GMP  and  FDA  compliant  facilities  for the  manufacturing  of  their
products.



                                       12
<PAGE>

First  Scientific  employs  in-house  regulatory  experts that work closely with
contract  manufacturers  to  establish  and  monitor  product  specific  quality
standards,  and  also to  design  and  implement  more  efficient  manufacturing
processes.

Outlook

The 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, marketable securities, cash
generated from anticipated  sales,  and cash generated from a currently  pending
private placement of the Company's  securitie will be sufficient to meet Company
obligations through 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  deem it in its  best  interest  to  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 health-care
market  consultants  to advise  management  on  business  strategy  and  product
innovation.

Recent Developments

PureSoft  Solutions L.L.C.  Acquisition - On March 15, 2000, the Company entered
into an agreement  (the  "PureSoft  Agreement")  to acquire  PureSoft  Solutions
L.L.C.  ("PureSoft"),  a New Hampshire limited liability company involved in the
manufacturing  and  distribution  of health  care  products.  On that date,  the
Company paid $50,000,  issued options to purchase  87,534 common shares at $0.01
per share, and issued a $450,000 promissory note to the owners of PureSoft.  The
promissory note bears interest at 8.5% per annum with a $300,000  payment due on
June 15, 2000, and quarterly  payments of $50,000  thereafter  through September
15, 2000. In addition,  the Company advanced $300,000 to PureSoft.  The PureSoft
agreement  provides for the Company to advance to PureSoft  $300,000 on June 15,
2000, and on August 15, 2000, all of which were paid on or before the respective
due date. The PureSoft Agreement also provides that the Company will purchase an
additional 7%, and the remaining 13% ownership  interest in PureSoft on April 1,
2001,  and April 1, 2002,  respectively,  by issuing shares of its common stock.
The  number  of shares to be issued  is  contingent  upon  PureSoft's  achieving
certain  levels  of the net  income  before  income  taxes,  and  shall  vary in
proportion  to  any  over-or   underachievements   of  established   performance
milestones stated in the PureSoft Agreement,  provided however that an aggregate
minimum of 35,361 shares of the Company's  common stock are to be issued for the
remaining 20% ownership interest.

The $50,000  paid to the owners,  the  $300,000  advanced to  PureSoft,  and the
options were not  refundable  and would have had to be forfeited had the Company
failed to pay $300,000 on the promissory note and advance  $300,000 on or before
June 15,  2000.  In the  event  the  Company  did not  make  the June 15,  2000,
payments, the PureSoft Agreement would have been void and the Company would have
no further  obligation  under the promissory note. The Company made the required
$300,000  promissory  note payment and advanced  $300,000 to PureSoft on June 2,
2000.

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


                                       13
<PAGE>

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.

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.

Financial Position

First  Scientific  had $3,120,494 in cash as of June 30, 2000,  representing  an
increase of $2,912,560 from December 31, 1999.  Working capital,  as of June 30,
2000,  increased  to  $2,686,172  compared  to working  capital of  $297,039  at
December 31, 1999. The Company had an accumulated deficit of $10,191,067 at June
30,  2000,  most of which had been  funded  out of  proceeds  received  from the
issuance of stock.

Results of Operations

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

During the three months ended June 30, 2000,  the Company  recorded  revenues of
$91,444,  reflecting a decrease of $30,485,  or 25%, compared to the same period
in the previous year. Revenues in 1999 resulted primarily from contracts to test
products for  customers,  while in 2000 the source of revenue has shifted to the
sale of product, with such sales representing 77% of total revenues.

Selling,  general and administrative expenses were $957,307 and $240,595 for the
three  months  ended  June 30,  2000 and  1999,  respectively,  representing  an
increase of $716,712,  or 298%,  from 2000 to 1999.  The increase over the prior
year is due to expenses  incurred  in June 2000  related to the  acquisition  of
PureSoft,  which totaled  $81,450,  and the  expansion of operations  reflecting
increases  in payroll  expenses of $226,087  due to the  addition of an enhanced
sales force in the year 2000 as well as the addition of  administrative  support
personnel,  non-cash compensation  associated with the issuance of stock options
of $80,749,  and  consulting,  legal,  and  professional  fees of $120,666.  The
remaining  increase was primarily  attributable to  growth-related  advertising,
promotional, travel, and living expenses.

The Company  incurred  research and development  expenses of $118,872 during the
three months ended June 30, 2000,  an increase of $109,026  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 First Scientific expands its product offerings.

The Company  recorded a loss of $75,189  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 $2,901 and $7,837 for the three  months ended June 30,
2000 and 1999,  respectively.  This  represents  a decrease of $4,936 and is due
primarily to interest  expense that the Company has incurred through the capital
lease obligations that have been entered into primarily for office equipment.

Six months ended June 30, 2000, compared to the six months ended June 30, 1999

During the six months  ended June 30,  2000,  the Company  recorded  revenues of
$156,619,  reflecting  an increase of $34,320 or 28% compared to the same period
in the previous year. Revenues in 1999 resulted primarily from contracts to test
products for  customers,  while in 2000 the source of revenue has shifted to the
sale of product, with such sales representing 45% of total revenues.



                                       14
<PAGE>

Selling,  general and  administrative  expenses were $1,657,159 and $526,010 for
the six  months  ended June 30,  2000 and 1999,  respectively,  representing  an
increase of $1,131,149,  or 215%, from 2000 to 1999. The increase over the prior
year is due to expenses  incurred  in June 2000  related to the  acquisition  of
PureSoft,  which totaled  $81,450,  and the  expansion of operations  reflecting
increases  in payroll  expenses of $287,539  due to the  addition of an enhanced
sales force in the year 2000 as well as the  administrative  support  personnel,
non-cash  compensation  charges associated with the issuance of stock options of
$223,206,  and  consulting,  legal,  and  professional  fees  of  $211,088.  The
remaining  increase was primarily  attributable to  growth-related  advertising,
promotional, travel, and living expenses.

The Company  incurred  research and development  expenses of $171,115 during the
six months ended June 30, 2000,  an increase of $155,007 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 First Scientific expands its product offerings.

The Company  recorded a loss of $75,188  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 $10,178 and $18,819 for the six months  ended June 30,
2000 and 1999,  respectively.  This  represents  a decrease of $8,641 and is due
primarily  to interest  expense that the Company has  incurred  through  capital
lease obligations that have been entered into primarily for office equipment.

Liquidity and Capital Resources

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 $1,331,539 in operating  activities  during the six
months  ended June 30,  2000.  As of June 30, 2000,  the  Company's  current and
long-term  liabilities  totaled  $688,950.  The Company  had working  capital of
$2,699,505 as of June 30, 2000. In the short term, the Company will be dependent
on a few large  customers for the bulk of the Company's  sales.  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  from  operations,  it will  rely
primarily  on 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  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 of 80% of the ownership of PureSoft,  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 purchase an additional 7%, and the remaining 13% ownership interest
in PureSoft on April 1, 2001 and April 1, 2002, respectively,  by issuing shares
of its  common  stock.  The  number of shares  to be issued is  contingent  upon
PureSoft's achieving certain levels of net income before income taxes, and shall
vary in proportion to any over or under achievements of established  performance
milestones stated in the PureSoft Agreement, provided however, that an aggregate
minimum of 35,361 shares of the Company's  common stock are to be issued for the
remaining 20 % ownership interest. 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.

On March 15,  2000,  the  Company  paid  $50,000 to the owners and  $300,000  to
PureSoft and issued options as provided in the PureSoft  Agreement.  The options
were  recorded at their  estimated  fair value of $261,779,  or $2.99 per share,
based on the  Black-Scholes  option-pricing  model. On June 2, 2000, the Company
made the  required  $300,000  promissory  note  payment  together  with  accrued
interest and the $300,000 working capital advance.



                                       15
<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.

Series  2000-A  Preferred  Stock - On May  16,  2000,  the  Company  executed  a
securities  purchase  agreement   ("Purchase   Agreement")  with  Aspen  Capital
Resources,  L.L.C.,  ("Aspen"),  whereby Aspen  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 Aspen, and warrants
exercisable  for the purchase of  additional  shares of Company  common stock by
Aspen.  The  Purchase  Agreement  provides  for the  subsequent  purchases of an
additional  3,000  shares of Series  2000-A  Preferred  Stock with  accompanying
warrants  for an  aggregate  amount of  $3,000,000.  The  first  two  subsequent
closings shall be 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 Aspen. As of June
30, 2000, the Company has issued 3,000 shares of Series 2000-A  Preferred  Stock
in exchange for net proceeds of  $2,700,000.  Subsequent  to June 30, 2000,  the
Company has issued 500 shares of Series 2000-A  Preferred  Stock in exchange for
net proceeds of $450,000.

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,  thereon  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.
Additionally,  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, thereon through the date of redemption.

The  holder  of  Series  2000-A  Preferred  Stock  has  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 and 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 June 30, 2000, 3,000 shares of Series 2000-A
Preferred Stock were  convertible.  The remaining  shares became  convertible on
July 15, 2000.  Upon the  occurrence  of an event of  noncompliance,  all of the
Series 2000-A  Preferred Stock shall be immediately  convertible and 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  into  shares of common  stock by  delivering  to the
holder 30-days prior written notice of the exercise of this right.

The  Company is required  to use its best  efforts to register or qualify  under
applicable  federal  and  state  securities  laws  the sale  and  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  and  to  maintain  such  registrations  or  qualifications
effective for all periods during which any Series 2000-A  Preferred Share may be
converted or any related  warrants may be exercised.  If such  registrations  or
qualifications  have not become effective on or before September 13, 2000, or on
any date thereafter cease to remain effective as provided herein, the Company is
required to issue to the holders 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 sale and 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  within 5 days after the
last business day of each calendar quarter provided,  however,  that if there is
an event of  noncompliance,  as defined,  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


                                       16
<PAGE>

payment of dividends in cash or in shares of the  Company's  common stock at the
Conversion Price.  Unless all accrued  dividends and interest  thereon,  if any,
have been paid in full, no dividend on any other stock shall be declared,  paid,
or made.

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 holder of the Warrants will be entitled
to  receive  one  warrant  for  every  share of  Common  Stock  received  on the
conversion of the Series 2000-A Preferred Stock. Because the number is variable,
the number of Series  2000-A  Warrants to be issued is also  variable.  However,
pursuant to the  Purchase  Agreement,  the number of such  Warrants to be issued
will be fixed no later than November 16, 2000,  assuming no event of default has
occurred.  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,  2000,  the date of which the  holder of the  Warrant
converts its shares of Series 2000-A  Preferred  Stock, or the date on which the
preferred  shares are redeemed.  The Warrants are  exercisable  from December 1,
2000,  or  earlier  upon the  occurrence  of an event of  default or a change in
control of the Company, and may be exercised through May 16, 2004, provided that
at the time of exercise a registration statement relating to the common stock is
then in  effect  and the  common  stock is  qualified  for sale or  exempt  from
qualification  under  applicable  state  securities  laws.  The Warrants are not
subject to early redemption by the Company.

Common  stock and  warrants-  During the six months  ended  June 30,  2000,  the
Company  received cash  proceeds in the amount of $1,505,000 by issuing  501,666
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 $5.00 per share.  The warrants expire December 31, 2001.  Additionally,
the Company  received cash proceeds in the amount of $772,001 and issued 257,334
shares of common stock at $3.00 per share.

Stock  options - During the six months  ended June 30,  2000,  First  Scientific
granted  225,000  options  under the 1998  Stock  Option  Plan.  Of the  options
granted,  155,000  options have an exercise  price of $1.75 per share and 70,000
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 June 30, 2000,  the market value of the  securities  declined
and  management   determined   that  the  decline  was  other  than   temporary.
Accordingly,  a write-down of $75,188 was 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 it's 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-year term and requires lease payments of $735 per month.

Year 2000

First  Scientific did not experience any significant Year 2000 problems with its
systems or its vendors, contractors or customers.

Forward-Looking Statements

When used in this Form 10-QSB and in other filings by First  Scientific with the


                                       17
<PAGE>

SEC,  in First  Scientific's  press  releases  or other  public  or  stockholder
communications,  or in oral  statements  made with the approval of an authorized
executive  officer of First  Scientific,  the words or phrases "would be," "will
allow,"  "intends to," "will likely result," "are expected to," "will continue,"
"is anticipated,"  "estimate," "project," or similar expressions are intended to
identify  "forward-looking  statements"  within the  meaning of the safe  harbor
provisions of the Private  Securities  Litigation Reform Act of 1995 and Section
21E of the Securities Exchange Act of 1934, as amended.

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

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


                          PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

An  individual  asserted  a claim  against  the  Company  under  the terms of an
agreement  in  principal in 1991,  which  purported to promise  shares of common
stock of Linco Industries,  Inc. ("Linco"),  a predecessor entity of the Company
if certain  conditions were met by the individual in representing the Company to
potential  customers.  First  Scientific's  management  maintains  that the 1991
agreement  is no longer  valid  because  the  conditions  were not met  within a
reasonable  time and  because  of the  individual's  failure  to  fulfill  other
material terms of the 1991 agreement.  Because of the claim,  the Linco founders
and Company filed an action for  declaratory  judgement  seeking a determination
that the individual has no entitlement against the Company. The individual filed
a counter  claim that he had "fully  performed"  under the 1991  agreement.  The
parties are  conducting  discovery.  Management  believes  this claim should not
ultimately  result  in  any  substantial  liability  to  the  Company  based  on
sufficient defenses and further on an indemnification  agreement it has with the
Linco founders.


Item 2. Changes in Securities and Use of Proceeds

(c)   Sales of Unregistered Securities

During the quarter ended June 30, 2000,  First Scientific sold 759,000 shares of
common stock to four  accredited  investors for $2,277,000 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. First
Scientific did not use an underwriter in connection with the Private  Placement.
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)



                                       18
<PAGE>

     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)

     10.10 Stock 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,   L.L.C.,  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.


                                       19

<PAGE>


                                   SIGNATURES


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


                                               FIRST SCIENTIFIC, INC.
                                                     Registrant


DATED: August 21, 2000              By: /s/ Randall L. Hales
                                        Randall L. Hales, CEO and President

DATED: August 21, 2000
                                    By: /s/ John L. Theler
                                        John L. Theler, Vice President
                                        Finance/CFO (Principal
                                        Financial and Accounting Officer)