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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

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

             Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                   For the Second Quarter Ended June 30, 2001
                                                -------------

                         Commission File Number: 0-21475
                                                ---------

                               EMERGENT GROUP INC.
                               -------------------
             (Exact name of registrant as specified in its charter)

                 Nevada                                     93-1215401
                 ------                                     ----------
(State of jurisdiction of Incorporation)    (I.R.S. Employer Identification No.)

                                 375 Park Avenue
                             New York, NY 10152-3699
                             -----------------------
                    (Address of principal executive offices)

                                 (212) 813-9700
                                 --------------
                         (Registrant's telephone number)

                                 Not Applicable
                                 --------------
      (Former name, address and fiscal year, if changed since last report)

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

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

      As of August 13, 2001, the registrant had a total of 49,806,959. shares of
Common Stock outstanding.

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<PAGE>

                               EMERGENT GROUP INC.

                                    FORM 10-Q

                                Table of Contents

                                                                            Page
                                                                            ----

PART I. FINANCIAL INFORMATION

 Item 1. Financial Statements (unaudited)

           Consolidated Balance Sheets as of June 30, 2001 and December 31,
             2000 (audited)                                                   3

           Consolidated Statements of Operations for the Three and Six
             Months Ended June 30, 2001 and for the Period From Inception
             (March 8, 2000) to June 30, 2000                                 4

           Consolidated Statements of Cash Flows for the Six Months Ended
             June 30, 2001 and for the Period From Inception (March 8, 2000)
             to June 30, 2000                                                 5

           Notes to Consolidated Financial Statements                         6

 Item 2. Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                             11

 Item 3. Quantitative and Qualitative Disclosure About Market Risk           14

 Item 5. Subsequent Events                                                   14

PART II. OTHER INFORMATION

 Item 6. Exhibits and Reports on Form 8-K                                    15

Signatures                                                                   16


                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                               EMERGENT GROUP INC.

                           Consolidated Balance Sheets
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                June 30, 2001    December 31, 2000
                                                               ---------------   -----------------
                                                                 (unaudited)         (audited)
<S>                                                              <C>                <C>
ASSETS
   Cash and cash equivalents                                     $         82       $        751
   Interest income receivable                                              24                 25
   Due from related entity                                                539                467
   Investments                                                          2,536              3,218
   Other assets, net                                                      740                724

                                                                 ------------       ------------
     Total assets                                                $      3,921       $      5,185
                                                                 ============       ============

LIABILITIES
   Accrued expenses                                              $        139       $        122
   Due to shareholders'                                                   941                 --

                                                                 ------------       ------------
     Total Liabilities                                                  1,080                122

STOCKHOLDERS' EQUITY
   Preferred Stock, $.001 par value, 10,000,000 authorized,
      none issued or outstanding                                           --                 --
   Common Stock, $.001 par value, 100,000,000 authorized,
      44,173,280 issued and outstanding                                    44                 44
   Additional paid-in capital                                           8,629              8,629
   Accumulated deficit                                                 (5,832)            (3,610)

                                                                 ------------       ------------
     Total stockholders' equity                                         2,841              5,063

                                                                 ------------       ------------
   Total liabilities and stockholders' equity                    $      3,921       $      5,185
                                                                 ============       ============
</TABLE>

      The accompanying notes are an integral part of these balance sheets.


                                       3
<PAGE>

                               EMERGENT GROUP INC.

                  Consolidated Statements of Income (unaudited)
                    (in thousands, except earnings per share)

<TABLE>
<CAPTION>
                                                                                                        Period from
                                                                                                         inception
                                                                                       Six Months        (March 8,)
                                                      Three Months Ended June 30,     Ended June 30,    to June 30,
                                                      ---------------------------     --------------  --------------
                                                         2001             2000             2001             2000
                                                         ----             ----             ----             ----
<S>                                                    <C>              <C>              <C>              <C>
REVENUE                                                $     --         $     --         $     --         $     --

EXPENSES:
  Realized loss on investments                              783               --            1,471               --
  Professional fees                                         157              105              313              110
  Rent expense                                               56               28              106               44
  General and administrative expenses                       275               30              444               54
  Depreciation and amortization                              37               --               73               --

                                                       --------         --------         --------         --------
  Total expenses                                          1,308              163            2,407              208

  Unrealized gain (loss) on trading investments             134           (2,457)             137           (1,113)
  Other income                                               16               --               49               --

                                                       --------         --------         --------         --------
NET LOSS                                               $ (1,158)        $ (2,620)        $ (2,221)        $ (1,321)
                                                       ========         ========         ========         ========

EARNINGS PER SHARE DATA:
  Basic and diluted earnings per share                 $  (0.03)        $  (0.07)        $  (0.05)        $  (0.03)
  Weighted average common shares
   outstanding                                           44,173           39,755           44,173           39,755
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>

                               EMERGENT GROUP INC.

                Consolidated Statements of Cash Flows (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                     Period from
                                                                                      inception
                                                                   Six Months         (March 8,)
                                                                 Ended June 30,      to June 30,
                                                                 --------------    --------------
                                                                      2001             2000
                                                                      ----             ----
<S>                                                                 <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                          $ (2,221)        $ (1,321)

Adjustments to reconcile net loss to net cash:
  Unrealized (appreciation) depreciation on investments, net            (137)           1,113
  Depreciation and amortization                                           73               --
  Realized loss on investments                                         1,471               --
  Increase in operating assets and liabilities:
     Interest income receivable                                           (1)              --
     Due from related entity                                             (97)             120
     Other assets                                                        (55)            (196)
     Accrued expenses                                                     17               --
                                                                    --------         --------
       Net cash used in operating activities                            (950)            (284)

Investing activities:
  Purchases of fixed assets                                              (34)            (222)
  Purchases of securities, net                                          (626)          (9,814)
                                                                    --------         --------
       Net cash used in investing activities                            (660)         (10,036)

Financing activities:
  Due to shareholders'                                                   941            2,840
  Contributed capital, net                                                --            7,500
                                                                    --------         --------
       Net cash provided by investing activities                         941           10,340

                                                                    --------         --------
         Net decrease in cash and cash equivalents                      (669)              20

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           751               --

                                                                    --------         --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                            $     82         $     20
                                                                    ========         ========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     Contribution of Investments by Shareholder's                   $     --         $  1,173
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       5
<PAGE>

                              EMERGENT GROUP INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements of Emergent Group
Inc. ("Company") have been prepared pursuant to the rules of the Securities and
Exchange Commission ("SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. These unaudited financial
statements should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's Annual Report on
Form-10K. In the opinion of management, the accompanying unaudited consolidated
financial statements reflect all adjustments, which are of a normal recurring
nature, necessary for a fair presentation of the results for the periods
presented.

The results of operations presented for the period from inception (March 8,
2000) to June 30, 2000 and the six months ended June 30, 2001, are not
necessarily indicative of the results to be expected for any other interim
period or any future fiscal year.

1.    BACKGROUND AND FORMATION

      Emergent Ventures, LLC ("Venture") commenced operations in the State of
      Delaware on March 8, 2000 and was formed to invest primarily in global
      private equity opportunities in information technology, health care and
      medical technology companies.

      Venture's equity capitalization consisted of a contribution of $1,173,125
      in securities by Emergent Management Company LLC ("Manager"), for a 58%
      interest of Venture, and a contribution of $7,500,000 in cash by other
      members in return for the remaining 42% interest of Venture.

      In August 2000, Venture consummated the transactions contemplated by the
      Equity Transfer Transaction ("Transfer"), all pursuant to an Equity
      Transfer and Reorganization Agreement ("Agreement"), by and among Dynamic
      International Ltd. ("Dynamic"), certain of its shareholders and Venture.

      Pursuant to and in accordance with the Agreement and immediately prior to
      the consummation of the Transfer, Dynamic transferred all of its assets
      and liabilities (other than outstanding bank debt in the amount of
      $250,000) to a wholly-owned subsidiary of Dynamic named Dynamic
      International, Inc. Dynamic International, Inc. acquired the transferred
      assets, assumed the remaining liabilities and indemnified Dynamic against
      any liabilities relating to or arising out of the transferred assets and
      the assumed liabilities. In conjunction with the Transfer, Dynamic
      International, Inc. was spun-off from Dynamic as a separate entity.

      Pursuant to the Agreement, Venture contributed substantially all of its
      assets to Dynamic in exchange for the issuance of approximately 39,000,000
      shares of Dynamic common stock to the members of Venture. Dynamic
      subsequently changed its name to Emergent Group Inc. The Company retained
      Dynamic's State of Incorporation in Nevada and it's Federal Tax
      Identification Number.

      For financial accounting purposes, the acquisition was accounted for as a
      re-capitalization by the Company as the accounting acquiror and with
      Dynamic as the accounting acquiree. After the Transfer, the former members
      of Venture became the beneficial owners of approximately 39,000,000 shares
      of Dynamic's common stock, representing approximately 90% interest in
      Dynamic. Each of the Directors of Dynamic resigned immediately prior to
      the consummation of the Transfer. The beneficial owners of the Manager
      were elected as directors and executive officers of the Company. The
      Company recorded goodwill as a result of the Transfer amounting to
      $250,000, which is being amortized over three years.

      The Company had previously announced that it intends to transition itself
      into a medical technology operating company that has a primary objective
      of launching an innovative national distribution platform leveraging its
      access to physician practice and healthcare facilities utilizing
      acquisitions of medical technology companies and employing strategic
      partner relationships. The Company believes that its initial acquisition,
      Medical Resources


                                        6
<PAGE>

      Management, Inc. ("MRM"), completed in July 2001, will provide the
      platform to facilitate the Company's efforts to acquire and/or enter into
      strategic partner relationships with other companies in the medical
      technology, equipment and distribution industry. The Company plans to
      leverage its merchant banking resources to identify and acquire and/or
      enter into strategic partnering relationships with medical technology
      companies with large market opportunities and whose potential operations
      currently are restricted by the lack of effective channels of
      distribution.

2.    SIGNIFICANT ACCOUNTING POLICIES

      The accompanying financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States.
      Significant accounting policies are as follows:

            Principles of Consolidation

            The consolidated financial statements include the accounts of all
            majority-owned subsidiaries. All significant intercompany
            transactions have been eliminated in consolidation.

            Cash and Cash Equivalents

            The Company considers all highly liquid investments with maturities
            of three months or less to be cash equivalents.

            Government Regulations and Legal Uncertainties

            U.S. companies that have more than 100 shareholders or are publicly
            traded in the U.S. and are, or hold themselves out to be engaged
            primarily in the business of investing, reinvesting or trading of
            securities are regulated under the Investment Company Act of 1940.
            Although we believe that we are actively engaged in an operating
            business and are not an investment company, we will also rely on the
            SEC rule that allows us to avoid investment company regulation so
            long as at least 55% of our total assets are represented by, and at
            least 55% of our income is derived from, majority-owned
            subsidiaries, primarily controlled companies and other assets that
            meet the requirements of that rule. To maintain compliance with this
            rule, we may be unable to sell assets, which we would otherwise want
            to sell and may need to sell assets, which we would otherwise want
            to retain. In addition, we may have to acquire additional income or
            loss generating assets that we might not otherwise have acquired and
            may need to forego opportunities to acquire interests in attractive
            companies that might be important to our business strategy. In
            addition, because our clients may not be majority-owned subsidiaries
            or primarily controlled companies either when we acquire interests
            in them or at later dates, changes in the value of our interests in
            our clients and the income/loss and revenue attributable to our
            clients could require us to register as an investment company.
            Investment Company Act regulations are inconsistent with our
            strategy of actively managing, operating and promoting collaboration
            among our network of clients, and it is not feasible for us to
            operate our business as a registered investment company. We believe
            that because of the planned structure of our interests in our
            clients and our business strategy, we will not be regulated under
            the Investment Company Act. However, we cannot assure you that the
            structure of our client interests and our business strategy will
            preclude regulation under the Investment Company Act, and we may
            need to take specific actions, which would not otherwise be in our
            best interests to avoid such regulation.

            If we fall under the definition of an investment company, and are
            unable to rely on an SEC rule that would allow us to avoid
            investment company regulation so long as at least 55% of our total
            assets are represented by, and at least 55% of our income is derived
            from assets that meet the requirements of that rule, we can rely on
            another SEC rule that would exempt us from the requirement of
            registering as an investment company through August 2001.

            Thereafter, we must either register under the Investment Company Act
            or seek an administrative exemption from regulation under the
            Investment Company Act. If, despite our efforts, we were required to
            register as an investment company, we would have to comply with
            substantive requirements under the Investment Company Act applicable
            to registered investment companies.


                                       7
<PAGE>

            These requirements include: limitations on our ability to borrow;
            limitations on our capital structure; restrictions on acquisitions
            of interests in associated companies; prohibitions on transactions
            with affiliates; restrictions on specific investments; and
            compliance with reporting, record keeping, voting, proxy disclosure
            and other rules and regulations. These rules and regulations would
            significantly change our operations and prevent us from executing
            our business model.

            The above regulations relate to the Company's historical operations
            from its inception through this quarter ending June 30, 2001. With
            the completion of its acquisition of MRM in July 2001, the Company
            will no longer continue to be subject to the above regulations.

            Interest and Dividend Income

            Transactions are accounted for on the trade date in the case of
            public market transactions or on the date of purchase in other
            cases. Interest income is recorded on the accrual basis; dividend
            income paid in cash is recorded on the date on which the payment is
            fixed, while dividend income paid in marketable securities is valued
            on the date such securities are sold.

            Related Party Transactions

            The Company engages in related party transactions with its
            controlling stockholder, certain members of management, certain of
            its directors and other entities controlled by the same beneficial
            owners of the Company. The Company is owned 58% by Emergent
            Management Company LLC. From the Company's inception in March 8,
            2000 through December 31, 2000, another entity controlled by the
            same beneficial owners of Emergent Management Company LLC paid a
            majority of the Company's operating expenses. As of June 30, 2001,
            this related entity owes the Company $539,000. As part of the
            Company's on-going financing, certain members of management have
            lent the Company $941,000. The Company has the right of offset for
            the amount it owes to related party shareholders' against the amount
            that the Company is due from a related entity at its discretion. The
            Company believes these aforementioned transactions are similar to
            those that would be entered into with an unrelated party.

            Marketable Securities

            Trading Investments are recorded in the accompanying financial
            statements on the following basis: any security which is traded on
            an international or nationally recognized securities exchange or the
            NASDAQ Stock Market National Market System ("NASDAQ") shall be
            valued at the last sale price on the date of valuation as quoted on
            such exchange or market, as the case may be, which represents the
            principal market on which such security is traded. If there is no
            sale of such security on such day, such security shall be valued at
            the mean of the closing bid and asked prices on such day. If no bid
            or asked prices are quoted on such day, such security shall be
            valued by such method as the Manager of the Company shall determine
            in good faith to reflect its fair value. Any security which is
            traded principally in the over-the-counter market (but excluding
            securities admitted to trading on the NASDAQ) shall be valued at the
            latest bid price available on the date of valuation.

            Portfolio Valuation, Non-marketable Securities

            Securities or investments and assets of the Company other than
            Trading Investments as well as investments of the Company where no
            market value can be determined either (i) because there is no public
            market or (ii) the market is not deemed to be an indicator of value
            because of limited float or trading activity shall be assigned such
            value as the Manager or a third party engaged to provide such
            service shall determine in good faith to reflect its fair value.
            Such securities are valued at cost, unless there is an indication of
            a permanent impairment in value.

            Realized and Unrealized Gains and Losses on Investments

            Management's policy is to include unrealized holding gains and
            losses on trading securities and to report them as a net amount.
            Realized gains and losses on the sale of trading securities are
            determined using the specific


                                       8
<PAGE>

            identification method. The Company did not sell or trade any of its
            securities during the period ended June 30, 2001.

            Financial and Business Risks Related to Non-Marketable Securities

            Significant portions of the Company's assets are invested in
            non-marketable securities that may involve significant business and
            financial risks and may result in substantial losses. Due to of the
            absence of any liquid trading market for these investments, the
            Company may take longer to liquidate these positions than would be
            the case for marketable securities. These securities may be resold
            in privately negotiated or public sale transactions and the prices
            realized on such sales could be less than those originally paid by
            the Company. Further, companies whose securities are not marketable
            may not be subject to the disclosure and other investor protection
            requirements applicable to companies whose securities are publicly
            traded.

            Concentration of Credit Risk

            Financial instruments, which potentially subject the Company to a
            concentration of credit risk, consist of cash and cash equivalents.
            Cash and cash equivalents consist of deposits placed with various
            high credit quality financial institutions.

            Comprehensive Income

            The Company observes the provisions of SFAS No.130, "Reporting
            Comprehensive Income", which requires companies to report all
            changes in equity during a period, except those resulting from
            investments by owners and distributions to owners, for the period in
            which they are recognized. Comprehensive income is the total of net
            income and all other non-owner changes in equity (or other
            comprehensive income). The Company's operations for the periods
            presented did not give rise to items includable in comprehensive
            income, which were not already in its operations for the periods
            presented.

            Earnings Per Share

            The Company computes net loss per share in accordance with SFAS No.
            128, "Earnings Per Share". Under the provisions of SFAS No. 128,
            basic net income (loss) per common share ("Basic EPS") is computed
            by dividing net income (loss) by the weighted average number of
            common shares outstanding. Diluted net income (loss) per common
            share ("Diluted EPS") is computed by dividing net income (loss) by
            the weighted average number of common shares and dilutive common
            share equivalents then outstanding. SFAS No. 128 requires the
            presentation of both Basic EPS and Diluted EPS on the face of the
            consolidated statements of operations. The Company has presented the
            weighted average number of common shares outstanding as though the
            re-capitalization of the Company, occurring upon the transfer, had
            occurred as of the Company's inception date (March 8, 2000), and the
            shares had been issued and outstanding.

            Derivative Instruments

            In June 1998, the Financial Accounting Standards Board issued SFAS
            No.133, "Accounting for Derivative Instruments and Hedging
            Activities". This statement establishes accounting and reporting
            standards for derivative instruments, including certain derivative
            instruments embedded in other contracts, and for hedging activities.
            SFAS No.133, as amended by SFAS No.137 and No.138, is effective for
            all fiscal years beginning after June 15, 2000 and will not require
            retroactive restatement of prior period financial statements. This
            statement requires the recognition of all derivative instruments as
            either assets or liabilities in the balance sheet measured at fair
            value. Derivative instruments will be recognized as gains or losses
            in the period of change. If certain conditions are met where the
            derivative instrument has been designated as a fair value hedge, the
            hedge items may also be marked to market through earnings, thus
            creating an offset. If the derivative is designed and qualifies as a
            cash flow hedge, the changes in fair value of the derivative
            instrument may be recorded in comprehensive income. The adoption of
            SFAS No. 133 did not have a material effect on the Company's
            financial statements.


                                        9
<PAGE>

            Fair Value of Financial Instruments

            The fair value of cash and cash equivalents, investments, due from
            related entity, interest income, accrued expenses, other receivables
            and accounts payable approximate book value.

            Use of Estimates

            The preparation of the financial statements in accordance with
            accounting principles generally accepted in the United States
            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 income and expenses during
            the reporting period. Actual results could differ from those
            estimates.

            Reclassifications

            Certain prior period amounts have been reclassified to conform to
            the current period's presentation.

            Recent Accounting Pronouncement

            In July 2001, the Financial Accounting Standards Board issued
            Statements of Financial Accounting Standards No. 141, "Business
            Combination" ("SFAS 141") and No. 142, Goodwill and Other Intangible
            Assets ("SFAS 142"). SFAS 141 requires all business combinations
            initiated after June 30, 2001 to be accounted for using the purchase
            method. Under SFAS 142, goodwill and intangible assets with
            indefinite lives are no longer amortized but are reviewed annually
            (or more frequently if impairment indicators arise) for impairment.
            Separable intangible assets that are not deemed to have indefinite
            lives will continue to be amortized over their useful lives (but
            with no maximum life). The amortization provisions of SFAS 142 apply
            to goodwill and intangible assets acquired after June 30, 2001. With
            respect to goodwill and intangible assets acquired prior to July 1,
            2001, the Company is required to adopt SFAS 142 effective January 1,
            2002. The Company is currently evaluating the effect that adoption
            of the provisions of SFAS 142 that are effective July 1, 2001 and
            January 1, 2002 will have on its results of operations and financial
            position.

3.    ACQUISITION

      In January 2001, the Company, MRM and MRM Acquisition Inc., a wholly owned
      subsidiary of the Company, entered into an Agreement and Plan of
      Reorganization and Merger, ("Merger") providing for the merger of MRM with
      and into MRM Acquisition, Inc.

      MRM makes mobile laser/surgical services available to its customers by
      providing this equipment on a "per procedure" basis to hospitals, out
      patient surgery centers and physician practices. MRM provides these mobile
      lasers with technical support to ensure the lasers are working correctly
      for the physicians. MRM also provides other medical equipment on a rental
      basis to hospitals and surgery centers.

      In July 2001, the Company completed its acquisition of MRM as per the
      Agreement dated January 2001. As required by the terms of the Agreement,
      the Company exchanged 5,633,667 shares of its Common Stock, which
      represents 11% of the total post-merger outstanding shares, for all the
      issued and outstanding Common Stock of MRM at a conversion ratio of 0.37.
      Based on the average of the Company's closing stock price for the 10
      preceding days prior to the acquisition, the purchase price for MRM is
      $3,232,000. The transaction will be accounted for under the purchase
      method of accounting. MRM will operate as a wholly owned subsidiary of the
      Company.

      At June 30, 2001, the Company had invested $960,000 in MRM and will make
      additional investments needed to execute its business plan. In July 2001,
      the Company advanced an additional $100,000 to MRM.


                                       10
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

      Forward-Looking Statements

      This Quarterly Report on Form 10-Q contains forward-looking statements
      within the meaning of Section 27A of the Securities Act of 1933, as
      amended, and Section 21E of the Securities Exchange Act of 1934, as
      amended. These forward-looking statements involve risks and uncertainties,
      and actual results could be significantly different than those discussed
      in this Quarterly Report on Form 10-Q. Certain statements contained in
      Management's Discussion and Analysis, particularly in "Liquidity and
      Capital Resources," and elsewhere in this Report on Form 10-Q are
      forward-looking statements. These statements discuss, among other things,
      expected growth, future revenues and future performance. Although we
      believe the expectations expressed in such forward-looking statements are
      based on reasonable assumptions within the bounds of our knowledge of our
      business, a number of factors could cause actual results to differ
      materially from those expressed in any forward-looking statements, whether
      oral or written, made by us or on our behalf. The forward-looking
      statements are subject to risks and uncertainties including, without
      limitation, the following: (a) changes in levels of competition from
      current competitors and potential new competition; (b) loss of a
      significant customer; and (c) changes in availability or terms of working
      capital financing from vendors and lending institutions. The foregoing
      should not be construed as an exhaustive list of all factors that could
      cause actual results to differ materially from those expressed in
      forward-looking statements made by us. All forward-looking statements
      included in this document are made as of the date hereof, based on
      information available to the Company on the date thereof, and the Company
      assumes no obligation to update any forward-looking statements.

      Overview

      Emergent Ventures, LLC ("Venture") commenced operations in the State of
      Delaware on March 8, 2000 and was formed to invest primarily in global
      private equity opportunities in information technology, health care and
      medical technology companies.

      Venture's equity capitalization consisted of a contribution of $1,173,125
      in securities by Emergent Management Company LLC ("Manager"), for a 58%
      interest of Venture, and a contribution of $7,500,000 in cash by other
      members in return for the remaining 42% interest of Venture.

      In August 2000, Venture consummated the transactions contemplated by the
      Equity Transfer Transaction ("Transfer"), all pursuant to an Equity
      Transfer and Reorganization Agreement ("Agreement"), by and among Dynamic
      International Ltd. ("Dynamic"), certain of its shareholders and Venture.

      Pursuant to and in accordance with the Agreement and immediately prior to
      the consummation of the Transfer, Dynamic transferred all of its assets
      and liabilities (other than outstanding bank debt in the amount of
      $250,000) to a wholly-owned subsidiary of Dynamic named Dynamic
      International, Inc. Dynamic International, Inc., acquired the transferred
      assets, assumed the remaining liabilities and indemnified Dynamic against
      any liabilities relating to or arising out of the transferred assets and
      the assumed liabilities. In conjunction with the Transfer, Dynamic
      International, Inc. was spun-off from Dynamic as a separate entity.

      Pursuant to the Agreement, Venture contributed substantially all of its
      assets to Dynamic in exchange for the issuance of approximately 39,000,000
      shares of Dynamic common stock to the members of Venture. Dynamic
      subsequently changed its name to Emergent Group Inc. The Company retained
      Dynamic's State of Incorporation in Nevada and it's Federal Tax
      Identification Number.

      For financial accounting purposes, the acquisition was accounted for as a
      re-capitalization by the Company as the accounting acquiror and with
      Dynamic as the accounting acquiree. After the Transfer, the former members
      of Venture became the beneficial owners of approximately 39,000,000 shares
      of Dynamic's common stock, representing approximately 90% interest in
      Dynamic. Each of the Directors of Dynamic resigned immediately prior to
      the consummation of the Transfer. The beneficial owners of the Manager
      were elected as directors and executive officers of the Company. The
      Company recorded goodwill as a result of the Transfer amounting to
      $250,000, which is being amortized over three years.


                                      11
<PAGE>

      The Company had previously announced that it intends to transition itself
      into a medical technology operating company that has a primary objective
      of launching an innovative national distribution platform leveraging its
      access to physician practice and healthcare facilities utilizing
      acquisitions of medical technology companies and employing strategic
      partner relationships. The Company believes that its initial acquisition,
      Medical Resources Management, Inc., completed in July 2001, will provide
      the platform to facilitate the Company's efforts to acquire and/or enter
      into strategic partner relationships with other companies in the medical
      technology, equipment and distribution industry. The Company plans to
      leverage its merchant banking resources to identify and acquire and/or
      enter into strategic partnering relationships with medical technology
      companies with large market opportunities and whose potential operations
      currently are restricted by the lack of effective channels of
      distribution.

      Results of Operations

      The following discussion relates to our results of operations for the
      periods noted and are not necessarily indicative of the results expected
      for any other interim period or any future fiscal year. In addition, we
      note that the period-to-period comparison below may not be indicative of
      future performance as the prior period consists of approximately one month
      of operations versus three months of operations in the current period. The
      six months ended June 30, 2000 reflects the period from inception of March
      8, 2000.

      Comparison of the Six Months ended June 30, 2001 and June 30, 2000

      For the six months ended June 30, 2001, the Company incurred a loss of
      $(2,221,000) or $(0.05) basic and fully diluted earnings per share, versus
      a net loss of $(1,321,000) or $(0.03) basic and fully diluted earnings per
      share for the June 30, 2000 period. The change is primarily the result of
      a realized loss of $1,471,000 due to a permanent impairment on an
      investment in the current period, as opposed to an unrealized loss on
      investments of $1,113,000 in the comparable period for June 30, 2000. In
      addition, the Company incurred an increase in professional and consulting
      fees of $203,000 due to the additional legal, accounting and professional
      costs relating to the Company's public filing requirements. General and
      administrative expenses increased $390,000, which included an increase in
      travel expenses of $127,000 and as a result of the Company increasing its
      internal support staff and executing its business plan. Depreciation and
      amortization expenses were $73,000 in the current period due to the
      purchase of fixed assets vs. $-0- in the prior period.

      Comparison of the Three Months ended June 30, 2001 and June 30, 2000

      For the three months ended June 30, 2001, the Company incurred a loss of
      $(1,158,000) or $(0.03) basic and fully diluted earnings per share, versus
      a net loss of $(2,620,000) or $(0.07) basic and fully diluted earnings per
      share for the June 30, 2000 period. The change is primarily the result of
      a realized loss of $783,000 due to a permanent impairment on an investment
      in the current period, as opposed to an unrealized loss on investments of
      $2,457,000 in the comparable period for June 30, 2000. In addition, the
      Company incurred an increase in professional fees of $52,000 due to the
      additional legal, accounting and professional costs relating to the
      Company's public filing requirements. Also, general and administrative
      expenses increased $245,000, which included an increase in travel expenses
      of $77,000 and as a result of the Company increasing its internal support
      staff and executing its business plan. Depreciation and amortization
      expenses were $37,000 in the current period current period due to the
      purchase of fixed assets vs. $-0- in the prior period.

      Liquidity and Capital Resources

      The Company had cash and cash equivalents of $82,000 at June 30, 2001.
      Cash used in operating activities for the six months ended June 30, 2001
      was $(950,000). This was primarily the result of the net operating loss
      from operations of $2,306,000, which includes a non-cash realized loss of
      $(1,471,000) on the permanent impairment of an investment. The use of cash
      also reflects depreciation and amortization of $73,000, an increase in
      unrealized appreciation on investments of $137,000 and the net decrease in
      other assets and liabilities of $(51,000).

      Cash provided by investing activities consisted of advances from
      shareholders' of $941,000.


                                      12
<PAGE>

      Cash used in investing activities for the six months ended June 30, 2001
      consisted primarily of $620,000 in loans made to MRM, an acquisition
      completed in July 2001. At June 30, 2001, the Company had invested
      $960,000 in MRM and advanced an additional $100,000 in July 2001.

      MRM has had historical operating losses for its most recent fiscal year
      ending October 31, 2000 and through the six months ended April 30, 2001.
      For the six-month period, MRM had operating losses of $970,000 includes
      non-cash depreciation and amortization expenses of $1,046,000 and other
      ordinary net changes in assets and liabilities. However MRM had a total
      net reduction in cash and cash equivalents of $(227,000) due to its
      purchases of rental assets of $639,000, which was partially offset by an
      increase in financing activities of $209,000.

      It is the Company's intention to return MRM to profitability as quickly as
      possible. Therefore, in May 2001, prior to the closing of the acquisition,
      the Company, in conjunction with MRM's management implemented a plan of
      cost reductions including, but not limited to, the following:

            1)    Personnel reduction of approximately 20%.
            2)    Salaried employee pay reductions ranging from 8-35%.
            3)    Increased use of variable/incentive pay for sales staff.
            4)    Introduction of "piece rate" pay plan to technician staff.
            5)    Price increases of 10-15% to non-contract customers.

      There is no assurance that the Company will be able to fully implement and
      successfully achieve material cost reductions sufficient to return MRM to
      profitability.

      Since inception, the Company has utilized its capital contributions and
      continued borrowings from related parties to support its operations. In
      this light, during July 2001, the Company sold an investment for $500,000,
      which was at the investment's original cost. Also, in July 2001, it
      received an equity advance of $600,000 contingent upon formal execution of
      a Private Placement Memorandum.

      The Company's management believes that based on its current operating
      results, successful implementation of its cost reduction plan at MRM and
      the aforementioned financing activities, the Company's cash and cash
      equivalents will be sufficient to meet its requirements for at least the
      next 12 months.

      The Company's continued ability to raise or contribute capital is
      essential in order for it to continue to execute its business plan. As
      such, there can be no assurances that additional capital, whether from
      related parties or outside investors will be available or on terms
      favorable to the Company. Without such additional capital the Company may
      not be able to continue implementing its business plan or have sufficient
      working capital available to fund its historical operating losses.

      Recent Accounting Pronouncements

      In June 1998, the Financial Accounting Standards Board issued SFAS No.133,
      "Accounting for Derivative Instruments and Hedging Activities". This
      statement establishes accounting and reporting standards for derivative
      instruments, including certain derivative instruments embedded in other
      contracts, and for hedging activities. SFAS No.133, as amended by SFAS
      No.137 and No.138, is effective for all fiscal years beginning after June
      15, 2000 and will not require retroactive restatement of prior period
      financial statements. This statement requires the recognition of all
      derivative instruments as either assets or liabilities in the balance
      sheet measured at fair value. Derivative instruments will be recognized as
      gains or losses in the period of change. If certain conditions are met
      where the derivative instrument has been designated as a fair value hedge,
      the hedge items may also be marked to market through earnings, thus
      creating an offset. If the derivative is designed and qualifies as a cash
      flow hedge, the changes in fair value of the derivative instrument may be
      recorded in comprehensive income. The adoption of SFAS No. 133 in 2001 did
      not have a material effect on the Company's financial statements.

      In July 2001, the Financial Accounting Standards Board issued Statements
      of Financial Accounting Standards No. 141, "Business Combination" and No.
      142, Goodwill and Other Intangible Assets. SFAS 141 requires all business
      combinations initiated after June 30, 2001 to be accounted for using the
      purchase method. Under SFAS 142, goodwill and intangible assets with
      indefinite lives are no longer amortized but are reviewed annually (or
      more frequently if impairment indicators arise) for impairment. Separable
      intangible assets that are not deemed to have


                                      13
<PAGE>

      indefinite lives will continue to be amortized over their useful lives
      (but with no maximum life). The amortization provisions of SFAS 142 apply
      to goodwill and intangible assets acquired after June 30, 2001. With
      respect to goodwill and intangible assets acquired prior to July 1, 2001,
      the Company is required to adopt SFAS 142 effective January 1, 2002. The
      Company is currently evaluating the effect that adoption of the provisions
      of SFAS 142 that are effective July 1, 2001 and January 1, 2002 will have
      on its results of operations and financial position.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

      The Company is not exposed to financial market risks from changes in
      foreign currency exchange rates or changes in interest rates. The Company
      does not use derivative financial instruments.

Item 5. Subsequent Events

      In July 2001, the Company completed its acquisition of MRM as per the
      Agreement dated January 2001. As required by the terms of the Agreement,
      the Company exchanged 5,633,667 shares of its Common Stock, which
      represents 11% of the total post-merger outstanding shares, for all the
      issued and outstanding Common Stock of MRM at a conversion ratio of 0.37.
      Based on the average of the Company's closing stock price for the 10
      preceding days prior to the acquisition, the purchase price for MRM is
      $3,232,000. The transaction will be accounted for under the purchase
      method of accounting. MRM will operate as a wholly owned subsidiary of the
      Company.

      In July 2001, the Company sold an investment for $500,000, which was at
      the investment's original cost.

      Also, in July 2001, the Company has received an equity advance of $600,000
      contingent upon formal execution of a Private Placement Memorandum.


                                      14
<PAGE>

                           PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

      (a)   Exhibits.

            None.

      (b)   Reports on Form 8-K

            The Company filed the following reports on Form 8-K during the
second quarter of the year ending December 31, 2001.

                      Date Report
Date of Report        Filed with SEC    Items Reported
--------------        --------------    --------------

February 20, 2001     May 7, 2001       Item 7 - Financial Statements, Pro Forma
                                                 Financial Information and
                                                 Exhibits (*)

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

(*) Included historical financial statements for Emergent Ventures, LLC. Also
includes pro forma combining financial statements of Emergent Ventures, LLC and
Dynamic International, Ltd. (now known as Emergent Group Inc.).


                                      15
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                              EMERGENT GROUP INC.


Date: August 13, 2001                         By: /s/ Daniel Yun
                                                 -------------------------------
                                                 Daniel Yun, Chairman


Date: August 13, 2001                         By: /s/ Mark Waldron
                                                 -------------------------------
                                                 Mark Waldron, President and
                                                     Chief Executive Officer


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