SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------
                                   FORM 10-KSB
                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

<TABLE>
<CAPTION>
<S>                            <C> <C>                                             <C> <C>
For the Fiscal Year Ended June 30, 2000                       Commission File No.  000-28371
                          -------------                                            ---------
</TABLE>

                               Endovasc Ltd., Inc.
                 (Name of Small Business Issuer in Its Charter)

<TABLE>
<CAPTION>
<S>                                                                               <C>
                    Nevada                                                        76-0512500
         ---------------------------------------                                -------------------------
         (State or Other Jurisdiction of                                        (I.R.S. Employer
         Incorporation or Organization)                                         Identification Number)

</TABLE>


              15001 Walden Road Suite 108 Montgomery, Texas 77356
       ----------------------------------------------------- ------------
               (Address of principal executive offices) (Zip Code)

                                 (936) 448-2222
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:   None

Securities registered pursuant to Section 12(g) of the Exchange Act :

                    Common Stock, Par Value $0.001 Per Share

     Check whether the Issuer: (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 []

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B contained herein, 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.

     The Company's revenues for its most recent fiscal year were $31,087.

     The aggregate  market value of the voting stock held by  non-affiliates  of
the Company was  $6,918,268 as of September  25, 2000,  based on the average bid
and asked price of $0.875 per share as of that date.

     There were 12,718,370 shares of Common Stock, $.001 par value,  outstanding
as of September  25, 2000.  Additionally,  there were 15,000  shares of Series A
Convertible  Preferred  Stock,  $.001  par value per  share,  outstanding  as of
September 25, 2000.


<PAGE>
                                     PART I


Item 1.           DESCRIPTION OF BUSINESS.

History

     We incorporated as a biopharmaceutical  company under the laws of the state
of Nevada on June 10,  1996,  under the name  Endovasc,  Inc.  Upon our  initial
incorporation,  we were  authorized  to issue an aggregate  of 25,000  shares of
capital  stock with a par value of $0.001 per share.  On September  5, 1996,  we
amended our  articles of  incorporation  to increase  our  authorized  shares to
100,000,000 shares of common stock, par value $0.001 per share. On May 28, 1997,
we amended our articles of  incorporation  to change our name to Endovasc  Ltd.,
Inc. On June 2, 1997,  we amended our articles of  incorporation  to authorize a
total of  120,000,000  shares of capital stock,  par value $0.001 per share,  of
which  100,000,000  shares are common shares and 20,000,000 shares are preferred
shares.

     On or about  October 8, 1999, we received  preclinical  approval to file an
Investigational  New Drug  application for Phase I and II clinical trials of our
Liprostin  technology.  On or about February 25, 1999, we obtained the exclusive
licensing rights to Nicotine Receptor Agonist  technology from the University of
Stanford,  in exchange for stock and cash. We have commenced  preclinical trials
on the safety and  efficacy  of NRA in  conjunction  with  Stanford  University.
Pursuant to our agreement  with  Stanford  University,  we are  financing  their
staff's   clinical  trials  and  animal  studies  of  NRA  at  their  California
facilities.

     The Company has not been subject to bankruptcy, receivership or any similar
proceeding.


Overview

     We develop,  market and license  biopharmaceutical  products,  particularly
liposomal drug delivery methods, for the human healthcare  industry.  We develop
liposomes,  which are microscopic  cell-like spheres composed of a thin, durable
lipid membrane  surrounding a hollow  compartment.  Liposomes entrap and protect
drugs from degradation in the blood stream and can be engineered to regulate the
transport of molecules across their outer membrane.  Using this  technology,  we
are developing  products that deliver drugs to their intended target and release
them with efficiency and control.

     Currently,  our  product  development  is  focused on two  product  lines -
Liprostin and Nicotine  Receptor  Agonist.  Although we hold patents and patents
pending for products in the process of clinical  testing,  our products have not
been  approved  for  general  sales.  Consequently,  we have not  generated  any
revenues and have historically  operated with significant  losses.  Although our
current  development  efforts focus on vascular (heart and lung) applications of
our  products,  we intend to develop our  technologies  for use in many  medical
treatment  applications.  We  believe  that this  unique  and  highly  adaptable
technology will put our products at the forefront of the $2 billion drug market.

     Liprostin Technology

     Our Liprostin  products provide targeted  delivery of Prostaglandin  E-1 to
blood vessels in connection with angioplasty procedures. Angioplasty is a common
medical  procedure  that utilizes a small  balloon-like  structure to expand and
clear blocked  cardio-pulmonary  blood  vessels.  Prostaglandin  E1, a naturally
<PAGE>
occurring hormone,  is used to prevent common secondary blockages from occurring
after angioplasty treatment; these blockages are known as restenosis. Restenosis
following  balloon  angioplasty  or stent  placement is the most common  problem
occurring in the over 1,000,000  patients  undergoing these procedures  annually
worldwide,  according  to the  American  Heart  Association.  The  incidence  of
restenosis  can  be  as  high  as  40-50%,   according  to  the  American  Heart
Association,  within six months of the procedure (slightly less with stents) and
most drugs tested have not yet been proven to reduce restenosis significantly in
clinical  trials.  Similarly,  Prostaglandin  E1's short  lifespan  in the blood
stream can render it ineffective in preventing  restenosis.  Liprostin  delivery
system  uses  polymer  coatings  and  emulsions  to  provide  a longer  and more
controlled release of Prostaglandin E1 and to improve therapeutic  effectiveness
of the drug.

     We are developing  Lipostrin coated balloon catheters and stents for varied
vascular  applications.  As described above,  balloon  catheters are utilized to
physically   expand  and  clear  blocked  blood  vessels  in  vascular  surgical
procedures.  Conversely,  stents  are small  structures  used  during  and after
vascular surgery to support vessels and deliver agents that promote healing.  We
intend to develop our Liprostin  product lines further to treat  conditions such
as restenosis,  coronary arrest,  occlusive disease,  ischemic ulcers, CLI (limb
salvage), claudicants, liver disease and arthritis.

     We are conducting clinical trial testing of Liprostin to obtain the Federal
Drug Administration  approval of its sale in the United States. Phase I clinical
trials test product safety and tolerance levels using a small group of subjects,
as well as providing  information  about the product's  effectiveness and dosage
levels.  Phase II clinical trials test product efficacy,  optional dosage levels
and potential contraindications or side effects using a larger patient group. We
intend to complete both phases of clinical trials by approximately  December 31,
2002.

     We have protected our proprietary rights to Liprostin technology through US
Patent  4,820,732,  US Patent  4,955,878  and Notice of  Allowance  to US Patent
5,980,551  received on November 9, 1999,  and  Trademark  Application  Ser.  No.
75/632,736 (Liprostin) and various patents pending.


     Nicotine Receptor Agonist Technology

     Our  Nicotine  Receptor  Agonist  technology  promotes  new growth of blood
vessels (known as angiogenesis or  vasculogenesis),  and has applications in the
treatment of heart disease, stroke, limb circulatory disease, and wound healing.
Researches at Stanford University  discovered the technology during a 1999 study
funded by the  Tobacco-Related  Diseases  Research  Program of the University of
California,  the American Heart Association,  the National  Institutes of Health
and the Deutsche Froschungsgemeinschkaft. While studying the damaging effects of
tobacco smoke,  researchers discovered that smokers appeared less susceptible to
deaths due to  infarction  as compared  to  non-smokers.  This  counterintuitive
discovery  suggested  that  low-dose  (non-smoked)  nicotine  had  extraordinary
angiogenic and vasculogenic growth factor potential. To develop technology based
on this unique discovery,  we obtained a worldwide exclusive right to the patent
application for Nicotine Receptor Agonist in February 2000.

     Further study of our Nicotine  Receptor  Agonist  technology  revealed more
conclusive results.  Experiments have shown that nicotine promotes  angiogenesis
and  vasculogenesis  in areas of the body  that are  deprived  of  proper  blood
supply.  Blockages of the arteries that feed an organ,  often caused by build-up
of fatty material,  cholesterol  and plaques in arterial walls,  may deprive the
tissue of proper  blood  supply.  These  blockage  reduce the body's  ability to
supply organs and surrounding tissue with nutrients,  particularly oxygen, which
results in a condition  called  ischemia.  Ischemia  reduces  cells'  ability to
function and in severe cases causes rapid cell death. The body naturally defends
against  ischemia by  reducing  the work  required  from the  affected  area and
attempting  to  grow  new  blood  vessels  into  the  ischemic  area.   Stanford
researchers found tobacco smokers had  significantly  more growth of new vessels
around  such  blockages  than  non-smokers,  apparently  due to the  therapeutic
effects of  nicotine.  Upon  further  analysis,  researchers  determined  that a
particular  fraction of the nicotine molecule could provide a method of treating
and preventing a range of diseases and ailments  involving  angiogenesis.  These
diseases,  such  as  myocardial  and  cerebral  infarction,  mesenteric  or limb
ischemia,  common wounds,  vascular occlusion,  and vascular stenosis,  commonly
called "hardening of the arteries", affect millions of persons every year in the
United States alone (American Heart Association).
<PAGE>
     We  estimate  that the market for  treatment  of these  diseases is over $5
billion.  For  example,  we estimate  that a course of  treatment  for  coronary
ischemia  utilizing  Nicotine  Receptor  Agonist drugs would cost  approximately
$10,000 to $15,000. This type of treatment would be significantly less expensive
and  intensive  than  current  alternatives  of  angioplasty  and or open  heart
surgery.  We hope to market a  commercially  viable  product using this Nicotine
Receptor Agonist technology within three years.


Distribution Methods

     Upon receipt of necessary  governmental  regulatory  consent,  we intend to
distribute  products  utilizing  our  Liprostin  and Nicotine  Receptor  Agonist
technologies  worldwide.  As previously  described,  we are developing Lipostrin
coated balloon  catheters and stents for varied vascular  applications.  We also
intend to develop new products  that use Liprostin to treat  conditions  such as
coronary  arrest,  occlusive  disease,  ischemic  ulcers,  CLI  (limb  salvage),
claudicants,  liver  disease  and  arthritis.  Although  we have  not  developed
specific product  applications for our Nicotine Receptor Agonist technology,  we
intend to develop and  distribute  products  for  treatment  of  myocardial  and
cerebral  infarction,  mesenteric  or limb  ischemia,  common  wounds,  vascular
occlusion and vascular stenosis.

     In addition to peer review, seminars,  journals and direct sales, we intend
to market and  distribute  our products in  conjunction  with business  partners
experienced in marketing and distribution in the  biopharmaceutical  and medical
industries.  If  we  are  unable  to  reach  an  agreement  with  marketing  and
distribution partners that is acceptable to us, we may raise the funds necessary
to create our own production,  marketing and distribution infrastructure through
a public offering of our securities.


Patents and Proprietary Rights

     We believe that  adequate  protection  of our  proprietary  technology is a
vital  aspect  of  our  business  operations.  Consequently,  we  pursue  patent
protection  for our  proprietary  technology in the United States and in foreign
countries, as deemed necessary to protect development of our operations.

     We have patent  protection for several products and are pursuing patent and
trademark  applications for additional  products.  In August 1996, Dr. Jackie R.
See  transferred  and assigned  patent rights in the United States,  Germany and
Canada for two of our  products.  The first  patent,  United  States  Patent No.
4,820,732, was issued on April 11, 1989, and protects our proprietary technology
regarding a "Method and  Composition  for Reducing  Dysfunction  in  Angioplasty
Procedures." The second patent,  United States Patent No. 4,955,878,  was issued
on September 11, 1990, and protects our proprietary  technology regarding a "Kit
for Treating  Arterial  Dysfunction  Resulting from Angioplasty  Procedures." We
have not maintained the  application of this second patent and intend to let its
protections  expire to the  benefit of the public  domain,  except as limited by
patent applications described below.
<PAGE>
     In addition to these assigned  patents,  we obtained a United States patent
for our proprietary  technology regarding a "Composition and Method for Making a
Biodegradable  Drug  Delivery  Stent," on November 9, 1999.  Similarly,  we have
filed a patent  application  for this  technology  under the Patent  Cooperation
Treaty,  as well as with the European  Patent office and European  Union.  These
applications seek patent protection in France, Germany and the United Kingdom.

     We have  United  States  patent  applications  pending  for  several  other
technologies.  In June 1997, we filed a United States patent application for our
proprietary  technology  regarding a "Method and Apparatus for Treating Vascular
Disease with PGE-1  Bearing  Liposomes."  In May 1999,  we filed a United States
patent  application for our proprietary  technology  regarding  "Prosthesis with
Biodegradable  Surface  Coating  and  Method  for  Making  Same."  The May  1999
application  is a  "continuation  in part" of our patent  application  regarding
"Composition and Method for Making a Biodegradable Drug Delivery Stent," and, if
granted, will protect this technology's application in various medical products.
In June 1999, we filed a United States patent  application  for our  proprietary
technology regarding "Sterically  Stabilized Liposomes with Improvement of Blood
Retention  Times  and  Targeting  of  Sites  of  Disease  by  Prostaglandins  in
Particulate Drug Carriers."

     We are  seeking  trademark  protection  for the  name  Liprostin(TM)  under
Trademark  Application  Ser. No.  75/632,736.  In May of 1999, the United States
Patent and  Trademark  Office  notified us that our pending  Patent US Ser.  No.
09/309,949 would be allowed (Notice of Allowance). We also own rights to several
trademarks  employed in our business,  including our logo, the registered domain
name of  www.endovasc.com,  and other trade and service  marks  identifying  our
products and services.

     In February  2000,  we obtained  exclusive  worldwide  licensing  rights to
develop,  manufacture, use and sell products incorporating nicotine and nicotine
agonists for  therapeutic  angiogenesis.  Pursuant to our  acquisition  of these
product  rights from the Leland  Stanford  Junior  University,  we agreed to pay
royalties to the university on sales of any products  incorporating the nicotine
agonist technology.  Our licensing rights may be terminated in the event that we
default on payment of royalties, in addition to certain other circumstances.

     It is important to note that other public and private institutions may have
obtained, or filed applications for, patents that we may need for development of
our products.  We cannot know the scope or validity of such patents,  the extent
that we may desire to acquire  licenses under such patents,  or the availability
of such licenses upon terms that are acceptable to us.


Governmental Regulation

     United   States   and   international   governmental   regulation   of  the
biopharmaceutical   industry  is  a  significant   factor  in  our   operations,
particularly our research and development  activities.  In the United States the
Food and Drug Administration oversees clinical testing, production and marketing
of our products for human therapeutic use through rigorous mandatory  procedures
and safety.

     The Food & Drug Administration  requires satisfaction of several procedures
prior to approving marketing and distribution of pharmaceutical  products in the
United  States.  These includes (i)  preclinical  tests,  (ii)  submission of an
application for an Investigational  New Drug, which must become effective before
commencing  human clinical trials,  (iii)  thoroughly  documented and supervised
human  clinical  trials to  determine  drug safety and  efficacy in its intended
application,  (iv)  submission  and  acceptance of an  Investigational  New Drug
Application, in the case of drugs, or a Product License Application, in the case
of biologics,  and (v) approval of the  Investigational  New Drug Application or
Product License  Application prior to commercial sale or shipment of the drug or
biologic.  In  addition  to  this  process,  each  domestic  drug  manufacturing
establishment   must  be   registered   or  licensed  with  the  Food  and  Drug
Administration.  Domestic  manufacturing  establishments  are  also  subject  to
inspections by the FDA and by other  federal,  state and local agencies and must
comply with Good Manufacturing Practices as required.
<PAGE>
     Clinical trials are typically  conducted in three sequential phases,  which
may overlap.  Phase I clinical  studies test dosage and  tolerance  upon initial
introduction  of  the  drug  to  humans.  Phase  II  clinical  studies  document
evaluation of drug safety and efficacy.  Phase III trials  document  large scale
evaluation  of drug safety and efficacy and may utilize  larger  patient  pools,
depending on the type of marketing approval that is sought.

     Clinical testing and the Food and Drug Administration  approval process for
a new product often involves  significant time and resources.  The Food and Drug
Administration  may grant an  unconditional  approval of a drug for a particular
indication or may grant approval  pending  further  post-marketing  testing.  In
addition,  further clinical studies may be required to provide additional safety
data or to  gain  approval  for an  alternative  product  application  than  was
originally approved.

     International  biopharmaceutical product sales and distribution are subject
to widely varying  regulatory  requirements.  Generally,  the European Union has
coordinated  its member  states'  common  standards for clinical  testing of new
drugs.  Due to difference in regulatory  restrictions  in the European Union and
other foreign jurisdictions the time required to obtain regulatory approval from
a foreign  country's  regulatory  agencies  may be longer or  shorter  than that
required for Food and Drug Administration approval.

     In addition to these  regulations,  our operation is subject to regulations
under state and federal law regarding occupational safety, laboratory practices,
the use and handling of  radioisotopes,  environmental  protection and hazardous
substance  control as well as other present and possible  future  local,  state,
federal and foreign regulation.


Competition

     Competition  in  the  biopharmaceutical   industry  and  the  liposome  and
lipid-based  product  area is  intense.  Factors  such as  product  performance,
patient compliance, physician acceptance, ease of use, safety, price, marketing,
distribution and adaptability of administration  are crucial to capturing market
position  in our  industry.  Competition  may also be  based on other  company's
development  of  alternative  products and  approaches  aimed at the  treatment,
diagnoses or prevention of the same diseases as our products.

     Competition  from other companies is based on scientific and  technological
factors,  the  availability of patent  protection,  the ability to commercialize
technological  developments,  the  ability  to obtain  government  approval  for
testing, manufacturing and marketing and the economic factors resulting from the
use of those  products.  Many  companies,  both  public and  private,  including
well-known  pharmaceutical  and chemical  companies,  many of which have greater
capital  resources  than we do, are seeking to develop lipid and liposome  based
products similar to our own. In addition, colleges, universities, and public and
private  research  institutions are similarly  seeking to establish  proprietary
rights to these product technologies.

     We face  established  and  well-funded  competition  from  other  companies
developing  liposome based drug delivery systems.  These competitors include Eli
Lilly, The Liposome Company and  Schering-Plough.  These companies generally use
liposome for the delivery of antitumor  drugs,  while our products are primarily
intended for use in vascular treatments.  To our knowledge,  current competition
in the vascular  treatment  area is limited to ReoPro(R)  sold by Censtocor  and
marketed by Eli Lilly, which is used in angioplasty.
<PAGE>
Research and Development

     We maintain  1,400 square feet of lab space  equipped  with  customary  wet
laboratory equipment at our headquarters in Montgomery, Texas.

     Our  research  and  development  efforts are focused on our core  product -
Liprostin.  We are conducting  clinical trial testing of Liprostin to obtain the
Federal Drug Administration  approval of its sale in the United States.  Phase I
clinical trials test product safety and tolerance  levels using a small group of
subjects, as well as providing information about the product's effectiveness and
dosage levels.  Phase II clinical trials test product efficacy,  optional dosage
levels and potential  contraindications  or side effects using a larger  patient
group.  We intend to complete  both phases of clinical  trials by  approximately
December 31, 2002.

     In  addition,  we  are  conducting  feasibility  studies  with  prospective
strategic  partners to find practical  collaborative  products that  incorporate
Liprostin  with other  technologies.  We intend to develop new uses for our core
product  Liprostin,  including  applications in hip or bone  prostheses,  cancer
treatment,  inflammatory  disease,  liver  disease and other  diseases that have
responded well to prostaglandin treatment.

     We  are  monitoring  and  assisting  Stanford   University's  research  and
development  of our Nicotine  Receptor  Agonist  technology  and have  commenced
preclinical  trials,  in  conjunction  with the  university,  on the  safety and
efficacy of this technology. Pursuant to our agreement with Stanford University,
we are financing  their staff's  clinical  trials and animal studies of Nicotine
Receptor  Agonist,  conducted at their California  facilities.  We are currently
developing this technology for use in treatment of peripheral occlusive arterial
disease, in addition to other applications.

     To date, all of our research and  development  has been carried out without
the need of  additional  plant and  equipment.  Although  we cannot  assure  the
adequacy of our current  plant and equipment  for future  operations,  we do not
intend to obtain additional plant or equipment at this time.


Employees

     As of June  30,  2000,  we  employed  fourteen  employees,  including  five
management  and nine support  staff  employees.  In addition,  we employ  twelve
part-time  consultants.  None of our  employees or  independent  contractors  is
subject to a collective  bargaining  agreement and we believe that our relations
with our employees are good.


Legal Proceedings

     We are not involved in any material litigation or legal proceedings and are
not aware of any potential material litigation or proceeding  threatened against
us.

<PAGE>
Item 2. DESCRIPTION OF PROPERTY.

     We maintain our executive  offices and research and development  facilities
at 15001 Walden Road, Suites 108, 234 and 235, Montgomery, Texas 77356. We lease
these 3,550  square  foot  facilities  at an  aggregate  monthly  rental rate of
$2,750.

     We believe  that our  facilities  are  adequate  for our current  levels of
operations.


Item 3. LEGAL PROCEEDINGS

     In July 2000, Mr. David Miller,  a former employee of the Company,  filed a
complaint  against the Company in Superior  Court of the State of  California in
and  for  the  County  of  Los  Angeles.   The  complaint  alleges   defamation,
interference with contract and economic advantage,  and conversion.  With regard
to Mr.  Miller's  defamation  claim,  he alleges  that the Company  made certain
untrue  statements  regarding his conduct while employed by the Company,  and he
seeks damages in excess of  $2,000,000.  With regard to Mr.  Miller's  claim for
interference  of contract and economic  advantage and claim for  conversion,  he
alleges  that the Company  converted  certain  equity  interests to which he was
entitled.  Mr. Miller seeks damages in excess of $7,000,000 on his  interference
of contract and economic  claim and seeks damages in excess of $5,000,000 on his
conversion claim. The Company intends to defend itself vigorously with regard to
each of the aforementioned claims.


Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

     Not Applicable.




<PAGE>
                                     PART II


Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The Company's  Common Stock trades on the Nasdaq Over the Counter  Bulletin
Board under the symbol  "ENDV." The following  table sets forth for the quarters
indicated the range of high and low closing prices of the Company's Common Stock
as reported  by Nasdaq and the  Electronic  Bulletin  Board but does not include
retail markups, markdowns or commissions.

<TABLE>
<CAPTION>

         Fiscal Quarter Ending:                                        Common Stock Price
                                                                       (rounded to nearest penny)
                                                                       High             Low

<S>           <C> <C>                                                   <C>             <C>
         June 30, 2000                                                  4.00            1.20

         March 31, 2000 (through March 21, 2000)                       15.00            0.10

         December 31, 1999.                                             0.30            0.06

         September 30, 1999                                             0.63            0.13

         June 30, 1999                                                  0.88            0.38

         March 31, 1999                                                 1.00            0.19

         December 31, 1998                                              1.50            0.38

         September 30, 1998                                             6.00            0.38

</TABLE>
     As of June 30, 2000, the Company had approximately 93 record and beneficial
stockholders.


     Dividend Policy

     The Company has never paid cash  dividends  on its Common Stock and intends
to retain  earnings,  if any,  for use in the  operation  and  expansion  of its
business.  The amount of future  dividends,  if any,  will be  determined by the
Board of  Directors  based upon the  Company's  earnings,  financial  condition,
capital requirements and other conditions.




<PAGE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

         The statements contained in this prospectus that are not historical are
forward-looking   statements,   including  statements  regarding  the  Company's
expectations,   intentions,   beliefs  or   strategies   regarding  the  future.
Forward-looking statements include the Company's statements regarding liquidity,
anticipated  cash needs and  availability  and anticipated  expense levels.  All
forward-looking  statements included in this prospectus are based on information
available  to the  Company  on the  date  hereof,  and the  Company  assumes  no
obligation to update any such forward-looking statement. It is important to note
that the Company's  actual  results could differ  materially  from those in such
forward-looking statements.  Additionally, the following discussion and analysis
should be read in  conjunction  with the Financial  Statements and notes thereto
appearing elsewhere in this prospectus.

         The Company is in the development  stage and has had limited  operating
revenues  since its inception on June 10, 1996.  From June 10, 1996 through June
30,  2000,  the Company had an  accumulated  deficit of  $5,752,064.  During its
fiscal year ended June 30, 2000, the Company entered into an exclusive worldwide
license  agreement  with Stanford  University  for the patent rights to a patent
application  SUN-142-PRV,  a novel use of  nicotine  as an agent  for  promoting
growth of new blood vessels (angiogenesis) into areas of blood-starved tissue, a
condition  called  ischemia.  Pursuant  to the  license  agreement,  the Company
obtained a 10 - year exclusive  right of novel use of nicotine in  angiogenesis.
Stanford  will continue  research and  development  for the  Company's  research
products  under  the  licensing   agreement,   subject  to  pending  agreements.
Management   anticipates   this  action  will  result  in  the  Company   saving
approximately  $500,000 in initial research cost due to Stanford's allocation of
research facility and investigational  scientists.  As a result of the Company's
decision in February  2000 to enter into the  Stanford  agreement  and  research
alliance  with  Stanford,  we believe the  Company's  technology  portfolio  was
significantly enhanced.

         In October 1999, the Company  presented  pre-clinical  data to the U.S.
Food and Drug  Administration  (FDA) in preparation of its  Investigational  New
Drug (IND) filing for Liprostin,  its liposomal  prostaglandin  E-1 (PGE-1) drug
for indications of critical limb ischemia (CLI).  The FDA reviewed the Company's
data and responded with a waiver of Phase I & II clinical trials, if the Company
elected to proceed  directly to a Phase III trial for the  product.  The Company
will  determine  whether or not this  waiver will be accepted or whether it will
proceed on a conventional Phase I study, which it as prepared to do prior to the
FDA's  pre-submission  IND  meeting.  In  addition,  the Company  completed  its
FDA-required  certified  good  manufacturing  practice  ("cGMP")  development of
Liprostin  at the  Collaborative  BioAlliance  manufacturing  facility in Stoney
Brook, New York.  Clinical trial production  levels of Liprostin are expected to
be in place  by the end of the  third  quarter  2000 as the  Company's  clinical
studies begin.

         During the fiscal year ended June 30, 2000,  the Company's net revenues
increased to $24,312  compared  with revenues of $5,000 for the previous  fiscal
year ended June 30,  1999.  All  revenues  during this period were from sales of
research and development  services provided by the Company to third parties. The
Company had agreements  with two device  manufacturers for original research and
development  of the  proprietary  use of Liprostin  in the  treatment of various
vascular  diseases by application of medicinal  coatings to vascular  stents for
elimination  or  reduction  of new tissue  growth in and around  the  stents,  a
condition known as restenosis.

         During  the  fiscal  year  ending  June 30,  2000 and  1999,  costs and
operating expenses were $2,879,039 and $801,543,  respectively.  The increase in
costs and  operating  expenses for the year is  primarily  due to an increase in
the  cost  of  research and  development, scientific consulting, facilities, and
overhead.
<PAGE>
         Cash flows used in operating activities for the fiscal year ending June
30,  2000  increased  $1,189,204  to  $1,566,576,  compared  to $377,372 for the
previous  fiscal year ending June 30, 1999,  primarily due to the increased cost
of scientific consultants, materials and prototype manufacturing.

         Interest expense  decreased for the fiscal year ending June 30, 2000 by
$66,614 or 34%.  This was largely due to a  significant  reduction in the period
of time the convertible debentures were outstanding during the fiscal year ended
June 30, 2000.

         Research and development  expenses  totaled  $976,798 during the fiscal
year ending June 30, 2000, an increase of $765,520 from $211,278 for the  fiscal
year  ended  June  30,  1999.   These  expenses  were related to the cost of new
equipment, materials, labor and travel connected to the production  scale-up for
the  Liprostin  product under contract with Collaborative BioAlliance,   Inc. in
Stoney Brook, New York and the ongoing, in-house projects for medicinally coated
vascular stents.


Liquidity and Capital Resources

         The  Company  had a  working  capital  deficit  on June  30,  2000,  of
$137,563,  compared to a deficit of $461,280 in the previous  fiscal year ending
June 30, 1999. This decrease was primarily due to the proceeds received from the
issuance of stock in the fiscal year ended June 30, 2000.

         The  Company  requires  significant  additional  funds to  enable it to
continue its  Liprostin  product  development  and to complete its Food and Drug
Administration  required clinical trials, as well as research and development of
its licensed product  nicotine  receptor agonist (NRA). In May 2000, the Company
completed a $4.5 million financing  commitment  related to the private placement
and sale of its convertible preferred stock in three (3) $1.5 million traunches.
Pursuant to the commitment,  the Company  received $1.5 million on May 10, 2000,
with $3 million remaining in the "take-down", however, there can be no assurance
that the Company will receive any funds from the remaining traunches.

         The  Company  continues  to  actively  pursue   additional   financing,
collaborations  with  firms,  and other  arrangements  aimed at  increasing  its
capital  resources.  Failure to  acquire  such  funds may  adversely  impact the
scheduled  marked  introduction of Liprostin and possibly  adversely  affect the
Company's operations.  In order to continue as a going concern, the Company must
raise  additional  funds as noted above and  ultimately  achieve profit from its
operation.


Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The response to this item is set forth at the end of this report.



<PAGE>
                                    PART III


Item 8. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS

         None.


Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
        COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     Our  executive  officers,  directors  and key  employees and their ages and
positions with us as of June 30, 2000, are as follows:
<TABLE>
<CAPTION>
                                                                                        Period Served As
         Name                          Age              Position                        Officer/Director/Key Employee
         ---------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>          <C>                                <C>
         David P. Summers               61           Chief Executive Officer            Inception (1996) to
                                                                                        and Chairman Present

         Danilo D. Lasic                47           Chief Scientific Officer           June 1997 to Present
         Diane Dottavio                 49           Director of Research and           March 2000 to Present
                                                     Development

         Barbara J. Richardson          53           Vice President of Operations,      January 2000 to Present
                                                     Secretary and Director

         Roy A. Robertson               42           Vice President of                  March 2000 to Present
                                                     Business Development

         M. Dwight Cantrell             54           Chief Financial Officer,           January 1997 to Present
                                                                                        Treasurer and Director

         Gary R. Ball                   40           Director                           July 1996 to Present

         Claudio R. Roman               42           Director                           January 1997 to Present


</TABLE>

Set forth below is a brief background of the executive  officers,  Directors and
key employees of the Company, based on information supplied by them.

     Dr. David P. Summers  serves as our Chief  Executive  Officer and Chairman.
Dr. Summers has served in this capacity on a full-time basis since our inception
and is primarily  responsible  for our  operations as a whole.  Prior to working
with  Endovasc,  Dr. Summers  founded  American  BioMed,  Inc. and served as its
President and Chief Executive Officer from 1984 to 1995. Dr. Summers is a Fellow
in the American College of Angiology,  a Fellow in the International Society for
Endovascular Surgery, as well as the inventor of several medical devices used to
treat cardiovascular  diseases.  He is the author of 18 issued patents and has 8
patents pending.  Prior to founding  American BioMed,  Dr. Summers assisted with
the management of several corporations, including C.R. Bard, Inc., a manufacture
and distributor of cardiovascular  medical products,  Karl Stortz Endoscopy,  an
endoscopic  instrument  company,  and  Pall  Corporation,   a  manufacturer  and
distributor of blood  filtration  products.  Dr. Summers holds an M.B.A.  degree
from Pepperdine  University as well as a Ph.D. in  International  Economics from
Kennedy-Western  University.  He is also a  member  of the New York  Academy  of
Sciences,  the  American  Association  of  Advancement  of Science,  the Houston
Inventors Association, the European Vascular Society  and the Society of Plastic
Engineers.
<PAGE>
     Danilo D. Lasic,  Ph.D.  serves as our Chief Scientific  Officer.  Prior to
joining  us in June  1997,  Dr.  Lasic  served  as a genetic  and drug  delivery
consultant  with Liposome  Consultations,  Inc. for a year, and as a Director of
Lipid  Research  with  MegaBios,  Inc.,  from  1994  to  1996.  Dr.  Lasic  is a
solid-state physicist specialized in drug delivery liposomes.  Dr. Lasic holds a
B.S. and M.S. in Chemistry from the University of Ljubljana,  as well as a Ph.D.
in Physics from the University of Ljubljana.

     Diane Dottavio serves as our Director of Research and Development. Prior to
joining us in March of this year, Ms. Dottavio  served as Senior  Scientist with
Leukosite,  Inc.,  from 1994 to 1996, and as Director of Laboratory  Instruction
and Research at the University of Houston,  from 1997 to this year. Ms. Dottavio
holds a B.S. in Biology and a M.S. in Organic  Chemistry  from the University of
New Mexico, as well as a Ph.D. in Biochemistry from the University of Texas.

     Barbara J. Richardson serves as our Vice President of Operations, Secretary
and Director.  Ms. Richardson has more than 8 years experience in small business
management  and  marketing.  Prior to joining  us in  January of this year,  Ms.
Richardson  served as Senior  Administrative  Coordinator  for Baylor College of
Medicine, from 1994 to this year.

     Roy A. Robertson serves as our Vice President of Business Development.  Mr.
Robertson  is a  Candidate  in the  International  Business  Masters  Program at
Heriot-Watt University, The Edinburgh Business School in Edinburgh, Scotland and
has studied business administration at the University of Maryland, College Park,
Maryland.  Mr.  Robertson  has 25 years of business  development  and  marketing
experience.  Prior to joining us in March  2000,  Mr.  Robertson  served as Vice
President of Sales and Marketing  with Millar  Instruments,  Inc.,  from 1995 to
1997, and as President of Pacific  Biosystems,  from 1998 to 1999. Mr. Robertson
holds a B.A. in Anthropology from the University of Maryland.

     M. Dwight  Cantrell serves as our Chief  Financial  Officer,  Treasurer and
Director,  on a part-time basis.  Mr. Cantrell has maintained,  and continues to
maintain,  a public  accounting  practice in the state of Texas since 1976.  Mr.
Cantrell is a public  accountant,  and holds a B.S. in accounting  from Southern
Ohio University.

     Gary R. Ball serves as our Director and is one of our co-founders. Prior to
co-founding  us in July 1996,  Mr. Ball  served as a  mechanical  engineer  with
American BioMed,  Inc., from 1991 to 1996. Mr. Ball is a co-inventor of two U.S.
patents and is experienced in prototype design,  research,  and development,  as
well as reliability testing and patent research and filing.

     Claudio R. Roman serves as our Director. Mr. Roman is a practicing attorney
in the State of Texas.  Mr. Roman has maintained,  and continues to maintain,  a
private law  practice in the state of Texas since 1985.  Mr.  Roman holds a J.D.
degree from the University of Houston School of Law.

     Our Directors hold office until the next annual meeting of our stockholders
and until  their  successors  have been  elected and duly  qualified.  Executive
officers  are  elected  by our  Board of  Directors  annually  and  serve at the
discretion of the Board.
<PAGE>
     Non-employee  Directors receive no salary for their services and receive no
fee from the Company for their participation in meetings, although all Directors
are reimbursed for reasonable travel and other  out-of-pocket  expenses incurred
in attending meetings of the Board.


Item 10. EXECUTIVE COMPENSATION.


     The following table sets forth certain summary  information with respect to
the compensation paid to the our executive officers for services rendered to us,
in all  capacities,  for the fiscal years ended June 30, 1999,  1998,  and 1997.
Other than as listed  below,  we had no  executive  officers  whose total annual
salary and bonus exceeded $100,000 for that fiscal year:
<TABLE>
<CAPTION>


                                       Summary Compensation Table

                                                                          Long Term Compensation
                             Annual Compensation                  Awards                        Payouts

                                                            Other                        Securities
                                                            Annual       Restricted      Under-                        Other
Name and                                                    Compen-       Stock          Lying            LTIP         Compen-
Principal                           Salary       Bonus      sation        Awards         Options/       Payouts        sation
Position                   Year      ($)          ($)         ($)           ($)            ($)             ($)         SARs(#)

<S>                        <C>      <C>           <C>          <C>           <C>        <C>               <C>           <C>
David P. Summers           2000     66,500         -            -            -               -              -             -
CEO and Director           1999     75,000         -            -            -          1,000,000         $0.25           -
                           1998     60,000         -            -            -               -              -             -
</TABLE>
     Directors  of the Company  receive no  compensation  for their  services as
Directors.

Employment and Other Agreements


     We have entered into  employment  agreements with Dr. David Summers and Ms.
Barbara  Richardson.  We entered into a three-year  employment contract with Dr.
Summers in 1996,  providing  for annual  compensation  of  $150,000  in cash and
equity interests.  The original term of this contract has expired,  but the term
has been renewed for a one-year period each June since its original expiration.

     We also have a one-year  automatically  renewable  employment contract with
Ms. Richardson,  providing for annual compensation of $60,000 in cash and equity
interests.

     In  addition,  we  have a  six-month  consulting  agreement  with  Mr.  Roy
Robertson, providing for monthly compensation of $5,000. We intend to enter into
full-time  employment  agreements with Mr. Robertson and Mr. Danilo Lasic in the
near future.


<PAGE>
Stock Option Plans

     We  intend  to  propose  a stock  option  plan  (the  "2000  Plan")  to our
shareholders  for approval,  pursuant to which 2,000,000  shares of common stock
are reserved for issuance. The following is a description of the 2000 Plan as it
is currently envisioned:

     The 2000  Plan will be  administered  by the  Board of  Directors,  or by a
committee with at least two Directors as delegated by the Board of Directors who
determine among other things,  those individuals who shall receive options,  the
time period  during which the options may be partially or fully  exercised,  the
number of shares of common stock  issuable  upon the exercise of the options and
the option exercise price.

     The 2000  Plan will be for a period of ten  years.  Options  under the 2000
Plan must be issued within ten years from the  effective  date of the 2000 Plan.
Options  may be granted to  officers,  Directors,  consultants,  key  employees,
advisors  and similar  parties who provide  their  skills and  expertise  to us.
Options granted under the 2000 Plan may be exercisable for up to ten years,  may
require  vesting,  and shall be at an exercise  price all as  determined  by the
Board  of  Directors.  Options  will be  non-transferable  except  to an  option
holder's  personal  holding  company or registered  retirement  savings plan and
except by the laws of descent and  distribution  or a change in our control,  as
defined in the 2000 Plan, and are exercisable only by the participant during his
or her lifetime. Change in control includes (i) the sale of substantially all of
our assets and merger or consolidation  with another,  or (ii) a majority of the
Board of Directors  changes other than by election by the shareholders  pursuant
to a Board of  Directors'  solicitation  or by vacancies  filled by the Board of
Directors caused by death or resignation of such person.

     If a participant ceases  affiliation with us by reason of death,  permanent
disability  or the  retirement  of an optionee  either  pursuant to a pension or
retirement  plan we adopted on the normal  retirement date prescribed by us from
time to time,  the  option  remains  exercisable  for  three  months  from  such
occurrence but not beyond the option's  expiration date. Other termination gives
the participant three months to exercise,  except for termination for cause that
results in immediate termination of the option.

     Options granted under the 2000 Plan, at the discretion of the  compensation
committee  or the Board of  Directors,  may be  exercised  either with cash,  by
certified check or bank cashier's check, common stock having a fair market equal
to the cash  exercise  price,  the  participant's  promissory  note,  or with an
assignment  to us of  sufficient  proceeds  from  the sale of the  common  stock
acquired  upon  exercise of the Options with an  authorization  to the broker or
selling agent to pay that amount to us, or any combination of the above.

     The exercise  price of an option may not be less than the fair market value
per share of common  stock on the date that the  option is  granted  in order to
receive  certain  tax  benefits  under the Income Tax Act of United  States (the
"ITA").  The exercise  price of all future  options will be at least 100% of the
fair market  value of the common  stock on the date of grant of the  options.  A
benefit  equal to the amount by which the fair market value of the shares at the
time the  employee  acquires  them  exceeds the total of the amount paid for the
shares or the amount paid for the right to acquire the shares shall be deemed to
be received  by the  employee  in the year the shares are  acquired  pursuant to
paragraph  7(1) of the ITA.  Where the exercise  price of the option is equal to
the fair market value of the shares at the time the option is granted, paragraph
110(1)(d) of the ITA allows a deduction  from income equal to one quarter of the
benefit as calculated  above.  If the exercise  price of the option is less than
the fair market value at the time it is granted,  no deduction  under  paragraph
110(1)(d) is permitted. Options granted to any non-employees,  whether Directors
or consultants or otherwise  will confer a tax benefit in  contemplation  of the
person becoming a shareholder pursuant to subsection 15(1) of the ITA.

     Any  unexercised  options that expire or that  terminate upon an employee's
ceasing to be employed by us become  available again for issuance under the 2000
Plan.


<PAGE>
     The 2000  Plan may be  terminated  or  amended  at any time by the Board of
Directors,  except  that the  number  of shares of  common  stock  reserved  for
issuance  upon the  exercise of options  granted  under the 2000 Plan may not be
increased without the consent of our shareholders.


Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The  following  table sets forth certain  information  as of June 30, 2000,
with respect to the number of shares of each class of voting stock  beneficially
owned by (i) those  persons  known to the  Company to be the owners of more than
five  percent  of any such  class of  voting  stock of the  Company,  (ii)  each
director of the Company and (iii) all directors  and  executive  officers of the
Company as a group. Unless otherwise  indicated,  each of the listed persons has
sole voting and investment power with respect to the shares  beneficially  owned
by such shareholder.

<TABLE>
<CAPTION>

                                                                                    Percentage of
Name and Address of                                       Amount of                 Beneficial
Beneficial Owner (1)                                      Beneficial                Ownership
                                                          Ownership(2)(3)
<S>                                                         <C>                       <C>
David P. Summers                                            3,032,278 (4)             28.12
Danilo D. Lasic                                                10,000                  0.08
Barbara J. Richardson                                          53,695                  0.41
Roy Robertson                                                  25,000                  0.20
M. Dwight Cantrell                                             50,000                  0.79
Gary R. Ball                                                  993,500 (5)              7.80
Claudio R. Roman                                               50,000                  0.39
Celeste Trust Reg.                                          1,075,179 (6)              7.78 (7)
Balmore Funds                                               1,218,536 (6)              8.73 (7)
Keshet L.P.                                                   788,465 (6)              5.83 (7)

All Directors and Executive Officers as a Group             4,811,778                  0.38
(7 persons)
----------------------
Less than 1%.
</TABLE>

     (1)  Except as  otherwise  noted,  the  address  of the  beneficial  owners
described in this table shall be c/o  Endovasc  Ltd.,  Inc.,  15001 Walden Road,
Suite 108, Montgomery, Texas 77356.

     (2) The  securities  "beneficially  owned" by a person  are  determined  in
accordance with the definition of "beneficial  ownership" set forth in the rules
and  regulations  promulgated  under the  Securities  Exchange  Act of 1934,  as
amended, and accordingly, may include securities owned by and for, among others,
the spouse and/or minor children of an individual and any other relative who has
the same home as such  individual,  as well as other  securities as to which the
individual has or shares voting or investment power or which such person has the
right to acquire within 60 days after the Record Date pursuant to the conversion
of convertible equity,  exercise of options, or otherwise.  Beneficial ownership
may be disclaimed as to certain of the securities.

     (3) Based upon 468,370  shares of common stock  outstanding  as of June 30,
2000,  assuming no other changes in the beneficial  ownership of our securities,
except as noted in note (7) hereto.
<PAGE>
     (4) Dr. Summer's  beneficially owned shares include  approximately  243,000
shares beneficially owned by his wife, Dorothy Summers. Dr. Summers exercises no
investment  or  voting  power  over any of the  shares  owned by his  wife,  and
disclaims beneficial ownership of those shares.

     (5) Mr. Ball's beneficially owned shares include approximately 5,000 shares
beneficially owned by his wife, Sherry Ball. Mr. Ball exercises no investment or
voting power over any of the shares owned by his wife, and disclaims  beneficial
ownership of those shares.

     (6)  Represents  shares of common stock  issuable  upon the  conversion  of
Series A Preferred Stock which have been, or may be, issued.

     (7) Based upon the shares of common stock outstanding  assuming conversion,
as of June 30,  2000,  of Series A Preferred  Stock which have been,  or may be,
issued to this beneficial holder.


Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     As of the June 30, 2000, we have not entered into a transaction  during the
past two years with a value in excess of $60,000  with a Director,  officer,  or
beneficial  owner  of 5% or more of our  capital  stock,  or  members  of  their
immediate  families  that  had,  or is to have,  a direct or  indirect  material
interest in us, except as follows:

     Effective  December 9, 1997, we entered into a stock option  agreement with
Gary R. Ball. Under this agreement, Mr. Ball is granted an option to purchase up
to 600,000  shares of our common stock at a purchase  price below the prevailing
market price. The option is for a three year period expiring December 8, 2000.

     During  the  fiscal  year  ended June 30,  1998,  we also  entered  into an
agreement with M. Dwight  Cantrell  under the terms of which he was  compensated
for past  services  as our  Director.  Under  the terms of this  agreement,  Mr.
Cantrell was granted an option to purchase 100,000 shares of our common stock at
a purchase price of $0.25 per share for a term of three years.

     During the fiscal year ended June 30, 1998, we entered into an agreement to
purchase the rights to patent number  4,820,732  and patent number  955,878 from
Francis Pizzulli. The purchase price was $125,000,  $50,000 of which was payable
upon  execution and $75,000 of which was due by December 31, 1997. The agreement
also called for the issuance of 200,000 shares of our common stock.  We made the
initial $50,000 payment and issued the 200,000 shares of stock,  pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.  However,  we did not  make  the  $75,000  payment  as  scheduled.  The
agreement  indicated  that if the final payment was not made within seven months
from the execution of the agreement that the final payment would be increased to
$150,000 plus the issuance an additional  200,000  shares of stock.  We issued a
total of 300,000 shares in final settlement of the agreement, in February 2000.

     Between March 1998 and December 1999,  David  Summers,  our Chairman of the
Board of Directors and Chief  Executive  Office,  made two advances to us in the
amounts of $123,000 and $25,000,  respectively.  These  advances were made on an
unsecured basis, with no interest accrual,  and were due and payable on June 30,
2000.  During December 1999, we issued 1,250,000 shares of common stock,  valued
at $0.10 to $0.12  per share as of the date of the  issuance,  in full and final
repayment of the aforementioned advances.

     During the fiscal year ended June 30,  1998,  we entered  into an agreement
with Claudio Roman, Esq., pursuant to which he was compensated for past services
as our legal counsel.  Under the terms of this agreement,  Mr. Roman was granted
an option to purchase  50,000 shares of our common stock at a purchase  price of
$0.25 per share for a term of three years.
<PAGE>
     During  fiscal year ending June 30,  1998,  we entered  into a stock option
agreement  with Dr.  David P.  Summers.  Under this  agreement,  Dr.  Summers is
granted an option to purchase up to  1,000,000  shares of our common  stock at a
purchase price of $0.25 per share exercisable for a period of three years.

     The  Company  believes  that all  transactions  between the Company and its
officers, directors and employees described above are on terms no less favorable
to the Company than could have been  obtained  from  unaffiliated  parties under
similar circumstances.


Item 13. EXHIBITS, LIST, AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>

         (a)      INDEX TO EXHIBITS

                 Exhibit No.       Exhibit
                 <S>               <C>
                  3.1             Articles of Incorporation of the Company **
                  3.2             Bylaws of the Company **
                  4.1             Form of 8% Series A Senior Subordinated Convertible Redeemable Debenture **
                  4.2             Form of 8% Series B Senior Subordinated Convertible Redeemable   Debenture **
                  4.3             Specimen Stock Certificate of the Company **
                 10.1             Form of Employment Agreement with Dr. David Summers, dated  December 18, 1996 ***
                 10.2             Form of Employment Agreement with Ms. Barbara Richardson, dated  June 1, 2000 ***
                 10.3             Form of Consulting Services Agreement with Mr. Roy Robertson, dated March 1, 2000 ***
                 10.4             Form of Subscription Agreement for Purchase of Series A 8% Cumulative Convertible Preferred Stock*
                 10.5             Certificate to Set Forth Designations, Voting Powers, Preferences, Limitations, Restrictions and
                                  Relative Rights of Series A 8% Cumulative Convertible Preferred Stock*
                 10.6             Form of Common Stock Purchase Warrant*
                 10.7             Lease of Company's Facility at 15001 Walden Road, Suite 108, Montgomery, Texas 77356 ***
                 10.8             Lease of Company's Facility at 15001 Walden Road, Suites 234 and 235, Montgomery, Texas 77356 ***
                 16.1             Letter on change in certifying accountant **
                 27.1             Financial Data Schedule
</TABLE>
     * Incorporated by reference from the Registrant's  Form SB-2, filed on June
30, 2000.

     ** Incorporated  by reference from the  Registrant's  Form 10-SB,  filed on
December 3, 1999.

     *** Incorporated by reference from the Registrant's  Form SB-2/A,  filed on
July 20, 2000.

         (b)      Reports on Form 8-K:

                  None.

<PAGE>
                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                         ENDOVASC LTD., INC.


                                    By:/s/ David P. Summers
                                       David P. Summers, Chief Executive Officer


                                    By:/s/ Barbara J. Richardson
                                       Barbara J. Richardson, Secretary

Dated: September 28, 2000

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.

Date:  September 28, 2000            /s/ David P. Summers
                                         David P. Summers, Chairman of the Board


Date:  September 28, 2000            /s/ M. Dwight Cantrell
                                         M. Dwight Cantrell, Director


Date:  September 28, 2000            /s/ Gary R. Ball
                                         Gary R. Ball, Director


Date:  September 28, 2000            /s/ Claudio R. Roman
                                         Claudio R. Roman, Director


Date:  September 28, 2000            /s/ Barbara J. Richardson
                                         Barbara J. Richardson, Director

<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                                   ----------




                              FINANCIAL STATEMENTS
                           WITH REPORT OF INDEPENDENT
                   ACCOUNTANTS as of June 30, 2000 and for the
                       years ended June 30, 2000 and 1999,
                and for the period from inception, June 10, 1996,
                                to June 30, 2000






















<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                                TABLE OF CONTENTS
                                   ----------
<TABLE>
<CAPTION>


                                                                                                          Page(s)

<S>                                                                                                           <C>
Report of Independent Accountants                                                                           F-2

Financial Statements:

  Balance Sheet as of June 30, 2000                                                                         F-4

  Statement of Operations for the years ended
    June 30, 2000 and 1999, and for the period from
    inception, June 10, 1996, to June 30, 2000                                                              F-5

  Statement of Stockholders' Deficit for the years
    ended June 30, 2000 and 1999, and for the period
    from inception, June 10, 1996, to June 30, 2000                                                         F-6

  Statement of Cash Flows for the years ended
    June 30, 2000 and 1999, and for the period from
    inception, June 10, 1996, to June 30, 2000                                                              F-8

Notes to Financial Statements                                                                               F-9

</TABLE>

















                                       F-1






<PAGE>
                        Report of Independent Accountants



To the Stockholders of
Endovasc Ltd., Inc.


We have  audited  the  accompanying  balance  sheet of  Endovasc  Ltd.,  Inc. (a
development stage enterprise) as of June 30, 2000, and the related statements of
operations,  stockholders'  equity and cash  flows for the years  ended June 30,
2000 and 1999,  and for the period from  inception,  June 10, 1996,  to June 30,
2000.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based upon our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Endovasc Ltd., Inc. as of June
30,  2000,  and the results of its  operations  and its cash flows for the years
ended June 30, 2000 and 1999, and for the period from inception,  June 10, 1996,
to June 30, 2000, in conformity with generally accepted accounting principles.














                                    Continued
                                       F-2
<PAGE>
Endovasc Ltd., Inc.
Page 2



The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  As shown in the financial  statements
and discussed in Note 9, the Company has incurred  significant  recurring losses
from  operations  since  inception,   is  in  a  negative  working  capital  and
accumulated  deficit  position at June 30,  2000,  and is  dependent  on outside
sources of financing for the continuation of its operations. These factors raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans with  regard to this  matter are also  discussed  in Note 9.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty.





Houston, Texas
September 19, 2000
































                                       F-3
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                                  BALANCE SHEET
                                  June 30, 2000
                                   ----------
<TABLE>
<CAPTION>

          ASSETS

Current assets:
<S>                                                                                                     <C>
  Cash and cash equivalents                                                                             $  926,121
                                                                                                        ----------

    Total current assets                                                                                   926,121

Property and equipment, net                                                                                 43,244
Other assets, net                                                                                          160,271
                                                                                                        ----------

      Total assets                                                                                      $1,129,636
                                                                                                        ==========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current maturities of long-term debt                                                                  $   37,387
  Note payable to shareholder                                                                              795,748
  Accounts payable                                                                                         196,375
  Accrued liabilities                                                                                       34,174
                                                                                                        ----------

    Total current liabilities                                                                            1,063,684

Long-term debt, net of current maturities                                                                   22,858
                                                                                                        ----------

      Total liabilities                                                                                  1,086,542
                                                                                                        ----------

Commitment and contingencies

Stockholders' equity:
  Common stock, $.001 par value, 100,000,000
    shares authorized, 14,553,370 shares issued
    and 12,468,370 shares outstanding                                                                       14,553
  Preferred stock, $.001 par value, 20,000,000
    shares  authorized,  15,000  shares  of Series A 8%  cumulative  convertible
    preferred stock issued and outstanding, stated value $100
    per share                                                                                                   15
  Additional paid-in capital                                                                             5,797,501
  Losses accumulated during the development
    stage                                                                                               (5,752,064)
  Treasury stock                                                                                           (16,911)
                                                                                                        ----------

    Total stockholders' equity                                                                              43,094
                                                                                                        ----------

      Total liabilities and stockholders'
        equity                                                                                          $1,129,636
                                                                                                        ==========

</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements.
                                       F-4
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                             STATEMENT OF OPERATIONS
                 for the years ended June 30, 2000 and 1999 and
         for the period from inception, June 10, 1996, to June 30, 2000
                                   ----------
<TABLE>
<CAPTION>


                                                               Year Ended           Year Ended           Inception
                                                                 June 30,             June 30,          to June 30,
                                                                  2000                 1999                2000
                                                               ----------------------------------------------------

Income:
<S>                                                            <C>                  <C>                 <C>
  Sales                                                        $    24,312          $    5,000          $    29,312
  Interest income                                                    6,775                -                   7,428
  Other income                                                        -                   -                   3,618
                                                               -----------          ----------          -----------

    Total income                                                    31,087               5,000               40,358
                                                               -----------          ----------          -----------

Costs and expenses:
  Operating, general and administrative
    expenses                                                     1,775,044             396,454            3,159,247
  Research and development costs                                   976,798             211,278            2,176,130
  Interest expense                                                 127,197             193,811              329,670
                                                               -----------          ----------          -----------

    Total costs and expenses                                     2,879,039             801,543            5,665,047
                                                               -----------          ----------          -----------

Net loss before extraordinary item                             $(2,847,952)         $ (796,543)         $(5,624,689)

Extraordinary loss on extinguishment
    of convertible debentures                                      127,375                -                 127,375
                                                               -----------          ----------          -----------

Net loss                                                       $(2,975,327)         $ (796,543)         $(5,752,064)
                                                               ===========          ==========          ===========


Weighted average shares outstanding                              9,575,153           7,217,096
                                                               ===========          ==========

Basic and diluted net loss per common Share:
    Before extraordinary item                                  $     (0.30)         $    (0.11)
    Extraordinary item                                               (0.01)               -
                                                               -----------          ----------

      Net loss per common share                                $     (0.31)         $    (0.11)
                                                               ===========          ==========

</TABLE>






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


                                       F-5
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                       STATEMENT OF STOCKHOLDERS' DEFICIT
                 for the years ended June 30, 2000 and 1999, and
          for the period from inception, June 10, 1996 to June 30, 2000
                                   ----------


<TABLE>
<CAPTION>


                                                                                                            Losses
                                                                                                         Accumulated
                                                                              Additional                  During the
                                             Common Stock    Preferred Stock   Paid-In    Treasury       Development
                                        Amount        Shares  Amount  Shares   Capital      Stock           Stage          Total

<S>                                 <C>             <C>         <C>    <C> <C>           <C>            <C>            <C>
Balance at inception, June 10,
 1996                               $      --            --     $-     -   $      --     $      --      $      --      $      --

Stock issued for equity secur-
  ities in 1996 .................         2,332     2,332,000   --     -       300,000          --             --          302,332

Stock issued for purchase of
  patent rights in 1996 .........         2,188     2,188,000   --     -       282,252          --             --          284,440

Stock issued for services in
 1997                                     1,702     1,702,000   --     -       354,198          --             --          355,900

Stock issued for cash in 1997 ...           305       304,571   --     -       205,196          --             --          205,501

Stock issued for purchase of
  patent rights in September
 1997                                       200       200,000   --     -       199,800          --             --          200,000

Stock issued for services in 1998            77        77,380          -          --          55,516           --           55,593

Stock subject to rescission .....          --            --     --     -          --         (16,911)          --          (16,911)

Losses accumulated during the
  period from inception, June 10,
  1996, to June 30, 1998 ........          --            --     --     -          --            --       (1,980,194)    (1,980,194)
                                    -----------   -----------   ----   -   -----------   -----------    -----------    -----------

Balance at June 30, 1998 ........         6,804     6,803,951   --     -     1,396,962       (16,911)    (1,980,194)      (593,339)

</TABLE>
                     The accompanying notes are an integral
                       part of these financial statements.
                                    Continued
                                       F-6
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                  STATEMENT OF STOCKHOLDERS' DEFICIT, Continued
                 for the years ended June 30, 2000 and 1999, and
          for the period from inception, June 10, 1996 to June 30, 2000
                                   ----------
<TABLE>
<CAPTION>

                                                                                                             Losses
                                                                                                           Accumulated
                                                                                 Additional                 During the
                                    Common Stock           Preferred Stock       Paid-In      Treasury      Development
                                Amount    Shares         Amount     Shares       Capital       Stock          Stage         Total
<S>                             <C>       <C>           <C>          <C>         <C>           <C>         <C>           <C>
Conversion of debentures to
  common stock ..............    1,208    1,208,077         --           --        443,792         --            --         445,000

Stock issued for services ...      362      362,462         --           --        284,705         --            --         285,067

Net loss accumulated in 1999      --           --           --           --           --           --        (796,543)     (796,543)
                             ---------   ----------   ----------   ----------   ----------   ----------    ----------    ----------

Balance at June 30,1999 .....    8,374    8,374,490         --           --      2,125,459      (16,911)   (2,776,737)     (659,815)

Conversion of debentures to
  common stock ..............    2,570    2,569,546         --           --        841,555         --            --         844,125


Stock issued for services ...    1,869    1,869,334         --           --      1,388,241         --            --       1,390,110

Conversion of note payable to
  shareholder to common stock    1,250    1,250,000         --           --        146,750         --            --         148,000

Issue of common stock in con-
  nection with license agree-
  ment ......................      190      190,000         --           --         62,511         --            --          62,701

Issue of common stock in set-
  tlement of lawsuit ........      300      300,000         --           --        192,700         --            --         193,000

Issuance of preferred stock .     --           --             15       15,000    1,040,285         --            --       1,040,300

Net loss accumulated in 2000      --           --           --           --           --           --      (2,975,327)   (2,975,327)
                            ----------   ----------   ----------   ----------    ----------    ----------  -----------   -----------

Balance at June 30, 2000       $14,553   14,553,370       $   15       15,000   $5,797,501     $ (16,911) $(5,752,064)   $   43,094
                            ==========   ==========   ==========   ==========    ==========    ==========  ===========   ===========
</TABLE>



                     The accompanying notes are an integral
                       part of these financial statements.
                                       F-7
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                             STATEMENT OF CASH FLOWS
                 for the years ended June 30, 2000 and 1999, and
         for the period from inception, June 10, 1996, to June 30, 2000
                                   ----------
<TABLE>
<CAPTION>
                                                              Year Ended          Year Ended             Inception
                                                                June 30,            June 30,            to June 30,
                                                                 2000                1999                   2000
                                                              -----------         -----------           -------------------

Cash flows from operating activities:
<S>                                                           <C>                 <C>                   <C>
  Net loss                                                    $(2,975,327)        $ (796,543)           $(5,752,064)
  Adjustments to reconcile net loss
    to net cash used in operating
    activities:
    Common stock and stock options
      issued as compensation for services                       1,390,110            285,067              2,286,670
      Extaordinary loss                                           127,375               -                   127,375
    Write down of long-lived assets to
      fair value                                                     -                  -                   284,440
    Depreciation and amortization expense                          11,774              3,242                 21,286
    Deferred income tax expense                                      -                  -                     7,994
    Amortization of discount on con-
      vertible debentures                                         125,000            125,000                250,000
    Changes in operating assets and
      liabilities:
      (Increase) decrease in other assets                         (94,670)            22,336               (102,584)
      Increase (decrease) in accounts
        payable and accrued liabilities                          (150,838)           (16,474)               216,936
                                                              -----------         ----------            -----------

          Net cash used in operating
            activities                                         (1,566,576)          (377,372)            (2,659,947)
                                                              -----------         ----------            -----------

Cash flows from investing activities:
  Capital expenditures                                            (38,756)            (3,198)               (57,751)
  Proceeds received from repayment of
    loan to stockholder                                              -                  -                    71,854
                                                              -----------         ----------            -----------

          Net cash provided by (used in)
            investing activities                                  (38,756)            (3,198)                14,103
                                                              -----------         ----------            -----------

Cash flows from financing activities:
  Proceeds from sale of equity securities                            -                  -                   302,332
  Proceeds from sale of common stock                                 -                  -                   205,501
  Proceeds from sale of convertible
    debenture and related conversion
    feature                                                       536,750            500,000              1,036,750
  Net proceeds from issuance of preferred
    stock                                                       1,040,300               -                 1,040,300
  Issuance of notes payable                                         8,965               -                   105,755
  Repayment of notes payable                                      (33,120)           (12,390)               (45,510)
  Proceeds from advances from
    stockholders                                                  858,500             10,100                943,748
  Purchase of treasury stock                                         -                  -                   (16,911)
                                                              -----------         ----------            -----------

          Net cash provided by financing
            activities                                          2,411,395            497,710              3,571,965
                                                              -----------         ----------            -----------

Net increase in cash and cash equivalents                         806,063            117,140                926,121

Cash and cash equivalents at beginning
  of period                                                       120,058              2,918                   -
                                                              -----------         ----------            -----------

Cash and cash equivalents at end of
  period                                                      $   926,121         $  120,058            $   926,121
                                                              ===========         ==========            ===========


Supplemental disclosure of cash flow information:

  Cash paid for interest expense                              $     7,903         $   63,105            $    79,670
                                                              ===========         ==========            ===========

  Cash paid for income taxes                                  $      -            $    -                $      -
                                                              ===========         ==========            ===========
</TABLE>
                     The accompanying notes are an integral
                       part of these financial statements.
                                       F-8
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                          NOTES TO FINANCIAL STATEMENTS
                                   ----------

1.     Organization and Summary of Significant Accounting Policies

       Endovasc,  Ltd., Inc. (the "Company") was incorporated  under the laws of
       the State of Nevada on June 10, 1996. The Company's principal business is
       the  production  of  various  drugs  that  can be  administered  using an
       advanced  drug  delivery  system.  The  Company  believes  that  its drug
       delivery  system  will  ultimately  be  widely  used  by   cardiologists,
       interventional   radiologists  and  vascular  surgeons.  The  Company  is
       considered  a  development  stage  enterprise  because  it  has  not  yet
       generated  significant  revenue from sale of its products and has devoted
       substantially all of its efforts in raising capital.

       Significant Estimates

       The  preparation  of financial  statements in conformity  with  generally
       accepted accounting  principles requires management to make estimates and
       assumptions  that affect the reported  amounts of assets and  liabilities
       and disclosure of contingent  assets and  liabilities at the dates of the
       financial  statements  and the reported  amounts of revenues and expenses
       during the periods.  Actual results could differ from estimates making it
       reasonably  possible  that a change in the  estimates  could occur in the
       near term.

       Cash and Cash Equivalents

       The Company  considers all highly liquid  short-term  investments with an
       original  maturity  of three  months  or less when  purchased  to be cash
       equivalents.

       The Company  maintains  cash  deposits  in banks  which may  occasionally
       exceed the  amount of federal  deposit  insurance  available.  Management
       periodically  assesses the financial  condition of the  institutions  and
       believes that any possible deposit loss is minimal.

       Property and Equipment

       Property and equipment are recorded at cost.  Depreciation is provided on
       the  straight-line  method over the estimated useful lives of the assets,
       which range from five to seven years. Expenditures for major renewals and
       betterments that extend the original  estimated  economic useful lives of
       the applicable  assets are  capitalized.  Expenditures for normal repairs
       and maintenance are charged to expense as incurred.  The cost and related
       accumulated  depreciation  of assets  sold or  otherwise  disposed of are
       removed  from  the  accounts,  and  any  gain  or  loss  is  included  in
       operations.



                                    Continued
                                       F-9
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

1.     Organization and Summary of Significant Accounting Policies, continued

       Issuance Costs

       Debt  issuance  costs are  deferred  and  recognized,  using the interest
       method, over the term of the related debt.

       Income Taxes

       The Company uses the  liability  method of  accounting  for income taxes.
       Under this method,  deferred income taxes are recorded to reflect the tax
       consequences  on future  years of temporary  differences  between the tax
       basis of assets and liabilities and their financial  amounts at year-end.
       The Company provides a valuation  allowance to reduce deferred tax assets
       to their net realizable value.

       Research and Development

       Research and  development  costs are  expensed as  incurred.  These costs
       consist of direct and indirect costs associated with specific projects.

       Stock-Based Compensation

       Stock-based  compensation  is  accounted  for using the  intrinsic  value
       method prescribed in Accounting  Principles Board Opinion ("APB") No. 25,
       "Accounting for Stock Issued to Employees", rather than applying the fair
       value method  prescribed  in SFAS No. 123,  "Accounting  for  Stock-Based
       Compensation".

       Loss Per Share

       Basic and diluted loss per share is computed on the basis of the weighted
       average number of shares of common stock outstanding  during each period.
       Common  equivalent  shares from common  stock  options and  warrants  are
       excluded from the  computation  as their effect would dilute the loss per
       share for all periods presented.

       Fair Value of Financial Instruments

       The Company  includes  fair value  information  in the notes to financial
       statements when the fair value of its financial  instruments is different
       from the book value.  When the book value  approximates  fair  value,  no
       additional disclosure is made.



                                    Continued
                                      F-10
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

1.     Organization and Summary of Significant Accounting Policies, continued

       Impairment of Long-Lived Assets

       In the event facts and  circumstances  indicate the  carrying  value of a
       long-lived asset, including associated  intangibles,  may be impaired, an
       evaluation  of  recoverability  is performed by comparing  the  estimated
       future  undiscounted  cash flows associated with the asset to the asset's
       carrying  amount  to  determine  if  a  write-down  to  market  value  or
       discounted cash flow is required.


2.     License Agreement

       In February 2000 the Company entered into an exclusive  license agreement
       with  Stanford  University to assist in the  development  of the Nicotine
       Receptor  Agonist  technology.  For the exclusive rights to this license,
       the Company paid a  non-refundable  license fee of $100,000  plus 190,000
       shares of the  Company's  common  stock to  Stanford  University  and the
       inventors of the technology. The term of the agreement is for 10 years or
       five years from the first  commercial  sale of a licensed  product by the
       Company,  whichever  occurs first. The Company is also required to pay an
       annual  royalty  of  $100,000  beginning  February  1, 2001 and each year
       thereafter  and a 6% royalty on net sales of any  licensed  product.  The
       Company is required to pay to Stanford an  additional  $100,000  upon FDA
       approval of Phase I clinical trials,  $300,000 upon FDA approval of Phase
       III clinical  trials and $500,000  within six months after FDA  marketing
       approval.

       The costs of  obtaining  the license of  $162,701  were  capitalized  and
       included in other assets in the accompanying  balance sheet.  These costs
       are  being  amortized  on a  straight  line  basis  over  the term of the
       agreement.



                                    Continued
                                      F-11
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

3.     Property and Equipment
<TABLE>
<CAPTION>
<S>                                                                                           <C>
       Property and equipment at June 30, 2000 consists of the following:
         Office furniture, fixtures and equipment                                             $   57,751

         Less accumulated depreciation                                                           (14,507)
                                                                                              ----------

                                                                                              $   43,244
                                                                                              ==========
</TABLE>

       Depreciation expense during the year ended June 30, 2000 was $4,995.


4.     Notes Payable and Convertible Debentures

       Notes payable at June 30, 2000 consist of the following:
<TABLE>
<CAPTION>
<S>                                                                                           <C>
       Notes payable to a bank,  bearing  int- erest of prime (9.00% at June 30,
         2000) plus 1% per year and due in individual monthly installments of up
         to $1,238,  including interest,  through November 2002. These notes are
         uncollateralized but are guaranteed by two stockholders
         of the Company.                                                                      $   60,245

       Notes payable to stockholders, non- interest bearing and due on demand.
         These notes are uncollateralized.                                                       795 798
                                                                                              ----------

           Total notes payable                                                                   856,043

       Less current maturities                                                                  (833,185)
                                                                                              ----------

                                                                                              $   22,858
                                                                                              ==========
</TABLE>



                                    Continued
                                      F-12
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

4.     Notes Payable and Convertible Debentures, continued

       At June 30, 1999, the Company owed amounts under  convertible  debentures
       totaling  $180,000  and received  additional  proceeds  from  convertible
       debentures  of  $536,750  during  the  year  ended  June  30,  2000.  The
       debentures  bore  interest  at a stated  rate of 8% per year,  payable at
       maturity in common stock of the  Company.  These  debentures,  originally
       scheduled  to  mature in July  2001,  were  convertible  to shares of the
       Company's  common stock at a  conversion  price per share equal to 75% of
       the  average  closing  bid price of the  common  stock for the three days
       immediately  preceding the date of  conversion.  Accordingly,  the actual
       weighted average interest rate on these debentures,  including the effect
       of the cost of the discounted  conversion  feature, is approximately 33%.
       During  the  fiscal  year  ended  June 30,  2000  all of the  outstanding
       debentures were converted to common stock through a settlement  in  which
       the  Company  issued  additional  common  stock,  which  resulted  in  an
       additional cost to the Company of $127,375.

       Future  annual  maturities  of  notes  payable  at June  30,  2000 are as
       follows:
<TABLE>
<CAPTION>

         Year Ended
          June 30,                                                                              Amount

<S>         <C>                                                                               <C>
            2001                                                                              $  833,185
            2002                                                                                  18,276
            2003                                                                                   4,582
                                                                                              ----------

                                                                                              $  856,043
                                                                                              ==========
</TABLE>

5.     Income Tax

       The  composition  of  deferred  tax assets and the related tax effects at
       June 30, 2000 are as follows:
<TABLE>
<CAPTION>
<S>                                                                                           <C>
         Benefit from carryforward of net
           operating losses                                                                   $  942,456

         Less valuation allowance                                                               (942,456)
                                                                                              ----------

           Net deferred tax asset                                                             $     -
                                                                                              ==========

</TABLE>

                                    Continued
                                      F-13
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

5.     Income Tax, continued

       The  difference  between  the  income  tax  benefit  in the  accompanying
       statement  of  operations  and the amount  that would  result if the U.S.
       Federal statutory rate of 34% were applied to pre-tax loss is as follows:
<TABLE>
<CAPTION>

                                                           2000                             1999
                                                 -----------------------------------------------------------
                                                                 Percentage                        Percentage
                                                                 of Pre-Tax                        of Pre-Tax
                                                   Amount           Loss            Amount            Loss
<S>                                                <C>             <C>               <C>              <C>
         Benefit for income tax at
           federal statutory rate                $1,011,611         34.0%         $  270,825          34.0%
         Non-deductible expenses                   (473,145)       (15.9)            (17,096)         (2.1)
         Increase in valuation
           allowance                               (538,466)       (18.1)           (253,729)        (31.9)
                                                 ----------        -----          ----------         -----

           Total                                 $     -             -  %         $     -              -  %
                                                 ==========        =====          ==========         =====
</TABLE>

       The non-deductible expenses shown above related primarily to the issuance
       of common  stock for  services  using  different  valuation  methods  for
       financial and tax reporting purposes.

       At June 30,  2000,  for federal  income tax and  alternative  minimum tax
       reporting  purposes,  the Company has approximately  $2,800,000 of unused
       net operating  losses  available for  carryforward  to future years.  The
       benefit from  carryforward  of such net  operating  losses will expire in
       various  years  between  2016 and 2020 and  could be  subject  to  severe
       limitations if significant ownership changes occur in the Company.


6.     Stock Options and Warrants

       The  Company  periodically issues incentive stock options and warrants to
       key employees,  officers,  directors and outside  consultants to  provide
       additional incentives to promote the success of the  Company's   business
       and to enhance  the  ability  to  attract  and  retain  the  services  of
       qualified persons. The issuance of such options are approved by the Board
       of Directors. The exercise price  of  an  option  granted  is  determined
       by the fair market value of the stock on the date of grant.

       Effective  December 9, 1997,  the  Company  entered  into a stock  option
       agreement  with an  employee  that  granted  the  employee  an  option to
       purchase up to 600,000 shares of the Company's restricted common stock at
       a below  market  purchase  price.  The option is for a three year  period
       expiring December 8, 2000.  According to the agreement the employee vests
       in these options as follows:
<TABLE>
<CAPTION>

                Date Vested                                                                    Amount

<S>                    <C>                                                                   <C>
              December 9, 1998                                                               $  200,000
              December 9, 1999                                                                  200,000
              December 9, 2000                                                                  200,000
                                                                                             ----------

                                                                                             $  600,000
                                                                                             ==========
</TABLE>

                                    Continued
                                      F-14
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

6.     Stock Options and Warrants, continued

       The Company recognized  compensation  expense with respect to these stock
       options in the amount of $50,000. During the year ended June 30, 2000 the
       employee  terminated his  employment  with the Company and by approval of
       the Board of Directors  became fully  vested in his stock  options  which
       were all subsequently exercised.

       During  the  year  ended  June  30,  1998, the Company also granted stock
       options to acquire upto 1,350,000  shares  of  the  Company's  restricted
       common  stock  at  $0.25  per share, which approximates market value, for
       terms of three years.

       During the year ended June 30, 1999, the Company granted stock options to
       acquire up to 250,000  shares of the Company's  restricted  common stock.
       These stock  options have a three year term and exercise  prices of $0.40
       to $0.75 per share, which approximated market value at date of grant.

       During the year ended June 30, 2000 the Company  issued stock warrants to
       acquire 332,778 shares of the Company's common stock to certain companies
       for  their  role  in the  completion  of the  Company's  preferred  stock
       offering.  These warrants have a three year term and an exercise price of
       $1.89 per share,  which  approximated  market value at the date of grant.
       The Company also issued stock  warrants to acquire  500,000 shares of the
       Company's  common stock to a company as a finder's fee for the  placement
       of the preferred stock  offering.  The warrants have a five year term and
       an exercise  price of $0.10 per share.  The costs  associated  with these
       stock warrants do not effect the Company's statement of operations as all
       costs would be offset against the offering  proceeds and recorded through
       stockholders' equity.




                                    Continued
                                      F-15
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

6.     Stock Options, continued

       The  Company  has issued  stock  options to  employees  and  non-employee
       consultants as follows:
<TABLE>
<CAPTION>
                                                                                                                    Weighted
                                      Number of Shares                                                              Average
                                                      Non-                         Exercis-        Exercise         Exercise
                                     Employee      Employee         Total            able            Price          Price
                                     --------------------------------------------------------------------------------------
<S>                                   <C>          <C>              <C>            <C>            <C>              <C>
       Options outstanding
         at June 30, 1998           1,600,000      350,000        1,950,000      1,200,000        $0.10-$0.75      $0.29

       Options granted                   -         250,000          250,000        100,000        $0.25-$0.75      $0.61
                                     --------      -------        ---------      ---------

       Options outstanding
         at June 30, 1999           1,600,000      600,000        2,200,000      1,550,000        $0.10-$0.75      $0.23

       Options granted                   -            -                -              -

       Options exercised             (600,000)        -            (600,000)          -           $0.10            $0.10
                                     --------      -------        ---------      ---------

       Options outstanding
         at June 30,2000                 -         600,000        1,600,000      1,550,000        $0.25-$0.75      $0.68
                                     ========      =======        =========      =========

</TABLE>

       Following is a summary of outstanding options at June 30, 2000:
<TABLE>
<CAPTION>

       Number of Shares                 Vested            Expiration Date               Exercise Price

<S>        <C>                          <C>               <C>                               <C>
         1,000,000                    1,000,000           June 30, 2001                     $0.25
         1,100,000                    1,100,000           June 30, 2004                     $0.25
           200,000                      150,000           June 17, 2001                      0.75
            50,000                       50,000           May, 2001                          0.75
           100,000                      100,000           June, 2001                         0.40
           150,000                      150,000           October, 2001                      0.75
           -------                      -------

           500,000                      450,000
           ====================================
</TABLE>

       During the year ended June 30, 2000,  for the first time, the Company has
       issued stock  warrants to certain  companies in payment of stock offering
       costs as follows:
<TABLE>
<CAPTION>
                                                                                                                   Weighted
                                                                                                                   Average
                                                                  Number of        Exercis-        Exercise        Exercise
                                                                   Shares            able            Price         Price

<S>                                                                 <C>            <C>            <C>   <C>        <C>
       Warrants issued                                              832,778        832,778        $0.10-$1.89      $0.82
       Warrants cancelled                                              -              -           -                -
       Warrants exercised                                              -              -           -                -
                                                                  ---------        -------        -----------      -----
       Warrants outstanding at June 30, 2000                        832,778        832,778        $0.10-$1.89      $0.82
                                                                  =========        =======        ===========      =====
</TABLE>





                                    Continued
                                      F-16


<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

6.     Stock Options, continued


       The Company has elected to follow Accounting Principles Board Opinion No.
       25,  "Accounting  for Stock  Issued to  Employees"  (APB 25) and  related
       Interpretations in accounting for its employee stock options because,  as
       discussed below, the alternative fair value accounting provided for under
       FASB  Statement  No.  123,  "Accounting  for  Stock-Based  Compensation",
       requires use of option  valuation  models that were not developed for use
       in valuing employee stock options.

       Proforma  information  regarding  net  income and  earnings  per share is
       required by Statement 123, and has been  determined as if the Company had
       accounted  for its employee  stock options under the fair value method of
       that  Statement.  The fair value for these  options was  estimated at the
       date of  grant  using a  Black-Scholes  option  pricing  model  with  the
       following weighted-average  assumptions for 1999: risk-free interest rate
       of 6%; no  dividend  yield;  weighted  average  volatility  factor of the
       expected  market  price of the  Company's  common  stock  of 0.70;  and a
       weighted-average  expected life of the options of 3 years.  There were no
       new options granted in the fiscal year ended June 30, 2000.

       The  Black-Scholes  option  valuation  model  was  developed  for  use in
       estimating   fair  value  of  traded   options   which  have  no  vesting
       restrictions and are fully  transferable.  In addition,  option valuation
       models require the input of highly subjective  assumptions  including the
       expected  stock price  volatility.  Because the Company's  employee stock
       options have characteristics significantly different from those of traded
       options,  and because  changes in the subjective  input  assumptions  can
       materially affect the fair value estimate,  in management's  opinion, the
       existing models do not  necessarily  provide a reliable single measure of
       the fair value of its employee stock options.


                                    Continued
                                      F-17


<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

6.     Stock Options, continued

       For purposes of proforma  disclosures,  the  estimated  fair value of the
       options  is  included  in  expense at the date of  issuance  because  the
       options  may be fully  exercised  at that date.  The  Company's  proforma
       information follows:
<TABLE>
<CAPTION>

                                                       2000                 1999                        1998
                                                    ---------------------------------------------------------------
<S>                                                 <C>                 <C>                            <C>
         Net loss available to common
           stockholders                             $(2,975,327)        $ (796,543)                    $(1,032,834)
         Proforma net loss available to
           common stockholders                      $(2,975,327)        $ (886,943)                    $(1,048,334)
         Proforma basic and dilutive
           loss per share                           $     (0.31)        $    (0.12)                    $     (0.16)

</TABLE>

7.     Preferred Stock

       The Company's  articles of incorporation  authorize the issuance of up to
       20,000,000 shares of preferred stock with  characteristics  determined by
       the  Company's  board of directors.  Effective May 5, 2000,  the board of
       directors  authorized  the  issuance  and sale of up to 55,000  shares of
       Series A 8% convertible preferred stock.

       On May 9, 2000,  the Company issued 15,000 shares of $0.001 par value and
       $100 per  share  stated  and  liquidation  value  Series A 8%  non-voting
       convertible preferred stock for $1,500,000.  The actual proceeds received
       by the Company were $1,040,300,  which are net of related offering costs.
       The Series A convertible preferred stock can be converted to common stock
       at any time at the  option  of the  holder.  The  conversion  rate is the
       stated value per share plus any accrued and unpaid  dividends  divided by
       85%  of the  average  of the  three  lowest  closing  bid  prices  of the
       Company's common stock for the thirty trading days immediately  preceding
       May 9, 2000, or 70% of the average of the three lowest closing bid prices
       for  the  thirty  days  immediately   preceding  the  conversion date  of
       the respective preferred stock.

       In   addition,  the  Series  A  preferred  stockholders  were  originally
       obligated  to  purchase  an  additional  30,000  shares  of  Series  A 8%
       convertible preferred stock at the option of the Company subject  to  the
       Company's  compliance  with  various  covenants. The Company has violated
       certain of these covenants but the stockholders retain the right to waive
       any violations. The purchase price of the additional shares is  $100  per
       share.

       If the  conversion  price is lower than the initial  price at the date of
       issue,  the  Company  has the  right to  redeem  the  shares  of Series A
       preferred stock at 130% of its stated value per share.

                                    Continued
                                      F-18


<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

8.     Commitments and Contingencies

       The  Company is subject to certain  legal  proceedings  and claims  which
       arose  in  the  ordinary  course  of its  business.  In  the  opinion  of
       management,  the  amount of  ultimate  liability  with  respect  to these
       actions will not  materially  affect the financial  position,  results of
       operations or cash flows of the Company.

       The Company has entered into a one-year lease  agreement for office space
       which is accounted for as an operating lease.  Rent expense for the years
       ended June 30, 2000 and 1999 was $17,250 and $15,606, respectively.


9.     Going Concern Considerations

       Since its inception,  as a development stage enterprise,  the Company has
       not  generated  significant  revenue and has been  dependent  on debt and
       equity raised from individual  investors to sustain its  operations.  The
       Company  has  conserved  cash by  issuing  its  common  stock to  satisfy
       obligations, to compensate individuals and vendors and to settle disputes
       that have arisen. However, during the years ended June 30, 2000 and 1999,
       the  Company   incurred  net  losses  of  $(2,975,327)   and  ($796,543),
       respectively, and negative cash flows from operations of ($1,566,576) and
       ($377,372),  respectively. These factors along with a ($137,563) negative
       working capital position at June 30, 2000 raise  substantial  doubt about
       the Company's ability to continue as a going concern.

       Management  plans  to  take  specific  steps  to  address  its  difficult
       financial situation as follows:


o             In the near term the Company  plans  additional  private  sales of
              debt and common and preferred stock to qualified investors to fund
              its current operations.

o             In the intermediate term, the Company plans a public  registration
              of its common stock under the  Securities and Exchange Act of 1933
              to provide a means of  expanding  the market for its common  stock
              and to provide a means of obtaining  the funds  necessary to bring
              its products to the commercial market.

o             In the  long-term,  the  Company  believes  that cash  flows  from
              commercialization  of its products  will provide the resources for
              continued operations.


                                    Continued
                                      F-19
<PAGE>
                               ENDOVASC LTD., INC.
                    (A CORPORATION IN THE DEVELOPMENT STAGE)
                    NOTES TO FINANCIAL STATEMENTS, Continued
                                   ----------

9.     Going Concern Considerations, continued

              There can be no assurance that the Company's planned private sales
              of debt and equity  securities or its planned public  registration
              of common stock will be  successful  or that the Company will have
              the ability to  commercialize  its products and ultimately  attain
              profitability.  The  Company's  long-term  viability  as  a  going
              concern is dependent upon three key factors, as follows:

       o      The Company's ability to obtain adequate sources of debt or equity
              funding to meet current commitments and fund the commercialization
              of its products.

       o      The ability of the Company to obtain positive test results of  its
              products in clinical trials.

       o      The  ability  of  the  Company  to  ultimately  achieve   adequate
              profitability and cash flows to sustain its operations.

10.    Non-Cash Investing and Financing Activities

       During  the years  ended  June 30,  2000 and 1999,  and for the period of
       inception, June 10, 1996 to June 30, 2000) the Company engaged in certain
       non-cash investing and financing activities as follows:
<TABLE>
<CAPTION>

                                                                                                 Inception
                                                             2000               1999              to Date
                                                          -------------------------------------------------

       Common stock issued in exchange
<S>                                                       <C>                <C>                 <C>
         for equity securities                            $     -            $     -             $  302,332
                                                          ==========         ==========          ==========

       Common stock issued upon conver-
         sion of debentures                               $  841,555         $  320,000          $     -
                                                          ==========         ==========          ==========

       Common stock issued for purchase
         of patent rights                                 $     -            $     -             $  484,440
                                                          ==========         ==========          ==========

       Common stock issued in settlement
         of lawsuit and related liabil-
         ities                                            $  193,000         $     -             $     -
                                                          ==========         ==========          ==========

       Common stock issued in connection
         with license agreement                           $   62,701         $     -             $     -
                                                          ==========         ==========          ==========

       Conversion of note payable to
         shareholder to common stock                      $  148,000         $     -             $     -
                                                          ==========         ==========          ==========

</TABLE>

                                      F-20