SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
             ACT OF 1934, for the fiscal year ended March 31, 2000

                            Commission File No. _____

                         LUNA MEDICAL TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

  NEVADA                                                              98-0207745
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

Suite 400, 900 West Hastings Street,
Vancouver, British Columbia, Canada                                      V6C 1E5
(Address of registrant's principal executive offices)                 (Zip Code)

                                  604.687.0719
              (Registrant's Telephone Number, Including Area Code)

Check whether the registrant (1) has filed all reports required by Section 13 or
15(d) of the Securities 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 [_]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year: US$111,712.00

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act). As of March 31, 2000, approximately $0.50.

The number of shares outstanding of the issuer's only class of Common Stock,
$.001 par value, was 8,040,660 on March 31, 2000.

Documents incorporated by reference. There are no annual reports to security
holders, proxy information statements, or any prospectus filed pursuant to Rule
424 of the Securities Act of 1933 incorporated herein by reference.

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

<PAGE>


PART I.

Item 1.  Description of Business.

Development of the Company. Luna Medical Technologies, Inc., a Nevada
corporation, formerly entitled Luna Technologies, Inc., was incorporated in the
State of Nevada on January 19, 1999. In May, 1999, the Company changed its name
to Luna Medical Technologies, Inc. Our executive offices are located at Suite
400, 900 West Hastings Street, Vancouver, British Columbia, Canada V6C 1E5. Our
telephone number is (604) 687-0719. Our facsimile number is (604) 622-5575. In
May, 1999, the Company caused to be incorporated in British Columbia, Luna
Fertility Indicator, Inc., a wholly-owned subsidiary of this Company. The
primary business of Luna Fertility Indicator, Inc., is marketing and
distributing the Luna Fertility Indicator.

For purposes of clarification, anytime the symbol "US" is used within this
Annual Report of Form 10-KSB, it refers to the currency of the United States.
Anytime the symbol "CDN" is used, it refers to the currency of Canada.

Business of the Company. On or about February 1, 2000, our subsidiary Luna
Fertility Indicator, Inc., renegotiated a licensing agreement that we had
entered into with Luna Products, Inc., a Canadian corporation ("LPI") in or
about January 1999. Pursuant to the agreement with LPI, Luna Fertility
Indicator, Inc., was granted the worldwide right to market a lightweight,
re-usable home fertility test known as the Luna Fertility Indicator (the
"Fertility Indicator"). Within this agreement, Luna Fertility Indicator, Inc.,
agreed, among other things, (i) to pay the cost of any government approval it
sought in connection with the Fertility Indicator; and (ii) to expend direct
marketing and promotional costs of not less than CDN$250,000.00. To facilitate
the transaction, we agreed to forgive a US$40,000.00 loan we made to LPI. Luna
Fertility Indicator, Inc., also agreed to pay Mr. James Emmerson, a director of
LPI, a royalty of CDN$1.00 for every Fertility Indicator sold. The initial term
of the agreement is for 15 years from February 1, 2000. In addition, the
agreement provides for two renewal terms of 5 years on the same terms and
conditions governing the initial 15 year term.

The concept behind the Fertility Indicator has been used in Europe for some
time. Although no product exactly like the Fertility Indicator is being sold in
Europe, we believe that the medical principles behind the Fertility Indicator
involving the analysis of a woman's saliva to determine fertility have been the
subject of clinical tests to verify the safety of that concept. However, we have
not conducted our own testing regarding the accuracy of the Fertility Indicator
and we cannot attest to the extent, nature, accuracy or validity of any third
party tests. Quite simply, a woman's body fluids indicate the changes in
hormones during different phases of her fertility cycle. When the dried fluids
are viewed through a powerful magnifier, patterns in the crystallized fluids
indicate the stage of her fertility cycle. The Fertility Indicator relies on the
medical fact that saliva crystallizes in the same special way as uterine
cervical mucus, due to the action of the estrogens, presenting the appearance of
fern-type branches. In 1948, Dr. Ridborg first discovered physiological
variations in the crystallized arrangement of saliva (or cervical uterine mucus)
related to ovulation. Later, Doctors Evelyn L. and John J. Billings identified
this scientific discovery as an indicator of female fertility. We cannot attest
to the accuracy, extent, nature or validity of those tests conducted by Evelyn
and John Billings.

In 1969, at the Royal Academy of Medicine in Barcelona, Spain, Dr. Biel
documented his investigations evidencing the relationship between hormonal
changes during the menstrual cycle and crystallization of female saliva during
ovulation, which followed an identical pattern in uterine cervical mucus.
Specifically, a woman's saliva and uterine cervical mucus only crystallize
during a period of from 6 to 8 days, during the fertile stage of the menstrual
and ovulation cycle. It is important to note that individual advances and delays
in ovulation do not affect this method's precision, as the method relies on
ovulation itself rather than a projected cycle date. We cannot attest to the
accuracy, extent, nature or validity of those tests conducted by Dr. Biel.

The secretion of estrogen and progesterone changes daily during a woman's
menstrual cycle, influencing the characteristics, which can be observed in the
dried body fluids, in particular, saliva and cervical fluid. These observable
characteristics include an increase in filaceousness (that is, the appearance of
thread-type anatomical


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structures) and specific changes in the crystalline patterns during the days
preceding ovulation. The increase of estrogen during the whole of the first
stage of the menstrual cycle produces changes in the consistency and
crystallization of saliva, in the same way as in uterine cervical mucus. The
estrogens only produce crystallization of these fluids when they reach a certain
concentration. This concentration is reached 3 to 4 days prior to ovulation.

The simple procedure to produce and examine these crystalline patterns is by
placing a saliva (or cervical mucus fluid) sample on a slide to evaporate and
view through a small, powerful, hand-held microscope. By repeated in-home
testing, a woman can track her complete ovulation cycle without the nuisance of
urine tests, temperature tests and monthly calendar tracking, or costly visits
to a fertility or health care service. It is totally private, non-invasive, and
chemical free method of testing for fertility.

The Fertility Indicator takes up slightly more space than a lipstick and can be
used any private place with access to natural or clear light. A woman simply
places a sample of her saliva on the clean slide, allows the saliva to dry, then
holds the slide up to a 40-watt or greater light source and looks at the saliva
pattern through the eyepiece. The woman then compares her saliva patterns
indicated in a book of charts provided free of charge with the Fertility
Indicator. Comparing the saliva patterns will indicate her state of fertility.
If the woman is in the biologically active, fertile phase, her saliva will
crystallize and fibrous "fern-type" patterns will be clearly viewed in the small
Indicator in-home small microscope. Then she can rinse off the slide and put it
away until the next use.

We anticipate that the Indicator will be used as a guide to determine the
different phases of the fertility cycle and as an aid to encourage conception.
We do not intend for this device to be used or considered as a contraceptive or
method of birth control.

Government Approval. In order to sell the Fertility Indicator in Canada, we were
required to obtain a Drug Identification Number ("DIN"). We applied for and
received DIN186759.

In order to sell the Fertility Indicator in the United States, we have filed the
requisite documents for application with the Food and Drug Administration
("FDA"). We cannot predict when, or if, we will ever obtain FDA approval for the
Fertility Indicator in the United States. We anticipate that we will market the
Fertility Indicator to various countries and will at that time make the proper
application for any required governmental approvals. At this time, we have not
applied for any additional governmental approvals.

Patents. LPI has applied for and received a Canadian design patent for the
manufacture of the Fertility Indicator. We have not been assigned any ownership
rights in that Canadian patent. Neither LPI nor the Company have either applied
for or obtained a United States patent covering the Fertility Indicator. We do
regard certain aspects of the Fertility Indicator as proprietary and will
attempt to protect such proprietary information through contractual restrictions
on disclosure, copying and distribution. We do not hold any patents. Except as
protected by the Canadian patent held by LPI, there can be no assurance that our
competitors will not independently develop technologies that are substantially
equivalent or superior to ours or LPI's technologies. While we believe that our
rights in the Fertility Indicator do not and will not infringe or violate
proprietary rights of others, it is possible that infringement of proprietary
rights of others may occur. Any such claims, with or without merit, can be time
consuming and difficult to defend and, if successful, could have a material
adverse effect on the Company.

Employees. We do not currently have any employees. We utilize the services of
three consultants. Campbell Capital Advisory, Inc., provides the Company with
the management and administrative services of Gordon McDougall, President, Chief
Executive Officer and sole director of the Company. Melissa Gervais, Inc.,
provides the services of Melissa Gervais for marketing, management and
administration for the Company's wholly-owned subsidiary. Glen Wallace, CGA,
Inc., supplies accounting and financial consulting services to the Company on a
month-to-month, as needed basis.

Competition. Competition in the field of diagnostic home fertility tests is
intense. We compete directly with other companies and businesses that have
developed and are in the process of developing products which will be
competitive


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with the Fertility Indicator. There can be no assurance that other technologies
or products which are functionally equivalent or similar to the Fertility
Indicator have not been developed or are not in development. Many of these
competitors have greater financial and other resources, and more experience in
distribution and marketing of fertility indication products, than we do.

The medical devices industry continues to undergo rapid change and competition
is intense and is expected to increase. There can be no assurance that
competitors have not or will not succeed in developing technologies and products
that are more accurate and/or simple than the Fertility Indicator's saliva
crystallization method and would, accordingly, render the Fertility Indicator
obsolete and noncompetitive. Many of our competitors have substantially greater
experience, financial and technical resources and production, marketing and
development capabilities than we possess. Accordingly, certain of those
competitors may succeed in obtaining regulatory approval for products more
rapidly or effectively we may be capable of. When, and if, we begin producing
our products on a large scale, we will be competing with respect to
manufacturing efficiency and sales and marketing capabilities, areas in which we
currently have no experience.

The demand for diagnostic, at-home fertility level indicators is ever
increasing. There are currently numerous devices on the market to aid in
predicting the time of ovulation including such products that utilize urine or
blood samples to detect the level of the Luteinising Hormone (LH) in the sample.
Other such similar products utilize a microprocessor to optimize the basal body
temperature and calendar method of ovulation prediction. However, direct
competition with the Fertility Indicator is far less severe as there are only a
few products available that utilize saliva tests in predicting the time of
ovulation.

We have identified two significant competitors, Personal Fertility Technologies,
Inc. and Med-Direct Products, Inc. Personal Fertility Technologies, Inc. ("PFT")
is headquartered in Gold River, California, PFT has designed a product called
the PFT 1-2-3(TM), which uses colored slides to incorporate a technique similar
to the staining method used in medical test laboratories. PFT has distributors
in Mexico, Germany, Hong Kong and Canada. To the best of our knowledge, this
product has not been approved by the United States Food and Drug Administration.

Med-Direct Products Inc. ("MDP") is headquartered in Australia, MDP distributes
(i) the Lady Fertility Tester, a saliva-based fertility test; (ii) the Bioself
Fertility Indicator, a temperature and calendar-based fertility test; (iii) the
Lady Ovulation Tester, a urine-based fertility test; and (iv) the Lady Pregnancy
Tester, also a urine-based fertility test. The Lady Fertility Tester is not for
sale in either Canada or the United States. In Australia, the Lady Fertility
Tester retails for 55 Australian Dollars or approximately CDN$60.00. The Luna
Fertility Indicator retails for approximately CDN$65.00. We also believe that we
will have a significant advantage over the Australian product because of the
North American Free Trade Agreement and monetary exchange rates favorable for
the export of Canadian products.

Item 2. Description of Property.

Property held by the Company. The Company does not own any significant property.

The Company's Facilities. The Company occupies facilities consisting of
approximately 600 square feet of rented commercial office space located at 400 -
900 West Hastings Street, Vancouver, British Columbia, V6C 1E5. The office space
is furnished by Regions Group Executives Officers on a month-to-month basis at a
rate of CDN$1,800.00 per month. The Company's wholly-owned subsidiary also rents
storage and work space from Melissa Gervais for CDN$600.00 per month.

Item 3. Legal Proceedings

There are no legal actions pending against the Company nor are any such legal
actions contemplated.

Item 4. Submission of Matters to a Vote of Security Holders. Within the last
fiscal year, we did not submitted any matters to a vote of security holders.


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PART II.

Item 5. Market for Common Equity and Related Stockholder Matters

Reports to Security Holders. The Company is now a reporting company with the
Commission, and will provide an annual report to its security holders, which
will include audited financial statements. The public may read and copy any
materials filed with the Commission, including the Company's Registration
Statement on Form SB-2 and the Registration Statement on Form 10-SB, and all
exhibits and schedules thereto, at the Commission's Public Reference Room at 450
Fifth Street N.W., Washington, D.C. 20549. Copies of all or any part thereof may
be obtained from such office after payment of fees prescribed by the Securities
and Exchange Commission. The public may also obtain information on the operation
of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The
Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission. The address of that site is
http://www.sec.gov.

On May 2, 2000, the Company filed a Registration Statement on Form SB-2
("SB-2"). Pursuant to that SB-2, the Company registered all of its then issued
and outstanding common stock. The Company also registered 410,000 shares of its
common stock for issuance upon the exercise of 410,000 unexercised warrants. On
May 11, 2000, the Company's SB-2 was declared effective by the Securities and
Exchange Commission.

The Company is authorized to issue 50,000,000 shares of common stock, $.001 par
value, each share of common stock having equal rights and preferences, including
voting privileges; and 5,000,000 shares of the preferred stock, $.001 par value.
The shares of $.001 par value common stock of the Company constitute equity
interests in the Company entitling each shareholder to a pro rata share of cash
distributions made to shareholders, including dividend payments. The Bylaws of
the Company specify how the cash available for distribution, whether occurring
from operations or sales or refinancing, is to be shared among the shareholders.
The holders of the Company's common stock are entitled to one vote for each
share of record on all matters to be voted on by shareholders. There is no
cumulative voting with respect to the election of directors of the Company or
any other matter, with the result that the holders of more than 50% of the
shares voted for the election of those directors can elect all of the Directors.
The holders of the Company's common stock are entitled to receive dividends
when, as and if declared by the Company's Board of Directors from funds legally
available therefor; provided, however, that cash dividends are at the sole
discretion of the Company's Board of Directors. In the event of liquidation,
dissolution or winding up of the Company, the holders of common stock are
entitled to share ratably in all assets remaining available for distribution to
them after payment of liabilities of the Company and after provision has been
made for each class of stock, if any, having preference in relation to the
Company's common stock. Holders of the shares of Company's common stock have no
conversion, preemptive or other subscription rights, and there are no redemption
provisions applicable to the Company's common stock. All of the outstanding
shares of Company's common stock are duly authorized, validly issued, fully paid
and non-assessable.

Dividend Policy. Any payment of dividends will be at the sole and absolute
discretion of the Company's Board of Directors and will depend upon earnings,
financial condition, capital requirements, amount of indebtedness, contractual
restrictions with respect to payment of dividends, and other factors. Any such
dividends may be paid in cash, property or shares of the Company's capital
stock. The Company has not paid any dividends since its formation, and it is not
probable that any dividends on the Company's $.001 par value common stock will
be declared at any time in the foreseeable future. Any future dividends will be
subject to the discretion of the Company's Board of Directors, and will depend
upon, among other things, the operating and financial condition of the Company,
the Company's capital requirements and general business conditions. Therefore,
there can be no assurance that any dividends on the Company's $.001 par value
common stock will be paid in the future.

Stock Options. The Board of Directors of the Company intends to adopt a stock
option plan ("Stock Option Plan"). The Stock Option Plan will be designed to
retain qualified and competent officers, employees and directors of the Company.
The Company's Board of Directors, or a committee thereof, shall administer the
Stock Option Plan and will be authorized, in its sole and absolute discretion,
to grant options thereunder to all eligible employees of the Company,


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including officers and directors (whether or not employees) of the Company.
Options will be granted pursuant to the provisions of the Stock Option Plan on
such terms and at such prices as determined by the Company's Board of Directors.
Options granted pursuant to the Stock Option Plan will be exercisable after the
period specified in the option agreement. Options granted under the Stock Option
Plan will not be exercisable after the expiration of ten (10) years from the
date of grant. The Stock Option Plan will also authorize the Company to make
loans to optionees to enable them to exercise their options.

Warrants. As of March 31, 2000, there were four hundred ten thousand (410,000)
warrants outstanding. Each of these warrants expire by their own terms on
December 1, 2000. Each warrant grants the holder to purchase one share of the
Company's $.001 par value common stock for US$1.00 per share. Each warrant was
issued pursuant to Rule 506 of Regulation D promulgated by the Securities and
Exchange Commission.

Item 6. Plan of Operation

THIS ANNUAL REPORT SPECIFIES FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THE
COMPANY ("FORWARD-LOOKING STATEMENTS") INCLUDING, WITHOUT LIMITATION,
FORWARD-LOOKING STATEMENTS REGARDING OUR EXPECTATIONS, BELIEFS, INTENTIONS AND
FUTURE STRATEGIES. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE
HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACTS.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "COULD", "MAY", "WILL", "EXPECT", "SHALL", "ESTIMATE",
"ANTICIPATE", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", "INTEND" OR SIMILAR
TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THIS ANNUAL REPORT ON FOR 10-KSB HAVE
BEEN COMPILED BY MANAGEMENT OF THE COMPANY ON THE BASIS OF ASSUMPTIONS MADE BY
MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE. FUTURE OPERATING
RESULTS OF THE COMPANY, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO
REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE
FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS REPRESENT
ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES
IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE
IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN
DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES
REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT
OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS,
AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE
FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE GIVEN THAT ANY OF THE
ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THIS REPORT
ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING
STATEMENTS.

General. We hold the exclusive worldwide license to distribute and market the
Luna Fertility Indicator--a lightweight, easy-to-use, reusable home fertility
test. We have recently developed new and attractive ways to market the Luna
Fertility Indicator and have sought and procured distribution from one of
Canada's leading distributors of cosmetics and personal care products as well as
from a health product distributor. Other than the Luna Fertility Indicator, we
are not currently in the process of developing, licensing, marketing or
distributing other products. We may, however, acquire the right to sell or
distribute and market compatible products or other medical technologies in the
future. Therefore, other than the costs related to the continued distribution
and marketing of the Luna Fertility Indicator, we do not anticipate significant
expenditures on acquisition or development of other products during the current
fiscal year. We will focus our initial marketing and distributing the Luna
Fertility Indicator.


Our business may expose us to potential product liability risks that are
inherent in the marketing of health care related


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products. We do not currently have product liability insurance. There can be no
assurance that we will be able to obtain or maintain such insurance on
acceptable terms or, if obtained, that such insurance will provide adequate
coverage against potential liabilities. We face a business risk of exposure to
product liability and other claims in the event that the use of any of our
products is alleged to have resulted in adverse effects. Such risk exists even
with respect to those products that are manufactured in licensed and regulated
facilities or that otherwise possess regulatory approval for commercial sale.
There can be no assurance that we will avoid significant product liability
exposure. While we have taken, and will continue to take, what we believe are
appropriate precautions, there can be no assurance that we will avoid
significant liability exposure. An inability to obtain product liability
insurance at acceptable cost or to otherwise protect against potential product
liability claims could prevent or inhibit the marketing and distribution of our
products. A product liability claim could have a material adverse effect on our
business, financial condition and results of operations.

Our strategy for growth is substantially dependent upon our ability to market
and distribute the Luna Fertility Indicator successfully. Other companies,
including those with substantially greater financial, marketing and sales
resources, compete with the Company, and have the advantage of marketing
existing products with existing production and distribution facilities. There
can be no assurance that we will be able to market and distribute products on
acceptable terms, or at all. Our failure to market our products successfully
could have a material adverse effect on our business, financial condition or
results of operations.

The medical products industry has been under increasing scrutiny by various
regulatory agencies. We may be subject to various forms of government
regulations, including consumer safety laws and environmental safety laws in all
countries in which the Luna Fertility Indicator is marketed and distributed. Any
future violation of, or the cost of compliance with, these laws and regulations
could have a material adverse effect on our business, financial condition and
results of operations.

The medical products industry is rapidly changing through the continuous
development and introduction of new products. Our ability to compete may be
dependent upon our ability to enhance and improve our products continually.
There can be no assurance that competitors will not develop technologies or
products that render our products obsolete or less marketable. We may be
required to adapt to technological changes in the industry and develop products
to satisfy evolving industry or customer requirements, any of which could
require the expenditure of significant funds. At this time, we do not have a
source of commitment for such funds. Continued refinement and improvement costs
are risks inherent in marketing and distribution development, including
unanticipated technical or other problems which could result in material delays
in product distribution.

Liquidity and Capital Resources. From the date of commencement of sales on March
1, 1999, through March 31, 2000, we generated US$112,732.00 through the sales of
the Luna Fertility Indicator. Prior to March 1, 1999, we did not have any other
source of revenue. Our only other source of liquidity is through the sale of our
capital stock. We have funded our operations primarily through equity
financings. From inception to March 31, 2000, we raised US$442,500.00 through
equity financings.

At March 31, 2000, we had cash resources of US$63,403.00. We have incurred
losses since inception resulting in a shareholders' equity of US$1,373.00 and
working capital deficit of US$6,669.00.

General and administrative costs for the fiscal year ended March 31, 2000, were
US$42,503.00 primarily as a result of office and promotional expenses and loss
on foreign exchange. We anticipate that spending for general and administrative
costs for the next six months will be approximately US$20,000.00. Selling and
marketing costs for the fiscal year ended March 31, 2000 were US$142,572.00
primarily as a result of marketing the Luna Fertility Indicator.

We recognized a net loss for the fiscal year ended March 31, 2000 of
US$419,282.00which loss was primarily the result of developing markets for the
Luna Fertility Indicator, for professional fees (auditors and legal fees)
associated with keeping the Company compliant with Securities and Exchange
Commission reporting requirements, and for management and consulting fees.


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Our continued corporate existence is dependent on our ability to meet our
financing requirements and the success of our business plan.

Marketing and Channels of Distribution. Our subsidiary, Luna Fertility
Indicator, Inc., has entered into a management services contract with Melissa
Gervais, Inc. ("Gervais, Inc."). For an initial term of 10 years, Gervais, Inc.
will provide in-house marketing and public relations services and will
co-ordinate an advertising campaign in targeted media such as medical journals,
women's magazines, religious publications and other selected media. We will
attempt to market the Luna Fertility Indicator in major chain drug stores using
selected regional distributors.

Bathurst Sales ("Bathurst") of Downsview, Ontario, Canada's leading distributor
of cosmetics and personal care products, has been distributing the Luna
Fertility Indicator to its customers including London Drugs, Shoppers Drug Mart,
Pharma Plus Drugmarts, Lawton's Drug Stores and Uniprix since November 1999.
Bathurst distributes products such as Revlon, John Frieda, Elizabeth Arden,
Rubbermaid, AM Cosmetics and Vogue International, and its current clients are
those to whom we will market and promote the Luna Fertility Indicator. Bathurst
is informed of the dates of our advertising programs to co-ordinate any
co-operative advertising plans that its clients may have for the period.
Bathurst has orally agreed to distribute the Luna Fertility Indicator and
negotiations are ongoing to reduce the terms, conditions and covenants to
writing. Luna Fertility Indicator, Inc., has also entered into distribution
arrangements with companies in New Zealand and South Africa. However, the
specific terms and conditions of such distribution arrangements are the subject
of ongoing negotiations.

We have developed new and attractive ways to market the Luna Fertility
Indicator, including new packaging and marketing materials which will enhance
the appeal of the Luna Fertility Indicator. The Luna Fertility Indicator is now
being represented in Canada by two distributors. The first distributor,
Bathurst, as mentioned in the preceding paragraph, sells various products to
traditional drug stores. The second distributor, Inno-Vite, sells various
products to health food stores such as Caper's, Vitamin House, Choices,
Nutrition House, GNC and Noah's Natural Foods. We continue to negotiate with the
companies interested in our Luna Fertility Indicator in other markets throughout
the world. We anticipate that distribution arrangements will be finalized within
six (6) months of securing the necessary governmental approvals in those foreign
markets.

We are also involved in the advertising and promotion of the Luna Fertility
Indicator on the Internet. Our Internet website is www.lunafert.com. Our website
contains general information on how the Luna Fertility Indicator works,
frequently asked questions, the chart, where to purchase the Luna Fertility
Indicator (such information lists locations in only those jurisdictions where
the Luna Fertility Indicator may be sold) and the Company. In March 2000, we
launched our e-commerce website where we will sell the Luna Fertility Indicator.
We plan to take all of the necessary precautions to ensure secure transmission
of confidential information, including, but not necessarily limited to, the
reliance on encryption and authentication technology.

Company's Plan of Operation For Next 12 Months. During the next 12 months, we
plan to continue marketing the Luna Fertility Indicator. We hope that our
efforts will allow us to develop markets in other jurisdictions. We cannot
guarantee, however, that we will be able to acquire the necessary regulatory
approval to market the Luna Fertility Indicator in additional markets. We have
enjoyed modest sales of the Luna Fertility Indicator and we hope to increase
such sales. We anticipate developing relationships with certain distributors who
will facilitate the distribution of the Luna Fertility Indicator in additional
markets. We will also continue to research ways to improve the attractiveness of
the product and the appeal to the average household. We will also pursue other
opportunities as they arise.

Changes in Number of Employees. During the next 12 months, depending on the
success of our marketing plan, we may be required to hire additional employees;
however, we are not able to provide a reasonable estimate of the number of such
additional employees which may be required at this time.


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<PAGE>


Item 7.  Financial Statements

Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Annual Report on Form 10-KSB.

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure

There have been no changes in or disagreements with the Company's accountants
since the formation of the Company required to be disclosed pursuant to Item 304
of Regulation S-B.

PART III.

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

The directors and principal executive officers of the Company are as specified
on the following table:

<TABLE>
<CAPTION>
        ===============================================================================================================
        Name                   Age    Position
        ---------------------------------------------------------------------------------------------------------------
<S>                            <C>    <C>
        Gordon McDougall       44     President,   Chief  Executive  Officer,   Secretary,   Chief  Financial  Officer,
                                      Treasurer,  sole  director  of  the  Company.  Secretary  and  Director  of  Luna
                                      Fertility Indicator, Inc.
        ---------------------------------------------------------------------------------------------------------------
</TABLE>

Gordon McDougall, age 44, is President, Chief Executive Officer, Secretary,
Chief Financial Officer, Treasurer and sole director of the Company. Mr.
McDougall has 17 years experience in general management, venture capital and
financing, primarily with emerging companies. From 1994 to January 1996 he was
Chief Executive Officer for Sierra Capital Corporation. Previously, Mr.
McDougall was a registered representative with Nesbitt, Thomson, Bongard, Inc;
Corporate Development Consultant; SOLUS Technology Corporation (building
automation systems) and President of LMB Holdings Ltd. (consulting and
franchising). From April 1986 to June 1987, Mr. McDougall was Vice President of
Orcatron Communications, Inc. From September 1987 to May 1998, Mr. McDougall was
President of LMB Holdings Ltd. Mr. McDougall was also President of Campbell
Technologies Inc. (an OTCBB company specializing in the acquisition, funding and
management of emerging technology-based companies), and President, Chief
Financial Officer and Secretary of C-2 Technologies, Inc. Mr. McDougall is the
current President and Chief Executive Officer of Campbell Capital Advisory, Inc.
Mr. McDougall's experience as a director includes directorships with Orcatron
Communications Ltd. (manufacturer of wireless communication equipment for
underwater use by commercial, military and recreational divers); Shelter Island
Venture Capital (VCC) Corp. (founding shareholder); Raider Reach Manufacturing
Ltd (construction equipment); BCS Technology Inc.; Sierra Capital Corp.;
Campbell Technologies, Inc.; and C-2 Technologies, Inc.

On or about March 17, 2000, Gordon McDougall resigned as the Company's
President. Mr. McDougall agreed to remain as a director of the Company. Also on
or about March 17, 2000, we approved the appointment of Mr. Brad Desaulniers as
President and a director of the Company.

On May 9, 2000, we accepted the resignation of Mr. Brad Desaulniers as President
and Chief Operating Officer and as a director of the Company. Mr. Desaulniers
left to pursue other business opportunities, and his short-term management
contract was not renewed. There were no disagreements on any matter relating to
operations, policies or practices. Mr. McDougall was again appointed President
of the Company.

There are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining Mr. McDougall from engaging in or continuing any conduct, practice
or employment in connection with the purchase or sale of securities, or
convicting


                                       9

<PAGE>


him of any felony or misdemeanor involving a security, or any aspect of the
securities business or of theft or of any felony, nor are any of the officers or
directors of any corporation or entity affiliated with the Company so enjoined.

Section 16(a) Beneficial Ownership Reporting Compliance. The Company believes
that Mr. McDougall and all principal shareholders have filed all reports
required to be filed by those persons on, respectively, Form 3 (Initial
Statement of Beneficial Ownership of Securities), Form 4 (Statement of Changes
of Beneficial Ownership of Securities), or Form 5 (Annual Statement of
Beneficial Ownership of Securities).

Item 10. Executive Compensation.

Any compensation received by officers, directors, and management personnel of
the Company will be determined from time to time by the Board of Directors of
the Company. Officers, directors, and management personnel of the Company will
be reimbursed for any out-of-pocket expenses incurred on behalf of the Company.
Compensation to the Company's officers is specified on the following chart:

The table set forth below summarizes the annual and long-term compensation for
services in all capacities to the Company for the year ended payable to the
President of the Company and the other executive officers of the Company whose
total annual salary and bonus is anticipated to exceed US$50,000 during the year
ending March 31, 2001.

<TABLE>
<CAPTION>
======================================================================================
Name and Principal Position    Year    Salary ($)   Bonus ($)     Other Compensation
--------------------------------------------------------------------------------------
<S>                            <C>     <C>          <C>           <C>
None                           2000    None         None          None
                               2001
======================================================================================
</TABLE>

Shares Issued as Compensation for Services. During the Company's fiscal year
ended March 31, 2000, we did not issue any shares of our $.001 par value common
stock as compensation for consulting and other services.

Compensation of Directors. Directors who are also employees of the Company
receive no extra compensation for their service on the Board of Directors of the
Company.

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

The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of March 31, 2000, by (i) each person
or entity known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of common stock, (ii) each of the Company's directors and
named executive officers, and (iii) all directors and executive officers of the
Company as a group. The number of shares outstanding of the issuer's only class
of Common Stock, $.001 par value, was 8,040,660 on March 31, 2000.

(a) Security Ownership of Certain Beneficial Owners. Other than officers and
directors, there are no other persons who are beneficial owners of 5% or more of
the Company's issued and outstanding common stock.

(b) Security Ownership of Management. The directors and principal executive
officers of the Company directly or beneficially own, in the aggregate,
6,000,000 shares of the Company's common stock, or approximately 74.6 % of the
issued and outstanding common shares, as set forth on the following table
(percentages are rounded off to the nearest one-tenth of one percent):

<TABLE>
<CAPTION>
==============================================================================================================================
Title of Class   Name of Beneficial Owner               Amount of Beneficial Owner                  Percent of Class
------------------------------------------------------------------------------------------------------------------------------
<S>              <C>                                             <C>                                      <C>
Common Stock     Campbell Capital Advisory, Inc.
                 10832 Magnolia Court                            6,000,000(1)                             74.6%
                 Delta, British Columbia,
                 Canada V4K 2L3
==============================================================================================================================
</TABLE>


                                       10

<PAGE>


(1) Gordon McDougall, the Company's President, Chief Executive Officer,
Secretary, Chief Financial Officer, Treasurer and sole director, is the
President and sole shareholder of Campbell Capital Advisory, Inc.

Changes in Control. We are not aware of any arrangements which may result in
"changes in control" as that term is defined by the provisions of Item 403(c) of
Regulation S-B.

Item 12. Certain Relationships and Related Transactions.

Related Party Transactions. Gordon McDougall is the President, Chief Executive
Officer, Secretary, Chief Financial Officer and sole director of the Company. He
is also the President and sole shareholder of Campbell Capital Advisory, Inc.
("Campbell"). From the date of incorporation to March 31, 2000, Campbell
advanced US$82,017.00 to the Company to fund the Company's initial operations.
To date, the Company has repaid US$81,933.00 leaving an unpaid balance of
US$84.00. The Company is not required to repay the loan within any specified
period of time.

The Company and Campbell have a verbal agreement whereby the Company pays
Campbell consulting fees for the services of Gordon McDougall of approximately
US$5,000 per month. Mr. McDougall is the President and the sole shareholder of
Campbell, as well as the President, Chief Executive Officer, Secretary, Chief
Financial Officer and sole director of the Company. During the fiscal year ended
March 31, 2000, the Company had paid or accrued US$60,000.00 in consulting fees
to Campbell.

The persons serving as officers and directors of the Company have existing
responsibilities and, in the future, may have additional responsibilities, to
provide management and services to other entities in addition to the Company. As
a result, conflicts of interest between the Company and the other activities of
those persons may occur from time to time. We will attempt to resolve any such
conflicts of interest in favor of the Company. The officers and directors of the
Company are accountable to the Company and its shareholders as fiduciaries,
which requires that such officers and directors exercise good faith and
integrity in handling our affairs. A shareholder may be able to institute legal
action on behalf of the Company or on behalf of that shareholder and all other
similarly situated shareholders, to recover damages or for other relief in cases
of the resolution of conflicts in any manner prejudicial to the Company.

Item 13.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

Exhibit No.
-----------

3.1             Certificate of Incorporation
                (Charter Document)*

3.2             Amendment to Certificate of Incorporation
                (Charter Document)*

3.3             Amendment to Certificate of Incorporation
                (Charter Document)*

3.4             Bylaws*

4.              Instruments Defining the Rights of Holders (Not Applicable)

10.1            (List Material Contracts) *

11.             Statement Re: Computation of Per Share Earnings(Loss)**


                                       11

<PAGE>


16.             Letter on change in certifying accountant (Not Applicable)

18.             Letter on Change in Accounting Principles (Not Applicable)

21.             Subsidiaries of the Registrant**

22.             Published Report Regarding Matters Submitted to Vote
                (Not Applicable)

23.1            Consent of Auditors

23.2            Consent of Counsel (Not Applicable)

24.             Power of Attorney (Not Applicable)

27.             Financial Data Schedule

99.             Additional Exhibits (Not Applicable)

*Previously filed as Exhibits to Registration Statement on Form 10-SB and all
amendments thereto filed with the Commission.

**Included in consolidated financial statements filed herewith.

     (b) Reports on Form 8-K

     The Company filed a report on Form 8-K with the Commission announcing the
     appointment of Brad Desaulniers as President and a director of the Company.

     The Company filed a report on Form 8-K with the Commission announcing the
     resignation of Brad Desaulniers as President and a director of the Company.


                                       12

<PAGE>


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned in the City of
Vancouver, British Columbia, Canada, on July 13, 2000.

                                          Luna Medical Technologies, Inc.,
                                          a Nevada corporation

                                          By: /s/ Gordon McDougall
                                             -----------------------------------
                                               Gordon McDougall
                                          Its: President and sole director


                                       13

<PAGE>


                     [LETTERHEAD] Williams & Webster, P.S.


Board of Directors
Luna Medical Technologies, Inc.
Vancouver, BC


                          Independent Auditor's Report

We have audited the accompanying consolidated balance sheets of Luna Medical
Technologies, Inc. (formerly Luna Technologies, Inc.), as of March 31, 2000 and
1999, and the related consolidated statements of operations and comprehensive
income, stockholders' equity and cash flows for the year ended March 31, 2000,
and for the period from January 19, 1999 (inception) to March 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Luna Medical Technologies,
Inc., formerly Luna Technologies, Inc. as of March 31, 2000 and 1999, and the
results of its operations and its cash flows for the year ended March 31, 2000,
and for the period from January 19, 1999 (inception) to March 31, 1999, in
conformity with generally accepted accounting principles.

As discussed in Note 2, the Company has an accumulated deficit and negative
working capital. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The success of the Company is dependent
on successfully marketing its licensed product. Management's plans regarding
those matters are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Williams & Webster
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
July 12, 2000

<PAGE>


                        LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                          March 31,    March 31,
                                                                            2000         1999
                                                                          ---------    ---------
<S>                                                                       <C>          <C>
 ASSETS
     CURRENT ASSETS
         Cash                                                             $  63,403    $   9,897
         Accounts receivable (net of $1,375 allowance for
              doubtful accounts for March 31, 2000)                             706        1,091
         Loan receivable                                                         --       40,000
         GST receivable                                                      10,476          920
         Prepaid expenses                                                     9,421       22,090
         Inventory                                                              223        1,012
                                                                          ---------    ---------
             Total Current Assets                                            84,229       75,010
                                                                          ---------    ---------

     PROPERTY, PLANT AND EQUIPMENT
         Office equipment                                                     6,045           --
         Less depreciation                                                     (504)          --
                                                                          ---------    ---------
             Total Property, Plant and Equipment                              5,541           --
                                                                          ---------    ---------

     OTHER ASSETS
         Licensing agreement                                                      1            1
         Trademark, net of amortization                                       2,500           --
                                                                          ---------    ---------
             Total Other Assets                                               2,501            1
                                                                          ---------    ---------

         TOTAL ASSETS                                                     $  92,271    $  75,011
                                                                          =========    =========

LIABILITIES & STOCKHOLDERS' EQUITY
     CURRENT LIABILITIES
         Accounts payable                                                 $  26,307    $  10,556
         Accounts payable - related parties                                  59,169           --
         Accrued expenses                                                     3,339       16,453
         Royalties payable                                                       --          130
         Short terms loans - related parties                                  2,083        4,469
                                                                          ---------    ---------
             Total Current Liabilities                                       90,898       31,608
                                                                          ---------    ---------

     COMMITMENTS AND CONTINGENCIES                                               --           --
                                                                          ---------    ---------

         TOTAL LIABILITIES                                                   90,898       31,608
                                                                          ---------    ---------

     STOCKHOLDERS' EQUITY
         Preferred stock, 5,000,000 shares authorized, $.001 par value;
             no shares issued and outstanding                                    --           --
         Common stock, 50,000,000 shares authorized, $.001 par value;
             8,040,660 and 7,310,660 shares issued and outstanding,
             respectively                                                     8,041        7,311
         Additional paid-in-capital                                         434,459       70,189
         Stock subscriptions receivable                                          --       (5,000)
         Accumulated deficit                                               (448,379)     (29,097)
         Accumulated other comprehensive loss                                 7,252           --
                                                                          ---------    ---------
             Total Stockholders' Equity                                       1,373       43,403
                                                                          ---------    ---------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $  92,271    $  75,011
                                                                          =========    =========
</TABLE>


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


                                       2

<PAGE>


                        LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME


<TABLE>
<CAPTION>
                                                        Year        Period from
                                                        Ended     January 19, 1999
                                                       March 31,    to March 31,
                                                         2000           1999
                                                     -----------    -----------
<S>                                                  <C>            <C>
REVENUE                                              $   111,712    $     1,020

COST OF GOODS SOLD                                        75,134            827
                                                     -----------    -----------

GROSS PROFIT                                              36,578            193
                                                     -----------    -----------

EXPENSES
      Depreciation and amortization                          577           --
      Consulting                                         101,746         13,163
      Professional fees                                  141,073          5,304
      Marketing expense                                  142,572          5,907
      General and administrative expense                  42,503            673
      Rent                                                 9,041          1,700
      Travel expense                                      15,760          1,199
      Stock issuance costs                                  --            1,344
                                                     -----------    -----------
           Total Expenses                                453,272         29,290
                                                     -----------    -----------

LOSS FROM OPERATIONS                                    (416,694)       (29,097)

OTHER INCOME AND EXPENSES
      Interest expense                                    (2,588)          --
                                                     -----------    -----------

LOSS BEFORE INCOME TAXES                                (419,282)       (29,097)

INCOME TAXES                                                --             --
                                                     -----------    -----------

NET LOSS                                                (419,282)       (29,097)

OTHER COMPREHENSIVE INCOME
      Foreign currency translation gain                    7,252           --
                                                     -----------    -----------

COMPREHENSIVE LOSS                                   $  (412,030)   $   (29,097)
                                                     ===========    ===========

      NET LOSS PER COMMON SHARE                      $     (0.06)   $     (0.01)
                                                     ===========    ===========

      WEIGHTED AVERAGE NUMBER OF BASIC AND DILUTED
           COMMON STOCK SHARES OUTSTANDING             7,447,190      5,154,552
                                                     ===========    ===========
</TABLE>


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


                                       3

<PAGE>


                        LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  FROM JANUARY 19, 1999 THROUGH MARCH 31, 2000


<TABLE>
<CAPTION>
                                          Common Stock
                                    ---------------------    Additional        Stock                                      Total
                                      Number                  Paid-In      Subscriptions  Comprehensive   Accumulated  Stockholders'
                                    of Shares    Amount       Capital        Receivable    Income/Loss      Deficit       Equity
                                    ---------   ---------    ---------       ---------    -------------    ---------    ---------
<S>                                 <C>         <C>          <C>             <C>            <C>           <C>          <C>
Issuance of common stock
       through March 1999 for
       cash at $.001 per share      7,170,000   $   7,170    $    --         $    --        $    --       $    --      $   7,170

Issuance of common stock
       through March 1999 for
       cash at $.50 per share         140,660         141       70,189          (5,000)          --            --         65,330

Loss for period ending,
       March 31, 1999                    --          --           --              --             --         (29,097)     (29,097)
                                    ---------   ---------    ---------       ---------      ---------     ---------    ---------

Balance, March 31, 1999             7,310,660       7,311       70,189          (5,000)          --         (29,097)      43,403

Subscription received                    --          --           --             5,000           --            --          5,000

Issuance of common stock for
       cash at $0.50 per share        630,000         630      314,370            --             --            --        315,000

Issuance of common stock in
       exchange for debt at $0.50
       per share                      100,000         100       49,900            --             --            --         50,000

Net loss, for year ending
       March 31, 2000                    --          --           --              --            7,252      (419,282)    (412,030)
                                    ---------   ---------    ---------       ---------      ---------     ---------    ---------

Balance, March 31, 2000             8,040,660   $   8,041    $ 434,459       $    --        $   7,252     $(448,379)   $   1,373
                                    =========   =========    =========       =========      =========     =========    =========
</TABLE>


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


                                       4

<PAGE>


                        LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                            Year             Period from
                                                           Ended           January 19, 1999
                                                          March 31,          to March 31,
                                                            2000                 1999
                                                         ---------         ------------------
<S>                                                      <C>                  <C>
Cash flows from operating activities:
      Net loss                                           $(419,282)           $ (29,097)
      Adjustments to reconcile net loss
           to net cash used by operating activities:
           Depreciation and amortization                       577                 --
           Non-cash expenses                                40,000                 --
      Changes in assets and liabilities:
           Accounts receivable                              (9,171)              (2,011)
           Prepaid expenses                                 12,669              (22,090)
           Inventory                                           789               (1,012)
           Accounts payable                                 74,790               10,556
           Accrued liabilities                             (13,114)              16,583
                                                         ---------            ---------
Net cash used in operating activities                     (312,742)             (27,071)
                                                         ---------            ---------

Cash flows from investing activities:
      Investment in capital assets                          (6,045)                --
      Investment in intangibles                             (2,577)                --
      Loan to licensor pursuant to licensing agreement        --                (40,000)
      Acquisition cost of license                             --                     (1)
                                                         ---------            ---------
Net cash used by investing activities                       (8,622)             (40,001)
                                                         ---------            ---------

Cash flows from financing activities:
      Proceeds from sale of common stock                   320,000               72,500
      Proceeds from short-term loan payable                 93,598               20,469
      Repayment of short-term loan payable                 (45,980)             (16,000)
                                                         ---------            ---------
Net cash provided by financing activities                  367,618               76,969
                                                         ---------            ---------

Change in cash                                              46,254                9,897

      Foreign currency translation gain                      7,252                 --

Cash, beginning of period                                    9,897                 --
                                                         ---------            ---------

Cash, end of period                                      $  63,403            $   9,897
                                                         =========            =========

Supplemental disclosures:
      Interest paid                                      $    --              $    --
      Income taxes paid                                  $    --              $    --

Non-cash activities:
      Loan repaid through services provided              $  40,000            $    --
      Issued stock in exchange for outstanding debt      $  50,000            $    --
</TABLE>


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


                                       5

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Luna Medical Technologies, Inc., formerly Luna Technologies, Inc., (hereinafter
"the Company"), was incorporated January 19, 1999 under the laws of the State of
Nevada for the purpose of engaging in any lawful activity. The financial
statements include all activity of the Company and its wholly owned subsidiary,
Luna Fertility Indicator, Inc. The Company has entered into an exclusive
worldwide license agreement with Luna Products, Inc., the manufacturer of the
Luna Fertility Indicator, to distribute the Indicator. The Company sells its
product across Canada, at retail, wholesale and to distributorships, with 90% of
the sales being to distributors. The Company maintains an office in Vancouver,
British Columbia. The Company has elected a fiscal year-end of March 31.

On May 31, 1999, the Company amended its articles of incorporation to reflect
the name change to Luna Medical Technologies, Inc.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Luna Medical Technologies,
Inc. is presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management, which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

The Company was formed on January 19, 1999 and was in the development stage
through March 31, 1999. The year ending March 31, 2000 is the first year during
which it is considered an operating company.

Accounting Method

The Company's financial statements are prepared using the accrual method of
accounting.

Consolidation Policy

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary. Inter-company transactions and balances
have been eliminated in the consolidation.

Loss Per Share

Basic loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted average
number of shares was calculated by taking the number of shares outstanding and
weighting them by the amount of time that they were outstanding. Diluted loss
per share is the same as basic loss per share, as the inclusion of common stock
equivalents would be anti-dilutive.


                                       6

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Provision for Taxes

At March 31, 2000, the Company had net operating losses of approximately
$448,000. No provision for taxes or tax benefit has been reported in the
financial statements, as there is not a measurable means of assessing future
profits or losses.

Use of Estimates

The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, revenues, and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.

Inventory

Inventory consists of the Luna Fertility Indicator, and is stated at cost,
determined by the first-in first-out method. The Company maintains a minimal
supply of inventory, as it has a short turnaround time with its supplier.

Advertising

Advertising costs are charged to operations in the year incurred.

Impairment of Long-lived Assets

The Company evaluates the recoverability of long-lived assets when events and
circumstances indicate that such assets might be impaired. The Company
determines impairment by comparing the undiscounted future cash flows estimated
to be generated by these assets to their respective carrying amounts. At March
31, 2000, no impairment to assets was deemed to have occurred.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three
months or less at the date of acquisition to be cash equivalents.

Revenue Recognition

Revenues and cost of revenues are recognized when title to the product passes.
Title passes when the product leaves the Company's location in Vancouver,
British Columbia.


                                       7

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derivative Instruments

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This new standard establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value.

At March 31, 2000, the Company has not engaged in any transactions that would be
considered derivative instruments or hedging activities.

Compensated Absences

The Company at the present time has no employees. At such time as the Company
has employees, they will be entitled to paid vacation, paid sick days and
personal days off depending on job classification, length of service, and other
factors. The Company's policy will be to recognize the cost of compensated
absences when actually paid to employees.

Reclassifications

Certain amounts from prior periods have been reclassified to conform with the
current period presentation. This reclassification has resulted in no changes to
the Company's accumulated deficit previously reported.

Translation of Foreign Currency

The Company has adopted Financial Accounting Standard No. 52. Foreign currency
translation resulted in an aggregate exchange gain of $7,252 for the year ended
March 31, 2000. The Company recorded this transaction in the Statement of
Stockholders' Equity as other comprehensive income.

Going Concern

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.


                                       8

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

As shown in the accompanying financial statements, the Company incurred a net
loss of $419,282 and negative working capital for the year ended March 31, 2000.
The Company is currently marketing its licensed product which will, if
successful, mitigate these factors which raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence. Management
intends to seek additional capital from new equity issuances that will provide
funds needed to increase liquidity, fund internal growth and fully implement its
business plan.

Segment Information

The Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," during the fiscal year ended March 31, 2000. SFAS No.
131 also requires disclosures about products and services, geographic areas and
major customers. The adoption of SFAS No. 131 did not affect the Company's
results of operations or financial position, but did affect the disclosure of
segment information as illustrated in Note 12.

NOTE 3 - SUBSIDIARIES

Formation of Luna Fertility Indicator, Inc.

On May 10, 1999, the Company incorporated a wholly owned subsidiary, Luna
Fertility Indicator, Inc., a British Columbia Corporation, to market and
distribute the licensed product.

NOTE 4 - CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS

The Company maintains cash accounts at two banks in Vancouver, British Columbia,
Canada. The Canadian dollar accounts are insured up to a maximum of $60,000 per
account. However, the United States dollar account is not insured.

NOTE 5 - FIXED ASSETS

Office equipment is stated at cost. Depreciation expense is computed using the
straight-line method over the useful life of the asset, and amounted to $498 for
the year ended March 31, 2000. Accumulated depreciation of $504 differs from
depreciation expense due to foreign currency translation (Note 2).


                                       9

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 6 - INTANGIBLE ASSETS

License Agreement

The license agreement with LPI was stated at a value of $1.

Trademark

The Company capitalized the expenses of acquiring the Luna trademark and will
amortize the expenses over a fifteen-year period, which represents its estimated
useful life, using the straight-line method. Amortization expense for the year
ended March 31, 2000 amounted to $79. Accumulated amortization of $77 differs
from amortization expense due to foreign currency translation (Note 2).

NOTE 7 - SHORT-TERM LOANS - RELATED PARTIES

Short-term loans payable consists of the following at March 31, 2000 and 1999:

                                                   March 31,       March 31,
                                                     2000            1999
                                                    ------          ------
     Campbell Capital Advisory, Inc. (CCA)          $   84          $4,469
     Javelin Enterprises                             1,999               0
                                                    ------          ------
          Total                                     $2,083          $4,469
                                                    ======          ======

The CCA loan payable is unsecured and bears no interest. The Company intends to
pay the balance when funds become available. CCA is a related company under the
control of the Company's president (see Note 10).

The Javelin note payable is unsecured and bears 10 % interest per annum. Total
interest accrued during the year ending March 31, 2000 amounted to $2,075.
During December 1999, the Company issued 80,000 shares of common stock as
partial satisfaction of the note. Javelin Enterprises is a stockholder of the
Company (see Note 10).

The Company borrowed $9,700 from an unrelated company during the year ended
March 31, 2000. The loan accrued interest at a rate of 10 % per annum, which
amounted to $500. At March 23, 2000, the Company issued 20,000 shares of common
stock at $.50 per share in full settlement of the loan and partial settlement of
the outstanding interest.

NOTE 8 - COMMON STOCK

Upon incorporation, 7,310,660 shares of common stock were sold, 7,170,000 at
$.001 per share, and 140,660 at $.50 per share, under Regulation D, Rule 504.


                                       10

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 8 - COMMON STOCK (Continued)

During the year ended March 31, 2000 the Company issued 630,000 shares of common
stock for cash at $.50 per share. The Company also issued 100,000 shares of
common stock in settlement of outstanding debt at $.50 per share.

Subsequent to March 31, 2000, the Company accepted subscriptions to issue an
additional 125,000 shares of common stock at a cash prices of $.001 and $.50 per
share.

No shares of preferred stock were issued as of March 31, 2000.

NOTE 9 - WARRANTS AND OPTIONS

The Company issued one warrant with each share of common stock subscribed for
during a subscription period in autumn of 1999. The warrants have an exercise
price of $1.00 per share and expire December 1, 2000. As of March 31, 2000, no
warrants had been exercised and there are 410,000 warrants issued and
outstanding.

The Company does not have a formal stock option plan. However, the Company
issued options to two consultants during the year ended March 31, 2000. The
options were not valued due to the fact that the exercise price was in excess of
the fair market value at the grant date. Subsequent to the date of these
financial statements, the consultants relinquished their claim to these options.

NOTE 10 - RELATED PARTIES

The president and chief executive officer of the Company, Gordon C. McDougall,
is also the president and stockholder of Campbell Capital Advisory, Inc. (CCA),
which had advanced funds to the Company to begin operations and to retain the
services of an attorney. As of March 31, 2000, the Company owes CCA $84. In
addition, CCA provides management services for a quarterly fee of $15,000 plus
$12,000 for reimbursed expenses. For the year ended March 31, 2000, the Company
incurred a total of $60,000 in management fees and $46,200 in reimbursed
expenses. As of March 31, 2000 there is an outstanding accounts payable of
$45,867 to CCA.

The Company executed a promissory note in favor of a stockholder, for funds
loaned to the Company. As partial satisfaction of the note, 80,000 shares of
common stock were issued. As of March 31, 2000, the balance owing on the note is
$1,999, plus interest of $3,054.


                                       11

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 11 - COMMITMENTS AND CONTINGENCIES

Foreign Operations

The accompanying balance sheet includes $92,271 relating to the Company's assets
in Canada. Although this country is considered politically and economically
stable, it is always possible that unanticipated events in foreign countries
could disrupt the Company's operations.

Rent

The Company rents office space on a month-to-month basis.

License Agreement

On February 1, 2000, the Company signed a fifteen-year license agreement with
Luna Products, Inc. (LPI), which replaced all previous agreements. This
agreement sets the cost, minimum annual purchase requirements, minimum marketing
expense requirements and inventor royalty fee of $1 per unit sold of the Luna
Fertility Indicator.

Management Service Agreement

The Company's subsidiary signed a two-year agreement for management services.
The agreement expires August 31, 2001 at which time it may continue on a
year-to-year basis for ten years. The agreement requires a base monthly fee of
$5,000 CND, plus a 5 % bonus of the Company's subsidiary's operating profits.

Concentrations

LPI is the sole supplier of the Company's product.

NOTE 12 - SEGMENT INFORMATION

As described in Note 2, the Company adopted SFAS No. 131 in its fiscal year
2000. The Company's operations are classified into two principal reporting
segments that provide different products or services. Separate management of
each section is required because each business unit is subject to different
marketing, and production strategies.


                                       12

<PAGE>


                         LUNA MEDICAL TECHNOLOGIES, INC.
                       (Formerly Luna Technologies, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 12 - SEGMENT INFORMATION (Continued)

The table below presents information about the Company's reportable segments:

<TABLE>
<CAPTION>
                                                      Fiscal Year 2000
                                    ------------------------------------------------------

                                       Luna Medical      Luna Fertility
                                    Technologies, Inc.   Indicator, Inc.      Consolidated
                                    ------------------   ---------------      ------------
<S>                                     <C>                 <C>                 <C>
     External Revenue                   $   --              $111,700            $111,700
     Operating loss                     $311,400            $105,300            $416,700
     Interest income                    $   --              $   --              $   --
     Depreciation and amortization      $    500            $    100            $    600
     Interest expense                   $  2,600            $   --              $  2,600
     Total assets                       $ 76,700            $ 16,500            $ 92,200
</TABLE>

The first segment, Luna Medical Technologies, Inc. is a holding company for the
second segment and does not rely on direct revenues. The second segment, Luna
Fertility Indicator, Inc., an operating company, derives revenues from the
marketing and distribution of the licensed product.

The accounting policies for the two reportable segments are the same as those
described in the summary of significant accounting policies. The Company
allocates resources to its operating segment, and evaluates performance based on
operating income.

NOTE 13 - YEAR 2000 ISSUES

Like other companies, Luna Medical Technologies, Inc. could be adversely
affected if the computer systems it, or its suppliers or customers, uses do not
properly process and calculate date-related information and data from the period
surrounding and including January 1, 2000. This is commonly known as the "Year
2000" issue. Additionally, this issue could impact non-computer systems and
devices such as production equipment, elevators, etc. The costs related to Year
2000 compliance are expensed as incurred. At this time, there have been no known
effects to the Company in regards to the Year 2000 issue.

NOTE 14 - SUBSEQUENT EVENTS

Subsequent to the date of the financial statements, the Company's subsidiary
entered into a one year marketing agreement that requires a monthly payment of
$6,000 CND plus taxes. In addition, the Company's subsidiary will pay a 5%
commission of gross sales generated by the contractor. This agreement was then
cancelled on May 15, 2000.


                                       13