United States Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the quarterly period ended September 30, 1998.

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934
     For the transition period from ____________ to ___________

                        Commission file number : 33-23489

                           BIOGAN INTERNATIONAL, INC.
             (Formerly known as Biogan Medical International, Inc.)
                 (Exact name of business issuer in its charter)

         DELAWARE                                            58-1832055
State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

7213 Potomac Drive, Boise, Idaho                             83704
(Address of principal executive offices)                     (Zip Code)

Issuer's telephone number: (208)-376-8500                    Fax: (208) 376-4663


--------------------------------------------------------------------------------
                                (Former Address)

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

The  number of  shares  of common  stock  outstanding  as of June 30,  1998,  is
88,409,775.


         Transitional Small Business Disclosure Format. Yes ___, No _X_.


BIOGAN INTERNATIONAL, INC.
10-QSB - 98 (September  30, 1998)


                                                                               1
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

     The following financial statements are filed as part of this report:

     1.   The Financial Statements of the Company as of September 30, 1998, have
          been prepared by Wadsworth & Smith, Chartered, certified public
          accountants, without audit. (Pages 1F-1 through 1F-14)

Item 2. Management's Discussion and Plan of Operation:

Results of Operations:

     Operations for the 3nd quarter ended Septembere 30, 1998, resulted in an
operating loss of $63,760 or about $0.0007 per share. During the 3nd quarter
Management continued to focus its efforts on locating and developing financing
for the continued development and marketing of the IntorCorp Motor (previously
referred to as Smart-Power Motor) for its subsidiary IntorCorp, Inc., and on
developing its business plan for continued independent business activity.

Funding and Capital Resources:

     The Company's cash balances and liquidity were exhausted by the end of the
first quarter of 1998. Management anticipates arranging short term loans to
continue operations of the Company through the calendar year 1998. Management
presently anticipates that additional working capital for continuing the
business of the Company will be located by a combination of one or more private
placements of common and/or preferred stock, joint venture development, debt
financing, or other means, all of which are being explored and implemented by
Management.

Plan of Operation:

     The Plan of Operation for Biogan is to (i) continue locating financing for
developing and marketing of the IntorCorp Motor through its subsidiary
IntorCorp, Inc., (ii) develop a consulting and management service for small
companies, and (iii) locate and acquire other businesses.


BIOGAN INTERNATIONAL, INC.
10-QSB - 98 (September  30, 1998)


                                                                               2

<PAGE>


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings. As previously reported in the June 30, 1997, Form
10-Q.B., on June 11, 1997, the Company filed a Complaint in the United States
District Court for the District of Idaho against Frank Wright, Defendant, to
enjoin Wright from transferring 6,000,000 shares of Biogan common stock, and for
the return of said 6,000,000 shares to the Company. The action is based on an
earlier default judgement in favor of Biogan against Tower Enterprises
International, Inc. for cancellation of some 15,150,000 shares of common stock
for failure to pay the subscription consideration. The subject 6,000,000 shares
are allegedly part of the said 15,150,000 shares previously owned by Tower. The
defendant has filed an answer denying the allegations, raised several
affirmative defenses to the complaint, and has requested a jury trial.

     As of August 20, 1998, the parties agreed to settle the case with Mr.
Wright returning to Biogan the common stock remaining in his possession, i.e.
3,853,000 shares of common stock, and Biogan will in turn issue 300,000 shares
of common stock to Mr. Wright which he agrees to hold for one year. After the
agreed holding period, Mr. Wright has agreed that he will not sell more than
10,000 shares per month in the market. When the settlement is concluded and the
shares are returned to Biogan, the number of shares issued and outstanding will
be reduced by 3,853,000 shares and increased by the 300,000 shares issued to
him, for a net reduction of 3,553,000 shares outstanding. As of September 30,
1998, the final documentation to consummate the settlement was still in the
process of final completion and exchange of shares.

Item 2. Changes in Securities.

     (a)  None

     (b)  None

     (c)  None

Item 3. Defaults Upon Senior Securities. None

Item 4. Submission of Matters to a Vote of Security Holders. None

Item 5. Other Matters.


     Biogan and Collective Technologies, L.L.C., an Idaho electrical engineering
firm, entered into a Preincorporation Agreement effective February 25, 1998, in
which Biogan and Collective Technologies each agreed

     (i)  to transfer to IntorCorp, Inc., an Idaho corporation formed March 11,
          1998, their respective rights to all of the intellectual technology of
          the "IntorCorp Motor" each in exchange for a 50% ownership interest.


BIOGAN INTERNATIONAL, INC.
10-QSB - 98 (September  30, 1998)


                                                                               3

<PAGE>


     (ii) that a consulting agreement will be entered into with Collective
          Technologies, Inc. providing for compensation compatible with industry
          standards in the locality, for the continued development and testing
          of the "IntoCorp Motor".

     Reference is made to the 1997 year end 10KSB for a copy of the
Preincorporation Agreement, resumes of the members of the Board of Directors of
IntorCorp, Inc., and resumes of key engineers of Collective Technologies, L.L.C.

     All of the members of the board of directors of IntorCorp, Inc. met April
30, 1998, and authorized the acquisition of the intellectual technology and the
issuance of stock pursuant to the terms of the Preincorporation Agreement and in
all other respects authorized and directed that IntorCorp, Inc. proceed with all
of the actions necessary to consummate the terms of the Preincorporation
Agreement. Mr. Scott DeHart was appointed president and Mr. George Wadsworth was
appointed secretary of IntorCorp pending the selection of a chief executive
officer.

Item 6. Exhibits.

     (a)  No exhibits

     (b)  No Form 8K filings




                                   SIGNATURES

     In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                                     BIOGAN INTERNATIONAL, INC.
                                                            (Registrant)


Date: December 9, 1998                  By /s/ Ronald J. Tolman
                                           -------------------------------------
                                        Ronald J. Tolman, Acting Vice-President


Date: December 9, 1998                  By /s/ Rulon L. Tolman
                                           -------------------------------------
                                        Rulon L. Tolman, Vice-President


BIOGAN INTERNATIONAL, INC.
10-QSB - 98 (September  30, 1998)


                                                                               4

<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                               SEPTEMBER 30, 1998

CONTENTS

Accountants' Compilation Report                                  1

Balance Sheet                                                    2

Statement of Operations                                          3

Statement of Stockholders' Equity
(Deficiency)                                                     4

Statement of Cash Flows                                          5

Notes to Financial Statements                                   6-13



                                                                             1-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                    [LETTERHEAD OF WADSWORTH & SMITH, P.C.]


To the Board of Directors
Biogan International, Inc.
Boise, ID

Board of Directors:

We have compiled the accompanying balance sheet of Biogan International, Inc. (a
development-stage company) as of September 30, 1998, and the related statements
of operations, stockholders' equity, and cash flows for the three month period
ended September 30, 1998, and the period from February 5, 1988 (inception),
through September 30, 1998, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants.

A compilation is limited to presenting in the form of financial statements
information that is the representation of management (the owners). We have not
audited or reviewed the accompanying financial statements and, accordingly, do
not express an opinion or any other form of assurance on them.

We are not independent with respect to Biogan International, Inc.

/s/ Wadsworth & Smith, P.C.
Wadsworth & Smith, P.C.
November 10, 1998


                                       -1-
                                                                             2-F
<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                                  BALANCE SHEET
                            As of SEPTEMBER 30, 1998


ASSETS
CASH                                                                $    12,417
PAYROLL ADVANCE                                                             400
                                                                    -----------
TOTAL CURRENT ASSETS                                                $    12,817

FURNITURE/EQUIPMENT                                                      35,113
ACCUMULATED DEPRECIATION                                                (12,285)
                                                                    -----------
TOTAL FIXED ASSETS                                                  $    22,828

TOTAL ASSETS                                                        $    35,645
                                                                    ===========

LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIENCY)
ACCOUNTS PAYABLE                                                    $    40,051
NOTE PAYABLE - STOCKHOLDERS                                              80,000
NOTES PAYABLE - OTHER                                                    95,141
ACCRUED EXPENSES                                                        191,494
                                                                    -----------
TOTAL CURRENT LIABILITIES                                           $   406,686

STOCKHOLDERS' EQUITY (DEFICIENCY)
  PREFERRED STOCK $.001 PAR VALUE,
    10,000,000 SHARES AUTHORIZED NO SHARES ISSUED
  COMMON STOCK $.001 PAR VALUE 300,000,000
    SHARES AUTHORIZED, 88,409,775 ISSUED                                 88,410
ADDITIONAL PAID IN CAPITAL                                            5,187,879
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                     (5,647,330)
                                                                    -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                             $  (371,041)
                                                                    -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIENCY)               $    35,645
                                                                    ===========


                 SEE ACCOMPANYING NOTES AND ACCOUNTANT'S REPORT

                                        2
                                                                             3-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                             STATEMENT OF OPERATIONS


                                       FOR THE THREE            FROM INCEPTION
                                       MONTH PERIOD            FEBRUARY 5, 1988
                                          ENDING                   THROUGH
                                     SEPTEMBER 30, 1998       SEPTEMBER 30, 1998

SALES
REVENUE - FEES                                    --             $     7,150
RENTAL INCOME                                     --                     750
                                         -----------             -----------

TOTAL SALES                                       --                   7,900

EXPENSES
WAGES                                         36,351             $   499,693
INCENTIVE BONUS                                   --                 149,364
STOCK SUBSCRIPTION LOSS                           --                 101,006
DEPRECIATION EXPENSE                           1,482                  12,285
INTEREST EXPENSE                               4,063                  33,954
LEGAL & ACCOUNTING FEES                        7,642                 248,912
RENT                                           4,900                  33,561
START UP COSTS                                    --                 127,441
RESEARCH AND DEVELOPMENT                          --                 343,703
STOCK RESTITUTION EXPENSE                         --               3,564,659
OTHER OPERATING EXPENSES                       9,322                 382,532
SUBSIDIARIES LOSSES                               --                 158,380
                                         -----------             -----------

TOTAL EXPENSES                                63,760             $ 5,655,490
                                         -----------             -----------

NET OPERATING INCOME (LOSS)                  (63,760)             (5,647,590)

INTEREST INCOME                                    1                   5,447
MISCELLANEOUS EXPENSE                           (503)                 (5,187)
                                         -----------             -----------

TOTAL OTHER                                     (502)            $       260
                                         -----------             -----------

NET INCOME (LOSS)                            (64,262)            $(5,647,330)
                                         ===========             ===========


PRIMARY LOSS PER SHARE                   ($   0.0007)            ($   0.1386)
                                         ===========             ===========


                 SEE ACCOMPANYING NOTES AND ACCOUNTANT'S REPORT
                                                                             4-F
                                        3

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                 STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                FOR THE PERIOD FROM INCEPTION (FEBRUARY 5, 1988)
                           THROUGH SEPTEMBER 30, 1998


<TABLE>
<CAPTION>
                                                                                              DEFICIENCY
                                                                                              ACCUMULATED
                   COMMON STOCK                                    AMOUNT      ADDITIONAL     DURING THE
-----------------------------------------------------------         PER         PAID-IN       DEVELOPMENT        STOCKHOLDERS'
ISSUED:                                SHARES        AMOUNT        SHARE        CAPITAL          STAGE        EQUITY (DEFICIENCY)
-----------------------------------------------------------        ------      ----------     -----------     -------------------

<S>                                  <C>             <C>            <C>       <C>              <C>               <C>      
July 27, 1988                         2,250,000       2,250         0.0111       22,750                --            25,000
January 25, 1989                     17,750,000      17,750         0.0060       88,750                --           106,500
January 29, 1989                      3,637,347       3,637         0.0309      108,602                --           112,239

To management:
  September 14, 1995                 41,955,173      41,955         0.0010           --                --            41,955
  September 14, 1995                    906,667         907         0.0030        1,813                --             2,720
  September 14, 1995                    452,600         453         0.0100        4,073                --             4,526
  October 4, 1995                        61,980          62         0.1000        6,136                --             6,198
  December 8, 1995                       23,580          24         0.2500        5,871                --             5,895

For professional services:
  September 14, 1995                    120,000         120         0.0100        1,080                --             1,200
  October 4, 1995                       100,000         100         0.0100          900                --             1,000
  December 8, 1995                      100,000         100         0.0100          900                --             1,000
  February 23, 1996                     115,222         115         0.2149       24,643                --            24,759
  July 29, 1996                         493,034         493         0.2149      105,448                --           105,941
  December 2, 1996                      417,893         418         0.3691      153,835                --           154,253
  January 31, 1997                      250,774         251         0.2460       61,436                --            61,687
  February 28, 1997                      56,621          57         0.2600       14,665                --            14,721
  March 15, 1997                         76,173          76         0.2600       19,729                --            19,805
  March 29, 1997                         15,400          15         0.2600        3,989                --             4,004
  June 2, 1997                          225,597         226         0.1492       33,441                --            33,667
  August 12, 1997                       224,269         224         0.1465       32,626                --            32,851
  October 31, 1997                      304,546         305         0.1892       57,322                --            57,626
  December 31, 1997                    (352,634)       (353)        0.2070      (72,650)               --           (73,003)
  February 28, 1998                     120,000         120         0.1872       22,340                --            22,460
  June 30, 1998                         342,820         343         0.0191        6,213                --             6,556

For loan payments:
  September 14, 1995                     61,000          61         0.1000        6,039                --             6,100
  November 1, 1995                       50,000          50         0.1000        4,950                --             5,000
  December 8, 1995                       10,000          10         0.1000          990                --             1,000
  August 12, 1997                        41,600          42         0.2000        8,278                --             8,320
  August 31, 1997                        66,666          67         0.1500        9,933                --            10,000
  October 1, 1997                        57,692          58         0.2600       14,942                --            15,000
  December 30, 1997                     240,000         240         0.2504       59,856                --            60,096

For restitution:
  September 14, 1995                  2,668,967       2,669         0.2500      664,573                --           667,242
  October 4, 1995                     2,180,600       2,181         0.2500      542,969                --           545,150
  November 1, 1995                      372,270         372         0.2500       92,695                --            93,068
  December 8, 1995                    7,353,248       7,353         0.2500    1,830,959                --         1,838,312
  February 23, 1996                     744,444         744         0.2500      185,367                --           186,111
  May 3, 1996                           125,929         126         0.2500       31,356                --            31,482
  June 21, 1996                         350,863         351         0.2500       87,365                --            87,716
  July 29, 1996                         310,567         311         0.2500       77,331                --            77,642
  September 11, 1996                      2,667           3         0.2500          664                --               667
  December 2, 1996                       73,480          73         0.2500       18,297                --            18,370
  January 31, 1997                        4,000           4         0.2500          996                --             1,000
  February 28, 1997                      38,000          38         0.2500        9,462                --             9,500
  June 2, 1997                           18,000          18         0.2500        4,482                --             4,500
  August 12, 1997                        11,200          11         0.2500        2,789                --             2,800
  October 31, 1997                        4,400           4         0.2500        1,096                --             1,100

For dispute settlement:
  October 4, 1995                        25,000          25         0.1000        2,475                --             2,500
  November 1, 1995                       31,030          31         0.1000        3,072                --             3,103
  December 8, 1995                       50,000          50         0.1000        4,950                --             5,000

For private offering:
  September 14, 1995                     75,000          75         0.1000        7,425                --             7,500
  November 1, 1995                        5,000           5         0.2500        1,245                --             1,250
  December 8, 1995                      256,000         256         0.2500       63,744                --            64,000
  February 23, 1996                     672,923         673         0.2208      147,875                --           148,548
  May 3, 1996                           353,667         354         0.2208       77,718                --            78,072
  June 21, 1996                         606,900         607         0.2208      133,366                --           133,973
  July 29, 1996                         252,000         252         0.2201       55,206                --            55,458
  December 31, 1996                      54,350          54         0.4600       24,946                --            25,000
  March 29, 1997                        154,000         154         0.2500       38,346                --            38,500
  December 4, 1997                      640,000         640         0.2500      159,360                --           160,000
  December 31, 1997                     708,750         709         0.1422      100,041                --           100,750
  February 18, 1998                      30,000          30         0.1300        3,870                --             3,900
  June 8, 1998                           62,500          63         0.0800        4,938                --             5,000

NET LOSS                                     --          --                          --        (5,647,330)       (5,647,330)
                                     ----------  ----------                 -----------        -----------       -----------
                                     88,409,775      88,410                   5,187,879        (5,647,330)         (371,041)
                                     ==========  ==========                 ===========        ===========       ===========
</TABLE>


                 SEE ACCOMPANYING NOTES AND ACCOUNTANT'S REPORT.
                                                                             5-F
                                        4

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                             STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                                               FOR THE THREE            FROM INCEPTION
                                                                MONTH PERIOD            FEBRUARY 5, 1988
                                                                   ENDING                   THROUGH
                                                             SEPTEMBER 30, 1998        SEPTEMBER 30, 1998

<S>                                                             <C>                        <C>
CASH FLOWS FROM OPERATIONS
NET INCOME (LOSS)                                               $   (64,262)               $(5,647,330)

ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
ADD BACK STOCK ISSUED FOR:
MANAGEMENT                                                                                      61,294
CONTRACT LABOR, INCENTIVE BONUSES, PROFESSIONAL
    SERVICES, AND RESEARCH AND DEVELOPMENT                               --                    468,526
RESTITUTION                                                              --                  3,564,659
NOTES PAYABLE PAYMENTS                                                   --                    105,516
DISPUTE SETTLEMENTS                                                      --                     10,603

OTHER ADJUSTMENTS:
SUBSIDIARIES LOSSES                                                      --                    158,380
STOCK SUBSCRIPTION LOSS                                                  --                    101,006
FIRST DEVELOPMENT STAGE LOSS                                             --                    142,733
DEPRECIATION AND AMORTIZATION                                         1,482                     12,285
                                                                -----------                -----------
TOTAL ADJUSTMENTS                                                     1,482                  4,625,002

ADVANCES                                                                 --                       (400)
PREPAID EXPENES                                                       2,619                         --
ACCOUNTS PAYABLE                                                      6,864                     40,051
ACCRUED LIABILITIES                                                  30,038                    191,494
                                                                -----------                -----------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES                                         $   (23,259)               $  (791,183)
                                                                -----------                -----------

CASH FLOWS FROM INVESTING ACTIVITIES
FURNITURE/EQUIPMENT                                                      --                    (35,113)
INVESTMENT IN BIOMAGNETRONICS                                            --                   (103,936)
INVESTMENT IN BIOLINK                                                    --                    (54,443)
                                                                -----------                -----------

NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES                                         $         0                $  (193,492)
                                                                -----------                -----------

CASH FLOWS FROM FINANCING ACTIVITIES
NOTE PAYABLE-STOCKHOLDER                                                 --                     80,000
NOTES PAYABLE - OTHER RECEIVED                                       35,000                    138,822
NOTES PAYABLE - OTHER PAID                                               --                    (43,680)
ISSUANCE OF COMMON STOCK                                                 --                    821,950
OTHER                                                                    --                         --
                                                                -----------                -----------

NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES                                         $    35,000                $   997,092
                                                                -----------                -----------

NET INCREASE(DECREASE) IN CASH                                  $    11,741                $    12,417

BEGINNING CASH BALANCE                                          $       676                $        --
                                                                -----------                -----------

CASH ENDING BALANCE                                             $    12,417                $    12,417
                                                                ===========                ===========

CASH PAYMENTS FOR INTEREST EXPENSE                              $     2,711                $     2,711
CASH PAYMENTS FOR INCOME TAXES                                  $         0                $         0
NONMONETARY TRANSACTION
   366,000 SHARES ISSUED FOR DEBT REDUCTION                              --                     81,320
                                                                ===========                ===========
</TABLE>


                 SEE ACCOMPANYING NOTES AND ACCOUNTANT'S REPORT
                                                                             6-F
                                        5

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


1.   BUSINESS AND ABILITY TO CONTINUE IN EXISTENCE

     Biogan International, Inc. (Biogan), is a development-stage company. See
     Note 5 "Stockholders' Equity" for a history of Biogan's securities issuance
     and accumulated deficit. Management presently intends to focus aggressively
     on the continued further development and prototype testing of the
     Motor/Controller system as well as entering into strategic alliances for
     both manufacturing and marketing of the motor. Additional capital will be
     required to fund the growth and expansion and provide working capital for
     continued operations. See Note 10 "Private Placement Offering."

     Biogan and Collective Technologies, LLC (Collective) negotiated a joint
     venture Preincorporation Agreement effective February 25, 1998, in which
     Biogan and Collective Technologies each agreed:

          (i)  to transfer to "IntorCorp, Inc." (a new Idaho corporation ) their
               respective rights to all of the intellectual technology of the
               "IntorCorp Motor", each in exchange for 50% ownership interest,
               and

          (ii) that a consulting agreement will be entered into with Collective
               for the continued development and testing of the "IntorCorp
               Motor" compatible with industry standards in the locality.

     The Business Plan incorporated in the Preincorporation Agreement
     acknowledges that:

          (i)  the 5HP DC Feasibility Prototype has been developed and tested,
               and

          (ii) management is currently considering the options of developing (a)
               a large power (40HP) motor or (b) a duel development of a 5/10HP
               motor.



     Under either of the options the cost to develop support functions, conduct
     the laboratory prototype phase development and testing, complete production
     prototype phase development, and field test the motors will take
     approximately two years and will cost approximately $6,000,000. Management
     is currently of the opinion that the risks are lower and the market
     potential higher with 5/10 HP motors, however, the final decision will be
     made at such time as financing is located and committed.


                             See Accountant's Report

                                       -6-
                                                                             7-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                         (A DEVELOPMENT- STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - Continued
                               SEPTEMBER 30, 1998


     The directors of IntorCorp, Inc. are Scott DeHart, Wayne Stewart, George
     Wadsworth, CPA, and John R. Hansen, Jr, attorney. Reference is made to the
     Part III of the December 31, 1997, 10K for resumes of the key consultants
     in Collective who will be responsible for the continued development of the
     "IntorCorp Motor".

     Management presently does not have any plans for the purchase or
     acquisition of any significant plant or other equipment. It is anticipated
     that additional employees will be required by the Registrant as the
     acquired operations meet their expected growth. Since it is uncertain
     whether Biogan will be successful in these ventures and whether it can
     obtain sufficient capital to finance these ventures, it is uncertain
     whether the Company will be capable of continuing in existence.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.   PRESENTATION

     The accompanying financial statements have been prepared in accordance with
     the Statement of Financial Accounting Standards No. 7 "Accounting and
     Reporting by Development-stage Enterprises". A development stage enterprise
     is one in which planned principal operations have not commenced or if its
     operations have commenced there has been no significant revenue there from.
     Development-stage companies report cumulative costs from the enterprise's
     inception. Biogan has had two stages of development (Note 5G).

B.   INVESTMENT IN SUBSIDIARIES

     Biogan owns 50% of the voting stock of BioMagnetronics, Inc. and Biolink ,
     Inc. Biomagnetronics, Inc. and Biolink, Inc. were both development-stage
     enterprises and neither company had any operating activities during the
     current quarter of operations. The investments were accounted for by the
     equity method whereby the purchase of stock shares was recorded at cost and
     increased and decreased by 50% of any profits or losses respectively.
     Biogan invested $103,937 in Biomagnetronics, Inc. and $54,443 in Biolink,
     Inc. The carrying amount of the investments have been reduced to $0 for
     each company since both companies have had no operating activities during
     the past three quarters and there are no plans for future operations. As of
     September 30, 1998, neither company has assets of any value.

     The Board of Directors of IntorCorp, Inc. met on April 30, 1998 and at that
     time approved the issuance of stock to Biogan and Collective in exchange
     for the transfer of their respective rights of their Intellectual
     Technology. Biogan will own 50% of the voting stock of the new Corporation.
     The other investor in the new corporation is Collective, an engineering
     group. The two groups are forming this new corporation in order to continue
     further development of the motor. The new corporation will be a development
     stage company. Stock has not yet been issued.

                             See Accountant's Report

                                       -7-
                                                                             8-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>

                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - Continued
                               SEPTEMBER 30, 1998


C.   STOCK VALUATION

     Stock issued for non cash consideration has been valued at market value or
     above from $.001 to $.25 per share (see Statement of Stockholders' Equity
     "To Management" Note 5D). Stock issued for restitution (Note 5F) is valued
     at $.25 per share.

D.   NET LOSS PER SHARE

     The net loss per share has been calculated using the weighted average
     number of shares of common stock outstanding during the development stage
     period. The weighted average number of shares of common stock outstanding
     for the three month period ended September 30, 1998, and the period from
     February 5, 1988 (inception), through September 30, 1998, was 88,118,215
     and 40,752,593 respectively. Stock options have not been considered in the
     calculation of loss per share because they are antidilutive. Of the
     88,409,775 shares outstanding, 59,591,851 are restricted and 28,817,924
     shares are unrestricted.

E.   INCOME TAXES

     At September 30, 1998 Biogan had net operating losses (NOL) carry forwards
     as follows:


          YEAR                         NOL           YEAR EXPIRES
          Feb 5, 1988
          to Dec. 31, 1993         $  142,733            2008
          1994                         11,782            2009
          1995                      3,251,790            2010
          1996                      1,134,736            2011
          1997                        736,051            2012
                                   ----------
                                   $5,277,092

     No deferred asset will be recognized on the tax benefit resulting from the
     NOL until the Company becomes profitable. While management believes the
     loss recorded due to the stock restitution loss ($3,564,659) is a tax
     deductible expense, it could be subject to an IRS disallowance.

F.   FURNITURE AND EQUIPMENT

     Furniture and equipment are carried at cost. Depreciation of furniture and
     equipment is provided using the straight-line method of depreciation and
     the accelerated cost recovery method for federal income tax purposes.
     Depreciation is calculated over useful life ranging from 5 to 10 years.




                             See Accountant's Report
                                                                             9-F
                                       -8-

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - Continued
                               SEPTEMBER 30, 1998


3.   NOTES PAYABLE AT SEPTEMBER 30, 1998, CONSISTED OF THE FOLLOWING:

<TABLE>
         <S>                                                                         <C>  
         Notes Payable - Other:

         Notes payable to Ryan Industries, Ltd. with interest at 10%
         per annum from March 10, 1998.  Note is unsecured and is payable
         on demand.                                                                   6,000

         Notes payable to Ryan Industries, Ltd. with interest at 10%
         per annum from March 12, 1998.  Note is unsecured and is payable
         on demand.
                                                                                     39,141

         Notes payable to Ryan Industries, Ltd. with interest at 10%
         per annum from April 1, 1998.  Note is unsecured and is payable
         on demand.
                                                                                     10,000

         Notes payable to Ryan Industries, Ltd. with interest at 10%
         per annum from May 1, 1998.  Note is unsecured and is payable
         on demand.
                                                                                      5,000

         Notes payable to an individual with interest at 10% per annum
         from July 1, 1998. Note is unsecured and is payable on demand.
                                                                                      5,000

         Notes payable to an individual with interest at 10% per annum
         from August 18, 1998.  Note is unsecured and is payable on demand.          15,000

         Notes payable to an individual with interest at 12% per
         annum from September 29, 1998.  Note is unsecured and is payable
         on demand.                                                                  15,000

         Total Notes Payable - Other
                                                                                   $ 95,141
                                                                                   ========

         Notes Payable - Stockholder:

         Notes  payable to Ronald J. Tolman with  interest at 10% per annum
         from November 13, 1996, note is unsecured and is payable on
         demand.  Payments are applied first to any unpaid interest.               $ 40,000
</TABLE>


                             See Accountant's Report
                                                                            10-F
                                       -9-

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - Continued
                               SEPTEMBER 30, 1998



<TABLE>
         <S>                                                                         <C>  
         Notes  payable to Rulon L. Tolman  with  interest at 10% per annum
         from November 13, 1996, note is unsecured and is payable on
         demand.  Payments are applied first to any unpaid interest.                 40,000
                                                                                   --------

         Total Notes Payable - Stockholder                                         $ 80,000
                                                                                   ========
</TABLE>


4.   STOCK OPTIONS

     On December 8, 1988, the board of directors of Biogan allocated 2,000,000
     shares of the Company's authorized common stock shares for a stock
     incentive plan to be issued as determined by the board at an option price
     of not less than placement offering of any private placement offering of
     the Company's common stock. No options have been granted or exercised under
     this stock incentive plan.


5.   STOCKHOLDERS' EQUITY (Deficit)

     Following is a table of Biogan International Inc.'s stock and equity
     transactions:

<TABLE>
<CAPTION>
                                    In (000)
                                     Common         .001/share         Paid-In          Accumulated          Total
                                     Shares           Amount           Capital            Deficit            Equity

---------------------------------------------------------------------------------------------------------------------
<S>                                   <C>          <C>               <C>               <C>                <C>        
A) Ronney shares                       2,250       $     2,250       $    22,750       $                  $    25,000
B) Biogan merger                      17,750            17,750            88,750                              106,500
C) Stock Subscriptions                 3,637             3,637           108,602                              112,239
D) Expenses/Service Mgmt Grp          43,400            43,400            17,894                               61,294
E) Shares for Cash                     7,115             7,115         1,399,482                            1,406,597
F) Shares for Restitution             14,258            14,258         3,550,401                            3,564,659
G) Deficit:
   2/5/88 - 6/26/94                                                                       (142,733)          (142,733)
   6/27/94 - 6/30/98                                                                    (5,504,597)        (5,504,597)
                                 ------------------------------------------------------------------------------------
         Totals                       88,410       $    88,410       $ 5,187,879       $(5,647,330)       $  (371,041)
                                 ===========       ===========       ===========       ===========        ===========
</TABLE>


     A.   Issuance of 2,250,000 shares of Ronney, a Delaware Corporation.

     B.   Exchange of Biogan (an Oregon Corporation), 5,000,000 shares for
          17,750,000 shares of Ronney. Ronney and Biogan merged and changed its
          name to Biogan International, Inc.

     C.   Issuance of a stock subscription to Tower Enterprises International,
          Inc. (a European Corporation), a former 84% shareholder in Biogan
          International, Inc. 11,512,653 of the 15,150,000 original stock
          subscription has been canceled as of September 30, 1998.


                             See accountant's Report

                                      -10-
                                                                            11-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - Continued
                               SEPTEMBER 30, 1998


     D.   Shares issued to new management for expenses/services incurred in
          re-starting Biogan International, Inc. were valued at or above the
          market value of the common stock listed on NASDAQ BB at $.001 to $.25
          per share at the time the expenses were incurred; the services were
          rendered; and the Board of Directors' resolution approving the
          issuance was made. See "Statement of Stockholders' Equity" and Note 7.

     E.   Cash shares and shares issued for services rendered and for loan
          payments by parties other than management.

     F.   From 1990 through May 1994 Biogan International, Inc. was under the
          control of prior management and affiliates. Effective December 31,
          1996, the Company completed its review and has issued 14,258,635
          shares of common stock as restitution to investors who substantiated
          their claims. In addition, the Company has obtained a court judgment
          canceling 15,150,000 shares of common stock issued in "C" above, and
          4,117,653 shares issued to Tower Enterprises International, Inc. in
          "B" above. The company is continuing its litigation to recover damages
          as a result of questionable stock transactions.

     G.   Biogan International has effectively had two development stages: (1)
          From February 5, 1988, through June 27, 1994. During this period the
          company was dormant for approximately four years. (2) The second
          development stage (June 27, 1994, through September 30, 1998) is and
          continues under the new management group set forth in D above.

6.   COMMITMENTS AND CONTINGENCIES

     A.   SHARES FOR RESTITUTION

          As set forth in Note 5F "Shareholders' Equity" Biogan was committed
          through December 31, 1997, to issue shares to replace shares sold by
          Tower International's US agent, Tower Holdings, Ltd.

     B.   OTHER

          In connection with the Company's plans to become operational, various
          verbal commitments and a letter of intent has been issued and they are
          in the negotiation stage with various manufacturers and distributors
          as of June 30, 1998. However, as discussed in Note 1 the Company
          remains a development stage company.


7.   RELATED PARTY TRANSACTIONS

     Pursuant to a board of directors meeting held in July 1995, the Company
     issued common stock to the following related parties in exchange for
     expenses incurred on behalf of the Company and for services rendered: (The
     schedule below has been adjusted to reflect shares issued to the Advisory
     Board from each of the related parties listed below - see Note 12)

<TABLE>
<CAPTION>
     Name           Date                    Numbered of        Market       Issue        Expense/
               Expense/Service             shares issued       Price        Price        Service
                  Rendered                                   per share    per share       Amount

<S>                                          <C>               <C>          <C>          <C>
     Glazier Family Trust
          during 1994                        10,079,178        $ .001       $ .001       $ 10,079
          during first quarter of 1995          245,000          .001         .003            735
          during second quarter of 1995         148,300          .010         .010          1,483
          during third quarter of 1995           20,830          .100         .100          2,083
          during fourth quarter of 1995           6,692          .125         .250          1,673
          ---------------------------------------------------------------------------------------
                                             10,500,000                                  $ 16,053
</TABLE>


                             See Accountant's Report

                                      -11-
                                                                            12-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           BIOGAN INTERNATIONAL, INC.
                          (A DEVELOPMENT-STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - Continued
                               SEPTEMBER 30, 1998


<TABLE>
<CAPTION>
<S>                                          <C>               <C>          <C>          <C>     
Ronald J. Tolman Family Trust
     during 1994                             8,982,729         $ .001       $ .001       $  8,983
     during first quarter of 1995              328,333           .001         .003            985
     during second quarter of 1995             154,300           .010         .010          1,543
     during third quarter of 1995               21,150           .100         .100          2,115
     during fourth quarter of 1995               6,888           .125         .250          1,722
     --------------------------------------------------------------------------------------------
                                             9,493,400                                   $ 15,348

Rulon L. Tolman
     during 1994                             9,386,667         $ .001       $ .001       $  9,387
     during first quarter of 199               333,333           .001         .003          1,000
     during second quarter of 1995             150,000           .010         .010          1,500
     during third quarter of 1995               20,000           .100         .100          2,000
     during fourth quarter of 1995              10,000           .125         .250          2,500
     --------------------------------------------------------------------------------------------
                                             9,900,000                                   $ 16,387
</TABLE>


     Biogan sub-leased office space (month to month) from a company owned by
     Ronald J. Tolman until December 31, 1996. Total rental expense for the
     period from inception February 5, 1998, until September 30, 1998, amounted
     to $10,233. See Note 3 for details on notes payable due stockholders. Ron
     Tolman and Rulon Tolman have accrued wages for the period ending September
     30, 1998, of $76,600, and $63,800 respectively.

8.   USE OF ESTIMATES

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


9.   LEASES

     The Company conducts its operations from facilities that are leased under a
     noncancelable operating lease that expired on May 31, 1998. The Company is
     presently on a month to month lease.

     Rental expense for the quarter ending September 30, 1998, amounted to
     $4,900. Rental expense for the period from inception February 5, 1988,
     through September 30, 1998, amounted to $33,954. See Note 7 for related
     party rental transactions.

10.  PRIVATE PLACEMENT OFFERING

     On August 5, 1997, the Company commenced a Private Placement offering of
     8,000,000 shares of its common stock at $.25 per share the proceeds of
     which are expected to be used primarily for furthering research and
     development on the 5HP prototype motor, for development of 5HP motor to
     irrigation pump application, for developing larger size motors, and for
     working capital of the Company. Consent was received from the Idaho
     Department of Finance to proceed with the offering to residents of Idaho
     who qualify as accredited investors or other investors who are both
     sophisticated and existing shareholders of the Company.


                             See Accountant's Report

                                      -12-
                                                                            13-F

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                          (A DEVELOPMENT-STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                               SEPTEMBER 30, 1998


11.  CORPORATE NAME CHANGE

     The Board of Directors consented to change the name of the corporation from
     Biogan Medical International, Inc. to Biogan International , Inc. This
     action was deemed necessary to avoid the confusion that has developed from
     the word "medical" in the name when the main emphasis of the company is to
     promote the development of the electro-magnetic motor. The name change was
     recorded by the state of Delaware on September 5, 1997.


                             See Accountant's Report
                                                                            14-F
                                      -13-

                            WADSWORTH & SMITH, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS