<PAGE>

                         U.S. Securities and Exchange Commission
                                 Washington, D.C. 20549

                                      FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 1999

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the Transition Period from    N/A    to    N/A

                             Commission File No. 33-97156


                                 WHITEWING LABS, INC.
                    (Name of small business issuer in its charter)

          Delaware                                            95-4437350
    (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                       Identification Number)

    15455 San Fernando Mission Blvd., #105, Mission Hills, California   91345
       (Address of principal executive offices)                       (Zip Code)

    Issuer's Telephone Number:  (818) 898-2167

            Securities registered under Section 12(b) of the Exchange Act:

                                          None

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

                            Common Stock, $.001 par value
                                    (Title of Class)

    Check whether the issuer (1) filed all reports required to be filed by
Section 12 or 15(d) of the Exchange Act during the past 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 disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and disclosure will not be
contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

    The issuer's revenue for the year ended December 31, 1999 was $1,665,129.

    The aggregate market value of the voting stock held by non-affiliates as of
February 25, 2000, computed by reference to the price at which the stock was
sold, or the average closing bid and asked quotations of such stock, was
$765,103.

DOCUMENTS INCORPORATED BY REFERENCE:  None


<PAGE>


                                   PART I

Item 1.  Description of Business.

General
    Whitewing Labs, Inc. (the "Company" or "Whitewing") develops, seeks to
acquire through license, markets and sells nutritional supplements for sale to
the over age forty market primarily in the United States.  This market is the
fastest growing segment of the population and a segment for whom quality of
life has become one of the most important issues associated with aging.  Direct
mail, magazine advertisements and electronic direct marketing of product
advertising are the primary vehicles used by the Company to reach this
expanding population segment.  Utilizing formulations that include only herbs
and other natural ingredients, the Company's products are intended to offer
alternatives to conventional treatments for symptoms associated with the aging
process.  Customers confronted with concerns such as a lack of convenient
transportation, unsafe shopping areas, and the loss of personal mobility, also
enjoy the added benefit of ordering and receiving the Company's products in the
comfort and security of their own homes.

Market

    Census data indicates that the U.S. population includes more than 40
million men between the ages of 45 and 85.  That number is projected to
increase to 54 million by the year 2002.  Women between the ages of 55 and 85
now number approximately 63 million, and are expected to number more than 80
million by the year 2002.

    Most adults approaching their 80's and 90's experience health disorders.
The U.S. Food and Drug Administration estimates that 80% of all men will
eventually experience urination difficulty, increased frequency or urgency of
urination or other prostate symptoms.  Moreover, according to health experts,
more than half of the men between the ages of 40 and 70 experience some degree
of sexual impotence.  All women experience menopause, although each woman
experiences the transition to middle age individually with different degrees of
the symptoms, which include dizziness, hot flashes and fatigue, experienced
over varying time periods and at different ages.

    Management believes that the growth of the nutritional supplement industry
is due primarily to heightened public awareness of the positive effects of
vitamins and other nutritional supplements.  Many individuals are now using
nutritional supplements as a means of preventive health care.  Retail sales of
nutritional supplements reached a high of $13.86 billion in 1998 as reported in
the Nutritional Business Journal.  The factors driving the growth so far remain
unchanged.  Demographics of an aging population, the emergence of alternative
medicine, the movement to self-directed health maintenance, a gradual
accumulation of scientific evidence, a relatively permissive regulatory
environment, the enhanced recognition, distribution and quality of supplements
and natural products among consumers.


                                       2

<PAGE>

Marketing Strategy

    The Company's strategic marketing plan utilizes a two-pronged approach.
The first approach (or "front-end" component) entails efforts to capture new
customers from the target population through electronic in-home delivery of
product advertising, direct mail and print advertising.  Selection of airings
for electronic media placements and mailing lists for direct mail, is based
upon response rates to date.  The Company determines which of the electronic
media placements or mailing lists tested have the most potential for generating
meaningful sales, and thus should be used on a more extensive basis.  In
addition, the Company has placed display advertisements in a variety of local
and national magazines.  Electronic in-home delivery of product advertising
includes use of television and the internet.  Direct mail advertising includes
postcard inserts, tear sheets, holiday special mailers and the Journal of
Natural Health "TM".  During 1999, the Company reacted to declining response
rates in certain segments of its mail order operations by reducing advertising
and selling costs from $2,969,774 in 1998 to $1,543,041 in 1999.  The strategy
for 2000 involves a more rigorous selection process in identifying and
implementing advertising programs designed to attract and retain new customers.

    The second part of the Company's approach, and the potentially more
profitable element of its marketing strategy, involves generating repeat orders
from existing customers, since the selling and advertising costs incurred in
these orders are expected to continue to be considerably lower.  Four mailings
per year to its customer base are planned for the Company's in-house Journal of
Natural Health "TM", which promotes products available from the Company.  In
addition, the Company offers two or three holiday sales per year.  The
Company's products are sold with an unconditional, money back guarantee which
alleviates the basis for customer complaints.  Product returns through December
31, 1999, have been less than 3% of sales.

Products

    The Company's two main products, which accounted for 51% and 26%
respectively of the Company's total revenue for the year ended December 31,
1999, are:

    PROSTSAFE "R":  Formulated to alleviate the symptoms associated with
prostatitis and benign prostate hyperplasia ("BPH"). Helps to reduce
troublesome symptoms such as urination difficulties, increased frequency and
urgency of urination, and low back pain.  A blend of natural herbs, vitamins,
minerals and amino acids.

    SEXHILARATE "R": Assists in increasing male virility and decreasing sexual
dysfunction by working to improve blood flow, increase hormone production,
stimulate the libido and restore physical stamina.  A unique combination of
herbs, vitamins and minerals.

    Other products currently available from the Company include the following:

    ARTHRIVIVE "R":  Addresses the internal problems that cause joint pain and
discomfort.  Arthrivive "R" contains natural anti-inflammatories that help to
relieve arthritic pain, reduce stiffness and inflammation, and improve
flexibility.  Contains herbs, vitamins and minerals.

    ARTHRIVIVE "R" CREAM:  Applied topically, this cream penetrates the skin
quickly to relieve minor arthritic aches and pains in muscles and joints.
Contains natural pain-relieving agents.

    DE-STRESS "TM":  Helps to ease tension and to meet the increased
nutritional demands that result from environmental, physical and emotional
stress.  A combination of vitamins, minerals and herbs.

    CHOLEST-LESS "TM":  Includes plant extracts and vitamins to support control
and lowering of cholesterol levels when added to a low fat, low cholesterol
diet and an exercise program.

    COLON PURE "TM":  Formulated to promote proper balance of intestinal flora,
relieve constipation and diarrhea, and guard against hemorrhoids.

    DIMI-OXIDE "TM":  Formulated to protect the body against free-radical
damage and associated tissue and cell destruction.  A combination of
antioxidant vitamins, minerals and herbs.

                                      3

<PAGE>


    ENERG-EYES "TM":  A nutritional supplement formulated to help protect
vision and reduce free radical production.  It includes minerals, plant
extracts, amino acids and vitamins are designed to help protect the strength of
the vascular and capillary walls that supply the eyes.

    EVENING GLOW "TM":  Contains botanicals and nutrients formulated to boost
the level of hormones that aid in sexual arousal with the intention of
increasing the circulating levels of estrogen and testosterone.

    IMMUNE DEFENSE "TM":  Combines important nutrients formulated to help the
body's immune system combat viruses, bacteria, foreign proteins, yeasts and
fungi.  Immune Defense "TM" can increase immune system activity as well as
strengthen the fundamental organs and glands involved in the body's immune
response.

    OSTEO SAFE "R":  Contains bone-supporting minerals, herbs and vitamins to
help ensure healthy bones.  Contains calcium, flaxseed, magnesium and other
ingredients which help preserve bone mass.

    POWER MIND "TM":  Helps improve concentration and cognition, enhance
memory, sharpen the thinking process, and prevent deterioration of brain cells.
Includes vitamins, minerals, herbs, and amino acids that work to restore
healthy neurotransmitter levels and optimize brain function.

    PRESSURE CONTROL "TM":  Formulated from high quality herbal extracts,
minerals and vitamins to promote the prevention of hypertension when used in
conjunction with proper exercise and diet.

    PROPAUSE "R":  Formulated to ease menopausal symptoms.  Propause "R" works
gently and naturally to help regulate hormonal imbalances, reduce hot flashes,
improve mood, and increase energy level.  A combination of selected vitamins and
herbs.

    PROTRANS CREAM "TM":  This is a natural Progesterone cream to be applied
topically to help increase bone density.

    RESTPIRATION "TM":  Formulated to alleviate the symptoms of asthma, hay
fever, allergies, sinusitis and bronchitis by helping the body expel foreign
organisms that cause irritation, inflammation and mucous production.  Also
provides support to the immune system, soothes inflamed sinus tissues and
assists the adrenal glands.

    SLEEPSAFE "TM":  Uses natural ingredients to help reduce the delay in sleep
onset to help promote a natural, non-addictive restful sleep.

    VIM! "TM":  Provides nutrients needed to create and sustain a high energy
level.  Consists of selected vitamins, minerals and herbs needed to maintain a
feeling of well-being and physical stamina.

    VITAMIN AND MINERAL SYSTEM "TM":  A nutrient mix that supports circulatory,
immune, bone, joint and eye health, as well as men's and women's reproductive
health.

    VITAMIN C:  This combination of ascorbic acid and citrus bioflavonoids aids
our body in fighting infection, coping with stress, healing wounds and works as
a powerful anti-oxidant.

    FRUIT MIGHT "TM", VEGGIE MIGHT "TM", and GREEN MIGHT "TM":  Developed to
provide phytochemicals and carotenoids as supplements to a healthy diet which
includes fruits and vegetables.  Includes wheat grass, chlorella and other
natural extracts.

    The following new products were developed during 1999:

    CIRC ELATION "TM": Formulated to help increase circulation to extremities -
especially relevant to baby boomers and for diabetics.

    JOINT AIDE "TM":  Formulated to support bone health and aid in reducing
swellings and inflammation of joints.

                                      4

<PAGE>


    JOINT AIDE "TM" CREAM :  This cream is formulated to compliment Joint Aide
to relieve discomfort in joints.

    NZ GESTION "TM":  Formulated to aid with the better utilization of foods
eaten.

    SKIN ELATION "TM" CREAM :  This is a cream formulated to compliment Circ
Elation "TM" to promote skin condition and improve circulation.

    All products are formulated with natural ingredients, and with no
preservatives, synthetics, artificial colors, lactose, starch or sugar. The
average price for a one month supply of any one of the current products is
between $19.95 and $34.95.

    The Company markets a video entitled WHEN SOMEONE YOU LOVE IS AT RISK FOR
PROSTATE DISEASE, developed to raise awareness about the prostate and prostate
diseases, symptoms, diagnosis and prevention.  The tape is sold for $19.95.  The
Company also has available two audio tapes, both thirty minutes in length.  The
first is for men:  THE NATURAL PATH OF MEN'S HEALTH:  PROSTATE CARE.  The second
is for women:  PASSAGE TO YOUR SECOND LIFE:  FLOURISHING AFTER MENOPAUSE.  Each
of these tapes is sold for $14.95.

Product Planning and Development

    The Company anticipates continuing to expand its product line.  Product
development begins with researching medical conditions that can be affected by
herbal remedies utilizing completed current studies from recognized doctors,
pharmacologists, scientists, and experts.  When sufficient information is
accumulated on a specific health problem, the Company summarizes the information
and presents it to a number of experts in the nutritional field.  These experts
have formulated a number of nutritional products sold nationally by other
companies.  These experts work with the Company to develop formulas and compile
substantiation for new products to be offered.  In addition to its product
development efforts, the Company intends to expand its product offerings by
obtaining the right to market licensed products that complement the overall
product line and are not currently offered via direct mail.  For example, the
Company is currently considering various cosmetic, hair care, and educational
products with established brand names that could be marketed to its existing
customer base.

Production, Order Procurement and Fulfillment

    The Company's nutritional products currently are produced by Vitaminerals,
Inc., which also bottles and labels the products.  Vitaminerals then ships them
to an outside distribution center where order fulfillment is handled for the
Company by an independent contractor.  Although there is no long-term contract
between the Company and Vitaminerals, with all purchases made pursuant to simple
purchase orders, the Company does provide Vitaminerals with an advance quarterly
forecast of the Company's product requirements that is used by Vitaminerals to
procure sufficient quantities of herbs that have a limited growing season.
Vitaminerals has manufactured drugs, as well as vitamins, for over 75 years, and
its operations are subject to regulations of, and monitoring by, the U.S. Food
and Drug Administration ("FDA").  Since the FDA does not monitor the operations
of manufacturers who produce only vitamins, management believes that the
Company's use of Vitaminerals for production, packaging and labeling
significantly enhances controls on the quality of the Company's products.
Vitaminerals is also regulated by, and holds a variety of licenses for drug and
processed food manufacture issued by, various state and local regulatory
authorities, including the State of California Department of Consumer Affairs
and the County of Los Angeles.

    Although the Company does not engage in the manufacture of any of the
products it markets and sells, the Company could be exposed to product liability
claims.  The Company has not had any such claims to date.  Although the Company
maintains a limited amount of products liability insurance, additional insurance
covering products sold by the Company is also provided by Vitaminerals.  There
can, however, be no assurance that the Company will not be subject to claims in
the future or that available insurance coverage will be adequate.

    Independent contractors and outside service agencies are used to perform a
number of tasks under the supervision of management, including advertising
placement, in-bound order taking, and order fulfillment.  The Company also has
entered into an agreement with Professional Marketing Associates, Inc. to
provide warehousing and distribution of the Company's products which
automatically renews for successive six-month periods unless terminated by
either party.

                                      5

<PAGE>

    Outsourcing of production, order taking and order fulfillment to an outside
company and three independent contractors, potentially subjects the Company to
concentration of supplier risk.  In addition, substantially all printing is
handled by an outside company and substantially all advertising placement
including purchase of mailing lists for direct mail programs is handled by an
outside service agency.  Although these services are currently concentrated
with a few key suppliers, management believes that other suppliers could
provide similar services on comparable terms.  A change in suppliers, however,
could cause delay in manufacturing, shipping, advertising placements and
implementation of direct mail programs and a possible loss of sales, which
could affect operating results adversely.

Regulation

    The FDA and the Federal Trade Commission ("FTC") are the primary agencies
that monitor the health care and direct marketing industries in the United
States.  Because nutritional supplements are classified as foods, they do not
require FDA approval.  However, product labeling and advertising copy must be
within FDA established guidelines.  FTC regulations also address advertising
copy, fraud, and specific guidelines for shipping and refunds.  The Company's
promotional literature presents the effectiveness of ingredients contained in
the formula, based on documented studies conducted by reputable independent
health care professionals, along with testimonials from satisfied users of the
products.  In addition, the Company maintains a library of articles and studies
cited in promotional materials as well as original letters from customers'
testimonials.

    The FDA food labeling regulations went into effect during March 1999.  All
food products, including nutritional supplements had to conform to the new
formats.  The Company is in compliance with the new label law.  All existing
and new products utilize the new label formats.

    The FDA's health claims regulations include no claim may be made on a
dietary supplement label or in printed sales literature, "that expressly or by
implication characterizes the relationship of any substance to a disease or
health-related condition."  The Company cannot determine what effect currently
proposed FDA regulations, when and if promulgated, will have on its business in
the future.  Such regulations could, among other things, require expanded or
different labeling, the recall or discontinuance of certain products,
additional record keeping and expanded documentation of the properties of
certain products and scientific substantiation.  In addition, the Company
cannot predict whether new legislation regulating its activities will be
enacted, which new legislation could have a material effect on the Company.

    The Company has an ongoing compliance program with assistance from outside
consultants regarding the nature and scope of food and drug legal matters
affecting the Company's business and products.  The Company is unaware of any
legal actions currently pending or threatened by the FDA or any other
governmental authority against the Company.

Competition

    The market for nutritional supplements is characterized by extensive
competition, frequent new product introductions, short product life cycles,
rapid price declines and eroding profit margins, and changing customer
preferences.  The Company expects to continue to face substantial competition
in its efforts to successfully capture a significant share of the over age
forty market.  There are a number of companies that currently offer competing
products, and it can be expected that additional competing products will be
introduced by other companies in the future.  In addition, there are a variety
of channels of distribution for nutritional supplements other than through
direct response marketing, including multi-level distributors, specialty retail
health and nutrition stores, drug stores, supermarkets and the Internet.  Many
of the Company's existing and potential competitors have greater financial,
marketing, distribution, and research capabilities than the Company.  The
performance of the Company will depend on its ability to develop and market new
products that can gain customer acceptance and loyalty, as well as its ability
to adapt its product offerings to meet changing pricing considerations and
other market factors.  The Company attempts to differentiate itself from
competitors by focusing on products formulated to meet the specific needs of a
given population group and which contain only natural ingredients, and
marketing these products directly to the Company's target age group.

                                      6

<PAGE>

Proprietary Rights

    The Company has received federal trademark registration for PROSTSAFE "R",
SEXHILARATE "R", PROPAUSE "R", ARTHRIVIVE "R", ARTHRIVIVE "R" CREAM, and OSTEO
SAFE "R", and intends to continue to seek trademark protection for a number of
the brand names under which the Company's products are marketed.  There can be
no assurance that such protection will be obtained.  The Company will be
required to rely upon common law concepts of confidentiality and trade secret
laws to protect its product formulations. There can be no assurance that the
foregoing will protect the formulations or provide adequate remedies for the
Company in the event of unauthorized use or disclosure of such formulations, or
that others will not be able to independently develop such formulations.  In
addition, each quarterly edition of the Journal of Natural Health "TM", which
promotes products available from the Company, is copyrighted.  International
trademarks are being obtained as Whitewing enters foreign markets.  European
trademarks have already been filed and other country trademark applications are
in progress.


Employees

    In addition to its President, the Company has a total of five employees,
three of whom are involved in general administration and two of whom are
involved in customer service and order processing and reporting.  The Company's
success depends to a significant extent upon the continued service of its
President, Cynthia Kolke.  The loss of Ms. Kolke, who may terminate her
services to the Company at any time, could have a material adverse effect on
the Company.  The Company maintains a $500,000 key-person insurance policy on
the life of Ms. Kolke.  The Company's success also depends on its ability to
retain its key personnel, and on its ability to attract, retain, train and
motivate additional highly skilled and dedicated employees. The Company is not
a party to any collective bargaining agreement.  The Company has never
experienced a work stoppage and believes that its relations with its employees
are excellent.  From time to time, the Company may retain independent third
parties to provide services on a contract, "as needed" basis.

Item 2.  Description of Property.

    The Company leases a 1,754 square foot office in Mission Hills, California,
that management believes is sufficient for the Company's current needs and
future growth.

Item 3.  Legal Proceedings.

    None

Item 4.  Submission of Matters to a Vote of Security Holders.

    None

                                      7

<PAGE>

PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

Recent Market Prices

    Since April 9, 1999, the Company's Common Stock and Warrants have traded
separately on the Over-the-Counter Bulletin Board ("OTCBB").  Prior to April 9,
1999, the Company's Common Stock and Warrants traded on the Nasdaq SmallCap
Market under the symbols "WWLI" and "WWLI-W", respectively, since February 14,
1996.  No assurance can be given that an active trading market for the Common
Stock and Warrants will be sustained in the future.  The market for the
Company's Common Stock has experienced extreme price and volume fluctuations
during certain periods.  These broad market fluctuations and other factors,
such as new product developments and trends in the Company's industry and the
investment markets generally, as well as economic conditions and quarterly
variations in the Company's results of operations, have in the past, and may
continue to adversely affect the market price of the Company's Common Stock.
The Company's securities are subject to rules adopted by the Commission
regulating broker-dealer practices in connection with transactions in "penny
stocks."  Penny stock generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national securities
exchanges or quoted on Nasdaq, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or the Nasdaq system).  Any broker engaging in a transaction in the
Company's securities is required to provide any customer with a risk disclosure
document, disclosure of market conditions, if any, disclosure of the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly accounts showing the market values of the Company's securities held in
the customer's account.  The bid and offer quotation and compensation
information needs to be provided prior to effecting the transaction and needs
to be contained on the customer's confirmation.

    The following table sets forth the high and low closing bid quotations for
a share of the Company's Common Stock as well as the high and low closing bid
quotations for a Warrant, during the periods presented, as reported by Nasdaq
and the OTCBB.  Bid quotations represent high and low prices quoted between
dealers, do not include commissions, mark-ups, or mark-downs, and may not
represent actual transactions.
<TABLE>
<CAPTION>

Common Stock                                 1998                   1999
                                         High      Low         High       Low
     <S>                               <C>         <C>         <C>        <C>
     First Quarter ended March 31,     $1-9/16     $7/8        $7/8       $1/2
     Second Quarter ended June 30,     $2          $1-5/16     $13/16     $1/4
     Third Quarter ended September 30, $1-5/16     $9/16       $17/32     $3/16
     Fourth Quarter ended December 31, $7/8        $7/16       $1/32      $1/64

     Warrants

     First Quarter ended March 31,     $29/128     $1/32       $1/8       $1/32
     Second Quarter ended June 30,     $3/8        $1/8        $3/32      $1/32
     Third Quarter ended September 30, $7/32       $1/8        $1/16      $1/32
     Fourth Quarter ended December 31, $1/8        $1/16       $1/32      $1/32
</TABLE>

    On February 25, 2000, the closing bid and asked quotations for the Common
Stock, as reported on the OTCBB, were $.45 and $.55, respectively, per share.
On that date, the closing bid and asked quotations for the Warrants, as
reported on OTCBB, were $.03 and $.125, respectively, per Warrant.

                                      8

<PAGE>

Description of Securities

    The Company is authorized to issue up to 10,000,000 shares of Common Stock,
$.001 par value, and 500,000 shares of preferred stock, $.001 par value.  As of
January 12, 2000, there were 355 holders of record of shares of the Company's
Common Stock and 226 holders of record of Warrants, including shares and
Warrants held in "street" or "nominee" names for an undetermined number of
beneficial holders.  Prior to the Company's public offering, shares of
preferred stock were sold to raise equity capital.  See Item 6, "Management's
Discussion and Analysis, Liquidity and Capital Resources".  In connection with
the public offering, all of these shares were converted into Common Stock.  No
shares of preferred stock were outstanding as of January 12, 2000.

    Holders of the Company's Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders, and there is no cumulative
voting for the election of directors to the Company's classified Board of
Directors.  Holders of the Company's Common Stock are entitled to receive
ratably such dividends, if any, as may be declared by the Board of Directors
out of funds legally available therefore.  Upon the liquidation, dissolution,
or winding up of the Company, the holders of the Company's Common Stock will be
entitled to share ratably in all assets of the Company which are legally
available for distribution, after payment of all debts and other liabilities.
Holders of the Company's Common Stock have no preemptive, subscription,
redemption or conversion rights.

    Shares of the Company's Preferred Stock may be issued from time to time in
one or more series as may be determined by the Board of Directors.  The voting
powers and preferences, the relative rights of each series, and the
qualifications, limitations and restrictions thereof may be established by the
Board of Directors without any further vote or action by the Company's
stockholders, except that no holder of Preferred Stock will have preemptive
rights.  Issuance of shares of the Company's Preferred Stock may have the
effect of delaying, deferring or preventing a change in control of the Company.
The Company has no present plan to issue any shares of its Preferred Stock in
the foreseeable future.

    Since November 4, 1997 when the exercise price of the Warrants was reduced,
the holder of two Warrants is entitled to purchase one share of the Company's
Common Stock at a price of $3.00 (previously $7.00) per share during a three-
year period ended on February 9, 1999.  These warrants have been extended to
expire on February 9, 2002.  The Company may at any time and from time to time
extend the term of the Warrants or reduce the exercise price of the Warrants.
Unless exercised during the exercise period, the Warrants will expire
automatically.  The holders of Warrants as such, are not entitled to vote, to
receive dividends or to exercise any of the rights of stockholders for any
purpose.  Since February 9, 1997, the Company has been entitled, at its
discretion, to call all of the Warrants for redemption on 45 days prior written
notice at a redemption price of $.05 per Warrant.  However the Warrants cannot
be called for redemption unless and until:  (i) the closing bid price of the
Company's Common Stock exceeds the exercise price of the Warrants by at least
50% during a period of at least 20 of the 30 trading days immediately preceding
the notice of redemption; (ii) the Company has in effect a current registration
statement covering the Common Stock issuable upon exercise of the Warrants; and
(iii) the expiration of the 45 day notice period is within the term of the
Warrants.  If the Company elects to exercise its redemption right, holders of
Warrants may either exercise their Warrants, sell such Warrants in the market
or tender their Warrants to the Company for redemption.  Within five business
days after the end of the 45 day period, the Company will mail a redemption
check to each holder of a Warrant who holds unexercised Warrants as of the end
of the 45 day period, whether or not such holder has surrendered the Warrant
certificates for redemption.  The Warrants may not be exercised after the end of
such 45 day period.

    U.S. Stock Transfer Corporation, 1745 Gardena Avenue, Glendale, California
91204-2991, is the appointed Transfer Agent and Registrar for the Common Stock
and the Warrants, and the Warrant Agent under the Company's Warrant Agreement.

Shares Eligible for Future Sale

    All of the issued and outstanding shares of the Company's Common Stock have
been registered under Securities Act of 1933, as amended (the "Securities Act").
However, 789,709 of these shares are held of record by Acacia, an "affiliate"
of the Company, and therefore are considered "restricted securities", as those
terms are defined under the Securities Act and the rules and regulations
thereunder.  Shares of the Company's Common Stock owned by "affiliates"
(including Acacia) may be publicly sold only by complying with Rule 144 under
the Securities Act (exclusive of the two-year holding period) unless registered
under the Securities Act, or some other exemption from further registration
thereunder is available.  Sales of substantial amounts of these shares, or even
the potential for such sales, could have an adverse effect on any market price

                                      9

<PAGE>
for shares of the Company's Common Stock that could develop, and could impair
the Company's ability to raise capital through the sale of its equity
securities.

Rights to Acquire Shares

    As of February 25, 1999, a total of 428,685 shares of Common Stock have
been reserved for issuance upon exercise of outstanding options granted under
the Company's Stock Option Plan.  All of these shares, together with the
additional 571,315 shares available for the future grant of options under the
Stock Option Plan, have been registered under the Securities Act.  The exercise
price of the outstanding options ranges between $0.089 and $5.00, with a
weighted average exercise price of $.863 per share.  In connection with the
Company's initial public offering, the Representatives of the Underwriters
acquired options to purchase up to 90,000 shares of Common Stock at $6.00 a
share and 90,000 Warrants at $.24 a warrant in connection therewith (the
"Representative's Securities").  The Representative's Securities expire after
February 9, 2001.  The Representatives were also granted certain registration
rights with regards to the Representative's Securities which could result in
substantial expense to the Company.  During the terms of the outstanding
options and the Representative's Securities, all of which expire on or before
July 11, 2000, the holders thereof will have the opportunity to profit from an
increase in the market price of the Company's Common Stock with resulting
dilution in the interest of holders of Common Stock.  The existence of such
stock options and the Representative's Securities may adversely affect the
terms on which the Company can obtain additional financing, and the holders of
such options can be expected to exercise or convert such options at a time when
the Company, in all likelihood, would be able to obtain additional capital by
offering shares of its Common Stock on terms more favorable to the Company than
those provided by the exercise or conversion of such options.


Dividend Policy

    The Company has never paid any cash dividends on its Common Stock and does
not anticipate that it will pay dividends in the foreseeable future.  Instead,
the Company intends to apply any earnings to the development and expansion of
its business.

Item 6.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

Forward-Looking Statements

    Statements contained herein that are not purely historical are forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, including but not
limited to statements regarding the Company's expectations, hopes, beliefs,
intentions or strategies regarding the future.  Actual results could differ
materially from those projected in any forward-looking statements as a result
of a number of factors, including those detailed in this Management's
Discussion and Analysis of Results of Operations and Financial Condition, as
well as those set forth elsewhere herein.  The forward-looking statements are
made as of the date of the financial statements of the Company set forth
elsewhere herein and the Company assumes no obligation to update the forward-
looking statements, or to update the reasons why actual results could differ
materially from those projected in the forward-looking statements.

General

    The Company formulated its business plans and strategies based on certain
assumptions of the Company's management regarding the size of the market for
nutritional supplements, the products which the Company will be able to offer
to the over age forty market, the Company's anticipated share of the market,
and the estimated prices for and acceptance of the Company's products.
Although these plans and assumptions were based on the best estimates of
management, there can be no assurance that these assessments will prove to be
correct.  No independent marketing studies have been conducted on behalf of or
otherwise obtained by the Company, nor are any such studies planned.  Any
future success that the Company might enjoy will depend upon many factors,
including factors which may be beyond the control of the Company or which
cannot be predicted at this time.  These factors may include product
obsolescence, increased levels of competition, including the entry of
additional competitors and increased success by existing competitors, changes
in general economic conditions, increases in operating costs including costs of
supplies, personnel and equipment, reduced margins caused by competitive
pressures and other factors, and changes in governmental regulation imposed
under federal, state or local laws.

                                      10

<PAGE>

    The Company continued its plan of expanding its customer database during
1999 by exploring other direct response media such as electronic in-home
delivery of product advertising.  Utilizing a large portion of the net proceeds
from its February 1996 initial public offering, the Company invested
approximately $1,543,041 in selling and advertising expense in furtherance of
this strategy during the year ended December 31, 1999.  These expenditures have
not started to produce comparable increases in revenue.  As a result, the
Company reported a loss for the year.  It is anticipated that the Company will
continue to stress growth of the customer database over short-term profits; the
Company's management believes potential net earnings will be driven by
continued growth of the customer database.

    The costs of deferred print advertising placements and direct mailings are
amortized, based upon management's estimates, over the periods in which the
related direct responses are received.  The Company evaluates the realizability
of its direct-response advertising by comparing the carrying amount of prepaid
and deferred advertising at each balance sheet date on a cost-pool-by-cost-pool
basis to the probable remaining future net revenues expected to result from
such advertising.  An excess carrying amount over probable remaining future
revenues is reported as advertising expense in the current period.

    Newspaper and weekly publications are expensed in the month of issue.

    Sales of the Company's PROSTSAFE "R" product accounted for approximately
48% and 51% of net sales for the years ended December 31, 1998 and 1999,
respectively.  During 1999, SEXHILARATE "R" accounted for 26% of net sales.
The Company anticipates that sales of PROSTSAFE "R" will continue to contribute
a substantial portion of total revenues in subsequent periods.  A decline in
the demand for this product, whether as a result of competition or other
factors, could have a material adverse effect on the Company's results of
operations and financial condition, particularly if not offset by growth in
sales of SEXHILARATE "R" or other products.  The markets for the Company's
products are characterized by changing customer demand, short product life
cycles, and frequent new product introductions.  The performance of the
Company will depend on the ability of the Company to develop and market new
products that will gain customer acceptance and loyalty, as well as its ability
to adapt its product offerings to meet changing pricing considerations and
other market factors.  The Company's operating performance would be adversely
affected if the Company were to incur delays in developing new products or if
such products did not gain market acceptance.  Therefore, there can be no
assurance that the Company's existing or future products will be sufficiently
successful to enable the Company to effectively compete in its prospective
market or, should the Company's product offerings meet with significant
customer acceptance, that one or more current or future competitors will not
introduce products which render the Company's products noncompetitive.

    Like other distributors of consumer products, the Company encounters the
risk of product returns from its customers.  The Company's products are sold
with an unconditional, money-back guarantee.  Any customer who is not satisfied
with a Company product for any reason may return it or any unused portion for a
full refund of the purchase price.  Although product returns to date have been
approximately 3% of sales, which is substantially less than the national
average of 6%, there can be no assurance that actual levels of returns will not
significantly exceed amounts anticipated by the Company.

    The Company's operating results have in the past and may continue to vary
significantly due to a variety of factors including changing customer profiles,
the availability and cost of raw materials, the introduction of new products by
the Company or its competitors, the timing of the Company's advertising and
promotional campaigns, pricing pressures, general economic and industry
conditions that affect customer demand, and other factors.  It can be expected
that future operating results will continue to be subject to many of the
problems, expenses, delays and risks inherent in the establishment of a new
business enterprise, many of which the Company cannot control.  There can be no
assurance, therefore, that the Company will even be able to achieve or sustain
profitability.

Selected Financial Data

    The following table sets forth for the periods indicated selected financial
data for the Company.  The selected statement of operations and balance sheet
items which follow have been derived from the Company's audited financial
statements and notes thereto included elsewhere herein.  This information
should be read in conjunction with the audited financial statements and related
notes and the other financial information included elsewhere in this Form
10-KSB.

                                      11

<PAGE>

<TABLE>


Statements of Operations Data:
<CAPTION>

                                                     Year ended December 31,
                                                   1998                 1999
<S>                                           <C>                  <C>
Net sales                                     $ 3,934,847          $ 1,665,129
Gross profit                                    3,290,024            1,379,214
Operating expenses:
   Selling and advertising expenses             2,969,774            1,543,041
   General and administrative expenses            681,014              598,314
   Total operating expenses                     3,650,788            2,141,355
Loss from operations                             (360,764)            (762,141)
Other income, net                                  87,675               73,245
Loss before provision
   for income taxes                              (273,089)            (688,896)
Income tax provision                                 (850)             (25,350)
Net loss                                      $  (273,939)            (714,246)

Net loss attributable
   to common shareholders                     $  (273,939)        $   (714,246)

Basic and diluted loss per common share       $     (0.09)        $       0.24)

Weighted average number of
   common shares outstanding                    2,896,372            2,925,440


                                                     Year ended December 31,
Balance Sheet Data:                                1998                 1999

Working capital                               $ 1,810,019         $ 1,113,599
Total assets                                    1,952,349           1,223,276
Total liabilities                                  35,504              20,671
Shareholders' equity                            1,916,845           1,202,605
</TABLE>


Results of Operations

    The following table sets forth, for the periods indicated, the percentages
of net sales represented by certain items in the Company's statements of
operations.

Percentage of Net Sales
<TABLE>
<CAPTION>

                                                   Year ended December 31,
                                               1998                        1999
<S>                                          <C>                        <C>
Net sales                                    100%                       100%
Gross profit                                  83.6%                      82.8%
Selling and advertising expenses              75.5%                      92.7%
General and administrative expenses           17.3%                      35.9%
Loss before income taxes                      (6.9%)                    (41.4%)
Income Tax Provision                           -                         (1.5%)
Net loss                                      (6.9%)                    (42.9%)

</TABLE>

                                      12

<PAGE>

    Net Sales.  Net sales decreased in 1999 by 57.6% to $1,665,129 compared to
$3,934,847 in 1998.  The Company varied its efforts to attract new customers in
1999 and experienced growth from its existing customer base.  The customer base
grew to approximately 185,000 customers at December 31, 1999 from approximately
180,000 customers at December 31, 1998.  The decrease in sales is attributed to
increased competitive offers.  The Company believes many of its competitors'
offers are at or below cost with many competitors showing annual losses in the
millions and gross profits as low as 5%.

    Reorders from existing customers accounted for approximately 66% and 89% of
net sales in 1998 and 1999, respectively.

    Gross Profit.  Cost of goods sold for the Company's products represents
only a small percentage of net sales.  During the years ended December 31, 1998
and 1999, the Company generated gross profit of $3,290,024 and $1,379,214,
respectively, or 83.6% and 82.8% of net sales, respectively.  Although sales of
Prostsafe "R" and Sexhilarate "R" represented approximately 51% and 26% of
total sales, respectively, in 1999, sales of the Sexual Energy package
(including Prostsafe "R" and Sexhilarate "R" which yield a significantly lower
margin, also increased.

    Selling and Advertising Expense.  During the year ended December 31, 1999,
selling and advertising expense decreased by 48% to $1,543,041, representing
92.7% of net sales, compared to $2,969,774, or 75.5% of net sales, in 1998.
This expense decrease resulted primarily from a shift away from print
advertising towards other media such as electronic in-home delivery of product
advertising as the Company sought more favorable response rates for the
marketing dollar.  In 1999 and 1998, advertising expense was $627,671 and
$1,610,516, respectively, or 37.6% and 40.9% of net sales, respectively.

    Prepaid advertising at December 31, 1999, includes approximately $22,135 of
costs related to the development of electronic in-home delivery of product
advertising.  The Company is expensing costs related to the development of
electronic in-home delivery of product advertising over a period not to exceed
the lesser of the revenue earning stream directly related to advertising or one
year, whichever comes first.

    General and Administrative Expense.  General and administrative expenses
decreased 12.1% to $598,314 or 35.9% of net sales for the year ended December
31, 1999 compared to $681,014 or 17.3% of net sales in 1998.

    Income (Loss) From Operations.  The loss from operations for the year ended
December 31, 1999 increased to $714,246, primarily due to the competitive
changes in the marketplace.  These changes include competitors giving special
offers like free replacement products, free delivery, $25.00 off your first
order, etc.

Year 2000

    Management has reviewed its internal software and hardware components and
believes that the Company's systems are Year 2000 compliant.  Management has
also made inquiries of its primary vendors as to the capabilities of their
systems with respect to the Year 2000.  At this time, it has been conclusively
determined that the systems of these vendors are Year 2000 compliant, however,
based on recent discussions with the vendors, management believes the vendors
will be capable of meeting the needs of the Company beyond the year 1999.  The
Company did not experience any problems with the calendar change of the Year
2000.


Liquidity and Capital Resources

    During the years ended December 31, 1999 and 1998, the Company's operations
required cash of $455,843 and $161,427, respectively.  As of December 31, 1999,
the Company had cash and short-term investments on hand of $913,285.  The
Company has no commitments for placements of electronic in-home delivery of
product advertising and magazine advertisements as of December 31, 1999.

    Management currently anticipates that the Company will generate sufficient
cash flow, supplemented by the remaining balance of the net proceeds to the
Company from its initial public offering, to finance the Company's operations
at currently anticipated levels at least through the end of 2000.  However,
there can be no assurance that the Company will not encounter unforeseen
difficulties that may deplete its capital resources.  In addition, management

                                      13

<PAGE>

believes that the Company's growth can be accelerated by continuing to use the
net proceeds of the offering to finance various marketing, advertising and
promotional activities.

    The development and expansion of the Company's business that was financed
using the net proceeds from the Company's initial public offering placed
significant demands on the Company's infra-structure, and required the Company
to hire additional personnel, to implement additional operating, manufacturing
and financial controls, install additional reporting and management information
systems for order processing, system monitoring, customer service and financial
reporting, and otherwise to improve coordination between formulation,
manufacturing, marketing, sales and finance functions.  The Company's future
operating results will depend on management's ability to manage future growth,
and there can be no assurance that efforts to manage future growth will be
successful.  Management believes that the availability of proceeds from the
Company's initial public offering may enhance the Company's ability to increase
the scope of its business more rapidly by taking advantage of opportunities to
acquire additional product offerings, or even complementary businesses, on a
favorable basis.  Although the Company is not currently a party to any
agreement or understanding with respect to any prospective acquisition, it has
explored and continues to evaluate possible opportunities to license or
otherwise acquire the right to market products that complement the Company's
product line.

    If circumstances indicate that the Company should endeavor to expand its
business at a faster rate than that currently planned for, it is likely that
the Company would attempt to raise additional capital to accelerate its growth.
In all events, the Company's ability to continue operations beyond the year
2000 will depend upon its ability to generate a significant cash flow from its
expanded operations.  If sufficient cash flow is not being generated at the end
of this period, the Company would be required to seek additional funds through
equity, debt or other external financing.  There can be no assurance that any
additional capital resources which the Company may need will be available if
and when required, or on terms that will be acceptable to the Company.  If
additional financing is required, or desired, the Company may be required to
forego a substantial interest in its future revenues or dilute the equity
interests of existing shareholders, and a change in the control of the Company
could result.

    The Company's shares and warrants were delisted on April 9, 1999 from
trading on the Nasdaq SmallCap and are now traded electronically on the Over-
the-Counter Bulletin Board.  This delisting has made it more difficult to
effect trades and the Company's frequency of trades and trading volume have
decreased significally since the delisting.  The delisting has reduced the
Company's visibility and will likely adversely effect the Company's ability to
attract and obtain financing in the future because of the decreased liquidity
of the Company's shares.  See "Item 5.  Market for Registrant's Common Equity
and Related Stockholder Matters."

    The Company initiated an open market stock repurchase program in July 1996
in which up to 200,000 shares or 7% of outstanding shares of the Company's
common stock may be acquired in the open market.  To date, the Company has
repurchased and retired 41,450 shares.  Future repurchases will depend on the
Company's cash flow and on such other factors the Company deems relevant.

Item 7.  Financial Statements.

    The financial statements and supplemental data required by this Item are
filed as exhibits hereto, as listed in the Index to Financial Statements
included under Item 13(c) of Part IV below, and are incorporated herein by this
reference.

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

    None

                                      14

<PAGE>

PART III

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

    The directors and executive officers of the Company are as follows:

<PAGE>
<TABLE>
<CAPTION>

    Name                Age       Positions
<S>                     <C>       <C>
Cynthia Kolke           52        President, Assistant Secretary and Director

R. Bruce Stewart        62        Chairman of the Board, Secretary and Treasurer

Paul R. Ryan            54        Director

William D. Fox          62        Director

</TABLE>

    Cynthia Kolke has 26 years experience in sales and marketing.  From 1965
through 1986 she was employed in a number of capacities, including Director of
Marketing by The Service Bureau Corporation, a division of IBM which was sold
to Control Data in 1973.  Between 1986 and 1989, Ms. Kolke served as the Vice
President of Sales for Light Signatures, and operated as an independent
marketing consultant thereafter until she joined G.B. Data Systems, Inc., a
direct mail, nutritional supplement marketing company, in April 1990 as its
Operations Manager.  In July 1993, she left G.B. Data Systems, Inc. to co-found
Whitewing Labs as its President, Assistant Secretary and as a director.  She
holds a Bachelor's degree in Marketing and Data Processing from the Detroit
College of Business.

    R. Bruce Stewart, who served as Chairman, President and Chief Executive
Officer of Acacia, the Company's largest shareholder and a publicly-held
corporation, from 1993 to January 1997, devoted much of his time to the
formation of Whitewing Labs and the development of its plan of operations.
Mr. Stewart is currently Acacia's Chairman and Chief Financial Officer.  From
August 1977 to March 1991, Mr. Stewart served as President of Annandale
Corporation, a financial consulting firm.

    Paul R. Ryan became a director of the Company in October 1996.  He was Vice
President of Capital Management and a director of Acacia since June 1995.  He
was elected President and Chief Executive Officer of Acacia in January 1997.
He received a B.S. degree from Cornell University and attended New York
University Graduate School of Business.  Mr. Ryan was a general partner of
the American Health Care Fund, L.P. until 1993.

    William D. Fox has owned Classic Tire, an automotive repair and tire
retailer since 1992.  For the previous seven years, he conducted an independent
management consulting business.  He joined the Company's Board of Directors in
February 1996, upon consummation of the Company's initial public offering. From
1963 through 1984, Mr. Fox held numerous positions with IBM and Control Data,
including Branch Manager and Marketing Program Administrator.  He graduated
from Middlebury College with a B.A. degree in Political Science.

    The Company's Board of Directors has established an audit committee
comprised of Mr. Stewart, Mr. Ryan and Mr. Fox, which meets periodically to
consult with the Company's independent auditors concerning their engagement and
audit plan, and concerning the auditor's report and management letter and, with
the assistance of the independent auditors, monitors the adequacy of the
Company's internal accounting controls.  The Company's Board of Directors has
established a compensation committee comprised of Mr. Stewart and Mr. Fox.  The
compensation committee, a committee of board members, met in July 1999 to
review and determine the compensation of the Company's executive officers,
adopt compensation policies and practices, and review and pass upon all
transactions with affiliates and other persons having a material financial
interest in the Company.  The Board has not established a separate nominating
committee.  Rather, all members of the Company's Board of Directors meet to
nominate the individuals to be proposed by the Board of Directors for election
as directors of the Company.

    Subject to the terms of applicable employment agreements, of which there
currently are none, officers are appointed by and serve at the discretion of
the Board of Directors.  The Company's Certificate of Incorporation currently
provide for a Board of Directors divided into two classes of directors serving
staggered terms, with one-half of the total number of authorized directors

                                      15

<PAGE>

(currently four) to be elected at each annual meeting of the Company's
stockholders to serve a 2-year term.  No family relationships exist between any
of the officers or directors of the Company.  Terms for Cynthia Kolke and R.
Bruce Stewart expire in 2000.  Terms for William D. Fox and Paul R. Ryan expire
in 2001.


Compliance with Section 16(a) of the Securities Exchange Act of 1934

    Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's Common Stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission ("SEC").  Officers, directors and
greater than ten percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Management believes all such individuals were in compliance with Section 16(a)
as of the filing date of this Annual Report on Form 10-KSB, and that none were
delinquent.

Item 10.  Executive Compensation.

    The following table summarizes the annual compensation paid by the Company
during fiscal years ended December 31, 1998 and 1999 to the President of the
Company.  No other executive officer of the Company received an annual salary
and bonus exceeding $100,000 during the year ended December 31, 1999.


<TABLE>
    Summary Compensation Table
<CAPTION>
                                             Annual Compensation
Name and                                    Salary   Bonus  Other
Principal Position                    Year     $       $      $
<S>                                           <C>     <C>    <C>
Cynthia Kolke,                        1998    91,400  -      -
President, Assistant                  1999    88,500  -      -
Secretary and Director

</TABLE>

The Company leases and pays the insurance on an automobile on Ms. Kolke's
behalf at a cost of $4,298 in 1999.

    Each director of the Company who is not otherwise employed full-time by the
Company or Acacia is paid $100 for each Board meeting attended.  Directors are
also reimbursed for their travel expenses incurred in attending Board or
committee meetings.  Directors have previously not been compensated for their
attendance at Board meetings, except for reimbursement of travel expenses.

Stock Options

    The Company's 1993 Stock Option Plan, as amended (the "Stock Option Plan"),
authorizes the granting of options to employees that are intended to qualify as
"incentive stock options" under the Internal Revenue Code of 1986 ("Incentive
Stock Options"), as well as stock options that are not intended to so qualify
("Nonstatutory Options") which may be granted to officers, directors,
employees, consultants, and others expected to provide significant services to
the Company or its subsidiaries.  The Stock Option Plan, which is administered
by the Board of Directors, currently covers an aggregate of 518,685 shares.
The maximum term of a stock option granted under the Stock Option Plan is ten
years, but if the optionee at the time of grant has voting power over more than
10% of the Company's Stock, the maximum term is five years.  If an option
granted expires or terminates, the shares subject to the unexercised portion of
that option will become available for the grant of future options under the
Stock Option Plan.  If an optionee terminates his or her service to the
Company, the optionee may exercise only those option shares vested as of the
date of termination and must effect such exercise within three months, although
the Board of Directors may set a longer period for exercise of stock options.
The Stock Option Plan may be amended at any time by the Board of Directors,

                                      16

<PAGE>

although certain amendments would require stockholder approval.  The Stock
Option Plan will terminate in 2003 unless earlier terminated by the Board.

    The exercise price of Incentive Stock Options granted under the Stock
Option Plan must be at least equal to the fair market value of the stock
subject to the option on the date of grant, except that the exercise price of
an Incentive Stock Option granted to an optionee who owns stock possessing more
than 10% of the voting power of the Company's outstanding capital stock must
equal at least 110% of the fair market value of the stock subject to the option
on the date of grant.  The exercise price of Nonstatutory Stock Options granted
under the Stock Option Plan must be at least equal to 85% of the fair market
value of the stock subject to the option on the date of the grant.  Payment of
the exercise price may be made in cash, promissory notes or other consideration
as determined by the Board of Directors.

    As of February 25, 2000, options to purchase an aggregate of 331,185
(307,685 are vested) shares of Common Stock, at prices ranging from $0.089 to
$5.00 per share, under the Stock Option Plan were outstanding and held by a
total of 4 officers, directors, employees and consultants, including options to
purchase 247,500, 97,500, 15,000, and 15,000 shares granted to Ms. Kolke, Mr.
Stewart, Mr. Ryan and Mr. Fox, respectively.  No options were granted by the
Company during the year ended December 31, 1999.

<TABLE>
Option Values as of December 31, 1999
<CAPTION>

                           Number of Unexercised         Value of Unexercised
                                Options at             In-the-Money Options at
                            Fiscal Year-End 1999      Fiscal Year-End 1999 (1)
Name                    Exercisable / Unexercisable Exercisable / Unexercisable
<S>                       <C>            <C>            <C>            <C>
Cynthia Kolke             247,500   /    0              $0      /      $0
</TABLE>

(1)    Assumes that a share of Common Stock was valued at $.1562 per share on
       December 31, 1999, which is less than the option exercise price.

Limitation of Directors' and Officers' Liability and Indemnification

    The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law.  Delaware law
provides that directors of a Delaware corporation will not be personally liable
for monetary damages for breach of the fiduciary duties as directors except for
liability as a result of their duty of loyalty to the company for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, unlawful payments of dividends or stock transactions,
unauthorized distributions of assets, loan of corporate assets to an officer or
director, unauthorized purchase of shares, commencing business before obtaining
minimum capital, or any transaction from which a director derived an improper
benefit.  Such limitations do not affect the availability of equitable remedies
such as injunctive relief or rescission. In addition, the Company's Bylaws
provide that the Company must indemnify its officers and directors, and may
indemnify its employees and other agents, to the fullest extent permitted by
Delaware law.  At present, there is no pending litigation or proceeding
involving any director, officer, employee, or agent of the Company where
indemnification will be required or permitted.  Insofar as indemnification for
liabilities arising under the Securities Act of 1933, as amended, may be
permitted to officers, directors or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933, as amended, and is therefore
unenforceable.

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

    The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 25, 2000, by (i) each
director and executive officer of the Company, (ii) each person known to the
Company to be the beneficial owner of more than 5% of the outstanding Common
Stock, and (iii) all directors and executive officers of the Company as a
group.  Except as may be indicated in the footnotes to the table, each of such
persons has sole voting and investment power with respect to the shares owned,
subject to applicable community property laws.  The address of each individual
listed is in care of the Company, 15455 San Fernando Mission Boulevard, Suite
105, Mission Hills, California 91345.

                                      17

<PAGE>

<TABLE>
<CAPTION>

                                                Shares Beneficially Owned*

                                              Number                   Percent
<S>                                          <C>                        <C>
Acacia Research Corporation (1)
12 S. Raymond Ave., Ste. B
Pasadena, CA 91105                           789,709                    27.0%

R. Bruce Stewart (2)(3)                      960,709                    32.8%

Cynthia Kolke (3)                            262,500                     9.0%

Paul R. Ryan (2)(3)                          803,709                    27.5%

William D. Fox (3)                            12,000                      .004%

All directors and executive
officers as a group (4 persons) (2)(3)     1,225,209                    42.9%

</TABLE>

*    In calculating beneficial and percentage ownership, all shares of Common
     Stock which a named stockholder will have the right to acquire from
     February 25, 2000, upon exercise of stock options are deemed to be
     outstanding for the purpose of computing the ownership of such
     stockholder, but are not deemed to be outstanding for the purpose of
     computing the percentage of Common Stock owned by any other stockholder.
     As of February 25, 2000, an aggregate of 2,925,443 shares of Common Stock
     were outstanding.  Except as otherwise indicated in the footnotes to the
     table, this does not take into account currently exercisable stock options
     outstanding as of February 25, 2000 to purchase an aggregate of 428,685
     shares, nor the Warrants outstanding as of February 25, 2000 to purchase
     up to 517,500 additional shares of Common Stock.

(1)   Includes 267,250 shares held of record by Acacia as security for
      repayment of debts owed to Acacia by third parties.

(2)   Includes in the case of each of Messrs. Stewart and Ryan all shares held
      of record by Acacia, of which they are directors, and executive officers.

(3)   Includes shares issuable upon exercise of currently exercisable options,
      including 97,500 shares in the case of Mr. Stewart and 247,500 shares in
      the case of Ms. Kolke.  Eighty percent of the options to purchase 15,000
      shares granted to Mr. Fox became exercisable on February 9, 2000 and
      sixty percent of the options to purchase 15,000 shares granted to Mr.
      Ryan became exercisable on October 17, 1998 and are therefore included.

Item 12.  Certain Relationships and Related Transactions.

     For a description of the options to purchase shares of the Company's Common
Stock granted to the Company's executive officers and directors, see Item 10,
"Executive Compensation."

                                      18

<PAGE>

Item 13.  Exhibits and Reports on Form 8-K.

    (a)    Exhibits.  The following exhibits are either filed herewith or
           incorporated herein by reference:
<TABLE>
<CAPTION>
            <S>   <C>
            3.1   Certificate of Incorporation*
            3.2   Bylaws*
            3.3   Reincorporation Agreement*
            4.1   Form of Warrant*
            4.2   Agreement Not to Sell*
            10.1  Lease of Company's Executive Offices*
            10.2  Stock Option Plan*
            10.4  Fulfillment Services Agreement with Professional Marketing
                  Associates, Inc.*
            10.5  Consulting Agreement*
            27    Financial Data Schedule*

</TABLE>
*    Incorporated by reference from the Company's Registration Statement on
     Form S-1 (33-97156) which became effective under the Securities Act of
     1933, as amended, on February 9, 1996.

(b)   Reports on Form 8-K
<TABLE>
    (c)    Index to Financial Statements.
<CAPTION>

                                                                Page
<S>                                                             <C>
Independent Auditors' Report                                    F-1

Balance Sheets as of December 31, 1999                          F-2

Statements of Operations for the years ended
   December 31, 1998 and 1999                                   F-3

Statements of Shareholders' Equity for the years ended
   December 31, 1998 and 1999                                   F-4

Statements of Cash Flows for the years ended
   December 31, 1998 and 1999                                   F-5

Notes to Financial Statements                                   F-6 - F-12

</TABLE>

                                      19

<PAGE>

                                     SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                   Whitewing Labs, Inc.



                              By:    /s/  Cynthia Kolke
                                   Cynthia Kolke
                                   President, Assistant Secretary and Director

                                   Dated:  March 28, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



  /s/  R. Bruce Stewart     Chairman of the Board               March 28, 2000
R. Bruce Stewart            of Directors, Secretary
                            and Treasurer



  /s/  Cynthia Kolke        Director, Assistant                 March 28, 2000
Cynthia Kolke               Secretary



  /s/  Paul R. Ryan         Director                            March 28, 2000
Paul R. Ryan



  /s/  William D. Fox       Director                            March 28, 2000
William D. Fox

                                      20

<PAGE>

                           INDEPENDENT AUDITOR'S REPORT




To the Shareholders of Whitewing Labs, Inc.

We have audited the accompanying balance sheet of Whitewing Labs, Inc. as of
December 31, 1999 and the related statements of operations, shareholders'
equity and cash flows for the years ended December 31, 1998 and 1999.  These
financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Whitewing Labs, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
years ended December 31, 1998 and 1999 in conformity with generally accepted
accounting principles.


                                      /s/  Moss Adams LLP
                                      MOSS ADAMS LLP



Los Angeles, California
February 8, 2000




















                                         F-1
<TABLE>



                             WHITEWING LABS, INC.

                               BALANCE SHEETS

                              DECEMBER 31, 1999


<CAPTION>
                                  ASSETS

<S>                                                          <C>
CURRENT ASSETS:
   Cash and cash equivalents                                 $    79,220
   Short-term investments                                        834,065
   Inventories                                                    88,012
   Prepaid expenses
      Advertising                                                 30,433
      Other                                                       55,405
   Other receivables                                              22,135
   Deferred income taxes                                          25,000
                                                             ___________
      Total current assets                                     1,134,270
                                                             ___________

EQUIPMENT:
   Furniture and fixtures                                        161,379
   Accumulated depreciation                                     (124,288)
                                                             ___________
                                                                  37,091
                                                             ___________

OTHER ASSETS
   Trademarks                                                     44,213
   Other                                                           7,702
                                                             ___________
                                                                  51,915
                                                             ___________

                                                              $1,223,276
                                                             ===========

</TABLE>




The accompanying notes are an integral part of these financial statements




                                        F-2a

<TABLE>

                               WHITEWING LABS, INC.

                                 BALANCE SHEETS

                                DECEMBER 31, 1999

<CAPTION>
                      LIABILITIES AND SHAREHOLDERS' EQUITY


<S>                                                             <C>

   Accounts payable                                             $     15,671
   Accrued liabilities                                                 5,000
                                                                 ___________
      Total current liabilities                                       20,671
                                                                 ___________


SHAREHOLDERS' EQUITY:
   Preferred stock, $.001 par value:
      10% cumulative, 500,000 shares authorized;
      no shares issued and outstanding                                    -
   Common stock, $.001 par value:
      10,000,000 shares authorized; 2,925,443 shares
      issued and outstanding                                          2,925
   Paid-in capital                                                6,248,752
   Accumulated deficit                                           (5,049,072)
                                                                 __________

   Shareholders' equity                                           1,202,605
                                                                 __________

                                                                 $1,223,276
                                                                 ==========

</TABLE>





The accompanying notes are an integral part of these financial statements




                                        F-2b
<TABLE>
                                 WHITEWING LABS, INC.

                                STATEMENT OF OPERATIONS

                       YEARS ENDED DECEMBER 31, 1998 AND 1999
<CAPTION>

                                                  1998                1999
<S>                                          <C>                 <C>
NET SALES                                    $ 3,934,847         $1,665,129
COST OF GOODS SOLD                               644,823            285,915
                                              __________         __________
   Gross profit                                3,290,024          1,379,214
                                              __________         __________

OPERATING EXPENSES:
   Advertising                                 1,610,516            627,671
   Selling                                     1,359,258            915,370
   General and administrative                    681,014            598,314
                                              __________         __________
                                               3,650,788          2,141,355
                                              __________         __________
   Loss from operations                         (360,764)          (762,141)

OTHER INCOME, net                                 87,675             73,245
                                              __________         __________
   Loss before income taxes                     (273,089)          (688,896)

PROVISION FOR INCOME TAX                            (850)           (25,350)
                                              __________         __________
NET LOSS                                    $   (273,939)        $ (714,246)
                                              ==========         ==========

BASIC AND DILUTED LOSS PER COMMON SHARE     $      (0.09)        $    (0.24)
                                              ==========         ==========
WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                   2,896,372          2,925,440
                                              ==========         ==========
</TABLE>


The accompanying notes are an integral part of these financial statements

                                      F-3

<TABLE>
                             WHITEWING LABS, INC.

                      STATEMENTS OF SHAREHOLDERS' EQUITY

                    YEARS ENDED DECEMBER 31, 1998 AND 1999
<CAPTION>
                                   Common Stock              Treasury Stock
                                Shares       Amount       Shares       Amount
<S>                             <C>       <C>             <C>       <C>

BALANCE, December 31, 1997      2,906,388 $    2,906      (41,450)  $(76,906)

  Retirement of treasury stock    (41,450)       (41)      41,450     76,906
  Exercise of stock options        60,500         60            -          -
  Net loss                              -          -            -          -
                                _________  _________      _______   ________


BALANCE, December 31, 1998      2,925,438      2,925            -          -

  Exercise of stock options             5          -            -          -
  Net loss                              -          -            -          -
                                _________  _________      _______   ________


BALANCE, December 31, 1999      2,925,443  $   2,925            -   $      -

                               =========  ==========      =======   ========
</TABLE>




The accompanying notes are an integral part of these financial statements
                                      F-4a
<TABLE>
                             WHITEWING LABS, INC.

                      STATEMENTS OF SHAREHOLDERS' EQUITY

                    YEARS ENDED DECEMBER 31, 1998 AND 1999
<CAPTION>
                                  Paid-In        Accumulated
                                  Capital           Deficit           Total
<S>                              <C>             <C>               <C>

BALANCE, December 31, 1997       $6,320,292       (4,060,887)      $2,185,405

  Retirement of treasury stock      (76,865)               -                -
  Exercise of stock options           5,319                -            5,379
  Net loss                         (273,939)        (273,939)               -
                                 __________      ___________       __________

BALANCE, December 31, 1998        6,248,746       (4,334,826)       1,916,845

  Exercise of stock options               6                -                6
  Net loss                                -         (714,246)        (714,246)
                                 __________      ___________       __________

BALANCE, December 31, 1999       $6,248,752     $ (5,049,072)      $1,202,605

                                 ==========      ===========      ==========
</TABLE>




The accompanying notes are an integral part of these financial statements
                                      F-4b

<TABLE>

                              WHITEWING LABS, INC.

                            STATEMENTS OF CASH FLOWS

                    YEARS ENDED DECEMBER 31, 1998 AND 1999
<CAPTION>

                                                        1998         1999
<S>                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                         $(273,939)    $(714,246)
   Adjustments to reconcile net loss
   to net cash used in operating activities:
      Depreciation and amortization                    28,938        31,910
      Changes in assets and liabilities:
         Inventories                                   44,803        (8,331)
         Prepaid advertising                           29,438       214,684
         Other prepaid expenses                       (40,102)       14,776
         Other receivables                             44,152        (4,137)
         Deposits                                        (232)         (666)
         Accounts payable                              12,256       (14,314)
         Accrued liabilities                           (6,741)         (519)
         Deferred income taxes                              -        25,000
                                                    __________    _________
      Net cash used in operating activities          (161,427)     (455,843)
                                                    __________    _________
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of furniture and fixtures                 (14,961)      (10,461)
   Development of trademarks                          (40,224)       (2,963)
   Redemption (purchase) of short-term
      investments, net                                (67,785)      454,960
                                                    __________    _________
      Net cash provided by (used in)
         investing activities                        (122,970)      441,536
                                                    __________    _________
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from issuance of common stock
      upon exercise of options                          5,379             6
                                                    __________    _________

      Net cash provided by financing activities         5,379             6
                                                    __________    _________
NET DECREASE IN CASH
AND CASH EQUIVALENTS                                 (279,018)      (14,301)
                                                    __________    _________
CASH AND CASH EQUIVALENTS,
   Beginning of year                                  372,539        93,521
                                                    __________    _________
CASH AND CASH EQUIVALENTS,
   End of year                                     $   93,521    $   79,220
                                                    ==========    =========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
   Cash paid for income taxes                      $      850    $      350
   Cash paid for interest                                   -             -
                                                    ==========    =========

</TABLE>


The accompanying notes are an integral part of these financial statements

                                      F-5
<PAGE>

                                 WHITEWING LABS, INC.

                            NOTES TO FINANCIAL STATEMENTS

                                 DECEMBER 31, 1999


1.    Summary of Operations and Organization and Business

Whitewing Labs, Inc. (the "Company") develops, seeks to acquire through
license, markets and sells nutritional supplements for sale to the over age
forty market primarily in the United States.  Utilizing formulas that include
only natural ingredients, the Company's products offer alternatives to
conventional treatments for symptoms associated with the aging process.

2.    Summary of Significant Accounting Policies

     a.  Estimates Used by Management

     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 date of the
     financial statements and the reported amounts of revenues and expenses
     during the reported period.  Actual results could differ from those
     estimates.

     b.  Concentration of Risk

     The Company deposits its cash with a major financial institution.
     Deposits may, at times, exceed amounts insured by the FDIC.

     Production, order taking and order fulfillment are outsourced to four
     independent contractors, which potentially subject the Company to a
     concentration of supplier risk.  In addition, substantially all printing
     is handled by an outside company and substantially all advertising
     placement, including airing time for electronic in-home delivery of
     product advertising, is handled by outside service agencies.  Although
     these services are currently concentrated with a few key suppliers,
     management believes that other suppliers could provide similar services
     and comparable terms.  A change in suppliers, however, could cause delay
     in manufacturing, shipping, advertising placements and a possible loss of
     sales which could affect operating results adversely.

     c.  Cash and Cash Equivalents, and Short-Term Investments

     The Company considers cash equivalents to be short-term, highly liquid
     investments that are both readily convertible to known amounts of cash,
     and are so near their maturity that they present insignificant risk of
     changes in value because of changes in interest rates.  Cash equivalents
     include only those investments with original maturities of three months or
     less.

     Short-term investments consist of certificates of deposit with original
     maturities of greater than three months but less than one year and which
     are readily convertible to cash.  Short-term investments are valued at
     cost, which approximates market value as of December 31, 1999.

     d.  Inventories

     Inventories consist of finished goods and shipping supplies.  Inventories
     are valued at the lower of cost (determined by the first-in, first-out
     method) or market value.

                                      F-6

<PAGE>

     e.  Prepaid Advertising

     Electronic and printed materials comprise the main components of the
     Company's direct-response marketing efforts.  Payments to vendors in
     advance of the run date are included in prepaid advertising.  Respondents
     are logged into a customer database which indicates the source of each
     customer's response to the specific advertisement.  Prepaid and deferred
     print advertising placements and mailings are amortized over the lesser of
     one year or the number of months in which the related direct responses are
     expected to be received.  The Company evaluates the realizability of its
     direct-response advertising by comparing the carrying amount of prepaid
     and deferred advertising at each balance sheet date on a cost-pool-by-cost
     -pool basis to the probable remaining future net revenues expected to
     result from such advertising.  Any excess carrying amount over probable
     remaining future revenues is reported as advertising expense in the
     current period.  Newspaper and weekly publications are expensed in the
     month of issue.  Magazines which are available prior to the middle of the
     month preceding the issue date are amortized over a three month period.
     Magazines which are available subsequent to the middle of the month
     preceding the issue date are amortized over a four month period.  Costs to
     develop, edit, and reproduce infomercials and commercials for airing at
     local television stations nationwide are amortized over a period of twelve
     months or the estimated revenue earning stream, whichever is less.
     Prepaid advertising at December 31, 1999 includes approximately $17,253 of
     costs related to the development of infomercial advertising.  Advertising
     expense was $1,610,516 and $627,671 for the years ended December 31, 1998
     and 1999, respectively.

     f.  Furniture and Fixtures

     Furniture and fixtures are recorded at cost.  Major additions and
     improvements are capitalized.  Depreciation is computed using the straight
     -line method over the estimated useful lives which range from 3 to 7 years.
     When assets are sold or otherwise disposed of, the cost and related
     accumulated depreciation are removed from the accounts and any resulting
     gain or loss is included in earnings.

     g.  Organization Costs and Trademarks

     Organization costs are capitalized and amortized using the straight-line
     method over a five-year period.  Costs incurred to develop proprietary
     trademarks are capitalized and amortized using the straight-line method
     over a ten-year period.

     h.  Income Taxes

     The Company accounts for income taxes using the asset and liability
     method.  Income taxes are further explained in Note 5.

     i.  Revenue Recognition

     Revenue is recorded at the time of shipment.

     j.  Earnings Per Share

     Basic earnings per share are calculated based on weighted average shares
     outstanding for the period without giving effect to outstanding common
     stock equivalents while diluted earnings per share considers the effect of
     common stock equivalents on weighted average shares outstanding.  The
     common stock equivalents had no dilutive effect in 1998 or 1999.

     k.  Recently Issued Accounting Pronouncements

     In 1998, the Financial Accounting Standards Board (FASB) issued Statement
     of Financial Accounting Standard (SFAS) No. 132, "Employer's Disclosure
     About Pensions and Other Post-Retirement Benefits", SFAS No. 133,
     "Accounting for Hedging Activities", and SFAS No. 134, "Accounting for
     Mortgage-Backed Securities.  These pronouncements have been adopted
     however, none have a material effect on the Company's financial

                                      F-7

<PAGE>

     statements.  SFAS No. 135, "Rescission of SFAS No. 75 and Technical
     Corrections", SFAS No. 136, "Transfers of Assets to a Not-for-Profit
     Organization or Charitable Trust that Raises or Holds Contributions for
     Others", and SFAS No. 137, "Accounting for Derivative Instruments and
     Hedging Activities-Deferral of the Effective Date of SFAS No. 133-an
     amendment of SFAS No.133" have recently been issued but are not expected
     to apply to the Company.

     l.  Stock-Based Compensation

     As permitted by SFAS 123, "Accounting for Stock-Based Compensation", the
     Company continues to apply APB Opinion No. 25 (APB 25) and related
     interpretations in accounting for its stock option plans.  Under SFAS 123,
     a fair value method is used to determine compensation cost for stock
     options or similar equity instruments.  Compensation is measured at the
     grant date and is recognized over the service or vesting period.  Under
     APB 25, compensation cost is the excess, if any, of the quoted market
     price of the stock at the measurement date over the amount that must be
     paid to acquire the stock.  The new standard allows the Company to
     continue to account for stock-based compensation under APB 25, with
     disclosure of the effects of the new standard.  The pro forma effect on
     income, as if the Company had adopted SFAS 123, is disclosed in Note 6.

3.  Restricted Cash

By agreement with its credit card service organization, the Company is required
to maintain a reserve cash account with a balance equal to an agreed upon
percentage of the prior six months' gross sales volume for credit card
transactions subject to chargeback and return ratios.  As of December 31, 1999,
$20,000 of cash reserved for this purpose is included in cash and cash
equivalents in the accompanying balance sheet.

4.  Commitments and Contingencies

     a.  Lease

<TABLE>

     The Company leases its office space under an operating lease agreement,
     expiring September 2001.  Future minimum lease payments at December 31,
     1999 are:

<CAPTION>

                       <S>                   <C>
                       2000                  40,992
                       2001                  30,774
                                           ________
                                           $ 71,736
                                           ========
</TABLE>

     Rent expense in 1998 and 1999 was approximately $43,750 and $48,923,
     respectively.

     b.  Service

     The Company has a fulfillment services agreement with Professional
     Marketing Associates, Inc. (PMA) effective through March 22, 1999,
     subject to automatic six month extensions, currently extended through
     March 22, 2000.  Under the agreement, PMA acts as the Company's
     independent contractor for the purposes of order processing, warehousing
     and distribution of the Company's merchandise.

     c.  Regulation

     The U.S. Food and Drug Administration (FDA) is the primary agency that
     regulates the healthcare industry.

     The Company's products consist of natural ingredients which are considered
     nutritional supplements and are classified as foods, thus they do not
     require FDA approval.  The Company's product labeling and advertising
     copy, however, must be within the FDA's established guidelines.

                                      F-8

<PAGE>

     The FDA food labeling regulations went into effect during March 1999.  All
     food products, including nutritional supplements had to conform to the new
     formats.  The Company is in compliance with the new label law.  All
     existing and new products utilize the new label formats.

     The FDA's health claims regulations include no claim may be made on a
     dietary supplement label or in printed sales literature, "that expressly
     or by implication characterizes the relationship of any substance to a
     disease or health-related condition."  The Company cannot determine what
     effect currently proposed FDA regulations, when and if promulgated, will
     have on its business in the future.  Such regulations could, among other
     things, require expanded or different labeling, the recall or
     discontinuance of certain products, additional record keeping and expanded
     documentation of the properties of certain products and scientific
     substantiation.  In addition, the Company cannot predict whether new
     legislation regulating its activities will be enacted, which new
     legislation could have a material effect on the Company.

     The Company has an ongoing compliance program with assistance from
     experienced FDA counsel regarding the nature and scope of food and drug
     legal matters affecting the Company's business and products.  The Company
     is unaware of any legal actions pending or threatened by the FDA or any
     other governmental authority against the Company.

5.  Income Taxes

The asset and liability method requires the Company to provide income taxes for
the tax effect of temporary differences in recognizing certain income and
expenses for financial statement and income tax purposes.

The provision for income tax includes $850 and $350 minimum state franchise
taxes payable for the years ended 1998 and 1999, respectively.  The 1999 tax
provision also includes the effect of a $25,000 increase in the valuation
allowance applied to deferred tax assets.

At December 31, 1999, the Company had net operating loss "NOL" carryforwards of
approximately $4,913,000 for Federal income tax purposes available to reduce
future Federal taxable income through 2014.  Approximately $2,300,000 and
$589,000 are available to reduce future state taxable income in California and
Arizona, respectively.  State NOL carryforwards also expire through 2014.  The
Company had approximately $1,000,000 of NOL carryovers ("pre-change NOLs") for
federal tax return purposes at December 31, 1995.  As a result of an ownership
change in 1995, the Company's ability to utilize pre-change NOL carryovers is
limited to approximately $400,000 per year for Federal tax purposes.

A reconciliation of statutory tax rates to the reported effective income tax
rates for 1998 and 1999 are:
<TABLE>
<CAPTION>

                                               1998           1999
                                               -------       --------
<S>                                            <C>            <C>

Statutory rate
   Federal                                     (34.0)%        (34.0)%
   State, net of Federal benefit                (5.8)          (5.8)

Change in tax asset valuation allowance         38.5           42.7

Other                                            1.0            0.8
                                               _____          _____
                                                 0.3%           3.7%
                                               =====          =====
</TABLE>

                                      F-9

<PAGE>

Temporary differences and carryforwards as of December 31, 1999 which give rise
to the net deferred tax asset are as follows:
<TABLE>
<CAPTION>

<S>                                                            <C>
   Deferred tax assets:
      Federal net operating loss carryforwards                 $1,670,000
      State net operating loss carryforwards-California           126,000
      State net operating loss carryforwards-Arizona               31,000

      Less - Valuation allowance                               (1,791,000)
                                                                _________
          Total deferred tax assets                                36,000
                                                                _________

   Deferred tax liabilities:
      Prepaid advertising                                          (5,000)
      Accumulated depreciation and amortization                    (6,000)
                                                                _________
   Total deferred tax liabilities                                 (11,000)
                                                                _________
   Net deferred tax asset                                     $    25,000
                                                              ===========
</TABLE>


6.  Stock Option Plan

     a.  Qualified Stock Options

     The Company maintains a qualified stock option plan (the Plan) for
     officers and key employees.  Under the terms of the Plan, incentive stock
     options may be granted with the exercise price established at the
     prevailing market price of the stock at the date of grant.  A number of
     shares not to exceed 20% of the outstanding common shares of the Company
     were reserved for issuance under the terms of the Plan.  The options
     generally vest and become exercisable at the date of the grant and expire
     five years from the date of grant, subject to employee termination.  Upon
     termination of employment, individuals have three months from their
     termination date to exercise their options, at which time any unexercised
     options expire.

     b.  Nonqualified Stock Options

     Under the terms of a nonqualified stock option plan, options are granted
     at the prevailing market price of the stock and generally vest and become
     exercisable at the date of the grant.  Options expire ten years from the
     date of grant, subject to the continuation of each person's employment or
     consulting relationship with the Company.  Upon termination of relations
     with the Company, option holders have three months from their termination
     date to exercise their options.

     c.  Options Granted

     The following is a summary of qualified and nonqualified options for the
     years ended  December 31, 1998 and 1999:

<TABLE>
<CAPTION>
                                                             Number of Options
Qualified Options:                            Exercise       Granted     Vested
<S>                                         <C>             <C>        <C>

Balance, December 31, 1997                  $ 0.089         143,000    143,000
                                                                       =======
   Granted                                    -                   -
   Exercised                                  0.089         (45,500)
   Expired                                    -                   -
                                            _______         _______

                                      F-10

<PAGE>

Balance, December 31, 1998                   $ 0.089         97,500     97,500
                                                                       =======
   Granted                                     -                  -
   Exercised                                   -                  -
   Expired                                     -                  -
                                            _______         _______

Balance, December 31, 1999                   $ 0.089         97,500     97,500
                                             =======        ========   =======

Nonqualified Options:

Balance, December 31, 1997                   $0.089 - 5.00  361,185    287,690
                                                                       =======
   Granted                                   $1.00 - 1.25    30,000
   Exercised                                 $0.089         (15,000)
   Expired                                    -                   -
                                            ______________  _______

Balance, December 31, 1998                   $0.089 - 5.00  376,185    317,190
                                                                       =======
   Granted                                    -                   -
   Exercised                                 $1.25               (5)
   Expired                                   $1.00 - 1.25   (44,995)
                                            ______________  _______

Balance, December 31, 1999                   $0.089 - 5.00  331,185    307,685
                                             =============  =======    =======
</TABLE>


The Company accounts for the Plan with regard to the Company's employees,
officers and directors under Accounting Principles Board Opinion No. 25 and
related Interpretations.  Accordingly, no compensation cost has been recognized
for these individuals under the Plan.  Had compensation cost for these
individuals been determined based on the fair value at the grant dates
consistent with the method under SFAS No. 123, the Company's net loss and
earnings per share would have been reduced to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>
                                                        1998           1999
                                                    ------------    ----------
<S>                                                 <C>             <C>
Net loss                              As Reported   $  (273,939)    $ (714,246)
                                      Pro Forma     $  (290,000)    $ (714,246)

Basic and diluted earnings per share: As Reported   $     (0.09)    $    (0.24)
                                      Pro Forma     $     (0.10)    $    (0.24)

</TABLE>

The fair value of each option grant is estimated on the date of grant using an
option pricing model with the following weighted-average assumptions used for
stock grants in 1998 and 1999:  risk-free interest rate of 5.2%, no expected
dividend yield; expected lives of 7 years; expected volatility of approximately
124%.

7.  Warrants and Stock Options

In conjunction with its initial public offering in February 1996, the Company
issued 1,035,000 common stock purchase warrants at $0.20 per share which had to
be purchased together on the basis of one share of common stock and one
warrant, but tradable separately thereafter.  The holder of two warrants is
entitled to purchase one share of the Company's Common stock at $3.00 per share
prior to February 9, 2002.  The warrants may be redeemed by the Company under
certain circumstances.  In connection with the Company's initial public
offering, the representatives of the underwriters acquired 90,000 warrants.  As
of December 31, 1999, no warrants have been exercised.

                                      F-11

<PAGE>

8.  Operating Segments

The Company's products comprise a single operating segment.  Sales are made to
a large number of customers throughout the United States.  Sales of two of the
Company's products comprised 77% of total sales in 1998 and 1999.
                                      F-12