SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549

                                FORM 10-KSB

               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




                                    -1-
<PAGE>


                             TABLE OF CONTENTS


PART I..........................................................3
ITEM 1.DESCRIPTION OF BUSINESS..................................3
  POWER{X} Medical Benefits Network.............................3
  Research and Development......................................5
  Marketing.....................................................5
  Competition...................................................5
  Government Regulation.........................................6
  Employees.....................................................6

ITEM 2. DESCRIPTION OF PROPERTY.................................6

ITEM 3. LEGAL PROCEEDINGS.......................................7

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....7

PART II.........................................................7

ITEM 5. MARKET PRICE OF THE COMPANY'S COMMON STOCK
        AND RELATED STOCKHOLDER MATTERS.........................7
  Dividend Policy...............................................9

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........9
  Recent Accounting Pronouncements..............................9
  Results of Operations for the Twelve Months Ended
    December 31, 2000, as Compared to the Twelve
    Months Ended December 31, 1999.............................10
  Net Operating Losses.........................................11
  Liquidity and Capital Resources..............................11
  Inflation....................................................11
  Risk Factors and Cautionary Statements.......................11

ITEM 7. FINANCIAL STATEMENTS...................................12

PART III.......................................................12

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
        CONTROL PERSONS, COMPLIANCE WITH SECTION 16(A)
        OF THE EXCHANGE ACT....................................12
  Compliance with Section 16(a) of the Exchange Act............13

ITEM 10. EXECUTIVE COMPENSATION................................13
  Employment Agreements........................................14
  Stock Option Grants and Exercises in 2000....................14
  Compensation of Directors....................................14

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
         OWNERS AND MANAGEMENT.................................14

ITEM 13. EXHIBITS, LISTS, AND REPORTS ON FORM 8-K..............15

SIGNATURES.....................................................17

FINANCIAL STATEMENTS..........................................F-1


                             -2-
<PAGE>
                   NATIONAL HEALTH & SAFETY CORPORATION

PART I


ITEM 1.   DESCRIPTION OF BUSINESS

National Health & Safety Corporation (the "Company") since 1993 has been
engaged in the business of providing health care products and services to
the general public on a discount basis.  The Company developed POWER{X}
Medical Benefits Network ("POWER{X}"), which offers discounts on a wide
array of medical and supplemental benefits for consumers.  On July 1, 1999,
the Company voluntarily filed for reorganization under Chapter 11 of the
United States Bankruptcy Code in the Untied States Bankruptcy Court of the
Eastern District of Pennsylvania (file no. 99-18339).

On October 1, 1999, the bankruptcy court approved an Asset Purchase
Agreement between the Company and MedSmart Healthcare Network, Inc.
("MedSmart").  Pursuant to this agreement, the Company transferred to
MedSmart all of its POWER{X} related assets, including the POWER{X} name,
all POWER{X} related contracts with provider networks and broker networks,
all POWER{X} related expenses and all of the Company's personnel, with the
exception of its Chief Financial Officer, Roger H. Folts.  Under the
agreement, MedSmart paid the Company a total of $150,000 in five
installments for the assets, plus a royalty for each POWER{X} related card
sold or renewed.  MedSmart paid the Company an insignificant amount of
royalties during 1999 and 2000.

The bankruptcy court confirmed the Company's Fourth Amended Joint Plan of
Reorganization (the "Plan") on November 27, 2000.  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.  This exchange, together with the contribution of $600,000 from
new investors as part of the Plan, resulted in a change of control of the
Company.  When the Company acquired MedSmart as a wholly owned subsidiary
under the Plan, it reacquired the POWER{X} related assets.

POWER{X} MEDICAL BENEFITS NETWORK

MedSmart has one operating division which offers discounts on a wide
array of medical and supplemental benefits for consumers.
Through membership in POWER{X}, the Company makes available more than
200,000 different medical products, services and supplies at discounts up
to 50% below retail.  The POWER{X} Medical Benefits Network is fully
operational and all of its products and services described herein are
currently available.  The majority of the Company's revenues are generated
from sales of POWER{X} memberships and not through the use of the card.

POWER{X} members have available to them, at discount prices, the services
                                 -3-
<PAGE>
of professional providers of medical services including hospitals,
inpatient facilities, clinics and laboratories, physicians, pharmacies,
dentists and chiropractors.  The Company contracts directly with national
preferred provider organization ("PPO") networks to provide access to
medical services at discounts ranging from approximately 10% to 40%.  PPOs
are organizations that offer access to medical services and products to a
specific group usually at a discounted rate through an established network
of professional providers.  The Company contracts with individual PPOs
rather than directly with the individual healthcare providers.  The
services of the professional providers are included in the list of services
available to POWER{X} members at a discounted rate under a specific plan.
POWER{X} members select the particular providers they wish to use; however,
the Company is not involved in the contact between the professional
providers and its POWER{X} members except to provide the name of the
providers in the list of member benefits.

The Company, through participating PPOs, has been able to procure access to
the various services of the professional providers at discounted rates
primarily based on anticipated volume increases which the individual
provider could expect due to use by POWER{X} members.  Typically, the
professional provider will agree to provide services and related functions
to members for specific identified discounts in reliance upon anticipated
increased business from POWER{X} members.

Current POWER{X} professional services available include, but are not
limited to, physicians, hospital, laboratory and radiology services,
nursing home/extended care facility, audiology, chiropractic, dental, home
nursing, orthodontic, ophthalmology and optometry, holistic health
providers and a 24 hour nurse hotline.  In addition to the various products
and services available to POWER{X} members, the network also offers
discounts on prescription drugs, either from local pharmacies or by mail
order.  In order to provide discount prescription drugs to POWER{X}
members, the Company has entered into an agreement with a national network
of retail pharmacies to provide low-cost and fast access to pharmaceutical
medications. POWER{X} uses a prescription network, which represents
national pharmacy chains as well as independent pharmacies.  POWER{X}
members requiring immediate prescriptions will be able to purchase needed
medications in their local participating pharmacies at discount prices.

The Company also makes available to its POWER{X} members certain non-
medical products and services including discounts on travel, hotels and
motels, auto care, grocery coupons, and golf outings.  These consumer
product options are available in conjunction with any of the POWER{X} card
programs for an additional fee.  Although the Company is constantly seeking
to expand the number and variety of programs and providers that are part of
the POWER{X} network, there can be no assurance that the Company will
retain any particular program or provider for any particular period of
time.  In the future, the Company may add or remove the programs that are
available through the POWER{X} network and also increase or decrease the
number of providers that participate in the POWER{X} network.  Management
believes that these possible changes are part of the normal evolution of
the overall program.

POWER{X} is marketed primarily to institutions and organizations that will
then market and distribute the POWER{X} benefit plans to employer groups,
associations, and other affinity groups, as well as to individual
                               -4-
<PAGE>
consumers.  The POWER{X} memberships are purchased either by individual
consumers or by an employer group to offer as a benefit of employment.
Typically, organizations will select the POWER{X} benefits that will best
meet the needs of their membership or employee base, with the price of the
package being determined by its components. POWER{X} benefits packages are
either funded by the organization directly so that every eligible
individual in the organization automatically becomes a POWER{X} member, or
the organizations will offer POWER{X} memberships to their members and/or
employees as an option for the individual to purchase the a POWER{X} card
and pay the POWER{X} membership fee if they accept the offer.  The
Company's revenue for each POWER{X} program is based on a per member annual
charge.  Each POWER{X} membership covers everyone living in a household.

POWER{X} is designed to be a complementary supplement to most standard
health insurance policies and corporate benefits packages. POWER{X} can be
purchased as a stand-alone benefit, a low cost alternative to health
insurance or to enhance the benefits of an existing health insurance policy
by reducing a member's out-of-pocket medical expenses.

Currently, the Company has approximately 150 contracts with various
organizations to provide access to POWER{X} benefits.  Approximately 1,200
POWER{X} cards are presently in use.

POWER{X} is uniquely designed to enable each participating organization to
make its own selection from among the various benefit programs offered by
the Company, including both medical and supplemental (non-medical)
benefits.  This mechanism allows each organization to develop a customized
benefits package that will best fit the needs of its members or employees.

RESEARCH AND DEVELOPMENT

The Company has previously conducted a test marketing campaign in various
cities using actual POWER{X} cards and participating pharmacies, dentists,
and other medical services providers.  Data collected from these tests was
used to design and develop the POWER{X} program currently being marketed by
the Company.  The Company did not expend any money in 2000 on development
of its POWER{X} product.

MARKETING

The Company's overall marketing strategy is to promote and market POWER{X}
to institutions and organizations that will then market and distribute the
POWER{X} benefit plans to employer groups, associations, and other affinity
groups, as well as to individual consumers.  These institutions and
organization would have the ability to private-label the POWER{X} card,
which may allow them to deepen their relationship with their existing and
potential employees, members or customers.

COMPETITION

The Company believes that the principal competitive factors in the discount
medical benefits industry include the ability to identify, develop and
offer innovative product and service programs, the quality and breadth of
product and service programs offered, price and marketing expertise and the
level and quality of customer service. In the managed healthcare industry
                               -5-
<PAGE>
today, there are numerous firms, including health maintenance
organizations, preferred provider organizations, other discount medical and
consumer discounters, large retailers, insurance companies and financial
service institutions that offer discount membership programs and benefits
which provide services similar to, or which directly compete, with those
provided by the Company.

With the recent reorganization of Company, including a new management team,
redefined corporate focus and strategy, an improved marketing and
distribution model and assuming adequate capitalization, management of the
Company believes it can effectively compete in the marketplace.

GOVERNMENT REGULATION

The Company's operation of the POWER{X} membership program requires the
Company to comply with certain state regulations, changes in which could
materially increase the Company's operating costs associated with complying
with such regulations.

The Company currently monitors its security and quality controls to ensure
that all of its marketing practices meet or exceed industry standards and
all state and federal regulations. The Company only collects and maintains
customer data that is required to administer its business activities, such
as a customer's name, address and billing information and only public
information is used for marketing and modeling purposes, such as
demographic, neighborhood and lifestyle.

EMPLOYEES

On March 31, 2001, the Company had one full-time employee, its chief
financial officer.  Any new employees will be employed by MedSmart.

As of December 31, 2000, MedSmart employed five full-time employees.  When
the Plan was implemented in January 2001, a seven member management team
replaced the MedSmart employees.  Management presently anticipates hiring
additional employees as the business warrants and as funds become
available.


ITEM 2.   DESCRIPTION OF PROPERTY

During 2000, the Company shared leased office space with MedSmart in
Horsham, Pennsylvania.  The operating lease is in the name of MedSmart and
obligates MedSmart through December 31, 2002.  The lease is for a total of
2,045 square feet and the Company occupies less than 1,000 square feet.
The Company did not make any rental payments to MedSmart for the year ended
December 31, 2000.  Management anticipates that the Company will occupy
these premises until such time as operations are centralized in Austin,
Texas during the second quarter of 2001.
                               -6-
<PAGE>
Upon implementation of the Plan, the Company's principal executive offices
were relocated to 3811 Bee Cave Road, Suite 210, Austin, Texas 78746
(telephone number 512-328-0433).

ITEM 3.   LEGAL PROCEEDINGS

Except as otherwise set forth below, the Company is not a party to any new
material pending legal proceedings and no such action by, or to the best of
its knowledge, against the Company has been threatened.

On July 1, 1999, the Company voluntarily filed for reorganization under
Chapter 11 of the United States Bankruptcy Code in the Untied States
Bankruptcy Court of the Eastern District of Pennsylvania (file no.
99-18339). The Company filed the Fourth Amended Disclosure Statement With
Respect to Fourth Amended Joint Plan of Reorganization, dated August 21,
2000, and it was confirmed by the Bankruptcy Court on November 27, 2000.
The Plan was implemented on January 22, 2001.

In January 1999, a writ of execution for money judgment in the amount of
$361,034 was entered against the Company in Bucks County, Pennsylvania, to
collect a judgment against the Company from the Supreme Court of the
State of New York, County of Nassau, in the case titled Schwartz, Berger
and Berger vs. National Health and Safety Corporation (# 99000212).
In the confirmed Plan, the judgment creditors were treated as unsecured
creditors and received Common Stock and Warrants in complete satisfaction
of their claims.

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

During the fourth quarter of the Company's fiscal year ending December 31,
2000, the Company's creditors and Security Holders voted on the Plan that
was ultimately confirmed by the Bankruptcy Court on November 27, 2000, and
implemented on January 22, 2001.  There were no other matters submitted to
a vote by the Company's Security Holders during the year ended December 31,
2000.

PART II


ITEM 5.   MARKET PRICE OF THE COMPANY'S COMMON STOCK AND RELATED
          STOCKHOLDER MATTERS

The Company's Common Stock is traded in the over-the-counter market and
quotations are published on the OTC Bulletin Board under the symbol "NHLT,"
and in the National Quotation Bureau, Inc. "pink sheets" under "National
Health & Safety Corporation."  Quotations on the Company's Common Stock set
forth below do not constitute a reliable indication of the price that a
holder of the Common Stock could expect to receive upon a sale of any
particular quantity thereof.

                               -7-
<PAGE>
No trading market exists or is expected to develop for the Company's issued
and outstanding Preferred Shares.

The following table sets forth the range of high and low bid prices of the
Common Stock for each calendar quarterly period since the first quarter of
1999 as reported by the OTC Bulletin Board.  Prices reported represent
prices between dealers, do not include retail markups, markdowns or
commissions and do not necessarily represent actual transactions.

<TABLE>
<CAPTION>
       1ST QUARTER     2ND QUARTER      3RD QUARTER      4TH QUARTER
       HIGH    LOW     HIGH    LOW      HIGH    LOW      HIGH    LOW
<S>    <C>     <C>     <C>     <C>      <C>     <C>      <C>     <C>
1999    .32    .15      .52    .12       .24    .06       .13    .05
2000    .32    .05      .15    .07       .26    .11       .17    .06
</TABLE>

As of December 31, 2000 the Company had issued and outstanding 58,803,716
shares of Common Stock and there were approximately 449 shareholders of
record, which figure does not take into account those shareholders whose
certificates are held in the name of broker-dealers.

At December 31, 2000, the Company had outstanding 14,363 shares of
Preferred Stock.  The Preferred Shares were exchanged for Series B
Preferred Stock (described below) upon implementation of the Plan,
effective January 22, 2001.

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, $.001 par
value 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.

The Company authorized the issuance of 4,000,000 shares of Series A
Preferred Stock, par value $.001("Series A").  At March 31, 2001, 1,595,264
Series A Preferred shares were issued and outstanding.  Each Series A share
has a $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.

The Company authorized the issuance of 600,000 shares of Series B Preferred
Stock, par value $.001 ("Series B").  At March 31, 2001, 600,000 Series B
Preferred shares were issued and outstanding.  Each Series B share has a
$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 5
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
                                 -8-
<PAGE>
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.

The Company has Class A and Class B Warrants, which were 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
that entitle the holder to purchase, for an exercise price of $1.50,
expiring three years from January 22, 2001, one share of Common Stock.

DIVIDEND POLICY

The Company has not declared or paid cash dividends or made distributions
in the past, and the Company does not anticipate that it will pay cash
dividends or make distributions in the foreseeable future. The Company
currently intends to retain and reinvest future earnings to finance its
operations.  Holders of the Preferred Shares are entitled to receive their
redemption payments prior to the Company paying any dividends on its other
capital stock.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-KSB.

When the Plan was implemented in January 2001, the Company received a cash
infusion of $600,000 for payment of administrative claims associated with
the Chapter 11 proceeding and for use as operating capital.  This amount
has proved inadequate to fund the Company's operations.  Continued
operation of the Company will require additional debt or equity funding to
enable it to properly deploy POWER{X}.  The Company's auditor's report
contains a "going concern" qualification.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board ("FASB") has issued SFAS No 132.
"Employers' Disclosures about Pensions and other Postretirement Benefits,"
which standardizes the disclosure requirements for pensions and other
Postretirement benefits and requires additional information on changes in
the benefit obligations and fair values of plan assets that will facilitate
financial analysis. SFAS No. 132 is effective for years beginning after
December 15, 1997 and requires comparative information for earlier years to
be restated, unless such information is not readily available. Management
believes the adoption of this statement will have no material impact on the
Company's financial statements.

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
                                 -9-
<PAGE>
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.

RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2000, AS
COMPARED TO THE TWELVE MONTHS ENDED DECEMBER 31, 1999

The following table sets forth, for the two most recent fiscal years ended
December 31, 2000 and 1999, the percentage relationship to total revenues
of principal items in the Company's Statement of Operations.  It should be
noted that percentages discussed throughout this analysis are stated on an
approximate basis.

                                      Years Ended December 31,
                                      2000               1999

Total revenues                        100%               100%
Costs of sales                         25%                51%
Operating expenses                  37660%              2916%
(Loss) from operations             (37585%)            (2867%)
Other income                         1292%               130%
Net (loss)                         (36293%)            (2737%)

Total revenue of $742 for the year ended December 31, 2000 ("2000")
represents a 99% decrease from total revenue of $80,340 for year ended
December 31, 1999 ("1999").  This entire decrease is primarily attributed
to the decrease in POWER{X} sales in 2000 as a result of the POWERx sale to
MedSmart in October 1999.  For the most part, the Company had no other
operating business during 2000.  Cost of sales (as a percentage of total
revenue) decreased from 51% for 1999 to 25% in 2000.  This decrease in 2000
occurred because royalty income, unlike sales of medical supplies, had no
cost of sales associated with it.

Operating expenses for 2000 decreased 88% when compared with the same
period for 1999, primarily from the (88%) decrease in general and
administrative expenses.  This decrease was attributed to the substantial
elimination of operations for the Company because of the bankruptcy and the
Chief Financial Officer being the only employee.  The Company shared
offices with MedSmart and had no rent expense in 2000 due to the reduction
of personnel, and the elimination of marketing and advertising expenses due
to discontinuing sales activities.

Net other income in 2000 was $9,589 primarily from financial services
provided to an outside customer.  In 1999, the Company had net other income
of $104,708 primarily from the $142,697 gain realized on the sale of
Company assets.

                               -10-
<PAGE>
NET OPERATING LOSSES

The Company has accumulated approximately $10,950,000 of net operating loss
carryforwards as of December 31, 2000, which may be offset against taxable
income and income taxes in future years.  The use of these losses to reduce
future income taxes will depend on the generation of sufficient taxable
income prior to the expiration of the net operating loss carryforwards.
The carry-forwards expire in the year 2018.  In the event of certain
changes in control of the Company, there will be an annual limitation on
the amount of net operating loss carryforwards which can be used.  No tax
benefit has been reported in the financial statements for the year ended
December 31, 2000 because the Company believes the carryforward may expire
unused.  Accordingly, the potential tax benefits of the loss carryforward
is offset by a valuation allowance of the same amount.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's working capital needs have been satisfied
primarily through its financing activities including private loans and
raising capital through the sale of securities.  Working capital at
December 31, 2000 was a negative $4,896,888 compared to a negative
$4,601,252 at December 31, 1999.  Net cash used in operating activities was
$156,220 in 2000 compared to $692,504 in 1999.  This decrease in net cash
used in 2000 was due primarily to the decrease in net loss.  The Company
also realized $154,550 from financing activities in 2000 compared to
$662,313 in 1999.  This decrease was primarily due to no proceeds from the
issuance of common stock in 2000 and no proceeds from notes payable from
related parties.

The Company's ability to meet its working capital needs and continuation as
a going concern during fiscal 2001 will depend primarily on its ability to
obtain additional future financing  and successful implementation of
MedSmart's marketing, distribution and sale of POWERx cards and related
products.

As of December 31, 2000, the Company had total assets of $32,301 and total
stockholders' deficiency of $4,902,676, compared to December 31, 1999 at
which time the Company had total assets of $198,521 and total stockholders'
deficiency of $4,550,348.

INFLATION

In the opinion of management, inflation has not had a material effect on
the operations of the Company.

RISK FACTORS AND CAUTIONARY STATEMENTS

Forward-looking statements in this report are made pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
The Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements.  Forward-looking
statements involve risks and uncertainties that could cause actual results
                                 -11-
<PAGE>
to differ materially from those expressed in or implied by the statements,
including, but not limited to, the following: the ability of the Company to
continue as a viable concern post implementation of the Plan, the ability
of the Company to obtain financing in order to implement its business plan
and other risks detailed in the Company's periodic report filings with the
Securities and Exchange Commission.

ITEM 7.   FINANCIAL STATEMENTS

The Company's financial statements as of and for the fiscal years ended
December 31, 2000 and 1999 have been examined to the extent indicated in
their report by Sprouse & Winn, LLP and Jones, Jensen and Company,
respectively, independent certified accountants, and have been prepared in
accordance with generally accepted accounted principles and pursuant to
Regulation S-B as promulgated by the Securities and Exchange Commission.
The aforementioned financial statements are included herein in response to
Item 7 of this Form 10-KSB.


PART III


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

Listed below is information about the Company's directors and executive
officers as of December 31, 2000.  As part of the implementation of the
Plan in January 2001, a new slate of directors and officers were installed,
as described in the Company's report on Form 8-K dated January 22, 2001.
Directors are elected by shareholders at each annual shareholders' meeting
and serve until their successors are elected and qualified.  There are no
agreements with respect to the election of directors. Officers are
appointed annually by the Board of Directors and each executive officer
serves at the discretion of the Board of Directors.  The Company does not
have any standing committees.

None of the officers and/or directors of the Company are officers or
directors of any other publicly traded corporation, nor have any of the
directors and/or officers, nor have any of the affiliates or promoters of
the Company filed any bankruptcy petition, been convicted in or been the
subject of any pending criminal proceedings, or the subject or any order,
judgment, or decree involving the violation of any state or federal
securities laws within the past five years.

At December 31, 2000, the following persons served as the directors and
executive officers of the Company its subsidiaries and affiliated
companies.

NAME                    AGE              POSITIONS HELD

James R. Kennard         64     Chief Executive Officer, Chairman and
                                Director

Eugene M. Rothchild      69     President and Director

Roger H. Folts           62     Secretary/Treasurer and
                                Chief Financial Officer

                              -12-
<PAGE>
     JAMES R. KENNARD became a director of the Company in 1999 and was
appointed Chief Executive Officer on January 17, 2000.  Mr. Kennard has
over forty years of business experience in the aerospace, computer and
medical equipment industries.  He retired in 1988 from Transicoil, Inc.,
where he was C.O.B, C.E.O and President.  Since his retirement, Mr. Kennard
been active in business planning and consulting projects.  He is presently
the majority shareholder and President of Fore Seasons Golf, Inc., a golf
practice facility in Pennsylvania.  He received his initial education with
General Electric's Apprentice Toolmaker program, affiliated with Purdue
University, in the 1950's and continued with a four year manufacturing
management program and advanced manufacturing management program, also with
General Electric.  Mr. Kennard has also completed a series of programs with
the American Management Association and has completed the "Presidents
Course" as a member of their President's Association in 1985.

     EUGENE M. ROTHCHILD became a director of the Company in July 1999 and
was appointed and was named President of the Company on January 17, 2000.
Mr. Rothchild received a BBA Degree from the University of Cincinnati in
1954 and earned his Juris Doctor degree from the University of Cincinnati,
College of Law, in 1956.  Mr. Rothchild served as a U.S. Air Force Judge
Advocate on active duty from 1958 to 1960 and was an attorney for the
National Labor Relations Board from 1964 to 1969.  From 1969 to the
present, he has practiced law in the Cincinnati, Ohio area specializing in
estate, business and negligence law.

     ROGER H. FOLTS has been the Company's Chief Financial Officer and
Treasurer since March 1993, was appointed corporate Secretary in January
2000.  He also served as a director until 1998.  Mr. Folts first joined
NHSC-Pennsylvania at its inception in 1989 and has served as Vice President
and Chief Financial Officer since November, 1991.  Also from 1989 to the
present, Mr. Folts has been an adjunct professor at the Philadelphia
College of Textiles and Science teaching business policy and marketing
courses.  From 1990 to 1992, Mr. Folts was the owner and operator of Delval
Recharge, Inc., located in Southhampton, Pennsylvania, a company involved
in servicing laser printers and copiers, and from 1987 to 1990, Mr. Folts
operated Roger H. Folts & Associates, which presented management seminars
and which was located in Southhampton, Pennsylvania.  Mr. Folts earned a
B.A. Degree in mathematics from Harvard University in 1960, and a M.B.A.
from the University of Chicago in 1966.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 and Securities and
Exchange Commission Regulations require that the Company's directors,
certain officers, and greater than 10 percent shareholders file reports of
ownership and changes in ownership with the SEC and the NASD and furnish
the Company with copies of all such reports they file.  Based solely upon a
review of the copies of the form furnished to the Company, or written
representations from certain reporting persons that no reports were
required, the Company believes that no other persons failed to file
required reports on a timely basis during or in respect of 2000.

                                -13-
<PAGE>
ITEM 10.  EXECUTIVE COMPENSATION

In January 2000, James R. Kennard became the chief executive officer of the
Company.  Mr. Kennard received no salary or other compensation for his
services in 2000 or in any prior year. No executive officer of the Company
has received compensation of more than $100,000 in any of the past three
years. The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or directors.

EMPLOYMENT AGREEMENTS

In accordance with the confirmed Fourth Amended Joint Plan of
Reorganization in conjunction with its bankruptcy, all employment
agreements have been canceled.  Neither the Company nor MedSmart have any
employment agreements.

STOCK OPTION GRANTS AND EXERCISES IN 2000

The Company did not grant any stock options, stock appreciation rights or
Long-Term Incentive Plan Awards to its officers or employees during 2000.
None of the executive officers exercised any stock options or stock
appreciation rights in 2000, 1999, or 1998.  James R. Kennard, the chief
executive officer, had no stock options outstanding at the end of 2000.

COMPENSATION OF DIRECTORS

The Company has not compensated its directors for service on the Board of
Directors or any committee thereof, but directors are reimbursed for
expenses incurred for attendance at meetings of the Board of Directors and
any committee of the Board of Directors.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth certain information regarding the ownership
of the Company's voting securities as of December 31, 2000, by: (i) each
person the Company knows to own beneficially more than 5% of the
outstanding shares of each class of equity securities, (ii) each of the
Company's directors, and (iii) all of the Company's directors and officers
as a group.

On December 31, 2000, 58,803,716 shares of the Company's Common Stock were
outstanding.

                                                    Shares Owned{ (1)}
SHAREHOLDER                                        NUMBER         PERCENT

James R. Kennard, Chairman, Director               75,380             *
and Chief Executive Officer
1053 Buckeye Lane
Greentown, PA 18426

                                  -14-
<PAGE>
Eugene M. Rothchild, President and Director       722,500          1.23%
14 Woodcreek Drive
Cincinnati, OH 45241

Roger H. Folts, Chief Financial Officer           253,500(3)          *
19 Foxcroft Drive
Doylestown, PA 18901

Joseph Hirschberg                               3,790,000          6.45%
10110 N. Lee Court
Mequon, WI 53092

All directors and executive officers as a
group (4 persons)                               1,051,380          1.79%

* Constitutes less than one percent of outstanding shares.

(1)Based upon 58,803,716 shares of Common Stock outstanding on December 31,
2000, but does not include shares of Common Stock issuable upon conversion
of Preferred Stock, because the Preferred Stock was exchanged for new
shares of Series B Preferred Stock as part of the Plan of Reorganization
that was confirmed in November 2000 and implemented in January 2001.
Percentage ownership is calculated separately for each person on the basis
of the actual number of outstanding shares as of December 31, 2000.  All
previously issued stock options have been cancelled as a part of the Plan.

(2)  Includes 90,000 shares in the names of Mr. Bowers' children.

(3)  Includes 3,000 shares owned by Barbara Folts, wife of Roger Folts.

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

(a)Certain of the Exhibits set forth in the following index are
incorporated by reference.

2.1*     Fourth Amended Joint Plan of Reorganization, In Re: National
         Health & Safety Corporation, Debtor, Case No.  99-18339-DWS, U.S.
         Bankruptcy Court, Eastern District of Pennsylvania, dated August
         21, 2000, incorporated by reference to the Company's report on
         Form 8-K dated November 28, 2000.

2.2*     Fourth Amended Disclosure Statement , In Re: National Health &
         Safety Corporation, Debtor, Case No.  99-18339-DWS, U.S.
         Bankruptcy Court, Eastern District of Pennsylvania, dated August
         21, 2000.

2.3*     Asset Purchase Agreement by and between MedSmart Healthcare
         Network, Inc., as Seller and National Health & Safety Corporation,
         as Purchaser, January 22, 2001.

                                    -15-
<PAGE>
2.4*     Order confirming Fourth Amended Joint Plan of Reorganization,
         dated November 27, 2000.

3.1*     Amended and Restated Articles of Incorporation, filed with the
         Utah Department of Commerce Division of Corporations and
         Commercial Code on January 22, 2001.

3.2*     Bylaw Amendment, adopted on January 22, 2001.

4.1*     Certificate of Designation for Series A Preferred Stock, filed
         with the Utah Department of Commerce Division of Corporations and
         Commercial Code on January 22, 2001.

4.2*     Certificate of Designation for Series B Preferred Stock, filed
         with the Utah Department of Commerce Division of Corporations and
         Commercial Code on January 22, 2001.

4.3*     Warrant Agreement, filed with the Utah Department of Commerce
         Division of Corporations and Commercial Code on January 22, 2001.

4.4*     Class A Warrant Certificate, dated January 22, 2001.

4.5*     Class B Warrant Certificate, dated January 22, 2001.

21.1*    Subsidiaries of the Registrant- MedSmart Healthcare Networks, Inc.

27.1     Financial Data Schedule.

----------
* Previously filed as an exhibit to the Company's report on Form 8-K dated
January 22, 2001 and incorporated by reference herein.

(b)  Reports on Form 8-K

The Company filed an 8-K report dated November 28, 2000, announcing the
confirmation of its Plan of Reorganization by the bankruptcy court.

After the close of the 2000 fiscal year, the Company filed an 8-K report
dated January 22, 2001, reporting the implementation of the Plan of
Reorganization, including the acquisition of MedSmart Healthcare Network,
Inc.

The Company filed another 8-K report dated February 8, 2001, reporting that
it had terminated its former accountant and had retained Sprouse & Winn,
LLP as its independent auditors.  The Company also reported the election of
new directors to its board, as part of the implementation of its Plan of
Reorganization.

                                  -16-
<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

                                              /s/
Date: April 16, 2001               ___________________________
                                   Gary Davis, President and Chief
                                   Executive Officer

                                              /s/
Date: April 16, 2001               ___________________________
                                   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.

                                              /s/
Date: April 16, 2001               ___________________________
                                   Gary Davis, Director and Chairman of the
                                   Board of Directors

                                              /s/
Date: April 16, 2001               ___________________________
                                   Eugene M. Rothchild, Director


                                              /s/
Date: April 16, 2001               ___________________________
                                   James R. Kennard, Director


                                              /s/
Date: April 16, 2001               ___________________________
                                   Jimmy E. Nix II, Director

                                  -17-
<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' REPORT               F-1-3

FINANCIAL STATEMENTS

   Balance Sheet                             F-4

   Statements of Operations                  F-5

   Statements of Stockholders' Deficiency    F-6

   Statements of Cash Flows                  F-7

   Notes to Financial Statements          F-8-14


<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, stockholder's 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 years 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.

                                 F-1
<PAGE>

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-2
<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 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,  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-3
<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 $f8,200                                                16,614
                                                             ----------------
    Total Current Assets                                               18,089
                                                             ----------------
Other Assets
  Restricted case                                                      14,212
                                                             ----------------
  Total Current 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;
    59,634,062 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-4

<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
  Legal settlement                   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-5
<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-6
<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                  172,358       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 loans
   payable, individuals               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-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

          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-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)

          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, 1999
          ------------------------------------------------------------------
                             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-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)

          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-10
<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-11
<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:

NUMBER ISSUED   PURCHASE PRICE                           EXPIRATION DATE
-------------   --------------                           ---------------

487,500         Lesser of $1.50 or 75% of current price     12/31/00
131,665         Lesser 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

The Company has the following outstanding stock options:

<TABLE>
<CAPTION>
                                 STOCK OPTIONS ISSUED
DATE      PRICE    EXPIRATION      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-12
<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-13
<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-14