U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

      (MARK ONE)

    |X|  Annual Report  Pursuant to Section 13 or 15(d) of  Securities  Exchange
         Act of 1934 (Fee Required)

                                For the fiscal year ended December 31, 1999

    | |  Transition report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 (No Fee Required)

               For the transition period from _______ to _______.

                           Commission File No. 0-21739

                              GENETIC VECTORS, INC.
                              ---------------------
                 (Name of Small Business Issuer in Its Charter)

<TABLE>
Florida                                                65-0324710
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<S>                                                    <C>
(State or Other Jurisdiction of                        (I.R.S. Employer Identification No.)
Incorporation or Organization)
5201 N.W. 77th Avenue, Suite 100, Miami, Florida       33166
------------------------------------------------       -----
(Address of Principal Executive Offices)               (Zip Code)
</TABLE>

                                 (305) 716-0000
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

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

Title of Each Class                    Name of Exchange on which registered
-------------------                    -------------------------------
None                                   None

        Securities registered under Section 12(g) of the Securities Act:
                         Common Stock, Par Value $.001
                         -----------------------------
                                (Title of Class)

      Check  whether the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act during the past 12 months,  and (2) has
been subject to such filing requirements for the past 90 days. Yes | | No |X|

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B not contained in this form,  and no  disclosure  will be
contained, to the best of the registrant's knowledge, in the definitive proxy or
information statement  incorporated by reference in Part III of this Form 10-KSB
or amendment to Form 10-KSB.

      The issuer  generated  revenues of $44,832  during its most recent  fiscal
year.

      The  aggregate  market  value  of  the  Company's  voting  stock  held  by
non-affiliates  as of June 5, 2000 was  approximately  $24,256,649  based on the
average closing bid and asked prices of such stock on that date as quoted on the
pink sheets.  There were 3,722,843 shares of Common Stock outstanding as of June
5, 2000.

      Documents Incorporated by Reference: See Item 13

      This Form 10-KSB  consists of 364 pages.  The Exhibit Index begins on page
68.


<PAGE>


                                     PART I


Item 1.  Description of Business
--------------------------------

Forward-Looking Statements and Associated Risks

      Information  included  or  incorporated  by  reference  in this filing may
contain  forward-looking  statements  within the  meaning of Section  27A of the
Securities  Act of 1933  and  Section  21E of the  Exchange  Act of  1934.  This
information may involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements to be materially
different  from the future  results,  performance or  achievements  expressed or
implied by any forward-looking  statements.  Forward-looking  statements,  which
involve assumptions and describe our future plans,  strategies and expectations,
are  generally  identifiable  by use  of  the  words  "may,"  "will,"  "should,"
"expect,"  "anticipate,"  "estimate,"  "believe,"  "intend" or  "project" or the
negative  of these  words  or other  variations  on  these  words or  comparable
terminology.

      These  forward-looking   statements  address,   among  other  things,  the
integration  of  our  January  2000  acquisition  of  DNA  Sciences,  Inc.,  the
commercial  viability  of our  products,  our  experience  in the  biotechnology
industry,  our plan of operations,  the potential market and customer demand for
our  products.  These  statements  may be  found  under  "Management's  Plan  of
Operation and  Discussion  and  Analysis," as well as in this filing  generally.
Actual  events  or  results  may  differ  materially  from  those  discussed  in
forward-looking  statements as a result of various factors,  including,  without
limitation,  the risks  outlined  under  "Certain  Business  Risks" and  matters
described in this filing generally.

Introduction

      As of December  31,  1999,  our company had cash and cash  equivalents  of
$206,802  compared to $109,924 on December 31, 1998. We have limited  cash.  The
increase in cash is attributable to borrowings and private equity offerings.  We
have had cash  shortages  since 1998 and will  continue  to have cash  shortages
unless we can raise significant  additional  capital. To date, we have generated
only a nominal  amount of revenue  from our  operations.  We  estimate  that our
current cash reserves will last no longer than December 1, 2000.  Therefore,  to
continue  operations  beyond such date,  we must raise  additional  capital from
external sources.  Such external capital will be necessary for our operations to
reach a level  where we may  internally  generate  the cash  flow  necessary  to
sustain operations.  We have entered into a non-binding letter of intent with an
underwriter  to sell up to  $8.4  million  of  securities  in a  firm-commitment
registered  offering,  although no assurances can be given that such an offering
will take place or be successful.  Our inability to raise significant capital in
such a registered  offering or otherwise will jeopardize our ability to continue
operations beyond December 1, 2000.

Interim Financing

      Between  November  1,  1998  and  June 5,  2000,  we  borrowed  a total of
$2.3 million from various private investors, consisting of:

      o   Unsecured loans of $150,000, with interest payable quarterly beginning
          on April 1, 1999 and the principal payable on November 2, 1999. We are
          in default of these loans for failing to pay  principal  and  interest
          when due.

      o   Secured loan of $100,000, with interest payable quarterly beginning on
          June 1, 1999 and the  principal  payable on April 18, 2000.  We are in
          default of this loan for failing to pay  principal  and interest  when
          due.

      o   Secured  loans of  $1,238,500  in which the payment dates of principal
          and interest were extended on March 3, 2000 by the lenders to June 30,
          2000.

      o   Loans of $175,000  convertible  into shares of common stock at a price
          of $5.00 per share and which are due in September 2000.

      o   Loans of $600,000  convertible  into shares of common stock at a price
          of $3.00 per share and which are due in November 2000.


                                       2
<PAGE>


      We will not be able to repay these loans  unless we raise  enough  capital
from external sources.  Our business  operations do not generate sufficient cash
flow to repay these loans. Our inability to repay these loans may result,  among
other  things,  in the  foreclosure  of our assets.  This would  jeopardize  our
ability to continue operations.

      For  additional  information  concerning the company's  current  financial
situation,  see "Certain  Business Risks - We are in default of our  outstanding
indebtedness and may be unable to repay these loans";  "Certain Business Risks -
Our limited  operating  history makes it difficult or impossible to evaluate our
performance and make predictions about our future"; "Certain Business Risks - We
have  experienced  losses and expect to incur  losses in the  future";  "Certain
Business  Risks - We may be unable to  continue  operations  if we are unable to
obtain additional capital" and "Management's  Discussion and Analysis or Plan of
Operation."

Our Company

      Our company is a biotechnology  company. We specialize in the discovery of
genetic  patterns from which we intend to develop  systems to determine  disease
risk,  drug  resistance,  and  therapeutic  response.  Our  acquisition  of  DNA
Sciences,  Inc. on January 17, 2000 provided  complimentary  technology that has
enabled us to enter the field of  pharmacogenomics.  Prior to our acquisition of
DNA Sciences,  we developed and are currently  marketing the EpiDNA product line
as a  quality  control  tool  for  the  multi-billion  dollar  biopharmaceutical
industry.  Pharmacogenomics  (genomic  discovery  for  healthcare  applications)
utilizes genetic information to identify the subtle changes in genetic structure
that  influence  disease  susceptibility,   drug  resistance,   and  therapeutic
response. Our combined technology is useful for genetic screening of individuals
and pathogenic  organisms and monitoring the purity of  biopharmaceuticals.  Our
EasyID genetic screening products are designed to study disease risk assessment,
drug  resistance,  and drug  responsiveness.  Our initial  areas of  development
include  the  genetic  basis  of   cardiovascular   disease,   pathogenic  yeast
infections,  and  autoimmune  diseases.  We intend to market our  systems to the
clinical, pharmaceutical and industrial market sectors.

      On  September  29, 1999,  we filed our first  genomic  patent  application
covering the  identification of pathogenic  organisms  responsible for deaths of
many  immunocompromised  patients,  including HIV and chemotherapy  patients and
transplant  recipients.  In addition,  we are attempting to develop a new set of
technologies   and   products   designed   to  screen  for  genes   involved  in
cardiovascular disease.

      We are a developmental stage company with limited operations,  capital and
revenue.  Our company was formed on December 28, 1991,  with our first  product,
EpiDNA  Picogram  Assay,  introduced in 1997. We have had losses from operations
since  inception.  Our  shareholders'  deficit  as  of  December  31,  1999  was
$8,920,356.

The Industry

      Rapid  advances  in  genomics  have  intensified  the  commercial  race to
identify new gene targets for new therapeutics and diagnostics. The Human Genome
Project is nearing  completion with over 80,000 genes  identified.  The assembly
phase,  which  entails  putting the gene  sequences in order on the genome,  has
begun  and may be  complete  as early as June  2000.  However,  the  ability  of
genomics to discover  new targets is tempered by the  realization  that  genetic
diseases  may involve  defects in several  genes,  as well as the  influence  of
currently unknown environmental factors.

      To date, the genomics race has been focused on identifying  and sequencing
genes across the human genome.  The  completion of the Human Genome Project will
provide a "road map" of gene locations on the genome. Now companies are focusing
on the next step,  identifying  which  changes or mutations in the gene sequence
determine disease susceptibility or drug efficacy.


                                       3
<PAGE>


Our Strategy

      We intend to expand our presence in the field of pharmacogenomics  through
our strategy of "Practical Geonomics." We intend to form new collaborations with
strategic  partners and expand  existing  relationships  with current  partners,
which we anticipate will focus on the discovery of new genes involved in disease
management and prediction.  We also intend to expand our business  opportunities
through the enhancement of our product lines and intellectual  property that may
result  from  existing  strategic  partnerships.  We also  intend to expand  our
production  capacity to meet the projected  supply  requirements of our targeted
market and to continue the sale and marketing of our products.

      Additionally,  we believe that there are  favorable  business  acquisition
opportunities that would enable us to expand our business more rapidly. To date,
we  have  completed  the  acquisition  of  DNA  Sciences,   Inc.,  a  California
corporation.  We believe  that the  successful  consummation  of  several  other
acquisition  opportunities  would enable us to enhance our product lines, obtain
new technologies, and increase revenue.

Our Products

      EasyID Product Line.

      The subtle differences in DNA structure are the basis for numerous genetic
diseases,  including  diabetes,  cancer and heart  disease.  Our efforts in gene
discovery  have  resulted in the  development  of a product line,  EasyID,  that
detects these subtle differences.

      The EasyID  product line  comprises a universal  format that uses standard
laboratory  equipment and techniques to achieve results quickly.  This universal
format enables us to adapt our systems for any genetic target of interest.

      To date, the EasyID line has focused on three areas of development:

      1.   juvenile diabetes predisposition assessment;

      2.   yeast detection and genotyping; and

      3.   genes involved in cardiovascular disease.

      Juvenile  Diabetes.  Scientific  reports have linked the onset of juvenile
diabetes  (IDDM1) to a particular DNA  fingerprint  within a region of the human
genome.  We have developed a system for the rapid  detection of the highest risk
genotype.  The  Norwegian  Institute of Public  Health is  currently  using this
system  to  test  for  genetic   predisposition   to  juvenile   diabetes  in  a
population-based study.

      Cardiovascular  Diseases.  Cardiovascular  disease  is among  the  leading
causes of death in the United  States.  Scientific  publications  have  recently
reported links between naturally  occurring genetic  variations and the onset of


                                       4
<PAGE>


cardiovascular  disease.  Publications  have also  described  the  influence  of
genetic differences in response to common therapeutics. One of the most dramatic
examples of this is a polymorphic  variation in the CETP gene,  which influences
response  to the  statins,  a class of widely  prescribed  cholesterol  lowering
medication.

      Through our  collaborations,  we are  developing  systems to discover  and
identify genetic differences that result in differential  therapeutic  response.
Our first product in development is a system designed to map the CETP gene.

      Our future  development  will focus on other genes related to  cholesterol
levels and heart disease. We plan to collect genetic information from over 3,000
heart patients  enrolled in a collaborative  study. We will use this information
to  develop  new  systems  designed  to  predict  clinical   outcomes,   disease
progression,  and  therapeutic  response.  We intend to file  patents on genetic
patterns we discover that are useful as disease markers.

      Microbial Identification.  We are developing the EasyID technology for the
rapid  identification  of  microbes  of  commercial,  research,  and  diagnostic
interest.  The EasyID  technology  is based on a series of small DNA probes that
are  designed to  discriminate  subtle  genetic  differences.  The product  line
originates from  collaboration  with both the University of Miami and the United
States Department of Agriculture.  These collaborative  research agreements have
resulted in a patent  application  for the  genetic  sequences  of  Cryptococcus
neogormans,  pathogenic yeast responsible for deaths in AIDS infected  patients.
We intend to commercialize  these sequences using our oligoplate  technology and
market to healthcare institutions.

      Yeast  have  emerged  as major  pathogens  in the  growing  population  of
patients with weakened or suppressed immune systems.  These individuals  include
transplant recipients and patients with cancer,  leukemia or AIDS. The mortality
rates for systemic  yeast  infection  are high,  primarily a  reflection  of the
absence of adequate and timely diagnostic tests. Rapid, sensitive and dependable
tests for pathogenic  yeast are of critical  importance for the prompt treatment
of disease.  We have  developed a rapid  molecular  test that  identifies  yeast
species, strains or genotypes in a few hours.

      A commercial  anti-body-based test for yeast is available, but costs about
$15 per  test.  We  believe  that our  EasyID  DNA  probe  will  allow  accurate
identification  of yeast  species  and  strains,  at a lower cost than  existing
products and much more rapidly than conventional techniques.

      EpiDNA Product Line

      Detection of Nucleic Acids. The EpiDNA technology is a broadly  applicable
method  for  labeling  and  detecting  nucleic  acids,   particularly  DNA.  The
importance  of the ability to attach labels to nucleic acids arises from the use
of  nucleic  acids as probes to  identify,  locate  and  isolate  DNA  fragments
containing a single gene in a mixture of DNA fragments  containing  thousands of
different  genes.  DNA labeling  technology  is  analogous  to the  photographic
development  process.  The label makes the results of esoteric DNA hybridization
reactions  visible to the naked eye in the same sense that developing  solutions
render the latent  image in a  photograph  visible.  The visual  results of this
process are pictures of DNA hybrids or DNA fingerprints. Nucleic acid probes are
usually labeled with radioactivity so that the probe and the gene to which it is
bound can be located. The use of nonradioactive  labels on probes is becoming an
increasingly  attractive  alternative  because of the  dangers  associated  with
radioactivity  and the expense of disposing  of  radioactive  waste.  The recent
introduction of  chemiluminescent  detection methods for  nonradioactive  probes
provides  sensitivity  equaling that of radioactive probes without the risks and
expenses of  radioactivity.  The patented EpiDNA  technology can be used to make
these types of non-radioactive labeled nucleic acid probes.

      The EpiDNA labeling technology involves a versatile chemical procedure for
attaching  labels to nucleic  acids.  We believe this process is superior in its
ability to attach a variety of labels to nucleic  acids,  regardless of the size
of the nucleic acid. The process is normally  completed  within a few hours, and
can be  accomplished  in a single  test tube with no loss of  nucleic  acid.  We
believe that scaling the reaction up to production  levels  (milligram  and gram
amounts of nucleic acids) is possible.  The core EpiDNA technology is suited for
the  attachment  of any  detectable  molecule  (such as biotin,  fluorescent  or
phosphorescent compounds, enzymes or chelators) to nucleic acids.

      The EpiDNA technology is not restricted to the labeling of probes, but can
also  provide  a  method  to  accurately  measure  nucleic  acids  at  very  low
concentrations. This characteristic of our technology provides the basis for the
Picogram Assay which is targeted to process  development and monitoring,  and to
quality control and research laboratories.

      The Picogram Assay. Processes for manufacturing  biopharmaceuticals,  such
as monoclonal antibodies and recombinant proteins, result in potentially harmful
contamination  with DNA,  the  material  that carries the genetic code and could
carry  cancer-causing  oncogenes.  FDA guidelines  recommend that  manufacturers
monitor  the  content of DNA to assure that the level of DNA does not exceed 100
picograms  per  injected  dose.  Under FDA  guidelines,  each  biopharmaceutical
manufacturer  must devise its own in-house quality control protocol to determine
the purity of each  product.  Companies  are free to adapt  current  technology,
including  commercially  available  assays,  to this purpose.  This  requirement
creates  a niche in the  biotechnology  industry  market  into  which we plan to
market the Picogram Assay kit for the measurement of DNA in biopharmaceuticals.

      The Picogram  Assay  combines  chemical and  immunochemical  procedures to
measure trace amounts of DNA. The assay is relatively easy to perform,  measures
DNA in a range of one to one hundred  picograms,  can detect small  fragments of
DNA,  and is complete in about three hours.  Use of the Picogram  Assay does not
require the  purchase of major  equipment,  since the assay  utilizes a standard
microtiter plate reader, which is routine in  biopharmaceutical  quality control
laboratories.  The assay is designed for routine  application by technicians and
is intended for validation of final product purity.

      Nucleic Acid Probe Labeling and Detection  Kits. DNA technology is rapidly
expanding in the life  sciences in areas that can benefit from genetic  analysis
or the manipulation of genetic material.  Nucleic acid probes are routinely used
in many of these  applications to identify specific genes and separate them from
all other  genes.  We believe  that the EpiDNA  labeling  kits will  provide the
components for the preparation of DNA or ribonucleic acid ("RNA") probes for the
detection of specific  nucleic acids. We intend to develop kits  specialized for
the  attachment  of  compounds  as diverse as biotin,  digoxigenin,  enzymes and
fluorescent compounds and chelators using the labeling procedure.

      DNAMax Protein Removal Kits. A kit designed to remove high  concentrations
of protein from  biopharmaceuticals  was  developed by our company to be used to
separate  proteins  from trace DNA in  samples  before  testing  with the EpiDNA
Picogram  Assay.  We  believe  the DNAMax  kit  provides  a superior  method for
recovering picogram amounts of DNA from very concentrated protein solutions.  We
believe this kit will be useful for basic  research  uses where small amounts of
DNA  must be  extracted  from  samples  and  tested  by  techniques  such as the
polymerase  chain  reaction.  A utility patent  application  covering the DNAMax
technology has been filed with the United States Patent and Trademark Office and
a PCT application has been filed.

Marketing and Sales

      EasyID Genomics Systems. Since our scientific collaborators are also large
clinical sites that are  anticipated to order a high volume of our products,  we
do not  anticipate a need for a large  direct  marketing or sales force in 2000.
Our  marketing  efforts will  primarily  consist of designing,  installing,  and
servicing our genomic-based  systems at our collaborative  sites. Our scientific
staff will act as technical consultants to these locations.

      We  anticipate  that  our  gene  discovery  program,   combined  with  our
scientific   collaborations,   will   also   result  in   technology   licensing
opportunities to large clinical institutions and pharmaceutical  companies.  Our
plan includes  licensing the use of our proprietary  genetic  sequences to these
institutions for use in pharmaceutical development and direct patient care.


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<PAGE>


      Our current projects may result in the development of new technologies, as
well as the discoveries of important  genetic sequence  patterns.  It may become
desirable to form a joint  venture  with our  scientific  collaborators  to more
effectively pursue the commercialization of these new technologies.

      We plan to market our  products  to the public in 2001  through the use of
domestic and international distributors.  Distributors will have the opportunity
to sell certain products on a limited,  non-exclusive  basis. Other products may
become available for private label or an exclusive  license in certain cases. In
addition,  we plan to utilize electronic  commerce to market and sell all of our
products.

      EpiDNA Quality Systems. We began targeting the  biopharmaceutical  quality
assurance  market  during the second half of 1998.  Since this market  comprises
relatively few companies, we have been using a direct sales approach. We plan to
supplement  our direct sales efforts with the use of  independent  distributors.
Our marketing plan will target companies in the  biopharmaceutical  industry and
in the reference  laboratories  serving as quality  assurance  testing sites for
smaller biopharmaceutical companies. Our marketing and sales strategy will be to
establish direct contact with specific individuals within each target company or
reference  laboratory.  We intend to place  limited  advertising  in major trade
journals  such as  Science,  Biotechniques  and  BioPharm  to  inform  potential
customers of the  existence  and  potential  benefit of the Picogram  Assay.  We
intend to have representatives  attend major national and international industry
trade  shows to gain  direct  access to  potential  customers  and to  establish
overseas  distributors  to reach  international  customers.  We also  intend  to
present our product to a variety of potential  customers  via the  Internet.  We
currently have no sales force,  and there can be no assurance that a sales force
can be hired,  or, if hired,  that such sales force will be able to successfully
sell our products.

      Subsequently,  we intend to introduce and market the products developed by
our EasyID  product  research and  development  activities.  This is a long-term
development  activity to  formulate  products  that we believe will have quality
assurance  applications in the food and beverage industry.  We intend to develop
and market kits for the  identification  of beneficial yeast significant in wine
and beer manufacturing and yeast associated with food and beverage spoilage.

Manufacturing and Suppliers

      Our manufacturing and research and development activities are conducted in
a 14,000  square  foot  facility in Miami and a 1,500  square  foot  facility in
California.  We intend to  complete  a  build-out  of a  production  area in our
Florida  facility and we believe that,  after such  build-out,  this floor space
will be adequate for our manufacturing  and research and development  facilities
for the foreseeable future.

      Certain key  components  of our  Picogram  Assay and DNAMax  products  are
currently  provided by a limited  number of  sources,  and many  components  are
provided by outside  vendors.  One component is provided by a single source.  We
are utilizing  contract  manufacturers to manufacture  required reagents for our
Picogram  Assay.  Two key  components  of the EpiDNA  Picogram  Assay  Kit,  the
"GeNuncTM" reaction modules and the "MaxisorpTM"  immunomodules are manufactured
by  NUNC (a  Danish  entity),  but  can  also be  obtained  from  United  States
distributors.  One of the key components of the Picogram Assay is available only
from a single supplier.

On January 17, 2000, We Acquired DNA Sciences, Inc.

      On January 17, 2000, we acquired DNA Sciences,  Inc.,  which operates as a
wholly-owned  subsidiary of our company.  In the transaction,  we issued 450,000
shares of our common stock to the shareholders of DNA Sciences, Inc. in exchange
for all of their shares of DNA Sciences,  Inc. The shareholders of DNA Sciences,
Inc.  also have the ability to nominate  one  director to our Board of Directors
and have nominated Eric Wilkinson to be their nominee.

      Founded in 1999, DNA Sciences,  Inc. is a development stage  biotechnology
company that intends to specialize  in the  development  of genetic  systems for
medical and industrial  markets.  DNA Sciences,  Inc.'s initial target market is
the DNA probe market, which includes tissue typing, infectious disease detection
and quantification and genetic predisposition testing. On February 16, 2000, DNA
Sciences, Inc.'s name was changed to Genetic Vectors of California, Inc.


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<PAGE>


Competition

      The  biotechnology  industry  is  subject  to  intense  competition.   Our
competitors in the United States and  internationally  are numerous and include,
among  others,  diagnostics,   health  care,  pharmaceutical  and  biotechnology
companies.   Additionally,   other  companies,   including  large  biotechnology
companies,  may enter our business in the future.  Potential  competitors may be
able to develop  technologies  that are as  effective  as, or more  effective or
easier to  interpret  than those  offered by us, which would render our products
noncompetitive  or  obsolete.  Moreover,  many  of our  existing  and  potential
competitors have substantially greater financial, marketing, sales, distribution
and technological resources than us. Such existing and potential competitors may
also enjoy  substantial  advantages over us in terms of research and development
expertise,  experience in conducting  clinical trials,  experience in regulatory
matters,   manufacturing  efficiency,  name  recognition,  sales  and  marketing
expertise and distribution  channels.  There can be no assurance that we will be
able to  compete  successfully  against  current or future  competitors  or that
competition will not have a material  adverse effect on our business,  financial
condition and results of operations.

      DNA  Contamination  Assays in  Biopharmaceuticals.  Several  companies are
currently  involved  in  making  or  selling  trace DNA  detection  reagents  or
equipment,  or  performing  assays.  In  this  market  there  are two  types  of
competitors:  (1)  instrument  and reagent  sellers and (2) specialty  reference
laboratories.  We believe  that the largest  competitive  element in the current
market is specialty reference  laboratories.  These reference laboratories offer
DNA assaying at their own facilities based on their own  individually  developed
assays.  While  clearly  competitors,  we  believe  that these  facilities  also
represent potential customers for our products.

      Nucleic Acid Labeling and DNA Detection Kits. The market served by nucleic
acid labeling and detection  reagents is the molecular  biology research market.
There are at least 50 companies which are primarily identified with this market.
Of these,  several offer  nucleic acid  labeling and  detection  kit. In the DNA
detection area, we know of several  vendors that provide  reagents for detecting
DNA.

      We  believe  that  our  products   will  lend   themselves   to  low  cost
manufacturing of DNA labeling and detection  products on a large scale basis. We
also  believe our  technology  can be used to produce  reagents and test kits at
quality  equivalent  to or better than our direct  competitors.  There can be no
assurance that this large-scale development or quality level will occur.

Governmental Regulation

      We may, in the future,  endeavor to partner with pharmaceutical  companies
in the area of drug development. Any drug products developed by us or our future
collaborative  partners,  prior to  marketing  in the  United  States,  would be
required to undergo an  extensive  regulatory  approval  process by the FDA. The
regulatory  process,  which includes  preclinical testing and clinical trials of
each therapeutic product in order to establish its safety and efficacy, can take
many years and requires the expenditure of substantial resources.  Data obtained
from   preclinical   and  clinical   activities   are   susceptible  to  varying
interpretations  which could delay, limit or prevent regulatory agency approval.
In  addition,  delays or  rejections  may be  encountered  during  the period of
therapeutic  development,  including  delays  during the period of review of any
application. Delays in obtaining regulatory approvals could adversely affect the
marketing of any  therapeutics  developed by us or our  collaborative  partners,
impose costly  procedures upon us and our  collaborative  partners'  activities,
diminish any competitive  advantages that we or our  collaborative  partners may
attain and adversely  affect our ability to receive  royalties.  Once regulatory
approval of a product is granted,  such approval may impose  limitations  on the
indicated uses for which it may be marketed.  Further,  even if such  regulatory
approval is obtained,  a marketed  product and its  manufacturer  are subject to
continuing  review.  The discovery of previously unknown problems with a product
or manufacturer may result in restrictions on such product or manufacturer. Such
restriction could include withdrawal of the product from the market.


                                       8
<PAGE>


Employees

      We have currently nine employees, three of whom are executive officers and
all of whom are  full-time  employees.  None of our  employees  are covered by a
collective  bargaining  agreement  and we believe  our  employee  relations  are
satisfactory.

Intellectual Property Rights

      We have acquired  rights to make, use and sell certain  products under the
patents  referred to herein  pursuant to a License  Agreement dated September 7,
1990 (the "License Agreement") between ProVec, Inc., a company owned by Dr. Mead
McCabe, and the University of Miami and its School of Medicine, the owner of the
patents and patent applications.  The University of Miami acquired the rights by
virtue of an employee  agreement and the University Patent Policy.  Parts of the
invention were made using funds of the United States Government.  On January 20,
1992, ProVec assigned its rights under the License Agreement to EpiDNA,  Inc., a
wholly owned subsidiary of ours. EpiDNA merged into us on September 6, 1996.

      The license granted under the License Agreement is worldwide and exclusive
(except for the rights of the Federal Government) providing us with the right to
manufacture, use and sell products utilizing the patents and patent applications
referred to herein. We have the obligation, at our own expense, to prosecute and
maintain  patents  in the  name of or on  behalf  of the  University  of  Miami.
Further,  we are obligated to maintain  product  liability  insurance,  with the
University of Miami being named as an additional insured.  The License Agreement
provides for payment of a maintenance fee of $500 and a running royalty of 4% of
net sales of products using the  technology.  The  maintenance fee is creditable
against  royalties  subsequently  due in a given  year.  The term of the License
Agreement is the life of the U.S. patent and/or our foreign counterpart patents.
The License  Agreement can be terminated by the University of Miami for material
breaches  by us.  Primary  among such  breaches  are  failure to file  quarterly
reports of sales, nonpayment of royalties,  failure to develop and sell products
based on the  technology,  cessation  of sales for a period of three  months and
bankruptcy or  adjudication  of insolvency.  A two-month cure period is provided
for  correction  of  breaches.  If the License  Agreement is  terminated  by the
University of Miami,  the ownership of the patents and patent  applications  and
all rights to  develop,  manufacture  and sell  products  under the  patents and
patent applications will revert to the University of Miami and we will be unable
to produce, market or sell products whose manufacture, use or sale is covered by
the claims of the patents and patent applications  referred to herein.  Thus, we
would suffer a material adverse effect on our business,  financial condition and
viability if the University of Miami terminated the License Agreement.

      Since the patents and patent applications referred to herein were made, in
part, using federal funds provided by a federal agency,  the National  Institute
of Health (the "NIH") has a nonexclusive, nontransferable,  irrevocable, paid-up
worldwide  license to practice the invention (35 U.S.C. 202 (c)(4)).  Under this
nonexclusive  license,  the  NIH  can use  the  technology  in  federally-funded
projects  or it can,  if  provided  in a treaty  or  agreement,  sublicense  the
technology to a foreign government or international  organization.  The NIH also
has  certain  rights (35 U.S.C.  203)  allowing  it to grant  licenses  to third
parties if it is determined  that practical  application of the invention is not
occurring,  even exclusive  licenses,  as well as march-in  rights to meet unmet
health or safety needs, to meet requirements for public use specified in federal
regulations  or for failure to  manufacture  in the United States or to obtain a
waiver of such provisions.  The grant of an exclusive license or the exercise of
the march-in  rights would cause us to suffer a material  adverse  effect on our
business,  financial  condition  and  viability.  As described  herein,  we have
already  developed  products  based on the technology and intend to continue the
commercialization of the technology.

      At our expense, we applied on behalf of the University of Miami for patent
protection for part of the technology in the United States and other  countries.
Patents  have  issued  from the United  States  (Patent  Numbers  5,593,829  and
5,656,742), New Zealand (246228G), Australia (671970G), EPO (0625985, patents in
15 countries) and Germany (69220383).

      We filed the Utility Patent  Application  "Method of Protein Removal" with
the United  States Patent and  Trademark  Office on December 9, 1999,  and a PCT
application  of the same title on December 10, 1999,  claiming a DNA  extraction
method solely  invented by us. We believe this method,  sold under the trademark
DNAMax,  is unique in its ability to recover  trace  amounts of DNA from protein
solutions  in a form that can be  measured  with our  EpiDNA  Picogram  Assay or
amplified with the polymerase chain reaction ("PCR").


                                       9
<PAGE>


Research and Development Agreements

      We entered into a Research and  Development  Agreement with the University
of Miami on March  12,  1997.  Under  the  agreement,  the  University  provides
scientific  expertise in the identification of yeast and conducts  sequencing of
yeast genes for the development of sequence  databases for the identification of
pathogenic  yeast and yeast of  commercial  interest.  We pay  $17,410 per month
under this  agreement to the  University to provide  salaries for scientists and
supplies  for this  work.  The  University  provides  sequencing  equipment  and
laboratory  facilities.  The terms of the agreement provide that inventions that
are jointly  invented  are jointly  owned,  while those  invented  solely by the
University  or  solely  by us  are  owned  by the  inventing  party.  Under  the
agreement,  we have the right,  at our expense,  to file  patents on  inventions
jointly  invented or invented solely by the  University.  We filed a Provisional
Patent Application,  "Method of Identifying  Pathogenic Yeast," on September 29,
1999 describing a gene sequence  database and a method,  based on DNA probes and
primers, for the identification of the pathogen Cryptococcus  neoformans and its
genotypes.  Prior  to  initiating  sales of  products  that may be based on this
invention,  we intend to negotiate  and execute a licensing  agreement  with the
University.  We intend to file a Utility Patent Application with the U.S. Patent
and Trademark Office and a PCT Application  covering the invention  described in
the Provisional Patent Application  `Method of Identifying  Pathogenic Yeast" by
September 29, 2000.

      We  entered  into  a  three-year   Cooperative  Research  and  Development
Agreement ("CRADA") with the Agricultural Research Services of the United States
Department  of  Agriculture  (the  "ARS")  on June 1, 1998  (R&D  Agreement  No.
58-3K95-8-643,  "Development  of  Arrayed  Probes  for Rapid  Identification  of
Yeast").  The ARS will provide expertise in the identification of yeast, provide
access  to an  existing  database,  sequence  genes of yeast  to  construct  new
sequence  databases  for the  identification  of  pathogenic  yeast and yeast of
commercial   interest,   and  test  and   evaluate   our   products   for  yeast
identification.  We are paying to the ARS  $192,757  over the 3-year term of the
CRADA  for a  technician,  supplies  and  a  maintenance  contract  on  the  DNA
sequencer,  in support of this sequencing effort.  Under the terms of the CRADA,
we provide  expertise  on arrayed  probe  development,  synthesis  of probes and
detection  of probes,  and we agree to  develop,  market  and sell or  otherwise
commercialize products developed from the technology discovered. We agree to pay
the ARS a royalty of 2% of net sales of these products. The inventing party owns
inventions made solely by us or solely by the ARS and joint inventions are owned
jointly.   The  ARS  is  granted  a   royalty-free,   nonexclusive,   worldwide,
irrevocable,  nontransferable  license on any subject  invention solely owned by
us. The ARS has first option to prepare and  prosecute  patent  applications  on
subject inventions solely owned by ARS or jointly owned with us. This option may
be  waived  in whole  or in part.  We have  the  right  of first  refusal  to an
exclusive  license in subject  inventions owned or co-owned by the ARS. We shall
own  copyrightable  material that we produce in whole or in part. We granted the
ARS a worldwide  royalty-free and nonexclusive license to use such copyrightable
work for U.S.  Government  purposes.  We believe this CRADA, in combination with
the  agreement  with the  University  of  Miami,  provides  us with  world-class
scientific  expertise in the yeast,  as well as the ability to develop  sequence
databases and products for the  identification  of pathogenic yeast and yeast of
commercial  importance.  During 1999 and 1998,  we spent  $556,000 and $985,000,
respectively, for research and development activities.

Certain Business Risks

      You should carefully  consider the risks described below before trading in
our common stock. Our most  significant  risks and  uncertainties  are described
below;  however,  they are not the only  ones we face.  If any of the  following
risks actually occur, our business, financial condition or results of operations
could be materially  adversely  affected,  the trading price of our common stock
could decline and you may lose all or part of your investment.

We are in default of some of our outstanding  indebtedness  and may be unable to
repay these loans

      Between  November  1, 1998 and June 5, 2000,  we  borrowed a total of $2.3
million from various private investors, consisting of:

      o   Unsecured loans of $150,000, with interest payable quarterly beginning
          on April 1, 1999 and the principal payable on November 2, 1999. We are
          in default of these loans for failing to pay  principal  and  interest
          when due.


                                       10
<PAGE>


      o   Secured loan of $100,000, with interest payable quarterly beginning on
          June 1, 1999 and the  principal  payable on April 18, 2000.  We are in
          default of this loan for failing to pay  principal  and interest  when
          due.

      o   Secured loan of  $1,238,500,  in which the payment  dates of principal
          and interest were extended on March 3, 2000 by the lenders to June 30,
          2000.

      o   Loans of $175,000  convertible  into shares of common stock at a price
          of $5.00 per share and which are due in September 2000.

      o   Loans of $600,000  convertible  into shares of common stock at a price
          of $3.00 per share and which are due in November 2000.

      We will not be able to repay these loans  unless we raise  enough  capital
from external sources.  Our business  operations do not generate sufficient cash
flow to repay these loans. Our inability to repay these loans may result,  among
other  things,  in the  foreclosure  of our assets.  This would  jeopardize  our
ability to continue operations, and our stock price would likely decline.

Our limited  operating  history makes it difficult or impossible to evaluate our
performance and make predictions about our future

      We were organized in 1991 and are in the  development  stage.  To date, we
have generated very limited revenues from the sale of our products.  Our limited
operating history makes an evaluation of our future prospects very difficult. As
a development stage company, we will encounter the types of risks, uncertainties
and difficulties frequently encountered by early-stage companies.  Many of these
risks and  uncertainties are described in more detail elsewhere in this "Certain
Business Risks" section.  We may not  successfully  address some or all of these
risks.  If we do not  successfully  address  these  risks,  our future  business
prospects will be significantly  limited and, as a result,  the trading price of
our common stock would likely decline.

We have experienced significant losses and expect to incur losses in the future

      We incurred  net losses of $2.8 million and $2.6 million in 1999 and 1998,
respectively. Our cumulative net loss since our inception on January 1, 1992 was
$8.9 million.  We expect to incur substantial  losses for the foreseeable future
in connection with our research and development efforts, as well as the expenses
associated with attempting to commercialize our products, including expenses for
manufacturing, marketing and distributing our products.

We may be unable to continue  operations  if we are unable to obtain  additional
capital

      We had $206,802 of cash as of December 31, 1999.  Since December 31, 1999,
we have borrowed a total of $1.0  million,  consisting of a $250,000 loan from a
private investor on February 11, 2000, a $75,000 loan from a private investor on
March 2,  2000,  a $100,000  loan from a private  investor  on March 7, 2000,  a
$100,000 loan from a private  investor on May 8, 2000 and a $500,000 loan from a
private  investor on May 26, 2000. We project that these  proceeds will fund our
operations no longer than December 1, 2000. Our independent  auditors have noted
there is substantial doubt about our ability to continue as a going concern. See
Note 2 to the  Financial  Statements.  This "going  concern"  opinion is due, in
part, to our need to obtain from external sources additional  financing adequate
to complete  development  activities and to achieve a level of sales adequate to
support our cost  structure.  In the absence of additional  capital,  we will be
required to  significantly  curtail or cease our  business  activities,  and our
stock price would decline.

Our Common Stock Price May Be Lower Due to Quotation on the "Pink Sheets"

      Our common stock has  historically  been quoted on the OTC Bulletin  Board
under the  symbol  "GVEC."  Our  common  stock was no longer  eligible  for such
quotation as of March 31, 2000 because we were  delinquent  in filing our Annual
Report  on Form  10-KSB.  Our  common  stock is  currently  quoted  on the "pink
sheets."  Generally,  common stock that is quoted on the "pink  sheets" has less
liquidity   than  stock   quoted  on  the  OTC  Bulletin   Board   because  some
broker-dealers will not execute orders for stock quoted on the "pink sheets" and
because pricing  information is more difficult to obtain.  This  illiquidity may
result in a lower stock price.


                                       11a
<PAGE>

We will need to rely on  collaborative  partners to  facilitate  the sale of our
products  and our  failure to enter into such  collaborative  arrangements  will
hinder our ability to sell our products and services

      In the  future we may,  in order to  facilitate  the sale of our  systems,
enter into collaborative selling arrangements with one or more other persons. It
is  uncertain  whether  we will be able to  negotiate  acceptable  collaborative
arrangements  in the  future or that  such  collaborative  arrangements  will be
successful.  If we are unable to identify collaborative partners to sell certain
of our services and/or  products,  we may be forced to develop an internal sales
force to market and sell our services  and/or  products in markets  where we are
not intending on developing a direct selling presence. Such a process would take
more time and  potentially  cost more.  As a result,  our  revenues and earnings
would be reduced. If we do enter into collaborative  selling  arrangements,  our
success  will depend  upon the efforts of others and may be beyond our  control.


                                       11b
<PAGE>


We may not be able to  successfully  market our products in the United States or
internationally

      We have limited experience in marketing our products.  We intend to market
our products in the United States, Europe and Asia through collaborative selling
arrangements and/or through a network of independent distributors supported by a
direct  sales  force.  We do not  currently  have a sales  force in place and no
distribution  agreements  have been  entered  into.  Our  ability  to market our
product in Europe and Asia and other  areas will  depend on our  ability to fund
such  efforts  as  well as our  ability  to  develop  strategic  alliances  with
marketing  partners.  Our inability to  successfully  market our products  would
jeopardize our ability to generate revenue sufficient to support our operations.

Our products may not gain market acceptance,  which would jeopardize our ability
to generate revenue and continue operations

      We are  highly  dependent  on a limited  number of  product  lines and our
long-term  success may depend on the market  acceptance  of these  products.  We
currently  have two  product  lines,  the EpiDNA and DNAtect  product  lines and
another  product  line  under  development,  the  EasyID  product  line.  Market
acceptance  of our product  lines will  depend,  in part,  on the our ability to
demonstrate  the  superiority  of them  with  respect  to  existing  techniques,
including   the   products'   accuracy,    ease   of   use,    reliability   and
cost-effectiveness  and on the  effectiveness  of our marketing  efforts.  These
efforts  have been  adversely  affected  by our  working  capital  shortage.  No
assurance  can be given  that we will gain  market  acceptance  for our  product
lines. Failure to gain market acceptance for these product lines will jeopardize
our ability to obtain  capital,  and  generate  revenue to continue  operations,
likely resulting in a lower stock price.

The technology in our products is rapidly evolving,  and our inability to evolve
with this technology may jeopardize the commercial viability of our products

      The  science and  technology  of the EpiDNA and EasyID  product  lines are
rapidly  evolving.  The  commercial  viability of our product lines has not been
proven,  as we have only conducted  limited  marketing  efforts for our existing
products and other proposed products are in the early stage of development.  All
of our products are subject to the risks of failure  inherent in the development
of  products  based  on  innovative   technologies.   These  risks  include  the
possibility  that  any or all of these  products  are  found to be  ineffective,
unsafe, or otherwise fail to receive necessary  regulatory  clearances,  if any,
that these products,  though effective,  are uneconomical to market,  that third
parties hold  proprietary  rights that preclude us from marketing  them, or that
third  parties  market a superior or  equivalent  product.  Accordingly,  we are
unable to predict whether our products will become commercially viable.

We may not be able to  successfully  develop our  manufacturing  process,  which
would jeopardize our ability to generate revenue

      We have limited experience in manufacturing our products,  and we have not
yet determined whether we will be able to produce sufficient  quantities of such
products at commercially  reasonable costs. Our inability to produce  sufficient
quantities at  commercially  reasonable  costs would  jeopardize  our ability to
generate revenue sufficient to support our operations.  In such event, our stock
price would likely decline.


                                       12
<PAGE>


We are subject to risks related to product liability claims, which are expensive
to defend and may result in negative publicity

      The  nature of our  business  exposes  us to risk from  product  liability
claims.  We maintain product  liability  insurance for some of our products with
limits of $1 million per  occurrence  and $2 million in the  aggregate per year.
Such insurance coverage is, however,  becoming increasingly  expensive and there
can be no assurance  that our insurance will be adequate to cover future product
liability claims, or that we will be successful in maintaining  adequate product
liability insurance at acceptable rates. In addition, due to our working capital
shortage,  there can be no  assurance  that we will be able to fund the premiums
for our existing insurance.  Any losses that we may suffer from future liability
claims,  and any  adverse  publicity  from  product  liability  litigation,  may
adversely affect our business operations and our stock price.

We may not be able to  successfully  maintain  our current  patents,  obtain new
patents,  or operate without  infringing  upon the  proprietary  rights of other
parties

      Our  success  will  depend in part on our  ability to obtain and  maintain
patent  protection  for our products,  preserve our trade  secrets,  and operate
without infringing upon the proprietary rights of other parties. There can be no
assurance that patent  applications to which we hold ownership or license rights
will result in the issuance of patents,  that any patents  issued or licensed to
us will not be challenged and held to be invalid,  or that any such patents will
provide  commercially  significant  protection to our  technology,  products and
processes.  In  addition,  there  can  be no  assurance  that  others  will  not
independently  develop  substantially  equivalent  proprietary  information  not
covered by patents to which we have rights or obtain  access to our  know-how or
that others will not be issued patents which may prevent the sale of one or more
of our products,  or require  licensing and the payment of  significant  fees or
royalties by us to third  parties in order to enable us to conduct our business.
Defense and  prosecution  of patent claims can be expensive and time  consuming,
regardless  of whether  the  outcome is  favorable  to us, and can result in the
diversion of substantial  financial,  management,  and other  resources from our
other activities.  An adverse outcome could subject us to significant  liability
to third parties,  require us to obtain licenses from third parties,  or require
us to cease any related research and development activities or product sales. In
addition,  the  laws of  certain  countries  may not  protect  our  intellectual
property. Due to our working capital shortage, there can be no assurance that we
will be able to continue our existing patent applications.

We may not be able to successfully protect our proprietary information

      Our success is also dependent upon the skills,  knowledge,  and experience
of our  scientific  and  technical  personnel.  To help  protect our rights,  we
generally require all of our employees,  consultants, advisors and collaborators
to enter  into  confidentiality  agreements  that  prohibit  the  disclosure  of
confidential  information  to  anyone  outside  our  company  and in most  cases
assignment to us of their ideas, developments, discoveries and inventions. There
can be no  assurance,  however,  that these  agreements  will  provide  adequate
protection for our trade secrets,  know-how or other proprietary  information in
the event of any unauthorized use or disclosure.


                                       13
<PAGE>


We may not be able to hire, retain and integrate key personnel

      Our ability to successfully manage our growth will substantially depend on
our ability to attract and retain  additional  qualified  management  personnel.
Because of our extreme cash shortage, our ability to attract or retain qualified
personnel has been hindered. Currently, none of our administrative staff has any
experience in running a large company or a company whose securities are publicly
held, apart from our company.  There can be no assurance that the demands placed
on our personnel by the cash shortage or the growth of our business and the need
for  close  monitoring  of our  operations  and  financial  performance  through
appropriate and reliable  administrative and accounting  procedures and controls
will be met,  or that we will  otherwise  manage  our growth  successfully;  the
failure to do so could have a material  adverse effect on our business,  results
of operations  and financial  condition.  There is significant  competition  for
qualified personnel, and there can be no assurance that we will be successful in
recruiting,  retaining or training the management  personnel we require. We have
designated Mead M. McCabe, Jr. as our principal  financial officer. We currently
have  no  officer  with  previous  experience  in  managing  the  financial  and
accounting functions of a publicly-held company.

We face risks related to government regulation

      Changes in existing  regulations could require advance regulatory approval
of genetic susceptibility tests which may result in a substantial curtailment or
even prohibition of our activities  without  regulatory  approval.  If our tests
ever require  regulatory  approval,  the costs of introduction will increase and
marketing and sales may be significantly delayed.

      Further, several years ago the FDA proposed to regulate as medical devices
the "active  ingredients"  (known as "analyze  specific  reagents" or "ASRs") of
certain  tests  developed by, or in  conjunction  with,  clinical  laboratories.
Currently,  a final rule has not been issued.  The FDA has  specifically  stated
that it is not provided to the laboratories that perform them.  According to the
FDA, any  contemplated  additional  controls  (e.g.  submission  for  Pre-Market
Approval  applications)  over the tests  themselves  would likely  involve those
tests which identify genes  associated  with cancer or diseases  associated with
dementia. If the FDA requires Pre-Market Approval of our genetic  susceptibility
test,  our company may be required to conduct  pre-clinical  studies,  obtain an
investigational  device exemption to conduct  clinical tests,  file a Pre-Market
Approval  application,  and obtain FDA approval.  There can be no assurance such
approval would be received on a timely basis,  if at all. The failure to receive
such approval could require us to develop alternative testing methods or utilize
approved  ASRs,  which  could  result in the delay or stop the use of such test.
Such a delay or termination could result in reduced revenues or losses.

      Although our primary  business is the  development of systems to determine
disease  risk,  drug  resistance  and  therapeutic  response  based  on  genetic
patterns,  we may also  develop  or  assist  others to  develop,  drugs or other
treatments  for the  diseases  related  to our  tests.  The  FDA and  comparable
agencies  in state and  local  jurisdictions  and in  foreign  countries  impose
substantial  requirements  upon the manufacturing and marketing of drug products
such as those  potentially  to be developed  by our company or any partner.  The
process of obtaining FDA and other required regulatory  approvals is lengthy and
expensive.  The time required for FDA approvals is uncertain and typically takes
a number of years, depending on the type, complexity and novelty of the product.
We may encounter  significant delays or excessive costs in our efforts to secure
necessary  approvals or  licenses.  Because  certain of the  products  likely to
result from our research and development programs involve the application of new
technologies  and will be based on new approaches,  such products may be subject
to substantial additional review by various governmental  regulatory authorities
and as a result,  regulatory  approvals  may be  obtained  more  slowly than for
products using more  conventional  technologies.  There can be no assurance that
FDA  approvals  will be obtained  in a timely  manner,  if at all.  Any delay in
obtaining,  or the failure to obtain,  such approvals would adversely affect our
ability to generate  product  sales.  Even if FDA approvals  are  obtained,  the
marketing and  manufacturing  of drug products are subject to continuing FDA and
other regulatory review.  Additional governmental regulations may be promulgated
which  could delay  regulatory  approval of our  potential  products.  We cannot
predict  the impact of adverse  governmental  regulation  that might  arise from
future legislative or administrative action.

      We intend to generate  product  revenues  from sales outside of the United
States. Distribution of our products outside the United States may be subject to
extensive governmental regulation. These regulations, including the requirements
for approvals or clearance to market,  the time required for  regulatory  review
and the  sanctions  imposed for  violations,  vary by country.  It is  uncertain
whether we will obtain regulatory approvals in such countries or that we will be
required to incur  significant  costs in  obtaining or  maintaining  our foreign
regulatory  approvals.  Failure to obtain necessary  regulatory approvals or any


                                       14
<PAGE>


other  failure to comply with  regulatory  requirements  could result in reduced
revenues and earnings.

We do not anticipate distributing any dividends to our shareholders

      We anticipate that for the foreseeable  future  earnings,  if any, will be
retained  by us to  finance  the  development  of our  business  and will not be
distributed to our shareholders as dividends. The declaration and payment of any
dividends by us at some future time, if any, will depend upon the our results of
operations,   financial   condition,   cash   requirements,   future  prospects,
limitations  imposed by credit  arrangements or senior  securities and any other
factors deemed  relevant by the Board of Directors.  Any declaration and payment
of a  dividend  by us will at all  times be in the  discretion  of our  Board of
Directors.  See "Market  for Common  Equity and  Related  Stockholder  Matters -
Dividends."

Item 2.  Description of Property
--------------------------------

      The Company  currently leases  approximately  14,000 square feet of office
space located at 5201 N.W. 77th Avenue,  Suite 100, Miami,  Florida 33166.  This
lease,  which was entered  into on June 12,  1997,  has a ten-year  term and the
property is in good condition. Our wholly-owned  subsidiary,  Genetic Vectors of
California,  Inc., is located at 9466 Black Mountain Road, Suite 130, San Diego,
California 92126. This lease is month-to-month  and covers  approximately  2,000
square feet.

Item 3.  Legal Proceedings
--------------------------

      The Company is not aware of any legal proceedings involving the Company.

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

      None.


                                       15
<PAGE>


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------

Market Information

      Our common stock is traded in the over-the-counter market and is quoted on
the pink sheets under the symbol "GVEC." The following  tables show the high and
low bid prices for our common stock for each quarter  within the last two fiscal
years.(1) Our bid price as of June 5, 2000 on the pink sheets was $6.03125.

                                           Bid Price Per Share(2)
                                           ----------------------
                                            High                Low
                                            ----                ---
      First Quarter 1998                 $  8.75             $ 7.00
      Second Quarter 1998                $ 9.875             $ 8.75
      Third Quarter 1998                 $9.9375             $ 7.50
      Fourth Quarter 1998                $  8.50             $ 3.50

                                           Bid Price Per Share(2)
                                           ----------------------
                                            High                Low
                                            ----                ---
      First Quarter 1999                 $  6.75             $ 4.75
      Second Quarter 1999                $  6.75             $ 5.50
      Third Quarter 1999                 $  5.75             $ 4.50
      Fourth Quarter 1999                $  6.00             $ 5.03

                                           Bid Price Per Share(2)
                                           ----------------------
                                            High                Low
                                            ----                ---
      First Quarter 2000                 $  7.50             $ 5.50

      -------------------------------

      (1)   This information was obtained from the OTC Bulletin Board.

      (2)   We  believe  that  these  quotations  reflect  inter-dealer  prices,
            without  retail  mark-up,  mark-down  or  commission,  and  may  not
            represent actual transactions.

Holders of Common Stock

      As of June 5, 2000, there were  approximately 398 holders of record of the
Common Stock.

Dividends

      Our company has not paid any  dividends  on its common  stock at any time.
Section 607.06401 of Florida Statutes  prohibits the payment of dividends by any
corporation which, after taking into account such dividend, would not be able to
pay its debts as they  become due or which  would  result in such  corporation's
total assets being less than its total liabilities.  This provision may prohibit
us from paying  dividends unless we obtain  significant new capital.  Other than
the  foregoing,  we are not  aware of any  restrictions  on our  ability  to pay
dividends on our common stock, but our company's  management does not anticipate
paying any dividends for the foreseeable future.

Sales of Unregistered Securities

      In June and  August  of 1998,  we  issued an  aggregate  of 709  shares in
exchange for consulting  services  valued by us at $6,000,  based on the closing
price on the date of grant. This offering was exempt from registration  pursuant
to Section 4(2) of the Securities Act.


                                       16
<PAGE>


      On September 8, 1998, we granted warrants to purchase 50,000 shares of our
common  stock at an  exercise  price of $6.00  per  share to a  consultant  (the
"Consultant")  to assist us in obtaining  additional  financing.  These warrants
were immediately exercisable. The closing price of our common stock on September
8, 1998 was  $9.125.  This  offering  was exempt from  registration  pursuant to
Section 4(2) of the Act.

      On  November  2, 1998,  we borrowed  $150,000  from two private  investors
("Loan No. 1"). The terms of Loan No. 1 provided for an annual  interest rate of
12% which will increase 1% for each month that any portion of Loan No. 1 remains
unpaid  after April 1, 1999,  up to the maximum rate  permitted by law.  Accrued
interest  is  payable  monthly  beginning  on April  1,  1999.  The  outstanding
principal  was due on  November  2,  1999.  We issued to the  private  investors
warrants to purchase  15,000 shares of our common stock at an exercise  price of
$6.00 per share.  These warrants may be exercised at any time before November 2,
2003.  The closing  price of our common stock on November 2, 1998 was $7.00.  We
are obligated to grant the private investors  warrants to purchase an additional
2,500  shares of our  common  stock at an  exercise  price of $6.00 per share on
April 1, 1999 and each month  thereafter  through  October 1, 1999, or until the
loans are repaid in full. On November 1, 1999 and each month thereafter that the
loans are outstanding,  we are obligated to grant the private investors warrants
to purchase an additional  5,000 shares of common stock at an exercise  price of
$6.00.  The  proceeds  of these  loans have been used by us to fund our  working
capital needs.  This offering was exempt from  registration  pursuant to Section
4(2) of the Act and Rule 506 promulgated  thereunder.  We are in default of this
loan for failing to pay principal and interest when due.

      In addition, on November 2, 1998, in connection with Loan No. 1, we issued
to the Consultant  warrants to purchase  15,000 shares of our common stock at an
exercise price of $6.00 per share.  These warrants are immediately  exercisable.
This offering was exempt from registration pursuant to Section 4(2) of the Act.

      On January 19, 1999, we borrowed  $163,500 from a private  investor ("Loan
No. 2").  The terms of Loan No. 2 provided  for an annual  interest  rate of 12%
which  will  increase  1% for each month  that any  portion of the loan  remains
unpaid after January 19, 2000, up to the maximum rate permitted by law.  Accrued
interest  was payable  quarterly in arrears  beginning  on April 19,  1999.  The
outstanding principal balance was due on January 19, 2000. On March 3, 2000, the
private investor extended the due date of the principal and interest to June 30,
2000 and reduced the interest  rate to 12% for the period of January 19, 2000 to
June 30,  2000.  The loan is  secured by  substantially  all of our  assets.  In
addition,  we issued the private investor  warrants to purchase 50,000 shares of
our common stock at an exercise  price of $0.01 per share.  These  warrants were
immediately  exercisable.  The closing  price of our common stock on January 19,
1999 was $5.125.  On March 3, 2000,  in  connection  with the  extension  of the
maturity  date,  these  warrants  were  cancelled and we issued 50,000 shares of
common stock to the private  investor at no cost.  We are obligated to grant the
private  investor  warrants to purchase  150,000  shares at an exercise price of
$5.50 per share upon the repayment of the loan or the closing on the sale of our
securities in an aggregate amount of $1,500,000. Such additional warrants become
exercisable  on the fifth  anniversary  of the grant.  The proceeds of this loan
have  already  been  expended  by us to fund our  working  capital  needs.  This
offering  was exempt from  registration  pursuant to Section 4(2) of the Act and
Rule 506 promulgated thereunder.

      On March 9, 1999, we borrowed an additional  $125,000  ("Loan No. 3") from
the same  private  investor  which  had made Loan No. 2. The terms of Loan No. 3
provided  for an annual  interest  rate of 12% which will  increase  1% for each
month that any portion of the loan remains  unpaid after January 19, 2000, up to
the maximum rate  permitted by law.  Accrued  interest was payable  quarterly in
arrears  beginning on April 19, 1999. The outstanding  principal balance was due
on January 19, 2000.  On March 3, 2000,  the private  investor  extended the due
date of the  principal  and  interest to June 30, 2000 and reduced the  interest
rate to 12% for the period of January  19,  2000 to June 30,  2000.  The loan is
secured by substantially all of our assets.  In addition,  we issued the private
investor  warrants to purchase  50,000 shares of our common stock at an exercise
price of $0.01 per share.  These  warrants  were  immediately  exercisable.  The
closing price of our common stock on March 9, 1999 was $7.875. On March 3, 2000,
in  connection  with the  extension of the maturity  date,  these  warrants were
cancelled and we issued 50,000 shares of common stock to the private investor at
no cost.  We are  obligated to grant the private  investor  warrants to purchase
100,000  shares of common stock at an exercise price of $5.50 per share upon the
repayment  of the  loan  or the  closing  on the  sale of our  securities  in an
aggregate amount of $1.5 million. Substantially all of the proceeds of this loan
have been expended by us to fund our working  capital  needs.  This offering was
exempt  from  registration  pursuant  to  Section  4(2) of the Act and  Rule 506
promulgated thereunder.

      In  connection  with Loan No. 2 and Loan No.  3, we  granted  warrants  to
purchase 16,350 shares of our common stock on January 19, 1999 and 12,500 shares
of our common stock on March 9, 1999 at an exercise  price of $5.50 per share to
the  Consultant  for helping us to locate the  financing.  These  warrants  were
immediately  exercisable.  The closing  price of our common stock was $5.125 and
$7.875 on January 19, 1999 and March 9, 1999,  respectively.  This  offering was
exempt from registration pursuant to Section 4(2) of the Act.


                                       17
<PAGE>


      On April 19, 1999, we borrowed an additional  $100,000 ("Loan No. 4") from
a  private  investor.  This  loan has an annual  interest  rate of 12%.  Accrued
interest was payable  quarterly,  commencing  on June 1, 1999.  The  outstanding
principal  balance was due April 19, 2000. The loan is secured by  substantially
all of our  assets.  In  addition,  we issued the private  investor  warrants to
purchase  25,000  shares of our common  stock at an exercise  price of $3.50 per
share.  These warrants were  immediately  exercisable.  The closing price of our
common  stock on April  19,  1999 was  $6.00.  This  offering  was  exempt  from
registration  pursuant  to  Section  4(2) of the Act and  Rule  506  promulgated
thereunder.  We are in default of this loan for  failing  to pay  principal  and
interest when due. In connection with this loan, we granted warrants to purchase
10,000  shares of common  stock at an  exercise  price of $3.50 per share to the
Consultant for helping us to locate the financing.

      On May 10, 1999, we issued 225,000 shares of our common stock to a private
investor in exchange for $225,000. The private investor paid $1.00 per share for
the 225,000 shares,  or $4.75 per share less than the closing price of $5.75 per
share on May 10, 1999.  The proceeds  from this  offering were expended by us to
fund our working  capital  needs.  This  offering  was exempt from  registration
pursuant to Section 4(2) of the Act and Rule 506 promulgated thereunder.

      On July 16,  1999,  we issued  400,000  shares of our common  stock to two
private  investors in exchange for $400,000.  These private investors paid $1.00
per share for the 400,000 shares,  or $4.75 per share less than the loan closing
price of $5.75 per share on July 16, 1999.  The proceeds from this offering were
expended  by us to fund our  working  capital  needs.  In  connection  with this
financing,  we  canceled  warrants  in  connection  with Loan No. 3 to  purchase
100,000  shares  of  common  stock at an  exercise  price of $5.50 per share and
issued new  warrants to purchase  100,000  shares of common stock at an exercise
price of $3.00 per share. This offering was exempt from registration pursuant to
Section 4(2) of the Act and Rule 506 promulgated thereunder.

      On October 6, 1999, we borrowed an additional $200,000 ("Loan No. 5") from
a  private  investor.  The  loan has an  annual  interest  rate of 12%,  accrued
interest was payable quarterly, commencing January 19, 2000, which will increase
one  percent  (1%) for each month that any  portion of the loan  remains  unpaid
after January 19, 2000. The outstanding principal balance was due on January 19,
2000.  On March 3,  2000,  the  private  investor  extended  the due date of the
principal  and interest to June 30, 2000.  The loan is secured by  substantially
all of our  assets.  In  addition,  we issued the private  investor  warrants to
purchase  80,000  shares of our common  stock at an  exercise  price of $.01 per
share.  These warrants were  immediately  exercisable.  The closing price of our
common stock on October 7, 1999 was $5.75.  On March 3, 2000, in connection with
the extension of the maturity date,  these warrants were cancelled and we issued
50,000  shares of common stock to the private  investor at no cost. In addition,
when the loan is paid back or if $1.5 million is  subsequently  raised by us, we
are obligated to issue warrants to purchase 150,000 shares of common stock at an
exercise  price of $3.00 per share.  In  connection  with this loan,  we granted
warrants  to  purchase  20,000  shares of common  stock on October 7, 1999 at an
exercise  price of $3.00 per share to the  Consultant  for helping us locate the
financing. These warrants were exercisable immediately. This offering was exempt
from  registration  pursuant to Section 4(2) of the Act and Rule 506 promulgated
thereunder.

      On November 19, 1999,  we borrowed an additional  $200,000  ("Loan No. 6")
from the same private investor which had made Loan No. 5. The loan has an annual
interest rate of 12%, accrued interest was payable quarterly, commencing January
19, 2000,  which will  increase one percent (1%) for each month that any portion
of the loan remains  unpaid after January 19, 2000.  The  outstanding  principal
balance is due on January  19,  2000.  On March 3, 2000,  the  private  investor
extended the due date of the principal  and interest to June 30, 2000.  The loan
is secured by substantially all of our assets.  In addition,  the Company issued
the private  investor  warrants to purchase  80,000 shares of common stock at an
exercise price of $.01 per share.  These warrants were immediately  exercisable.
The closing  price of our common stock on November 19, 1999 was $6.00.  On March
3, 2000, in connection  with the extension of the maturity date,  these warrants
were  cancelled  and we issued  80,000  shares of  common  stock to the  private
investor.  In  addition,  when  the  loan is paid  back  or if $1.5  million  is
subsequently  raised,  we are  obligated to issue  warrants to purchase  150,000
shares  of our  common  stock  at an  exercise  price  of $3.00  per  share.  In
connection with this loan, we granted  warrants to purchase 20,000 shares of our
common stock on November 19, 1999 at an exercise price of $3.00 per share to the
Consultant for helping us locate the financing.  These warrants were exercisable
immediately. This offering was exempt from registration pursuant to Section 4(2)
of the Act and Rule 506 promulgated thereunder.

      On December 22, 1999,  we borrowed an additional  $300,000  ("Loan No. 7")
from the same private  investor which had made Loan No. 5 and 6. The loan has an
annual interest rate of 12%, accrued interest is payable  quarterly,  commencing
on April 22, 2000,  which will increase one percent (1%) for each month that any
portion  of the loan  remains  unpaid  after  April 22,  2000.  The  outstanding


                                       18
<PAGE>


principal  balance  is due on April 22,  2000.  On March 3,  2000,  the  private
investor  extended the due date of the  principal and interest to June 30, 2000.
The loan is secured by substantially all of our assets.  In addition,  we issued
the private  investor  warrants to purchase 120,000 shares of common stock at an
exercise price of $1.00 per share. These warrants were immediately  exercisable.
The  closing  price of our common  stock on  December  22,  1999 was  $5.25.  In
addition,  when the loan is paid back or if $1.5 million is subsequently raised,
we are obligated to issue warrants to purchase 150,000 shares of common stock at
an exercise price of $3.00 per share.  In connection  with this loan, we granted
to the  Consultant  warrants to  purchase  30,000  shares of common  stock at an
exercise  price of $3.00 per share for  helping us locate the  financing.  These
warrants are immediately exercisable. This offering was exempt from registration
pursuant to Section 4(2) of the Act and Rule 506 promulgated thereunder.

      On February 11, 2000,  we borrowed an additional  $250,000  ("Loan No. 8")
the same  private  investor  which had made Loan No. 5, 6 and 7. The loan has an
annual interest rate of 12%, accrued interest is payable  quarterly,  commencing
on April 22, 2000,  which will increase one percent (1%) for each month that any
portion of the loan remains  unpaid after April 22, 2000. On March 3, 2000,  the
private investor extended the due date of the principal and interest to June 30,
2000. The loan is secured by substantially  all of our assets.  In addition,  we
issued the private investor  warrants to purchase 100,000 shares of common stock
at an  exercise  price of $1.00  per  share.  These  warrants  were  immediately
exercisable.  The closing  price of our common  stock on  February  11, 1999 was
$7.25.  In  addition,  when  the  loan  is  paid  back  or if  $1.5  million  is
subsequently raised, we will issue warrants to purchase 125,000 shares of common
stock at an exercise price of $3.00 per share.  In connection with this loan, we
granted to the Consultant  warrants to purchase 30,000 shares of common stock at
an exercise price of $1.00 per share for helping us locate the financing.  These
warrants are immediately exercisable. This offering was exempt from registration
pursuant to Section 4(2) of the Act and Rule 506 promulgated thereunder.

      On March 2, 2000, we borrowed  $75,000 from a private  investor ("Loan No.
9"). The loan has an annual  interest rate of 12%, simple  interest,  payable at
maturity.  This loan is due on  September  2, 2000.  Prior to the payment of the
principal balance of the loan, the private investor may convert,  at his option,
all amounts due into shares of our common  stock at a  conversion  rate of $5.00
per share.  In  addition,  we issued the private  investor  warrants to purchase
7,500  shares of common  stock at an exercise  price of $6.20 per share.  In the
event of a default,  this note is  convertible  into shares of common stock at a
conversion rate of $3.00 per share. Additionally, in the event of a default, the
investor  would be entitled  to  warrants to purchase  750 shares at an exercise
price of $5.00 per share for each month that any amounts are  outstanding  under
the note. In connection with this loan, we granted to the Consultant warrants to
purchase  25,000 shares of common stock at an exercise price of $6.20 per share.
The  offering was exempt from  registration  pursuant to Section 4(2) of the Act
and Rule 506 promulgated thereunder.

      In March 7, 2000, we borrowed  $100,000 from a private investor ("Loan No.
10"). The loan has an annual interest rate of 12%, simple  interest,  payable at
maturity.  This loan is due on  September  6, 2000.  Prior to the payment of the
principal balance of the loan, the private investor may convert,  at his option,
all amounts due into shares of our common  stock at a  conversion  rate of $5.00
per share.  In  addition,  we issued the private  investor  warrants to purchase
10,000  shares of common stock at an exercise  price of $6.20 per share.  In the
event of a default,  this note is  convertible  into shares of common stock at a
conversion rate of $3.00 per share. Additionally, in the event of a default, the
investor  would be entitled to warrants to purchase  1,000 shares at an exercise
price of $5.00 per share for each month that any amounts are  outstanding  under
the note. In connection with this loan, we granted to the Consultant warrants to
purchase  25,000 shares of common stock at an exercise price of $6.20 per share.
The  offering was exempt from  registration  pursuant to Section 4(2) of the Act
and Rule 506 promulgated thereunder.

      On May 8, 2000, we borrowed  $100,000  ("Loan No. 11") and on May 26, 2000
we borrowed  $500,000 from a private  investor ("Loan No. 12"). These loans have
an annual interest rate of 12%, simple interest,  payable at maturity. The loans
are due in November 2000.  Prior to the payment of the principal  balance of the
loan, the private  investor may convert,  at his option at anytime up to 30 days
after the closing of an equity  financing  by our company of $5 million or more,
all amounts due into shares of our common  stock at a  conversion  rate of $3.00
per share. In addition,  and in the event of a conversion,  the private investor
will receive warrants to purchase (a) 33,333 (Loan No. 11) and 166,665 (Loan No.
12)  shares  of  common  stock at an  exercise  price of $6.00 per share and (b)
33,333  (Loan No. 11) and  166,665  (Loan No.  12) shares of common  stock at an
exercise  price of $7.10 per share.  If no conversion  occurs,  then the private
investors will receive warrants to purchase (a) 20,000 (Loan No. 11) and 100,000
(Loan No. 12) shares of common stock at an exercise price of $6.60 per share and
(b) 20,000 (Loan No. 11) and 100,000  (Loan No. 12) shares of common stock at an
exercise price of $8.00 per share. Additionally,  in the event of a default, the
investor would be entitled to warrants to purchase  20,000 shares at an exercise
price of $5.00 per share for each month that any amounts are  outstanding  under
the note. The offering was exempt from registration  pursuant to Section 4(2) of
the Act and Rule 506 promulgated thereunder.


Item 6.  Management's Discussion and Analysis or Plan of Operation
------------------------------------------------------------------

      The  following   information  should  be  read  in  conjunction  with  the
consolidated financial statements of the Company and the notes thereto appearing
elsewhere in this Annual Report on Form 10-KSB.

Plan of Operation

      We  specialize  in the  development  of  molecular  systems in the area of
disease management and risk assessment. We plan to develop and manufacture these
tests for sale to the pharmaceutical and healthcare industries. We are currently
selling the EpiDNA and the EasyID product lines and are developing several other
products of the EasyID product line.


                                       19
<PAGE>


Financial Resources and Cash Requirements

      We are dependent on external capital to finance our operations, as we only
generate a nominal amount of cash from  operations.  As of December 31, 1999, we
had cash and cash  equivalents  of $206,802.  Since that date, we have raised an
additional  $1.0  million.  These  funds are  projected  to last no longer  than
December  1,  2000.  We will  need  to  raise  additional  capital  to  continue
operations  beyond December 1, 2000. This plan of operation assumes that we will
be successful in raising  additional  capital.  Our failure to raise  additional
capital will,  among other things,  cause  deviations from the plan of operation
described herein.

Research and Development

      We will continue our product research and development efforts and continue
to implement what we believe to be a feasible plan for product  development.  We
intend to complete the  build-out of a production  area in our Florida  facility
and will continue  research and development in our San Diego facility,  which we
acquired in January 2000.  For the twelve month period  following our receipt of
significant additional capital, our activities will focus on the following:

      o   Continued development of our Juvenile Diabetes Risk Assessment Kit.

      o   Development of new detection kits in collaboration  with the Norwegian
          Institute of Public Health.

      o   Continuation  of EasyID DNA probe product  development  for diagnostic
          uses and drug discovery.

      o   Continued  research and  development  of products for the detection of
          genes involved in cardiovascular diseases.

      o   Continued  research  in  applications  of our  nucleic  acid  labeling
          technology.

Significant Plant or Equipment Purchases

      We  anticipate  the  need  to  purchase  and/or  lease  various  equipment
approximately   valued  at  $500,000.   Equipment  will  be  used  primarily  to
manufacture  the EasyID line of products  currently  being  marketed and develop
additional products.

Changes in the Number of Employees

      We  currently  have  nine  employees.  If we  are  successful  in  raising
significant  new capital,  then we anticipate  hiring  thirteen new employees in
2000 in connection with our research and  development  and product  development,
administration,  sales and  marketing.  We believe that these  personnel will be
adequate to accomplish the tasks set forth in our plan.


Proposed Personnel Addition Plan                       2000
--------------------------------                       ----

   Executive Personnel                                    1

   Administrative Personnel                               1

   Director - QA/QC                                       1

   Director - Sales and Marketing                         1

   Manufacturing Manager                                  1

   Scientists                                             2

   Technicians                                            7
                                                       ----
Total Proposed New Employees                             14
                                                       ====

Total Proposed Employees at End of Year                  23
                                                       ====


                                       20
<PAGE>


Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

      We remain largely a development  stage company.  We generated  revenues of
$45,000  during the fiscal year ended  December 31, 1999 and had related cost of
sales of $9,000.  These sales are  attributable  to sales of the Picogram Assay.
Our  expenditures  far exceed our revenues.  We reported $11,275 of revenues for
the fiscal year ended December 31, 1998. We had temporarily removed the Picogram
Assay Kit from the market during the third quarter of 1997, and reintroduced the
Picogram Assay Kit in July 1998.

      Research and  development  expenses for the fiscal year ended December 31,
1999 decreased by $419,000 to $566,000 from the  comparable  period in the prior
year. This decrease is largely  attributable to cut-backs due to our shortage of
available funds.

      Selling, general and administrative expenses decreased by $298,000 to $1.3
million in the year ended December 31, 1999 over the comparable  period in 1998.
This  decrease is primarily  attributable  to a $332,500  charge to  operations,
resulting from the valuation of 50,000 warrants issued to a financial consultant
in 1998.

      Depreciation and amortization expense was in line with the prior year.

      Amortization of deferred loan costs increased by  approximately  $730,000.
The increase was directly  related to us borrowing  approximately  $1 million in
1999  and  $150,000  in 1998  and  granting  approximately  619,000  and  30,000
warrants,  respectively, to the lenders. These warrants were valued based on the
Black-Scholes  Option Pricing Model and resulted in  approximately $1 million of
deferred loan costs, of which approximately $748,000 and $19,000,  respectively,
were amortized in our statements of operations for 1999 and 1998.

      Interest expense for the fiscal year ended December 31, 1999 was $132,000,
representing  the interest on various  loans  received by us.  During  1999,  we
borrowed  $1  million.  This  compares  to  interest  income of  $62,000  in the
comparable  period  in the  prior  year.  This  represented  interest  earned on
certificates  of deposit and money market  accounts in 1998,  offset by interest
expense on loans outstanding during the latter part of 1998.

      Liquidity  and  Capital  Resources.  The net cash used by us in  operating
activities  aggregated  $1.6 million in the year ended  December  31,  1999,  as
compared  with $2.1  million  used in 1998.  This was  largely  attributable  to
operating  expenses and research and  development  activities,  and increases in
accounts payable. Our net cash provided in financing activities  aggregated $1.7
million during the year ended December 31, 1999,  consisting  mainly of proceeds
from the sale of unregistered securities and loan transactions.

      We have experienced  extreme cash shortages since the end of November 1998
through the date of this filing.  As of December  31,  1999,  we had $206,802 of
cash. Since December 31, 1999, we raised a total of $1.0 million, consisting of:

      o   On  February  11,  2000,  we  obtained a $250,000  loan from a private
          investor.

      o   On March 2, 2000, we obtained a $75,000 loan from a private investor.

      o   On March 7, 2000, we obtained a $100,000 loan from a private investor.

      o   In May, 2000, we obtained $600,000 in loans from a private investor.

      Substantially  all of these  proceeds  are  expected  to be spent prior to
December 1, 2000. As of December 31, 1999, we had a capital deficit of $432,000.
We have entered into a non-binding  letter of intent with an underwriter to sell
up to $8.4  million of  securities  in a  firm-commitment  registered  offering,
although no assurances  can be given that such an offering will take place or be
successful.  Our  inability  to raise  significant  capital in such a registered
offering will jeopardize our ability to continue operations.


                                       21
<PAGE>


      Going Concern Opinion.  Our independent  public  accountants have added an
explanatory  paragraph to their audit opinion issued in connection with the 1999
and 1998  financial  statements  which states that our  company's  dependence on
outside  financing and our losses since inception raise  substantial doubt about
our ability to continue as a going concern.

      Acquisition of DNA Sciences,  Inc. On January 17, 2000, we acquired all of
the outstanding capital stock of DNA Sciences,  Inc., a California  corporation.
In  consideration  for  the  shares  of  DNA  Sciences,  we  issued  the  former
shareholders  of DNA Sciences,  Inc. a total 450,000 shares of our common stock.
The  shareholders  of DNA Sciences  have the ability to nominate one director to
our Board of Directors.  Subsequent to the acquisition, DNA Sciences changed its
name to Genetic  Vectors of California,  Inc.,  which  continues to operate as a
wholly  owned  subsidiary  of our company.  In the past,  DNA  Sciences,  Inc.'s
operations have been  insignificant.  As a result of this  acquisition,  we will
likely  record a  significant  amount of goodwill  which will be amortized  over
future periods;  the amortization  charge will be significant to our operations.
However,  the  allocation  of the  purchase  price may  include  a portion  as a
write-off for in-process  research and development costs. DNA Sciences currently
has four employees and rents its facilities.

      Impact of Inflation.  Although inflation has slowed in recent years, it is
still a factor in the United  States  economy  and we  continue  to seek ways to
mitigate its impact.  To the extent permitted by competition,  we intend to pass
increased  costs on to our  customers by  increasing  sales prices over time. In
addition, we place all of our major supplier purchases out to bid.

      New FASB Pronouncements.  In June 1998, the Financial Accounting Standards
Board  issued  FASB 133,  "Accounting  for  Derivative  Instruments  and Hedging
Activities." SFAS 133 requires companies to recognize all derivatives  contracts
as either assets or liabilities in the balance sheet and to measure them at fair
value.  If  certain  conditions  are  met,  a  derivative  may  be  specifically
designated as a hedge,  the objective of which is to match the timing of gain or
loss  recognition  on the hedging  derivative  with the  recognition  of (i) the
changes in the fair value of the hedged asset or liability that are attributable
to the  hedged  risk  or (ii)  the  earnings  effect  of the  hedged  forecasted
transaction.  For a derivative not designated as a hedging instrument,  the gain
or loss is  recognized  in  operations  in the  period of change.  SFAS 133,  as
amended  by FAS 137,  is  effective  for all  fiscal  quarters  of fiscal  years
beginning after June 15, 2001.

      Historically,  we have not entered into  derivatives  contracts  either to
hedge existing risks or for speculative purposes.  Accordingly, we do not expect
adoption  of the new  standard  on  January  1,  2001 to  affect  its  financial
statements.

      Year 2000 Computer Issues.  The potential for software failure due to Year
2000  calculations  is a known risk.  We  recognize  the need to ensure that our
operations, products and services are not adversely impacted by Year 2000 risks.
We expended  approximately $2,500 for Year 2000 related expenses and continue to
monitor the situation for any disruptions  due to Year 2000 related  issues.  We
have not had our  operations  disrupted  with any Year  2000  issues  and do not
expect  any  material  disruptions  or  significant  costs  related to Year 2000
issues.


                                       22
<PAGE>


Item 7.  Financial Statements
-----------------------------

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
Genetic Vectors, Inc.
(A Development Stage Company)

We have  audited the  accompanying  balance  sheet of Genetic  Vectors,  Inc. (a
Development Stage Company) as of December 31, 1999 and the related statements of
operations,  capital  deficit  and cash  flows  for each of the two years in the
period ended  December 31, 1999 and the  cumulative  period from January 1, 1992
(inception)  through  December  31, 1999.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Genetic  Vectors,  Inc., (a
development  stage  company)  as of  December  31,  1999 and the  results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 1999 and the  cumulative  period from  January 1, 1992  (inception)
through  December 31, 1999 in  conformity  with  generally  accepted  accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the Company's  dependence  on outside  financing and its
losses since inception raise  substantial doubt about its ability to continue as
a going  concern.  Management's  plans  in  regard  to  these  matters  are also
described in Note 2. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainty.




Miami, Florida                                          /s/ BDO Seidman, LLP
March 3, 2000                                           BDO Seidman, LLP


                                       F-1
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                                   BALANCE SHEET

DECEMBER 31,                                                             1999
-------------------------------------------------------------------------------

ASSETS (Notes 4 and 11)

CURRENT
   Cash and cash equivalents                                      $   206,802
   Accounts receivable                                                  5,940
   Inventory                                                            7,081
   Prepaid expenses                                                    50,424
-------------------------------------------------------------------------------

Total current assets                                                  270,247

Equipment and improvements, net (Note 3)                              282,734
Patents and license agreement, net of $40,353 of accumulated
   amortization (Note 9(a))                                           206,611
Restricted cash (Note 5)                                               46,130
-------------------------------------------------------------------------------

                                                                  $   805,722
-------------------------------------------------------------------------------

LIABILITIES AND CAPITAL DEFICIT

CURRENT LIABILITIES
   Accounts payable                                               $   283,965
   Accrued salaries                                                    91,231
   Accrued interest expense                                            54,020
   Other accrued expenses                                               3,230
   Loans payable, net of unamortized discounts(Note 4)                805,412
-------------------------------------------------------------------------------

Total liabilities                                                   1,237,858
-------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Notes 2, 6, 9 and 11)
-------------------------------------------------------------------------------

CAPITAL DEFICIT (NOTES 8 AND 10)
   Common stock, $.001 par value, 10,000,000 shares authorized,
      2,974,843 shares issued and outstanding                           2,975
   Additional paid-in capital                                       8,485,245
   Deficit accumulated during the development stage                (8,920,356)
-------------------------------------------------------------------------------

Total capital deficit                                                (432,136)
-------------------------------------------------------------------------------

                                                                  $   805,722
-------------------------------------------------------------------------------
                                 See accompanying notes to financial statements.


                                       F-2
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                        STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                       CUMULATIVE FROM
                                                       JANUARY 1, 1992
                                                           (INCEPTION)              FOR THE               FOR THE
                                                               THROUGH           YEAR ENDED            YEAR ENDED
                                                          DECEMBER 31,         DECEMBER 31,          DECEMBER 31,
                                                                  1999                 1999                  1998

--------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                      <C>                   <C>
REVENUE:
     Sales                                            $         95,367         $     44,832          $     11,275
     Grants                                                    149,147                    -                35,897
--------------------------------------------------------------------------------------------------------------------

Total revenue                                                  244,514               44,832                47,172
--------------------------------------------------------------------------------------------------------------------

COSTS AND EXPENSES:
     Costs of sales                                              9,188                9,188                     -
     Selling, general and administrative                     5,094,662            1,257,546             1,555,557
     Research and development                                3,104,134              566,036               984,937
     Depreciation and amortization                             327,100              139,233               125,427
--------------------------------------------------------------------------------------------------------------------

Total expenses                                               8,535,084            1,972,003             2,665,921
--------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE) (NOTE 4):
     Amortization of deferred loan costs                      (766,562)           (748,037)             (18,525)
     Interest income (expense), net                            136,776            (131,703)              61,807
--------------------------------------------------------------------------------------------------------------------

Total                                                         (629,786)           (879,740)              43,282
--------------------------------------------------------------------------------------------------------------------

NET LOSS (Note 7)                                     $      (8,920,356)       $ (2,806,911)        $(2,575,467)
--------------------------------------------------------------------------------------------------------------------

Weighted average common shares
     outstanding (Note 8)                                                         2,724,092           2,344,696
--------------------------------------------------------------------------------------------------------------------

Net loss per common share - basic and
  diluted                                                                      $      (1.03)        $     (1.10)
--------------------------------------------------------------------------------------------------------------------
                                 See accompanying notes to financial statements.
</TABLE>


                                       F-3
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   STATEMENTS OF CAPITAL DEFICIT

<TABLE>
<CAPTION>
                                                                                                     DEFICIT
                                                                            ADDITIONAL           ACCUMULATED
                                                                               PAID-IN            DURING THE
                                                  SHARES     AMOUNT            CAPITAL     DEVELOPMENT STAGE            TOTAL
--------------------------------------------------------------------------------------------------------------------------------

<S>                                            <C>         <C>           <C>                   <C>              <C>
Initial capitalization for cash at
   $0.0000625
   per share (Note 8(a))                       1,600,000   $  1,600      $      (1,500)       $           -    $         100

Capital contribution (Note 8(b))                       -          -            500,000                    -          500,000
--------------------------------------------------------------------------------------------------------------------------------

Net loss - year ended December 31, 1992                -          -                  -              (260,484)        (260,484)
--------------------------------------------------------------------------------------------------------------------------------

Net loss - year ended December 31, 1993                -          -                  -              (205,753)        (205,753)
--------------------------------------------------------------------------------------------------------------------------------

Net loss - year ended December 31, 1994                -          -                  -              (318,927)        (318,927)
--------------------------------------------------------------------------------------------------------------------------------

Net loss - year ended December 31, 1995                -          -                  -              (226,666)        (226,666)
--------------------------------------------------------------------------------------------------------------------------------

Issuance of common stock for cash, at
   $5.00 per share, net of offering costs
   of $70,000 (Note 8(c))                        110,000        110            479,990                     -          480,100

Conversion of $413,518 due to parent in
   exchange for 41,352 shares of common
   stock (Note 8(g))                              41,352         42            413,476                     -          413,518

Conversion of $132,822 of accrued payroll
  and consulting to the president and
  chairman of the Board for 13,282 shares
  of common stock (Note 8(g))                      13,282         13            132,809                    -          132,822

Issuance of common stock at $10.00 per
  share, net of offering costs of
  $1,180,249                                      575,000        575          4,569,176                     -        4,569,751
   (Note 8(h))

Stock options granted for services (Note 8(c))         -          -              56,250                     -           56,250
--------------------------------------------------------------------------------------------------------------------------------

Net loss - year ended December 31, 1996                -          -                  -               (393,434)        (393,434)
--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1996                     2,339,634   $  2,340    $     6,150,201     $     (1,405,264)   $   4,747,277

Offering cost refund (Note 8(h))                       -          -               25,500                  -             25,500

Offering costs (Note 8(h))                             -          -               (6,243)                 -            (6,243)


                                       F-4

<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   STATEMENTS OF CAPITAL DEFICIT
                                                                                                     DEFICIT
                                                                            ADDITIONAL           ACCUMULATED
                                                                               PAID-IN            DURING THE
                                                  SHARES     AMOUNT            CAPITAL     DEVELOPMENT STAGE            TOTAL
--------------------------------------------------------------------------------------------------------------------------------

Net loss - year ended December 31, 1997                -          -                  -             (2,132,714)     (2,132,714)
--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1997                     2,339,634   $  2,340    $      6,169,458    $      (3,537,978)   $  2,633,820
--------------------------------------------------------------------------------------------------------------------------------

                                                                                                      DEFICIT
                                                                            ADDITIONAL            ACCUMULATED
                                                                               PAID-IN             DURING THE
                                                  SHARES      AMOUNT           CAPITAL      DEVELOPMENT STAGE            TOTAL
--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1997                     2,339,634   $  2,340    $      6,169,458    $       (3,537,978)  $  2,633,820

Issuance of common stock for services
   (Note 8(k))                                         709          1               5,999                     -          6,000

Issuance of common stock for cash, at
   $5.00 per share (Note 8(l))                       9,500          9              47,491                     -         47,500

Warrants granted for consulting services
   (Note 9(n))                                          -           -             332,500                     -        332,500

Warrants granted for loan financing costs
   (Note 4)                                             -           -             111,150                     -        111,150

Options granted for services rendered
   (Note 8(o))                                          -           -               8,072                     -          8,072

Net loss - year ended December 31, 1998                 -           -                 -               (2,575,467)   (2,575,467)

--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1998                    2,349,843       2,350           6,674,670             (6,113,445)      563,575

Issuance of common stock for cash, at
   $1.00 per share (Note 8(q))                    625,000         625             624,375                     -        625,000

Warrants granted for loan financing costs
   (Note 4)                                            -           -           1,088,500                      -      1,088,500
--------------------------------------------------------------------------------------------------------------------------------


                                       F-5
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   STATEMENTS OF CAPITAL DEFICIT
                                                                                                      DEFICIT
                                                                            ADDITIONAL            ACCUMULATED
                                                                               PAID-IN             DURING THE
                                                  SHARES      AMOUNT           CAPITAL      DEVELOPMENT STAGE            TOTAL
--------------------------------------------------------------------------------------------------------------------------------

Options granted for services rendered
   (Note 8(p))                                         -           -              24,000                      -         24,000

Warrants granted for loan extension (Note 4(a))        -           -              73,700                      -         73,700

Net loss - year ended December 31, 1999                -           -                 -                (2,806,911)   (2,806,911)
--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1999                    2,974,843  $   2,975     $     8,485,245    $         (8,920,356)  $  (432,136)
--------------------------------------------------------------------------------------------------------------------------------
                                 See accompanying notes to financial statements.

                                       F-6
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                        STATEMENTS OF CASH FLOWS

                                                                       CUMULATIVE FROM
                                                                       JANUARY 1, 1992
                                                                           (INCEPTION)           FOR THE           FOR THE
                                                                              THROUGH         YEAR ENDED        YEAR ENDED
                                                                          DECEMBER 31,      DECEMBER 31,      DECEMBER 31,
                                                                                  1999              1999              1998
----------------------------------------------------------------------------------------------------------------------------

<S>                                                                  <C>                   <C>              <C>
OPERATING ACTIVITIES:
   Net (loss)                                                        $      (8,920,356)    $  (2,806,911)   $   (2,575,467)
   Adjustments to reconcile net loss to net cash used
     in operating activities:
       Depreciation and amortization                                           327,100           139,233           125,427
       Amortization of deferred loan costs                                     766,562           748,037            18,525
       Write-off of acquired technology                                         71,250                 -                 -
       Warrants issued for loan extension                                       73,700            73,700                 -
       Consulting services provided for common stock                             6,000                 -             6,000
       Stock options and warrants granted for services                         364,572            24,000           340,572
       (Increase) in accounts receivable                                        (5,940)           (2,320)           (3,620)
       (Increase) in inventory                                                  (7,081)           6,419            (13,500)
       (Increase) in prepaid expenses                                          (50,424)         (27,572)           (22,852)
       (Increase) in restricted cash                                           (46,130)               -            (46,130)
       Increase in accounts payable, accrued liabilities and other             565,269           232,296            45,608
----------------------------------------------------------------------------------------------------------------------------

Total adjustments                                                            2,064,878         1,193,793           450,030
----------------------------------------------------------------------------------------------------------------------------

Net cash used in operating activities                                       (6,855,478)       (1,613,118)       (2,125,437)
----------------------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES:
   Purchase of equipment and improvements                                     (569,481)          (3,504)         (63,240)
   Purchase of certificate of deposit                                         (261,964)               -           (1,366)
----------------------------------------------------------------------------------------------------------------------------

Net cash used in investing activities                                         (831,445)          (3,504)         (64,606)
----------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES:
   Increase due to parent                                                      413,518                -                -
   Proceeds from note payable                                                1,273,500         1,088,500           150,000
   Payment on notes payable                                                    (35,000)               -                 -
   Net proceeds from issuance of common stock                                5,722,450           625,000            47,500
   Capital contribution                                                        500,000                -                 -
   Deferred offering refund                                                     25,500                -                 -
   Deferred offering costs                                                      (6,243)               -                 -
----------------------------------------------------------------------------------------------------------------------------

Net cash provided by (used in) financing activities                          7,893,725         1,713,500           197,500
----------------------------------------------------------------------------------------------------------------------------


                                       F-7
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                        STATEMENTS OF CASH FLOWS

                                                                       CUMULATIVE FROM
                                                                       JANUARY 1, 1992
                                                                           (INCEPTION)           FOR THE           FOR THE
                                                                              THROUGH         YEAR ENDED        YEAR ENDED
                                                                          DECEMBER 31,      DECEMBER 31,      DECEMBER 31,
                                                                                  1999              1999              1998
----------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                           206,802            96,878        (1,992,543)
Cash and cash equivalents at beginning of period                                     -           109,924         2,102,467
----------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                         $           206,802    $      206,802    $      109,924
----------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES:
   Warrants issued in connection with loan financing               $         1,199,650    $    1,088,500   $       111,150
   Conversion of due to parent in exchange for stock               $           413,518    $            -   $             -
   Conversion of accrued wages for stock                           $           132,822    $            -   $             -
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                 See accompanying notes to financial statements.

                                       F-8
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

1.    SUMMARY OF        ORGANIZATION AND BUSINESS
      SIGNIFICANT
      ACCOUNTING        Genetic   Vectors,  Inc.  (the  "Company"),  formerly  a
      POLICIES          subsidiary  of  Nyer Medical Group, Inc.  ("Nyer"),  was
                        incorporated  on  December  28,  1991.  The  Company was
                        organized  to  supply  genetic   engineering  tools  and
                        analytical  kits  to  the  biotechnology  and  molecular
                        biology markets.  The Company's products are intended to
                        allow   biopharmaceutical    companies   to   test   for
                        biopharmaceutical  product  purity  in  compliance  with
                        regulatory standards.  The Company is in the development
                        stage and its operations to date have largely  consisted
                        of the research and  development  of its  products.  The
                        Company had no financial  activities  from  December 28,
                        1991 to December 31, 1991. Accordingly,  January 1, 1992
                        has been used as the inception  date of these  financial
                        statements.

                        These  financial  statements  include  the  specifically
                        identifiable expenses of the Company incurred by Nyer on
                        behalf of the Company.

                        Nyer,  which  previously  owned  74.9% of the  Company's
                        common stock,  distributed to its  shareholders  512,000
                        shares,  representing  32% of the outstanding  shares of
                        the Company's common stock as of May 31, 1996.

                        As discussed in Note 11(a), in January 2000, the Company
                        broadened its product line with its  acquisition  of DNA
                        Services,   Inc.   This  new   product   line   includes
                        oligoplate products.

                        PREPARATION OF FINANCIAL STATEMENTS

                        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  reporting
                        period.   Actual   results   could   differ  from  those
                        estimates.

                        SEGMENT INFORMATION

                        Statement of Financial  Accounting  Standards (SFAS) No.
                        131,  Disclosures  about  Segments of an Enterprise  and
                        Related  Information,  supersedes SFAS No. 14, Financial
                        Reporting  for Segments of a Business  Enterprise.  SFAS
                        No. 131  establishes  standards  for the way that public


                                       F-9
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        companies report information about operating segments in
                        annual  financial  statements and requires  reporting of
                        selected information about operating segments in interim
                        financial  statements  issued  to the  public.  It  also
                        establishes standards for disclosures regarding products
                        and services, geographic areas and major customers. SFAS
                        No. 131 defines  operating  segments as  components of a
                        company about which  separate  financial  information is
                        available  that  is  evaluated  regularly  by the  chief
                        operating  decision  maker in  deciding  how to allocate
                        resources and in assessing performance.

                        The  Company  currently  operates  solely in one line of
                        business.

                        CASH AND CASH EQUIVALENTS

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

                        RESEARCH AND DEVELOPMENT COSTS

                        Expenditures relating to the Company's product research,
                        development and testing are expensed as incurred.


                        EQUIPMENT AND IMPROVEMENTS AND DEPRECIATION

                        Equipment  and   improvements   are  recorded  at  cost.
                        Depreciation is provided over the estimated  useful life
                        of the assets which range from three to ten years.

                        PATENTS AND LICENSE AGREEMENT

                        Patents  and the license  agreement  are carried at cost
                        less accumulated amortization.  Amortization is computed
                        using the straight line method over the estimated useful
                        life of the patents which range from 15.5 to 17 years.

                        The Company continually  evaluates the carrying value of
                        its  patents  and  license  agreement.  Impairments  are
                        recognized when the expected future operating cash flows
                        to be derived from such intangible  assets are less than
                        their carrying values.

                        REVENUE

                        The Company  recognizes revenue from sales upon delivery
                        of the product to a customer.


                                      F-10
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        During  1997 the Company was awarded a grant for $99,897
                        from the  National  Institute of Health and the National
                        Institute of Allergy and  Infectious  Diseases for rapid
                        identification  of fungal species.  The award terminated
                        on February 27, 1998.  In this  connection,  the Company
                        recognized grant revenue aggregating $35,897 and $64,000
                        in 1998 and 1997, respectively.

                        INCOME TAXES

                        Income  taxes are  accounted  for using the  liability
                        approach   under  the   provisions   of  Statement  of
                        Financial  Accounting  Standards No. 109,  "Accounting
                        for Income Taxes."

                        NET LOSS PER COMMON SHARE

                        Net loss per common  share is  calculated  according  to
                        Statement of  Financial  Accounting  Standards  No. 128,
                        "Earnings Per Share" which requires companies to present
                        basic  and  diluted  earnings  per  share.  Net loss per
                        common  share - Basic is based on the  weighted  average
                        number of common shares outstanding during the year. Net
                        loss per common share - Diluted is based on the weighted
                        average  number of common shares and dilutive  potential
                        common shares outstanding during the year.

                        The Company's  potential issuable shares of common stock
                        pursuant  to  outstanding  stock  purchase  options  and
                        warrants  are  excluded  from  the   Company's   diluted
                        computation  for each of the periods  presented as their
                        effect would be antidilutive to the Company's net loss.

                        FAIR VALUE OF FINANCIAL INSTRUMENTS

                        The Company's financial  instruments consist principally
                        of cash  and  cash  equivalents,  receivables,  accounts
                        payable and notes payable.  The carrying amounts of such
                        financial  instruments as reflected in the balance sheet
                        approximate  their  estimated  fair value as of December
                        31, 1999.  The estimated  fair value is not  necessarily
                        indicative of the amounts the Company could realize in a
                        current  market  exchange or of future  earnings or cash
                        flows.

                        RECLASSIFICATION

                        Certain  reclassifications  have  been  made to the 1998
                        statement    of    operations    to   conform   to   the
                        classifications used in 1999.


                                      F-11
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        RECENT ACCOUNTING PRONOUNCEMENTS

                        In June 1999, the Financial  Accounting  Standards Board
                        issued SFAS 133, "Accounting for Derivative  Instruments
                        and Hedging  Activities." SFAS 133 requires companies to
                        recognize all derivatives  contracts as either assets or
                        liabilities  in the balance sheet and to measure them at
                        fair value. If certain  conditions are met, a derivative
                        may be specifically designated as a hedge, the objective
                        of  which  is to  match  the  timing  of  gain  or  loss
                        recognition   on  the   hedging   derivative   with  the
                        recognition  of (i) the changes in the fair value of the
                        hedged asset or liability that are  attributable  to the
                        hedged  risk or (ii) the  earnings  effect of the hedged
                        forecasted transaction.  For a derivative not designated
                        as a hedging instrument,  the gain or loss is recognized
                        in  operations  in the  period of change.  SFAS 133,  as
                        amended  by  SFAS  137,  is  effective  for  all  fiscal
                        quarters of fiscal years beginning after June 15, 2001.

                        Historically,   the  Company   has  not   entered   into
                        derivatives  contracts either to hedge existing risks or
                        for speculative purposes.  Accordingly, the Company does
                        not expect  adoption  of the new  standard on January 1,
                        2002 to affect its financial statements.

2.    LIQUIDITY         The accompanying financial statements have been prepared
                        assuming the Company will  continue as a going  concern.
                        This basis of  accounting  contemplates  the recovery of
                        the  Company's   assets  and  the  satisfaction  of  its
                        liabilities  in the normal course of  operations.  Since
                        inception, the Company has been involved in the research
                        and  design  of  its  product,  the  development  of  an
                        organizational  infrastructure,  and the  performance of
                        preliminary  marketing and promotional  activities.  The
                        Company's   ultimate   ability   to  attain   profitable
                        operations  is  dependent  upon   obtaining   additional
                        financing   adequate   to   complete   its   development
                        activities,  and to achieve a level of sales adequate to
                        support its cost structure.  Through  December 31, 1999,
                        the Company has incurred losses totaling $8,920,356, has
                        been  unable to develop a customer  base for its product
                        and has been in default of certain  loans,  all of which
                        raise  substantial  doubt about the Company's ability to
                        continue as a going concern.

                        Subsequent to December 31, 1999,  the Company has raised
                        $325,000 from loans and equity investments.  On December
                        15, 1999, the Company entered into a non-binding  letter
                        of intent with an underwriter to sell up to $8.4 million

                                      F-12
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        of securities in a firm commitment. On January 15, 2000,
                        the Company acquired DNA Sciences, Inc. This acquisition
                        may  result  in the use of  additional  funds as well as
                        other  unanticipated  expenditures.   There  can  be  no
                        assurance   that  the  Company  will  be  successful  in
                        consummating   its  plans,   or  that  such  plans,   if
                        consummated,   will   enable   the   Company  to  attain
                        profitable operations or continue as a going concern.

3.    EQUIPMENT AND     The Company's equipment is summarized as follows:
      IMPROVEMENTS

                        DECEMBER 31,                                    1999
                        ------------------------------------------------------

                        Laboratory equipment                    $    386,195
                        Computers                                     52,787
                        Phone equipment                               58,826
                        Leasehold improvements                        35,477
                        Office furniture                              22,520
                        Other                                         13,676
                        ------------------------------------------------------

                                                                     569,481

                        Less accumulated depreciation               (286,747)
                        ------------------------------------------------------

                                                                $    282,734
                        ------------------------------------------------------


                        Loans payable as of December 31, 1999 are as follows:

4. LOANS PAYABLE        a) Unsecured loans - 12% interest
                           payable quarterly beginning April
                           1, 1999, with 1% increases per
                           month for each month that any
                           portion of the note remains
                           outstanding after April 1, 1999.     $    150,000

                        b) Loans  - 12%  interest  payable
                           quarterly  beginning April 19, 1999,
                           with 1%  increases  monthly for each
                           month that any portion of
                           the note remains outstanding after
                           January 19, 2000.                         288,500

                        c) Loan - 12% interest payable
                           quarterly beginning June 1, 1999          100,000
                        ----------------------------------------------------

                                      F-13
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        d) Loans - with 12% interest rate
                           payable quarterly, commencing
                           January 19, 2000, with 1%
                           increases per month for each month
                           that any portion of the note
                           remains outstanding after January
                           19, 2000 and April 22, 2000.              700,000
                        ------------------------------------------------------

                                                                $  1,238,500
                        Unamortized debt discount                   (433,088)
                        ------------------------------------------------------

                                                                $    805,412
                        ------------------------------------------------------

                        a) These loans became due on April 1, 1999.  The Company
                           is  currently  in default of this loan for failing to
                           pay the required principal and interest. In the event
                           the  Company  does not make  principal  payments  for
                           these  loans in  accordance  with  the  terms of each
                           obligation,   each  holder  is  entitled  to  receive
                           warrants to purchase a number of shares (as  defined)
                           of the Company's common stock until the obligation is
                           satisfied. In this connection, the Company recorded a
                           deemed  interest  charge of $73,700  during 1999. The
                           fair value of such warrants was  estimated  using the
                           Black-Scholes Option Pricing Model.

                        b) Consists  of two  loans,  the first of which  bears a
                           face amount of $163,500 and became due on January 19,
                           2000.  The  second  loan for  $125,000  became due on
                           January 19,  2000.  The Company is not in  compliance
                           with the payment terms of these loans at December 31,
                           1999.

                        c) The loan is due upon the earlier of April 18, 2000 or
                           the closing of a private placement of securities with
                           gross proceeds of $2 million.

                        d) Consists  of three  loans,  the  first  of which  for
                           $200,000  became due on January 18, 2000.  The second
                           loan for $200,000 became due on January 19, 2000. The
                           Company was not in compliance  with the payment terms
                           of these loans at December 31,  1999.  The third loan
                           for $300,000 is due on April 22, 2000.

                           During 1999,  the Company  borrowed from an investor,
                           $1,088,500 and granted 613,850 warrants with exercise
                           prices  ranging  from  $.01 to $5.50.  Such  warrants
                           expire in 2004.  The exercise  prices of the warrants
                           at the grant date were below the market  price of the
                           Company's  common stock and the value ascribed to the
                           warrants  exceeded the amount borrowed.  Accordingly,


                                      F-14
<PAGE>


                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                           the Company  recorded debt discount up to the amounts
                           borrowed.  The Company  amortizes  the debt  discount
                           over the term of the  related  borrowings,  generally
                           less than one year.  The fair value of such  warrants
                           amounted to $1,088,500  and was  estimated  using the
                           Black-Scholes model.

                           During  1998,  the  Company  borrowed   $150,000  and
                           granted to the lender 30,000  warrants at an exercise
                           price of $6.00,  which expire in 2003. The fair value
                           of the warrants  amounting to $111,150 was  estimated
                           using the Black-Scholes model.

                           On March 3, 2000, the Company negotiated an extension
                           of certain  of the above  past due notes  aggregating
                           $1,235,000  to June 30,  2000.  In exchange  for this
                           extension,  the  Company  agreed  to  cancel  280,000
                           previously  issued  common  stock  warrants and issue
                           280,000  shares of the Company's  common stock to the
                           lenders.  The foregoing  extension  transaction  will
                           result in an  additional  charge to  earnings in 2000
                           for the consideration issued.

                           In addition,  certain of these loans provide that, if
                           $1.5 million is subsequently raised by the Company or
                           the  loan  is  paid  back,  the  Company  will  issue
                           warrants to the lenders to purchase 700,000 shares of
                           common  stock at exercise  prices  ranging from $3 to
                           $5.50 per share.  The Company will record a charge to
                           operations  for an amount equal to the value ascribed
                           to these contingent warrants upon occurrence of these
                           future events.

                           In addition,  the Company has  collateralized  all of
                           its assets for the loans referred to above.
                           (Notes 4(b), (c) and (d)).

                           The Company has paid success fees to consultants  who
                           assisted  in  obtaining  the  financing.   Such  fees
                           aggregated $79,000 in 1999 and $12,000 in 1998.

5.    RESTRICTED CASH   Restricted  cash  represents a certificate of deposit of
                        $46,130  held  as  security  on  a  letter of  credit in
                        connection with the Company's facility lease.

6.    DEPENDENCE ON     Certain  key  components  of the Company's  products are
      LIMITED NUMBER    currently  provided  by  a  limited  number  of sources,
      OF SUPPLIERS      and one component is provided by a single source.

7.    INCOME TAXES      At  December  31,  1999,  the  Company had Federal net
                        operating  losses (NOL) of  approximately  $8,562,000.
                        The NOL  expires  during  the years  2007 to 2014.  In
                        the event of a change  in  ownership  of the  Company,
                        the  utilization  of the NOL  carryforward  in any one
                        year will be subject to  limitation  under Section 382


                                      F-15
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        "Change  of  Ownership  Rules" of the  Internal  Revenue
                        Code.

                        Realization   of  any   portion  of  the   approximately
                        $3,300,000  federal  deferred  tax asset at December 31,
                        1999,  resulting  from the NOL, is not  considered  more
                        likely than not by management,  accordingly, a valuation
                        allowance  has been  established  for the full amount of
                        the tax asset.

                        Net operating loss carryforward         $  3,300,000
                        Less:  valuation allowance                (3,300,000)
                        ------------------------------------------------------

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

                        There are no significant temporary differences.

8.    CAPITAL DEFICIT   a. During 1992,  the Company issued 100 shares of common
                           stock for $100 as the initial  capitalization  of the
                           Company.  In June 1996,  the  Company  issued a stock
                           dividend  in the form of a 15,999 for 1 stock  split.
                           The components of stockholders'  deficit,  all shares
                           and  per  share   amounts  have  been   retroactively
                           adjusted to reflect the stock split. The Company also
                           recapitalized its common stock to 10,000,000  shares,
                           $.001 par value.

                        b. During  1992,  the  Company   received   $500,000  in
                           additional capital contributions.

                        c. In June 1996, in connection with a private placement,
                           the Company issued 110,000 shares of common stock, at
                           $5.00 per share for cash of $480,100  net of offering
                           costs of $70,000.

                           In addition,  during June 1996,  the Company  granted
                           non-plan  stock options to purchase  75,000 shares of
                           common stock at an exercise  price of $5.00 per share
                           (estimated  fair value based upon the price of common
                           stock sold in the private  placement) to a consultant
                           who  became a  director  in August  1996.  Options to
                           purchase  25,000  of  such  shares  were  exercisable
                           immediately.  Options  to  purchase  25,000  of  such
                           shares  became  exercisable  July 24,  1996  upon the
                           execution  of  the  employment   agreement  with  the
                           Company's  Chief  Executive  Officer.  The  remaining
                           25,000 of such  shares  became  exercisable  upon the
                           closing of the Company's initial public offering. The
                           fair value  of such  options amounting to $56,250 was


                                      F-16
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                           charged  to   operations   during  the  period  ended
                           December 31, 1996.

                        d) In July  1996,  the  Company  granted  ten year stock
                           options to purchase  75,000 shares of common stock at
                           120% of the  initial  public  offering  price  to the
                           President.  Options to  purchase  25,000,  25,000 and
                           25,000 of such  shares vest  immediately,  six months
                           after the completion of the initial public  offering,
                           and one year  after  the  completion  of the  initial
                           public offering, respectively.

                        e) In August 1996, the Company entered into a three year
                           employment  agreement  with the Chairman of the Board
                           for a  base  salary  of  $125,000.  Pursuant  to  the
                           agreement,  the  Company  granted  ten  year  options
                           vesting over a three year period,  exercisable during
                           the period of employment,  to purchase 100,000 shares
                           of common stock at an exercise price equal to 120% of
                           the initial public offering price per share of common
                           stock.

                        f) In August 1996, the Company granted ten year options,
                           which  vested  one year  after  the  grant  date,  to
                           purchase 5,000 shares each of common stock at 120% of
                           the initial public offering price to two directors of
                           the Company.

                        g) In  August  1996,  the  Company  converted  the  then
                           outstanding $413,518 due to parent (Nyer) in exchange
                           for  41,352  shares  of  common  stock  and the  then
                           outstanding   $132,822   of   accrued   payroll   and
                           consulting  fees to the President and Chairman of the
                           Board in exchange for 13,282  shares of common stock.
                           The conversion price was $10.00 per share.

                        h) In December 1996,  the Company  completed its initial
                           public  offering.  The offering  consisted of 575,000
                           shares of common  stock which  raised net proceeds of
                           approximately    $4,570,000    (gross   proceeds   of
                           approximately $5,750,000 less underwriting discounts,
                           commissions   and  other  expenses  of  the  offering
                           totaling approximately $1,180,249).  During 1997, the
                           Company incurred  additional offering costs of $6,243
                           and received a refund of $25,500 for  overpayment  of
                           expenses relating to this transaction.

                        i) In  February  1997,  the  Company  granted  ten  year
                           options, which vest one year after the grant date, to
                           purchase 5,000 shares each of common stock at 120% of
                           the initial public offering price to two directors of
                           the Company.


                                      F-17
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        j) In March 1998,  the Company  granted two year options
                           to six of its employees under the 1996 Incentive Plan
                           which vest one year after the grant date, to purchase
                           13,848 shares of common stock at $8.00 per share.

                        k) In June and August of 1998,  the  Company  issued 709
                           shares of common stock at market, valued at $6,000 to
                           an individual for consulting services.

                        l) In June,  July and  August  of 1998,  a board  member
                           exercised options to purchase 5,000,  2,000 and 2,500
                           shares of the Company's  common stock,  respectively,
                           at $5.00 per share.

                        m) In July 1998, the Company granted two year options to
                           five of its employees  under the 1996 Incentive Plan,
                           which vest one year after the grant date, to purchase
                           3,367 shares of common stock at $10.375 per share.

                        n) In September  1998, in connection with the signing of
                           the  consulting  agreement  to  obtain  approximately
                           $3,000,000 in financing for the Company, a consultant
                           to the Company was issued 50,000 warrants to purchase
                           shares  of the  Company's  common  stock at $6.00 per
                           share.  The Company  estimated  the fair value of the
                           warrants at the grant date by using the Black-Scholes
                           option    pricing    model    with   the    following
                           weighted-average   assumptions:   no  dividend  yield
                           percent;  expected  volatility  of  0.488  risk  free
                           interest rate of 5.03%,  and an estimated  life of 10
                           years.  The fair value of such  services  of $332,500
                           was  charged  to  operations  during  the year  ended
                           December 31, 1998.

                        o) In December of 1998,  the Company  granted  five year
                           options,  which vest two months after the grant date,
                           to purchase 4,393 shares of common stock at $5.00 per
                           share to seven  employees  of the  Company in lieu of
                           50% pay for two pay  periods.  The fair value of such
                           options amounting to $8,072 was charged to operations
                           during the period ended  December 31, 1998.  In 1999,
                           the  Company  has  repurchased  2,342  options  for a
                           purchase price of $5,270.

                        p) During 1999,  the Company  granted five year options,
                           which  vest two  months  after  the  grant  date,  to
                           purchase  17,995  shares of common stock at $5.00 per
                           share to five employees of the Company in lieu of 50%
                           of their  salaries  for four  pay  periods.  The fair
                           value of such  options  amounted  to $24,000  and was
                           charged to operations  during the year ended December
                           31, 1999.


                                      F-18
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        q) On May 10, 1999, the Company issued 225,000 shares of
                           common  stock to a private  investor in exchange  for
                           $225,000.  The private  investor paid $1.00 per share
                           for the 225,000 shares,  or $4.75 per share less than
                           the OTC  Bulletin  Board  closing  price of $5.75 per
                           share on May 10, 1999.

                        r) On July 16, 1999,  the Company  issued 400,000 shares
                           of common stock to two private  investors in exchange
                           for $400,000.  These private investors paid $1.00 per
                           share for the 400,000 shares, or $4.75 per share less
                           than the OTC Bulletin  Board  closing  price of $5.75
                           per share on July 16, 1999.

                        s) The  following   reconciles  the  components  of  the
                           earnings per share (EPS) computation:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,                                       1999                                     1998
-----------------------------------------------------------------------------------------------------------------------
                                                                       PER-                                     PER-
                                            LOSS          SHARES      SHARE           LOSS           SHARE     SHARE
                                     (NUMERATOR)   (DENOMINATOR)     AMOUNT    (NUMERATOR)   (DENOMINATOR)    AMOUNT
-----------------------------------------------------------------------------------------------------------------------

<S>                                <C>                <C>        <C>         <C>                <C>         <C>
Loss per common share - basic:     $  (2,806,911)     2,724,092  $   (1.03)  $  (2,575,467)     2,344,696   $  (1.10)


Effect of Dilutive Securities
Options                                        -               -          -              -               -         -
Warrants                                       -               -          -              -               -         -
-----------------------------------------------------------------------------------------------------------------------

Loss per common share - assuming
dilution:                          $  (2,806,911)     2,724,092  $    (1.03) $  (2,575,467)     2,344,696   $  (1.10)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                           Options to purchase 316,650 shares of common stock at
                           prices  ranging from $5.00 to $12.00 per share,  were
                           not  included  in the  computation  of loss per share
                           assuming dilution for 1999 and for 1998 as they would
                           have an  antidilutive  effect.  316,650 options which
                           expire  through  2009,   are  still   outstanding  at
                           December  31,  1999.  Warrants  to  purchase  643,850
                           shares of common stock at prices ranging from $.01 to
                           $6.00 per share were not included in the  computation
                           of loss per common share  assuming  dilution for 1999
                           and  for  1998  as they  would  have an  antidilutive
                           effect.  643,850  warrants  which expire through 2004
                           are outstanding at December 31, 1999.

9.    COMMITMENTS          a) The Company has  acquired  rights to a new nucleic
      AND                     acid  labeling  and  detection   technology   (the
      CONTINGENCIES           "Technology")  pursuant  to  a  license  agreement
                              between  ProVec,  Inc. and the University of Miami
                              and its School of Medicine  which was  assigned to
                              the Company on January 20, 1992. ProVec, Inc., was
                              owned  by the  Company's  Chairman  of the  Board.
                              These rights were acquired  under certain  patents
                              and patent  applications  pursuant  to the license
                              agreement and include the  manufacture of products


                                      F-19
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                              utilizing  the  Technology  and the  marketing and
                              sale  of  such  products.  The  license  agreement
                              provides  for a  royalty  equal to 4% of net sales
                              and  can  expire  or be  terminated  prior  to the
                              Company's   development   of  products  using  the
                              Technology.

                              In addition,  certain of the Company's patents and
                              patent  applications  were  made,  in part,  using
                              federal  funds  provided  by  a  federal   agency,
                              National  Institute of Health  (NIH),  which has a
                              nonexclusive,     nontransferable,     irrevocable
                              license.  Under this nonexclusive license, NIH can
                              use the Technology in federally-funded projects or
                              it can,  if  provided  in a treaty  or  agreement,
                              sublicense  the  Technology.   This   nonexclusive
                              license did not  terminate  with the  licensing of
                              the  Technology  to  the  Company.  NIH  also  has
                              certain  rights  allowing it to grant  licenses to
                              third parties,  even exclusive licenses,  if it is
                              determined  that  practical   application  of  the
                              invention  is not  occurring,  as well as march-in
                              rights to meet unmet health or safety  needs.  The
                              grant of an exclusive license,  or the exercise of
                              march-in rights, would cause the Company to suffer
                              a  material   adverse   effect  on  its  business,
                              financial condition and viability.

                           b) On March 12,  1997,  the  Company  entered  into a
                              Research  and   Development   Agreement  with  the
                              University   of   Miami  to   provide   scientific
                              expertise  in the  identification  and  yeast  and
                              conduct   sequencing   of  yeast   genes  for  the
                              development of sequencing databases.  The contract
                              is renewable annually and provides for the Company
                              to  pay  the  University  of  Miami  approximately
                              $15,000 each month for salaries of scientists  and
                              supplies.

                           c) On  June  1,  1998,  the  Company  entered  into a
                              three-year  cooperative  research and  development
                              agreement with the Agricultural  Research Services
                              of the  U.S.  Department  of  Agriculture  for the
                              Development  (ARS) of  "Arrayed  Probes  for Rapid
                              Identification   of   Yeasts".   The   Company  is
                              obligated to pay ARS $192,757  over the three year
                              term of the agreement for technical, supplies, and
                              a  maintenance  contract for a DNA  sequencer.  In
                              addition,  the Company is  obligated to pay ARS 2%
                              of net sales of the related products.

                           d) On July 1, 1999, the Company  entered into a three
                              year employment agreement with the Chief Executive
                              Officer/  President  and  Chairman of the Board of
                              Directors  of the  Company  for a base  salary  of
                              $125,000  and  $132,750,  respectively,  per year.
                              Pursuant to this  agreement,  the Company  granted
                              ten year options, vesting immediately, exercisable
                              up  to   180   days   following   the   employment
                              termination  date to  purchase  10,000 and 10,000,
                              respectively,   shares  of  common   stock  at  an


                                      F-20
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                              exercise price of $5.75.  These agreements provide
                              for  a  bonus  as   determined  by  the  Board  of
                              Directors.

                           e) Minimum   guaranteed   lease   payments   for  the
                              Company's lease are as follows:


                          YEAR ENDED DECEMBER 31,                     AMOUNT
                          ----------------------------------------------------

                             2000                               $    169,000
                             2001                                    174,000
                             2002                                    179,000
                             2003                                    184,000
                             2004                                    190,000
                             Thereafter                              500,000
                          ----------------------------------------------------

                                                                $  1,396,000
                          ----------------------------------------------------

                              After  five  years the  Company  has the option to
                              cancel its lease agreement for a cancellation  fee
                              equal to three months of the then monthly rent. In
                              December  of 1998,  the Company  renegotiated  the
                              lease   reducing   annual   rental   payments   to
                              approximately $164,000 and annual increases of 3%.
                              Rent   expense   for  1999  and  1998   aggregated
                              approximately $188,000 and $192,300, respectively.

                              The  Company  anticipates  purchasing  or  leasing
                              equipment of approximately $500,000 during 2000.

10.   STOCK BASED       At December 31,  1999,  the Company has two stock option
      COMPENSATION      plans which are described below. The Company applies APB
                        Opinion 25,  "Accounting for Stock Issued to Employees,"
                        and related  Interpretations in accounting for the plan.
                        Under APB Opinion 25,  because the exercise price of the
                        Company's  employee  stock options equals or exceeds the
                        market  price  of the  underlying  stock  on the date of
                        grant, no compensation cost is recognized.

                        In August 1996,  the Company  adopted an Incentive  Plan
                        (the "Plan") under which 300,000  shares of common stock
                        are reserved for issuance  upon  exercise of stock based
                        awards including, non-qualified stock options, incentive
                        stock options, stock appreciation rights or for issuance
                        of   restricted   shares  of   common   stock  or  other
                        stock-based awards. The Plan is also authorized to issue
                        short-term cash incentive awards.  The Plan is currently
                        administered by a plan  administrator  which consists of
                        the  Board  of  Directors,   but  may  consist  of  such
                        committees,  officers and/or employees of the Company as
                        the Board may so designate.  The purchase  price of each
                        share of common  stock  purchased  upon  exercise of any
                        option granted is as follows: i) Incentive stock options


                                      F-21
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        shall be equal to or greater  than the fair market value
                        of the  common  stock on the  date of grant as  required
                        under  Section 422 of the  Internal  Revenue  Code,  ii)
                        Options  granted to 10%  holders and  designated  by the
                        Plan  Administrator  as Incentive Stock Options shall be
                        equal to or greater  than 110% of the fair market  value
                        of the  common  stock on the  date of grant as  required
                        under Section 422 of the Internal  Revenue  Code,  (iii)
                        Non-employee  director  options  shall  be  equal  to or
                        greater  than the fair market  value of the common stock
                        on the date of the grant.

                        On December 31, 1999, the Company adopted a Stock Option
                        Plan (the "1999  Plan")  under which  400,000  shares of
                        common stock are reserved for issuance  upon exercise of
                        stock  based  awards  including,   non-statutory   stock
                        options and incentive stock options.  The 1999 Plan will
                        be administered by a plan  administrator  which consists
                        of the  Board  of  Directors,  but may  consist  of such
                        committees,  officers and/or employees of the Company as
                        the Board may so designate.  The purchase  price of each
                        share of common  stock  purchases  upon  exercise of any
                        option granted is as follows: i) incentive stock options
                        shall be equal to or greater  than the fair market value
                        of the  common  stock on the  date of grant as  required
                        under  Section  422 of the  Internal  Revenue  Code  ii)
                        incentive  options granted to 10% holders shall be equal
                        to or greater  than 110% of the fair market value of the
                        common  stock on the date of  grant  as  required  under
                        Section 422 of the Internal Revenue Code.

                        FASB   Statement   123,   Accounting   for   Stock-Based
                        Compensation,  requires the Company to provide pro forma
                        information  regarding  net income (loss) and net income
                        (loss)  per  share  as  if  compensation  cost  for  the
                        Company's  stock  option  plan  had been  determined  in
                        accordance  with the fair value based method  prescribed
                        in FASB  Statement  123. The Company  estimates the fair
                        value of each  stock  option at the grant  date by using
                        the  Black-Scholes  option-pricing  model  based  on the
                        following assumptions:

<TABLE>
<CAPTION>
                        Year ended December 31,             1999                 1998
                        -------------------------------------------------------------
                        <S>                        <C>                <C>

                        Risk free interest rate        5.14 - 5.88%          4.4-5.4%
                        Expected life               4.83 - 10 Years   1.5 to 10 Years
                        Expected volatility                    .458       .500 - .568
                        Dividend yield                          0.0               0.0
</TABLE>


                                      F-22
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                        Under the  accounting  provisions of FASB Statement 123,
                        the Company's net loss and net loss per share would have
                        increased to the pro forma amounts indicated below:


                                                         1999         1998
                        ------------------------------------------------------
                        Net loss
                        As reported                $ (2,806,911) $ (2,575,467)
                        Pro forma                    (3,061,911)   (2,842,480)

                        Net loss per common share
                        As reported                $      (1.03)  $    (1.10)
                        Pro forma                         (1.11)       (1.21)

                        A summary of the  status of the  Company's  fixed  stock
                        option plan and non-plan options as of December 31, 1999
                        and 1998 and changes during the years ended is presented
                        below:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,            DECEMBER 31,
                                                                       -----------             ------------
                                                                              1999                     1998
                                                                              ----                 --------
                                                                         WEIGHTED-                WEIGHTED-
                                                                           AVERAGE                  AVERAGE
                                                                          EXERCISE                 EXERCISE
                                                           SHARES            PRICE   SHARES           PRICE
                        --------------------------------------------------------------------------------------
                        <S>                                <C>       <C>            <C>        <C>
                        Outstanding at beginning of year   282,108   $       10.05  345,000    $      10.48
                        Granted                            37,995             6.33   21,608            7.76
                        Exercised                               -                -   (9,500 )          5.00
                        Forfeited                          (3,453 )           5.00  (75,000 )         12.00
                        --------------------------------------------------------------------------------------

                        Outstanding at end of year         316,650            9.55  282,108           10.05
                        --------------------------------------------------------------------------------------

                        Options exercisable at year-end    316,650            9.55  202,166            9.73
                        Weighted-average fair value of
                        options granted during the year    37,995  $          2.74   21,608  $         2.78
                        --------------------------------------------------------------------------------------
</TABLE>

                        The following table summarizes  information  about fixed
                        stock  options  and  non-plan  options   outstanding  at
                        December 31, 1999.

<TABLE>
<CAPTION>
                                                  OPTIONS OUTSTANDING                        OPTIONS EXERCISABLE
                                 ======================================================    ========================

                                                                 WEIGHTED-
                                                        NUMBER     AVERAGE    WEIGHTED-         NUMBER    WEIGHTED-
                                 RANGE OF          OUTSTANDING   REMAINING      AVERAGE    EXERCISABLE      AVERAGE
                                 EXERCISE                   AT CONTRACTUAL     EXERCISE             AT     EXERCISE
                                 PRICES               12/31/99        LIFE        PRICE       12/31/99        PRICE
                                 -------------------------------------------------------------------------------------
                                 <S>                   <C>            <C>          <C>         <C>             <C>
                                 $5.00 - $12.00        316,650        6.14         9.55        316,650         9.55
</TABLE>

11.   SUBSEQUENT           a) On January  15,  2000,  the Company  acquired  DNA
      EVENTS                  Science,  Inc. (DNA) by exchanging  450,000 of its
                              common stock for all the outstanding  common stock


                                      F-23
<PAGE>

                                                           GENETIC VECTORS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)

                                                   NOTES TO FINANCIAL STATEMENTS

                              of DNA. The transaction will be accounted for as a
                              purchase business  combination;  accordingly,  the
                              results of operations of DNA will be  consolidated
                              in the  Company's  financial  statements  for  the
                              period beginning with the acquisition date.

                           b) On February  11,  2000,  the  Company  borrowed an
                              additional  $250,000 from a private investor.  The
                              loan bears  interest at 12% with interest  payable
                              quarterly,  commencing on April 22, 2000. On March
                              3, 2000,  the private  investor  extended  the due
                              date of the  principal  and  interest  to June 30,
                              2000. The loan is secured by substantially  all of
                              the  Company's  assets.  In addition,  the Company
                              issued to the lender, warrants to purchase 100,000
                              shares of  common  stock at an  exercise  price of
                              $1.00 per share.  These warrants were  immediately
                              exercisable. The closing price of the common stock
                              on February 11, 2000 was $7.25.  In  addition,  if
                              $1.5 million is subsequently raised or the loan is
                              paid back,  the Company  will be required to issue
                              warrants  to  purchase  125,000  shares  of common
                              stock at an exercise price of $3.00 per share.  In
                              connection  with this loan, the Company granted to
                              the consultant  assisting it with the transaction,
                              warrants to purchase 30,000 shares of common stock
                              at an  exercise  price  of  $3.00  per  share  for
                              assisting  the  Company to obtain  the  financing.
                              These warrants are immediately exercisable.

                           c) On March 2, 2000,  the  Company  borrowed  $75,000
                              from a private  investor.  The loan bears interest
                              at 12%.  The  principal  and  interest  are due on
                              in September,  2000.  Prior  to the payment of the
                              principal   balance  of  the  loan,   the  private
                              investor may convert,  at his option,  all amounts
                              due  into   shares  of  the  common   stock  at  a
                              conversion  rate of $5.00 per share.  In addition,
                              warrants  were to purchase  7,500 shares of common
                              stock were  issued at an  exercise  price of $6.20
                              per share.  In the event of  default,  the note is
                              convertible  into  additional  shares (as defined)
                              and  the   investor  is  entitled  to   additional
                              warrants to purchase shares (as defined).


                                      F-24
<PAGE>


Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure
--------------------------------------------------------------------------------

      None.

                                    PART III

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

      Our present directors and executive officers are as follows:

       Name                             Age             Position
       ----                             ---             --------
       Mead M. McCabe, Sr., Ph.D....    63   Chairman of the Board of Directors
       Mead M. McCabe, Jr...........    34   CEO, Secretary, Designated Chief
                                                Financial Officer and Director
       Eric Wilkinson...............    41   President and Director
       Mark E. Burroughs ...........    43   Director
       Jack W. Fell, Ph.D. .........    67   Director
       Michael C. Foley.............    56   Director

      The following is a brief description of the background of the officers and
directors of our company.

      Mead M. McCabe,  Sr., Ph.D. is the founder of our company and the inventor
of the EpiDNA  technology.  Dr. McCabe is the Chairman of the Board of Directors
of our company.  He holds a B.S. in Zoology from  Pennsylvania  State University
and a Ph.D. in Biology from the  University of Miami.  From 1972 to 1999, he was
on the faculty of the  University  of Miami  School of  Medicine.  Dr.  McCabe's
research interests center on the molecular  mechanisms of microbial diseases and
he has taught courses in molecular pathogenesis. Dr. McCabe served four years on
the Oral Biology and Medicine Study Section at the National Institutes of Health
and has consulted  for the NIH on numerous  other  occasions  since 1976. He has
been awarded several NIH research  grants,  including a recent S.B.I.R.  Phase I
grant.  Dr. McCabe has been Chairman of since our  inception.  Dr. McCabe is the
father of Mead M. McCabe, Jr.

      Mead M.  McCabe,  Jr.  is the Chief  Executive  Officer,  Chief  Financial
Officer and Secretary of our company and is responsible for the execution of our
company's  corporate strategy.  Mr. McCabe has a B.S. in International  Business
from Auburn  University  and a dual  M.B.A.  in both  Finance and  International
Business from the University of Miami.  Mr. McCabe joined us in September  1993.
Prior to that, Mr. McCabe was a financial  consultant with Merrill Lynch for two
years.  Mr.  McCabe is the son of Dr.  McCabe.  Mr.  McCabe became a director on
October 16, 1993.

      Eric  Wilkinson has been the President of our company and President of our
wholly-owned subsidiary,  Genetic Vectors of California,  Inc. since January 17,
2000. Mr. Wilkinson is responsible for our company's daily operations, including
business  development,  sales and marketing  and  manufacturing.  Mr.  Wilkinson
became a  director  on  January  18,  2000.  He served as the  President  of DNA
Sciences,  Inc.  since its  inception in March 1997.  Between  December 1995 and
February 1997,  Mr.  Wilkinson was President of Immune  Complex  Corporation,  a
biotechnology  company  specializing in DNA diagnostics,  drug  metabolism,  and
immunodiagnostics.  Between June 1996 and February 1997, Mr. Wilkinson served as
Director of Chemistry with Synthetic Genetics, a biotechnology  company involved
in the  development of DNA diagnostic  kits.  Mr.  Wilkinson  received a B.S. in
Biology from the University of California in San Diego in 1982 and has served in
senior  management and product  development  positions in several  biotechnology
companies.

      Mark E.  Burroughs  has  served as a  director  since  March  1995.  He is
currently a principal  of  Burroughs  Properties,  L.L.C.,  a full  service real
estate  development,  brokerage and asset  management  concern.  He has been the
Managing  Partner/Broker-In-Charge of Diversified Holdings International,  Inc.,
an  investment  and venture  capital firm with primary  holdings in real estate,


                                       24
<PAGE>


management  consulting,  computer software and wine making since 1984. From 1988
to 1991 Mr. Burroughs also represented Stiles Corporation/Tribune  Company Joint
Venture as  Owner's  Representative/Senior  Development  Manager,  managing  the
development of the New River Center in Fort Lauderdale,  Florida. He also served
from 1980 to 1983 as Vice President and Project  Manager of Cheezem  Development
Corp., a publicly held real estate development and asset management company.

      Jack W. Fell,  Ph.D.  has served as a director  since February 1997. He is
currently a professor of  Microbiology  at the University of Miami's  Rosenstiel
School of Marine and  Atmospheric  Science and has served in that capacity since
1977. Dr. Fell has a B.S. in Biology from  Northwestern  University,  an M.S. in
Marine Biology from the  University of Miami's  Institute of Marine  Science,  a
Ph.D. in  Microbiology  from the  University  of Miami's  School of Medicine and
Institute  of Marine  Science  and a  post-doctorate  in  Microbiology  from the
University of California, Davis.

      Michael  C.  Foley has  served as a director  since  January  1998.  He is
currently a Senior Vice President and Director of Janney Montgomery Scott, Inc.,
an investment  banking firm,  where he has been  employed  since 1994.  Prior to
these  positions he served as President  and Chief  Executive  Officer of Foley,
Mufson Howe & Company,  an investment banking firm, from 1992 to 1994. Mr. Foley
has worked in the  security  industry  for over  twenty-five  years.  He is past
Chairman of the Securities Industry Association's Mid-Atlantic Division and past
President of the Bond Club of Philadelphia. Mr. Foley is a graduate of Villanova
University  and received a Masters  Degree in Business  Administration  from the
University of Pittsburgh.

      Resignations of Directors. Allyn L. Goulb and James A. Joyce resigned from
our Board of Director on  December 4, 1998 and March 5, 1999,  respectively.  We
have filled one of these vacancies by nominating  Eric Wilkinson.  The remaining
vacancy has not been filled.

      Election of Directors and Executive  Officers.  Our executive officers are
elected  annually by the Board of Directors  and serve at the  discretion of the
Board of Directors. Our directors are elected by the shareholders of our company
and hold office until the first annual meeting of  shareholders  following their
election or appointment  and until their  successors  have been duly elected and
qualified. We have never held a shareholder meeting.

      Pursuant to an agreement  with the  underwriter  which managed our initial
public  offering,  we have agreed that this underwriter may designate one member
of the Board of Directors.  The underwriter has chosen not to designate director
since its previous  designee,  James Joyce,  resigned on March 5, 1999 to pursue
other interests.  The underwriter's designee's service on the Board of Directors
will be subject to the approval of the holders of a majority of the  outstanding
shares of our common stock.

      In  connection   with  our   acquisition  of  DNA  Sciences,   the  former
shareholders  of DNA Sciences are entitled to nominate one director to our Board
of Directors. This person is Eric Wilkinson.

Indemnification of Officers and Directors

      Pursuant to authority conferred by applicable Florida law, our Articles of
Incorporation and By-laws provide that our directors, officers, and employees be
indemnified to the fullest extent permitted by Florida law.

Committees of the Board of Directors

      Mark  Burroughs  serves as the sole  member of the  Audit  Committee.  The
functions of the Audit Committee are to: (1) recommend  annually to our Board of
Directors the appointment of our independent  auditors,  (2) discuss and review,


                                       25
<PAGE>


in  advance,  the scope and the fees of the annual  audit and review the results
thereof with the independent auditors, (3) review and approve non-audit services
of the  independent  auditors,  (4) review  compliance  with our existing  major
accounting  and  financial  reporting  policies,  (5) review the adequacy of our
financial  organization,  and (6) review  management's  procedures  and policies
relating to the adequacy of our internal accounting controls and compliance with
applicable laws relating to accounting practices.

      Mark  Burroughs  serves as the sole member of our  Compensation  and Stock
Option Committee (the "Compensation  Committee") which is responsible for making
recommendations to our Board of Directors  regarding  compensation  arrangements
for our  officers  and for  making  recommendations  to our  Board of  Directors
regarding  the  adoption of any  employee  benefit  plans and the grant of stock
options or other benefits under such plans.

Section 16(a) Beneficial Ownership Reporting Compliance

      We are aware of the following  instances between January 1, 1999 and March
30, 2000, when an executive officer,  director or owner of more than ten percent
of the  outstanding  shares of common  stock  failed  to comply  with  reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934:

      o   Mr. McCabe, Jr. failed to timely file a Form 4 in connection  with the
grant on July 1, 1999 of options to purchase  up to 10,000  shares of our common
stock.

      o   Mr. McCabe, Sr. failed to timely file a Form 4 in connection  with the
grant on July 1, 1999 of options to purchase  up to 10,000  shares of our common
stock.

      o   Mr. Wilkinson failed to timely  file a Form 3 in  connection  with his
receipt of 135,000  shares of our common stock on January 17,  2000,  as well as
the grant of options to purchase up to 75,000 shares of common stock.

      o   Orbiter Fund,  Ltd.  failed to timely file a Form 3 in connection with
its purchase of 130,000 shares of common stock and warrants to purchase  250,000
shares of common stock.

Item 10. Executive Compensation
-------------------------------

Compensation of Directors

      Non-employee  directors receive $500 plus expenses for attendance at Board
of Director  meetings in person and by telephone.  Directors are  reimbursed for
all  out-of-pocket  expenses  incurred  in  attending  meetings  of the Board of
Directors and committees thereof.

      Our  1996  Incentive  Plan  (the  "1996  Incentive  Plan")  provides  that
directors who are not employees are automatically  granted an option to purchase
5,000 shares of our common stock in  connection  with their  appointment  to the
Board of  Directors.  Such  options  will vest  after one year of service on the
Board of Directors. The options granted to non-employee directors (Mr. Burroughs
and Dr.  Fell) have an exercise  price of $12.00 per share (120% of the offering
price in our IPO). Options to purchase 5,000 shares of common stock were granted
to Mr.  Michael  Foley on  January  12,  1998 (the  date he joined  the Board of
Directors) at an exercise price of $7.75.  Options granted in the future will be
priced at no less than 100% of the common  stock's fair market value on the date
of the grant.  Options granted to non-employee  directors will be  non-statutory
options and will become  exercisable  after one year of service on the Board and
will be  exercisable  for ten  years  from the date of the  grant,  except  that
options  exercisable  at the time of a  director's  death may be  exercised  for
twelve months  thereafter.  Under the terms of the Incentive  Plan,  neither the
Board of Directors  nor any  committee  of the Board of Directors  will have any
discretion with respect to options granted to directors.

Executive Compensation

      The following table shows all the cash compensation paid by us, as well as
certain  other  compensation  paid or  accrued,  during the fiscal  years  ended
December 31, 1999, 1998 and 1997 to Mead M. McCabe, Sr., Ph.D.,  Chairman of our
company,  and to  Mead  McCabe,  Jr.,  CEO  and  Secretary  of our  company.  No
restricted  stock  awards,  long-term  incentive  plan payouts or other types of


                                       26
<PAGE>


compensation,  other than the compensation  identified in the chart below,  were
paid to Dr. McCabe or Mr.  McCabe  during  fiscal years 1999,  1998 and 1997. No
other executive  officer earned a total annual salary and bonus for any of these
years in excess of  $100,000.  The  summary  compensation  table  which  follows
includes all payments to Dr. McCabe and Mr.  McCabe for fiscal years 1999,  1998
and 1997.

<TABLE>
<CAPTION>
                                  Annual Compensation            Long-Term Compensation
                                  -------------------            ----------------------
                                                                    Awards           Payouts
                                                                    ------           -------
                                                    Other        Restricted
                                                    Annual         Stock        Options/    LTIP       All Other
Name and                         Salary   Bonus  Compensation(1)  Award(s)      SARs(2)   Payouts     Compensation
Principal Position       Year      ($)     ($)        ($)           ($)          ($)       ($)           ($)
------------------       ----      ---     ---        ---           ---          ---       ---           ---
<S>                      <C>    <C>        <C>      <C>             <C>         <C>        <C>           <C>

Mead M. McCabe, Sr.,     1999   $146,129   -0-      $6,000          -0-         10,000     -0-           -0-
Ph.D., Chairman of the   1998   $125,000   -0-                      -0-           -0-      -0-           -0-
Board of Directors       1997   $125,000   -0-                      -0-           -0-      -0-           -0-

Mead M. McCabe, Jr.,     1999   $126,692   -0-      $5,250                      10,000     -0-           -0-
CEO, CFO and Secretary   1998    $73,558   -0-        -0-           -0-           -0-      -0-           -0-
                         1997    $75,866   -0-        -0-           -0-           -0-      -0-           -0-

-----------------

(1) This  other  annual  compensation  represents  a $750 per  month  automobile
    allowance.

(2) These  options were granted on July 1, 1999,  and have an exercise  price of
    $5.75 per share. These options are fully vested. All of these grants are for
    options to purchase our common stock. No SAR's were granted.
</TABLE>


<PAGE>


                        AGGREGATED OPTIONS/SAR EXERCISES
                             IN LAST FISCAL YEAR AND
                      FISCAL YEAR END OPTIONS/SAR VALUES(1)


<TABLE>
<CAPTION>
                                                     Number of Securities        Value of
                                                         Underlying             Unexercised
                          Shares                        Unexercised             In-the-Money
                       Acquired on      Value          Options/SAR's at       Options/SAR's at
        Name             Exercise    Realized ($)      Fiscal Year End        Fiscal Year End
-----------------------------------------------------------------------------------------------

<S>                        <C>          <C>          <C>                           <C>
Mead M. McCabe, Sr.        -0-          -0-          Exercisable: 110,000          -0-

Mead M. McCabe, Jr.        -0-          -0-          Exercisable:  85,000          -0-
</TABLE>
---------------------------------
(1) These grants represent  options to purchase common stock. No SAR's have been
    granted.
(2) None of these options were in-the-money as of December 31, 1999.

      On June 9, 2000,  we granted the  following  options:

      o     To Mead M. McCabe,  Sr.,  the  Chairman of our  company,  options to
            purchase up to 100,000  shares of common stock at an exercise  price
            of $6.03125 per share. These options vest one-third  immediately and
            one-third  on each of the  second  and  third  anniversaries  of Dr.
            McCabe's 1999 employment  agreement.  These options may be exercised
            within ten years of the date of grant.

      o     To Mead M. McCabe,  Jr., the Chief Executive Officer of our company,
            options  to  purchase  up to  100,000  shares of common  stock at an
            exercise  price of $6.03125 per share.  These options vest one-third
            immediately   and   one-third  on  each  of  the  second  and  third
            anniversaries  of Mr.  McCabe's  1999  employment  agreement.  These
            options may be exercised within ten years of the date of grant.

      o     To Mark  Burroughs,  a director of our company,  options to purchase
            17,500  shares of common stock at an exercise  price of $6.03125 per
            share.  12,500 of these options vest  immediately  and 5,000 vest in
            March 2001.  These options may be exercised  within ten years of the
            date of grant.

      o     To Jack Fell, a director of our company,  options to purchase 12,500
            shares of common  stock at an exercise  price of $6.03125 per share.
            7,500 of these  options  vest  immediately  and 5,000  vest in March
            2001. These options may be exercised within ten years of the date of
            grant.

      o     To Michael  Foley,  a director of our  company,  options to purchase
            10,000  shares of common stock at an exercise  price of $6.03125 per
            share.  5,000 of these  options vest  immediately  and 5,000 vest in
            January 2001. These options may be exercised within ten years of the
            date of grant.

      On January 17, 2000, we granted the following options under our 1999 Stock
Option Plan:

      o     To Eric Wilkinson, options to purchase up to 75,000 shares of common
            stock at an exercise  price of $7.25 per share.  These  options vest
            one-third in one year, one-third in two years and one-third in three
            years.  These options may be exercised  within ten years of the date
            of grant.

      o     To Jerome  Streifel,  options  to  purchase  up to 60,000  shares of
            common stock at an exercise price of $7.25 per share.  These options
            vest one-third in one year,  one-third in two years and one-third in
            three years.  These options may be exercised within ten years of the
            date of grant.


Employment Agreements

      Effective July 1, 1999, our company and Mead M. McCabe, Jr. entered into a
new  employment  agreement  pursuant to which Mr. McCabe will serve as the Chief
Executive  Officer.  The  agreement  has a three year term and pays Mr. McCabe a
base  salary of  $125,000,  plus  annual  cost of living  adjustments  and other
increases to be determined by the Board of Directors. Mr. McCabe also receives a
monthly automobile allowance of $750. Mr. McCabe was granted options to purchase
10,000  shares of common  stock at an exercise  price of $5.75 per share.  These
options are immediately  exercisable.  In addition, Mr. McCabe is entitled to an
annual  bonus in an  amount to be  determined  by the  Board of  Directors.  The
agreement further provides that Mr. McCabe will devote his full working time and
efforts to the business and affairs of our company.  The agreement also provides
that upon  termination  of  employment  without  "cause" or  termination  by the
executive for "good reason" (which includes a change of control),  the executive
is entitled to receive,  in addition to all accrued or earned but unpaid salary,
bonus or benefits,  an amount equal to two times the compensation such executive
would be entitled to receive in the then  current  fiscal year,  including  base
salary and  incentive  bonus  compensation.  For the purposes of the  employment
agreement,  the amount of incentive bonus  compensation  such executive would be
entitled  to receive in the then  current  fiscal  year is equal to the  largest
amount  accrued for any of the two most recently  completed  fiscal  years.  The
agreement  also provides that the executive  will not compete with us during his
employment and for one year thereafter.

      Effective July 1, 1999, our company and Mead M. McCabe, Sr. entered into a
new employment agreement pursuant to which Dr. McCabe will serve as the Chairman
of the Board of  Directors.  The  agreement  has a three  year term and pays Dr.
McCabe a base salary of  $132,750,  plus annual cost of living  adjustments  and
other  increases to be  determined  by the Board of  Directors.  Dr. McCabe also
receives a monthly automobile  allowance of $750. Dr. McCabe was granted options
to purchase  10,000  shares of common  stock at an  exercise  price of $5.75 per
share.  These options are immediately  exercisable.  In addition,  Dr. McCabe is
entitled  to an  annual  bonus in an  amount  to be  determined  by the Board of
Directors.  The agreement  further provides that Dr. McCabe will devote his full
working  time and  efforts  to the  business  and  affairs of our  company.  The
agreement also provides that upon  termination of employment  without "cause" or
termination  by the  executive  for "good  reason"  (which  includes a change of


                                       28
<PAGE>


control),  the  executive is entitled to receive,  in addition to all accrued or
earned but unpaid  salary,  bonus or benefits,  an amount equal to two times the
compensation  such  executive  would be entitled to receive in the then  current
fiscal year,  including base salary and incentive  bonus  compensation.  For the
purposes of the employment agreement, the amount of incentive bonus compensation
such  executive  would be entitled to receive in the then current fiscal year is
equal to the largest amount  accrued for any of the two most recently  completed
fiscal years.  The agreement  also provides that the executive  will not compete
with us during his employment and for one year thereafter.

      Effective January 17, 2000, our company and Eric Wilkinson entered into an
employment agreement pursuant to which Mr. Wilkinson will serve as the President
of our company and our wholly-owned  subsidiary,  Genetic Vectors of California,
Inc. The agreement has a two-year term which may be renewed on its  then-current
terms by us for subsequent one year extension terms. Mr. Wilkinson's base salary
is $125,000 per year, plus a bonus as determined by the Board of Directors.  Mr.
Wilkinson  also received  options to purchase up to 75,000 shares at an exercise
price of $7.25 per share.  The  agreement  requires Mr.  Wilkinson to devote his
full working time and efforts to our company.  Mr.  Wilkinson  has agreed not to
compete with us during his employment and for two years thereafter.

1999 Stock Option Plan

      Overview of the Incentive Plan

      Incentive  compensation for non-employee  directors,  executives and other
key  employees is provided  under our 1999  Incentive  Plan.  The purpose of the
Incentive  Plan is to (a) increase the  proprietary  and vested  interest of our
non-employee  directors in the growth and performance of our Company, (b) assist
in attracting and retaining highly competent employees, (c) provide an incentive
for  motivating  selected  officers and other key employees of our Company,  (d)
achieve long-term  corporate  objectives and (e) enable cash incentive awards to
qualify as performance-based for purposes of the tax deduction limitations under
Section 162(m) of the Internal Revenue Code of 1986, as amended.

      The Incentive Plan is  administered by the  Compensation  Committee of the
Board  of  Directors  of  our  Company.   Eligible   participants   include  our
non-employee  directors  and such  officers and other key  employees as the plan
administrator  may designate from time to time. The Incentive Plan will continue
in  effect  until  terminated  by its  terms  or,  if  earlier,  by the Board of
Directors.

      Administration

      The  Incentive  Plan is  administered  by a plan  administrator,  which is
currently  the  Compensation  Committee  of the  Board  of  Directors.  The plan
administrator has been granted exclusive and final authority under the Incentive
Plan with  respect  to all  determinations,  interpretations  and other  actions
affecting the Incentive Plan and its participants.

      Shares Subject to the Incentive Plan

      Three hundred  thousand  shares of our common  stock  have been  initially
authorized to be issued under the Incentive Plan. Such authorized shares will be
appropriately adjusted to reflect adjustments (if any) to our capital structure.


                                       29
<PAGE>


1996 Stock Option Plan

      Overview of the Incentive Plan

      Incentive  compensation for non-employee  directors,  executives and other
key  employees is provided  under our 1996  Incentive  Plan.  The purpose of the
Incentive  Plan is to (a) increase the  proprietary  and vested  interest of our
non-employee  directors in the growth and performance of our company, (b) assist
in attracting and retaining highly competent employees, (c) provide an incentive
for  motivating  selected  officers and other key employees of our company,  (d)
achieve long-term  corporate  objectives and (e) enable cash incentive awards to
qualify as performance-based for purposes of the tax deduction limitations under
Section 162(m) of the Internal Revenue Code of 1986, as amended.

      Eligible  participants  of the  Incentive  Plan  include our  non-employee
directors and such officers and other key employees as the Board of Directors of
our company may designate from time to time. The Incentive Plan will continue in
effect until terminated by its terms or, if earlier, by the Board of Directors.

      The Incentive Plan authorizes the plan  administrator  to grant any or all
of the following  types of awards:  (1) stock  options,  including  nonqualified
stock options and incentive stock options,  (2) stock  appreciation  rights, (3)
restricted  shares  of our  common  stock,  (4)  performance  awards,  (5) other
stock-based awards, and (6) short-term cash incentive awards.

      Administration

      The Board of Directors  has been  granted  exclusive  and final  authority
under the Incentive Plan with respect to all determinations, interpretations and
other actions affecting the Incentive Plan and its participants.

      Shares Subject to the Incentive Plan

      Three hundred  thousand shares of our common stock have been authorized to
be issued under the Incentive Plan. Such authorized shares will be appropriately
adjusted to reflect adjustments (if any) to our capital structure.

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

Voting Securities and Principal Holders Thereof

      The  following  table sets  forth,  as of June 5, 2000,  information  with
respect to the beneficial  ownership of our common stock by (i) persons known by
us to beneficially  own more than five percent of the outstanding  shares,  (ii)
each director, (iii) each executive officer and (iv) all directors and executive
officers as a group.

                                                     Common Stock
                                               Beneficially Owned (1), (2)

                                               ----------------------------
Name/Address                                      Number        Percent
------------                                   ----------------------------

Mead M. McCabe, Sr. .................           295,166(2)        7.6%(2)
12901 SW 63rd Ct.
Miami, FL  33156

Mead M. McCabe, Jr. .................           230,293(2)        6.0%(2)
5201 N.W. 77th Avenue
Suite 100
Miami, Florida  33133

Jack W. Fell, Jr., Ph.D. ............        12,500(1),(5)              *
University of Miami-RSMAS
4600 Rickenbacker Causeway
Key Biscayne, Florida  33149


                                       30
<PAGE>


                                                     Common Stock
                                               Beneficially Owned (1), (2)

                                               ----------------------------
Name/Address                                      Number        Percent
------------                                   ----------------------------

Mark E. Burroughs ...................        17,500(1),(5)              *
7440 Six Forks Road, Suite 16
Raleigh, North Carolina  27615

Eric Wilkinson ......................           135,000(6)        3.6%(1)
5201 N.W. 77th Avenue, Suite 100
Miami, Florida  33133

Jerome Streifel .....................           135,000(6)        3.6%(1)
5201 N.W. 77th Avenue, Suite 100
Miami, Florida  33133

All directors and executive officers               825,459          23.3%
as a group(4)(5) ....................

Nyer Medical Group...................       870,215(2),(3)   23.4%(2),(3)
1292 Hammond St.
Bangor, ME  04401

Capital Research, Ltd.(7) ...........              150,000           4.0%
27241 Pasco Peregrino
San Juan Capistrano, California 92675-5041

Orbiter Fund, Ltd.(8) ...............              380,000           9.6%
375 Park Avenue, 20th Floor
New York, New York 10152

Lancer Partners .....................              300,000           8.1%
375 Park Avenue, 20th Floor
New York, New York 10152


------------------------------------------------
*     Less than 1%.

(1)   Applicable  percentage of ownership is based on 3,722,843 shares of common
      stock outstanding as of June 5, 2000 together with applicable  options for
      each  shareholder.  Beneficial  ownership is determined in accordance with
      the rules of the  Commission and generally  includes  voting or investment
      power  with  respect  to  securities.  Shares of common  stock  subject to
      options that are currently  exercisable or  exercisable  within 60 days of
      June 5, 2000 are deemed to be  beneficially  owned by the  person  holding
      such options for the purpose of computing  the  percentage of ownership of
      such  person,  but are not  treated  as  outstanding  for the  purpose  of
      computing the percentage  ownership of any other person.  The common stock
      is the only outstanding class of equity securities of our company.

(2)   Most of these shares are held by Mr. McCabe,  Sr. and his wife,  Marigrace
      McCabe, jointly.  Pursuant to a five-year letter agreement dated March 25,
      1996, Nyer Medical agreed to vote the shares of common stock held by it to
      elect one member of the Board of Directors  designated by Nyer Medical and
      the  remaining  members of the Board of  Directors  as  designated  by Dr.
      McCabe,  Mrs. McCabe and Mr. McCabe.  If, pursuant to this agreement,  the
      beneficial  ownership of Nyer Medical's  Common Stock is attributed to Dr.
      McCabe and Mr.  McCabe,  they would own 1,132,048 and 1,067,175  shares of
      common stock,  respectively.  Their ownership  percentages would be 30.1%,
      and 28.6%,  respectively.  Dr. McCabe,  Sr. has vested options to purchase
      143,333  shares  of common  stock,  of which  33,333  are  exercisable  at
      $6.03125 per share, 100,000 are exercisable at $12.00 per share and 10,000
      are exercisable at $5.75 per share. Mr. McCabe,  Jr. has vested options to
      purchase  118,333 shares of common stock,  of which 33,333 are exercisable
      at  $6.03125  per share,  75,000 are  exercisable  at $12.00 per share and
      10,000 are exercisable at $5.75 per share.


                                       31
<PAGE>


(3)   Includes common stock owned by Nyle International  Corp.  (115,447 shares)
      and Mr. Samuel Nyer (4,228  shares),  which are deemed to be  beneficially
      owned by Nyer Medical.  Mr. Samuel Nyer is the only natural person who may
      be deemed to be the  beneficial  owner of the shares of the  Common  Stock
      held by Nyer Medical.

(4)   Six (6) persons

(5)   Represents  shares  which may be acquired  upon the  exercise of presently
      exercisable stock options.

(6)   Excludes  75,000  and  60,000  shares  of  common  stock  held by  Messrs.
      Wilkinson and Streifel,  respectively.  These options are  exercisable  at
      $7.25 per share. These options vest one-third on each of the first, second
      and third anniversary of the date of the grant.

(7)   Upon the  repayment of loan  proceeds or if $1.5  million is  subsequently
      raised by us, we are  obligated to issue  additional  warrants to purchase
      200,000 shares of common stock,  of which 150,000 are exercisable at $5.50
      per share and 50,000  are  exercisable  at $3.00 per share.  See "Sales of
      Unregistered Securities."

(8)   Includes  130,000 shares of common stock and warrants to purchase  250,000
      shares of common stock, of which 30,000 are exercisable at $0.01 per share
      and 240,000 are exercisable at $1.00 per share. Upon the repayment of loan
      proceeds or if $1.5 million is subsequently raised by us, we are obligated
      to issue additional warrants to purchase 575,000 shares of common stock at
      an  exercise  price  of  $3.00  per  share.  See  "Sales  of  Unregistered
      Securities."

      Nyer Medical Group,  Inc., a Florida  corporation  ("Nyer Medical"),  is a
publicly  held holding  company with various  interests in the medical  products
business.  In addition to its investment in the Company,  its interests  include
distribution   of  medical  and   rehabilitation   supplies  and  equipment  and
distribution of fire, police and rescue supplies and equipment, all primarily in
the New England area.  Nyer  Medical's  common stock is listed and traded on the
NASDAQ SmallCap Market under the symbol "NYER."

      Nyer Medical has entered into an agreement (the "Voting  Agreement") dated
March 25, 1996 with Mead M. McCabe, Sr., Marigrace M. McCabe and Mead M. McCabe,
Jr., (collectively,  the "McCabes"). This agreement provides among other things,
that,  for a period of five years,  Nyer  Medical will vote its shares of Common
Stock to elect (a) one member of the Company's Board of Directors  designated by
Nyer Medical,  and (b) all other Board of Directors  nominees  designated by the
McCabes.  The Voting Agreement will not affect Nyer Medical's rights to vote its
shares of Common Stock in  connection  with other matters on which the Company's
shareholders vote.

      Dr.  McCabe is the  founder of the  Company  and  currently  serves as its
Chairman.  Marigrace McCabe is the wife of Dr. McCabe.  Mead McCabe,  Jr. is the
son of Dr. McCabe, and the nephew of Mr. Foley.

Item 12. Certain Relationships and Related Transactions
-------------------------------------------------------

      Pursuant to an agreement  with the  University  of Miami,  our company has
agreed to pay  approximately  $44,000 of Dr. Fell's,  a director of our company,
salary as an employee of the University of Miami. In exchange,  Dr. Fell devotes
approximately  one-half of his business time to research and development efforts
on behalf of our company.

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

(a)   Exhibits.
<TABLE>
<CAPTION>

Exhibit No.
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----
<S>         <C>                                     <C>                                        <C>

    3.1     Articles of Incorporation of the        Incorporated by reference to Exhibit
            Company, as amended                     No. 3.1 to Registrant's Registration
                                                    Statement (the "Registration
                                                    Statement") on Form SB-2 (Registration
                                                    Number 333-5530-A)

    3.2     By-laws of the Company                  Incorporated by reference to Exhibit
                                                    No. 3.2 to the Registration Statement

    3.3     Amendment to By-Laws                    Provided herewith


                                       32
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

    4.1     Form of Common Stock certificate        Incorporated by reference to Exhibit
                                                    No. 4.1 to the Registration Statement

    4.2     Form of Underwriters' Warrant           Incorporated by reference to Exhibit
                                                    No. 4.2 to the Registration Statement

    4.3     Form of 1996 Incentive Plan             Incorporated by reference to Exhibit
                                                    No. 4.3 to the Registration Statement

    4.4     Form of 1999 Stock Option Plan          Provided herewith

   10.1     License Agreement dated                 Incorporated by reference to Exhibit
            September 7, 1990 between the           No. 10.1 to the Registration Statement
            University of Miami and its School
            of Medicine and ProVec, Inc.

   10.2     Assignment of License Agreement         Incorporated by reference to Exhibit
            dated January 20, 1992 between          No. 10.2 to the Registration Statement
            ProVec, Inc. and EpiDNA, Inc.

   10.3     Agreement between University of         Incorporated by reference to Exhibit
            Miami and its School of Medicine        No. 10.3 to the Registration Statement
            and the Company dated August 21,
            1996

   10.4     Employment Agreement dated              Incorporated by reference to Exhibit
            August 15, 1996 between Mead M.         No. 10.4 to the Registration Statement
            McCabe, Sr. and the Company

   10.5     Stock Option Addendum to Employment     Incorporated by reference to Exhibit
            Agreement dated August 15, 1996         No. 10.5 to the Registration Statement
            between Mead M. McCabe, Sr. and the
            Company

   10.6     Stock Option Addendum to Employment     Incorporated by reference to Exhibit
            Agreement dated August 15, 1996         No. 10.7 to the Registration Statement
            between Mead M. McCabe, Sr. and the
            Company

   10.7     Consulting Agreement dated June 19,     Incorporated by reference to Exhibit
            1996 between James A. Joyce and the     No. 10.10 to the Registration Statement
            Company

   10.8     Letter Agreement dated December 16,     Incorporated by reference to Exhibit
            1994 among Nyer Medical Group,          No. 10.11 to the Registration Statement
            Inc., the Company, Mead M. McCabe,
            Sr. And Mead M. McCabe, Jr.

   10.9     Investors Finders Agreement dated       Incorporated by reference to Exhibit
            June 9, 1994 among Nyer Medical         No. 10.12 to the Registration Statement
            Group, Inc., and the Company and
            Gulf American Trading Company

   10.10    Industrial Real Estate Lease dated      Incorporated by reference to Exhibit
            June 12, 1997 among the Company and     No. 10.13 to the Company's Quarterly
            Jetex Group, Inc.                       Report on Form 10-QSB for the Quarter
                                                    ended June 30, 1997

   10.11    Letter from University of Miami         Incorporated by reference to Exhibit
            dated April 8, 1998                     No. 10.12 to the Company's Annual
                                                    Report on Form 10-KSB for the year
                                                    ended December 31, 1997

   10.12    Promissory Note dated as of             Incorporated by reference to Exhibit
            November 2, 1998 in the Original        No. 10.13 to the Company's Annual
            Principal Amount of $50,000 given       Report on Form 10-KSB for the year
            by the Company to Ms. Patricia A.       ended December 31, 1998
            Gionone


                                       33
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.13    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-2 dated  as of November 2, 1998       No. 10.14 to the Company's Annual
            granted by the Company to Ms.           Report on Form 10-KSB for the year
            Patricia A. Gionone                     ended December 31, 1998

   10.14    Promissory Note dated as of             Incorporated by reference to Exhibit
            November 2, 1998 in the Original        No. 10.15 to the Company's Annual Report
            Principal Amount of $100,000            on Form 10-KSB for the year ended
            given by the Company to Jerome          December 31, 1998
            P. Seiden Irrevocable Trust Dated
            April 22, 1998

   10.15    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-1 dated  as of November 2, 1998       No. 10.16 to the Company's Annual
            granted by the Company to Jerome P.     Report on Form 10-KSB for the year
            Seiden Irrevocable Trust Dated          ended December 31, 1998
            April 22, 1998

   10.16    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-5 dated as of September 3, 1998       No. 10.17 to the Company's Annual
            granted by the Company to Sterling      Report on Form 10-KSB for the year
            Technology Partners, Ltd.               ended December 31, 1998

   10.17    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-4 dated  as of January 19, 1999       No. 10.18 to the Company's Annual
            granted by the Company to Sterling      Report on Form 10-KSB for the year
            Technology Partners, Ltd.               ended December 31, 1998

   10.18    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-7 dated  as of March 9, 1999          No. 10.19 to the Company's Annual
            granted by the Company to Sterling      Report on Form 10-KSB for the year
            Technology Partners, Ltd.               ended December 31, 1998

   10.19    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-3 dated as of January 19, 1999        No. 10.20 to the Company's Annual
            granted by the Company to Capital       Report on Form 10-KSB for the year
            Research, Ltd.                          ended December 31, 1998

   10.20    Promissory Note dated as of January     Incorporated by reference to Exhibit
            19, 1999 in the Original Principal      No. 10.21 to the Company's Annual
            Amount of $163,500 given by the         Report on Form 10-KSB for the year
            Company to Capital Research, Ltd.       ended December 31, 1998

   10.21    Pledge and Security Agreement dated     Incorporated by reference to Exhibit
            as of  January 19, 1999 between the     No. 10.22 to the Company's Annual
            Company and Capital Research, Ltd.      Report on Form 10-KSB for the year
                                                    ended December 31, 1998

   10.22    Registration Rights Agreement dated     Incorporated by reference to Exhibit
            as of January 19, 1999 between the      No. 10.23 to the Company's Annual
            Company and Capital Research, Ltd.      Report on Form 10-KSB for the year
                                                    ended December 31, 1998

   10.23    Promissory  Note dated as of March      Incorporated by reference to Exhibit
            9, 1999 in the Original Principal       No. 10.24 to the Company's Annual
            Amount of $125,000 given by the         Report on Form 10-KSB for the year
            Company  to Capital Research, Ltd.      ended December 31, 1998

   10.24    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-6 dated as of March 9, 1999           No. 10.25 to the Company's Annual
            granted by the Company to Capital       Report on Form 10-KSB for the year
            Research, Ltd.                          ended December 31, 1998

   10.25    Registration Rights Agreement dated     Incorporated by reference to Exhibit
            as of March 9, 1999 between the         No. 10.26 to the Company's Annual
            Company and Capital Research, Ltd.      Report on Form 10-KSB for the year
                                                    ended December 31, 1998


                                       34
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.26    Executive Employment Agreement,         Incorporated by reference to Exhibit
            together with Stock Option              10.26 to the Company's Annual Report on
            Addendum, dated as of July 1, 1999      Amendment No. 1 to the Form 10 KSB for
            between Mead M. McCabe, Jr. and the     the year ended December 31, 1998
            Company

   10.27    Executive Employment Agreement,         Incorporated by reference to Exhibit
            together with Stock Option              10.27 to the Company's Annual Report on
            Addendum, dated as of July 1, 1999      Amendment No. 1 to the Form 10 KSB for
            between Mead M. McCabe, Sr. and the     the year ended December 31, 1998
            Company

   10.28    Executive Employment Agreement,         Provided herewith
            together with Stock Option
            Addendum, dated as of January 17,
            2000 between Jerome Streifel and
            the Company

   10.29    Executive Employment Agreement,         Provided herewith
            together with Stock Option
            Addendum, dated as of January 17,
            2000 between Eric Wilkinson and the
            Company

   10.30    Promissory Note dated as of April       Provided herewith
            19, 1999 in the Original  Principal
            Amount of $100,000 given by the
            Company to Jack Surgent

   10.31    Registration Rights Agreement dated     Provided herewith
            as of April 19, 1999 between the
            Company and Jack Surgent

   10.32    Common Stock Purchase Warrant dated     Provided herewith
            as of April 19, 1999 granted by the
            Company to Jack Surgent

   10.33    Promissory Note dated as of October     Provided herewith
            6, 1999 in the Original  Principal
            Amount  of  $200,000  given by the
            Company  to Orbiter Fund, Ltd.

   10.34    Pledge and Security Agreement dated     Provided hereiwth
            as of October 6, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.35    Registration Rights Agreement dated     Provided herewith
            as of October 6, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.36    Common Stock Purchase Warrant dated     Provided  herewith
            as of October 6, 1999 granted by the
            Company to Orbiter Fund, Ltd.

   10.37    Promissory Note dated as of             Provided  herewith
            November 19, 1999 in Original
            Principal Amount of $200,000 given
            by the Company to Orbiter Fund, Ltd.


                                       35
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.38    Pledge and Security Agreement dated     Provided herewith
            as of November 19, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.39    Registration Rights Agreement dated     Provided herewith
            as of November 19, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.40    Common Stock Purchase Warrant dated     Provided herewith
            as of December 22, 1999 granted by
            the Company to Orbiter Fund, Ltd.

   10.41    Promissory Note dated as of             Provided herewith
            December 22, 1999 in the Original
            Principal Amount of $300,000 given
            by the Company to Orbiter Fund, Ltd.

   10.42    Pledge and Security Agreement dated     Provided herewith
            as of December 22, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.43    Registration Rights Agreement dated     Provided herewith
            as of December 22, 1999 between the
            Company and The Orbiter Fund, Ltd.

   10.44    Common Stock Purchase Warrant dated     Provided herewith
            as of December 22, 1999 granted by
            the Company to The Orbiter Fund, Ltd.

   10.45    Promissory Note dated as of February,   Provided herewith
            2000 in the Original Principal Amount
            of $250,000 give by the Company to
            The Orbiter Fund, Ltd.

   10.46    Pledge and Security Agreement dated     Provided herewith
            as of , 2000 between the Company and
            The Orbiter Fund, Ltd.

   10.47    Registration Rights Agreement dated     Provided herewith
            as of February, 2000 between the
            Company and The Orbiter Fund, Ltd.

   10.48    Stock Purchase Agreement dated as       Provided herewith
            of January 17, 2000 among the
            Company, DNA Sciences, Inc. and the
            shareholders of DNA Sciences, Inc.

   10.49    Common Stock Purchase Warrant dated     Provided herewith
            as of February, 2000 given by the
            Company to The Orbiter Fund, Ltd.


                                       36
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.50    Convertible Promissory Note dated       Provided herewith
            as of March 2, in the Original
            Principal Amount of $75,000 given
            by the to Jack Higgins

   10.51    Common Stock Purchase Warrant dated     Provided herewith
            as of March 2, 2000 between the
            Company and Jack Higgins

   10.52    Convertible Promissory Note dated       Provided herewith
            as of March 7, 2000 in the Original
            Principal Amount of $100,000 given
            by the Company to Frederick &
            Company

   10.53    Common Stock Purchase Warrant dated     Provided herewith
            as of March 7, 2000 between the
            Company and Frederick & Company

   10.54    Convertible Promissory Note in the      Provided herewith
            Original Principal Amount of
            $100,000 dated as of May 8, 2000
            between the Company and Jim Kelly.

   10.55    Common Stock Purchase Warrant dated     Provided herewith
            as of May 8, 2000 between the Company
            and Jim Kelly.

   10.56    Convertible Promissory Note dated       Provided herewith
            as of May 26, 2000 between the
            Company and Jim Kelly.

   10.57    Common Stock Purchase Warrant           Provided herewith
            dated as of May 26, 2000 between
            the Company and Jim Kelly.

    11.     Statement re: computation of            Not applicable
            earnings

    18.     Letter on change in accounting          Not applicable
            principles

    21.     Subsidiaries of the Registrant          Provided herewith

    22.     Published report regarding matters      Not applicable
            submitted to Vote

    23.     Consent of Independent Accountant       Not applicable

    24.     Power of Attorney                       Not applicable

    27.     Financial Data Schedule                 Provided herewith
</TABLE>


                                       37
<PAGE>


(b)   Reports on Form 8-K.

      On  February  14,  2000,  we  filed  a Form  8-K in  connection  with  the
acquisition  of all of the capital  stock of DNA  Sciences,  Inc.,  a California
corporation  ("DNA  Sciences").  The purchase price consisted of the issuance of
450,000 shares of our common stock. The Form 8-K further stated that our company
intended to provide the financial information required by Item 7 of the Form 8-K
within  sixty days from the date the Form 8-K was  required to be filed with the
Securities and Exchange Commission.


                                       38
<PAGE>


                                   SIGNATURES

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

                                    GENETIC VECTORS, INC.


                                    By: /s/ Mead M. McCabe, Jr.
                                        -----------------------
                                           Mead M. McCabe, Jr.
                                           Chief Executive Officer and Secretary

                                    Date: June 9, 2000



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


<TABLE>
<CAPTION>
         Date                   Signature                      Title
         ----                   ---------                      -----

<S>                    <C>                                     <C>
June 9, 2000           By: /s/ Mead M. McCabe, Sr., Ph.D.      Chairman of the Board of Directors
                           ------------------------------      (Principal Executive Officer)
                           Mead M. McCabe, Sr., Ph.D.

June 9, 2000           By: /s/ Mead M. McCabe, Jr.             Chief Executive Officer; Director
                           -------------------------           (Principal Financial Officer;
                           Mead M. McCabe, Jr.                 Principal Accounting Officer)

June 9, 2000           By: /s/ Eric Wilkinson                  President and Director
                           -----------------------
                           Eric Wilkinson

June 9, 2000           By: /s/ Mark E. Burroughs               Director
                           -----------------------
                           Mark E. Burroughs

June 9, 2000           By: /s/ Jack W. Fell, Ph.D.             Director
                           -------------------------
                           Jack W. Fell, Ph.D.

June 9, 2000           By: /s/ Michael C. Foley                Director
                           -----------------------
                           Michael C. Foley
</TABLE>


                                       39
<PAGE>


<TABLE>
<CAPTION>
Exhibit No.
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----
<S>         <C>                                     <C>                                        <C>

    3.1     Articles of Incorporation of the        Incorporated by reference to Exhibit
            Company, as amended                     No. 3.1 to Registrant's Registration
                                                    Statement (the "Registration
                                                    Statement") on Form SB-2 (Registration
                                                    Number 333-5530-A)

    3.2     By-laws of the Company                  Incorporated by reference to Exhibit
                                                    No. 3.2 to the Registration Statement

    3.3     Amendment to By-Laws                    Provided herewith

    4.1     Form of Common Stock certificate        Incorporated by reference to Exhibit
                                                    No. 4.1 to the Registration Statement

    4.2     Form of Underwriters' Warrant           Incorporated by reference to Exhibit
                                                    No. 4.2 to the Registration Statement

    4.3     Form of 1996 Incentive Plan             Incorporated by reference to Exhibit
                                                    No. 4.3 to the Registration Statement

    4.4     Form of 1999 Stock Option Plan          Provided herewith

   10.1     License Agreement dated                 Incorporated by reference to Exhibit
            September 7, 1990 between the           No. 10.1 to the Registration Statement
            University of Miami and its School
            of Medicine and ProVec, Inc.

   10.2     Assignment of License Agreement         Incorporated by reference to Exhibit
            dated January 20, 1992 between          No. 10.2 to the Registration Statement
            ProVec, Inc. and EpiDNA, Inc.

   10.3     Agreement between University of         Incorporated by reference to Exhibit
            Miami and its School of Medicine        No. 10.3 to the Registration Statement
            and the Company dated August 21,
            1996

   10.4     Employment Agreement dated              Incorporated by reference to Exhibit
            August 15, 1996 between Mead M.         No. 10.4 to the Registration Statement
            McCabe, Sr. and the Company

   10.5     Stock Option Addendum to Employment     Incorporated by reference to Exhibit
            Agreement dated August 15, 1996         No. 10.5 to the Registration Statement
            between Mead M. McCabe, Sr. and the
            Company

   10.6     Stock Option Addendum to Employment     Incorporated by reference to Exhibit
            Agreement dated August 15, 1996         No. 10.7 to the Registration Statement
            between Mead M. McCabe, Sr. and the
            Company

   10.7     Consulting Agreement dated June 19,     Incorporated by reference to Exhibit
            1996 between James A. Joyce and the     No. 10.10 to the Registration Statement
            Company

   10.8     Letter Agreement dated December 16,     Incorporated by reference to Exhibit
            1994 among Nyer Medical Group,          No. 10.11 to the Registration Statement
            Inc., the Company, Mead M. McCabe,
            Sr. And Mead M. McCabe, Jr.

   10.9     Investors Finders Agreement dated       Incorporated by reference to Exhibit
            June 9, 1994 among Nyer Medical         No. 10.12 to the Registration Statement
            Group, Inc., and the Company and
            Gulf American Trading Company


                                       40
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.10    Industrial Real Estate Lease dated      Incorporated by reference to Exhibit
            June 12, 1997 among the Company and     No. 10.13 to the Company's Quarterly
            Jetex Group, Inc.                       Report on Form 10-QSB for the Quarter
                                                    ended June 30, 1997

   10.11    Letter from University of Miami         Incorporated by reference to Exhibit
            dated April 8, 1998                     No. 10.12 to the Company's Annual
                                                    Report on Form 10-KSB for the year
                                                    ended December 31, 1997

   10.12    Promissory Note dated as of             Incorporated by reference to Exhibit
            November 2, 1998 in the Original        No. 10.13 to the Company's Annual
            Principal Amount of $50,000 given       Report on Form 10-KSB for the year
            by the Company to Ms. Patricia A.       ended December 31, 1998
            Gionone

   10.13    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-2 dated  as of November 2, 1998       No. 10.14 to the Company's Annual
            granted by the Company to Ms.           Report on Form 10-KSB for the year
            Patricia A. Gionone                     ended December 31, 1998

   10.14    Promissory Note dated as of             Incorporated by reference to Exhibit
            November 2, 1998 in the Original        No. 10.15 to the Company's Annual Report
            Principal Amount of $100,000            on Form 10-KSB for the year ended
            given by the Company to Jerome          December 31, 1998
            P. Seiden Irrevocable Trust Dated
            April 22, 1998

   10.15    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-1 dated  as of November 2, 1998       No. 10.16 to the Company's Annual
            granted by the Company to Jerome P.     Report on Form 10-KSB for the year
            Seiden Irrevocable Trust Dated          ended December 31, 1998
            April 22, 1998

   10.16    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-5 dated as of September 3, 1998       No. 10.17 to the Company's Annual
            granted by the Company to Sterling      Report on Form 10-KSB for the year
            Technology Partners, Ltd.               ended December 31, 1998

   10.17    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-4 dated  as of January 19, 1999       No. 10.18 to the Company's Annual
            granted by the Company to Sterling      Report on Form 10-KSB for the year
            Technology Partners, Ltd.               ended December 31, 1998

   10.18    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-7 dated  as of March 9, 1999          No. 10.19 to the Company's Annual
            granted by the Company to Sterling      Report on Form 10-KSB for the year
            Technology Partners, Ltd.               ended December 31, 1998

   10.19    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-3 dated as of January 19, 1999        No. 10.20 to the Company's Annual
            granted by the Company to Capital       Report on Form 10-KSB for the year
            Research, Ltd.                          ended December 31, 1998

   10.20    Promissory Note dated as of January     Incorporated by reference to Exhibit
            19, 1999 in the Original Principal      No. 10.21 to the Company's Annual
            Amount of $163,500 given by the         Report on Form 10-KSB for the year
            Company to Capital Research, Ltd.       ended December 31, 1998

   10.21    Pledge and Security Agreement dated     Incorporated by reference to Exhibit
            as of  January 19, 1999 between the     No. 10.22 to the Company's Annual
            Company and Capital Research, Ltd.      Report on Form 10-KSB for the year
                                                    ended December 31, 1998

   10.22    Registration Rights Agreement dated     Incorporated by reference to Exhibit
            as of January 19, 1999 between the      No. 10.23 to the Company's Annual
            Company and Capital Research, Ltd.      Report on Form 10-KSB for the year
                                                    ended December 31, 1998


                                       41
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.23    Promissory  Note dated as of March      Incorporated by reference to Exhibit
            9, 1999 in the Original Principal       No. 10.24 to the Company's Annual
            Amount of $125,000 given by the         Report on Form 10-KSB for the year
            Company  to Capital Research, Ltd.      ended December 31, 1998

   10.24    Common Stock Purchase Warrant No.       Incorporated by reference to Exhibit
            W-6 dated as of March 9, 1999           No. 10.25 to the Company's Annual
            granted by the Company to Capital       Report on Form 10-KSB for the year
            Research, Ltd.                          ended December 31, 1998

   10.25    Registration Rights Agreement dated     Incorporated by reference to Exhibit
            as of March 9, 1999 between the         No. 10.26 to the Company's Annual
            Company and Capital Research, Ltd.      Report on Form 10-KSB for the year
                                                    ended December 31, 1998

   10.26    Executive Employment Agreement,         Incorporated by reference to Exhibit
            together with stock Option              10.26 to the Company's Annual Report on
            Addendum, dated as of July 1, 1999      Amendment No. 1 to the Form 10 KSB for
            between Mead M. McCabe, Jr. and the     the year ended December 31, 1998
            Company

   10.27    Executive Employment Agreement,         Incorporated by reference to Exhibit
            together with Stock Option              10.27 to the Company's Annual Report on
            Addendum, dated as of July 1, 1999      Amendment No. 1 to the Form 10 KSB for
            between Mead M. McCabe, Sr. and the     the year ended December 31, 1998
            Company

   10.28    Executive Employment Agreement,         Provided herewith
            together with Stock Option
            Addendum, dated as of January 17,
            2000 between Jerome Streifel and
            the Company

   10.29    Executive Employment Agreement,         Provided herewith
            together with Stock Option
            Addendum, dated as of January 17,
            2000 between Eric Wilkinson and the
            Company

   10.30    Promissory Note dated as of April       Provided herewith
            19, 1999 in the Original  Principal
            Amount of $100,000 given by the
            Company to Jack Surgent

   10.31    Registration Rights Agreement dated     Provided herewith
            as of April 19, 1999 between the
            Company and Jack Surgent

   10.32    Common Stock Purchase Warrant dated     Provided herewith
            as of April 19, 1999 granted by the
            Company to Jack Surgent

   10.33    Promissory Note dated as of October     Provided herewith
            6, 1999 in the Original  Principal
            Amount  of  $200,000  given by the
            Company  to Orbiter Fund, Ltd.

   10.34    Pledge and Security Agreement dated     Provided hereiwth
            as of October 6, 1999 between the
            Company and Orbiter Fund, Ltd.


                                       42
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.35    Registration Rights Agreement dated     Provided herewith
            as of October 6, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.36    Common Stock Purchase Warrant dated     Provided  herewith
            as of October 6, 1999 granted by the
            Company to Orbiter Fund, Ltd.

   10.37    Promissory Note dated as of             Provided  herewith
            November 19, 1999 in Original
            Principal Amount of $200,000 given
            by the Company to Orbiter Fund, Ltd.

   10.38    Pledge and Security Agreement dated     Provided herewith
            as of November 19, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.39    Registration Rights Agreement dated     Provided herewith
            as of November 19, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.40    Common Stock Purchase Warrant dated     Provided herewith
            as of December 22, 1999 granted by
            the Company to Orbiter Fund, Ltd.

   10.41    Promissory Note dated as of             Provided herewith
            December 22, 1999 in the Original
            Principal Amount of $300,000 given
            by the Company to Orbiter Fund, Ltd.

   10.42    Pledge and Security Agreement dated     Provided herewith
            as of December 22, 1999 between the
            Company and Orbiter Fund, Ltd.

   10.43    Registration Rights Agreement dated     Provided herewith
            as of December 22, 1999 between the
            Company and The Orbiter Fund, Ltd.

   10.44    Common Stock Purchase Warrant dated     Provided herewith
            as of December 22, 1999 granted by
            the Company to The Orbiter Fund, Ltd.

   10.45    Promissory Note dated as of February,   Provided herewith
            2000 in the Original Principal Amount
            of $250,000 give by the Company to
            The Orbiter Fund, Ltd.

   10.46    Pledge and Security Agreement dated     Provided herewith
            as of , 2000 between the Company and
            The Orbiter Fund, Ltd.

   10.47    Registration Rights Agreement dated     Provided herewith
            as of February, 2000 between the
            Company and The Orbiter Fund, Ltd.


                                       43
<PAGE>


Exhibit
    No.     Description                             Location                                   Page
    --      -----------                             --------                                   ----

   10.48    Stock Purchase Agreement dated as       Provided herewith
            of January 17, 2000 among the
            Company, DNA Sciences, Inc. and the
            shareholders of DNA Sciences, Inc.

   10.49    Common Stock Purchase Warrant dated     Provided herewith
            as of February, 2000 given by the
            Company to The Orbiter Fund, Ltd.

   10.50    Convertible Promissory Note dated       Provided herewith
            as of March 2, in the Original
            Principal Amount of $75,000 given
            by the to Jack Higgins

   10.51    Common Stock Purchase Warrant dated     Provided herewith
            as of March 2, 2000 between the
            Company and Jack Higgins

   10.52    Convertible Promissory Note dated       Provided herewith
            as of March 7, 2000 in the Original
            Principal Amount of $100,000 given
            by the Company to Frederick &
            Company

   10.53    Common Stock Purchase Warrant dated     Provided herewith
            as of March 7, 2000 between the
            Company and Frederick & Company

   10.54    Convertible Promissory Note in the      Provided herewith
            Original Principal Amount of
            $100,000 dated as of May 8, 2000
            between the Company and Jim Kelly.

   10.55    Common Stock Purchase Warrant dated     Provided herewith
            as of May 8, 2000 between the Company
            and Jim Kelly.

   10.56    Convertible Promissory Note dated       Provided herewith
            as of May 26, 2000 between the
            Company and Jim Kelly.

   10.57    Common Stock Purchase Warrant           Provided herewith
            dated as of May 26, 2000 between
            the Company and Jim Kelly.

    11.     Statement re: computation of            Not applicable
            earnings

    18.     Letter on change in accounting          Not applicable
            principles

    21.     Subsidiaries of the Registrant          Provided herewith

    22.     Published report regarding matters      Not applicable
            submitted to Vote

    23.     Consent of Independent Accountant       Not applicable

    24.     Power of Attorney                       Not applicable

    27.     Financial Data Schedule                 Provided herewith
</TABLE>


                                       44