SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549

                               FORM 10-KSB/A

                          AMENDMENT NO. 1 TO THE
               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

  For the Fiscal Year Ended December 31, 2000 Commission File No. 0-24778

                   NATIONAL HEALTH & SAFETY CORPORATION
              (Name of small business issuer in its charter)

                 UTAH                               87-0505222
    (State or other jurisdiction of     (I.R.S. Employer Identification No.)
     incorporation or organization)



                      3811 BEE CAVE ROAD, SUITE 210,
                            AUSTIN, TEXAS 78746
                 (Address of principal executive offices)
                  Issuer's telephone no.:  (512) 328-0433

   SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:
                                   None

   SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:
                 Common Stock, par value $0.001 per share
                             (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.
Yes  [X]
                                   No [  ]

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B 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 the issuer's revenues for its most recent fiscal year:   $ 742

At March 30, 2001, there were 188,453,311 shares of registrant's Common
Stock held by non-affiliates, with an aggregate market value of
approximately $11,309,199, based on the closing price on the OTC Bulletin
Board on that day.

At March 30, 2001, a total of 236,850,021 shares of registrant's Common
Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

This amendment to the Company's Form 10-KSB contains one revision to its
financial statements for the year ended December 31, 2000. The amount shown
for "Increase (decrease) in accounts payable" has been increased from
$172,358 to $192,358.  The totals on the cash flow statement are correct
and remain unchanged.  See Statements of Cash Flow in the Financial
Statements.



                                     1


<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.

NATIONAL HEALTH & SAFETY CORPORATION

Date: April 30, 2001                       /S/ GARY DAVIS
                                   Gary Davis, President and
                                   Chief Executive Officer

Date: May 2, 2001                          /S/ ROGER FOLTS
                                   Roger Folts, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.

Date: April 30, 2001                       /S/ GARY DAVIS
                                   Gary Davis, Director and Chairman of the
                                   Board of Directors

Date: April 30, 2001                       /S/ EUGENE M. ROTHCHILD
                                   Eugene M. Rothchild, Director


Date:
                                   James R. Kennard, Director


Date: April 30, 2001                       /S/ JIMMY E. NIX II
                                   Jimmy E. Nix II, Director



                                     2
<PAGE>


                     NATIONAL HEALTH & SAFETY CORPORATION

                         (A DEVELOPMENT STAGE COMPANY)

                             FINANCIAL STATEMENTS
                                      AND
                         INDEPENDENT AUDITOR'S REPORT

                               DECEMBER 31, 2000

                               TABLE OF CONTENTS





                                                          PAGE

INDEPENDENT AUDITORS' REPORTS                             F-1-2

FINANCIAL STATEMENTS

   Balance Sheet                                          F-3

   Statements of Operations                               F-4

   Statements of Stockholders' Deficiency                 F-5

   Statements of Cash Flows                               F-6

   Notes to Financial Statements                          F-7-13




<PAGE>
Board of Directors
  National Health & Safety Corporation
  (A Development Stage Company)

                        INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheet of National Health & Safety
Corporation (a development stage company) as of December 31, 2000 and the
related statements of operations, stockholders' deficiency and cash flows for
the year ended December 31, 2000 and from the inception of the development
stage on January 1, 1999 through December 31, 2000.  The balance sheet,
statements of operations, stockholders' deficiency and cash flows of National
Health & Safety Corporation for the year ended December 31, 1999 were audited
by other auditors whose report dated January 18, 2000, included an
explanatory paragraph describing conditions that raised substantial doubt
about the Company's ability to continue as a going concern.  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  audit  in  accordance  with  generally  accepted auditing
standards.   Those standards require that we plan and perform  the  audit  to
obtain reasonable  assurance  about whether the financial statements are free
of material misstatement.  An audit  includes  examining,  on  a  test basis,
evidence  supporting the amounts and disclosures in the financial statements.
An  audit  also   includes  assessing  the  accounting  principles  used  and
significant estimates  made  by management, as well as evaluating the overall
financial statement presentation.  We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all  material  respects,  the  financial position of National Health & Safety
Corporation (a development stage  company)  as  of  December 31, 2000 and the
results of its operations and its cash flows for the  year ended December 31,
2000  and  from  the inception of the development stage on  January  1,  1999
through December 31,  2000,  in conformity with generally accepted accounting
principles.

The accompanying financial statements  have  been  prepared assuming that the
Company will continue as a going concern. As discussed  in  Notes 1 and 3, on
July 1, 1999, the Company filed a Voluntary Petition for Relief under Chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Eastern District of Pennsylvania. The  filing was made necessary by a
lack  of  sufficient  liquidity.  The Company, has experienced recurring  net
losses.   Additionally,  as  of  December   31,   2000,  the  Company  had  a
stockholders'  deficit of $4,902,676.  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  partially  described in Notes 1 and 3.
The accompanying financial statements do not include  any adjustment 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.

SPROUSE & WINN, L.L.P.
Austin, Texas

April 6, 2001

                                   F-1
<PAGE>
                         INDEPENDENT AUDITORS' REPORT

Board of Directors
National Health & Safety Corporation
(A Development Stage Company)
Warminster, Pennsylvania


We have audited the accompanying balance sheet of National Health & Safety
Corporation (a development stage company) as of December 31, 1999 and the
related statements of operations, stockholders' deficiency and cash flows for
the years ended December 31, 1999 and 1998 and from the inception of the
development stage on January 1, 1999 through December 31, 1999.  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 generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe our audits provide a reasonable
basis for our opinion.

In  our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of National Health & Safety
Corporation (a development stage company) as of December 31, 1999, and the
results of its operations and its cash flows for the years ended December 31,
1999 and 1998 and from the inception of the development stage on January 1,
1999 through December 31, 1999, in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Notes 1 and 4, on
July 1, 1999, the Company filed a Voluntary Petition for Relief under Chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Eastern District of Pennsylvania.  The filing was made necessary by a
lack of sufficient liquidity.  The Company has experienced recurring net
losses.  Additionally, as of December 31, 1999, the Company had a
stockholders' deficit of $4,550,348.  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 partially described in Notes 1 and 4.
The accompanying financial statements do not include any adjustment 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.

Jones, Jensen & Company
Salt Lake City, Utah
January 18, 2000



                                      F-2
<PAGE>
                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                                 BALANCE SHEET

                               DECEMBER 31, 2000


                                     ASSETS

CURRENT ASSETS
 Cash                                                    $       1,475
 Accounts receivable, net of allowance for doubtful
   accounts of $8,200                                           16,614
                                                         -------------

   Total Current Assets                                         18,089
                                                         -------------

OTHER ASSETS

 Restricted cash                                                14,212
                                                         -------------
   Total Other Assets                                           14,212
                                                         -------------
TOTAL ASSETS                                             $      32,301
                                                         =============

                       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

 Accounts payable and accrued expenses - post petition    $    334,276
 Post petition notes payable - related party                   255,750
 Pre-petition accruals                                       4,344,951
                                                         -------------
   Total Current Liabilities                                 4,914,977
                                                         -------------

STOCKHOLDERS' DEFICIENCY

 Preferred   stock;   $0.001   par  value;  5,000,000
  shares authorized; 14,363 shares      issued
  and outstanding                                                   14
 Common   Stock;  $0.001  par  value, 100,000,000
  shares authorized; 58,803,716 shares issued and
  outstanding                                                   58,804
 Additional paid - in capital                                9,482,308
 Accumulated deficit                                       (11,975,773)
 Deficit accumulated during the development stage           (2,468,029)
                                                         -------------
   Total Stockholders' Deficiency                           (4,902,676)
                                                         -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY           $      32,301
                                                         =============


               SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                     F-3
<PAGE>


                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                           STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>

                                                             From the Inception of the
                                For the Years Ended             Development Stage
                                December 31,                 on January 1, 1999 Through
                                2000             1999           December 31, 1999
                                ----             ----        --------------------------
<S>                             <C>            <C>           <C>

REVENUE
  Sales - operations            $       228    $    80,340           $    80,568
  Royalty revenue                       514            -0-                   514
                                -----------    -----------           -----------
    Total Revenue                       742         80,340                81,082
                                ===========    ===========           ===========

COST OF SALES                           185         41,045                41,230
                                -----------    -----------           -----------
  Gross Profit                          557         39,295                39,852
                                -----------    -----------           -----------

EXPENSES
  Rent                                  -0-         99,424                99,424
  Depreciation and
    amortization                        -0-          2,078                 2,078
  General and administrative        279,439      2,241,237             2,520,676
                                -----------    -----------           -----------
    Total Expenses                  279,439      2,342,739             2,622,178
                                ===========    ===========           ===========
LOSS FROM OPERATIONS               (278,882)    (2,303,444)           (2,582,326)


OTHER INCOME (EXPENSE)
  Gain on sale of assets                -0-        142,697               142,697
  Other                              11,673            -0-                11,673
  Bad debt expense                   (2,084)        (2,388)               (4,472)
  Interest expense                      -0-        (35,601)              (35,601)
                                -----------    -----------           -----------
  Total Other Income (Expense)        9,589        104,708               114,297
                                ===========    ===========           ===========

NET LOSS                        $  (269,293)  $(2,198,736)          $(2,468,029)
                                ============   ===========           ===========
BASIC LOSS PER SHARE            $     (0.05)   $     (0.04)
                                ============   ===========
Weighted Average Shares
  Outstanding                    59,008,459     57,734,638
                                ============   ===========
</TABLE>



               SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                     F-4


<PAGE>


                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                    STATEMENTS OF STOCKHOLDERS' DEFICIENCY



<TABLE>
<CAPTION>
                           Stock    COMMON      Additional     Accumulated
                         Preferred   STOCK    Paid-in Capital    Deficit
<S>                      <C>       <C>        <C>              <C>
BALANCE, DECEMBER 31,
1998                     $     14  $52,455      $8,512,687     $(11,975,773)

Issuance of common
stock in payment of debt        -    3,095         211,905                -

Issuance of common
stock for services
rendered                        -    1,640         220,165                -

Issuance of common
stock for cash                  -    2,444         199,756                -

Options issued below
market price                    -        -         420,000                -

Net loss for the
year ended
December 31, 1999              -        -               -       (2,198,736)
                         --------  -------    ------------     ------------

BALANCE, DECEMBER 31,
1999                           14   59,634       9,564,513      (14,174,509)

Cancellation of
Common Stock                    -     (830)        (82,205)               -

Net loss for the
year ended
December 31, 2000               -        -               -         (269,293)
                         --------  -------    ------------     ------------

BALANCE, DECEMBER 31,
2000                     $     14  $58,804    $  9,482,308     $(14,443,802)
                         ========  =======    ============     ============

</TABLE>













               SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                     F-5


<PAGE>


                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                           STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                   For the Years Ended         From Inception
                                       December 31,          On January 1, 1999
                                                                  Through
                                   2000           1999       December 31, 2000
                                   ----           ----       -------------------
<S>                              <C>            <C>          <C>

CASH FLOWS FROM OPERATING
ACTIVITIES
  Net (loss)                     $  (269,293)   $(2,198,736)    $(2,468,029)
  Adjustments to reconcile
   net (loss) to net cash (used)
   by operating activities:
   Depreciation and amortization         -0-          2,078           2,078
   Expenses paid with common
    stock                                -0-        641,805         641,805
   Cancellation of Stock             (83,035)           -0-         (83,035)
   Gain on sale of assets                -0-       (142,697)       (142,697)

  Changes in operating
   assets and liabilities:
   (Increase) in restricted
    cash                               36,692       (50,904)        (14,212)
   (Increase) decrease in
    accounts receivable                 7,858         6,385          14,243
   (Increase) decrease in
    royalties receivable                  -0-        41,000          41,000
   Decrease in deposits                   -0-         9,298           9,298
   Increase (decrease) in
    accounts payable                  192,358       133,791         326,149
   Increase (decrease) in
    accrued expenses                  (40,800)      865,476         824,676
                                 ------------   -----------     -----------
     Net Cash (Used) by
      Operating Activities           (156,220)     (692,504)       (848,724)

CASH FLOWS FROM INVESTING
ACTIVITIES
  Proceeds from sale of assets            -0-        30,000          30,000
                                 ------------   -----------     -----------

  Net Cash Provided by
   Investing Activities                   -0-        30,000          30,000

CASH FLOWS FROM FINANCING
ACTIVITIES
  Proceeds from note receivable       120,000           -0-         120,000
  Proceeds from loans
   payable, stockholder                   -0-        48,000          48,000
  Proceeds from notes
   payable - related party             34,550       469,113         503,663
  Repayment of loans payable              -0-       (57,000)        (57,000)
  Proceeds from issuance of
   common stock                           -0-       202,200         202,200
                                 ------------   -----------     -----------
   Net Cash Provided by
    Financing Activities              154,550       662,313         816,863
                                 ------------   -----------     -----------

INCREASE (DECREASE) IN CASH            (1,670)         (191)         (1,861)

NET CASH, BEGINNING OF YEAR             3,145         3,336           3,336
                                 ------------   -----------     -----------
NET CASH, END OF YEAR            $      1,475   $     3,145     $     1,475
                                 ============   ===========     ===========

CASH PAID DURING THE YEAR FOR:
  Interest                       $        -0-   $    16,597     $    16,597
  Income taxes                            -0-           -0-             -0-

NON-CASH FINANCING ACTIVITIES:
  Issuance of common stock in
   payment of debt                        -0-       215,000         215,000
  Issuance of common stock
   for services                           -0-       221,805         221,805
  Options issued below market
   value                                  -0-       420,000         420,000
  Cancellation of common stock         83,035           -0-          83,035
</TABLE>



               SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                     F-6

<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000


NOTE 1    SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS OPERATIONS

          a.  Nature of Organization

          The Company  was  incorporated  on  March  23,  1989.   The Company's
          principal  business  activities  consist  of  providing medical  cost
          containment services to both institutional and consumer markets.  The
          Company  performs  on-going  credit  evaluations  of  its  customers'
          financial condition and generally requires no collateral.

          On  March  22,  1993  the  Company entered into a merger  with  State
          Policeman Annual Magazine, Inc.  (State),  whereby  each share of the
          Company's common and preferred stock was exchanged for  one share, of
          State's  common  and  preferred stock.  State is a Company which  was
          organized under the laws  of  the  State  of  Utah  on  May 14, 1983.
          Pursuant  to  the  merger  agreement,  State amended its Articles  of
          Incorporation  to  change  its  name  to  National  Health  &  Safety
          Corporation.  The Company entered the development stage on January 1,
          1999  per SFAS No. 7 because of the bankruptcy  proceedings  and  the
          sale of the Company's assets.

          On July  1, 1999, National Health & Safety Corporation (the "Debtor")
          filed  a  petition  for  relief  under  Chapter  11  of  the  federal
          bankruptcy laws in the United states bankruptcy Court for the Eastern
          District of  Pennsylvania,  Case  No.:99-18339.   Under  Chapter  11,
          certain claims against the Debtor in existence prior to the filing of
          the petitions for relief under the federal bankruptcy laws are stayed
          while     the     Debtor    continues    business    operations    as
          debtor-in-possession.   These claims are reported in the December 31,
          2000  balance  sheet as "pre-petition  accruals"  in  the  amount  of
          $4,344,951.  Claims  secured  against  the  Debtor's assets ("secured
          claims") also are stayed, although the holders  of  such  claims have
          the right to move the Court for relief from the stay.  Secured claims
          amounted to $1,473,141 at December 31, 2000.  On August 21, 2000, the
          Company filed the Fourth Amended Disclosure Statement with respect to
          the Fourth Amended Joint Plan of Reorganization (the "Plan")  for its
          consideration  by  the  Company's  creditors  and  shareholders,  and
          ultimate approval by the Bankruptcy Court.

          On November 27, 2000 the Bankruptcy Court confirmed the Plan, and the
          Plan was implemented effective January 22, 2001 (See Note 8).

          b.   Accounts Receivable

          Accounts  receivable  are  shown  net  of  an  allowance for doubtful
          accounts of $8,200. Bad debts are written off in  the period in which
          they are deemed uncollectible.  Any bad debts subsequently  recovered
          are  recorded  as  income  in  the financial statements in the period
          during which they are recovered.





                                     F-7


<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000


NOTE 1    SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS OPERATIONS
          (CONTINUED)

          c. Property and Equipment

          Property and equipment are stated  at cost.  Depreciation is provided
          using  accelerated  and straight-line  methods,  over  the  estimated
          useful life of each class of asset as follows:

                      Furniture and Fixtures               7 years
                      Office Equipment                     7 years
                      Computers                            5 years

          Expenditures  for repairs, maintenance and minor renewals are charged
          against income  as  incurred  and expenditures for major renewals and
          betterment are capitalized.  The cost and accumulated depreciation of
          assets sold or retired are removed  from the respective accounts with
          any  gain  or  loss on disposal reflected  in  income.   Depreciation
          expense was $-0- and $2,078 for the years ended December 31, 2000 and
          1999, respectively.  All  of  the  property and equipment was sold in
          July 1999.

          d. Basic Loss per Share of Common Stock

                                  For the Year Ended
                                  December 31, 2000
          ----------------------------------------------------------------
                                  Loss          Shares     Per Share
                                (Numerator)  (Denominator)  Amount

          Net loss              $(269,293)    59,008,459   $(.005)


                                  For the Year Ended
                                  December 31, 2000
          ----------------------------------------------------------------
                                  Loss          Shares     Per Share
                                (Numerator)  (Denominator)  Amount

          Net loss              $(2,198,736)  57,734,638   $ (.04)


          Basic loss per common share has been calculated based on the weighted
          average  number  of  shares  of  common  stock outstanding during the
          period.

          e. Cash Equivalents

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





                                     F-8


<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000


NOTE 1    SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS OPERATIONS
          (Continued)

          f.  Provision for Taxes

          At   December   31,   2000,   the  Company  had  net  operating  loss
          carryforwards of approximately $10,950,000 that may be offset against
          future taxable income through 2018.  No tax benefit has been reported
          in  the  financial  statements,  because  the  Company  believes  the
          carryforwards  may expire unused.   Accordingly,  the  potential  tax
          benefits  of  the  loss  carryforwards  are  offset  by  a  valuation
          allowance of the same amount.

          g. Estimates

          The preparation  of financial statements in conformity with generally
          accepted accounting  principles 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 those estimates.

          h. Revenue Recognition

          The Company has not yet established  ongoing  operations.   A revenue
          recognition   policy  will  be  established  when  planned  principal
          operations commence.

          i. Recent Accounting Pronouncements

          In June 1998, the FASB issued SFAS No. 133, "Accounting for
          Derivative Instruments and Hedging Activities" which requires
          companies to record derivatives as assets or liabilities, measured at
          fair market-value.  Gains or losses resulting from changes in the
          values of those derivatives would be accounted for depending on the
          use of the derivative and whether it qualifies for hedge accounting.
          The key criterion for hedge accounting is that the hedging
          relationship must be highly effective in achieving offsetting changes
          in fair value or cash flows. SFAS No. 133 is effective for all fiscal
          quarters of fiscal years beginning after June 15, 1999. Management
          believes the adoption of this statement will have no material impact
          on the Company's financial statements.









                                     F-9


<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000


NOTE 1    SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS OPERATIONS
          (CONTINUED)

          j. Bankruptcy Accounting

          Since the Chapter  11  bankruptcy filing, the Company has applied the
          provisions in Statement  of Position (SOP) 90-7 " Financial Reporting
          by Entities in Reorganization  Under  the Bankruptcy Code."  SOP 90-7
          does not change the application of accepted  accounting principles in
          the  preparation of statements.  However, it does  require  that  the
          financial  statements  for periods including and subsequent to filing
          the Chapter 11 petition  distinguish transactions and events that are
          directly  associated  with  the   reorganization   from  the  ongoing
          operations of the business.

NOTE 2    RESTRICTED CASH

          Pursuant  to  the bankruptcy proceedings, the Company  has  one  cash
          account which has been attached by creditors or allocated for certain
          debt payments totaling  $14,212  at  December 31, 2000.  This cash is
          being presented as restricted cash because  the Company does not have
          full access to this account.

NOTE 3    GOING CONCERN

          The accompanying financial statements have been prepared on a going
          concern basis, which contemplates the realization of assets and the
          satisfaction of liabilities in the normal course of business.  The
          Company has a working capital deficiency of $ 4,896,888, an
          accumulated deficit of $ 14,443,802 as of December 31, 2000, and a
          net loss for the year then ended of $269,293.  Accordingly, its
          ability to continue as a going concern is dependent on obtaining
          capital and financing for its planned marketing and distribution of
          the POWERx memberships through the Company's benefits network.  The
          Company plans to secure financing for its acquisition strategy
          through the sale of its equity or issuance of debt.  However, there
          is no assurance that they will be successful in their efforts to
          raise capital or secure other financing.  These factors among others
          may indicate that the Company will be unable to continue as a going
          concern for a reasonable period of time.













                                    F-10


<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000

NOTE 4    PREFERRED STOCK

          In  1992,  the Company entered into a stock exchange  agreement  with
          certain shareholders,  whereby  such  stockholders agreed to exchange
          certain of their shares of the pre-split  common stock of the Company
          and certain other rights for 14,363 authorized  shares of a new class
          of redeemable preferred stock.  The stock is redeemable at $41.78 per
          share (aggregate - $600,086), payable as follows:

             Upon closing of private placement issues                  $ 50,011
             Upon closing of secondary public offering                   50,011
             One year after closing of a secondary public offering      150,074
             Two years after closing of a secondary public offering     174,975
             Three years after closing of a secondary public offering   175,015

          On November 27, 2000 the Plan was confirmed.  On January 22, 2001 the
          Plan was implemented, and each share of preferred stock was exchanged
          in  accordance with the Plan.  Holders of the Company's 14,363 shares
          of Preferred  Stock  exchanged their shares for 600,000 shares of new
          Preferred Stock, Series B.

NOTE 5    OPTIONS AND WARRANTS

          The Company has the following outstanding warrants:

<TABLE>
<CAPTION>

          NUMBER ISSUED   PURCHASE PRICE                           EXPIRATION DATE
          -------------   --------------                           ---------------
          <C>             <C>                                      <C>
          487,500         Lessor of $1.50 or 75% of current price     12/31/00
          131,665         Lessor of $2.13 or 75% of current price     12/31/00
          250,000         $0.25 per share                             04/01/01
          200,000         $0.25 per share                             04/01/01

</TABLE>
          The Company has the following outstanding stock options:

<TABLE>
<CAPTION>
                      EXPIRATION
STOCK OPTIONS ISSUED     DATE         BOWERS     FOLTS     BATHURST        TOTAL
--------------------  ----------      ------     -----     --------        -----
<C>       <C>         <C>            <C>        <C>        <C>             <C>
06/06/95  @$0.17      06/06/2010    2,000,000    500,000    500,000        3,000,000
04/30/96  @$0.17      04/30/2011    2,000,000    500,000    500,000        3,000,000
02/20/98  @$0.07      02/20/2013    2,800,000  1,000,000  1,000,000        4,800,000
                                                                          ----------
                                                          Total:          10,800,000
                                                                          ==========
</TABLE>

          On  November  27, 2000 the Plan was confirmed.  On  January 22, 2001,
          the Plan was implemented,  and   all outstanding options and warrants
          were cancelled.



                                    F-11


<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000


NOTE 6    REORGANIZATION ITEMS

          Although the Chapter 11 bankruptcy filing raises substantial doubt
          about the Company's ability to continue as a going concern, the
          accompanying financial statements have been prepared on a going
          concern basis.  This basis contemplates the continuity of operating
          realization of assets, and discharge of liabilities in the ordinary
          course of business.  The statements also present the assets of the
          Company at historical cost, and the current intention that they will
          be realized as a going concern and in the normal course of business.

NOTE 7    RELATED PARTY TRANSACTIONS

          Under  the  Plan,  the  Company  was advanced  $255,750  by  Medsmart
          Healthcare Network, Inc., a related  party.   This amount is shown in
          the financial statements as post petition notes payable.  No interest
          accrues  on  this  note,  and  is  to  be  repaid once  the  Plan  is
          implemented.

NOTE 8    SUBSEQUENT EVENTS

          The Plan was confirmed on November 27, 2000 and filed as an exhibit
          to the Company's Form 8-K, dated November 28, 2000, that reported the
          confirmation.  On January 22, 2001 the Plan was implemented, whereby
          the former shareholders of MedSmart Healthcare Network, Inc.
          ("MedSmart")  exchanged all of their MedSmart stock for a majority of
          the outstanding common stock of the Company.  MedSmart became a
          wholly owned subsidiary of the Company. This exchange, together with
          the contribution of $600,000 by the Co-Proponent of the Plan and
          other investors implemented the Plan and resulted in a change of
          control of the Company.

          Holders of the Company's 14,363 shares of Preferred  Stock  exchanged
          their shares for 600,000 shares of new Preferred Stock, Series B.

          Pursuant to and effective upon implementation of the Plan, January
          22, 2001, the Company authorized and issued certain new classes of
          securities as follows:

               The Company authorized the issuance of 500,000,000 common
               shares, par value $.001 and the issuance of 50,000,000 shares of
               preferred stock, which may consist of one or more series.
               Cumulative voting of any shares of stock, whether common or
               preferred, shall be prohibited.









                                    F-12


<PAGE>




                     NATIONAL HEALTH & SAFETY CORPORATION
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000





NOTE 8    SUBSEQUENT EVENTS (CONTINUED)

               Series  A  Preferred  Stock,  par  value $.001 ("Series A");
               4,000,000  shares authorized;   1,595,264   shares   issued;
               $1.00   liquidation preference and preference over Series  B
               Preferred Stock, Common Stock and all other series of stock
               ranking  junior to Series A.  Each  share  of Series A is
               convertible, at the  option  of  the holder, into 5  shares of
               Common Stock at such times and in such amounts  as stated  in
               the  Certificate  of  Designation.   The holders of Series A
               stock are entitled to vote together with the holders of  Series
               B and Common Stock and are entitled to one vote for each share
               of Common Stock which would be held by them if all of their
               shares of Series A were converted into shares of Common Stock.

               Series B Preferred Stock, par value  $.001 ("Series B"); 600,000
               shares authorized and issued; $1.00 liquidation  preference that
               is  inferior  to Series A but is preferred to Common  Stock  and
               all other  series  of  stock  ranking  junior to Series B.  Each
               share of Series B is convertible at the  option  of  the  holder
               into  five  shares  of  Common  Stock  at such times and in such
               amounts  as  stated  in  the  Certificate of  Designation.   The
               holders of Series B stock are entitled to vote together with the
               holders of Series A and Common  Stock  and  are  entitled to one
               vote for each share of Common Stock which would be  held by them
               if all of their shares of Series B were converted into shares of
               Common Stock.

               Warrants,  Class  A  and Class B, issued to each holder  of  the
               Series A and Series B Preferred Stock. There are 4,000,000 Class
               A warrants authorized;  2,195,264  Class  A  warrants issued and
               outstanding that allow the holder to purchase,  for the exercise
               price  of $1.00, expiring two years from January 22,  2001,  one
               share of  Common  Stock  plus  one  Class  B warrant.  There are
               4,000,000 Class B warrants authorized; entitling  the  holder to
               purchase,  for an exercise price of $1.50, expiring three  years
               from January 22, 2001, one share of Common Stock.

               All shares of stock, warrants and other Interests in the Company
               other than the  common  stock of the Company was cancelled as of
               January 22, 2001.









                                    F-13