SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
     of 1934 [Fee  Required]  

For the fiscal  year  ended  December  31,  1998 or 

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 [No Fee  Required]

For the  transition  period from  _______________  to ________________ .


Commission File No. 33-75236


                                 LONGPORT, INC.
                  --------------------------------------------
                 (Name of Small Business Issuer in its Charter)


           Delaware                                          23-2715528
-------------------------------                        -----------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                         Identification  Number)


791 South Chester Road
Swarthmore, Pennsylvania                                        19081
---------------------------------------                 ---------------------
(Address of principal executive offices)                      (Zip Code)



Issuer's telephone number:  (610) 328-5006

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

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


                          $.001 Par Value Common Stock
                         Common Stock Purchase Warrants
                         ------------------------------
                                (Title of Class)


<PAGE>



Check  whether  the  Registrant  (1) 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
                                      -----       -----

     As of March 15, 1999, 16,160,949 shares of the Registrant's $.001 par value
Common  Stock were  outstanding.  As of April 9, 1999,  the market  value of the
Registrant's Common Stock, excluding shares held by affiliates,  was $17,231,054
based  upon a  closing  bid  price of $1.90  per  share of  Common  Stock on the
Electronic Bulletin Board.

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

     The Registrant's revenue for its most recent fiscal year was $347,776.

     The following  documents are incorporated by reference into Part III, Items
9 through 12 hereof: None.



                                        2

<PAGE>



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS
-------  -----------------------

     The following is a summary of certain information  contained in this Report
and is  qualified  in its entirety by the  detailed  information  and  financial
statements that appear elsewhere herein.  Except for the historical  information
contained herein,  the matters set forth in this Report include  forward-looking
statements  within the meaning of the "safe  harbor"  provisions  of the Private
Securities Litigation Reform Act of 1995. These  forward-looking  statements are
subject  to risks and  uncertainties  that may cause  actual  results  to differ
materially. These risks and uncertainties are detailed throughout the Report and
will be further  discussed from time to time in the Company's  periodic  reports
filed with the Commission. The forward-looking statements included in the Report
speak only as of the date hereof.

Business

     The Company has been assigned the patent and intellectual property right to
a soft tissue ultrasound scanner ("Scanner") developed at the United Medical and
Dental Schools of Guy's and St. Thomas's  Hospitals  ("UMDS") located in London,
England. The Scanner produces a high resolution image of the skin and the tissue
up to two centimeters below the skin allowing  clinicians to check the status of
a wound, and the surrounding tissue, without having to incise the patient or put
a probing  device in the fragile  wound bed.  When used with a coupling gel, the
Scanner can  penetrate  certain  types of wound  dressings and produce an image,
thus avoiding  risks of infection and  protecting  the wound surface  during the
scanning process.

     Traditional   low-frequency  ultrasound  equipment,   costing  $150,000  to
$350,000,  is generally  unable to image thin  structures like skin. The Company
believes that the Scanner's  ability to produce  high-resolution  images of thin
structures,  such as skin,  subcutaneous  tissue  and  superficial  tendons,  is
unique.

     Ultrasound  has been used for medical  images for many years and has proven
to be a safe, effective imaging device. Using sound waves emitted at frequencies
well above the normal human ear  response,  echoed  signals are  converted  into
graphic  images and  displayed  on a monitor.  Computer  programs  that  support
ultrasound imaging use algorithms to document dimensions of areas being scanned.
These measurements  provide a baseline that the system and the clinician can use
to compare to other scans.  The Scanner shares these  characteristics  which are
common  to  all  ultrasound  imaging  equipment,  but  utilizes  high  frequency
ultrasound  at 20 MHz to  provide  high  resolution  images at depths of up to 2
centimeters.  This  compares  to the  ultrasound  frequency  used to scan  fetal
images,  which  generally  ranges  from  4 to  7  MHz.  Conventional  ultrasound
equipment utilizes up to 10 MHz.

     The depth used by the  Scanner to  produce a useable  image  depends on the
area being scanned and the clinical  application.  For  instance,  wounds on the
ankle require an image depth of only 2 to 4  millimeters,  an area generally too
small to resolve using conventional  imaging  technology,  but ideally suited to


                                        3

<PAGE>


the use of the Scanner.  The Scanner  provides a clinician with a clear picture,
at 65 by 200 microns, of the entire wound area. Consequently, the clinician need
not disturb the wound with invasive procedures that can cause additional damage.
Since  wounds  develop  and begin to heal from the inside,  underneath  the skin
surface,  the ability to observe the entire  wound,  up to 2  centimeters  deep,
gives  clinicians  a much better  understanding  of the  patient's  tissue.  The
ability to observe minute changes just below the skin's surface during the early
stages of  treatment  gives the  clinician a picture of the  wound's  status and
allows them to evaluate the  treatment's  success  faster than  current  methods
permit.  The Scanner uses a proprietary  software program to allow the clinician
to objectively  measure  changes in the wound.  The ability to track the healing
process  becomes  critical during the early stages of a treatment  program.  The
Company  believes that with the Scanner,  a clinician can identify the status of
healing within days of starting treatment,  instead of waiting up to a month for
changes to appear on the wound surface.  This helps clinicians quickly determine
whether protocol changes are required, helping to decrease the healing time.

     The  Scanner  weighs 15 pounds  and is similar  in  dimensions  to a laptop
computer.  The Company's proposed monthly fees of approximately $2,000 per month
is expected to make the Scanner  cost  effective  for  dermatological  surgeons,
podiatrists, family practitioners and doctors of sports medicine.

Government Regulation

     The Company must obtain  clearance from the FDA to market the Scanner.  The
research, development, testing, production and marketing of new medical products
are  subject  to  extensive   government   regulation  in  the  United   States.
Noncompliance  with  these  regulations  may  result  in recall  or  seizure  of
products,  total or partial suspension of production,  refusal of the government
to allow  clinical  studies or  commercial  distribution  of the  device,  civil
penalties or fines and criminal prosecution.

     There are two  primary  paths to  obtaining  FDA  clearance  to market  the
Scanner:   510(k)  premarket   clearance  or  an  approved   Premarket  Approval
Application.  The path through which the device travels to market  clearance has
significant  impacts  with  regard to time and cost,  as  illustrated  at right.
Obtaining  510(k)  clearance  usually  takes  between  six and 18  months.  This
compares  to the one to ten years  generally  required  to obtain  approval of a
Premarket Approval Application. Management believes (but cannot assure) that the
Scanner will qualify for 510(k) clearance.

     According to the Food,  Drug and  Cosmetic  Act (the "FDA Act"),  a medical
device  will be  classified  as either a Class I, Class II or Class III  device.
Class I devices are subject to general controls, including registration,  device
listing,   record-keeping   requirements,   labeling   requirements   and  "Good
Manufacturing  Practices"  (as such term is defined in the FDA Act). In addition
to general  controls,  Class II devices may be subject to special  controls that
could  include  performance  standards,  and  other  actions  as the  FDA  deems
necessary to provide reasonable assurance of safety and effectiveness. Class III
devices  must  meet  the  most  stringent  regulatory  requirements  and must be


                                        4

<PAGE>



approved by the FDA before they can be marketed.  Such  pre-market  approval can
involve  extensive  pre-clinical  and  clinical  testing  to  prove  safety  and
effectiveness of the devices.

     All medical devices introduced to the market since 1976 are required by the
FDA, as a condition of marketing,  to secure either a 510(k) premarket clearance
or an approved Premarket Approval Application ("PMA"). A product qualifies for a
510(k) pre-market  notification  clearance if it is substantially  equivalent in
terms of safety,  effectiveness  and  intended use to another  legally  marketed
medical device. If a product is not  substantially  equivalent to such a device,
the FDA must  first  approve a PMA  application  before it can be  marketed.  An
approved PMA  application  indicates that the FDA has determined  the. device as
been proven, through the submission of clinical data and supporting information,
to be safe and effective for its labeled indications.  The PMA process typically
takes more than a year and requires the submission of significant  quantities of
clinical data and supporting information,  while the process of obtaining 510(k)
clearance typically takes less than one year and involves the submission of less
clinical data and supporting information.

     An  entity  must file  with FDA even if the  device is simply  "new" to the
particular  entity,  and is  otherwise a well-known  device in the  marketplace.
Since the Scanner, if it achieves commercial viability,  will be introduced into
commerce within the United States for the first time by the Company,  it will be
considered a "new device" under the FDA regulations and will require appropriate
filing  with  the  FDA.  The FDA  has  already  classified  and  approved  other
diagnostic  ultrasound  devices  that the  Company  believes  are  substantially
equivalent to the Scanner, as Class II medical devices. The Company expects that
a 510(k)  premarket  approval  notification  clearance  will be required and has
completed all necessary  filings,  including the  identification  of the legally
marketed device that is the most equivalent with the Scanner.

Marketing

     The Company will focus its initial marketing efforts on capturing customers
that will use the  Scanner for its wound  healing  applications.  This  includes
markets for skin ulcer, diabetes, and trauma wound treatments. Wound management,
the  process  of  treating  various  types  of  wounds,   is  an  expanding  and
increasingly  important area of concern for the medical profession.  The cost of
treating  chronic  wounds  alone has been  estimated at $5 billion to $7 billion
annually.  Healthcare  providers  in the US spent  nearly  $2  billion  on wound
management products in 1998, with sales internationally in excess of $6 billion.
The combined segments are expected to grow to over $9 billion by the year 2002.

     Over  $90  billion  per  year  is  spent  on  treating  America's  diabetic
population.  With more than  625,000 new cases per year,  the  Company  believes
there is value for a device  that  accelerates  diagnosis  of  diabetic  wounds.
Having a view of the wound and  surrounding  tissue is  expected  to  materially
reduce the risks of amputations, thereby increasing the survival rate.

                                       5

<PAGE>


Competition

     Diagnostic  imaging  solutions compete primarily on the basis of diagnostic
value,  imaging  performance,  reliability,  ease of use and price.  The Company
believes  that the Scanner will be proven to have the ability to deliver each of
these   criteria.   Nevertheless,   the  Company  faces  current  and  potential
competitors,  including MRI producers, ultrasound manufacturers, and X-ray based
topography  solutions.   Moreover,  current  and  potential  diagnostic  imaging
modalities such as those described below pose a significant  competitive risk to
the Company:

     a.  Existing  (Low  Frequency)   Ultrasound   Manufacturers  -  Traditional
ultrasound  technology is used regularly for a number of clinical  applications.
Several  types of  ultrasound  exist  currently,  including  pulsed  ultrasound,
continuous wave "Doppler" ultrasound and real-time ultrasound. Each variation is
particularly suited to certain applications.  For instance, "Doppler" ultrasound
is used to record  changes in a fetal heart while pulsed  ultrasound can be used
to resolve images of the abdomen. The Scanner is significantly less expensive to
operate and smaller in size than traditional ultrasound devices.

     b. Magnetic Resonance Imaging (MRI) - Magnetic resonance imaging is used in
medical  settings to produce high quality  images of the inside of the body. MRI
is based on the  principles of nuclear  magnetic  resonance  (NMR),  a technique
originally  used by chemists and physicists to obtain  microscopic  chemical and
physical information about molecules. In the Company's opinion, the costs, space
requirements and resolution capabilities of the Scanner are superior to MRI.

     c.  Conventional  X-Ray - X-ray systems pass radiation through an area of a
patient to a shielded  photographic  plate.  Due to the health risks  associated
with  exposure to  ionizing  radiation,  operating  x-ray  equipment  requires a
controlled environment and trained professionals.  Additionally, operating x-ray
equipment requires film and in many cases, board certified radiologists. Despite
these barriers  x-ray  technologies  is effective for a number of  applications,
including skeletal  examinations and mammography.  However,  x-rays cannot image
thin tissue structures.

Technology Transfer Agreements

     In  December  1997  the  Company  entered  into  two  Technology   Transfer
Agreements (the  "Agreements") with the United Medical and Dental Schools of St.
Guy's and St. Thomas's Hospitals ("UMDS") and Square Wave Systems,  Ltd. ("SWS")
pursuant to which UMDS and SWS assigned  all of their right,  title and interest
in and  to an  international  patent  application  and a  South  African  patent
application  (the "Patents")  covering  certain  technology  associated with the
Scanner.  The  Agreements  provide the Company with the exclusive and world wide
rights to the use of the Scanner  technology  underlying the Patents for medical
applications  only.  UMDS and SWS  retained the rights to all other uses for the
Patents.  However,  in the case of the  fractal  analysis  software,  a software
component of the Scanner  which is used to analyze,  determine  and  graphically
display the fractal nature of a reflected  image  generated from a Scanner,  the
Company's  rights are limited to the use of software  solely in a high frequency
ultra sound skin scanner.  In  consideration of the assignment of the technology
pursuant to the  Agreements,  the Company  agreed to pay to UMDS and SWS, in the
aggregate,  3% of  the  Company's  gross  revenues  for  the  five  year  period


                                        6

<PAGE>


commencing  at such time as the FDA grants  marketing  permission to the Company
with respect to the Scanner. The Company also agreed to pay all costs associated
with  maintaining  and  renewing  the  Patents  and all  costs  associated  with
obtaining FDA marketing permission for the Scanner.

     In the event the Company  defaults  under the payment or any other terms of
the  Agreements,  UMDS and SWS are  granted  the right to market the  technology
underlying the Patents and the Scanner in direct competition to the Company.

     There can be no assurance that the Patents will afford  protection  against
competitors with similar technology, that the Patents will not be infringed upon
or  designed  around by others,  that others  will not obtain  patents  that the
Company  will  need to  license  or design  around,  that the  Patents  will not
inadvertently  infringe  upon the  patents of others,  or that  others  will not
manufacture  and  distribute  similar  scanners upon  expiration of the Patents.
There can also be no assurance  that the Patents will not be invalidated or that
the Company will have adequate  funds to finance the high cost of prosecuting or
defending patent validity or infringement issues.

Employees

     The Company  employs  three full time  employees,  including  its executive
officers.

ITEM 2.  DESCRIPTION OF PROPERTY
--------------------------------

     The Company leases  approximately  1,000 square feet of office space at 791
South Chester Road,  Swarthmore,  Pennsylvania  on a 12-month  lease expiring on
December 31, 1999 at $725 per month.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

     The Company is the Plaintiff in an action entitled Longport, Inc., et al v.
Rosner,  Bresler,  Goodman & Buckholz, et al., Civil Action No. 002989, filed in
1997 in the Philadelphia  Court of Common Pleas. The action alleges wrongful use
of civil  proceedings and civil  conspiracy  against the  defendants,  and seeks
compensatory and punitive damages.

     In September 1997, the Company was notified of a Medicare Hearing Officer's
decision  that  the  Company  is  liable  for  repayment  of  Medicare   Benefit
Overpayments  of $269,120.  The  Overpayments  are from calendar  years 1994 and
1995. The Company has appealed the Hearing  Officer's  decision.  The Appeal was
heard by an Administrative  Law Judge on January 5, 1999. The Administrative Law
Judge reviewed  fourteen cases out of  approximately  500 cases in dispute.  The
Administrative  Law Judge  rendered his decision on February 18, 1999  regarding
the fourteen cases as follows:

     A.   Five cases were dismissed.

     B.   Three cases were  decided as  partially  unfavorable  resulting  in an
          overpayment of $1,434 and two cases which need to be recalculated.

     C.   Six cases were decided as  unfavorable  resulting in an overpayment of
          $6,420.

     The other cases were not  reviewed  and the  Company  does not know if they
will be reviewed by the  Administrative  Law Judge. The Company has the right to
appeal the  Administrative  Law Judge's decision with the Appeals  Council.  The
Appeal must be written and filed within sixty days. The Company  currently plans
to appeal the  Administrative  Law  Judge's  decision.  The Company is unable to
predict the outcome of the Appeal. However,  Management believes that there were
no Medicare Benefit Overpayments in 1994 and 1995 and will vigorously defend its
position.

     Payment of any  judgement or  settlement  in  connection  with the Medicare
Benefit  Overpayments  Appeal  together  with the costs of defending the Appeal,
could  adversely  affect the  Company's  results  of  operations  and  financial
condition.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

     Not applicable.

                                            


                                        7

<PAGE>

                                    PART II
                                    -------

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-----------------------------------------------------------------

     The Company's  Common Stock has traded on the Electronic  Bulletin Board of
the National Quotation Bureau under the symbol "LPTI" since September 7, 1994.

     The following table sets forth for the quarters indicated the range of high
and low closing prices of the Company's Common Stock as reported by the National
Quotation Bureau, but does not include retail markup, markdown or commissions.

                                                     Price
                                            -----------------------
By Quarter Ended:                              High          Low
                                            ---------     ---------

Fiscal 1997
March 31, 1997                              $     .31     $     .06
June 30, 1997                               $     .31     $     .06
September 30, 1997                          $     .50     $     .06
December 31, 1997                           $    2.00     $     .31

Fiscal 1998
March 31, 1998                              $    1.62     $     .88
June 30, 1998                               $    2.62     $    1.56
September 30, 1998                          $    2.12     $     .75
December 31, 1998                           $    2.00     $     .56

Fiscal 1999
March 31, 1999 (through March 15, 1999)     $    1.80     $    1.20

     As of March  15,  1999,  there  were  16,160,949  shares  of  Common  Stock
outstanding held by approximately 325 record and beneficial stockholders.

Transfer Agent and Warrant Agent

     The Company has appointed Corporate Stock Transfer,  Inc., 370 17th Street,
Suite 2350, Denver, Colorado 80202, as its transfer agent and warrant agent.

Dividends

     The Company has not paid dividends on its Common Stock since  inception and
does not plan to pay dividends in the foreseeable future. Earnings, if any, will
be retained to finance growth.


                                        8

<PAGE>



Limitation on Liability

     The Company's  Certificate of Incorporation  provides that a director shall
not be personally liable to the Company or its stockholders for any action taken
or any failure to act to the full extent  permitted  by the  Delaware  law.  The
effect of this  provision  is to  eliminate  the rights of the  Company  and its
stockholders,  through stockholders'  derivative suits on behalf of the Company,
to recover  monetary damages from a director for breach of the fiduciary duty of
care as a  director  including  breaches  resulting  from  negligent  or grossly
negligent behavior. This provision does not limit or eliminate the rights of the
Company or any stockholder to seek non-monetary  relief such as an injunction or
rescission  in the  event of a breach  of a  director's  duty of care or to seek
monetary  damages for (i) a violation of criminal law, (ii) unlawful  payment of
dividends or other distribution under Delaware law, (iii) a transaction in which
a director derived an improper personal benefit, (iv) willful misconduct, or (v)
reckless, malicious or wanton acts.




                                        9

<PAGE>



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

Results of Operations

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

     Revenues  for 1998 were  $347,776  compared  to  $171,786  for 1997.  While
revenues  from  medical  supplies  and  equipment  sales and rentals  decreased,
revenues  generated from wound center  management fees remained  essentially the
same, $109,500 and $102,000, respectively. Licensing and marketing fees for 1998
were $219,500,  compared to $34,000 in 1997.  This change  reflects the shift in
the  Company's  business  philosophy  from  reliance on sales and  rentals.  The
Company expects licensing and marketing fees to increase in the future.

     Total  expenses  increased  to  $2,431,472  in 1998 from  $365,357 in 1997.
Operating  expenses  for 1998  include  compensation  from the issuance of stock
options,  totaling  $1,087,000 and $643,583 in compensation paid in Common Stock
for services  rendered in research and development.  This increase  reflects the
Company's  commitment to the development of the Scanner technology.  The Company
expects  research and  development  expenses  related to the Scanner to increase
over time,  as these  expenses are  necessary to seeking FDA clearance to market
the Scanner.

     The Company  experienced a net loss of  $2,085,306  in 1998,  compared to a
$214,681 loss for 1997, an 871%  increase.  However,  $1,730,583 of the loss for
1998 was due to the issuance of stock  options and  compensation  paid in Common
Stock,  as noted in the  preceding  paragraph.  The Company does not  anticipate
incurring similar extraordinary expenses in the future.

     During  1998,  the  Company  continued  to  foster  new  growth  under  its
services-oriented  plan. In 1998,  the Company  focused its efforts on obtaining
licensing and marketing  agreements.  These agreements  entitle the Licensees to
market the Company's  programs and Scanner,  upon 510(k) clearance from the FDA.
The  Company  anticipates  an  increase  in  revenues  in 1999,  mainly  through
marketing and licensing agreements.

Liquidity and Capital Resources

     In 1998,  the  Company  sold a total of  719,667  shares of its  restricted
Common Stock to current and new shareholders.  The shares were sold between $.50
and $.80 per share, netting the Company a total of $416,580.

Year 2000 Issues

     Many  computers,  software  programs  and  other  equipment  with  embedded
computer  chips  (systems) in use today  utilize two digits to specify the year,
such as "98" for 1998  (the Y2K  issue).  As a  result  of the Y2K  issue,  such
systems  may  recognize  a date using "00" as the year 1900 rather than the year
2000.  In  some  cases,  the  date  "00"  may  cause  system(s)   failure(s)  or
miscalculations causing disruptions of the Company's operations.

                                       10

<PAGE>




     In early 1998 the Company began formulating a comprehensive  plan to assess
the  Company's  Y2K  issues.  The plan  calls  for the  identification  of those
systems, both internal and external, which are critical to the Company's ability
to continue  normal  operations,  the  assessment  of any  required  remediation
(including any upgrading,  modification and replacement of computer hardware and
software  and  adequate  testing to ensure Y2K  compliance),  and the  resources
needed to bring those critical systems into Y2K compliance.

     The internal  systems under  evaluation  include the Company's  accounting,
data  processing,  telephone  and  other  miscellaneous  information  technology
systems,  as well as alarm  systems,  printers,  fax  machines  and modems.  The
Company   believes  that  it  has  identified  the  internal  systems  that  are
susceptible  to failure or  potential  processing  errors as a result of the Y2K
issue.  The  Company is  concentrating  its Y2K  efforts on these  systems.  The
Company  anticipates  that its Y2K  identification,  assessment and  remediation
efforts for  critical  internal  systems  will be  completed  by June 30,  1999.
However, testing for Y2K compliance will be an ongoing process.

     The Company believes that its computer hardware and related peripherals are
currently Y2K compliant based upon representations made by the providers of such
equipment.  The Company also believes that its accounting  and payroll  software
systems  are Y2K  compliant  and  testing  to  ensure  such  compliance  will be
completed by June 30, 1999.

     The Company is reviewing,  and has initiated written  communications  with,
other third parties providing goods or services,  such as financial institutions
and utility companies, which may be critical to the Company's operations to: (i)
ascertain the extent to which the Company may be exposed to adverse  effects for
any  failure  by such third  parties to  remediate  their Y2K  issues;  and (ii)
resolve, to the extent practicable,  such problems.  However, the Company has no
control over and has only limited  ability to influence  such third parties' Y2K
compliance.  The failure of such third  parties to achieve Y2K  compliance  in a
timely  manner  and the  potential  inability  to  replace  such a  third  party
provider, could adversely impact the Company's operations.

     The Company currently estimates that the total identifiable cost of its Y2K
compliance effort will not exceed $10,000.  As of December 31, 1998, the Company
has incurred approximately $5,000 to upgrade its computer hardware and software.
The Company does not track  personnel  costs  associated with its Y2K compliance
effort. The Company expects to fund Y2K expenditures from internal sources.

     Based on the progress made to date and its  timetable for further  progress
in attaining  Y2K  compliance,  the Company does not  currently  anticipate  any
significant risks associated with its Y2K issues.  However,  management believes
that it is not possible to determine with absolute certainty that all Y2K issues
pertaining to the Company have or will be identified and corrected.  Because the
assessment of its Y2K issues is incomplete at this time,  the Company has yet to
determine the most reasonably likely worst case scenario relating to Y2K issues,

                                       11

<PAGE>



and has yet to complete a comprehensive contingency plan with respect to its Y2K
issues. The Company anticipates  completing the Y2K assessment and comprehensive
contingency plan by September 30, 1999.

ITEM 7.  FINANCIAL STATEMENTS






















                                       12


<PAGE>
                         LONGPORT, INC. AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                  
Financial Statements                                                    Page
--------------------                                                    ---- 

Independent Auditors' Report                                            F-2

Consolidated Balance Sheet as of December 31, 1998                      F-3

Consolidated Statements of Operations for the years ended
   December 31, 1998 and 1997                                           F-5

Consolidated Statements of Changes in Stockholders' Equity for the
   years ended December 31, 1998 and 1997                               F-6

Consolidated Statements of Cash flows for the years ended
   December 31, 1998 and 1997                                           F-7

Notes To Consolidated Financial Statements                              F-8




                                      F-1

<PAGE>



                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors
Longport, Inc.


We have audited the accompanying  consolidated  balance sheet of Longport,  Inc.
and Subsidiary as of December 31, 1998, and the related consolidated  statements
of  operations,  changes  in  stockholders'  equity and cash flows for the years
ended  December  31,  1998  and  1997.   These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Longport, Inc. and
Subsidiary  as of  December  31,  1998  and  the  consolidated  results  of  its
operations  and its cash flows for the years ended December 31, 1998 and 1997 in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company incurred a net loss of $2,085,306 during the year ended December 31,
1998.  As  discussed  in  Note  1 to the  financial  statements,  the  Company's
significant  operating  losses  raise  substantial  doubt  about its  ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  discussed  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.




                                                 Angell & Deering
                                                 Certified Public Accountants

Denver, Colorado
January 19, 1999, except for the
second caption in Note 6 as to
which the date is February 18, 1999.



                                      F-2

<PAGE>

                         LONGPORT, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1998



                                     ASSETS
                                     ------

Current Assets:
  Cash and cash equivalents                                           $ 127,853
  Accounts receivable - trade, net of
   allowance for doubtful  accounts of $3,600                            10,878
  Inventories                                                            25,467
  Prepaid expenses                                                       29,951
  Current portion of note receivable                                      3,750
                                                                      ---------

          Total Current Assets                                          197,899
                                                                      ---------

Property and Equipment, at cost:
  Medical equipment                                                      80,324
  Computer equipment                                                     10,305
  Office furniture and equipment                                          7,901
                                                                      ---------
                                                                         98,530
  Less accumulated depreciation                                         (64,354)
                                                                      ---------

          Net Property and Equipment                                     34,176
                                                                      ---------

Other Assets:
  Deposits                                                                1,175
  Note receivable, net of current portion above                            --
  Intangible assets, net of accumulated
    amortization of $93,333                                              14,167
                                                                      ---------

          Total Other Assets                                             15,342
                                                                      ---------

          Total Assets                                                $ 247,417
                                                                      =========
















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

                                      F-3


<PAGE>


                         LONGPORT, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1998
                                   (Continued)


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:
  Accounts payable                                                  $    26,661
  Accrued payroll taxes                                                   2,342
  Deferred revenue                                                        7,500
                                                                    -----------

          Total Current Liabilities                                      36,503
                                                                    -----------

Commitments and Contingencies                                              --

Stockholders' Equity:
  Preferred stock: $.001 par value,
   1,000,000 shares authorized,
   none issued or outstanding                                              --
  Common stock: $.001 par value,
   25,000,000 shares authorized,
   16,160,949 shares issued and outstanding                              16,161
  Paid in capital                                                     4,771,932
  Accumulated deficit                                                (4,572,179)
                                                                    -----------
                                                                        215,914
  Less treasury stock, at cost (30,000 common shares)                    (5,000)
                                                                    -----------

          Total Stockholders' Equity                                    210,914
                                                                    -----------

          Total Liabilities and Stockholders' Equity                $   247,417
                                                                    ===========







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


                                      F-4

<PAGE>

                         LONGPORT, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

                                                       1998              1997
                                                   ------------    ------------
Net Revenues:
  Medical supply sale                              $      8,051    $     18,786
  Medical equipment rentals                              10,725          17,000
  Wound clinic management fees                          109,500         102,000
  License and marketing fees                            219,500          34,000
                                                   ------------    ------------

     Total Revenues                                     347,776         171,786
                                                   ------------    ------------

Operating Expenses:
  General and administrative                          1,434,313         341,357
  Research and development expense                      997,159          24,000
                                                   ------------    ------------

     Total Operating Expenses                         2,431,472         365,357
                                                   ------------    ------------

     Operating Income (Loss)                         (2,083,696)       (193,571)
                                                   ------------    ------------

Other Income (Expense):
  Interest income                                          --               325
  Other income                                             --             4,488
  Loss on disposal of assets                               (641)        (21,407)
  Interest expense                                         (566)         (5,412)
                                                   ------------    ------------

     Total Other Income (Expense)                        (1,207)        (22,006)
                                                   ------------    ------------

Income (Loss) Before Provision for
  Income Taxes and Extraordinary Gain                (2,084,903)       (215,577)

Provision for income taxes                                  403           3,759
                                                   ------------    ------------

Income (Loss) Before Extraordinary Gain              (2,085,306)       (219,336)

Extraordinary Gain - Extinguishment of Debt                --             4,655
                                                   ------------    ------------

 Net Loss                                          $ (2,085,306)   $   (214,681)
                                                   ============    ============

Net Loss Per Share of Common Stock:
 Basic:
  Loss before extraordinary gain                   $       (.14)   $       (.02)
  Extraordinary gain                                       --              --
                                                   ============    ============

 Net Loss                                          $       (.14)   $       (.02)
                                                   ============    ============

Diluted:
  Loss before extraordinary gain                   $       (.14)   $       (.02)
  Extraordinary gain                                       --              --
                                                   ============    ============

  Net Loss                                         $       (.14)   $       (.02)
                                                   ============    ============
Weighted Average Number of
 Common Shares Outstanding:
  Basic                                              15,397,832      13,874,970
  Diluted                                            15,397,832      13,874,970


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

                                      F-5

<PAGE>
<TABLE>
<CAPTION>

                                               LONGPORT, INC. AND SUBSIDIARY
                               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                        FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

                                                  Common Stock                                                  Treasury Stock
                                              --------------------         Paid in      Accumulated       ------------------------
                                              Shares        Amount          Capital       Deficit         Shares            Amount
                                              ------        ------          -------       -------         ------            ------

<S>                                         <C>           <C>            <C>            <C>                   <C>         <C>
Balance at December 31, 1996                12,855,135    $    12,855    $ 2,320,918    $(2,272,192)           --         $    --

Issuance of common stock for
 cash at $.12 to $.25 per
 share                                       1,811,147          1,811        270,326           --              --              --

Conversion of accrued expenses
 to common stock at $.12 per
 share                                         100,000            100         11,900           --              --              --

Conversion of note payable to
 common stock at $.12 per share                 40,000             40          4,760           --              --              --

Issuance of common stock upon
 exercise of stock option at
 $.15 per share                                 50,000             50          7,450           --              --              --

Common stock returned to the
 Company in exchange for
 equipment at $.17 per share                      --             --             --             --           (30,000)         (5,000)

Net loss                                          --             --             --         (214,681)           --              --
                                           -----------    -----------    -----------    -----------     -----------     -----------

Balance at December 31, 1997                14,856,282         14,856      2,615,354     (2,486,873)        (30,000)         (5,000)

Issuance of common stock for
 cash at $.50 to $.80 per share                719,667            720        416,580           --              --              --

Issuance of common stock upon
 exercise of stock option at
 $.10 per share                                100,000            100          9,900           --              --              --

Issuance of common stock for
 research equipment at $.38
 per share                                     125,000            125         47,208           --              --              --

Issuance of common stock for
 services at $.75 to $1.81
 per share                                     360,000            360        595,890           --              --              --

Compensation from issuance of
 stock options                                    --             --        1,087,000           --              --              --

Net loss                                          --             --             --       (2,085,306)           --              --
                                           -----------    -----------    -----------    -----------     -----------     -----------

Balance at December 31, 1998                16,160,949    $    16,161    $ 4,771,932    $(4,572,179)        (30,000)    $    (5,000)
                                           ===========    ===========    ===========    ===========     ===========     ===========


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

                                                              F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                        LONGPORT, INC. AND SUBSIDIARY
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

                                                                                1998                  1997
                                                                                ----                  ----
<S>                                                                         <C>                   <C>    
Cash Flows From Operating Activities:
 Net loss                                                                   $(2,085,306)         $  (214,681)
 Adjustments to reconcile net loss to net cash
  (used) by operating activities:
  Depreciation and amortization                                                  51,139               41,972
  Repayment of notes receivable in consideration
   for services provided                                                           --                 11,000
  Provision for bad debts                                                          --                 18,171
  Loss on disposal of assets                                                        641               21,407
  Gain on extinguishment of debt                                                   --                 (4,655)
  Common stock issued for services                                              596,250                 --
  Common stock issued for research equipment                                     47,333                 --
  Compensation from issuance of stock options                                 1,087,000                 --
  Changes in assets and liabilities:
   (Increase) decrease in accounts receivable                                    (6,602)              10,744
   (Increase) decrease in other receivables                                       3,087               (1,525)
   (Increase) in prepaid expenses                                               (10,451)             (19,500)
   (Increase) decrease in inventories                                           (23,267)               1,200
   Increase (decrease) in accounts payable and accrued expenses                  24,304              (44,566)
                                                                            -----------          -----------

    Net Cash (Used) By Operating Activities                                    (315,872)            (180,433)
                                                                            -----------          -----------

Cash Flows From Investing Activities:
  Capital expenditures                                                          (33,149)             (20,132)
  Payments on notes receivable                                                   15,000               13,750
  Deposits                                                                       (1,175)                --
                                                                            -----------          -----------

    Net Cash (Used) By Investing Activities                                     (19,324)              (6,382)
                                                                            -----------          -----------

Cash Flows From Financing Activities:
  Principal payments on notes payable                                              (648)             (59,350)
  Issuance of common stock                                                      427,300              279,637
                                                                            -----------          -----------

    Net Cash Provided By Financing Activities                                   426,652              220,287
                                                                            -----------          -----------

    Net Increase in Cash and Cash Equivalents                                    91,456               33,472

    Cash and Cash Equivalents at Beginning of Year                               36,397                2,925
                                                                            -----------          -----------

    Cash and Cash Equivalents at End of Year                                $   127,853          $    36,397
                                                                            ===========          ===========

Supplemental Disclosure of Cash Flow Information:
  Cash paid during the year for:
   Interest                                                                 $       566          $     4,500
   Income taxes                                                                   3,576                  586


Supplemental Disclosure of Noncash Investing and Financing Activities:
   Conversion of notes payable and accrued
    interest into common stock                                                     --            $     4,800
   Common stock issued for payment of accrued expenses                             --                 12,000
   Sale of equipment for treasury stock                                            --                  5,000


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

                                                        F-7
</TABLE>

<PAGE>

                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of Sianificant Accounting Policies
         ------------------------------------------
           Description of Business
           -----------------------
             Longport,  Inc. (the "Company") was incorporated  January 22, 1993.
             The  Company  was  formed  to  market  and  distribute  wound  care
             products. In 1995, the Company began managing wound healing centers
             under  management   services   contracts.   Also,  the  Company  is
             developing a soft tissue  ultrasound  scanner (the "Scanner").  The
             Scanner,  after  approval  is  obtained  from  the  Food  and  Drug
             Administration,  will be used in  numerous  wound  care  and  other
             medical applications.

           Basis of Presentation
           ---------------------
             The  accompanying   consolidated  financial  statements  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 financial statements do not include
             any adjustments  relating to the  recoverability and classification
             of  recorded  asset  amounts or the amount  and  classification  of
             liabilities that might be necessary should the Company be unable to
             continue as a going concern. The Company's  continuation as a going
             concern is dependent upon its ability to generate  sufficient  cash
             flow  to  meet  its  obligations  on  a  timely  basis,  to  obtain
             additional financing as may be required, and to increase sales to a
             level  where the  Company  becomes  profitable.  Additionally,  the
             Company has  experienced  extreme cash  liquidity  shortfalls  from
             operations.

             The Company's  continued existence is dependent upon its ability to
             achieve  its  operating  plan.  Management's  plan  consists of the
             following:

               1. Obtaining additional equity capital through the sale of common
               stock.

               2.  Potential  exercise  of  outstanding  common  stock  purchase
               warrants and options.

               3. Sale of marketing and/or license rights to the Scanner.

             If management  cannot  achieve its operating  plan because of sales
             shortfalls  or other  unfavorable  events,  the Company may find it
             necessary to dispose of assets,  or undertake  other actions as may
             be appropriate.

           Principles of Consolidation
           ---------------------------
             The consolidated  financial  statements include the accounts of the
             Company  and  its  wholly   owned   subsidiary.   All   significant
             intercompany accounts and transactions have been eliminated.

           Cash and Cash Equivalents
           -------------------------
              For  purposes  of  the  statements  of  cash  flows,  the  Company
              considers all highly liquid  investments  with a maturity of three
              months or less at the date of purchase to be cash equivalents.

           Inventories
           -----------
             Inventories  are  stated  at the lower of cost or  market.  Cost is
             determined   using   the  first-in,   first-out   pricing   method.
             Inventories  consists  of  finished  goods  totalling  $1,450  and
             scanner parts totalling $24,017.

           Property and Equipment
           ----------------------
              Depreciation  of the primary asset  classifications  is calculated
              based  on  the   following   estimated   useful  lives  using  the
              straight-line method.

                                      F-8

<PAGE>


                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.      Summary of Sianificant Accounting Policies (Continued)
        -----------------------------------------------------
           Property and Equipment (Continued)
           ----------------------------------

                   Classification                      Useful Life in Years
                   --------------                      --------------------
             Medical equipment                                 3-5
             Computer equipment                                 5
             Office furniture and equipment                    5-10

             Depreciation  of property and  equipment  charged to  operations is
             $41,139 and $31,972 for the years ended December 31, 1998 and 1997,
             respectively.

           Intangible Assets
           -----------------
             Intangible  assets  are being  amortized  using  the  straight-line
             method based on the following estimated useful lives.

           Description                                 Useful Life in Years
           -----------                                 --------------------
            Goodwill                                            10
            Scanner rights                                       5

           Revenue Recognition
           -------------------
             The Company  recognizes revenue from product sales upon shipment to
             the customer.  Revenue from medical  services are recognized as the
             Company performs the services.
 
           Stock-Based Compensation
           ------------------------
             During  the year ended  December  31,  1996,  the  Company  adopted
             Statement  of  Financial   Accounting   Standard  (SFAS)  No.  123,
             "Accounting  for  Stock-Based   Compensation".   The  Company  will
             continue  to  measure  compensation  expense  for  its  stock-based
             employee  compensation  plans  using  the  intrinsic  value  method
             prescribed by APB Opinion No. 25,  "Accounting  for Stock Issued to
             Employees".

           Long-Lived Assets
           -----------------
             In  accordance  with  Statement of Financial  Accounting  Standards
             (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
             and for Long-Lived  Assets to be Disposed Of', the Company  reviews
             for the  impairment  of  long-lived  assets,  certain  identifiable
             intangibles, and associated goodwill, whenever events or changes in
             circumstances  indicate that the carrying value of an asset may not
             be  recoverable.  An impairment  loss would be recognized  when the
             estimated future cash flows is less than the carrying amount of the
             asset. No impairment losses have been identified by the Company.

           Income Taxes
           ------------
             Deferred  income  taxes  are  provided  for  temporary  differences
             between  the  financial  reporting  and tax  basis  of  assets  and
             liabilities using enacted tax laws and rates for the years when the
             differences are expected to reverse.

           Net (Loss) Per Share of Common Stock
           ------------------------------------
             As of December 31, 1997, the Company adopted Statement of Financial
             Accounting  Standards (SFAS) No. 128,  "Earnings Per Share",  which
             specifies the method of  computation,  presentation  and disclosure
             for earnings per share.  SFAS No. 128 requires the  presentation of
             two earnings per share amounts, basic and diluted.


                                      F-9
<PAGE>

                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of Significant Accounting Policies (Continued)
         -----------------------------------------------------
           Net (Loss) Per Share of Common Stock(Continued)
           -----------------------------------------------
             Basic earnings per share is calculated  using the average number of
             common shares  outstanding.  Diluted earnings per share is computed
             on the basis of the  average  number of common  shares  outstanding
             plus the dilutive  effect of  outstanding  stock  options using the
             "treasury stock" method.

             The basic and  diluted  earnings  per share are the same  since the
             Company had a net loss for 1998 and 1997 and the inclusion of stock
             options and warrants would be antidilutive. Options and warrants to
             purchase 2,535,714 and 1,379,714 shares of common stock at December
             31,  1998  and  1997,   respectively   were  not  included  in  the
             computation of diluted earnings per share because the Company had a
             net loss and their effect would be antidilutive.

           Estimates
           ---------
             The preparation of the Company's  consolidated financial statements
             in  conformity  with  generally  accepted   accounting   principles
             requires the Company's management to make estimates and assumptions
             that  affect the  reported  amounts of assets and  liabilities  and
             disclosure of contingent  assets and liabilities at the date of the
             financial  statements  and the  reported  amount  of  revenues  and
             expenses during the reporting  period.  Actual results could differ
             from those estimates.

           Reclassifications
           -----------------
             Certain 1997 amounts have been  reclassified to conform to the 1998
             presentation.

2.      Income Taxes
        -------------
             The components of the provision for income taxes are as follows:

                                                        1998            1997
                                                        ----            ----
             Current:
               Federal                                  $ --           $   --
               State                                     403            3,759
                                                        ----           ------
               Total                                     403            3,759
                                                        ----           ------

             Deferred:
               Federal                                    --               --
               State                                      --               --
                                                        ----           ------
               Total                                      --               --
                                                        ----           ------

             Total Provision For Income Taxes           $403           $3,759 
                                                        ====           ======

             The provision  (benefit) for income taxes  reconciles to the amount
             computed by applying the federal  statutory  rate to income  before
             the provision (benefit) for income taxes as follows:

                                                        1998             1997
                                                        ----             ----
              Federal statutory rate                     (34)%            (34)%
              State income taxes, net of
               federal benefits                           (6)              (6)
              Valuation Allowance                         40               40
                                                        ----             ----

              Total                                       --%              --%
                                                        ====             ====

                                      F-10


<PAGE>

                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.      Income Taxes (Continued)
        -----------------------
             The following is a reconciliation of the provision for income taxes
             to income before provision for income taxes computed at the federal
             statutory rate of 34%.
                                                         1998            1997
                                                         ----           ----
             Income taxes at the
               federal statutory rate                  $(708,867)      $(71,713)
             State income taxes, net
               of federal benefits                      (125,094)       (12,655)
             Nondeductible expenses                        3,978          2,589
             Valuation allowance                         830,386         79,335
             Other                                            --          6,203
                                                       ---------       --------
             Total                                     $     403       $  3,759
                                                       =========       ========
                                          

             Significant components of deferred income taxes as of December 31,
              1998 are as follows:

             Net operating loss carryforward                         $1,322,300
             Stock option compensation                                  471,600
             Depreciation                                                12,900
             Other                                                        1,900
                                                                     ----------

             Total deferred tax asset                                 1,808,700

             Less valuation allowance                                 1,808,700
                                                                     ----------
             Net Deferred Tax Asset                                  $     --
                                                                     ==========


             The  Company has  assessed  its past  earnings  history and trends,
             sales   backlog,   budgeted   sales,   and   expiration   dates  of
             carryforwards  and has  determined  that it is more likely than not
             that no  deferred  tax  assets  will  be  realized.  The  valuation
             allowance of  $1,808,700 is maintained on deferred tax assets which
             the  Company  has  not  determined  to  be  more  likely  than  not
             realizable at this time. The net change in the valuation  allowance
             for deferred tax assets was an increase of $1,093,700.  The Company
             will  continue to review this  valuation  on a quarterly  basis and
             make adjustments as appropriate.

             At  December  31,  1998,  the  Company  had  federal  and state net
             operating  loss  carryforwards  of  approximately   $3,426,000  and
             $1,576,000,  respectively.  Such carryforwards  expire in the years
             2008  through  2018 and 2005  through  2008 for  federal  and state
             purposes, respectively.

3.      Warrants and Options
        --------------------
           Options
           -------
             The Company has granted stock options to employees, consultants and
             other individuals. The outstanding agreements expire from July 1999
             through September 2000. The following table contains information on
             all of the Company's stock options for the years ended December 31,
             1998 and 1997.

                                      F-11

<PAGE>
                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.       Warrants and Options (Continued)
         -------------------------------
           Options (Continued)
           ------------------                     Number of     Weighted Average
                                                    Shares       Exercise Price
                                                    ------       --------------
           Options outstanding at
            December 31, 1996                      394,000            $.17
             Granted                                   --              --
             Exercised                             (50,000)            .15
             Canceled                             (150,000)            .27
                                                 ---------            ----
           Options outstanding at
            December 31, 1997                      194,000             .10
             Granted                             1,350,000             .88
             Exercised                            (100,000)            .10
             Canceled                              (94,000)            .10
                                                 ---------            ----
           Options outstanding at
            December 31, 1998                    1,350,000            $.88
                                                 =========            ====

           The weighted  average  fair value price of options  granted in 1998
           was $.79.

           The  following  table  summarizes  information  about   stock options
           outstanding at December 31, 1998:

           Options  Outstanding  and  Exercisable by Price Range as of  December
           31, 1998:
<TABLE>
<CAPTION>

                                           Options Outstanding                      Options Exercisable
                                           -------------------                      -------------------
                                                                                      
                                                Weighted
                                                 Average          Weighted                         Weighted
               Range of                         Remaining         Average                           Average
               Exercise            Number      Contractual        Exercise            Number       Exercise
                Prices          Outstanding     Life-Years         Price            Exercisable      Price
                ------          -----------     ----------         -----            -----------      -----
              <S>             <C>                <C>            <C>              <C>                 <C>    
                $.10               100,000        .55              $.10                100,000       $.10
               .75 - 1.00        1,250,000        .99               .94              1,250,000        .94
              -----------        ---------        ---               ---              ---------        ---
                                                                                    
              $.10 - 1.00        1,350,000        .95               $.88             1,350,000       $.88
              ===========        =========        ===               ====             =========       ====
</TABLE>

           Warrants
           --------
             In November 1993, the Company sold 1,185,714 "Units"  consisting of
             one  share of the  Company's  common  stock  and one  common  stock
             purchase warrant for $.35 per unit. The Warrants entitle the holder
             to purchase  one share of the  Company's  common stock for $3.00 at
             anytime until June 30, 2000. All 1,185,714 warrants are outstanding
             as of December 31, 1998.

4.      Stock-Based Compensation
        ------------------------
           Pro Forma Disclosures
           ---------------------
             The  Company  adopted  Financial   Accounting   Standard  No.  123,
             "Accounting  for Stock- Based  Compensation"  (SFAS 123) during the
             year ended December 31, 1996. In accordance  with the provisions of
             SFAS 123, the Company  applies APB Opinion No. 25,  "Accounting for
             Stock  Issued  to  Employees,  "  and  related  interpretations  in
             accounting  for  employee  stock  options  and does  not  recognize
             compensation  expense for its stock  options other than for options
             granted to  non-employees.  If the Company had elected to recognize
             compensation expense based upon the fair value at the grant date of
             employee stock options  consistent with the methodology  prescribed
             by SFAS No. 123,  the  Company's  net income and earnings per share
             would be reduced as follows:

                                      F-12



<PAGE>
                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.     Stock-Based Compensation (Continued)
       -----------------------------------
        Pro Forma Disclosures (Continued)
           -----------------------------
                                                                       1998
                                                                       ----
             Net income (loss):
               As reported                                          $(2,085,306)
               Pro forma                                            $(2,086,356)

             Net income (loss) per share of common stock:
               As reported                                                $(.14)
               Pro forma                                                  $(.14)

             The Company did not grant any employee stock options in 1997.

             These  pro  forma  amounts  may  not be  representative  of  future
             disclosures  since the  estimated  fair  value of stock  options is
             amortized to expense over the vesting period and additional options
             may be granted in future  years.  The fair value for these  options
             was estimated at the date of grant using  the  Black-Scholes option
             pricing  model with the  following  assumptions  for the year ended
             December 31, 1998.

             Risk-free interest rate                                  5.29%
             Expected life                                           1 year
             Expected volatility                                    155.43%
             Expected dividend yield                                     0%

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

           Compensation Expense
           --------------------
             The Company recorded  compensation expense of $900,750 for the year
             ended December 31, 1998 for the value of certain options granted to
             Consultants  to the  Company.  In  addition,  the Company  recorded
             compensation  expense of $171,250  for the year ended  December 31,
             1998 for the value of certain options  granted to an employee.  The
             valuation  of the  options  granted  to  employees  is based on the
             difference  between the exercise  price and the market value of the
             stock on the measurement date. The valuation of the options granted
             to  non-employees  is  estimated  using  the  Black-Scholes  option
             pricing model.

             Also, the Company recorded compensation expense of $596,250 for the
             year  ended  December  31,  1998 for the  value of stock  issued to
             consultants for services provided to the Company.

5.      Preferred Stock
        ---------------
             The authorized preferred stock of the Company consists of 1,000,000
             shares,  no par value.  The preferred stock may be issued in series
             from time to time with such


                                      F-13
<PAGE>
                                      

                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.      Preferred Stock (Continued)
        --------------------------
             designation,  rights,  preferences  and limitations as the Board of
             Directors of the Company may determine by  resolution.  The rights,
             preferences  and  limitations of separate series of preferred stock
             may differ with respect to such matters as may be determined by the
             Board  of  Directors,  including  without  limitation,  the rate of
             dividends,  method and nature of  payment  of  dividends,  terms of
             redemption, amounts payable on liquidation, sinking fund provisions
             (if any), conversion rights (if any), and voting rights. Unless the
             nature of a particular  transaction and applicable statutes require
             approval,  the Board of Directors  has the authority to issue these
             shares without shareholder approval.

6.      Commitments and Contingencies
        -----------------------------
           Leases
           ------
             The Company  leases  office  equipment,  a motor vehicle and office
             facilities under long-term leasing arrangements. The following is a
             schedule of future  minimum  lease  payments  at December  31, 1998
             under  the  Company's   operating  leases  which  have  an  initial
             noncancellable lease term in excess of one year:

               Year Ending                                     Operating
               December 31,                                      Leases
               ------------                                      ------
                  1999                                           $24,000
                  2000                                            15,300
                  2001                                             3,625
                                                                 -------
                     Total Future Minimum Lease Payments         $42,925
                                                                 =======

             Rental expense charged to operations was $24,124 and $7,188 for the
             years ended December 31, 1998 and 1997, respectively.

           Medicare Hearings
           -----------------
             In September  1997, the Company was notified of a Medicare  Hearing
             Officer's  decision  that the  Company is liable for  repayment  of
             Medicare  Benefit  Overpayments of $269,120.  The  Overpayments are
             from  calendar  years 1994 and 1995.  The Company has  appealed the
             Hearing   Officer's   decision.   The   Appeal   was  heard  by  an
             Administrative Law Judge on January 5, 1999. The Administrative Law
             Judge  reviewed  fourteen cases out of  approximately  500 cases in
             dispute.  The  Administrative  Law Judge  rendered  his decision on
             February 18, 1999 regarding the fourteen cases as follows:

                    A.  Five cases were dismissed.

                    B.  Three  cases  were  decided  as  partially   unfavorable
                        resulting  in an  overpayment  of  $1,434  and two cases
                        which need to be recalculated.

                    C.  Six cases were decided as  unfavorable  resulting  in an
                        overpayment of $6,420.

             The other cases were not  reviewed and the Company does not know if
             they will be reviewed by the  Administrative Law Judge. The Company
             has the right to appeal the  Administrative  Law  Judge's  decision
             with the  Appeals  Council.  The Appeal  must be written  and filed
             within  sixty  days.  The  Company  currently  plans to appeal  the
             Administrative  Law  Judge's  decision.  The  Company  is unable to
             predict the outcome


                                      F-14
<PAGE>

                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.      Commitments and Contingencies (Continued)
        ----------------------------------------
           Medicare Hearings (Continued)
           -----------------------------
             of the  Appeal.  However,  Management  believes  that there were no
             Medicare Benefit  Overpayments in 1994 and 1995 and will vigorously
             defend its position.

             Payment of any  judgement  or  settlement  in  connection  with the
             Medicare  Benefit  Overpayments  Appeal  together with the costs of
             defending the Appeal,  could adversely affect the Company's results
             of operations and financial condition.

           The Year 2000
           -------------
             The Company is currently working to resolve the potential impact of
             the Year 2000 on the  processing of  date-sensitive  information by
             the  Company's  computerized  information  systems.  The Year  2000
             problem is the result of computer  programs being written using two
             digits (rather than four) to define the applicable year. Any of the
             Company's programs that have time-sensitive  software may recognize
             a date using "00" as the year 1900 rather than the year 2000, which
             could  result  in  miscalculations  or  system  failures.  Costs of
             addressing  potential problems are expensed as incurred and are not
             expected  to  have a  material  adverse  impact  on  the  Company's
             financial  position,  results of operations or cash flows in future
             periods.  However,  if the  Company  or its  vendors  are unable to
             resolve such processing  issues in a timely manner, it could result
             in a material  financial  risk.  Accordingly,  the Company plans to
             devote the necessary resources to resolve all significant Year 2000
             issues in a timely manner.  While the Company does not at this time
             anticipate significant problems with suppliers and customers, it is
             developing  contingency  plans with these third  parties due to the
             possibility of compliance issues.

7.      Related Party Transactions
        --------------------------
             The Company has entered into transactions with related entities, as
             follows:

             In June 1997,  the Company sold six Hyperbaric  Oxygen  Chambers to
             Wound  Healing  Systems, Inc. ("WHS"), a corporation  controlled by
             the Company's President.  As  payment WHS returned 30,000 shares of
             the Company's  common  stock  to  the  Company. The  net book value
             ($5,000), of the chambers sold  was  recorded  as the  value of the
             stock received (treasury stock).

             In 1997,  the  Company  elected  to forgo  repayment  of two  notes
             receivable  of  $5,500  each  from a former  officer  and a current
             officer.  The $5,500 notes receivable  ($11,000 in total) have been
             expensed as compensation.

             The Company owed Healing Systems, Inc. ("Healing") $7,155. Healing
             agreed to accept $2,500 as payment in  full resulting in a gain on
             forgiveness  of  debt  of  $4,655.  Healing's  President is a major
             stockholder of the Company.

             In January 1997, the Company's Vice President  converted $12,000 of
             accrued salary into 100,000 shares of the Company's common stock.

8.      Extraordinary Gain
        ------------------
             Included  in the  extraordinary  gain are  settlements  of  certain
             accounts  payable and notes  payable for less than the amounts owed
             resulting in a gain of $4,655 for the year ended December 31, 1997.


                                      F-15
<PAGE>


                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STAEMENTS


9.      Concentration of Credit Risk and Major Customers
        ------------------------------------------------
             Financial  instruments  that  potentially  subject  the  Company to
             credit risk  include  cash on deposit at a bank which  exceeded the
             related U.S.  Federal Deposit  Insurance  Corporation  insurance by
             $27,453  at  December  31,  1998.  In  addition,   trade   accounts
             receivable and a note receivable potentially subject the Company to
             credit risk.

             The Company provides credit,  in the normal course of business,  to
             hospitals,  distributors,  and others in the health care  industry.
             The Company's  customers are located  primarily in Pennsylvania and
             New Jersey. The Company performs periodic credit evaluations of its
             customers' financial condition and generally require no collateral.
             The Company maintains reserves for potential credit losses.

             Revenues from major  customers,  as a percentage of total  revenue,
             for the years ended December 31, 1998 and 1997 were as follows:

                                                  1998              1997
                                                  ----              ----
             Customer A                           11.5%              --
             Customer B                           12.1%            24.4%
             Customer C                           20.0%            34.9%
             Customer D                           28.8%            18.6%

10.     Fair Value of Financial Instruments
        -----------------------------------
             Disclosures  about  Fair  Value of  Financial  Instruments  for the
             Company's  financial  instruments are presented in the table below.
             These   calculations   are   subjective   in  nature  and   involve
             uncertainties  and  significant  matters  of  judgment  and  do not
             include income tax considerations. Therefore, the results cannot be
             determined with precision and cannot be substantiated by comparison
             to independent market values and may not be realized in actual sale
             or settlement of the instruments.  There may be inherent weaknesses
             in  any  calculation  technique,  and  changes  in  the  underlying
             assumptions  used  could  significantly  affect  the  results.  The
             following  table  presents  a summary  of the  Company's  financial
             instruments as of December 31, 1998:
                                                             1998
                                                  ----------------------------
                                                  Carrying          Estimated
                                                   Amount           Fair Value
                                                   ------           ----------
             Financial Assets:
              Cash and cash equivalents           $127,853           $127,853
              Note receivable                        3,750              3,750

             The carrying  amounts for cash and cash  equivalents,  receivables,
             accounts  payable  and  accrued  expenses  approximate  fair  value
             because of the short maturities of these instruments.

11.     Proposed Private Offering
        -------------------------
             The Company is offering  through a confidential  Private  Placement
             Memorandum  500,000 shares of 8% convertible  redeemable  preferred
             stock at $10.00 per share.  The preferred  stock may be redeemed at
             the Company's option, upon 30 days notice, in whole or in part on a
             pro rata  basis,  at any  time at 110% of face  value  ($11.00  per
             share)  in 1999  increasing  5% per  year up to 130% of face  value
             ($13.00 per share) in 2003, plus accrued  dividends  payable to the
             redemption  date. Each share of preferred stock is convertible into
             five shares of the  Company's  $.001 par value  common stock at the
             Holder's election at any time until December 31, 2003.


                                      F-16
<PAGE>
                         LONGPORT, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


11.     Proposed Private Offering (Continued)
        ------------------------------------
             The Offering is being made on a "best efforts" basis to raise gross
             proceeds of up to $5,000,000.  The Offering will continue until the
             Selling  Period  expires or all the shares offered hereby are sold.
             There is no  minimum  number of shares  required  to be sold by the
             Company.  The  Preferred  Stock is  being  offered  by the  Company
             (through  its  executive   officers  who  will  not  receive  sales
             commissions or other forms of remuneration)  and through  brokerage
             firms that are  licensed  members of the  National  Association  of
             Securities  Dealers,  Inc.  ("NASD")  and who  will  receive  sales
             commissions  of $1.00 per share.  Other  expenses of the  Offering,
             including legal fees,  accounting fees, printing and other expenses
             (expected not to exceed $25,000) will be paid by the Company. There
             can  be  no  assurance  that  the  Offering  will  be  successfully
             completed.


                                      F-17
<PAGE>


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

     None.



                                       13

<PAGE>



                                    PART III

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

     The name, age and position of each of the Company's  executive officers and
directors are set forth below:

                                                                  Officer or
                                                                   Director
     Name                  Age           Office                     Since
     ----                  ---           ------                     -----

James R. McGonigle         65      Chairman of the                   1993
                                   Board of Directors,
                                   Chief Executive
                                   Officer, President and
                                   Chief Accounting Officer

Bonita Weyrauch            47      Director of Clinical Sales        1998
                                   and Director

Peter E. Cavanaugh         34      Director                          1993

     Directors hold office for a period of one year from their election at
the annual meeting of stockholders  and until their  successors are duly elected
and  qualified.  Officers  of the  Company  are  elected  by,  and  serve at the
discretion  of, the Board of Directors.  None of the above  individuals  has any
family  relationship  with any  other.  The  Board of  Directors  has no  audit,
nominating  or  compensation  committee.  No director  has received or currently
receives any compensation for services as a director.

Background

     The  following is a summary of the business  experience of each officer and
director of the Company:

     James R.  McGonigle  founded the  Company  and has served as its  Chairman,
Chief Executive Officer and President since its inception in January, 1993. From
1985 to 1992 Mr.  McGonigle was the founder and president of Supra Medical Corp.
("Supra") a publicly held company specializing in the development of proprietary
medical technologies in the fields of skin care and diagnostics.


                                       14

<PAGE>



     Bonita Weyrauch is licensed in Pennsylvania  and New Jersey as a registered
nurse and has practiced nursing since 1970. She joined the Company in July, 1993
as its Clinical Director.  Ms. Weyrauch is board certified in dermatology and is
a certified wound specialist.

     Peter E.  Cavanaugh was Vice  President and General  Counsel of the Company
from December 1993 until February  1997. In 1993, Mr.  Cavanaugh was admitted to
practice by the Bar  Associations  of both  Pennsylvania  and New  Jersey.  From
March,  1992,  until May, 1993, Mr. Cavanaugh was employed as a law clerk at the
Law Offices of Tybout,  Redfearn & Pell in  Wilmington,  Delaware  and from 1986
until  1992,  he was  employed  by the  Pennsylvania  Manufacturers  Association
Insurance  Company in the legal and claims  departments.  Since February 1997 he
has practiced law with the Law Firm of White and Williams.

Executive Compensation

The following table discloses all compensation awarded to, received by, and paid
to the Chief  Executive  Officer of the Company for the years ended December 31,
1997 and 1998 No executive  officer's annual  compensation  exceeded $100,000 in
any such year.
<TABLE>
<CAPTION>

                                        Summary Compensation Table

                                                                      Long Term Compensation
                                                                      ----------------------
Annual Compensation                                                  Awards           Payouts
-------------------                                                  ------           -------

    (a)          (b)        (c)           (d)          (e)           (f)         (g)          (h)          (i)
Name
and
Prin-                                                 Other                                                 All
cipal                                                Annual      Restricted                                Other
Posi-                                                Compen-        Stock      Options/      LTIP         Compen-
tion            Year     Salary($)     Bonus($)     sation($)    Award(s)($)   SARS(#)     Payouts($)    sation($)
----            ----     ---------     --------     ---------    -----------   -------     ----------    ---------

<S>             <C>      <C>               <C>          <C>           <C>         <C>          <C>          <C>
James R.        1998     $   -0- (1)      -0-          -0-           -0-         -0-          -0-          -0-
McGonigle       1997     $   -0- (1)      -0-          -0-           -0-         -0-          -0-          -0-
Chief
Exec.
Officer
</TABLE>


(1)  The Company  pays  Colpat,  Inc.,  a  consulting  firm wholly  owned by Mr.
     McGonigle, $6,000 per month for Mr. McGonigle's services.


                                       15

<PAGE>



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

                             PRINCIPAL STOCKHOLDERS

     The  following  table  sets  forth  certain  information  concerning  stock
ownership by all persons known to the Company to own  beneficially 5% or more of
the  outstanding  shares of the  Company's  Common  Stock,  by each director and
officer,  and by all  directors  and  officers as a group.  All shares of Common
Stock are owned beneficially and of record.

                                            Number of
Name                                        Shares Owned      Percent of Class
----                                        ------------      ----------------
James R. McGonigle (1)                       1,865,893             11.5%

Bonita Weyrauch (2)                            328,558              2.0%

Peter Cavanaugh                                223,571              1.4%

John H. Carbutt (3)                            812,777              5.0%

Michie Proctor and                           2,669,174             16.4%
Joyce Proctor (4)

The First Baptist Church                     1,280,977              7.9%
of Southwest Broward

John Mills                                   1,192,000              7.4%

All officers and directors
as a group (three persons)(5)                2,418,022             14.8%


(1)  Includes 942,000 shares held by James R. McGonigle,  547,143 shares held by
     Wound Healing  Systems,  Inc., a corporation  controlled by Mr.  McGonigle,
     376,750  shares  held by  Colpat,  Inc.  a  corporation  controlled  by Mr.
     McGonigle and 100,000 Warrants also held by Colpat, Inc.

(2)  Includes stock options to purchase  100,000 shares at $.10 per share at any
     time until July 18, 1999.

(3)  Includes  436,098 shares held by John H. Carbutt,  200,000 Warrants held by
     Mr.  Carbutt  and 176,679  shares held by  Jagapata,  Ltd.,  a  corporation
     controlled by Mr. Carbutt.

(4)  Includes  2,118,258  shares held by Michie Proctor,  450,916 shares held by
     Michie  Proctor and Joyce  Proctor and 100,000  Warrants held by Michie and
     Joyce Proctor.

(5)  Includes shares,  Warrants and stock options held by the Company's officers
     and directors which are exercisable within 60 days from the date hereof.


                                       16

<PAGE>



ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

     Management is of the opinion that each transaction  described below between
the Company and its officers,  directors and  stockholders was on terms at least
as  fair  to  the  Company  as  had  the  transaction  been  concluded  with  an
unaffiliated party.

     In January  1996,  the Company  entered  into a consulting  agreement  with
Colpat, Inc., an affiliate owned and controlled by the Company's Chief Executive
Officer and President, James R. McGonigle, pursuant to which Colpat provides Mr.
McGonigle's services to the Company for $6,000 per month. 

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------

     Exhibits.
     ---------
<TABLE>
<CAPTION>

Exhibit No.                     Title
-----------                     -----
<S>            <C>
   3.1        Certificate of Incorporation of Registrant(1)
   3.2        Bylaws of Registrant(1)
   4.1        Form of Common Stock Purchase Warrant(1)
  10.1        Agreement of Sale between Registrant and Leiti regarding Registrant's purchase of
              791 South Chester Road, Swarthmore, Pennsylvania(1)
  10.2        Sales Agreement between Registrant and Wound Healing Systems, Inc. regarding 20
              Topical Hyperbaric Chambers(1)
  10.3        Sales Agreement between Registrant and Wound Healing Systems, Inc. regarding 23
              Topical Hyperbaric Chambers(1)
  10.4        Memorandum of Understanding between Registrant and Baker Medical, Inc.(1)
  10.5        Memorandum of Understanding between Registrant and Southeastern Medical
              Supply, Inc.(1)
  10.6        Joint Venture Agreement between Registrant and Wellison International, Inc.(1)
  10.7        Patent Assignment between Registrant and Stivala(1)
  10.8        Transfer Agreement between Registrant and Mazzolla(1)
  10.9        Transmittal Letter regarding Wound Healing Research(1)
  10.10       Licensing and Purchase Option Agreement between Registrant and Healing
              System, Inc.(1)
  10.11       Memorandum of Understanding between Registrant and Robert Crousore
              Hess and Fernando Laguda(1)
  10.12       Sale Agreement between Registrant and Robert D. Crousore (Hess)(1)
  10.13       Sale Agreement between Registrant and Fernando G. Laguda(1)
  10.14       Sale and Release Agreement between Registrant and Fernando G. Laguda(1)
  10.15       Lease Agreement between Registrant and Montclair Community Hospital(1)
  10.16       Rental Agreement between Registrant and Integrated Therapy Products,
              Inc.(1)


                                       17

<PAGE>



  10.17      Revenue Sharing Agreement between Registrant and American Home Medical
             Services, Inc.(1)
  10.18      Employment Agreement between Registrant and Angelo R. Bergano, M.D.(1)
  10.19      Form of Subscription Agreement - November, 1993 Private Placement(1)
  10.20      Form of Loan Agreement - April, 1994 Loans (1)
  10.21      Form of Promissory Note - April, 1994 Loans (1)
  10.25      Research and Licensing Agreement (UMDS)(3)
  10.30      Services Agreement (West Jersey Health System)(2)
  10.32      Agreement with R. D. Bowers Associates (1)
  10.33      Agreement with Professional Home Care Services (1)
  10.34      Agreement with Austin Medical, Inc. (1)
  10.35      Letter of Understanding with GWR Medical, LLP (1)
  10.36      Technology Transfer Agreement (VMOS) (1)
  10.37      Technology Transfer Agreement (SWS) (1)
  21.1       Subsidiaries of Registrant(1)
  99.1       Deed Regarding 791 South Chester Road, Swarthmore, Pennsylvania(1)
  99.2       Deed of Correction(1)
</TABLE>

(1)  Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form SB-2, File No. 33-75236 and Post Effective Amendment No. 1 thereto.

(2)  Incorporated by reference to the Registrant's  Annual Report on Form 10-KSB
     for the year ended December 31, 1997.


                                       18

<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant  has duly  caused  the  Report  to be  signed  on its  behalf  by the
undersigned, thereunto duly authorized, in Swarthmore, Pennsylvania, on April 9,
1999.

                                         LONGPORT, INC.



                                         By   /s/ James R. McGonigle
                                              ----------------------------------
                                              James R. McGonigle,
                                              President

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1933, as
amended, this Registration Statement has been signed by the following persons on
the dates indicated.

        Signature                         Title                       Date
        ---------                         -----                       ----

 /s/ James R. McGonigle            Chairman of the               April 9, 1999
---------------------------        Board of Directors
James R. McGonigle                 Chief Executive Officer,
                                   President and Chief Financial
                                   Officer (Principal Accounting
                                   Officer)

 /s/ Bonita Weyrauch               Director of Clinical          April 9, 1999
---------------------------        Services and Director
Bonita Weyrauch                   


 /s/ Peter Cavanaugh               Director                      April 9, 1999
---------------------------
Peter Cavanaugh