As filed with the Securities and Exchange Commission on May 26, 2000.
                                                     Registration No. 333-_____

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-1
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                          ADVANCED VIRAL RESEARCH CORP.
                         ------------------------------
             (Exact name of Registrant as specified in its charter)

                                    Delaware
                                    --------
         (State or other jurisdiction of incorporation or organization)

                                      5129
                                      ----
            (Primary Standard Industrial Classification Code Number)

                                   59-2646820
                                   -----------
                      (I.R.S. Employer Identification No.)

             200 Corporate Boulevard South, Yonkers, New York 10701
             ------------------------------------------------------
          (914) 376-7383 (Address and telephone number of Registrant's
                          principal executive offices)

                      Shalom Z. Hirschman, M.D., President
      200 Corporate Boulevard South, Yonkers, New York 10701 (914) 376-7383
      ---------------------------------------------------------------------
            (Name, address and telephone number of agent for service)

                                 ---------------
                                   Copies to:
                               CHARLES J. RENNERT
                   Berman Wolfe Rennert Vogel & Mandler, P.A.
                          NationsBank Tower, Suite 3500
                           100 Southeast Second Street
                            Miami, Florida 33131-2130
                     (305) 577-4177 Phone (305) 373-6036 Fax
                                 ---------------

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effectiveness of this registration
statement.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

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

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

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________ If delivery of the prospectus is expected
to be made pursuant to Rule 434, check the following box. [_]


<PAGE>
<TABLE>
<CAPTION>

                                          CALCULATION OF REGISTRATION FEE


  Title of each class of        Amount to          Proposed maximum          Proposed maximum            Amount of
securities to be registered   be registered    offering price per share  aggregate offering price     registration fee
---------------------------   -------------    ------------------------  ------------------------     ----------------
<S>                             <C>                   <C>   <C>               <C>                        <C>
Common stock par                46,070,901            $0.36 (1)               $17,622,119.63             $4,652.24
value $0.00001 per share
Total Fee                                                                                                $4,652.24
</TABLE>
-----------------------
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the closing bid and ask prices of the common stock on
May 23, 2000, as reported on the OTC Electronic Bulletin Board.

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

         The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.


                      [This Space Intentionally Left Blank]




<PAGE>

              Prospectus subject to completion, dated May __, 2000.


                             Up to 46,070,901 Shares

                          ADVANCED VIRAL RESEARCH CORP.

                                  Common Stock


         The shareholders named on page 42 are selling up to 46,070,901 shares
of our common stock.


         Our common stock is traded on the National Association of Securities
Dealers, Inc.'s OTC Bulletin Board under the symbol "ADVR." On May 23, 2000 the
high and low bid prices for the common stock on the Bulletin Board were $0.385
and $0.375, respectively.


         Investing in our common stock involves substantial risks. See "RISK
FACTORS" beginning on page 4.

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

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

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

                  The date of this prospectus is _______, 2000.


The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the Securities Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.


<PAGE>
<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS


<S>                                                                                                              <C>
Prospectus Summary................................................................................................1

Risk Factors......................................................................................................4

About this Prospectus.............................................................................................8

Where to Find More Information....................................................................................8

Forward-looking Statements May Prove Inaccurate  .................................................................8

Market Price of and Dividends on the Common Stock and Related Shareholder Matters.................................9

Capitalization...................................................................................................10

Selected Consolidated Financial Data.............................................................................11

Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................................................................13

Business.........................................................................................................25

Management.......................................................................................................35

Principal Shareholders...........................................................................................41

Selling Shareholders.............................................................................................42

Certain Relationships and Related Transactions...................................................................43

Description of Common Stock......................................................................................43

Use of Proceeds..................................................................................................43

Plan of Distribution.............................................................................................43

Legal Matters....................................................................................................45

Experts..........................................................................................................46

Financial Statements............................................................................................F-1
</TABLE>

                                        i

<PAGE>

                               PROSPECTUS SUMMARY

         This summary highlights information about the offering and Advanced
Viral Research Corp. which we believe will be most important to you. However,
you should read the entire prospectus for a complete understanding of the
offering and our business.

Advanced Viral Research Corporation

         Advanced Viral Research Corp. was formed in July 1985 to engage in the
production and marketing, promotion and sale of a pharmaceutical drug with the
trade name Reticulose(TM) (the current formulation of which is now known as and
hereinafter referred to as Product R(TM)) for the treatment of certain viral
diseases such as:

        o     human immunodeficiency virus, or HIV, including acquired immune
              deficiency syndrome, or AIDS;

        o     hepatitis B and hepatis C, both liver diseases

        o     human papilloma virus, or HPV, which causes genital warts and may
              lead to cervical cancer; and

        o     rheumatoid arthritis.

         Since 1962, when Reticulose was reclassified as a "new drug" by the
Food and Drug Administration, or FDA, the FDA has not permitted Reticulose to be
marketed in the United States. A forfeiture action was instituted in 1962 by the
FDA against Reticulose, and it was withdrawn from the United States market. The
injunction obtained by the FDA prohibits, among other things, any shipment of
Reticulose, now known as "Product R," until a new drug application, or NDA, is
approved by the FDA. FDA approval of an NDA first requires clinical testing of
Product R in human trials, which cannot be conducted until we first satisfy the
regulatory protocols and the substantial preapproval requirements imposed by the
FDA upon the introduction of any new or unapproved drug product pursuant to a
notice of claimed investigational exemption for a new drug, or IND.

         Our operations over the last five years have been limited principally
to research, testing and analysis of Product R in the United States, either in
vitro (outside the living body in an artificial environment, such as in a test
tube), or on animals, and engaging others to perform testing and analysis of
Product R on human patients outside the United States.

         Shalom Z. Hirschman, M.D., our President, has monitored the testing of
Product R and has recently performed analyses of Product R with our laboratory
personnel, which we believe may be used in connection with the FDA approval
process. In addition, we have contracted with GloboMax LLC of Hanover, Maryland
to advise us in our preparation and filing of an IND with the FDA, and to
otherwise assist us through the FDA process with the objective of obtaining full
approval for the manufacture and commercial distribution of Product R in the
United States.

                                        1

<PAGE>

         Our offices are located at 200 Corporate Boulevard South, Yonkers, New
York 10701 and 1250 East Hallandale Beach Boulevard, Suite 501, Hallandale,
Florida 33009. Our telephone number in Yonkers, New York is (914) 376-7383 and
our telephone number in Hallandale, Florida is (954) 458-7636 .

<TABLE>
<CAPTION>
The Offering
<S>                                               <C>
Securities offered............................... 46,070,901 shares of common stock. (1)
Shares outstanding............................... 379,429,387 shares of common stock. (2)
Use of proceeds.................................. We will not receive any proceeds from the sale of
                                                  common stock by the selling
                                                  shareholders. We will receive
                                                  the cash proceeds, if any,
                                                  from the exercise of stock
                                                  options or warrants held by
                                                  selling shareholders. See
                                                  "Management's Discussion and
                                                  Analysis of Financial
                                                  Condition and Results of
                                                  Operations."
</TABLE>
------------------------
(1)  Represents (i) 13,816,357 shares of our common stock, (ii) up to 23,300,000
     shares of common stock issuable upon the exercise of certain stock options,
     and (iii) up to 8,954,544 shares of common stock issuable upon exercise of
     certain warrants.
(2)  As of May 23, 2000. Includes shares described in footnote (1) above, but
     does not include approximately 34,000,000 shares issuable upon exercise of
     certain outstanding options, convertible debentures and warrants that are
     not held by the selling shareholders.



                                        2

<PAGE>

                             SUMMARY FINANCIAL DATA

         The following selected historical financial data as of and for the
years ended December 31, 1995, 1996, 1997, 1998 and 1999 have been derived from
our audited financial statements. The selected consolidated financial data set
forth below should be read along with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
notes thereto included elsewhere in this prospectus.

Summary Statement of Operations Data
<TABLE>
<CAPTION>
                                                   Years Ended December 31
                            ----------------------------------------------------------------------
                                                                                                       3 Months Ended
                                     1995          1996          1997           1998         1999      March 31, 2000
                                    ------        ------        ------         ------       ------     --------------
<S>                                <C>           <C>            <C>              <C>       <C>                 <C>
Net revenues                       $27,328       $24,111        $2,278           $656      $10,953             $3,028
Net loss                         ($401,884)  ($1,154,740)  ($4,141,729)   ($4,557,710) ($6,174,262)      $ (2,054,420)
Net loss per common share           ($0.00)       ($0.00)       ($0.02)        ($0.02)      ($0.02)            ($0.01)
Weighted average # of shares   248,002,608   257,645,815   274,534,277    294,809,073  302,361,109        313,819,774
</TABLE>



Summary Balance Sheet Data
<TABLE>
<CAPTION>
                                                           December 31
                             -----------------------------------------------------------------------
                                                                                                          As of
                                      1995          1996          1997           1998          1999    March 31, 2000
                                     ------        ------        ------         ------        ------   --------------
<S>                                <C>         <C>           <C>            <C>           <C>            <C>
Total Assets                       $796,241    $1,716,800    $4,189,842     $3,304,953    $2,861,574     $  6,528,950
Long-term liabilities                     -             -    $2,384,793     $1,625,299    $4,676,652       $3,228,366
Stockholders' equity per              $0.00         $0.01         $0.01          $0.00         $0.00            $0.01
common share
Shares outstanding at year end  251,181,774   267,031,058   277,962,574    296,422,907   303,472,035      347,174,843
</TABLE>

                                        3

<PAGE>

                                  RISK FACTORS

         Our securities are highly speculative. You shouldn't purchase them
unless you can afford to lose your entire investment. You should consider very
carefully the following risk factors before you decide to purchase our
securities.

1.       Because our shares are 'penny stocks,' you may be unable to resell them
         in the secondary market.

         A "penny stock" is an equity security with a market price of less than
$5 per share which is not listed on the Nasdaq or a national securities
exchange. Due to the extra risks involved in an investment in penny stocks,
federal securities laws and regulations require broker/dealers who recommend
penny stocks to persons other than their established customers and accredited
investors to make a special written suitability determination for the purchaser,
provide them with a disclosure schedule explaining the penny stock market and
its risks, and receive the purchaser's written agreement to the transaction
prior to the sale. These requirements limit the ability of broker/dealers to
sell penny stocks. Also, because of the extra requirements, many broker/dealers
are unwilling to sell penny stocks at all. As a result, you maybe unable to
resell the stock you buy in this offering and could lose your entire investment.

2.       The exercise or conversion of our outstanding convertible securities
         could have a significant negative impact on the market price of our
         common stock.

         As of the date of this prospectus, in addition to the 347,174,843
shares of our common stock currently outstanding, the following securities are
outstanding:

         o    Stock options to purchase an aggregate of 51,952,280 shares of
              common stock at exercise prices ranging from $0.15 to $0.36

         o    Warrants to purchase an aggregate of 14,247,296 shares of common
              stock at prices ranging from $0.199 to $0.864

         o    Convertible debentures currently estimated to be convertible into
              an aggregate of approximately 58,000 shares based on the average
              bid and ask price of our common stock on May 23, 2000, which was
              $0.3825.

         If all the outstanding options, warrants, and convertible debentures
were fully exercised and converted, as the case may be, there would be
outstanding an additional 66,252,319 shares of common stock. The sale or
availability for sale of this number of shares of common stock in the public
market could depress the market price of the common stock. Additionally, the
sale or availability for sale of this number of shares may lessen the likelihood
that additional equity financing will be available to us, on favorable or
unfavorable terms.


                                        4

<PAGE>

3.       It is unlikely that our company will be able to continue as a going
         concern without a significant improvement in our financial condition,
         which has constrained our ability to finance necessary research,
         development and other operating expenses as needed.

         Our independent certified public accountants' report on our
consolidated financial statements for the fiscal year ended December 31, 1999
includes an explanatory paragraph regarding our ability to continue as a going
concern. During the next 12 months, we expect to spend approximately $9,000,000
($4,000,000 of which was raised during the first quarter of fiscal 2000) to
conduct research and development related activities, including approximately
$2,250,000 related to the preparation of the IND for submission to the FDA. We
currently are unable to calculate the amount we will require in additional
funding to complete the FDA approval process, including conducting clinical
trials and filing the NDA application. Our ability to continue operations is
dependent upon our continued sale of our securities for funds to meet our cash
requirements, and as a result our ability to continue as a going concern is
doubtful.

         Unless we are able to generate sufficient revenue or raise additional
funds when needed, it is likely that we will be unable to continue our planned
activities, even if we are making progress with our research and development
projects. The longer the duration of the regulatory approval process, the more
unlikely it is that we will be able to raise such funds on favorable terms or at
all, or that any funds raised will be sufficient to complete the FDA approval
process to achieve our goal of commercial distribution in the United States and
elsewhere. Furthermore, there is no guarantee that approval of Product R by the
FDA or any other regulatory authority, or additional financing from the sale of
our securities, will translate into any material change in our financial
condition. The extensive delays and costs of complying with the FDA regulations
makes it unlikely that we will have adequate funds to finance the necessary
clinical studies and related costs.

4.       If we do not obtain the FDA's approval to conduct clinical tests of
         Product R in the United States, we will not be able to complete its
         development and may not be able to sell it anywhere.

         Product R is the only product we are developing, We will not be able to
sell it in the United States unless we submit, and the FDA approves, a new drug
application, or NDA. We must conduct clinical trials of Product R in humans
before we submit an NDA. However, we cannot begin clinical trials in the United
States until the FDA approves our notice of claimed investigational exemption
for a new drug, or IND. We have not yet submitted an IND for Product R and we
don't know if or when we will submit one. The FDA will not approve our IND if we
haven't satisfied regulatory protocols and other preapproval requirements
required for the introduction of a new or unapproved drug.

         If we submit an IND and the FDA approves it, we won't be able to begin
clinical testing unless we are able to obtain the additional financing we need
in order to conduct the trials. It is also possible that clinical trials, if
conducted, will not prove that Product R is safe or effective in

                                        5

<PAGE>

treating viruses of any kind, in which case we won't be able to submit an NDA
and we won't be able to sell Product R in the United States.

         We haven't been able to sell Product R outside the United States
because we don't have a free sales certificate for Product R. A free sales
certificate is a document issued by the country in which a pharmaceutical
product is manufactured, certifying that the country permits the "free sale" of
the product in that country. The Bahamas, where our manufacturing facility is
located, has no procedure in place to issue a free sales certificate for any
therapeutic drug, including Product R. Most countries require that a
pharmaceutical product be at least registered and certified for free sale in the
country in which it is manufactured before allowing the registration of the
product in that country. Because we are unable to obtain a certificate from the
Bahamas, we are not able to meet registration requirements in the countries
which require the certificate, and will be unable to sell Product R in those
countries.

5.       We have incurred losses since our inception, have no product revenue,
         and expect to incur additional losses in the future.

         Although we were formed in 1985, we are still in the development stage.
From inception through December 31, 1999, we had an accumulated deficit of
approximately $19,700,000. We expect that our deficit will continue to increase.
The only product revenues we have ever had are insignificant amounts related to
our distribution of Product R for testing purposes. We do not currently have any
source of product revenue. At this time we have no basis to believe that we will
ever generate operating revenues from the sale of Product R.

6.       We depend on patents and proprietary rights, which may offer only
         limited protection against potential infringement. If we are unable to
         protect our patents and proprietary rights, our business, financial
         condition and results of operations will be harmed.

         Patent protection and trade secret protection are important to our
business and that our future will depend, in part, on our ability to maintain
trade secret protection, obtain patents and operate without infringing the
proprietary rights of others both in the United States and abroad. Litigation or
other legal proceedings may be necessary to defend against claims of
infringement, to enforce our patents, or to protect our trade secrets, and could
result in substantial cost to us and diversion of our efforts. We currently have
15 patent applications pending with the United States Patent and Trademark
Office (the "PTO") and 17 patent applications pending in other countries
relating to Product R. In the United States, we have one allowed patent and
three issued patents from the PTO.

         We also rely on trade secrets, know-how and continuing technological
advancements to protect our proprietary technology. We require all of our
employees, consultants, advisors and collaborators to enter into confidentiality
agreements that prohibit the use or disclosure of information that is deemed
confidential. The agreements also oblige our employees, consultants, advisors
and collaborators to assign to us developments, discoveries and inventions made
by such persons in connection with their work with us. However, these parties
may not honor these agreements and we may not be able to successfully protect
our rights to unpatented trade secrets and

                                        6

<PAGE>

know-how. Others may independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to our trade secrets and
know-how.

         To facilitate development of our proprietary technology base, we may
need to obtain licenses to patents or other proprietary rights from other
parties. If we are unable to obtain such licenses, our product development
efforts may be delayed.

         We may collaborate with universities and governmental research
organizations which, as a result, may acquire certain rights to any inventions
or technical information derived from such collaboration.

         We may incur substantial costs in asserting any patent rights and in
defending suits against us related to intellectual property rights. Such
disputes could substantially delay our product development or commercialization
activities. The United States Patent and Trademark Office or a private party
could institute an interference proceeding relating to our patents or patent
applications. An opposition or revocation proceeding could be instituted in the
patent offices of foreign jurisdictions. An adverse decision in any such
proceeding could result in the loss of our rights to a patent or invention.

7.       Our business could be harmed if we lose the services of the key
         personnel upon whom we depend.

         Advanced Viral is currently wholly dependent upon the personal efforts
and abilities of our three full-time executive officers, only one of whom,
Bernard Friedland, Chairman of the Board, has any experience in the
pharmaceutical industry. The loss or unavailability to us of the services of
Bernard Friedland or Dr. Hirschman, President and Chief Executive Officer, could
have a material negative impact on our business prospects and any potential
earning capacity, and, therefore, we have obtained "key-man" insurance on the
lives of Mr. Friedland and Dr. Hirschman in the amounts of $400,000 and
$1,000,000, respectively. If our level of operations significantly increase, the
business may depend upon our abilities to attract and hire additional management
and staff employees. It is possible that we will be unable to secure such
additional management and staff when necessary.

8.       The voting control held by present management could significantly
         impact our business.

         As of the date of this prospectus, our current officers and directors
beneficially owned 91,303,133 shares of our common stock, or approximately 25.4%
of the shares of common stock deemed outstanding on such date for the purposes
of the percentage calculation, including certain shares underlying options held
by Dr. Hirschman. As there are no cumulative voting rights, current management,
by virtue of their stock ownership, can be expected to influence substantially
the election of our board of directors and thereby continue to impact
substantially our business, affairs and policies.


                                        7

<PAGE>

                              ABOUT THIS PROSPECTUS

         This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission to register the resale of the shares
issued or issuable to the selling shareholders as provided in this prospectus.
As permitted by the Commission's rules, this prospectus does not contain all of
the information you can find in the registration statement or the exhibits to
the registration statement. This prospectus summarizes some of the documents
that are exhibits to the registration statement, and you should refer to the
exhibits for a more complete description of the matters covered by those
documents.

         We have not authorized anyone to give any information regarding the
offering of the shares that is different from what is contained in this
prospectus. This prospectus is not an offer to sell or a solicitation of anyone
to whom it would be unlawful to make an offer of solicitation. You should not
assume that the information contained in this prospectus is accurate as of any
time after the date of this prospectus, and neither the mailing of this
prospectus to our shareholders nor the issuance of the shares should create any
implication to the contrary.

                         WHERE TO FIND MORE INFORMATION

         We file annual, quarterly and special reports with the Commission. The
annual reports contain financial information about Advanced Viral that has been
audited and reported on, with an opinion expressed by an independent auditor.
These filings are available on the Commission's website: http://www.sec.gov.
Hard copies are available at the Commission's public reference facilities at the
following addresses:

         - 450 Fifth Street, NW, Room 1024, Washington, D.C. 20549;
         - Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
           Illinois, 60661; and
         - 7 World Trade Center, 13th Floor, New York, New York, 10007.

         Call the Commission at 1-800-SEC-0330 with questions about its public
reference facilities. To contact us, use the following information:

                          Advanced Viral Research Corp.
                          200 Corporate Boulevard South
                             Yonkers, New York 10701
                                 (914) 376-7383

                 FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE

         This prospectus includes forward-looking statements. We have based
these forward-looking statements on our current expectations and projections
about future events. Words such as "expects," "may," "will," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," and similar expressions
identify forward-looking statements. These forward-looking statements are
subject to important factors, disclosed in this prospectus, that could cause
actual results to differ materially from such expectations, including those
factors discussed in "Risk Factors."

                                        8

<PAGE>

         We will not publicly update or revise any forward-looking statements,
whether because of new information, future events or otherwise. In light of
these risks, uncertainties, and assumptions, the forward-looking events
discussed in the prospectus might not occur.


                       MARKET PRICE OF AND DIVIDENDS ON THE COMMON
                          STOCK AND RELATED SHAREHOLDER MATTERS

Common Stock

         The principal United States market in which our common stock is traded
is the over-the-counter market electronic Bulletin Board. The following table
shows the range of reported low bid and high bid per share quotations for our
common stock for each full quarterly period during the two recent fiscal years
ended December 31, 1998 and 1999, and for the first quarter of 2000. The high
and low bid prices for the periods indicated reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions.

<TABLE>
<CAPTION>
                                                                                 Low Bid              High Bid
<S>                                                                               <C>                  <C>
---                                                                               ---                  ---
1998
     First Quarter................................................................$0.18                $0.4375
     Second Quarter................................................................0.245                0.46
     Third Quarter.................................................................0.16                 0.30
     Fourth Quarter................................................................0.155                0.23
1999
     First Quarter.................................................................0.175                0.35
     Second Quarter................................................................0.202                0.322
     Third Quarter.................................................................0.1875               0.2344
     Fourth Quarter................................................................0.19                 0.27
2000
     First Quarter.................................................................0.185                1.40
     Second Quarter through May 23, 2000...........................................0.44                 0.26
</TABLE>

Stockholders

         The approximate number of holders of record of the Common stock as of
the date of this prospectus is 2,746 inclusive of those brokerage firms and/or
clearing houses holding shares of common stock for their clientele (with each
such brokerage house and/or clearing house being considered as one holder).

Dividend Policy

         We have not declared or paid any dividends on our shares of common
stock. We intend to retain future earnings, if any, that may be generated from
our operations to finance our future operations and expansion and do not plan
for the reasonably foreseeable future to pay dividends to holders of our common
stock. Any decision as to the future payment of dividends will depend

                                        9

<PAGE>

on our results of operations and financial position and such other factors as
our board of directors in its discretion deems relevant.

                                 CAPITALIZATION

         The following table sets forth the actual capitalization derived from
our financial statements as of March 31, 2000, and an adjusted capitalization to
reflect the issuance of an additional 46,070,901 common stock pursuant to:

         o         the issuance of 13,816,357 shares;
         o         the issuance of 8,954,544 shares upon the full exercise of
                   certain warrants; and
         o         the issuance of 23,300,000 shares upon the full exercise of
                   certain stock options.

         The capitalization information set forth in the table below is
qualified by, and should be read in conjunction with, the more detailed
Consolidated Financial Statements and Notes thereto included elsewhere in this
prospectus.
<TABLE>
<CAPTION>

                                                                                                             Pro Forma
                                                                            Actual     Pro Forma (1)        As Adjusted
                                                                            ------     -------------        -----------
<S>                                                                         <C>               <C>                <C>
Stockholders' Equity:
Common stock, $0.00001 par value; 1,000,000,000 shares                      $3,471            $3,607             $3,794
authorized; 347,174,843 shares outstanding Actual; 360,811,200
shares outstanding Pro Forma; 379,429,387 shares outstanding Pro
Forma As Adjusted
Additional paid-in-capital                                             $26,117,514       $29,117,376        $34,889,691
Deficit accumulated during the development stage                      ($21,779,658)     ($21,779,658)      ($21,779,658
Discount on Warrants                                                   ($1,958,286)      ($1,958,286)       ($1,958,286)
Total Stockholders' Equity:                                            ($2,383,041)       $5,383,039        $11,383,039
</TABLE>
(1) Gives effect to issuance of 13,636,357 shares of common stock pursuant to a
securities purchase agreement dated February 16, 2000.


                                       10

<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA

         The following selected historical financial data as of and for the
years ended December 31, 1995, 1996, 1997, 1998 and 1999 have been derived from
our audited financial statements. The selected consolidated financial data set
forth below should be read along with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
notes thereto included elsewhere in this prospectus.
<TABLE>
<CAPTION>

                                                   Selected Statement of Operations Data
                                                             Year Ended December 31
                               ---------------------------------------------------------------------------------    3 Months Ended
                                     1995             1996            1997            1998            1999          March 31, 2000
                                    ------           ------          ------          ------         --------        --------------
<S>                                        <C>            <C>              <C>             <C>         <C>                <C>
Revenues                       $      27,328    $      24,111    $       2,278    $         656    $      10,953    $       3,028
                               -------------    -------------    -------------    -------------    -------------    -------------

Costs and Expenses:
  Research and development            34,931          255,660          817,603        1,659,456        1,745,937          695,075
  General and administrative         420,757          983,256        1,681,436        1,420,427        2,244,205          755,423
  Depreciation                        14,679           18,731           26,288          110,120          230,785           67,760
                               -------------    -------------    -------------    -------------    -------------    -------------
                                     470,367        1,257,647        2,525,327        3,190,003        4,220,927        1,518,258
                               -------------    -------------    -------------    -------------    -------------    -------------

Net Loss from Operations            (443,039)      (1,233,536)      (2,523,049)      (3,189,347)      (4,209,974)      (1,515,230)
                               -------------    -------------    -------------    -------------    -------------    -------------

Other Income (Expense):
  Interest Income                     16,155           46,796          111,845          102,043           42,744           24,963
  Other                               25,000           32,000            7,800              293               --               --
  Interest Expense                        --               --       (1,738,325)      (1,470,699)      (2,007,032)        (564,153)
                               -------------    -------------    -------------    -------------    -------------    -------------
                                      41,155           78,796       (1,618,680)      (1,368,363)      (1,964,288)        (539,190)
                               -------------    -------------    -------------    -------------    -------------    -------------

Net Loss                       $    (401,884)   $  (1,154,740)   $  (4,141,729)   $  (4,557,710)   $  (6,174,262)   $  (2,054,420)
                               =============    =============    =============    =============    =============    =============

Net Loss Per Share of Common
Stock - Basic and Diluted      $        0.00    $        0.00    ($       0.02)   ($       0.02)   ($       0.02)   ($       0.01)
                               =============    =============    =============    =============    =============    =============
Weighted Average Number of
Commons Shares Outstanding       248,002,608      257,645,815      274,534,277      294,809,073      302,361,109      313,819,774
                               =============    =============    =============    =============    =============    =============
</TABLE>



                                       11

<PAGE>
<TABLE>
<CAPTION>



                                                                  Selected Balance Sheet Data
                                                                          December 31
                                                    -------------------------------------------------------------------------------
                                                          1995            1996            1997            1998            1999
                                                         ------          ------          ------          ------          ------
<S>                                                 <C>              <C>              <C>              <C>            <C>
Assets:
Current Assets:
    Cash and cash equivalents                       $      65,230    $      61,396    $     236,059    $     924,420  $     836,876
    Investments                                           479,000        1,378,841        2,984,902          821,047             --
    Inventory                                              18,091           19,729           19,729           19,729         19,729
    Other current assets                                   12,967           16,081           20,240           29,818         59,734
                                                    -------------    -------------    -------------    -------------  -------------
Total current assets                                      575,288        1,476,047        3,260,930        1,795,014        916,339

Property and Equipment                                    214,494          207,209          485,661        1,049,593      1,375,923
Other Assets                                                6,459           33,544          443,251          460,346        569,312
                                                    -------------    -------------    -------------    -------------  -------------
         Total Assets                               $     796,241    $   1,716,800    $   4,189,842    $   3,304,953  $   2,861,574
                                                    =============    =============    =============    =============  =============

Liabilities and Stockholders' Equity (Deficiency)
Current Liabilities:
   Accounts payable and accrued liabilities         $      14,651    $      54,474    $     375,606    $     279,024  $     728,872
   Current portion of capital lease obligation                 --               --               --           38,355         50,315
   Current portion of note payable                             --               --               --               --         19,035
                                                    -------------    -------------    -------------    -------------  -------------
Total current liabilities                                  14,651           54,474          375,606          317,379        798,282
                                                    -------------    -------------    -------------    -------------  -------------
Long-Term Liabilities:
   Common stock to be issued                                   --               --               --               --             --
   Convertible debenture, net                                  --               --        2,384,793        1,457,919      4,446,629
  Capital lease obligation-non-current portion                 --               --               --          167,380        152,059
  Note payable-non-current portion                             --               --               --               --         77,964
                                                    -------------    -------------    -------------    -------------  -------------
Total Long-Term Liabilities                                    --               --        2,384,793        1,625,299      4,676,652
                                                    -------------    -------------    -------------    -------------  -------------
   Deposit on securities purchase agreement                    --               --               --          600,000             --
                                                    -------------    -------------    -------------    -------------  -------------

Stockholders' Equity (Deficiency):
  Common stock, 1,000,000,000 shares of par
value $0.00001 authorized                                   2,512            2,671            2,779            2,964          3,034
   Additional paid-in capital                           4,475,875        7,003,351       10,512,767       14,325,076     17,537,333
   Subscription receivable                                     --          (19,000)         (19,000)              --             --
   Deficit accumulated during the development          (3,696,797)      (4,851,537)      (8,993,266)     (13,550,976)   (19,725,238)
   stage
   Deferred compensation cost                                  --         (473,159)         (73,837)         (14,769)            --
   Discount on warrants                                        --               --               --               --       (428,489)
  Total Stockholders' Equity (deficiency)                 781,590        1,662,636        1,429,443          762,295     (2,613,360)
                                                    -------------    -------------    -------------    -------------  -------------
Total Liabilities and Stockholders' equity          $     796,241    $   1,716,800    $   4,189,842    $   3,304,953  $   2,861,574
                                                    =============    =============    =============    =============  =============

Shares outstanding at period end                      251,181,774      267,031,058      277,962,574      296,422,907    303,472,035
                                                    =============    =============    =============    =============  =============


(RESTUBBED TABLE)
                                                                        As of March
                                                                          31, 2000
                                                                       -----------
Assets:
Current Assets:
    Cash and cash equivalents                                         $   4,094,197
    Investments                                                                  --
    Inventory                                                                19,729
    Other current assets                                                    167,387
                                                                      -------------
Total current assets                                                      4,281,313

Property and Equipment                                                    1,673,358
Other Assets                                                                574,279
                                                                      -------------
         Total Assets                                                 $   6,528,950
                                                                      =============

Liabilities and Stockholders' Equity (Deficiency)
Current Liabilities:
   Accounts payable and accrued liabilities                           $     846,675
   Current portion of capital lease obligation                               51,416
   Current portion of note payable                                           19,452
                                                                      -------------
Total current liabilities                                                   917,543
                                                                      -------------
Long-Term Liabilities:
   Common stock to be issued                                              3,000,000
   Convertible debenture, net                                                15,000
  Capital lease obligation-non-current portion                              138,785
  Note payable-non-current portion                                           74,581
                                                                      -------------
Total Long-Term Liabilities                                               3,228,366
                                                                      -------------
   Deposit on securities purchase agreement                                      --
                                                                      -------------

Stockholders' Equity (Deficiency):
  Common stock, 1,000,000,000 shares of par
value $0.00001 authorized                                                     3,471
   Additional paid-in capital                                            26,117,514
   Subscription receivable                                                       --
   Deficit accumulated during the development
   stage
   Deferred compensation cost                                                    --
   Discount on warrants                                                  (1,958,286)
  Total Stockholders' Equity (deficiency)                                 2,383,041
                                                                      -------------
Total Liabilities and Stockholders' equity                            $   6,528,950
                                                                      =============

Shares outstanding at period end                                        347,174,843
                                                                      =============

























</TABLE>
See notes to consolidated financial statements.

                                       12

<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

         The following discussion and analysis should be read in conjunction
with the Consolidated Condensed Financial Statements and the related Notes to
Consolidated Condensed Financial Statements included in this prospectus. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for a full year. The statements should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1999.

Overview

         Since our inception in July 1985, ADVR has been engaged primarily in
research and development activities. We have not yet generated significant
operating revenues, and as of March 31, 2000 we had incurred a cumulative net
loss of approximately $21,780,000. Our ability to generate substantial operating
revenue depends upon our success in gaining FDA approval for the commercial use
and distribution of Product R (the prior formulation of which was known as
"Reticulose"). All of our research and development efforts have been devoted to
the development of Product R.

         In order to commence clinical trials for regulatory approval of Product
R in the United States, we must submit an Investigational New Drug application
(IND) with the FDA. Filings with foreign regulatory agencies are required to
continue or begin new clinical trials outside the United States. We have
recently contracted with GloboMax LLC of Hanover, Maryland to assist us in our
preparation and filing of the IND with the FDA, and to otherwise assist us
through the FDA process with the objective of obtaining full approval for the
manufacture and commercial distribution of Product R in the United States. The
IND will seek approval to conduct a study testing the effectiveness of Product R
on human subjects with AIDS and other diseases. In the IND we intend to include,
among other things:

                 o    information on chemistry, laboratory and animal controls;

                 o    safety information for the initial study proposed to be
                      conducted on humans; and

                 o    information assuring the identification, quality and
                      purity of Product R and a description of the physical,
                      chemical and microbiological characteristics of Product R.

         We believe that the IND will demonstrate the low rate of adverse
reactions occurring in the use of Product R as a treatment of AIDS and other
diseases, however, it is impossible to determine if or how much of the data from
any ongoing studies will be considered useful by the FDA in considering the IND
application, if it is ever filed. FDA approval to begin human clinical trials of
Product R pursuant to an approved IND will require significant cash
expenditures. Furthermore, Product R may never be approved for commercial
distribution by any country.

         We plan to continue to provide funding for testing programs in our
laboratory and at selected universities, medical schools, laboratories and
hospitals, but the amount of research that will be conducted at those
institutions will depend upon our financial status. Because our research and
development expenses and

                                       13
<PAGE>


clinical trial expenses will be charged against earnings for financial reporting
purposes, we expect that losses from operations will continue to be incurred for
the foreseeable future.

Results of Operations

         For the three month periods ended March 31, 2000 and March 31, 1999, we
incurred losses of approximately $2,054,000 ($0.01 per share) and $910,000
($0.00 per share). Our increased losses were attributable primarily to:

         General and Administrative Expense. Our increased losses during the
three months ended March 31, 2000 are principally due to increased general and
administrative expense (approximately $755,000 for the three months ended March
31, 2000 vs. $438,000 for the three months ended March 31, 1999). Included in
the general and administrative expenses are:

                  o        an increase in consulting and professional fees of
                           approximately $182,000 ($327,000 for the three months
                           ended March 31, 2000 vs. $145,000 for the three
                           months ended March 31, 1999) attributable to the
                           engagement of an investor relations firm and a
                           consulting agreement with Harbor View Group;

                  o        an increase in payroll and related expenses of
                           approximately $90,000 ($236,000 for the three months
                           ended March 31, 2000 vs. $146,000 for the three
                           months ended March 31, 1999) attributable to
                           increased employee and officer salaries and the
                           addition of a Chief Financial Officer position; and

                  o        SEC filing fees of approximately $40,000 for the
                           three months ended March 31, 2000 vs. $0 filing fees
                           paid during the three months ended March 31, 1999.

         Depreciation Expense. Our increased losses during the three months
ended March 31, 2000 are also due to increased depreciation expense
(approximately $68,000 for the three months ended March 31, 2000 vs. $37,000 for
the three months ended March 31, 1999) due to the purchase of additional
machinery and equipment and leasehold improvements.

         Interest Income (Expense). Our increased losses during the three months
ended March 31, 2000 are also due to increased interest expense (approximately
$564,000 for the three months ended March 31, 2000 vs. $95,000 for the three
months ended March 31, 1999). Interest income for the three months ended March
31, 2000 was approximately $25,000 vs $16,000 for the three months ended March
31, 1999. Included in the interest expense are:

                  o        amortization of loan costs and other interest expense
                           (as reduced by other items previously accrued at year
                           end) of approximately $57,000 for the three months
                           ended March 31, 2000 vs. $26,000 for the three months
                           ended March 31, 1999;

                  o        beneficial conversion feature on certain convertible
                           debentures of approximately $387,000 for the three
                           months ended March 31, 2000 vs. $0 for the three
                           months ended March 31, 1999;

                                       14

<PAGE>


                  o        amortization of discount on certain warrants of
                           approximately $120,000 for the three months ended
                           March 31, 2000 vs. $37,000 for the three months ended
                           March 31, 1999.

         Research and Development Expense. Our increased losses during the three
months ended March 31, 2000 are also due to increased research and development
expenses (approximately $695,000 for the three months ended March 31, 2000 vs.
$358,000 for the three months ended March 31, 1999). Included in the research
and development expenses are:

                  o        consulting expenses payable to GloboMax LLC, a firm
                           assisting us with the preparation and filing of the
                           IND, of approximately $268,000 for the three months
                           ended March 31, 2000 vs. $0 for the three months
                           ended March 31, 1999; and

                  o        expenditures in connection with the drug approval
                           process in Argentina of approximately $45,000 for the
                           three months ended March 31, 2000 vs. $0 for the
                           three months ended March 31, 1999.

         Revenues. We had sales of approximately $3,000 for the three months
ended March 31, 2000 vs. $2,000 for the three months ended March 31, 1999. All
sales during these periods were to distributors purchasing Product R for testing
purposes.

Liquidity

         As of March 31, 2000, we had current assets of approximately
$4,281,000, compared to approximately $916,000 at December 31, 1999. We had
total assets of approximately $6,529,000 and $2,862,000 at March 31, 2000 and
December 31, 1999, respectively. The increase in current and total assets was
primarily attributable to proceeds received from the sale of securities and the
exercise of outstanding options (please refer to Statement of Stockholders
Equity contained in the Consolidated Condensed Financial Statements and the
related Notes to Consolidated Condensed Financial Statements included in this
prospectus.

         On March 31, 2000, we filed a shelf registration for 200 million shares
of our common stock (the "Shelf"), all of which remain available for issuance.

         During the three months ended March 31, 2000, we used cash of
approximately $1,168,000 for operating activities, as compared to approximately
$891,000 for the three months ended March 31, 1999. During the three months
ended March 31, 2000, we:

                  o        expended approximately $236,000 for payroll and
                           related costs during the three months ended March 31,
                           2000;

                  o        incurred non-cash expenses of approximately $386,900
                           relating to amortization of deferred interest
                           associated with the beneficial conversion feature of
                           the second tranche of the December 1999 convertible
                           debentures;

                                       15

<PAGE>

                  o        expended approximately$215,000 for professional and
                           consulting fees during the three months ended March
                           31, 2000;

                  o        incurred non-cash expenses relating to amortization
                           of loan costs and discount on warrants relating to
                           convertible debentures issued in 1998, 1999 and 2000
                           of approximately $106,000 and $119,900, respectively;
                           and

                  o        incurred non-cash expenses of approximately $112,000
                           relating to the issuance of warrants for consulting
                           services.

         During the three months ended March 31, 2000, cash flows provided by
financing activities was primarily due to the proceeds from the sale of
convertible debentures, sale of common stock and exercise of options in 1999 and
2000 of approximately $4,800,000. During the three months ended March 31, 2000,
cash flow used for investing activities were for expenditures of approximately
$365,000 for leasehold improvements and furniture and equipment at our Yonkers,
New York office.

         Under the terms of an agreement with RBB Bank, A.G. entered in November
1998 pursuant to which RBB purchased a 7% convertible debenture and related
warrants, we were required to file with the Commission a registration statement
to register shares of the common stock issuable upon conversion of the
convertible debenture and upon exercise of the related warrants to allow the
investors to resell such common stock to the public. Because the registration
statement was not declared effective by the Commission on or before April 13,
1999, the RBB agreement provides that we pay RBB a penalty equal to the sum of
(x) $30,000 and (y) $1,500 for each day lapsed after such date, until the
registration statement is declared effective by the Commission, provided,
however, that total penalties shall not exceed $100,000 in the aggregate. As of
the date hereof, RBB has not requested payment of the penalty, and we are
negotiating with RBB to have the penalty waived.

         Under the terms of an agreement with several purchasers entered in
December 1998, pursuant to which such purchasers purchased an aggregate of
4,917,276 shares of common stock and warrants to purchase an additional
2,366,788 shares of common stock, we were required to file with the Commission a
registration statement to register the common stock issued under the purchase
agreement, and upon exercise of the warrants to allow the resale of such common
stock to the public. Because the registration statement was not declared
effective by the Commission on or before May 21, 1999, the agreement provides
that we pay a penalty of $16,050 for each full calendar month or portion thereof
lapsed after such date, until the registration statement is declared effective,
provided, however, that total penalties shall not exceed $100,000 in the
aggregate. The registration statement was declared effective by the Commission
on December 16, 1999. Pursuant to an agreement in January 2000, the purchasers
in this transaction were paid an aggregate cash penalty of $96,300 in connection
with the registration statement.

         Under the terms of an agreement with several purchasers entered in June
1999, pursuant to which such purchasers purchased an aggregate of 1,851,852
shares of common stock and warrants to purchase an additional 926,528 shares of
common stock, we were required to file with the Commission a registration
statement to register the common stock issued under the purchase agreement, and
upon exercise of the warrants to allow the resale of such common stock to the
public. The agreement provides that if the registration statement is not
declared effective by the Commission prior to December 3, 1999, we must pay

                                       16

<PAGE>

the purchasers a penalty of $10,000, on a pro rata basis, for each full calendar
month lapsed after such date, and a pro rated amount of said $10,000 based on a
month of 30 or 31 days (as applicable to the month in which the registration
statement is declared effective), provided, however, that total penalties shall
not exceed $20,000 in the aggregate. The registration statement was declared
effective by the Commission on December 29, 1999.

         Under the terms of a securities purchase agreement with Focus Investors
LLC dated August 3, 1999 pursuant to which Focus Investors purchased 7%
convertible debentures and related warrants, we were required to file with the
Commission a registration statement to register shares of the common stock
issuable upon conversion of the debentures and upon exercise of the warrants to
allow the purchaser to resell such common stock to the public. The purchase
agreement provides that, if the registration statement is not declared effective
prior to December 1, 1999, or if the number of shares qualified for trading on
the OTC Bulletin Board or reserved for issuance is insufficient for issuance
upon the conversion of the debentures and the exercise of the warrants, or if a
blackout event occurs (as described in the agreement, each of these events
referred to as a "default"), we will be required to pay the purchaser a penalty
for each 30 day period during which a default shall be in effect equal to
$40,000, pro rated for the number of days during each period the defaults were
pending. To the extent the periodic amounts for all default periods exceed
$100,000 in the aggregate, the excess amount shall be paid in shares of common
stock, as set forth in the agreement. The agreement further provides that until
the registration statement has been filed and becomes effective, we will not
file any other registration statement without the written consent of Focus
Investors. The registration statement was declared effective by the Commission
on December 29, 1999.

         Under the terms of a securities purchase agreement with Endeavour
Capital Fund S.A. dated December 28, 1999 and related documents thereto pursuant
to which Endeavour purchased 7% convertible debentures and related warrants, we
were required to file with the Commission a registration statement to register
shares of the common stock issuable upon conversion of the debentures (together
with interest on the debentures, which is payable in common stock on conversion)
and upon and upon exercise of the warrants to allow the purchaser to resell such
common stock to the public. The purchase agreement provides that, if the
registration statement is not declared effective prior to April 1, 2000, or if
the purchaser is restricted from making sales of registrable securities covered
by a previously effective registration statement at any time after the effective
date other than during a permitted suspension period (as defined in the
agreement), then, we will be required to pay the purchaser $40,000 (2% of the
purchase price) for each 30-day period of such default (except that, prior to
the initial effectiveness of this registration statement, the amount will be
$30,000 (1.5% of the purchase price) during the first two 30-day periods of such
default). The registration statement was declared effective by the Commission on
January 18, 2000.

         In February 2000 pursuant to a securities purchase agreement, we sold
to Harbor View Group and various other purchasers 13,636,357 shares of common
stock, and warrants to purchase an aggregate of 5,454,544 shares of common stock
in a private offering transaction. Under the terms of the agreement, we are
required to use our best efforts to file a registration statement to register
the securities issued or issuable in connection with the agreement by May 31,
2000.

         The independent certified public accountants' report on our
consolidated financial statements for the fiscal year ended December 31, 1999,
includes an explanatory paragraph regarding our ability to continue as a going
concern. Note 2 to the Consolidated Financial Statements states that our ability

                                       17

<PAGE>

to continue operations is dependent upon the continued sale of our securities
and debt financing for funds to meet our cash requirements, which raise
substantial doubt about our ability to continue as a going concern. Further, the
accountant's report does not include any adjustments that might result from the
outcome of this uncertainty. Although we may not be successful in doing so, we
plan to eliminate or remedy the deficiencies in our financial condition through
the issuance of additional securities for cash.

Capital Resources

         We have been dependent upon the proceeds from the continued sale of
securities for the funds required to continue operations at present levels and
to fund further research and development activities. The following table
summarizes sales of our securities since February 1997.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                    Gross                          Convertible /         Conversion Price /        Maturity Date /
Date Issued         Proceeds      Security Issued  Exercisable Into      Exercise Price            Expiration Date
--------------------------------------------------------------------------------------------------------------------
<S>      <C>        <C>                            <C>                   <C>   <C>                 <C>
February 1997       $1,000,000    Debenture        6,675,982 shares      $0.15-0.20 per share      Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         535,134 shares        $0.288-0.864 per share    February 28, 2007
--------------------------------------------------------------------------------------------------------------------
August 1997         $3,000,000    Debenture        17,577,354 shares     $0.13-0.23 per share      Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         1,800,000 shares      $0.20-0.27 per share      August 30, 2007
--------------------------------------------------------------------------------------------------------------------
November 1998       $1,500,000    Debenture        10,130,246 shares     $0.1363-$.2011 per share  Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         375,000 shares        $0.20 per share           October 31, 2008
                                                   -----------------------------------------------------------------
                                                   375,000 shares        $0.24 per share
--------------------------------------------------------------------------------------------------------------------
January 1999        $802,500      Common Stock     4,917,276 shares      n/a                       n/a
                                  ----------------------------------------------------------------------------------
                                  Warrants         1,183,394 shares      $0.2040 per share         December 31, 2003
                                                   -----------------------------------------------------------------
                                                   1,183,394 shares      $0.2448 per share
--------------------------------------------------------------------------------------------------------------------
July 1999           $500,000      Common Stock     1,851,852 shares      n/a                       n/a
                                  ----------------------------------------------------------------------------------
                                  Warrants         463,264 shares        $0.324 per share          June 30, 2004
                                                   -----------------------------------------------------------------
                                                   463,264 shares        $0.378 per share
--------------------------------------------------------------------------------------------------------------------
August 1999         $2,000,000    Debentures       14,348,847 shares     $0.1396-$.1438 per share  Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         1,000,000 shares      $0.2461 per share         August 3, 2004
--------------------------------------------------------------------------------------------------------------------
December 1999       $2,000,000    Debentures       13,894,193 shares (1) $0.1363-.1929 per share   December 31, 2004
and January 2000                  ----------------------------------------------------------------------------------
                                  Warrants         210,000 shares        $0.19916667 per share     December 31, 2002
--------------------------------------------------------------------------------------------------------------------
February 2000       $3,000,000    Common Stock     13,636,957 shares     n/a                       n/a
                                  ----------------------------------------------------------------------------------
                                  Warrants         2,727,272 shares      $0.275 per share          February 28, 2005
                                                   -----------------------------------------------------------------
                                                   2,727,272 shares      $0.33 per share
--------------------------------------------------------------------------------------------------------------------
</TABLE>

----------------------------
(1) Represents 13,842,753 shares of common stock issued in January and February
2000 upon the conversion of $1,985,000 principal amount of the convertible
debentures, plus approximately 57,870 shares issuable upon conversion of the
remaining $15,000 principal amount, excluding interest, assuming an applicable
conversion price of $0.2592, based on the average of the high and low bid price
of our common stock on May 9, 2000.


     Securities Issued in 1997
     -------------------------

     RBB Bank, A.G.: In February 1997 and October 1997, in order to finance
research and development, we sold $1,000,000 and $3,000,000, respectively,
principal amount of our ten-year 7% convertible debentures due February 28, 2007
and August 30, 2007, respectively, to RBB in offshore transactions pursuant to
Regulation S under the Securities Act. Accrued interest under the 1997
debentures was payable semiannually,

                                       18

<PAGE>

computed at the rate of 7% per annum on the unpaid principal balance from the
date of issuance until the date of interest payment. The 1997 debentures were
convertible, at the option of the holder, into shares of common stock pursuant
to specified formulas. On April 22, 1997, June 6, 1997, July 3, 1997 and August
20, 1997, pursuant to notice by the holder, RBB, to us under the February 1997
debenture, $330,000, $134,000, $270,000 and $266,000, respectively, of the
principal amount of the February 1997 debenture was converted into 1,648,352,
894,526, 2,323,580 and 1,809,524 shares of the common stock, respectively. As of
August 20, 1997 the February 1997 debenture was fully converted. On December 9,
1997, January 7, 1998, January 14, 1998, February 19, 1998, February 23, 1998,
March 31, 1998, May 4, 1998 and May 5, 1998, pursuant to notice by the holder,
RBB, to us, $120,000, $133,000, $341,250, $750,000, $335,750, $425,000, $275,000
and $620,000, respectively, of the October 1997 debenture was converted into
772,201, 1,017,011, 2,512,887, 5,114,218, 1,498,884, 1,870,869, 1,491,485, and
3,299,979 shares of common stock, respectively. As of May 5, 1998, the October
1997 debenture was fully converted.

     In connection with the issuance of the 1997 debentures, we issued to RBB
six warrants to purchase common stock, three of which entitle the holder to
purchase, from February 21, 1997 through February 28, 2007, 178,378 shares of
the common stock, and three of which entitle the holder to purchase, from August
30, 1997 through August 30, 2007, 600,000 shares of the common stock. The
exercise prices of such warrants are $0.288, $0.576, $0.864, $0.20, $0.23 and
$0.27 per warrant share, respectively. Each such warrant provides that the
holder may elect to receive a reduced number of shares of common stock on the
basis of a cashless exercise; that number of shares bears the same proportion to
the total number shares issuable under such warrant as the excess of the market
value of shares of common stock over the warrant exercise price bears to that
market value. Each warrant contains anti-dilution provisions which provide for
the adjustment of warrant price and warrant shares. As of the date of this
prospectus, none of the warrants have been exercised.

     Securities Issued in 1998
     -------------------------

     RBB Bank, A.G.: In November 1998 we sold $1,500,000 principal amount of our
ten-year 7% convertible debenture due October 31, 2008 to RBB, as agent for the
accounts of certain persons, in an offshore transaction pursuant to Regulation S
under the Securities Act. Accrued interest under the convertible debenture is
payable semiannually, computed at the rate of 7% per annum on the unpaid
principal balance from the date of issuance until the date of interest payment.
The convertible debenture is convertible, at the option of the holder, into
shares of common stock pursuant to a specified formula. The actual number of
shares of common stock issued or issuable upon conversion of the convertible
debenture is subject to adjustment and could be materially less or more than the
above estimated amount, depending upon the future market price of the common
stock and the potential conversion of accrued interest into shares of common
stock.

     Based on the terms for conversion associated with the convertible
debenture, there is an intrinsic value associated with the beneficial conversion
feature of $625,000. Since conversion can occur immediately upon issuance of the
convertible debenture, this amount was recognized as interest expense in 1998.

     On January 19 and March 7, 2000, pursuant to notice by RBB, $1,122,500 and
$377,500 principal amount of the November 1998 debenture was converted into
8,252,746 and 1,877,500 shares of common stock, respectively. As of March 7,
2000, the November 1998 debenture was fully converted.


                                       19

<PAGE>

     In connection with the issuance of the convertible debenture, we issued to
RBB two warrants to purchase common stock , each warrant entitling the holder to
purchase, until October 31, 2008, 375,000 shares of the common stock. The
exercise prices of the two warrants are $0.20 and $0.24 per warrant share,
respectively. Each warrant provides that the holder may elect to receive a
reduced number of shares of common stock on the basis of a cashless exercise;
that number of shares bears the same proportion to the total number shares
issuable under that warrant as the excess of the market value of shares of
common stock over the warrant exercise price bears to that market value. Each
warrant contains anti-dilution provisions which provide for the adjustment of
warrant price and warrant shares. As of the date of this prospectus, none of
these warrants had been exercised.

     The fair value of the warrants issued in connection with the convertible
debenture was estimated to be $48,000 ($0.064 per warrant) based upon a
financial analysis of the terms of such warrants using the Black-Sholes pricing
model with the following assumptions: expected volatility of 20%; a risk free
interest rate of 5.75% and an expected holding period of one year. This amount
has been amortized in the accompanying consolidated financial statements as
interest expense related to the convertible debenture.

     Harbor View Group, Inc., et al.: In December 1998 pursuant to a securities
purchase agreement, we sold to Harbor View Group, Inc. and various other
purchasers 4,917,276 shares of common stock, and warrants to purchase an
aggregate of 2,366,788 shares of common stock, including (x) warrants to
purchase an aggregate of 1,966,788 shares of common stock and (y) a finder's fee
paid to Harbor View Group consisting of two warrants to purchase an aggregate
400,000 shares of common stock, in a private offering transaction pursuant to
Section 4(2) of the Securities Act, for an aggregate purchase price of $802,500.
Of the $802,500 purchase price, $600,000 was received on December 31, 1998, and
$202,500 was received in January 1999. The warrants entitle the holders to
purchase an aggregate of 1,183,394 shares of common stock at an exercise price
of $0.2040 per share, and 1,183,394 shares at an exercise price of $0.2448 per
share. The warrants are exercisable at any time and from time to time until
December 31, 2003. Each warrant provides that the holder may elect to receive a
reduced number of shares of common stock on the basis of a cashless exercise;
that number of shares bears the same proportion to the total number shares
issuable under that warrant as the excess of the market value of shares of
common stock over the warrant exercise price bears to that market value. Each
warrant contains anti-dilution provisions which provide for the adjustment of
warrant price and warrant shares. As of the date of this prospectus, warrants to
purchase 245,098 shares of common stock had been exercised.

     The fair value of the warrants issued as of January 7, 1999, the date of
issuance of the shares in connection with the securities purchase agreement, was
estimated to be $494,000 ($0.0208 per warrant) based upon a financial analysis
of the terms of such warrants using the Black-Sholes Pricing Model with the
following assumptions: expected volatility of 20%, and a risk free interest rate
of 6% through the December 31, 2003 expiration date. This amount is being
amortized to interest expense in the accompanying consolidated financial
statements.

                                       20

<PAGE>

     Securities Issued in 1999
     -------------------------

     Berman, et al.: In July 1999 pursuant to a securities purchase agreement,
we sold 1,851,852 shares of common stock, and warrants to purchase an aggregate
of 925,926 shares of common stock to Michael Berman, Pak-Lin Law and Kwong Wai
Au in a private offering transaction pursuant to Section 4(2) of the Securities
Act, for an aggregate purchase price of $500,000, received in July 1999. The
warrants entitle the holders to purchase 463,264 and 463,264 shares of common
stock at exercise prices of $0.324 and $0.378 per share, respectively. The
warrants are exercisable at any time and from time to time until June 28, 2004.
Each warrant provides that the holder may elect to receive a reduced number of
shares of common stock on the basis of a cashless exercise; that number of
shares bears the same proportion to the total number shares issuable under that
warrant as the excess of the market value of shares of common stock over the
warrant exercise price bears to that market value. Each warrant contains
anti-dilution provisions which provide for the adjustment of warrant price and
warrant shares. As of the date of this prospectus, none of the warrants had been
exercised.

     The fair value of the warrants issued as of July 9, 1999, the date of
issuance of the shares in connection with the securities purchase agreement, was
estimated to be $37,000 ($0.04 per warrant) based upon a financial analysis of
the terms of such warrants using the Black-Sholes Pricing Model with the
following assumptions: expected volatility of 20%, and a risk free interest rate
of 5.75% through the June 30, 2004 expiration date. This amount is being
amortized to interest expense in the accompanying consolidated financial
statements.

     Focus Investors LLC: Pursuant to a securities purchase agreement dated
August 3,1999 in a private offering transaction under Section 4(2) of the
Securities Act, we sold to Focus Investors LLC an aggregate of 20 units for an
aggregate gross purchase price of $2 million, each unit consisting of $100,000
principal amount of our ten-year 7% convertible debentures due August 3, 2009,
and series W warrants to purchase 50,000 shares of our common stock exercisable
until August 3, 2004. Accrued interest under the convertible debentures is
payable semiannually, computed at the rate of 7% per annum on the unpaid
principal balance from the date of issuance until the date of interest payment.
The convertible debentures are convertible, at the option of the holder, into
shares of common stock pursuant to a specified formula. The actual number of
shares of common stock issued or issuable upon conversion of the convertible
debentures is subject to adjustment and could be materially less or more than
the above estimated amount, depending upon the future market price of the common
stock and the potential conversion of accrued interest into shares of common
stock. On January 19, February 17, and March 3, 2000, pursuant to notice by
Focus Investors, $300,000, $900,000, and $800,000 principal amount of the Focus
debentures was converted into 2,178,155, 6,440,725 and 5,729,967 shares of
common stock, respectively. As of March 3, 2000, the debenture was fully
converted.

     The exercise price of the series W warrants is $0.2461 per warrant share.
The warrants provide that the holder may elect to receive a reduced number of
shares of common stock on the basis of a cashless exercise; The series W
warrants contain anti-dilution provisions which provide for the adjustment of
the warrant price and warrant shares. As of March 17, 2000, all of the warrants
had been exercised.

     The fair value of the warrants issued as of August 3, 1999 in connection
with the securities purchase agreement was estimated to be $52,953 ($0.0526 per
warrant) based upon a financial analysis of the terms of such warrants using the
Black-Sholes Pricing Model with the following assumptions: expected volatility
of

                                       21

<PAGE>

20%, and a risk free interest rate of 5.75% through the June 30, 2004 expiration
date. This amount has been amortized to interest expense in the accompanying
consolidated financial statements.

     Endeavour Capital Fund S.A.: Pursuant to a securities purchase agreement
dated December 28, 1999 in a private offering transaction under Section 4(2) of
the Securities Act, we issued the first $1,000,000 tranche of $2,000,000 in
aggregate principal amount of our 7% convertible debentures due December 31,
2004 to Endeavour Capital Fund S.A. (the "Endeavour Transaction"). In connection
with the sale of the first tranche of debentures, we issued warrants to purchase
100,000 shares of our common stock to Endeavour, and two warrants to purchase
5,000 shares of common stock to Endeavour's legal counsel. Accrued interest
under the convertible debentures is computed at the rate of 7% per annum on the
unpaid principal balance from the date of issuance until the date of interest
payment and is payable on conversion of the debenture or on maturity in common
stock using the same conversion formula. The convertible debentures are
convertible, at the option of the holder, into shares of common stock pursuant
to a specified formula. The actual number of shares of common stock issued or
issuable upon conversion of the convertible debentures is subject to adjustment
and could be materially less or more than the estimated number of shares in this
prospectus, depending upon the future market price of the common stock and the
potential conversion of accrued interest into shares of common stock.

         These warrants expire on December 31, 2002 and are exercisable at
$0.19916667 per share. The warrants provide that the holder may elect to receive
a reduced number of shares of common stock on the basis of a cashless exercise.
The warrants contain anti-dilution provisions which provide for the adjustment
of the warrant price and warrant shares. As of the date of this prospectus, none
of these warrants had been exercised.

         The fair value of the warrants issued as of December 28, 1999 in
connection with the securities purchase agreement was estimated to be $4,285
($0.0429 per warrant) based upon a financial analysis of the terms of such
warrants using the Black-Sholes Pricing Model with the following assumptions:
expected volatility of 20%, and a risk free interest rate of 6% through the
December 31, 2002 expiration date. This amount has been amortized to interest
expense in the accompanying consolidated financial statements.

         Securities Issued in 2000
         -------------------------

         Endeavour Capital Fund S.A.: In January 2000, in connection with the
Endeavour Transaction, we issued the second $1,000,000 tranche of $2,000,000 in
aggregate principal amount of our 7% convertible debentures due December 31,
2004, along with warrants to purchase 100,000 shares of our common stock to
Endeavour Capital Fund, S.A. The terms of the second tranche of debentures and
warrants are the identical to the terms of the debentures and warrants issued in
first tranche of the Endeavour Transaction.

         The fair value of the second tranche of warrants issued in January 2000
in connection with the securities purchase agreement was estimated to be $13,600
($0.0136 per warrant) based upon a financial analysis of the terms of such
warrants using the Black-Sholes Pricing Model with the following assumptions:
expected volatility of 90%, and a risk free interest rate of 6% through the
December 31, 2002 expiration date. This amount has been amortized to interest
expense in the accompanying consolidated financial statements.

         On January 27, February 22, 23, 24, and 29, 2000 pursuant to notice by
Endeavour Capital Fund, $150,000, $135,000, $715,000, $785,000 and $200,000
principal amount of the Endeavour debentures was

                                       22
<PAGE>

converted into 1,105,435, 988,913, 5,149,035, 5,622,696 and 1,036,674 shares of
common stock, respectively. As of March 27, 2000, $15,000 of the principal
amount of the debenture remained unconverted.

         Harbor View Group, Inc. On February 7, 2000 pursuant to a consulting
agreement with Harbor View Group, we issued to Harbor View warrants to purchase
1,750,000 shares at an exercise price of $0.21 per share, and warrants to
purchase 1,750,000 shares at an exercise price of $0.26 per share, until
February 28, 2005, in exchange for consulting services provided or to be
provided to us. Each warrant contains anti-dilution provisions which provide for
the adjustment of warrant price and warrant shares. As of the date of this
prospectus, none of these warrants had been exercised.

         The fair value of the warrants is estimated to be $200,249 ($.057 per
warrant) based upon a financial analysis of the terms of the warrant using the
Black-Sholes Pricing Model with the following assumptions: expected volatility
of 90%; a risk free interest rate of 6% and an expected holding period of eleven
months (the term of the consulting agreement). We have determined that $89,045
of the fair value relates to past services and, accordingly, we have expensed
this portion in the three months ended March 31, 2000. The remaining $111,204 is
included in other current assets and will be amortized over the remaining term
of the agreement.

         Harbor View Group, Inc., et al. In February 2000 pursuant to a
securities purchase agreement, we sold to Harbor View Group and various other
purchasers 13,636,357 shares of common stock, and warrants to purchase an
aggregate of 5,454,544 shares of common stock in a private offering transaction
pursuant to Section 4(2) of the Securities Act, for an aggregate purchase price
of $3,000,000. Half of the warrants are exercisable at $0.275 per share, and
half of the warrants are exercisable at $0.33 per share, until February 28,
2005. Each warrant provides that the holder may elect to receive a reduced
number of shares of common stock on the basis of a cashless exercise; that
number of shares bears the same proportion to the total number shares issuable
under that warrant as the excess of the market value of shares of common stock
over the warrant exercise price bears to that market value. Each warrant
contains anti-dilution provisions which provide for the adjustment of warrant
price and warrant shares. As of the date of this prospectus, none of these
warrants had been exercised.

         The fair value of the warrants issued as of February 16, 2000 in
connection with the securities purchase agreement was estimated to be $1,582,734
($0.290 per warrant) based upon a financial analysis of the terms of such
warrants using the Black-Sholes Pricing Model with the following assumptions:
expected volatility of 90%, and a risk free interest rate of 6% through the
February 28, 2005 expiration date. This amount is being amortized to interest
expense in the accompanying consolidated financial statements.

Projected Expenses

         During the next 12 months, we expect to spend approximately $9,000,000,
approximately $4,000,000 of which was raised during the first quarter of fiscal
2000, on research and development related activities, including approximately:

              o   $4,000,000 for operating expenses;


                                       23

<PAGE>

              o   $2,250,000 for the submission of the IND for Product R to the
                  FDA in connection with GloboMax's project management services
                  for the pre-clinical development and IND submission of Product
                  R to the FDA, the development of standard operating procedures
                  and validation protocol for the preparation and manufacture of
                  Product R, and toxicology studies of Product R;

              o   $1,500,000 for capital expenditures for leasehold improvements
                  and equipment at our Yonkers, New York office relating to
                  additional laboratories and manufacturing and production
                  facilities for Product R; and

              o   $1,250,000 for additional personnel.

         We anticipate that we can continue operations through September 2000
with our current liquid assets, including the proceeds from the recent sale of
the convertible debenture and other securities if no stock options or warrants
are exercised nor additional securities sold. If all of the outstanding stock
options and warrants are exercised, we will receive net proceeds of
approximately $15.0 million. Those proceeds will contribute to general and
administrative and working capital and will permit us to substantially increase
our budget for research and development and clinical trials and testing and to
operate at significantly increased levels of operation, assuming Product R
receives approvals and prospects for sales increase to justify such increased
levels of operation. The recent prevailing market price for shares of common
stock has from time to time been above the exercise prices of certain of the
outstanding options and warrants. As such, recent trading levels may not be
sustained nor may any additional options or warrants be exercised. If less than
40% or none of the outstanding options and warrants are exercised, and we obtain
no other additional financing, in order for us to achieve the level of
operations contemplated by management, management anticipates that we will have
to limit intentions to expand operations beyond current levels.

         We anticipate that we will be required to sell additional securities to
obtain the funds necessary to further our research and development activities.
We are currently seeking debt financing, licensing agreements, joint ventures
and other sources of financing, but the likelihood of obtaining such financing
on favorable terms is uncertain. Management anticipates that they will have to
defer their salaries if financing is not available in order to continue
operations,. Management does not believe that, at present, debt or equity
financing will be readily obtainable on favorable terms unless and until FDA
approval for phase I clinical testing is granted. Because of the large
uncertainties involved in the FDA approval process for commercial drug use on
humans, it is possible that we may never be able to sell Product R commercially.

Year 2000 Compliance

         Many older computer software programs refer to years in terms of their
final two digits only. Such programs may interpret the year 2000 to mean the
year 1900 instead. If not corrected, those programs could cause date-related
transaction failures.

         We developed a compliance assurance process to address this concern. A
project team performed a detailed assessment of all internal computer systems
and developed and implemented plans to correct any problems.


                                       24

<PAGE>

         Year 2000 problems could affect our research and development,
financial, administrative and communication operations. Systems critical to our
business which were identified as non-Year 2000 compliant were either replaced
or corrected through programming modifications. In addition, the project team
looked at Year 2000 readiness from other aspects of our business. We remediated
and replaced systems as needed and have been successfully testing and verifying
our modifications. In addition to our in-house efforts, we have asked vendors,
major customers, service suppliers, communications providers and banks whose
systems failures potentially could have a significant impact on our operations
to verify their Year 2000 readiness. To date, we have not encountered any
significant effects related to the Year 2000 and we do not anticipate that any
unforeseen Year 2000 problems will have a material effect on our results of
operations or financial condition.

         External and internal costs specifically associated with modifying
internal use software for Year 2000 compliance were expensed as incurred and
will not have a material impact on our consolidated financial position, results
of operations or cash flows.

         The above expectations are subject to uncertainties. For example, if we
were unsuccessful in identifying or fixing all Year 2000 problems in our
critical operations, or if we are affected by the inability of certain vendors
or suppliers to continue operations due to such a problem, our results of
operations or financial condition could be materially impacted.


                                    BUSINESS

Overview

         Advanced Viral Research Corp. was formed in July 1985 to engage in the
production and marketing, promotion and sale of a pharmaceutical drug with the
trade name Reticulose(TM). Under the Federal Food, Drug, and Cosmetic Act, as
amended in 1962, the Food and Drug Administration, or FDA, classified Reticulose
as a "new drug" requiring FDA approval prior to any sale in the United States.
Reticulose (the current formulation of which is now known as and hereinafter
referred to as Product R(TM) ) has not been approved for sale or use by the FDA
or any foreign government body, and thus we have not as yet commenced any
commercial operations. We are dependent on registration and/or approval by
applicable regulatory authorities of Product R in order to commence commercial
operations.

         Our operations over the last five years have been limited principally
to engaging in research, in vitro testing and analysis of Product R in the
United States, and engaging others to perform testing and analysis of Product R
on human patients overseas. The FDA has not approved human clinical trials for
Product R in the United States. We may be required, in the absence of grants or
other subsidies, to bear the expenses of the first phase of human clinical
trials to the extent the FDA permits human clinical trials to occur. We do not
know what the actual cost of such trials would be. If we need additional
financing to fund such human clinical trials, it may not be available to us,
which may force us to reduce our operations.


                                       25

<PAGE>

Government Regulation

         The FDA imposes substantial requirements upon and conditions precedent
to the introduction of therapeutic drug products, such as Product R, through
lengthy and detailed laboratory and clinical testing procedures, sampling
activities and other costly and time consuming procedures to demonstrate that
such products are both safe and effective in treating the indications for which
approval is sought. After testing in animals, an Investigational New Drug, or
IND, application must be filed with the FDA to obtain authorization for human
testing. When the clinical testing has been completed and analyzed, final
manufacturing processes and procedures are in place, and certain other required
information is available to the manufacturer, a manufacturer may submit a new
drug application, or NDA, to the FDA. No action can be taken to market Product
R, or any therapeutic drug product, in the United States until an NDA has been
approved by the FDA.

         The IND process in the United States is governed by regulations
established by the FDA which strictly control the use and distribution of
investigational drugs in the United States. The guidelines require that an
application contain sufficient information to justify administering the drug to
humans, that the application include relevant information on the chemistry,
pharmacology and toxicology of the drug derived from chemical, laboratory and
animal or in vitro testing, and that a protocol be provided for the initial
study of the new drug to be conducted on humans.

         In order to conduct a clinical trial of a new drug in humans, a sponsor
must prepare and submit to the FDA a comprehensive IND. The focal point of the
IND is a description of the overall plan for investigating the drug product and
a comprehensive protocol for each planned study. The plan is carried out in
three phases: phase I clinical trials, which involve the administration of the
drug to a small number of healthy subjects to determine safety, tolerance,
absorption and metabolism characteristics; phase II clinical trials, which
involve the administration of the drug to a limited number of patients for a
specific disease to determine dose response, efficacy and safety; and phase III
clinical trials, which involve the study of the drug to gain confirmatory
evidence of efficacy and safety from a wide base of investigators and patients.

         An investigator's brochure must be included in the IND and the IND must
commit the sponsor to obtain initial and continual review and approval of the
clinical investigation. A section describing the composition, manufacture and
control of the drug substance and the drug product is included in the IND.
Sufficient information is required to be submitted to assure the proper
identification, quality, purity and strength of the investigational drug. A
description of the drug substance, including its physical, chemical, and
biological characteristics, must also be included in the IND. The general method
of preparation of the drug substance must be included. A list of all components
including inactive ingredients must also be submitted. There must be adequate
information about pharmacological and toxicological studies of the drug
involving laboratory animals or in vitro tests on the basis of which the sponsor
has concluded that it is reasonably safe to conduct the proposed clinical
investigation. Where there has been widespread use of the drug outside of the
United States or otherwise, it is possible in some limited circumstances to use
well documented clinical experience as a substitute for other pre-clinical work.

         After the FDA approves the IND, the investigation is permitted to
proceed, during which the sponsor must keep the FDA informed of new studies,
including animal studies, make progress reports on the study or studies covered
by the IND, and also be responsible for alerting FDA and clinical investigators
immediately of unforeseen serious side effects or injuries.

                                       26

<PAGE>

         When all clinical testing has been completed and analyzed, final
manufacturing processes and procedures are in place, and certain other required
information is available to the manufacturer, a manufacturer may submit an NDA
to the FDA. An NDA must be approved by the FDA covering the drug before its
manufacturer can commence commercial distribution of the drug. The NDA contains
a section describing the clinical investigations of the drug which section
includes, among other things, the following: a description and analysis of each
clinical pharmacology study of the drug; a description and analysis of each
controlled clinical study pertinent to a proposed use of the drug; a description
of each uncontrolled clinical study including a summary of the results and a
brief statement explaining why the study is classified as uncontrolled; and a
description and analysis of any other data or information relevant to an
evaluation of the safety and effectiveness of the drug product obtained or
otherwise received by the applicant from any source foreign or domestic. The NDA
also includes an integrated summary of all available information about the
safety of the drug product including pertinent animal and other laboratory data,
demonstrated or potential adverse effects of the drug, including clinically
significant potential adverse effects of administration of the drug
contemporaneously with the administration of other drugs and other related
drugs. A section is included describing the statistical controlled clinical
study and the documentation and supporting statistical analysis used in
evaluating the controlled clinical studies.

         Another section of the NDA describes the data concerning the action of
a drug in the human body over a period of time and data concerning the extent of
drug absorption in the human body or information supporting a waiver of the
submission of such data. Also included in the NDA is a section describing the
composition, manufacture and specification of the drug substance including the
following: a full description of the drug substance, its physical and chemical
characteristics; its stability; the process controls used during manufacture and
packaging; and such specifications and analytical methods as are necessary to
assure the identity, strength, quality and purity of the drug substance as well
as the availability of the drug products made from the substance. NDA's contain
lists of all components used in the manufacture of the drug product and a
statement of the specifications and analytical methods for each component. Also
included are studies of the toxicological actions of the drug as they relate to
the drug's intended uses.

         The data in the NDA must establish that the drug has been shown to be
safe for use under its proposed labeling conditions and that there is
substantial evidence that the drug is effective for its proposed use(s).
Substantial evidence is defined by statute and FDA regulation to mean evidence
consisting of adequate and well-controlled investigations, including clinical
investigations by experts qualified by scientific training and experience, to
evaluate the effectiveness of the drug involved.

         On September 20, 1984, Bernard Friedland, our former President and
current Chairman of the Board, as sponsor, submitted to the FDA an IND to
conduct a study testing the effectiveness of Product R on human subjects with
AIDS, as well as certain other viruses. The FDA has issued four letters of
deficiency with regard to the IND. In a letter dated November 29, 1984, the FDA
indicated, among other deficiencies noted, that the publications submitted with
the IND and relating to the effectiveness of Product R on virus related diseases
will not be accepted in support of the safety of Product R unless we could
establish that the proposed formulation of Product R is the same as the
formulation of Product R referenced in those publications. In addition, the FDA
required, among other things, that an IND application include relevant
information on the chemistry, laboratory and animal controls to assure the
integrity of the dosage form and that safety information be provided for the
initial study proposed to be conducted on humans. The FDA also required that the
information assure the proper identification, quality, purity and strength of
Product R and a description of the

                                       27

<PAGE>

physical, chemical and microbiological characteristics of Product R. On
September 11, 1987, we received a further deficiency letter from the FDA,
stating that no data had been submitted supporting in vitro anti-HIV activity or
any criterion for a biological response modifier.

         On March 6, 1992, we submitted an amendment to the IND which attempted
to address the FDA's concerns. In response to the March 1992 submission, we
received a third deficiency letter from the FDA dated July 27, 1992, which
provided detailed comments with respect to chemistry, toxicology, microbiology
and clinical areas requiring further studies and action on our part. In June
1995, we received further correspondence from the FDA which stated, among other
things, that our prior submissions to the FDA did not provide an adequate
response to the FDA's earlier request for preclinical information and
accordingly our IND was "inactivated."

         We have not formally responded to the 1992 deficiency letters or the
1995 deficiency letter, nor have any of the studies cited in those letters been
undertaken. In February 1998, we contracted with GloboMax LLC of Hanover,
Maryland to advise and assist us in our preparation of a new IND to be filed
with the FDA, and to otherwise guide us through the FDA process with the
objective of obtaining full approval for Product R in the United States. During
the year ended December 31, 1999, GloboMax continued its project management
services for the pre-clinical development and IND submission of Product R to the
FDA, the development of standard operating procedures and validation protocol
for the preparation and manufacture of Product R. Expenses paid during 1999
relating to the GloboMax agreement were approximately $200,000. Pursuant to the
agreement with GloboMax, we are obligated to pay for services on an hourly
basis, at prescribed rates.

         We currently do not have the resources necessary to complete the FDA
approval process. We may allocate certain proceeds from the exercise of
currently outstanding options and warrants for the purpose of filing a new IND
with the FDA, however, such proceeds, if any, will not be sufficient to improve
our financial condition to any great degree. It is possible that the new IND for
clinical tests of Product R on humans, if submitted, will not be approved by the
FDA for human clinical trials on AIDS or other diseases, and that any tests
previously conducted or to be conducted will not satisfy FDA requirements. It is
also possible that the results of such human clinical trials, if performed, will
not prove that Product R is safe or effective in the treatment of AIDS or other
diseases, or that the FDA will not approve the sale of Product R in the United
States if we submitted a proper NDA. It is not known at this time how extensive
the phase II and phase III clinical trials will be, if they are conducted. The
data generated may not show that the drug Product R is safe and effective, and
even if the data shows that Product R is safe and effective, obtaining approval
of the NDA could take years and require financing of amounts not presently
available to us.

         In connection with our activities outside the United States, we are
also subject to regulatory requirements governing the testing, approval,
manufacture, labeling, marketing and sale of pharmaceutical and diagnostic
products, which requirements vary from country to country. Government regulation
in certain countries may delay marketing of Product R for a considerable period
of time and impose costly procedures upon our activities. The extent of
potentially adverse government regulations which might arise from future
legislation or administrative action cannot be predicted. Whether or not FDA
approval has been obtained for a product, approval of the product by comparable
regulatory authorities of foreign countries must be obtained prior to marketing
the product in those countries. The approval process may be more or less
rigorous from country to country, and the time required for approval may be
longer or shorter than that required in the United

                                       28

<PAGE>

States. Clinical studies conducted outside of any country may not be accepted by
such country, and the approval of any pharmaceutical or diagnostic product in
one country does not assure that such product will be approved in another
country. Accordingly, until registration is granted, if ever, in the United
States or another developed or developing country, we do not expect that we will
be able to generate material sales revenue. We received a grant of authority
from the Bahamian Port Authority, an authorized division of the Bahamian
Government, on October 15, 1992 confirming the right of our subsidiary, Advance
Viral Research, Ltd., a Bahamian corporation, to carry on the manufacture and
export sale of ethical pharmaceutical products.
See "--Marketing And Sales."

Research, Development And Testing

         For the period from inception (February 20, 1984) through March 31,
2000 we expended approximately $6.0 million on testing and research and
development activities either in our laboratories or pursuant to various testing
agreements with both domestic and foreign companies. In 1995, we retained Shalom
Hirschman as our President. As President, Dr. Hirschman established our research
facility in Yonkers, New York, monitored the testing of Product R and recently
performed analyses of Product R with our scientific personnel, which analyses we
believe may be used in connection with the FDA approval process. We currently
are funding research and testing to:

         o    determine the safety of the topical use of Product R on animals
              and cultured human cells;

         o    assess the effectiveness of the topical application of Product R
              on HPV and certain cancer causing proteins of HPV. Recent
              laboratory testing has indicated that Product R may inhibit the
              expression of a protein of HPV which causes cervical cancer;

         o    study the effects of Product R in inhibiting the mutation of the
              AIDS virus in humans;

         o    assess the effectiveness of the topical application of Product R
              for the treatment of persons diagnosed with herpes
              labialis/genital infections;

         o    compare the results of treatment of persons diagnosed with AIDS
              taking a three drug cocktail and Product R with those taking a
              three drug cocktail and a placebo;

         o    determine the effectiveness of Product R for the treatment of
              rheumatoid arthritis in humans;

         o    study the effects of Product R in inhibiting the production of a
              key cancer-causing protein (E-7 protein) of the human papilloma
              virus (HPV). The E-7 protein is associated with the development of
              cervical cancer in women infected with cancer causing subtypes of
              HPV; and

         o    study the effects of Product R in inhibiting the production of key
              cellular receptors for HIV (CCR5 and CXCR4 receptors). The CCR5
              and CXCR4 receptors are two of the cell receptors used by the AIDS
              virus, HIV, to attach to its target cell and initiate infection.

         Our studies detailing the results of the above research and testing may
not positively impact the FDA's decision to approve a new IND for Product R or
approve the marketing, sales or distribution of Product R

                                       29

<PAGE>

within the United States, and as a result may not improve our chances of gaining
approval for the marketing, sales or distribution of Product R anywhere in the
world.

Patents

         We believe that patent protection and trade secret protection are
important to our business and that our future will depend, in part, on our
ability to maintain trade secret protection, obtain patents and operate without
infringing the proprietary rights of others both in the United States and
abroad. We have currently pending 15 patent applications with the United States
Patent and Trademark Office (the "PTO") relating to Product R and 17 foreign
patent applications. In the United States, we have one patent allowed and three
have been issued by the PTO. As patent applications in the United States are
maintained in secrecy until patents issue and as publication of discoveries in
the scientific or patent literature often lag behind the actual discoveries, we
cannot be certain that we were the first to make the inventions covered by each
of our pending patent applications or that we were the first to file patent
applications for such inventions. Furthermore, the patent positions of
biotechnology and pharmaceutical companies are highly uncertain and involve
complex legal and factual questions, and, therefore, the breadth of claims
allowed in biotechnology and pharmaceutical patents or their enforceability
cannot be predicted. We cannot be sure that any additional patents will issue
from any of our patent applications or, should any patents issue, that we will
be provided with adequate protection against potentially competitive products.
Furthermore, we cannot be sure that should patents issue, they will be of
commercial value to us, or that private parties, including competitors, will not
successfully challenge our patents or circumvent our patent position in the
United States or abroad. In the absence of adequate patent protection, our
business may be adversely affected by competitors who develop comparable
technology or products. Moreover, pursuant to the terms of the Uruguay Round
Agreements Act, patents filed on or after June 8, 1995 have a term of twenty
years from the date of such filing, irrespective of the period of time it may
take for such patent to ultimately issue. This may shorten the period of patent
protection afforded to our products as patent applications in the
biopharmaceutical sector often take considerable time to issue. Under the Drug
Price Competition and Patent Term Restoration Act of 1984 (the "Patent Act"), a
sponsor may obtain marketing exclusivity for a period of time following FDA
approval of certain drug applications, regardless of patent status, if the drug
is a new chemical entity or if new clinical studies were used to support the
marketing application for the drug. Pursuant to the FDA Modernization Act of
1997, the period of exclusivity can be extended if the applicant performs
certain studies in pediatric patients. This marketing exclusivity prevents a
third party from obtaining FDA approval for a similar or identical drug under an
Abbreviated New Drug Application ("ANDA") or a "505(b)(2)" New Drug Application.
The statute also allows a patent owner to obtain an extension of applicable
patent terms for a period equal to one-half the period of time elapsed between
the filing of an IND and the filing of the corresponding NDA plus the period of
time between the filing of the NDA and FDA approval, with a five year maximum
patent extension. We cannot be sure that we will be able to take advantage of
either the patent term extension or marketing exclusivity provisions of this
law.

         In order to protect the confidentiality of our technology, including
trade secrets and know-how and other proprietary technical and business
information, we require all of our employees, consultants, advisors and
collaborators to enter into confidentiality agreements that prohibit the use or
disclosure of information that is deemed confidential. The agreements also
oblige our employees, consultants, advisors and collaborators to assign to us
developments, discoveries and inventions made by such persons in connection with
their work with us. We cannot be sure that confidentiality will be maintained or
disclosure prevented by these agreements

                                       30

<PAGE>

or that our proprietary information or intellectual property will be protected
thereby or that others will not independently develop substantially equivalent
proprietary information or intellectual property.

         The pharmaceutical industry is highly competitive and patents have been
applied for by, and issued to, other parties relating to products competitive
with Product R. Therefore, Product R and any other drug candidates may give rise
to claims that they infringe the patents or proprietary rights of other parties
existing now and in the future. Furthermore, to the extent that we or our
consultants or research collaborators use intellectual property owned by others
in work performed for us, disputes may also arise as to the rights in such
intellectual property or in related or resulting know-how and inventions. An
adverse claim could subject us to significant liabilities to such other parties
and/or require disputed rights to be licensed from such other parties. We cannot
be sure that any license required under any such patents or proprietary rights
would be made available on terms acceptable to us, if at all. If we do not
obtain such licenses, we may encounter delays in product market introductions,
or may find that the development, manufacture or sale of products requiring such
licenses may be precluded. In addition, we could incur substantial costs in
defending ourselves in legal proceedings instituted before the PTO or in a suit
brought against it by a private party based on such patents or proprietary
rights, or in suits by us asserting our patent or proprietary rights against
another party, even if the outcome is not adverse to us. There are extensions
available under the Patent Act if the delay in prosecution of the patent
application results from a delay in the PTO's handling of any interference or
appeal involving the application. We have not conducted any searches or made any
independent investigations of the existence of any patents or proprietary rights
of other parties.

Marketing And Sales

         Except for limited sales of Product R for testing and other purposes,
Product R is not sold commercially anywhere in the world. As of the date of this
prospectus, our efforts or the efforts of our representatives have produced no
material benefits to us regarding our ability to have Product R sold
commercially anywhere in the world. We have entered into exclusive distribution
agreements with five separate entities granting exclusive rights to distribute
Product R in the countries of China, Japan, Hong Kong, Macao, Taiwan, Mexico,
Channel Islands, Isle of Man, British West Indies, Jamaica, Haiti, Bermuda,
Belize, Saudi Arabia, Argentina, Bolivia, Paraguay, Uruguay, Brazil and Chile.
Pursuant to these agreements, the distributors are obligated to cause Product R
to be approved for commercial sale in such countries and upon such approval, to
purchase from us certain minimum quantities of Product R to maintain the
exclusive distribution rights. Our marketing plans for Product R are still
dependent upon registration of Product R for sale in various jurisdictions where
our distributors are seeking approvals.

         To date we have received no information that would lead us to believe
that we will be positioned to sell Product R commercially anywhere in the world
in the immediate future, and it is possible that none of our distributors will
ever secure registration of Product R. The only application for registration of
Product R which has been filed as of the date hereof is an application
requesting that Product R be permitted to be sold in Argentina, which was filed
in March 1998. In this March 1998 filing, DCT, S.R.L., our distribution agent in
Argentina, received an investigational new drug identification number from the
National Administration for Drug, Food and Medical Technology in Argentina, or
ANMAT. This allowed DCT to begin pre-clinical studies on our behalf with Product
R which have since been concluded. In February 2000, DCT received approval from
the ANMAT to proceed further with Phase I clinical trials in Argentina for
Product R. We are currently evaluating the costs and time necessary to proceed
with Phase I clinical trials in Argentina. In

                                       31

<PAGE>

addition, DCT must apply for approval from the ANMAT to proceed with Phases II
and III clinical trials before Product R is approved for sale in Argentina. The
costs and time necessary to complete such trials cannot be predicted at this
time.

         We initially targeted our sales and marketing efforts to those
countries where Product R was previously marketed by its prior owners for a
number of years as an anti-viral agent in the treatment of Asian influenza,
viral pneumonia, viral infectious hepatitis, mumps, encephalitis, herpes simplex
and herpes zoster. Those countries included Singapore, Hong Kong, Malaysia,
Taiwan, the Philippines and Malta. Registration of Product R will be required in
such countries as well as in the other countries comprising the distributors'
territories before any significant sales may begin. The registration of Product
R for sale in these countries has been frustrated due to our inability to obtain
the registration and approval to sell Product R in the Bahamas, the country of
origin, and a general lack of published data on the effectiveness of Product R.
Until Product R is registered and approved for sale in the United States, in
another developed country or in the other countries included in the
distributors' territories, we will not generate any material sales of Product R.
For the years ended December 31, 1999, 1998 and 1997, we reported no commercial
sales except limited sales for testing purposes. Product R is not legally
available for commercial sale anywhere in the world, except for testing
purposes. See "--Research, Development and Testing."

         By letter dated February 13, 1996, our subsidiary in the Bahamas,
Advance Viral Research, Ltd., was notified that the National Economic Council of
the Bahamas had refused our subsidiary's request for a "free sales certificate"
for Product R. A free sales certificate is a document typically issued by a
country in which a pharmaceutical product is manufactured which certifies that
such country permits the "free sale" of such product in such country. Most
countries require that, before allowing the registration of a pharmaceutical
product for use in that country, it must at least be registered and certified
for free sale in the country in which it is manufactured. However, the Bahamas
has no procedures currently in place to issue a free sales certificate for any
therapeutic drug, including Product R. If we do not obtain a free sales
certificate or other equivalent document from the Bahamas or another country, or
if we do not receive FDA approval, it is possible that we will not be able to
meet registration requirements in the countries which require that a
pharmaceutical product be at least registered and certified for free sale in the
country in which it is manufactured. Currently, we intend to manufacture Product
R in Argentina, where we are seeking regulatory approval and therefore does not
need a free sale certificate for Argentina.

         We are currently in the planning stages for the reconfiguration of our
New York research facilities to enable us to manufacture and produce Product R
if and when the FDA approves Product R for distribution and sale in the United
States.

Competition

         The pharmaceutical drug industry is highly competitive and rapidly
changing. If we ever successfully develop Product R, it will compete with
numerous existing therapies. In addition, many companies are pursuing novel
drugs that target the same diseases we are targeting with Product R. We believe
that a significant number of drugs are currently under development and will
become available in the future for the treatment of HIV, HPV, hepatitis and
other viruses. We anticipate that we will face intense and increasing
competition as new products enter the market and advanced technologies become
available. Our competitors' products may be more effective, or more effectively
marketed and sold, than Product R. Competitive products

                                       32

<PAGE>

may render Product R obsolete or noncompetitive before we can recover the
expenses of developing and commercializing Product R. Furthermore, the
development of a cure or new treatment methods for the diseases we are targeting
could render Product R noncompetitive, obsolete or uneconomical. Many of our
competitors:

         o    have significantly greater financial, technical and human
              resources than we have and may be better equipped to develop,
              manufacture and market products,

         o    have extensive experience in preclinical testing and clinical
              trials, obtaining regulatory approvals and manufacturing and
              marketing pharmaceutical products,

         o    have products that have been approved or are in late stage
              development and operate large, well-funded research and
              development programs.

         A number of therapeutics are currently marketed or are in advanced
stages of clinical development for the treatment of HIV infection and AIDS,
including several products currently marketed as part of a "cocktail" in the
United States. We believe Product R should be added to such cocktails in order
to enhance their effectiveness. Among the companies with significant commercial
presence in the AIDS market are Glaxo Wellcome, Bristol-Myers Squibb,
Hoffmann-La Roche, Agouron Pharmaceuticals, Merck & Co. and DuPont Pharma. In
addition, Glaxo Wellcome, in collaboration with Biochem Pharma, is pursuing
development of Lamivudine, a nucleoside analogue to treat hepatitis B infection.
This compound was recently approved for marketing in the United States, China
and several other countries and represents significant potential competition for
Product R as a treatment for hepatitis B.

         Several therapeutics are currently marketed or are in advanced stages
of clinical development for the treatment of HPV. Schering Plough Corp.
manufactures Intron A, an injectable interferon product approved by the FDA for
the treatment of HPV. 3M Pharmaceuticals received FDA approval for its
immune-response modifier, Aldara(R), a self-administered topical cream, for the
treatment of HPV. Product R, if approved for commercial sale by the FDA, would
also compete with surgical, chemical, and other methods of treating HPV.
Products developed by our competitors or advances in other methods of the
treatment of HPV may have a negative impact on the commercial viability of
Product R.

         Several products are currently marketed or are in advanced stages of
clinical development for the treatment of rheumatoid arthritis. Immunex Corp.'s
product Enbrel, a biologic response modifier, was approved by the FDA in
November 1998 for the treatment of moderate to severe rheumatoid arthritis.
Centocor Inc. is developing a monoclonal antibody known as Remicade, an
anti-inflammatory agent that has completed phase III trials in rheumatoid
arthritis. The FDA approved Remicade for treatment of Crohn's disease in August
1998. Centocor filed for FDA approval of an expanded indication for Remicade for
rheumatoid arthritis in January 1999. These products represent significant
competition for Product R as a treatment for rheumatoid arthritis.

         Three antiviral products are presently sold in the United States for
the treatment of recurrent genital herpes: Zovirax(R) (manufactured by Glaxo
Wellcome Inc.) which contains acyclovir and is administered orally, topically,
or intravenously, Famvir(R) (manufactured by SmithKline Beecham Pharmaceuticals)
which contains famcyclovir and is administered orally, and Valtrex(R)
(manufactured by Glaxo Wellcome, Inc.) which

                                       33

<PAGE>

contains valacyclovir and is also administered orally. These products represent
significant competition for Product R as a treatment for genital herpes.

         Other small companies may also prove to be significant competitors,
particularly through collaborative arrangements with large pharmaceutical and
biotechnology companies. Academic institutions, governmental agencies and other
public and private research organizations are also becoming increasingly aware
of the commercial value of their inventions and are more actively seeking to
commercialize the technology they have developed.

         If we successfully develop and obtain approval for Product R, we will
face competition based on the safety and effectiveness of Product R, the timing
and scope of regulatory approvals, the availability of supply, marketing and
sales capability, reimbursement coverage, price, patent position and other
factors. Our competitors may develop or commercialize more effective or more
affordable products, or obtain more effective patent protection, than we do.
Accordingly, our competitors may commercialize products more rapidly or
effectively than we do, which could hurt our competitive position and adversely
affect our business. If and when we obtain FDA approval for Product R, we expect
to compete primarily on the basis of product performance and price with a number
of pharmaceutical companies, both in the United States and abroad.

Employees

         We have 25 full-time employees, consisting of our four executive
officers, 18 employees involved in research, and three administrative employees.
Dr. Hirschman, our President and Chief Executive Officer and a director, Bernard
Friedland, our Chairman of the Board and a director, William Bregman, our
Secretary, Treasurer and a director, and Alan V. Gallantar, our Chief Financial
Officer, each devote all of their business time to our day-to-day business
operations. Additionally, we may hire, as and when needed, and as available,
such sales and technical support staff and consultants for specific projects on
a contract basis. See "Management --Employment Contracts, Termination of
Employment and Change-in-Control Arrangements."

Property

         We lease approximately 16,650 square feet for executive offices,
including research laboratory space, at 200 Corporate Boulevard South, Yonkers,
New York from an unaffiliated third party (the "Yonkers Lease"). The term of the
Yonkers Lease is five years through April 2005 and our annual rental obligation
under the Yonkers Lease is approximately $260,000.

         We currently maintain corporate offices at 1250 East Hallandale Beach
Boulevard, Hallandale, Florida 33009, pursuant to a three year lease agreement,
at approximately $14,000 annually. The Bahamian manufacturing facility, which
was acquired on December 16, 1987, is located in Freeport, Bahamas and consists
of a 29,242 square foot site containing a one-story concrete building of
approximately 7,300 square feet and is equipped for all phases of the testing,
production, and packaging of Product R. The Bahamian facility is currently being
used to store and produce inventory for testing purposes.



                                       34

<PAGE>

                                   MANAGEMENT

Executive Officers and Directors

         Our directors and executive officers and further information concerning
them are as follows:
<TABLE>
<CAPTION>
Name                                    Age        Position
----                                    ---        --------
<S>                                      <C>
Shalom Z. Hirschman, M.D.                63        President, Chief Executive Officer, Chief
                                                   Scientific Officer, Director
Bernard Friedland                        74        Chairman of the Board of Directors

William Bregman                          78        Vice President, Secretary, Treasurer,
                                                   Director
Louis J. Silver                          71        Director

Alan V. Gallantar                        42        Chief Financial Officer
</TABLE>

         Shalom Z. Hirschman, M.D., President, Chief Executive Officer and a
director since October 1996, was Director of the Division of Infectious Diseases
and Professor of Medicine at Mount Sinai School of Medicine, New York, New York,
from May 1969 until October 1996.

         Bernard Friedland, Chairman of the Board since May 1987, director since
July 1985 and President and Chief Executive Officer from September 1985 until
October 1996, was employed by Key, Inc. for 30 years, until March 1, 1986, in
the Research and Development and Quality Assurance Departments in
Pharmaceuticals, Pharmacology, and Cancer antimetabolites, and has been the
President and CEO of our subsidiary, Advance Viral Research, Ltd. since 1984.

         William Bregman, director since July 1985 and Secretary-Treasurer since
September 1985, was Vice President from September 1985 until May 1987 and Vice
President and Treasurer of our subsidiary, Advance Viral Research, Ltd., from
August 1984 until the present.

         Louis J. Silver, director since May 1992, has been self-employed as a
free-lance accountant and auditor since 1985. Mr. Silver previously served as a
member of the board of directors during the periods from May 1987 to July 1987.

         Alan V. Gallantar, Chief Financial Officer since October 1999, was
treasurer and controller from March1998 to September 1999 of AMBI Inc., a
nutraceutical company, senior vice president and chief financial officer from
1992 to 1997 of Bradley Pharmaceuticals, Inc., a pharmaceutical manufacturer,
and vice president and divisional controller from 1989 to 1991 for PaineWebber
Incorporated. From 1985 to 1989, Mr. Gallantar was second vice president at The
Chase Manhattan Bank, N.A., and from 1983 to 1985, was a senior accountant at
Philip Morris, Incorporated. From 1979 to 1983, Mr. Gallantar was a senior
accountant in the audit department of Deloitte & Touche.


                                       35

<PAGE>

         Bernard Friedland and William Bregman may be deemed a "parent" and
"promoter" as those terms as defined in the rules and regulations promulgated
under the Securities Act. Directors are elected to serve until the next annual
meeting of stockholders and until their successors have been elected and have
qualified.

Director Compensation

         The arrangement for director compensation is $150 for each meeting of
the board of directors attended, which has not in fact been paid within at least
the last three years.

Executive Officer Compensation

         Other than Dr. Hirschman, our President and Chief Executive Officer,
none of our directors, officers or employees received salary and bonus exceeding
in the aggregate $100,000 in the years ended December 31, 1999, 1998 or 1997.
The following table provides certain summary information concerning compensation
paid or accrued by our company to or on behalf of the named executive officer
for the years ended December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
                                                  Summary Compensation Table
                                                  --------------------------

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Long Term
                                                          Annual Compensation                        Compensation Awards
                                                          -------------------                        -------------------
                                                                                               Securities
Name and                                                                Other Annual           Underlying           All Other
Principal Position              Year      Salary (1)      Bonus       Compensation (2)      Options/SARs (3)     Compensation (4)
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>        <C>           <C>               <C>                  <C>                   <C>
Shalom Z. Hirschman, M.D.,      1999       $325,000      $     0           $   34,738                     --          $4,316
President, Chief Executive
Officer and Chief Scientific
Officer since October 1996      1998       $325,000      $     0           $   12,288             23,000,000          $4,316
and consultant from May 24,
1995 until October 1996.        1997       $325,000      $43,000           $   14,604                     --          $3,956


------------------------------------------------------------------------------------------------------------------------------------
Alan V. Gallantar, Chief        1999        $43,750      $     0           $    1,500              4,547,880              --
Financial Officer since
October 1999.
                                1998             --           --                   --                     --              --

                                1997             --           --                   --                     --              --
</TABLE>
--------------------------------
1.   Dr. Hirschman's salary increased for the year 2000 to $361,000. Mr.
     Gallantar was hired in October 1999 and therefore his salary reflects only
     three months of his $175,000 annual salary.
2.   Other Annual Compensation for Dr. Hirschman includes medical insurance
     premiums we paid on his behalf, and aggregate incremental cost to us of Dr.
     Hirschman's automobile lease, gas, oil, repairs and maintenance. Other
     Annual Compensation for Mr. Gallantar includes an automobile allowance of
     $500 per month.
3.   Includes all options granted during fiscal years shown. No stock
     appreciation rights were granted with any options.
4.   The dollar value of insurance premiums paid by, or on behalf of, us with
     respect to term life insurance for the benefit of Dr. Hirschman.

         In February 1998, we granted Dr. Hirschman options to acquire
23,000,000 shares of common stock, which are currently exerciseable at $.27 per
share through February 17, 2008. In October 1999, we granted Mr. Gallantar
options to acquire 4,547,880 shares of common stock, exercisable in one third
increments on October 1, 2000, 2001, and 2002, until October 1, 2009. No other
stock options were granted to the named executive officers during 1999. Other
than Dr. Hirschman's and Mr. Gallantar's stock options, we currently have
outstanding:

                                       36

<PAGE>

         o    Warrants to purchase 14,247,296 shares of common stock at exercise
              prices ranging from $0.199 to $0.864 per warrant share; and

         o    Options to acquire 51,952,280 shares of the common stock at
              exercise prices ranging from $0.14 to $0.36 per option share, none
              of which are beneficially owned by our directors, officers or
              employees; and

         The following table sets forth certain summary information concerning
exercised and unexercised options to purchase our common stock as of December
31, 1999 held by the named executive officers. No options were exercised during
the year ended December 31, 1999 by the named executive officers.
<TABLE>
<CAPTION>

                                                Aggregated Option Exercises in
                                          Last Fiscal Year And Year-end Option Values
                                          -------------------------------------------

                                                             Number of Securities       Value of Unexercised In-the-
                                Shares                      Underlying Unexercised            Money Options at
                              Acquired on     Value       Options at Fiscal Year-End           Fiscal Year-End
Name                         Exercise (#)  Realized (1)    Exercisable/Unexercisable      Exercisable/Unexercisable
----                         ------------  ------------    -------------------------      -------------------------
<S>                                <C>        <C>           <C>          <C>                   <C>  <C>   <C>
Shalom Z. Hirschman, M.D.          0           N/A          16,100,000 / 23,000,000            $0 / $0 (2)(3)
Alan V. Gallantar                  0           N/A               0 / 4,547,880                 $0 / $0 (2)(4)
</TABLE>
--------------------------------
(1)  The difference between the average of the high and low bid prices per share
     of the common stock as reported by the Bulletin Board on the date of
     exercise, and the exercise or base price.
(2)  The difference between the average of the high and low bid prices per share
     of the common stock as reported by the Bulletin Board on December 31, 1999,
     $0.125, and the exercise or base price of in-the-money stock options.
(3)  As of December 31, 1999, Dr. Hirschman held options to purchase 4,100,000
     shares of common stock at $0.18 per share, 4,000,000; shares of common
     stock at $0.19 per share; 4,000,000 shares of common stock at $0.27 per
     share; and 4,000,000 shares of common stock at $0.36 per share, all of
     which are currently exercisable. In addition, Dr. Hirschman held options to
     purchase 23,000,000 shares of common stock at $0.27 per share which are
     exercisable through February 17, 2008.
(4)  As of December 31, 1999, Mr. Gallantar held options to purchase 4,547,880
     shares of common stock at $0.24255 per share, which are exercisable in
     increments of 1,515,960 on October 1, 2000, 2001 and 2002.

Employment Contracts, Termination of Employment and Change-in-Control
Arrangements

         Hirschman Employment Agreement

         Pursuant to an Amended and Restated Employment Agreement dated as of
May 12, 2000 between ADVR and Dr. Hirschman, we employ Dr. Hirschman on a full
business time basis as our President, Chief Executive Officer, Chief Scientific
Officer and Chairman of our Scientific Advisory Board, with duties including
supervising our day-to-day operations, including management of scientific,
medical, financial, regulatory and corporate matters, establishing appropriate
laboratory, executive and other facilities on our behalf, and raising additional
capital on our behalf. The agreement includes an agreement that Dr. Hirschman
will be nominated as a director for the duration of Dr. Hirschman's employment
with us under the agreement, and voting agreements regarding the election of
Messrs. Friedland, Bregman and Dr. Hirschman as directors.
See "Principal Stockholders."

         Pursuant to the agreement, the term of Dr. Hirschman's employment
continues until December 31, 2002 and will continue for one year periods
thereafter unless either we or Dr. Hirschman gives the other notice

                                       37

<PAGE>



at least two years in advance that such one year automatic extension shall be
vitiated. If the agreement is terminated by us for cause, we may cancel all
unvested stock options, benefits under stock bonus plans and stock appreciation
rights ("SARs") granted to Dr. Hirschman. If the agreement is terminated by Dr.
Hirschman for cause, we are required to pay to Dr. Hirschman his annual salary
and employee benefits through the remainder of the then current term.

         Pursuant to the agreement, Dr. Hirschman receives an annual salary of
$361,000, payable in equal biweekly installments. The agreement also entitles
Dr. Hirschman to a major medical insurance policy, disability policy and dental
policy insurance to Dr. Hirschman and his dependents that is reasonably
acceptable to the parties, and a term life insurance policy at least in the
amount of $1,000,000, with a beneficiary to be designated by Dr. Hirschman. The
agreement further provides that we shall:

         o    take such action as may be necessary to permit Dr. Hirschman to be
              entitled to participate in stock option, stock bonus or similar
              plans (including plans for SARs) as are established by us;

         o    lease or purchase for Dr. Hirschman, at his discretion, an
              automobile selected and to be used by him, having a list price not
              in excess of $40,000, and pay for all gas, oil, repairs and
              maintenance, as well as the lease or purchase payments, as
              applicable, in connection with the automobile;

         o    reimburse Dr. Hirschman for all of his proven expenses incurred in
              and about the course of his employment that are deductible under
              the current tax law, including, among other expenses, his license
              fees, membership dues in professional organizations, subscriptions
              to professional journals, necessary travel, hotel and
              entertainment expenses incurred in connection with overnight,
              out-of- town trips that contribute to the benefit of us in the
              reasonable determination of Dr. Hirschman, and all other expenses
              that may be pre-approved by our board of directors; and

         o    provide not less than four weeks paid vacation annually and such
              paid sick or other leave as we provide to all of our employees.

         The agreement also provides for the payment of $100,000 to Dr.
Hirschman on the date an IND number is obtained from and approved by the FDA so
that human research may be conducted using Product R; or the execution of an
agreement relating to co-marketing pursuant to which one or more third parties
commit to make payments to us of at least $15 million.

         The agreement further provides that Dr. Hirschman is not authorized,
without the express written consent of the board of directors and other than in
the ordinary course of business, to pledge the credit of ADVR or any of our
other employees, to bind us, to release or discharge any debt due us unless we
have received payment in full, or to dispose (as collateral or otherwise) of all
or substantially all of our assets.

         Dr. Hirschman has agreed that he will assign to us all patents he
develops which result from his knowledge acquired while performing his duties
under the agreement, and that, if his employment under the agreement is
terminated by us "for cause" or by Dr. Hirschman otherwise than "for cause," as
specified in that agreement, he will not, directly or indirectly, compete with
us for three years after termination or solicit our employees to leave our
employ for one year after termination.

                                       38

<PAGE>

         Pursuant to the execution of the agreement, we ratified a $100,000
bonus payment made to Dr. Hirschman in February 1998 and the February 1998 grant
to Dr. Hirschman of options to acquire 23,000,000 shares of common stock
exercisable at $0.27 per share at any time through February 17, 2008 or (i) 90
days after (A) the termination of Dr. Hirschman's employment (other than for
good reason or upon the occurrence of a change in control, in which two cases
Dr. Hirschman may exercise such options until the expiration of the original
term, or (B) Dr. Hirschman is terminated for cause, or (ii) until 18 months
after death.

         Gallantar Employment Agreement

         ADVR entered into an Employment Agreement dated as of October 1, 1999
with Alan V. Gallantar, pursuant to which Mr. Gallantar is employed as our Chief
Financial Officer on a full business time basis. Under the agreement, the term
of Mr. Gallantar's employment continues until October 1, 2002. If the agreement
is terminated by us for cause, Mr. Gallantar will have no accrued right to
receive any bonus for the year in which his employment is terminated, all
unvested stock options will be cancelled, and any vested stock options will
terminate 90 days after the effective date of termination. If the agreement is
terminated by ADVR not for cause, we are required to pay to Mr. Gallantar all
accrued and unpaid compensation, and all stock options granted as of the date of
the agreement shall become 100% vested. Upon such termination not for cause, all
options which became vested as a result of this provision may be exercised by
Mr. Gallantar until 90 days after the effective date of termination. If Mr.
Gallantar elects to terminate this agreement as a result of a change in control,
he will be paid his base salary for the remaining term of the agreement, and all
stock options granted on the date of the agreement will become 100% vested and
exercisable until 90 days after the effective date of termination. If Mr.
Gallantar elects to terminate this agreement for any other reason, he will be
paid all unaccrued and unpaid base salary, and he will have the right to
exercise any vested stock until 90 days after the effective date of termination.
All payments made to Mr. Gallantar in connection with the termination of the
agreement are subject to reduction to the extent they exceed 2.99 times the
"base amount" as determined under Section 280G of the Internal Revenue Code of
1986.

         Pursuant to the agreement, Mr. Gallantar will receive an annual salary
of $175,000 for the first year of the agreement; $200,000 for the second year of
the agreement; and $225,000 for the third year of the agreement. For each year
of the agreement, Mr. Gallantar is entitled to a cash bonus of between 10% and
50% of his base salary, based on certain targets and the discretion of the board
of directors. As of the date of the agreement, Mr. Gallantar received options to
purchase an aggregate of 4,547,880 shares of our common stock. The options
expire on October 1, 2009, and are exercisable in three increments of 1,515,960
on the October 1, 2000, 2001 and 2002, respectively. The agreement further
provides that:

         o    Mr. Gallantar and his family are entitled to receive the same
              benefits generally given to other senior executives of ADVR.

         o    Mr. Gallantar is entitled to 15 working days of vacation during
              the first year and 20 days of vacation during each year
              thereafter, subject to certain exceptions.

         o    Mr. Gallantar will receive a non-accountable automobile allowance
              of $500 per month, provided however, that he is be responsible for
              all costs of acquiring and maintaining the automobile.


                                       39

<PAGE>

         o    We will reimburse Mr. Gallantar for certain professional license
              and membership fees up to a maximum of $5,000 per year in the
              aggregate, and all other expenses incurred in the performance of
              his duties with the prior approval of the Chief Executive Officer.

         o    If Mr. Gallantar relocates his primary residence to Westchester
              County, New York, or New York City prior to the second anniversary
              of the agreement, we will pay reasonable moving, legal and
              brokerage fees or costs incurred by him in connection with such
              relocation up to a maximum of $15,000.

         The agreement provides that Mr. Gallantar is not authorized, without
the express written consent of the board of directors and other than in the
ordinary course of business, to pledge the credit of ADVR, to bind us under any
note, mortgage or other monetary obligation, to release or discharge any debt
due us unless we have received payment in full, or to dispose (as collateral or
otherwise) of a substantial amount of our assets. Furthermore, Mr. Gallantar
agreed that he will assign to us all intellectual property rights developed by
him which result from the knowledge he acquired while performing his duties
under the agreement. Finally, he has agreed that he will not, directly or
indirectly, compete with us for five years after termination of his employment
or solicit our employees to leave our employ for one year after termination.


                                       40

<PAGE>



                             PRINCIPAL SHAREHOLDERS

         The following table sets forth certain information regarding the
beneficial ownership of our common stock as of the date of this prospectus for
(i) each stockholder who is known by us to own beneficially more than 5% of our
common stock, (ii) each director and executive officer, and (iii) all of our
directors and named executive officers as a group. Except as otherwise
indicated, we believe, based on information furnished by the persons named in
this table that such persons have voting and investment power with respect to
all shares of common stock beneficially owned by them, subject to community
property laws, where applicable.
<TABLE>
<CAPTION>

                                                                Shares of Common Stock
Name and Address of Beneficial Owner                            Beneficially Owned (1)           Percent Owned
------------------------------------                            ----------------------           -------------
<S>                                                             <C>                                  <C>
Shalom Z. Hirschman, M.D.                                       39,100,000        (2)(3)             10.1%
c/o Advanced Viral Research Corp.
200 Corporate Boulevard South
Yonkers, New York 10701

Bernard Friedland                                               39,246,730        (3)(4)             11.3%
c/o Advanced Viral Research Corp.
1250 East Hallandale Beach Blvd.
Hallandale, FL 33009

William Bregman                                                 35,705,403        (3)(5)             10.3%
c/o Advanced Viral Research Corp.
1250 East Hallandale Beach Blvd.
Hallandale, FL 33009

Louis J. Silver                                                    100,000                            0.03%
5110 S.W. 127th Place
Miami, FL 33175

Alan V. Gallantar                                                        0                            0.0%
c/o Advanced Viral Research Corp.
200 Corporate Boulevard South
Yonkers, New York 10701

All officers & directors (5 persons)                           114,303,133        (2)                29.6%
</TABLE>

--------------------------------
(1)  The persons named in this table have sole voting power with respect to all
     shares shown as beneficially owned by them, except as indicated in other
     footnotes to this table. In computing the number of shares beneficially
     owned by a person and the percentage ownership of that person, shares of
     common stock subject to options or warrants held by that person that are
     currently exercisable or exercisable within 60 days from the date hereof,
     are deemed outstanding. According to American Stock Transfer & Trust
     Company, the transfer agent for the common stock, 347,174,843 shares of the
     common stock were outstanding as of the close of business as of the date
     hereof.

(2)  Includes shares which may be acquired pursuant to options to purchase
     common stock exercisable within 60 days from the date hereof.

(3)  The Hirschman employment agreement provides that Messrs. Friedland and
     Bregman, during the term of Dr. Hirschman's employment under that
     agreement, shall vote all shares of the common stock owned or voted by them
     in favor of Dr. Hirschman as a director of ADVR. That agreement, however,
     does not restrict or otherwise limit their right to sell their shares to
     third parties without restriction. The Hirschman employment agreement also
     provides that Dr. Hirschman, during that term, shall take no action which
     shall preclude Messrs. Friedland and Bregman from being nominees as
     directors of ADVR and that Dr. Hirschman shall vote all shares of the
     common stock owned or voted by him in favor of Messrs. Friedland and
     Bregman as directors of ADVR. See "-- Employment Contracts, Termination of
     Employment and Change-in-Control Arrangements."

(4)  Includes 1,000,000 shares of the common stock owned by Mr. Friedland and
     Beth Friedland, his daughter, as joint tenants;) 20,000,000 shares owned by
     Mr. Friedland and Shirley Friedland, his spouse, as joint tenants; and
     500,000 shares owned the B&SD Friedland Foundation, a not-for-profit
     foundation controlled by Mr. Friedland. Does not include 15,000 shares
     owned by Shirley Friedland as to which Mr. Friedland disclaims beneficial
     ownership.

(5)  Includes 22,594,864 shares held in a trust for which Mr. Bregman is the
     sole trustee and sole beneficiary; 110,000 shares owned by Carol Bregman,
     his daughter; 113,000 shares owned by Janet Berlin, his daughter; 110,000
     shares owned by Forest Berlin, his grandson; and 110,000 shares owned by
     Jessica Berlin, his granddaughter.


                                       41

<PAGE>



                              SELLING SHAREHOLDERS

         The following table sets forth certain information regarding the
beneficial ownership of the common stock as of the date of this prospectus by
each of the selling shareholders assuming the full exercise of certain warrants
and stock options. Unless otherwise indicated below, to our knowledge all
persons listed below have sole voting and investment power with respect to the
shares of common stock, except to the extent authority is shared by spouses
under applicable law. The information included below is based upon information
provided by the selling shareholders. Because the selling shareholders may offer
all, some or none of their shares, no definitive estimate as to the number of
shares that will be held by the selling shareholders after such offering can be
provided and the following table has been prepared on the assumption that all
shares offered under this prospectus will be sold.

<TABLE>
<CAPTION>
                                                          Shares Owned                                Shares Owned
                               Position with or       Before Offering (1)(2)      Shares Being        After Offering (3)
Selling Shareholder            Relationship to ADVR         Number    %          Sold in Offering(2)    Number      %
-------------------            --------------------         ------    --         -------------------    ------      --
<S>                        <C>                          <C>          <C>             <C>          <C>           <C>
Shalom Z. Hirschman, MD    4   CEO, Director            39,100,000   10.22%          23,100,000       16,000,000    4.45%
Angelo Chinnicci           5   Consultant                  300,000    0.09%             300,000                0        *

Harbor View Group, Inc.   6,7a Consultant               10,076,559    2.88%           9,386,363          690,196        *
Michael A. Berman         7b   Investor                  2,025,253        *             636,363        1,388,890        *
Cardinal Color Inc.       7c   Investor                    590,909        *             590,909                0        *
Merry Contillo            7c   Investor                    477,273        *             477,273                0        *
Joseph Deglomina          7c   Investor                    477,273        *             477,273                0        *
Michael Duong             7b   Investor                    636,363        *             636,363                0        *
Joseph Feshbach           7b   Investor                  1,126,559        *             636,363          490,196        *
Gerry Goodrich            7b   Investor                    636,363        *             636,363                0        *
Bice Grobstein            7b   Investor                    522,727        *             522,727                0        *
Russell Kuhn              7d   Investor                  1,640,352        *           1,272,726          367,626        *
Byron Lassin              7e   Investor                    954,546        *             954,546                0        *
Steve Levitt              7d   Investor                  1,272,726        *           1,272,726                0        *
Frederick P. Lutz         7b   Investor                    636,363        *             636,363                0        *
Victor Sherman            7d   Investor                  1,640,352        *           1,272,726          367,626        *
Kevin Sossin              7f   Investor                    795,454        *             795,454                0        *
Wedar Biotech Corp.       7e   Investor                    954,546        *             954,546                0        *
Myron Weiner              7b   Investor                  1,003,989        *             636,363          367,626        *
John Zimmerman            7f   Investor                  1,255,012        *             795,454          459,558        *
Bratskier Public Relations     Public Relations Firm       180,000        *             180,000                0        *
                                                         ---------       ---          ---------        ---------      ---
Selling Shareholders Total                              66,302,619   16.15%          46,070,901       20,131,718    5.30%
</TABLE>
-------------------------------
* Less than 1%

1.   As required by regulations of the Commission, the number of shares shown as
     beneficially owned include shares which can be purchased within 60 days
     from the date hereof. The actual number of shares of common stock
     beneficially owned is subject to adjustment and could be materially more or
     less than the estimated amount indicated depending upon factors which
     cannot be predicted by us at this time, including, among others, the market
     price of the common stock.

2.   Assumes the full exercise of the warrants and stock options.

3.   Assumes that all of the shares are sold by the selling shareholders and no
     additional shares of common stock are acquired.

4.   Represents options to purchase 23,000,000 at $0.27 per share, 4,100,000
     shares at $0.18 per share , 4,000,000 shares at $0.19 per share, 4,000,000
     shares at $0.27 per share, and 4,000,000 shares at $0.36 per share.

5.   Represents options to purchase 300,000 at $0.30 per share.

6.   Includes the 3,500,000 shares of common stock underlying certain warrants,
     50% of which are exerciseable at $0.21 and 50% of which are exercisable at
     $0.26 per warrant share.

7.   Includes the following number of shares of common stock underlying certain
     warrants: (a) 1,681,818 shares; (b) 181,818 shares; (c) 136,364 shares; (d)
     363,636 shares; (e) 272,728 shares; and (f) 227,272 shares, 50% of which
     are exerciseable at $0.275 and 50% of which are exercisable at $0.33 per
     warrant share.


                                       42

<PAGE>


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         For the past three fiscal years, there were no material transactions
between Advanced Viral and any of our officers or directors which involved
$60,000 or more.

                           DESCRIPTION OF COMMON STOCK

         As of the date of this prospectus, our Certificate of Incorporation
authorize us to issue 1,000,000,000 shares of common stock, par value $0.00001
per share. As of May 23, 2000, there were outstanding 347,174,843 shares of
common stock, all of which are fully paid for and non-assessable. The holders of
common stock:

         o    have equal ratable rights to dividends from funds legally
              available therefore, when, as and if declared by our board of
              directors;

         o    entitled to share ratably in all of our assets available for
              distribution to holders of common stock upon liquidation,
              dissolution or winding up of our affairs;

         o    do not have preemptive, subscription, or conversion rights and
              there are no redemption or sinking fund provisions applicable
              thereto; and

         o    are entitled to one noncumulative vote per share on all matters
              which stockholders may vote on at all meetings of stockholders.

         American Stock Transfer & Trust Company is our transfer agent and
registrar, and is located in Brooklyn, New York.


                                 USE OF PROCEEDS

         We will not receive any proceeds from the sale of common stock by the
selling shareholders. We will receive the cash proceeds, if any, from the
exercise of any of the warrants held by the selling shareholders.


                              PLAN OF DISTRIBUTION

         Sales of the shares may be made from time to time by the selling
shareholders, or, subject to applicable law, by pledgees, donees, distributees,
transferees or other successors in interest. Such sales may be made on the OTC
Bulletin Board, in another over-the-counter market, on a national securities
exchange (any of which may involve crosses and block transactions) or other
market on which our common stock may be listed at the time of sale, including
the American Stock Exchange, in privately negotiated transactions or otherwise
or in a combination of such transactions at prices and at terms then prevailing
or at prices related to the then current market price, or at privately
negotiated prices or at fixed prices that may be changed. In addition, any
shares covered by this prospectus which qualify for sale pursuant to Section
4(l) of the Securities Act or Rule 144 promulgated thereunder may be sold under
such provisions rather than pursuant to this prospectus. We will

                                       43

<PAGE>

also receive the cash proceeds, if any, from the exercise of any of the warrants
held by the selling shareholders. Without limiting the generality of the
foregoing, the shares may be sold in one or more of the following types of
transactions:

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

         o    purchases by a broker or dealer as principal and resale by such
              broker or dealer for its account pursuant to this prospectus;

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

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

         o    face-to-face transactions between sellers and purchasers without a
              broker-dealer. In effecting sales, brokers or dealers engaged by
              the selling shareholders may arrange for other brokers or dealers
              to participate in the resales.

         Such broker-dealers, if any, may receive compensation in the form of
discounts, concessions or commissions from the selling shareholder and/or the
purchasers of the shares of common stock for whom such broker-dealers may act as
agents or to whom they may sell as principals, or both (which compensation, as a
particular broker-dealer, might be in excess of customary commissions).

         In connection with distributions of the shares or otherwise, the
selling shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with selling shareholders. The selling shareholders may also sell shares
short and deliver the shares to close out such short positions. The selling
shareholders may also enter into option, swaps, derivatives or other
transactions with broker-dealers which require the delivery to the broker-dealer
of the shares registered hereunder, which the broker-dealer may resell pursuant
to this prospectus. The selling shareholders may also pledge the shares
registered hereunder to a broker or dealer and upon a default, the broker or
dealer may effect sales of the pledged shares pursuant to this prospectus.

         From time to time the selling shareholders may be engaged in short
sales, short sales against the box, puts and calls and other hedging
transactions in our securities, and may sell and deliver the shares in
connection with such transactions or in settlement of securities loans. These
transactions may be entered into with broker-dealers or other financial
institutions. In addition, from time to time, a selling shareholder may pledge
its shares pursuant to the margin provisions of its customer agreements with its
broker-dealer. Upon delivery of the shares or a default by a selling
shareholder, the broker-dealer or financial institution may offer and sell the
pledged shares from time to time.

         Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling shareholders in amounts to be
negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be 'underwriters' within the

                                       44

<PAGE>



meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.

         Information as to whether underwriters who may be selected by the
selling shareholders, or any other broker-dealer, is acting as principal or
agent for the selling shareholders, the compensation to be received by
underwriters who may be selected by the selling shareholders, or any
broker-dealer, acting as principal or agent for the selling shareholders and the
compensation to be received by other broker-dealers, if the compensation of such
other broker-dealers is in excess of usual and customary commissions, will, to
the extent required, be set forth in a supplement to this prospectus. Any dealer
or broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including the prospectus supplement, if any,
to any person who purchases any of the shares from or through such dealer or
broker.

         We have advised the selling shareholders that during such time as they
may be engaged in a distribution of the shares included in this prospectus they
are required to comply with Regulation M promulgated under the Exchange Act.
With certain exceptions, Regulation M precludes any selling shareholders, any
affiliated purchasers and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of the common stock.

         It is anticipated that the selling shareholders will offer all of the
shares for sale. Further, because it is possible that a significant number of
shares could be sold at the same time under this prospectus, such sales, or the
possibility of such sales, may have a depressive effect on the market price of
our common stock. None of the selling shareholders have entered into any
agreements regarding the sales of the shares being registered.

         We have agreed to bear all expenses of registration of the shares of
common stock offered by the selling shareholders for resale, other than any
commissions, discounts, concessions or other fees, if any, payable to
broker-dealers in connection with any sale of the shares of common stock, which
will be borne by the selling shareholder selling those shares or by the
purchasers of such shares.

         We have agreed to indemnify each selling shareholder or their
transferees or assignees against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribute to payments to which such
selling shareholder or its pledgees, donees, transferees or other successors in
interest may be required to make in respect thereof.


                                  LEGAL MATTERS

         The validity of the shares offered in this prospectus will be passed
upon for Advanced Viral by Berman Wolfe Rennert Vogel & Mandler, P.A.,
NationsBank Tower, 35th Floor, 100 Southeast Second Street, Miami, Florida
33131.



                                       45

<PAGE>



                                     EXPERTS

         The Consolidated Financial Statements of Advanced Viral Research Corp.
included in this prospectus and in the registration statement except as they
pertain to periods unaudited, have been audited by Rachlin Cohen & Holtz, LLP,
independent certified public accountants, for the periods indicated in their
report appearing elsewhere in this prospectus, and are included in this
prospectus in reliance upon the report of such firm given upon the authority of
such firm as experts in accounting and auditing.



                      [This Space Intentionally Left Blank]



                                       46

<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                PAGE
                                                                                ----
<S>                                                                               <C>
Consolidated Condensed Balance Sheets...........................................F-1
Consolidated Condensed Statements of Operations.................................F-2
Consolidated Condensed Statements of Stockholders' Equity.......................F-3
Consolidated Condensed Statements of Cash Flows.................................F-12
Notes to Consolidated Financial Statements......................................F-13
</TABLE>




<PAGE>
<TABLE>
<CAPTION>



                                               ADVANCED VIRAL RESEARCH CORP.
                                               (A Development Stage Company)

                                           CONSOLIDATED CONDENSED BALANCE SHEETS

                                                                                                              Condensed
                                                                                                                from
                                                                                                               Audited
                                                                                                              Financial
                                                                                                             Statements
                                                                                             March 31,      December 31,
                                                                                               2000             1999
                                                                                               ----             ----
                                                                                            (Unaudited)
<S>                                                                                          <C>             <C>
                                        ASSETS
                                        ------
Current Assets:
   Cash and cash equivalents                                                                 $  4,094,197    $    836,876
   Inventory                                                                                       19,729          19,729
   Other current assets                                                                           167,387          59,734
                                                                                             ------------    ------------
         Total current assets                                                                   4,281,313         916,339

Property and Equipment                                                                          1,673,358       1,375,923

Other Assets                                                                                      574,279         569,312
                                                                                             ------------    ------------
         Total assets                                                                        $  6,528,950    $  2,861,574
                                                                                             ============    ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
                  -------------------------------------------------
Current Liabilities:
   Accounts payable and accrued liabilities                                                  $    846,675    $    728,872
   Current portion of capital lease obligation                                                     51,416          50,315
   Current portion of note payable                                                                 19,452          19,095
                                                                                             ------------    ------------
         Total current liabilities                                                                917,543         798,282
                                                                                             ------------    ------------

Long-Term Liabilities:
   Common stock to be issued                                                                    3,000,000              --
   Convertible debenture, net                                                                      15,000       4,446,629
   Capital lease obligation - non-current portion                                                 138,785         152,059
   Note payable - non-current portion                                                              74,581          77,964
                                                                                             ------------    ------------
        Total long-term liabilities                                                             3,228,366       4,676,652
                                                                                             ------------    ------------

Commitments and Contingencies                                                                          --              --

Stockholders' Equity:
   Common stock; 1,000,000,000 shares of $.00001 par value
      authorized, 347,174,843 and 303,472,035
      shares issued and outstanding                                                                 3,471           3,034
   Additional paid-in capital                                                                  26,117,514      17,537,333
   Deficit accumulated during the development stage                                           (21,779,658)    (19,725,238)
   Discount on warrants                                                                        (1,958,286)       (428,489)
                                                                                             ------------    ------------
         Total stockholders' equity (deficiency)                                                2,383,041      (2,613,360)
                                                                                             ------------    ------------
         Total liabilities and stockholders' equity (deficiency)                             $  6,528,950    $  2,861,574
                                                                                             ============    ============

</TABLE>
           See notes to consolidated condensed financial statements.
                                       F-1


<PAGE>
<TABLE>
<CAPTION>


                                              ADVANCED VIRAL RESEARCH CORP.
                                              (A Development Stage Company)

                                     CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS




                                                                                              Inception
                                                                Three Months Ended          (February 20,
                                                                    March 31,                  1984) to
                                                                    ---------                  March 31,
                                                              2000             1999              2000
                                                              ----             ----              ----
<S>                                                       <C>              <C>              <C>
Revenues                                                  $       3,028    $       2,399    $     208,956
                                                          -------------    -------------    -------------

Costs and Expenses:
   Research and development                                     695,075          357,916        6,024,479
   General and administrative                                   755,423          438,403       10,314,875
   Depreciation                                                  67,760           37,107          613,983
                                                          -------------    -------------    -------------
                                                              1,518,258          833,426       16,953,337
                                                          -------------    -------------    -------------

Net Loss from Operations                                     (1,515,230)        (831,027)     (16,744,381)
                                                          -------------    -------------    -------------

Other Income (Expense):
   Interest income                                               24,963           15,809          627,004
   Other income                                                      --               --          120,093
   Interest expense                                            (564,153)         (94,578)      (5,782,374)
                                                          -------------    -------------    -------------
                                                               (539,190)         (78,769)      (5,035,277)
                                                          -------------    -------------    -------------

Net Loss                                                  $  (2,054,420)   $    (909,796)   $ (21,779,658)
                                                          =============    =============    =============

Net Loss Per Share of Common
   Stock - Basic and Diluted                              $        (.01)   $        (.00)
                                                          =============    =============

Weighted Average Number of
   Common Shares Outstanding                                313,819,774      297,577,226
                                                          =============    =============
</TABLE>


           See notes to consolidated condensed financial statements.
                                       F-2
<PAGE>
<TABLE>
<CAPTION>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                       Deficit
                                                                            Common Stock                             Accumulated
                                                                  Amount    ------------               Additional    during the
                                                                   Per                                  Paid-In      Development
                                                                  Share        Shares        Amount     Capital         Stage
                                                                  -----        ------        ------     -------         -----
<S>                                                             <C>        <C>           <C>          <C>            <C>
Balance, inception (February 20, 1984) as previously reported                      --    $   1,000    $        --    $ (1,000)

Adjustment for pooling of interests                                                --       (1,000)         1,000          --
                                                                          -----------    ---------    -----------    --------

Balance, inception, as restated                                                    --           --          1,000      (1,000)

   Net loss, period ended December 31, 1984                                        --           --             --     (17,809)
                                                                          -----------    ---------    -----------    --------

Balance, December 31, 1984                                                         --           --          1,000     (18,809)

   Issuance of common stock for cash                            $    .00  113,846,154        1,138            170          --
   Net loss, year ended December 31, 1985                                          --           --             --     (25,459)
                                                                          -----------    ---------    -----------    --------

Balance, December 31, 1985                                                113,846,154        1,138          1,170     (44,268)

   Issuance of common stock - public offering                        .01   40,000,000          400        399,600          --
   Issuance of underwriter's warrants                                              --           --            100          --
   Expenses of public offering                                                     --           --       (117,923)         --
   Issuance of common stock, exercise of "A" warrants                .03      819,860            9         24,587          --
   Net loss, year ended December 31, 1986                                          --           --             --    (159,674)
                                                                          -----------    ---------    -----------    --------

Balance, December 31, 1986                                                154,666,014        1,547        307,534    (203,942)
                                                                          -----------    ---------    -----------    --------
</TABLE>

           See notes to consolidated condensed financial statements.
                                       F-3

<PAGE>
<TABLE>
<CAPTION>


                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                Deficit
                                                                    Common Stock                              Accumulated
                                                         Amount     ------------               Additional      during the
                                                           Per                                  Paid-In       Development
                                                          Share        Shares       Amount      Capital          Stage
                                                          -----        ------       ------      -------          -----
<S>                                                     <C>        <C>           <C>           <C>            <C>
Balance, December 31, 1986                                         154,666,014   $     1,547   $   307,534    $  (203,942)

   Issuance of common stock, exercise of "A" warrants   $    .03    38,622,618           386     1,158,321             --
   Expenses of stock issuance                                               --            --       (11,357)            --
   Acquisition of subsidiary for cash                                       --            --       (46,000)            --
   Cancellation of debt due to stockholders                                 --            --        86,565             --
   Net loss, period ended December 31, 1987                                 --            --            --       (258,663)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1987                                         193,288,632         1,933     1,495,063       (462,605)

   Net loss, year ended December 31, 1988                                   --            --            --       (199,690)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1988                                         193,288,632         1,933     1,495,063       (662,295)

   Net loss, year ended December 31, 1989                                   --            --            --       (270,753)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1989                                         193,288,632         1,933     1,495,063       (933,048)

   Issuance of common stock, expiration of redemption
      offer on "B" warrants                                  .05     6,729,850            67       336,475             --
   Issuance of common stock, exercise of "B" warrants        .05       268,500             3        13,422             --
   Issuance of common stock, exercise of "C" warrants        .08        12,900            --         1,032             --
   Net loss, year ended December 31, 1990                                   --            --            --       (267,867)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1990                                         200,299,882         2,003     1,845,992     (1,200,915)
                                                                   -----------   -----------   -----------    -----------

</TABLE>
           See notes to consolidated condensed financial statements.
                                       F-4


<PAGE>
<TABLE>
<CAPTION>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                          Deficit
                                                                              Common Stock                              Accumulated
                                                                   Amount     ------------              Additional      during the
                                                                    Per                                  Paid-In        Development
                                                                   Share     Shares        Amount        Capital            Stage
                                                                   -----     ------        ------        -------            -----
<S>                                                              <C>        <C>           <C>         <C>             <C>
Balance, December 31, 1990                                                  200,299,882   $   2,003   $  1,845,992    $ (1,200,915)

   Issuance of common stock, exercise of "B" warrants            $   .05         11,400          --            420              --
   Issuance of common stock, exercise of "C" warrants                .08          2,500          --            200              --
   Issuance of common stock, exercise of underwriters warrants      .012      3,760,000          38         45,083              --
   Net loss, year ended December 31, 1991                                            --          --             --        (249,871)
                                                                           ------------   ---------   ------------    ------------

Balance, December 31, 1991                                                  204,073,782       2,041      1,891,695      (1,450,786)

   Issuance of common stock, for testing                           .0405     10,000,000         100        404,900              --
   Issuance of common stock, for consulting services                .055        500,000           5         27,495              --
   Issuance of common stock, exercise of "B" warrants                .05      7,458,989          75        372,875              --
   Issuance of common stock, exercise of "C" warrants                .08      5,244,220          52        419,487              --
   Expenses of stock issuance                                                                               (7,792)
   Net loss, year ended December 31, 1992                                            --          --             --        (839,981)
                                                                           ------------   ---------   ------------    ------------

Balance, December 31, 1992                                                  227,276,991       2,273      3,108,660      (2,290,767)

   Issuance of common stock, for consulting services                .055        500,000           5         27,495              --
   Issuance of common stock, for consulting services                 .03      3,500,000          35        104,965              --
   Issuance of common stock, for testing                            .035      5,000,000          50        174,950              --
   Net loss, year ended December 31, 1993                                            --          --             --        (563,309)
                                                                           ------------   ---------   ------------    ------------

Balance, December 31, 1993                                                  236,276,991       2,363      3,416,070      (2,854,076)
                                                                           ------------   ---------   ------------    ------------
</TABLE>
           See notes to consolidated condensed financial statements.
                                       F-5

<PAGE>
<TABLE>
<CAPTION>
                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000



                                                                  Common Stock
                                                      Amount      ------------           Additional
                                                        Per                                Paid-In      Subscription
                                                       Share       Shares       Amount     Capital       Receivable
                                                       -----       ------       ------     -------       ----------
<S>                                                    <C>      <C>           <C>       <C>            <C>
Balance, December 31, 1993                                      236,276,991   $   2,363 $  3,416,070   $       --

   Issuance of common stock, for consulting services   $  .05     4,750,000          47      237,453           --
   Issuance of common stock, exercise of options          .08       400,000           4       31,996           --
   Issuance of common stock, exercise of options          .10       190,000           2       18,998           --
   Net loss, year ended December 31, 1994                                --          --           --           --
                                                                -----------   ---------  -----------   ----------

Balance, December 31, 1994                                      241,616,991       2,416    3,704,517           --

   Issuance of common stock, exercise of options          .05     3,333,333          33      166,633           --
   Issuance of common stock, exercise of options          .08     2,092,850          21      167,407           --
   Issuance of common stock, exercise of options          .10     2,688,600          27      268,833           --
   Issuance of common stock, for consulting services      .11     1,150,000          12      126,488           --
   Issuance of common stock, for consulting services      .14       300,000           3       41,997           --
   Net loss, year ended December 31, 1995                                --          --           --           --
                                                                -----------   ---------  -----------   ----------

Balance, December 31, 1995                                      251,181,774       2,512    4,475,875           --
                                                                -----------   ---------  -----------   ----------


(RESTUBBED TABLE)
                                                                         Deficit
                                                                      Accumulated
                                                                      during the      Deferred
                                                                      Development   Compensation
                                                                         Stage          Cost
                                                                         -----          ----
<S>                                                                  <C>                  <C>
Balance, December 31, 1993                                           $ (2,854,076)        $--

   Issuance of common stock, for consulting services                           --          --
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, exercise of options                               --          --
   Net loss, year ended December 31, 1994                                (440,837)         --
                                                                     ------------     -------

Balance, December 31, 1994                                             (3,294,913)         --
                                                                                          ---
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, for consulting services                           --          --
   Issuance of common stock, for consulting services                           --          --
   Net loss, year ended December 31, 1995                                (401,884)         --
                                                                     ------------     -------

Balance, December 31, 1995                                             (3,696,797)         --
                                                                     ------------     -------
</TABLE>

           See notes to consolidated condensed financial statements.
                                       F-6

<PAGE>
<TABLE>
<CAPTION>


                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000



                                                                 Common Stock
                                                        Amount   ------------              Additional
                                                          Per                               Paid-In        Subscription
                                                         Share      Shares      Amount      Capital         Receivable
                                                         -----      ------      ------      -------         ----------
<S>                                                  <C>        <C>           <C>          <C>             <C>
Balance, December 31, 1995                                      251,181,774   $    2,512   $  4,475,875    $         --

   Issuance of common stock, exercise of options     $   .05      3,333,334           33        166,634              --
   Issuance of common stock, exercise of options         .08      1,158,850           12         92,696              --
   Issuance of common stock, exercise of options         .10      7,163,600           72        716,288              --
   Issuance of common stock, exercise of options         .11        170,000            2         18,698              --
   Issuance of common stock, exercise of options         .12      1,300,000           13        155,987              --
   Issuance of common stock, exercise of options         .18      1,400,000           14        251,986              --
   Issuance of common stock, exercise of options         .19        500,000            5         94,995              --
   Issuance of common stock, exercise of options         .20        473,500            5         94,695              --
   Issuance of common stock, for services rendered       .50        350,000            3        174,997              --
   Options granted                                                       --           --        760,500              --
   Subscription receivable                                               --           --             --         (19,000)
   Net loss, year ended December 31, 1996                                --           --             --              --
                                                                -----------   ----------   ------------    ------------

Balance, December 31, 1996                                      267,031,058        2,671      7,003,351         (19,000)
                                                                -----------   ----------   ------------    ------------

(RESTUBBED TABLE)
                                                                          Deficit
                                                                        Accumulated
                                                                        during the        Deferred
                                                                        Development     Compensation
                                                                           Stage            Cost
                                                                           -----            ----
<S>                                                                       <C>             <C>
Balance, December 31, 1995                                               $ (3,696,797)   $     --

   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, for services rendered                                 --          --
   Options granted                                                                 --    (473,159)
   Subscription receivable                                                         --          --
   Net loss, year ended December 31, 1996                                  (1,154,740)         --
                                                                         ------------   ---------

Balance, December 31, 1996                                                 (4,851,537)   (473,159)
                                                                         ------------   ---------
</TABLE>
           See notes to consolidated condensed financial statements.
                                       F-7


<PAGE>
<TABLE>
<CAPTION>


                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000



                                                                   Common Stock
                                                         Amount    ------------               Additional
                                                           Per                                 Paid-In         Subscription
                                                          Share     Shares       Amount        Capital          Receivable
                                                          -----     ------       ------        -------          ----------
<S>                                                    <C>       <C>           <C>            <C>             <C>
Balance, December 31, 1996                                       267,031,058   $      2,671   $  7,003,351    $    (19,000)

   Issuance of common stock, exercise of options       $     .08   3,333,333             33        247,633              --
   Issuance of common stock, conversion of debt              .20   1,648,352             16        329,984              --
   Issuance of common stock, conversion of debt              .15     894,526              9        133,991              --
   Issuance of common stock, conversion of debt              .12   2,323,580             23        269,977              --
   Issuance of common stock, conversion of debt              .15   1,809,524             18        265,982              --
   Issuance of common stock, conversion of debt              .16     772,201              8        119,992              --
   Issuance of common stock, for services rendered           .41      50,000             --         20,500              --
   Issuance of common stock, for services rendered           .24     100,000              1         23,999              --
   Beneficial conversion feature, February debenture                      --             --        413,793              --
   Beneficial conversion feature, October debenture                       --             --      1,350,000              --
   Warrant costs, February debenture                                      --             --         37,242              --
   Warrant costs, October debenture                                       --             --        291,555              --
   Amortization of deferred compensation cost                             --             --             --              --
   Imputed interest on convertible debenture                              --             --          4,768              --
   Net loss, year ended December 31, 1997                                 --             --             --              --
                                                                 -----------   ------------   ------------    ------------

Balance, December 31, 1997                                       277,962,574          2,779     10,512,767         (19,000)
                                                                 -----------   ------------   ------------    ------------

(RESTUBBED TABLE)
                                                                     Deficit
                                                                   Accumulated
                                                                    during the        Deferred
                                                                    Development    Compensation
                                                                      Stage             Cost
                                                                      -----             ----
<S>                                                                 <C>             <C>
Balance, December 31, 1996                                          $ (4,851,537)   $ (473,159)

   Issuance of common stock, exercise of options                              --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, for services rendered                            --            --
   Issuance of common stock, for services rendered                            --            --
   Beneficial conversion feature, February debenture                          --            --
   Beneficial conversion feature, October debenture                           --            --
   Warrant costs, February debenture                                          --            --
   Warrant costs, October debenture                                           --            --
   Amortization of deferred compensation cost                                 --       399,322
   Imputed interest on convertible debenture                                  --            --
   Net loss, year ended December 31, 1997                             (4,141,729)           --
                                                                    ------------    ----------

Balance, December 31, 1997                                            (8,993,266)      (73,837)
                                                                    ------------    ----------
</TABLE>
           See notes to consolidated condensed financial statements.
                                       F-8

<PAGE>
<TABLE>
<CAPTION>
                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000



                                                                 Common Stock
                                                       Amount    ------------              Additional
                                                         Per                                Paid-In       Subscription
                                                        Share     Shares       Amount       Capital        Receivable
                                                        -----     ------       ------       -------        ----------
<S>                                                   <C>        <C>           <C>         <C>             <C>
Balance, December 31, 1997                                       277,962,574   $  2,779    $ 10,512,767    $  (19,000)

   Issuance of common stock, exercise of options       $   .12       295,000          3          35,397            --
   Issuance of common stock, exercise of options           .14       500,000          5          69,995            --
   Issuance of common stock, exercise of options           .16       450,000          5          71,995            --
   Issuance of common stock, exercise of options           .20        10,000         --           2,000            --
   Issuance of common stock, exercise of options           .26       300,000          3          77,997            --
   Issuance of common stock, conversion of debt            .13     1,017,011         10         132,990            --
   Issuance of common stock, conversion of debt            .14     2,512,887         25         341,225            --
   Issuance of common stock, conversion of debt            .15     5,114,218         51         749,949            --
   Issuance of common stock, conversion of debt            .18     1,491,485         15         274,985            --
   Issuance of common stock, conversion of debt            .19     3,299,979         33         619,967            --
   Issuance of common stock, conversion of debt            .22     1,498,884         15         335,735            --
   Issuance of common stock, conversion of debt            .23     1,870,869         19         424,981            --
   Issuance of common stock, for services rendered         .21       100,000          1          20,999            --
   Beneficial conversion feature, November debenture                                            625,000
   Warrant costs, November debenture                                                             48,094
   Amortization of deferred compensation cost                             --         --              --            --
   Write off of subscription receivable                                   --         --         (19,000)       19,000
   Net loss, year ended December 31, 1998                                 --         --              --            --
                                                                 -----------   --------    ------------    ----------

Balance, December 31, 1998                                       296,422,907      2,964      14,325,076            --
                                                                 -----------   --------    ------------    ----------


(RESTUBBED TABLE)
                                                                      Deficit
                                                                    Accumulated
                                                                    during the      Deferred
                                                                    Development   Compensation
                                                                       Stage          Cost
                                                                       -----          ----
<S>                                                                <C>             <C>
Balance, December 31, 1997                                         $ (8,993,266)   $ (73,837)

   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, for services rendered                           --           --
   Beneficial conversion feature, November debenture                         --           --
   Warrant costs, November debenture                                         --           --
   Amortization of deferred compensation cost                                --       59,068
   Write off of subscription receivable                                      --           --
   Net loss, year ended December 31, 1998                            (4,557,710)          --
                                                                   ------------    ---------

Balance, December 31, 1998                                          (13,550,976)     (14,769)
                                                                   ------------    ---------
</TABLE>

           See notes to consolidated condensed financial statements.
                                       F-9
<PAGE>
<TABLE>
<CAPTION>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000


                                                                                                                          Deficit
                                                                                Common Stock                            Accumulated
                                                                    Amount      ------------              Additional    during the
                                                                      Per                                  Paid-In      Development
                                                                     Share       Shares       Amount       Capital         Stage
                                                                     -----       ------       ------       -------         -----
<S>                                                                  <C>     <C>           <C>         <C>             <C>
Balance, December 31, 1998                                                   296,422,907   $   2,964   $ 14,325,076    $(13,550,976)

   Issuance of common stock, securities purchase agreement           $  .16    4,917,276          49        802,451              --
   Issuance of common stock, securities purchase agreement              .27    1,851,852          18        499,982              --
   Issuance of common stock, for services rendered                      .22      100,000           1         21,999              --
   Issuance of common stock, for services rendered                      .25      180,000           2         44,998              --
   Beneficial conversion feature, August debenture                                    --          --        687,500              --
   Beneficial conversion feature, December debenture                                  --          --        357,143              --
   Warrant costs, securities purchase agreement                                       --          --        494,138              --
   Warrant costs, securities purchase agreement                                       --          --         37,025              --
   Warrant costs, August debenture                                                    --          --         52,592              --
   Warrant costs, December debenture                                                  --          --          4,285              --
   Amortization of warrant costs, securities purchase agreement                       --          --             --              --
   Amortization of deferred compensation cost                                         --          --             --              --
   Compensation expense related to modification of existing options                   --          --        210,144              --
   Net loss, year ended December 31, 1999                                             --          --             --      (6,174,262)
                                                                             -----------   ---------   ------------    ------------

Balance, December 31, 1999                                                   303,472,035       3,034   $ 17,537,333    $(19,725,238)
                                                                             ===========   =========   ============    ============

(RESTUBBED TABLE)

                                                                                   Deferred      Discount
                                                                                 Compensation       on
                                                                                     Cost        Warrants
                                                                                     ----        --------
<S>                                                                              <C>             <C>
Balance, December 31, 1998                                                       $    (14,769)   $      --

   Issuance of common stock, securities purchase agreement                                 --           --
   Issuance of common stock, securities purchase agreement                                 --           --
   Issuance of common stock, for services rendered                                         --           --
   Issuance of common stock, for services rendered                                         --           --
   Beneficial conversion feature, August debenture                                         --           --
   Beneficial conversion feature, December debenture                                       --           --
   Warrant costs, securities purchase agreement                                            --     (494,138)
   Warrant costs, securities purchase agreement                                            --      (37,025)
   Warrant costs, August debenture                                                         --           --
   Warrant costs, December debenture                                                       --           --
   Amortization of warrant costs, securities purchase agreement                            --      102,674
   Amortization of deferred compensation cost                                          14,769           --
   Compensation expense related to modification of existing options                        --           --
   Net loss, year ended December 31, 1999                                                  --           --
                                                                                 ------------   ----------

Balance, December 31, 1999                                                       $         --    $(428,489)
                                                                                 ============   ==========


</TABLE>
           See notes to consolidated condensed financial statements.
                                      F-10



<PAGE>
<TABLE>
<CAPTION>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000


                                                                                Common Stock
                                                                  Amount        ------------             Additional
                                                                    Per                                   Paid-In
                                                                   Share        Shares       Amount       Capital
                                                                   -----        ------       ------       -------
<S>                                                                <C>        <C>           <C>         <C>
Balance, December 31, 1999                                                    303,472,035   $   3,034   $ 17,537,333

   Issuance of common stock, exercise of options                   $  .14         600,000           6         83,994
   Issuance of common stock, exercise of options                      .15       1,600,000          16        239,984
   Issuance of common stock, exercise of options                      .16         500,000           5         79,995
   Issuance of common stock, exercise of options                      .21         792,500           8        166,417
   Issuance of common stock, exercise of options                      .36          60,000           1         21,599
   Issuance of common stock, exercise of warrants                     .20         122,549           1         24,999
   Issuance of common stock, exercise of warrants                     .24         122,549           1         29,999
   Issuance of common stock, exercise of warrants                     .25       1,000,000          10        246,090
   Issuance of common stock, conversion of debt                       .14      35,467,682         355      4,907,146
   Issuance of common stock, conversion of debt                       .19       1,036,674          10        199,990
   Issuance of common stock, conversion of debt                       .20       1,887,500          19        377,481
   Issuance of common stock, cashless exercise of warrants                        513,354           5        305,754
   Cashless exercise of warrants                                                       --          --       (305,759)
   Beneficial conversion feature, January debenture                                    --          --        386,909
   Warrant costs, consulting agreement                                                 --          --        200,249
   Warrant costs, January debenture                                                    --          --         13,600
   Warrant costs, private placement                                                    --          --      1,582,734
   Recovery of subscription receivable previously written off                          --          --         19,000
   Amortization of warrant costs, securities purchase agreements                       --          --             --
   Net loss, three months ended March 31, 2000                                         --          --             --
                                                                              -----------   ---------   ------------

Balance, March 31, 2000                                                       347,174,843   $   3,471   $ 26,117,514
                                                                              ===========   =========   ============

(RESTUBBED TABLE)
                                                                              Deficit
                                                                            Accumulated
                                                                            during the        Discount
                                                                            Development          on
                                                                               Stage          Warrants
                                                                               -----          --------
<S>                                                                       <C>             <C>
Balance, December 31, 1999                                                  $(19,725,238)   $  (428,489)

   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of warrants                                     --             --
   Issuance of common stock, exercise of warrants                                     --             --
   Issuance of common stock, exercise of warrants
   Issuance of common stock, conversion of debt                                       --             --
   Issuance of common stock, conversion of debt                                       --             --
   Issuance of common stock, conversion of debt                                       --             --
   Issuance of common stock, cashless exercise of warrants                            --             --
   Cashless exercise of warrants                                                      --             --
   Beneficial conversion feature, January debenture                                   --             --
   Warrant costs, consulting agreement                                                --             --
   Warrant costs, January debenture                                                   --             --
   Warrant costs, private placement                                                   --     (1,582,734)
   Recovery of subscription receivable previously written off                         --             --
   Amortization of warrant costs, securities purchase agreements                      --         52,937
   Net loss, three months ended March 31, 2000                                (2,054,420)            --
                                                                            ------------    -----------

Balance, March 31, 2000                                                     $(21,779,658)   $(1,958,286)
                                                                            ============    ===========

</TABLE>
           See notes to consolidated condensed financial statements.
                                      F-11

<PAGE>
<TABLE>
<CAPTION>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                                                                                        Inception
                                                                          Three Months Ended          (February 20,
                                                                               March 31,                1984) to
                                                                         --------------------           March 31,
                                                                         2000            1999             2000
                                                                         ----            ----             ----
<S>                                                                  <C>             <C>             <C>
Cash Flows from Operating Activities:
   Net loss                                                          $ (2,054,420)   $   (909,796)   $(21,779,658)
                                                                     ------------    ------------    ------------
   Adjustments to reconcile net loss to
      net cash used by operating activities:
         Depreciation                                                      67,760          37,107         613,893
         Amortization of debt issue costs                                 106,030          26,250         779,215
         Amortization of deferred interest cost on beneficial
            conversion feature of convertible debenture                   386,909              --       3,820,270
         Amortization of discount on warrants                             119,908          36,730         558,467
         Amortization of deferred compensation cost                            --          14,769         760,500
         Issuance of common stock for services                                 --              --       1,504,500
         Compensation expense related to modification of
            existing options                                                   --              --         210,144
         Realization of prepaid consulting fees                           111,545              --         111,545
         Other                                                                 --              --          (1,607)
         Changes in Operating Assets and Liabilities:
            Increase in inventory                                              --              --         (19,729)
            Increase in other current assets                              (18,953)        (11,456)        (78,688)
            Increase in other assets                                       (4,967)        (43,680)     (1,221,925)
            Increase (decrease) in accounts payable and
               accrued liabilities                                        117,803         (41,086)        852,875
                                                                     ------------    ------------    ------------
                  Total adjustments                                       886,035          18,634       7,889,460
                                                                     ------------    ------------    ------------
                  Net cash used by operating activities                (1,168,385)       (891,162)    (13,890,198)
                                                                     ------------    ------------    ------------

Cash Flows from Investing Activities:
   Purchase of investments                                                     --              --      (6,292,979)
   Proceeds from sale of investments                                           --         821,047       6,292,979
   Expenditures for property and equipment                               (365,195)        (53,484)     (1,915,945)
   Proceeds from sale of property and equipment                                --              --           1,200
                                                                     ------------    ------------    ------------
                  Net cash provided (used) by investing activities       (365,195)        767,563      (1,914,745)
                                                                     ------------    ------------    ------------

Cash Flows from Financing Activities:
   Proceeds from issuance of convertible debt                           1,000,000              --       9,500,000
   Proceeds from deposit on securities purchase agreement                      --              --         600,000
   Proceeds from deposit on common stock to be issued,
      private placement                                                 3,000,000              --       3,000,000
   Proceeds from sale of securities, net of issuance costs                787,100         202,500       6,868,188
   Payments under capital lease                                           (12,173)        (12,418)        (70,761)
   Payments on note payable                                                (3,026)             --         (17,287)
   Recovery of subscription receivable written off                         19,000              --          19,000
                                                                     ------------    ------------    ------------
                  Net cash provided by financing activities             4,790,901         190,082      19,899,140
                                                                     ------------    ------------    ------------

Net Increase in Cash and Cash Equivalents                               3,257,321          66,483       4,094,197

Cash and Cash Equivalents, Beginning                                      836,876         924,420              --
                                                                     ------------    ------------    ------------

Cash and Cash Equivalents, Ending                                    $  4,094,197    $    990,903    $  4,094,197
                                                                     ============    ============    ============
</TABLE>
           See notes to consolidated condensed financial statements.
                                      F-12


<PAGE>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



NOTE 1.  BASIS OF PRESENTATION

             The accompanying unaudited consolidated condensed financial
             statements at March 31, 2000 have been prepared in accordance with
             generally accepted accounting principles for interim financial
             information and with the instructions to Form 10-Q and reflect all
             adjustments which, in the opinion of management, are necessary for
             a fair presentation of financial position as of March 31, 2000 and
             results of operations and cash flows for the three months ended
             March 31, 2000 and 1999. All such adjustments are of a normal
             recurring nature. The results of operations for interim periods are
             not necessarily indicative of the results to be expected for a full
             year. Certain amounts in the 1999 financial statements have been
             reclassified to conform to 2000 presentation. The statements should
             be read in conjunction with the consolidated financial statements
             and footnotes thereto included in the Company's Annual Report on
             Form 10-K for the year ended December 31, 1999.


NOTE 2.  COMMITMENTS AND CONTINGENCIES

         Going Concern

             The accompanying unaudited consolidated condensed financial
             statements at March 31, 2000 have been prepared in conformity with
             generally accepted accounting principles which contemplate the
             continuance of the Company as a going concern. The Company has
             suffered losses from operations during its operating history. The
             Company is dependent upon registration of Product R for sale before
             it can begin commercial operations. The Company's cash position may
             be inadequate to pay all the costs associated with the full range
             of testing and clinical trials required by the FDA. Unless and
             until Product R is approved for sale in the United States or
             another industrially developed country, the Company may be
             dependent upon the continued sale of its securities and debt
             financing for funds to meet its cash requirements. Management
             intends to continue to sell the Company's securities in an attempt
             to mitigate the effects of its cash position; however, no assurance
             can be given that equity or debt financing, if and when required,
             will be available. In the event that such equity or debt financing
             is not available, in order to continue operations, management
             anticipates that they will have to defer their salaries. During
             2000 and 1999, the Company obtained equity and debt financing and
             may seek additional financing as the need arises. No assurance can
             be given that the Company will be able to sustain its operations
             until FDA approval is granted or that any approval will ever be
             granted. These factors raise substantial doubt about the Company's
             ability to continue as a going concern. The Company expects to
             submit an application for approval with the FDA in the near future.
             The consolidated condensed financial statements do not include any
             adjustments relating to the recoverability and classification of
             recorded assets and classification of liabilities that might be
             necessary should the Company be unable to continue in existence.

         Potential Claim for Royalties

             The Company may be subject to claims from certain third parties for
             royalties due on sale of Product R. The Company has not as yet
             received any notice of claim from such parties.

                                       F-13

<PAGE>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)



NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         Product Liability

             The Company could be subjected to claims for adverse reactions
             resulting from the use of Product R. Although the Company is
             unaware of any such claims or threatened claims since Product R was
             initially marketed in the 1940's, one study noted adverse reactions
             from highly concentrated doses in guinea pigs. In the event any
             claims for substantial amounts were successful, they could have a
             material adverse effect on the Company's financial condition and on
             the marketability of Product R. As of the date hereof, the Company
             does not have product liability insurance for Product R. There can
             be no assurance that the Company will be able to secure such
             insurance in adequate amounts, at reasonable premiums if it
             determined to do so. Should the Company be unable to secure such
             product liability insurance, the risk of loss to the Company in the
             event of claims would be greatly increased and could have a
             material adverse effect on the Company.

         Lack of Patent Protection

             The Company has three issued patents and one allowed patent for the
             use of Product R. The Company currently has 15 patent applications
             pending with the U.S. Patent Office and 17 foreign patent
             applications. The Company can give no assurance that other
             companies, having greater economic resources, will not be
             successful in developing a similar product. There can be no
             assurance that such patents, if obtained, will be enforceable.

         TESTING AGREEMENTS

         Plata Partners Limited Partnership

             On March 20, 1992, the Company entered into an agreement with Plata
             Partners Limited Partnership ("Plata") pursuant to which Plata
             agreed to perform a demonstration in the Dominican Republic in
             accordance with a certain agreed upon protocol (the "Protocol") to
             assess the efficacy of a treatment using Product R incorporated in
             the Protocol against AIDS (the "Plata Agreement"). Plata covered
             all costs and expenses associated with the demonstration.

             Pursuant to the Plata Agreement, the Company authorized the
             issuance to Plata of 5,000,000 shares of common stock and options
             to purchase an additional 5,000,000 shares at $.08 per share
             through July 9, 1994 (the "Plata Options") and 5,000,000 shares at
             $.10 per share through July 9, 1994 (the "Additional Plata
             Options"). Pursuant to several amendments, the Plata Options and
             the Additional Plata Options are exercisable through June 30, 2000
             at an exercise price of $.15 and $.17, respectively. The fair value
             of these options are estimated to be $32,925 ($.0348 per option
             share) based upon a financial analysis of the terms of the options
             using the Black-Sholes Pricing Model with the following
             assumptions: expected volatility of 20%; risk free interest rate of
             6%. This amount has been charged to compensation expense at
             December 31, 1999 as it related to services previously provided. As

                                       F-14

<PAGE>
                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)



NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         TESTING AGREEMENTS (Continued)

         Plata Partners Limited Partnership

             of March 31, 2000, there are outstanding Plata Options to acquire
             83,300 shares at $.15 per share and Additional Plata Options to
             acquire 108,100 shares at an exercise price of $.17 per share.
             Through March 31, 2000, the Company has received approximately
             $1,422,000 pursuant to the issuance of approximately 9.8 million
             shares in connection with the exercise of the Plata Options and the
             Additional Plata Options.

         Argentine Agreement

             In April 1996, the Company entered into an agreement (the
             "Argentine Agreement") with DCT SRL, an Argentine corporation
             unaffiliated with the Company ("DCT") pursuant to which DCT was to
             cause a clinical trial to be conducted in two separate hospitals
             located in Buenos Aires, Argentina (the "Clinical Trials").
             Pursuant to the Argentine Agreement, the Clinical Trials were to be
             conducted pursuant to a protocol developed by Juan Carlos Flichman,
             M.D. and the purpose of the Clinical Trials was to assess the
             efficacy of the Company's drug Product R on the Human Papilloma
             Virus (HPV). The protocol calls for, among other things, a study to
             be performed with clinical and laboratory follow-up on 12 male and
             female human patients between the ages of 18 and 50.

             Pursuant to the Argentine Agreement, the Company delivered $34,000
             to DCT to cover out-of-pocket expenses associated with the Clinical
             Trials. The Argentine Agreement further provides that at the
             conclusion of the Clinical Trials, DCT shall cause Dr. Flichman to
             prepare and deliver a written report to the Company regarding the
             methodology and results of the Clinical Trials (the "Written
             Report"). In September 1996, the Written Report was delivered by
             Dr. Flichman to the Company. Upon delivery of the Written Report to
             the Company, the Company delivered to the principals of DCT options
             to acquire 2,000,000 shares of the Company's common stock for a
             period of one year from the date of the delivery of the Written
             Report, at a purchase price of $.20 per share. Pursuant to several
             amendments, the DCT options are exercisable through June 30, 2000
             at an exercise price of $.21 per share. The fair value of these
             options are estimated to be $1,788 ($.0012 per option share) based
             on the following assumptions: expected volatility of 20%; risk free
             interest rate of 6%. This amount has been charged to compensation
             expense at December 31, 1999 as it related to services previously
             provided. As of March 31, 2000, 1,266,000 shares of common stock
             were issued pursuant to the exercise of these options for an
             aggregate exercise price of approximately $261,425.

             In June 1994, DCT SRL and the Company entered into an exclusive
             distribution agreement whereby the Company granted to DCT, subject
             to certain conditions, the exclusive right to market and sell
             Product R in Argentina, Bolivia, Paraguay, Uruguay, Brazil, and
             Chile (the "DCT Exclusive Distribution Agreement").

                                      F-15
<PAGE>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         TESTING AGREEMENTS (Continued)

         Argentine Agreement (Continued)

             In April 1996, the Company entered into an agreement with DCT (the
             HIV-HPV Agreement") whereby the Company agreed to provide to DCT or
             its assignees, up to $600,000 to cover the costs of a double blind
             placebo controlled study in approximately 150 patients to assess
             the efficacy of Product R for the treatment of persons diagnosed
             with the HIV virus (AIDS) and HPV (the "HIV-HPV Study").
             Subsequently, the Company has agreed to advance additional funds
             towards such study. In connection with the HIV-HPV Agreement, the
             Company advanced approximately $665,000 which is accounted for as
             research and development expense. The amounts have been used to
             cover expenses associated with clinical activities of the HIV-HPV
             Study.

             The HIV-HPV Agreement provides that (i) in the event the date from
             the HIV-HPV Study is used in connection with Product R being
             approved for commercial sale anywhere within the territory granted
             under the DCT Exclusive Distribution Agreement or (ii) DCT receives
             financing to cover the costs of the HIV-HPV Study, then DCT is
             obligated to reimburse the Company for all amounts expended in
             connection with the HIV-HPV Study.

             In October 1997, the Company entered into two agreements with DCT,
             whereby the Company agreed to provide DCT or its assignees, up to
             $220,000 and $341,000 to cover the costs of double blind placebo
             controlled studies in approximately 360 and 240 patients,
             respectively to assess the efficacy of the topical application of
             Product R for the treatment of persons diagnosed with Herpes
             Labialis/Genital Infections (the "Herpes Study") and HPV (the "HPV
             Topical Study").

             In connection with the Herpes Study and the HPV Topical Study
             (collectively, the "Studies"), the Company has advanced
             approximately $58,000 and $132,000, respectively. Such expenses are
             accounted for as research and development expense. The amounts
             expended have been used to cover expenses associated with
             pre-clinical activities. Neither the Herpes Study nor the HPV
             Topical Study has commenced.

             Both Agreements with DCT provide that (i) in the event the data
             from the Studies are used in connection with Product R being
             approved for commercial sale anywhere within the territory granted
             under the DCT Exclusive Distribution Agreement or (ii), DCT
             receives financing to cover the costs of the Studies, then DCT is
             obligated to reimburse the Company for all amounts expended in
             connection with the Studies.

             In February 1998, the Company entered into an agreement with DCT
             (the "Concurrent Agreement") whereby the Company agreed to provide
             DCT or its assignees, up to $413,000 to cover the costs of a study
             in 65 patients to compare the results of treatment of patients with
             AIDS taking a three drug cocktail and Product R with those taking a
             three drug cocktail and a

                                      F-16
<PAGE>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         TESTING AGREEMENTS (Continued)

         Argentine Agreement (Continued)

             placebo. As of March 31, 2000, the Company has advanced
             approximately $50,000 for such study which has been accounted for
             as research and development expense.

             In May 1998, the Company entered into an agreement with DCT (the
             "Rheumatoid Arthritis Agreement") whereby the Company agreed to
             provide DCT or its assignees, up to $95,000 to cover the costs of a
             controlled study in 30 patients to determine the efficacy of
             Product R for the treatment of rheumatoid arthritis in humans. In
             connection with this study, the Company has advanced approximately
             $85,000 which has been accounted for as research and development
             expense.

             In July 1998, the Company authorized expenditures of up to $90,000
             to study the effects of Product R in inhibiting the mutation of the
             AIDS virus. As of March 31, 2000, the Company has advanced
             approximately $50,000 for such study which has been accounted for
             as research and development expense.

             As of March 31, 2000, the Company advanced approximately $281,000
             for expenses in connection with the drug approval process in
             Argentina.

         Barbados Study

             A double blind study assessing the efficacy of the Company's drug
             Product R in 43 human patients diagnosed with HIV (AIDS) has been
             conducted at the Queen Elizabeth Hospital, Bridgetown, Barbados
             (the "Barbados Study"). As of March 31, 2000, the Company has
             expended approximately $390,000 to cover the costs of the Barbados
             Study.

             In July 1998, the Company authorized expenditures of up to $45,000
             to study the effects of Product R in inhibiting the mutation of the
             AIDS virus. As of March 31, 2000, the Company has advanced
             approximately $15,000 for such study which has been accounted for
             as research and development expense.


                                      F-17
<PAGE>

                          ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS

         Hirschman Agreement

             In May 1995, the Company entered into a consulting agreement with
             Shalom Hirschman, M.D., Professor of Medicine of Mt. Sinai School
             of Medicine, New York, New York and Director of Mt. Sinai's
             Division of Infectious Diseases, whereby Dr. Hirschman was to
             provide consulting services to the Company through May 1997. The
             consulting services included the development and location of
             pharmacological and biotechnology companies and assisting the
             Company in seeking joint ventures with and financing of companies
             in such industries.

             In connection with the consulting agreement, the Company issued to
             Dr. Hirschman 1,000,000 shares of the Company's common stock and
             the option to acquire 5,000,000 shares of the Company's common
             stock for a period of three years as per the vesting schedule as
             referred to in the agreement, at a purchase price of $.18 per
             share. As of March 31, 2000, 900,000 shares have been issued upon
             exercise of these options for cash consideration of $162,000 under
             this Agreement.

             In March 1996, the Company entered into an addendum to the
             consulting agreement with Dr. Hirschman whereby Dr. Hirschman
             agreed to provide consulting services to the Company through May
             2000 (the "Addendum"). Pursuant to the Addendum, the Company
             granted to Dr. Hirschman and his designees options to purchase an
             aggregate of 15,000,000 shares of the Company's common stock for a
             three year period pursuant to the following schedule: (i) options
             to purchase 5,000,000 shares exercisable at any time and from time
             to time commencing March 24, 1996 and ending March 23, 2009 at an
             exercise price of $.19 per share, of which options to acquire
             500,000 shares (exercisable until March 23, 2001) were assigned by
             Dr. Hirschman to Richard Rubin, consultant to Dr. Hirschman; (ii)
             options to purchase 5,000,000 shares exercisable at any time and
             from time to time commencing March 24, 1997 and ending March 23,
             2009 at an exercise price of $.27 per share, of which options to
             acquire 500,000 shares (exercisable until March 23, 2001) were
             assigned by Dr. Hirschman to Richard Rubin, consultant to Dr.
             Hirschman; and (iii) options to purchase 5,000,000 shares
             exercisable at any time and from time to time commencing March 24,
             1998 and ending March 23, 2009 at an exercise price of $.36 per
             share, of which options to acquire 500,000 shares (exercisable
             until March 23, 2001) were assigned by Dr. Hirschman to Richard
             Rubin, consultant to Dr. Hirschman. In addition, the Company has
             agreed to cause the shares underlying these options to be
             registered so long as there is no cost to the Company. As of March
             31, 2000, 560,000 shares of common stock were issued pursuant to
             the exercise of stock options by Richard Rubin. Mr. Rubin has, from
             time to time in the past, advised the Company on matters unrelated
             to his consultation with Dr. Hirschman.

             In March 2000, Mr. Rubin transferred 75,000 of his $0.27 options
             and 75,000 of his $0.36 options to Elliot Bauer, an individual who
             also received and exercised shares and options as a result of the
             "Cohen Agreements".

                                      F-18
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Hirschman Agreement (Continued)

             In November 1997, Dr. Hirschman assigned to Henry Kamioner, a
             consultant to Dr. Hirschman, options to acquire 1,500,000 shares
             (500,000 at $.19, 500,000 at $.27, and 500,000 at $.36), which are
             exercisable until March 23, 2001.

             On October 14, 1996, the Company and Dr. Hirschman entered into an
             agreement (the "Employment Agreement") whereby Dr. Hirschman has
             agreed to serve as the President and Chief Executive Officer of the
             Company for a period of three years, subject to earlier termination
             by either party, either for cause as defined in and in accordance
             with the provisions of the Employment Agreement, or if the Company
             do not receive on or prior to December 31, 1997, funding of
             $3,000,000 from sources other than traditional institutional/bank
             debt financing or proceeds from the purchase by Dr. Hirschman of
             the Company's securities, including, without limitation, the
             exercise of Dr. Hirschman of outstanding stock options. Pursuant to
             the Employment Agreement, Dr. Hirschman is entitled to receive an
             annual base salary of $325,000 (increased to $361,000 as of January
             1, 2000), use of an automobile, major medical, term life,
             disability and dental insurance benefits for the term of his
             employment. The Employment Agreement further provides that Dr.
             Hirschman shall be nominated by the Company to serve as a member of
             the Company's Board of Directors and that Bernard Friedland and
             William Bregman will vote in favor of Dr. Hirschman as a director
             of the Company, for the duration of Dr. Hirschman's employment, and
             since October 1996, Dr. Hirschman has served as a member of the
             Company's Board of Directors.

             On February 18, 1998, the Board of Directors authorized a $100,000
             bonus to Dr. Hirschman and granted options to acquire 23,000,000
             shares of stock at $0.27 per option share provided that the Company
             is granted FDA approval for testing in the United States.

             In July 1998, the Company and Dr. Hirschman entered into an amended
             and restated employment agreement which supersedes in its entirety
             the original employment agreement of October 1996. Such amendment
             and restatement extends the term of the employment agreement to
             December 31, 2000. Additionally, the February 1998 Board of
             Directors action regarding the $100,000 bonus and the granting of
             23,000,000 options (contingent upon the occurrence of certain
             events) is included in this employment agreement.

                                      F-19

<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Cohen Agreements

             In September 1992, the Company entered into a one year consulting
             agreement with Leonard Cohen (the "September 1992 Cohen
             Agreement"). The September 1992 Cohen Agreement required that Mr.
             Cohen provide certain consulting services to the Company in
             exchange for the Company's issuing to Mr. Cohen 1,000,000 shares of
             common stock (the "September 1992 Cohen Shares"), 500,000 of which
             were issuable upon execution of the September 1992 Cohen Agreement
             and the remaining 500,000 shares of which were issuable upon Mr.
             Cohen completing 50 hours of consulting service to the Company. The
             Company issued the first 500,000 shares to Mr. Cohen in October
             1992 and the remaining 500,000 shares to Mr. Cohen in February
             1993. Further pursuant to the September 1992 Cohen Agreement, the
             Company granted to Mr. Cohen the option to acquire, at any time and
             from time to time through September 10, 1993 (which date has been
             extended through June 30, 2000), the option to acquire 3,000,000
             shares of common stock of the Company at an exercise price of $.09
             per share (which exercise price has been increased to $.16 per
             share) (the "September 1992 Cohen Options"). The fair value of
             these options are estimated to be $59,030 ($.0347 per option share)
             based upon a financial analysis of the terms of the options using
             the Black-Sholes Pricing Model with the following assumptions:
             expected volatility of 20%; risk free interest rate of 6%. This
             amount has been charged to compensation expense at December 31,
             1999 as it related to services previously provided. As of March 31,
             2000, 2,800,000 of the September 1992 Cohen Options have been
             exercised for cash consideration of $386,000.

             In February 1993, the Company entered into a second consulting
             agreement with Mr. Cohen (the "February 1993 Cohen Agreement") for
             a three year term commencing on March 1, 1993. The February 1993
             Cohen Agreement provides that Mr. Cohen provide financing business
             consulting services concerning the operations of the business of
             the Company and possible strategic transactions in exchange for the
             Company issuing to Mr. Cohen 3,500,000 shares of common stock (the
             "February 1993 Cohen Shares"), 1,500,000 shares of which Mr. Cohen
             has informed the Company he has assigned to certain other persons
             not affiliated with the Company or any of its officers or
             directors.

             In July 1994, in consideration for services related to the
             introduction, negotiation and execution of a distribution agreement
             the Company issued: (i) to Mr. Cohen, an additional 2,500,000
             shares (the "April 1994 Cohen Shares") and (ii) to each of Elliot
             Bauer and Lee Rizzuto, 625,000 shares (the "Bauer and Rizzuto
             Shares") as well as options to acquire an additional 5,000,000
             shares each at $.10 per share exercisable through May 1, 1996 (the
             "Bauer and Rizzuto Options"). Through March 31, 2000, 3,455,000
             shares were issued pursuant to the exercise of the Bauer and
             Rizzuto Options for an aggregate exercise price of $240,000. Mr.
             Rizzuto sold all of his shares and all shares underlying his
             options. Pursuant to several amendments, the remaining Bauer
             options are exercisable through June 30, 2000 at an option

                                      F-20
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Cohen Agreements (Continued)

             price of $.14. The fair value of these options are estimated to be
             $116,101 ($.0541 per option share) based upon a financial analysis
             of the terms of the options using the Black-Sholes Pricing Model
             with the following assumptions: expected volatility of 20%; risk
             free interest rate of 6%. This amount has been charged to
             compensation expense at December 31, 1999 as it related to services
             previously provided.

         GloboMax Agreement

             On January 18, 1999, the Company entered into a consulting
             agreement with GloboMax LLC to provide services at hourly rates
             established by the contract to the Company's Investigational New
             Drug application submission and to perform all work that is
             necessary to obtain FDA approval. The contract was extended by
             mutual consent of both parties. The Company has incurred
             approximately $471,000 in services to GloboMax through March 31,
             2000.

         Gallantar Agreement

             On October 1, 1999, the Company entered into an employment
             agreement with Alan Gallantar whereby Mr. Gallantar has agreed to
             serve as the Chief Financial Officer of the Company for a period of
             three years, subject to earlier termination by either party, either
             for cause as defined in and in accordance with the provisions of
             the agreement, without cause or upon the occurrence of certain
             events. Such agreement provides for Mr. Gallantar to receive a base
             salary of $175,000, $200,000 and $225,000 annually for each of the
             three years of the term of the agreement as well as various
             performance based bonuses ranging from 10% to 50% of the base
             salary and various other benefits. Additionally, in connection with
             such agreement, the Company granted Mr. Gallantar options to
             purchase an aggregate of 4,547,880 shares of the Company's common
             stock. Such options have a term of ten years and have an exercise
             price of $.24255 per share. 1,515,960 options vest on each of the
             first, second and third anniversary dates of this employment
             agreement.

             The fair value of these options are estimated to be $376,126
             ($.0827 per option share) based upon a financial analysis of the
             terms of the options using the Black-Sholes Pricing Model with the
             following assumptions: expected volatility of 20%; a risk free
             interest rate of 6% and an expected holding period of three years
             (the term of the employment agreement).


                                      F-21
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Gallantar Agreement (Continued)

             Financial reporting of these options has been done pursuant to the
             Company's policy of following APB No. 25, and related
             interpretations, in accounting for its employee stock options.
             Accordingly, the following pro forma financial information is
             presented to reflect amortization of the fair value of the options.
<TABLE>
<CAPTION>

                                                                          As
                                                                       Reported        Pro forma           As
                                                                    March 31,2000     Adjustment        Adjusted
                                                                    -------------     ----------        --------
<S>                                                                  <C>               <C>             <C>
              Net loss                                               $(2,054,420)      $(31,344)       $(2,085,764)
                                                                     ===========       ========        ===========

              Net loss per share                                          $(0.01)        $(0.00)           $(0.01)
                                                                          ======         ======            ======
</TABLE>

             There were no other options outstanding that would require pro
forma presentation.

         Harbor View Agreement

             On February 7, 2000, the Company entered into a consulting
             agreement with Harbor View Group, Inc. for past and future
             consulting services related to corporate structures, financial
             transactions, financial public relations and other matters through
             December 31, 2000.

             In connection with this agreement, the Company issued warrants to
             purchase 1,750,000 shares at an exercise price of $0.21 per share
             and warrants to purchase 1,750,000 shares at an exercise price of
             $0.26 per share until February 28, 2005. The fair value of the
             warrants is estimated to be $200,249 ($.057 per warrant) based upon
             a financial analysis of the terms of the warrants using the
             Black-Sholes Pricing Model with the following assumptions: expected
             volatility of 90%; a risk free interest rate of 6% and an expected
             holding period of eleven months (the term of the consulting
             agreement).

             The Company has determined that $89,045 of the fair value relates
             to past services and, accordingly, has expensed this portion in the
             three months ended March 31, 2000. The remaining $111,204 is
             included in other current assets and will be amortized over the
             remaining term of the agreement.

         DISTRIBUTION AGREEMENTS

         The Company currently is a party to separate agreements with five
         different entities (the "Entities"), whereby the Company has granted
         exclusive rights to distribute Product R in the countries of China,
         Japan, Macao, Hong Kong, Taiwan, Mexico, Argentina, Bolivia, Paraguay,


                                      F-22
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         DISTRIBUTION AGREEMENTS (Continued)

         Uruguay, Brazil, Chile, Channel Islands, The Isle of Man, British West
         Indies, Jamaica, Haiti, Bermuda, Belize and Saudi Arabia. Pursuant to
         these agreements, distributors are obligated to cause Product R to be
         approved for commercial sale in such countries and upon such approval,
         to purchase from the Company certain minimum quantities of Product R to
         maintain the exclusive distribution rights. Leonard Cohen, a former
         consultant to the Company, has informed the Company that he is an
         affiliate of two of these entities. To date, the Company has recorded
         revenue classified as other income for the sale of territorial rights
         under the distribution agreements. The Company has made no sales under
         the distribution agreements other than for testing purposes.

         OTHER

         The Company has entered into an agreement with an unaffiliated third
         party to increase the square footage of its corporate and laboratory
         offices in Yonkers, New York (the "build-out"). The Company anticipates
         that the total expenses associated with the build-out would be
         approximately $400,000, of which $386,000 has been incurred as of March
         31, 2000.


NOTE 3.  CONVERTIBLE DEBENTURES

         In February 1997 and October 1997, in order to finance research and
         development, the Company sold $1,000,000 and $3,000,000, respectively,
         principal amount of its ten-year 7% Convertible Debentures (the
         "February Debenture" and the "October Debenture", collectively, the
         "Debentures") due February 28, 2007 and August 30, 2007, respectively,
         to RBB Bank Aktiengesellschaft ("RBB") in offshore transactions
         pursuant to Regulation S under the Securities Act of 1933, as amended.
         Accrued interest under the Debentures was payable semi-annually,
         computed at the rate of 7% per annum on the unpaid principal balance
         from the date of issuance until the date of interest payment. The
         Debentures were convertible, at the option of the holder, into shares
         of Common Stock pursuant to specified formulas. On April 22, 1997, June
         6, 1997, July 3, 1997 and August 20, 1997, pursuant to notice by the
         holder, RBB, to the Company under the February Debenture, $330,000,
         $134,000, $270,000 and $266,000, respectively, of the principal amount
         of the February Debenture was converted into 1,648,352, 894,526,
         2,323,580 and 1,809,524 shares of the Common Stock, respectively. As of
         August 20, 1997, the February Debenture was fully converted. On
         December 9, 1997, January 7, 1998, January 14, 1998, February 19, 1998,
         February 23, 1998, March 31, 1998, May 4, 1998 and May 5, 1998,
         pursuant to notice by the holder, RBB, to the Company, $120,000,
         $133,000, $341,250, $750,000, $335,750, $425,000, $275,000 and
         $620,000, respectively, of the October Debenture was converted into
         772,201, 1,017,011, 2,512,887, 5,114,218, 1,498,884, 1,870,869,
         1,491,485 and 3,299,979 Common Stock, respectively. As of May 5, 1998,
         the October Debenture was fully converted.

                                      F-23
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         In connection with the issuance of the February Debenture, the Company
         issued to RBB three warrants (the "February Warrants") to purchase
         common stock, each such February Warrant entitling the holder to
         purchase, from February 21, 1997 through February 28, 2007, 178,378
         shares of common stock. The exercise price of the three February
         Warrants are $0.288, $0.576 and $0.864 per warrant share, respectively.
         The fair value of the February Warrants was estimated to be $37,000
         ($.021 per warrant) based upon a financial analysis of the terms of the
         warrants using the Black-Sholes Pricing Model. This amount has been
         reflected in the accompanying financial statements as interest expense
         related to the convertible February Debenture. Based on the terms for
         conversion associated with the February Debenture, there was an
         intrinsic value associated with the beneficial conversion feature of
         $413,793. This amount has been fully amortized to interest expense with
         a corresponding credit to additional paid-in capital.

         In connection with the issuance of the October Debenture, the Company
         issued to RBB three warrants (the "October Warrants") to purchase
         Common Stock, each such October Warrant entitling the holder to
         purchase, from the date of grant through August 30, 2007, 600,000
         shares of the Common Stock. The exercise price of the three October
         Warrants are $0.20, $0.23 and $0.27 per warrant share, respectively.
         The fair value of the three October Warrants was established to be
         $106,571 ($.178 per warrant), $97,912 ($.163 per warrant) and $87,472
         ($.146 per warrant), respectively, based upon a financial analysis of
         the terms of the warrants using the Black-Sholes Pricing Model. This
         amount has been reflected in the accompanying financial statements as a
         discount on the convertible debenture, with a corresponding credit to
         additional paid-in capital, and is being amortized over the expected
         term of the notes, which at December 31, 1997 was 120 months. In May
         1998, the remaining unamortized discount of $276,957 was amortized upon
         full conversion of the October Debenture.

         Based on the terms for conversion associated with the October
         Debenture, there is an intrinsic value associated with the beneficial
         conversion feature of $1,350,000. This amount has been treated as
         deferred interest expense and recorded as a reduction of the
         convertible debenture liability with a corresponding credit to
         additional paid-in capital and has been amortized to interest expense
         over the period from October 8, 1997 (date of debenture) to February
         24, 1998 (date the debenture is fully convertible). The interest
         expense relative to this item was $210,951 for 1998 and $1,139,049 for
         1997.

         In November 1998, in order to finance further research and development,
         the Company sold 1,500,000 principal amount of its ten year 7%
         Convertible Debenture (the "November Debenture") due October 31, 2008,
         to RBB. Accrued interest under the November Debenture is payable
         semi-annually, computed at the rate of 7% per annum on the unpaid
         principal balance from the date of the issuance of the November
         Debenture until the date of interest payment. The November Debenture
         may be prepaid by the Company before maturity, in whole or in part,
         without premium or penalty, if the Company gives the holder of the
         Debenture notice not less than 30 days before the date fixed for
         prepayment in that notice. The November Debenture is convertible, at
         the option of the holder, into shares of common stock.

                                      F-24
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         On January 19, 2000 and March 7, 2000 pursuant to notice by the holder,
         RBB, to the Company under the November Debenture, $1,122,500 and
         $377,500, respectively, of the principal amount of the November
         Debenture was converted into 8,252,746 and 1,887,500 shares of the
         common stock, respectively. As of March 7, 2000, the November Debenture
         was fully converted.

         In connection with the issuance of the November Debenture, the Company
         issued to RBB two warrants (the "November Warrants") to purchase Common
         Stock, each such November Warrant entitling the holder to purchase
         375,000 shares of the Common Stock at any time and from time to time
         through October 31, 2008. The exercise price of the two November
         Warrants are $.20 and $.24 per warrant share, respectively. The fair
         value of the November warrants was estimated to be $48,000 ($.064 per
         warrant) based upon a financial analysis of the terms of the warrants
         using the Black-Sholes Pricing Model with the following assumptions:
         expected volatility of 20%; a risk free interest rate of 5.75% and an
         expected holding period of one year. This amount has been amortized to
         interest expense in the accompanying consolidated condensed financial
         statements.

         Based on the terms for conversion associated with the November
         Debenture, there is an intrinsic value associated with the beneficial
         conversion feature of $625,000. This amount has been recorded as
         interest expense in 1998.

         In August 1999, in order to finance further research and development,
         the Company entered into a securities purchase agreement to issue an
         aggregate of 20 units, each unit consisting of $100,000 principal
         amount of the Company's 7% convertible debenture (the "August
         Debenture") due August 3, 2009 to Focus Investors LLC ("Focus").
         Accrued interest under the August Debenture is payable semi-annually,
         computed at the rate of 7% on the unpaid principal balance from the
         date of issuance until the date of the interest payment. No payment of
         the principal of the August Debenture may be made prior to the maturity
         date without the consent of the holder. The August Debenture is
         convertible, at the option of the holder, into shares of common stock.
         On January 19, 2000, February 17, 2000 and March 3, 2000 pursuant to
         notice by the holder, Focus, to the Company under the August Debenture,
         $300,000, $900,000 and $800,000, respectively, of the principal amount
         of the August Debenture was converted into 2,178,155, 6,440,735 and
         5,729,967 shares of the common stock, respectively. As of March 3, 2000
         the November Debenture was fully converted.

         In connection with the issuance of the August Debenture, the Company
         issued to Focus one warrant (the "August Warrant") to purchase Common
         Stock, such August Warrant entitling the holder to purchase 1,000,000
         shares of the Common Stock at any time and from time to time through
         August 3, 2004. The exercise price of the August Warrant is $.2461 per
         warrant share. The fair value of the August Warrants was estimated to
         be $52,593 ($.0526 per warrant share) based upon a financial analysis
         of the terms of the warrant using the Black-Sholes Pricing Model with
         the following assumptions: expected volatility of 20%; a risk free
         interest rate of 5.75% and an expected holding period of five years.
         This amount has been amortized to interest expense in the accompanying
         consolidated condensed financial statements.

                                      F-25
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         Based on the terms for conversion associated with the August Debenture,
         there was an intrinsic value associated with the beneficial conversion
         feature of $687,500. This amount has been recorded as interest expense
         in 1999.

         In December 1999, in order to finance further research and development,
         the Company entered into a securities purchase agreement to sell
         $2,000,000 principal amount of the Company's 7% convertible debenture
         (the December Debenture) due December 28, 2009 to Endeavour Capital
         ("Endeavour"). Accrued interest under the December Debenture is payable
         semi-annually, computed at the rate of 7% on the unpaid principal
         balance from the date of issuance until the date of the interest
         payment. No payment of the principal of the December Debenture may be
         made prior to the maturity date without the consent of the holder. The
         December Debenture is convertible, at the option of the holder, into
         shares of common stock.

         During 1999, $1,000,000 of these debentures were sold. The remaining
         $1,000,000 was not available until the shares underlying the first
         $1,000,000 were registered. Such registration statement was declared
         effective in January 2000 and the remaining $1,000,000 transaction was
         consummated.

         On January 27, 2000, February 22, 2000, February 23, 2000, February 24,
         2000 and February 29, 2000 pursuant to notice by the holder, Endeavour,
         to the Company under the December Debenture, $150,000, $135,000,
         $715,000, $785,000 and $200,000, respectively, of the principal amount
         of the December Debenture was converted into 1,105,435, 988,913,
         5,149,035, 5,622,696 and 1,036,674 shares of the common stock,
         respectively. As of March 31, 2000, $15,000 of the December Debenture
         remained outstanding.

         In connection with the issuance of the first $1,000,000 of the December
         Debenture, the Company issued to Endeavour warrants (the December
         Warrants) to purchase Common Stock, such December Warrant entitling the
         holder to purchase 100,000 shares of the Common Stock at any time and
         from time to time through December 31, 2002. The exercise price of the
         December Warrant is $.19 per warrant share. The fair value of the
         December Warrants was estimated to be $4,285 ($.0429 per warrant share)
         based upon a financial analysis of the terms of the warrant using the
         Black-Sholes Pricing Model with the following assumptions: expected
         volatility of 20%; a risk free interest rate of 6% and an expected
         holding period of three years. This amount has been amortized to
         interest expense in the accompanying consolidated financial statements.

         Based on the terms for conversion associated with the first $1,000,000
         of the December Debenture, there was an intrinsic value associated with
         the beneficial conversion feature of $357,143. This amount has been
         recorded as interest expense in 1999.

         In connection with the issuance of the second $1,000,000 of the
         December Debenture, the Company issued to Endeavour warrants (the
         December Warrants) to purchase Common Stock, such December Warrant
         entitling the holder to purchase 100,000 shares of the Common Stock at
         any time and from time to time through December 31, 2002. The exercise
         price of the December

                                      F-26
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         Warrant is $.20 per warrant share. The fair value of the December
         Warrants was estimated to be $13,600 ($.136 per warrant share) based
         upon a financial analysis of the terms of the warrant using the
         Black-Sholes Pricing Model with the following assumptions: expected
         volatility of 90%; a risk free interest rate of 6% and an expected
         holding period of three years. This amount has been amortized to
         interest expense in the accompanying consolidated financial statements.

         Based on the terms for conversion associated with the second $1,000,000
         of the December Debenture, there was an intrinsic value associated with
         the beneficial conversion feature of $386,909. This amount has been
         recorded as interest expense in 2000.

         A summary of the outstanding convertible debentures is as follows:
<TABLE>
<CAPTION>

                                                                                         March 31,    December 31,
                                                                                           2000           1999
                                                                                           ----           ----

<S>                                                                                    <C>             <C>
              Unpaid principal balance of November debenture                              $     -      $1,500,000
              Unpaid principal balance of August debenture                                      -       2,000,000
              Unpaid principal balance of December debenture                               15,000       1,000,000
                                                                                          -------      ----------
                                                                                           15,000       4,500,000
              Less unamortized discount                                                         -          53,371
                                                                                          -------      ----------
              Convertible debentures, net                                                 $15,000      $4,446,629
                                                                                          =======      ==========
</TABLE>


NOTE 4.  SECURITIES PURCHASE AGREEMENTS

         In January 1999, pursuant to a securities purchase agreement, the
         Company issued 4,917,276 shares of its common stock for an aggregate
         purchase price of $802,500. Such agreement also provided for the
         issuance of four warrants to purchase a total of 2,366,788 shares of
         common stock at prices ranging from $.204 to $.2448 per share at any
         time until December 31, 2003. The fair value of these warrants was
         estimated to be $494,138 ($.209 per warrant) based upon a financial
         analysis of the terms of the warrants using the Black-Sholes Pricing
         Model with the following assumptions: expected volatility of 20%; a
         risk free interest rate of 6% and an expected holding period of five
         years. This amount is being amortized to interest expense in the
         accompanying consolidated financial statements.

         On June 23, 1999, the Company entered into a securities purchase
         agreement with certain individuals whereby the Company will issue
         1,851,852 shares of its common stock for an aggregate purchase price of
         $500,000. These proceeds were received in July 1999. Such agreement
         also provides for the issuance of warrants to purchase an aggregate of
         925,926 shares of common stock at any time until June 30, 2004. The
         fair value of these warrants was estimated to be $37,000 ($.04 per
         warrant) based upon a financial analysis of the terms of the warrants
         using the Black-Sholes Pricing Model with the following assumptions:
         expected volatility of 20%; a risk free interest rate of 5.75% and an
         expected holding period of five years. This amount is being amortized
         to interest expense.

                                      F-27
<PAGE>

                        ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)


NOTE 4.  SECURITIES PURCHASE AGREEMENTS (Continued)

         Pursuant to a securities purchase agreement with Harbor View Group and
         other various purchasers, dated February 16, 2000, the Company received
         $3,000,000 on March 9, 2000 in exchange for 13,636,357 shares of common
         stock. As of March 31, 2000, these shares had not yet been issued;
         accordingly, the $3,000,000 has been reported as a separate line item
         ("Common stock to be issued") in the long-term liabilities section of
         the accompanying consolidated condensed balance sheet.

         Additionally, in connection with the above described securities
         purchase agreement, the Company issued warrants to purchase an
         aggregate of 5,454,544 shares of common stock. Fifty percent (50%) of
         the warrants are exercisable at $0.275 per share and fifty percent
         (50%) of the warrants are exercisable at $0.33 per share, until
         February 28, 2005. The fair value of these warrants was estimated to be
         $1,582,734 ($0.295 and $0.285 per warrant share) based upon a financial
         analysis of the terms of the warrant using the Black-Sholes Pricing
         Model with the following assumptions; expected volatility of 90%; a
         risk free interest rate of 6% and an expected holding period of five
         years. This amount is being amortized to interest expense in the
         accompanying consolidated condensed financial statements.


                                      F-28
<PAGE>



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

                          ADVANCED VIRAL RESEARCH CORP.



                              --------------------
                                   PROSPECTUS
                              --------------------


                             Up to 46,070,901 Shares
                                       of
                                  Common Stock




                                 _________, 2000

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



<PAGE>
                                     PART II
                   INFORMATION NOT REQUIRED IN THE PROSPECTUS


Item 13. Other Expenses of Issuance and Distribution.

         The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered, which will be paid
solely by Advanced Viral. All amounts shown are estimates, except the Commission
registration fee:

     Commission registration fee.....................................$ 4,652.24
     Printing and mailing expenses...................................$ 5,000.00
     Legal fees and expenses.........................................$10,000.00
     Accounting fees and expenses....................................$ 5,000.00
              Total..................................................$24,652.24

Item 14.  Indemnification of Directors and Officers

         Article Ninth of our Certificate of Incorporation contains the
following provision with respect to indemnification of directors and officers:

         Ninth: The Corporation shall, to the fullest extent permitted by
         Section 145 of the General Corporation Law of the State of Delaware, as
         the same may be amended and supplemented, indemnify any and all persons
         whom it shall have power to indemnify under said section from and
         against any and all of the expenses, liabilities or other matters
         referred to in or covered by said section, and the indemnification
         provided for herein shall not be deemed exclusive of any other rights
         to which those indemnified may be entitled under any By-law, agreement,
         vote of stockholders or disinterested directors or otherwise, both as
         to action in his official capacity and as to action in another capacity
         while holding such office, and shall continue as to a person, who has
         ceased to be director, officer, employee or agent and shall inure to
         the benefit of the heirs, executors and administrators of such a
         person.

         Section 145 of the General Corporate Law of the State of Delaware (the
"DGCL") contains provisions regarding indemnification, among others, of officers
and directors. Section 145 of the DGCL provides in relevant part:

                  (a) A corporation shall have power to indemnify any person who
         was or is a party or is threatened to be made a party to any
         threatened, pending or completed action, suit or proceeding, whether
         civil, criminal, administrative or investigative (other than an action
         by or in the right of the corporation) by reason of the fact that the
         person is or was a director, officer, employee or agent of the
         corporation, or is or was serving at the request of the corporation as
         a director, officer, employee or agent of another corporation,
         partnership, joint venture, trust or other enterprise, against expenses
         (including attorneys' fees), judgments, fines and amounts paid in
         settlement actually and reasonably incurred by the person in connection
         with such action, suit or proceeding if the person acted in good faith
         and in a manner the person reasonably believed to be in or not opposed
         to the best interests of the corporation, and, with

                                      II-1

<PAGE>



         respect to any criminal action or proceeding, had no reasonable cause
         to believe the person's conduct was unlawful. The termination of any
         action, suit or proceeding by judgment, order, settlement, conviction,
         or upon a plea of nolo contendere or its equivalent, shall not, of
         itself, create a presumption that the person did not act in good faith
         and in a manner which the person reasonably believed to be in or not
         opposed to the best interests of the corporation, and, with respect to
         any criminal action or proceeding, had reasonable cause to believe that
         the person's conduct was unlawful.

                  (b) A corporation shall have power to indemnify any person who
         was or is a party or is threatened to be made a party to any
         threatened, pending or completed action or suit by or in the right of
         the corporation to procure a judgment in its favor by reason of the
         fact that the person is or was a director, officer, employee or agent
         of the corporation, or is or was serving at the request of the
         corporation as a director, officer, employee or agent of another
         corporation, partnership, joint venture, trust or other enterprise
         against expenses (including attorneys' fees) actually and reasonably
         incurred by the person in connection with the defense or settlement of
         such action or suit if the person acted in good faith and in a manner
         the person reasonably believed to be in or not opposed to the best
         interests of the corporation and except that no indemnification shall
         be made in respect of any claim, issue or matter as to which such
         person shall have been adjudged to be liable to the corporation unless
         and only to the extent that the Court of Chancery or the court in which
         such action or suit was brought shall determine upon application that,
         despite the adjudication of liability but in view of all the
         circumstances of the case, such person is fairly and reasonably
         entitled to indemnity for such expenses which the Court of Chancery or
         such other court shall deem proper.

                  (c) To the extent that a present or former director or officer
         of a corporation has been successful on the merits or otherwise in
         defense of any action, suit or proceeding referred to in subsections
         (a) and (b) of this section, or in defense of any claim, issue or
         matter therein, such person shall be indemnified against expenses
         (including attorneys' fees) actually and reasonably incurred by such
         person in connection therewith.

                  (d) Any indemnification under subsections (a) and (b) of this
         section (unless ordered by a court) shall be made by the corporation
         only as authorized in the specific case upon a determination that
         indemnification of the present or former director, officer, employee or
         agent is proper in the circumstances because the person has met the
         applicable standard of conduct set forth in subsections (a) and (b) of
         this section. Such determination shall be made , with respect to a
         person who is a director or officer at the time of such determination,
         (1) by a majority vote of the directors who are not parties to such
         action, suit or proceeding, even though less than a quorum, or (2) by a
         committee of such directors designated by majority vote of such
         directors, even though less than a quorum, or (3) if there are no such
         directors, or if such directors so direct, by independent legal counsel
         in a written opinion, or (4) by the stockholders.

         Delaware law also permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer against
any liability asserted against him and incurred by him in such

                                      II-2

<PAGE>



capacity or arising out of his status as such, whether or not the corporation
has the power to indemnify him against that liability under Section 145 of the
DGCL.

         Our Certificate of Incorporation was amended on December 30, 1987, to
limit or eliminate director liability by incorporating new Article Eleventh,
which provides:

         A director of the Corporation shall not be personally liable to the
         Corporation or its stockholders for monetary damages for breach of
         fiduciary duty as a director, except for liability (i) for any breach
         of the director's duty of loyalty to the Corporation or its
         stockholders, (ii) for acts or omissions not in good faith or which
         involve intentional misconduct or a knowing violation of laws, (iii)
         under Section 174 of the Delaware General Corporation Law, or (iv) for
         any transaction from which the director derived an improper personal
         benefit.

         The above discussion of our Certificate of Incorporation is not
intended to be exhaustive and is respectively qualified in its entirety by such
document.

Item 15.  Recent Sales of Unregistered Securities

         The following table sets forth our sales of unregistered securities for
past three years. All transactions listed below involved the issuance of common
stock and options to acquire shares of common stock prior to commencement of the
offering described in the foregoing prospectus. No underwriters were employed
with respect to the sale of any of the securities listed below. All shares were
issued in reliance upon Section 4(2) and/or 3(b) of the Securities Act.
<TABLE>
<CAPTION>

Securities Issued                   Purchaser                       Date Acquired      Consideration
-----------------                   ---------                       -------------      -------------
<S>                                 <C>                             <C>                <C>
50,000 shares                       Malcolm Santer                  2-26-97            Services (Consulting) (1)

750,000 shares                      David Sass                      3-21-97            $0.08 per share

375,000 shares                      Norman Schwartz                 3-21-97            $0.08 per share

375,000 shares                      Mel Mendelson                   3-21-97            $0.08 per share

1,833,333 shares                    Matthew Cohen                   3-21-97            $0.08 per share

1,648,352 shares                    RBB Bank                        4-22-97            $0.20 per share (2)

894,526 shares                      RBB Bank                        6-6-97             $0.15 per share (2)

2,323,580 shares                    RBB Bank                        7-3-97             $0.12 per share (2)

1,809,524 shares                    RBB Bank                        8-20-97            $0.15 per share (2)

100,000 shares                      Malcolm Santer                  9-8-97             Services (Consulting) (3)

722,701 shares                      RBB Bank                        12-9-97            $0.16 per share (4)

1,017,011 shares                    RBB Bank                        1-7-98             $0.13 per share (4)

2,512,887 shares                    RBB Bank                        1-14-98            $0.14 per share (4)

23,000,000 option shares            Shalom Z. Hirschman, M.D.       2-18-98            (5)

5,114,218 shares                    RBB Bank                        2-23-98            $0.15 per share (4)

190,000 shares                      Plata                           3-5-98             $0.12 per share


                                      II-3

<PAGE>




1,498,884 shares                    RBB Bank                        3-19-98            $0.22 per share (4)

105,000 shares                      Plata                           3-27-98            $0.12 per share

1,870,869 shares                    RBB Bank                        3-31-98            $0.23 per share (4)

10,000 shares                       Freddie Velez                   4-3-98             $0.20 per share

200,000 shares                      Charles Miller                  4-3-98             $0.14 per share

1,491,485 shares                    RBB Bank                        5-4-98             $0.18 per share (4)

3,299,979 shares                    RBB Bank                        5-5-98             $0.19 per share (4)

50,000 shares                       Charles Miller                  5-13-98            $0.16 per share

200,000 shares                      Duffy                           5-13-98            $0.14 per share

100,000 shares                      Charles Miller                  5-13-98            $0.14 per share

100,000 shares                      Charles Miller                  5-18-98            $0.16 per share

200,000 shares                      Commonwealth                    5-18-98            $0.26 per share

100,000 shares                      Commonwealth                    5-22-98            $0.26 per share

100,000 shares                      Charles Miller                  6-22-98            $0.16 per share

85,000 shares                       Charles Miller                  7-15-98            $0.16 per share

15,000 shares                       Charles Miller                  7-17-98            $0.16 per share

25,000 shares                       Charles Miller                  7-22-98            $0.16 per share

75,000 shares                       Charles Miller                  7-24-98            $0.16 per share

100,000 shares                      Malcolm Santer                  8-12-98            Services (Consulting)(6)

7% Convertible Debenture            RBB Bank                        11-16-98           $1,500,000

375,000 warrants                    RBB Bank                        11-16-98           $0.20 per share

375,000 warrants                    RBB Bank                        11-16-98           $0.24 per share

2,450,980 shares                    Harbor View Group, Inc.         12/22/98           $0.16 per share

1,380,392 warrants                  Harbor View Group, Inc.         12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Jennifer Brandenburg Smith      12/22/98           $0.16 per share

49,020 warrants                     Jennifer Brandenburg Smith      12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Jo Sherrin Smith                12/22/98           $0.16 per share

49,020 warrants                     Jo Sherrin Smith                12/22/98           $0.2440 and $0.2448 per share

612,745 shares                      Joe Feshbach                    12/22/98           $0.16 per share

245,098 warrants                    Joe Feshbach                    12/22/98           $0.2440 and $0.2448 per share

382,965 shares                      John Zimmerman                  12/22/98           $0.16 per share

153,186 warrants                    John Zimmerman                  12/22/98           $0.2440 and $0.2448 per share

61,274 shares                       Matt Zimmerman                  12/22/98           $0.16 per share

24,508 warrants                     Matt Zimmerman                  12/22/98           $0.2440 and $0.2448 per share

306,372 shares                      Myron Weiner                    12/22/98           $0.16 per share

122,508 warrants                    Myron Weiner                    12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Robert Franklin Smith, Sr.      12/22/98           $0.16 per share

49,020 warrants                     Robert Franklin Smith, Sr.      12/22/98           $0.2440 and $0.2448 per share

306,372 shares                      Russell Kuhn                    12/22/98           $0.16 per share



                                      II-4

<PAGE>




122,508 warrants                    Russell Kuhn                    12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Shelly Marion Smith             12/22/98           $0.16 per share

49,020 warrants                     Shelly Marion Smith             12/22/98           $0.2440 and $0.2448 per share

306,372 shares                      Victor Sherman                  12/22/98           $0.16 per share

122,508 warrants                    Victor Sherman                  12/22/98           $0.2440 and $0.2448 per share

370,370 shares                      Kwong Wai Au                    6-30-99            $0.27 per share

277,778 warrants                    Kwong Wai Au                    6-30-99            $0.324 and $0.378 per share

925,926 shares                      Michael Berman                  6-30-99            $0.27 per share

463,564 warrants                    Michael Berman                  6-30-99            $0.324 and $0.378 per share

555,556 shares                      Pak-Lin Law                     6-30-99            $0.27 per share

185,186 warrants                    Pak-Lin Law                     6-30-99            $0.324 and $0.378 per share

7% convertible debentures           Focus Investors LLC             8-3-99             $2,000,000 (aggregate)

1,000,000 warrants                  Focus Investors LLC             8-3-99             $0.2461 per share

100,000 shares                      Malcolm Santer                  9-14-99            Services (Consulting) (7)

4,547,880 options                   Alan Gallantar                  10-1-99            $0.24255 per share (8)

7% convertible debentures           Endeavour Capital Fund S.A.     12-28-99           $1,000,000 (aggregate)

110,000 warrants                    Endeavour Capital Fund S.A.     12-28-99           $0.19916667 per share

180,000 shares                      Bratskeir & Co.                 1-31-2000          $0.25 per share

3,500,000 warrants                  Harbor View Group               2-7-2000           $0.21 and $0.26 per share (9)

4,204,545 shares                    Harbor View Group               2-16-2000          $0.22 per share

5,454,544 warrants                  Harbor View Group               2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Michael A. Berman               2-16-2000          $0.22 per share

181,818  warrants                   Michael A. Berman               2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Cardinal Color Inc.             2-16-2000          $0.22 per share

136,364  warrants                   Cardinal Color Inc.             2-16-2000          $0.275 and $0.33 per share

340,909  shares                     Merry Contillo                  2-16-2000          $0.22 per share

136,364  warrants                   Merry Contillo                  2-16-2000          $0.275 and $0.33 per share

340,909  shares                     Joseph Deglomina                2-16-2000          $0.22 per share

136,364  warrants                   Joseph Deglomina                2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Michael Duong                   2-16-2000          $0.22 per share

181,818  warrants                   Michael Duong                   2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Joseph Feshbach                 2-16-2000          $0.22 per share

181,818  warrants                   Joseph Feshbach                 2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Gerry Goodrich                  2-16-2000          $0.22 per share

181,818  warrants                   Gerry Goodrich                  2-16-2000          $0.275 and $0.33 per share

340,909  shares                     Bice Grobstein                  2-16-2000          $0.22 per share

181,818  warrants                   Bice Grobstein                  2-16-2000          $0.275 and $0.33 per share

909,090  shares                     Russell Kuhn                    2-16-2000          $0.22 per share

363,636  warrants                   Russell Kuhn                    2-16-2000          $0.275 and $0.33 per share

681,818  shares                     Byron Lassin                    2-16-2000          $0.22 per share

272,728  warrants                   Byron Lassin                    2-16-2000          $0.275 and $0.33 per share

909,090  shares                     Steve Levitt                    2-16-2000          $0.22 per share

363,636  warrants                   Steve Levitt                    2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Frederick P. Lutz               2-16-2000          $0.22 per share

181,818  warrants                   Frederick P. Lutz               2-16-2000          $0.275 and $0.33 per share

909,090  shares                     Victor Sherman                  2-16-2000          $0.22 per share

363,636  warrants                   Victor Sherman                  2-16-2000          $0.275 and $0.33 per share

568,182  shares                     Kevin Sossin                    2-16-2000          $0.22 per share

227,272  warrants                   Kevin Sossin                    2-16-2000          $0.275 and $0.33 per share

681,818  shares                     Wedar Biotech Corp.             2-16-2000          $0.22 per share

272,728  warrants                   Wedar Biotech Corp.             2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Myron Weiner                    2-16-2000          $0.22 per share

181,818  warrants                   Myron Weiner                    2-16-2000          $0.275 and $0.33 per share

568,182  shares                     John Zimmerman                  2-16-2000          $0.22 per share

227,272  warrants                   John Zimmerman                  2-16-2000          $0.275 and $0.33 per share

</TABLE>
--------------------------

(1)  The 50,000 shares issued for consulting services on 9-4-96 and 2-26-97 have
     been valued at $0.50 per share and $0.41 per share, respectively.

(2)  The conversions were made pursuant to the February 21, 1997 issuance of
     convertible debentures.

(3)  The 100,000 shares issued for consulting services on 9-8-97 have been
     valued at $0.24 per share.

(4)  The conversions were made pursuant to the October 1997 issuance of
     convertible debentures.

(5)  Options to purchase 23,000,000 shares at $0.27 per share granted pursuant
     to the Hirshman employment agreement.

(6)  The 100,000 shares issued for consulting services on 8-12-98 have been
     valued at $0.21 per share.

(7)  The 100,000 shares issued for consulting services on 9-14-99 have been
     valued at $0.23 per share.

(8)  Granted pursuant to the Gallantar employment agreement.

(9)  The warrants to purchase 3,500,000 shares issued pursuant to a consulting
     agreement have been valued at $0.21 and $0.26 per share.




                                      II-5

<PAGE>



Item 16.  Exhibits and Financial Statement Schedules

(a)  Exhibits


Exhibit
Number    Description
------    -----------

3.1       Articles of Incorporation of Advanced Viral Research Corp. ("ADVR")(2)

3.2       Bylaws of ADVR, as amended(1)

3.3       Amendment to Articles of Incorporation of ADVR(2)

4.1       Specimen Certificate of Common Stock(1)

4.2       Specimen Warrant Certificate(1)

4.3       Warrant Agreement between ADVR and American Stock Transfer and Trust
          Company(1)

4.4       Forms of Common Stock Options and Agreements granted by ADVR to TRM
          Management Corp.(5)

4.5       Form of Common Stock Option and Agreement granted by ADVR to Plata
          Partners Limited Partnership(12)

4.6       Consulting Agreement, dated September 11, 1992, and Form of Common
          Stock granted by ADVR to Leonard Cohen(6)

4.7       Addendum to Agreement granted by ADVR to Shalom Z. Hirschman, M.D.
          dated March 24, 1996(10)

4.8       Securities Purchase Agreement dated November 16, 1998 by and between
          ADVR and RBB Bank AG. (11)(o)

4.9       7% Convertible Debenture dated November 16, 1998. (11)(o)

4.10      Warrant dated November 16, 1998 to purchase 375,000 shares of common
          stock at $0.20 per share. (11)(o)

4.11      Warrant dated November 16, 1998 to purchase 375,000 shares of common
          stock at $0.24 per share. (11)(o)

4.12      Securities Purchase Agreement dated December 22, 1998 by and between
          ADVR and various purchasers. (15)

4.13      Form of Warrant dated December 22, 1998 to purchase shares of common
          stock of ADVR at $0.2040 per share. (15)

4.14      Form of Warrant dated December 22, 1998 to purchase shares of common
          stock of ADVR at $0.2448 per share. (15)

4.15      Securities Purchase Agreement dated June 23, 1999 by and between ADVR
          and various purchasers. (15)

4.16      Form of Warrant dated June 23, 1999 to purchase shares of common stock
          of ADVR at $0.324 per share. (15)

4.17      Form of Warrant dated June 23, 1999 to purchase shares of common stock
          of ADVR at $0.378 per share. (15)

4.18      Securities Purchase Agreement dated August 3, 1999 by and between ADVR
          and Focus Investors, LLC. (15)

4.19      Form of 7% Convertible Debenture dated August 3, 1999. (15)

4.20      Form of Warrant dated August 3, 1999 to purchase 50,000 shares of
          common stock at $0.2461 per share. (15)

4.21      Securities Purchase Agreement dated December 28, 1999 by and between
          ADVR and Endeavour Capital Fund S.A. (16)

4.22      Form of 7% Convertible Debenture dated December 28, 1999. (16)

4.23      Form of Warrant dated December 28, 1999 to purchase shares of common
          stock at $0.19916667 per share. (16)



                                      II-6

<PAGE>



Exhibit
Number    Description
------    -----------

4.24      Form of Warrant dated February 7, 2000 to purchase shares of common
          stock at $.21 per share. (17)

4.25      Form of Warrant dated February 7, 2000 to purchase shares of common
          stock at $.26 per share. (17)

4.26      Form of Warrant dated February 16, 2000 to purchase shares of common
          stock at $.275 per share. (17)

4.27      Form of Warrant dated February 16, 2000 to purchase shares of common
          stock at $.33 per share. (17)

5.1       Opinion and Consent of the law firm of Berman Wolfe Rennert Vogel &
          Mandler, P.A. *

10.1      Declaration of Trust by Bernard Friedland and William Bregman in favor
          of ADVR dated November 16, 1987(12)

10.2      Clinical Trials Agreement, dated September 19, 1990, between Clinique
          Medical Actuel and ADVR. (3)

10.3      Letter, dated March 15, 1991 to ADVR from Health Protection Branch(3)

10.4      Agreement dated August 20, 1991 between TRM Management Corp. and ADVR.
          (11)(a

10.5      Lease dated December 18, 1991 between Bayview Associates, Inc. and
          ADVR. (4)

10.6      Lease Agreement, dated February 16, 1993 between Stortford Brickell
          Inc. and ADVR. (7)

10.7      Consulting Agreement dated February 28, 1993 between Leonard Cohen and
          ADVR. (8)

10.8      Medical Advisor Agreement, dated as of September 14, 1993, between
          Lionel Resnick, M.D. and ADVR. (11)(b)

10.9      Agreement, dated November 9, 1993, between Dormer Laboratories Inc.
          and ADVR. (12)

10.10     Exclusive Distribution Agreement, dated April 25, 1994, between
          C.U.R.E. Pharmaceutical Corp. and ADVR. (11)(c)

10.11     Exclusive Distribution Agreement, dated as of June 1, 1994, between
          C.U.R.E. Pharmaceutica Central Americas Ltd. and ADVR. (11)(d

10.12     Exclusive Distribution Agreement dated as of June 17, 1994 between DCT
          S.R.L. and ADVR, as amended(11)(e)

10.13     Contract, dated as of October 25, 1994 between Commonwealth
          Pharmaceuticals of the Channel Islands and ADVR. (11)(f)

10.14     Agreement dated May 24, 1995 between ADVR and Deborah Silver(9)

10.15     Agreement dated May 29, 1995 between ADVR and Shalom Z. Hirschman,
          M.D.(9)

10.16     Exclusive Distribution Agreement, dated as of June 2, 1995, between
          AVIX International Pharmaceutical Corp. and ADVR. (12)

10.17     Supplement to Exclusive Distribution Agreement, dated November 2, 1995
          with Commonwealth Pharmaceuticals(12)

10.18     Exclusive Distributorship & Limited License Agreement, dated December
          28, 1995, between AVIX International Pharmaceutical Corp., Beijing
          Unistone Pharmaceutical Co., Ltd. and ADVR. (11)(g)

10.19     Modification Agreement, dated December 28, 1995, between AVIX
          International Pharmaceutical Corp. and ADVR. (11)(g)

10.20     Agreement dated April 1, 1996, between DCT S.R.L. and ADVR. (11)(h)

10.21     Addendum, dated as of March 24, 1996, to Consulting Agreement between
          ADVR and Shalom Z. Hirschman, M.D.(10)


                                      II-7

<PAGE>

Exhibit
Number    Description
------    -----------

10.22     Addendum to Agreement, dated July 11, 1996, between AVIX International
          Pharmaceutical Corp. and ADVR. (11)(i)

10.23     Employment Agreement, dated October 17, 1996, between ADVR and Shalom
          Z. Hirschman, M.D.(11)(j)

10.24     Lease, dated February 7, 1997 between Robert Martin Company, LLC and
          ADVR. (12)

10.25     Copy of Purchase and Sale Agreement, dated February 21, 1997 between
          ADVR and Interfi Capital Group(11)(k)

10.26     Material Transfer Agreement-Cooperative Research And Development
          Agreement, dated March 13, 1997, between National Institute of Health,
          Food and Drug Administration and the Centers for Disease Control and
          Prevention(11)(l)

10.27     Copy of Purchase and Sale Agreement, dated September 26, 1997
          between ADVR and RBB Bank AG. (11)(m)

10.28     Copy of Extension to Materials Transfer Agreement-Cooperative Research
          and Development Agreement, dated March 4, 1998, between National
          Institute of Health, Food and Drug Administration and the Centers for
          Disease Control and Prevention. (13)

10.29     Amended and Restated Employment Agreement dated July 8, 1998 between
          ADVR and Shalom Z. Hirschman, M.D.(11)(n)

10.30     Agreement between ADVR and Angelo Chinnici, M.D. dated July 1, 1999.
          (14)

10.31     Consulting Agreement between ADVR and GloboMax LLC dated January 18,
          1999. (15)

10.32     Registration Rights Agreement dated August 3, 1999 between ADVR
          Research and Focus Investors LLC. (15)

10.33     Employment Agreement dated October 1, 1999 between ADVR and Alan V.
          Gallantar (15)

10.34     Registration Rights Agreement dated December 28, 1999 between ADVR
          and Endeavour Capital Fund, S.A. (16)

10.35     Consulting Agreement dated February 7, 2000 between ADVR and Harbor
          View Group, Inc.(17)

10.36     Securities Purchase Agreement dated February 16, 2000 between ADVR and
          Harbor View Group, Inc. (17)

10.37     Letter Agreement dated as of November 9, 1999 between ADVR and
          Bratskeir & Company. *

10.38     Amended and Restated Employment Agreement dated May 12, 2000 between
          ADVR and Shalom Z. Hirschman, M.D. *

21.1      Subsidiaries of Registrant:  Advance Viral Research Ltd., a Bahamian
          corporation.

23.1      Consent of Rachlin Cohen & Holtz, LLP, Independent Certified Public
          Accountants *

23.2      Consent of the law firm of Berman Wolfe Rennert Vogel & Mandler, P.A.
          (See Exhibit 5.1).

27.1      Financial Data Schedule of ADVR as of and for the Three Months ended
          March 31, 2000.*
----------
*      Filed herewith.

1.     Documents incorporated by reference herein to certain exhibits our
       registration statement on Form S-1, as amended, File No. 33-33895, filed
       with the Securities and Exchange Commission on March 19, 1990.
2.     Documents incorporated by reference herein to certain exhibits to our
       registration statement on Form S-18, File No. 33-2262-A, filed with the
       Securities and Exchange Commission on February 12, 1989.
3.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
4.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for period ended March 31, 1991.
5.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1991.

                                      II-8

<PAGE>



6.     Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-Q for the period ended September 30, 1992.
7.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-KSB for the fiscal year ended December 31, 1992.
8.     Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-QSB for the period ended March 31, 1993.
9.     Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-QSB for the period ended June 30, 1995.
10.    Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-QSB for the period ended March 31, 1996.
11.    Incorporated by reference herein to our Current Reports on Form 8-K
       and exhibits thereto as follows:
       (a)    A report on Form 8-K dated January 3, 1992.
       (b)    A report on Form 8-K dated September 14, 1993.
       (c)    A report on Form 8-K dated April 25, 1994.
       (d)    A report on Form 8-K dated June 3, 1994.
       (e)    A report on Form 8-K dated June 17, 1994.
       (f)    A report on Form 8-K dated October 25, 1994.
       (g)    A report on Form 8-K dated December 28, 1995.
       (h)    A report on Form 8-K dated April 22, 1996.
       (i)    A report on Form 8-K dated July 12, 1996.
       (j)    A report on Form 8-K dated October 17, 1996.
       (k)    A report on Form 8-K dated February 21, 1997.
       (l)    A report on Form 8-K dated March 25, 1997.
       (m)    A report on Form 8-K dated September 26, 1997.
       (n)    A report on Form 8-K dated July 21, 1998.
       (o)    A report on Form 8-K dated November 24, 1998.
12.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-KSB for the fiscal year ended December 31, 1996.
13.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997.
14.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
15.    Documents incorporated by reference herein to certain exhibits to our
       registration statement on Form S-1, as amended, File No.
       33-70523, filed with the Securities and Exchange Commission on January
       13, 1999.
16.    Documents incorporated by reference herein to certain exhibits to our
       registration statement on Form S-1, as amended, File No.
       333-94529, filed with the Securities and Exchange Commission on January
       12, 2000.
17.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1999.


(b) Financial Statement Schedules

       All schedules have been omitted because they are not applicable or not
required or the required information is included in the financial statements or
notes thereto.


Item 17.  Undertakings

       The undersigned registrant hereby undertakes:

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

                  (i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;


                                      II-9

<PAGE>

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

                  (iii) To include any material with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

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

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provision described under Item 20 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. If a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.


                                      II-10

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
Advanced Viral has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Yonkers, State of New York, on May 23, 2000.


                                            ADVANCED VIRAL RESEARCH CORP.

                                            By: /s/ SHALOM Z. HIRSCHMAN, M.D.
                                                -----------------------------
                                                Shalom Z. Hirschman, M.D.
                                                President and Chief Executive
                                                Officer



         Pursuant to the requirements of the Securities Act of 1933 as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>

Signature                                      Title                                    Date
---------                                      -----                                    ----
<S>                                            <C>                                          <C>
/s/ Shalom Z. Hirschman, M.D                   President and Chief                      May 23, 2000
-----------------------------                  Executive Officer and director
Shalom Z. Hirschman, M.D.


/s/ Bernard Friedland                          Chairman of the Board and                May 23, 2000
-----------------------------                  director
Bernard Friedland


/s/ Alan Gallantar                             Chief Financial Officer                  May 23, 2000
-----------------------------
Alan Gallantar

/s/ William Bregman                            Secretary-Treasurer,                     May 23, 2000
-----------------------------                  director
William Bregman

/s/ Louis J. Silver                            director                                 May 23, 2000
-----------------------------
Louis J. Silver
</TABLE>


                                      II-11

<PAGE>




                                INDEX TO EXHIBITS


         Exhibit
         Number     Description
         ------     -----------

         5.1        Opinion and Consent of the law firm of Berman Wolfe
                    Rennert Vogel & Mandler, P.A.
         23.1       Consent of Rachlin Cohen & Holtz, LLP, Independent
                    Certified Public Accountants
         10.37      Letter Agreement dated as of November 9, 1999
                    between ADVR and Bratskeir & Company.
         10.38      Second Amended and Restated Employment Agreement
                    dated May 12, 2000 betwen ADVR and Shalom Z. Hirschman, M.D.
         27.1       Financial Data Schedule for ADVR as of and for the Year
                    Ended December 31, 1999
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 348052}]
{"company-data": {"conformed-name": "ADVANCED VIRAL RESEARCH CORP", "cik": "0000786623", "assigned-sic": "2834", "irs-number": "592646820", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-37974", "film-number": "644964"}, "business-address": {"street1": "1250 E HALLANDALE BEACH BLVD", "street2": "STE 501", "city": "HALLANDALE", "state": "FL", "zip": "33009", "phone": "9544587636"}, "mail-address": {"street1": "1250 EAST HALLANDALE BEACH BOULEVARD", "street2": "SUITE 501", "city": "HALLANDALE", "state": "FL", "zip": "33009"}}
As filed with the Securities and Exchange Commission on May 26, 2000.
                                                     Registration No. 333-_____

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-1
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                          ADVANCED VIRAL RESEARCH CORP.
                         ------------------------------
             (Exact name of Registrant as specified in its charter)

                                    Delaware
                                    --------
         (State or other jurisdiction of incorporation or organization)

                                      5129
                                      ----
            (Primary Standard Industrial Classification Code Number)

                                   59-2646820
                                   -----------
                      (I.R.S. Employer Identification No.)

             200 Corporate Boulevard South, Yonkers, New York 10701
             ------------------------------------------------------
          (914) 376-7383 (Address and telephone number of Registrant's
                          principal executive offices)

                      Shalom Z. Hirschman, M.D., President
      200 Corporate Boulevard South, Yonkers, New York 10701 (914) 376-7383
      ---------------------------------------------------------------------
            (Name, address and telephone number of agent for service)

                                 ---------------
                                   Copies to:
                               CHARLES J. RENNERT
                   Berman Wolfe Rennert Vogel & Mandler, P.A.
                          NationsBank Tower, Suite 3500
                           100 Southeast Second Street
                            Miami, Florida 33131-2130
                     (305) 577-4177 Phone (305) 373-6036 Fax
                                 ---------------

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effectiveness of this registration
statement.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

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

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

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________ If delivery of the prospectus is expected
to be made pursuant to Rule 434, check the following box. [_]
CALCULATION OF REGISTRATION FEE

  Title of each class of        Amount to          Proposed maximum          Proposed maximum            Amount of
securities to be registered   be registered    offering price per share  aggregate offering price     registration fee
---------------------------   -------------    ------------------------  ------------------------     ----------------
Common stock par                46,070,901            $0.36 (1)               $17,622,119.63             $4,652.24
value $0.00001 per share
Total Fee                                                                                                $4,652.24
-----------------------
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the closing bid and ask prices of the common stock on
May 23, 2000, as reported on the OTC Electronic Bulletin Board.

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

         The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.

                      [This Space Intentionally Left Blank]
Prospectus subject to completion, dated May __, 2000.

                             Up to 46,070,901 Shares

                          ADVANCED VIRAL RESEARCH CORP.

                                  Common Stock

         The shareholders named on page 42 are selling up to 46,070,901 shares
of our common stock.

         Our common stock is traded on the National Association of Securities
Dealers, Inc.'s OTC Bulletin Board under the symbol "ADVR." On May 23, 2000 the
high and low bid prices for the common stock on the Bulletin Board were $0.385
and $0.375, respectively.

         Investing in our common stock involves substantial risks. See "RISK
FACTORS" beginning on page 4.

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

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

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

                  The date of this prospectus is _______, 2000.

The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the Securities Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
TABLE OF CONTENTS
Prospectus Summary................................................................................................1

Risk Factors......................................................................................................4

About this Prospectus.............................................................................................8

Where to Find More Information....................................................................................8

Forward-looking Statements May Prove Inaccurate  .................................................................8

Market Price of and Dividends on the Common Stock and Related Shareholder Matters.................................9

Capitalization...................................................................................................10

Selected Consolidated Financial Data.............................................................................11

Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................................................................13

Business.........................................................................................................25

Management.......................................................................................................35

Principal Shareholders...........................................................................................41

Selling Shareholders.............................................................................................42

Certain Relationships and Related Transactions...................................................................43

Description of Common Stock......................................................................................43

Use of Proceeds..................................................................................................43

Plan of Distribution.............................................................................................43

Legal Matters....................................................................................................45

Experts..........................................................................................................46

Financial Statements............................................................................................F-1
i
PROSPECTUS SUMMARY

         This summary highlights information about the offering and Advanced
Viral Research Corp. which we believe will be most important to you. However,
you should read the entire prospectus for a complete understanding of the
offering and our business.

Advanced Viral Research Corporation

         Advanced Viral Research Corp. was formed in July 1985 to engage in the
production and marketing, promotion and sale of a pharmaceutical drug with the
trade name Reticulose(TM) (the current formulation of which is now known as and
hereinafter referred to as Product R(TM)) for the treatment of certain viral
diseases such as:

        o     human immunodeficiency virus, or HIV, including acquired immune
              deficiency syndrome, or AIDS;

        o     hepatitis B and hepatis C, both liver diseases

        o     human papilloma virus, or HPV, which causes genital warts and may
              lead to cervical cancer; and

        o     rheumatoid arthritis.

         Since 1962, when Reticulose was reclassified as a "new drug" by the
Food and Drug Administration, or FDA, the FDA has not permitted Reticulose to be
marketed in the United States. A forfeiture action was instituted in 1962 by the
FDA against Reticulose, and it was withdrawn from the United States market. The
injunction obtained by the FDA prohibits, among other things, any shipment of
Reticulose, now known as "Product R," until a new drug application, or NDA, is
approved by the FDA. FDA approval of an NDA first requires clinical testing of
Product R in human trials, which cannot be conducted until we first satisfy the
regulatory protocols and the substantial preapproval requirements imposed by the
FDA upon the introduction of any new or unapproved drug product pursuant to a
notice of claimed investigational exemption for a new drug, or IND.

         Our operations over the last five years have been limited principally
to research, testing and analysis of Product R in the United States, either in
vitro (outside the living body in an artificial environment, such as in a test
tube), or on animals, and engaging others to perform testing and analysis of
Product R on human patients outside the United States.

         Shalom Z. Hirschman, M.D., our President, has monitored the testing of
Product R and has recently performed analyses of Product R with our laboratory
personnel, which we believe may be used in connection with the FDA approval
process. In addition, we have contracted with GloboMax LLC of Hanover, Maryland
to advise us in our preparation and filing of an IND with the FDA, and to
otherwise assist us through the FDA process with the objective of obtaining full
approval for the manufacture and commercial distribution of Product R in the
United States.

                                        1
Our offices are located at 200 Corporate Boulevard South, Yonkers, New
York 10701 and 1250 East Hallandale Beach Boulevard, Suite 501, Hallandale,
Florida 33009. Our telephone number in Yonkers, New York is (914) 376-7383 and
our telephone number in Hallandale, Florida is (954) 458-7636 .
The Offering
Securities offered............................... 46,070,901 shares of common stock. (1)
Shares outstanding............................... 379,429,387 shares of common stock. (2)
Use of proceeds.................................. We will not receive any proceeds from the sale of
                                                  common stock by the selling
                                                  shareholders. We will receive
                                                  the cash proceeds, if any,
                                                  from the exercise of stock
                                                  options or warrants held by
                                                  selling shareholders. See
                                                  "Management's Discussion and
                                                  Analysis of Financial
                                                  Condition and Results of
                                                  Operations."
------------------------
(1)  Represents (i) 13,816,357 shares of our common stock, (ii) up to 23,300,000
     shares of common stock issuable upon the exercise of certain stock options,
     and (iii) up to 8,954,544 shares of common stock issuable upon exercise of
     certain warrants.
(2)  As of May 23, 2000. Includes shares described in footnote (1) above, but
     does not include approximately 34,000,000 shares issuable upon exercise of
     certain outstanding options, convertible debentures and warrants that are
     not held by the selling shareholders.

                                        2
SUMMARY FINANCIAL DATA

         The following selected historical financial data as of and for the
years ended December 31, 1995, 1996, 1997, 1998 and 1999 have been derived from
our audited financial statements. The selected consolidated financial data set
forth below should be read along with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
notes thereto included elsewhere in this prospectus.

Summary Statement of Operations Data
Years Ended December 31
                            ----------------------------------------------------------------------
                                                                                                       3 Months Ended
                                     1995          1996          1997           1998         1999      March 31, 2000
                                    ------        ------        ------         ------       ------     --------------
Net revenues                       $27,328       $24,111        $2,278           $656      $10,953             $3,028
Net loss                         ($401,884)  ($1,154,740)  ($4,141,729)   ($4,557,710) ($6,174,262)      $ (2,054,420)
Net loss per common share           ($0.00)       ($0.00)       ($0.02)        ($0.02)      ($0.02)            ($0.01)
Weighted average # of shares   248,002,608   257,645,815   274,534,277    294,809,073  302,361,109        313,819,774
Summary Balance Sheet Data
December 31
                             -----------------------------------------------------------------------
                                                                                                          As of
                                      1995          1996          1997           1998          1999    March 31, 2000
                                     ------        ------        ------         ------        ------   --------------
Total Assets                       $796,241    $1,716,800    $4,189,842     $3,304,953    $2,861,574     $  6,528,950
Long-term liabilities                     -             -    $2,384,793     $1,625,299    $4,676,652       $3,228,366
Stockholders' equity per              $0.00         $0.01         $0.01          $0.00         $0.00            $0.01
common share
Shares outstanding at year end  251,181,774   267,031,058   277,962,574    296,422,907   303,472,035      347,174,843
3
RISK FACTORS

         Our securities are highly speculative. You shouldn't purchase them
unless you can afford to lose your entire investment. You should consider very
carefully the following risk factors before you decide to purchase our
securities.

1.       Because our shares are 'penny stocks,' you may be unable to resell them
         in the secondary market.

         A "penny stock" is an equity security with a market price of less than
$5 per share which is not listed on the Nasdaq or a national securities
exchange. Due to the extra risks involved in an investment in penny stocks,
federal securities laws and regulations require broker/dealers who recommend
penny stocks to persons other than their established customers and accredited
investors to make a special written suitability determination for the purchaser,
provide them with a disclosure schedule explaining the penny stock market and
its risks, and receive the purchaser's written agreement to the transaction
prior to the sale. These requirements limit the ability of broker/dealers to
sell penny stocks. Also, because of the extra requirements, many broker/dealers
are unwilling to sell penny stocks at all. As a result, you maybe unable to
resell the stock you buy in this offering and could lose your entire investment.

2.       The exercise or conversion of our outstanding convertible securities
         could have a significant negative impact on the market price of our
         common stock.

         As of the date of this prospectus, in addition to the 347,174,843
shares of our common stock currently outstanding, the following securities are
outstanding:

         o    Stock options to purchase an aggregate of 51,952,280 shares of
              common stock at exercise prices ranging from $0.15 to $0.36

         o    Warrants to purchase an aggregate of 14,247,296 shares of common
              stock at prices ranging from $0.199 to $0.864

         o    Convertible debentures currently estimated to be convertible into
              an aggregate of approximately 58,000 shares based on the average
              bid and ask price of our common stock on May 23, 2000, which was
              $0.3825.

         If all the outstanding options, warrants, and convertible debentures
were fully exercised and converted, as the case may be, there would be
outstanding an additional 66,252,319 shares of common stock. The sale or
availability for sale of this number of shares of common stock in the public
market could depress the market price of the common stock. Additionally, the
sale or availability for sale of this number of shares may lessen the likelihood
that additional equity financing will be available to us, on favorable or
unfavorable terms.

                                        4
3.       It is unlikely that our company will be able to continue as a going
         concern without a significant improvement in our financial condition,
         which has constrained our ability to finance necessary research,
         development and other operating expenses as needed.

         Our independent certified public accountants' report on our
consolidated financial statements for the fiscal year ended December 31, 1999
includes an explanatory paragraph regarding our ability to continue as a going
concern. During the next 12 months, we expect to spend approximately $9,000,000
($4,000,000 of which was raised during the first quarter of fiscal 2000) to
conduct research and development related activities, including approximately
$2,250,000 related to the preparation of the IND for submission to the FDA. We
currently are unable to calculate the amount we will require in additional
funding to complete the FDA approval process, including conducting clinical
trials and filing the NDA application. Our ability to continue operations is
dependent upon our continued sale of our securities for funds to meet our cash
requirements, and as a result our ability to continue as a going concern is
doubtful.

         Unless we are able to generate sufficient revenue or raise additional
funds when needed, it is likely that we will be unable to continue our planned
activities, even if we are making progress with our research and development
projects. The longer the duration of the regulatory approval process, the more
unlikely it is that we will be able to raise such funds on favorable terms or at
all, or that any funds raised will be sufficient to complete the FDA approval
process to achieve our goal of commercial distribution in the United States and
elsewhere. Furthermore, there is no guarantee that approval of Product R by the
FDA or any other regulatory authority, or additional financing from the sale of
our securities, will translate into any material change in our financial
condition. The extensive delays and costs of complying with the FDA regulations
makes it unlikely that we will have adequate funds to finance the necessary
clinical studies and related costs.

4.       If we do not obtain the FDA's approval to conduct clinical tests of
         Product R in the United States, we will not be able to complete its
         development and may not be able to sell it anywhere.

         Product R is the only product we are developing, We will not be able to
sell it in the United States unless we submit, and the FDA approves, a new drug
application, or NDA. We must conduct clinical trials of Product R in humans
before we submit an NDA. However, we cannot begin clinical trials in the United
States until the FDA approves our notice of claimed investigational exemption
for a new drug, or IND. We have not yet submitted an IND for Product R and we
don't know if or when we will submit one. The FDA will not approve our IND if we
haven't satisfied regulatory protocols and other preapproval requirements
required for the introduction of a new or unapproved drug.

         If we submit an IND and the FDA approves it, we won't be able to begin
clinical testing unless we are able to obtain the additional financing we need
in order to conduct the trials. It is also possible that clinical trials, if
conducted, will not prove that Product R is safe or effective in

                                        5
treating viruses of any kind, in which case we won't be able to submit an NDA
and we won't be able to sell Product R in the United States.

         We haven't been able to sell Product R outside the United States
because we don't have a free sales certificate for Product R. A free sales
certificate is a document issued by the country in which a pharmaceutical
product is manufactured, certifying that the country permits the "free sale" of
the product in that country. The Bahamas, where our manufacturing facility is
located, has no procedure in place to issue a free sales certificate for any
therapeutic drug, including Product R. Most countries require that a
pharmaceutical product be at least registered and certified for free sale in the
country in which it is manufactured before allowing the registration of the
product in that country. Because we are unable to obtain a certificate from the
Bahamas, we are not able to meet registration requirements in the countries
which require the certificate, and will be unable to sell Product R in those
countries.

5.       We have incurred losses since our inception, have no product revenue,
         and expect to incur additional losses in the future.

         Although we were formed in 1985, we are still in the development stage.
From inception through December 31, 1999, we had an accumulated deficit of
approximately $19,700,000. We expect that our deficit will continue to increase.
The only product revenues we have ever had are insignificant amounts related to
our distribution of Product R for testing purposes. We do not currently have any
source of product revenue. At this time we have no basis to believe that we will
ever generate operating revenues from the sale of Product R.

6.       We depend on patents and proprietary rights, which may offer only
         limited protection against potential infringement. If we are unable to
         protect our patents and proprietary rights, our business, financial
         condition and results of operations will be harmed.

         Patent protection and trade secret protection are important to our
business and that our future will depend, in part, on our ability to maintain
trade secret protection, obtain patents and operate without infringing the
proprietary rights of others both in the United States and abroad. Litigation or
other legal proceedings may be necessary to defend against claims of
infringement, to enforce our patents, or to protect our trade secrets, and could
result in substantial cost to us and diversion of our efforts. We currently have
15 patent applications pending with the United States Patent and Trademark
Office (the "PTO") and 17 patent applications pending in other countries
relating to Product R. In the United States, we have one allowed patent and
three issued patents from the PTO.

         We also rely on trade secrets, know-how and continuing technological
advancements to protect our proprietary technology. We require all of our
employees, consultants, advisors and collaborators to enter into confidentiality
agreements that prohibit the use or disclosure of information that is deemed
confidential. The agreements also oblige our employees, consultants, advisors
and collaborators to assign to us developments, discoveries and inventions made
by such persons in connection with their work with us. However, these parties
may not honor these agreements and we may not be able to successfully protect
our rights to unpatented trade secrets and

                                        6
know-how. Others may independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to our trade secrets and
know-how.

         To facilitate development of our proprietary technology base, we may
need to obtain licenses to patents or other proprietary rights from other
parties. If we are unable to obtain such licenses, our product development
efforts may be delayed.

         We may collaborate with universities and governmental research
organizations which, as a result, may acquire certain rights to any inventions
or technical information derived from such collaboration.

         We may incur substantial costs in asserting any patent rights and in
defending suits against us related to intellectual property rights. Such
disputes could substantially delay our product development or commercialization
activities. The United States Patent and Trademark Office or a private party
could institute an interference proceeding relating to our patents or patent
applications. An opposition or revocation proceeding could be instituted in the
patent offices of foreign jurisdictions. An adverse decision in any such
proceeding could result in the loss of our rights to a patent or invention.

7.       Our business could be harmed if we lose the services of the key
         personnel upon whom we depend.

         Advanced Viral is currently wholly dependent upon the personal efforts
and abilities of our three full-time executive officers, only one of whom,
Bernard Friedland, Chairman of the Board, has any experience in the
pharmaceutical industry. The loss or unavailability to us of the services of
Bernard Friedland or Dr. Hirschman, President and Chief Executive Officer, could
have a material negative impact on our business prospects and any potential
earning capacity, and, therefore, we have obtained "key-man" insurance on the
lives of Mr. Friedland and Dr. Hirschman in the amounts of $400,000 and
$1,000,000, respectively. If our level of operations significantly increase, the
business may depend upon our abilities to attract and hire additional management
and staff employees. It is possible that we will be unable to secure such
additional management and staff when necessary.

8.       The voting control held by present management could significantly
         impact our business.

         As of the date of this prospectus, our current officers and directors
beneficially owned 91,303,133 shares of our common stock, or approximately 25.4%
of the shares of common stock deemed outstanding on such date for the purposes
of the percentage calculation, including certain shares underlying options held
by Dr. Hirschman. As there are no cumulative voting rights, current management,
by virtue of their stock ownership, can be expected to influence substantially
the election of our board of directors and thereby continue to impact
substantially our business, affairs and policies.

                                        7
ABOUT THIS PROSPECTUS

         This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission to register the resale of the shares
issued or issuable to the selling shareholders as provided in this prospectus.
As permitted by the Commission's rules, this prospectus does not contain all of
the information you can find in the registration statement or the exhibits to
the registration statement. This prospectus summarizes some of the documents
that are exhibits to the registration statement, and you should refer to the
exhibits for a more complete description of the matters covered by those
documents.

         We have not authorized anyone to give any information regarding the
offering of the shares that is different from what is contained in this
prospectus. This prospectus is not an offer to sell or a solicitation of anyone
to whom it would be unlawful to make an offer of solicitation. You should not
assume that the information contained in this prospectus is accurate as of any
time after the date of this prospectus, and neither the mailing of this
prospectus to our shareholders nor the issuance of the shares should create any
implication to the contrary.

                         WHERE TO FIND MORE INFORMATION

         We file annual, quarterly and special reports with the Commission. The
annual reports contain financial information about Advanced Viral that has been
audited and reported on, with an opinion expressed by an independent auditor.
These filings are available on the Commission's website: http://www.sec.gov.
Hard copies are available at the Commission's public reference facilities at the
following addresses:

         - 450 Fifth Street, NW, Room 1024, Washington, D.C. 20549;
         - Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
           Illinois, 60661; and
         - 7 World Trade Center, 13th Floor, New York, New York, 10007.

         Call the Commission at 1-800-SEC-0330 with questions about its public
reference facilities. To contact us, use the following information:

                          Advanced Viral Research Corp.
                          200 Corporate Boulevard South
                             Yonkers, New York 10701
                                 (914) 376-7383

                 FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE

         This prospectus includes forward-looking statements. We have based
these forward-looking statements on our current expectations and projections
about future events. Words such as "expects," "may," "will," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," and similar expressions
identify forward-looking statements. These forward-looking statements are
subject to important factors, disclosed in this prospectus, that could cause
actual results to differ materially from such expectations, including those
factors discussed in "Risk Factors."

                                        8
We will not publicly update or revise any forward-looking statements,
whether because of new information, future events or otherwise. In light of
these risks, uncertainties, and assumptions, the forward-looking events
discussed in the prospectus might not occur.

                       MARKET PRICE OF AND DIVIDENDS ON THE COMMON
                          STOCK AND RELATED SHAREHOLDER MATTERS

Common Stock

         The principal United States market in which our common stock is traded
is the over-the-counter market electronic Bulletin Board. The following table
shows the range of reported low bid and high bid per share quotations for our
common stock for each full quarterly period during the two recent fiscal years
ended December 31, 1998 and 1999, and for the first quarter of 2000. The high
and low bid prices for the periods indicated reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions.
Low Bid              High Bid
---                                                                               ---                  ---
1998
     First Quarter................................................................$0.18                $0.4375
     Second Quarter................................................................0.245                0.46
     Third Quarter.................................................................0.16                 0.30
     Fourth Quarter................................................................0.155                0.23
1999
     First Quarter.................................................................0.175                0.35
     Second Quarter................................................................0.202                0.322
     Third Quarter.................................................................0.1875               0.2344
     Fourth Quarter................................................................0.19                 0.27
2000
     First Quarter.................................................................0.185                1.40
     Second Quarter through May 23, 2000...........................................0.44                 0.26
Stockholders

         The approximate number of holders of record of the Common stock as of
the date of this prospectus is 2,746 inclusive of those brokerage firms and/or
clearing houses holding shares of common stock for their clientele (with each
such brokerage house and/or clearing house being considered as one holder).

Dividend Policy

         We have not declared or paid any dividends on our shares of common
stock. We intend to retain future earnings, if any, that may be generated from
our operations to finance our future operations and expansion and do not plan
for the reasonably foreseeable future to pay dividends to holders of our common
stock. Any decision as to the future payment of dividends will depend

                                        9
on our results of operations and financial position and such other factors as
our board of directors in its discretion deems relevant.

                                 CAPITALIZATION

         The following table sets forth the actual capitalization derived from
our financial statements as of March 31, 2000, and an adjusted capitalization to
reflect the issuance of an additional 46,070,901 common stock pursuant to:

         o         the issuance of 13,816,357 shares;
         o         the issuance of 8,954,544 shares upon the full exercise of
                   certain warrants; and
         o         the issuance of 23,300,000 shares upon the full exercise of
                   certain stock options.

         The capitalization information set forth in the table below is
qualified by, and should be read in conjunction with, the more detailed
Consolidated Financial Statements and Notes thereto included elsewhere in this
prospectus.
Pro Forma
                                                                            Actual     Pro Forma (1)        As Adjusted
                                                                            ------     -------------        -----------
Stockholders' Equity:
Common stock, $0.00001 par value; 1,000,000,000 shares                      $3,471            $3,607             $3,794
authorized; 347,174,843 shares outstanding Actual; 360,811,200
shares outstanding Pro Forma; 379,429,387 shares outstanding Pro
Forma As Adjusted
Additional paid-in-capital                                             $26,117,514       $29,117,376        $34,889,691
Deficit accumulated during the development stage                      ($21,779,658)     ($21,779,658)      ($21,779,658
Discount on Warrants                                                   ($1,958,286)      ($1,958,286)       ($1,958,286)
Total Stockholders' Equity:                                            ($2,383,041)       $5,383,039        $11,383,039
(1) Gives effect to issuance of 13,636,357 shares of common stock pursuant to a
securities purchase agreement dated February 16, 2000.

                                       10
SELECTED CONSOLIDATED FINANCIAL DATA

         The following selected historical financial data as of and for the
years ended December 31, 1995, 1996, 1997, 1998 and 1999 have been derived from
our audited financial statements. The selected consolidated financial data set
forth below should be read along with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
notes thereto included elsewhere in this prospectus.
Selected Statement of Operations Data
                                                             Year Ended December 31
                               ---------------------------------------------------------------------------------    3 Months Ended
                                     1995             1996            1997            1998            1999          March 31, 2000
                                    ------           ------          ------          ------         --------        --------------
Revenues                       $      27,328    $      24,111    $       2,278    $         656    $      10,953    $       3,028
                               -------------    -------------    -------------    -------------    -------------    -------------

Costs and Expenses:
  Research and development            34,931          255,660          817,603        1,659,456        1,745,937          695,075
  General and administrative         420,757          983,256        1,681,436        1,420,427        2,244,205          755,423
  Depreciation                        14,679           18,731           26,288          110,120          230,785           67,760
                               -------------    -------------    -------------    -------------    -------------    -------------
                                     470,367        1,257,647        2,525,327        3,190,003        4,220,927        1,518,258
                               -------------    -------------    -------------    -------------    -------------    -------------

Net Loss from Operations            (443,039)      (1,233,536)      (2,523,049)      (3,189,347)      (4,209,974)      (1,515,230)
                               -------------    -------------    -------------    -------------    -------------    -------------

Other Income (Expense):
  Interest Income                     16,155           46,796          111,845          102,043           42,744           24,963
  Other                               25,000           32,000            7,800              293               --               --
  Interest Expense                        --               --       (1,738,325)      (1,470,699)      (2,007,032)        (564,153)
                               -------------    -------------    -------------    -------------    -------------    -------------
                                      41,155           78,796       (1,618,680)      (1,368,363)      (1,964,288)        (539,190)
                               -------------    -------------    -------------    -------------    -------------    -------------

Net Loss                       $    (401,884)   $  (1,154,740)   $  (4,141,729)   $  (4,557,710)   $  (6,174,262)   $  (2,054,420)
                               =============    =============    =============    =============    =============    =============

Net Loss Per Share of Common
Stock - Basic and Diluted      $        0.00    $        0.00    ($       0.02)   ($       0.02)   ($       0.02)   ($       0.01)
                               =============    =============    =============    =============    =============    =============
Weighted Average Number of
Commons Shares Outstanding       248,002,608      257,645,815      274,534,277      294,809,073      302,361,109      313,819,774
                               =============    =============    =============    =============    =============    =============
11
Selected Balance Sheet Data
                                                                          December 31
                                                    -------------------------------------------------------------------------------
                                                          1995            1996            1997            1998            1999
                                                         ------          ------          ------          ------          ------
Assets:
Current Assets:
    Cash and cash equivalents                       $      65,230    $      61,396    $     236,059    $     924,420  $     836,876
    Investments                                           479,000        1,378,841        2,984,902          821,047             --
    Inventory                                              18,091           19,729           19,729           19,729         19,729
    Other current assets                                   12,967           16,081           20,240           29,818         59,734
                                                    -------------    -------------    -------------    -------------  -------------
Total current assets                                      575,288        1,476,047        3,260,930        1,795,014        916,339

Property and Equipment                                    214,494          207,209          485,661        1,049,593      1,375,923
Other Assets                                                6,459           33,544          443,251          460,346        569,312
                                                    -------------    -------------    -------------    -------------  -------------
         Total Assets                               $     796,241    $   1,716,800    $   4,189,842    $   3,304,953  $   2,861,574
                                                    =============    =============    =============    =============  =============

Liabilities and Stockholders' Equity (Deficiency)
Current Liabilities:
   Accounts payable and accrued liabilities         $      14,651    $      54,474    $     375,606    $     279,024  $     728,872
   Current portion of capital lease obligation                 --               --               --           38,355         50,315
   Current portion of note payable                             --               --               --               --         19,035
                                                    -------------    -------------    -------------    -------------  -------------
Total current liabilities                                  14,651           54,474          375,606          317,379        798,282
                                                    -------------    -------------    -------------    -------------  -------------
Long-Term Liabilities:
   Common stock to be issued                                   --               --               --               --             --
   Convertible debenture, net                                  --               --        2,384,793        1,457,919      4,446,629
  Capital lease obligation-non-current portion                 --               --               --          167,380        152,059
  Note payable-non-current portion                             --               --               --               --         77,964
                                                    -------------    -------------    -------------    -------------  -------------
Total Long-Term Liabilities                                    --               --        2,384,793        1,625,299      4,676,652
                                                    -------------    -------------    -------------    -------------  -------------
   Deposit on securities purchase agreement                    --               --               --          600,000             --
                                                    -------------    -------------    -------------    -------------  -------------

Stockholders' Equity (Deficiency):
  Common stock, 1,000,000,000 shares of par
value $0.00001 authorized                                   2,512            2,671            2,779            2,964          3,034
   Additional paid-in capital                           4,475,875        7,003,351       10,512,767       14,325,076     17,537,333
   Subscription receivable                                     --          (19,000)         (19,000)              --             --
   Deficit accumulated during the development          (3,696,797)      (4,851,537)      (8,993,266)     (13,550,976)   (19,725,238)
   stage
   Deferred compensation cost                                  --         (473,159)         (73,837)         (14,769)            --
   Discount on warrants                                        --               --               --               --       (428,489)
  Total Stockholders' Equity (deficiency)                 781,590        1,662,636        1,429,443          762,295     (2,613,360)
                                                    -------------    -------------    -------------    -------------  -------------
Total Liabilities and Stockholders' equity          $     796,241    $   1,716,800    $   4,189,842    $   3,304,953  $   2,861,574
                                                    =============    =============    =============    =============  =============

Shares outstanding at period end                      251,181,774      267,031,058      277,962,574      296,422,907    303,472,035
                                                    =============    =============    =============    =============  =============

(RESTUBBED TABLE)
                                                                        As of March
                                                                          31, 2000
                                                                       -----------
Assets:
Current Assets:
    Cash and cash equivalents                                         $   4,094,197
    Investments                                                                  --
    Inventory                                                                19,729
    Other current assets                                                    167,387
                                                                      -------------
Total current assets                                                      4,281,313

Property and Equipment                                                    1,673,358
Other Assets                                                                574,279
                                                                      -------------
         Total Assets                                                 $   6,528,950
                                                                      =============

Liabilities and Stockholders' Equity (Deficiency)
Current Liabilities:
   Accounts payable and accrued liabilities                           $     846,675
   Current portion of capital lease obligation                               51,416
   Current portion of note payable                                           19,452
                                                                      -------------
Total current liabilities                                                   917,543
                                                                      -------------
Long-Term Liabilities:
   Common stock to be issued                                              3,000,000
   Convertible debenture, net                                                15,000
  Capital lease obligation-non-current portion                              138,785
  Note payable-non-current portion                                           74,581
                                                                      -------------
Total Long-Term Liabilities                                               3,228,366
                                                                      -------------
   Deposit on securities purchase agreement                                      --
                                                                      -------------

Stockholders' Equity (Deficiency):
  Common stock, 1,000,000,000 shares of par
value $0.00001 authorized                                                     3,471
   Additional paid-in capital                                            26,117,514
   Subscription receivable                                                       --
   Deficit accumulated during the development
   stage
   Deferred compensation cost                                                    --
   Discount on warrants                                                  (1,958,286)
  Total Stockholders' Equity (deficiency)                                 2,383,041
                                                                      -------------
Total Liabilities and Stockholders' equity                            $   6,528,950
                                                                      =============

Shares outstanding at period end                                        347,174,843
                                                                      =============
See notes to consolidated financial statements.

                                       12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

         The following discussion and analysis should be read in conjunction
with the Consolidated Condensed Financial Statements and the related Notes to
Consolidated Condensed Financial Statements included in this prospectus. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for a full year. The statements should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1999.

Overview

         Since our inception in July 1985, ADVR has been engaged primarily in
research and development activities. We have not yet generated significant
operating revenues, and as of March 31, 2000 we had incurred a cumulative net
loss of approximately $21,780,000. Our ability to generate substantial operating
revenue depends upon our success in gaining FDA approval for the commercial use
and distribution of Product R (the prior formulation of which was known as
"Reticulose"). All of our research and development efforts have been devoted to
the development of Product R.

         In order to commence clinical trials for regulatory approval of Product
R in the United States, we must submit an Investigational New Drug application
(IND) with the FDA. Filings with foreign regulatory agencies are required to
continue or begin new clinical trials outside the United States. We have
recently contracted with GloboMax LLC of Hanover, Maryland to assist us in our
preparation and filing of the IND with the FDA, and to otherwise assist us
through the FDA process with the objective of obtaining full approval for the
manufacture and commercial distribution of Product R in the United States. The
IND will seek approval to conduct a study testing the effectiveness of Product R
on human subjects with AIDS and other diseases. In the IND we intend to include,
among other things:

                 o    information on chemistry, laboratory and animal controls;

                 o    safety information for the initial study proposed to be
                      conducted on humans; and

                 o    information assuring the identification, quality and
                      purity of Product R and a description of the physical,
                      chemical and microbiological characteristics of Product R.

         We believe that the IND will demonstrate the low rate of adverse
reactions occurring in the use of Product R as a treatment of AIDS and other
diseases, however, it is impossible to determine if or how much of the data from
any ongoing studies will be considered useful by the FDA in considering the IND
application, if it is ever filed. FDA approval to begin human clinical trials of
Product R pursuant to an approved IND will require significant cash
expenditures. Furthermore, Product R may never be approved for commercial
distribution by any country.

         We plan to continue to provide funding for testing programs in our
laboratory and at selected universities, medical schools, laboratories and
hospitals, but the amount of research that will be conducted at those
institutions will depend upon our financial status. Because our research and
development expenses and

                                       13
clinical trial expenses will be charged against earnings for financial reporting
purposes, we expect that losses from operations will continue to be incurred for
the foreseeable future.

Results of Operations

         For the three month periods ended March 31, 2000 and March 31, 1999, we
incurred losses of approximately $2,054,000 ($0.01 per share) and $910,000
($0.00 per share). Our increased losses were attributable primarily to:

         General and Administrative Expense. Our increased losses during the
three months ended March 31, 2000 are principally due to increased general and
administrative expense (approximately $755,000 for the three months ended March
31, 2000 vs. $438,000 for the three months ended March 31, 1999). Included in
the general and administrative expenses are:

                  o        an increase in consulting and professional fees of
                           approximately $182,000 ($327,000 for the three months
                           ended March 31, 2000 vs. $145,000 for the three
                           months ended March 31, 1999) attributable to the
                           engagement of an investor relations firm and a
                           consulting agreement with Harbor View Group;

                  o        an increase in payroll and related expenses of
                           approximately $90,000 ($236,000 for the three months
                           ended March 31, 2000 vs. $146,000 for the three
                           months ended March 31, 1999) attributable to
                           increased employee and officer salaries and the
                           addition of a Chief Financial Officer position; and

                  o        SEC filing fees of approximately $40,000 for the
                           three months ended March 31, 2000 vs. $0 filing fees
                           paid during the three months ended March 31, 1999.

         Depreciation Expense. Our increased losses during the three months
ended March 31, 2000 are also due to increased depreciation expense
(approximately $68,000 for the three months ended March 31, 2000 vs. $37,000 for
the three months ended March 31, 1999) due to the purchase of additional
machinery and equipment and leasehold improvements.

         Interest Income (Expense). Our increased losses during the three months
ended March 31, 2000 are also due to increased interest expense (approximately
$564,000 for the three months ended March 31, 2000 vs. $95,000 for the three
months ended March 31, 1999). Interest income for the three months ended March
31, 2000 was approximately $25,000 vs $16,000 for the three months ended March
31, 1999. Included in the interest expense are:

                  o        amortization of loan costs and other interest expense
                           (as reduced by other items previously accrued at year
                           end) of approximately $57,000 for the three months
                           ended March 31, 2000 vs. $26,000 for the three months
                           ended March 31, 1999;

                  o        beneficial conversion feature on certain convertible
                           debentures of approximately $387,000 for the three
                           months ended March 31, 2000 vs. $0 for the three
                           months ended March 31, 1999;

                                       14
o        amortization of discount on certain warrants of
                           approximately $120,000 for the three months ended
                           March 31, 2000 vs. $37,000 for the three months ended
                           March 31, 1999.

         Research and Development Expense. Our increased losses during the three
months ended March 31, 2000 are also due to increased research and development
expenses (approximately $695,000 for the three months ended March 31, 2000 vs.
$358,000 for the three months ended March 31, 1999). Included in the research
and development expenses are:

                  o        consulting expenses payable to GloboMax LLC, a firm
                           assisting us with the preparation and filing of the
                           IND, of approximately $268,000 for the three months
                           ended March 31, 2000 vs. $0 for the three months
                           ended March 31, 1999; and

                  o        expenditures in connection with the drug approval
                           process in Argentina of approximately $45,000 for the
                           three months ended March 31, 2000 vs. $0 for the
                           three months ended March 31, 1999.

         Revenues. We had sales of approximately $3,000 for the three months
ended March 31, 2000 vs. $2,000 for the three months ended March 31, 1999. All
sales during these periods were to distributors purchasing Product R for testing
purposes.

Liquidity

         As of March 31, 2000, we had current assets of approximately
$4,281,000, compared to approximately $916,000 at December 31, 1999. We had
total assets of approximately $6,529,000 and $2,862,000 at March 31, 2000 and
December 31, 1999, respectively. The increase in current and total assets was
primarily attributable to proceeds received from the sale of securities and the
exercise of outstanding options (please refer to Statement of Stockholders
Equity contained in the Consolidated Condensed Financial Statements and the
related Notes to Consolidated Condensed Financial Statements included in this
prospectus.

         On March 31, 2000, we filed a shelf registration for 200 million shares
of our common stock (the "Shelf"), all of which remain available for issuance.

         During the three months ended March 31, 2000, we used cash of
approximately $1,168,000 for operating activities, as compared to approximately
$891,000 for the three months ended March 31, 1999. During the three months
ended March 31, 2000, we:

                  o        expended approximately $236,000 for payroll and
                           related costs during the three months ended March 31,
                           2000;

                  o        incurred non-cash expenses of approximately $386,900
                           relating to amortization of deferred interest
                           associated with the beneficial conversion feature of
                           the second tranche of the December 1999 convertible
                           debentures;

                                       15
o        expended approximately$215,000 for professional and
                           consulting fees during the three months ended March
                           31, 2000;

                  o        incurred non-cash expenses relating to amortization
                           of loan costs and discount on warrants relating to
                           convertible debentures issued in 1998, 1999 and 2000
                           of approximately $106,000 and $119,900, respectively;
                           and

                  o        incurred non-cash expenses of approximately $112,000
                           relating to the issuance of warrants for consulting
                           services.

         During the three months ended March 31, 2000, cash flows provided by
financing activities was primarily due to the proceeds from the sale of
convertible debentures, sale of common stock and exercise of options in 1999 and
2000 of approximately $4,800,000. During the three months ended March 31, 2000,
cash flow used for investing activities were for expenditures of approximately
$365,000 for leasehold improvements and furniture and equipment at our Yonkers,
New York office.

         Under the terms of an agreement with RBB Bank, A.G. entered in November
1998 pursuant to which RBB purchased a 7% convertible debenture and related
warrants, we were required to file with the Commission a registration statement
to register shares of the common stock issuable upon conversion of the
convertible debenture and upon exercise of the related warrants to allow the
investors to resell such common stock to the public. Because the registration
statement was not declared effective by the Commission on or before April 13,
1999, the RBB agreement provides that we pay RBB a penalty equal to the sum of
(x) $30,000 and (y) $1,500 for each day lapsed after such date, until the
registration statement is declared effective by the Commission, provided,
however, that total penalties shall not exceed $100,000 in the aggregate. As of
the date hereof, RBB has not requested payment of the penalty, and we are
negotiating with RBB to have the penalty waived.

         Under the terms of an agreement with several purchasers entered in
December 1998, pursuant to which such purchasers purchased an aggregate of
4,917,276 shares of common stock and warrants to purchase an additional
2,366,788 shares of common stock, we were required to file with the Commission a
registration statement to register the common stock issued under the purchase
agreement, and upon exercise of the warrants to allow the resale of such common
stock to the public. Because the registration statement was not declared
effective by the Commission on or before May 21, 1999, the agreement provides
that we pay a penalty of $16,050 for each full calendar month or portion thereof
lapsed after such date, until the registration statement is declared effective,
provided, however, that total penalties shall not exceed $100,000 in the
aggregate. The registration statement was declared effective by the Commission
on December 16, 1999. Pursuant to an agreement in January 2000, the purchasers
in this transaction were paid an aggregate cash penalty of $96,300 in connection
with the registration statement.

         Under the terms of an agreement with several purchasers entered in June
1999, pursuant to which such purchasers purchased an aggregate of 1,851,852
shares of common stock and warrants to purchase an additional 926,528 shares of
common stock, we were required to file with the Commission a registration
statement to register the common stock issued under the purchase agreement, and
upon exercise of the warrants to allow the resale of such common stock to the
public. The agreement provides that if the registration statement is not
declared effective by the Commission prior to December 3, 1999, we must pay

                                       16
the purchasers a penalty of $10,000, on a pro rata basis, for each full calendar
month lapsed after such date, and a pro rated amount of said $10,000 based on a
month of 30 or 31 days (as applicable to the month in which the registration
statement is declared effective), provided, however, that total penalties shall
not exceed $20,000 in the aggregate. The registration statement was declared
effective by the Commission on December 29, 1999.

         Under the terms of a securities purchase agreement with Focus Investors
LLC dated August 3, 1999 pursuant to which Focus Investors purchased 7%
convertible debentures and related warrants, we were required to file with the
Commission a registration statement to register shares of the common stock
issuable upon conversion of the debentures and upon exercise of the warrants to
allow the purchaser to resell such common stock to the public. The purchase
agreement provides that, if the registration statement is not declared effective
prior to December 1, 1999, or if the number of shares qualified for trading on
the OTC Bulletin Board or reserved for issuance is insufficient for issuance
upon the conversion of the debentures and the exercise of the warrants, or if a
blackout event occurs (as described in the agreement, each of these events
referred to as a "default"), we will be required to pay the purchaser a penalty
for each 30 day period during which a default shall be in effect equal to
$40,000, pro rated for the number of days during each period the defaults were
pending. To the extent the periodic amounts for all default periods exceed
$100,000 in the aggregate, the excess amount shall be paid in shares of common
stock, as set forth in the agreement. The agreement further provides that until
the registration statement has been filed and becomes effective, we will not
file any other registration statement without the written consent of Focus
Investors. The registration statement was declared effective by the Commission
on December 29, 1999.

         Under the terms of a securities purchase agreement with Endeavour
Capital Fund S.A. dated December 28, 1999 and related documents thereto pursuant
to which Endeavour purchased 7% convertible debentures and related warrants, we
were required to file with the Commission a registration statement to register
shares of the common stock issuable upon conversion of the debentures (together
with interest on the debentures, which is payable in common stock on conversion)
and upon and upon exercise of the warrants to allow the purchaser to resell such
common stock to the public. The purchase agreement provides that, if the
registration statement is not declared effective prior to April 1, 2000, or if
the purchaser is restricted from making sales of registrable securities covered
by a previously effective registration statement at any time after the effective
date other than during a permitted suspension period (as defined in the
agreement), then, we will be required to pay the purchaser $40,000 (2% of the
purchase price) for each 30-day period of such default (except that, prior to
the initial effectiveness of this registration statement, the amount will be
$30,000 (1.5% of the purchase price) during the first two 30-day periods of such
default). The registration statement was declared effective by the Commission on
January 18, 2000.

         In February 2000 pursuant to a securities purchase agreement, we sold
to Harbor View Group and various other purchasers 13,636,357 shares of common
stock, and warrants to purchase an aggregate of 5,454,544 shares of common stock
in a private offering transaction. Under the terms of the agreement, we are
required to use our best efforts to file a registration statement to register
the securities issued or issuable in connection with the agreement by May 31,
2000.

         The independent certified public accountants' report on our
consolidated financial statements for the fiscal year ended December 31, 1999,
includes an explanatory paragraph regarding our ability to continue as a going
concern. Note 2 to the Consolidated Financial Statements states that our ability

                                       17
to continue operations is dependent upon the continued sale of our securities
and debt financing for funds to meet our cash requirements, which raise
substantial doubt about our ability to continue as a going concern. Further, the
accountant's report does not include any adjustments that might result from the
outcome of this uncertainty. Although we may not be successful in doing so, we
plan to eliminate or remedy the deficiencies in our financial condition through
the issuance of additional securities for cash.

Capital Resources

         We have been dependent upon the proceeds from the continued sale of
securities for the funds required to continue operations at present levels and
to fund further research and development activities. The following table
summarizes sales of our securities since February 1997.
--------------------------------------------------------------------------------------------------------------------
                    Gross                          Convertible /         Conversion Price /        Maturity Date /
Date Issued         Proceeds      Security Issued  Exercisable Into      Exercise Price            Expiration Date
--------------------------------------------------------------------------------------------------------------------
February 1997       $1,000,000    Debenture        6,675,982 shares      $0.15-0.20 per share      Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         535,134 shares        $0.288-0.864 per share    February 28, 2007
--------------------------------------------------------------------------------------------------------------------
August 1997         $3,000,000    Debenture        17,577,354 shares     $0.13-0.23 per share      Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         1,800,000 shares      $0.20-0.27 per share      August 30, 2007
--------------------------------------------------------------------------------------------------------------------
November 1998       $1,500,000    Debenture        10,130,246 shares     $0.1363-$.2011 per share  Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         375,000 shares        $0.20 per share           October 31, 2008
                                                   -----------------------------------------------------------------
                                                   375,000 shares        $0.24 per share
--------------------------------------------------------------------------------------------------------------------
January 1999        $802,500      Common Stock     4,917,276 shares      n/a                       n/a
                                  ----------------------------------------------------------------------------------
                                  Warrants         1,183,394 shares      $0.2040 per share         December 31, 2003
                                                   -----------------------------------------------------------------
                                                   1,183,394 shares      $0.2448 per share
--------------------------------------------------------------------------------------------------------------------
July 1999           $500,000      Common Stock     1,851,852 shares      n/a                       n/a
                                  ----------------------------------------------------------------------------------
                                  Warrants         463,264 shares        $0.324 per share          June 30, 2004
                                                   -----------------------------------------------------------------
                                                   463,264 shares        $0.378 per share
--------------------------------------------------------------------------------------------------------------------
August 1999         $2,000,000    Debentures       14,348,847 shares     $0.1396-$.1438 per share  Fully converted
                                  ----------------------------------------------------------------------------------
                                  Warrants         1,000,000 shares      $0.2461 per share         August 3, 2004
--------------------------------------------------------------------------------------------------------------------
December 1999       $2,000,000    Debentures       13,894,193 shares (1) $0.1363-.1929 per share   December 31, 2004
and January 2000                  ----------------------------------------------------------------------------------
                                  Warrants         210,000 shares        $0.19916667 per share     December 31, 2002
--------------------------------------------------------------------------------------------------------------------
February 2000       $3,000,000    Common Stock     13,636,957 shares     n/a                       n/a
                                  ----------------------------------------------------------------------------------
                                  Warrants         2,727,272 shares      $0.275 per share          February 28, 2005
                                                   -----------------------------------------------------------------
                                                   2,727,272 shares      $0.33 per share
--------------------------------------------------------------------------------------------------------------------
----------------------------
(1) Represents 13,842,753 shares of common stock issued in January and February
2000 upon the conversion of $1,985,000 principal amount of the convertible
debentures, plus approximately 57,870 shares issuable upon conversion of the
remaining $15,000 principal amount, excluding interest, assuming an applicable
conversion price of $0.2592, based on the average of the high and low bid price
of our common stock on May 9, 2000.

     Securities Issued in 1997
     -------------------------

     RBB Bank, A.G.: In February 1997 and October 1997, in order to finance
research and development, we sold $1,000,000 and $3,000,000, respectively,
principal amount of our ten-year 7% convertible debentures due February 28, 2007
and August 30, 2007, respectively, to RBB in offshore transactions pursuant to
Regulation S under the Securities Act. Accrued interest under the 1997
debentures was payable semiannually,

                                       18
computed at the rate of 7% per annum on the unpaid principal balance from the
date of issuance until the date of interest payment. The 1997 debentures were
convertible, at the option of the holder, into shares of common stock pursuant
to specified formulas. On April 22, 1997, June 6, 1997, July 3, 1997 and August
20, 1997, pursuant to notice by the holder, RBB, to us under the February 1997
debenture, $330,000, $134,000, $270,000 and $266,000, respectively, of the
principal amount of the February 1997 debenture was converted into 1,648,352,
894,526, 2,323,580 and 1,809,524 shares of the common stock, respectively. As of
August 20, 1997 the February 1997 debenture was fully converted. On December 9,
1997, January 7, 1998, January 14, 1998, February 19, 1998, February 23, 1998,
March 31, 1998, May 4, 1998 and May 5, 1998, pursuant to notice by the holder,
RBB, to us, $120,000, $133,000, $341,250, $750,000, $335,750, $425,000, $275,000
and $620,000, respectively, of the October 1997 debenture was converted into
772,201, 1,017,011, 2,512,887, 5,114,218, 1,498,884, 1,870,869, 1,491,485, and
3,299,979 shares of common stock, respectively. As of May 5, 1998, the October
1997 debenture was fully converted.

     In connection with the issuance of the 1997 debentures, we issued to RBB
six warrants to purchase common stock, three of which entitle the holder to
purchase, from February 21, 1997 through February 28, 2007, 178,378 shares of
the common stock, and three of which entitle the holder to purchase, from August
30, 1997 through August 30, 2007, 600,000 shares of the common stock. The
exercise prices of such warrants are $0.288, $0.576, $0.864, $0.20, $0.23 and
$0.27 per warrant share, respectively. Each such warrant provides that the
holder may elect to receive a reduced number of shares of common stock on the
basis of a cashless exercise; that number of shares bears the same proportion to
the total number shares issuable under such warrant as the excess of the market
value of shares of common stock over the warrant exercise price bears to that
market value. Each warrant contains anti-dilution provisions which provide for
the adjustment of warrant price and warrant shares. As of the date of this
prospectus, none of the warrants have been exercised.

     Securities Issued in 1998
     -------------------------

     RBB Bank, A.G.: In November 1998 we sold $1,500,000 principal amount of our
ten-year 7% convertible debenture due October 31, 2008 to RBB, as agent for the
accounts of certain persons, in an offshore transaction pursuant to Regulation S
under the Securities Act. Accrued interest under the convertible debenture is
payable semiannually, computed at the rate of 7% per annum on the unpaid
principal balance from the date of issuance until the date of interest payment.
The convertible debenture is convertible, at the option of the holder, into
shares of common stock pursuant to a specified formula. The actual number of
shares of common stock issued or issuable upon conversion of the convertible
debenture is subject to adjustment and could be materially less or more than the
above estimated amount, depending upon the future market price of the common
stock and the potential conversion of accrued interest into shares of common
stock.

     Based on the terms for conversion associated with the convertible
debenture, there is an intrinsic value associated with the beneficial conversion
feature of $625,000. Since conversion can occur immediately upon issuance of the
convertible debenture, this amount was recognized as interest expense in 1998.

     On January 19 and March 7, 2000, pursuant to notice by RBB, $1,122,500 and
$377,500 principal amount of the November 1998 debenture was converted into
8,252,746 and 1,877,500 shares of common stock, respectively. As of March 7,
2000, the November 1998 debenture was fully converted.

                                       19
In connection with the issuance of the convertible debenture, we issued to
RBB two warrants to purchase common stock , each warrant entitling the holder to
purchase, until October 31, 2008, 375,000 shares of the common stock. The
exercise prices of the two warrants are $0.20 and $0.24 per warrant share,
respectively. Each warrant provides that the holder may elect to receive a
reduced number of shares of common stock on the basis of a cashless exercise;
that number of shares bears the same proportion to the total number shares
issuable under that warrant as the excess of the market value of shares of
common stock over the warrant exercise price bears to that market value. Each
warrant contains anti-dilution provisions which provide for the adjustment of
warrant price and warrant shares. As of the date of this prospectus, none of
these warrants had been exercised.

     The fair value of the warrants issued in connection with the convertible
debenture was estimated to be $48,000 ($0.064 per warrant) based upon a
financial analysis of the terms of such warrants using the Black-Sholes pricing
model with the following assumptions: expected volatility of 20%; a risk free
interest rate of 5.75% and an expected holding period of one year. This amount
has been amortized in the accompanying consolidated financial statements as
interest expense related to the convertible debenture.

     Harbor View Group, Inc., et al.: In December 1998 pursuant to a securities
purchase agreement, we sold to Harbor View Group, Inc. and various other
purchasers 4,917,276 shares of common stock, and warrants to purchase an
aggregate of 2,366,788 shares of common stock, including (x) warrants to
purchase an aggregate of 1,966,788 shares of common stock and (y) a finder's fee
paid to Harbor View Group consisting of two warrants to purchase an aggregate
400,000 shares of common stock, in a private offering transaction pursuant to
Section 4(2) of the Securities Act, for an aggregate purchase price of $802,500.
Of the $802,500 purchase price, $600,000 was received on December 31, 1998, and
$202,500 was received in January 1999. The warrants entitle the holders to
purchase an aggregate of 1,183,394 shares of common stock at an exercise price
of $0.2040 per share, and 1,183,394 shares at an exercise price of $0.2448 per
share. The warrants are exercisable at any time and from time to time until
December 31, 2003. Each warrant provides that the holder may elect to receive a
reduced number of shares of common stock on the basis of a cashless exercise;
that number of shares bears the same proportion to the total number shares
issuable under that warrant as the excess of the market value of shares of
common stock over the warrant exercise price bears to that market value. Each
warrant contains anti-dilution provisions which provide for the adjustment of
warrant price and warrant shares. As of the date of this prospectus, warrants to
purchase 245,098 shares of common stock had been exercised.

     The fair value of the warrants issued as of January 7, 1999, the date of
issuance of the shares in connection with the securities purchase agreement, was
estimated to be $494,000 ($0.0208 per warrant) based upon a financial analysis
of the terms of such warrants using the Black-Sholes Pricing Model with the
following assumptions: expected volatility of 20%, and a risk free interest rate
of 6% through the December 31, 2003 expiration date. This amount is being
amortized to interest expense in the accompanying consolidated financial
statements.

                                       20
Securities Issued in 1999
     -------------------------

     Berman, et al.: In July 1999 pursuant to a securities purchase agreement,
we sold 1,851,852 shares of common stock, and warrants to purchase an aggregate
of 925,926 shares of common stock to Michael Berman, Pak-Lin Law and Kwong Wai
Au in a private offering transaction pursuant to Section 4(2) of the Securities
Act, for an aggregate purchase price of $500,000, received in July 1999. The
warrants entitle the holders to purchase 463,264 and 463,264 shares of common
stock at exercise prices of $0.324 and $0.378 per share, respectively. The
warrants are exercisable at any time and from time to time until June 28, 2004.
Each warrant provides that the holder may elect to receive a reduced number of
shares of common stock on the basis of a cashless exercise; that number of
shares bears the same proportion to the total number shares issuable under that
warrant as the excess of the market value of shares of common stock over the
warrant exercise price bears to that market value. Each warrant contains
anti-dilution provisions which provide for the adjustment of warrant price and
warrant shares. As of the date of this prospectus, none of the warrants had been
exercised.

     The fair value of the warrants issued as of July 9, 1999, the date of
issuance of the shares in connection with the securities purchase agreement, was
estimated to be $37,000 ($0.04 per warrant) based upon a financial analysis of
the terms of such warrants using the Black-Sholes Pricing Model with the
following assumptions: expected volatility of 20%, and a risk free interest rate
of 5.75% through the June 30, 2004 expiration date. This amount is being
amortized to interest expense in the accompanying consolidated financial
statements.

     Focus Investors LLC: Pursuant to a securities purchase agreement dated
August 3,1999 in a private offering transaction under Section 4(2) of the
Securities Act, we sold to Focus Investors LLC an aggregate of 20 units for an
aggregate gross purchase price of $2 million, each unit consisting of $100,000
principal amount of our ten-year 7% convertible debentures due August 3, 2009,
and series W warrants to purchase 50,000 shares of our common stock exercisable
until August 3, 2004. Accrued interest under the convertible debentures is
payable semiannually, computed at the rate of 7% per annum on the unpaid
principal balance from the date of issuance until the date of interest payment.
The convertible debentures are convertible, at the option of the holder, into
shares of common stock pursuant to a specified formula. The actual number of
shares of common stock issued or issuable upon conversion of the convertible
debentures is subject to adjustment and could be materially less or more than
the above estimated amount, depending upon the future market price of the common
stock and the potential conversion of accrued interest into shares of common
stock. On January 19, February 17, and March 3, 2000, pursuant to notice by
Focus Investors, $300,000, $900,000, and $800,000 principal amount of the Focus
debentures was converted into 2,178,155, 6,440,725 and 5,729,967 shares of
common stock, respectively. As of March 3, 2000, the debenture was fully
converted.

     The exercise price of the series W warrants is $0.2461 per warrant share.
The warrants provide that the holder may elect to receive a reduced number of
shares of common stock on the basis of a cashless exercise; The series W
warrants contain anti-dilution provisions which provide for the adjustment of
the warrant price and warrant shares. As of March 17, 2000, all of the warrants
had been exercised.

     The fair value of the warrants issued as of August 3, 1999 in connection
with the securities purchase agreement was estimated to be $52,953 ($0.0526 per
warrant) based upon a financial analysis of the terms of such warrants using the
Black-Sholes Pricing Model with the following assumptions: expected volatility
of

                                       21
20%, and a risk free interest rate of 5.75% through the June 30, 2004 expiration
date. This amount has been amortized to interest expense in the accompanying
consolidated financial statements.

     Endeavour Capital Fund S.A.: Pursuant to a securities purchase agreement
dated December 28, 1999 in a private offering transaction under Section 4(2) of
the Securities Act, we issued the first $1,000,000 tranche of $2,000,000 in
aggregate principal amount of our 7% convertible debentures due December 31,
2004 to Endeavour Capital Fund S.A. (the "Endeavour Transaction"). In connection
with the sale of the first tranche of debentures, we issued warrants to purchase
100,000 shares of our common stock to Endeavour, and two warrants to purchase
5,000 shares of common stock to Endeavour's legal counsel. Accrued interest
under the convertible debentures is computed at the rate of 7% per annum on the
unpaid principal balance from the date of issuance until the date of interest
payment and is payable on conversion of the debenture or on maturity in common
stock using the same conversion formula. The convertible debentures are
convertible, at the option of the holder, into shares of common stock pursuant
to a specified formula. The actual number of shares of common stock issued or
issuable upon conversion of the convertible debentures is subject to adjustment
and could be materially less or more than the estimated number of shares in this
prospectus, depending upon the future market price of the common stock and the
potential conversion of accrued interest into shares of common stock.

         These warrants expire on December 31, 2002 and are exercisable at
$0.19916667 per share. The warrants provide that the holder may elect to receive
a reduced number of shares of common stock on the basis of a cashless exercise.
The warrants contain anti-dilution provisions which provide for the adjustment
of the warrant price and warrant shares. As of the date of this prospectus, none
of these warrants had been exercised.

         The fair value of the warrants issued as of December 28, 1999 in
connection with the securities purchase agreement was estimated to be $4,285
($0.0429 per warrant) based upon a financial analysis of the terms of such
warrants using the Black-Sholes Pricing Model with the following assumptions:
expected volatility of 20%, and a risk free interest rate of 6% through the
December 31, 2002 expiration date. This amount has been amortized to interest
expense in the accompanying consolidated financial statements.

         Securities Issued in 2000
         -------------------------

         Endeavour Capital Fund S.A.: In January 2000, in connection with the
Endeavour Transaction, we issued the second $1,000,000 tranche of $2,000,000 in
aggregate principal amount of our 7% convertible debentures due December 31,
2004, along with warrants to purchase 100,000 shares of our common stock to
Endeavour Capital Fund, S.A. The terms of the second tranche of debentures and
warrants are the identical to the terms of the debentures and warrants issued in
first tranche of the Endeavour Transaction.

         The fair value of the second tranche of warrants issued in January 2000
in connection with the securities purchase agreement was estimated to be $13,600
($0.0136 per warrant) based upon a financial analysis of the terms of such
warrants using the Black-Sholes Pricing Model with the following assumptions:
expected volatility of 90%, and a risk free interest rate of 6% through the
December 31, 2002 expiration date. This amount has been amortized to interest
expense in the accompanying consolidated financial statements.

         On January 27, February 22, 23, 24, and 29, 2000 pursuant to notice by
Endeavour Capital Fund, $150,000, $135,000, $715,000, $785,000 and $200,000
principal amount of the Endeavour debentures was

                                       22
converted into 1,105,435, 988,913, 5,149,035, 5,622,696 and 1,036,674 shares of
common stock, respectively. As of March 27, 2000, $15,000 of the principal
amount of the debenture remained unconverted.

         Harbor View Group, Inc. On February 7, 2000 pursuant to a consulting
agreement with Harbor View Group, we issued to Harbor View warrants to purchase
1,750,000 shares at an exercise price of $0.21 per share, and warrants to
purchase 1,750,000 shares at an exercise price of $0.26 per share, until
February 28, 2005, in exchange for consulting services provided or to be
provided to us. Each warrant contains anti-dilution provisions which provide for
the adjustment of warrant price and warrant shares. As of the date of this
prospectus, none of these warrants had been exercised.

         The fair value of the warrants is estimated to be $200,249 ($.057 per
warrant) based upon a financial analysis of the terms of the warrant using the
Black-Sholes Pricing Model with the following assumptions: expected volatility
of 90%; a risk free interest rate of 6% and an expected holding period of eleven
months (the term of the consulting agreement). We have determined that $89,045
of the fair value relates to past services and, accordingly, we have expensed
this portion in the three months ended March 31, 2000. The remaining $111,204 is
included in other current assets and will be amortized over the remaining term
of the agreement.

         Harbor View Group, Inc., et al. In February 2000 pursuant to a
securities purchase agreement, we sold to Harbor View Group and various other
purchasers 13,636,357 shares of common stock, and warrants to purchase an
aggregate of 5,454,544 shares of common stock in a private offering transaction
pursuant to Section 4(2) of the Securities Act, for an aggregate purchase price
of $3,000,000. Half of the warrants are exercisable at $0.275 per share, and
half of the warrants are exercisable at $0.33 per share, until February 28,
2005. Each warrant provides that the holder may elect to receive a reduced
number of shares of common stock on the basis of a cashless exercise; that
number of shares bears the same proportion to the total number shares issuable
under that warrant as the excess of the market value of shares of common stock
over the warrant exercise price bears to that market value. Each warrant
contains anti-dilution provisions which provide for the adjustment of warrant
price and warrant shares. As of the date of this prospectus, none of these
warrants had been exercised.

         The fair value of the warrants issued as of February 16, 2000 in
connection with the securities purchase agreement was estimated to be $1,582,734
($0.290 per warrant) based upon a financial analysis of the terms of such
warrants using the Black-Sholes Pricing Model with the following assumptions:
expected volatility of 90%, and a risk free interest rate of 6% through the
February 28, 2005 expiration date. This amount is being amortized to interest
expense in the accompanying consolidated financial statements.

Projected Expenses

         During the next 12 months, we expect to spend approximately $9,000,000,
approximately $4,000,000 of which was raised during the first quarter of fiscal
2000, on research and development related activities, including approximately:

              o   $4,000,000 for operating expenses;

                                       23
o   $2,250,000 for the submission of the IND for Product R to the
                  FDA in connection with GloboMax's project management services
                  for the pre-clinical development and IND submission of Product
                  R to the FDA, the development of standard operating procedures
                  and validation protocol for the preparation and manufacture of
                  Product R, and toxicology studies of Product R;

              o   $1,500,000 for capital expenditures for leasehold improvements
                  and equipment at our Yonkers, New York office relating to
                  additional laboratories and manufacturing and production
                  facilities for Product R; and

              o   $1,250,000 for additional personnel.

         We anticipate that we can continue operations through September 2000
with our current liquid assets, including the proceeds from the recent sale of
the convertible debenture and other securities if no stock options or warrants
are exercised nor additional securities sold. If all of the outstanding stock
options and warrants are exercised, we will receive net proceeds of
approximately $15.0 million. Those proceeds will contribute to general and
administrative and working capital and will permit us to substantially increase
our budget for research and development and clinical trials and testing and to
operate at significantly increased levels of operation, assuming Product R
receives approvals and prospects for sales increase to justify such increased
levels of operation. The recent prevailing market price for shares of common
stock has from time to time been above the exercise prices of certain of the
outstanding options and warrants. As such, recent trading levels may not be
sustained nor may any additional options or warrants be exercised. If less than
40% or none of the outstanding options and warrants are exercised, and we obtain
no other additional financing, in order for us to achieve the level of
operations contemplated by management, management anticipates that we will have
to limit intentions to expand operations beyond current levels.

         We anticipate that we will be required to sell additional securities to
obtain the funds necessary to further our research and development activities.
We are currently seeking debt financing, licensing agreements, joint ventures
and other sources of financing, but the likelihood of obtaining such financing
on favorable terms is uncertain. Management anticipates that they will have to
defer their salaries if financing is not available in order to continue
operations,. Management does not believe that, at present, debt or equity
financing will be readily obtainable on favorable terms unless and until FDA
approval for phase I clinical testing is granted. Because of the large
uncertainties involved in the FDA approval process for commercial drug use on
humans, it is possible that we may never be able to sell Product R commercially.

Year 2000 Compliance

         Many older computer software programs refer to years in terms of their
final two digits only. Such programs may interpret the year 2000 to mean the
year 1900 instead. If not corrected, those programs could cause date-related
transaction failures.

         We developed a compliance assurance process to address this concern. A
project team performed a detailed assessment of all internal computer systems
and developed and implemented plans to correct any problems.

                                       24
Year 2000 problems could affect our research and development,
financial, administrative and communication operations. Systems critical to our
business which were identified as non-Year 2000 compliant were either replaced
or corrected through programming modifications. In addition, the project team
looked at Year 2000 readiness from other aspects of our business. We remediated
and replaced systems as needed and have been successfully testing and verifying
our modifications. In addition to our in-house efforts, we have asked vendors,
major customers, service suppliers, communications providers and banks whose
systems failures potentially could have a significant impact on our operations
to verify their Year 2000 readiness. To date, we have not encountered any
significant effects related to the Year 2000 and we do not anticipate that any
unforeseen Year 2000 problems will have a material effect on our results of
operations or financial condition.

         External and internal costs specifically associated with modifying
internal use software for Year 2000 compliance were expensed as incurred and
will not have a material impact on our consolidated financial position, results
of operations or cash flows.

         The above expectations are subject to uncertainties. For example, if we
were unsuccessful in identifying or fixing all Year 2000 problems in our
critical operations, or if we are affected by the inability of certain vendors
or suppliers to continue operations due to such a problem, our results of
operations or financial condition could be materially impacted.

                                    BUSINESS

Overview

         Advanced Viral Research Corp. was formed in July 1985 to engage in the
production and marketing, promotion and sale of a pharmaceutical drug with the
trade name Reticulose(TM). Under the Federal Food, Drug, and Cosmetic Act, as
amended in 1962, the Food and Drug Administration, or FDA, classified Reticulose
as a "new drug" requiring FDA approval prior to any sale in the United States.
Reticulose (the current formulation of which is now known as and hereinafter
referred to as Product R(TM) ) has not been approved for sale or use by the FDA
or any foreign government body, and thus we have not as yet commenced any
commercial operations. We are dependent on registration and/or approval by
applicable regulatory authorities of Product R in order to commence commercial
operations.

         Our operations over the last five years have been limited principally
to engaging in research, in vitro testing and analysis of Product R in the
United States, and engaging others to perform testing and analysis of Product R
on human patients overseas. The FDA has not approved human clinical trials for
Product R in the United States. We may be required, in the absence of grants or
other subsidies, to bear the expenses of the first phase of human clinical
trials to the extent the FDA permits human clinical trials to occur. We do not
know what the actual cost of such trials would be. If we need additional
financing to fund such human clinical trials, it may not be available to us,
which may force us to reduce our operations.

                                       25
Government Regulation

         The FDA imposes substantial requirements upon and conditions precedent
to the introduction of therapeutic drug products, such as Product R, through
lengthy and detailed laboratory and clinical testing procedures, sampling
activities and other costly and time consuming procedures to demonstrate that
such products are both safe and effective in treating the indications for which
approval is sought. After testing in animals, an Investigational New Drug, or
IND, application must be filed with the FDA to obtain authorization for human
testing. When the clinical testing has been completed and analyzed, final
manufacturing processes and procedures are in place, and certain other required
information is available to the manufacturer, a manufacturer may submit a new
drug application, or NDA, to the FDA. No action can be taken to market Product
R, or any therapeutic drug product, in the United States until an NDA has been
approved by the FDA.

         The IND process in the United States is governed by regulations
established by the FDA which strictly control the use and distribution of
investigational drugs in the United States. The guidelines require that an
application contain sufficient information to justify administering the drug to
humans, that the application include relevant information on the chemistry,
pharmacology and toxicology of the drug derived from chemical, laboratory and
animal or in vitro testing, and that a protocol be provided for the initial
study of the new drug to be conducted on humans.

         In order to conduct a clinical trial of a new drug in humans, a sponsor
must prepare and submit to the FDA a comprehensive IND. The focal point of the
IND is a description of the overall plan for investigating the drug product and
a comprehensive protocol for each planned study. The plan is carried out in
three phases: phase I clinical trials, which involve the administration of the
drug to a small number of healthy subjects to determine safety, tolerance,
absorption and metabolism characteristics; phase II clinical trials, which
involve the administration of the drug to a limited number of patients for a
specific disease to determine dose response, efficacy and safety; and phase III
clinical trials, which involve the study of the drug to gain confirmatory
evidence of efficacy and safety from a wide base of investigators and patients.

         An investigator's brochure must be included in the IND and the IND must
commit the sponsor to obtain initial and continual review and approval of the
clinical investigation. A section describing the composition, manufacture and
control of the drug substance and the drug product is included in the IND.
Sufficient information is required to be submitted to assure the proper
identification, quality, purity and strength of the investigational drug. A
description of the drug substance, including its physical, chemical, and
biological characteristics, must also be included in the IND. The general method
of preparation of the drug substance must be included. A list of all components
including inactive ingredients must also be submitted. There must be adequate
information about pharmacological and toxicological studies of the drug
involving laboratory animals or in vitro tests on the basis of which the sponsor
has concluded that it is reasonably safe to conduct the proposed clinical
investigation. Where there has been widespread use of the drug outside of the
United States or otherwise, it is possible in some limited circumstances to use
well documented clinical experience as a substitute for other pre-clinical work.

         After the FDA approves the IND, the investigation is permitted to
proceed, during which the sponsor must keep the FDA informed of new studies,
including animal studies, make progress reports on the study or studies covered
by the IND, and also be responsible for alerting FDA and clinical investigators
immediately of unforeseen serious side effects or injuries.

                                       26
When all clinical testing has been completed and analyzed, final
manufacturing processes and procedures are in place, and certain other required
information is available to the manufacturer, a manufacturer may submit an NDA
to the FDA. An NDA must be approved by the FDA covering the drug before its
manufacturer can commence commercial distribution of the drug. The NDA contains
a section describing the clinical investigations of the drug which section
includes, among other things, the following: a description and analysis of each
clinical pharmacology study of the drug; a description and analysis of each
controlled clinical study pertinent to a proposed use of the drug; a description
of each uncontrolled clinical study including a summary of the results and a
brief statement explaining why the study is classified as uncontrolled; and a
description and analysis of any other data or information relevant to an
evaluation of the safety and effectiveness of the drug product obtained or
otherwise received by the applicant from any source foreign or domestic. The NDA
also includes an integrated summary of all available information about the
safety of the drug product including pertinent animal and other laboratory data,
demonstrated or potential adverse effects of the drug, including clinically
significant potential adverse effects of administration of the drug
contemporaneously with the administration of other drugs and other related
drugs. A section is included describing the statistical controlled clinical
study and the documentation and supporting statistical analysis used in
evaluating the controlled clinical studies.

         Another section of the NDA describes the data concerning the action of
a drug in the human body over a period of time and data concerning the extent of
drug absorption in the human body or information supporting a waiver of the
submission of such data. Also included in the NDA is a section describing the
composition, manufacture and specification of the drug substance including the
following: a full description of the drug substance, its physical and chemical
characteristics; its stability; the process controls used during manufacture and
packaging; and such specifications and analytical methods as are necessary to
assure the identity, strength, quality and purity of the drug substance as well
as the availability of the drug products made from the substance. NDA's contain
lists of all components used in the manufacture of the drug product and a
statement of the specifications and analytical methods for each component. Also
included are studies of the toxicological actions of the drug as they relate to
the drug's intended uses.

         The data in the NDA must establish that the drug has been shown to be
safe for use under its proposed labeling conditions and that there is
substantial evidence that the drug is effective for its proposed use(s).
Substantial evidence is defined by statute and FDA regulation to mean evidence
consisting of adequate and well-controlled investigations, including clinical
investigations by experts qualified by scientific training and experience, to
evaluate the effectiveness of the drug involved.

         On September 20, 1984, Bernard Friedland, our former President and
current Chairman of the Board, as sponsor, submitted to the FDA an IND to
conduct a study testing the effectiveness of Product R on human subjects with
AIDS, as well as certain other viruses. The FDA has issued four letters of
deficiency with regard to the IND. In a letter dated November 29, 1984, the FDA
indicated, among other deficiencies noted, that the publications submitted with
the IND and relating to the effectiveness of Product R on virus related diseases
will not be accepted in support of the safety of Product R unless we could
establish that the proposed formulation of Product R is the same as the
formulation of Product R referenced in those publications. In addition, the FDA
required, among other things, that an IND application include relevant
information on the chemistry, laboratory and animal controls to assure the
integrity of the dosage form and that safety information be provided for the
initial study proposed to be conducted on humans. The FDA also required that the
information assure the proper identification, quality, purity and strength of
Product R and a description of the

                                       27
physical, chemical and microbiological characteristics of Product R. On
September 11, 1987, we received a further deficiency letter from the FDA,
stating that no data had been submitted supporting in vitro anti-HIV activity or
any criterion for a biological response modifier.

         On March 6, 1992, we submitted an amendment to the IND which attempted
to address the FDA's concerns. In response to the March 1992 submission, we
received a third deficiency letter from the FDA dated July 27, 1992, which
provided detailed comments with respect to chemistry, toxicology, microbiology
and clinical areas requiring further studies and action on our part. In June
1995, we received further correspondence from the FDA which stated, among other
things, that our prior submissions to the FDA did not provide an adequate
response to the FDA's earlier request for preclinical information and
accordingly our IND was "inactivated."

         We have not formally responded to the 1992 deficiency letters or the
1995 deficiency letter, nor have any of the studies cited in those letters been
undertaken. In February 1998, we contracted with GloboMax LLC of Hanover,
Maryland to advise and assist us in our preparation of a new IND to be filed
with the FDA, and to otherwise guide us through the FDA process with the
objective of obtaining full approval for Product R in the United States. During
the year ended December 31, 1999, GloboMax continued its project management
services for the pre-clinical development and IND submission of Product R to the
FDA, the development of standard operating procedures and validation protocol
for the preparation and manufacture of Product R. Expenses paid during 1999
relating to the GloboMax agreement were approximately $200,000. Pursuant to the
agreement with GloboMax, we are obligated to pay for services on an hourly
basis, at prescribed rates.

         We currently do not have the resources necessary to complete the FDA
approval process. We may allocate certain proceeds from the exercise of
currently outstanding options and warrants for the purpose of filing a new IND
with the FDA, however, such proceeds, if any, will not be sufficient to improve
our financial condition to any great degree. It is possible that the new IND for
clinical tests of Product R on humans, if submitted, will not be approved by the
FDA for human clinical trials on AIDS or other diseases, and that any tests
previously conducted or to be conducted will not satisfy FDA requirements. It is
also possible that the results of such human clinical trials, if performed, will
not prove that Product R is safe or effective in the treatment of AIDS or other
diseases, or that the FDA will not approve the sale of Product R in the United
States if we submitted a proper NDA. It is not known at this time how extensive
the phase II and phase III clinical trials will be, if they are conducted. The
data generated may not show that the drug Product R is safe and effective, and
even if the data shows that Product R is safe and effective, obtaining approval
of the NDA could take years and require financing of amounts not presently
available to us.

         In connection with our activities outside the United States, we are
also subject to regulatory requirements governing the testing, approval,
manufacture, labeling, marketing and sale of pharmaceutical and diagnostic
products, which requirements vary from country to country. Government regulation
in certain countries may delay marketing of Product R for a considerable period
of time and impose costly procedures upon our activities. The extent of
potentially adverse government regulations which might arise from future
legislation or administrative action cannot be predicted. Whether or not FDA
approval has been obtained for a product, approval of the product by comparable
regulatory authorities of foreign countries must be obtained prior to marketing
the product in those countries. The approval process may be more or less
rigorous from country to country, and the time required for approval may be
longer or shorter than that required in the United

                                       28
States. Clinical studies conducted outside of any country may not be accepted by
such country, and the approval of any pharmaceutical or diagnostic product in
one country does not assure that such product will be approved in another
country. Accordingly, until registration is granted, if ever, in the United
States or another developed or developing country, we do not expect that we will
be able to generate material sales revenue. We received a grant of authority
from the Bahamian Port Authority, an authorized division of the Bahamian
Government, on October 15, 1992 confirming the right of our subsidiary, Advance
Viral Research, Ltd., a Bahamian corporation, to carry on the manufacture and
export sale of ethical pharmaceutical products.
See "--Marketing And Sales."

Research, Development And Testing

         For the period from inception (February 20, 1984) through March 31,
2000 we expended approximately $6.0 million on testing and research and
development activities either in our laboratories or pursuant to various testing
agreements with both domestic and foreign companies. In 1995, we retained Shalom
Hirschman as our President. As President, Dr. Hirschman established our research
facility in Yonkers, New York, monitored the testing of Product R and recently
performed analyses of Product R with our scientific personnel, which analyses we
believe may be used in connection with the FDA approval process. We currently
are funding research and testing to:

         o    determine the safety of the topical use of Product R on animals
              and cultured human cells;

         o    assess the effectiveness of the topical application of Product R
              on HPV and certain cancer causing proteins of HPV. Recent
              laboratory testing has indicated that Product R may inhibit the
              expression of a protein of HPV which causes cervical cancer;

         o    study the effects of Product R in inhibiting the mutation of the
              AIDS virus in humans;

         o    assess the effectiveness of the topical application of Product R
              for the treatment of persons diagnosed with herpes
              labialis/genital infections;

         o    compare the results of treatment of persons diagnosed with AIDS
              taking a three drug cocktail and Product R with those taking a
              three drug cocktail and a placebo;

         o    determine the effectiveness of Product R for the treatment of
              rheumatoid arthritis in humans;

         o    study the effects of Product R in inhibiting the production of a
              key cancer-causing protein (E-7 protein) of the human papilloma
              virus (HPV). The E-7 protein is associated with the development of
              cervical cancer in women infected with cancer causing subtypes of
              HPV; and

         o    study the effects of Product R in inhibiting the production of key
              cellular receptors for HIV (CCR5 and CXCR4 receptors). The CCR5
              and CXCR4 receptors are two of the cell receptors used by the AIDS
              virus, HIV, to attach to its target cell and initiate infection.

         Our studies detailing the results of the above research and testing may
not positively impact the FDA's decision to approve a new IND for Product R or
approve the marketing, sales or distribution of Product R

                                       29
within the United States, and as a result may not improve our chances of gaining
approval for the marketing, sales or distribution of Product R anywhere in the
world.

Patents

         We believe that patent protection and trade secret protection are
important to our business and that our future will depend, in part, on our
ability to maintain trade secret protection, obtain patents and operate without
infringing the proprietary rights of others both in the United States and
abroad. We have currently pending 15 patent applications with the United States
Patent and Trademark Office (the "PTO") relating to Product R and 17 foreign
patent applications. In the United States, we have one patent allowed and three
have been issued by the PTO. As patent applications in the United States are
maintained in secrecy until patents issue and as publication of discoveries in
the scientific or patent literature often lag behind the actual discoveries, we
cannot be certain that we were the first to make the inventions covered by each
of our pending patent applications or that we were the first to file patent
applications for such inventions. Furthermore, the patent positions of
biotechnology and pharmaceutical companies are highly uncertain and involve
complex legal and factual questions, and, therefore, the breadth of claims
allowed in biotechnology and pharmaceutical patents or their enforceability
cannot be predicted. We cannot be sure that any additional patents will issue
from any of our patent applications or, should any patents issue, that we will
be provided with adequate protection against potentially competitive products.
Furthermore, we cannot be sure that should patents issue, they will be of
commercial value to us, or that private parties, including competitors, will not
successfully challenge our patents or circumvent our patent position in the
United States or abroad. In the absence of adequate patent protection, our
business may be adversely affected by competitors who develop comparable
technology or products. Moreover, pursuant to the terms of the Uruguay Round
Agreements Act, patents filed on or after June 8, 1995 have a term of twenty
years from the date of such filing, irrespective of the period of time it may
take for such patent to ultimately issue. This may shorten the period of patent
protection afforded to our products as patent applications in the
biopharmaceutical sector often take considerable time to issue. Under the Drug
Price Competition and Patent Term Restoration Act of 1984 (the "Patent Act"), a
sponsor may obtain marketing exclusivity for a period of time following FDA
approval of certain drug applications, regardless of patent status, if the drug
is a new chemical entity or if new clinical studies were used to support the
marketing application for the drug. Pursuant to the FDA Modernization Act of
1997, the period of exclusivity can be extended if the applicant performs
certain studies in pediatric patients. This marketing exclusivity prevents a
third party from obtaining FDA approval for a similar or identical drug under an
Abbreviated New Drug Application ("ANDA") or a "505(b)(2)" New Drug Application.
The statute also allows a patent owner to obtain an extension of applicable
patent terms for a period equal to one-half the period of time elapsed between
the filing of an IND and the filing of the corresponding NDA plus the period of
time between the filing of the NDA and FDA approval, with a five year maximum
patent extension. We cannot be sure that we will be able to take advantage of
either the patent term extension or marketing exclusivity provisions of this
law.

         In order to protect the confidentiality of our technology, including
trade secrets and know-how and other proprietary technical and business
information, we require all of our employees, consultants, advisors and
collaborators to enter into confidentiality agreements that prohibit the use or
disclosure of information that is deemed confidential. The agreements also
oblige our employees, consultants, advisors and collaborators to assign to us
developments, discoveries and inventions made by such persons in connection with
their work with us. We cannot be sure that confidentiality will be maintained or
disclosure prevented by these agreements

                                       30
or that our proprietary information or intellectual property will be protected
thereby or that others will not independently develop substantially equivalent
proprietary information or intellectual property.

         The pharmaceutical industry is highly competitive and patents have been
applied for by, and issued to, other parties relating to products competitive
with Product R. Therefore, Product R and any other drug candidates may give rise
to claims that they infringe the patents or proprietary rights of other parties
existing now and in the future. Furthermore, to the extent that we or our
consultants or research collaborators use intellectual property owned by others
in work performed for us, disputes may also arise as to the rights in such
intellectual property or in related or resulting know-how and inventions. An
adverse claim could subject us to significant liabilities to such other parties
and/or require disputed rights to be licensed from such other parties. We cannot
be sure that any license required under any such patents or proprietary rights
would be made available on terms acceptable to us, if at all. If we do not
obtain such licenses, we may encounter delays in product market introductions,
or may find that the development, manufacture or sale of products requiring such
licenses may be precluded. In addition, we could incur substantial costs in
defending ourselves in legal proceedings instituted before the PTO or in a suit
brought against it by a private party based on such patents or proprietary
rights, or in suits by us asserting our patent or proprietary rights against
another party, even if the outcome is not adverse to us. There are extensions
available under the Patent Act if the delay in prosecution of the patent
application results from a delay in the PTO's handling of any interference or
appeal involving the application. We have not conducted any searches or made any
independent investigations of the existence of any patents or proprietary rights
of other parties.

Marketing And Sales

         Except for limited sales of Product R for testing and other purposes,
Product R is not sold commercially anywhere in the world. As of the date of this
prospectus, our efforts or the efforts of our representatives have produced no
material benefits to us regarding our ability to have Product R sold
commercially anywhere in the world. We have entered into exclusive distribution
agreements with five separate entities granting exclusive rights to distribute
Product R in the countries of China, Japan, Hong Kong, Macao, Taiwan, Mexico,
Channel Islands, Isle of Man, British West Indies, Jamaica, Haiti, Bermuda,
Belize, Saudi Arabia, Argentina, Bolivia, Paraguay, Uruguay, Brazil and Chile.
Pursuant to these agreements, the distributors are obligated to cause Product R
to be approved for commercial sale in such countries and upon such approval, to
purchase from us certain minimum quantities of Product R to maintain the
exclusive distribution rights. Our marketing plans for Product R are still
dependent upon registration of Product R for sale in various jurisdictions where
our distributors are seeking approvals.

         To date we have received no information that would lead us to believe
that we will be positioned to sell Product R commercially anywhere in the world
in the immediate future, and it is possible that none of our distributors will
ever secure registration of Product R. The only application for registration of
Product R which has been filed as of the date hereof is an application
requesting that Product R be permitted to be sold in Argentina, which was filed
in March 1998. In this March 1998 filing, DCT, S.R.L., our distribution agent in
Argentina, received an investigational new drug identification number from the
National Administration for Drug, Food and Medical Technology in Argentina, or
ANMAT. This allowed DCT to begin pre-clinical studies on our behalf with Product
R which have since been concluded. In February 2000, DCT received approval from
the ANMAT to proceed further with Phase I clinical trials in Argentina for
Product R. We are currently evaluating the costs and time necessary to proceed
with Phase I clinical trials in Argentina. In

                                       31
addition, DCT must apply for approval from the ANMAT to proceed with Phases II
and III clinical trials before Product R is approved for sale in Argentina. The
costs and time necessary to complete such trials cannot be predicted at this
time.

         We initially targeted our sales and marketing efforts to those
countries where Product R was previously marketed by its prior owners for a
number of years as an anti-viral agent in the treatment of Asian influenza,
viral pneumonia, viral infectious hepatitis, mumps, encephalitis, herpes simplex
and herpes zoster. Those countries included Singapore, Hong Kong, Malaysia,
Taiwan, the Philippines and Malta. Registration of Product R will be required in
such countries as well as in the other countries comprising the distributors'
territories before any significant sales may begin. The registration of Product
R for sale in these countries has been frustrated due to our inability to obtain
the registration and approval to sell Product R in the Bahamas, the country of
origin, and a general lack of published data on the effectiveness of Product R.
Until Product R is registered and approved for sale in the United States, in
another developed country or in the other countries included in the
distributors' territories, we will not generate any material sales of Product R.
For the years ended December 31, 1999, 1998 and 1997, we reported no commercial
sales except limited sales for testing purposes. Product R is not legally
available for commercial sale anywhere in the world, except for testing
purposes. See "--Research, Development and Testing."

         By letter dated February 13, 1996, our subsidiary in the Bahamas,
Advance Viral Research, Ltd., was notified that the National Economic Council of
the Bahamas had refused our subsidiary's request for a "free sales certificate"
for Product R. A free sales certificate is a document typically issued by a
country in which a pharmaceutical product is manufactured which certifies that
such country permits the "free sale" of such product in such country. Most
countries require that, before allowing the registration of a pharmaceutical
product for use in that country, it must at least be registered and certified
for free sale in the country in which it is manufactured. However, the Bahamas
has no procedures currently in place to issue a free sales certificate for any
therapeutic drug, including Product R. If we do not obtain a free sales
certificate or other equivalent document from the Bahamas or another country, or
if we do not receive FDA approval, it is possible that we will not be able to
meet registration requirements in the countries which require that a
pharmaceutical product be at least registered and certified for free sale in the
country in which it is manufactured. Currently, we intend to manufacture Product
R in Argentina, where we are seeking regulatory approval and therefore does not
need a free sale certificate for Argentina.

         We are currently in the planning stages for the reconfiguration of our
New York research facilities to enable us to manufacture and produce Product R
if and when the FDA approves Product R for distribution and sale in the United
States.

Competition

         The pharmaceutical drug industry is highly competitive and rapidly
changing. If we ever successfully develop Product R, it will compete with
numerous existing therapies. In addition, many companies are pursuing novel
drugs that target the same diseases we are targeting with Product R. We believe
that a significant number of drugs are currently under development and will
become available in the future for the treatment of HIV, HPV, hepatitis and
other viruses. We anticipate that we will face intense and increasing
competition as new products enter the market and advanced technologies become
available. Our competitors' products may be more effective, or more effectively
marketed and sold, than Product R. Competitive products

                                       32
may render Product R obsolete or noncompetitive before we can recover the
expenses of developing and commercializing Product R. Furthermore, the
development of a cure or new treatment methods for the diseases we are targeting
could render Product R noncompetitive, obsolete or uneconomical. Many of our
competitors:

         o    have significantly greater financial, technical and human
              resources than we have and may be better equipped to develop,
              manufacture and market products,

         o    have extensive experience in preclinical testing and clinical
              trials, obtaining regulatory approvals and manufacturing and
              marketing pharmaceutical products,

         o    have products that have been approved or are in late stage
              development and operate large, well-funded research and
              development programs.

         A number of therapeutics are currently marketed or are in advanced
stages of clinical development for the treatment of HIV infection and AIDS,
including several products currently marketed as part of a "cocktail" in the
United States. We believe Product R should be added to such cocktails in order
to enhance their effectiveness. Among the companies with significant commercial
presence in the AIDS market are Glaxo Wellcome, Bristol-Myers Squibb,
Hoffmann-La Roche, Agouron Pharmaceuticals, Merck & Co. and DuPont Pharma. In
addition, Glaxo Wellcome, in collaboration with Biochem Pharma, is pursuing
development of Lamivudine, a nucleoside analogue to treat hepatitis B infection.
This compound was recently approved for marketing in the United States, China
and several other countries and represents significant potential competition for
Product R as a treatment for hepatitis B.

         Several therapeutics are currently marketed or are in advanced stages
of clinical development for the treatment of HPV. Schering Plough Corp.
manufactures Intron A, an injectable interferon product approved by the FDA for
the treatment of HPV. 3M Pharmaceuticals received FDA approval for its
immune-response modifier, Aldara(R), a self-administered topical cream, for the
treatment of HPV. Product R, if approved for commercial sale by the FDA, would
also compete with surgical, chemical, and other methods of treating HPV.
Products developed by our competitors or advances in other methods of the
treatment of HPV may have a negative impact on the commercial viability of
Product R.

         Several products are currently marketed or are in advanced stages of
clinical development for the treatment of rheumatoid arthritis. Immunex Corp.'s
product Enbrel, a biologic response modifier, was approved by the FDA in
November 1998 for the treatment of moderate to severe rheumatoid arthritis.
Centocor Inc. is developing a monoclonal antibody known as Remicade, an
anti-inflammatory agent that has completed phase III trials in rheumatoid
arthritis. The FDA approved Remicade for treatment of Crohn's disease in August
1998. Centocor filed for FDA approval of an expanded indication for Remicade for
rheumatoid arthritis in January 1999. These products represent significant
competition for Product R as a treatment for rheumatoid arthritis.

         Three antiviral products are presently sold in the United States for
the treatment of recurrent genital herpes: Zovirax(R) (manufactured by Glaxo
Wellcome Inc.) which contains acyclovir and is administered orally, topically,
or intravenously, Famvir(R) (manufactured by SmithKline Beecham Pharmaceuticals)
which contains famcyclovir and is administered orally, and Valtrex(R)
(manufactured by Glaxo Wellcome, Inc.) which

                                       33
contains valacyclovir and is also administered orally. These products represent
significant competition for Product R as a treatment for genital herpes.

         Other small companies may also prove to be significant competitors,
particularly through collaborative arrangements with large pharmaceutical and
biotechnology companies. Academic institutions, governmental agencies and other
public and private research organizations are also becoming increasingly aware
of the commercial value of their inventions and are more actively seeking to
commercialize the technology they have developed.

         If we successfully develop and obtain approval for Product R, we will
face competition based on the safety and effectiveness of Product R, the timing
and scope of regulatory approvals, the availability of supply, marketing and
sales capability, reimbursement coverage, price, patent position and other
factors. Our competitors may develop or commercialize more effective or more
affordable products, or obtain more effective patent protection, than we do.
Accordingly, our competitors may commercialize products more rapidly or
effectively than we do, which could hurt our competitive position and adversely
affect our business. If and when we obtain FDA approval for Product R, we expect
to compete primarily on the basis of product performance and price with a number
of pharmaceutical companies, both in the United States and abroad.

Employees

         We have 25 full-time employees, consisting of our four executive
officers, 18 employees involved in research, and three administrative employees.
Dr. Hirschman, our President and Chief Executive Officer and a director, Bernard
Friedland, our Chairman of the Board and a director, William Bregman, our
Secretary, Treasurer and a director, and Alan V. Gallantar, our Chief Financial
Officer, each devote all of their business time to our day-to-day business
operations. Additionally, we may hire, as and when needed, and as available,
such sales and technical support staff and consultants for specific projects on
a contract basis. See "Management --Employment Contracts, Termination of
Employment and Change-in-Control Arrangements."

Property

         We lease approximately 16,650 square feet for executive offices,
including research laboratory space, at 200 Corporate Boulevard South, Yonkers,
New York from an unaffiliated third party (the "Yonkers Lease"). The term of the
Yonkers Lease is five years through April 2005 and our annual rental obligation
under the Yonkers Lease is approximately $260,000.

         We currently maintain corporate offices at 1250 East Hallandale Beach
Boulevard, Hallandale, Florida 33009, pursuant to a three year lease agreement,
at approximately $14,000 annually. The Bahamian manufacturing facility, which
was acquired on December 16, 1987, is located in Freeport, Bahamas and consists
of a 29,242 square foot site containing a one-story concrete building of
approximately 7,300 square feet and is equipped for all phases of the testing,
production, and packaging of Product R. The Bahamian facility is currently being
used to store and produce inventory for testing purposes.

                                       34
MANAGEMENT

Executive Officers and Directors

         Our directors and executive officers and further information concerning
them are as follows:
Name                                    Age        Position
----                                    ---        --------
Shalom Z. Hirschman, M.D.                63        President, Chief Executive Officer, Chief
                                                   Scientific Officer, Director
Bernard Friedland                        74        Chairman of the Board of Directors

William Bregman                          78        Vice President, Secretary, Treasurer,
                                                   Director
Louis J. Silver                          71        Director

Alan V. Gallantar                        42        Chief Financial Officer
Shalom Z. Hirschman, M.D., President, Chief Executive Officer and a
director since October 1996, was Director of the Division of Infectious Diseases
and Professor of Medicine at Mount Sinai School of Medicine, New York, New York,
from May 1969 until October 1996.

         Bernard Friedland, Chairman of the Board since May 1987, director since
July 1985 and President and Chief Executive Officer from September 1985 until
October 1996, was employed by Key, Inc. for 30 years, until March 1, 1986, in
the Research and Development and Quality Assurance Departments in
Pharmaceuticals, Pharmacology, and Cancer antimetabolites, and has been the
President and CEO of our subsidiary, Advance Viral Research, Ltd. since 1984.

         William Bregman, director since July 1985 and Secretary-Treasurer since
September 1985, was Vice President from September 1985 until May 1987 and Vice
President and Treasurer of our subsidiary, Advance Viral Research, Ltd., from
August 1984 until the present.

         Louis J. Silver, director since May 1992, has been self-employed as a
free-lance accountant and auditor since 1985. Mr. Silver previously served as a
member of the board of directors during the periods from May 1987 to July 1987.

         Alan V. Gallantar, Chief Financial Officer since October 1999, was
treasurer and controller from March1998 to September 1999 of AMBI Inc., a
nutraceutical company, senior vice president and chief financial officer from
1992 to 1997 of Bradley Pharmaceuticals, Inc., a pharmaceutical manufacturer,
and vice president and divisional controller from 1989 to 1991 for PaineWebber
Incorporated. From 1985 to 1989, Mr. Gallantar was second vice president at The
Chase Manhattan Bank, N.A., and from 1983 to 1985, was a senior accountant at
Philip Morris, Incorporated. From 1979 to 1983, Mr. Gallantar was a senior
accountant in the audit department of Deloitte & Touche.

                                       35
Bernard Friedland and William Bregman may be deemed a "parent" and
"promoter" as those terms as defined in the rules and regulations promulgated
under the Securities Act. Directors are elected to serve until the next annual
meeting of stockholders and until their successors have been elected and have
qualified.

Director Compensation

         The arrangement for director compensation is $150 for each meeting of
the board of directors attended, which has not in fact been paid within at least
the last three years.

Executive Officer Compensation

         Other than Dr. Hirschman, our President and Chief Executive Officer,
none of our directors, officers or employees received salary and bonus exceeding
in the aggregate $100,000 in the years ended December 31, 1999, 1998 or 1997.
The following table provides certain summary information concerning compensation
paid or accrued by our company to or on behalf of the named executive officer
for the years ended December 31, 1999, 1998 and 1997.
Summary Compensation Table
                                                  --------------------------

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Long Term
                                                          Annual Compensation                        Compensation Awards
                                                          -------------------                        -------------------
                                                                                               Securities
Name and                                                                Other Annual           Underlying           All Other
Principal Position              Year      Salary (1)      Bonus       Compensation (2)      Options/SARs (3)     Compensation (4)
------------------------------------------------------------------------------------------------------------------------------------
Shalom Z. Hirschman, M.D.,      1999       $325,000      $     0           $   34,738                     --          $4,316
President, Chief Executive
Officer and Chief Scientific
Officer since October 1996      1998       $325,000      $     0           $   12,288             23,000,000          $4,316
and consultant from May 24,
1995 until October 1996.        1997       $325,000      $43,000           $   14,604                     --          $3,956

------------------------------------------------------------------------------------------------------------------------------------
Alan V. Gallantar, Chief        1999        $43,750      $     0           $    1,500              4,547,880              --
Financial Officer since
October 1999.
                                1998             --           --                   --                     --              --

                                1997             --           --                   --                     --              --
--------------------------------
1.   Dr. Hirschman's salary increased for the year 2000 to $361,000. Mr.
     Gallantar was hired in October 1999 and therefore his salary reflects only
     three months of his $175,000 annual salary.
2.   Other Annual Compensation for Dr. Hirschman includes medical insurance
     premiums we paid on his behalf, and aggregate incremental cost to us of Dr.
     Hirschman's automobile lease, gas, oil, repairs and maintenance. Other
     Annual Compensation for Mr. Gallantar includes an automobile allowance of
     $500 per month.
3.   Includes all options granted during fiscal years shown. No stock
     appreciation rights were granted with any options.
4.   The dollar value of insurance premiums paid by, or on behalf of, us with
     respect to term life insurance for the benefit of Dr. Hirschman.

         In February 1998, we granted Dr. Hirschman options to acquire
23,000,000 shares of common stock, which are currently exerciseable at $.27 per
share through February 17, 2008. In October 1999, we granted Mr. Gallantar
options to acquire 4,547,880 shares of common stock, exercisable in one third
increments on October 1, 2000, 2001, and 2002, until October 1, 2009. No other
stock options were granted to the named executive officers during 1999. Other
than Dr. Hirschman's and Mr. Gallantar's stock options, we currently have
outstanding:

                                       36
o    Warrants to purchase 14,247,296 shares of common stock at exercise
              prices ranging from $0.199 to $0.864 per warrant share; and

         o    Options to acquire 51,952,280 shares of the common stock at
              exercise prices ranging from $0.14 to $0.36 per option share, none
              of which are beneficially owned by our directors, officers or
              employees; and

         The following table sets forth certain summary information concerning
exercised and unexercised options to purchase our common stock as of December
31, 1999 held by the named executive officers. No options were exercised during
the year ended December 31, 1999 by the named executive officers.
Aggregated Option Exercises in
                                          Last Fiscal Year And Year-end Option Values
                                          -------------------------------------------

                                                             Number of Securities       Value of Unexercised In-the-
                                Shares                      Underlying Unexercised            Money Options at
                              Acquired on     Value       Options at Fiscal Year-End           Fiscal Year-End
Name                         Exercise (#)  Realized (1)    Exercisable/Unexercisable      Exercisable/Unexercisable
----                         ------------  ------------    -------------------------      -------------------------
Shalom Z. Hirschman, M.D.          0           N/A          16,100,000 / 23,000,000            $0 / $0 (2)(3)
Alan V. Gallantar                  0           N/A               0 / 4,547,880                 $0 / $0 (2)(4)
--------------------------------
(1)  The difference between the average of the high and low bid prices per share
     of the common stock as reported by the Bulletin Board on the date of
     exercise, and the exercise or base price.
(2)  The difference between the average of the high and low bid prices per share
     of the common stock as reported by the Bulletin Board on December 31, 1999,
     $0.125, and the exercise or base price of in-the-money stock options.
(3)  As of December 31, 1999, Dr. Hirschman held options to purchase 4,100,000
     shares of common stock at $0.18 per share, 4,000,000; shares of common
     stock at $0.19 per share; 4,000,000 shares of common stock at $0.27 per
     share; and 4,000,000 shares of common stock at $0.36 per share, all of
     which are currently exercisable. In addition, Dr. Hirschman held options to
     purchase 23,000,000 shares of common stock at $0.27 per share which are
     exercisable through February 17, 2008.
(4)  As of December 31, 1999, Mr. Gallantar held options to purchase 4,547,880
     shares of common stock at $0.24255 per share, which are exercisable in
     increments of 1,515,960 on October 1, 2000, 2001 and 2002.

Employment Contracts, Termination of Employment and Change-in-Control
Arrangements

         Hirschman Employment Agreement

         Pursuant to an Amended and Restated Employment Agreement dated as of
May 12, 2000 between ADVR and Dr. Hirschman, we employ Dr. Hirschman on a full
business time basis as our President, Chief Executive Officer, Chief Scientific
Officer and Chairman of our Scientific Advisory Board, with duties including
supervising our day-to-day operations, including management of scientific,
medical, financial, regulatory and corporate matters, establishing appropriate
laboratory, executive and other facilities on our behalf, and raising additional
capital on our behalf. The agreement includes an agreement that Dr. Hirschman
will be nominated as a director for the duration of Dr. Hirschman's employment
with us under the agreement, and voting agreements regarding the election of
Messrs. Friedland, Bregman and Dr. Hirschman as directors.
See "Principal Stockholders."

         Pursuant to the agreement, the term of Dr. Hirschman's employment
continues until December 31, 2002 and will continue for one year periods
thereafter unless either we or Dr. Hirschman gives the other notice

                                       37
at least two years in advance that such one year automatic extension shall be
vitiated. If the agreement is terminated by us for cause, we may cancel all
unvested stock options, benefits under stock bonus plans and stock appreciation
rights ("SARs") granted to Dr. Hirschman. If the agreement is terminated by Dr.
Hirschman for cause, we are required to pay to Dr. Hirschman his annual salary
and employee benefits through the remainder of the then current term.

         Pursuant to the agreement, Dr. Hirschman receives an annual salary of
$361,000, payable in equal biweekly installments. The agreement also entitles
Dr. Hirschman to a major medical insurance policy, disability policy and dental
policy insurance to Dr. Hirschman and his dependents that is reasonably
acceptable to the parties, and a term life insurance policy at least in the
amount of $1,000,000, with a beneficiary to be designated by Dr. Hirschman. The
agreement further provides that we shall:

         o    take such action as may be necessary to permit Dr. Hirschman to be
              entitled to participate in stock option, stock bonus or similar
              plans (including plans for SARs) as are established by us;

         o    lease or purchase for Dr. Hirschman, at his discretion, an
              automobile selected and to be used by him, having a list price not
              in excess of $40,000, and pay for all gas, oil, repairs and
              maintenance, as well as the lease or purchase payments, as
              applicable, in connection with the automobile;

         o    reimburse Dr. Hirschman for all of his proven expenses incurred in
              and about the course of his employment that are deductible under
              the current tax law, including, among other expenses, his license
              fees, membership dues in professional organizations, subscriptions
              to professional journals, necessary travel, hotel and
              entertainment expenses incurred in connection with overnight,
              out-of- town trips that contribute to the benefit of us in the
              reasonable determination of Dr. Hirschman, and all other expenses
              that may be pre-approved by our board of directors; and

         o    provide not less than four weeks paid vacation annually and such
              paid sick or other leave as we provide to all of our employees.

         The agreement also provides for the payment of $100,000 to Dr.
Hirschman on the date an IND number is obtained from and approved by the FDA so
that human research may be conducted using Product R; or the execution of an
agreement relating to co-marketing pursuant to which one or more third parties
commit to make payments to us of at least $15 million.

         The agreement further provides that Dr. Hirschman is not authorized,
without the express written consent of the board of directors and other than in
the ordinary course of business, to pledge the credit of ADVR or any of our
other employees, to bind us, to release or discharge any debt due us unless we
have received payment in full, or to dispose (as collateral or otherwise) of all
or substantially all of our assets.

         Dr. Hirschman has agreed that he will assign to us all patents he
develops which result from his knowledge acquired while performing his duties
under the agreement, and that, if his employment under the agreement is
terminated by us "for cause" or by Dr. Hirschman otherwise than "for cause," as
specified in that agreement, he will not, directly or indirectly, compete with
us for three years after termination or solicit our employees to leave our
employ for one year after termination.

                                       38
Pursuant to the execution of the agreement, we ratified a $100,000
bonus payment made to Dr. Hirschman in February 1998 and the February 1998 grant
to Dr. Hirschman of options to acquire 23,000,000 shares of common stock
exercisable at $0.27 per share at any time through February 17, 2008 or (i) 90
days after (A) the termination of Dr. Hirschman's employment (other than for
good reason or upon the occurrence of a change in control, in which two cases
Dr. Hirschman may exercise such options until the expiration of the original
term, or (B) Dr. Hirschman is terminated for cause, or (ii) until 18 months
after death.

         Gallantar Employment Agreement

         ADVR entered into an Employment Agreement dated as of October 1, 1999
with Alan V. Gallantar, pursuant to which Mr. Gallantar is employed as our Chief
Financial Officer on a full business time basis. Under the agreement, the term
of Mr. Gallantar's employment continues until October 1, 2002. If the agreement
is terminated by us for cause, Mr. Gallantar will have no accrued right to
receive any bonus for the year in which his employment is terminated, all
unvested stock options will be cancelled, and any vested stock options will
terminate 90 days after the effective date of termination. If the agreement is
terminated by ADVR not for cause, we are required to pay to Mr. Gallantar all
accrued and unpaid compensation, and all stock options granted as of the date of
the agreement shall become 100% vested. Upon such termination not for cause, all
options which became vested as a result of this provision may be exercised by
Mr. Gallantar until 90 days after the effective date of termination. If Mr.
Gallantar elects to terminate this agreement as a result of a change in control,
he will be paid his base salary for the remaining term of the agreement, and all
stock options granted on the date of the agreement will become 100% vested and
exercisable until 90 days after the effective date of termination. If Mr.
Gallantar elects to terminate this agreement for any other reason, he will be
paid all unaccrued and unpaid base salary, and he will have the right to
exercise any vested stock until 90 days after the effective date of termination.
All payments made to Mr. Gallantar in connection with the termination of the
agreement are subject to reduction to the extent they exceed 2.99 times the
"base amount" as determined under Section 280G of the Internal Revenue Code of
1986.

         Pursuant to the agreement, Mr. Gallantar will receive an annual salary
of $175,000 for the first year of the agreement; $200,000 for the second year of
the agreement; and $225,000 for the third year of the agreement. For each year
of the agreement, Mr. Gallantar is entitled to a cash bonus of between 10% and
50% of his base salary, based on certain targets and the discretion of the board
of directors. As of the date of the agreement, Mr. Gallantar received options to
purchase an aggregate of 4,547,880 shares of our common stock. The options
expire on October 1, 2009, and are exercisable in three increments of 1,515,960
on the October 1, 2000, 2001 and 2002, respectively. The agreement further
provides that:

         o    Mr. Gallantar and his family are entitled to receive the same
              benefits generally given to other senior executives of ADVR.

         o    Mr. Gallantar is entitled to 15 working days of vacation during
              the first year and 20 days of vacation during each year
              thereafter, subject to certain exceptions.

         o    Mr. Gallantar will receive a non-accountable automobile allowance
              of $500 per month, provided however, that he is be responsible for
              all costs of acquiring and maintaining the automobile.

                                       39
o    We will reimburse Mr. Gallantar for certain professional license
              and membership fees up to a maximum of $5,000 per year in the
              aggregate, and all other expenses incurred in the performance of
              his duties with the prior approval of the Chief Executive Officer.

         o    If Mr. Gallantar relocates his primary residence to Westchester
              County, New York, or New York City prior to the second anniversary
              of the agreement, we will pay reasonable moving, legal and
              brokerage fees or costs incurred by him in connection with such
              relocation up to a maximum of $15,000.

         The agreement provides that Mr. Gallantar is not authorized, without
the express written consent of the board of directors and other than in the
ordinary course of business, to pledge the credit of ADVR, to bind us under any
note, mortgage or other monetary obligation, to release or discharge any debt
due us unless we have received payment in full, or to dispose (as collateral or
otherwise) of a substantial amount of our assets. Furthermore, Mr. Gallantar
agreed that he will assign to us all intellectual property rights developed by
him which result from the knowledge he acquired while performing his duties
under the agreement. Finally, he has agreed that he will not, directly or
indirectly, compete with us for five years after termination of his employment
or solicit our employees to leave our employ for one year after termination.

                                       40
PRINCIPAL SHAREHOLDERS

         The following table sets forth certain information regarding the
beneficial ownership of our common stock as of the date of this prospectus for
(i) each stockholder who is known by us to own beneficially more than 5% of our
common stock, (ii) each director and executive officer, and (iii) all of our
directors and named executive officers as a group. Except as otherwise
indicated, we believe, based on information furnished by the persons named in
this table that such persons have voting and investment power with respect to
all shares of common stock beneficially owned by them, subject to community
property laws, where applicable.
Shares of Common Stock
Name and Address of Beneficial Owner                            Beneficially Owned (1)           Percent Owned
------------------------------------                            ----------------------           -------------
Shalom Z. Hirschman, M.D.                                       39,100,000        (2)(3)             10.1%
c/o Advanced Viral Research Corp.
200 Corporate Boulevard South
Yonkers, New York 10701

Bernard Friedland                                               39,246,730        (3)(4)             11.3%
c/o Advanced Viral Research Corp.
1250 East Hallandale Beach Blvd.
Hallandale, FL 33009

William Bregman                                                 35,705,403        (3)(5)             10.3%
c/o Advanced Viral Research Corp.
1250 East Hallandale Beach Blvd.
Hallandale, FL 33009

Louis J. Silver                                                    100,000                            0.03%
5110 S.W. 127th Place
Miami, FL 33175

Alan V. Gallantar                                                        0                            0.0%
c/o Advanced Viral Research Corp.
200 Corporate Boulevard South
Yonkers, New York 10701

All officers & directors (5 persons)                           114,303,133        (2)                29.6%
--------------------------------
(1)  The persons named in this table have sole voting power with respect to all
     shares shown as beneficially owned by them, except as indicated in other
     footnotes to this table. In computing the number of shares beneficially
     owned by a person and the percentage ownership of that person, shares of
     common stock subject to options or warrants held by that person that are
     currently exercisable or exercisable within 60 days from the date hereof,
     are deemed outstanding. According to American Stock Transfer & Trust
     Company, the transfer agent for the common stock, 347,174,843 shares of the
     common stock were outstanding as of the close of business as of the date
     hereof.

(2)  Includes shares which may be acquired pursuant to options to purchase
     common stock exercisable within 60 days from the date hereof.

(3)  The Hirschman employment agreement provides that Messrs. Friedland and
     Bregman, during the term of Dr. Hirschman's employment under that
     agreement, shall vote all shares of the common stock owned or voted by them
     in favor of Dr. Hirschman as a director of ADVR. That agreement, however,
     does not restrict or otherwise limit their right to sell their shares to
     third parties without restriction. The Hirschman employment agreement also
     provides that Dr. Hirschman, during that term, shall take no action which
     shall preclude Messrs. Friedland and Bregman from being nominees as
     directors of ADVR and that Dr. Hirschman shall vote all shares of the
     common stock owned or voted by him in favor of Messrs. Friedland and
     Bregman as directors of ADVR. See "-- Employment Contracts, Termination of
     Employment and Change-in-Control Arrangements."

(4)  Includes 1,000,000 shares of the common stock owned by Mr. Friedland and
     Beth Friedland, his daughter, as joint tenants;) 20,000,000 shares owned by
     Mr. Friedland and Shirley Friedland, his spouse, as joint tenants; and
     500,000 shares owned the B&SD Friedland Foundation, a not-for-profit
     foundation controlled by Mr. Friedland. Does not include 15,000 shares
     owned by Shirley Friedland as to which Mr. Friedland disclaims beneficial
     ownership.

(5)  Includes 22,594,864 shares held in a trust for which Mr. Bregman is the
     sole trustee and sole beneficiary; 110,000 shares owned by Carol Bregman,
     his daughter; 113,000 shares owned by Janet Berlin, his daughter; 110,000
     shares owned by Forest Berlin, his grandson; and 110,000 shares owned by
     Jessica Berlin, his granddaughter.

                                       41
SELLING SHAREHOLDERS

         The following table sets forth certain information regarding the
beneficial ownership of the common stock as of the date of this prospectus by
each of the selling shareholders assuming the full exercise of certain warrants
and stock options. Unless otherwise indicated below, to our knowledge all
persons listed below have sole voting and investment power with respect to the
shares of common stock, except to the extent authority is shared by spouses
under applicable law. The information included below is based upon information
provided by the selling shareholders. Because the selling shareholders may offer
all, some or none of their shares, no definitive estimate as to the number of
shares that will be held by the selling shareholders after such offering can be
provided and the following table has been prepared on the assumption that all
shares offered under this prospectus will be sold.
Shares Owned                                Shares Owned
                               Position with or       Before Offering (1)(2)      Shares Being        After Offering (3)
Selling Shareholder            Relationship to ADVR         Number    %          Sold in Offering(2)    Number      %
-------------------            --------------------         ------    --         -------------------    ------      --
Shalom Z. Hirschman, MD    4   CEO, Director            39,100,000   10.22%          23,100,000       16,000,000    4.45%
Angelo Chinnicci           5   Consultant                  300,000    0.09%             300,000                0        *

Harbor View Group, Inc.   6,7a Consultant               10,076,559    2.88%           9,386,363          690,196        *
Michael A. Berman         7b   Investor                  2,025,253        *             636,363        1,388,890        *
Cardinal Color Inc.       7c   Investor                    590,909        *             590,909                0        *
Merry Contillo            7c   Investor                    477,273        *             477,273                0        *
Joseph Deglomina          7c   Investor                    477,273        *             477,273                0        *
Michael Duong             7b   Investor                    636,363        *             636,363                0        *
Joseph Feshbach           7b   Investor                  1,126,559        *             636,363          490,196        *
Gerry Goodrich            7b   Investor                    636,363        *             636,363                0        *
Bice Grobstein            7b   Investor                    522,727        *             522,727                0        *
Russell Kuhn              7d   Investor                  1,640,352        *           1,272,726          367,626        *
Byron Lassin              7e   Investor                    954,546        *             954,546                0        *
Steve Levitt              7d   Investor                  1,272,726        *           1,272,726                0        *
Frederick P. Lutz         7b   Investor                    636,363        *             636,363                0        *
Victor Sherman            7d   Investor                  1,640,352        *           1,272,726          367,626        *
Kevin Sossin              7f   Investor                    795,454        *             795,454                0        *
Wedar Biotech Corp.       7e   Investor                    954,546        *             954,546                0        *
Myron Weiner              7b   Investor                  1,003,989        *             636,363          367,626        *
John Zimmerman            7f   Investor                  1,255,012        *             795,454          459,558        *
Bratskier Public Relations     Public Relations Firm       180,000        *             180,000                0        *
                                                         ---------       ---          ---------        ---------      ---
Selling Shareholders Total                              66,302,619   16.15%          46,070,901       20,131,718    5.30%
-------------------------------
* Less than 1%

1.   As required by regulations of the Commission, the number of shares shown as
     beneficially owned include shares which can be purchased within 60 days
     from the date hereof. The actual number of shares of common stock
     beneficially owned is subject to adjustment and could be materially more or
     less than the estimated amount indicated depending upon factors which
     cannot be predicted by us at this time, including, among others, the market
     price of the common stock.

2.   Assumes the full exercise of the warrants and stock options.

3.   Assumes that all of the shares are sold by the selling shareholders and no
     additional shares of common stock are acquired.

4.   Represents options to purchase 23,000,000 at $0.27 per share, 4,100,000
     shares at $0.18 per share , 4,000,000 shares at $0.19 per share, 4,000,000
     shares at $0.27 per share, and 4,000,000 shares at $0.36 per share.

5.   Represents options to purchase 300,000 at $0.30 per share.

6.   Includes the 3,500,000 shares of common stock underlying certain warrants,
     50% of which are exerciseable at $0.21 and 50% of which are exercisable at
     $0.26 per warrant share.

7.   Includes the following number of shares of common stock underlying certain
     warrants: (a) 1,681,818 shares; (b) 181,818 shares; (c) 136,364 shares; (d)
     363,636 shares; (e) 272,728 shares; and (f) 227,272 shares, 50% of which
     are exerciseable at $0.275 and 50% of which are exercisable at $0.33 per
     warrant share.

                                       42
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         For the past three fiscal years, there were no material transactions
between Advanced Viral and any of our officers or directors which involved
$60,000 or more.

                           DESCRIPTION OF COMMON STOCK

         As of the date of this prospectus, our Certificate of Incorporation
authorize us to issue 1,000,000,000 shares of common stock, par value $0.00001
per share. As of May 23, 2000, there were outstanding 347,174,843 shares of
common stock, all of which are fully paid for and non-assessable. The holders of
common stock:

         o    have equal ratable rights to dividends from funds legally
              available therefore, when, as and if declared by our board of
              directors;

         o    entitled to share ratably in all of our assets available for
              distribution to holders of common stock upon liquidation,
              dissolution or winding up of our affairs;

         o    do not have preemptive, subscription, or conversion rights and
              there are no redemption or sinking fund provisions applicable
              thereto; and

         o    are entitled to one noncumulative vote per share on all matters
              which stockholders may vote on at all meetings of stockholders.

         American Stock Transfer & Trust Company is our transfer agent and
registrar, and is located in Brooklyn, New York.

                                 USE OF PROCEEDS

         We will not receive any proceeds from the sale of common stock by the
selling shareholders. We will receive the cash proceeds, if any, from the
exercise of any of the warrants held by the selling shareholders.

                              PLAN OF DISTRIBUTION

         Sales of the shares may be made from time to time by the selling
shareholders, or, subject to applicable law, by pledgees, donees, distributees,
transferees or other successors in interest. Such sales may be made on the OTC
Bulletin Board, in another over-the-counter market, on a national securities
exchange (any of which may involve crosses and block transactions) or other
market on which our common stock may be listed at the time of sale, including
the American Stock Exchange, in privately negotiated transactions or otherwise
or in a combination of such transactions at prices and at terms then prevailing
or at prices related to the then current market price, or at privately
negotiated prices or at fixed prices that may be changed. In addition, any
shares covered by this prospectus which qualify for sale pursuant to Section
4(l) of the Securities Act or Rule 144 promulgated thereunder may be sold under
such provisions rather than pursuant to this prospectus. We will

                                       43
also receive the cash proceeds, if any, from the exercise of any of the warrants
held by the selling shareholders. Without limiting the generality of the
foregoing, the shares may be sold in one or more of the following types of
transactions:

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

         o    purchases by a broker or dealer as principal and resale by such
              broker or dealer for its account pursuant to this prospectus;

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

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

         o    face-to-face transactions between sellers and purchasers without a
              broker-dealer. In effecting sales, brokers or dealers engaged by
              the selling shareholders may arrange for other brokers or dealers
              to participate in the resales.

         Such broker-dealers, if any, may receive compensation in the form of
discounts, concessions or commissions from the selling shareholder and/or the
purchasers of the shares of common stock for whom such broker-dealers may act as
agents or to whom they may sell as principals, or both (which compensation, as a
particular broker-dealer, might be in excess of customary commissions).

         In connection with distributions of the shares or otherwise, the
selling shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with selling shareholders. The selling shareholders may also sell shares
short and deliver the shares to close out such short positions. The selling
shareholders may also enter into option, swaps, derivatives or other
transactions with broker-dealers which require the delivery to the broker-dealer
of the shares registered hereunder, which the broker-dealer may resell pursuant
to this prospectus. The selling shareholders may also pledge the shares
registered hereunder to a broker or dealer and upon a default, the broker or
dealer may effect sales of the pledged shares pursuant to this prospectus.

         From time to time the selling shareholders may be engaged in short
sales, short sales against the box, puts and calls and other hedging
transactions in our securities, and may sell and deliver the shares in
connection with such transactions or in settlement of securities loans. These
transactions may be entered into with broker-dealers or other financial
institutions. In addition, from time to time, a selling shareholder may pledge
its shares pursuant to the margin provisions of its customer agreements with its
broker-dealer. Upon delivery of the shares or a default by a selling
shareholder, the broker-dealer or financial institution may offer and sell the
pledged shares from time to time.

         Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling shareholders in amounts to be
negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be 'underwriters' within the

                                       44
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.

         Information as to whether underwriters who may be selected by the
selling shareholders, or any other broker-dealer, is acting as principal or
agent for the selling shareholders, the compensation to be received by
underwriters who may be selected by the selling shareholders, or any
broker-dealer, acting as principal or agent for the selling shareholders and the
compensation to be received by other broker-dealers, if the compensation of such
other broker-dealers is in excess of usual and customary commissions, will, to
the extent required, be set forth in a supplement to this prospectus. Any dealer
or broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including the prospectus supplement, if any,
to any person who purchases any of the shares from or through such dealer or
broker.

         We have advised the selling shareholders that during such time as they
may be engaged in a distribution of the shares included in this prospectus they
are required to comply with Regulation M promulgated under the Exchange Act.
With certain exceptions, Regulation M precludes any selling shareholders, any
affiliated purchasers and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of the common stock.

         It is anticipated that the selling shareholders will offer all of the
shares for sale. Further, because it is possible that a significant number of
shares could be sold at the same time under this prospectus, such sales, or the
possibility of such sales, may have a depressive effect on the market price of
our common stock. None of the selling shareholders have entered into any
agreements regarding the sales of the shares being registered.

         We have agreed to bear all expenses of registration of the shares of
common stock offered by the selling shareholders for resale, other than any
commissions, discounts, concessions or other fees, if any, payable to
broker-dealers in connection with any sale of the shares of common stock, which
will be borne by the selling shareholder selling those shares or by the
purchasers of such shares.

         We have agreed to indemnify each selling shareholder or their
transferees or assignees against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribute to payments to which such
selling shareholder or its pledgees, donees, transferees or other successors in
interest may be required to make in respect thereof.

                                  LEGAL MATTERS

         The validity of the shares offered in this prospectus will be passed
upon for Advanced Viral by Berman Wolfe Rennert Vogel & Mandler, P.A.,
NationsBank Tower, 35th Floor, 100 Southeast Second Street, Miami, Florida
33131.

                                       45
EXPERTS

         The Consolidated Financial Statements of Advanced Viral Research Corp.
included in this prospectus and in the registration statement except as they
pertain to periods unaudited, have been audited by Rachlin Cohen & Holtz, LLP,
independent certified public accountants, for the periods indicated in their
report appearing elsewhere in this prospectus, and are included in this
prospectus in reliance upon the report of such firm given upon the authority of
such firm as experts in accounting and auditing.

                      [This Space Intentionally Left Blank]

                                       46
INDEX TO FINANCIAL STATEMENTS
PAGE
                                                                                ----
Consolidated Condensed Balance Sheets...........................................F-1
Consolidated Condensed Statements of Operations.................................F-2
Consolidated Condensed Statements of Stockholders' Equity.......................F-3
Consolidated Condensed Statements of Cash Flows.................................F-12
Notes to Consolidated Financial Statements......................................F-13
ADVANCED VIRAL RESEARCH CORP.
                                               (A Development Stage Company)

                                           CONSOLIDATED CONDENSED BALANCE SHEETS

                                                                                                              Condensed
                                                                                                                from
                                                                                                               Audited
                                                                                                              Financial
                                                                                                             Statements
                                                                                             March 31,      December 31,
                                                                                               2000             1999
                                                                                               ----             ----
                                                                                            (Unaudited)
ASSETS
                                        ------
Current Assets:
   Cash and cash equivalents                                                                 $  4,094,197    $    836,876
   Inventory                                                                                       19,729          19,729
   Other current assets                                                                           167,387          59,734
                                                                                             ------------    ------------
         Total current assets                                                                   4,281,313         916,339

Property and Equipment                                                                          1,673,358       1,375,923

Other Assets                                                                                      574,279         569,312
                                                                                             ------------    ------------
         Total assets                                                                        $  6,528,950    $  2,861,574
                                                                                             ============    ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
                  -------------------------------------------------
Current Liabilities:
   Accounts payable and accrued liabilities                                                  $    846,675    $    728,872
   Current portion of capital lease obligation                                                     51,416          50,315
   Current portion of note payable                                                                 19,452          19,095
                                                                                             ------------    ------------
         Total current liabilities                                                                917,543         798,282
                                                                                             ------------    ------------

Long-Term Liabilities:
   Common stock to be issued                                                                    3,000,000              --
   Convertible debenture, net                                                                      15,000       4,446,629
   Capital lease obligation - non-current portion                                                 138,785         152,059
   Note payable - non-current portion                                                              74,581          77,964
                                                                                             ------------    ------------
        Total long-term liabilities                                                             3,228,366       4,676,652
                                                                                             ------------    ------------

Commitments and Contingencies                                                                          --              --

Stockholders' Equity:
   Common stock; 1,000,000,000 shares of $.00001 par value
      authorized, 347,174,843 and 303,472,035
      shares issued and outstanding                                                                 3,471           3,034
   Additional paid-in capital                                                                  26,117,514      17,537,333
   Deficit accumulated during the development stage                                           (21,779,658)    (19,725,238)
   Discount on warrants                                                                        (1,958,286)       (428,489)
                                                                                             ------------    ------------
         Total stockholders' equity (deficiency)                                                2,383,041      (2,613,360)
                                                                                             ------------    ------------
         Total liabilities and stockholders' equity (deficiency)                             $  6,528,950    $  2,861,574
                                                                                             ============    ============
See notes to consolidated condensed financial statements.
                                       F-1
ADVANCED VIRAL RESEARCH CORP.
                                              (A Development Stage Company)

                                     CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                                                                                              Inception
                                                                Three Months Ended          (February 20,
                                                                    March 31,                  1984) to
                                                                    ---------                  March 31,
                                                              2000             1999              2000
                                                              ----             ----              ----
Revenues                                                  $       3,028    $       2,399    $     208,956
                                                          -------------    -------------    -------------

Costs and Expenses:
   Research and development                                     695,075          357,916        6,024,479
   General and administrative                                   755,423          438,403       10,314,875
   Depreciation                                                  67,760           37,107          613,983
                                                          -------------    -------------    -------------
                                                              1,518,258          833,426       16,953,337
                                                          -------------    -------------    -------------

Net Loss from Operations                                     (1,515,230)        (831,027)     (16,744,381)
                                                          -------------    -------------    -------------

Other Income (Expense):
   Interest income                                               24,963           15,809          627,004
   Other income                                                      --               --          120,093
   Interest expense                                            (564,153)         (94,578)      (5,782,374)
                                                          -------------    -------------    -------------
                                                               (539,190)         (78,769)      (5,035,277)
                                                          -------------    -------------    -------------

Net Loss                                                  $  (2,054,420)   $    (909,796)   $ (21,779,658)
                                                          =============    =============    =============

Net Loss Per Share of Common
   Stock - Basic and Diluted                              $        (.01)   $        (.00)
                                                          =============    =============

Weighted Average Number of
   Common Shares Outstanding                                313,819,774      297,577,226
                                                          =============    =============
See notes to consolidated condensed financial statements.
                                       F-2
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                       Deficit
                                                                            Common Stock                             Accumulated
                                                                  Amount    ------------               Additional    during the
                                                                   Per                                  Paid-In      Development
                                                                  Share        Shares        Amount     Capital         Stage
                                                                  -----        ------        ------     -------         -----
Balance, inception (February 20, 1984) as previously reported                      --    $   1,000    $        --    $ (1,000)

Adjustment for pooling of interests                                                --       (1,000)         1,000          --
                                                                          -----------    ---------    -----------    --------

Balance, inception, as restated                                                    --           --          1,000      (1,000)

   Net loss, period ended December 31, 1984                                        --           --             --     (17,809)
                                                                          -----------    ---------    -----------    --------

Balance, December 31, 1984                                                         --           --          1,000     (18,809)

   Issuance of common stock for cash                            $    .00  113,846,154        1,138            170          --
   Net loss, year ended December 31, 1985                                          --           --             --     (25,459)
                                                                          -----------    ---------    -----------    --------

Balance, December 31, 1985                                                113,846,154        1,138          1,170     (44,268)

   Issuance of common stock - public offering                        .01   40,000,000          400        399,600          --
   Issuance of underwriter's warrants                                              --           --            100          --
   Expenses of public offering                                                     --           --       (117,923)         --
   Issuance of common stock, exercise of "A" warrants                .03      819,860            9         24,587          --
   Net loss, year ended December 31, 1986                                          --           --             --    (159,674)
                                                                          -----------    ---------    -----------    --------

Balance, December 31, 1986                                                154,666,014        1,547        307,534    (203,942)
                                                                          -----------    ---------    -----------    --------
See notes to consolidated condensed financial statements.
                                       F-3
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                Deficit
                                                                    Common Stock                              Accumulated
                                                         Amount     ------------               Additional      during the
                                                           Per                                  Paid-In       Development
                                                          Share        Shares       Amount      Capital          Stage
                                                          -----        ------       ------      -------          -----
Balance, December 31, 1986                                         154,666,014   $     1,547   $   307,534    $  (203,942)

   Issuance of common stock, exercise of "A" warrants   $    .03    38,622,618           386     1,158,321             --
   Expenses of stock issuance                                               --            --       (11,357)            --
   Acquisition of subsidiary for cash                                       --            --       (46,000)            --
   Cancellation of debt due to stockholders                                 --            --        86,565             --
   Net loss, period ended December 31, 1987                                 --            --            --       (258,663)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1987                                         193,288,632         1,933     1,495,063       (462,605)

   Net loss, year ended December 31, 1988                                   --            --            --       (199,690)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1988                                         193,288,632         1,933     1,495,063       (662,295)

   Net loss, year ended December 31, 1989                                   --            --            --       (270,753)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1989                                         193,288,632         1,933     1,495,063       (933,048)

   Issuance of common stock, expiration of redemption
      offer on "B" warrants                                  .05     6,729,850            67       336,475             --
   Issuance of common stock, exercise of "B" warrants        .05       268,500             3        13,422             --
   Issuance of common stock, exercise of "C" warrants        .08        12,900            --         1,032             --
   Net loss, year ended December 31, 1990                                   --            --            --       (267,867)
                                                                   -----------   -----------   -----------    -----------

Balance, December 31, 1990                                         200,299,882         2,003     1,845,992     (1,200,915)
                                                                   -----------   -----------   -----------    -----------
See notes to consolidated condensed financial statements.
                                       F-4
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                          Deficit
                                                                              Common Stock                              Accumulated
                                                                   Amount     ------------              Additional      during the
                                                                    Per                                  Paid-In        Development
                                                                   Share     Shares        Amount        Capital            Stage
                                                                   -----     ------        ------        -------            -----
Balance, December 31, 1990                                                  200,299,882   $   2,003   $  1,845,992    $ (1,200,915)

   Issuance of common stock, exercise of "B" warrants            $   .05         11,400          --            420              --
   Issuance of common stock, exercise of "C" warrants                .08          2,500          --            200              --
   Issuance of common stock, exercise of underwriters warrants      .012      3,760,000          38         45,083              --
   Net loss, year ended December 31, 1991                                            --          --             --        (249,871)
                                                                           ------------   ---------   ------------    ------------

Balance, December 31, 1991                                                  204,073,782       2,041      1,891,695      (1,450,786)

   Issuance of common stock, for testing                           .0405     10,000,000         100        404,900              --
   Issuance of common stock, for consulting services                .055        500,000           5         27,495              --
   Issuance of common stock, exercise of "B" warrants                .05      7,458,989          75        372,875              --
   Issuance of common stock, exercise of "C" warrants                .08      5,244,220          52        419,487              --
   Expenses of stock issuance                                                                               (7,792)
   Net loss, year ended December 31, 1992                                            --          --             --        (839,981)
                                                                           ------------   ---------   ------------    ------------

Balance, December 31, 1992                                                  227,276,991       2,273      3,108,660      (2,290,767)

   Issuance of common stock, for consulting services                .055        500,000           5         27,495              --
   Issuance of common stock, for consulting services                 .03      3,500,000          35        104,965              --
   Issuance of common stock, for testing                            .035      5,000,000          50        174,950              --
   Net loss, year ended December 31, 1993                                            --          --             --        (563,309)
                                                                           ------------   ---------   ------------    ------------

Balance, December 31, 1993                                                  236,276,991       2,363      3,416,070      (2,854,076)
                                                                           ------------   ---------   ------------    ------------
See notes to consolidated condensed financial statements.
                                       F-5
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                  Common Stock
                                                      Amount      ------------           Additional
                                                        Per                                Paid-In      Subscription
                                                       Share       Shares       Amount     Capital       Receivable
                                                       -----       ------       ------     -------       ----------
Balance, December 31, 1993                                      236,276,991   $   2,363 $  3,416,070   $       --

   Issuance of common stock, for consulting services   $  .05     4,750,000          47      237,453           --
   Issuance of common stock, exercise of options          .08       400,000           4       31,996           --
   Issuance of common stock, exercise of options          .10       190,000           2       18,998           --
   Net loss, year ended December 31, 1994                                --          --           --           --
                                                                -----------   ---------  -----------   ----------

Balance, December 31, 1994                                      241,616,991       2,416    3,704,517           --

   Issuance of common stock, exercise of options          .05     3,333,333          33      166,633           --
   Issuance of common stock, exercise of options          .08     2,092,850          21      167,407           --
   Issuance of common stock, exercise of options          .10     2,688,600          27      268,833           --
   Issuance of common stock, for consulting services      .11     1,150,000          12      126,488           --
   Issuance of common stock, for consulting services      .14       300,000           3       41,997           --
   Net loss, year ended December 31, 1995                                --          --           --           --
                                                                -----------   ---------  -----------   ----------

Balance, December 31, 1995                                      251,181,774       2,512    4,475,875           --
                                                                -----------   ---------  -----------   ----------

(RESTUBBED TABLE)
                                                                         Deficit
                                                                      Accumulated
                                                                      during the      Deferred
                                                                      Development   Compensation
                                                                         Stage          Cost
                                                                         -----          ----
Balance, December 31, 1993                                           $ (2,854,076)        $--

   Issuance of common stock, for consulting services                           --          --
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, exercise of options                               --          --
   Net loss, year ended December 31, 1994                                (440,837)         --
                                                                     ------------     -------

Balance, December 31, 1994                                             (3,294,913)         --
                                                                                          ---
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, exercise of options                               --          --
   Issuance of common stock, for consulting services                           --          --
   Issuance of common stock, for consulting services                           --          --
   Net loss, year ended December 31, 1995                                (401,884)         --
                                                                     ------------     -------

Balance, December 31, 1995                                             (3,696,797)         --
                                                                     ------------     -------
See notes to consolidated condensed financial statements.
                                       F-6
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                 Common Stock
                                                        Amount   ------------              Additional
                                                          Per                               Paid-In        Subscription
                                                         Share      Shares      Amount      Capital         Receivable
                                                         -----      ------      ------      -------         ----------
Balance, December 31, 1995                                      251,181,774   $    2,512   $  4,475,875    $         --

   Issuance of common stock, exercise of options     $   .05      3,333,334           33        166,634              --
   Issuance of common stock, exercise of options         .08      1,158,850           12         92,696              --
   Issuance of common stock, exercise of options         .10      7,163,600           72        716,288              --
   Issuance of common stock, exercise of options         .11        170,000            2         18,698              --
   Issuance of common stock, exercise of options         .12      1,300,000           13        155,987              --
   Issuance of common stock, exercise of options         .18      1,400,000           14        251,986              --
   Issuance of common stock, exercise of options         .19        500,000            5         94,995              --
   Issuance of common stock, exercise of options         .20        473,500            5         94,695              --
   Issuance of common stock, for services rendered       .50        350,000            3        174,997              --
   Options granted                                                       --           --        760,500              --
   Subscription receivable                                               --           --             --         (19,000)
   Net loss, year ended December 31, 1996                                --           --             --              --
                                                                -----------   ----------   ------------    ------------

Balance, December 31, 1996                                      267,031,058        2,671      7,003,351         (19,000)
                                                                -----------   ----------   ------------    ------------

(RESTUBBED TABLE)
                                                                          Deficit
                                                                        Accumulated
                                                                        during the        Deferred
                                                                        Development     Compensation
                                                                           Stage            Cost
                                                                           -----            ----
Balance, December 31, 1995                                               $ (3,696,797)   $     --

   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, exercise of options                                   --          --
   Issuance of common stock, for services rendered                                 --          --
   Options granted                                                                 --    (473,159)
   Subscription receivable                                                         --          --
   Net loss, year ended December 31, 1996                                  (1,154,740)         --
                                                                         ------------   ---------

Balance, December 31, 1996                                                 (4,851,537)   (473,159)
                                                                         ------------   ---------
See notes to consolidated condensed financial statements.
                                       F-7
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                   Common Stock
                                                         Amount    ------------               Additional
                                                           Per                                 Paid-In         Subscription
                                                          Share     Shares       Amount        Capital          Receivable
                                                          -----     ------       ------        -------          ----------
Balance, December 31, 1996                                       267,031,058   $      2,671   $  7,003,351    $    (19,000)

   Issuance of common stock, exercise of options       $     .08   3,333,333             33        247,633              --
   Issuance of common stock, conversion of debt              .20   1,648,352             16        329,984              --
   Issuance of common stock, conversion of debt              .15     894,526              9        133,991              --
   Issuance of common stock, conversion of debt              .12   2,323,580             23        269,977              --
   Issuance of common stock, conversion of debt              .15   1,809,524             18        265,982              --
   Issuance of common stock, conversion of debt              .16     772,201              8        119,992              --
   Issuance of common stock, for services rendered           .41      50,000             --         20,500              --
   Issuance of common stock, for services rendered           .24     100,000              1         23,999              --
   Beneficial conversion feature, February debenture                      --             --        413,793              --
   Beneficial conversion feature, October debenture                       --             --      1,350,000              --
   Warrant costs, February debenture                                      --             --         37,242              --
   Warrant costs, October debenture                                       --             --        291,555              --
   Amortization of deferred compensation cost                             --             --             --              --
   Imputed interest on convertible debenture                              --             --          4,768              --
   Net loss, year ended December 31, 1997                                 --             --             --              --
                                                                 -----------   ------------   ------------    ------------

Balance, December 31, 1997                                       277,962,574          2,779     10,512,767         (19,000)
                                                                 -----------   ------------   ------------    ------------

(RESTUBBED TABLE)
                                                                     Deficit
                                                                   Accumulated
                                                                    during the        Deferred
                                                                    Development    Compensation
                                                                      Stage             Cost
                                                                      -----             ----
Balance, December 31, 1996                                          $ (4,851,537)   $ (473,159)

   Issuance of common stock, exercise of options                              --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, conversion of debt                               --            --
   Issuance of common stock, for services rendered                            --            --
   Issuance of common stock, for services rendered                            --            --
   Beneficial conversion feature, February debenture                          --            --
   Beneficial conversion feature, October debenture                           --            --
   Warrant costs, February debenture                                          --            --
   Warrant costs, October debenture                                           --            --
   Amortization of deferred compensation cost                                 --       399,322
   Imputed interest on convertible debenture                                  --            --
   Net loss, year ended December 31, 1997                             (4,141,729)           --
                                                                    ------------    ----------

Balance, December 31, 1997                                            (8,993,266)      (73,837)
                                                                    ------------    ----------
See notes to consolidated condensed financial statements.
                                       F-8
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                 Common Stock
                                                       Amount    ------------              Additional
                                                         Per                                Paid-In       Subscription
                                                        Share     Shares       Amount       Capital        Receivable
                                                        -----     ------       ------       -------        ----------
Balance, December 31, 1997                                       277,962,574   $  2,779    $ 10,512,767    $  (19,000)

   Issuance of common stock, exercise of options       $   .12       295,000          3          35,397            --
   Issuance of common stock, exercise of options           .14       500,000          5          69,995            --
   Issuance of common stock, exercise of options           .16       450,000          5          71,995            --
   Issuance of common stock, exercise of options           .20        10,000         --           2,000            --
   Issuance of common stock, exercise of options           .26       300,000          3          77,997            --
   Issuance of common stock, conversion of debt            .13     1,017,011         10         132,990            --
   Issuance of common stock, conversion of debt            .14     2,512,887         25         341,225            --
   Issuance of common stock, conversion of debt            .15     5,114,218         51         749,949            --
   Issuance of common stock, conversion of debt            .18     1,491,485         15         274,985            --
   Issuance of common stock, conversion of debt            .19     3,299,979         33         619,967            --
   Issuance of common stock, conversion of debt            .22     1,498,884         15         335,735            --
   Issuance of common stock, conversion of debt            .23     1,870,869         19         424,981            --
   Issuance of common stock, for services rendered         .21       100,000          1          20,999            --
   Beneficial conversion feature, November debenture                                            625,000
   Warrant costs, November debenture                                                             48,094
   Amortization of deferred compensation cost                             --         --              --            --
   Write off of subscription receivable                                   --         --         (19,000)       19,000
   Net loss, year ended December 31, 1998                                 --         --              --            --
                                                                 -----------   --------    ------------    ----------

Balance, December 31, 1998                                       296,422,907      2,964      14,325,076            --
                                                                 -----------   --------    ------------    ----------

(RESTUBBED TABLE)
                                                                      Deficit
                                                                    Accumulated
                                                                    during the      Deferred
                                                                    Development   Compensation
                                                                       Stage          Cost
                                                                       -----          ----
Balance, December 31, 1997                                         $ (8,993,266)   $ (73,837)

   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, exercise of options                             --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, conversion of debt                              --           --
   Issuance of common stock, for services rendered                           --           --
   Beneficial conversion feature, November debenture                         --           --
   Warrant costs, November debenture                                         --           --
   Amortization of deferred compensation cost                                --       59,068
   Write off of subscription receivable                                      --           --
   Net loss, year ended December 31, 1998                            (4,557,710)          --
                                                                   ------------    ---------

Balance, December 31, 1998                                          (13,550,976)     (14,769)
                                                                   ------------    ---------
See notes to consolidated condensed financial statements.
                                       F-9
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                                                          Deficit
                                                                                Common Stock                            Accumulated
                                                                    Amount      ------------              Additional    during the
                                                                      Per                                  Paid-In      Development
                                                                     Share       Shares       Amount       Capital         Stage
                                                                     -----       ------       ------       -------         -----
Balance, December 31, 1998                                                   296,422,907   $   2,964   $ 14,325,076    $(13,550,976)

   Issuance of common stock, securities purchase agreement           $  .16    4,917,276          49        802,451              --
   Issuance of common stock, securities purchase agreement              .27    1,851,852          18        499,982              --
   Issuance of common stock, for services rendered                      .22      100,000           1         21,999              --
   Issuance of common stock, for services rendered                      .25      180,000           2         44,998              --
   Beneficial conversion feature, August debenture                                    --          --        687,500              --
   Beneficial conversion feature, December debenture                                  --          --        357,143              --
   Warrant costs, securities purchase agreement                                       --          --        494,138              --
   Warrant costs, securities purchase agreement                                       --          --         37,025              --
   Warrant costs, August debenture                                                    --          --         52,592              --
   Warrant costs, December debenture                                                  --          --          4,285              --
   Amortization of warrant costs, securities purchase agreement                       --          --             --              --
   Amortization of deferred compensation cost                                         --          --             --              --
   Compensation expense related to modification of existing options                   --          --        210,144              --
   Net loss, year ended December 31, 1999                                             --          --             --      (6,174,262)
                                                                             -----------   ---------   ------------    ------------

Balance, December 31, 1999                                                   303,472,035       3,034   $ 17,537,333    $(19,725,238)
                                                                             ===========   =========   ============    ============

(RESTUBBED TABLE)

                                                                                   Deferred      Discount
                                                                                 Compensation       on
                                                                                     Cost        Warrants
                                                                                     ----        --------
Balance, December 31, 1998                                                       $    (14,769)   $      --

   Issuance of common stock, securities purchase agreement                                 --           --
   Issuance of common stock, securities purchase agreement                                 --           --
   Issuance of common stock, for services rendered                                         --           --
   Issuance of common stock, for services rendered                                         --           --
   Beneficial conversion feature, August debenture                                         --           --
   Beneficial conversion feature, December debenture                                       --           --
   Warrant costs, securities purchase agreement                                            --     (494,138)
   Warrant costs, securities purchase agreement                                            --      (37,025)
   Warrant costs, August debenture                                                         --           --
   Warrant costs, December debenture                                                       --           --
   Amortization of warrant costs, securities purchase agreement                            --      102,674
   Amortization of deferred compensation cost                                          14,769           --
   Compensation expense related to modification of existing options                        --           --
   Net loss, year ended December 31, 1999                                                  --           --
                                                                                 ------------   ----------

Balance, December 31, 1999                                                       $         --    $(428,489)
                                                                                 ============   ==========
See notes to consolidated condensed financial statements.
                                      F-10
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (Continued)

                 INCEPTION (FEBRUARY 20, 1984) TO MARCH 31, 2000

                                                                                Common Stock
                                                                  Amount        ------------             Additional
                                                                    Per                                   Paid-In
                                                                   Share        Shares       Amount       Capital
                                                                   -----        ------       ------       -------
Balance, December 31, 1999                                                    303,472,035   $   3,034   $ 17,537,333

   Issuance of common stock, exercise of options                   $  .14         600,000           6         83,994
   Issuance of common stock, exercise of options                      .15       1,600,000          16        239,984
   Issuance of common stock, exercise of options                      .16         500,000           5         79,995
   Issuance of common stock, exercise of options                      .21         792,500           8        166,417
   Issuance of common stock, exercise of options                      .36          60,000           1         21,599
   Issuance of common stock, exercise of warrants                     .20         122,549           1         24,999
   Issuance of common stock, exercise of warrants                     .24         122,549           1         29,999
   Issuance of common stock, exercise of warrants                     .25       1,000,000          10        246,090
   Issuance of common stock, conversion of debt                       .14      35,467,682         355      4,907,146
   Issuance of common stock, conversion of debt                       .19       1,036,674          10        199,990
   Issuance of common stock, conversion of debt                       .20       1,887,500          19        377,481
   Issuance of common stock, cashless exercise of warrants                        513,354           5        305,754
   Cashless exercise of warrants                                                       --          --       (305,759)
   Beneficial conversion feature, January debenture                                    --          --        386,909
   Warrant costs, consulting agreement                                                 --          --        200,249
   Warrant costs, January debenture                                                    --          --         13,600
   Warrant costs, private placement                                                    --          --      1,582,734
   Recovery of subscription receivable previously written off                          --          --         19,000
   Amortization of warrant costs, securities purchase agreements                       --          --             --
   Net loss, three months ended March 31, 2000                                         --          --             --
                                                                              -----------   ---------   ------------

Balance, March 31, 2000                                                       347,174,843   $   3,471   $ 26,117,514
                                                                              ===========   =========   ============

(RESTUBBED TABLE)
                                                                              Deficit
                                                                            Accumulated
                                                                            during the        Discount
                                                                            Development          on
                                                                               Stage          Warrants
                                                                               -----          --------
Balance, December 31, 1999                                                  $(19,725,238)   $  (428,489)

   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of options                                      --             --
   Issuance of common stock, exercise of warrants                                     --             --
   Issuance of common stock, exercise of warrants                                     --             --
   Issuance of common stock, exercise of warrants
   Issuance of common stock, conversion of debt                                       --             --
   Issuance of common stock, conversion of debt                                       --             --
   Issuance of common stock, conversion of debt                                       --             --
   Issuance of common stock, cashless exercise of warrants                            --             --
   Cashless exercise of warrants                                                      --             --
   Beneficial conversion feature, January debenture                                   --             --
   Warrant costs, consulting agreement                                                --             --
   Warrant costs, January debenture                                                   --             --
   Warrant costs, private placement                                                   --     (1,582,734)
   Recovery of subscription receivable previously written off                         --             --
   Amortization of warrant costs, securities purchase agreements                      --         52,937
   Net loss, three months ended March 31, 2000                                (2,054,420)            --
                                                                            ------------    -----------

Balance, March 31, 2000                                                     $(21,779,658)   $(1,958,286)
                                                                            ============    ===========
See notes to consolidated condensed financial statements.
                                      F-11
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                                                                                        Inception
                                                                          Three Months Ended          (February 20,
                                                                               March 31,                1984) to
                                                                         --------------------           March 31,
                                                                         2000            1999             2000
                                                                         ----            ----             ----
Cash Flows from Operating Activities:
   Net loss                                                          $ (2,054,420)   $   (909,796)   $(21,779,658)
                                                                     ------------    ------------    ------------
   Adjustments to reconcile net loss to
      net cash used by operating activities:
         Depreciation                                                      67,760          37,107         613,893
         Amortization of debt issue costs                                 106,030          26,250         779,215
         Amortization of deferred interest cost on beneficial
            conversion feature of convertible debenture                   386,909              --       3,820,270
         Amortization of discount on warrants                             119,908          36,730         558,467
         Amortization of deferred compensation cost                            --          14,769         760,500
         Issuance of common stock for services                                 --              --       1,504,500
         Compensation expense related to modification of
            existing options                                                   --              --         210,144
         Realization of prepaid consulting fees                           111,545              --         111,545
         Other                                                                 --              --          (1,607)
         Changes in Operating Assets and Liabilities:
            Increase in inventory                                              --              --         (19,729)
            Increase in other current assets                              (18,953)        (11,456)        (78,688)
            Increase in other assets                                       (4,967)        (43,680)     (1,221,925)
            Increase (decrease) in accounts payable and
               accrued liabilities                                        117,803         (41,086)        852,875
                                                                     ------------    ------------    ------------
                  Total adjustments                                       886,035          18,634       7,889,460
                                                                     ------------    ------------    ------------
                  Net cash used by operating activities                (1,168,385)       (891,162)    (13,890,198)
                                                                     ------------    ------------    ------------

Cash Flows from Investing Activities:
   Purchase of investments                                                     --              --      (6,292,979)
   Proceeds from sale of investments                                           --         821,047       6,292,979
   Expenditures for property and equipment                               (365,195)        (53,484)     (1,915,945)
   Proceeds from sale of property and equipment                                --              --           1,200
                                                                     ------------    ------------    ------------
                  Net cash provided (used) by investing activities       (365,195)        767,563      (1,914,745)
                                                                     ------------    ------------    ------------

Cash Flows from Financing Activities:
   Proceeds from issuance of convertible debt                           1,000,000              --       9,500,000
   Proceeds from deposit on securities purchase agreement                      --              --         600,000
   Proceeds from deposit on common stock to be issued,
      private placement                                                 3,000,000              --       3,000,000
   Proceeds from sale of securities, net of issuance costs                787,100         202,500       6,868,188
   Payments under capital lease                                           (12,173)        (12,418)        (70,761)
   Payments on note payable                                                (3,026)             --         (17,287)
   Recovery of subscription receivable written off                         19,000              --          19,000
                                                                     ------------    ------------    ------------
                  Net cash provided by financing activities             4,790,901         190,082      19,899,140
                                                                     ------------    ------------    ------------

Net Increase in Cash and Cash Equivalents                               3,257,321          66,483       4,094,197

Cash and Cash Equivalents, Beginning                                      836,876         924,420              --
                                                                     ------------    ------------    ------------

Cash and Cash Equivalents, Ending                                    $  4,094,197    $    990,903    $  4,094,197
                                                                     ============    ============    ============
See notes to consolidated condensed financial statements.
                                      F-12
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1.  BASIS OF PRESENTATION

             The accompanying unaudited consolidated condensed financial
             statements at March 31, 2000 have been prepared in accordance with
             generally accepted accounting principles for interim financial
             information and with the instructions to Form 10-Q and reflect all
             adjustments which, in the opinion of management, are necessary for
             a fair presentation of financial position as of March 31, 2000 and
             results of operations and cash flows for the three months ended
             March 31, 2000 and 1999. All such adjustments are of a normal
             recurring nature. The results of operations for interim periods are
             not necessarily indicative of the results to be expected for a full
             year. Certain amounts in the 1999 financial statements have been
             reclassified to conform to 2000 presentation. The statements should
             be read in conjunction with the consolidated financial statements
             and footnotes thereto included in the Company's Annual Report on
             Form 10-K for the year ended December 31, 1999.

NOTE 2.  COMMITMENTS AND CONTINGENCIES

         Going Concern

             The accompanying unaudited consolidated condensed financial
             statements at March 31, 2000 have been prepared in conformity with
             generally accepted accounting principles which contemplate the
             continuance of the Company as a going concern. The Company has
             suffered losses from operations during its operating history. The
             Company is dependent upon registration of Product R for sale before
             it can begin commercial operations. The Company's cash position may
             be inadequate to pay all the costs associated with the full range
             of testing and clinical trials required by the FDA. Unless and
             until Product R is approved for sale in the United States or
             another industrially developed country, the Company may be
             dependent upon the continued sale of its securities and debt
             financing for funds to meet its cash requirements. Management
             intends to continue to sell the Company's securities in an attempt
             to mitigate the effects of its cash position; however, no assurance
             can be given that equity or debt financing, if and when required,
             will be available. In the event that such equity or debt financing
             is not available, in order to continue operations, management
             anticipates that they will have to defer their salaries. During
             2000 and 1999, the Company obtained equity and debt financing and
             may seek additional financing as the need arises. No assurance can
             be given that the Company will be able to sustain its operations
             until FDA approval is granted or that any approval will ever be
             granted. These factors raise substantial doubt about the Company's
             ability to continue as a going concern. The Company expects to
             submit an application for approval with the FDA in the near future.
             The consolidated condensed financial statements do not include any
             adjustments relating to the recoverability and classification of
             recorded assets and classification of liabilities that might be
             necessary should the Company be unable to continue in existence.

         Potential Claim for Royalties

             The Company may be subject to claims from certain third parties for
             royalties due on sale of Product R. The Company has not as yet
             received any notice of claim from such parties.

                                       F-13
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         Product Liability

             The Company could be subjected to claims for adverse reactions
             resulting from the use of Product R. Although the Company is
             unaware of any such claims or threatened claims since Product R was
             initially marketed in the 1940's, one study noted adverse reactions
             from highly concentrated doses in guinea pigs. In the event any
             claims for substantial amounts were successful, they could have a
             material adverse effect on the Company's financial condition and on
             the marketability of Product R. As of the date hereof, the Company
             does not have product liability insurance for Product R. There can
             be no assurance that the Company will be able to secure such
             insurance in adequate amounts, at reasonable premiums if it
             determined to do so. Should the Company be unable to secure such
             product liability insurance, the risk of loss to the Company in the
             event of claims would be greatly increased and could have a
             material adverse effect on the Company.

         Lack of Patent Protection

             The Company has three issued patents and one allowed patent for the
             use of Product R. The Company currently has 15 patent applications
             pending with the U.S. Patent Office and 17 foreign patent
             applications. The Company can give no assurance that other
             companies, having greater economic resources, will not be
             successful in developing a similar product. There can be no
             assurance that such patents, if obtained, will be enforceable.

         TESTING AGREEMENTS

         Plata Partners Limited Partnership

             On March 20, 1992, the Company entered into an agreement with Plata
             Partners Limited Partnership ("Plata") pursuant to which Plata
             agreed to perform a demonstration in the Dominican Republic in
             accordance with a certain agreed upon protocol (the "Protocol") to
             assess the efficacy of a treatment using Product R incorporated in
             the Protocol against AIDS (the "Plata Agreement"). Plata covered
             all costs and expenses associated with the demonstration.

             Pursuant to the Plata Agreement, the Company authorized the
             issuance to Plata of 5,000,000 shares of common stock and options
             to purchase an additional 5,000,000 shares at $.08 per share
             through July 9, 1994 (the "Plata Options") and 5,000,000 shares at
             $.10 per share through July 9, 1994 (the "Additional Plata
             Options"). Pursuant to several amendments, the Plata Options and
             the Additional Plata Options are exercisable through June 30, 2000
             at an exercise price of $.15 and $.17, respectively. The fair value
             of these options are estimated to be $32,925 ($.0348 per option
             share) based upon a financial analysis of the terms of the options
             using the Black-Sholes Pricing Model with the following
             assumptions: expected volatility of 20%; risk free interest rate of
             6%. This amount has been charged to compensation expense at
             December 31, 1999 as it related to services previously provided. As

                                       F-14
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         TESTING AGREEMENTS (Continued)

         Plata Partners Limited Partnership

             of March 31, 2000, there are outstanding Plata Options to acquire
             83,300 shares at $.15 per share and Additional Plata Options to
             acquire 108,100 shares at an exercise price of $.17 per share.
             Through March 31, 2000, the Company has received approximately
             $1,422,000 pursuant to the issuance of approximately 9.8 million
             shares in connection with the exercise of the Plata Options and the
             Additional Plata Options.

         Argentine Agreement

             In April 1996, the Company entered into an agreement (the
             "Argentine Agreement") with DCT SRL, an Argentine corporation
             unaffiliated with the Company ("DCT") pursuant to which DCT was to
             cause a clinical trial to be conducted in two separate hospitals
             located in Buenos Aires, Argentina (the "Clinical Trials").
             Pursuant to the Argentine Agreement, the Clinical Trials were to be
             conducted pursuant to a protocol developed by Juan Carlos Flichman,
             M.D. and the purpose of the Clinical Trials was to assess the
             efficacy of the Company's drug Product R on the Human Papilloma
             Virus (HPV). The protocol calls for, among other things, a study to
             be performed with clinical and laboratory follow-up on 12 male and
             female human patients between the ages of 18 and 50.

             Pursuant to the Argentine Agreement, the Company delivered $34,000
             to DCT to cover out-of-pocket expenses associated with the Clinical
             Trials. The Argentine Agreement further provides that at the
             conclusion of the Clinical Trials, DCT shall cause Dr. Flichman to
             prepare and deliver a written report to the Company regarding the
             methodology and results of the Clinical Trials (the "Written
             Report"). In September 1996, the Written Report was delivered by
             Dr. Flichman to the Company. Upon delivery of the Written Report to
             the Company, the Company delivered to the principals of DCT options
             to acquire 2,000,000 shares of the Company's common stock for a
             period of one year from the date of the delivery of the Written
             Report, at a purchase price of $.20 per share. Pursuant to several
             amendments, the DCT options are exercisable through June 30, 2000
             at an exercise price of $.21 per share. The fair value of these
             options are estimated to be $1,788 ($.0012 per option share) based
             on the following assumptions: expected volatility of 20%; risk free
             interest rate of 6%. This amount has been charged to compensation
             expense at December 31, 1999 as it related to services previously
             provided. As of March 31, 2000, 1,266,000 shares of common stock
             were issued pursuant to the exercise of these options for an
             aggregate exercise price of approximately $261,425.

             In June 1994, DCT SRL and the Company entered into an exclusive
             distribution agreement whereby the Company granted to DCT, subject
             to certain conditions, the exclusive right to market and sell
             Product R in Argentina, Bolivia, Paraguay, Uruguay, Brazil, and
             Chile (the "DCT Exclusive Distribution Agreement").

                                      F-15
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         TESTING AGREEMENTS (Continued)

         Argentine Agreement (Continued)

             In April 1996, the Company entered into an agreement with DCT (the
             HIV-HPV Agreement") whereby the Company agreed to provide to DCT or
             its assignees, up to $600,000 to cover the costs of a double blind
             placebo controlled study in approximately 150 patients to assess
             the efficacy of Product R for the treatment of persons diagnosed
             with the HIV virus (AIDS) and HPV (the "HIV-HPV Study").
             Subsequently, the Company has agreed to advance additional funds
             towards such study. In connection with the HIV-HPV Agreement, the
             Company advanced approximately $665,000 which is accounted for as
             research and development expense. The amounts have been used to
             cover expenses associated with clinical activities of the HIV-HPV
             Study.

             The HIV-HPV Agreement provides that (i) in the event the date from
             the HIV-HPV Study is used in connection with Product R being
             approved for commercial sale anywhere within the territory granted
             under the DCT Exclusive Distribution Agreement or (ii) DCT receives
             financing to cover the costs of the HIV-HPV Study, then DCT is
             obligated to reimburse the Company for all amounts expended in
             connection with the HIV-HPV Study.

             In October 1997, the Company entered into two agreements with DCT,
             whereby the Company agreed to provide DCT or its assignees, up to
             $220,000 and $341,000 to cover the costs of double blind placebo
             controlled studies in approximately 360 and 240 patients,
             respectively to assess the efficacy of the topical application of
             Product R for the treatment of persons diagnosed with Herpes
             Labialis/Genital Infections (the "Herpes Study") and HPV (the "HPV
             Topical Study").

             In connection with the Herpes Study and the HPV Topical Study
             (collectively, the "Studies"), the Company has advanced
             approximately $58,000 and $132,000, respectively. Such expenses are
             accounted for as research and development expense. The amounts
             expended have been used to cover expenses associated with
             pre-clinical activities. Neither the Herpes Study nor the HPV
             Topical Study has commenced.

             Both Agreements with DCT provide that (i) in the event the data
             from the Studies are used in connection with Product R being
             approved for commercial sale anywhere within the territory granted
             under the DCT Exclusive Distribution Agreement or (ii), DCT
             receives financing to cover the costs of the Studies, then DCT is
             obligated to reimburse the Company for all amounts expended in
             connection with the Studies.

             In February 1998, the Company entered into an agreement with DCT
             (the "Concurrent Agreement") whereby the Company agreed to provide
             DCT or its assignees, up to $413,000 to cover the costs of a study
             in 65 patients to compare the results of treatment of patients with
             AIDS taking a three drug cocktail and Product R with those taking a
             three drug cocktail and a

                                      F-16
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         TESTING AGREEMENTS (Continued)

         Argentine Agreement (Continued)

             placebo. As of March 31, 2000, the Company has advanced
             approximately $50,000 for such study which has been accounted for
             as research and development expense.

             In May 1998, the Company entered into an agreement with DCT (the
             "Rheumatoid Arthritis Agreement") whereby the Company agreed to
             provide DCT or its assignees, up to $95,000 to cover the costs of a
             controlled study in 30 patients to determine the efficacy of
             Product R for the treatment of rheumatoid arthritis in humans. In
             connection with this study, the Company has advanced approximately
             $85,000 which has been accounted for as research and development
             expense.

             In July 1998, the Company authorized expenditures of up to $90,000
             to study the effects of Product R in inhibiting the mutation of the
             AIDS virus. As of March 31, 2000, the Company has advanced
             approximately $50,000 for such study which has been accounted for
             as research and development expense.

             As of March 31, 2000, the Company advanced approximately $281,000
             for expenses in connection with the drug approval process in
             Argentina.

         Barbados Study

             A double blind study assessing the efficacy of the Company's drug
             Product R in 43 human patients diagnosed with HIV (AIDS) has been
             conducted at the Queen Elizabeth Hospital, Bridgetown, Barbados
             (the "Barbados Study"). As of March 31, 2000, the Company has
             expended approximately $390,000 to cover the costs of the Barbados
             Study.

             In July 1998, the Company authorized expenditures of up to $45,000
             to study the effects of Product R in inhibiting the mutation of the
             AIDS virus. As of March 31, 2000, the Company has advanced
             approximately $15,000 for such study which has been accounted for
             as research and development expense.

                                      F-17
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS

         Hirschman Agreement

             In May 1995, the Company entered into a consulting agreement with
             Shalom Hirschman, M.D., Professor of Medicine of Mt. Sinai School
             of Medicine, New York, New York and Director of Mt. Sinai's
             Division of Infectious Diseases, whereby Dr. Hirschman was to
             provide consulting services to the Company through May 1997. The
             consulting services included the development and location of
             pharmacological and biotechnology companies and assisting the
             Company in seeking joint ventures with and financing of companies
             in such industries.

             In connection with the consulting agreement, the Company issued to
             Dr. Hirschman 1,000,000 shares of the Company's common stock and
             the option to acquire 5,000,000 shares of the Company's common
             stock for a period of three years as per the vesting schedule as
             referred to in the agreement, at a purchase price of $.18 per
             share. As of March 31, 2000, 900,000 shares have been issued upon
             exercise of these options for cash consideration of $162,000 under
             this Agreement.

             In March 1996, the Company entered into an addendum to the
             consulting agreement with Dr. Hirschman whereby Dr. Hirschman
             agreed to provide consulting services to the Company through May
             2000 (the "Addendum"). Pursuant to the Addendum, the Company
             granted to Dr. Hirschman and his designees options to purchase an
             aggregate of 15,000,000 shares of the Company's common stock for a
             three year period pursuant to the following schedule: (i) options
             to purchase 5,000,000 shares exercisable at any time and from time
             to time commencing March 24, 1996 and ending March 23, 2009 at an
             exercise price of $.19 per share, of which options to acquire
             500,000 shares (exercisable until March 23, 2001) were assigned by
             Dr. Hirschman to Richard Rubin, consultant to Dr. Hirschman; (ii)
             options to purchase 5,000,000 shares exercisable at any time and
             from time to time commencing March 24, 1997 and ending March 23,
             2009 at an exercise price of $.27 per share, of which options to
             acquire 500,000 shares (exercisable until March 23, 2001) were
             assigned by Dr. Hirschman to Richard Rubin, consultant to Dr.
             Hirschman; and (iii) options to purchase 5,000,000 shares
             exercisable at any time and from time to time commencing March 24,
             1998 and ending March 23, 2009 at an exercise price of $.36 per
             share, of which options to acquire 500,000 shares (exercisable
             until March 23, 2001) were assigned by Dr. Hirschman to Richard
             Rubin, consultant to Dr. Hirschman. In addition, the Company has
             agreed to cause the shares underlying these options to be
             registered so long as there is no cost to the Company. As of March
             31, 2000, 560,000 shares of common stock were issued pursuant to
             the exercise of stock options by Richard Rubin. Mr. Rubin has, from
             time to time in the past, advised the Company on matters unrelated
             to his consultation with Dr. Hirschman.

             In March 2000, Mr. Rubin transferred 75,000 of his $0.27 options
             and 75,000 of his $0.36 options to Elliot Bauer, an individual who
             also received and exercised shares and options as a result of the
             "Cohen Agreements".

                                      F-18
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Hirschman Agreement (Continued)

             In November 1997, Dr. Hirschman assigned to Henry Kamioner, a
             consultant to Dr. Hirschman, options to acquire 1,500,000 shares
             (500,000 at $.19, 500,000 at $.27, and 500,000 at $.36), which are
             exercisable until March 23, 2001.

             On October 14, 1996, the Company and Dr. Hirschman entered into an
             agreement (the "Employment Agreement") whereby Dr. Hirschman has
             agreed to serve as the President and Chief Executive Officer of the
             Company for a period of three years, subject to earlier termination
             by either party, either for cause as defined in and in accordance
             with the provisions of the Employment Agreement, or if the Company
             do not receive on or prior to December 31, 1997, funding of
             $3,000,000 from sources other than traditional institutional/bank
             debt financing or proceeds from the purchase by Dr. Hirschman of
             the Company's securities, including, without limitation, the
             exercise of Dr. Hirschman of outstanding stock options. Pursuant to
             the Employment Agreement, Dr. Hirschman is entitled to receive an
             annual base salary of $325,000 (increased to $361,000 as of January
             1, 2000), use of an automobile, major medical, term life,
             disability and dental insurance benefits for the term of his
             employment. The Employment Agreement further provides that Dr.
             Hirschman shall be nominated by the Company to serve as a member of
             the Company's Board of Directors and that Bernard Friedland and
             William Bregman will vote in favor of Dr. Hirschman as a director
             of the Company, for the duration of Dr. Hirschman's employment, and
             since October 1996, Dr. Hirschman has served as a member of the
             Company's Board of Directors.

             On February 18, 1998, the Board of Directors authorized a $100,000
             bonus to Dr. Hirschman and granted options to acquire 23,000,000
             shares of stock at $0.27 per option share provided that the Company
             is granted FDA approval for testing in the United States.

             In July 1998, the Company and Dr. Hirschman entered into an amended
             and restated employment agreement which supersedes in its entirety
             the original employment agreement of October 1996. Such amendment
             and restatement extends the term of the employment agreement to
             December 31, 2000. Additionally, the February 1998 Board of
             Directors action regarding the $100,000 bonus and the granting of
             23,000,000 options (contingent upon the occurrence of certain
             events) is included in this employment agreement.

                                      F-19
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Cohen Agreements

             In September 1992, the Company entered into a one year consulting
             agreement with Leonard Cohen (the "September 1992 Cohen
             Agreement"). The September 1992 Cohen Agreement required that Mr.
             Cohen provide certain consulting services to the Company in
             exchange for the Company's issuing to Mr. Cohen 1,000,000 shares of
             common stock (the "September 1992 Cohen Shares"), 500,000 of which
             were issuable upon execution of the September 1992 Cohen Agreement
             and the remaining 500,000 shares of which were issuable upon Mr.
             Cohen completing 50 hours of consulting service to the Company. The
             Company issued the first 500,000 shares to Mr. Cohen in October
             1992 and the remaining 500,000 shares to Mr. Cohen in February
             1993. Further pursuant to the September 1992 Cohen Agreement, the
             Company granted to Mr. Cohen the option to acquire, at any time and
             from time to time through September 10, 1993 (which date has been
             extended through June 30, 2000), the option to acquire 3,000,000
             shares of common stock of the Company at an exercise price of $.09
             per share (which exercise price has been increased to $.16 per
             share) (the "September 1992 Cohen Options"). The fair value of
             these options are estimated to be $59,030 ($.0347 per option share)
             based upon a financial analysis of the terms of the options using
             the Black-Sholes Pricing Model with the following assumptions:
             expected volatility of 20%; risk free interest rate of 6%. This
             amount has been charged to compensation expense at December 31,
             1999 as it related to services previously provided. As of March 31,
             2000, 2,800,000 of the September 1992 Cohen Options have been
             exercised for cash consideration of $386,000.

             In February 1993, the Company entered into a second consulting
             agreement with Mr. Cohen (the "February 1993 Cohen Agreement") for
             a three year term commencing on March 1, 1993. The February 1993
             Cohen Agreement provides that Mr. Cohen provide financing business
             consulting services concerning the operations of the business of
             the Company and possible strategic transactions in exchange for the
             Company issuing to Mr. Cohen 3,500,000 shares of common stock (the
             "February 1993 Cohen Shares"), 1,500,000 shares of which Mr. Cohen
             has informed the Company he has assigned to certain other persons
             not affiliated with the Company or any of its officers or
             directors.

             In July 1994, in consideration for services related to the
             introduction, negotiation and execution of a distribution agreement
             the Company issued: (i) to Mr. Cohen, an additional 2,500,000
             shares (the "April 1994 Cohen Shares") and (ii) to each of Elliot
             Bauer and Lee Rizzuto, 625,000 shares (the "Bauer and Rizzuto
             Shares") as well as options to acquire an additional 5,000,000
             shares each at $.10 per share exercisable through May 1, 1996 (the
             "Bauer and Rizzuto Options"). Through March 31, 2000, 3,455,000
             shares were issued pursuant to the exercise of the Bauer and
             Rizzuto Options for an aggregate exercise price of $240,000. Mr.
             Rizzuto sold all of his shares and all shares underlying his
             options. Pursuant to several amendments, the remaining Bauer
             options are exercisable through June 30, 2000 at an option

                                      F-20
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Cohen Agreements (Continued)

             price of $.14. The fair value of these options are estimated to be
             $116,101 ($.0541 per option share) based upon a financial analysis
             of the terms of the options using the Black-Sholes Pricing Model
             with the following assumptions: expected volatility of 20%; risk
             free interest rate of 6%. This amount has been charged to
             compensation expense at December 31, 1999 as it related to services
             previously provided.

         GloboMax Agreement

             On January 18, 1999, the Company entered into a consulting
             agreement with GloboMax LLC to provide services at hourly rates
             established by the contract to the Company's Investigational New
             Drug application submission and to perform all work that is
             necessary to obtain FDA approval. The contract was extended by
             mutual consent of both parties. The Company has incurred
             approximately $471,000 in services to GloboMax through March 31,
             2000.

         Gallantar Agreement

             On October 1, 1999, the Company entered into an employment
             agreement with Alan Gallantar whereby Mr. Gallantar has agreed to
             serve as the Chief Financial Officer of the Company for a period of
             three years, subject to earlier termination by either party, either
             for cause as defined in and in accordance with the provisions of
             the agreement, without cause or upon the occurrence of certain
             events. Such agreement provides for Mr. Gallantar to receive a base
             salary of $175,000, $200,000 and $225,000 annually for each of the
             three years of the term of the agreement as well as various
             performance based bonuses ranging from 10% to 50% of the base
             salary and various other benefits. Additionally, in connection with
             such agreement, the Company granted Mr. Gallantar options to
             purchase an aggregate of 4,547,880 shares of the Company's common
             stock. Such options have a term of ten years and have an exercise
             price of $.24255 per share. 1,515,960 options vest on each of the
             first, second and third anniversary dates of this employment
             agreement.

             The fair value of these options are estimated to be $376,126
             ($.0827 per option share) based upon a financial analysis of the
             terms of the options using the Black-Sholes Pricing Model with the
             following assumptions: expected volatility of 20%; a risk free
             interest rate of 6% and an expected holding period of three years
             (the term of the employment agreement).

                                      F-21
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         CONSULTING AND EMPLOYMENT AGREEMENTS (Continued)

         Gallantar Agreement (Continued)

             Financial reporting of these options has been done pursuant to the
             Company's policy of following APB No. 25, and related
             interpretations, in accounting for its employee stock options.
             Accordingly, the following pro forma financial information is
             presented to reflect amortization of the fair value of the options.
As
                                                                       Reported        Pro forma           As
                                                                    March 31,2000     Adjustment        Adjusted
                                                                    -------------     ----------        --------
Net loss                                               $(2,054,420)      $(31,344)       $(2,085,764)
                                                                     ===========       ========        ===========

              Net loss per share                                          $(0.01)        $(0.00)           $(0.01)
                                                                          ======         ======            ======
There were no other options outstanding that would require pro
forma presentation.

         Harbor View Agreement

             On February 7, 2000, the Company entered into a consulting
             agreement with Harbor View Group, Inc. for past and future
             consulting services related to corporate structures, financial
             transactions, financial public relations and other matters through
             December 31, 2000.

             In connection with this agreement, the Company issued warrants to
             purchase 1,750,000 shares at an exercise price of $0.21 per share
             and warrants to purchase 1,750,000 shares at an exercise price of
             $0.26 per share until February 28, 2005. The fair value of the
             warrants is estimated to be $200,249 ($.057 per warrant) based upon
             a financial analysis of the terms of the warrants using the
             Black-Sholes Pricing Model with the following assumptions: expected
             volatility of 90%; a risk free interest rate of 6% and an expected
             holding period of eleven months (the term of the consulting
             agreement).

             The Company has determined that $89,045 of the fair value relates
             to past services and, accordingly, has expensed this portion in the
             three months ended March 31, 2000. The remaining $111,204 is
             included in other current assets and will be amortized over the
             remaining term of the agreement.

         DISTRIBUTION AGREEMENTS

         The Company currently is a party to separate agreements with five
         different entities (the "Entities"), whereby the Company has granted
         exclusive rights to distribute Product R in the countries of China,
         Japan, Macao, Hong Kong, Taiwan, Mexico, Argentina, Bolivia, Paraguay,

                                      F-22
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2.  COMMITMENTS AND CONTINGENCIES (Continued)

         DISTRIBUTION AGREEMENTS (Continued)

         Uruguay, Brazil, Chile, Channel Islands, The Isle of Man, British West
         Indies, Jamaica, Haiti, Bermuda, Belize and Saudi Arabia. Pursuant to
         these agreements, distributors are obligated to cause Product R to be
         approved for commercial sale in such countries and upon such approval,
         to purchase from the Company certain minimum quantities of Product R to
         maintain the exclusive distribution rights. Leonard Cohen, a former
         consultant to the Company, has informed the Company that he is an
         affiliate of two of these entities. To date, the Company has recorded
         revenue classified as other income for the sale of territorial rights
         under the distribution agreements. The Company has made no sales under
         the distribution agreements other than for testing purposes.

         OTHER

         The Company has entered into an agreement with an unaffiliated third
         party to increase the square footage of its corporate and laboratory
         offices in Yonkers, New York (the "build-out"). The Company anticipates
         that the total expenses associated with the build-out would be
         approximately $400,000, of which $386,000 has been incurred as of March
         31, 2000.

NOTE 3.  CONVERTIBLE DEBENTURES

         In February 1997 and October 1997, in order to finance research and
         development, the Company sold $1,000,000 and $3,000,000, respectively,
         principal amount of its ten-year 7% Convertible Debentures (the
         "February Debenture" and the "October Debenture", collectively, the
         "Debentures") due February 28, 2007 and August 30, 2007, respectively,
         to RBB Bank Aktiengesellschaft ("RBB") in offshore transactions
         pursuant to Regulation S under the Securities Act of 1933, as amended.
         Accrued interest under the Debentures was payable semi-annually,
         computed at the rate of 7% per annum on the unpaid principal balance
         from the date of issuance until the date of interest payment. The
         Debentures were convertible, at the option of the holder, into shares
         of Common Stock pursuant to specified formulas. On April 22, 1997, June
         6, 1997, July 3, 1997 and August 20, 1997, pursuant to notice by the
         holder, RBB, to the Company under the February Debenture, $330,000,
         $134,000, $270,000 and $266,000, respectively, of the principal amount
         of the February Debenture was converted into 1,648,352, 894,526,
         2,323,580 and 1,809,524 shares of the Common Stock, respectively. As of
         August 20, 1997, the February Debenture was fully converted. On
         December 9, 1997, January 7, 1998, January 14, 1998, February 19, 1998,
         February 23, 1998, March 31, 1998, May 4, 1998 and May 5, 1998,
         pursuant to notice by the holder, RBB, to the Company, $120,000,
         $133,000, $341,250, $750,000, $335,750, $425,000, $275,000 and
         $620,000, respectively, of the October Debenture was converted into
         772,201, 1,017,011, 2,512,887, 5,114,218, 1,498,884, 1,870,869,
         1,491,485 and 3,299,979 Common Stock, respectively. As of May 5, 1998,
         the October Debenture was fully converted.

                                      F-23
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         In connection with the issuance of the February Debenture, the Company
         issued to RBB three warrants (the "February Warrants") to purchase
         common stock, each such February Warrant entitling the holder to
         purchase, from February 21, 1997 through February 28, 2007, 178,378
         shares of common stock. The exercise price of the three February
         Warrants are $0.288, $0.576 and $0.864 per warrant share, respectively.
         The fair value of the February Warrants was estimated to be $37,000
         ($.021 per warrant) based upon a financial analysis of the terms of the
         warrants using the Black-Sholes Pricing Model. This amount has been
         reflected in the accompanying financial statements as interest expense
         related to the convertible February Debenture. Based on the terms for
         conversion associated with the February Debenture, there was an
         intrinsic value associated with the beneficial conversion feature of
         $413,793. This amount has been fully amortized to interest expense with
         a corresponding credit to additional paid-in capital.

         In connection with the issuance of the October Debenture, the Company
         issued to RBB three warrants (the "October Warrants") to purchase
         Common Stock, each such October Warrant entitling the holder to
         purchase, from the date of grant through August 30, 2007, 600,000
         shares of the Common Stock. The exercise price of the three October
         Warrants are $0.20, $0.23 and $0.27 per warrant share, respectively.
         The fair value of the three October Warrants was established to be
         $106,571 ($.178 per warrant), $97,912 ($.163 per warrant) and $87,472
         ($.146 per warrant), respectively, based upon a financial analysis of
         the terms of the warrants using the Black-Sholes Pricing Model. This
         amount has been reflected in the accompanying financial statements as a
         discount on the convertible debenture, with a corresponding credit to
         additional paid-in capital, and is being amortized over the expected
         term of the notes, which at December 31, 1997 was 120 months. In May
         1998, the remaining unamortized discount of $276,957 was amortized upon
         full conversion of the October Debenture.

         Based on the terms for conversion associated with the October
         Debenture, there is an intrinsic value associated with the beneficial
         conversion feature of $1,350,000. This amount has been treated as
         deferred interest expense and recorded as a reduction of the
         convertible debenture liability with a corresponding credit to
         additional paid-in capital and has been amortized to interest expense
         over the period from October 8, 1997 (date of debenture) to February
         24, 1998 (date the debenture is fully convertible). The interest
         expense relative to this item was $210,951 for 1998 and $1,139,049 for
         1997.

         In November 1998, in order to finance further research and development,
         the Company sold 1,500,000 principal amount of its ten year 7%
         Convertible Debenture (the "November Debenture") due October 31, 2008,
         to RBB. Accrued interest under the November Debenture is payable
         semi-annually, computed at the rate of 7% per annum on the unpaid
         principal balance from the date of the issuance of the November
         Debenture until the date of interest payment. The November Debenture
         may be prepaid by the Company before maturity, in whole or in part,
         without premium or penalty, if the Company gives the holder of the
         Debenture notice not less than 30 days before the date fixed for
         prepayment in that notice. The November Debenture is convertible, at
         the option of the holder, into shares of common stock.

                                      F-24
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         On January 19, 2000 and March 7, 2000 pursuant to notice by the holder,
         RBB, to the Company under the November Debenture, $1,122,500 and
         $377,500, respectively, of the principal amount of the November
         Debenture was converted into 8,252,746 and 1,887,500 shares of the
         common stock, respectively. As of March 7, 2000, the November Debenture
         was fully converted.

         In connection with the issuance of the November Debenture, the Company
         issued to RBB two warrants (the "November Warrants") to purchase Common
         Stock, each such November Warrant entitling the holder to purchase
         375,000 shares of the Common Stock at any time and from time to time
         through October 31, 2008. The exercise price of the two November
         Warrants are $.20 and $.24 per warrant share, respectively. The fair
         value of the November warrants was estimated to be $48,000 ($.064 per
         warrant) based upon a financial analysis of the terms of the warrants
         using the Black-Sholes Pricing Model with the following assumptions:
         expected volatility of 20%; a risk free interest rate of 5.75% and an
         expected holding period of one year. This amount has been amortized to
         interest expense in the accompanying consolidated condensed financial
         statements.

         Based on the terms for conversion associated with the November
         Debenture, there is an intrinsic value associated with the beneficial
         conversion feature of $625,000. This amount has been recorded as
         interest expense in 1998.

         In August 1999, in order to finance further research and development,
         the Company entered into a securities purchase agreement to issue an
         aggregate of 20 units, each unit consisting of $100,000 principal
         amount of the Company's 7% convertible debenture (the "August
         Debenture") due August 3, 2009 to Focus Investors LLC ("Focus").
         Accrued interest under the August Debenture is payable semi-annually,
         computed at the rate of 7% on the unpaid principal balance from the
         date of issuance until the date of the interest payment. No payment of
         the principal of the August Debenture may be made prior to the maturity
         date without the consent of the holder. The August Debenture is
         convertible, at the option of the holder, into shares of common stock.
         On January 19, 2000, February 17, 2000 and March 3, 2000 pursuant to
         notice by the holder, Focus, to the Company under the August Debenture,
         $300,000, $900,000 and $800,000, respectively, of the principal amount
         of the August Debenture was converted into 2,178,155, 6,440,735 and
         5,729,967 shares of the common stock, respectively. As of March 3, 2000
         the November Debenture was fully converted.

         In connection with the issuance of the August Debenture, the Company
         issued to Focus one warrant (the "August Warrant") to purchase Common
         Stock, such August Warrant entitling the holder to purchase 1,000,000
         shares of the Common Stock at any time and from time to time through
         August 3, 2004. The exercise price of the August Warrant is $.2461 per
         warrant share. The fair value of the August Warrants was estimated to
         be $52,593 ($.0526 per warrant share) based upon a financial analysis
         of the terms of the warrant using the Black-Sholes Pricing Model with
         the following assumptions: expected volatility of 20%; a risk free
         interest rate of 5.75% and an expected holding period of five years.
         This amount has been amortized to interest expense in the accompanying
         consolidated condensed financial statements.

                                      F-25
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         Based on the terms for conversion associated with the August Debenture,
         there was an intrinsic value associated with the beneficial conversion
         feature of $687,500. This amount has been recorded as interest expense
         in 1999.

         In December 1999, in order to finance further research and development,
         the Company entered into a securities purchase agreement to sell
         $2,000,000 principal amount of the Company's 7% convertible debenture
         (the December Debenture) due December 28, 2009 to Endeavour Capital
         ("Endeavour"). Accrued interest under the December Debenture is payable
         semi-annually, computed at the rate of 7% on the unpaid principal
         balance from the date of issuance until the date of the interest
         payment. No payment of the principal of the December Debenture may be
         made prior to the maturity date without the consent of the holder. The
         December Debenture is convertible, at the option of the holder, into
         shares of common stock.

         During 1999, $1,000,000 of these debentures were sold. The remaining
         $1,000,000 was not available until the shares underlying the first
         $1,000,000 were registered. Such registration statement was declared
         effective in January 2000 and the remaining $1,000,000 transaction was
         consummated.

         On January 27, 2000, February 22, 2000, February 23, 2000, February 24,
         2000 and February 29, 2000 pursuant to notice by the holder, Endeavour,
         to the Company under the December Debenture, $150,000, $135,000,
         $715,000, $785,000 and $200,000, respectively, of the principal amount
         of the December Debenture was converted into 1,105,435, 988,913,
         5,149,035, 5,622,696 and 1,036,674 shares of the common stock,
         respectively. As of March 31, 2000, $15,000 of the December Debenture
         remained outstanding.

         In connection with the issuance of the first $1,000,000 of the December
         Debenture, the Company issued to Endeavour warrants (the December
         Warrants) to purchase Common Stock, such December Warrant entitling the
         holder to purchase 100,000 shares of the Common Stock at any time and
         from time to time through December 31, 2002. The exercise price of the
         December Warrant is $.19 per warrant share. The fair value of the
         December Warrants was estimated to be $4,285 ($.0429 per warrant share)
         based upon a financial analysis of the terms of the warrant using the
         Black-Sholes Pricing Model with the following assumptions: expected
         volatility of 20%; a risk free interest rate of 6% and an expected
         holding period of three years. This amount has been amortized to
         interest expense in the accompanying consolidated financial statements.

         Based on the terms for conversion associated with the first $1,000,000
         of the December Debenture, there was an intrinsic value associated with
         the beneficial conversion feature of $357,143. This amount has been
         recorded as interest expense in 1999.

         In connection with the issuance of the second $1,000,000 of the
         December Debenture, the Company issued to Endeavour warrants (the
         December Warrants) to purchase Common Stock, such December Warrant
         entitling the holder to purchase 100,000 shares of the Common Stock at
         any time and from time to time through December 31, 2002. The exercise
         price of the December

                                      F-26
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 3.  CONVERTIBLE DEBENTURES (Continued)

         Warrant is $.20 per warrant share. The fair value of the December
         Warrants was estimated to be $13,600 ($.136 per warrant share) based
         upon a financial analysis of the terms of the warrant using the
         Black-Sholes Pricing Model with the following assumptions: expected
         volatility of 90%; a risk free interest rate of 6% and an expected
         holding period of three years. This amount has been amortized to
         interest expense in the accompanying consolidated financial statements.

         Based on the terms for conversion associated with the second $1,000,000
         of the December Debenture, there was an intrinsic value associated with
         the beneficial conversion feature of $386,909. This amount has been
         recorded as interest expense in 2000.

         A summary of the outstanding convertible debentures is as follows:
March 31,    December 31,
                                                                                           2000           1999
                                                                                           ----           ----
Unpaid principal balance of November debenture                              $     -      $1,500,000
              Unpaid principal balance of August debenture                                      -       2,000,000
              Unpaid principal balance of December debenture                               15,000       1,000,000
                                                                                          -------      ----------
                                                                                           15,000       4,500,000
              Less unamortized discount                                                         -          53,371
                                                                                          -------      ----------
              Convertible debentures, net                                                 $15,000      $4,446,629
                                                                                          =======      ==========
NOTE 4.  SECURITIES PURCHASE AGREEMENTS

         In January 1999, pursuant to a securities purchase agreement, the
         Company issued 4,917,276 shares of its common stock for an aggregate
         purchase price of $802,500. Such agreement also provided for the
         issuance of four warrants to purchase a total of 2,366,788 shares of
         common stock at prices ranging from $.204 to $.2448 per share at any
         time until December 31, 2003. The fair value of these warrants was
         estimated to be $494,138 ($.209 per warrant) based upon a financial
         analysis of the terms of the warrants using the Black-Sholes Pricing
         Model with the following assumptions: expected volatility of 20%; a
         risk free interest rate of 6% and an expected holding period of five
         years. This amount is being amortized to interest expense in the
         accompanying consolidated financial statements.

         On June 23, 1999, the Company entered into a securities purchase
         agreement with certain individuals whereby the Company will issue
         1,851,852 shares of its common stock for an aggregate purchase price of
         $500,000. These proceeds were received in July 1999. Such agreement
         also provides for the issuance of warrants to purchase an aggregate of
         925,926 shares of common stock at any time until June 30, 2004. The
         fair value of these warrants was estimated to be $37,000 ($.04 per
         warrant) based upon a financial analysis of the terms of the warrants
         using the Black-Sholes Pricing Model with the following assumptions:
         expected volatility of 20%; a risk free interest rate of 5.75% and an
         expected holding period of five years. This amount is being amortized
         to interest expense.

                                      F-27
ADVANCED VIRAL RESEARCH CORP.
                          (A Development Stage Company)

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 4.  SECURITIES PURCHASE AGREEMENTS (Continued)

         Pursuant to a securities purchase agreement with Harbor View Group and
         other various purchasers, dated February 16, 2000, the Company received
         $3,000,000 on March 9, 2000 in exchange for 13,636,357 shares of common
         stock. As of March 31, 2000, these shares had not yet been issued;
         accordingly, the $3,000,000 has been reported as a separate line item
         ("Common stock to be issued") in the long-term liabilities section of
         the accompanying consolidated condensed balance sheet.

         Additionally, in connection with the above described securities
         purchase agreement, the Company issued warrants to purchase an
         aggregate of 5,454,544 shares of common stock. Fifty percent (50%) of
         the warrants are exercisable at $0.275 per share and fifty percent
         (50%) of the warrants are exercisable at $0.33 per share, until
         February 28, 2005. The fair value of these warrants was estimated to be
         $1,582,734 ($0.295 and $0.285 per warrant share) based upon a financial
         analysis of the terms of the warrant using the Black-Sholes Pricing
         Model with the following assumptions; expected volatility of 90%; a
         risk free interest rate of 6% and an expected holding period of five
         years. This amount is being amortized to interest expense in the
         accompanying consolidated condensed financial statements.

                                      F-28
=====================================================================

                          ADVANCED VIRAL RESEARCH CORP.

                              --------------------
                                   PROSPECTUS
                              --------------------

                             Up to 46,070,901 Shares
                                       of
                                  Common Stock

                                 _________, 2000

     =====================================================================
PART II
                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

         The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered, which will be paid
solely by Advanced Viral. All amounts shown are estimates, except the Commission
registration fee:

     Commission registration fee.....................................$ 4,652.24
     Printing and mailing expenses...................................$ 5,000.00
     Legal fees and expenses.........................................$10,000.00
     Accounting fees and expenses....................................$ 5,000.00
              Total..................................................$24,652.24

Item 14.  Indemnification of Directors and Officers

         Article Ninth of our Certificate of Incorporation contains the
following provision with respect to indemnification of directors and officers:

         Ninth: The Corporation shall, to the fullest extent permitted by
         Section 145 of the General Corporation Law of the State of Delaware, as
         the same may be amended and supplemented, indemnify any and all persons
         whom it shall have power to indemnify under said section from and
         against any and all of the expenses, liabilities or other matters
         referred to in or covered by said section, and the indemnification
         provided for herein shall not be deemed exclusive of any other rights
         to which those indemnified may be entitled under any By-law, agreement,
         vote of stockholders or disinterested directors or otherwise, both as
         to action in his official capacity and as to action in another capacity
         while holding such office, and shall continue as to a person, who has
         ceased to be director, officer, employee or agent and shall inure to
         the benefit of the heirs, executors and administrators of such a
         person.

         Section 145 of the General Corporate Law of the State of Delaware (the
"DGCL") contains provisions regarding indemnification, among others, of officers
and directors. Section 145 of the DGCL provides in relevant part:

                  (a) A corporation shall have power to indemnify any person who
         was or is a party or is threatened to be made a party to any
         threatened, pending or completed action, suit or proceeding, whether
         civil, criminal, administrative or investigative (other than an action
         by or in the right of the corporation) by reason of the fact that the
         person is or was a director, officer, employee or agent of the
         corporation, or is or was serving at the request of the corporation as
         a director, officer, employee or agent of another corporation,
         partnership, joint venture, trust or other enterprise, against expenses
         (including attorneys' fees), judgments, fines and amounts paid in
         settlement actually and reasonably incurred by the person in connection
         with such action, suit or proceeding if the person acted in good faith
         and in a manner the person reasonably believed to be in or not opposed
         to the best interests of the corporation, and, with

                                      II-1
respect to any criminal action or proceeding, had no reasonable cause
         to believe the person's conduct was unlawful. The termination of any
         action, suit or proceeding by judgment, order, settlement, conviction,
         or upon a plea of nolo contendere or its equivalent, shall not, of
         itself, create a presumption that the person did not act in good faith
         and in a manner which the person reasonably believed to be in or not
         opposed to the best interests of the corporation, and, with respect to
         any criminal action or proceeding, had reasonable cause to believe that
         the person's conduct was unlawful.

                  (b) A corporation shall have power to indemnify any person who
         was or is a party or is threatened to be made a party to any
         threatened, pending or completed action or suit by or in the right of
         the corporation to procure a judgment in its favor by reason of the
         fact that the person is or was a director, officer, employee or agent
         of the corporation, or is or was serving at the request of the
         corporation as a director, officer, employee or agent of another
         corporation, partnership, joint venture, trust or other enterprise
         against expenses (including attorneys' fees) actually and reasonably
         incurred by the person in connection with the defense or settlement of
         such action or suit if the person acted in good faith and in a manner
         the person reasonably believed to be in or not opposed to the best
         interests of the corporation and except that no indemnification shall
         be made in respect of any claim, issue or matter as to which such
         person shall have been adjudged to be liable to the corporation unless
         and only to the extent that the Court of Chancery or the court in which
         such action or suit was brought shall determine upon application that,
         despite the adjudication of liability but in view of all the
         circumstances of the case, such person is fairly and reasonably
         entitled to indemnity for such expenses which the Court of Chancery or
         such other court shall deem proper.

                  (c) To the extent that a present or former director or officer
         of a corporation has been successful on the merits or otherwise in
         defense of any action, suit or proceeding referred to in subsections
         (a) and (b) of this section, or in defense of any claim, issue or
         matter therein, such person shall be indemnified against expenses
         (including attorneys' fees) actually and reasonably incurred by such
         person in connection therewith.

                  (d) Any indemnification under subsections (a) and (b) of this
         section (unless ordered by a court) shall be made by the corporation
         only as authorized in the specific case upon a determination that
         indemnification of the present or former director, officer, employee or
         agent is proper in the circumstances because the person has met the
         applicable standard of conduct set forth in subsections (a) and (b) of
         this section. Such determination shall be made , with respect to a
         person who is a director or officer at the time of such determination,
         (1) by a majority vote of the directors who are not parties to such
         action, suit or proceeding, even though less than a quorum, or (2) by a
         committee of such directors designated by majority vote of such
         directors, even though less than a quorum, or (3) if there are no such
         directors, or if such directors so direct, by independent legal counsel
         in a written opinion, or (4) by the stockholders.

         Delaware law also permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer against
any liability asserted against him and incurred by him in such

                                      II-2
capacity or arising out of his status as such, whether or not the corporation
has the power to indemnify him against that liability under Section 145 of the
DGCL.

         Our Certificate of Incorporation was amended on December 30, 1987, to
limit or eliminate director liability by incorporating new Article Eleventh,
which provides:

         A director of the Corporation shall not be personally liable to the
         Corporation or its stockholders for monetary damages for breach of
         fiduciary duty as a director, except for liability (i) for any breach
         of the director's duty of loyalty to the Corporation or its
         stockholders, (ii) for acts or omissions not in good faith or which
         involve intentional misconduct or a knowing violation of laws, (iii)
         under Section 174 of the Delaware General Corporation Law, or (iv) for
         any transaction from which the director derived an improper personal
         benefit.

         The above discussion of our Certificate of Incorporation is not
intended to be exhaustive and is respectively qualified in its entirety by such
document.

Item 15.  Recent Sales of Unregistered Securities

         The following table sets forth our sales of unregistered securities for
past three years. All transactions listed below involved the issuance of common
stock and options to acquire shares of common stock prior to commencement of the
offering described in the foregoing prospectus. No underwriters were employed
with respect to the sale of any of the securities listed below. All shares were
issued in reliance upon Section 4(2) and/or 3(b) of the Securities Act.
Securities Issued                   Purchaser                       Date Acquired      Consideration
-----------------                   ---------                       -------------      -------------
50,000 shares                       Malcolm Santer                  2-26-97            Services (Consulting) (1)

750,000 shares                      David Sass                      3-21-97            $0.08 per share

375,000 shares                      Norman Schwartz                 3-21-97            $0.08 per share

375,000 shares                      Mel Mendelson                   3-21-97            $0.08 per share

1,833,333 shares                    Matthew Cohen                   3-21-97            $0.08 per share

1,648,352 shares                    RBB Bank                        4-22-97            $0.20 per share (2)

894,526 shares                      RBB Bank                        6-6-97             $0.15 per share (2)

2,323,580 shares                    RBB Bank                        7-3-97             $0.12 per share (2)

1,809,524 shares                    RBB Bank                        8-20-97            $0.15 per share (2)

100,000 shares                      Malcolm Santer                  9-8-97             Services (Consulting) (3)

722,701 shares                      RBB Bank                        12-9-97            $0.16 per share (4)

1,017,011 shares                    RBB Bank                        1-7-98             $0.13 per share (4)

2,512,887 shares                    RBB Bank                        1-14-98            $0.14 per share (4)

23,000,000 option shares            Shalom Z. Hirschman, M.D.       2-18-98            (5)

5,114,218 shares                    RBB Bank                        2-23-98            $0.15 per share (4)

190,000 shares                      Plata                           3-5-98             $0.12 per share

                                      II-3
1,498,884 shares                    RBB Bank                        3-19-98            $0.22 per share (4)

105,000 shares                      Plata                           3-27-98            $0.12 per share

1,870,869 shares                    RBB Bank                        3-31-98            $0.23 per share (4)

10,000 shares                       Freddie Velez                   4-3-98             $0.20 per share

200,000 shares                      Charles Miller                  4-3-98             $0.14 per share

1,491,485 shares                    RBB Bank                        5-4-98             $0.18 per share (4)

3,299,979 shares                    RBB Bank                        5-5-98             $0.19 per share (4)

50,000 shares                       Charles Miller                  5-13-98            $0.16 per share

200,000 shares                      Duffy                           5-13-98            $0.14 per share

100,000 shares                      Charles Miller                  5-13-98            $0.14 per share

100,000 shares                      Charles Miller                  5-18-98            $0.16 per share

200,000 shares                      Commonwealth                    5-18-98            $0.26 per share

100,000 shares                      Commonwealth                    5-22-98            $0.26 per share

100,000 shares                      Charles Miller                  6-22-98            $0.16 per share

85,000 shares                       Charles Miller                  7-15-98            $0.16 per share

15,000 shares                       Charles Miller                  7-17-98            $0.16 per share

25,000 shares                       Charles Miller                  7-22-98            $0.16 per share

75,000 shares                       Charles Miller                  7-24-98            $0.16 per share

100,000 shares                      Malcolm Santer                  8-12-98            Services (Consulting)(6)

7% Convertible Debenture            RBB Bank                        11-16-98           $1,500,000

375,000 warrants                    RBB Bank                        11-16-98           $0.20 per share

375,000 warrants                    RBB Bank                        11-16-98           $0.24 per share

2,450,980 shares                    Harbor View Group, Inc.         12/22/98           $0.16 per share

1,380,392 warrants                  Harbor View Group, Inc.         12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Jennifer Brandenburg Smith      12/22/98           $0.16 per share

49,020 warrants                     Jennifer Brandenburg Smith      12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Jo Sherrin Smith                12/22/98           $0.16 per share

49,020 warrants                     Jo Sherrin Smith                12/22/98           $0.2440 and $0.2448 per share

612,745 shares                      Joe Feshbach                    12/22/98           $0.16 per share

245,098 warrants                    Joe Feshbach                    12/22/98           $0.2440 and $0.2448 per share

382,965 shares                      John Zimmerman                  12/22/98           $0.16 per share

153,186 warrants                    John Zimmerman                  12/22/98           $0.2440 and $0.2448 per share

61,274 shares                       Matt Zimmerman                  12/22/98           $0.16 per share

24,508 warrants                     Matt Zimmerman                  12/22/98           $0.2440 and $0.2448 per share

306,372 shares                      Myron Weiner                    12/22/98           $0.16 per share

122,508 warrants                    Myron Weiner                    12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Robert Franklin Smith, Sr.      12/22/98           $0.16 per share

49,020 warrants                     Robert Franklin Smith, Sr.      12/22/98           $0.2440 and $0.2448 per share

306,372 shares                      Russell Kuhn                    12/22/98           $0.16 per share

                                      II-4
122,508 warrants                    Russell Kuhn                    12/22/98           $0.2440 and $0.2448 per share

122,549 shares                      Shelly Marion Smith             12/22/98           $0.16 per share

49,020 warrants                     Shelly Marion Smith             12/22/98           $0.2440 and $0.2448 per share

306,372 shares                      Victor Sherman                  12/22/98           $0.16 per share

122,508 warrants                    Victor Sherman                  12/22/98           $0.2440 and $0.2448 per share

370,370 shares                      Kwong Wai Au                    6-30-99            $0.27 per share

277,778 warrants                    Kwong Wai Au                    6-30-99            $0.324 and $0.378 per share

925,926 shares                      Michael Berman                  6-30-99            $0.27 per share

463,564 warrants                    Michael Berman                  6-30-99            $0.324 and $0.378 per share

555,556 shares                      Pak-Lin Law                     6-30-99            $0.27 per share

185,186 warrants                    Pak-Lin Law                     6-30-99            $0.324 and $0.378 per share

7% convertible debentures           Focus Investors LLC             8-3-99             $2,000,000 (aggregate)

1,000,000 warrants                  Focus Investors LLC             8-3-99             $0.2461 per share

100,000 shares                      Malcolm Santer                  9-14-99            Services (Consulting) (7)

4,547,880 options                   Alan Gallantar                  10-1-99            $0.24255 per share (8)

7% convertible debentures           Endeavour Capital Fund S.A.     12-28-99           $1,000,000 (aggregate)

110,000 warrants                    Endeavour Capital Fund S.A.     12-28-99           $0.19916667 per share

180,000 shares                      Bratskeir & Co.                 1-31-2000          $0.25 per share

3,500,000 warrants                  Harbor View Group               2-7-2000           $0.21 and $0.26 per share (9)

4,204,545 shares                    Harbor View Group               2-16-2000          $0.22 per share

5,454,544 warrants                  Harbor View Group               2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Michael A. Berman               2-16-2000          $0.22 per share

181,818  warrants                   Michael A. Berman               2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Cardinal Color Inc.             2-16-2000          $0.22 per share

136,364  warrants                   Cardinal Color Inc.             2-16-2000          $0.275 and $0.33 per share

340,909  shares                     Merry Contillo                  2-16-2000          $0.22 per share

136,364  warrants                   Merry Contillo                  2-16-2000          $0.275 and $0.33 per share

340,909  shares                     Joseph Deglomina                2-16-2000          $0.22 per share

136,364  warrants                   Joseph Deglomina                2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Michael Duong                   2-16-2000          $0.22 per share

181,818  warrants                   Michael Duong                   2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Joseph Feshbach                 2-16-2000          $0.22 per share

181,818  warrants                   Joseph Feshbach                 2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Gerry Goodrich                  2-16-2000          $0.22 per share

181,818  warrants                   Gerry Goodrich                  2-16-2000          $0.275 and $0.33 per share

340,909  shares                     Bice Grobstein                  2-16-2000          $0.22 per share

181,818  warrants                   Bice Grobstein                  2-16-2000          $0.275 and $0.33 per share

909,090  shares                     Russell Kuhn                    2-16-2000          $0.22 per share

363,636  warrants                   Russell Kuhn                    2-16-2000          $0.275 and $0.33 per share

681,818  shares                     Byron Lassin                    2-16-2000          $0.22 per share

272,728  warrants                   Byron Lassin                    2-16-2000          $0.275 and $0.33 per share

909,090  shares                     Steve Levitt                    2-16-2000          $0.22 per share

363,636  warrants                   Steve Levitt                    2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Frederick P. Lutz               2-16-2000          $0.22 per share

181,818  warrants                   Frederick P. Lutz               2-16-2000          $0.275 and $0.33 per share

909,090  shares                     Victor Sherman                  2-16-2000          $0.22 per share

363,636  warrants                   Victor Sherman                  2-16-2000          $0.275 and $0.33 per share

568,182  shares                     Kevin Sossin                    2-16-2000          $0.22 per share

227,272  warrants                   Kevin Sossin                    2-16-2000          $0.275 and $0.33 per share

681,818  shares                     Wedar Biotech Corp.             2-16-2000          $0.22 per share

272,728  warrants                   Wedar Biotech Corp.             2-16-2000          $0.275 and $0.33 per share

454,545  shares                     Myron Weiner                    2-16-2000          $0.22 per share

181,818  warrants                   Myron Weiner                    2-16-2000          $0.275 and $0.33 per share

568,182  shares                     John Zimmerman                  2-16-2000          $0.22 per share

227,272  warrants                   John Zimmerman                  2-16-2000          $0.275 and $0.33 per share
--------------------------

(1)  The 50,000 shares issued for consulting services on 9-4-96 and 2-26-97 have
     been valued at $0.50 per share and $0.41 per share, respectively.

(2)  The conversions were made pursuant to the February 21, 1997 issuance of
     convertible debentures.

(3)  The 100,000 shares issued for consulting services on 9-8-97 have been
     valued at $0.24 per share.

(4)  The conversions were made pursuant to the October 1997 issuance of
     convertible debentures.

(5)  Options to purchase 23,000,000 shares at $0.27 per share granted pursuant
     to the Hirshman employment agreement.

(6)  The 100,000 shares issued for consulting services on 8-12-98 have been
     valued at $0.21 per share.

(7)  The 100,000 shares issued for consulting services on 9-14-99 have been
     valued at $0.23 per share.

(8)  Granted pursuant to the Gallantar employment agreement.

(9)  The warrants to purchase 3,500,000 shares issued pursuant to a consulting
     agreement have been valued at $0.21 and $0.26 per share.

                                      II-5
Item 16.  Exhibits and Financial Statement Schedules

(a)  Exhibits

Exhibit
Number    Description
------    -----------

3.1       Articles of Incorporation of Advanced Viral Research Corp. ("ADVR")(2)

3.2       Bylaws of ADVR, as amended(1)

3.3       Amendment to Articles of Incorporation of ADVR(2)

4.1       Specimen Certificate of Common Stock(1)

4.2       Specimen Warrant Certificate(1)

4.3       Warrant Agreement between ADVR and American Stock Transfer and Trust
          Company(1)

4.4       Forms of Common Stock Options and Agreements granted by ADVR to TRM
          Management Corp.(5)

4.5       Form of Common Stock Option and Agreement granted by ADVR to Plata
          Partners Limited Partnership(12)

4.6       Consulting Agreement, dated September 11, 1992, and Form of Common
          Stock granted by ADVR to Leonard Cohen(6)

4.7       Addendum to Agreement granted by ADVR to Shalom Z. Hirschman, M.D.
          dated March 24, 1996(10)

4.8       Securities Purchase Agreement dated November 16, 1998 by and between
          ADVR and RBB Bank AG. (11)(o)

4.9       7% Convertible Debenture dated November 16, 1998. (11)(o)

4.10      Warrant dated November 16, 1998 to purchase 375,000 shares of common
          stock at $0.20 per share. (11)(o)

4.11      Warrant dated November 16, 1998 to purchase 375,000 shares of common
          stock at $0.24 per share. (11)(o)

4.12      Securities Purchase Agreement dated December 22, 1998 by and between
          ADVR and various purchasers. (15)

4.13      Form of Warrant dated December 22, 1998 to purchase shares of common
          stock of ADVR at $0.2040 per share. (15)

4.14      Form of Warrant dated December 22, 1998 to purchase shares of common
          stock of ADVR at $0.2448 per share. (15)

4.15      Securities Purchase Agreement dated June 23, 1999 by and between ADVR
          and various purchasers. (15)

4.16      Form of Warrant dated June 23, 1999 to purchase shares of common stock
          of ADVR at $0.324 per share. (15)

4.17      Form of Warrant dated June 23, 1999 to purchase shares of common stock
          of ADVR at $0.378 per share. (15)

4.18      Securities Purchase Agreement dated August 3, 1999 by and between ADVR
          and Focus Investors, LLC. (15)

4.19      Form of 7% Convertible Debenture dated August 3, 1999. (15)

4.20      Form of Warrant dated August 3, 1999 to purchase 50,000 shares of
          common stock at $0.2461 per share. (15)

4.21      Securities Purchase Agreement dated December 28, 1999 by and between
          ADVR and Endeavour Capital Fund S.A. (16)

4.22      Form of 7% Convertible Debenture dated December 28, 1999. (16)

4.23      Form of Warrant dated December 28, 1999 to purchase shares of common
          stock at $0.19916667 per share. (16)

                                      II-6
Exhibit
Number    Description
------    -----------

4.24      Form of Warrant dated February 7, 2000 to purchase shares of common
          stock at $.21 per share. (17)

4.25      Form of Warrant dated February 7, 2000 to purchase shares of common
          stock at $.26 per share. (17)

4.26      Form of Warrant dated February 16, 2000 to purchase shares of common
          stock at $.275 per share. (17)

4.27      Form of Warrant dated February 16, 2000 to purchase shares of common
          stock at $.33 per share. (17)

5.1       Opinion and Consent of the law firm of Berman Wolfe Rennert Vogel &
          Mandler, P.A. *

10.1      Declaration of Trust by Bernard Friedland and William Bregman in favor
          of ADVR dated November 16, 1987(12)

10.2      Clinical Trials Agreement, dated September 19, 1990, between Clinique
          Medical Actuel and ADVR. (3)

10.3      Letter, dated March 15, 1991 to ADVR from Health Protection Branch(3)

10.4      Agreement dated August 20, 1991 between TRM Management Corp. and ADVR.
          (11)(a

10.5      Lease dated December 18, 1991 between Bayview Associates, Inc. and
          ADVR. (4)

10.6      Lease Agreement, dated February 16, 1993 between Stortford Brickell
          Inc. and ADVR. (7)

10.7      Consulting Agreement dated February 28, 1993 between Leonard Cohen and
          ADVR. (8)

10.8      Medical Advisor Agreement, dated as of September 14, 1993, between
          Lionel Resnick, M.D. and ADVR. (11)(b)

10.9      Agreement, dated November 9, 1993, between Dormer Laboratories Inc.
          and ADVR. (12)

10.10     Exclusive Distribution Agreement, dated April 25, 1994, between
          C.U.R.E. Pharmaceutical Corp. and ADVR. (11)(c)

10.11     Exclusive Distribution Agreement, dated as of June 1, 1994, between
          C.U.R.E. Pharmaceutica Central Americas Ltd. and ADVR. (11)(d

10.12     Exclusive Distribution Agreement dated as of June 17, 1994 between DCT
          S.R.L. and ADVR, as amended(11)(e)

10.13     Contract, dated as of October 25, 1994 between Commonwealth
          Pharmaceuticals of the Channel Islands and ADVR. (11)(f)

10.14     Agreement dated May 24, 1995 between ADVR and Deborah Silver(9)

10.15     Agreement dated May 29, 1995 between ADVR and Shalom Z. Hirschman,
          M.D.(9)

10.16     Exclusive Distribution Agreement, dated as of June 2, 1995, between
          AVIX International Pharmaceutical Corp. and ADVR. (12)

10.17     Supplement to Exclusive Distribution Agreement, dated November 2, 1995
          with Commonwealth Pharmaceuticals(12)

10.18     Exclusive Distributorship & Limited License Agreement, dated December
          28, 1995, between AVIX International Pharmaceutical Corp., Beijing
          Unistone Pharmaceutical Co., Ltd. and ADVR. (11)(g)

10.19     Modification Agreement, dated December 28, 1995, between AVIX
          International Pharmaceutical Corp. and ADVR. (11)(g)

10.20     Agreement dated April 1, 1996, between DCT S.R.L. and ADVR. (11)(h)

10.21     Addendum, dated as of March 24, 1996, to Consulting Agreement between
          ADVR and Shalom Z. Hirschman, M.D.(10)

                                      II-7
Exhibit
Number    Description
------    -----------

10.22     Addendum to Agreement, dated July 11, 1996, between AVIX International
          Pharmaceutical Corp. and ADVR. (11)(i)

10.23     Employment Agreement, dated October 17, 1996, between ADVR and Shalom
          Z. Hirschman, M.D.(11)(j)

10.24     Lease, dated February 7, 1997 between Robert Martin Company, LLC and
          ADVR. (12)

10.25     Copy of Purchase and Sale Agreement, dated February 21, 1997 between
          ADVR and Interfi Capital Group(11)(k)

10.26     Material Transfer Agreement-Cooperative Research And Development
          Agreement, dated March 13, 1997, between National Institute of Health,
          Food and Drug Administration and the Centers for Disease Control and
          Prevention(11)(l)

10.27     Copy of Purchase and Sale Agreement, dated September 26, 1997
          between ADVR and RBB Bank AG. (11)(m)

10.28     Copy of Extension to Materials Transfer Agreement-Cooperative Research
          and Development Agreement, dated March 4, 1998, between National
          Institute of Health, Food and Drug Administration and the Centers for
          Disease Control and Prevention. (13)

10.29     Amended and Restated Employment Agreement dated July 8, 1998 between
          ADVR and Shalom Z. Hirschman, M.D.(11)(n)

10.30     Agreement between ADVR and Angelo Chinnici, M.D. dated July 1, 1999.
          (14)

10.31     Consulting Agreement between ADVR and GloboMax LLC dated January 18,
          1999. (15)

10.32     Registration Rights Agreement dated August 3, 1999 between ADVR
          Research and Focus Investors LLC. (15)

10.33     Employment Agreement dated October 1, 1999 between ADVR and Alan V.
          Gallantar (15)

10.34     Registration Rights Agreement dated December 28, 1999 between ADVR
          and Endeavour Capital Fund, S.A. (16)

10.35     Consulting Agreement dated February 7, 2000 between ADVR and Harbor
          View Group, Inc.(17)

10.36     Securities Purchase Agreement dated February 16, 2000 between ADVR and
          Harbor View Group, Inc. (17)

10.37     Letter Agreement dated as of November 9, 1999 between ADVR and
          Bratskeir & Company. *

10.38     Amended and Restated Employment Agreement dated May 12, 2000 between
          ADVR and Shalom Z. Hirschman, M.D. *

21.1      Subsidiaries of Registrant:  Advance Viral Research Ltd., a Bahamian
          corporation.

23.1      Consent of Rachlin Cohen & Holtz, LLP, Independent Certified Public
          Accountants *

23.2      Consent of the law firm of Berman Wolfe Rennert Vogel & Mandler, P.A.
          (See Exhibit 5.1).

27.1      Financial Data Schedule of ADVR as of and for the Three Months ended
          March 31, 2000.*
----------
*      Filed herewith.

1.     Documents incorporated by reference herein to certain exhibits our
       registration statement on Form S-1, as amended, File No. 33-33895, filed
       with the Securities and Exchange Commission on March 19, 1990.
2.     Documents incorporated by reference herein to certain exhibits to our
       registration statement on Form S-18, File No. 33-2262-A, filed with the
       Securities and Exchange Commission on February 12, 1989.
3.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
4.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for period ended March 31, 1991.
5.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1991.

                                      II-8
6.     Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-Q for the period ended September 30, 1992.
7.     Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-KSB for the fiscal year ended December 31, 1992.
8.     Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-QSB for the period ended March 31, 1993.
9.     Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-QSB for the period ended June 30, 1995.
10.    Documents incorporated by reference herein to certain exhibits to our
       Quarterly Report on Form 10-QSB for the period ended March 31, 1996.
11.    Incorporated by reference herein to our Current Reports on Form 8-K
       and exhibits thereto as follows:
       (a)    A report on Form 8-K dated January 3, 1992.
       (b)    A report on Form 8-K dated September 14, 1993.
       (c)    A report on Form 8-K dated April 25, 1994.
       (d)    A report on Form 8-K dated June 3, 1994.
       (e)    A report on Form 8-K dated June 17, 1994.
       (f)    A report on Form 8-K dated October 25, 1994.
       (g)    A report on Form 8-K dated December 28, 1995.
       (h)    A report on Form 8-K dated April 22, 1996.
       (i)    A report on Form 8-K dated July 12, 1996.
       (j)    A report on Form 8-K dated October 17, 1996.
       (k)    A report on Form 8-K dated February 21, 1997.
       (l)    A report on Form 8-K dated March 25, 1997.
       (m)    A report on Form 8-K dated September 26, 1997.
       (n)    A report on Form 8-K dated July 21, 1998.
       (o)    A report on Form 8-K dated November 24, 1998.
12.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-KSB for the fiscal year ended December 31, 1996.
13.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997.
14.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
15.    Documents incorporated by reference herein to certain exhibits to our
       registration statement on Form S-1, as amended, File No.
       33-70523, filed with the Securities and Exchange Commission on January
       13, 1999.
16.    Documents incorporated by reference herein to certain exhibits to our
       registration statement on Form S-1, as amended, File No.
       333-94529, filed with the Securities and Exchange Commission on January
       12, 2000.
17.    Documents incorporated by reference herein to certain exhibits to our
       Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

(b) Financial Statement Schedules

       All schedules have been omitted because they are not applicable or not
required or the required information is included in the financial statements or
notes thereto.

Item 17.  Undertakings

       The undersigned registrant hereby undertakes:

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

                  (i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

                                      II-9
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.

                  (iii) To include any material with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

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

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provision described under Item 20 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. If a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

                                      II-10
SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
Advanced Viral has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Yonkers, State of New York, on May 23, 2000.

                                            ADVANCED VIRAL RESEARCH CORP.

                                            By: /s/ SHALOM Z. HIRSCHMAN, M.D.
                                                -----------------------------
                                                Shalom Z. Hirschman, M.D.
                                                President and Chief Executive
                                                Officer

         Pursuant to the requirements of the Securities Act of 1933 as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature                                      Title                                    Date
---------                                      -----                                    ----
/s/ Shalom Z. Hirschman, M.D                   President and Chief                      May 23, 2000
-----------------------------                  Executive Officer and director
Shalom Z. Hirschman, M.D.

/s/ Bernard Friedland                          Chairman of the Board and                May 23, 2000
-----------------------------                  director
Bernard Friedland

/s/ Alan Gallantar                             Chief Financial Officer                  May 23, 2000
-----------------------------
Alan Gallantar

/s/ William Bregman                            Secretary-Treasurer,                     May 23, 2000
-----------------------------                  director
William Bregman

/s/ Louis J. Silver                            director                                 May 23, 2000
-----------------------------
Louis J. Silver
II-11
INDEX TO EXHIBITS

         Exhibit
         Number     Description
         ------     -----------

         5.1        Opinion and Consent of the law firm of Berman Wolfe
                    Rennert Vogel & Mandler, P.A.
         23.1       Consent of Rachlin Cohen & Holtz, LLP, Independent
                    Certified Public Accountants
         10.37      Letter Agreement dated as of November 9, 1999
                    between ADVR and Bratskeir & Company.
         10.38      Second Amended and Restated Employment Agreement
                    dated May 12, 2000 betwen ADVR and Shalom Z. Hirschman, M.D.
         27.1       Financial Data Schedule for ADVR as of and for the Year
                    Ended December 31, 1999