<SUBMISSION>
<ACCESSION-NUMBER>0001144204-03-002375
<TYPE>10QSB
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20030331
<FILING-DATE>20030514
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ADVANCED BIOTHERAPY INC
<CIK>0000791833
<ASSIGNED-SIC>8731
<IRS-NUMBER>950402415
<STATE-OF-INCORPORATION>NV
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10QSB
<ACT>34
<FILE-NUMBER>000-26323
<FILM-NUMBER>03698325
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>6355 TOPANGA CANYON BLVD
<STREET2>SUITE 510
<CITY>WOODLAND HILLS
<STATE>CA
<ZIP>91367
<PHONE>8188833956
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>6355 TOPANGA CANYON BLVD
<STREET2>SUITE 510
<CITY>WOODLAND HILLS
<STATE>CA
<ZIP>91367
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ADVANCED BIOTHERAPY CONCEPTS INC
<DATE-CHANGED>19990524
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>

<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

                                   (Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934 for the period ended March 31, 2003
                                       OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ____________ to ______________

                         Commission file number 0-26323

                            ADVANCED BIOTHERAPY, INC.
             (Exact name or registrant as specified in its charter)

Delaware                                                  51-0402415
(State of jurisdiction of                                 (IRS Employer
incorporation or organization)                            Identification No.)

                          6355 Topanga Canyon Boulevard
                                    Suite 510
                        Woodland Hills, California 91367
          (Address of principal executive offices, including zip code)

                                 (818) 883-6716
              (Registrant's telephone number, including area code)

Indicate by mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the  Securities  Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.
[X] YES [ ] NO

As of May 9, 2003, the Registrant had 42,224,004 shares of common stock,  $0.001
par value, outstanding.

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


<PAGE>
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS

ITEM                                                                                         PAGE

                                     PART I.

<S>      <C>                                                                                  <C>

1.       Financial Statements

          a.   Independent Accountant's Review Report.................................         1

          b.   Balance Sheets -- March 31, 2003 (unaudited) and December 31,
               2002...................................................................         2

          c    Statements of Operations -- Three Months Ended March 31, 2003,
               March 31, 2002, and from Inception through March 31, 2003..............         3

          d.   Statements of Stockholders' Equity (Deficit)...........................         4

          e    Statements of Cash Flows -- Three Months Ended March 31, 2003,
               March 31, 2002 and from Inception through March 31, 2003...............         5

          f    Notes to Financial Statements..........................................         6

          g    Management's Discussion and Analysis of Financial Condition and
               Results of  Operations.................................................        25

3.       Controls and Procedures......................................................        27

                                    PART II.


2.       Changes in Securities........................................................        27


6.       Exhibits and Reports on Form 8-K.............................................        29

</TABLE>



<PAGE>


                            ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          REVIEWED FINANCIAL STATEMENTS
                                 MARCH 31, 2003











                              WILLIAMS & WEBSTER PS
                          CERTIFIED PUBLIC ACCOUNTANTS
                        BANK OF AMERICA FINANCIAL CENTER
                           W 601 RIVERSIDE, SUITE 1940
                                SPOKANE, WA 99201
                                 (509) 838-5111




<PAGE>

PART I

ITEM 1.  FINANCIAL STATEMENTS

The Board of Directors
Advanced Biotherapy, Inc.
Woodland Hills, CA

                     INDEPENDENT ACCOUNTANT'S REVIEW REPORT

We have reviewed the accompanying balance sheet of Advanced Biotherapy,  Inc. (a
development stage company and a Delaware  corporation) as of March 31, 2003, and
the related statements of operations,  stockholders' equity (deficit),  and cash
flows for the three months ended March 31, 2003 and 2002 and for the period from
December 2, 1985  (inception)  to March 31, 2003.  All  information  included in
these financial  statements is the  representation of the management of Advanced
Biotherapy, Inc.

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

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

The financial statements for the year ended December 31, 2002 were audited by us
and we expressed an unqualified opinion on them in our report dated February 25,
2003. We have not performed any auditing procedures since that date.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the Company  has  generated  little  revenue in the past
years,  and has  suffered  recurring  losses  from  operations  resulting  in an
accumulated  deficit of $7,051,330  at March 31, 2003.  These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans  regarding  this  issue  are also  discussed  in Note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
May 9, 2003


                                        1
<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                 ASSETS

                                                                                      March 31,
                                                                                        2003          December 31,
                                                                                     (Unaudited)         2002
                                                                                     -----------      -----------
<S>                                                                                  <C>              <C>
     CURRENT ASSETS
        Cash                                                                         $    71,601      $    31,081
        Marketable securities                                                          2,600,000        3,000,000
        Notes receivable - related party                                                  46,619          246,619
        Interest receivable - related party                                                9,757           47,609
        Deposits and prepaid expenses                                                     36,385           54,882
                                                                                     -----------      -----------
              Total Current Assets                                                     2,764,362        3,380,191
                                                                                     -----------      -----------

     PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation                      185,335           16,414
                                                                                     -----------      -----------

     OTHER ASSETS
        Deferred loan origination fees, net of accumulated amortization                  114,438          128,910
        Patents and patents pending, net of accumulated amortization                     396,913          365,713
                                                                                     -----------      -----------
              Total Other Assets                                                         511,351          494,623
                                                                                     -----------      -----------

     TOTAL ASSETS                                                                    $ 3,461,048      $ 3,891,228
                                                                                     ===========      ===========


                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

     CURRENT LIABILITIES
        Accounts payable                                                             $   251,381      $   113,457
        Accounts payable - related party                                                  18,451           14,174
        Accrued expenses - related party                                                   1,667           63,367
        Accrued interest on convertible debt                                             151,426               --
                                                                                     -----------      -----------
              Total Current Liabilities                                                  422,925          190,998
                                                                                     -----------      -----------

     LONG-TERM DEBT
        Convertible notes payable                                                      5,584,995        5,604,010
        Notes payable to related parties                                                 127,631          127,631
                                                                                     -----------      -----------
              Total Long-Term Debt                                                     5,712,626        5,731,641
                                                                                     -----------      -----------

              Total Liabilities                                                        6,135,551        5,922,639
                                                                                     -----------      -----------

     COMMITMENTS AND CONTINGENCIES                                                            --               --
                                                                                     -----------      -----------

     STOCKHOLDERS' EQUITY (DEFICIT)
        Preferred stock, par value $0.001; 20,000,000 shares authorized,
           no shares issued and outstanding                                                   --               --
        Common stock, par value $0.001; 200,000,000 shares authorized,
           42,224,004 and 43,601,317 shares issued and outstanding, respectively          42,223           43,600
        Additional paid-in capital                                                     3,720,377        3,937,923
        Stock options and warrants                                                       614,227          580,027
        Deficit accumulated during development stage                                  (7,051,330)      (6,592,961)
                                                                                     -----------      -----------
              Total Stockholders' Equity (Deficit)                                    (2,674,503)      (2,031,411)
                                                                                     -----------      -----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                            $ 3,461,048      $ 3,891,228
                                                                                     ===========      ===========
</TABLE>

             See accompanying notes and accountant's review report.

                                       2

<PAGE>


                            ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                           From Inception
                                                          Three Months Ended March 31,   (December 2, 1985)
                                                        ------------------------------       through
                                                           2003              2002          March 31, 2003
                                                        (Unaudited)       (Unaudited)       (Unaudited)
                                                        ------------      ------------      ------------
<S>                                                     <C>               <C>               <C>
     REVENUES                                           $         --      $         --      $     89,947
                                                        ------------      ------------      ------------

     OPERATING EXPENSES
            Research and development                         109,931            30,062         2,701,900
            Promotional fees                                     240               240            26,408
            Professional fees                                 56,375            71,384         2,439,785
            Directors' fees                                       --                --            66,880
            Depreciation and amortization                     23,713            12,819           582,901
            Administrative salaries and benefits              53,833                --         1,162,311
            Insurance                                         18,131            13,219           134,892
            Shareholder relations and transfer fees            5,508             4,000           209,001
            Rent                                              26,371                --           182,487
            Travel and entertainment                           7,164             6,516           180,297
            Telephone and communications                       1,104               622            32,624
            Office                                             3,433             1,110            58,652
            General and administrative                        12,292             6,241           637,000
                                                        ------------      ------------      ------------
                 Total Operating Expenses                    318,095           146,213         8,415,138
                                                        ------------      ------------      ------------

     Loss From Operations                                   (318,095)         (146,213)       (8,325,191)

     Other Income (Expense)
            Miscellaneous income                                  --                --            22,000
            Interest and dividend income                      12,648             4,059           124,809
            Internal gain on sale of securities                   --                --           157,520
            Forgiveness of debt                                   --                --         2,047,437
            Forgiveness of payables                               --                --            45,396
            Loss on disposal of office equipment                  --                --            (2,224)
            Interest expense                                (152,922)          (34,049)       (1,121,077)
                                                        ------------      ------------      ------------
                 Total Other Income (Expense)               (140,274)          (29,990)        1,273,861
                                                        ------------      ------------      ------------

     Loss Before Income Taxes                               (458,369)         (176,203)       (7,051,330)

     Income Taxes                                                 --                --                --
                                                        ------------      ------------      ------------

     NET LOSS                                           $   (458,369)     $   (176,203)     $ (7,051,330)
                                                        ============      ============      ============

     BASIC AND DILUTED NET LOSS
       PER COMMON SHARE                                 $      (0.01)     $        nil
                                                        ============      ============

     WEIGHTED AVERAGE NUMBER OF
     BASIC AND DILUTED COMMON STOCK
     SHARES OUTSTANDING                                   43,143,910        42,364,324
                                                        ============      ============
</TABLE>

             See accompanying notes and accountant's review report.

                                       3

<PAGE>

                            ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                   STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                      Accumulated      Total
                                                      Common Stock         Additional       Stock       During     Stockholders'
                                               -------------------------     Paid-in     Options and  Development     Equity
                                                  Shares        Amount       Capital       Warrants      Stage       (Deficit)
                                               -----------   -----------   -----------   -----------  -----------   -----------
<S>                                             <C>          <C>           <C>           <C>          <C>           <C>
Balance, December 31, 2001                      42,303,611   $    42,303   $ 3,640,657   $   477,683  $(5,068,426)  $  (907,783)

Contribution of capital by shareholders in
form of foregone interest                               --            --         5,635            --           --         5,635

Common stock issued in exchange
for convertible debt at $0.25 per share          1,147,706         1,147       285,781            --           --       286,928

Stock issued for cash at an average price of
$0.04 per share from the exercise of options       150,000           150         5,850            --           --         6,000

Stock warrants issued in exchange
for services                                            --            --            --        54,344           --        54,344

Stock options issued in exchange
for services                                            --            --            --        48,000           --        48,000

Net loss for the year ended December 31, 2002           --            --            --            --   (1,524,535)   (1,524,535)

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

Balance, December 31, 2002                      43,601,317        43,600     3,937,923       580,027   (6,592,961)   (2,031,411)

Contribution of capital by shareholders in
form of foregone interest                               --            --         1,026            --           --         1,026

Common stock issued in exchange
for convertible debt at $0.25 per share             76,476            77        19,042            --           --        19,119

Stock issued for cash at an average price of
$0.01 per share from the exercise of options       150,000           150         1,350            --           --         1,500

Stock returned in settlement of notes
and accrued interest receivable                 (1,603,789)       (1,604)     (238,964)           --           --      (240,568)

Stock options issued in exchange
for services                                            --            --            --        34,200           --        34,200

Net loss for the quarter ended
  March 31, 2003                                        --            --            --            --     (458,369)     (458,369)
                                               -----------   -----------   -----------   -----------  -----------   -----------

Balance, March 31, 2003 (Unaudited)             42,224,004   $    42,223   $ 3,720,377   $   614,227  $(7,051,330)  $(2,674,503)
                                               ===========   ===========   ===========   ===========  ===========   ===========
</TABLE>

                Summary of required information regarding stock
                       issuances can be found in Note 8.

             See accompanying notes and accountant's review report.

                                       4

<PAGE>

                            ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                       From Inception
                                                     Three Months Ended March 31,    (December 2, 1985)
                                                     -------------------------            through
                                                        2003          2002             March 31, 2003
                                                     (Unaudited)   (Unaudited)          (Unaudited)
                                                     -----------   -----------           -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                  <C>           <C>                   <C>
Net (loss)                                           $  (458,369)  $  (176,203)          $(7,051,330)
Adjustments to reconcile net loss to cash
  used in operating activities:
    Depreciation and amortization                         23,713        12,819               582,901
    Loss on disposal of equipment                             --            --                 2,224
    Investment income                                         --            --              (157,520)
    Expenses paid through issuance
      of common stock                                         --            --               231,340
    Expenses paid through issuance
      of common stock warrants and options                34,200        13,600               403,489
    Accrued interest paid by convertible debt                104           511               578,151
    Expenses paid through contribution
      of additional paid-in capital                        1,026         1,523                52,607
    Organization costs                                        --            --                (9,220)
    Decrease (increase) in:
       Marketable securities                             400,000            --            (2,600,000)
       Deposits and prepaid expenses                      18,497        13,745               (36,385)
       Interest receivable                                (2,716)       (4,007)              (50,325)
       Deferred loan origination cost                         --            --              (215,183)
    Increase (decrease) in:
       Accounts payable                                   80,501        77,262               271,499
       Accounts and notes payable, related parties            --            --               127,631
       Payroll and payroll taxes payable                      --            --                 8,878
       Accrued interest                                  151,426        32,016               151,426
                                                     -----------   -----------           -----------

Net cash provided by (used in) operating activities      248,382       (28,734)           (7,709,817)
                                                     -----------   -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of fixed assets                            (170,411)           --              (233,684)
    Internal gain on sale of securities                       --            --               157,520
    Acquisition of patents                               (38,951)      (32,805)             (527,053)
                                                     -----------   -----------           -----------

Net cash used in investing activities                   (209,362)      (32,805)             (603,217)
                                                     -----------   -----------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common stock                 1,500         6,000             2,457,254
    Proceeds from convertible notes                           --        35,000             5,714,000
    Proceeds from notes payable                               --            --               388,508
    Payments on notes payable                                 --            --              (175,127)
                                                     -----------   -----------           -----------

Net cash provided by financing activities                  1,500        41,000             8,384,635
                                                     -----------   -----------           -----------

Net increase (decrease) in cash                           40,520       (20,539)               71,601

Cash, beginning                                           31,081        36,615                    --
                                                     -----------   -----------           -----------

Cash, ending                                         $    71,601   $    16,076           $    71,601
                                                     ===========   ===========           ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:

    Interest expense paid                            $        --   $        --           $   339,927
                                                     ===========   ===========           ===========
    Income taxes paid                                $        --   $        --           $        --
                                                     ===========   ===========           ===========

NON-CASH FINANCING AND INVESTING ACTIVITIES:

    Common stock issued in exchange for
       professional fees and expenses                $        --   $        --           $   340,869
    Contributed expenses                             $     1,026   $     1,523           $    52,607
    Common stock issued for a loan payable           $        --   $        --           $   213,381
    Common stock issued for notes receivable         $        --   $        --           $   246,619
    Common stock returned in payment of
       notes and interest receivable                 $   240,568   $        --           $   240,568
    Options issued for services                      $    34,200   $    13,600           $   157,200
    Warrants issued for services                     $        --   $        --           $   246,289
    Accrued interest paid by convertible debt        $       104   $       511           $   578,151
    Common stock issued for convertible debt         $    19,119   $    29,142           $   707,156
</TABLE>


             See accompanying notes and accountant's review report.

                                       5

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Advanced Biotherapy, Inc. was originally incorporated December 2, 1985 under the
laws of the State of Nevada as Advanced  Biotherapy  Concepts,  Inc. On July 14,
2000, the Company  incorporated a wholly owned subsidiary,  Advanced Biotherapy,
Inc. in the State of Delaware. On September 1, 2000, the Company merged with its
wholly owned subsidiary,  effectively  changing its name to Advanced Biotherapy,
Inc. (hereinafter "the Company") and its domicile to Delaware.

The Company is involved in the  research  and  development  of the  treatment of
autoimmune diseases in humans,  most notably,  multiple sclerosis and rheumatoid
arthritis.  The Company conducts its research in Maryland.  The Company's fiscal
year-end is December 31. The Company is a development stage enterprise.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Advanced Biotherapy,  Inc. 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  accounting  principles  generally  accepted  in the United
States of America,  and have been consistently applied in the preparation of the
financial statements.

Development Stage Activities

The Company has been in the  development  stage since its  formation in 1985 and
has not realized any  significant  revenues from its planned  operations.  It is
primarily engaged in the research and development of the treatment of autoimmune
diseases in humans, most notably, multiple sclerosis and rheumatoid arthritis.

Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  For the period ended March 31, 2003,
the  Company  incurred a net loss of  $458,369  and had an  accumulated  deficit
during the development  stage of $7,051,330 for the period then ended.  Although
the  Company  has  sufficient  funds  for  research  and  development  costs and
operations,  it does not have a source of revenues to continue  its  operations,
research and  development  costs or to service its debt at maturity  beyond such
funding.  For the twelve-month  period subsequent to March 31, 2003, the Company
anticipates  that its minimum cash  requirements  to continue as a going concern
will be less than  $1,500,000,  and  therefore,  believes  that it has  adequate
resources to maintain  operations during that period.  The future of the Company
is dependent upon future  profitable  operations from the commercial  success of
its medical research and development of products to combat diseases of the human
immune  system.   Management's   goal  is  to  actively  seek  a   collaborative
relationship  with  either  a  pharmaceutical  or  biotechnology   company.   If
successful,  future  cash  requirements  may be met through  licensing  fees and
royalties.  The financial  statements do not include any adjustments relating to
the  recoverability  and  classification  of recorded assets, or the amounts and
classification  of liabilities  that might be necessary in the event the Company
cannot continue in existence.

Accounting Method

The Company's  financial  statements  are prepared  using the accrual  method of
accounting.

                                       6

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In December 2002, the Financial  Accounting Standards Board issued Statement No.
148 ("SFAS No. 148") on "Accounting for Stock-Based Compensation--Transition and
Disclosure."  This  statement  provides  alternative  methods of transition  for
companies that choose to switch to the fair value method of accounting for stock
options.  SFAS No. 148 also makes  changes in the  disclosure  requirements  for
stock-based  compensation,  regardless  of which method of accounting is chosen.
Under the new standard,  companies must report certain types of information more
prominently  and  in a  more  understandable  format  in  the  footnotes  to the
financial  statements,  and this information must be included in interim as well
as annual  financial  statements.  The Company has complied with the  disclosure
requirements of SFAS No. 148 in these financial statements.

In October 2002, the Financial  Accounting  Standards Board issued Statement No.
147 ("SFAS No. 147") on "Acquisitions of Certain Financial  Institutions."  This
statement provides guidance on the accounting for the acquisition of a financial
institution.  The Company's adoption of this standard does not have an effect on
its financial statements.

In June 2002,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 146,  "Accounting for Costs Associated with
Exit  or  Disposal   Activities"  ("SFAS  No.  146").  SFAS  No.  146  addresses
significant  issues  regarding the  recognition,  measurement,  and reporting of
costs  associated  with exit and disposal  activities,  including  restructuring
activities.  SFAS No. 146 also addresses recognition of certain costs related to
terminating  a  contract  that is not a  capital  lease,  costs  to  consolidate
facilities or relocate employees, and termination benefits provided to employees
that  are  involuntarily  terminated  under  the  terms  of a  one-time  benefit
arrangement  that  is  not  an  ongoing  benefit  arrangement  or an  individual
deferred-compensation  contract.  SFAS No. 146 is effective for activities after
December 31, 2002. There has been no impact on the Company's  financial position
or results of operations from adopting SFAS No. 146.

In April 2002,  the Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 145, "Rescission of SFAS Statements No. 44, 4
and 64,  Amendment of SFAS Statement No. 13, and Technical  Corrections"  ("SFAS
No.  145"),  which  updates,   clarifies  and  simplifies   existing  accounting
pronouncements.  SFAS No.  4,  which  required  all gains  and  losses  from the
extinguishment  of debt to be  aggregated  and, if  material,  classified  as an
extraordinary  item, net of related tax effect was rescinded.  As a result, SFAS
No. 64, which amended SFAS No. 4, was rescinded,  as it was no longer necessary.
SFAS No. 44,  "Accounting for Intangible Assets of Motor Carriers",  established
the accounting  requirements  for the effects of transition to the provisions of
the Motor Carrier Act of 1980. Since the transition has been completed, SFAS No.
44 is no longer necessary and has been rescinded.  SFAS No. 145 amended SFAS No.
13  to  eliminate  an   inconsistency   between  the  required   accounting  for
sale-leaseback  transactions  and the  required  accounting  for  certain  lease
modifications  that have  economic  effects  that are similar to  sale-leaseback
transactions.   The  Company  adopted  SFAS  No.  145,  and  as  a  result,  has
reclassified a total of $2,047,437 in debt  forgiveness to other income from the
previous  classification as extraordinary  income.  The other provisions of this
standard did not have an effect on the financial statements of the Company.


                                       7
<PAGE>


                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounting for Long-Lived Assets

In October 2001, the Financial  Accounting  Standards Board issued  Statement of
Financial  Accounting  Standards  No. 144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets"  ("SFAS No. 144").  This standard  establishes a
single  accounting  model  for  long-lived  assets  to be  disposed  of by sale,
including discontinued  operations.  SFAS No. 144 requires that these long-lived
assets be measured  at the lower of  carrying  amount or fair value less cost to
sell, whether reported in continuing operations or discontinued operations.  The
Company does not believe any adjustments are needed to the carrying value of its
assets at March 31, 2003.

Accounting for Stock Options and Warrants Granted to Employees and Non-employees

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS No. 123"), defines a fair value-based method of accounting
for stock  options and other  equity  instruments.  The Company has adopted this
method,  which measures  compensation costs based on the estimated fair value of
the award and recognizes that cost over the service period.

Cash and Cash Equivalents

For purposes of the  statement  of cash flows,  the Company  considers  all bank
accounts,  certificates  of deposit,  money market  accounts and short-term debt
securities  purchased  with a  maturity  of  three  months  or  less  to be cash
equivalents.

Use of Estimates

The process of preparing  financial  statements  in conformity  with  accounting
principles  generally  accepted in the United States of America requires the use
of estimates and  assumptions  regarding  certain types of assets,  liabilities,
revenues,   and  expenses.   Such  estimates   primarily   relate  to  unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon settlement, actual results may differ from estimated amounts.

Provision for Taxes

Income taxes are provided based upon the liability method of accounting pursuant
to SFAS No. 109  "Accounting  for Income Taxes." Under this  approach,  deferred
income  taxes are  recorded to reflect the tax  consequences  on future years of
differences  between the tax basis of assets and liabilities and their financial
reporting  amounts at each year end. A valuation  allowance is recorded  against
deferred tax assets if management does not believe the Company has met the "more
likely than not" standard  imposed by SFAS No. 109 to allow  recognition of such
an asset.

At March 31,  2003,  the Company had net  deferred  tax assets of  approximately
$1,270,000, principally arising from net operating loss carryforwards for income
tax  purposes.  As management of the Company  cannot  determine  that it is more
likely than not that the Company  will  realize the benefit of the net  deferred
tax asset,  a valuation  allowance  equal to the net deferred tax asset has been
established.

At March 31, 2003,  the  Company's net operating  loss  carryforwards  amount to
approximately  $5,090,000,  which  expire in the years  2003  through  2023.  At
December 31,  2002,  approximately  $878,000 of net  operating  losses  expired.
Approximately $195,000 of net operating losses will expire on December 31, 2003.


                                       8
<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassifications

Certain  amounts from prior periods have been  reclassified  to conform with the
current period presentation. These reclassifications have resulted in no changes
to the Company's accumulated deficit or net losses presented.

Promotional Fees

Promotional  fees are charged to  operations in the year  incurred.  Promotional
fees amounted to $240 for each of the periods ended March 31, 2003 and 2002.

Research and Development Costs

Costs of research and development are expensed as incurred.

Compensated Absences

Employees  of the Company  are  entitled  to paid  vacation,  paid sick days and
personal days off, depending on job classification, length of service, and other
factors.  It is  impracticable to estimate the amount of compensation for future
absences,  and, accordingly,  no liability has been recorded in the accompanying
financial  statements.  The  Company's  policy  is to  recognize  the  costs  of
compensated absences when actually paid to employees.

Revenue Recognition

Upon  entering into license  agreements  with other  companies,  revenue will be
recognized when fees are received.  Prior to 1994, revenues were recognized when
fees for services related to research activities were received.

Fair Value of Financial Instruments

The  carrying  amounts for cash,  investments,  deposits  and prepaid  expenses,
receivables,   accounts  payable,   accrued  liabilities,   notes  payable,  and
convertible debt approximate their fair value.

Deferred Loan Origination Fees

During the year ended  December 31, 2000, the Company  entered into  convertible
subordinated debt, which required the payment of loan origination fees. See Note
12. These loan  origination  fees,  which totaled  $40,152,  net of  accumulated
amortization at March 31, 2003, are amortized over the life of the related debt.
During the period  ended  March 31,  2003,  the  Company  recorded  amortization
expense in the amount of $6,928 related to these fees.

During the year ended  December 31, 2002, the Company  entered into  convertible
subordinated debt, which required the payment of loan origination fees. See Note
12. These loan  origination  fees,  which totaled  $74,287,  net of  accumulated
amortization at March 31, 2003, are amortized over the life of the related debt.
During the period  ended  March 31,  2003,  the  Company  recorded  amortization
expense in the amount of $7,544 related to these fees.

Internal Gain On Sale of Securities

During the year ending December 31, 2000,  officers of the Company sold stock at
a gain shortly after  purchasing stock through a stock bonus plan. In compliance
with the Securities and Exchange Rule 16b, the stockholders remitted the gain to
the Company.  The gain amounted to $157,520 and is reflected in the statement of
operations as internal gain on sale of securities.


                                       9
<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Derivative Instruments

The  Financial   Accounting   Standards  Board  issued  Statement  of  Financial
Accounting  Standards ("SFAS") No. 133,  "Accounting for Derivative  Instruments
and Hedging  Activities," as amended by SFAS No. 137, "Accounting for Derivative
Instruments and Hedging  Activities - Deferral of the Effective Date of FASB No.
133",  and SFAS No. 138,  "Accounting  for Certain  Derivative  Instruments  and
Certain Hedging Activities", which is effective for the Company as of January 1,
2001.  These  statements   establish  accounting  and  reporting  standards  for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts,  and for  hedging  activities.  They  require  that an  entity
recognize all  derivatives  as either assets or liabilities in the balance sheet
and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically  designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging  derivative  with the  recognition of (i) the changes in the fair
value of the hedged asset or liability that are  attributable to the hedged risk
or  (ii)  the  earnings  effect  of the  hedged  forecasted  transaction.  For a
derivative  not  designated  as a  hedging  instrument,  the  gain  or  loss  is
recognized in income in the period of change.

Historically,  the Company has not entered into  derivatives  contracts to hedge
existing risks or for speculative purposes.

At March 31, 2003, the Company has not engaged in any transactions that would be
considered derivative instruments or hedging activities.

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) by
the  weighted  average  number of shares  outstanding  during  the  period.  The
weighted  average  number of shares is calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were outstanding.

Diluted  earnings (loss) per share is computed by dividing the net income (loss)
adjusted for interest expense on convertible debt by the weighted average number
of basic  shares  outstanding  increased  by the number of shares  that would be
outstanding  assuming  conversion of the  exercisable  stock options  (1,987,953
shares) and  warrants  (5,324,535  shares),  and  convertible  debt  (22,946,100
shares).  Diluted  net loss per share is the same as basic net loss per share as
inclusion of the common stock equivalents would be antidilutive.

Interim Financial Statements

The interim financial statements as of and for the quarter ended March 31, 2003,
included herein,  have been prepared without audit. These statements reflect all
adjustments,  which are,  in the  opinion of  management,  necessary  to present
fairly the results of operations for these  periods.  All such  adjustments  are
normal  recurring  adjustments.  The  results  of  operations  for  the  periods
presented are not  necessarily  indicative of the results to be expected for the
full fiscal year.


                                       10
<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Depreciation  is provided  using the
straight-line  method over the estimated  useful lives of the assets of three to
five years.

The following is a summary of property,  equipment and accumulated  depreciation
at March 31, 2003 and December 31, 2002:

<TABLE>
<CAPTION>
                                             March 31, 2003          December 31, 2002
                                        -----------------------   -----------------------
                                                   Accumulated                Accumulated
                                         Cost      Depreciation    Cost      Depreciation
                                        --------     --------     --------     --------
<S>                                     <C>          <C>          <C>          <C>
     Lab equipment                      $ 27,582     $ 27,582     $ 27,582     $ 27,582
     Office equipment                     18,062       12,057       18,062       11,073
     Furniture and fixtures               11,384        2,465       11,384        1,959
     Filing room under construction      170,411         --           --           --
                                        --------     --------     --------     --------
                                        $227,439     $ 42,104     $ 57,028     $ 40,614
                                        ========     ========     ========     ========
</TABLE>


Depreciation  expense for the  periods  ended March 31, 2003 and 2002 was $1,490
and $669, respectively.

NOTE 4 - INVESTMENTS

Marketable Securities

The Company's  investments in equity securities that are intended to be held for
a short  period are  classified  as trading  securities.  These  securities  are
recorded at fair value as current  assets on the balance sheet under the caption
of  marketable  securities.  The  change in fair  value of those  securities  is
included in earnings  during the period  presented.  In the year ended March 31,
2003,  there was no change in the fair market value of the securities.  See Note
7.

NOTE 5 - INTANGIBLE ASSETS

Patents and Patents Pending

Costs relating to the development  and approval of patents,  other than research
and  development  costs which are expensed,  are capitalized and amortized using
the  straight-line  method over seventeen years. The Company's patents relate to
the treatment of autoimmune diseases.

The following is a summary of the costs of patents and patents  pending at March
31, 2003:

<TABLE>
<CAPTION>
                                                 Accumulated        Net
                                       Cost     Amortization       Amount
                                    ---------     ---------      ---------
<S>                                 <C>           <C>            <C>
     Balance, December 31, 2001     $ 361,097     $ (96,604)     $ 264,493
     2002 Activity                    127,005       (25,785)       101,220
                                    ---------     ---------      ---------
     Balance, December 31, 2002       488,102      (122,389)       365,713
     2003 Activity                     38,951        (7,751)        31,200
                                    ---------     ---------      ---------
     Balance, March 31, 2003        $ 527,053     $(130,140)     $ 396,913
                                    =========     =========      =========
</TABLE>


                                       11

<PAGE>


                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 6 - RELATED PARTY TRANSACTIONS

Current Transactions

On February 7, 2003, the board of directors  unanimously approved the repurchase
of  1,603,789  shares of common  stock from an officer and two  directors to the
Company in satisfaction  of outstanding  notes  receivable and accrued  interest
totaling $240,568. The notes were due and payable on December 31, 2002 and could
not  be  extended  under  provisions  of  federal   legislation   known  as  the
Sarbanes-Oxley  Act. These shares had been previously  issued to the officer and
directors under the Stock Bonus Plan on January 11, 2000.

The  Company  has notes  receivable  in the  aggregate  amount of  $46,619  from
non-officer/director  shareholders  of the Company in connection  with a payment
plan for the purchase of Company stock.  The notes accrue  interest at a rate of
6.5% per annum and matured on December 31, 2002. These notes receivable have not
been collected and as a result are in default. The Company intends to extend the
notes for an additional three years to the non-officer/director shareholders.

The notes payable to related  parties  consist of notes payable to the Company's
former chairman and principal shareholder. The note has no specific due date, is
currently  uncollateralized,  and is non-interest bearing,  however, interest is
calculated at the applicable federal rate each quarter.  The calculated interest
of $1,026 was  recorded  during the period  ending  March 31,  2003 as  interest
expense and contributed capital in the accompanying financial statements.

See Note 13 for related party office lease agreements.

Transactions in 2002

During the year ended  December 31, 2002, the Company sold a total of $28,000 in
subordinated  convertible  pay-in-kind  note to the  Company's  chief  executive
officer. See Note 12.

During the year ended  December 31, 2002, the Company paid $60,000 to a director
in connection with the sale of subordinated debt. See Note 12.

Transactions in 1999

The Company's former chairman and principal  shareholder advanced funds to pay a
significant  portion of the Company's expenses since 1989. At December 31, 1999,
the cumulative  amounts owed to him for expenses were $257,076.  Although he was
not charging interest to the Company,  interest was calculated at the applicable
federal rate of 5.59% at December 31, 1999 and was recorded as interest  expense
and contributed capital in the accompanying  financial statements.  During 2000,
the  Company  paid part of this note and the  balance was used to offset a bonus
stock sale to the chairman.  At December 31, 1998, the amounts owing for accrued
salary were $1,146,000. During 1999, additional salary was accrued in the amount
of $100,000.  At December 31, 1999, in accordance  with an agreement  with other
employee/shareholders  of the Company,  he received  options to purchase 623,000
shares of common stock at $0.10 per share.  The value of these  options,  in the
amount of $155,750, was used to reduce his accrued salary. See Note 10. In 1999,
he forgave  the  balance  of accrued  salary of  $1,090,250  along with  accrued
interest of $9,962. This is recorded in the financial  statements as forgiveness
of debt.


                                       12

<PAGE>


                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 6 - RELATED PARTY TRANSACTIONS (CONTINUED)

At December 31, 1999, the Company owed its then secretary/treasurer  $13,381 for
expenses paid in previous years and recorded in notes payable. During 2000, this
note  was  used  as  partial   payment  for  a  bonus  stock   purchase  by  the
secretary/treasurer.  At December 31, 1998,  the Company also owed this employee
$184,000 in unpaid salary  recorded as salary payable.  During 1999,  additional
salary in the amount of $45,000 was accrued for this  employee.  At December 31,
1999, in accordance  with an agreement with other  employee/shareholders  of the
Company,  she  received  options to purchase  114,500  shares of common stock at
$0.10 per share. The value of these options, in the amount of $28,625,  was used
to reduce the accrued salary of this employee/shareholder. See Note 10. In 1999,
she  forgave the balance of accrued  salary in the amount of  $200,375.  This is
recorded in the financial statements as forgiveness of debt.

At December 31,  1998,  the then  president of the Company was owed  $171,360 in
accrued  salary.  During 1999, a portion of this liability was paid. Also during
1999,  additional  salary in the amount of $75,000 was accrued.  At December 31,
1999, in accordance  with an agreement with other  employee/shareholders  of the
Company, he received options to purchase 105,453 shares of common stock at $0.10
per share.  The value of these  options  in the  amount of  $26,363  was used to
reduce the accrued salary of the president. See Note 10. In 1999, he forgave the
balance of accrued  salary in the amount of  $181,622.  This is  recorded in the
financial statements as forgiveness of debt.

NOTE 7 - CONCENTRATIONS

Bank Accounts

The Company  maintains  cash in a money market  account at a bank in California.
The funds on  deposit  are not  insured by the FDIC and,  therefore,  a total of
$71,601 is at risk on March 31, 2003.

The  Company's  marketable   securities  investment  consists  of  auction  rate
preferred  money  market  alternatives  that rolls  every seven days at the then
market interest rate. This investment is not insured, and therefore,  a total of
$2,600,000 is at risk as of March 31, 2003. See Note 4.

NOTE 8 - COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL

Information regarding the number of shares issued and consideration  received is
as follows:

<TABLE>
<CAPTION>

                                                     Common Stock
                                    ------------------------------------------------
                                       Average                                             Additional
                                      price per                                             Paid-in
                                        share            Shares            Amount           Capital
                                    ------------      --------------     -----------    ----------------
Common stock issued for cash:
<S>                                 <C>               <C>                <C>             <C>
1985                                   $   .50              100,000       $     100         $    49,900
1986                                      1.00              639,500             640             678,861
1987                                      1.00              850,500             850             759,650
1988                                      1.00               25,000              25              24,975
1993                                       .25            2,402,000           2,402             475,900
1995                                       .05            1,000,000           1,000              49,000
1996                                       .05              520,000             520              25,480

</TABLE>


                                       13

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 8 - COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL (CONTINUED)

<TABLE>
<CAPTION>
                                                                    Common Stock
                                                   ------------------------------------------------
                                                      Average
                                                     price per                                           Additional
                                                       share            Shares            Amount       Paid-in Capital
                                                   ------------      --------------     -----------    ----------------

Common stock issued for cash (continued):
<S>                                                <C>               <C>                <C>            <C>
1997                                                   $  .09            1,800,500      $    1,801     $       153,749
1998                                                      .10              305,000             305              30,195
1999                                                      .05            3,158,000           3,158             151,993
                                                                     --------------     -----------    ----------------
                                                                        10,800,500          10,801           2,399,703
                                                                     --------------     -----------    ----------------

Common stock issued for patents assigned:

1984                                                      .01              550,000           5,500                   -
1985, adjustment to reflect change in number   and
   par value of shares outstanding                         --            2,750,000          (2,200)              2,200
                                                                     --------------     -----------    ----------------
                                                                         3,300,000           3,300               2,200
                                                                     --------------     -----------    ----------------

Common stock issued for acquisitions:

1985                                                      .01           13,333,500          13,334             (41,112)
                                                                     --------------     -----------    ----------------

Common stock issued for note receivable:

1986                                                     1.00               10,000              10               9,990
2000                                                      .05            4,932,380           4,932             241,687
                                                                     --------------     -----------    ----------------
                                                                         4,942,380           4,942             251,677
                                                                     --------------     -----------    ----------------

Common stock returned in payment of notes receivable:

2003                                                      .16          (1,603,789)         (1,604)           (238,964)
                                                                     --------------     -----------    ----------------

Contribution of additional paid-in capital:

1991                                                       --                   --              --              35,825
1999                                                       --                   --              --              28,098
2000                                                       --                   --              --               9,735
2001                                                       --                   --              --               8,113
2002                                                       --                   --              --               5,635
2003                                                       --                   --              --               1,026
                                                                     --------------     -----------    ----------------
                                                                                --              --              88,432
                                                                     --------------     -----------    ----------------

Stock subscriptions:

1999                                                      .05              650,000             650              31,850
                                                                     --------------     -----------    ----------------

Cancellation of escrowed shares in 1999                    .001           (850,000)           (850)                850
Reissued escrowed shares cancelled in error:
2001- See Note 14                                          .001             850,000            850                (850)
                                                                     --------------     -----------    ----------------
                                                                                --              --                  --
                                                                     --------------     -----------    ----------------
</TABLE>

                                       14

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 8 - COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL (CONTINUED)

<TABLE>
<CAPTION>
                                                                    Common Stock
                                                   ------------------------------------------------
                                                      Average
                                                     price per                                           Additional
                                                       share            Shares            Amount       Paid-in Capital
                                                   ------------      --------------     -----------    ----------------
Common stock issued for services (1):
<S>                                                <C>               <C>                <C>            <C>

1988                                                   $  .50               25,000      $       25     $        12,475
1989                                                      .38               25,000              25               9,475
1990                                                      .66               37,375              37              24,635
1991                                                      .51              159,500             160              81,010
1992                                                      .75               62,500              62              46,563
1993                                                      .25              120,000             120              29,880
1996                                                      .05              308,500             308              13,832
1997                                                      .05              155,500             155               7,619
1999                                                      .05               99,190              99               4,860
                                                                     --------------     -----------    ----------------
                                                                           992,565             991             230,349
                                                                     --------------     -----------    ----------------

Common stock issued to replace
  unrecorded certificates:

1988                                                       .001              1,200               1                  (1)
1992                                                       .001                500               1                  (1)
2000                                                       .001            100,000             100                (100)
                                                                     --------------     -----------    ----------------
                                                                           101,700             102                (102)
                                                                     --------------     -----------    ----------------

Common stock issued for forgiveness of
  accounts payable (1):

1990                                                      .50               25,000              25              12,475
1996                                                      .05              150,000             150               7,350
                                                                     --------------     -----------    ----------------
                                                                           175,000             175              19,825
                                                                     --------------     -----------    ----------------

Common stock issued in payment of
  notes payable (1):

1993                                                      .25              200,000             200              49,800
2000                                                      .05            1,714,995           1,715              84,035
                                                                     --------------     -----------    ----------------
                                                                         1,914,995           1,915             133,835
                                                                     --------------     -----------    ----------------

Common stock issued in payment of
  loans payable (1):

2000                                                      .05            2,552,625           2,553             125,078
                                                                     --------------     -----------    ----------------

Common stock issued for commissions (1):

1993                                                       .001          1,260,000           1,260                  --
                                                                     --------------     -----------    ----------------
</TABLE>

                                       15

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 8 - COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL (CONTINUED)

<TABLE>
<CAPTION>
                                                                    Common Stock
                                                   ------------------------------------------------
                                                      Average
                                                     price per                                           Additional
                                                       share            Shares            Amount       Paid-in Capital
                                                   ------------      --------------     -----------    ----------------
Common stock issued for convertible debt:
<S>                                                <C>               <C>                <C>            <C>

2001                                                   $  .25            1,605,346      $    1,605     $       399,504
2002                                                      .25            1,147,706           1,147             285,781
2003                                                      .25               76,476              77              19,042
                                                                     --------------     -----------    ----------------
                                                                         2,829,528           2,829             704,327
                                                                     --------------     -----------    ----------------

Stock options exercised:

1997                                                      .01              325,000             325               2,929
2000                                                      .01              350,000             350               3,150
2002                                                      .04              150,000             150               5,850
2003                                                      .01              150,000             150               1,350
                                                                     --------------     -----------    ----------------
                                                                           975,000             975              13,279
                                                                     --------------     -----------    ----------------
Total                                                                   42,224,004  $       42,223   $       3,720,377
                                                                     ==============     ===========    ================
</TABLE>


(1)  Per share amounts  determined by information  deemed most reliable based on
     circumstances  of each case:  trading price at time of issuance or value of
     services received.

Effective  with the merger in September  2000 of Advanced  Biotherapy  Concepts,
Inc.  into its wholly owned  subsidiary,  each issued and  outstanding  share of
Advanced Biotherapy Concepts, Inc. common stock was converted automatically into
one share of $0.001 par value common stock of Advanced Biotherapy, Inc.

Effective  December 26, 2002, the Company amended its articles of  incorporation
to increase its authorized common stock to 200,000,000 shares.

Stock Bonus Plan

On January 11,  2000,  the Company  issued  9,200,000  shares of common stock to
certain key officers and directors under a stock bonus plan,  subject to various
restrictions.  The plan's purpose is to keep personnel of experience and ability
in the employ of the Company and to compensate them for their  contributions  to
the  growth of the  Company,  thereby  inducing  them to  continue  to make such
contributions  in the future.  Such stock  bonuses  were issued at the  weighted
average  price at which  the  Company  had been  selling  shares of stock out of
authorized but yet unissued  common stock to third parties during the six months
immediately  preceding the issuance of the bonus shares,  or $0.05 per share. On
February 7, 2003, the board of directors unanimously approved the repurchase and
cancellation  of  1,603,789  of these  shares of common stock at the fair market
value of $0.16 per share in  satisfaction  of outstanding  notes  receivable and
accrued  interest.  At March 31, 2003, a total of 800,000  shares are  available
under this plan.


                                       16

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 9 - PREFERRED STOCK

With the  merger  into its  Delaware  subsidiary,  the  Company  has  authorized
20,000,000 shares of $0.001 par value preferred stock. As of March 31, 2003, the
Company has not issued any preferred stock.

NOTE 10 - STOCK OPTIONS AND ISSUANCE COMMITMENTS

On February 25, 1991, the Company granted nonstatutory options to purchase stock
to members of its board of directors,  officers, and outside consultants.  These
options  offer a total of  860,000  shares at a price of $0.20 per share with an
exercise  period of February 25, 1991 to February 25, 2001. The expiration  date
of these options was extended to February 25, 2002 at which time all the options
expired.

Options were issued effective February 1, 1993, for a total of 250,000 shares at
a price of $0.01 per  share,  with an  exercise  period of  February  1, 1993 to
February 1, 2003.  During  2002,  options to purchase  100,000  shares of common
stock were exercised the remaining  option to purchase  150,000 shares of common
stock was exercised during January 2003. During 1995,  options for 50,000 shares
were granted at $0.20 per share,  which expire in 2005. During 1996, options for
525,000  shares were granted at $0.10 per share,  which  expire in 2006.  During
2002,  options  for 50,000  shares of common  stock were  exercised.  The shares
purchased under the Company's  option grants will be restricted and,  therefore,
may not be transferred  without  registration under applicable federal and state
securities laws.

On December 31, 1999, three officers of the Company received options to purchase
842,953  shares of common  stock in partial  payment of accrued  salaries in the
amount of $210,738. In addition,  the same three officers forgave the balance of
their accrued salaries and interest in the amount of $1,482,209.  See Note 6. In
accordance  with  Statement of Financial  Accounting  Standard No. 123, the fair
value of the  options  was  estimated  using  the  Black  Scholes  Option  Price
Calculation.  The following  assumptions  were made to value the stock  options:
strike price at $0.10,  risk free interest rate of 5%, expected life of 5 years,
and  expected  volatility  of 30% and no dividends  are expected to be paid.  At
December 31, 1999, the Company  recorded  $210,738  ($0.25 per option) to reduce
accrued  wages for the value of these  options  based upon these  Black  Scholes
assumptions.  These stock  options are  exercisable  immediately,  and expire on
December 31, 2005. See Note 6.

Omnibus Equity Incentive Plan

In 2000,  the  Company  approved an Omnibus  Equity  Incentive  Plan,  which was
approved by the  stockholders  in December  2001.  The purpose of the plan is to
promote the  long-term  success of the Company and the  creation of  stockholder
value by encouraging  employees,  outside  directors and consultants to focus on
critical long-range objectives, encouraging the attraction and retention of such
with  exceptional  qualifications  and  linking  them  directly  to  stockholder
interests  through  increased  stock  ownership.  The plan seeks to achieve this
purpose by providing for awards in the form of restricted  shares,  stock units,
options (which may constitute  incentive  stock options or  non-statutory  stock
options) and stock appreciation rights (SAR's). The aggregate number of options,
SARs,  stock units and  restricted  shares awarded under the plan were initially
4,000,000  common  shares  plus an  annual  increase  of the  lesser  of two and
one-half  percent  of the total  number of common  shares  then  outstanding  or
250,000  common  shares.  At March 31, 2003,  there are 30,000 shares  available
under this plan.


                                       17
<PAGE>



                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 10 - STOCK OPTIONS AND ISSUANCE COMMITMENTS (CONTINUED)

During  November  2001,  the Company  issued stock  options to purchase  250,000
shares of the Company's  stock at $0.25 per share to a  consultant.  The options
are  exercisable  immediately  and expire on November 15, 2011. The options have
piggyback  registration  rights  to be  effective  in the next SEC  registration
statement.  See Note 13. In accordance  with  Statement of Financial  Accounting
Standard  No. 123, the fair value of the options was  estimated  using the Black
Scholes Option Price Calculation.  The following  assumptions were made to value
the stock  options:  strike  price at  $0.25,  risk  free  interest  rate of 5%,
expected life of 10 years,  and expected  volatility of 38% and no dividends are
expected to be paid. At November 15, 2001, the Company  recorded  $75,000 ($0.30
per option) of expense to professional fees for the value of these options based
upon these Black Scholes assumptions.

During January 2002, the Company issued stock options to purchase  80,000 shares
of the Company's stock at $0.25 per share to its board of directors for services
rendered  during the year ended December 31, 2001.  The options are  exercisable
immediately  and expire on December 31, 2011.  In accordance  with  Statement of
Financial  Accounting  Standard  No.  123,  the fair  value of the  options  was
estimated  using the Black  Scholes  Option  Price  Calculation.  The  following
assumptions  were made to value the stock options:  strike price at $0.25,  risk
free interest rate of 5%, expected life of 10 years, and expected  volatility of
38% with no  dividends  expected  to be paid.  The  Company  recorded a total of
$17,200 ($0.215 per option) of expense for the value of these options based upon
these Black Scholes assumptions.

Also during the year ended  December 31, 2002,  the Company issued stock options
to purchase a total of 110,000 shares of the Company's  stock at $0.25 per share
for services.  The options are  exercisable  immediately and expire between July
28, 2007 and April 15, 2011. The options have piggyback  registration  rights to
be effective in the Company's  next SEC  registration  statement.  In accordance
with Statement of Financial  Accounting  Standard No. 123, the fair value of the
options was estimated  using the Black  Scholes  Option Price  Calculation.  The
following  assumptions  were made to value the stock  options:  strike  price at
$0.25,  risk  free  interest  rate of 5%,  expected  lives of 5 to 9 years,  and
expected volatility of 98% and no dividends are expected to be paid. The Company
recorded  a total  expense  of  $30,800  (an  average  of $0.28 per  option)  as
professional  fees for the value of the options  based upon these Black  Scholes
assumptions.

During January 2003, the Company issued stock options to purchase 180,000 shares
of the Company's stock at $0.25 per share to its board of directors for services
rendered  during the year ended December 31, 2002.  The options are  exercisable
immediately  and expire on December 31, 2012.  In accordance  with  Statement of
Financial  Accounting  Standard  No.  123,  the fair  value of the  options  was
estimated  using the Black  Scholes  Option  Price  Calculation.  The  following
assumptions  were made to value the stock options:  strike price at $0.25,  risk
free interest rate of 5%, expected life of 10 years, and expected  volatility of
98% with no  dividends  expected  to be paid.  The  Company  recorded a total of
$34,200  ($0.19 per option) of expense for the value of these options based upon
these Black Scholes assumptions.

On  February  7,  2003,  the  disinterested  members  of the board of  directors
approved  the  issuance of  4,100,000  stock  options to certain key  employees,
directors and consultants.  These  seven-year  options have an exercise price of
$0.16 per share and vest over a period of three years,  with the first one-third
of such options  vesting in 2004,  the next  one-third in 2005 and the remaining
one-third vesting in 2006. In accordance with Statement of Financial  Accounting
Standard  No. 123, the fair value of the options was  estimated  using the Black
Scholes Option Price Calculation.  The following  assumptions were made to value
the stock  options:  strike  price at  $0.16,  risk  free  interest  rate of 5%,
expected life of 7 years, and

                                       18

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 10 - STOCK OPTIONS AND ISSUANCE COMMITMENTS (CONTINUED)

expected  volatility of 82% with no dividends  expected to be paid.  The Company
will  record an expense  for the value of these  options  based upon these Black
Scholes  assumptions of $504,300 ($0.123 per option) during the next three years
as the options vest.

The following is a summary of the Company's equity compensation plans:


<TABLE>
<CAPTION>
                                                                                           Number of securities
                                     Number of securities to       Weighted-average       remaining available for
                                     be issued upon exercise      exercise price of        future issuance under
               Plan                   of outstanding options     outstanding options     equity compensation plans
----------------------------------- --------------------------- ----------------------- ----------------------------
<S>                                 <C>                         <C>                     <C>
Equity compensation plan approved                    4,720,000                   $0.17                       30,000
   by security holders (1)
Equity compensation plan not
   approved by security holders                              -                       -                      800,000
   (2)
                                    ---------------------------                         ----------------------------
Total                                                4,720,000                                              830,000
                                    ===========================                         ============================
</TABLE>


(1) Omnibus Equity Incentive Plan
(2) Stock Bonus Plan. See Note 8.

Following  is a summary of the  status of the  options  during the period  ended
March 31, 2003 and the year ended December 31, 2002:

<TABLE>
<CAPTION>
                                                                                                  Weighted Average
                                                                    Number of Shares               Exercise Price
                                                                  ----------------------        ---------------------
<S>                                                               <C>                           <C>
Outstanding at January 1, 2002                                             2,777,953                 $      0.14
Granted                                                                      190,000                        0.25
Exercised                                                                   (150,000)                       0.04
Forfeited                                                                   (860,000)                       0.20
                                                                  ----------------------        ---------------------
Outstanding at December 31, 2002                                           1,957,953                        0.13
Granted                                                                    4,280,000                        0.17
Exercised                                                                   (150,000)                       0.01
Forfeited                                                                          -                            -
                                                                  ----------------------        ---------------------
Options outstanding at March 31, 2003                                      6,087,953                        0.16
                                                                  ======================        =====================
Options exercisable at March 31, 2003                                      1,987,953                 $      0.15
                                                                  ======================        =====================
Weighted average fair value of options granted in 2003                                               $      0.16
                                                                                                =====================

</TABLE>


                                       19

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 10 - STOCK OPTIONS AND ISSUANCE COMMITMENTS (CONTINUED)

Summarized  information about stock options outstanding and exercisable at March
31, 2003 is as follows:

<TABLE>
<CAPTION>

                                                              Outstanding Options
                                     -----------------------------------------------------------------------
                                       Number of          Weighted Average             Weighted Average
           Exercise Price Range         Shares             Remaining Life               Exercise Price
           ---------------------     --------------    ------------------------     ------------------------
<S>                                  <C>               <C>                          <C>
              $0.01 - $0.25            6,087,953                6.13                        $ 0.16
</TABLE>

<TABLE>
<CAPTION>
                                                              Exercisable Options
                                     -----------------------------------------------------------------------
                                       Number of          Weighted Average             Weighted Average
           Exercise Price Range         Shares             Remaining Life               Exercise Price
           ---------------------     --------------    ------------------------     ------------------------
<S>                                  <C>               <C>                          <C>
              $0.01 - $0.25            1,987,953                4.62                        $ 0.15
</TABLE>



NOTE 11 - NON-CASH COMMITMENT AND WARRANTS

During the period ended March 31, 2003, the Company issued  warrants to purchase
a total of 100,000  shares of common  stock to two  outside  consultants.  These
warrants have an exercise price of $0.16 per share,  expire in seven-years,  and
vest over a period of three years,  with the first  one-third  of such  warrants
vesting in 2004, the next one-third in 2005 and the remaining  one-third vesting
in 2006. In accordance with Statement of Financial  Accounting Standard No. 123,
the fair value of the  warrants was  estimated  using the Black  Scholes  Option
Price  Calculation.  The  following  assumptions  were  made to value  the stock
warrants: strike price at $0.16, risk free interest rate of 5%, expected life of
7 years, and expected  volatility of 82% with no dividends  expected to be paid.
The Company  will record an expense for the value of these  warrants  based upon
these Black Scholes  assumptions of $12,300  ($0.123 per option) during the next
three years as the warrants vest.

During the year ended  December 31,  2002,  the Company  issued  warrants to two
advisors to purchase  239,400 shares of common stock in connection with the sale
of subordinated  convertible pay-in-kind notes. The warrants are exercisable for
ten years and have an  exercise  price of $0.25 per share.  In  accordance  with
Statement  of  Financial  Accounting  Standards  No. 123,  the fair value of the
warrants was estimated  using the Black Scholes  Option Price  Calculation.  The
following  assumptions  were made to value the warrants:  strike price at $0.25,
risk  free  interest  rate  of 5%,  expected  life  of 10  years,  and  expected
volatility of 98% with no dividends  expected to be paid.  During the year ended
December  31,  2002,  the  Company  recorded  $54,344  ($0.23  per  warrant)  as
professional fees for the aforementioned  services.  A cash-less exercise may be
used for all warrant transactions.

During the year ended December 31, 2001, the Company issued to four directors of
the Company  warrants to purchase up to 100,000  shares of common  stock with an
exercise  price of $0.25 per share.  The  warrants  expire  between May 2005 and
April 2006. In accordance with Statement of Financial  Accounting  Standards No.
123, the fair value of the warrants was estimated using the Black Scholes Option
Price  Calculation.  The following  assumptions were made to value the warrants:
strike price at $0.25,  risk free interest rate of 5%, expected life of 5 years,
and expected volatility of 38% with no dividends expected to be paid. During the
year ended December 31, 2001, the Company  recorded  $23,280 ($0.23 per warrant)
as directors' fees for these warrants.


                                       20

<PAGE>


                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 11 - NON-CASH COMMITMENT AND WARRANTS (CONTINUED)

On January 19,  2000,  the Company  engaged an  investment  banking firm and, as
partial  compensation  for its  services,  issued  warrants  to  purchase  up to
4,685,135  shares of the Company's  common stock with an exercise price of $0.15
per share.  The warrants  are  exercisable  for ten years.  In  accordance  with
Statement  of  Financial  Accounting  Standards  No. 123,  the fair value of the
warrants was estimated  using the Black Scholes  Option Price  Calculation.  The
following  assumptions  were made to value the warrants:  strike price at $0.15,
risk  free  interest  rate of 6.2%,  expected  life of 10  years,  and  expected
volatility of 30% with no dividends  expected to be paid.  During the year ended
December  31,  2000,  the  Company  recorded  $168,665  ($0.04 per  warrant)  as
consulting  fees for the  aforementioned  investment  banking firm  services.  A
cash-less exercise may be used for all warrant transactions. No fees are payable
to the investment advisor in connection with the exercise of the warrants, which
contain full,  unconditional piggy-back registration rights without any holdback
obligations.

Summarized information about stock warrants outstanding and exercisable at March
31, 2003 is as follows:

<TABLE>
<CAPTION>

                                     Number of             Weighted Average
                                     warrants               Remaining Life          Average exercise price
                                 ------------------    ------------------------     -----------------------
<S>                              <C>                      <C>                       <C>
       Outstanding                   5,424,535                   6.60                       $0.16
       Exercisable                   5,324,535                   6.59                       $0.16
</TABLE>


NOTE 12 - CONVERTIBLE DEBT

2000 Convertible Notes

During the year ended December 31, 2000, the Company sold in a private placement
to accredited  investors  $1,510,500 of  convertible  subordinated  debt due and
payable September 30, 2004. The debt bears interest at the rate of 10% per annum
and is payable  semi-annually  in cash or  additional  convertible  subordinated
debt.  The unpaid  accrued  interest to date of $310,826  has been  converted to
additional convertible debt.

This debt is  convertible  into shares of Company  common  stock at a conversion
price equal to $0.25 per share, subject to certain anti-dilution provisions. The
Company  offered the convertible  subordinated  debt pursuant to Section 4(2) of
the  Securities  Act  of  1933,  as  amended,  and  Rule  506 of  Regulation  D,
promulgated  under the Securities  Act. In connection  with the placement of the
debt,  the Company  paid a loan  origination  fee of  $113,288 to its  financial
advisor,  in addition to the granting of an option to the  financial  advisor to
purchase an equivalent principal amount of convertible  subordinated debt at the
face  amount  thereof  over a period of ten  years.  The  aforementioned  fee is
currently  included in other assets and is being  amortized over the term of the
debt. Amortization for the period ended March 31, 2003 was $6,928.

During the year ended  December 31, 2001, a total of $355,000  original debt and
$46,109 of accrued interest and previously converted interest was converted into
1,605,346  shares of common  stock at $0.25 per  share.  During  the year  ended
December  31,  2002,  a total of $245,000  original  debt and $41,928 of accrued
interest and previously  converted  interest was converted into 1,147,706 shares
of common  stock at $0.25 per share.  During the period  ended March 31, 2003, a
total of $15,000  original  debt and $4,119 of accrued  interest and  previously
converted interest was converted into 76,476 shares of common stock at $0.25 per
share.

                                       21
<PAGE>


                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 12 - CONVERTIBLE DEBT (CONTINUED)

2000 Convertible Notes (Continued)

At March 31,  2003,  the  remaining  2000  notes,  including  converted  accrued
interest, may be converted into a total of 4,608,604 shares of common stock.

2002 Convertible Notes due September 30, 2004

During the year ended December 31, 2002, the Company sold in a private placement
to accredited  investors 2002  Subordinated  Convertible  Pay-in-kind  Notes due
September 30, 2004  ("2002-2004  convertible  notes") in the principal amount of
$1,148,500 in cash. A Company director personally guaranteed a total of $500,000
worth of this debt offering.  The 2002-2004  convertible  notes bear interest at
the rate of 11% per annum payable  semi-annually in cash or additional 2002-2004
convertible  notes.  The unpaid  accrued  interest  to date of $83,896  has been
converted to additional convertible debt.

This debt is  convertible  into shares of Company  common  stock at a conversion
price equal to $0.25 per share, subject to certain anti-dilution provisions. The
Company  offered the convertible  subordinated  debt pursuant to Section 4(2) of
the  Securities  Act  of  1933,  as  amended,  and  Rule  506 of  Regulation  D,
promulgated  under the Securities  Act. In connection  with the placement of the
debt,  the  Company  paid a loan  origination  fee of $41,895  to two  advisors,
together with a warrant to acquire  239,400  shares of common stock at $0.25 per
share.  Amortization of the loan  origination fee for the period ended March 31,
2003 was $3,794.

At March 31, 2003, the remaining  2002-2004 notes,  including  converted accrued
interest, may be converted into a total of 5,064,032 shares of common stock.

2002 Convertible Notes due June 1, 2006

During the year ended December 31, 2002, the Company sold in a private placement
to accredited investors 2002 Subordinated Convertible Pay-in-kind Notes due June
1, 2006 ("2002-2006 convertible notes") in the principal amount of $3,055,000 in
cash. The interest rate of the 2002-2006  convertible notes is 11% per annum for
$2,555,000  of the debt,  and 12.5% per annum for $500,000 of the debt,  payable
semi-annually  in cash or additional  2002-2006  convertible  notes.  The unpaid
accrued   interest  to  date  of  $173,428  has  been  converted  to  additional
convertible debt.

This debt is  convertible  into shares of Company  common  stock at a conversion
price equal to $0.25 per share, subject to certain anti-dilution provisions. The
Company  offered the convertible  subordinated  debt pursuant to Section 4(2) of
the  Securities  Act  of  1933,  as  amended,  and  Rule  506 of  Regulation  D,
promulgated  under the Securities  Act. In connection  with the placement of the
debt,  the  Company  paid a related  party a loan  origination  fee of  $60,000.
Amortization  of the loan  origination fee for the year ended March 31, 2003 was
$3,750.

At March 31, 2003, the remaining  2002-2006 notes,  including  converted accrued
interest, could be converted into a total of 13,273,464 shares of common stock.

2002 Convertible Notes

The proceeds from the two  aforementioned  placements of 2002 convertible  notes
will  be  used to  satisfy  outstanding  payables  and to pay  operating  costs,
scientific  development costs and patent  application legal costs, and to pursue
certain  collaborative  relationships with other biotechnology or pharmaceutical
companies.


                                       22

<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 13 - COMMITMENTS AND CONTINGENCIES

Consulting Contract

During  2001,  the  Company  signed a  contract  with a  consultant  to  provide
information on possible partnering companies to divest or license certain rights
to its  technologies  or  products.  The Company has agreed to pay a success fee
based on a percentage of the  transaction  value of any  divestiture  or license
brought about by this contract. In addition, if the success fee is earned by the
consultant,  the  Company  will issue a warrant to the  consultant  to  purchase
100,000 shares of common stock at a 10% discount of fair market value.

Occupancy Agreements

During the period ended March 31, 2003, the company  entered a verbal  agreement
to pay  approximately  $4,000 a month to a firm  owned  by the  Company's  chief
executive  officer and chief  financial  officer for tax  preparation  services,
monthly accounting, and reimbursement for rent and employee benefits.

The company also entered into a verbal  agreement  for research and  development
laboratory space from a firm, owned by a director,  at a monthly cost of $6,110.
The Company also reimburses the firm for research and development  services at a
monthly cost of approximately $12,000.

Contracts

During June 2002,  the Company  entered into a  cooperative  agreement  with the
Department of Energy's (DOE) Pacific Northwest National  Laboratory ("PNNL") for
Research  and  Development.  According  to this  agreement,  the Company will be
responsible  for up to 50%  of  the  costs  associated  with  the  research  and
development,  principally  represented  by  non-cash  in-kind  contributions  of
approximately  $480,000 over a period of two years. In return,  DOE, has granted
the  Company  a  non-exclusive,  non-transferable,   royalty-free,  field-of-use
license to any inventions PNNL derives under the agreement. The Company also has
a first option to negotiate for greater rights, such as exclusive, transferable,
domestic and foreign  marketing and development  rights.  If the Company obtains
the right to sublicense,  the sublicenses must be royalty-bearing,  and, subject
to negotiation,  the Company will pay a reasonable  royalty to PNNL,  which will
share   prospective   royalties   with  a  Russian   research   facility,   upon
commercialization, if any, of the resulting research.

During  March  2003,  the  Company  entered  into an  agreement  for the design,
construction   and  validation  in  accordance  with  FDA  standards  and  other
regulatory  requirements  of a new  pilot  formulation  and  filling  room to be
located in Columbia,  Maryland,  within the facilities  currently  leased to New
Horizons  Diagnostics,  Inc., a company  principally owned by Lawrence Loomis, a
director  of the  Company.  The  contract  calls for a payment of  approximately
$164,000.


                                       23
<PAGE>

                           ADVANCED BIOTHERAPY, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 14 - RESTATEMENT OF SHARES

During the quarter  ended March 31,  2002,  it was  discovered  that the Company
mistakenly  cancelled 850,000 shares of common stock in 1999. Under the terms of
a settlement  agreement and mutual general release and an escrow  agreement both
dated July 31, 1991 (collectively referred to as "settlement  agreements") among
the Company, a shareholder,  a consultant and certain other parties, the Company
issued 850,000 shares in the name of the consultant and placed these shares into
escrow.  These shares were to be released to the consultant upon  performance of
certain  services  that were to be  provided  by the  consultant  no later  than
January 15, 1993. The settlement  agreements also stated that the 850,000 shares
of common stock would be distributed back to the original  shareholder,  if such
services were not provided by the consultant. Such services were not provided by
the  consultant,  in whole or in part,  and all 850,000 shares were cancelled by
the Company in 1999. However, instead of being cancelled, the shares should have
been returned to the original  shareholder  in 1999  pursuant to the  settlement
agreements.  Therefore, the shares were reissued to the original shareholder and
are  reflected in the  accompanying  financial  statements as if they were never
cancelled.

                                       24

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Except for the historical  information  contained herein,  the matters discussed
herein  are by  their  nature  forward-looking.  Investors  are  cautioned  that
forward-looking  statements or projections made by the Company,  including those
made in this  document,  are subject to risks and  uncertainties  that may cause
actual results to differ  materially from those projected.  The Company operates
in a rapidly changing environment that involves a number of risks, some of which
are beyond the Company's  control.  Future  operating  results and the Company's
stock  price  may  be  affected  by a  number  of  factors,  including,  without
limitation:  availability of capital for research and development;  availability
of capital for clinical trials;  opportunities  for joint ventures and corporate
partnering;  opportunities  for mergers and acquisitions to expand the Company's
biotechnology  base or  acquire  revenue  generating  products;  the  results of
preclinical  and  clinical  trials,  if any;  regulatory  approvals  of  product
candidates new indications and manufacturing facilities;  health care guidelines
and policies  relating to prospective  Company products;  intellectual  property
matters  (patents);  and competition.  Factors that could cause or contribute to
such differences include, but are not limited to; those discussed in the section
entitled "Item 1. Business," and all  subsections  therein,  including,  without
limitation,   the  subsections  entitled,   Technical   Background,   Government
Regulation, Federal Drug Administration Regulation, Competition and Factors That
May Affect the Company, and the section entitled "Market for Registrant's Common
Equity and Related  Stockholder  Matters," all contained in the Company's Annual
Report,  as amended,  on Form  10-KSB/A  for the fiscal year ended  December 31,
2002. Given these risks and uncertainties,  any or all of these  forward-looking
statements may prove to be incorrect. Therefore, you should not rely on any such
forward-looking  statements.  Furthermore,  we do not  intend  (and  we are  not
obligated) to update publicly any forward-looking  statements.  You are advised,
however,  to consult any further  disclosures we make on related subjects in our
reports to the Securities and Exchange Commission.

Results of Operations

Liquidity and Capital Resources

         As of March 31, 2003, the Company had issued and outstanding 42,224,004
shares of its Common Stock. The Company previously reported that it had arranged
to repurchase,  subject to completion of documentation,  an aggregate  1,603,789
shares of common stock from Edmond Buccellato,  the Company's President and CEO,
and two other directors, Lawrence Loomis and Boris Skurkovich, M.D., in order to
enable   the   Company   to  comply   with  the   Sarbanes-Oxley   Act  of  2002
("Sarbanes-Oxley Act"), which, as of July 30, 2002, prohibits loans to directors
and officers.  The foregoing  repurchase was completed  during the quarter ended
March 31, 2003, and,  accordingly,  reduces the number of issued and outstanding
shares of the Company's common stock by an aggregate 1,603,789 shares.


                                       25
<PAGE>

The  Company  is a development stage company and its principal assets consist of
cash, marketable securities and patents and patent applications. The Company had
$2,671,601  in  cash  and  marketable  securities  as of March 31, 2003. For the
twelve-month  period  subsequent to March 31, 2003, the Company anticipates that
its minimum cash requirements to continue as a going concern for the next twelve
months  will  be  less  than  $1,500,000,  and  therefore,  believes that it has
adequate cash to maintain operations during that period. The Company's objective
is  to  establish collaborative relationships with one or more pharmaceutical or
biotechnological  companies  that  could  result in the generation of licensing,
milestone  and  royalty  payments  to  the  Company.  The Company is, therefore,
seeking  out-licensing  and  co-development  arrangements  related  to  its
intellectual  property that will generate recurring revenue and cash flow. As of
the  date  hereof,  the  Company  has  not  entered  into  any  agreement with a
pharmaceutical  or  biotechnology  company,  or  any  such  out-licensing  or
co-development  arrangements.

Three Months Ended March 31, 2003 and 2002

For  the three months ended March 31, 2003, the Company realized a net loss from
operations  of  $458,369  compared to a net loss from operations of $176,203 for
the  three  months  ended  March 31, 2002. The Company had increases in expenses
over  the  three  months  ended  March  31,  2002,  consisting  primarily of the
following: increased research and development expenses in the amount of $79,869,
increased  interest  expense  in the amount of $118,873 related to the Company's
convertible  subordinated  debt  and subordinated convertible pay-in-kind notes,
increased rent in the amount of $26,371, increased depreciation and amortization
in  the  amount  of  $10,894, increased travel and entertainment expenses in the
amount  of  $648  related  to  business  development  and other Company matters,
increased  administrative  salaries  and  benefits  in  the  amount  of $53,833,
increased  general  and  administrative expenses in the amount of $6,051; net of
decreased  professional fees in the amount of $15,009 and increased interest and
dividend  income  in  the  amount  of  $8,589.

RESTATEMENT OF COMPANY FINANCIAL STATEMENTS

The  Company's  financial  statements  for the years ended December 31, 2000 and
1999,  respectively, have been restated to reflect the correction of an error in
common  stock  outstanding  and  weighted  average number of shares outstanding.
Subsequent  to  December 31, 2001, it was discovered that the Company mistakenly
cancelled  850,000  shares  of  common  stock  in  1999.  Under  the  terms of a
settlement  agreement  and  mutual  general release and an escrow agreement each
dated  July 31, 1991 (collectively referred to as "settlement agreements") among
the  Company,  Dr.  Simon Skurkovich, a third-party consultant and certain other
parties,  the  Company  issued  850,000 shares in the name of the consultant and
placed  those  shares  into  escrow.  These  shares  were  to be released to the
consultant  upon performance of certain services that were to be provided by the
consultant no later than January 15, 1993. The settlement agreements also stated
that  the  850,000  shares  of  common  stock  would be distributed to Dr. Simon
Skurkovich,  if such services were not provided by the consultant. Such services
were not provided by the consultant, in whole or in part, and all 850,000 shares



                                       26
<PAGE>

were cancelled by the Company in 1999. Instead of being cancelled,  however, the
shares should have been  distributed to Dr. Simon Skurkovich in 1999 pursuant to
the  settlement  agreements.  Therefore,  the shares were  reissued to Dr. Simon
Skurkovich and are reflected in the accompanying financial statements as if they
were never cancelled.

ITEM 3.      CONTROLS AND PROCEDURES

In  accordance  with Item 307 of Regulation S-B promulgated under the Securities
Act of 1933, as amended, and within 90 days of the date of this Quarterly Report
on  Form  10-QSB, the Chief Executive Officer and Chief Financial Officer of the
Company  (the "Certifying Officers") have conducted evaluations of the Company's
disclosure  controls  and  procedures.  As  defined  under  Rules  13a-14(c) and
15d-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange  Act"),  the  term "disclosure controls and procedures" means controls
and  other  procedures of an issuer that are designed to ensure that information
required  to  be disclosed by the issuer in the reports that it files or submits
under  the  Exchange Act is recorded, processed, summarized and reported, within
the  time  periods  specified  in  the  Commission's rules and forms. Disclosure
controls  and  procedures  include,  without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports  that  it  files  or  submits  under the Exchange Act is accumulated and
communicated  to  the  issuer's  management,  including  its principal executive
officer  or  officers  and  principal  financial officer or officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required  disclosure.  The  Certifying  Officers  have  reviewed  the  Company's
disclosure  controls  and  procedures  and  have concluded that those disclosure
controls  and  procedures  are  effective in causing information to be recorded,
processed,  summarized  and  reported  within  the time periods specified in the
Commission's  rules  and  forms and communicated to management of the Company to
allow timely decisions regarding the Company's public disclosures. In compliance
with  Section  302  of the Sarbanes-Oxley Act of 2002, (18 U.S.C. 1350), each of
the  Certifying  Officers  executed  an Officer's Certification included in this
Quarterly  Report  on  Form  10-QSB.

As of the date of this Quarterly Report on Form 10-QSB,  there have not been any
significant  changes in the Company's internal controls or in other factors that
could significantly affect these internal controls subsequent to the date of the
Certifying Officers' evaluation.

PART II

ITEM 2. (c)     CHANGES IN SECURITIES

During  the  quarter  ended  March  31, 2003, the Company granted options to the
directors,  officers  and  consultants  listed  below  to  purchase an aggregate
4,100,000  shares  of Common Stock at an exercise price of $0.16 per share under
the  Company's  2000  Omnibus Equity Incentive Plan (the "OEI Plan"). Subject to
the  terms  applicable to such grants and the OEI Plan, the stock options become
exercisable  in  equal installments on the first, second and third anniversaries
of  the  grant  date  (February  7, 2003), and expire seven years from the grant
date.  The  stock  options  cease  to  vest  upon  complete  termination  of the
optionee's  services  as  a  director,  officer,  employee  or consultant of the
Company.


                                       27
<PAGE>


           OPTIONEE NAME                          NUMBER OF OPTION SHARES
           -------------                          -----------------------
         John M. Bendheim                                  350,000
       Edmond F. Buccellato                              1,500,000
           Jeanne Kelly                                    150,000
          Lawrence Loomis                                1,200,000
      Boris Skurkovich, M.D.                               450,000
      Simon Skurkovich, M.D.                               450,000

In addition,  the Company  granted  warrants to purchase 50,000 shares of Common
Stock  at an  exercise  price  of  $0.16  per  share  to each  of the  following
consultants: Dr. Seji Haba and Joseph Tartel. Subject to the terms applicable to
such grants, the warrants become exercisable in equal installments on the first,
second and third  anniversaries of the grant date (February 7, 2003), and expire
seven  years  from the grant  date.  The  warrants  cease to vest upon  complete
termination of the recipient's  services as a consultant,  employee,  officer or
director of the Company.

The  above  described  stock  options  and  warrants  were  granted to officers,
directors  and  consultants  based  upon, among other factors, the potential for
individual  contribution  to  the  Company.  In  the case of Mr. Buccellato, Mr.
Loomis  and  Dr. Boris Skurkovich, consideration also was given to the amount of
stock  bonus plan shares which the Company repurchased from each such individual
in  order  to  enable  the  Company  to  comply with the Sarbanes-Oxley Act. The
disinterested  members  of  the  Board of Directors determined the amount of the
stock  options  and warrants and the exercise price of the options and warrants,
which  was  set  at  fair  market  value  on  the  grant  date.

ITEM 5.

On or around  March 31,  2003,  the  Company  entered  into an  agreement  ("IPS
Agreement") with Integrated Project Services, a national integrated  engineering
firm providing technical services focused on clean, compliant industries.

The  IPS Agreement provides for the design, construction and validation of a new
pilot  formulation  and  filling  room  ("Facility")  to be located in Columbia,
Maryland,  within  the  facilities currently leased to New Horizons Diagnostics,
Inc., a company principally owned by Lawrence Loomis, a director of the Company.
The  responsibilities  of  Integrated Project Services include, among others, to
provide an FDA approved manufacturing space for the Facility, and to build a new
sterile  unit  that will be validated in accordance with FDA standards and other
regulatory  requirements.  The  project  cost  for  the Facility is estimated at
$164,500,  excluding  costs for additional services and equipment not covered by
the  IPS  Agreement.

                                       28
<PAGE>

The  purpose  of the Facility, among others, is to test and manufacture clinical
grade  antibodies  for  clinical  trial purposes. The Company estimates that the
annual  labor  and  maintenance  cost  for  the  Facility  will be approximately
$150,000,  excluding  capital  expenditures and equipment leases. The Company is
seeking  a term loan to finance the project, but no assurances can be given that
financing  will  be  available  or,  if  available, on terms satisfactory to the
Company.

Reference is made to Exhibit 10.12 attached to this Form 10-QSB,  which contains
the IPS Agreement,  and the foregoing  summary of the IPS Agreement is qualified
in its entirety by this reference.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a)      Exhibit
            Number               Description

             10.12               Integrated  Project  Service  Agreement
                                 for Pilot  Formulation  and Filling
                                 Area dated March 31, 2003.

               99.1              Certification    of   Chief   Executive
                                 Officer  Pursuant to 18 U.S.C.  Section
                                 1350,  as Adopted  Pursuant  to Section
                                 906 of the Sarbanes-Oxley Act of 2002.

               99.2              Certification    of   Chief   Financial
                                 Officer  Pursuant to 18 U.S.C.  Section
                                 1350,  as Adopted  Pursuant  to Section
                                 906 of the Sarbanes-Oxley Act of 2002.



   (b)  REPORTS ON FORM 8-K
        -------------------

        Current Report on Form 8-K dated March 10, 2003   Item 5.  Other Events



                                       29
<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this Report on Form 10-QSB to be signed on its behalf
by the undersigned thereunto duly authorized as of May 14, 2003.

                                            Advanced Biotherapy, Inc.
                                            (Registrant)


By:      S/EDMOND F. BUCCELLATO             By:      S/WILLIAM M. FINKELSTEIN
         ---------------------------                 ---------------------------
         Edmond F. Buccellato                        William M. Finkelstein
         President and CEO                           Chief Financial Officer







                                       30
<PAGE>

  Certification by Edmond F. Buccellato, President and Chief Executive Officer
                                       of
                            Advanced Biotherapy, Inc.

I, Edmond F. Buccellato, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Advanced  Biotherapy,
Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions);

     a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and


                                       31
<PAGE>

     b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:    May 14, 2003

                                      S/EDMOND F. BUCCELLATO
                                      -------------------------------------
                                      Edmond F. Buccellato
                                      President and Chief Executive Officer


                                       32
<PAGE>

        Certification by William M. Finkelstein, Chief Financial Officer
                                       of
                            Advanced Biotherapy, Inc.

I, William M. Finkelstein, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Advanced  Biotherapy,
Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions);

     a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and


                                       33
<PAGE>

     b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:    May 14, 2003

                                                S/WILLIAM M. FINKELSTEIN
                                                --------------------------
                                                William M. Finkelstein
                                                Chief Financial Officer






                                       34
<PAGE>

                                  EXHIBIT INDEX

            EXHIBIT                          DESCRIPTION
            -------                         -------------



             10.12               Integrated  Project  Service  Agreement
                                 for Pilot  Formulation  and Filling
                                 Area dated March 31, 2003.

               99.1              Certification    of   Chief   Executive
                                 Officer  Pursuant to 18 U.S.C.  Section
                                 1350,  as Adopted  Pursuant  to Section
                                 906 of the Sarbanes-Oxley Act of 2002.

               99.2              Certification    of   Chief   Financial
                                 Officer  Pursuant to 18 U.S.C.  Section
                                 1350,  as Adopted  Pursuant  to Section
                                 906 of the Sarbanes-Oxley Act of 2002.



                                       35
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>3
<FILENAME>doc4.txt
<TEXT>

<PAGE>
Exhibit 10.12

                        GUARANTEED MAXIMUM PRICE PROPOSAL

                                       For

                             ADVANCED BIOTHERAY,INC

                        Pilot Formulation / Filling Area

                                 At New Horizons
                               COLUMBIA, MARYLAND

                                   Prepared By

                           Integrated Project Services

                        1122 Kenilworth Drive, Suite 405
                                Towson, MD 21204
                                  410.296.8590
                                fax 410.296,8594
                                  www,ipsdb.com

                                        1

 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204-
            Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.corn


<PAGE>

March 21, 2003

Mr. Ed Buccellato
President/CEO
Advanced Biotherapy, Inc.
6355 Topanga Canyon Blvd.
Woodland Hills, CA 91367

RE:      Pilot Formulation/Filling Area
         New Horizons Facility
         Professional Design and Construction Services
         GMP Proposal
         ITS Project No. MDD03001.1
         IPS Proposal No. MDD031044.1

Dear Ed:

IPS -  Integrated  Project  Services is pleased to present  our GMP  (Guaranteed
Maximum  Price)  for  the  Final  Engineering,   Construction  Management,   and
Commissioning  of  your  manufacturing   expansion.   A  separate  proposal  for
Validation  Services  is  also  enclosed  herein.  Our  GMP  Cost  Estimate  and
clarifications is based on the attached Design Documents and Milestone  Schedule
we are submitting with this proposal.

This GMP  Proposal  outlines  how IPS will  provide  you  with a  compliant  and
functional  Pilot  Formulation/Filling  Area to meet  FDA  requirements.  IPS is
seeking to expand our current  commercial  agreement  to include  the  remaining
final engineering  activities,  construction  management,  and commissioning and
validation  responsibilities for this area of the project. The attached proposal
will provide the overall costs required to complete and validate the facility.

From our  involvement  in the  project  over the past month and a half,  we have
gained a thorough  understanding  of your  programmatic  needs,  as well as your
desire to keep the first costs for the construction of the facility to a minimum
while still producing a compliant  facility.  We fully  comprehend your concerns
for  maintaining  your  capital  allocation  and your  desire to  complete  this
facility expansion at the lowest cost possible.

We feel that the industry  expertise and creativity  that our team has exhibited
should bring a level of confidence to your project team. As our role  continues,
we are positive that our design,  construction,  and  validation  team will also
provide  the  level  of  experience  and   cooperation   to  minimize   Advanced
Biotherapy's  day-to-day  "issues" during the duration of IPS'  management.  Our
proposal  will  reduce  your  risks  going  forward in many  aspects,  including
financial cost management, schedule adherence, day-to-day project management and
regulatory compliance.

                                        2

 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204-
             Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com



<PAGE>

Ed, attached you will find a detailed documentation of our proposed deliverables
for this project.  We have developed  this proposal based on our  discussions to
date and believe it provides Advanced  Biotherapy with the best solution for the
task at hand. We look forward to the  opportunity of continuing to work with you
on this  challenging  project  and any  questions  you may have in regard to our
offer. Should you have any questions or require any additional clarification, do
not hesitate to contact this office.

Very truly yours,

INTEGRATED PROJECT SERVICES

William Deckert
Director, Technical Sales

Cc:      Chris Maddox
         Chris DiPaolo

                                        3

 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204-
             Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com

<PAGE>

                                TABLE OF CONTENTS

1.0 PROJECT OVERVIEW

     1.1 Executive Summary
     1.2 Key Issues for Project Success
     1.3 Design/Build Project Strategy
     1.4 Design/Build Project Discussion

2.0 SCOPE OF SERVICES

     2.1 Project Management

     2.2 Final Engineering & Design

     2.3 Procurement, Construction Administration and Construction Management

3.0 BASIS OF DESIGN
    Design Criteria/System Description

4.0 GMP BUDGET

5.0 CLARIFICATIONS/ASSUMPTIONS/EXCLUSIONS

6.0 MILESTONE SCHEDULE

7.0 DRAWINGS
    Site Plan
    Egress Plan
    Demolition Plan
    Floor Plan
    Reflected Ceiling Plan
    Schedules
    Ductwork Flow Plan
    Airflow Diagram
    Electrical Single Line Diagram

8.0 COMMERCIAL TERMS

9.0 PROJECT ORGANIZATION

10.0 RESUMES

11.0 2003 RATE SCHEDULE

12.0 APPENDIX
     Validation Proposal

                                        1

  1122 Kenilworth Drive - Exchange Building Suite 405, Towson, Maryland 21204-
             Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com


<PAGE>

1.0  PROJECT OVERVIEW

     1.1  Executive Summary

     IPS has been retained by Advanced Biotherapy, Inc. to provide a Master Plan
and Preliminary  Engineering  along with an outline for a Validation Master Plan
and a Budgetary Cost Estimate.  These items are being  completed by IPS and will
be  submitted  to the owner  for  review.  Subsequently  to  reviewing  the Cost
Estimate we were asked to proceed with  determining  a Guaranteed  Maximum Price
(GMP) Cost Estimate for the design,  construction,  and validation the new Pilot
Formulation  and Filling  Room.  This  proposal  outlines  the scope of services
included in the GMP that IPS has agreed to provide as part of to the performance
of this work.

     Advanced  Biotherapy is undertaking a renovation of the existing  warehouse
space located at the New Horizons  facility in Columbia,  MD. The expansion will
include about 640 square feet of space for a new fill room. Two other rooms will
be  renovated  to become part of this suite.  A new  mechanical  system shall be
dedicated  to the  suite  and  power  will be taken  from the main  feed for the
existing building.

The objectives of the project are:

o    Provide a FDA approved manufacturing space for a new cGMP pilot formulation
     and filling area.

o    Build a new sterile  suite that will be a validated in  accordance  to meet
     FDA standards.

o    Build a competitive, quality, and cost effective facility.

o    Deliver a safe and functional building.

o    Assure that the facility meets applicable regulatory requirements.

This  project  entails the  renovation  of the existing  warehouse  area located
behind the existing lyophilizer and will also include renovation of two existing
rooms to house the new gowning area and a material prep room.  The material prep
room shall also be used to store raw materials and bottled WFI water.  Ancillary
rooms and air locks will also be created to support the new  program.  Glassware
for this  facility  will be leased  and set back and forth  from the  vendor for
sterilization,

The proposed new facility program is as follows:

-------------------------------------------- ---------------------------
ROOM / FUNCTION                              NEW AREA
-------------------------------------------- ---------------------------
100 Fill Room                                         REDACTED
-------------------------------------------- ---------------------------
101 Gowning Room                                      REDACTED
-------------------------------------------- ---------------------------
102 Airlock                                           REDACTED
-------------------------------------------- ---------------------------
103 Material Prep                                     REDACTED
-------------------------------------------- ---------------------------
TOTAL RENOVATED AREA:                                 REDACTED
-------------------------------------------- ---------------------------

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

                             Confidential Treatment

Advanced  Biotherapy  seeks operational use of the Pilot Formulation and Filling
area  (REDACTED).  To  meet  this schedule, the facility should be completed and
validated by (REDACTED). The proposed implementation plan for this project calls
for  a  fast-track design/build approach that allows for final design, equipment
procurement,  and  construction  activities  to occur simultaneously in order to
meet  the required schedule. In the Basis of Design that follows in Section 3.0,
IPS  provides  the  criteria  for  final  design.

                                        2

  1122 Kenilworth Drive - Exchange Building Suite 405, Towson, Maryland 21204 -
             Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com

<PAGE>


Our GMP Cost Estimate is based on the  engineering  documentation  identified at
the end of this  document.  IPS'  professional  cost  estimating  team will seek
project  pricing  from  some of the local  mechanical,  electrical  and  general
construction  subcontractors  and  vendors in and around the area to confirm our
estimates in the market  place.  A detailed  cost  breakdown  is included  which
identifies the specific  quantities of materials included and the items excluded
as part of this scope of work.  Allowances have been identified and included for
items where  final  scope  definition  has yet to be  established  and work that
relates directly to Owner furnished  equipment.  The allowances have been set at
levels of cost, which should  accommodate the design intent,  which is described
hereinafter.

The Total  Cost of the  Guaranteed  Maximum  Price is:  One  Hundred  Sixty Four
Thousand Four Hundred Eleven Dollars ($164,411.00)

1.2  Key Issues for Project Success

     The  successful  delivery  of a  technically  driven  project  is a complex
     endeavor,  IPS is up to the  challenge  since  this is our  chosen  area of
     expertise and daily practice. Over 95% of our firm's activities are devoted
     toward implementation of cGMP-driven  pharmaceutical projects. This project
     has multiple  critical issues,  which must be clearly addressed in order to
     achieve the program's  objectives.  The discussion,  which follows,  offers
     insights on a proposed approach.

1.2.1 Quality

     This project requires exceptional attention to detail in order to deliver a
     facility which meets Advanced Biotherapy  performance  requirements and the
     necessary  conformance and compliance  requirements  imposed on the project
     from federal,  state, and local authorities,  including FDA, EPA, and OSHA.
     Our team is extensively  skilled and  knowledgeable  of the  pharmaceutical
     processing and related  technologies and is capable of translating Advanced
     Biotherapy  requirements  into effective  facility  solutions.  In the last
     fourteen  years,  IPS has  successfully  completed  several hundred million
     dollars of pharmaceutical  facilities; all of which have been successful in
     their achievement of business and technical objectives.

1.2.2 Compliance

     Establishing a compliant  process  facility is perhaps the most challenging
     activity in the capital project area of bio/pharmaceutical enterprises. The
     many complicated and overlapping compliance imperatives are impressive. Not
     only must the facility function in a way that achieves business  objectives
     for a time to market,  flexibility,  and cost  advantage,  but the facility
     must  also  achieve  these   challenges   within  an  evolving   regulatory
     environment.  The  integration  of the IPS  project  team will  result in a
     facility  that  complies  directly  with FDA  regulations  for current Good
     Manufacturing Practices and achieve an excellent operational profile from a
     safety,  health,  and  an  environmental   perspective.   These  two  major
     objectives for  compliance  will be integrated  into a successful  facility
     design that also gracefully  accommodates  prudent life cycle operating and
     maintenance costs.

     Delivering  value in this  environment is a considerable  challenge for the
     design/build team. IPS has such experience and has demonstrated  successful
     performance in designing and  constructing  challenging  facilities of this
     type.  Since we are  designers  as well as  builders  and  validators,  our
     complete project cycle experience brings invaluable insights

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     and relevant practical experience to achieve Advanced Biotherapy objectives
     on this  project.  Our  designers  are  often  called  to  closely  support
     construction on behalf of our design/build projects. When our designers are
     asked   to   prepare   contract   documents   and   provide    construction
     administration, we are well versed and remain excited about the achievement
     of these challenges.

     Our team is well grounded in real-time,  modern compliance and performance.
     Our validators routinely review  constructabilty and validatability  issues
     and are challenged,  daily, to plan,  commission,  and implement validation
     plans  based  on  our  designs.  IPS  total  in-house  capabilities  are an
     excellent match for this project's  requirements  and we are very confident
     that we can meet the project's business and technical objectives and become
     a valued member of the project team.

1.2.3 Speed

     This project's  objectives  must be  accomplished  within a fixed amount of
     calendar  time.  We have  complete  confidence in our abilities to meet the
     timetable. This project is well within our capabilities to totally support,
     not only from a technical standpoint,  but also from in-house resources. We
     believe  having  the right  talent in the right  numbers  is  essential  to
     meeting this project's need for timely  achievement of deadlines.  Since we
     are designibuilders, we are routinely involved with speed critical projects
     and our entire team  routinely  works  quickly and  efficiently  toward our
     clients' objectives.  This project is a good fit for our team The project's
     speed and need for tight  coordination with the operations of your existing
     facility are evident and well understood by IPS

1.2.4 Technology

     Implementing  sophisticated  processing  technologies  within a challenging
     building  environment  for cGMP and  safety  compliance  is a  considerable
     design  challenge.  Only  firms with  extensive  practical  experience  can
     achieve  these  technical  objectives.  IPS  is up to  the  challenge.  Our
     practice is specifically focused on sterile manufacturing.  During the last
     fourteen   years  we  have  been  involved   with  many  multiple   product
     manufacturing  facilities  and  pilot  plants,  as well as a full  range of
     design, build, and validation assignments of bio-tech facilities. Our staff
     is deeply  skilled and  experienced  in these  endeavors  and we have truly
     relevant experience and knowledge to bring to this project.

     Our  design/build  team  routinely  supports   validation  efforts  through
     documentation  and field support.  This project is a great  opportunity for
     IPS  to  re-demonstrate  our  skills  and  commitment.  We  are  up to  the
     challenge.  The result will be a design that  creates  the  flexibility  to
     address current and anticipated technology.

1.2.5 Leadership

     Achieving Advanced Biotherapy's  technical and business objectives for this
     project  requires  teamwork  and a great plan.  Tight  coordination,  clear
     responsibilities, and excellent communication are essential on this project
     if we are  to  achieve  our  goals  and  meet  the  challenges  ahead.  IPS
     understands these dynamics and has demonstrated success in becoming a vital
     part of owner's teams under these demanding  circumstances.  We are leaders
     in our field and have an excellent  grasp of our role and  responsibilities
     on this  project.  Advanced  Biotherapy  can count on us 100% to be prudent
     team members. Our partner-in-charge  approach to project management is very
     effective.  We  pledge  our total  corporate  commitment  on this  project.
     Decisions will be streamlined and support

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     will be solid and timely.  We will share all decisions  with a strong sense
     of professionalism and purpose.

     IPS' offer provides Advanced Biotherapy with a single point of contact from
     concept through qualifications.  This approach provides Advanced Biotherapy
     with one individual that has full  responsibility  and  accountability  for
     coordination, communication, and commitment.

1.3  Design/Build Project Strategies

     We  propose to  implement  this  project  with a  fast-track,  design/build
     approach.  The key elements of such an approach call for prudent completion
     of design,  timely purchase of long-lead  items,  and fieldwork in order to
     achieve the phased  occupancies  required by June 2003.  We will provide an
     integrated  project  schedule for  achieving our  objectives.  Our proposed
     project approach calls for the following major activities going forward:

     o    Re-confirmation,  through  the  documentation  contained  within  this
          Proposal, of the program requirements and project intent to ensure all
          of  Advanced   Biotherapy's   process  and  utility  requirements  are
          addressed.

     o    Further  development  and  implementation  of a critical  path  method
          construction  schedule as a key project management tool.

     o    Development of master plan for validation and compliance (not included
          in IPS scope at this  time)

     o    Development and analysis of bids for subcontracted work.

     o    Procurement  of long lead  material and release of HVAC  equipment and
          controls so that they are  received in a timely  manner in  accordance
          with the project schedule requirements.

     o    Introduction  and  inclusion  of   sub-contractors   on  final  design
          documentation   for   constructability   reviews   and   efficiencies.

     o    Integrated  construction  management for scheduling,  cost control and
          subcontractors  managed at the site by IPS personnel.

     o    Detailed review of installations  and project progress for the purpose
          of commissioning and start-up.

     o    Commissioning, validation (of selected systems and qualifications) and
          closeout package turnover.

1.4 Design/Build Project Discussion

     1.4.1Staged Design  Services:  We are ready to begin the detailed  stage of
          our design  services.  The costs  expended to date are not included in
          this  Proposal.  The effort to complete  the project will entail final
          dimensions  and  adding  clear  definition  to the  concept  drawings.
          Engineering   solutions  and   conformance  to  the  local  codes  and
          authorities  will be key activities.  Also, this proposal will include
          the design support of  construction  activities.  Our design team will
          remain intimately involved with the field. construction throughout the
          balance of the work including commissioning and validation.

     1.4.2Project  Safely:  We will  implement  a vigorous  safety  program  and
          coordinate  all  field  activities  with  site  safety  goals  as  top
          priority. Our field staff will conduct weekly safety meetings and will
          monitor  field  operations  with a keen eye toward total  adherence to
          safe practices. IPS routinely reviews the client site requirements and
          incorporates them into the comprehensive IPS plan.


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     1.4.3Subcontractors:  IPS will enlist  local  subcontractors  that meet our
          standards for safety and quality.  These firms will be highly  capable
          and   well-staffed   organizations   that  will  meet  our  needs  and
          requirements.  IPS has an  extensive  network  of  subcontractors  and
          vendors we have successfully  completed projects with. All competitive
          bid items are reviewed with Advanced Biotherapy in detail.

     1.4.4Construction  Management : This project  demands  efficient  execution
          and thorough  planning.  Our  construction  management  plan calls for
          on-site  management of subcontractors  led by a senior project manager
          from IPS who is supported by a field superintendent and field engineer
          as well as home office  planning  and cost control  staffers.  Through
          these efforts by a single  source,  Advanced  Biotherapy  will realize
          coordination benefits.

          Along  with  the  selection  of  talented  subcontractors,  successful
          implementation  must include an aggressive  expedition  and scheduling
          program.  We  will  establish  short-term  schedules,   hold  frequent
          coordination   meetings  with  subcontractors   regarding  scheduling,
          quality, and safety and establish a very detailed progress measurement
          system that will allow for confident tracking and control.

     1.4.5Purchasing/Expediting:  We have undertaken an aggressive  pre-purchase
          and expediting program in order to meet the scheduled activities. This
          includes functional specifications, vendor coordination, incentives as
          prudent to speed vendor engineering and deliveries, and shop visits as
          appropriate to verify progress and improve overall  delivery dates. In
          addition  to the  activities  listed  above  for major  equipment  and
          systems,  we will work  closely  with our  subcontractors  to identify
          critical  materials and assure that they will flow in a timely fashion
          to support our schedule.

     1.4.6Permits: We have established working  relationships with Howard County
          authorities,  which are important to the success of a project. We have
          identified all critical  permitting  applications and have established
          schedules and milestone objectives to implement this important area of
          project management.  We know our first task at hand is to expedite the
          fire  protection  plan so that there is sufficient time to accommodate
          the current schedule sequence.

     1.4.7Cost Control:  We will  establish a detailed  cost control  budget for
          the project and will work closely with major subcontractors to develop
          a  coordinated  cost  reporting  system.  We  will  carefully  measure
          engineering  and field progress and deploy our change control  program
          for timely identification of potential issues for team discussion.  We
          will clearly define status,  progress, and projected final totals in a
          meaningful way. We will support value-engineering activities to assure
          Advanced  Biotherapy that a cost-efficient  facility is being provided
          that  meets  immediate   occupancy  needs,  as  well  as  accommodates
          longerterm  objectives  where  prudent and  possible.  Our expert cost
          engineering  capabilities  will play a vital role in the cost  control
          program for the project.

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2.0 SCOPE OF SERVICES

  2.1 Project Management

     2.1.1The work is broken  down by  construction  packages  that best fit the
          client's  needs.  IPS  provides  bid  packages   according  to  client
          production needs,  relocation dates, permitting  requirements,  design
          constraints, and equipment delivery requirements.

     2.1.2IPS  monitors  cost  through  the  use  of  several   systems.   Scope
          Adjustment Notices (SAN) are issued immediately upon identification of
          changes in the  overall  project  scope.  This  allows our clients the
          ability  to  react to  change  and  make  decisions  based on cost and
          schedule  impacts.  Likewise,  IPS uses a system for Potential  Change
          Orders to track the subcontractor  changes.  We also monitor and track
          the  progress  of the  project  against  our  detailed  CSI coded cost
          breakout  and the project  schedule in support of project  invoices to
          Advanced Biotherapy and from subcontractors,

     2.1.3Time  Management.  and Project  Scheduling is the key tool for project
          success.  A Project  Milestone  Schedule has been  provided  with this
          quotation.  At the start of the project, IPS will prepare and link all
          activities  required  for the design,  procurement,  construction  and
          validation  of the  project.  The  schedule  is an active  document to
          provide the team with the plan for a successful  project.  Changes are
          incorporated  and  evaluated  and progress will be tracked on a weekly
          basis. Any deviation to the Critical Path Method will be evaluated and
          work around plans provided.

     2.1.4Risk Management is a function of good  communication.  The IPS Project
          Manager will work closely and communicate with Advanced  Biotherapy to
          identify and evaluate risk. IPS typically  works with their clients to
          identify client business plans to enable review of design, procurement
          construction  and validation  activities for potential  risk. IPS will
          assist to evaluate these issues and manage the  subsequent  activities
          accordingly.

     2.1.5Project  Reporting and Control Systems are provided to meet the client
          and project  needs.  As  previously  discussed,  cost and schedule are
          monitored  and updated  regularly.  IPS will  conduct  client  project
          review meetings on a weekly basis and site contractor  review meetings
          on  a  weekly   basis.   IPS  also   conducts   drawing   reviews  and
          constructability  reviews that are conducted as needed  throughout the
          project.  The frequencies of meetings are adjusted to meet the project
          needs.

     2.1.6Document  Management  is initiated on a project  specific  basis.  The
          Project Lead Sheet will contain the drawing and revision dates for the
          project.  All  specifications  are  logged  by number  and  date.  All
          distributions are issued and accompanied by a transmittal,  containing
          the description, revision dated and distribution.

     2.1.7Configuration  and Change  Management are managed  through our SAN and
          PCO documents. Changes in construction packages are controlled through
          the issuing of bulletins and all contractor questions are written on a
          standard Request for Information format.

     2.1.8Records  Management.  All project  related  documents are filed in the
          project file,  which is regulated  through a standard  filing  system.
          Documents are issued via a transmittal  and  correspondence  is coded.
          Logs are kept electronically and backed up daily.

     2.1.9Project Coordination.  All IPS services for this project are delivered
          through one office,  this allows for easy access and for a smooth flow
          of information. The project group is

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          linked  via an email  system  and can easily  access  common  software
          through the company  computer  system.  Formal  meetings are organized
          with an  agenda  and  minutes  are kept and  issued.  All  issues  are
          surfaced,  distributed and resolved in an efficient manner. Issues are
          tabulated and tracked  through the institution of an Action Plan list.
          The  aforementioned  activities  of  scheduling  and cost  control are
          additional  tools used to  coordination  and prioritize the activities
          performed by the project team.

     2.1.10 Project Lists will be provided and are typical for:

          Equipment List
          Drawing List
          Specification Log
          Document Distribution List
          PCO Log
          SAN Log

          Additional lists will be provided, as the project requires.

2.2  Final Engineering & Design

     2.2.1 Construction Phase (Construction Administration)

          Listed  below is a  summary  of  anticipated  deliverables  by the IPS
          architect's and engineer's to support the construction phase effort of
          the project:

          1. Shop drawing  reviews.
          2. Respond to Requests for  Information  (RFIs).
          3. Conflict resolution during  construction.
          4. Assist in commissioning of systems by providing general guidance.
          5. Review commissioning report.

     2.2.2 Record drawings

          Listed below is a summary of the  anticipated  deliverables  by IPS in
          support of the project closeout:

          1.  Provide  record  drawings  consisting  of  contractors'  marked up
          drawings.

2.3 Procurement, Construction Administration and Construction Management

     2.3.1 Procurement

          1. Develop and issue specifications for long-lead equipment.

          2. Provide early bid package for HVAC,  drywall,  painting,  doors and
          hardware and fire protection.

2.3.2 Construction Administration

          1. Attend pre-bid meetings.
          2. Respond to questions/clarifications from bidders (RFI's).
          3. Technical evaluation of bids.
          4. Assist in awarding contracts.
          5. Shop drawing reviews.

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          6. Periodic  construction  site visits by each  discipline.
          7. Punch listing by each  discipline.
          8. Assist in  commissioning  of systems by providing  general
             guidance.
          9. Review commissioning  report.
         10. Assist in validation master plan process by providing required
             drawings and documents.

2.3.3  Construction Management

         1. Full time on-site supervision
         2. Preparation and monitoring of project schedules
         3. Safety standard enforcement
         4. Coordination of owner furnished items
         5. Coordination with the developer's project team
         6. Site cleanliness
         7. Preparing and maintaining cost accounting procedures that track
            costs to date and costs to complete
         8. Monitoring subcontractor invoices
         9. Reviewing major discipline bids with Advanced Biotherapy prior to
            selection
        10. Subcontractor coordination
        11. Quality Assurance
        12. Job Site Office
        13. Shutdown Coordination
        14. Estimating of alternatives or scope change requests
        15. Constructability Review
        16. Pre-purchase of Equipment
        17. Contract Administration
        18. Commissioning (See Section 2.4)

2.4 Commissioning/Validation

     2.4.1 Commissioning

     Commissioning  is a process by which  building  systems and  equipment  are
     evaluated  and  confirmed  to be  installed  and  ready  for  operation  in
     conformance  with  the  design  intent.  This  process  is  conducted  upon
     installation and start-up, by qualified installers, with the support of the
     engineers,  construction personnel and validation personnel, as applicable.
     This process can provide certain benefits  including timely  identification
     of  installation  and/or  operation  issues and a cost efficient  manner of
     assuring  proper  installation  and  operation  (since it takes place while
     construction management,  installing  professionals,  design personnel, and
     validation  personnel  are actively on the job).  In addition,  a solid and
     well thought out  commissioning  program can have a positive  impact on the
     qualification   effort.   It  is   beneficial   to  identify   and  rectify
     non-conforming  characteristics during the commissioning effort so that the
     qualification  schedule is not negatively impacted by non-conforming  tests
     and so that the regulatory  documentation does not include  unnecessary and
     avoidable deviations.

          IPS'      unique      delivery       mechanism      of      integrated
     design-construction-validation  will have a positive impact on the project.
     The single source responsibility for delivering this project compels IPS to
     maintain an overall team approach that includes the combined

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     efforts of vendors and  contractors  alike.  The leverage of including  the
     participation  of these groups into the  commissioning  effort will greatly
     impact the success of this project and its timely  delivery by  eliminating
     redundant tasks. In addition,  IPS has saved validation costs by performing
     and  documenting  critical FATs to help ensure process  qualifications  and
     reduce field time and cost.

     The commissioning effort will include contractor,  Owner and IPS personnel,
     depending  on the nature of the  subject  matter.  This  proposal  has been
     estimated  for a single  review cycle per  document by Advanced  Biotherapy
     (one draft review, comment incorporation, then issuance for signature).

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PROJECT OVERVIEW

PROJECT APPROACH - DESIGN/BUILD PROJECT DELIVERY FLOW DIAGRAM


                                [ FLOW DIAGRAM ]

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<PAGE>


                               3.0 BASIS OF DESIGN




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<PAGE>


                     (BASIS OF DESIGN UNDER SEPARATE COVER)



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<PAGE>



                                4.0 GMP ESTIMATE





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-------------------------------------------------------------------------------
                            ADVANCED BIOTHERAPY, INC.
                                  COLUMBIA, MD
                             IPS PROJECT NO. 030011
                  BUDGETARY COST ESTIMATE SUMMARY (+ OR - 20%)
                                    315/2003
-------------------------------------------------------------------------------
COST CODE           DESCRIPTION                                 TOTAL
-------------------------------------------------------------------------------
   1000           GENERAL CONDITIONS                            REDACTED
-------------------------------------------------------------------------------
   2000           SITE WORK                                     REDACTED
-------------------------------------------------------------------------------
   3000           CONCRETE                                      REDACTED
-------------------------------------------------------------------------------
   4000           MASONRY                                       REDACTED
-------------------------------------------------------------------------------
   5000           METALS                                        REDACTED
-------------------------------------------------------------------------------
   6000           CARPENTRY                                     REDACTED
-------------------------------------------------------------------------------
   7000           THERMAL & MOISTURE PROTECTION                 REDACTED
-------------------------------------------------------------------------------
   8000           WINDOWS                                       REDACTED
-------------------------------------------------------------------------------
   9000           FINISHES                                      REDACTED
-------------------------------------------------------------------------------
   10000          SPECIALTIES                                   REDACTED
-------------------------------------------------------------------------------
   11000          EQUIPMENT                                     REDACTED
-------------------------------------------------------------------------------
   12000          FURNISHINGS                                   REDACTED
-------------------------------------------------------------------------------
   13000          SPECIAL CONSTRUCTION                          REDACTED
-------------------------------------------------------------------------------
   14000          CONVEYING SYSTEMS                             REDACTED
-------------------------------------------------------------------------------
   15000          MECHANICAL                                    REDACTED
-------------------------------------------------------------------------------
   16000          ELECTRICAL                                    REDACTED
-------------------------------------------------------------------------------
   17000          PROCESS EQUIPMENT & SYSTEMS                   REDACTED
-------------------------------------------------------------------------------
   80000          CONTINGENCY                                   REDACTED
-------------------------------------------------------------------------------
   81000          INSURANCES, TAXES, AND BONDS                  REDACTED
-------------------------------------------------------------------------------
   83000          DESIGN AND ENGINEERING                        REDACTED
-------------------------------------------------------------------------------
   84000          FEE                                           REDACTED
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
                  TOTAL PROJECT COST                           $164,411
===============================================================================

                             Confidential Treatment

NOTE:

     Add  $(Redacted)  for  Pharmaceutical  Grade Modular has an associated lead
     time  of  4  weeks.  System  Option





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===============================================================================
INTEGRATED PROJECT SERVICES
ESTIMATING                                           ADVANCED BIO THERAPY, INC
                                                   BUDGETARY ESTIMATE(DETAILED)

===============================================================================
  COST CODE       DESCRIPTION                QUANTITY  UNIT  UNIT COST SUBTOTAL
===============================================================================
GENERAL CONDITIONS
===============================================================================
      01000       GENERAL CONDITIONS                    REDACTED
-------------------------------------------------------------------------------
      01004       TELEPHONE - TOLL CALLS                REDACTED
-------------------------------------------------------------------------------
      01006       REIMBURSEABLES                        REDACTED
-------------------------------------------------------------------------------
      01007       TRAVE/LODGING                         REDACTED
-------------------------------------------------------------------------------
      01047       SUPERINTENDENT                        REDACTED
-------------------------------------------------------------------------------
      01048       PROJECT MANAGER                       REDACTED
-------------------------------------------------------------------------------
      01049       CLERICAL SUPPORT                      REDACTED
-------------------------------------------------------------------------------
      01064       BUILDING PERMIT                       REDACTED
-------------------------------------------------------------------------------
      01051       SAFETY SUPERVISION                    REDACTED
-------------------------------------------------------------------------------
      01305       DRAWINGS & PRINTS                     REDACTED
-------------------------------------------------------------------------------
      01306       COURIER & POSTAGE                     REDACTED
-------------------------------------------------------------------------------
      01512       TEMPORARY LIGHTING                    REDACTED
-------------------------------------------------------------------------------
      01794       ATTORNEY'S FEES                       REDACTED
-------------------------------------------------------------------------------
      01795       RENTAL                                REDACTED
-------------------------------------------------------------------------------
                       GENERAL CONDITIONS SUBTOTAL      REDACTED
-------------------------------------------------------------------------------
  SITE WORK
-------------------------------------------------------------------------------
      02000       SITE WORK                             REDACTED
-------------------------------------------------------------------------------
      02001       SITE WORK END OF CONTRACT             REDACTED
-------------------------------------------------------------------------------
      02002       DUMPSTERS                             REDACTED
-------------------------------------------------------------------------------
      02003       CLEANING                              REDACTED
-------------------------------------------------------------------------------
      02070       SELECTIVE DEMO WALLS AND DOOR         REDACTED
-------------------------------------------------------------------------------
      02452       SIGNAGE                               REDACTED
-------------------------------------------------------------------------------
                               SITE WORK                REDACTED
-------------------------------------------------------------------------------
CONCRETE
-------------------------------------------------------------------------------
      03000       CONCRETE                              REDACTED
-------------------------------------------------------------------------------
                               CONCRETE                 REDACTED
-------------------------------------------------------------------------------
MASONRY
-------------------------------------------------------------------------------
      04000       MASONRY                               REDACTED
-------------------------------------------------------------------------------
                               MASONRY                  REDACTED
-------------------------------------------------------------------------------
METALS
-------------------------------------------------------------------------------
      05000       METALS                                REDACTED
-------------------------------------------------------------------------------
      05120       STRL SUPPORTS FOR GWB CEILING         REDACTED
-------------------------------------------------------------------------------
      05500       STRUCTURAL/MISC STEEL                 REDACTED
-------------------------------------------------------------------------------
                                METALS                  REDACTED
-------------------------------------------------------------------------------
CARPENTRY
-------------------------------------------------------------------------------
      06000       CARPENTRY, WOOD BLOCKING              REDACTED
-------------------------------------------------------------------------------
                             CARPENTRY                  REDACTED
-------------------------------------------------------------------------------
THERMAL & MOISTURE PROTECTION
-------------------------------------------------------------------------------
      07000     THERMAL & MOISTURE PROTECTION           REDACTED
-------------------------------------------------------------------------------
      07850     ROOF CURB FOR COND UNIT                 REDACTED
-------------------------------------------------------------------------------
      07600     FLASHING                                REDACTED
-------------------------------------------------------------------------------
      07930     CUT AND PATCH ROOF                      REDACTED
-------------------------------------------------------------------------------
                     THERMAL & MOISTURE PROTECTION      REDACTED
-------------------------------------------------------------------------------
WINDOWS
-------------------------------------------------------------------------------
      08000     WINDOWS                                 REDACTED
-------------------------------------------------------------------------------
      08100     HOLLOW METAL FRAMES AND DOORS, DOUBLE   REDACTED
-------------------------------------------------------------------------------
      08100     HOLLOW METAL FRAMES AND DOORS, SINGLE   REDACTED
-------------------------------------------------------------------------------
      08100     METAL DOORS-SINGLE                      REDACTED
-------------------------------------------------------------------------------
      08100     DOOR INSTALLATION                       REDACTED
-------------------------------------------------------------------------------
      08700     DOOR HARDWARE                           REDACTED
-------------------------------------------------------------------------------
      08605     WINDOWS (24 X 30)                       REDACTED
-------------------------------------------------------------------------------
      08850     GLAZING                                 REDACTED
-------------------------------------------------------------------------------
                        WINDOWS                         REDACTED

                             Confidential Treatment

                                       16

  1122 Kenilworth Drive - Exchange Building Suite 405, Towson, Maryland 21204 -
             Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com


<PAGE>



===============================================================================
INTEGRATED PROJECT SERVICES
ESTIMATING                                           ADVANCED BIO THERAPY, INC
                                                   BUDGETARY ESTIMATE(DETAILED)

===============================================================================
  COST CODE       DESCRIPTION                QUANTITY  UNIT  UNIT COST SUBTOTAL
===============================================================================
      09000     FINISHES                                REDACTED
-------------------------------------------------------------------------------
      09120     GYPSUM CEILING                          REDACTED
-------------------------------------------------------------------------------
      09250     GYPSUM WALL BOARD TO 10'HT, 0 HR        REDACTED
-------------------------------------------------------------------------------
      09659     VCT                                     REDACTED
-------------------------------------------------------------------------------
      09661     VINYL BASE                              REDACTED
-------------------------------------------------------------------------------
      09900     EPOXY PAINTING                          REDACTED
-------------------------------------------------------------------------------
                                    FINISHES            REDACTED
-------------------------------------------------------------------------------
SPECIALTIES
-------------------------------------------------------------------------------
      10000     SPECIALTIES                             REDACTED
-------------------------------------------------------------------------------
                                   SPECIALTIES          REDACTED
-------------------------------------------------------------------------------
EQUIPMENT
-------------------------------------------------------------------------------
      11000     EQUIPMENT                               REDACTED
-------------------------------------------------------------------------------
                                    EQUIPMENT           REDACTED
-------------------------------------------------------------------------------
FURNISHINGS
-------------------------------------------------------------------------------
      12000     FURNISHINGS                             REDACTED
-------------------------------------------------------------------------------
      12000     DOOR LOCKING AND ALARM                  REDACTED
-------------------------------------------------------------------------------
      12825     PASS-THRU                               REDACTED
-------------------------------------------------------------------------------
                                   FURNISHINGS          REDACTED
-------------------------------------------------------------------------------
SPECIAL CONSTRUCTION
-------------------------------------------------------------------------------
      13000     SPECIAL CONSTRUCTION                    REDACTED
-------------------------------------------------------------------------------
      13002     RIGGING                                 REDACTED
-------------------------------------------------------------------------------
                              SPECIAL CONSTRUCTION      REDACTED
-------------------------------------------------------------------------------
CONVEYING SYSTEMS
-------------------------------------------------------------------------------
      14000     [CONVEYING SYSTEMS                      REDACTED
-------------------------------------------------------------------------------
                                CONVEYING SYSTEMS       REDACTED
-------------------------------------------------------------------------------
MECHANICAL
      15000     MECHANICAL -                            REDACTED
-------------------------------------------------------------------------------
      15074     REFRIGERANT PIPING                      REDACTED
-------------------------------------------------------------------------------
     15074-1    INSULATION-REFRIGERANT PIPING           REDACTED
-------------------------------------------------------------------------------
      15258     DUCT INSULATION                         REDACTED
-------------------------------------------------------------------------------
      15841     DUCTWORK                                REDACTED
-------------------------------------------------------------------------------
      15500     SPRINKLERS RELOCATED                    REDACTED
-------------------------------------------------------------------------------
      15762     AIR HANDLING UNIT, FURNISH ONLY         REDACTED
-------------------------------------------------------------------------------
     15762-1    INSTALL AND TRIM OUT AHU AND COND UNITS REDACTED
-------------------------------------------------------------------------------
      15841     DUCTWORK, FLEX                          REDACTED
-------------------------------------------------------------------------------
      15873     HEPA FILTERS                            REDACTED
-------------------------------------------------------------------------------
     15873-1    HEPA CERTIFICATIONS                     REDACTED
-------------------------------------------------------------------------------
      15900     CONTROLS & INSTRUMENTATION              REDACTED
-------------------------------------------------------------------------------
      15910     TESTING, ADJUST AND BALANCING - AIR     REDACTED
-------------------------------------------------------------------------------
      15990     START-UP ALLOWANCE                      REDACTED
-------------------------------------------------------------------------------
      15999     CHANGE ORDERS                           REDACTED
-------------------------------------------------------------------------------
                                   MECHANICAL           REDACTED
-------------------------------------------------------------------------------
ELECTRICAL
-------------------------------------------------------------------------------
      16000     ELECTRICAL                              REDACTED
-------------------------------------------------------------------------------
      16100     POWER FEEDS -CONUIDTS, WIRES            REDACTED
-------------------------------------------------------------------------------
      16110     WIRE MOLD                               REDACTED
-------------------------------------------------------------------------------
      16140     WIRING DEVICES                          REDACTED
-------------------------------------------------------------------------------
      16142     RECEPTACLES                             REDACTED
-------------------------------------------------------------------------------
      16145     STARTERS                                REDACTED
-------------------------------------------------------------------------------
      16160     PANEL BOARDS                            REDACTED
-------------------------------------------------------------------------------
      16353     DISCONNECT SWITCHES                     REDACTED
-------------------------------------------------------------------------------
      16481     MOTOR HOOK-UPS                          REDACTED
-------------------------------------------------------------------------------
      16500     LIGHTING                                REDACTED
-------------------------------------------------------------------------------
                                   ELECTRICAL           REDACTED
-------------------------------------------------------------------------------

                             Confidential Treatment

                                       17
 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204 -
             Phone: 410.296.8590 - Fax: 410.296.8594 . www.ipsdb.com


<PAGE>

===============================================================================
INTEGRATED PROJECT SERVICES
ESTIMATING                                           ADVANCED BIO THERAPY, INC
                                                   BUDGETARY ESTIMATE(DETAILED)

===============================================================================
  COST CODE       DESCRIPTION                QUANTITY  UNIT  UNIT COST SUBTOTAL
===============================================================================
VALIDATION
-------------------------------------------------------------------------------
      17000     VALIDATION                              REDACTED
-------------------------------------------------------------------------------
                                 PROCESS SYSTEMS        REDACTED
-------------------------------------------------------------------------------
CONTINGENCY
-------------------------------------------------------------------------------
     80000      CONTINGENCY   10%                       REDACTED
-------------------------------------------------------------------------------
                                  CONTINGENCY           REDACTED
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
     81000      INSURANCE & TAXES, BONDS                REDACTED
-------------------------------------------------------------------------------

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

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

-------------------------------------------------------------------------------
DESIGNIENGINEERING
-------------------------------------------------------------------------------
      83000     DESIGN & ENGINEERING                    REDACTED
-------------------------------------------------------------------------------
                               DESIGN/ENGINEERING       REDACTED
-------------------------------------------------------------------------------
      84000     OVERHEAD/FEE                            REDACTED
-------------------------------------------------------------------------------
      84400     SALES TAX                               REDACTED
-------------------------------------------------------------------------------

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

                             Confidential Treatment

                                       18
 1122 Kenilworth Drive -Exchange Building, Suite 405 - Towson, Maryland 21204 -
             Phone: 410.296.8590 -Fax: 410.296.8594 - www.ipsdb.com


<PAGE>







                   5.0 CLARIFICATIONS/ASSUMPTIONS/EXCLUSIONS











                                       19
1122 Kenilworth Drive . Exchange Building, Suite 405 - Towson, Maryland 21204 -
             Phone: 410.296.8590 - Fax: 410.296.8594 . www.ipsdb.com


<PAGE>


5.0     CLARIFICATIONS / ASSUMPTIONS / EXLUSIONS

GMP Estimate
Clarifications, Assumptions and Exclusions

The following  represents a list of assumptions,  clarifications  and exclusions
used  in  preparation  of the  GMP  estimate.  It is  noted  that  there  may be
adjustments  to the  Guaranteed  Maximum  Price  based on the change in scope in
terms of the revised  documents and/or any changes to the following  assumptions
and clarifications:

1.   The  IPS  estimating  contingency  in the  GMP  Estimate  is  10% of  costs
     excluding Owner Furnished process equipment capital costs. This contingency
     is exclusively  meant to pay for all the costs  associated  with estimating
     variances,   work  associated  with  final  documents  changes  and  design
     development to meet the basis of design criteria,  and contractor's  change
     orders for  differing  conditions  etc,  The  purpose  of the  contingency,
     however, is not to pay for additional work requests or scope adjustments by
     the Owner,

2.   IPS' General Conditions  includes an allowance for the IPS safety personnel
     to visit the jobsite for spot inspection once every two (2) weeks.  IPS has
     not included a full time, dedicated safety person for the project site. The
     normal safety function will be addressed by IPS's field superintendent.

3.   Except as specifically noted, all pricing is for work during normal working
     hours (7.00am- 4:00pm),  8 hours/day,  5 days/week (Monday through Friday).
     IPS excludes all premium time and overtime,  with exception to second shift
     work for the  resinous  flooring  installation.  IPS will  provide time and
     material  records for premium time over the standard 40  hours/week  to the
     Owner on a monthly  basis,  which is to be paid  separately as project cost
     change order, once authorized by the Owner's representative. The costs will
     include subcontractor (trades) costs as well as IPS supervision and General
     Conditions  costs,  and additional  travel costs as required for additional
     shifts.

4.   Costs of removal of existing racks,  process equipment and hoods within the
     existing facility are excluded.

5.   Validation  scope is excluded from this scope of work.  These  services are
     quoted under a separate proposal. Refer to Appendix for proposal.

6.   Validation costs associated with the process equipment IQ/OQ  documentation
     and  protocols  shall be  assumed  to be  purchased  by the Owner  from the
     process equipment suppliers.

7.   It is assumed that no drains or plumbing is included in this proposal.  All
     drains for equipment shall be piped to bottles and removed by personnel.

8.   The  building  pen-nit  and  construction  permit  costs  of  $1,500  is an
     allowance  item and it will be adjusted  based on the actual fees levied by
     the Local Authorities.

9.   Handling and removal of hazardous  material  such as asbestos,  lead paint,
     PCBs,  radioactive  material,  fluorescent  light tubes and  ballasts,  and
     underground tanks are excluded.

10.  IPS has  excluded any rework of existing  egress  paths from the  renovated
     spaces.  Any such work required can be provided for additional cost under a
     separate proposal.

11.  IPS excludes any  installation  of access  platforms for maintenance of new
     HVAC unit or other equipment.

12.  IPS has  allowed  for  the  furnishing  and  installation  of one (1)  fire
     extinguisher  cabinet only in this scope.  Fire  extinguishers are excluded
     from this scope.

13.  All  process  chemicals  and  delivery of raw  materials  used in the final
     process to be provided by the owner.

                                       20
1122 Kenilworth Drive - Exchange Building. Suite 405 - Towson. Maryland 21204 -
             Phone: 410,296.8590 - Fax: 410.296.8594 - www.ipsdb.com


<PAGE>


14.  No cost is included for increasing the size of sprinkler  mains or rezoning
     of the building  sprinkler system.  IPS sprinkler work is limited to rework
     of  the  branch  piping  and  head  locations  based  on  the  same  hazard
     classification.

15.  Fire  alarm work in  contract  is  limited  to a new  extender  panel and a
     connection  of the signal cable to the existing  fire alarm panel,  It also
     includes all the necessary fire alarm devices and wiring in the new areas.

16.  An emergency shutoff switch will be installed in the air-handling unit.

17.  No  Telephone  and data  work is  included.  Telephone  and data  wiring is
     excluded,

18.  Security and access  systems work is excluded.  This also excludes any card
     readers,   door  contacts,   magnetic  strikes  and  security  cameras.   A
     combination  lock  will be  provided  for the  entrance  door from the main
     corridor.

19.  Paging system work is excluded.

20.  Costs for purchase of process  equipment  are Owner costs.  This scope does
     not include any startup,  freight,  relocation costs, rigging or setting of
     new or used equipment.

21.  IPS is not responsible for cost or schedule impact of any  deficiencies and
     associated corrective work for the Owner furnished equipment.

22.  All work  associated  with  modifications  to the existing  Lyophilizer  is
     excluded from IPS scope of work.

23.  Identification  tags and signs for  Owner-fumished  process  equipment  are
     excluded.

24.  State sales tax allowances are made for IPS purchased equipment.

25.  Gowning racks and supplies are excluded. IPS assumes that all garments will
     be  provided  by  Advanced  Biotherapy,  including  disposables  for  clean
     construction purposes,

26.  It is assumed that the costs associated with temporary  power,  beating and
     cooling of the project area during  construction,  temporary enclosures for
     heating and cooling of the building, and water will be paid by the Owner.

27.  The temporary  partitions are constructed of  polyethylene  sheet supported
     from temporary studs.

28.  IPS has excluded  temporary  security  services (guard service).  If deemed
     necessary, any guard service shall be provided by the Owner.

29.  IPS  excludes  clean  room  furniture   (i.e.   mirrors,   signage,   trash
     receptacles, etc) with the exception of two fixed gowning benches.

30.  Due to concealed  conditions at the time of this proposal,  IPS has assumed
     that the level of demolition and  renovation  required in the location will
     be as discussed in previous meetings.

31.  IPS excludes certification of HEPA filters Owner provided equipment,

32.  It is assumed that the Owner will make the existing areas  available to IPS
     when required (with prior  coordination)  for new work areas and tie-ins of
     the utilities in existing  areas during the normal  working hours of 7:OOAM
     to 4:00 PM

33.  IPS cannot be held  responsible for schedule impact due to failure of local
     building  officials  to approve  building  permit by date  indicated on the
     Project Schedule, IPS is not responsible for schedule impact due to failure
     of code officials to provide  inspections of installed work in a reasonable
     period of time.

34.  IPS has excluded Payment and Performance Bond costs.

35.  IPS' GMP budget  reflects  that the project is to be built by 'merit  shop'
     labor.

36.  Seismic  hangers  and/or  earthquake  bracing  is not part of this scope of
     work.

37.  All  unit  costs  in the  GMP  identified  with  unit  cost of  "ALLOW"  or
     identified  above  as  an  allowance,   represent  an  allowance  for  that
     particular line item that is the maximum  financial  responsibility  of IPS
     within the GMP. Any costs for any line item with unit cost of "ALLOW"

                                       21
 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204 -
            Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com


<PAGE>


     in excess of the indicated amount will be in addition to the to account for
     undefined or Owner-driven scope.

38.  This  proposal  and  all  contents  of  our  offer   expressed   herein  is
     confidential and privileged, can not be disclosed to parties outside of IPS
     and Advanced  Biotherapy  without the specific  written  permission of IPS.
     Dissemination,  distribution,  or copying of this  document  or any portion
     thereof by any party other than IPS is strictly prohibited.


                                       22
 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204 -
            Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com


<PAGE>






                             6.0 MILESTONE SCHEDULE











                                       23
 1122 Kenilworth Drive - Exchange Building, Suite 405 . Towson, Maryland 21204 -
            Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com



<PAGE>


ID    Task Name                               Duration       Resource Names
-------------------------------------------------------------------------------
 1    KICKOFF                                           REDACTED
-------------------------------------------------------------------------------
 2        GMP Proposal                                  REDACTED
-------------------------------------------------------------------------------
 3        Advanced Biotherapy Acceptance                REDACTED
-------------------------------------------------------------------------------
 4        Project Kickoff                               REDACTED
-------------------------------------------------------------------------------
 5        Signed D/B Contract                           REDACTED
-------------------------------------------------------------------------------
 6    DETAILED DESIGN                                   REDACTED
-------------------------------------------------------------------------------
 7        HVAC Equipment Specs                          REDACTED
-------------------------------------------------------------------------------
 8        Electrical Confirmation                       REDACTED
-------------------------------------------------------------------------------
 9        Permit/Bid Documents                          REDACTED
-------------------------------------------------------------------------------
10        Prepurchase Documents                         REDACTED
-------------------------------------------------------------------------------
11        Construction Issue                            REDACTED
-------------------------------------------------------------------------------
12    PRECONSTRUCTION / PROCUREMENT                     REDACTED
-------------------------------------------------------------------------------
13        Mobilization and Logistics Planning           REDACTED
-------------------------------------------------------------------------------
14        HVAC Prepurchase - Bid/Award                  REDACTED
-------------------------------------------------------------------------------
15        Doors/Frames - Bid/Award                      REDACTED
-------------------------------------------------------------------------------
16        HVAC Prepurchase - Delivery                   REDACTED
-------------------------------------------------------------------------------
17        File Building Permit                          REDACTED
-------------------------------------------------------------------------------
18         ades Bid/Award                               REDACTED
-------------------------------------------------------------------------------
19        Doors/Frames - Delivery                       REDACTED
-------------------------------------------------------------------------------
20        Building Permit                               REDACTED
-------------------------------------------------------------------------------
21        Trade Submittals and Approval                 REDACTED
-------------------------------------------------------------------------------
22        Sheet Metal Fabrication                       REDACTED
-------------------------------------------------------------------------------
23        Electrical Purchases                          REDACTED
-------------------------------------------------------------------------------
24    CONSTRUCTION                                      REDACTED
-------------------------------------------------------------------------------
25        Mobilize                                      REDACTED
-------------------------------------------------------------------------------
26        Demolition Utility Relocation                 REDACTED
-------------------------------------------------------------------------------
27        Mechanical Electrical Overhead                REDACTED
-------------------------------------------------------------------------------
28        Install Air Handler                           REDACTED
-------------------------------------------------------------------------------
29        Drywall Partitions one sides,                 REDACTED
-------------------------------------------------------------------------------
30        Mechanical / Electrical Rough                 REDACTED
-------------------------------------------------------------------------------
31        Complete / Prep Partitions                    REDACTED
-------------------------------------------------------------------------------
32        HVAC Controls                                 REDACTED
-------------------------------------------------------------------------------
33        Install Doors                                 REDACTED
-------------------------------------------------------------------------------
34        Celings / Lighting                            REDACTED
-------------------------------------------------------------------------------
35        Painting                                      REDACTED
-------------------------------------------------------------------------------
36        Mechanical / Electrical -Teimo-ut             REDACTED
-------------------------------------------------------------------------------
37        Flooring                                      REDACTED
-------------------------------------------------------------------------------
38        Substantial Completion                        REDACTED
-------------------------------------------------------------------------------
39    COMMISSIONING / QUALIFICATION                     REDACTED
-------------------------------------------------------------------------------
40        Write /Approve --ove Process 1Q/OQ            REDACTED
-------------------------------------------------------------------------------
41        Write/Approve Facility IQ/OQ                  REDACTED
-------------------------------------------------------------------------------
42        HVAC Test and Ba lance                        REDACTED
-------------------------------------------------------------------------------
43        HAVAC IQ                                      REDACTED
-------------------------------------------------------------------------------
44        Punchlist                                     REDACTED
-------------------------------------------------------------------------------
45        Install ocess Equipment                       REDACTED
-------------------------------------------------------------------------------
46        Facility OQ                                   REDACTED
-------------------------------------------------------------------------------
47        Execute Process IQ                            REDACTED
-------------------------------------------------------------------------------
48        Execute Process OQ                            REDACTED
-------------------------------------------------------------------------------
49        IQ/OQ Complete                                REDACTED
-------------------------------------------------------------------------------

                             Confidential Treatment

                                       24
  1129 Kenilworth Drive. - Exchange Building Suite 405 - Towson. Maryland 21204
           - Phone: 410.296.8590 - Fax: 410.296.8594 - www.ipsdb.com


<PAGE>







                                    DRAWINGS








                                       25
 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Maryland 21204 -
            Phone: 410.296.8590 - Fax: 410.296.8594, www.ips,db.com


<PAGE>


                        (DRAWINGS UNDER SEPARATE COVER)








                                       26
1122 Kenilworth Drive . Exchange Building, Suite 405 - Towson, Maryland 21204 -
            Phone: 410.296.8590 - Fax: 410.296,8594 . www.ipsdb.com


<PAGE>






                              8.0 COMMERCIAL TERMS







                                       27
1122 Kenilworth Drive - Exchange Building, Suite 405 . Towson, Maryland 21204 -
            Phone: 410.296.8590 - Fax: 410.296,8594 - www.ipsdb.com


<PAGE>


8.0   COMMERCIAL TERMS

      Recognizing that moving forward on the project is important to maintaining
      schedule,  IPS proposes that we commence work on the project  immediately,
      and we are ready to start to complete  the detailed  engineering  drawings
      and begin the project delivery phase,

      All work  detailed in this  proposal  shall be provided as a  design/build
      contract  with a  guaranteed  maximum  price of not to exceed one  hundred
      sixty-four thousand,  four hundred and eleven dollars  ($164,411,00),  Our
      work can commence  immediately  upon receiving  written  authorization  to
      proceed and a ten percent down payment. Additional services for Validation
      are detailed in the Appendix of this  proposal and will be  authorized  by
      NHD as a change to this  contract  or into a  separate  time and  material
      based  contract in accordance  with the attached 2003 Rate  Schedule.  Our
      services will be invoiced  monthly based on the percent of completion  and
      are payable upon receipt.  Reimbursable costs have been allocated and will
      be billed at actual cost to the project.  As with every  relationship,  we
      will work "open book" with you. All time records,  invoices,  and receipts
      are made available to you for review.

      This  proposal  is valid for a period of thirty (30) days from the date of
      the proposal, If our services do not commence, or are stopped for a period
      of  thirty  (30)  days  through  no act or fault of IPS,  we may  elect to
      renegotiate  the terms of this  agreement  to  reflect  changes in project
      scope,  schedule and fee  schedules.  Any changes made to this proposal do
      not constitute an agreement. All changes must be approved by both parties.

      If you accept this proposal, please sign one copy and return it to IPS.

      Thank you for the opportunity to assist Advanced  Biotherapy/New  Horizons
      on this  important  project.  Should you have any  questions on the above,
      please don't hesitate to contact me directly at our office at 410-296-8590
      ext 12, or at my cell phone at 443-255-7889.

IPS Proposal No. MDD031044.1

Very Truly Yours,                               Accepted:

INTEGRATED PROJECT SERVICES                     ADVANCED BIOTHERAPY, INC.


-------------------------------------           -------------------------------
William Deckert                                 Signature
Project Executive


                                                -------------------------------
                                                Name (print)


                                                -------------------------------
                                                Title


                                                -------------------------------
                                                Date


                                       28
 1122 Kenilworth Drive - Exchange Building, Suite 405 - Towson, Marviand 21204 -
             Phone: 410.296.8590 - Fax: 410.296.8594 www.ipsdb.com

<PAGE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>doc3.txt
<TEXT>

<PAGE>


                                                                    EXHIBIT 99.1



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly  Report of Advanced  Biotherapy,  Inc.
(the  "Company")  on Form 10-QSB for the quarter  ended March 31, 2003, as filed
with the  Securities  and Exchange  Commission on the date hereof (the "Periodic
Report"), I, Edmond F. Buccellato,  President and Chief Executive Officer of the
Company,  certify,  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

          1.   the Periodic Report fully complies with the requirements of
               Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
               and

          2.   the information contained in the Periodic Report fairly presents,
               in all material respects, the financial condition and results of
               operations of the Company.

Dated:     MAY 14, 2003                      /S/EDMOND F. BUCCELLATO
                                            ------------------------------------
                                             Edmond F. Buccellato, President and
                                             Chief Executive Officer







<PAGE>




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>doc2.txt
<TEXT>

<PAGE>



                                                                    EXHIBIT 99.2




                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly  Report of Advanced  Biotherapy,  Inc.
(the  "Company")  on Form 10-QSB for the quarter  ended March 31, 2003, as filed
with the  Securities  and Exchange  Commission on the date hereof (the "Periodic
Report"),  I, William M.  Finkelstein,  Chief Financial  Officer of the Company,
certify,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

          1.   the Periodic Report fully complies with the requirements of
               Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
               and

          2.   the information contained in the Periodic Report fairly presents,
               in all material respects, the financial condition and results of
               operations of the Company.



Dated:     MAY 14, 2003                   /S/WILLIAM M. FINKELSTEIN
                                            ------------------------------
                                             WILLIAM M. FINKELSTEIN
                                             Chief Financial Officer



<PAGE>

</TEXT>
</DOCUMENT>
</SUBMISSION>
