10KSB40

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED MARCH 31, 1999

                                       OR

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

                           Commission File No. 0-24362

                         NUTRICEUTICALS.COM CORPORATION,
                          FORMERLY NUMED SURGICAL, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

            STATE OF NEVADA                                      34-1755390
  ----------------------------------                            -------------
  (State of or other jurisdiction of                            (IRS Employer
     incorporation or organization)                          Identification No.)

  6950 BRYAN DAIRY ROAD, LARGO, FLORIDA                             33777
- -----------------------------------------                         ----------
(Address of Principal Executive Officers)                         (Zip Code)

                    Issuer's telephone number: (727) 544-8866

   Securities registered pursuant to Section 12(b) of the Exchange Act: NONE.

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

                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                     ---------------------------------------
                                (Title of Class)

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

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

         Issuer's revenues for its most recent fiscal year were $37,118.

         The aggregate market value of the voting stock held by non-affiliates
of the Registrant, cannot be determined. There is currently no established
trading market for the common stock of the Company, and the shares are not
presently listed, therefore aggregate market value cannot be determined.

         Number of shares outstanding of the Issuer's common stock at $.001 par
value as of June 14, 1999 was 5,153,414.



                                     PART I

ITEM 1. BUSINESS.

GENERAL

         Nutriceuticals.com Corporation ("Company"), was incorporated on October
18, 1993, as a Nevada corporation under the name of NuMed Surgical, Inc. ("NuMed
Surgical"). In March 1999, its name was changed to Nutriceuticals.com
Corporation.

         The Company was formerly engaged in the business of research,
development and distribution of medical instruments and surgical supplies to the
healthcare market. In 1997 NuMed Surgical adopted a plan of liquidation in which
it sold its major product line and by March 31, 1998 disposed of all its
operating assets. On March 15, 1999, NuMed Surgical acquired all of the
outstanding common stock of Nutriceuticals.com Corporation ("Nutriceuticals"), a
Florida corporation, which was organized on September 8, 1998, and NuMed
Surgical changed its corporate name to Nutriceuticals.com Corporation.
Nutriceuticals was founded to engage in the online retailing of vitamins,
nutritional supplements and other natural products to customers. Prior to the
acquisition of Nutriceuticals on September 8, 1998, the Company was accounted
for on the liquidation basis of accounting.

         NuMed Surgical was created through a spin off by NuMed Home Health
Care, Inc. ("NuMed HHC"), a public company. NuMed HHC spun off to its
stockholders all of the assets and liabilities of its surgical/medical products
division, and the assets and liabilities of a wholly-owned subsidiary, NuMed
Technologies, Inc. Prior to the spin off, NuMed Surgical had no operations or
business other than as a division or wholly-owned subsidiary of NuMed HHC.

         On March 31, 1999, the Company acquired all of the issued and
outstanding capital stock of Healthseek.com Corp. ("Healthseek"), incorporated
in 1999 as a Massachusetts corporation. Healthseek is a healthcare community Web
site providing communications and related information ("content") to healthcare
professionals and consumers and it has attracted a community of Internet users.
Both the Company and its wholly-owned subsidiary Healthseek may be considered
development stage companies, as revenues to date have been nominal.

         The Company's principal administrative, marketing and customer service
facilities total approximately 400 square feet of office and warehouse space,
which is located at 6950 Bryan Dairy Road, Largo, Florida 33777.

         The Company is a "small business issuer" for purposes of disclosure and
filings under the Securities Act of 1933 and the Securities Exchange act of
1934.

OVERVIEW

         Nutriceuticals.com Corporation is an innovative online retailer of
natural products. The Company's objective is that its Web stores,
www.nutriceuticals.com and www.javaslim.com, with the aid of its Web community
at www.healthseek.com, will become well-known and widely-used Web sites for the
purchase of natural products and the provision of healthcare information. The
Company believes it can provide consumers with superior value because it offers
a select line of high quality natural products as well as the convenience of
shopping from home or office, twenty-four-hours-a-day, seven-days-a-week.

         The Company's business strategy is to offer, through its online stores
www.nutriceuticals.com and www.javaslim.com, a select line of natural products,
a convenient shopping experience and competitive prices. The Company is
implementing this strategy by offering a select line of brand name, high quality
natural products online, including the Company's own "Dr. Nutriceutical" and
"Java Slim" product lines, the convenience of shopping from the home or the
office, twenty-four-hours-a-day, seven-days-a-week, and discount prices.

                                       -2-



         The Company believes that the Internet is an ideal medium to sell
natural products for several reasons: (a) according to Cyber Dialogue, over 17
million U.S. adults searched for health information on the Internet for the year
ended July 1998, and this number is estimated to nearly double in the next two
years; (b) according to Hambrecht & Quist, LLC's industry report dated January
8, 1999, the e-commerce market for vitamins and other nutraceuticals is
estimated to exceed $12 billion annually by the year 2001; and (c) a potentially
large and attractive customer base for the Internet healthcare market, made up
of wealthier, more educated, and slightly more experienced Internet users than
the average adult online user.

ONLINE STORES

         Customers enter the Company's online stores at www.nutriceuticals.com
and www.javaslim.com. The Company's Nutriceuticals store opened in February
1999, and its Java Slim store was launched in June 1999. The Company's goal is
to make the shopping process as easy as possible for customers through its
simple, intuitive and easy to use online stores. Users accessing the Company's
Web stores will generally fall into one of two categories: individuals who know
what products they want to buy and seek to purchase them immediately in a highly
convenient manner, or individuals who will browse the stores, seeking an
entertaining and informative shopping experience. The Company designed its
online stores to satisfy both types of users in a simple, intuitive fashion.

         Presently, customers who use the Company's online stores can conduct
targeted searches through an index of selected natural products, browse among
featured products and special offerings, obtain a confirmation of their order,
and access the Company's customer support representatives by telephone and fax
during regular business hours and by e-mail twenty-four-hours-a-day,
seven-days-a-week. The Company expects to further improve its online stores to
include product reviews, greater interactivity, and product presentations that
the Company can design based on customer preferences.

         Shoppers purchase products by simply clicking on a button to add
products to their virtual shopping baskets. Just as in a physical store,
customers can add and subtract products from their shopping baskets as they
browse prior to making a final purchase decision. To execute orders, customers
click on the buy button. A message on the screen prompts customers to supply
shipping and, in the case of consumers, credit card detail, either by e-mail or
by telephone. All customer information is stored on the Company's secure server.
The Company's system automatically confirms each order by e-mail to the customer
after the customer places the order, and advises customers by e-mail after the
product is shipped. The Company provides customer service and support, answers
general questions and makes available product information by telephone, fax and
e-mail. The Company does not currently charge its customers for service and
support services.

PRODUCTS

         The Company currently offers at its Web stores approximately 300
high-quality natural products packaged under 10 brand names, including the
Company's own two brands, "Dr. Nutriceutical" and "Java Slim." Substantially all
of the Company's sales to date have come from the sale of its brand label
products, of which approximately 50% of such sales have been derived from the
sale of the Company's Java Slim weight loss coffee. The Company's select product
line, however, includes a full range of widely used vitamins and supplements and
other natural products. Due to the efficiencies related to online inventory, the
Company has the ability to, and may in the future, offer a broader selection of
natural products, including hard to find and specialty products which may not be
available in traditional vitamin stores.

         The Company does not carry significant inventory and relies on
manufacturers and distributors of natural products to fulfill its customers'
orders. When a customer places an order, the Company promptly transmits the
order information to a vendor and distributor for processing and for rapid
shipment to the Company's customers. This allows the Company to offer a
potentially unlimited and evolving selection of products, while avoiding the
high costs and capital requirements associated with owning and warehousing
product inventory.

                                      -3-



MARKETING AND SALES

         In March 1999, the Company began to promote its online store through a
proactive advertising program. The program initially targeted potential
customers through radio broadcasts. The Company intends to expand its
advertising programs to national media outlets such as magazines and newspapers,
and may eventually advertise on television. The Company believes an expanded
advertising program will facilitate its growth, increase the reach of its name
recognition and direct new customers to its online store.

         The Company intends to pursue strategic relationships to expand its
online presence, increase its access to online customers and build its brand
recognition. In pursuing these relationships, the Company seeks to be the
exclusive or semi-exclusive reseller of natural products on key screens of major
Web sites. The Company has entered into one such strategic alliance.

         In April 1999, the Company entered into a non-exclusive agreement with
IndigoCity.com, Inc. ("Indigo"), a newly formed Internet media company that
offers a branded network of comprehensive information, communication and
shopping service for customers. Indigo's Web page is currently located at
www.indigocity.com. Indigo's Web site was launched in June 1999.

         Under the Company's agreement with Indigo, the Company must pay a
monthly hosting fee to Indigo. In addition, the Company must distribute 50% of
its gross margin for its products that are sold as a result of its strategic
alliance with Indigo. Generally, "gross margins" shall be equal to gross revenue
from such sales, less cost of product and cost of shipping. The Company is also
to provide Indigo with its Web site, and valuable health related content in the
form of products, services, articles and reviews. In addition, Indigo has the
following responsibilities to the Company under the Company's marketing
alliance: (a) incorporate the Company's Web site contents into feature sections
and spotlight articles on the Indigo Web site; (b) build an Indigo banner and/or
logo that the Company will place on the home page of its Web site, that will
permit visitors that come from Indigo's Web site to return; and (c) use its best
efforts to cross promote the Company's products and services on an ongoing
basis.

         In addition to traditional advertising and strategic agreements, the
Company intends to use many online sales and marketing techniques to increase
brand recognition and direct traffic to its online stores. These include
purchasing banner advertising on search engine Web sites and Internet
directories and direct links from healthcare home pages.

         The Company can display banner advertisements for certain periods of
time or when a user searches for information relating to certain keywords (such
as "vitamins") and programs, as well as the names of vendors. The Company plans
to establish direct links with the Web sites for certain vendors. These links
allow a potential customer visiting that vendor's Web site to automatically link
to the Company's order form and purchase its products. The Company believes that
the demographics of Internet users overlap one-to-one with the demographics of
potential of natural product purchasers and that the Internet provides
additional opportunities for direct marketing to the Company's customers through
a variety of mechanisms. The Company may use direct marketing techniques to
target new and existing customers with customized offers such as an e-mail
newsletter that includes purchase recommendations based on demonstrated customer
preferences or prior purchases. In order to display banner advertisements on its
Web sites and engage in such direct marketing opportunities, the Company will
need to upgrade its Web site platform technology.

         The Company intends to expand its market presence by allowing affiliate
Web sites to offer natural products to their audience, for which the Company
will provide fulfillment. The affiliate embeds a hyperlink to the Company's
site, together with software recommended for that affiliate's targeted customer
base. This hyperlink automatically connects the customer to the Company's online
store where the affiliate's customer may place an order. The affiliate can offer
enhanced services and recommendations, while avoiding ordering and fulfillment
costs. Under these short-term arrangements, the Company would be required to pay
the affiliate a percentage of the sales they generate. Generally, these
agreements can be terminated with limited notice. To capitalize on affiliate
programs, the Company presently intends to make the necessary enhancements to
its Web site platform technology.

                                      -4-


COMPETITION

         The online commerce market is new, rapidly evolving and intensely
competitive. The Company expects competition to intensify in the future because
barriers to entry are minimal and current and new competitors can launch new Web
sites at relatively low cost. In addition, the natural products reselling
industry is intensely competitive. The Company currently competes primarily with
traditional resellers, other online resellers and other vendors of natural
products, such as MotherNature.com, GreenTree.com, DrugStore.com and
PlanetRx.com. The Company also competes with mail order and/or direct marketers
of vitamin and nutritional supplement products, including cataloguers such as
Vitamin Shoppe and Vitamin Discount Connection; and with manufacturers such as
Twin Labs, Natrol, and Nature's Way. Additional competitors are major
store-based retailers of vitamin and nutritional supplements and other related
products, such as GNC, Walgreens, Eckerd, and Walmart. Additionally, these
traditional store-based retailers and mail order and/or direct marketers of
natural products have established or may soon establish, commercial Web sites
offering vitamins, nutritional supplements, and other natural products.

         Unlike other well-publicized product categories such as online book or
compact disc retailing, there is no current market leader in the online
provision of natural products to consumers. The Company's immediate goal is to
position itself as a leading online natural product retailer. To that end, the
Company believes that its early entry into the online natural products market
will enable it to establish critical competitive advantages over future
competitors. The Company believes that such competitive advantages include the
establishment of a recognizable brand, the development of online marketing and
media relationships, the acquisition of exclusive advertising space, the
creation and development of a powerful Affiliate Program, the development of
important relationships with manufacturers, distributors, and content providers;
and most importantly the acquisition of customers.

         There are substantial barriers to entry in the nutritional supplement
industry that have prohibited the development of a major online leader to date.
Unlike the more mature book and compact disc industries, which have established
fulfillment mechanisms to "drop-ship" product, the natural products
manufacturing and distribution industries are highly fragmented and relatively
inefficient. As a result, natural product resellers must address numerous, and
significant, order fulfillment challenges.

         Although the Company has direct competition from several small online
merchants, there is no established leader that has been able to capture
significant market share to date. A number of indirect online commerce
competitors who may potentially compete in this market include GreenTree.com and
MotherNature.com.

         Competitive pressures created by any one of these current or future
competitors, or by the Company's competitors collectively, could materially hurt
its business. The Company believes that the principal competitive factors in its
market are brand recognition, selection, convenience, price, speed and
accessibility, customer service, quality of site content, and reliability and
speed of fulfillment.

         Many of the Company's current and potential competitors have longer
operating histories and larger customer bases than the Company. In addition,
many of the Company's current and potential competitors have greater brand
recognition and significantly greater financial, marketing and other resources
than the Company. In addition, as more people use the Internet and other online
services, larger, well established and well financed entities may acquire online
competitors or suppliers, invest in online competitors or suppliers, or form
joint ventures with online competitors or suppliers.

         Certain of the Company's actual or potential competitors, such as
MotherNature.com, DrugStore.com, GreenTree.com and PlanetRx.com, may be able to
secure merchandise from vendors on more favorable terms, devote greater
resources to marketing and promotional campaigns, adopt more aggressive pricing
or inventory availability policies, and devote substantially more resources to
Web site and systems development than the Company.

                                      -5-


         In addition, new technologies and expansion of existing technologies,
such as price comparison programs that select specific titles from a variety of
Web sites, may direct customers to online resellers which compete with the
Company and may increase competition. Increased competition may reduce the
Company's operating margins, as well as cause a loss to both its market share
and brand recognition. Further, to strategically respond to changes in the
competitive environment, the Company may sometimes make pricing, service or
marketing decisions or acquire companies that could have a materially adverse
effect on the Company's business. In addition, companies controlling access to
Internet transactions through network access or Web browsers could promote the
Company's competitors or charge the Company a substantial fee for inclusion in
their product or service offerings. The Company cannot assure that it can
compete successfully against current and future competitors. Failure to compete
successfully against current and future competitors could have a materially
adverse effect on the Company's business.

BACKLOG

         As of March 31, 1999, the Company had no backlog of sales orders.

PROPRIETARY RIGHTS

         The Company relies on a combination of copyright, trademark, patent and
trade secret laws and contractual restrictions to establish and protect its
technology and proprietary rights and information. The Company currently has
applied for protection of its "Java Slim" brand name. The Company intends to
apply for protection of its "Dr. Nutriceutical" brand name, and for
"Nutriceuticals.com". The Company requires employees and consultants to sign
confidentiality and non-competition agreements. However, the Company cannot
assure that its steps will be sufficient to prevent misappropriation of its
technology, proprietary rights and information, or that its competitors will not
independently develop technologies that are substantially equivalent or superior
to its technologies.

         Although the Company seeks to ensure that it does not infringe on the
intellectual property rights of others, there can be no assurance that third
parties will not assert intellectual property infringement claims against the
Company. Any infringement claims by third parties against the Company may have a
material adverse effect on the Company's business, financial condition and
results of operations.

PRINCIPAL SUPPLIERS AND SOURCES OF SUPPLY

         The Company obtains all of its products from suppliers and is entirely
dependent upon the manufacturers and distributors that supply it with natural
products for resale. The Company does not have contracts with any suppliers
committing such suppliers to provide products as required. There can be no
assurance that suppliers will provide products needed by the Company in the
quantities requested or at a price the Company is willing to pay. At present, a
single manufacturer of natural products, Innovative Health Products, Inc.
("Innovative"), an affiliated company, supplies the Company with (i) all of the
products the Company sells under its brand labels, (ii) 30% of the products
offered at the Company's Web stores, and (iii) over 95% of the products the
Company has sold since the opening of its first online store in February 1999.
Jugal K. Taneja, the Company's Chairman and a principal shareholder of the
Company, is also a director and principal shareholder of Innovative. As a
result, any future agreement between the Company and Innovative may not be
deemed the result of arms' length negotiations. The Company has no formal
agreement with Innovative to fulfill its customers' orders. In the event a
customer desires to purchase products which the Company cannot fulfill through
Innovative, the Company has entered into an agreement with an unaffiliated
distributor of natural products for fulfillment and distribution of such orders.
Although the Company believes it can replace its relationship with Innovative
without much difficulty if this relationship terminates, the Company cannot be
assured that it will be able to establish new relationships with other vendors.
The inability of the Company to obtain adequate supplies of products at
favorable prices, or at all, could have a material adverse effect on the
Company's business, financial condition and results of operations.

                                      -6-


EMPLOYEES

         As of March 31, 1999, the Company had four employees. None of the
Company's employees are covered by a collective bargaining agreement. The
Company considers its employee relations to be good.

         In each case, the employees are permitted to participate in employee
benefit plans of the Company that may be in effect from time to time, to the
extent eligible. Each of the employees are eligible for grant of stock options
in accordance with the provisions of the Company's 1999 Stock Option Plan, as
determined by the Administrator of the Plan.

         In June 1999, the Company's Board of Directors adopted the Company's
1999 Stock Option Plan, which is subject to approval by the Company's
shareholders at its next annual meeting. The purpose of the 1999 Plan is to
enable the Company to attract and retain top-quality executive employees,
officers, directors and consultants and to provide such executive employees,
officers, directors and consultants with an incentive to enhance stockholder
return. The 1999 Plan provides for the grant to officers, directors, or other
key employees and consultants of the Company, of options to purchase an
aggregate of 400,000 shares of common stock.

CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

         The Private Securities Litigation Reform Act of 1995 (the "Act")
provides a "safe harbor" for "forward-looking statements" to encourage companies
to provide prospective information, so long as such information is identified as
forward-looking and is accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those discussed in the forward-looking statement(s). The Company
desires to take advantage of the safe harbor provisions of the Act.

         Except for historical information, the Company's Annual Report on Form
10-KSB for the year ended March 31, 1999, the Company's quarterly reports on
Form 10-QSB, the Company's current reports on Form 8-K, periodic press releases,
as well as other public documents and statements, may contain forward-looking
statements within the meaning of the Act.

         In addition, representatives of the Company, from time to time,
participate in speeches and calls with market analysts, conferences with
investors and potential investors in the Company's securities, and other
meetings and conferences. Some of the information presented in such speeches,
calls, meetings and conferences may be forward-looking within the meaning of the
Act.

         It is not reasonably possible to itemize all of the many factors and
specific events that could affect the Company and/or the Company's industry as a
whole. In some cases, information regarding certain important factors that could
cause actual results to differ materially from those projected, forecasted,
estimated, budgeted or otherwise expressed in forward-looking statements made by
or on behalf of the Company may appear or be otherwise conveyed together with
such statements. The following additional factors (in addition to other possible
factors not listed) could affect the Company's actual results and cause such
results to differ materially from those projected, forecasted, estimated,
budgeted or otherwise expressed in forward-looking statements made by or on
behalf of the Company.

         LIMITED OPERATING HISTORY, SUCCESSFUL BUSINESS MANAGEMENT OR
PROFITABILITY ACHIEVEMENT. The Company's natural products business began in
September 1998, and it commenced Internet sales in February 1999. Accordingly,
the Company has nominal revenues as of March 31, 1999 and only a limited
operating history on which to base an evaluation of its business and prospects.
The Company's prospects should therefore be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving markets
such as online commerce. Such risks for the Company include, but are not limited
to, an evolving and unpredictable business model and the management of growth.
To address these risks, the Company must, among other things, develop and
maintain its customer base, implement and successfully execute its

                                      -7-


business and marketing strategy, continue to develop and upgrade its technology
and transaction-processing systems, improve its Web sites, provide superior
customer service and order fulfillment, respond to competitive developments, and
attract, retain and motivate qualified personnel. The Company may not be able to
successfully address such risks, or manage its business to achieve or maintain
profitability. The failure to do so could have a material adverse effect on the
Company's business, prospects, financial condition and results of operations.

         NET LOSSES, ANTICIPATION OF FUTURE LOSSES AND NEGATIVE CASH FLOWS. From
inception of the Company's e-commerce business in September 1998 through fiscal
year ended March 31, 1999, the Company incurred net operating losses of
approximately $104,000. As of March 31, 1999, the Company had net equity of
approximately $38,000. The Company expects significant operating losses and
negative cash flow to continue for the foreseeable future, and the losses to
increase significantly from current levels since the Company intends to invest
heavily in brand development, marketing and promotion, Web site content
development, strategic relationship development and maintenance, and Web site
technology and operating infrastructure development.

         The Company also intends to offer attractive pricing programs, which
will reduce its gross margins. Because the Company anticipates relatively low
gross margins, its ability to become profitable given its planned expenses
depends on its ability to generate and sustain substantially higher sales. To
date, the Company has not achieved such sales. If the Company does achieve
profitability, it cannot be certain that it can sustain or increase
profitability on a quarterly or annual basis in the future.

         The Company bases its current and future expense levels on its
operating plans and estimates of future revenues. Sales and operating results
are difficult to forecast, because they generally depend on sales volume and
timing of the orders the Company receives. As a result, the Company may be
unable to adjust its spending in a timely manner to compensate for any
unexpected revenue shortfall. A shortfall in revenues will significantly harm
the Company's business and its operating results. In view of the rapidly
evolving nature of the Company's business, proposed and possible future
acquisitions, and the Company's limited operating history of selling natural
products online, the Company has minimal experience in forecasting its revenues.
If the Company cannot achieve and sustain operating profitability or positive
cash flow from operations, it may be unable to meet its working capital
requirements without seeking additional financing.

         ADDITIONAL CAPITAL NEEDS. The Company will require substantial working
capital to fund its business. The Company does not presently have adequate cash
from operations or financing activities to meet either its short-term or
long-term capital needs. In addition, the Company has an obligation to repay a
$50,000 demand note, plus accrued interest to an affiliate of Jugal K. Taneja,
the Company's Chairman, which will become due and payable upon the closing of a
secondary public offering. The Company expects to repay this debt from the
proceeds of a secondary public offering. In addition, the Company has not paid
its executive officers since inception. The Company is indebted to Stephen M.
Watters and Jugal K. Taneja in the aggregate amount of approximately $62,000 as
of June 18, 1999. The Company intends to repay the accrued salaries from the
proceeds of a secondary public offering. If a secondary public offering is not
successful, the Company expects that it will seek alternative private financing.

         In addition to the working capital requirements for repayment of debt
and accrued compensation, the Company expects operating losses and negative cash
flows to continue for the foreseeable future. Accordingly, the Company is
dependent on and intends to use a substantial portion of the proceeds of a
secondary offering to fund its operations and implement its marketing
strategies. The Company anticipates that net proceeds received from a secondary
offering will be sufficient to meet its current capital requirements through the
next twelve months. However, the Company may have additional capital needs prior
to the end of the twelve month period. Thereafter, if the Company is not able to
generate positive cash flows, it will likely have to raise additional funds.

         The actual amount and timing of the Company's future capital
requirements may differ materially from management's estimates. In particular,
estimates may be inaccurate as a result of changes and fluctuations in the
Company's revenues, operating costs and development expenses. The Company's
revenues, operating costs and development expenses may be adversely affected if
it is unable to effectively

                                      -8-


and efficiently manage the expansion of its operations, obtain favorable
co-branding or Internet marketing agreements with third parties, negotiate
favorable contracts with suppliers (including large volume discounts on
purchases of natural products), obtain brand recognition, attract sufficient
numbers of customers or increase the volume of its sales of natural products.

         The Company's revenues and costs also depend upon factors that it
cannot control. These factors include changes in technology and regulations,
increased competition and factors such as Web integrity, seasonality, and
performance by third parties in connection with its operations. Because of these
factors, revenues and costs will be uncertain and may vary considerably. These
variations may significantly affect the Company's future need for capital. Also,
if the Company accelerates the expansion of its operations or completes any
acquisitions, it will require additional funding sooner than is currently
expected. The Company may be unable to raise funds sufficient for its needs,
either on suitable terms or at all, which would substantially harm the trading
price of the Company's common stock and materially harm its business.

         UNPREDICTABILITY OF FUTURE OPERATING RESULTS. The Company's revenues
and operating results may fluctuate significantly from quarter to quarter due to
a number of factors, not all of which are in the Company's control. These
factors include: the Company's ability to attract and retain new customers and
maintain customer satisfaction; new Web sites, services and products introduced
by the Company or by its competitors; price competition; decreases in the level
of growth, use of, or consumer acceptance of, the Internet and other online
services for the purchase of consumer products; the Company's ability to upgrade
and develop its systems and infrastructure and attract new personnel in a timely
and effective manner; traffic levels on its Web site and its ability to convert
that traffic into customers; technical difficulties or system downtime affecting
the Internet or online services, generally, or the operation of the Company's
Web site; the failure of Internet bandwidth to increase significantly over time
and/or an increase in the cost to consumers of obtaining or using Internet
bandwidth; government regulations related to use of the Internet for commerce or
sales and distribution of natural products; and general economic conditions and
economic conditions specific to the Internet, online commerce and the software
industry.

         The Company must increase sales of natural products by increasing the
number of visitors to its online sites or by increasing the percentage of
visitors to its online sites who purchase natural products. The Company must
also increase the number of repeat purchasers of natural products through its
online sites and increase revenues from sales to consumer purchasers in absolute
dollars and as a percentage of its total net revenues. In addition, the Company
must successfully establish, maintain and enhance its brands, "Dr.
Nutriceutical" and "Java Slim". The Company has implemented strategies which it
believes will help to achieve these goals, such as entering into its strategic
relationship with IndigoCity.com. The Company cannot be certain that it can
accomplish these objectives, or that its business strategy will be successful.

         ESTABLISHMENT OF COMPANY BRANDS. A growing number of Internet sites,
many of which already have well-established brands, offer products and services
that compete with those of the Company. As a result, the Company believes it we
must establish, maintain and enhance its Dr. Nutriceutical and Java Slim brands.
The Company's success in promoting and maintaining its brands or any other brand
that it may use in the future will depend largely on its ability to provide a
high quality online experience supported by dedicated customer service. The
Company cannot assure that it will be able to meet these goals. In addition, to
attract and retain online users and to promote and maintain its current brands
or future brands, the Company may need to substantially increase its marketing
expenditures to create and maintain strong brand loyalty among its customers.
The Company's business could be adversely affected if its marketing efforts are
unproductive or if it cannot increase its brand awareness.

         HIGHLY COMPETITIVE MARKETS. The online commerce market is new, rapidly
evolving and intensely competitive. The Company anticipates that competition
will intensify in the future because barriers to entry are minimal, and current
and new competitors can launch new Web sites at a relatively low cost. In
addition, the natural products industry is intensely competitive. The Company
currently competes primarily with traditional resellers of natural products,
other online resellers of natural products and other vendors.

                                      -9-


         In the online market, the Company competes with many online resellers
that maintain commercial Web sites similar to those of the Company, including
MotherNature.com, GreenTree.com, DrugStore.com and PlanetRx.com. The Company
also competes with the growing number of manufacturers that sell their natural
products directly online. The Company anticipates that it may soon compete with
other vitamin and nutritional supplement manufacturers and vendors that plan to
sell their products directly to customers online in the near future. In
addition, the Company competes with traditional store-based retailers and mail
order and/or direct marketers of natural products. Competitive pressures created
by any one of these current or future competitors, could have a material adverse
affect on the Company's operations.

         RELIANCE ON MANUFACTURERS AND DISTRIBUTORS OF NATURAL PRODUCTS. The
Company is entirely dependent upon the manufacturers and distributors that
supply it with natural products for resale, and the availability of these
natural products is unpredictable. The Company also relies on distributors to
ship products to its customers. The Company has limited control over the
shipping procedures of its distributors and shipments by these distributors may
be subject to delays.

         As is common in the industry, the Company has no long-term or exclusive
arrangements with any manufacturer or distributor that guarantees the
availability of any natural products for resale. Although the Company believes
that it can replace its relationship with its current manufacturer and
distributors without much difficulty, the Company may be unable to establish
such new relationships.

         POTENTIAL CONFLICTS OF INTEREST WITH INNOVATIVE HEALTH PRODUCTS, INC.
Substantially all of the Company's sales to date have resulted from the sale of
its brand labels, which are manufactured by Innovative. The Company has not
entered into an agreement with Innovative to define the ongoing relationship
between the companies. Jugal K. Taneja, the Company's Chairman and a principal
shareholder of the Company, is also a director and principal shareholder of
Innovative. As a result, any future agreement between the Company and Innovative
may not be deemed the result of arms' length negotiations. Further, although the
Company and Innovative are engaged in different but related businesses, the
companies currently have no policies to govern the pursuit or allocation of
corporate opportunities between them, in the event they arise. The Company's
business could be adversely affected if the interests of Innovative are pursued
over the interests of the Company, either in the course of intercompany
transactions or where the same corporate opportunities are available to both the
Company and Innovative.

         DEPENDENCE ON THE INTERNET AND INTERNET INFRASTRUCTURE DEVELOPMENT. The
Company's success will depend in large part on continued growth in, and the use
of, the Internet. There are critical issues concerning the commercial use of the
Internet which remain unresolved. The issues concerning the commercial use of
the Internet which the Company expects to affect the development of the market
for its products and services include: security, ease of access, reliability,
quality of service, cost, and necessary increases in bandwidth availability.

         The adoption of the Internet for information retrieval and exchange,
commerce and communications, particularly by those enterprises that have
historically relied upon traditional means of commerce and communications,
generally will require that these enterprises accept a new medium for conducting
business and exchanging information. These entities likely will accept this new
medium only if the Internet provides them with greater efficiency and an
improved area of commerce and communication.

         Demand and market acceptance of the Internet are subject to a high
level of uncertainty and are dependent on a number of factors, including the
growth in consumer access to and acceptance of new interactive technologies, the
development of technologies that facilitate interactive communication between
organizations and targeted audiences and increases in user bandwidth. If the
Internet fails to develop or develops more slowly than the Company expects as a
commercial or business medium, it could adversely affect the Company's business.

         ONLINE COMMERCE SECURITY AND CREDIT CARD FRAUD. A significant barrier
to online commerce and communications is the secure transmission of confidential
information over public networks. The Company's business may be adversely
affected if its security measures do not prevent security breaches and it cannot
assure that it can prevent all security breaches. To the extent that the
Company's activities, or
                                      -10-



those of third-party contractors, involve the storage and transmission of
proprietary information (such as credit card numbers), security breaches could
damage the Company's reputation, and expose the Company to a risk of loss or
litigation and possible liability. Under current credit card practices, a
merchant is liable for fraudulent credit card transactions where, as is the case
with the transactions the Company processes, that a merchant does not obtain a
cardholder's signature. Fraudulent use of credit card data in the future could
adversely affect the Company's business.

         PROTECTION OF PROPRIETARY RIGHTS. The Company regards its copyrights,
service marks, trademarks, trade dress, trade secrets and similar intellectual
property as critical to its success. To protect its proprietary rights, the
Company will rely on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with its employees, customers,
partners and others. The Company will pursue the registration of its trademarks
and service marks in the United States. The Company has applied for Federal
registration of the mark "Java Slim," and intends to apply for the marks
"Nutriceuticals.com" and "Dr. Nutriceutical." The Company cannot be certain that
federal registration of these service marks or any other service mark will be
issued. In addition, effective trademark, service mark, copyright and trade
secret protection may be unavailable in countries in which the Company's
products and services are available online. The Company has not applied to
register any mark outside the U.S. or performed any trademark searches to
determine whether any of these marks are available for use or registration
outside the United States in connection with vitamins and other natural
products.

         To date, there have been no interruptions in the Company's business as
the result of any claim of infringement. However, no assurance can be given that
the Company will not be adversely affected by the assertion of intellectual
property rights belonging to others. The effects of such assertions could
include requiring the Company to alter or withdraw existing trademarks or
products, delaying or preventing the introduction of products, or forcing the
Company to pay damages if the products have been introduced.

         The steps the Company takes to protect its proprietary rights may be
inadequate, or third parties might infringe or misappropriate its trade secrets,
copyrights, trademarks, trade dress and similar proprietary rights. In addition,
others could independently develop substantially equivalent intellectual
property. The Company may have to litigate in the future to enforce its
intellectual property rights, to protect its trade secrets or to determine the
validity and scope of the proprietary rights of others. Such litigation could
result in substantial costs and the diversion of the Company's management and
technical resources which could adversely affect its business.

         GOVERNMENT REGULATION. Laws and regulations directly applicable to
communications or commerce over the Internet are becoming more prevalent. The
most recent session of the U.S. Congress resulted in Internet laws regarding
children's privacy, copyrights, taxation and the transmission of sexually
explicit material. The European Union recently enacted its own privacy
regulations. The law of the Internet, however, remains largely unsettled, even
in areas where there has been some legislative action. It may take years to
determine whether and how existing laws such as those governing intellectual
property, privacy, libel, contracts and taxation apply to the Internet. In
addition, the growth and development of the market for online commerce may
prompt calls for more stringent consumer protection laws, both in the United
States and abroad, that may impose additional burdens on companies conducting
business online. The adoption or modification of laws or regulations relating to
the Internet could adversely affect the Company's business.

         INTERNET CONTENT LIABILITY. The Company believes that its future
success will depend in part upon its ability to deliver original and compelling
descriptive content (information, articles, editorials, etc.) about the products
it sells on the Internet and about related healthcare and wellness issues.
Accordingly, the Company anticipates that it will become a publisher of online
content in the foreseeable future. At such time, it may face potential liability
for defamation, negligence, copyright, patent or trademark infringement, or
other claims based on the nature and content of materials that it publishes or
distributes. In the past, plaintiffs have brought such claims and sometimes
successfully litigated them against online services. In addition, in the event
that the Company implements a greater level of interconnectivity on its Web
sites, it will not and cannot practically screen all of the content its users
generate or access, which could expose the

                                      -11-


Company to liability with respect to such content. The Company does not
presently carry general liability insurance, and any such insurance obtained in
the future may not cover claims of these types or may be inadequate to indemnify
the Company for all liability that may be imposed on it. If the Company faces
liability, then its reputation and its business may be adversely affected.

         SALES AND OTHER TAXES. The Company does not currently collect sales or
other similar taxes for physical shipments of goods into states other than
Florida. However, one or more local, state or foreign jurisdictions may seek to
impose sales tax collection obligations on the Company and other out of state
companies which engage in online commerce. In addition, any new operations in
states outside Florida, including operations assumed in connection with the
acquisition of Healthseek.com, could subject the Company's shipments into such
states to state sales taxes under current or future laws. If one or more states
or any foreign country successfully asserts that the Company should collect
sales or other taxes on the sale of our merchandise, it could adversely affect
the Company's business.

         CAPACITY CONSTRAINTS, RELIANCE ON INTERNALLY DEVELOPED SYSTEMS AND
SYSTEM DEVELOPMENT. A key element of the Company's strategy is to generate a
high volume of traffic on, and use of, its Web sites. The Company's revenues
depend on the number of customers who use its Web site to purchase natural
products. Accordingly, its Web site transaction processing systems and network
infrastructure performance, reliability and availability are critical to its
operating results. These factors are also critical to the Company's reputation
and its ability to attract and retain customers and maintain adequate customer
service levels. The volume of goods the Company sells and the attractiveness of
its product and service offerings will decrease if there are any systems
interruptions that affect the availability of the Company's Web sites or its
ability to fulfill orders. The Company has experienced periodic systems
interruptions, which management believes may continue to occur. The Company will
continually enhance and expand its technology and transaction processing
systems, and network infrastructure and other technologies, to accommodate
increases in the volume of traffic on its Web sites. The Company cannot assure
that it will be successful in these efforts or that it will be able to
accurately project the rate or timing of increases in the use of its Web sites.
The Company may also fail to timely expand and upgrade its systems and
infrastructure to accommodate these increases.

         In addition, the Company cannot predict whether additional network
capacity will be available from third party suppliers as it is needed. Also, the
Company's network or its suppliers' network might be unable to timely achieve or
maintain a sufficiently high capacity of data transmission to timely process
orders, especially if its Web site traffic increases. The Company's failure to
achieve or maintain high capacity data transmission could significantly reduce
consumer demand for its services.

         The Company's success, in particular its ability to successfully
receive and fulfill orders and provide high quality customer service, largely
depends on the efficient and uninterrupted operation of its computer and
communications systems. The Company and its wholly-owned subsidiary contract
with third parties to host computer and communications hardware systems and to
maintain the Company's critical connection to the Internet.

         The Company's systems and operations are vulnerable to damage or
interruption from fire, flood, power loss, telecommunications failure,
break-ins, earthquake and similar events. The Company has no formal disaster
recovery plan and carries no business interruption insurance to compensate it
for losses that may occur. Furthermore, the Company's security mechanisms or
those of its suppliers may not prevent security breaches or service breakdowns.
Despite the Company's implementation of security measures, its servers may be
vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions. These events could cause interruptions or delays in the Company's
business, loss of data or render the Company unable to accept and fulfill
customer orders.

         RAPID TECHNOLOGICAL CHANGE. To remain competitive, the Company must
continue to enhance and improve the responsiveness, functionality and features
of its online stores. The Internet and the online commerce industry are
characterized by rapid technological change, changes in user and customer
requirements and preferences and frequent product and service introductions. If
competitors introduce products and services embodying new technologies or if new
industry standards and practices emerge, then

                                      -12-


the Company's existing Web sites, proprietary technology and systems may become
obsolete. The Company's future success will depend on its ability to both
license and/or internally develop leading technologies useful in its business,
enhance its existing services, develop new services and technology that address
the increasingly sophisticated and varied needs of its prospective customers,
and respond to technological advances and emerging industry standards and
practices on a cost-effective and timely basis.

         The development of the Company's Web sites and other proprietary
technology entail significant technical and business risks. The Company may use
new technologies ineffectively or may fail to adapt its Web sites, proprietary
technology and transaction processing systems to customer requirements or
emerging industry standards. If the Company faces material delays in introducing
new services, products and enhancements, its customers may forego the use of its
products and services and use those of the Company's competitors.

         YEAR 2000 COMPLIANCE. Many existing computer programs use only two
digits to identify a year in the date field (i.e., 98 would represent 1998).
These programs and databases were designed and developed without considering the
impact of the upcoming millennium. If not corrected, many computer systems could
fail or create erroneous results relating to the year 2000. The Company has
assessed its systems which permit the sale, order, processing and delivery of
natural products to its customers to determine year 2000 compliance. Based on
its review and the results of limited testing, the Company believes its internal
systems are year 2000 compliant.

         The Company also utilizes software, computer technology and other
services internally developed and provided by third-party vendors that may fail
due to the year 2000 phenomenon. For example, the Company is dependent on the
institutions involved in processing its customers' credit card payments for
Internet services. The Company is also dependent on telecommunications vendors
and leased point-of-purchase vendors to maintain network reliability.

         However, known or unknown errors or defects that affect the operation
of the Company's systems could result in delay or loss of revenue, interruption
of shopping services, cancellation of customer contracts, diversion of
development resources, damage to its reputation, costs, and litigation costs,
any of which could adversely affect the Company's business, financial condition
and results of operations. The expenses associated with the Company's assessment
and potential remediation plan cannot be determined. Further, at this time, the
Company does not have enough information to determine the most reasonably likely
worst case scenario. Therefore, the Company does not have a contingency plan in
place to handle the most reasonably likely worst case scenario, and does not
intend to create one.

GENERAL RISKS

         NEW MANAGEMENT TEAM AND NEED FOR ADDITIONAL PERSONNEL. The Company's
online commerce business commenced in September 1998 and it launched its first
online store in February 1999. The Company is substantially dependent on the
efforts of its founders and principal officers who have no proven record of
success in the retailing of natural products via the Internet. In addition, the
Company's future success depends on its ability to identify, attract, hire,
train, retain and motivate other highly skilled technical, managerial,
editorial, merchandising, marketing and customer service personnel. The Company
currently has only 4 employees, including a consultant who operates the
Company's Healthseek.com Web site. Further, the Company's Chief Executive
Officer, Jugal K. Taneja, also serves as the Chairman of the Board of Dynamic
Health Products and, accordingly, plays only a limited role in the management of
the Company. The Company expects to add additional personnel to manage the
anticipated growth of its operations. However, the e-commerce market is highly
competitive, and retaining new personnel could be costly in terms of cash
compensation or equity necessary to attract qualified personnel to the Company,
or such personnel may not be available to the Company on any terms. Competition
for these individuals is intense and the Company may be unable to successfully
attract, assimilate or retain sufficiently qualified personnel in the future.
The Company does not currently carry key man life insurance for any of its
founders or executive officers.

                                      -13-


         LACK OF INDEPENDENT DIRECTORS. As of this date, the Company has no
independent directors. The Company has identified two persons who have indicated
their willingness to serve as directors, and the Company presently intends to
undertake to appoint such persons following completion of a secondary offering
and the purchase of director and officer liability insurance. In the absence of
independent directors, however, none of the ongoing transactions, or past
transactions which are now closed, between the Company and its affiliates were
approved by independent directors, and until such independent directors are
appointed, any future transactions between the Company and its affiliates will
continue to be approved by directors who are also officers of the Company.

         RELIANCE ON STRATEGIC MARKETING ALLIANCES. In an effort to drive
traffic to the Company's Web sites, it has entered into a marketing alliance
with IndigoCity.com, Inc., a newly-formed Internet media company that offers a
branded network of comprehensive information, communication and shopping service
for customers.

         Although the Company believes its strategic marketing alliance with
IndigoCity.com will represent a significant distribution channel for its natural
products, it cannot assume that this alliance will meet this expectation,
particularly because IndigoCity.com is new and it is not certain whether
IndigoCity.com will achieve its anticipated positive market presence and growth.
Conversely, if IndigoCity.com is successful, termination of the Company's
alliance with IndigoCity.com could have a material adverse affect on the
Company's business. The Company intends to enter into similar marketing
alliances with others. The inability to enter into similar alliances with others
may also have a material adverse affect on the Company's business.

         POSSIBLE FUTURE ACQUISITIONS. The Company intends to continue to make
investments in complementary companies, products or technologies. If the Company
acquires a company, it could have difficulty in assimilating that company's
personnel and operations. In addition, the key personnel of an acquired company
may decide not to work for the Company. If the Company makes other types of
acquisitions, it could have difficulty in assimilating the acquired technology
or products into the Company's operations. These difficulties could disrupt the
Company's ongoing business, distract its management and employees and increase
its expenses. In addition, future acquisitions could have a negative impact on
the Company's business, financial condition and results of operations.
Furthermore, the Company may have to incur debt or issue equity securities to
pay for any future acquisition, the issuance of which would be dilutive to the
Company's existing stockholders.

         CONCENTRATION OF CUSTOMERS. For the year ended March 31, 1999, no
customers represented 10% or more of the Company's sales.

         CONTROL BY CERTAIN STOCKHOLDERS. Directors, executive officers and
principal shareholders beneficially owned approximately 67.5% of the outstanding
shares of the Company's common stock. Therefore, these stockholders will have
significant control over the election of the Company's directors and most of the
Company's corporate actions.

         PROVISIONS ON THE PAYMENT OF DIVIDENDS. The Company has not declared
cash dividends on its common stock and the Company does not anticipate paying
cash dividends in the foreseeable future. The Company currently expects to
retain future earnings, if any, to finance the growth and development of its
business.

ITEM 2. PROPERTIES.

         The Company's principal administrative, marketing and customer service
facilities total approximately 400 square feet of office and warehouse space,
which is located at 6950 Bryan Dairy Road, Largo, Florida 33777, and is
currently provided to the Company, without charge, by Innovative Health
Products, Inc., an affiliated company. These facilities will not be sufficient
for the near future. The Company plans to acquire new facilities of 1,000 to
3,000 square feet for administrative, customer service and limited warehousing
purposes.

                                      -14-


ITEM 3. LEGAL PROCEEDINGS.

         From time to time, the Company may become involved in litigation
arising in the ordinary course of its business. The Company is not presently
subject to any material legal proceedings.

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

         Matters voted on by Company shareholders at the Special Meeting of
Shareholders held on March 15, 1999:

(a)  Proposal to reduce the number of outstanding shares of the common stock,
     par value $.001 per share, of NuMed Surgical ("NuMed Common Stock"),
     through a one-for-fifty reverse split of such outstanding shares (the
     "Reverse Stock Split").

     There were 7,009,716 shares (80.4%) voted in favor of, 187,972 shares cast
     against, and 97,664 abstentions relating to the Reverse Stock Split at the
     Special Meeting.

(b)  Proposal to adopt the Agreement and Plan of Merger dated as of January 15,
     1999 by and between Nutriceuticals.com Corporation, a development stage,
     Florida corporation and NuMed Surgical, pursuant to which
     Nutriceuticals.com will be merged with and into NuMed Surgical (the
     "Merger"), with NuMed Surgical as the corporation surviving the Merger, and
     in which (i) each issued and outstanding common share of Nutriceuticals.com
     will be converted into one (1) share of NuMed Common Stock, (ii) NuMed
     Surgical's corporate name will be changed to "Nutriceuticals.com
     Corporation," and (iii) the officers and directors of Nutriceuticals will
     become the officers and directors of NuMed Surgical after the Merger.

     There were 5,347,152 shares (60.6%) voted in favor of, 160,165 cast
     against, and 101,164 abstentions relating to the merger.

                                      -15-



                                     PART II

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

         The Company's common stock is quoted on the OTC Electronic Bulletin
Board and is traded under the symbol "JCOM." The Company intends to apply to
have its stock approved for listing on the Nasdaq SmallCap Market.

         From 1997 through March 1999, before the Company commenced its
e-commerce business, there was no active trading market for its common stock.
From April 1999 to June 18, 1999, there were a total of 10 trades reported for
the Company's common stock on the OTC Electronic Bulletin Board. During such
period, the high ask and low bid information as reported ranged from $26.00 per
share to $4.00 per share. On June 18, 1999, the last reported sale price of the
common stock on the OTC Electronic Bulletin Board was $4.00 per share. Due to
the limited trading in its common stock, the Company believes that such trading
prices are not indicative of a true market price for its shares.

         As of June 14, 1999, there were approximately 546 shareholders of
record of the Company's common stock.

         Historically, the Company has not declared or paid any cash dividends
on its common stock. It currently intends to retain any future earnings to fund
the development and growth of its business. Any future determination to pay
dividends on the common stock will depend upon the Company's results of
operations, financial condition and capital requirements.

RECENT SALES OF UNREGISTERED SECURITIES

         During the past three years, the Company has issued unregistered
securities to a limited number of persons as described below. The following
information regarding the Company's shares of common stock has been adjust to
give effect to (i) the one-for-fifty reverse split of the Company's common stock
effected in March 1999, and (ii) the two-for-one stock split in the form of a
stock dividend effected in April 1999.

         (1)      On March 15, 1999, the Company issued an aggregate of
                  4,800,000 shares of common stock to 14 investors in connection
                  with the merger of Nutriceuticals.com Corporation, a Florida
                  corporation, with and into the Company; and

         (2)      On March 31, 1999, the Company issued an aggregate of 200,000
                  shares of common stock, to one (1) investor in connection with
                  the acquisition of Healthseek.com Corporation, a Massachusetts
                  corporation.

         None of the foregoing transactions involved any underwriters,
underwriting discounts or commissions or any public offering, and the Company
believes that each transaction was exempt from the registration requirements of
the Securities Act by virtue of Section 4(2) thereof, Regulation D promulgated
thereunder. The recipients in such transactions represented their intention to
acquire the securities for investment only and not with a view to or for sale in
connection with any distribution thereof, and appropriate legends were affixed
to the share certificates and instruments issued in such transactions. All
recipients had adequate access, through their relationships with the Company, to
information about the Company.

                                      -16-



ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

OVERVIEW

         The Company derives it revenues from online retail sales of natural
products. Revenues are billed and recognized when product is shipped to the
customer, net of discounts, allowances, returns and credits. Cost of goods sold
is comprised of direct product costs. Selling, general and administrative costs
include administrative, sales and marketing and other indirect operating costs.

RESULTS OF OPERATIONS

         In March 1997, the Company adopted a plan of liquidation by which it
sold its major product line and subsequently disposed of all of its operating
assets by March 31, 1998. In March 1999, the Company acquired all of the
outstanding common stock of Nutriceuticals.com Corporation, a Florida
corporation, which was organized in September 1998. NuMed Surgical, Inc. then
merged with Nutriceuticals.com Corporation and changed its name to
Nutriceuticals.com Corporation.

         The Company had revenues of $37,118 since the inception of its
e-commerce business in September 1998 through March 31, 1999. Gross profit was
60.9% for the period. Selling, general and administrative expenses were $128,858
for the period ended March 31, 1999.

         The Company has no income tax provision for the period presented due to
its net operating losses. These net operating losses may be carried forward for
up to 15 years to offset future taxable income. See Note 5 to consolidated
financial statements.

         Management believes that there was no material effect on operations or
the financial condition of the Company as a result of inflation in 1999 and
1998. Management also believes that its business is not seasonal; however,
significant promotional activities can have a direct impact on sales volume in
any given quarter.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

         The Company has financed its operations through loans from within the
Company. The Company had a working capital deficit of $9,953 at March 31, 1999.
The Company estimates that it will need the proceeds from its secondary offering
for on-going Web site development, marketing, promotions, and for general
working capital purposes over the next 12 months, including the Company's plans
to hire additional full-time management personnel and acquire new office space.

         Net cash used in operating activities was ($62,728) for the period
presented. The usage of cash is primarily attributable to the net operating loss
as well as an increase in accounts receivable ($9,278), as a result of increased
sales by the Company during such period, and an increase in inventory ($16,303),
partially offset by a decrease in accounts payable $69,311.

         Net cash used in investing activities was ($15,000) representing the
purchase of computer software.

         Net cash provided by financing activities was $130,000 representing
initial capital contributions $30,000 and the sales of common stock of $100,000.

         In March 1999, the Company acquired all of the issued and outstanding
capital stock of Nutriceuticals.com Corporation. As a result of the merger, each
issued and outstanding share of Nutriceuticals common stock was converted into
one share of NuMed Surgical common stock (on a one-for-fifty post-reverse stock
split basis).

                                      -17-



         In March 1999, the Company acquired all of the issued and outstanding
capital stock of Healthseek.com Corp., and its popular and award winning
healthcare content and community site, www.healthseek.com. Healthseek.com is
frequented daily by hundreds of care giving professionals, medical patients, and
consumers. The site offers a rich set of features and important resources, as
well as monthly "spotlighted" Web sites and client offerings, to make each user
experience pleasant, informative and fun. The acquisition of Healthseek.com is
intended to provide content and community and generate traffic to the Company's
online stores. In connection with this acquisition, the Company issued 200,000
shares of its common stock (on a post two-for-one split basis) to Healthseek's
sole shareholder in exchange for all of the outstanding shares of Healthseek.com
common stock. Also pursuant to the purchase agreement with Healthseek, the
Company entered into a consulting arrangement with the sole shareholder of
Healthseek to maintain and operate the Healthseek.com Web site. Under the terms
of the consulting agreement, the consultant received an initial $10,000 payment,
and he will receive an additional $40,000 annual salary for the current year,
and for every year in which the consulting agreement is renewed by the Company.

         In May 1999, 21st Century Healthcare Fund, LLC, an affiliate of the
Company's Chairman loaned $50,000 to the Company for the purpose of assisting
the Company with its working capital needs. The principal sum, together with
interest on the unpaid principal balance at an annual rate equal to prime plus
one percent, is due and payable on demand at any of time following the earlier
to occur of either (i) a public offering of the Company's common stock pursuant
to a registration statement filed with the Securities and Exchange Commission,
or (ii) December 31, 1999.

         The Company will need additional capital in the future. In order to
satisfy its cash requirements in the next 12 months, the Company estimates that
it will need approximately $5 million to fund its operations and its marketing
strategies designed to build its customer base through increased recognition of
the Company's brand names and increased traffic to its Web sites. The Company
also anticipates expending approximately $500,000 for development of its Web
site infrastructures, $1 million for the employment of current and additional
personnel (up to 15 additional persons), and $100,000 for the acquisition of
office and warehouse facilities. There can be no assurances that future capital
will become available when needed, or at all. In the event that the Company is
not able to obtain the needed funds in the future, it may not be able to
continue operations or put its business plan into full effect.

         The Company has filed a pending registration statement with the
Securities and Exchange Commission, however there can be no assurance as to the
completion of the secondary offering.  Future equity investments in the Company
may have a dilutive effect on the percentage ownership of the Company's present
shareholders.


YEAR 2000 STATEMENT

         The Year 2000 issue encompasses the required recognition of computer
hardware and software systems and computer controlled devices, including
equipment, used in the Company's distribution and manufacturing operations to
properly acknowledge the change from Year 1999 to Year 2000. The failure of any
hardware and software systems or equipment to timely and accurately recognize
such change could result in partial or complete systems failure. In the normal
course of business, the Company relies on products and services from critical
vendors, customers and other third parties whose computer systems must also be
Year 2000 compliant in order for the Company to realize the uninterrupted flow
of its business operations. The Company is actively taking steps to ensure that
its systems and equipment will be Year 2000 compliant, including assessing the
scope of work, prioritizing, certifying compliance, and testing compliance.

         The Company has identified those systems and equipment in its
operations that are considered to be critical to the Company's day to day
operations. All of the Company's systems and equipment utilized in the its
operations was tested for Year 2000 compliance during February and March 1999,
with approximately 95% of such systems and equipment being certified as Year
2000 compliant as of March 31, 1999. The Company is in the process of obtaining
written assurances from its third-party software providers that the software
used by the Company is Year 2000 compliant. In addition, the Company is

                                      -18-



actively seeking assurances of Year 2000 compliance from each of its key
suppliers, customers and other third parties with whom the Company conducts
business. A lack of response or inadequate or inaccurate information from such
third parties could materially affect the Company's assessment for Year 2000
readiness. Until assessments are completed, which is expected to occur during
1999, the Company cannot predict whether the failure of any such third party to
be Year 2000 compliant will have a material adverse effect on the Company's
business.

         To date, the costs incurred by the Company to address Year 2000 issues
have been immaterial, and the Company expects that the costs to complete Year
2000 compliance certification, testing and verifications will also be
immaterial. Where appropriate, the Company will develop contingency plans in
areas it determines that Year 2000 readiness is insufficient. However, no
assurances can be given that the Company's Year 2000 efforts are appropriate,
adequate, or complete. In addition, the Company is unable to fully determine the
effect of a failure of its own systems or those of any third party with whom it
conducts business, but any significant failures could have a material adverse
effect on the Company's financial condition, results of operations and cash
flows.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         See financial statements following Item 13 of this Annual Report on
Form 10-KSB.

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

         None.

                                      -19-



                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The following are the names and certain information regarding the
current Directors and Executive Officers of the Company:

       NAME              AGE      POSITION                        DIRECTOR SINCE
       ----              ---      --------                        --------------

Jugal K. Taneja          55       Chairman of the Board,                1996
                                  Chief Executive Officer,
                                  Secretary and Director

Stephen M. Watters       32       President and Director                1999

Mandeep K. Taneja        24       Director                              1999

         Pursuant to the Company's bylaws, each director of the Company serves
as a director for a term of one year and until his successor is duly qualified.
Officers shall be appointed annually by the Board of Directors, at its annual
meeting, to hold such office until an officer's successor shall have been duly
appointed and qualified, unless an officer sooner dies, resigns or is removed by
the Board.

BACKGROUND OF EXECUTIVE OFFICERS AND DIRECTORS

         Jugal K. Taneja has served as the Chief Executive Officer of the
Company from its inception in October 1993 until April 18, 1995, and from
January 1, 1996 until the present. He has also served as the President,
Secretary and a Director of the Company since its inception. From November 1991
until December 1998, he also served as the Chairman of the Board and Chief
Executive Officer of NuMed Home Health Care, Inc., which operates eight
wholly-owned subsidiaries providing home health care services and staffing, and
contract rehabilitation staffing. Mr. Taneja also has served as the Chairman of
the Board of Dynamic Health Products, Inc. since its inception in 1992. Dynamic
Health Products, Inc. is a manufacturer and distributor of nutritional and
health products, and the parent company of Innovative Health Products, Inc.,
Becan Distributors, Inc. and its subsidiary Discount Rx Inc., Incredible
Products of Florida, Inc., J.Labs, Inc., and Herbal Health Products, Inc.
Previously, Mr. Taneja served as Senior Vice President of Union Commerce Bank
and Huntington National Bank from 1979 to 1983.

         Stephen M. Watters was President and a Director of Nutriceuticals.com
Corporation since its inception in September 1998 until its merger with and into
the Company in March 1999. Since the merger he has been President and a Director
of the Company. Mr. Watters was Vice President of Finance of Dynamic Health
Products, Inc., from September through November 1998. Prior to his association
with Dynamic Health Products, Inc., Mr. Watters was in the investment banking
and brokerage business. He served as Vice President, Sales for Gilford
Securities, from February 1998 to September 1998; Vice President, Sales for
Hobbs, Melville Corp., from November 1997 to February 1998; and as Branch
Manager, Sales, with Schneider Securities, Inc. from 1995 to 1997. He received
his Executive Masters of Business Administration Degree from Case Western
Reserve University in 1997.

         Mandeep K. Taneja has served as Director of Nutriceuticals.com
Corporation since its inception in September 1998. During the past five years,
Mandeep Taneja earned an undergraduate degree in Business Management from the
University of Rochester, and a doctorate degree from the University of Miami
School of Law. He is currently a law clerk with the law firm of Johnson,
Blakely, Pope, Bokor, Ruppel & Burns, P.A. in Tampa, Florida. Mandeep Taneja has
actively invested in various venture capital activities and he is the son of
Jugal K. Taneja.

                                      -20-



DIRECTOR MEETINGS AND COMMITTEES

         During the fiscal year ended March 31, 1999, the Board of Directors of
the Company held a total of 7 meetings. Each of the Directors attended more than
75% of the total number of meetings of the Board of Directors. The Company does
not have standing audit, nominating or compensation committees, or committees
performing similar functions.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
all executive officers, directors, and each person who is the beneficial owner
of more than 10% of the common shares of a company that files reports pursuant
to Section 12 of the Exchange Act, are required to report the ownership of such
common shares, options, and stock appreciation rights (other than certain
cash-only rights), and any changes in that ownership, with the Securities and
Exchange Commission (the "SEC"). Specific due dates for these reports have been
established, and the Company is required to report, in this Proxy Statement, any
failure to comply therewith during the fiscal year ended March 31, 1998. The
Company believes that all of these filing requirements are presently satisfied
by its Officers, Directors and by the beneficial owners of more than 10% of the
Company's common stock, except that 21st Century Healthcare Fund, LLC made an
inadvertently late filing of its Form 3 (Initial Statement of Beneficial
Ownership of Securities), which form must be filed with the SEC shortly after a
person becomes a 10% beneficial owner. In making this statement, the Company has
relied on copies of the reporting forms received by it, and upon the written
representations from certain reporting persons that no Form 5 (Annual Statement
of Changes in Beneficial Ownership) were required to be filed under applicable
rules of the SEC.

ITEM 10.  EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE


                                           ANNUAL COMPENSATION(1)
(a)                               (b)       (c)        (d)             (e)

NAME AND                                                          OTHER ANNUAL
PRINCIPAL POSITION                YEAR    SALARY($)   BONUS($)  COMPENSATION($)

Jugal K. Taneja, CEO              1999    $     -0-   $    -0-   $     -0-
                                  1998    $     -0-   $    -0-   $     -0-
                                  1997    $     -0-   $    -0-   $     -0-

         (1) The Company has no officers or other individuals whose compensation
         from the Company exceeded $100,000 in any of the past three fiscal
         years. All employees of the Company are paid by the Company.

         Directors of the Company receive no compensation or other remuneration
for serving on the Board of Directors, expect for the reimbursement for
reasonable expenses incurred in attending meetings of the Company's Board of
Directors.

EMPLOYMENT AGREEMENTS

         In the first quarter of the current fiscal year, the Company entered
into an employment agreement with Stephen M. Watters which provides for an
initial term of three years commencing April 15, 1999 at an initial base salary
of $150,000, plus an annual performance bonus and stock options to be determined
by the Board of Directors, in exchange for Mr. Watters' full-time services to
the Company. Mr. Watters' employment agreement also contains standard
termination provisions for disability, for cause, and for good reason. Mr.
Watters' employment agreement further provides for health insurance benefits and
contains confidentiality and non-competition provisions that prohibit him form
competing with the Company. The period covered by the non-competition provisions
will end three years after Mr. Watters' termination.

                                      -21-


         The Company also entered into an employment agreement with its Chief
Executive Officer, Jugal K. Taneja for an initial term of one year commencing
April 15, 1999, at an annual salary of $100,000, in exchange for Mr. Taneja's
services to the Company. It is anticipated that Mr. Taneja will devote 25% of
his time to the affairs of the Company. Mr. Taneja's employment agreement also
contains standard termination provisions for disability, for cause, and for good
reason. Mr. Taneja's employment agreement further provides for health insurance
benefits and contains confidentiality and non-competition provisions that
prohibit him form competing with the Company. The period covered by the
non-competition provisions will end three years after Mr. Taneja's termination.

1999 STOCK OPTION PLAN

         Under the Company's 1999 Stock Option Plan, 400,000 shares of common
stock are reserved for issuance upon exercise of stock options. The Plan is
designed as a means to retain and motivate key employees. The Board of Directors
administers and interprets the Plan. Options may be granted to all eligible
employees of the Company, including officers and non-employee directors and
others who perform services for the Company.

         The Plan provides for the granting of both incentive stock options (as
defined in Section 422 of the Internal Revenue Code) and non-statutory stock
options. Options are granted under the Plan on such terms and at such prices as
determined by the Board of Directors, except that the per share exercise price
of the options cannot be less than the fair market value of the common stock on
the date of the grant. Each option is exercisable after the period or periods
specified in the option agreement, but no option may be exercisable after the
expiration of ten years from the date of grant. Options granted under the Plan
are not transferable other than by will or by the laws of descent and
distribution. Presently, the Company has not granted any options under the Plan.

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

         The following table sets forth certain information, as of June 14, 1999
with respect to the beneficial ownership of the outstanding Common Stock by (i)
any holder of more than five (5%) percent; (ii) each of the Company's officers
and directors; and (iii) the directors and officers of the Company as a group.
Except as otherwise indicated, each of the shareholders listed below has sole
voting and investment power over the shares beneficially owned.


                                                AMOUNT AND
                                                NATURE OF            APPROXIMATE
TITLE OF          NAME AND ADDRESS              BENEFICIAL           PERCENT
CLASS             OF BENEFICIAL OWNER           OWNERSHIP(1)(2)      OF CLASS
- -----             -------------------           ---------------      --------

Common   Stephen M. Watters                     2,000,000              38.8%

Common   Jugal K. Taneja(3)                     1,077,630              20.9%

Common   21st Century Healthcare Fund, LLC(4)     600,000              11.6%
         6950 Bryan Diary Road
         Largo, Florida 33777

Common   Manju Taneja(5)                          423,642               8.2%

Common   Mandeep K. Taneja(6)                     400,000               7.8%

Common   All officers and directors as
         a group (3 persons)                    3,477,630              67.5%
- -------------------

                                      -22-



 (1) Number of shares beneficially owned is determined based on 5,153,414 shares
     outstanding as of June 14, 1999. Beneficial ownership is determined in
     accordance with the rules of the Securities and Exchange Commission. The
     number of shares beneficially owned by a person includes shares of common
     stock subject to options held by that person that are currently exercisable
     or exercisable within 60 days of April 30, 1999. Such shares issuable
     pursuant to such options are deemed outstanding for computing the
     percentage ownership of the person holding such options but not deemed
     outstanding for the purposes of computing the percentage ownership of each
     other person. To the Company's knowledge, the persons named in this table
     have sole voting and investment power with respect to all shares of common
     stock shown as owned by them, subject to community property laws where
     applicable and except as indicated in the other footnotes to this table.
     Unless otherwise indicated, the address of each of the individuals named
     above is: c/o Nutriceuticals.com Corporation, 6950 Bryan Dairy Road, Largo,
     Florida 33777.

(2)  Except as otherwise indicated by footnote, the persons named in the table
     have sole voting and investment power with respect to all of the common
     shares beneficially owned by them.

(3)  Includes all of the shares held of record by 21st Century Healthcare Fund,
     LLC, a limited liability company of which Jugal K. Taneja is the principal;
     17,988 shares held of record by The First Delhi Trust, a trust established
     for the benefit of the children of Jugal K. Taneja; 36,000 shares held of
     record by Westminster Trust Company; and 420,982 shares held of record by
     Manju Taneja, his spouse. Mr. Taneja disclaims voting power with respect to
     the shares held of record by his spouse.

(4)  21st Century Healthcare Fund, LLC, is a limited liability company of which
     Jugal K. Taneja is the principal.

(5)  Includes 2,660 shares held of record by Jugal K. Taneja, her spouse. Mrs.
     Taneja disclaims voting power with respect to the shares held of record by
     her spouse. Does not include shares held of record by 21st Century
     Healthcare Fund, LLC, The First Delhi Trust or Westminster Trust Company,
     whose shares are beneficially owned by her husband.

(6)  Mandeep K. Taneja is the adult son of Jugal K. Taneja and Manju Taneja.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Innovative Health Products, Inc. is the supplier of substantially all
of natural products sold by the Company, however, there presently is no
agreement between the Company and Innovative for the fulfillment of the
Company's customer orders. Innovative is a wholly-owned subsidiary of Dynamic
Health Products, Inc. ("Dynamic"), a manufacturer and distributor of nutritional
and health products, and a public company whose shares are not publically
traded. Dynamic is approximately 56% beneficially owned and operated by Jugal K.
Taneja, the Company's Chairman and Chief Executive Officer. Any products
obtained by the Company from Innovative have been and will continue to be
supplied on terms which are not less favorable than those which the Company
could obtain from a disinterested third party vendor or less favorable than
those on which Innovative would sell to a disinterested third party.

         The Company is currently utilizing office and warehouse space, and
general office equipment, which has been provided to the Company, without
charge, by Innovative.

         On March 15, 1999, the Company acquired all of the issued and
outstanding capital stock of Nutriceuticals.com Corporation in return for
100,000 shares of common stock of the Company. As a result of the merger, each
issued and outstanding share of Nutriceuticals common stock was converted into
one share of NuMed Surgical common stock. Mr. Taneja, the Company's Chairman,
had beneficial ownership of approximately 28% of the Company prior to the merger
and approximately 21% after the merger.

                                      -23-



                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)(1)  FINANCIAL STATEMENTS.

See pages F-1 through F-15.

(a)(2) EXHIBITS.

         The following exhibits are filed with this report:

2.1      Agreement and Plan of Merger by and between NuMed Surgical, Inc. and
         Nutriceuticals.com Corporation, dated as of January 15, 1999. (1)

2.2      Agreement and Plan of Reorganization between the Registrant and Eric
         Egnet, dated March 31, 1999. (1)

3.1      Articles of Incorporation of NuMed Surgical, Inc., filed October 18,
         1993. (1)

3.2      Bylaws of NuMed Surgical, Inc., filed October 18, 1993. (1)

3.3      Articles of Incorporation of Nutriceuticals.com Corporation, filed
         September 8, 1998.

10.1     Employment Agreement by and between Nutriceuticals.com Corporation and
         Stephen M. Watters, dated as of April 1, 1999. (1)

10.2     Employment Agreement by and between Nutriceuticals.com Corporation and
         Jugal K. Taneja, dated as of April 1, 1999. (1)

10.3     Consulting Agreement and Agreement Regarding Ownership of Computer
         Software between Healthseek.com Corp. and Eric Egnet, dated as of March
         31, 1999. (1)

10.4     Strategic Alliance Agreement by and between IndigoCity.com, Inc. and
         Nutriceuticals.com Corporation, dated as of April 13, 1999. (1)

10.5     Proposed Nutriceuticals.com Corporation 1999 Incentive and Non-
         Statutory Stock Option Plan.

21.1     Subsidiaries of Nutriceuticals.com Corporation. (1)

27.1     Financial Data Schedule (for SEC use only).

         (1)  Incorporated by reference to the Company's Registration Statement
              on Form SB-2, filed June 29, 1999, file number 0-24362, filed in
              Washington, D.C.

(b) REPORTS ON FORM 8-K.

         None.

                                      -24-


                                   SIGNATURES

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



                                        NUTRICEUTICALS.COM CORPORATION

DATED:   July 12, 1999                  By: /s/ JUGAL K. TANEJA
                                            ------------------------------------
                                        Jugal K. Taneja, Chief Executive Officer

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

SIGNATURE                     TITLE                              DATE
- ---------                     -----                              ----


/s/ JUGAL K. TANEJA
- --------------------------    Chairman of the Board,             July 12, 1999
Jugal K. Taneja               Chief Executive Officer,
                              Secretary and Director

/s/ STEPHEN M. WATTERS        President and Director             July 12, 1999
- --------------------------
Stephen M. Watters

/s/ MANDEEP K. TANEJA         Director                           July 12, 1999
- --------------------------
Mandeep K. Taneja

                                      -25-



                         NUTRICEUTICALS.COM CORPORATION


            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES



Independent Auditors' Report                                          F-2

Consolidated Balance Sheets as of March 31, 1999 and 1998             F-3

Consolidated Statement of Income for the period from September
         8, 1998 (date of inception) to March 31, 1999                F-4

Consolidated Statements of Changes in Net Deficiency in
         Liquidation for the period from April 1, 1998 to
         September 7, 1998 and the year ended March 31, 1998          F-5

Consolidated Statements of Stockholders' Equity (Deficit)
         for the years ended March 31, 1999 and 1998                  F-6

Consolidated Statement of Cash Flows for the period from September
         8, 1998 (date of inception) to March 31, 1999                F-7

Notes to Consolidated Financial Statements                            F-8 - F-15




                                       F-1



                     REPORT OF KIRKLAND, RUSS, MURPHY & TAPP

To the Board of Directors and Shareholders
Nutriceuticals.com Corporation:

         We have audited the accompanying consolidated balance sheets of
Nutriceuticals.com Corporation, as of March 31, 1999 and 1998, and the related
statements of income, stockholders' equity, and cash flows for the period from
September 8, 1998 (date of inception) to March 31, 1999, and the related
statement of changes in net deficiency in liquidation for the period from April
1, 1998 to September 7, 1998 and the year ended March 31, 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Nutriceuticals.com, Corporation as of March 31, 1999 and 1998, and results of
its operations and its cash flows for the period from September 8, 1998 (date of
inception) to March 31, 1999, and results of its changes in net deficiency in
liquidation for the period from April 1, 1998 to September 7, 1998 and the year
ended March 31, 1998, in conformity with generally accepted accounting
principles.
                                            KIRKLAND, RUSS, MURPHY & TAPP
Clearwater, Florida
April 26, 1999
                                       F-2

                         NUTRICEUTICALS.COM CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                             MARCH 31, 1999 AND 1998


                                     ASSETS
                                                                    1999       1998
                                                                  --------   --------
                                                                       
Current assets:
      Cash                                                        $ 56,986      8,274
      Accounts receivable, less allowance for doubtful
        accounts of $-0- and $13,270, in 1999 and 1998               9,278       --
      Due from related party                                         5,171       --
      Inventory                                                     16,303       --
                                                                  --------   --------
                   Total current assets                             87,738      8,274

Computer software, net                                              47,500       --
Deposits                                                               380       --
                                                                  --------   --------
                                                                  $135,618      8,274
                                                                  ========   ========
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
      Accounts payable                                              80,186        500
      Accrued expenses                                              17,505     16,437
                                                                  --------   --------
                   Total current liabilities                        97,691     16,937

Stockholders' equity (deficit):
      Preferred stock, $.001 par value, 2,000,000 shares
        authorized, no shares issued or outstanding                   --         --
      Common stock, $.001 par value, 48,000,000 shares
        authorized, 5,351,028 shares issued and outstanding          5,352       --
      Additional paid-in capital                                   137,050       --
      Deficit                                                     (104,475)      --
      Net deficiency in liquidation, attributed to 351,028
        shares                                                        --       (8,663)
                                                                  --------   --------
                   Total stockholders' equity (deficit)             37,927     (8,663)
                                                                  --------   --------
                                                                  $135,618      8,274
                                                                  ========   ========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-3



                         NUTRICEUTICALS.COM CORPORATION

                        CONSOLIDATED STATEMENT OF INCOME

            FOR THE PERIOD FROM SEPTEMBER 8, 1998 (DATE OF INCEPTION)
                                TO MARCH 31, 1999


Net revenues                                                  $    37,118

Cost of revenues                                                   14,496
                                                              -----------
                   Gross profit                                    22,622

Selling, general and administrative expenses                      128,858
                                                              -----------
                   Operating loss                                (106,236)

Other income:
      Interest income                                               1,761
                                                              -----------
                   Net loss                                   $  (104,475)
                                                              ===========
Basic and diluted net loss per share of common stock                 (.02)

Weighted common shares outstanding                              4,617,695
                                                              ===========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-4

                         NUTRICEUTICALS.COM, CORPORATION

             STATEMENTS OF CHANGES IN NET DEFICIENCY IN LIQUIDATION

             FOR THE PERIOD FROM APRIL 1, 1998 TO SEPTEMBER 7, 1998
                        AND THE YEAR ENDED MARCH 31, 1998


                                                                APRIL 1, 1998
                                                                      TO           MARCH 31,
                                                              SEPTEMBER 7, 1998      1998
                                                              -----------------   ---------
                                                                            
Increase in net assets in liquidation:
    Sales                                                        $    --             3,918
    Bad debt recovery                                                 --             3,101
                                                                 ---------        --------
Decreases in net assets in liquidation:
    Cost of goods sold                                                --           (16,760)
    Professional fees                                               (3,875)        (13,012)
    Occupancy                                                         --            (6,432)
    Office expense                                                     (60)         (1,283)
    Other                                                             --            (6,112)
                                                                 ---------        --------
    Decrease in net assets in
      liquidation before adjustments                                (3,935)        (36,580)

Adjustments of estimated values                                       --            32,215
                                                                 ---------        --------
    Decrease in net assets in liquidation                           (3,935)         (4,365)

Beginning net liabilities in liquidation                            (8,663)         (4,298)
                                                                 ---------        --------
Ending net liabilities in liquidation                            $ (12,598)         (8,663)
                                                                 =========        ========
Loss per share:
    Loss attributable to common stockholders                     $  (3,935)         (4,365)

    Net loss per common share (basic and diluted)                     (.01)           (.01)
                                                                 =========        ========
    Weighted common shares outstanding (basic and diluted)         351,028         351,028
                                                                 =========        ========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-5

                         NUTRICEUTICALS.COM, CORPORATION

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

              FOR THE YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1999


                                                          ADDITIONAL          RETAINED              NET               TOTAL
                                          COMMON           PAID-IN            EARNINGS           DEFICIENCY        STOCKHOLDERS'
                                           STOCK           CAPITAL            (DEFICIT)        IN LIQUIDATION     EQUITY (DEFICIT)
                                          -------          -------            ---------        ---------------    ---------------
                                                                                                   
Balances at March 31, 1997,
 on the liquidation basis
 of accounting                              $ --                --                 --              (4,298)            (4,298)

Loss attributable to common
 stockholders                                 --                --                 --              (4,365)            (4,365)
                                            ------          --------           --------           -------           --------
Balances at March 31, 1998,
 on the liquidation basis of
 accounting                                   --                --                 --              (8,663)            (8,663)

Loss attributable to common
 stockholders prior to merger                 --                --                 --              (3,935)            (3,935)

Recapitalization at date of merger             352           (12,950)              --              12,598               --

September 24, 1998, initial
 capital contribution, 4,000,000
 shares at $.075 per share                   4,000            26,000               --                --               30,000

October 30, 1998 sale of 800,000
 shares of  common stock at $.125
 per share                                     800            99,200               --                --              100,000

Issuance of 200,000 shares at
 $.125 per share for acquisition               200            24,800               --                --               25,000

Net loss                                      --                --             (104,475)             --             (104,475)
                                            ------          --------           --------           -------           --------
Balances at March 31, 1999                  $5,352           137,050           (104,475)             --               37,927
                                            ======          ========           ========           =======           ========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-6



                         NUTRICEUTICALS.COM CORPORATION

                             STATEMENT OF CASH FLOWS

            FOR THE PERIOD FROM SEPTEMBER 8, 1998 (DATE OF INCEPTION)
                                TO MARCH 31, 1999


                                                                                               
Cash flows from operating activities:
    Net loss                                                                                       $ (104,475)
    Adjustment to reconcile net loss to net cash used by
      operating activities:
        Amortization expense                                                                            2,500
        Change in operating assets and liabilities:
        Accounts receivable, net                                                                       (9,278)
        Due from related party                                                                         (5,171)
        Inventory                                                                                     (16,303)
        Deposits                                                                                         (380)
        Accounts payable                                                                               69,311
        Accrued expenses                                                                                1,068
                                                                                                    ---------
                   Net cash used by operating activities                                              (62,728)

Cash flows from investing activities:
    Purchase of computer software                                                                     (15,000)
                                                                                                    ---------
                   Net cash used in investing activities                                              (15,000)

Cash flows from financing activities:
    Initial capital contributions                                                                      30,000
    Sale of common stock                                                                              100,000
                                                                                                    ---------
                   Net cash provided by financing activities                                          130,000

Net increase in cash                                                                                   52,272

Cash at beginning of period                                                                             4,714

Cash at end of year                                                                                  $ 56,986
                                                                                                     ========

Supplemental disclosure of non-cash financing activity:

In exchange for 200,000 shares of its common stock at $.125 per share and
$10,000 cash (in accounts payable), the Company acquired all of the common stock
of HealthSeek.com, Inc. on March 31, 1999.

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-7

                         NUTRICEUTICALS.COM CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             MARCH 31, 1999 AND 1998


(1)      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      ORGANIZATION AND MERGER

                  NuMed Surgical, Inc. (NuMed) was engaged in the research,
                  development and distribution of medical instruments and
                  surgical supplies to the health care market since February
                  1991. Effective March 31, 1997, NuMed adopted a plan of
                  liquidation in which it sold its major product line and
                  subsequently disposed of all its operating assets by March 31,
                  1998.

                  Effective March 1999, NuMed acquired all of the outstanding
                  common stock of Nutriceuticals.com, Corporation
                  (Nutriceuticals), which was organized in the State of Florida
                  on September 8, 1998 (date of inception). Nutriceuticals is
                  engaged in the retailing of nutritional supplements via the
                  Internet. For accounting purposes, the acquisition has been
                  treated as an acquisition of NuMed by Nutriceuticals and as a
                  recapitalization of Nutriceuticals. Additionally,
                  Nutriceuticals was merged into NuMed and NuMed changed its
                  name to Nutriceuticals.com, Corporation (the Company).

                  As a result of the merger, each issued and outstanding share
                  of Nutriceutical's common stock was converted into one share
                  of NuMed's common stock (on a one-for-fifty post-reverse stock
                  split basis). The results of operations of the consolidated
                  companies are reflected as if the above transaction took place
                  at September 8, 1998 (date of inception). Consequently, for
                  comparative purposes, the consolidated financial statements
                  have been presented as if the Company were a single entity for
                  all periods presented and all significant intercompany
                  accounts and transactions have been eliminated in
                  consolidation.

         (b)      ACQUISITION

                  Effective March 31, 1999, the Company acquired HealthSeek.com
                  Corp. (HealthSeek), a Massachusetts corporation. HealthSeek is
                  a health care community website providing information to
                  health care professionals and consumers. The acquisition was
                  accounted for using the purchase method of accounting. The
                  Company acquired all of the common stock of HealthSeek, in
                  exchange for 200,000 (post two-for-one split) shares of voting
                  common stock and $10,000 cash. In consideration of the sale
                  and transfer of the shares, the Company acquired the
                  registered domain name HealthSeek and all assets, copyrights
                  and other documentation relating to the website and assumed
                  all costs and expenses related to the ongoing maintenance of
                  the website. HealthSeek did not have significant historical
                  book assets, liabilities or revenues and expenses during its
                  limited operating history. The purchase price was allocated to
                  HealthSeek's only asset, it's website. HealthSeek is a
                  wholly-owned subsidiary of the Company.

                                      F-8

                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

         (c)      DESCRIPTION OF BUSINESS

                  The Company and its wholly-owned subsidiary, Healthseek,
                  consists of two distinct linked websites providing web-based
                  health care communications and related information to
                  consumers, including retailing low-priced nutritional
                  supplements via the Internet (e- commerce).

         (d)      COMPARABILITY OF FINANCIAL INFORMATION

                  The significant accounting policies of the Company conform
                  with generally accepted accounting principles and reflect
                  practices appropriate to the businesses in which it operates.
                  On March 31, 1997, the Company adopted a plan of liquidation
                  in which it sold its major product line and subsequently
                  disposed of all its operating assets. The Company accounted
                  for the liquidation using the liquidation basis of accounting.
                  Thus, the post liquidation basis financial statements as of
                  and for the year ended March 31, 1998, and for the period from
                  April 1, 1998 to September 7, 1998, are not comparable to the
                  consolidated financial statements as of March 31, 1999, and
                  for the period from September 8, 1998 (date of inception) to
                  March 31, 1999.

         (e)      PRINCIPLES OF CONSOLIDATION

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

         (f)      CASH AND CASH EQUIVALENTS

                  The Company considers all highly liquid investments purchased
                  with an original maturity of three months or less to be cash
                  equivalents.

         (g)      RISKS AND UNCERTAINTIES

                  (1)      Concentration of Credit Risk

                           Financial instruments, which potentially subject the
                           Company to significant concentrations of credit risk,
                           consist principally of cash and cash equivalents.
                           Substantially all of the Company's cash and cash
                           equivalents are vested in short-term money market
                           accounts, which bear minimal risk, and are available
                           on demand. The carrying amounts reported in the
                           balance sheets for cash and cash equivalents
                           approximate their fair values due to the short-term
                           nature of

                                      F-9

                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                  (2)      Business Risk

                           The markets for the products and services offered on
                           HealthSeek.com and Nutriceuticals.com are intensely
                           competitive. The Company competes with both
                           traditional distribution channels and online
                           services. The Company may potentially face
                           competition from a number of other online services
                           that have expertise in developing online commerce and
                           in facilitating Internet traffic.

                  (3)      Significant Customers

                           The Company is entirely dependent upon the
                           manufacturers and distributors that supply natural
                           products for resale. Currently, sales and purchases
                           of natural products provided by Innovative Health
                           Products, Inc., a related party, account for a
                           substantial portion of the Company's revenues and
                           inventory.

         (h)      INCOME TAXES

                  The Company has adopted Statement of Financial Accounting
                  Standards (SFAS) No. 109, "Accounting for Income Taxes." Under
                  the asset and liability method of SFAS No. 109, deferred tax
                  assets and liabilities are recognized for the future tax
                  consequences attributable to differences between the financial
                  statement carrying amounts of existing assets and liabilities
                  and their respective tax bases. Deferred tax assets and
                  liabilities are measured using enacted tax rates expected to
                  apply to taxable income in the years in which those temporary
                  differences are expected to be recovered or settled. Valuation
                  allowances are established when necessary to reduce deferred
                  tax assets to amounts expected to be realized.

         (i)      ESTIMATES

                  The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect the amounts
                  reported in the financial statements and the accompanying
                  notes. Actual results could differ from those estimates.



         (j)      PRODUCT DEVELOPMENT COSTS

                  Product development costs that consist primarily of website
                  development and maintenance services are expensed as incurred.

                                      F-10

                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

         (k)      ADVERTISING COSTS

                  Advertising costs are charged to expense in the period the
                  costs are incurred. Advertising expense was $54,402 for the
                  period from September 8, 1998 (date of inception) to March 31,
                  1999, and $-0- for the period from April 1, 1998 to September
                  7, 1998 and the year ended March 31, 1998.

         (l)      REVENUE RECOGNITION

                  The Company recognizes revenue when goods or services are
                  provided.

         (m)      INVENTORIES

                  Inventories are stated at the lower of cost or market. Cost is
                  determined using the first-in, first-out (FIFO) method.

         (n)      ACCOUNTS RECEIVABLE

                  Accounts receivable are due primarily from individuals through
                  credit card sales via e- commerce and from companies and
                  individuals concentrated in the state of Florida via
                  traditional distribution channels.

         (o)      COMPUTER SOFTWARE

                  In March 1998, the American Institute of Certified Public
                  Accountants issued Statement of Position (SOP) 98-1,
                  ACCOUNTING FOR COSTS OF COMPUTER SOFTWARE DEVELOPED OR
                  OBTAINED FOR INTERNAL USE, This SOP is effective for fiscal
                  years beginning after December 15, 1998 and requires
                  capitalization of certain costs of computer software developed
                  or obtained for internal use.

                  Computer software are stated at cost less accumulated
                  amortization. Amortization is recorded using the straight-line
                  method over an estimated useful life of three years.

         (p)      NET LOSS PER SHARE

                  In 1997, the Financial Accounting Standards Board issued SFAS
                  No. 128, EARNINGS PER SHARE, and, in February 1998, the
                  Securities and Exchange Commission issued Staff Accounting
                  Bulletin No. 98 related to SFAS 128. SFAS 128 replaced the
                  calculation for primary and fully diluted earnings per share
                  with basic and diluted earnings per share. Unlike primary
                  earnings per share, basic earnings per share excludes any
                  dilutive effects of options, warrants and convertible
                  securities. Diluted earnings per share is similar to the
                  previously reported fully diluted earnings per share. The
                  Company has no common stock equivalents at March 31, 1999 and
                  1998, resulting in diluted earnings per share.

                                      F-11

                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

         (q)      RECENT ACCOUNTING PRONOUNCEMENTS

                  (1)      Comprehensive Income

                           Effective April 1, 1998, the Company adopted SFAS No.
                           130, REPORTING COMPREHENSIVE INCOME. Under SFAS 130
                           changes in net assets of an entity resulting from
                           transactions and other events and circumstances from
                           non-owner sources are reported in the financial
                           statements for the period in which they are
                           recognized. Because there were no such changes,
                           adoption of SFAS 130 did not impact the consolidated
                           financial statements of the Company.

                  (2)      Segment Reporting

                           Effective April 1, 1998, the Company adopted SFAS No.
                           131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND
                           RELATED INFORMATION. The Company operates as a single
                           segment and will evaluate additional segment
                           disclosure requirements as it expands its operations.

                  (3)      Derivative Instruments and Hedging Activities

                           In June 1998, SFAS No. 133, ACCOUNTING FOR DERIVATIVE
                           INSTRUMENTS AND HEDGING ACTIVITIES was released. The
                           statement requires the recognition of all derivatives
                           as either assets or liabilities in the balance sheet
                           and the measurement of those instruments at fair
                           value. The accounting for changes in the fair value
                           of a derivative depends on the planned use of the
                           derivative and the resulting designation. The Company
                           is required to implement the statement in the first
                           quarter of fiscal 2000. The Company has not used
                           derivative instruments and believes the impact of
                           adoption of this statement will not have a
                           significant effect on the consolidated financial
                           statements.

                  (4)      Long-Lived Assets

                           The Company has adopted SFAS No. 121, ACCOUNTING FOR
                           THE IMPAIRMENT OF LONG- LIVED ASSETS AND FOR
                           LONG-LIVED ASSETS TO BE DISPOSED OF. SFAS No. 121
                           requires that long-lived assets and certain
                           identifiable intangibles held and used by an entity
                           be reviewed for impairment whenever events or changes
                           in circumstances indicate that the carrying amount of
                           an asset may not be recoverable. If the sum of the
                           expected future cash flows (undiscounted and without
                           interest) is less than the carrying amount of the
                           asset, an impairment loss is recognized. Measurement
                           of that loss would be based on the fair value of the
                           asset. SFAS 121 also generally requires long-lived
                           assets and certain identifiable intangibles to be
                           disposed of to be reported at the lower of the
                           carrying amount or the fair value less cost to sell.

                                      F-12

                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2)      INVENTORIES

         Inventories at March 31, 1999 and 1998 consist of the following:

                                                   1999             1998
                                                 ---------        --------

           Nutritional supplements               $ 16,303               --
                                                 ========         ========

(3)        COMPUTER SOFTWARE

           Computer software consists of the following at March 31, 1999 and
           1998:
                                                       1999           1998
                                                    ---------      ----------

           HealthSeek.com website domain             $ 35,000              --
           Nutriceuticals.com website domain           15,000              --
                                                      -------       ---------
                                                       50,000              --
           Less accumulated amortization               (2,500)             --
                                                      -------       ---------
           Net computer software                     $ 47,500              --
                                                      =======       =========

           Amortization related to computer software totaled approximately
           $2,500 for the period from September 8, 1998 (date of inception) to
           March 31, 1999, and $0 for the period from April 1, 1998 to September
           7, 1998, and the year ended March 31, 1998.

(4)        RELATED PARTY TRANSACTIONS

           The Company's principal administrative, marketing and customer
           service facilities are currently provided without charge by
           Innovative Health Products, Inc., a related party.

           Innovative Health Products, Inc. is the Company's principal supplier
           of natural products and has common significant shareholder's of the
           Company.

           Amounts due to related party represent amounts due to Innovative
           Health Products, Inc. for the purchase of inventory.

(5)        INCOME TAXES

           The Company had no income tax expense for the periods from April 1,
           1998 to September 7, 1998, and from September 8, 1998 (date of
           inception) to March 31, 1999, or the year ended March 31, 1998.

           Deferred income taxes reflect the net tax effects of temporary
           differences between the carrying amounts of assets and liabilities
           for financial reporting purposes and the amounts used for income tax
           purposes. The Company had no such differences at March 31, 1999 and
           1998.
                                      F-13


                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

           As of March 31, 1999, the Company has approximately $41,000 of
           federal and $6,000 of state net operating loss carryforwards (NOL) to
           offset future income through 2014.

                                                             MARCH 31, 1999

                    Net operating losses, federal               $ 41,000
                    Net operating losses, state                    6,000
                                                                --------
                                                                  47,000
                    Valuation allowance                          (47,000)
                                                               ---------
                    Net operating loss carryforward            $      --
                                                               =========

           FASB 109 requires a valuation allowance to reduce the deferred tax
           assets reported, if based on the weight of the evidence, it is more
           likely than not that some portion or all of the deferred tax assets
           will not be realized. As such, a $47,000 valuation allowance has been
           established at March 31, 1999.

(6)        STOCKHOLDERS' EQUITY

           As discussed in note 1, the merger between NuMed and Nutriceuticals
           has been accounted for as a reverse acquisition/ recapitalization
           and, as a result, for comparative purposes, the consolidated
           financial statements, including equity transactions, have been
           presented as if the Company were a single entity for all periods
           presented.

           On January 15, 1999, the Board of Directors approved a one-to-fifty
           reverse stock split of the outstanding shares of NuMed Common Stock.
           The reverse stock split reduced the number of outstanding shares of
           NuMed Common Stock, but did not reduce the total number of shares
           authorized. Prior to the reverse stock split, approximately 8,775,685
           shares of NuMed Common Stock were issued and outstanding. Following
           the reverse stock split, 175,514 shares of NuMed common stock
           remained outstanding and, pursuant to the merger agreement,
           shareholders of Nutriceuticals received, in exchange for each issued
           and outstanding share of Nutriceuticals Common Stock, one share of
           NuMed Common Stock, on a post reverse stock split basis. The post
           reverse split shares issued and outstanding to the shareholders of
           the Nutriceuticals were 2,400,000. Shareholders' equity has been
           restated to give retroactive recognition to the stock split in prior
           periods. Total number of shares of Common Stock issued and
           outstanding following the reverse split was 2,575,514 (prior to the
           two-for-one stock split (see Note 9a)).

(7)        CONSULTING AGREEMENT

           On March 31, 1999, the Company acquired Healthseek, and, as a result
           of the acquisition, entered into a consulting agreement with the
           seller to maintain and operate the website. The consultant shall
           devote six hours per week to provide such services, including
           implementation of the matters as

                                      F-14

                         NUTRICEUTICALS.COM CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

           described in the agreement. Annual compensation to be paid by the
           Company as a result of the agreement is $40,000, payable monthly,
           with the first payment due May 1, 1999. The term of the agreement is
           for one year, expiring on March 31, 2000.

(8)        SUBSEQUENT EVENTS

           (a)      STOCK SPLIT

                    On April 14, 1999, the Company's Board of Directors
                    authorized a two-for-one stock split effected in the form of
                    a stock dividend distributed to shareholders of record on
                    April 26, 1999. As a result of the split, 2,675,514
                    additional shares were issued. All share and per share data
                    appearing in the consolidated financial statements and notes
                    thereto have been retroactively adjusted for the stock
                    split.

           (b)      STRATEGIC ALLIANCE

                    During the second quarter of 1999, the Company entered into
                    a strategic alliance with IndigoCity.com, Inc. (Indigo
                    City), a Florida corporation. Indigo City will provide
                    advertising, developmental and technical services on its
                    website on behalf of the Company. The parties agree to
                    equally share gross margin revenues as a result of the
                    strategic alliance. The Company will incur expenses of $150
                    per month for cross promotional products and services on
                    Indigo City's website.

           (c)      SECONDARY OFFERING

                    During fiscal year 2000, the Company intends to complete a
                    secondary stock offering in which approximately 1,000,000
                    shares of common stock are expected to be issued. The
                    proceeds will be used to fund working capital and marketing
                    expenses.

(9)        YEAR 2000 ISSUE (UNAUDITED)

           The Company does not expect the Year 2000 Issue to have a significant
           effect on operations. Management of the Company does not expect major
           vendors or customers to be unable to sell to, provide services to, or
           purchase from the Company because of the Year 2000 Issue.

                                      F-15

                                  EXHIBIT INDEX

EXHIBIT NO.           DESCRIPTION OF EXHIBITS

     3.3      Articles of Incorporation of Nutriceuticals.com Corporation, filed
              September 8, 1998.

     10.5     Proposed Nutriceuticals.com Corporation 1999 Incentive and
              Non-Statutory Stock Option Plan.

     27.1     Financial Data Schedule (for SEC use only).

EX-3.3

                                                                     EXHIBIT 3.3

                          FLORIDA DEPARTMENT OF STATE
                               Sandra B. Mortham
                               Secretary of State

September 8, 1998

CAPITAL CONNECTION, INC.
417 E. VIRGINIA ST.
STE. 1
TALLAHASSEE, FL 32301

The Articles of Incorporation for NUTRICEUTICALS.COM CORPORATION were filed on
September 8, 1998 and assigned document number P98000077370. Please refer to
this number whenever corresponding with this office regarding the above
corporation.

PLEASE NOTE: COMPLIANCE WITH THE FOLLOWING PROCEDURES IS ESSENTIAL TO
MAINTAINING YOUR CORPORATE STATUS. FAILURE TO DO SO MAY RESULT IN DISSOLUTION OF
YOUR CORPORATION.

A CORPORATION ANNUAL REPORT MUST BE FILED WITH THIS OFFICE BETWEEN JANUARY 1 AND
MAY 1 OF EACH YEAR BEGINNING WITH THE CALENDAR YEAR FOLLOWING THE YEAR OF THE
FILING DATE NOTED ABOVE AND EACH YEAR THEREAFTER. FAILURE TO FILE THE ANNUAL
REPORT ON TIME MAY RESULT IN ADMINISTRATIVE DISSOLUTION OF YOUR CORPORATION.

A FEDERAL EMPLOYER IDENTIFICATION (FEI) NUMBER MUST BE SHOWN ON THE ANNUAL
REPORT FORM PRIOR TO ITS FILING WITH THIS OFFICE. CONTACT THE INTERNAL REVENUE
SERVICE TO INSURE THAT YOU RECEIVE THE FEI NUMBER IN TIME TO FILE THE ANNUAL
REPORT. TO OBTAIN A FEI NUMBER, CONTACT THE IRS AT 1-800-829-3676 AND REQUEST
FORM SS-4.

SHOULD YOUR CORPORATE MAILING ADDRESS CHANGE, YOU MUST NOTIFY THIS OFFICE IN
WRITING, TO INSURE IMPORTANT MAILINGS SUCH AS THE ANNUAL REPORT NOTICES REACH
YOU.

Should you have any questions regarding corporations, please contact this office
at the address given below.

Randall Purintun, Document Specialist
New Filing Section                                  Letter Number: 498A000045611

     Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314



                           ARTICLES OF INCORPORATION
                                       OF
                         NUTRICEUTICALS.COM CORPORATION

                     ARTICLE I - NAME AND PRINCIPAL ADDRESS

     The name of the corporation is Nutriceuticals.Com Corporation and the
principal address and principal place of business is 6950 Bryan Dairy Road,
Largo, Florida, 33777.

                    ARTICLE II - REGISTERED OFFICE AND AGENT

     The address of its registered office in the State of Florida is c/o PATEL,
MOORE & O'CONNOR, P.A., 2240 Belleair Road, Suite 160, in the City of
Clearwater, County of Pinellas, Florida 33764. The name of its registered agent
at such address is Sandip I. Patel.

                              ARTICLE III - PURPOSE

     The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Florida.

                    ARTICLE IV - AUTHORIZED SHARES OF STOCK

     The total number of shares of stock which the corporation is authorized to
issue is Ten Million (10,000,000) with One Million (1,000,000) shares as blank
check preferred shares at no par value and Nine Million (9,000,000) shares of
common stock at no par value.

                         ARTICLE V - BOARD OF DIRECTORS

     The business and affairs of the corporation shall be managed by the board
of directors, and the directors need not be elected by ballot unless required by
the bylaws of the corporation. The names and mailing addresses of each person
who is to initially serve as a director until the first annual meeting of the
stockholders or until a successor is elected and qualified, are as follows:

     NAME                     MAILING ADDRESS
     ----                     ---------------

Mandeep K. Taneja             6950 Bryan Dairy Road, Largo, Florida, 33777.

     In furtherance and not in limitation of the powers conferred by the laws of
the State of Florida, the board of directors is expressly authorized to adopt,
amend or repeal the bylaws of this corporation.



                            ARTICLE VI - AMENDMENTS

     The corporation reserves the right to amend and repeal any provision
contained in this Certificate of Incorporation in the manner prescribed by the
laws of the State of Florida. All rights conferred are granted subject to this
reservation.

                           ARTICLE VII - INCORPORATOR

     The incorporator is Sandip I. Patel, Whose mailing address is c/o PATEL,
MOORE & O'CONNOR, P.A., 2240 Belleair Road, Suite 160, Clearwater, Florida
33764.

     THE UNDERSIGNED, being the incorporator, for the purpose of forming a
corporation under the Laws of the State of Florida, does make, file and record
this Certificate of Incorporation, does certify that the facts herein stated are
true, and, accordingly, have hereto set his hand and seal this 4th day of
September, 1998.

                               By: /s/ SANDIP I. PATEL
                                       ------------------------
                                       Sandip I. Patel, Esquire
                                       Incorporator

                        Acknowledgment of Registered Agent

                                       I hereby am familiar with and accept the
                                       duties and responsibilities as Registered
                                       Agent for said corporation.

                               By: /s/ SANDIP I. PATEL
                                       ------------------------
                                       Sandip I. Patel, Esquire
                                       Registered Agent

EX-10.5

                                                                    EXHIBIT 10.5

                         NUTRICEUTICALS.COM CORPORATION
                        1999 INCENTIVE AND NON-STATUTORY
                                STOCK OPTION PLAN

SECTION 1.          PURPOSE

         This 1999 Incentive and Non-Statutory Stock Option Plan (the "Plan") is
intended as a performance incentive for officers and employees of
Nutriceuticals.com Corporation, a Nevada corporation (the "Company") or its
Subsidiaries (as hereinafter defined) and for certain other individuals
providing services to or acting as directors of the Company or its Subsidiaries,
to enable the persons to whom options are granted (an "Optionee" or "Optionees")
to acquire or increase a proprietary interest in the success of the Company. The
Company intends that this purpose will be effected by the granting of incentive
stock options ("Incentive Options") as defined in Section 422A(b) of the
Internal Revenue Code of 1986, as amended (the "Code") and other stock options
("Non-statutory Options") under the Plan.

SECTION 2.          OPTIONS TO BE GRANTED AND ADMINISTRATION

         2.1 OPTIONS TO THE GRANTED. Options granted under the Plan may be
either Incentive Options or Non-statutory Options.

         2.2 ADMINISTRATION BY THE BOARD. This Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board shall have full and
final authority to operate, manage and administer the Plan on behalf of the
Company. This authority includes, but is not limited to: (i) the power to grant
options conditionally or unconditionally; (ii) the power to prescribe the form
or forms of the instruments evidencing options granted under this Plan; (iii)
the power to interpret the Plan; (iv) the power to provide regulations for the
operation of the incentive features of the Plan, and otherwise to prescribe
regulations for interpretation, management and administration of the Plan; (v)
the power to delegate responsibility for Plan operation, management and
administration on such terms, consistent with the Plan, as the Board may
establish; (vi) the power to delegate to other persons the responsibility for
performing ministerial acts in furtherance of the Plan's purpose; and (vii) the
power to engage the services of persons or organizations in furtherance of the
Plan's purpose, including but not limited to, banks, insurance companies,
brokerage firms and consultants.

         In addition, as to each option, the Board shall have full and final
authority in its discretion: (i) to determine the number of shares subject to
each option; (ii) to determine the time or times at which options will be
granted; (iii) to determine the time or times when each option shall become
exercisable and the duration of the exercise period, which shall not exceed the
limitations specified in Section 5.1.1; and (iv) to determine the option price
for the shares subject to each option, which price shall be subject to the
applicable requirements, if any, of Section 5.1.4 hereof.

         2.3 APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may appoint a
Stock Option Committee (the "Committee") which shall consist of at least three
members of the Board. The Board may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed,
and may fill vacancies, however caused, in the Committee. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. A majority of its members shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of its members. Any action may be taken by a written instrument signed
by all of the



members, and any action so taken shall be as fully effective as if it had been
taken by a vote of a majority of the members at a meeting duly called and held.

         2.4 POWERS OF COMMITTEE. Subject to the provisions of this Plan and the
approval of the Board, the Committee shall have the power to make
recommendations to the Board as to whom options should be granted, the number of
shares to be covered by each option, the time or times of option grants, and the
terms and conditions of each option. In addition, the Committee shall have
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to exercise the administrative and
ministerial powers of the Board with regard to aspects of the Plan other than
the granting of options. The interpretation and construction by the Committee of
any provisions of the Plan or of any option granted hereunder and the exercise
of any power delegated to it hereunder shall be final, unless otherwise
determined by the Board. No member of the Board or the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted hereunder.

SECTION 3.          STOCK

         3.1 SHARES SUBJECT TO PLANS. The stock subject to the options granted
under the Plan shall be shares of the Company's authorized but unissued common
stock, par value $.001 per share ("Common Stock"). The total number of shares
that may be issued pursuant to options granted under the Plan shall not exceed
an aggregate of 300,000 shares of Common Stock.

         3.2 LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding option
under the Plan expires, is canceled or is otherwise terminated (other than by
exercise), the shares of Common Stock allocable to the unexercised portion of
such option shall be restored to the Plan and be available for the grant of
other options under the Plan.

SECTION 4.          ELIGIBILITY

         4.1 ELIGIBLE OPTIONEES. Incentive options may be granted only to
officers and other employees of the Company or its Subsidiaries, including
members of the Board who are also employees of the Company or a Subsidiary.
Non-statutory options may be granted to officers or other employees of the
Company or its Subsidiaries and to certain other individuals providing services
to the Company or its Subsidiaries. Non-employee directors will be granted
options to purchase 3000 shares of the Company's Common Stock upon their initial
election or appointment to the Board.

         4.2 LIMITATIONS ON 10% STOCKHOLDERS. No Incentive Option shall be
granted to an individual who, at the time the Incentive Option is granted, owns
(including ownership attributed pursuant to Section 425(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or Subsidiary of the Company (a "greater-than-10%
stockholder"), unless such Incentive Option provides that (i) the purchase price
per share shall not be less than 110% of the fair market value of the Common
Stock at the time such Incentive Option is granted, and (ii) that such Incentive
Option shall not be exercisable to any extent after the expiration of five years
from the date it is granted.

         4.3 LIMITATION ON EXERCISABLE OPTIONS. The aggregate fair market value
(determined at the time the Incentive Option is granted) of the Common Stock
with respect to which Incentive Options are exercisable for the first time by
any person during any calendar year under the Plan and under any other option
plan of the Company (or a parent or subsidiary as defined in Section 425 of the
Code) shall not exceed


                                       2


$100,000. Any option granted in excess of the foregoing limitation shall be
specifically designated as being a Non-statutory Option.

SECTION 5.          TERMS OF THE OPTION AGREEMENTS

         5.1 MANDATORY TERMS. Each option agreement shall contain such
provisions as the Board or the Committee shall from time to time deem
appropriate, and shall include provisions relating to the method of exercise,
payment of exercise price, adjustments on changes in the Company's
capitalization and the effect of a merger, consolidation, liquidation, sale or
other disposition of or involving the Company. Option agreements need not be
identical, but each option agreement by appropriate language shall include the
substance of all of the following provisions:

                    5.1.1 EXPIRATION. Notwithstanding any other provision of the
Plan or of any option agreement, each option shall expire on the date specified
in the option agreement, which date shall not be later than the tenth
anniversary of the date on which the option was granted (fifth anniversary in
the case of a greater-than-10% stockholder).

                    5.1.2 EXERCISE. Each option shall be deemed exercised when
(i) the Company has received written notice of such exercise in accordance with
the terms of the option, (ii) full payment of the aggregate option price of the
shares of Common Stock as to which the option is exercised has been made, and
(iii) arrangements that are satisfactory to the Board or the Committee in its
sole discretion have been made for the optionee's payment to the Company of the
amount that is necessary for the Company or Subsidiary employing the optionee to
withhold in accordance with applicable Federal or state tax withholding
requirements. Unless further limited by the Board or the Committee in any
option, the option price of any shares of Common Stock purchased shall be paid
in cash, by certified or official bank check, by money order, with shares of
Common Stock or by a combination of the above; provided further, however, that
the Board or the Committee in its sole discretion may accept a personal check in
full or partial payment of any shares of Common Stock. If the exercise price is
paid in whole or in part with shares, the value of the shares surrendered shall
be their fair market value on the date the option is exercised as determined in
accordance with Section 5.1.4 hereof. No optionee shall be deemed to be a holder
of any shares of Common Stock subject to an option unless and until a stock
certificate or certificates for such shares of Common Stock are issued to such
person(s) under the terms of the Plan. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as expressly provided in Section 6
hereof. No optionee shall be deemed to be a holder of any shares of Common Stock
subject to an option unless and until a stock certificate or certificates for
such shares of Common Stock are issued to such person(s) under the terms of the
Plan.

                    5.1.3 EVENTS CAUSING IMMEDIATE EXERCISE. Unless otherwise
provided in any option, each outstanding option shall become immediately fully
exercisable.

                    5.1.3.1 if there occurs any transaction (which shall include
a series of transactions occurring within 60 days or occurring pursuant to a
plan), that has the result that stockholders of the Company immediately before
such transaction cease to own at least 51 percent of the voting stock of the
Company or of any entity that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any other form of
corporate transaction;


                                       3


                             5.1.3.2 if the stockholders of the Company shall
approve a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the approved merger,
consolidation, reorganization, liquidation or dissolution is subsequently
abandoned); or

                             5.1.3.3 if the stockholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).

         The Board or the Committee may in its sole discretion accelerate the
date on which any option may be exercised and may accelerate the vesting of any
shares of Common Stock subject to any option or previously acquired by the
exercise of any option.

                    5.1.4 PURCHASE PRICE. The purchase price per share of the
Common Stock under each Incentive Option shall be not less than the fair market
value of the Common Stock on the date the option is granted (110% of the fair
market value in the case of a greater-than-10% stockholder). The price at which
shares may be purchased pursuant to Non-statutory Options shall be specified by
the Board at the time the option is granted, and may be less than, equal to or
greater than the fair market value of the shares of Common Stock on the date
such Non-statutory Option is granted, but shall not be less than the par value
of shares of Common Stock.

         For the purpose of the Plan, the "fair market value" per share of
Common Stock on any date of reference shall be the Closing Price of the Common
Stock of the Company which is referred to in either clause (i), (ii) or (iii)
below, on the business day immediately preceding such date, or if not referred
to in either clause (i), (ii) or (iii) below, "fair market value" per share of
Common Stock shall be such value as shall be determined by the Board or the
Committee, unless the Board or the Committee in its sole discretion shall
determine otherwise in a fair and uniform manner. For this purpose, the Closing
Price of the Common Stock on any business day shall be (i) if the Common Stock
is listed or admitted for trading on any United States national securities
exchange, or if actual transactions are otherwise reported on a consolidated
transaction reporting system, the last reported sale price of Common Stock on
such exchange or reporting system, as reported in any newspaper of general
circulation, (ii) if the Common Stock is quoted on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), or any similar system
of automated dissemination of quotations of securities prices in common use, the
mean between the closing high bid and low asked quotations for such day of
Common Stock on such system, or (iii) if neither clause (i) or (ii) is
applicable, the mean between the high bid and low asked quotations for the
Common Stock as reported by the National Quotation Bureau, Incorporated if at
least two securities dealers have inserted both bid and asked quotations for
Common Stock on at least five of the ten preceding days.

                    5.1.5 TRANSFERABILITY OF OPTIONS. Incentive options granted
under the Plan and the rights and privileges conferred thereby may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by applicable laws of
descent and distribution, and shall not be subject to execution, attachment or
similar process. Upon any attempt so to transfer, assign, pledge, hypothecate or
otherwise dispose of any Incentive Option under the Plan or any right or
privilege conferred hereby, contrary to the provisions of the Plan, or upon the
sale or levy or any attachment or similar process upon the rights and privileges
conferred hereby, such option shall thereupon terminate and become null and
void. Non-statutory Options shall be transferable to the extent provided in the
option agreements under which they are granted.


                                       4


                    5.1.6 TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE. Except
as may be otherwise expressly provided in the terms and conditions of the option
granted to an Optionee, options granted hereunder shall terminate on the earlier
to occur of:

                              5.1.6.1 the date of expiration thereof; or

                              5.1.6.2 other than the case of death of the
Optionee or disability of the Optionee within the meaning of Section 22(e)(3) of
the Code ("disability"), (A) 90 days after termination of the employment between
the Company and the Optionee in the case of an Incentive Option, and (B) 90 days
after termination of the employment or other relationship between the Company
and the Optionee, unless such termination provision is waived by resolution
adopted by the Board within 30 days of the termination of such relationship, in
the case of a Non-statutory Option.

         Except as may otherwise be expressly provided in the terms and
conditions of the option granted to an Optionee, in the event of the death of an
Optionee while in an employment or other relationship with the Company and
before the date of expiration of such option, such option shall terminate on the
earlier of such date of expiration or 180 days following the date of such death.
After the death of the Optionee, his executors, administrators or any person or
persons to whom his option may be transferred by will or by laws of descent and
distribution, shall have the right, at any time prior to such time termination,
to exercise the option to the extent the Optionee was entitled to exercise such
option immediately prior to his death.

         Except as may otherwise be expressly provided in the terms and
conditions of the option granted to an Optionee, if an Optionee's employment or
other relationship with the Company terminates because of a disability, the
Optionee's option shall terminate on the earlier of the date of expiration
thereof or 180 days following the termination of such relationship; and unless
by its terms it sooner terminates and expires during such 180 day period, the
Optionee may exercise that portion of his or her option which is exercisable at
the time of termination of such relationship.

         An employment relationship between the Company and the Optionee shall
be deemed to exist during any period during which the Optionee is employed by
the Company or by any Subsidiary. Whether authorized leave of absence or absence
on military government service shall constitute termination of the employment
relationship between the Company and the Optionee shall be determined by the
Board at the time thereof.

                    5.1.7 RIGHTS OF OPTIONEES. No Optionee shall be deemed for
any purpose to be the owner of any shares of Common Stock subject to any option
unless and until (i) the option shall have been exercised pursuant to the terms
thereof, (ii) the Company shall have issued and delivered the shares of the
Optionee, and (iii) the Optionee's name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full
voting, dividend and other ownership rights with respect to such shares of
Common Stock.

         5.2 CERTAIN OPTIONAL TERMS. The Board may in its discretion provide,
upon the grant of any option hereunder, that the Company shall have an option to
repurchase all or any number of shares purchased upon exercise of such option.
The repurchase price per share payable by the Company shall be such amount or be
determined by such formula as is fixed by the Board at the time the option for
the shares subject to repurchase was granted. The Board may also provide that
the Company shall have a right of first refusal with respect to the transfer or
proposed transfer of any shares purchased upon exercise of an option granted


                                       5


hereunder. In the event the Board shall grant options subject to the Company's
repurchase rights or rights of first refusal, the certificate or certificates
representing the shares purchased pursuant to such option shall carry a legend
satisfactory to counsel for the Company referring to the Company's repurchase
option.

SECTION 6.          ADJUSTMENT OF SHARES OF COMMON STOCK

         6.1 INCREASE OR DECREASE OF OUTSTANDING SHARES. If at any time while
the Plan is in effect or unexercised options are outstanding, there shall be any
increase or decrease in the number of issued and outstanding shares of Common
Stock through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of
shares of Common Stock, then and in such event (i) appropriate adjustment shall
be made in the maximum number of shares of Common Stock available for grant
under the Plan, so that the same percentage of the Company's issued and
outstanding shares of Common Stock shall continue to be subject to being so
optioned, and (ii) appropriate adjustment shall be made in the number of shares
and the exercise price per share of Common Stock thereof then subject to any
outstanding option, so that the same percentage of the Company's issued and
outstanding shares of Common Stock shall remain subject to purchase at the same
aggregate exercise price.

         6.2 DISCRETIONARY ADJUSTMENT. Subject to the specific terms of any
option, the Board or the Committee may change the terms of options outstanding
under this Plan, with respect to the option price or the number of shares of
Common Stock subject to the options, or both, when, in the sole discretion of
the Board or the Committee, such adjustments become appropriate by reason of a
corporate transaction described in Section 5.1.4 hereof.

         6.3 CONVERSION OF SHARES. Except as otherwise expressly provided
herein, the issuance by the Company of shares of its capital stock of any class,
or securities convertible into shares of capital stock of any class, either in
connection with direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to the number of or
exercise price of shares of Common Stock then subject to outstanding options
granted under the Plan.

         6.4 GENERAL. Without limiting the generality of the foregoing, the
existence of outstanding options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the shares subject to
outstanding options; (iv) the dissolution or liquidation of the Company; (v) any
sale, transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.

SECTION 7.          AMENDMENT OF THE PLAN

         The Board may amend the Plan at any time, and from time to time,
subject to the limitation that no amendment shall be effective unless approved
by the stockholders of the Company in accordance with applicable law and
regulations at an annual or special meeting held within 12 months before or
after the special meeting held within 12 months before or after the date of
adoption of such amendment, in any instance in which such amendment would: (i)
increase the number of shares of Common Stock as to which


                                       6


options may be granted under the Plan; of (ii) change in substance the
provisions of Section IV hereof relating to eligibility to participate in the
Plan.

         Rights and obligations under any option granted before any amendment of
the Plan shall not be altered or impaired by such amendment, except with the
consent of the Optionee.

SECTION 8.          NON-EXCLUSIVITY OF THE PLAN

         Neither the adoption of the Plan by the Board nor the approval of the
Plan by the stockholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including without limitation the granting the stock
options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.

SECTION 9.          GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW

         The obligation of the Company to sell and delivery shares of Common
Stock with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by government
agencies as may be deemed necessary or appropriate by the Board or the
Committee. All shares sold under the Plan shall bear appropriate legends. The
Plan shall be governed by and construed in accordance with the laws of the State
of Florida.

SECTION 10.         EFFECTIVE DATE OF PLAN

         The effective date of the Plan is June 10, 1999, the date on which it
was approved by the Board. No option may be granted under the Plan after the
tenth anniversary of such effective date.




                                       7

EX-27.1

 

<ARTICLE>                     5
<LEGEND>
The schedule contains summary financial information extracted from the financial
statements and is qualified in its entirety by reference to such financial
statements.


                                         
<PERIOD-TYPE>                               YEAR
<FISCAL-YEAR-END>                           MAR-31-1999
<PERIOD-END>                                MAR-31-1999
<CASH>                                      56,986
<SECURITIES>                                0
<RECEIVABLES>                               9,278
<ALLOWANCES>                                0
<INVENTORY>                                 16,303
<CURRENT-ASSETS>                            87,738
<PP&E>                                      50,000
<DEPRECIATION>                              (2,500)
<TOTAL-ASSETS>                              135,618
<CURRENT-LIABILITIES>                       97,691
<BONDS>                                     0
<PREFERRED-MANDATORY>                       0
<PREFERRED>                                 0
<COMMON>                                    5,352
<OTHER-SE>                                  32,575
<TOTAL-LIABILITY-AND-EQUITY>                135,618
<SALES>                                     37,118
<TOTAL-REVENUES>                            37,118
<CGS>                                       14,496
<TOTAL-COSTS>                               14,496
<OTHER-EXPENSES>                            0
<LOSS-PROVISION>                            0
<INTEREST-EXPENSE>                          0
<INCOME-PRETAX>                             (104,475)
<INCOME-TAX>                                0
<INCOME-CONTINUING>                         (104,475)
<DISCONTINUED>                              0
<EXTRAORDINARY>                             0
<CHANGES>                                   0
<NET-INCOME>                                (104,475)
<EPS-BASIC>                               (.02)
<EPS-DILUTED>                               (.02)