UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-KSB

(x)  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934 (FEE REQUIRED)

     For  the fiscal year ended December 31, 2003
                                -----------------

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

     For  the transition period from _______________ to _________________

         Commission File number      0-7473
                                     ------


                         AMEXDRUG CORPORATION
          --------------------------------------------------
          (Exact name of registrant as specified in charter)


            Nevada                                 90-0017017
    --------------------------------         -------------------------
    State or other jurisdiction of          (I.R.S. Employer I.D. No.)
    incorporation or organization

    8909 West Olympic Blvd., Suite 208, Beverly Hills, CA       90211
    -----------------------------------------------------    ------------
         (Address of principal executive offices)             (Zip Code)

    Issuer's telephone number, including area code      (310) 855-0475
                                                    ----------------------

    Securities registered pursuant to section 12 (b) of the Act:

    Title of each class           Name of each exchange on which registered
           None                                         None
    ------------------            -----------------------------------------

    Securities registered pursuant to section 12 (g ) of the Act:

                                 None
                           ---------------
                           (Title of Class)

Check whether the Issuer (1 ) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

 (1) Yes [x]   No [  ]                             (2)  Yes [x]    No [  ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [x]

State issuer's revenues for its most recent fiscal year:  $11,705,672

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days.


<PAGE>


At March 26, 2004, the aggregate market value of the voting stock held by
non-affiliates was $468,233, based upon 217,783 shares held by non-affiliates,
and the average of the bid price ($2.00 per share) and the asked price ($2.30
per share) of $2.15 per share.

      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.

         Yes [x]   No [  ]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of March 26, 2004, the registrant had 8,052,783 shares of common stock issued
and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part
of the form 10- KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) any proxy or other
information statement; and (3) Any prospectus filed pursuant to rule 424 (b) or
(c) under the Securities Act of 1933: None

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                                TABLE OF CONTENTS
                                -----------------
                                                                           Page
                                                                           ----
PART I
------

ITEM 1.    DESCRIPTION OF BUSINESS............................................ 4

ITEM 2.    DESCRIPTION OF PROPERTIES......................................... 14

ITEM 3.    LEGAL PROCEEDINGS................................................. 16

ITEM 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS................. 16


PART II
-------

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.......... 17

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION......... 18

ITEM 7.    FINANCIAL STATEMENTS.............................................. 20

ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE.......................................... 32

ITEM 8A.   CONTROLS AND PROCEDURES........................................... 32


PART III
--------

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
           PERSONS; COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT....... 32

ITEM 10.   EXECUTIVE COMPENSATION............................................ 34

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT........................................................ 36

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................... 37

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K.................................. 38

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES............................ 39



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                                     PART I

MANY STATEMENTS MADE IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS THAT ARE NOT
BASED ON HISTORICAL FACTS. ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
REPORT REFLECT MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND
INVOLVE RISKS AND UNCERTAINTIES. BECAUSE THESE FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES, THERE ARE IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS MAY VARY MATERIALLY.

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

                         ITEM 1. DESCRIPTION OF BUSINESS
------------------------------------------------------------------------------

General

Amexdrug Corporation, a Nevada corporation, is primarily a full-line, wholesale
distributor of pharmaceuticals, over-the-counter products, health and beauty
care products, and nutritional supplements. Amexdrug Corporation distributes its
products primarily to independent pharmacies in the western and southeastern
regions of the United States, and secondarily to small and medium-sized pharmacy
chains, alternative care facilities and other wholesalers and retailers. Over
the next several months, Amexdrug Corporation anticipates expanding its market
area to include other regions in the continental United States.

References in this report to "we," "our," "us," the "Company" and "Amexdrug"
refer to Amexdrug Corporation and also to our subsidiary, Allied Med, Inc. where
appropriate.

Amexdrug currently has 50,000,000 shares of authorized common stock $.001 par
value, of which 8,052,783 are issued and outstanding.

Significant acquisitions

                                Allied Med, Inc.
                                ----------------

On December 31, 2001, Amexdrug acquired all of the issued and outstanding common
shares of Allied Med, Inc., an Oregon corporation ("Allied") in a share
exchange. Amexdrug acquired the 50,000 issued and outstanding shares of Allied
Med, Inc. from its sole shareholder, Jack Amin, in exchange for 7,000,000
restricted common shares of Amexdrug, and Amexdrug assumed responsibility for
payment of a $100,000 promissory note and accrued interest thereon owned by Mr.
Amin to Allied Med, Inc. At all times during the negotiations of the
transaction, Mr. Amin was an officer, director and controlling shareholder of
both companies. Allied Med, Inc. is sometimes referred to herein as "Allied".

Consideration for the acquisition was determined through negotiations between
the boards of directors of both companies and was based on Allied's past
operating history and future potential growth.

Allied was formed as an Oregon corporation in October 1997, to operate as a full
line wholesaler of pharmaceuticals, over-the-counter and non-drug products and
health and beauty aids. In 1998, Allied's gross sales were approximately $2.8
million. In 1999, Allied's gross sales exceeded $5 million. In 2000, Allied's

                                       4
<PAGE>

gross sales exceeded $8 million. In 2001, Allied's gross sales were
approximately $21.2 million. In 2002, Allied's gross sales were approximately
$22.2 million. In 2003, Allied's gross sales were approximately $11.7 million.

As discussed herein, Amexdrug has assumed the operations of Allied as its
primary operations, and Amexdrug intends to build on the wholesale
pharmaceutical operations of Allied. All future operations in the wholesale
pharmaceutical industry will be conducted through Allied.

Industry trends

                      Pharmaceutical and healthcare markets

According to IMS Health, a company specializing in information services for the
pharmaceutical and health care industries, the United States is the world's
largest pharmaceutical market, with 2000 sales of $150 billion, including
diagnostics and over-the-counter drugs. That figure is expected to rise to $263
billion in 2005, a projected compound annual growth rate of 11.8%. This
continued growth rate of the sales of pharmaceutical products was attributed to
a number of factors including:

          .    the value added by the introduction of new drugs into the
               marketplace, which more than offsets the value lost by
               medications losing patent protection;
          .    new patterns of drug lifestyle management, resulting in higher
               sales occurring earlier in the life cycle of a medication;
          .    increased money spent on direct-to-consumer marketing
               initiatives; and
          .    an unprecedented period of investment by pharmaceutical
               companies worldwide.

Amexdrug believes that, currently, the pharmaceutical and health care product
markets are serviced primarily by traditional full-line wholesalers.

                                    Internet

The Internet has emerged as the fastest growing communications medium in history
and is dramatically changing how businesses and individuals communicate and
share information. International Data Corporation estimates that the number of
Internet users will grow from 97 million at the end of 1998 to 320 million by
2002. The Internet has created new opportunities for conducting commerce, such
as business-to-consumer and person-to-person e-commerce. Recently, the
widespread adoption of intranets and the acceptance of the Internet as a
business communications platform has created a foundation for
business-to-business e-commerce that offers the potential for organizations to
streamline complex processes, lower costs and increase productivity.
Internet-based business-to-business e-commerce may be poised for rapid growth
and could represent a significantly larger opportunity than business-to-consumer
or person-to- person e-commerce. According to Gartner Group, worldwide
business-to-business Internet revenue was $433.3 billion in 2000, and in 2001
that total was projected to reach $919 billion. North America accounted for 59%
of the worldwide total in 2000, with business-to-business Internet commerce
totaling $255 billion, and is anticipated to represent 52% of the projected $480
billion in 2001. By 2005, worldwide business-to-business Internet commerce is
expected to be more than $8.5 trillion, and the North American region will total
$3.6 trillion, which will be 42% of the overall market. Amexdrug hopes, although
it cannot guarantee, that it will benefit from this growth.

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<PAGE>


The dynamics of business-to-business e-commerce relationships differ
significantly from those of other e-commerce relationships. Business-to-
business e-commerce solutions frequently automate processes that are fundamental
to a business' operations by replacing various paper-based transactions with
electronic communications. In addition, business-to-business e-commerce
solutions must often be integrated with a customer's existing systems, a process
that can be complex, time-consuming and expensive. Consequently, selection and
implementation of a business-to-business e-commerce solution represents a
significant commitment by the customer, and the costs of switching solutions are
high. In addition, because business transactions are typically recurring and
non-discretionary, the average order size and lifetime value of a
business-to-business e-commerce customer is generally greater than that of a
business-to-consumer e-commerce customer. These solutions are likely to be most
readily accepted by industries characterized by a large number of buyers and
sellers, a high degree of fragmentation among buyers, sellers or both,
significant dependence on information exchange, large transaction volume and
user acceptance of the Internet.

Objectives and strategy

Amexdrug's key business objective is to become a leading full-line wholesale
distributor of pharmaceuticals, over-the-counter products, health and beauty
care products and nutritional supplements, with an emphasis on online sales.

To accomplish this objective, Amexdrug plans to:

          .    market its name, products and services to create brand
               recognition and generate and capture traffic on its websites;
          .    provide quality products at competitive prices and efficient
               service;
          .    develop strategic relationships that increase Amexdrug's
               product offerings; and
          .    attract and retain exceptional employees.

Sales and marketing, customer service and support

Our products are sold both through traditional wholesale distribution lines and
e-commerce venues, including our website, www.amwdrug.com. We believe our
e-commerce, business-to-business model will allow the Company to leverage its
existing wholesale distribution business, thus increasing its ability to
effectively market and distribute its products. The Company uses a variety of
programs to stimulate demand for its products and increase traffic to its
websites, including a direct sales force, telemarketing, blast faxing and
advertising.

                                  Direct sales

The Company maintains employees to act as its direct sales force to target
organizations that buy and sell the products it carries.

                                  Telemarketing

The Company maintains an in-house telemarketing group for use in customer
prospecting, lead generation and lead follow-up.

                                       6
<PAGE>


                                  Blast faxing

The Company has an automated system which it uses to fax weekly updates to its
customers informing them of special offers during the week.

                                   Advertising

The Company advertises in trade journals, and at trade shows, and the Company
will seek to engage in co-branding arrangements in the future. In addition to
strategic agreements and traditional advertising, the Company, will, as revenue
allows, implement online sales and marketing techniques in an attempt to
increase brand recognition and direct traffic to its website. Some of these
techniques may include banner ads on search engine websites and Internet
directories, direct links from healthcare home pages, and mass e-mailings.

                          Customer service and support

Amexdrug believes that it can establish and maintain long-term relationships
with its customers and encourage repeat visits if, among other things, the
Company has excellent customer support and service. The Company currently offers
information regarding its products and services and answers customer questions
about the ordering process, and investigates the status of orders, shipments and
payments. A customer can access the Company by fax or e-mail by following
prompts located on the Company's website or by calling the Company's toll-free
telephone line.

                              Promotion of website

As revenue allows, the Company will promote, advertise and increase recognition
of its website through a variety of marketing and promotional techniques,
including:

          .    developing co-marketing agreements with major online sites and
               services;

          .    enhancing online content and ease of use of its website; .
               enhancing customer service and technical support;

          .    advertising in trade journals and at industry trade shows; .
               conducting an ongoing public relations campaign; and

          .    developing other business alliances and partnerships.

Distribution

The Company distributes products from its facility in Portland, Oregon. The
Company fills orders with a combination of existing inventory and products it
orders from suppliers. Currently, customers are receiving their products within
24 to 48 hours of order placement. As funds allow, the Company will increase its
in-house inventory of products to allow for shorter delivery times.

Purchasing

The Company purchases its products primarily from manufacturers and secondarily
from other wholesalers and distributors. The Company's purchasing department
constantly monitors the market to take advantage of periodic volume discounts,
market discounts and pricing changes.

                                       7
<PAGE>


Technology and security

The Company website is hosted and maintained by a third party. This provider
delivers a secure platform for server hosting, including various safety features
to protect the information residing in its servers. Moreover, the Company does
not release information about its customers to third parties without the prior
written consent of its customers unless otherwise required by law.

Notwithstanding these precautions, the Company cannot assure that the security
mechanisms will prevent security breaches or service breakdowns. Despite the
implemented security measures, servers can be vulnerable to computer viruses,
physical or electronic break-ins or other similar disruptions. Such a disruption
could lead to interruptions or delays in service, loss of data, or an inability
to accept and fulfill online customer orders. Any of these events could
materially affect the Company's business.

Management information system

The Company's information system is maintained on an IBM AS 400 platform. The
accounting information for sales, purchases, perpetual inventory transactions,
cash receipts and disbursements and sophisticated management reports are
provided timely for analytical and bookkeeping purposes. Also, the order entry
system was designed specifically for the Company and allows its customers to
order product 24 hours per day either via fax, internet or phone modem. The
system provides data to management enabling it to review sales trends and
customer base, monitor inventory levels, credit and collection issues, and
purchasing frequency and cost anticipation. Communication and availability of
data is possible through a local area network ring.

Competition

Amexdrug faces strong competition both in price and service from national,
regional and local full-line, short-line and specialty wholesalers, service
merchandisers, self-warehousing chains and from manufacturers engaged in direct
distribution. Many of our current and potential competitors have longer
operating histories and much larger customer bases than we have. In addition,
many of our competitors have greater brand recognition and significantly greater
financial, marketing and other resources. To compete successfully, we have had
to constantly monitor our competitive situation and develop strategies to allow
us to compete with other companies who are able to:

     .    secure merchandise from vendors on more favorable terms;

     .    devote greater resources to marketing and promotional campaigns; and

     .    adopt more aggressive pricing or inventory availability policies.

In addition, many of our competitors have developed or may be able to develop
e-commerce operations that compete with our e-commerce operations, and may be
able to devote substantially more resources to website development and systems
development than we do. The online commerce market is new, rapidly evolving and
intensely competitive. The Company expects competition to intensify in the
future because barriers to entry are minimal, and current and new competitors
can launch new websites at relatively low cost. The Company believes that the
critical success factors for companies seeking to create Internet
business-to-business e-commerce solutions include the following:


                                       8
<PAGE>

     .    breadth and depth of product offerings;

     .    brand recognition;

     .    depth of existing customer base; and

     .    ease of use and convenience.

Unlike other well-publicized product categories such as online book or compact
disc retailing, there is no current market leader in its online business-to-
business market segment. The Company's immediate goal is to position itself as a
leading business-to-business e-commerce and online trade exchange provider for,
pharmaceuticals, over-the-counter products, health and beauty care products and
nutritional supplements. To that end, we believe that our early entry into the
online market may enable us to establish critical competitive advantages over
future competitors. We believe that such competitive advantages include:

     .    the establishment of a recognizable brand;

     .    the development of online marketing and media relationships;

     .    the development of important relationships with manufacturers,
          distributors, wholesalers and content providers; and

     .    exposure to an existing customer base.

However, competitive pressures created by any one of its current or future
competitors, or by its competitors collectively, could materially affect the
Company's business. We believe that the principal competitive factors in its
market are and will be:

         . brand recognition             . selection
         . speed and accessibility       . customer service
         . quality of site content       . reliability and speed of
                                           fulfillment
         . convenience                   . price

Government regulations and legal uncertainties

                              Healthcare regulation
                              ---------------------

The manufacturing, packaging, labeling, advertising, promotion, distribution and
sale of most of the products we distribute are subject to regulation by numerous
governmental agencies, particularly the United States Food and Drug
Administration, which regulates most of the products we distribute under the
Federal Food, Drug and Cosmetic Act, and the United States Federal Trade
Commission, which regulates the advertising of many of the products we
distribute under the Federal Trade Commission Act. The products we distribute
are also subject to regulation by, among other regulatory agencies, the Consumer
Product Safety Commission, the United States Department of Agriculture, the
United States Department of Environmental Regulation and the Occupational Safety
and Health Administration. The manufacturing, labeling and advertising of the
products we distribute is also regulated by the Occupational Safety and Health
Administration through various state and local agencies.

Furthermore, Amexdrug and/or its customers are subject to extensive licensing
requirements and comprehensive regulation governing various aspects of the
healthcare delivery system, including the so called "fraud and abuse" laws. The
fraud and abuse laws preclude:

     .    persons from soliciting, offering, receiving or paying any
          remuneration in order to induce the referral of a patient for
          treatment or for inducing the ordering or purchasing of items or

                                       9
<PAGE>

          services that are in any way paid for by Medicare or Medicaid, and

     .    physicians from making referrals to certain entities with which they
          have a financial relationship.

The fraud and abuse laws and regulations are broad in scope and are subject to
frequent modification and varied interpretations. Significant criminal, civil
and administrative sanctions may be imposed for violation of these laws and
regulations.

The Company's advertising of dietary supplement products is also subject to
regulation by the Federal Trade Commission under the Federal Trade Commission
Act, in addition to state and local regulation. The Federal Trade Commission Act
prohibits unfair methods of competition and unfair or deceptive acts or
practices in or affecting commerce. The Federal Trade Commission Act also
provides that the dissemination or the causing to be disseminated of any false
advertisement pertaining to drugs or foods, which would include dietary
supplements, is an unfair or deceptive act or practice. Under the Federal Trade
Commission's Substantiation Doctrine, an advertiser is required to have a
"reasonable basis" for all objective product claims before the claims are made.

Failure to adequately substantiate claims may be considered either deceptive or
unfair practices. Pursuant to this Federal Trade Commission requirement, the
Company is required to have adequate substantiation for all material advertising
claims made for its products.

The Company may be subject to additional laws or regulations by the Food and
Drug Administration or other federal, state or foreign regulatory authorities,
the repeal of laws or regulations which the Company considers favorable, such as
the Dietary Supplement Health and Education Act of 1994, or more stringent
interpretations of current laws or regulations, from time to time in the future.
We cannot predict the nature of such future laws, regulations, interpretations
or applications, nor can we predict what effect additional governmental
regulations or administrative orders, when and if promulgated, would have on our
business in the future. The Food and Drug Administration or other governmental
regulatory bodies could, however, require the reformulation of certain products
to meet new standards, the recall or discontinuance of certain products not able
to be reformulated, imposition of additional record keeping requirements,
expanded documentation of the properties of certain products, expanded or
different labeling and scientific substantiation. Any or all of such
requirements could have a material and adverse effect on our business.

The products we distribute function within the structure of the healthcare
financing and reimbursement system of the United States. As a result of a wide
variety of political, economic and regulatory influences, this system is
currently under intense scrutiny and subject to fundamental changes. In recent
years, the system has changed significantly in an effort to reduce costs. These
changes include increased use of managed care, cuts in Medicare, consolidation
of pharmaceutical and medical-surgical supply distributors, and the development
of large, sophisticated purchasing groups. In addition, a variety of new
approaches have been proposed to continue to reduce cost, including mandated
basic healthcare benefits and controls on healthcare spending through
limitations on the growth of private health insurance premiums and Medicare and
Medicaid spending. The Company anticipates that Congress and state legislatures
will continue to review and assess alternative healthcare delivery systems and
payment methods and that public debate with respect to these issues will likely
continue in the future. Because of uncertainty regarding the ultimate features

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<PAGE>

of reform initiatives and their enactment and implementation, the Company cannot
predict which, if any, of such reform proposals will be adopted, when they may
be adopted, or what impact they may have on the Company. The Company expects the
healthcare industry to continue to change significantly in the future. Some of
these changes, such as a reduction in governmental support of healthcare
services or adverse changes in legislation or regulations governing the privacy
of patient information, or the delivery of pricing of pharmaceuticals and
healthcare services or mandated benefits, may cause healthcare industry
participants to greatly reduce the amount of the Company's products and services
they purchase or the price they are willing to pay for the products we
distribute. Changes in pharmaceutical manufacturers' pricing or distribution
policies could also significantly reduce our income.

While the Company uses its best efforts to adhere to the regulatory and
licensing requirements, as well as any other requirements affecting the products
we distribute, compliance with these often requires subjective legislative
interpretation. Consequently, we cannot assure that our compliance efforts will
be deemed sufficient by regulatory agencies and commissions enforcing these
requirements. Violation of these regulations may result in civil and criminal
penalties, which could materially and adversely affect our operations.

                               Internet regulation
                               -------------------

Few laws currently regulate the Internet. Because of the Internet's popularity
and increasing use, new laws and regulations may be adopted. Such laws and
regulations may cover issues such as:

           . user privacy             . distribution
           . pricing                  . taxation
           . content                  . characteristics and quality of
                                        products
           . copyrights               . services

Laws and regulations directly applicable to electronic commerce or Internet
communications are becoming more prevalent. We believe that our use of third
party material on our website is permitted under current provisions of copyright
law. Because legal rights to certain aspects of Internet content and commerce
are not clearly settled, our ability to rely upon exemptions or defenses under
copyright law is uncertain. Also, although not yet enacted, Congress is
considering laws regarding Internet taxation. In addition, various jurisdictions
already have enacted laws that are not specifically directed to electronic
commerce but that could affect its business. The applicability of many of these
laws to the Internet is uncertain and could expose the Company to substantial
liability. Any new legislation or regulation regarding the Internet, or the
application of existing laws and regulations to the Internet, could materially
and adversely affect the Company. If the Company were alleged to violate
federal, state or foreign, civil or criminal law, even if the Company could
successfully defend such claims, it could materially and adversely affect the
Company.

Additionally, several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission in the same manner as other telecommunications services. Furthermore,
local telephone carriers have petitioned the Federal Communications Commission
to regulate Internet service providers and online service providers in a manner
similar to long distance telephone carriers and to impose access fees on such
providers. If either of these petitions are granted, the costs of communicating
on the Internet could increase substantially. This, in turn, could slow the

                                       11
<PAGE>

growth of use of the Internet. Any such legislation or regulation could
materially and adversely affect its business, financial condition and operating
results.

Proprietary rights

We believe that protecting the Company's trademarks and registered domain name
is important to our business strategy of building strong brand name recognition
and that such trademarks have significant value in the marketing of the
Company's products. To protect our proprietary rights, the Company will rely on
copyright, trademark and trade secret laws, confidentiality agreements with
employees and third parties, and license agreements with consultants, vendors
and customers. Despite such protections, however, we may be unable to fully
protect our intellectual property.

Dependence on major suppliers

During the year ended December 31, 2003 purchases from two suppliers accounted
for 35% and 21% of our total purchases, respectively. During the year ended
December 31, 2002 purchases from three suppliers accounted for 65%, 14% and 10%
of our total purchases, respectively. We presently enjoy a good relationship
with our suppliers. If for any reason our business with our suppliers was
interrupted or discontinued in the future, we would be able to acquire most, if
not all, of the same products from other suppliers at similar competitive
prices.

Dependence on major customers

One of our customers accounted for approximately 11% of our sales during the
year ended December 31, 2003. None of our customers accounted for more than 10%
of our sales during the year ended December 31, 2002.

Employees

The Company currently employs 7 employees. Labor unions do not represent any of
these employees. The Company considers its employee relations to be good.
Competition for qualified personnel in its industry is intense, particularly for
technical staff responsible for marketing, advertising, web development, and
general and administrative activities.

Employees will be permitted to participate in employee benefit plans of the
Company that may be in effect from time to time, to the extent eligible.

Physical facilities

The Company's principal business operations are housed in 800 square feet of
office space and 1,200 square feet of warehouse space in Portland, Oregon. The
Company leases this space under a two-year lease agreement. Rent for the first
year, which ended April 30, 2003, was $1,528 per month. Rent for the second year
is approximately $1,650 per month. The lease expires in April 2004. The Company
is currently negotiating a one year extension of its lease. The Company believes
this space will be sufficient for the next twelve months.


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The Company's principal executive offices are located in Beverly Hills,
California. The Company leases approximately 800 square feet of office space for
approximately $1,000 per month. This space is leased on a month to month basis.
The Company believes this space will be sufficient for at least the next twelve
months.

Recent Company history prior to the acquisition of Allied Med, Inc.

The Company was incorporated under the laws of the State of California on April
30, 1963 with authorized common stock of 10,000,000 shares at a par value of
$.10 and 1,000,000 preferred shares with a par value of $1.00 under the name of
Harlyn Products, Inc. Harlyn Products, Inc. was engaged in the business of
selling jewelry to department stores until the mid-1990s.

Solely for the purpose of changing domicile from California to Nevada, on
December 12, 2001, Amexdrug Corporation, a California corporation, entered into
a certain Merger Agreement with a newly formed, wholly-owned subsidiary Nevada
corporation named Amexdrug Corporation. The Nevada corporation had been
incorporated on December 4, 2001. As a result of the merger, which became
effective on December 17, 2001, the Company became a Nevada corporation and the
separate existence of the California corporation ceased. At the time of the
merger, the Company changed its fiscal year end from June 30 to December 31.

Asset acquisitions following the acquisition of Allied Med, Inc.

In December 2002, Jack Amin's wife contributed four undeveloped parcels of real
property to Allied Med, Inc. as an additional capital contribution to the
Company. In October 2003, Jack Amin's wife contributed an additional four
undeveloped parcels of real property to Allied Med, Inc. as an additional
capital contribution to the Company. These eight undeveloped parcels of real
property are described in more detail under "Item 2. Description of Properties -
Additional Properties."

In October 2003, Allied Med, Inc. acquired 100% of the assets of Royal Health
Care Company. Royal Health Care Company is a health and beauty company which has
sold specially manufactured facial and body creams, arthritic pain relief
medications and an exclusive patented hair care product to pharmacies, beauty
salons, beauty supply stores and other fine shops. Royal Health Care Company
uses the highest quality ingredients for the finest quality products. Each
product has been formulated with the essential ingredients and plant extracts to
achieve optimum potential and quality. Royal Health Care Company products are
manufactured by a third party in an FDA approved manufacturing facility.

The Royal Health Care Company assets acquired include the "Royal Health Care
Company" name, logo, and related trademarks, all formulas to products
manufactured for sale under the Royal Health Care Company name, and the Royal
Health Care Company list of customers. These intellectual property rights were
acquired without cost from a company in which Jack Amin's wife is a principal
shareholder. Mr. Amin is the CEO and Chairman of Amexdrug Corporation and Allied
Med, Inc. Management believes this acquisition will provide the Company with an
opportunity to increase the number of products sold by the Company, and expand
the Company's customer base.


                                       13
<PAGE>

 ------------------------------------------------------------------------------
                        ITEM 2. DESCRIPTION OF PROPERTIES
 ------------------------------------------------------------------------------

Operating facilities

Amexdrug's operating facilities are located at 2519 North Hayden Island Drive,
Portland, Oregon 97217. Amexdrug leases approximately 2,000 square feet of
building space for its operating facilities, which includes four offices in
approximately 800 square feet and a warehouse that occupies the remaining 1,200
square feet.

Amexdrug leases its operating facilities under an operating lease from an
unrelated third party. The present lease will expire in April 2004. The monthly
rental payment under this lease is approximately $1,650 per month. We believe
this space will be sufficient for the next twelve months.

Executive offices

Amexdrug's executive offices are located at 8909 W. Olympic Boulevard, Suite
112, Beverly Hills, California 90211, and consists of three offices and a
reception area comprising approximately 800 square feet.

Amexdrug leases its executive facilities on a month to month basis under an oral
lease agreement from an unrelated third party. The monthly lease payment under
this lease is approximately $1,000.

Additional properties

Effective December 20, 2002, Jack Amin and his wife contributed four undeveloped
parcels of real property to Allied Med, Inc. as an additional capital
contribution to the Company. In October 2003, Mrs. Amin contributed four
additional undeveloped parcels of real property to Allied Med, Inc. as an
additional contribution to capital. The Company did not pay anything to Mr. or
Mrs. Amin for the properties. The properties are held by the Company for
investment purposes. A description of each of the eight properties has been
included below:

     1. One property is located in San Bernardino County, California and is
approximately two and one-half (2.5) acres in size. The property is not
encumbered by any mortgage, trust deed or other encumbrance. The property is
undeveloped and vacant. The Company has no present plans to develop or use the
property in its business. The Company intends to hold the property for
investment purposes. The property may eventually be sold by the Company in the
future to generate cash that can be used to fund operations and possible
expansion of the Company's business.

     2. One property is located in San Bernardino County, California and is
approximately five (5) acres in size. The property is not encumbered by any
mortgage, trust deed or other encumbrance. The property is undeveloped and
vacant. The Company has no present plans to develop or use the property in its
business. The Company intends to hold the property for investment purposes. The
property may eventually be sold by the Company in the future to generate cash
that can be used to fund operations and possible expansion of the Company's
business.

     3. One property is located in Los Angeles County, California and is
approximately two and one-half (2.5) acres in size. The property is not
encumbered by any mortgage, trust deed or other encumbrance. The property is

                                       14
<PAGE>

undeveloped and vacant. The Company has no present plans to develop or use the
property in its business. The Company intends to hold the property for
investment purposes. The property may eventually be sold by the Company in the
future to generate cash that can be used to fund operations and possible
expansion of the Company's business.

     4. One property is located in Lake County, Oregon and is less than one-half
(0.5) acre in size. The property is not encumbered by any mortgage, trust deed
or other encumbrance. The property is undeveloped and vacant. The Company has no
present plans to develop or use the property in its business. The Company
intends to hold the property for investment purposes. The property may
eventually be sold by the Company in the future to generate cash that can be
used to fund operations and possible expansion of the Company's business.

     5. One property is located in San Bernardino County, California and is
approximately two and one-half (2.5) acres in size. The property is not
encumbered by any mortgage, trust deed or other encumbrance. The property is
undeveloped and vacant. The Company has no present plans to develop or use the
property in its business. The Company intends to hold the property for
investment purposes. The property may eventually be sold by the Company in the
future to generate cash that can be used to fund operations and possible
expansion of the Company's business.

     6. One property is located in San Bernardino County, California and is
approximately five (5) acres in size. The property is not encumbered by any
mortgage, trust deed or other encumbrance. The property is undeveloped and
vacant. The Company has no present plans to develop or use the property in its
business. The Company intends to hold the property for investment purposes. The
property may eventually be sold by the Company in the future to generate cash
that can be used to fund operations and possible expansion of the Company's
business.

     7. One property is located in San Bernardino County, California and is
approximately three (3) acres in size. The property is not encumbered by any
mortgage, trust deed or other encumbrance. The property is undeveloped and
vacant. The Company has no present plans to develop or use the property in its
business. The Company intends to hold the property for investment purposes. The
property may eventually be sold by the Company in the future to generate cash
that can be used to fund operations and possible expansion of the Company's
business.

     8. One property is located in San Bernardino County, California and is
approximately three (3) acres in size. The property is not encumbered by any
mortgage, trust deed or other encumbrance. The property is undeveloped and
vacant. The Company has no present plans to develop or use the property in its
business. The Company intends to hold the property for investment purposes. The
property may eventually be sold by the Company in the future to generate cash
that can be used to fund operations and possible expansion of the Company's
business.

                                       15
<PAGE>



------------------------------------------------------------------------------
                            ITEM 3. LEGAL PROCEEDINGS
------------------------------------------------------------------------------

Amexdrug is a party to material pending legal proceedings which are described
below. To the best of Amexdrug's knowledge, no governmental authority or other
party has threatened or is contemplating the filing of any material legal
proceeding against Amexdrug, except as described below.

On June 9, 2003 a lawsuit was filed in the Superior Court of the State of
California, County of Los Angeles against the Company, its predecessor
corporation Amexdrug Corporation, a California corporation, its wholly owned
subsidiary Allied Med, Inc., and Jack Amin. The plaintiffs allege in the
complaint that the parties entered into a one page finder's agreement on April
10, 2000 relating to the acquisition of Harlyn Products, Inc., and that the
plaintiffs are entitled to receive a finder's fee equal to 7.5% (approximately
603,959 shares) of the fully diluted shares of the Company with a value not less
than $600,000 and unspecified profits. Plaintiffs allege causes of action for
breach of contract, for specific performance, for services rendered and for
unjust enrichment. Plaintiffs seek compensation for damages, legal fees, costs
and interest. The Company denies any liability, and intends to vigorously defend
the lawsuit.

In response to an action initiated by the Company against one of its vendors,
the vendor filed a counterclaim for $365,603, plus costs and attorney fees. At
dispute are pharmaceutical products the Company contends were nonconforming. In
its action, the Company seeks damages for losses suffered as a result of the
delivery of non-conforming products. The case is in the early stages of
discovery. The Company intends to prosecute its action and defend the
counterclaim vigorously.

The Franchise Tax Board of the State of California has asserted that Amexdrug
Corporation (formerly Harlyn Products, Inc.) owes approximately $544,822 in
franchise taxes from periods prior to April 2000. However, as stipulated in the
bankruptcy court's order dated April 25, 2000, Jack Amin purchased 1,000,000
common shares of Harlyn Products, Inc. free of any and all liens and
encumbrances. Accordingly, management contends that the Company has no liability
relating to this claim.

------------------------------------------------------------------------------
          ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
-----------------------------------------------------------------------------

No matter was submitted to a vote of our security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report. The merger which occurred in December 2001 to
change the Company's domicile from California to Nevada was accomplished without
a vote of the public company's shareholders, as permitted by applicable
corporate law.

                                       16
<PAGE>

                                     PART II

------------------------------------------------------------------------------
        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
------------------------------------------------------------------------------

Market information

Our common stock is presently traded in the over-the-counter market and quoted
on the National Association of Securities Dealers' OTC Bulletin Board under the
ticker symbol "AXRX.OB". The shares are thinly traded and a limited market
presently exists for the shares. The following table describes, for the
respective periods indicated, the prices of Amexdrug common stock in the
over-the-counter market, based on inter-dealer bid prices, without retail
mark-up, mark-down or commissions and may not necessarily represent actual
transactions. The prices have been adjusted to reflect a 1 for 100 reverse split
of Amexdrug's common stock which occurred August 3, 2001. The quotations have
been provided by market makers in common stock and/or Pink Sheets LLC. The
prices have been adjusted to reflect a 1 for 100 reverse split of Amexdrug's
common stock which occurred August 3, 2001.

Quarter ended                 High bid          Low bid
-------------                 --------          -------

March 31, 2001                 $1.50             $0.10
June 30, 2001                  $6.00             $2.70
September 30, 2001             $3.00             $0.10
December 31, 2001              $0.50             $0.25
March 31, 2002                 $1.01             $0.25
June 30, 2002                  $3.00             $0.60
September 30, 2002             $2.80             $0.55
December 31, 2002              $4.95             $1.30
March 31, 2003                 $5.90             $4.05
June 30, 2003                  $4.05             $2.00
September 30, 2003             $2.15             $1.80
December 31, 2003              $2.80             $1.90

Holders

The number of record holders of Amexdrug's common stock as of March 26, 2004 is
approximately 200.

Dividends

Amexdrug has not declared any cash dividends with respect to its common stock
during the last two fiscal years, and we do not intend to declare dividends in
the foreseeable future. There are no material restrictions limiting, or that are
likely to limit, Amexdrug's ability to pay dividends on our securities, except
for any applicable limitations under Nevada corporate law.

Recent sales of unregistered securities

During the past three years, Amexdrug has sold the following shares of its
common stock without registering them under the Securities Act of 1933:



                                       17
<PAGE>

     o    On December 31, 2001, Jack Amin exchanged all of the issued and
          outstanding shares of Allied Med, Inc. to Amexdrug for 7,000,000
          shares of Amexdrug common stock. In addition, Amexdrug assumed an
          obligation of Mr. Amin to pay a $100,000 note payable to Allied Med,
          Inc., and all accrued interest thereon.

With respect to the sale of Amexdrug common stock described above, Amexdrug
relied on the Section 4(2) exemption from securities registration under the
federal securities laws for transactions not involving any public offering. No
advertising or general solicitation was employed in offering the shares. The
shares were sold to an accredited investor. The securities were offered for
investment purposes only and not for the purpose of resale or distribution, and
the transfer thereof was appropriately restricted by Amexdrug.

In the private offering, the securities were sold directly by Amexdrug through
its officers and directors without the payment of any commissions or other
offering compensation. No underwriters were engaged to sell the securities
offered.

------------------------------------------------------------------------------
        ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------------------------------------------------------------------------------

Overview

Amexdrug Corporation is located 8909 West Olympic Boulevard, Suite 112, Beverly
Hills, California 90211. Its phone number is (310) 855-0475. Its fax number is
(310) 855-0477. Its website is www.amexdrug.com. The President of Amexdrug has
had experience working in the pharmaceutical industry for the past 20 years.

Through its wholly-owned subsidiary, Allied Med, Inc., Amexdrug is engaged in
the pharmaceutical wholesale business of selling brand name and generic
pharmaceutical products, over-the-counter (OTC) and health and beauty products
in 7 or 8 states. Amexdrug is expanding its business, and it would like to
eventually sell and distribute products in all 50 states.

Amexdrug Corporation was initially incorporated under the laws of the State of
California on April 30, 1963 under the name of Harlyn Products, Inc. Harlyn
Products, Inc. was engaged in the business of selling jewelry to department
stores and retail jewelry stores until the mid-1990s.

The name of the Company was changed to Amexdrug Corporation in April 2000 to
reflect the change in the Company's business to the sale of pharmaceutical
products. The officers and directors of the Company also changed in April 2000.
The domicile of the Company was changed from California to Nevada in December
2001. At that time the Company changed its fiscal year end from June 30 to
December 31.

On December 31, 2001, Amexdrug acquired all of the issued and outstanding common
shares of Allied Med, Inc. ("Allied") in a share exchange. Amexdrug acquired all
50,000 issued and outstanding shares of Allied common stock from its sole
shareholder, Mr. Jack Amin, in exchange for 7,000,000 restricted common shares
of Amexdrug and the assumption of a $100,000 promissory note, and all accrued
interest thereon owed by Mr. Amin to Allied. At all times during the
negotiations of the transaction, Mr. Amin was an officer, director and
controlling shareholder of both companies. Consideration for the acquisition was

                                       18
<PAGE>

determined through negotiations between the boards of directors of both
companies and was based on Allied's past operating history and future potential
growth.

Allied was formed as an Oregon corporation in October 1997, to operate in the
pharmaceutical wholesale business of selling brand name and generic
pharmaceutical products, over-the-counter (OTC) and health and beauty products.
In 1998, Allied's gross sales were approximately $2.8 million. In 1999, Allied's
gross sales exceeded $5 million. In 2000, Allied's gross sales exceeded $8
million. In 2001, Allied's gross sales were approximately $21.2 million. In
2002, Allied's gross sales were approximately $22.2 million. In 2003, Allied's
gross sales were approximately $11.7 million.

Amexdrug has assumed the operations of Allied as its primary operations, and
Amexdrug intends to build on the pharmaceutical wholesale operations of Allied.

The accompanying financial information includes the operations of Allied Med,
Inc. for all periods presented and the operations of Amexdrug Corporation from
April 25, 2000.

Results of operations

For the year ended December 31, 2003, Amexdrug reported sales of $11,705,672,
comprised entirely of income from Allied Med, Inc.'s pharmaceutical wholesale
business of selling brand name and generic pharmaceutical products, and
over-the-counter (OTC) and health and beauty products. This was $10,544,280 less
than the $22,249,952 of sales reported for the year ended December 31, 2002.
Cost of goods sold for the year ended December 31, 2003 was $11,261,049, a
decrease of $10,367,423 from the $21,628,472 cost of goods sold for the year
ended December 31, 2002. During the year ended December 31, 2003 gross profit
declined by $176,857 to $444,623 or 3.8% of sales from the $621,480 or 2.8% of
sales recorded for the year ended December 31, 2002.

Selling, general and administrative expense was $411,475 for the year ended
December 31, 2003, a decrease of $221,629 from the $633,104 recorded for the
year ended December 31, 2002. This decrease in selling, general and
administrative expense is attributable to a decrease in expenses related to the
decrease in the Company's operations.

During the year ended December 31, 2003, Amexdrug experienced net income of
$25,021, as compared to the $18,040 net loss incurred for the year ended
December 30, 2002. Amexdrug's net income during the year ended December 31, 2003
(as opposed to a net loss in the prior year) is attributable to increases in
profit margins in prescription generic products.

Liquidity and capital resources - December 31, 2003

Amexdrug's auditor has expressed a going concern opinion in Amexdrug's financial
statements due to Amexdrug's recurring losses from operations, as well as
Amexdrug's working capital and capital deficiency.

As of December 31, 2003, Amexdrug reported total current assets of $544,357,
comprised of cash of $1,185, accounts receivable, net of $405,244 and inventory
of $137,948. Total assets as of December 31, 2003 were $611,935, which included
total current assets of $544,357, plus net property and equipment of $66,478 and
deposits of $1,100.

Amexdrug's liabilities as of December 31, 2003 consist of accounts payable of
$586,116, checks written in excess of cash in bank of $41,024, accrued

                                       19
<PAGE>

liabilities of $14,972, current portion of capital lease obligations of $24,545
and total long-term liabilities of $36,080.

During the year ended December 31, 2003, Amexdrug used $354,878 cash in
operating activities compared to $199,861 used in the year ended December 31,
2002. The primary adjustments to reconcile net income to net cash used in
operating activities during 2003 were as follows: a decrease in accounts
receivable of $334,486, a decrease in inventory of $257,991 and a decrease in
accounts payable and accrued liabilities of $949,568. Cash decreased during the
year ended December 31, 2003 by $337,344 compared to a decrease during 2002 of
$223,475. Amexdrug had only $1,185 of cash at December 31, 2003. Operations have
primarily been funded through cash generated from operations. Management does
not anticipate that Amexdrug will need to seek additional financing during the
next twelve months.

Forward-looking statements

This document includes various forward-looking statements with respect to future
operations of Amexdrug that are subject to risks and uncertainties.
Forward-looking statements include the information concerning expectations of
future results of operations and such statements preceded by, followed by or
that otherwise include the words "believes," "expects," "anticipates,"
"intends," "estimates" or similar expressions. For those statements, Amexdrug
claims the protection of the safe harbor for forward-looking statements
contained in the Private Litigation Reform Act of 1995.

------------------------------------------------------------------------------
                          ITEM 7. FINANCIAL STATEMENTS
------------------------------------------------------------------------------

Amexdrug's consolidated audited balance sheets as of December 31, 2003 and 2002,
and Amexdrug's consolidated audited statements of operations, stockholders'
equity (deficit), and cash flows for the fiscal years ended December 31, 2003
and 2002 are included below.

                                      20
<PAGE>



                       AMEXDRUG CORPORATION AND SUBSIDIARY


                          INDEX TO FINANCIAL STATEMENTS


                                                                           Page

Report of Independent Certified Public Accountants.......................... 22

Consolidated Balance Sheets -- December 31, 2003 and 2002................... 23

Consolidated Statements of Operations for the Years Ended December 31,
   2003 and 2002............................................................ 24

Consolidated Statements of Stockholders' Deficit for the Years Ended
   December 31, 2003 and 2002............................................... 25

Consolidated Statements of Cash Flows for the Years Ended December 31,
   2003 and 2002............................................................ 26

Notes to Consolidated Financial Statements.................................. 27





                                     21
<PAGE>



HANSEN, BARNETT & MAXWELL                    Registered with the Public Company
A Professional Corporation                       Accounting Oversight Board
CERTIFIED PUBLIC ACCOUNTANTS                        an independent member of
5 Triad Center, Suite 750                                 BAKER TILLY
Salt Lake City, UT 84180-1128                            INTERNATIONAL
Phone: (801) 532-2200
Fax: (801) 532-7944
www.hbmcpas.com



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and the Stockholders
Amexdrug Corporation

We have  audited  the  accompanying  consolidated  balance  sheets  of  Amexdrug
Corporation  and  subsidiary  as of December 31, 2003 and 2002,  and the related
consolidated statements of operations,  stockholders' deficit and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Amexdrug Corporation
and subsidiary as of December 31, 2003 and 2002, and the consolidated results of
operations and cash flows of Amexdrug  Corporation  for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations.
During the year ended December 31, 2003,  the Company  experienced a decrease in
revenue.  During the years  ended  December  31,  2003 and 2002,  the  Company's
operations  used cash.  At December  31, 2003 and 2002,  the Company had working
capital deficits and capital deficiencies. These matters raise substantial doubt
about the Company's ability to continue as a going concern.  Management's  plans
in  regard  to  these  matters  are  also  described  in Note 1.  The  financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of asset carrying  amounts or the amount and  classification  of
liabilities  that might  result  should the  Company be unable to  continue as a
going concern.


                                                       HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
March 23, 2004


                                    22
<PAGE>
<TABLE>
<CAPTION>

AMEXDRUG CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS


                                                                                 December 31,    December 31,
                                                                                         2003           2002
------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>             <C>
ASSETS
Current Assets
Cash                                                                              $     1,185    $   338,529
Accounts receivable, net of allowance for doubtful accounts of $95,000
and $152,083 , and allowance for sales returns of $0 and $166,741, respectively       405,224        682,627
Inventory, plus allowance for sales returns of $0 and $162,255, respectively          137,948        395,939
------------------------------------------------------------------------------------------------------------
Total Current Assets                                                                  544,357      1,417,095
------------------------------------------------------------------------------------------------------------

Property and Equipment
Office and computer equipment                                                         133,641        119,828
Leasehold improvements                                                                 15,700         15,700
------------------------------------------------------------------------------------------------------------
Total Property and Equipment                                                          149,341        135,528
Less:  Accumulated Depreciation                                                       (82,863)       (62,220)
------------------------------------------------------------------------------------------------------------
Net Property and Equipment                                                             66,478         73,308
Investment in real estate                                                                --             --
Deposits                                                                                1,100            200
------------------------------------------------------------------------------------------------------------

Total Assets                                                                      $   611,935    $ 1,490,603
------------------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Checks written in excess of cash in bank                                          $    41,024    $      --
Accounts payable                                                                      586,116      1,535,684
Accrued liabilities                                                                    14,972          2,344
Current portion of capital lease obligations                                           24,545         18,373
------------------------------------------------------------------------------------------------------------
Total Current Liabilities                                                             666,657      1,556,401
------------------------------------------------------------------------------------------------------------

Long-Term Liabilities
Deferred income taxes                                                                   1,004           --
Capital lease obligations, net of current portion                                      35,076         50,025
------------------------------------------------------------------------------------------------------------
Total Long-Term Liabilities                                                            36,080         50,025
------------------------------------------------------------------------------------------------------------

Stockholders' Deficit
Common stock - $0.001 par value; 50,000,000 shares authorized;
8,052,783 shares issued and outstanding                                                 8,053          8,053
Additional paid-in capital                                                              7,969          7,969
Accumulated deficit                                                                  (106,824)      (131,845)
------------------------------------------------------------------------------------------------------------
Total Stockholders' Deficit                                                           (90,802)      (115,823)
------------------------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit                                       $   611,935    $ 1,490,603
------------------------------------------------------------------------------------------------------------




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

                                                    23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

AMEXDRUG CORPORATION AND ALLIED MED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS




                                                                              For the Years Ended
                                                                                  December 31,
                                                                          ----------------------------
                                                                               2003            2002
-------------------------------------------------------------------------------------------------------
<S>                                                                       <C>              <C>
Sales                                                                      $ 11,705,672    $ 22,249,952
Cost of Goods Sold                                                           11,261,049      21,628,472
-------------------------------------------------------------------------------------------------------

Gross Profit                                                                    444,623         621,480

Operating Expenses
Selling, general and administrative expense                                    (411,475)       (633,104)
Interest expense                                                                 (7,606)         (8,419)
Interest and other income                                                         1,311            --
Gain from forgiveness of debt                                                      --             8,526
-------------------------------------------------------------------------------------------------------

Income (Loss) Before Income Taxes                                                26,853         (11,517)

Provision for Income Taxes                                                       (1,832)           --
-------------------------------------------------------------------------------------------------------

Income (Loss) Before Cumluative Effect of Change in Accounting Principle         25,021         (11,517)

Cumulative effect of change in depreciation method                                 --            (6,523)
-------------------------------------------------------------------------------------------------------

Net Income (Loss)                                                                25,021         (18,040)
-------------------------------------------------------------------------------------------------------

Basic Income (Loss) Per Common Share
Income (loss) before cumulative effect of change in accounting principle   $       --      $       --
Cumulative effect of change in depreciation method                                 --              --
-------------------------------------------------------------------------------------------------------
Net income (loss)                                                          $       --      $       --
-------------------------------------------------------------------------------------------------------

Basic Weighted-Average Common Shares Outstanding                              8,052,783       8,052,783
-------------------------------------------------------------------------------------------------------

Supplemental Pro Forma Amounts Assuming Retroactive Application
of New Depreciation Method
Net loss                                                                   $       --      $    (11,517)
-------------------------------------------------------------------------------------------------------
Basic and diluted loss per common share                                    $       --      $       --
-------------------------------------------------------------------------------------------------------





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

                                                    24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>



AMEXDRUG CORPORATION AND ALLIED MED, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002




                                                                                                    Total
                                               Common Stock           Additional                  Stockholders'
                                         -------------------------    Paid-In     Accumulated      Equity
                                            Shares       Amount       Captial       Deficit       (Deficit)
------------------------------------------------------------------------------------------------------------
<S>                                       <C>             <C>          <C>         <C>            <C>
Balance, December 31, 2001                 8,052,783      $ 8,053      $ 7,969     $(113,805)     $ (97,783)

Real estate contributed by shareholder,
no additional shares issued                        -            -            -             -              -
Net loss                                           -            -            -       (18,040)       (18,040)
------------------------------------------------------------------------------------------------------------

Balance, December 31, 2002                 8,052,783        8,053        7,969      (131,845)      (115,823)

Net income                                         -            -            -        25,021         25,021
------------------------------------------------------------------------------------------------------------

Balance, December 31, 2003                 8,052,783      $ 8,053      $ 7,969     $(106,824)     $ (90,802)
------------------------------------------------------------------------------------------------------------



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

                                                     25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


AMEXDRUG CORPORATION AND ALLIED MED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                        For the Years Ended
                                                                                            December 31,
                                                                                      -----------------------
                                                                                         2003         2002
-------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>          <C>
Cash Flows from Operating Activities:
Net income (loss)                                                                      $  25,021    $ (18,040)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation                                                                              20,643       24,351
Bad debt expense                                                                         (57,083)      90,721
Cumulative effect of changes in accounting principle                                        --          6,523
Changes in operating assets and liabilities:
Accounts receivable                                                                      334,486      147,368
Inventory                                                                                257,991     (160,215)
Accounts payable                                                                        (949,568)    (232,581)
Accrued liabilities                                                                       12,628          624
Deferred income taxes                                                                      1,004
Accured settlement obligations                                                              --        (58,612)
-------------------------------------------------------------------------------------------------------------

Net Cash Used in Operating Activities                                                   (354,878)    (199,861)
-------------------------------------------------------------------------------------------------------------

Cash Flows from Investing Activities:
(Increase) Decrease in deposits                                                             (900)       2,642
-------------------------------------------------------------------------------------------------------------

Net Cash Provided by (Used in) Investing Activities                                         (900)       2,642
-------------------------------------------------------------------------------------------------------------

Cash Flows from Financing Activities:
Checks written in excess of cash in bank                                                  41,024         --
Principal payments on capital lease obligations                                          (22,590)     (26,256)
-------------------------------------------------------------------------------------------------------------

Net Cash Provided by (Used in) Financing Activities                                       18,434      (26,256)
-------------------------------------------------------------------------------------------------------------

Net Decrease in Cash                                                                    (337,344)    (223,475)

Cash at Beginning of Period                                                              338,529      562,004
-------------------------------------------------------------------------------------------------------------

Cash at End of Period                                                                  $   1,185    $ 338,529
-------------------------------------------------------------------------------------------------------------

Supplemental Cash Flow Information:
Cash paid for interest                                                                 $   7,606    $   8,419
-------------------------------------------------------------------------------------------------------------
Property and equipment acquired under capital lease                                    $  13,813    $    --
-------------------------------------------------------------------------------------------------------------




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

                                                    26
</TABLE>
<PAGE>

                    AMEXDRUG CORPORATION AND ALLIED MED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - Organization and Nature of Operations

Organization  and Nature of  Operations  -- Allied Med,  Inc.  was  organized in
October 1997 in the State of Oregon as a wholly-owned  corporation of Jack Amin.
Allied Med,  Inc. is a  full-line,  wholesale  distributor  of  pharmaceuticals,
over-the-counter  products,  health and beauty care  products,  and  nutritional
supplements.  Allied Med, Inc.  distributes its products primarily in the United
States of America, to small and medium-sized  pharmacy chains,  alternative care
facilities and other wholesalers and retailers.

In April 2000,  the  Company  loaned  Jack Amin  $100,000 to purchase  1,000,000
shares of common stock of Harlyn Products,  Inc., a publicly-traded  Company. On
April  25,  2000,  the  sale  was  approved  and  the  shares  were   purchased.
Additionally,   there  were  52,783   additional  common  shares  that  remained
outstanding of Harlyn Products,  Inc. after a 1-for-100  reverse stock split. In
June 2000, Harlyn Products, Inc. changed its name to Amexdrug Corporation.

Harlyn Products, Inc. had no prior operations that continued after the purchase.
As a result,  the  acquisition  of the majority of its common stock by Jack Amin
was accounted for as the  acquisition of its monetary  assets,  which there were
none, for $100,000; therefore, the $100,000 payment was charged to operations of
Amexdrug  Corporation  on the date it was paid.  The  $100,000  note  payable to
Allied Med, Inc. was due on demand and bore interest at 5%.

On December  31, 2001,  Jack Amin  exchanged  all of the issued and  outstanding
common stock of Allied Med, Inc. for 7,000,000  shares of Amexdrug  Corporation.
In addition,  Amexdrug Corporation assumed the note payable and accrued interest
payable to Allied Med,  Inc.  Since this  exchange  was between  entities  under
common  control,  it was  accounted  for at historical  cost.  The  accompanying
consolidated statements of operations include the operations of Allied Med, Inc.
and  Amexdrug  Corporation  (referred  to herein,  on a combined  basis,  as the
Company) for all periods presented.  All significant  intercompany  accounts and
transactions have been eliminated in consolidation.

Principles of Consolidation - The accompanying consolidated financial statements
include the accounts of Amexdrug Corporation and its wholly-owned  subsidiaries.
Intercompany accounts and transactions have been eliminated in consolidation.

Business  Condition  -- During the year ended  December  31,  2003,  the Company
experienced a decrease in revenue of approximately  47%, or $10,554,280.  During
the years  ended  December  31, 2003 and 2002,  the  Company's  operations  used
$354,878 and $199,861 of cash, respectively.  At December 31, 2003 and 2002, the
Company had working capital deficits of $122,300 and $139,306, respectively, and
capital deficiencies of $90,992 and $115,823,  respectively. These matters raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management  believes the Company can sell certain real estate properties to fund
the needs of the Company; however, there is no assurance that management will be
successful in selling the  properties,  or if the properties are sold,  that the
proceeds  will be  sufficient  for the needs of the  Company.  The  accompanying
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.

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




                                      27
<PAGE>

                    AMEXDRUG CORPORATION AND ALLIED MED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Cash  Equivalents  --  For  purposes  of  the  statements  of  cash  flows,  all
highly-liquid  debt  instruments  purchased  with an original  maturity of three
months or less have been considered cash equivalents.

Concentrations and Credit Risk -- At December 31, 2003, the Company did not have
cash in excess of federally insured limits.

The Company's  historical revenues and receivables have been derived solely from
the pharmaceutical industry.  Although the Company primarily sells products on a
cash-on-delivery  basis,  the Company also sells  products to certain  customers
under credit terms.  The Company  performs  ongoing  credit  evaluations  of its
customers'  financial  condition and usually requires a delayed check depository
from its  customers at the date products are shipped.  The Company  maintains an
allowance for accounts receivable that may become uncollectible.

During the year ended December 31, 2003 purchases from two vendors accounted for
35% and 21% of total purchases,  respectively.  The loss of any of these vendors
could have a significant negative effect upon the Company's future operations.

Fair Value of Financial  Instruments  -- The carrying  amounts of capital  lease
obligations  approximate  their  fair  values  based on current  interest  rates
available to the Company.

Inventory -- Inventory  includes  purchased products for resale and is stated at
the lower of cost  (using  the  first-in,  first-out  method)  or market  value.
Provisions,  when required,  are made to reduce excess and expired  inventory to
its  estimated  net  realizable  value.   Although  competitive   pressures  and
pharmaceutical advancements expose the Company to the risk that estimates of the
net  realizable  value could change in the near term,  the Company's  agreements
with  most  vendors  provide  for the right of return  of  outdated  or  expired
inventory.  The Company is exposed to other ownership  related risks  associated
with inventory.

Property  and  Equipment  --  Property  and  equipment  are  stated at cost less
accumulated  depreciation.  Major additions and  improvements  are  capitalized,
while  minor  repairs  and   maintenance   costs  are  expensed  when  incurred.
Depreciation is computed using straight-line and declining-balance  methods over
the estimated useful lives of the related assets, which are as follows:

        Office and computer equipment           3 - 10 years
        Leasehold improvements                  2 - 5 years

Depreciation  expense was $20,643 and $24,351 for the years ended  December  31,
2003 and 2002,  respectively.  On  retirement  or  disposition  of property  and
equipment,  the cost and related  accumulated  depreciation and amortization are
removed from the accounts and any  resulting  gain or loss is  recognized in the
statement of operations.

Change in Accounting  Principle -- During the year ended  December 31, 2002, the
Company changed  depreciation methods from the  declining-balance  method to the
straight-line  method.  The  change  was made to more  closely  match the use of
underlying  property and equipment.  This resulted in a decrease in depreciation
expense for the year of $15,801.  Under the prior method,  depreciation  expense
would have been approximately  $41,060.  The effect of the change in 2002 was an
increase of net loss by approximately  $6,523. The cumulative effect of applying
the new method to years prior to 2002 was included in the results of  operations
of 2002.

Investment  in Real  Estate  -- On  December  19,  2002,  Jack Amin and his wife
contributed  four parcels of real estate to the Company.  On September 29, 2003,
another four parcels were contributed.  The real estate has been recorded at its



                                      28
<PAGE>


                    AMEXDRUG CORPORATION AND ALLIED MED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


historical  cost of $0. The real estate is not used in the Company's  operations
and is held for sale.

Impairment of Long-Lived Assets -- The Company reviews its long-lived assets for
impairment when events or changes in circumstances  indicate that their carrying
value may not be recoverable. The Company evaluates, at each balance sheet date,
whether  events  and   circumstances   have  occurred  which  indicate  possible
impairment.  The Company uses an estimate of future  undiscounted net cash flows
from the related asset or group of assets over their remaining life in measuring
whether the assets are recoverable. As of December 31, 2003, the Company did not
consider any of its long-lived assets to be impaired.

Revenue  Recognition  -- The  Company  generates  revenues  from the  resale  of
pharmaceuticals,  over-the-counter products, health and beauty care products and
nutritional supplements.  The Company accounts for these revenues at the time of
shipment  to the  customer.  An  allowance  for sales  returns is  provided  for
products sold on a  cash-on-delivery  basis that are not accepted or paid for by
the customer.

Income Taxes -- The Company  recognizes  an asset or liability  for the deferred
tax consequences of all temporary differences between the tax bases of assets or
liabilities  and their reported  amounts in the financial  statements  that will
result in  taxable or  deductible  amounts  in future  years  when the  reported
amounts of the assets or  liabilities  are recovered or settled.  These deferred
tax assets or liabilities  are measured using the enacted tax rates that will be
in effect when the differences are expected to reverse.  Deferred tax assets are
reviewed  periodically for recoverability and valuation allowances are provided,
as necessary.

Basic and  Diluted  Loss Per  Common  Share -- Basic  loss per  common  share is
computed by dividing net loss by the  weighted-average  number of common  shares
outstanding.  Diluted  loss per common share is computed by dividing net loss by
the  weighted-average  number of  commons  shares and the  dilutive  potentially
issuable common shares outstanding. As of December 31, 2003, the Company did not
have any potentially issuable common shares.

Recent  Accounting  Pronouncements  -- In May 2003 the FASB issued SFAS No. 150,
Accounting  for  Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and Equity,  which requires that certain  financial  instruments be
presented  as  liabilities  that  were  previously  presented  as  equity  or as
temporary equity.  Such instruments include mandatory  redeemable  preferred and
common  stock,  and certain  options and  warrants.  SFAS 150 is  effective  for
financial  instruments  entered  into or  modified  after May 31,  2003,  and is
generally effective at the beginning of the first interim period beginning after
June 15,  2003.  The  adoption of this  standard  had no material  effect on the
Company's financial position or results of operations.

In January 2003, the Financial  Accounting  Standards Board ("FASB") issued FASB
Interpretation  No.  46,   Consolidation  of  Variable  Interest  Entities,   an
Interpretation of Accounting Research Bulletin No. 51 ("FIN 46"). FIN 46 defined
variable interest entities and modified the requirements for their consolidation
from ownership of a controlling  voting interest to holding a majority  variable
interest and being the primary  beneficiary of the variable interest entity. The
Company  adopted FIN 46 during the year ended December 31, 2003. The adoption of
this  standard had no material  effect on the  Company's  financial  position or
results of operations.

NOTE 2 - Leases

Capital  Lease  Obligations  -- Certain  equipment is leased under capital lease
agreements.  The  following  is a summary  of assets  held under  capital  lease
agreements at December 31, 2003:




                                      29
<PAGE>

                    AMEXDRUG CORPORATION AND ALLIED MED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Property and equipment                                                $ 115,721
Less:  Accumulated amortization                                         (58,951)
-------------------------------------------------------------------------------
Net property and equipment under capital lease                        $  56,770
-------------------------------------------------------------------------------

The following is a schedule of future minimum lease payments under capital lease
agreements:

Year Ending December 31,
-------------------------------------------------------------------------------
2004                                                                  $ 28,411
2005                                                                    25,945
2006                                                                    10,888
2007                                                                       503
2008                                                                         -
-------------------------------------------------------------------------------
Total minimum lease payments                                            65,747
Less:  Amount representing interest                                     (6,126)
-------------------------------------------------------------------------------
Present value of net minimum lease payments                             59,621
Less:  Current portion                                                 (24,545)
-------------------------------------------------------------------------------
Long-term portion                                                     $ 35,076
-------------------------------------------------------------------------------


Operating  Leases  --The  Company  leases  its  operating   facilities  under  a
non-cancelable operating lease that expires during April 2004. The monthly lease
payment  in the first  year of the lease is $1,528  increasing  to $1,563 in the
second  year.  Additionally,  the  Company  leases  its  executive  offices on a
month-to-month  basis.  The monthly rental payment is $950. Rent expense for the
years ended  December 31, 2003 and 2002 was $31,835 and  $27,024,  respectively.
The following represents future payments under the non-cancelable lease:


Year Ending December 31,
-------------------------------------------------------------
2004                                                 $ 6,252
-------------------------------------------------------------
Total                                                $ 6,252
-------------------------------------------------------------



NOTE 3 - Income taxes

The provision for income taxes for the year ended December 31, 2003 consisted of
the  following  (there was not  provision  for  income  taxes for the year ended
December 31, 2002):

                                                Federal      State       Total
--------------------------------------------------------------------------------
For The Year Ended December 31, 2003
Current tax expense                             $   295     $   827     $ 1,122
Benefit of net operating loss                      (295)       --          (295)
Deferred tax expense                            $ 1,315        (310)      1,005
-------------------------------------------------------------------------------
Provision for Income Taxes                      $ 1,315     $   517     $ 1,832
-------------------------------------------------------------------------------


As of December 31, 2003 the Company had net  operating  loss carry  forwards for
federal income tax reporting purposes of $5,324 which will expire,  beginning in
2021.

The following is a reconciliation of the income tax at the federal statutory tax
rate with the  provision of income  taxes for the years ended  December 31, 2003
and 2002:


                                      30
<PAGE>


                    AMEXDRUG CORPORATION AND ALLIED MED, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                             2003         2002
--------------------------------------------------------------------------------
Income tax expense (benefit) at stautory rate (34%)         $ 9,130     $(4,225)
Non-taxable items                                            (1,004)       --
Change in valuation allowance                                (7,851)      2,602
State (tax) benefit net of federal tax                        1,557       1,623
-------------------------------------------------------------------------------
Provision For Income Taxes                                  $ 1,832     $  --
-------------------------------------------------------------------------------



The components of the net deferred tax asset (liability) as of December 31, 2003
and 2002 are as follows:

                                                          2003           2002
-------------------------------------------------------------------------------
Operating loss carry forwards                           $ 2,756         $ 7,851
Allowance for bad debts                                   4,526            --
Valuation allowance                                        --            (7,851)
-------------------------------------------------------------------------------
Net Deferred Tax Asset                                    7,282            --
Depreciation                                             (8,286)           --
-------------------------------------------------------------------------------
Net Deferred Tax Asset (Liability)                      $(1,004)        $  --
-------------------------------------------------------------------------------


NOTE 4 - RELATED PARTY TRANSACTIONS

During the year  ended  December  31,  2003,  the  Company  purchased  inventory
totaling $90,992 from Amrx Corporation,  a corporation owned by the president of
the Company. As of December 31, 2003, accounts payable to Amrx totaled $18,588.

NOTE 5 - CONTINGENCIES

On June 9,  2003 a  lawsuit  was  filed in the  Superior  Court of the  State of
California,   County  of  Los  Angeles  against  the  Company,  its  predecessor
corporation Amexdrug  Corporation,  a California  corporation,  its wholly owned
subsidiary  Allied  Med,  Inc.,  and Jack  Amin.  The  plaintiffs  allege in the
complaint that the parties  entered into a one page finder's  agreement on April
10, 2000 relating to the  acquisition  of Harlyn  Products,  Inc.,  and that the
plaintiffs  are entitled to receive a finder's fee equal to 7.5%  (approximately
603,959 shares) of the fully diluted shares of the Company with a value not less
than $600,000 and unspecified lost profits.  Plaintiffs  allege causes of action
for breach of contract, for specific performance,  for services rendered and for
unjust enrichment.  Plaintiffs seek compensation for damages,  legal fees, costs
and interest.  The Company denies any liability and intends to vigorously defend
the lawsuit,  but  currently  cannot  evaluate the  likelihood  of loss from the
claim.  Accordingly,  no liability relating to the claim has been accrued in the
accompanying financial statements.

In response to an action  initiated  by the Company  against one of its vendors,
the vendor filed a counterclaim  for $365,603,  plus costs and attorney fees. At
dispute are pharmaceutical products the Company contends were nonconforming.  In
its action,  the Company  seeks  damages for losses  suffered as a result of the
delivery  of the  non-conforming  products.  The case is in the early  stages of
discovery.  The  Company  has not  evaluated  the  likelihood  of loss  from the
counterclaim,  but intends to prosecute  its action and defend the  counterclaim
vigorously.  Accordingly,  no liability  relating to the  counterclaim  has been
accrued in the accompanying financial statements.

The  Franchise  Tax  Board of the  State of  California  has  asserted  that the
Amexdrug  Corporation  (formerly  Harlyn  Products,   Inc.)  owes  approximately
$544,822  in  franchise  taxes from  periods  prior to April 2000.  However,  as
stipulated  in the  bankruptcy  court's  order dated April 25,  2000,  Jack Amin
purchased  1,000,000 common shares of Harlyn Products,  Inc. free of any and all
liens or encumbrances.  Accordingly, management contends that the Company has no
liability  relating  to the  claim  and no  amounts  have  been  accrued  in the
accompanying financial statements.


                                      31
<PAGE>

------------------------------------------------------------------------------
            ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                       ACCOUNTING AND FINANCIAL DISCLOSURE
------------------------------------------------------------------------------

Amexdrug has had no changes in its certified public accountants or experienced
other matters required to be disclosed pursuant to Item 304 of Regulation S-B
during the two most recent fiscal years or any later interim period, except as
disclosed in a Form 8-K Current Report filed March 18, 2002.

------------------------------------------------------------------------------
                        ITEM 8A. CONTROLS AND PROCEDURES
------------------------------------------------------------------------------

(a)  Evaluation of Disclosure Controls and Procedures.

The Company's Chief Executive Officer, Jack Amin, and Chief Financial Officer,
Jack Amin, have reviewed the Company's disclosure controls and procedures as of
the end of the period covered by this report. Based upon this review, Mr. Amin
believes that the Company's disclosure controls and procedures are effective in
ensuing that material information related to the Company is made known to him by
others within the Company.

(b)  Changes in Internal Controls Over Financial Reporting.

There have been no significant changes in internal controls over financial
reporting that occurred during the fiscal period covered by this report that
have materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.


                                    PART III

------------------------------------------------------------------------------
        ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
           PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
------------------------------------------------------------------------------

Identification of directors and executive officers

The following table as of March 26, 2004, includes the name, age, and position
of each executive officer and director of Amexdrug and the term of office of
each director.


Name              Age     Position                 Director and/or Officer Since
----              ---     --------                 -----------------------------

Jack Amin          45     President, Secretary,          April 2000
                          Treasurer and Director

Rodney S. Barron,  51     Director                       December 2001
M.D.

Behrooz Meimand    55     Director                       December 2001



                                       32
<PAGE>

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

Included below is certain biographical information regarding each of the
Company's executive officers and directors.

Jack Amin has served as the President, Secretary, Treasurer and as a director of
Amexdrug since April 2000. He holds a Bachelor of Science in Electronic
Engineering from Western State College of Engineering of LA, California in 1982.
Since 1980 Mr. Amin has been engaged in various capacities, including sales and
management, within the pharmaceutical industry. Mr. Amin has served as the
President, Chief Executive Officer and director of Amexdrug's wholly-owned
subsidiary, Allied Med, Inc., a company which he founded in 1997.

Rodney S. Barron, M.D., has served as a director of Amexdrug since December
2001. Dr. Barron obtained his medical degree from New York Medical College in
1978. He then performed a residency in general surgery from 1978 to 1980, and a
residency in urology from 1980 to 1983. Dr. Barron has been involved in the
private practice of medicine in Los Angeles, California from 1983 through the
present time.

Behrooz Meimand has served as a director of Amexdrug since December 2001. Mr.
Meimand obtained a master's degree in insurance from the National University of
Iran in 1970. He has had 30 years of experience in the insurance industry. Mr.
Meimand has been the president of Behrooz Meimand Insurance Services, Inc. for a
period of time exceeding the past 5 years. Currently Mr. Meimand is also a
director of Magbid Foundation and Nessah Education & Culture Center.

Significant employees

Amexdrug has no present employees who are expected to make a significant
contribution to its business other than its current officers and directors. It
is expected that current members of management will be the only persons whose
activities will be material to Amexdrug's operations. Members of management are
the only persons who may be deemed to be promoters of Amexdrug.

Family relationships

There are no family relationships between any directors or executive officers of
Amexdrug and/or the managers of its subsidiary company, Allied Med, Inc., either
by blood or by marriage.

Involvement in certain legal proceedings

During the past five years, no present or former director, person nominated to
become a director, executive officer, promoter or control person of Amexdrug:

          (1) was a general partner or executive officer of any business which
     filed a petition in bankruptcy or against which any bankruptcy petition was
     filed, either at the time of the bankruptcy or two years prior to that
     time;

                                       33
<PAGE>

          (2) was convicted in a criminal proceeding or named subject to a
     pending criminal proceeding (excluding traffic violations and other minor
     offenses);

          (3) was subject to any order, judgment or decree, not subsequently
     reversed, suspended or vacated, of any court of competent jurisdiction,
     permanently or temporarily enjoining, barring, suspending or otherwise
     limiting his involvement in any type of business, securities or banking
     activities; or

          (4) was found by a court of competent jurisdiction (in a civil
     action), the Securities and Exchange Commission or the Commodity Futures
     Trading Commission to have violated a federal or state securities or
     commodities law, and the judgment has not been reversed, suspended or
     vacated.

Section 16(a) beneficial ownership reporting compliance

Based solely upon a review of Forms 3 and 4 furnished to the Company under Rule
16a-3(d) during its most recent fiscal year, the Company knows of no person who
was a director, officer, beneficial owner of more than ten percent of any class
of equity securities of the Company registered pursuant to Section 12
("Reporting Person") that failed to file on a timely basis any reports required
to be furnished pursuant to Section 16(a) during the most recent fiscal year.

------------------------------------------------------------------------------
                         ITEM 10. EXECUTIVE COMPENSATION
------------------------------------------------------------------------------

Cash compensation

The following table sets forth the aggregate compensation paid by Amexdrug
and/or its subsidiary, Allied Med, Inc., for services rendered during the
periods indicated:

                           SUMMARY COMPENSATION TABLE

                                        Long Term Compensation
                    Annual Compensation Awards              Payouts
                    ------------------- ------              -------
(a)        (b)       (c)     (d)    (e)     (f)       (g)       (h)   (i)

                                                     Secur-
                                                     ities          All
Name and   Year or                  Other    Rest-   Under-   LTIP  Other
Principal  Period    Salary  Bonus  Annual   ricted  lying    Pay-  Compen-
Position   Ended       ($)    ($)   Compen-  Stock   Options  outs  sation
--------------------------------------------------------------------------

Jack Amin    12/31/01 $63,592   0       0      0          0      0     0
President/   12/31/02 $29,905   0       0      0          0      0     0
Director     12/31/03 $24,000   0       0      0          0      0     0

Except as described above, no cash compensation, deferred compensation or
long-term incentive plan awards were issued or granted to Amexdrug's management
during the fiscal years ended December 31, 2003 and 2002. Further, no member of
Amexdrug's management has been granted any option or stock appreciation rights

                                       34
<PAGE>

Accordingly, no tables relating to such items have been included within this
Item.

There are no present plans whereby Amexdrug will issue any of its securities to
management, promoters, their affiliates or associates in consideration of
services rendered or otherwise, except as described herein.

Compensation of directors

Amexdrug has no arrangement for compensating its directors for their services as
directors or for serving on any committees. However, directors may be
compensated for services which they render as officers and/or as employees of
Amexdrug.

Employment contracts and termination of employment and change-in-control
arrangements

There are no employment contracts, compensatory plans or arrangements, including
payments to be received from Amexdrug with respect to any executive officer of
Amexdrug which would in any way result in payments to any such person because of
his or her resignation, retirement or other termination of employment with
Amexdrug or its subsidiary, any change in control of Amexdrug or a change in the
person's responsibilities following a change in control of Amexdrug.

Nor are there any agreements or understandings for any director or executive
officer to resign at the request of another person. None of Amexdrug's directors
or executive officers is acting on behalf of or will act at the direction of any
other person.

Amexdrug intends to enter into an employment agreement with Jack Amin in the
near future that will provide for an initial salary of $150,000 per year
retroactive to January 1, 2004, and possible bonuses as the board of directors
may determine are appropriate. In the event Amexdrug is unable to pay the full
$150,000 per year annual salary to Mr. Amin, he has indicated that he may accept
a portion of the salary in the form of Amexdrug common stock.

Compensation pursuant to plans; pension table

There were no stock awards, restricted stock awards, stock options, stock
appreciation rights, long-term incentive plan compensation or similar rights
granted to any of our officers or directors. None of our officers or directors
presently holds directly any stock options or stock purchase rights. We have no
retirement, pension, profit sharing, or other plan covering any of our officers
and directors.

We have adopted no formal stock option plans for our officers, directors and/or
employees. We reserve the right to adopt one or more stock options plans in the
future. Presently we have no plans to issue additional shares of our common or
preferred stock or options to acquire the same to our officers, directors or
their affiliates or associates.

Other compensation

None.

                                       35
<PAGE>



------------------------------------------------------------------------------
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------------

Security ownership of certain beneficial owners

The following table sets forth the share holdings of those persons who are known
to Amexdrug to be the beneficial owners of more than five percent of Amexdrug's
common stock as of March 26, 2004. Each of these persons has sole investment and
sole voting power over the shares indicated.

                                       Number                  Percent
Name and Address            of Shares Beneficially Owned       of Class
----------------            ----------------------------       --------

Jack Amin                            7,835,000                   97.3%
8909 West Olympic Blvd.
Suite 112
Beverly Hills, CA 90211

Security ownership of management

The following table sets forth the share holdings of Amexdrug's directors and
executive officers as of March 26, 2004. Each of these persons has sole
investment and sole voting power over the shares indicated.

                                       Number                  Percent
Name and Address            of Shares Beneficially Owned       of Class
----------------            ----------------------------       --------

Jack Amin                            7,835,000                   97.3%
Rodney Barron, M.D.                          0                    0.0%
Behrooz Meimand                              0                    0.0%

All directors and executive
officers as a group (3)              7,835,000                   97.3%

All common shares held by the officers, directors and principal shareholders
listed above are "restricted or control securities" and are subject to
limitations on resale. The shares may be sold in compliance with the
requirements of Rule 144, after a minimum one year holding period has been met.

Rule 13d-3 generally provides that beneficial owners of securities include any
person who directly or indirectly has or shares, voting power and/or investment
power with respect to such securities; and any person who has the right to
acquire beneficial ownership of such security within 60 days.

Any securities not outstanding which are subject to options, warrants or
conversion privileges exercisable within 60 days are treated as outstanding for
the purpose of computing the percentage of outstanding securities owned by that
person. But such securities are not treated as outstanding for the purpose of
computing the percentage of the class owned by any other person.

Changes in control

There are no present arrangements or pledges of Amexdrug's securities, known to
management, which may result in a change in control of Amexdrug.

                                       36
<PAGE>

-----------------------------------------------------------------------------
             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
------------------------------------------------------------------------------

Transactions with management and others

Except as indicated below, and for the periods indicated, there were no material
transactions, or series of similar transactions, during the last two fiscal
years ended December 31, 2003, or since December 31, 2003, or any currently
proposed transactions, or series of similar transactions, to which the Company
was or is to be party, in which the amount involved exceeds $60,000, and in
which any director or executive officer, or any security holder who is known by
the Company to own of record or beneficially more than 5% of any class of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, has an interest, other than the following:

     1. Amexdrug anticipates that it will enter into an employment agreement
with Jack Amin in the near future. It is expected that the employment agreement
will be retroactive to January 1, 2004, and that it will provide for an initial
annual salary of $150,000 and possible bonuses as the board of directors may
determine are appropriate. The employment agreement may give Mr. Amin the option
to take a portion of the salary in shares of the Company's common stock.

     2. Effective December 20, 2002 Jack Amin's wife transferred four
undeveloped parcels of real property to Allied Med, Inc. as an additional
capital contribution to the Company. The Company did not pay anything to Mrs.
Amin for the properties. The properties are held by the Company for investment
purposes. For more information concerning the properties, see "Item. 2
Description of Properties."

     3. In October 2003 Mrs. Amin transferred four undeveloped parcels of real
property to Allied Med, Inc. as an additional capital contribution to the
Company. The Company did not pay anything to Mrs. Amin for the properties. The
properties are held by the Company for investment purposes. For more information
concerning the properties, see "Item. 2 Description of Properties."

     4. During the year ended December 31, 2003 Amexdrug purchased inventory
totaling $90,992 from Amrx Corporation, a corporation owned by Jack Amin, the
Company's president. As of December 31, 2003, accounts payable to Amrx
Corporation totaled $18,588.

Parents of the company

Amexdrug has no parents, except to the extent that Mr. Amin may be deemed to be
a parent by virtue of his large percentage stockholdings of the Company's common
stock. See the caption "Security ownership of certain beneficial owners and
management" in item 11 of this report for a description of Mr. Amin's stock
ownership.


                                       37
<PAGE>

Transactions with promoters

The Company was organized more than five years ago therefore transactions
between the Company and its promoters or founders are not deemed to be material.

-----------------------------------------------------------------------------
                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------------------------------------------

(a) Exhibits

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

 2.1              Agreement and Plan of Merger
                  (to change domicile from California
                  to Nevada)*

 2.2              Agreement and Plan of Reorganization
                  (to acquire Allied Med, Inc.)**

 3.1              Articles of Incorporation***

 3.2              By-Laws***

21.1             List of Subsidiaries of Amexdrug Corporation***

31.1             Certification of Chief Executive Officer
                 pursuant to Section 302 of the Sarbanes-
                 Oxley Act of 2002

31.2             Certification of Chief Financial Officer
                 pursuant to Section 302 of the Sarbanes-
                 Oxley Act of 2002

32.1             Certification of Chief Executive Officer
                 pursuant to Section 906 of the Sarbanes-
                 Oxley Act of 2002

32.2             Certification of Chief Financial Officer
                 pursuant to Section 906 of the Sarbanes-
                 Oxley Act of 2002

                 Summaries of all exhibits contained within this
                 report are modified in their entirety by reference
                 to these Exhibits.

               *    Exhibit 2.1 is incorporated by reference from Amexdrug's
                    Form 8-K Current Report filed December 31, 2001 as Exhibit
                    10.01

               **   Exhibit 2.2 is incorporated by reference from Amexdrug's
                    Form 8-K Current Report filed January 15, 2002 as Exhibit
                    10.01

               ***  Exhibits 3.1, 3.2 and 21.1 are incorporated by reference
                    from Amexdrug's 2001 Form 10-KSB filed April 1, 2002.

                                       38
<PAGE>

(b) Reports on Form 8-K

Amexdrug filed no reports on Form 8-K during the last quarter of the period
covered by this report:

-------------------------------------------------------------------------------
                 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
-------------------------------------------------------------------------------


Audit Fees

For the fiscal years ended December 31, 2003 and 2002, our principal accountant
billed $12,387 and $16,062, respectively, for the audit of our annual financial
statements and review of financial statements included in our Form 10-QSB
filings.

Audit-Related Fees

There were $0 and $0 in fees, respectively, billed for services reasonably
related to the performance of the audit or review of our financial statements
outside of those fees disclosed above under "Audit Fees" for the fiscal years
ended December 31, 2003 and 2002.

Tax Fees

For the fiscal years ended December 31, 2003 and 2002, our principal accountant
billed us $500 and $950, respectively, for services for tax compliance, tax
advice, and tax planning work.

All Other Fees

There were $0 and $0 in other fees, respectively, billed by our principal
accountants other than those disclosed above for fiscal years ended December 31,
2002 and 2003.

Pre-Approved Policies and Procedures

Prior to engaging our accountants to perform a particular service, our board of
directors obtains an estimate for the service to be performed. All of the
services described above were approved by the board of directors in accordance
with its procedures.




                                       39
<PAGE>


------------------------------------------------------------------------------
                                   SIGNATURES
------------------------------------------------------------------------------

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                AMEXDRUG CORPORATION



Date: March 29, 2004            By /s/ Jack Amin
                                  ------------------------------------------
                                  Jack Amin, Director, President and
                                  Chief Executive Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.



Date: March 29, 2004            By /s/ Jack Amin
                                  ------------------------------------------
                                  Jack Amin, Director, President and
                                  Chief Executive Officer, Chief
                                  Financial Officer and Chief Accounting Officer



Date: March __, 2004            By
                                  ------------------------------------------
                                  Rodney Barron, M.D., Director,



Date: March 29, 2004            By /s/ Behrooz Meimand
                                  ------------------------------------------
                                  Behrooz Meimand, Director,

                                       40
<PAGE>


                                  EXHIBIT INDEX

Exhibit                                                                 Exhibit
Number            Description                                          Location

 2.1              Agreement and Plan of Merger                             *
                  (to change domicile from California

 2.2              Agreement and Plan of Reorganization                     **

 3.1              Articles of Incorporation                                ***

 3.2              By-Laws                                                  ***

21.1              List of Subsidiaries of Amexdrug                         ***
                  Corporation

31.1              Certification of Chief Executive Officer                  42
                  pursuant to Section 302 of the Sarbanes-
                  Oxley Act of 2002

31.2              Certification of Chief Financial Officer                  44
                  pursuant to Section 302 of the Sarbanes-
                  Oxley Act of 2002

32.1              Certification of Chief Executive Officer                  46
                  pursuant to Section 906 of the Sarbanes-
                  Oxley Act of 2002

32.2              Certification of Chief Financial Officer                  47
                  pursuant to Section 906 of the Sarbanes-
                  Oxley Act of 2002

                  Summaries of all exhibits contained within this report are
                  modified in their entirety by reference to these Exhibits.

               *  Exhibit 2.1 is incorporated by reference from
                  Amexdrug's Form 8-K Current Report filed December 21,
                  2001 as Exhibit No. 10.01.

              **  Exhibit 2.2 is incorporated by reference from
                  Amexdrug's Form 8-K Current Report filed January 15,
                  2002 as Exhibit No. 10.01.

             ***  Exhibit 3.1, 3.2 and 21.1 are incorporated by
                  reference from Amexdrug's 2001 Form 10-KSB filed on
                  April 1, 2002.

                                       41