SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                 FORM 10-KSB

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

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

                For the fiscal year ended: December 31, 2001

                      Commission file number 000-33211

                             VITAL LIVING, INC.
           (Exact name of registrant as specified in its charter)

Nevada                                                            88-0485596
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                           Identification No.)

2800 South Rural Road
Tempe, Arizona                                                         85282
(Address of principal executive offices)                          (zip code)

                Issuer's Telephone Number:    (480) 784-6700

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

       Securities registered under Section 12(g) of the Exchange Act:
                        Common Stock, $.001 par value
                              (Title if Class)

     Indicate by check mark whether the registrant (a) has filed all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding 12 months (or for such shorter period  that  the
registrant  was required to file such reports), and (2) has been  subject  to
such filing requirements for the past 90 days.  Yes     X      No

     Indicate  by  check mark if disclosure of delinquent filers pursuant  to
Item  405  of  Regulation  S-B  is not contained  herein,  and  will  not  be
contained,  to  the  best of registrant's knowledge, in definitive  proxy  or
information  statements incorporated by reference in Part III  of  this  Form
10-K or any amendment to this Form 10-K.  [     ]

     The  number of shares of Common Stock, $0.001 par value, outstanding  on
February  12,  2002,  was  13,626,554  shares,  held  by  approximately   339
stockholders.

     The issuer's revenues for its most recent fiscal year ended December 31,
2001. $90,291

     The  aggregate  market value of the voting and non-voting common  equity
held  by  non-affiliates computed by reference to the  average  bid  and  ask
price, as of March 29, 2002 was $8,140,499.40

     Transitional Small Business Disclosure Format (check one):   Yes  ______
No    X


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PART I

ITEM 1.   DESCRIPTION OF BUSINESS

Organization

     Vital  Living,  Inc.,  a  Nevada corporation (the  "Company"  or  "Vital
Living")  formerly  Nutritional Systems, Inc., formed on  January  22,  2001,
acquired  substantially  all the assets of Vital  Living,  Inc.,  an  Arizona
corporation.   After  the acquisition of Vital Living assets  by  Nutritional
Systems  and  the  subsequent  name change of Nutritional  Systems  to  Vital
Living,  Inc., Vital Living, Inc. merged with VCM Technology Limited ("VCM"),
A company reporting under the Securities and Exchange Act of 1934.

     Pursuant to the Agreement and Plan of Merger dated as of August 16, 2001
between the Company and VCM, the Company acquired all the outstanding  shares
of  common  stock of VCM from the sole stockholder in an exchange  for  5,062
shares of Rule 144 restricted common stock of the Company in a transaction in
which  Vital  Living was the successor corporation.  The benefit provided  to
Vital  Living  was  Vital Living's ability to immediately commence  reporting
under  the  Securities  and Exchange Act of 1934 by  assuming  the  reporting
status  of VCM, which in turn provided Vital Living the ability to  file  for
quotation on the OTC:BB.

Introduction

     The  Company designs, develops and intends to focus distribution of  its
science-based  nutritional supplements ("nutraceuticals") through  mainstream
physicians.   Vital Living's nutraceuticals are designed to  be  incorporated
into a prescribed health regimen recommended by a physician.

     While American consumers spend billions of dollars a year on nutritional
supplements,  most  of  that spending is self-directed and  not  specifically
recommended  by physicians.  Today, there is an increasingly persuasive  body
of evidence showing the efficacy of nutritional supplements and how important
they  can be in promoting health.  Vital Living's strategy is to develop  the
optimal  formulations of nutraceuticals based on the best scientific evidence
and   make   a  convincing  case  to  the  physician  community  that   these
nutraceuticals should be included as an integral part of their standard  care
for patients.

     The  Company currently markets a line of "impact" (nutritional  products
that  will have a positive impact on the general health and well being  of  a
consumer in our opinion) nutritional products, through a proprietary chain of
distribution  to  the  targeted  market  of  consumers  aged  40  and  above.
Additionally,   the   Company  intends  to  develop  proprietary   technology
(technologies that are unique to Vital Living, such as products that  can  be
clinically  substantiated  like  those being  developed  with  Arizona  Heart
Institute)   and  product  distribution  through  the  Mainstream  Healthcare
Physicians  Medicine  (the  general practice of medicine  today,  such  as  a
Medical  Doctor  (MD)  who  would practice traditional  "western  medicine"),
Complementary   and  Alternative  Medicine  [CAM]  (a  generally   recognized
classification  of  treatments  other than those  provided  in  allopathy  by

<PAGE>

Clinical Practitioners, including Naturopathic and Homeopathic Physicians and
alternative  health  practitioners  including  chiropractors,  nutritionists,
doctors  of Traditional Chinese Medicine and others) and traditional  Natural
Products  distribution  channels.  These markets  serve  the  core  users  of
dietary   supplements   and  address  the  unique   challenges   of   product
substantiation and differentiation by closely controlling marketing  messages
and effectively educating the target consumers.  Further, the company intends
to   clinically  substantiate  products  and  technologies  into  this   core
distribution,  while  maximizing profitability with  strategic  supply  chain
management.

      In  the  reported  period Vital Living has beta  tested  its  marketing
program to the naturopathic and homeopathic physicians and alternative health
practitioners including chiropractors, nutritionists, doctors of  traditional
Chinese  medicine and others. Additionally, Vital Living has entered into  an
agreement  with  the Arizona Heart Institute to mutually develop  and  market
nutritional  products to their patients. A distribution  agreement  has  also
been  entered into with AHI Management Hong Kong, Ltd. to sell Vital Living's
nutritional  supplements through AHI Management Hong Kong, Ltd.'s established
distribution  channels. Currently Vital Living sells its  Vital  Living  Pack
which  is  a  daily  multi-nutrient system to an  ongoing  customer  base  in
addition to several of its other products.

     The  following presents overviews of products, services and marketplaces
that  the  Company  intends  to  pursue. Management  is  in  the  process  of
identifying  other  synergistic acquisitions and  or  strategic  partners  to
successfully compete in its targeted market segments.

State of the Market

     Dietary  supplement  use  is  at an all-time  high.   According  to  the
Nutrition  Business  Journal,  70%  of the  adult  American  population  uses
supplements,  with  34% of the population identifying themselves  as  regular
consumers, averaging 1.3 purchases monthly.  The market has grown from nearly
$6  billion  USD  in  1990 to more than $17.5 billion  in  2000.   Since  the
explosive  growth  of  the market with the advent of the  Dietary  Supplement
Health  Education Act (DSHEA) in 1994, the market has experienced an increase
in competition and more price sensitivity, while several segments continue to
see very strong growth.

     The  Company  recognizes  that the nutritional supplement  market  faces
several challenges.  These include the following assumptions:

*     The  mass-market food and drug market is saturated with  products  that
have little brand recognition or loyalty

*    The costs involved in acquiring retail shelf space is prohibitive except
for the most-established of brands

*     Marketers  of  supplements  continue to  deliver  conflicting  messages
regarding  quality and efficacy, resulting in consumer confusion and  serious
consumer concern regarding the benefits of quality ingredients, well-designed
formulations, and optimum dosages

<PAGE>

*     Dietary  supplements are often marketed via media  hype,  resulting  in
short life-cycles and neglect of concern for the consumer's present and long-
term health needs

*     Retail  price alone has emerged as the key differentiator among  brands
for  many  consumers,  especially in the mass retail,  catalog  and  internet
segments, rather than addressing individual health benefits through  consumer
education

     Therefore,  the Company will expand its current consumer  presence  into
channels  where Vital Living's marketing messages are most directly delivered
to  the  consumer,  such as a practitioner or health food  retailer  relaying
Vital  Living's  message  of quality directly to the consumer.  Vital  Living
intends to avoid channels such as drug stores, because the consumer does  not
receive  product  information in this channel from the retailer,  but  rather
must rely on advertising messages, which would require a significant increase
in advertising expenditures.

     The  Company  intends to direct its marketing strategy to focus  on  the
healthcare delivery environments (locations in which healthcare is  provided,
such as hospitals, institutes, clinics and practitioners' offices), including
Mainstream  Healthcare  Physicians,  CAM  and  Traditional  Natural  Products
channels where a number of substantial benefits can be realized:

*     Health  institutes  and  clinics, physicians,  dispensing  health  care
professionals   and  knowledgeable  retailers  can  offer  products   in   an
environment   more  conducive  to  serious  promotion  of  health   concerns,
including; a healthy diet, overall wellness, longevity and quality of life

*    Consumer trust is reinforced and brand loyalty is established

"The Mainstream Healthcare Physicians  (MD) Market"

     Considered  the most coveted and most challenging market for  growth  in
nutrition  is the MD market.  The pharmaceutical model has not only developed
this  channel  into the strongest and most profitable segment  treatment  for
drug  therapies, it has also long been an opponent of the holistic  nutrition
model  (nutrition that is encompassed by the view of Holism, that an  organic
or  integrated whole has a reality independent of and greater than the sum of
its  parts).   Yet  due  to  the pervasive use of  nutrition  and  the  ever-
increasing  amount of clinical research substantiating nutritional supplement
alternatives, the MD market recognizes that it will have to address nutrition
in the near future.

     The  company  has thus made an enormous step forward in this  market  by
identifying  and  forging a relationship with a forward-thinking  institution
recognized internationally for its leadership role in modern health therapy.

     The  company has entered into an exclusive definitive agreement with the
Arizona  Heart Institute ("AHI") that will commit them to marketing a jointly
developed  nutritional  supplement, based  on  existing  company  nutritional
technologies and substantiated natural compounds, to help with pre  and  post
operative patient recovery. Under the terms of the AHI agreement, AHI  is  to
act  in  the  capacity  of a strategic partner in the distribution  of  Vital
Living's products and AHI agreed not to promote or endorse any other line  of
nutritional products. Additionally, AHI will provide a marketing platform for
the  sale  of  Vital Living's nutritional products by assisting  in  clinical
trials,  providing  the  AHI logo on the products, providing  AHI's  existing
database,  in  additional to other assistance such  as  the  introduction  to

<PAGE>

competitive heart institutes. AHI, in addition to certain options  set  forth
below will receive a 12% royalty on net revenue on sales to AHI patients, and
6%  on  net  revenues  from competitive heart institutes.  The  term  of  the
agreement  is  3  years.  In addition to the royalty consideration,  AHI  has
received options to purchase 1 million shares of Vital Living stock at  $0.35
per  share, subject to a vesting schedule. 600,000 to vest upon AHI  agreeing
to  the  logo  material. 200,000 will vest when gross aggregate  sales  equal
$1,000,000; an additional 200,000 will vest when gross aggregate sales  equal
$1.5 million. All shares issued under the option vesting above are subject to
a one year lock-up prior to sale, from the date of vesting.

     Additionally, the Company has entered into an exclusive definitive sales
and  distribution  agreement  with  AHI  Management  Hong  Kong,  Ltd.  ("AHI
Management  Hong  Kong, ") to carry and sell the Vital Living  product  line.
Under  the  terms of the AHI Management Hong Kong agreement,  AHI  Management
Hong  Kong  is  to act in the capacity of an exclusive distributor  of  Vital
Living's  products  in  China, Taiwan, and Hong Kong. The  products  will  be
purchased  by  AHI Management Hong Kong for a price 30% over  Vital  Living's
cost.  The  term of the agreement is 5 years. In consideration for acting  as
the  exclusive distributor in the above territories, AHI Management Hong Kong
has  received options to purchase 1 million shares of Vital Living  stock  at
$0.35 per share, subject to a vesting schedule. 300,000 vested on August  21,
2001, the date of the agreement, however the shares are subject to recall  by
Vital  Living  if  gross aggregate sales of the Products does  not  equal  or
exceed  $2  million within the first 30 months. 100,000 will vest when  gross
aggregate sales equal $5,000,000; an additional 200,000 will vest when  gross
aggregate sales equal $8 million; an additional 200,000 will vest when  gross
aggregate  sales equal $12 million; and the remaining 200,000 will vest  when
gross  aggregate sales reach or exceeds $15 million. All shares issued  under
the  option  vesting above are subject to a one year lock-up prior  to  sale,
from the date of vesting.

"The Complementary and Alternative Medicine (CAM) Market Place"

     Clinical Practitioners including Naturopathic and Homeopathic Physicians
(Naturopathic Physicians practice science-based natural medicine, integrating
the  scientific and holistic viewpoints.  Homeopathic Physicians practice the
art  and  the  science  of healing the sick by using  substances  capable  of
causing  the  same  symptoms, syndromes and conditions when  administered  to
healthy people) and alternative health practitioners including chiropractors,
nutritionists, doctors of Traditional Chinese Medicine and others  are  often
the  practitioners health seekers go first when confronted with  symptoms  of
disease and degeneration caused by the aging process, particularly when  they
feel  their  needs are not being met by the traditional Mainstream Healthcare
Physicians model.

     The  U.S. CAM channel accounts for almost $1 billion per year in  retail
sales  of  nutritional products, and is the strongest growth segment  in  the
natural products industry.  CAM has enjoyed a compound annual growth rate  of
about  20% since the early 90's.  Sales of supplements by practitioners  have
increased  from  $350 million to $1 billion in 1999.  While  the  numbers  of
practitioners selling supplements is growing, there is considerable scope for

<PAGE>

enormous  growth.  In fact Nutrition Business Journal forecasts a minimum  of
10-12% annual growth into 2005.

     Increasingly,  patients  are discovering that  doctor's  orders  include
vitamins,  minerals,  herbs and other nutritional supplements.   It's  common
knowledge  amongst Industry insiders that MD's are the fastest growing  users
of  supplementation.   They  are increasing their  knowledge  base  as  their
patients  come  in  and ask questions and want answers.  Still  chiropractors
command  the  largest  market  share  with  32%,  medical  doctors  19%   and
naturopaths 8%.

     The  company is currently in Beta testing with practitioners in  several
cities  (Phoenix, Tucson, Flagstaff, Sedona, Cottonwood, and  Prescott)  that
provide value added services in the form of:

*    Bone Density Screening and Nutrient Testing for patients

*    Health & Wellness Communication and Health Assessment devices

*     Physician and Patient Targeted Market Research to Evaluate Products and
Technologies for the channel

     The   Company   has  developed  a  comprehensive  line  of   nutritional
supplements that meet the particular needs of health conscious "Baby Boomers"
and  "Integrative Wellness Seekers."  The Company's products are successfully
being  used monthly and endorsed by a variety of professional sports legends,
including  such NFL Quarterback legends as Babe Parilli, Billy  Kilmer,  Mark
Hannah  and  Earl  Morral  -  all of whom resonate  with  the  target  mature
audience.

     All  products are formulated under the direction of a nutrition advisory
board  and a scientific advisory board that includes, among others, PhDs  and
MDs.  These  boards  insist  that  all formulations  utilize  only  credible,
clinically  proven  ingredients  at the dosage  levels  proven  to  work  and
accredited via credible clinical trials. All products are manufactured  under
the same, strict guidelines required in the pharmaceutical industry and every
effort has been made to ensure highest quality, meaningful, effective potency
and product freshness.

      Included  within  the  advisory boards are  three  physicians,  Michael
Davidson, M.D., Howard B. Wernick, MD, and Harold A. Stein, MD. The  advisory
board  meets on an as needed basis, however generally not less than  every  6
months.

     Dr.  Davidson,  a  board-certified  cardiologist  and  Chairman  of  the
Scientific  Advisory  Board, is the Executive Medical Director  of  Protocare
Trials  and  CEO of the Chicago Center for Clinical Research. He is  also  an
associate  professor  in  the  Department of Medicine  and  Director  of  the
Preventive Cardiology Center at Rush-Presbyterian-St. Luke's Medical  Center,
where  he  directs  the multiple risk factor reduction  lipid  clinic.  As  a
prolific   author   and   lecturer  on  lipid   disorders,   nutrition,   and
atherosclerosis,  Dr. Davidson has coordinated over 500  clinical  trials  in
areas  of  preventive cardiology and has published more than 100 articles  in
medical  journals, including the Journal of the American Medical Association,
the   Journal  of  the  American  College  of  Cardiology,  Circulation,  and

<PAGE>

Atherosclerosis.  Dr.  Davidson  is  a fellow  of  the  American  College  of
Cardiology and the American College of Chest Physicians. He holds  a  medical
degree  from Ohio State University in Columbus and has completed a cardiology
fellowship  at  Rush-Presbyterian-St. Luke's Medical Center in  Chicago.   In
consideration  for  his  assistance on the Vital Living  Scientific  Advisory
Board, Dr. Davidson has a two year consulting agreement wherein he was issued
200,000 options at  $1.00 per share, which vest over 16 months.

     Dr.  Howard  Wernick  graduated from the University of  Toronto  Medical
School  in 1958 and has been a family practice doctor for the past 40  years.
Dr.  Wernick  currently  serves as Chairman for  Vital  Living's  Nutritional
Advisory Board. Dr. Wernick is a member of the American Academy of Anti-Aging
Medicine,  Arizona  Medical  Association, Maricopa  County  Medical  Society,
Ontario Medical Association and the American Medical Association. Dr. Wernick
is also author of "Seven Silver Bullets, A consumer's Guide to Vital Health &
Longevity."  In  consideration  for  his  assistance  on  the  Vital   Living
Nutritional Advisory Board Dr. Wernick has a three year consulting  agreement
wherein  he was issued 300,000 warrants at  $0.35 per share, which are  fully
vested.

     Dr. Harold Stein graduated from medical school in 1953. After completing
an internship at Mount Sinai Hospital in Toronto, he received a fellowship to
study  ophthalmology and ophthalmic surgery at the Mayo Clinic in  Rochester,
MN.  Dr. Stein is the author and/or co-author of several textbooks. He is  on
the  editorial board of several international ophthalmic journals.  Currently
Dr.  Stein  does  not have an agreement for compensation for serving  on  the
Vital Living Nutritional Advisory Board.

     The   line  of  products  address  specific  needs  including:   general
nutrition  with  a  complete multi-vitamin, herb,  mineral,  antioxidant  and
enzyme formulation; a bone health product including highly absorbable calcium
for  bone health and ipriflavone (a dietary supplement that is a non-hormonal
and  has  been shown to maximize bone mineral density and inhibit  bone  loss
when taken with calcium), clinically proven to improve bone health and impede
bone  loss; a proprietary enzyme blend to promote more complete digestion;  a
supplement that promotes eye health and addresses concerns regarding  macular
degeneration;  a  supplement  that promotes  steady,  necessary  supplies  of
oxygen, glucose and nutrients to the brain to help maintain mental clarity  &
sharpness;  a  supplement containing isoflavones to lower  the  incidence  of
menopausal  symptoms;  a saw palmetto (a dietary supplement  providing  fatty
acids, sterols, and esters, traditionally used for benign enlargement of  the
prostate. It was also used to treat chronic urinary tract infections) product
containing pumpkin seed, stinging nettle (a dietary supplement confirmed by a
number  of  studies  to  symptomatic relief of  enlarged  prostate,  such  as
frequent  urination  and  weak  urinary flow)  and  other  clinically  proven
ingredients  to assist in promoting a healthy prostate among men; Glucosamine
Sulphate  (a  dietary supplement that provides the joints with  the  building
blocks   they  need  to  repair  damage  caused  by  injuries.  Specifically,
glucosamine  sulfate  provides  the  raw  material  needed  by  the  body  to
manufacture   a  mucopolysaccharide  (called  glycosaminoglycan)   found   in
cartilage),  MSM (a dietary supplement that may help inhibit  pain  impulses,
promote  blood  flow and reduce inflammation of tissues.  It  has  also  been
researched  for use as a pain reliever and anti-inflammatory treatment),  and
Sea  Cucumber supplement  combined with anti-inflammatory compound to rebuild
cartilage  in  affected joints while relieving inflammation and corresponding

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pain; and two topical lotions with  Capsaicin (an extract from Cayenne Pepper
that blocks pain by interrupting the production of substance P.  Capsaicin is
typically  used  in  topical pain-relieving lotions for temporary  relief  of
muscle  and  joint pain) (.033 and .099% strengths) with other  proven  anti-
inflammatory  ingredients  to  provide immediate  relief  for  muscle  aches,
sprains and joint pain commonly associated with arthritis.

"Sales, Infrastructure and Distribution"

     The  company  continues to market to it's "Beta Test" group  of  M.D.'s,
Chiropractors, and other clinical practitioners. We expect that this  channel
will  grow, although we have shifted our marketing strategy and core business
development  to  include "mainstream healthcare physicians, disease  specific
institutes  and  hospitals". We anticipate that upon successful  testing  and
product development that this channel will become the company's core platform
for future growth.

      The Company maintains its executive offices and warehouse facilities at
2800  South Rural Road, Tempe, Arizona. The monthly lease obligation on  this
facility  is  $2,500 and will increase to $2,750 per month beginning  May  7,
2002.  The 2,500 square foot facility consists of executive offices,  storage
space,  mailroom  space,  restrooms  and lunchroom.  Included  in  the  lease
facility  is  miscellaneous  office equipment such  as  telephone  equipment,
copiers, office furniture, computer equipment and related installed software.
Vital  Living  currently packages and ships from this facility. The  products
are warehoused at local facilities while pending shipping to the customer. In
management's  opinion, the current offices and related  facilities  are  more
than adequate for Vital Living's current operations and should provide enough
space  through Fiscal Year 2002. Management also believes the building is  in
adequate  condition  for  office  and  storage  use,  and  will  require   no
substantial  improvements through Fiscal Year 2002  or  later.  Additionally,
Vital  Living  has  use of executive offices at 6265 S.  Stevenson  Way,  Las
Vegas,  Nevada,  consisting  of an office and use  of  conference  facilities
provided  on a month to month basis. These facilities are provided  to  Vital
Living  without  charge as a result of the relationship between  the  CEO  of
Vital Living and associates in Las Vegas.

      The  Company  maintains  insurance with  General  Southwest  Insurance,
insuring   the  Company  under  a  General  Liability  policy  of  insurance.
Additionally,  the  Company  maintains a  Directors  and  Officers  liability
policy.

     The Company is in the early stages of due diligence on several potential
acquisition  targets.  Any one of which will be synergistic  with  the  goals
outlined  in the Company's business plan. Additionally, the Comapny will  add
infrastructure   to   enhance   supply  chain  management,   add   additional
practitioner  dispensing locations and possibly broaden our existing  product
line-up.

Marketing and Distribution Strategies

      In contrast with nationally advertised brand manufacturers, which focus
primarily  on the consumer, Vital Living's strategy is to build relationships
with   mainstream  healthcare  physicians,  hospitals,  health  and   medical
institutes  and mainstream healthcare physicians.. The Company  is  taking  a
more  comprehensive  approach  to  its  distribution  arrangements  with  the
practitioners, offering a comprehensive relationship, that includes not  only
superior   product,  but  education,  novel  technologies  (new   nutritional
technology,  such  as  a clinically proven formulation developed  with  AHI),
marketing materials, financing, testing, communication with their proprietary
databases and ongoing support.

<PAGE>

     The  Company is currently in discussions with companies that  distribute
and  sell  to  the clinical practitioner market to increase current  volumes.
There  can  be  no  assurance that these discussions will  result  in  formal
agreements.

     Until  the  Company establishes additional lines of distribution,  Vital
Living  is  dependent upon its relationship with the Arizona Heart  Institute
and  AHI  Management  Hong Kong. These are the only  institutions  that  have
executed agreements with Vital Living. Its is anticipated that the agreements
with  Arizona Heart Institute and AHI Management Hong Kong will continue  for
the duration of their contracts, three and five years respectively.

Source and Availability of Raw Materials

      The  principal  raw  materials used in the  manufacturing  process  are
natural  ingredients  purchased from manufacturers primarily  in  the  United
States,  with  certain  materials imported from other  countries.  These  raw
materials  are  purchased by our manufacturer, Cornerstone Nutritional  Labs,
who maintains the responsibility for documenting all certificates of analysis
for  the materials in accordance with their Good Manufacturing Practices  and
guidelines.  The Company believes that the materials purchased from suppliers
are  readily  available  from numerous sources and that  the  loss  of  these
suppliers would not adversely affect its operations.

Quality Control

     Finished products are purchased from our manufacturer, which maintains a
modern  quality  control laboratory and testing facility. When  products  are
ready  for  bottling  automated equipment counts  the  tablets  or  capsules,
inserts  them  into bottles, applies a cap, which includes a tamper-resistant
inner  seal,  affixes a label and adds a tamper-resistant outer safety  seal.
All  of  this  is  done by our manufacturer according to  Good  Manufacturing
Practice  regulations  (GMP) for dietary supplements.    Again,  the  company
believes  it will develop and execute a "supply chain" management  philosophy
to add increased efficiencies.

Government Regulation

     The  processing, formulation, packaging, labeling and advertising of the
Company's products are subject to regulation by one or more federal agencies,
including the FDA, the Federal Trade Commission, the Consumer Product  Safety
Commission, the United States Department of Agriculture and the United States
Environmental  Protection  Agency. These activities  are  also  regulated  by
various  agencies  of  the states, localities, and  countries  in  which  the
Company's products are sold. In addition, the Company's Manufacturer, holds a
GMP (Good Manufacturing Practices) Certificate from the State they reside in.

<PAGE>

     The  Dietary Supplemental Health and Education Act ("DSHEA")  recognizes
the  importance  of  good  nutrition and the  availability  of  safe  dietary
supplements  in preventive health care. DSHEA amends the Federal  Food,  Drug
and  Cosmetic  Act  by defining dietary supplements, which include  vitamins,
minerals,  nutritional  supplements and herbs, as a  new  category  of  food,
separate from conventional food. Under DSHEA, the FDA is generally prohibited
from  regulating  such  dietary supplements as food additives  or  drugs.  It
requires  the FDA to regulate dietary supplements so as to guarantee consumer
access  to  beneficial  dietary  supplements, allowing  truthful  and  proven
claims. Generally, dietary ingredients that were on the market before October
15,  1994 may be sold without FDA pre-approval and without notifying the FDA.
However,  new  dietary  ingredients (those not used  in  dietary  supplements
marketed before October 15, 1994) require premarket submission to the FDA  of
evidence of a history of their safe use, or other evidence establishing  that
they  are reasonably expected to be safe. There can be no assurance that  the
FDA  will  accept the evidence of safety for any new dietary ingredient  that
the  Company may decide to use, and the FDA's refusal to accept such evidence
could  result  in  regulation of such dietary ingredients as food  additives,
requiring  the  FDA  pre-approval  based on newly  conducted,  costly  safety
testing.  Also,  while DSHEA authorizes the use of statements of  nutritional
support  in  the labeling of dietary supplements, the FDA is required  to  be
notified of such statements, and there can be no assurance that the FDA  will
not  consider particular labeling statements used by the Company to  be  drug
claims   rather   than   acceptable  statements   of   nutritional   support,
necessitating  approval of a costly new drug application,  or  relabeling  to
delete such statements.

     DSHEA  also authorizes the FDA to promulgate good manufacturing practice
regulations  ("GMP")  for dietary supplements, which  would  require  special
quality controls for the manufacture, packaging, storage and distribution  of
supplements.  The  Company  believes  that  its  facilities  and   those   of
independent  third  party manufacturers have completed  significant  facility
renovations that should allow the Company to comply with the new regulations.
DSHEA  further  authorizes  the FDA to promulgate regulations  governing  the
labeling of dietary supplements, including claims for supplements pursuant to
recommendations  made  by the Presidential Commission on  Dietary  Supplement
Labels.  Such rules, which were issued on September 23, 1997, entail specific
requirements  relative to the labeling of the Company's dietary  supplements.
The  rules  also  require additional record keeping and claim substantiation,
reformulation,  or  discontinuance of certain products, which  could  have  a
material expense to the Company.

     In  addition,  the  Company cannot predict whether  new  legislation  or
regulations governing the Company's activities will be enacted by legislative
bodies  or  promulgated by agencies regulating the Company's  activities,  or
what  the  effect  of any such legislation or regulations  on  the  Company's
business would be.

     This  governmental oversight is fundamentally important to  the  overall
growth  and  longevity  of  the dietary supplement  market.   Not  only  does
regulation  increase product quality, efficacy and safety, it also  heightens
the  playing  field  against unscrupulous manufactures that  cut  corners  by
failing  to meet label claims for actives, substitute inferior and dated  raw
materials and manufacture in facilities that can put public health at risk.

<PAGE>

Trademarks

     Vital  Living  owns trademarks registered with the United States  Patent
and  Trademark  Office and with agencies in certain other major jurisdictions
of  the  world  for  its Vital LivingTM, Vital PackTM,  Vital  FlexTM,  Osteo
VitalTM,   Vital  FocusTM  and  Vital  MindTM  brands.  Federally  registered
trademarks  have a perpetual life, as long as they are renewed  on  a  timely
basis and used properly as trademarks, subject to the rights of third parties
to  seek cancellation of the marks. Vital Living believes that its registered
and  unregistered trademarks and other proprietary rights are valuable assets
and  believes  they have significant value in the marketing of its  products.
Vital Living vigorously protects its trademarks against infringement.

     Unlike copyrights or patents, trademark rights can last indefinitely  if
the  owner continues to use the mark to identify its goods or services.   The
term  of  a federal trademark registration is 10 years, with 10-year  renewal
terms.   A  renewal application for a trademark registration cannot be  filed
until   at   least  6  months  prior  to  the  expiration  of  the  trademark
registration. However, between the fifth and sixth year after the date of the
initial  registration, the registrant must file an affidavit  or  declaration
setting  forth  the following information in order to keep  the  registration
alive.

(1)   An affidavit or declaration, which must include a specific list of  the
goods  or  services recited in the registration, averring that the registrant
is  still  using  the  mark on or in connection with the  goods  or  services
listed;

(2)   A  specimen showing how the mark is currently in use with the goods  or
services  identified,  e.g.,  a  tag, label  or  package  for  goods,  or  an
advertisement for service; and

(3)  the required filing fee.

     If  no  affidavit or declaration is filed, the registration is canceled.
Additionally there is no advance notice from the Office that the Affidavit or
Declaration of Continued Use must be filed by a certain date.

Research and Development

     Vital  Living  does  not  currently conduct  primary  research  for  the
development of new ingredients. Instead, Vital Living's research efforts  are
focused on developing, testing and scientifically substantiating the efficacy
of  new  products  in response to market trends and consumer  demands.  Vital
Living's  staff also intends to continually reformulate existing products  in
response  to  changes  in nationally advertised brand formulas  in  order  to
maintain product comparability.

     Vital  Living believes that flexibility and innovation with  respect  to
new  products are crucial factors in competing for market share in the  field
of nutritional supplements. By monitoring market trends and by avoiding short-
lived  "fad"  items,  the Company is able to anticipate significant  consumer
demand  for certain types of products. The Company develops high-quality  new
products  on an ongoing basis, capitalizing on the emerging science  relative

<PAGE>

to  nutritional products, as well as shifts in consumer demand.  As a  result
of  its recent formation, the Company did not spend any funds on research and
development for the period ended December 31, 2001.

Competition

     The  market  for  vitamins and other nutritional supplements  is  highly
competitive  in  Vital  Living's  channels  of  distribution.  For  sales  to
supermarkets and mass merchandising chains, Vital Living's Vital Pack  AM/PM,
Osteo  Vital, Vital Sorb, Vital Focus, Vital Mind, Vital Flex, Female  Vital,
and  Male  Vital  brands  compete  with numerous  brands  of  larger  vitamin
distributors  and  manufacturers  such  as  Your  Life(R),  Nature   Made(R),
Sundown(R) and Nature's Bounty(R), which are brands of Leiner Health Products
Group,  Inc.,  Pharmavite  Corp.,  Rexall  Sundown,  Inc.  and  NBTY,   Inc.,
respectively. Additionally, Vital Living's products compete directly with IVC
Industries'  Fields  of Nature, LiquaFil, Rybutol, and Nature's  Wonder.  IVC
Industries  is  engaged  in  the  manufacturing,  packaging  and   sale   and
distribution  of  branded  and  store  brand  (private  label)  vitamins  and
nutritional supplements.

     In  addition,  Vital  Living competes with the more  heavily  advertised
national  brands,  which are manufactured by large pharmaceutical  companies.
The  marketplace for private label business is extremely price sensitive with
service  levels,  quality,  innovative packaging, marketing  and  promotional
programs  and  uniqueness  of  products being  the  key  factors  influencing
competitiveness.

     Vital  Living believes that there are also numerous companies  competing
for  health  food  and independent drug store customers in  its  geographical
markets  such as Desert Health Products, Inc. of Scottsdale Arizona. As  most
companies are privately held, Vital Living is unable to precisely assess  the
size  of  its competitors or where it stands with respect to sales volume  in
comparison  to  its  competitors.  Although  all  of  these  competitors  are
substantially  larger than the Company and have greater financial  resources,
the  Company  believes  that it will be able to compete  favorably  with  the
vitamin  and  nutritional  supplement companies primarily  based  upon  Vital
Living's direct distribution approach through physicians desirable of  having
a  nutritional  line of products to supplement the medical aspects  of  their
practice.

Personnel

     As  of  the  date of this filing, the Company has 4 full time  employees
located  at  its  headquarters in Tempe, Arizona. None of its  employees  are
subject  to  any collective bargaining agreements however, the company's  key
management  have entered into employment agreements with the Company.   Vital
Living  does not expect a significant change in the number of employees  over
the  next 12 months as a result of our ability to utilize contract labor  for
areas of need.

      Our  proposed  personnel  structure can be  divided  into  three  broad
categories:   management  and  professional,  administrative,   and   project
personnel.  As  in  most small companies, the divisions between  these  three
categories  are  somewhat indistinct, as employees  are  engaged  in  various
functions  as  projects and work load demands. Our CEO  handles  our  company

<PAGE>

vision  and financial functions; our President handles day to day operations;
and  our Vice President of Business Development handles marketing and product
development.  Additionally, we have an administrative assistant  who  assists
the  officers of the company in day to day activities, and we have one  sales
person involved in establishing sales contacts for the company.

     We  are  dependent upon the services of Bradley D. Edson, CEO,  Kenneth
Lind,  President  and  Martin  J.  Gerst, Secretary/Treasurer.   Our  future
success  also  depends on our ability to attract and retain other  qualified
personnel, for which competition is intense. The loss of either of the above
individuals or our inability to attract and retain other qualified employees
could have a material adverse effect on us. We currently do not have key man
insurance to cover the loss of any of these individuals.

Risks

     While  Management  believes its estimates of projected  occurrences  and
events  are  within  the  timetable of its business plan,  there  can  be  no
guarantees or assurances that the results anticipated will occur.

      Our  audited financial statement have been prepared assuming that  will
will  continue  as  a going concern which contemplates the recoverability  of
assets and the satisfaction of liabilities in the normal course of business.

ITEM 2.   DESCRIPTION OF PROPERTY

     The Company maintains its executive offices and warehouse facilities  at
2800  South Rural Road, Tempe, Arizona. The monthly lease obligation on  this
facility  is  $2,500 and will increase to $2,750 per month beginning  May  7,
2002.  The  2500 square foot facility consists of executive offices,  storage
space,  mailroom  space,  restrooms  and lunchroom.  Included  in  the  lease
facility  is  miscellaneous  office equipment such  as  telephone  equipment,
copiers, office furniture, computer equipment and related installed software.
Vital  Living  currently packages and ships from this facility. The  products
are warehoused at local facilities while pending shipping to the customer. In
management's  opinion, the current offices and related  facilities  are  more
than adequate for Vital Living's current operations and should provide enough
space  through Fiscal Year 2002. Management also believes the building is  in
adequate  condition  for  office  and  storage  use,  and  will  require   no
substantial  improvements through Fiscal Year 2002  or  later.  Additionally,
Vital  Living  has  use of executive offices at 6265 S.  Stevenson  Way,  Las
Vegas,  Nevada,  consisting  of an office and use  of  conference  facilities
provided  on a month to month basis. These facilities are provided  to  Vital
Living  without  charge as a result of the relationship between  the  CEO  of
Vital Living and associates in Las Vegas.

ITEM 3.   LEGAL PROCEEDINGS

     Vital  Living may from time to time be involved in routine legal matters
incidental  to its business; however, at this point in time it  is  currently
not  involved  in  any  litigation, nor is it  aware  of  any  threatened  or
impending litigation.

<PAGE>

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Majority Consent of Stockholders of Vital Living was signed on July  31,
2001 and the following was approved by the majority stockholders.

*     The Corporation's Articles of Incorporation be amended to increase  the
capitalization to 100,000,000 shares of common stock at $0.001 par value  and
50,000,000 shares of preferred stock at $0.001 par value;

*     The  Corporation's Bylaws should be amended to add the  office  of  the
Chief  Executive  Officer which will be the highest ranking  officer  of  the
Corporation;

*    To increase the number of Board Members to a maximum of nine (9);

*     The  Corporation shall institute a 2001 Master Stock Option Plan for  a
total  of  2,500,000  shares, which options to be granted  by  the  Board  of
Directors;

*     The  Corporation shall enter into an Agreement and Plan of Merger  with
VCM   Technology  Limited,  with  Vital  Living,  Inc.  being  the  surviving
corporation and successor issuer; and

*     The  Corporation shall receive financing in an amount up to $20,000,000
through the issuance of Series A and B Preferred Stock.

PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The  Company has commenced trading on the OTC Electronic Bulletin  Board
which  is sponsored by the National Association of Securities Dealers (NASD).
The  OTC  Electronic Bulletin Board is a network of security dealers who  buy
and  sell  stock.   The  dealers are connected by a  computer  network  which
provides  information  on  current  "bids"  and  "asks"  as  well  as  volume
information.

     As  of the date of this filing, there is a limited public market for the
Company's  securities.   As  of  February  12,  2002,  the  Company  had  339
stockholders of record.  The Company has paid no cash dividends.  The Company
has 2,455,000 outstanding options, and 2,400,000 warrants.

     Within  the  following twelve months, the Company anticipates  filing  a
registration statement under the Securities Act of 1933 to register shares of
common  stock underlying warrants that are to be issued, upon conversion,  to
holders of the Company's 10% Series A Preferred Stock.

<PAGE>
<TABLE>

            Fiscal Year 2001 Equity Compensation Plan Information

                                 Number of
                                securities
                               awarded plus
                                 number of
                                securities
                               to be issued
                   Number of       upon        Number of
                  securities    exercise of   securities     Number of
                  authorized      options    to be issued    securities
                      for         granted        upon        remaining
                   issuance       during      exercise of  available for
                   under the    fiscal year   outstanding      future
  Name of Plan       plan          2001         options       issuance
<S>               <C>          <C>          <C>            <C>
2001 Stock
Option Plan        2,500,000     2,180,000     2,180,000      320,000
</TABLE>

Recent Sales of Unregistered Securities

     In  July  2001, the Company completed a public offering that was offered
without  registration  under the Securities Act  of  1933,  as  amended  (The
"Act"),  in reliance upon the exemption from registration afforded by Section
3(b)  of the Securities Act and Regulation D promulgated thereunder.  On June
26, 2001, the Company received a letter of effectiveness for its registration
filed  under  NRS 90.490 with the State of Nevada Securities  Division.   The
registration  pertained to 2,100,000 shares of common stock  at  a  price  of
$0.28   per  share  for  a  total  amount  of  $588,000.   Pursuant  to   the
registration,  the Company raised the full amount of $588,000.   This  amount
and  any prior securities sold by the Company in the prior 12 months did  not
exceed  $1  million.  The securities were sold pursuant to Nevada regulations
utilizing a series 63 agent, with a fee paid of 2% of the total funds  raised
in  Nevada  for  handling  prospectus delivery, subscription  monitoring  and
handling the bank impound account.

Subsequent Sales of Unregistered Securities

Series A Preferred Stock

     On  February  5,  2002, Vital Living and William Sterk entered  into  an
Investment Agreement. Mr. Sterk purchased 50,000 shares of Series A Preferred
Stock  ("Shares") of Vital Living, at a price of $1.00 per Share.  The shares
were sold without registration, based upon the relationship between Mr. Sterk
and  Brad  Edson,  the company's C.E.O. in reliance upon the  exemption  from
registration  afforded  by Section 4(2) and 3(b) of the  Securities  Act  and
Regulation D 505 promulgated thereunder.

     On  February  10, 2002, Vital Living and Arnold Morren entered  into  an
Investment  Agreement.   Mr.  Morren purchased  25,000  shares  of  Series  A
Preferred  Stock ("Shares") of Vital Living, at a price of $1.00  per  Share.
The  shares  were  sold  without registration, based  upon  the  relationship
between  Mr.  Morren  and  Mr. Edson, in reliance  upon  the  exemption  from
registration  afforded  by Section 4(2) and 3(b) of the  Securities  Act  and
Regulation D 506 promulgated thereunder.

<PAGE>

     On  February 12, 2002, Vital Living and Jay and Kathleen Morren  entered
into an Investment Agreement.  Mr. and Ms. Morren purchased 50,000 shares  of
Series A Preferred Stock ("Shares") of Vital Living, at a price of $1.00  per
Share.    The  shares  were  sold  without  registration,  based   upon   the
relationship between Mr. and Ms. Morren and Mr. Edson, in reliance  upon  the
exemption  from  registration  afforded by  Section  4(2)  and  3(b)  of  the
Securities Act and Regulation D 506 promulgated thereunder.

     On  March  7,  2002, Vital Living and Della Holt Trust entered  into  an
Investment Agreement.  Della Holt Trust purchased 25,000 shares of  Series  A
Preferred  Stock ("Shares") of Vital Living, at a price of $1.00  per  Share.
The  shares  were  sold  without registration, based  upon  the  relationship
between  Della Holt Trust and Mr. Edson, in reliance upon the exemption  from
registration  afforded  by Section 4(2) and 3(b) of the  Securities  Act  and
Regulation D 506 promulgated thereunder.

     On  March  26,  2002,  Vital  Living and Barry  Peele  entered  into  an
Investment  Agreement.   Mr.  Peele  purchased  25,000  shares  of  Series  A
Preferred  Stock  ("Shares") of Vital Living at a price of $1.00  per  Share.
The  shares  were  sold  without registration, based  upon  the  relationship
between  Mr.  Peele  and  Mr.  Edson, in reliance  upon  the  exemption  from
registration  afforded  by Section 4(2) and 3(b) of the  Securities  Act  and
Regulation D606 promulgated thereunder.

     The  rights, preferences, restrictions and other matters relating to the
10% Series A Preferred Stock are as follows:

1.    Designation.   The Preferred Stock is designated as the  Company's  10%
Series A Preferred Stock (the "Preferred Stock") and is subject to the  terms
and conditions of the Stock Purchase Agreement (the "Purchase Agreement")  of
even date herewith between the Company and the Investor.

2.   Dividend Provisions. The holders of the Preferred Stock will be entitled
to  a  preferred  dividend at the rate of 10% per annum.   Dividends  on  the
Preferred Stock will be cumulative and shall be paid in additional shares  of
Preferred Stock at a price equal to $1.00 per share and will contain all  the
rights  and privileges and be subject to all the terms and conditions as  set
forth herein.  Dividends shall be paid semi-annually.

3.   Liquidation Preference.

(a)   In  the  event of any liquidation, dissolution or winding  up  of  this
corporation, either voluntary or involuntary, subject to the rights of series
of  preferred  stock  that  may from time to time come  into  existence,  the
holders  of  Preferred  Stock shall be entitled  to  receive,  prior  and  in
preference  to  any distribution of any of the assets of this corporation  to
the  holders of Common Stock by reason of their ownership thereof, an  amount
per  share  equal  to  the  sum of (i) $1.00 for each  outstanding  share  of
Preferred  Stock  (the "Original Series A Issue Price") and  (ii)  an  amount
equal to 12% of the Original Series A Issue Price for each 12 months that has
passed since the date of issuance of any Preferred Stock plus any accrued  or
declared  but  unpaid dividends on such share (such amount (of  declared  but
unpaid dividends) being referred to herein as the "Premium").

<PAGE>

4.   Redemption.

The  Company  may  following twelve (12) months from  the  date  hereof  (the
"Redemption Date"), at the option of the Board of Directors, redeem in  whole
or  in  part the Preferred Stock by paying in cash in exchange for the shares
of Preferred Stock to be redeemed a sum equal to $1.50 per share of Series  A
Preferred Stock (as adjusted for any stock dividends, combinations or  splits
with  respect  to  such shares) plus all declared or accumulated  but  unpaid
dividends  on  such shares (the "Redemption Price"). Any redemption  effected
pursuant  to  this subsection (4)(a) shall be made on a pro rata basis  among
the  holders of the Preferred Stock in proportion to the number of shares  of
Preferred Stock then held by them.

5.    Conversion.  The holders of the Preferred Stock shall  have  conversion
rights as follows (the "Conversion Rights"):

(a)  Right to Convert. Each share of Preferred Stock shall be convertible, at
the option of the holder thereof, at any time following the first anniversary
of  the date of issuance of such share and on or prior to the fifth (5th) day
prior  to  the  Redemption  Date, if any, as  may  have  been  fixed  in  any
Redemption Notice with respect to the Preferred Stock, at the office of  this
corporation or any transfer agent for such stock, into such number  of  fully
paid  and  nonassessable shares of Common Stock as is determined by  dividing
the  Original Series A Issue Price by the Conversion Price applicable to such
share,  determined  as  hereafter  provided,  in  effect  on  the  date   the
certificate is surrendered for conversion. The Conversion Price per share for
shares of Preferred Stock shall be calculated as follows:
(i)   If  the Preferred Stock is converted between the first anniversary  and
prior to the fifteenth (15th) month from the date of issuance, the Conversion
Price per share shall be equal to the Original Series A Issue Price; or

(ii)  If  following the fifteenth (15th) month from the date of issuance  the
corporation's  Common  Stock is publicly traded on  NASDAQ,  Over-the-Counter
Bulletin  Board or other national stock exchange, the Conversion Price  shall
be 60% of the average closing price of the Common Stock for the 30 days prior
to  the date of conversion ("Trading Conversion Price"), however, in no event
shall the Conversion Price be less than the Original Series A Issue Price.

(b)   Automatic Conversion. Each share of Preferred Stock shall automatically
be  converted into shares of Common Stock on the first day of the  eighteenth
(18th) month following the original issue date of the Preferred Stock,  at  a
Conversion Price equal to the greater of the Trading Conversion Price or  the
Original Series A Issue Price.

      In  addition,  for  every five shares of preferred stock  converted  to
common,  the  company shall grant the stockholder one warrant.  All  warrants
are  exercisable after 1 year from grant at a price of $2.00 per share.   The
warrants   shall  hold  registration  rights,  and  the  company  agrees   to
immediately  register the shares, at company's expense, 12  months  from  the
issue of the preferred stock.

<PAGE>

6.    Voting  Rights. The holder of each share of Preferred Stock  shall  not
have any voting rights.

7.    Protective  Provisions. So long as any shares of  Preferred  Stock  are
outstanding, this corporation shall not without first obtaining the  approval
(by  vote or written consent, as provided by law) of the holders of Preferred
Stock  which is entitled, other than solely by law, to vote with  respect  to
the  matter, and which Preferred Stock represents at least a majority of  the
voting power of the then outstanding shares of such Preferred Stock:

(a)   sell,  convey, or otherwise dispose of or encumber all or substantially
all  of its property or business or merge into or consolidate with any  other
corporation (other than a wholly-owned subsidiary corporation) or effect  any
transaction  or  series  of related transactions in  which  more  than  fifty
percent (50%) of the voting power of the corporation is disposed of;

(b)   alter or change the rights, preferences or privileges of the shares  of
Preferred Stock so as to affect adversely the shares;

(c)   increase or decrease (other than by redemption or conversion) the total
number of authorized shares of preferred stock;

(d)   authorize  or  issue,  or obligate itself to issue,  any  other  equity
security,  including any other security convertible into or  exercisable  for
any  equity security (i) having a preference over, or being on a parity with,
the  Preferred Stock with respect to dividends or upon liquidation,  or  (ii)
having rights similar to any of the rights of the Preferred Stock; or

(e)  amend the corporation's Articles of Incorporation or bylaws.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     This  report  contains forward-looking statements.  Actual  results  and
events  could  differ  materially  from  those  projected,  anticipated,   or
implicit,  in the forward-looking statements as a result of the risk  factors
set forth below and elsewhere in this report.

     Within the exception of historical matters, the matters discussed herein
are forward looking statements that involve risks and uncertainties.  Forward
looking  statements  include, but are not limited to,  statements  concerning
anticipated  trends in revenues and net income, the date of  introduction  or
completion  of our products, projections concerning operations and  available
cash  flow.   Our  actual results could differ materially  from  the  results
discussed  in  such forward-looking statements.  The following discussion  of
our  financial  condition  and  results  of  operations  should  be  read  in
conjunction  with  our  financial statements and the  related  notes  thereto
appearing elsewhere herein.

<PAGE>


Overview

     Vital  Living's strategy is to target major health areas affecting large
segments  of  the population.  Vital Living's first target is  cardiovascular
health.  Cardiovascular disease (CVD) affects 60 million Americans and  kills
one  million  Americans each year.  The American Heart Association  estimates
that  100  million  Americans could reduce their  risk  of  heart  attack  by
changing  their  diet  and  exercising regularly.  Physicians  prescribe  $23
billion worth of pharmaceuticals annually to treat or prevent CVD.

     The  Company  is  creating proprietary distribution  relationships  with
leading  physicians.  Vital Living has signed an agreement with  the  Arizona
Heart  Institute (AHI), led by Ted Diethrich, M.D., to market Vital  Living's
nutraceutical  regimen  for cardiovascular health  through  AHI  and  its  15
affiliated  heart  institutes.   AHI and  its  affiliates  serve  25,000  new
patients a year and have a database of more than 150,000 heart patients.  Dr.
Diethrich  and AHI have a worldwide reputation for healthcare innovation  and
have a wide following among cardiologists.

     Additional  health  concerns  and  distribution  channels  will  provide
significant  future  revenue opportunities.  Based on  the  successful  model
developed  with  AHI,  Vital  Living will  collaborate  with  physicians  who
specialize   in  menopause,  oncology,  diabetes  and  obesity   to   develop
nutraceuticals  specifically designed to complement  existing  therapies  for
those conditions.

Year Ended December 31, 2001

     Revenues.   Revenues in the year ended December 31, 2001  were  $90,291,
which were the first revenues received by the Company since inception.   Cost
of  sales  were  $43,401, with a one-time inventory write down  of  $262,627,
providing a gross loss of $215,737.  At September 30, 2001 the Company  wrote
its  inventory  down to the market of the overall inventory.  This  was  done
because  sales  of  the products were not as expected and the  products  were
within six months of expiration.

     General and Administrative.  General and administrative expenses for the
year  ended December 31, 2001 were $827,175.  These costs were primarily  the
result  of  expenses  related  to  labor  costs,  organizational  costs   and
professional fees associated with initial operations and becoming a  publicly
traded company.

     Net  loss for the Company was $1,042,912 for the year ended December 31,
2001.   This  loss was a result of increasing activity and related additional
expenses discussed  above associated with being a development stage company.

Liquidity and Capital Resources

     A  critical  component  of  our operating plan impacting  our  continued
existence  is  the  ability to obtain additional capital  through  additional
equity  and/or debt financing.  We do not anticipate enough positive internal
operating cash flow until such time as we can generate substantial additional
revenues from direct sales of our product, which may take the next few  years

<PAGE>

to  fully  realize.  In the event we cannot obtain the necessary  capital  to
pursue our strategic plan, we may have to cease or significantly curtail  our
operations.  This would materially impact our ability to continue operations.

     Our near term cash requirements are anticipated to be offset through the
receipt  of funds from private placement offerings and loans obtained through
private  sources.   Since inception, we have financed cash flow  requirements
through  debt  financing and issuance of common stock for cash and  services.
As  we  expand  operational  activities, we may continue  to  experience  net
negative  cash flows from operations, pending receipt of sales revenues,  and
will  be  required to obtain additional financing to fund operations  through
common stock offerings and bank borrowings to the extent necessary to provide
working capital.

     Over  the next twelve months we intend to develop revenues by developing
additional  products for specific target markets.  We believe  that  existing
capital  and  anticipated funds from operations will  not  be  sufficient  to
sustain   operations  and  planned  expansion  in  the  next  twelve  months.
Consequently, we will be required to seek additional capital in the future to
fund  growth  and  expansion through additional equity or debt  financing  or
credit  facilities.   No assurance can be made that such financing  would  be
available,  and if available it may take either the form of debt  or  equity.
In  either  case, the financing could have a negative impact on our financial
condition and our Stockholders.

     We  anticipate  incurring operating losses over the next twelve  months.
Our  lack of operating history makes predictions of future operating  results
difficult  to  ascertain.  Our prospects must be considered in light  of  the
risks, expenses and difficulties frequently encountered by companies in their
early  stage  of  development,  particularly companies  in  new  and  rapidly
evolving  markets such as technology related companies.  Such risks  include,
but  are not limited to, an evolving and unpredictable business model and the
management  of  growth.  To address these risks we must, among other  things,
obtain  a customer base, implement and successfully execute our business  and
marketing  strategy, continue to develop and upgrade technology and products,
provide  superior  customer  services  and  order  fulfillment,  respond   to
competitive   developments,  and  attract,  retain  and  motivate   qualified
personnel.   There  can  be  no  assurance that  we  will  be  successful  in
addressing  such risks, and the failure to do so can have a material  adverse
effect  on  our  business  prospects,  financial  condition  and  results  of
operations.

Going Concern

     The  Company's auditors have requested the Company provide a note,  Note
2, in the Company's financial statement as follows:

     "The  accompanying financial statements at December 31, 2001  have  been
prepared  on  a  going concern basis, which contemplates the  realization  of
assets  and the satisfaction of liabilities in the normal course of business.
The Company has suffered losses from operations during its operating history.
The  ability of the Company to continue as a going concern is dependent  upon
obtaining  future  profitable operations.  Management is in  the  process  of

<PAGE>

acquiring  and developing products for sale which would generate  revenue  to
sustain  the  operations  of the Company.  The financial  statements  do  not
include any adjustments relating to the recoverability and classification  of
recorded  assets  and classification of liabilities that might  be  necessary
should the Company be unable to continue as a going concern."

ITEM 7.   FINANCIAL STATEMENTS

     See Index to Financial Statements and Financial Statement Schedules
appearing on page F-1 through F-12 of this Form 10-KSB.

ITEM 8.   CHANGES  IN  AND  DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING  AND
          FINANCIAL DISCLOSURE

     In  2001, we engaged the services of Weaver & Martin, LLC to provide  an
audit of our Financial Statements from January 22, 2001 to December 31, 2001.
We  have  no disagreements with our auditor through the date of this  filing.
Weaver & Martin were our first auditor.

PART III

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

     The  members  of the Board of Directors of the Company serve  until  the
next  annual  meeting  of stockholders, or until their successors  have  been
elected.   The  officers  serve at the pleasure of the  Board  of  Directors.
Information as to the directors and executive officers of the Company  is  as
follows:
<TABLE>

  Name                   Age      Title
<S>                     <C>      <C>
  Bradley D. Edson       42       CEO/Director
  Martin J. Gerst        43       Secretary/Treasurer/Director
  Kenneth Lind           46       President
  Eric Anderson          33       Vice President Business Development
</TABLE>

Duties, Responsibilities and Experience

     Bradley  D. Edson: CEO, Director. Age 42. Mr. Edson has been a  Director
and  Chief Executive Officer of the Company since  May 7, 2001. From  May  7,
2001  until September 17, 2001 Mr. Edson also held the position as  President
of  the Company. From April 1999 through May 2001, Mr. Edson was President of
Vital Living, Inc., of Arizona.  From January 1991, Mr. Edson was involved in
a  consolidation  of the recreational vehicle membership and  retail  camping
business,  along  with his business partner Mr. Gerst .  Mr.  Edson  holds  a
Bachelor  of Science degree in Finance with further law studies from  Arizona
State University Law School.  Mr. Edson holds a real estate brokerage license
and  insurance licenses in over 35 states.  In the past, he has been a member
of  the International Association of Financial Planners and a Principal in  a
NASD member firm.

<PAGE>

     Martin  J.  Gerst: Secretary, Director. Age 43.  Mr. Gerst  has  been  a
Director, Vice President and Secretary of the Company since May 7, 2001.   In
January 1991, Mr. Gerst has been involved in a  consolidation of the  of  the
recreational vehicle membership and retail camping business..  He has, in the
past,  been  a  mortgage  broker  for  several  years,  overseeing  both  the
origination and processing end of the business.  He has held a position as  a
member of the International Association of Financial Planners.  He has been a
member  broker-dealer principal (NASD) and has held a license  as  a  general
contractor and has overseen several building projects of RV resorts.

     Kenneth  Lind:  President,  Age 46. Mr. Lind has  been  President  since
September  2001.  From April 1999 to May 2001 Mr. Lind was  a  consultant  to
Vital Living, Inc. of Arizona prior to its asset sale to Nutritional Systems,
Inc.  From  May  2001 through August 2001 Mr. Lind was a  consultant  to  the
Company, acting as operations manager. From January 1998 until April 1999 Mr.
Lind  worked  as  a consultant for Sheffield Resources Network,  the  largest
management  consulting  firm in the Direct Sales Marketplace.   From  October
1996  through  December 1997 Mr. Lind served as President of Natus,  Inc.,  a
firm specializing in nutrition products.

     Eric   Anderson:  Vice-president  Business  Development,  Age  33.  Eric
Anderson,  joins  Vital  Living in the capacity of New  Business  Development
after  first consulting for Vital Living, Inc. of Arizona in 1999-2000.  From
1998 through 2000 Mr. Anderson served as managing partner of Ignite Marketing
Group, which provides public relations, sales and marketing programs for  the
nutraceutical  industry.  From 1994 through 1998  Mr.  Lind  served  as  Vice
President  Sales  & Marketing for Pharmanutrients, Inc., a  manufacturer  and
marketer of patented nutritional technologies.

     Directors  are  elected  to  serve until  the  next  annual  meeting  of
stockholders  and  until  their successors have been elected  and  qualified.
Officers  are appointed to serve until the meeting of the Board of  Directors
following  the next annual meeting of stockholders and until their successors
have been elected and qualified.

     No Executive Officer or Director of the Corporation has been the subject
of  any Order, Judgment, or Decree of any Court of competent jurisdiction, or
any   regulatory   agency  permanently  or  temporarily  enjoining,   barring
suspending  or  otherwise limiting him from acting as an investment  advisor,
underwriter, broker or dealer in the securities industry, or as an affiliated
person, director or employee of an investment company, bank, savings and loan
association,  or  insurance company or from engaging  in  or  continuing  any
conduct  or  practice in connection with any such activity or  in  connection
with the purchase or sale of any securities.

     No Executive Officer or Director of the Corporation has been convicted
in any criminal proceeding (excluding traffic violations) or is the subject
of a criminal proceeding which is currently pending.

     No Executive Officer or Director of the Corporation is the subject of
any pending legal proceedings.

<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16(a) of the Securities Exchange Act of 1934, as  amended  (the
"Exchange Act"), requires Vital Living executive officers and directors,  and
persons  who beneficially own more than ten percent of Vital Living's  common
stock,  to  file  initial  reports of ownership and  reports  of  changes  in
ownership  with the SEC. Executive officers, directors and greater  than  ten
percent  beneficial owners are required by SEC regulations to  furnish  Vital
Living  with copies of all Section 16(a) forms they file. Based upon a review
of   the  copies  of  such  forms  furnished  to  Vital  Living  and  written
representations  from  Vital Living executive officers and  directors,  Vital
Living believes that during the year ended 2001 all forms 3 and 4 were  filed
on a timely basis for Vital Living executive officers and directors.

ITEM 10.  EXECUTIVE COMPENSATION

     Prior  to  October  1,  2001 none of the officers or  directors  of  the
Company  have received monetary compensation for their services as an officer
or  director.  Kenneth Lind and Eric Anderson were elected as officers by the
board of directors on September 17, 2001 and have been employed previously by
the  company  as contract labor. Mr. Lind has received $10,000 per  month  as
contract  labor  from Vital Living since May of 2001. Mr.  Anderson  receives
$7,500 per month as contract labor, and has received this amount since August
1, 2001.

     On  October 1, 2001, Vital Living and Bradley D. Edson entered  into  an
Employment Agreement.  The term of employment is three (3) years.  Mr.  Edson
serves as Chief Executive Officer of Vital Living.  Mr. Edson shall receive a
base  salary  of  $180,000  per  annum for  the  first  year  of  employment,
increasing  to $204,000 per annum on the first anniversary of the signing  of
the  agreement, and increasing to $228,000 on the second anniversary  of  the
signing  of  the  agreement.  As an inducement for Mr.  Edson  to  begin  his
employment  with  Vital  Living,  Vital Living  issued  Mr.  Edson  1,000,000
warrants  to  purchase Vital Living's common stock at $.35  per  share.   The
warrants  are exercisable at any time and expire on the third anniversary  of
issuance.

     On  October  1, 2001, Vital Living and Kenneth F. Lind entered  into  an
Employment Agreement.  The term of employment is three (3) years.   Mr.  Lind
serves  as  President of Vital Living.  Mr. Lind receives a  base  salary  of
$150,000  per  annum.  As an inducement for Mr. Lind to begin his  employment
with  Vital Living, Vital Living paid Mr. Lind a $54,000 cash signing  bonus,
of which $27,000 has been paid and the remaining $27,000 is to be paid within
one  hundred  twenty (120) days of the date of the agreement   As  additional
incentive for Mr. Lind to begin his employment, Vital Living issued Mr.  Lind
250,000  warrants to purchase Vital Living's common stock at $.35 per  share.
The  warrants are exercisable at any time and expire on the third anniversary
of issuance.

     On  October  1,  2001, Vital Living and Eric Anderson  entered  into  an
Employment  Agreement.   The term of employment  is  three  (3)  years.   Mr.
Anderson shall serve as Executive Vice-President of Business Development  for
Vital  Living.   Mr.  Anderson shall receive a base salary  of  $102,000  per
annum.  As an inducement for Mr. Anderson to begin his employment with  Vital
Living,  Vital Living issued Mr. Anderson 200,000 warrants to purchase  Vital

<PAGE>

Living's common stock at $.35 per share.  The warrants are exercisable at any
time and expire on the third anniversary of issuance.

     The  following  table sets forth the cash compensation of the  Company's
executive officers and directors, for the fiscal year since inception of  the
Company.
<TABLE>
Summary Compensation Table
                                                           Long Term
                        Annual Compensation              Compensation
   Name                                   Other  Restri
    and                                  Annual   cted
  Princip                                Compen  Stock
    al      Year     Salary      Bonus   sation          Options     Others
  Positio
     n
<S>        <C>     <C>          <C>      <C>     <C>     <C>     <C>
  Bradley
  D.
  Edson
  CEO/Dir     2001  $45,000(1)         0       0      0        0  1,000,000(2)
  ector
  Kenneth
  F. Lind                                                           250,000(2)
  Preside     2001  $37,500(1)   $27,000       0      0        0    $20,000(3)
  nt
  Eric
  Anderso
  n                                                                 200,000(2)
  Vice        2001  $25,500(1)         0       0      0        0    $18,750(3)
  Preside
  nt
  Martin
  J.
  Gerst
  Secreta
  ry/Trea
  surer       2001           0         0       0      0        0             0
  Directo
  r
</TABLE>

(1)  Accrued salary.
(2)  Warrants to purchase shares of the Company for $0.35 per share.
(3)  Loan payable to Company.
<TABLE>

     Options/Warrants

  Name and Principal Position  Number of   Percentage  Exercise   Expiration
                              Securities    of Total    or Base      Date
                              Underlying   Securities   ($/Sh)
                                 Grant     Granted to
                                           Employees
<S>                         <C>           <C>         <C>         <C>
  Bradley D. Edson
  CEO/Director                  1,000,000          69%     $0.35    10/01/04
  Kenneth F. Lind
  President                       250,000          17%     $0.35    10/01/04
  Eric Anderson
  Vice President                  200,000          14%     $0.35    10/01/04
  Martin J. Gerst
  Secretary/Treasurer/Directo           0            0         0
  r
</TABLE>
<PAGE>

Subsequent Events

     In January 2002, the Company granted 75,000 options to an employee.  The
exercise  price  is  $1.00  and the options vest yearly  subject  to  certain
provisions that can accelerate vesting.  There are 25,000 options vesting  in
year 1, 2 and year 3.  The option will expire in January 2006.

     On  March  25,  2002  Vital  Living entered into  a  2  year  Consulting
Agreement  with  Leslie D. Michelson.  Under the terms of the  agreement  Mr.
Michelson,  in addition to monthly payments of $2,000, received  warrants  to
purchase  500,000 shares of common stock in Vital Living at a price of  $1.00
per  share.  The warrants vest over 17 months. The warrants are being  issued
without  registration based upon the relationship between Mr.  Michelson  and
Mr.  Edson,  in  reliance  upon the exemption from registration  afforded  by
Section 4(2), and Rule 701 of the Securities Act.

     On  March  25,  2002  Vital  Living entered into  a  2  year  Consulting
Agreement  with Brian C. Smith.  Under the terms of the agreement Mr.  Smith,
in  addition  to  monthly payments of $2,000, received warrants  to  purchase
150,000 shares of common stock in Vital Living at a price of $1.00 per share.
The  warrants  vest  over 17 months.  The warrants are being  issued  without
registration based upon the relationship between Mr. Smith and Mr. Edson,  in
reliance  upon the exemption form registration afforded by Section 4(2),  and
Rule 702 of the Securities Act.

     On  March  25,  2002  Vital  Living entered into  a  2  year  Consulting
Agreement  with  Michael H. Davidson.  Under the terms of the  agreement  Dr.
Davidson,  in  addition  to monthly payments of $4,200  per  month,  received
options to purchase 200,000 shares of common stock in Vital Living at a price
of  $1.00 per share.  The options vest over 17 months. The options are  being
issued  without registration based upon the relationship between Dr. Davidson
and  Mr. Edson, in reliance upon the exemption form registration afforded  by
Section 4(2), Rule 702 of the Securities Act.

     In  February  and  March, 2002, the Company sold in various  transaction
175,000  shares of 10% Series A Preferred Stock (stock) at a price  of  $1.00
per  share.   The  shares were sold without registration.  The  stock  had  a
dividend  provision  of  10%  per  annum paid  semi-annually;  preference  in
liquidation of $1.00 per share; redemption at the preference of the Board  of
Directors within twelve months paying $1.50 per share; and convertible at any
time  after one year of issuance (and prior to the redemption date,  in  any,
fixed in the redemption notice).  The conversion price for the period of  the
first  anniversary to the fifteenth month if issuance is equal to the initial
payment price ($1.00) or the fifteenth to eighteenth month at a price of  60%
of  the  average  closing price of the common stock  for  30  days  prior  to
conversion or after the eighteenth month the stock automatically converts  at
the greater if issued price or trading conversion price.


<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information as of the date of this filing
relating  to the beneficial ownership of Vital Living common stock  by  those
persons  known  to  Vital Living to beneficially own more than  5%  of  Vital
Living Capital Stock, by each of Vital Living's directors, proposed directors
and  executive  officers,  and by all of Vital Living's  directors,  proposed
directors and executive officers as a group.
<TABLE>


                                                                  Percent
                                                       Number   Beneficially
  Name of Beneficial Owner (1)                       of Shares     Owned
<S>                                                 <C>         <C>
  Bradley D. Edson, CEO/ Director(2)                  2,738,050       18.72%
  2800 South Rural Road
  Tempe, Arizona
  Martin J. Gerst, Secretary/Treasurer and Director   2,738,050       18.72%
  2800 South Rural Road
  Tempe, Arizona
  Kenneth F. Lind, President(3)                         750,000        5.13%
  2800 South Rural Road
  Tempe, Arizona
  Eric Anderson, VP of Business Development(4)                0           0%
  2800 South Rural Road
  Tempe, Arizona
  All Directors & Officers and Beneficial Owners as
  a Group                                             6,226,100       42.57%
</TABLE>
(1)   As  used in this table, "beneficial ownership" means the sole or shared
power  to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to Common Stock (i.e., the power to dispose of,
or  to direct the disposition of, a security).  The address of each person is
care of the Company.
(2)  Does not include 1,000,000 warrants to purchase shares of the Company
for $0.35 per share.
(3)  Does not include 250,000 warrants to purchase shares of the Company for
$0.35 per share.
(4)  Does not include 200,000 warrants to purchase shares of the Company for
$0.35 per share.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On  May 21, 2001 the principal stockholders, Bradley D. Edson, Martin J.
Gerst,  Donald Hannah, and Kenneth F. Lind entered into a lock up  agreement,
which  lock up agreement was amended June 19, 2001, wherein they collectively
agreed  to  a  lock up of their shares until the earlier of (i) a  period  of
three  years from June 2001; (ii) when the Company's stock is traded  on  the
NASD  OTC:BB at an average share price of greater than $.28 for a minimum  of

<PAGE>

three  months; (iii) the Shares are listed on the NASDAQ Small Cap or  higher
market;  or  the  Company has paid the initial purchase  price  back  to  the
purchasing shareholders in the Regulation D, Rule 504 Registration filed with
the State of Nevada in June of 2001. The lock up agreement was prompted by  a
request by the Securities Administrator for the State of Nevada.

     On  May  7,  2001, Vital Living executed a real property lease  for  its
executive offices and related storage areas for property located at  2800  S.
Rural Road, Tempe, Arizona. The landlord is Camper Clubs of America, Inc.,  a
company  founded  by Bradley Edson and Martin Gerst. Mr. Gerst  is  currently
president  of  Camper  Clubs of America, Inc. Both Mr. Edson  and  Mr.  Gerst
currently  own  Camper Clubs of America, Inc. The lease  consisting  of  2500
square  feet of office, storage, mailroom, restrooms and lunchroom is  leased
by  Camper  Clubs  of America, Inc. to Vital Living on terms  and  conditions
deemed to be at market rates. Vital Living's obligations under the lease  are
on a month to month basis.

     Effective  as of August 1, 2001, Vital Living and Michael Edson  entered
into  a  Consultant Agreement.  Michael Edson is the brother  of  Bradley  D.
Edson,  who is the CEO of Vital Living.  Mr. Edson's responsibilities include
the  prospecting,  establishing and servicing of  various  complementary  and
alternative practices as well as other proprietary distribution channels.  To
date he has initiated selling agreements with over 100 Physician offices  and
Specialty  Health  food stores. Mr. Edson has worked for  the  company  since
inception for no compensation, and since May 7, 2001 has applied the majority
of  his  time  to Vital Living. A contract was formalized with Mr.  Edson  on
August  1,  2001.  The twelve-month contract calls for total compensation  of
$75,000  and  is for the term of one year, beginning on August  1,  2001  and
ending on July 31, 2002.

     The  Company  has  a receivable from Camper Club of America,  Inc.,  CCA
Products,  Inc. and a corporation previously doing business as  Vital  Living
totaling $37,372.  Interest is a 6%.  The Company has advanced $52,500 to two
officers.  Interest is at 6%.

     The  Company has an unsecured demand note payable to Brad Edson totaling
$43,500.   Interest  is  at 10%.  The Company also has payables  to  officers
totaling $147,926.

     The  Company  rents  its  office space from  an  affiliate  company  and
reimburses  that company for out-of-pocket supplies and miscellaneous  items.
Total amounts paid for rent and office costs was $51,095.

     The Company utilized consulting and professional services from Officers,
entities  owned  by  Officers  and consultants affiliated  with  the  Company
totaling $164,250.

<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     (a.) Exhibits
  Exhibit                              Description
  Number
  (1)        N/A
  (2)*       Agreement  and  Plan of Merger between Vital Living,  Inc.  and
             VCM Technology Limited
  (3)(i)*    Articles of Incorporation
             (a)   Certificate of Merger between Vital Living, Inc. and  VCM
             Technology Limited
             (b)   Amended and Restated Articles of Incorporation for  Vital
             Living, Inc.
  (3)(ii)*   Bylaws
             (a)  Amended and Restated Bylaws for Vital Living, Inc.
  (4)*       Instruments defining the rights of security holders:
  (4)(i)*    (a)  Articles of Incorporation
             (b)  Bylaws
  (5)        N/A
  (8)        N/A
  (9)        N/A
  (10.1)**   Agreement with Arizona Heart Institute dated August 21, 2001
  (10.2)**   Agreement with AHI Management Hong Kong, Ltd., Ltd. dated
             August 21, 2001
  (10.3)**   Employment agreement with Bradley D. Edson
  (10.4)**   Employment agreement with Eric Anderson
  (10.5)**   Employment agreement with Kenneth F. Lind
  (10.6)**   Consulting agreement with Howard Wernick
  (10.7)**   Consulting agreement with Michael Edson
  (10.8)**   Celebrity Endorsement Contract with Mark Hannah
  (10.9)**   Celebrity Endorsement Contract with William Kilmer
  (10.10)**  Celebrity Endorsement Contract with Babe Parilli
  (10.11**   Celebrity Endorsement Contract with Earl Morrall
  (10.12)**  Lock up Agreement with Brad Edson, Martin Gerst, Donald Hannah
             and Kenneth Lind
  (10.13)**  Amended Lock Up Agreement
  (10.14)**  Tempe, Arizona Property Lease
  (10.15)*** Amendment  to  Agreement with AHI Management Hong  Kong,  Ltd.,
             Ltd. dated February 26, 2002
  (10.16)    Consulting Agreement with Leslie D. Michelsom (filed herewith)
  (10.17)    Consulting Agreement with Brian C. Smith (filed herewith)
  (10.18)    Consulting Agreement with Michael H. Davidson (filed herewith)
  (11)       N/A
  (13)       N/A
  (15)       N/A
  (16)       N/A
  (17)       N/A
  (18)       N/A
  (19)       N/A
  (20)       N/A
  (21)       N/A
  (22)       N/A
  (23)       Consent of Auditor (filed herewith)

<PAGE>

  (24)       N/A
  (25)       N/A
  (26)       N/A
  (99)*      2001 Master Stock Option Plan
     *Filed in Form 8-K on October 1, 2001
     **Filed in Form 8-K on November 20, 2001
     ***Filed in Form 8-K on February 28, 2002

     (b.) Reports on Form 8-K - Filed in the Last Quarter
1.   8-K Report filed on October 1, 2001, Merger between Vital Living, Inc.
     and VCM Technology Limited.
2.   8-K Report filed on November 20, 2001, First Amended 8-K for the Merger
     between Vital Living, Inc. and VCM Technology Limited.
3.   8-K Report filed on December 17, 2001, Second Amended 8-K for the Merger
between Vital Living, Inc. and VCM Technology Limited.
               Subsequent Event - Form 8-Ks
 1.   8-K Report filed on February 28, 2002, the Company amended the
 Distribution Agreement dated August 21, 2001 with AHI Management Hong Kong,
 Ltd. Ltd.

<PAGE>
                                 SIGNATURES

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

                                   VITAL LIVING, INC.

                                   By:/s/ Kenneth Lind
                                         Kenneth F. Lind, President

                                   Dated:    April 1, 2002

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

NAME                     OFFICE              DATE

/s/ Kenneth Lind         President           April 1, 2002
Kenneth F. Lind


/s/ Brad Edson           CEO/ Director            April 1, 2002
Bradley D. Edson


/s/ Martin Gerst         Secretary/Treasurer      April 1, 2002
Martin J. Gerst          Director

<PAGE>
                              TABLE OF CONTENTS
                                                                         PAGE
INDEPENDENT AUDITORS' REPORT                                             F-1

BALANCE SHEET                                                            F-2

STATEMENT OF OPERATIONS                                                  F-3

STATEMENT OF STOCKHOLDERS' EQUITY                                        F-4

STATEMENT OF CASH FLOWS                                                  F-5

NOTES TO FINANCIAL STATEMENTS                                     F-6 - F-12

<PAGE>

                      REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of Vital Living, Inc.:

     We  have  audited the balance sheet of Vital Living, Inc. as of December
31,  2001 and the related statements of operations, shareholders' equity, and
cash  flows  for the period of inception (January 22, 2001) to  December  31,
2001.   These  financial statements are the responsibility of  the  Company's
management.   Our responsibility is to express an opinion on these  financial
statements and the schedule based on our audit.

     We  conducted our audit in accordance with auditing standards  generally
accepted  in  the United States.  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,  assessing  the  accounting   principles   used   and
significant  estimates  made  by  management,  and  evaluating  the   overall
financial  statement  presentation.  We believe that  our  audit  provides  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  Vital  Living,
Inc.  at December 31, 2001 and the results of their operations and their cash
flows  for  the  period of inception to December 31, 2001 in conformity  with
accounting principles generally accepted in the United States.

     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 has no established source of revenue.  This
raises  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.






WEAVER & MARTIN, LLC

Kansas City, Missouri

April 1, 2002

<PAGE>
       Vital Living Inc. (formerly known as Nutritional Systems, Inc.)
                                Balance Sheet
                              December 31, 2001

Assets
Current Assets:
     Cash                                                   $         179
     Accounts receivable                                            9,214
     Due from affiliates                                           37,372
     Due from employees                                            52,500
     Inventory                                                      1,887
     Prepaid expense and other current assets                      23,833
          Total current assets                                    124,985

Equipment                                                          75,443
Computer software                                                  23,350
Accumulated depreciation                                         (25,036)
                                                                   73,757

Intangible asset                                                   19,239
                                                            $     217,981

Liabilities and shareholders' equity
Current liabilities:
     Accounts payable                                       $     104,271
     Note and payables to Officers                                191,426
     Accrued liabilities                                            5,410
          Total current liabilities                               301,107

Commitments and contingencies

Shareholders' equity:
     Preferred stock par $.001, 50,000,000 shares
authorized
          no shares issued or outstanding                              --
     Common stock $.001 par value 100,000,000 shares
          Authorized, 13,626,554 issued and outstanding,           13,627
     Paid-in capital                                              946,159
     Retained deficit                                          (1,042,912
                                                                        )
Total shareholders' equity                                       (83,126)
                                                            $     217,981


                      See notes to financial statements
<PAGE>

     Vital Living Inc. (formerly known as Nutritional Systems, Inc.)
                           Statement of Operations
         Period of inception (January 22, 2001) to December 31, 2001

Revenue                                                    $       90,291

Cost of goods sold                                                 43,401
Inventory write down to market value                              262,627
          Total cost of goods sold                                306,028

Gross profit (loss)                                             (215,737)

Administrative expense:
     Labor costs                                                  232,173
     Organization cost                                            150,000
     Professional fees                                            221,928
     Office and equipment rent                                     48,624
     Travel                                                        31,878
     Miscellaneous                                                142,572
          Total administrative expense                            827,175

Net loss                                                   $  (1,042,912)

Basic and diluted earnings per share                       $       (0.08)

Weighted average shares outstanding                            12,917,693
                      See notes to financial statements

<PAGE>
       Vital Living Inc. (formerly known as Nutritional Systems, Inc.)
                      Statement of Shareholders' Equity
         Period of inception (January 22, 2001) to December 31, 2001

               Common      Common    Paid In     Retained         Total
               Shares      Stock     Capital      Deficit      Shareholder
                                                                   s'
                                                                 Equity
Inception      155,000   $    155  $  15,345  $          --  $      15,500

Asset
Purchase
     Cash      195,149        195      6,766             --          6,961
     Other
assets        11,176,4     11,177    387,440             --        398,617
                    05

Stock sale    2,100,00      2,100    536,608             --        538,708
                     0

Net Loss            --         --         --    (1,042,912)    (1,042,912)
              13,626,5   $ 13,627  $ 946,159  $ (1,042,912)  $    (83,126)
                    54

                      See notes to financial statements

<PAGE>
       Vital Living Inc. (formerly known as Nutritional Systems, Inc.)
                           Statement of Cash Flows
         Period of inception (January 22, 2001) to December 31, 2001
Operating activities:
     Net loss                                               $   (1,042,912
                                                                         )
Adjustments to reconcile net income to net cash used in
operating activities
     Depreciation and amortization                                  10,937
     Write down of inventory to market                             262,627
Change in assets and liabilities:
     Accounts receivable                                           (9,214)
     Due from affiliates                                          (37,372)
     Due from employees                                           (52,500)
     Inventory                                                      39,325
     Prepaid expense and other current assets                     (23,833)
     Accounts payable                                              104,271
     Accrued liabilities                                             5,410
     Cash used in operating activities                           (743,261)

Investing activities:
     Purchase of equipment                                         (9,155)

Financing activities:
     Note and payables to Officers                                 191,426
     Sale of common stock:
          Inception                                                 15,500
          Asset purchase                                             6,961
          Stock sale                                               538,708
     Cash provided by financing activities                         752,595

Increase in cash                                                       179
Cash at beginning of period                                             --
Cash at end of period                                       $          179

Noncash investing activities:
     Acquisition of assets with common stock                $      398,617

Supplemental cash flow information:
     Interest paid                                          $           --
     Income tax paid                                        $           --

                      See notes to financial statements
<PAGE>

Note 1 - Significant Accounting Policies

Description of Business:
  Nutritional  Systems,  Inc. was incorporated in  the  state  of  Nevada  on
  January  22, 2001.  On May 21, 2001, the company changed its name to  Vital
  Living,  Inc.  Vital Living develops and markets nutraceuticals  formulated
  by   Physicians  for  distribution  through  physicians.   The  company  is
  developing  and  testing  nutraceuticals  in  collaboration  with   medical
  experts  based  on  the best available scientific evidence.  Nutraceuticals
  are   designed   to   be  incorporated  by  physicians  into   a   standard
  physician/patient  program,  supported by a specially  designed  compliance
  regimen.

Inventories:
  Inventories  are  stated at the lower of cost (first-in, first-out  method)
  or market. Inventory consists of products available for sale.

Equipment and Software:
  Equipment  is  recorded  at  cost.  Software is recorded  at  its  purchase
  price.  Depreciation is provided on a straight-line basis. The  lives  used
  for items within each property classification range from 5 to 7 years.

Use of Estimates:
  The  preparation  of  financial  statements in  conformity  with  generally
  accepted  accounting principles requires management to make  estimates  and
  assumptions  that  affect the amounts reported in the financial  statements
  and   notes.  Actual  results  could  differ  from  those  estimates,   but
  management  does  not believe such differences will materially  affect  the
  Company's financial position, results of operations, or cash flows.

Revenue Recognition:
  Revenue is recognized when products are shipped to customers.

Cash Equivalents:
  The  Company's  cash  equivalents  consist  principally  of  any  financial
  instrument  with  maturities of generally three months  or  less  and  cash
  investments  with  high  quality  financial  institutions.  The  investment
  policy   limits  the  amount  of  credit  exposure  to  any  one  financial
  institution.

Intangible Asset:
  The  Company  capitalizes legal expenses incurred for  the  development  of
  trademarks.  The intangible asset is amortized over the 15 years.

Income Taxes:
  Amounts  provided for income tax expense are based on income  reported  for
  financial  statement  purpose  and  do not  necessarily  represent  amounts
  currently  payable under tax laws.  Deferred taxes, which arise principally
  from  temporary differences between the period in which certain income  and
  expense  items  are  recognized for financial reporting  purposes  and  the
  period  in  which they affect taxable income, are included in  the  amounts

<PAGE>

  provided  for income taxes.  Under this method, the computation of deferred
  tax  assets  and liabilities give recognition to the enacted tax  rates  in
  effect  in the year the differences are expected to affect taxable  income.
  Valuation allowances are established when necessary to reduce deferred  tax
  assets to amounts that the Company expects to realize.

Research and Development
  Research  and  development  costs  relating  to  both  present  and  future
  products   are  expensed  when  incurred.   There  were  no  research   and
  developmental expenses for the period ended December 31, 2001.

Estimated Fair Value of Financial Instruments
  Carrying   amounts  reported  in  the  balance  sheet  for  cash,  accounts
  receivable,  accounts  payable  and notes payable  approximate  their  fair
  value due to their short maturity.

Concentrations of Credit Risk
  Financial   instruments   that   potentially   subject   the   Company   to
  concentrations  of  credit risk consist principally of  cash.   At  various
  times  during  the  year,  the  Company has  cash  balances  in  excess  of
  federally  insured limits.  The Company maintains its cash, which  consists
  primarily  of  demand  deposits, with high quality financial  institutions,
  which the Company believes, limits risk.

Net Loss Per Share
  The  Company  computes  loss per share in accordance  with  SFAS  No.  128,
  Earnings Per Share.  This standard requires dual presentation of basic  and
  diluted  earnings  per share on the face of the income  statement  for  all
  entities  with complex capital structures and requires a reconciliation  of
  the   numerator  and  denominator  of  the  diluted  earnings   per   share
  computation.

  The  Company's  potentially issuable shares of  common  stock  pursuant  to
  outstanding   stock  options  are  excluded  from  the  Company's   diluted
  computation, as their effect would be anti-dilutive.

Long-Lived Assets
  Long-lived  Assets  and identifiable intangibles to be held  and  used  are
  reviewed  for  impairment  whenever  events  or  changes  in  circumstances
  indicate  that  the carrying amount may not be recoverable.  Impairment  is
  measured  by  comparing the carrying value of the long-lived asset  to  the
  estimated  undiscounted future cash flows expected to result  from  use  of
  the  assets and their eventual disposition.  The Company determined  as  of
  December  31, 2001, there had been no impairment in the carrying  value  of
  long-lived assets.

Recent Accounting Pronouncements
  In  June  2001,  the  Financial Accounting Standards  Board  (FASB)  issued
  Statement  of  Financial  Accounting Standards (SFAS)  No.  141,  "Business
  combination,"  and  SFAS No. 142, "Goodwill and Other  Intangible  Assets."
  These   pronouncements  provide  guidance  on  how  to  account   for   the
  acquisition of businesses and intangible assets, including goodwill,  which

<PAGE>

  arise  from such activities.  SFAS No. 141 affirms that only one method  of
  accounting  may be applied to a business combination, the purchase  method.
  SFAS  No.  142  provides that goodwill resulting from business combinations
  as  well as other intangible assets no longer be amortized to expense,  but
  rather  requires  an  annual assessment of impairment  and,  if  necessary,
  adjustments to the carrying value of goodwill.

  The  Company  does  not  expect the adoption of SFAS  No.  142  to  have  a
  material effect on its financial position or results from operations.

Note 2 - Contingencies

Going Concern:
  The  accompanying  financial  statements at December  31,  2001  have  been
  prepared  on  a going concern basis, which contemplates the realization  of
  assets  and  the  satisfaction  of liabilities  in  the  normal  course  of
  business.   The  Company  has suffered losses from  operations  during  its
  operating  history.   The ability of the Company to  continue  as  a  going
  concern   is   dependent  upon  obtaining  future  profitable   operations.
  Management is in the process of acquiring and developing products for  sale
  which  would  generate revenue to sustain the operations  of  the  Company.
  The  financial  statements do not include any adjustments relating  to  the
  recoverability and classification of recorded assets and classification  of
  liabilities  that  might  be necessary should  the  Company  be  unable  to
  continue as a going concern.

Note 3 - Mergers and Acquisitions

  On  May  7,  2001  the Company acquired assets from Vital Living,  Inc.  an
  Arizona  Corporation.  The fair market value ($405,578) of assets  acquired
  was  based  on  actual  cost  less any depreciation  or  amortization.   In
  consideration  for the assets the Company issued 11,371,554  common  shares
  restricted by Rule 144.  The assets acquired were as follows:

     Cash                                                      $       6,961
     Inventory                                                       303,839
     Equipment                                                        55,448
     Computer Software                                                19,180
     Intangible Asset< Legal fees, regarding trademark                20,150
                                                               $     405,578

  The  company also received the right to the name "Vital Living"  and  other
  product  names.   There  was no value assigned to the  goodwill  and  other
  proprietary items obtained in the acquisition.

  On  August 16, 2001 the Company merged with VCM Technology Limited (VCM) in
  a  reverse  acquisition merger.  VCM was a reporting public shell  with  no
  material  assets or liabilities and no operations.  Pursuant to  Rule  12g-

<PAGE>

  3(a)  of  the Securities Exchange Act of 1934, the Company is the successor
  issuer  to VCM for reporting purposes under the Securities Exchange Act  of
  1934,  as  amended.  The Company agreed to exchange 5,062 shares of  common
  stock  to  the sole stockholder of VCM in exchange for 100% of  the  issued
  and  outstanding stock VCM.  The shares had not been issued as of  December
  31, 2001.

Note 4 - Income Taxes

  The Company accounts for income taxes under the provisions of Statement  of
  Financial  Accounting  Standards  (SFAS) No.  109,  Accounting  for  Income
  Taxes.   SFAS  No.  109  is an asset and liability approach  for  computing
  deferred income taxes.

  As  of  December  31,  2001,  the Company had a net  operating  loss  carry
  forward   for   Federal   income  tax  reporting  purposes   amounting   to
  approximately $1,042,912, which expires in 2016.

  The  components of the deferred tax asset as of December 31,  2001  was  as
  follows:

                                                             2001
     Benefit of net operation loss carry forwards     $   417,000
     Less valuation allowance                             417,000
     Net deferred tax asset                           $        --

  As  of  December  31,  2001, sufficient uncertainty  exists  regarding  the
  realizability  of these operating loss carry forwards and,  accordingly,  a
  valuation allowance has been established.

Note 5 - Shareholders' Equity

  In  July  2001,  the Company completed a public offering that  was  offered
  without  registration  under the Securities Act of 1933,  as  amended  (The
  "Act"),  in  reliance  upon  the exemption from  registration  afforded  by
  Section   3(b)   of  the  Securities  Act  and  Regulation  D   promulgated
  thereunder.    On  June  26,  2001  the  Company  received  a   letter   of
  effectiveness  for its registration filed under NRS 90.490 with  the  State
  of  Nevada  Securities Division.  The registration pertained  to  2,100,000
  shares of common stock at a price of $0.28 per share for a total amount  of
  $588,000.   Pursuant  to  the registration, the  Company  raised  the  full
  amount  of  $588,000.   This amount and any prior securities  sold  by  the
  company  in  the prior 12 months did not exceed $1 million.  The securities
  were  sold pursuant to Nevada regulations utilizing a series 63 agent, with
  a  fee  paid  of  2%  of  the total funds raised  in  Nevada  for  handling
  prospectus delivery, subscription monitoring and handling the bank  impound
  account.

  On  August  14,  2001 the Company amended it Articles of  Incorporation  to
  increase  the  authorized capitalization to 100,000,000  shares  of  common
  stock  with  par  value of $0.001 and 50,000,000 shared of preferred  stock
  with a par value of $0.001.

<PAGE>

Note 6 - Stock Option Plan and Stock Warrants

  The  2001  stock option plan (Plan) allows the company to grant options  to
  employees,  officers,  directors, consultants and independent  contractors.
  A maximum of 2,500,000 shares are authorized under issuance of the Plan.

  On  August  1,  2001,  the  company issued  45,000  options  each  to  four
  individuals  for  marketing.  The options vest quarterly over  three  years
  and  are  exercisable at a price of $.35 per share.  The option are  for  a
  five year period.

  On  August  21,  2001,  the Company entered into a  distribution  agreement
  whereby  the  Company's  products  are to  be  sold  to  the  distributor's
  customers.  In consideration for the services performed the Company  issued
  1,000,000  options.  The exercise price is $.35 per option and the  options
  have  a five year life.  At the execution of the agreement, 300,000 options
  were  vested,  provided  that the options are  subject  to  recall  if  the
  distributor  does  not have $2,000,000 of gross aggregate  sales  in  a  30
  month  period.   The remaining options vest as follows:   100,000  vest  at
  aggregate  sales  of  $5,000,000;  200,000  vest  at  aggregate  sales   of
  $8,000,000;  200,000  vest at aggregate sales of $12,000,000;  and  200,000
  vest at aggregate sales of $15,000,000.

  On  August  21,  2001,  the Company entered into an agreement  whereby  the
  Company's  products will be endorsed and a logo identifying  the  developer
  will  be  put  on  the  products.  In consideration for  the  services  the
  Company  issued  1,000,000 options.  The exercise price is $.35  per  share
  and  the  options  have a two year life from the date  the  options  become
  vested.   600,000  options are issued upon agreeing to  the  contract.   An
  additional  200,000 options will vest when the organization  has  aggregate
  sales  of  $1,000,000 and an additional 200,000 options vest when aggregate
  sales reach $1,500,000.

  Granted  and Outstanding options at December 31, 2001 were 2,180,000  at  a
  price of $.35.  No options were exercised or cancelled.  The fair value  of
  the  options  was zero based on the Black-Scholes pricing  model  with  the
  following assumptions:

     Dividend yield                                            0%
     Volatility                                                0%
     Weighted average expected life                       3 years
     Risk free interest rates                               3.76%

  On  October  1,  2001 the Company entered into employment  agreements  with
  certain  Officers  of the Company.  In conjunction with  those  agreements,
  the  Company issued warrants to purchase stock at an exercise price of $.35
  per  share  exercisable  for three years.  The  total  number  of  warrants
  issued  was  1,750,000.   The value of the warrants  based  on  the  Black-
  Scholes  pricing  model was zero and was based on the same  assumptions  as
  above.

<PAGE>

Note 7 - Inventory Writedown

  At  September 30, 2001 the Company wrote its inventory down to  the  market
  of  the  overall  inventory.  This was done because sales of  the  products
  were  not  as  expected  and  the  products  were  within  six  months   of
  expiration.

Note 8 - Commitments

  The  Company  entered  into  an operating lease for  office  and  warehouse
  space.   The term of the lease is month-to-month with a minimum of 90  days
  needed  to terminate the lease.  The lease is with an affiliated entity  of
  an  officer  of  the  Company.   The monthly  rent  is  $2,500  per  month.
  Beginning May 7, 2002 the monthly rent will increase to $2,750 per month.

  On  October  1,  2001, the Company entered into employment agreements  with
  three  Officers.  The agreements called for base salaries for  three  years
  covered  by  the  agreement  of  $430,000;  $456,000;  and  $480,000.    In
  addition,  1,750,000 warrants were issued (see Note  7)  and  a  bonus  was
  accrued totaling $54,000.

  The  Company  has a consulting agreement with $31,000 unearned at  December
  31, 2001.  The remaining payments are due in 2002.

Note 9 - Prepaid Expenses

  Included in prepaid expense is three months of rent totaling $7,500.   This
  will  be  expensed at $2,500 per month.  Also included is eight  months  of
  consulting retainer totaling $18,333.  This will be expensed at $1,667  per
  month.

Note 10 - Related Party Transactions

  The  company  has  a  receivable from Camper Club  of  America,  Inc.,  CCA
  Products, Inc. and a corporation previously doing business as Vital  Living
  totaling $37,372.  Interest is at 6%.  The Company has advanced $52,500  to
  two officers.  Interest is at 6%.

  The  Company  has  an unsecured demand note payable to the chief  executive
  officer  totaling  $43,500.   Interest is at 10%.   The  Company  also  has
  payables to officers totaling $147,926.

  The   Company  rents  its  office  space  from  an  affiliate  company  and
  reimburses  that  company  for  out-of-pocket  supplies  and  miscellaneous
  items.  Total amounts paid for rent and office costs was $51,095.

  The  Company  utilized consulting and professional services from  Officers,
  entities  owned  by Officers and consultants affiliated  with  the  Company
  totaling $164,250.

<PAGE>

Note 11 - Subsequent Event

  In  January  2002, the Company granted 75,000 options to an employee.   The
  exercise  price  is  $1.00 and the options vest yearly subject  to  certain
  provisions  that can accelerate vesting.  There are 25,000 options  vesting
  in year 1, 2 and year 3.  The option will expire in January 2006.

  On  March  25, 2002 Vital Living entered into a 2 year Consulting Agreement
  with  Leslie D. Michelson.  Under the terms of the agreement Mr. Michelson,
  in  addition  to monthly payments of $2,000, received warrants to  purchase
  500,000  shares  of common stock in Vital Living at a price  of  $1.00  per
  share.   The  warrants vest over 17 months. The warrants are  being  issued
  without registration based upon the relationship between Mr. Michelson  and
  Mr.  Edson,  in reliance upon the exemption from registration  afforded  by
  Section 4(2), and Rule 701 of the Securities Act.

  On  March  25, 2002 Vital Living entered into a 2 year Consulting Agreement
  with  Brian  C.  Smith.   Under the terms of the agreement  Mr.  Smith,  in
  addition  to  monthly  payments of $2,000, received  warrants  to  purchase
  150,000  shares  of common stock in Vital Living at a price  of  $1.00  per
  share.   The  warrants vest over 17 months.  The warrants are being  issued
  without registration based upon the relationship between Mr. Smith and  Mr.
  Edson,  in  reliance  upon  the  exemption form  registration  afforded  by
  Section 4(2), and Rule 702 of the Securities Act.

  On  March  25, 2002 Vital Living entered into a 2 year Consulting Agreement
  with  Michael H. Davidson.  Under the terms of the agreement Dr.  Davidson,
  in  addition to monthly payments of $4,200 per month, received  options  to
  purchase  200,000  shares of common stock in Vital Living  at  a  price  of
  $1.00  per  share.  The options vest over 17 months. The options are  being
  issued  without  registration  based  upon  the  relationship  between  Dr.
  Davidson  and  Mr. Edson, in reliance upon the exemption form  registration
  afforded by Section 4(2), Rule 702 of the Securities Act.

  In  February  and  March,  2002, the Company sold  in  various  transaction
  175,000 shares of 10% Series A Preferred Stock (stock) at a price of  $1.00
  per  share.   The shares were sold without registration.  The stock  had  a
  dividend  provision  of  10%  per annum paid semi-annually;  preference  in
  liquidation of $1.00 per share; redemption at the preference of  the  Board
  of  Directors within twelve months paying $1.50 per share; and  convertible
  at  any time after one year of issuance (and prior to the redemption  date,
  in  any,  fixed  in the redemption notice).  The conversion price  for  the
  period  of  the  first anniversary to the fifteenth month  if  issuance  is
  equal  to  the initial payment price ($1.00) or the fifteenth to eighteenth
  month  at  a price of 60% of the average closing price of the common  stock
  for  30  days prior to conversion or after the eighteenth month  the  stock
  automatically  converts  at  the  greater  if  issued  price   or   trading
  conversion price.