SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

          [ X ]         ANNUAL REPORT UNDER SECTION 13 OR
                  15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED MARCH 31, 1998
                                       or
          [   ]        TRANSITION REPORT UNDER SECTION 13
                OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number:  1-12992

                          NuMED HOME HEALTH CARE, INC.
                 (Name of small business issuer in its charter)


            STATE OF NEVADA                                   34-1711764
   (State or other jurisdiction of                         (I.R.S. Employer
    incorporation or organization)                        Identification No.)


   5770 Roosevelt Boulevard, Suite 700, Clearwater, Florida             33760
   (Address of principal executive offices)                        (Zip Code)

   Issuer's telephone number:  (727) 524-3227


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

                                      None

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

                     Common Stock, Par Value $.001 Per Share
                    Redeemable Common Stock Purchase Warrants
                                (Title of Class)

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

        Check if there is no disclosure of delinquent filers in response to
   Item 405 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 ]


        Issuer's net revenue for its most recent fiscal year was $22,649,516


        The number of shares outstanding of the Issuer's Common Stock, $.001
   par value, as of June 29, 1998, was 4,966,620 (exclusive of Treasury
   Shares).  The aggregate market value of the voting stock held by non-
   affiliates computed by reference to the average of the bid and ask prices
   of such Common Stock, as of June 29, 1998, was $5,897,861.

     Transitional Small Business disclosure Format:  Yes [  ]     No  [ X ]

   <PAGE>

                                     PART I

   ITEM 1. BUSINESS

   Introduction

        NuMED Home Health Care, Inc., (the "Company") is a holding company
   that conducts operations through eight subsidiaries, seven of which offer
   home health care services and temporary nursing staffing in selected
   markets in Florida, Ohio and Pennsylvania.  In addition, the Company
   provides contract staffing of physical and occupational therapists and
   speech/language pathologists in certain markets of Ohio, Pennsylvania,
   Illinois, Indiana, Kentucky, Maryland and New Jersey through its
   subsidiary NuMED Rehabilitation, Inc. ("NuMED Rehabilitation") organized
   in connection with the April 4, 1995 acquisition of two wholly-owned
   subsidiaries of Rehab America, Inc.  See "Business-Acquisitions and
   Dispositions."  

        The Company delivered approximately 202,000 intermittent home health
   care visits in fiscal 1998 to clients of all ages.  The Company provides
   home health care for approximately 800 private duty clients and temporary
   staffing of certified nurses aides, licensed practice nurses and
   registered nurses for approximately 50 health care facilities.  In
   addition, the Company, through NuMED Rehabilitation, provides physical,
   occupational, and speech/language therapy for approximately 71 health care
   facilities.  

        The Company was formed in 1987 under the laws of the State of Nevada.
   Its principal office is located at 5770 Roosevelt Boulevard, Suite 700,
   Clearwater, Florida 33760, and its telephone number is (727) 524-3227.

   Industry Overview

        The Company's home health care and rehabilitation business is part of
   a needed and growing U.S. market for health care services primarily driven
   by the general aging of the United States population and the continuing
   focus on cost-effective use of health care dollars.  The Company's home
   health care business has benefited from the increased use of treatment at
   home as an alternative to hospitalization and the desire of patients to be
   cared for at home rather than in a hospital.  The fixed amount of Medicare
   reimbursement to hospitals based upon a patient's diagnosis, regardless of
   the cost of service or length of stay, has also provided hospitals an
   incentive to minimize the length of a patient's stay, thereby increasing
   the utilization of home health care services. In addition, advances in
   medical technology have enabled a growing number of treatments to be
   provided on an outpatient basis, or in the patient's home, nursing homes
   or clinics rather than in a hospital.

        The current demand for temporary and contract staffing services is a
   result of a shortage of nursing personnel trained in certain specialty
   areas in addition to the cyclical staffing needs of hospitals, nursing
   homes and clinics. Increases in the intensity of required patient care and
   increases in labor intensive medical technology has similarly increased
   the demand for nurses and other medical personnel such as physical,
   occupational and respiratory therapists, speech/language pathologists and
   radiological and surgical technicians.  Temporary and contract staffing
   accommodates the desire of hospitals and other health care facilities to
   contain costs by having staff available only when needed. Hospital
   budgetary cycles, the need for nurses and therapists trained in particular
   specialties, and fluctuations in patient admissions due to seasonal and
   other factors continue to require hospitals and other health care
   facilities to obtain the services of temporary and long-term contract
   staffing businesses.

        The programs currently proposed to reform the United States health
   care system and ongoing significant changes in the industry itself may
   result in increased government involvement in health care, lower
   reimbursement rates and may otherwise change the operating environment for
   the Company's customers. Hospitals and other health care facilities are
   now consolidating through mergers and acquisitions as a result of
   increasing cost pressures and changes in reimbursement policies adopted by
   federal, state and insurance company third party payors. The Company is
   unable to predict with any degree of certainty how changes in the health
   care industry will effect the Company's operations.

   Business Strategy

        The Company's strategy is to grow (i) by adding services to existing
   locations (ii) by implementing targeted marketing to local health care
   providers that cross sells the Company's home health care, staffing and
   rehabilitation services, and (iii) adding locations through acquisitions
   of home health care and rehabilitation businesses in geographic areas
   which complement the Company's existing business. 

        A key component to the Company's strategy for growth is management's
   belief that home health care providers must be capable of providing a
   broad range of services to permit customers to obtain their home health
   care and staffing needs from one source.  By expanding the services which
   the Company offers in each of its markets, the Company believes it can
   more effectively offer the broad range of services required by its
   customers.  Because the Company's success is also dependent upon
   developing and educating referral sources about the range and benefits of
   the Company's services, the Company aggressively markets to local third
   party payors and medical organizations in a manner that cross sells the
   Company's home health care, staffing and rehabilitation services.  
   Management has focused its strategy for the Company's rehabilitation
   operations on intermediate sized facility operators owning three to ten
   long term care facilities.  Management believes that this strategy allows
   the Company to more effectively offer its specialized programs and
   expertise and better respond to a specific community's needs.  Also, with
   the current trend towards managed care, the Company is increasing its
   direct contracts with managed care providers as well as providing services
   on a local basis to other companies that require additional service
   capacity in meeting their contract requirements.

        The Company has sought and continues to seek to expand its business
   through strategic acquisitions of businesses which expand the Company's
   clients, services and referral sources in existing and new markets. The
   Company believes that the nature of the home health care and
   rehabilitation industries continue to provide a favorable environment for
   such acquisitions.   

   Acquisitions and Dispositions

        The Company commenced home health care and temporary nursing staffing
   operations in 1991, when it acquired Whole Person Home Health Care, Inc.
   ("Whole Person PA") and Pennsylvania Medical Concepts, Inc. ("PA Medical
   Concepts").  In August 1992, the Company acquired the capital stock of
   Silver Moves, Inc., d/b/a Florida Nursing Services ("Florida Nursing"). 
   This was followed by the September 1992 acquisition of substantially all
   of the assets of Whole Person Home Health Care of Florida, Inc., d/b/a
   Total Professional Health Care ("Total Professional").  In May 1993, the
   Company acquired all of the capital stock of Advanced Systems and
   Management, Inc. and approximately 99% of the capital stock of Countryside
   Health Services, Inc. ("Countryside").  The acquisitions of Florida
   Nursing, Total Professional and Countryside significantly increased the
   Company's revenues and expanded the Company's market into the Tampa/St.
   Petersburg, Florida area.

        On April 4, 1995, the Company, through its wholly-owned subsidiary
   NuMED Rehabilitation, acquired substantially all of the assets of North
   American Rehabilitation, Inc. and Care Management Services, Inc., two
   wholly-owned subsidiaries of Rehab America, Inc.  The total purchase price
   for the acquisition of the assets was approximately $5.1 million in cash
   plus 297,715 shares of Common Stock.  The average bid and ask price per
   share of the Common Stock on April 4, 1995 was $1.3125.  North American
   Rehabilitation, Inc. and Care Management Services, Inc. had aggregate
   revenues of $11.3 million for the fiscal year ended September 30, 1994 and
   $14.1 million in revenues for the fiscal year ended September 30, 1993. 
   Approximately 38% of the Company's current business is comprised of
   contract staffing of physical and occupational therapists and
   speech/language pathologists to hospitals and long-term care facilities in
   Ohio, Pennsylvania, Illinois, Indiana, Kentucky, Maryland and New Jersey. 


        Effective January 1, 1996, the Company acquired all of the
   outstanding stock of Parke Home Health Care, Inc. ("Parke") for a total
   purchase price of approximately $780,000, one-half of which was paid in
   cash at closing with the remaining one-half payable over a period of 30
   months with interest accruing on the unpaid principal balance at the rate
   of eight percent (8%) per annum.  Parke had revenues of approximately $2.0
   million for the year ended December 31, 1995 and $1.7 million in revenues
   for the year ended December 31, 1994.  Parke offers home health care
   services in the Cincinnati, Ohio market. 


   Services

        The Company offers a broad range of health care related services from
   delivering comprehensive health care in the client's home to providing
   temporary staffing of nursing personnel and contractual long-term staffing
   of physical and occupational therapists and speech/language pathologists
   to hospitals, clinics, long-term care facilities, physician offices and
   other health care facilities.  Home health care is generally conducted on
   a per visit basis while related staffing is generally performed on a per
   shift basis.  The Company's rehabilitation business generally provides its
   occupational and physical therapists and speech/language pathologists on
   an annual basis.  The following provides a brief description of the types
   of services provided by personnel employed by the Company: 

   -    Registered nurses provide a broad range of nursing care services,
        including skilled observation and assessment, instruction of patients
        regarding medical and technical procedures, direct hands-on
        treatment, and communication and coordination with the attending
        physician or other service agencies.  Some specially trained
        registered nurses provide extensive intravenous therapy
        interventions, wound care, diabetic care, AIDS care, psychiatric care
        and pediatric care.

   -    Licensed practical nurses, under the supervision of a registered
        nurse, perform technical nursing procedures, including injections,
        dressing changes, assistance with ambulation and catheter care.

   -    Physical therapists provide rehabilitation services aimed at
        improving functional mobility via use of strengthening/range of
        motion exercises, training for ambulation, transfers and balance as
        well as the application of physical agents to reduce pain, spasms and
        edema.

   -    Occupational therapists assist patients in restoring their ability to
        perform routine activities of daily living by offering instruction in
        self care, discussing techniques for coping with physical disability
        and suggesting the use of assistant devices or home adaptation to
        make living at home easier. 

   -    Speech/language pathologists evaluate and treat patients who have
        swallowing difficulties and assess and treat patients with speech,
        language and voice disorders to improve their physical capabilities
        or communication abilities.

   -    Licensed physical therapy assistants ("PTAs") and certified
        occupational therapy assistants ("COTAs") work under the supervision
        of a therapist and assist the therapist in implementing treatment
        programs according to a physician's prescription.  The scope of a
        therapy assistant's job varies from state to state.  

   -    Medical social workers help patients and their families deal with the
        emotional, social, financial and personal problems that may occur as
        a result of illness or disability, including the identification and
        coordination of services with other community resources.

   -    Home health aides and certified nurse aides, working under the
        supervision of a nurse, provide health related services and personal
        care, such as assistance with ambulation, limited range-of-motion
        exercises, monitoring of vital signs, non-sterile dressing changes
        and bathing.

   -    Homemaker companions provide personal care and assistance with daily
        living activities, including bathing, dressing, grooming, meal
        preparation, light housekeeping and occasional shopping for essential
        items.

                  The following chart sets forth the services provided by
        each of the Company's eight wholly-owned subsidiaries and identifies
        those subsidiaries that are Medicare certified:

   <TABLE>
   <CAPTION>
                                           Home Health Care                                Temporary and
   Subsidiary                        Intermittent    Private Duty   Medicare Certified     Contract Staffing
   <S>                                     <C>            <C>              <C>                    <C>
   NuMED Rehabilitation                                                                           x
   Parke Home Health Care, Inc             x              x                x
   Whole Person in PA                      x                               x
   PA Medical Concepts                                    x                                       x
   Whole Person in OH                      x              x                x
   Florida Nursing                                        x                                       x
   Total Professional                      x                               x
   Countryside                                            x                                       x

   </TABLE>


   Personnel

        The Company's business is dependent upon its ability to recruit and
   retain registered nurses, licensed practical nurses, nurses aides, home
   health aides, homemaker companions, medical social workers, physical and
   rehabilitation therapists, occupational therapists, speech/language
   pathologists, PTAs and COTAs. There is competition for medical personnel,
   and particularly for certified nurse aides and home health aides. As the
   Company expands, its needs for qualified personnel will continue to
   increase. The Company faces competition for personnel from both other
   agencies as well as other providers of medical services, such as hospitals
   and long term care facilities. Most of the Company's personnel are
   employed on a full-time or regular-part time basis.  A modest portion of
   the Company's personnel are employed on a per diem basis depending upon
   client demand and are paid only for the time they actually work or
   specific visits made. 

   Competition

        The home health and rehabilitation industries are highly competitive
   with limited barriers to entry.  The Company faces competition from
   hospitals that have their own home health care agencies, national and
   local home health care and rehabilitation therapy organizations, and other
   nursing home contract service providers, many of which have capital and
   other resources substantially greater than those of the Company.  The
   Company believes that most home health care business is generated by
   referrals from local third party payors and medical related organizations.
   The Company competes in its home care markets by developing relationships
   with referral sources. Home health care agencies compete based on the
   ability to provide qualified personnel and service on a cost-effective and
   timely basis.  The Company competes in the rehabilitation therapy market
   through direct marketing to long-term, acute care, and outpatient
   facilities as well as school districts, emphasizing the Company's ability
   to provide qualified personnel with specialized programs on a timely basis
   and in a cost-effective manner.  With the increasing trend towards managed
   care, the Company is continuing to obtain accreditation from the Joint
   Commission on Accreditation of Healthcare Organizations ("JCAHO") and
   intends to implement management information systems in order to provide
   quantitative analyses necessary to compete in the managed care arena. One
   subsidiary, Parke Home Health Care, Inc. has received JCAHO accreditation.
   Three NuMED Home Health Care, Inc. subsidiaries, Whole Person Home Health
   Care, Inc., Pennsylvania Medical Concepts, Inc. and Whole Person Home
   Health Care of Ohio, Inc. received JCAHO accreditation with commendation. 


        The Company's temporary staffing business competes with other medical
   recruitment organizations which offer the same or similar services as are
   provided by the Company. Many of these competitors have greater capital
   and other resources than are available to the Company. Competition is
   generally based on the ability to provide qualified personnel on a timely
   basis and in a cost effective manner.

        The Company believes that the key competitive factors in its business
   include service, price and the ability to provide quality care and outcome
   oriented data.  The range of specialized services offered, together with
   the ability to accommodate specific client needs are also competitive
   factors in attracting clients.  The Company has focused its marketing
   efforts in suburban/urban areas with moderate populations of persons over
   65 years of age as well as certain other areas where there is demand for 
   the Company's specialized services.  With the current trend toward managed 
   care, management also believes that the capacity to provide clinical 
   statistical and analytical support to  managed care organizations will be 
   crucial to competing for managed care contracts.

   Sales and Marketing

        The Company provides its home care services generally to patients
   placed through referrals from third parties, such as physicians,
   podiatrists, managed care providers, case managers, and hospital discharge
   planners.  Key elements in the Company's strategy are to provide
   compassionate quality care, delivered in a cost effective manner and
   provide certain specialty skilled programs. The Company seeks to educate
   its referral sources on the range, benefits and features of the Company's
   services. The Company utilizes one-to-one education of referral sources,
   as well as community educational programs presented by the Company's nurse
   liaisons and discharge planners. The Company also actively markets its
   rehabilitation therapy services directly to long-term care, acute care and
   outpatient facilities through solicitation of directors of nursing,
   administrators and owners emphasizing quality care delivered in a cost
   effective manner.

   Reimbursement and Customers

        Payments for the Company's home health care services are derived from
   a variety of sources. Payment for home health care services generally
   comes from Medicare, local government health care programs, commercial
   insurance carriers, health maintenance organizations, Medicaid and
   individual patients. In instances where the patient has more than one
   source of reimbursement, the portion of the Company's charges that is not
   covered by a primary source may be covered by a secondary source of
   reimbursement.  Payment for the Company's temporary staffing and
   rehabilitation services generally are derived directly from the Company's
   customers who are reimbursed from Medicare and other third-party payors.

        Medicare accounted for approximately $7.7 million (34%) and $6.2
   million (25%), respectively, of the Company's net revenue for the fiscal
   years ended March 31, 1998 and 1997. Medicare reimburses 100% of the
   allowable cost of services up to certain limits. To the extent Medicare
   limits exceed the provider's direct cost for a particular service, the
   provider can seek reimbursement for certain indirect costs up to an
   aggregate amount equal to the Medicare defined limits for that service. 
   The Company is designated to receive prospective interim payments ("PIP")
   for its Medicare services rendered in the State of Florida.  PIP allows
   the Company to collect estimated payments every other week for Medicare
   services, with an accounting after the quarter to verify the actual amount
   of Medicare services rendered. There can be no assurance that the Company
   will continue to be eligible to receive prospective interim payments. The
   Company has generally received Medicare reimbursement sufficient to cover
   substantially all of the costs of its services.  If a Medicare audit
   resulted in the Company not being reimbursed for a significant amount of
   services which it had provided, it would have a material adverse effect on
   the Company's financial position or results of operations.

        In fiscal 1998 and 1997, the Company recognized approximately 7% and
   16% respectively of its revenue from a single customer.  This customer
   terminated their relationship in fiscal 1998.  (See Management's
   Discussion and Analysis of Financial Condition and Results of Operations.)

   Advisory Board 

        Certain of the Company's subsidiaries require advisory boards.  The
   Advisory Boards must consist of at least one physician, one registered
   nurse and one representative of each professional discipline for which the
   subsidiary is certified, including physical, occupational and speech
   therapy and medical social work.  The Advisory Boards establish and
   annually review the subsidiary's budget and policies governing the scope
   of services offered, admission and discharge policies, medical
   supervision, plans of treatment, emergency care, clinical records,
   personnel qualifications, program evaluations, and patient care policies
   and procedures. In addition, each Advisory Board assists management in
   identifying consumer needs and educating consumers of the services
   provided by the subsidiary. Each Advisory Board meets four times each year
   and conducts an overall evaluation of the subsidiary's business every
   year. 

   Seasonality 

        Historically, the Company's business has been seasonal, with a higher
   proportion of revenues derived in the fall and winter months.  Since the
   addition of NuMED Rehabilitation, historical seasonality has continued. 
   The Company's third and fourth fiscal quarters will continue to generate
   greater home health revenues due to increased demand for these services in
   all regions during these months.

   Regulations

        The health care industry is highly regulated at the federal, state
   and local levels. Several programs have been proposed to reform the United
   States health care system. These programs include proposals to increase
   governmental involvement in health care, lower reimbursement rates and
   otherwise change the operating environment for the Company and its
   customers. Management believes that the adoption of comprehensive health
   care reform may have a significant impact on the Company's business,
   although different aspects of the Company's business may be affected in
   different ways, either positively or negatively, by the adoption of such
   legislation. There can be no assurance that the Company will be able to
   capitalize on the effect of such legislation or that such legislation will
   not have a negative impact on the Company's operations.

        Federal and state anti-remuneration laws, such as the
   Medicare/Medicaid anti-kickback law, govern certain financial arrangements
   (including employment or service contracts) between health care providers
   and others who may be in a position to refer or recommend patients or
   services to such providers.  These laws prohibit, among other things,
   certain direct and indirect payments that are intended to induce the
   referral of patients 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.  A number of similar state laws exist
   which often have not been interpreted by courts or regulatory agencies. 
   The Department of Health and Human Services periodically issues  special
   fraud alerts' which address specific areas of concern, including a June
   1995 alert that related to fraudulent practices in the provision of home
   health care.  The alert identified fraudulent home health care practices
   such as cost report fraud, billing for excessive services or services not
   rendered, use of unlicensed or untrained staff and kickbacks. 
   Additionally, federal "Stark" legislation prohibits, with limited
   exceptions, the referral of patients for certain services, including home
   health care services, physical therapy and occupational therapy, by a
   physician to entities in which they have an ownership or financial
   interest.  Violation of these laws can result in loss of licensure, civil
   and criminal penalties, and exclusion of health care providers or
   suppliers from participating in the Medicare and Medicaid programs. 
   Additionally, the Balanced Budget Act of 1997 (the "Budget Act"), signed
   into law on August 5, 1997, contains a number of anti-fraud provisions
   designed to further fight abuse and enhance program integrity. 
   Furthermore, some states restrict certain business or fee relationships
   between physicians and other providers of health care services.  NuMED
   believes that its operations are in substantial compliance with the laws
   applicable to Medicare and Medicaid providers, including anti-fraud and
   abuse provisions; however, there can be no assurance that the
   administrative or judicial interpretation of such laws or the regulations
   promulgated thereunder will not in the future have a material adverse
   impact on NuMED's operations or that NuMED will not be subject to an
   investigation which would require a significant investment of time and
   manpower by NuMED.  Although NuMED believes that it complies with federal
   and state anti-remuneration statutes at all times, there can be no
   assurance that such laws will be interpreted in a manner consistent with
   the practices of NuMED.

        NuMED is dependent on third-party payors for a majority of its
   revenues.  Medicare, Medicaid and other payors, such as managed care
   organizations (including health maintenance organizations ("HMOs") and
   preferred provider organizations ("PPOs")), traditional indemnity insurers
   and third-party administrators ("TPAs") are increasing pressures both to
   control health care utilization and to limit reimbursement.  Since
   substantially all of NuMED's revenues are attributable to payments
   received from Medicare and a limited number of other payor categories, the
   level of revenues and profitability of NuMED will be subject to the effect
   of possible changes in the mix of NuMED's patients among Medicare,
   Medicaid and third-party payor categories, increases in case management
   and review of services or reductions in coverage or reimbursement rates by
   such payors.  Such changes could have a material adverse effect on the
   Company's business, results of operations or financial condition.

        The following is a summary of other key regulatory provisions which
   currently affect the Company's operations.

        Medicare Certification and Licensing. Home health care agency
   certification by HCFA is required to enable the Company to receive
   reimbursement for services from Medicare. HCFA requires, as a condition to
   participation as a home health care agency in the Medicare program, the
   satisfaction of certain standards with respect to personnel, services and
   supervision, appropriation of annual budgets, cost reports and capital
   expenditure plans, and the establishment of a professional advisory group.
   Many states also require an entity to obtain a certificate of need ("CON")
   in order for the entity to provide Medicare and Medicaid services. Under
   CON laws, a health care provider generally is required to substantiate the
   need for, and financial feasibility of, certain expenditures relative to
   such services. In states requiring a CON, HCFA will only grant
   certification to those providers who have obtained a CON. Florida is the
   only state in which the Company currently operates a home health care
   business which requires a CON. Total Professional has received a CON from
   the State of Florida to provide Medicare services in Districts V and VI,
   which include Pasco and Pinellas counties and Hardee, Highlands,
   Hillsborough, Manatee, and Polk counties. The Company is presently
   licensed to provide such Medicare services in Hillsborough, Pasco and
   Pinellas counties.

        Medicare Anti-Kickback Provisions. The Medicare Anti-Kickback Statute
   (the "Anti-Kickback Statute") prohibits the offering, payment,
   solicitation or receipt of any form of remuneration in return for the
   referral of Medicare or Medicaid patients or the ordering of services that
   is covered by Medicare or Medicaid. Violation of the Anti-Kickback Statute
   is punishable by substantial fines, imprisonment for up to five years or
   both. In addition, the Medicare and Medicaid Patient and Program
   Protection Act of 1987 (the "Protection Act") provides that persons guilty
   of violating the Anti-Kickback Statute may be excluded from the Medicare
   or Medicaid programs for a minimum of five years. Investigations leading
   to prosecutions and/or program exclusion may be conducted by the Office of
   the Inspector General ("OIG") of the United States Department of Health
   and Human Services ("HHS") or the United States Department of Justice.

        Under the Anti-Kickback Statute, law enforcement authorities, HHS and
   the courts are increasingly scrutinizing arrangements between health care
   providers and referral sources (such as physicians) in order to ensure
   that the arrangements are not designed as a mechanism to exchange
   remuneration for patient referrals. This scrutiny is not limited to
   financial arrangements that involve a direct payment for patient
   referrals, but extends to payment mechanisms that carry the potential for
   inducing Medicare or Medicaid referrals, including situations where
   physicians hold investment interests in, or compensation arrangements
   with, a health care entity to which such physicians refer patients. 
   Although the OIG has published safe harbor regulations relating to
   investment in public companies by referring physicians, the Company does
   not currently possess the net tangible assets necessary in order to
   qualify under the safe harbor regulations.  Therefore, in order to avoid
   any issue regarding fraud and abuse compliance, a physician who owns any
   of the Company's securities is prohibited from making any patient
   referrals to the Company.

        Florida Prohibition of Referrals. The Patient Self-Referral Act of
   1992 (the "1992 Act") regulates and, in some cases, prohibits physicians'
   referrals of patients to facilities in which they own an investment
   interest. In addition, the 1992 Act would prohibit referrals by a health
   care provider to a public company in which the provider is an investor
   unless the company meets safe harbor criteria similar to that promulgated
   under the Anti-Kickback Statute.  The Company does not meet these criteria
   and, therefore, a physician who owns any of the Company's securities is
   prohibited by the 1992 Act from making any patient referrals to the
   Company.  

        Omnibus Budget Reconciliation Act of 1993. As part of the Omnibus
   Budget Reconciliation Act of 1993, Congress passed a self-referral ban,
   commonly known as the "Stark II" law. The Stark II law became effective
   January 1, 1995 and prohibits a physician from referring Medicare and
   other federal program patients for designated health services, including
   home health care, to certain entities with which the physician or a member
   of his or her immediate family has a financial relationship. A "financial
   relationship" includes either an ownership interest in, or compensation
   arrangement with, the entity. Thus, unless a Stark II exemption is met, a
   physician with such a financial relationship with the Company would be
   prohibited by Stark II from making any patient referrals of Medicare and
   Medicaid business to the Company.

        Potential Reductions in Medicare and Other Reimbursement. The Federal
   government is considering significant reductions in planned Medicare
   spending.  The Senate and the House of Representatives have passed budget
   resolutions calling for reductions of up to $270 billion in forecasted
   Medicare expenditures over the next seven years. As part of its fiscal
   1998 budget, the Clinton Administration plans to propose Medicare reforms
   including a prospective payment system for home health care estimated to
   result in $20 billion in savings over six years

        In addition to extensive existing government health care regulation,
   there are many initiates on the federal and state levels for comprehensive
   reforms affecting the payment for and availability of health care
   services.  It is not clear what proposals, if any, will be adopted, or
   what effect such proposals would have on NuMED's business.  Various
   aspects of these health care proposals, such as reductions in funding of
   the Medicare and Medicaid programs, potential changes in reimbursement
   regulations by the HCFA, enhanced pressure to contain health care costs by
   Medicare, Medicaid and other payors and permitting greater state
   flexibility in the administration of Medicaid, could adversely affect
   NuMED's business, results of operations and financial condition.  NuMED's
   businesses that participate in applicable state Medicaid programs are
   subject to the risk of changes in Medicaid reimbursement and payment
   delays resulting from budgetary shortfalls of state Medicaid programs. 
   NuMED's current concentration of business in a limited number of states
   exposes it to the risk of changes in Medicaid reimbursement programs in
   those states.  Medicare and Medicaid certification is a critical factor
   contributing to the revenues and profitability of NuMED.  Changes in
   certification and participation requirements of the Medicare and Medicaid
   programs have restricted, and are likely to further restrict, eligibility
   for reimbursement under those programs.  Failure to obtain and maintain
   Medicare and Medicaid certification could result in a significant loss of
   revenue.

        Private payors, including managed care payors, increasingly are
   demanding that providers accept discounted fees or assume all or a portion
   of the financial risk for delivery of health care services, including
   capitated payments where the provider is responsible, for a fixed fee, for
   providing all services needed by certain patients.  Capitated payments can
   result in significant losses when patients require expensive treatments
   not adequately covered by the capitated rate.  Efforts to impose reduced
   payments, greater discounts and more stringent cost controls by government
   and other payors are expected to continue.  NuMED cannot predict what
   reform proposals or reimbursement limitations will be adopted in the
   future or the effect any such changes will have on its operations.  There
   can be no assurance that currently proposed legislation, future health
   care legislation, reforms or changes in the administration or
   interpretation of governmental health care programs or regulations will
   not have a material adverse effect on NuMED's business, results of
   operations and financial condition.  Concern about the potential effect on
   NuMED's business, results of operations and financial condition.  Concern
   about the potential effect of various proposed health care reforms has
   contributed to volatility of prices of securities of health care companies
   and could similarly affect the price of the New Common Stock in the
   future.

        Reimbursement Payment Delays.  NuMED generally is paid for its
   services by government health administration authorities, insurance
   companies, or other third party payors, not by the patients themselves. 
   The home health care industry is generally characterized by long
   collection cycles for accounts receivable due to the complex and time
   consuming requirements for obtaining reimbursement from private and
   governmental third party payors.  In addition, reimbursement from
   government payors is subject to examination and retroactive adjustment. 
   Such delays or retroactive adjustments could lead to chase shortages,
   which may require NuMED to borrow funds, issue equity securities or take
   other action to meet its ongoing obligations.  NuMED would be adversely
   affected if it were to experience such difficulties and were unable to
   obtain funds on acceptable terms to meet possible cash shortages.

        Dependence on Relationships with Referral Sources.  The growth and
   profitability of NuMED depends on its ability to establish and maintain
   close working relationships with referral sources, including payors,
   hospitals, physicians and other health care professionals.  Hospitals,
   physicians and managed care organizations, which are exerting an
   increasing amount of influence over the health care industry, have been
   consolidating to enhance their ability to impact the delivery of health
   care services.  There can be no assurance that NuMED will be able to
   successfully maintain existing referral sources or develop and maintain
   new referral sources, or that some of its referral sources will not become
   competing providers of home health care services.  The loss of any
   significant number of existing referral sources or the failure to develop
   new referral sources could have a material adverse effect on NuMED's
   business, results of operations or financial condition.  NuMED's
   relationships with existing and potential referral sources also could be
   adversely affected by a loss of JCAHO or by the inability of an
   acquisition to obtain JCAHO accreditation.  Accredited companies are
   subject to periodic resurveys by JCAHO.

        Miscellaneous.  All states in which the Company operates require
   therapists practicing in such states to be licensed and many states
   require continuing education for maintaining licensure.  In addition,
   environmental standards and OSHA regulations concerning the disposal and
   handling of medical wastes are generally monitored at the state and local
   level in accordance with OSHA guidelines. The Company believes that it is
   in material compliance with such licensure requirements and standards in
   each of the states where it operates.  Although the Company believes that
   it is in material compliance with all applicable federal and state laws
   and regulations, there can be no assurance that such laws or regulations
   will not be interpreted or applied in the future in such a way as to have
   a material adverse impact on the Company, or that federal or state
   governments will not impose additional laws or regulations upon all or a
   portion of the Company's activities, which might adversely affect the
   Company's business.

   Employees

        As of March 31, 1998, the Company had approximately 800 employees
   working full-time and part-time depending on certain assignments, 60 of
   whom perform administrative and clerical duties.   Employees do not
   necessarily work full-time shifts and may not work exclusively for the
   Company.  The Company believes its relations with its employees are good.
   The Company's employees are not represented by a union.

   ITEM 2.  PROPERTY

        The Company maintains its principal offices at 5770 Roosevelt
   Boulevard, Suite 700, Clearwater, Florida  33760. The Company's regional
   offices are typically located in suburban office parks and are all leased.
   The offices range in size from 1,000 square feet to 6,000 square feet. The
   Company's office leases require an aggregate annual rental of
   approximately $317,000 and expire on various dates through 2002. All
   offices are well maintained and in good repair. As of March 31, 1998, the
   Company had the offices listed below in the following locations:

   <TABLE>
   <CAPTION>
   Principal Operation               Locations              Function
   <S>                               <C>                    <C>
   NuMED Home Health Care, Inc.      Clearwater, FL         Corporate administrative and finance office

   NuMED Rehabilitation, Inc.        Horsham, PA            Rehabilitation administrative offices
                                     Cincinnati, OH         Human Resources and management of Physical
                                                            Therapy, Occupational Therapy and 
                                                            Speech/Language Pathology

   Total Professional Health Care    Clearwater, FL         Comprehensive home health care
                                     Tampa, FL              services
                                     St. Petersburg, FL
                                     Holiday, FL
                                     Port Richey, FL

   Florida Nursing Services          St. Petersburg, FL     Private duty & temporary staffing

   Countryside Health
    Services, Inc.                   Clearwater, FL         Private duty & temporary staffing
                                     Holiday, FL
                                     Tampa, FL
                                     Lakeland, FL

   Whole Person Home Health
    Care of Ohio, Inc.               Conneaut, OH           Comprehensive home health 
                                     Youngstown, OH         care services including private duty

   Whole Person Home Health
    Care, Inc.                       Erie, PA               Comprehensive home health
                                     Albion, PA             care services

   PA Medical Concepts, Inc.         Erie, PA               Comprehensive home health
                                     Albion, PA             care services including Private Duty

   Parke Home Health Care, Inc.      Cincinnati, Ohio       Comprehensive home health
                                                            care services including Private Duty
   </TABLE>


   ITEM 3.  LEGAL PROCEEDINGS

   Legal Proceedings

             The Company maintains professional liability insurance in
   amounts believed to be adequate by the Company based on its experience. 
   Currently, the Company maintains coverage on its home health care
   operations in the amount of $1,000,000 per occurrence with a $3,000,000
   annual limit.  The Company maintains coverage on its rehabilitation
   therapy operations in the amount of $2,000,000 per occurrence with a
   $4,000,000 annual limit.  The Company may be subject to liability for the
   actions of its employees who provide medical services.  There can be no
   assurance that the Company's professional liability insurance will cover
   all types of claims, that such insurance will continue to be available to
   the Company on terms that are acceptable to it, or that the amount of such
   insurance will be sufficient.

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

             None

                                     PART II

   ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER  
            MATTERS.

              The principal market for the Common Stock and Common Stock
   Purchase Warrants is the NASDAQ Small Cap Market where they are listed
   under the symbols NUMD and NUMDW, respectively.  Prior to February 1995,
   the Common Stock was listed on the American Stock Exchange Emerging
   Company Marketplace.  Prior to May 1994, the Common Stock was traded in
   the over-the-counter market.  The stock prices below are the high and low
   bid prices as reported on the NASDAQ Small Cap Market which have been
   adjusted, as appropriate, to reflect the 1 for 2.5 reverse stock split
   completed on April 29, 1994.

                               Fiscal 1998           Fiscal 1997 
   Quarter                    High         Low       High        Low
   First Quarter              $1.75        $1.22     $4.31       $2.25
   Second Quarter              1.38         1.00      3.25        1.63
   Third Quarter               1.44         0.84      2.63        1.50
   Fourth Quarter              1.88         0.81      2.06        1.13

           The Company has paid no cash dividends on the Common Stock since
   its inception.  The Company intends to retain earnings, if any, to finance
   the expansion of its business and does not anticipate paying any cash
   dividends in the foreseeable future.  As of June 29, 1998, there were
   approximately 562 holders of record of Common Stock.

             On September 1, 1995, the Board of Directors authorized the
   officers of the Company, without further approval of the Board, to
   purchase in the open market up to a maximum of 500,000 of the Company's
   common shares to the extent that the Company is financially able to make
   any such purchases.  During fiscal 1998, the Company purchased no Common
   Shares.

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

             The following discussion and analysis should be read in
   conjunction with the Company's Consolidated Financial Statements and notes
   thereto appearing elsewhere in this report.

   Overview

             The Company's revenues are generated primarily from (i) health
   care services provided to individuals in their home and temporary staffing
   of nurses in health care facilities, such as hospitals, physician offices
   and long-term care facilities, and (ii) staffing of physical and
   occupational therapists and speech/language pathologists to hospitals and
   long-term care facilities.  A significant portion of the Company's home
   health care revenues are paid by insurance companies and other third-party
   payors, including Medicare.  In fiscal 1998 and 1997, 56% and 42%,
   respectively, of the Company's revenues were attributable to third party
   payors, of which 34% and 25%, respectively, was attributable to Medicare
   reimbursements.  The Company's revenues are recorded based on
   predetermined rates for services provided, less applicable allowances to
   reflect third party payor reimbursement requirements. The Company's
   revenues are subject to post-collection audit and adjustment by
   third-party payors.  Direct expenses include direct personnel and other
   costs associated with the Company's home health care services and
   staffing.

             The Company's Gross Profit has been negatively impacted by five
   primary factors.  First, NuMED has incurred excessive legal and other
   costs relating primarily from failed acquisitions.  Second, in 1997, the
   Company retroactively modified its contract with one of its key
   Rehabilitation customers that was undergoing a prior Medicare audit.  The
   modification resulted in a decrease of the Gross Profit of NuMED
   Rehabilitation.  The Company is undertaking cost containment efforts as
   well as implementing new monitoring programs to reduce the level of Direct
   Expenses.  Third, long term care facilities' uncertainty regarding the
   Balanced Budget Act caused a reduction in aggressive marketing by the
   Rehabilitation facilities. Additionally, the mix of revenue in
   rehabilitation therapy has shifted.  Physical therapy revenue, which
   generally yields lower gross margins than either occupational or speech
   therapy, constituted a larger percentage of Net Revenues.  The Company is
   actively pursuing more profitable types of contracts.  Fourth, the mix of
   revenue between home health aides and skilled services has remained
   disproportionate.  Home health aides, which generally yield lower gross
   margin than skilled services, constituted a larger percentage of Net 
   Revenues.  In general, third party payors are requiring that care by
   provided by lower skilled and less expensive caregivers.  To counter this
   trend, the Company is pursuing alternative types of business with higher
   margins. Fifth, a significant portion of employees in both the Home Health
   and Rehabilitation Therapy division are full time.  The labor burden
   relating to these full time employees does not fluctuate with changes in
   revenue.  As revenue decreases, these costs result in an increased Direct
   Expense percentage.  The Company has taken measures to impact on the
   proportion of full and part time employees.

             NuMED Rehabilitation experienced residual aspects from a routine
   Medicare audit of a 1996 cost report of one of its key customers.  The
   customer's fiscal intermediary, in it interpretation of the Medicare
   prudent buyer guidelines, had concluded that the cost of certain
   professional contract therapy services provided by NuMED Rehabilitation
   exceeded these guidelines.  Management believes that the fiscal
   intermediary conducting this audit has applied an overreaching and
   erroneous interpretation of applicable reimbursement guidelines.

             The Intermediary's first calculations indicated total disallowed
   costs of $2.1 million.  The Company's client as well as representatives
   from the Company were successful in reducing the amount of disallowed
   costs from $2.1 million to $899,000. The Company was contractually
   obligated to repay this key client the amount of Medicare disallowed costs
   and has recorded an estimated aggregate reserve.  The settlement for the
   first year (customer's fiscal year ended June 30, 1995) of the contract
   was approximately $197,000.  The settlement for the second year
   (customer's fiscal year ending June 30, 1996) of the contract was
   approximately $702,000.

             During the second and third quarter of fiscal 1997, NuMED paid a
   total of $899,000 to this customer, representing disallowed costs for the
   client's fiscal years ending 6/30/95 ad 6/30/96.  The Company is
   optimistic that some or all of the disallowed costs will be recovered in
   the appeal process.  The entire disallowed cost was expensed.  The Company
   has reached an agreement with its client that the appeal of 1995
   disallowed costs will not be pursued.  However, the Company intends to
   vigorously pursue all avenues of appeal to recover disallowed costs for
   1996.  There is no guarantee that intermediary negotiations or the appeals
   process will result in a favorable determination.  A hearing date has been
   established for October, 1998.

             As a result of the above audit, the Company has retroactively
   renegotiated its contract with this key customer to be consistent with
   negotiated settlements of the prior years.  Even though management
   believes that the previous contract was well within current regulations,
   management also believes that the renegotiated contract could have had
   mitigated future adjustments from prudent buyer interpretations of this
   client.

             In addition, the Company then secured a $500,000 letter of
   credit for future potential disallowances (see Liquidity and Capital
   Resources) and has renegotiated the original terms with the client. 
   Because of the anticipated success of the intermediary negotiations, the
   client released the $500,000 letter of credit in April 1997.  

             Following the fiscal year end 1997, this key customer and the
   Company mutually agreed  to terminate several facility contracts over
   fiscal year 1998.  The Company has increased marketing efforts and expects
   to replace this revenue.

             Several programs have been proposed to reform the United States
   health care system. These programs contain proposals to increase
   government involvement in health care, lower reimbursement rates and
   otherwise change the operating environment for the Company's customers.
   Due to the wide variety of national and state proposals relating to health
   care presently under consideration, the impact of such proposals on the
   Company's business cannot be predicted. The health care industry is a
   highly regulated industry which is subject to changing political, economic
   and regulatory influences that may affect the procurement practices and
   operations of hospitals and other health care facilities. During the past
   several years, the health care industry has been subject to an increase in
   government regulation of, among other things, reimbursement rates and
   certain capital expenditures. In addition, major third party payors of
   health care services, such as insurance companies, Medicare and Medicaid,
   have significantly revised payment procedures in an effort to contain
   health care costs. These and other factors affecting the health care
   industry could have a material adverse impact on the Company's operating
   results, financial condition or prospects. The Company believes that
   certain trends have developed which will have an impact on the home health
   care and temporary staffing industry, including increased use of capitated
   payments and the trend towards managed care. The Company seeks to follow
   trends in its industry to maximize their resulting benefit and minimize
   their resulting negative impact on the Company's operations. The extent
   and effect of identified trends on the Company, as well as the effect of
   trends which may develop in the future cannot be established either
   positively or negatively at this time due to uncertainty in the home
   health care, temporary staffing and rehabilitation industries. 

   Results of Operations

             The following table sets forth for the periods indicated the
   percentage of revenues represented by certain items reflected in the
   Company's statements of operations.                                      

                                                Year Ended March 31,
                                               l998                 1997
        Revenues                               100.0%              100.0%
        Direct expenses                         76.1                78.9
                                               -----               -----
        Gross Profit                            23.9                21.1 
        General and administrative
         expenses (excluding 
         amortization and depreciation)         26.4                29.3 
        Amortization and depreciation
         and impairment of intangibles           2.7                 2.7 
                                               -----               -----
        Operating income (loss)                 (5.2)              (10.9)
        Other revenues (expenses) (loss)        (1.1)                0.1 
                                               -----               -----
        Income (loss) from continuing
         operations before income tax           (6.3)              (10.8)
        Income taxes expense (benefit)           2.4                (3.2)
                                               -----               -----
        Net income (loss)                       (8.7)               (7.6)
                                               =====               =====

             Year Ended March 31, 1998 Compared to Year Ended March 31, 1997.

             Revenues decreased $2.0 million, or 8.1% to $22.6 million in
   fiscal 1998 from $24.6 million in fiscal 1997. Net Medicare revenues
   increased by $1.5 million to $7.7 million in fiscal 1998 from $6.2 million
   in fiscal 1997.  Non-Medicare revenues, including staff relief, private
   duty, private pay and rehabilitation therapy decreased by $3.5 million in
   fiscal 1998 from fiscal 1997. The Company's new contracts as well as
   existing business were negatively affected by the uncertainty as a result
   of pending discussions and consideration of an extraordinary transaction
   involving the potential sale of the Company.

             Direct expenses decreased $2.2 million or 11% to $17.2 million
   in fiscal 1998.  As a percentage of revenues, direct expenses decreased to
   76.1% in fiscal 1998 from 78.9% in fiscal 1997.  The increase in gross
   margin can be attributable to the increased labor productivity in the Home
   Health Division of 3.7%, while the rehabilitation division percentage
   remained the same.  As a result, the gross profit margins increased to
   24.0% in 1998 from 21.1% in 1997.

             General and administrative expenses (excluding amortization and
   depreciation) decreased $1.2 million or 16.4%.  As a percentage of
   revenues, this represented a decrease to 26.4% in 1998 compared to 29.3%
   in 1997.  In 1997 the Company expensed the repayment of the disallowed
   Medicare costs for one of its key customers of $899,000 (discussed under
   Overview).  In addition, $312,000 expense resulted from Parke Home Health
   Care which was acquired at the beginning of fiscal 1997. There were
   extraordinary expenses through increased professional fees incurred in
   connection with failed merger acquisition discussions with Core Holdings,
   Inc. which was terminated on December 31, 1997.  Travel expenses also
   increased as a result of due diligence related activities.  The closing of
   the Cleveland financial office of NuMED resulted in one time expenses
   related to lease terminations and severance packages for Cleveland staff.
   The company also provided for a one-time increase in the reserve for
   potential bad debts.

             There was a marginal decrease of $47,000 in depreciation and
   amortization during fiscal 1998 as additional depreciation  from new
   computer software and hardware begin this year as the company continues to
   automate the financial and office operations. 

             Other net expenses increased to $256,000 in fiscal 1998 from
   $9,000 in fiscal 1997.  Interest expense increased to $216,000 as
   borrowings under the lines of credit were used and outstanding for most of
   the year.  

             For both the 1997 and 1998 fiscal years, the Company incurred 
   net operating losses. As a result of the losses incurred in fiscal 1997,
   a tax benefit was recorded.  However, as a result of the additional 
   losses incurred in fiscal 1998, no tax benefit was recorded.  In addition,
   for fiscal 1998 the Company recorded a valuation allowance associated 
   with the tax benefit recorded in fiscal 1997.  Thus, the net loss for the
   Company in fiscal 1998 was ($1,432,255) before income taxes and ($1,964,478)
   after income taxes compared to a net loss of $2,654,363) before income 
   taxes and ($1,878,052) after income taxes in fiscal 1997.

   Liquidity and Capital Resources

             As of March 31, 1998 and March 31, 1997, accounts receivable
   were $4.3 million (40% of total assets) and $3.5 million (29% of total
   assets), respectively.  The Company's liquidity is primarily affected by
   its management and collection of accounts receivable.  The home health
   care industry is characterized by longer collection cycles, since most
   third-party payors require detailed documentation to support reimbursement
   claims and review reimbursement claims prior to payment. The Company
   generally has experienced collection cycles of its accounts receivable of
   approximately 90-120 days and has not experienced material amounts of
   write-offs.   The Company is designated to receive periodic interim
   payments (PIP) for its Medicare services rendered in the State of Florida. 
   PIP allows the Company to collect estimated payments every other week for
   Medicare services, with an accounting after the quarter to verify the
   actual amount of Medicare services rendered.  PIP Payments to the national
   Medicare certified firms are scheduled to be replaced by PPS by the end of
   the year. Further, the Company's Medicare business is subject to
   increasing scrutiny and Medicare audits which may result in denied claims
   for reimbursement and write-offs of accounts receivable. If a Medicare
   audit revealed substantial overpayments to the Company for Medicare visits
   or resulted in the denial of reimbursement for a material number of
   visits, it would likely have a material adverse impact on the Company's
   results of operations and financial condition.

             The Company has completed five acquisitions since August 1992,
   and intends to continue to achieve growth through acquisitions.  To pursue
   its acquisition strategy, the Company may incur additional short-term and
   long-term borrowings and/or issue additional shares of Common Stock or
   other securities.  The Company does not currently have any commitments,
   understandings or agreements with respect to any acquisitions.

             The Company began the implementation of a new management
   information system during fiscal 1997.  The cost incurred during 1997 was
   approximately $250,000.  

             In August 1997, the Company secured two new revolving lines of
   credit for the purpose of consolidation of debt service and allowance of
   future growth. 

             The Company established a $3,000,000 credit facility, secured by
   NuMED Home Health Care, Inc., NuMED Rehabilitation, Inc., Silver Moves,
   Inc., Countryside Health Services, Inc., Pennsylvania Medical Concepts,
   Inc. and Parke Home Health Care, Inc. The credit advances are limited to
   the aggregate accounts receivable balances of qualified accounts under 120
   days.  The company replaced with the above credit line the PA Medical
   Concepts $150,000 credit line, Parke Home Health Care, Inc. $150,000
   credit line and NuMED Home Health Care, Inc.'s $1,000,000 credit line. The
   outstanding balance as of March 31, 1998 was $1,596,424.

             A $2,000.000 credit facility, secured by NuMED Home Health Care,
   Inc. and Whole Person Home Health Care of Florida, Inc. The credit
   advances are limited to the aggregate accounts receivable balance of
   qualified accounts under 120 days.

             The Company also has renegotiated and renewed an existing line
   of credit for $275,000 which is fully secured by a $275,000 certificate of
   deposit.  Interest accrues at a rate equal to the lender's certificate of
   deposit rate (4.85% as of March 31, 1998) plus 2.0%.  No monies were drawn
   as of March 31, 1998 and $272,000 was drawn as of March 31, 1997.

             Pennsylvania Medical Concepts  had a $150,000 line of credit
   secured by accounts receivable of that agency.  Interest accrues at a rate
   equal the lender's prime rate plus .5%.  There was $50,000 outstanding as
   of March 31, 1997.

             At March 31, 1997, there were two (2) letters of credit for
   $500,000 and $150,000 respectively, both secured by certificates of
   deposits.  The $500,000 letter was returned and released in April 1997 and
   the $150,000 was issued in favor of a third party government payor to
   secure performance under the contract.

             In connection with the Company's acquisition of Parke Home
   Health Care effective January, 1996, the Company financed 50% of the
   acquisition with a 30 month term loan payable to the previous owners of
   Parke. The outstanding principal balance on the note at March 31, 1998 was
   approximately $72,000.  Interest accrues on the Parke loan at the rate of
   eight percent (8%) per annum and is secured by the outstanding stock of
   Parke purchased by the Company. In connection with the Company's
   acquisition of Florida Nursing in fiscal 1993, the Company financed the
   acquisition in part with a three-year term loan payable to the previous
   owners of Florida Nursing.  This loan was repaid in fiscal 1996. 
   Similarly, in connection with the Company's acquisition of Total
   Professional in fiscal 1993, the Company financed the acquisition in part
   with a three-year term loan payable to the previous owner of Total
   Professional.  This loan was also repaid in fiscal 1996.

             The Company's net income or loss has been and will continue to
   be impacted significantly by the non-cash charge of amortization expense
   of intangible assets of the Company.  At March 31, 1998, net intangible
   assets of the Company were $4.3 million. The amortization of intangible
   assets in the future will decrease net income or increase net loss of the
   Company and may adversely affect the market price of the Company's
   securities.

             The Company funded its cash flow requirements through
   borrowings. The Company believes that its current cash reserves, current
   cash flow and the funds available under its credit facilities will allow
   the Company to continue to meet its expected operating expenses and
   working capital needs for at least the next 12 months.

             To achieve the Company's acquisition strategy, the Company may
   be required to seek additional financing and/or issue additional shares of
   Common Stock or other securities.   There can be no guarantee that sales
   of the Company's equity securities will be an available alternative to
   obtain additional financing in the future.  This may adversely impact the
   Company's ability to make additional strategic acquisitions.  No
   additional funding for any of these purposes has been committed to date.  

             Management of the Company has been evaluating its strategy to
   maximize shareholder values either through the sale of the Company or
   merge with an equal size company in a geographical area suited for the
   Company to achieve economies of scale.  The Company had also numerous
   discussions with capital infusion.  The Company signed a definitive
   agreement with Banyan Healthcare Services, Inc. ("Banyan").  Banyan was
   formed to acquire health care related companies to consolidate and provide
   full services.  In June, 1998, the Company terminated its discussions due
   to issues raised by the Company's independent accountant and legal
   advisors.  In connection, the Company incurred more than $130,000 in
   professional fees.

   Impact Of Year 2000

             Some of the Company's older computer programs were written using
   two digits rather than four to define the applicable year.  As a result,
   those computer programs have time-sensitive software that recognize a date
   using "00" as the year 1900 rather than the year 2000.  This could cause a
   system failure or miscalculations causing disruptions of operations,
   including, among other things, a temporary inability to process
   transactions, send invoices, or engage in similar normal business
   activities.

             The Company has completed an assessment, its major accounts
   receivable and information system (HCIS) is the year 2000 compliant.  A
   software upgrade, which is currently available will be required to be
   purchased for its financial reporting and accounts payable system.  The
   total cost of this project will be less than five hundred dollars.

   ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

        The following documents are filed as a part of this report at the
   pages indicated:

                                                                        Page
        1.   Report of Independent Auditors                              F-1

        2.   Consolidated Balance Sheets as of 
             March 31, 1998 and 1997                                     F-2

        3.   Consolidated Statements of Operations for the 
             Years Ended March 31, 1998 and 1997                         F-3

        4.   Consolidated Statements of Stockholders' Equity for 
             Years Ended March 31, 1998 and 1997                         F-4

        5.   Consolidated Statements of Cash Flows for the Years 
             Ended March 31, 1998 and 1997                               F-5

        6.   Notes to Consolidated Financial Statements                  F-6

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

             None

                                    PART III

   ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

             The following table sets forth certain information with respect
   to the directors and executive officers of the Company.

       Name                 Age            Position with Company
   Jugal K. Taneja          54             Chairman of the Board, Chief
                                           Executive Officer and Director
   Susan J. Carmichael      50             President and Director 
   Robert P. Ottman         55             Director
   Thomas V. Chema          50             Director
   Judi M. Kelly*           42             Director

   *resigned 3/31/98


             Each director holds office until the next annual meeting of
   stockholders and until his or her successor has been elected and
   qualified.  During Fiscal 1996, James P. Witherington and Dr. Nayan S.
   Shah resigned their positions as members of the Board of Directors. 
   During fiscal year 1997, Michael J. Diroff and Mark E. Rowland resigned
   their positions as members of the Board of Directors.  Pursuant to the
   Company's Regulations, a majority of the Directors elected Judi M. Kelly
   to fill the vacancy created by Mr. Witherington's resignation.   

             Pursuant to Article X of the Company's By-Laws, on January 20,
   1996, the Board of Directors amended the By-Laws to classify the members
   of the Board of Directors into three groups of not less than two nor more
   than three Directors each, with terms expiring in alternate years.  As a
   result, the term of office of Messrs. Diroff and Rowland expired at the
   1996 Annual Meeting of Shareholders.  The term of office of Mr. Chema and
   Ms. Kelly expires at the second annual meeting after their initial
   election and when their successors are elected and qualified.  As there
   was no annual meeting in 1997, the terms of Ms. Kelly and Mr. Chema will
   expire at the 1998 annual shareholders meeting when their successors are
   qualified.  The terms of Ms. Carmichael and Messrs. Taneja and Ottman
   expire at the third Annual Meeting of Shareholders. Ms. Kelly resigned on
   March 31, 1998.  At present there are three vacancies.  

             Jugal K. Taneja has been Chairman of the Board, Chief Executive
   Officer and a Director of the Company since October 1991. Mr. Taneja also
   serves as a director, and as Chief Executive Officer and Secretary of
   National Diagnostics, Inc.  Mr. Taneja also served as a director and the
   Chief Executive Officer of NuWave Health Care Products, Inc. the parent
   company of DRx, Inc., and the Chief Executive Officer of DRx, Inc.  Prior
   to his association with the Company, Mr. Taneja served as Senior Vice
   President of Union Commerce Bank and Huntington National Bank from 1979 to
   1983.

             Susan J. Carmichael has served as a Director of the Company
   since October 1991 and as President of the Company since September 1993.
   She has held the position of President of Whole Person in PA and PA
   Medical Concepts (companies acquired by the Company in 1991) since 1985
   and is responsible for the Company's overall operation and expansion.  Ms.
   Carmichael also serves on the President's Council; American Lung
   Association.  Ms. Carmichael previously served on the Erie County,
   Pennsylvania Mental Health and Mental Retardation Board by appointment of
   the Erie County Executive.  Ms. Carmichael is a Doctoral Candidate at
   Pennsylvania State University.

             Robert P. Ottman has served as a Director of the Company since
   1991. Mr. Ottman formed R. Ottman & Co. in 1989, a strategic management
   consulting firm. Prior to forming R. Ottman & Co., Mr. Ottman held six
   positions each of increasing responsibility over the five years of his
   employment at AMSCO.  He then served as Executive Vice President of
   Champion Bolt Corporation, Erie, Pennsylvania.

             Thomas V. Chema has been a Director of the Company since April
   1994. Mr. Chema is a partner with the law firm Arter & Hadden, Cleveland,
   Ohio from 1979 to 1983 and since 1989.   He also currently serves as the
   President of Gateway Consultants Group, Inc. assembly facility
   construction and development.  Mr. Chema is also the President of IMN,
   Inc. which is engaged in the fiber optics business.  He previously served
   as Executive Director of the Ohio Lottery Commission and the Public
   Utilities Commission at various times between 1983 and 1989.  He also
   served as Executive Director of the Gateway Economic Development
   Corporation of Greater Cleveland, which managed the financing and
   construction of the Jacobs Field and Gund Arena sporting venues.

             Judi M. Kelly has been a practicing healthcare professional for
   the past 18 years.  Prior to forming her consulting business in July,
   1990, Ms. Kelly was engaged in public accounting as a Certified Public
   Accountant.  Ms. Kelly has worked for Aetna Life & Casualty, where she
   managed audits of hospitals, nursing homes and home health agencies, and
   Hospital Corporation of America.  Ms. Kelly has also held the position of
   Assistant Director of Finance at Orlando Regional Medical Center and in
   1990 was appointed to the editorial board of The Reimbursement Advisor, a
   national healthcare publication.

   Board Committees

             The Board of Directors has established standing Audit,
   Compensation, Capital, Executive and Nominating Committees.  In addition,
   the Company has three committees to administer each of the Company's stock
   plans described below. See "Executive Compensation-Stock Plans."

             The Audit Committee recommends the engagement, continuation and
   discharge of the Company's independent auditors, reviews the scope and
   timing of the audit of the Company's financial statements, approves the
   fee arrangement with the Company's independent auditors, reviews the
   Company's financial statements and the independent auditors' report,
   reviews the activities and recommendations of the Company's independent
   auditors, considers recommendations made by the Company's independent
   auditors regarding the Company's internal control structure, and reviews
   the Company's internal accounting procedures and controls with the
   Company's financial and accounting staff. The members of the Audit
   Committee are Messrs. Chema and Ottman, and Kelly.

             The Compensation Committee establishes the Company's executive
   compensation policy, including the recommendation of compensation
   arrangements for the Company's executive officers and directors. The
   members of the Compensation Committee are Messrs. Chema, Ottman and Ms.
   Kelly.

             The Capital Committee reviews and oversees the Company's
   investment policy.  The members of the Capital Committee are Ms.
   Carmichael and Messrs. Ottman and Taneja. 

             The Executive Committee consists of Ms. Carmichael, Ms. Kelly
   and Mr. Taneja and the Nominating Committee consists of Messrs. Taneja,
   Ottman and Chema.

             The Outside Director and Advisory Board Member Stock Option Plan
   Administration Committee consists of Messrs. Taneja and Ms. Carmichael. 
   The 1994 Employee Stock Option Plan Administration Committee consists of
   Messrs. Ottman and Rowland.  The Employee Stock Purchase Plan
   Administration Committee consists of Messrs. Taneja, Chema and Diroff.
   (Mr. Diroff resigned and created a vacancy.)
 
   Other Key Employees

             Peggy A. Loesch, RN, BSN age 46, is the Vice President-
   Operations and oversees the Company's clinical operations while working
   with the Company Administrators in obtaining accreditation from the Joint
   Commission on Accreditation of Healthcare Organizations in the respective
   firms.


             Allan H. Cheiken, 54, is the Executive Vice-President of and
   oversees the operations of NuMED Rehabilitation.  Prior to the April 1995
   acquisition of the assets of Care Management Services, Inc. and North
   American Rehabilitation, Inc., Mr. Cheiken was the President and Chief
   Executive Officer of Rehab America, Inc. and its wholly-owned
   subsidiaries.

   ITEM 10.  EXECUTIVE COMPENSATION.

   Executive Compensation

             The following table sets forth certain information concerning
   compensation paid to or earned by the Company's Chief Executive Officer
   and the President.  No other executive officer of the Company earned
   salary and bonus in excess of $100,000 for the fiscal year ended March 31,
   1998.

   <TABLE>
   <CAPTION>
                                                     Summary Compensation Table
                                    Fiscal                                  Other Annual        Number of Shares
   Name and Principal Position      Year          Salary        Bonus       Compensation        Underlying Options
   <S>                              <C>           <C>          <C>          <C>                    <C>
   Jugal K. Taneja                  1998          $160,000       ---        $44,000(1)(2)            ---
   Chairman of the Board and        1997          $160,000     $17,877      $30,000(1)             640,000 (5)
   Chief Executive Officer

   Susan J. Carmichael              1998          $130,000       ---        $ 9,000(4)(6)            ---
   President and Director           1997          $130,000     $16,677      $44,042(3)(4)          350,000 (5)

   (1) Represents meal and lodging expenses of $2,000 per month paid to Mr. Taneja while located in Florida.  $18,000 paid during
   fiscal year 1998 and a monthly automobile allowance of $500.
   (2) Represents moving expenses.  $20,000 paid during fiscal year 1998.
   (3) Represents accumulated vacation of $38,042 paid during fiscal year 1997.
   (4) Represents lodging expenses of $500 per month paid to Ms. Carmichael.  $4,500 paid during fiscal year 1998
   (5) Includes 540,000 warrants issued to Mr. Taneja and 270,000 warrants issued to Ms. Carmichael issued for certain terms     
   of employment agreement.  See details under Employment Agreements.
   (6) Represents a monthly automobile allowance of $500 paid to Ms. Carmichael.  $4,500 paid during fiscal year 1998.
   </TABLE>


             No options were granted during the fiscal year ended March 31,
   1998.  The following table sets forth information with respect to options
   granted during the fiscal year ended March 31, 1997 to executive officers
   named in the Summary Compensation Table. 

                     Options Granted During Fiscal Year 1997

                        Number
                    of Securities     Percent
                      Underlying       Total        Exercise
                       Options        Options        Price        Expiration
                       Granted        Granted      Per Share         Date

   Jugal K. Taneja      40,000          3.7%         $2.61         4/1/2001
                        60,000          5.6%         $2.37         4/1/2001
                       540,000         50.5%         $2.75            no
                                                                  expiration

   Susan J.
    Carmichael          40,000          3.7%         $2.61         4/1/2001
                        40,000          3.7%         $2.37         4/1/2001
                       270,000         25.3%         $2.75            no
                                                                  expiration

             The following table sets forth information with respect to the
   year-end value of unexercised options held by the executive officers named
   in the Summary Compensation Table. There were no stock option exercises by
   such executive officers during fiscal 1998 or 1997 and all unexercised
   options held at fiscal year end are currently exercisable.

                             Year-End Option Values

                              Number of Shares            Value of 
                                 Underlying              Unexercised 
                            Unexercised Options      In-the Money Options
                             at March 31, 1998        at March 31, 1998

   Jugal K. Taneja                920,000                  $27,600
   Susan J. Carmichael            450,000                   22,400

   Director Compensation 

             Effective April 18, 1995, each outside director of the Company
   receives $500, plus reimbursement for actual travel expenses, for each
   board meeting and $100 for each committee meeting attended, if held on the
   same day as a board meeting, or $250 for each committee meeting, if held
   on a day other than the date of a board meeting.  Outside directors
   receive a minimum of $3,000 annually if five meetings are attended. 
   Directors who are also employees of the Company receive no fees for
   meetings attended.  Additionally, outside directors receive options to
   purchase Common Stock under the Outside Director and Advisory Board Member
   Stock Option Plan, and directors of the Company who are executive officers
   have previously received, and may receive in the future additional
   options. See "Stock Plans."  Directors who are members of the Acquisition
   Committee will receive $2,500 in addition to their regular directors'
   fees.

   Employment Agreements 

             On September 1, 1995, the Company entered into employment
   agreements with Jugal K. Taneja, Chief Executive Officer and Susan J.
   Carmichael, President, for three-year terms. The employment agreements are
   substantially similar providing Mr. Taneja with an annual base salary of
   $160,000 and Ms. Carmichael with an annual base salary of $130,000.  In
   addition, each is entitled to annual increases by an amount determined by
   the annual increase in the Consumer Price Index for Urban Wage Earners and
   Clerical Workers, U.S. City Average.  As additional compensation, both Mr.
   Taneja and Ms. Carmichael receive quarterly bonuses equal to the aggregate
   of (i) five percent (5%) of the increase in the Company's income before
   federal and state income taxes plus (ii) Two and one-half percent (2.5%)
   of the increase in the current quarterly revenues.  The increase for each
   component of the bonus is calculated as that amount exceeding a "base"
   revenue equal to the annual audited revenues of the Company for the prior
   fiscal year divided by four.  This bonus is payable to Mr. Taneja and Ms.
   Carmichael no later than the due date for filing the quarterly or annual
   reports to the Securities and Exchange Commission for each respective
   quarter or fiscal year end, which is 45 and 90 days, respectively,
   following the end of a quarter or fiscal year.  In addition, both Mr.
   Taneja and Ms. Carmichael are entitled to vacations, health care benefits,
   fringe benefits and reimbursement of reasonable out-of-pocket expenses.  

             Each of Mr. Taneja's and Ms. Carmichael's agreement provides
   that if they are terminated without just cause during the first two years
   of the employment contract, each of them is entitled to receive their base
   salary through the end of the then applicable term of their individual
   agreement, any bonus payable to the executive and a severance benefit
   equal to two (2) times his or her annual base salary, as applicable. If
   the Company terminates either contract at any time during the third year
   or first one-year renewal or option period following the initial 3 year
   term, the executive is entitled to receive severance pay equal to his or
   her annual base salary.  As of 9/30/96, section 7.7 of their employment
   agreements, "if the executive is terminated without just cause, or his or
   her duties are reduced such that his or her position is ineffective in
   directing the business or operations of the Company, each executive has
   the right to put all securities of the Company owned by the executive and
   the executive's affiliates to the Company at a per share price calculated
   at the greater of (i) $6.00 per share, (ii) the average of the current bid
   and ask price, (iii) book value per share, or (iv) the appraised value per
   share, and the Company is required to purchase all such securities for the
   applicable price" was deleted.  In consideration for elimination of that
   section Ms. Carmichael received 270,000 warrants for the company's stock;
   Mr. Taneja received 540,000 warrants for the Company's stock on the
   following terms: Any warrant outstanding and unexercised when the term of
   the Employment Agreement, or any extension thereof, concludes, is
   forfeited and the executive has no rights thereto.  In addition, Mr.
   Taneja's employment agreement provides that if he is terminated, the
   Company is required to immediately repay all debt that he negotiated and
   placed with lending institutions, specifically that debt guaranteed by
   him.  In addition, the Company is required to repay all debt and
   obligations of the Company owed to Bancapital Corporation or any affiliate
   of Bancapital.  If the executive terminates his or her employment
   agreement, the executive is entitled to receive his or her base salary and
   a pro rata amount of the bonus and fringe benefits, including vacation,
   through the date of such termination.

             In the event that 50% of the common stock of the Company is
   acquired by a party and/or affiliates other than Jugal K. Taneja or his
   affiliates ("Triggering Event") and Mr. Taneja or Ms. Carmichael are
   terminated at any time during the term of his or her Agreement, the
   terminated executive is entitled to receive an amount equal to three times
   his or her then current annual base salary.

             Both employment agreements contain nondisclosure, non-
   solicitation and non-competition provisions applicable for a period of 2
   years following the executive's departure from the Company.  In addition,
   upon the occurrence of a Triggering Event and the termination of the
   executive's employment agreement, the Company is required to pay in
   addition to any other amounts payable to the executive pursuant to other
   provisions of the agreement, a fee equal to Mr. Taneja's or Ms.
   Carmichael's then current salary, as applicable, for a ninety day covenant
   not to compete.  The Company and the executive are then required to
   negotiate a contract providing for payment to the executive of his or her
   then current annual base salary for each year that executive agrees not to
   compete with the Company.  If the Company desires not to negotiate a
   formal contract at such time, Mr. Taneja and Ms. Carmichael are entitled
   to receive an amount equal to his or her then current salary.  

   Stock Plans

             The Company maintains three stock plans (the "Plans") to
   attract, motivate and retain key employees and outside directors of the
   Company. The Plans have been adopted by the Company's Board of Directors
   and were approved by the shareholders of the Company at the Company's 1994
   Annual Meeting of Stockholders. Prior to the adoption and approval of the
   Plans, the Company granted options to purchase in the aggregate 220,000
   shares of Common Stock to certain executive officers and directors of the
   Company at exercise prices ranging from $2.188 per share to $5.00 per
   share. 20,000 options have been canceled.  The following is a brief
   discussion of each of the Plans.  In connection with the Offering, the
   Company agreed that it may not grant options in excess of 15% of the
   issued and outstanding shares of Common Stock until February 8, 1996 in
   the absence of shareholder approval.

             1994 Employee Stock Option Plan. The Company's 1994 Employee
   Stock Option Plan (the "1994 Plan") provides for the grant of incentive
   stock options and non-qualified stock options to purchase up to 750,000
   shares of Common Stock. Each option will have an exercise price equal to
   the fair market value of the Common Stock on the date of grant, except for
   grants of incentive stock options to beneficial owners of 10% or more of
   the Common Stock, which will contain an exercise price equal to 110% of
   fair market value on the date of grant. Individuals eligible to
   participate in the 1994 Plan are employees and officers of the Company and
   its subsidiaries.  Options to purchase 180,000 and 392,000 were issued in
   fiscal 1997 and 1996 respectively.  20,000 options were exercised and
   12,000 were canceled during fiscal 1997.

             Outside Director and Advisory Board Member Stock Option Plan.
   The Company's Outside Director and Advisory Board Member Stock Option Plan
   (the "D&A Plan") provides for an annual grant, subject to anti-dilution
   provisions, of 12,060 non-qualified stock options to each "eligible"
   director (directors of the Company who are not employees) and 710
   non-qualified stock options to each "eligible" advisory board member
   (professionals representing each medical area in which the Company
   provides services). Each option shall have an exercise price equal to the
   fair market value of the Common Stock on the date of grant, and options
   vest over a period of 3 years with one-third vesting on each anniversary
   date of the grant.  Options were granted to purchase shares of common
   stock of 78,760 and 68,120 in fiscal 1997 and 1996 respectively.  This is
   subject to the Company's review of each recipient's referral practices.

             Employee Stock Purchase Plan. The Company's Employee Stock
   Purchase Plan (the "ESP Plan") permits employees employed on a regular
   full-time or part-time basis (excluding those who work less than 20 hours
   per week, those who have not completed a ninety day orientation period and
   those employees who own 5% or more of the Common Stock) to purchase Common
   Stock at 85% of the fair market value of the Common Stock up to a maximum
   of 15% of his or her total annual compensation. The number of shares of
   Common Stock that may be sold pursuant to the ESP Plan shall not exceed
   250,000 shares in any one year. Additionally, no employee individually may
   purchase more than $25,000 worth of Common Stock in any one year. 
   Approximately 60,000 shares were issued pursuant to the ESP Plan in fiscal
   1997.

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

             The following table sets forth certain information regarding the
   beneficial ownership of Common Stock as of June 29, 1998 with respect to:
   (i) each of the Company's directors and the executive officers named in
   the Summary Compensation Table; (ii) all directors and executive officers
   of the Company as a group; and (iii) each person known by the Company to
   own beneficially more than 5% of the Common Stock. An asterisk indicates
   beneficial ownership of less than 1% of the outstanding Common Stock.
   Except as otherwise indicated, each of the shareholders listed below has
   sole voting and investment power over the shares beneficially owned.

                                                  Shares Beneficially Owned
      Beneficial Owner                               Number        Percent

   Jugal K. Taneja (1) (8)                         1,615,864         27.0%
   5770 Roosevelt Boulevard, Suite 700
   Clearwater, Florida  33760

   Susan J. Carmichael (2) (7)                       504,677          9.4%
   5770 Roosevelt Boulevard, Suite 700
   Clearwater, Florida  33760

   Robert P. Ottman (3) (4)                           44,306           *
   3939 West Ridge Road
   Erie, Pennsylvania  16506

   Thomas V. Chema (3)                                29,120           *
   1100 Huntington Building
   925 Euclid Avenue
   Cleveland, Ohio 44115

   Judi M. Kelly (3)                                       0           *
   P.O. Box 66413
   St. Petersburg Beach, Florida 33736

   Turkey Vulture Fund XIII Limited                  485,000          9.8%
   7001 Center Street
   Mentor, Ohio  44060

   Executive Officers and Directors as
    a Group (7 Persons) (6)                        2,221,027         38.4%

                                         
        * Less than one percent.

        (1)  Includes beneficial ownership of (i) 169,880 shares of Common
             Stock owned by First Delhi Trust, a trust for Mr. Taneja's sons
             over which he exercises voting rights, and (ii) 280,000 shares
             issuable under currently exercisable stock options. Excludes
             209,820 shares beneficially owned by his wife, Manju Taneja, as
             to which Mr. Taneja exercises no voting or disposition rights. 
             Excludes 100,000 shares issuable under stock options granted on
             April 1, 1996 pursuant to the 1994 Employee Stock Option Plan
             that are not yet exercisable. 

        (2)  Includes 100,000 shares issuable under currently exercisable
             stock options and 7,065 shares held by Patrick Carmichael, Ms.
             Carmichael's spouse.  Excludes 80,000 shares issuable under
             stock options granted on April 1, 1996 pursuant to the 1994
             Employee Stock Option Plan that are not yet exercisable.

        (3)  Includes shares issuable under 12,060 currently exercisable
             stock options granted to each of Messrs. Ottman, Chema and
             Diroff pursuant to the Outside Director and Advisory Board
             Member Stock Option Plan.

        (4)  Includes 10,000 shares issuable under currently exercisable
             common stock purchase warrants.

        (5)  Includes 10,000 shares issuable under currently exercisable
             stock options.

        (6)  Includes 446,180 shares issuable under common stock purchase
             warrants and/or stock options that are currently exercisable or
             will become exercisable on or before July 1, 1996.

        (7)  Includes 270,000 warrants issued for modification of employment
             agreement.

        (8)  Includes 540,000 warrants issued for modification of employment
             agreement.

   ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

             Pursuant to the terms of the Underwriting Agreement entered into
   between the Company and A. T. Brod, Brod received in connection with the
   Offering various fees, commissions and underwriting discounts totaling
   approximately $1.3 million.  The Company granted Brod an option to
   purchase 100,000 units to the underwriters.  The exercise price of the
   units purchased pursuant to the option is $11.96 per unit.  In April of
   1997, the Company exchanged one share of common stock for each unit.

             During fiscal 1998 and 1997, the Company leased certain office
   furniture and equipment from Bancapital for a total cost of $28,000 per
   year.  Bancapital also held the lease for the Company's Cleveland
   financial office.  The lease was terminated 3/31/97 when operations were
   moved to Florida.

             All material affiliated transactions will be made or entered
   into on terms no less favorable to the Company than those that can be
   obtained from unaffiliated third parties, and all material affiliated
   transactions must be approved by a majority of the independent outside
   members of the Board of Directors of the Company who do not have an
   interest in the transactions.

                                     PART VI

   ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

   (a)  Exhibits

        The following exhibits are filed with this report:

 Sequential
Exhibit Number      Description of Document                             Page #

2.1     Asset Purchase Agreement by and between NuMED Home Health
           Care, Inc., Care Management Services, Inc., North American
           Rehabilitation Services, Inc. and Rehab America, Inc., dated
           November 3, 1994.(7)

2.2     First Amendment to Asset Purchase Agreement by and among NuMED Home
           Health Care, Inc., Care Management Services, Inc., North American
           Rehabilitation Services, Inc. and Rehab America, Inc. dated April
           4, 1995.(9)

2.3     Stock Purchase Agreement by and between NuMED Home Health Care,
           Inc., Parke Home Health Care, Inc., Pamela Metz and William
           Shannon, dated April 8, 1996.(7)

3.1     Articles of Incorporation of Stowaway, Inc. (n/k/a NuMED Home Health
           Care, Inc.) dated October 13, 1987.(2)

3.2     Certificate of Amendment to Articles of Incorporation of NuMED Home
           Health Care, Inc. dated February 12, 1993.(3)

3.3     Certificate of Amendment to Articles of Incorporation of NuMED Home
           Health Care, Inc. dated April 29, 1994.(7)

3.4     Bylaws of NuMED Home Health Care, Inc.(2)

4.1     Specimen Certificate for Common Stock.(2)

4.2     [Intentionally omitted]

4.3     Specimen Certificate for Warrant.(7)

4.4     Warrant Agreement.(7)

4.5     Underwriter's Unit Purchase Option.(7)

10.1    Technology Transfer Agreement between NuMED Technologies, Inc. and
           the Cleveland Clinic Foundation, dated August 21, 1991.(4)

10.2    Technology Transfer Agreement between NuMED Technologies, Inc. and Dr.
           Amin El Mallawany dated February 11, 1992.(4)

10.3    Non-Competition, Non-Diversion and Confidentiality Agreement by and
           among NuMED Home Health Care, Inc., Silver Moves, Inc. and Debra
           and James Amrhein dated as of August 17, 1992.(2)

10.4    Consulting Agreement between Debra Amrhein and NuMED Home Health
           Care, Inc. dated August 17, 1992.(2)

10.5    Promissory Note in the principal amount of $700,000 made by NuMED
           Home Health Care, Inc. in favor of Debra and James Amrhein dated
           August 17, 1992.(2)

10.6    Stock Pledge Agreement by and between NuMED Home Health Care, Inc.
           and Debra and James Amrhein dated August 17, 1992.(2)

10.7    Stock Power by NuMED Home Health Care, Inc. to Debra and James
           Amrhein dated August 17, 1992.(2)

10.8    Non-Competition, Non-Diversion and Confidentiality Agreement by
           and between Silver Moves, Inc. and Alice D. Holland dated as of
           September 28, 1992.(2)

10.9    Consulting Agreement by and between Silver Moves, Inc. and Alice
           D. Holland dated September 28, 1992.(2)

10.10   Guarantee by NuMED Home Health Care, Inc. in favor of Alice D.
           Holland dated September 28, 1992.(2)

10.11   Management Services Agreement between Bancapital Corporation and
           NuMED Home Health Care, Inc. and Subsidiaries dated March 30,
           1992.(2)

10.12   Employment Agreement between NuMED Home Health Care, Inc. and
           Michael J. Diroff dated January 1, 1993.(5)

10.13   Employment Agreement between NuMED Home Health Care, Inc. and
           Susan J. Carmichael, dated September 1, 1992.(5)

10.14   Technology Transfer Agreement between NuMED Home Health Care, Inc.
           and the Cleveland Clinic Foundation dated February 1, 1993.(5)

10.15   Professional Services Agreement between Bancapital Corporation and
           NuMED (Home Health Care Division) dated January 1, 1993.(5)

10.16   Professional Services Agreement between Bancapital Corporation and
           NuMED (Surgical/Medical Products Division) dated January 1,
           1993.(5)
      
10.17   Stock Purchase Agreement between NuMED Home Health Care, Inc. and
           Kenneth M. Dobrow dated January 31, 1993.(5)
      
10.18   Addendum to Stock Purchase Agreement between NuMED Home Health
           Care, Inc. and Kenneth M. Dobrow dated May 10, 1993.(5)
      
10.19   Agreement and Plan of Merger with Advanced Systems and Management,
           Inc., Countryside Health Services, Inc. and L. David Detweiler
           dated May 28, 1993.(3)
      
10.20   Stock Purchase and Exchange Agreement between NuMED Home Health
           Care, Inc. and Providence Health Care, Inc. dated September 10,
           1993.(1)
      
10.21   Plan and Agreement of Merger by and among NuMED Technologies,
           Inc., Hi-Tech Exchange, Inc. and NuMED Home Health Care, Inc.
           dated December 31, 1992.(2)
      
10.22   Employment Agreement between NuMED Home Health Care, Inc. and
           Jugal K. Taneja, dated November 11, 1993.(3)

10.23   Employment Agreement between NuMED Home Health Care, Inc. and
           Susan J. Carmichael, dated November 11, 1993.(3)

10.24   Employment Agreement Between NuMED Home Health Care, Inc. and
           James P. Witherington, dated November 11, 1993.(3)

10.25   Rescission Agreement between NuMED Home Health Care, Inc. and
           Providence Health Care, Inc. dated December 31, 1993.(6)

10.26   Mutual Release and Settlement Agreement by and among NuMED Home
           Health Care, Inc., Providence Health Care, Inc., Commonwealth
           Associates, Inc., and others, dated December 31, 1993.(6)
      
10.27   Amended, Consolidated and Restated Bill of Sale and Assignment and
           Assumption Agreement by and among NuMED Home Health Care, Inc.,
           NuMED Technologies, Inc. and NuMED Surgical, Inc. dated April 15,
           1994.(3)

10.28   NuMED Home Health Care, Inc. Outside Director and Advisory Board
           Member Stock Option Plan. (Filed as Exhibit No. 99(a) to
           registration statement on Form S-8, File No. 33-90966).(8)

10.29   NuMED Home Health Care, Inc. 1994 Employee Stock Option Plan.
           (Filed as Exhibit No. 99(b) to registration statement on Form S-8,
           File No. 33-90966).(8)

10.30   NuMED Home Health Care, Inc. Employee Stock Purchase Plan. (Filed
           as Exhibit No. 99(c) to registration statement on Form S-8, File
           No. 33-90966).(8)

10.31   Letter Agreement by and between NuMED Home Health Care, Inc. and
           A.T. Brod & Co., Inc. dated June 7, 1993.(7)

10.32   Employment and Non-Competition Agreement by and between NuMED Home
           Health Care, Inc. and Allan Cheiken dated April 4, 1995. (10)

10.33   Financial Consulting Agreement by and between NuMED Home Health
           Care, Inc. and A.T. Brod & Co., Inc.(7)

10.34   Employment Agreement between NuMED Home Health Care, Inc. and
           Jugal K. Taneja, dated September 1, 1996.(11)

10.35   Employment Agreement between NuMED Home Health Care, Inc. and
           Susan J. Carmichael, dated September 1, 1996.(11)

10.36   Employment and Non-Competition Agreement by and between NuMED Home
           Health Care, Inc. and Allan Cheiken dated April 4, 1996.

10.37   Employment and Non-Competition Agreement by and between Parke Home
           Health Care,  Inc. and Pamela Metz dated April 8, 1996.

10.38   Amendments to employment agreement dated 9/1/96 between NuMED and
           Susan J. Carmichael. 

10.39   Amendments to employment agreement dated 9/1/96 between NuMED and
           Jugal K. Taneja.

21      Subsidiaries of NuMED Home Health Care, Inc.

23   ## Consent of Ernst & Young LLP.

27      Financial Data Schedule.

                                           
   ##   Filed herewith

   (1)     Incorporated by reference to the Company's Schedule 13D filed
           September 20, 1993.

   (2)     Incorporated by reference to the Company's registration statement
           on Form S-4, File No. 33-53218

   (3)     Incorporated by reference to NuMED Surgical, Inc.'s registration
           statement on Form 10SB, File No. 0-24362

   (4)     Incorporated by reference to the Company's Form 10-KSB for the
           fiscal year ended March 31, 1992.

   (5)     Incorporated by reference to the Company' form 10-KSB for the
           fiscal year ended March 31, 1993.

   (6)     Incorporated by reference to the Company's Amendment No. 2 to
           Schedule 13D filed on January 5, 1994.

   (7)     Incorporated by reference to the Company's registration statement
           on Form SB-2, File No.  33-86122.

   (8)     Incorporated by reference to the Company's registration statement
           on Form S-8, File No. 33-90966.

   (9)     Incorporated by reference to the Company's report on Form 8-K
           dated filed on May 5, 1995.

   (10)    Incorporated by reference to the Company's form 10-KSB for the
           fiscal year ended March 31, 1995.

   (11)    Incorporated by reference to the Company's form 10-QSB for the
           quarter ended September 30, 1995.

   (12)    Incorporated by reference to the Company's form 10-QSB for the
           quarter ended September 30 1996 - Jugal K. Taneja.

   (13)    Incorporated by reference to the Company's form 10-QSB for the
           quarter ended September 30, 1996 - Susan J. Carmichael.

      (b)  Reports on Form 8-K.
         
           The Company filed a report on Form 8-K dated May 5, 1995 in
        connection with the consummation of the purchase of certain assets of
        Rehab America, Inc. by NuMED Rehabilitation on April 4, 1995.  The
        following financial statements were filed with the report:
         
           (A)      NuMED Home Health Care, Inc. and Subsidiaries Unaudited Pro
                    Forma Condensed Combined Financial Statements:

             (i)    Unaudited Pro Forma Condensed Combined Balance Sheet as
                    of December 31, 1994.
             (ii)   Unaudited Pro Forma Condensed Combined Statement of
                    Income for the Nine Months Ended December 31, 1994. 
             (iii)  Unaudited Pro Forma Condensed Combined Statements of
                    Income for the Year Ended March 31, 1994.
             (iv)   Notes to Unaudited Pro Forma Condensed Combined Financial
                    Statements.
         
            (B)     North American Rehabilitation, Inc. and Care Management
                    Services, Inc. Unaudited Interim Combined Financial
                    Statements:

             (i)    Combined Balance Sheet as of December 31, 1994 and
                    September 30, 1994.
             (ii)   Unaudited Combined Statement of Operation and Accumulated
                    Deficit for the Three Months Ended December 31, 1994 and
                    1993.
             (iii)  Unaudited Combined Statements of Cash Flow for the Three
                    Months Ended December 31, 1994 and 1993.
             (iv)   Notes to Unaudited Combined Financial Statements.
         
            (C)     North American Rehabilitation, Inc. and Care Management
                    Services, Inc. Combined Financial Statements:

             (i)    Combined Balance Sheets as of September 30, 1994 and
                    1993.
             (ii)   Combined Statements of Operations and Accumulated Deficit
                    for the Years Ended September 30, 1994, 1993 and 1992.
             (iii)  Combined Statement of Cash Flows for the Years Ended
                    September 30, 1994, 1993 and 1992.
             (iv)   Notes to Combined Financial Statements.
         

   <PAGE>
                         Report of Independent Auditors

   To the Stockholders and Board of Directors of
   NuMED Home Health Care, Inc. and Subsidiaries
   Clearwater, Florida

   We have audited the consolidated balance sheets of NuMED Home Health Care,
   Inc. and subsidiaries as of March 31, 1998 and 1997, and the related
   consolidated statements of operations, stockholders' equity and cash flows
   for the years then ended.  These consolidated financial statements are the
   responsibility of the Company's management.  Our responsibility is to
   express an opinion on these consolidated financial statements based on our
   audits.

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

   In our opinion, the consolidated financial statements referred to above
   present fairly, in all material respects, the consolidated financial
   position of NuMED Home Health Care, Inc. and subsidiaries at March 31,
   1998 and 1997 and the consolidated results of their operations and their
   cash flows for the years then ended, in conformity with generally accepted
   accounting principles.


                                                            ERNST & YOUNG LLP


   Cleveland, Ohio
   June 29, 1998

   <PAGE>

                  NuMED Home Health Care, Inc. and Subsidiaries
                           Consolidated Balance Sheets


                                                       March 31
                                                 1998             1997
   Assets
   Current assets:
     Cash and cash equivalents                 $59,725          $797,440
     Cash deposits securing contractual
        arrangements                         1,275,980         1,875,000
                                            ----------        ----------
                                             1,335,705         2,672,440
     Accounts receivable, net of
        allowances for doubtful accounts
        of $304,796 in 1998 and $302,507
        in 1997                              4,343,476         3,545,782
     Prepaids, inventories, and other
        current assets                         335,825           282,093
                                            ----------        ----------
   Total current assets                      6,015,006         6,500,315

   Property and equipment, net                 382,928           389,017
   Goodwill, net of accumulated
     amortization of $1,098,913
     in 1998 and $753,570 in 1997            4,081,222         4,426,563
   Other intangible assets, net of
     accumulated amortization of
     $1,912,826 in 1998 and $1,796,412 in
     1997                                      242,563           348,958
   Deferred tax and other                       35,185           551,447
                                            ----------        ----------
   Total assets                            $10,755,904       $12,216,300
                                            ==========        ==========
   Liabilities and stockholders' equity
   Current liabilities:
     Trade accounts payable                   $289,850          $289,844
     Accrued salaries and payroll related    1,291,419         1,421,538
     Accrued expenses                          278,055           412,517
     Estimated amounts due to third-party
        payors                                  21,345           158,282
     Short-term borrowings                   1,596,424                 0
     Current portion of long-term
        obligations                             97,053           614,331
                                            ----------        ----------
   Total current liabilities                 3,574,146         2,896,512

   Long-term obligations, less current
     portion                                   917,427         1,112,807
                                            ----------        ----------
   Total liabilities                         4,491,573         4,009,319
   Stockholders' equity:
     Preferred stock, authorized
        2,000,000, no shares issued or
        outstanding                                  0                 0
     Common stock, $.001 par value,
        authorized 48,000,000 shares,
        5,010,219 shares issued                  5,010             5,010
     Additional paid-in capital             10,653,754        10,679,113
     Treasury stock, 43,599 and 67,075
        shares of common stock at cost,
        respectively                           (87,634)         (134,821)
   Accumulated deficit                      (4,306,799)       (2,342,321)
                                            ----------        ----------
   Total stockholders' equity                6,264,331         8,206,981
                                            ----------        ----------
   Total liabilities and stockholders'
     equity                                $10,755,904       $12,216,300
                                            ==========        ==========

   See notes to consolidated financial statements.

   <PAGE>

                  NuMED Home Health Care, Inc. and Subsidiaries
                      Consolidated Statements of Operations


                                                  Years Ended March 31
                                                  1998             1997

   Revenues                                 $22,649,516      $24,590,951
   Direct expenses                           17,240,737       19,411,870
                                             ----------       ----------
   Gross profit                               5,408,779        5,179,081

   General and administrative expenses:
     Salaries and benefits                    3,543,928        3,500,172
     Operating expenses                         865,684          976,704
     Professional fees                          371,436          370,860
     Occupancy expenses                         802,754          840,157
     Insurance                                  293,062          342,651
     Amortization and depreciation              604,479          651,897
     Bad debt expense                           103,733          243,191
     Other contractual settlement                     0          899,000
                                             ----------       ----------
   Total general and administrative           6,585,076        7,824,632
                                             ----------       ----------
   Operating loss                            (1,176,297)      (2,645,551)

   Other revenues (expenses):
     Interest income                            112,373           91,882
     Interest expense                          (215,572)         (96,816)
     Other                                     (152,759)          (3,878)
                                             ----------       ----------
   Total other revenues (expenses)             (255,958)          (8,812)
                                             ----------       ----------
   Loss before income tax expense (benefit)  (1,432,255)      (2,654,363)
   Income tax expense (benefit)                 532,223         (776,311)
                                             ----------       ----------
   Net loss                                 $(1,964,478)     $(1,878,052)

   Net loss per share-basic and diluted          $(0.40)          $(0.38)
                                             ==========       ==========
   Weighted average shares outstanding-
     basic and diluted                        4,950,845        4,929,752

   See notes to consolidated financial statements.

   <PAGE>

   <TABLE>
                                            NuMED Home Health Care, Inc. and Subsidiaries
                                           Consolidated Statements of Stockholders' Equity
   <CAPTION>
                                                            Additional
                                        Common Stock         Paid-in    Accumulated     Treasury Stock
                                     Shares     Dollars      Capital      Deficit     Shares    Dollars       Total
   <S>                              <C>            <C>     <C>            <C>         <C>       <C>       <C>
   Balance at April 1, 1996         5,010,219      $5,010  $10,708,176    $(464,269)  (46,023)  $(68,138) $10,180,779

   Net loss                                                              (1,878,052)                       (1,878,052)

   Exercise of options                                          (1,684)                20,000     30,885       29,201

   Purchase of treasury shares                                                       (100,000)  (201,000)    (201,000)
    
   Shares issued under employee
    stock purchase plan                                        (27,379)                58,948    103,432       76,053
                                   ----------  ----------   ----------   -------------------- ----------   ----------
   Balance at March 31, 1997        5,010,219       5,010   10,679,113   (2,342,321)  (67,075)  (134,821)   8,206,981

   Net loss                                                              (1,964,478)                       (1,964,478)
    
   Shares issued under employee
    stock purchase plan                                        (25,359)                23,476     47,187       21,828
                                   ----------  ----------   ----------   ---------- --------- ----------   ----------
   Balance at March 31, 1998        5,010,219      $5,010  $10,653,754  $(4,306,799)  (43,599)  $(87,634)  $6,264,331
                                   ==========  ==========   ==========   ========== ========= ==========   ==========
   </TABLE>

   See notes to consolidated financial statements.

   <PAGE>

                  NuMED Home Health Care, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows


                                                        Years Ended
                                                    1998           1997

   Cash flows from operating activities
   Net loss                                     $(1,964,478)    $(1,878,052)
   Adjustments to reconcile net loss to net
      cash provided by (used in) operating
      activities:
     Depreciation and amortization                  604,479         651,897
     Provision for uncollectible accounts           103,733         243,191
     Cash deposits securing contractual
        arrangements                                      0          42,014
     Loss on sale or disposal of property,
        plant and equipment                               0             269
     Increase (decrease) in cash due to net
        changes in operating
        assets and liabilities:
     Accounts receivable                           (901,427)        983,633
     Prepaids and other current assets              (53,732)        (54,595)
     Accounts payable and accrued expenses         (401,512)       (229,602)
     Deferred charges and other                     499,897        (519,337)
                                                 ----------      ----------
   Net cash provided by (used in) operating
     activities                                  (2,113,040)       (760,582)

   Cash flows from investing activities
   Purchase of property and equipment              (129,289)       (261,267)
   Purchase of accounts receivable lists                  0         (48,559)
                                                 ----------      ----------
   Net cash provided by (used in) operating
     activities                                    (129,289)       (309,826)

   Cash flows from financing activities
   Proceeds from borrowings                       9,979,258       2,335,200
   Payments on borrowings                        (9,095,492)     (1,473,432)
   Proceeds from issuance of stock through
     employee purchase plan                          21,828          76,053
   Proceeds from the issuance of stock through
     exercise of stock options                            0          29,201
   Cash securing letters of credit                  599,020        (500,000)
   Purchase of treasury stock                             0        (201,000)
   Collection of note receivable                          0         106,966
                                                 ----------      ----------
   Net cash provided by (used in) financing
     activities                                   1,504,614         372,988
                                                 ----------      ----------
   Increase (decrease) in cash and cash
     equivalents                                   (737,715)       (697,420)
   Cash and cash equivalents at beginning of
     year                                           797,440       1,494,860
                                                 ----------      ----------
   Cash and cash equivalents at end of year         $59,725        $797,440
                                                 ==========      ==========
   Supplemental disclosure
                                
   Interest paid during the year                   $197,105         $94,270
                                                 ==========      ==========
   Income taxes paid during the year                     $0              $0
                                                 ==========      ==========

   See notes to consolidated financial statements.

   <PAGE>

                  NuMed Home Health Care, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                             March 31, 1998 and 1997

   A.   Summary of Significant Accounting Policies

   Basis of Presentation

   The consolidated financial statements include the accounts of NuMED Home
   Health Care, Inc. (NuMED or the Company) and its wholly-owned
   subsidiaries:  Whole Person Home Health Care of Ohio, Inc. (Whole Person
   in OH) and subsidiaries, Whole Person Home Health Care, Inc. (Whole Person
   in PA), Pennsylvania Medical Concepts, Inc. (PA Medical Concepts), Whole
   Person Home Health Care of Florida, Inc. dba Total Professional Health
   Care (Total Professional), Silver Moves, Inc. dba Florida Nursing Services
   (Florida Nursing), Countryside Health Services, Inc. (Countryside), Parke
   Home Health Care, Inc. (Parke) and NuMED Rehabilitation (NuMED Rehab). 
   Intercompany transactions between NuMED and its subsidiaries have been
   eliminated in the consolidated financial statements.

   Services

   NuMED is a holding company that provides home health care services and
   temporary staffing of nursing personnel as well as contractual staffing of
   physical, occupational and speech therapists to various health care
   facilities through its eight subsidiaries. Home health services are
   provided in certain markets of Florida, Ohio and Pennsylvania. Therapy
   services are provided in certain markets of Ohio, Pennsylvania, Illinois,
   Indiana, Kentucky, Maryland and New Jersey.

   Use of Estimates

   The preparation of financial statements in conformity with generally
   accepted accounting principles requires management to make estimates and
   assumptions that affect the reported amounts of assets and liabilities,
   and disclosure of contingent assets and liabilities at the date of the
   financial statements. Estimates also affect the reported amounts of
   revenue and expenses during the reporting period. Actual results could
   differ from those estimates.

   Revenues

   Net revenues for home health care services are recorded at established 
   rates less contractual allowances.  Revenues are recorded as services are
   performed.  The Company has arrangements with certain third-party payors
   under which the Company is paid a prospectively determined price for
   services provided. Contractual adjustments under reimbursement agreements
   with third-party payors, including retroactive adjustments, are estimated
   and accrued in the period which services were rendered. Estimates are
   adjusted, if necessary, in the period final settlements are determined.

   Revenues from third-party payors for the years ended March 31, 1998 and
   1997 were approximately $12,785,000 and $10,327,000, respectively. Certain
   of these revenues (primarily Medicare) are subject to cost reimbursement
   principles and are subject to audit and retroactive adjustment by the
   respective third-party fiscal intermediaries. Allowances are provided, as
   necessary, to reflect the excess of the established rates over rates based
   on third-party arrangements.

   Approximately 34% and 25% of 1998 and 1997 revenues, respectively, were
   derived from the Medicare program.  Laws and regulations governing the
   Medicare program are complex and subject to interpretation. The Company
   believes that it is in compliance with all applicable laws and regulations
   and is not aware of any pending or threatened investigations involving
   allegations of potential wrongdoing. While no such regulatory inquires
   have been made, compliance with such laws and regulations can be subject
   to future government review and interpretation as well as significant
   regulatory penalties.

   Concentration of Credit Risk

   The Company's concentration of credit risk relating to accounts receivable
   is limited due to the diversity of patients and payors.  Accounts
   receivable primarily consist of amounts due from government programs,
   commercial insurance companies, private pay patients, hospitals, long-term
   care facilities and other group insurance programs.  Excluding
   governmental programs, no one payor source represents more than 10% of the
   Company's accounts receivable or revenues for 1998.  The Company
   recognized 16% of its revenue from a single customer in 1997.  This
   customer terminated their relationship in 1998.  The Company maintains an
   allowance for uncollectible accounts based on the expected collectibility
   of accounts receivable.

   Cash and Cash Equivalents

   Cash equivalents represent highly liquid investments with original
   maturities of less than 90 days. Cash and cash equivalents excludes cash
   deposits used to secure contractual obligations.

   Inventories

   Inventories are carried at the lower of cost (first-in, first-out (FIFO)
   method) or net realizable value.  Inventories consist of disposable
   medical supplies.

   Property and Equipment

   Property and equipment are stated at cost and are depreciated on the
   straight-line basis over their estimated useful lives for financial and
   tax reporting purposes.  Repairs and maintenance costs are expensed as
   incurred.  Additions, betterments, and major renewals are capitalized.

   Goodwill

   Goodwill, representing the excess of the cost over the net assets of
   acquired businesses, after allocation to other identifiable intangible
   assets, is amortized on the straight-line basis over fifteen years.  The
   carrying value of goodwill is reviewed at each balance sheet date to
   determine whether goodwill has been impaired. If this review indicates
   that goodwill will not be recoverable, as determined based on the
   undiscounted cash flows of the entity acquired over the remaining
   amortization period, the Company's carrying value of the goodwill would be
   reduced based on the estimated shortfall of discounted cash flows at such
   time an impairment in value of goodwill has occurred. Based on the
   Company's review as of March 31, 1998, no impairment of goodwill was
   evident.

   Other Intangible Assets

   Other intangible assets consist of customer lists, covenants not to
   compete and various leaseholds and are amortized over their estimated
   useful life up to a maximum of 10 years.

   Financial Instruments

   The carrying values of cash and cash equivalents, cash deposits securing
   contractual arrangements, accounts receivable and accounts payable are
   reasonable estimates of their fair value due to the short-term nature of
   these financial instruments.  The carrying value of the Company's 
   borrowings under the revolving credit agreements approximate fair value.

   Earnings Per Share

   In 1998, the Company adopted Statement of Financial Accounting Standards
   No. 128, "Earning Per Share" (SFAS 128).  Accordingly, basic net income
   (loss) per share was computed based on the weighted average number of
   common shares outstanding during the fiscal year.  Dilutive net income
   (loss) per share was computed based on the weighted average number of
   common shares outstanding plus the shares that would be outstanding
   assuming exercise of dilutive securities.  Per share amounts for the prior
   period were restated, as necessary, to conform to the provisions of SFAS
   128.

   Stock-Based Compensation

   The Company has elected to follow Accounting Principles Board Opinion No.
   25, "Accounting for Stock Issued to Employees" (APBO No. 25), and related
   interpretations, in accounting for its employee stock options and warrants
   because, as discussed below, the alternative fair value accounting
   provided for under Statement of Financial Accounting Standards No. 123
   "Accounting for Stock Based Compensation" (SFAS No. 123), requires use of
   highly subjective assumptions in option valuation models. Under APBO
   No. 25, because the exercise price of the Company's employee stock options
   and warrants is not less than fair market price of the shares at the date
   of the grant, no compensation expense is recognized in the financial
   statements. Pro forma information regarding net income and earnings per
   share, determined as if the Company had accounted for its employee stock
   options and warrants under the fair value method of SFAS No. 123, is
   presented in footnote F.

   Recently Issued Accounting Pronouncements

   In June 1997, the Financial Accounting Standards Board issued Statement
   of Financial Accounting Standards No. 131, "Disclosures about Segments of
   an Enterprise and Related Information" (Statement 131).  Statement 131
   establishes standards for the way that public business enterprises report
   information about operating segments in annual financial statements and 
   requires that those enterprises report selected information about 
   operating segments in interim financial reports.  It also establishes
   standards for related disclosures about products and services, 
   geographic areas, and major customers.  Statement 131 is effective for
   financial statements for fiscal years beginning after December 15, 1997,
   and therefore the Company will adopte the new requirements retroactively 
   in fiscal 1999.  Management has not completed its review of Statement 131,
   but does not anticipate that adoption will have a significant effect on the
   Company's disclosures.

   Reclassifications

   Certain amounts in the 1997 financial statements have been reclassified to
   conform to the 1998 presentation.

   B.   Property and Equipment

   Property and equipment consist of the following:

                                                    March 31
                                              1998             1997

   Equipment                                 $568,113        $453,566
   Furniture and fixtures                     121,210         107,831
   Leaseholds                                  77,562          76,199
                                             --------        --------
                                              766,885         637,596
   Less accumulated depreciation              383,957         248,579
                                             --------        --------
                                             $382,928        $398,017
                                             ========        ========


   C.   Short-Term Borrowings

   In August 1997, the Company secured two new revolving lines of credit for
   the purpose of consolidation of debt service, payment of outstanding
   balances on two $150,000 lines of credit and to fund future growth.  The
   first, a $3,000,000 credit facility, is secured by accounts receivable and
   cash balances of NuMED, NuMED Rehab, Florida Nursing, Countryside, PA
   Medical Concepts and Parke.  The second, a $2,000,000 credit facility, is
   secured by accounts receivable and cash balances of NuMED and Total
   Professional.  Advances under these lines are limited to 80% of qualified
   accounts receivable under 120 days old.  The outstanding balance of these
   lines at March 31, 1998 was $1,596,424.  The lines bear interest at 2%
   above the prime rate as designated by Fleet National Bank of Connecticut,
   N.A. (10.5% at March 31, 1998).

   D.   Long-Term Obligations

   Long-term obligations consist of the following:

                                                       March 31
                                                   1998          1997

   $1,250,000 line of credit ($1,000,000 at
     March 31, 1997) with interest payable
     monthly at 175 basis points above the
     90 day certificate of deposit rate
     (7.4% at March 31, 1998).  This
     agreement is collateralized by two
     certificates of deposits.                   $901,000    $1,000,000
   36 month term note payable in monthly
     principal and interest installments
     of $1,389 through March 15, 2000 at
     an annual rate of 10%.  This note is
     unsecured.                                    28,990        43,043
   30 month term note payable to the
     previous owners of Parke payable in
     monthly principal installments of
     $11,987 through October 1, 1998 at an
     annual rate of 8%.  The note is
     secured by the common stock of Parke.         71,922       215,768
   30 month term note payable to the
     previous owners of Parke payable in
     monthly principal installments of
     $833 through October 1, 1998 at an
     annual rate of 8%.  The note is
     secured by the common stock of Parke.          5,000        15,000
   $275,000 line of credit with interest
     payable monthly at 200 basis points
     above the 90 day certificate of
     deposit rate.                                      0       272,000
   $150,000 line of credit with interest
     payable monthly at 50 basis points
     above the prime rate as published by
     National City Bank.                                0        50,000
   $150,000 line of credit with interest
     payable monthly at the prime rate as
     published by Fifth Third Bank.                     0        75,000
   Other                                            7,568        56,327
                                                ---------     ---------
                                                1,014,480     1,727,138
   Less current portion of long-term
     obligations                                   97,053       614,331
                                                ---------     ---------
                                                 $917,427    $1,112,807
                                                =========     =========



   The amounts of long term obligations due in each of the next three years
   are as follows:

                      1999                    $97,053
                      2000                    913,563
                      2001                      3,864
                                            ---------
                                           $1,014,480
                                            =========

   As of March 31, 1998, NuMed has $624,000 available out of a total of
   $1,525,000 on existing long-term lines of credit.

   E.   Stockholders' Equity

   During fiscal 1997, NuMED purchased 100,000 shares at $2.01 per share.  No
   treasury shares were purchased in fiscal 1998.

   F.   Stock and Benefit Plans

   A summary of the Company's stock option activity, and related information
   for the years ended March 31, 1998 and 1997 is shown in the following
   table in accordance with SFAS No. 123:

   <TABLE>
   <CAPTION>
                                                  1998                         1997
                                                        Weighted-                     Weighted-
                                                         Average                       Average
                                          Optioned       Exercise       Optioned       Exercise
                                           Shares         Price          Shares         Price
   <S>                                    <C>               <C>         <C>              <C>  
   Outstanding beginning of year          2,168,040          $3.06      1,194,120          $3.28
   Granted-Market price equals exercise
    price                                                                 218,760           2.64
   Granted-Market price is less than
    exercise price                                                        850,000           2.74
   Exercised                                                              (20,000)          1.46
   Canceled                                                               (74,840)          2.08
                                          ---------         ------      ---------        -------
   Outstanding at end of year             2,168,040          $3.06      2,168,040          $3.06
                                          =========         ======      =========        =======
   Exercisable at end of year             2,091,184          $3.07      2,034,666          $3.09
                                          =========         ======      =========        =======
   Weighted-average fair value of
     options granted during year:
     Market price equals exercise
      price                                $                                $1.46
     Market price is less than 
      exercise price                       $                                $0.72
   Reserved for future grants               340,000                       340,000
                                          =========                    ==========
   </TABLE>


   Exercise prices for optioned shares outstanding as of March 31, 1998
   ranged from $1.22 to $5.17.  A summary of these options by range of
   exercise prices is shown as follows:

   <TABLE>
   <CAPTION>
                        Outstanding               Exercisable         Weighted-
                                Weighted-                Weighted-     Average
                                 Average                  Average     Remaining
       Range of      Optioned   Exercise     Optioned    Exercise    Contractual
   Exercise Prices    Shares      Price       Shares       Price     Life (years)
   <S>              <C>            <C>       <C>            <C>             <C> 
   < $2.00            264,640      $1.29       246,444      $1.28            2.25
   $2.00-$2.99      1,230,000       2.60     1,230,000       2.60            3.00
   $3.00-$3.99        193,400       3.26       134,740       3.32            2.48
   $4.00-$4.99            -           -            -           -               -
   > $5.00            480,000       5.14       480,000       5.14            1.86
                    ---------      -----     ---------      -----           -----
                    2,168,040      $3.06     2,091,184      $3.07            2.61
                    =========      =====     =========      =====           =====

   </TABLE>

   Pre-Plan Stock Options

   During fiscal 1992 and 1993, the Board of Directors reserved 300,000
   shares of common stock for the formation of a stock plan for executives. 
   220,000 shares were granted based at the average bid price which ranged
   from $2.19 to $5.00.  As of March 31, 1998 no options have been exercised.

   1994 Employee Stock Option Plan

   Effective April 6, 1995, this plan provides for the grant of incentive
   stock options and non-qualified stock options to purchase up to 750,000
   shares of common stock.  Each option will have an exercise price equal to
   the fair market value of the common stock on the date of the grant, except
   for the grants of incentive stock options to beneficial owners of 10% or
   more of the common stock, which will contain an exercise price equal to
   110% of fair market value on the date of grant.  Employees and officers of
   NuMED and its subsidiaries are eligible to participate in the 1994 Plan.
   On April 18, 1995, 200,000 options were granted to five officers of the
   Company at a price of $1.22 and 50,000 options were granted to one officer
   of the Company at a price of $1.34.  On September 1, 1996, 10,000 options
   were granted to one officer of the Company at $1.70. On March 29, 1996,
   60,000 options were granted to three officers of the Company at price of
   $2.37 and a block of up to 100,000 options to be granted at the discretion
   of management was authorized at $2.37 of which 72,000 were granted. A
   total of 392,000 options were granted during fiscal 1997.

   On April 1, 1996, 180,000 options were issued to two officers of the
   Company at prices ranging from $2.37 to $2.61 The options are exercisable
   after a six month holding period. As of March 31, 1998, under the 1994
   Employee Stock Option Plan, 20,000 options have been exercised.

   Employee Stock Purchase Plan

   Effective April 6, 1995, regular full-time or part-time employees
   (excluding those who work less than 20 hours per week, those who have not
   completed a ninety day orientation period and those employees who own 5%
   or more of the common stock) are permitted to purchase common stock at 85%
   of the fair market value up to a maximum of 15% of his or her total annual
   compensation.  The plan limits total employee purchases to a maximum of
   250,000 shares and individual employee purchases to $25,000 annually. 
   Payroll deductions commenced in May 1995.

   Outside Director and Advisory Board Member Stock Option Plan

   This plan provides for an annual grant of non-qualified stock options to
   each outside director of NuMED who is not an employee and to each Advisory
   Board Member who is a professional representing each medical area in which
   NuMED provides services.  Each option has an exercise price equal to the
   fair market value of the common stock on the date of grant, and options
   vest over a three year period with one third vesting on each anniversary
   date of the grant.  Currently, NuMED has approximately 28 advisory board
   members and 5 outside directors.  Advisory Board Members who refer clients
   to NuMED are not permitted to participate in the plan.  The first date of
   grant was July 1, 1994 and options to purchase 48,240 shares of common
   stock were granted to outside directors and 19,880 options were granted
   for eligible Advisory Board Members in fiscal 1996 and 1995.  On July 1,
   1996 60,300 options to purchase were granted to outside directors and
   18,460 options were granted to Advisory Board Members. As of March 31,
   1998, 22,716 options have vested.

   401(K) Plan

   Effective September 1, 1995, NuMED sponsors a 401(k) plan. Regular full-
   time or part-time employees (excluding those who have not completed a
   ninety day orientation period and those who work less than 500 hours per
   year) are eligible to participate in the plan. NuMED may contribute to the
   plan on a discretionary basis. There is a one-year service requirement for
   participation in the employer discretionary matching contribution and a
   two-year cliff vesting requirement for each discretionary employer
   contribution. NuMED did not contribute to the plan during fiscal 1998 or
   1997.

   Warrants

   During fiscal 1997, warrants for the purchase of 810,000 common shares
   were issued to two officers of the Company, resulting from an amendment to
   their employment agreements. These warrants are exercisable at $2.75 and
   forfeited if not exercised during the terms of the employment agreements.

   The fair value for the above options and warrants was estimated at the
   date of grant using a Black Scholes option pricing model with the
   following weighted-average assumptions for all options and warrants
   granted in 1997 (no options or warrants were granted or canceled in 1998):


              Risk-free interest rate                   6.36%
              Expected life of option                  3 years
              Expected dividend yield of stock          0.00%
              Expected volatility of stock              0.891

   The Black-Scholes option pricing model was developed for use in estimating
   the fair value of traded options which have no vesting restrictions and
   are fully transferable.  Because the Company's employee stock options and
   warrants have characteristics significantly different from those of traded
   options, and because changes in the subjective input assumptions can
   materially affect the fair value estimate, it is management's opinion that
   existing models do not necessarily provide a reliable single measure of
   the fair value of its employee stock options.

   The amounts below represent the pro forma information calculated through
   the use of the Black-Scholes model.  For purposes of pro forma
   disclosures, the estimated fair value of the options and warrants is
   amortized to expense over the options' vesting period.


                                              1998          1997

           Pro forma net loss             $(1,964,478)   $(2,494,000)

           Pro forma net loss per share         $(.40)         $(.50)

   Due to the required phase-in provisions, the effects of applying SFAS
   No. 123 to arrive at the above pro forma amounts are not representative of
   the expected effects on pro forma net income or earnings per share in
   future years.

   G.   Commitments and Contingencies

   Professional Liability Insurance

   NuMED carries professional liability insurance for $1,000,000 per
   occurrence and aggregate claims up to $3,000,000 per year for its Home
   Health division and $2,000,000 per occurrence and aggregate claims up to
   $4,000,000 per year for its Rehabilitation division. The Company has no
   pending malpractice claims.

   Employee Group Insurance

   NuMED is partially self-insured for its employee health insurance. The
   Company has accrued its best estimate of self-insured liabilities,
   including incurred but not reported claims. NuMED is responsible for
   individual employee claims up to $35,000 and aggregate claims up to a
   certain pre-determined amount annually based upon plan participation.

   Lease Commitments

   The Company leases its office space and certain office equipment under
   various operating leases.  Rent expense for the years ended March 31, 1998
   and 1997 was approximately $470,000 and $532,000, respectively.  Future
   lease commitments are as follows:

                       1999                  $354,397
                       2000                   242,371
                       2001                   164,205
                       2002                    22,846
                       2003                     2,013
                       Thereafter                   0

   H.   Related Party Transactions

   Several lease agreements were entered into by the Company with Bancapital
   Corporation (Bancapital), which is owned and controlled by a principal
   shareholder of NuMED. The agreements provide that Bancapital will furnish
   certain office furniture and equipment in return for lease payments.
   Management believes these payments are reasonable and customary for the
   equipment provided. NuMED leased the office furniture and equipment from
   Bancapital for a total cost of $28,000 in both 1998 and 1997.
   Bancapital entered into a contract for the lease of one of NuMED's
   offices. The lease was guaranteed by a principal shareholder of NuMED.
   NuMED paid the office lease directly. This arrangement was terminated on
   March 31, 1997.

   I.   Other Contractual Settlement

   The Rehabilitation division's largest customer in 1997 underwent a routine
   Medicare audit of its cost report. The customer's fiscal intermediary, in
   its interpretation of the Medicare prudent buyer guidelines, concluded
   that the cost of certain professional contract therapy services provided
   by the Company exceeded these guidelines. Management believes that the
   fiscal intermediary conducting this audit applied an overreaching and
   erroneous interpretation of applicable reimbursement guidelines.

   The Company was contractually obligated to repay this customer the amount
   of Medicare disallowed costs of $899,000. The entire amount paid was
   expensed in 1997.  The Company intends to vigorously pursue all avenues of
   appeal to recover these costs. There is no guarantee that intermediary
   negotiations or the appeals process will result in a favorable
   determination.  A hearing date has been established for October 1998.

   During 1997, the Company obtained a $500,000 letter of credit for future
   potential disallowances.  The customer released the $500,000 letter of
   credit in April 1997.

   J.   Income Taxes

   The provision (benefit) for income taxes consists of the following:

                                                1998               1997
   Federal:
     Current                                 $(184,211)        $(171,313)
     Deferred                                  679,034          (604,998)
                                              --------          --------
                                               494,823          (776,311)
   State and local                              37,400                 0
                                              --------          --------
   Total                                      $532,223         $(776,311)
                                              ========          ========

   Deferred taxes reflect the impact of temporary differences between the
   financial statements and tax bases of assets and liabilities, primarily
   relating to accrued expenses and valuation allowances.

   The components of deferred tax assets and liabilities are as follows:

                                               1998             1997
   Deferred tax assets:
     Net operating loss carryforward          $949,142         $519,825
     Accounts receivable reserves              113,870           76,471
     Accrued expenses                           43,388           67,726
     Depreciation and amortization               8,127              305
     Other                                       3,100            1,480
                                             ---------        ---------
                                             1,117,627          665,807
   Valuation allowances                     (1,117,627)               0
   Deferred tax liabilities                          0                0
                                             ---------        ---------
   Net deferred tax assets                    $      0         $665,807
                                             =========        =========
   Current deferred tax assets                $      0         $144,197
                                
   Long-term deferred tax assets                     0          521,610
                                             ---------        ---------
   Net deferred tax assets                    $      0         $665,807
                                             =========        =========


   A reconciliation to the effective income tax rate to the Federal statutory
   rate follows:

                                                   1998        1997

   Tax at statutory rate                            (34)%       (34)%
   Amortization of excess purchase price              3           2
   Nondeductible expenses                             0           1
   Other, net                                         2           2
   State and local taxes                             (2)          0
   Prior year valuation reserve adjustment           26           0
   Current year valuation reserve                    42           0
                                                  -----       -----
                                                    37%         (29)%
                                                  =====       =====

   At March 31, 1998, the Company has net operating loss carryforwards, net
   of carrybacks, of approximately $2,853,000 which will be available to
   offset future taxable income through fiscal 2018.  For financial reporting
   purposes, valuation allowances have been recognized to offset the deferred
   tax assets related to the net operating loss carryfowards due to the
   uncertainty as to future recognition.

   <PAGE>
                                   SIGNATURES

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

                               NuMED Home Health Care, Inc.

   Dated:  July 10, 1998       By: /s/ Jugal K. Tanega     
                               Jugal K. Taneja, Chief Executive Officer

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


   Signature                         Title                     Date

   /s/ Jugal K. Taneja               Chairman of the Board,    July 10, 1998
   Jugal K. Taneja                   Chief Executive Officer
                                     and Director

   /s/Susan J. Carmichael            President and Director    July 10, 1998
   Susan J. Carmichael

   /s/Thomas V. Chema                Director                  July 10, 1998
   Thomas V. Chema

   /s/Robert P. Ottman               Director                  July 10, 1998
   Robert P. Ottman

   /s/Marilyn Maginnes               Principal Accounting      July 10, 1998
   Marilyn Maginnes                  Officer, Senior Controller