SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A

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



FOR THE FISCAL YEAR ENDED                                 COMMISSION FILE NUMBER
-------------------------                                 ----------------------
MAY 31, 1997                                                     0-12561

                         MEDITECH PHARMACEUTICALS, INC.
              ----------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



NEVADA                                                         95-3819300
---------------                                            -------------------
(STATE OR OTHER                                             (I.R.S.EMPLOYER
JURISDICTION OF                                            IDENTIFICATION NO.)
ORGANIZATION)


10105 E. VIA LINDA, #103, PMB-382      SCOTTSDALE, AZ               85258
--------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                          (ZIP CODE)

                                 (480) 614-2874
               --------------------------------------------------
              (REGISTRANT'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 $.001 PAR VALUE


INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

                          YES  X                 NO
                             ----                  ----

STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT. THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE TO THE
PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES OF SUCH
STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF FILING.

$23,341,260.36 (COMPUTED ON THE BASIS OF $.22 PER SHARE OF COMMON STOCK) AS OF
FEBRUARY 26, 2001.

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.

146,713,432 SHARES OF $.001 PAR VALUE COMMON STOCK AS OF FEBRUARY 26, 2001.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     NONE.


<PAGE>



PART I

Item 1. Business
----------------

     Meditech Pharmaceuticals, Inc. is a Nevada corporation. We began our
business in May 1982 and incorporated in Nevada on March 21, 1983.

Our Products

     We have developed two patented compounds: MTCH-24(TM) and Viraplex(R). Both
of these compounds show positive test results for treatment of a variety of
enveloped viruses. An enveloped virus is one in which the infectious particle is
surrounded by a coating made of protein, fatty substances and carbohydrate.

MTCH-24(TM)

     Herpes I and II are enveloped viruses. How MTCH-24(TM) acts against
enveloped viruses is not fully understood. However, based on laboratory tests
conducted for our company, MTCH-24(TM) is believed to be effective against a
wide range of other enveloped viruses such as influenza, Epstein-Barr virus,
respiratory syncytial virus (a virus which affects the respiratory system),
pseudorabies (a specific virus in the rabies family), rhino tracheitis (an
infection of the lungs and throat), and cytomegalovirus. It is also believed to
be effective against rotavirus, a non-enveloped virus that is a major cause of
diarrhea and inflammation of the intestinal tract in infants and in certain
animals.

     EBV is a herpes virus that causes infectious mononucleosis and may be a
cause of Burkitt's lymphoma, a disease found mostly in Africa and New Guinea,
and less frequently, in the United States. EBV causes widespread early childhood
disease in developing countries, and is also associated with nasopharyngeal
carcinoma, a malignant tumor of the nose, usually affecting young adults.

     CMV is a virus, the effects of which vary substantially depending upon the
age and immune status of the infected person. Infection of an infant can result
in a fatal disease involving the nervous system and liver. Infection acquired
later in life may cause a syndrome clinically indistinguishable from
mononucleosis. Generalized CMV infection, which can be fatal, may also occur in
patients whose immune systems have been compromised.

     Rotavirus is believed to be the causative agent in over 50% of all cases of
acute diarrhea in children requiring hospitalization. It can be highly
contagious and sometimes fatal. Rotavirus is also a major cause of
gastroenteritis in swine and lambs. Gastroenteritis is an inflammation often due
to an infectious agent of the intestinal tract with a mortality rate of 30% to
50%.

     Initial therapeutic uses of MTCH-24(TM) will include the topical treatment
of Herpes Simplex Virus I and acne. Future dosage forms and uses covered by
patents include creams, lotions, mouthwashes, cleansers, surface disinfectants,
impregnated facial tissues, douches and inhalants. We have developed an
over-the-counter product containing MTCH-24(TM) for treating symptoms of herpes
simplex virus infections of the lips, mouth, and face (e.g. cold sores and fever
blisters). Initially, the active ingredients shown in the product will be drugs,
other than MTCH-24(TM), that previously have been recognized by the FDA as safe
and effective for their intended use, as specified in FDA monographs or proposed
monographs. MTCH-24(TM) will be used in these products as a non-active
ingredient or a surfactant, an agent that is used externally such as soap or
topical anti-microbial agent plus wetting agent. An anti-microbial agent is one
that either prevents or kills microbes, including bacterial germs and viruses.
Under these conditions, we hope our over-the-counter product will fall within
the scope of the FDA regulations. Consequently, we may be able to bring our
product to market in the United States without further FDA approval. Outside FDA
and Federal Trade Commission counsel will conduct extensive legal research prior
to the release for sale of any of our products.

                                       1
<PAGE>

Viraplex(R)

     The National Cancer Institute has conducted studies since 1987 to screen
60,000 drugs against cancer related organisms. One of the final drugs remaining
in this study as being potentially effective against some cancers is
Viraplex(TM). They have not yet completed the testing to determine actual
effectiveness.

     One of the problems in moving this project forward was the inherent
insolubility of Viraplex(R). In 1997 and 1998, we reformulated the drug into a
fully soluble form, now making it possible to deliver the maximum therapeutic
dose to the intended site of delivery. We may use part of the proceeds from this
offering to continue the cancer trials via the production of the more soluble
form of the drug.

     We are currently testing Viraplex(R), as well as MTCH-24(TM). Pending
satisfactory test results, we plan to develop additional products containing
these drugs. Viraplex(R), which is administered orally in capsule form as a
prescription treatment for orofacial and genital herpes simplex virus
infections, started Phase III clinical trials for safety and effectiveness in
humans. However, we have suspended these trials pending the obtaining of
additional capital to finance the trials. We received permission from the FDA in
1987 to initiate a 320-patient Phase III study, consisting of 160 patients with
genital herpes and 160 patients with orofacial herpes. We had completed more
than 50% of this testing prior to our suspension of the testing due to lack of
funds. Because this test was structured as a double blind test (a test where
half the patients unknowingly receive a placebo and the other half unknowingly
receive the drug) only the bio-statistician has the ability to determine the
test results prior to completion of the testing. If we decide to complete this
test, instead of commencing a new test, the results will be published upon
completion.

Agricultural Products

     Fungal, bacterial and viral plant diseases cause loss of crops worldwide.
Fungi pose a major health hazard by producing mycotoxins, toxic chemical
substances that cause potentially deadly diseases in humans and animals. In
particular, aflatoxin produced by Aspergillus flavus is among the most deadly
substances known to mankind. Aflatoxin is a plant disease that affects grain
crops such as corn and wheat. Aspergillus is a group of fungi that causes
disease in humans, animals and plants. In humans, Aspergillus commonly causes
lung disease due either to direct growth of the organism or by allergic
mechanisms. The Aspergillus flavus strain often grows on stored grain, corn and
other foodstuffs causing spoilage, and may produce toxic substances that render
these foods poisonous. MTCH-24 (TM) has been shown to be effective in inhibiting
and preventing the growth of Aspergillus on wheat and corn.

     Organisms of the bacteria genus Xanthomonas cause citrus canker. Xanthomas
consist of a group of bacteria that infects plants and causes significant loss
of commercially important fruits and vegetables. MTCH-24(TM) has been shown to
inhibit this organism at concentrations non-toxic to humans. Biosciences
Laboratories in Montana is currently conducting tests using MTCH-24(TM) against
this organism and two others.

     We have engaged in limited testing and development in this area and are
seeking to interest potential licensees or joint venture partners to provide
assistance in testing, obtaining the necessary approvals for, and marketing one
or more of our agricultural products. At this point, we have not decided which
of our agricultural products we will seek to develop commercially or the order
of such development. This will depend in large part on the identity of the
licensees or joint venture partners and the wishes and interests of such
parties.

Marketing Plan

     Presently, depending upon the timing and amount raised through our
investment agreement with Swartz, we estimate that we will have commercial
products that we will market in the United States within the next two years. In
addition, we intend to bring out an MTCH-24(TM)-based Cold Sore product in the
United States. The target customers for our products are drug chains, drug
wholesalers, mass marketers and food chains. We also plan to market our product
directly over the Internet. If available, we intend to employ independent sales
representative organizations.


                                       2
<PAGE>

     We hope to use an independent advertising group to market and promote our
products. We would aim media at the appropriate segments of the population, as
well as publications targeting the self-medicating segment. We intend for most
of the advertising to be in print. We have assigned the task of developing a
brand name to a professional outside agency specializing in drug naming. We hope
to select a name with maximum consumer impact and long consumer attention span.
We are also working with a drug naming consulting firm to develop a name we will
use commercially for MTCH-24(TM). We have selected the name Zorex(TM) and have
filed a trademark application with the United States Patent and Trademark Office
to register the mark.

     In addition to our selling efforts upon commercialization of our products,
we are currently attempting to enter into licensing arrangements with larger
pharmaceutical and consumer product companies, especially on an international
level. Because we can enter into licensing arrangements prior to
commercialization of our products, licensing arrangements can be used to raise
capital and obtain assistance with research and development. For example, on
February 3, 2000, we entered into a letter agreement with INL. Pursuant to the
agreement, we granted INL an irrevocable option for a period of one year to
obtain an exclusive license to make, have made, promote, sell and distribute
Viraplex and MTCH-24(TM), and any derivatives or formulation of either product,
throughout the world, excluding the United States. Pursuant to this letter
agreement, INL has paid to us $100,000 in anticipation of entering into a formal
license agreement in which we will receive a seven percent and four percent
royalty on INL's net sales of MTCH-24(TM) and Viraplex, respectively. In
addition, INL will initiate and fund a minimum of $20,000 worth of research and
development activities on MTCH-24(TM) and Viraplex, and will provide to us all
data from these activities.

     Pursuant to the letter agreement, we also granted to INL an irrevocable
option to purchase 10,000,000 shares of our common stock at an exercise price of
$0.03 per share. The shares of common stock issuable upon exercise of the option
are being registered in this registration statement. INL paid to us an
additional $25,000 relating to this irrevocable option. Finally, we have also
agreed to nominate INL's president to our board of directors upon the
effectiveness of a Registration Statement to be filed registering shares to be
issued to Swartz Private Equity, LLC pursuant to an investment agreement.

Competition

     There is at least one FDA-approved product currently available, by
prescription, for the treatment of herpes infections. Burroughs-Wellcome Co.
sells it under the name Zovirax(R) (Acyclovir). FDA approval of Zovirax is
limited to selected cases of genital and mucocataneous herpes and also to
specific usage. Mucocataneous herpes relates to certain lubricating linings in
the body and/or skin. Herpes Simplex Viruses typically cause infection at these
sites. Other companies are testing vaccines intended to prevent infection by
herpes viruses. Treatment of persons presently afflicted with recurrent herpes
infections is the primary focus of the products we are developing.

     Many pharmaceutical companies and other researchers have announced their
intention to introduce, or are believed to be in the process of developing a
variety of products that may perform some or all of the functions of our
Viraplex(R) and MTCH-24(TM) products. Competing products are already available
for many of the functions of our MTCH-24(TM) products. Other current competitors
include Uniliver (with Vaseline Intensive lip care), Avanir Pharmaceuticals
(with Docusanol) and Blistex.


                                       3
<PAGE>

Patents

     Our performance and ability to compete depends to a significant degree on
our proprietary knowledge. We rely or intend to rely on a combination of patent
and trade secret laws, non-disclosure agreements and other contractual
provisions to establish, maintain and protect our proprietary rights.

     MTCH-24(TM)

     1.   United States Patent #4,717,735 (Antibacterial Methods and Agent),
          issued January 1, 1988 (6 claims)

     2.   United States Patent #4,719,235 (Methods and Compositions for Treating
          Viral Infections), issued January 12, 1988 (37 claims)

     3.   United States Patent #4,752,617 (Antibacterial Methods and Agent),
          issued June 21, 1988 (6 claims)

     4.   Canadian Patent #1,242,147 (Method for Treating Viral Infection),
          issued September 20, 1988 (6 claims)

     5.   Canadian Patent #1,256,032 (Method and Composition for Treating Viral
          Infections), issued July 20, 1989 (16 claims)

     6.   United States Patent #4,885,310 (Antifungal Methods and Agent), issued
          December 205, 1989 (26 claims)


     VIRAPLEX (R)(R)

     1.   Italian Patent #1,196,739 (Herpes Simplex Treatment), issued November
          25, 1988 (6 claims)

     2.   United States Patent #4,810,707 (Herpes Simplex Treatment), issued
          March 7, 1989 (5 claims)

     3.   Canadian Patent #1,261,269 (Herpes Simplex Treatment), issued
          September 26, 1989 (14 claims)


                                       4
<PAGE>

Government Regulation

     Pharmaceutical products are subject to extensive regulation in the United
States and most foreign countries. In the United States, ethical pharmaceutical
products cannot be marketed or sold before they have passed the FDA's required
three-stage process. Providing adequate test data, completing filings and
obtaining final regulatory approval is usually a multi-year process.

     Once ethical pharmaceutical products are approved for sale, many of them
are purchased through health plans which are subject to state and Federal
regulations including the Health Maintenance Act of 1973, the Knox-Keene Act in
California, and numerous other regulations which bar some forms of treatment and
some pharmaceutical products as being "experimental" or "not medically
necessary."

     Similar regulations and regulatory oversight are in place in most
countries. This ongoing regulatory oversight can also result in the withdrawal
of products from the market after their approval for sale in instances where new
test data creates additional regulatory concerns.

Employees

     As of August 29, 1997, we had one part-time non-medical employee, who was
also an executive officer. We currently contract with outside partners to
perform the testing and registration of our patented products. As we move toward
completion of testing and introduction of products to the market, we plan to
substantially increase the number of employees in administrative and marketing
roles.

Item 2. Properties
------------------

     We currently operate out of space owned by Gerald Kern, our Chairman and
Chief Executive Officer, that is provided to us without charge. This space will
not be adequate for operations as we move forward. We anticipate acquiring a
small office in Los Angeles within the next 12 months.

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

     We are not a party to any material legal proceedings nor are we aware of
any pending litigation against our company.


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

     None.



                                       5
<PAGE>

                                     PART II

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

     The Company's common stock is traded on the over-the-counter market. On
August 29, 1997, the closing bid price for the common stock of the Company was
$.010 The high and low closing bid prices therefore during the quarterly fiscal
periods indicated were as follows:

Quarter Ended                          Low Bid                High Bid
-------------                          -------                --------

February 28, 1995                       .02                      .02
May 31, 1995                            .015                     .015
August 29, 1995                         .015                     .022
November 28, 1995                       .01                      .02

February 29, 1996                       .01                      .015
May 31, 1996                            .01                      .14
August 29, 1996                         .02                      .07
November 28, 1996                       .01                      .04

February 28, 1997                       .01                      .03
May 31, 1997                            .01                      .03

Some of the above prices reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions.
The Company's common stock was reported on NASDAQ through April 30, 1986, at
which time it was delisted because of failure to meet the minimum capital and
surplus and asset requirements of the NASD by-laws.

     As of August 29, 1997, there were 3,208 holders of record of the Company's
outstanding shares of common stock.

     The Company has not paid any dividends to its shareholders and has no
present intention of changing this policy.



                                       6
<PAGE>

Item 6. Selected Financial Data
-------------------------------

     The following consolidated selected financial data has been derived from
annual financial statements for the fiscal years indicated. This information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements and Notes thereto.
<TABLE>
<CAPTION>

                                Twelve month    Twelve month    Twelve month    Twelve month    Twelve month    Inception
                                period ended    period ended    period ended    period ended    period ended       To
                                May 31, 1993    May 31, 1994    May 31, 1995    May 31, 1996    May 31, 1997   May 31, 1997
                                ------------    ------------    ------------    ------------    ------------   ------------
<S>                             <C>             <C>             <C>             <C>             <C>            <C>
Results of Operations:

Net loss and deficit
 accumulated during
 development stage              ($   449,400)   ($   753,900)   ($   515,600)   ($   501,600)   ($   957,400)  ($13,578,900)

Consolidated Balance
 Sheet Data:

                                                                                                                Inception to
                                May 31, 1993     May 31, 1994     May 31, 1995   May 31, 1996    May 31, 1997   May 31, 1997
                                ------------     ------------     ------------   ------------    ------------   ------------

Working Capital Deficit         ($ 4,360,100)   ($ 4,897,600)   ($ 5,390,100)   ($ 5,900,000)   ($ 6,421,785)       --

Total assets                     $     2,900     $     2,700     $     1,700     $     1,100     $       600        --

Long-term debt                             0               0               0               0               0        --

Total liabilities                $ 4,360,800     $ 4,898,700     $ 5,399,700     $ 5,900,700     $ 6,422,385        --

Shareholders' Deficit           ($ 4,549,200)   ($ 5,087,300)   ($ 5,589,300)   ($ 6,090,900)   ($ 6,613,085)       --


Net loss and deficit accumulated
 during development stage per
 share of common stock          ($      0.01)   ($      0.0l)   ($      0.01)    ($     0.01)   ($      0.01)  ($      0.12)


</TABLE>

                                       7
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition
        and Results of Operations

     You should read the following discussion of our financial condition and
operations in conjunction with the condensed consolidated financial statements
and the related notes included elsewhere in this filing. This discussion
contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these
forward-looking statements as a result of many factors.

Overview

     We are a drug development company, founded in 1982, focused in the areas of
research, development, and marketing in the biomedical industry, with an
emphasis on anti-infective drugs. The Company has completed various stages of
planning and developing products containing its proprietary drugs Viraplex (R)
and MTCH-24(TM).

     Our development activities since inception (May 4, 1982) have included
efforts to secure financing, create a management and business structure, and
develop and test Viraplex (R) and MTCH-24(TM) for release as both OTC and
ethical products. These activities have produced very little in operating
revenues.

     Since we became a public company, our operations have related primarily to
securing our patents, initiating and continuing clinical tests, recruiting
personnel and raising capital.

Going Concern

     Our consolidated financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  As shown in the consolidated
financial statements, we experienced a loss of approximately $957,400 during the
fiscal year ended May 31, 1997, had a cash balance of approximately $0, and had
an accumulated deficit of approximately $13,578,900 at May 31, 1997.  These
factors, among others, raise substantial doubt about our ability to continue as
a going concern.

     We must raise additional funds in order to actively reinstate our research
and development efforts, to complete existing product testing which was
suspended in 1987, or commence new testing on such product, and to conduct
additional testing on our products. We intend to obtain the necessary financing
through the sale of our equity securites. There can be no assurance that we will
be successful in raising from Swartz sufficient additional capital in order to
continue and complete our research and development and testing. Our future
success is dependent upon raising additional money to provide for the necessary
operations of the Company. If we are unable to obtain such additional financing,
there would be a material adverse effect on our business, financial position,
and results of operations. Our continuation as a going concern is dependent on
our ability to generate sufficient capital to meet our obligations on a timely
basis, and to continue and complete our research and development and testing
efforts.



RESULTS OF OPERATIONS FOR THE YEARS ENDED MAY 31, 1997 AND 1996

Revenues

     There were no revenues for the year ended May 31, 1997 ("1997"), nor were
there any revenues for the year ended May 31, 1996 ("1996").



                                       8
<PAGE>

     Our expenses include research and development and general and
administrative. Research and development consists of laboratory expenses,
consulting expenses, test expenses, clinical and research salaries, and other
costs associated with the development of products not yet being marketed.
General and administrative expenses include the salaries and benefits costs of
management and other non- manufacturing employees, sales and marketing expenses,
rent, accounting, legal and operational costs. Personnel compensation and
facilities costs represent a high percentage of our operating expenses and are
relatively fixed in advance of each quarter.

Research and Development Costs. There were no direct research and development
costs for 1997 or for 1996.

General and Administrative Expenses. Direct costs were $721,300 for 1997, as
compared with $245,900 for 1996. The increase was primarily due to expenses
recorded in 1997 for stock issued to employees and vendors totaling $412,000. In
the future, we expect direct costs to increase in absolute dollar terms but to
decrease as a percentage of revenues due to OTC products reaching the market and
the sale of additional product licenses. In the future, we expect selling,
general and administrative expenses to increase in absolute dollars but to
decrease as a percentage of revenues due to improved economies of scale and
higher overall revenues.

Interest Expense. Interest expense was $236,100 for 1997, as compared to
$255,700 for 1996. This decrease was due to the adjustments in the interest rate
calculation in 1997. This interest is accrued at a rate of 9% simple interest
per annum on funds advanced to the company by Petro-Med Inc. Meditech's Chief
Executive Officer, Gerald N. Kern, also serves as Chairman of Petro-Med Inc.

Net Loss. Net loss was $957,400 in 1997, as compared to $501,600 in 1996. The
increase was primarily due to expenses recorded in 1997 for stock issued to
employees and vendors totaling $412,000.


RESULTS OF OPERATIONS FOR THE YEARS ENDED MAY 31, 1996 AND 1995.

Revenues. There were no revenues for 1996, nor were there any revenues for the
year ended May 31, 1995 ("1995").

Research and Development Costs. There were no direct research and development
costs for 1996 or for 1995.

General and Administrative Expenses. Direct costs were $245,900 for 1996, as
compared with $265,000 for 1995. The decrease was primarily due to additional
office expenses of $18,000 recorded in 1995.

Interest Expense. Interest expense was $255,700 for 1996, as compared to
$250,600 for 1995. This increase was due to the additional debt incurred in
1996. This interest is accrued at a rate of 9% simple interest per annum on
funds advanced to the company by Petro-Med Inc. Meditech's Chief Executive
Officer, Gerald N. Kern, also serves as Chairman of Petro-Med Inc.



                                       9
<PAGE>

Net Loss. Net loss was $501,600 in 1996, as compared to $515,600 in 1995. The
decrease was primarily due to additional office expenses of $18,000 recorded in
1995.

LIQUIDITY AND CAPITAL RESOURCES FOR THE YEARS ENDED MAY 31 1999 AND 1998

Since inception, we have funded our operations and investments in property and
equipment through cash from equity financings and cash from licensing fees. Our
cash and cash equivalents were $0 at May 31, 1997 and May 31, 1996. Net cash
used in operations in 1997 was $3,100, as compared to $0 in 1996. There was no
net cash used in investing activities in 1997 or 1996. Net cash provided by
financing activities in 1997 was $3,100, as compared to $0 in 1996.


Item 7A.  Quantitative and Qualitative Disclosures Amount Market Risk
---------------------------------------------------------------------

     A significant change in interest rates would not have a material adverse
effect on the Company's financial position or results of operation due to the
limited amount of cash on hand at May 31, 1998, and as the Company's interest
bearing debt obligations have fixed interest rates.



                                       10
<PAGE>


Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------


The financial statements required by this item are set forth as indicated in
Item 14(a)(1).

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
-----------------------------------------------------------------------


None.


                                    PART III

Management
----------


Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

The present directors and executive officers of the Company are listed below,
together with brief accounts of their experience and certain other information.

Name                     Age     Office                     Year first elected
----                     ---     ------                     ------------------

Gerald N. Kern           59      Chairman of the Board,              1982
                                 of Directors and Chief
                                 Executive Officer

Cynthia S. Kern          47      President and Acting Chief          1995
                                 Financial Officer

Lester F. Goldstein      53      Director                            1983

Harry Hall               62      Director                            1990



                                       11
<PAGE>

All officers serve at the pleasure of the board.  Directors serve until the
next annual meeting of shareholders and until their respective successors are
elected and qualified.  Directors who are not salaried employees are compensated
at the rate of $500 for each board meeting attended.


Business Experience of Directors and Executive Officers
-------------------------------------------------------

Gerald N. Kern is Chairman and Chief Executive Officer of the Company. Mr. Kern
served as President until September, 1995. He is also Chairman, President and
Chief Executive Officer of Viral Research Technologies, Inc., a minority owned
subsidiary of the company. Since February, 1983, Mr. Kern has also been
Chairman, President and Chief Executive Officer of Petro-Med, the principal
shareholder of the company. Petro-Med had filed a Chapter XI bankruptcy petition
which was converted to a Chapter VII on August 26, 1992. He was President and
Chief Executive Officer of GumTech International, Inc., a manufacturer of
nutrient chewing gum products, from August of 1996 through January of 1998. From
September, 1994, to August, 1996, Mr. Kern was President of Aura Interactive, an
international electronics firm based in El Segundo, California. See "Security
Ownership of Certain Beneficial Owners and Management."

Mr. Kern has been an officer and director of the Company since its formation in
May, 1982. From 1981 through April, 1982, Mr. Kern was president of HJK
Consulting, Inc., a marketing consulting company specializing in consumer
products marketing. During 1980, Mr. Kern was president of Philip Merrill
International, Ltd., a subsidiary of Parfums Lamborghini, and was responsible
for product development, sales and marketing. From 1978 to 1979, he was
assistant to the President and was Executive Vice President of the United States
division of Max Factor & Company, in charge of sales, marketing and general
management, in addition to being head of the worldwide military and PX
divisions. From 1967 to 1977, Mr. Kern was employed by International Playtex,
Inc., in a variety of positions, including Vice President and General Sales
Manager of the branded apparel division, and General Manager of Playtex, Ltd.,
Canada.

Lester F. Goldstein, Ph.D. is currently a business technology consultant. From
1992 to 1996, he served as a physicist for Aura Systems, Inc., and has served
there since 1992. From 1989 to 1992, he served as the Senior Program Manager at
the TRW Applied Technology Division, Space and Technology Group. Previously,
from 1986 to 1989, he served as Program Manager of high technology advanced
programs in the Satellite and Space Electronics Division of Rockwell
International. He served as Director of Electro-Optics for the Satellite Systems
Division of Rockwell International from 1981 to 1985. From 1985 to 1986 he
served as Chief Scientist in the division. He was responsible for managing
advanced technology, planning and development for the division's programs. From
1978 to 1981 he was Program Manager at Hughes Aircraft overseeing various radar
and sensor projects. Dr. Goldstein obtained a B.A. degree from Hofstra
University in physics and mathematics and M.S. and Ph.D degrees in physics from
Polytechnic University of New York. He has been a director of Meditech since
March 1983.

Harry Hall has had more than 25 years of experience as a Senior Executive in
major consumer products companies. He is currently an Executive Vice President
of sales for Evan-Picone and has served in that capacity since April 1996. He
has served as consultant to industry leaders in the apparel and non-durable
goods fields. He is presently a Director of Petro-Med Inc. and Viral Research
Technologies, Inc.

Cynthia S. Kern has been President and Acting Chief Financial Officer since
September 1995. Mrs. Kern served as Vice President of administration from 1982
to 1995. She is the wife of Gerald N. Kern. From 1979 to 1981 she served as an
Administrative Assistant with Edgar Rice Burroughs, Inc. from 1978 to 1979, she
was an Executive Secretary with Max Factor & Co. Ms. Kern devotes up to 50% of
her working time to the affairs of the Company. Ms. Kern is also the Vice
President, Secretary and Treasurer of Mas Industries, Inc.



                                       12
<PAGE>

Item 11. Executive Compensation
-------------------------------

The following table sets forth all cash compensation for the fiscal year ended
May 31, 1997 for (1) the Company's Chief Executive Officer and (2) each of its
most highly compensated executive officers whose aggregate cash compensation
exceeded $100,000.


Name of
Individual or                  Capacities in
Persons in Group               Which they serve                Salaries
----------------               ----------------                --------

Gerald N. Kern                 Chairman of the Board and       $108,000 (1)
                               Chief Executive Officer


(1)  Of the cash compensation set forth for Mr. Kern, $108,000 was accrued but
     unpaid.


Employment Agreement
--------------------

     Employment agreement with Gerald N. Kern. The Company entered into an
employment agreement with Gerald N. Kern on November 17, 1982, to employ Mr.
Kern as President and Chief Executive Officer, which agreement, as amended,
provided for a term which ended December 31, 1991, at compensation of $108,000
per annum. In addition to any bonus Mr. Kern may receive under the Company's
bonus plans, it is contemplated that if and when the Company becomes profitable,
Mr. Kern will receive a bonus in such amount as the Company's Board of Directors
shall determine.

     The Company maintains a bonus plan which contemplates that 10% of the
Company's net pre-tax earnings will be set aside each year for bonuses to key
personnel including Gerald N. Kern. Because of the absence of earnings since
inception of the Company, no amounts have been accrued or paid under such plan.

     The Company also employs Cynthia S. Kern as President, Secretary and acting
Chief Financial Officer at a salary of $45,000 per annum and the law offices of
Robert M. Kern as general counsel at a retainer of $36,000 per annum. See
"Certain Relationships and Related Transactions." The Company has no employment
contract with Cynthia S. Kern or Robert M. Kern.



                                       13
<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

     As of August 31, 1997, Petro-Med owned 26,256,794 shares of common stock of
the Company, which constitutes approximately 21.1% of the issued and outstanding
stock of the Company. Petro-Med has filed a Chapter XI bankruptcy petition which
was converted to a Chapter VII on August 26, 1992.

     Petro-Med has been delinquent for some years in making filings with the
Securities and Exchange Commission required by the Securities Exchange Act of
1934. The delinquencies pre-date by a number of years the acquisition by Gerald
N. Kern of substantial holdings in, and control of, Petro-Med. Mr. Kern has been
attempting since 1983 to rectify Petro-Med's filing deficiencies. Petro-Med had
engaged in discussions with the staff of the Securities and Exchange Commission
with respect to compliance. The staff indicated to Petro-Med's counsel that it
would likely seek injunctive relief against Petro-Med, requiring Petro-Med to
make timely filings in the future. See "Certain Relationships and Related
Transactions" for information relating to transactions between Mr. Kern,
Petro-Med and the Company during the last five years.

     The following table sets forth, as of August 31, 1997, certain information
concerning the ownership of shares of the Company's common stock by persons
owning more than 5% of the outstanding shares of the common stock and the
directors of the Company and by directors and officers as a group.


    Name and Address                   Amount and Nature of        Percentage of
    of Beneficial Owner                Beneficial Ownership            Class
    -------------------                --------------------            -----

    Petro-Med, Inc.                     26,256,794                      21.1%
    10105 E. Via Linda, 103-382
    Scottsdale, AZ 85258

    Lester F. Goldstein                    750,000                       .60%
    10892 Marietta Avenue
    Culver City, CA 90230

    Harry Hall                             350,000                       .30%
    10105 E. Via Linda, 103-382
    Scottsdale, AZ 85258

    Cynthia S. Kern                      1,200,000 (1)                  1.00%
    10105 E. Via Linda, 103-382
    Scottsdale, AZ 85258

    Gerald N. Kern                      31,556,794 (2)                 25.33%
    10105 E. Via Linda, 103-382
    Scottsdale, AZ 85258

    All directors & officers            33,856,794                     27.18%
             as a group (4 persons)



     (1)  Mr. Gerald N. Kern disclaims ownership of these shares of the
          Company's common stock owned by his wife.

     (2)  Includes shares of the Company's common stock owned by Petro-Med
          because Mr. Kern, as owner of approximately 16% of the outstanding
          common stock and as Chairman, President and Chief Executive Officer of
          Petro-Med, may be deemed to have shared voting power with respect to
          the Company's common stock owned by that entity.



                                       14
<PAGE>

The directors of Petro-Med are Gerald N. Kern, Harry Hall and Jerry Tenant.
Gerald N. Kern is the Chairman, President and Chief Executive Officer of
Petro-Med.

Petro-Med may be deemed a "parent" or "promoter" of the Company under the
Securities Act of 1933. Gerald N. Kern may be deemed a "parent" of Petro-Med and
therefore a "parent" of the company under the Securities Act of 1933. See
"Directors and Executive Officers of the Registrant" and "Certain Relationships
and Related Transactions."

The following table sets forth, as of August 31, 1997, the shares of common
stock of Petro-Med owned of record and beneficially by the directors and the
Company and by all such officers and directors of the Company as a group.

Name                             Shares Owned             Percentage of Class
----                             ------------             -------------------

Gerald N. Kern                   3,613,840 (1)                  15.85%

Lester F. Goldstein                  8,000                        .04%

All Directors and Officers       3,621,840                      15.89%
as a group (4 persons)

(1) 2,087,270 shares are owned by FSL Cosmetics, Ltd., of which Gerald N. Kern
is the sole shareholder. Cynthia S. Kern, as the wife of Gerald N. Kern, may be
deemed, because of community property laws, to be a beneficial owner of 50% of
the shares owned by Mr. Kern.

Except for Gerald N. Kern, the above table does not include those persons who
beneficially own more than 5% of Petro-Med's outstanding common stock, which
persons are Sergei Givotovsky at 1,683,640 shares, and Lakestone Acceptance
Corp., 1,370,000 or approximately 7.4% and 6% respectively.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

     Cynthia S. Kern has been employed as President and Acting Chief Financial
Officer since September 1995. She served as Vice President of administration
from 1982 to 1995 and has served as Secretary of the Company since 1983 and
presently draws a salary of $45,000 per annum. In August 1993, she purchased
3,000,000 shares of the Company's common stock for total consideration of
$90,000. She is the wife of Gerald N. Kern, Chairman of the Board and Chief
Executive Officer of the Company. Ms. Kern's employment was approved by Mr.
Rosenberg and Dr. Goldstein, as directors of the Company. She devotes up to 50%
of her time to the affairs of the Company. Robert M. Kern has been employed as
General Counsel of the Company since September 1984. His present retainer is
$36,000 per annum. He is the son of Gerald N. Kern. Board approval was not
required although it was received in March 1985. Robert M. Kern devotes up to
10% of his time to the affairs of the Company. Mrs. Kern's and Mr. Robert Kern's
salaries and fees are based upon current market rates.

     For a description of employment agreements between the Company and certain
officers, see "Directors and Executive Officers of the Registrant - Employment
Agreements."

     The Company's administrative offices are located at 10105 E. Via Linda,
#103-382, Scottsdale, AZ 85258. See "Business - Property".



                                       15
<PAGE>

                                     Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         A.  Documents filed with report:

                  1.  Financial statements and financial statement schedules.

                      The financial statements and financial statement schedules
                      listed in the accompanying index to financial statements
                      are filed as part of this report. The financial statements
                      for the fiscal years ended May 31, 1995 and 1996 have not
                      been restated and, as a result, are not included herein.
                      The financial statements for the 1995 and 1996 fiscal
                      years are included in the Annual Report on Form 10-K filed
                      with the SEC on September 23, 1997 and are incorporated
                      herein by this reference.

                  2.  Exhibits.

                      The exhibits listed on the accompanying index to exhibits
                      are filed are filed as part of this report.

         B.       Reports on Form 8-k

                      None.
--------------------------------------------------------------------------------



                                       16
<PAGE>


                                   Signatures

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

Meditech Pharmaceuticals, Inc.

By: /s/ Gerald N. Kern
-----------------------------------------------------
Gerarld N. Kern, Chief Executive Officer and Chairman of the Board


Dated: March 23, 2001

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

/s/ Gerald N. Kern                          Dated: March 23, 2001
-----------------------------
Gerald N. Kern, Chairman of
the Board of Directors and
Chief Executive Officer

/s/ Steven I. Kern                          Dated: March 23, 2001
-----------------------------
Steven I. Kern, Chief
Financial Officer



                                       17
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                                                        CONTENTS
                                                                    MAY 31, 1997
================================================================================

                                                                        Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                       F-1

FINANCIAL STATEMENTS

     Consolidated Balance Sheet                                          F-2

     Consolidated Statements of Operations                               F-3

     Consolidated Statements of Stockholders' Deficit                 F-4 - F-8

     Consolidated Statements of Cash Flows                            F-9 - F-10

     Notes to Consolidated Financial Statements                      F-11 - F-24

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Meditech Pharmaceuticals, Inc.

We have audited the accompanying consolidated balance sheet, as restated (see
Note 2) of Meditech Pharmaceuticals, Inc. and subsidiary (development stage
companies) as of May 31, 1997, and the related consolidated statements of
operations and cash flows, as restated (see Note 2) for the year then ended, and
the statement of stockholders' deficit, as restated for the year ended May 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We have not audited the consolidated statements
of operations, the consolidated statements of stockholders' deficit, and the
consolidated statements of cash flows, as restated (see Note 2) for the periods
from May 4, 1982 (inception) to May 31, 1996, which constituted accumulated
deficits aggregating to $12,621,500. These periods have been audited by other
auditors.

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

In our opinion, the restated, consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Meditech Pharmaceuticals, Inc. and subsidiary as of May 31, 1997, and the
results of their consolidated operations and their consolidated cash flows for
the year then ended in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. During the year ended May 31,
1997, the Company incurred a net loss of $957,400. In addition, the Company's
accumulated deficit was $13,578,900 as of May 31, 1997. Recovery of the
Company's assets is dependent upon future events, the outcome of which is
indeterminable. In addition, successful completion of the Company's transition,
ultimately, to the attainment of profitable operations is dependent upon
obtaining adequate financing to fulfill its development activities and achieving
a level of sales adequate to support the Company's cost structure. These
factors, among others, as discussed in Note 3 to the consolidated financial
statements, 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 3. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
November 8, 2000, except
   for the third and fourth
   paragraphs of Note 9, as
   to which the date is
   November 30, 2000

                                      F-1
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                                      CONSOLIDATED BALANCE SHEET
                                                                    MAY 31, 1997
================================================================================


                                     ASSETS
                                   (restated)

CURRENT ASSETS
     Prepaid expenses                                              $        600
                                                                   -------------

                  TOTAL ASSETS                                     $        600
                                                                   =============


                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                   (restated)

CURRENT LIABILITIES
     Accounts payable and accrued expenses                         $  1,339,885
     Accrued compensation                                             2,235,800
     Advances from affiliate                                          2,753,500
     Advances from stockholders                                          22,200
     Loan payable                                                        71,000
                                                                   -------------

         Total current liabilities                                    6,422,385
                                                                   -------------

MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY                            191,300
                                                                   -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
     Preferred stock, $0.001 par value
         25,000,000 shares authorized
         none issued and outstanding                                          -
     Common stock, $0.001 par value
         400,000,000 shares authorized
         124,563,432 shares issued and outstanding                      124,600
     Additional paid-in capital                                       6,841,215
     Accumulated deficit                                            (13,578,900)
                                                                   -------------

              Total stockholders' deficit                            (6,613,085)
                                                                   -------------

                  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT      $        600
                                                                   =============

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

                                      F-2
<PAGE>

<TABLE>
                                          MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                          (DEVELOPMENT STAGE COMPANIES)
                                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                                    FOR THE YEAR ENDED MAY 31, 1997 AND
                            FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
=======================================================================================
<CAPTION>

                                                                            For the
                                                                           Period from
                                                                             May 4,
                                                            For the           1982
                                                          Year Ended       (Inception)
                                                            May 31,        to May 31,
                                                             1997             1997
                                                        --------------   --------------
                                                          (restated)       (restated)
<S>                                                     <C>              <C>
                                   OPERATING EXPENSES

     Research and development                           $           -    $   1,837,100
     General and administrative                               721,300       10,436,700
     Aborted stock offering costs                                   -          325,400
                                                        --------------   --------------

         Total operating expenses                             721,300       12,599,200
                                                        --------------   --------------

LOSS BEFORE OTHER INCOME (EXPENSE)                           (721,300)     (12,599,200)
                                                        --------------   --------------

OTHER INCOME (EXPENSE)
     Interest expense                                        (236,100)      (1,683,600)
     Interest income                                                -          298,500
     Other income, net                                              -           75,600
                                                        --------------   --------------

         Total other income (expense)                        (236,100)      (1,309,500)
                                                        --------------   --------------

LOSS BEFORE MINORITY INTEREST IN LOSSES OF SUBSIDIARY        (957,400)     (13,908,700)

MINORITY INTEREST IN LOSSES OF SUBSIDIARY                           -          329,800
                                                        --------------   --------------

NET LOSS                                                $    (957,400)   $ (13,578,900)
                                                        ==============   ==============

BASIC AND DILUTED LOSS PER SHARE                        $       (0.01)   $       (0.12)
                                                        ==============   ==============

WEIGHTED-AVERAGE SHARES OUTSTANDING                       124,253,247      112,654,955
                                                        ==============   ==============

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

                                          F-3
</TABLE>
<PAGE>

<TABLE>
                                                                                       MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                                                                       (DEVELOPMENT STAGE COMPANIES)
                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                                         FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
====================================================================================================================================
<CAPTION>

                                                                                                           Deficit
                                                                                                         Accumulated
                                   Common Stock           Treasury Stock                    Additional   During the
                           ---------------------------  ------------------  Subscriptions    Paid-In     Development
                              Shares         Amount      Shares     Amount   Receivable      Capital        Stage           Total
                           ------------   ------------  ---------   ------  ------------   ------------  ------------   ------------
<S>                         <C>           <C>           <C>         <C>     <C>            <C>           <C>            <C>
INITIAL CAPITALIZATION      48,000,000    $    48,000          -    $   -   $         -    $   529,400   $         -    $   577,400

NET LOSS                             -              -          -        -             -              -    (1,022,600)    (1,022,600)
                           ------------   ------------  ---------   ------  ------------   ------------  ------------   ------------


BALANCE MAY 31, 1983        48,000,000         48,000          -        -             -        529,400    (1,022,600)      (445,200)

PRIVATE PLACEMENT OF
   STOCK                     4,715,000          4,700          -        -             -        584,700             -        589,400
INITIAL PUBLIC OFFERING     13,200,000         13,200          -        -             -      3,946,800             -      3,960,000
OFFERING COSTS                       -              -          -        -             -       (935,435)            -       (935,435)
CASH ON SALE OF COMMON
   STOCK TO OFFICER             50,000             50          -        -             -          7,450             -          7,500
COMPENSATION ON STOCK
   ISSUED TO OFFICER            50,000             50          -        -             -         20,500             -         20,550

NET LOSS                             -              -          -        -             -              -    (1,338,400)    (1,338,400)
                           ------------   ------------  ---------   ------  ------------   ------------  ------------   ------------


BALANCE MAY 31, 1984        66,015,000         66,000          -        -             -      4,153,415    (2,361,000)     1,858,415

NET LOSS                             -              -          -        -             -              -    (1,794,100)    (1,794,100)
                           ------------   ------------  ---------   ------  ------------   ------------  ------------   ------------


BALANCE MAY 31, 1985        66,015,000         66,000          -        -             -      4,153,415    (4,155,100)        64,315

ISSUANCE OF STOCK FOR
   SUBSCRIPTIONS TO
   OFFICER                   8,000,000          8,000          -        -    (1,440,000)     1,440,000             -          8,000

ISSUANCE OF OPTIONS FOR
   SERVICES TO
   CONSULTANTS                       -              -          -        -             -        160,200             -        160,200

NET LOSS                             -              -          -        -             -              -    (1,533,800)    (1,533,800)
                           ------------   ------------  ---------   ------  ------------   ------------  ------------   ------------

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

                                                                F-4
</TABLE>
<PAGE>

<TABLE>
                                                                                       MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                                                                       (DEVELOPMENT STAGE COMPANIES)
                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                                         FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
====================================================================================================================================
<CAPTION>

                                                                                                           Deficit
                                                                                                         Accumulated
                                  Common Stock            Treasury Stock                    Additional   During the
                          ---------------------------  -------------------  Subscriptions    Paid-In     Development
                             Shares         Amount       Shares     Amount   Receivable      Capital        Stage           Total
                          ------------   ------------  ----------   ------  ------------   ------------  ------------   ------------
<S>                        <C>           <C>           <C>          <C>     <C>            <C>           <C>            <C>

BALANCE MAY 31, 1986       74,015,000    $    74,000           -    $   -   $(1,440,000)   $ 5,753,615   $(5,688,900)   $(1,301,285)
CONVERSION OF ADVANCES
   FROM AFFILIATES         10,000,000         10,000           -        -             -        549,900             -        559,900
RESCISSION OF COMMON
   STOCK ISSUED TO
   OFFICER AND HELD IN
   TREASURY                         -              -   8,000,000        -     1,440,000     (1,440,000)            -              -
ISSUANCE OF SHARES FOR
   SERVICES RENDERED          310,000            300           -        -             -         77,900             -         78,200
ISSUANCE OF VIRAL
   RESEARCH TECHNOLOGIES,
   INC. COMMON STOCK FOR
   SERVICES                         -              -           -        -             -        296,700             -        296,700
ISSUANCE OF VIRAL
   RESEARCH TECHNOLOGIES,
   INC. OPTIONS FOR
   SERVICES                         -              -           -        -             -        190,400             -        190,400
ISSUANCE OF OPTIONS FOR
   SERVICES                         -              -           -        -             -         42,200             -         42,200

NET LOSS                            -              -           -        -             -              -    (1,706,300)    (1,706,300)
                          ------------   ------------  ----------   ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1987      84,325,000         84,300   8,000,000        -             -      5,470,715    (7,395,200)    (1,840,185)

ISSUANCE OF SHARES TO
   CONSULTANTS FOR
   SERVICES                 1,540,000          1,500           -        -             -        125,800             -        127,300

STOCK OPTIONS EXERCISED       366,000            400           -        -             -          9,500             -          9,900

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

                                                                F-5
</TABLE>
<PAGE>

<TABLE>
                                                                                       MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                                                                       (DEVELOPMENT STAGE COMPANIES)
                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                                         FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
====================================================================================================================================
<CAPTION>

                                                                                                           Deficit
                                                                                                         Accumulated
                                   Common Stock           Treasury Stock                    Additional   During the
                            -------------------------  -------------------  Subscriptions    Paid-In     Development
                               Shares        Amount       Shares    Amount   Receivable      Capital        Stage           Total
                            ------------   ----------  ----------   ------  ------------   ------------  ------------   ------------
<S>                          <C>           <C>         <C>          <C>     <C>            <C>           <C>            <C>
STOCK OPTIONS ISSUED TO
   EMPLOYEES AND
   CONSULTANTS                        -    $       -           -    $   -   $         -    $    13,800   $         -    $    13,800

ISSUANCE OF COMMON STOCK
   OF SUBSIDIARY                      -            -           -        -             -        290,000             -        290,000

NET LOSS                              -            -           -        -             -              -      (880,200)      (880,200)
                            ------------   ----------  ----------   ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1988        86,231,000       86,200   8,000,000        -             -      5,909,815    (8,275,400)    (2,279,385)
COMMON STOCK ISSUED TO
   OFFICER                    8,000,000        8,000           -        -             -         72,000             -         80,000
STOCK OPTIONS ISSUED TO
   EMPLOYEES AND
   CONSULTANTS                        -            -           -        -             -         15,600             -         15,600
SALE OF COMMON STOCK          2,756,832        2,800           -        -             -        131,600             -        134,400

NET LOSS                              -            -           -        -             -              -      (641,400)      (641,400)
                            ------------   ----------  ----------   ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1989        96,987,832       97,000   8,000,000        -             -      6,129,015    (8,916,800)    (2,690,785)
SALE OF COMMON STOCK            100,000          100           -        -             -          3,200             -          3,300

STOCK OPTIONS ISSUED TO
   EMPLOYEES                          -            -           -        -             -          7,300             -          7,300

NET LOSS                              -            -           -        -             -              -      (522,000)      (522,000)
                            ------------   ----------  ----------   ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1990        97,087,832       97,100   8,000,000        -             -      6,139,515    (9,438,800)    (3,202,185)
STOCK ISSUED FOR SERVICES     2,750,000        2,800           -        -             -         38,300             -         41,100

NET LOSS                                -            -         -        -             -              -      (479,100)      (479,100)
                            ------------   ----------  ----------   ------  ------------   ------------  ------------   ------------

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

                                                                F-6
</TABLE>
<PAGE>

<TABLE>
                                                                                       MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                                                                       (DEVELOPMENT STAGE COMPANIES)
                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                                         FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
====================================================================================================================================
<CAPTION>

                                                                                                           Deficit
                                                                                                         Accumulated
                                   Common Stock           Treasury Stock                    Additional   During the
                            --------------------------  ------------------  Subscriptions    Paid-In     Development
                               Shares        Amount       Shares    Amount   Receivable      Capital        Stage           Total
                           ------------   ------------  ----------  ------  ------------   ------------  ------------   ------------
<S>                        <C>            <C>           <C>         <C>     <C>            <C>           <C>            <C>
BALANCE, MAY 31, 1991       99,837,832    $    99,900   8,000,000   $   -   $         -    $ 6,177,815   $ (9,917,900)  $(3,640,185)
SALE OF COMMON STOCK         2,000,000          2,000           -       -             -         29,400              -        31,400

NET LOSS                             -              -           -       -             -              -       (483,100)     (483,100)
                           ------------   ------------  ----------  ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1992      101,837,832        101,900   8,000,000       -             -      6,207,215    (10,401,000)   (4,091,885)

NET LOSS                             -              -           -       -             -              -       (449,400)     (449,400)
                           ------------   ------------  ----------  ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1993      101,837,832        101,900   8,000,000       -             -      6,207,215    (10,850,400)   (4,541,285)
STOCK ISSUED FOR
   SERVICES                  7,385,300          7,400           -       -             -        208,400              -       215,800

NET LOSS                             -              -           -       -             -              -       (753,900)     (753,900)
                           ------------   ------------  ----------  ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1994
   (restated)              109,223,132        109,300   8,000,000       -             -      6,415,615    (11,604,300)   (5,079,385)
COMMITTED STOCK FOR
   SERVICES                          -              -           -       -             -         13,600              -        13,600

NET LOSS                             -              -           -       -             -              -       (515,600)     (515,600)
                           ------------   ------------  ----------  ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1995
   (restated)              109,223,132        109,300   8,000,000       -             -      6,429,215    (12,119,900)   (5,581,385)

NET LOSS                             -              -           -       -             -              -       (501,600)     (501,600)
                           ------------   ------------  ----------  ------  ------------   ------------  ------------   ------------


BALANCE, MAY 31, 1996
   (restated)              109,223,132        109,300   8,000,000       -             -      6,429,215    (12,621,500)   (6,082,985)

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

                                                                F-7
</TABLE>
<PAGE>

<TABLE>
                                                                                       MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                                                                       (DEVELOPMENT STAGE COMPANIES)
                                                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                                         FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
====================================================================================================================================
<CAPTION>

                                                                                                           Deficit
                                                                                                         Accumulated
                                   Common Stock           Treasury Stock                    Additional   During the
                            --------------------------  ------------------  Subscriptions    Paid-In     Development
                               Shares        Amount       Shares    Amount   Receivable      Capital        Stage           Total
                           ------------   ------------  ----------  ------  ------------   ------------  -------------  ------------
<S>                        <C>            <C>           <C>         <C>     <C>            <C>           <C>            <C>
STOCK ISSUED FOR SERVICES    3,360,300    $     3,300           -   $   -   $         -    $    89,100   $          -   $    92,400

STOCK ISSUED TO EMPLOYEES
   AS COMPENSATION          11,980,000         12,000           -       -             -        322,900              -       334,900

NET LOSS                             -              -           -       -             -              -       (957,400)     (957,400)
                           ------------   ------------  ----------  ------  ------------   ------------  -------------  ------------


BALANCE, MAY 31, 1997      124,563,432    $   124,600   8,000,000   $   -   $         -    $ 6,841,215   $(13,578,900)  $(6,613,085)
                           ============   ============  ==========  ======  ============   ============  =============  ============

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

                                                                F-8
</TABLE>
<PAGE>

<TABLE>
                                              MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                              (DEVELOPMENT STAGE COMPANIES)
                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        FOR THE YEAR ENDED MAY 31, 1997 AND
                                FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
===========================================================================================
<CAPTION>

                                                                                 For the
                                                                                Period from
                                                                                  May 4,
                                                                  For the          1982
                                                                Year Ended      (Inception)
                                                                  May 31,       to May 31,
                                                                   1997            1997
                                                              -------------   -------------
                                                                (restated)      (restated)
<S>                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                   $   (957,400)   $(13,578,900)
   Adjustments to reconcile net loss to net cash
     used in operating activities
       Depreciation and amortization                                   500         135,600
       Warrants and options issued to employees and vendors              -         688,900
       Minority interest in losses of subsidiary                         -        (329,800)
       Stock issued to employees and vendors                       427,300         976,300
       Accrued interest on advances from affiliates                236,200       1,683,600
   Increase in
     Prepaid expenses                                                    -            (600)
   Increase in
     Accounts payable and accrued expenses                          50,100       1,339,885
     Accrued compensation                                          240,200       2,235,800
                                                              -------------   -------------

         Net cash used in operating activities                      (3,100)     (6,849,215)
                                                              -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of furniture and equipment                                   -        (135,600)
                                                              -------------   -------------

         Net cash used in investing activities                           -        (135,600)
                                                              -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from advances from affiliates, net                       3,100       2,229,415
   Proceeds from loan payable                                            -          71,000
   Proceeds from sale of stock, net                                      -       4,684,400
                                                              -------------   -------------

         Net cash provided by financing activities                   3,100       6,984,815
                                                              -------------   -------------

Net increase in cash                                                     -               -

CASH, BEGINNING OF PERIOD                                                -               -
                                                              -------------   -------------

CASH, END OF PERIOD                                           $          -    $          -
                                                              =============   =============

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

                                            F-9
</TABLE>
<PAGE>

<TABLE>
                                              MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                              (DEVELOPMENT STAGE COMPANIES)
                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        FOR THE YEAR ENDED MAY 31, 1997 AND
                                FOR THE PERIOD FROM MAY 4, 1982 (INCEPTION) TO MAY 31, 1997
===========================================================================================
<CAPTION>

                                                                                 For the
                                                                                Period from
                                                                                  May 4,
                                                                  For the          1982
                                                                Year Ended      (Inception)
                                                                  May 31,       to May 31,
                                                                   1997            1997
                                                              -------------   -------------
                                                                (restated)      (restated)
<S>                                                           <C>             <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

   INTEREST PAID                                              $          -    $          -
                                                              =============   =============

   INCOME TAXES PAID                                          $          -    $          -
                                                              =============   =============

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

                                           F-10
</TABLE>
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 1 - DESCRIPTION OF BUSINESS

         Meditech Pharmaceuticals, Inc. ("Meditech") is a drug development
         company, which is focused in the areas of research, development, and
         marketing in the biomedical industry, with an emphasis on
         anti-infective drugs. Meditech was incorporated in Nevada on March 21,
         1983 and completed its initial public offering in August 1983. Since
         then, it has been engaged in research and development activities
         associated with bringing its products to market.


NOTE 2 - RESTATEMENTS

         Shares Issued and Outstanding Restatement
         -----------------------------------------
         Meditech has restated its prior period financial statements for certain
         adjustments related to accounting for shares issued during the years
         ended May 31, 1994 through May 31, 1997. Meditech had recorded certain
         stock grants to consultants that were not transacted during the years
         ended May 31, 1995 and 1994. In addition, Meditech incorrectly recorded
         the acquisition of 8,000,000 shares of common stock into treasury as a
         retirement of those shares. The resulting misstatements affect shares
         outstanding in those periods as follows:

                                                  Common
                                                  Shares            Common
                                               Outstanding,         Shares
                   Year Ending                 as Previously     Outstanding,
                      May 31,                    Reported        as Corrected
                  --------------              ---------------    ------------
                                                 (in 000s)         (in 000s)

                      1994                           102,593         109,223
                      1995                           103,681         109,223
                      1996                           103,681         109,223
                      1997                           119,016         124,563


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Principles of Consolidation
         ---------------------------
         The consolidated financial statements include the accounts of Meditech
         and its 37% owned and controlled subsidiary Viral Research
         Technologies, Inc. ("Viral") (collectively, the "Company"). All
         significant intercompany transactions and balances have been eliminated
         in consolidation.

                                      F-11
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Basis of Presentation
         ---------------------
         The accompanying consolidated financial statements have been prepared
         in conformity with generally accepted accounting principles, which
         contemplate continuation of the Company as a going concern. The Company
         incurred a net loss of $957,400 during the year ended May 31, 1997. In
         addition, the Company had an accumulated deficit of $13,578,900 as of
         May 31, 1997. Management recognizes that the Company must generate
         additional resources and the eventual achievement of sustained
         profitable operations. Management's plans include obtaining additional
         capital through equity financing and the extension of existing debt.
         The consolidated financial statements do not include any adjustments
         that might be necessary if the Company is unable to continue as a going
         concern.

         Development Stage Enterprise
         ----------------------------
         The Company is a development stage company as defined in Statement of
         Financial Accounting Standards ("SFAS") No. 7, "Accounting and
         Reporting by Development Stage Enterprises." The Company is devoting
         substantially all of its present efforts to establish a new business,
         and its planned principal operations have not yet commenced. All losses
         accumulated since inception have been considered as part of the
         Company's development stage activities.

         Estimates
         ---------
         In preparing financial statements in conformity with generally accepted
         accounting principles, management makes estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosures
         of contingent assets and liabilities at the date of the financial
         statements, as well as the reported amounts of revenues and expenses
         during the reporting period. Actual results could differ from those
         estimates.

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

         Offering Costs
         --------------
         Offering costs arose from warrants issued to the underwriter currently
         involved with offerings of the Company's securities. Such costs are
         offset against the proceeds of such offerings upon their successful
         completion and are charged to operations in the event the offering is
         not successful.

         Revenue
         -------
         Revenue represents license fees that are recognized when earned over
         the period of the applicable license agreement.

                                      F-12
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Impairment of Long-Lived Assets
         -------------------------------
         The Company reviews its long-lived assets for impairment whenever
         events or changes in circumstances indicate that the carrying amount of
         an asset may not be recoverable. Recoverability of assets to be held
         and used is measured by a comparison of the carrying amount of the
         assets to future net cash flows expected to be generated by the assets.
         If the assets are considered to be impaired, the impairment to be
         recognized is measured by the amount by which the carrying amount
         exceeds the fair value of the assets. To date, no impairment has
         occurred.

         Income Taxes
         ------------
         The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which
         requires the recognition of deferred tax assets and liabilities for the
         expected future tax consequences of events that have been included in
         the financial statements or tax returns. Under this method, deferred
         income taxes are recognized for the tax consequences in future years of
         differences between the tax bases of assets and liabilities and their
         financial reporting amounts at each period end based on enacted tax
         laws and statutory tax rates applicable to the periods in which the
         differences are expected to affect taxable income. Valuation allowances
         are established, when necessary, to reduce deferred tax assets to the
         amount expected to be realized.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         The Company measures its financial assets and liabilities in accordance
         with generally accepted accounting principles. For certain of the
         Company's financial instruments, including cash, accounts payable and
         accrued expenses, and accrued compensation, the carrying amounts
         approximate fair value due to their short maturities.

         Loss per Share
         --------------
         The Company utilizes SFAS No. 128, "Earnings per Share." Basic loss per
         share is computed by dividing loss available to common stockholders by
         the weighted-average number of common shares outstanding. Diluted loss
         per share is computed similar to basic loss per share except that the
         denominator is increased to include the number of additional common
         shares that would have been outstanding if the potential common shares
         had been issued and if the additional common shares were dilutive. For
         the year ended May 31, 1997, the Company incurred a net loss;
         therefore, basic and diluted loss per share are the same.

                                      F-13
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING FOR STOCK OPTIONS AND WARRANTS

         The Company's policy is to account for stock-based compensation in
         accordance with SFAS No. 123, "Accounting for Stock-Based
         Compensation." As allowed by SFAS No. 123, the Company has elected to
         continue to measure compensation cost under Accounting Principles
         Bulletin ("APB") Opinion No. 25, "Accounting for Stock Issued to
         Employees," and comply with the pro forma disclosure requirements of
         the standard.

         Recently Issued Accounting Pronouncements
         -----------------------------------------
         In June 1999, the Financial Accounting Standards Board ("FASB") issued
         SFAS No. 136, "Transfer of Assets to a Not-for-Profit Organization or
         Charitable Trust that Raises or Holds Contributions for Others." This
         statement is not applicable to the Company.

         In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
         Instruments and Hedging Activities." The Company does not expect
         adoption of SFAS No. 137 to have a material impact, if any, on its
         financial position or results of operations.

         In December 1999, the Securities and Exchange Commission staff released
         Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," to
         provide guidance on the recognition, presentation, and disclosure of
         revenue in financial statements. Changes in accounting to apply the
         guidance in SAB No. 101 may be accounted for as a change in accounting
         principle effective January 1, 2000. Management has not yet determined
         the complete impact of SAB No. 101 on the Company; however, management
         does expect that application of SAB No. 101 will have a material effect
         on the Company's revenue recognition and results of operations.

         In March 2000, the FASB issued FASB Interpretation No. 44, "Accounting
         for Certain Transactions Involving Stock Compensation," (an
         Interpretation of Accounting Principles Bulletin Opinion No. 25 ("APB
         25")) ("FIN 44"). FIN 44 provides guidance on the application of APB
         25, particularly as it relates to options. The effective date of FIN 44
         is July 1, 2000, and the Company has adopted FIN 44 as of that date.

         In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
         Instruments and Certain Hedging Activities." This statement is not
         applicable to the Company.

         In June 2000, the FASB issued SFAS No. 139, "Rescission of FASB
         Statement No. 53 and Amendments to Statements No. 63, 89, and 121."
         This statement is not applicable to the Company.

         In September 2000, the FASB issued SFAS No. 140, "Accounting for
         Transfers and Servicing of Financial Assets and Extinguishments of
         Liabilities, a replacement of FASB Statement No. 125." This statement
         is not applicable to the Company.

                                      F-14
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 4 - MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY

         On January 22, 1987, the Company and a 50% investor formed VRT, Inc.
         ("VRT"), a Nevada corporation, for the purposes of developing a
         marketing strategy for its products. On January 26, 1987, the Company
         granted certain exclusive rights to VRT to market and distribute the
         Company's products. The agreement expired on November 30, 1996.

         On April 30, 1987, pursuant to a merger agreement, VRT was combined
         with Viral, a Nevada corporation and an inactive public shell, which
         became the surviving corporation. In the transaction, Viral issued
         15,000,000 shares of common stock to the Company and its investor for
         all outstanding shares of VRT. After the merger, the Company owned 37%
         of Viral. Viral's Board of Directors is controlled by officers and
         directors of the Company, whose Chief Executive Officer is the
         Chairman. Additionally, the companies have the same management team,
         and Viral is economically dependent on the Company to fund its
         continuing operations. Therefore, Viral has been consolidated as it is
         effectively controlled by the Company.

         At May 31, 1997, the assets and liabilities of Viral were as follows:

                  Assets
                      Due from Meditech                         $      400,000
                                                                ---------------

                               TOTAL ASSETS                     $      400,000
                                                                ===============

                  Liabilities
                      Accounts payable                          $        5,000
                      Due to Meditech                                  129,000
                                                                ---------------

                           Total liabilities                           134,000

                  Equity                                               266,000
                                                                ---------------

                               TOTAL LIABILITIES AND EQUITY     $      400,000
                                                                ===============

         Amounts recorded in the minority interest on the accompanying balance
         sheet represent the pro-rata portion of Viral's equity attributable to
         minority stockholders.

                                      F-15
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 5 - COMMITMENTS AND CONTINGENCIES

LEASES

         Currently, the Company uses its operating facilities, which are
         provided by its Chief Executive Officer without a lease. Amounts
         related to these facilities are immaterial to the financial statements.
         There is no guarantee the officer will be willing to provide these
         facilities in the future.

LITIGATION

         The Company may become involved in various legal proceedings and claims
         which arise in the ordinary course of its business. Management does not
         believe that these matters will have a material adverse effect on the
         Company's consolidated position or results of operations.


NOTE 6 - STOCKHOLDERS' DEFICIT

         Preferred Stock
         ---------------
         The Company is authorized to issue 25,000,000 shares of its $0.001 par
         value preferred stock. The Company has not issued any preferred stock
         to date.

         Common Stock
         ------------
         On June 30, 1983, the Company sold 4,715,000 shares of its common stock
         at $0.125 per share in a private offering. Total gross proceeds
         received from the private offering, net of $250,000 of cancelled stock
         subscriptions, were $589,400.

         In July and August 1983, the Company sold 12,000,000 and 1,200,000
         shares, respectively, of its common stock at $0.30 per share in a
         public offering. Total gross proceeds received from the offering were
         $3,960,000.

         In December 1983, the Company sold 50,000 shares of common stock to an
         officer at $0.15 per share for $7,500 and recorded $6,500 in
         compensation expense, representing the difference between the price
         paid and the discounted market value of the stock at the date of
         issuance.

         In February 1984, the Company issued 50,000 shares of common stock to a
         director for services. The Company recorded $14,000 in compensation
         expense, representing the market value of the services at the date of
         issuance.

         On June 1, 1984, the Company issued 100,000 shares of common stock to
         its former Chief Financial Officer for services rendered during the
         six-month period ended May 31, 1984. Subsequently, this grant of shares
         was rescinded, and an option to purchase common stock was issued.

                                      F-16
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 6 - STOCKHOLDERS' DEFICIT (Continued)

         Common Stock (Continued)
         ------------
         In October 1985, the Company sold 8,000,000 shares of its common stock
         to its Chief Executive Officer in exchange for the settlement of an
         $8,000 salary obligation and a note in the amount of $1,440,000 from
         the officer. In December 1986, the note was cancelled and the 8,000,000
         shares taken into treasury. At that date, the officer received an
         option to purchase 8,000,000 shares of the Company's common stock for
         $0.01 per share. This option was exercised in March 1989 for $80,000 in
         cash.

         In June 1986, the Company converted advances of $559,900 from
         Petro-Med, Inc. into 10,000,000 shares of common stock of the Company.

         On April 7, 1987, the Company issued 210,000 shares of common stock to
         two consultants for services rendered. The Company recorded $52,200 in
         compensation expense, representing the discounted market value of the
         stock at the date of issuance.

         On April 16, 1987, the Company issued 100,000 shares of common stock to
         three consultants for services rendered. The Company recorded $26,000
         in compensation expense, representing the discounted market value of
         the stock at the date of issuance.

         During the year ended May 31, 1987, Viral issued 350,000 shares of its
         common stock to consultants for services valued at $296,700.

         On June 11, 1987, the Company issued 100,000 shares of common stock to
         a consultant for services rendered valued at $12,200.

         On October 2, 1987, the Company issued 665,000 shares of common stock
         to two consultants for services rendered valued at $51,100.

         On March 2, 1988, the Company issued 150,000 shares of common stock to
         a consultant for services rendered valued at $13,900.

         On March 17, 1988, the Company issued 25,000 shares of common stock to
         a consultant for services rendered valued at $3,200.

         On March 22, 1988, the Company issued 100,000 shares of common stock to
         a consultant for services rendered valued at $13,000.

         On May 25, 1988, the Company issued 500,000 shares of common stock to a
         consultant for services rendered valued at $33,900.

         During the year ended May 31, 1988, Viral sold shares of its common
         stock for net proceeds of $290,000.

                                      F-17
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 6 - STOCKHOLDERS' DEFICIT (CONTINUED)

         Common Stock (Continued)
         ------------
         On March 27, 1989, the Company sold 250,000 shares of common stock for
         $0.10 per share for gross proceeds of $25,000.

         During the year ended May 31, 1989, the Company sold 2,506,832 shares
         of common stock for net proceeds of $109,400.

         During the year ended May 31, 1990, the Company sold 100,000 shares of
         its common stock in a private transaction for net proceeds of $3,300.

         On January 2, 1991, the Company issued 2,750,000 shares of common stock
         as compensation for services valued at $41,100.

         During the year ended May 31, 1992, the Company sold 2,000,000 shares
         of its common stock in a private transaction for net proceeds of
         $31,400.

         On July 12, 1993, the Company issued 5,700,000 shares of its common
         stock to employees as compensation and for relief of certain accrued
         salaries. The aggregate value of the compensation was $151,000, which
         included forgiveness of $90,450 of accrued payroll.

         On July 12, 1993, the Company issued 1,685,300 shares of common stock
         to consultants for services valued at $64,800.

         During the year ended May 31, 1994, the Company committed certain stock
         to a consultant for services. The services were performed through the
         year ended May 31, 1997. The Company issued 3,360,300 shares of stock
         on July 11, 1996 and recognized consulting expense in the amount of
         $92,400 during the year ended May 31, 1997. Consulting expense related
         to years prior to May 31, 1997 was immaterial.

         On July 11, 1996, the Company issued 11,980,000 shares of common stock
         to employees for services and recognized $334,900 in compensation
         expense.

         Stock Purchase Warrants and Options
         -----------------------------------
         During the year ended May 31, 1985, the Company issued options to
         purchase 480,000 shares of common stock at various exercise prices to
         employees and consultants of the Company. The fair market value of the
         options was immaterial. None of these options were exercised, and all
         have expired.

                                      F-18
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 6 - STOCKHOLDERS' DEFICIT (CONTINUED)

         Stock Purchase Warrants and Options (Continued)
         -----------------------------------
         On August 16, 1985, the Company issued options to purchase 1,600,000
         shares of its common stock at $0.023 per share to employees of the
         Company. These options were issued at an exercise price that
         approximated market, and as such, no compensation expense was recorded.
         All of these options have expired.

         On October 28, 1985, the Company issued options to purchase 8,000,000
         shares of its common stock at $0.01 per share in connection with the
         cancellation of a subscription receivable to its Chief Executive
         Officer. Related to these options, the Company recognized compensation
         expense in the amount of $104,000.

         On February 27, 1986, the Company issued options to purchase 50,000
         shares of its common stock at the average of the bid/ask price on the
         date of exercise to a consultant of the Company. Additionally, during
         the year ended May 31, 1986, the Company issued options to purchase
         462,000 shares of its common stock to various consultants at exercise
         prices ranging from $0.001 to $0.023 per share. The total consulting
         expense recognized in connection with these options was $56,200. All of
         these options have expired or been exercised.

         During the year ended May 31, 1987, the Company issued options to
         purchase 1,675,000 shares of its common stock to employees of the
         Company. These options were issued with an exercise price that
         approximated the fair market value of the underlying common stock, and
         as such, no compensation expense was recognized. All of these options
         have expired.

         During the year ended May 31, 1987, the Company issued options to
         purchase 975,000 shares of its common stock to consultants of the
         Company at exercise prices ranging from $0.01 to $0.08 per share. In
         connection with these options, the Company recognized consulting
         expense of $42,200. All of these options have expired.

         During the year ended May 31, 1987, the Company's consolidated
         subsidiary issued stock options to purchase 350,000 shares of Viral's
         common stock at various exercise prices to consultants for services
         valued at $190,400. All of these options have expired.

         During the year ended May 31, 1988, the Company issued options to
         purchase 550,000 shares of its common stock at exercise prices ranging
         from $0.05 to $0.15 per share to consultants for services rendered. In
         connection with these options, the Company recognized consulting
         expense in the amount of $13,800. All of these options have expired.

                                      F-19
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 6 - STOCKHOLDERS' DEFICIT (CONTINUED)

         Stock Purchase Warrants and Options (Continued)
         -----------------------------------
         During the year ended May 31, 1989, the Company issued options to
         purchase 450,000 shares of its common stock at exercise prices ranging
         from $0.01 to $0.07 per share to consultants for services rendered. In
         connection with these options, the Company recognized consulting
         expense in the amount of $15,600. All of these options have expired.

         During the year ended May 31, 1990, the Company issued options to
         purchase 100,000 shares of its common stock at an exercise price of
         $0.06 per share to two consultants for services rendered. In connection
         with these options, the Company recognized consulting expense in the
         amount of $7,300. All of these options have expired.


NOTE 7 - INCOME TAXES

         Significant components of the Company's deferred tax assets and
         liabilities for income taxes consisted of the following:

                  Deferred tax assets
                      Reserve for finance charges            $       340,000
                      Accrued compensation                           894,300
                      Interest on related party advances             673,400
                  Operating losses                                 3,171,400
                  Valuation allowance                             (5,079,100)
                                                             ----------------

                           NET DEFERRED TAX ASSET            $             -
                                                             ================

         The federal operating loss carryforwards at May 31, 1997 were
         approximately $8,809,500.


NOTE 8 - RELATED PARTY TRANSACTIONS

         Since inception, the Company has received advances from Petro-Med, Inc,
         an affiliate, to fund its working capital requirements. At May 31,
         1997, the Company maintained short-term advances from an affiliate of
         $2,753,500. Accrued interest is attributed to the outstanding balance
         as incurred. The advances bear interest at 9% per annum on any
         outstanding balance. Interest expense on the advances was $236,100 for
         the year ended May 31, 1997.

                                      F-20
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 8 - RELATED PARTY TRANSACTIONS (CONTINUED)

         At May 31, 1997, the Company maintained unsecured advances from
         stockholders in the amount of $22,200. The advances are unsecured,
         non-interest-bearing, and are payable on demand.

         Due to cash shortages, the Company has accrued deferred salaries and
         related taxes payable to certain officers who are stockholders and
         directors of the Company. At May 31, 1997, the aggregate amount of
         accrued compensation was $2,235,800.

         The Company has entered into certain employment agreements with its
         officers and stockholders (see Note 9).

         The Company maintains its primary place of business in facilities owned
         by the Chief Executive Officer (see Note 5).


NOTE 9 - SUBSEQUENT EVENTS

         Employment Agreements
         ---------------------
         The Company entered into an employment agreement dated as of February
         3, 2000 with its Chief Executive Officer, contingent upon completion of
         the offering discussed below. The agreement is for a three-year term
         and provides for a base salary of $150,000 per annum for the first year
         with an increase at least equal to the consumer price index over each
         succeeding year. The agreement provides for a severance payment
         including the unearned salary for the remainder of the contract plus
         any prorated earned bonuses in the event of termination without cause
         or upon change of control. Additionally, the agreement grants options
         to purchase 15,950,000 shares of common stock exercisable at various
         prices and vesting over the course of his employment agreement.

         The Company entered into an employment agreement dated as of February
         3, 2000 with its Chief Financial Officer, contingent upon completion of
         the offering discussed below. The agreement is for a three-year term
         providing for a base salary of $120,000 per annum for the first year
         and not less than $120,000 per annum during the second and third years
         of the agreement. In addition, the officer will be granted a total of
         13,950,000 warrants exercisable at various prices and vesting over the
         course of the agreement. The agreement provides for a severance payment
         including the remainder of the base salary due under the agreement if
         the officer is discharged without cause or if the officer is terminated
         within 12 months of a change of control of the Company. The severance
         payment will be equal to 12 months of the current salary.

                                      F-21
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 9 - SUBSEQUENT EVENTS (Continued)

         License Agreement
         -----------------
         On February 3, 2000, the Company received $25,000 from Immune Network
         Research, Ltd. ("INR"), a Canadian pharmaceutical development company,
         under a letter of intent. The payment was made for a one-year
         irrevocable option granting the right to negotiate for an exclusive
         license for pharmaceutical applications worldwide outside of the United
         States. The Company then received an additional $100,000 from INR in
         anticipation of a definitive agreement. This amount has been recorded
         as deferred revenue until an agreement is executed, at which time it
         will be recognized over the term of the agreement.

         During the three months ended November 30, 2000, INR exercised options
         to purchase 3,333,333 shares of common stock and paid $100,000 to the
         Company. Under the terms of the letter, the Company issued a one-year
         option to INR for 10,000,000 shares of common stock, immediately
         exercisable at $0.03 per share. In return, the Company will receive
         royalties equal to 7% of net sales for all MTCH-24(TM) products sold
         and 4% of net sales for all Viraplex(R) products sold by INR. During
         the second quarter of 2000, the agreement was executed. The option was
         valued at $400,000, using the Black-Scholes option-pricing model, which
         has been recorded as an operating expense on the date granted. This
         amount has been recorded as deferred revenue until such a time that the
         agreement is executed.

         Common Stock
         ------------
         On July 9, 1998, the Company issued 3,500,000 shares of common stock to
         employees for a total of $123,500 in compensation for services.

         On July 9, 1998, the Company issued 1,300,000 shares of common stock to
         consultants for a total of $53,000 in compensation for services.

         During the year ended May 31, 2000, the Company issued 450,000 shares
         of common stock to employees for compensation. The shares were valued
         at $11,250.

         During the year ended May 31, 2000, the Company issued 1,400,000 shares
         of common stock to vendors for services rendered. In connection with
         the issuance, the company recorded $75,000 in consulting expense.

         During the year ended May 31, 2000, holders of 5,000,000 employee
         options exercised their options to purchase common stock for
         forgiveness of $50,000 of accrued compensation, which represented the
         exercise price of the options.

         During the year ended May 31, 2000, holders of 500,000 options
         exercised their option to purchase common stock for a subscription
         receivable of $10,000.

                                      F-22
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 9 - SUBSEQUENT EVENTS (CONTINUED)

         Common Stock (Continued)
         ------------
         On October 30, 2000, a holder exercised its warrants to purchase
         3,333,333 shares of common stock.

         Stock Purchase Warrants and Options
         On January 17, 2000, the Company issued options to purchase 5,000,000
         shares of common stock to employees and stockholders of the Company.
         The options are exercisable at $0.21 per share for 2,500,000 options
         and $0.05 per share for 2,500,000 options and expire on February 3,
         2007. The Company recognized $15,435 as compensation expense related to
         these options.

         On February 1, 2000, the Company issued to employees of the Company
         options to purchase 700,000 shares of common stock exercisable at $0.21
         per share, vesting immediately and expiring on May 1, 2007. No
         compensation expense was recognized as the exercise price at the time
         of the grant approximated the fair market value of the stock at the
         date of grant.

         On February 1, 2000, the Company issued options to purchase 900,000
         shares of its common stock to consultants of the Company. The options
         are exercisable at $0.21 per share and expire on May 31, 2006. Related
         to these options, the Company recognized $27,000 in compensation
         expense, which represents the fair market value of the options at the
         date of grant.

         On February 1, 2000, the Company issued options to purchase 50,000
         shares of its common stock to a consultant of the Company. The options
         are exercisable at $0.05 per share and expire on May 1, 2007. Related
         to these options, the Company recognized consulting expense of $2,000.

         On May 16, 2000, the Company issued warrants to purchase 7,000,000
         shares of common stock as a condition of entering into the investment
         agreement described below. The warrants are exercisable immediately at
         $0.03 per share and expire in five years. The warrants are valued at
         $2,380,000 and represent offering costs. When the transaction closes,
         it will be reflected as a reduction in the net proceeds from the
         offering or if the transaction is aborted, will be charged to
         operations.

         During the year ended May 31, 2000, the Company issued options to
         purchase 5,800,000 shares of common stock exercisable at $0.01 per
         share, vesting immediately and expiring on May 31, 2006 to employees of
         the Company. Related to these options, the Company recognized $20,000
         of compensation expense, which represents the intrinsic value of the
         options. As of May 31, 2000, options representing 300,000 shares of
         stock remained unexercised.

                                      F-23
<PAGE>

                                   MEDITECH PHARMACEUTICALS, INC. AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                    MAY 31, 1997
================================================================================


NOTE 9 - SUBSEQUENT EVENTS (CONTINUED)

         Investment Agreement
         --------------------
         On June 30, 2000 and subsequently amended on February 15, 2001, the
         Company entered into an investment agreement with Swartz Private
         Equity, LLC ("Swartz"). The investment agreement entitles the Company
         to issue and sell common stock to Swartz in the form of put rights for
         up to an aggregate of $30,000,000 from time to time during a three-year
         period beginning on the date of an effective registration statement.

         Under the agreement, in order to invoke a put right, the Company must
         have an effective registration statement on file with the Securities
         and Exchange Commission and provide Swartz with at least 10 but not
         more than 20 business days advance notice of the date on which the
         Company intends to exercise a put right and must indicate the number of
         shares of common stock the Company intends to sell to Swartz. The
         Company may also designate a maximum dollar amount of common stock (not
         to exceed $2,000,000), which the Company will sell to Swartz during the
         put and/or a minimum purchase price per common share at which Swartz
         may purchase shares during the put. The number of shares of common
         stock sold to Swartz in a put may not exceed the lesser of (i)
         1,500,000 shares; (ii) 15% of the aggregate daily reported trading
         volume of the Company's common shares, excluding certain block trades,
         during the 20 business days after the date of a put notice, with
         certain restrictions; (iii) 15% of the aggregate daily reported trading
         volume of common shares during the 20 business days before the put
         date, excluding certain block trades; or (iv) a number of shares that,
         when added to the number of shares acquired by Swartz under the
         investment agreement during the 31 days preceding the put date, would
         exceed 9.99% of the total number of shares of common stock outstanding.

         For each common share, Swartz will pay the Company the lesser of (i)
         the market price for such put, minus $0.075 or (ii) 91% of the market
         price for the put. This may be construed as a below-market issuance of
         securities and could result in significant charges to the Company's
         earnings.

         Further, under the provisions of the agreement, during the term of the
         investment agreement and for a period of one year thereafter, the
         Company is prohibited from engaging in certain financing transactions
         involving the Company's equity securities.

                                      F-24
<PAGE>
<TABLE>
<CAPTION>
                                                 SCHEDULE II

                          Amounts receivable from related parties and underwriters,
                              promoters and employees other than related parties

                                                                     Reductions        Balance at end of Period
                                       Balance at               -----------------------------------------------
                                       Beginning                 Amounts      Amounts                  Not
Name of Debtor          Period         of Period    Additions   Collected   Written Off   Current    Current
==================      ======         ==========   =========   =========   ===========   =======    ========
<S>                    <C>             <C>          <C>         <C>          <C>           <C>       <C>
Mas Industries, Inc.   6/1/96 to          $250          -           -            -         $250         -
                       5/31/97

                       6/1/95 to          $250          -           -            -         $250         -
                       5/31/96

                       6/1/94 to          $250          -           -            -         $250         -
                       5/31/95

                       6/1/93 to          $250          -           -            -         $250         -
                       5/31/94

                       6/1/92 to          $250          -           -            -         $250         -
                       5/31/93

                       6/1/91 to          $250          -           -            -         $250         -
                       5/31/92

                       6/1/90 to          $250          -           -            -         $250         -
                       5/31/91



Skin Control           6/1/96 to          $900          -           -            -         $900         -
Systems, Inc.          5/31/97

                       6/1/95 to          $900          -           -            -         $900         -
                       5/31/96

                       6/1/94 to          $900          -           -            -         $900         -
                       5/31/95

                       6/1/93 to          $900          -           -            -         $900         -
                       5/31/94

                       6/1/92 to          $900          -           -            -         $900         -
                       5/31/91

                       6/1/91 to          $900          -           -            -         $900         -
                       5/31/92

                       6/1/90 to          $900          -           -            -         $900         -
                       5/31/90


JCR Marketing, Inc.    6/1/96 to          $100          -           -            -         $100         -
                       5/31/97

                       6/1/95 to          $100          -           -            -         $100         -
                       5/31/96

                       6/1/94 to          $100          -           -            -         $100         -
                       5/31/95

                       6/1/93 to          $100          -           -            -         $100         -
                       5/31/94

                       6/1/92 to          $100          -           -            -         $100         -
                       5/31/91

                       6/1/91 to          $100          -           -            -         $100         -
                       5/31/92

                       6/1/90 to          $100          -           -            -         $100         -
                       5/31/91

</TABLE>
                                                               F-25
<PAGE>
<TABLE>
<CAPTION>


                                                     SCHEDULE V

                                             PROPERTY, PLANT & EQUIPMENT



                                      BALANCE AT                                          OTHER
                                      BEGINNING OF                       RETIREMENT       CHANGES          BALANCE AT
CLASSIFICATION                        PERIOD            ADDITIONS        AT COST          ADD (DEDUCT)     END OF PERIOD
--------------                        ------------      ---------        ----------       ------------     -----------

<S>                                    <C>              <C>              <C>              <C>              <C>
YEAR ENDED MAY 31, 1997
FURNITURE, FIXTURES &
EQUIPMENT                              $135,600         $      0         $      0         $      0         $135,600
CLINIC EQUIPMENT                       $      0         $      0         $      0         $      0         $      0
LEASEHOLD IMPROVEMENTS                 $      0         $      0         $      0         $      0         $      0
                                       --------         --------         --------         --------         --------
                                       $135,600         $      0         $      0         $      0         $135,600


YEAR ENDED MAY 31, 1996
FURNITURE, FIXTURES &
EQUIPMENT                              $135,600         $      0         $      0         $      0         $135,600
CLINIC EQUIPMENT                       $      0         $      0         $      0         $      0         $      0
LEASEHOLD IMPROVEMENTS                 $      0         $      0         $      0         $      0         $      0
                                       --------         --------         --------         --------         --------

                                       $135,600         $      0         $      0         $      0         $135,600

YEAR ENDED MAY 31, 1995:
FURNITURE, FIXTURES &                  $135,600         $      0         $      0         $      0         $135,600
EQUIPMENT
CLINIC EQUIPMENT                       $      0         $      0         $      0         $      0         $      0
LEASEHOLD IMPROVEMENTS                 $      0         $      0         $      0         $      0         $      0
                                       --------         --------         --------         --------         --------

                                       $135,600         $      0         $      0         $      0         $135,600

YEAR ENDED MAY 31, 1994
FURNITURE, FIXTURES &
EQUIPMENT                              $135,600         $      0         $      0         $      0         $135,600
CLINIC EQUIPMENT                       $      0         $      0         $      0         $      0         $      0
LEASEHOLD IMPROVEMENTS                 $      0         $      0         $      0         $      0         $      0
                                       --------         --------         --------         --------         --------

                                       $135,600         $      0         $      0         $      0         $135,600

YEAR ENDED MAY 31, 1993:
FURNITURE, FIXTURES &                  $135,600         $      0         $      0         $      0         $135,600
EQUIPMENT
CLINIC EQUIPMENT                       $      0         $      0         $      0         $      0         $      0
LEASEHOLD IMPROVEMENTS                 $      0         $      0         $      0         $      0         $      0
                                       --------         --------         --------         --------         --------

                                       $135,000         $      0         $      0         $      0         $135,000

YEAR ENDED MAY 31,1992
FURNITURE, FIXTURES &                  $132,700         $      0         $      0         $      0         $132,700
EQUIPMENT
CLINIC EQUIPMENT                       $      0         $      0         $      0         $      0         $      0
LEASEHOLD IMPROVEMENTS                 $      0         $      0         $      0         $      0         $      0
                                       --------         --------         --------         --------         --------

                                       $132,700         $      0         $      0         $      0         $132,700


</TABLE>

                                                               F-26

<PAGE>
<TABLE>
<CAPTION>


                                                        SCHEDULE Vl

                   ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT & EQUIPMENT


                                             BALANCE AT       ADDITIONS                       OTHER
                                             BEGINNING OF     CHARGED TO                      CHANGES        BALANCE AT
DESCRIPTION                                  PERIOD           COSTS/EXPENSES  RETIREMENT      ADD (DEDUCT)   END OF PERIOD
-----------                                  ------------     --------------  ----------      ------------   ---------
<S>                                         <C>               <C>            <C>              <C>            <C>

YEAR ENDED MAY 31, 1997
FURNITURE, FIXTURES &                         $135,100        $    500        $      0        $      0        $135,600
EQUIPMENT
CLINIC EQUIPMENT                              $      0        $      0        $      0        $      0        $      0
LEASEHOLD IMPROVEMENTS                        $      0        $      0        $      0        $      0        $      0
                                              --------        --------        --------        --------        --------
                                              $135,100        $    500        $      0        $      0        $135,600

YEAR ENDED MAY 31 1996:
FURNITURE, FIXTURES &                         $134,500        $    600        $      0        $      0        $135,100
EQUIPMENT
CLINIC EQUIPMENT                              $      0        $      0        $      0        $      0        $      0
LEASEHOLD IMPROVEMENTS                        $      0        $      0        $      0        $      0        $      0
                                              --------        --------        --------        --------        --------
                                              $134,500        $    600        $      0        $      0        $135,100
YEAR ENDED MAY 31, 1995
FURNITURE, FIXTURES &                         $134,000        $    500        $      0        $      0        $134,000
EQUIPMENT
CLINIC EQUIPMENT                              $      0        $      0        $      0        $      0        $      0
LEASEHOLD IMPROVEMENTS                        $      0        $      0        $      0        $      0             $0'
                                              --------        --------        --------        --------             --
                                              $134,000        $    500        $      0        $      0        $134,000

YEAR ENDED MAY 31 1994
FURNITURE, FIXTURES & EQUIPMENT               $133,400        $    600        $      0        $      0        $133,400
CLINIC EQUIPMENT                              $      0        $      0        $      0        $      0        $      0
LEASEHOLD IMPROVEMENTS                        $      0        $      0        $      0        $      0        $      0
                                              --------        --------        --------        --------        --------
                                              $133,400        $    600        $      0        $      0        $133,400

YEAR ENDED MAY 31, 1993
FURNITURE, FIXTURES &                         $132,700        $    700        $      0        $      0        $132,700
EQUIPMENT
CLINIC EQUIPMENT                              $      0        $      0        $      0        $      0        $      0
LEASEHOLD IMPROVEMENTS                        $      0        $      0        $      0        $      0        $      0
                                              --------        --------        --------        --------        --------
                                              $132,700        $    700        $      0        $      0        $132,700

YEAR ENDED MAY 31 1992
FURNITURE, FIXTURES &                         $132,100        $    600        $      0        $      0        $132,100
EQUIPMENT
CLINIC EQUIPMENT                              $      0        $      0        $      0        $      0        $      0
LEASEHOLD IMPROVEMENTS                        $      0        $      0        $      0        $      0        $      0
                                              --------        --------        --------        --------        --------
                                              $132,100        $    600        $      0        $      0        $132,l00


</TABLE>
                                                          F-27