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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                   FORM 10-K

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



             FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001



                                   OR




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



             FOR THE TRANSITION PERIOD
</Table>

                         COMMISSION FILE NUMBER 0-19410

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

                            POINT THERAPEUTICS, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                                 <C>
                     DELAWARE                                           04-3216862
          (State or other jurisdiction of                            (I.R.S. Employer
          incorporation or organization)                            Identification No.)

                75 KNEELAND STREET                                         02111
               BOSTON, MASSACHUSETTS                                    (Zip Code)
     (Address of principal executive offices)
</Table>

              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                 (617) 636-0680

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (TITLE OF CLASS)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K ((sec.) 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [X]

     The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 18, 2002 was approximately $26,611,000.

     The number of shares outstanding of the Registrant's common stock as of
March 18, 2002 was approximately 9,276,000.

     DOCUMENTS INCORPORATED BY REFERENCE:  Portions of the Registrant's
definitive proxy statement to be filed with the Securities and Exchange
Commission relative to the Registrant's 2002 Annual Meeting of Stockholders are
incorporated by reference into Items 10, 11, 12 and 13 of Part III of this
annual report on Form 10-K.
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<PAGE>

                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

     Point Therapeutics, Inc. ("Point" or the "Company" or "we") is developing
small molecule drugs for the treatment of certain hematopoietic disorders and
for the treatment of cancer. PT-100, Point's lead product candidate, has the
potential to treat a number of different hematopoietic disorders, such as
neutropenia (an abnormally low level of a type of white blood cell called a
neutrophil) and anemia (an abnormally low level of red blood cells).

     Point's principal executive offices are located at 75 Kneeland Street,
Boston, Massachusetts, and the telephone number is (617) 636-0680. The shares of
Point's common stock, par value $.01 per share (the "Common Stock"), trade on
the OTC Bulletin Board under the symbol "POTP".

     The Company was originally incorporated in December 1993 as a Delaware
corporation under the name Hemacor Inc. The Company changed its name to HemaSure
Inc. in February of 1994. From 1994 to May 2001, the Company developed and
supplied innovative blood filtration technologies. From May 2001 until the
merger with Point Massachusetts (described below), the Company's continuing
operations consisted of general and administrative expenses to operate a shell
company and to investigate various strategic business combinations.

     On November 15, 2001, the Company and PT Acquisition Corp., a wholly-owned
subsidiary of the Company formed for the purpose of consummating a merger
transaction, entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Point Therapeutics, Inc., a privately held Massachusetts
corporation ("Point Massachusetts").

     On March 15, 2002, the Company's stockholders approved a 1-for-10 reverse
split of the Company's common stock and a name change of the Company from HMSR
Inc. to Point Therapeutics, Inc. The stockholders of Point Massachusetts also
approved on March 15, 2002 the Merger Agreement previously entered into by both
parties. The merger became effective on March 15, 2002, at which time, Point
Massachusetts became a wholly-owned subsidiary of the Company. Point
Massachusetts subsequently changed its name to "Point Therapeutics
Massachusetts, Inc."

  BUSINESS OF THE COMPANY AFTER THE MERGER

     Point's business operations after the merger consist solely of the business
previously conducted by Point Massachusetts, which is now a wholly-owned
subsidiary of Point.

     Point is developing small molecule drugs for the treatment of certain
hematopoietic disorders and for the treatment of cancer. PT-100, Point's lead
product candidate, has the potential to treat a number of different
hematopoietic disorders, such as neutropenia (an abnormally low level of a type
of white blood cell called a neutrophil) and anemia (an abnormally low level of
red blood cells).

     Hematopoietic disorders are medical conditions characterized by an
abnormally high or low level of mature blood cells. The different types of
mature blood cells include neutrophils (a type of white blood cell), red blood
cells, T and B cells (types of white blood cells) and platelets, each of which
plays an important role in the body. For example, neutrophils are the body's
first defense against infection. A person with an abnormally low level of
neutrophils, or neutropenia, is at an increased risk of developing an infection.

     Various diseases and disease treatments can suppress the body's production
of blood cells, causing hematopoietic disorders. For example, chemotherapy,
which is one treatment option for individuals with cancer, targets cell types
that grow rapidly, such as tumor cells, and destroys them. However, as an
unwanted side effect of chemotherapy, neutrophils and other types of blood cells
whose levels are maintained by rapid cell growth may also be damaged or
destroyed. This can cause the cancer patient receiving chemotherapy to develop
neutropenia, anemia and other hematopoietic disorders. Suppression of blood cell
production and destruction of mature blood cells are also thought to arise in
other diseases such as AIDS.

                                        1
<PAGE>

     Point believes that PT-100 potentially has the ability to treat
hematopoietic disorders involving abnormally low levels of blood cells. The
treatment of neutropenia is the first clinical application for PT-100 being
tested by Point in clinical trials. PT-100 is currently in a Phase I/II clinical
study for the treatment of neutropenia in cancer patients as an adjunct to
chemotherapy. Point believes that PT-100 might also be developed for the
treatment of neutropenia in patients with AIDS or other diseases that can cause
neutropenia.

     In addition to serving as a potential treatment for neutropenia, Point has
obtained results from preclinical research in animal models indicating that
PT-100 potentially has the ability to treat acute anemia. Acute anemia is a
condition of an abnormally low number of red blood cells. For example, cancer
patients sometimes develop acute anemia after undergoing chemotherapy because of
the chemotherapeutic agent's adverse effects on red blood cell production.
Similarly, Point believes that PT-100 could potentially serve as a treatment for
patients with AIDS suffering from acute anemia caused by bone marrow
deficiencies that affect blood cell production. To date, Point has not initiated
human clinical testing of PT-100 in treating these conditions.

     If Point is able to obtain FDA approval to market PT-100 for the treatment
of neutropenia in cancer patients undergoing chemotherapy, Point believes that
PT-100 could have clinical and competitive advantages over currently available
products.

     In particular, if PT-100 were demonstrated by Point to be orally effective
in such treatments, PT-100 would have the clinical advantage of being able to be
administered to patients in tablet form, as opposed to injection or other means
of drug administration that must be used by products currently being marketed
for the treatment of neutropenia. Point believes PT-100 is orally bioavailable
because increasing amounts of PT-100 were found in the serum of clinical study
subjects in initial human safety studies as increasing doses of PT-100 were
administered orally. In addition, an enzyme indicator of PT-100 activity was
inhibited in a dose-dependent manner (increased doses caused decreased activity
of the enzyme). Moreover, Point has observed in animal models designed to test
PT-100's effects on neutropenia that neutrophil counts in animals increased
after PT-100 was given orally. Point also observed, in initial safety studies in
healthy human volunteers, that, at certain doses, PT-100 administered orally
caused increases in neutrophils. These observations suggest that PT-100,
administered orally, could provide an effective treatment of neutropenia.

     Another possible advantage of PT-100 over currently available products
could be the cost and ease of manufacturing the product. Most of the products
currently available for the treatment of neutropenia are large, complex
proteins, which are made in biological systems. In contrast, PT-100 is a member
of a class of chemical compounds known as boronated dipeptides, a small molecule
which is chemically synthesized. Synthetic small molecule products are generally
less expensive to manufacture than large protein-based treatments. For this
reason, Point believes that its costs of production for a treatment regimen of
PT-100 would be less than the costs of producing large protein-based treatments
for neutropenia.

     In addition to potentially serving as a treatment for different
hematopoietic disorders, PT-100 has been observed by Point in animal testing to
have an ability to inhibit the growth of different types of tumors. The tumor
responses in animals observed by Point have ranged from tumor growth inhibition
for certain types of tumors to full regression of other tumors. Point currently
plans to complete its preclinical research on the anti-tumor effects of PT-100
in 2002 and then to file an Investigational New Drug application with the FDA in
order to initiate a clinical program to test the safety and efficacy of PT-100
for a specific anti-tumor indication.

     To date, Point has not submitted PT-100 or any other product to the FDA for
marketing approval. Due to risks and uncertainties inherent in clinical testing
and the regulatory process, Point is not able to estimate at this time when
PT-100 may be submitted to the FDA for marketing approval or be commercially
available for any application, if at all.

  ROLE OF PT-100 IN HEMATOPOIESIS

     Hematopoiesis is a continuous process of blood cell development within the
body. The need for this continuous activity is due to the relatively short life
span of most blood cells. Hematopoiesis has several stages, starting in the bone
marrow with cells called hematopoietic stem cells. Hematopoietic stem cells are
believed

                                        2
<PAGE>

to be the origin of all blood cells, undergoing a well-regulated process of
proliferation (increase in cell numbers) and differentiation into different
types of blood cells. Under the influence of certain growth factors, which are
proteins which activate cell proliferation and differentiation, hematopoietic
stem cells develop into primitive hematopoietic progenitor cells. Primitive
hematopoietic progenitor cells are cells in the bone marrow that have the
ability to develop into different blood cell types. Depending on the body's
needs and the presence or absence of specific growth factors, primitive
hematopoietic progenitor cells develop into committed progenitor cells. These
cells are programmed to end up as blood cells of a specific type, such as
neutrophils, red blood cells and platelets. See the hematopoiesis stem cell
chart set forth below.

                             [HEMATOPOIESIS GRAPH]

     Various disease treatments, such as chemotherapy, can have the unintended
effect of suppressing the production of blood cells. Certain hematopoietic
disorders, such as anemia, thrombocytopenia (which is an abnormally low level of
platelets) or neutropenia can arise also due to damage to bone marrow cells
caused by AIDS and other diseases. Since all blood cells have critical functions
(for example, neutrophils fight infections and red blood cells carry oxygen), a
patient's safety is at risk the longer he or she is missing the full complement
of blood cells.

     Point has observed that PT-100 has the ability to stimulate the growth of
primitive hematopoietic progenitor cells under certain laboratory conditions in
human cell cultures. Point has also observed in research animal models that
PT-100 appears to stimulate the proliferation of primitive hematopoietic
progenitor cells. Point believes that these observations are due to PT-100's
interaction with specialized cells in the bone marrow called stromal cells to
increase the production of certain hematopoietic growth factors. These growth
factors are believed to be required for the development and differentiation of
mature blood cells. For example, Point has observed in preclinical animal
research that PT-100 stimulates the production of the growth factor G-CSF, which
is a protein involved in both the expansion of primitive hematopoietic
progenitor cells and the differentiation of committed progenitor cells into
neutrophils.

     By using well-established mouse models of neutropenia, Point demonstrated
that PT-100 significantly accelerated neutrophil recovery in mice following
treatment with various chemotherapeutic agents. In addition, the effect on the
rate of neutrophil regeneration was achieved at microgram doses of PT-100 after
                                        3
<PAGE>

only a few days of administration. This supports other observations made by
Point, namely, that PT-100 acts to stimulate cellular growth and differentiation
in hematopoiesis in mouse models. Similarly, Point tested PT-100 in an animal
model of acute anemia. Results of these tests demonstrated that mice pretreated
with PT-100 developed less severe anemia due to a significantly faster recovery
of mature red blood cells than in the control animals. In addition, committed
progenitors of red blood cells were substantially increased in PT-100-treated
mice, which supports previous observations that PT-100 increases the primitive
hematopoietic progenitor pool in the bone marrow of mice.

  POTENTIAL CLINICAL INDICATIONS FOR PT-100

     Hematopoietic Disorders

     Point believes that PT-100 may be able to treat a number of different
hematopoietic disorders in which the hematopoietic process has been suppressed
by disease, chemotherapy, or other causes, because PT-100 appears to not only
stimulate differentiation of blood cells, but also to promote growth of
primitive hematopoietic progenitor cells. Therefore, PT-100 has the potential to
create a larger pool of uncommitted cells that can be developed by the body into
neutrophils, red blood cells, and other types of mature blood cells.

     Neutropenia

     The treatment of neutropenia is the first clinical application for PT-100
being tested by Point in clinical trials. PT-100 has been tested in 120 healthy
human volunteers in two safety studies. The results of these studies suggested
that PT-100 was well tolerated at doses that increased levels of neutrophils in
the blood of certain clinical trial patients. The results of these studies were
used to establish the potentially pharmacologically active doses to be evaluated
in current clinical studies of PT-100.

     During the third quarter of 2001, Point Massachusetts initiated a Phase
I/II clinical study under an FDA-approved Investigational New Drug Application
in which cancer patients undergoing chemotherapy are given PT-100 as an adjunct
therapy for the treatment of neutropenia. This Phase I/II study is designed to
determine the clinical safety of PT-100 in cancer patients undergoing
chemotherapy, as well as to establish a dose of PT-100 that accelerates
neutrophil recovery following chemotherapy.

     Point also believes that PT-100 may have potential for the treatment of
neutropenia in AIDS patients, but has not initiated any clinical testing for
this indication.

     Acute Anemia, Thrombocytopenia

     Point also believes that PT-100 has potential for the treatment of
additional hematopoietic disorders, such as acute anemia and thrombocytopenia (a
condition characterized by low levels of platelets which frequently occurs with
patients treated with chemotherapy). Point also believes that PT-100 may have
potential for the treatment of acute anemia in AIDS patients. Point has not yet
initiated clinical testing of PT-100's safety and efficacy in treating these
conditions.

     Anti-Tumor Indication

     In addition to the stimulation of the hematopoiesis, Point has discovered
in preclinical animal experiments that PT-100 can also stimulate the production
of soluble proteins known to promote defenses against malignant tumors. The
soluble proteins involved are referred to as cytokines and chemokines. These
cytokines and chemokines regulate the growth and function of specialized blood
cell types, including T and B cells, which are necessary in order to provide the
body's immune defense against foreign agents and tumors. PT-100 has been shown,
in animal models, to increase production of certain cytokines and chemokines
known to promote both immunological and non-immunological attack against tumors.
Consequently, PT-100 has been evaluated in animal models of cancer and shown to
significantly inhibit the growth of experimental tumors. In certain animal
models PT-100 treatment caused rejection of specific tumors. Because PT-100
appears to stimulate multiple blood cell types involved in anti-tumor defenses
in animal models, Point believes that PT-100 might provide a new clinical
approach to cancer therapy. Point currently plans to complete its preclinical
research on the anti-tumor effects of PT-100 in 2002 and then to file an
Investigational New Drug application with the FDA in order to initiate a
clinical program to test the safety and efficacy of PT-100 for a specific
anti-tumor indication.

                                        4
<PAGE>

INTELLECTUAL PROPERTY

     In May 1997, Point Massachusetts entered into a license agreement with the
Tufts University School of Medicine ("Tufts"). Under the Tufts license
agreement, Point has been granted exclusive, worldwide rights to the boroproline
family of small molecule compounds, including PT-100. In return, Point
Massachusetts paid Tufts a non-refundable license fee and issued to Tufts and
its designees a total of 90,459 shares of Point Massachusetts common stock. In
addition, Point is required to pay Tufts a minimum annual payment of $20,000;
clinical-based milestone payments; royalties on net sales of products covered by
the license; and a percentage of milestone payments received by Point from any
sublicensor of the Tufts patents or technology. The Tufts license agreement
remains in effect until the later of the date of the last-to-expire patents, or
15 years from the date of initial commercial sale of a licensed product. See
"Risk Factors -- If Tufts University School of Medicine terminates Point's
license, Point could experience delays or be unable to complete the development
and commercialization of its potential products."

     Protection of Point's proprietary compounds and technology is essential to
Point's business. Point's policy is to protect its technology by, among other
things, filing or causing to be filed on its behalf, patent applications for
technology relating to the development of its business. Currently, Point is
awaiting action on various patent applications relating to technology or the
uses or products thereof which it owns or which it has licensed.

     The license from Tufts includes five U.S.-issued patents. Additionally,
Point has been issued two U.S. and corresponding foreign patents and has been
granted a Notice of Allowance for a third patent. Point's patents are related to
its hematopoietic program and composition of matter covering its small
molecules. Point has also filed patent applications in the United States and in
foreign countries relating to hematopoietic stimulation and anti-tumor agents.

GOVERNMENT REGULATION

     Regulation by governmental authorities in the United States and other
countries is a significant factor in the development, manufacture and marketing
of pharmaceuticals and in Point's ongoing research and development activities.
All of Point's products will require regulatory approval by governmental
agencies prior to commercialization. In particular, pharmaceutical drugs are
subject to rigorous preclinical testing and clinical trials and other
pre-marketing approval requirements by the FDA and regulatory authorities in
other countries. In the United States, various federal, and in some cases state,
statutes and regulations also govern or impact upon the manufacturing, safety,
labeling, storage, record-keeping and marketing of pharmaceutical products. The
lengthy process of seeking required approvals and the continuing need for
compliance with applicable statutes and regulations require the expenditure of
substantial resources. Regulatory approval, when and if obtained for any of
Point's products, may be limited in scope, which may significantly limit the
indicated uses for which Point's products may be marketed. Further, approved
drugs and manufacturers are subject to ongoing review and discovery of
previously unknown problems that may result in restrictions on their
manufacture, sale or use or in their withdrawal from the market.

     The following paragraphs provide a general overview of the approval process
for a new drug.

     Investigational new drug application.  If a company wants to test a new
drug in human patients, an investigational new drug application ("IND") must be
prepared and filed with the FDA to request FDA authorization to begin human
testing of the drug. The IND becomes effective if not rejected or put on
clinical hold by the FDA within 30 days. In addition, an Institutional Review
Board, comprised in part of physicians at the hospital or clinic where the
proposed studies will be conducted, must review and approve the study protocol
and monitor the study on an ongoing basis. The FDA may, at any time during the
30-day period or at any time thereafter, impose a clinical hold on proposed or
ongoing clinical trials. If the FDA imposes a clinical hold, clinical trials
cannot commence or recommence without FDA authorization and then only under
terms authorized by the FDA. In some instances, the IND application process can
result in substantial delay and expense.

     Clinical trials.  Clinical trials typically are conducted in three
sequential phases, Phases I, II and III. These phases may be compressed, may
overlap or may be omitted in some circumstances.

                                        5
<PAGE>

     -- Phase I clinical trials. After an IND becomes effective, Phase I human
clinical trials can begin. These studies evaluate a drug's safety profile and
the range of safe dosages that can be administered to the patient, including the
maximum tolerated dose that can be given to a patient with the target disease.
Phase I studies also determine how a drug is absorbed, distributed, metabolized
and excreted by the body and duration of its action.

     -- Phase II clinical trials. Phase II clinical trials of drugs typically
are designed to evaluate the potential effectiveness of the drug on patients
with specific types and stages of disease or medical condition and to further
ascertain the safety of the drug at the dosage given in a larger patient
population.

     -- Phase III clinical trials. In Phase III clinical trials, the drug is
usually tested in a controlled randomized trial comparing the investigational
new drug to an approved form of therapy in an expanded and well defined patient
population and at multiple clinical sites. The goal of these studies is to
obtain definitive statistical evidence of safety and efficacy of the
investigational new drug regimen as compared to an approved standard treatment
in defined patient populations with a given disease and stage of illness.

     New drug application.  After completion of clinical trials, if there is
substantial evidence that the drug is safe and effective, a New Drug
Application, or NDA, is prepared and submitted for the FDA to review. The NDA
must contain all of the essential information on the drug gathered to that date,
including data from clinical trials, and the content and format of an NDA must
comply with all FDA regulations. Accordingly, the preparation and filing of an
NDA is a major undertaking for a company.

     The FDA reviews all NDAs submitted before it accepts them for filing and
may request additional information from the sponsor rather than accepting an NDA
for filing. In such an event, the NDA must be submitted with the additional
information and, again, is subject to review before filing. Once the submission
is accepted for filing, the FDA begins an in-depth review of the NDA. By law,
the FDA has 180 days in which to review the NDA and respond to the applicant.
The review process is often significantly extended by the FDA through requests
for additional information and clarification. The FDA may refer the application
to an appropriate advisory committee, typically a panel of clinicians, for
review, evaluation and a recommendation as to whether the application should be
approved. The FDA is not bound by the recommendation, but gives great weight to
it. If the FDA evaluations of both the NDA and the manufacturing facilities are
favorable, the FDA may issue either an approval letter or an approvable letter,
which usually contains a number of conditions that must be satisfied in order to
secure final approval. If the FDA's evaluation of the NDA submission or
manufacturing facilities is not favorable, the FDA may refuse to approve the NDA
or issue a not approvable letter.

     Other regulatory requirements.  Any products Point manufactures or
distributes under FDA approvals would be subject to pervasive and continuing
regulation by the FDA, including record-keeping requirements and reporting of
adverse experiences with the products. Drug manufacturers and their
subcontractors are required to register with the FDA and, where appropriate,
state agencies, and are subject to periodic unannounced inspections by the FDA
and state agencies for compliance with good manufacturing practice regulations,
which impose procedural and documentation requirements upon Point and any third
party manufacturers Point utilizes.

     Point is also subject to numerous other federal, state, local and foreign
laws relating to such matters as safe working conditions, manufacturing
practices, environmental protection, fire hazard control and disposal of
hazardous or potentially hazardous substances. Point may incur significant costs
to comply with such laws and regulations now or in the future. In addition,
Point cannot predict what adverse governmental regulations may arise from future
United States or foreign governmental action.

     Approvals outside of the United States.  Point will also be subject to a
wide variety of foreign regulations governing the development, manufacture and
marketing of its products. Whether or not FDA approval has been obtained,
approval of a product by the comparable regulatory authorities of foreign
countries must still be obtained prior to manufacturing or marketing the product
in those countries. The approval process varies from country to country and the
time needed to secure approval may be longer or shorter than that required for

                                        6
<PAGE>

FDA approval. Point cannot make assurances that clinical trials conducted in one
country will be accepted by other countries or that approval in one country will
result in approval in any other country.

COMPETITION

     The biotechnology and pharmaceutical industries are subject to rapid and
significant technological change. Competitors of Point include among others,
major pharmaceutical companies, specialized biotechnology companies, and
universities and other research institutions. The following sections describe
the products with which PT-100 would likely compete if it were to be approved
for marketing as a treatment of neutropenia in cancer patients undergoing
chemotherapy or as a treatment of acute anemia caused by chemotherapy treatment.
Based on SEC filings and analyst reports of public companies, Point believes
that the annual sales of drugs that treat neutropenia and acute anemia currently
exceed $3 billion.

  TREATMENT OF NEUTROPENIA

     Any products or technologies that are directly or indirectly successful in
addressing the causes or incidence of low levels of neutrophils could negatively
impact the potential market for PT-100 if it is approved for the treatment of
neutropenia in cancer patients undergoing chemotherapy treatment or for
treatment of neutropenia in AIDS patients. These include products that could
receive approval for indications similar to those for which Point plans to seek
for PT-100, development of chemotherapy treatments that are less
myelosuppressive than existing treatments and the availability of anti-cancer
modalities that reduce the need for myelosuppressive chemotherapy.

     Currently, the primary product marketed for the treatment of neutropenia in
cancer patients undergoing chemotherapy treatment is granulocyte-colony
stimulating factor. Amgen, Inc. markets the injectable neutrophil stimulant
product, NEUPOGEN(TM) as an adjunct to chemotherapy in the United States,
countries of the European Union ("EU"), Canada, and Australia. NEUPOGEN(TM) is a
recombinant-methionyl human granulocyte colony-stimulating factor ("G-CSF").
Chugai markets a G-CSF product in Japan as an adjunct to chemotherapy. Chugai
and Aventis market a G-CSF product in certain EU countries as an adjunct to
chemotherapy. Chugai, through its licensee, AMRAD, markets this G-CSF product in
Australia as an adjunct to chemotherapy. Under an agreement with Amgen, Chugai
is precluded from selling its G-CSF product in the U.S., Canada and Mexico.

     In addition, Immunex Corporation ("Immunex") markets a competing injectable
CSF product, granulocyte macrophage colony stimulating factor ("GM-CSF") in the
U.S. as an adjunct to chemotherapy treatments for acute non-lymphocytic leukemia
("ANLL") and acute myelogenous leukemia ("AML"). Novartis AG markets another
GM-CSF product for use in BMT patients and as an adjunct to chemotherapy in the
EU and certain other countries. This GM-CSF product is currently being developed
for similar indications in the U.S. and Canada. Nartograstim, a modified G-CSF
protein, is sold by Kyowa Hakko Kogyo Co., Ltd. in Japan.

  TREATMENT OF ANEMIA

     If Point develops and obtains FDA approval to market PT-100 for the
treatment of acute anemia (such as found in cancer patients treated with
chemotherapy or found in AIDS patients), any products or technologies that are
directly or indirectly successful in addressing the causes or incidence of low
levels of red blood cells caused by chemotherapy could negatively impact the
potential market for PT-100 for this indication. Currently, Johnson & Johnson
markets the erythropoietin drug PROCRIT(TM) for the treatment of anemia
associated with chemotherapy. Amgen has recently submitted license applications
in the United States and Europe for ARANESP(TM), a fast-acting erythropoiesis
stimulating protein which requires less frequent dosing than the existing
therapies. Also, Aventis S.A. and Transkaryotic Therapies, Inc., are currently
developing a gene-activated erythropoietin drug.

                                        7
<PAGE>

  FORMER BUSINESS OF THE COMPANY

     From 1994 to May 2001, the Company developed and supplied innovative blood
filtration technologies.

     In April 2000, the Company was notified that the American Red Cross, the
Company's largest customer, was suspending use of the Company's r\LS System
pending the outcome of an investigation of a small number of non-critical
adverse reactions in patients who had received a transfusion of blood filtered
with the r\LS. In September 2000, the Company was notified that the American Red
Cross terminated its supply contract for the r\LS System based on the extended
period of time taken to prove product improvements resolved these reactions. In
August 2001, the Company and the American Red Cross signed a termination and
release agreement in connection with the supply contract between the two
parties. The agreement provided for the Company to pay the American Red Cross
$600,000 and the release of any and all claims that either party may have
against the other, with certain exceptions.

     In March 2001, the Company signed a termination and release agreement with
Gambro BCT (the Company's exclusive distributor of its r\LS System worldwide,
except for sales to the American Red Cross), effective November 2000, which
ended the distribution and development agreement. In consideration for the
Company's inventory (net book value at December 31, 2000 of $332,000) of
products bearing Gambro's company name, and by way of complete resolution of all
issues outstanding between the Company and Gambro, Gambro agreed to return
101,169 shares of common stock with a fair market value at closing of $332,000.

     The termination of the purchase contract by the American Red Cross and the
distribution and development agreement with Gambro had an adverse impact on the
Company's ability to generate revenues from the sale of the Company's r\LS
product and on the Company's supply contracts with manufacturers of key
components to the r\LS. On May 29, 2001, the Company sold substantially all of
its non-cash assets to Whatman BioScience Inc., a Massachusetts corporation and
a subsidiary of Whatman plc, an English corporation, pursuant to the terms of an
Asset Purchase Agreement by and among the Company, Whatman and Whatman plc,
dated as of February 3, 2001 and amended on April 2, 2001. The sale and the name
change of HemaSure Inc. to HMSR Inc. were approved at the special meeting of
stockholders of the Company held on May 21, 2001. On June 6, 2001, the Company
announced that stockholders of the Company had voted in favor of the sale of the
non-cash assets to Whatman and that it had changed its name from HemaSure Inc.
to HMSR Inc.

     Under the terms of the Asset Purchase Agreement, Whatman acquired
substantially all of the non-cash assets of the Company for consideration which
included a potential royalty payment in the amount of 4% on sales by Whatman or
its affiliates of filtration products using the Company's technology. The
royalty payments are subject to a maximum, aggregate amount of $12 million and
are subject to certain reductions set forth in the Royalty Agreement, dated as
of May 29, 2001, by and among the Company, Whatman and Whatman plc, including
any damages and certain settlement amounts paid by Whatman related to the
Company's patent litigation with Pall Corporation.

     In connection with the Whatman transaction, the Company retained certain
liabilities, including without limitation, (i) any liabilities under any benefit
plan of the Company, (ii) tax liabilities incurred which relate to periods prior
to the closing of the Whatman transaction, (iii) accounts payable arising prior
to the closing of the Whatman transaction, (iv) any liabilities of the Company
owed to the Company's security holders in their capacity as security holders of
the Company, and (v) any liabilities of the Company owed to Gambro Inc. or
Sepracor, Inc. arising or resulting from their respective contractual
relationships with the Company.

     After the sale to Whatman and before the merger with Point Massachusetts,
the Company's continuing operations consisted of general and administrative
expenses to operate a shell company and to investigate various strategic
business combinations.

FORWARD-LOOKING STATEMENTS

     This Item and other Items in this report contain "forward-looking"
information as that term is defined in the Private Securities Litigation Reform
act of 1995 or by the Securities and Exchange Commission in its

                                        8
<PAGE>

rules, regulations and releases. This information includes statements on the
prospects for our drug development activities and results of operations based on
our current expectations, such as statements regarding certain milestones with
respect to the our technologies and product candidates. Forward-looking
statements are statements that are not historical facts, and can be identified
by, among other things, the use of forward-looking language, such as "believe,"
"expect," "may," "will," "should," "seeks," "plans," "schedule to,"
"anticipates" or "intends" or the negative of those terms, or other variations
of those terms of comparable language, or by discussions of strategy or
intentions. In particular, these forward-looking statements include statements
relating to present or anticipated scientific progress, development or
regulatory approval of potential products, future revenues, capital
expenditures, research and development expenditures, future collaborations,
intellectual property, personnel and manufacturing requirements and
capabilities. We caution investors that such forward-looking statements are not
guarantees of future performance, and that known and unknown risks,
uncertainties and other factors, including those risks factors identified below,
in Management's Discussion and Analysis of Financial Condition and Results of
Operations, and elsewhere in this report, may cause actual results to differ
materially from those forward-looking statements. In addition, we caution you
that forward-looking statements speak only as of the date they are made, and we
undertake no obligation to update them, even if our experience or future changes
make it clear that any projected results expressed or implied herein will not be
realized.

RISK FACTORS

     Point operates in a rapidly changing environment that involves a number of
risks, some of which are beyond Point's control. The following discussion
highlights some of these risks and others are discussed elsewhere herein.

  IF POINT FAILS TO OBTAIN THE CAPITAL NECESSARY TO FUND ITS OPERATIONS, POINT
  WILL BE UNABLE TO SUCCESSFULLY DEVELOP OR COMMERCIALIZE PT-100

     Point expects that its working capital will fund its operations until the
end of 2003 and therefore additional funding will be required in the future to
finance its operations. Point does not know whether additional funding will be
available when needed, or that, if available, Point will be able to obtain
funding on satisfactory terms. Point Massachusetts spent approximately $5.9
million since inception, and Point expects its capital outlays and operating
expenditures to increase over the next several years as Point expands its
infrastructure and preclinical and clinical trial activities. Point may raise
these funds through public or private equity offerings, debt financings or
corporate alliance and licensing arrangements.

     Point's future capital requirements depend on many factors, including the
progress of its research and development efforts, the scope and results of
preclinical research and clinical studies of PT-100, the cost and timing of
regulatory approvals of PT-100, technological advances, the reevaluation of the
commercial potential of PT-100 in light of developments in Point's industry or
market, the status of competitive products, the establishment of a sales force
and the development of manufacturing capacity. Unexpected events or other
factors beyond Point's control could also impact its capital requirements. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Point."

     To the extent Point raises additional capital by issuing equity securities,
all stockholders may experience substantial dilution. Point may be required to
relinquish rights to its technologies or PT-100, or grant licenses on terms that
are not favorable to Point, in order to raise additional funds through alliance,
joint venture and licensing arrangements. If adequate funds are not available,
Point will be required to delay, reduce the scope of or eliminate one or more of
its development programs.

 POINT'S PRODUCT CANDIDATE, PT-100, IS IN THE EARLY STAGES OF HUMAN CLINICAL
 TESTING AND POINT IS UNABLE TO ESTIMATE WHEN IT WILL BECOME COMMERCIALLY
 AVAILABLE, IF AT ALL

     Point's product candidate, PT-100, is currently undergoing evaluation in
early-stage clinical trials for the treatment of neutropenia. Additional human
clinical trials will be required before Point can submit any application for
approval to sell, manufacture and distribute PT-100 for the treatment of
neutropenia. For any

                                        9
<PAGE>

other applications, additional animal and laboratory testing along with human
clinical trials will need to be completed before Point can submit any
application for approval to sell, manufacture and distribute PT-100. PT-100 has
not received regulatory approval for commercial sale and Point is unable to
estimate when it will become commercially available, if at all.

     To obtain regulatory approval for the commercial sale of PT-100 for its
intended therapeutic applications, Point must demonstrate through pre-clinical
testing and carefully controlled and well-designed clinical trials that PT-100
is safe and effective in humans for the proposed therapeutic indications.
Conducting clinical trials is a lengthy, expensive and highly uncertain process.
Point is not able to estimate at this time when it will complete clinical trials
for PT-100 for the treatment of neutropenia in chemotherapy patients, and
clinical trials for additional indications have not yet been initiated. The
length of time to complete clinical trials varies according to the type,
complexity, novelty and intended use of the product candidate. Point's clinical
trials may be suspended at any time if the Food and Drug Administration or Point
believes the participating patients are exposed to unacceptable health risks.
Point may encounter other problems in its studies that will cause the Food and
Drug Administration or Point to delay or suspend the studies. Point's ability to
timely commence and complete clinical trials of PT-100 may be adversely affected
by many factors, including one or more of the following:

     - ineffectiveness of PT-100, or perceptions by physicians or the FDA that
       PT-100 is not effective for a particular indication;

     - inability to manufacture sufficient quantities of PT-100 for use in
       clinical trials in compliance with strictly enforced regulatory
       requirements;

     - failure of the FDA to allow Point's clinical trials to commence or
       proceed;

     - slower than expected rate of eligible patient recruitment in the trials;

     - inability to adequately follow or evaluate patients after treatment;

     - unforeseen safety issues such as patients in clinical trials suffering
       adverse health consequences related to PT-100;

     - government or regulatory delays;

     - problems with clinical trial design;

     - failure to comply with FDA regulations for good clinical practices; or

     - any material compromise of data integrity.

     The results Point has obtained to date in its clinical trials are
preliminary and the studies are currently ongoing. Point cannot predict or
guarantee that the results of further testing, including later-stage controlled
human clinical testing, will be successful or will result in FDA approval. If
Point's trials are not successful, or are perceived as not successful by the FDA
or physicians, Point's business, financial condition, results of operations and
prospects will be harmed. If Point obtains FDA approval for PT-100 for one or
more therapeutic indications, Point may then elect to perform further clinical
studies intended to broaden the labeling indications. If such studies do not
support expanding the labeling indications, Point's ability to promote and
market such products will be limited.

 POINT MASSACHUSETTS HAD A HISTORY OF LOSSES, AND POINT EXPECTS TO CONTINUE TO
 INCUR LOSSES AND MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY

     As of September 30, 2001, Point Massachusetts had an accumulated deficit of
approximately $7.7 million. The extent of Point's future losses and the timing
of profitability are highly uncertain, and Point may never achieve profitable
operations. Point Massachusetts did not have any products that generated any
sales revenue, and Point likely will not until PT-100 or any other product of
Point becomes commercially available, if ever. Point expects to incur losses at
least until it begins commercial sales of its first approved product, if any.
Point expects that its operating expenses will increase and accelerate as its
research and development,

                                        10
<PAGE>

preclinical, and clinical operations expand, even if Point succeeds in
developing one or more commercial products. Point's ability to achieve product
revenue and profitability is dependent on its capability, alone or with
partners, to successfully complete the development of PT-100, conduct clinical
trials, obtain necessary regulatory approvals, and manufacture, distribute,
market and sell PT-100. Point cannot provide assurance that it will generate
product revenues or achieve profitability.

 IF TUFTS UNIVERSITY SCHOOL OF MEDICINE TERMINATES POINT'S LICENSE, POINT COULD
 EXPERIENCE DELAYS OR BE UNABLE TO COMPLETE THE DEVELOPMENT AND
 COMMERCIALIZATION OF ITS POTENTIAL PRODUCTS

     Point licenses key technology including the rights to PT-100, its lead
product, from Tufts University School of Medicine. The underlying licenses for
this technology terminate on the later of the date of the last-to-expire
patents, or 15 years from the date of initial commercial sale of the licensed
product. Termination of these licenses prior to or upon expiration of the term
could force Point to delay or discontinue its development and commercialization
programs. Pursuant to the terms of the license, Tufts University School of
Medicine has the right to terminate the license prior to expiration of the term
upon a material breach of the license by Point, Point's ceasing to do business
or becoming insolvent or Point's failure to sell a licensed product in the U.S.
market by May 2009. Point has no assurance that it would be able to license
substitute technology in the future. Point's inability to do so could impair
Point's ability to conduct its business because it may lack the technology, the
necessary rights to such technology, or the finances required, in each case, to
develop and commercialize its potential products.

 IF POINT FAILS TO OBTAIN REGULATORY APPROVAL FOR PT-100 IN A TIMELY MANNER,
 POINT'S OPERATING RESULTS AND ITS BUSINESS MAY BE ADVERSELY AFFECTED

     Point must obtain regulatory approval before marketing or selling PT-100 in
any major world pharmaceutical market for any therapeutic application for
PT-100. Due to risks and uncertainties inherent in clinical testing and the
regulatory process, Point is not able to estimate when PT-100 may be
commercially available for any application, if at all.

     In the U.S., Point must obtain FDA approval for PT-100 and each indication
that Point intends to commercialize. The FDA approval process is typically
lengthy and expensive, and such approval is never certain and entails a high
degree of risk. Products marketed, manufactured or distributed abroad are also
subject to foreign government regulation. PT-100 has not received regulatory
approval to be commercially marketed and sold for any therapeutic indication. If
Point fails to obtain regulatory approval, it will be unable to market and sell
PT-100. Point cannot predict with certainty if or when it might submit PT-100
for regulatory approval for any therapeutic indication. Once Point submits
PT-100 for review, it cannot assure you that the FDA or other regulatory
agencies will grant approvals on a timely basis or at all. If regulatory
approval for any therapeutic application for PT-100 is delayed, Point's
business, financial condition or results of operations would be materially
adversely affected.

 BECAUSE POINT DEPENDS ON THIRD PARTIES TO CONDUCT HUMAN CLINICAL STUDIES, POINT
 MAY ENCOUNTER DELAYS IN PRODUCT DEVELOPMENT AND COMMERCIALIZATION

     Point has relatively few employees and does not have the resources or
experience to design and conduct human clinical trials on its own. Point must
therefore contract with third parties to perform the clinical trials needed for
Point to submit PT-100 to the FDA for marketing approval. Accordingly, Point may
lose some control over the cost of and time required to conduct these studies.
In addition, these third parties might not conduct Point's clinical trials in
accordance with regulatory requirements. Currently, Point is dependent on a
single contractor for conducting clinical trials of PT-100, although Point
believes alternative contractors are available for conducting clinical trials of
PT-100 on terms acceptable to Point. The failure of this contractor to carry out
its contractual duties could delay or prevent the successful development and
commercialization of PT-100.

                                        11
<PAGE>

 POINT MAY FAIL TO ADEQUATELY PROTECT OR ENFORCE ITS INTELLECTUAL PROPERTY
 RIGHTS, AND POINT'S PRODUCTS AND PROCESSES MAY INFRINGE THE INTELLECTUAL
 PROPERTY RIGHTS OF OTHERS

     As with any pharmaceutical or biotechnology company, Point's patent and
other proprietary rights are subject to uncertainty and risk. Point's success
will depend in part on its ability to obtain and enforce patent protection for
Point's products in the U.S. and in other countries. Point has been issued 2
U.S. and corresponding foreign patents and has been granted a Notice of
Allowance for a third patent. Point's patents are related to its hematopoietic
program and composition of matter covering its small molecules. Point has also
filed patent applications in the United States and in foreign countries relating
to hematopoietic stimulation and anti-tumor agents. It is possible that no
patents will be issued on any of Point's patent applications, and it is possible
that the claims issued will not be sufficiently broad to protect Point's
technology or that the patents will not provide protection against competitive
products or otherwise be commercially valuable.

     Point's commercial success will also depend in part on Point's ability to
commercialize PT-100 without infringing patents or other proprietary rights of
others. Any patents issued to or licensed by Point could be challenged,
invalidated, infringed, circumvented or held unenforceable. PT-100 may infringe
current or future patents or other proprietary rights of others. To date, Point
has not received any communications from third parties nor is Point aware of any
claims that PT-100 or any of Point's other activities infringe upon the patent
rights of any third party. However, Point cannot assure you that other companies
or individuals have not or will not independently develop substantially
equivalent proprietary rights or that other parties have not or will not be
issued patents that may prevent the sale of Point's products or require
licensing and the payment of significant fees or royalties in order for Point to
be able to carry on its business.

     Litigation or other legal proceedings could result in substantial costs to
Point and may be necessary to enforce any of Point's patents or other
proprietary rights or to determine the scope and validity or enforceability of
other parties' proprietary rights. The defense and enforcement of patent and
intellectual property claims are both costly and time consuming, even if the
legal outcome is favorable to Point. Any adverse legal outcome could subject
Point to significant liabilities to third parties, require disputed rights to be
licensed from third parties, or require Point to cease manufacturing or selling
its future products.

     Point's employees, consultants and advisors are required to enter into
written confidentiality agreements that prohibit the disclosure or use of
confidential information. Point also has entered into written confidentiality
agreements that are intended to protect its confidential information delivered
to third parties for research and other purposes. However, these agreements
could be breached and Point may not have adequate remedies for any breach, or
Point's trade secrets and proprietary information could otherwise become known
or be independently discovered by others.

 IF POINT'S COMPETITORS REACH THE MARKET SOONER OR DEVELOP PRODUCTS AND
 TECHNOLOGIES THAT ARE MORE EFFECTIVE OR HAVE REDUCED SIDE EFFECTS, POINT'S
 COMMERCIAL OPPORTUNITY WILL BE REDUCED OR ELIMINATED

     The pharmaceutical and biotechnology industries are intensely competitive.
There are existing products on the market that are used for the treatment of
patients with the same indications that Point has targeted including Amgen
Inc.'s NEUPOGEN(TM) and ARANESP(TM) and Johnson & Johnson's PROCRIT(TM). Because
PT-100 is still in the early stages of development, Point does not have the
sales, marketing, manufacturing or distribution capabilities necessary to
compete with well-established companies. If PT-100 is approved by the FDA for
one or more therapeutic applications, Point plans to enter into collaboration
agreements with one or more established companies in order to compete in the
marketplace. There can be no assurances that Point will be able to successfully
enter into any such collaborations with third parties or that any such
collaborations will be entered into on terms satisfactory to Point.

     There are also many public and private pharmaceutical companies,
biotechnology companies, public and private universities, governmental agencies
and research organizations actively engaged in drug discovery and research and
development of products for the treatment of patients with the same indications
that Point has targeted. Many of these organizations have financial, technical,
regulatory, patenting, manufacturing and marketing resources that are far
greater than Point's. If a competitor were to successfully develop or acquire
                                        12
<PAGE>

rights to a similar or more effective treatment of patients with the same
indications targeted by Point or one that has reduced side effects or offers
significantly lower costs of treatment, or were to successfully enter the market
in advance of Point with a similar or superior therapy, Point's business,
financial condition or results of operations could be materially adversely
affected.

     Point cannot provide assurances that research and development by others
will not render Point's technology or PT-100 obsolete or non-competitive or
result in treatments superior to any therapy or drug developed by Point, or that
any drug or therapy developed by Point will be preferred to any existing or
newly developed technologies.

 POINT'S MANUFACTURING STRATEGY PRESENTS A NUMBER OF RISKS

     Point does not currently have its own manufacturing facilities. Point
expects in the future to depend on outside contractors for the manufacture of
PT-100. Completion of Point's clinical trials and the commercialization of
PT-100 will require access to, or development of, manufacturing capabilities.
Point has entered into short-term arrangements with third parties with respect
to the manufacture of the quantities necessary for preclinical and early-stage
clinical development. As Point approaches later-stage clinical development and
commercialization of a product candidate, however, Point's intention is to enter
into longer-term arrangements with multiple manufacturing sources. Point may not
be able to enter into additional third-party manufacturing arrangements on
acceptable terms, if at all. An outside contractor may give greater priority to
other products or for other reasons may fail to manufacture or deliver the
required supply of PT-100 in a cost-effective or timely manner. Point's current
and future manufacturers are and will be subject to ongoing periodic unannounced
inspection by the FDA and corresponding state and foreign agencies for
compliance with strictly enforced good manufacturing practice regulations and
similar state and foreign standards, and Point does not have control over its
third-party manufacturers' compliance with these regulations and standards.

     Any of these factors could delay clinical trials or commercialization of
PT-100, interfere with sales, entail higher costs or result in Point being
unable to effectively sell Point's products. To the extent that Point is reliant
on a sole source of supply of a drug, any interruption in that supply could
prevent Point from effectively developing, testing and commercializing the drug.

 POINT'S ABILITY TO GENERATE REVENUES WILL BE DIMINISHED IF PT-100 IS NOT
 ACCEPTED IN THE MARKETPLACE, IF POINT FAILS TO OBTAIN ACCEPTABLE PRICES OR IF
 ADEQUATE REIMBURSEMENT IS NOT AVAILABLE FOR PT-100 FROM THIRD-PARTY PAYORS

     There are competing products to PT-100 already in the market for the
treatment of neutropenia and acute anemia, including Amgen Inc.'s NEUPOGEN(TM
)and Johnson & Johnson's PROCRIT(TM). See "Information Regarding
Point -- Competition." Even if approved for sale and distribution for one or
more therapeutic indications, PT-100 might not achieve market acceptance for
such indications or remain on the market. PT-100 may be rejected by the
marketplace due to many factors, including cost and the perceived risks versus
the benefits of PT-100. Physicians, patients, payors or the medical community in
general may be unwilling to accept, prescribe, utilize, recommend or reimburse
for PT-100 for such indications.

     Point's ability to commercialize its drugs may be limited due to the
continuing efforts of government and third-party payors to contain or reduce the
costs of health care through various means. For example, in many markets outside
the U.S., the pricing and profitability of prescription pharmaceuticals are
subject to government control. In the U.S., Point expects that there will
continue to be federal and state proposals to implement additional government
control. Also, increasing emphasis on managed care in the U.S. and the
possibility of government regulation of prescription drug prices will likely
continue to put additional pressure on the pricing of pharmaceutical products.
Cost control initiatives could decrease the price that Point might otherwise
achieve for PT-100 in the future. Further, cost control initiatives could
adversely affect Point's ability to commercialize PT-100 and its ability to
realize profits and revenues from this commercialization.

                                        13
<PAGE>

     Point's ability to commercialize pharmaceutical products, alone or with
distributors or others, may depend in part on the extent to which reimbursement
for the products will be available from:

     - government and health administration authorities;

     - private health insurers; and

     - other third-party payors.

     Significant uncertainty exists as to the reimbursement status of newly
approved healthcare products. Third-party payors, including Medicare, are
challenging the prices charged for medical products and services. Government and
other third-party payors increasingly are attempting to contain healthcare costs
by limiting both coverage and the level of reimbursement for new drugs and by
refusing, in some cases, to provide coverage for uses of approved products for
disease indications for which the FDA has not granted labeling approval.
Third-party insurance coverage may not be available to patients for any products
Point discovers and develops, alone or with its strategic alliance partners. If
government and other third-party payors do not provide adequate coverage and
reimbursement levels for PT-100, the market acceptance of these products may be
reduced.

 POINT USES HAZARDOUS CHEMICALS AND RADIOACTIVE AND BIOLOGICAL MATERIALS IN ITS
 BUSINESS; ANY DISPUTES RELATING TO IMPROPER USE, HANDLING, STORAGE OR DISPOSAL
 OF THESE MATERIALS COULD BE TIME CONSUMING AND COSTLY

     Point's research and development operations involve the use of certain
hazardous materials, including certain chemicals and radioactive and biological
materials. The hazardous materials used most frequently by Point in its
operations include sodium chromate containing chromium-51 (51 Cr), nucleotides
containing phosphorus-32 (32 P) and phenol. Point's operations also produce
hazardous waste products. Point is subject to the risk of accidental
contamination or discharge or any resultant injury from these materials.
Federal, state and local laws and regulations govern the use, manufacture,
storage, handling and disposal of these materials. Point could be subject to
damages, fines and penalties in the event of an improper or unauthorized release
of, or exposure of individuals to, these hazardous materials, and Point's
liability could exceed its total assets. Compliance with environmental laws and
regulations may be expensive, and current or future environmental regulations
may impair Point's business. To date, Point's compliance costs with respect to
environmental laws and regulations have been minimal.

 POINT MAY BE SUED FOR PRODUCT OR OPERATIONAL LIABILITY

     Point may be held liable if any of its products or operations cause injury
or death or are found otherwise unsuitable during product testing,
manufacturing, marketing or sale. Point currently maintains general liability
and product liability insurance related to its clinical trials consistent with
industry standards which Point believes is adequate to insure Point against such
potential losses. When necessary for Point's products, Point intends to obtain
additional product liability insurance. Insurance coverage may be prohibitively
expensive, may not fully cover Point's potential liabilities or may not be
available in the future. Inability to obtain sufficient insurance coverage at an
acceptable cost or otherwise to protect against potential product liability
claims could prevent or inhibit the commercialization of Point's products. If
Point is sued for any injury caused by its products, the litigation could
consume substantial time and attention of Point's management and its liability
could exceed Point's total assets.

 IF POINT LOSES ITS KEY PERSONNEL OR IS UNABLE TO ATTRACT OR RETAIN ADDITIONAL
 PERSONNEL, POINT MAY BE UNABLE TO DEVELOP PT-100 OR ACHIEVE COMMERCIALIZATION
 OBJECTIVES

     Point is highly dependent on Donald R. Kiepert, Jr., its Chairman,
President and Chief Executive Officer, Richard N. Small, its Senior Vice
President, Chief Financial Officer and Treasurer, Lawrence L. Nussbaum, its
Chief Medical Officer and Barry Jones, its Vice President for Research, as well
as other principal members of Point's management and scientific staff. Point
does not maintain key-man liability insurance to protect itself against the loss
of any of these personnel. The loss of any of these personnel may have a
disruptive effect on its

                                        14
<PAGE>

operations until Point replaces the lost personnel, and may have a material
adverse effect on Point's product development and commercialization efforts if
Point is not able to attract qualified replacements.

     Point's success depends on its continued ability to attract, retain and
motivate highly qualified management and scientific personnel and on Point's
ability to develop and maintain relationships with leading academic institutions
and scientists. Competition for personnel and medical and research
collaborations is intense. In particular, Point's product development programs
depend on Point's ability to attract and retain highly skilled scientists and
clinical development and regulatory affairs personnel. In addition, Point will
need to hire additional personnel and develop additional collaborations as it
continues to expand its research and development activities. To date, Point has
been able to attract and retain key personnel when needed, such as the hiring of
Dr. Nussbaum as its Chief Medical Officer in October of 2001, to oversee Point
Massachusetts's clinical trials. Point is not aware of any key employee who
plans to retire or terminate his or her employment with the company in the near
future. Despite Point's ability in the past in attracting and retaining key
personnel, Point cannot provide assurances that it will be able to continue to
attract, retain or motivate personnel or develop or maintain such outside
relationships in the future.

  RECENT EVENTS UNRELATED TO THE OPERATING PERFORMANCE AND PROGRESS OF POINT MAY
  HAVE A MATERIALLY ADVERSE EFFECT ON POINT'S BUSINESS

     On September 11, 2001, terrorist attacks destroyed the World Trade Center
in New York and damaged the Pentagon in Washington, D.C. In response to the
possibility of additional terrorist attacks, several laws have been passed
and/or proposed that may impose new regulatory requirements on Point's business
operations. The federal USA Patriot Act, signed into law on October 26, 2001,
regulates the possession of certain biological agents and toxins. The law
imposes restrictions on the quantity of biological agents or toxins that a
company may possess and generally prohibits possession of biological agents or
toxins by illegal aliens, unlawful users of a controlled substance, anyone under
indictment for or who has been convicted of a crime punishable by imprisonment
for over one year and any person who is a national from a country considered by
the U.S. Secretary of State to support terrorism (currently, Cuba, Iran, Iraq,
Libya, North Korea, Sudan and Syria). Legislation has also been proposed in the
U.S. Congress that would impose even tighter federal controls on entities
possessing certain biological agents, including mandatory government
registration, site inspections, and employee background checks. Regulations
promulgated under any of these laws, in addition to possible legislation at the
state level, may impose administrative, employment and compliance burdens on
Point that would have a materially adverse effect on Point's business and
operations because Point's business involves handling biological substances.

  THE COMPANY MAY NOT PREVAIL IN PENDING LAWSUITS AND MAY, AS A CONSEQUENCE,
  LOSE CERTAIN ROYALTY PAYMENTS

     The Company is a defendant in a lawsuit brought by Pall Corporation
("Pall") regarding the LeukoNet System, which is no longer made or sold by the
Company (the "Pall Litigation"). In a complaint filed in November 15, 1996, Pall
alleged that the manufacture, use and/or sale of the LeukoNet System infringed
upon two patents held by Pall. Pall dropped its allegations concerning
infringement of one of the patents and alleges only that the LeukoNet System
infringed Pall's U.S. Patent No. 4,952,572 (the "'572 Patent").

     Under the terms of the Purchase Agreement entered into by and among the
Company and Whatman, Whatman assumed any and all obligations and liabilities of
the Company related to the Pall Litigation. However, any damages and certain
settlement amounts incurred by Whatman in connection with the Pall Litigation
may be offset by Whatman against any royalties owed by Whatman to the Company
pursuant to the terms of the Royalty Agreement described in Note C to the
Company's Historical Financial Statements included elsewhere in this report, and
thus may reduce the amount of royalties that the Company may collect under the
terms of the Royalty Agreement. See "Information Regarding the
Company -- Litigation."

     The damages and remedies sought by Pall include (i) judgment that the
Company infringed the '436 and '770 patents; (ii) an injunction against such
infringement; (iii) damages of an unspecified amount based upon infringement
described above; (iv) a finding that the infringement was willful and the
trebling of such

                                        15
<PAGE>

damages; (v) an award of costs and attorney's fees; (vi) an injunction against
the Company's tortiously interfering with Pall's prospective economic advantage
and from unfairly competing with Pall; (vii) judgment for an accounting of
damages based on tortious interference and unfair competition; and (viii) for
such other relief the court deems just and proper.

  THE COMPANY HAS CONTINGENT LIABILITIES RELATING TO ITS HISTORICAL DISCONTINUED
  OPERATIONS THAT COULD GIVE RISE TO LIABILITY RISKS IN THE FUTURE

     Prior to the sale of substantially all of the Company's non-cash assets to
Whatman in May of 2001, the Company was engaged in the business of developing
and supplying blood filtration devices. Although Whatman contractually assumed
and agreed to indemnify and hold harmless the Company from and against most
liabilities and obligations arising out of the conduct of the Company's blood
filtration business, the Company retained certain known and unknown risks that
were not contractually assumed by Whatman including. without limitation, (i) any
liabilities under any benefit plan of the Company, (ii) tax liabilities incurred
which relate to periods prior to the closing of the Whatman transaction, (iii)
accounts payable arising prior to the closing of the Whatman transaction, (iv)
any liabilities of the Company which were owed to the Company's security holders
in their capacity as such, and (v) liabilities of the Company which were owed to
Gambro Inc. or Sepracor, Inc. arising or resulting from their respective
contractual relationships with the Company. If for any reason Whatman is not
able to satisfy the assumed liabilities, if any, related to the Pall litigation
or other assumed liabilities, such outcome would have a material and adverse
effect on the Company's financial condition. Accordingly, there can be no
assurances that claims arising out of the Company's historical business and
operations would not be asserted against the Company in the future and, if
asserted, there can be no assurances that the Company would prevail.

  STOCKS TRADED ON THE OTC BULLETIN BOARD ARE SUBJECT TO MARKET RISKS IN
  ADDITION TO THOSE MARKET RISKS APPLICABLE TO EXCHANGE-TRADED AND NASDAQ STOCK
  MARKET TRADED STOCKS

     Shares of common stock of the Company are traded on the OTC Bulletin Board,
an electronic, screen-based trading system operated by the National Association
of Securities Dealers, Inc. Securities traded on the OTC Bulletin Board are, for
the most part, thinly traded and generally are not subject to the level of
regulation imposed on securities listed or traded on the NASDAQ system or on a
national securities exchange. As a result, an investor may find it difficult to
dispose of, or to obtain accurate quotations as to the price of, the Company
common stock.

     For the three-month period ended March 15, 2002, the average daily trading
volume for shares of the Company common stock (on a pre-split basis) ranged from
zero to 426,500 shares traded per day and the average daily trading volume
during such three-month period was only approximately 25,651 shares traded per
day. Accordingly, investors in the Company who wish to dispose of their shares
of common stock on any given trading day may not be able to do so or may be able
to dispose of only a portion of their shares of common stock.

  THE COMPANY'S STOCK PRICE COULD BE VOLATILE

     The price of the Company common stock has been and may in the future
continue to be extremely volatile, with the sale price fluctuating from a low of
$0.16 to a high of $19.81 (on a pre-split basis) in the two-year period ended
December 31, 2001. Factors such as the announcements of technological
innovations or new products by the surviving corporation or its competitors,
governmental regulation, health care legislation, developments in patent or
other proprietary rights of the surviving corporation or its competitors,
including litigation, fluctuations in operating results and market conditions
for health care and life sciences stocks in general could have a significant
impact on the future price of the Company's common stock. In addition, the stock
market has from time to time experienced extreme price and volume fluctuations
which may be unrelated to the operating performance of particular companies.

                                        16
<PAGE>

  SALES OF A NUMBER OF SHARES ELIGIBLE FOR PUBLIC SALE COULD CAUSE OUR STOCK
  PRICE TO DECLINE

     Certain holders of the Company securities, including Sepracor, Gambro Inc.
and Novo Nordisk A/S, are entitled to registration rights with respect to an
aggregate of 1,252,606 shares of common stock, including 236,700 shares of
common stock underlying the warrants issued to Sepracor. Sales of substantial
amounts of these shares in the public market or the prospect of sales of these
shares could adversely affect the market price of the Company common stock.

EMPLOYEES

     As of March 18, 2002, the Company employed nine persons, of which five were
engaged in research and development and four in administration and finance. All
of the Company's employees have signed an agreement which prohibits the
disclosure of confidential information to anyone outside the Company and assigns
to the Company any ideas, developments, discoveries, and inventions made. None
of the Company's employees are covered by a collective bargaining agreement, and
the Company has experienced no work stoppage. The Company considers its employee
relations to be good.

ITEM 2.  PROPERTIES

     Currently, the Company subleases approximately 3,000 square feet of office
and laboratory space in Boston, Massachusetts from New England Medical Center
("NEMC"). NEMC is affiliated with Tufts, from which the Company licenses certain
technology, and is a stockholder of the Company. The Company currently holds no
written sublease and is a tenant-at-will. The Company is actively seeking
additional space to support its administrative and clinical operations and
believes that it will be able to secure such space on commercially reasonable
terms. The Company believes that its current facilities, together with these
additional facilities, will be adequate and suitable for the Company's present
and future needs for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is a defendant in a lawsuit brought by Pall Corporation
("Pall") in the United States District Court for the Eastern District of New
York regarding the Company's LeukoNet System, which is no longer made or sold by
the Company (the "Pall Litigation"). In a complaint filed on November 15, 1996,
Pall alleged that the manufacture, use and/or sale of the LeukoNet System
infringed upon two patents held by Pall. Pall dropped its allegations concerning
infringement of one of the patents and alleges only that the LeukoNet System
infringed Pall's U.S. Patent No. 4,952,572 (the "'572 Patent").

     Under the terms of the Purchase Agreement entered into by and among the
Company and Whatman, Whatman assumed any and all obligations and liabilities of
the Company related to the Pall Litigation. However, any damages and certain
settlement amounts incurred by Whatman in connection with the Pall Litigation
may be offset by Whatman against any royalties owed by Whatman to the Company
pursuant to the terms of the Royalty Agreement described in Note C to the
Consolidated Financial Statements, and thus may reduce the amount of royalties
the Company may collect under the terms of the Royalty Agreement.

     With respect to the allegations concerning the '572 Patent, the Company
answered the complaint stating that the LeukoNet System does not infringe any
claim of the asserted patents. Further, the Company counterclaimed for
declaratory judgment of invalidity, noninfringement and unenforceability of the
'572 Patent. Pall amended its complaint to add Lydall, Inc., whose subsidiary
supplied the filter media for the LeukoNet System, as a co-defendant. The
Company filed for summary judgment of non-infringement, and Pall cross-filed for
summary judgement of infringement at the same time. Lydall, Inc. supported the
Company's motion for summary judgment of non-infringement, and filed a motion
for summary judgment that the asserted claims of the '572 patent are invalid as
a matter of law. Discovery has been completed in the action. The Court held a
hearing on the summary judgment motions on April 18, 2000. On September 19,
2001, the Court granted the Company's motion finding that claims 48, 50 and 51
of the '572 patent were not infringed. The Court is now in the process of
determining if any outstanding issues remain to be decided. Pall has contended
that claim 37, 38 and 42 of the '572 patent have been asserted against the
Company. Pall has also moved the Court to reconsider its decision granting
summary judgment against the Company. The
                                        17
<PAGE>

Company is opposing Pall's motion for reconsideration and Pall's contention that
additional claims are at issue, and is awaiting the Court's decision on whether
to enter final judgment in favor of the Company.

     The Company and Gambro BCT, Inc. filed a complaint on April 5, 1999 for
declaratory relief against Pall in the United States District Court of Colorado.
The Company and Gambro BCT seek declaratory relief that the "'572 Patent, Pall's
U.S. Patent No. 5,451,321 (the "'321 Patent") and Pall's U.S. Patent No.s
5,229,012, 5,344,561, 5,501,795 and 5,863,436 are invalid and not infringed by
the Company's r\LS System and methods of using the r\LS System. Pall moved to
dismiss or transfer to the Eastern District of New York or, in the alternative,
to stay this action. The Company and Gambro BCT opposed Pall's motion. On July
16, 1999, the United States District Court of Colorado denied Pall's motion to
transfer or, in the alternative, to stay the action. On September 30, 1999, the
Court denied Pall's motion to dismiss the action. On October 20, 1999, Pall
submitted a counterclaim alleging that the Company's r\LS System infringes its
patents that are the subject of the lawsuit and that the Company and Gambro BCT
tortiously interfered and unfairly competed with Pall's business. The Company
and Gambro BCT replied to Pall's counterclaim and denied Pall's allegations of
tortious interference, unfair competition and patent infringement.

     On July 13, 2000, Pall filed a Complaint in the United States District
Court for the District of Colorado against the Company, Gambro BCT, Inc. and
Gambro AB alleging that the Company's r\LS system infringes Pall's U.S. Patent
No. 6,086,770 (the "'770 Patent"). On August 11, 2000, this action was
consolidated with the earlier declaratory relief action in the United States
District Court for the District of Colorado. The Company, Gambro BCT, Inc. and
Gambro AB answered the complaint, denied the allegations of infringement and
submitted a counterclaim alleging that Pall's '770 patent is invalid, not
infringed and unenforceable. In September 2000, Pall answered the counterclaim
and denied the allegations of noninfringement, invalidity and unenforceability.

     On December 15, 2000, Pall filed a complaint against Filtertek, Inc.
("Filtertek") alleging that Filtertek, a subcontract manufacturer to the Company
for the r\LS filter, infringes the seven above-mentioned Pall patents. Filtertek
answered the complaint on January 31, 2001, denied Pall's allegations of
infringement and asserted that the claims of the Pall patents are invalid and/or
unenforceable and that Pall is estopped from asserting infringement against
Filtertek by reason of Pall's prior conduct with Filtertek. This action has been
consolidated with the other actions pending in Colorado. Discovery is now
ongoing.

     The Company, with Filtertek's support, has moved for summary judgment that
the accused r\LS system does not infringe, either literally or under the
doctrine of equivalents, any of the asserted claims of Pall's '572, '012, '561,
or '796 patents. The Court has not ruled on Pall's motion, and Pall did not
respond to the Company's summary judgment motion. On October 9, 2001, Pall moved
to dismiss the Colorado case based upon lack of subject matter jurisdiction. In
its motion, Pall provided the Company with a limited covenant not to sue the
Company for sales of certain prior r\LS systems on certain claims of the
patents-in-suit. Based upon this covenant not to sue, the Company and Pall
jointly moved the Colorado court to dismiss Pall's claims of infringement of the
'321, '561, '795, '012 and '572 patents, with prejudice, and to dismiss the
Company's declaratory judgment claims for lack of subject matter jurisdiction.
The court has granted this motion. Thus, Pall's infringement contentions are now
limited to certain claims of the '436 and '770 patents and the Company's summary
judgement motion is now moot. On December 3, 2001, Whatman HemaSure Inc. was
joined as a Plaintiff and Counterclaim Defendant in the consolidated case.

     On December 22, 2000, Gambro AB and Gambro BCT moved to dismiss the
consolidated actions based on a settlement agreement with Pall Corporation. On
January 10, 2001, the Court dismissed the action with respect to all claims
between Pall, Gambro BCT, and Gambro AB.

     On April 23, 1999, Pall filed a complaint against the Company and Gambro
BCT in the Eastern District of New York alleging that the Company's r\LS System
infringes Pall's '572 Patent and that the Company and Gambro BCT tortiously
interfered and unfairly competed with Pall's business. On May 19, 1999, Pall
amended its complaint and added Gambro, Gambro A.B. and Sepracor as defendants.
The Company and Gambro BCT have moved to dismiss, transfer or stay the action
and Pall has opposed the motion. On April 18, 2000, Pall moved, without
opposition from the defendants, to dismiss the action and the Court granted
Pall's motion.
                                        18
<PAGE>

     A prior lawsuit brought by Pall in February 1996 has concluded. In June
1999, the United States Court of Appeals for the Federal Circuit determined that
the LeukoNet System did not infringe claim 39 of the '321 Patent and Pall has
not appealed that decision.

     The Company believes, based upon its review of these matters, that a
properly informed court should conclude that the manufacture, use and/or sale by
the Company or its customers of the LeukoNet System and the r\LS System do not
infringe any valid enforceable claim of the Pall patents. However, there can be
no assurance that the Company will prevail in the pending litigations, and an
adverse outcome in the Pall Litigation would have a material and adverse effect
on the Company's financial condition and its ability to collect royalties from
Whatman under the terms of the Royalty Agreement.

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

     The Company did not submit any matter to the vote of its security holders
during the fourth quarter of 2001.

ITEM 4A.  EXECUTIVE OFFICERS OF THE COMPANY

     The following is a list of the executive officers of the Company and their
principal positions with the Company. Each individual officer has served in his
respective position with the Company since March 15, 2002, the effective date of
the merger with Point Massachusetts. Except for Donald R. Kiepert, Jr., Richard
N. Small and Lawrence L. Nussbaum, M.D., who are employed pursuant to employment
agreements, each individual officer serves at the pleasure of the Board of
Directors.

<Table>
<Caption>
NAME                                    AGE                  POSITION
----                                    ---                  --------
<S>                                     <C>   <C>
Donald R. Kiepert, Jr. ...............  54    Chairman, President, Chief Executive
                                              Officer, and Director
Richard N. Small......................  47    Senior Vice President, Chief Financial
                                              Officer and Treasurer
Lawrence L. Nussbaum, M.D. ...........  51    Chief Medical Officer

Barry Jones, Ph.D. ...................  52    Vice President, Research
</Table>

     Mr. Kiepert has served as President, Chief Executive Officer and as a
director of Point Massachusetts since 1996. Prior to that, he was President and
Chief Executive Officer of Chartwell Home Therapies, a home infusion services
company, from 1989 to 1996. Mr. Kiepert also started and managed several
healthcare-based companies and worked in various management positions at Baxter
Travenol, Inc. Mr. Kiepert presently serves as chairman and as a director of two
private companies. Mr. Kiepert received his M.S. degree in clinical pharmacy
from Purdue University.

     Mr. Small has served as Senior Vice President, Chief Financial Officer and
Treasurer of Point Massachusetts since 1996. Prior to that, he was Vice
President, Chief Financial Officer at Immulogic Pharmaceutical Corporation from
1992 to 1996. Mr. Small has also worked in various management positions at
Dennison Manufacturing Company and the public accounting firm of Coopers and
Lybrand LLP. Mr. Small presently holds part-time management positions for two
private companies.

     Dr. Nussbaum joined Point Massachusetts in October 2001 as its Chief
Medical Officer. Prior to joining Point Massachusetts, he served as Medical
Director at Covance, a clinical research organization, from July 1997 until
November 1998 and as Senior Medical Director. Prior to July 1997, he served as
Director of Medical Affairs at Otsuka America Pharmaceuticals, Inc., and as
Associate Director of Cardiovascular Drug Development at G.D. Searle Company.

     Dr. Jones has served as Vice President of Research of Point Massachusetts
since January 2000 and Director of Immunology of Point Massachusetts since 1997.
Prior to joining Point Massachusetts, he was Director of Immunology at Procept,
Inc., from 1993 through July 1997. He has also held academic research positions
at Yale University's School of Medicine and at Pennsylvania State University.

                                        19
<PAGE>

                                    PART II

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

     1.  MARKET INFORMATION.

     As of March 18, 2002, the Common Stock of the Company has been included for
quotation on the OTC Bulletin Board under the symbol "POTP". From January 14,
1998 until March 17, 2002, the Common Stock of the Company had been included for
quotation on the OTC Bulletin Board under the symbol HMSR. The following table
sets forth for the periods indicated the range of high and low bid information
per share of the Common Stock as included for quotation on the OTC Bulletin
Board (giving retroactive effect to the 1-for-10 reverse split that occurred on
March 15, 2002).

<Table>
<Caption>
                                                               HIGH       LOW
                                                              -------   -------
<S>                                                           <C>       <C>
2001
  First Quarter.............................................  $ 12.81   $  2.40
  Second Quarter............................................  $  5.20   $  2.00
  Third Quarter.............................................  $  4.60   $  3.50
  Fourth Quarter............................................  $  5.80   $  3.50

2000
  First Quarter.............................................  $195.00   $ 53.75
  Second Quarter............................................  $105.00   $ 22.19
  Third Quarter.............................................  $ 57.50   $ 12.50
  Fourth Quarter............................................  $ 27.81   $  2.09
</Table>

     2.  HOLDERS.

     On March 18, 2002, the Company's Common Stock was held by approximately 200
stockholders of record. On March 18, 2002, the last reported sale price of the
Company's Common Stock on the OTC bulletin board was $4.83 per share.

     3.  DIVIDEND INFORMATION.

     The Company has never paid dividends on its Common Stock. The Company does
not expect to pay cash dividends in the foreseeable future.

     4.  SALES OF SECURITIES.

     Not applicable.

                                        20
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

     The Company's selected financial data below has been reclassified for all
periods presented, after reclassifying the operations of the Company between
continuing operations (primarily general and administration expenses) and
discontinued operations (primarily the Company's filtration business) and giving
effect to the 1-for 10 reverse split that occurred on March 15, 2002.

                          STATEMENT OF OPERATIONS DATA

<Table>
<Caption>
                                     2001       2000       1999       1998      1997
                                    -------   --------   --------   --------   -------
                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                 <C>       <C>        <C>        <C>        <C>
Year Ended December 31,
Revenues:
  Revenues from continuing
     operations...................  $    --   $     --   $     --   $     --   $    --
                                    -------   --------   --------   --------   -------
Costs and expenses:
  General and administrative......    1,863        805        657        690       663
                                    -------   --------   --------   --------   -------
Loss from operations..............   (1,863)      (805)      (657)      (690)     (663)
Other income (expense)............      346       (121)    (1,292)      (203)     (824)
                                    -------   --------   --------   --------   -------
Net loss from continuing
  operations......................   (1,517)      (926)    (1,949)      (893)   (1,487)
                                    -------   --------   --------   --------   -------
Discontinued operations:
  Loss from discontinued
     operations...................   (6,119)   (15,297)    (8,716)   (11,277)   (8,397)
  Gain on disposal of discontinued
     operations...................   11,963         --         --         --        --
                                    -------   --------   --------   --------   -------
     Net income (loss)............  $ 4,327   $(16,223)  $(10,665)  $(12,170)  $(9,884)
                                    -------   --------   --------   --------   -------
Net income (loss) per common
  share -- basic and diluted:
  From continuing operations......  $ (0.80)  $  (0.49)  $  (1.42)  $  (0.99)  $ (1.83)
  From discontinued operations....     3.07      (8.03)     (6.33)    (12.49)   (10.33)
                                    -------   --------   --------   --------   -------
     Net income (loss)............  $  2.27   $  (8.52)  $  (7.75)  $ (13.48)  $(12.16)
                                    -------   --------   --------   --------   -------
Weighted average number of shares
  of common stock outstanding
  basic and diluted:..............    1,907      1,905      1,377        903       813
                                    -------   --------   --------   --------   -------
</Table>

                               BALANCE SHEET DATA

<Table>
<Caption>
                                                      (IN THOUSANDS)
<S>                                 <C>       <C>        <C>        <C>        <C>
Cash and marketable securities....  $15,108   $  8,678   $  5,243   $  1,827   $ 8,156
Working capital (deficit).........   14,643      7,716       (148)        37     6,071
Total assets......................   15,766     12,118      7,445      5,655    10,607
Capital lease obligations long
  term............................       --         --         --         68       289
Notes payable long-term...........       --         --         --      5,073        72
Convertible subordinated note
  payable long term...............       --         --         --         --     8,687
Stockholders' equity (deficit)....   15,151     11,115      1,227     (2,832)   (1,467)
</Table>

     Dividends -- none

                                        21
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

     Management's Discussion and Analysis of Financial Condition and Results of
Operations that follows contains forward-looking statements based on current
management expectations. Meaningful factors that could cause future results to
differ materially from such expectations include, without limitation, the
following: (i) results from the Company's ongoing clinical trials, (ii)
scientific data collected on the Company's technologies currently in preclinical
research and development, (iii) decisions made by the FDA or other regulatory
bodies with respect to the initiation of human clinical trials, (iv) decisions
made by the FDA or other regulatory bodies with respect to approval and to the
commercial sale of any of the Company's proposed products, (v) the commercial
acceptance of any products approved for sale and the ability of the Company to
manufacture, distribute and sell for a profit any products approved for sale,
(vi) the Company's ability to obtain the necessary patents and proprietary
rights to effectively protect its proposed products and technologies, and (vii)
the outcome of any collaborations or alliances to be entered into by the Company
in the future with pharmaceutical or other biotechnology companies.

RESULTS OF OPERATIONS

  OVERVIEW

     The Company is currently developing small molecule drugs for the treatment
of certain hematopoietic disorders and for the treatment of cancer. We expect to
incur significant additional operating losses over the next several years due to
our ongoing development and clinical efforts. Our potential for future
profitability is dependent on our ability to effectively develop our current
pharmaceutical compound, PT-100, and to license and develop new compounds.

     Before March 15, 2002, when the Company consummated the merger with Point
Massachusetts, the Company had previously engaged in the development and supply
of blood filtration technologies. In 2001, the Company terminated the operations
of its blood filtration business and, on May 29, 2001, sold substantially all of
its non-cash assets to Whatman BioScience Inc. The following section describes
certain transactions and events related to the Company's termination and sale of
its former blood filtration technology business.

  RECENT DEVELOPMENTS RELATED TO FORMER BUSINESS OF THE COMPANY

     In April 2000, the Company was notified that the American Red Cross (the
"ARC"), the Company's largest customer, was suspending use of the Company's r\LS
System pending the outcome of an investigation of a small number of non-critical
adverse reactions in patients who had received a transfusion of blood filtered
with the r\LS. In September 2000, the Company was notified that the ARC
terminated its supply contract for the r\LS System based on the extended period
of time taken to prove product improvements resolved these reactions. In August
2001, the Company and the ARC signed a termination and release agreement in
connection with the supply contract between the two parties. The agreement
provided for the Company to pay the ARC $600,000 and the release of any and all
claims that either party may have against the other, with certain exceptions.

     In March 2001, the Company signed a termination and release agreement with
Gambro BCT ("Gambro"), effective November 2000, which ended the distribution and
development agreement. In consideration for the Company's inventory (net book
value at December 31, 2000 of $332,000) of products bearing Gambro's company
name, and by way of complete resolution of all issues now outstanding between
the Company and Gambro, Gambro agreed to return 101,169 shares of common stock
with a fair market value at closing of $332,000.

     On May 29, 2001, the Company sold substantially all of the Company's
non-cash assets to Whatman Bioscience Inc., a Massachusetts corporation
("Whatman"), a wholly owned subsidiary of Whatman plc, an English corporation
("Whatman plc") pursuant to the terms of an Asset Purchase Agreement executed by
and among the Company, Whatman and Whatman plc, on February 3, 2001 and amended
on April 2, 2001 (the "Purchase Agreement"). See Item 1 -- "Former Business of
the Company."

     Under the terms of the Purchase Agreement, Whatman acquired substantially
all of the non-cash assets of the Company for consideration consisting of (i) a
$10 million dollar cash payment, which was paid to the Company on May 29, 2001,
(ii) a reimbursement amount which was finalized in the third quarter at

                                        22
<PAGE>

$6,944,000, effectively covering the net change in cash from the ongoing
operations of the Company's business from November 1, 2000 through May 29, 2001
(the "Reimbursement Amount"), which was paid to the Company during the third
quarter of 2001, and (iii) potential royalty payments in the amount of 4% on
sales by Whatman or its affiliates of filtration products using the Company's
technology. The royalty payments are subject to a maximum, aggregate amount of
$12 million and are subject to certain reductions set forth in that certain
Royalty Agreement, dated as of May 29, 2001, by and among the Company, Whatman
and Whatman plc, including any damages and certain settlement amounts paid by
Whatman related to the Company's patent litigation with Pall Corporation.

     In connection with the sale of its non-cash assets, the Company recorded a
gain of approximately $11,963,000, which includes the $6,944,000 reimbursement
amount and is net of the payment of approximately $1,394,000 in costs and
expenses associated with completing the asset sale incurred in the second
quarter of 2001. An additional $1,106,000 of costs and expenses associated with
completing the asset sale were incurred in the first quarter of 2001, with such
costs and expenses included in discontinued operations. The Company does not
believe it has a tax liability in connection with the sale, as it believes it
has sufficient current year deductions, federal and state net operating loss
carryforwards and tax credits to offset any gains realized. The net book value
of assets sold was $3,587,000. No value was ascribed to the potential future
royalties in recording the gain on this transaction.

     On June 6, 2001 the Company announced that the stockholders of the Company
had voted in favor of the sale of the non-cash assets to Whatman and that
HemaSure Inc. had changed its name to HMSR Inc. The name change was approved at
the Special Stockholders Meeting on May 21, 2001.

  RESULTS OF CONTINUING OPERATIONS

     Due to the sale of substantially all of the Company's non-cash assets to
Whatman, during the second half of 2001, the Company had no continuing
operations other than administrative matters, which include costs and expenses
to maintain the legal existence of the company and to investigate various
strategic business combinations and other transactions. These costs and expenses
include such items as consulting expenses, general legal costs, corporate audit
and tax fees and general employee costs to assist in the orderly transition of
the Company's business in connection with the transactions contemplated by a
merger.

     Operating expenses were $1,863,000 in 2001, $805,000 in 2000 and $657,000
in 1999. The increases in 2001 from 2000 and in 2000 from 1999 are primarily due
to higher professional fees incurred in connection with efforts to identify
potential strategic business combinations.

     Interest income in 2001, 2000 and 1999 primarily represents interest earned
on available cash and marketable securities balances during those periods.

     There were no interest expenses incurred in 2001. Interest expense
decreased in 2000 compared to 1999 due primarily to the completion of the
amortization of deferred financing charges in September 2000 and the repayment
of the revolving line of credit in September 2000.

  RESULTS OF DISCONTINUED OPERATIONS

     The Company reported a loss from discontinued operations of $6,119,000 in
2001, $15,297,000 in 2000 and $8,716,000 in 1999. The reduction in the loss from
discontinued operations in 2001 compared to 2000 is primarily due to lower
research and development costs in connection with the Company's only commercial
product, the r\LS System. In 2000, the Company incurred a significant amount of
expenses in connection with the formulation and design of process alternatives
to support the then expected increases in demand for the Company's r\LS System.
Such costs were not incurred in 2001. The reductions in research and development
costs were offset by higher legal costs related to patents due to the
termination of the distribution and development agreement with Gambro BCT, which
agreement called for the collaboration by Gambro in the funding of such costs.

     The Company recorded a gain from the sale of discontinued operations in
2001 in connection with the sale of its non-cash assets of $11,963,000. The gain
includes a $6,944,000 reimbursement amount and is net of the payment of
approximately $1,394,000 in costs and expenses associated with completing the
asset sale incurred in the second quarter of 2001. An additional $1,106,000 of
costs and expenses associated with

                                        23
<PAGE>

completing the asset sale were incurred in the first quarter of 2001, with such
costs and expenses included in discontinued operations. No value was ascribed to
the potential future royalties in recording the gain on this transaction.

     Net cash used in discontinued operations includes the following:

     In August 2001, the Company and the ARC signed a termination and release
agreement in connection with the supply contract between the two parties. The
agreement provided for the Company to pay the ARC $600,000 and the release of
any and all claims that either party may have against the other, with certain
exceptions.

     In connection with the sale of its non-cash assets on May 29, 2001, the
Company incurred costs and expenses of $2,500,000, of which $1,394,000 have been
netted against the gain on the sale and an additional $1,106,000 incurred in the
first quarter of 2001 are included within the Company's loss from discontinued
operations. In December 2000, the Company agreed to pay Command Medical Products
Inc. $600,000 in connection with the termination of its supply and assembly
agreement and release.

     In November 2000, the Company was notified that Gambro intended to
terminate its distribution and development contract with the Company and in
March 2001, signed a termination and release agreement with Gambro, effective
November 2000, which ended the distribution and development agreement. In
consideration for the Company's inventory (net book value at December 31, 2000
of $332,000) of products bearing Gambro's company name, and by way of complete
resolution of all issues now outstanding between the Company and Gambro, Gambro
agreed to return 101,169 shares of common stock with a fair market value at
closing of $332,000.

     In September 2000, the Company agreed to pay Filtertek Inc. $525,000 in
connection with an amendment to its manufacturing supply agreement and in
December 2000 the Company agreed to pay Filtertek Inc. an additional $180,000 in
connection with a second amendment to its manufacturing supply agreement. Upon
the completion of the sale of its non-cash assets in May 2001, the manufacturing
and supply agreement with Filtertek was terminated in its entirety.

     In March 2000, the Company completed a private placement financing yielding
gross proceeds of $27,975,000 in which institutional and corporate investors
purchased 373,000 shares of its common stock at a purchase price of $75 per
share. The Company has registered 255,132 of such shares for resale. The Company
has used the majority of the net proceeds of such financing, which aggregated
$25,791,000, for working capital, capital equipment and general corporate
purposes.

     In January 1997, the Company entered into a Restructuring Agreement with
respect to the indebtedness incurred by the Company in connection with its
acquisition of the plasma pharmaceutical business unit of Novo Nordisk. Pursuant
to the Restructuring Agreement, approximately $23,000,000 of indebtedness owed
to Novo Nordisk was restructured by way of issuance by the Company to Novo
Nordisk of a 12% convertible subordinated promissory note for a net amount,
after certain reductions and the forgiveness of a $3,000,000 amount, of
$8,687,000. On January 6, 1998, the Company converted the note, pursuant to its
terms, into shares of Common Stock at a conversion price of $105 per share, or
82,737 shares. The holder of the note initially contested the conversion of the
note, however, in March 2001, the holder surrendered the note consistent with
the terms of the Restructuring Agreement.

  NEW ACCOUNTING STANDARDS

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets.
SFAS No. 141 requires that all business combinations be accounted for under the
purchase method only and that certain acquired intangible assets in a business
combination be recognized as assets apart from goodwill. SFAS No. 142 requires
that rateable amortization of goodwill be replaced with periodic tests of the
goodwill's impairment and that certain intangible assets other than goodwill be
amortized over their useful lives. SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001. The provisions of SFAS No. 142 will
be effective for fiscal years beginning after December 15, 2001. The merger on
March 15, 2002 with Point Massachusetts will be accounted for as prescribed by
SFAS No. 141 and SFAS No. 142.

                                        24
<PAGE>

In August 2001, the FASB issued Statement No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"), which provides the accounting requirements
for retirement obligations associated with tangible long-lived assets. This
Statement requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. This Statement is
effective for the Company's 2003 fiscal year, and early adoption is permitted.

     In October 2001, the FASB issued Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which excludes from
the definition of long-lived assets goodwill and other intangibles that are not
amortized in accordance with SFAS 142. SFAS 144 requires that long-lived assets
to be disposed of by sale be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations. SFAS 144 also expands the reporting of discontinued
operations to include components of an entity that have been or will be disposed
of rather than limiting such discontinuance to a segment of a business. This
Statement is effective for the Company's 2002 fiscal year, and early adoption is
permitted. The Company expects SFAS 144 will not have a material effect on its
consolidated results of operations, financial position or cash flows.

LIQUIDITY AND CAPITAL RESOURCES

     The net increase in cash and cash equivalents in 2001 was $11,893,000. This
increase is attributable primarily to net cash proceeds received from the
Company's sale of its discontinued operations to Whatman on May 29, 2001 of
$14,444,000, net cash provided by investing activities of $5,010,000, offset by
net cash used in continued operations of $2,020,000 and net cash used in
discontinued operations of $5,541,000.

     Net cash used in operating activities is primarily attributable to the net
loss from continuing operations of $1,517,000, an increase in prepaid expenses
and other assets of $109,000 and a reduction of accrued expenses of $714,000,
offset in part by an increase in accounts payable of $326,000. Net cash provided
by investing activities resulted from the net maturities of available-for-sale
marketable securities, offset in part by the lock-up fee paid to Point
Therapeutics, Inc. (now renamed Point Therapeutics Massachusetts, Inc., "Point
Massachusetts") of $500,000.

     At December 31, 2001, the Company had $15,108,000 in cash and cash
equivalents. Based upon the Company's existing capital resources, together with
the capital of Point Massachusetts acquired in connection with the merger, the
Company anticipates that it will be able to maintain currently planned
operations at least through 2003.

     Prior to the merger with the Company, almost all of Point Massachusetts'
research and development efforts have been focused on the pre-clinical and
clinical development of PT-100 for hematopoietic disorders and for the treatment
of cancer. PT-100 is currently in early-stage clinical trials for its first
indication, to treat neutropenia. The Company cannot predict whether the results
of further testing will be successful or will result in FDA approval. Thus, due
to the uncertainties inherent in clinical testing and the regulatory process,
the Company is not able to estimate at this time when PT-100 may be commercially
available for any application, if at all, nor the costs associated with
completing the clinical trial process.

     The Company's expectations regarding its rate of spending and the
sufficiency of its cash resources over future periods are forward-looking
statements. The Company's funding requirements are expected to increase over the
next several years as the Company continues with the clinical development of
PT-100 and initiates human clinical trials for additional clinical indications
for PT-100 and additional product candidates. The rate of spending and
sufficiency of such resources will be affected by numerous factors, including
the success of the Company's clinical trials and the rate of acquisition of new
products and technologies. Success in early-stage clinical trials or acquisition
of new products and technologies would lead to an increase in working capital
requirements. The Company's actual cash requirements may vary materially from
those now planned because of the results of research and development, clinical
trials, product testing, relationships with strategic partners, acquisition of
new products and technologies, changes in the focus and direction of the
Company's research and development programs, competitive and technological
advances, the process of obtaining FDA or other regulatory approvals and other
factors.

                                        25
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial statements and supplementary data required by Item 8 are set
forth at the pages indicated in Item 14(a) below.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     Not applicable.

                                        26
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this Item 10, with respect to executive
officers, is hereby incorporated by reference to the text appearing under Part
1, Item 4A under the caption "Executive Officers of the Registrant" in this
Report, and, with respect to directors, by reference to the information included
under the headings "Information Regarding Directors", "Executive Officers", and
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's
definitive Proxy Statement for the 2002 Annual Meeting of Stockholders to be
filed by the Company with the Securities and Exchange Commission within 120 days
after the close of the Company's fiscal year.

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this Item 11 is hereby incorporated by
reference to the information under the heading "Executive Compensation" and
"Report of Compensation Committee on Executive Compensation" in the Company's
definitive Proxy Statement for the 2002 Annual Meeting of Stockholders to be
filed with the Securities and Exchange Commission within 120 days after the
close of the Company's fiscal year.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this Item 12 is hereby incorporated by
reference to the information under the heading "Security Ownership of Principal
Stockholders and Management" in the Company's definitive Proxy Statement for the
2002 Annual Meeting of Stockholders to be filed with the Securities and Exchange
Commission within 120 days after the close of the Company's fiscal year.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this Item 13 is hereby incorporated by
reference to the information under the heading "Certain Relationships and
Related Transactions" in the Company's definitive Proxy Statement for the 2002
Annual Meeting of Stockholders to be filed with the Securities and Exchange
Commission within 120 days after the close of the Company's fiscal year.

                                        27
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

<Table>
<S>        <C>
           Financial Statements
    a(1)   Point Therapeutics, Inc. (formerly HMSR Inc.) Consolidated
           Financial Statements as of December 31, 2001 and for each of
           the three years in the period ended December 31, 2001. See
           pages F-1 through F-7, which are included herein.
           Financial Statement Schedules
    a(2)   All schedules are omitted because they are inapplicable, not
           required or the information is included in the consolidated
           financial statements or the notes thereto.
           Exhibits
    a(3)
           The exhibits listed in the Exhibit Index immediately
           preceding the exhibits are filed as part of this Annual
           Report on Form 10-K.
     (b)   The Registrant filed the following Reports on Form 8-K
           during the fourth quarter of 2001 and through March 29,
           2002:
</Table>

<Table>
<Caption>
DATE OF REPORT                    REPORTED
--------------                    --------
<S>                               <C>
March 28, 2002                    1, 2, 7
</Table>

     The following trademarks are mentioned in this Annual Report on Form 10-K:
HemaSure, r\LS, LeukoNet and Point Therapeutics.

                                        28
<PAGE>

                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

                         INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Accountants...........................  F-2
Consolidated Balance Sheets at December 31, 2001 and 2000...  F-3
Consolidated Statements of Operations for the Years Ended
  December 31, 2001, 2000 and 1999..........................  F-4
Consolidated Statements of Stockholders' Equity (Deficit)
  for the Years Ended December 31, 2001, 2000 and 1999......  F-5
Consolidated Statements of Cash Flows for the Years Ended
  December 31, 2001, 2000 and 1999..........................  F-6
Notes to Consolidated Financial Statements..................  F-7
</Table>

                                       F-1
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Point Therapeutics, Inc. (formerly HMSR Inc.):

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of stockholders' equity (deficit)
and of cash flows present fairly, in all material respects, the financial
position of Point Therapeutics, Inc. (formerly HMSR Inc.) and its subsidiaries
at December 31, 2001 and 2000, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States of
America. 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 of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

                                          /s/ PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts
March 15, 2002

                                       F-2
<PAGE>

                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)
                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                     DECEMBER 31,
                                                              --------------------------
                                                                 2001           2000
                                                              ----------     -----------
                                                              (IN THOUSANDS, EXCEPT PAR
                                                                    VALUE AMOUNTS)
<S>                                                           <C>            <C>
                                         ASSETS
Current assets:
  Cash and cash equivalents.................................   $ 15,108       $   3,215
  Marketable securities.....................................         --           5,463
  Prepaid expenses and other current assets.................        150              41
                                                               --------       ---------
  Total current assets......................................     15,258           8,719
Deposit with Point Massachusetts (Note L)...................        500              --
Other assets................................................          8               8
Net assets of discontinued operations (Note C)..............         --           3,391
                                                               --------       ---------
          Total assets......................................   $ 15,766       $  12,118
                                                               ========       =========

                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................   $    386       $      60
  Accrued expenses..........................................        229             943
                                                               --------       ---------
  Total current liabilities.................................        615           1,003
                                                               --------       ---------
Commitments and contingencies (Note D)
Stockholders' equity:
  Preferred stock, $0.01 par value, 1,000 shares authorized,
     no shares issued or outstanding.
  Common stock, $0.01 par value, 35,000 shares authorized,
     1,990 shares issued; 1,889 and 1,990 shares outstanding
     at December 31, 2001 and 2000, respectively............         20              20
  Additional paid-in capital................................    112,531         112,490
  Accumulated deficit.......................................    (97,068)       (101,395)
  Treasury stock, 101 and 0 shares, at cost, at December 31,
     2001 and 2000, respectively............................       (332)             --
                                                               --------       ---------
  Total stockholders' equity................................     15,151          11,115
                                                               --------       ---------
          Total liabilities and stockholders' equity........   $ 15,766       $  12,118
                                                               ========       =========
</Table>

    The accompanying notes are an integral part of the financial statements.
                                       F-3
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              -----------------------------
                                                               2001       2000       1999
                                                              -------   --------   --------
                                                                     (IN THOUSANDS,
                                                                EXCEPT PER SHARE AMOUNTS)
<S>                                                           <C>       <C>        <C>
Operating expenses:
  General and administrative................................  $ 1,863   $    805   $    657
                                                              -------   --------   --------
Loss from continuing operations.............................   (1,863)      (805)      (657)
Other income (expense):
  Interest income...........................................      346        935        201
  Interest expense..........................................       --     (1,056)    (1,493)
                                                              -------   --------   --------
Net loss from continuing operations.........................   (1,517)      (926)    (1,949)
Discontinued operations:
  Loss from discontinued operations.........................   (6,119)   (15,297)    (8,716)
  Gain from the sale of discontinued operations.............   11,963         --         --
                                                              -------   --------   --------
Net income (loss)...........................................  $ 4,327   $(16,223)  $(10,665)
                                                              =======   ========   ========
Basic and diluted income (loss) per share:
Continuing operations.......................................  $ (0.80)  $  (0.49)  $  (1.42)
Discontinued operations.....................................  $  3.07   $  (8.03)  $  (6.33)
                                                              -------   --------   --------
Net income (loss)...........................................  $  2.27   $  (8.52)  $  (7.75)
                                                              =======   ========   ========
Weighted average number of shares of common stock
  outstanding -- basic and diluted..........................    1,907      1,905      1,377
</Table>

    The accompanying notes are an integral part of the financial statements.
                                       F-4
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<Table>
<Caption>
                                                       FOR THE THREE YEARS ENDED DECEMBER 31, 2001
                                       ----------------------------------------------------------------------------
                                                                                                          TOTAL
                                        COMMON STOCK     ADDITIONAL                 TREASURY STOCK    STOCKHOLDERS'
                                       ---------------    PAID-IN     ACCUMULATED   ---------------      EQUITY
                                       SHARES   AMOUNT    CAPITAL       DEFICIT     SHARES   AMOUNT     (DEFICIT)
                                       ------   ------   ----------   -----------   ------   ------   -------------
                                                                      (IN THOUSANDS)
<S>                                    <C>      <C>      <C>          <C>           <C>      <C>      <C>
Balance at December 31, 1998.........    909     $ 9      $ 71,666     $ (74,507)     --     $  --      $ (2,832)
Issuance of common stock to employees
  under stock plans..................     40       1           816            --      --        --           817
Issuance of common stock in private
  placements, net of issuance costs
  of $93.............................    633       6        13,901            --      --        --        13,907
Net loss.............................                                    (10,665)     --        --       (10,665)
                                       -----     ---      --------     ---------     ---     -----      --------
Balance at December 31, 1999.........  1,582      16        86,383       (85,172)     --        --         1,227
Issuance of common stock to employees
  under stock plans..................     35      --           320            --      --        --           320
Issuance of common stock in private
  placements, net of issuance costs
  of $2,184..........................    373       4        25,787            --      --        --        25,791
Net loss.............................     --      --            --       (16,223)     --        --       (16,223)
                                       -----     ---      --------     ---------     ---     -----      --------
Balance at December 31, 2000.........  1,990      20       112,490      (101,395)     --        --        11,115
Treasury stock transaction (Note
  F).................................     --      --            --            --     101      (332)         (332)
Issuance of stock options to non-
  employees (Note G).................     --      --            41            --      --        --            41
Net income...........................     --      --            --         4,327      --        --         4,327
                                       -----     ---      --------     ---------     ---     -----      --------
Balance at December 31, 2001.........  1,990     $20      $112,531     $ (97,068)    101     $(332)     $ 15,151
                                       =====     ===      ========     =========     ===     =====      ========
</Table>

    The accompanying notes are an integral part of the financial statements
                                       F-5
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31,
                                                              ----------------------------
                                                               2001       2000      1999
                                                              -------   --------   -------
                                                                     (IN THOUSANDS)
<S>                                                           <C>       <C>        <C>
Cash flows from operating activities:
  Net loss from continuing operations.......................  $(1,517)  $   (926)  $(1,949)
  Adjustments to reconcile net loss from continuing
     operations to net cash used in operating activities:
     Financing costs related to warrants....................       --        725     1,024
     Amortization of deferred compensation..................       41         --        --
     Accretion of marketable securities discount............      (47)       (61)       --
  Changes in operating assets and liabilities:
     Prepaid expenses and other current assets..............     (109)        61       116
     Accounts payable.......................................      326       (209)       33
     Accrued expenses.......................................     (714)        (5)       39
     Other assets...........................................       --         10        (6)
                                                              -------   --------   -------
  Net cash used in operating activities.....................   (2,020)      (405)     (743)
                                                              -------   --------   -------
  Cash flows from investing activities:
     Purchases of available for sale marketable
       securities...........................................   (1,013)   (31,402)       --
     Maturities of available for sale marketable
       securities...........................................    6,523     26,000        --
     Deposit with Point Massachusetts (Note L)..............     (500)        --        --
                                                              -------   --------   -------
  Net cash provided by (used in) investing activities.......    5,010     (5,402)       --
                                                              -------   --------   -------
  Cash flows from financing activities:
     Net proceeds from issuance of common stock.............       --     26,111    14,724
     Repayment of notes payable.............................       --     (5,000)       --
                                                              -------   --------   -------
  Net cash provided by financing activities.................       --     21,111    14,724
                                                              -------   --------   -------
  Net increase in cash and cash equivalents from continuing
     operations.............................................    2,990     15,304    13,981
  Net proceeds from the sale of discontinued operations (net
     of $2,500 in expenses).................................   14,444         --        --
  Net cash used in discontinued operations (Note C).........   (5,541)   (17,332)  (10,565)
                                                              -------   --------   -------
  Net increase (decrease) in cash and cash equivalents......   11,893     (2,028)    3,416
  Cash and cash equivalents at beginning of period..........    3,215      5,243     1,827
                                                              -------   --------   -------
  Cash and cash equivalents at end of period................  $15,108   $  3,215   $ 5,243
                                                              =======   ========   =======
  Supplemental schedule of cash flow information:
     Cash paid during the year for interest.................  $    --   $    372   $   453
  Non-cash activities:
     Receipt of treasury stock in settlement of all
       obligations with a customer (Note F).................  $   332   $     --   $    --
     Issuance of stock options to non-employees (Note G)....  $    41   $     --   $    --
</Table>

    The accompanying notes are an integral part of the financial statement.
                                       F-6
<PAGE>

                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.  NATURE OF THE BUSINESS

     Point Therapeutics, Inc. and its subsidiaries (formerly known as HMSR Inc.)
(the "Company") is developing small molecule drugs for the treatment of certain
hematopoietic disorders and for the treatment of cancer. PT-100, the Company's
lead product candidate, has the potential to treat a number of different
hematopoietic disorders, such as neutropenia (an abnormally low level of a type
of white blood cell called neutrophil) and anemia (an abnormally low level of
red blood cells).

     The Company was originally incorporated in December 1993 as a Delaware
corporation under the name Hemacor Inc. The Company changed its name to HemaSure
Inc. in February of 1994. From 1994 to May 2001, the Company developed and
supplied innovative blood filtration technologies. On May 29, 2001 the Company
sold substantially all of its assets and liabilities with the exception of cash,
marketable securities and certain corporate assets and liabilities, hereafter
referred to as "non-cash" assets, (see Note C), and changed its name to HMSR
Inc. Accordingly, from May 2001 until the merger with Point Massachusetts
(described below), the Company's continuing operations consisted of general and
administrative expenses to operate a shell company and to investigate various
strategic business combinations.

     On November 15, 2001, the Company and PT Acquisition Corp., a wholly-owned
subsidiary of the Company formed for the purpose of consummating a merger
transaction, entered into the Agreement and Plan of Merger (the "Merger
Agreement") with Point Therapeutics, Inc., a privately held Massachusetts
corporation ("Point Massachusetts").

     On March 15, 2002, the Company's stockholders approved a 1-for-10 reverse
split of the Company's common stock and a name change of the Company from HMSR
Inc. to Point Therapeutics, Inc. The stockholders of Point Massachusetts also
approved on March 15, 2002 the Merger Agreement previously entered into by both
parties. The Merger became effective on March 15, 2002, at which time, Point
Massachusetts became a wholly-owned subsidiary of the Company. Point
Massachusetts subsequently changed its name to "Point Therapeutics
Massachusetts, Inc."

     The Company's consolidated financial statements included herein, represent
the historical financial statements of the Company at December 31, 2001, which
have been reclassified for all periods to reflect the sale of the non-cash
assets of the red blood filtration business, its only segment, as discontinued
operations in accordance with Accounting Principles Board ("APB") Opinion No.
30. In addition all share, per share amounts, stock option, warrant and market
prices of the Company's common stock, in the financial statements and
accompanying notes have been retroactively adjusted to reflect the 1-for-10
reverse split of the Company's common stock.

  DISCONTINUED OPERATIONS

     From the Company's inception through the first quarter of 1996, the Company
sold non-blood related filter products. Subsequently, and through to the sale of
the Company's non-cash assets on May 29, 2001, the Company sold a medical device
designed for the removal of contaminating leukocytes from donated blood.

     In September 2000, the Company was notified that the American Red Cross
(the "ARC") had terminated its supply contract for the Company's next generation
r\LS System based on the extended period of time taken to prove product
improvements resolved a small number of non-critical adverse reactions in
patients who has received a transfusion of blood filtered with the r\LS. In
August 2001, the Company and the ARC signed a termination and release agreement
in connection with the supply contract between the two parties. The agreement
provided for the Company to pay the ARC $600,000 and the release of any and all
claims that either party may have against the other, with certain exceptions.

     In March 2001, the Company signed a termination and release agreement with
Gambro BCT, effective November 2000, which ended their exclusive distribution
rights of the r\LS. See Note F.

                                       F-7
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     On May 29, 2001, the Company sold substantially all of its non-cash assets
to Whatman BioScience Inc., a Massachusetts corporation ("Whatman") and a
subsidiary of Whatman plc, an English corporation ("Whatman plc"), pursuant to
the terms of an Asset Purchase Agreement by and among the Company, Whatman and
Whatman plc, dated as of February 3, 2001 and amended on April 2, 2001 (the
"Purchase Agreement"). See Note C.

     On November 15, 2001, the Company and its wholly owned subsidiary, PT
Acquisition Corp., entered into an Agreement and Plan of Merger (the "Merger
Agreement") with a privately held Massachusetts corporation ("Point
Massachusetts"). The merger was approved and became effective on March 15, 2002,
at which time, Point Massachusetts became a wholly-owned subsidiary of the
Company. Point Massachusetts subsequently changed its name to "Point
Therapeutics Massachusetts, Inc." See Note M.

B.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

  PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany transactions and balances
have been eliminated. Certain reclassifications have been made to the prior
years consolidated financial statements to conform to current presentation.
These reclassifications have no effect on the Company's financial position or
results of operations.

     On May 29, 2001 the Company sold certain assets to Whatman as described in
Notes A and C. Accordingly, the Company has reclassified the consolidated
financial statements included herein, for all periods to reflect the sale of the
non-cash assets of the red blood filtration business, its only segment, as
discontinued operations in accordance with Accounting Principles Board ("APB")
Opinion No. 30.

  USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
December 31, 2001 and 2000 and the reported amounts of revenues and expenses
during the three years ended December 31, 2001. Actual results could differ from
those estimates.

  CASH AND CASH EQUIVALENTS

     The Company considers all demand deposits, money market instruments and
repurchase agreements to be cash and cash equivalents as they all have
maturities of less than three months at date of acquisition. Cash equivalents of
$374,855 and $1,221,000 at December 31, 2001 and 2000, respectively, consist of
overnight repurchase agreements with a commercial bank. The carrying amount
approximates fair value because of the short maturity of those instruments.

  MARKETABLE SECURITIES

     Management determines the appropriate classification of its investments in
debt and equity securities at the time of purchase. At December 31, 2000, all
marketable securities were classified as available for sale and carried at fair
value, with the unrealized gains and losses, if any, reported as a separate
component of stockholders' equity. The Company held no marketable securities at
December 31, 2001.

                                       F-8
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The amortized cost of debt securities classified as available for sales is
adjusted for accretion of discounts to maturity. Such accretion is included in
interest income. Realized gains and losses are included in other income or
expense. The cost of securities sold is based on the specific identification
method.

     The fair value of available for sale marketable securities at December 31,
2000 was $5,463,000 and represented Commercial Paper and United State Government
Agency Obligations of $2,488,000 and $2,975,000, respectively.

  INVENTORIES OF DISCONTINUED OPERATIONS (SEE NOTE C)

     Inventories are stated at the lower of cost (first-in, first-out) or
market.

  PROPERTY AND EQUIPMENT OF DISCONTINUED OPERATIONS (SEE NOTE C)

     Property and equipment are stated at cost. Costs of major additions and
betterments are capitalized; maintenance and repairs, which do not improve or
extend the life of the respective assets, are charged to operations. On
disposal, the related cost and accumulated depreciation or amortization is
removed from the accounts and any resulting gain or loss is included in the
results of operations. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. All laboratory, manufacturing and
office equipment have estimated useful lives of three to 10 years.

  REVENUE RECOGNITION OF DISCONTINUED OPERATIONS (SEE NOTE C)

     Revenues from product sales are recognized as defined by Generally Accepted
Accounting Principles in accordance with SEC Staff Accounting Bulletin No. 101,
when persuasive evidence of the arrangement exist, delivery has occurred, the
price is fixed or determinable, and collectibility is reasonably assured.
Revenue from product sales is recognized either when the goods are shipped and
title and risk of loss have transferred to the customer, or in instances where
title and risk of loss does not transfer to the customer upon shipment, the
Company recognizes revenue upon delivery. The Company accrues for estimated
warranty costs and other allowances when revenue is recognized based on its
experience.

  RESEARCH AND DEVELOPMENT OF DISCONTINUED OPERATIONS (SEE NOTE C)

     Research and development costs are expensed in the year incurred.

  NET LOSS PER SHARE

     The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS 128"), which established standards for computing and
presenting earnings per share. Net income (loss) per common share is based on
the weighted average number of shares of common stock outstanding during each
period. Potential common stock has not been included because the effect would be
antidilutive. The potential common stock of the Company consists of common stock
warrants (see Note F) and stock options (see Note G). The Company had 411,250,
492,000, and 475,700 potential common stock shares as of December 31, 2001,
2000, and 1999, respectively.

  INCOME TAXES

     Deferred income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities reflect the estimated future tax
consequences attributable to tax benefit carryforwards and to "temporary
differences" between amounts of assets and liabilities for financial reporting
purposes and such amounts as measured by tax laws. A valuation reserve is
established if it is more likely than not that all or a portion of the deferred
tax asset will not be realized. Additionally, based upon the Internal Revenue
Code and
                                       F-9
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

changes in company ownership, utilization of the Company's net operating loss
may be subject to an annual limitation.

  COMPREHENSIVE INCOME

     For all periods presented, net income and comprehensive income are the same
due to the realization of all previously unrealized gains and losses in the
statement of operations.

  NEW ACCOUNTING STANDARDS

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets.
SFAS No. 141 requires that all business combinations be accounted for under the
purchase method only and that certain acquired intangible assets in a business
combination be recognized as assets apart from goodwill. SFAS No. 142 requires
that ratable amortization of goodwill be replaced with periodic tests of the
goodwill's impairment and that certain intangible assets other than goodwill be
amortized over their useful lives. SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001. The provisions of SFAS No. 142 will
be effective for fiscal years beginning after December 15, 2001. The merger on
March 15, 2002 with Point Massachusetts will be accounted for as prescribed by
SFAS No. 141 and SFAS No. 142.

     In August 2001, the FASB issued Statement No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"), which provides the accounting requirements
for retirement obligations associated with tangible long-lived assets. This
Statement requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. This Statement is
effective for the Company's 2003 fiscal year, and early adoption is permitted.
The adoption of SFAS 143 is not expected to have an impact on the Company's
consolidated results of operations, financial position or cash flows.

     In October 2001, the FASB issued Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which excludes from
the definition of long-lived assets goodwill and other intangibles that are not
amortized in accordance with SFAS 142. SFAS 144 requires that long-lived assets
to be disposed of by sale be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations. SFAS 144 also expands the reporting of discontinued
operations to include components of an entity that have been or will be disposed
of rather than limiting such discontinuance to a segment of a business. This
Statement is effective for the Company's 2002 fiscal year, and early adoption is
permitted. The Company expects SFAS 144 will not have a material effect on its
consolidated results of operations, financial position or cash flows.

C.  DISCONTINUED OPERATIONS:

     On May 29, 2001, the Company sold substantially all of its non-cash assets
to Whatman BioScience Inc., a Massachusetts corporation ("Whatman") and a
subsidiary of Whatman plc, an English corporation ("Whatman plc"), pursuant to
the terms of an Asset Purchase Agreement by and among the Company, Whatman and
Whatman plc, dated as of February 3, 2001 and amended on April 2, 2001 (the
"Purchase Agreement"). All non-cash assets and certain liabilities were
transferred to the purchaser on that date. Accordingly the only continuing
operations of the Company consist of general and administrative expenses to
operate a shell company and to investigate various strategic business
combinations. The Company has reclassified the consolidated financial statements
included herein, for all periods to reflect the sale of the non-cash assets
relating to the red blood filtration business, its only segment, as discontinued
operations in accordance with Accounting Principles Board ("APB") Opinion No.
30, and all prior periods have been restated, including the allocation of
expenses between continuing and discontinued operations.

                                       F-10
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Net revenues and net loss from discontinued operations for the three years
ended December 31, 2001 were as follows:

<Table>
<Caption>
                                                          2001       2000      1999
                                                         -------   --------   -------
                                                                (IN THOUSANDS)
<S>                                                      <C>       <C>        <C>
Revenues from discontinued operations..................  $    12   $  3,219   $   805
                                                         -------   --------   -------
Loss from discontinued operations......................  $(6,119)  $(15,297)  $(8,716)
                                                         -------   --------   -------
</Table>

     Assets and liabilities of discontinued operations at December 31, 2000 were
as follows:

<Table>
<Caption>
(IN THOUSANDS)
<S>                                                            <C>
Inventory...................................................   $2,285
Other current assets........................................      264
Property and equipment, net.................................    1,850
Other assets................................................       32
Current liabilities (including accrued expenses of
  $446,000).................................................   (1,031)
Long-term liabilities.......................................       (9)
                                                               ------
Net assets of discontinued operations.......................   $3,391
                                                               ======
</Table>

     Under the terms of the Purchase Agreement, Whatman acquired substantially
all of the non-cash assets of the Company for consideration consisting of (i) a
$10 million dollar cash payment, which was paid to the Company on May 29, 2001,
(ii) a reimbursement amount of $6,944,000, which was paid to the Company in the
third quarter of 2001, effectively covering the net change in cash from the
ongoing discontinued operations of the Company's business from November 1, 2000
through May 29, 2001 (the "Reimbursement Amount"), and (iii) a potential royalty
payment in the amount of 4% on sales by Whatman or its affiliates of filtration
products using the Company's technology. The royalty payments are subject to a
maximum, aggregate amount of $12 million dollars and are subject to certain
reductions set forth in the Royalty Agreement, dated as of May 29, 2001, by and
among the Company, Whatman and Whatman plc, including any damages and certain
settlement amounts paid by Whatman related to the Company's patent litigation
with Pall Corporation, as described below under Note K "Litigation."

     In connection with the sale of its non-cash assets on May 29, 2001, the
Company has recorded a gain on disposal of discontinued operations of
$11,963,000, which includes the $6,944,000 reimbursement amount and is net of
the payment of approximately $1,394,000 in costs and expenses incurred in the
second quarter of 2001 associated with completing the asset sale. An additional
$1,106,000 of costs and expenses associated with completing the asset sale were
incurred in the first quarter of 2001, with such costs and expenses included in
loss from discontinued operations. The Company does not believe it has a tax
liability in connection with the sale, as it believes it has sufficient current
year deductions, federal and state net operating loss carryforwards and tax
credits to offset any gain realized. No value was ascribed to the potential
future royalties in recording the gain on this transaction. The net book value
of the assets sold were $3,587,000. As part of the non-cash asset sale Whatman
assumed the Company's personnel associated with the discontinued operations. As
part of the sale, all outstanding unvested stock options of the Company vested
on May 29, 2001 and were terminated unless exercised 90 days thereafter, with
the exception of certain executive officers who were retained by the Company.

                                       F-11
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  INVENTORY OF DISCONTINUED OPERATIONS

     Inventory of discontinued operations consisted of the following at December
31, 2000:

<Table>
<Caption>
                                                               (IN THOUSANDS)
<S>                                                            <C>
Raw materials...............................................       $2,200
Work in progress............................................           78
Finished goods..............................................            7
                                                                   ------
                                                                   $2,285
                                                                   ======
</Table>

  ACCOUNTS RECEIVABLE OF DISCONTINUED OPERATIONS

     Included within other current assets were trade receivables of $121,000 at
December 31, 2000 from discontinued operations representing amounts due for
product sales. The allowance for doubtful accounts was $0 at December 31, 2000.

  PROPERTY AND EQUIPMENT OF DISCONTINUED OPERATIONS

     Property and equipment of discontinued operations consisted of the
following at December 31, 2000:

<Table>
<Caption>
                                                               (IN THOUSANDS)
<S>                                                            <C>
Laboratory and manufacturing equipment......................       $1,430
Office equipment............................................          704
Leasehold improvements......................................          858
                                                                   ------
                                                                    2,992
Accumulated depreciation and amortization...................       (1,759)
                                                                   ------
                                                                    1,233
Construction in progress....................................          617
                                                                   ------
                                                                   $1,850
                                                                   ======
</Table>

     Depreciation and amortization expense included in loss from discontinued
operations was $218,000, $636,000 and $475,000 in 2001, 2000 and 1999,
respectively. Included in the loss from discontinued operations in 2000 was
$425,000 related to the abandonment and therefore fixed asset write-down of two
production units to their net scrap value.

     Accumulated amortization of assets under lease of the discontinued
operations was $106,000 for the period ended December 31, 1999.

  ACCRUED EXPENSES OF DISCONTINUED OPERATIONS

     Accrued expenses of discontinued operations consisted of the following at
December 31, 2000:

<Table>
<Caption>
                                                               (IN THOUSANDS)
<S>                                                            <C>
Employee compensation.......................................        $ 91
Professional fees...........................................         343
Services....................................................          12
                                                                    ----
                                                                    $446
                                                                    ====
</Table>

                                       F-12
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  NOTES PAYABLE OF DISCONTINUED OPERATIONS

     Notes payable consisted of the following at December 31, 2000:

<Table>
<Caption>
                                                               (IN THOUSANDS)
<S>                                                            <C>
Leasehold improvements financing of discontinued
  operations................................................        $43
Less current portion........................................         34
                                                                    ---
                                                                    $ 9
                                                                    ===
</Table>

     In March 1997, the Company exercised its right, under a lease, to have a
portion of its leasehold improvements financed and received $140,000 in
connection with this arrangement. This amount is being repaid in 60 equal
monthly installments with an interest rate of 12% per annum. Under the terms of
the Purchase Agreement the lease was assigned to Whatman on May 29, 2001.

  LEASE OBLIGATIONS OF DISCONTINUED OPERATIONS

     The Company leased certain laboratory, research and office space from
Sepracor Inc. ("Sepracor"), a related party, through 1995. In 1995, the Company
executed a lease for these facility requirements, which commenced in February
1996 and extends through February 2004. The lease provides for two five-year
renewal options. Under the terms of the lease, the Company is required to pay
its allocated share of taxes and operating costs in addition to the base annual
rent.

     The Company leased various laboratory, manufacturing and computer equipment
under non-cancelable capital leases. Terms of arrangements with the leasing
company contain bargain purchase provisions at the expiration of the lease term,
which range from 36 months to 42 months. In some instances, the Company was
required to make a deposit of 20% of the original equipment cost, which earned
interest at an annual rate of 4%. As of December 31, 2000, all lease agreements
have expired and there are no amounts outstanding under the Lease Agreements.
Under certain circumstances, Sepracor was the guarantor of debt incurred to
acquire equipment under the leasing facilities. The interest rate charged on the
Company's capital leases ranges from 14% to 21%.

     Future minimum payments of the discontinued operations under all
non-cancelable operating leases in effect at December 31, 2000 are as follows:

<Table>
<Caption>
                                                               (IN THOUSANDS)
<S>                                                            <C>
2001........................................................        $295
2002........................................................         306
2003........................................................         306
2004........................................................          26
2005 and thereafter.........................................          --
                                                                    ----
Total minimum lease payments................................        $933
                                                                    ----
</Table>

     The total charged to rent expense included in the loss from discontinued
operations for all non-cancelable leases including amounts for building
maintenance, utilities and other operating costs were $387,000, $872,000 and
$660,000 in 2001, 2000 and 1999, respectively.

     In December 1999 the Company entered into an exclusive five-year
manufacturing and supply agreement with a major supplier of a component to the
Company's product. The Company completed two amendments to this agreement in
both September and December 2000 in which it agreed to pay Filtertek a total of
$705,000. Upon the completion of the sale of the non-cash assets on May 29, 2001
the agreement was terminated in its entirety.

                                       F-13
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  SEGMENT INFORMATION FROM DISCONTINUED OPERATIONS

     The discontinued operations of the Company represented its blood filtration
business.

     Percentage of revenues derived from significant customers from the
discontinued operations are as follows:

<Table>
<Caption>
                                                               YEAR ENDED
                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              -----   -----
<S>                                                           <C>     <C>
American Red Cross..........................................   50%     66%
Gambro, Inc.................................................   49%     33%
</Table>

D.  ACCRUED EXPENSES AND COMMITMENTS AND CONTINGENCIES:

     Accrued expenses consist of the following at December 31:

<Table>
<Caption>
                                                               2001     2000
                                                              ------   ------
                                                              (IN THOUSANDS)
<S>                                                           <C>      <C>
Employee compensation.......................................   $  3     $ --
Professional fees...........................................    201       85
Customer refunds............................................     --      664
Miscellaneous...............................................     25      194
                                                               ----     ----
                                                               $229     $943
</Table>

     On November 15, 2001, the Company and its wholly owned subsidiary, PT
Acquisition Corp., entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Point Therapeutics, Inc., a privately held Massachusetts
Corporation ("Point Massachusetts"). Upon signing the merger agreement, the
Company paid Point Massachusetts a lock-up fee of $500,000, which has been
classified as an asset at December 31, 2001 which the Company will forfeit and
Point Massachusetts will have no obligation to repay to the Company unless the
merger agreement is terminated under certain circumstances, see Note L.

E.  NOTES PAYABLE:

     In September 2000, the Company $5 million revolving line of credit expired
and was repaid in accordance with the agreement. The revolving line of credit
was being used to help finance the Company working capital requirements and for
general corporate purposes. Amounts borrowed under the line bear interest at the
bank's prime lending rate plus 1/2% payable monthly in arrears. For the year
ended December 31, 2000, the Company recorded interest expense related to
borrowings under the line of $322,000. Sepracor guaranteed to repay amounts
borrowed under the above line of credit, and in exchange for the guarantee, the
Company granted to Sepracor warrants to purchase up to 170,000 shares, of the
Company common stock, see Note F.

F.  STOCKHOLDERS' EQUITY:

     On March 15, 2002 the stockholders of the Company approved a proposal to
amend the Company's certificate of incorporation to effect a 1-for-10 reverse
stock split with respect to the Company's common stock and upon closing of the
merger, to change the Company's name to Point Therapeutics, Inc. The reverse
split became effective on March 15, 2002. In the consolidated financial
statements and accompanying notes, all share, per share amounts and stock option
data of the Company's common stock have been retroactively adjusted to reflect
the stock split. Par value remains at $0.01 per share.

                                       F-14
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In accordance with the terms of the Merger Agreement, immediately prior to
the effective time of the merger, and after taking into account the 1-for-10
reverse split with respect to the Company's common stock prior to the merger,
each share of Point Massachusetts common stock outstanding immediately prior to
the effective time of the merger (including all shares of Point Massachusetts
preferred stock converted prior to the effective time) has been converted into
the right to receive 4.16168 shares of the Company's common stock.

     Under a Technology Transfer and License Agreement (see Note I) Sepracor was
entitled beginning in April 1998 to certain rights with respect to the
registration under the Securities Act of 1933, as amended, of a total of 300,000
shares of common stock related to the technology transfer and establishment of
the Company in 1993. These rights provide that Sepracor may require the Company,
on two occasions, to register shares having an aggregate offering price of at
least $5,000,000, subject to certain conditions and limitations.

     In September 1998 the Company completed a $5 million revolving line of
credit arrangement with a commercial bank. Sepracor guaranteed to repay amounts
borrowed under the above line of credit. In exchange for the guarantee, the
Company granted to Sepracor warrants to purchase up to 170,000 shares of the
Company's common stock at a price of $6.90 per share. The warrants will expire
in the year 2003 and have certain registration rights associated with them. The
Company placed a value of $1,938,000 on the 170,000 warrants as of the date of
the final agreement and amortized this deferred financing charge on a monthly
basis over the term of the line of credit. For the periods ended December 31,
2000 and 1999 the Company amortized $725,000 and $1,024,000, respectively, of
this deferred finance charge and recorded it as interest expense in the
Statement of Operations.

     In March 1999, the Company completed a private placement financing with
Sepracor in which the Company received $2,000,000 in exchange for 133,333 shares
of the Company's common stock and warrants to purchase an additional 66,700
shares of common stock at $15 per share. The warrants will expire in the year
2004 and have certain registration rights associated with them. In certain
circumstances, the Company is entitled to require Sepracor to exercise these
warrants.

     On May 3, 1999, the Company completed a private placement financing with
Gambro Inc. ("Gambro"). The stock subscription agreement, which the Company
entered into with Gambro in connection with this financing, provided for an
initial investment of $9,000,000 in exchange for 450,000 shares of the Company's
common stock. The stock subscription agreement also provided Gambro with an
option to purchase additional shares of the Company's common stock for up to an
aggregate purchase price of $3,000,000 at any time between August 3, 1999 and
May 3, 2000 with the price per share of common stock to be based upon the market
price of the Company's common stock. In October 1999, Gambro exercised this
option in full. In connection with the exercise of this option, Gambro purchased
49,835 shares at a price of $60.20 per share. The price and number of shares
reflected the average price of the Company's stock in the 30 days prior to the
exercise date of October 5, 1999.

     In March 2001, the Company signed a termination and release agreement with
Gambro, effective November 2000, which ended the distribution and development
agreement. In consideration for the Company's inventory from the discontinued
operation (net book value at December 31, 2000 of $332,000) of products bearing
Gambro's company name, and by way of complete resolution of all issues
outstanding between the Company and Gambro, Gambro agreed to return 101,169
shares of common stock with a fair market value at closing of $332,000.

     In March 2000, the Company completed a private placement financing yielding
gross proceeds of $27,975,000 in which institutional investors purchased 373,000
shares of its common stock at a purchase price of $75 per share. The Company has
registered 255,132 of such shares for resale. The Company has used the majority
of the net proceeds of such financing, which aggregated $25,791,000, for working
capital, capital equipment and general corporate purposes.

                                       F-15
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The terms of the above warrants will not be affected by Merger Agreement as
described in Note L.

     As of December 31, 2001, Gambro and Sepracor owned 27% and 23% of the
Company's issued and outstanding common stock respectively.

G.  STOCK OPTION PLANS:

     Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), encourages, but does not require
companies to record compensation cost for stock-based employee compensation
plans at fair value. The Company has chosen to continue to account for
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Accordingly, compensation cost for
stock options is measured as the excess, if any, of the quoted market price of
the Company's stock at the date of the grant over the amount an employee must
pay to acquire the stock.

     The Company has two stock options plans currently in effect under which
future grants may be issued. The 1994 Stock Option Plan, as amended, and the
1994 Director Option Plan, as amended (collectively, the "Plans"). A total of
429,220 shares have been authorized for grants of options or shares, of which
198,215 are still available for grant. Stock options granted during 2001, 2000
and 1999 generally have a maximum term of ten years and vest ratably over a
period of two to five years.

     In February 2001, the Company granted 15,000 stock options to two directors
for consulting services provided in connection with the sale of the Company's
non-cash assets to Whatman (see Note C), and with respect to investigating
various strategic business combinations. The options vested on May 29, 2001, in
connection with the completion of the asset sale and a compensation charge of
$41,000 has been calculated using the Black-Scholes model and recorded as an
expense from continuing operations in 2001.

     In connection with the sale of the Company's non-cash assets to Whatman
(see Note C) all of the Company's employees, with the exception of certain
executive officers who were retained by the Company, were terminated and became
employees of Whatman. In accordance with the Plans, all outstanding unvested
stock options of the Company vested on May 29, 2001 and were terminated 90 days
thereafter if unexercised.

                                       F-16
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A summary of the Company's stock option activity for the three years ended
December 31, 2001 is as follows:

<Table>
<Caption>
                                                                           WEIGHTED AVERAGE
                                                       NUMBER OF OPTIONS    EXERCISE PRICE
                                                       -----------------   ----------------
                                                        (IN THOUSANDS)
<S>                                                    <C>                 <C>
Outstanding at December 31, 1998.....................         251               $13.10
Granted..............................................          30               $52.70
Exercised............................................         (36)              $20.20
Terminated...........................................          (6)              $ 9.40
                                                              ---               ------
Outstanding at December 31, 1999.....................         239               $17.20
Granted..............................................          35               $46.20
Exercised............................................         (11)              $14.50
Terminated...........................................          (8)              $52.20
                                                              ---               ------
Outstanding at December 31, 2000.....................         255               $20.30
Granted..............................................          15               $ 7.20
Exercised............................................          --                   --
Terminated...........................................         (95)              $26.50
                                                              ---               ------
Outstanding at December 31, 2001.....................         175               $15.70
                                                              ===               ======
</Table>

     The following table summarizes the status of the Company's stock options at
December 31, 2001:

<Table>
<Caption>
                                     OPTIONS OUTSTANDING
                           ---------------------------------------      OPTIONS EXERCISABLE
                                             WEIGHTED                -------------------------
                                              AVERAGE     WEIGHTED       NUMBER       WEIGHTED
                               NUMBER        REMAINING    AVERAGE     EXERCISABLE     AVERAGE
                           OUTSTANDING AS   CONTRACTUAL   EXERCISE       AS OF        EXERCISE
RANGE OF EXERCISE PRICES    OF 12/31/01        LIFE        PRICE        12/31/01       PRICE
------------------------   --------------   -----------   --------   --------------   --------
                           (IN THOUSANDS)   (IN YEARS)               (IN THOUSANDS)
<S>                        <C>              <C>           <C>        <C>              <C>
    $  6.25-$  7.19             125             6.4       $  6.36         125         $  6.36
    $ 12.50-$ 17.50              21             6.5       $ 12.75          21         $ 12.75
    $ 20.00-$ 20.00               5             2.0       $ 20.00           5         $ 20.00
    $ 48.75-$ 56.25              21             7.7       $ 56.00          21         $ 56.00
    $123.75-$162.50               3             4.2       $137.01           3         $137.01
                                ---             ---       -------         ---         -------
                                175             6.4       $ 15.69         175         $ 15.69
</Table>

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                           2001      2000      1999
                                                          -------   -------   -------
                                                           (IN THOUSANDS, EXCEPT FOR
                                                            EXERCISE PRICE AMOUNTS)
<S>                                                       <C>       <C>       <C>
Options exercisable.....................................      175       108        66
Weighted average exercise price.........................  $ 15.69   $ 16.50   $ 19.80
</Table>

     The weighted average grant date fair value for options granted during 2001,
2000, and 1999 was $5.90, $31.20, and $35.70 per option, respectively. The fair
value of these options at date of grant was estimated using the Black-Scholes
model with the following weighted average assumptions for 2001, 2000 and 1999:
risk-free interest rate of 5.5%; dividend yields of 0%; volatility factor of the
market price of the Company's common stock of 75%; and a weighted average
expected life of the options of 5.5 years.

                                       F-17
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In 1995, the Company adopted the 1995 Employee Stock Purchase Plan (the
"Stock Purchase Plan"). Under the Stock Purchase Plan, an aggregate of 50,000
shares of common stock may be purchased by employees at 85% of market value on
the first or last day of each six-month offering period, whichever is lower,
through accumulation of payroll deductions ranging from 1% to 10% of
compensation as defined, subject to certain limitations. Options were exercised
to purchase 24,012 shares for a total of $159,000 during the year ended December
31, 2000 and 4,107 shares for a total of $117,000 during the year ended December
31, 1999. At December 31, 2000, 5,128 shares of common stock were reserved for
future issuance under the plan. No options were issued under this plan in 2001
and effective with the sale of the non-cash assets to Whatman (see Note C) the
Stock Purchase Plan ceased.

     Had compensation cost for the Company's stock option plans been determined
based on the fair value at the grant date for awards in 2001, 2000, and 1999
consistent with the provisions of SFAS No. 123, the Company's net loss and net
loss per share would have been reduced to the pro forma amounts indicated below.
The application of SFAS No. 123 to the employee stock purchase plan would not
result in a significant difference from reported net income and earnings per
share.

<Table>
<Caption>
                                                          2001       2000        1999
                                                         -------   ---------   ---------
                                                         (IN THOUSANDS; EXCEPT PER SHARE
                                                                    AMOUNTS)
<S>                                                      <C>       <C>         <C>
Net income (loss) -- as reported.......................  $4,327    $(16,223)   $(10,665)
Net income (loss) -- pro forma.........................  $2,430    $(17,062)   $(11,274)
Net income (loss) per share -- as reported -- basic and
  diluted..............................................  $ 2.27    $  (8.52)   $  (7.75)
Net income (loss) per share -- pro forma -- basic and
  diluted..............................................  $ 1.27    $  (8.96)   $  (8.19)
</Table>

     The pro forma effect on net income for 2001, 2000 and 1999 is not
representative of the pro forma effect on net income in future years because it
does not take into consideration pro forma compensation expense related to
grants made prior to 1995 or anticipated future option activity.

     In connection with the initial public offering, the Company granted to the
underwriter an option to purchase 21,750 shares of common stock at an exercise
price equal to 150% of the initial public offering price or $105 and subject to
adjustment in certain circumstances. The option was exercisable at any time or
from time to time after April 14, 1995 and before April 14, 1999. The option was
not exercised.

                                       F-18
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

H.  INCOME TAXES:

     The components of the Company's deferred tax assets and liabilities are as
follows at December 31:

<Table>
<Caption>
                                                               2001            2000
                                                             --------        --------
                                                                  (IN THOUSANDS)
<S>                                                          <C>             <C>
Deferred taxes:
  Net operating loss carryforwards.......................    $ 33,950        $ 35,747
  Deferred revenue.......................................       3,842              --
  Tax credit carryforwards...............................       1,343           1,632
  Accrued charges not paid...............................          91             527
  Deferred compensation..................................         108             285
  Research and development expense capitalization
     accrued.............................................          --           5,180
  Inventory reserves.....................................          --             803
  Property and equipment.................................          --             214
                                                             --------        --------
                                                              (39,334)         44,388
Valuation allowance......................................     (39,334)        (44,388)
                                                             --------        --------
Net deferred taxes.......................................    $     --        $     --
                                                             ========        ========
</Table>

     At December 31, 2001 and 2000, the Company provided a valuation allowance
for the full amount of its net deferred tax assets since, based on the weight of
available evidence, management could not conclude that it is more likely than
not that these future benefits will be realized.

     The Company 's statutory and effective tax rates were 34% and 0%,
respectively, for 2001, 2000 and 1999. The effective tax rate was 0% due to a
net operating loss and the non-recognition of any net loss carryforwards
("NOLs") of approximately $87,600,000 and $66,300,000, respectively, to offset
future regular taxable earnings. The federal and state NOLs begin to expire in
2009 and 2002,respectively. The Company has federal and state research and
development tax credits of approximately $898,000 and $681,000, respectively,
which both begin to expire in 2009. Under Internal Revenue Code, certain
substantial changes in the Company's ownership could result in an annual
limitation on the amount of net operating loss and tax credit carryforwards
which can be utilized in future years to offset future taxable income and tax
liabilities.

I.  AGREEMENTS:

     Under a Technology Transfer and License Agreement, Sepracor transferred to
the Company all technology owned or controlled by Sepracor, including trade
secrets, patents and patent applications that relates to and is used in
researching developing or manufacturing products in the Company Field as defined
in the agreement. Further, Sepracor granted an exclusive license to the Company
for any improvements to the transferred technology, which were developed, or
otherwise acquired, by Sepracor during the period beginning on the date of the
Technology Transfer and License Agreement and terminating on the earlier of
January 1, 1998 or the acquisition of Sepracor or the Company (the "Effective
Period"). The Company granted to Sepracor an exclusive license to the
transferred technology for the development, manufacture, use or sale of any
products within the field of chiral synthesis, chiral separations and the
development, manufacture, use or sale of chiral drugs and chiral drug
intermediates, as well as a non-exclusive license to the transferred technology
for the development, manufacture, use or sale of any products outside of the
Company Field. All licenses were royalty-free. Sepracor also granted the Company
a right of first refusal to any product, which Sepracor proposed to sell, or
license a third party to sell during the Effective Period, for use within the

                                       F-19
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company Field. Under the terms of the sales of the Company's non-cash assets to
Whatman on May 29, 2001, the above agreement was assigned to Whatman.

J.  EMPLOYEES' SAVINGS PLAN:

     The Company has a 401(k) plan for all employees. Under the provisions of
the plan, employees may voluntarily contribute up to 15% of their compensation
subject to statutory limitations. In addition, the Company can make a matching
contribution at its discretion. In 1999 the Company provided approximately
$40,000 of matching contributions. There were no employer contributions to the
plan in 2001 and 2000. In accordance with the asset Purchase Agreement with
Whatman, see Note C, the plan was assumed by Whatman on May 29, 2001.

K.  LITIGATION:

     The Company is a defendant in a lawsuit brought by Pall Corporation
("Pall") in the United States District Court for the Eastern District of New
York regarding the Company's LeukoNet System, which is no longer made or sold by
the Company (the "Pall Litigation"). In a complaint filed in November 1996, Pall
alleged that the manufacture, use and/or sale of the LeukoNet System infringed
upon two patents held by Pall. Pall dropped its allegations concerning
infringement of one of the patents and alleges only that the LeukoNet System
infringed Pall's U.S. Patent No. 4,952,572 (the "'572 Patent").

     With respect to the allegations concerning the '572 Patent, the Company
answered the complaint stating that the LeukoNet System does not infringe any
claim of the asserted patents. Further, the Company counterclaimed for
declaratory judgment of invalidity, noninfringement and unenforceability of the
'572 Patent. Pall amended its complaint to add Lydall, Inc., whose subsidiary
supplied the filter media for the LeukoNet System, as a co-defendant. The
Company filed for summary judgment of non-infringement, and Pall cross-filed for
summary judgement of infringement at the same time. Lydall, Inc. supported the
Company's motion for summary judgment of non-infringement, and filed a motion
for summary judgment that the asserted claims of the '572 patent are invalid as
a matter of law. Discovery has been completed in the action. The Court held a
hearing on the summary judgment motions on April 18, 2000. On September 19,
2001, the Court granted the Company's motion finding that claims 48, 50 and 51
of the '572 patent were not infringed. The Court is now in the process of
determining if any outstanding issues remain to be decided. Pall has contended
that claim 37, 38 and 42 of the '572 patent have been asserted against the
Company. Pall has also moved the Court to reconsider its decision granting
summary judgment against the Company. The Company is opposing Pall's motion for
reconsideration and Pall's contention that additional claims are at issue, and
is awaiting the Court's decision on whether to enter final judgment in favor of
the Company.

     The Company and Gambro BCT, Inc. filed a complaint for declaratory relief
against Pall in the United States District Court of Colorado. The Company and
Gambro BCT seek declaratory relief that the '572 Patent, Pall's U.S. Patent No.
5,451,321 (the "'321 Patent") and Pall's U.S. Patent No.'s 5,229,012, 5,344,561,
5,501,795 and 5,863,436 are invalid and not infringed by the Company's r\LS
System and methods of using the r\LS System. Pall moved to dismiss or transfer
to the Eastern District of New York or, in the alternative, to stay this action.
The Company and Gambro BCT opposed Pall's motion. On July 16, 1999, the United
States District Court of Colorado denied Pall's motion to transfer or, in the
alternative, to stay the action. On September 30, 1999, the Court denied Pall's
motion to dismiss the action. On October 20, 1999, Pall submitted a counterclaim
alleging that the Company's r\LS System infringes its patents that are the
subject of the lawsuit and that the Company and Gambro BCT tortiously interfered
and unfairly competed with Pall's business. The Company and Gambro BCT replied
to Pall's counterclaim and denied Pall's allegations of tortious interference,
unfair competition and patent infringement.

                                       F-20
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     On July 13, 2000, Pall filed a Complaint in the United States District
Court for the District of Colorado against the Company, Gambro BCT, Inc. and
Gambro AB alleging that the Company's r\LS system infringes Pall's U.S. Patent
No. 6,086,770 (the "'770 Patent"). On August 11, 2000, this action was
consolidated with the earlier declaratory relief action in the United States
District Court for the District of Colorado. The Company, Gambro BCT, Inc. and
Gambro AB answered the complaint, denied the allegations of infringement and
submitted a counterclaim alleging that Pall's '770 patent is invalid, not
infringed and unenforceable. In September 2000, Pall answered the counterclaim
and denied the allegations of noninfringement, invalidity and unenforceability.

     On December 15, 2000, Pall filed a complaint against Filtertek, Inc.
("Filtertek") alleging that Filtertek, a subcontract manufacturer to the Company
for the r\LS filter, infringes the seven above-mentioned Pall patents. Filtertek
answered the complaint on January 31, 2001, denied Pall's allegations of
infringement and asserted that the claims of the Pall patents are invalid and/or
unenforceable and that Pall is estopped from asserting infringement against
Filtertek by reason of Pall's prior conduct with Filtertek. This action has been
consolidated with the other actions pending in Colorado. Discovery is now
ongoing.

     The Company, with Filtertek's support, has moved for summary judgment that
the accused r\LS system does not infringe, either literally or under the
doctrine of equivalents, any of the asserted claims of Pall's '572, '012, '561,
or '796 patents. The Court has not ruled on Pall's motion, and Pall has yet to
respond to the Company's summary judgment motion. On October 9, 2001, Pall moved
to dismiss the Colorado case based upon lack of subject matter jurisdiction. In
its motion, Pall provided the Company with a limited covenant not to sue the
Company for sales of certain prior r\LS systems on certain claims of the
patents-in-suit. Based upon this covenant not to sue, the Company and Pall
jointly moved the Colorado court to dismiss Pall's claims of infringement of the
'321, '561, '795, '012 and '572 patents, with prejudice, and to dismiss the
Company's declaratory judgment claims for lack of subject matter jurisdiction.
The court has granted this motion. Thus, Pall's infringement contentions are now
limited to certain claims of the '436 and '770 patents and the Company's summary
judgement motion is now moot. On December 3, 2001, Whatman HemaSure Inc. was
joined as a Plaintiff and Counterclaim Defendant in the consolidated case.

     On December 22, 2000, Gambro AB and Gambro BCT moved to dismiss the
consolidated actions based on a settlement agreement with Pall Corporation. On
January 10, 2001, the Court dismissed the action with respect to all claims
between Pall, Gambro BCT, and Gambro AB.

     On April 23, 1999, Pall filed a complaint against the Company and Gambro
BCT in the Eastern District of New York alleging that the Company's r\LS System
infringes Pall's '572 Patent and that the Company and Gambro BCT tortiously
interfered and unfairly competed with Pall's business. On May 19, 1999, Pall
amended its complaint and added Gambro, Gambro A.B. and Sepracor as defendants.
The Company and Gambro BCT have moved to dismiss, transfer or stay the action
and Pall has opposed the motion. On April 18, 2000, Pall moved, without
opposition from the defendants, to dismiss the action and the Court granted
Pall's motion.

     A prior lawsuit brought by Pall in February 1996 has concluded. In June
1999, the United States Court of Appeals for the Federal Circuit determined that
the LeukoNet System did not infringe claim 39 of the '321 Patent and Pall has
not appealed that decision.

     Under the terms of the Purchase Agreement entered into by and among the
Company and Whatman, Whatman assumed any and all obligations and liabilities of
the Company related to the Pall Litigation. However, any damages and certain
settlement amounts incurred by Whatman in connection with the Pall Litigation
may be offset by Whatman against any royalties owed by Whatman to the Company
pursuant to the terms of the Royalty Agreement described in Note C to the
Consolidated Financial Statements, and thus may reduce the amount of royalties
the Company may collect under the terms of the Royalty Agreement.

                                       F-21
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company believes, based upon its review of these matters, that a
properly informed court should conclude that the manufacture, use and/or sale by
the Company or its customers of the LeukoNet System and the r\LS System do not
infringe any valid enforceable claim of the Pall patents. However, there can be
no assurance that the Company will prevail in the pending litigations, and an
adverse outcome in the Pall Litigation would have a material and adverse effect
on the Company's financial condition and its ability to collect royalties from
Whatman under the terms of the Royalty Agreement.

L.  AGREEMENT AND PLAN OF MERGER

     On November 15, 2001, the Company and its wholly owned subsidiary, PT
Acquisition Corp. entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Point Massachusetts. Pursuant to the agreement, PT Acquisition
Corp. will merge with Point Massachusetts. It is currently anticipated that the
Closing Date will occur on or as promptly as practicable following the approval
and adoption of the Merger Agreement by the Stockholders of the Company and the
satisfaction or waiver of all of the other conditions set forth in the Merger
Agreement.

     Upon signing the merger agreement, the Company paid Point Massachusetts a
lock-up fee of $500,000, which the Company will forfeit and Point Massachusetts
will have no obligation to repay to the Company unless the merger agreement is
terminated under certain circumstances set forth below. See "The Merger
Agreement -- Termination Fees -- Point Lock-Up Fee." The $500,000 lock-up fee
has been disclosed in the financial statements of the Company as an asset and
will be treated as an asset of the Company in determining the adjusted exchange
ratio in connection with the Merger Agreement.

     Point Massachusetts, has agreed to repay the Company a fee of $250,000 if
the merger agreement is terminated by Point Massachusetts, or the Company
because a court or governmental, regulatory or administrative agency or
commission has issued a non-appealable final order, decree or ruling or taking
any other action which has the effect of permanently restraining, enjoining or
otherwise prohibiting the merger unless the court proceeding was initiated by a
stockholder of the Company or Point Massachusetts.

     Pursuant to the merger agreement, Point Massachusetts, has agreed to return
the Company's $500,000 lock-up fee and pay the Company an additional $500,000 if
the merger agreement is terminated (i) based on the expiration of the
Termination Date which is caused by Point Massachusetts' failure to fulfill any
of its obligations under the merger agreement, including any extensions thereof
as contemplated by the merger agreement, (ii) because of a court order as
described in the previous paragraph which is initiated by a stockholder of Point
Massachusetts; or (iii) based on Point Massachusetts' breach of any covenant or
agreement set forth in the merger agreement (subject to Point Massachusetts'
right to cure under certain circumstances).

     The merger agreement also provides that if the merger agreement is
terminated by the Company because the Company's board of directors authorized
the Company to enter into a definitive agreement with respect to a "Superior
Parent Proposal", as defined in the merger agreement, the Company shall forfeit
to Point Massachusetts the lock-up fee of $500,000 and shall pay to Point
Massachusetts an additional fee of $650,000.

M.  SUBSEQUENT EVENT

     On March 15, 2002 the stockholders of the Company voted in favor of the
Merger Agreement (see Note L). In addition, the stockholders of the Company also
approved a proposal to amend the Company's certificate of incorporation to
effect a 1-for-10 reverse stock split with respect to the Company's common stock
and, upon closing of the merger, to change the Company's name to Point
Therapeutics, Inc. The reverse split became effective on March 15, 2002. In the
financial statements and accompanying notes, all share, per share

                                       F-22
<PAGE>
                            POINT THERAPEUTICS, INC.
                              (FORMERLY HMSR INC.)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amounts, stock option data, and market prices of the Company's common stock have
been retroactively adjusted to reflect the stock split. Par value remains at
$0.01 per share.

     In accordance with the terms of the Merger Agreement, immediately prior to
the effective time of the merger, and after taking into account the 1-for-10
reverse split with respect to the Company's common stock prior to the merger,
each share of Point Massachusetts common stock outstanding immediately prior to
the effective time of the merger (including all shares of Point Massachusetts
preferred stock converted prior to the effective time) has been converted into
the right to receive 4.16168 shares of the Company's common stock.

N.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):

<Table>
<Caption>
                                                 Q1 2001    Q2 2001    Q3 2001    Q4 2001
                                                 --------   --------   --------   --------
                                                 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                              <C>        <C>        <C>        <C>
Operating expenses from continuing
  operations...................................  $    91    $   800    $   376    $   596
Net income (loss) from continuing operations...       12       (741)      (291)      (497)
Loss from discontinued operations..............   (4,223)    (1,896)        --         --
Gain from the sale of discontinued
  operations...................................       --     11,975        (12)        --
                                                 -------    -------    -------    -------
Net loss.......................................  $(4,211)   $ 9,338    $  (303)   $  (497)
Net loss per share -- basic and diluted:
Continuing operations..........................  $  0.00    $ (0.40)   $ (0.16)   $ (0.26)
Discontinued operations........................  $ (2.15)   $  5.34    $  0.00    $  0.00
                                                 -------    -------    -------    -------
Net loss per share basic and diluted...........  $ (2.15)   $  4.94    $ (0.16)   $ (0.26)
Weighted average number of shares of common
  stock Outstanding -- basic and diluted.......    1,961      1,889      1,889      1,889

<Caption>
                                                 Q1 2000    Q2 2000    Q3 2000    Q4 2000
                                                 --------   --------   --------   --------
                                                 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                              <C>        <C>        <C>        <C>
Operating expenses from continuing
  operations...................................  $  (173)   $  (445)   $   (93)   $   (94)
Net (loss) income from continuing operations...     (401)      (498)       (67)        14
Loss from discontinued operations..............   (2,918)    (2,848)    (4,642)    (4,863)
                                                 -------    -------    -------    -------
Net loss.......................................  $(3,319)   $(3,346)   $(4,709)   $(4,849)
Net loss per share -- basic and diluted:
Continuing operations..........................  $ (0.24)   $ (0.25)   $ (0.03)   $  0.01
Discontinued operations........................  $ (1.71)   $ (1.45)   $ (2.36)   $ (2.46)
                                                 -------    -------    -------    -------
Net loss per share basic and diluted...........  $ (1.95)   $ (1.70)   $ (2.39)   $ (2.45)
Weighted average number of shares of common
  stock Outstanding -- basic and diluted.......    1,704      1,965      1,970      1,977
</Table>

                                       F-23
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 29th day of
March, 2002.

                                          POINT THERAPEUTICS, INC.

                                          By:  /s/ DONALD R. KIEPERT, JR.
                                            ------------------------------------
                                                  Donald R. Kiepert, Jr.
                                               President and Chief Executive
                                                           Officer

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

<Table>
<Caption>
                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
<S>                                          <C>                                       <C>
/s/ DONALD R. KIEPERT, JR.                   President, Chief Executive Officer and    March 29, 2002
------------------------------------------   Director (Principal Executive Officer)
Donald R. Kiepert, Jr.


/s/ RICHARD N. SMALL                         Senior Vice President, Chief Financial    March 29, 2002
------------------------------------------   Officer and Treasurer (Principal
Richard N. Small, CPA                        Financial and Accounting Officer)


/s/ TIMOTHY J. BARBERICH                     Director                                  March 29, 2002
------------------------------------------
Timothy J. Barberich


/s/ THOMAS M. CLAFLIN                        Director                                  March 29, 2002
------------------------------------------
Thomas M. Claflin


/s/ DANIEL T. ROBLE                          Director                                  March 29, 2002
------------------------------------------
Daniel T. Roble, Esq


/s/ WILLIAM J. WHELAN, JR.                   Director                                  March 29, 2002
------------------------------------------
William J. Whelan, Jr.
</Table>
<PAGE>

                                 EXHIBIT INDEX

     The following exhibits are filed as part of this Annual Report on Form
10-K:

<Table>
<Caption>
  EXHIBIT NO.
  -----------                           DESCRIPTION
  <C>           <S>
    2.1(24)     Agreement and Plan of Merger, dated November 15, 2001, among
                HMSR Inc., PT Acquisition Corp., and Point Therapeutics,
                Inc.
    2.2(6)      Heads of Agreement, dated as of January 31, 1996, between
                HMSR and Novo Nordisk A/S.
    3.1(1)      Certificate of Incorporation of HMSR.
    3.2(21)     Certificate of Amendment of Certificate of Incorporation of
                HMSR.
    3.3(23)     Certificate of Amendment of Certificate of Incorporation of
                HMSR.
    3.4(25)     Certificate of Amendment of Certificate of Incorporation of
                HMSR.
    3.5(1)      By-Laws of HMSR.
    4.1(1)      Specimen Certificate for shares of Common Stock, $.01 par
                value, of HMSR.
    4.2(9)      Registration Rights Agreement, dated January 23, 1997, by
                and among HMSR and Novo Nordisk A/S
    4.3(10)     Registration Rights Agreement, dated as of September 15,
                1998, between HMSR and Sepracor.
    4.4(11)     Warrant Agreement, dated as of September 15, 1998, between
                HMSR and Sepracor.
    4.5(11)     Warrant Certificate, dated as of September 15, 1998, between
                HMSR and Sepracor.
    4.6(13)     Registration Rights Agreement, dated as of March 23, 1999,
                between HMSR and Sepracor.
    4.7(13)     Warrant Agreement, dated as of March 23, 1999, between HMSR
                and Sepracor.
    4.8(13)     Warrant Certificate, dated as of March 23, 1999, between
                HMSR and Sepracor.
    4.9(14)     Stock Subscription Agreement, dated as of May 3, 1999,
                between HMSR and COBE.
    4.10(14)    Stockholder's Agreement, dated as of May 3, 1999, between
                HMSR and COBE.
   10.1(22)     Amended and Restated 1994 Stock Option Plan.
   10.2(9)      1994 Director Option Plan.
   10.3(1)      Form of Technology Transfer and License Agreement between
                HMSR and Sepracor Inc.
   10.4(6)      Lease Agreement for 140 Locke Drive, Marlborough, MA, dated
                as of November 1995, between HMSR and First Marlboro
                Development Trust.
   10.5(4)      Employment Agreement between HMSR and Dr. Hans Heiniger,
                dated January 10, 1994.
   10.6(7)      Asset Purchase Agreement dated as of May 2, 1996 between
                HMSR, HemaPharm Inc., HemaSure A/S and Novo Nordisk A/S.
   10.7(8)      Restructuring Agreement, dated January 23, 1997, between
                HMSR, HemaPharm Inc., HemaSure A/S and Novo Nordisk A/S.
   10.8(9)      Convertible Subordinated Note Due December 31, 2001 in the
                amount of U.S. $11,721,989, issued by HMSR to Novo Nordisk
                A/S, dated January 23, 1997.
   10.9(9)      Amendment to HMSR's 1994 Director Option Plan, dated June
                25, 1996.
   10.10(9)     Amendment to HMSR's 1994 Director Option Plan, effective as
                of May 16, 1996.
   10.11(9)     Amendment to HMSR's 1994 Stock Option Plan, dated June 25,
                1996.
   10.12(9)     Amendment to HMSR's 1994 Stock Option Plan, effective as of
                May 16, 1996.
   10.13(9)     Sublease Agreement, between HMSR and Novo Nordisk A/S, dated
                May 2, 1996, for the Premises (Denmark), as amended.
   10.14(9)     Sublease Agreement between HMSR and Novo Nordisk A/S, dated
                May 2, 1996, for the Warehouse (Denmark), as amended.
   10.15(12)    Employment Agreement between HMSR and John F. McGuire, dated
                April 1, 1997.
   10.16(12)    Settlement Agreement, dated September 1997, by and among
                HMSR, HemaSure AB, HemaPharm Inc., Pharmacia & Upjohn Inc.
                and Pharmacia & Upjohn AB.
   10.17(10)    1995 Employee Stock Purchase Plan, as amended.
   10.18(11)    Revolving Credit and Security Agreement, dated as of
                September 15, 1998, between the Company and Fleet National
                Bank.
</Table>
<PAGE>

<Table>
<Caption>
  EXHIBIT NO.
  -----------                           DESCRIPTION
  <C>           <S>
   10.19(11)    Intellectual Property Security Agreement, dated as of
                September 15, 1998, between the Company and Fleet National
                Bank.
   10.20(11)    Promissory Note, dated as of September 15, 1998, made by
                HMSR in favor of Fleet National Bank.
   10.21(11)    Amended and Restated Master Strategic Alliance Agreement
                between HMSR and the American Red Cross.
   10.22(14)    Senior Management Retention Agreement, dated as of December
                7, 1998, between HMSR and John F. McGuire.
   10.23(14)    Senior Management Retention Agreement, dated as of December
                15, 1998, between HMSR and James B. Murphy.
   10.24(14)    Senior Management Retention Agreement, dated as of December
                22, 1998, between HMSR and Peter C. Sutcliffe.
   10.25(13)    Securities Purchase Agreement, dated as of March 23, 1999,
                between HMSR and Sepracor.
   10.26(14)    Amended and Restated Exclusive Distribution Agreement, dated
                as of May 3, 1999, between HMSR and COBE.
   10.27(15)    Master Purchase Agreement, dated as of July 1, 1999, between
                HMSR and The American National Red Cross.
   10.28(16)    Manufacturing and Supply Agreement, dated as of December 22,
                1999, between HMSR and Filtertek Inc.
   10.29(16)    Supply and Assembly Agreement, dated as of January 31, 2000,
                between HMSR and Command Medical Products Inc.
   10.30(16)    Placement Agency Agreement, dated February 3, 2000, between
                HMSR and Warburg Dillon Read LLC.
   10.31(16)    Form of Purchase Agreement, dated March 2, 2000.
   10.32(16)    Schedule of purchasers which purchased shares of common
                stock pursuant to the Form of Purchase Agreement set forth
                in 10.31.
   10.33(17)    Indemnification Agreement, dated as of July 13, 2000 between
                HMSR and Ahlstrom Technical Specialties LLC.
   10.34(18)    Termination of Supply and Assembly Agreement and Release,
                dated as of December 8, 2000, by and between HMSR and
                Command.
   10.35(18)    Amendment No. 1 to Manufacturing and Supply Agreement, dated
                as of September 21, 2000, by and between HMSR and Filtertek.
   10.36(18)    Amendment No. 2 to Manufacturing and Supply Agreement, dated
                as of December 15, 2000, by and between HMSR and Filtertek.
   10.37(18)    Termination and Release Agreement, dated as of March 5,
                2001, by and between HMSR and Gambro.
   10.38(19)    Asset Purchase Agreement, dated as of February 3, 2001, by
                and between HMSR, Whatman and Whatman plc.
   10.39(20)    Amendment to Asset Purchase Agreement, dated as of April 2,
                2001, by and between HMSR, Whatman and Whatman plc.
   10.40(20)    Royalty Agreement, dated as of May 29, 2001, by and among
                HMSR, Whatman and Whatman plc.
   10.41(23)    Termination and Release, dated as of August 17, 2001, by and
                between The American National Red Cross, and HMSR.
   10.42(23)    Employment Agreement, made effective May 29, 2001, by and
                between HMSR and John F. McGuire.
   10.43(23)    Employment Agreement, made effective May 29, 2001, by and
                between HMSR and James B. Murphy.
   10.44(23)    Employment Agreement, made effective May 29, 2001, by and
                between HMSR and Peter C. Sutcliffe.
   10.45(23)    Consulting Agreement, entered into as of January 1, 2001, by
                and between HMSR and Summit Roundtable.
</Table>
<PAGE>

<Table>
<Caption>
  EXHIBIT NO.
  -----------                           DESCRIPTION
  <C>           <S>
   21.1         Subsidiaries of the Company.
   23.1         Consent of PricewaterhouseCoopers LLP
</Table>

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

 (1) Incorporated herein by reference to HMSR's Registration Statement on Form
     S-1, as amended (File No. 33-75930).

 (2) Incorporated herein by reference to HMSR's Annual Report on Form 10-K for
     the year ended December 31, 1994.

 (3) Incorporated herein by reference to HMSR's Quarterly Report on Form 10-Q
     for the quarter ended March 31, 1995.

 (4) Incorporated herein by reference to HMSR's Registration Statement on Form
     S-1, as amended (File No. 33-95540).

 (5) Incorporated herein by reference to HMSR's Quarterly Report on Form 10-Q
     for the quarter ended September 30, 1994.

 (6) Incorporated herein by reference to HMSR's Annual Report on Form 10-K for
     the year ended December 31, 1995.

 (7) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1996.

 (8) Incorporated by reference to HMSR's Current Report on Form 8-K filed on
     February 27, 1997.

 (9) Incorporated by reference to HMSR's Annual Report on Form 10-K for the year
     ended December 31, 1996.

(10) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended June 30, 1998.

(11) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended September 30, 1998.

(12) Incorporated by reference to HMSR's Annual Report on Form 10-K for the year
     ended December 31, 1997.

(13) Incorporated by reference to HMSR's Annual Report on Form 10-K for the year
     ended December 31, 1998.

(14) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1999.

(15) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended June 30, 1999.

(16) Incorporated by reference to HMSR's Annual Report on Form 10-K for the year
     ended December 31, 1999.

(17) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended June 30, 2000.

(18) Incorporated by reference to HMSR's Annual Report on Form 10-K for the year
     ended December 31, 2000.

(19) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 2001.

(20) Incorporated by reference to HMSR's Definitive Proxy Statement on Schedule
     14A filed on April 27, 2001.

(21) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended June 30, 2001.

(22) Incorporated by reference to HMSR's Definitive Proxy Statement on Schedule
     14A filed on May 24, 1999.

(23) Incorporated by reference to HMSR's Quarterly Report on Form 10-Q for the
     quarter ended September 30, 2001.

(24) Incorporated by reference to HMSR's Registration Statement on Form S-4
     filed on February 11, 2002.

(25) Incorporated by reference to HMSR's Current Report on Form 8-K filed on
     March 28, 2002.