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

                                   FORM 10-KSB

(Mark One)

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

                         For the fiscal year ended 12/31/01

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

                         For the transition period from _________ to ___________

Commission file number 0-27123

                             MEDIQUIK SERVICES, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

           Delaware                                      74-2876711
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

4299 San Felipe, Suite 300, Houston, Texas.              77027
-------------------------------------------            ----------
 (Address of principal executive offices)              (Zip Code)

Issuer's telephone number (832) 200-7000

Securities registered under Section 12(b) of the Exchange Act:

   Title of each class                 Name of each exchange on which registered
   -------------------                 -----------------------------------------

None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, $.001 par value 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 |_|

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


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      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 registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

      State issuer's revenues for its most recent fiscal year. $2,507,740

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

      As of March 28, 2002: $1,947,611

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

      As of March 31, 2002: 11,061,528 shares

                       DOCUMENTS INCORPORATED BY REFERENCE

               Document                                  Part of Form 10-KSB
               --------                                  -------------------

Proxy Statement for the 2002 Annual Meeting of                 Part III
             Stockholders                               Items 9, 10, 11 and 12

      Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|


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<PAGE>

                             MEDIQUIK SERVICES, INC.

                                                                            Page

PART I

ITEM 1    DESCRIPTION OF BUSINESS                                              4

ITEM 2    DESCRIPTION OF PROPERTY                                             12

ITEM 3    LEGAL PROCEEDINGS                                                   13

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS                  13

PART II

ITEM 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS            14

ITEM 6    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION           15

ITEM 7    FINANCIAL STATEMENTS                                                19

ITEM 8    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                   ACCOUNTING AND FINANCIAL DISCLOSURE                        35

PART III

ITEM 13   EXHIBITS AND REPORTS ON FORM 8-K                                    37


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<PAGE>

                                     PART I.

Item 1. Description of the Business

Overview

      MediQuik Services, Inc., DBA SureCare, is a distributed healthcare
company. Distributed healthcare is a new term that describes an emerging niche
in the healthcare market. Distributed healthcare is disease focused linkage of
goods distribution with consumer education and experience while collecting and
distributing important clinical outcomes data. Distributed healthcare provides
products and benefits both for the healthcare consumer (member) and the
healthcare payer. Distributed goods include such items as nonprescription and
prescription pharmaceuticals, equipment, testing supplies, educational
materials, member monitoring, and consultations. The health care payers include
government programs, self-insured, self-administered employers of all sizes,
small to moderate sized health insurance companies, small to moderate sized
health maintenance organizations, preferred provider organizations, pharmacy
benefits managers, and third-party administrators. Our first and only presently
offered product is a diabetes self-management program that includes diabetes
equipment, supplies, and clinical status questionnaires. As our business
matures, we intend to offer other disease- focused products, such as respiratory
and congestive heart failure self-management programs.

      Our predecessor, also chartered under the name "MediQuik Services, Inc.,"
was organized in Delaware on April 7, 1998 ("Old MediQuik"). Effective December
31, 1998, Old MediQuik was merged with and into Cash Flow Marketing, Inc., a
Delaware corporation ("Cash Flow"). Cash Flow was the surviving corporation and
changed its name to MediQuik Services, Inc. Cash Flow was originally organized
in Colorado on July 9, 1997, and changed its domicile to Delaware effective
December 31, 1998. At the time of the merger, Cash Flow was a "shell"
corporation with substantially no assets, business or operations. Pursuant to
the terms of the merger, each stockholder of Old MediQuik received one share of
our common stock, $.001 par value per share ("Common Stock"), for each .9327
shares of common stock of Old MediQuik held. Each stockholder of Cash Flow
received one share of our Common Stock for each two shares of Cash Flow common
stock held.

      In October 2000, we developed a direct-to-consumer marketing program and
began using the name "SureCare" in our operations. We evaluated the potential of
this direct-to-consumer program in 2001 and decided to pursue a strategy of
internal growth and development of the managed care market through the
distributed healthcare model. We plan to formally change our corporate name to
SureCare, Inc. in 2002.

Our Business

      In recent years, the demand for higher quality health care with reduced
cost has prompted dramatic changes in the United States health care delivery
system. Managed care organizations have emerged to control costs. Today, more
than two-thirds of all Americans with private health insurance are enrolled in
these plans.


                                       4
<PAGE>

      MediQuik was organized to take advantage of these changes in the delivery
of health care. We provide distributed healthcare services to members pursuant
to contracts with health care payers. Our services include mail order home
delivery of non-prescription pharmaceuticals, equipment, supplies and
educational materials, as well as member monitoring and call center services.
Our customers include self-pay members, government programs, self-insured and
self-administered employers of all sizes, small to moderate sized health
maintenance organizations, third-party administrators and preferred provider
organizations. By entering into agreements with the health care payers, rather
than individual members, we believe that we will be able to obtain a larger
member base more rapidly than otherwise. When we enter into a contract with a
health care payor we typically then become an approved provider for thousands of
members who may select our products and services, ordinarily at a nominal cost
to the member. (Co-pay charges typically represent less than 20% of the price of
our products and services).

      Generally, we enter into agreements with health care payers which provide
that, in consideration of being designated as a plan provider, we will provide
services to plan participants at a discounted rate. After a member is enrolled
in the program, we ship supplies to their home on a monthly, bimonthly or
quarterly basis. We also offer capitated service contracts pursuant to which the
health care payer reimburses us based on the total number of participants in the
plan rather than based on the amount of products and services actually consumed
by the participants. Under capitated service contracts, we would share a portion
of the risk related to program costs with the managed care payer. Although we
are currently offering capitated services contracts to managed care payers, we
have not yet entered into any such contracts.

      Currently, our only product is a diabetes self-management program, the
major profit component of which is the delivery of self-testing equipment
(glucometers), supplies (test strips, syringes, lancets and alcohol prep pads)
directly to the home of the member. Diabetes Mellitus is the most common and
most costly chronic disease in the United States. In a release dated November 1,
1998, the National Center for Chronic Disease Prevention and Health Promotion of
the Centers for Disease Control and Prevention (the "CDC") estimated that 15.7
million people in the United States, or 5.9% of the population, have diabetes.
Of that number only about 10.3 million have been diagnosed. We believe that we
are positioned to provide services to an aging population with greater
incidences of diabetes.

      We have focused on preventive diabetes care products and services and have
successfully negotiated supply contracts that permit us to purchase large
quantities of diabetes care products at favorable prices. In addition, by
providing educational materials, member monitoring, and call center services, we
believe that we will provide better member management, which reduces the need
for hospitalization and prevents the development of other chronic diabetic
health related problems. Due to the chronic nature of the disease, we expect our
medical and financial relationship with a member to continue for many years. As
of December 31, 2001, we had entered into agreements with the following major
providers:

National HealthCare Alliance, Inc.               Blue Cross/Blue Shield of Texas
MultiPlan, Inc.                                  Advantage Care Network


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<PAGE>

SMC Benefits Services                            Benefit Services, Inc.
Americaid                                        ProMed Health
Mediversal                                       Methodist Care, Inc.

      These agreements generally require that, in consideration of being named a
"Plan Provider," we will provide products and services to plan participants at a
discounted rate. The Provider Agreements typically have a term of one to two
years with provisions for automatic renewal unless terminated at the election of
either party. Our agreements with our current providers will continue from year
to year unless terminated by either party.

      After we achieve satisfactory market penetration with the diabetes
self-management product, we intend to develop and offer respiratory and
congestive heart failure self-management services. We cannot assure you,
however, that we will achieve such market penetration or develop and offer other
medical management services.

      To support our business activity, we have conducted focus groups for
Abbott Medi-Sense, a large manufacturer/distributor of diabetic supplies, and we
have agreed to market Abbott's new Optium Meter and test strips, without any
specific sales quotas or pricing requirements. We believe this relationship has
enabled us to expand our profit margins while providing better service to our
members.

      In order to be in a position to service multiple segments of the
marketplace, we have procured Medicare, Medicaid and Pharmacy licensure. In
conjunction with receiving a Texas State Board Pharmacy License, we have also
obtained a NCPDP number as issued by the National Council for Prescription Drug
Programs, Inc. The pharmacy license allows us the flexibility to contract with
health care payers or the pharmacy benefit managers utilizing either the durable
medical equipment or pharmacy benefit.

Corporate Structure

      On June 30, 2000, we entered into a stock purchase agreement with
MiraQuest Capital Holdings, Inc./MiraQuest Ventures, LLC ("MiraQuest"), an
internet/e-commerce holding company comprised primarily of entities serving the
business-to-business market. The transaction provided us with $2,000,000 in
funding and an equity interest in MiraQuest. The transaction provided MiraQuest
an equity ownership which resulted in MiraQuest's control of 70% of voting power
through the issuance of 7,048,996 shares of common stock, a warrant to purchase
650,000 shares of common stock at $0.60 per share, and 513,266 shares of Series
A convertible preferred shares convertible into 20 shares of common stock each
and entitled to vote as if converted into common stock. As of November 17, 2000,
we had received the entire $2,000,000 pursuant to the terms of the transaction,
together with approximately 17% of the units of MiraQuest valued at $9,200,000.
As a result of the transaction, we became a majority-owned subsidiary of
MiraQuest.

      On April 20, 2001, our Board of Directors and that of MiraQuest approved a
plan (the "Plan") to partially reverse the MiraQuest transaction. The Plan
contemplated i) our redemption of all our outstanding preferred shares owned by
MiraQuest; ii) our return to


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<PAGE>

MiraQuest of all its membership units owned by us; iii) the conversion of the
balance owed on certain loans by affiliates of MiraQuest to equity; iv) an
additional cash equity contribution of $500,000 from MiraQuest; v) MiraQuest's
agreement to sell back for a nominal amount a number of shares of the common
stock necessary to reduce its equity ownership to approximately 30% once a new
capital partner is found for our company; and vi) MiraQuest's agreement to
relinquish its power to nominate members to the Board of Directors. The Plan was
finalized and we entered a Partial Transaction Restructuring Agreement effective
as of July 27, 2001, closing on September 27, 2001. With the restructure
transaction, the MiraQuest equity ownership in the company dropped from 73% to
41% on a fully diluted basis. Further, it was agreed that upon the satisfaction
of certain additional equity investments in MediQuik by third parties,
MiraQuest's ownership would reduce to 30% immediately prior to such investment.

      In May 1999, we formed a subsidiary named ChronicRx.com, in which we owned
80% of the outstanding equity, to provide Internet-based pharmacy services. In
June 2000, we purchased the remaining approximate 20% interest of ChronicRx.com
from our shareholders through the issuance of 65,903 of our shares at $1.75 per
share through which ChronicRx.com became our wholly owned subsidiary. In 2001,
we determined that a separate subsidiary was no longer required, and the
separate entity was terminated. The company is currently using the trade name
"Chronic Rx.com" in conjunction with its Internet offerings.

Competition

      The business of providing blood sugar monitoring supplies by mail order is
an immature industry characterized by high growth rates, low barriers to entry,
and many small competitors. Of the many companies that are mail order providers
of blood glucose monitoring supplies, most do not directly compete with us
because they generally concentrate on Medicare members by direct solicitation,
rather than focusing on health care payers. To the best of our knowledge, each
sells to members rather than payers under distribution agreements with the major
manufacturers.

      Several companies do compete with us in the traditional fee for service
market. We are aware of one company that has a marketing agreement with certain
manufacturers that target payers as clients rather than individual members.
National Diabetic Pharmacies, Inc. ("NDP"), is based in Roanoke, Virginia. NDP
works primarily with diabetic managed care members and has approximately
$22,000,000 in annual sales. NDP distributes products manufactured by Boehringer
Mannheim. Additionally, our entry into the direct to consumer market puts us in
competition with Polymedica Corporation, doing business as Liberty Medical.
Liberty Medical targets primarily the Medicare segment of the diabetes market,
and has the greatest market share in the Medicare market.

      We have developed a program that shares cost containment directly with the
payer, which we believe makes us effective as both a capitated fee and a fee for
service provider. Under such an arrangement, a managed care payer would make
payments to us based on the total number of participants in our plan rather than
the amount of services actually consumed by our participants. Under capitated
fee contracts we risk that the cost of services we provide will


                                       7
<PAGE>

exceed fees paid, but we believe that capitated contracts will create a common
financial interest with our potential clients. Once payer clients recognize the
advantages of capitated agreements, we believe that our competitors will adopt
this strategy. Although we are currently offering capitated service contracts to
managed care payers, we have not entered into any such contracts to date.

The Industry

      In a release dated November 1, 1998, the CDC estimated that 15.7 million
people in the United States, or 5.9% of the population, had diabetes and that
approximately 798,000 new cases of diabetes are diagnosed each year. The U.S.
demand for diabetes monitoring and maintenance, supplies, pharmaceuticals and
equipment is expected to grow from $4.692 billion in 2000 to $6.545 billion by
2005. According to a March 1996 report of the Genesis Group Associates, Inc.
entitled "The Diabetes Dilemma Managing Markets and Technology" (the "Genesis
Report"), both the U.S. population and the incidence of diabetes in the U.S.
population appear to be increasing. The Genesis Report also indicates that on a
worldwide basis, Johnson & Johnson, Boehringer Mannheim, Bayer and MediSense,
Inc. are the major manufacturers in the field. Effective July 1, 1998, Medicare
coverage was extended pursuant to the Balanced Budget Act of 1997 to permit the
reimbursement of diabetes self-testing supplies, as well as educational and
training services for diabetes. Management believes that managed care payers
will view Medicare's reimbursement guidelines as the baseline for pricing these
products and services.

      Market Segmentation. We believe that there are five business models in the
market for diabetes testing supplies, pharmaceuticals and equipment:

      1. Retail Pharmacies. Retail pharmacies typically offer a range of
products from different manufacturers that are available without prescription.
Purchasers may be reimbursed directly by their insurance carrier or Medicare for
diabetes care products. Most payers, including Medicare, reimburse members for
the cost of the supplies less annual deductible and co-payment amounts. Rules
for qualification and reimbursement for private insurance and Medicaid members
vary from state to state.

      2. Managed Care Providers. Some managed care providers distribute diabetes
care products directly to members covered by their plan. We understand that many
managed care providers have distribution agreements with certain manufacturers
of diabetes care products.

      3. Mail Order. Mail order suppliers often enroll members directly and do
not depend on health care payer referrals. Mail order suppliers tend to
concentrate on Medicare members and often have distribution agreements with each
of the major manufacturers. Mail order suppliers usually handle billing and
collecting from third-party payers for the patient. The member is responsible to
the supplier for deductible and co-pay amounts.

      4. Managed Care Referred Providers. Certain providers receive member
referrals directly from managed care payers. Of the two companies we know of in
this segment, we believe that each has an agreement with a manufacturer that
provides a pricing advantage over


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<PAGE>

other supply sources. We offer significant price discounts to the payers and
attempt to secure agreements whereby the managed care payer waives deductible
and co-payment amounts for their members.

      5. Capitated Fee Providers. Although we are not aware of any provider of
diabetes services that offer a capitated fee arrangement, we have developed such
a system. Under capitated fee arrangements, we agree to provide certain
diabetes-related services for a group of members for a fixed fee. We believe
that we are the only company prepared to enter into agreements with payers to
share in the financial risk of patient treatment as combined with supply
distribution. Although we offer such arrangements, we have not entered into any
capitated fee contracts to date.

      Characteristics of Diabetes. There is no cure for diabetes. The disease
can be controlled, with the patient participation in that control. Diabetes is a
disease characterized by high levels of blood glucose. During the normal
digestion process, the body converts food into glucose (sugar) to be used by the
body's cells as a source of energy. Insulin, a hormone produced by the pancreas,
is necessary for normal utilization of glucose by most cells in the body. In
people with diabetes, insulin is either absent, not produced in sufficient
amounts, or the body does not respond to the insulin that is produced. Without
insulin or effective use of insulin, the body cannot use glucose for energy.
Instead, glucose builds up in the blood, creating high sugar levels in the body.
In order to control diabetes, the patient must regularly determine his blood
sugar levels. This is normally done at home and is a simple and relatively
painless process. Members use a lancet to prick a finger and draw a drop of
blood that is deposited upon a test strip. The test strip is then introduced
into a glucometer that displays the patient's blood sugar level a few seconds
later.

      Diabetes is typically categorized into four types:

      1. Type 1 Diabetes was previously called Insulin-Dependent Diabetes
Mellitus or Juvenile-Onset Diabetes. According to the CDC, Type 1 Diabetes may
account for 5% to 10% of all diagnosed cases of Diabetes. Risk factors
contributing to the development of the disease are less well defined for Type 1
Diabetes than for Type 2 Diabetes, but autoimmune, genetic, and environmental
factors are involved in the development of this type of diabetes.

      2. Type 2 Diabetes was previously called Non-Insulin-Dependent Diabetes
Mellitus or Adult-Onset Diabetes. The CDC estimates that Type 2 Diabetes may
account for about 90% to 95% of all diagnosed cases of diabetes. Factors
associated with Type 2 Diabetes include age, obesity, family history of
diabetes, prior history of Gestational Diabetes, impaired glucose tolerance,
physical inactivity, and ethnicity. According to the CDC, African Americans,
Hispanic or Latin Americans, American Indians, and some Asian Americans and
Pacific Islanders are at particularly high risk for Type 2 Diabetes.

      3. Gestational Diabetes develops in 2% to 5% of all pregnancies, according
to the CDC, but disappears when a pregnancy is over. The CDC also reports that
Gestational Diabetes occurs more frequently in African Americans, Hispanic/Latin
Americans, American Indians, and


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<PAGE>

persons with a family history of diabetes. Obesity also increases the risk of
Gestational Diabetes. Women who have a history of Gestational Diabetes are at
increased risk for later developing Type 2 Diabetes. According to the CDC, some
studies have found that nearly 40% of women with a history of Gestational
Diabetes developed diabetes in the future.

      4. "Other specific types" of diabetes result from specific genetic
syndromes, surgery, drugs, malnutrition, infections, and other illnesses. The
CDC reports that such types of diabetes may account for 1% to 2% of all
diagnosed cases of diabetes.

      Treatment emphasizes control of blood glucose through blood glucose
monitoring, regular physical activity, meal planning, and attention to relevant
medical and psychosocial factors. In many members, oral medications and/or
insulin injections are also required for appropriate glucose control. Treatment
of diabetes is an ongoing process that is planned and regularly reassessed by
the health care team, the person with diabetes, and his or her family.

Acquisition Strategy

      In addition to internal growth described above, we intend to grow by
acquiring disease focused durable medical equipment companies. Through such
acquisitions, we intend to develop or increase our capability to conduct order
fulfillment, billing and collecting, sales, utilization, reporting and other
operations for the home delivery of prescription drugs and disease management
products and supplies to members nationwide.

Dependence on Major Customers

      We depend on the health care payers with which we have provider
agreements. If any health care provider with which we do business decides to end
its relationship with us, and we are not able to secure new relationships, our
future business and operating results could be materially and adversely
affected. In addition, the health care industry is undergoing substantial
consolidation. In the event payers which currently have provider agreements with
us are acquired by payers not associated with us, the acquired payer may elect
to terminate its agreement with us.

Intellectual Property

      The service mark "Medi Quik" was registered by the United States Patent
and Trademark Office on June 13, 2000. After conducting a marketing study and
campaign in September and October 2000, we decided to change our company's name
to SureCare. The name SureCare has been registered with the State of Texas, and
reserved in the State of Delaware. Our Board of Directors has resolved to take
all necessary steps to effect our change of name to SureCare, Inc., which we
expect will happen in 2002.

Governmental Regulations

      Numerous state and federal laws and regulations affect our business and
operations.


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<PAGE>

Some of those laws and regulations are discussed below. We believe that we are
operating our business in substantial compliance with all existing legal
requirements material to the operation of our business. There are, however,
significant uncertainties regarding the application of many of these legal
requirements. We cannot assure you that a regulatory agency charged with
enforcement of any of these laws or regulations will not interpret them
differently than we have. We cannot guarantee that if an enforcement action is
brought against us, that we would prevail. In addition, there are numerous
proposed healthcare laws and regulations at the federal and state levels, many
of which may materially affect our ability to conduct our business as it is
presently conducted or adversely affect our results of operation.

      We are unable to predict what additional federal or state legislation or
regulatory initiatives may be enacted in the future relating to our business or
the healthcare industry in general, or what effect such legislation or
regulations may have on us. We cannot assure you that federal or state
governments will not impose additional restrictions or adopt interpretations of
existing laws that could have a material adverse effect on our business or
results of operation. We believe that our operations are currently subject to
these laws only to a limited extent, however, because our current customers are
managed care payers whose revenue is primarily derived from private rather than
government sources.

      Anti-remuneration laws. We are subject to federal and state
anti-remuneration laws, such as the Medicare/Medicaid anti-kickback laws, which
govern certain financial arrangements among health care providers and others who
may be in a position to refer or recommend members to such providers. These laws
prohibit, among other things, direct and indirect payments that are intended to
induce the referral of members to, the arranging for services by, or the
recommending of, a particular provider of health care items or services. The
Medicare/Medicaid anti-kickback law has been broadly interpreted to apply to
certain contractual relationships between health care providers and sources of
patient referral. State laws vary from state to state, are sometimes vague and
seldom have been interpreted by courts or regulatory agencies. Violation of
these laws can result in civil and criminal penalties, and exclusion of health
care providers or suppliers from participation in (i.e., furnishing covered
items or services to beneficiaries of) the Medicare and Medicaid programs.

      Billing Regulation. Certain provisions in the Social Security Act
authorize penalties, including exclusion from participation in Medicare and
Medicaid, for various billing-related offenses. The Department of Health and
Human Services can also initiate permissive exclusion actions for improper
billing practices such as submitting claims "substantially in excess" of the
provider's usual costs or charges, failure to disclose ownership and officers,
or failure to disclose subcontractors and suppliers.

      Federal and State Assistance Programs. Funds received by the healthcare
providers under Medicare and Medicaid are subject to audit with respect to the
proper application of various payment formulas. Such audits can result in
retroactive adjustments of revenue from these programs, resulting in either
amounts due to the government agency from the provider or amounts due the
provider from the government agency. We do not currently receive payments under
any Medicare or Medicaid program, but we may elect to engage in such business in
the


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<PAGE>

future.

      Environmental Laws. Certain federal and state laws govern the handling and
disposal of medical, infectious and hazardous waste. Although we sell and supply
products that could be deemed medical, infectious or hazardous waste after use
by the patient, we are not involved in the handling or disposal of such
materials after use by members. Further, we do not manufacture products; own
real property; or engage in activities which involve hazardous materials, result
in the discharge of pollutants into the environment or are likely to result in
the violation of any existing environmental rules and/or regulations.
Consequently, we believe we are in compliance with federal, state and local laws
and regulations regarding environmental matters that may be applicable to us, if
any. To date, we have not incurred any material costs in complying with such
laws and regulations and do not anticipate that costs of compliance with such
regulations will have a material affect on our future expenditures, earnings or
competitive position.

      Health Insurance Portability and Accountability Act (HIPAA). Enacted in
1996, HIPAA called for the development of comprehensive privacy standards that
would establish rights for members with respect to their medical records and
define the conditions for using and disclosing personally identifiable health
information. The final regulation requires that most providers obtain patient
consent to use or disclose information before engaging in treatment, payment, or
health care operations, as well as to provide security of confidentiality in the
gathering, storage, and transmission of such data. On August 17,2000, the
Transaction and Code Sets final regulations were published, establishing an
expected compliance date of October 16, 2002 for the physical security
(regardless of the medium) of such records. On December 20, 2001, H.R.3323
provided and additional year for entities to comply with the final regulations,
provided they file a Summary Compliance Plan by the original deadline, detailing
how they will come into compliance within the next year. On December 28, 2000,
the Department of Health and Human Services (HHS) issued the final regulation on
privacy, setting a compliance date of April 14, 2003. We believe that we will be
able to comply with the regulation as finally enacted within the time frames
provided.

Employees and Consultants

      As of December 31, 2001, we had approximately 15 full-time employees
representing 3 executive, 5 management, and 7 hourly positions. Our employees
are not subject to collective bargaining agreements and management believes
relations with employees are good. Our current workforce represents a 25%
reduction over the previous year. We have also eliminated 4 full time consultant
positions. We are using our advanced work flow process technology to automate
many business functions in order to keep our highly trained workforce to minimum
levels.

Item 2. Description of Property

      Our executive and administrative offices are located at 4299 San Felipe,
Suite 300, Houston, Texas 77027, which we lease from an unaffiliated third
party. Our lease covers approximately 5,500 square feet and expires on October
31, 2005. . In 2001, we successfully renegotiated our lease to reduce our lease
space to approximately 1/2 of the original amount, and


                                       12
<PAGE>

recorded a one-time rent abatement expense in consideration of the new
agreement.. Also, in 2001 we brought all major business functions in house and
believe that our current facilities are adequate for our present needs. We have
no present intent to invest in real estate, real estate mortgages or persons
primarily engaged in real estate activities, however we may change this policy
at any time without a vote of security holders. We have obtained insurance to
cover certain risks related to the premises as required by the terms of the
lease.

Item 3. Legal Proceedings

      On December 20, 2001, The United States District Court, Southern District
of Texas, granted a judgment in favor of Bayer and against the Company in the
amount of approximately $494,000 in compensatory damages, approximately $126,000
in pre-judgment interest, and post-judgment interest at the rate of 2.21% per
annum, in connection with a breach of contract claim filed by Bayer on December
6, 2000. Additionally, on March 7, 2002, the Court awarded legal fees to Bayer
in the amount of approximately $119,000. The Company does not have the resources
to pay the amounts awarded and has entered into payment negotiations with Bayer.
The outcome of the negotiations cannot be determined at this time. The Company
has accrued a liability totaling approximately $739,000 in connection with the
Judgment

      We were also named as a defendant in a suit filed by a failed pharmacy
supply company, Medimail, Inc. The lawsuit was filed by a collection law firm on
behalf of the parent company for non-payment of a disputed payable. MediQuik
retained counsel in Las Vegas and is vigorously defending this lawsuit. The
company intends to file a counter-suit if this action is not resolved amicably.
MediQuik believes Medimail failed to perform in its duty as pharmacy supplier
pursuant to the terms of the agreement between the parties. The company has
recorded the disputed Medimail payable on its books, and is seeking to resolve
this matter with opposing counsel. The amount of the disputed payable is
approximately $65,000

      Neither we, nor any of our properties, are a party to any other legal
proceedings which are not routine litigation incidental to our business.

Item 4. Submission of Matters to a Vote of Security Holders

      No matters were submitted during the fourth quarter of the 2001 fiscal
year to a vote of security holders.

                                    PART II.

Item 5. Market for Common Equity and Related Stockholder Matters

      Our common stock was approved for listing on the NASDAQ Over the Counter
Bulletin Board (OTCBB) on February 15, 2001. The common stock was previously
listed on the OTCBB until the SEC adopted NASD Eligibility Rules 6530 and 6540
which requires OTCBB listed companies to be fully reporting and have an approved
registration statement with the SEC. The common stock traded on the pink sheets
prior to re-listing with the OTCBB. As yet our common stock has experienced
limited trading activity. A public trading market having the


                                       13
<PAGE>

characteristics of depth, liquidity and orderliness depends upon the existence
of market makers as well as the presence of willing buyers and sellers, which
are circumstances over which we do not have control. The following table sets
forth the high and low sale prices for our common stock (as reported by the Pink
Sheets and the OTCBB for the periods indicated since the inception of trading in
January 1999). The quotations below reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not represent actual transactions.

                                                    2001
                                                    ----
Period                                High                                Low
------                                ----                                ---

First Quarter                         $ 0.72                              $ 0.20
Second Quarter                        $ 0.25                              $ 0.11
Third Quarter                         $ 0.10                              $ 0.08
Fourth Quarter                        $ 0.08                              $ 0.05

                                                    2000
                                                    ----
Period                                High                                Low
------                                ----                                ---

First Quarter                         $ 2.00                              $ 1.50
Second Quarter                        $ 2.00                              $ 1.40
Third Quarter                         $ 1.50                              $ 0.60
Fourth Quarter                        $ 0.93                              $ 0.25

      On December 31, 2001, the last reported sales of the common stock on the
OTCBB was $0.05. As of March 26, 2001, there were 144 holders of record of the
common stock, as shown on the records of the transfer agent and registrar of the
common stock. Since many shares may be held by investors in nominee names, such
as the name of their broker or their broker's nominee, the number of record
holders often bears little relationship to the number of beneficial owners of
the common stock.

      We have never paid any cash dividends on our stock and anticipate that for
the foreseeable future we will retain earnings, if any, for use in the operation
of our business. Payments of cash dividends in the future will depend upon our
earnings, financial condition, any contractual restrictions, restrictions
imposed by applicable law, capital requirements and other factors believed
relevant by our Board of Directors.

      On October 29, 2001, MediQuik issued 35,000 shares of its common stock to
4295/4299 San Felipe Associates, LP in connection with, and as partial
consideration for, the First Amendment to Office Building Lease that reduced the
space occupied by the Company's for its executive offices. No underwriter was
involved in the transaction and the Company relied on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.

Item 6. Management's Discussion and Analysis or Plan of Operation


                                       14
<PAGE>

Forward Looking Statements

      This management discussion contains certain forward-looking statements as
identified by the use of words like "expects", "believes", and "anticipates" and
other similar phrases. Such statements reflect management's current view of
future financial performance based on certain assumptions, risks and
uncertainties. If any assumptions, risk or uncertainty factors change, such
changes may have a material impact on actual financial results. We are under no
obligation to revise any forward-looking statements contained herein, which are
as of the date hereof. Readers are cautioned to not place undue reliance on any
forward-looking statements contained in this discussion.

Overview

      MediQuik Services, Inc., DBA SureCare, is a distributed healthcare
company. Distributed healthcare is a new term that describes an emerging niche
in the healthcare market. Distributed healthcare is disease focused linkage of
goods distribution with consumer education and experience while collecting and
distributing important clinical outcomes data. As with most of healthcare in
general, distributed healthcare provides products and benefits both for the
healthcare consumer as well as the healthcare payer. Distributed goods include
such items as nonprescription and prescription pharmaceuticals, equipment,
testing supplies, educational materials, and member monitoring and call center
support. The health care payers include government programs, self-insured,
self-administered employers of all sizes, small to moderate sized health
insurance companies, small to moderate sized health maintenance organizations,
preferred provider organizations, pharmacy benefits managers, and third-party
administrators. Our first and only presently offered product is a diabetes
management program that includes diabetes medical supplies and clinical outcomes
surveys. As our business matures, we intend to offer other disease focused
products, such as respiratory management and congestive heart failure management
services. .

      Our business was organized on April 7, 1998, and began full-time
operations in July 1998 as Old MediQuik. Effective December 31, 1998, Old
MediQuik merged with and into Cash Flow Marketing, Inc., with Cash Flow as the
surviving corporation. Cash Flow changed its name to MediQuik Services, Inc.
immediately following the merger. This transaction has been treated as a capital
transaction in substance rather than a business combination; thus, the
accounting is similar to a reverse acquisition but no goodwill and/or
intangibles have been recorded. As a result Old MediQuik is considered the
accounting acquirer for financial statement purposes. Therefore, our financial
statements for periods prior to January 1, 1999 are the financial statements of
Old MediQuik, not Cash Flow Marketing, Inc.

      Although our initial revenues were derived primarily through product
sales, we have expanded beyond product delivery and have become a full focused
disease management services provider working to improve member care and reduce
costs to health care payers. We currently offer managed care agreements based on
fee-for-service and capitated fee arrangements.


                                       15
<PAGE>

      We are currently serving members with diabetes and intend to provide
disease self-management programs for other high cost, chronic diseases, such as
asthma, congestive heart failure, and other diseases with large afflicted
patient populations where clinical research has indicated the benefit of active
management in improving the health condition of the member and reducing the
financial burden for health care payers. We are in the process of conducting
research regarding the new focused disease management programs.

      We offer comprehensive disease monitoring and maintenance solutions by
providing diagnostic products, disease education, adherence review and
reporting, and personal health resources via the U.S. Mail, telephone and the
Internet. We provide a complete line of blood glucose monitoring systems,
testing strips, lancets, syringes, swabs, insulin pumps, compliance and wound
care products for diabetes members. We are adding new products and services,
both to complement existing disease management programs and also to offer a
range of other supplemental or convenience items through our delivery systems.
MediQuik is focused on delivering high quality products and services to chronic
disease members, whether individually, through government programs, direct to
the employer, or for insurance organizations that bear the primary financial
risk for healthcare treatment. MediQuik also works directly with health
maintenance organizations (HMOs), preferred provider organizations (PPOs),
self-insured companies, Pharmacy Benefit Managers (PBMs), and other third-party
payers (TPAs) in an effort to enhance the quality of life for chronically ill
members and improve the financial outcomes for managed care payers. We also
provide billing and collection activities on behalf of the patient to the
healthcare plan.

Liquidity and Capital Resources

      Our principal cash requirements to date have been to fund working capital
in order to support growth of net sales. Because revenue from operations has
been inadequate to completely fund these requirements, we have supplemented our
revenue from operations with proceeds from private offerings of securities,
loans and extensions of credit from vendors in order to meet working capital
requirements. We anticipate that as revenue from sales to managed care and
government plans increases, we will be able to satisfy all of our funding
requirements for operations from such revenue, however, we cannot assure you
that this will be the case. We had an aggregate of $44,812 in cash as of
December 31, 2001.

      On June 30, 2000, we entered into a stock purchase agreement with
MiraQuest Capital Holdings, Inc./MiraQuest Venture, LLC ("MiraQuest"). The
transaction provided us with $2,000,000 and an equity interest in MiraQuest and
we became a 70%-owned subsidiary of MiraQuest.

      Effective July 27, 2001, MediQuik, MiraQuest Ventures, LLC ("MiraQuest"),
Ball Investors, LLC ("Ball Investors"), and the Allen and Connie Ball Living
Trust ("Ball Trust") entered a Partial Transaction Reversal Agreement to
restructure certain stock exchange and loan transactions between MediQuik and
MiraQuest, Ball Investors, and Ball Trust (the "Restructure Transaction"). The
net effect of the Restructure Transaction immediately following the closing was
to reduce the carrying value of liabilities by $1,000,000, the carrying value of
long-term


                                       16
<PAGE>

assets by $1,303,782, and paid in capital by the net difference of $303,782.
Total shares of common stock outstanding was reduced from 23,769,416 shares (on
a fully diluted basis) to 11,026,528 (on a fully diluted basis) and MiraQuest's
ownership of MediQuik was reduced from 17,314,316 shares on a fully diluted
basis (73%) to 4,571,428 common shares on a fully diluted basis (41%). In
addition, in connection with the Restructure Transaction in the third quarter,
MediQuik issued 4,500 shares of Series B Preferred shares with a liquidating
preference of $90,000 for the settlement of $90,000 of trade payables, and
redeemed the entire 513,266 shares of Series A Preferred Shares previously
issued. In addition, MiraQuest received warrants to purchase 8,928,570 shares of
MediQuik common stock at $0.28 per share, and agreed to surrender first warrants
and then shares as necessary to reduce its ownership to 30% upon the
satisfaction of certain additional equity investments in MediQuik by third
parties.

      Cash flow from operations has not been sufficient to fund all our initial
operating expenses to date. We expect to pursue additional equity and debt
financing to meet future working capital requirements, but cannot guarantee we
will be successful in these efforts.

      Accounts receivable are primarily derived from payments due to us by
managed care plans, insurance companies, and government programs. As revenues
increase, we expect working capital requirements to increase. Standard medical
billing cycles for managed care plans average between 45-60 days. We expect to
experience similar billing cycles as direct managed care plan business
increases.

Results of Operations

      We are expanding through internal sales growth and we plan to conduct
strategic acquisitions to further fuel growth and accelerate the time to market
for planned services. During 1999, we established: (i) corporate marketing and
fulfillment operations; (ii) contractual relationships with product
manufacturers; (iii) contractual relationships with specialty service providers;
(iv) contractual relationships with insurance payers and provider networks; (v)
contractual relationship with a pharmacy products distribution company; and (vi)
initial patient enrollment and fulfillment operations. During 1999, we expanded
our sales efforts, signing six new diabetes self-management contracts. In 2000,
we continued our development of these programs, and began to offer pharmacy
fulfillment as an adjunct service to medical supply fulfillment and implemented
our information technology platform to track all aspects of our customer service
function, from ordering to fulfillment to tracking of surveys, results, and
scheduling of other services. In October 2000, we conducted a test marketing
campaign using mass media and evaluated the results in 2001, determining that
the mass media marketing did not meet our goals, and choosing to focus on an
internal growth strategy. Further, we implemented our advanced work flow
technology to track all aspects of our customer service function, from ordering
to fulfillment to tracking of surveys, results, and scheduling of other
services. In 2001, we brought all significant business functions in-house at a
greatly reduced cost from using outside contractors. Major business functions
include marketing, product procurement, customer service, systems support and
information technology, fulfillment and billing. We also automated many business
functions with the implementation of our internally designed advanced workflow


                                       17
<PAGE>

technology. Our technology allowed us to reduce some of our manual workforce,
and increase the efficiency of our current workforce while we experienced
increasing sales and volume.

Revenue from Operations

      Total net revenue of $1,744,022 for the 12 months ended December 31, 2000
grew by 44% to $2,507,740 for the year ended December 31, 2000. Revenue growth
was primarily derived from diagnostic product and pharmaceutical sales to
managed care plans, providers and members. We are currently deriving the
majority of our revenues through direct sales to managed care plans. We also
increased our revenues with improved sales to government plan participants.

      MediQuik has received members primarily through agreements with managed
care plans and provider networks. Although management believes that patient
referrals generated through the managed care plans should increase, we intend to
pursue direct marketing and government programs to increase our sales in the
future. We cannot assure you that such efforts will result in increased member
sales.

Gross Profit

      Gross profit was $396,279 or 23% of revenue, for the 12 months ended
December 31, 2000. For the year 2001, gross profit increased by 147% to
$977,308, or 39% of sales. Gross profit was primarily derived from diagnostic
product sales to health care payers and members, as well as pharmaceutical sales
and disease management tools. While the medical supply gross profit percentage
is the result of volume purchase discounts, and the disease management tools'
gross profit margin is high as a function of volume versus development costs,
the pharmaceutical gross profit percentage is much smaller due to outsourcing
fulfillment to a licensed provider. The increase in overall gross profit margin
in 2001 was due to increased revenue from the disease management program revenue
as well as better cost control on the lower-margin pharmaceutical sales. In 2001
we began developing a strategy to utilize a pharmacy license (received on
January 13,2002) to enable us to market our diabetic supply capability through
the pharmacy benefit managers (PBMs), while exiting the low margin prescription
drug component. We expect increases in overall gross profit percentage in the
future with increased disease management tools sales to managed care plans,
medical supply volume purchasing increases, and increased sales of non-medical,
higher margin products to our customer base.

Operating Expenses/Loss From Operations

      Operating expenses of $2,883,370 for the 12 months ended December 31,
2001, decreased by 1% from $2,919,858 in the year 2000. The decrease in
operating expenses was primarily associated with a decrease in officers'
salaries and reduction in workforce. This decrease was offset by the one-time
expenses associated with the Bayer Judgment and the Lease Abatement penalty
(totaling $969,486). Operating expense, excluding the one-time expenses, would
have been $1,913,884 or a 34% reduction in operating expense from the prior
year. The loss from operations for the year decreased by 25% from $2,522,879 to
$1,905,562, and was attributable to the revenue increase, gross profit
percentage improvement, and the reduced


                                       18
<PAGE>

operating expense. Excluding one-time expenses, the loss from operations would
have been $981,076 or a decrease of 61% from prior year. We expect the net loss
from operations to decrease with increased revenues and gross profits from
business operations.

Net Loss

      Our net loss declined by 80% from $10,429,462 for the year ended December
31, 2000, to $2,006,620 for the 12 months ended December 31, 2001. This was
primarily due to the non-recurrence during the year ended December 31, 2001, of
$7,896,218 in charges relating to our investment in MiraQuest, which was
partially offset by the one-time charges of $969,486 relating to the Bayer
judgment and lease abatement. We expect the net loss to decrease with increased
revenues and gross profits from business operations.

Item 7. Financial Statements

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
    MediQuik Services, Inc.
Houston, Texas

We have audited the accompanying balance sheets of MediQuik Services, Inc.
("MediQuik)") as of December 31, 2001 and 2000, and the related statements of
operations, changes in stockholders' equity (deficit), and cash flows for each
of the two years then ended. These financial statements are the responsibility
of the MediQuik's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the 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 audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of MediQuik Services, Inc. as of December 31,
2001 and 2000, and the results of its operations, changes in stockholders'
equity (deficit), and cash flows for each of the two years then ended in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that MediQuik
will continue as a going concern. MediQuik's difficulties in meeting its
financing needs, its recurring losses from operations, and its negative working
capital as discussed in Note 2 raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these


                                       19
<PAGE>

matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

Malone Bailey PLLC
www.malone-bailey.com

Houston, Texas
March 25, 2002


                                       20
<PAGE>

MEDIQUIK SERVICES, INC.

BALANCE SHEETS,
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                        2001               2000
<S>                                                                                                <C>                <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                                       $     44,812       $     18,649
   Accounts receivable, net of allowance of $369,503 and $351,794, respectively                         297,013            290,332
   Inventory                                                                                             21,042             55,963
                                                                                                   ------------       ------------

                Total current assets                                                                    362,867            364,944

PROPERTY AND EQUIPMENT:
   Office equipment                                                                                     109,773            131,497
   Less accumulated depreciation                                                                        (34,913)           (20,141)
                                                                                                   ------------       ------------

                Total property and equipment                                                             74,860            111,356

EQUITY INVESTMENT                                                                                            --          1,303,782

OTHER ASSETS, Net                                                                                       307,786            349,382
                                                                                                   ------------       ------------

TOTAL                                                                                              $    745,513       $  2,129,464
                                                                                                   ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Accounts payable                                                                                $    770,488       $    914,074
   Accrued expenses                                                                                   1,055,197            204,521
                                                                                                   ------------       ------------

                Total current liabilities                                                             1,825,685          1,118,595

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
   Series A preferred stock - $.001 par value 1,000,000 shares authorized, as of December 31,
      2000 513,266 issued and outstanding ($20,530,640 involuntary liquidation preference)                   --                513
   Series B preferred stock - $.001 par value 1,000,000 shares authorized, as of December 31,
      2001 4,500 issued and outstanding ($90,000 involuntary liquidation preference)                          5                 --
   Common stock - $.001 par value 50,000,000 shares authorized;
      11,061,528 shares issued and outstanding at December 31, 2001 and
      13,504,096 shares issued and outstanding at December 31, 2000                                      11,061             13,504
   Additional paid-in capital                                                                        15,954,977         16,036,447
   Accumulated deficit                                                                              (17,046,215)       (15,039,595)
                                                                                                   ------------       ------------

                Total stockholders' equity (deficit)                                                 (1,080,172)         1,010,869
                                                                                                   ------------       ------------

TOTAL                                                                                              $    745,513       $  2,129,464
                                                                                                   ============       ============
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.


                                       22
<PAGE>

MEDIQUIK SERVICES, INC.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                            2001               2000
<S>                                                                                     <C>                <C>
SALES                                                                                   $  2,507,740       $  1,744,022

COST OF SALES                                                                              1,529,932          1,347,743
                                                                                        ------------       ------------

GROSS PROFIT                                                                                 977,808            396,279

OPERATING EXPENSES:
   Salaries - officers                                                                       262,542            882,030
   Consulting fees                                                                            75,188            467,362
   Selling, general and administrative                                                     1,576,154          1,569,766
   Charge for summary judgement                                                              739,794                 --
   Charge for lease abatement                                                                229,692                 --
                                                                                        ------------       ------------

                Total operating expenses                                                   2,883,370          2,919,158
                                                                                        ------------       ------------

LOSS FROM OPERATIONS                                                                      (1,905,562)        (2,522,879)

IMPAIRMENT ON EQUITY INVESTMENT:                                                                  --         (7,800,000)

LOSS FROM EQUITY INVESTMENT:                                                                      --            (96,218)

OTHER INCOME (EXPENSE):
   Interest income                                                                             1,291                 --
   Other income (expense)                                                                   (100,226)            (3,894)
   Interest expense                                                                           (2,123)            (6,471)
                                                                                        ------------       ------------

                Total other (expense) income                                                (101,058)           (10,365)
                                                                                        ------------       ------------

NET LOSS                                                                                $ (2,006,620)      $(10,429,462)
                                                                                        ============       ============

BASIC AND DILUTED LOSS PER SHARE                                                        $      (0.16)      $      (1.29)
                                                                                        ============       ============

BASIC WEIGHTED-AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                                                               12,882,682          8,110,747
                                                                                        ============       ============

DILUTED WEIGHTED-AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                                                               12,882,682          8,110,747
                                                                                        ============       ============
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements


                                       23
<PAGE>

MEDIQUIK SERVICES, INC.

STATEMENTS OF CHANGES IN STOCKHOLDER'S
EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                              Preferred                                  Additional
                                           -----------------      Common      Common       Paid-In       Accumulated
                                           Shares      Stock      Shares      Stock        Capital         Deficit         Total
<S>                                       <C>          <C>     <C>          <C>         <C>             <C>            <C>
BALANCE, DECEMBER 31, 1999                      --       --     6,032,007   $  6,033    $  4,143,311    $ (4,610,133)  $   (460,789)

   Issuance of common stock for
      services                                  --       --       158,746        159         317,341              --        317,500

   Issuance of common stock under
      employment agreement                      --       --       135,879        135         228,113              --        228,248

   Issuance of stock for consulting
      services                                  --       --        62,567         62          39,980              --         40,042

   Issuance of stock for interest in
      subsidiary                                --       --        65,901         66         115,264              --        115,330

   Transfer of stock with MiraQuest        513,266    $ 513     7,048,996      7,049      11,192,438              --     11,200,000

   Net loss                                     --       --            --         --              --     (10,429,462)   (10,429,462)
                                          --------    -----   -----------   --------    ------------    ------------   ------------

BALANCE, DECEMBER 31, 2000                 513,266      513    13,504,096     13,504      16,036,447     (15,039,595)     1,010,869

   Issuance of common stock for
      services                                  --       --        35,000         35           2,765              --          2,800

   Issuance of options in settlement of
      deferred salaries                         --       --            --         --         126,560              --        126,560

   Issuance of Preferred B stock for
      amounts due MiraQuest                  4,500        5            --         --          89,995              --         90,000

   Cancellation of Preferred A and
      common stock in Unwind              (513,266)    (513)   (2,477,568)    (2,478)       (300,791)             --       (303,782)

   Net loss                                     --       --            --         --              --      (2,006,620)    (2,006,620)
                                          --------    -----   -----------   --------    ------------    ------------   ------------

BALANCE, DECEMBER 31, 2001                   4,500    $   5    11,061,528   $ 11,061    $ 15,954,976    $(17,046,215)  $ (1,080,173)
                                          ========    =====   ===========   ========    ============    ============   ============
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.


                                       24
<PAGE>

MEDIQUIK SERVICES, INC.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                           2001               2000
<S>                                                                   <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                           $(2,006,620)      $(10,429,462)
   Adjustment for noncash transactions:
      Common stock, options, and warrants issued for services             129,358            268,290
      Stock issued for ChronicRX.com shares                                    --            115,330
      Depreciation and amortization                                        96,797             44,205
      Provision for losses on accounts receivable                          17,710            351,794
      Loss on equity investments                                               --             96,218
      Impairment of investment                                                 --          7,800,000
   Net changes in assets and liabilities:
      Accounts receivable                                                 (24,390)          (500,431)
      Inventory                                                            34,921            (34,226)
      Accounts payable                                                    (53,586)           714,595
      Accrued expenses                                                    850,676           (393,687)
      Other assets                                                       (115,853)            (6,871)
      Other                                                                97,426                 --
                                                                      -----------       ------------

                Net cash used in operating activities                    (973,561)        (1,974,245)
                                                                      -----------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES -
   Capital expenditures                                                      (276)          (287,030)
                                                                      -----------       ------------

                Net cash used in investing activities                        (276)          (287,030)
                                                                      -----------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayment of indebtedness                                                   --            (85,000)
   Proceeds from sale of common stock                                          --            317,500
   Proceeds from MiraQuest transaction                                  1,000,000          2,000,000
                                                                      -----------       ------------

                Net cash provided by financing activities               1,000,000          2,232,500
                                                                      -----------       ------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                       26,163            (28,775)

CASH AND CASH EQUIVALENTS, Beginning of period                             18,649             47,424
                                                                      -----------       ------------

CASH AND CASH EQUIVALENTS, End of period                              $    44,812       $     18,649
                                                                      ===========       ============

SUPPLEMENTAL CASH FLOW DISCLOSURES -
   Interest paid                                                      $     1,993       $     12,523

NONCASH TRANSACTIONS:
   Value of stock received in MiraQuest transaction                            --       $  9,200,000
   Issuance of preferred stock in settlement for account payable      $    90,000                 --
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.


                                       25
<PAGE>

MEDIQUIK SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING-CONCERN MATTERS

      Organization and Business Activity - MediQuik Services, Inc. ("MediQuik")
is an early stage healthcare services company specializing in the delivery of
medical supplies and chronic disease management programs to chronically ill
members. MediQuik was organized in Delaware on April 7, 1998. MediQuik entered
into a Stock Purchase Agreement dated as of June 30, 2000 (the "Stock Purchase
Agreement") with MiraQuest Ventures LLC ("MiraQuest") pursuant to which the
parties agreed to exchange equity interests of each other. Effective September
1, 2000, MiraQuest acquired: (i) 7,048,996 shares of common stock of MediQuik;
(ii) 513,266 shares of Series A convertible preferred stock of MediQuik
convertible into 10,265,320 shares of MediQuik's common stock; and a warrant for
the purchase of an additional 650,000 shares of common stock of MediQuik
exercisable at a price of $.60 per share. In exchange, MediQuik received
7,251,600 membership units of MiraQuest and $2,000,000 cash represented in part
by the cancellation of loans previously made by MiraQuest to MediQuik. As a
result of the transaction, MediQuik became a majority-owned subsidiary of
MiraQuest (see Note 4). The combining of MiraQuest and MediQuik was intended to
strengthen the medical businesses of each company and to create the opportunity
for more rapid revenue growth.

      Effective July 27, 2001, MediQuik, MiraQuest Ventures, LLC ("MiraQuest"),
Ball Investors, LLC ("Ball Investors"), and the Allen and Connie Ball Living
Trust ("Ball Trust") entered a Partial Transaction Reversal Agreement to
restructure certain stock exchange and loan transactions between MediQuik and
MiraQuest, Ball Investors, and Ball Trust (the "Restructure Transaction"). The
net effect of the Restructure Transaction immediately following the closing was
to reduce the carrying value of liabilities by $1,000,000, the carrying value of
long-term assets by $1,303,782, and paid in capital by the net difference of
$303,782. Total shares of common stock outstanding was reduced from 23,769,416
shares (on a fully diluted basis) to 11,026,528 (on a fully diluted basis) and
MiraQuest's ownership of MediQuik was reduced from 17,314,316 shares on a fully
diluted basis (73%) to 4,571,428 common shares on a fully diluted basis (41%).
In addition, in connection with the Restructure Transaction in the third
quarter, MediQuik issued 4,500 shares of Series B Preferred shares with a
liquidating preference of $90,000 for the settlement of $90,000 for amounts due
MiraQuest, and redeemed the entire 513,266 shares of Series A Preferred Shares
previously issued. In addition, MiraQuest received warrants to purchase
8,928,570 shares of MediQuik common stock at an exercise price of $0.28 per
share, and agreed to surrender first warrants and then shares as necessary to
reduce its ownership to 30% upon the satisfaction of certain additional equity
investments in MediQuik by third parties.


                                       26
<PAGE>

      Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of MediQuik and its 100%-owned subsidiary
ChronicRX.com. All significant intercompany accounts and transactions have been
eliminated. MediQuik has determined that its business no longer requires a
separate entity, has merged the operations and assets of ChronicRX.com into
Mediquik Services Inc., and has discontinued that separate corporate entity.

      Use of Estimates - The preparation of the accompanying consolidated
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make certain estimates
and assumptions that directly affect the results of reported amounts of assets,
liabilities, revenues, and expenses. Actual results may differ from these
estimates.

      Revenue and Cost Recognition - MediQuik generates revenue from provider
agreements by delivering medical supplies directly to members covered by these
provider agreements. MediQuik recognizes revenues from sales contracts when
products are shipped.

      Inventory - Inventory consists of chronic disease management products and
is reflected in the consolidated financial statements at the lower of cost
(first in first out) or market.

      Cash and Cash Equivalents - Cash and cash equivalents for purposes of
these consolidated financial statements are considered to be all highly liquid
debt instruments with an original maturity of three months or less.

      Bad Debts - An allowance for bad debts is provided for based on
management's best estimates of amounts that are deemed uncollectible. Such
allowance is $369,503 and $351,794 at December 31, 2001 and 2000, respectively.

      Property and Equipment - Property and equipment is stated at cost.
Maintenance and repair costs are charged to expenses as incurred, while major
renewals and betterments are capitalized. Upon disposal of an asset, the
difference between the sales proceeds and the net book value is charged or
credited to income. MediQuik expenses software costs incurred in the preliminary
project stage and thereafter capitalizes costs incurred in developing or
obtaining internal use software. Certain costs, such as licensing, maintenance,
and training are expensed as incurred. Depreciation of property is provided
using primarily the straight-line method over the following estimated useful
lives:

            Classification                                    Years

            Internet site                                       3
            Office equipment                                    5
            Furniture and fixtures                              7


                                       27
<PAGE>

      Depreciation expense was $14,772 and $12,926 for the years ended December
31, 2001 and 2000, respectively.

      Other Assets - Other assets consist primarily of software costs. An
intangible asset related to an exclusive marketing representative agreement was
determined to have no value at the end of 2001. Accumulated amortization on
other assets was $72,303 and $16,181 for the years ended December 31, 2001 and
2000, respectively.

      Long-lived Assets - MediQuik records impairment losses on long-lived
assets when events and circumstances indicate that the assets might be impaired
and the undiscounted cash flows estimated to be generated by those assets is
less than the carrying value of those assets.

      Significant Customers - MediQuik had sales to five significant customers
of approximately 82% for the year ended December 31, 2001, and 87% for the year
ended December 31, 2000. Such customers represented approximately 85% and 82% of
the accounts receivable balances at December 31, 2001 and 2000.

      Recent Pronouncements - Mediquik does not expect the adoption of recently
issued accounting pronouncements to have a significant impact on MediQuik's
results of operations, financial position or cash flow.

2.    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. As shown in the financial
statements, during the years ended December 31, 2001 and 2000, MediQuik incurred
net losses of $2,006,620 and $10,429,462, respectively, and, as of those dates,
MediQuik's current liabilities exceeded its current assets by $1,462,818 and
$753,651. These factors among others raise substantial doubt about MediQuik's
ability to continue as a going concern.

      MediQuik raised an additional $1,000,000 of debt financing in January and
May 2001, which under the plan to partially reverse the MiraQuest transaction
converted to equity (see Note 4). The proceeds of the debt financing were used
to fund current working capital requirements. Management implemented a plan in
2001 to conserve its working capital by reducing its operating expenses and
focussing on more profitable lines of business. Management is also in the
process of negotiating extended payment terms with its vendors as well as
seeking additional sources of debt and or equity financing; however, no
assurances can be given that MediQuik will be able to successfully conclude the
arrangements being considered.

      The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should MediQuik be unable
to continue as a going concern. MediQuik's continuation as a going concern is
dependent upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis,


                                       28
<PAGE>

to obtain additional financing, to satisfy the Bayer Judgment, and ultimately to
attain successful operations.

3.    EARNINGS PER SHARE

      Basic earnings (loss) per share amounts are calculated using the average
number of common shares outstanding during each period. Diluted earnings per
share assumes the exercise of all stock options and warrants having exercise
prices less than the average market price of the common stock using the treasury
stock method. Since MediQuik incurred a loss for each period presented, all
potentially dilutive securities have been excluded, as they were anti-dilutive.
The following table lists all potentially dilutive securities as of December 31,
2001 and 2000:

<TABLE>
<CAPTION>
                                                                                                  Number of Shares
                                       Type of                               Per Unit              of Common Stock
          Date of Issue                Security             Quantity      Exercise Price            if Converted
<S>                                   <C>                  <C>                 <C>                       <C>
December 1999                         Warrants               215,000           2.00                      --
January - June 2000                   Warrants               317,500           2.00                      --
September 2000                        Warrants               650,000           0.60                      --
January, 2001                         Warrants             3,571,428           0.28                      --
May, 2001                             Warrants             5,357,142           0.28                      --
1999                                  Options                100,000           1.75                      --
2000                                  Options              1,040,863           1.45                      --
2001                                  Options              2,847,793           0.25
</TABLE>

4.    INVESTMENTS

      As discussed in Note 1, MediQuik exchanged its common stock, preferred
stock, and warrants for 7,251,600 membership units of MiraQuest and $2,000,000
in cash, which represented an approximate 17% ownership in the membership units
of MiraQuest. The membership units in MiraQuest were valued by an independent
appraisal at $9,200,000, at September 29, 2000, the effective date of the
foregoing transaction.

      In connection with the Stock Purchase Agreement with MiraQuest, MediQuik
and MiraQuest entered into a voting agreement (the "Voting Agreement") whereby
MiraQuest agreed to vote its 2 of the 7 total MediQuik board members in a manner
consistent with the other five MediQuik board members regarding the selection of
new board members. This agreement expired in August 2001.

      Shortly after the transaction was closed, MediQuik expanded its positions
on its board of directors from 7 to 9, of which MiraQuest had the ability to
appoint 4 members. Thus, although it owned a 73% majority interest, MiraQuest
was not deemed to have control of MediQuik.

      Therefore, MediQuik initially recorded its MiraQuest membership units as
an investment. However, in conjunction with the loan MediQuik received from an
affiliate of MiraQuest, MediQuik increased the positions on its board of
directors from 9 to 11, of which MiraQuest and its affiliates subsequently
gained the ability to appoint 6 members


                                       29
<PAGE>

in January 2001. MediQuik believed the ability of MiraQuest to appoint the
majority of its board members and therefore control MediQuik was temporary, as
both MediQuik's and MiraQuest's boards of directors subsequently approved a
partial reversal of the initial Stock Purchase Agreement. The plan to partially
reverse the original transaction (the "Plan") was approved by both boards on
April 20, 2001. The Plan resulted in i) MediQuik's redemption of all of its
currently outstanding preferred shares; ii) MediQuik's return of all of its
membership units of MiraQuest; iii) an additional cash equity contribution of
$500,000 from MiraQuest to MediQuik; iv) the restructuring of MediQuik's
$500,000 note and warrants to Ball Investors, LLC, an affiliate of MiraQuest, as
well as restructuring MediQuik's indebtedness to a third-party vendor; v)
MiraQuest's agreement to sell back to MediQuik a number of MediQuik's common
shares and/or warrants for nominal consideration once another capital partner is
found for MediQuik; vi) MiraQuest's agreement to relinquish control of
MediQuik's board of directors at the next annual shareholder's meeting. The
result of the Plan would be for MiraQuest to retain approximately 30% equity
ownership of MediQuik after the additional investment by another capital
partner.

      Additionally, MediQuik reduced its investment in MiraQuest membership
units in the amount of $96,218 for MediQuik's share of the net loss recognized
by MiraQuest for the three months ended December 31, 2000, the period in which
MediQuik owned the membership units.

      In the fourth quarter of 2000, MediQuik recognized an impairment loss of
$7,800,000 related to its investment in MiraQuest membership units due to a
permanent decline in value of a major MiraQuest subsidiary. The MiraQuest
subsidiary failed to obtain necessary financing and ceased its operations.
MiraQuest has determined the fair market value of its investment in the
subsidiary was zero. MediQuik's impairment was determined based on its pro rata
share of the impairment.

5.    JUDGMENT; LEASE ABATEMENT

      On December 20, 2001, The United States District Court, Southern District
of Texas, ("the Court") rendered a final judgment (the "Judgment) granting Bayer
Corporation's ("Bayer") motion for a summary judgment against MediQuik, granting
approximately $494,000 in compensatory damages, approximately $126,000 in
pre-judgment interest, and post-judgment interest at the rate of 2.21% per
annum. In addition, on March 9, 2002, the Court awarded legal fees to Bayer in
the amount of approximately $119,000. MediQuik does not have the resources to
pay the Judgment, and has entered into negotiations with Bayer to set up a
payment plan that would allow MediQuik to execute its operational plan. The
outcome of the negotiations cannot be determined at this time. MediQuik has
accrued a total liability of approximately $739,000 in connection with the
Judgment.

      In the fourth quarter of 2001, after determining that its office lease
included more space than required, MediQuik entered into an amendment of its
office lease, by which approximately 1/2 the space was relinquished to the
landlord in return for abatement of the monthly lease fee. The abatement was
predicated on the ability of the landlord to re-lease the space vacated by
MediQuik, and included a penalty payable over the remainder


                                       30
<PAGE>

of the lease based on the period of time to re-lease, initially believed to be
achievable by the end of the first quarter of 2002. Due to circumstances beyond
MediQuik's and the Landlord's control, the re-lease has not been achieved, and
as of December 31, 2001, MediQuik has accrued an estimated penalty of $229,692
in connection therewith.

6.    SUBSIDIARY

      In May 1999 MediQuik formed an 80%-owned subsidiary known as ChronicRX.com
to provide Internet-based pharmacy services. In June 2000 MediQuik purchased the
remaining 20% interest from the investors for 65,903 shares of MediQuik's common
stock at $1.75 per share, making ChronicRX.com a wholly-owned subsidiary of
MediQuik. ChronicRX.com was formed to focus on the chronic care sector and
specialize in prescription and non-prescription medicines and management
products used to treat chronic diseases of all kinds. ChronicRX.com had a net
loss of approximately $78,499 for the year ended December 31, 2000, and had a
deficiency in net assets. Chronic RX.com had no operations in 2001, and MediQuik
determined that a separate subsidiary was no longer necessary. The subsidiary
has been terminated and the assets and liabilities assumed by MediQuik. The
company is currently using the trade name "Chronic Rx.com" in conjunction with
its Internet offerings.

7.    INCOME TAXES

      MediQuik has a net operating loss carryforward of approximately $5,900,000
and $4,900,000 as of December 31, 2001 and 2000, respectively, that may be
applied against future federal taxable income. This loss gives rise to a
deferred tax asset at December 31, 2001 and 2000 of approximately $2,000,000 and
$1,666,000, respectively. Management has established a valuation allowance equal
to the amount of the deferred tax asset, as it is more likely than not that
MediQuik will not be able to realize this asset. The loss carryforwards begin to
expire on December 31, 2018.

8.    EQUITY TRANSACTIONS

      Preferred Stock - In September 2000 MediQuik issued 513,266 shares of
Series A preferred stock in connection with the MiraQuest transaction described
in Note 1. The Series A preferred stock had voting and dividend rights
equivalent to MediQuik's common stock on an "as converted" basis. Each share of
the Series A preferred stock could be converted at any time and at the option of
the holder, into 20 shares of MediQuik's common stock. In the event of a
voluntary or involuntary liquidation, dissolution, or winding up at MediQuik,
the holders of the Series A preferred stock was entitled to receive an amount
equal to $40.00 per share, less any cash dividends previously declared and paid
by MediQuik. All the Series A Preferred shares were cancelled in connection with
the Restructure Transaction discussed in Note 1. In addition, 4,500 shares of
Series B Preferred were issued in that transaction, with a liquidation
preference of $90,000 and no voting rights or conversion rights.

      Warrants - In connection with the sale of common stock, MediQuik issued
warrants to purchase 317,500 shares of common stock at an exercise price of
$2.00 per


                                       31
<PAGE>

share. The warrants became exercisable in September 2000 and expire in December
2004.

      In December 1999, in connection with the sale of common stock MediQuik
issued warrants to purchase 215,000 shares of common stock at an exercise price
of $2.00. The warrants expire in December 2003.

      In September 2000, in connection with the MiraQuest Transaction described
in Note 1, MediQuik issued warrants to purchase 650,000 shares of common stock
at $0.60 per share. These warrants remain outstanding notwithstanding the
Restructure Transaction described in Note 1. The warrants expire in 2010.

      In connection with the Restructure Transaction discussed in Note 1, in
July of 2001 MediQuik issued warrants to purchase 8,928,570 shares of common
stock at $0.28 per share. These warrants are subject to the agreement to reduce
MiraQuest's ownership to 30% upon the achievement of certain capital investment
by third parties.

      Private Stock Offerings - MediQuik issued 158,746 shares of common stock
for $317,500 during the first six months of 2000.

Other Equity Transactions - In October 2001, MediQuik issued 35,000 shares of
common stock to its landlord for services at a fair value of $2,800.

      In September of 2001, MediQuik issued 4,500 shares of Preferred B stock to
settle an account payable for $90,000.

      In June 2001, MediQuik issued options to purchase 512,240 shares of common
stock at $0.25 per share to employees for wages of $126,560. The options expire
in June of 2010.

      During 2000, MediQuik issued 135,879 shares of common stock with a fair
value of $228,248 to various consultants and employees of MediQuik.

      In November 2000 MediQuik issued 62,567 shares of common stock with a fair
value of $40,042 for consulting services to a third party.

      In September 2000 MediQuik issued 7,048,996 shares of common stock,
513,266 shares of Series A preferred stock, and 650,000 warrants in exchange for
$2,000,000 in cash and 7,251,6000 shares of MiraQuest membership units.

      In June 2000 MediQuik issued 65,901 shares of common stock with a value of
$115,330 to the minority shareholders of ChronicRX.com in order to acquire the
remaining 20% interest of that entity.


                                       32
<PAGE>

9.    RELATED-PARTY TRANSACTIONS

      During the years ended December 31, 2001 and 2000, MediQuik paid for
business plan development and investment banking services furnished by an
affiliate, and certain consulting and legal services performed by other related
parties. During the years ended December 31, 2001 and 2000, MediQuik incurred
expenses of $44,000 and $55,527 for these services, respectively, which are
included in the consolidated statements of operations. In addition, as of
December 31, 2001 MediQuik has accrued wages of $24,120 to a Company officer who
is a shareholder of MediQuik.

10.   STOCK INCENTIVE PLAN

      MediQuik completed a Stock Incentive Plan (the "Plan") to provide stock
incentives to certain key employees and directors of MediQuik. An aggregate of
3,000,000 shares of common stock may be issued pursuant to the existing Stock
Incentive Plan. MediQuik has granted options and restricted stock under the Plan
to officers, directors and key employees that aggregate more than the number
authorized under the Plan and will seek shareholder approval to increase the
aggregate number of shares available to 7,500,000 and ratification of the excess
grants.

      A summary of the status of MediQuik's stock option activity, and related
information for the years ended December 31, 2001 and 2000 is presented below

<TABLE>
<CAPTION>
                                                                        Weighted-Average
                                                          Shares         Exercise Price
<S>                                                      <C>               <C>
Outstanding December 31, 1999                              100,000         $    1.75
   Granted                                               1,340,863              1.13
   Exercised                                                    --                --
   Forfeited                                                    --                --
                                                         ---------         ---------

Outstanding December 31, 2000                            1,440,863              1.36
   Granted                                               2,867,207              0.25
   Exercised                                                    --                --
   Forfeited                                               319,414              0.72
                                                         ---------         ---------

Outstanding December 31, 2001                            3,988,656         $    0.60

Options exercisable December 31, 2000                      598,863         $    1.65
Options exercisable December 31, 2001                    2,289,744         $    0.53
</TABLE>

      The following table summarizes information about stock options outstanding
as of December 31, 2001:


                                       33
<PAGE>

<TABLE>
<CAPTION>
                                          Weighted-                                                        Weighted-
                                           Average                Weighted-                              Average Price
    Exercise                              Remaining               Average              Exercisable     of Exercisable
      Price                Shares      Contractual Life        Exercise Price             Shares            Shares
<S>                       <C>                <C>                    <C>                  <C>                 <C>
Less than $1.00           3,214,793          8.47                   0.32                 2,363,416           0.28
          $1.75             723,863          1.82                   1.75                   432,863           1.75
          $2.00              50,000          0.33                   2.00                    50,000           2.00
                        ------------------------------------------------------------------------------

                          3,988,656          7.16                   0.60                 2,846,279           0.53
</TABLE>

      Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" ("SFAS 123") encourages, but does not require,
companies to record compensation cost for employee stock-based compensation
plans at fair value as determined by generally recognized option pricing models
such as the Black-Scholes model or the binomial model. Because of the inexact
and subjective nature of deriving stock option values using these methods,
MediQuik has adopted the disclosure-only provisions of SFAS 123 and continues to
account for stock-based compensation using the intrinsic value method prescribed
in Accounting Principles Board Opinion No. 25. Accordingly, no compensation
expense has been recognized for the Plan. Had compensation costs for MediQuik's
stock option plans been determined based on the fair value at the grant date
consistent with provisions of SFAS 123, MediQuik's net loss would have been
increased by $202,379 in 2001 and $77,031 in 2000.

11.   COMMITMENTS AND CONTINGENCIES

      MediQuik has entered into several provider agreements with various
corporations for terms ranging from one to five years. MediQuik supplies
diagnostic products to the members under these provider agreements.

      Lease - See Note 5 for a discussion of the Lease Abatement. In October
2000, MediQuik entered into a new five-year lease agreement for office space. As
discussed in Note 5, in October of 2001, MediQuik entered into a new agreement
under which it surrendered approximately 1/2 the space for a fixed rent
abatement and a deferred payment contingent upon the re-lease of the surrendered
property by the landlord. In connection therewith, MediQuik has accrued the
maximum deferred rental payment of $229,692, of which the terms of payment are
being negotiated. The minimum lease payments under such agreement are as
follows:

            2002                             $ 89,466
            2003                               91,720
            2004                               94,024
            2005                               71,836
                                             --------

            Total                            $347,046
                                             ========

      Rent expense amounted to $152,249 and $100,721 for the years ended
December 31, 2001 and 2000, respectively.


                                       34
<PAGE>

      Settlement -See Note 5 for a discussion of the outcome of the Bayer suit.
MediQuik has continuing discussions with Bayer regarding payment of the
Judgment entered in connection therewith, but there is no assurance that
payment terms, if any, will be conducive to the execution of MediQuik's plan of
operation.

      Additional Capital - MediQuik continues its dialogue with potential
investors regarding additional capital investment into MediQuik. The terms and
conditions under which additional capital (if any) may be raised can not be
determined at this time. There is no assurance that MediQuik's efforts will be
successful, and if so, what the potential dilution of existing shareholders may
be.

Item 8, Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

      The Board of Directors has appointed Malone & Bailey, PLLC ("Malone") as
our independent accountants for 2001. Deloitte & Touche LLP ("Deloitte") served
as our independent accountants for 2000. Deloitte was dismissed on May 24, 2001,
as our independent accountants. In its audited report for fiscal year 2000,
Deloitte expressed doubt about our ability to continue as a going concern. There
were no disagreements with Deloitte on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure. The
decision to change accountants was recommended and approved by our board of
directors on May 23, 2001.


                                       35
<PAGE>

                                    PART III.

In accordance with General Instruction E.3 to Form 10-KSB, Items 9, 10, 11 and
12 have been omitted since MediQuik will file with the Securities and Exchange
Commission a definitive proxy statement complying with Regulation 14A involving
the election of directors not later than 120 days after the close of its fiscal
year. Such information is incorporated herein by reference to the definitive
proxy materials.

                                 CROSS REFERENCE

<TABLE>
<CAPTION>
  Form 10-KSB Item Number and Caption                     Caption in Proxy Statement
  -----------------------------------                     --------------------------
<S>                                                     <C>
Item 9. Directors, Executive Officers,                  Directors and Executive Officers
Promoters and Control Persons;
Compliance with Section 16(a) of the
Exchange Act

Item 10. Executive Compensation                         Executive Compensation; Certain Transactions

Item 11. Security Ownership of Certain Beneficial       Security Ownership of Certain Beneficial Owners and
Owners and Management                                   Management

Item 12. Certain Relationships and Related              Certain Transactions
Transactions
</TABLE>


                                       36
<PAGE>

Item 13. Exhibits and Reports on Form 8-K.

      The following documents are filed as exhibits to this Annual Report on
Form 10-KSB:

            *2(a)   Stock Purchase Agreement by and between MediQuik Services,
                    Inc. and MiraQuest Ventures, LLC

            *2(b)   Partial Transaction Reversal Agreement Among MediQuik
                    Services, Inc., MiraQuest Ventures, LLC, Ball Investors LLC,
                    and the Allen and Connie Ball Living Trust

            *3(a)   Certificate of Incorporation of MediQuik

            *3(b)   Bylaws of MediQuik

            *9(a)   Voting Trust Agreement dated August 29, 2000

            *10(b)  Letter Agreement, dated June 18, 1999, between MediQuik and
                    SMG regarding acquisition of a diabetic pharmaceutical
                    supply company

            *10(c)  Provider Agreement, effective July 1, 1999, between MediQuik
                    and Advantage Care Network, Inc.

            *10(d)  Employment Agreement by and between Grant Gables and
                    MediQuik Services, Inc. dated August 1, 2000

            *10(e)  Employment Agreement by and between Robert Teague and
                    MediQuik Services, Inc. dated August 22, 2000

            *10(f)  Office Building Lease - Full Service for 4299 San Felipe,
                    Suite 300, Houston, Texas

            10(g)   Office Building Lease Amendment- Full Service for 4299 San
                    Felipe, Suite 300, Houston, Texas

            *10(h)  Stock Option Plan of MediQuik Services, Inc.

            *21(a)  Subsidiaries of the Registrant

*Previously filed with the Commission

      No reports on Form 8-K were filed during the last quarter of the period
covered by this report.


                                       37
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 and 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date: April 8, 2001                            MediQuik Services, Inc.


                                               By: /s/ Robert Teague
                                                   ----------------------------
                                                   Robert Teague,
                                                   Chief Executive Officer
                                                   and Chairman of the Board

      Pursuant to the requirements of Section 13 or 15(d) 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 on April 08, 2001.

         Signature                                          Title
         ---------                                          -----

/s/ Robert Teague, M.D.                            Director and
-----------------------------                      Principal Executive Officer

/s/ Wayne A. Bertsch                               Principal Financial Officer
-----------------------------                      Principal Account Officer

/s/ Grant M. Gables                                Director
-----------------------------

/s/ Howard B. Butler, Jr.                          Director
-----------------------------

/s/ Lawrence J. Wedekind                           Director
-----------------------------

/s/ Derek Ence                                     Director
-----------------------------

/s/ Gene Kusmierz                                  Director
-----------------------------

/s/ John Galazin                                   Director
-----------------------------


                                       38