As filed with the Securities and Exchange Commission on March __, 2000

Registration No.
------------------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2
Registration Statement
Under The
Securities Act of 1933

MOLECULAR DIAGNOSTICS & THERAPEUTICS, INC.
(Name of Small Business Issuer in its Charter)

Colorado
---------------------------------
(State or Other Jurisdiction
of Incorporation or Organization)

2835
----------------------------
(Primary Standard Industrial
Classification Code Number)

84-1191749
-------------------
(I.R.S. Employer
Identification No.)

1880 Industrial Circle, Suite B-3
Longmont, Colorado 80501
(303) 485-8500
-------------------------------------------------------------
(Address and Telephone Number of Principal Executive Offices)

1880 Industrial Circle, Suite B-3
Longmont, Colorado 80501
-------------------------------------------
(Address and Principal Place of Business or
Intended Principal Place of Business)

Malcolm H. Benedict
2595 Canyon Blvd.,
Suite 160
Boulder, CO 80302
(303) 485-8500
---------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)

Copy to:
Arnold R. Kaplan
Reinhart, Boerner, Van Deuren, Norris & Rieselbach, P.C.
1775 Sherman Street, Suite 2100
Denver, Colorado 80203
(303) 831-0909

Approximate Date of Proposed Sale to the Public:
As soon as practicable after this Registration Statement becomes effective.

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 this Form is a post-effective amendment filed pursuant to Rule
462(d) 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, check the following box. [ ]

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

CALCULATION OF REGISTRATION FEE

=====================================================================================================================

Proposed Maximum Proposed Maximum Amount of
Title Each Class of Securities Amount To Be Offering Aggregate Registration
To Be Registered Registered Price per share(1) Offering Price Fee
- ----------------------------------------------------------------------------------------------------------------------

Common Stock, $.01 par value 1,000,000 $10.00 $10,000,000 $2780
- ----------------------------------------------------------------------------------------------------------------------
Representative's Warrants to purchase 66,667 $.0001 $ 6.67 --
Common Stock
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value, 66,667 $10.00 $ 666,670 $ 185
issuable upon Exercise of
Representative's Warrants(1)
- ----------------------------------------------------------------------------------------------------------------------
Total.................................................$2965
- ----------------------------------------------------------------------------------------------------------------------

(1) Estimated solely for purposes of calculating the registration fee.

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 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

MOLECULAR DIAGNOSTICS & THERAPEUTICS, INC.

CROSS-REFERENCE SHEET
(Between Items of Form SB-2 and Prospectus)

Form SB--2 Item No. and Caption Prospectus Captions

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

1. Front of Registration Front Cover Page; Plan of Distribution.
Statement and Outside Front
Cover of Prospectus.
- -------------------------------------------------------------------------------------------------------------------------
2. Inside Front and Outside Back Inside Front Cover Page;
Cover Pages of Prospectus. Available Information; Back Cover Page.
- -------------------------------------------------------------------------------------------------------------------------
3. Summary Information and Risk Prospectus Summary; The Company;
Factors. Risk Factors.
- -------------------------------------------------------------------------------------------------------------------------
4. Use of Proceeds. Use of Proceeds.
- -------------------------------------------------------------------------------------------------------------------------
5. Determination of Offering Price. Plan of Distribution.
- -------------------------------------------------------------------------------------------------------------------------
6. Dilution. Dilution.
- -------------------------------------------------------------------------------------------------------------------------
7. Selling Security Holders. Not Applicable.
- -------------------------------------------------------------------------------------------------------------------------
8. Plan of Distribution. Front Cover Page; Plan of Distribution.
- -------------------------------------------------------------------------------------------------------------------------
9. Legal Proceedings. Business.
- -------------------------------------------------------------------------------------------------------------------------
10. Directors, Executive Management; Principal Stockholders.
Officers, Promoters and
Control Persons.
- -------------------------------------------------------------------------------------------------------------------------
11. Security Ownership of Certain Beneficial Principal Stockholders.
Owners and Management.
- -------------------------------------------------------------------------------------------------------------------------
12. Description of Securities. Description of Capital Stock.
- -------------------------------------------------------------------------------------------------------------------------
13. Interest of Named Experts and Counsel. Experts.
- -------------------------------------------------------------------------------------------------------------------------
14. Disclosure of Commission Position on Indemnification.
Indemnification for Securities Act
Liabilities.
- -------------------------------------------------------------------------------------------------------------------------
15. Organization Within Last Five Not Applicable.
Years.
- -------------------------------------------------------------------------------------------------------------------------
16. Description of Business. Business.
- -------------------------------------------------------------------------------------------------------------------------
17. Management's Discussion and Analysis or Plan of Plan of Operation.
Operation.
- -------------------------------------------------------------------------------------------------------------------------
18. Description of Property. Business.
- -------------------------------------------------------------------------------------------------------------------------
19. Certain Relationships and Related Transactions. Certain Transactions.
- -------------------------------------------------------------------------------------------------------------------------
20. Market for Common Equity and Related Stockholder Front Cover Page; Capitalization; Dividends; Description
Matters. of Securities; Principal Shareholders.
- -------------------------------------------------------------------------------------------------------------------------
21. Executive Compensation. Management.
- -------------------------------------------------------------------------------------------------------------------------
22. Financial Statements. Selected Financial Data; Financial Statements.
- -------------------------------------------------------------------------------------------------------------------------
23. Changes in and Disagreements With Accountants Not Applicable.
on Accounting and Financial Disclosure.
- -------------------------------------------------------------------------------------------------------------------------

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

1,000,000 Shares

Molecular Diagnostics & Therapeutics, Inc.

Common Stock

1,000,000

This offering includes a minimum escrowed number of shares (200,000)
equal to $2,000,000 and a maximum number of shares (1,000,000) equal to
$10,000,000. The minimum must be reached by ______, 200_, which period may be
extended for an additional 180 days at the option of the Company, or funds will
be returned without interest.

Prior to this offering, there has been no public market for the common
stock. The Company is applying for listing on The NASDAQ Small Cap Market.

Please see "Risk Factors" beginning on page 6 to read about certain
factors you should consider before buying shares of any common stock.

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

Neither the Securities and Exchange Commission nor any other regulatory
body 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.

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

Total Total
Per Share Minimum Maximum
--------- ---------- -----------

Public offering price $10.00 $2,000,000 $10,000,000
Underwriting discount $ .80 $ 160,000 $ 800,000
Proceeds, before expenses, to the Company $ 9.20 $1,840,000 $ 9,200,000
--------- ---------- -----------

THREE ARROWS CAPITAL CORP. TRAVIS MORGAN SECURITIES, INC.

Prospectus dated March ___, 2000

Page 2, inside front cover, a graphical representation of the
Company's objectives and vision.

[photo]

M.D.T.I. Proposed Manufacturing & PET Facility

[photo] [photo]

TR-30 Cyclotron Computerized Robotics

[photo]

G.E. PET Camera (one of the many available)

PROSPECTUS SUMMARY

You should read the following summary, together with the more detailed
information concerning the Company, including the Company's financial statements
and notes to those financial statements, that appear elsewhere in this
prospectus. Because of the technical nature of the Company's proposed business,
we have included a Glossary of scientific and technical terms used in this
prospectus beginning on page 38.

Our Business

We plan to manufacture, market and distribute a range of
radiopharmaceuticals and radiochemicals to the nuclear medicine industry, an
endeavor that represents the merger of medicine and biology. We will employ new
machines and techniques in a proprietary approach that gives superior quality
products while sharply lowering costs. Radiopharmaceuticals and radiochemicals
are used as radioisotopes for identifying and labeling radioactive elements in
medical diagnostics, biological research and commercial applications. According
to the Institute of Medicine, while the production methods of
radiopharmaceuticals are antiquated, the nuclear medicine industry is growing
substantially, with an estimated $7 to $10 billion dollars spent annually in the
United States alone, thirteen percent (13%) of which represents radioisotopes.
We will employ an Internet site for our marketing applications and to serve as
one of the portals for all levels of users. We believe our production and
distribution approach establishes a new standard for the industry.

Our Approach

Nuclear medicine is the field that administers radioactive drugs
(radioactive tracers and pharmaceuticals) to patients for the diagnosis of
diseases such as heart disease and cancer. When these radiopharmaceuticals are
given to a patient, they are taken up within the body according to their
physical and chemical properties. These individual radiopharmaceuticals are
chosen based on their attraction for particular body organs or other sites of
clinical concern. Radiopharmaceuticals are different from standard
pharmaceuticals since they are not intended to change the body's normal
biological functions. Radioisotopes behave chemically and pharmacologically in a
manner similar to their non-radioactive counterparts. Due to complacency within
the industry, higher quality, cost-effective, diagnostic drug products have not
been produced for the past fifteen to twenty years. We intend to acquire several
unique and powerful new cyclotrons that will provide us with the capability to
make less expensive and purer isotopes than the competition. We will combine our
manufacturing approach with a computerized robotic system that:

o Reduces manufacturing labor costs;
o Enables a 24-hour production and quality control cycle;
o Reduces staff exposure to radiation;
o Eliminates expensive, repetitive errors;
o Guarantees consistent quality with every batch of radiopharmaceuticals;
and
o Permits local delivery with lower inventory wastage.

Our system replaces lower amperage, single beam instruments using
manual procedures that have produced poorer quality and higher cost . We believe
that:

o Our technology and process will change the production methods for
radiopharmaceuticals;
o We have sharply superior technology compared to existing manufacturers;
o We can manufacture with high gross margins;
o Our products will improve the quality of healthcare.

We are prepared to file the necessary applications required for
licensing and regulatory approval from the Colorado Department of Public Health
and Environment--State Laboratory and Radiation Services Division for the
handling of radioactive materials and with the Food and Drug Administration
("FDA") for the operation of a nuclear medicine laboratory and for the
production of iodine radiochemical products. Under an agreement between the
State of Colorado and Nuclear Regulatory Commission ("NRC"), approval of our
application by the State of Colorado will provide us with all necessary approval
by the NRC. We have contracted for the acquisition of several of the most
powerful isotope production cyclotrons of their kind. Our initial eight
radiopharmaceuticals provide the highest market opportunity for us. See
"Business - Business Strategy."

Business Strategy

Our success will be dependent, in large part, upon our ability to
identify and adequately penetrate the market for our radiochemical and
radiopharmaceutical products. We plan to acquire a TR-30 million electron volt,
1.2 milli amperes negative ion technology cyclotron, designed by our CEO and
manufactured by EBCO Technologies, Inc. which, together with our automated
robotic system for the manufacture of our products, will provide us with the
most powerful isotope production cyclotron of their kind. This instrument is
capable of providing higher beam current and multiple (5) beam lines. Increasing
the beam current focuses higher energy that produces higher purity radionuclides
with greater commercial yields. Multiple beam lines increase the number of
radionuclides produced at a given time. We believe that no other company has
this technology.

We will also produce technetium-99m generators. The technetium-99m
generator was introduced in the late 1960's to provide the benefits of on-site
production of the radioactive nuclide technetium-99m. This type of generator
consists of a long-life radionuclide which, when processed in the generator,
produces the radiopharmaceutical technetium-99m; technetium-99m is used in
certain diagnostic procedures.

The radionuclide producing equipment, coupled with computerized
robotics, provide a fully automated and integrated system for the manufacture of
radionuclides. Computerized robotic manufacturing provides numerous advantages
to the system for the production of radionuclides by generating higher purity,
higher yield, and cost-effective radiopharmaceuticals. Our system replaces
instruments using manual procedures for the production of radiopharmaceuticals.
These antiquated instruments, coupled with outdated procedures, produce poor and
inconsistent quality, low yield, and higher cost radiopharmaceuticals.

Recent Developments

We are currently negotiating for interim loan financing in an amount up
to $1,000,000 million dollars, which will be used to open and equip our
temporary facility and obtain the raw materials necessary to begin manufacturing
and marketing of sodium iodide 123. We have also obtained a commitment from
D.V.I. Financial Services, Inc. to finance the acquisition of our first
cyclotron from EBCO Technologies, Inc., in the amount of $10 million, upon our
having a net worth of at least $2.5 millions dollars and fulfilling other
conditions contained in the commitment. This equipment financing will be in the
form of an equipment lease.

Our Offices

Our principal executive offices are located at 1880 Industrial Circle,
Suite B-3, Longmont, CO 80501, and our telephone number is (303) 485-8500; fax
(303) 485-7099. The address of our corporate website is
www.moleculardiagnostics.com. Information contained on our website does not
constitute part of this prospectus. We expect to lease our temporary facility
and construct our permanent facility for our manufacturing operations in
Longmont, Colorado; however, we have not identified a specific site for our
temporary facility at this time. With respect to our permanent facility, we have
entered into a contract to purchase approximately 5.5 acres of land (with an
option for an additional 5 acres) in Weld County, Colorado, upon which we plan
to construct our permanent facility. That contract is subject to the fulfillment
of several conditions, and we cannot guarantee at this time that the purchase
will be completed. See "BUSINESS - Our Facilities."

We are a development stage company that was organized under the laws of
the State of Colorado on February 19, 1992.

The Offering

Shares offered by the Company.................... 1,000,000

Shares to be outstanding after this
offering, if all shares are purchased........ 9,654,515

Use of Proceeds............................... Deposit on building;
Purchase of equipment for our
plant; Working capital and
general corporate purposes.
See "USE OF PROCEEDS."

SUMMARY FINANCIAL INFORMATION

The following summary financial and other data for each of the years
ended March 31, 1999 and 1998 have been derived from our audited financial
statements included elsewhere in this prospectus. The summary financial and
other data for each of the nine months ended December 31, 1999 and December 31,
1998 are derived from our unaudited financial statements which, in our opinion,
consist of normal recurring adjustments necessary for a fair presentation of
this information, have been prepared on the same basis as the audited financial
statements, and include all adjustments necessary to a fair presentation of this
information. We have not commenced operations at this time and have had no sales
as of this date. You should read "Plan of Operations" and our financial
statements and notes included elsewhere in this prospectus for a further
explanation of the financial data summarized here.

Year Ended March 31, Nine Months Ended December 31,
-------------------- ------------------------------
1998 1999 1998 1999
---- ---- ---- ----
Statement of Operations Data: (unaudited) (unaudited)
- ----------------------------

Revenues $ 0 $ 0 $ 0 $ 0
Gross profit (loss) -0- -0- -0- -0-
Income (loss) from operations (277,085) (751,817) (382,066) (508,777)
Net income (loss) - historical
Historical net income (loss) (0.04) (0.10) (0.05) (0.06)
Weighted average common shares
Outstanding(1) 6,763,943 7,608,692 7,518,516 8,346,570

(1) After giving effect to a 3 for 2 reverse stock split completed in November,
1999

Balance Sheet Data: At March 31, 1999 At December 31, 1999
- ------------------ ----------------- --------------------
(unaudited)
-----------
Working capital (3,045) $ 26,652
Total assets 40,431 69,154
Total liabilities 9,940 17,742
Shareholders' equity 30,491 51,412

RISK FACTORS

An investment in the shares of common stock offered this prospectus
involves a high degree of risk. In addition to the other information contained
in this prospectus, including the financial statements, notes thereto and the
Glossary (beginning on page 38), the following risk factors should be considered
carefully by prospective investors, who should be in a position to risk the loss
of their entire investment.

No operating history makes evaluating our business difficult;
Development Stage Company.

Although we were incorporated in 1992, we are in the development stage
and have not sold any radiochemical or radiopharmaceutical products. As a
result, we have no operating history upon which you may evaluate our business
and prospects. Our prospects must be considered in light of risks, expenses,
delays, problems and difficulties frequently encountered by development stage
companies. We have not filed any application for licensing and have not received
any regulatory approval for our products or our operations. Until such time, if
ever, as we file necessary applications and receive necessary regulatory
approvals, we will not be able to commence operations.

We may be unable to meet our future capital requirements.

Based on our current operating plan, we anticipate that the net
proceeds of this offering and cash provided by operations will allow us to meet
our cash requirements for at least 12 months. However, we may require additional
funding sooner than anticipated. In addition, unplanned acquisition and
development opportunities may arise, which could require us to raise additional
capital. If we raise additional capital through the sale of equity, including
preferred stock and/or convertible debt securities, the percentage ownership of
our then existing shareholders will be diluted. We cannot be certain that
additional financing will be available when we may need it. If adequate funds
are not available on acceptable terms, we may be unable to obtain necessary
federal and state licenses and regulatory approvals, fund our expansion, develop
or enhance our products, or respond to competitive pressures. This limitation
could have a material adverse effect on our business, financial condition and
results of operations.

Our current financial position is precarious and our auditors have a
"going-concern" issue.

Since December 31, 1999, our working capital position has continued to
deteriorate. At December 31, 1999, we had an accumulated deficit of $2,485,312.
We had a net loss for the nine months ended December 31, 1999 of $508,777. These
losses have resulted in significant liquidity problems for us. Our independent
auditors issued their report, dated June 22, 1999, for the year ended March 31,
1999, which indicates that our losses and liquidity problems have raised
substantial doubt about our ability to continue as a going concern. See
"Financial Statements for the Years Ended March 31, 1999 and 1998.

Best efforts offering and limited state registrations means the funds
sought in this offering may not be achieved

This offering of the Company's common stock is conducted on a "best
efforts" basis by Three Arrows Capital Corp. and Travis Morgan Securities, Inc.
We are required to sell a minimum of 200,000 shares within a six month time
period (which period may be extended for an additional 180 days, at the option
of the Company) to break escrow, and no funds will be released to the Company
until such time as this sale has been made. No underwriter, placement agent, or
other person has contracted with the Company to purchase or sell all or any of
the shares. There is no assurance that we will be capable of selling all or any
of the shares. If less than all of the shares offered are sold, we will not be
able to rapidly realize the plans set forth in the Business section of this
prospectus and will rely instead on our internal growth and/or bank or other
financing for our expansion. Additionally, this offering will be qualified in a
limited number of states, which means that not all potential buyers of the
shares will be able to do so without separate registration or an exemption from
registration.

If we lose our key personnel or are unable to recruit additional
personnel, our business may suffer

We are dependent on the efforts of our senior management and scientific
staff, including Malcolm Benedict, Dr. Donald Ludwig, and others. Currently, Mr.
Benedict and Dr. Ludwig are the only members of our management who have any
experience or expertise in radiochemical and radiopharmaceutical business. The
loss of either of these individuals could have a material adverse effect upon
us. We intend to apply for key man life insurance policies on the lives of Mr.
Benedict and Dr. Ludwig. The coverage under these policies may be inadequate to
compensate us for the loss of any of these individuals. Our future success will
depend in large part upon our ability to attract and retain skilled scientific,
management, operational and marketing personnel, as to which we can offer no
assurance.

We may experience limited resources for raw materials

Enriched stable isotopes, which are used as targets, are bombarded with
protons to produce radioisotopes. The principal United States source for
enriched stable isotopes is the Oak Ridge National Laboratory in Oak Ridge,
Tennessee, which relies on government funding for continuing production.
Although these isotopes are currently also available from Germany, Russia,
Israel, Canada, South Africa, China and other foreign sources, there can be no
assurance that there will continue to be an adequate supply of enriched stable
isotopes. This lack of supply could materially adversely impact our ability to
manufacture radiochemicals and radiopharmaceuticals, which in turn, would have a
material adverse effect upon us. Although the energy level and beam intensity of
our system are expected to be sufficient to produce most radiochemicals and
radiopharmaceuticals from unenriched stable isotopes, which are in abundant
supply, the production process will require various proprietary chemical
separation techniques, and we cannot assure that these techniques will be
successful.

We have intellectual property and license applications

We currently do not own any patents, though we intend on filing patent
applications for some of our modifications and improvements, and to protect
others as trade secrets. We cannot assure, however, that patents on such
modifications and improvements will be issued or, if issued, that such patents
or modifications and improvements protected as trade secrets will provide
meaningful protection. We intend to proceed with or without patent protection,
since we believe that the disclosure requirements of federal patent laws provide
competitors with easy access to the secrets of rapid changing technology. Third
parties may have filed applications for, or may have been issued patents and may
obtain additional patents and proprietary rights related to, products or
processes competitive with or similar to ours. We may not be aware of all
patents potentially adverse to our interests that may have been issued to
others, and we cannot assure that such patents do not exist or have not been
filed or may not be filed or issued. If patents have been or are issued to
others containing conflicting claims and such claims are ultimately determined
to be valid, we may be required to obtain licenses or to develop or obtain
alternate technology. We cannot assure that such licenses, if required, would be
available on commercially acceptable terms, if at all, or that we would be able
to develop or obtain alternate technology, which would have a material adverse
effect on us. We cannot assure that the validity of any of the patents licensed
to, or that may in the future be owned by, us would be upheld if challenged by
others in litigation, or that our technologies, even if covered by our patents,
would not infringe patents owned by others. We could incur substantial costs in
defending suits brought against us or any of our licensors for infringement, in
suits by us against others for infringement, or in suits contesting the validity
of a patent. Any such proceedings may be lengthy. In any suit contesting the
validity of a patent, the patent being contested would be entitled to a
presumption of validity and the contesting party would be required to
demonstrate invalidity of the patent by clear and convincing evidence. If the
outcome of any litigation were to be adverse to our interests, our business
would be materially adversely affected. In certain instances, we may choose not
to seek patent protection and may rely on trade secrets and other confidential
know-how to protect our innovations. There can be no assurance that protectable
trade secrets or know-how will be established or, if established, that they will
remain protected or that others will not independently and lawfully develop
similar or superior innovations. We require all employees to sign non-disclosure
agreements with us. All directors and consultants, other than members of the
Company's medical and scientific advisory board, will execute agreements
containing confidentiality provisions. We cannot assure, however, that any
confidentiality agreements will be complied with or will be enforceable.

Government regulation can prove expensive and difficult to comply with

The manufacture and sale of radiochemicals and radiopharmaceuticals is
subject to extensive federal and state regulation. Prior to commencing
operations, approval of our temporary and permanent production facilities must
be obtained from various state and federal agencies. In addition, the U.S.
Department of Transportation ("DOT") regulates the quantity and method of
shipment of radioactive materials, and sets specifications with respect to the
class of shipping containers used. Our facilities will be subject to continual
inspection for compliance with the federal current good manufacturing practice
regulations, which require that we manufacture radiochemicals and
radiopharmaceuticals and maintain manufacturing, testing and quality control
records in a prescribed manner.

We also will be subject to regulation by the United States
Environmental Protection Agency ("EPA"), various natural resource commissions
and the United States Occupational Safety and Health Administration ("OSHA")
with respect to the radioactive content of water and air discharges and the
handling and disposal of radioactive waste. The failure to obtain, or delay in
obtaining, any such approvals, or the failure to comply with any such
regulations would have a material adverse effect on us. Our production of
radiochemicals and radiopharmaceuticals will involve the controlled use of
hazardous materials, chemicals and various radioactive substances. Although our
compliance with safety procedures for handling, storing and disposing of
materials prescribed by state and federal regulations is a prerequisite to
commencing the manufacture and sale of radiochemicals and radiopharmaceuticals,
the accidental contamination or injury from these materials will be a continuing
risk. The FDA regulates the clinical testing, manufacturing, labeling and
distribution of medical devices in the United States. Any radiochemicals and
radiopharmaceuticals developed under arrangements between us and medical
institutions and universities will require the prior approval of the FDA, which
has established mandatory procedures and standards for the clinical testing,
manufacture and marketing of therapeutic and diagnostic products. This could be
a protracted and costly process.

We may have to divert the use of funds from this offering to other purposes

Although we intend to apply net proceeds from the sale of the common
stock in the manner described under "Use of Proceeds," we have broad discretion
within such proposed uses as to the precise allocation of the net proceeds, the
timing of expenditures and all other aspects of the use thereof.

Our technology may become obsolete

Competition is intense within the nuclear medicine industry; however,
we believe there currently is no producer within the United States of
radiochemicals and radiopharmaceuticals with the purity and quantity that we
expect to produce for commercial sale to the nuclear medicine industry.
Currently, radiochemicals and radiopharmaceuticals produced by cyclotron
accelerators are manufactured in the United States principally by E.I. duPont
and Company, Merck & Co., Inc., Mallinckrodt Inc., International Isotopes, Inc.,
Amersham Pharmacia Biotech Ltd. and Theragenics Corporation (the "Radiochemical
and Radiopharmaceutical Producing Companies") primarily, we believe, for their
own radiochemical and radiopharmaceutical products. We believe that hospitals,
medical institutions and universities also produce certain short-lived
radiochemicals and radiopharmaceuticals utilizing small cyclotron accelerators,
principally for their own needs. The Radiochemical and Radiopharmaceutical
Producing Companies have substantially greater capital and other resources than
we do. The U.S. government also produces radioisotopes, primarily for research
purposes, in three national laboratories, Brookhaven National Laboratory, Los
Alamos National Laboratory and Oak Ridge National Laboratory. Outside the United
States, MDS/Nordion, Inc., a Canadian firm, and Mallinckrodt, N.V. at Petten, a
Netherlands firm, which also have substantially greater capital and other
resources than the Company, are major producers of cyclotron-produced and
reactor-produced radioisotopes. MDS/Nordion, Inc. currently supplies a
significant portion of the radioisotopes used in the diagnostic nuclear medicine
industry in the United States, and we cannot assure that we will be able to
compete successfully with that firm. We cannot assure that we will be able to
compete successfully against any competitor or potential competitor.

Some local residents may complain about a nuclear facility within their
neighborhood

Some residents of local areas may voice concerns about the potential
environmental hazards associated with the construction of our facility and our
operations. We believe that construction of the facility and our proposed plan
of operation will not be adversely affected by the residents' expressions of
concern, although we can give no assurance about that.

We may be subject to conflicts of interest

Members of management of the Company may in the future serve as
officers, directors, controlling shareholders and/or in other positions of
management and/or control with other corporations or other business entities.
Some of our executive officers and/or directors may divide their time and
efforts between the Company and their other employment and/or business
obligations. Because of these potential future associations , there may be
potential conflicts of interest in their acting as executive officers and/or
directors of the Company.

Furthermore, to further assist in the development of our technologies,
we have established a group of technical advisors comprised of individuals with
technical and scientific credentials who are expected to advise us on technical
and scientific issues. There can be no assurance that we will be successful in
maintaining such a group. We anticipate that the technical advisors will review
the technical progress of our products, engineering and research and
development. We may obtain technical advisors individually on a consulting basis
to perform work specifically for and at our direction. We do not intend to
retain individuals to serve as technical advisors whose primary employers, or
other third parties with whom such individuals have consulting arrangements, are
in competition with us; however, our technical advisors will likely be employed
on a full-time basis by academic or research institutions. Accordingly, our
technical advisors will be able to devote only a portion of their time to our
business and research activities and may have potential conflicts of interest.

We have huge power requirements and are dependent upon a steady
source of electricity

The operation of the cyclotron will be dependent upon receiving 300
kilowatts of electric power 24 hours per day, seven days per week, and any power
interruption could materially affect our operations. We have elected to receive
power from United Power, located in Brighton, Colorado, although there are other
power sources readily available through the regional system. We also expect to
have a backup generator system.

Health care reimbursement changes and health care reform could endanger
our revenues

We anticipate that we will sell our radiochemicals and
radiopharmaceuticals to hospitals and clinics that provide health care services
to their patients. Such institutions and patients typically bill, or seek
reimbursement from, various third party payors, such as Medicare, Medicaid,
other government programs and private insurance carriers, for the charges
associated with the health care services provided. Similarly, we anticipate that
a large percentage of our revenues from our PET diagnostic imaging center will
come from third-party party payors. We believe that our ability to sell
radiochemicals and radiopharmaceuticals, and our ability to operate our PET
diagnostic imaging center at levels sufficient to be profitable, will be
directly related to the coverage and reimbursement policies of third party
payors. If government and third party payors do not provide adequate coverage
and reimbursement levels, the market acceptance of our products and services
would be materially adversely affected. Health care reform proposals have been
introduced in Congress and in various state legislatures. It is currently
uncertain whether any health care reform legislation will be enacted at the
federal level, or what actions governmental and private payors may take in
response to the suggested reforms. Such reforms, if enacted, may affect the
availability of third-party reimbursement for PET diagnostic imaging services
and radiochemical and radiopharmaceutical products as well as the price levels
at which we will be able to sell such services and products. We cannot predict
when any proposed reforms will be implemented, if ever, or the effect of any
implemented reforms on our business. Any implemented reforms are likely,
however, to have an adverse effect upon us.

We have product liability for which we may not be able to secure
adequate insurance

The use of radiochemicals and radiopharmaceuticals in clinical trials
may expose us to potential product liability risks that are inherent in the
testing, manufacture, marketing and sale of human diagnostic and therapeutic
products. In addition, the failure to effect timely delivery of radiochemicals
and radiopharmaceuticals may cause a delay in a scheduled test or procedure or
result in the functional loss of radioactivity of the radiochemicals and
radiopharmaceuticals, thereby exposing us to potential liability. We currently
have no product liability insurance.

We intend to obtain product liability insurance prior to commencing
production of any radiochemicals and radiopharmaceuticals, but we cannot assure
that we will be able to obtain or maintain insurance on acceptable terms, or
that any insurance obtained will provide adequate coverage. Claims or losses in
excess of any liability insurance coverage ultimately obtained by us could have
a material adverse effect on us.

Investors in this offering will realize immediate and substantial
dilution and pay considerably more than early investors

Purchasers of the common stock in this offering will experience
immediate and substantial dilution in the net tangible book value of the shares
of common stock purchased by them in this offering of $9.04 per share or 90% per
share, assuming all shares offered by us are purchased. The current
shareholders, including our officers and directors, acquired their shares of
common stock for nominal consideration or for consideration substantially less
than the assumed initial public offering price. As a result, new investors will
bear substantially all of the risks inherent in an investment in us.

The price for the shares has been determined arbitrarily and without
regard to book value or a measurement of present value. In addition, there is no
public market for the common stock at the present time.

The initial public offering price of the common stock will be
determined arbitrarily by discussions between the Selling Agent and us. Factors
considered in such negotiations, in addition to prevailing market conditions,
will include the history and prospects for the industry in which we compete, an
assessment of our management, our prospects, our capital structure and certain
other factors as we deem relevant. Therefore, the initial public offering price
per share of the common stock will not necessarily bear any relationship to
established valuation criteria and, accordingly, may not be indicative of prices
that may prevail at any time or from time to time in the public market. Prior to
this offering, there has been no public market for the common stock, and we
cannot assure that an active trading market will develop after this offering or,
if developed, that the market will be sustained.

Payment of dividends is unlikely

We have never paid cash dividends on our common stock, and do not
expect to pay cash dividends in the foreseeable future.

A large number of shares may come on the market at a later time and
substantially depress the market price

Sales of common stock in the public market after this offering could
materially and adversely affect the market price of the common stock and might
make it more difficult for us to sell equity securities or equity related
securities in the future at a time and price that we deem appropriate. Upon the
completion of this offering, assuming all shares offered hereby are purchased,
we will have 9,654,515 shares of common stock outstanding. Of these shares, the
1,000,000 shares of common stock sold in this offering will be freely tradable
(unless held by our affiliates) without restriction. The remaining 8,654,515
shares currently outstanding are restricted securities within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The holders of
4,661,489 shares, constituting directors, executive officers, and certain
principal shareholders, have agreed for a period of 12 months after the date of
this prospectus not to sell, directly or indirectly, any shares owned by them
without the prior written consent of us and the Selling Agent.

We and the Selling Agent jointly may, at any time without notice,
release all or any portion of the shares subject to such lock-up agreements.
Prior to the expiration of the 12-month lock-up period, 4,661,489 shares and,
upon expiration of the twelve month lockup period, all of the shares of common
stock held by existing shareholders will be eligible for immediate public resale
under Rule 144, subject to the volume limitations and other requirements of Rule
144.

We may not be able to keep up with rapid technological change

Our market is characterized by rapid technological advancement and
change and frequent new product announcements. Significant technological changes
could render our existing technology obsolete. Accordingly, our business will
require substantial research and development efforts and expenditures, and our
future success will depend on our ability to enhance proposed products, reduce
product costs and develop and introduce new products to keep pace with
technological development in response to evolving customer requirements. Our
failure to anticipate or respond adequately to technological development could
result in the loss of anticipated future revenues and impair our
competitiveness. If we are unable to successfully respond to these developments
or do not respond in a cost-effective way, our business, financial condition and
results of operations will be materially adversely affected. To be successful,
we must adapt to our rapidly changing market by continually improving the
responsiveness, services and features of our products and by developing the
features necessary to meet customer needs. Our success will depend, in part, on
our ability to adapt to rapidly changing technologies to enhance existing
services and to develop the services and technologies that address the needs of
our customers.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements based on our
current expectations, assumptions, estimates and projections about our systems
and our industry. These forward-looking statements involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, as more
fully described in the "Risk Factors" section and elsewhere in this prospectus.
We undertake no obligation to update publicly any forward-looking statements for
any reason, even if new information becomes available or other events occur in
the future.

USE OF PROCEEDS

The net proceeds to us from the sale of a minimum of 200,000 shares of
common stock and a maximum of 1,000,000 shares of common stock offered by us are
estimated to be, after deducting underwriting commissions, used approximately as
follows:

Minimum

Approximate Percentage
Approximate Dollar Amount of Net Proceeds
------------------------- ----------------------

Sales, marketing and customer service $ 225,000 12%
Test and installation of equipment 125,000 7%
Expansion of production facilities 825,000 45%
Development for Proprietary Equipment 365,000 20%
Working capital and general purposes 300,000 16%
Total $ 1,840,000 100%

Maximum

Approximate Percentage
Approximate Dollar Amount of Net Proceeds
------------------------- ----------------------

Sales, marketing and customer service $ 400,000 4%
Test and installation of equipment 400,000 4%
Expansion of production facilities 6,000,000 65%
Development for Proprietary Equipment 1,600,000 17%
Working capital and general purposes 800,000 9%
Total $ 9,200,000 100%

The minimum amount will allow us to obtain the necessary licensing for
and open our temporary facility and begin production of Iodine-123
radiochemical, which should allow us to become a profitable operating company
and fund our operations for approximately 12 months. If less than the maximum
amount is raised, we will determine the proper allocation of the amount raised
to be used toward the acquisition and construction of our permanent facility,
equipping the same and commencing production of additional products, as
described in this prospectus, within the following ranges.

Sales, marketing and customer support. Represents anticipated costs
associated with marketing our systems to targeted markets (from $56,250 to
$100,000) and advertisers, including salaries for from two to four employees
that market our systems (from $112,500 to $200,000) and travel expenses with
respect to marketing (from $56,250 to $100,000).

Test and installation of equipment. Represents anticipated costs
associated with the development of our cyclotron (from $31,250 to $100,000),
robotic equipment (from $62,500 to $200,000) and PET Camera (from $31,250 to
$100,000).

Expansion of production facilities. Represents costs associated with
expanding our in-house capabilities, including proprietary equipment (from
$103,125 to $750,000), formulation equipment (from $103,125 to $750,000) and
radiation monitoring (from $125,000 to $900,000). Costs include additional
design (from $50,000 to $150,000), simulation (from $25,000 to $60,000), test
equipment (from $40,000 to $160,000) and the purchase of additional prototypes
(from $189,000 to $1,900,000). Includes salaries for from four to 20 production
employees (from $189,750 to $1,380,000).

Development for Proprietary Equipment. Represents costs associated with
protecting employees and the public from radiation exposure, including hiring
from one to five additional employees (from $54,750 to $240,000), design,
construction and testing of proprietary equipment (from $54,750 to $240,000), as
well as installation of radioactive monitoring systems (from $182,500 to
$800,000).

Working capital and general corporate purposes. Working capital may be
used, among other things, to pay offering expenses, salaries of our employees,
rent, trade payables, professional fees and other operating expenses. Please see
"MANAGEMENT."

The allocation of the net proceeds from this offering set forth above
represents our best estimate based upon all shares offered by us being purchased
and our currently proposed plans, as well as assumptions relating to our
operations and certain assumptions regarding general economic conditions. If any
of these factors change, we may find it necessary or advisable to reallocate
some of the proceeds within the above-described categories or to use portions
for other purposes.

We anticipate that the net proceeds of this offering, even on a minimum
basis, together with our projected revenues from our operations from our
temporary facility, will be sufficient to fund our operations and capital
requirements for at least 12 months following this offering. We cannot assure,
however, that such funds will not be expended earlier due to unanticipated
changes in economic conditions or other circumstances that we cannot foresee. If
our plans change or our assumptions change or prove to be inaccurate, we could
be required to seek additional financing sooner than currently anticipated. We
also expect that, when the opportunity arises, we may acquire or invest in
complementary businesses, products or technologies. We have no present
understandings, commitments or agreements with respect to any material
acquisition or investment.

Pending the use of proceeds in the manner mentioned above, the net
proceeds of this offering will be invested principally in short-term,
interest-bearing investment grade securities.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock.
We do not intend to declare or pay any dividends on our common stock in the
foreseeable future. We currently intend to retain future earnings, if any, to
finance the expansion of our business.

DILUTION

Purchasers of the common stock offered hereby will experience an
immediate and substantial dilution in the net tangible book value of their
common stock from the offering price. Our net tangible book value as of December
31, 1999 was $51,412 or $.006 per share of common stock. Net tangible book value
per share represents the amount of our tangible net worth divided by the total
number of shares of common stock outstanding as of December 31, 1999. After
giving effect to the sale of 1,000,000 shares of common stock by us in the
offering and the application of the net proceeds therefrom (assuming the maximum
offering is subscribed and after deduction of underwriting discounts and
commissions and estimated offering expenses payable), our pro forma net tangible
book value as of December 31, 1999 would have been $9,251,412 or $.958 per share
of common stock. This represents an immediate increase in net tangible book
value of $.952 per share to existing shareholders and an immediate dilution of
$9.042 per share to purchasers of shares in this offering. The following table
illustrates the per share dilution:

Offering price: $10.00
Net tangible book value per common share before the offering $ .006
Per share increase attributable to new investors $ .952
Pro forma net tangible book value per share after the offering $ .958
Dilution in net tangible book value per share to new investors $9.042

The offering price of the shares has been determined based on an
estimate by us of our earnings potential over the next five years and other
factors. See "RISK FACTORS" and "PLAN OF DISTRIBUTION." Management makes no
representations that we will generate such earnings, and there can be no
assurance as to when we will generate revenues and earnings, if ever. The
offering price is arbitrary and does not reflect our asset value, net worth,
present earnings, cash flow or any other established criteria of value. The
offering price of the shares may or may not be an indication of their present
value or the value of our Company or their future value or our future value.

CAPITALIZATION

The following table sets forth our capitalization as of December 31,
1999 and as adjusted to give effect to the sale of 1,000,000 shares (assuming
the maximum number of shares offered hereby are sold) and the application of the
estimated net proceeds therefrom, assuming an offering price at $10.00 per share
for the common stock. No stock splits, stock dividends, or other forms of
recapitalization are planned at this time. See "Use of Proceeds."

Amount Outstanding As of December 31, 1999
----------------------------------------------
Prior to Offering After Offering
----------------- --------------

Accounts Payable: $ 17,742 $ 17,742
Total Liabilities $ 17,742 $ 17,742

Shareholder's (deficit) Equity:
Preferred Stock, 5,000,000 authorized
No par value, 0 shares issued and
Outstanding on December 31, 1999 -0- -0-

Common stock, 45,000,000 authorized
No par value, 8,654,515 shares issued
and outstanding, on December 31, 1999. $2,683,279 $11,883,279
(after giving effect to stock split)

Total shareholders' equity $ 51,412 $ 9,251,412

The following table sets forth a comparison as of December 31, 1999 of
the number of shares of common stock acquired by current shareholders from us,
the total consideration paid for such shares of common stock and the average
price per share paid by such current shareholders and to be paid by the
prospective purchasers of the shares (based upon an offering price of $10.00).

Shares Purchased Consideration
--------------------- -------------------------- Average Cash Price
Number Percent Amount Percent Per Share
--------- ------- ----------- ------- ------------------

Existing shareholders* 8,654,515 89.6 $ 2,683,279 21.2 $ .31
New investors 1,000,000 10.4 $10,000,000 78.8 $10.00
--------- ------ ---------- -----
Total 9,654,515 100.0 $12,683,279 100.0 $ 1.31

- -----------------------------
* - reflect 3 for 2 reverse split

SELECTED FINANCIAL DATA

The selected statements of operations data for the years ended March
31, 1998 and March 31, 1999 and for the nine- month periods ended December 31,
1998 and December 31, 1999 and the selected balance sheet data as of March 31,
1999 and December 31, 1999 have been derived from the audited and unaudited
financial statements included elsewhere in this prospectus. Results for the nine
months ended December 31, 1999 are not necessarily indicative of those for the
full fiscal year. The data presented below should be read in conjunction with
"Plan of Operation" and the financial statements and accompanying notes thereto
appearing elsewhere in the prospectus.

Nine Months Ended
Year Ended March 31, December 31,
---------------------- ----------------------
1998 1999 1998 1999
---- ---- ---- ----
Statement of Operations Data: (unaudited) (unaudited)

Revenues $ 0 $ 0 $ 0 $ 0
Cost or revenues 0 0 0 0
Gross profit 0 0 0 0

Operating costs and expenses:
Selling, general and administrative 209,376 594,660 366,266 422,725
Research and development 67,600 157,157 15,800 86,052

Total operating costs and expenses 276,976 751,817 382,066 508,777

Income (loss) from operations (276,976) (751,817) (382,066) (508,777)
Interest income (expense), net (109) -0- -0- -0-

Net income (loss) - historical (277,085) (751,817) (382,066) (508,777)

Historical net income per share -
Weighted average common shares outstanding(1) 6,763,943 7,608,692 7,518,516 8,346,570
- basic (0.04) (0.10) (0.05) (0.06)
- diluted (0.04) (0.10) (0.05) (0.06)

(1) After giving effect to a 3 for 2 reverse stock split completed in
November, 1999

The adjusted balance sheet data as of December 31, 1999 reflects the
sale of 1,000,000 shares of common stock offered hereby after deducting the
underwriting commission and other offering expenses.

As of March 31, 1999 December 31, 1999
-------------------- ----------------
Balance Sheet Data: (unaudited)

Cash and cash equivalents $ 4,883 $44,394
Working capital $(3,045) $26,652
Total assets $40,431 $69,154
Total liabilities $ 9,940 $17,742
Total stockholders' equity $30,491 $51,412

PLAN OF OPERATION

The following Plan of Operation of the Company should be read in
conjunction with the Company's financial statements and notes thereto and the
other financial information included elsewhere in this prospectus. In addition
to historical information, this plan of operation and other parts of this
prospectus contain forward-looking information that involves risks and
uncertainties. The Company's actual results could differ materially from those
anticipated by such forward-looking information as a result of certain factors
including, but not limited to, those set forth under "Risk Factors" and
elsewhere in this prospectus.

The Company is a development stage company which intends to become a
leading domestic producer of radiochemicals and radiopharmaceuticals for retail
and commercial sale to the nuclear medicine industry. Since its inception, the
Company's operations have been limited to developing the concept for our
cyclotron and related automatic robotic system, designing facilities for its
operations, identifying land, preparing license applications and raising
capital.

As was discussed in the Use of Proceeds section, if we sell only the
minimum number of shares offered, the net proceeds will enable us to open our
temporary facility and to begin manufacturing Iodine 123. We intend to finance
the acquisition of the cyclotron, the production facility and the majority of
the robotic and manufacturing equipment. We expect to pay interest on the
construction loans and advances to the cyclotron manufacturer during the course
of construction. The following plan of operation is based upon our selling the
maximum number of shares being offered. If we sell less than the maximum, we
will determine the proper allocation of the proceeds received in excess of the
minimum net proceeds.

During the first quarter following funding, we will hire five additional
people, including a radio-chemist, a controller (CPA) and three clerical people.
We will begin filing the applications for the various licenses that will be
required. We will acquire the land for the permanent facility, including our
manufacturing facility, corporate offices and PET diagnostic imaging center. We
will also lease a temporary facility and begin constructing the robotic
processes that will be employed with the cyclotron production processes. Ebco
Technologies, Inc. will begin constructing the cyclotron and orders for related
equipment will be placed. Construction will commence upon the permit approval
process acceptance. Cash expended will be as follows:

General and administrative expenses $ 405,000
Acquisition of property and equipment $ 1,246,000
-----------------
First quarter expenditures $ 1,651,000
=================

During the second quarter following funding, construction will proceed
on the permanent facility. The manufacture of the cyclotron will also proceed.
Work on various applications will still be in process. Our computer system,
phone system and laboratory equipment will be ordered. Additional robotic
equipment will be purchased. We will begin the implementation of our marketing
department, including the hire of two additional personnel. Cash expended during
this quarter will be as follows:

General and administrative expenses $ 433,000
Acquisition of property and equipment $ 620,000
-----------------
Second quarter expenditures $ 1,053,000
=================

During the third quarter following funding, we will hire four new
personnel to be used in human resources, accounting and clerical positions.
Construction of the permanent facility and the cyclotron will continue. We also
anticipate that our temporary facility will be licensed and will commence
operations. Work will also progress on the various applications. Final payments
will be made on the phone system, and computer system. Furniture and fixtures
for the permanent facility will be ordered. We will begin the development of
other production systems for additional products and begin the coordination of
the radiation monitoring system and its installation. Cash will be expended
during this quarter as follows:

General and administrative expenses $ 500,000
Acquisition of property and equipment $ 1,350,000
----------------
Third quarter expenditures $ 1,850,000
================

In the fourth quarter following funding, the permanent facility will be
completed. The cyclotron and related production equipment will be installed. The
permanent facility will be occupied. The full level of general and
administration expenses of $323,000 per month will be reached in the twelfth
month. Ten technical personnel, including the cyclotron crew, will be hired.
Additional production equipment will be purchased. Cash outlays during this
quarter will be as follows:

General and administrative expenses $ 860,000
Acquisition of property and equipment $ 900,000
Financing and lease payments $ 815,000
----------------
Fourth quarter expenditures $ 2,575,000
================

Production and sales are expected to begin during the thirteenth month
from our permanent facility; we anticipate sales of sodium iodide-123 from our
temporary facility beginning in the third quarter following funding; however, we
have not estimated a sales figure for these purposes. Throughout the
twelve-month period, excess funds will be invested in money market instruments.
Estimated interest income of $320,000 is expected.

Proceeds of offering $ 9,200,000
Interest income $ 320,000
---------------
Funds available $ 9,520,000
Cash expended during first twelve months $ 7,129,000
---------------

Balance available for further working
capital $ 2,391,000
===============

The Company's program for the balance of 2000 and the first half of
2001 is to complete construction of its manufacturing facility. We will begin
development of our sodium iodine-123 radiochemical manufacturing and
distribution program. We will also pursue formal relationships with various
distributors, universities and medical institutions. Our PET diagnostic imaging
center, which consists of our second product, fluorine-18 FDG, will be a service
to the medical community of the local and surrounding regions. This will be
accomplished by offering the local medical communities with the access to the
latest PET diagnostic imaging procedures, without the high costs associated with
the development with a PET diagnostic center. Following the completion of
construction, the Company intends to move its principal executive offices to our
permanent facility and to use that facility to assemble proprietary equipment
and finalize the installation and testing of the cyclotron components (targets).

The Company has allocated a portion of the net proceeds from this
offering for the development of proprietary equipment (See "Use of Proceeds")
and also the purchase of wholesale quantities of radioisotopes. The Company also
intends, prior to completion of the manufacturing facility, to enter into
preliminary contracts with distributors, universities and medical institutions
throughout the United States, and to pursue formal commitments with foreign
sources, such as sources in Europe, Russia and Israel, for the acquisition of
enriched stable isotopes necessary for the production of radiochemicals and
radiopharmaceuticals; however, there can be no assurance of obtaining these
isotopes.

We have recently commenced a $25.0 million capital expansion undertaking
that includes $10.0 million in equity offered hereby, $10.0 million in debt for
the purchase of our first cyclotron and $5.0 million for the construction of new
production and administrative facilities. Although no assurances can be given,
we expect that the new cyclotron and facilities will become operational before
the middle of 2001. We intend to apply a portion of the net proceeds of this
offering toward the purchase of equipment to be installed in calendar year 2000
and use the remainder for working capital and other corporate purposes as
appropriate. See "Use of Proceeds."

During the course of our development activities from February 2, 1992
through December 31, 1999, we have sustained operating losses, and have an
inadequate cash supply. From February 19, 1992 (inception) through December 31,
1999, we raised working capital through offerings of our no par value preferred
stock, which was expected to permit us to continue operations.

We continue to be in the development stage and have commenced
operations. To date, our efforts have been focused upon organizational
activities, development of a business plan, obtaining funding from successful
offerings of Classes "A" through "I" shares of preferred stock (all of which
shares have been converted to common stock) and preparing the radioactive
materials and establishment license applications and Investigational New
Drug/New Drug Applications for certain proposed radiopharmaceutical products,
for filing with the Colorado Department of Public Health and Environment--State
Laboratory and Radiation Services Division and the FDA. In addition to preparing
these applications, Mr. Malcolm H. Benedict, our CEO, has developed a
technetium-99m generator system, which he believes to be technologically
feasible and patentable, for the purpose of automating the radiochemical and
radiopharmaceutical manufacturing process using robotics technology.

We intend to file a patent application with the U.S. Patent and
Trademark Office pertaining to the unique automation features of this process;
however, we cannot assure that such proposed patent application will be
successfully filed or approved, or result in the issuance of letters patent to
us. (See "Risk Factors - We have intellectual property and license
applications.")

Despite the above-described activities and the Company having raised
gross proceeds totaling $3,021,685 from a series of preferred stock offerings,
we are not yet in a position to commence our proposed business activities in the
manufacture, marketing and distribution of radiochemical and radiopharmaceutical
products. Since inception, we have received no revenue from operations and, for
the period from inception through December 31,1999, we realized an accumulated
net loss from operations aggregating $2,485,312. As of December 31, 1999, our
assets totaled $69,154; our liabilities are $17,742; and our total stockholders'
equity was $51,412. Of our total expenses of $2,485,312 as of December 31, 1999,
$645,585 thereof consisted of the rights to certain applications (including the
radioactive materials license and establishment license applications and
IND/NDA's for sodium iodide I-123 capsules and solutions, and fluorine-18 FDG),
designs, processes, procedures, technology and specifications (including the
technology and specifications for the technetium-99m generator system designed
by Mr. Benedict), which are intangible assets, accounted for in accordance with
SFAS No. 2. SFAS No. 2 requires that all research and development costs, except
those done for others under contract or certain government-related entities, are
charged to expense.

We had working capital in the amount of $26,652 as of December 31,
1999. Our working capital is presently minimal or negative and there can be no
assurance that our financial condition will improve. After this offering which,
if completed, will yield the Company net proceeds of a maximum of approximately
$9,200,000, the Company is nevertheless expected to continue to have minimal
working capital or a working capital deficit as a result of the continuing net
loss anticipated from operations until such time, if ever, as we are successful
in obtaining the requisite licensing and regulatory approvals and sufficient
additional capital to obtain the facilities, inventory and equipment and employ
the requisite personnel required in order to commence operations. To fully
implement the Company's current business plan, we need to obtain additional debt
capital to acquire the facilities and the cyclotron. We expect to continue in
operation, without an infusion of capital, after the expiration of twelve months
from the closing of this offering. In order to obtain additional equity
financing, management may be required to dilute the interest of existing
shareholders or forego a substantial interest in its revenues, if any. We cannot
assure that any such operating capital required by us in order to fully
implement our business plan will be available to the Company in the foreseeable
future, if ever. (See "Risk Factors - We may be unable to meet our future
capital requirements.")

BUSINESS

General

We plan to manufacture, market and distribute a range of
radiopharmaceuticals and radiochemicals to the nuclear medicine industry, an
endeavor that represents the merger of medicine and biology. We will employ new
machines and techniques in a proprietary approach that gives superior quality
products while sharply lowering costs. Radiopharmaceuticals and radiochemicals
are used as radioisotopes for identifying and labeling radioactive elements in
medical diagnostics, biological research and commercial applications. According
to the Institute of Medicine, while the production methods of
radiopharmaceuticals are antiquated, the nuclear medicine industry is growing
substantially with an estimated $7 to $10 billion dollars spent annually in the
United States alone, thirteen percent (13%) of which represents radioisotopes.
We will employ an Internet site for our marketing applications and to serve as
one of the portals for all levels of users. We believe our production and
distribution approach will permit establishing a new standard for the industry.

Our Approach

o Reduces manufacturing labor costs;
o Enables a 24-hour production and quality control cycle;
o Reduces staff exposure to radiation;
o Eliminates expensive repetitive errors;
o Guarantees consistent quality with every batch of radiochemicals and
radiopharmaceuticals; and;
o Permits local delivery with lower inventory and wastage.

Our system will replace older lower amperage, single beam instruments
using manual procedures that have produced poorer quality and higher cost than
our proposed system. We believe that:

o Our technology and process will change the production methods for
radiopharmaceuticals;
o We have sharply superior technology compared to existing
manufacturers;
o We can manufacture with high gross margins;
o Our products will improve the quality of healthcare.

We are prepared to file the necessary applications required for
licensing and/or regulatory approval from the Colorado Department of Public
Health and Environment--State laboratory and Radiation Services Division, for
the handling of radioactive materials and with the (FDA) for the operation of a
nuclear medicine laboratory and for the production of iodine radiopharmaceutical
products. Under an agreement between the State of Colorado and the NRC, approval
of our application by the State will provide us with all necessary approval by
the NRC.

Business Strategy

The acquisition of our TR-30 million electron volt, 1.2 milli amperes
negative ion technology cyclotrons designed by our CEO and manufactured by EBCO
Technologies, Inc., will provide us with the most powerful isotope production
cyclotron of its kind. This instrument is capable of providing higher beam
current and multiple (5) beam lines. Increasing the beam current focuses higher
energy that then produces higher purity radionuclides with greater commercial
yields. Multiple beam lines increase the number of radionuclides produced at a
given time. We believe that no other company has this technology.

Construction and licensing of our facility and installation of our
first cyclotron will enable us to begin producing, subject to regulatory
approval, our first two radiochemical and radiopharmaceutical products, sodium
iodide 123 solutions and capsules and fluorine 18 FDG. At the same time we will
acquire and install a PET camera and establish our diagnostic imaging center to
serve the Rocky Mountain region. We will also produce technetium-99m generators.
The technetium-99m generator was introduced in the late 1960's to provide the
benefits of on-site production of the radioactive nuclide technetium-99m. This
type of generator consists of a long-life parent radionuclide which, when
processed in the generator, produces the radiopharmaceutical technetium-99m;
technetium-99m is used in certain diagnostic procedures.

We will manufacture the listed eight of the 34 radiochemicals and
radiopharmaceuticals (listed below) in our NRC application. New drugs in
research pipelines promise to accelerate applications even more, and we expect
to be in a leadership position to supply increased demand.

o Sodium Iodide-123 solution for thyroid studies
o Fluorine-18 FDG (Fluor-Deoxy-Glucose) used to test metabolic function
for PET (Positron Emission Tomography)
o Carbon-11 used to detect brain tumors
o Nitrogen-13 used for cardiac blood flow studies
o Oxygen-15 used in studying blood flow
o Palladium-103 primarily used as a therapeutic for treating prostate
cancer
o Gallium-67 used as therapeutic for skin cancer
o Technetium-99m (Sodium Pertechnetate) solution for diagnostic
procedures

We will employ an in-house direct mail and telephone strategy. We will
market and drop-ship directly to diagnostic centers and university hospitals. We
also have incorporated an aggressive approach to use of the internet in concert
with traditional forms of communication in our industry.

Market Analysis

Overview

While radioisotopes and enriched stable isotopes are essential in
medicine, isotopes also find wide parallel uses in research in chemistry,
physics and geosciences with additional needs existing in the commercial sector.
The U.S. Department of Energy (DOE) and its predecessors, the Atomic Energy
Commission and the Energy Research and Development Agency, have supported the
development and application of isotopes in a technology transfer. One of every
three hospitalized patients in the United States undergoes a nuclear medicine
procedure. More than 36,000 diagnostic medical procedures that employ
radioactive isotopes are performed daily in the United States and close to 100
million laboratory tests that use radioactive isotopes are performed each year.
Radionuclides are also used to deliver radiation therapy to a growing number of
patients each year (approximately 180,000 in 1998). (Source: National Academy
Press, Division of Health Sciences Policy).

Current Industry Status

The industry is governed by dated new drug applications (NDA's) and
Drug Master Files (DMFs) which, in order to change, would require the following:

*Designing new technologies for manufacturing;
*Developing new chemistries within some of these drugs;
*Developing new processing and operational procedures.
*Developing prototypes for each area;
*Streamlining distribution centers (nuclear pharmacies); and
*Revising DMFs to reflect all new technologies and operational
procedures.

In order for industry to make the above changes, they must continue to
operate their old manufacturing facility according to their existing NDA's until
a supplemental application for each new drug product is submitted and approved.
This could significantly increase the products' cost since the estimated cost
for an NDA (Supplemental Application) can exceed $1 million per drug
application. The effect of these changes are delays in availability for 9 months
for minor changes and 4 years for major changes, provided a completely new NDA
is not demanded by the FDA. For these reasons, not many companies would attempt
a supplemental application. A change in the Current Good Manufacturing Practices
(cGMP's) requires intensive capitalization to deliver quality diagnostic
medicine.

The Nuclear Medicine Market

Nuclear medicine today in the United States is a multi-billion dollar
industry. One of every three hospitalized patients in the United States
undergoes a nuclear medicine procedure. Since 1994, the nuclear medicine
industry exceeded the growth rates of the general medical community. The market
has been estimated to have grown to $7 to $10 billion (Isotopes for Medicine and
the Life Sciences, National Academy Press; 1995). There are in excess of
110,000,000 target organ procedures that will be performed annually using
nuclear medicine throughout the United States (Isotopes for Medicine and the
Life Sciences). This is an increase from an estimated 2,500,000 in 1992. This
growth is due to new methods of diagnostic procedures in nuclear medicine, one
of which is Positron Emission Tomography (PET). The increase in the average age
of the general population ensures that nuclear medicine will continue to play an
expanded role in medical diagnosis.

The radiopharmaceuticals of tomorrow depend on the investigation of
radioactive tracers and therapeutic nuclides of today. The vast potential of
molecular nuclear medicine may not be realized with current limitations in the
supply of research radionuclides. Currently, only 1,250 out of 8,000 hospitals
use radionuclides, but we believe with lower cost, higher quality and effective
distribution, the potential market is much greater.

Within the industry, three major markets co-exist: the commercial
market, the medical market and the research market. Our product lines will cross
over into each of these special markets. The demand for different product lines,
however, will vary in each market. The commercial market consists of those
companies producing sealed sources or who produce commercial technetium-99m
generators distributed directly or indirectly to the medical market. We estimate
that the size of the total nuclear medicine and radiochemical market is
approximately $4 billion annually. The research market is widespread and diverse
throughout the United States. It includes universities as well as private
research facilities. The government research activities are also included in
this segment. Its size has been estimated at $555 million annually.

The medical market is the largest of these broad segments. It includes
all the nuclear medicine facilities in hospitals and clinics throughout the
country. These facilities provide both diagnostic and treatment programs. Over
8,000 physicians practice nuclear medicine in the U.S. The radiopharmaceutical
wholesale market accelerated rapidly due to the introduction of Thallium-201 and
the general growth of nuclear procedures. Thallium-201 sales increased because
of increased utilization of cardiac ECT studies and gated SPECT (Single-Photon
Emission Computed Tomography) of myocardial perfusion images (The Nuclear
Medicine Market in the U.S., Frost & Sullivan). Iodine-123 sales also increased
dramatically to $14.7 million due to the increase in the renal studies being
done and sales of other products, such as, indium oxide for blood cell labeling
(according to the Society of Nuclear Medicine).

As we try to estimate the future, it appears that most of the increase
will be in new product areas. The largest potential will be derived from the
introduction of a new, improved technetium-99m generator and cold kits,
particularly for cardiac and brain imaging and most recently breast imaging.
Thus, coupled with increased use of PET scans using Fluorine -18 FDG in new
product applications, this additional volume should result in an increased
market for radiopharmaceuticals. Within each market segment, the customer base
is varied. Physicians and hospitals comprise the principal customer base in the
medical division. Universities, research scientists and government facilities
constitute the base in the research division, with commercial manufacturers and
distributors in the commercial division. In each section the customer base and
the direct purchasers of our products have been identified. Specific marketing
and sales programs have been developed to serve every customer base within each
section.

We estimate the current market of products and categories as follows:

===========================================================================
Wholesale market (radiochemicals) $ 950,400,000
- ---------------------------------------------------------------------------
Research market $ 1,607,555,000
- ---------------------------------------------------------------------------
Retail market $ 8,553,600,000
- ---------------------------------------------------------------------------
Therapy $ 110,000,000
===========================================================================

Sales and Distribution

We will capitalize on the expertise of Malcolm Benedict and Donald
Ludwig Ph.D., for the distribution of our products. Mr. Benedict and Dr. Ludwig
have many contacts throughout the nuclear medicine community. We expect to use
an established distribution program, plus an in-house direct mail and telephone
campaign. We will market and drop-ship directly to physicians, universities,
diagnostic centers, nuclear pharmacies and hospitals. Mr. Benedict has also
taken the required steps to ship product. The Company shipping requirements will
be in compliance with all the regulatory agencies.

Technology, Production and Products

Overview

Developments in therapeutic and diagnostic drugs have historically come
from the need to improve treatment regimens and provide more accurate diagnoses.
Specifically, improvements in radiopharmaceutical diagnostic drugs are required
to provide a clearer picture of the affected organ system to prevent
misdiagnosis. Diagnostic procedures that can provide more accurate diagnosis,
significantly reduce costs to the entire health care system: the patient, the
hospital, third party payors and the employer.

Technology

Our technology focuses on an integrated system that can produce high
quality, cost effective radionuclides. Our technology includes two instruments
for the production of radionuclides concomitant (radionuclidic and radiochemical
quality control) with computerized robotics for manufacturing the radionuclides.

Cyclotron. A cyclotron is an instrument used by physicists to
accelerate elementary particles to energies effective in causing chemical,
atomic, sub-atomic and nuclear reactions to occur. Historically, the cyclotron
was a large, heavy and expensive piece of equipment. Newer systems such as the
TR-30 H- system are medium weight, efficient, automated and cost effective.
Cyclotrons accelerate charged particles in a circular pathway through
accelerating gaps. The internal parts of the cyclotron that accomplish this
process are in the shape of the letter "D" and are referred to as Dees. A
charged particle, such as the proton, is accelerated from one dee to the next
dee by the means of a Voltage Gradient placed across the face of the dees. As
the proton passes from one dee to the next dee, its velocity or momentum
increases. At a certain specific energy the protons, which form the beam, are
directed from the cyclotron to the target producing radioactive products of
interest. All radiopharmaceutical substances produced by these methods are
produced at specified energy levels in order to maximize production and minimize
impurities that reduce the product's safety and efficacy. The cyclotron
accomplishes the same function by directing the particle beam through a series
of accelerating nodes that are arranged in a spiral.

The production process for cyclotron produced radionuclides is similar
to that associated with certain aspects of nuclear reactors in that special
stable isotope targets have to be prepared. Targets are bombarded by the
cyclotron using charged particles, which are appropriate for the particular
nuclear reaction. This is followed by a chemical separation process to prepare
the desired form of the radionuclide. However, there is a tremendous shortage of
cyclotron produced radionuclides for domestic use. The Journal of Nuclear
Medicine, Vol. 34, Number 6, June 1993 stated, "that the Department of Energy
(DOE) indicates that the department recognizes that this is a very serious issue
and the department is making every effort that it can". We believe that this
problem still exists.

We believe that the cyclotron will be the primary production unit for
the next 10 to 25 years. Linear accelerators are machines for the future as
nuclear medicine expands. We believe the cyclotron, however, will not outgrow
its usefulness for producing nuclides at a low cost. Linear accelerators are in
the experimental state and have not been proven for commercial production. The
linear accelerator and cyclotron are both based on the technology of
accelerating charged particles to very high velocities, and therefore high
energies. The particle beam is then directed into "targets" consisting of stable
atoms. The high energies of the particles cause the non-radioactive target
material to become radioactive through nuclear changes. Cyclotrons have the
advantage of smaller size and may operate in a much smaller space, thus being
more advantageous to nuclear medicine industry applications. We believe that
cyclotrons also are less expensive to operate than linear accelerators and
therefore are more ideal for small to large volume operations. Cyclotrons are
being used in industrial applications as well as other various uses such as
cancer therapy, explosive and incendiary detection, nondestructive materials
testing and mineral content determination and analysis. These areas are also
very profitable and are continuing to expand.

The acquisition of several TR-30 million electron volt, 1.2 milli
amperes negative ion technology cyclotrons from EBCO Technologies, Inc. will
provide the Company with the most powerful isotope production cyclotron of its
kind. This instrument is capable of providing higher beam current and multiple
(5) beam lines. Increasing the beam current produces higher energy targets that
generate higher purity radionuclides with greater production yields. Multiple
beam lines increase the number of radionuclides produced at a given time. No
other Company has this technology available to them at this time.

Technetium-99m Generator. The use of technetium-99m generators is
advantageous because the product shows the function of major body organs.
Technetium-99m is used because it provides good resolution and efficiency with
the nuclear medicine camera. The producers of these generators replace the
customer's product on a weekly and bi-weekly basis. The capacity of the
generator is selected so that it provides sufficient output for one to two
weeks. The larger users, such as the nuclear pharmacies, may order one or more
generators per week. E.I. du Pont deNemours and Company, Amersham Pharmacia
Biotech Ltd. and Mallinckrodt Inc. now produce generators for the United States
market. These companies produce generators in the 1 to 15 Curie range. The
Company's generators will be in the 100 to 1,600 Curie range. This is
substantially higher in quality and quantity than anything available in the
market.

Our strategy will be to challenge this market by introducing a
permanent, proprietary rechargeable generator invented by our founder, Malcolm
H. Benedict. The Company believes such a generator will offer a purer and more
cost-effective product. These generators will also provide handling advantages
(such as reducing radiation exposure) over the industry's existing disposable
units. The new technetium-99m generators will be placed in nuclear pharmacies or
clinics in major metropolitan areas throughout the country. The role of these
entities will be to supply the product to hospitals and clinics, thus
eliminating the need for such facilities to own and operate their own
generators. The Company believes the instant availability of massive quantities
of a purer technetium-99m, through a local distribution network will offer an
advantage to the physicians and this will also represent a substantial cost
savings to the hospital and the patient. The greater availability of the drug
can also be expected to increase the use of radiopharmaceuticals, which will
increase our market share and sales volume.

Development and Manufacturing of Radioactive Elements

Radioisotopes are produced either in a nuclear reactor or Particle
Accelerator (one of two kinds of cyclotron). After target elements are bombarded
by a particle beam from a cyclotron or linear accelerator, the resultant
radioisotopes are processed into radiochemicals in specially designed
facilities. These radiochemicals are then processed into radiopharmaceuticals
for distribution and use in nuclear medicine laboratories and clinics.

Radiopharmaceuticals are used in extremely small quantities to make the
drugs safe and effective for human use. The radiopharmaceuticals on the market
today are safe in that they reduce radiation exposure to the patient; however,
we believe that they could be greatly improved. Radiopharmaceuticals are
prepared in various forms, such as capsule, sterile solutions and single or
multiple dose vials for injection into the body. Most of the available
radiopharmaceuticals are used in the form provided by the manufacturer.
Technetium-99m can be utilized in combination with various other compounds or it
can be used in its more basic form, as technetium-99m, for brain and thyroid
scanning.

In order to develop radiopharmaceuticals, it is necessary:

* to establish a chemical analog of a body substance, which can be
represented by a specific radiopharmaceutical, that will demonstrate
dynamic function of an organ or gland.

* to determine the amount of time it takes to reach the organ or target
of interest in the body and to determine the effect on surrounding body
regions which might blur and confuse the evidence of the diagnosis. The
objective is to maximize the scan and make sure it does not compromise
the other qualities sought.

* for the radioactive material to have the minimum or lowest possible
physical useful life consistent with the practicality of the time
required for shipment. Generally, the shorter the half-life of the
radiopharmaceutical, the safer the drug is to administer to the
patient. Therefore, more diagnostic information can be recorded from
the patient in a shorter time period. The shorter useful life of the
radiopharmaceutical diminishes radiation exposure to the patient by
reducing the time that the body is exposed to the radioactive form of
the material. The object is to minimize the radiation dose to the
patient while getting a moving picture of the organ of interest.

In addition, radiopharmaceuticals used in conjunction with
complementary procedures can assist in the diagnosis and tracking of a disease.
For example, the combination of two radiopharmaceuticals, "technetium-99m" and
"xenon 133" can be used to study lung perfusion. Lung perfusion demonstrates the
flow of blood through the lungs whereby the xenon 133 gas inhalation
demonstrates the viability of the air passages in the lung. This provides a very
accurate assessment of the function of the patient's lungs.

We plan to manufacture the following radiochemical and
radiopharmaceutical products in the first year of operation:

Sodium Iodine-123. Iodine is an essential element in the normal diet
and is extracted by the thyroid gland and converted into thyroxin and other
thyroid hormones. Sodium Iodine-123 has been used by physicians in order to
discriminate between the many types of thyroid dysfunction and disease. Sodium
Iodine-123 radiopharmaceutical has ideal chemical properties for studies of the
thyroid. Furthermore, many drugs and metabolically active compounds can be
labeled by the inclusion of sodium iodine-123 without loss of biochemical
activity. For example, sodium iodine-123 labeled amphetamines are used to
determine the regional cerebral blood flow in patients who have suffered, for
example, a stroke. The New York State research foundation was responsible for
the research and origin of Sodium Iodine-123 HIPDM. Our founder, Malcolm
Benedict, was responsible for the development and commercialization of Sodium
Iodine-123 HIPDM into a finished radiopharmaceutical. This product is also used
for strokes, Alzheimer's disease, epilepsy and brain imaging. Due to its low
toxicity, it is equally well tolerated by adults and children.

PET Products. These products, which are listed below, are produced
entirely by cyclotrons and must be processed as radiochemicals, formulated into
radiopharmaceuticals and administered to patients within a very short time.
These products have been generally produced in a research hospital environment
and are now used on site on a commercial basis.

o Fluorine-18 (FDG) has a useful life of 110 minutes and is a
radiochemical that can be incorporated into organic chemicals and
used as a radiopharmaceutical. It is also used to produce other
products for specific purposes that can be used for examination of
many different organs.

o Carbon-11 has a 20-minute useful life and can be incorporated in
many organic compounds to replace non-radioactive Carbon-12.
Sometimes, physicians prefer to use Carbon-11 Methionine in the
detection of disease with brain tumors that cannot be detected
with Fluorine-18 (FDG).

o Nitrogen-13 has a 10-minute useful life and can be incorporated
into numerous organic compounds. An application of this type of
study is to attach a radiopharmaceutical and physical process
continuously going on, in living organisms and cells. Nitrogen-13
is often used for cardiac blood flow studies.

o Oxygen-15 has a 2-minute useful life and is used in studying blood
flow of the brain and the heart by labeling ordinary water.

The PET camera produces images from the emitting of the
radiopharmaceutical administered to the patient. PET is the most accurate test
to reveal coronary artery disease or rule out its presence. The PET images can
show inadequate blood flow to the heart during stress, which goes undetected by
other non-invasive cardiac tests. We believe that at this time PET is considered
to be one of the best diagnostic methods to determine the viability of heart
tissue for blood flow studies. PET imaging can be used on the following cancers:
lung, colorectal, breast, adrenal and brain. PET can be used to determine the
location of tumor cells. Because tumor cells are more metabolically active than
normal cells, a PET scan easily detects them. PET scans can also determine
whether a tumor is benign or malignant, whether cancer treatment, such as
chemotherapy, has been effective. Clinical indications for imaging in neurology
include the evaluation of primary central nervous system tumors, epilepsy and
dementia.

We plan to manufacture the following radiopharmaceutical products in
the second year of operation:

Gallium-67. This product tends to concentrate in tumors and abscesses.
The primary use of this radiopharmaceutical is the detection of cancer. It has
application in many specific tumors (lymphoma, melanoma, carcinoma, lung, and
hematoma) and a wide variety of tumors common in pediatric patients. Gallium-67
also is known to concentrate in sites of local or systemic inflammation and is
therefore valuable as a screening tool for infections of non-specific origin,
for which there are no other diagnostic or localizing techniques.

Technetium-99m. Technetium-99m is a common radiopharmaceutical used for
showing the function of major body organs and other tissues (brain, lung, legs,
bone, liver, and kidney). Technetium-99m, alone, or combined with other agents,
is used to determine brain blood flow (brain scan image), lung scans before and
after surgery, thrombosis in the peripheral vascular system, bone diseases and
tumors in various organs. Technetium-99m is delivered in bulk and requires a
specialist in nuclear medicine to be on duty in each of the medical facilities
or nuclear pharmacies.

Palladium-103. Palladium-103 is a form of small radioactive pellets
which are implanted in a patient's prostate under ultrasound guidance to destroy
a tumor. These small radioactive sources ("commonly called "seeds") are
permanently implanted, via needles, into the prostate gland, and are clinically
excellent therapy for the treatment of early-stage prostate cancer.

Intellectual Property

We do not have any issued patents or patents pending. We anticipate
filing patents for many of our robotic manufacturing procedures, radiochemical
targets and technetium-99m generator.

History

We are dependent upon the extensive expertise of Malcolm H. Benedict,
our founder, Chairman, President and Chief Executive Officer. In 1972, Mr.
Benedict founded Benedict Nuclear Pharmaceuticals, Inc., ("BNPI"). BNPI began
producing radiopharmaceuticals under the control of the Nuclear Regulatory
Commission (NRC) and the State of Colorado Health Department, acting in place of
the Federal Food and Drug Administration, and later consented to make filings
under FDA procedures. Mr. Benedict has devoted his principal efforts and
resources to meeting the regulatory requirements necessary to manufacture
radioactive drugs. In August 1981, the FDA granted BNPI an Investigational New
Drug ("IND") permit to manufacture and conduct clinical trials on Iodine-123
capsules and solution (Iodine-123). After reporting the findings on the safety
and effectiveness of these drugs, BNPI submitted a New Drug Application (NDA)
for Iodine-123 capsules and solution (Iodine-123). BNPI's NDA was awarded in May
1982. The application was completed in nine months from the initial acceptance
until final approval. Canada's Radiation Safety Bureau issued BNPI an NDA for
its Iodine-123 capsules and solution within three months of filing the necessary
documentation. Similarly, an IND/NDA was filed for Thallium-201. Mr. Benedict
left BNPI in 1991, and subsequently that firm was merged with several other
companies prior to its acquisition by Syncor, Inc.

Competition

We believe that six major corporations currently dominate the
radiochemical and radiopharmaceutical industry; however, brand name competition
is not a significant factor in marketing diagnostic drug products; the
improvement of the quality and purity of diagnostic drug products will be a more
significant factor. The six major manufacturers that we have identified are Du
Pont, Mallinckrodt Chemical Corporation, Nycomed-Amersham International,
MDS-Nordion, International Isotopes and Theragenics. Our cyclotrons, which are
being manufactured by EBCO, Inc., will run at 1.2 milli amps (1,200 micro amps)
or higher, which we believe far exceeds the cyclotron capacity of our
competitors.

Fundamental Weaknesses of the Industry.

There are inherent weaknesses within this industry. These companies
began manufacturing radiopharmaceuticals from the products developed for
university-generated research. As a result, they were not committed to the
development of quality products at a low cost. Their entire business was based
on their ability to obtain FDA approvals on these drug products as they were
developed. For the most part, they operate today from the NDA's and Drug Master
Files that were developed 15-20 years ago.

Until we enter this market, they have no incentive to change because
they can pass the cost of the radiopharmaceuticals down to the patient. We
intend to restructure the industry for the next generation on quality, cost and
distribution upgrades.

Currently, radioisotopes produced by a cyclotron accelerator are
manufactured in the United States principally by the radioisotope producing
companies, primarily, we believe, for their own radiopharmaceutical products. We
believe that hospitals, medical institutions and universities also produce
certain short-lived radioisotopes utilizing small cyclotron accelerators,
principally for their own radiopharmaceutical needs. The radioisotope producing
companies have substantially greater capital and other resources than we do, and
there can be no assurance that they may not elect to produce radioisotopes for
commercial sale. The U.S. government also produces radioisotopes, primarily for
research purposes, in three national laboratories, Brookhaven National
Laboratory, Los Alamos National Laboratory and the Oak Ridge, Tennessee National
Laboratory, and has announced that it plans to modify the nuclear reactor at
Sandia National Laboratory in Albuquerque, New Mexico to produce certain
radioisotopes. In addition, there can be no assurance that a third party will
not contract with the U.S. government to acquire radioisotopes for commercial
sale. Outside the United States, MDS Nordion, Inc., a Canadian firm, and
Mallinckrodt, N.V. at Petten, a Netherlands firm, both of which have
substantially greater capital and other resources than we do, are major
producers of cyclotron-produced and accelerator-produced radioisotopes. MDS
Nordion, Inc. currently supplies a significant portion of the radioisotopes used
in the diagnostic nuclear medicine industry in the United States, and there can
be no assurance that we will be able to compete successfully with this firm.

Government Regulation

Regulation of Production and Radioactive Waste. The manufacture of
radiochemicals and radiopharmaceuticals is subject to extensive federal and
state regulation. Prior to commencing operations, we must obtain approval of our
facility from the various agencies which administer these regulations, and prior
to transporting medical use radiochemicals and radiopharmaceuticals across state
lines, we must obtain approval from the FDA. In addition, the DOT regulates the
quantity and method of shipment of radioactive materials, and sets
specifications with respect to the class of shipping containers used. Our
facilities will be subject to continual inspection for compliance with state and
federal regulations, which require that we manufacture radiochemicals and
maintain manufacturing, testing and quality control records in a prescribed
manner. See "Risk Factors--Government Regulation." Since our facility will have
to be approved by the State of Colorado Department of Public Health - State
Laboratory and Radiation Services Division, which approves facilities under
agreement with the NRC, we believe it will not be subject to regulation by the
NRC or the Department of Energy. FDA regulations provide that a
radiopharmaceutical production facility may not be used for any purpose other
than the production of radiochemicals and radiopharmaceuticals.

We will be required to file a Drug Master File with the FDA for each
radiopharmaceutical which we propose to produce. These radiochemicals and/or
radiopharmaceuticals can then be used by other radiopharmaceutical companies for
manufacturing their own proprietary radiopharmaceuticals. These products will be
covered by NDA's filed by the respective radiopharmaceutical companies, which
companies will make reference to our applicable DMF.

The production and processing of radioisotopes generate a certain
amount of low-level, solid radioactive waste. Pursuant to the Low Level
Radioactive Waste Policy Act of 1980, states are required to assure the safe
disposal of mildly radioactive materials. The handling, retention and disposal
of radioactive waste is regulated by various other agencies, which enforce
federal regulations promulgated by the Environmental Protection Agency ("EPA")
and their own regulations. We believe that radioactive waste that we produce
will fall into the category of low-level radioactive waste. Most of this waste
will be in the form of used laboratory expendables, such as latex gloves and
absorbent paper used to protect laboratory counter tops from direct exposure to
spilled materials, which waste will be compacted and disposed of through the
usual commercial channels used by universities, medical institutions and
industrial users of radioactive materials. Between scheduled waste pick-ups,
compacted materials containing longer-lived radioisotopes temporarily will be
retained on-site in a specially designed, low-level waste reduction facility,
which facility will reduce the amount of radioactive waste that must be removed
to a permanent radioactive waste disposal facility. The production of
radioisotopes at our facility will include the chemical separation of
radioisotopes. This may lead to the production of some mixed hazardous waste,
consisting of a mixture of low-level radioactive materials, water, organic
solvents and inorganic salts. We will hold such materials on-site for a period
of time until the radioisotopes decay to stable isotopes, at which time the
materials can be moved off-site for disposal by commercial waste handlers.
Liquid waste resulting from the processing of accelerator-produced controlled
products or from the washing down of hot cells or other decontamination
procedures will be contained in storage tanks at our facility. It is anticipated
that the capacity of the storage tanks will be sufficient to permit the holding
of radioactive wastes until decay to negligible levels has taken place. In
compliance with applicable state laws, we will maintain a radiation safety
committee, comprised of Malcolm Benedict and Dr. Donald A. Ludwig. Our radiation
safety officer will be appointed to oversee our radiation safety procedures. The
radiation protection officer will control and monitor our compliance with state
and federal regulations, and will conduct radiation audits to comply with
applicable regulatory requirements.

Although we intend to comply with all applicable regulations regarding
the manufacture and sale of radiochemicals and radiopharmaceuticals, such
regulations are subject to change and depend on administrative interpretations.
We cannot assure that future changes in regulations or interpretations made by
the FDA or other regulatory bodies, with possible retroactive effect, will not
have a material adverse effect on us. We also will be subject to numerous
federal, state and local laws relating to such matters as safe working
conditions, manufacturing practices, fire hazard control and disposal of
hazardous or potentially hazardous substances. We cannot assure that we will not
incur significant costs in complying with such laws and regulations or that such
laws or regulations will not have a material adverse effect upon us.

Medical imaging centers must comply with regulations, promulgated in
most states by an agency of the state government under authority delegated by
the NRC, governing the possession and use of radiopharmaceuticals for diagnostic
medical procedures. In order to secure approval, a medical imaging center must
submit an acceptable site plan for its camera, employ adequate radiation safety
and quality procedures, and provide a nuclear medicine physician or other
qualified physician who meets certain training and experience standards. Many
states have "certificate of need" regulations that require a hospital purchaser
or user of expensive diagnostic equipment, such as medical imaging cameras, to
obtain regulatory approval prior to purchasing the equipment. A primary purpose
of those regulations is to contain health care costs by restricting the number
of similar units in a particular locality. We cannot assure that such
requirements or the delays that may be occasioned thereby will not limit our
ability to market and sell our products.

Other Regulations. If we enter into agreements with suppliers to
acquire various controlled-items, neutron-produced research and therapeutic
radiochemicals or accelerator-produced radiochemicals for our distribution, we
will be subject to various regulations regarding the handling of radioactive
materials. Compliance with such regulations will be the responsibility of the
contracting supplier. Any radiopharmaceuticals developed under arrangements
between us and medical institutions and universities, including preclinical
animal studies, the filing of an IND application, human clinical trials and the
approval of a NDA, will require prior approval of the FDA, which has established
mandatory procedures and standards for the clinical testing, manufacture and
marketing of therapeutic and diagnostic products. Obtaining approval from the
FDA could be a time consuming and costly process.

We also will be subject to regulation by the EPA, OSHA and other agencies
with respect to the radioactive content of water and air discharges and the
handling and disposal of radioactive waste. We intend to comply with all such
laws and regulations and believe our facilities and operations will not create
any hazards to nearby residents, employees or visitors. See "Risk
Factors--Government Regulation".

Regulatory Approvals. We are prepared to file the necessary
applications required for licensing and/or regulatory approval from the Colorado
Department of Public Health and Environment - (State Laboratory and Radiation
Services Division) for the handling of radioactive materials and the FDA for the
operation of a nuclear medicine laboratory and for the production of iodine
radiochemical products. We believe these licenses will be granted when the
building and equipment are completed in our temporary and permanent facilities
and final inspection has taken place. We do not anticipate any obstacles in our
ability to obtain the required licenses.

Product Liability and Insurance.

The use of our radioisotopes in radiopharmaceuticals and in clinical
trials may expose us to potential product liability, which is inherent in the
testing, manufacture, marketing and sale of human diagnostic and therapeutic
products. In addition, the failure to effect timely delivery of radioisotopes
may cause a delay in a scheduled test or procedure or result in the functional
loss of radioactivity of the radioisotope, thereby exposing us to potential
liability. We currently have no product liability insurance. We intend to obtain
product liability insurance prior to commencing production of any radioisotopes
and prior to the manufacture and sale of any products, but there can be no
assurance we will be able to obtain or maintain such insurance on acceptable
terms or that any insurance obtained will provide adequate coverage. Claims or
losses in excess of any liability insurance coverage ultimately obtained by us
could have a material adverse effect on us. See "Risk Factors--Product Liability
Exposure and Insurance."

Our Facilities

We currently lease office space at 1880 Industrial Circles, Suite B-3
in Longmont, Colorado and additional space in Boulder, Colorado. The office
space in Boulder, Colorado is subleased to an unrelated entity. Upon completion
of this offering, we anticipate temporarily leasing additional space in Longmont
to begin production and sale of sodium iodide-123. We will also purchase land
for and begin construction of our permanent facility. We have entered in to a
contract to purchase approximately 5.5 acres of land (with an option to purchase
an additional 5 acres) in Weld County, Colorado, approximately 6.7 miles east of
Longmont, Colorado and approximately 2.3 miles west of Interstate 25, Colorado's
major north-south throughway. We have deposited 102,000 shares of common stock
in an escrow account for that purchase and we anticipate, pending the
fulfillment of all conditions to the purchase, closing on the purchase in July,
2000; however, we cannot assure that we will be able to close on the purchase.

We will obtain insurance on our facilities for fire, theft and general
liability coverage during the period of any occupied or leased facility. The
dollar value of the property coverage shall not be less than eighty (80%) of the
replacement cost of the facility and equipment, unless otherwise covered in an
equal amount.

Employees

The Company currently has four full-time employees, consisting of three
executive officers and one administrative person. Once the permanent facility is
constructed, we intend to hire additional technical personnel to operate and
monitor the cyclotron and robotic manufacturing equipment and medical personnel
to operate the PET diagnostic imaging center. The Company believes its
relationship with its employees to be good. None of the employees is represented
by a union and there have been no work stoppages to date.

Legal Proceedings

There are no legal proceedings to which the Company is a party.

MANAGEMENT

Directors and Executive Officers

Board of Directors and Executive Officers

The following are our directors and executive officers:

Name Age Position
- ---- --- --------
Malcolm H. Benedict 62 President, CEO and Chairman of the Board
Donald A. Ludwig, Ph.D. 52 Director and Executive Vice President
Janet L. Davis 44 Director and Secretary
Vernon L. Morris, CPA 55 Chief Financial Officer
David D. Mc Nurlin 38 Vice President, Corporate Development

Malcolm H. Benedict has served as the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company since the
inception of Molecular Diagnostics and Therapeutics, Inc., (formally Nu-Tec.,
L.T.D.), on February 19, 1992. From 1979 to 1991, Mr. Benedict served as the
President, Chief Executive Officer and Chairman of the Board of Directors of
Golden Pharmaceuticals, Inc., Golden, Colorado ("Golden Pharmaceuticals",
formerly known as "North American Chemical Corporation," and "Benedict Nuclear
Pharmaceuticals, Inc."), a publicly held corporation that was engaged in the
manufacturing and distribution of radiopharmaceuticals, subsequently selling its
product line to Syncor Pharmaceuticals, Inc. During the approximate 19 years
since Mr. Benedict's founding of Golden Pharmaceuticals in 1972, Golden
Pharmaceuticals developed into a national drug company and received FDA approval
for the commercialization of two radiopharmaceutical products. Mr. Benedict has
extensive experience in nuclear medicine during the past 35 years. Mr. Benedict
is an active member of five well-known professional organizations, as well as
the Society of Nuclear Medicine.

Donald A. Ludwig has served as Executive Vice President and a director
of the Company since 1998. He is a sales, marketing and management executive
with more than twenty-five years experience in high technology, nuclear medical
and radiopharmaceutical production instrumentation. He has a PhD in medical
physics. He has managed technology groups in the advanced diagnostic imaging,
radiation therapy and PET industry. He has consulted with many of the leading
companies in this industry and his advice is frequently sought by overseas
healthcare organizations. For the past several years, he has been the principal
consultant at Physics For Medicine, an independent physics service provider to
the nuclear science community. He is an expert in the use of Particle
Accelerators for the manufacturing of radiochemicals and radiopharmaceuticals
and the distribution process.

Janet L. Davis has served as the Secretary since 1996 and has served as
an interim Director of the Company since December 1999. She was appointed to
serve as an interim Director of the Company upon the resignation of J.D. Kish.
She is currently employed as a paralegal by Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, P.C. Ms. Davis successfully completed an American Bar
Association-approved program in paralegal studies and a Bachelor of Science
degree in education from Louisiana State University.

Vernon L. Morris. Mr. Morris was appointed the Chief Financial Officer
of the Company in January 2000. He is a Certified Public Accountant and has had
his own accounting practice in Boulder, Colorado for the past twelve years. Mr.
Morris received his degree in Physics from Colorado State University and his CPA
certificate in Colorado in 1972. Mr. Morris was employed with Brock Cordle and
Associates as chief audit partner and securities audit partner. Mr Morris will
be responsible for all financial operations and controls, including budgeting,
financing, financial reports and taxes. Mr. Morris is a member of the American
Institute of Certified Public Accountants.

David D. Mc Nurlin has served as the Vice President of Corporate
Development for the Company since January 1, 1998. His responsibilities include
project management, cost analysis and cost breakdown, budget forecasting and
facility development. Mr. Mc Nurlin is currently in pursuit of his BSBA in
Business Administration. Mr. Mc Nurlin has over 12 years project management
experience and over 8 years experience in computer information systems.

All directors currently hold office until the next annual meeting of
shareholders and until their successors are duly elected and qualified. Our
executive officers serve at the discretion of the Board of Directors and until
their successors are duly elected and qualified.

Medical and Scientific Advisory Board

Michael J. Lawson, M.D. (Board Certified Nuclear Medicine & Internal
Medicine) is the Director of the Good Samaritan PET Center, Phoenix, Arizona.
Dr. Lawson has an extensive background in the field of nuclear medicine over the
past thirty years. He is a founding Member of the American Society of Nuclear
Cardiology. Dr. Lawson is an active member of more than six medical
organizations as well as having extensive publications. He is a graduate of the
University of Utah School of Medicine. Dr. Lawson has joined the Company as the
Advisor and Director of the PET Center.

Steven M. Larson, M.D. (Board Certified Nuclear Medicine & Internal
Medicine) is the Chief of Nuclear Medicine at Memorial Sloan Kettering Cancer
Institute, New York, New York. Dr. Larson, a graduate of the Washington School
of Medicine, has had an extensive background in the field of nuclear medicine
and internal medicine over the past thirty years. Dr. Larson is an active member
of several medical organizations as well as having extensive publications. Dr.
Larson has joined the Company as a medical advisor in diagnostic and therapeutic
medicine.

Karl Erdman, Ph.D. has worked as Chief Scientist on PET Medical
Cyclotron, Research Cyclotron, and Commercial Radioisotope Cyclotron Projects at
EBCO Technologies, Inc. since 1987. Dr. Erdman received his Ph.D. in Physics
from the University of British Columbia. Prior to joining Ebco, he worked as
Associate Director of TRIUMF, Canada's National Meson Facility located in
Vancouver, BC, and was involved as part of the team who built TRIUMF in 1972. He
is an internationally recognized expert in negative ion cyclotrons,
radio-frequency systems in Cyclotron Accelerators, charged particle beam line
design and operation, and cyclotron applications. Dr Erdman taught at the
Physics Department at the University of British Columbia. He has had many
accepted international articles published on physics. He has joined the Company
as a scientific advisor in cyclotron operations and controls.

Richard R. Johnson, Ph.D. has worked as Program Manager on PET Medical
Cyclotron, Research Cyclotron, and Commercial Radioisotope Cyclotron Projects at
EBCO Technologies since 1996. Dr. Johnson received his Ph.D. in Physics from the
University of British Columbia. Prior to joining Ebco, he worked as Division
Head of TRIUMF, Canada's National Meson Facility located in Vancouver, BC, and
was involved as part of Administration, Technical and Applied Programs
responsible for medical applications. He has joined the Company as a scientific
advisor in cyclotron operations and manufacturing procedures.

Hermann Schweickert, Ph.D. is the head of the Cyclotron Laboratory at
the National Laboratory of Germany. Dr. Schweickert received his Ph.D. in
Physics from University of Heidelberg, Germany. He was responsible for the
design, construction and operation of two accelerators at the laboratory. He is
the head of the accelerator development group. He is a member the Institute of
Nuclear Physics and The Institute of Neutron Physics and Reactor Technology. Dr.
Schweickert is an expert for the International Atomic Energy Agency throughout
the world in the field of radioisotope production for medical applications. He
has published extensively in international physics journals. He has joined the
Company as a scientific advisor in cyclotron operations and targets.

Volker Bechtold, Ph.D. is the Deputy Director of the Cyclotron
Laboratory at the National Laboratory of Germany. Dr. Bechtold received his
Ph.D. in Physics of the University of Karlsrule, Germany. Previously, he was the
scientist responsible for the design, construction and operation of the 42 MeV
Cyclotron. He has worked as Director of Isotope Production and in the research
center of the National Laboratory developing many of the radiopharmaceuticals
for medical applications in Europe. Dr. Bechtold is an expert for the
International Atomic Agency (IAEA) throughout the world in the field of
radioisotope production for medical applications. He has published extensively
in international physics journals. He has joined the Company as a scientific
advisor in cyclotron operations, targets, (gas and solid), manufacturing and
production of radiochemicals and radiopharmaceuticals.

Robert L. Mundis, Certified Health Physicist is the radiation
protection officer for the Company. His responsibilities will include, but not
be limited to, the following: enforce compliance with all safety rules as
contained in radioactive materials license and as promulgated by the federal,
state and local governments; to inspect the Company according to the provisions
of the radioactive license on a quarterly basis and issue reports. He has worked
as a Certified Health Physicist at the Los Alamos National Laboratory since
1991. Mr. Mundis received his BA in Mathematics from the University of Niagara.
He is a Technical Staff Member in the TA-53 Accelerator Health Physics Section
of the HS-1 Health Physics Operations Group at the Laboratory.

Ronald J. Callahan Ph.D. is the Nuclear Pharmacist at the Division of
Nuclear Medicine, Massachusetts General Hospital (Harvard Medical School). He
received his Ph.D. at the Massachusetts College of Pharmacy. He is an expert in
the field of pharmaceuticals and radiopharmaceuticals and on the Advisory Panel
of the United States Pharmacopeia & National Formulary. He has served on the
Board of Trustees of the Society of Nuclear Medicine. Dr. Callahan is a member
of numerous societies, of which one is the Radiopharmaceutical Science Council
of the Society of Nuclear Medicine.

The members of the Medical and Scientific Advisory Board are expected
to advise us on technical and scientific issues. We anticipate that the board of
advisors will review the technical progress of the Company's products,
engineering and research and development, and will be compensated at a rate per
meeting to be determined by our Board of Directors, plus reasonable travel
expenses in connection with such meetings. The advisors will make
recommendations to us regarding product capability and specifications,
engineering designs and research and development objectives, and our future
technical development. We do not intend to retain individuals to serve as
advisors whose primary employers, or other third parties with whom such
individuals have consulting arrangements, are in competition with us. Advisors
may be retained individually by us on a consulting basis to perform work
specifically for and at our direction. The members of the Medical and Scientific
Advisory Board have each received 5,000 shares of common stock for their
participation on this board.

Summary Compensation Table

The following table sets forth the compensation paid or accrued, for
the fiscal years ended March 31, 1999, 1998 and 1997 for our President and
Executive Vice President. Other than our President, we have no officer whose
salary and bonus were in excess of $100,000. There is no executive officer,
other than those listed on the following table, who was awarded, earned or paid
more than $100,000 for the fiscal year ended March 31, 1999, 1998 and 1997. The
Company does not have any option or other grants outstanding.

- ---------------------------------------------------------------------------------------------------------
Bonus
Fiscal Year Salary Research and Cyclotron License
Name and Principal Position Ended Development and Design
- ---------------------------------------------------------------------------------------------------------

Malcolm H. Benedict, President 1999 $125,000 $120,000 $37,157
1998 $ 86,667 $ 67,600 -0-
1997 $ 50,000 $ 75,000 13,000
- ---------------------------------------------------------------------------------------------------------

Employment Agreements

We have entered into a Second Amended Employment Agreement with Mr.
Benedict. The Employment Agreement is for a term of three years, commencing
January 1, 1999 and provides that Mr. Benedict shall serve as Chief Executive
Officer of the Company. Mr. Benedict agrees to devote his full working time,
attention and energy to the business of the Company. Pursuant to the agreement,
Mr. Benedict is entitled to a base salary of $125,000 per year, plus additional
compensation for new additions or changes to an original license application in
an amount not less than $40,000 per license application. The employment
agreement also provides that the employee is entitled to additional incentive
compensation as determined by the board of directors, from time to time, for the
performance of duties not customarily performed by a President and Chief
Executive Officer of a radiopharmaceutical company. In the Employment Agreement,
Mr. Benedict agrees to waive any compensation owed to him and which was not paid
for calendar years prior to 1999; provided, however, the board of directors may
consider such waiver in determining any additional incentive compensation. Mr.
Benedict will be entitled to six weeks' vacation per year, locally recognized
holidays and other benefits pursuant to plans approved by the Company offered to
all employees. The employment agreement may be terminated by Mr. Benedict upon
60 days' notice or by the Company for cause. Furthermore, the Employment
Agreement will be terminated upon Mr. Benedict's death and may be terminated
upon his disability, provided he shall, in either case, be entitled to receive
his salary for six months following such termination. The employment agreement
also contains confidentiality provisions prohibiting Mr. Benedict from
disclosing trade secrets and other proprietary information.

We have entered into an Employment Agreement with Dr. Ludwig. The
Employment Agreement is for a term of five years, commencing April 1, 1998 and
provides that Dr. Ludwig shall serve as Executive Vice President of the Company.
Dr. Ludwig agrees to devote his full working time, attention and energy to the
business of the Company. Pursuant to the agreement, Dr.Ludwig is entitled to a
base salary of $100,000 per year, plus additional compensation for new additions
or changes to an original license application in an amount not less than $40,000
per license application. The employment agreement also provides that Dr.Ludwig
is entitled to additional incentive compensation as determined by the board of
directors, from time to time, for the performance of duties not customarily
performed by an Executive Vice President of a radiopharmaceutical company. In
the Employment Agreement, Dr. Ludwig stipulates that, during the first two years
of the agreement, the Company may not be able to pay the full amount of the
agreed salary and agrees to accept a lesser amount without the expectation of
being paid the balance during any future year. The board of directors may
consider such waiver in determining any additional incentive compensation. Dr.
Ludwig will be entitled to six weeks' vacation per year, locally recognized
holidays and other benefits pursuant to plans approved by the Company offered to
all employees. The employment agreement may be terminated by Dr. Ludwig upon 60
days' notice or by the Company for cause. Furthermore, the Employment Agreement
will be terminated upon Dr. Ludwig's death and may be terminated upon his
disability, provided he shall, in either case, be entitled to receive his salary
for six months following such termination. The employment agreement also
contains confidentiality provisions prohibiting Dr. Ludwig from disclosing trade
secrets and other proprietary information. For the period from April 11, 1998 to
December 31, 1999, Dr. Ludwig worked on a part-time basis and was paid
approximately half of the salary stated in the employment agreement.

Stock Option Plan

At the current time, we do not have a stock option plan that has been
approved by the shareholders.

Committees of the Board of Directors

We have not established any committees of the board of directors at
this time. We anticipate establishing committees for audit and executive
compensation during the second quarter of 2000, each of which are expected to be
headed by an outside director.

Director Compensation

We reimburse directors for reasonable travel expenses incurred in
connection with their activities on behalf of the Company, but we do not pay
directors any fees for board participation.

In March 1999 we issued 66,667 shares (100,000 pre-split) of the
Company's common stock to Dr. Ludwig as a bonus for his services as director of
the Company. The shares were valued at the time of issuance at $1.125 per share
($.75 per share - pre-split).

Indemnification of Directors and Officers

Our Bylaws eliminate the liability of an officer or director, or former
officer or director, of the Company for expenses actually and necessarily
incurred in connection with the defense of any action, suit or proceeding in
which they are made parties, except in relation to matters as to which they are
adjudged to be liable for negligence or misconduct in the performance of their
duties. Our Articles of Incorporation provide that the board of directors may
indemnify each officer, director, employee or agent of the Company against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with an action, suit or proceeding if the
director, officer, employee or agent acted in good faith and in a manner he
reasonably believed to be in the best interest of the Company and, with respect
to any criminal action or proceeding, he had no reasonable cause to believe his
action was unlawful. If any director, officer or controlling person in
connection with the securities being registered asserts a claim for
indemnification related to such liabilities, other than the payment by us of
expenses incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act of 1933, as amended, and we will be governed by the final adjudication of
such issue.

PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to the
beneficial ownership of shares of common stock held by:

o each person or entity who is known by us to beneficially own five
percent or more of the common stock;
o each director and executive officer of the Company; and
o all directors and executive officers of the Company as a group.

Percentage of Shares
Beneficially Owned (3)
Name of Beneficial Owner (1) Number of Shares(2) Before Offering After Offering
- ---------------------------- ------------------- --------------- --------------

Malcolm H. Benedict 3,119,000 36.00% 32.00%
Donald A. Ludwig 66,667 0.80% 0.70%
Janet L. Davis 6,667 0.08% 0.07%
Vernon L. Morris 75,000 0.90% 0.80%
David D. Mc Nurlin 59,489 0.70% 0.60%
All Directors and Executive
Officers as a group (five) persons 3,326,823 38.48% 33.54%
Jacqueline Rae Quinn (4) 821,333 9.50% 8.50%
First Trust Corporation (5) 513,333 5.90% 5.30%
Total of all Principal Shareholders 4,661,489 53.88% 47.34%

(1) Unless otherwise indicated, the address for each named individual or group
is in care of the Company at 1880 Industrial Circle, Suite B-3, Longmont,
CO 80501.
(2) Reflects 3 for 2 reverse stock split.
(3) Unless otherwise indicated, we believe that all persons named in the table
have sole voting and investment power with respect to all shares of common
stock beneficially owned by them. None of the persons listed owns any
options or other rights to acquire additional shares of the Company's
common stock.
(4) Jacqueline Rae Quinn is the beneficial owner of these shares, which were
acquired by James C. Quinn while he served as a director of the Company.
Mr. Quinn resigned as a director of the Company, effective July 7, 1999.
(5) These shares beneficially owned by Arthur W. Young, a former director of
the company.

CERTAIN TRANSACTIONS

Related party transactions

During the years ended March 31, 1999 and 1998, and for the period from
February 19, 1992 (inception) through March 31, 1999, the Company paid officers
$157,157, $67,600, and $559,533 (unaudited) respectively, for compensation that
is included in the accompanying financial statements as research and development
costs.

During the nine months ended December 31, 1999, the Company paid
officers $23,500 (unaudited) for compensation that was charged to research and
development costs. Additional expenses of $62,552 (unaudited) resulted in
research and development costs totalling $86,052 (unaudited) for the 9 months
ended December 31, 1999.

During the year ended March 31, 1999, the Company issued 103,500 shares
of no par value common stock to employees for compensation valued by management
at the fair value of the common stock, or $.75 per share. These shares are
"restricted securities" and may be sold only in compliance with Rule 144 of the
Securities Act.

We believe that these transactions were fair and reasonable to us and
were on terms no less favorable than could have been obtained from unaffiliated
third parties. Any such future transactions will be on terms no less favorable
to us than could be obtained from unaffiliated parties.

ARTICLES AND BYLAWS

Our Articles of Incorporation and Bylaws contain certain provisions
regarding the rights and privileges of shareholders, some of which may have the
effect of discouraging certain types of transactions that involve an actual or
threatened change of control, diminishing the opportunities for a shareholder to
participate in tender offers, including tender offers at a price above the then
current market value of the common stock or over a shareholder's cost basis in
the common stock, and inhibiting fluctuations in the market price of the common
stock that could result from takeover attempts. Such provisions could work to
the detriment of shareholders in the event that management has any interests
over and above those of the shareholders. These provisions of the Articles and
Bylaws are summarized below. Reference is made to the full text of the Articles
and Bylaws. The following summary is qualified in its entirety by such
reference.

Size of Board and Election of Directors. The Articles provide that the
number of Directors shall be fixed from time to time as provided in the Bylaws.
The Bylaws currently provide at least three persons to serve on the Board. The
Articles further provide that the Board may enact, alter, amend and repeal the
Bylaws by action taken in accordance with such Bylaws, not inconsistent with the
Articles or applicable law, including dividing the Board of Directors into three
classes. At the current time all directors are elected at each annual meeting of
shareholders.

DESCRIPTION OF SECURITIES

General

We are authorized to issue 45,000,000 shares of common stock, without
par value and 5,000,000 shares of preferred stock, without par value. As of the
date of this prospectus, we have outstanding 8,654,515 shares of common stock
owned by approximately 327 holders of record. In November, 1999, the Company's
shareholders approved a three for two reverse stock split of the common stock.
There are no shares of preferred stock currently outstanding.

Common Stock

The holders of common stock are entitled to one vote for each share
held of record in the election of directors and in all other matters to be voted
on by the shareholders. There is no cumulative voting with respect to the
election of directors. As a result, the holders of more than 50% of the shares
voting for the election of directors can elect all of the directors. Holders of
common stock are entitled:

o To receive any dividends as may be declared by the Board of Directors
from funds legally available for such purpose; and
o In the liquidation, dissolution, or winding up of the Company, to share
ratably in all assets remaining after payment of liabilities and after
provision has been made for each class of stock, if any, having preference
over the common stock. All of the outstanding shares of common stock are,
and the shares of common stock offered hereby will be, upon issuance and
sale, validly issued, fully paid, and nonassessable. Holders of common
stock have no preemptive right to subscribe for or purchase additional
shares of any class of our capital stock.

Preferred Stock

The Board of Directors has the authority, within the limitations and
restrictions stated in the Articles of Incorporation, to provide for the
issuance of shares of preferred stock, in one or more series, and to fix the
rights, preferences, privileges and restrictions, thereof, including dividend
rights, conversion rights, voting rights, terms of redemption, liquidation
preferences and the number of shares constituting any series or the designation
of such series. The issuance of preferred stock could have the effect of
decreasing the market price of the common stock and could adversely affect the
voting and other rights of the holders of common stock.

Transfer Agent and Registrar

We intend to act as our own Transfer Agent and Registrar for the common
stock initially and later to arrange for a stock transfer and trust company to
take this responsibility.

LIMITATIONS OF DIRECTORS' LIABILITY AND INDEMNIFICATION
OF DIRECTORS AND OFFICERS

Our Bylaws provide that our directors will not be personally liable for
expenses actually and necessarily incurred by them in connection with the
defense of any action, suit or proceeding in which they, or any of them, are
made parties except in instances in which they are adjudged to be liable for
negligence or misconduct. Such limitations are designed to protect the directors
at the possible disadvantage of shareholders; however, management believes such
protection is necessary to induce talented individuals to serve on the board.

We have included provisions in our Articles of Incorporation providing
for indemnification of our directors, officers, employees and agents by us,
including the advancement of expenses incurred by a director, officer, employees
and agents in any suit in which any of these people are involved. We believe
that such actions will assist us in attracting and retaining qualified
individuals to serve as directors, officers, employees, or agents. Prospective
investors should be aware, however, that the costs associated with indemnifying
a director, officer, employees and agents could be significant and, if not
covered by insurance, could adversely affect our results of operations.
Furthermore, in situations where we have advanced litigation expenses to a
director, officer, employees and agents and the director, officer, employees and
agents is required to repay the expenses because it is ultimately determined
that he is not entitled to indemnification, the director, officer, employees or
agents may not have sufficient cash or assets to repay the expenses advanced.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and therefore
unenforceable. If a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by one of our
directors, officers or controlling persons 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, we will submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

LIMITATIONS ON TRANSFER OF SHARES

There is currently no public market for our common stock, and there is
little likelihood that an active trading market will develop in the near future
as a result of this offering. The Registration Statement, of which this
prospectus is a part, is intended to be qualified with the Securities and
Exchange Commission pursuant to Form SB-2 under the Securities Act, and as such,
the shares will become freely traded under the federal securities laws. The
shares, however, will have been registered in only a limited number of states
and may not be sold or otherwise transferred to persons who are residents of any
state in which the shares have not been registered unless they are subsequently
registered or there exists an exemption from the applicable state's registration
requirements with respect to such sale or transfer.

QUALIFIED SMALL BUSINESS ISSUER CAPITAL GAINS TAX EXCLUSION

In 1993, IRS Section 1202 was enacted to provide a 50-percent exclusion
of any gain from the sale of "qualified small business stock." For the shares to
qualify for the exclusion, several tests must be met. For instance, the shares
must be purchased directly from the Company, not in a later trading market, and
the shares must be held for at least five years. In addition, a "qualified small
business" must not have more than $50 million in assets at all times before the
issuance of the stock and immediately thereafter.

Further, at least 80 percent of the assets must be used in the "active
conduct of one or more qualified trades or businesses" throughout the holding
period. There are also limitations on the persons who may use the exclusion.
Prospective investors should consult their own tax advisers as to the
availability of the exclusion.

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of this offering, we will have up to 9,654,515 shares
of common stock outstanding, of which the 1,000,000 being offered hereby will be
freely tradable without restriction or further registration under the Securities
Act, except for any shares purchased by an "affiliate", which will be subject to
the resale limitations of Rule 144 promulgated under the Securities Act.

All of the remaining 8,654,515 shares of common stock currently
outstanding are "restricted securities" or owned by "affiliates", as those terms
are defined in Rule 144, and may not be sold publicly unless they are registered
under the Securities Act or are sold pursuant to Rule 144 or another exemption
from registration. The 8,654,515 restricted shares will be eligible for sale
without registration under Rule 144, 365 days following the completion date of
this prospectus.

Lockup Agreement

All executive officers and directors and certain principal shareholders
(representing over 48% of the 9,654,515 outstanding shares of common stock) have
agreed for a period of 12 months following the qualification date of this
prospectus, without the underwriter's prior written consent, not to, sell or
otherwise dispose of any shares of common stock in any public market transaction
including pursuant to Rule 144.

Rule 144

In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of us
or persons whose shares are aggregated with an affiliate who has owned
restricted shares of common stock beneficially for at least one year, is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of:

o 1% of the then outstanding shares of the issuer's common stock; or
o the average weekly trading volume during the four calendar weeks preceding
such sale, provided that certain public information about the issuer, as
required by Rule 144, is then available and the seller complies with
certain other requirements.

Rule 144(k)

A person who is not an affiliate, has not been an affiliate within
three months prior to sale, and has beneficially owned the restricted shares for
at least two years, is entitled to sell such shares under Rule 144(k) without
regard to any of the limitations described above.

Minimal Prior Market

Prior to this offering, there has been no market for the common stock,
and we cannot predict the effect, if any, that market sales of shares of common
stock, or the availability of such shares for sale, will have on the market
prices of the common stock prevailing from time to time. Nevertheless, the
possibility that substantial amounts of common stock may be sold in the public
market may adversely affect prevailing market prices for the common stock and
could impair our ability to raise capital through the sale of our equity
securities.

PLAN OF DISTRIBUTION

We are offering to sell 200,000 shares (minimum) and up to 1,000,000
shares (maximum) of common stock at an offering price of $10.00 per share on a
best-efforts basis. We have agreed to pay to a broker-dealer, Three Arrows
Capital Corporation, 10101 Grosvenor Place #2016, Rockville, MD 20852 (301) 897
3889 (the "Selling Agent") a sales commission of 8 percent, or $.80 per share.
In addition, we have agreed to issue warrants to the broker-dealer to purchase
shares at the offering price, within the four years following the completion of
the offering, at the rate of one warrant for each fifteen shares sold, and paid
a fee of $10,000 for due diligence and consultation. Warrants to be received by
the Selling Agent are restricted from sale, transfer, assignment or
hypothecation for a period of two years from the effective date of the offering
except to officers or partners (not directors) of the Selling Agent and members
of the selling group and/or their officers or partners. Three Arrows Capital
Corp. is a registered broker-dealer with the NASD and is registered with the
states of New York, Maryland, Virginia and numerous other jurisdictions. We have
also agreed to indemnify the Selling Agent for any material misstatement in its
filing. We have no plans, proposals, arrangements, or understandings with the
Selling Agent, other than the warrant shares of the Company's common stock, with
regard to future transactions. No other material relationships exist between the
Selling Agent and us or our management.

None of our officers, employees, or directors will be paid a commission
in connection with the sale of any shares, nor will any officer, employee or
director undertake the sale of the shares. Sale of the shares will only be
undertaken by the Selling Agent. None of the principal shareholders nor our
management nor the Selling Agent will buy shares in the offering. The shares
will be offered by the Selling Agent on our behalf primarily through direct
solicitations, media coverage, and posting of announcements.

We reserve the right to reject any subscription in its entirety or to
allocate shares among prospective investors. If any subscription is rejected,
funds received by us for such subscription will be returned with interest and
without deduction. The Company will enter into an escrow agreement with Norwest
Bank, Colorado, NA(the "Escrow Agent") pursuant to which the Escrow Agent will
hold all funds deposited with it by the Selling Agent until the minimum of
$2,000,000 has been received. If the minimum has not been reached by ________,
200_, which period may be extended for an additional 180 days at the option of
the Company, funds will be returned to the subscribers without interest.
Subscribers will be required to make certain representations and warranties in
the subscription agreement that should be carefully read before signing.

Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price per share of the common
stock will be determined arbitrarily by negotiation between the Company and the
Selling Agent and does not necessarily bear any relationship to the Company's
asset value, net worth or other established criteria of value. The factors
considered in such negotiations, in addition to prevailing market conditions,
include the history and prospects of the industry in which the Company competes,
and assessment of the Company's management, the prospects, of the Company, its
capital structure, the market for initial public offerings and certain other
factors as are deemed relevant.

Once the minimum has been reached, within five days of its receipt of
a subscription agreement from the Selling Agent confirming that an accompanying
check for the purchase price of shares has been received, we will send by first
class mail a written confirmation to notify the subscriber of the extent, if
any, to which subscription has been accepted by us. We reserve the right to
reject orders for the purchase of shares in whole or in part. Not more than
thirty days following the mailing of its written confirmation a subscriber's
common stock certificate will be mailed by first class mail.

LEGAL MATTERS

Certain legal matters with respect to the validity of the common stock
offered hereby will be passed upon for us by Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, P.C.

EXPERTS

The financial statements as of and for the years ended March 31, 1999
and 1998 have been audited by the firm of Cordovano and Harvey, P.C.,
independent auditors, as indicated in their report with respect thereto, and are
included herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

We have filed a registration statement on Form SB-2 under the
Securities and Exchange Commission in Washington, D.C. with respect to the
securities offered hereby. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in the
registration statement and the exhibits and schedules thereto. For further
information with respect to us and the securities offered hereby, reference is
made to the registration statement and the exhibits and schedules thereto filed
as a part thereof. Statements contained in this prospectus as to the contents of
any contract or other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference. The registration statement, including all amendments, exhibits and
schedules thereto, may be inspected without charge at the office of the
Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, NW,
Washington, D.C. 20549 or by calling 1/800/SEC-0330. Copies of such material may
also be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, NW, Washington, D.C. 20549. In addition, the
Securities and Exchange Commission maintains a web site that contains reports,
proxy and information statements and other information regarding issues that
file electronically with the Commission. The address of the site is
http://www.sec.gov.

As a result of this offering, we will become subject to the information
and reporting requirements of the SEC and will be required to file periodic
reports, proxy statements and other information with the SEC. We intend to
furnish to our stockholders annual reports containing audited financial
statements and we may also issue quarterly reports containing unaudited interim
financial information for the first three quarters of each fiscal year.

Glossary

Particle Accelerator A machine that accelerates charged
proton particles to an energy level suitable
for causing stable isotopes to be transformed
into radioisotopes.

Cold Kit The pharmaceutical element to which a
radiochemical is attached prior to injection
into the patient. These can be diagnostic or
therapeutic in function.

Curie Unit used in measuring radioactivity.

Cyclotron Machine used to produce radioactive isotopes.
A particle accelerator used to produce
radionuclides. It is essentially an FM
broadcast transmitter, under vacuum, inside
an electromagnet.

DMF Drug Master File. A compilation of
information relating to the proposed
product to determine the identity, purity,
strength and manufacturing documentation used
for the product and also contains analytical
methods for documentation and compliance with
established specifications. The DMF does not
contain any clinical information, but becomes a
part of the NDA.

Dynamic Organ Function Monitoring and measurement of organ function.

Enzymatic An enzyme is a complex protein produced by
living cells, capable of acting independently
as a catalyst.

FDA Federal Food and Drug Administration.
Branch of the Federal government
that oversees the manufacturing and sales of
ethical drugs.

Gallium-67 applications This nuclide in its chemical form,
gallium citrate, tends to concentrate in
abscesses and tumors. The clinical application
is the detection of cancer, determination of
activity level and prognosis for the patient.
Also, a good infection-screening isotope.

Gamma Camera Equipment that enables a physician to
follow externally the course of
radiopharmaceutical given to a patient. It
utilizes gamma rays.

Gamma Ray Electromagnetic radiation, similar to X-ray,
detectable by a gamma camera.

Geo-Sciences Sciences of the earth.

Generator A process that produces technetium-99m from the
raw material Molybdenum-99.

Imaging Technique in which either a gamma camera or
ultrasound is used to produce

IND Investigational New Drug. When granted, an IND
permits the manufacturer to produce a drug for
investigation purposes.

Isotope Nuclides with the same number of protons, but
different numbers of neutrons.

Metabolic Function The sum of all physical and chemical changes
that take place within an organ.

NDA New Drug Application. Manufacturer submits
application to the FDA when manufacturer has
developed clinical data and good-manufacturing
practices showing the product offers the
claimed efficacy and safety for medical use.
When accepted, NDA authorizes the manufacture
and sale.

Nuclide Individual atom described by specific number of
neutrons and protons.

Positron Emission
Tomography(PET) A non-invasive, diagnostic imaging technique
for measuring the metabolic activity of cells
in the human body.

Radioisotope Naturally occurring or artificially created
radioactive isotope of a chemical element.
Radioisotopes are used in medical therapy and
biological research.

Radiopharmaceutical Radioactive drug used for
diagnostic or therapeutic procedures.

Radiochemical Radioactive compound.

Target A stable isotope that when bombarded with
charged particles from an accelerator results
in a neutron deficient radiochemical.

Technetium-99m The process of separating technetium-99m from
Molybdenum 99; the result is a
radiopharmeceutical drug product.

Voltage Gradient Differential between high and low energies
(used to accelerate sub-atomic particles as in
a cyclotron.)

Xenon-133 A radioactive gas used as a radiopharmaceutical

Item 22. Financial Statements

INDEX TO FINANCIAL STATEMENTS

Page

Independent auditors' report.................................................F-2

Balance sheets, March 31, 1999 and December 31, 1999 (unaudited).............F-3

Statements of operations, for the years ended March 31, 1999 and 1998,
February 19, 1992 (inception) through March 31, 1999 (unaudited), for
the nine months ended December 31, 1999 and 1998 (unaudited), and
from February 19, 1992 (inception) through December 31, 1999 (unaudited)..F-4

Statement of shareholders' equity, from February 19, 1992 (inception)
through December 31, 1999 (unaudited).....................................F-5

Statements of cash flows, for the years ended March 31, 1999 and 1998,
February 19, 1992 (inception) through March 31, 1999 (unaudited), for
the nine months ended December 31, 1999 and 1998 (unaudited), and
from February 19, 1992 (inception) through December 31, 1999 (unaudited)..F-9

Summary of significant accounting policies..................................F-10

Notes to financial statements...............................................F-14

F-1

INDEPENDENT AUDITORS REPORT

To the Board of Directors and Shareholders
Molecular Diagnostics and Therapeutics, Inc.
(Formerly Nu-Tec., L.T.D.)

We have audited the accompanying balance sheet of Molecular Diagnostics and
Therapeutics, Inc. (formerly Nu-Tec., L.T.D.) (a development stage company) as
of March 31, 1999 and the related statements of operations, shareholders'
equity, and cash flows for the years ended March 31, 1999 and 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Molecular Diagnostics and
Therapeutics, Inc. as of March 31, 1999, and the results of its operations and
its cash flows for the years ended March 31, 1999 and 1998 in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in the Summary of Significant
Accounting Policies, the Company has no revenues and has experienced significant
operating losses during the periods from February 19, 1992 (inception) through
March 31, 1999, which raises a substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in the Summary of Significant Accounting Policies. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Cordovano and Harvey, P.C.
Denver, Colorado
June 22, 1999

F-2

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.
(Formerly Nu-Tec., L.T.D.)
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

March 31, December 31,
1999 1999
--------- ------------
(Unaudited)
ASSETS

CURRENT ASSETS
Cash..........................................................................................$.4,883 $.44,394
Prepaid expenses.............................................................................. 2,012 -
------- -------
TOTAL CURRENT ASSETS 6,895 44,394

FURNITURE AND EQUIPMENT, less accumulated depreciation
totaling $64,066 and $77,031 (unaudited), respectively (Note C)............................... 29,186 20,410

DEPOSITS........................................................................................... 4,350 4,350
------- -------
$40,431 $69,154
======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable............................................................................. $.9,940 $.17,742

TOTAL CURRENT LIABILITIES

COMMITMENTS (Note G).............................................................................. - -

SHAREHOLDERS' EQUITY (Note E)
Preferred stock, no par value, 5,000,000 shares authorized;
22,875 and -0- (unaudited) shares issued and outstanding,
respectively.............................................................................. 128,039 -
Common stock, no par value, 45,000,000 shares authorized;
8,008,206 (post-split) and 8,654,515 (post-split) (unaudited)
shares issued and outstanding, respectively...............................................1,965,392 2,683,279
Deferred offering costs...................................................................... (86,405) (146,555)
Deficit accumulated during the development stage............................................(1,976,535) (2,485,312)
------- -------
TOTAL SHAREHOLDERS' EQUITY 30,491 51,412
------- -------
$40,431 $69,154
======= =======

See accompanying summary of significant accounting policies and notes to
financial statements.

F-3

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC
(Formerly Nu-Tec., L.T.D.)
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

February 19, February 19,
1992 1992
Years Ended (Inception) Nine Months Ended (Inception)
March 31, Through December 31, Through
-------------------------- March 31, -------------------------- December 31,
1999 1998 1999 1999 1998 1999
----------- ----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

COSTS AND EXPENSES
Salaries and payroll taxes ........ $ 174,915 $ 97,745 $ 432,382 $ 177,874 $ 203,571 $ 610,256
Stock-based compensation
(Notes B&E):
Employee compensation .......... 77,625 -- 77,625 40,450 -- 118,075
Professional fees .............. 143,700 -- 143,700 16,850 -- 160,550
Directors' fees ................ -- -- - 26,250 -- 26,250
Research and development
costs (Note B) ..... 157,157 67,600 559,533 86,052 15,800 645,585
Web site, graphics and
computer services .... 43,425 -- 43,425 28,012 40,825 71,437
Rent .............................. 37,413 23,348 132,340 33,402 30,363 165,742
Professional fees ................. 44,796 25,670 101,208 18,347 38,742 119,555
Office ............................ 12,600 6,489 42,473 9,674 9,317 52,147
Postage ........................... 5,402 8,128 19,477 4,470 3,317 23,947
Telephone ......................... 7,832 5,979 40,002 14,525 4,507 54,527
Contract labor .................... 12,213 13,800 233,712 28,242 6,389 261,954
Repairs and maintenance ........... 340 2,286 9,184 1,135 -- 10,319
Depreciation ...................... 17,857 10,192 63,973 12,965 7,896 76,938
Other ............................. 16,542 15,739 77,264 10,529 21,339 87,793
----------- ----------- ----------- ----------- ----------- -----------
OPERATING LOSS ............ (751,817) (276,976) (1,976,298) (508,777) (382,066) (2,485,075)

INTEREST EXPENSE ....................... -- (109) (237) -- -- (237)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES .. (751,817) (277,085) (1,976,535) (508,777) (382,066) (2,485,312)

INCOME TAX BENEFIT
(EXPENSE) (Note D)
Current ........................... 324,429 119,924 777,269 211,271 141,880 988,540
Deferred .......................... (324,429) (119,924) (777,269) (211,271) (141,880) (988,540)
----------- ----------- ----------- ----------- ----------- -----------

NET LOSS ............. $ (751,817) $ (277,085) $(1,976,535) $ (508,777) $ (382,066) $(2,485,312)
=========== =========== =========== =========== =========== ===========

Basic loss per common share ............ $ (0.10) $ (0.04) $ (0.06) $ (0.05)
=========== =========== =========== ===========
Basic weighted average common
shares outstanding ................ 7,608,692 6,763,943 8,346,570 7,518,516
=========== =========== =========== ===========

Diluted loss per common share .......... $ (0.10) $ (0.04) $ (0.06) $ (0.05)
=========== =========== =========== ===========
Diluted weighted average common shares
shares outstanding ................. 7,608,692 6,763,943 8,346,570 7,518,516
=========== =========== =========== ===========

See accompanying summary of significant accounting policies and
notes to financial statements.

F-4

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC
(Formerly Nu-Tec , L T D )
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF SHAREHOLDERS' EQUITY
February 19, 1992 (inception) through December 31, 1999 (unaudited)

Deficit
Accumulated
Preferred Stock Common Stock Deferred During the Total
----------------------- ------------------------- Offering Development Shareholders
Shares Amount Shares Amount Costs Stage Equity
---------- ---------- ---------- ---------- ---------- ---------- -----------

Balance, February 19, 1992
(inception) ................ -- $ -- -- $ -- $ -- $ -- $ --

Sale of common stock, $0.0001
per share (Note B) ........ -- -- 5,250,000 578 -- -- 578

Issuance of convertible
preferred shares in
exchange for intellectual
property rights at
$0 0001 per share ........... 100,000 10 -- -- -- -- 10

Sale of common stock, $0 015
per share (Note E) ........ -- -- 400,000 6,000 -- -- 6,000

Shares issued for services,
valued at cost, $0 015
per share (Note E) ......... -- -- 120,000 1,800 -- -- 1,800

Conversion of convertible
preferred stock to
common stock at a rate
of 1 to 4 .................. (100,000) (10) 400,000 10 -- -- --
--------- --------- ---------- --------- -------- --------- --------
BALANCE, MARCH 31, 1992
(unaudited) ......... -- -- 6,170,000 8,388 -- -- 8,388
--------- --------- ---------- --------- -------- --------- --------
Sale of Class B convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $50,289,
$5.00 per share ............ 29,000 94,711 -- -- -- -- 94,711

Net loss for the year ended
March 31, 1993 ............. -- -- -- -- (95,678) (95,678)
--------- --------- ---------- --------- -------- --------- --------
BALANCE, MARCH 31, 1993
(unaudited) .......... 29,000 94,711 6,170,000 8,388 -- (95,678) 7,421
--------- --------- ---------- --------- -------- --------- --------
Shares issued for services,
valued at cost,
$0.001 per share (Note B) .. -- -- 905,000 905 -- -- 905

Sale of Class B convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $4,195,
$5.00 per share ............ 2,700 9,305 -- -- -- -- 9,305

Conversion of Class B
convertible preferred
stock to common stock
at a rate of 1 to 12,
respectively ............... (31,700) (104,016) 380,400 104,016 -- -- --

Shares issued for prizes,
$0.4166 per share .......... -- -- 8,500 3,540 -- -- 3,540

Sale of common stock,
$0.22 per share ............ -- -- 50,000 11,000 -- -- 11,000

Shares issued for services,
valued at cost $0.22
per share (Note E) ........... -- -- 200,000 44,000 -- -- 44,000

Net loss for the year ended
March 31, 1994 ................ -- -- -- -- -- (90,504) (90,504)
--------- --------- ---------- --------- -------- --------- --------
BALANCE, MARCH 31, 1994
(unaudited) ........... -- -- 7,713,900 171,849 -- (186,182) (14,333)
--------- --------- ---------- --------- -------- --------- --------
Sale of common stock,
$0.625 per share ........... -- -- 2,500 1,565 -- -- 1,565

Shares issued for prizes,
$0.4166 per share .......... -- -- 1,000 417 -- -- 417

See accompanying summary of significant accounting
policies and notes to financial statements
F-5

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC
(Formerly Nu-Tec , L T D )
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF SHAREHOLDERS' EQUITY

February 19, 1992 (inception) through December 31, 1999 (unaudited)

Sale of Class A convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $28,990,
$5 00 per share .......... 25,000 96,010 -- -- -- -- 96,010

Conversion of Class A
convertible preferred
stock to common stock at
a rate of 1 to 8,
respectively ............. (25,000) (96,010) 200,000 96,010 -- -- --

Sale of Class C convertible
preferred shares,
pursuant to a private
placement memorandum,
$5 00 per share .......... 6,000 30,000 -- -- -- -- 30,000

Net loss for the year ended
March 31, 1995 ........... -- -- -- -- -- (119,509) (119,509)
--------- --------- ---------- --------- -------- --------- --------
BALANCE, MARCH 31, 1995
(unaudited) .......... 6,000 30,000 7,917,400 269,841 -- (305,691) (5,850)
--------- --------- ---------- --------- -------- --------- --------
Sale of common stock,
$0 625 per share ......... -- -- 5,000 3,132 -- -- 3,132

Sale of Class C convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $69,810,
$5 00 per share .......... 93,570 339,774 -- -- -- -- 339,774

Conversion of Class C
convertible
preferred stock to
common stock at a rate of
1 to 16, respectively .... (99,570) (369,774) 1,593,120 369,774 -- -- --

Sale of Class D convertible
preferred shares,
pursuant to a private
placement memorandum,
$5 00 per share .......... 18,100 108,600 -- -- -- -- 108,600

Conversion of Class D
convertible
preferred stock to
common stock at a rate of
1 to 12, respectively .... (11,600) (69,600) 139,200 69,600 -- -- --

Net loss for the year ended
March 31, 1996 ........... -- -- -- -- -- (430,541) (430,541)
--------- --------- ---------- --------- -------- --------- --------
BALANCE, MARCH 31, 1996
(unaudited) ......... 6,500 39,000 9,654,720 712,347 -- (736,232) 15,115
--------- --------- ---------- --------- -------- --------- --------
Sale of Class D convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $100,571,
$5 00 per share .......... 22,400 90,841 -- -- -- -- 90,841

Conversion of Class D
convertible
preferred stock to
common stock at a rate of
1 to 12, respectively .... (28,900) (129,841) 346,800 129,841 -- -- --

Sale of Class E convertible
preferred shares,
pursuant to a private
placement memorandum,
$6 00 per share .......... 12,835 77,010 -- -- -- -- 77,010

Conversion of Class E
convertible
preferred stock to
common stock at a rate of
1 to 12, respectively .... (12,835) (77,010) 154,020 77,010 -- -- --

See accompanying summary of significant accounting
policies and notes to financial statements
F-6

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC
(Formerly Nu-Tec , L T D )
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF SHAREHOLDERS' EQUITY

February 19, 1992 (inception) through December 31, 1999 (unaudited)

Shares issued for services,
valued at cost,
$0 50 per share (Note E) .... -- -- 13,133 6,566 -- -- 6,566

Sale of common stock,
$0 50 per share ............. -- -- 4,832 2,416 -- -- 2,416

Net loss for the year ended
March 31, 1997 .............. -- -- -- -- -- (211,401) (211,401)
---------- ---------- ---------- ---------- ---------- ---------- -----------
BALANCE, MARCH 31, 1997 ... -- -- 10,173,505 928,180 -- (947,633) (19,453)
---------- ---------- ---------- ---------- ---------- ---------- -----------
Sale of Class F convertible
preferred shares,
pursuant to a private
placement memorandum,
$6 00 per share ............. 20,500 123,000 -- -- -- -- 123,000

Conversion of Class F
convertible preferred
stock to common stock at
a rate of 1 to 12,
respectively ................ (10,500) (63,000) 126,000 63,000 -- -- --

Sale of common stock, $0.50
per share ................... -- -- 500 250 -- -- 250

Repurchase of common stock,
subsequently cancelled ...... -- -- (8,000) (5,873) -- -- (5,873)

Sale of Class G convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $49,125,
$6 00 per share ............. 67,351 354,981 -- -- -- -- 354,981

Net loss for the year ended
March 31, 1998 .............. -- -- -- -- -- (277,085) (277,085)
---------- ---------- ---------- ---------- ---------- ---------- -----------
BALANCE, MARCH 31, 1998 ... 77,351 414,981 10,292,005 985,557 -- (1,224,718) 175,820
---------- ---------- ---------- ---------- ---------- ---------- -----------
Sale of Class G convertible
preferred shares,
pursuant to a private
placement memorandum,
$6 00 per share ............ 1,000 6,000 -- -- -- -- 6,000

Conversion of Class F
convertible preferred
stock to common stock
at a rate of 1 to 12,
respectively .............. (10,000) (60,000) 120,000 60,000 -- -- --

Conversion of Class G
convertible preferred
stock to common stock
at a rate of 1 to 12,
respectively ................ (68,351) (360,981) 820,212 360,981 -- -- --

Sale of Class H convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $26,215,
$6.00 per share ............... 60,499 336,779 -- -- -- -- 336,779

Shares issued for prizes,
$0.75 per share ............... -- -- 1,000 750 -- -- 750

Shares issued for stock-based
compensation, valued at cost
of stock offering , $.75 per
share (Note E) ................ . -- -- 295,100 221,325 -- -- 221,325

See accompanying summary of significant accounting
policies and notes to financial statements
F-7

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC
(Formerly Nu-Tec , L T D )
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF SHAREHOLDERS' EQUITY

February 19, 1992 (inception) through December 31, 1999 (unaudited)

Conversion of Class H
convertible preferred
stock to common stock
at a rate of 1 to 8,
respectively................ (60,499) (336,779) 483,992 336,779 - - -

Sale of Class I convertible
preferred shares,
pursuant to a private
placement memorandum,
net of offering costs
totaling $9,211,
$6.00 per share.............. 22,875 128,039 - - - - 128,039

Offering costs related to
proposed initial
public offering (Note E).... - - - - (86,405) - (86,405)

Net loss for the year ended
March 31, 1999.............. - - - - - (751,817) (751,817)
---------- ---------- ---------- ---------- ---------- ---------- -----------
BALANCE, MARCH 31, 1999 22,875 128,039 12,012,309 1,965,392 (86,405) (1,976,535) 30,491
---------- ---------- ---------- ---------- ---------- ---------- -----------
Shares issued for stock-based
compensation, valued at
cost of stock offering,
$.75 per share (Note E)
(unaudited)................ - - 111,400 83,550 - - 83,550

Sale of Class I convertible
preferred shares,
pursuant to a private
placement memorandum,
$6.00 per share (unaudited) 34,458 206,748 - - - - 206,748

Conversion of Class I
convertible preferred
stock to common stock
at a rate of 1 to 8,
respectively (unaudited) (57,333) (334,787) 458,664 334,787 - - -

Sale of common shares to
existing shareholders,
$.75 per share (unaudited) - - 399,400 299,550 - - 299,550

3 for 2 reverse split of
common stock (unaudited)
(Note E)................... - - (4,327,258) - - - -

Offering costs related to
proposed initial public
offering (unaudited)
(Note E).................... - - - - (60,150) - (60,150)

Net loss for the nine
months ended
December 31, 1999
(unaudited)................. - - - - - (508,777) (508,777)
---------- ---------- ---------- ---------- ---------- ---------- -----------
BALANCE, DECEMBER 31, 1999
(unaudited)............. - $ - 8,654,515 $2,683,279 $ (146,555) $ (2,485,312) $ 51,412
========== ========== ========== ========== ========== ========== ===========

See accompanying summary of significant accounting policies
and notes to financial statements
F-8

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.
(Formerly Nu-Tec., L.T.D.)
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

February 19, February 19,
1992 1992
For The Years Ended (Inception) Nine Months Ended (Inception)
March 31, Through December 31, Through
----------------------- March 31, ------------------------ December 31,
1999 1998 1999 1999 1998 1999
---------- ----------- ----------- ----------- ----------- ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

OPERATING ACTIVITIES
Net loss...................................... $ (751,817) $ (277,085) $(1,976,535) $ (508,777) $ (382,066) $(2,485,312)

Transactions not requiring cash:
Depreciation............................... 17,857 10,192 63,973 12,965 7,896 76,938
Stock-based compensation (Note E).......... 221,325 - 221,325 83,550 221,325 304,875
Common stock issued for services........... - - 52,366 - - 52,366
Common stock issued for prizes............. 750 - 4,707 - 750 4,707

Changes in current assets and current
liabilities:
Receivables and other current assets....... (3,805) 4,812 (6,362) 2,012 - (4,350)
Accounts payable and accrued expenses...... (15,597) 25,537 9,940 7,802 (23,282) 17,742
---------- --------- ----------- ---------- ---------- -----------
NET CASH (USED IN)
OPERATING ACTIVITIES (531,287) (236,544) (1,630,586) (402,448) (175,377) (2,033,034)
---------- --------- ----------- ---------- ---------- -----------

INVESTING ACTIVITIES
Payments for furniture and equipment.......... (13,978) (24,449) (93,252) (4,189) (12,625) (97,441)
---------- --------- ----------- ---------- ---------- -----------
NET CASH (USED IN)
INVESTING ACTIVITIES (13,978) (24,449) (93,252) (4,189) (12,625) (97,441)

FINANCING ACTIVITIES
Proceeds from the issuance of preferred and
common stock............................... 506,244 461,350 2,159,405 506,298 75,544 2,665,703
Payments for the repurchase of common stock - (5,873) (5,873) - - (5,873)
Payments for offering costs................... (121,831) (49,125) (424,811) (60,150) - (484,961)
---------- --------- ----------- ---------- ---------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 384,413 406,352 1,728,721 446,148 75,544 2,174,869
---------- --------- ----------- ---------- ---------- -----------

NET CHANGE IN CASH (160,852) 145,359 4,883 39,511 (112,459) 44,394
Cash at beginning of year..................... 165,735 20,376 - 4,883 165,735 -
---------- --------- ----------- ---------- ---------- -----------
CASH AT END OF YEAR $ 4,883 $ 165,735 $ 4,883 $ 44,394 $ 53,276 $ 44,394
========== ========= =========== ========== ========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest........................ $ - $ 109 $ 237 $ - $ - $ 237
========== ========= =========== ========== ========== ===========
Cash paid for income taxes.................... $ - $ - $ - $ - $ - $ -
========== ========= =========== ========== ========== ===========

See accompanying summary of significant accounting policies
and notes to financial statements

F-9

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development stage company

Molecular Diagnostics and Therapeutics, Inc. (the "Company") is in the
development stage in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7.

Use of estimates

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

Cash equivalents

For the purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.

Furniture, equipment and depreciation

Furniture and equipment are recorded at cost. When capital assets are retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the respective accounts and the net difference, less any amount realized,
is reflected in the statement of operations.

Depreciation is calculated on the straight-line method over the useful lives of
the related assets.

Research and development costs

Costs to obtain certain intangible assets are accounted for in accordance with
SFAS No. 2, "Accounting for Research and Development Costs". Research and
development costs consist of the direct labor and expenses incurred in preparing
new drug applications and applying for Cyclotron and Radioactive Materials
Licenses. SFAS No. 2 requires that all research and development costs, except
those done for others under contract or certain government-related entities, be
charged to expense.

Income taxes

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and the tax
basis of assets and liabilities for financial and income tax reporting. The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.

F-10

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Web-site development costs

Web-site development costs are expensed when incurred.

Deferred offering costs

The Company incurred costs related to the offerings of its preferred stock and
common stock during the periods presented. All costs associated with the
Company's private stock offerings were deducted from proceeds received from
those offerings. Costs associated with the Company's planned public stock
offering will also be deducted from the gross proceeds at its conclusion.
However, should the offering not be successful, the deferred costs associated
with the public offering will be expensed at that time.

Earnings/(loss) per share

Effective December 31, 1997, Statement of Financial Accounting Standards No. 128
"Earnings Per Share" requires a dual presentation of earnings per share - basic
and diluted. Basic earnings per share has been computed on the weighted average
of common shares outstanding. Diluted earnings per share reflects the increase
in weighted average common shares outstanding that would result from the assumed
exercise of outstanding stock options and conversion of outstanding preferred
shares. For the years ended March 31, 1999 and 1998, 1,547,797 and 1,354,696
shares, respectively, were excluded from the diluted earnings per share
calculation, as these shares were anti-dilutive. Had these shares been included
in the calculation, diluted weighted average shares outstanding would have
increased to 12,960,835 and 11,500,611 for the years ended March 31, 1999 and
1998, respectively.

Fair value of financial instruments

The Company has determined, based on available market information and
appropriate valuation methodologies, that the fair value of its financial
instruments approximates carrying value. The carrying amounts of cash,
receivables, payables and other current liabilities approximate fair value due
to the short-term maturity of the instruments.

Stock-based compensation

During the period from February 19, 1992 (inception) through March 31, 1999, the
Company used shares of its no par value common stock to pay for various services
and for use as prizes. The Company also used shares of common stock to
compensate certain employees. During the same period, the Company granted stock
options to members of management. The Company accounted for these stock-based
compensation arrangements in a consistent manner, for all periods presented. For
shares of common stock issued to employees, consultants, and for prizes, the
Company valued the transaction at the historical fair value of the common stock
issued. The fair value of the common stock was adjusted to the most recent
historical price at which the Company offered its common stock for sale to
unrelated third party investors.

F-11

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Stock-based compensation, continued

The Company applied the "intrinsic value method" as prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" in
determining compensation expense when accounting for stock option awards. The
intrinsic value method computes stock option expense at the excess of the strike
price of the option over the market price of the underlying share of common
stock, on the grant date.

SFAS No. 123, "Accounting for Stock-Based Compensation" was issued in October
1995 and was effective for fiscal years beginning after December 15, 1995. This
accounting standard encourages the use of the "fair value based method" in
accounting for compensation expense associated with stock option awards and
similar plans but permitted the continued use of the intrinsic value method. The
Company adopted SFAS No. 123 effective April 1, 1996; however, the Company has
elected to continue to determine the value of stock-based compensation
arrangements under the provisions of APB 25. No pro forma disclosures have been
included in the accompanying notes to the financial statements as there was no
pro forma effect to the Company's operations or earnings per share.

Recently issued accounting pronouncements

The Company has adopted the following new accounting pronouncements for the year
ended March 31, 1999. SFAS No. 130, "Reporting Comprehensive Income," requires
the reporting and display of total comprehensive income and its components in a
full set of general-purpose financial statements. SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information," is based on the
"management" approach for reporting segments. The management approach designates
the internal organization that is used by management for making operating
decisions and assessing performance as the source of the Company's reportable
segments. SFAS No. 131 also requires disclosure about the Company's products,
the geographic areas in which it earns revenue and holds long-lived assets, and
its major customers. SFAS No. 132, "Employers' Disclosures about Pensions and
Other Post-retirement Benefits," which requires additional disclosures about
pension and other post-retirement benefit plans, but does not change the
measurement or recognition of those plans. SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," requires an entity to recognize
all derivatives on a balance sheet, measured at fair value. Statement of
Position ("SOP") 98-1, "Accounting for Costs of Computer Software Developed for
Internal Use," requires that entities capitalize certain internal-use software
costs once certain criteria are met. SOP 98-5, "Reporting on the Costs of
Start-Up Activities," provides among other things, guidance on the reporting of
start-up costs and organization costs. It requires costs of start-up activities
and organization costs to be expensed as incurred. There was no effect on the
financial statements presented from the adoption of the new pronouncements. The
Company will continue to review new accounting pronouncements over time to
determine if any additional disclosures are necessary based on evolving
circumstances.

F-12

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

Certain reclassifications have been made to the presentation of the prior years'
financial statements to correspond to the current year. Total equity and net
loss are unchanged due to these reclassifications.

Basis of presentation

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements, the Company is a development stage company with no revenue
as of March 31, 1999 and has incurred a loss of 2,485,312 (unaudited) for the
period from February 19, 1992 (inception) through March 31, 1999. This factor,
among others, may indicate that the Company will be unable to continue as a
going concern.

The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going concern is dependent upon its ability to generate sufficient cash
flow to meet its obligations on a timely basis and ultimately to attain
profitability. The Company plans on raising $10 million through an initial
public offering that will be registered with the Securities and Exchange
Commission on Form SB-2 to fund the building, cyclotron and proposed operations.
The costs of implementing the business plan in excess of the initial public
offering proceeds are expected to be financed with debt. The Company is largely
dependent upon the proceeds anticipated to be received from the proposed initial
public offering and debt financings to carry out its proposed operations. The
Company's ability to continue as a going concern is dependent upon successful
completion of the offering and financings and ultimately, upon obtaining
government approval for its licenses and achieving profitable operations. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Unaudited financial information

The statements of operations, shareholders' equity and cash flows for the period
from February 19, 1992 (inception) through March 31, 1997 and for the nine
months ended December 31, 1999 and 1998, have been prepared by the Company
without audit. In the opinion of management, the accompanying unaudited
financial information contains all adjustments (consisting only of normal
recurring adjustments) necessary for the fair presentation of the Company's
results of operations and its cash flows for the period from February 19, 1992
(inception) through March 31, 1997 and for the nine months ended December 31,
1999 and 1998.

Name change

On November 9, 1999, the Company changed its name from Nu-Tec., L.T.D. to
Molecular Diagnostics and Therapeutics, Inc.

F-13

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE A: BACKGROUND

The Company was incorporated under the laws of Colorado on February 19, 1992.
The principal activities since inception have included efforts towards the
preparation of four new drug applications, a radioactive materials license, a
cyclotron license, and the sale and issuance of shares of its preferred and
common stocks. Upon receipt of regulatory approval, the Company intends to
develop, manufacture and distribute radiochemical and radiopharmaceutical drug
products. Due to the nature of the products and the presence of radioactive
substances, the Company will be subject to regulation by a number of federal and
state agencies, including the Food and Drug Administration. Following is a
summary of the Company's new drug applications and licenses as well as its
current status:

Description Status
---------------------- ----------------------------------------
New Drug Applications:
----------------------
Iodine-123......................Application preparation in progress
Technetium-99m..................Initial Stage of application preparation
in progress
Flourine-18 (FDG)...............Application preparation in progress
Palladium-103...................Initial stage of application preparation
in progress

Licenses:
---------
Radioactive Materials Licens....Application preparation in progress
Cyclotron Operating License.....Application preparation in progress

NOTE B: RELATED PARTY TRANSACTIONS

During the years ended March 31, 1999 and 1998, and for the period from February
19, 1992 (inception) through March 31, 1999, the Company paid officers $157,157,
$67,600, and $559,533 (unaudited), respectively, for compensation that is
included in the accompanying financial statements as research and development
costs.

During the year ended March 31, 1999, the Company issued 103,500 shares of no
par value common stock to employees for compensation valued by the Board of
Directors at the fair value of the common stock, or $.75 per share (see Note E).
The Board of Directors considered contemporaneous equity transactions and other
analysis to determine the fair value of the common stock. These shares are
"restricted securities" and may be sold only in compliance with Rule 144 of the
Securities Act of 1933, as amended (the "Act").

During the year ended March 31, 1994, the Company issued 905,000 (unaudited)
shares of its no par value common stock to an officer valued by the Board of
Directors at the fair value of the common stock, or $.001 per share. The Board
of Directors considered contemporaneous equity transactions and other analysis
to determine the fair value of the common stock. These shares are "restricted
securities" and may be sold only in compliance with Rule 144 of the Act.

F-14

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE B: RELATED PARTY TRANSACTIONS, CONTINUED

During the period ended March 31, 1992, the Company issued 5,250,000 (unaudited)
shares of no par value common stock to an officer valued by the Board of
Directors at the fair value of the common stock, or $.0001 per share. The Board
of Directors considered contemporaneous equity transactions and other analysis
to determine the fair value of the common stock. These shares are "restricted
securities" and may be sold only in compliance with Rule 144 of the Act.

NOTE C: FURNITURE AND EQUIPMENT

Furniture and equipment consisted of the following:

March 31, December 31,
1999 1999
------------------ ------------------
(Unaudited)
Furniture........................... $.19,444 $ 19,444
Office and computer equipment....... 63,774 67,963
Computer software................... 10,034 10,034
------------------ ------------------
93,252 97,441
Less: accumulated depreciation...... (64,066) (77,031)
------------------ ------------------
$ 29,186 $ 20,410
================== ==================

NOTE D: INCOME TAXES

A reconciliation of the U.S. statutory federal income tax rate to the effective
rate is as follows:

March 31,
--------------------------- December 31,
1999 1998 1998
----------- ---------- ------------
(Unaudited)

U.S. federal statutory graduated rate....... 34.00% 33.61% 34.00%
State income tax rate,
net of federal benefit................... 3.14% 3.20% 3.14%
Offering costs.............................. 6.01% 6.47% 4.39%
Net operating loss for which no tax
benefit is currently available........... .-43.15% -43.28% -41.53%
------- ------- -------
0.00% 0.00% 0.00%
======= ======= =======

At March 31, 1999, deferred taxes consisted of a net tax asset of $777,269 due
to operating loss carryforwards of $1,976,535, which was fully allowed for in
the valuation allowance of $777,269. The valuation allowance offsets the net
deferred tax asset for which there is no assurance of recovery. The change in
the valuation allowance for the years ended March 31, 1999 and 1998 was $324,429
and $119,924, respectively. Net operating loss carryforwards will expire through
2019.

F-15

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE D: INCOME TAXES, CONTINUED

At December 31, 1999, deferred taxes consisted of a net tax asset totaling
$988,540 (unaudited) due to net operating loss carryforwards of $2,485,312
(unaudited). The valuation allowance offsets the net deferred tax asset for
which there is no assurance of recovery. The change in the valuation allowance
for the nine months ended December 31, 1999 was $211,271 (unaudited), which
increased the valuation allowance to $988,540 (unaudited).

The valuation allowance will be evaluated at the end of each year, considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced; reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer impaired and the allowance is
no longer required.

NOTE E: SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

The Company has established one class of common stock and has authorized
preferred shares to be designated by class as determined by the Board of
Directors.

The common shares each have voting rights, with no par value or preference
rights. The preferred shares have voting rights equal to the number of shares of
converted common stock and no par value.

On February 1, 1999, the Company commenced a private offering of 58,333 shares
of its Class I Convertible Preferred Stock at $6.00 per share pursuant to an
exemption under Rule 504 of Regulation D under the Securities Act of 1933, as
amended. Each preferred share is convertible by the Company on or before July
28, 1999, into eight common shares for no additional consideration and is
entitled to a preference of $6.00 per share upon liquidation of the Company.
Each issued and outstanding preferred share is entitled to eight votes based
upon the conversion ratio of eight common shares issuable upon the conversion of
each preferred share. As of March 31, 1999, there were 22,875 shares of
Convertible Preferred Stock outstanding that were convertible to 183,000 shares
of common stock. During the nine months ended December 31, 1999, the Company
sold 34,458 (unaudited) shares of convertible preferred stock in connection with
its Class "I" offering. The 34,458 (unaudited) shares were in addition to the
22,875 shares sold prior to March 31, 1999. On July 27, 1999, all 57,333
(unaudited) preferred shares were converted to 458,664 (unaudited) shares of
common stock.

During the year ended March 31, 1999, the Company incurred $121,831 in offering
costs related to its private placement offerings and proposed initial public
offering. $26,215 and $9,211 in offering costs were offset against the Company's
proceeds raised through its Class "H" and Class "I" offerings, respectively. The
remaining $86,405 was paid toward the Company's proposed public offering and is
included in the accompanying financial statements as deferred offering costs.
During the nine months ended December 31, 1999, the Company incurred an
additional $60,150 (unaudited) in offering costs related to its proposed initial
public offering.

The Company proposed to conduct a public offering to offer for sale 1,000,000
shares of its no par value common stock at $10.00 per share. The Company plans
to commence the offering during 2000.

F-16

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE E: SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, CONTINUED

During the year ended March 31, 1999, the Company issued 41,600 shares for
services rendered. 27,900 shares were issued for professional fees related to
the preparation of Company's business plan; 10,000 shares were issued for legal
fees in connection with the Company's offering; and 3,700 shares were issued to
consultants for other professional services. These shares were valued by the
Board of Directors at the fair value of common stock, or $.75 per share. The
Board of Directors considered contemporaneous equity transactions and other
analysis to determine the fair value of the common stock. Stock-based
compensation expense of $31,200 was recognized in the accompanying financial
statements for the year ended March 31, 1999.

During the year ended March 31, 1999, the Company issued 253,500 shares of its
no par value common stock as compensation to officers, employees and
consultants. These shares were valued by the Board of Directors at the fair
value of common stock, or $.75 per share. Stock-based compensation expense of
$190,125 was recognized in the accompanying financial statements for the year
ended March 31, 1999.

During the year ended March 31, 1997, the Company issued 13,133 shares to a
consultant for services rendered. These shares were valued by the Board of
Directors at the fair value of common stock, or $.50 per share.

During the year ended March 31, 1994, the Company issued 200,000 (unaudited)
shares to a consultant for services rendered. These shares were valued by the
Board of Directors at the fair value of common stock, or $.22 per share.

During the year ended March 31, 1992, the Company issued 120,000 (unaudited)
shares of no par value common stock to consultants for services rendered. These
shares were valued by the Board of Directors at the fair value of common stock,
or $.015 per share. These shares are "restricted securities" and may be sold
only in compliance with Rule 144 of the Act.

During the period ended March 31, 1992, the Company issued 400,000 (unaudited)
shares of its common stock to an investor for $6,000 (unaudited), or $.015 per
share. These shares are "restricted securities" and may be sold only in
compliance with Rule 144 of the Act.

On September 30, 1999, the Board of Directors approved a 3 for 2 reverse split
of the Company's no par value common stock. The shareholders ratified the
reverse stock split on November 1, 1999.

During the nine months ended December 31, 1999, the Company sold 399,400
(unaudited) shares of its no par value common stock to certain shareholders of
record for proceeds of $299,550 ($.75 per share) (unaudited).

F-17

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE E: SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION, CONTINUED

During the nine months ended December 31, 1999, the Company issued 57,467
(unaudited) shares of common stock for services rendered. 35,000 (unaudited) of
the shares were issued to directors in lieu of fees and the remaining 22,467
(unaudited) shares were issued to consultants for other professional services.
These shares were valued by the Board of Directors at the price of the shares of
common stock sold in a stock offering ongoing at the time of issuance, or $.75
per share (unaudited). As a result, stock-based compensation expense of $43,100
(unaudited) was recognized in the accompanying financial statements for the nine
months ended December 31, 1999.

During the nine months ended December 31, 1999, the Company issued 53,933
(unaudited) shares of its no par value common stock as compensation. These
shares were valued by the Board of Directors at the fair value of common stock,
or $.75 per share (unaudited). As a result, stock-based compensation expense of
$40,450 (unaudited) was recognized in the accompanying financial statements for
the nine months ended December 31, 1999.

NOTE F: STOCK OPTION AGREEMENTS

On December 29, 1995, the Board of Directors adopted a Stock Option Plan, which
reserved 5,000,000 shares of the Company's common stock. On January 23, 1996,
the Company granted non-compensatory stock options for 1,122,183 shares of its
common stock to its president and other individuals. The options, which are
vested and exercisable as of the grant date, allow the optionees to purchase
475,000; 275,000; 172,183; 100,000; and 100,000 shares of common stock at $.35
per share. The Company's common stock is not traded in the public market and the
exercise price of $.35 per share on the grant date approximated management's
estimate of the fair value of the Company's common stock. The options expire on
January 23, 2001. As of March 31, 1999, no options had been exercised.

On September 30, 1999, the Board of Directors approved the termination of all
outstanding stock options.

NOTE G: COMMITMENTS

Office leases

The Company entered into an operating lease for office space located in Boulder,
Colorado on January 27, 1997. The lease commenced February 1, 1997 and expires
January 31, 2002. On October 22, 1998, the Company entered into a second
operating lease for office space located in Longmont, Colorado.

On October 14, 1999, the Company signed a tenant to a sublease agreement for the
office space located in Boulder, Colorado. The sublease commences on November 1,
1999 and ends on January 31, 2002.

F-18

MOLECULAR DIAGNOSTICS AND THERAPEUTICS, INC.

(Formerly Nu-Tec., L.T.D.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE G: COMMITMENTS, CONTINUED

Future minimum lease payments under both office leases and receipts under the
sublease agreement for the years ended March 31 are as follows:

Minimum Sublease Net
Rental Rental Rental
Payments Income Payments
----------------- ------------------ -----------------
March 31, (Unaudited) (Unaudited) (Unaudited)
- ---------
2000............ $ 43,173 $ 7,561 $ 35,612
2001............ 44,021 18,797 25,224
2002............ 32,802 16,253 16,549
--------- ------- --------
$ 119,996 $42,611 $ 77,385
========= ======= ========

NOTE H: SUBSEQUENT EVENTS

During January and February 2000, the Company sold 172,796 (unaudited) shares of
its no par value common stock to certain shareholders of record for proceeds
totaling $194,399 ($1.125 per share) (unaudited).

On March 8, 2000, the Company entered into a contract to purchase land. The
Company agreed to issue 102,000 (unaudited) shares of its no par value common
stock as earnest money towards the total purchase price of $1,198,730
(unaudited). The balance of the purchase price is due on the closing date, which
is scheduled for July 17, 2000. The Company's obligation to purchase the land is
subject to receiving approval from Weld County, Colorado for the Company's site
plan and building plans on or before June 22, 2000.

F-19

PART II

Information Not Required in Prospectus

Item 24. Indemnification of Directors and Officers.

The Registrant's Amended and Restated Articles of Incorporation provide
that the Board of Directors of the Registrant may indemnify any person who was
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Registrant), by
reason of the fact that he is or was a director, officer, employee or agent of
the Registrant or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney fees),
judgements, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in the best interests
of the Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to be believe his conduct was unlawful. The Board of Directors
may also indemnify any such person made a party to such actions and suits, by or
in the right of the Registrant to procure a judgement in its favor, against
expenses (including attorney fees) actually in connection with the defense or
settlement of such action or suit if he so acted, but no indemnification shall
be made in respect of any claim, issue, or matter as to which such person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the registrant unless and only to the extent that the court
determines, in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to such indemnification.

The Registrant's Bylaws provide that the Registrant shall indemnify any
and all of its directors or officers, or former directors or officers, or any
person who may have served at the Registrant's request as a director or officer
of another corporation in which the Registrant owns capital stock or of which it
is a creditor, against expenses actually and necessarily incurred by them in
connection with the defense of any action, suit or proceeding in which they, or
any of them, are made parties, or a party, by reason of being or having been
directors or officers or a director or officer of the Registrant, or of such
other corporation, except in relation to matters as to which any such director
or officer or former director or person shall be adjudged in such action, suit
or proceeding to be liable for negligence or misconduct in the performance of
duty.

The Colorado Business Corporation Act provides that a corporation may
indemnify a person made a party to a proceeding because the person is or was a
director against liability incurred in the proceeding if (a) the person
conducted himself or herself in good faith, (b) the person reasonably believed
(1) in the case of conduct in an official capacity with the corporation, that
his or her conduct was in the corporation's best interests; and (2) in all other
cases, that his or her conduct was at least not opposed to the corporation's
best interests and (c) in the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful. Such
indemnification is permitted in connection with a proceeding by or in the right
of the corporation only to the extent of reasonable expenses incurred in
connection with the proceeding. A corporation may not indemnify a director (a)
in connection with a proceeding by or in the right of the corporation in which
the director was adjudged liable to the corporation; or (b) in connection with
any other proceeding charging that the director derived an improper personal
benefit, whether or not involving action in an official capacity, in which
proceeding the director was adjudged liable on the basis that he or she derived
an improper personal benefit.

The Colorado Business Corporation Act further provides that a
corporation, unless limited by its articles of incorporation, shall indemnify a
person who was wholly successful, on the merits or otherwise, in the defense of
any proceeding to which the person was a party because the person is or was a
director, against reasonable expenses incurred by him or her in connection with
the proceeding.

The Registrant has applied for directors' and officers' liability
insurance with an aggregate policy limit of $1,000,000.

Item 25. Other Expenses of Issuance and Distribution.

The estimated expenses of this Offering, all of which will be paid by
Registrant, are as follows:

SEC Registration Fee $ 2,965
National Association of Securities Dealers, Inc. Fee 1,500
Nasdaq Listing Fee 6,000
Accounting Fees and Expenses _______
Registrant's Legal Fees and Expenses _______
Blue Sky Expenses and Counsel Fees _______
Printing and Engraving Fees 3,500
Transfer Agent and Registrar's Fees and Expenses 1,000
Miscellaneous Expenses _______
-------
Total $______

Item 26. Recent Sales of Unregistered Securities.

From January 1996 through June 1996, the Registrant sold an aggregate
of 40,500 shares of its Class D Preferred Stock in a private placement to 27
investors for an aggregate consideration of $202,500 ($5.00 per share). The
offering was conducted in accordance with Rule 504 of Regulation D by means of a
confidential offering memorandum. Each share of Preferred stock was converted,
pursuant to its terms, into twelve shares of the Registrant's common stock in
June, 1996 at the option of the Registrant for no additional consideration.

From July 1996 through January 1997, the Registrant sold an aggregate
of 12,835 shares of its Class E Preferred Stock in a private placement to 15
investors for an aggregate consideration of $77,010 ($6.00 per share). The
offering was conducted in accordance with Rule 504 of Regulation D by means of a
confidential offering memorandum. Each share of Preferred stock was converted,
pursuant to its terms, into twelve shares of the Registrant's common stock in
January, 1997 at the option of the Registrant for no additional consideration.

From February 1997, through August, 1997 the Registrant sold an
aggregate of 20,500 shares of its Class F Preferred Stock in a private placement
to 11 investors for an aggregate consideration of $123,000 ($6.00 per share).
The offering was conducted in accordance with Rule 504 of Regulation D by means
of a confidential offering memorandum. Each share of Preferred stock was
converted, pursuant to its terms, into twelve shares of the Registrant's common
stock in August, 1997 at the option of the Registrant for no additional
consideration.

From August, 1997 through March, 1998 the Registrant sold an aggregate
of 68,351 shares of its Class G Preferred Stock in a private placement to 40
investors for an aggregate consideration of $410,106 ($6.00 per share). The
offering was conducted in accordance with Rule 504 of Regulation D by means of a
confidential offering memorandum. Each share of Preferred stock was converted,
pursuant to its terms, into twelve shares of the Registrant's common stock in
March, 1998 at the option of the Registrant for no additional consideration.

In January, 1998 the Registrant issued 13,133 shares of its common
stock to an individual as a consulting fee for the review of the offering
documents. The shares were valued at the time of issuance at $.50 per share.
Such individual was provided with access to all material information regarding
an investment in the Registrant and was given the opportunity to ask questions
of and receive answers from the executive officers of the Registrant.
Accordingly, this issuance was exempt from registration under the Securities Act
pursuant to Section 4(2) thereunder.

From June 1998, through December 1998, the Registrant sold an aggregate
of 60,499 shares of its Class H Preferred Stock in a private placement to 39
investors for an aggregate consideration of $362,994 ($6.00 per share). The
offering was conducted in accordance with Rule 504 of Regulation D by means of a
confidential offering memorandum. Each share of Preferred stock was converted,
pursuant to its terms, into eight shares of the Registrant's common stock in
December, 1998 at the option of the Registrant for no additional consideration.

In August, 1998 the Registrant issued 600 shares of its common stock to
a shareholder as a consulting fee for the review of marketing documents. The
shares were valued at the time of issuance at $.75 per share. Such individual
was provided with access to all material information regarding an investment in
the Registrant and was given the opportunity to ask questions of and receive
answers from the executive officers of the Registrant. Accordingly, this
issuance was exempt from registration under the Securities Act pursuant to
Section 4(2) thereunder.

In January, 1999 the Registrant issued 10,000 shares of its common
stock to an individual as compensation for the review and preparation of
offering documents. The shares were valued at the time of issuance at $.75 per
share. Such individual was provided with access to all material information
regarding an investment in the Registrant and was given the opportunity to ask
questions of and receive answers from the executive officers of the Registrant.
Accordingly, this issuance was exempt from registration under the Securities Act
pursuant to Section 4(2) thereunder.

From February 1999 through July, 1999 the Registrant sold an aggregate
of 57,333 shares of its Class I Preferred Stock in a private placement to 29
investors for an aggregate consideration of $343,998 ($6.00 per share). The
offering was conducted in accordance with Rule 504 of Regulation D by means of a
confidential offering memorandum. Each share of Preferred stock was converted,
pursuant to its terms, into eight shares of the Registrant's common stock in
July, 1999 at the option of the Registrant for no additional consideration.

In February, 1999 the Registrant issued 91,600 shares of its common
stock to an entity for services provided to the Registrant. The shares were
valued at the time of issuance at $.75 per share. A representative of such
entity was provided with access to all material information regarding an
investment in the Registrant and was given the opportunity to ask questions of
and receive answers from the executive officers of the Registrant. Accordingly,
this issuance was exempt from registration under the Securities Act pursuant to
Section 4(2) thereunder.

In March, 1999 the Registrant issued 1,000 shares of its common stock
to an individual as a consulting fee for the review of financial documents. The
shares were valued at the time of issuance at $.75 per share. Such individual
was provided with access to all material information regarding an investment in
the Registrant and was given the opportunity to ask questions of and receive
answers from the executive officers of the Registrant. Accordingly, this
issuance was exempt from registration under the Securities Act pursuant to
Section 4(2) thereunder.

In March, 1999 the Registrant issued 3,500 shares of its common stock
to an employee of the Registrant as a bonus. The shares were valued at the time
of issuance at $.75 per share. Such employee was provided with access to all
material information regarding an investment in the Registrant and was given the
opportunity to ask questions of and receive answers from the executive officers
of the Registrant. Accordingly, this issuance was exempt from registration under
the Securities Act pursuant to Section 4(2) thereunder.

In March, 1999 the Registrant issued 100,000 shares of its common stock
to a director of the Registrant for his services to the Registrant as director.
The shares were valued at the time of issuance at $.75 per share. The director
had access to all material information regarding an investment in the
Registrant. Accordingly, this issuance was exempt from registration under the
Securities Act pursuant to Section 4(2) thereunder.

In March, 1999 the Registrant issued 86,300 shares of its common stock
to an officer of the Registrant for accrued services to the Registrant as an
officer. The shares were valued at the time of issuance at $.75 per share. The
officer had access to all material information regarding an investment in the
Registrant. Accordingly, this issuance was exempt from registration under the
Securities Act pursuant to Section 4(2) thereunder.

In March, 1999 the Registrant issued 1,600 shares of its common stock
to an individual as a consulting fee for reviewing documents in connection with
the G preferred offering. The shares were valued at the time of issuance at $.75
per share. Such individual was provided with access to all material information
regarding an investment in the Registrant and was given the opportunity to ask
questions of and receive answers from the executive officers of the Registrant.
Accordingly, this issuance was exempt from registration under the Securities Act
pursuant to Section 4(2) thereunder.

In April, 1999 the Registrant issued an aggregate of 35,000 shares of
its common stock to seven individuals (5,000 shares each) for their agreement to
serve on the Registrant's Scientific Advisory Board. The shares were valued at
the time of issuance at $.75 per share. Each of the individuals was provided
with access to all material information regarding an investment in the
Registrant and was given the opportunity to ask questions of and receive answers
from the executive officers of the Registrant. Accordingly, these issuances were
exempt from registration under the Securities Act pursuant to Section 4(2)
thereunder.

In May, 1999 the Registrant issued 6,667 shares of its common stock to
an individual for services provided to the Registrant. The shares were valued at
the time of issuance at $.75 per share. Such individual was provided with access
to all material information regarding an investment in the Registrant and was
given the opportunity to ask questions of and receive answers from the executive
officers of the Registrant. Accordingly, this issuance was exempt from
registration under the Securities Act pursuant to Section 4(2) thereunder.

In July, 1999 the Registrant issued 800 shares of its common stock to
an individual as a consulting fee for reviewing documents in connection with H
preferred offering. The shares were valued at the time of issuance at $.75 per
share. Such individual was provided with access to all material information
regarding an investment in the Registrant and was given the opportunity to ask
questions of and receive answers from the executive officers of the Registrant.
Accordingly, this issuance was exempt from registration under the Securities Act
pursuant to Section 4(2) thereunder.

In July, 1999 the Registrant issued 10,000 shares of its common stock
to the Registrant's corporate secretary for her services as secretary. The
shares were valued at the time of issuance at $.75 per share. She had access to
all material information regarding an investment in the Registrant. Accordingly,
this issuance was exempt from registration under the Securities Act pursuant to
Section 4(2) thereunder.

In July, 1999 the Registrant issued 33,933 shares of its common stock
to an officer of the Registrant as employment compensation. The shares were
valued at the time of issuance at $.75 per share. The individual had access to
all material information regarding an investment in the Registrant. Accordingly,
the issuance was exempt from registration under the Securities Act pursuant to
Section 4(2) thereunder.

In July, 1999 the Registrant issued 5,000 shares of its common stock to
an individual as a consulting fee for investor relations services. The shares
were valued at the time of issuance at $.75 per share. The individual was
provided with access to all material information regarding an investment in the
Registrant and was given the opportunity to ask questions of and receive answers
from the executive officers of the Registrant. Accordingly, the issuance was
exempt from registration under the Securities Act pursuant to Section 4(2)
thereunder.

In August, 1999 the Registrant sold an aggregate of 379,100 shares of
its common stock in a private placement to 14 investors for an aggregate
consideration of $284,325 ($.75 per share). Each of the purchasers was an
existing shareholder of the Registrant and an accredited investor, as defined in
Regulation D ("Regulation D") promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), who was provided with access to all material
information regarding an investment in the Registrant and who was given the
opportunity to ask questions of and receive answers from the executive officers
of the Registrant. Accordingly, these issuances were exempt from registration
under the Securities Act pursuant to Section 4(2) thereunder.

In September, 1999 the Registrant issued 20,000 shares of its common
stock to an officer of the Registrant as employment compensation. The shares
were valued at the time of issuance at $.75 per share. Such officer had access
to all material information regarding an investment in the Registrant.
Accordingly, this issuance was exempt from registration under the Securities Act
pursuant to Section 4(2) thereunder.

On November 1, 1999 the Registrant's shareholders approved a three for
two reverse stock split. Prior to the split, the Registrant had 12,981,773
common shares outstanding and, following the split, there were 8,654,515 common
shares outstanding.

During January and February, 2000 the Registrant sold an aggregate of
172,796 shares of its common stock in a private placement to seven investors for
an aggregate consideration of $194,399 ($1.125 per share). Each of the
purchasers was an existing shareholder of the Registrant and an accredited
investor, as defined in Regulation D ("Regulation D") promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), who was provided with
access to all material information regarding an investment in the Registrant and
who was given the opportunity to ask questions of and receive answers from the
executive officers of the Registrant. Accordingly, these issuances were exempt
from registration under the Securities Act pursuant to Section 4(2) thereunder.

On March 8, 2000, the Registrant entered into a contract to purchase
land and, as part thereof, agreed to issue 102,000 shares of its common stock as
earnest money towards the total purchase price of $1,189,515 (unaudited). The
stock is being held by the seller's real estate agent pending the closing of the
sale. The purchaser is an accredited investor, as defined in Regulation D
("Regulation D") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") and was provided with access to all material information
regarding an investment in the Registrant and was given the opportunity to ask
questions of and receive answers from the executive officers of the Registrant.
Accordingly, these issuances were exempt from registration under the Securities
Act pursuant to Section 4(2) thereunder

During March, 2000 the Registrant sold an aggregate of 76,330 shares of
its common stock in a private placement to nine investors for an aggregate
consideration of $85,874 ($1.125 per share). Each of the purchasers was an
existing shareholder of the Registrant and an accredited investor, as defined in
Regulation D ("Regulation D") promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), who was provided with access to all material
information regarding an investment in the Registrant and who was given the
opportunity to ask questions of and receive answers from the executive officers
of the Registrant. Accordingly, these issuances were exempt from registration
under the Securities Act pursuant to Section 4(2) thereunder.

All stock certificates issued in connection with the foregoing
transactions were legended to reflect their restricted status.

Item 27. Exhibits

(a) Exhibits:

1. Underwriting and Selling Agreement, dated August 4, 1999 between the
Registrant and Three Arrows Capital Corp., including Letter Agreement,
dated August 3, 1999, between the Registrant and Three Arrows Capital
Corp.
1.1 Escrow Agreement, dated March __, 2000, by and among the Registrant,
the Underwriter and Norwest Bank Colorado, N.A. (to be filed by
amendment)
3.1 Copy of Registrant's Amended and Restated Articles of Incorporation.
3.1.1 Copy of Registrant's Articles of Amendment to the Articles of
Incorporation, as filed with the Colorado Secretary of State
on October 30, 1992.
3.1.2 Copy of Registrant's Articles of Amendment to the Articles of
Incorporation, as filed with the Colorado Secretary of State
on November 9, 1999.
3.2 Copy of Registrant's Bylaws.
4.1 Specimen Common Stock Certificate.
4.2 Form of Representative's Warrant Agreement between Registrant and
Three Arrows Capital Corporation. (to be filed by amendment)
5.1 Opinion by Reinhart, Boerner, Van Deuren, Norris & Rieselbach, P.C.,
as to legality of the shares of Common Stock offered by the Company.
(to be filed by amendment)
10.1 Copy of Second Amendment to Employment Agreement, effective as of
January 1, 1999 between Registrant and Malcolm H. Benedict.
10.2 Copy of Employment Agreement, effective as of April 1, 1998 between
Registrant and Donald A. Ludwig, Ph.D.
10.3 Letter of Proposal, dated September 30, 1999, from DVI Financial
Services, Inc. to the Registrant.
10.4 Pre-Contract Agreement, dated March 11, 1998 between the Registrant
and Ebco Technologies
10.5 Contract to Buy and Sell Real Estate, dated March 8, 2000, between the
Registrant and Horizon Investments, LLC
10.6 Agreement to Amend/Extend Contract, dated March 15,2000, between the
Registrant and Horizon Investments, LLC
23.1 Consent of Cordovano and Harvey, P.C
23.2 Consent of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, P.C.,
(included in Exhibit 5.1).
27.1 Financial Data Schedule as of December 31, 1999.

Item 28. Undertakings.

The undersigned Registrant hereby undertakes:

(1) To file during any period in which offers or sales are
being made pursuant to Rule 415 under the Securities Act a
post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events
which, individually or in the aggregate, represent a
fundamental change in the information in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in the total dollar value of securities offered, if
the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities
and Exchange Commission (the "Commission") pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;

(iii) To include any additional or changed material
information on the plan of distribution.

(2) For determining liability under the Securities Act, to
treat each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time
to be the initial bona fide offering.

(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.

Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act") may be permitted to directors,
officers and controlling persons of Registrant pursuant to the provisions of its
Amended and Restated Articles of Incorporation, as amended, its Bylaws, the
Colorado Business Corporation Act or otherwise, 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 Registrant for expenses incurred or paid by a director,
officer or controlling person of 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, 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 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.

The undersigned Registrant hereby undertakes:

(1) For purposes of determining any liability under the
Securities Act, to treat the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by
Registrant under Rule 424(b)(1), or (4), or 497(h) under the Securities
Act as part of this registration statement as of the time the
Commission declared it effective.

(2) For determining any liability under the Securities Act, to
treat each post-effective amendment that contains a form of prospectus
as a new registration statement for the securities offered in the
registration statement, and that offering of the securities at that
time as the initial bona fide offering of those securities.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933,
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement or amendment thereto to be signed on its behalf by the undersigned, in
the City of Longmont, State of Colorado, on the 27th day of March, 2000.

MOLECULAR DIAGNOSTICS & THERAPEUTICS, INC.

By: /s/ Malcolm H. Benedict
---------------------------------
Malcolm H. Benedict, Chairman of the Board,
Chief Executive Officer, President and
Treasurer

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities and on the dates stated.

Signature Title Date
--------- ------- ----

/s/Malcolm H. Benedict Chairman of the Board, March 27, 2000
- ----------------------- Chief Executive Officer,
Malcolm H. Benedict President, Treasurer and Director

/s/Donald A. Ludwig Executive Vice President March 27, 2000
- ----------------------- and Director
Donald A. Ludwig

/s/Janet L. Davis Secretary and Director March 27, 2000
- -----------------------
Janet L. Davis