As filed with the Securities and Exchange Commission on February __, 2003

Commission File No. 333-_________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2

Registration Statement Under
THE SECURITIES ACT OF 1933

L.A.M. PHARMACEUTICAL, CORP.
(Exact name of registrant as specified in charter)

Delaware 2834 52-2278236
(State or other jurisdiction (Primary StandardClassi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)

755 Center Street
Lewiston, New York 14092
(877) 526-7717 or (716) 754-2002
(Address and telephone number of principal executive offices)

755 Center Street, Lewiston, New York, 14092
(877) 526-7717 or (716)754-2002
(Address of principal place of business or intended principal place of business)

Joseph T. Slechta
800 Sheppard Avenue West, Commercial Unit 1,
Toronto, Ontario, Canada M3H 6B4
(877) 526-7717 or (416) 633-7047
(Name, address and telephone number of agent for service)

Copies of all communications, including all communications sent to
the agent for service, should be sent to:

William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box
[X].

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
- ---------- ---------- ----------- ------------- ------------

Common stock (2) 1,742,242 $0.22 $383,293 $36
- --------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------

(1) Offering price computed in accordance with Rule 457 (c). (2) Shares of
common stock offered by selling stockholders.

Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the exercise of the options or warrants as a result of any adjustment in
the number of securities issuable by reason of the options or warrants.

The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

L.A.M. PHARMACEUTICAL, CORP.

Common Stock
1,742,242 shares of common stock

By means of this prospectus several shareholders of L.A.M. Pharmaceutical
Corp. are offering to sell up to 1,742,242 shares of common stock which they own
or which they may at a later date acquire upon the exercise of options or
warrants.

L.A.M. will not receive any proceeds from the sale of the common stock by
the selling stockholders. L.A.M. will pay for the expenses of this offering.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

These securities are speculative and involve a high degree of risk. For a
description of certain important factors that should be considered by
prospective investors, see "Risk Factors" beginning on page 6 of this prospectus

L.A.M.'s common stock is quoted on the OTC Bulletin Board under the symbol
"LAMP." On February __, 2003 the closing bid price for one share of L.A.M.'s
common stock was $___.

The date of this prospectus is February __, 2003

PROSPECTUS SUMMARY

L.A.M, Pharmaceutical, Corp. was incorporated in Delaware in July 1998. In
September 1998, L.A.M. acquired all of the issued and outstanding shares of LAM
Pharmaceuticals LLC ("LAM") for 6,000,000 shares of L.A.M.'s common stock. LAM
Pharmaceuticals LLC was organized in Florida in 1994 (initially as a
partnership) to commercialize a new drug delivery system which offers patients,
among other benefits, safer and more effective treatment for a number of serious
diseases. Unless otherwise indicated, all references to L.A.M. include LAM
Pharmaceuticals LLC.

L.A.M. is the owner of a proprietary wound healing and transdermal drug
delivery technology that involves the use of an original L.A.M. Ionic Polymer
Matrix technology (L.A.M. IPM(TM)) for the purpose of delivering, enhancing and
sustaining the action of certain established therapeutic agents.

The L.A.M. IPM(TM) technology combines in a matrix, in a novel manner,
those drugs that are well established and generally regarded by the public, the
regulatory authorities and pharmaceutical industry as safe. When combined with
the active drug ingredient, the L.A.M. Ionic Polymer Matrix(TM) technology
allows the delivery of greater amounts of drug to the target area than is
otherwise possible. The L.A.M. Ionic Polymer Matrix(TM) technology therefore
offers potential benefits by providing faster and more prolonged therapeutic
activity, less intrusive and less painful methods of delivery and a faster onset
of therapeutic activity.

L.A.M.'s corporate objective is to develop, market and license wound
healing and transdermally delivered drugs, both prescription and
over-the-counter, using the patented L.A.M. Ionic Polymer Matrix(TM) technology.
L.A.M. intends to seek out corporate alliances and co-marketing partnerships
where other drugs and topical products can be enhanced by L.A.M. IPM(TM)
technology.

On April 15, 2002, L.A.M. obtained approval from the U.S. Food and Drug
Administration ("FDA") of its Section 510(k) pre-market notification of intent
(number K020325) to market its proprietary L.A.M. IPM Wound Gel(TM). Commercial
sales of this product began in August 2002.

All of L.A.M's other products are in various stages of development and
testing, and L.A.M. has not obtained FDA approval for any of these other
products. As a result, to date L.A.M. has not generated any significant revenues
from the sale of pharmaceutical products, and expects to incur losses until
significant revenues are earned from the sale of L.A.M. IPM Wound Gel(TM) or
other products.

L.A.M.'s executive offices are located 800 Sheppard Avenue West,
Commercial Unit 1, Toronto, Ontario, Canada M3H 6B4. L.A.M.'s telephone number
is (877) 526-7717 and its fax number is (416) 633-2363

L.A.M.'s Head Office and Laboratory is located at 755 Center Street,
Lewiston, New York. L.A.M.'s telephone number is (877) 526-7717 and its fax
number is (716) 754-2043.

The Offering

As of January 31, 2003, L.A.M. had 29,447,092 shares of common stock
issued and outstanding. The number of outstanding shares does not give effect to
shares which may be issued pursuant to the exercise and/or conversion of
options, warrants and convertible notes previously issued by L.A.M. See
"Comparative Share Data".

L.A.M. will not receive any proceeds from the sale of the shares by the
selling shareholders.

The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of revenues and history of loss,
and the need for additional capital. See the "Risk Factors" section of this
prospectus for additional Risk Factors.

OTC Bulletin Board Symbol: LAMP

Summary Financial Data

The financial data presented below should be read in conjunction with the
more detailed financial statements and related notes which are included
elsewhere in this prospectus along with the section entitled "Management's
Discussion and Analysis and Plan of Operations."

Results of Operations:
Income Statement Data:

Nine Months
Ended September 30, Year Ended Year Ended
2002 December 31, 2001 December 31, 2000
------------------ ----------------- -----------------

Sales $ 22,165 $ -- $ --
Licensing Revenue -- 300,000 --
Operating Expenses 2,340,975 (2,293,299) (1,926,428)
Financial Accounting Expenses 2,407,432 (6,450,673) (2,878,841)
Interest Income -- 45,212 28,261
----------- ----------- -----------
Net Loss $(4,726,242) $(8,398,760) $(4,777,008)
=========== =========== ===========
Balance Sheet Data:
September 30, 2002 December 31, 2001 December 31, 2000
------------------ ----------------- -----------------

Current Assets $ 620,030 $158,811 $2,101,706
Total Assets 1,341,636 769,318 2,457,503
Current Liabilities 714,461 601,999 1,995,734
Total Liabilities 1,085,858 1,657,396 3,459,209

Working Capital (Deficiency) (94,431) (443,188) 105,972
Stockholders' Equity (Deficit) 255,778 (888,078) (1,001,706)

Forward Looking Statements

This prospectus contains various forward-looking statements that are based
on L.A.M.'s beliefs as well as assumptions made by and information currently
available to L.A.M. When used in this prospectus, the words "believe", "expect",
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements. Such statements may include statements regarding
seeking business opportunities, payment of operating expenses, and the like, and
are subject to certain risks, uncertainties and assumptions which could cause
actual results to differ materially from projections or estimates. Factors,
which could cause actual results to differ materially, are discussed at length
under the heading "Risk Factors". Should one or more of the enumerated risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.

RISK FACTORS

The securities being offered hereby are highly speculative and prospective
investors should consider, among others, the following factors related to the
business, operations and financial position of L.A.M.

Although L.A.M has received approval for L.A.M. IPM Wound Gel(TM) in April 2002,
there is no guarantee that L.A.M. will receive regulatory approval for its other
products. Failure to obtain regulatory approvals for its other products will
prevent L.A.M. from marketing them and may significantly and adversely affect
its future financial performance. The pre-clinical and clinical testing,
manufacturing, and marketing of L.A.M.'s drug delivery systems is subject to
extensive regulation by numerous governmental authorities in the United States
and in other countries, including, but not limited to, the United States Food
and Drug Administration. Among other requirements, FDA approval, including a
review of the manufacturing processes and facilities used to produce drug
delivery products, is required before these products may be marketed in the
United States. Similarly, marketing approval by a foreign governmental authority
is typically required before L.A.M.'s drug delivery systems may be marketed in a
particular foreign country.

With the exception of L.A.M. IPM Wound Gel(TM), L.A.M.'s other products
have not been approved by the FDA or any foreign authority. L.A.M does not
expect to be profitable until significant revenues are generated from sales of
L.A.M. IPM Wound Gel(TM), or unless and until its drug delivery products now
under development receive FDA or foreign regulatory approval and are
commercialized successfully. In order to obtain FDA approval of a product L.A.M.
must demonstrate to the satisfaction of the FDA that the product is safe and
effective for its intended uses and that L.A.M. is capable of manufacturing the
product with procedures that conform to the FDA's regulations, which must be
followed at all times. The process of obtaining FDA approvals can be costly,

time consuming, and subject to unanticipated delay. There can be no assurance
that additional approvals will be granted to L.A.M. on a timely basis, or at
all.

In addition to delays in review and approval of pre-clinical and clinical
testing, delays or rejection may also be encountered based upon changes in
applicable law or regulatory policy during the period of product development and
FDA regulatory review. Any failure to obtain, or any delay in obtaining FDA
approvals would adversely affect the ability of L.A.M. to market its other
products. Moreover, even if FDA approval is granted, any approval may include
significant limitations on indicated uses for which a product could be marketed.

Both before and after approval is obtained, a product and its manufacturer
are subject to comprehensive regulatory oversight. Violations of regulatory
requirements at any stage, including the pre-clinical and clinical testing
process, the approval process, or thereafter (including after approval), may
result in adverse consequences, including the FDA's delay in approving or
refusal to approve a product, withdrawal of an approved product from the market,
and/or the imposition of criminal penalties against the manufacturer. In
addition, later discovery of previously unknown problems relating to a marketed
product may result in restrictions on such product or manufacturer including
withdrawal of the product from the market. Also, new government requirements may
be established that could delay or prevent regulatory approval of L.A.M.'s
products under development.

If sales of L.A.M. IPM Wound Gel(TM) do not meet expectations, or cost estimates
for clinical trials and research of L.A.M.'s other products are inaccurate,
L.A.M. will require additional funding. L.A.M.'s estimates of the future sales
of L.A.M. IPM Wound Gel(TM) may be substantially higher than the actual revenues
from this product, and its estimates of the costs associated with future
clinical trials and research may each be substantially lower than the actual
costs of these activities. If L.A.M.'s revenue or cost estimates are incorrect,
L.A.M. will need additional funding for its research efforts.

There can be no assurance that L.A.M. will achieve or maintain a competitive
position or that other technological developments will not cause L.A.M.'s
proprietary technologies to become uneconomical or obsolete. The biomedical
field in which L.A.M. is involved is undergoing rapid and significant
technological change. The successful development of therapeutic agents and
products will depend on L.A.M.'s ability to be in the technological forefront of
this field. There can be no assurance that L.A.M. will achieve or maintain a
competitive position or that other technological developments will not cause
L.A.M.'s proprietary technologies to become uneconomical or obsolete.

L.A.M.'s patents might not protect L.A.M.'s technology from competitors. Certain
aspects of L.A.M.'s technologies are covered by U.S. patents. In addition,
L.A.M. has a number of patent applications pending. There is no assurance that
the applications still pending or which may be filed in the future will result
in the issuance of any patents. Furthermore, there is no assurance as to the
breadth and degree of protection any issued patents might afford L.A.M. Disputes
may arise between L.A.M. and others as to the scope, validity and ownership
rights of these or other patents. Any defense of the patents could prove costly
and time consuming and there can be no assurance that L.A.M. will be in a
position, or will deem it advisable, to carry on such a defense. Other private

and public concerns may have filed applications for, or may have been issued,
patents and are expected to obtain additional patents and other proprietary
rights to technology potentially useful or necessary to L.A.M. The scope and
validity of such patents, if any, are presently unknown. Also, as far as L.A.M.
relies upon unpatented proprietary technology, there is no assurance that others
may not acquire or independently develop the same or similar technology.

L.A.M. has a history of losses and may never be profitable. L.A.M. has never
earned a profit. As of September 30, 2002 L.A.M.'s accumulated deficit was
approximately $(22,940,000). L.A.M. expects to incur additional losses during
the forseeable future. No assurance can be given that the launch of L.A.M. IPM
Wound Gel(TM) will be successful, or that L.A.M.'s other product development
efforts will be completed, that regulatory approvals will be obtained, that they
will be manufactured and marketed successfully, or that L.A.M. will ever earn a
profit.

If L.A.M. cannot obtain additional capital, L.A.M. may have to delay or postpone
development and research expenditures which may influence L.A.M.'s ability to
produce a timely and competitive product.

This offering is being made on behalf of certain selling shareholders.
L.A.M. will not receive any proceeds from the sale of the shares offered by the
selling shareholders. Clinical and other studies necessary to obtain approval of
a new drug can be time consuming and costly. The different steps necessary to
obtain regulatory approval, especially that of the FDA, involve significant
costs. Accordingly, L.A.M. will need additional capital in order to fund the
costs of future clinical trials, related research, and general and
administrative expenses. L.A.M. may be forced to delay or postpone development
and research expenditures if L.A.M. is unable to secure adequate sources of
funds. These delays in development would have an adverse effect on L.A.M.'s
ability to produce timely and competitive products. There can be no assurance
that L.A.M. will be able to obtain the funding which it will require.

L.A.M. may sell shares of its common stock in the future and these sales may
dilute the interests of other security holders and depress the price of L.A.M.'s
common stock.

As of January 31, 2003, L.A.M had 29,447,092 outstanding shares of common
stock. As of January 31, 2003, there were outstanding options, warrants and
convertible notes which would allow the holders of these securities to purchase
approximately 18,011,564 additional shares of L.A.M.'s common stock. L.A.M. may
also issue additional shares for various reasons and may grant additional stock
options to its employees, officers, directors and third parties. See "
Comparative Share Data".

The issuance or even the potential issuance of shares upon the exercise of
warrants or options, or upon the conversion of promissory notes, or in
connection with any other financing will have a dilutive impact on L.A.M.'s
other stockholders and could have a negative effect on the market price of
L.A.M.'s common stock.

As L.A.M. issues shares of its common stock as a result of the exercise of
options or warrants or upon the conversion of promissory notes, the price of
L.A.M.'s common stock may decrease due to the additional shares in the market.

Any decline in the price of L.A.M.'s common stock may encourage short sales,
which could place further downward pressure on the price of L.A.M.'s common
stock.

There is, at present, only a limited market for L.A.M.'s common stock and there
is no assurance that this market will continue.

L.A.M.'s common stock is traded on the OTC Bulletin Board. Trades of
L.A.M.'s common stock are subject to Rule 15g-9 of the Securities and Exchange
Commission, which rule imposes certain requirements on broker/dealers who sell
securities subject to the rule to persons other than established customers and
accredited investors. For transactions covered by the rule, brokers/dealers must
make a special suitability determination for purchasers of the securities and
receive the purchaser's written agreement to the transaction prior to sale. The
Securities and Exchange Commission also has rules that regulate broker/dealer
practices in connection with transactions in "penny stocks". Penny stocks
generally are equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system, provided that current price and volume information with respect
to transactions in that security is provided by the exchange or system). The
penny stock rules require a broker/ dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker/dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker/dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. These disclosure requirements have the effect
of reducing the level of trading activity in the secondary market for L.A.M.'s
common stock. As a result of these rules, investors may find it difficult to
sell their shares.

COMPARATIVE SHARE DATA

Number of Note
Shares Reference

Shares offered by this prospectus by the
selling shareholders: 1,742,242 A

As of January 31, 2003, L.A.M. had 29,447,092 outstanding shares of common
stock. The number of shares outstanding as of January 31, 2003 excludes shares
which may be issued upon the conversion of promissory notes or the exercise of
options and warrants issued by L.A.M. See the table below for further
information.

The issuance of additional shares and the eligibility of issued shares for
resale will dilute L.A.M.'s common stock and may lower the price of L.A.M.'s
common stock. Investors in this offering will suffer immediate dilution since
the price paid for the securities offered will likely be more then the net

tangible book value of L.A.M.'s common stock. Net tangible book value is
calculated by dividing L.A.M.'s total assets, less intangible assets and
liabilities, and dividing it by the number of outstanding shares of common
stock. The actual dilution to investors in this offering will depend on the
price which they pay for the shares.

Other Shares Which May Be Issued:

The following table lists additional shares of L.A.M.'s common stock which
may be issued as the result of the conversion of promissory notes or the
exercise of outstanding options or warrants:
Number of Note
Shares Reference

Shares issuable upon conversion of promissory notes 681,630 B

Shares issuable upon exercise of Series A, B, C
and D warrants held by selling shareholders 3,468,340 B

Shares issuable upon exercise of options and 12,923,121 C
warrants granted to L.A.M.'s officers, directors,
employees, private investors, and financial
consultants.

Shares issuable upon the exercise of warrants
which were issued as part of the Equity Line
of Credit 938,473 D

A. See the section of this prospectus entitled "Selling Shareholders" for
information concerning the names of the selling shareholders and the shares,
options and warrants held by the selling shareholders.

B. In November 2002, L.A.M. sold convertible notes, plus Series A, B, C and D
warrants, to a group of private investors for $700,000. The notes do not bear
interest, are unsecured and are payable on November 1, 2005. At the holder's
option the notes are convertible into shares of L.A.M.'s common stock equal in
number to the amount determined by dividing each $1,000 of note principal to be
converted by the Conversion Price. The initial Conversion Price is $0.29.

As of January 31, 2003 notes in the principal amount of $499,600 had been
converted into 1,699,320 shares of L.A.M.'s common stock. L.A.M. would be
required to issue an additional 681,630 shares of common stock if all remaining
notes were converted on January 31, 2003.

If L.A.M. sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable Conversion
Price, the Conversion Price will be lowered to the price at which the shares
were sold or the lowest price at which the securities are convertible, as the
case may be.

If L.A.M. sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable exercise
price of the Series A warrants, the exercise price of the Series A warrants will
be lowered to the price at which the shares were sold or the lowest price at
which the securities are convertible, as the case may be.

See "Description of Securities" for more information concerning the
convertible notes and the Series A, B, C and D warrants.

C. Options and warrants are exercisable at prices between $0.58 and $7.50 per
share and expire between February 2003 and June 2011.

D. On January 24, 2001, L.A.M. entered into an equity line of credit agreement
with Hockbury Limited in order to establish a possible source of funding for the
development of L.A.M.'s technology. The equity line of credit agreement
established what is sometimes also referred to as an equity drawdown facility.
On July 22, 2002 the Company terminated the equity line of credit agreement with
Hockbury Limited. As consideration for the cancellation of the agreement, the
Company repriced the warrants held by Hockbury Limted to purchase 482,893 shares
of common stock from a price of $4.56 per share to $1.35 per share. The warrants
may be exercised at any time prior to January 24, 2004. Prior to the termination
of the equity line of credit L.A.M. had received net proceeds of $971,000 from
the sale of 1,053,177 shares of common stock under the equity line.

Substantially all of the shares issuable upon the exercise of options and
warrants, and which are referred to in Notes B, C and D have been, or will be,
registered for public sale by means of separate registration statements which
have been, or will be, filed with the Securities and Exchange Commission.

Market for Common STOCK.

As of January 31, 2003, there were approximately 150 record owners of
L.A.M.'s common stock. L.A.M.'s common stock is traded on the OTC Bulletin Board
under the symbol "LAMP". Set forth below are the range of high and low bid
quotations for the periods indicated as reported by the OTC Bulletin Board. The
market quotations reflect interdealer prices, without retail mark-up, mark-down
or commissions and may not necessarily represent actual transactions. L.A.M.'s
common stock began trading in August 1999.

Quarter Ending High Low

9/30/99 $ 1.38 $0.60
12/31/99 $ 4.00 $0.88

3/31/00 $10.00 $4.00
6/30/00 $ 9.25 $4.75
9/30/00 $ 5.50 $3.50
12/31/00 $ 4.75 $2.62

3/31/01 $6.06 $1.72
6/30/01 $2.75 $0.75
9/30/01 $0.95 $0.58
12/31/01 $0.76 $0.51

3/31/02 $0.99 $0.46
6/30/02 $2.50 $0.69
9/30/02 $0.88 $0.45
12/31/02 $0.54 $0.27

Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors and, in the event of liquidation, to share
pro rata in any distribution of L.A.M.'s assets after payment of liabilities.
The Board of Directors is not obligated to declare a dividend. L.A.M. has not
paid any dividends does not have any current plans to pay any dividends.

Management's discussion and Analysis
AND plan of operation

The following sets forth certain financial data with respect to L.A.M. and
is qualified in its entirety by reference to the more detailed financial
statements and notes included elsewhere in this prospectus.

Summary Financial Data

With the exception of its IPM Wound Gel(TM), all of L.A.M.'s products are
in the development stage. As of January 31, 2003 L.A.M. has generated only
limited revenues from the sale of its IPM Wound Gel.

Results of Operations:

Income Statement Data:

Nine Months Ended Year Ended Year Ended
September 30, 2002 December 31, 2001 December 31, 2000
------------------ ----------------- -----------------

Sales $ 22,165 $ -- $ --
Licensing Revenue -- 300,000 --
Operating Expenses 2,340,975 (2,293,299) (1,926,428)
Financial Accounting
Expenses 2,407,432 (6,450,673) (2,878,841)
Interest Income -- 45,212 28,261
----------------- -------------- --------------
Net Loss $(4,726,242) $(8,398,760) $(4,777,008)
============ ============ ============

Balance Sheet Data:

September 30, 2002 December 31, 2001 December 31, 2000
------------------ ----------------- -----------------

Current Assets $ 620,030 $158,811 $2,101,706
Total Assets 1,341,636 769,318 2,457,503
Current Liabilities 714,461 601,999 1,995,734
Total Liabilities 1,085,858 1,657,396 3,459,209
Working Capital
(Deficiency) (94,431) (443,188) 105,972
Stockholders' Equity
(Deficit) 255,778 (888,078) (1,001,706)

Results of Operations

Nine months ended September 30, 2002 compared with nine months ended September
30, 2001

In August 2002, L.A.M. began commercial sales of its IPM Wound Gel(TM)
product.

During the nine months ended September 30, 2001, licensing revenue of
$300,000 was received from Ixora Biomedical Company Inc. ("Ixora") under the
terms of their license agreement in respect of L.A.M.'s sexual dysfunctional
products. See "Business" for further information concerning L.A.M.'s agreement
with Ixora.

Research and Development Expense

Research and development expenses for the nine months ended September 30,
2002 increased 34% to $433,000 from $322,000 for the nine months ended September
30, 2001. The increase includes the scale up in production of L.A.M. IPM Wound
Gel(TM) to commercial batch quantities.

Marketing and Business Development Expense

Marketing and business development expense for the nine months ended
September 30, 2002 increased 514% to $749,000 from $122,000 for the nine months
ended September 30, 2001. The increase reflects the build up of marketing
management and resources and promotional activity in preparation for the
commercial sales of L.A.M. IPM Wound Gel(TM) and the introduction of the product
to markets outside of the U.S.

General and Administrative Expenses

General and administrative expenses for the nine months ended September
30, 2002 increased 9% to $1,155,000 from $1,059,000 for the nine months ended
September 30, 2001. The increase is attributable to increases in legal and audit
expense in connection with regulatory filings with the Securities and Exchange
Commission; insurance expense and the write off of the receivable described
below. The increase was offset by the decrease in investor relations due to the
non-recurrence of the exceptional level of activity in the previous year and the
decrease in costs incurred in 2001 to arrange the equity line of credit which
did not recur in 2002.

As of September 30, 2002 Alan Drizen, who resigned from his position as
L.A.M.'s Chief Executive Officer on November 4, 2002, owed L.A.M. $627,000,
representing the unpaid portion of the exercise price of options exercised by
Mr. Drizen. Pursuant to the terms of a pending agreement with Mr. Drizen, L.A.M.
will forgive $289,000 of the $627,000 owed by Mr. Drizen. Accordingly, as of
September 30, 2002 $289,000 of this receivable was charged to expense, leaving a
balance of $338,000 due from Mr. Drizen.

The primary components of general and administrative expenses for the nine
months ended September 30, 2002 and 2001 were as follows:

2002 2001

Officers' salaries $ 61,250 $ 86,612
Employee salaries and benefits 93,596 125,582
Investor Relations 210,101 323,050
Commissions and other costs in connection
with financings - 77,551
Financial banking and consulting 119,340 194,333
Legal and auditing (including SEC filings) 195,624 138,611
Insurance 87,823 30,025
Write-off of receivable 289,000 -
Other expenses 97,829 83,325
--------- -----------
Total $ 1,154,563 $1,059,089
=========== ==========

Year Ended December 31, 2001 compared with Year Ended December 31, 2000

Licensing Revenue

During the year ended December 31, 2001, licensing revenue of $300,000 was
received from Ixora Biomedical Company Inc. ("Ixora") under the terms of an
agreement related to L.A.M.'s sexual dysfunction products. See "Business" for
further information concerning L.A.M.'s agreement with Ixora.

Interest Expense

Interest expense for the year ended December 31, 2001 decreased 20% to
$233,000 from $292,000 for the year ended December 31, 2000 due to the
conversion of all remaining debentures during 2001.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2001
increased 9% to $1,379,000 from $1,261,000 for the year ended December 31, 2000.
The increase included costs attributable to increased investor relations
activity; costs of regulatory filings in respect of past and present options,
note conversions, share grants for services and quarterly and yearly filings as
required by the Securities and Exchange Commission; and costs attributable to
the new laboratory facility and offices in Lewiston and additions to the senior

management team, to prepare for the launch of L.A.M.'s first commercial product,
expected in mid-summer 2002. The net reduction in costs in connection with
financings was due to there being no new convertible note financings during
2001. This reduction was partly offset by the costs in that year of arranging
the equity line of credit.

The primary components of general and administrative expenses for the
years ended December 31, 2001 and 2000 were as follows:

2001 2000
---- ----

Officers' salaries $ 245,612 $ 123,000
Employee salaries and benefits 123,113 89,935
Less: Salaries classified as Research &
Development (96,000) (81,000)
Investor Relations 337,680 231,239
Commissions and other costs in connection
with financings 138,863 381,300
Financial Banking and Consulting 197,333 238,894
Legal and Auditing (including SEC filings) 276,415 181,200
Insurance 38,745 11,004
Other Expenses 117,030 85,398
------------- -----------
Total $ 1,378,791 $ 1,260,970
=========== ===========

Marketing and Business Development Expense

Marketing and business development expense for the year ended December 31,
2001 increased 260% to $202,000 from $56,000 for the year ended December 31,
2000. The increase is the result of the increasing activity in promoting L.A.M.
and its products including preparing for L.A.M.'s first commercial product
launch in mid-summer 2002.

Research and Development Expense

Research and development expenses for the year ended December 31, 2001
increased 51% to $480,000 from $317,000 for the year ended December 31, 2000.
The increase is primarily the result of increased clinical studies activity.
Costs associated with these activities tend to fluctuate from period to period
depending on the status and timing of the individual projects in process.

Share and Option Grants

L.A.M. is required to recognize non-cash expenses which represent the
deemed fair value of grants of stock options and of stock for services,
calculated in accordance with US generally accepted accounting principles. These
deemed non-cash costs, which are accounted for by correspondingly increasing the
company's paid in capital, increased to $4,266,000 for the year ended December
31, 2001 compared with $448,000 for the year ended December 31, 2000. This
increase included costs attributed to options and shares granted to consultants
and directors for services performed and in recognition of their additional
efforts now required to bring the company's first product to market; to options
granted in connection with the related strengthening of the management team; to

noteholders who converted their notes into common shares; and to other investors
for their investment support.

In addition, to compensate for the fall in L.A.M.'s share price during the
year, a number of existing options were repriced or had their maturity dates
extended. Costs attributed to these amended terms totaled $354,000 during 2001.

Conversion Premium

During the years ended December 31, 2001 and 2000, conversion premiums of
$1,057,844 and $2,395,093 respectively were charged to expense.

The charge in 2001 represented the deemed fair value of the enhanced terms
granted in August of that year to note holders who agreed to convert their
outstanding notes during the year.

The charge in 2000 related to the sale of convertible notes during that
year, and represented the difference between the deemed fair value of L.A.M.'s
common stock and the conversion price of the convertible notes sold.

The conversion premiums did not require the use of cash.

Warrants Issued on Equity Line of Credit

The expense of $1,100,000 for the year ended December 31, 2001 represents
the fair value of the warrants issued to Hockbury Limited in connection with the
equity line of credit and the warrants issued to GKN Securities as placement
agent for the equity line.

Year Ended December 31, 2000 compared with Year Ended December 31, 1999

Interest Expense

Interest expense increased 142% to $292,000 for the year ended December
31, 2000 from $121,000 for the year ended December 31, 1999. The increase is due
to the sale of convertible notes between September 1999 and November 2000.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2000
increased 255% to $1,261,000 from $356,000 for the year ended December 31, 1999.
The increase is primarily a result of sales commissions paid in connection with
the sale of L.A.M.'s convertible notes, additional administrative personnel and
increased legal expenses.

The primary components of general and administrative expenses for the
years ended December 31, 2000 and 1999 were as follows:

2000 1999
---- ----

Officers' salaries $ 123,000 $ 50,000
Employee salaries and benefits 89,935 16,336
Less: Salaries classified as
Research & Development (81,000) (0)
Investor Relations 231,239 91,941
Commissions and other costs in
Connection with financings 381,300 27,471
Financial Banking and Consulting 238,894 42,876
Legal and Auditing (including SEC filings) 181,200 95,091
Insurance 11,004 11,178
Other Expenses 85,398 20,682
------------ -----------
Total $ 1,260,970 $ 355,575
=========== =========

Marketing and Business Development Expense

Marketing and business development expense for the year ended December 31,
2000 increased 132% to $56,000 from $24,000 for the year ended December 31,
1999. The increase is the result of the increasing activity in promoting L.A.M.
and its products.

Research and Development Expense

Research and development expenses for the year ended December 31, 2000
increased 71% to $317,000 from $185,000 for the year ended December 31, 1999.
The increase is primarily due to the start of clinical trials in Toronto, Canada
as well as deferred compensation paid to L.A.M.'s president. The clinical trials
pertain to L.A.M.'s arthritic pain drug.

Conversion Premium

During the years ended December 31, 2000 and 1999 conversion premiums of
$2,395,093 and $1,252,000, respectively, relating to the sale of convertible
notes were charged to expense. The conversion premium represents the difference
between the fair value of L.A.M.'s common stock and the conversion price of the
convertible notes sold during the year.

The conversion premium did not require the use of cash.

Liquidity and Sources of Capital

Nine Months Ended September 30, 2002

L.A.M's primary source of liquidity was cash and cash equivalents as of
September 30, 2002 of approximately $103,000, compared with approximately
$11,000 at December 31, 2001. Working capital (deficiency) improved from
approximately $(443,000) as of December 31, 2001 to $(94,000) as of September
30, 2002.

L.A.M.'s operations used approximately $2,574,000 in cash during the nine
months ended September 30, 2002.

During this period L.A.M. also spent $156,000 for patents, trademarks, and
equipment purchases.

Cash required during the nine months ended September 30, 2002 came
principally from proceeds from the exercise of stock options ($1,357,000) and
from the sale of shares under the equity line of credit agreement ($487,000).

On January 24, 2001, L.A.M. entered into an equity line of credit
agreement, or equity drawdown facility, with Hockbury Limited in order to
establish a source of funding for the development of L.A.M.'s technology.

Under the equity line of credit agreement, Hockbury Limited agreed to
provide L.A.M. with up to $20,000,000 of funding. L.A.M. could request a
drawdown under the equity line of credit by selling shares of its common stock
to Hockbury Limited, and Hockbury Limited was obligated to purchase the shares.

On July 22, 2002 L.A.M. terminated the equity line of credit agreement
with Hockbury Limited. As consideration for the cancellation of the agreement,
L.A.M. repriced the warrants held by Hockbury Limited to purchase 482,893 shares
of common stock from a price of $4.56 per share to $1.35 per share. The warrants
may be exercised at any time prior to January 24, 2004. Prior to the termination
of the equity line of credit L.A.M. had received net proceeds of $971,000 from
the sale of 1,053,177 shares of common stock under the equity line.

See "Management - Certain Relationships and Transactions" for information
concerning the settlement of receivables owed to L.A.M. by a former officer of
the Company.

In November 2002, L.A.M. sold convertible notes, plus Series A, B, C and D
warrants, to two private investors for $700,000. See "Description of Securities"
for information concerning this transaction.

Year Ended December 31, 2001

L.A.M.'s primary source of liquidity as of December 31, 2001 was cash and
cash equivalents of $11,284. Working capital, exclusive of convertible
debentures converted, decreased from approximately $1,775,000 as of December 31,
2000 to $(443,000) as of December 31, 2001.

L.A.M.'s operations used approximately $1,713,000 in cash during the year
ended December 31, 2001. This was offset by decreases in accounts receivable and
inventory and an increase in accounts payable and accrued expenses in the amount
of $258,000, which provided cash.

During this period, L.A.M. also spent $282,000 for patents, trademarks,
and equipment purchases.

L.A.M. redeemed all of the remaining debentures during 2001, $108,500 of
which was repaid in cash. In addition, during 2001, L.A.M. advanced $1,075,000
in short-term loans to an officer and director of L.A.M. The amounts borrowed by
the officer and director were used to purchase shares of L.A.M.'s common stock
in an effort to stabilize L.A.M.'s stock price in the face of extensive short
selling. $435,000 of these advances were repaid during 2001.

Cash required during the year ended December 31, 2001 came from the use of
existing cash balances, the exercise of stock options amounting to $112,000 and
proceeds from the sale of shares under the Equity Line of Credit Agreement
amounting to $484,000.

L.A.M. issued 439,021 shares of common stock and received $483,636 in net
proceeds during the year ended December 31, 2001 under the equity line of credit
agreement. In July 2002 L.A.M. terminated the equity line of credit.

Year Ended December 31, 2000

L.A.M.'s operations and an increase in inventories used approximately
$1,760,000 in cash during the year ended December 31, 2000. This was offset by a
decrease in notes receivable and an increase in accounts payable and accrued
expenses in the amount of $201,000, which provided cash.

During this period, L.A.M. also spent $155,000 for patents, trademarks,
and equipment purchases.

Cash required during the year ended December 31, 2000 was generated
through sales of convertible debentures amounting to $2,466,000 and the exercise
of stock options amounting to $189,000.

Plan of Operation

During the twelve months ending December 31, 2003 L.A.M. plans to:

o Continue to build market awareness of L.A.M.'s IPM Wound Gel(TM).

o Continue its program to develop and commercialize other products based on
its wound healing technology

o Continue to develop its motion sickness patch systems in cooperation with
major multinational partners

o Continue to seek and develop strategic relationships with companies
interested in using the L.A.M. Ionic Polymer Matrix(TM) technology in
conjunction with existing and future OTC and cosmetic products.

During this period, L.A.M. expects that it will spend between $600,000 and
$800,000 on research, development, and clinical studies relating to the L.A.M.
Ionic Polymer Matrix(TM) technology, and $900,000 to $1,100,000 on marketing and
business development, in particular with respect to its IPM Wound Gel(TM).
L.A.M. plans to use its existing financial resources as well as revenues from
the sale of its IPM Wound Gel(TM) to fund its capital requirements during this
period. It should be noted that substantial funds may be needed for more
extensive research and clinical studies before L.A.M. will be able to sell other
products on a commercial basis.

Other than funding requirements relating to the marketing of its IPM Wound
Gel(TM), for its research and development activities in respect of its L.A.M.
Ionic Polymer Matrix(TM) technology and for general operating losses, L.A.M.
does not have any material capital commitments.

Due to the previous lack of any significant revenues, to date L.A.M. has
relied upon proceeds realized from the public and private sale of its common
stock and convertible debentures to meet its funding requirements. Funds raised
by L.A.M. have been expended primarily in connection with research, development,
clinical studies and administrative costs. Until significant revenues commence
from the commercial sale of its products, L.A.M. will be required to fund its
operations through the sale of securities, debt financing or other arrangements.
However, there can be no assurance that such financing will be available or be
available on favorable terms.

BUSINESS

L.A.M. Pharmaceutical, Corp. was incorporated in Delaware in July 1998. In
September 1998, L.A.M. acquired all of the issued and outstanding shares of LAM
Pharmaceuticals LLC for 6,000,000 shares of L.A.M.'s common stock. LAM
Pharmaceuticals LLC was organized in Florida in 1994 (initially as a
partnership) to commercialize a new drug delivery system which offers patients,
among other benefits, safer and more effective treatment for a number of serious
diseases. Unless otherwise indicated, all references to L.A.M. include LAM
Pharmaceuticals LLC.

offers potential benefits by providing faster and more prolonged therapeutic
activity, less intrusive and less painful methods of delivery and a faster onset
of therapeutic activity.

In order to fully understand and appreciate the significance and
effectiveness of L.A.M.'s drug delivery technology it is important to understand
how various drug-based formulations are applied to the skin and the ways that
substances applied to the skin are absorbed by the skin and other structures of
the body.

For many years, lotions, creams, suspensions and solutions of various
natural (herbal) and therapeutic (drug) substances have been applied to the
skin. When it comes to treating pain, sexual dysfunction and other disease
states which emanate from structures of the body below the skin, topical therapy
is not effective unless the therapeutic agent can penetrate the outer layer of
the skin (stratum corneum) which acts as a protective barrier. This layer
consists of numerous dead cells and cells in transition, which collectively form
an effective barrier to penetration of substances, such as bacteria, in the air
or in water. Thus the stratum corneum plays an important role in protecting the
body from invasion by harmful substances.

It is this same protective role which has posed a major challenge over the
years regarding devising a mechanism that can effectively penetrate the stratum
corneum for the purpose of delivering therapeutic substances to structures deep
within the body.

In 1994, L.A.M.'s scientists discovered that certain molecules called
polymers were found to possess strong electrical charges which, when combined
with other polymers of a specific electrical charge, are able to effectively
penetrate the outer layers of the skin. In addition, these molecules are able to
attach or surround other molecules such as therapeutic drug molecules and carry
them within a matrix through the outer layers of the skin into the deeper
structures below. L.A.M.'s scientists recognized that these discoveries would be
of great significance to the delivery of therapeutic agents. This phenomenon,
which is the basis for the L.A.M. Ionic Polymer Matrix(TM) (L.A.M. IPM(TM))
delivery system, is covered by thirteen U.S. patents which are owned by L.A.M.

The L.A.M. Ionic Polymer Matrix(TM) technology combines in a matrix, in a
novel manner, those drugs that are well established and generally regarded by
the public, the regulatory authorities and pharmaceutical industry as safe. When
combined with the active drug ingredient, the L.A.M. Ionic Polymer Matrix(TM)
technology allows the delivery of greater amounts of drug to the target area
than is otherwise possible. The L.A.M. Ionic Polymer Matrix(TM) technology
therefore offers potential benefits by providing faster and more prolonged
therapeutic activity, less intrusive and less painful methods of delivery and
faster onset of therapeutic activity.

L.A.M.'s products are regulated in the United States by the FDA. L.A.M's
first product, L.A.M. IPM Wound Gel(TM) falls into the hydrogel and burn
dressing group as defined by the FDA, and is therefore considered a Class I
device (pursuant to FDA ruling of November 4, 1999). Class I devices are subject
to "general controls". This is the lowest level of FDA control that focuses on
basic factors such as quality regulation.

L.A.M. is of the opinion that other products which it is developing will
be classified as cosmetics, OTC drugs, or new drugs. Products classified as
cosmetics or OTC drugs may be marketed without FDA approval. New drugs that are
not cosmetics and that are not considered an OTC drug must be approved by the
FDA prior to marketing in the United States. Before human testing can begin with
respect to a new drug in the United States preclinical studies are conducted in
laboratory animals to evaluate the potential efficacy and the safety of a
product. Human clinical studies generally involve a three-phase process. The
initial clinical evaluation, Phase I, consists of administering the product and
testing for safe and tolerable dosage levels. Phase II trials continue the
evaluation of safety and determine the appropriate dosage for the product,
identify possible side effects and risks in a larger group of subjects, and
provide preliminary indications of efficacy. Phase III trials consist of testing
for actual clinical efficacy within an expanded group of patients at
geographically dispersed test sites.

L.A.M. believes that its L.A.M. IPM(TM) technology, when used with
prescription drugs, will be regulated as an unapproved new drug and will require
approval by the FDA. Conversely, L.A.M.'s IPM technology, when used with a
cosmetic or an OTC drug, could be marketed without FDA approval.

Production scale up and manufacture of L.A.M.'s IPM Wound Gel(TM) has been
contracted to an independent FDA approved manufacturer. Sales of L.A.M.'s IPM
Wound Gel(TM) began in August 2002.

L.A.M. has developed a comprehensive marketing strategy for L.A.M. IPM
Wound Gel(TM) that covers direct sales to wound healing centers and other
specialized medical practices, Internet sales, sales through contract sales
organizations and licensing.

L.A.M. is also evaluating a limited number of IPM/drug formulations that
have shown promise during preliminary clinical investigation. L.A.M.'s preferred
course for these formulations is to negotiate licensing agreements and/or joint
ventures with larger pharmaceutical companies which have the financial resources
to fund the research and/or clinical trials necessary to complete the
development of L.A.M.'s products.

If the results of the clinical trials involving these formulations are
promising, L.A.M. may then be in a position to negotiate licenses which would
generate sufficient revenue so as to allow L.A.M. to exploit the L.A.M. IPM(TM)
technology using a variety of other drugs. It should be emphasized that a number
of risks may be associated with this approach. While preliminary results have
been promising, there is no certainty that the efficacy of the IPM/drug
formulations currently being tested will be borne out in subsequent clinical
trials. In addition, more clinical studies may be requested by a potential
licensee before it is willing to enter into an agreement.

L.A.M.'s objective is to raise sufficient capital to enable it to sustain
ongoing research, marketing and administrative overhead as well as to enable it
to undertake the work necessary to obtain FDA approval for new products, if
required, and to license the products to third parties.

The longer L.A.M. is able to fund development and the clinical trials for
its products and thereby establish their efficacy, the greater their value will
be to a potential licensee given the reduced risk of failure. Consequently, the
longer L.A.M. retains sole ownership of the products the greater will be its
bargaining position with prospective licensees and strategic alliance partners.
Indeed, the industry places incrementally larger different values on drugs as
they progress through the clinical trials required by the FDA.

L.A.M. plans to market its products in any country where a suitable market
exists and which has approved L.A.M.'s products for sale.

At the present time L.A.M. is focusing its efforts on the following
projects:

WOUND HEALING

In mid-April 2002, L.A.M.'s 510(k) Pre-Marketing Notification submission
(K020325) to the FDA for L.A.M. IPM Wound Gel(TM) was approved. This approval
gives the Company the ability to market L.A.M. IPM Wound Gel(TM) as a Class 1
OTC device, while also acting as a platform to enable the Company to market the
product internationally.

L.A.M. IPM Wound Gel(TM) is designed to deliver high concentrations of
sodium Hyaluronate to an ulcer bed, providing an optimal environment for wound
healing. L.A.M. IPM Wound Gel(TM) takes full advantage of the proprietary L.A.M.
Ionic Polymer Matrix(TM) technology to saturate an ulcer bed with the L.A.M.
IPM(TM) active ingredient, hyaluronic acid, a highly purified derivative of
sodium Hyaluronate, derived from avian sources.

QST Consultations Ltd., an independent consulting firm based in Allendale,
Michigan, reported very positive results of L.A.M.'s clinical trials in the
treatment of hard to heal skin ulcers. By the end of the study, 47 of the 53
ulcers (89%) reported in the study, had healed within twenty-five weeks of
applying L.A.M. IPM Wound Gel(TM). The mean time to healing was 12 weeks and the
median time was 8.2 weeks.

Because of poor circulation, diabetics are prone to the development of
severe and hard to treat ulcers in the extremities, particularly in the area of
the lower legs. Based on review of the data, L.A.M. has contracted DPT

Laboratories in San Antonio, Texas to initially produce commercial quantity
batches of L.A.M. IPM Wound Gel(TM). L.A.M. is expected to accelerate its
wound-healing product for the purpose of slow healing diabetic ulcers, which
have not responded to previous treatment.

As a derivative of L.A.M. IPM Wound Gel(TM), L.A.M. is also developing a
wound healing matrix designed to be used on incisions following surgical
procedures. One of the most common post-surgical complications is the
development of scar tissue, in tissue sutured or stapled following surgery.
Adhesions often form and result in a painful condition, which sometimes requires
surgical treatment. The availability of a product which could reduce such
complications will reduce the cost of post-operative care significantly. L.A.M.
believes its wound healing matrix has potential as an effective post-operative
treatment for the prevention of adhesions and scar tissue following surgery.

SEXUAL DYSFUNCTION

L.A.M.'s Personal Female Lubricant (Sexual Dysfunction) Matrix is a highly
viscoelastic (lubricating) liquid incorporating proprietary L.A.M. IPM(TM)
technology. The matrix provides enhanced lubrication while Vitamin B3 (Niacin),
encapsulated in the technology, stimulates the tissues of the female genitalia.
Vitamin B3 has long been associated with a process known as "flushing", whereby
the blood supply in the stimulated area is increased.

The L.A.M. IPM(TM) - Personal Female Lubricant (Sexual Dysfunction) Matrix
is designed primarily to address the problems of mature women who often
experience post-menopausal problems that may inhibit their intimate
relationships. Specifically, the matrix acts to either eliminate or at least
substantially minimize post-menopausal symptoms including vaginal dryness, pain
during intercourse and absence of feeling or sensation.

L.A.M. IPM(TM) - Personal Female Lubricant (Sexual Dysfunction) Matrix is
not classified as a drug. The product uses substances which have been approved
by the regulatory authorities for many applications. Vitamin B3, for example,
forms a part of B Complex taken orally as a daily supplement by millions of
people worldwide. The phenomenon of flushing is not only harmless, but has been
declared by several regulatory authorities as beneficial. Consequently, L.A.M.
believes that FDA approvals are not required for this product. L.A.M. will
ensure, however, that the matrix is manufactured to Good Manufacturing Standards
and that the product is safe and performs to its specifications.

Licensing of Sexual Dysfunction Products

In December 1997, L.A.M. granted an exclusive worldwide license to Ixora
Bio-Medical Co. ("Ixora") for the marketing, sale and distribution of certain of
its transdermal drugs for the treatment of sexual dysfunction. L.A.M. has
received licensing payments of $500,000 from Ixora. Ixora is required to
reimburse L.A.M. for all costs of clinical studies and related research required
by the FDA or other government agencies as well as patent procurement and
maintenance costs, provided however that after January 1, 2000 Ixora is not,
without its consent, obligated to reimburse L.A.M. for costs in excess of
$10,000 per quarter. L.A.M. will receive the following royalties on sales by
Ixora:

o 9% of all Net Sales of licensed products approved by the FDA and for
which the patent rights have not expired.

o 6.5% of all Net Sales of all licensed products which did not require
FDA approval and for which the patent rights have not expired.

o 4.5% of all Net Sales of all licensed products for which the patent
rights have expired or have been held to be invalid.

For purposes of the license agreement the term "Net Sales" means gross
sales less advertising/promotion expenses not exceeding 8% of gross
sales and sales taxes.

In January 1998, L.A.M. acquired a 45% interest in Ixora for $207,360. As a
result of subsequent sales by Ixora of its common stock to other persons,
L.A.M., as of November 15, 2002, owned 18% of Ixora's common stock.

EXTREME DRY SKIN

L.A.M.'s IPM matrix spreads easily over large areas of skin, making it
ideal for use as a cosmetic in various applications to the skin. Cosmetics are a
multi-billion dollar a year industry that do not require approval before
marketing, although cosmetics must be safe, contain appropriate cosmetic
ingredients and be labeled properly. Various uses for L.A.M.'s product include
controlling body odors, relief of dryness, and for moisturization. For example,
the IPM matrix could be used as a lubricant, to replenish moisture and general
skin conditioning, particularly because it is non-staining and non-irritating.
When used with a fragrance, it could control odor. When combined with certain
over-the-counter (OTC) drugs, L.A.M.'s IPM-drug matrix could be marketed as a
cosmetic.

Certain products marketed in the United States are considered cosmetics
and OTC drugs because they make cosmetic claims as well as therapeutic claims
and are intended to treat or prevent disease. Examples of such products include,
but are not limited to, anti-dandruff shampoos; sunscreens; make-ups,
moisturizers and skin care products that bear sunscreen, skin protectant or acne
claims; products that make breath-freshening or whitening claims;
antiperspirants that bear deodorant claims; and anti-microbial soaps. These
products must comply with the FDA requirements for both cosmetics and OTC drugs.

As a cosmeceutical, a combination of an OTC drug and a cosmetic product,
the IPM matrix can be used for a variety of topical and other uses. These
include use with certain antibiotic first aid products, antifungal drugs,
dandruff, dermatitis and psoriasis control products, external analgesics, skin
protectant-type products, such as for poison ivy and fever blisters and cold
sores, first aid antiseptics, and anorectal products. Preliminary skin care
trials have been successfully completed on approximately twenty patients in the
Redding, California area by a cutaneous surgeon and dermatologist. Since L.A.M.
is of the opinion that its skin care products will be classified as a cosmetic
or an OTC drug, these skin care trials are being conducted without FDA approval.

GOVERNMENT REGULATION

L.A.M.'s drug and cosmetic products are regulated in the United States
under the Federal Food, Drug and Cosmetic Act (FD&C Act), the Public Health
Service Act, and the laws of certain states. The FDA exercises significant
regulatory control over drugs manufactured and/or sold in the United States,
including those that are unapproved.

Federal laws such as the FD&C Act cover the testing, manufacture,
distribution, marketing, labeling, advertising (for prescription drugs), of all
new drugs. Drug registration and listing requirements also exist.

L.A.M. is of the opinion that the products being developed by L.A.M. will
be subject to one or more of the following FDA classifications:

Cosmetics

Cosmetics are generally the least regulated by the FDA compared to other
products subject to the FD&C Act. The legal distinction between cosmetics and
drugs is typically based on the intended use of the product, which is normally
discerned from its label or labeling. Cosmetic products are those intended for
"cleansing, beautifying, promoting attractiveness, or altering appearance"
whereas drugs are those intended for "diagnosis, cure, mitigation, treatment, or
prevention of disease", or that "affect the structure or any function of the
body".

A claim suggesting that a product affects the body in some "physiological"
way usually renders the product a drug - even if the effect is temporary. A
claim that the product penetrates and affects layers beneath the skin's surface
most likely would be viewed by the FDA as a drug claim. However, claims that a
product affects appearance through a "physical" effect are generally considered
cosmetic claims. The FDA's rationale for this distinction is that a claim of a
physiological effect is a claim that the product "affects" the structure or
function of the body, which is one element of the statutory definition of a
drug. A claim indicating that a product's effects are on the surface of the skin
can be a cosmetic claim.

Although cosmetics may be marketed without FDA approval, in order to be
marketed lawfully as a cosmetic, the product must be properly labeled and each
ingredient and each finished cosmetic product must be adequately substantiated
for safety prior to marketing.

Products which are not cosmetics, and which are marketed in the United
States, must either comply with specified OTC drug regulations (monographs) or
be specifically approved through the New Drug Application (NDA) or biologic
licensure process.

OTC Drugs

OTC drugs generally are defined as those drug products that can be used
safely and effectively by the general public without seeking treatment by a
physician or other health care professional. Thus, they do not require a
prescription by a health care professional and are available at retail
establishments. An OTC drug may be marketed without FDA approval if it conforms
to a particular product monograph as described below and otherwise meets the
requirements of the FD&C Act.

OTC monographs list active ingredients, their dosage levels, and uses
(claims) for which OTC drug products are considered generally recognized as safe
and effective for specific use and are not misbranded. If a particular level of
an active ingredient and claim are allowed by a monograph, then a manufacturer
may market a product containing that ingredient and bearing that claim without
specific FDA approval, subject to compliance with other requirements of the
monographs and FD&C Act, including drug registration and listing obligations.
Aspirin is a common drug allowed by a monograph.

If a drug product does not conform to a particular OTC monograph, then
typically a New Drug Application must be reviewed and approved by the FDA prior
to marketing. Unlike prescription drugs, OTC drugs must bear adequate directions
for safe and effective use and warnings against misuse.

New Drug Applications and Biologic License Applications

New drugs and products that are not cosmetics or devices and that are not
covered by an OTC monograph must be approved by the FDA prior to marketing in
the United States. Pre-clinical testing programs on animals, followed by three
phases of clinical testing on humans, are typically required by the FDA in order
to establish product safety and efficacy. L.A.M. believes that its L.A.M.
IPM(TM) technology, when used with approved or unapproved prescription drugs or
biologics, will be regulated as an unapproved new drug or unapproved biologic
and will require approval by the FDA.

It is also possible that the L.A.M. IPM(TM) technology may be regulated as
a combination drug and medical device, in which case it would be subject both to
medical device and drug regulation.

Medical device regulation is based on classification of the device into
three classes, I, II, or III. Class III medical devices are regulated much like
drugs, whereas Class I and II devices are subject to abbreviated clearance
procedures. It is also possible that the use of the L.A.M. IPM(TM) technology
with a monographed OTC drug could render the product an unapproved new drug,

which would mean that the product is subject to new drug application approval
requirements before marketing.

The FDA may choose to regulate certain uses of the L.A.M. IPM(TM)
technology as a medical device if it determines that the mechanism by which the
L.A.M. IPM(TM) technology exerts its effects meets the definitional requirements
of a medical device. A medical device is a product that, among other
requirements, does not achieve its primary intended purposes through chemical
action within or on the human body and is not dependent upon being metabolized
for the achievement of its primary intended purposes. Although L.A.M. expects
that most uses of the L.A.M. IPM(TM) technology will be regulated as a drug,
which is in essence a product that usually achieves its effects by chemical
action or physiological action in or on the body, to the extent that the L.A.M.
IPM(TM) technology is used to deliver pharmaceutically active ingredients, it
can be subject to both medical device and drug regulation.

The first stage of evaluation, pre-clinical testing, must be conducted in
animals. After safety has been demonstrated, the test results are submitted to
the FDA (or a state regulatory agency) along with a request for authorization to
conduct clinical testing, which includes the protocol that will be followed in
the initial human clinical evaluation. If the applicable regulatory authority
does not object to the proposed study, the investigator can proceed with Phase I
trials. Phase I trials consist of pharmacological studies on a relatively few
number of human subjects under rigidly controlled conditions in order to
establish lack of toxicity and a safe dosage range.

After Phase I testing is completed, one or more Phase II trials are
conducted in a limited number of patients to continue to test the product's
safety and also its efficacy, i.e. its ability to treat or prevent a specific
disease. If the results appear to warrant further studies, the data are
submitted to the applicable regulatory authority along with the protocol for a
Phase III trial. Phase III trials consist of extensive studies in large
populations designed to assess the safety of the product and the most desirable
dosage in the treatment or prevention of a specific disease. The results of the
clinical trials for a new drug are submitted to the FDA as part of a New Drug
Application ("NDA").

Biological drugs, such as vaccines, are subject to Biologics License
Applications (BLAs), not NDAs as are other drugs. They must be safe, pure and
potent. Generic competition does not exist for biologics, as it does for other
drugs. Biological drugs are generally subject to the same testing,
manufacturing, distribution, marketing, labeling, advertising and other
requirements for other drugs.

To the extent all or a portion of the manufacturing process for a product
is handled by an entity other than L.A.M., the manufacturing entity is subject
to inspections by the FDA and by other Federal, state and local agencies and
must comply with FDA Good Manufacturing Practices ("GMP") requirements. In
complying with GMP regulations, manufacturers must continue to expend time,
money and effort in the area of production, quality control and quality
assurance to ensure full compliance.

L.A.M. may undertake extensive and costly clinical testing to assess the
safety and efficacy of its potential drug delivery systems. Failure to comply
with FDA regulations applicable to such testing can result in delay, suspension
or cancellation of testing, and refusal by the FDA to accept the results of the
testing. In addition, the FDA may suspend clinical studies at any time if it
concludes that the subjects or patients participating in trials are being
exposed to unacceptable health risks. Further there can be no assurance that
human clinical testing will show any of L.A.M.'s drug delivery systems to be
safe and effective or that data derived from any testing will be suitable for
submission to the FDA.

The processes required by European regulatory authorities before L.A.M.'s
systems can be marketed in Western Europe are similar to those in the United
States. First, appropriate pre-clinical laboratory and animal tests must be
done, followed by submission of a clinical trial exemption or similar
documentation before human clinical studies can be initiated. Upon completion of
adequate and well controlled clinical studies in humans that establish that the
drug is safe and efficacious, regulatory approval of a Market Authorization
Application must be obtained from the relevant regulatory authorities. As with
the FDA review process, there are numerous risks associated with the Market
Authorization Application review. Additional data may be requested by the
regulatory agency reviewing the Market Authorization Application to demonstrate
the contribution of a product component to the clinical safety and efficacy of a
product, or to confirm the comparable performance of materials produced by a
changed manufacturing process or at a changed manufacturing site.

The process of biologic and new drug development and regulatory approval
or licensure requires substantial resources and many years. There can be no
assurance that regulatory approval will ever be obtained for products developed
by L.A.M. Authorization for testing, approval for marketing of drugs, including
biologics, by regulatory authorities of most foreign countries must also be
obtained prior to initiation of clinical studies and marketing in those
countries. The approval process varies from country to country and the time
period required in each foreign country to obtain approval may be longer or
shorter than that required for regulatory approval in the United States.

There are no assurances that clinical trials conducted in foreign
countries will be accepted by the FDA for approval in the United States. Product
approval or licensure in a foreign country does not mean that the product will
be approved or licensed by the FDA and there are no assurances that L.A.M. will
receive any approval or license by the FDA or any other governmental entity for
the marketing of a drug product. Likewise product approval by the FDA does not
mean that the product will be approved or licensed by any foreign country.

Product Status

L.A.M. has completed the development of its IPM Wound Gel(TM) and obtained
approval (number K020325) from the FDA on April 15, 2002 to market the product.
L.A.M. began commercial sales of this product in August 2002.

All of L.A.M.'s other products are in various stages of development and
testing and the commercial sale of any of these products may not occur until
2003 at the earliest. As a result, L.A.M. expects to incur significant product

development costs for the foreseeable future. L.A.M.'s estimates of the costs
associated with future research and clinical studies may be substantially lower
than the actual costs of these activities. If L.A.M.'s cost estimates are
incorrect, L.A.M. will need additional funding for its research efforts. There
can be no assurance that L.A.M.'s other products will prove to have any
therapeutic or other value.

The following is a summary of the status of the products which are being
developed by L.A.M.:

Projected Cost Projected Date
Anticipated FDA Needed to Complete of Completion
Product Name Classification Studies/Trials of Studies/Trials

Wound Healing Cosmetic/OTC Drug $1,000,000(1) Completed
Female Sexual
Dysfunction Cosmetic/OTC Drug $1,500,000 Dec. 2003 (2)
Extreme Dry Skin Cosmetic/OTC Drug $1,500,000 (3)

(1) Projected costs associated with the wound healing product include costs
for scaling up production.

(2) L.A.M. has licensed this product to Ixora. Pursuant to the terms of the
Licensing Agreement, Ixora is responsible for all the costs required to
obtain regulatory approval of this product.

(3) Beginning in the second quarter of 2003 L.A.M. plans an aggressive
sampling program for its Extreme Dry Skin product with consumers, doctors
and skin care professionals.

Research and Development

As part of its ongoing research and development program, L.A.M. intends to
develop and commercialize as many products as possible based on its L.A.M.
IPM(TM) technology. L.A.M.'s long-range goal is to exploit other uses of its
matrix drug delivery system to improve the therapeutic effects of various drugs.

During the years ended December 31, 1999, 2000 and 2001 L.A.M. spent
approximately $185,000, $317,000, and $480,000 respectively on research and
development. L.A.M.'s research and development expenditures do not include
research and development expenses relating to L.A.M.'s Sexual Dysfunction Drug
which were paid by Ixora.

Patents and Trademarks

As of January 31, 2003, L.A.M. owned thirteen U.S. patents, three foreign
patents, five U.S. patent applications and numerous international patent
applications designating over 100 foreign countries with claims relating to its
sustained release delivery matrix system, systems containing drug preparations,
uses of the systems for various treatment therapies and addiction therapeutic
program.

L.A.M.'s patents will expire between 2015 and 2018.

Employees

As of January 31, 2003, L.A.M. had nine full time employees and one part
time employee.

offices and facilities

In the fourth quarter of 2001, L.A.M. consolidated its research, pilot
production and head office activities into its 3,500 square foot facility in
Lewiston, New York. This facility is leased at a rate of $1,700 per month. The
lease on this space expires in 2003.

L.A.M. continues to maintain a business office at 800 Sheppard Avenue
West, Commercial Unit 1, Toronto, Ontario, Canada. L.A.M. has leased this space
at $4,675 per month until August 31, 2004.

Management

Name Age Position

Joseph T. Slechta 53 President, Chief Executive Officer,
Chief Operating Officer and Director
Peter Rothbart, M.D. 64 Treasurer and Director
Gary M. Nath 58 Secretary and Director
Richard Brokenshire 52 Vice President of Sales and Marketing

Joseph T. Slechta has been L.A.M.'s Chief Operating Officer since November
2000. Mr. Slechta was appointed a director and became L.A.M.'s President on May
11, 2001. Mr. Slechta became L.A.M.'s Chief Executive Officer in November 2002.
Between November 1998 and November 2000, Mr. Slechta was a consultant to L.A.M.
Between 1994 and 2000 Mr. Slechta assisted corporate clients in financing,
reorganization, expansion and improving operations. From 1987 to 1992, Mr.
Slechta held executive management positions with three Canadian corporations.
His corporate assignments included the management and financing of a
high-technology company, the reorganization and sale of a helicopter company and
financial consulting services to a major Canadian life insurance company. From
1979 to 1986 Mr. Slechta managed the treasury operations of Continental Bank.

Peter Rothbart, M.D., Medical Director, has been a director and Treasurer
of L.A.M. since its inception. He has been a consulting anesthetist for over 20
years and is a leading pain specialist and principal of the Rothbart Pain
Management Clinic in Ontario, Canada. Dr. Rothbart is currently President of the
North American Cervicogenic Headache Society, an association of specialists in
the treatment of cervicogenic headaches. He was also recently elected Chair of
the Chronic Pain Section of the Ontario Medical Association. In collaboration
with Alan Drizen, Dr. Rothbart discovered the IPM delivery system.

Gary M. Nath has been Secretary and a director of L.A.M. since its
inception. He has a BS degree in Biology and Chemistry, two years of
post-graduate work in Biochemistry and a law degree. Mr. Nath has worked in the
patent and trademark law departments of FMC Corporation, NL Industries, and
Warner Lambert Company in the capacities of patent attorney, group patent and
trademark counsel and general patent counsel, respectively. Mr. Nath is the
founding and managing partner of the intellectual property law firm Nath &
Associates located in Washington, DC. He counsels a wide range of domestic and
international clients across a broad range of technologies, including chemical,
pharmaceutical, biotechnical and mechanical fields. He has published extensively
and has spoken on intellectual property law procurement, enforcement and
transfer before numerous professional and lay groups in the United States and
Japan. He is a member of the American Bar Association, the New Jersey Bar
Association, the American Intellectual Property Law Association, the
International Patent Association, the Association of University Technology
Managers, and is admitted to practice before the U.S. Patent and Trademark
Office, Canadian Patent Office and numerous courts around the United States.

Richard Brokenshire has been L.A.M.'s Vice President of Sales and
Marketing since November 2002. Mr. Brokenshire has over 20 years of healthcare
and marketing experience in senior management positions, with experience in
product introduction. Mr. Brokenshire has held the positions of Director of U.S.
Sales for St. Jude Medical, Vice President of U.S. Sales for Randi Medical and
Vice President of Global Sales for the Sherwood Division of American Home
Products.

Key Employee

Elena Milantoni (age 33) has been L.A.M.'s Director of Finance and
Administration since June 2002. Ms. Milantoni has a BAS degree in accounting and
is a Chartered Accountant. Ms. Milantoni has over 10 years experience in public
accounting and industry for both bio-tech and hi-tech companies.

Management Changes

In November 2002 Alan Drizen resigned as L.A.M.'s Chief Executive Officer.
Joseph Slechta, L.A.M.'s President, was appointed L.A.M.'s Chief Executive
Officer by the Board of Directors to fill the vacant position. Mr. Drizen
resigned a director of L.A.M. in December 2002.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires directors,
executive officers and 10% or greater shareholders of L.A.M. to file with the
Securities and Exchange Commission initial reports of ownership (Form 3) and
reports of changes in ownership of equity securities of L.A.M. (Form 4 and Form
5) and to provide copies of all such forms as filed to L.A.M. To L.A.M.'s
knowledge, the following persons did not file all reports required by Section
16(a) during the fiscal year ended December 31, 2001.

Number of
Type Number of Transactions
Name of Report Reports Not Filed Not Reported

Peter Rothbart Form 4 8 17
Alan Drizen Form 4 17 681

Executive Compensation.

The following table sets forth in summary form the compensation earned or
received by (i) the Chief Executive Officer of L.A.M. and (ii) by each other
executive officer of L.A.M. who earned or received in excess of $100,000 during
the fiscal years ended December 31, 1999, 2000 and 2001.
Annual Compensation
Long Term Compensation
All
Re- Other
Other stricted Com-
Name and Compen- Stock Options pensa-
Principal Fiscal Salary Bonus sation Awards Granted tion
Position Year (1) (2) (3) (4) (5) (6)
- ----------- ----- ------ ----- ------ -------- ------- ------

Joseph Slechta 2001 $103,000 $25,000 -- $85,000 3,600,000 --
President and
Chief Executive
Officer

Alan Drizen, 2001 $120,000 -- -- -- 300,000 --
Chief Executive 2000 $120,000 -- -- -- -- --
Officer prior to 1999 $110,000 -- -- -- -- --
November 2002

(1) The dollar value of base salary (cash and non-cash) received or earned.
(2) The dollar value of bonus (cash and non-cash) received.
(3) Any other annual compensation not properly categorized as salary or bonus,
including perquisites and other personal benefits, securities or property.
(4) During the period covered by the foregoing table, the shares of restricted
stock issued as compensation for services. The table below shows the number
of shares of L.A.M.'s common stock owned by the officers listed above, and
the value of such shares as of December 31, 2001:

Name Shares Value

Joseph Slechta 120,000 $ 68,400
Alan Drizen 1,608,000 $916,560

(5) The shares of common stock to be received upon the exercise of all stock
options granted during the period covered by the table
(6) All other compensation received that L.A.M. could not properly report in
any other column of the table.

The following shows the amounts which L.A.M. expects to pay to its
officers during the twelve month period ending December 31, 2003, and the time
which L.A.M.'s executive officers plan to devote to L.A.M.'s business. L.A.M.
does not have employment agreements with any of its officers.

Proposed Time to be Devoted
Name Compensation To Company's Business

Joseph Slechta $120,000 100%
Peter Rothbart -- 5%
Gary M. Nath -- 15%

L.A.M.'s Board of Directors may increase the compensation paid to L.A.M.'s
officers depending upon the results of L.A.M.'s future operations.

Gary Nath provides legal services to L.A.M. See "Certain Relationships and
Transactions" below. During the year ending December 31, 2003, L.A.M. expects
that it will continue to use the services of Mr. Nath's law firm.

Long Term Incentive Plans - Awards in Last Fiscal Year

None.

Employee Pension, Profit Sharing or Other Retirement Plans

L.A.M. does not have a defined benefit, pension plan, profit sharing or
other retirement plan, although L.A.M. may adopt one or more of such plans in
the future.

Compensation of Directors

Standard Arrangements. At present, L.A.M. does not pay its directors for
attending meetings of the Board of Directors, although L.A.M. may adopt a
director compensation policy in the future. L.A.M. has no standard arrangement
pursuant to which directors of L.A.M. are compensated for any services provided
as a director or for committee participation or special assignments.

Other Arrangements. During the year ended December 31, 2001, and except as
disclosed elsewhere in this prospectus, no director of L.A.M. received any form
of compensation from L.A.M.

See " Stock Option and Bonus Plans" below for information concerning stock
options and stock bonuses granted to L.A.M.'s officers and directors.

Stock Option and Bonus Plans

L.A.M. has an Incentive Stock Option Plan, a Non-Qualified Stock Option
Plan and a Stock Bonus Plan. A summary description of each Plan follows. In some
cases these three Plans are collectively referred to as the "Plans".

Incentive Stock Option Plan. The Incentive Stock Option Plan authorizes the
issuance of options to purchase up to 1,000,000 shares of L.A.M.'s Common Stock,
less the number of shares already optioned under both this Plan and the
Non-Qualified Stock Option Plan. The Incentive Stock Option Plan became
effective on March 15, 2000 and will remain in effect until March 15, 2010
unless terminated earlier by action of the Board. Only officers, directors and
key employees of L.A.M. may be granted options pursuant to the Incentive Stock
Option Plan.

In order to qualify for incentive stock option treatment under the
Internal Revenue Code, the following requirements must be complied with:

1. Options granted pursuant to the Plan must be exercised no later than:

(a) The expiration of thirty (30) days after the date on which an option
holder's employment by L.A.M. is terminated.

(b) The expiration of one year after the date on which an option holder's
employment by L.A.M. is terminated, if such termination is due to the
Employee's disability or death.

2. In the event of an option holder's death while in the employ of
L.A.M., his legatees or distributees may exercise (prior to the
option's expiration) the option as to any of the shares not
previously exercised.

3. The total fair market value of the shares of Common Stock (determined
at the time of the grant of the option) for which any employee may be
granted options which are first exercisable in any calendar year may
not exceed $100,000.

4. Options may not be exercised until one year following the date of
grant. Options granted to an employee then owning more than 10% of
the Common Stock of L.A.M. may not be exercisable by its terms after
five years from the date of grant.

5. The purchase price per share of Common Stock purchasable under an
option is determined by the Committee but cannot be less than the
fair market value of the Common Stock on the date of the grant of the
option (or 110% of the fair market value in the case of a person
owning L.A.M.'s stock which represents more than 10% of the total
combined voting power of all classes of stock).

Non-Qualified Stock Option Plan. The Non-Qualified Stock Option Plan
authorizes the issuance of options to purchase up to 10,000,000 shares of
L.A.M.'s Common Stock less the number of shares already optioned under both this
Plan and the Incentive Stock Option Plan. The Non-Qualified Stock Option Plan
became effective on March 15, 2000 and will remain in effect until March 15,
2010 unless terminated earlier by the Board of Directors. L.A.M.'s employees,
directors, officers, consultants and advisors are eligible to be granted options
pursuant to the Plan, provided however that bona fide services must be rendered
by such consultants or advisors and such services must not be in connection with
the offer or sale of securities in a capital-raising transaction. The option
exercise price is determined by the Committee but cannot be less than the market
price of L.A.M.'s Common Stock on the date the option is granted.

Options granted pursuant to the Plan not previously exercised terminate
upon the date specified when the option was granted.

Stock Bonus Plan. Up to 3,000,000 shares of Common Stock may be granted
under the Stock Bonus Plan. Such shares may consist, in whole or in part, of
authorized but unissued shares, or treasury shares. Under the Stock Bonus Plan,
L.A.M.'s employees, directors, officers, consultants and advisors are eligible
to receive a grant of L.A.M.'s shares; provided, however, that bona fide
services must be rendered by consultants or advisors and such services must not
be in connection with the offer or sale of securities in a capital-raising
transaction.

Other Information Regarding the Plans. The Plans are administered by
L.A.M.'s Board of Directors. The Board of Directors has the authority to
interpret the provisions of the Plans and supervise the administration of the
Plans. In addition, the Board of Directors is empowered to select those persons
to whom shares or options are to be granted, to determine the number of shares
subject to each grant of a stock bonus or an option and to determine when, and
upon what conditions, shares or options granted under the Plans will vest or
otherwise be subject to forfeiture and cancellation.

In the discretion of the Board of Directors, any option granted pursuant
to the Plans may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also accelerate the date upon which any option (or any part of any options) is
first exercisable. Any shares issued pursuant to the Stock Bonus Plan and any
options granted pursuant to the Incentive Stock Option Plan or the Non-Qualified
Stock Option Plan will be forfeited if the "vesting" schedule established by the
Board of Directors at the time of the grant is not met. For this purpose,
vesting means the period during which the employee must remain an employee of
L.A.M. or the period of time a non-employee must provide services to L.A.M. At
the time an employee ceases working for L.A.M. (or at the time a non-employee
ceases to perform services for L.A.M.), any shares or options not fully vested
will be forfeited and cancelled. At the discretion of the Board of Directors,
payment for the shares of Common Stock underlying options may be paid through
the delivery of shares of L.A.M.'s Common Stock having an aggregate fair market
value equal to the option price, provided such shares have been owned by the
option holder for at least one year prior to such exercise. A combination of
cash and shares of Common Stock may also be permitted at the discretion of the
Board of Directors.

Options are generally non-transferable except upon death of the option
holder. Shares issued pursuant to the Stock Bonus Plan will generally not be
transferable until the person receiving the shares satisfies the vesting
requirements imposed by the Board of Directors when the shares were issued.

L.A.M.'s Board of Directors of L.A.M. may at any time, and from time to
time, amend, terminate, or suspend one or more of the Plans in any manner it
deems appropriate, provided that such amendment, termination or suspension
cannot adversely affect rights or obligations with respect to shares or options
previously granted. The Board of Directors may not, without shareholder
approval: make any amendment which would materially modify the eligibility
requirements for the Plans; increase or decrease the total number of shares of
Common Stock which may be issued pursuant to the Plans except in the case of a
reclassification of L.A.M.'s capital stock or a consolidation or merger of
L.A.M.; reduce the minimum option price per share; extend the period for
granting options; or materially increase in any other way the benefits accruing
to employees who are eligible to participate in the Plans.

The Plans are not qualified under Section 401(a) of the Internal Revenue
Code, nor are they subject to any provisions of the Employee Retirement Income
Security Act of 1974.

Summary. The following sets forth certain information as of January 31,
2003 concerning the stock options and stock bonuses granted by L.A.M. Each
option represents the right to purchase one share of L.A.M.'s common stock.

Total Shares Remaining
Shares Reserved for Shares Options/
Reserved Outstanding Issued As Shares
Name of Plan Under Plan Options Stock Bonus Under Plan

Incentive Stock Option Plan 1,000,000 -- N/A 1,000,000
Non-Qualified Stock Option
Plan 10,000,000 6,827,000 N/A 1,773,000
Stock Bonus Plan 3,000,000 N/A 2,231,500 768,500

Options Granted

The following tables set forth information concerning the options granted
between January 1, 2001 and January 31, 2003 to L.A.M.'s officers, directors
employees and consultants and options exercised as of January 31, 2003.

Expiration Options
Shares Subject Exercise Date of Date of Exercised As Of
Option Holder To Option Price Grant Option January 31, 2003
- ------------- ------------ -------- ------- ---------- ----------------

Joseph T. Slechta 300,000 $0.58 04/02/01 06/05/06 --
Joseph T. Slechta 300,000 $0.58 07/16/01 06/05/06 --
Joseph T. Slechta 3,000,000 $0.58 07/16/01 06/30/11 --
Peter Rothbart, M.D.300,000 $0.58 07/16/01 06/05/06 --
Gary M. Nath 300,000 $0.58 07/16/01 06/05/06 300,000

Richard Brokenshire 125,000 $0.58 04/24/02 04/24/07 --
Richard Brokenshire 350,000 $1.00 04/24/02 04/24/07 --
Alan Drizen 300,000 $0.58 07/16/01 06/05/06 300,000
Alan Drizen 2,000,000 $0.58 02/22/02 02/22/07 800,000
Other employees and
consultants 1,252,000 $0.58 2002 2007 --
--------- ---------------
8,227,000 1,400,000
========= =========

All options shown above were granted pursuant to L.A.M.'s Non-Qualified
Stock Option Plan. Substantially all of the shares issuable upon the exercise of
the options shown above have been registered for public sale by means of a
registration statement on Form S-8 which has been filed with the Securities and
Exchange Commission.

During October and November 2000, L.A.M. granted Mr. Slechta options to
purchase 225,000 shares of common stock at prices ranging between $3.50 to $4.00
per share. The options have since been cancelled by the mutual agreement of
L.A.M. and Mr. Slechta.

Option Exercises and Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares December 31,2001 December 31, 2001
Acquired Value Exercisable/ Exercisable/
Name on Exercise (1) Realized (2) Unexercisable (3) Unexercisable (4)
- -----------------

Joseph Slechta -- -- 3,600,000/-- $36,000/--
Peter Rothbart -- -- 300,000/-- $ 3,000/--
Gary M. Nath -- -- 300,000/-- $ 3,000/--
Alan Drizen -- -- 300,000/-- $ 3,000/--

(1) The number of shares received upon exercise of any options.

(2) With respect to options exercised the dollar value of the difference
between the option exercise price and the market value of the option shares
purchased on the date of the exercise of the options.

(3) The total number of unexercised options held as of December 31, 2001,
separated between those options that were exercisable and those options
that were not exercisable.

(4) For all unexercised options held as of December 31, 2001, the excess of the
market value of the stock underlying those options as of December 31, 2001
over the option exercise price.

Other Options

Subsequent to December 31, 2001 certain persons, who were not affiliated
with L.A.M., assigned options to purchase shares of L.A.M.'s common stock to the
following persons:

Shares Issuable Options Exercised
Upon Exercise Exercise Expiration as of
Name of Options Price Date January 31, 2003
---- ---------------- -------------- -------------

Joseph T. Slechta 190,000 $0.58 1/18/08 90,000
Peter Rothbart 190,000 $0.58 1/18/08 120,000
Gary M. Nath 190,000 $0.58 1/18/03 190,000
Alan Drizen (1) 1,550,000 $0.58 1/18/03 1,550,000

On January 10, 2003 L.A.M. issued the options described below:

Shares Issuable Options Exercised
Upon Exercise Exercise Expiration as of
Name of Options Price Date January 31, 2003
---- ---------------- -------------- -------------

Alan Drizen (1) 750,000 $0.58 7/13/08 --

(1) Mr. Drizen resigned as an officer of L.A.M. in November 2002 and resigned as
a director of L.A.M. in December 2002.

Stock Bonuses

As of January 31, 2003 the following persons had been granted shares of
L.A.M.'s common stock as stock bonuses:

Shares Issued
Name as Stock Bonus Date Issued

Joseph T. Slechta 100,000 04/02/01
Independent consultants 1,346,500 04/02/02
Independent consultants 125,000 07/26/02
Independent consultants 325,000 10/07/02
Independent consultants 335,000 01/08/03
----------
2,231,500

Certain Relationships and Transactions.

In September 1998, L.A.M. sold shares of its common stock to the persons,
in the amounts, and for the consideration set forth below:

Number
Name of Shares Consideration

Alan Drizen 1,076,308 (1) $10,763

Peter Rothbart 1,076,308 (2) $10,763

Gary M. Nath 742,784 $7,423

In September 1998, L.A.M. issued 6,000,000 shares of its common stock in
consideration for all of the issued and outstanding shares of LAM
Pharmaceuticals LLC, a Florida limited liability company. See "Business" for
further information concerning the acquisition of LAM Pharmaceuticals LLC. The
following officers, directors and other persons received shares of L.A.M.'s
common stock in connection with this transaction.

Name Shares Acquired

Alan Drizen 1,603,616 (1)
Peter Rothbart 1,603,616 (2)
Gary M. Nath 1,105,942
Lisa Krinsky 674,510 (3)
Arnold Hantman 376,019
All Other Sellers as a Group 636,297
----------
6,000,000

(1) Includes shares held by the Canyon Trust, a discretionary trust, of which
Mr. Drizen may be deemed the beneficial owner.
(2) Includes shares held by the Shasqua Trust, of which Dr. Rothbart may be
deemed the beneficial owner.
(3) Includes shares held by the South Florida Bioavailability Clinic of which
Lisa Krinsky is the majority shareholder.

Subsequent to September 1998, Mr. Drizen, Dr. Rothbart and Mr. Nath sold a
portion of their shares in transactions which were exempt pursuant to Rule 144
of the Securities and Exchange Commission and gifted a portion of their shares
to relatives.

During 1999, 2000 and 2001 L.A.M. paid $63,210, $51,262 and $166,532
respectively to Nath & Associates PLLC for legal services. Nath & Associates is
a law firm in which Mr. Nath, an officer and director of L.A.M., is a partner.
As of September 30, 2002 L.A.M. owed Nath & Associates approximately $313,000
for legal services.

Prior to January 1, 1998, L.A.M. received advances from Mr. Drizen
($525,000), Dr. Rothbart ($170,000) and Mr. Nath ($475,000) that were used to
fund L.A.M.'s operations, research and development and clinical trials.
Subsequently additional advances were made, expenses disbursed and services
performed by these directors on behalf of L.A.M. At December 31, 2001, the total
of all such advances outstanding amounted to $848,037.

Between February 2, 2001 and April 26, 2001 Mr. Drizen, an officer and one
of three directors of L.A.M. at that time, borrowed $1,075,000 from L.A.M. The
amounts borrowed by Mr. Drizen were used to purchase 441,200 shares of L.A.M.'s
common stock between February 2, 2001 and May 10, 2001 in an effort to stabilize
L.A.M.'s stock price in the face of extensive short selling. Dr. Peter Rothbart,
also an officer and director of L.A.M., was advised by Mr. Drizen in late
February 2001 that Mr. Drizen was purchasing shares of L.A.M.'s common stock in
an effort to stabilize L.A.M.'s stock price. However, Dr. Rothbart did not know
until May 11, 2001 that Mr. Drizen was using corporate funds for this purpose.
Gary Nath, an officer and director of L.A.M., and Joseph Slechta, an officer of
L.A.M., were not aware of Mr. Drizen's activities in this regard until May 11,
2001. Dr. Rothbart, Mr. Slechta and Mr. Nath became aware of Mr. Drizen's
borrowings from L.A.M. in connection with Mr. Slechta's review of L.A.M.'s
financial statements for the quarter ended March 31, 2001.

Mr. Drizen agreed to pay the $1,075,000 borrowed from L.A.M., together with
interest at 6% per year, in accordance with the terms of a promissory note. The
note provided for a series of periodic payments with the unpaid amount of the
note, together with any accrued and unpaid interest, due on March 31, 2002. On
May 25, 2001 L.A.M.'s Directors approved these repayment terms, and at the same
time ratified Mr. Drizen's borrowings from L.A.M.

Although Mr. Drizen agreed to secure the repayment of this note, L.A.M.'s
Board of Directors, in view of the fact that proceeds from the sale of Mr.
Drizen's shares of L.A.M.'s common stock would be the primary source of funds
which would be used to repay the Note, did not require Mr. Drizen to secure the
repayment of the Note. Accordingly, the Note from Mr. Drizen was unsecured.

In addition, as a result of Mr. Drizen's purchases and sales of L.A.M.'s
common stock between October 2000 and May 2001, L.A.M. is entitled to a
recoverable profit from Mr. Drizen, computed in accordance with 16(b) of the
Securities Exchange Act of 1934, in the amount of $408,078, as explained below.

Subsequent to December 31, 2001 Mr. Drizen and L.A.M. agreed that the
advance of $548,361 due him as of December 31, 2001 would be offset against the
remaining amount due pursuant to Mr. Drizen's promissory note. In addition, Dr.
Rothbart and Mr. Nath agreed with Mr. Drizen to apply a portion of their
receivables from L.A.M. against the amounts due by Mr. Drizen in an amount
sufficient to offset the remaining balance due on Mr. Drizen's promissory note.

Following these offset arrangements, as of March 27, 2002, L.A.M. owed Dr.
Rothbart and Mr. Nath $17,500 and $146,537 respectively, and Mr. Drizen's
promissory note was paid in full.

Section 16(b) of the Exchange Act allows a corporation to recover any
profits realized by officers, directors, and principal shareholders of a
corporation from the purchase and sale (or sale and purchase) of equity
securities of the corporation within a six-month period. Although Section 16(b)
was designed to prevent the unfair use of information that may have been
obtained by insiders through their relationship to a corporation, Section 16(b)

nevertheless imposes strict liability which does not depend upon the actual use
or possession of inside information by an insider.

The formula most frequently used by a corporation to recover profits is
known as the "lowest price in/highest price out" method, by which profit is
computed by matching the highest sale price with the lowest purchase price
within six months, the next highest sale price with the next lowest purchase
price within six months, and so forth, until all shares have been included in
the computation. Although this profit computation allows for the maximum
recovery to the corporation, in the case of multiple sales and purchases within
a six month period, it often results in a higher profit than the profit actually
realized by the insider, and in some cases may result in a profit when the
insider actually incurred losses from the sales and purchases. Mr. Drizen, for
example, estimates that he incurred a loss of approximately $900,000 as a result
of his purchases and sales of L.A.M.'s common stock between October 2000 and May
2001.

As of September 30, 2002 Mr. Drizen, a former officer and director of
L.A.M., owed L.A.M. $627,000, representing the unpaid portion of the exercise
price of options exercised by Mr. Drizen. Pursuant to the terms of a settlement
agreement, L.A.M. forgave the $627,000 owed by Mr. Drizen. Accordingly, as of
September 30, 2002 $289,000 of this receivable was charged to expense. The
balance of $338,000 due from Mr. Drizen was charged to expense during the three
months ended December 31, 2002.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information as of January 31, 2003
concerning the common stock owned by each officer and director of L.A.M., and
each other person known to L.A.M. to be the beneficial owner of more than five
percent (5%) of L.A.M.'s common stock.

Amount and Nature of
Beneficial Ownership Percentage
Name Number of Shares (1) Ownership

Joseph T. Slechta 20,000 nil
800 Sheppard Avenue West,
Commercial Unit 1
Toronto, Ontario
Canada M3H 6B4

Peter Rothbart 2,279,924 (2) 7.8%
274 St. Clements Avenue.
Toronto, Ontario
Canada M4R 1H5

Amount and Nature of
Beneficial Ownership Percentage
Name Number of Shares (1) Ownership

Gary M. Nath 2,122,942 7.2%
6106 Goldtree Way,
Bethesda, Maryland 20817

Richard Brokenshire -- --
800 Sheppard Avenue West,
Commercial Unit 1
Toronto, Ontario
Canada M3H 6B4

(All Officers and Directors as 4,422,866 15%
a group, 4 persons)

(1) Excludes shares issuable upon the exercises of options held by the
following persons:

Shares Issuable
Upon Exercise Option Expiration
Name of Options Exercise Price
Date of Option

Joseph T. Slechta 600,000 $0.58 06/05/06
Joseph T. Slechta 3,000,000 $0.58 06/30/11
Joseph T. Slechta 100,000 $0.58 01/18/08
Peter Rothbart 300,000 $0.58 06/05/06
Peter Rothbart 70,000 $0.58 01/18/08
Richard Brokenshire 125,000 $0.58 04/24/07
Richard Brokenshire 350,000 $1.00 04/24/07

(2) Includes shares held by the Shasqua Trust, of which Dr. Rothbart may be
deemed the beneficial owner.

SELLING SHAREHOLDERS

This prospectus relates to the sale of shares of L.A.M.'s common stock by
several shareholders of L.A.M. The shares offered by this prospectus include
shares owned by these shareholders as well as shares issuable upon the exercise
of options and warrants. The shares, options and warrants were issued by L.A.M.
for services rendered and in a private offering for cash.

L.A.M. will not receive any proceeds from the sale of the shares by the
selling shareholders. The selling shareholders may resell the shares they
acquire by means of this prospectus from time to time in the public market. The
costs of registering the shares offered by the selling shareholders are being
paid by L.A.M. The selling shareholders will pay all other costs of the sale of
the shares offered by them.

The following table identifies the selling shareholders and the shares which
are being offered for sale by the selling shareholders.

Share
Shares Shares Ownership
Issuable to be After
Upon the Sold in Offering
Shares Exercise of Options this Number % of
Name Owned or Warrants (2) Offering of Shares Class
- -------------------------------------------------------------------------------

John C. Leo 126,724 51,724 178,448 -- --
Richard Browning 34,483 34,483 68,966 -- --
Braise Wolfrum 172,414 172,414 344,828 -- --
Alan Drizen 180,616 950,000 950,000 180,616 0.6%
3501931 Canada Ltd. -- 100,000 100,000 -- --
Barry Kaplan & Associates -- 100,000 100,000 -- --
----------
1,742,242

Manner of Sale.

The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:

o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

o an exchange distribution in accordance with the rules of the applicable
exchange;

o privately negotiated transactions;

o short sales

o broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

o a combination of any such methods of sale; and

o any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.

The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.

The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus.

The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The selling stockholders have
informed L.A.M. that they do not have any agreement or understanding, directly
or indirectly, with any person to distribute the common stock.

L.A.M. has advised each selling shareholder that in the event of a
"distribution" of the shares owned by the selling shareholder, such selling
shareholder, any "affiliated purchasers", and any broker/dealer or other person
who participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. Rule 102 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution. A "distribution" is defined in Rule 102

as an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods". L.A.M. has also advised the selling
shareholders that Rule 101 under the 1934 Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of the common stock in connection with this offering.

DESCRIPTION OF SECURITIES
Common Stock

L.A.M. is authorized to issue 50,000,000 shares of common stock. As of
January 31, 2003 L.A.M. had 29,447,092 outstanding shares of common stock.
Holders of common stock are each entitled to cast one vote for each share held
of record on all matters presented to shareholders. Cumulative voting is not
allowed; hence, the holders of a majority of the outstanding common stock can
elect all directors.

Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefore and,
in the event of liquidation, to share pro rata in any distribution of L.A.M.'s
assets after payment of liabilities. The Board of Directors is not obligated to
declare a dividend and it is not anticipated that dividends will be paid until
L.A.M. is in profit.

Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by L.A.M. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock.

Preferred Stock

L.A.M. is authorized to issue up to 5,000,000 shares of preferred stock.
L.A.M.'s Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Delaware statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of L.A.M.

Convertible Notes and Warrants

In November 2002, L.A.M. sold convertible notes, plus Series A, B, C and D
warrants, to a group of private investors for $700,000. The notes do not bear
interest, are unsecured and are payable on November 1, 2005.

At the holder's option the notes are convertible into shares of L.A.M.'s
common stock equal in number to the amount determined by dividing each $1,000 of
note principal to be converted by the Conversion Price. The initial Conversion
Price is $0.29.

As of January 31, 2003 notes in the principal amount of $499,600 had been
converted into 1,699,320 shares of L.A.M.'s common stock.

Each note holder is prohibited from converting the notes to the extent
that such conversion would result in such holder, together with any affiliate of
the holder, beneficially owning in excess of 4.999% of the outstanding shares of
L.A.M.'s common stock following such conversion. This restriction may be waived
by each holder on not less than 61 days' notice to L.A.M. However, the 4.999%
limitation would not prevent each note holder from acquiring and selling in
excess of 4.999% of L.A.M.'s common stock through a series of acquisitions and
sales so long as the holder never beneficially owns more than 4.999% of L.A.M.'s
common stock at any one time.

L.A.M. has agreed to file a registration statement with the Securities and
Exchange Commission in order that the shares of common stock issuable upon the
conversion of the notes or the exercise of the warrants may be resold in the
public market.

Until 180 days after the date of this prospectus the note holders will
have a first right of refusal to participate in any subsequent financings
involving L.A.M.

Upon the occurrence of any of the following events L.A.M. is required to
redeem the notes at a price equal to 120% of then outstanding principal balance
of the notes:

- the suspension from listing or the failure of L.A.M.'s common stock
to be listed on the OTC Bulletin Board for a period of five
consecutive trading days; or

- the registration statement which L.A.M. has agreed to file is not
effective by March 31, 2003

- the effectiveness of the registration statement lapses for any reason
or the registration statement is unavailable to the note holders and
the lapse or unavailability continues for a period of fifteen
consecutive trading days, or 25 non-consecutive trading days during
any twelve month period, provided the cause of the lapse or
unavailability is not due to factors primarily within the control of
the note holders.

- any representation or warranty made by L.A.M. to the note holders
proves to be materially inaccurate or L.A.M. fails to perform any
material covenant or condition in its agreement with the note
holders.

- a purchase, tender or exchange offer accepted by the holders of more
than 33% of L.A.M.'s outstanding shares of common stock.

- L.A.M. files for protection from its creditors under the federal
bankruptcy code.

The Series A warrants allow the holders to purchase 624,590 shares of
L.A.M.'s common stock at a price of $0.35 per share at any time prior to
November 1, 2007.

The Series B warrants allow the holders to purchase 1,312,500 shares of
L.A.M.'s common stock at a price of $0.80 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten consecutive
days that the closing bid price of L.A.M.'s common stock has exceeded $1.20,
L.A.M. has the right, upon 15 days advance written notice to the holders of the
Series B warrants, to force the holders to exercise the unexercised portion of
the Series B warrants.

The Series C warrants allow the holders to purchase 875,000 shares of
L.A.M.'s common stock at a price of $1.20 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten consecutive
days that the closing bid price of L.A.M.'s common stock has exceeded $2.00,
L.A.M. has the right, upon 15 days advance written notice to the holders of the
Series C warrants, to force the holders to exercise the unexercised portion of
the Series C warrants.
The Series D warrants allow the holders to purchase 656,250 shares of
L.A.M.'s common stock at a price of $1.60 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten consecutive
days that the closing bid price of L.A.M.'s common stock has exceeded $2.50,
L.A.M. has the right, upon 15 days advance written notice to the holders of the
Series D warrants, to force the holders to exercise the unexercised portion of
the Series D warrants.

L.A.M.'s right to force the warrant holders to exercise the Series, B, C
and D warrants is subject to a number of conditions, including the following:

- - there is in effect a registration statement which the holders may use to
sell the shares issuable upon the exercise of the warrants.

- - L.A.M.'s common stock is listed for trading on the OTC Bulletin Board

The exercise price of the Series B, C and D warrants is not subject to
adjustment except in the case of stock splits, consolidations and similar
transactions.

Each warrant holder is prohibited from exercising the warrants to the
extent that such exercise would result in such holder, together with any
affiliate of the warrant holder, beneficially owning in excess of 4.999% of the
outstanding shares of L.A.M.'s common stock following such exercise. This
restriction may be waived by each holder on not less than 61 days' notice to

L.A.M. However, the 4.999% limitation would not prevent each warrant holder from
acquiring and selling in excess of 4.999% of L.A.M.'s common stock through a
series of acquisitions and sales under the warrants so long as the warrant
holder never beneficially owns more than 4.999% of L.A.M.'s common stock at any
one time.

Transfer Agent

Corporate Stock Transfer, Inc.
3200 Cherry Creek Drive South, Suite 430
Denver CO, 80209
Telephone Number (303)-282-4800
Facsimile Number (303) 282-5800

LEGAL PROCEEDINGS

L.A.M. is not involved in any pending or threatened legal proceeding.

EXPERTS

The financial statements included in this prospectus for the years ended
December 31, 2001 and 2000 have been so incorporated in reliance on the report
of Rotenberg & Company, LLP, independent accountants, given on authority of said
firm as experts in auditing and accounting.

With respect to the Independent Accountants Report on the unaudited
interim financial information of L.A.M. Pharmaceutical Corp. for the nine months
ended September 30, 2002 and 2001 dated November 12, 2002 which is included in
this prospectus, Rotenberg & Company, LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their report, they did not audit and they did not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. Rotenberg & Company, LLP
are not subject to the liability provisions of Section 11 of the Securities Act
of 1933 for its report on the unaudited interim financial information because
this report is not a "report" on a "part" of the registration statement prepared
or certified by an accountant within the meaning of Sections 7 and 11 of the
Act.

INDEMNIFICATION

L.A.M.'s Bylaws authorize indemnification of a director, officer, employee
or agent of L.A.M. against expenses incurred by him in connection with any
action, suit, or proceeding to which he is named a party by reason of his having
acted or served in such capacity, except for liabilities arising from his own
misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of L.A.M. who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the

Securities Act of 1933 may be permitted to directors, officers, or persons
controlling L.A.M. pursuant to the foregoing provisions, L.A.M. has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.

AVAILABLE INFORMATION

L.A.M. is subject to the informational requirements of the Securities
Exchange Act of l934 and in accordance therewith is required to file reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Copies of any such reports, proxy statements and
other information filed by L.A.M. can be inspected and copied at the public
reference facility maintained by the Securities and Exchange Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. Copies of such material can be
obtained from the Public Reference Section of the Securities and Exchange
Commission at its office in Washington, D.C. 20549 at prescribed rates. Certain
information concerning L.A.M. is also available at the Internet Web Site
maintained by the Securities and Exchange Commission at www.sec.gov. L.A.M. has
filed with the Securities and Exchange Commission a Registration Statement on
Form SB-2 (together with all amendments and exhibits) under the Securities Act
of 1933, as amended (the "Act"), with respect to the Securities offered by this
prospectus. This prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Securities and Exchange Commission. For
further information, reference is made to the Registration Statement.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

-------------------------------------
FINANCIAL REPORTS
AT
DECEMBER 31, 2001
-------------------------------------

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

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

Independent Auditors' Report F-2

Balance Sheets at December 31, 2001 and 2000 F-3

Statements of Changes in Stockholders' Deficit
for the Years Ended December 31, 2001, 2000
and 1999 and for the Period From the Date of
Inception (February 1, 1994) Through December 31, 2001 F-4 to F-5

Statements of Operations for the Years Ended
December 31, 2001, 2000 and 1999 and for the
Period From the Date of Inception (February 1, 1994)
Through December 31, 2001 F-6

Statements of Cash Flows for the Years Ended
December 31, 2001, 2000 and 1999 and for the
Period From the Date of Inception (February 1, 1994)
Through December 31, 2001 F-7 to F-8

Notes to Financial Statements F-9 to F-21

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
and Shareholders
L.A.M. Pharmaceutical, Corp. Lewiston, New York

We have audited the accompanying balance sheets of L.A.M. Pharmaceutical,
Corp. (A Development Stage Company) (A Delaware Corporation) as of December 31,
2001 and 2000, and the related statements of changes in stockholders' deficit,
operations and cash flows for each of the three years in the period ended
December 31, 2001 and for the period from the date of inception (February 1,
1994) through December 31, 2001. 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits 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 presentation of the financial statements. 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 L.A.M. Pharmaceutical, Corp.
(A Development Stage Company) (A Delaware Corporation) as of December 31, 2001
and 2000 and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2001 and for the period from the
date of inception (February 1, 1994) through December 31, 2001, in conformity
with accounting principles generally accepted in the United States of America.

Rotenberg & Co., LLP
Rochester, New York
February 8, 2002
(Except for Note P, as to which the date is March 27, 2002)

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

BALANCE SHEETS
- --------------------------------------------------------------------------------
December 31, 2001 2000
- --------------------------------------------------------------------------------

ASSETS

Current Assets
Cash and Cash Equivalents (1) $ 11,284 $1,545,692
Cash Held by Broker - Debentures -- 357,250
Accounts Receivable 44,433 75,000
Inventory - Raw Materials 97,750 121,125
Prepaid Expenses 5,344 2,639
- --------------------------------------------------------------------------------
Total Current Assets 158,811 2,101,706

Property and Equipment - Net of Accumulated
Depreciation 121,185 19,601

Other Assets
Patents and Trademarks - Net of Accumulated
Amortization 489,322 336,196
- --------------------------------------------------------------------------------
Total Assets $ 769,318 $2,457,503
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts Payable and Accrued Expenses $ 601,999 $ 397,484
Convertible Debentures -- 1,598,250
- --------------------------------------------------------------------------------
Total Current Liabilities 601,999 1,995,734

Other Liabilities
Due to Stockholders 848,037 1,256,115
Deferred Royalty Revenue 207,360 207,360
- --------------------------------------------------------------------------------
Total Liabilities 1,657,396 3,459,209
- --------------------------------------------------------------------------------
Stockholders' Deficit
Common Stock - $.0001 Par; 50,000,000 Authorized;
19,784,520 and 3,998,930 Issued and
Outstanding, respectively 1,978 1,400
Additional Paid-In Capital 17,964,009 8,812,199
Less: Loan Receivable-Officer (640,000) --
Deficit Accumulated During Development Stage (18,214,065) (9,815,305)
- --------------------------------------------------------------------------------
Total Stockholders' Deficit (888,078) (1,001,706)
- --------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit $ 769,318 $2,457,503
- --------------------------------------------------------------------------------

(1)Between January 1, 2002 and March 27, 2002 the company has raised additional
cash of $967,900 from issuance of new shares. This has been used in part for
payment of accounts payable at December 31, 2001 and subsequent operating
expenses as described more fully in Note P to the financial statements.

The accompanying notes are an integral part of this financial statement.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

- -------------------------------------------------------------------------------------------------------------------
Deficit
Accumulated
Additional Loan During Total
Number Common Paid-In Receivable Development Stockholders'
of Shares Stock Capital from Officer Stage Deficit
- -------------------------------------------------------------------------------------------------------------------

Balance - February 1, 1994 -- $ -- $ -- $-- $ -- $ --

Capital Contribution - Services Rendered -- -- 757,386 -- -- 757,386
Capital Contribution - Laboratory
Equipment -- -- 24,245 -- -- 24,245
Capital Contribution - Leasehold
Improvements -- -- 9,775 -- -- 9,775

Capital Contribution - Interest Expense -- -- 252,794 -- -- 252,794

Capital Contribution in Cash -- -- 162,200 -- -- 162,200

Distribution -- -- (68,660) -- -- (68,660)
Recapitalization as L.A.M.
Pharmaceutical, Corp. 6,000,000 600 (600) -- -- --

Issuance of Common Stock for Cash 4,332,500 433 378,352 -- -- 378,785
--
Net Loss -- -- -- (2,480,654) (2,480,654)
- -------------------------------------------------------------------------------------------------------------------
Balance - December 31, 1998 10,332,500 1,033 1,515,492 -- (2,480,654) (964,129)

Capital Contribution - Interest Expense -- -- 107,681 -- -- 107,681

Issuance of Common Stock for Cash 60,000 6 59,994 -- -- 60,000
Stock Options and Awards Granted

- Compensation for Services Rendered -- -- 526,316 -- -- 526,316
Conversion Premium on Convertible
Debentures -- -- 1,252,000 -- -- 1,252,000
Net Loss -- -- -- -- (2,557,643) (2,557,643)
- -------------------------------------------------------------------------------------------------------------------
Balance - December 31, 1999 10,392,500 $ 1,039 $3,461,483 $ -- $(5,038,297) $(1,575,775)
- -------------------------------------------------------------------------------------------------------------------
- continued -

The accompanying notes are an integral part of this financial statement.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Period from Date of Inception (February 1, 1994) Through December 31,
2001 - continued

- ----------------------------------------------------------------------------------------------------------------------------
Deficit
Loan Accumulated
Additional Receivable During Total
Number Common Paid-In from Development Stockholders'
of Shares Stock Capital Officer Stage Deficit
- ----------------------------------------------------------------------------------------------------------------------------
Balance - December 31, 1999 10,392,500 $ 1,039 $3,461,483 $ -- $(5,038,297) $(1,575,775)
Capital Contribution - Interest Expense -- -- 107,686 -- -- 107,686

Conversion Premium on Convertible Debentures -- -- 2,395,093 -- -- 2,395,093

Stock Options and Awards Granted
- Compensation for Services Rendered -- -- 447,640 -- -- 447,640

Debentures Converted to Common Stock 3,319,430 332 2,211,176 -- -- 2,211,508

Stock Options Exercised 287,000 29 189,121 -- -- 189,150

Net Loss -- -- -- -- (4,777,008) (4,777,008)
- -----------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2000 13,998,930 1,400 8,812,199 -- (9,815,305) (1,001,706)

Capital Contribution - Interest Expense -- -- 113,200 -- -- 113,200

Common Shares Issued - Debenture Conversion
Premium 3,106,502 311 1,057,844 -- -- 1,058,155

Debentures Converted to Common Stock 853,167 85 1,611,114 -- -- 1,611,199

Stock Options Issued
- Compensation for Services Rendered -- -- 3,218,463 -- -- 3,218,463

Common Shares Issued
- Compensation for Services Rendered 1,213,900 121 1,047,086 -- -- 1,047,207

Stock Options Exercised 173,000 17 112,433 -- -- 112,450

Warrants Issued to Hockbury Limited and GKN
Securities -- -- 1,100,000 -- -- 1,100,000

Sale of Shares Under the Equity Line of
Credit Agreement 439,021 44 483,592 -- -- 483,636

Loan to Officer -- -- -- (1,075,000) -- (1,075,000)

Loan Repayments from Officer -- -- -- 435,000 -- 435,000

Short-Swing Profit on Insider Trading -- -- 408,078 -- -- 408,078

Net Loss -- -- -- -- (8,398,760) (8,398,760)
- -----------------------------------------------------------------------------------------------------------------------

Balance - December 31, 2001 19,784,520 1,978 $17,964,009 $(640,000) $(18,214,065) $ (888,078)
========================================================================================================================

The accompanying notes are an integral part of this financial statement.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2001, 2000 and 1999 and for the Period From
Date of Inception (February 1, 1994) Through December 31, 2001
- -------------------------------------------------------------------------------

Date of
Inception
(February 1,
1994)
Through
December 31,
2001 2001 2000 1999
- ---------------------------------------------------------------------------------------
Revenues

Licensing Revenue $ 500,000 $300,000 $ -- $ --
- ----------------------------------------------------------------------------------------
Expenses
Interest Expense 897,842 232,819 292,180 120,625
General and Administrative 2,994,053 1,378,791 1,260,970 355,575
Marketing and Business Development 285,671 201,808 56,008 24,166
Research and Development 2,498,950 479,881 317,270 185,143
- ---------------------------------------------------------------------------------------
6,676,516 2,293,299 $1,926,428 685,509

Financial Accounting Expenses
Not Requiring the Use of Cash
During the Period:
Depreciation and Amortization 106,077 27,159 36,108 11,159
Share and Option Grants to Officers,
Directors Investors and Consultants 5,997,012 4,265,670 447,640 526,316
Conversion Premium on Convertible
Debentures 4,704,937 1,057,844 2,395,093 1,252,000
Warrants Issued on Equity Line of
Credit 1,100,000 1,100,000 -- --
- ----------------------------------------------------------------------------------------
Total Expenses 18,584,542 8,743,972 4,805,269 2,474,984
- -----------------------------------------------------------------------------------------
Loss Before Other Income and
(Expenses) (18,084,542) (8,443,972) (4,805,269)$(2,474,984)
- -----------------------------------------------------------------------------------------

Other Income and (Expenses)
Interest Income 77,837 45,212 28,261 2,601
Loss on Investment in Affiliate (207,360) -- -- (85,260)
- ----------------------------------------------------------------------------------------

Total Other Income and (Expenses) (129,523) 45,212 28,261 (82,659)
- -----------------------------------------------------------------------------------------

Net Loss for the Period $(18,214,065) $(8,398,760) $(4,777,008)(2,557,643)
- -----------------------------------------------------------------------------------------

Loss per Common Share - Basic and
Diluted $ (1.61) $ (0.53) $ (0.44) $ (0.25)
- -----------------------------------------------------------------------------------------

Weighted Average Number
of Common Shares Outstanding 15,817,111 10,893,116 10,392,500
- -----------------------------------------------------------------------------------------

The accompanying notes are an integral part of this financial statement.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------

Net Loss $(18,214,065) $ (8,398,760) $(4,777,008) $(2,557,643)

Adjustments to Reconcile Net Loss for the
Period to Cash Flows from Operating
Activities:
Depreciation and Amortization 106,077 27,159 36,108 11,159
Capital Contributions:
Deemed Interest Expense on Loans from
Stockholders 581,361 113,200 107,686 107,681
Share and Option Grants - Officers,
Directors, Investors and Consultants 5,997,012 4,265,670 447,640 526,316
Warrants Issued - Equity Line of Credit 1,100,000 1,100,000 -- --
Conversion Premium on Convertible
Debentures 4,705,248 1,058,155 2,395,093 1,252,000
Interest on Converted Debentures 272,871 121,449 151,422 --
Loss on Investment in Affiliate 207,360 -- -- 85,260

Changes in Assets and Liabilities:
Accounts Receivable (44,433) 30,567 -- 39,349
Notes Receivable -- -- 50,000 --
Inventory - Raw Materials (97,750) 23,375 (121,125) --
Prepaid Expenses (5,344) (2,705) (2,639) 5,320
Accounts Payable and Accrued Expenses 601,999 204,515 151,135 182,683
- ---------------------------------------------------------------------------------------------------

Net Cash Flows from Operating Activities (4,789,664) (1,457,375) (1,561,688) (347,875)
- ---------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Purchases of Property and Equipment (155,225) (112,508) (37,631) (4,274)
Purchases of Patents and Trademarks, Net (527,336) (169,361) (116,932) (166,398)
- ---------------------------------------------------------------------------------------------------
Net Cash Flows from Investing Activities (682,561) (281,869) (154,563) (170,672)
- ---------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of this financial statement.

continued

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CASH FLOWS - continued
- -----------------------------------------------------------------------------

Date of
Inception
(February 1,
1994)
Through
December 31,
2001 2001 2000 1999
- -----------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Cash Capital Contributions 162,200 -- -- --
Distributions to Stockholders (68,660) -- -- --
Proceeds from Issuance of Common Stock 438,785 -- -- 60,000
Proceeds from (Repayment of) Convertible
Debentures 3,549,833 (108,500) 2,406,333 1,077,000
Proceeds from Exercise of Stock Options 301,600 112,450 189,150 --
Proceeds from Sale of Shares Under
the Equity Line of Credit Agreement 483,636 483,636 -- --
Note Payable -- -- -- (5,320)
Issuance of Loan Receivable - Officer, (640,000)
Net (640,000) -- --
Advances from Stockholders 1,256,115 -- -- --
- -----------------------------------------------------------------------------------------
Net Cash Flows from Financing Activities 5,483,509 (152,414) 2,595,483 1,131,680
- -----------------------------------------------------------------------------------------
Net Increase (Decrease)
in Cash and Cash Equivalents 11,284 (1,891,658) 879,232 613,133

Cash and Cash Equivalents - Beginning of
Period -- 1,902,942 1,023,710 410,577
- -----------------------------------------------------------------------------------------

Cash and Cash Equivalents - End of Period $ 11,284 $ 11,284 $1,902,942 $ 1,023,710
- -----------------------------------------------------------------------------------------
NON-CASH INVESTING AND FINANCING ACTIVITIES
- -----------------------------------------------------------------------------------------
Issuance of Common Stock in
Exchange for Property and Equipment $ 34,020 $ -- $ -- $ --
Short-Swing Profit on Insider Trading
- Offset Against Loan Payable to
Shareholder $ 408,078 $ 408,078 $ -- $ --
$3,549,833 $1,489,750 $2,060,083 $ --
Investment in Affiliate $ 207,360 $ -- $ -- $ --
Deferred Royalty Revenue $ (207,360) $ -- $ -- $ --
- -----------------------------------------------------------------------------------------

The accompanying notes are an integral part of this financial statement.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note A -Summary of Transaction
L.A.M. Pharmaceutical, Corp. (the Company) was initially formed as
L.A.M. Pharmaceutical, LLC (the LLC) on February 4, 1997. From February
1, 1994 to February 4, 1997 the Company conducted its activities under
the name RDN. In September 1998, the members of L.A.M. Pharmaceuticals
LLC, a Florida Limited liability company, exchanged all of their
interests in the LLC for 6,000,000 shares of the Company's common stock.
The stock exchange between the Company and the members of the LLC is
considered a recapitalization or reverse acquisition. Under reverse
acquisition accounting, the LLC was considered the acquirer for
accounting and financial reporting purposes, and acquired the assets and
assumed the liabilities of the Company. The accompanying financial
statements include the historical accounts of the Company, the LLC and
RDN since February 1, 1994. All intercompany accounts and transactions
have been eliminated.

Note B - Nature of Operations and Summary of Significant Accounting Policies
L.A.M. Pharmaceutical, Corp. was incorporated on July 24, 1998 under the
laws of the State of Delaware. The Company has the uthority to issue
50,000,000 shares of common stock, $.0001 par value. The Company is
engaged in the research and development of Novel, Proprietary, Long
Lasting Injectable Drugs and Delivery Systems for Transdermal and
Topical Drugs.

Development Stage
The Company has operated as a development stage enterprise since its
inception by devoting substantially all of its efforts to raising
capital, research and development, and product and market development.
Accordingly, the financial statements of the Company have been prepared
in accordance with the accounting and reporting principles prescribed by
Statement of Financial Accounting Standards (SFAS) No. 7, "Accounting
and Reporting by Development Stage Enterprises," issued by the Financial
Accounting Standards Board.

Revenue Recognition
Revenues are recognized when earned. On December 31, 1997 the Company
entered into an exclusive world-wide license agreement (the License
Agreement) with Ixora Bio-Medical Company Inc. (Ixora). Under the
License Agreement, Ixora has paid the Company $500,000 for the exclusive
rights of the Company's male and female sexual dysfunction product
technology. In addition, the Company received 37% of Ixora and will
receive a royalty equal to 9% of the net sales under the License
Agreement. Such payments will be recorded when received by the Company.
Ixora will also pay for all costs for the full development, registration
and protection of intellectual property, including but not limited to
patent costs, raw material costs, clinical development costs and
compensation of all Company personnel involved in the sexual dysfunction
product technology.

Method of Accounting
The corporation maintains its books and prepares its financial
statements on the accrual basis of accounting.
- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note B -Nature of Operations and Summary of Significant Accounting
Policies - continued

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

Concentrations of Credit Risk
Financial instruments which potentially expose the Company to
significant concentrations of credit risk consist principally of bank
deposits. Cash is placed primarily in high quality short-term interest
bearing financial instruments.

Cash and Cash Equivalents
Cash and cash equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original maturities
of three months or less. The Company maintains cash and cash equivalents
at financial institutions that periodically may exceed federally insured
amounts.

Cash Held by Brokers - Debentures
Cash held by brokers - debentures consist of interest bearing term
deposit accounts having maturity dates of three months or less.

Inventory
Inventory is comprised of raw materials and is stated at the lower of
cost or market. Cost is determined by the first-in, first-out method and
market is based on the lower of replacement cost or net realizable
value.

Property, Equipment and Depreciation
Property and equipment are stated at cost, less accumulated depreciation
computed using the straight-line method over the estimated useful lives
as follows:

Furniture and Fixtures 5 - 7 Years
Computer Equipment 5 - 7 Years
Leasehold Improvements 5 Years

Maintenance and repairs are charged to expense. The cost of the assets
retired or otherwise disposed of and the related accumulated
depreciation are removed from the accounts.

Patents and Trademarks
Patents are carried at cost and are amortized using the straight-line
method over their estimated useful lives, not to exceed 17 years from
the date of issuance of the patent. Amortization expense for the years
ended December 31, 2001, 2000 and 1999 was $16,236, $32,055, and $8,159,
respectively. Accumulated amortization associated with patents and
trademarks at December 31, 2001 and 2000 amounted to $51,908 and
$40,125, respectively.
- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Note B - Nature of Operations and Summary of Significant Accounting
Policies - continued

Impairment of Assets
In accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of," the Company assesses all long-lived assets
for impairment at least annually or whenever events or circumstances
indicate that the carrying amount may not be recoverable.

Research and Development Costs
Research and development expenditures are expensed as incurred.

Net Income (Loss) Per Common Share
Net income (loss) per common share is computed in accordance with SFAS No.
128, "Earnings Per Share". Basic earnings per common share is calculated
by dividing income available to common shareholders by the
weighted-average number of common shares outstanding for each period.
Diluted earnings per common share is calculated by adjusting the
weighted-average shares outstanding assuming conversion of all
potentially dilutive stock options, warrants and convertible securities.
Diluted earnings per share is the same as basic earnings per share for
all of the periods presented since the effect of the conversion of the
debentures and the stock options and awards granted would have an
anti-dilutive effect on earnings per share.

Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes," using the asset and liability approach,
which requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of such assets and liabilities.
This method utilizes enacted statutory tax rates in effect for the year
in which the temporary differences are expected to reverse and gives
immediate effect to changes in income tax rates upon enactment. Deferred
tax assets are recognized, net of any valuation allowance, for temporary
differences and net operating loss and tax credit carryforwards.
Deferred income tax expense represents the change in net deferred assets
and liability balances. The Company had no material deferred tax assets
or liabilities for the periods presented. Deferred tax assets arising
from the net operating losses incurred during the development stage have
been fully reserved against due to the uncertainty as to when or whether
the tax benefit will be realized.

Share and Option Grants
As described in Note K, the Company has elected to follow the accounting
provisions of Accounting Principles Board Opinion (APBO) No. 25
"Accounting for Stock Issued to Employees", for stock-based compensation
and awards made to employees - the intrinsic value method. Pro forma
disclosures required under SFAS No. 123, "Accounting for Stock-Based
Compensation" has not been furnished due to the short history of the
Company. Stock options granted to investors and consultants are subject
to the provisions of SFAS No. 123 and are recorded at the fair value of
the option at the date of grant.

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note B - Nature of Operations and Summary of Significant Accounting
Policies - continued

Financial Instruments
The Company's financial instruments consist of cash, accounts receivable
and accounts payable. Unless otherwise noted, it is management's opinion
that the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments. The fair value of
these financial instruments approximates their carrying value, unless
otherwise noted.

The fair value of due to stockholders and loan receivable - officer
could not be obtained without incurring excessive costs as they have no
readily determinable market place.

Reclassifications
Certain amounts in the prior period financial statements have been
reclassified to conform with the current year presentation.

Note C - Investment in Affiliate
Investment in Affiliate consists of a 37% interest in Ixora Biomedical
Company, Inc. The investment consists of the following at December 31:

-----------------------------------------------------------------------------
Original Investment, January 1, 1998 $ 207,360
Investor's Share of Loss for the Year ending December 31, 1998 (122,100)
-----------------------------------------------------------------------------

Carrying value of Investment, December 31, 1998 $ 85,260
Investor's Share of Loss for the Year ending December 31, 1999 (85,260)
-----------------------------------------------------------------------------

Carrying value of Investment December 31, 1999, 2000 and 2001 $ --
-----------------------------------------------------------------------------

Note D - Licensing Agreement
The Company has an exclusive license agreement (the License Agreement)
with Ixora Bio-Medical Company, Inc. (Ixora). Under the License
Agreement, Ixora has paid the Company $500,000 for the exclusive rights
of the Company's male and female sexual dysfunction product technology.
Ixora has also agreed to pay all costs for the development, registration
and protection of intellectual property, including but not limited to
patent costs, raw material costs, clinical development costs and
compensation of all Company personnel involved in the sexual dysfunction
product technology.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

Note E - Property and Equipment

Property and equipment are recorded at cost and consisted of the following:

---------------------------------------------------------------------
December 31, 2001 2000
---------------------------------------------------------------------

Furniture and Fixtures $ 122,101 $ 37,281
Computer Equipment 22,095 9,351
Leasehold Improvements 30,692 11,296
----------------------------------------------------------------------
$ 174,888 $ 57,928
Less: Accumulated Depreciation (53,703) 38,327
-----------------------------------------------------------------------

Net Property and Equipment $ 121,185 $ 19,601
-----------------------------------------------------------------------

Depreciation expense for the years ended December 31, 2001, 2000, and
1999 was $10,923, $4,053, and $3,000, respectively.

Note F - Due to Stockholders

The Company has a liability for cash advances and salaries and other
expenses incurred in earlier years due to three of its stockholders
totaling $848,037 and $1,256,115 at December 31, 2001 and 2000,
respectively. The Company has agreements with these stockholders, which
provides for payment of this obligation without interest, not to exceed
25% of the profits realized by the Company in any year. The Company has
imputed interest at 8.5% and charged operations for each of the periods
presented with an offsetting credit to additional paid-in capital.

Note G - Deferred Royalty Revenue

Deferred Royalty Revenue represents amounts due to the Company from
Ixora Biomedical pursuant to the worldwide license agreement. The
$207,360 of Deferred Royalty Revenue approximated the value of the
Company's original investment in the affiliate. The balance will be
amortized to income upon commencement of Ixora's sale of the Company's
products.

Note H - Loan Receivable - Director

Between February and April 2001, Alan Drizen, the Company's President,
borrowed $1,075,000 from the Company. The amounts borrowed were used by
Mr. Drizen to purchase shares of the Company's common stock in an effort
to stabilize the share price in the face of extensive short selling of
the shares. Mr. Drizen has agreed to repay this amount to the Company,
together with interest at 6% per year, in accordance with the terms of a
promissory note. The note provides for a series of periodic payments
with the unpaid amount of the note, together with any accrued and unpaid
interest, due on March 31, 2002.

Although Mr. Drizen agreed to secure the repayment of this note, the
Company's Board of Directors, in view of the fact that proceeds from the
sale of Mr. Drizen's shares of the Company's common stock would be the
primary source of funds which would be used to repay the note, did not
require Mr. Drizen to secure the repayment of the note. Accordingly, the
note from Mr. Drizen is unsecured. As of December 31, 2001, all payments
required under the terms of Mr. Drizen's promissory note have been paid
and the outstanding principal balance of the note was $640,000.

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Note H -Loan Receivable - Director - continued

As a result of Mr. Drizen's purchases and sales of the Company's common
stock between October 2000 and May 2001, the Company is entitled to a
recoverable profit of $408,078 from Mr. Drizen, computed in accordance
with 16(b) of the Securities Exchange Act of 1934. During 2001, this
amount was applied to reduce the amount that the Company owed to Mr.
Drizen with the offset being to additional paid-in capital.

Section 16(b) of the Exchange Act allows a corporation to recover any
profits realized by officers, directors, and principal shareholders of a
corporation from the purchase and sale (or sale and purchase) of equity
securities of the corporation within a six-month period. Although
Section 16(b) was designed to prevent the unfair use of information that
may have been obtained by insiders through their relationship to a
corporation, Section 16(b) nevertheless imposes strict liability which
does not depend upon the actual use or possession of inside information
by an insider.

The formula most frequently used by a corporation to recover profits is
known as the "lowest price in/highest price out" method, by which profit
is computed by matching the highest sale price with the lowest purchase
price within six months, the next highest sale price with the next
lowest purchase price within six months, and so forth, until all shares
have been included in the computation. Although this profit computation
allows for the maximum recovery to the corporation, in the case of
multiple sales and purchases within a six month period, it often results
in a higher profit than the profit actually realized by the insider, and
in some cases may result in a profit when the insider actually incurred
losses from the sales and purchases.

Note I -Income Taxes

The Company has approximately $8,300,000 of net operating loss
carryforwards for federal tax purposes as of December 31, 2001, which is
available to offset future taxable income and which expire in varying
amounts from 2013 to 2016. The Company has fully reserved for any future
tax benefits from the net operating loss carryforwards since it has not
generated any revenues to date.

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------

Note J -Convertible Debentures

The Company issued convertible debentures during 1999 and 2000 having an
aggregate principal balance of $1,252,000 and $2,406,333, respectively.
These debentures were unsecured obligations of the Company that matured
over twelve months and bore interest at an annualized rate of 9.5%
payable at maturity. The debentures were convertible into common shares
of the Company at rates from $.50 to $3.00 per share (2 shares to .33
shares for each $1 of principal) at any time, at the option of the
holder. The common shares issued on conversion had a restriction as to
resale for a period of one year from the date that the original
debenture was issued. The Company could also redeem the debentures at
any time upon written notice and payment to the holder of all unpaid
principal and interest. The debentures were not subject to any sinking
fund requirements. Debentures in the amount of $2,060,083 were converted
during 2000 into 3,319,430 shares of the Company's common stock. On
August 9, 2001, the conversion terms for all debentures then outstanding
were revised. The number of shares to be issued upon conversion of the
notes, plus any accrued interest would be determined by dividing the
amount to be converted by $0.52. Note holders who agreed to convert on
these revised terms were also granted options to purchase shares of the
Company's common stock equal to 10% of the number of shares resulting
from conversion. The options are exercisable immediately at $0.58 per
share and expire in August 2002. During 2001, $1,489,750 of the
remaining debentures were converted to 853,167 shares with such
debenture holders receiving an additional 3,106,502 common shares and
options to purchase 424,493 shares of the Company's common stock. An
additional conversion premium of $1,057,844 was recognized in 2001
related to the revision of terms.

During 2001, debentures with a principal amount of $108,500 were repaid.

The conversion premium on the convertible debentures at the date of
issuance and the number of common share equivalents outstanding are as
follows:

Number of Excess of Fair
Value of
Common Share Conversion Common Stock Conversion
Equivalents Price Over Debentures Premium
-----------------------------------------------------------------------

Issued in 1999 2,504,000 $ 0.50 $ 5,749,400 $1,252,000
-----------------------------------------------------------------------

Issued in 2000 530,000 $ 0.50 $ 2,042,000 $ 265,000
42,667 3.00 95,260 95,260
1,149,048 1.75 2,915,023 2,034,833
-----------------------------------------------------------------------
1,721,715 $ 5,052,283 $2,395,093
------------------------------------------------------------------------
Converted in 2000 (3,014,000) $ 0.50
(290,430) 1.75
(15,000) 3.00
-----------------------------------------------
Shares Issued (3,319,430)
-----------------------------------------------
Outstanding at
December 31, 2000 906,285
===============================================
- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
Note J - Convertible Debentures - continued
---------------------------------------------------------------------

Number of
Common Share Conversion
Equivalents Price
-----------------------------------------------------------------------
Converted in 2001 (20,000) $ 0.50
(17,167) 3.00
(816,000) 1.75
----------------------------------------------------------------------
Shares Issued (853,167)
----------------------------------------------------------------------
Redeemed for Cash (10,500) $ 3.00
(42,618) 1.75
------------------------------------------------------------------------
(53,118)
------------------------------------------------------------------------
Outstanding at December 31, --
2001
----------------------------------------------------------------------

The excess fair value of the common stock into which the notes can
convert at the conversion date over the proceeds is recorded as
conversion premium and is limited to the amount of the proceeds of the
debentures. Accordingly, $2,395,093 and $1,252,000 was recorded in 2000
and 1999, respectively, as a charge to conversion premium and a credit
to additional paid-in capital in the accompanying financial statements.

Note K - Share and Option Grants

The Company has stock option plans under which employees, non-employee
directors, consultants and investors may be granted options to purchase
shares of the Company's common stock. Options vest immediately and have
varying expiration dates.

The Company has elected to follow APBO No. 25 and related
Interpretations in accounting for its stock-based compensation made to
its employees. APBO No. 25 requires no recognition of compensation
expense for most of the stock-based compensation arrangements provided
by the Company, namely, broad-based employee stock purchase plans and
option grants where the exercise price is equal to or less than the
market value at the date of grant. However, APBO No. 25 requires
recognition of compensation expense for variable award plans over the
vesting periods of such plans, based upon the then-current market
values of the underlying stock. In contrast, SFAS No. 123 requires
recognition of compensation expense for grants of stock, stock
options, and other equity instruments, over the vesting periods of
such grants, based on the estimated grant-date fair values of those
grants. Stock options and awards made to investors and consultants are
subject to the provisions of SFAS No. 123.

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Note K - Share and Option Grants - continued

Employees

During 1999, the Company granted stock options for 100,000 shares of
common stock to employees as compensation for services rendered at
exercise prices that were below the fair value of the common stock at
the date of grant. In accordance with APBO 25, the Company recognized
compensation expense of $48,000 as a charge against operations during
1999 for the difference between the fair value and the exercise price of
the common stock at the date of grant.

Consultants

During 2001, 2000, and 1999, the Company granted stock options for
1,710,000, 936,000, and 358,333 shares, respectively, of common stock to
consultants as compensation for services rendered. In accordance with
SFAS 123, the Company recognized compensation expense during 2001, 2000,
and 1999 of $100,125, $277,330, and $272,057, respectively, for the fair
value of the options at the date of grant using a Black Scholes
option-pricing model.

Directors

During 2001 and 2000, the Company granted additional stock options for
4,275,000 and 225,000 shares, respectively, of common stock to directors
as compensation for services rendered. In accordance with SFAS No. 123,
the Company recognized compensation expense during 2001 and 2000 of
$2,199,375 and $94,950, respectively, for the fair value of the options
at the date of the grant using a Black Scholes option-pricing model.

Investors

During 2001, 2000 and 1999, the Company granted stock options for
5,005,000, 260,000 and 61,633 shares, respectively, of common stock to
investors. In accordance with SFAS No. 123, the Company recognized
compensation expense during 2001, 2000 and 1999 of $565,025, $75,360 and
$100,009, respectively, for the fair value of the options at the date of
grant using a Black Scholes option-pricing model.

The following assumptions were used:

December 31, 2001 2000 1999
----------------------------------------------------------------------
Weighted Average Fair Value of $ 0.26 $ 3.40 $ 2.23
Options
Weighted Average Exercise Price $ 0.78 $ 3.63 $ 1.53
Expected Market Volatility 7.0% 10.0% 10.0%
Risk Free Interest Rate 4.76% 4.72% 5.19%
Expected Life (Years) 5.0 2.5 1.8
Expected Dividend Yield 0% 0% 0%
-----------------------------------------------------------------------

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------

Note K - Share and Option Grants - continued

Stock option transactions for the three years ending December 31, 2001
are summarized as follows:

Weighted Average
Outstanding Exercise Price
------------------------------------------------------------------------
At December 31, 1998 740,500 $ 0.70
Granted 519,966 $ 1.36
------------------------------------------------------------------------

At December 31, 1999 1,260,466 $ 0.97
Granted 1,421,000 $ 3.63
Exercised (287,000) $ 0.66
------------------------------------------------------------------------

At December 31, 2000 2,394,466 $ 2.84
Granted 11,616,993 $ 0.73
Exercised (173,000) $ 0.65
Forfeited/Expired (992,966) $ 2.26
------------------------------------------------------------------------
At December 31, 2001 12,845,493 $ 0.80
------------------------------------------------------------------------

The following table summarizes information about fixed stock options
outstanding at December 31, 2001:

Weighted Weighted
Range of Shares Average Average
Exercise Prices Under Option Remaining Life Exercise Price
------------------------------------------------------------------------
$ 0.58 - $ 1.00 12,051,993 4.35 $ 0.62
$ 1.02 - $ 2.50 207,500 4.58 $ 2.45
$ 3.13 - $ 4.00 536,000 2.29 $ 3.71
$ 5.00 - $ 7.50 50,000 0.62 $ 6.25
------------------------------------------------------------------------

All of the above outstanding options are fully vested and exercisable.

During 2001, the Board of Directors authorized the repricing of options
to purchase shares of common stock at rates ranging from $0.58 to $0.90.
All repriced options maintained the same expiration terms. Approximately
1,930,000 options were repriced under this program, which accounted for
approximately 15% of options outstanding as of December 31, 2001. In
accordance with SFAS 123, the Company recognized compensation expense
during 2001 of $323,125 for the fair value of the options at the date
they were repriced using a Black Scholes option-pricing model.

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------

Note K - Share and Option Grants - continued

During 2001, the Board of Directors authorized the extension of
expiration dates of options to purchase shares of common stock. The
extensions were for periods ranging from 12 months to 24 months.
Approximately 452,500 options were extended under this program, which
accounted for approximately 4% of options outstanding as of December 31,
2001. In accordance with SFAS 123, the Company recognized compensation
expense during 2001 of $30,813 for the fair value of the options at the
date their expiration date was extended using a Black Scholes
option-pricing model.

In 2001 and 1999, the Company granted awards of 1,213,900 and 25,000
shares, respectively, of common stock as compensation to outside
consultants. The Company has charged operations in 2001 and 1999 for the
fair value of the common stock awarded on the date of the grants in the
amount of $1,047,207 and $106,250, respectively.

Note L - Equity Line of Credit Agreement
On January 24, 2001, the Company entered into an equity line of credit
agreement with Hockbury Limited in order to establish a source of
finding for the development of the Company's technology. The equity line
of credit agreement establishes what is sometimes also referred to as an
equity drawdown facility.

Under the equity line of credit agreement, Hockbury Limited has agreed
to provide the Company with up to $20,000,000 of funding during the 20
month period following the date of an effective registration statement.
During this 20 month period, the Company may request a drawdown under
the equity line of credit by selling shares of its common stock to
Hockbury Limited, and Hockbury Limited will be obligated to purchase the
shares. The Company may request a drawdown once ever 27 trading days,
although the Company is under no obligation to request any drawdowns
under the equity line of credit. The Company has issued 439,021 shares
of common stock and received $483,636 in net proceeds as of December 31,
2001 under the equity line of credit agreement.

During the 22 trading days following a drawdown request, the Company
will calculate the amount of shares it will sell to Hockbury Limited and
the purchase price per share. The purchase price per share of common
stock is based on the daily volume weighted average price of the
Company's common stock during each of the 22 trading days immediately
following the drawdown date, less a discount of 10%. The Company will
receive the purchase price less a placement fee payable to GKN
Securities equal to 7% of the aggregate purchase price. Hockbury Limited
may then resell all or a portion of these shares. GKN Securities is the
placement agent which introduced Hockbury Limited to the Company and is
a registered broker-dealer.

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Note L - Equity Line of Credit Agreement - continued

The minimum amount the Company can drawdown at any one time is $100,000.
The maximum amount the Company can drawdown at any one time is the
lesser of $1,000,000 or the amount equal to:

o 4.5% of the weighted average price of the Company's common stock for the 60
calendar days prior to the date of the drawdown request.
o Multiplied by the total trading volume of the Company's common stock for
the 60 calendar days prior to the date of the drawdown request.

Upon closing of the equity line of credit agreement, the Company paid to
Hockbury Limited's legal counsel, Epstein Beck & Green P.C., $25,000 to
cover its legal and administrative expenses.

Grant of Warrants
As consideration for extending the equity line of credit, the Company
granted Hockbury Limited warrants to purchase 482,893 shares of common
stock at a price of $4.56 per share at any time prior to January 24,
2004. As partial consideration for GKN Securities' services as placement
agent in connection with this offering, the Company granted GKN
Securities warrants to purchase 455,580 shares of common stock at a
price of $4.83 per share at any time prior to January 24, 2006. GKN
Securities subsequently assigned warrants to purchase 209,500 shares to
four employees of GKN Securities.

The fair value of these warrants using customary pricing models was
approximately $1,100,000 on January 24, 2001 and is reflected in the
Company's financial statements and recorded as an expense during 2001.

Note M - Common and Preferred Stock

Common Stock

The Company is authorized to issue 50,000,000 shares of common stock.
Holders of common stock are each entitled to cast one vote for each
share held of record on all matters presented to shareholders.
Cumulative voting is not allowed; hence, the holders of a majority of
the outstanding common stock can elect all directors.

Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available
therefore and, in the event of liquidation, to share pro rata in any
distribution of the Company's assets after payment of liabilities. The
Board of Directors is not obligated to declare a dividend and it is not
anticipated that dividends will be paid until the Company is profitable.

Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by the Company. There are no conversion,
redemption, sinking fund or similar provisions regarding the common
stock.

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------

Note M - Common and Preferred Stock - continued

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of preferred
stock. The Company's Articles of Incorporation provide that the Board of
Directors has the authority to divide the preferred stock into series
and, within the limitations provided by Delaware statute, to fix by
resolution the voting power, designations, preferences, and relative
participation, special rights, and the qualifications, limitations or
restrictions of the shares of any series so established. As the Board of
Directors has authority to establish the terms of, and to issue, the
preferred stock without shareholder approval, the preferred stock could
be issued to defend against any attempted takeover of the Company.

Note N - Lease Arrangements

The Company leases office space and a research facility under operating
leases which expire at various dates through 2004. The leases require
the payment of property and business taxes, insurance and maintenance
costs in addition to rental payments.

Future minimum payments are as follows:

2002 2003 2004 2005 2006 Total
---- ---- ---- ---- ---- -----

$ 75,658 $ 76,636 $ 37,400 $ -- $ -- $ 189,694

Rent expense under operating leases was $66,965, $18,157 and $-0- for
the years ended December 31, 2001, 2000, and 1999, respectively.

Note O - Related Party Transactions

A director and shareholder of the Company is a partner in the law firm
that acts as counsel and patent attorneys to the Company. The Company
incurred legal fees and expenses to the law firm in the amount of
approximately $244,000, $180,000 and $214,000 in 2001, 2000 and 1999,
respectively.

Note P - Subsequent Events

Subsequent to December 31, 2001, the Company has raised additional
equity finance totaling $867,900 through the exercise by certain option
holders of their options. A total of 1,496,400 shares have been issued
in connection with these option exercises.

In addition, the Company has raised a further $92,000, net of related
commissions and costs, by a drawdown under the equity line of credit
facility with Hockbury Ltd. 143,185 new common shares were issued in
connection with this drawdown.

The cash raised was used for the Company's ongoing operating expenses,
for prepayment of costs in connection with the pending launch of the
company's wound healing product, and in reducing accounts payable. At
March 27, 2002, the Company had total cash balances of approximately
$246,000.

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

-------------------------------------
FINANCIAL REPORTS
AT
SEPTEMBER 30, 2002
-------------------------------------

F - 1

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

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

Independent Accountants' Report on Interim Financial Information F-2

Balance Sheets at September 30, 2002 (Unaudited) and December 31, 2001 F-3

Statements of Changes in Stockholders' Equity (Deficit) for the
Nine Months Ended September 30, 2002 and 2001 (Unaudited) F-4

Statements of Operations for the Three and Nine Months Ended
September 30, 2002 and 2001 (Unaudited) F-5 to F-6

Statements of Cash Flows for the Nine Months Ended
September 30, 2002 and 2001 (Unaudited) F-7 to F-8

Notes to Financial Statements F-9 to F-12

F - 2

INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Directors and Stockholders
L.A.M. Pharmaceutical, Corp.
(A Delaware Corporation)
Lewiston, New York

We have reviewed the accompanying balance sheet of L.A.M.
Pharmaceutical, Corp. as of September 30, 2002, the related statements of
operations for the three and nine months ended September 30, 2002 and 2001,
and the statements of changes in stockholders' equity (deficit) and cash
flows for the nine months ended September 30, 2002 and 2001. These financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with auditing standards generally accepted in
the United States of America, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.

Based on our review, we are not aware of any material modifications
that should be made to such financial statements for them to be in conformity
with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance sheet of
L.A.M. Pharmaceutical, Corp. as of December 31, 2001 (presented herein), and
the related statements of changes in stockholders' equity (deficit)
(presented herein), operations, and cash flows (not presented herein) for the
year then ended; and in our report dated February 8, 2002, except for Note P,
as to which the date is March 27, 2002, we expressed an unqualified opinion
on those financial statements. In our opinion, the information set forth in
the accompanying balance sheet as of December 31, 2001 and the related
statement of stockholders' equity (deficit) for the year then ended is fairly
stated, in all material respects. No auditing procedures have been performed
subsequent to the date of our report.

/s/ Rotenberg & Co., LLP
Rotenberg & Co., LLP
Rochester, New York
November 12, 2002

See Accountants' Review Report

F - 3

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

BALANCE SHEETS
- -------------------------------------------------------------------------------

(Unaudited)
September December
30, 31,
2002 2001
- --------------------------------------------------------------------------------------

ASSETS

Current Assets
Cash and Cash Equivalents $ 102,817 $ 11,284
Accounts Receivable 21,054 --
Other Receivable -- 44,433
Inventory 432,592 97,750
Prepaid Expenses 63,567 5,344
- --------------------------------------------------------------------------------------

Total Current Assets 620,030 158,811

Property and Equipment - Net of Accumulated Depreciation 120,722 121,185

Other Assets
Patents and Trademarks - Net of Accumulated Amortization 600,884 489,322
- --------------------------------------------------------------------------------------

Total Assets $ 1,341,636 $ 769,318
- --------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
Accounts Payable and Accrued Expenses $ 714,461 $ 601,999

Other Liabilities
Due to Stockholders 164,037 848,037
Deferred Royalty Revenue 207,360 207,360
- --------------------------------------------------------------------------------------

Total Liabilities 1,085,858 1,657,396
- --------------------------------------------------------------------------------------

Stockholders' Equity (Deficit)
Common Stock - $.0001 Par; 50,000,000 Shares Authorized;
26,814,151 and 19,515,919
Shares
Issued and Outstanding,
Respectively 2,681 1,978
Additional Paid-In Capital 23,589,404 17,964,009
Loan Receivable - Director/Officer -- (640,000)
Receivable on Option Exercise (396,000)
Accumulated Deficit (22,940,307) (18,214,065)
- --------------------------------------------------------------------------------------

Total Stockholders' Equity (Deficit) 255,778 (888,078)
- --------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Equity (Deficit) $ 1,341,636 $ 769,318
- --------------------------------------------------------------------------------------

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------------------
Loan Total
Additional Receivable - Stockholders'
Number Common Paid-In Director/ Accumulated Equity
of Shares Stock Capital Officer Deficit (Deficit)
- -------------------------------------------------------------------------------------------------------------------------------

Balance - December 31, 2000 13,998,930 $ 1,400 $8,812,199 $ -- $ (9,815,305) $(1,001,706)
Capital Contribution - Interest Expense -- -- 85,747 -- -- 85,747
Debentures Converted to Common Stock 2,816,563 282 1,611,228 -- -- 1,611,510
Common Shares Issued -
Compensation for Services Rendered 945,000 95 877,705 -- -- 877,800
Common Shares Issued - Debenture
Conversion Premium 1,143,105 114 777,198 -- -- 777,312
Stock Options Exercised 173,300 17 112,433 -- -- 112,450
Stock Options Issued -- -- 2,676,450 -- -- 2,676,450
Warrants Issued to Hockbury Limited and
GKN Securities -- -- 1,100,000 -- -- 1,100,000
Sale of Shares Under the Equity Line of
Credit Agreement 439,021 44 483,592 -- -- 483,636
Loan To Director/Officer -- -- -- (1,075,000) -- (1,075,000)
Loan Repayments from Director/Officer -- -- -- 320,000 -- 320,000
Net Loss for the Period (Unaudited) -- -- -- -- (6,817,732) (6,817,732)
- --------------------------------------------------------------------------------------------------------------------------------

Balance - September 30, 2001 (Unaudited) 19,515,919 $1,952 $ 16,536,552 $ (755,000) $(16,633,037) $ (849,533)
- ----------------------------------------------------------------------------------------------------------------------------------

Balance - December 31, 2001 19,784,520 $1,978 $ 17,964,009 $(640,000) $(18,214,065) $ (888,078)
Capital Contribution - Interest Expense -- -- 16,906 -- -- 16,906
Stock Options Granted -
Compensation for Services Rendered -- -- 1,349,437 -- -- 1,349,437
Common Shares Issued -
Compensation for Services Rendered 1,496,500 150 913,102 -- -- 913,252
Stock Options Exercised 4,918,975 492 2,858,647 -- -- 2,859,139
Sale of Shares Under the Equity Line of
Credit Agreement 614,156 61 487,303 -- -- 487,364
Receivable on Option Exercise -- -- (396,000) -- -- (396,000)
Loan Repayments from Director/Officer -- -- -- 640,000 -- 640,000
Net Loss for the Period (Unaudited) -- -- -- -- (4,726,242) (4,726,242)
- ----------------------------------------------------------------------------------------------------------------------------------

Balance - September 30, 2002 (Unaudited) 26,814,151 $ 2,681 $ 23,193,404 $ -- $ (22,940,307) $ 255,778
- ---------------------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of this financial statement.

See Accountants' Review Report

F - 8

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF OPERATIONS (UNAUDITED)
- ------------------------------------------------------------------------------

Three Months Ended
September 30,
--------------------------
2002 2001
- --------------------------------------------------------------------
Revenues
Net Sales $ 22,165 --
- --------------------------------------------------------------------
22,165 --

Expenses
Cost of Sales 5,172 --
Research and Development 114,146 193,470
Marketing and Business Development 360,611 55,662
General and Administrative 570,902 294,329
- --------------------------------------------------------------------
1,050,831 543,461
Financial Accounting Expenses Not
Requiring
the Use of Cash During the Period:
Depreciation and Amortization 15,916 10,831
Interest Expense 2,358 82,265
Share and Option Grants to
Officers, Directors, Investors, and
Consultants 407,917 2,839,550
Conversion Premium on Convertible
Debentures -- 777,312
- --------------------------------------------------------------------

Total Expenses 1,477,022 4,253,419
- --------------------------------------------------------------------

Loss Before Other Income and (Expenses) (1,454,857) (4,253,419)
- --------------------------------------------------------------------

Other Income and (Expenses)
Interest Income -- 18,115
- --------------------------------------------------------------------

Total Other Income and (Expenses) -- 18,115
- --------------------------------------------------------------------

Net Loss for the Period $ (1,454,857) $(4,235,304)
====================================================================

Loss per Common Share - Basic and
Diluted $ (0.06) $ (0.28)
====================================================================

Weighted Average Number
of Common Shares Outstanding 26,133,394 15,366,725
====================================================================

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF OPERATIONS (UNAUDITED)
- -------------------------------------------------------------------------------

Nine Months Ended
September 30,
--------------------------
2002 2001
- --------------------------------------------------------------------
Revenues
Licensing Revenues $ -- $ 300,000
Net Sales 22,165 --
- --------------------------------------------------------------------
22,165 300,000
Expenses
Cost of Sales 5,172 --
Research and Development 432,683 322,244
Marketing and Business Development 748,557 122,483
General and Administrative 1,154,563 1,059,089
- --------------------------------------------------------------------
2,340,975 1,503,816
Financial Accounting Expenses Not
Requiring
the Use of Cash During the Period:
Depreciation and Amortization 45,220 28,332
Interest Expense 17,473 203,601
Share and Option Grants to
Officers, Directors, Investors, and
Consultants 2,344,739 3,544,250
Conversion Premium on Convertible
Debentures -- 777,312
Warrants Issued on Equity Line of
Credit Agreement -- 1,100,000
- --------------------------------------------------------------------

Total Expenses 4,748,407 7,157,311
- --------------------------------------------------------------------

Loss Before Other Income and (Expenses) (4,726,242) (6,857,311)
- --------------------------------------------------------------------

Other Income and (Expenses)
Interest Incomes -- 39,579
- --------------------------------------------------------------------

Total Other Incomer and (Expenses) -- 39,579
- --------------------------------------------------------------------

Net Loss for the Period $(4,726,242) $(6,817,732)
====================================================================

Loss per Common Share - Basic and
Diluted $ (0.20) $ (0.47)
====================================================================

Weighted Average Number
of Common Shares Outstanding 23,913,887 14,673,967
====================================================================

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CASH FLOWS (UNAUDITED)
- -------------------------------------------------------------------

Nine Months Ended
September 30,
---------------------------
2002 2001
- -------------------------------------------------------------------

Cash Flows from Operating Activities

Net Loss for the Period $(4,726,242) $(6,817,732)

Adjustments to Reconcile Net Loss for
the Period
to Net Cash Flows from Operating
Activities:
Depreciation and Amortization 45,220 28,332
Capital Contributions:
Deemed Interest Expense on
Loans from Stockholders 16,906 85,747
Share and Option Grants - Officers,
Directors, Investors, and
Consultants 2,107,682 3,554,250
Warrants Issued - Equity Line of Credit -- 1,100,000
Conversion Premium on Convertible
Debentures -- 777,312

Changes in Assets and Liabilities:
Accounts Receivable (21,054) (19,470)
Inventory - Raw Materials (334,842) 10,375
Prepaid Expenses (58,223) 2,639
Accounts Payable and Accrued Expenses 396,662 139,505
- -------------------------------------------------------------------

Net Cash Flows from Operating
Activities (2,573,891) (1,139,042)
- -------------------------------------------------------------------

Cash Flows from Investing Activities
Purchases of Property and Equipment (16,405) (85,520)
Purchases of Patents and Trademarks -
Net (139,914) (86,330)
- -------------------------------------------------------------------

Net Cash Flows from Investing
Activities $ (156,319) $ (171,850)
- -------------------------------------------------------------------

- continued -

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CASH FLOWS (UNAUDITED) -
(continued)
- ---------------------------------------------------------------------------

Nine Months Ended
September 30,
--------------------------
2002 2001
- ---------------------------------------------------------------------------

Cash Flows from Financing Activities
Proceeds from Convertible Debentures $ -- $ (168,500)
Proceeds from Exercise of Stock Options 1,357,303 112,450
Proceeds from Sale of Shares Under the
Equity Line of Credit Agreement 487,364 483,636
Loan Receivable - Director/Officer 976,643 (755,000)
Advances from Stockholders 433 54,069
- ---------------------------------------------------------------------------

Net Cash Flows from Financing Activities 2,821,743 (273,345)
- ---------------------------------------------------------------------------

Net Increase (Decrease) in
Cash and Cash Equivalents 91,533 (1,584,237)

Cash and Cash Equivalents - Beginning of Period 11,284 1,902,942
- ---------------------------------------------------------------------------

Cash and Cash Equivalents - End of Period $ 102,817 $ 318,705
- ---------------------------------------------------------------------------

Non-Cash Investing and Financing Activities
- ---------------------------------------------------------------------------

Exercise of Stock Options $ 857,450 $ --
Offsetting of Stockholders Receivable and
Payables $ 728,000 $ --
Debentures Converted to Common Stock $ -- $1,602,237
===========================================================================

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note A - Basis of Presentation

The condensed financial statements of L.A.M. Pharmaceutical, Corp. (the
"Company") included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Certain information and footnote
disclosures normally included in financial statements prepared in
conjunction with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading. These condensed financial
statements should be read in conjunction with the Company's audited
financial statements and the notes thereto for the year ended December
31, 2001 which are included elsewhere in this prospectus.

The accompanying unaudited interim financial statements reflect all
adjustments of a normal and recurring nature, which are, in the opinion
of management, necessary to present fairly the financial position,
results of operations and cash flows of the Company for the interim
periods presented. The results of operations for these periods are not
necessarily comparable to, or indicative of, results of any other
interim period or for the fiscal year as a whole. Factors that affect
the comparability of financial data from year to year and for comparable
interim periods include non-recurring expenses associated with market
launch of new products, costs incurred to raise capital, acquisitions of
patents and trademarks, and stock options and awards.

Reclassifications

Certain amounts in the prior year financial statements have been
reclassified to conform with the current year presentation.

Note B - Accounting Policies

In August 2002, the Company commenced sales of its L.A.M. IPM Wound
Gel(TM) and as a result has revised its presentation of the financial
statements from a development stage company to that of an operating
company.

Revenue Recognition
The Company recognizes revenue when it is realized or realizable and
earned. The Company considers revenue realized or realizable when the
product has been shipped to the customer, the sales price is fixed or
determinable and collectibility is reasonably assured. The Company
reduces revenue for estimated customer returns.

Note C - Receivable - Director/Officer

Between February and April 2001, Alan Drizen, the Company's President,
borrowed $1,075,000 from the Company. The amounts borrowed were used by
Mr. Drizen to purchase shares of the Company's common stock in an effort
to stabilize the share price in the face of extensive short selling of
the shares. Mr. Drizen agreed to pay this amount to the Company,
together with interest at 6% per year, in accordance with the terms of a
promissory note. The

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note C - Receivable - Director/Officer (continued)

note provided for a series of periodic payments with the unpaid amount
of the note, together with any accrued and unpaid interest, due on March
31, 2002.

As a result of Mr. Drizen's purchases and sales of the Company's common
stock between October 2000 and May 2001, the Company was entitled to a
recoverable profit of $408,078 from Mr. Drizen, computed in accordance
with Section 16(b) of the Securities Exchange Act of 1934. During 2001,
this amount was applied to reduce the amount that the Company owed to
Mr. Drizen with the offset being to additional paid-in capital.

During March 2002, Mr. Drizen and the Company agreed that the balance of
$548,361 owed by the Company to Mr. Drizen at December 31, 2001,
included in amounts due to stockholders, would be offset against the
remaining amount due pursuant to Mr. Drizen's promissory note. In
addition, two other Directors and stockholders agreed with Mr. Drizen to
apply a portion of their receivables from the Company, included in
amounts due to stockholders, against the amounts due by Mr. Drizen in an
amount sufficient to offset the remaining balance due on Mr. Drizen's
promissory note. Following these offset arrangements, Mr. Drizen's
promissory note was paid in full.

During the nine months ended September 30, 2002, Mr. Drizen exercised
options to acquire 2,650,000 shares of the Company's common stock. The
total exercise price of these options was $1,537,000. At September 30,
2002, $627,000 of the exercise price remained unpaid. Pursuant to the
terms of a pending agreement with Mr. Drizen, the Company will forgive
$289,000 of the $627,000 owed by Mr. Drizen. Accordingly, as of
September 30, 2002 $289,000 of this receivable was charged to expense,
leaving a balance of $338,000 due from Mr. Drizen.

Note D - Equity Line of Credit Agreement

On January 24, 2001, the Company entered into an equity line of credit
agreement with Hockbury Limited in order to establish a source of
funding for the development of the Company's technology. The equity line
of credit agreement establishes what is sometimes also referred to as an
equity drawdown facility. The Company has issued 1,053,177 shares of
common stock and received $971,000 in net proceeds as of September 30,
2002 under the equity line of credit agreement.

On July 22, 2002 the Company terminated the equity line of credit
agreement with Hockbury Limited. As consideration for the cancellation
of the agreement, the Company has re-priced the warrants held by
Hockbury Limited to purchase 482,893 shares of common stock from a price
of $4.56 per share to $1.35 per share. This re-pricing had no effect on
the income statement for the three months ended September 30, 2002. The
warrants may be exercised at any time prior to January 24, 2004.

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note E- Subsequent Events

On November 1, 2002, L.A.M. sold convertible notes, plus Series A, B, C
and D warrants, to a group of private investors for $500,000. The notes do
not bear interest, are unsecured and are payable on November 1, 2005.

At the holder's option the notes are convertible into shares of L.A.M.'s
common stock equal in number to the amount determined by dividing each
$1,000 of note principal to be converted by the Conversion Price. The
initial Conversion Price is $0.29.

If L.A.M. sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable
Conversion Price, the Conversion Price will be lowered to the price at
which the shares were sold or the lowest price at which the securities are
convertible, as the case may be.

L.A.M. has agreed to file a registration statement with the Securities and
Exchange Commission in order that the shares of common stock issuable upon
the conversion of the notes or the exercise of the warrants may be resold
in the public market.

Until 180 days after the effective date of the registration statement
which L.A.M. has agreed to file the note holders will have a first right
of refusal to participate in any subsequent financings involving L.A.M.

Upon the occurrence of any of the following events L.A.M. is required to
redeem the notes at a price equal to 120% of the then outstanding
principal balance of the notes:

- the suspension from listing or the failure of L.A.M.'s common stock
to be listed on the OTC Bulletin Board for a period of five consecutive
trading days; or

- the registration statement which L.A.M. has agreed to file is not
effective by March 31, 2003

- the effectiveness of the registration statement lapses for any
reason or the registration statement is unavailable to the note holders
and the lapse or unavailability continues for a period of 15 consecutive
trading days, or 25 non-consecutive trading days during any 12 month
period, provided the cause of the lapse or unavailability is not due to
factors primarily within the control of the note holders.

- any representation or warranty made by L.A.M. to the note holders
proves to be materially inaccurate or L.A.M. fails to perform any material
covenant or condition in its agreement with the note holders.

- a purchase, tender or exchange offer accepted by the holders of more
than 33% of L.A.M.'s outstanding shares of common stock.

- L.A.M. files for protection from its creditors under the federal
Bankruptcy code.

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note E- Subsequent Events (continued)

The Series A warrants allow the holders to purchase 426,136 shares of
L.A.M.'s common stock at a price of $0.35 per share at any time prior to
November 1, 2007.

If L.A.M. sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable warrant
exercise price, the exercise price of the Series A warrants will be
lowered to the price at which the shares were sold or the lowest price at
which the securities are convertible, as the case may be.

The Series B warrants allow the holders to purchase 937,500 shares of
L.A.M.'s common stock at a price of $0.80 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten
consecutive days that the closing bid price of L.A.M.'s common stock has
exceeded $1.20, L.A.M. has the right, upon 15 days advance written notice
to the holders of the Series B warrants, to force the holders to exercise
the unexercised portion of the Series B warrants.

The Series C warrants allow the holders to purchase 625,000 shares of
L.A.M.'s common stock at a price of $1.20 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten
consecutive days that the closing bid price of L.A.M.'s common stock has
exceeded $2.00, L.A.M. has the right, upon 15 days advance written notice
to the holders of the Series C warrants, to force the holders to exercise
the unexercised portion of the Series C warrants.

The Series D warrants allow the holders to purchase 468,750 shares of
L.A.M.'s common stock at a price of $1.60 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten
consecutive days that the closing bid price of L.A.M.'s common stock has
exceeded $2.50, L.A.M. has the right, upon 15 days advance written notice
to the holders of the Series D warrants, to force the holders to exercise
the unexercised portion of the Series D warrants.

L.A.M.'s right to force the warrant holders to exercise the Series, B, C
and D warrants is subject to a number of conditions, including the
following:

- there is in effect a registration statement which the holders may
use to sell the shares issuable upon the exercise of the warrants.

- L.A.M.'s common stock is listed for trading on the OTC Bulletin
Board

The exercise price of the Series B, C and D warrants is not subject to
adjustment except in the case of stock splits, consolidations and similar
transactions.

TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY ................................................... 2
RISK FACTORS.......................................................... 4
COMPARATIVE SHARE DATA .............................................. 7
MARKET FOR COMMON STOCK .............................................. 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION............................................ 10
BUSINESS.............................................................. 17
MANAGEMENT ........................................................... 28
PRINCIPAL SHAREHOLDERS................................................ 38
SELLING SHAREHOLDERS.................................................. 40
DESCRIPTION OF SECURITIES............................................. 43
LEGAL PROCEEDINGS..................................................... 46
EXPERTS............................................................... 46
INDEMNIFICATION ...................................................... 46
AVAILABLE INFORMATION................................................. 47
FINANCIAL STATEMENTS..................................................

No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by L.A.M. This prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, any of the securities offered in any
jurisdiction to any person to whom it is unlawful to make such an offer in such
jurisdiction. Neither the delivery of this prospectus nor any sale made in this
prospectus shall, under any circumstances, create any implication that the
information in this prospectus is correct as of any time subsequent to the date
of this prospectus or that there has been no change in the affairs of L.A.M.
since such date.

PART II
Information Not Required in Prospectus

Item 24. Indemnification of Officers and Directors

The Delaware General Corporation Law and L.A.M.'s Certificate of
Incorporation and Bylaws provide that we may indemnify any and all of its
officers, directors, employees or agents or former officers, directors,
employees or agents, against expenses actually and necessarily incurred by them,
in connection with the defense of any legal proceeding or threatened legal
proceeding, except as to matters in which such persons shall be determined to
not have acted in good faith and in our best interest.

Item 25. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses payable by us in
connection with the issuance and distribution of the securities being registered
hereunder. No expenses shall be borne by the selling stockholder. All of the
amounts shown are estimates, except for the SEC Registration Fees.

SEC Filing Fee $ 36
Blue Sky Fees and Expenses 400
Printing and Engraving Expenses 200
Legal Fees and Expenses 30,000
Accounting Fees and Expenses 10,000
Miscellaneous Expenses 4,364
-------
TOTAL $45,000
=======

All expenses other than the SEC and NASD filing fees are estimated.

Item 26. Recent Sales of Unregistered Securities.

A. In September 1998, L.A.M. acquired all of the issued and outstanding
shares of LAM Pharmaceuticals LLC ("LAM") for 6,000,000 shares of L.A.M.'s
common stock. At the time of acquisition LAM had the rights to the proprietary
drug delivery technology and pharmaceuticals that are being developed by L.A.M.

B. In September 1998, L.A.M. sold 3,930,000 shares of its common stock to
twelve persons for $39,300, or $0.01 per share, and sold 63,000 shares of its
common stock to 61 persons for $6,300, or $0.10 per share. Between October 1998
and October 1999 L.A.M. sold 399,500 shares of its common stock to 18 persons
for $399,500, or $1.00 per share.

C. Between June 1999 and February 2000, L.A.M. sold convertible notes in
the principal amount of $1,517,000 to 29 persons. The notes were unsecured, bore
interest at 9.5% per year, and were due and payable at various dates between
June 2000 and February 2001. At the option of the holder, each $1.00 of unpaid
note principal was convertible into two shares of L.A.M.'s common stock.

D. Between June and July 2000 L.A.M. sold convertible notes in the principal
amount of $130,500 to 12 persons. The notes were unsecured and bore interest at
9.5% per year and were due and payable at various dates between June and July
2001. At the option of the holder, each $1.00 of (unpaid note) principal was
convertible into .33 shares of L.A.M.'s common stock. In August 2001, L.A.M.
increased the number of shares issuable upon conversion to 1.916 shares of
unpaid note principal and grant options, expiring August 25, 2002, to purchase 1
further share of L.A.M's common stock for each 10 shares issued on conversion.

E. Between August and November 2000 L.A.M. sold convertible notes in the
principal amount of $2,070,333 to 34 persons. The notes were unsecured and bore
interest at 9.5% per year, and were due and payable at various dates between
August and November 2001. At the option of the holder, each $1.00 of unpaid
principal was convertible into .57 shares of L.A.M.'s common stock. In August
2001, L.A.M. increased the number of shares issuable upon conversion to 1.916
shares of unpaid note principal and grant options, expiring August 25, 2002, to
purchase 1 further share of L.A.M's common stock for each 10 shares issued on
conversion.

F. During the year ended December 31, 2000 L.A.M. issued 3,319,430 shares of
common stock upon the conversion of certain of the notes described in C, D and E
above.

G. Between July and December 2000 L.A.M. issued 287,000 shares of common stock
to thirteen persons as a result of the exercise of options held by such persons.

H. During January 2001 L.A.M. issued 73,000 shares of common stock to two
persons as a result of the exercise of options held by these persons.

I. In January 2001 L.A.M. issued 10,000 shares of common stock to one person for
services rendered.

J. In January 2001 L.A.M. issued warrants to Hockbury Limited and GKN Securities
Corp. These warrants are described in more detail in Part I of this Registration
Statement.

K. During the year ending December 31, 2001, L.A.M. issued 3,959,669 shares of
L.A.M.'s common stock upon conversion of certain of the notes referenced in
Notes D and E above.

L. During the year ended December 31, 2002 the Company issued 2,221,500 shares
of its common stock to nine persons for services rendered

The sales of the shares referenced in Note B were exempt from registration
pursuant to Rule 504 of the Securities and Exchange Commission. At the time of
these sales L.A.M. was not subject to the reporting requirements of the
Securities Exchange Act of 1934 and the total amount received by L.A.M. from the
sale of these shares was less than $1,000,000. No underwriters were involved
with the sale of these securities and no commissions or other forms of
remuneration were paid to any person in connection with these sales.

The sale of the common stock, convertible notes and warrants referenced in
Notes A, C, D, E, G, H, I, J and L were exempt transactions under Section 4(2)
of the Securities Act of 1933 as transactions by an issuer not involving a
public offering. The shareholders of LAM and the holders of the convertible
notes acquired these securities for investment purposes only and without a view
to distribution. At the time, the shareholders of L.A.M. and the holders of the
convertible notes acquired these securities, all were fully informed and advised
about matters concerning L.A.M., including its business, financial affairs and
other matters. The shareholders of LAM and the holders of the convertible note
acquired the securities for their own account. The certificates evidencing the
securities purchased by the shareholders of LAM bear a legend stating that they
may not be offered, sold or transferred other than pursuant to an effective
registration statement under the Securities Act of 1933, or pursuant to an
applicable exemption from registration. The shares purchased by the shareholders
of LAM and the holders of the convertible note are "restricted" securities as
defined in Rule 144 of the Securities and Exchange Commission. Although no
underwriters were involved with the sale of these securities, L.A.M. paid sales
commissions of $381,300 to an unrelated third party in connection with the sale
of its convertible notes.

The issuance of the shares referenced in Notes F and K were exempt
pursuant to Section 3(a)9 of the Securities Act of 1933.

Item 27. Exhibits

The following Exhibits are filed with this Registration Statement:

Exhibit
Number Exhibit Name Page

Exhibit 2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation, etc. None

Exhibit 3 Articles of Incorporation and Bylaws (1)
------------
Exhibit 4 Instruments Defining the Rights of Security Holders

Exhibit 4.1 Incentive Stock Option Plan (3)
------------

Exhibit 4.2 Non-Qualified Stock Option Plan (as amended) (3)
------------

Exhibit 4.3 Stock Bonus Plan (as amended) (3)
------------

Exhibit 5 Opinion of Counsel
------------

Exhibit 9 Voting Trust Agreement None

Exhibit 10 Material Contracts

Exhibit 10.1 Agreements with Ixora Bio-Medical Co. (1)
------------

Exhibit 10.2 Common Stock Purchase Agreement with
Hockbury Limited (2)
------------

Exhibit 10.3 Stock Purchase Warrant issued to
Hockbury Limited (2)
------------

Exhibit 10.4 Stock Purchase Warrant issued to
GKN Securities Corp. and certain
employees of GKN Securities Corp. (2)
------------

Exhibit 10.5 Securities Purchase Agreement (together
with Schedule required by Instruction
2 to Item 601 Regulation S-K) (3)
------------

Exhibit 15 Letter on Unaudited Interim Financial Information __________

Exhibit 23.1 Consent of attorneys ------------

Exhibit 23.2 Consent of accountants __________

(1) Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form 10-SB.
(2) Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form SB-2 (Commission File No. 333-56390).
(3) Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form SB-2 (Commission File No. 333-101676).

Item 28. Undertakings

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement.

(i) To include any Prospectus required by Section l0 (a)(3) of the
Securities Act of l933;

(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement, including
(but not limited to) any addition or deletion of a managing underwriter.

(2) That, for the purpose of determining any liability under the
Securities Act of l933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(4) To provide to the Underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the Underwriter to permit prompt delivery to each
purchaser.

(5) Insofar as indemnification for liabilities arising under the
Securities Act of l933 may be permitted to directors, officers and controlling
persons of the Registrant, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

POWER OF ATTORNEY

The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to execute in the
name and in behalf of the Registrant and any such person, individually and in
each capacity stated below, any such amendments to this Registration Statement.

SIGNATURES

Pursuant to the requirements of the Securities Act of l933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Toronto, Ontario, on
the 14th day of February, 2003.

L.A.M. PHARMACEUTICALS, CORP.

By:/s/ Joseph Slechta
Joseph Slechta, President, Chief
Executive Officer and Principal Financial
Officer

Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date

/s/ Joseph Slechta
Joseph Slechta Director February 14, 2003

/s/ Peter Rothbart
Peter Rothbart Director February 14, 2003

/s/ Gary M. Nath
Gary M. Nath Director February 14, 2003