ALLIED BIOTECHNOLOGY INTERNATIONAL INC, 10SB12G, 1996-10-07

ALLIED BIOTECHNOLOGY INTERNATIONAL INC
10SB12G, 1996-10-07
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)

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SECURITIES AND EXCHANGE COMMISSION
----------------------------------

Washington, D.C. 20549

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

FORM 10-SB

GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

ALLIED BIOTECHNOLOGY INTERNATIONAL, INC.
----------------------------------------
(Name of Small Business Issuer in its charter)

NEVADA 33-0256166
- ------------------------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

17942 Cowan Avenue
Irvine, California 92614-6026
- ------------------ ----------
(Address of principal executive offices) (Zip code)

Issuer's telephone number (714) 752-6162
--------------

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class Name of each exchange on which
to be so registered each class is to be registered

NONE NONE

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

CLASS A COMMON STOCK par value $0.001 13,376,466 SHARES
(Title of class)
PREFERRED STOCK par value $0.01. 5,000,000 SHARES
(Title of Class)

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<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL, INC.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Allied Biotechnology International, Inc. is involved in the development of a
series of medical and healthcare products. These include a variety of medical
laboratory diagnostic assays designed for use by hospitals and medical clinics,
and several assays for over-the-counter sales. The Company has also acquired
the rights to develop and market a haircare and skincare product line. The
Company is also investigating the commercial feasibility of a naturally
occurring biopesticide to control nematode infestation of crops. The Company
intends to research and develop genetically engineered biopharmaceuticals, and
will also investigate several novel immunological procedures for cancer
diagnosis and treatment.

The Company was incorporated under the Laws of the State of Nevada on 24 October
1984 as Partners America Ltd, Inc. In 1987 the name was changed to Primary
Metals, Inc. In 1988 the company amended its Articles of Incorporation and
changed its capitalization from 2,500 shares of no par value common stock to
25,000,000 shares of common stock having a par value of $0.001 and effected a
3,429 for 1 split of the outstanding stock, resulting in a total of 6,000,750
shares issued and outstanding at that time. These companies had no significant
operations. In May of 1993 the name was changed to Allied Biotechnology
International, Inc. ("ADBI") and operations commenced.

The initial focus of the company will be on the growing overseas markets which
need affordable healthcare products. The company will license the sale of its
products through distributors who are familiar with the specific regulatory
requirements and market conditions within each country.

The first products to be developed by the Company are medical diagnostic tests
which can be used by hospitals, clinics and doctors offices. The Company is also
developing selected over-the-counter medical assays for use by the general
public. Many developing countries have a great need for quality medical
diagnostic assays but have limited resources to purchase these products. The
Company intends to gain a significant share of the overseas market by producing
high quality assays that are competitively priced. All medical assays developed
in the U.S., including

2
<PAGE>

those developed by the Company, are subject to Food and Drug Administration
requirements before they can be sold in the U.S. The Company must also comply
with the regulatory requirements for each country in which it intends to sell
its products.

The Company has signed distribution agreements for the medical diagnostic
products in Thailand, Korea, Indonesia, Cambodia, Laos, the Philippines and
Latin America. The products are undergoing regulatory review in these countries
before they can be approved for sale. Until regulatory approvals are received,
the Company will receive minimal sales income from these products.

The Company has also developed a line of personal healthcare products, and has
begun distribution of a series of haircare products in the United States and
overseas. The haircare product line is classified as a cosmetic and comes under
the regulatory authority of the Food and Drug Administration. Registration of
the product with the FDA is voluntary and the Company has elected not to
register the product with the FDA. The company has signed distribution
contracts for Korea and for various ethnic groups in the U.S. The market for
personal healthcare products is extremely competitive and requires a significant
commitment of resources for media advertising and follow-up monitoring. Sales
of the haircare products have commenced and the Company will implement a
vigorous marketing campaign of this product in the U.S. in the near future.

The Company has 8 full-time and 2 part-time employees. The Company also
contracts with four independent manufacturers in the U.S., Europe and Mexico for
its production and assembly operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The Company's business plan is divided into three phases based upon the time and
costs involved in developing and getting its products to market:

PHASE 1 was to develop the medical diagnostic assays and to establish an
international distribution network. PHASE 2 was to develop genetically
engineered biopharmaceuticals, and PHASE 3 was to investigate several novel
cancer imaging and immunotherapy procedures. The company also acquired the
technical and marketing rights to several personal healthcare products which
have been incorporated into Phase 1 of its business plan.

3
<PAGE>

In order to expedite its development program, the Company has acquired the
technical expertise, intellectual property and marketing rights to a number of
medical and healthcare products.

Intellectual Property and Marketing Rights.
- -------------------------------------------
The Company has acquired the technical expertise, intellectual property and
marketing rights to a line of medical diagnostic assays from De Ferris
Laboratories Inc. in exchange for 100,000 shares of the Company's common stock.
The Company has also acquired the technical expertise, intellectual property,
and marketing rights for the development of recombinant products from
Recombinant Products International Inc. in exchange for 3,357,365 shares of the
Company's common stock. The company has also acquired the intellectual property
and marketing rights from Dr. Henry J. Smith to develop two novel procedures for
Cancer Imaging and Cancer Therapy in exchange for $100,000. The Company has
also acquired the marketing rights in South Korea from E.M.G. Inc., for a line
of haircare products in exchange for 500,000 shares of the company's common
stock valued at $1,500,000.

In Phase 1 of the plan, the Company acquired the technical capability and
marketing rights to manufacture and distribute a wide variety of clinical
chemistries, enzymeimmunoassays, and over-the-counter tests. These include
clinical chemistry tests such as glucose, cholesterol, triglycerides, LDH, and
SGPT assays; enzymeimmunoassays such as hCG, LH, T3, T4, and TORCH assays; and
over-the-counter tests such as Pregnancy, HIV, and Prostate Cancer assays. The
company has also developed a spectrophotometer - the "ATS 5000", to be used in
conjunction with the laboratory assays, and has filed for a patent on this
instrument. The Company has signed distribution agreements for these products
in South Korea, Thailand, Indonesia, Laos, Cambodia, The Philippines, and in
Mexico and Latin America. The diagnostic products are currently undergoing
testing to comply with regulatory approvals within each country.

The Company has also acquired the rights to manufacture and distribute a hair-
care product line - "HR7", and has signed distribution agreements for South
Korea, and for selected market groups in the U.S. Sales of this product have
commenced in the U.S. and in South Korea.

Historically, the Company has had no significant sales volume from fiscal years
1984 through 1994. In fiscal year 1995 sales increased to $100,450 and for the
first six months of fiscal year 1996 sales increased to $240,333. Approximately

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40% of the revenue was derived from sales of the diagnostic products and 60%
from sales of the haircare products. For this period, the cost of sales was
$122,246 and total operating expenses were $313,026 resulting in a net loss of
$194,939. The company expended approximately $80,000 on research and development
in fiscal 1994, and approximately $120,000 in fiscal 1995. The accumulated
deficit from inception to March 31, 1996 is $671,074 and will continue to
increase as the Company expands its operations and increases its research and
development program. The Company projects that sales of the medical diagnostic
assays and the haircare product line will also continue to increase and plans to
increase its production capacity for these products.

The Company projects that $1,000,000 will be required to complete Phase 1 of the
business plan. The funds will be used to relocate into a larger facility;
purchase equipment and supplies; increase inventory; implement the marketing
program and fund ongoing operations. The Company is currently generating
sufficient income from sales to fund ongoing operations and to meet short-term
needs. However, there are no cash reserves available to fund the Company's
planned growth, and until sufficient funds are raised through loans or equity
financing there will be a significant delay in implementing the business plan.
This lack of liquidity could also have a major impact on the company's ability
to fund ongoing operations should sales revenue decrease.

The second phase of the business plan is to develop recombinant products to be
used as biopharmaceuticals. The Company has conducted feasibility studies to
determine the best way to implement this program and the costs involved. The
minimum capital required to initiate this program is estimated to be $5,000,000.
At this time the company will not initiate Phase 2 until sufficient funds are
available for it to commence operations in a meaningful way.

The Company anticipates that it will satisfy its cash requirements for Phase 1
of the business plan within the next 12 months, and within 24 months for Phase
2.

The third phase of the business plan is to investigate several immunological
methods of cancer imaging and cancer immunotherapy licensed to the company. At
this time the company will not initiate Phase 3 until sufficient funds are
available for it to conduct operations in a meaningful way.

The Company is still in the development stage for many of its products and faces
many scientific, regulatory, business and economic conditions in the U.S. and in

<PAGE>

other countries that may have a significant adverse impact upon the development
of the Company. These risk factors include:
Lack of Operations and Profitability: The Company has little or no history of
operations or profits. Although certain of the company's products are beginning
to generate sales, there can be no assurance that the majority of the company's
research and development programs will result in commercially viable products,
or that the products developed can be successfully marketed.
Additional Financing: It is likely the Company will require additional
financing in the immediate future and also long term financing in order to
establish commercial operations. Lack of such financing will have a serious
impact on the Company's ability to support ongoing operations or to implement
any plans for the company's growth. When access to additional financing is
required, there are no assurances that such financing will be available or, if
available, that it can be obtained on terms favorable to the Company.
Death or Incapacity of Management: The Company's performance is dependent upon
its management. The death or incapacity of said officers would disrupt the
Company's performance and jeopardize its ongoing operations. The company does
not maintain "key person" insurance for any officer or employee. Also, the
company does not maintain liability or risk insurance coverage on its products
and any business interruption will have serious consequences on cash flow and
upon ongoing company operations.
Personnel: There is intense competition for experienced and qualified
scientific and management personnel. There is no assurance that the company
will be able to attract and retain qualified personnel for its research or
commercial operations.
Operations: There are many variables involved in developing and commercializing
new products. The Company cannot project with certainty the outcome of its
operations. There are no assurances that the Company will operate profitably.
Regulations: The Company is subject to many laws and regulations, both in the
U.S. and in other countries. Many of the company's medical products are under
the regulatory authority of the Food and Drug Administration and must undergo
thorough evaluation and review before they can be sold in the U.S. or exported
to other countries. The process is expensive and time consuming and there is no
assurance that the products will be approved for sale in the U.S. The company's
products must also comply with the regulations of each countries' Health
Administration where the products are to be distributed, and this process can
also be expensive and time consuming with no assurance that the products will be
approved for sale in that country.

The Company must also comply with Federal, State and Local Laws in the U.S.,
including the Environmental Protection Act. The Company does not produce or

<PAGE>

utilize any toxic, hazardous or harmful substance that could injure the health
of the individual or the environment. The Company is in compliance with all
applicable laws and regulations and does not anticipate any difficulty in the
future in complying with all applicable Laws and Regulations in the performance
of its operations.
Competition: The healthcare industry in which the Company will engage is
extremely competitive, and the Company will be competing with numerous
established companies, many of which have greater financial and personnel
resources and more experience than the Company. There is also increasing
exchange of scientific information and trade between countries and this could
result in the type of products developed by the Company being subject to
technological obsolescence. There can be no assurance that the Company can
develop superior or more cost-effective products than its competitors, or that
it can successfully market its products.
Economic Risks: Local, national and international economic conditions may have
a substantial adverse effect on the efforts of the Company. In addition,
political, social and legal restrictions may adversely effect company
operations. Healthcare reform is undergoing dramatic changes in the US and in
other countries, and cost-containment measures may result in a reluctance of
certain market groups to purchase newer scientific products. In general, the
Company believes that healthcare reform will benefit the company, as its
products will be competitively priced. However, the Company cannot guarantee
against the possible eventuality of any of these potentially adverse conditions.

ITEM 3. DESCRIPTION OF PROPERTY

Facility Lease.
- ---------------
The Company leases 22,700 sq. ft. of office and manufacturing space at 17942
Cowan Avenue, Irvine, California 92614-6026 at a lease rate of $14,755 per month
for a term of 24 months.

Real Estate Property
- --------------------
The Company has acquired 180 acres of agricultural property in Bakersfield,
California, in exchange for 450,000 shares of the Company's common stock valued
at $0.50 per share. The value of $225,000 assigned to this property was
determined on the basis of the value of $435,000 listed on the tax rolls and
adjusted to reflect the decrease in land values at the time of acquisition. The
company intends to utilize this property to grow and field test the biopesticide
product. The Company has also acquired a 49% interest in the Laurinburg Group,
Inc. which owns the former Scotland Memorial Hospital Building totaling 100,000

<PAGE>

sq. ft. situated on 5.31 acres of commercial property in Laurinburg, North
Carolina, in exchange for 630,000 shares of the Company's common stock valued at
$2,205,000. The property was valued at below replacement value at $45.00 per
sq. ft. by the Laurinburg Group. Comparable new building construction costs are
in excess of $100 per square foot. However, the Scotland Memorial Building
requires renovation and the value of the property was adjusted accordingly.
These properties are currently not insured. The company will obtain insurance
in accordance with improvements to the properties. The Company is conducting a
feasibility study to determine if the building can be utilized either as a
biotechnology production facility or converted to a managed residential
healthcare facility.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information with respect to the beneficial
ownership of the Company's Common shares by (a) each person known to be the
beneficial owner of more than 5% of the company's outstanding Common Shares,
(b) the Directors of the Company and (c) the Directors and Officers as a group.

<TABLE>
<CAPTION>
NAME NUMBER OF SHARES OWNED PERCENTAGE OF
(CLASS A COMMON STOCK) SHARES ISSUED
<S> <C> <C>
Henry Smith 1,326,800 9.9
Pamela Smith 1,089,050 8.1
Geraldine Maestas 384,000 2.9
Rito Madrid 234,400 1.8
Alfred Flores 234,400 1.8
Richard Sample 234,400 1.8
Caleb Zia 128,000 1.0
Donald Dods 101,000 0.8
All Directors and Officers
as a Group 3,732,050 27.9
</TABLE>

Beneficial owners of more than 5% of Company's outstanding shares are:
Henry J. Smith and Pamela J. Smith
38 Landing
Laguna Niguel, CA 92677

<PAGE>

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Directors, Executive Officers, Promoters, and Control Persons are listed
below:
<TABLE>
<CAPTION>

Name Age Position
<S> <C> <C>
Dr. Henry J. Smith 56 President and C.E.O.
Mr. Donald Dods 59 Chief Financial Officer
Ms. Geraldine Maestas 45 Secretary and Treasurer
Mr. Caleb Zia 55 Director
Mr. Rito Madrid 76 Director
Mr. Richard Sample 38 Director
Ms. Pamela Smith 51 Director
Mr. Alfred Flores 66 Director
</TABLE>

The biographies of the Directors and Officers are set forth below. All
Directors hold office until the next annual shareholders meeting or until their
death, resignation, retirement, or until their successors have been elected and
qualified. Vacancies in the existing Board are filled by a majority vote of the
remaining Directors.

Dr. Henry J. Smith Ph.D., President and C.E.O. Dr. Smith has over thirty years
- -------------------------
experience in the development and utilization of medical laboratory assays. He
is the founder of Immunology Consultants Inc., which provided laboratory
services in Immunology and Microbiology and is President of De Ferris
Laboratories, Inc. Dr. Smith was a Research Fellow in Cancer Research and
received a Ph.D. in Medical Immunology from Leeds University School of Medicine,
in England. He was appointed to the Board of Directors for the Orange County
Boy Scouts Council.

Mr. Donald Dods, Chief Financial Officer and Director. Mr. Dods has over
- ----------------
twenty-five years of experience in business administration for the Healthcare
Industry. He has held senior management positions at Nichols Institute,
American Biotest Laboratories, and Pathlab. He also served as the Administrator
of Clinical Practice for John Hopkins Medical Institute. Mr. Dods has authored
several publications for business administration publications on the use of
computers and networks in business.

Ms. Geraldine Maestas, Secretary/Treasurer and Director. Ms. Maestas serves as
- ---------------------
the President of The G.M. Group, an Orange County-based company that specializes
in public relations and marketing. She was previously the co-owner of

9
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Image Marketing Group, a cause-related marketing business. Prior working
experience includes ten years employment with the United States Olympic
Committee as the Manager of Corporate Relations and the Operations Director for
Special Events. Political appointments include positions on The Governor's
Commission on the Status of Women and on The Governor's Discretionary Fund
Committee.

Mr. Caleb Zia, Director. Mr. Zia serves as a Director of Partnership 2010, a
- --------------
coalition of Orange County Leaders established to develop a strategic plan to
direct the economic growth for Orange County. He has over thirty years of
business experience and has held senior management positions in the computer,
airline and banking industries. His commitments include: Member of the Orange
County Job Saving Alliance; Former President-Minority Business Council, and
Member-The California Pharmacy Board.

Mr. Rito Madrid, Director. Mr. Madrid has over forty years of business
- ----------------
experience in the development and management of various business enterprises in
the U.S. and abroad, including land development projects, establishing banking
institutions as well as many community-based philanthropic organizations. He is
the President and Owner of A&E Inc., a leading design firm in Southern
California for over forty years. Mr. Madrid has served as President of the
Manpower Commission of Orange County and on the Board of Directors for Young
Horizons, a youth service oriented program.

Mr. Richard Sample, Director. Mr. Sample is a Senior Vice-President of
- ------------------
Cruttenden & Roth, Inc., an independent investment banking firm with
headquarters in Orange County. He has over twelve years of business experience
and served as the Divisional Vice-President of Paine Webber, Inc., responsible
for Private Investment Sales in the Southern Pacific Division and as Second
Vice-President for Shearson Lehman. Mr. Sample received his B.S. in Economics
from California Polytechnic State University.

Ms. Pamela Smith R.N., Director. Ms. Smith has been actively involved in the
- ----------------------
Healthcare Industry for over twenty years in the field of biological research
and medicine. She was Director of Nursing and has held senior administrative
positions in several healthcare facilities and was responsible for development
and implementation of policy and procedures. Ms. Smith served on the advisory
board for the Regional Opportunities Program for Orange County.

10
<PAGE>

Mr. Alfred Flores, Director. Mr. Flores is Senior Regional Vice-President of
- ------------------
the Voyageur Fund Distributors, Minneapolis. He has over twenty years of
business experience as a stockbroker. He has been named "Wholesaler of The
Year" by E. F. Hutton, and by Shearson Lehman. Recognized for his contributions
to the community, Mr. Flores has received the University of California at
Irvine's "Citation of Merit" award. He attended Louisiana State University and
Tulane University, and received a Business Administration Degree from McNeese
State University.

ITEM 6. EXECUTIVE COMPENSATION

No Director or Officer presently receives any cash compensation for services
rendered to the company. Salaries will be set and paid at such time as the
Company's operations warrant such compensation. Salaries will be periodically
reviewed in light of performance and profitability and will conform to accepted
standards of other medical testing and biotechnology companies.

Each member of the Board of Directors receives 50,000 shares of the Company's
Common Stock for each year of service. In 1996 Dr. Smith and Ms. Maestas each
also received a one-time distribution of 150,000 shares of the Company's Common
Stock for services to the Company during the preceding three years.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

No Director, Officer, Promoter, or Control Person is, or has been, in debt to
the Company.

Henry J. Smith Ph.D. and Pamela J. Smith R.N. are married, and serve on the
Board of Directors.

On 7/24/93 the Company acquired the technical expertise, intellectual property
and marketing rights for the development of recombinant products from
Recombinant Products International Inc. in exchange for 3,357,365 shares of the
Company's common stock, par value $0.001 per share. On 9/1/93 the Company
acquired the technical expertise, intellectual property, and marketing rights to
a line of medical diagnostic assays from De Ferris Laboratories Inc. in exchange
for 100,000 shares of the Company's common stock valued at $100,000. The
Company's President, Dr. Henry Smith is the President and a major shareholder of
both of these companies and as such was in a position to negotiate the terms of
the acquisition agreements between the companies in which he has a controlling
interest. On

11
<PAGE>

9/1/93 the company also acquired the intellectual property and marketing rights
to two novel procedures for Cancer Imaging and Cancer Therapy developed by Dr.
H. Smith in exchange for $100,000.

The Company also acquired on 11/17/1994, 180 acres of agricultural property in
Bakersfield, California for its biopesticide testing program from Duarte Medical
Associates in exchange for 450,000 shares of the Company's common stock valued
at $225,000. Mr. Caleb Zia is Member of the Board and is also the General
Partner of Duarte Medical Associates.

ITEM 8. DESCRIPTION OF SECURITIES.

General
- -------
The Company is authorized to issue 25,000,000 shares of class A common stock par
value $0.001 of which 13,376,466 are issued and outstanding, and 5,000,000
shares of preferred stock par value $0.01 of which none are issued and
outstanding.

Common Stock
- ------------

Shareholders of common stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors without any preference. Holders of
common stock are entitled to one vote per share. Cumulative voting is not
allowed and thus holders of more than 50% of the shares voting for Directors can
elect all Directors. The holders of common stock have no preference rights to
purchase new issues of the securities of the Company.

Dividends may be paid if, and when, declared by the Board of Directors. All
shares are non-assessable and fully paid.

The company has not, and does not anticipate paying any dividends on its common
stock in the foreseeable future.

Upon liquidation or dissolution of the Company, holders of common stock are
entitled to receive pro rata, either in cash or in kind, all of the assets of
the Company after payment of debts. There are no redemption, conversion or
preemptive rights attached to the Common Stock.

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<PAGE>

Preferred Stock
- ---------------
The Board of Directors has the authority without action of the shareholders, to
issue up to 5,000,000 shares of preferred stock in one or more series, and to
designate the dividend rate, voting rights and other preferences and
restrictions for each series which may be greater than the rights of the Common
stock. The issuance of preferred stock may dilute the voting power of the Common
stock and may restrict the payment of dividends to holders of Common stock as
well as possible impairment of liquidity for the sale of common stock. There are
presently no shares of preferred stock issued and outstanding.

Transfer Agent and Registrar.
- -----------------------------
The Transfer Agent and Registrar for the Company is:
U.S. Stock Transfer Corporation
1745 Gardena Avenue
Glendale, CA 91204

Part II

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

The company's stock is traded over-the-counter on the Bulletin Board by the
National Association of Securities Dealers (NASD) under the Symbol- "ADBI."

There are 6,323,740 free trading shares of the company's Class A common stock.

As of March 31, 1996 the High and Low Bids for the securities during the
preceding two years were $3.00 and $1.00 respectively. These prices reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.

As of March 31, 1996 there were 306 shareholders of the Company's common stock.
The Company has not declared or paid any dividends on its stock, and does not
anticipate declaring any dividends in the foreseeable future.

ITEM 2. LEGAL PROCEEDINGS.

Neither the Company, Director, or Officer is a party to any material legal
proceeding or litigation which would impact the operations of the Company.

13
<PAGE>

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.

On 1/8/96 the Company issued 851,001 shares of common stock, par value $0.001.
Of these 750,000 shares were issued to Directors, and 101,001 shares were issued
to other individuals as compensation for services to the company. On 10/28/95
the company issued 630,000 shares of common stock to acquire a 49% interest in
the Laurinburg Group, Inc., a Nevada Corporation for investment purposes. On
6/24/95 the company issued 500,000 shares of common stock to E.M.G. Inc., a
Nevada Corporation, to acquire the distribution rights to the haircare product
in South Korea.

All the securities listed above are issued pursuant to Rule 144 and bear the
customary restrictive legend.

"NO SALE, OFFER TO SELL OR TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH SHARES IS THEN IN
EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS THEN IN
FACT APPLICABLE TO SUCH SHARES".

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company has no provisions in its charter, by-laws or agreements to provide
indemnification of its Directors and Officers.

PART F/S

The Independent Auditor's Report and the Financial Statements for the Six Months
Ending 31 March 1996, for Six Months Ending 31 March 1995 and for Fiscal Years
Ending 30 September 1995, 1994, and 1993 are included.

<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.
FINANCIAL STATEMENTS

March 31, 1996

(with accountants' report thereon)

15
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

FINANCIAL STATEMENTS

March 31, 1996

<TABLE>

<S> <C>
Accountants' Report 1

Financial Statements

Balance Sheet - Assets 2

Balance Sheet - Liabilities and Stockholders' Equity 3

Income Statements 4

Statement of Stockholders' Equity 5

Statement of Cash Flows 7

Notes to the Financial Statements 8

</TABLE>
16
<PAGE>

M. S. FINKEL & CO.
CERTIFIED PUBLIC ACCOUNTANTS

210 Grant Street (412)393-0805
Suite I
Pittsburgh, PA 15219 (310) 473-4700

ACCOUNTANTS' REPORT

To The Board of Directors and Stockholders
of Allied Biotechnology International Inc.

We have audited the accompanying balance sheet of Allied Biotechnology
International Inc. at March 31, 1996, and the related statements of income,
stockholders' equity and cash flows for the period then ended. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of Allied Biotechnology
International Inc. at March 31, 1996, and the results of its operations,
stockholders' equity and cash flows for the period then ended, in conformity
with generally accepted accounting principles.

Merle S. Finkel
Pittsburgh, Pennsylvania
August 30, 1996

17
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

BALANCE SHEET

RESTATED

MARCH 31, 1996

ASSETS
<TABLE>
<CAPTION>

Current assets
- --------------
<S> <C> <C>
Cash 3,433
Inventory 1,269
-----
Total current assets 4,702

Investment (Note 3) 2,205,000

FURNITURE AND EQUIPMENT
- -----------------------
Property and Equipment 57,696
Less: Accumulated depreciation (24,876)
------
Net Furniture and Equipment 32,820

Other assets
- ------------
Real Estate (note 1 (e)) 225,000
Distribution rights, net of
amortization (note 1 (f)) 1,275,000
---------
Total Other Assets 1,500,000
---------

Total Assets 3,742,522
=========

</TABLE>
The accompanying notes are an integral part
of these financial statements.

18
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

BALANCE SHEET

RESTATED

MARCH 31,1996

LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

Current Liabilities
<S> <C> <C>
Accounts payable 52,487
Note payable (Note 4) 11,000
------
Total current Liabilities 63,487

Long-Term Liabilities
Note payable (Note 4) 40,000
-------
Total Liabilities 103,487

Stockholders' Equity
Common Stock
25,000,000 shares authorized @ $.001
par value of which 13,376,466 were
issued and outstanding at March 31,1996 13,376
Additional paid-in capital 4,296,733
Accumulated (deficit) (671,074)
---------
Total Stockholders' Equity 3,639,035
---------

Total Liabilities and
Stockholders' Equity 3,742,522
=========

</TABLE>

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

19
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

INCOME STATEMENTS

RESTATED
<TABLE>
<CAPTION>

For the Period Ended
March 31
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenue
Sales 240,333 19,000
Cost of Sales 122,246 6,270
---------- ----------
Gross Profit 118,087 12,730
---------- ----------

Operating Expenses
Amortization of distribution rights 150,000 0
Depreciation 15,722 2,012
Advertising 3,619 201
Printing expense 11,527 1,249
Stock certificate handling 548 0
Equipment rental 2,558 0
Bank charges 482 0
Tax and license 2,914 0
Marketing meetings 20,273 3,124
Freight and handling 1,159 0
Office expense 16,444 12,953
Telephone and utilities 5,006 0
Office staff 10,702 5,175
Professional fees 14,219 7,358
Rent 26,648 7,767
Miscellaneous expense 3,000 8,120
Travel and entertainment 22,746 3,037
Interest expense 5,459 0
---------- ----------
Total Operating Expenses 313,026 50,996
---------- ----------

Net (loss) for the period (194,939) (38,266)
---------- ----------
Weighted average number of shares outstaning 12,950,501 10,160,000
---------- ----------
Net (loss) per share $(.015) Nil
========== ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.

20
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

STATEMENT OF STOCKHOLDERS' EQUITY
INCEPTION TO MARCH 31, 1996

RESTATED
<TABLE>
<CAPTION>
Common Stock
------------------- Paid In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
---------- ------ ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
October 24,1984
1,750 shares issued
to incorporators;
on 6/6/88 a stock
split of 3,429 for 1 6,000,750 6,001 1,499 7,500

September 30,1985 Net loss (7,483) (7,483)
September 30,1986 Net loss (18) (18)
September 30,1987 Net loss (1,528) (1,528)
September 30,1988 Capital
contribution 10,665 10,665
September 30,1988 Net loss (18) (18)
September 30,1989 Net loss (18) (18)
September 30,1990 Net loss -0- -0-
September 30,1991 Net loss -0- -0-
September 30,1992 Net loss -0- -0-
---------- ------ ---------- ------------ -------------
Balance September 30, 1992 6,000,750 6,001 12,164 (9,065) 9,100

Common stock issued to
RPI shareholders 3,357,365 3,357 3,357
Common stock issued to
De Ferris 100,000 100 99,900 100,000
Common stock sold 602,375 602 87,541 88,143
September 30,1993 Net loss (250,219) (250,219)
---------- ------ ---------- ------------ -------------

Balance, September 30, 1993 10,060,490 10,060 199,605 (259,284) (49,619)

Common stock issued 152,325 152 110,598 110,750
September 30, 1994 Net loss (87,486) (87,486)
---------- ------ ---------- ------------ -------------

Balance, September 30, 1994 10,212,815 10,212 310,203 (346,770) (26,355)

Common stock sold 722,650 723 43,971 44,694
Common stock issued for
distributorship rights 500,000 500 1,499,500 1,500,000
Common stock issued for land 450,000 450 224,550 225,000

September 30, 1995 Net loss (129,365) (129,365)
---------- ------ ---------- ------------ -------------
Balance, September 30, 1995 11,885,465 11,885 2,078,224 (476,135) 1,613,974
========== ====== ========= ============ =============
</TABLE>
The accompanying notes are an integral part
of these financial statements.

21
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

STATEMENT OF STOCKHOLDERS' EQUITY
INCEPTION TO MARCH 31, 1996

RESTATED
(continued)
<TABLE>
<CAPTION>
Common Stock
-------------------- Paid In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
----------- ------ --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance, September 30, 1995 11,885,465 11,885 2,078,224 (476,135) 1,613,974

October 28,1995-
Common stock issued
for investment 630,000 630 2,204,370 2,205,000

October 31, 1995-
Common stock sold 10,000 10 14,990 15,000

January 8, 1996 - stock issued 851,001 851 (851) 0

Period Ended March 31,
1996 Net loss (194,939) (194,939)
----------- ------ --------- -------- ---------
Balance March 31, 1996 13,376,466 13,376 4,296,733 (671,074) 3,639,035
=========== ====== ========= ======== =========
</TABLE>

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

22
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

STATEMENT OF CASH FLOWS

RESTATED
<TABLE>
<CAPTION>
For the Period Ended
March 31
-------------------------
1996 1995
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) (194,939) (38,266)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and depreciation 165,722 2,012
Increase in accounts payable 37,223 19,002
(Increase) in inventory (1,269) 0
------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,737 (17,252)
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES

(Increase) in property and equipment (30,529) 0
------- --------

NET CASH (USED) IN INVESTING ACTIVITIES (30,529) 0
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES

(Decrease) in notes payable (18,000) (28,023)
Sale of common stock 15,000 44,694
Decrease in loans receivable 25,244 0
------- -------

NET CASH PROVIDED BY FINANCING ACTIVITIES 22,244 16,671
------- -------

NET INCREASE IN CASH (1,548) (581)

CASH, BEGINNING OF PERIOD 4,981 681
------- -------

CASH, END OF PERIOD 3,433 100
======= =======
</TABLE>

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

23
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

March 31, 1996

Note 1 Summary of Significant Accounting Policies:
------------------------------------------

This summary of significant accounting policies of ALLIED
BIOTECHNOLOGY INTERNATIONAL INC. (a development stage company) is
presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of
the Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the
preparation of the financial statements.

(a) Organization and Business Nature:
--------------------------------

Allied Biotechnology International Inc. was incorporated in the
State of Nevada in October, 1984. The Corporation changed its
name from Primary Metals Inc. on August 16, 1993 to Allied
Biotechnology International Inc. The company intends to develop
and manufacture genetically engineered products for the
healthcare industry. The Company currently markets
immunodiagnostic kits for hospitals and physicians' offices,
laboratories and the general public. The company was a
development stage company until the September 30, 1995 fiscal
year, at which time its planned principal operations have
commenced and there has been significant revenue therefrom.

(b) Depreciation and Amortization:
------------------------------

Depreciation is provided by the straight-line method at rates
calculated to amortize cost over the estimated useful lives of
respective assets. Upon sale or retirement of the respective
assets, the related cost and accumulated depreciation are
eliminated from the accounts, and gains or losses are reflected
in income. Repair and maintenance expenditures, not anticipated
to extend original asset lives, are charged to income as
incurred.

Laboratory and office equipment are depreciated using the
straight line method over the following estimated useful lives:
Laboratory Equipment 5 years
Office Equipment 5-7 years

24
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

March 31, 1996
(continued)

(d) Intellectual Property
---------------------

The company acquired technical and marketing rights from De Ferris
Laboratories, Inc. for a line of medical diagnostic products developed
in exchange for 100,000 shares of common stock. The transaction was
valued at $100,000.

The company also purchased for the sum of $100,000 intellectual
property concerning a procedure for cancer imaging and cancer therapy.
(See Note 4.)

The value of the intellectual property costs were expensed in the year
of acquisition.

(e) Real Property
-------------

The Company has acquired 180 acres of agricultural property in
Bakersfield, California valued at $225,000 in exchange for 450,000
shares of the Company's stock. The property will be used to grow and
field test a biopesticide plant extract that has a beneficial effect
in protecting commercial crops from soil parasites. The property is
expected to be utilized by the summer of 1997.

(f) Distribution Rights
-------------------

The Company has acquired the exclusive distribution rights for
healthcare products in Korea in exchange for 500,000 shares of the
Company's common stock. The distribution network in Korea currently
has average monthly sales of $100,000, and sales of the Company's over
the counter products are expected to increase the monthly sales
volume.

The distribution agreement, effective July 1, 1995, is for a period of
five years. Management values the distribution rights at $1,500,000
based on the shares trading at $3.00 each. The cost is amortized over
five years, the life of the Agreement, on the straight line basis.

(g) Fiscal Year:
-----------

The Company operates on a September 30 fiscal year.

(h) Basis of Operation:
------------------

The Company prepares its financial statements and federal income taxes
on the accrual basis of accounting.

<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

March 31, 1996
(continued)
NOTE 2 STOCKHOLDERS' EQUITY:
--------------------

Upon incorporation, 2,500 shares of no par value Common Stock were
authorized and 1,750 shares were issued. Effective June 6, 1988, the
Company increased the number of shares authorized to 25,000,000,
established a par value of $.001 a share, and effected a 3,429 for 1
stock split. All references in the Financial Statements to shares of
Common Stock and per-share data reflect the June 6, 1988 changes.

During fiscal 1993, the company acquired the intellectual property of
Recombinant Products International Inc. ("Recombinant"), a California
corporation that was developing genetically engineered products for the
healthcare industry, in exchange for 3,357,365 shares of the Company's
common stock.

The stock issuance was agreed upon by the shareholders of the Company
and Recombinant without the assignment of any valuation to the Company.
All research and development was expensed by Recombinant.

Note 3 Investment:
----------

On October 28, 1995 the Company purchased 49% of the stock of The
Laurinburg Group, Inc. Laurinburg owns a 100,000 square foot building on
5.31 acres of land which was previously operated as Scotland Memorial
Hospital. Laurinburg also owns a 66 2/3% interest of Laurinburg
Residential Care, LLC, a company formed to operate the new facility, but
which is not yet operational.

The investment is accounted for under the cost method and accordingly
only recognizes dividends upon their receipt.

The Company does not have managerial rights in the investment and the
Company's 49% interest does not allow any control over financial or
operating policies.

In accordance with the provisions of FASB No. 121, the Company has
reviewed the underlying asset held by the Laurinburg Group, Inc. Based
on appraisals received by the Laurinburg Group, Inc., for the land and
building, the value of the asset on the Laurinburg Group's books is
already based on an amount lower than current market. In addition, the
Laurinburg Group's option to change the use of the building to a
residential retirement facility also provides a future value greater
than the carrying cost of the investment held on the Company's books.

26
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

March 31, 1996
(continued)
NOTE 4 NOTE PAYABLE:
-------------

a) A $100,000 promissory note was issued to an officer and stockholder
of the Company in exchange for intellectual property regarding the
procedure for cancer imaging and cancer therapy. Although the note
does not call for specific payments, management expects to fully pay
the loan within the next fiscal year.

b) A $40,000 loan was obtained on March 29, 1995 which was secured by
the 180 acres of land. The note provides for monthly interest only
payments through to its due date of April 15, 1998 at which time a
balloon payment of the principal balance is due. The interest rate
on the note is fifteen (15%) percent per annum.

NOTE 5 INCOME TAXES:
-------------

At March 31, 1996, the Company has a federal operating loss carry
forward of $665,615 for financial accounting and federal income tax
purposes. Utilization of the net operating loss in any taxable year
during the carry forward period may be subject to an annual limitation
due to the ownership change limitations imposed by the tax law.

The net operating losses will expire at various dates commencing in the
year 2000 through 2011.

The deferred tax asset consists of the future benefit of net operating
loss carry forwards. A valuation allowance limits the recognition of the
benefit of deferred tax assets until realization is reasonably assured
by future profitability.

The following is a summary of deferred taxes:
<TABLE>
<S> <C>
Deferred asset 226,300
Valuation allowance (226,300)
--------
0
========
</TABLE>
27

<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

March 31, 1996

(continued)

NOTE 6 FOREIGN SALES:
--------------

Sales by product type are classified under domestic and foreign sales
for the period as follows:
<TABLE>
<CAPTION>
Six Month Period Ended
March 31
--------------------------
Product Type 1996 1995
- ------------ ---- ----
<S> <C> <C>
Personal Health Care
Domestic sales................... 29,333 0
Foreign sales.................... 111,000 15,000
------- ------
Total......... 140,333 15,000
------- ------
Laboratory Supplies
Domestic sales................... 5,000 4,000
Foreign sales.................... 95,000 0
------- ------
Total......... 100,000 4,000
------- ------
Domestic sales................... 34,333 4,000
Foreign sales.................... 206,000 15,000
------- ------
Total sales... 240,333 19,000
======= ======
</TABLE>

28
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

FINANCIAL STATEMENTS

September 30, 1995, 1994, and 1993
(with accountants' report thereon)

<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.
FINANCIAL STATEMENTS

September 30, 1995, 1994 and 1993

<TABLE>
<CAPTION>
<S> <C>
Accountants' Report 1

Financial Statements

Balance Sheets - Assets 2

Balance Sheets - Liabilities & Stockholders' Equity 3

Statements of Operations 4

Statement of Stockholders' Equity 5

Statements of Cash Flows 6

Notes to the Financial Statements 7

</TABLE>

<PAGE>

M. S. FINKEL & CO.
CERTIFIED PUBLIC ACCOUNTANTS

210 Grant Street (412) 393-0805
Suite I (310) 473-4700
Pittsburgh, PA 15219

ACCOUNTANTS' REPORT

To The Board of Directors and Stockholders
of Allied Biotechnology International Inc.

We have audited the accompanying balance sheet of Allied Biotechnology
International Inc. at September 30, 1995, 1994 and 1993 (restated) and the
related statements of income, stockholders' equity and cash flows for the years
then ended. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of Allied Biotechnology
International Inc. for the years listed above, and the results of its
operations, stockholder's equity and cash flows for the years then ended, in
conformity with generally accepted accounting principles.

- -----------------------------
Merle S. Finkel
Pittsburgh, Pennsylvania
August 30, 1996

31
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

BALANCE SHEETS
RESTATED

ASSETS

September 30
-----------------------------------------
1995 1994 1993
-----------------------------------------
<S> <C> <C> <C>

Current Assets
- --------------

Cash 4,981 681 2,257
Loan receivable 25,244 0 0
Prepaid expenses 0 0 9,100
--------- ------- -------
Total Current Assets 30,225 681 11,357
--------- ------- -------

Furniture and Equipment
- -----------------------

Furniture and Equipment 27,167 26,117 18,617
Less: Accumulated depreciation (9,154) (5,130) (1,104)
--------- ------- -------

Net Furniture and Equipment 18,013 20,987 17,513
--------- ------- -------

Other Assets
- ------------

Real estate (Note 1(e)) 225,000 0 0
Distribution rights, net 1,425,000 0 0
--------- ------- -------

Total Other Assets 1,650,000 0 0
--------- ------- -------

Total Assets 1,698,238 21,668 28,870
========= ======= =======

</TABLE>

The accompanying notes are an integral part
of these financial statements

32
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

BALANCE SHEETS
RESTATED

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
September 30
----------------------------------------
1995 1994 1993
--------- -------- --------
<S> <C> <C> <C>
Current Liabilities
- -------------------

Accounts payable 15,264 0 0
Note payable (Note 3) 29,000 48,023 78,489
--------- -------- --------

Total Current liabilities 44,264 48,023 78,489
--------- -------- --------

Long-Term Liabilities
- ---------------------

Note payable (note 3) 40,000 0 0
--------- -------- --------

Total Liabilities 84,264 48,023 78,489
--------- -------- --------

Stockholders' Equity
- --------------------

Common stock, par value $.001
per share; authorized
25,000,000 shares; issued and
outstanding 11,885,465 at
September 30,1995; 10,212,815
at September 30,1994; and
10,060,490 at September 30,
1993. 11,885 10,212 10,060
Additional paid in capital 2,078,224 310,203 199,605
Accumulated deficit (476,135) (346,770) (259,284)
--------- -------- --------

Total Stockholders' equity 1,613,974 (26,355) (49,619)
--------- -------- --------

Total Liabilities and
Stockholders' equity 1,698,238 21,668 28,870
========= ======== ========

</TABLE>
The accompanying notes are an integral part
of these financial statements.

33
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

STATEMENTS OF OPERATIONS
RESTATED

<TABLE>
<CAPTION>
September 30,
-------------------------------------
1995 1994 1993
----------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Sales 100,450 0 1,175
---------- ---------- ----------

Cost of Goods Sold (18,247) 0 0
---------- ---------- ----------
Gross Profit 82,203 0 1,175
---------- ---------- ----------
Expenses:
Amortization of distribution rights 75,000 0 0
Research and development 0 0 200,000
Depreciation expense 4,024 4,026 1,104
Lab supplies 12,487 12,403 4,736
Marketing expenses 10,227 17,187 6,375
Office expenses 19,580 6,526 515
Office staff 7,994 0 0
Other expenses 9,222 9,298 3,106
Printing 15,111 0 0
Professional fees 11,470 19,117 26,650
Rent 40,866 10,323 5,653
Telephone and utilities 2,475 1,489 1,266
---------- ---------- ----------
Total Expenses 208,456 80,369 249,405
---------- ---------- ----------
Net (Loss) from operations (126,253) (80,369) (248,230)
---------- ---------- ----------
Interest (Expense) (3,112) (7,117) (1,989)
---------- ---------- ----------
Net (Loss) (129,365) (87,486) (250,219)
---------- ---------- ----------
Weight Average Number
of Shares Outstanding 11,067,675 10,158,680 6,000,750
========== ========== =========

Net (Loss) Per Share $(.01) Nil (.04)
========== ========== =========
</TABLE>

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

34
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

STATEMENT OF STOCKHOLDERS' EQUITY
INCEPTION TO SEPTEMBER 30, 1995

RESTATED
<TABLE>
<CAPTION>
Common Stock
------------------- Paid In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
---------- ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
October 24,1984
1,750 shares issued
to incorporators;
on 6/6/88 a stock
split of 3,429 for 1 6,000,750 6,001 1,499 7,500

September 30,1985 Net loss (7,483) (7,483)
September 30,1986 Net loss (18) (18)
September 30,1987 Net loss (1,528) (1,528)
September 30,1988 Capital
contribution 10,665 10,665
September 30,1988 Net loss (18) (18)
September 30,1989 Net loss (18) (18)
September 30,1990 Net loss -0- -0-
September 30,1991 Net loss -0- -0-
September 30,1992 Net loss -0- -0-
---------- ------ ---------- ----------- ------------
Balance September 30, 1992 6,000,750 6,001 12,164 ( 9,065) 9,100

Common stock issued
September 30, 1994 Net loss (87,486) (87,486)
---------- ------ ---------- ----------- ------------
Balance, September 30,1994 10,212,815 10,212 310,203 (346,770) (26,355)
Common stock sold 722,650 723 43,971 44,694
Common stock issued for
distributorship rights 500,000 500 1,499,500 1,500,000
Common stock issued for land 450,000 450 224,550 225,000
September 30, 1995 Net loss (129,365) (129,365)
---------- ------ ---------- ----------- ------------
Balance, September 30, 1995 11,885,465 11,885 2,078,224 (476,135) 1,613,974
========== ====== ========== =========== ============
</TABLE>
The accompanying notes are an integral part
of these financial statements.

35
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

STATEMENTS OF CASH FLOWS
RESTATED
<TABLE>
<CAPTION>
September 30,
------------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Loss (129,365) (87,486) (250,219)
Adjustments to reconcile net loss to
net cash used in operating activities:
Amortization and depreciation 79,024 4,026 1,104
Decrease in prepaid expenses 0 9,100 0
Increase in accounts payable 15,264 0 0
-------- -------- --------
NET CASH USED IN OPERATING ACTIVITIES: (35,077) (74,360) (249,115)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) in equipment (1,050) (7,500) (218,617)
-------- -------- --------
CASH FLOWS USED IN INVESTING ACTIVITIES: (1,050) (7,500) (218,617)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes payable 20,977 (30,466) 78,489
Sale of common stock 44,694 110,750 191,500
(Increase) in loans receivable (25,244) 0 0
-------- -------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES: 40,427 80,284 269,989
-------- -------- --------
NET INCREASE IN CASH 4,300 (1,576) 2,257
CASH, BEGINNING OF PERIOD 681 2,257 0
-------- -------- --------
CASH, END OF PERIOD 4,981 681 2,257
======== ======== ========
</TABLE>
The accompanying notes are an integral part
of these financial statements.

36
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

September 30, 1995

Note 1 Summary of Significant Accounting Policies:
------------------------------------------

This summary of significant accounting policies of ALLIED BIOTECHNOLOGY
INTERNATIONAL INC. (a development stage company) in presented to assist in
understanding the Company's financial statements. The financial statements and
notes are representations of the Company's management, which is responsible for
their integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.

(a) Organization and Business Nature:
---------------------------------

Allied Biotechnology International Inc. was incorporated in the State of
Nevada in October, 1984. The Corporation changed its name from Primary
Metals Inc. on August 16, 1993 to Allied Biotechnology International Inc.
The company intends to develop and manufacture genetically engineered
products for the healthcare industry. The Company currently markets
immunodiagnostic kits for hospitals and physicians' offices, laboratories
and the general public The company was a development stage company until
the September 30, 1995 fiscal year, at which time its planned principal
operations have commenced and there has been significant revenue therefrom.

(b) Depreciation and Amortization:
------------------------------

Depreciation is provided by the straight-line method at rates calculated to
amortize cost over the estimated useful lives of respective assets. Upon
sale or retirement of the respective assets, the related cost and
accumulated depreciation are eliminated from the accounts, and gains or
losses are reflected in income. Repair and maintenance expenditures, not
anticipated to extend original asset lives, are charged to income as
incurred.

Laboratory and office equipment are depreciated using the straight line
method over the following estimated useful lives:
Laboratory Equipment 5 years
Office Equipment 5-7 years

37
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

September 30, 1995
(continued)

(d) Intellectual Property:
----------------------

The company acquired technical and marketing rights from Dc Ferris
Laboratories, Inc. for a line of medical diagnostic products developed in
exchange for 100,000 shares of common stock. The transaction was valued
at $100,000.

The company also purchased for the sum of $100,000 intellectual property
concerning a procedure for cancer imaging and cancer therapy. (See Note 3)

The value of the intellectual property costs were expensed in the year of
acquisition.

(e) Real Property:
--------------

The Company has acquired 180 acres of agricultural property in Bakersfield,
California valued at $225,000 in exchange for 450,000 shares of the
Company's stock. The property will be used to grow and field test a
biopesticide plant extract that has a beneficial effect in protecting
commercial crops from soil parasites.

(f) Distribution Rights:
--------------------

The Company has acquired the exclusive distribution rights for healthcare
products in Korea in exchange for 500,000 shares of the Company's common
stock. The distribution network in Korea currently has average monthly
sales of $100,000, and sales of the Company's over the counter products are
expected to increase the monthly sales volume.

The distribution agreement, effective July 1, 1995, is for a period of five
years. Management values the distribution rights at $1,500,000 based on
the shares trading at $3.00 each. The cost is amortized over five years,
the life of the Agreement, on the straight line basis.

(g) Fiscal Year:
-----------

The Company operates on a September 30 fiscal year.

(h) Basis of Operation:
------------------

The Company prepares its financial statements and federal income taxes on
the accrual basis of accounting.

38
<PAGE>

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENT

September 30, 1995
(continued)

Note 2 Stockholders' Equity:
---------------------

During fiscal 1993, the company acquired the assets of Recombinant
Products International Inc., a California corporation that was
developing genetically engineered products for the healthcare industry,
in exchange of 3,357,365 shares of the Company's common stock.

The stock issuance was agreed upon by the shareholders of the Company
and Recombinant without the assignment of any valuation to the Company.
All research and development was expensed by Recombinant.

Note 3 Note Payable:
------------

a) A $100,000 promissory note was issued to an officer and stockholder of
the Company in exchange for intellectual property regarding the
procedure for cancer imaging and cancer therapy. Although the note does
not call for specific payments, management expects to fully pay the loan
within the next fiscal year.

b) A $40,000 loan was obtained on March 29, 1995 which was secured by the
180 acres of land. The note provides for monthly interest only payments
through to its due date of April 15, 1998 at which time a balloon
payment of the principal balance is due. The interest rate on the note
is fifteen (15%) percent per annum.

39
<PAGE>

PART III

ITEM 1. INDEX TO EXHIBITS.

1. Certificate of Incorporation "Partners America, Ltd. Inc." p. 41
2. Articles of Incorporation "Partners America, Ltd. Inc." p. 42
3. Amendment for name change to "Primary Metals, Inc." p. 44
4. Amendment for name change to "Allied Biotechnology International, Inc.
p. 45
5. By-Laws of "Allied Biotechnology International, Inc." p. 46
6. Allied Biotechnology International, Inc. Specimen Share Certificate. p. 58
7. Specimen Distribution Contract. p. 59

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

ALLIED BIOTECHNOLOGY INTERNATIONAL, INC.
(Registrant)

Date 09/30/96 By /s/ Henry J. Smith
----------- ------------------------------------
Henry J. Smith, President
Allied Biotechnology International, Inc.

40
<PAGE>

STATE OF NEVADA (seal) DEPARTMENT OF STATE

I, WM. D. SWACKHAMER, Secretary of State of the State of Nevada, do hereby
certify that

PARTNERS AMERICA LTD. INC.

did on the twenty-fourth day of October, 1984 file in this office the original
Articles of Incorporation: that said Articles are now on file and of record in
the office of the Secretary of State of the State of Nevada, and further, that
said Articles contain all the statement of facts required by the law of the said
State of Nevada.

IN WITNESS WHEREOF, I have set my hand and affixed the Great Seal of State, at
my office in Carson City; Nevada, this Twenty-fourth day of October, A.D. 1984.

WM.Swackhamer
Secretary of State

41
<PAGE>

THE OFFICE OF THE
SECRETARY OF STATE
STATE OF NEVADA
OCT 24 1984
ARTICLES OF INCORPORATION OF

PARTNERS AMERICA LTD INC.

FIRST: The name of this corporation shall be

PARTNERS AMERICA, LTD INC.

SECOND: The place where its principal office is to be located is 605 Oakmount
Avenue, in the City of Las Vegas, County of Clark, State of Nevada, and the
resident agent in charge thereof is Pauline Wallach, whose address is 605
Oakmount Avenue, Las Vegas, Nevada, but this corporation may maintain an office
or offices in such other place or places as may be from time to time, fixed by
its Board of Directors or as may be fixed by the Bylaws of the corporation.

THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the Nevada Revised Statutes.

FOURTH: The total number of shares of stock which the corporation shall have
authority to issue is Two Thousand Five Hundred (2,500), Common; all of such
shares are without par value.

FIFTH: The capital stock of the corporation shall not be subject to assessment.

SIXTH: The members of the governing Board of this corporation shall be styled
"Directors", and the number of its first Board of Directors shall be one (1);
provided, however, that the Board of Directors may at any meeting by resolution,
increase the number of such directors or decrease their number in such manner as
shall be provided by the Bylaws of this corporation.

42
<PAGE>

The name and address of the Director is as follows:

Robert Dultz
Post Office Box 4500
Palm Springs, California 92263

The initial number of stockholders shall be less than three.

SEVENTH: The name and address of the original incorporator is as follows:

NAME ADDRESS
---- -------
Robert Dultz Post Office Box 4500
Palm Springs, California 92263

EIGHTH: The period of the existence of said corporation shall be unlimited.

NINTH: The private property of the stockholders, directors and officers shall
not be subject to the payment of corporate debts to any extent whatever.

TENTH: The corporation reserves the right to amend, alter or repeal any
provisions contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred on stockholders herein
are granted subject to this reservation.

IN WITNESS WHEREOF, I have hereunto set my hand and seal this 22nd day of
October, 1984.

Robert Dultz
STATE OF CALIFORNIA )
)SS.
COUNTY OF LOS ANGELES )

BE IT REMEMBERED, that on this 22nd day of October, 1984, before me, a Notary
Public in and for the said County and State, personally appeared Robert Dultz,
known to me to be the person described in and who executed the foregoing
instrument, who acknowledged to me that he executed the same freely and
voluntarily and for the uses and purposes therein mentioned.

Charles Baclet
NOTARY PUBLIC-CALIFORNIA

43
<PAGE>

CERTIFICATE OF AMENDMENT

ARTICLES OF INCORPORATION

PARTNERS AMERICA LTD., INC.

We the undersigned as Carl W. 0'Baugh, president and Robert Dultz,
Secretary of Partners America Ltd., Inc. do hereby certify:

That the Board of Directors of said corporation at a meeting duly
convened and held on the 22nd day of January 1987, adopted a resolution to amend
the original Articles as follows:

Article I shall be amended to read as follows:

PRIMARY METALS, INC.

The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 1,750; that the said
change and amendment has been consented to and approved by a majority vote of
the stockholders holding at least a majority of each class of stock outstanding
and entitled to vote thereon.

Signed by:
Carl W. O'Baugh, President

Robert Dultz, Secretary

STATE OF CALIFORNIA
(Individual Acknowledgment)

County of Riverside
On this 20 day of June in the year 1988 , before me, the undersigned, a Notary
Public in and for said County and State, personally appeared CARL W. O'BAUGH AND
ROBERT DULTZ -personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to this
instrument and acknowledged that they executed it.

WITNESS my hand and official seal.

NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE (NOTARY SEAL)

44
<PAGE>

FILED

IN THE OFFICE OF THE

SECRETARY OF STATE

STATE OF NEVADA
OCT 24 1984
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
PRIMARY METALS, INC.

We the undersigned as President and Secretary of Primary Metals do hereby
certify:

That the Board of Directors of said corporation at a meeting duly convened and
held on the 5th day of May, 1993, adopted a resolution to amend the original
Articles of Incorporation as follows:

ARTICLE ONE SHALL BE AMENDED TO READ AS FOLLOWS:
The new name of this corporation shall be:

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.

The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 6,000,750; that the said change
and amendment has been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.

Signed by:
Henry J. Smith, President

Geraldine V. Maestas, Secretary

STATE OF CALIFORNIA COUNTY OF LOS ANGELES

On 10 Aug, 1993, personally appeared before me a Notary Public, Henry J. Smith
and Geraldine Maestas, who acknowledged that they executed the above instrument.
STAMP OR SEAL OF NOTARY.
Signature of Notary Public
AUG 13 1993
Secretary of State

45
<PAGE>

IN A MEETING OF STOCKHOLDERS ON 5-5-1993,
APPROVED AMENDED BY LAWS
OF
ALLIED BIOTECHNOLOGY INTERNATIONAL INC.
(A NEVADA CORPORATION)
ARTICLE I
MEETING OF STOCKHOLDERS

SECTION 1.
The annual meeting of the stockholders of the Company shall be held at its
principal headquarters on the 24th day of October in each year, if not a legal
holiday, and if a legal holiday, then on the next succeeding day not a legal
holiday, or at a location and time as designated by the Board of Directors
evidenced by their notice of meeting, for the purpose of electing directors of
the company to serve during the ensuing year and for the transaction of such
other business as may be brought before the meeting.

At least five days' written notice specifying the time and place, when and
where, the annual meeting shall be convened, shall be mailed in a United States
Post Office addressed to each of the stockholders of record at the time of
issuing the notice at his or her, or its, address last known, as the same
appears on the books of the company.

Nevertheless, a failure to give such notice, or any irregularity in such notice,
shall not affect the validity of annual meetings or any of the proceedings had
at such meeting, and in such event these By-laws shall be, and shall be deemed
to be, sufficient notice of-such meeting without requirement of further notice.

SECTION 2.
Special meetings of the stockholders may be held at the office of the company in
the State of Nevada, or elsewhere, whenever called by the President, or by the
Board of Directors, or by vote of, or by an instrument in writing signed by the
holders of 51% of the issued and outstanding capital stock of the company. At
least ten days' written notice of such meeting, specifying the day and hour and
place, when and where such meeting shall be convened, and the objects for
calling the same, shall be mailed in the United States Post Office, addressed to
each of the stockholders of record at the time of issuing the notice, at his or
her or its address last known, as the same appears on the books of the company.
If all the stockholders of the company shall waive notice of special meeting, no
notice of such meeting shall be required, and whenever all the stockholders
shall meet in person or by proxy, such meeting shall be valid for all purposes
without call or notice and at such meeting any corporate action may be taken.

46
<PAGE>

The written certificate of the officer or officers calling any special meeting
setting forth the substance of the notice,, and the time and place of the
mailing of the same to the several stockholders, and the respective addresses to
which the same were mailed, shall be prima facie evidence of the manner and fact
of the calling and giving such notice.

If the address of any stockholder does not appear upon the books of the company,
it will be sufficient to address any notice to such stockholder at Las Vegas,
Nevada.

SECTION 3.
All business lawful to be transacted by the stockholders of the company, may be
transacted at any special meeting or at any adjournment thereof. Only such
business,, however, shall be acted upon at special meeting of the stockholders
as shall have been referred to in the notice calling such meetings, but at any
stockholders' meeting at which all of the outstanding capital stock of the
company is represented, either in person or by proxy, any lawful business may be
transacted, and such meeting shall be valid for all purposes.

SECTION 4.
At all stockholders' meetings the holders of Fifty-one percent (51%) in the
amount of the entire issued and outstanding capital stock of the company, shall
constitute a quorum for all the purposes of such meetings.

If the holders of the amount of stock necessary to constitute a quorum shall
fail to attend, in person or by proxy, at the time and place fixed by these
Bylaws for any annual meeting, or fixed by a notice as above provided for a
special meeting, a majority in interest of the stockholders present in person or
by proxy may adjourn from time to time without notice other than by announcement
at the meeting, until holders of the amount of stock requisite to constitute a
quorum shall attend. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted as
originally called.

SECTION 5.
At each meeting of the stockholders every stockholder shall be entitled to vote
in person or by his duly authorized proxy appointed by instrument in writing
subscribed by such stockholder or by his duly authorized attorney. Each
stockholder shall have one vote for each share of stock standing registered in
his or her or its name on the books of the corporation, ten days preceding the
day of such meeting. The votes for directors, and upon demand by any
stockholder, the votes upon any question before the meeting, shall be by viva
voce.

<PAGE>

At each meeting of the stockholders, a full, true and complete list, in
alphabetical order, of all the stockholders entitled to vote at such meeting,
and indicating the number of shares held by each, certified by the Secretary of
the Company, shall be furnished, which list shall be prepared at least ten days
before such meeting, and shall be open to the inspection of the stockholders, or
their agents or proxies, at the place where such meeting is to be held, and for
ten days prior thereto. only the persons in whose names shares of stock are
registered on the books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders so furnished, shall be
entitled to vote at such meeting. Proxies and powers of attorney to vote must be
filed with the Secretary of the Company before an election or a meeting of the
stockholders, or they cannot be used at such election or meeting.

SECTION 6.
At each meeting of the stockholders the polls shall be opened and closed; the
proxies and ballots issued, received, and be taken in charge of, for the purpose
of the meeting, and all questions touching the qualifications of voters and the
validity of proxies, and the acceptance or rejection of votes, shall be decided
by two inspectors. Such inspectors shall be appointed at the meeting by the
presiding officer of the meeting.

SECTION 7
At the stockholders' meetings, the regular order of business shall be as
follows:

1. READING AND APPROVAL OF THE MINUTES OF PREVIOUS MEETING OR
MEETINGS;

2. REPORTS OF THE BOARD OF DIRECTORS, THE PRESIDENT, TREASURER AND
SECRETARY OF THE COMPANY IN THE ORDER NAMED;

3. REPORTS OF COMMITTEE;

4. ELECTION OF DIRECTORS;

5. UNFINISHED BUSINESS;

6. NEW BUSINESS;

7. ADJOURNMENT;

ARTICLE II
DIRECTORS AND THEIR MEETINGS

SECTION 1.
The Board of Directors of the company shall consists of 1 to 15 persons who
shall be chosen by the stockholders annually, at the annual meeting of the
Company, and who shall hold office for one year, and until their successors are
elected and qualify.

<PAGE>

SECTION 2.
When any vacancy occurs among the Directors by death, resignation,
disqualification or other cause, the stockholders, at any regular or special
meeting, or at any adjourned meeting thereof, or the remaining Directors, by the
affirmative vote of a majority thereof, shall elect a successor to hold office
for the unexpired portion of the term of the Director whose place shall have
become vacant and until his successor shall have been elected and shall qualify.

SECTION 3.
Meeting of the Directors may be held at the principal office of the company in
the State of Nevada, or elsewhere, at such place or places as the Board of
Directors may, from time to time, determine.

SECTION 4.
Without notice or call, the Board of Directors shall hold its first annual
meeting for the year immediately after the annual meeting of the stockholders or
immediately after the election of Directors at such annual meeting.

Regular meetings of the Board of Directors shall be held in its principal
headquarters on the 24th day of October in each year, if not a legal holiday,
and if a legal holiday, then on the next succeeding day not a legal holiday, or
at a location and time as designated by the Board of Directors. Notice of such
regular meetings shall be mailed to each Director by the Secretary at least five
days previous to the day fixed for such meetings, but no regular meeting shall
be held void or invalid if such notice is not given, provided the meeting is
held at the time and place fixed by these By-laws for holding such regular
meetings.

Special meetings of the Board of Directors may be held on the call of the
President or Secretary on at least five day's notice by mail to Directors.

Any meeting of the Board, no matter where held, at which all of the members
shall be present, even though without or of which notice shall have been waived
by all absentees, provided a quorum shall be present, shall be valid for all
purposes unless otherwise indicated in the notice calling the meeting or in the
waiver of notice.

Any and all business may be transacted by any meeting of the Board of Directors,
either regular or special.

SECTION 5.
A majority of the Board of Directors in office shall constitute a quorum for the
transaction of business, but if at any meeting of the Board there be less than a
quorum present, a majority of those present may adjourn from time to time, until
a quorum shall be present, and no notice of such adjournment shall be required.
The Board of Directors may prescribe rules not in conflict with these By-laws
for the conduct of its business; provided, however,

49
<PAGE>

that in the fixing of salaries of the officers of the corporation, the unanimous
action of all of the Directors shall be required.

SECTION 6.
A Director need not be a stockholder of the corporation.

SECTION 7.
The Directors shall be allowed and paid all necessary expenses incurred in
attending any meeting of the
Board, but shall not receive any compensation for their services as Directors
until such time as the
company is able to declare and pay dividends on its capital stock.

SECTION 8.
The Board of Directors shall make a report to the stockholders at annual
meetings of the stockholders of the condition of the company, and shall, on
request, furnish each of the stockholders with a true copy thereof.

The Board of Directors in its discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders called for
the purpose of considering any such contract or act, which, if approved, or
ratified by the vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting, provided that a
lawful quorum of stockholders be there represented in person or by proxy, shall
be valid and binding upon the corporation and upon all the stockholders thereof,
as if it had been approved or ratified by every stockholder of the corporation.

SECTION 9.
The Board of Directors may, by resolution passed by a majority of the whole
Board, designate an Executive Committee. This Committee shall consist of two or
more members besides the President of the company, who by virtue of his office,
shall be a member and the chairman thereof. The Committee shall in the interim
between the meetings of the Board, exercise all powers of that body in
accordance with the general policy of the corporation and under the direction of
the Board of Directors. It shall also attend to and supervise all the financial
operations of the Company, and shall examine and audit all the accounts of the
company at the close of each fiscal year, and at such other times as it may deem
necessary. The Secretary of the company shall be the Secretary of the Committee
and shall attend its meetings, and its meetings shall be held on the call of the
President. All members of the Committee must be given at least two days' notice
of meetings either by mail or telegraph or by personal communication, either
over the telephone or otherwise. A majority of the members of the Committee
shall constitute a quorum. The Committee shall keep due records of all meetings
and actions of the Committee, and such records shall at all times be open to the
inspection of any Director.

50
<PAGE>

SECTION 10.
The Board of Directors is invested with the complete and unrestrained authority
in the management of all the affairs of the company, and is authorized to
exercise for such purpose as the General Agent of the Company, its entire
corporate authority.

SECTION 11.
The regular order of business at meetings of the Board of Directors shall be as
follows:

l. READING AND APPROVAL OF THE MINUTES OF ANY PREVIOUS MEETING OR
MEETINGS;

2. REPORTS OF OFFICERS AND COMMITTEEMEN;

3. ELECTION OF OFFICERS;

4. UNFINISHED BUSINESS;

5. NEW BUSINESS;

6. ADJOURNMENT

ARTICLE III
OFFICERS AND THEIR DUTIES

SECTION 1.
The Board of Directors, at its first meeting after the annual meeting of
stockholders, shall elect a President, a Vice President, a Secretary and a
Treasurer, to hold office for one year next coming, and until their successors
are elected and qualify. The President and Vice President shall be members of
the Board of Directors. The Treasurer and Secretary need not be Directors; the
offices of the Secretary and Treasurer may be held by one person.

Any vacancy in any of said offices may be filled by the Board of Directors.

The Board of Directors may from time to time, by resolution, appoint such
additional Vice Presidents and additional Assistant Secretaries, Assistant
Treasurer and Transfer Agents of the company as it may deem advisable; prescribe
their duties, and fix their compensation, and all such appointed officers shall
be subject to removal at any time by the Board of Directors. All officers,
agents and factors of the company shall be chosen and appointed in such manner
and shall hold their office for such terms as the Board of Directors may be
resolution prescribe.

SECTION 2.
The President shall be the executive officer of the company and shall have the
supervision and, subject to the control of the Board of Directors, the direction
of the Company's affairs, with full power to execute all resolutions and orders
of the Board of Directors not

<PAGE>

especially entrusted to some other officer of the company. He shall be a member
of the Executive Committee, and the Chairman thereof; he shall preside at all
meetings of the Board of Directors, and at all meetings of the stockholders, and
shall sign the Certificates of Stock issued by the Company, and shall perform
such other duties as shall be prescribed by the Board of Directors.

SECTION 3.
The Vice President shall be vested with all the powers and perform all the
duties of the President in his absence or inability to act, including the
signing of the Certificates of Stock issued by the company, and he shall so
perform such other duties as shall be prescribed by the Board of Directors.

SECTION 4.
The Treasurer shall have the custody of all the funds and securities of the
company. When necessary or proper he shall endorse on behalf of the company for
collection checks, notes, and other obligations; he shall deposit all moneys to
the credit of the company in such bank or banks or other depository as the Board
of Directors may designate; he shall sign all receipts and vouchers for payments
made by the company, except as herein otherwise provided; he shall jointly with
such other officer as shall be designated by these By-laws, sign all checks made
by the company, and shall pay out and dispose of the same under the direction of
the Board of Directors. He shall sign with the President all bills or exchange
and promissory notes of the company; he shall also have the care and custody of
the stocks, bonds, certificates, vouchers, evidences of debts, securities, and
such other property belonging to the company as the Board of Directors shall
designate; he shall sign all papers required by law or by those By-laws or the
Board of Directors to be signed by the Treasurer. Whenever required by the Board
of Directors, he shall render a statement of his cash account; he shall enter
regularly in the books of the company to be kept by him for the purpose, full
and accurate accounts of all moneys received and paid by him on account of the
company. He shall at all reasonable times exhibit the books of account to any
Directors of the company during business hours, and he shall perform all acts
incident to the position of Treasurer subject to the control of the Board of
Directors.

The Treasurer shall, if required by the Board of Directors, give bond to the
company conditioned for the faithful performance of all his duties as Treasurer
in such sum, and with such security as shall be approved by the Board of
Directors, the expense of such bond to be borne by the company.

SECTION 5.
The Board of Directors may appoint an Assistant Treasurer who shall have such
powers and perform such duties as may be prescribed for him by the Treasurer of
the company or by the Board of Directors, and the Board of Directors shall
require the Assistant Treasurer to give a bond to the company in such sum and
with such security as it shall approve, and conditioned for the faithful
performance of his duties as Assistant Treasurer, the expense of such bond to be
borne by the company.

<PAGE>

SECTION 6.
The Secretary shall keep the Minutes of all meetings of the Board of Directors
and the Minutes of all meetings of the stockholders and of the Executive
Committee in books provided for that purpose. He shall attend to the giving and
serving of all notices of the company; he may sign with the President or a Vice
President, in the name of the Company, all contracts authorized by the Board of
Directors or Executive Committee; he shall affix the corporate seal of the
company thereto when so authorized by the Board of Directors or Executive
Committee; he shall have the custody of the corporate seal of the company; he
shall affix the corporate seal to all certificates of stock duly issued by the
company; he shall have charge of the stock Certificate Books, Transfer Books and
Stock Ledgers, and such other books and papers as the Board of Directors or the
Executive Committee may direct, all of which shall at all reasonable times be
open to the examination of any Director upon application at the office of the
company during business hours, and he shall, in general, perform all the duties
incident to the office of Secretary.

SECTION 7.
The Board of Directors may appoint an Assistant Secretary who shall have such
powers and perform such duties as may be prescribed for him by the Secretary of
the company or by the Board of Directors.

SECTION 8.
Unless otherwise ordered by the Board of Directors, the President shall have
full power and authority in behalf of the company to attend and to act and to
vote at any meetings of the stockholders of any corporation in which the company
may hold stock, and at any such meetings, shall possess and may exercise any and
all rights and powers incident to the ownership of such stock, and which as the
new owner thereof, the company might have possessed and exercised if present.
The Board of Directors, by resolution, from time to time, may confer like powers
on any person or persons in place of the President to represent the company for
the purposes in this section mentioned,

ARTICLE IV
CAPITAL STOCK

SECTION 1.
The capital stock of the company shall be issued in such manner and at such
times and upon such conditions as shall be prescribed by the Board of Directors.

SECTION 2.
Ownership of stock in the company shall be evidenced by certificates of stock in
such forms as shall be prescribed by the Board of Directors, and shall be under
the seal of the company and signed by the President or the Vice President and
also by the Secretary or by an Assistant Secretary.

53
<PAGE>

All certificates shall be consecutively numbered; the name of the person owing
the shares represented thereby with the number of such shares and the date of
issue shall be entered on the company's books.

No certificates shall be valid unless it is signed by the President or Vice
President and by the Secretary or Assistant Secretary.

All certificates surrendered to the company shall be canceled and no new
certificate shall be issued until the former certificate for the same number of
shares shall have been surrendered or canceled.

SECTION 3.
No transfer of stock shall be valid as against the company except on surrender
and cancellation of the certificate therefor, accompanied by an assignment or
transfer by the owner therefor, made either in person or under assignment, a new
certificate shall be issued therefor.

Whenever any transfer shall be expressed as made for collateral security and not
absolutely, the same shall be so expressed in the entry of said transfer on the
books of the company.

SECTION 4.
The Board of Directors shall have power and authority to make all such rules and
regulations not inconsistent herewith as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of the capital stock
of the company.

The Board of Directors may appoint a transfer agent and a registrar of transfers
and may require all stock certificates to bear the signature of such transfer
agent and such registrar of transfer.

SECTION 5.
The Stock Transfer Books shall be closed for all meetings of the stockholders
for the period of ten days prior to such meetings and shall be closed for the
payment of dividends during such periods as from time to time may be fixed by
the Board of Directors, and during such periods no stock shall be transferable.

SECTION 6.
Any person or persons applying for a certificate of stock in lieu of one alleged
to have been lost or destroyed, shall make affidavit or affirmation of the fact,
and shall deposit with the company an affidavit Whereupon, at the end of six
months after the deposits of said affidavit and upon such person or persons
giving Bond of Indemnity to the company with surety to be approved by the Board
of Directors in double the current value of the stock against any damage, loss
or inconvenience to the company, which may or can arise in consequence of a new
or duplicate certificate being issued in lieu of the one lost or missing,

54
<PAGE>

the Board of Directors may cause to be issued to such persons or person a new
certificate, or a duplicate of the certificate so lost or destroyed. The Board
of Directors may, in its discretion, refuse to issue such new or duplicate
certificate save upon the order of some court having jurisdiction in such
matter, anything herein to the contrary notwithstanding.

ARTICLE V
OFFICES AND BOOKS

SECTION 1.
The principal office of the corporation in Nevada shall be at Agent of Records
address, Nevada, and the company may have a principal office in any other state
or territory as the Board of Directors may designate.

SECTION 2.
The Stock and Transfer Books of the company shall be kept at its transfer
agent's office, for the inspection of all who are authorized or have the right
to see the same, and for the transfer of stock. All other books of the company
shall be kept at such places as may be prescribed by the Board of Directors.

A copy of the Bylaws, duplicate Stock ledger, and Articles of Incorporation of
the company shall be kept at its principal headquarters in the State of Nevada,
and shall be subject to the inspection of any of the stockholders at its annual
shareholders meeting if requested.

ARTICLE VI
MISCELLANEOUS

SECTION 1.
The Board of Directors shall have power to reserve over and above the capital
stock paid in, such an amount in its discretion as it may deem advisable to fix
as a reserve fund, and may, from time to time, declare dividends from the
accumulated profits of the company in excess of the amounts so reserved, and pay
the same to the stockholders of the company, and may also, if it deems the same
advisable, declare stock dividends of the unissued capital stock of the company.

SECTION 2.
No agreement, contract or obligation (other than checks in payment of
indebtedness incurred by authority of the Board of Directors) involving the
payment of moneys or the credit of the company for more than Ten Thousand
Dollars, shall be made without the authority of the Board of Directors, or of
the Executive Committee acting as such.

<PAGE>

SECTION 3.
Unless otherwise ordered by the Board of Directors, all agreements and contracts
shall be signed by the President and the Secretary in the name and on behalf of
the company, and shall have the corporate seal thereto attached.

SECTION 4.
All moneys of the corporation shall be deposited when and as received by the
Treasurer in such bank or banks or other depository as may from time to time be
designated by the Board of Directors, and such deposits shall be made in the
name of the Company.

SECTION 5.
No note, draft, acceptance, endorsement or other evidence of indebtedness shall
be valid or against the company unless the same shall be signed by the President
or a Vice-President, and attested by the Secretary or an Assistant Secretary, or
signed by the Treasurer or an Assistant Treasurer, and countersigned by the
President, Vice-President, or Secretary except that the Treasurer or an
Assistant Treasurer may, without countersignature, sign payroll checks and make
endorsements for deposit to the credit of the company in all its duly authorized
depositories. No check or order for money shall be signed in black by more than
one officer of the company.

SECTION 6.
No loan or advance of money shall be made by the company to any stockholder or
officer therein, unless the Board of Directors shall otherwise authorize.

SECTION 7.
No director nor executive officer of the company shall be entitled to any salary
or compensation for any services performed for the company, unless such salary
or compensation shall be fixed by resolution of the Board of Directors, adopted
by the unanimous vote of all of the Directors voting in favor thereof.

SECTION 8.
The company may take, acquire, hold, mortgage, sell, or otherwise deal in stock
or bonds or securities of any other corporation, if and as often as the Board of
Directors shall so elect.

SECTION 9.
The Directors shall have power to authorize and cause to be executed, mortgages
and liens without limit as to amount upon the property and franchise of this
corporation, and pursuant to the affirmative vote, either in person or by proxy,
of the holders of a majority of the capital stock issued and outstanding; the
Directors shall have authority to dispose in any manner of the whole property of
this corporation.

56
<PAGE>

SECTION 10.
The company shall have a corporate seal, the design thereof being as follows:
SEAL AFFIXED

ARTICLE VII
AMENDMENT OF BY-LAWS

SECTION 1.
Amendments and changes of these Bylaws may be made at any regular or special
meeting of the Board of Directors by a vote of not less than all of the entire
Board, or may be made by a vote of, or a consent in writing signed by, the
holders of 51% of the issued and outstanding capital stock.

KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, being the Officers and
Directors representing the shareholders of ALLIED BIOTECHNOLOGY INTERNATIONAL
INC., Nevada, a corporation, do hereby consent to the forgoing Bylaws and adopt
the same as and for the By-laws of said corporation.

IN WITNESS WHEREOF, we have hereunto set our hands this FIFTH (5th) day of MAY
1993

HENRY SMITH
President

GERI MAESTAS
Secretary

<PAGE>

SPECIMEN SHARE CERTIFICATE
--------------------------

INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
NUMBER SHARES
T............ ................

ALLIED BIOTECHNOLOGY INTERNATIONAL INC.
25,000,000 Authorized Shares-Par Value $.001 Per Share

FULLY PAID AND NON ASSESSABLE CUSIP 018892-10-9

THIS CERTIFIES THAT
-------------------------------------------------------------
registered holder of Shares
------------------------------------------------------
transferable only on the books of the corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
COMMON STOCK
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate seal to be hereunto
affixed this day of A.D. 19 .
------ ----- --

CORPORATE SEAL
- -------------------------------- --------------------------
Secretary President

58
<PAGE>

INDEPENDENT DISTRIBUTOR AGREEMENT
---------------------------------

This agreement entered into this ____th day of ________________ 19____ between
Allied Biotechnology International, Inc. (ADBI), a Nevada corporation having its
principal place of business at 959 South Coast Drive, #270, Costa Mesa, CA 92626
and

XXXX Company

Whereas XXXX Company wishes to secure distribution rights from Allied
Biotechnology International, Inc. under the terms of the agreement. XXXX
Company agrees to pay ZZZZZ, non- refundable, to Allied Biotechnology
International, Inc. for the rights to distribute said product at the time of the
contract signing. This payment will secure for XXXX Company the right to
explore and establish a distribution program, and to acquire the appropriate
approvals from the appropriate government entities. Allied Biotechnology
International, Inc. will provide XXXX Company with YYYYY samples of the listed
product (s) listed in Exhibit B to be utilized for evaluation by regulatory
agencies and for sampling by the user outlets.

At the end of ninety days, a purchase minimum volume order will be required.

WITNESSETH:
- -----------

In consideration of the premises and of the mutual covenants and agreement
herein contained, it is mutually agreed by the parties hereto as follows:

1. Appointment: Allied Biotechnology International, Inc. hereby appoints xxxx
------------
Company, during the term of this Agreement as Exclusive Distributor of the
Products in the Territory and Distributor hereby accepts said appointment:

2. Term:
-----
(a) The term of this Agreement is for five (5) year(s), commencing on the
___th day of ____________ 19_____ and concluding on the _____th day of
_______ 2000.

59
<PAGE>

(b) Thereafter, this Agreement shall automatically renew and its term
continue for successive one-year periods thereafter unless terminated by
either party by written notice sent at least ninety days prior to the
expiration of the term. In the event of such notice, termination shall occur
at the expiration of the appropriate period.

(c) Allied Biotechnology International, Inc. shall have the right, however,
to terminate this Agreement immediately by furnishing written notice to
Distributor of its election to terminate the Agreement for any of the
following reasons: (i) the existence of bankruptcy; insolvency, composition
or creditor's arrangement with respect to Distributor; (ii) Distributor's
acquisition by merger or consolidation with or liquidation into any other
business entity; (iii) failure of Distributor to pay when due any portion of
the purchase price for ordered Products; (iv) any breach of this Agreement by
Distributor including failure to maintain product required purchase minimums
as stated in Paragraph 11 and Exhibit B. In the event Allied Biotechnology
International, Inc. discontinues the manufacturing or marketing of the
Products for any reason whatsoever, all rights of Distributor under this
Agreement shall automatically and immediately expire; or (v) for any other
reason constituting cause, the parties may terminate the Agreement by mutual
written agreement.

(d) The provisions for termination as provided are final, and the parties
have considered the possibility of expenditures necessary for the performance
of the terms of the Agreement and the possible loss and damages incident to
them in the event of expiration or termination. It is expressly agreed that
Allied Biotechnology International, Inc. shall not be liable to Distributor
for damages in any form by reason of the termination of the Agreement
pursuant to its terms at any time or for any reason. Allied Biotechnology
International, Inc. agrees that it will accept purchase orders for
transactions inaugurated by Distributor before termination of this Agreement
other than termination pursuant to Paragraph 2(c). Allied Biotechnology
International, Inc. further agrees that upon any termination of this
Agreement, Distributor may return to Allied Biotechnology International, Inc.
for credit any Products which are in fully marketable condition as determined
by Allied Biotechnology International, Inc. Otherwise, after termination of
the Agreement, no compensation or indemnity will be due on account of the
activities of the Distributor.

60
<PAGE>

3. Products. The Products covered by this Agreement are those identified in
---------
Exhibit A hereto, which, by this reference, is incorporated herein,
manufactured from time to time by Allied Biotechnology International, Inc. at
its facility. Allied Biotechnology International, Inc. reserves the right to
add to, to withdraw, or to modify the Products at any time.

4. Territory. The Territory of this appointment shall be the (XXXXX territory)
---------- -----------------

5. Prices. Allied Biotechnology International, Inc. will from time to time
-------
advise Distributor of its current Distributor prices (ex-factory) for the
Products and, as deliveries are made, will invoice Distributor for payment in
United States currency, or in such other currency as Allied Biotechnology
International, Inc. may instruct, at prices then prevailing. Insurance,
freight and all other costs of shipment will be paid by Distributor. Allied
Biotechnology International, Inc. reserves the right to change Distributor
prices at any time during the term of this Agreement, and any change in
prices shall be effective ninety (90) days from the date written notice of
any such change is transmitted to Distributor.

6. Terms of Sale. The terms of sale which shall be applicable to all sales made
--------------
by Allied Biotechnology International, Inc. to Distributor shall be those in
effect on the date of shipment as published from time to time and attached
hereto as Exhibit C which by reference is made a part of this Agreement.
Said terms of sale are subject to change by Allied Biotechnology
International, Inc. from time to time. All orders placed pursuant to this
Agreement shall be subject to Allied Biotechnology International, Inc.'s
acceptance, in whole or in part, at its home office, and to the terms of
sale. Distributor shall bear the risk of loss of all Products sold hereunder
from the time Allied Biotechnology International, Inc. delivers the Products
to the carrier for shipment to Distributor. Distributor shall inspect all
Products immediately after receipt and shall report to Allied Biotechnology
International, Inc. within thirty (30) days any defect or discrepancy. All
losses from failure to so report shall be borne by the Distributor, and all
claims with respect to such losses are hereby waived by Distributor. To the
extent that any published terms of sale conflict with the provisions of this
Agreement, the provisions hereof shall govern.

7. Force Majeure. (a) Failure of Allied Biotechnology International, Inc. to
--------------
make, or of Distributor to take, any one or more deliveries hereunder (or
portions thereof) when due, if such failure is occasioned by force majeure,
shall not subject the failing party to any liability to the other, and, at
the option of either party, the total quantity to be delivered pursuant to
any offer

61
<PAGE>

accepted hereunder shall be reduced by the quantity of the delivery of
deliveries (or portions thereof) so omitted. Force majeure shall include, but
not be limited to, acts of God or the public enemy, fire, explosion, perils
of the sea, flood, drought, war, riots, sabotage, accident, embargo, lack of
raw materials, government priority, requisition of allocation of any
government authority, interruption f or delay in transportation, shortage or
failure of supply of materials or equipment, strikes, lockouts or other labor
troubles, partial or complete suspension of Allied Biotechnology
International, Inc.'s or its suppliers' plant operations or by either party's
(including Allied Biotechnology International, Inc.'s suppliers) compliance
with any order or request of the State of California, the US government, and
the governmental regulations of the market territory to which Distributor may
be subject, or of any officer, department agency or committee or any of said
governments, or by compliance with a request of Allied Biotechnology
International, or Distributor by any of said governments for purposes of
national defense, or any other circumstances of like or different character
beyond the reasonable control of the party so failing. Force majeure shall
not include financial incapacity of either party. The provisions of this
subparagraph (a) shall be effective even though the circumstances or
contingencies invoked by Allied Biotechnology International, Inc. or
Distributor, might have been operative on the date hereof.

(b) If any event of force majeure causes interruption of all shipments
hereunder for a period of one (1) year from date the happening of any said
event occurs or commences, this Agreement shall terminate without further
obligation of any kind of either party to the other.

8. Taxes and Penalties. If any taxes, assessments, penalties or fines be
--------------------
incurred by Allied Biotechnology International, Inc. by reason of
Distributor's conduct of its business, Distributor will assume all such
obligations without recourse against Allied Biotechnology International, Inc.
and will indemnify, exonerate and hold harmless Allied Biotechnology
International, Inc. from and against any loss by reason thereof.

9. Compensation. Compensation and profits, if any, of Distributor hereunder
-------------
shall be realized from margins obtained on resale of the Products, and
Distributor expressly waives any claim on or against Allied Biotechnology
International, Inc. based on unjust enrichment of Allied Biotechnology, Inc.
or similar theories, for any services rendered by Distributor under this
Agreement.

62
<PAGE>

10. Duties of Distributor. Distributor shall use its best efforts to develop
----------------------
and exploit markets for and to sell the Products throughout the Territory
and to that end Distributor shall:

(a) obtain at its expense, all necessary licenses, certifications,
authorizations and approvals, and to do any other or additional act or
thing which may be necessary to enable the Products to be marketed
commercially in compliance with the laws of any national or local
government having jurisdiction over Distributor or its activities in the
Territory, and the regulations of any department, commission, board,
bureau, agency or instrumentality of any such government. If such licenses,
certifications, authorizations, approvals, acts or things have not been
obtained, this Agreement shall not be binding on Allied Biotechnology
International, Inc., and all risks therefrom shall be with the Distributor;

(b) advertise and promote the Products at Distributor's expense by
appropriate means, including, but not limited to, participation in relevant
trade fairs, public demonstration of the Products in a form approved by
Allied Biotechnology International, Inc., prompt and effective responses to
trade and customer inquiries, regular and continuing advertising programs
and regular visits to customers;

(c) maintain at a mutually agreed level inventories of the Products at a
location or locations within the Territory to enable Distributor to ensure
prompt delivery to customers on a competitive basis;

(d) maintain an adequate sales and service organization with properly
trained personnel sufficient in number to enable Distributor to discharge
its duties hereunder;

(e) during the first year of the term hereof, and thereafter periodically,
to render to Allied Biotechnology International, Inc. written reports
advising of all conditions of the market, including scientific and
technological developments, competitive prices and, when requested, sales
and trade statistics and other pertinent information relating to the
Territory;

(f) render to Allied Biotechnology International, Inc. monthly reports for
the first year regarding market conditions an the prospective sales
anticipated.

(g) comply with all laws and regulations of the Territory, including those
dealing with the sale and distribution of the Products purchased
thereunder;

(h) except as specified in EXHIBIT A, resell the Products only under the
labels, trade names, copyrights or trademarks of Allied Biotechnology
International, Inc. or its suppliers, and none of these nor the packaging,
nor the contents thereof, shall be altered in any respect without prior
written permission of Allied Biotechnology International, Inc. Distributor
shall not have or acquire any right, title or interest of any kind in such
labels, trade

63
<PAGE>

names, copyrights or trademarks, even though such labels, trade names,
copyrights or trademarks may have been adopted at the suggestion or instances
of Distributor; nor shall it do any act or thing which might injure the
reputation of Allied Biotechnology International, Inc.'s or its suppliers'
labels, trade names, copyrights or trademarks, or affect adversely their
exclusive rights therein. Distributor will give prompt notice in writing to
Allied Biotechnology International, Inc. of any infringement of any such
labels, trade names, copyrights or trademarks, or of any patents pertaining
to the Products, which shall come to the attention of Distributor, and, upon
request of Allied Biotechnology International, Inc., will render to Allied
Biotechnology International, Inc., entirely at Allied Biotechnology
International, Inc.'s expense, such assistance as Allied Biotechnology
International, Inc. may request for the purposes of restraining any such
infringement;

(i) except as specified in EXHIBIT A, not manufacture or cause to be
manufactured anywhere, or sell, promote or distribute in the Territory, any
product like or similar to the Products without prior written approval of
Allied Biotechnology International, Inc.;

(j) except as specified in EXHIBIT A, make no appointments of
subdistributors, subdealers or agents of the Products except upon terms
additionally approved by Allied Biotechnology International, Inc.;

(k) except upon prior written approval of Allied Biotechnology
International, Inc., not sell, transfer or otherwise make available the
Products for delivery outside the Territory, nor sell, transfer or otherwise
make available the Products to any person whom Distributor knows intends to
sell, transfer or otherwise make available the Products for delivery outside
the Territory;

(l) sell the Products only under conditions specified by Allied
Biotechnology International,

(m) maintain and store the Products only as specified by Allied
Biotechnology International,

11. Required Purchases. Distributor shall order and purchase the number of
------------------
Product units set forth in the table contained in Exhibit B and in
accordance with the schedule therein, which by reference thereto, is made an
integral part of this Agreement. However, the obligation of the Distributor
to order and purchase any said units may at the option of the Distributor be
decreased by the number of Product units ordered pursuant to this agreement
which Allied Biotechnology International, Inc. is unable to deliver during
the immediately preceding year. Failure to provide satisfactory performance
constitutes a breach in Agreement as is outlined under Paragraph 2(c)(iv).

64
<PAGE>

12. Warranties of Products. Allied Biotechnology International, Inc. makes no
----------------------
warranty of any kind, expressed or implied, except that at the time of
manufacture, reasonable care was used in the manufacture of Products. There
are no warranties of any kind which extend beyond the face of this
Agreement. Distributor acknowledges that, prior to entering into this
Agreement, it has examined a sample or model of each of the Products as
fully as it desires. Distributor shall have an obligation to examine fully,
prior to purchase, any of the Products to which modifications may be made.
All Products shipped to Distributor hereunder will conform in all material
respects to the sample or models of the Products examined by Distributor and
will be adequately contained, packaged and labeled. Distributor shall not
publish, without the prior written approval of Allied Biotechnology
International, Inc., any description, performance, claim, specification or
other statement which relates to the Products other than those set forth in
writing by Allied Biotechnology International, Inc.

13. Trade Secrets. The design and related technology of the Products,
--------------
commercial information, data regarding processes and know-how furnished
Distributor hereunder or in connection herewith are the property of Allied
Biotechnology International, Inc., and Distributor shall not acquire any
proprietary rights or other interests therein. Distributor shall treat same
as strictly confidential, and will not reveal to unauthorized third parties
except as may be necessary, upon prior written approval of Allied
Biotechnology International, Inc., to achieve the purposes of this
Agreement. Distributor agrees to take all reasonable measures to prevent
its employees, agents and customers from divulging such information,
including, without limitation, causing such employees, agents and customers
to execute trade secrets and secret processes nondisclosure agreements in
such form and substance as may be required by Allied Biotechnology
International, Inc. Distributor hereby acknowledges that the disclosure of
confidential information may result in substantial and incalculable
financial damage to Allied Biotechnology International, Inc. and hereby
consents to the issue of an injunction or interim injunction restraining it
from the disclosure of information which is confidential.

14. Inspection. Distributor shall permit Allied Biotechnology International,
-----------
Inc., upon reasonable notice and during regular business hours to inspect
its offices facilities,, books and records relating to the clinical
investigation use of the

65
<PAGE>

Products whenever such inspection in deemed necessary by Allied
Biotechnology International, Inc.

15. Allied Biotechnology International, Inc. Assistance and Sales Literature.
------------------------------------------------------------------------
Allied Biotechnology International, Inc. agrees to provide distributor with
such technical data and documentation as may be required by governmental
agencies as a prerequisite to granting licenses, certification and
approvals. Allied Biotechnology International, Inc. agrees to make direct,
personal representations to governmental agencies if necessary, Allied
Biotechnology International, Inc. agrees to furnish to Distributor necessary
sales literature and technical brochures, in the English language, at no
charge except for shipment costs.

16. Status of the Parties. It is understood and agreed that both parties hereto
---------------------
are independent contractors and nothing in this Agreement shall be construed
so as to constitute Distributor as partner, or legal representative of
Allied Biotechnology International, Inc. or make it in any way subordinate
to or dependent upon Allied Biotechnology International, Inc. Distributor
has no right or authority, expressed or implied, to assume or create any
obligation on behalf of Allied Biotechnology International, Inc. or
represent to any third party that it has authority to bind or commit Allied
Biotechnology International, Inc. in any manner.

17. Governing Law. This Agreement shall in all respects be governed by and
-------------
construed in accordance with the laws of the State of California.

18. Arbitration. All disputes between the parties arising in connection with
------------
this Agreement shall be finally settled by arbitration. The arbitration
shall be held in Geneva, Switzerland, and shall be conducted in accordance
with the Rules of the International Chamber of Commerce. Judgment upon the
award rendered may be entered in any court having jurisdiction or
application may be made to such court for judicial acceptance of the award
and an order of enforcement, as the case may be.

19. Assignment. Any and all right accruing hereunder to Distributor are
----------
personal in nature and shall not be assigned by Distributor, either in whole
or in part, except with prior written consent of Allied Biotechnology
International, Inc.

66
<PAGE>

20. Notices All notices provided for herein shall be in writing and shall be
-------
deemed to have been duly given when hand delivered or sent by mail,
registered or certified, postage prepaid, addressed to the parties as
follows:
to Allied Biotechnology International, Inc.
959 South Coast Drive
Costa Mesa, CA 92626

to
XXXX Company

21. Sole Agreement. This agreement contains all the understandings and
--------------
representations between the partners hereto pertaining to the matters
referred to herein and supersedes all agreements, of any, previously entered
into by them with respect thereto. By acceptance of this Agreement,
Distributor specifically hereby releases Allied Biotechnology International,
Inc. from any and all obligations or claims under any and all agreements,
understandings and representations, written or oral, previously entered into
with Distributor, and any agreements entered into are hereby deemed
terminated and of no effect in any particular. This Agreement may be
modified only by a written supplement duly executed by the authorized
officers of the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
on date first above written by their duly authorized officers or
representatives.

BY:__________________________________ BY:_______________________________
Henry J. Smith, President President
Allied Biotechnology International xxxx Company

67
<PAGE>

EXHIBIT A
---------

Allied Biotechnology International Inc., hereby gives written permission to XXXX
Company for the distribution of XXXXX Products.

EXHIBIT B
---------

MINIMUM PURCHASE REQUIREMENTS

To maintain the exclusive distribution rights to sell XXXX Products, a minimum
of___________products will be purchased per month.

EXHIBIT C
---------

TERMS OF SALE
-------------

All sales are F.O.B. Orange County, California.

50% of the order payable at time of order and the balance secured by a letter of
credit issued to a correspondent bank in the U.S.A. and payable on sight upon
delivery.

If standing orders are placed then Allied Biotechnology International agrees to
maintain a sufficient inventory of product at its facility available for
immediate shipment and stored under safe and appropriate conditions of
storage.