WASATCH PHARMACEUTICAL INC, SB-2, 2001-01-08

WASATCH PHARMACEUTICAL INC
SB-2, 2001-01-08
PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS

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As filed with the Securities and Exchange Commission on January 8, 2001
REGISTRATION NO. _______________

================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
------------

WASATCH PHARMACEUTICAL, INC.
----------------------------
(Exact name of registrant as specified in its charter)

UTAH 2834 84-0854009
------------------------------- ------------------- --------------------
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industry Identification No.)
Classification Code
Number)
Dave Giles
310 East 4500 South 450 310 East 4500 South 450
Murray, Utah 84107 Murray, Utah 84107
(801) 266-2987 (801) 266-2987
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(Address and telephone number of (Name, address and telephone
Registrant's Principal Executive Offices) number of agent for service)

Copies of all communications to:

Marcus A. Sanders, Esq.
Law Offices of
782 20th Street
Oakland CA 94612
(510) 834-1023

Approximate date of proposed sale to the public: From time to time as soon as
practicable after the Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]

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

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

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

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

<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE

Proposed maxi- Proposed maxi-
Title of each class of Amount to be mum offering mum aggregate Amount of regis-
securities to be registered registered price per share offering price tration fee
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (1) 1,500,000 0.34 (2) 510,000 $ 127.00

Warrants to purchase 9,067,720 0.50 (4) 4,533,860 (5) $1,135.00
1 share of common stock
at $0.50 (3)

Warrants to purchase 9,067,720 2.00 (4) 18,135,440 (5) $4,534.00
1 share of common stock
at $2.00 (3)

Common Stock
purchasable pursuant
to the warrant 18,135,440 (6)
=======================================================================================================
Total $5,796.00
=======================================================================================================
</TABLE>

(1) These shares are being offered by certain stockholders of the Company.
(2) ESTIMATED PURSUANT TO RULE 457(c) SOLELY FOR PURPOSE OF CALCULATING THE
AMOUNT OF THE REGISTRATION FEE, BASED UPON THE AVERAGE OF THE BID AND
ASK PRICES REPORTED ON JANUARY 5, 2000, AS REPORTED ON THE OTC BULLETIN
BOARD.
(3) These warrants are being issued to certain stockholders of the Company,
and include an indeterminate number of additional warrants that may be
issued as a result of any future stock split, stock dividend, or
changes in the conversion price, and similar adjustments.
(4) The exercise price upon which the shares of Common Stock are to be
issued.
(5) the registration fee is calculated in accordance with Rule 457(g)under
the Securities Act of 1933.
(6) These shares are issuable upon the exercise of the warrants, included
in this registration, issued to all of the stockholders of the Company,
and may be resold to the public by the Selling stockholders.

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
the further amendment which specifically states that this registration statement
shall therefore become effective in accordance with Section 8 (a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8 (a),
may determine.

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<PAGE>

PROSPECTUS

SUBJECT TO COMPLETION DATED JANUARY 8, 2001

19,635,440 Shares of Common Stock
18,135,440 Warrants

WASATCH PHARMACEUTICAL, INC.

This prospectus relates in part to 1,500,000 shares of common stock of
Wasatch Pharmaceutical, Inc. (hereinafter, the "Company") that may be sold from
time to time by the selling stockholders, Aspen Capital Resources, LLC
(hereinafter, "Aspen"). These shares were issued to the selling stockholder in
connection with its settlement of litigation with the Company. The Company will
not receive any proceeds from the sale of the 1,500,000 shares of common stock
listed above. The Company will pay the expenses of registering all of these
shares for sale by the selling shareholder, herein named.

This prospectus also relates to the Company's registration of
18,135,440 Warrants (hereinafter, the "Warrants"), comprised of 9,067,720 Class
A Warrants and 9,067,720 Class B Warrants. The Warrants offered hereby are
exercisable commencing nine months after the effective date of this Prospectus
("Effective Date"). The Company anticipates that the Warrants will be traded on
the OTC Bulletin Board and in the over-the-counter market "pink sheet," however,
there is no assurances that an active trading market will develop. The 9,067,720
Class A Warrants entitles the holders to purchase one (1) share of common stock
at a purchase price of $0.50 per share during the five (5) year period
commencing nine months from the Effective Date. The 9,067,720 Class B Warrants
entitles the holders to purchase one (1) share of common stock at a purchase
price of $2.00 per share during the three (3) year period commencing nine months
from the Effective Date.

The Class A Warrants are redeemable by the Company for $.01 per
Warrant, at any time after April 1, 2001, upon thirty (30) days' prior written
notice, if the average closing price or bid price of the common stock, as
reported by the principal exchange on which the common stock is quoted, the
National Quotation Bureau, Incorporated or the Nasdaq SmallCap Market
("Nasdaq"), as the case may be, equals or exceeds $1.00 per share, for any
twenty (20) consecutive trading days within a period of thirty (30) days ending
within ten (10) days of the notice of redemption. The Class A Warrants may be
exercised any time prior to the expiration of the 30-day redemption notice
period. Upon thirty (30) days' prior written notice to all holders of the Class
A Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Class A Warrants in compliance with the requirements of
Rule 13e-4 to the extent applicable. See "Description of Securities."

The Class B Warrants are redeemable by the Company for $.01 per
Warrant, at any time after April 1, 2001, upon thirty (30) days' prior written
notice, if the average closing price or bid price of the common stock, as
reported by the principal exchange on which the common stock is quoted, the
National Quotation Bureau, Incorporated or the Nasdaq SmallCap Market
("Nasdaq"), as the case may be, equals or exceeds $3.00 per share, for any
twenty (20) consecutive trading days within a period of thirty (30) days ending
within ten (10) days of the notice of redemption. The Class B Warrants may be
exercised any time prior to the expiration of the 30-day redemption notice
period. Upon thirty (30) days' prior written notice to all holders of the Class
B Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Class B Warrants in compliance with the requirements of
Rule 13e-4 to the extent applicable. See "Description of Securities."

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<PAGE>

This prospectus also relates to the Company's registration of
18,135,440 shares of common stock issuable upon the exercise of the Warrants.
Also includes an indeterminate number of additional shares pursuant to Rule 416
to prevent dilution resulting from stock splits, stock dividends or similar
transactions. The selling stockholders may sell the common stock, issued by the
Company herein, from time to time. The Company will not receive any proceeds
from the sale of the 18,135,000 shares of common stock. The Company will receive
proceeds of $22,669,300 from the exercise of the Warrants to purchase a total of
18,135,440 shares of common stock, if all of the Warrants are exercised. The
Company will pay the expenses of registering all of these shares for sale by the
shareholders.

The Selling Shareholders named in this prospectus may offer and sell
these shares at any time using a variety of different methods. The actual number
of shares sold and the prices at which they are sold will depend upon the market
price at the time of those sales; therefore, the Company has not included in
this prospectus information about the price to the public of the shares or the
proceeds to the selling shareholders.

The Company's Common Stock is traded on the OTC Bulletin Board, under
the symbol "WSPH." On January 5, 2001, the last reported price for the Company's
common stock on the OTC Bulletin Board was $0.33 per share.

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

THE SHARES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. PURCHASERS OF
SHARES SHOULD CAREFULLY CONSIDER THE MATTERS DESCRIBED UNDER "RISK FACTORS"
BEGINNING AT PAGE 11, AND "DILUTION".

-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR BY ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is January 8, 2001

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<PAGE>

Please read this prospectus carefully. You should rely only on the information
contained in this prospectus. The Company has not authorized anyone to provide
you with different information. You should not assume that the information
provided by the prospectus is accurate as of any date other than the date on the
front of this prospectus.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS ....................................................5
PROSPECTUS SUMMARY ............................................................6
SELECTED FINANCIAL DATA.......................................................13
RISK FACTORS .................................................................15
USE OF PROCEEDS ..............................................................27
DETERMINATION OF OFFERING PRICE...............................................27
DIVIDEND POLICY ..............................................................28
DILUTION......................................................................28
PLAN OF DISTRIBUTION .........................................................29
DESCRIPTION OF SECURITIES ....................................................31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ................................32
DESCRIPTION OF PROPERTY ......................................................38
DESCRIPTION OF THE BUSINESS IN THE LAST FIVE YEARS............................38
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS .................41
EXECUTIVE COMPENSATION .......................................................42
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ...............44
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ...............................45
LEGAL PROCEEDINGS ............................................................46
COUNSEL ......................................................................47
EXPERTS ......................................................................47
INTEREST OF NAMED EXPERTS & COUNSEL...........................................47
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS ..........................................................48
SELLING STOCKHOLDERS .........................................................48
WHERE YOU CAN FIND ADDITIONAL INFORMATION ....................................49
DISCLOSURE OF COMMISSION POSITION INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES ...............................................50
INCORPORATED BY REFERENCE ....................................................50
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ...................................52
REPORT OF INDEPENDENT AUDITORS ...............................................
FINANCIAL STATEMENTS .........................................................

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, as that term is defined
in the Private Securities Litigation Reform Act of 1995. These statements relate
to future events or the Company future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors," that may cause the Company's or its industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

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<PAGE>

All subsequent written and oral forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their entirety
by the cautionary statements contained throughout this prospectus and the
documents incorporated in this prospectus by reference. Because of these risks,
uncertainties and assumptions, you should not place undue reliance on these
forward-looking statements.

No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in or incorporated by
reference in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by us, the
selling shareholders or any other person. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such an
offer in such jurisdiction. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date hereof or
that there has been no change in our affairs since such date.

As used in this prospectus, the terms "we," "us," "our," and "Wasatch
Pharmaceutical, or the "Company" mean Wasatch Pharmaceutical Corporation and its
subsidiaries, unless otherwise indicated.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements and notes thereto appearing
elsewhere in this prospectus. This summary is not complete and does not contain
all of the information you should consider before investing in the common stock.
You should read the entire prospectus carefully, including the "Risk Factors"
section.

BUSINESS HISTORY

The Company's predecessor was originally incorporated under the laws of
the State of Utah as Ceron Oil Company on March 25, 1980. On February 6, 1981,
Ceron Oil merged with Folio One Productions, Ltd. ("Folio"), an inactive,
publicly held, Delaware Corporation. At the time of the merger, the Company
changed its name to Ceron Resources Corporation.

From Ceron's inception, until its acquisition of Medisys on December
29, 1995, the company's operations were attributable to the oil and gas
industry. In December 1985, the Ceron plugged and abandoned its two oil and gas
wells because of depleted reserves and the overall economic conditions of the
industry. In the period from 1985 to 1995, Ceron's business activities,
including the acquisition, development and promotion of oil and gas properties,
were conducted on a limited basis. The Company focused primarily on maintaining
its assets. The Company derived its primary assets from subleases of its office
spaces and de minimis film royalties.

On December 29, 1995, Ceron acquired all of the issued and outstanding
shares of Medisys, a Utah corporation, issuing shares of its Common Stock. On
January 16, 1996, Ceron reorganized with Wasatch Pharmaceutical, Inc., a Utah
corporation. The purpose of the reorganization was to change the corporate
domicile from Delaware to Utah, change the name to Wasatch Pharmaceutical, Inc.,
and change the par value of its Common Stock to $0.001.

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The Company is organized under the laws of the State of Utah and
commenced its current skin care developmental phase in 1994. Since 1994, the
Company skin care operations consisted of two wholly owned subsidiaries: Medisys
Research Group, Inc. ("Medisys") and American Institute of Skin Care, Inc.
("AISC"). The Company's revenues derive from the operation of AISC clinics in
Midvale and Provo, Utah.

Medisys is a research and development company in the field of
dermatology. Medisys began its research in 1989, as continuation of the research
started, by Gary V. Heesch (currently CEO of the Company), in the early 1980's,
at a predecessor company, Dermacare Pharmaceutical, Inc. ("Dermacare"). Most of
Medisys' research was devoted to developing the "Skin Fresh Methodology"
(Hereinafter, ""Skin Fresh") for the treatment of acne, eczema, psoriasis,
contact dermatitis, seborrhea, and other less serious skin disorders. The "Skin
Fresh" treatment program avoids the use of prescription drugs taken internally,
and includes a regimen and the topical application of FDA approved antibiotics.
In 1989, Dermacare discontinued its operations and assigned its the rights to
"Skin Fresh" to Medisys in exchange for a 5% royalty paid to Dermacare's former
shareholders.

Through clinical studies and test marketing in doctors' offices,
Medisys' management observed that for the most successful results occurred in
uniform and consistent clinical surrounding, as opposed to sales of prescription
drug kits at pharmacies. Medisys' management also discovered that for a patient
to achieve total or near total clearing of the acne or eczema condition, the
treatments should be continuously supervised. For this reason, the Company
incorporated a wholly owned subsidiary, the American Institute of Skin Care,
Inc. ("AISC") to operate clinics and to provide the best treatment option for
its patients.

DERMATOLOGY OPERATIONS

Medysis Research Group, Inc.

Medisys was incorporated in September 1989. Medisys is a research and
development company in the field of dermatology. Gary V. Heesch (the founder and
current CEO of the Company) initiated the research while at Dermacare
Pharmaceutical, Inc. (Hereinafter, "Dermacare"). Dermacare began its research,
in the early 1980's. In 1989, Dermacare discontinued its operations, and
assigned all of its rights to the technology developed by its research to
Medisys, in exchange for a royalty equal to five percent (5%) of future product
sales. These royalties are paid to Dermacare's former shareholders.

The Company devoted a substantial portion of its research to developing
the "Skin Fresh" methodology for the treatment of acne, eczema, psoriasis,
contact dermatitis, seborrhea, and other less serious skin disorders. The
treatment allows the patient to avoid using prescription drugs that are taken
internally. The "Skin Fresh" treatment includes a cleaning regimen, and the
topical application of FDA approved antibiotics. The Company commenced clinical
studies in 1983 and has continuing favorable results until the present, using
the "Skin Fresh" treatment.

Medisys developed an additional family of products, including
cleansers, astringents, and lotions that are sold, as part of the "Skin Fresh"
treatment regimen. The products are manufactured in an FDA approved, independent
laboratory in California. In addition, Medisys may offer skin care products such
as soaps and cosmetics.

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technology and products through the AISC clinics, and other channels. Although
the Company may choose to market its technology through licensing agreements,
Medisys is not currently pursuing licensing arrangements.

American Institute of Skin Care

AISC operates the clinics and sell products related to this technology.
AISC has used the technology in the prototype clinics for the past five years.

AISC and Medisys' Management believes that the "Skin Fresh" technology is
effective in its present form, and does not need significant additional
development.

AISC opened three prototype clinics to treat patients, to train a staff
of medical and support personnel, and to develop administrative procedures. In
February 1994, the Company opened its first clinic in Salt Lake City, Utah. In
November 1994, the Company opened its second clinic in Provo, Utah. A third
clinic was opened in Idaho but closed in the same year it opened, 1994. While
operating the prototype clinics, each clinic used various advertising mediums to
test the effectiveness of the different advertising mediums. A national
advertising company supervised these tests and used the results to develop a
comprehensive advertising and public relations plan for the Company.

AISC currently operates the two Utah clinics. As capital becomes
available for the expansion, AISC plans to open and operate up to 300 clinics
using the "Skin Fresh " methodology. AISC is also developing the means to market
its products and treat patients over the "Internet" in a "virtual clinic"
environ. The Company intends to establish its clinics in urban centers, under
the supervision of a licensed physician.

AISC treats acne, eczema, psoriasis, contact dermatitis, seborrhea, and
other less serious skin disorders using topical lotions and externally applied
antibiotics. As opposed to most traditional treatments, the "Skin Fresh"
treatment does not rely on expensive, harsh prescription drugs taken internally.

In the clinics, medical assistants do most of the treatment follow-up.
Physicians are used for the initial exam and when medically necessary. A
patient's medical costs for the AISC "Skin Fresh" treatment are significantly
lower than the costs for traditional M.D. dermatological treatments programs.
Most patients' skin problems are effectively cleared in two to three months of
treatment. The combination of our success rate, experience in the clinics, and
the cost savings over traditional treatment programs should give the "Skin
Fresh" treatment and products an advantage in the medical marketplace.

Patients suffering from acne, eczema, psoriasis, contact dermatitis,
seborrhea, and the other skin disorders "Skin Fresh" effectively treats, account
for over 70% of the patients that seek medical treatment from dermatologists in
the United States. Additionally, Management believes that a potentially larger
market exists, with the Company's recent development of a skin rejuvenation

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treatment. The skin rejuvenation treatment can, also, be administered through
the skin care clinics and Internet service centers.

A key element to successful Internet and clinic operations requires an
aggressive advertising campaign targeting physician referral programs, and
working closely with HMO's and health insurance companies to make the clinics
contract providers. Internet marketing allows the Company to target its intended
demographics.

MARKET POSITION AND COMPETITION

The global markets for the treatment of skin diseases are large and
reoccurring, most experts believe the off shore world market is equal to two
times the United States market.

Although acne appears to concentrate itself in the teenage population,
it can and has afflicted many for a lifetime. As one age group grows out of the
acne phase, another group replaces them. The National Center of the Treatment of
Disease estimated that 60% of the teenagers in the US are affected to some
degree by acne. As a part of the total population base, that group percentage is
only 10%, but when translated into treatable patients, it amounts to
approximately thirty million people with only 10% seeking professional medical
attention according to The Department of Health, Education, and Welfare.

Eczema affects a smaller portion of the total population: about 4%.
Further, it is estimated that approximately 85% of that number will seek the
treatment of a physician (AMA statistics show that 12,000,000 people have the
disease and approximately 10,400,000 will seek medical treatment.) The chronic
stages of eczema can begin shortly after birth and last a lifetime. The disease
can exhibit many non-specifics in its diagnosis. The medical profession has
adopted the term atopic dermatitis to describe this broad range of skin
conditions including eczema, psoriasis, contact dermatitis, and moll scum.

For psoriasis, the Wasatch methodology offers a therapy, which
eradicates the symptoms in approximately 70% of patients, treated. The potential
patient population in the United States is over five million.

The potential population in the United States affected by these skin
conditions:

ACNE 27,000,000
ATOPIC DERMATITUS 17,250,000
PSORIASIS 5,500,000

The products that Wasatch is presently marketing target these three
disease categories for physician-assisted service. Although the original Wasatch
research was for acne only, it was not too long into the clinical trials that
the benefits for eczema and other skin problems were observed. With the
introduction of AISC medical clinics, additional skin disorders such psoriasis;
folliculitis, molluscum, cold sores, chronic athlete's foot, and contact
dermatitis were found to respond to the treatment. Outstanding results have been
achieved with the large-scale treatment of these skin conditions.

Currently, the "Skin Fresh" technology is only available at the
Company's clinics, because the treatment requires a physician's diagnosis of the
skin disorder and a prescription for a topical antibiotic that is part of the
treatment regimen. In the clinics, the patients learn the treatment regimen and
are monitored in frequent follow up visits to insure strict compliance. The
Company believes that a higher success rate occurs when the patient follows the
treatment regimen closely.

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The Clinic's primary competitors are primary care physicians, who treat
common skin disorders, and licensed dermatologists. Dermatologists have existing
practices and receive referrals from various primary care physicians. Since the
Company's technology represents an alternative treatment, the medical community
and the public at large must be educated about the benefits of the "Skin Fresh"
technology. Until the Company's technology becomes accepted and the benefits of
the safer and more cost effective method of treating skin disorders becomes more
widely understood, the Company must compete with the professional reputations of
dermatologists and physicians and the larger financial resources of the medical
community.

The Company is developing an Internet marketing program and a strategy
to introduce over-the-counter products through retail outlets. Competition will
come from large pharmaceutical companies, with large and sophisticated
distribution channels, and fully developed marketing strategies.

The Company management believes the key to its success is to introduce
the "Skin Fresh" Technology into the market place with an aggressive advertising
campaign that targets a physician referral program, working closely with HMO's
and insurance companies to become a contract provider and through emphasizing
the appropriate Internet demographic.

STRATEGY

The Wasatch goal is to build a leading worldwide specialty
pharmaceutical company in the skin care and preservation business. We intend to
achieve this goal by:

a. Implementing the management belief that the most successful
treatment regimen for the aforementioned skin disorders is through
uniform and consistent clinical type supervision as opposed to the sale
of self- administered prescription or over the counter drugs from a
pharmacy.

b. Expanding the clinic network based upon the development experience
of the two prototype clinics and the Company's ability to attract and
motivate experienced management personnel. AISC intends to have 11 to
14 clinics operating in the next two years, using the "Skin Fresh
Methodology" and through the "Internet." The clinics will be patterned
after the prototype clinics, and opened in large metropolitan areas
under the supervision of a licensed physician.

c. Developing an Internet business in the following five phase program-

Phase I - Business to Consumer: Patients will be able to research
Wasatch's products, obtain information about skin diseases, and
learn about treatment on the web site. The web site is currently
available.

Phase II - Provider Directory: Patients will be able to enter
their location and will be provided with a list of Dermatologist
and other skin care specialist in their area.

Phase III - Business to Business: The Wasatch Internet program
will provide research and information to physicians, hospitals,
HMOs and insurance companies. An automated system will be included
to aid in the processing and sharing of information with HMOs and
insurance companies.

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Phase IV - OTC Products: Currently in the final stages of the FDA
approval process, several new Wasatch products will be available
without a prescription. Consumers and patients will be able
purchase products on-line as well as receive training and
instruction on how to use the products,

Phase V - Wasatch's web site will become a means to deliver
research information, educational programs and products to the
global marketplace.

RECENT CHANGE IN CAPITAL STRUCTURE

On June 22, 2000, the Company held a Special Meeting of the Board of
Director ("Special Director's Meeting"). At the Special Director's Meeting, the
Directors, pursuant to the Utah Corporation's Code, approved a reverse split of
each of the issued and outstanding of Common Stock of this Corporation into one
half share (1/2) share of Common Stock. In conjunction with the reverse split,
the total number of common shares that the Company is authorized to issue shall
be 100,000,000 common shares after giving effect to the reverse stock split. The
total number of shares of preferred stock that the Corporation is authorized to
issue is 1,000,000 shares.

As of the date of this Prospectus there are 23,905,517 shares of Common
Stock issued and outstanding. There are a total of 49,258 shares of preferred
stock issued and outstanding.

The Offering

This prospectus relates to the issuance of 18,135,440 Warrants
(hereinafter, the "Warrants"), comprised of 9,067,720 Class A Warrants and
9,067,720 Class B Warrants to the Company's shareholders. The Warrants are
exercisable commencing one year after the date of this Prospectus ("Effective
Date"). The Company anticipates that the Warrants will be traded on the OTC
Bulletin Board and in the over-the-counter market "pink sheet," however, there
is no assurances that an active trading market will develop. The 9,067,720 Class
A Warrants entitles the holders to purchase one (1) share of common stock at a
purchase price of $0.50 per share during the five (5) year period commencing
nine months from the Effective Date. The 9,067,720 Class B Warrants entitles the
holders to purchase one (1) share of common stock at a purchase price of $2.00
per share the three (3) year period commencing nine months from the Effective
Date.

The Class B Warrants are redeemable by the Company for $.01 per
Warrant, at any time after April 1, 2003, upon thirty (30) days' prior written
notice, if the average closing price or bid price of the common stock, as
reported by the principal exchange on which the common stock is quoted, the

11
<PAGE>

National Quotation Bureau, Incorporated or the Nasdaq SmallCap Market
("Nasdaq"), as the case may be, equals or exceeds $3.00 per share, for any
twenty (20) consecutive trading days within a period of thirty (30) days ending
within ten (10) days of the notice of redemption. The Class B Warrants may be
exercised any time prior to the expiration of the 30-day redemption notice
period. Upon thirty (30) days' prior written notice to all holders of the Class
B Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Class B Warrants in compliance with the requirements of
Rule 13e-4 to the extent applicable. See "Description of Securities."

This prospectus also relates to the sale of shares of common stock:

1. Issuable upon the exercise of the Warrants, described herein,
and

2. Issued to Aspen Capital Resources, LLC in connection with its
settlement of litigation with the Company.

The holders of the Warrants to the extent they exercise the Warrants,
and the owners of the shares of common stock described above are referred to in
this prospectus as the Selling Shareholders. If all Warrants held by the Selling
Shareholders are exercised, the Company will receive approximately $22,669,300
that will be used to fund the Company's operations. The Company will not receive
any proceeds from the sale of the shares by the Selling Shareholders.

As of December 26, 2000, the Company had 23,905,517 outstanding shares
of common stock. Assuming all Warrants held by the Selling Shareholders are
exercised, there will be 42,040,957 shares of common stock issued and
outstanding. The number of outstanding shares before and after this offering
does not give effect to shares that may be issued upon the exercise and/or
conversion of other options, warrants or convertible securities issued by the
Company.

The Company's Common Stock is traded on the OTC Bulletin Board, under
the symbol "WSPH."

Risk Factors

An investment in the Company's common stock involves risks due the
factors set forth herein in the section entitled "Risk Factors." See, "Risk
Factors."

SUMMARY FINANCIAL INFORMATION

The financial data presented below should be read in conjunction with
the more detailed financial statements and related notes that are incorporated
by reference.

12
<PAGE>

SELECTED FINANCIAL DATA

The following selected financial data reflects the operations of
Wasatch Pharmaceutical, Inc. The financial data included in this table have been
selected by the Company and have been derived from the financial statements for
those periods. The statement of operations data for the years ended December 31,
1999 and 1998, and the balance sheet data as of December 31, 1999 have been
derived from the Company's annual financial statements, incorporated by
reference, which have been audited by Thomas Leger & Co. L.L.P., independent
auditors. The Statement of Operations data for the nine months ended September
30, 2000 and 1999 and for the period from inception (September 7, 1989) through
September 30, 2000, and the Balance Sheet data as of September 30, 2000 are
derived from the Company's unaudited financial statements, incorporated by
reference, which were prepared in accordance with generally accepted accounting
principles and, in the opinion of management, include all of the adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for these periods and the financial condition as of
that date. Historical results are not necessarily indicative of results that may
be expected for any future period.

Effective June 22, 2000, the Company effected a reduction in the number
of shares issued and outstanding through a "reverse stock split" whereby each
shareholder receives one share of common stock for each two shares held as of
that date. The par value of the common stock was not changed. All references to
common stock, common stock outstanding, common stock options and per share
amounts in this registration statement, prior to the date of the reverse stock
split, have been restated, on a retroactive basis, to reflect the one for two
decrease in the shares outstanding.
<TABLE>
<CAPTION>
Statement Of Operations Data

Years Ended Nine months Ended Inception
December 31, September 30, To
--------------------------------- ----------------------------- Sept. 30,
1999 1998 2000 1999 2000
-------------- -------------- ----------- ------------ ------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Clinic revenues $ 44,620 $ 81,476 $ 20,809 $ 37,034 $ 700,780
-------------- -------------- ----------- ------------ ------------
Expenses:
Clinic operating expenses 312,795 253,793 238,503 211,241 2,051,035
General and administrative 378,271 310,062 487,609 238,066 1,575,761
Interest 357,576 254,115 211,885 264,302 1,119,839
Loss -discontinued operations - - - - 409,716
-------------- -------------- ----------- ------------ ------------
Total operating expenses 1,048,642 817,970 937,997 713,609 5,156,351
-------------- --------------- ----------- ------------ ------------

Operating loss (1,004,022) (736,494) (917,188) (676,575) (4,455,571)

Financing expenses (164,728) (722,189) (318,027) (122,774) (2,173,025)
-------------- -------------- ----------- ------------ ------------
Net loss $ (1,168,750) $ (1,458,683) $(1,235,215) $ (799,349) $ (6,628,596)
============== ============== =========== ============ ============
Basic loss per
share $ (.133) $ (0.282) $ (.085) $ (.078) $ (.661)
============== ============== =========== ============ ============
Basic weighted average
shares outstanding 8,757,919 5,179,445 14,592,189 10,252,860 10,033,456
============== ============== =========== ============ ============
</TABLE>

13
<PAGE>

See footnotes to the financial statements for an explanation of the
determination of the number of shares used in computing per share data.
<TABLE>
<CAPTION>
Balance Sheet Data

Period Ended
December 31, September 30,
1999 2000
-------------- ---------------
(Unaudited)
<S> <C> <C>
Net Assets
Current assets $ 24,632 $ 279,150

Current liabilities (3,387,561) (3,862,133)
-------------- ---------------
Working capital (deficit) (3,362,929) (3,582,983)

Other assets 19,896 210,271
-------------- ---------------
Total net assets $ (3,343,033) $ (3,372,712)
============== ===============

Capitalization
Preferred stock $ 49 $ 49
Common stock 11,581 20,766
Paid in Capital 2,039,844 3,236,419
Accumulated deficit (5,393,382) (6,628,596)
-------------- ---------------
Total committed equity (3,341,908) (3,371,362)

Shares issued for future transactions 1,125 1,350
-------------- ---------------

Shareholders (equity) deficit $ (3,343,033) $ (3,372,712)
============== ===============
</TABLE>

14
<PAGE>

RISK FACTORS

In addition to the other information presented in this prospectus, the
following risk factors should be considered carefully in evaluating the Company
and its business before purchasing the common stock offered hereby. This
prospectus contains forward-looking statements that involve risks and uncertain
ties. Our actual results may differ materially from the results discussed in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, those Risk Factors discussed below and elsewhere in this
prospectus.

HISTORY OF OPERATING LOSSES; ANTICIPATED FUTURE LOSSES

To date, the Company has engaged primarily in research, development and
clinical testing. The Company has recorded net losses in every year since its
inception. The accumulated deficit as of September 30, 2000 was approximately
$6,628,596, at which time the Company anticipated its cash and cash equivalents
were sufficient to fund operating expenses for the next nine months. The Company
anticipates continued losses from operations due to expenditures required to
support its growth. There can be no assurance that the Company will be able to
achieve profitability, or that, if achieved, profitability will be sustained.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The Company expects to incur significant increases in operating
expenses in the foreseeable future. The Company intends to substantially
increase its operating expenses for the foreseeable future as the Company:
increases its sales and marketing activities, including expanding its direct and
channel sales and telesales forces; increase its research and development
activities; and expand its general and administrative support activities.

Accordingly, the Company will be required to significantly increase its
revenues in order to maintain profitability. These expenses will be incurred
before the Company generates any revenues by this increased spending. If the
Company does not significantly increase revenues from these efforts, its
business and operating results would be negatively impacted.

UNCERTAINTY OF MARKET ACCEPTANCE "SKIN FRESH" THERAPY

The Company believes that its profitability and growth will depend upon
broad acceptance of the "Skin Fresh" medical treatment in the markets targeted
by the Company. There can be no assurance that patients or physicians will
accept the "Skin Fresh" medical treatment as an alternative to existing methods
of treating acne, eczema, contact dermatitis and other common skin disorders. To
date, "Skin Fresh" has not achieved sufficient market acceptance for the Company
to sustain profitable operations, and there can be no assurance that the "Skin
Fresh" treatment will obtain sufficient market acceptance to achieve profitable
operations. The acceptance of "Skin Fresh" may be affected adversely by its
cost, concerns relating to its efficacy, the effectiveness of alternative
methods of treating skin disorders, the possibility of unknown side effects and
the current lack of third-party reimbursement for the procedure.

Market acceptance could also be affected by the ability of the Company
and other participants in the market to build more clinics, to train the
clinical staff, other physicians who treat common skin disorders and licensed
dermatologists in the procedure. Promotional efforts by suppliers of competitive
products or procedures that are alternatives, may also adversely affect market
acceptance. There would be a material adverse effect on the Company's business,
financial condition and results of operations, if "Skin Fresh" fails to gain
broad market acceptance.

15
<PAGE>

DEPENDENCE ON STRATEGIC ALLIANCES

The Company's future performance depends in part on the success of its
marketing strategy. Failure to develop strategic relationships could harm the
Company's business. The Company's current or potential collaborative
relationships with medical treatment groups (HMO's or PPO's) and insurance
companies may not prove to be beneficial in the future, and they may not be
sustained. The Company also may not be able to enter into successful new
strategic relationships in the future, which could have a material adverse
effect on the Company's business, operating results and financial condition. The
Company could lose sales opportunities if it fails to work effectively with
these parties. Moreover, management expects that maintaining and enhancing these
and other relationships will become a more meaningful part of the Company's
business strategy in the future. However, many of the Company's current partners
are either actual or potential competitors. In addition, the Company may not be
able to maintain these existing relationships, due to the fact that these
relationships are informal or, if written, are terminable with little or no
notice.

HIGHLY COMPETITIVE INDUSTRY

The "Skin Fresh" technology is used to treat acne, eczema, contact
dermatitis and other common skin disorders. Approximately 10% of those that
suffer from acne seek medical treatment, while the majority use over-the-counter
medications or simply live with the problem. With other common skin disorders, a
higher percentage of people seek medical attention, usually from a
dermatologist. At the present time, the "Skin Fresh" technology is available
only through the Company's two prototype clinics because it requires a doctor to
diagnose the skin disorder and to prescribe a topical antibiotic that is part of
the treatment regimen. In the clinics, the patients learn the treatment regimen
and are monitored in frequent follow up visits to insure strict compliance. The
Company believes that a high success rate results when the patient follows the
treatment regimen very closely.

Substantially expanding the Company's penetration of the skin treatment
market places is a formidable task considering the number of competitors in that
space. The Company is competing against vendors who have significantly larger,
well-developed distribution channels and significantly greater resources for
sales development.

The clinic operation's primary competitors are primary care physicians
who treat common skin disorders and licensed dermatologists who have existing
practices and receive referrals from various primary care physicians.

Since the Company's technology represents an alternative treatment, the
medical community and the public at large must be educated about the benefits of
the "Skin Fresh" technology. Until this technology becomes more medically
accepted and the benefits of providing a safer and more cost effective method of
treating these skin disorders become more widely understood, the Company must
compete with the reputations, technical expertise and large financial resources
of the medical community. The procedures offered by the Company's Clinic
operation also compete with other present forms of treatment. The Company
expects that companies that may develop new products to directly compete with
the Company.

RISK OF TECHNOLOGICAL OBSOLESCENCE

The market in which the Company sells pharmaceuticals is subject to
rapid technological change. Competitors include major pharmaceutical companies,
many of which have considerably greater financial, technical, clinical,

16
<PAGE>

marketing and other resources and experience than the Company. The markets in
which the Company competes and intends to compete are undergoing, and are
expected to continue to undergo, significant technological change, and the
Company expects competition to intensify as technological advances in such
fields are made. There can be no assurance that developments by others will not
render the products or technologies of the Company obsolete or uncompetitive.

GOVERNMENT REGULATIONS

Because a physician is involved, the clinic operations are subject to
local, state and federal laws concerning medical practices. The FDA regulates
the Company's prescription drugs and all of the prescription drugs currently
used in the existing treatment program are FDA approved. The Company has made
application to the FDA for approval of five over-the-counter products. The
Company anticipates that these products would be sold through retail outlets and
through the Internet marketing program. However, there is no assurance the
products will be approved and if they are approved they may not be completed
until 2001. Product approvals by the United States Food and Drug Administration
(the "FDA") and comparable foreign regulatory authorities may be withdrawn if
compliance with regulatory standards is not maintained or if problems relating
to the products are experienced after initial approval.

The Company's pharmaceutical operation is subject to extensive
regulation by governmental authorities in the United States and other countries,
which regulate the testing, approval, manufacture, labeling, marketing and sale
of pharmaceutical products. The Company will need to spend a substantial amount
of money to comply on an ongoing basis with the regulations of the extensive
government, FDA and other government agencies. The costs of complying with
governmental regulations and any restrictions that government agencies might
impose could have a significant impact on our business. As the Company increases
production and manufacturing of prescription topical antibiotic and possibly the
over the counter prescription, these costs may increase.

UNCERTAINITY OF THE HEATH CARE INDUSTRY

The health care industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operation of
health care organizations. Changes in current health care financing and
reimbursement systems could result in the need for unplanned product
enhancements, in delays or cancellations of orders or revocation of endorsement
of the Company's products by hospital associations or other customers. Any such
occurrence could have a material adverse effect on the Company's business,
financial condition and results of operations.

In the United States and elsewhere, demand for health care treatments
and pharmaceuticals depends on the consumers' ability to be reimbursed for the
cost of the treatments and pharmaceuticals by third-party payors, such as
government agencies, health maintenance organizations and private insurers.
Medicaid and other third-party payors are increasingly challenging the prices
charged for medical services. They are also attempting to contain costs by
limiting their coverage of, and the amount they will reimburse for health care
products and treatment. We cannot be certain that insurers will provide coverage
for our products and treatments in the future. Without adequate coverage and
reimbursement, consumer demand for our products and treatment may be minimized
and the Company's sales would be lower than projected.

17
<PAGE>

LACK OF LONG-TERM FOLLOW-UP DATA; UNDETERMINED MEDICAL RISKS

Although clinical studies conducted to date have demonstrated no
significant adverse reactions to "Skin Fresh" treatments; there can be no
assurance that long-term follow-up data will not reveal additional complications
that may have a material adverse effect on acceptance of the "Skin Fresh"
treatments which, in turn, could have a material adverse effect on the Company's
business, financial conditions and results of operations. Concern over the
safety of "Skin Fresh" treatment could in turn adversely affect market
acceptance of "Skin Fresh" treatment or result in adverse regulatory action,
including product recalls, any of which could have a material adverse effect on
the Company's business, financial condition and results of operations.

PRODUCT LIABILITY AND PROFESSIONAL LIABILITY

Inherent in the health care and pharmaceutical industry is the
potentially significant risk of physical injury to patients which could result
in product liability or other claims based upon injuries or alleged injuries
associated with a defect in the product's and/or physician's performance, which
may not become evident for a number of years. Although the Company has not
experienced a product liability claim in the past six years of selling products
through the clinics, the possibility still remains that the operation of the
clinics and sale of medications may result in claims against the Company by
patients who allege they were injured as a result of medical treatment. The
Company has "umbrella" product and professional liability insurance in the
amounts of $ 1,000,000 (aggregate and per occurrence), but primarily relies and
intends to continue to rely on physicians' professional liability insurance
policies and manufacturers' insurance policies for product liability coverage.

The Company requires its clinical physicians to maintain certain levels
of professional liability insurance, and the agreements between the Company and
the physicians to contain certain cross indemnification provisions. There can be
no assurance, however, that all of the physicians will carry sufficient
insurance and a partially or completely uninsured successful claim against the
Company could have a material adverse effect on the Company's business,
financial condition and results of operations.

The Company's business will suffer if its products or treatment
contains imperfections or errors in judgment. All Company products are
manufactured in FDA approved facilities. Despite testing and quality control,
the Company cannot be certain that imperfections will not be found in the
Company's products as commercial shipment of Company's products increase. If new
or existing customers have difficulty adjusting to the Company's products or
require significant amounts of customer support, the Company's operating margins
could be harmed. Although the Company's products have been field tested on
hundreds of patients, there is the possibility that the Company could face
possible claims and higher development costs if its treatment products contain
undetected inappropriate materials or if the Company fails to meet customers'
expectations. In addition, a product liability claim, whether or not successful,
could harm the Company's business by increasing the Company's costs and
distracting the Company's management.

18
<PAGE>

MANAGEMENT OF GROWTH

There can be no assurance that the Company's revenue growth can be
sustained. To accommodate its growth, the Company will need to implement a
variety of new or expanded business and financial systems, procedures and
controls, including the improvement of its accounting, marketing and other
internal management systems. There can be no assurance that the implementation
of such systems, procedures and controls can be completed successfully, or
without disruption of the Company's operations. Continued expansion of the
Company could significantly strain the Company's management, financial and other
resources. In addition, the Company has hired and will be required to hire in
the future substantial number of new employees, particularly personnel to
support its clinical and pharmaceutical sales operations. There can be no
assurance that the Company's systems, procedures, controls and staffing will be
adequate to support the Company's operations. Failure to manage the Company's
growth effectively could have a material adverse effect on the Company's
business, financial condition and results of operations.

The Company's future success will depend on its ability to continue to
enhance its current products and to develop and introduce new products on a
timely basis that keep pace with technology and satisfy increasingly
sophisticated customer requirements. Rapid technical change, frequent new
product introductions and enhancements, uncertain product life cycles, changes
in customer demands and evolving industry standards characterize the market for
the Company's products and services. The introduction of products embodying new
technologies and the emergence of new industry standards can render the
Company's existing products obsolete and unmarketable.

As a result of the complexities inherent in today's medical environments,
new products and product enhancements can require long development and testing
periods. Consequently, significant delays in the general availability of such
new releases or significant problems in the implementation of such medicines and
treatment processes could have a material adverse effect on the Company's
business, operating results and financial condition. The Company may not be
successful in:

- Developing and marketing, on a timely and cost-effective basis, new
products or new product enhancements that respond to changes in
technology, evolving industry standards or customer requirements;

- Avoiding difficulties that could delay or prevent the successful
development, introduction or marketing of these products; or

- Achieving market acceptance for the Company's new products and
product enhancements.

If the Company fails to release new products, its business may suffer one
or more of the following consequences:

- Customer dissatisfaction;
- Negative publicity;
- Loss of revenues; or
- Slower market acceptance.

19
<PAGE>

DEPENDENCE UPON MANAGEMENT AND THE COMPANY'S ABILITY TO ATTRACT AND RETAIN
SUFFICIENT PERSONNEL.

The future success of the Company is dependent in part on its ability
to recruit and retain certain key personnel, including Gary Heesch, Chief
Executive Officer and Chairman of the Board. The loss of the services of certain
members of management, or other key personnel, could have a material adverse
effect on the Company. The Company intends to secure key-man life insurance
policies ranging from $1 million to $2 million on certain members of management
with the Company as beneficiary. But there can be no assurance that the benefits
under these policies will be sufficient to compensate the Company for the loss
of the services of any of such persons.

The success of the development of the Company's Internet marketing
program is dependent to a significant degree on key management, consultants and
technical personnel. The Company's success also depends on its ability to
attract, motivate and retain highly skilled, managerial, sales and marketing,
and technical personnel, including software programmers and systems architects
skilled in the computer languages. Competition for such personnel in the
software and information services industries is intense. The loss of key
personnel, or the inability to hire or retain qualified personnel, could have a
material adverse effect on our results of operations, financial condition or
business.

The Company must hire additional medical staff at the Clinics,
including licensed physicians. To retain such staff is difficult in today's
competitive marketplace. The Company cannot be sure that it will succeed in its
hiring and retention efforts. The Company competes with other medical and heath
care companies and research and academic institutions for experienced medical
staff and licensed physicians. Many of these companies and institutions have
greater resources than the Company has and thus may be in a better position to
attract desirable candidates.

The Company must also hire additional managers as the business grows,
that are able to address the needs for regulatory, manufacturing, distribution,
sales and marketing capabilities. If the Company is not able to hire managers
with these skills, or develop expertise in these areas, the Company's business
prospects could suffer.

MANAGEMENT EXERCISES SIGNIFICANT CONTROL

The Company's management group and directors will own and control
approximately 16.4% of the shares of Company's common stock and therefore be
able to significantly influence the management and affairs of the Company and
have the ability to control all matters requiring stockholder approval.

Future Capital needs, Uncertainty of Additional Funding

The Company's operation to date consumed substantial amounts of cash.
The negative cash flow from operations is expected to continue and may
accelerate in the foreseeable future. The Company expects, that if the Selling
Shareholders purchase all of the Warrants in the aggregate amount of
$22,000,000, that the Company's capital resources will be adequate to satisfy
the requirements of its current operation and planned operations through 2004.
However, whether the Selling Shareholder purchases all of the allotted warrants
is in the Selling Shareholder's sole discretion, and not in the control of the
Company. The rate at which the Company expends its resources is variable and may
accelerate, depending on many factors, many of which are outside the control of
the Company, including the continued progress of the Company's research and
development of new product candidates; the cost, the timing, and outcome of
further regulatory approvals; the expenses of establishing a sales and marketing
force, the timing and cost of establishing or procuring additional requisite

20
<PAGE>

production and other manufacturing capacities, the cost; if any, the cost of
preparing, filing, prosecuting, maintaining, defending and enforcing patent
claims; and the status of competitive products and the availability of other
financing.

The Company anticipates that it will require additional financing to
fund the Company's operations. Future financing may result in the issuance of
debt, preferred stock and common stock securities, in dilution to the holders of
the common stock. Any such financing, if required, may not be available on
satisfactory terms or at all. There can be no assurance that additional
investments or financing will be available as needed to support the development
of the products. Failure to obtain such capital on a timely basis could result
in lost business opportunities, or the financial failure of our company.

DEPENDANCE ON A LIMITED NUMBER OF SUPPLIERS FOR MATERIALS USED IN MANUFACTURING
THE COMPANY'S PRODUCT; RISK OF INTERRUPTION

The Company's products currently contain components manufactured by
third-party vendors. The Company incorporates components into some of its
products and any significant interruption in the availability of these third
party products or defects in these products could harm the Company's business.
Some of these materials are available only from limited sources. In the event of
a reduction in, interruption of, or degradation in the quality of the supply of
any of our required materials, or an increase in the cost of obtaining those
materials, the Company would be forced to locate an alternative source.

Any significant interruption in the availability of these third-party
products or defects in these products could harm the Company's business unless
and until the Company can secure an alternative source. If no alternative source
were available or if an alternative source were not available on a timely basis
or at a reasonable cost or otherwise on acceptable terms, the Company's ability
to manufacture one or more of our products would be delayed or halted, in which
case the Company could lose sales and customers, and the business would be
significantly harmed as a result.

THE COMPANY HAS LIMITED MANUFACTURING EXPERIENCE

The Company lacks experience in large-scale manufacturing, which could
hamper its ability to manufacture the existing products or new products
developed. The Company has two options to address this issue. First, the Company
can expand its internal ability to manufacture products. Second, the Company
continues to contract with third parties to manufacture for products based upon
the Company's technology. If the Company is unable to expand its own
manufacturing capability or maintain a contract with suitable manufacturers, on
acceptable terms and in a timely manner, the Company may become unable to meet
its demands for existing products and could be delayed in introducing new
products to the market. Failure to meet the demands for existing products or
delays in introducing new products will harm the Company's financial condition.

POTENTIAL ADVERSE IMPACT OF SHARES OF STOCK ELIGIBLE FOR FUTURE SALE

Sales of a large amount of shares of common stock in the public market
could adversely affect the market price of the Common Stock. Such sales also
might make it more difficult for the Company to sell equity securities or
equity-related securities in the future at a time and price that the Company
deems appropriate.

On December 26, 2000, which is after the effective date of the reverse
stock split June 22, 2000, and prior to the registration of the shares in this
prospectus, the Company has issued and outstanding an aggregate of 23,905,517

21
<PAGE>

shares of common stock. All shares of common stock included in this prospectus
will be freely tradable without restrictions under the securities act. On
December 26, 2000, there are 13,085,300 outstanding shares held by existing
shareholders that are restricted securities as that term is defined in Rule 144
under the Securities Act (Hereinafter, the "Restricted Shares"). Restricted
Shares may be sold in the public market only if registered or if they qualify
for an exemption from registration under Rules 144 or 701, promulgated under the
Securities Act. There are approximately 1,027,099 formerly Restricted Shares
that are available eligible for sale because the two-year holding period has
expired.

VOLATILITY OF STOCK PRICE

The market price of the common stock has historically been subject to
price volatility. The market prices for securities of companies engaged in
pharmaceutical development have been volatile. Such volatility may recur in the
future due to overall market conditions or specific factors of the
pharmaceutical industry such as the Company's ability to effectively penetrate
the market, new technological innovations and products, changes in government
regulations, developments with respect to patent or proprietary rights, public
concerns with regard to safety and efficacy of various medical procedures, the
issuance of new or changed stock market analyst reports and recommendations, the
Company's ability to meet analysts' projections and fluctuations in the
Company's financial results. In addition, the common stock could experience
extreme fluctuations in market price that are wholly unrelated to the operating
performance of the Company.

On January 5, 2001, the Company's Common Stock was quoted on the OTC
Electronic Bulletin Board at the price of $0.33. The following sets for the
quarterly fluctuations in the reported bid prices for the period from January 1,
1997 through December 31, 2000. These are the actual prices quoted during the
periods indicated and have not been restated due to the 1:2 reverse split
effective June 22, 2000.

High Bid Low Bid

Fiscal Year Ending December 31, 1997
First Quarter $2.50 $ .625
Second Quarter $3.75 $ .625
Third Quarter $3.375 $ .875
Fourth Quarter $1.125 $ .130

Fiscal Year Ending December 31, 1998
First Quarter $ .219 $ .125
Second Quarter $ .375 $ .170
Third Quarter $ .410 $ .130
Fourth Quarter $ .260 $ .110

Fiscal Year Ending December 31, 1999
First Quarter $ .320 $ .110
Second Quarter $ 2.06 $ .320
Third Quarter $ 1.45 $ .438
Fourth Quarter $ .812 $ .520

Fiscal Year Ending December 31, 2000
First Quarter $ 1.88 $ .550
Second Quarter $ 1.06 $ .531
Third Quarter $ .968 $ .250
Fourth Quarter $ .480 $ .190

22
<PAGE>

APPLICATION OF PENNY STOCK RULES COMMON STOCK

The Securities and Exchange Commission has adopted regulations that
generally define "penny stock" to be any equity security that has a market price
(as defined) less than $5.00 per share or exercise price of less than $5.00 per
share, subject to certain exceptions. The Company's common stock may be subject
to the penny stock rules under the Securities Exchange Act of 1934, as amended,
unless an exemption from such rules is available. Broker-dealers making a market
in the common stock may be required to provide disclosure to their customers
regarding the risks associated with the common stock, the suitability for the
customer of an investment in the common stock, the duties of the broker-dealer
to the customer and information regarding bid and ask prices for the common
stock and the amount and description of any compensation the broker-dealer would
receive in connection with a transaction in the common stock. The application of
these rules will likely result in fewer market makers making a market of the
common stock and further restrict the liquidity of the common stock.

Securities Law Issues

The Company has raised substantial amounts of capital in private
placements from time to time. The securities offered in such private placements
were not registered with the Securities and Exchange Commission or any state
agency in reliance upon exemptions from such registration requirements. Such
exemptions are highly technical in nature and if the Company inadvertently
failed to comply with the requirements of any of such exemption, investors would
have the right to rescind their purchase of the securities or sue for damages.
If one or more investors successfully rescinded the purchase or institute such
suit, the Company could face severe financial demands that could material and
adversely affect our financial position.

Absence of Common Stock Dividends

The Company has not declared or paid dividends, and does not anticipate
paying any cash dividends in the foreseeable future. Any payment of cash
dividends on the Company's common Stock in the future will be dependent upon the
financial condition, results of operations, current and anticipated cash
requirements, plans for expansion, as well as other factors that the Board of
Directors deems relevant.

DEPENDENCE UPON PROPRIETARY TECHNOLOGY; UNCERTAINTY OF PATENTS, TRADE SECRETS
AND PROPRIETARY TECHNOLOGY

The pharmaceutical industry is characterized by a large number of
patent filings. A substantial number of patents have been issued to other
pharmaceutical companies. Competitors, therefore, may have filed applications
for or have been issued patents and may obtain additional patents and
proprietary rights related to products or processes competitive with or similar
to those of the Company. Competitors, with far greater resources, may obtain
patents that interfere with the Company's ability to develop or market product
it originated. Since patent applications are secret until patents are issued, in
the United States, or published, in other countries, the Company cannot be sure
that it is first to file any patent application. Further, the laws of certain
foreign countries do not provide the protection to intellectual property
provided in the United States, and may limit the Company's ability to market its
products overseas. The Company cannot give any assurance that the scope of the
rights that may be granted to the Company's products are broad enough to fully
protect those rights from infringement.

23
<PAGE>

Litigation regarding intellectual property is common because there can
be no assurance that any registration or any patent application will
significantly protect an owner's rights to intellectual property. Litigation or
regulatory proceedings, therefore, may be necessary to protect the Company's
intellectual property rights. Such litigation and regulatory proceedings are
very expensive, can be a significant drain on the Company's resources, diverts
resources from product development, and involves substantial commitments of
management time. There is no assurance that the Company will have the financial
resources to defend the Company's intellectual property rights from infringement
or claims of invalidity. Failure to successfully defend the Company's rights
with respect to its intellectual property can have a materially adverse effect
on the Company's business, financial condition and results of competitors, many
of which have far greater resources than the Company, will not apply for and
obtain patents that will interfere with the Company's ability to develop or
market product ideas that it originated.

The Company's brochures that describe the treatment regimen have been
copyrighted. The Company has prepared and filed United States trademarks
applications for some of its trademarks including SILHOUETTE OF A FACE, WASATCH
PHARMACEUTICAL, AMERICAN INSTITUTE OF SKIN CARE and MEDYSIS. The formulas for
the products are maintained as trade secrets with internal controls and
security. There are no patents or patents pending for the Company's products.

The Company relies upon proprietary technology and trade secrets that
are not protected by United States, or international, patents and there is no
assurance that other companies will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to or
disclose the Company's proprietary technology. The Company will use its best
efforts to protect such information and techniques; however, no assurance can be
given that such efforts will be successful. The failure to protect the
intellectual property could cause the Company to lose substantial revenues and
to fail to reach its financial potential over the long term.

The Company also relies on business trade secrets, know-how and other
proprietary information. If this information were disclosed to competitors, the
business would suffer. The Company protects this information, in part, by
entering into confidentiality agreements with licensees, employees and
consultants, which prohibit these parties from disclosing our confidential
information. Despite these agreements, the Company cannot be sure that the
agreements will provide adequate protection for its trade secrets, know-how and
other proprietary information or that the information shared with others during
the course of the Company's business will remain confidential. Nor can the
Company be certain that the Company would have sufficient legal remedies to
correct or be compensated for unauthorized disclosures or sufficient resources
to seek redress.

The Company continues to license rights from Medisys. Medisys is a
research and development company in the field of dermatology. Medisys began its
research in 1989, as continuation of the research started, by Gary V. Heesch
(currently CEO of the Company). Since access to these rights is necessary for
the Company's business, it must comply with these license agreements. The
business could be harmed if Company breaches any of these license agreements,
lose the right to use this licensed technology, or is unable to renew the
existing licenses on acceptable terms or get additional licenses on acceptable
terms.

The Company must not infringe on the intellectual property rights of
others. If the Company infringes upon the rights of others it may be exposed to
the following risks:

24
<PAGE>

a. The Company could be required to alter its products,
treatments or processes;

b. The Company could lose customers that are reluctant to
continue using its products;

c. The Company could be forced to abandon its product development
work;

d. The Company could be required to pay monetary damages; and

e. The Company cannot be sure that it could alter its products or
processes or obtain a license at a reasonable cost, if at all.

The business may be damaged if the Company could not make the necessary
alterations or obtain a necessary license on acceptable terms. In addition, the
Company may need to litigate the scope and validity of intellectual property
rights held by others. Such litigation and regulatory proceedings are very
expensive, can be a significant drain on the Company's resources, diverts
resources from product development, and involves substantial commitments of
management time. There is no assurance that the Company will have the financial
resources to defend a claim that the Company infringed on the intellectual
property rights of its competitors. Failure to successfully defend the Company's
a claim of an alleged infringement upon the intellectual property rights of a
third party can have a materially adverse effect on the Company's business,
financial condition and results of competitors, many of which have far greater
resources than the Company.

Acquisitions of companies or technologies may result in disruptions of the
Company's business

The Company expects to make acquisitions of complementary companies,
products or technologies, although the Company currently lacks adequate working
capital or financial resources to effect acquisitions requiring cash and given
the uncertainty involving the Company's outstanding common stock it may
encounter difficulty in effecting transactions utilizing its equity as purchase
consideration. Currently, the Company has not identified any acquisition
candidates and no acquisitions are contemplated. If the Company makes any
acquisitions, it will be required to assimilate the operations, products and
personnel of the acquired businesses and train, retain and motivate key
personnel from the acquired businesses. Management may be unable to maintain
uniform standards, controls, procedures and policies if it fails in these
efforts.

The Company may have to incur debt or issue equity securities to pay
for any future acquisitions. The issuance of equity securities for any
acquisition could substantially dilute the Company's shareholders. In addition,
profitability may suffer because of acquisition-related costs or amortization
costs for acquired goodwill and other intangible assets. If management is unable
to fully integrate acquired businesses, products or technologies with existing
operations, the Company may not receive the intended benefits of acquisition.

LIMITED TRADING MARKET

The Company's common stock is not traded on an established market, it
is being traded on the OTC Bulletin Board. There is no prior trading market for
the Company's Warrants. There can be no assurance that a trading market for the
Warrants will develop or, if developed, will continue. There is no assurance
that the limited market for the common stock will continue.

25
<PAGE>

NO COMMITMENT TO PURCHASE UNITS

There is no commitment by the Common's shareholders to exercise any
portion of the Warrants issued, and purchase the underlying common stock. The
Company can give no assurance that any of the Warrants will be exercised. There
is no minimum number of Warrants that must be exercised to enable the Company to
use the proceeds received from the exercise. To the extent that less than all of
the Warrants are exercised, the Company will be prevented from implementing all
of its immediate business plans, absent additional financing. (See "Use of
Proceeds" and "Description of Securities.")

REDEEMABLE WARRANTS

Redemption of the Warrants might force the Warrant holder to exercise
the Warrants, and pay the exercise price, at a time when it may be
disadvantageous for the holder to do so, to sell the Warrants at the current
market price of the Warrants when he might otherwise wish to hold the Warrants
for possible additional appreciation, or to accept the redemption price which
may be substantially less than the market value of the Warrants at the time of
redemption. There can be no assurance that the market price of the common stock
underlying the Warrants will be greater than $1.00 or $3.00 respectively, at
the time the Company is required to file a post-effective amendment to keep its
prospectus current. Further, the Warrants cannot be redeemed unless the
registration statement filed with the Securities and Exchange Commission
registering the Warrants is current. As a result, it may be cost effective and
expedient for the Company to redeem such Warrants for $0.01 per Warrant at an
early date rather than keep the prospectus current for the exercise of the
Warrants. Any holder who does not exercise his Warrants prior to their
expiration or redemption, as the case may be, will forfeit his right to purchase
the shares of common stock underlying the Warrants. (See "Description of
Securities - Warrants.")

26
<PAGE>

CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE WARRANTS

The Company's shareholders will have the right to exercise the
Warrants, or resale the common stock included herein, only if a current
prospectus relating to the shares or the shares underlying the Warrants is then
in effect, and only if such shares are qualified for sale under applicable
securities laws of the states in which the various holders of the Warrants and
shares of common stock reside. There is no assurance that the Company will be
able to maintain a current prospectus covering such shares or be able to
register or qualify such shares in the state where such Warrant holders reside.
The Warrants will be deprived of any value if a current prospectus covering such
shares issuable upon the exercise thereof is not kept effective or if such
shares are not registered in the states in which holders of the Warrants reside.
(See "Description of Securities- Warrants.")

USE OF PROCEEDS

The Company will not receive any proceeds from the resale of shares of
common stock by the Selling Stockholders. The Company will receive proceeds upon
the exercise of any of the Warrants held by its shareholders. The Company
estimate that the Company will receive net proceeds from the exercise of the
Warrants (after deducting $100,000 for estimated offering expenses) of
$22,569,300. The net proceeds of this offering will be used as follows:

[ ] To fund the acquisition of clinics and clinical equipment
[ ] To fund the Internet infrastructure
[ ] To reorganize the corporate debt structure
[ ] To acquire compatible skin care providers and companies
[ ] To complete the FDA approval process
[ ] To complete the market study on the products and their application
[ ] To commence a strategic marketing and advertising plan
[ ] To use as working capital and for general corporate purposes.

The timing and amounts of our actual expenditures will depend on
several factors, including the timing of our personnel and real estate growth
plans effecting the clinic expansion strategy, the success of our internet
Online store, the success of our clinic marketing program, our entry into
collaboration agreements with HMOs, PPOs and insurance companies, the progress
of our clinical trials for certain products, the progress of our research and
development programs, the results of other clinical and marketing studies and
the timing and costs of regulatory approvals of certain products.

Until we use the net proceeds, we intend to invest the funds in
short-term, investment-grade, interest-bearing instruments.

DETERMINATION OF OFFERING PRICE

The Selling Shareholders named in this Prospectus under the "Selling
Shareholders" will sell the securities. The sell or offer price will be
determined arbitrarily by the Selling Shareholders and does not necessarily bear
any relationship to the assets, losses, net worth or book value of the Company,
or other established criteria of value. The Selling Shareholders may decide not
to obtain an independent opinion or other appraisal to determine the offering
price.

The exercise price of the Warrants was arbitrarily determined by the
Company's management and does not necessarily bear any relationship to the
assets, losses, net worth or book value of the Company, or other established
criteria of value.

The Company's Common Stock is currently traded on the NASDAQ OTC
Bulletin Board, under the symbol "WSPH." On January 5, 2001, the price of the
Common Stock was $0.33 per share.

27
<PAGE>

DIVIDEND POLICY

Holders of the Company's Common Stock are entitled to cash dividends
when, as and if declared by the Board of Directors out of funds legally
available therefore. The Company has never paid dividends. The Company does not
anticipate the declaration or payments of any dividends in the foreseeable
future. The Company intends to retain earnings, if any, to finance the
developments and expansion of its business.

Future dividend policy will be subject to the discretion of the Board
of Directors and will be contingent upon future earnings, if any, the Company's
financial condition, capital requirements, general business conditions and other
factors. Therefore, there can be assurance that cash dividends of any kind will
ever be paid.

DILUTION

The following summarizes the dilution to the Warrant holders, assuming
that all of the Warrants were exercised as of December 26, 2000. The net
tangible book value of Wasatch's common stock, as of December 26, 2000, was a
negative ($3,657,056) or a negative of ($0.153) per share. The December 26,2000
deficit consisted of the net tangible book value at September 30, 2000, a
deficit of ($3,473,168), or ($0.145) per share, adjusted for equity transactions
occurring from that date through December 26, 2000, a deficit of ($183,888) or
($0.008) per share.

After giving effect to the sale of shares of common stock through the
exercise of the Warrants, proposed by this offering, at the stated price of $.50
per share for 9,067,720 Series A Warrants and at the stated price of $2.00 per
share for 9,067,720 Series B Warrants and the issuance of 1,500,000 settlement
shares to Aspen, the pro forma net tangible book value as of December 26, 2000
would be $18,912,244 or $.45 per share, after deducting the estimated offering
expenses of $100,000. Net tangible book value per share before this offering was
determined by dividing net tangible book value (total tangible assets less total
liabilities) by the number of shares of common stock outstanding as of December
26, 2000.

This offering will result in an immediate increase in net tangible book
value per share of $.45 to existing stockholders and an immediate dilution per
share of $.47 to the Series A Warrant holders and an immediate dilution per
share of $1.66 to the Series B Warrant holders. Dilution is determined by
subtracting net tangible book value per share after this offering from the
assumed warrant conversion price of either $.50 or $2.00 per share. The
following table illustrates this dilution:
<TABLE>
<CAPTION>
Conversion Price Per Share

<S> <C> <C> <C>
$ .50 $ 2.00 Combined
------------- ------------- --------------
Assumed conversion price $ .50 $ 2.00 $ 1.25
------------- ------------- --------------
Net tangible book value (deficit)
per share at December 26, 2000 (.15) (.15) (.15)
Increase per share attributable to offering .18 .49 .45
------------- ------------- --------------

28
<PAGE>

Net tangible book value per share
after this offering $ .03 $ .34 $ .30
============= ============= ==============
Dilution in net tangible book value
per share to new investors $ .47 $ 1.66 $ .95
============= ============= ==============
</TABLE>

The following table summarizes, as of December 26, 2000, the
differences between the total consideration paid to Wasatch for common stock and
the average price per share paid by the existing stockholders and the new
investors purchasing common stock derived from this offering, based on an
assumed conversion price of $.50 and $2.00 per share for Series A Warrants and
Series B Warrants, respectively:
<TABLE>
<CAPTION>
Average
Shares Purchased Total Consideration Price
Number Percent Amount Percent Share
------ ------- ------ ------- -----
<S> <C> <C> <C> <C> <C>
Existing stockholders 22,405,517 53.4% $ 3,613,469 13.6 % $ .16
=========
Offering investors:
Aspen 1,500,000 3.6 450,000 1.7 $ .30
=========
Series A
$.50 conversion price 9,067,720 21.5 4,533,860 17.0 $ .50
=========
Series B
$2.00 conversion price 9,067,720 21.5 18,135,440 68.1 $ 2.00
=========
Cost of Offering - - (100,000) (.4)
---------- ----- ------------ -----
Total 42,040,957 100.0 $ 26,632,769 100.0
========== ===== ============ =====
</TABLE>

PLAN OF DISTRIBUTION

The Company is registering the shares of Common Stock on behalf of the
Selling Stockholders. The Company will bear all of the costs, expenses and fees
in connection with the registration of the shares offered by this Prospectus
other than brokerage commissions and similar selling expenses, if any,
attributable to the sale of shares which will be borne by the Selling
Stockholders. The Selling Stockholders may make sales of the Common Stock from
time to time in one or more types of transactions (which may include block
transactions) on the NASDAQ OTC market, in negotiated transactions, through put
or call option transactions relating to the shares, through short sales of
shares, or a combination of such methods of sale, at market prices prevailing at
the time of sale, or at negotiated prices. Such transactions may or may not
involve brokers or dealers. The Selling Stockholder, Aspen, advised us that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinated broker acting in connection with the
proposed sale of shares by the Selling Stockholders, Aspen.

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<PAGE>

The Selling Stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of the shares or of securities convertible into or exchangeable for the
shares in the course of hedging positions they assume with Selling Stockholders.
The Selling Stockholders may also enter into options or other transactions with
broker-dealers or other financial institutions that require the delivery to such
broker-dealers or other financial institutions the shares offered by this
Prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as amended or supplemented to reflect such
transaction).

The Selling Stockholders may make these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).

The Selling Stockholders and any broker-dealers that may used in
connection with the sale of shares may be "underwriters" within the meaning of
Section 2(a)(11) of the Securities Act, and any commissions received by such
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. The Selling Stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act.

Because the Selling Stockholders may be "underwriters" within the
meaning of Section 2(a)(11) of the Securities Act, the Selling Stockholders will
be subject to the Prospectus delivery requirements of the Securities Act. The
Company has informed the Selling Stockholder that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales in the market.

Upon the Company being notified by the Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, the Company will
file a supplement to this Prospectus, if required, pursuant to Rule 424(b) under
the Securities Act, disclosing:

- the name of each such Selling Stockholder and of the
participating broker-dealer(s);

- the number of shares involved;

- the initial price at which such shares were sold;

- the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable;

- that such broker-dealer(s) did not conduct any investigation
to verify the information set out or incorporated by reference
in this Prospectus; and

- other facts material to the transactions.

The resale of the securities held by the Selling Stockholder is subject
to prospectus delivery and other requirements of the Securities Act of 1933, as
amended. In addition, upon the Company being notified by the Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares, a supplement to
this Prospectus will be filed.

30
<PAGE>

DESCRIPTION OF SECURITIES

Common Stock

The Company's authorized Common Stock consists of 100,000,000 shares of
Common Stock, $.001 par value per share. As of December 26, 2000, the Company
had 23,905,517 shares of Common Stock issued and outstanding. Immediately prior
to the date of this Prospectus, there were 1165 stockholders of record of the
Company. Except for Warrants held by, and not exercised, the Selling
Shareholders, and Options held by the Company's employees, holders of the Common
Stock do not have preemptive rights to purchase additional shares of Common
Stock or other subscription rights. The Common Stock carries no conversion
rights and is not subject to redemption or to any sinking fund provisions. All
shares of Common Stock are entitled to share equally in dividends from sources
legally available therefore when, as and if declared by the Board of Directors
and, upon liquidation or dissolution of the Company, whether voluntary or
involuntary, to share equally in the assets of the Company available for
distribution to stockholders. All outstanding shares of Common Stock are validly
authorized and issued, fully paid and non-assessable.

The Board of Directors is authorized to issue additional shares of
Common Stock, not to exceed the amount authorized by the Company's Amended
Certificate of Incorporation, and to issue options and warrants for the purchase
of such shares, on such terms and conditions and for such consideration as the
Board may deem appropriate without further stockholder action. The above
description concerning the Common Stock of the Company does not purport to be
complete. Reference is made to the Company's Certificate of Incorporation,
Amended Certificate of Incorporation and bylaws that are available for
inspection upon proper notice at the Company's offices, as well as to the
applicable statutes of the State of Utah for more complete description
concerning the rights and liabilities of stockholders.

The Company's Common Stock is currently traded on the OTC Bulletin
Board, under the symbol "WSPH." On January 5, 2000, the bid price of the Common
Stock was $.33 per share. The Company is required to maintain certain minimum
criteria established by the NASDAQ. There can be no assurance that the Company
will be able to continue to fulfill such criteria. See "Risk Factors." The sales
of significant amounts of the Common Stock of the Company in the public market
may adversely affect prevailing market prices, and may impair the Company's
ability to raise capital that time through the sale of its equity securities.

Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than
fifty percent (50%) of the shares voting for the election of directors can elect
all the directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of Directors.

WARRANTS

The Company currently does not have any other warrants issued other
than the 9,067,720 Class A Warrants and 9,067,720 Class B Warrants. The Warrants
issuable hereby are exercisable commencing nine months after the date of this
Prospectus ("Effective Date"). The Company anticipates that the Warrants will be
traded on the OTC Bulletin Board and in the over-the-counter market "pink
sheet," however, there is no assurances that an active trading market will
develop. The 9,067,720 Class A Warrants entitles the holders to purchase one (1)
share of common stock at a purchase price of $0.50 per share during the five (5)
year period commencing nine months from the Effective Date. The 9,067,720 Class

31
<PAGE>

B Warrants entitles the holders to purchase one (1) share of common stock at a
purchase price of $2.00 per share the five (5) year period commencing nine
months from the Effective Date.

PREFERRED STOCK

There are a total of 49,258 shares of preferred stock issued and
outstanding.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONs

Overview

The financial information presented above and the following narrative
of "Management's Discussion and Analysis of Financial Condition and Results of
Operations" should be read in conjunction with the financial statements and the
notes to those statements which are incorporated by reference. This discussion
includes forward-looking statements that involve risks and uncertainties. Some
of those risks and uncertainties are set forth under "Risk Factors" and included
elsewhere in this prospectus.

The Company's products treat skin disease using non-invasive topical
medicines and methods. Since commencing operations, its activities have been
primarily devoted to developing technologies, as well as other business
development, raising capital, purchasing assets and recruiting personnel. As a
development stage company, Wasatch has had no significant product or service
sales to date. The major sources of working capital have been proceeds from
various private financings.

Financing expenses consist primarily of salaries and related personnel
costs, fees paid to consultants, fees paid for outside services, and the legal
expenses relating to the development transaction structuring for the various

32
<PAGE>

financings. Financing expenses are expensed as they are incurred, except for
specific project costs carried out through independent third party contractors
or suppliers and salaries and related personnel costs that can be reasonably
estimated which are deferred and capitalized if successful or expensed if
unsuccessful.

General and administrative expenses consist primarily of salaries and
related expenses for executive, finance and other administrative personnel,
recruitment expenses, professional fees and other corporate expenses, including
corporate business development and general legal activities.

Research and development costs consist of research related salaries and
personnel costs, fees paid to consultants, fees paid for outside services, legal
expenses resulting from intellectual property protection and organizational
affairs and the other expenses relating to the design, development, testing, and
enhancement of the Company's products. Research and development costs are
expensed as they are incurred, except for special project costs carried out
through independent third party contractors. Expensed research and development
costs are charged to the type of cost incurred.

As of September 30, 2000, the continuing businesses of the Company are
the operation of its two wholly owned subsidiaries, Medisys and AISC. After
January 1994, the Company's sole revenue source has been the two AISC operated
prototype skin care clinics. Revenues, since inception, have been small
averaging approximately $100,000 annually. The Company's best revenue year was
1995 when product and service sales were $225,000.

Management estimates that the average annual revenue per patient is
$600. Forty percent (40%) of those revenues are derived from physician fees. Due
to the small patient load, the two AISC clinics are operating at approximately
five percent (5%) to ten percent (10%) of capacity. Management believes that
revenues will continue to decrease because of the lack of media exposure,
professional networks and advertising.

An important strategy in the clinic's marketing program is the
development of contract relationships with insurance companies that highlight
the cost savings of the Company's treatment programs. To commence those
contractual relationships, the Company plans to identify the cost savings of its
treatment methodology by participating in a controlled study with a pilot
insurance company.

Since inception, one of management's primary activities has been
raising the funds necessary to establish medical skin care service throughout
the United States. In the short term, the plan is to raise sufficient capital to
establish its Internet presence and begin a marketing program to increase
revenue in the existing clinics to continuing profitability. Once there are 30
or more clinics and a network of Internet physicians operating at a profitable
level, the Company intends to raise sufficient capital to establish clinics
through out the U.S. and Europe.

Liquidity and Capital Resources

As of September 30, 2000, the Company had current assets of $279,150
and current liabilities of $3,862,135 resulting in a working capital deficit of
$3,582,983, which is a 5% increase from December 31, 1999. The increased deficit
is attributable to the Company's operating loss for the nine months ended
September 30, 2000, expenditures for business commencement costs associated with
developing products, marketing plans and Internet strategies and the acquisition

33
<PAGE>

of facilities and operating assets. These activities were financed with year to
date net borrowings of $290,000 and additional shareholder investment of
$1,100,000 for the nine months (including $615,000 for the last three months).

As of September 30, 2000, the Company's cumulative operating loss, from
inception, was $6,628,596. In each calendar year since inception in 1989, the
Company's operating expenses have exceeded operating revenues. Currently, the
Company is operating at a cash deficiency of approximately $80,000 per month.
Twenty percent (20%) of the operating loss is attributed to its clinic
operations and the balance is due to debt service and the costs of fund raising
activities. The Company expects its operating expenses will continue at
approximately the same rate, until the Company completes its next level of
funding and increases, substantially, expenditures for the promotion of its
products and services. With adequate funding, Wasatch will increase advertising
and marketing expenditures to launch its e-commerce and marketing programs that
are planned to achieve a level of revenues that will assure continuing
profitability.

The perennial working capital deficit has prevented the Company from
borrowing funds from conventional lending institutions. Being denied funding by
commercial lenders, the Company has had to meet its current obligations by
relying on cash from private loans and equity placements with various
individuals.

Since inception, among the most significant financial events was a
series of 1996 and 1997 transactions designed to add corporate value and
operating revenues through the acquisition of assets and an attempt to raise
capital through an offshore lending source. The asset acquisition transactions
were speculative but the direct cash cost was minimal. During 1997, management
realized that projected increases in operating profits and cash flow from the
asset acquisitions was not going to be realized. In late 1998, it also became
apparent that the parties participating on the loan transaction were not going
to be able to perform. Consequently, effective December 31, 1997 the Company
disposed of the operating assets acquired and in 1998 it discontinued attempts
to consummate the offshore loan. This management decision reduced shareholder
equity by approximately $3,758,000, (including a $410,000 charge to earnings and
a $3,348,000 charge to paid in capital).

From inception, the Company's operations have been funded using vendor
open account credit or debt in the amount of $587,485, shareholder and other
loans in the total amount, including interest, of $2,619,314 and shareholders'
cash investments in the amount of $2,304,328. Although the Company has to date
operated using these sources of funds, management is not certain that similar or
comparable capital resources will continue to be available in the future.

The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company is in the development stage and has not
established a source of revenues sufficient to cover its operating costs in a
manner that will allow it, in the long term, to continue as a going concern.
Management continues to seek long-term funding through private and public stock
offerings and believes that sufficient funding will be raised to meet operating
needs during the remainder of its development stage. In addition, the Company
has set a goal to have the funds to initiate its business plans during the first
quarter of 2001.

The Company has spent, and expects to continue to spend, substantial
amounts in connection with implementing its business strategy, including the
planned product development efforts, additional clinical trials, and the
necessary research and development. Based on current plans, management believes

34
<PAGE>

that its cash and cash equivalents and the net proceeds from this offering will
be sufficient to enable it to meet its planned operating needs for at least the
next 48 months. However, the actual amount of funds needed to operate is subject
to many factors, some of which are beyond Company management's control.

The following recapitulates, since inception, the sources of certain
cash and non-cash working capital utilized in financing the Company's
operations: See the more detailed description of these transactions in the
footnotes to the financial statements which are incorporated by reference.

Professional Services. During the nine months ended September 30, 2000
and the calendar years ended in 1999 and 1998, respectively, the Company issued
1,834,832, 1,665,538 and 424,375 shares of its Common Stock to various
individuals and companies, as compensation for their services.

Shares Issued to Note Holders. In September 1998, the Company issued
250,000 shares of Common Stock to long-term note holders for extending credit
and allowing the forbearance of interest. During the nine months ended September
30, 2000 and the calendar years ended in 1999 and 1998, respectively, the
Company issued 224,823, 211,152 and 676,184 common shares to other
shareholder/creditors as compensation for extending the due date on their
obligations and in lieu of principal payments and interest. In addition, two
creditor/shareholders elected to add the interest earned to date to their note's
principal balance.

Stock Exchange Agreement and Other Share Sales Arrangements. To assist
the Company in raising capital, its two principal officers initiated a series of
transactions where by they transferred Company shares they owned to a financial
intermediary, ProVision Capital Funding, Inc., who was an exclusive agent "to
find" the Company up to $7 million in long-term capital. During 1999 and 2000,
the net proceeds to the Company, after deducting the commissions, were $300,050.

On October 27 1999, the Company executed an "Equity Advisor" agreement
with European Equity and Guarantee Corporation (EEG). According to the
agreement, EEG as an "Equity Advisor," marketed and sold stocks of Wasatch in
Spain and other European countries.

In addition, the Company entered into a third party escrow agreement
for the control of the EEG and ProVision transactions. The Company delivered
1,840,051 shares to the escrow agent to be committed to the EEG and ProVision
sales and marketing plans. During first nine months of 2000, EEG and ProVision
sold 1,671,562 shares of the Company's common stock and the net proceeds to the
Company, after deducting commissions, was $354,356.

Conversion of Outstanding Debt into Common Stock. Two of the Company's
debt holders, with an aggregate principal amount of $60,000, have the right to
convert their outstanding principal and unpaid interest into the Company's
Common Stock. The conversion price is equal to 200% of the amount of the
principal and unpaid interest owed at the time of conversion, and is converted
at the bid price set forth in the promissory note.

Settlement and Compromise with Note Holder. During 1999, a $300,000
defaulted note holder who had 12,750,000 common shares held as collateral sought
to enforce their lien. Under a negotiated settlement agreement, the note holder
received $214,750 in cash for principal and interest and 1,150,000 shares of
common stock. In return, the Company received the shares held as collateral and
the extinguishment of $165,972 of debt. These funds were originally borrowed in
connection with unsuccessful joint venture to raise capital.

35
<PAGE>

Subordinated Debentures. On April 19, 2000, the Company entered into a
Securities Purchase Agreement, with Aspen, a private Utah investment group.
Aspen, thereby, agreed to provide the Company long-term capital funding. Aspen
loaned the Company approximately $200,000, but promised in the Securities
Purchase Agreement to initially loan $1,000,000. In exchange the Company issued
to Aspen a 3 year 8% Convertible Debenture.

In June 2000, the Company's management decided not to accept the
additional funds offered in the Securities Purchase Agreement because the terms
of the Agreement created restrictions and required transactional changes that
were not in the original agreement executed with Aspen.

A dispute arose between the Company and Aspen, concerning the amount of
shares redeemable under the Agreement for the $200,000 loan. The Company filed
suit against Aspen in the Utah State court. Without filing an answer, Aspen
agreed to enter into a settlement agreement with the Company on November 8,
2000. Under the terms of the settlement agreement, Aspen will fully release the
Company from all of the claims that Aspen may have arising from the execution of
the Securities Purchase Agreement if according to the terms of the settlement
agreement and written extension of settlement agreement, the Company pays Aspen
$340,000 dollars and issues 1,500,000 shares of common stock, and the Company
registers those common shares on Aspen's behalf. If the Company defaults on the
terms of the settlement agreement, Aspen's release of claims will become void
and Aspen will have the rights provided in the Securities Purchase Agreement;
and the Company will waive all of its defenses.

The Agreement and written extension requires that the Company deliver
to Aspen 1,500,000 shares of its common stock, and pays Aspen $350,000 on or
before January 16, 2001. Within 60 days of the date of execution of the
Agreement, the Company agreed to file this registration, under the Securities
Act of 1933 including the shares issued to Aspen.

Non-Cash Compensation. Wasatch's operational results include non-cash
compensation expense from the issuance of stock and stock option grants. The
expense is included in the respective categories of expense in the statement of
operations. The Company expects to expand these programs as part of the base
strategy for executive and employee compensation programs.

Results of Operations

During the development stage of the Company, management focused on
establishing the medical and administrative procedures for its clinics. During
this period, the Company did not had the capital to launch a national, or even
regional, advertising and public relations campaign to promote the "Skin Fresh"
treatment and products. Although the Company commenced infrastructure
investments, the basic business of the Company remains a start up and the
Company continues to experience incremental operating losses as a result of the
prototype nature of its operations and the staff increases in preparation of
launching its business strategy.

For the nine months of calendar 2000, the Company had a net loss of
$1,235,215, compared to a net loss of $799,349 in the same period of 1999. The
loss for the latest quarter was $406,175 versus $284,551 for the third quarter
of 1999.

Revenues

During the fiscal year ending December 31, 1999, the revenues from
operations were $44,620. The 1999 fiscal revenues represent a 45% decrease in
revenues from the $81,476 earned during the fiscal year ending December 31,

36
<PAGE>

1998. The nine months ending September 30, 2000 reflects a continuing revenue
decline of 45%, versus the comparable prior period. Management believes the
lower revenue trends are due to the Company's limited marketing efforts because
of a lack of resources. The Company's management does not believe that revenues
from the clinic operations will significantly increase until the Company
launches its fully funded marketing program.

Expenses

In as much as the Company has operated its clinics as prototypes and
not conducted its practice in a traditional profit motivated manner, the costs
have continued to increase because the Company maintains an increasing core
technical and management staff in anticipation of rapid growth and it is
intensifying its efforts to raise capital.

The clinic operating expenses in the nine months of fiscal 2000, and
the fiscal year 1999, were higher than the comparable prior fiscal periods by
$28,000 and $60,000, respectively. The increases were the result of higher
personnel costs and salaries.

The increased loss for the nine months ended September 30, 2000 versus
the same period of 1999 was the result of a $444,900 increase in general and
administrative and fund raising expenses. The increase included a $206,900
increase in professional services, a first time sales and marketing expense of
$71,900, a $63,100 increase in loan financing fees, a $31,800 increase in
officers compensation and a $28,300 increase in investor relations.

The increased professional services expenditures included increased
auditing costs of $88,956, temporary contract accounting costs of $68,030. The
increased legal cost of financings and registrations was $22,634 and the cost of
consultants employed to establish the Company's business infrastructure of
$104,479.

These corporate expense variations are attributable to the timing of
expenditures for fund raising activities, increased business commencement
activities, increased audit costs associated with filing the annual SEC reports
for the years 1997 through 1999 and increased legal costs attributable to SEC
filings and raising capital.

The Company's 1999 fiscal year general and administrative and fund
raising expenses decreased $489,000 or 47% from fiscal 1998 due to the one-time
charge-off of $500,000 in 1998 for the losses resulting in the unsuccessful
Beehive fund raising effort, offset by a 1999 $76,000 increase in legal and
accounting costs because of the Lindberg-Hammar litigation and the increased
audit costs to bring the Company's independent audits up to date. These
increases were offset by a $54,000 decrease in officer's compensation with the
resignation of the former President.

Interest expense the first nine months of 2000 was $211,885 versus
$264,302 in 1999. The decrease is attributable to a temporary reduction in
indebtedness of approximately $281,000 that was offset by the increasing
indebtedness late in the 2nd quarter of 2000. The fiscal 1999 carrying costs of
loans increased $100,000 because of the new debt incurred and a full year's
interest charge on the 1998 fiscal year's new debt.

The Company anticipates that the losses will continue until sufficient
funds are obtained that will enable it to launch its business plan and
strategies.

37
<PAGE>

Plan Of Operations

The operating results experienced, during the six years of the
prototype clinics are not indicative of future operating results, because the
objective of the prototype clinics was to establish operational procedures, and
the Company did not have the funding available to launch the appropriate related
advertising and marketing campaign necessary to properly promote the "Skin
Fresh" technology.

Working capital required for operation of the Company over the past six
years has been obtained through loans and shareholder investment from private
placements. In order to continue operating the prototype clinics and pay the
staff of the Company, additional funding and working capital will be required
until revenues from professional fees and the sale of product increase to a
level adequate to pay for costs of operations.

The implementation of the Company's business plan is dependent on
raising the long-term capital to fund the expansion. The Company estimates that
it needs in excess of $20,000,000 to establish the additional clinics, to
deliver Internet services in a medically sound and efficacious manner, and to
launch the related marketing campaign for product and service identity.

DESCRIPTION OF PROPERTY

Dermatology and Administrative Operations

The Company's administrative and clinic offices are located at 310 East
4500 South, Murray, Utah, and consist of 4,500 square feet. Suite 450 is the
administrative office and Suite 560 is the clinic. The Company leases this space
from Olympus Properties for $4,600 per month. The term of the lease is 60 months
with 58 months remaining. In addition, the Company operates a clinic at 777
North 500 West #206, Provo, Utah, consisting of 1,000 square feet. The Company
leases this space from an unrelated third party for $725 per month. The lease is
a month-to-month arrangement. Also, the Company has just leased a warehouse to
be used as a product distribution center. The warehouse has 1000 square feet of
office space and 5200 square feet of warehouse space and is being leased at
$2,400 per month for 60 months from Knight Investments.

DESCRIPTION OF THE BUSINESS IN LAST FIVE YEARS

History and Organization

The Company was organized under the laws of the State of Utah as Ceron
Oil Company on March 25, 1980. On February 6, 1981, Ceron Oil merged with Folio
One Productions, Ltd. ("Folio"), an inactive, publicly held, Delaware
Corporation. At the time of the merger, the Company changed its name to Ceron
Resources Corporation.

From the Company's inception, until its acquisition of Medisys Research
Group, Inc. (Hereinafter, "Medisys"), on December 29, 1995, the Company's
revenues, and assets were attributable to the oil and gas industry. In December
1985, the Company plugged and abandoned its two oil and gas wells because of
depleted reserves and the overall economic conditions of the industry. In the
period from 1985 to 1995, the Company's business activities, including the
acquisition, development and promotion of oil and gas properties, were conducted
on a limited basis. The Company focused primarily on maintaining its assets. The
Company derived its primary assets from subleases of its office spaces and de
minimis film royalties.

38
<PAGE>

On December 29, 1995, the Company acquired all of the issued and
outstanding shares of Medisys, a Utah corporation, issuing shares of its Common
Stock. On January 16, 1996, the Company merged with Wasatch Pharmaceutical,
Inc., a Utah corporation. The purpose of the merger was to change the corporate
domicile from Delaware to Utah, change the name to Wasatch Pharmaceutical, Inc.,
and changing the par value of its Common Stock to $0.001.

Dermatology Operations

Medisys was incorporated in September 1989. Medisys is a research and
development company in the field of dermatology. Gary V. Heesch (the current CEO
of the Company: See, DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSON) initiated the research while at Dermacare Pharmaceutical, Inc.
(Hereinafter, "Dermacare"). Dermacare began its research, in the early 1980's.
In 1989, Dermacare discontinued its operations, and assigned all of its rights
to the technology developed by its research to Medisys, in exchange for a five
percent (5%) royalty on product sales. These royalties are paid to Dermacare's
former shareholders.

Medisys owns all the rights to the technology developed by Mr. Gary V.
Heesch at Dermacare and further developed at Medisys. AISC operates the clinics
and sell products related to this technology. AISC has used the technology in
the prototype clinics for the past four years. AISC and Medisys' Management
believes that the "Skin Fresh" technology is effective in its present form, and
does not need significant additional development.

The Company devoted a substantial portion of its research to developing
the "Skin Fresh Methodology" for the treatment of acne, eczema, psoriasis,
contact dermatitis, seborrhea, and other less serious skin disorders. The
treatment allows the patient to avoid using prescription drugs that are taken
internally. The "Skin Fresh" treatment includes a cleaning regimen, and the
topical application of FDA approved antibiotics. The Company conducted clinical
studies, in 1983 and 1985, using the "Skin Fresh" treatment. The Company
experienced favorable results.

Through clinical studies and test marketing in doctors' offices,
Medisys' management observed that for the most successful results occurred in
uniform and consistent clinical surrounding, as opposed to sales of prescription
drug kits at pharmacies. Medisys' management also discovered that for a patient
to achieve total or near total clearing of the acne or eczema condition, the
treatments should be continuously supervised. For this reason, the Company
created a wholly owned subsidiary, the American Institute of Skin Care, Inc.
("AISC") to operate clinics to provide the best treatment option for its
patients.

AISC opened two prototype clinics to begin treating patients, to train
a staff of medical and support personnel, and to develop administrative
procedures. In February 1994, the Company opened its first clinic in Salt Lake
City, Utah. In November 1994, the Company opened its second clinic in Provo,
Utah. AISC treated patients in these clinics through 1997 to finalize its
medical and administrative procedures. While operating the prototype clinics,
each Clinic used various advertising mediums to test the effectiveness of the

39
<PAGE>

different advertising mediums. A national advertising company supervised these
tests and used the results to develop a comprehensive advertising and public
relations plan for the Company.

AISC currently operates the two Utah clinics. As capital becomes
available for the expansion, AISC plans to open and operate other clinics using
the "Skin Fresh Methodology." AISC is also developing the means to market its
products and treat patients over the "Internet". The Company intends to
establish its clinics in urban centers, under the supervision of a licensed
physician.

In the clinics, medical assistants do most of the treatment follow-up.
Physicians are only used when medically necessary. A patient's medical costs for
the AISC "Skin Fresh" treatment are significantly lower than the costs for
traditional treatments programs. Most patients' skin is effectively cleared in
two to three months of treatment. The combination of the high success rates,
experienced in the clinics, and the cost savings over traditional treatment
programs should give the "Skin Fresh" treatment and products an advantage in the
medical marketplace.

Medisys' research and development on other products has been limited
because of the Company's limited financial resources. As funds become available,
Medisys intends to conduct additional research in the field of dermatology and
other related medical fields. Medisys will, where possible, market its
technology and products through the AISC clinics, and other channels. Although
the Company may choose to market its technology through licensing agreements,
Medisys is not currently pursuing other licensing arrangements.

The key to a successful Internet and clinic operations requires an
aggressive advertising campaign targeting physician referral programs, and
working closely with HMO's and health insurance companies to make the clinics
contract providers. Internet marketing allows the Company to target its intended
demographics.

Market Position and Competition

Only about ten percent (10%) of the people that suffer from acne seek
medical treatment. The majority use over-the-counter medications or simply live
with the condition. With the other skin disorders, a much larger percentage of
the people suffering from those conditions seek medical attention, usually from
a dermatologist.

40
<PAGE>

The Clinic's primary competitors are primary care physicians, who treat
common skin disorders, and licensed dermatologists. Dermatologists have existing
practices and receive referrals from various primary care physicians. Since the
Company's technology represents an alternative treatment, the medical community
and the public at large must be educated about the benefits of the "Skin Fresh"
technology. Until the Company's technology becomes accepted and its benefits of
the safer and more cost effective method of treating these skin disorders
becomes more widely understood, the Company must compete with the professional
reputations dermatologists and physicians and the larger financial resources of
the medical community.

Patents, Trademarks and Copyrights

The Company's brochures, describing the treatment regimen, are
protected by copyright. There are no patents, or patents pending on the
Company's products. The Company filed United States trademark applications for
several trademarks including SILHOUETTE OF A FACE, WASATCH PHARMACEUTICAL,
AMERICAN INSTITUTE OF SKIN CARE and MEDYSIS. The formulas for the products are
maintained as trade secrets with the appropriate internal controls and security.

Government Regulations

Because a physician is required, the clinics are subject to local,
state and federal laws governing medical practices. The FDA regulates the
Company's prescription drugs. All of the prescription drugs currently used in
the existing treatment program are FDA approved. The Company has applied to the
FDA for approval of five over-the-counter products. The Company anticipates
selling these products through retail outlets and over the Internet. There is no
assurance, however, that these products will be approved, and if approved,
whether that approval will occur until 2001.

Research and Development

The treatment regimen and products were developed with limited capital
resources. As funds become available, the Company intends to aggressively
develop additional complimentary products that can be distributed through the
clinics, the Internet and through retail distribution channels.

Employees

The Company has eight full time employees and believes its relations
with its employees to be good.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSON

The following table sets forth the name, age, and position of each
executive officer and director and the term of office of each director of the
Company, as of December 31, 2000.

Director or Officer Age Position Since
------------------- --- -------- -----
Gary V. Heesch 64 CEO & Director December 29, 1995
David K. Giles 55 CFO & Secretary December 29, 1995
Craig Heesch 62 Director December 29, 1995
Robert Arbon, M.D. 63 Director December 29, 1995

41
<PAGE>

Biographical Information

Set forth below is certain biographical information for each of the
Company's Officers and Directors:

Gary V. Heesch Mr. Heesch has been a director of Medisys Research
Group, Inc. since its incorporation in 1989 and its president since January
1993. Mr. Heesch has been president and a director of the Company since December
1995. Since 1983, Mr. Heesch developed technology in the field of Dermatology
resulting in medical therapies directed at the treatment of acne, eczema and
other common skin disorders.

David K. Giles, MBA Mr. Giles has been a consultant with Medisys since
1993, and a vice president and secretary/treasurer of Medisys since June 1994.
Mr. Giles has served as a vice president and the secretary of Wasatch
Pharmaceutical, the parent company, since December 1995. Prior to coming to
Medisys, Mr. Giles worked, from 1981 to 1993, for EFI Electronics Corporation in
Salt Lake City, Utah. EFI Electronics is, a Utah public corporation (NASDAQ:
EFIC). Mr. Giles served as CFO and Vice President of Finance and Administration.
Mr. Giles received his BS degree from the University of Utah (1970), and an MBA
from the University of Utah (1971).

Craig Heesch Mr. Heesch has been a director of Medisys since 1989, and
a director of the Company since December 1995. Since 1975, Mr. Heesch has been a
senior partner at CV Associates, in Vancouver, Washington. CV Associates is a
technical consulting firm that assist in the development of technologies for
disposition into the marketplace.

Robert Arbon, M.D. Dr. Arbon has been a director of Medisys since 1991,
and a director of the Company since December 1995. Dr. Arbon is physician
specializing in ear, nose and throat. He has practice in Provo, Utah for over
five years. Dr. Arbon received his BS degree from the University of Utah (1961)
and M.D. from the University of Utah, College of Medicine (1964).

Each director serves a one year term, and until a successor is elected
at the Company's annual shareholders' meeting and qualified. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until his successor is elected at the annual meeting of the board of directors
and is qualified.

EXECUTIVE COMPENSATION

The following tables set forth certain summary information concerning
the compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's or its principal subsidiaries Chief Executive
Officer and each of its other executive officers that received compensation in
excess of $100,000 during such period as determined at December 31, 2000.

42
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table

Annual Compensation Awards Payouts
-------------------------------------------- ------------------ ----------------------
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
------------------ ---- ------ -------- ------------ ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary V. Heesch 2000 -0- -0- $68,020 -0- 2,250(1) -0- 76,330(2)
President & CEO 1999 -0- -0- $32,868 -0- -0- -0- 118,132(2)
1998 -0- -0- $37,530 -0- -0- -0- 115,000(2)

David Giles 2000 -0- -0- $99,800 -0- 2,250(1) -0- 46,980(2)
V.P. & Sec'y 1999 -0- -0- -0- -0- -0- -0- 150,000(2)
1998 -0- -0- $96,875 -0- -0- -0- 56,124(2)
</TABLE>

1. Represents the value of options to purchase 1,000,000 shares of Common
Stock at $0.002 per share and 250,000 shares of Common Stock at $.001
per share exercised during the year ending December 31, 2000.

2. These amounts represent back pay and the reimbursement of payroll taxes
and other costs paid by the officers for the benefit of the Company.
The amounts will not be disbursed until adequate funds are available.

Employment Contracts and Termination of Employment and Changes in Control
Arrangements

There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named as a director,
executive officer, promoter or control person above which would in any way
result in payments to any such person because of his resignation, retirement, or
other termination of such person's employment with the Company or its
subsidiaries, or any change in control of the Company, or a change in the
person's responsibilities following a changing in control of the Company, except
as noted below.

In October 2000, the Company signed five-year employment contracts with
the CEO and the CFO, each with an annual salary of $150,000. The employment
contracts include a 10% annual increase.

On August 4, 2000, the board of directors approved a Non-Qualified
Stock Option Plan for 4,000,000 shares to be registered under an S-8
registration on that date. These stock options would be for employees and
consultants. On September 8, 2000, the board granted 100,000 share options to
Gary Heesch and David Giles at an option price of $.001 per share. These were
exercised on September 8, 2000. On October 25, 2000 the Executive Committee
granted stock options for 150,000 shares each to Gary Heesch and David Giles at
$.001 per share. These were exercised on November 1, 2000. On October 10, 2000,
the board of directors approved the grant of stock options to employees and
consultants in the amount of 600,000 shares. The board made the effective date
of the stock options November 2, 2000 at an exercise price of $0.19, the ending
bid price on November 2, 2000. Gary Heesch and David Giles were each granted
78,000 shares as part of the stock option grant. The stock options granted
November 2, 2000 have not been exercised as of December 31, 2000.

BOARD COMPENSATION

The Company may, from time to time, may retain a director or directors
to provide consulting or other professional services to the Company at standard
industry rates or enter into transactions in which non-salaried directors
receive compensation as sellers, brokers, or is some other capacity. Any

43
<PAGE>

decision to retain such individuals or to enter into such transaction will be
subject to the approval of a majority of the disinterested directors.

The Company has not established a cash payment to the directors for
board of director's meetings. However, all directors are entitled to be
reimbursed for travel and other out of pocket expenses for their attendance at
board meetings.

In 1997, the Company issued 1,100,000 common shares to certain of its
officers and directors for notes totaling $110,000. In 1999, the stock was
revalued and the consideration was reduced to the par value of the shares
issued, or $2,200, based upon the continuing losses and lack of liquidity of the
Company's stock. During 1999, the Company issued 269,850 common shares to
certain shareholder/creditors as compensation for extending the due date on
their obligations.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
Company's Common Stock owned on the date of this Prospectus and, as adjusted, to
reflect the sale of shares offered by this Prospectus, by (i) each person who is
known by the Company to won beneficially more than five percent (5%) of the
Company's Common Stock; (ii) each of the Company's officers and directors; (iii)
all officers and directors as a group:
<TABLE>
<CAPTION>
Amount and
Name and Position with Nature Percentage of
Address (1) Company of Shares (3) Shares
----------- -------- ------------- ------
<S> <C> <C> <C>
Aspen Capital Resources, LLC
8989 South Schofield Circle 1,500,000 (2) 6.3%
Sandy, Utah 84093 Common Stock

Gary V. Heesch President & CEO 1,645,675 6.9%
Common Stock (D)
Common Stock (I)

David Giles Vice Pres. & Secretary 1,671,341 7.0%
Common Stock (D)
Common Stock (I)

Craig Heesch Director 192,728 .8%
Common Stock

Robert Arbon, M.D. Director 397,500 1.7%
Common Stock
All Officers and Directors
As a Group 3,907,244 16.4%
Common Stock
</TABLE>
(1) Unless otherwise noted; C/O Wasatch Pharmaceutical, Inc., 310 East 4500
South, Suite 450, Murray, Utah 84107.
(2) Includes 1,500,000 shares of restricted stock issued as partial
settlement agreement dated December 8, 2000. These 1,500,000 shares are
included in this registration statement.
(3) Indirect and direct ownership are referenced by an "I" or "D",
respectively. All shares owned directly are owned beneficially and of
record and such shareholder has sole voting, investment, and
dispositive power, unless otherwise noted.

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<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Loans Collateralized with Company Stock. Two lenders were issued
375,000 shares of the Company's Common Stock as collateral on loans made to the
Company in aggregate principal amount of $319,700. The security agreements
provide that the Company retains the voting rights to the shares of Common
Stock, until the event of a default on the loan agreement occurs. At that time,
all rights will pass to the lender. On August 21, 2000, the Company exchanged
125,000 shares of collateral stock for $50,000 of principal debt owing to one of
the lenders. As of December 31, 2000, the balance of the two notes are in
default, under the terms of the loan agreement. Pursuant to an oral agreement, a
settlement has been agreed to which would exchange $250,000 of principle and
accrued interest of approximately $22,000 for 250,000 shares of collateral
stock.

Collier Loan Compromise and Settlement. In 1998, in connection a loan
made by Collier Management & Development Company (Hereinafter, "Collier"), in
the aggregate principle amount of $300,000, the Company issued 12,750,000 shares
of its Common Stock as collateral. As additional consideration for the loan, the
Company issued 200,000 shares of Common Stock to Collier. The Collier loan was
due March 1, 1999. In March 1999, the loan was in default because the principal
balance remained unpaid. The Company made payments of $146,250, including
interest in 1999 and was able to reach a compromise and settlement with Collier
on March 31, 2000.

Under the settlement agreement, Collier received $214,750, and received
1,150,000 shares of Common Stock, as full satisfaction of the unpaid principal
and interest on the loan. In exchange Collier returned the 11,600,000 shares of
Common Stock and the extinguished remaining $165,972 debt.

Stock Exchange Arrangement with Principal Officers. To assist the
Company in raising capital, Messrs. Gary Heesch and David Giles entered into a
series of transactions whereby each exchanged shares of their Common Stock, held
for over one year, for new shares of the Company's stock. With the assistance of
ProVision Capital Funding, Inc. (Hereinafter, "ProVision"), the Company sold the
shares, previously held by Messrs. Heesch and Giles, to qualified investors, in
transactions exempt from registration, to raise capital for the Company. The
Company received the proceeds from the sale of the shares previously held by
Messrs. Heesch and Giles. In exchange for the shares placing their shares into
escrow, Messrs. Heesch and Giles received new shares of the Company's Common
Stock at the ratio of 1.1 new share for each share of Common Stock surrendered
to the Company. The Officers did not receive any of the cash proceeds from the
sale of the Common Stock or commissions from the sale.

The initial transfer occurred on November 1 1999. By December 31, 1999,
Messrs. Gary Heesch and David Giles had transferred an aggregate of 400,000
shares into escrow. During the first quarter of 2000, David Giles transferred an
additional 185,500 shares to the escrow. At March 31, 2000 ProVision had sold
all shares transferred in escrow. Provision has continued selling shares that
have been transferred from the trust account set aside for EEG and new shares
issued to the trust account. (See below)

Equity Advisor Agreement. On October 27 1999, the Company executed an
"Equity Advisor" agreement with European Equity and Guarantee Corporation
(Hereinafter, "EEG"). EEG agreed to purchase, from the Company, its Common Stock

45
<PAGE>

at a price not less than 50% of the mid price between bid and ask values at the
time of sale. The Company committed 1,000,000 shares to EEG. During 1999, EEG
purchased 67,679 shares of the Company's Common Stock. The Company received
$48,762 from the sale of the shares.

Aspen Settlement Agreement. This prospectus relates in part to
1,500,000 shares of common stock of Wasatch Pharmaceutical, Inc. (hereinafter,
the "Company") that may be sold from time to time by Aspen. These shares were
issued to the selling stockholder in connection with its settlement of
litigation with the Company. The Company will not receive any proceeds from the
sale of the 1,500,000 shares of common stock listed above. The Company will pay
the expenses of registering all of these shares for sale by the selling
shareholder, herein named.

On April 19, 2000, the Company entered into a Securities Purchase
Agreement, with Aspen, a private Utah investment group. Aspen, thereby, agreed
to provide the Company long-term capital funding. Aspen loaned the Company
approximately $200,000, but promised in the Securities Purchase Agreement to
initially loan $1,000,000. In exchange the Company issued to Aspen a 3 year 8%
Convertible Debenture.

A dispute arose between the Company and Aspen, concerning the amount of
shares redeemable under the Agreement. The Company filed suit against Aspen in
the Utah State court. Without filing an answer, Aspen agreed to enter into a
settlement agreement with the Company on November 8, 2000. Under the terms of
the settlement agreement, Aspen will fully release the Company from all of the
claims that Aspen may have arising from the execution of the Securities Purchase
Agreement if according to the terms of the settlement agreement and written
extension of settlement agreement, the Company pays Aspen $350,000 dollars and
issues 1,500,000 shares of common stock, and the Company registers those common
shares on Aspen's behalf. If the Company defaults on the terms of the settlement
agreement, Aspen's release of claims will become void and Aspen will have the
rights provided in the Securities Purchase Agreement; and the Company will waive
all of its defenses.

LEGAL PROCEEDINGS

On October 15, 1997, Cresport filed a lawsuit against the Company and
the Company's stock transfer agent, Standard Registrar & Transfer Co., in 342nd
Judicial District of Tarrant County, Texas, case number 342-171171-97, seeking
damage arising out of the cancellation the 6,000,000 shares. This lawsuit arose
from agreements that the Company entered into November 1 and 15, 1996 with
Lindbergh-Hammar, Inc. ("Lindbergh"). Pursuant to this agreement, Company issued
6,000,000 shares of restricted common stock in exchange for a note issued by
Lindbergh with a face value of $60,000,000.

The Company demanded payment on the note and Lindbergh refused. The
Company, thereafter, terminated the agreement and instructed the transfer agent
to cancel the shares. After the contract was terminated, Lindbergh transferred
the 6,000,000 shares of the common stock issued in the transaction to a newly
formed offshore corporation, Crestport Insurance.

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<PAGE>

Crestport claimed that it was an innocent third party and a holder in
due course, that paid Lindbergh for the shares. Crestport asserted a claim for
$5,000,000.

On December 20, 2000, Crestport's claims against the Company were
dismissed with prejudice, in consideration of a settlement agreement between the
Company and Crestport. In the settlement agreement, the Company agreed to issue
Crestport 100,000 shares of common stock, 50,000 Class A Warrants and 50,000
Class B Warrants on the terms as described herein.

Capital Asset on November 27, 2000 filed suit against the Company in
Utah State Court, claiming that the Company has an obligation to repay a
personal loan obligation of a former employee of the Company. The former
employee received a loan secured by his home and falsely claimed that he was
authorized to obligate the Company on the loan. The former employee has
apparently defaulted on the loan. Capital Assets foreclosed on the property and
is has now filed a claim demanding that the Company to pay the difference
between the foreclosure sale amount and the amount left owing on the mortgage.
The Company's attorney has filed an answer and the Company intends to file a
counter claim against Capital Asset.

The Company is a party to other legal proceedings that are covered by
liability insurance, the outcome of which will not have a material adverse
effect on the Company.

COUNSEL

The validity of the issuance of the Warrants and shares of the common
stock offered by this prospectus will be passed upon for the Company by Marcus
A. Sanders, Esq. Mr. Sanders, who has provided advice with respect to this
matter, owns no shares of Wasatch Pharmaceutical stock. Mr. Sanders is not an
"affiliate" of the Company and does not have any interest in the registrant.

EXPERTS

The consolidated financial statements of Wasatch Pharmaceutical and its
subsidiaries incorporated by reference in this prospectus have been audited by
Thomas Leger & Co., L.L.P., 1235 North Loop West, Suite 907, Houston, TX 77008,
independent certified public accountants, to the extent and for the periods as
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon such reports given upon the authority of
said firm as experts in accounting and auditing.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No "expert" as that term is defined pursuant to Regulation S-B, or the
"counsel" of the Company as that term is defined pursuant to regulation S-B, was
hired on a contingent basis, or will receive a direct or indirect interest in
the Company, or was a promoter, underwriter, voting trustee, director, officer,
or employee of the Company at any time prior to the filing of this registration
statement.

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<PAGE>

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is currently traded on the OTC Bulletin
Board, under the symbol "WSPH." There are approximately 1,165 shareholders.

On January 5, 2001, the Company's Common Stock was quoted on
the OTC Electronic Bulletin Board at the price of $0.33. The following sets for
the quarterly fluctuations in the reported bid prices for the period from
January 1, 1997 through December 31, 2000. These are the actual prices quoted
during the periods indicated and have not been restated due to the 1:2 reverse
split effective June 22, 2000.

High Bid Low Bid

Fiscal Year Ending December 31, 1997
First Quarter $2.50 $ .625
Second Quarter $3.75 $ .625
Third Quarter $3.375 $ .875
Fourth Quarter $1.125 $ .130

Fiscal Year Ending December 31, 1998
First Quarter $ .219 $ .125
Second Quarter $ .375 $ .170
Third Quarter $ .410 $ .130
Fourth Quarter $ .260 $ .110

Fiscal Year Ending December 31, 1999
First Quarter $ .320 $ .110
Second Quarter $2.06 $ .320
Third Quarter $1.45 $ .438
Fourth Quarter $ .812 $ .520

Fiscal Year Ending December 31, 2000
First Quarter $1.88 $ .550
Second Quarter $1.06 $ .531
Third Quarter $ .968 $ .250
Fourth Quarter $ .480 $ .190

The Company has not declared or paid dividends, and does not anticipate
paying any cash dividends on our Common Stock in the foreseeable future. Any
payment of cash dividends on our Common Stock in the future will be dependent
upon the financial condition, results of operations, current and anticipated
cash requirements, plans for expansion, as well as other factors that the Board
of Directors deems relevant.

SELLING STOCKHOLDERS

The Company issued the shares of common stock offered for resale by
this prospectus to the selling shareholders upon issuance of the common stock or
the exercise of warrants.

The table below sets forth information known to us with respect to
beneficial ownership of the common stock as of December 26, 2000 by each selling
stockholder. The table below assumes that the selling stockholders will exercise
all of the warrants, and that all of the selling shareholders will sell their
Shares. Since each stockholder may choose not to sell his shares, we are unable
to state the exact number of shares that actually will be sold.

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<PAGE>

Information with respect to "beneficial ownership" shown below is based on
information supplied by the respective beneficial owner. For purposes of
calculating the percentage beneficially owned, the shares of common stock deemed
outstanding include:

- the shares outstanding as of December 26, 2000; and

- the shares issuable by us pursuant to the exercise of warrants
held by the respective person that may be exercised within 60
days following the date of this prospectus.

The Shares are deemed to be outstanding and to be beneficially owned by
the person holding the securities for the purpose of computing the percentage
ownership of that person but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. The mailing address of
each beneficial owner is 310 East 4500 South 450,Murray, Utah 84107.
<TABLE>
<CAPTION>
------------------------------ ---------------------------- --------------------------- -------------------------------
(1) (2) (3) (4)
------------------------------ ---------------------------- --------------------------- -------------------------------
NAME OF BENEFICIAL OWNER NUMBER OF COMMON SHARES NUMBER OF COMMON SHARES PERCENTAGE OF BENEFICIAL
OWNED PRIOR TO CONVERSION OWNED AFTER CONVERSION OR OWNERSHIP AFTER CONVERSION OR
OR EXERCISE EXERCISE EXERCISE
------------------------------ ---------------------------- --------------------------- -------------------------------
<S> <C> <C> <C>
Aspen Capital Resources 1,500,000 1,500,000 3.6%
------------------------------ ---------------------------- --------------------------- -------------------------------
</TABLE>

ADDITIONAL INFORMATION

Additional information regarding the Company and the shares offered
hereby is contained in the Registration Statement on Form SB-2 and the exhibits
thereto filed with the Commission, under the Securities Act of 1933, as amended.
For further information pertaining to the Company and the shares, reference is
made to the Registration Statement and the exhibits thereto, which may be
inspected without charge at, and copies thereof maybe obtained at the prescribed
rates from, the office of the Commission at 450 Fifth Street, N.W. Washington
D.C. 20549.

The Company is subject to the requirements of the Securities Exchange
Act of 1934 and is required to file reports, proxy statements and other
information with the Securities and Exchange Commission. Copies of any such
reports, proxy statements and other information filed by the Company can be read
and copied at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C., 20549. The public may obtain information on the operation of
the Public Reference Room by calling the Commission at 1-800-SEC-0330. The
Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding the Company. The address
of that site is http://www.sec.gov.

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<PAGE>

The Company has filed with Securities and Exchange Commission a
Registration Statement under the Securities Act of 1933, as amended, with
respect to the securities offered by this prospectus. This prospectus does not
contain all of the information set forth in the Registration Statement. For
further information with respect to the Company and such securities, reference
is made to the Registration Statement and to the exhibits filed with the
Registration Statement. Statements contained in this prospectus as to the
contents of any contract or other documents are summaries that are not
necessarily complete, and in each instance reference is made to the copy of such
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 and related exhibits may also be examined at the
Commission's internet site.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES

The Company's indemnification policy covering officers and directors,
as contained in the by-laws, provides that the Company may indemnify at its
discretion any officer or director for costs reasonably incurred in connection
with civil, criminal, administrative and investigative proceedings if he or she
acted in good faith, whether brought by or in the right of the Company or not;
provided that if a proceeding is brought by or on behalf of the Company and the
officer or director is adjudged to be liable, then no indemnification shall be
made with respect thereto; and provided further that no indemnification shall be
paid if it has been determined that under the circumstances such officer or
director did not meet the standard of conduct relevant to such proceeding. The
Company may advance costs to an officer or director in connection with
proceedings against an him or her as long as he or she undertakes to repay if it
is determined that he or she is not entitled to such indemnification. The
Company may purchase indemnification insurance for officers and directors.

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

INCORPORATION BY REFERENCE

The Company has incorporated by reference in this prospectus the following
documents previously filed with the SEC.

(1) Annual Report on Form 10-KSB for the year ended December 31,
1999;

(2) Our Quarterly Reports (unaudited) on Form 10-QSB for the
quarters ended March 31, June 30, September 30, 2000; and

(3) The description of the common shares contained in our
registration statement on Form 10.

The Securities and Exchange Commission has assigned file number 0-22899 to
reports and other information that we file with the SEC pursuant to the
Securities Exchange Act of 1934. All documents subsequently filed by us pursuant
to Sections 13(a), 13(c), 14 or 15(d) of such Act prior to the termination of
any registered secondary offerings will be deemed to be incorporated by
reference in this prospectus and to be a part of this prospectus from the date
of filing of such documents. Any statement contained in this prospectus or in a
document incorporated or deemed to be incorporated by reference in this
prospectus shall be deemed to be modified or superseded for purposes of this

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<PAGE>

prospectus to the extent that a statement contained in this prospectus, or in
any subsequently filed document which is incorporated or deemed to be
incorporated by reference in this prospectus, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this prospectus and
information incorporated by reference.

We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference in this prospectus, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into such documents.

Requests should be addressed to:

WASATCH PHARMACEUTICAL, INC.
Attn: Dave Giles
310 East 4500 South 45084107
Murray, Utah 84107
(801) 266-3987

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<PAGE>

INDEX TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS. The following consolidated financial statements of Wasatch
Pharmaceutical, Inc and Subsidiaries are incorporated by reference:

Title of Document
Page Nr.

Independent Accountants Report

Consolidated Balance Sheets as of September 30, 2000 and December 31,
1999

Consolidated Statements of Operations

For the nine months ended September 30, 2000 and 1999 and from
inception (September 7, 1989) through September 30, 2000

Consolidated Statements of Operations For the year ended December 31,
1999 and 1998 and from inception (September 7, 1989) through
December 31, 1999

Consolidated Statements of Changes in Common Stock and Paid In Capital
from Inception (September 7, 1989) through December 31, 1996

Consolidated Statements of Changes in Common Stock and Paid In Capital
for the years ended December 31, 1997 and 1998

Consolidated Statements of Changes in Common Stock and Paid In Capital
for the year ended December 31, 1999 and the nine months ended
September 30, 2000

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2000 and 1999 and from
inception (September 7, 1989) through September 30, 2000

Consolidated Statements of Cash Flows

For the years ended December 31, 1999 and 1998 and from inception
(September 7, 1989) through December 31, 1999

Consolidated Statements of Supplemental Cash Flows For the nine months
ended September 30, 2000 and 1999 and from inception (September 7,
1989) through September 30, 2000

Consolidated Statements of Supplemental Cash Flows For the years ended
December 31, 1999 and 1998 and from inception (September 7, 1989)
through December 31, 1999

Notes to Consolidated Financial Statements

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<PAGE>

PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers

The following is a brief summary of certain indemnification provisions
of the Company's Amended Articles of Incorporation and the Utah Revised Business
Corporation Act. This summary is qualified in its entirety by reference to the
text thereof.

Section 16-10a-901 through 909 of the Utah Revised Business Corporation
Act, as amended (the "Corporation Act"), permits a Utah corporation to indemnify
its directors and officers for certain of their acts. More specifically,
Sections 16-10a-902 and 16-10a-907 of the Corporation Act grant authority to any
corporation to indemnify directors and officers against any judgments, fines,
amounts paid in settlement and reasonable expenses, including attorney's fees,
by reason of his or her having been a corporate director or officer. Such
provision is limited to instances where the director or officer acted in good
faith and in a manner he or she reasonable believed to be in or not opposed to
the best interests of the corporation, or, in criminal proceedings, he or she
had no reasonable cause to believe his or her conduct was unlawful. Such
sections confer on the director or officer an absolute right to indemnification
for expenses, including attorney's fees, actually and reasonably incurred by him
or her to the extent he or she is successful on the merits or otherwise defense
of any claim, issue, or matter.

The corporation may not indemnify a director if the director is
adjudged liable to the corporation or deemed to have derived an improper
personal benefit in an action in which the director is adjudged liable. Section
16 10a-906 of the Corporation Act expressly makes indemnification contingent
upon a determination that indemnification is proper in the circumstances. Such
determination must be made by the board of directors acting through a quorum of
disinterested directors, or by the board of directors acting on the advice of
independent legal counsel, or by the shareholders. Further, Section 16-10a 904
of the Corporation Act permits a corporation to pay attorney's fees and other
litigation expenses on behalf of a director or office in advance of the final
disposition of the action upon receipt of an undertaking by or on behalf of such
director or officer to repay such expenses to the corporation if its is
ultimately determined that he or she is not entitled to be indemnified by the
corporation or to the extent the expenses so advanced by the corporation exceed
the indemnification to which he or she is entitled. Such indemnification
provisions do not exclude other indemnification rights to which a director or
officer may be entitled under the corporation's certificate or articles of
incorporation, bylaws, an agreement, a vote of shareholders, or otherwise. The
corporation may also purchase and maintain insurance to provide indemnification.

The foregoing discussion of indemnification merely summarizes certain
aspects of the indemnification provisions of the Corporation Act and is limited
by reference to the above-discussed section of the Corporation Act.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to members of the board of directors, officers, employees,
or persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.

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<PAGE>

Item 25. Other Expenses of Issuance and Distribution.

The following sets forth the estimated expenses in connection with this
offering as described in this Registration Statement:

SEC Registration Fee $ 5,796
Printing Fees 30,000
Legal Fees and Expenses 50,000
Accounting Fees and Expenses 5,000
Blue Sky Fees 2,000
Miscellaneous 7,204
--------
Total $100,000
========

All of the above expenses will be paid by the Company.

ITEM 26. Recent Sales Of Unregistered Securities

The Company has sold the following securities that were not registered under the
Securities Act of 1933.

Item 27. Exhibits.

(a) Exhibits. The following exhibits are filed with this report, except
those indicated as having previously been filed with the Securities and Exchange
Commission and which are incorporated by reference to another report,
registration statement or form. The Company will furnish any exhibit indicated
in the list below as filed with this report (not incorporated by reference) upon
payment to the Company of its expenses in furnishing the information upon the
request of any Shareholder of Record.

3.0 Articles and Bylaws
3.1 Amended Articles of Incorporation of the Company*

3.2 Bylaws of the Company*

4.0 Instruments Defining the Rights of Security Rights
4.1 Notice and Instructions of Warrants Issued to Shareholders*

5.0 Opinion re Legality
5.1 and Letter of opinion, including consent of Marcus Sanders,
23.01 Attorney and Counselor at Law, regarding legality of Common
Stock to be issued to Aspen and to the shareholders pursuant
exercise of Warrants and the issuance of the warrants to the
shareholders.

13.0 Annual Reports and Quarterly Reports*
13.1 Annual Report for year ended December 31, 1999 filed on Form
10-KSB

13.2 Quarterly Report for quarter ended March 31, 2000 filed on
Form 10-QSB

13.3 Quarterly Report for quarter ended June 30, 2000 filed on Form
10-QSB

13.4 Quarterly Report for quarter ended Sept. 30, 2000 filed on
Form 10-QSB

15.0 Letter re unaudited interim financial information*

23.0 Consent of experts and counsel
23.01 Consent of Thomas Leger & Co., L.L.P., independent certified
public accountants.

24.0 Power of Attorney
24.01 Power of Attorney (See Signature Page)

27.0 Financial Data Schedule*

* incorporated by reference

Item 28. Undertakings.
Rule 415 Offering- Item 512(a)

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement, to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement.

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

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

Filings Incorporating Subsequent Exchange Act Documents by Reference - Item
512(b)

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(a) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

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<PAGE>

Filing of Registration Statement on Form SB-2 - Item 512(e)

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

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on form SB-2 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Salt Lake City, State of Utah, on the 5th day of
January, 2001.

WASATCH PHARMACEUTICAL, INC.

By /s/ Gary V. Heesch, President

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gary V. Heesch, with power of
substitution, as his attorney-in-fact for him, in all capacities, to sign any
amendments to this registration statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the date indicated.

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

/s/ Gary V. Heesch Chairman of the Board January 8, 2001
Directors and President

/s/ Craig Heesch Director January 8, 2001

/s/ Robert Arbon Director January 8, 2001