1
                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-SB
                                 AMENDMENT NO. 2

      GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS

        UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934

                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)

          FLORIDA                                     65-0452156
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   (State of incorporation)               (I.R.S. Employer Identification No.)

      3750 INVESTMENT LANE, SUITE 5
      WEST PALM BEACH, FLORIDA                                          33407
- --------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

ISSUER'S TELEPHONE NUMBER  (561) 863-8446
- --------------------------------------------------------------------------------

SECURITIES TO BE REGISTERED PURSUANT TO 12(B) OF THE ACT:     NONE
- --------------------------------------------------------------------------------

Securities to be registered pursuant to 12(g) of the ACT:
                                                          ----------------------

                          COMMON STOCK $.001 PAR VALUE
                                (Title of Class)

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                                TABLE OF CONTENTS

                                                                                                    Page No.
                                                                                                    --------
                                                                                                 
PART 1
Description of Business......................................................................           1
Management's Discussion and Analysis.........................................................           7
Description of Property......................................................................           9
Security Ownership of Certain Beneficial Owners and Management...............................           9
Directors, Executive Officers, Promoters and Control Persons.................................           10
Executive Compensation.......................................................................           12
Certain Relationships and Related Transactions...............................................           13
Description of Securities....................................................................           14

PART II
Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters....................................................................           15
Legal Proceedings ...........................................................................           15
Changes in and Disagreements with Accountants................................................           15
Recent Sales of Unregistered Securities......................................................           15
Indemnification of Directors and Officers....................................................           16

PART III
Index to Exhibits............................................................................           18

PART FS
Financial Statements F-1.....................................................................           F-1

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                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

         Health & Nutrition Systems International, Inc. (the "Company," "HNS,"
"we" or "us") markets and sells vitamin, herbal and herbal-mineral formulations
to pharmacies, health food store and mass market retailers.

         We were organized as a Florida corporation on October 25, 1993. Our
fiscal year end is December 31. Our corporate offices are located at 3750
Investment Lane Building #5, West Palm Beach, Fl. 33404. Our phone number is
(561) 863-8446.

         During the course of the last three years of our business operations,
our growth strategy was to establish a nationwide network of distributors. From
1997 to December 1998, we used an outside marketing company to help us establish
this distributor network. We sold our products directly to the marketing
company, which, in turn, would advertise and sell to distributors directly.

         In December 1998 we determined that we could improve our profit margins
and provide better retail support by eliminating the marketing company and sell
directly to retail health food and independent retail pharmacy accounts. In
January 1999 we established an in-house telemarketing operation that, since May
1999, has opened a weekly average of 30-40 new accounts. Since January 1999, we
have increased our independent retail account to over 2,000 accounts at March
31, 2000.

         In addition, we have pursued opportunities with chain drugstores and
health food stores such as GNC, NBTY and El Amal. We also have begun
participating in industry and trade shows to promote and expose our brand of
products.

         We have not spent money on research and development activities during
this time. We have contracted with two manufacturing companies that supply us
with our formulations. These formulations are not proprietary, but research and
development personnel at these manufacturing companies work with our personnel
in developing formulations which meet with our particular specifications. We
provide our key accounts with sample formulations and based on this collective
input determine whether we wish to market a product.

MANUFACTURING

         We contract our manufacturing out to herbal supplement manufacturers.
The manufacturers' research and development personnel, using our specifications,
develop our formulations. Approximately 95% of our manufacturing needs are met
by Garden State Nutritional, a division of

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Vitaquest International Inc. Garden State owns a 200,000 square foot
manufacturing facility in West Caldwell, New Jersey. Our secondary source of
manufacturing is Florida Supplement Corporation, which houses a 10,000 square
foot manufacturing facility located in Hollywood, Florida. We use Florida
Supplement as a backup supplier of product on a per-order basis in the event we
experience a shortfall from Garden State. We do not have term contracts with
these suppliers. The loss of these suppliers would have a material adverse
effect on us.

FACTORING

         We initially entered into a factoring agreement with Nationsbanc
Business Finance Corporation in November 1998. This agreement provided that
Nationsbanc purchases our receivables from time to time at a certain discount.
The term of this agreement was open ended. The factoring agreement has recently
been updated. We recently contracted with NationsBank (now Bank of America) for
one year beginning April 1, 2000 to be our exclusive factor at discount a rate
of 3%. HNS maintains a reserve account with the factor of 15% of the outstanding
receivables held by the factor. The reserve account may be charged additional
fees from 1% to 3% on invoices paid beyond the agreed to terms. We agreed to
factor a minimum of $185,000 per month for 12 months. If we fall below for any
month, we can make up the difference in the following month. However, our
account will be charged 3% of 185,000 or $5,550 per month whether we factor or
not.

         This arrangement will assist us since we do not have to carry the large
dollar invoices to term. By selling our invoices, we get paid 85% of the invoice
as soon as we ship. We only factor large accounts and not telemarketing
accounts.

GENERAL NUTRITION CORPORATION, INC. (GNC)

         We have served as vendor for the dietary supplements retailer, GNC,
since the fourth quarter of 1998. We have no formal written contract with GNC.
GNC is a leading specialty retailer of nutritional supplements and other health
products, with more than 4,000 company-owned and franchised locations worldwide.
Selected HNS products are included in GNC's Plan-o-gram marketing program, a
pre-planned in-store display format. Other of our products are presently
warehoused by GNC and are available to their corporate and franchise stores. In
1999, we derived $751,945 (or 40%) of revenues from our GNC account.

         The Plan-o-gram program guarantees distribution of our products in all
4,000 GNC stores. This program gives our products shelf positions in identical
locations in all GNC stores. Products part of the Plan-o-gram program include
the following:

         ThinTab (90 count bottle)
         Carbcutter (60 count bottle)

         Warehoused items give our products less exposure as they are stored by
the vendors without any prominent shelf locations or guaranteed exposure. Our
warehoused items include the following:

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         ThinTab (30 count bottle)
         ThinTab (90 count bottle)
         Thin Tab Mahuang Free (60 count bottle)
         Carbcutter (60 count bottle)
         ThinTab (3 count pouch)

PHARMACIAS EL AMAL

         Since the third quarter of 1999, El Amal, A 50-store pharmacy chain in
Puerto Rico, has sold our product, Thin Tab, under an agreement which provided
for an initial TV and print campaign paid for by us, but deducted from El Amal's
invoices to us through November 1999 (end of campaign) which totaled
approximately $46,000. This is not a written agreement. Pharmacias El Amal is
the largest pharmacy chain in Puerto Rico. In 1999, we derived $234,696 (or 12%)
of revenues from our Pharmacias El Amal account.

INDEPENDENT RETAIL LOCATIONS

         Our in-house staff of eight telemarketers has opened 2,000 new
independent retail accounts since we began in-house telemarketing in January
1999. We estimate, based on American Business Information (Info USA), that over
100,000 potential retail outlets, including pharmacies, health food stores and
convenience stores exist in the U.S. We are also participating in trade shows
that retail health and pharmacy stores attend. At these shows, we have sold our
products to the stores as well as established contacts to call after the show so
we can follow up with more information on our products. In 1999, we derived
$327,870 (or 17%) of revenues from independent health and pharmacy accounts. We
cannot be confident that we will be able to expand our number of independent
retail accounts in the near future.

         Inasmuch as GNC and El Amal accounted for approximately 52% of our
total sales, the loss of either or both of these accounts would have a material
negative effect on us. We do not have written contracts other than simple
purchase orders with each of these customers.

INDEPENDENT DISTRIBUTORS

         Currently, we have ten active distributors for our products. These
distributors service several accounts which they have set up with our products.
We are no longer focusing on developing relationships with distributors,
although we will continue to work with existing distributors. In 1999, we
derived $291,402 (or 16%) of revenues from these distributors. We expect
revenues from independent distributors will continue to decline as a percentage
of total revenues in coming periods.

PRODUCTS

         We distribute the following products: Thin Tab(R), Thin Tab Mahuang
Free, Ultra Zoom 2000 (TM), Carbcutter(TM), On The Move(TM), Thin Tab Fat
Binding System and Thin Bar(TM). Most

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of our products are trademarked. Thin Tab Ripped Max, Super Carbcutter and Thin
Shake are new products under development.

THIN TAB

         Thin Tab is an herbal supplement tablet formulated as an energy
enhancer to increase stamina, endurance and mental acuity. We market Thin Tab as
being effective in producing positive benefits without the negative side effects
of caffeine. We also believe ThinTab to be effective in weight management, as it
contains ingredients believed to suppress hunger, metabolize fat and optimize
weight control programs.

         THIN TAB MAHUNG FREE is designed to offer the benefits of Thin Tab in
an ephedra -free formula, which some users believe to cause caffeine-like
symptoms such as shakiness or the jitters. We believe the Thin Tab Mahuang Free
formula combines herbs that eliminate this negative side effect.

         ULTRA ZOOM 2000(TM) is made of active Ginsenosides and Vitamin B-12,
and designed to deliver instant energy.

         CARBCUTTER is a carbohydrate inhibitor that is designed to encourage
weight control by inhibiting carbohydrate absorption.

         ON THE MOVE is marketed as a sustained energy, endurance and immune
system booster.

         THIN TAB FAT BINDING SYSTEM is designed to promote weight loss and
healthy cholesterol levels through a reduction in fat absorption.

         THIN BAR is a high protein and high energy meal replacement bar in a
peanut butter/chocolate flavor.

         The following products are under development:

         THIN SHAKE is a meal replacement powder, to be available in chocolate
and vanilla flavors. This shake features high-end phytonutrients, vitamins,
minerals and lipotropics.

         THIN TAB RIPPED MAX is designed to be a maximum strength thermogenic
for energy enhancement and appetite suppression.

         SUPER CARBCUTTER is believed to be a maximum carbohydrate inhibitor.
Also, it is designed to provide for maximum energy support.

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COMPETITION

         The dietary supplement industry is highly competitive. Some of our
competitors have greater resources and name recognition. These competitors
include: Atkins Nutritional, Twinlabs, Metabolife International, Inc. and Rexall
Sundown, Inc.

         We believe that our competitive advantage over these larger competitors
lies with our focus on a limited number of products as well as our ability to
receive rapid feedback about new and existing products from members of our
independent retail health and pharmacy retailers. These retailers represent a
broad cross-section of the population able to give valuable data for us to
interpret and move quickly without a large marketing expense.

         Another advantage is our niche focus on diet energy products. We do not
carry multiple product lines. This focus allows us to concentrate our marketing
efforts on a few items, allowing us to spend more dollars per item than some of
our larger competitors who sell a greater variety of items. This niche approach
allows us to foster a brand awareness of our specialization in diet energy
products.

         Our manufactures sell us particular formulations of product, which,
despite their uniqueness, might be seen as similar to other products made by the
same manufacturers. We strive to differentiate our products chiefly through our
marketing as well as through our mixture of ingredients and their measurement.

         Significant barriers to entry exist within our industry, chief among
them is the difficulty in establishing any new product. This involves a major
capital commitment to advertise, participate in trade shows and build inventory,
which is why we have focused on a limited number of products . Test marketing
also requires a significant commitment of time and capital. Research and
development is not a necessary expense, but it would be advantageous to develop
a patented proprietary product. Many competitors sell a broad range of health
and nutrition products. Our competitors sell to the same retail outlets as we
do. In addition, our suppliers will sell similar products to other marketers,
although they may not represent the same formulations. We as well as other
marketers make the effort to differentiate our particular products and formulas
as well as providing distinctive packaging.

CERTIFICATES OF ANALYSIS

         All of our herbal supplement products have certificates of analysis
supplied by each manufacturer, who generally supply each of their customers with
this documentation. These documents provide clinical test results of product
quality and ingredient accuracies. Most major retailers want to see these
certificates and, frequently, smaller retailers wish to see them as well. It has
been our experience that consumers rarely, if ever, want to see this
documentation.

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GOVERNMENT REGULATION

         Generally, the regulations of the Federal Drug Administration and state
imposed labeling standards require full disclosure of our products' ingredients,
which we abide by. As required by the Dietary Supplements, Health and Education
Act, we cannot make on our labels or advertising materials either precise health
claims that cannot be substantiated or hint that the product is intended to cure
a disease. We comply with this requirement. Additionally, our manufacturers
abide by industry standards for manufacturing and quality control. Each
manufacturer is subject to regulatory oversight of the United States Department
of Health and Human Services, the Department of Public Health Services and the
Food and Drug Administration.

         The FDA oversees safety, manufacturing and product information such as
claims in a product's labeling, package inserts and accompanying literature. The
Federal Trade Commission regulates the advertising of dietary supplements. The
manufacturers review our labeling and will not supply us with the product unless
our labeling satisfies their requirements.

INSURANCE

         We are insured for product liability claims up to an aggregate of
$5,000,000. In addition, each of our herbal supplement vendors has supplied us
with industry-standard proof of insurance.

EMPLOYEES

         We currently have 30 full time employees, five of which are managerial,
ten are engaged in sales, five administrative personnel and ten are assembly
personnel which is essentially a packaging function. We believe our relationship
with our employees is good.

         Our production/assembly personnel package products received from our
manufacturers. Generally, they place the products in plastic or "clamshell,"
packaging to protect the product and afford theft protection to the retailer. We
custom assemble and package our products to each customer's order. Our
production/assembly personnel also fill out shipping documents, UPS forms, FedEx
forms and C.O.D's. We ship approximately 50-100 packages per day. Large orders
are shipped on pallets.

AVAILABILITY OF ADDITIONAL INFORMATION

         This registration statement can be read and copied at the public
reference facilities maintained by the Securities and Exchange Commission at
Room 1024, 450 Fifth Street, NW, Washington D. C. 20549. Information about the
Corporation of the Public Reference Room may be obtained by calling
1-800-SEC-0330. The Registration Statement is also available to the public from
commercial document retrieval services or via EDGAR on the commission's Web site
at www.sec.gov.

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         Prior to the effective date of the registration statement, we were not
subject to the reporting requirements of the Securities Exchange Act of 1934
("Exchange Act") and did not file quarterly and annual reports with the
Commission. These reports can be accessed via EDGAR at the Commission's Web
site, www.sec.gov. In addition, we expect to furnish our shareholders with
annual reports containing audited financial statements and may distribute
quarterly reports containing unaudited summary financial information.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

TWELVE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1998.

         NET SALES: Net sales for the twelve months ended December 31, 1999 were
$1,867,800, an increase of $945,392 or 102%, as compared to net sales of
$922,408 for the twelve months ended December 31, 1998. The increase was due to
restructuring sales and marketing programs from outside marketing and broker
services to in-house sales. Our in-house telemarketing program has generated
$327,870 in sales in the independent health food store and independent pharmacy
market. We have established and maintained sales in health food chain accounts
of $820,845 and pharmacy chain accounts of $234,696. Independent distributors
have purchased $414,402 of products.

         COST OF SALES: Cost of sales for the twelve months ending December 31,
1999 was $729,994 or (39% of net sales, as compared to $462,008 or 51% of net
sales for the twelve months ending December 31, 1998. The decrease is primarily
attributable to our decision to sell directly to stores without the use of
outside marketing companies. By eliminating the outside marketer, we eliminate
that cost of sales, thereby improving our margins without increasing prices paid
by our customers.

         GROSS PROFIT: Gross profit for the twelve months ended December 31,
1999 was $1,137,806 an increase of $677,406 or 147%, as compared to gross profit
of $460,400 for the twelve months ending December 31, 1998. Of this increase,
$43,710 or 6% of the increase was attributable to higher margins resulting from
elimination of use of outside marketing companies. $633,696 or 94% was
attributable to increased sales. As a percent of net sales, gross profit was 61%
for the twelve months ending December 31, 1999, as compared to 50% for the
twelve months ending December 31, 1998.
Each increase is primarily attributable to increased sales and increased profit.

         OPERATING EXPENSES: Operating expenses were $1,112,938 for the twelve
months ending December 31, 1999, representing an increase of $416,098 as
compared to $696,840 for the twelve months ending December 31, 1998. As a
percent of net sales, operating expenses were 59% for the twelve months ending
December 31, 1999 as compared to 76% for the twelve months ending December 31,
1998. Each difference is primarily attributable to increased sales to new
channels of distribution.

         NET PROFIT FROM OPERATIONS: Net profit from operations $27,579 or $.004
per share for the twelve months ending December 31, 1999 as compared to a net
loss of $(254,394) or $(0.04) per

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share for the twelve months ending December 31, 1998. The increase in income
from operations is primarily attributable to increased sales, increased profit
margins and decreased operating expenses.

CARRY FORWARD LOSS

         We have net operating loss carry forwards of approximately $339,774 for
tax purposes to affect future taxable income. The net operating loss carry
forwards expire between 2008 and 2018.

LIQUIDITY & CAPITAL RESOURCES

         At December 31, 1999, the Company had a working capital surplus of
$311,246. Net cash used in operating activities for the year ended December 31,
1999 was $121,578 and resulted primarily from the net income for the year and
payment of trade accounts and accrued expenses. Net cash used in investing
activities was $59,102 for the year ended December 31, 1999. Net cash provided
by financing activities for the year ended December 31, 1999 was $298,121 which
resulted from an equity financing under which we issued 1,363,488 shares of our
common stock, 341,872 of our $.50 warrants and 341,872 of our $2.00 warrants.

         We factor certain of our account receivables with NationsBank.
NationsBank purchases receivables for 97% of the face amount of certain
invoices, and we maintain a reserve account of 15% of the outstanding
receivables held by the factor. The reserve account may be charged additional
fees from 1% to 3% on invoices paid beyond the agreed terms. NationsBank has
extended credit up to $1,000,000 for factoring GNC up from $500,000.

         Health & Nutrition Systems has seen significant increases in accounts
receivable and inventories as our sales have grown. These increases have been
offset partially by increases in accounts payable. During calendar year 1999,
the Company financed its operations and expansion by issuing equity consisting
of units of its common stock and warrants. We believe that sales will continue
to increase in the future, and we will need to issue additional securities to
finance that expansion in the event that revenues are not sufficient to offset
expenses. In addition to this method of financing, negative cash flows from
operations, we plan to develop further our banking relationships and use
short-term and long-term debt financing to support sales growth. At December 31,
1999, Health and Nutrition Systems had cash in bank and current accounts
receivable sufficient for its expected short-term cash requirements for the next
six months.

         Management believes that we need to raise additional capital to expand
our inventory levels, product lines and sales. We intend to fund our expansion
through a variety of means, including factoring major accounts, which
arrangement will provide us revenue of 85% of the invoice at time of shipment
instead of carrying that account receivable for approximately 30-90 days.
Additional capital would be directed to expand current inventory, establishing a
greater profile for the Company, participation in additional trade shows and
perhaps develop as many as two or three new products in diet and energy
categories as well as to explore e-commerce possibilities.

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         In addition, we have negotiated larger credit limits with our
suppliers. For example, formerly our credit limit with Garden State Nutritional,
our primary source of product, was $80,000. Currently, we have over $400,000 in
credit with Garden State Nutritional which is expected to increase as our orders
expand.

         At April 15, 2000 HNS had 341,872 outstanding warrants, which, if all
are exercised, would provide an additional $683,744 in proceeds to HNS. Through
April 6, 2000 $25,363 of warrants (50,727) have been exercised since the end of
the 1999 fiscal year. We also intend to explore other sources of funding on an
"as-needed" basis, including private and public offerings. The primary factors
that would encourage warrant holders to exercise their warrants is if the common
stock of HNS becomes publicly traded and whether the price at which the common
stock trades exceeds the exercise price of the warrants.

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

         Information contained or incorporated by reference in this registration
statement on Form 10-SB and contains "forward-looking statements" which can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," or comparable terminology, or by discussions of
strategy. These forward-looking statements involve certain significant risks and
uncertainties, and actual results may differ materially from the forward-looking
statements. No assurance can be given that future results covered by the
forward-looking statements will be achieved, and other factors could also cause
actual results to vary materially from the future results covered in such
forward- looking statements. The Company does not undertake to publicly update
or revise any of its forward looking statements even if experience or future
change show that the indicated results or events will not be realized.

ITEM 3. DESCRIPTION OF PROPERTY

         Our corporate offices and finished product warehouse is located in a
6,000 square foot facility at 3750 Investment Lane, Building 5, West Palm Beach,
Florida, 33404. This lease expires on December 31, 2002 and provides for lease
payments of approximately $2,010.00 per month. We also have storage facilities
at Building 1A which consists of 4,000 square feet with lease payments of $1,767
and expiring December 31, 2000. All packaging and shipping is performed from
this location.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         This chart shows: (i) the name and number of shares of each officer or
director; (ii) the name and number of shares held by each person known to be the
beneficial owner of more than 5% of our common stock; and (iii) the holdings of
all officers and directors as a group. The address for each person is 3750
Investment Lane Suite 5, West Palm Beach, Florida 33404 unless we indicate

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otherwise. As of March 31, 2000 there were approximately 6,793,894 shares of
common stock issued and outstanding.

                                                          Amount of Beneficial
Name of Beneficial Owner                                   Ownership of Stock               Percentage of Class
- ------------------------                                  --------------------              -------------------
                                                                                             
Tony Musso                                                     1,138,657                           16.8%
Steven Pomerantz                                                 973,657                           14.3%
Christopher Tisi                                                 914,575                           13.5%
Tony D'Amato                                                     799,104                           11.8%
J. C. Herbert Bryant III                                         500,268                            7.4%
Anthony & Renute Dell'aquilla                                    510,000                            7.4%
Napoleon & Tania Paz                                             520,000                            7.5%
All executive officers & directors as a group
  (3 People)                                                   3,026,889                           44.6%

         The holdings of Anthony and Renute Dell'aquilla include warrants to
purchase 100,000 shares of common stock at a purchase price of $2.00 per share,
exercisable until April 5, 2001. Napoleon and Tania Pas hold identical warrants
to purchase 100,000 shares.

         Tony D'Amato's address is 1526 Michigan Avenue, #1, Miami Beach,
Florida. J.C. Herbert Bryant III's address is 517 27 Street, West Palm Beach,
Florida 33407. The Dell'aquilla's address is 15377 Whispering Willow Drive,
Willington, Florida 33414. The Paz' address is 51 Seabreeze Avenue, Delray
Beach, Florida 33483.

         A former consultant and its assigns received options to purchase
700,000 shares in contemplation of services. HNS cancelled 650,000 of the shares
subsequently issued based on its position that the services contracted for were
not rendered nor adequate consideration received for the exercise of the option.

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

         The following table sets forth the names, positions with the company
and ages of the executive officers and directors of the company. Directors will
be elected at the Company's annual meeting of shareholders and serve for one
year or until their successors are elected and qualify. The Board elects
officers and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board.

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Name                         Age               Position
- ----                         ---               --------
                                         
Steven Pomerantz             44                President, Chief Executive Officer,
                                               Treasurer, Director
Christopher Tisi             30                Chief Operating Officer, Secretary, Director
Tony Musso                   50                Chairman of the Board of Directors

         Each director holds office until the next annual meeting of
shareholders and until his successor is elected and qualified. Each officer
holds office until the first meeting of directors following the annual meeting
of shareholders and until his successor is elected and qualified, subject to
earlier removal by our board of directors.

STEVEN POMERANTZ

         Steven Pomerantz has served as President and Chief Executive Officer
since March 1998. From 1995 to March 1998, Mr. Pomerantz served as Vice
President of Finance and Chief Operating Officer. Prior to joining HNS, Mr.
Pomerantz served as President of CSP International, Inc., a manufacturer of
pepper gas, which he co-founded with Mr. Musso in 1985 and sold in December
1994. From 1982 to 1984 Mr. Pomerantz was an account executive with NCR
Corporation. In 1980, Mr. Pomerantz received his MBA from Emory University in
Atlanta, Georgia.

CHRISTOPHER TISI

         Christopher Tisi has served as Chief Operating Officer since December,
1999.  Mr. Tisi has also served as Vice President of Sales and Marketing from
March 1998 to December 1999.  From 1994 to March 1998, Mr. Tisi served as Vice
President of Training. From 1991 to December 1994, Mr. Tisi served as a
Marketing Director at Quorum International, a multi-level marketing company in
Phoenix, Arizona.

TONY MUSSO

         Tony Musso serves as Chairman of the board of directors, a position he
has held since March 1998. From 1993 to March 1998, Mr. Musso served as
President and Chief Executive Officer. Mr. Musso has served as Chairman of the
Board of Nutrition Superstore.com since November 1997. In 1985 Mr. Musso
co-founded CSP Int., Inc. with Mr. Pomerantz and sold the Pepper Spray
Manufacturing Company in December 1994. In 1989 Mr. Musso founded International
Marketing Strategies and served as Executive Director until December 1997. The
company distributed Health & Beauty products for NYSE (NUS) Nu-Skin
International. From 1977 to 1985 Mr. Musso served as V.P. of Sales of S.G.M., a
Halon Fire Extinguisher company. From 1972 to 1976, Mr. Musso served as an
internal auditor for Thomas Jefferson University in Philadelphia, P.A. In 1974,
he received his Law Degree from Delaware Law School and in 1971, he received his
Bachelors of Science from the University of Scranton.

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ITEM 6. EXECUTIVE COMPENSATION

CASH COMPENSATION

         The following table summarizes all compensation recorded by Health &
Nutritional System in the last three fiscal years for the Company's executive
officers serving as such.

Name                                Year      Salary       Bonus           Position
- ----                                ----     --------     ------           --------
                                                              
Steve Pomerantz                     1999     $ 13,356     $1,022          President
                                    1998     $ 41,731       $0            President
                                    1997     $140,673       $0            Vice President

Tony Musso                          1999     $  1,100       $0            Director
                                    1998     $ 10,577       $0            Vice President
                                    1997     $ 52,778       $0            President

OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1999

         No options were granted to any executive officers in 1999.

STOCK OPTION PLAN

         In May 1998 the Company adopted a stock option plan. Currently, no
options are outstanding. The purpose of the stock option plan was to increase
the employees and non-employee directors' proprietary interest in HNS and to
align more closely their interests with the interests of the shareholders of
HNS, as well as to enable HNS to attract and retain the services of experienced
and highly qualified employees and non-employees directors.

         Options granted under this plan may either be options qualifying as
incentive stock options under Section 422 of the Internal revenue Code of 1986,
as amended, or options that do not so qualify. Any incentive option must provide
for an exercise price of not less than 100% of the fair market value of the
underlying shares on the date of such grant, but the exercise price of any
incentive option granted to an eligible employee owning more than 10% of the our
common stock must be at least 110% of such fair market value as determined on
the date of the grant.

         The term of each option and the manner in which it may be exercised is
determined by the board of directors, provided that no option may be exercisable
more that 10 years after the date of its grant and, in the case of an incentive
option granted to an eligible employee owning more that 10% of the our common
stock, no more than five years after the date of the grant. The exercise price
of non-qualified options shall be determined by the board of directors.

                                       12
   15

         We reserved an aggregate of 2,500,000 shares of common stock for
issuance of options under the stock option plan. As of November 1, 1999, options
to purchase an aggregate of 335,000 have been granted, all of which have been
exercised by two former directors, J.C. Herbert Bryant, III and John Tomaselli.
Therefore, options to purchase 2,165,000 remain. The board of directors or a
committee of the board of directors will administer the plan including, without
limitation, the selection of the persons who will be granted plan options under
the plan, the type of plan options to be granted, the number of shares subject
to each plan options and the plan option price.

         The per share exercise price of shares granted under the plan may be
adjusted in the event of certain changes in the total purchase price payable
upon the exercise in full of options granted under the plan. Officers, directors
and key employees of and consultants to HNS will be eligible to receive
non-qualified options under the plan.

         Only officers, directors and employees of HNS who are employed by HNS
or by any subsidiary thereof are eligible to receive incentive options.

EMPLOYMENT AGREEMENTS

STEVEN POMERANTZ

         Effective January 1, 2000, we entered into a two year employment
agreement with Steven A. Pomerantz, Chief Executive Officer, President and
Treasurer. The agreement provides for an annual base salary of $100,000 and is
terminable for cause. The agreement also provides for quarterly bonuses of up to
$10,000, based upon our attainment of quarterly sales revenue benchmarks of
$600,000. Mr. Pomerantz has, in the past, voluntarily accrued certain portions
of his salary owed him by us. To date, all such amounts have been repaid.

CHRISTOPHER TISI

         Effective January 1, 2000, Health & Nutrition Systems International,
Inc. entered into a two year employment agreement with Christopher Tisi, our
Vice President of Sales & Marketing and Secretary. The agreement provides for an
annual base salary of $100,000 and is terminable for cause. The agreement also
provides for quarterly bonuses of up to $10,000, based upon our attainment of
quarterly sales revenue benchmarks of $600,000.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Health & Nutritional Systems International, Inc. has, in the past,
engaged in related party transactions with J.C. Herbert Bryant III, who, served
as Vice President and Secretary between March 18, 1998 and September 13, 1999.
The entity controlled by Mr. Bryant, KMS-Thin Tab 100, Inc., purchased products
from us for resale to its customers on terms no more favorable than those given
to unaffiliated third parties in arms'-length transactions. For the year ended
December 31, 1999, KMS-Thin Tab 100, Inc. made aggregate purchases of herbal
supplements of $136,944 from us. For 1998, purchases totaled $62,766.

                                       13
   16

         Steven Pomerantz and Tony Musso and affiliated companies advanced to
HNS a total of $104,109 during 1998. These advances did not bear interest and no
other consideration was received. As of this date, these advances have been
repaid.

ITEM 8. DESCRIPTION OF SECURITIES

COMMON STOCK

         The Company is authorized to issue 30,000,000 shares of common stock,
par value $.001 per share of which approximately 6,793,894 shares were issued
and outstanding as of December 31, 1999. Holders of the shares are entitled to
one vote per share on each matter submitted to a vote at a meeting of
shareholders. The common stock do not have cumulative voting rights or
preemptive rights and there are no redemption or conversion privileges attached
thereto. Holders of common stock are entitled to receive ratably such dividends
as may be declared by the company and to participate ratably in the distribution
of any assets legally available for distribution with respect to the common
stock. The Company does not expect to pay dividends for the foreseeable future.

FLORIDA ANTI-TAKEOVER STATUTES; INDEMNIFICATION

         Florida has enacted legislation that may deter or frustrate a take-over
of a Florida Corporation. The Florida Control Share Act generally provides that
shares acquired in excess of certain specified thresholds will not possess any
voting rights unless such voting rights are approved by a majority of the
corporation's disinterested shareholders. The Florida Affiliated Transactions
Act generally requires super majority approval by disinterested directors or
shareholders of certain specified transactions between a corporation and holders
of more than 10% of the outstanding voting shares of the corporation (or their
affiliates). The Florida law permits the Company's Articles of Incorporation to
require the Company to indemnify the Company's directors, officers, employees
and agents.

                                       14
   17
                                     PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
        OTHER STOCKHOLDER MATTERS

         As of March 31, 2000, there were 98 shareholders of record of our
common stock. Our common stock is not included for trading on any exchange or
quotation system. There are approximately 6,793,894 shares of common stock
issued and outstanding.

         The Transfer Agent for our common stock is Florida Atlantic Stock
Transfer, Inc. 7130 Nob Hill Road, Tamarac, FL 33321.

         In January 1997, the shareholders approved an amendment to the articles
of incorporation to increase the number of shares of common stock, par value
$0.001 per share. We increased our authorized common stock from 7,500,000 to
30,000,000.

         In January 1997, our board of directors authorized a forward stock
split of 1.771144278607 shares for each share then outstanding, not including
the shares underlying warrants and other shares of common stock which were
issued in connection with an offering of shares in 1995, which were canceled.
The per share information included in the accompanying financial statements and
related notes are restated to reflect this stock split.

DIVIDED POLICY

         We have never paid cash dividends on our common stock. We presently
intend to retain future earnings, if any, to finance the expansion of our
business and we do not anticipate that any cash dividends will be paid in the
foreseeable future. The future dividends policy will depend on our earnings,
capital requirements, expansion plans, financial condition and other relevant
factors.

ITEM 2. LEGAL PROCEEDINGS

         We are not a party to any material legal proceedings.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         Not Applicable

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES

         In October 1995, we sold in a private placement 59,000 shares for a
purchase price of $0.50 per unit, which were ultimately converted into an
aggregate of 59,000 shares of our common stock to 10 persons who were either
accredited or otherwise sophisticated investors with whom we had pre-existing
relationships and access to relevant information concerning us in an offering
exempt

                                       15
   18

from registration under the Securities Act in reliance on Sections 3(b) and Rule
504 of Regulation D of the Securities Act. We received gross proceeds of $29,500
in this transaction. We did not utilize the services of an underwriter and we
paid no commissions or other compensation for sales made in this private
placement.

         In January 1997, we consummated the private sale of an aggregate of
265,000 shares of common stock at a purchase price of $.50 per share to 24
persons who were either accredited or otherwise sophisticated investors. The
securities were exempt from registration under The Securities Act pursuant to
Rule 504 of Regulation D thereunder.

         In May 1998, we completed a private placement to 6 individuals of an
aggregate of 57,550 units, each unit consisting of one share of common stock and
one warrant to purchase one share of common stock at a purchase price of $2.00
per share, expiring May 19, 2000 (the "1998 Offering"). Inasmuch as these
individuals were either accredited or otherwise sophisticated individuals with
whom we had preexisting relationships and had access to relevant information
about us, the issuance of these securities was exempt form the registration
requirements of the Securities Act pursuant to the exemption set forth in
Sections 3(b) and Rule 504 of Regulation D of the Securities Act. We received
gross proceeds of $37,325 and we paid no commissions or other compensation for
sales made in this private placement.

         In March 1999, we consummated the sale to 51 individuals, in a private
placement of units, each consisting of (i) four shares of common stock, (ii) one
warrant to purchase one share of common stock at a purchase price of $.50 per
share ("$.50 Warrants") and (iii) one warrant to purchase one share of common
stock at a purchase price of $2.00 per share. Each of the $.50 Warrants and the
$2.00 Warrants expire in one year from their issuance. We issued an aggregate of
1,363,488 shares of common stock, 341,872 $.50 Warrants and 341,872 $2.00
Warrants, receiving gross proceeds of $374,898. Inasmuch as these investors were
accredited or otherwise sophisticated investors or had a preexisting
relationship with us and access to relevant information concerning us, the
issuance of these securities was exempt, from the registration requirements of
the Securities Act pursuant to the exemption set forth in Sections 3(b) and Rule
504 of Regulation D of the Securities Act.

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS

         The Florida Business Corporation Act permits the indemnification of
directors, employees, officers and agents of Florida corporations. The Company's
Articles of Incorporation and Bylaws provided that the Company shall indemnify
its directors and officers to the fullest extent permitted by the Corporation
Act. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, the Company has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

                                       16
   19
                                    PART F/S

         The following audited financial statements for Health & Nutrition
Systems International, Inc., including the audited balance sheet at December 31,
1998 and 1997 and the related audited statements of operations, changes in
stockholder's equity and cash flows for each of the years ended December 31 1998
and 1997 have been audited by Butner & Kahle CPA's, PA, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.

                                       17
   20
                                    PART III

Exhibits                      Description of Exhibits
- --------                      -----------------------
              
 3.1(a)          Articles of Incorporation of Health & Nutrition Systems International, Inc.*
 3.1(b)          Amended Articles of Incorporation of Health & Nutrition Systems International, Inc.*
 3.1(c)          Amended Articles of Incorporation of Health & Nutrition Systems International, Inc.*
 3.2             By-Laws of Health & Nutrition Systems International, Inc.*
10.1             Employment Agreement between Health & Nutrition Systems International, Inc. and Steven Pomerantz*
10.2             Employment Agreement between Health & Nutrition Systems International, Inc. and Christopher Tisi*
10.3             Agreement with NationsBank Business Finance Corporation
27.1             Financial Data Schedule for 1998
27.2             Financial Data Schedule for 1999

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

* Previously filed.

                                       18
   21
                                   SIGNATURES

         In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Amendment to its Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                               HEALTH & NUTRITION SYSTEMS
                                                   INTERNATIONAL, INC.

Date: May 12, 2000                             By: /s/ Steven Pomerantz
                                                   ----------------------------
                                                   Steven Pomerantz, President
                                                     and Treasurer

                                       19
   22
                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors Report                                              F-2

Balance Sheets                                                           F-3

Statements of Operations                                                 F-4

Statement of Stockholders' Equity                                        F-5

Statements of Cash Flows                                                 F-6

Notes to Financial Statements                                            F-7

                                      F-1
   23
                           INDEPENDENT AUDITORS REPORT

The Board of Directors and Stockholders
Health & Nutrition Systems International, Inc.
West Palm Beach, Florida

We have audited the accompanying balance sheets of Health & Nutrition Systems
International, Inc. as of December 31, 1999 and 1998, and the related statements
of operations, stockholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Health & Nutrition Systems
International, Inc. as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Butner & Kahle CPAs PA
West Palm Beach, Florida
May 1, 2000

                                      F-2
   24
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                                 BALANCE SHEETS
                           December 31, 1999 and 1998

                                                                        1999              1998
                                                                     ---------         ---------
                                                                                 
                            ASSETS
CURRENT ASSETS
Cash and equivalents                                                 $ 154,246         $  36,805
Accounts receivable (net of reserve of $61,336 at                                           1999
and $13,200 at 1998)                                                   235,173            31,287

Inventory                                                              120,326           112,859

Prepaid expenses and other current assets                               66,239             2,066
                                                                     ---------         ---------
Total current assets                                                   575,984           183,017
                                                                     ---------         ---------
FIXED ASSETS
Furniture, fixtures and equipment (net of depreciation
of $65,981 at 1999 and $53,180 at 1998)                                 49,402            16,611
                                                                     ---------         ---------
OTHER ASSETS

Due from related parties                                                 8,146            10,861

Other assets (net of amortization of $1,397 and $691)                   18,337             4,504
                                                                     ---------         ---------
Total other assets                                                      26,483            15,365
                                                                     ---------         ---------
Total Assets                                                         $ 651,869         $ 214,993
                                                                     =========         =========

             LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                                     $ 227,304         $ 113,923

Accrued taxes                                                           10,946             2,380

Due to related parties                                                  19,465           104,109

Capital leases -- current portion                                        6,994             3,892

Other current liabilities                                                   --             9,145
                                                                     ---------         ---------
Total current liabilities                                              264,709           233,449
                                                                     ---------         ---------
Capital leases -- less current portion                                   6,327             4,277
                                                                     ---------         ---------
Total Liabilities                                                      271,036           237,726
                                                                     =========         =========
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, authorized 30,000,000 shares,
7,487,894 shares at 1999 and 6,062,606 shares at 1998
Issued and outstanding                                                   7,488             6,063

Additional paid in capital                                             685,540           312,005

Stock subscription receivable                                             (700)           (1,027)

Accumulated deficit                                                   (311,495)         (339,774)
                                                                     ---------         ---------
Total stockholders' equity  (deficit)                                  380,833           (22,733)
                                                                     ---------         ---------
Total Liabilities and Stockholders' Equity                           $ 651,869         $ 214,993
                                                                     =========         =========

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

                                      F-3
   25
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                            STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 1999 and 1998

                                                                 1999                1998
                                                              -----------         -----------
                                                                            
                        REVENUE
Sales of products                                             $ 1,885,855         $   924,653

  Less:  Returns and allowances                                   (18,055)             (2,245)
                                                              -----------         -----------
Net sales                                                       1,867,800             922,408

                   OPERATING EXPENSES

Cost of sales                                                     729,994             462,008
                                                              -----------         -----------
  Gross profit                                                  1,137,806             460,400
                                                              -----------         -----------
Other operating expenses:

  Selling expenses                                                289,060             180,875

  Office expenses                                                 182,103              70,674

  Outside services                                                104,176              45,678

  Salaries, wages and benefits                                    354,998             307,508

  Professional services                                            49,505              31,599

  Occupancy expenses                                               31,911              30,671

  Bad debts                                                        80,138              18,359

  Depreciation and amortization                                    13,507               7,611

  Other expenses                                                    6,840               3,865
                                                              -----------         -----------
Total expenses                                                  1,112,238             696,840
                                                              -----------         -----------

Profit (loss) before other income (expense) and taxes:             25,568            (236,440)
                                                              -----------         -----------

Other income (expense)                                              2,711             (17,954)

Income tax expense                                                     --                  --
                                                              -----------         -----------

Net profit (loss)                                             $    28,279         $  (254,394)
                                                              ===========         ===========

Net  profit (loss) per share basic                            $     0.004         $   (0.0434)
                                                              ===========         ===========
Net profit (loss) per share assuming dilution                 $     0.004         $   (0.0434)
                                                              ===========         ===========
Weighted average number of shares                               6,775,250           5,848,678
                                                              ===========         ===========
Weighted average number of shares assuming dilution             7,458,994           5,848,678
                                                              ===========         ===========

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

                                      F-4
   26
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                           December 31, 1999 and 1998

                                               Number                    Additional       Stock                          Total
                                              of Shares        Common      Paid in    Subscription    Accumulated    Stockholders'
                                             Outstanding       Stock       Capital      Receivable       Deficit    Equity (Deficit)
                                             -----------       ------    ----------   ------------    -----------   ---------------
                                                                                                     
BALANCES, DECEMBER 31, 1997                    5,634,750       $ 5,635     147,645         (1,087)       (85,380)      $   66,813

Shares issued for cash                            79,000            79      44,821             --             --           44,900
Options exercised for cash                         5,000             5       2,495             --             --            2,500
Shares issued for services                         8,856             9       4,419             --             --            4,428
Officer and director options for
    services exercised                           335,000           335     112,625             --             --          112,960
Collection of subscription receivable                 --            --          --             60             --               60

Net Loss                                              --            --          --             --       (254,394)       (254,394)
                                               ---------       -------     -------         ------       --------       ----------

BALANCES, DECEMBER 31, 1998                    6,062,606         6,063     312,005         (1,027)      (339,774)        (22,733)

Shares issued for cash                         1,425,288         1,425     373,535             --             --         374,960

Collection of subscription receivable                 --            --          --            327             --             327

Net profit                                            --            --          --             --         28,279          28,279
                                               ---------       -------     -------         ------       --------       ----------
BALANCES, DECEMBER 31, 1999                    7,487,894       $ 7,488     685,540           (700)      (311,495)      $  380,833
                                               ==========      =======     =======         ======       ========       ==========

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

                                      F-5
   27

                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 1999 and 1998

                                                                           1999                1998
                                                                         ---------         ---------
                                                                                     
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit (loss)                                                        $  28,279         $(254,394)
Adjustment to reconcile net loss to net cash provided by
  (used in) operating activities:
    Depreciation and amortization                                           13,507             7,611
    Shares issued for services and options for services exercised               62           117,388
    (Increase) decrease in accounts receivable                            (203,886)           72,490
    (Increase) decrease in inventory                                        (7,467)           64,015
    (Increase) decrease in prepaids and other current assets               (64,173)           11,761
    Increase (decrease) in accounts payable                                113,381          (19,279)
    Increase (decrease) in accrued liabilities                                (581)          (59,591)
                                                                         ---------         ---------

      Total adjustments                                                   (149,157)          194,395
                                                                         ---------         ---------
Net cash provided by (used in) operating activities                       (120,878)          (59,999)
                                                                         ---------         ---------
CASH FLOWS FROM INVESTING ACTIVITIES
    Investment in trademarks                                                (1,747)             (866)
    Acquisition of fixed assets                                            (45,592)           (3,005)
    Other assets                                                           (11,763)               --
                                                                         ---------         ---------
Net cash provided (used) by investing activities                           (59,102)           (3,871)
                                                                         ---------         ---------
CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from issuance of common stock                                 374,898            47,460
    Proceeds (repayment) of financing                                        5,152            (9,192)
    Advances from (repayments to) related parties                          (82,629)             (992)
                                                                         ---------         ---------
Net cash provided (used) by financing activities                           297,421            37,276
                                                                         ---------         ---------

Net increase (decrease) in cash and equivalents                            117,441           (26,594)

CASH and equivalents, beginning of period                                   36,805            63,399
                                                                         ---------         ---------
CASH and equivalents, end of period                                      $ 154,246         $  36,805
                                                                         =========         =========

SUPPLEMENTAL DISCLOSURE OF
      CASH FLOW INFORMATION

Non-cash investing and financing activities:
    Shares issued for services and options for services exercised        $      62         $ 117,388
                                                                         =========         =========

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

                                      F-6
   28

                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DESCRIPTION OF BUSINESS--Health & Nutrition Systems International, Inc. ("HNS"
or the "Company") is a marketer and distributor of health and nutrition herbal
supplements. The Company was incorporated in Florida on October 25, 1993. HNS
product sales consist of seven primary dietary supplements: Thin TabR, Carb
CutterTM, This Tab Mahuang Free, On The MoveTM, Thin Tab With Chitosan, Ultra
Zoom 2000TM, Thin BarTM. These products are sold primarily wholesale to health
stores, drug stores, nutrition centers, and other retailers. Additionally, the
products are sold through certain related parties to similar customer types. The
current markets are concentrated in North America and Puerto Rico.
Two manufacturers produce all of the HNS dietary supplements.

USE OF ESTIMATES--The preparation of financial statements in accordance with
generally accepted accounting principles requires the use of management's
estimates. These estimates are subjective in nature and involve judgments that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at fiscal year end and the reported amounts of
revenues and expenses during the year. Actual results could differ from those
estimates.

CASH EQUIVALENTS - The Company considers all highly liquid debt instruments
purchased with maturities of three or fewer months to be cash equivalents. Cash
equivalents consist primarily of investments in money market funds.

INVENTORIES--Inventories are stated at the lower of cost or market with cost
being determined on a first-in, first-out basis.

PROPERTY, EQUIPMENT, LEASEHOLD IMPROVEMENTS, AND DEPRECIATION--Property and
equipment are carried at depreciated cost. Depreciation is provided using the
straight-line or MACRS methods, were not materially different from the
straight-line method, over the estimated economic lives of the assets, which
range from three to seven years. Leasehold improvements are amortized over the
expected lease term. The Company reviews the valuation of fixed assets and their
remaining economic lives annually and adjusts depreciation accordingly.

TRADEMARKS--The Company records the costs of trademarks as intangible assets and
amortizes their value over their estimated economic life.

REVENUE RECOGNITION--Sales revenue is recognized at the date of shipment to
customers. Provision is made for an estimate of product returns and doubtful
accounts and is based on historical experience.

ADVERTISING COSTS--The Company expenses advertising production costs as they are
incurred and advertising communication costs the first time the advertising
event takes place. Advertising expenses for years ending 1999 and 1998 were
$125,592 and $90,549 respectively.

STOCK-BASED COMPENSATION--The Company applies the intrinsic value method in
accounting for its stock options issued to employees. Accordingly, no
compensation expense will be recognized for options granted with an exercise
price equal to market value at the date of grant. Compensation is recorded when
options are exercised when the exercise price is below the market value of the
stock.

                                      F-7
   29
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

INCOME TAXES-- Prior to April 1, 1996, the Company elected S Corporation status
under the applicable sections of the Internal Revenue Code (IRC) and relevant
state income tax regulations, whereby income of the Company was included in the
income tax returns of its shareholders. Accordingly, the financial statements
for the periods prior to that date do not reflect the income tax effects of the
Company's operations. Effective April 1, 1996, the Company elected to be taxed
as a C Corporation under the provision of the IRC.

For the periods subsequent to April 1, 1996, deferred tax assets and liabilities
are recognized for the expected future tax consequences attributable to
differences between the tax bases of assets and liabilities and their financial
reporting amounts at each period end based on enacted tax laws and tax rates in
effect for the periods in which the differences are expected to reverse.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized.

EARNINGS (LOSS) PER COMMON SHARE--Basic earnings (loss) per share is based on
the weighted effect of all common shares issued and outstanding, and is
calculated by dividing net income (loss) by the weighted average shares
outstanding during the period. Diluted earnings per share is calculated by
dividing net income by the weighted average number of common shares used in the
basic earnings per share calculation plus the number of common shares that would
be issued assuming conversion of all potentially dilutive common shares
outstanding. The exercise or conversion of securities that would be antidilutive
are not presented. This was the case in 1998. In 1999 the dilutive effect of
warrants, if exercised, would have been less than $0.01 per share.

COMPREHENSIVE INCOME--The Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income," in the year ended
December 31, 1998. The Company did not have any components of comprehensive
income.

SEGMENT INFORMATION--The Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," in the year ended December
31, 1998. SFAS No. 131 supersedes SFAS No. 14, "Financial Reporting for Segments
of a Business Enterprise," replacing the "industry segment" approach with the
"management" approach. The management approach designates the internal
organization that is used by management for making operating decisions and
assessing performance as the source of the Company's reportable segments. SFAS
No. 131 also requires disclosures about products and services, geographic areas
and major customers. The adoption of SFAS No. 131 did not affect the Company's
results of operations or financial position.

NOTE 2. INCOME TAXES

Income (loss) before income taxes consisted of the following:

                                                    December 31, 1999          December 31, 1998
                                                    -----------------          -----------------
                                                                             
                                                         $28,279                   $(254,394)

Income tax benefit (provision) consisted of the following:

                                                    December 31, 1999          December 31, 1998
                                                    -----------------          -----------------
                                                                             
    Current income taxes                                 $    --                   $      --
    Deferred income taxes                                     --                          --
    Increase (decrease) in valuation allowance            (6,763)                     47,620

                                      F-8
   30
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2. (CON'T)

Deferred tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities. They
are measured by applying the enacted tax rates and laws in effect for the years
in which such differences are expected to reverse. The significant components of
the Company's deferred tax assets and liabilities are as follows:

                                                    December 31, 1999          December 31, 1998
                                                    -----------------          -----------------
                                                                             
    Deferred tax assets:
         Accounts receivable reserves                     $  9,470                   $     --
         Net operating loss carry-forwards                   9,068                     25,313
         Stock for services                                 22,319                     22,307
                                                          --------                   --------

         Total deferred tax assets                          40,857                     47,620

         Valuation allowance                               (40,857)                   (47,620)
                                                          --------                   --------

    Deferred tax liabilities:                                   --                         --

Total net deferred tax assets                                   --                         --
                                                          ========                   ========

The Company has established a valuation allowance for the deferred tax assets.
This valuation allowance was recorded in accordance with SFAS 109, which
requires that a valuation allowance be established when there is significant
uncertainty as to the realizability of the deferred tax assets. Management
believes that, based on a number of factors, including prior net operating
losses, that there is sufficient uncertainty regarding the realizability of
these deferred tax assets. The deferred tax assets were calculated for both
years using United States federal tax rate of 15% and a Florida tax rate of 5.5%
for an effective tax rate of 19.675%. There were non-deductible permanent
differences for meals and entertainment and penalties of $9,791 and $12,210 for
the years ending December 31, 1999 and 1998 respectively. The net operating loss
carry-forwards of $43,090 remaining at December 31, 1999 expire in 2018.

NOTE 3.  FINANCING ARRANGEMENTS

ACCOUNTS RECEIVABLE FACTORING--The Company factors certain of its accounts
receivable with a commercial finance company subsidiary of a bank. The factor
purchases receivables for 97% of the face amount of certain invoices and the
Company maintains a reserve account with the factor of 15% of the outstanding
receivables held by the factor. The reserve account may be charged additional
fees from 1% to 3% on invoices paid beyond the agreed to terms.

NOTE 4.  RELATED PARTY TRANSACTIONS

The Company has engaged in related party transactions with an individual who, at
the time of the transactions, was an officer of the Company, but has since
resigned. The entity controlled by this individual, KMS-Thin Tab 100, Inc.,
purchased products from the Company for resale to its customers on terms no more
favorable than those given to unaffiliated third parties in arms'-length
transactions. For the years ended December 31, 1999 and 1998, KMS-Thin Tab 100,
Inc. made aggregate purchases of approximately $136,944 and $62,766
respectively. In 1998, there were sales to previously related parties of
approximately $110,000 and a loan to a previous related party of $10,861 since
reduced to $8,146. Additionally, in 1998, as indicated on the balance sheet,
there were advances due to the chairman and president of the Company and
companies owned by them of $104,109. In 1999 these advances were paid down to
$19,465.

                                      F-9
   31
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 5. COMMON STOCK

AUTHORIZED SHARES--The Company has authorized 30,000,000 shares of common stock,
par value $0.001 per share.

STOCK OFFERINGS IN PRIVATE PLACEMENTS --- The Company has engaged in several
private placements of common stock. In 1998, the Company offered 700,000 shares
of common stock and 700,000 warrants to purchase one common share at $2.00 for a
combined price of $1.10 per share and warrant. This offering was amended in
March, 1999 when the Company offered four shares of common stock and two
warrants to purchase one share each, one at $0.50 and one at $2.00. In this
offering the Company received proceeds net of expenses of $374,898 and issued
1,363,488 shares of common stock and 683,744 warrants.

STOCK AND OPTIONS ISSUED FOR SERVICES --- The Company authorized the 1998 Stock
Option Plan of the Corporation in May, 1998. The plan set aside a reserve of
2,500,000 shares of common stock for this purpose. At this time, the board of
directors granted 335,000 to two board members to purchase shares at $0.001 per
share. The options were exercised and restricted shares were issued. The Company
recorded $112,960 in compensation to those directors, or $0.337 per share. A
total of 61,800 additional shares were issued during the year ended December 31,
1999 at $0.001 per share for services.

NOTE 6.  COMMITMENTS, CONTINGENCIES, AND CERTAIN CONCENTRATIONS

LEASE COMMITMENTS--The Company leases 6,000 sq. feet as its office and warehouse
space under the extension of a lease to December 31, 2002. The lease payments
are $2,010 per month.

The Company also leases various equipment under non-cancelable financing leases.
The future annual lease payments at December 31, 1999 were as follows: $6,994 in
the period ending December 31, 2000, $3,606 in the period ending December 31,
2001 and $2,721 in the period ending December 31, 2002.

LEGAL MATTERS--The Company has been subject to legal proceedings and claims
arising in the ordinary course of business. The Company disputed a bill for
promotional materials from 1995. The vendor has not sought collection since that
time and management does not expect any potential outcome to have a material
adverse effect on the Company's financial condition, results of operations, or
cash flows. The Company is also subject to two actions which in the aggregate
claim $30,000. The Company denies any liability in theses actions and is
defending them.

PRODUCT LIABILITY--The Company is insured to the extent of $5 million for
product liability claims and uses vendors who are also insured. There is a risk
that certain vendors may not have sufficient product liability insurance or may
loose their insurance, or the Company may not be able to insure at reasonable
cost. In any of these events, there could be a material adverse effect on the
financial condition, results of operations, or cash flows of the Company.

CERTAIN CONCENTRATIONS--The Company purchases a number of its products from
single sources and has sales to several major customers. The loss of any one
source or major customer could adversely affect the financial condition, results
of operations, and cash flows.

                                      F-10
   32
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 7. SEGMENT INFORMATION

The Company has sales from seven primary dietary supplements. These dietary
supplements are sold to customers in the United State and Puerto Rico. The
Company does not prepare information for internal use regarding each of the
products other than total revenues for each product and gross profit from each
product for those that represent greater than 10% of the reported combined
revenues, as it is impractical to do so. All of the operating segments are under
the guidance of the chief operating officer who is the segment manager. All of
the products sold are offered to all customers of the Company.

Enterprise-wide disclosures about revenue by significant products, gross profit
from significant product segments, and major customers are presented below.

                                            December 31, 1999              December 31, 1998
                                                12 Months                      12 Months
                                            -----------------              -----------------
                                                                          
         Revenues:
           Thin Tab 30                          $  405,312                      $223,222
           Thin Tab 90                             874,130                       228,757
           Other products sales                    588,358                       470,429
                                                ----------                      --------
                Total revenues                  $1,867,800                      $922,408
                                                ==========                      ========

         Gross profit:
           Thin Tab 30                          $  291,419                      $134,602
           Thin Tab 90                             655,597                       153,953
           Other products gross profit             190,790                       171,845
                                                ----------                      --------
                 Total gross profit             $1,137,806                      $460,400
                                                ==========                      ========

MAJOR CUSTOMERS--Health & Nutrition Systems International, Inc. sells a
significant amount of its products to the national distribution centers of a
nationwide chain of nutrition centers. It also sells a significant amount of its
products to a pharmacy chain with many retail operations. These large customers
have dominant positions within their markets and the Company monitors the
financial condition of these customers. Sales to these two customers were
$986,641 and $208,205 during the years ending December 31, 1999 and 1998
respectively. At December 31, 1999 and 1998, amounts due from these two
customers accounted for 26% and 76%, respectively of gross trade receivables.

NOTE 8.  STOCK COMPENSATION PLAN

At December 31, 1999, the Company had one stock-based compensation plan. The
1998 Nonqualified Stock Option Plan initiated in May, 1998. The plan set aside a
reserve of 2,500,000 shares of common stock for this purpose. Any options
granted expire 10 years from the grant date and are immediately vested. At that
time, the board of directors granted 335,000 to two board members to purchase
shares at $0.001 per share. The options were exercised and restricted shares
were issued. Compensation cost of $112,960 was recorded. There were no
outstanding options at December 31, 1999 and 1998.

The Company accounts for this plan under Accounting Principles Board Opinion No.
25, under which no compensation cost will be recognized. As future options are
granted and not immediately exercised, compensation costs for these options
under the Company's plan also will be determined based on the fair value of the
option at the grant date consistent with Statement of Financial Accounting
Standards No. 123,

                                      F-11
   33
                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 8. (CON'T)

"Accounting for Stock-Based Compensation" ("SFAS 123"), and will be disclosed to
reflect the reported and pro forma net income (loss) and earnings per share on a
basic and diluted basis. The fair value of each option grant will be estimated
on the date of grant using the Black-Scholes option pricing model using
assumptions in calculating compensation costs for expected stock price
volatility, a risk-free interest rate, and an expected average life of the
option.

NOTE 9.  SUBSEQUENT EVENTS

Subsequent to December 31, 1999 the company entered into a lease agreement with
its current landlord for 4,000 sq. feet of additional commercial warehouse
space. For a lease payment of $1,767.02 expiring December 31, 2000

In February, 2000 the board of directors canceled 650,000 shares of stock
previously issued for services contracted but neither rendered nor paid.

                                      F-12
   1
                                                                    Exhibit 10.3

                               FACTORING AGREEMENT

         THIS AGREEMENT is made this 03 day of November, 1998, between
NATIONSBANC BUSINESS FINANCE CORPORATION (NationsBanc") and Health & Nutrition
Systems International, Inc. (the "Client").

                                    RECITALS

         The Client from time to time will own accounts receivable resulting
from the Clients sale of products or services. The Client wishes to sell certain
accounts receivable to NationsBanc in accordance with the terms hereof For
purposes hereof, the following terms shall have the following meanings: (a) the
term "Receivables" shall mean all receivables, instruments, accounts, chattel
paper, notes, contract rights and general intangibles resulting from the Clients
sale of products or services before, on or before the date hereof; and (b) the
term "Account Debtor" shall mean each person or entity obligated to pay any
Receivable.

         Now, therefore, for good and valuable consideration, the parties agree
as follows:

         1. Purchase of Receivables. The Client shall, at such intervals as
NationsBanc may require, tender to NationsBanc all Receivables then owned by the
Client. Promptly after such tender, NationsBanc shall notify the Client if
NationsBanc wishes to purchase any or all of such Receivables. The parties agree
as follows with respect to each Receivable that NationsBanc elects to purchase:

                  (a) The purchase price (the "Purchase Price") for cash
         Receivable shall be 96.75% of the face value thereof (or such lesser
         percentage as the parties may from time to time agree upon with respect
         to specific Receivables).

                  (b) The parties shall consummate the Clients sale of each
         Receivable as promptly as practicable after NationsBanc's election to
         purchase the Receivable. The parties shall take the following actions
         to effect each such purchase and sale:

                           (i) NationsBanc shall pay the Client an amount equal
                  to the Purchase Price less the Reserve Amount (as defined
                  herein).

                           (ii) The Client shall execute and deliver to
                  NationsBanc, an assignment or endorsement (or both) of the
                  Receivable in such form as NationsBanc may require. In
                  addition, the Client shall deliver to NationsBanc: (aa) if
                  requested by NationsBanc, a purchase order signed by the
                  Account Debtor; (bb) if requested by NationsBanc, a valid
                  invoice with evidence of shipment of goods in accordance with
                  any applicable purchase order, (cc) if requested by
                  NationsBanc, a certificate duly executed by or on behalf of
                  the Account Debtor stating that all services have been

   2

                  satisfactorily completed in accordance with the purchase
                  order; (dd) any contracts, agreements, chattel paper, notes,
                  securities and instruments evidencing or relating to the
                  Receivable; (ee) any credit memoranda relating to the
                  Receivable; and (fl) such other documents and certificates as
                  NationsBanc may request.

                  (c) From and after the Clients assignment of any Receivable to
         NationsBanc, NationsBanc shall control and shall be entitled to collect
         and receive all amounts payable under the Receivable. NationsBanc shall
         from and after such time be vested with all of the Clients rights in
         the Receivable including without limitation: (i) the Clients right to
         stop in transit any shipment of merchandise evidenced by the
         Receivable; and (ii) the Clients right of replevin and reclamation with
         respect to the merchandise evidenced by the Receivable. NationsBanc
         shall have the right at its sole option to take possession of and sell
         such merchandise at public or private sale at the Clients expense for
         the purpose of paying the Clients obligations to NationsBanc. The
         Client shall not sue or make any collection on or with respect to any
         Receivable assigned hereunder except as otherwise authorized or
         directed by NationsBanc. All remittances received by the Client with
         respect to Receivables purchased by NationsBanc shall be held in trust
         for NationsBanc, and the Client will immediately deliver to NationsBanc
         all checks, monies or other forms of payment received with respect to
         such Receivables. NationsBanc assumes no responsibility in the
         acceptance of checks or other forms of exchange in payment of the
         Receivables acquired by it hereunder. NationsBanc may in its sole
         discretion extend the time for payment under, or make any compromise,
         adjustment or modification with respect to, any Receivable assigned
         hereunder without the Client's consent and without in any manner
         affecting the representations, warranties or agreements of the Client
         set forth herein.

                  (d) NationsBanc shall not be obligated to purchase any
         Receivable hereunder unless and until: (i) NationsBanc accepts an
         assignment of the Receivable in accordance with the terms hereof; and
         (h) all other terms and conditions set forth herein with respect to
         such purchase shall have been satisfied. NationsBanc's purchase of any
         Receivable or Receivables on one occasion shall not obligate
         NationsBanc to purchase other Receivables on future occasions.

                  (e) All invoices relating to the Receivables shall be in such
         form as NationsBanc, may from time to time approve. Such invoices
         shall, at NationsBanc's option, bear a legend notifying the Account
         Debtor of the assignment hereunder and directing the Account Debtor to
         make payment to NationsBanc at such address as NationsBanc may specify.
         NationsBanc shall be entitled, in its discretion, to mail all invoices
         relating to Receivables

                                       2
   3

         purchased by it. The Client shall upon demand reimburse NationsBanc for
         all postage, clerical and other costs incurred by NationsBanc in
         connection with any such mailing.

         2. Reserve Account.

                  (a) The Client shall maintain a reserve account (the "Reserve
         Account") on the books of NationsBanc, or any designee of NationsBanc,
         having at all times an aggregate balance that is not less than the
         Specified Percentage (as defined herein) of the outstanding balance of
         all Receivables then held by NationsBanc. NationsBanc shall be entitled
         to withhold such amount (the "Reserve Amount") from the Purchase Price
         of each Receivable as is necessary to ensure that the aggregate balance
         of the Reserve Account is not less than the minimum amount required
         hereunder. The Reserve Account shall be an account maintained on
         NationsBanc's books, and NationsBanc shall not be obligated to: (i)
         maintain cash or other funds in such account; or (ii) segregate funds
         or other amounts held in or credited to the Reserve Account from other
         funds held by NationsBanc. The Client shall not be entitled to any
         interest or income on amounts credited to the Reserve Account. The
         Specified Percentage shall mean 15.00% or such other percentage as
         NationsBanc may from time to time specify.

                  (b) If at any time the Client incurs any obligation to
         NationsBanc hereunder, NationsBanc shall be entitled, without
         limitation, to charge the Reserve Account with the amount of such
         obligation.

                  (c) If at any time the aggregate amount of the Reserve Account
         is less than the minimum amount required hereunder, the Client shall
         upon demand of NationsBanc immediately remit the amount of such
         deficiency to NationsBanc.

                  (d) NationsBanc may, in its sole discretion, from time to time
         remit funds to the Client if NationsBanc in its discretion determines
         that the balance of the Reserve Account at such time exceeds the
         minimum amount required hereunder. NationsBanc shall remit to the
         Client the balance remaining in the Reserve Account after: (i)
         termination of this Agreement; and (ii) the Clients satisfaction of all
         of its obligations to NationsBanc hereunder.

         3. Fees.

                  (a) One time closing costs of $500.00.

                  (b) The Client shall tender sufficient Receivables to
         NationsBanc during each calendar month to assure that the Discount
         Amount (as defined herein)

                                       3
   4

         for such month will equal or exceed $1,250.00 (the "Minimum. Amount").
         If the Discount Amount for any calendar month is loss than the Minimum
         Amount, then the Client shall, not later than 15 days after the end of
         such calendar month, pay NationsBanc an amount equal to the excess of
         the Minimum Amount over the Discount Amount for such month. For
         purposes hereof, the "Discount Amount" for each calendar month shall
         equal 3.25% of the aggregate face amount of all Receivables tendered to
         NationsBanc hereunder during such month. NationsBanc may, at its
         option, charge the Reserve Account for amounts owed by the Client under
         this subparagraph.

                  (c) Additional fee of 1% on invoices pad 46 to 75 days from
                      invoice date.
                      Additional fee of 2% on invoices paid 76 to 15 days from
                      invoice date.
                      Additional fee of 3% on invoices paid 106 days from
                      invoice date and beyond.

         4. Representations and Warranties.

                  (a) The Client expressly represents, warrants, under-takes and
         agrees as follows with respect to each Receivable assigned to
         NationsBanc: (i) the Client is the lawful owner of each 3uch Receivable
         subject to no liens, claims or security interests; (ii) each Receivable
         shall be sold and assigned to NationsBanc as absolute owner free and
         clear of all liens, claims and security interests (iii) each Receivable
         represents an amount owed to the Client as a result of a bona fide sale
         in the ordinary course of business of a product or service to an
         Account Debtor who is not affiliated with the Client; (iv) no
         Receivable is or will be subject to any dispute or claim by the Account
         Debtor as to price, terms, quality, quantity or delay in shipment; (v)
         no Account Debtor shall have asserted, or shall otherwise be entitled
         to, any offset, counterclaim, contra account or any defense of any kind
         or character; (vi) no Receivable will be subject to any discount,
         deduction, allowance or special payment terms; (vii) the Client does
         not have and will not have at the time of any assignment any knowledge
         of any fact that would or could affect the validity or collectibility
         of any Receivable, (viii) no Receivable will represent a delivery of
         merchandise; upon "consignment," "guaranteed sale," "sale or return,"
         "payment on reorder" or similar terms; (Ix) no Receivable will
         represent a "pack, bill and hold" or similar transaction; (x) the names
         of the Account Debtors and the amounts owing on the due dates of each
         Receivable are and will be correctly stated in all instruments of
         assignment. schedules, invoices or other documentation famished by the
         Client to NationsBanc; (xi) no Receivable will have a due date that is
         more than 30 days from the invoice date unless otherwise approved by
         NationsBanc; (xii) no other sale, assignment or grant of a security
         interest or lien of any kind whatsoever presently exists or will
         hereafter be created in favor of any person or entity with respect to
         the Receivable; (xiii) any and all information furnished by the Client
         to NationsBanc in connection with the sale of the

                                       4
   5

         Receivable will be true and correct at the time that such information
         is famished to NationsBanc; (xiv) the Client has strictly complied with
         all applicable laws and regulations in connection with the Clients sale
         of products or services giving rise to the Receivable; (xv) the Client
         will use all proceeds from the sale of Receivables solely for business
         purposes; and (xvi) each Receivable will be payable in United States
         dollars.

                  (b) The Client authorizes NationsBanc to represent and warrant
         to any subsequent transferee or assignee of any Receivable that the
         Receivable represents a legally valid indebtedness of the Account
         Debtor for the amount of such Receivable and that there are no known
         defaults, offsets or counterclaims with respect to the Receivable. The
         Client shall indemnify NationsBanc from and against any liability
         incurred by NationsBanc, or any claims made against NationsBanc, as a
         result of any such representation or warranty by NationsBanc.

         5. Covenants of Client The Client shall comply with each of the
following covenants during the term hereof:

                  (a) The Client shall deliver to NationsBanc from time to time
         such financial statements as NationsBanc may request. NationsBanc may,
         at any time during normal business hours, inspect, verify and check all
         of the Clients books, accounts, records, orders, correspondence and
         papers that NationsBanc deems relevant to the Receivables. NationsBanc
         shall be entitled, without limitation, to inspect and audit the Clients
         books, records, accounts, files or inventory and make extracts or
         copies thereof.

                  (b) The Client shall do or cause to be done all things
         necessary to preserve and keep in fall force and effect its existence,
         rights and privileges as a corporation or partnership, as the case may
         be, under the laws of its state of organization.

                  (c) The Client will not create, incur, assume or suffer to
         exist any lien or other encumbrance (except in favor of NationsBanc)
         on: (i) the Receivables, (whether now existing or hereafter arising);
         (ii) any inventory now or hereafter owned by the Client. or (iii) any
         proceeds of the foregoing.

                  (d) The Client shall not merge into or with, consolidate with,
         acquire control of, or sell all or a substantial part of its assets to,
         any other person or entity. In addition, the, Client shall not suffer
         or permit any change in the ownership or control of its outstanding
         capital stock or other equity securities, without prior written consent
         from NationsBanc.

                                       5
   6

                  (e) Notwithstanding any contrary provision set forth herein,
         the Client shall not sell or tender for sale to NationsBanc any
         Receivable if: (i) complete deliveries shall not have been made under
         any agreement, representation or understanding between the Client and
         the Account Debtor under the Receivable; (ii) there is any disagreement
         or dispute with respect to the quality. quantity or consideration of
         the debt or any applicable product or service relating to the
         Receivable; or (iii) the Receivable is not for a certain, definite,
         undisputed and liquidated amount.

                  (f) The Client shall notify NationsBanc of any Insolvency with
         respect to any Account Debtor as promptly as practical after the Client
         becomes aware of such Insolvency. For purposes hereof, Insolvency shall
         be deemed to have occurred when:

                           (i) a general meeting of unsecured creditors shall be
                  called by the Account Debtor or on behalf of the Account
                  Debtor;

                           (ii) a voluntary or involuntary proceedings shall
                  have been instituted in a United States Bankruptcy Court to
                  adjudge an Account Debtor bankrupt;

                           (iii) a petition shall have been filed in a United
                  States Bankruptcy Court for the corporate reorganization of an
                  Account Debtor (Chapter X) or for the arrangement of the debts
                  of an Account Debtor (Chapter XI);

                           (iv) a receiver is appointed of the whole or any part
                  of the property of an Account Debtor;

                           (v) an Account Debtor, or a third party on behalf of
                  an Account Debtor, shall have made a general offer of
                  compromise, in writing, to his, her or its creditors for less
                  than his, her or its indebtedness;

                           (vi) possession shall have been taken of an Account
                  Debtors assets under an assignment or deed of trust executed
                  by the debtor for the benefit of his, her or its creditors;

                           (vii) a creditors committee shall have been formed
                  for the sole purpose of liquidation;

                           (viii) possession shall have been taken of an Account
                  Debtors business assets under a chattel mortgage given
                  thereon;

                           (ix) a sale in bulk is made of an Account Debtors
                  property;

                                       6
   7

                           (x) an Account Debtors assets shall have been sold
                  under a writ of execution or attachment, or a writ of
                  execution shall I have been returned unsatisfied;

                           (xi) an Account Debtor shall have absconded;

                           (xii) an Account Debtors assets shall have been sold
                  under a distraint or levy by any taxing authority, or by a
                  landlord;

                           (xiii) an Account Debtor shall file an assignment or
                  make a proposal to creditors under the Canadian Bankruptcy
                  Act;

                           (xiv) a Receiving Order is made against an Account
                  Debtor under the Canadian Bankruptcy Act;

                           (xv) an Account Debtors assets shall have been sold
                  under the Canadian Bank Act; or

                           (xvi) a Winding-Up Order under the Dominion
                  Winding-Up Act (Canada) is made against an Account Debtor.

         6. Attorney-in-Fact. NationsBanc shall be entitled to bring suit in its
name or in the name of the Client, or both of them to collect or enforce any
Receivable assigned hereunder. The Client hereby makes, constitutes and appoints
NationsBanc and each of its officers, or any person whom NationsBanc may
designate, with full power of substitution, the true and lawful attorney of the
Client, and authorizes the attorney or his. her or its substitute, at the
Client's cost and expense, to execute all documents in the Client's name, and to
do all other things necessary or appropriate to carry out this Agreement
including without limitation: (a) endorsing the name of the Client upon any
checks or other instruments that may come into NationsBanc's possession in
payment of Receivables; (b) endorsing the name of the Client on any freight or
express bill or bill of lading relating to any Receivable; and (c) taking all
action as NationsBanc deems appropriate, including without limitation the
execution and filing of financing statements, in the name of and on behalf of
the Client to perfect any of the security interests granted to NationsBanc
herein. If the Client defaults in the performance of its obligations hereunder
or if NationsBanc terminates this Agreement, NationsBanc or the attorney-in-fact
hereunder is hereby authorized to notify postal authorities to change the
address for delivery of mail to the Client to such address as NationsBanc or
such attorney-in-fact may designate and to receive and open mail addressed to
the Client to enable NationsBanc to carry out this Agreement, The Client hereby
ratifies and approves all acts of the attorney-in-fact and agrees that neither
NationsBanc nor the attorney-in-fact will be liable for any acts of commission
or omission nor for any error of judgment or mistake of fact or law. This power
is coupled with an interest and is irrevocable so long as any Receivable
assigned and sold to NationsBanc remains unpaid.

                                       7
   8

         7. Waiver. The waiver by NationsBanc of any particular breach by the
Client of a provision of this Agreement, or NationsBanc's failure to exercise; a
right granted to it herein, shall not constitute a waiver of any subsequent
breach or any other right.

         8. Indemnity and Repurchase Obligations.

                  (a) Barnett's purchase of a Receivable on a non-recourse basis
         shall not relieve the Client from any liability that might arise out of
         the Clients breach of any representations, warranties or agreements
         hereunder, or out of any unauthorized or fraudulent acts of the Client,
         its officers, employees or agents. In the event of any such breach or
         any such unauthorized or fraudulent act, the Client agrees that the
         Receivable shall be considered to have been purchased by NationsBanc
         with full recourse and shall upon NationsBanc's request be purchased by
         the Client for the outstanding balance thereof

                  (b) If any Account Debtor rejects or returns any merchandise
         after assignment of the applicable Receivable to NationsBanc or if any
         Account Debtor asserts any claim or defense against NationsBanc or the
         Client with respect to any Receivable assigned to NationsBanc or if any
         Account Debtor disputes any Receivable in whole or in part, the Client
         shall immediately upon Barnett's request repurchase the applicable
         Receivable for the outstanding balance thereof NationsBanc may in its
         discretion: (i) charge the Reserve Account with the amount of such
         Receivable; or (ii) require the Client to replace such Receivable with
         one or more other Receivables that arc acceptable to NationsBanc, If
         the Client obtains possession of any returned or rejected merchandise,
         then the Client shall hold such merchandise in trust for NationsBanc,
         at the Clients risk and expense, until the Client has repurchased the
         applicable Receivable from NationsBanc in accordance with the terms
         hereof.

                  (c) The Client shall indemnify NationsBanc from and against
         all losses, damages. liabilities and costs, including attorneys fees
         (whether incurred in connection with trial or appellate proceedings or
         otherwise), incurred by NationsBanc as a result of or in connection
         with: (i) any claim or defense which any Account Debtor or other person
         may have or assert against the Client or NationsBanc; or (ii) any
         breach of any of the Clients representations, warranties or agreements
         contained herein. If the Client incurs any indemnity obligations
         hereunder with respect to any Receivable, the Client shall, without
         limitation, upon NationsBanc's request repurchase the Receivable for a
         price equal to the outstanding balance of the Receivable.

                                       8
   9

                  (d) NationsBanc shall have the right to charge (by setoff or
         otherwise) the Reserve Account or any of the Clients accounts
         maintained with any Bank (as defined herein), Without notice, for the
         amount of any of the Clients indemnity or other obligations hereunder.

                  (e) The remedies set forth in this Agreement or otherwise
         available under applicable law shall be cumulative, and no election by
         NationsBanc to exercise any remedy shall preclude it from thereafter
         exercising any other remedy.

         9. Termination. No termination or cancellation (regardless of cause or
procedure) of the transactions or relationship contemplated under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the
Client or the rights of NationsBanc relating to any transaction or event
occurring prior to such termination or cancellation. All undertakings,
agreements, indemnifications, covenants, warranties and representations
contained herein shall survive such termination or cancellation.

         10. Expenses. The Client agrees to. pay, and save NationsBanc harmless
against liability for the payment of, all out-of-pocket expenses arising in
connection with the transactions contemplated herein (including any
modifications relating hereto). Such expenses include, without limitation, the
following: (a) any and all state documentary stamp taxes or other taxes
(including interest and penalties, if any) which may be determined to be payable
with respect to the execution and delivery of this Agreement or any assignment
or other document executed in connection with this Agreement or any such
modification; and (b) all search fees and filing fees incurred in connection
with the transactions contemplated herein. The Client shall also pay all of
NationsBanc's costs of enforcing this Agreement including NationsBanc's employee
travel expenses, court costs and fees of attorneys and legal assistants (whether
incurred in connection with trial or appellate proceedings).

         11. Security Interest.

                  (a) In order to secure the Clients obligations to NationsBanc
         under this Agreement, as the same may be amended or restated from time
         to time, whether now existing or hereafter arising, including without
         limitation the Clients obligation to indemnify NationsBanc, the Client
         hereby grants to NationsBanc a continuing security interest in: (i) all
         Receivable-q now or hereafter owned by the Client; (ii) all funds or
         other assets of the Client now or hereafter held by NationsBanc or any
         Bank (as defined herein); (iii) all checking, savings, deposit and
         other accounts, together with all funds now or hereafter held therein,
         now or hereafter maintained by the Client with NationsBanc or any Bank;
         (iv) all of the Clients books, records, computer disks, tapes and
         software; (v) the Reserve Account and all funds now or hereafter held
         therein; (vi) all amounts now or hereafter owed by

                                       9
   10

         NationsBanc or any Bank to the Client; and (vii) any and all proceeds
         of any of the foregoing assets. For purposes hereof, the term "Bank"
         shall mean: (i) any bank or other financial institution that is now or
         hereafter a direct or indirect subsidiary of NationsBanc Banks, Inc.
         ("BBI") (or any successor to DBI) or that is now or hereafter directly
         or indirectly controlled by BBI; and (ii) any other bank or financial
         institution that is now or hereafter related to or affiliated with
         NationsBanc through common control (direct or indirect) or otherwise.
         The Client shall from time to time at 13arrietts request execute, and
         file in such filing offices as NationsBanc may request, such financing
         statements as NationsBanc may require to perfect the security interests
         granted herein.

                  (b) The Client authorizes and empowers NationsBanc, in its
         sole discretion, at any time after any default by the Client in the
         performance of its obligations hereunder to direct any Bank to: (i)
         place a hold on the Clients checking and other accounts now or
         hereafter maintained at the Bank; and (ii) appropriate funds from any
         such account and remit the same to NationsBanc. Each Bank is authorized
         to comply with each such direction made by NationsBanc without any duty
         to determine whether such direction, or any action pursuant thereto, is
         authorized hereunder or otherwise complies with the terms hereof No
         such Bank, shall have any liability to the Client or any other entity
         as a result of the Banks complianco with any such direction, and the
         Client shall indemnify each Bank from and against all such liability.
         NationsBanc is authorized to apply all funds received by it hereunder
         to the Clients obligations in turh order as NationsBanc may elect. The
         parties acknowledge that the amount held in each such account may
         exceed the amount of the. Clients obligations as ultimately determined.
         The Client agrees that neither NationsBanc nor any Bank, nor any of
         their respective affiliates, shall be liable for the dishonor of any
         item as the result of a hold being placed on the Clients accounts or as
         the result of any appropriation of funds in any such account in
         accordance with the terms hereof.

         12. Notices. Any notice or other communication required or permitted
hereunder shall be In writing and shall be delivered by (a) personal delivery;
(b) courier; or (c) certified or registered mail, postage prepaid. Any such
notice shall be decinod givon upon its being sent to the following address.

If NationsBanc, at:                 NationsBanc Business Finance Corp.
                                    50 North Laura Street
                                    17th Floor
                                    Jacksonville, FL 32202-3664
                                    Attn: Doug Monda

                                       10
   11

If the Client, at:                Health & Nutrition Systems International, Inc.
                                  3750 Investment Lane  #5
                                  West Palm Beach, FL 33404
                                  Attn: Steven Pomerantz

         13. Third Parties. Each of the Banks is a third party beneficiary of
this Agreement, and each Bank is authorized to: (a) enforce its rights hereunder
against the Client: and (b) comply with any request or direction of NationsBanc
under or in connection with this Agreement. If at any time NationsBanc is
entitled to charge or debit the Clients account maintained with any Bank or if
at any time NationsBanc is entitled to offset the Clients obligations against
funds in any such account, each Bank is authorized to pay over and remit funds
in any such account to NationsBanc upon any request of NationsBanc. No such Bank
shall be required to inquire into NationsBanc's authority to make any such
request, arid no Bank sha)l have any liability to the Client as a result of the
Banks compliance with any such request (whether or not such request is
authorized hereunder).

         14. Account Statements. NationsBanc may from time to time send the
Client statements showing the status of the Clients accoiints hereunder. Each
such statement shall constitute an account stated and shall be binding upon the
Client with respect to the matters shown therein except to the extent that the
Client, not later than 30 days after the date of each statement, provides
NationsBanc with written exceptions to the statement.

         15. Miscellaneous. This Agreement shall be governed and construed in
accordance with Florida law. The Client shall not assign this Agreement without
the prior written consent of NationsBanc. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hcreto and their respective
heirs, legal representatives, successors and permitted assigns. This Agreement
contains the entire agreement between the parties hereto regarding the subject
matter hereof, excepting only assignments and schedules thereto that may be
executed from time to time. This Agreement sliall not be modified except by
writtcn instrurnont signed by all of tho parties hereto. The Client agrees to
execute such further instruments as may be required by NationsBanc to evidence
the transactions contemplated herein. If any provision of this Agreement is
found invalid, the remaining provisions of this Agreement shall not be affected
thereby. Nothing set forth herein or otherwise shall; (a) render the parties
partners of one another; or (b) constitute the Client as an agent of
NationsBanc.

         16. Term. The term of this Agreement shall be for an initial term of I
year (12 Months) from the date of execution and shall be automatically renewed
for successive renewal terms of I year (12 Months) periods each unless
terminated at the end of the initial term or any renewal term by any party
giving,the other wTitten notice of termination at least sixty (60) days prior to
the end of such period. If the Client obtains alternatc finauicing rroin any
NationsDanc or NationsBank affiliate, and wishes to terminate this Agrooment,
the remaining term of this Agreement will be waived.

                                       11
   12

         17. Jury Trial Waiver. NationsBanc, the Client and, if applicable, the
guarantors set forth below, hereby knowingly, voluntarily and intentionally
waive any right any may have to a trial by jury in respect of any litigation
based on this agreement, the guaranty set forth below or any transactions
contemplated herein or therein, or arising out of, under or in connection with
this agreement, such guaranty or any related document, or any course of conduct,
course of dealing, statements (whether verbal or written) or actions of any
party hereto, to the guaranty or to any related document. The parties consent to
jurisdiction and venue in the state or federal courts in any county where
NationsBanc maintains an office. This provision is a material inducement for the
parties entering into the subject transaction.

         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first above written.

NationsBanc Business Finance Corp.          Health & Nutrition Systems
                                            International, Inc.

By:                                         By:
   ---------------------------------           --------------------------------
   Doug Monda                                  Steven Pomerantz
   Its: Director                               Its: President

                                       12
   13
                               GUARANTY OF PAYMENT

         For good and valuable consideration, each of the undersigned guarantors
(collectively, the "Guarantors"), jointly and severally. hereby unconditionally
and irrevocably guarantees to NationsBanc Business Finance Corporation
("NationsBanc") the full, prompt and unconditional payment and performance, when
due, of all obligations (collectively, the "Obligations") of Health & Nutrition
Systems Intemational,.Inc. (the "Client") now or hereafter due under the
foregoing Factoring Agreement between NationsBanc and the Client (as such
agreement may from time to time be amended or restated). Each of the Guarantors
also agrees, jointly and severally, to pay all costs (including attorneys fees
whether incurTed in connection with collection, trial, appeal or otherwise) of
collection against the Guarantors under this Guaranty. Each Guarantor shall
provide NationsBanc with such financial statements and tax returns as
NationsBanc may from time to time request. Each Guarantor agrees that from time
to time NationsBanc may, without notice to the Guarantors and without affecting
any liability of any Guarantor: (a) exchange, release, sell (by foreclosure or
otherwise), apply, or otherwise deal with any collateral for payment or
performance of the Obligations at the election of NationsBanc, (b) release any
guarantor or other person at any time liable for the Obligations or any part
thereof; (c) extend, renew, or modify the terms of or accelerate the
Obligations, in whole or in part; (d) modify the terms of the foregoing
Factoring Agreement or any other document in any way related to any Obligations;
or (e) waive or fail to enforce any of its rights under any agreement
evidencing, relating to or securing the Obligations. Except as prohibited by
applicable law, each of the Guarantors waives any right to require NationsBanc:
(a) to continue providing factoring or other services to the Clients; (b) to
make any presentment, protest, demand or notice of any kind, including notice of
any nonpayment of the Obligations or of any nonpayment related to any
collateral, or notice of any action or nonaction on the part of the Client,
NationsBanc, any surety, endorser, or other guarantor in connection with the
Obligations or in connection with the creation of new or additional obligations;
(c) to resort for payment or to proceed directly or at once against any person,
including the Client or any other guarantor; (d) to proceed directly against or
exhaust any collateral held by NationsBanc from the Client, any guarantor or any
other person; (e) to pursue any other remedy within NationsBanc's power; or (f)
to commit any act or omission of any kind, or at any time, with respect to any
matter whatsoever. Each of the Guarantors also waives any and all rights, claims
and defenses arising by reason of: (a) any "one action" or "anti-deficiency" law
or any other law which may prevent NationsBanc from bringing any action,
including a claim for deficiency, against any of the Guarantors, before or after
NationsBanc's commencement or completion of any foreclosure action, either
judicially or by exercise of a power of sale; (b) any election of remedies by
NationsBanc which destroys or otherwise adversely affects any of the Guarantors
subrogation rights or any of the Guarantors rights to proceed against
NationsBanc for reimbursement, including without limitation, any loss of rights
that any of the Guarantors may suffer by reason of any law limiting, qualifying
or discharging the Obligations; (c) any disability or other defense of the
Client of any other guarantor, or of any other person, or by reason of the
cessation of the Client's liability for any reason whatsoever, other than
payment in full in legal tender, of the Obligations; (d) any right to claim
discharge of the Obligations on the basis of

                                       13
   14

unjustified impairment of any collateral for the Obligations; (e) any statute of
limitations; or (f) any defenses given to guarantors at law or in equity other
than actual payment and performance of tho Obligations. If the Client or any
other person at any time pays any of the Obligations, and thereafter NationsBanc
is required to remit the amount of that payment to the Client's trustee in
bankruptcy or to any similar person, under any federal or state bankruptcy law
or law for tho relief of debtors, the Obligations shall be considered unpaid for
the purpose of enforcement of this Guaranty. Each of the Guarantors further
waives and agrees not to assert or claim at any time any deductions to the
amount guaranteed under this Guaranty by virtue of any right of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Client or any Guarantor. Each of the
Guarantors agrees that, upon the occurrence of a default under the Factoring
Agreement, NationsBanc may exercise against any or all of the Guarantors any or
all of the rights NationsBanc may have against the Client, including (without
limitation) any right of setoff. Each of the Guarantors also agrees that the
paragraphs of the Factoring Agreement under the heading "Miscellaneous" and
"Jury Trial Waiver" shall apply to this Guaranty as well, and the Guarantors
shall be bound by the terms thereof. No formal acceptance of this Guaranty by
NationsBanc is necessary to make this Guaranty effective. The failure of any
person named below as a Guarantor or any other person to sign this Guaranty
shall not discharge or otherwise impair the liability of any person who signs
this Guaranty. This Guaranty shall be a continuing guaranty.

Dated:   November 03, 1998

                                               Guarantor:

                                               --------------------------------
                                               Steven Pomerantz

                                               --------------------------------
                                               Tony Musso

                                               --------------------------------
                                               Other 30% Owner ?

                                       14
   15

                         ADDENDUM TO FACTORING AGREEMENT

         The Factoring Agreement between Banc of America Business finance
Corporaiton (formerly known as NationsBanc Business Finance Corporation) and
Health & Nutrition Systems International, Inc. dated November 4, 1998 is amended
as follows:

         A.       The Purchase Price of accounts receivable, as stated in
                  paragraph 1(a) of the Factoring Agreement shall be 97% of the
                  face value thereof.

         B.       The monthly minimum of $1,250 as outlined in paragraph 3(b)
                  will be increased to $5,500. If Health & Nutrition Systems
                  International Inc, fees are less than $5,500, Health &
                  Nutrition Systems International, Inc. has the option to make
                  up the difference the following month.

         C.       The terms of this Agreement shall be for an initial term of 12
                  months ("Term") from the date of execution and shall be
                  automatically renewed for successive renewal terms of Term
                  periods each unless terminated at the end of the initial term
                  or any renewal term by the Client giving Bank of American
                  written notice of termination at least sixty (60) days prior
                  to the end of each period. If the Client obtains alternate
                  financing from any Bank of America of NationsBank affiliate,
                  and wishes to terminate this Agreement, the remaining term of
                  this Agreement will be waived. bank of America shall be
                  excused from performing any obligation(s) to Client in the
                  event Client commits an Event of Default Bank of America may
                  terminate this Agreement by giving thirty (30) days notice,
                  except that in the event Client commits an Event of Default,
                  Bank of America may terminate immediately and without notice.
                  Notwithstanding termination, Bank of America shall retain all
                  of its rights, including all lien rights in the Receivable
                  until all obligations due Bank of America are fully
                  discharged.

         This Addendum is hereby made apart of the Factoring Agreement. All
other rights, terms and conditions of the original Factoring Agreement remain in
effect.

Banc of America Business Finance      Health & Nutrition Systems International,
     Corporation                             Inc.

By:                                   By:
   ------------------------------        --------------------------------------

Title:                                Title:
      ---------------------------            ----------------------------------

                                       15

 5

THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ANNUAL
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

                             
                   YEAR
                          DEC-31-1998
                             JAN-01-1998
                               DEC-31-1998
                                          36,805
                                         0
                                   44,487
                                   (13,200)
                                    112,859
                               183,017
                                          69,791
                                  53,190
                                 214,993
                          237,726
                                          4,277
                                0
                                          0
                                         6,063
                                     (28,796)
                   214,993
                                        922,653
                               922,653
                                          462,008
                                1,158,848
                               (17,954)
                                18,359
                               1,360
                               (236,440)
                                         0
                           (236,440)
                                       0
                                      0
                                            0
                                  (236,440)
                                      (.043)
                                    (.043)

  

 5

THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ANNUAL
AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

                             
                   YEAR
                          DEC-31-1999
                             JAN-01-1999
                               DEC-31-1999
                                         154,246
                                         0
                                  296,509
                                   (61,336)
                                    120,326
                               575,984
                                         115,383
                                  65,981
                                 651,869
                          264,709
                                          6,327
                                0
                                          0
                                         7,488
                                     373,345
                   651,869
                                      1,867,800
                             1,867,800
                                          729,994
                                1,852,232
                                 2,711
                                80,138
                               2,040
                                 28,279
                                         0
                             28,279
                                       0
                                      0
                                            0
                                    28,279
                                       .004
                                     .004