SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
       |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                                       or
        |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        Commission File Number 000-29822
                           THEHEALTHCHANNEL.COM, INC.
           (Name of small business issuer as specified in its charter)

           DELAWARE                                            33-0728140
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification Number)

260 NEWPORT CENTER DRIVE, SUITE 250
NEWPORT BEACH, CALIFORNIA                                         92660
(Address of principal executive offices)                        (Zip code)

                                 (949) 631-8317
                                 --------------
                (Issuer's telephone number, including area code)

           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 $.001 per share

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

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

Registrant's revenues for its fiscal year ended December 31, 2000, were $10,765.
As of December 31, 2000, Registrant had 27,610,954 shares of its $.001 par value
Common Stock issued and outstanding with an aggregate market value of the common
stock held by non-affiliates  of $2,293,673.  This calculation is based upon the
closing sales price of $.09 per share on April 10, 2001.

Transitional Small Business Disclosure Format (check one).   Yes [ ]     No [X]

The following  documents  are  incorporated  herein by  reference:  Registration
Statement on Form SB-2, filed with the SEC on March 19, 2001.

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

PART I                                                                      PAGE
------                                                                      ----

Item 1    Description of Business                                              3

Item 2    Description of Property                                              8

Item 3    Legal Proceedings                                                    9

Item 4    Submission of Matters to a Vote of Security Holders                  9

PART II
-------

Item 5    Market for Common Equity and Related Stockholder
             Matters                                                          10

Item 6    Management's Discussion and Analysis                                11

Item 7    Financial Statements                                                14

Item 8    Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure                              14

PART III
--------

Item 9    Directors, Executive Officers, Promoters and Control Persons;
             Compliance with Section 16(a) of the Exchange Act                15

Item 10   Executive Compensation                                              17

Item 11   Security Ownership of Certain Beneficial Owners and
             Management                                                       18

Item 12   Certain Relationships and Related Transactions                      18

PART IV
-------

Item 13   Exhibits and Reports on Form 8-K                                    19

<PAGE>

                                     PART I

ITEM. 1   DESCRIPTION OF BUSINESS

     A.   BUSINESS DEVELOPMENT

          1.   FORM AND YEAR OF ORGANIZATION

     In March 1998, a market maker filed a 15c2-11  statement  with the National
Association  of  Securities  Dealers,  Inc.  and IVTX's  stock was  cleared  for
quotation  on the  Over-the-Counter  Bulletin  Board under the symbol  "IVTX" on
April 21, 1998.  In early 1999,  IVTX  management  determined  that the "public"
status of IVTX was detrimental to IVTX's  operations due to the time and expense
burdens of being a public company.  On April 14, 1999,  IVTX  transferred all of
its assets and  liabilities  based on majority  stockholder  approval to a newly
formed  private  company,   Innovative  Tracking   Solutions,   Inc.,  a  Nevada
corporation.

     In June 1999,  IVTX met the  management  of BioLogix,  Inc.  BioLogix was a
diversified  public  company  which  owned  a  number  of  assets,  including  a
consumer-based  health care website located at  http://www.thehealthchannel.com.
IVTX and BioLogix each reorganized as follows:

     o    In July 1999 IVTX  completed  a 28.2 for 1 forward  stock  split.  The
          officers of IVTX were paid  $250,000 cash in exchange for their shares
          for the purpose of financing the  operation of the IVTX assets,  which
          had been transferred to a private corporation in April 1999.

     o    The other 36 IVTX  shareholders  were provided with the alternative of
          either  retaining two of their post-split IVTX shares and contributing
          the balance to an exchange  pool (as  discussed  more fully  below) or
          exchanging their shares for shares in Innovative  Tracking  Solutions,
          Inc., a Nevada corporation,  the privately held corporation into which
          the IVTX operating assets had been  transferred.  Thirty-five of these
          36 IVTX  shareholders  elected to retain two shares and contribute the
          balance to the exchange pool.

     o    In July 1999 the Internet website and associated technology located at
          www.thehealthchanel.com  were  transferred by BioLogix,  Inc. to IVTX.
          The name of IVTX was changed to thehealthchannel.com

     o    The  BioLogix  shareholders  were  provided  with the  alternative  of
          retaining their BioLogix shares or retiring their BioLogix shares,  on
          a one for one basis,  in  exchange  for IVTX shares  contained  in the
          exchange   pool  (which  as  noted  above  had  changed  its  name  to
          TheHealthChannel.com).   There   were   approximately   800   BioLogix
          shareholders and  approximately 650 of these  shareholders  elected to
          exchange their BioLogix shares for THCL shares.

     On  November  17,  2000,  the  Company  changed  its symbol to THCH.  It is
currently quoted on the over the counter market.

          2.   ANY BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING

     Not Applicable.

                                       3
<PAGE>


          3.   ANY MATERIAL RECLASSIFICATION, MERGER, CONSOLIDATION, OR PURCHASE
OR SALE OF A SIGNIFICANT AMOUNT OF ASSETS NOT IN THE ORDINARY COURSE OF BUSINESS

     All material  reclassifications,  mergers,  consolidations  are outlined in
section (1) Form and Year of Organization.

     B.   BUSINESS OF ISSUER

          1.   PRINCIPAL PRODUCTS AND THEIR MARKET

     As of  July  1999 we have  focused  exclusively  upon  the  development  of
business  strategies and acquisition of existing  operations,  which satisfy the
following three-part test:

     o    Is the  business  strategy/acquisition  candidate  in  the  healthcare
          industry which may be controlled by us?
     o    Does  implementation of the Internet  materially  improve the business
          strategy/acquisition candidate?
     o    Can the proposed plan generate  projected  revenues  within six months
          and a return on our investment  within twelve months of the deployment
          of our capital?

     We believe that the following  discussion of our business plan provides the
infrastructure  that is now prepared to efficiently deploy a substantial capital
raise  into the  healthcare  Internet  sector.  Our plans  diversify  among both
healthcare industry consumers and healthcare industry professionals.

PRODUCTS MARKETED TO HEALTHCARE PROFESSIONALS

     We have focused our product  development  efforts in  identifying  Internet
based products and services which will increase the  productivity  of healthcare
professionals by either automating traditional  paper-based or manual processes,
or by  providing  additional  revenue  sources for the  healthcare  professional
community.

     We are currently  developing  three products  specifically  directed toward
physicians:

     o    Our revenue  sharing  program with the Institute for Medical  Studies,
          Inc., a continuing medical education company;

     o    The Physicians  Automated  Attendant,  a software system which will be
          integrated  into  our  internet  site,   accessible  through  wireless
          portable  devices,  automating  the process of drug  prescription  and
          insurance billing; and,

     o    Physician Pro Care obesity program.

     Thehealthchannel.com  is  contemplating  entering  into a  revenue  sharing
agreement with the Institute of Medical  Studies to exchange  Internet links and
to jointly create Internet continuing education programs.

     According to their  management,  the Institute for Medical  Studies has for
more than ten years provided  physicians  throughout  the world with  continuing
medical  education  programs  involving  virtually  every  area  of the  medical
practice,  from new surgical  techniques to  certifications  for prescribing new
drugs.  These programs have  typically been provided in a traditional  classroom
setting requiring physicians to travel to the class's location.  The preparation
of these classes involves the development of extensive  materials and the hiring
of a number of prominent  physicians  in each field.  Classes will be both "real
time" allowing Internet participants to interact with the presenter,  as well as
archived,  allowing  physicians to view classes previously  provided.  Providing
such classes over the Internet involves  extremely new technologies and business
models.  There is no assurance  that we will  successfully  provide such classes
over the  Internet  or if we are  successful  in  providing  such  classes  that
physicians will regularly access these classes through our Internet site, rather
than  continue  to  attend  traditional   classroom   presentations.   To  date,
thehealthchannel.com  has not offered any such classes,  nor has it received any
revenues from the agreement.

                                       4
<PAGE>

     We  are  also  developing  a  web-based  product  entitled  the  Physicians
Automated Attendant. This product is at an early stage of development.  However,
it is our  intention  that this  software  system would be installed on wireless
devices  which shall  access our website  providing  patient  prescriptions  and
adjudication of insurance claims.  We anticipate that the initial  prototypes of
this  product will be completed  during the first  quarter of the year 2001.  We
believe that there are a number of  companies  developing  products,  which will
directly compete with the Physicians  Automated Attendant.  Further,  since this
product  involves  newly  deployed  technology,  there is no assurance  that the
technology  will  be  successfully  developed  or  that  if it  is  successfully
developed,  that physicians will utilize such technology at a level that will be
financially practicable for our business plan.

     Medical   professionals   are   embracing   handheld   devices   to   write
prescriptions,  access drug  databases,  remotely access and manage front office
operations and  communicate  more  effectively  with  patients,  staff and other
health care providers.  No company is currently providing medical  professionals
with up to the minute news and  information  about the  profession  and/or their
medical specialty.

     Physician  Pro Care is one of the  leading  professional  obesity  programs
designed  for  people  who  are  clinically  obese  (50  lbs.  overweight).  The
supplemental  products  that are offered as part of the program  will be further
distributed  through our website. It is anticipated that this can be significant
revenue  enhancement due to the increased  exposure  related to the distribution
through the Internet.

HEALTHCARE INDUSTRY CONSUMER PRODUCTS

     The centerpiece of our consumer products strategy is our website located at
www.thehealthchannel.com.  We have engineered our website  completely  in-house,
through the efforts of our web design team and in close  collaboration  with new
content and database integration  partners.  The site provides increased ease of
navigation,  enhanced  personalization,  and  interaction  through  on-line chat
communities, increased ad and sponsorship banner space and healthcare management
via the  "Conditions & Symptoms"  research tool. The site focuses on alternative
care as well as  traditional  medicine and provides  offerings  for consumer and
professional  users.  The site was built  utilizing the latest hardware and back
end  systems  that have been  tested and  configured  for  optimal  performance,
reliability,  stability and  efficiency.  We have entered into an agreement with
NewsEdge,  to provide eHealth content  consisting of  approximately  90 articles
daily, which are added to  thehealthchannel.com's  growing content database. Our
agreement  requires  that we pay NewsEdge one  installment  of $15,000.  We have
entered into an agreement with Integrative  Medicine, to provide various eHealth
content databases and weekly medical-alert  newsletters.  Our agreement requires
that  we  pay  Integrative   Medicine  an  annual  fee  of  $80,000  in  monthly
installments  of $6,667 each. To date, we have made three  installment  payments
totaling  $20,001.  We have  renegotiated  this agreement to decrease the amount
owed on a monthly  basis to $5,000  per month  commencing  February  1, 2001 and
continuing until June 30, 2002.

     We have entered into an agreement with  EarthLink.com,  a general  Internet
portal, to provide ready access to our site for EarthLink  subscribers  clicking
the  healthcare  heading on the EarthLink  portal.  Our agreement with EarthLink
provides  for a  one-year  commitment  and  requires  that we pay  EarthLink.com
$36,000  in four  installments  of $9,000  each.  To date,  we have  made  three
installment    payments   to    EarthLink.com    totaling    $27,000.    Lastly,
thehealthchannel.com has an arrangement with the National Institute of Health to
incorporate,  publish and  "private  label"  content and content  links from the
National  Library of Medicine's  MEDLINEplus  web site.  Our agreement  with the
National Institute of Health requires no payment of money.

     We also develop  health-related  content and programming for the World Wide
Web targeted at consumer  access  vis-a-vis  the  Internet,  web-TV and/or other
means of network access.

     We intend to enter into  strategic  alliances  and business  relationships.
These come in many different forms. For example, medical education,  alternative
medicine,  pharmacy,  library, and journals may enter into relationships with us
to provide  information  to our web site. We currently  have such  relationships
with NewsEdge and Integrative Medicine as discussed above.

                                       5
<PAGE>

     We also expect to have numerous  relationships  with third party e-commerce
companies  offering their products and services to  thehealthchannel.com  users.
This will either be through  direct  advertising  of the third party  e-commerce
site on  thehealthchannel.com  site or through a commission agreement whereby we
would  receive a  commission  for any  product  purchased  from the third  party
e-commerce site by  thehealthchannel.com  user. In this regard,  we have entered
into eight  affiliate  agreements  with other health  oriented  websites such as
vitamins.com and  mothernature.com.  These  agreements  provide us with revenues
(ranging  from 10% to 20% of the sale) in the event users are  introduced to our
affiliate  sites  through our website and products or services  are ordered.  We
have only recently  commenced  these affiliate  relationships  and have received
only a nominal amount of revenue as of the date of this prospectus.  As a result
of the recent  commencement of these  relationships,  it would be speculative to
forecast any future sales or sales growth.

     On September 9, 1999,  we entered into an agreement  with 24/7 Media,  Inc.
24/7 operates a network of Internet  websites (the "24/7  Network") for which it
solicits   advertisers,   advertising   agencies,   buying  services  or  others
("Advertisers")  regarding  the  placement  of  advertising  banners and similar
devices and  sponsorships  ("Advertising")  for display on pages,  screens,  and
other  segments or spaces on Internet  websites.  We granted 24/7 the  worldwide
exclusive right to sell all  Advertising on the Company's  website for a term of
one year.  For all  advertising  revenues  generated by 24/7, we will pay 24/7 a
percentage based upon the number of impressions on our website  according to the
following chart:

     Number of Impressions                      Percentage Retained by 24/7
     Delivered in Preceding Month               for Current Month
     ----------------------------               -----------------
     0 to 2,000,000                             50%
     2,000,000 to 2,999,999                     45%
     3,000,000 to 4,999,999                     40%
     5,000,000 to 14,999,999                    35%
     15,000,000+                                30%

     To date, we have  generated  only minimal  revenue from this agreement with
24/7. We have begun accruing  advertising  revenue from the 24/7 agreement since
July  2000.  We  have  received  additional  revenue  from  website  development
projects.

     We have  implemented an "anywhere,  anytime"  strategy whereby we intend to
attract a segment of the market that may not be  reachable  through  traditional
browser limited websites. Our website is already available to Palm and Pocket PC
device users through http://www.avantgo.com and to wireless Palm devices through
http://www.palm.net as well as  http://www.omnisky.com.  We intend to extend our
reach in this  market  by  launching  WAP  (wireless  application  protocol)  or
web-enabled  phone  applications in the coming weeks. We are the only healthcare
website  to receive a four star  rating on the  palm.net  web site.  A four star
rating is only awarded to web sites that are  considered to be "good" in meeting
3Com's criteria (see http://beta.palm.net/apps/users/main/ 1,10190,00. html/
?ACTION=Rating) (see http://beta.palm.net/apps/users/download/
1,1051,1477,00.html).

     The  emergence of the Internet as a  significant  communications  medium is
driving the  development  and adoption of web content and commerce  applications
that offer both convenience and value to consumers,  as well as unique marketing
opportunities  and reduced  operating  costs to  business.  A growing  number of
consumer  and trade  customers  have begun to conduct  business on the  Internet
including  paying  bills,  booking  airline  tickets,   trading  securities  and
purchasing  consumer  goods such as personal  computers,  consumer  electronics,
compact disks, books, groceries and vehicles.  Moreover, online transactions can
be faster,  less  expensive  and more  convenient  than  transactions  conducted
through a human intermediary.

          2.   DISTRIBUTION

     The services and products of the Company are  distributed  by its employees
and independent  contractors,  either at the customer's site or via the Internet
or wireless strategies.

                                       6
<PAGE>

          3.   STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT.

     Any and all new services are  discussed in section (1)  Principal  Products
and their markets above.

          4.   COMPETITION

The online  commerce  industry,  particularly on the Internet,  is new,  rapidly
evolving and intensely competitive,  which we expect to intensify in the future.
Barriers to entry are minimal,  allowing  current and new  competitors to launch
new websites at a relatively low cost. We currently or potentially  compete with
other  companies  which have health care  websites.  These  competitors  include
InteliHealth, OnHealth, Web MD, Koop.com, and YourHealth.com.

     We believe that the principal  competitive factors in this market are brand
name recognition,  wide selection,  personalized  service,  ease of use, 24-hour
accessibility,  customer service,  convenience,  reliability,  quality of search
engine  tools,  and quality of  editorial  and other site  content.  Many of our
current and  potential  competitors  have  longer  operating  histories,  larger
customer  bases,  greater  brand  name  recognition  and  significantly  greater
financial, marketing and other resources than we do. In addition, other websites
may be acquired  by,  receive  investments  from or enter into other  commercial
relationships with larger,  well-established and well-financed  companies as use
of the Internet and other online services increases.  Certain of our competitors
may be able to devote greater resources to marketing and promotional  campaigns,
and devote  substantially more resources to website and systems development than
we do.

     Increased  competition  may result in reduced  operating  margins,  loss of
market share and a diminished franchise value. There can be no assurance that we
will be able to compete successfully against current and future competitors, and
competitive  pressures  that we face may have a material  adverse  effect on our
business, prospects, financial condition and results of operations. Further as a
strategic response to changes in the competitive environment,  we may, from time
to time, make certain service or marketing  decisions or acquisitions that could
have a material adverse effect on its business,  prospects,  financial condition
and  results of  operations.  New  technologies  and the  expansion  of existing
technologies  may  increase  the  competitive  pressures  on  us.  In  addition,
companies  that control  access to  transactions  through  network access or Web
browsers  could  promote  our  competitors  or charge us a  substantial  fee for
inclusion.

     We face  well-financed  competition  from other companies  competing in the
health sector on the Internet, such as Healtheon, WebMD, and Dr. Koop. Recently,
Healtheon  and  WebMD  merged.  There  is no  guarantee  that we will be able to
compete  against  these  companies or any other  companies  that might enter the
Internet health sector.

          5.   SOURCES AND AVAILABILITY OF RAW MATERIAL AND PRINCIPAL SUPPLIERS

     The content for the Company's web site comes from three primary sources:

          o    HTML links.  Programmed  medical  content links from the Infoseek
               search engine (ultraseek).
          o    Strategic  Alliances  and Business  Relationships.  These come in
               many  different  forms.  The  Company  expects  to have  numerous
               relationship with third party e-commerce companies offering their
               products and services to  thehealthchannel.com  users.  This will
               either  be  through   direct   advertising  of  the  third  party
               e-commerce  site  on  thehealthchannel.com   site  or  through  a
               commission   agreement   whereby  the  Company  would  receive  a
               commission  for  any  product  purchased  from  the  third  party
               e-commerce  site by  thehealthchannel.com  user.  In this regard,
               there are presently no existing relationships.
          o    Original content: The Company has a diverse, experienced board of
               and advisors who provide  original content for the Company's site
               in their areas of expertise.

          7.   DEPENDENCE ON MAJOR CUSTOMERS

     Not applicable.

                                       7
<PAGE>

          8.   EFFECT OF ANY EXISTING OR PROPOSED GOVERNMENT REGULATIONS

     The Company is not currently  subject to direct  regulation by any domestic
or foreign governmental agency, other than regulations  applicable to businesses
generally,  and laws or  regulations  directly  applicable  to  access to online
commerce.  However, due to the increasing popularity and use of the Internet and
other online services,  it is possible that a number of laws and regulations may
be adopted with respect to the Internet or other online services covering issues
such  as  user  privacy,   pricing,   content,   copyrights,   distribution  and
characteristics  and  quality of  products  and  services.  The  adoption of any
additional  laws or regulations may decrease the growth of the Internet or other
online  services,  which could,  in turn,  decrease the demand for the Company's
products and services and increase  the  Company's  cost of doing  business,  or
otherwise have a material adverse effect on the company's  business,  prospects,
financial  condition and results of operations.  Moreover,  the applicability to
the Internet and other online services of existing laws in various jurisdictions
governing issues such as property  ownership,  sales and other taxes,  libel and
personal  privacy  is  uncertain  and may take  years to  resolve.  Any such new
legislation  or  regulation,  the  application  of  laws  and  regulations  from
jurisdictions  whose laws do not currently apply to the Company's  business,  or
the  application  of existing  laws and  regulations  to the  Internet and other
online services could have a material adverse effect on the Company's  business,
prospects, financial condition and results of operations.

     Permits or licenses may be required from federal, state or local government
authorities  to operate on the  Internet.  No  assurances  can be made that such
permits or licenses  will be  obtainable.  The Company may be required to comply
with future national  and/or  international  legislation and statutes  regarding
conducting commerce on the Internet in all or specific countries  throughout the
world.

          9.   RESEARCH AND DEVELOPMENT COSTS.

We are currently  conducting  product  research and  development in the areas of
general health  content,  broadening and  strengthening  our health  information
delivery, as well as conducting research and development in the areas of premier
health product offerings (deep verticals) and mobile and wireless communication.
In addition  we will  continue  to develop  our  business-to-business  goods and
services products.  Since the Company began operations through December 31, 2000
it has spent  approximately  $800,000 on the  research  and  development  of its
proprietary technology.  The revenues the Company achieve will be primarily from
strategic alliances and direct customer revenues.  Fees generated,  while paying
directly for research and technology  costs accrued to date,  will also fund the
operations  of  the  Company,  which  includes  funding  on-going  technological
development.

          10.  COST  AND  EFFECTS  OF  COMPLIANCE  WITH  ENVIRONMENTAL  LAWS AND
REGULATIONS

     thehealthchannel.com's  business does not involve the use of materials in a
manufacturing process where such materials are likely to result in the violation
of any existing  environmental  rules and/or regulations.  Further,  the Company
does not own any real  property  which would lead to  liability  as a landowner.
Therefore,  the  Company  does not  anticipate  any  costs  associated  with the
compliance of environmental laws and regulations.

          11.  EMPLOYEES

     As of the date hereof, we have five full-time  employees and five part-time
employees. We hire independent contractors on an "as needed" basis only. We have
no collective  bargaining  agreements  with our  employees.  We believe that our
employee  relationships  are  satisfactory.  Long term,  we will attempt to hire
additional employees as needed based on our growth rate.

                                       8
<PAGE>

ITEM 2 - PROPERTIES
-------------------

     Our main  administrative  offices are located at 260 Newport  Center Drive,
Suite 250,  Newport Beach,  California  92660,  consisting of 1,284 square feet,
with a monthly  lease  payment  of $3,852  per  month,  pursuant  to a  sublease
agreement.

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

     The Company is not a plaintiff or a defendant in any legal proceedings.

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

     The Company held their annual meeting of  shareholders on October 12, 2000.
At that meeting and by proxy, a quorum was present and the Company  received the
following votes on its proposals:

<TABLE>
<CAPTION>
           Proposal                              Yes         No        Abstain    Shares Voted     Result
           --------                              ---         --        -------    ------------     ------

Election of Board of Directors
<S>                                          <C>          <C>          <C>         <C>            <C>
     Mr. Donald J. Shea                      45,815,507   0            948,972     46,764,479     Yes (98%)
     Mr. Thomas Lonergan                     45,788,107   0            976,372     46,764,479     Yes (98%)
     Dr. Balazs Imre Bodai                   46,117,907   0            646,572     46,664,479     Yes (99%)
     Mr. Jeffrey H. Berg                     46,089,107   0            675,372     46,667,479     Yes (99%)
     Dr. Joseph Song                         45,993,467   0            771,012     46,667,479     Yes (98%)

Approval of the 3:1 reverse stock split      43,061,359   3,520,364    182,756     46,667,479     Yes (92%)

Increase the number of authorized shares
Of Common Stock                              43,877,979   2,579,734    306,766     46,667,479     Yes (94%)

Ratification of 2000 Stock Option Plan       42,947,996   3,064,985    751,498     46,667,479     Yes (92%)

Appointment of Stonefield, Josephson Inc.    45,565,699     191,678  1,007,102     46,764,479     Yes (97%)
As the Company's independent public
Accountants for the fiscal  year ending
December 31, 2000
</TABLE>

                                       9
<PAGE>

                                     PART II

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

     (A)  MARKET INFORMATION

     The  Company's  Common  Stock is currently  quoted on the  Over-The-Counter
Market under the Symbol  "THCH".  Set forth below is the trading  history of the
Company's  Common Stock  consisting of the closing price of the Company's common
stock as of the last day of the month of the quarter  indicated,  without retail
mark-up, mark-down or commissions and the inter-dealer quotations over the month
indicated, all as displayed by Financial Web at www.financialweb.com:

================================================================================
          1999              CLOSING PRICE       HIGH RISK           LOW BID
          ----              -------------       ---------           -------
July 1 - September 30       0.75                0.87                0.75
October 1- December 31      0.48                0.53                0.41
          2000
          ----
January 1 - March 31        0.55                0.58                0.52
April 1 - June 30           0.29                0.31                0.24
July 1 - September 30       0.26                0.26                0.26
October 1- December 31      0.07                0.07                0.06
          2001
          ----
January 1 - March 31        0.09                0.09                0.09
================================================================================

     The above  quotations are  inter-dealer  quotations,  and the actual retail
transactions may involve dealer retail mark ups,  markdowns,  or commissions for
market makers of the Company's stock.

     Except for free  trading  shares,  all  shares  issued by the  Company  are
"restricted  securities"  within  the  meaning  of Rule 144  under the 1933 Act.
Ordinarily,  under Rule 144, a person holding restricted securities for a period
of one year may, every three months, sell in ordinary brokerage  transactions or
in  transactions  directly with a market maker an amount equal to the greater of
one percent of the Company's then-outstanding Common Stock or the average weekly
trading volume during the four calendar  weeks prior to such sale.  Future sales
of such shares and sales of shares  purchased  by holders of options or warrants
could have an adverse effect on the market price of the Common Stock.

     In the absence of a security  being quoted on the NASDAQ stock  market,  or
the Company  having  $2,000,000 in net tangible  assets,  trading in the Company
would  be  covered  by  Rule  15c2-6  of the  Exchange  Act for  non-NASDAQ  and
non-exchange  listed securities.  Under such rule,  broker/dealers who recommend
such  securities to persons  other than  established  customers  and  accredited
investors  (generally  institutions  with  assets  in excess  of  $5,000,000  or
individuals  with a new  worth in  excess  of  $1,000,000  or an  annual  income
exceeding  $200,000 or $300,000,  jointly with their spouse) must make a special
written suitability  determination for the purchaser and receive the purchaser's
written  agreement to a transaction  prior to sale.  Securities  are also exempt
from this rule if the market price is at least $5.00 per share.

     The  Securities  Enforcement  and Penny Stock  Reform Act of 1990  requires
additional  disclosure  related to the market for penny stocks and for trades in
any stock  defined  as a penny  stock.  Under SEC  rules,  "penny  stock" is any
security that has a market price or exercise price of less than $5.00 per share.
In addition,  unless  exempt,  the rules require the  broker/dealer  to deliver,
prior  to any  transaction  involving  a  penny  stock,  a  disclosure  schedule
explaining  important  concepts  involving the penny stock market, the nature of
such  market,  terms  used in such  market,  the  broker/dealer's  duties to the
customer,  a toll-free  telephone number for inquiries about the broker/dealer's
disciplinary history, and the customer's rights and remedies in case of fraud or
abuse in the sale. The broker/dealer must disclose  commissions  payable to both
the broker/dealer and the registered representative,  current quotations for the
securities, and

                                       10
<PAGE>

if the broker/dealer is the sole market-maker.  Finally, monthly statements have
to be sent  disclosing  recent price  information  for a penny stock held in the
account and information on the limited market in penny stocks.

     These rules have a substantial  effect on the  liquidation of the Company's
common stock.

     (B)  DIVIDENDS

     The Company has not paid any  dividends  on its Common  Stock.  The Company
currently intends to retain any earnings for use in its business,  and therefore
does not anticipate paying cash dividends in the foreseeable future.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS
---------------------------------------------

The following  discussion  regarding our financial  statements should be read in
conjunction with our financial statements included herewith.

OVERVIEW

     We are engaged in the business of providing healthcare information over the
Internet.

RESULTS OF OPERATIONS

     The  following  table  sets  forth,  for the  periods  indicated,  selected
financial information:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                                      Period from Inception
                               Year Ended           Year Ended        (September 4, 1996)
                            December 31, 1999    December 31, 2000    to December 31, 2000
-------------------------------------------------------------------------------------------
<S>                         <C>                 <C>                   <C>
Total revenue               $   -0-             $   10,765            $     10,765
-------------------------------------------------------------------------------------------
Cost of revenue             $   -0-             $   -0-               $        -0-
-------------------------------------------------------------------------------------------
Gross profit                $   -0-             $   10,765            $     10,765
-------------------------------------------------------------------------------------------
General, administrative,
 and selling expenses       $ (3,460,728)       $   (3,884,782)       $  (7,345,510)
-------------------------------------------------------------------------------------------
Loss from continuing
 operations                 $ (3,460,728)       $   (3,874,017)       $  (7,334,745)
-------------------------------------------------------------------------------------------
Loss on discontinued
 operations                 $  (466,264)        $   ( - )             $  (2,213,648)
-------------------------------------------------------------------------------------------
Loss before taxes           $ (3,926,992)       $(3,874,017)          $  (9,548,393)
-------------------------------------------------------------------------------------------
Taxes on income             $   -0-             $   -0-               $    -0-
-------------------------------------------------------------------------------------------
Net loss                    $ (3,926,992)       $(3,874,017)          $  (9,548,393)
-------------------------------------------------------------------------------------------
</TABLE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS  FISCAL YEAR ENDED  DECEMBER 31, 2000 COMPARED TO DECEMBER
31, 1999.

REVENUE

     We are a  development  stage  company.  Revenues  for the fiscal year ended
December 31, 2000 of $10,765 were derived from  advertising  associated with our
wireless strategy compared to no revenues for the fiscal year ended December 31,
1999.

                                       11
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses amounted to $3,884,782 for the
year ended  December 31, 2000 as compared to $3,460,728  in 1999.  This included
expenses for website  development of $450,000 in 2000 as compared to $196,000 in
1999,  depreciation and amortization  expense of $333,830 in 2000 as compared to
$135,230  in 1999,  rent of  $45,000  in 2000 as  compared  to  $1,000  in 1999,
non-cash  stock  based  compensation  of  $1,290,671  in  2000  as  compared  to
$2,611,423 in 1999 and  compensation  of $477,000 in 2000 as compared to $96,000
in 1999. The increases  reflect our upgraded  website which was launched in July
2000, and the continued development of our wireless strategy, renting of our new
facility effective April 2000, and an increase in staffing as we implemented our
planned growth and development  strategy.  Additionally,  the following expenses
were also recorded  during the year ended  December 31, 2000,  (a) an expense of
approximately  $345,000 in interest  was  recorded in relation o our bridge loan
financing in 2000,  of which  $330,835  was non-cash  related and (b) a non-cash
expense of  approximately  $300,000 was  recorded as  settlement  of  litigation
expense related to Michael Grandon.

LOSS FROM OPERATIONS

     We  incurred  a loss  from  operations  of  $3,874,017  for the year  ended
December 31, 2000 compared to a loss of $3,460,728  for 1999.  The operations of
our predecessor company,  Innovative Tracking Solutions  Corporation ("IVTX") in
1999 are presented as discontinued operations as a result of the transfer of its
assets and liabilities to a private company.  The operations of the old IVTX are
not related to the operations of thehealthchannel.com business going forward.

NET LOSS

     We had a net loss of  $3,874,017,  for the year ended  December  31,  2000,
compared to a loss of $3,926,992 in 1999.

LIQUIDITY AND CAPITAL RESOURCES

     Since our  inception,  we have  primarily  funded our capital  requirements
through private equity infusions. Commencing in September of 1999 and closing in
August 2000, we conducted a private offering,  to accredited  investors only, of
units,  each unit  consisting  of one share of our common  stock and one warrant
exercisable for a term of two years. All shares  purchased in this offering,  as
well  as all  shares  underlying  warrants  purchased  in  this  offering,  have
piggyback   registration  rights  and  are  entitled  to  be  included  in  this
prospectus.  As adjusted  for our one for three  reverse  split,  we  originally
priced  this  offering  at $2.25  per unit  with a $2.25  exercise  price on the
warrants.  However, the price of our publicly traded stock dropped precipitously
since the  beginning of this private  offering and we  subsequently  offered the
units at lower prices.

     Company management has raised net proceeds of $1,410,780 under this private
offering. No NASD-registered broker-dealers were involved in this offering. This
private offering is exempt from the registration requirements pursuant

                                       12
<PAGE>

to Section 4(2) of the Securities Act of 1933, as amended.

     We obtained a $30  million  equity  line from  Swartz  Private  Equity LLC,
subject to registration with the SEC and governed by a percentage of our trading
volume.  This equity line was governed by several  agreements with Swartz.  As a
result  of our  conversations  with the SEC,  we  determined  that it is  highly
unlikely  that  the  Swartz  transaction  would  clear  comments.  As  such,  we
determined  that it as not in the best  interest of the company to continue with
this  transaction and have terminated the agreement with Swartz and canceled the
warrants  provided to Swartz as part of the  transaction.  We remain  willing to
work with Swartz on future  transactions should they be able to demonstrate that
their transaction structure could pass scrutiny. Nonetheless, termination of the
Swartz agreement,  according to its terms,  requires the payment of a "break-up"
fee of  $200,000.  While we believe  that no fee is due Swartz  and, we have the
legal right to cancel the  warrants and  terminate  the  agreements,  Swartz may
attempt to pursue  remedies  against the company.  While we firmly  believe that
Swartz would not prevail in any action  against us,  there is no guarantee  that
they will not recover substantial damages against us. These damages at a minimum
would include the break up fee and an order to reissue the  warrants.  Given the
current  lack of revenues and funding  available to the company,  a damage award
could have an adverse effect on our business operations.

     We received a loan in the amount of $250,000 from Laguna  Pacific  Partners
L.P., a Delaware  limited  partnership.  This loan is made pursuant to a secured
note that bears  interest  at the rate of 6% and is  payable  on the  earlier of
February 3, 2001 or the effective date of this prospectus.  The due date of this
loan has been extended to the earlier of May 1, 2001,  or the effective  date of
this prospectus.  The loan is secured by all of our assets. In consideration for
making this loan to us, Laguna  Pacific  Partners  received a warrant for common
stock equal to the quotient of $250,000  divided by the closing bid of our stock
immediately  preceding the effective date of this  prospectus.  The term of this
warrant is five years and the exercise price is $1 in the aggregate. The warrant
agreement  contains  terms,  which increase the number of shares  underlying the
warrants commencing  February 1, 2001 at the rate of 10% per month,  compounding
on a monthly basis, until the effective date of our registration statement.  The
number of shares being registered under this registration statement includes the
monthly increase for February, March and April, 2001.

     On August 18, 2000,  we received a loan in the amount of $250,000  from Les
Dube and Irene Dube. This loan is made pursuant to a note,  which bears interest
at the rate of 6% and is payable  on the  earlier of  February  18,  2001 or the
effective date of this  prospectus.  The due date of this loan has been extended
to the earlier of May 23, 2001, or the effective date of this  prospectus.  This
loan was issued in  consideration  for  526,556  shares of common  stock.  These
shares are being  registered in this  prospectus,  and,  upon  repayment of this
loan; these shares are to be retained by Les Dube. On the effective date of this
prospectus, Les Dube may sell these shares.

     As of  December  31,  2000,  we  had  outstanding  current  liabilities  of
$1,639,857  of which  $788,349 has been approved by the Board of Directors to be
settled by  issuance  of stock.  The  balance  of  $856,508  consists  mainly of
accounts  payable  of  approximately  $145,000,  accrued  professional  fees  of
approximately  $143,000,  of which  $95,000 will be satisfied by the issuance of
common  stock,  and accrued  officers'  salaries  $190,000.  All officers of the
company have agreed to defer their compensation or receive their compensation in
the form of equity until such time as the company has the  financial  ability to
pay them.  It is  anticipated  that loans payable will be repaid from online and
wireless revenue.  Our current ratio is .01. After adjusting for items that will
be satisfied by stock  issuance and loans payable,  the new current  liabilities
would be $273,672 resulting in a current ratio of .09.

     We recognize that the company must generate additional  resources to enable
it to continue  operations.  Our plans include the sale of additional equity and
debt  securities  to various  private  equity funds  ranging from  $1,000,000 to
$15,000,000.  In addition, with infusion of capital from equity funding, we plan
to generate  significant  revenues resulting in positive cash flows by year-end.
However,  no  assurance  can be  given  that we will be  successful  in  raising
additional capital. Further, there can be no assurance, assuming we successfully
raise additional  funding,  that we will achieve  profitability or positive cash
flow.  If  management  is  unable  to  raise  additional  capital  and  expected
significant revenues do not result in positive cash flow, we will not be able to
meet our obligations and will have to cease operations.

     We do not  believe  that  inflation  has had a  significant  impact  on our
operations since our inception.

                                       13
<PAGE>

     FUTURE PLAN OF OPERATION

     The  company's  overall plan of operations  for the next 12 months  include
significant website development in four primary areas:

     a)   Further  develop,  promote  and  increase  product  offerings  in  its
          industry  leading   "Anywhere,   Anytime  (TM)"  mobile  and  wireless
          strategy.  Thehealthchannel.com  was a first  time mover in the health
          sector with this technology application.
     b)   Broaden  overall  content  offerings  in the areas of  general  health
          content and delivery of health goods and services.
     c)   Deliver  a number  of "deep  vertical"  products  in  specific  health
          topics.
     d)   Implement  the   business-to-business   revenue  generating   products
          covering a number of health areas  including some unique  products not
          currently in the marketplace.

     The  company's  overall  plan of  operation  also  includes  completion  of
strategic acquisitions for the purposes of revenue/profit  enhancement,  content
development, and increased traffic to the website.

     We are currently  conducting  product research and development in the areas
of general health content,  broadening and strengthening our health  information
delivery, as well as conducting research and development in the areas of premier
health product offerings (deep verticals) and mobile and wireless communication.
In addition  we will  continue  to develop  its  business-to-business  goods and
services products.

     We recently  purchased  (through the inclusion of our new operations center
lease) the necessary  infrastructure to grow and reduce our operational costs by
bringing a majority of our software development in-house.

     We expect to add approximately 5-10 new employees in the next fiscal year.

PART II - OTHER INFORMATION

ITEM 7. FINANCIAL STATEMENTS
----------------------------

     The Financial  Statements that constitute Item 7 are included at the end of
this report beginning on Page F-1.

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

     The Company has  engaged  Stonefield,  Josephson,  Inc.,  certified  public
accountants,  1620 26th Street, Suite 400 South, Santa Monica,  California 90404
("Stonefield")  as its  independent  accountants  for  all  accounting  purposes
related  to the  Company's  business  operations  and  the  Company's  reporting
requirements.  Stonefield  replaced  Singer Lewak  Greenbaum &  Goldstein,  LLP,
Certified  Public  Accountants  &  Management  Consultants,   as  the  Company's
principal accountants as of November 29, 1999 ("Singer Lewak") for this purpose.
Singer  Lewak's report on the financial  statements of the Company  contained no
adverse opinion or a disclaimer of opinion,  nor was qualified or modified as to
uncertainty, audit scope, or accounting principles. The engagement of Stonefield
and termination of Singer Lewak was approved by the Board of Directors.

     On  July  28,  1999,  the  Company  engaged  Singer  Lewak  to  act  as its
independent  accountants for all accounting purposes related to the Registrant's
business operations and reporting requirements.  Singer Lewak replaced Mr. Roger
G. Castro, C.P.A. Mr. Castro's report on the financial statements of the Company
contained  no  adverse  opinion  or a  disclaimer  of  opinion,  or was  neither
qualified nor modified as to uncertainty, audit scope, or accounting principles.
The termination of Mr. Castro and engagement of Singer Lewak was approved by the
Board of Directors.

                                       14
<PAGE>

     Other than stated herein, during the Company's two most recent fiscal years
and any subsequent interim period preceding such registration,  declination,  or
dismissal, there were no disagreements with the former accountants on any matter
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing scope or procedure.

                                    PART III

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

     (A)  DIRECTORS AND EXECUTIVE OFFICERS

Our directors and officers are as follows:

     Name                      Age               Office
     ---------------------------------------------------------------------------
     Donald J. Shea            67        Chief Executive Officer, President, and
                                         Chairman of the Board of Directors

     Thomas Lonergan           50        Chief Operating Officer, Vice
                                         President, Secretary, Chief
                                         Financial Officer, and Director

     Balazs Imre Bodai,
     M.S., M.D.                45        Director

     Jeffrey H. Berg,
     MBA, Ph.D.                59        Director

     Joseph Song, M.D.,
     F.A.C.C.                  40        Director


DONALD J. SHEA,  PRESIDENT,  CHIEF  EXECUTIVE  OFFICER AND  CHAIRMAN.  From 1995
through 1997, Mr. Shea was Marketing  Consultant to Marketing Insights,  Inc., a
new product development Company in Princeton,  New Jersey.  Prior to that he was
President of Avonwood Capital Corporation, Philadelphia, Pennsylvania, a Venture
Capital/Management  Consulting  firm;  and  President of Brilliant  Enterprises,
Inc., Philadelphia,  Pennsylvania, a dental products manufacturer.  Mr. Shea was
also the former President and CEO of Clairol,  Inc., a Division of Bristol-Myers
Squibb and former Vice-President of Bristol-Myers Squibb.

THOMAS F. LONERGAN,  MA, CHIEF OPERATING  OFFICER,  VICE  PRESIDENT,  SECRETARY,
CHIEF FINANCIAL OFFICER, AND DIRECTOR.  Mr. Lonergan was the co-founder and Vice
Chairman of The IQ NOW Corporation, a deliverer of healthcare information on the
Internet  from 1992  through  1999.  Previously,  he was a Regional  Director of
Cardiology  for Tenet Medical  Group,  former  Director of Clinical  Services at
Downey Community Hospital,  and has been a hospital  administrator for 20 years.
For 11 years he has been an  instructor  and director of medical  technology  at
Coast  College.   Mr.  Lonergan  is  co-founder  of  the  American   College  of
Cardiovascular  Administrators.  He has an Associate of Arts (Pre-Medicine) from
Cerritos Junior College (1971),  a Bachelor of Science  (Pre-Medicine)  from the
University of  California,  Irvine  (1973),  and an Executive  Masters Degree of
Business Administration from Pepperdine University (1990).

                                       15
<PAGE>

BALAZS IMRE BODAI, M.D., DIRECTOR. From 1985 and continuing through the present,
Dr.  Bodai  is the  Chief  of  Surgery  at  Kaiser  Permanente  Medical  Center,
Sacramento,  California.  He is  also  President  of B and  B  Medical  Research
Technology,  Inc.,  Sacramento,  California;  an Associate Clinical Professor of
Surgery at the University of California at Davis; a Consultant to COAT,  Johnson
& Johnson,  Newark, New Jersey; and a Senior Consultant to Sontek Medical, Inc.,
Higham,  and  Massachusetts.  "Ernie"  holds a Bachelor of Science and Master of
Science  Degrees from the School of Medicine at the  University of California at
Los Angeles,  and a Doctor of Medicine  Degree from the University of California
at  Davis.  He is author  and  co-author  of over 120  scientific  and  clinical
publications in several of the leading medical journals, and author of a surgery
textbook.

JEFFREY H. BERG, PH.D.,  DIRECTOR.  Dr. Berg holds an MBA and Ph.D. in Chemistry
from New York  University.  From  September  1995 through the  present,  he is a
senior  research  analyst for M.H.  Meyerson & Co.,  Inc.  From 1991 through the
present,  he is the  President  of Health  Care  Insights.  Mr. Berg was Chicago
Corporation's  senior  medical  advisor from 1991 to 1992. Mr. Berg was security
analyst for William K.  Woodruff & Co. from 1990 to 1991 and  Vice-President  of
Research for J.C.  Bradford & Co. from 1987 to 1990.  From 1981 to 1987,  he was
Vice-President  of the Health Care Division of PA Consulting  Services,  Inc. of
London,  England,  specializing  in  international  technology  and new  product
surveillance,    venture   capital   investment,    acquisition   studies,   and
state-of-the-art  for diverse areas of health care.  During the 1970s,  Mr. Berg
developed  products and conducted  research for General Foods,  the Patient Care
Division of Johnson & Johnson Products,  Inc., the Consumer Products Division of
Ortho  Pharmaceutical  Corporation;  and staffed and  supervised  scientists and
engineers at the R&D  laboratories  for development of varied medical and health
care products  within the Johnson & Johnson family of companies.  Dr. Berg holds
several patents in the area of biosensor and disposable electrode technology. He
has published a number of articles on topics such as biosensors, cancer therapy,
biopharmaceuticals, drug infusion devices and industrial biotechnology. Dr. Berg
serves as a liaison with the investment banking and scientific communities.

JOSEPH SONG, M.D., F.A.C.C.,  DIRECTOR.  From 1994 through the present, Dr. Song
has his own practice in  Interventional  Cardiology.  From 1991 through 1994, he
was an Interventional  Cardiologist with Internal Medicine  Specialists  Medical
Group, Inc. He is a Lecturer and Moderator at Downey Foundation  Hospitals.  Dr.
Song is Clinical Assistant  Professor of  Medicine/Cardiology  at the College of
Osteopathic  Medicine of the Pacific in California  and a member of the Teaching
Staff of the Family Practice  Internship/Residency  Program at Rio  Hondo/Downey
Community  Hospital,  California.  He is  certified  by the  American  Board  of
Internal  Medicine and the American Board of Cardiovascular  Diseases.  Dr. Song
received an A.B. in Physics from Washington  University in St. Louis Missouri in
1982 and his M.D.  from  University of  Missouri-Columbia  School of Medicine in
1986.

     (B)  COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers  and  directors,  and  persons  who own more  than ten  percent  of the
Company's  Common  Stock,  to file reports of ownership and changes in ownership
with the Securities and Exchange  Commission  ("SEC").  Officers,  directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company  with copies of all Section  16(a) forms they file.  Based solely on
its  review  of  the  copies  of  such   forms   received   by  it,  or  written
representations from certain reporting persons, the Company believes that during
its 2000 fiscal year, all such filing  requirements  applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.

                                       16
<PAGE>

ITEM 10 - EXECUTIVE COMPENSATION
--------------------------------

     (A)  SUMMARY COMPENSATION

The  following  table and  attached  notes  sets forth the  compensation  of our
executive officers and directors during the last fiscal year.

<TABLE>
<CAPTION>
                                                                                               Long Term Compensation
                                                                              ------------------------------------------------------
                                          Annual Compensation                          Awards                        Payouts
                             ----------------------------------------------   ------------------------      ------------------------
                                                                              Restricted  Securities
Name and Principal                                             Other annual   Stock       Underlying        LTIP        All other
Position                     Year     Salary        Bonus      Compensation   Awards      Options/SARs      Payouts     Compensation
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>      <C>           <C>        <C>            <C>          <C>              <C>         <C>
Donald J. Shea, Chief        1999     -0-           -0-        None            32,000      -0-              None        None
Executive Officer(1)         2000     $144,000      -0-        None           486,957      -0-              None        None
------------------------------------------------------------------------------------------------------------------------------------
Thomas P. Lonergan, Chief
Operating Officer, Vice      1999     -0-           -0-        None            52,000      -0-              None        None
President, Chief Financial   2000      $144,000     -0-        None           486,957      -0-              None        None
Officer, Secretary
------------------------------------------------------------------------------------------------------------------------------------
All officers as a group (2   1999      -0-          -0-        None            84,000      -0-              None        None
persons)                     2000      $288,000     -0-        None           973,914      -0-              None        None
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES TO EXECUTIVE COMPENSATION
-------------------------------

     The  remuneration  described  in the table  does not  include  our cost for
benefits  furnished  to the named  executive  officers,  including  premiums for
health insurance, reimbursement of expenses, and other benefits provided to such
individual  that are extended in  connection  with the  ordinary  conduct of the
Company's business.  The value of such benefits cannot be precisely  determined,
but the executive  officers  named below did not receive other  compensation  in
excess of the lesser of $25,000 or 10% of such officer's cash compensation.

     During the 1999 fiscal year,  beginning July 28, 1999  (inception)  through
December 31, 1999, no Officer or Director  received any cash  consideration  for
salary,  nor any aggregate  remuneration for health  insurance and expenses,  in
excess of $40,000.

     During the 1999 fiscal year,  beginning July 28, 1999 through  December 31,
1999, even though their  employment  agreements  provide for salary on an annual
basis,  all  officers  agreed to forego  their cash  compensation  until we were
better financed.  During the 2000 fiscal year,  Thomas P. Lonergan received cash
compensation  of $60,000 and took the remainder of his salary in common stock in
lieu of cash. Mr. Shea took his full 2000 salary in stock in lieu of cash.

     (C)  COMPENSATION OF DIRECTORS

The Company's  By-laws state that Directors of the Company shall not receive any
stated salary for their services,  but, by resolution of the Board of Directors,
a fixed sum and expense of attendance,  if any, may be allowed for attendance at
each  regular  and  special  meeting  of the  Board of  Directors.  The  Company
maintains directors and officers liability  insurance.  To date, the Company has
not paid any fixed sum for expenses to board members for  attendance at Board of
Director meetings or in discharging their obligations as Board members.

                                       17
<PAGE>

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

           The  following  table  sets  forth  certain   information   regarding
beneficial  ownership  of our  Common  Stock  as of  December  1,  2000  by each
stockholder  known by us to be the beneficial owner of more than five percent of
the  outstanding  Common  Stock,  each of our  directors,  and all directors and
officers as a group.

                                            Shares of            Percent of
Name and Address                         Common Stock(1)          Class(2)
----------------                         ---------------          --------
Donald J. Shea(2)                             211,828                 *
Thomas P. Lonergan(2)                         742,003               2.7%
Balazs Imre Bodai, M.S., M.D.(2)              171,522                 *
Jeffrey H. Berg, MBA, Ph.D.(2)                155,133                 *
Joseph Song, M.D.(2)                          845,208               3.1%
All Officers and Directors
as a Group (5 persons)                      2,125,694               8.0%
---------------
*    Less than one percent

(1)  Except as otherwise  indicated,  we believe that the  beneficial  owners of
common stock listed above, based on information  furnished by such owners,  have
sole  investment  and voting  power  with  respect  to such  shares,  subject to
community property laws where applicable.  Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or investment
power with respect to  securities.  Shares of common stock subject to options or
warrants  currently  exercisable,  or  exercisable  within 60 days,  are  deemed
outstanding  for purposes of computing the percentage of the person holding such
options or warrants,  but are not deemed  outstanding  for purposes of computing
the percentage of any other person. Shares of Common Stock approved for issuance
but not yet issued is deemed outstanding.

(2)  c/o our  address:  260 Newport  Center  Drive,  Suite 250,  Newport  Beach,
California 92660.

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

     The  Company  believes  that  each of the  transactions  set  forth in this
section  were on terms  that were as  favorable  as those  that  could have been
obtained from  unaffiliated  parties,  in that the Company has attracted limited
capital  from  unaffiliated  parties  as of the date of this  filing,  and those
transactions were conducted on terms similar or identical to the terms set forth
below.

     We have an employment  agreement with Donald J. Shea, our President,  dated
September  1, 1999.  This  agreement  has a term of three years and provides for
salary of $144,000 per year, four weeks of vacation per year, and eligibility to
participation in all our benefit programs. There is no severance provision.

     We  have  an  employment  agreement  with  Thomas  P.  Lonergan,  our  Vice
President,  Chief Operations  Officer,  Secretary,  and Chief Financial Officer,
dated  September 1, 1999.  This agreement has a term of three years and provides
for  salary  of  $144,000  per  year,  four  weeks of  vacation  per  year,  and
eligibility to participation in all our benefit programs.  There is no severance
provision.

     We have  entered  into an  employment  agreement  with Mr.  Minh  Chau Pham
wherein Mr.  Pham  receives a salary of $95,000 per year and options to purchase
300,000  shares of common stock of the company at $.06 per share.  These options
vest on  November 1, 2001 and are  exercisable  for a period of 2 years from the
vesting date.  The options vest only if Mr. Pham is employed with the company on
the vesting date.

     We have a  Consulting  Agreement  with  Jeffrey  Berg,  a  director  of the
Company,  whereby,  for a one-time  payment of 2,444 shares of common stock, Mr.
Berg assists us in locating, negotiating, and managing our financing.

                                       18
<PAGE>

                                     PART IV
                                     -------

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

     (A)  EXHIBITS

Exhibit No.  Document Description
-----------  --------------------
3.1       Certificate  of   Incorporation  of  Innovative   Tracking   Solutions
          Corporation, a Delaware corporation, dated September 4, 1996*
3.2       Amendment  to  Articles  of  Incorporation   of  Innovative   Tracking
          Solutions Corporation, a Delaware corporation, dated May 21, 1997*
3.3       Certificate of Correction to Articles of  Incorporation  of Innovative
          Tracking Solutions Corporation,  a Delaware corporation dated June 16,
          1999*
3.4       Amendment  to  Articles  of  Incorporation   of  Innovative   Tracking
          Solutions Corporation, a Delaware corporation, dated July 28, 1999*
3.5       Amendment to Articles of Incorporation of thehealthchannel.com,  Inc.,
          a Delaware corporation, dated August 4, 1999*
3.6       Amendment to Articles of Incorporation of thehealthchannel.com,  Inc.,
          a Delaware corporation, dated August 5, 1999*
3.7       Amended Bylaws of thehealthchannel.com, Inc., dated August 19, 1999*
10.1      Acquisition,  Stock Purchase,  and Exchange Agreement,  dated July 28,
          1999*
10.2      24/7 Media Inc.  Network  Affiliation  Agreement,  dated  September 9,
          1999*
10.3      Employment Agreement with Thomas P. Lonergan, dated September 1, 1999*
10.4      Employment Agreement with Donald A. Shea, dated September 1, 1999*
10.5      Agreement  for  Financial  Public   Relations   Services  with  Market
          Pathways, dated August 11, 1999*
10.6      Asset &  Liability  Purchase  and Sale  Agreement  between  Innovative
          Tracking  Solutions  Corporation,  a Nevada corporation and Innovative
          Tracking Solutions  Corporation,  a Delaware corporation,  dated April
          14, 1999*
10.7      Exodus Communications,  Inc. Master Services Agreement, dated November
          19, 1999*
10.8      Content  Agreement with  EarthLink  Network,  Inc.,  dated October 27,
          1999*
10.9      Website and  Revenue  Sharing  Agreement  between  The  Institute  for
          Medical Studies,  Inc. and  thehealthchannel.com,  dated September 29,
          1999*
10.10     Warrant  Agreement  between  Institute for Medical  Studies,  Inc. and
          thehealthchannel.com dated September 29, 1999*
10.11     Healthcompass  Services Agreement between  thehealthchannel.com,  Inc.
          and HealthMagic, Inc., dated February 16, 2000*
10.12     Content License Agreement between Integrative Medicine Communications,
          Inc. and thehealthchannel.com, dated March 24, 2000*
10.13     LIVEware5,  Inc.  Agreement for Services between  Liveware5,  Inc. and
          thehealthchannel.com, Inc., dated March 24, 2000*
10.14     Office Lease*
10.15     NewsEdge Contract, dated May 27, 2000*
10.16     6%  Secured  Note  between  thehealthchannel.com  and  Laguna  Pacific
          Partners,  L.P., dated August 1, 2000  (Incorporated by reference from
          Exhibit 10.2 to the  Registration  Statement Form 10QSB filed November
          20, 2000, Registration Number 0-29822)*
10.17     Unit Warrant Agreement between thehealthchannel.com and Laguna Pacific
          Partners,  L.P., dated August 1, 2000  (Incorporated by reference from
          Exhibit 10.3 to the  Registration  Statement Form 10QSB filed November
          20, 2000, Registration Number 0-29822)*

                                       19
<PAGE>

10.18     Security  Agreement  between  thehealthchannel.com  and Laguna Pacific
          Partners,  L.P., dated August 1, 2000  (Incorporated by reference from
          Exhibit 10.4 to the  Registration  Statement Form 10QSB filed November
          20, 2000, Registration Number 0-29822)*
10.19     Investor    Representation    and   Warranties    Agreement    between
          thehealthchannel.com  and Laguna Pacific Partners,  L.P., dated August
          1,  2000   (Incorporated   by  reference  from  Exhibit  10.5  to  the
          Registration   Statement   Form  10QSB  filed   November   20,   2000,
          Registration Number 0-29822)*
10.20     Subscription Agreement between thehealthchannel.com and Laguna Pacific
          Partners,  L.P., dated August 1, 2000  (Incorporated by reference from
          Exhibit 10.6 to the  Registration  Statement Form 10QSB filed November
          20, 2000, Registration Number 0-29822)*
10.21     Subscription Agreement between  thehealthchannel.com  and Les Dube and
          Irene Dube,  dated August 21, 2000  (Incorporated  by  reference  from
          Exhibit 10.6 to the  Registration  Statement Form 10QSB filed November
          20, 2000, Registration Number 0-29822)*
10.22     Investor    Representation    and   Warranties    Agreement    between
          thehealthchannel.com and Les Dube and Irene Dube dated August 21, 2000
          (Incorporated  by  reference  from Exhibit  10.15 to the  Registration
          Statement  Form 10QSB filed  November  20, 2000,  Registration  Number
          0-29822)*
10.23     Employment Agreement with Minh-Chau Pham, dated May 15, 2000 *
10.24     Settlement  Agreement  and Release  between  thehealthchannel.com  and
          Michael Grandon dated August 31, 2000  (Incorporated by reference from
          Exhibit 10.16 to the Registration  Statement Form 10QSB filed November
          20, 2000, Registration Number 0-29822)*
10.25     Consulting  Agreement  between  thehealthchannel.com  and  Lawrence W.
          Horwitz dated August 18, 2000  (Incorporated by reference from Exhibit
          10.12 to the  Registration  Statement  Form 10QSB filed  November  20,
          2000, Registration Number 0-29822)*
10.26     Content Partner  Agreement between  thehealthchannel.com  and AvantGo,
          dated July 31, 2000  (Incorporated  by reference  from Exhibit 10.1 to
          the  Registration  Statement  Form  10QSB  filed  November  20,  2000,
          Registration Number 0-29822)*
10.27     Content  Distribution  Agreement  between   thehealthchannel.com   and
          OmniSky   Corporation,   dated  September  6,  2000  (Incorporated  by
          reference from Exhibit 10.17 to the Registration  Statement Form 10QSB
          filed November 20, 2000, Registration Number 0-29822)*
10.28     Letter  of  Agreement  between  thehealthchannel.com  and  ServerLogic
          Corporation, dated October 12, 2000 *
10.29     Consulting  Agreement  between  thehealthchannel.com  and  Lawrence W.
          Horwitz, dated January 5, 2000*
25        Power of Attorney (See Signature Page hereto)
* Previously filed

                                       20
<PAGE>

     (B)  REPORTS ON FORM 8-K

     On  January  4,  2000,  the  Company  filed a  current  report  on Form 8-K
announcing  the  termination of Roger G. Castro,  C.P.A.  pursuant to a Form 8-K
dated,  dated August 12, 1999 and Form 8-K/A, dated October 12, 1999, as of July
28,  1999.  Mr.  Castro's  report on the  financial  statements  of the  Company
contained  no  adverse  opinion  or a  disclaimer  of  opinion,  or was  neither
qualified nor modified as to uncertainty, audit scope, or accounting principles.
The termination of Mr. Castro was approved by the Board of Directors.

                                       21
<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934, as amended (the "Exchange  Act") the  Registrant  caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                             THEHEALTHCHANNEL.COM, INC.

                             By: /s/ Donald Shea
                                 ------------------------------------
                                 Donald Shea, Chief Executive Officer, President
                                 Chairman of the Board of Directors

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

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


/s/ Thomas Lonergan            Chief Operating Officer,           April 13, 2001
---------------------          Vice President
Thomas Lonergan                Secretary, Chief Financial
                               Officer and Director

/s/ Balazs Imre Bodai          Director                           April 13, 2001
---------------------
Balazs Imre Bodai, M.S., M.D.


/s/ Jeffrey H. Berg            Director                           April 13, 2001
---------------------
Jeffrey H. Berg, MBA, Ph.D.

/s/ Joseph Song                Director                           April 13, 2001
---------------------
Joseph Song, M.D., F.A.C.C.

<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                              FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999


                                    CONTENTS

                                                                            Page
                                                                            ----
INDEPENDENT AUDITORS' REPORT                                                 1-2

FINANCIAL STATEMENTS:
  Balance Sheet                                                                3
  Statements of Operations                                                     4
  Statement of Stockholders' Deficit                                         5-6
  Statements of Cash Flows                                                   7-8
  Notes to Financial Statements                                             9-18

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors
thehealthchannel.com, Inc.
Newport Beach, California

We have audited the accompanying balance sheet of thehealthchannel.com,  Inc. (a
development  stage  enterprise)  as  of  December  31,  2000,  and  the  related
statements of operations, stockholders' deficit and cash flows for the two years
then ended.  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 audit.  The  financial  statements  for the period from
inception of operations on September 4, 1996 to December 31, 1998 was audited by
other  auditors  whose  report  dated  April 1, 1999,  included  an  explanatory
paragraph  which  expressed  substantial  doubt about the  Company's  ability to
continue as a going concern.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of  thehealthchannel.com,  Inc. as
of December 31, 2000,  and the results of its  operations and its cash flows for
the  years  then  ended  in  conformity  with  generally   accepted   accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company has incurred  net losses from  operations,  has negative  cash flows
from operations,  and its current liabilities exceeds its current assets.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going concern.  Management's plans in regard to these matters are also described
in Note 1. The financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.


/s/ Stonefield Josephson, Inc.
CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California
January 26, 2001

                                                                               1
<PAGE>

                          REPORT OF INDEPENDENT AUDITOR

To the Shareholders and Board of Directors
thehealthchannel.com, Inc. (formerly
  Innovative Tracking Solutions Corporation)

I have  audited  the  balance  sheets of  thehealthchannel.com,  Inc.  (formerly
Innovative Tracking Solutions Corporation and a Development Stage Company) as of
December 31, 1998,  1997 and 1996,  and the related  statements  of  operations,
stockholders'  equity,  and cash flows for periods then ended.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position  of   thehealthchannel.com,   Inc.
(formerly  Innovative  Tracking  Solutions  Corporation and a Development  Stage
Company) at December 31, 1998,  1997 and 1996, and the results of operations and
cash flows for the periods then ended,  in conformity  with  generally  accepted
accounting principles.

The financial  statements have been prepared  assuming the Company will continue
as a going  concern.  As  discussed  in Note 1, the Company  has an  accumulated
deficit at December 31, 1998.  These factors raise  substantial  doubt about the
Company's  ability to continue as going concern.  Management's plan in regard to
these  matters is also  discussed  in Note 1. The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.


Roger G. Castro

Oxnard, California
April 1, 1999

                                                                               2
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                        BALANCE SHEET - DECEMBER 31, 2000


                                     ASSETS

CURRENT ASSETS:
  Cash                                                 $      2,429
  Prepaid expenses and other receivables                     20,855
                                                       ------------

          Total current assets                                      $     23,284

PROPERTY AND EQUIPMENT, net of
  accumulated depreciation and amortization                              543,859

DEPOSITS                                                                   3,852
                                                                    ------------

                                                                    $    570,995
                                                                    ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                $    500,672
  Loans payable, stockholders                                25,000
  Loans payable, net of unamortized discount
    of $169,164                                             330,836
  Accrued stock based compensation                          783,349
                                                       ------------

          Total current liabilities                                $  1,639,857

STOCKHOLDERS' DEFICIT:
  Common stock; $.001 par value, 175,000,000
    shares authorized, 27,610,954 shares
    issued and outstanding                                   27,611
  Additional paid-in capital                              8,451,920
  Deficit accumulated during the development stage       (9,548,393)
                                                       ------------

          Total stockholders' deficit                                (1,068,862)
                                                                   ------------

                                                                   $    570,995
                                                                   ============

See accompanying notes to financial statements.

                                                                               3
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                From inception on
                                              Year ended         Year ended    September 4, 1996 to
                                          December 31, 2000  December 31, 1999  December 31, 2000
                                          -----------------  -----------------  -----------------
<S>                                          <C>                <C>                <C>
NET REVENUES                                 $     10,765       $         --       $     10,765

COST OF REVENUES                                       --                 --                 --
                                             ------------       ------------       ------------

GROSS PROFIT                                       10,765                 --             10,765
                                             ------------       ------------       ------------

OPERATING EXPENSES:
  Depreciation                                    333,830            135,230            469,060
  Consulting and professional fees              1,509,420          2,512,039          4,021,459
  Website related                                 561,914            195,829            757,743
  Interest expense                                343,335                 --            343,335
  General and administrative                    1,136,283            617,630          1,753,913
                                             ------------       ------------       ------------
                                                3,884,782          3,460,728          7,345,510
                                             ------------       ------------       ------------

LOSS FROM CONTINUING OPERATIONS                (3,874,017)        (3,460,728)        (7,334,745)
                                             ------------       ------------       ------------

DISCONTINUED OPERATIONS:
  Loss on discontinued operations                      --           (367,014)        (2,114,398)
  Loss on disposal of segment                          --            (99,250)           (99,250)
                                             ------------       ------------       ------------

          Total discontinued operations                --           (466,264)        (2,213,648)
                                             ------------       ------------       ------------

NET LOSS                                     $ (3,874,017)      $ (3,926,992)      $ (9,548,393)
                                             ============       ============       ============


NET LOSS PER SHARE, BASIC AND DILUTED:
  Continuing operations                      $      (0.15)      $      (0.16)
                                             ============       ============
  Discontinued operations                    $         --       $      (0.02)
                                             ============       ============
  Net loss per share                         $      (0.15)      $      (0.18)
                                             ============       ============

WEIGHTED AVERAGE NUMBER OF SHARES
  OUTSTANDING, BASIC AND DILUTED               26,332,188         22,125,497
                                             ============       ============
</TABLE>

See accompanying notes to financial statements.

                                                                               4
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                       STATEMENT OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                      Accumulated
                                                     Common stock         Additional      Stock       during the       Total
                                              -------------------------     paid-in    subscriptions  development   stockholders'
                                                 Shares        Amount       capital     receivable       stage    equity/(deficit)
                                              -----------   -----------   -----------   -----------   -----------   -----------
DESCRIPTION
-----------
<S>                                            <C>          <C>           <C>           <C>           <C>           <C>
Balance at December 31, 1997, restated for
  1:3 stock split on October 12, 2000          11,388,007   $    11,388   $   379,859   $        --   $  (274,783)  $   116,464

Shares sold for cash                            3,334,252         3,334       473,130                                   476,464

Shares issued in exchange for services          6,998,481         6,999     1,054,540                                 1,061,539

Common stock subscription                         184,413           184        59,816       (60,000)

Net loss for the year ended
  December 31, 1998                                                                                    (1,472,601)   (1,472,601)
                                              -----------   -----------   -----------   -----------   -----------   -----------

Balance at December 31, 1998                   21,905,153        21,905     1,967,345       (60,000)   (1,747,384)      181,866

IVTX
----

Issuance of common stock from IVTX
  private placement offering (Note 4)             113,043           113       112,086        60,000                     172,199

Issuance of shares for services rendered on
  behalf of the Company (Note 4)                   34,800            35        52,165                                    52,200

THEHEALTHCHANNEL.COM (FORMERLY IVTX)
------------------------------------

Contribution of asset from Biologix
  International, Ltd. (Note 3)                                                947,835                                   947,835

Issuance of common stock from private
  placement offering (Note 4)                     405,934           406       510,134       (25,000)                    485,540

Issuance of common stock related to
  settlement agreements (Note 4)                  501,667           502     1,796,843                                 1,797,345
</TABLE>

                                   (Continued)

See accompanying notes to financial statements.

5
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                 STATEMENT OF STOCKHOLDERS' DEFICIT (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                      Accumulated
                                                     Common stock         Additional      Stock       during the       Total
                                              -------------------------     paid-in    subscriptions  development   stockholders'
                                                 Shares        Amount       capital     receivable       stage    equity/(deficit)
                                              -----------   -----------   -----------   -----------   -----------   -----------
<S>                                            <C>          <C>           <C>           <C>           <C>           <C>
Shares given directly by shareholders for
  services rendered on the Company's
  behalf (Note 4)                                                             860,100                                   860,100

Net loss for the year ended
  December 31, 1999                                                                                    (3,926,992)   (3,926,992)
                                              -----------   -----------   -----------   -----------   -----------   -----------

Balance at December 31, 1999                   22,960,597        22,961     6,246,508       (25,000)   (5,674,376)      570,093

Shares exchanged from pools (See Note 4)        1,528,369         1,528        (1,528)                                       --

Private placement offering, net                 1,524,651         1,525       898,715                                   900,240

Proceeds received from stock subscriptions                                                   25,000                      25,000

Shares issued in settlement of debt (Alphabet
  Media)                                           53,333            53        46,987                                    47,040

Shares issued for services - consultants           22,105            22        25,978                                    26,000

Shares issued for services (National
  Securities)                                       5,170             5         7,333                                     7,338

Shares issued for services (Quinn Emanuel)         27,633            27        30,645                                    30,672

Shares issued in settlement of legal matter
  (Benning and Fields)                             21,365            21        23,310                                    23,331

Shares issued in settlement (Marshall
  Redding)                                        274,508           275       172,666                                   172,941

Shares issued for bridge loan (Les Dube)          526,556           527       251,973                                   252,500

Warrants issuable for bridge loan (Laguna Pacific)                            250,000                                   250,000

Shares issued to Larry Horwitz for
  consulting services                             666,667           667       499,333                                   500,000

Net loss for the year ended
  December 31, 2000                                                                                    (3,874,017)   (3,874,017)
                                              -----------   -----------   -----------   -----------   -----------   -----------

Balance at December 31, 2000                   27,610,954   $    27,611   $ 8,451,920   $        --   $(9,548,393)  $(1,068,862)
                                              ===========   ===========   ===========   ===========   ===========   ===========
</TABLE>

See accompanying notes to financial statements.

                                                                               6
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                            STATEMENTS OF CASH FLOWS

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
                                                                                             From inception on
                                                           Year ended         Year ended    September 4, 1996 to
                                                       December 31, 2000  December 31, 1999  December 31, 2000
                                                       -----------------  -----------------  -----------------
<S>                                                       <C>                <C>                <C>
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
  Net loss                                                $ (3,874,017)      $ (3,926,992)      $ (9,548,393)
                                                          ------------       ------------       ------------

  ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
   PROVIDED BY (USED FOR) OPERATING
    ACTIVITIES:
      Depreciation and amortization                            333,830            135,230            469,060
      Loss on disposal of division                                  --             99,250             99,250
      Interest expense                                         330,835                 --            330,835
      Non cash expenses from stock issuances                 1,290,671          2,611,423          5,096,232
      Settlement of litigation                                 300,000                 --            300,000

  CHANGES IN ASSETS AND LIABILITIES:
    (INCREASE) DECREASE IN ASSETS:
      Accounts receivable                                           --                189              3,147
      Inventory                                                     --            (10,312)            83,077
      Prepaid expenses                                         (60,620)          (108,447)          (190,020)
      Deposits                                                  (3,852)             2,597             (6,449)

    (INCREASE) DECREASE IN LIABILITIES -
      accounts payable and accrued expenses                    261,371            661,157            615,789
                                                          ------------       ------------       ------------

          Total adjustments                                  2,452,235          3,391,087          6,800,921
                                                          ------------       ------------       ------------

          Net cash used for operating activities            (1,421,782)          (535,905)        (2,747,472)
                                                          ------------       ------------       ------------
</TABLE>

                                   (Continued)

See accompanying notes to financial statements.

                                                                               7
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      STATEMENTS OF CASH FLOWS (CONTINUED)

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
                                                                                                     From inception on
                                                                   Year ended         Year ended    September 4, 1996 to
                                                               December 31, 2000  December 31, 1999  December 31, 2000
                                                               -----------------  -----------------  -----------------
<S>                                                               <C>                <C>                <C>
CASH FLOWS USED FOR INVESTING ACTIVITIES -
  payments to acquire property, equipment and other assets             (39,266)           (25,818)           (65,083)
                                                                  ------------       ------------       ------------

CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
  Assets and liabilities transferred out (See Note 1)                       --            (26,329)           (26,329)
  Stock subscription receivable                                         25,000            (25,000)                --
  Loans receivable                                                      21,000                 --                 --
  Proceeds from loans, including related parties                       425,000                 --            425,000
  Proceeds from issuance of capital stock, net                         900,240            682,738          2,416,313
                                                                  ------------       ------------       ------------

          Net cash provided by financing activities                  1,371,240            631,409          2,814,984
                                                                  ------------       ------------       ------------

NET INCREASE (DECREASE) IN CASH                                        (89,808)            69,686              2,429
CASH, beginning of year                                                 92,237             22,551                 --
                                                                  ------------       ------------       ------------

CASH, end of year                                                 $      2,429       $     92,237       $      2,429
                                                                  ============       ============       ============

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
  ACTIVITIES -
    Non-cash consideration from debt and equity transactions      $  1,990,671       $  2,611,423       $  5,999,401
                                                                  ============       ============       ============
    Proceeds from loan payable paid directly to Horwitz
      and Beam by Laguna Pacific on behalf of the Company         $    100,000       $         --       $    100,000
                                                                  ============       ============       ============
    Acquisition of website technology and related assets          $         --       $    947,835       $    947,835
                                                                  ============       ============       ============
</TABLE>

See accompanying notes to financial statements.

                                                                               8
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                          NOTES TO FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     GOING CONCERN:

          The Company's  financial  statements  are prepared using the generally
          accepted accounting  principles  applicable to a going concern,  which
          contemplates  the realization of assets and liquidation of liabilities
          in the normal course of business. The Company has no current source of
          material revenues. Without realization of additional capital, it would
          be  unlikely  for the Company to  continue  as a going  concern.  This
          factor  raises  substantial  doubt  about  the  Company's  ability  to
          continue as a going concern.

          Management  recognizes  that  the  Company  must  generate  additional
          resources  to enable it to  continue  operations.  Management's  plans
          include the sale of additional  equity and debt  securities to various
          private  equity  funds  ranging from  $2,000,000  to  $15,000,000.  In
          addition,  with infusion of capital from equity funding, the Company's
          management  plans  to  generate   significant  revenues  resulting  in
          positive  cash flows by year end.  However,  no assurance can be given
          that the Company will be  successful  in raising  additional  capital.
          Further, there can be no assurance,  assuming the Company successfully
          raises additional funding, that the Company will achieve profitability
          or positive cash flow.  If  management  is unable to raise  additional
          capital and  expected  significant  revenues do not result in positive
          cash flow,  the Company will not be able to meet its  obligations  and
          will have to cease operations.

     GENERAL:

          With headquarters in Newport Beach,  California,  thehealthchannel.com
          (formerly  Innovative  Tracking Solutions  Corporation or "IVTX") is a
          comprehensive   health  information  Internet  portal  that  offers  a
          one-step  access point for  consumers  and  professionals  who want to
          explore a broad array of health topics.  The portal currently  indexes
          other Internet health and health-related  sites, has direct links with
          online health-care  information  service centers and provides detailed
          coverage of medical conditions.  Consumers may access a global library
          of health-care  information while searching for products and services.
          The site  offers  a  complete  Internet  portal  for  state-of-the-art
          continuing medical education for professionals.

          The Company was  incorporated  under the laws of the state of Delaware
          on September 4, 1996.

     BUSINESS ACTIVITY:

          In early 1999, IVTX management  determined that the "public" status of
          IVTX was  detrimental to IVTX'  operations due to the time and expense
          burdens of being a public  company.  IVTX  management  then decided to
          take the operations of IVTX "private" by transferring  all IVTX assets
          and  liabilities  to a newly  formed  private  company and selling the
          public  shell to a  suitable  company,  preferably  in the  healthcare
          industry.  On April 13, 1999, IVTX obtained  written approval of 64.4%
          of the total voting stock of IVTX,  voting "for" taking the operations
          of IVTX private and selling the public shell to a suitable company.

                                                                               9
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

     BUSINESS ACTIVITY, CONTINUED:

          On April 14, 1999, IVTX  transferred all of its assets and liabilities
          based on  majority  stockholder  approval  to a newly  formed  private
          company,  Innovative Tracking Solutions Corporation,  a private Nevada
          corporation,  incorporated  on March  29,  1999.  Innovative  Tracking
          Solutions  Corporation was formed by IVTX management  specifically for
          the purpose of taking the operations of IVTX private.  The former IVTX
          officers and directors,  Dianna Cleveland, Lee Namisniak and Lou Weiss
          are the  officers  and  directors  of  Innovative  Tracking  Solutions
          Corporation,  the private company.  The consideration for the transfer
          of assets was the  assumption of all IVTX's  liabilities  by the newly
          formed  private  company.  As a result of this  transfer of assets and
          liabilities  and the  disposal of the segment of business on April 14,
          1999   (which   is    unrelated    to   the   present    business   of
          thehealthchannel.com),  the  Company  recorded a loss on  discontinued
          operations  of $367,014 and a loss on disposal of a segment of $99,250
          for the year ended December 31, 1999.

          In  June  1999,  IVTX  was  introduced  to   thehealthchannel.com,   a
          consumer-based health Internet web site  (http://www.thehealthchannel.
          com).  On July 28,  1999,  IVTX,  pursuant  to its bylaws and  general
          Delaware   corporate  law,   acquired  a  certain  asset  of  Biologix
          International, Ltd., a Delaware corporation ("Biologix") consisting of
          thehealthchannel.com  web site and its related  technology in exchange
          for the  controlling  interest in IVTX. In connection with this change
          of control, IVTX's name was changed to  thehealthchannel.com,  Inc. on
          July 28, 1999. The acquisition closed on July 28, 1999.

     USE OF ESTIMATES:

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

     FAIR VALUE:

          Unless otherwise indicated, the fair values of all reported assets and
          liabilities which represent financial  instruments,  none of which are
          held for trading  purposes,  approximate  the carrying  values of such
          amounts.

     CASH:

          The Company  maintains  its cash in bank deposit  accounts  which,  at
          times,  may exceed  federally  insured  limits.  The  Company  has not
          experienced any losses in such accounts.

                                                                              10
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

     PROPERTY AND EQUIPMENT:

          Property  and   equipment  are  stated  at  cost.   Expenditures   for
          maintenance and repairs are charged to earnings as incurred,  whereas,
          additions,  renewals,  and betterments are capitalized.  When property
          and equipment  are retired or otherwise  disposed of, the related cost
          and accumulated depreciation are removed from the respective accounts,
          and any  gain  or loss is  included  in  operations.  Depreciation  is
          computed  using the  straight-line  method over the  estimated  useful
          lives of the related assets.  Website and related  technology is being
          amortized straight-line over its estimated useful life of three years.

     INCOME TAXES:

          The Company  accounts  for income  taxes under  Statement of Financial
          Accounting  Standards No. 109,  "Accounting  for Income  Taxes," which
          adopts the asset and liability  approach to  measurement  of temporary
          differences   between  financial   reporting  and  income  tax  return
          reporting.  The  principal  temporary  difference is the net operating
          loss  carryforward of  approximately  $8,000,000 at December 31, 2000.
          Due to business  activity  during 1999 (Note 1), there are significant
          limitations  on the Company's  ability to utilize this  operating loss
          carryforward. A deferred asset has been provided and completely offset
          by a valuation  allowance,  because its utilization does not appear to
          be reasonably  assured.  The federal net operating  loss  carryforward
          starts to expire on  December  31, 2019 and the  California  state net
          operating loss carryforward starts to expire on December 31, 2004.

     DEVELOPMENT STAGE ENTERPRISE:

          The Company is a development  stage company as defined in Statement of
          Financial  Accounting  Standards No. 7,  "Accounting  and Reporting by
          Development Stage Enterprises." The Company is devoting  substantially
          all of its  present  efforts to  establish  a new  business,  which is
          unrelated to the business of Innovative Tracking Solutions Corporation
          ("IVTX"), and its planned principal operations have not yet commenced.
          All losses accumulated since inception of  thehealthchannel.com  (Note
          1) have been  considered  as part of the Company's  development  stage
          activities.  The  operations  of IVTX are  presented  as  discontinued
          operations  as a result of the transfer of its assets and  liabilities
          to a private company (Note 1).

     NET LOSS PER SHARE:

          Net loss per share has been computed using the weighted average number
          of shares  outstanding.  Common stock  equivalents  have been excluded
          since their inclusion would reduce loss per share.

                                                                              11
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

     NEW ACCOUNTING PRONOUNCEMENTS:

          In  December  1999,  the  Securities  and  Exchange   Commission  (the
          Commission)   issued  Staff  Accounting   Bulletin  No.  101,  Revenue
          Recognition in Financial Statements,  which is to be applied beginning
          with the  fourth  fiscal  quarter  of  fiscal  years  beginning  after
          December 15, 1999, to provide guidance related to recognizing  revenue
          in circumstances in which no specific authoritative literature exists.
          The adoption by the Company in the application of the Staff Accounting
          Bulletin to the Company's financial statements did not have a material
          change in the amount of revenues the Company ultimately realized.

          In March 2000, the Financial  Accounting Standards Board (FASB) issued
          FASB  Interpretation  No.  44  (Interpretation  44),  "Accounting  for
          Certain Transactions Involving Stock Compensation".  Interpretation 44
          provides  criteria  for the  recognition  of  compensation  expense in
          certain stock-based  compensation  arrangements that are accounted for
          under APB Opinion No. 25,  Accounting  for  Stock-Based  Compensation.
          Interpretation  44 is effective July 1, 2000, with certain  provisions
          that are effective  retroactively to December 15, 1998 and January 12,
          2000. Interpretation 44 is not expected to have any material impact on
          the Company's financial statements.

          In June 1998, the Financial Accounting Standards Board issued SFAS No.
          133,  "Accounting for Derivative  Instruments and Hedging Activities."
          SFAS No.  133, as amended by SFAS No.  137,  is  effective  for fiscal
          years beginning after June 15, 2000. SFAS No. 133 requires the Company
          to recognize  all  derivatives  as either  assets or  liabilities  and
          measure those  instruments at fair value. It further provides criteria
          for derivative  instruments to be designated as fair value,  cash flow
          and foreign  currency  hedges and  establishes  respective  accounting
          standards  for reporting  changes in the fair value of the  derivative
          instruments.  Upon  adoption,  the Company  will be required to adjust
          hedging  instruments  to fair value in the balance sheet and recognize
          the  offsetting  gains or losses as  adjustments to be reported in net
          income or other comprehensive  income, as appropriate.  The Company is
          evaluating its expected  adoption date and currently expects to comply
          with the  requirements  of SFAS 133 in fiscal  year 2001.  The Company
          does  not  expect  the  adoption  will be  material  to the  Company's
          financial position or results of operations since the Company does not
          believe it participates in such activities.


(2)  PROPERTY AND EQUIPMENT:

          On July  28,  1999,  the  Company  acquired  an  asset  from  Biologix
          International,  Ltd.,  consisting  primarily  of  thehealthchannel.com
          website and related  technology  in  exchange  for 850,000  restricted
          shares of the Company's common stock. Website technology cost includes
          the design (including software configuration and interfaces),  coding,
          installation  costs to hardware  and  testing.  The  website  asset (a
          non-monetary   asset)  acquired  was  recorded  at  the   transferors'
          (Biologix International,  Ltd.) historical cost basis determined under
          generally accepted accounting principles.

                                       12
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(2)  PROPERTY AND EQUIPMENT, CONTINUED:

     Property and equipment is comprised of the following:

     Website and related technology                            $    987,100
     Software                                                        25,819
                                                               ------------

                                                                  1,012,919
     Less accumulated depreciation and amortization                 469,060
                                                               ------------

                                                               $    543,859
                                                               ============

     Depreciation and amortization expense for the years ended December 31, 2000
     and 1999 amounted to $333,830 and $135,230, respectively.


(3)  STOCKHOLDERS' DEFICIT:

     Biologix  paid  $250,000  for  850,000  shares  of  common  stock  of IVTX,
     representing  the majority  controlling  interest  held by the officers and
     directors  of IVTX (see Note 2 for the  recording of this  issuance).  This
     purchase was made pursuant to the exemption from  registration set forth in
     Section 4(1) of the  Securities  Act of 1933, as amended (the "Act"),  as a
     non-issuer transaction. This exemption was available since the officers and
     directors of IVTX sold their stock to  Biologix;  IVTX itself did not issue
     any new stock. Further, Biologix agreed to contribute  thehealthchannel.com
     assets  and  technology  to IVTX in  exchange  for  the  IVTX  shareholders
     agreeing to split their stock and exchange shares with the  shareholders of
     Biologix.  This  exchange was made  pursuant to the  exemption set forth in
     Section 4(1) of the Act as a non-issuer  transaction.  This  exemption  was
     available since IVTX  shareholders  transferred their shares of IVTX (newly
     named  thehealthchannel.com,  Inc.) to the  shareholders  of  Biologix  who
     elected to exchange their shares.  The shares of stock of IVTX were forward
     split  28.22-for-one and the IVTX shareholders opted to exchange each share
     they held of IVTX  stock for two  shares of common  stock of IVTX under its
     new name of thehealthchannel.com,  Inc. and contributed the remaining 26.22
     shares each into a share  exchange  pool as presented  in the  statement of
     stockholders'  equity.  Then  approximately 800 Biologix  shareholders were
     provided  with the  alternative  of  retaining  their  Biologix  shares  or
     retiring   their   Biologix    shares   in   exchange   for   IVTX   shares
     (thehealthchannel.com  shares)  contained in the exchange pool on a one for
     one  share  basis.  Approximately  630  Biologix  shareholders  elected  to
     exchange their  Biologix  shares for  thehealthchannel.com  shares from the
     pool (the "Exchange").

     During October 2000, the shareholders approved a stock split of 1:3 shares,
     the  effect of which has been  retroactively  applied  in the  accompanying
     financial  statements.  The number of authorized shares of common stock was
     increased to 175,000,000.

                                                                              13
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(3)  STOCKHOLDERS' DEFICIT, CONTINUED:

     The  Exchange  was  announced  to  shareholders  of both IVTX and  Biologix
     through press releases and a letter to IVTX shareholders. After the forward
     stock split, the Company  (thehealthchannel.com,  Inc. formerly  Innovative
     Tracking Solutions  Corporation) had 35,606,519 post split shares of common
     stock  issued and  outstanding.  The  Exchange  began on August 6, 1999 and
     ended on October 31, 1999 to ensure that all  shareholders  had enough time
     and notice to  exchange  their  shares.  Following  the  conclusion  of the
     Exchange period, the Company had approximately 12,667,000 post split shares
     reserved for exchange with Biologix  shareholders  that were not exchanged.
     During 2000, 1,528,369 shares were exchanged with Biologix shareholders.

     During the year  ended  December  31,  1998,  the  Company  sold  3,334,252
     restricted  (post  split)  shares of the  Company's  common stock for total
     proceeds of $476,464 under Regulation D of the Securities Act of 1933.

     During the year ended  December 31, 1998,  the Company  recorded an expense
     from the issuance of approximately  7,000,000 post split shares in exchange
     for services and license  agreements.  Expense amounts totaling  $1,061,539
     were  determined  based  on  share  value  of  consideration  given  and/or
     consideration received, which ever was more clearly determinable.

     Prior to the April 14, 1999  transfer  of the IVTX  assets and  liabilities
     (Note 1), the Company had concluded a private placement offering under Rule
     504 of  Regulation  D, whereby  113,043 (post split) shares of common stock
     were sold at an  offering  price of $1.52  (post  split)  per  share.  This
     offering  resulted in net proceeds of $172,199.  Also,  the Company  issued
     34,800 (post  split)  shares of common  stock for  services  rendered.  The
     services have been recorded at a fair value of $1.50 (post split) per share
     for a total of $52,200.

     In September 1999, the Company  initiated a Rule 506,  Regulation D private
     placement of  1,930,585  (post split)  restricted  shares of the  Company's
     common  stock  from  shares  available  from the  forward  stock  split and
     1,930,585  (post  split)  warrants  to  purchase  restricted  shares of the
     Company's'  common stock with an exercise  price  determined  at 70% of the
     trading  value at the date of grant,  for net proceeds of  $1,410,780.  The
     private placement offering was closed on August 29, 2000. The shares issued
     and the shares  issuable  upon  exercise  of the  warrants  have  piggyback
     registration rights in the event the Company files a Registration Statement
     with the Securities and Exchange Commission.  The warrants vest immediately
     and expire two years from the date of issuance.

     The Company issued 501,667 shares of common stock for satisfaction of legal
     settlement agreements the Company entered into for a total of $1,797,345.

     During July 1999,  the Company  entered  into a Consulting  Agreement  with
     Ocean View  Management,  LLC.  Under the Consulting  Agreement,  Ocean View
     Management  received  a one time  payment of 25,000  post  split  shares of
     common  stock of the  Company,  which is  recorded  in accrued  stock based
     compensation  on the  balance  sheet.  This  issuance  was exempt  from the
     registration provisions of the Act by virtue of Section 4(2) of the Act, as
     transactions by an issuer not involving any public offering. The securities
     issued  pursuant to the Consulting  Agreement are restricted  securities as
     defined in Rule 144.

                                                                              14
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(3)  STOCKHOLDERS' DEFICIT, CONTINUED:

     During  August 1999,  the Company  entered into an Agreement  for Financial
     Public  Relation   Services  with  Market  Pathways   Financial   Relations
     Incorporated.  Under the Agreement for Financial Public Relations Services,
     Market  Pathways  Financial  Relations  Incorporated  received  a one  time
     payment of 28,333 post split  shares of common  stock of the Company and is
     included in accrued stock based  compensation  on the balance  sheet.  This
     issuance was exempt from the  Registration  provisions of the Act by virtue
     of Section 4(2) of the Act, as  transactions by an issuer not involving any
     public  offering.  The  securities  issued  pursuant to the  Agreement  are
     restricted securities as defined in Rule 144.

     On December 15, 1999,  shareholders  conveyed  519,738 post split shares of
     common stock to certain  individuals  and 84,000  shares of common stock to
     officers  of the  Company  for  satisfaction  of  expenses  and  payment of
     salaries  these  individuals  and officers  had  rendered on the  Company's
     behalf.  This resulted in recording a charge to expense and additional paid
     in capital of $860,100 for the year.

     During 2000, the Company entered into a Consulting  Agreement with Lawrence
     W.  Horwitz  pursuant  to which  Mr.  Horwitz  agreed to  provide  business
     development  and  advisory  services.  For  services  rendered  under  this
     Consulting  Agreement,  the Company  issued  666,667  post split  shares of
     common stock of the Company (the  "Shares").  The Shares were registered on
     Forms S-8, for which, an expense of $500,000 has been recorded.

     On August 5, 2000, the Company  approved the issuance of 508,319 post split
     restricted shares to 12 officers,  directors and consultants in payment for
     services  rendered to the Company.  The related expense amounts of $457,487
     have been  recorded in accrued stock based  compensation  as shares had not
     yet been issued.

     Bridge Financing
     ----------------

     During  August  2000,  the  Company  entered  into an  agreement  to borrow
     $250,000 from Laguna Pacific Partners L.P.,  ("Laguna Partners") a Delaware
     limited  partnership.  This loan is secured  by all assets of the  Company,
     bears interest at 6% per annum and is payable on the earlier of 180 days or
     within 30 days from the  effective  date of the Form SB-2 above.  This loan
     has been extended to May 1, 2001. In  consideration  for this loan,  Laguna
     Partners  will  receive  warrants for common stock equal to the quotient of
     $250,000   divided  by  the  closing  bid  of  the  Company's  stock  price
     immediately  preceding the effective date of the Form SB-2 above.  The term
     of this  warrant is five years and the  exercise  price is $1. The  Company
     will  record  interest  expense  using the fair value of $0.165 per warrant
     granted, measured at the date of grant using the Black Scholes model with a
     70% volatility.  This discount of $250,000 is being amortized over the loan
     term using the imputed interest method.

     During  August  2000,  the  Company  entered  into an  agreement  to borrow
     $250,000  from Les and Irene Dube,  ("Dube")  individuals.  This loan bears
     interest  at 6% per  annum and is  payable  on the  earlier  of 180 days or
     within 30 days from the  effective  date of the Form SB-2 above.  This loan
     has been extended to May 23, 2001.  In  consideration  for this loan,  Dube
     received  526,556  (post-split)  common stock shares for which an amount of
     $250,000  is being  amortized  over the life of the loan using the  imputed
     interest method.

                                                                              15
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(3)  STOCKHOLDERS' DEFICIT, CONTINUED:

     Stock Options
     -------------

     On July 27, 2000, the Company  enacted the 2000 Incentive and  Nonstatutory
     Stock Option Plan (the "Plan"), which has reserved for issuance,  5,000,000
     options to purchase shares of Common Stock of the Company for key employees
     and consultants. To date, no options have been granted under the plan.

(4)  ADVERTISING COSTS:

     Advertising  costs are expensed when incurred and amounted to approximately
     $615,000  and  $400,000  for the years  ended  December  31, 2000 and 1999,
     respectively.

(5)  EMPLOYMENT AGREEMENTS:

     The Company has employment  agreements with its chief operating officer and
     president.  The  employment  agreements  provide  for a  monthly  salary of
     $12,000  each.  The  agreements  commenced  on September 1, 1999 and are in
     effect for three years from that date.

(6)  CONTINGENCIES:

     The  Company  is  involved  in  other  various  routine  legal  proceedings
     incidental to the conduct of its normal business operations.  The Company's
     management  believes  that  none of these  legal  proceedings  will  have a
     material adverse impact on the financial condition or results of operations
     of the Company.

     The  Securities  and  Exchange  Commission  ("SEC")  has  alleged  that the
     exchange of shares  involving  the Biologix  shareholders  may have been in
     violation of the Securities Act of 1933 and thereby  constituted the making
     of an  unregistered  public  offering  to which the  Company  continues  to
     disagree.  If the SEC were to  prevail  in its  position,  it would  have a
     severe and adverse  impact on the  Company,  and the  Company's  ability to
     continue as a going  concern  would be adversely  affected.  The  financial
     statements  do not  include  any  adjustments  that might  result  from the
     outcome of this uncertainty, as the amounts are not estimable.

     The Company  initiated a private  placement of securities  during September
     1999 which  closed on August 29,  2000.  During  this  period of time,  the
     Company sold securities to investors based on the most recent closing price
     on the OTC  Bulletin  Board or the Pink  Sheets.  The prices at which these
     securities  were  sold  fluctuated  widely,  based on  fluctuations  in the
     closing  prices.  The Company is  contingently  liable in the event that an
     investor or investors  who purchased  securities in this private  placement
     asserts a claim that the  Company  failed to fully  disclose  the fact that
     fluctuations  in the market  would  cause  adjustments  in the price of the
     private  placement.  The Company  believes that they fully  disclosed  this
     risk,  however,  in the  event  any  shareholder(s)  were  to  successfully
     prosecute an action  against the Company,  it may have a severe and adverse
     effect  on the  Company's  ability  to  continue  as a going  concern.  The
     financial  statements do not include any adjustments that might result from
     the outcome of this uncertainty, as the amounts are not estimable.

                                       16
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(6)  CONTINGENCIES, CONTINUED:

     Termination of Swartz Equity Line
     ---------------------------------

     During 2000,  the Company  entered into an  agreement  with Swartz  Private
     Equity  LLC  ("Swartz")  for a  $30,000,000  equity  offering,  subject  to
     registration  with the SEC and  governed  by a  percentage  of our  trading
     volume.  This equity line was  governed by the  investment  agreement  with
     Swartz  that  provided  that the  Company  may place puts to Swartz  over a
     three-year  period.  The Company has determined that it was highly unlikely
     that the  Swartz  transaction  would  clear  comments  based  upon  certain
     insurmountable  aspects of the Swartz deal. As such, the Company terminated
     the agreement with Swartz.  Termination of the Swartz agreement,  according
     to its terms,  requires the payment of a "break-up" fee of $200,000.  While
     the  Company  believes  that  no fee  is due  Swartz,  based  on the  legal
     impossibility  of this  agreement,  Swartz may  attempt to pursue  remedies
     against the company.  Based on discussions  with legal counsel,  management
     does not  believe  that  Swartz  would  prevail in any action  against  the
     Company.  Accordingly,  no amounts have been  recorded in the  accompanying
     financial statements as the probability of a negative outcome is remote.

     Litigation
     ----------

     During   2000,   the   Company  was  named  as  a   cross-defendant   in  a
     cross-complaint  filed by its Former  President in an action pending in the
     Superior Court State of California  for the County of San  Francisco,  Case
     No.  307364.  This action was  initiated  by Biologix  International,  Ltd.
     ("Biologix")  against the Former  President  on October  22, 1999  alleging
     causes  of  action   against  the  former   President  for:  (1)  temporary
     restraining order and preliminary and permanent  injunction;  (2) breach of
     fiduciary duty; (3) fraud by intentional misrepresentation; (4) conversion;
     (5)  possession  of personal  property;  (6)  declaratory  relief;  and (7)
     accounting.  The  claims  alleged by  Biologix  relate to the  actions  and
     conduct of the former  President  as an officer and  director of  Biologix.
     Thehealthchannel.com  was named as a cross-defendant in the cross-complaint
     of the former  President in a cause of action for breach of contract  based
     upon an alleged  employment  agreement  between  the former  President  and
     Biologix.   The  former  President  claimed  that  the  alleged  employment
     agreement  was  the  responsibility  of  thehealthchannel.com   based  upon
     thehealthchannel.com's   purchase  of  the  internet  related  assets  from
     Biologix.  Thehealthchannel.com  was  served  with the  cross-complaint  on
     December  14,  1999.  The former  President  seeks  $400,000 in damages and
     options to purchase  one  million  shares of  Biologix  stock.  The Company
     entered into a Settlement  Agreement and Release with its Former President.
     Pursuant to the settlement agreement, (a) the Former President was required
     to  transfer  266,667  thehealthchannel.com  post  split  shares  which had
     erroneously  been issued to a Company under his control and  contribute the
     proceeds from the sale of 66,667  thehealthchannel.com post split shares to
     the  Company,  withdraw  all  pending  claims  or  rights  to any  monetary
     compensation,  whether asserted or unasserted,  stock options or stocks and
     waive his right to future  claims or  lawsuits  against the Company and (b)
     the  Company  was  to  issue   approximately   333,333  post  split  shares
     immediately,  166,667  post split shares if the  weighted  average  trading
     price as determined in the agreement was at least $2.25, 166,666 post split
     shares if the weighted average trading price as determined in the agreement
     was at least $3.75 and 66,667  post split  shares if the  weighted  average
     trading price as  determined in the agreement was at least $6.00.  Pursuant
     to this agreement,  the Company  recorded an obligation of $300,000 arising
     from the initial 333,333 shares at $0.90 per share,  which approximated the
     post split  trading price per share.  The transfer of 266,667  shares under
     the  Settlement  Agreement  and Release  with the Former  President  is not
     classified as redeemable  equity in the balance  sheet,  as no cash payment
     are attached to redeem his stock.  This  obligation of $300,000 is included
     in accrued stock based  compensation  on the balance sheet.  The Company is
     contingently  liable to issue  400,000  additional  post split shares based
     upon certain stock price goals as disclosed above, and no amounts have been
     recorded in the accompanying financial statements

                                       17
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

(6)  CONTINGENCIES, CONTINUED:

     Litigation, Continued
     ---------------------

     To the best knowledge of management,  there is no other material litigation
     pending or threatened against the Company.

                                       18