SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934
                  For the fiscal year ended December 31, 2002

                         Commission File Number 0-32195

                        AMERICAN HOSPITAL RESOURCES, INC.
                  (Name of small business issuer in its charter)

                   UTAH                                    87-0319410
      (State or other jurisdiction of           (I.R.S.  Employer  I.D.  No.)
       incorporation or organization)

                    1912 WEST BAY CREST, SANTA ANA, CA 92704
              (Address and Zip Code of principal executive offices)

                 Issuer's telephone number, including area code:
                                  714-444-0223

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

                                      None

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

                       No par value, common voting shares

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

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  is contained in this form, and no disclosure will be contained,
to  the  best  of the registrant's knowledge, in definitive proxy or information
statements  incorporated  by  reference  in  Part III of this form 10-KSB or any
amendment  to  this  Form  10-KSB.  [    ]

The  issuer's  revenue  for  its  most  recent  fiscal  year  was:  $52,700.

The  aggregate market value of the issuer's voting stock held as of December 31,
2002  by  non-affiliates  of the issuers was $1,094,940 based on the average bid
and  asked  price  of  the registrant's common stock as reported by the National
Quotations  Bureau.  At December 31, 2002, there were 7,614,000 shares of no par
value  common  stock  issued  and  outstanding  and  2,600,000  of  no par value
preferred  stock  issued  and  outstanding.

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

Documents  incorporated  by  reference:  none


                                        1
<PAGE>

<TABLE>
<CAPTION>


                                           FORM 10-KSB
                        AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY
                                             INDEX

                                                                                             Page
<S>       <C>                                                                                 <C>
PART I .  Item 1.  Description of Business                                                      3

          Item 2.  Description of Property                                                      4

          Item 3.  Legal Proceedings                                                            4

          Item 4.  Submission of Matters to a Vote of Security Holders                          5

PART II.  Item 5.  Market for Common Equity and Related Stockholder Matters                     6

          Item 6.  Management's Discussion and Analysis or Plan of Operation                    8

          Item 7.  Financial Statements                                                         9

          Item 8.  Changes In and Disagreements with Accountants on Accounting and
          Financial Disclosure                                                                  9

PART III  Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance
          with Section 16(a) of the Exchange Act                                                9

          Item 10.  Executive Compensation                                                     10

          Item 11.  Security Ownership of Certain Beneficial Owners and Management             12

          Item 12.  Certain Relationships and Related Transactions                             13

          Item 13.  Exhibits and Reports on Form 8-K                                           14

          Item 14.  Controls and Procedures                                                    15

          Signatures                                                                           16
</TABLE>

(Inapplicable  items  have  been  omitted)


                                        2
<PAGE>

                                     PART I

FORWARD-LOOKING  STATEMENT  NOTICE

When  used  in  this  report,  the  words "may," "will," "expect," "anticipate,"
"continue,"  "estimate,"  "project,"  "intend,"  and  similar  expressions  are
intended  to  identify  forward-looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of  1934  regarding events, conditions, and financial trends that may affect the
Company's  future plans of operations, business strategy, operating results, and
financial  position.  Persons  reviewing  this  report  are  cautioned  that any
forward-looking  statements  are  not  guarantees  of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors.  Such factors are discussed under the "Item 2.  Management's Discussion
and  Analysis  of  Financial  Condition or Plan of Operations," and also include
general  economic  factors and conditions that may directly or indirectly impact
the  Company's  financial  condition  or  results  of  operations.

DESCRIPTION  OF  BUSINESS

GENERAL

American  Hospital Resources, Inc. or AMHR, originally incorporated in the State
of  Utah  on  May  9,  1972,  under  the name High-Line Investment & Development
Company.  In  1977,  we  changed  our name to Gayle Industries, Inc.  In 1978 we
merged  into  our  subsidiary, Swing Bike, and retained the Swing Bike name.  In
1979 we changed our name from Swing Bike to Horizon Energy Corp., and in 1992 we
changed  our  name  to  Millennium  Entertainment  Corp.

In  1993  we  changed  our name to New Horizon Education, Inc. and implemented a
business  plan  focusing  on  marketing computer education programs.  Later that
year,  we  formed  a  new  subsidiary,  Sunset  Horizon, Inc. for the purpose of
merging  with  Ruff  Network Marketing, Inc.  The subsidiary owned the marketing
rights  to  the  computer  education  programs  and Ruff Network Marketing, Inc.
provided  the  marketing  network.  We  were  not  successful  in  our marketing
activities  and in 1995 we sold our assets and suspended operations.  In 1997 we
sold  our  subsidiary  and  remained essentially dormant from 1998 through 2000.

In  2001,  we  brought  our  SEC  filings  current  and  began  seeking business
opportunities.  In  June  of  2002,  we  finalized  an  Agreement  and  Plan  of
Reorganization  with  American  Hospital  Resources,  Inc.  Under the Agreement,
American  Hospital  Resources  Inc.  became  our  wholly owned subsidiary and we
changed  our  name  to  American  Hospital Resources, Inc.  We also authorized a
class  of  10,000,000  shares of Preferred Stock at no par value and changed our
business  strategy  to  focus  on providing health care services and management.

Our  common  stock  is  quoted  on  the  OTCBB  under  the  symbol  AMHR.

NATURE  OF  BUSINESS

American  Hospital  Resources  is  a  healthcare  services company that provides
pharmacy  services  to  long-term  care providers and hospitals as well as other
acute care consulting and management services.  We are currently focusing on the
acquisition  and  consolidation  of  profitable pharmacy outsourcing businesses.
These  consolidated  pharmacy  outsourcing  and  materials  management companies
provide  pharmacy  management services and pharmaceutical supplies to acute care
hospitals  and long-term care facilities such as nursing homes and hospices.  As


                                        3
<PAGE>

part  of  our  business strategy, we have structured a program designed to merge
profitable regional pharmacy outsourcers into a national team.  We believe these
regional  providers  will  benefit  from  the  enhanced  buying power and market
presence  of  a  consolidated  healthcare  entity.

Since  acquiring our subsidiary and implementing our business plan in the summer
of  2002,  we  have  been  actively  engaged  in  identifying pharmaceutical and
healthcare  companies  to  join our healthcare network.  During the past year we
identified  three  companies  that  we  thought  would be suitable for potential
acquisition  and/or  management.  In December of 2002 we reported on Form 8-K an
Asset Purchase Agreement to acquire the assets of NIPSI Healthcare of Houston LP
and  its  general  partner.  For  a  brief  time in late 2002 and early 2003, we
operated  the  assets  of NIPSI pursuant to this Agreement.  However, the assets
were  returned  in  early 2003 after NIPSI failed to honor certain conditions to
closing.  Subsequent to the date of this report, in April of 2003, a Texas State
court  voided  the  agreement entirely.  We are currently negotiating to acquire
the assets of Rx Solutions, Inc., Coastalmed Inc. and Coastalmed of Panama City,
Inc.  Although  we  have been engaged in negotiations, no transactions have been
consummated  at the date of this report.  We intend to continue seeking suitable
healthcare and pharmaceutical companies for potential acquisition, consulting or
management  opportunities.

EMPLOYEES

Christopher  Wheeler  is currently our only full time employee.  Mr. Wheeler has
served  as  our  Chief  Executive Officer, Chief Financial Officer and president
since  March  of 2002.  We are in the process of negotiating a formal employment
agreement  with  Mr.  Wheeler, however, the terms have not been finalized at the
date  of  this  report.  We  have  also  contracted with outside consultants and
subcontractors  on  a  part  time,  as-needed  basis.

ITEM  2.  DESCRIPTION  OF  PROPERTY.

From  January  2002 through July of 2002, we rented office space in Springville,
Utah  from  our  former  president  for  $100  per month.  In October of 2002 we
relocated  our corporate headquarters to Santa Ana, California and began renting
office  space  from  our  current  president  for $500 per month.  Our office is
located at 1912 West Bay Crest in Santa Ana, California.  We did not maintain an
office  in  August  or  September  of  2002  during  our transition from Utah to
California.  Total  rents  paid  in  2002  were  $2,100.

ITEM  3.  LEGAL  PROCEEDINGS.

AMHR  Subsequent  to  the  date  of  this  report,  AMHR  learned of three legal
proceedings  that  could  potentially  affect  our  business:

Management  is  aware  of a potential suit in the Circuit Court of the County of
St.  Louis,  State  of Missouri, Cause No. 03AC-002539TCV, dated March 25, 2003.
The suit is being brought by Pre-Employment Screening, Inc., Lawrence J. Altman,
Gateway  Legal  Services,  Inc.  and  Fun  Services of Kansas City, Inc. against
American Hospital Resources, Inc. f/k/a New Horizon Resources, Inc.  The suit is
a  petition  for  damages  arising  from  an  alleged violation of the Telephone
Consumer Protection Act.  The petition alleges that the company breached the Act
by  sending  unsolicited advertising faxes to plaintiffs and requests damages of
$12,000  and  such  other  relief  as the court deems proper.  Management denies
transmitting  any  faxes  to the plaintiffs and regards the lawsuit as frivolous
and opportunistic.  Should AMHR be formally served with this suit, it intends to
deny  all  charges  and  defend  itself  appropriately.

Management was notified via facsimile dated March 18, 2003, that they were to be
joined as defendants in a suit brought by AmeriSource Bergen Corporation against
NIPSI  Healthcare  of Houston, LP, Case No. 03-1972-A, filed in the county court
at law, Court Number One, Dallas County, Texas.  In the original complaint dated


                                        4
<PAGE>

February  19,  2003,  AmeriSource  sought  to recover $480,335.28 from defendant
NIPSI  Healthcare  of  Houston  for  failing  to  honor  a prior contract.  In a
supplemental  petition  dated  March 18, 2003, AmeriSource alleged that AMHR was
conducting  business  in Texas under the name NIPSI Pharmacy of Texas and sought
to  enjoin  any  transfer  of assets from NIPSI to AMHR.  On April 16, 2003, the
court  entered an interlocutory default judgment against NIPSI.  The court found
that  NIPSI  had  fraudulently transferred assets to AMHR to avoid the claims of
AmeriSource.  The  court  voided  the  transfer of assets from NIPSI to AMHR and
ordered  NIPSI  to  pay  AmeriSource $551,264.48 in actual damages, interest and
attorney's  fees  with interest accruing at 10% per annum.  As a result of these
proceedings,  the  December 2002 Asset Purchase Agreement between NIPSI and AMHR
was  nullified  by  act of law and the Company was released as a defendant.  The
possibility exists that other creditors may attempt to join AMHR as co-defendant
in  claims  against  NIPSI  based on the voided agreement.  However, AMHR is not
aware  of  any  other suits or claims against NIPSI and management believes AMHR
would  be  successful  in  defending  themselves  should  any such claims arise.

AMHR  received by facsimile a demand letter from National Institutional Pharmacy
Services,  LP,  the  general  partner  of NIPSI Healthcare of Houston, LP, dated
March  18,  2003.  The letter sought to rescind the December 2002 Asset Purchase
Agreement  between  NIPSI  and  the  Company  by  alleging  fraud  and demanding
$120,000.  AMHR  denies  it  has  any  obligation to NIPSI and regards the Asset
Purchase  Agreement  as  being  voided  by  the  April 16, 2003 default judgment
entered  against  NIPSI.  At  this  date,  AMHR  has not responded to the demand
letter  and  neither  party  has  initiated  formal  legal  proceedings.

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

On  June  17,  2002,  our  shareholders  approved  an  Agreement  and  Plan  of
Reorganization  between  New  Horizon  Education,  Inc.,  a Utah corporation and
American  Hospital  Resources  Inc.,  a Delaware corporation.  The Agreement and
Plan  of  Reorganization  was  approved  by written majority consent pursuant to
Section 16-10a-704 of the Utah Revised Business Corporation Act and Article V of
our  bylaws.  Under  the agreement, 3,196,873 common shares of New Horizon stock
were  exchanged  for  1,500  common  shares  of American Hospital's common stock
representing  all  the  issued  and  outstanding  stock  of  American  Hospital
Resources,  Inc.  As a result of this transaction, New Horizon acquired American
Hospital and the company's name was changed to American Hospital Resources, Inc.
The  transaction  was  reported  on  form  8-K  as filed with the Securities and
Exchange Commission on July 8, 2002 and a copy of the Agreement and an amendment
to  the  Agreement  was  attached  as  an exhibit to the form 8-K.  Total shares
eligible  to  vote  were  16,633,127.  The  number of votes cast and the matters
approved  are  as  follows:

<TABLE>
<CAPTION>


ITEM:                       VOTES FOR   VOTES AGAINST  ABSTENTIONS  BROKER NON-VOTES
<S>                         <C>         <C>            <C>          <C>

Approve Agreement and. . .  13,000,000            -0-          -0-               -0-
Plan of Reorganization

Amend the Articles of. . .  13,000,000            -0-          -0-               -0-
Incorporation to authorize
a class of 10,000,000
shares of preferred stock

Amend the Articles of. . .  13,000,000            -0-          -0-               -0-
Incorporation changing
the company's name to
American Hospital
Resources, Inc.
</TABLE>


                                        5
<PAGE>

                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.

Our  common  stock  is  listed  on the Over the Counter Bulletin Board under the
symbol AMHR.  At December 31, 2002 we had approximately 579 shareholders holding
7,614,000  shares  of common stock and 2,600,000 shares of preferred stock.  The
following  table  shows  the highs and lows of the closing bid and ask prices on
our  common  stock  for  2002  and  2001.

<TABLE>
<CAPTION>


YEAR                            CLOSING BID        CLOSING ASK

2002                        HIGH          LOW      HIGH   LOW
-----------------------  -----------  -----------  ----  -----
<S>                      <C>          <C>          <C>   <C>

First Quarter . . . . .          .45          .04   .75    .40

Second Quarter. . . . .         1.07          .45  1.10    .55

July 3 to July 28 . . .          .01         .005   .03    .01

July 31 to September 30          .77          .30   .85    .43
Fourth Quarter. . . . .          .68          .22   .72    .30

2001
-----------------------

First Quarter . . . . .          .03          .03     1  .9375

Second Quarter. . . . .          .03          .03     1    .93

Third Quarter . . . . .          .03          .03     1      1

Fourth Quarter. . . . .          .04          .03     1    .75
</TABLE>

The  above  quotations,  as  provided  by  the  National  Quotation Bureau, LLC,
represent  prices  between dealers and do not include retail markup, markdown or
commission.  In addition, these quotations do not represent actual transactions.

We  have not paid or declared any dividends since inception and do not intend to
declare  any  such  dividends  in  the  foreseeable  future.  Our ability to pay
dividends  is  subject  to  limitations  imposed  by  Utah  law.  Under  Section
16-10a-640 of the Utah Revised Business Corporation Act, dividends maybe paid to
the  extent that a corporation's assets exceed its liabilities and it is able to
pay  its  debts  as they become due in the usual course of business and does not
affect  preferential  shareholders  rights  upon  dissolution.

RECENT  SALES  OF  UNREGISTERED  SECURITIES.

On  December 31, 2002, AMHR issued 2,600,000 shares of its previously authorized
but  unissued  preferred stock in exchange for 13,000,000 shares of common stock
held  by  Phase  One  LLC.  The  13,000,000  shares  of  common  stock were then
cancelled.  The  preferred shares have 5 to 1 voting rights and may be converted


                                        6
<PAGE>

into  five  shares  of  common  stock.  The securities were offered in a private
transaction  without  registration  in  reliance  on  the  exemption provided by
Section  4(2)  of the Securities Act.  No broker was involved and no commissions
were  paid  in  the  transaction.

On  December  31,  2002  the Board of Directors adopted an Incentive Stock Bonus
Plan.  The  plan  allows the company to grant 5-year warrants to purchase shares
of  common stock to directors, senior management and certain key employees.  The
2003 stock bonus pool consists of 1,000,000 warrants to purchase common stock at
$.25  per  share.  The  warrants  are  issued  at the discretion of the Board of
Directors.  On  December  31,  2002,  AMHR  granted 300,000 warrants to purchase
common  stock  to  directors  and  consultants  as  payment  for  prior services
collectively  valued at $19,577 or approximately $.065 per warrant.  At the date
of  this  report,  no  warrants  have  been  exercised.

On  October  31,  2002,  the Company signed an Offer to Purchase with Coastalmed
Inc.  and Coastalmed of Panama City, Inc.  The offer called for AMHR to purchase
all  of  the  assets  of Coastalmed Inc. and Coastalmed of Panama City, Inc. for
$7,000,000  payable  as  $4,000,000  cash,  $1,375,000 as a five-year, 6.5% note
payable  with interest-only payment for the first 18 months and $1,625,000 as 6%
convertible  preferred  stock  with  dividends  payable quarterly.  The original
offer  expired  in  November of 2002.  Subsequent to the date of this report, in
January  of  2003,  AMHR signed a revised offer to purchase 100% of the stock of
Coastalmed  Inc.  and  Coastalmed of Panama City, Inc. for $8,400,000 payable as
$4,900,000 cash, $1,625,000 as a five-year, 6.5% note payable with interest-only
payment  for the first 18 months and $1,875,000 as series B preferred stock.  In
January  of  2003, AMHR issued 1,000,000 shares of common stock as an enticement
on  the  offer  to  purchase  the  Coastalmed stock.  The securities were issued
without  registration  in  reliance on the exemption provided by Section 4(2) of
the  Securities Act.  No broker was involved and no commissions were paid in the
transaction.

On November 1, 2002, the Company granted a stock option to Spice Island Products
Corp.  The  option allows Spice Island to purchase up to 2,000,000 shares of the
Company's  common  stock at $0.50 per share at any time between November 1, 2002
and  November  1,  2005.  The  securities  were offered in a private transaction
without  registration  in  reliance on the exemption provided by Section 4(2) of
the  Securities Act.  No broker was involved and no commissions were paid in the
transaction.  No  shares  have  been purchased under the option as of the filing
date  of  this  report.

On  October 31, 2002, the Company issued 200,000 shares of previously authorized
but  unissued  restricted common stock for cash of $50,000, or $.25 per share to
two  accredited  investors.  The  securities  were sold in a private transaction
without  registration  in  reliance on the exemption provided by Section 4(2) of
the  Securities Act.  The investors had pre-existing relationships with American
Hospital  Resources and had access to all material information pertaining to the
Company's  financial  condition.  No broker was involved and no commissions were
paid  in  the  transaction.

In  May  of  2002  we  issued 500,000 common shares to an accredited investor to
convert  $40,000 in notes and accrued interest of $789. The securities were sold
in  a  private  transaction  without  registration  in reliance on the exemption
provided by Section 4(2) of the Securities Act.  The investor had a pre-existing
relationship  with  American  Hospital  Resources and had access to all material
information  pertaining  to  the  Company's  financial condition.  No broker was
involved  and  no  commissions  were  paid  in  the  transaction.

Subsequent  to  the date of this report, in February of 2003, AMHR issued 40,000
shares  of  previously  authorized  but  unissued  common stock to an accredited
investor  for  $10,000 or $.25 per share.  The securities were sold in a private
transaction  without  registration  in  reliance  on  the  exemption provided by
Section  4(2)  of  the  Securities  Act.  The  investor  had  a  pre-existing


                                        7
<PAGE>

relationship  with  American  Hospital  Resources and had access to all material
information  pertaining  to  the  Company's  financial condition.  No broker was
involved  and  no  commissions  were  paid  in  the  transaction.

Subsequent  to the date of this report, in February 2003, the Board of Directors
authorized  the  issuance  of 720,000 shares of common stock to four individuals
for  legal  and consulting services.  As of April 18, 2003, none of these shares
have  been  issued.  The Company intends to register the transaction on Form S-8
when  the  shares  are  issued.

Subsequent  to  the  date  of  this report, in April of 2003, AMHR issued 47,000
shares  of  previously  authorized but unissued preferred stock to an accredited
investor  for  cash of $23,500 or $.50 per share.  The securities were sold in a
private  transaction  without registration in reliance on the exemption provided
by  Section  4(2)  of  the  Securities  Act.  The  investor  had  a pre-existing
relationship  with  American  Hospital  Resources and had access to all material
information  pertaining  to  the  Company's  financial condition.  No broker was
involved  and  no  commissions  were  paid  in  the  transaction.

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

The  Management's discussion and analysis should be read in conjunction with the
audited  consolidated  financial statements appearing at the end of this report.
Consolidated  financial  data from 2002 reflects the status of the company after
the  merger between New Horizon Education, Inc. and American Hospital Resources,
Inc.  The  financial  data  from  2001  is  derived  from  the audited financial
statement  of  the  predecessor  company,  New  Horizon  Education,  Inc.

RESULTS  OF  OPERATIONS FOR THE PERIODS ENDED DECEMBER 31, 2002 AND DECEMBER 31,
2001

Revenues  for  the  year  ended  December  31,  2002 were $52,700 compared to no
revenue  during  the  year ended December 31, 2001.  All revenue in 2002 derived
from one source.  General and administrative expenses were $1,292,931 during the
year  ended  December 31, 2002.  We also recorded expenses of $5,957 relating to
our  attempt  to  acquire  NIPSI  and  interest  expense of $1,122.  General and
administrative expenses were $57,727 for the period ended December 31, 2001 with
interest  expense  of  $948.  Higher general and administrative expenses in 2002
were  the  result  of  several  factors.  In  2001,  general  and administrative
expenses  consisted  mainly  of  salaries, accounting and legal costs associated
with  preparing  and  filing  our public reports.  By comparison, in 2002 we had
additional  legal  and  auditing  costs  relating  to  the  acquisition  of  our
subsidiary in June of 2002 and our attempted acquisition of NIPSI in December of
2002.  The  bulk  of  general  and  administrative expenses in 2002 consisted of
services  rendered  by  consultants,  subcontractors,  officers  and  directors.
Services  totaling  $1,070,477  were paid by issuing stock, options and warrants
representing  approximately 83% of general and administrative expenses.  We also
recorded  $102,300  in bad debt expense.  All bad debts consisted of payment due
on  commissions  and  consulting agreements with Parkview Hospital.  Although we
anticipate  recovering  these  accounts,  Parkview  is  currently  undergoing
bankruptcy reorganization and collection of the receivables is uncertain at this
point.  In  addition,  we advanced $15,000 to NIPSI before the rescission of the
December  2002  Agreement.  We  collected  the  advance from NIPSI in January of
2003.

As  a result of these factors, we realized a net loss of $1,247,310 for the year
ended  December  31,  2002  compared to a net loss of $58,675 for the year ended
December  31,  2001.

Net  cash  provided by operations was $48,774 during the year ended December 31,
2002  compared  to  net  cash  used  by operations of $42,829 for the year ended
December  31,  2001.  Net  cash used by investing activities was $152,575 during
the  year ended December 31, 2002 with no comparable investing activities during
the  year  ending  December 31, 2001.  Net cash provided by financing activities
was  $110,500  for  the year ended December 31, 2002 compared to $35,000 for the
year  ended  December  31,  2001.


                                        8
<PAGE>

LIQUIDITY  AND  CAPITAL  RESOURCES

At  December  31,  2002  we had total assets of $1,173,342.  Current assets were
$51,854 consisting of $6,779 in cash, $15,000 in an advance and prepaid expenses
of  $30,075.  We  also  had  property  and equipment of $1,743.  Other assets at
December  31,  2002  consisted of $60,321 in goodwill and $1,059,424 in deferred
stock  offering  costs.  Assets  at  December 31, 2001 consisted of $80 in cash.

Current  liabilities  at  December  31,  2002  totaled  $1,198,090 consisting of
$1,088,150  in  accounts  payable,  and  $109,940 in accrued expenses.  Accounts
payable consist mainly of commitment fees and finders' fees relating to securing
a  $10,000,000  equity  line  of credit with Cornell Capital LP.  Liabilities at
December  31,  2001  totaled  $54,534 consisting of $11,086 in accounts payable,
$948  in  accrued  expenses,  $22,500  payable to a related party and $20,000 in
notes  payable.  Our auditors have expressed substantial doubt about our ability
to  continue  as  a  going  concern  due  in  part  to the fact that our current
liabilities  exceed  our  current  assets.

We  anticipate  that  our  operating expenses for the next twelve months will be
approximately  $120,000  consisting  mainly of salaries and consulting fees.  We
will  also  have  legal  and auditing expenses relating to our public reports as
well  as  office  rental  and other expenses.  Management believes that our cash
needs  can  be  met  with  cash on hand, continuing operations, anticipated cash
collections  from  accounts  receivable  and  short  and  long-term investments.
However, we have a number of commitments and contingencies that could impact our
liquidity  needs.  In  addition,  we  are  currently  negotiating to acquire the
assets  of  two  health  care  related  companies.  Our capital requirements may
increase dramatically if these proposed transactions are consummated.  Should it
become  necessary  to  raise  additional capital, we may consider securing loans
from  officers  and  directors,  selling  additional stock or entering into debt
financing.

Our  operating  plan  is  to maintain current operations and to continue seeking
other  healthcare  companies for potential acquisition, management or consulting
opportunities.  We  also  hope  to  reduce  liabilities  and  bring  current our
outstanding  debts.  Other than as discussed in this report, we have no material
commitments  for  capital  expenditures  for  the  next  twelve  months.

ITEM  7.  FINANCIAL  STATEMENTS.

The  financial  statements  appear  at the end of this report beginning with the
Index  to  Financial  Statements  on  page  17.

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

None.


                                    PART III

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

The  following  table  sets  forth  as  of December 31, 2002, the name, age, and
position  of each executive officer and director and the term of office for each
director.


                                        9
<PAGE>

<TABLE>
<CAPTION>


NAME                 AGE  POSITION                                     SINCE
-------------------
<S>                  <C>  <C>                                          <C>

Christopher Wheeler   55  Director, President, Chief Executive Office  March 2002
                          r and Chief Financial Officer

Antione Gedeon. . .   57  Director and Treasurer                       March 2002

Mark Buck . . . . .   58  Director and Secretary                       March 2002
</TABLE>

All  officers  hold  their positions at the will of the Board of Directors.  All
directors  hold  their positions for one year or until their successors are duly
elected  and  qualified.

The  following  is  a  brief  biography  of  the  officers  and  directors.

CHRISTOPHER  A. WHEELER, CEO, CFO, PRESIDENT AND DIRECTOR.  Mr. Wheeler has many
years  of  ownership  and  operating  experience  in the acute care hospital and
health  care  finance  fields.  He  has  been the previous owner and operator of
three  acute  care hospitals in California. Since 1998, Mr. Wheeler has been the
Founder  and Managing Partner of two investment banking firms, Sandpiper Capital
and Gaelic Capital Group.  These sister companies provide diverse management and
financial  consulting  services  to a variety of industry segments including the
healthcare  and  food service industries.  In particular, these services include
crisis  management,  hospital  management,  and  strategic planning services for
pharmacy  outsourcing  and  materials  management  firms

ANTIONE  GEDEON,  TREASURER  AND DIRECTOR.  Mr. Gedeon speaks four languages and
has  many  years  of  experience  in  the  travel  industry.  He is currently an
instructor  with  Travel  University  International in Honolulu, Hawaii where he
teaches advanced courses in travel industry management, international trade, and
hotel  management.  He  has  also  worked as a consultant for Private Investment
Group  since  1999.  From  1995  to  1998 Mr. Gedeon was the President and Chief
Operating Officer of Mayan Resorts Development Corp. in Belize where he presided
over  the  master plan for Salt Creek Estate, a 31,000 acre beachfront property.

MARK  BUCK, SECRETARY AND DIRECTOR.  Mr. Buck is a commercial real estate broker
specializing  in  sales  and  leasing.  He has worked for Commercial Real Estate
Services  in  Honolulu,  Hawaii  since  1986  as Vice President of Marketing and
Sales.  Mr.  Buck  is  also the controlling partner of Phase One, LLC.  Mr. Buck
has  been  an  owner  and  partner in three small businesses that he later sold.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

Based  solely  upon  a review of Forms 3, 4 and 5 furnished, we are not aware of
any  person who at any time during the fiscal year ended December 31, 2002 was a
director,  officer,  or  beneficial owner of more than ten percent of the Common
Stock  of  the  Company,  and  who  failed  to  file, on a timely basis, reports
required  by  Section  16(a)  of the Securities Exchange Act of 1934 during such
fiscal  year.

ITEM  10.  EXECUTIVE  COMPENSATION

We  have  no  formal  arrangements  for  the  remuneration  of  our officers and
directors,  except that they will receive reimbursement for actual, demonstrable
out-of-pocket  expenses,  including travel expenses, if any, made on our behalf.
We  are  currently  negotiating  an  employment agreement with our president and
executive  officer,  Mr.  Christopher  Wheeler, however, the terms have not been
finalized  at  the  date  of  this  report.


                                       10
<PAGE>

<TABLE>
<CAPTION>


                           SUMMARY COMPENSATION TABLE

                                                                 OTHER ANNUAL
NAME AND PRINCIPAL POSITION         YEAR  SALARY ($)  BONUS ($)  COMPENSATION
<S>                                 <C>   <C>         <C>        <C>

Christopher Wheeler. . . . . . . .  2002  67,500 (1)        -0-            (2)
  Current Chief Executive Officer,  2001        -0-         -0-           -0-
  Chief Financial Officer and. . .  2000        -0-         -0-           -0-
  Director

Antione Gedeon . . . . . . . . . .  2002        -0-         -0-            (3)
  Current Director and Treasurer .  2001        -0-         -0-           -0-
                                    2000        -0-         -0-           -0-

Mark S. Buck . . . . . . . . . . .  2002        -0-         -0-            (4)
  Current Director and Secretary .  2001        -0-         -0-           -0-
                                    2000        -0-         -0-           -0-

Steven L. White. . . . . . . . . .  2002     500 (5)        -0-            (6)
  Former Chief Executive Officer .  2001        -0-         -0-           -0-
  And Director . . . . . . . . . .  2000     55,775         -0-           -0-

Angela White . . . . . . . . . . .  2002     500 (5)        -0-           -0-
  Former Director. . . . . . . . .  2001        -0-         -0-           -0-
                                    2000        -0-         -0-           -0-

Laura Jean Hullinger . . . . . . .  2002     500 (5)        -0-           -0-
  Former Director. . . . . . . . .  2001        -0-         -0-           -0-
                                    2000        -0-         -0-           -0-
</TABLE>

(1)  Mr. Wheeler has also accrued approximately $120,000 in salary payable. This
     includes  amounts  accrued  prior  to the Agreement between New Horizon and
     AMHR.

(2)  In December of 2002, Mr. Wheeler received warrants to purchase up to 75,000
     shares  of  common  stock  for $.25 per share under the company's Incentive
     Stock  Bonus  Plan  as  additional  compensation  for his services as Chief
     Executive  Officer.

(3)  In  December of 2002, Mr. Gedeon received warrants to purchase up to 75,000
     shares  of  common  stock  for $.25 per share under the company's Incentive
     Stock  Bonus  Plan  as  compensation  for  his  services as chief financial
     officer. Mr. Gedeon also received an option to purchase up to 10,000 shares
     for  $.05  per share in March of 2002. The option expires in March of 2004.
     At  the  date  of  this  report,  Mr.  Gedeon has not exercised the option.

(4)  In  December  of 2002, Mr. Buck received warrants to purchase up to 125,000
     shares  of  common  stock  for $.25 per share under the company's Incentive
     Stock  Bonus Plan as compensation for his services as officer and director.
     Mr.  Buck  also received an option to purchase up to 10,000 shares for $.05
     per  share  in  March  of 2002. The option expires in March of 2004. At the
     date  of  this  report,  Mr.  Buck  has  not  exercised  the  option.

(5)  In  2002 our former Directors received a one-time payment of $500 for their
     prior  services  as  board  members.


                                       11
<PAGE>

(6)  In  March  of 2002 we issued 1,100,000 shares of common stock to our former
     president,  Steven  White,  as  compensation for accrued salary of $22,000.

EMPLOYMENT  CONTRACTS,  TERMINATION  OF  EMPLOYMENT  AND  CHANGE  IN  CONTROL

There  are  no  compensatory  plans  or  arrangements,  including payments to be
received,  with  respect to any person which would in any way result in payments
to any person because of employment with our company or its subsidiaries, or any
change  in  control of our company, or a change in the person's responsibilities
following  a  change  in  control  of  our  company.

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

At  December  31,  2002,  there were 7,614,000 shares of common stock issued and
outstanding  and  2,600,000  shares  of  series  A  preferred  stock  issued and
outstanding.  Each share of preferred stock has the voting rights of five shares
of  common  stock  and may be converted to common stock on a 1 to 5 basis.  As a
result, there were 20,614,000 voting shares at December 31, 2002.  The following
table  sets  equivalent  voting  shares  based  on  the number and percentage of
outstanding  common  and preferred stock and which, according to the information
supplied  to  us,  were beneficially owned by (i) each person who is currently a
director  of  AMHR, (ii) each executive officer, (iii) all current directors and
executive officers of AMHR as a group and (iv) each person who, to our knowledge
is  the  beneficial  owner  of  more than 5% of the outstanding common stock and
preferred  stock.  Unless  otherwise  indicated,  the persons named in the table
have  sole  voting and dispositive power with respect to all shares beneficially
owned,  subject  to  community  property  laws  where  applicable.

<TABLE>
<CAPTION>


NAME AND ADDRESS OF          TITLE OF CLASS  AMOUNT AND NATURE OF   PERCENTAGE OF
BENEFICIAL OWNER (1)                         BENEFICIAL OWNERSHIP       CLASS
<S>                          <C>             <C>                    <C>

Christopher Wheeler (2) . .  Common                 13,975,000 (3)          67.42%
  1912 West Bay Crest
  Santa Ana, CA 92704

Mark S. Buck (2). . . . . .  Common                    535,000 (4)           2.60%
  1912 West Bay Crest
  Santa Ana, CA 92704

Antione Gedeon (2). . . . .  Common                     85,000 (5)           0.04%
  8 East Broadway,
  609 Judge Building
  Salt Lake City, UT 84111

Steven L. White . . . . . .  Common                     1,100,000            5.33%
  386 North 210 East
  Mapleton, UT 84664


Officers, Directors and . .  Common                    14,595,000           70.80%
Nominees as a Group:
  Three People
</TABLE>


                                       12
<PAGE>

(1)  For  purposes  of  this  table,  a beneficial owner is one who, directly or
     indirectly,  has  or shares with others (a) the power to vote or direct the
     voting  of the Voting Stock (b) investment power with respect to the Voting
     Stock  which includes the power to dispose or direct the disposition of the
     Voting  Stock.

(2)  Officer  and/or  director.

(3)  Mr.  Wheeler  holds  900,000 shares of common stock and 2,600,000 shares of
     preferred  stock  with 5 to 1 voting rights. The preferred shares have been
     accounted  for  as  13,000,000  common  shares  in the beneficial ownership
     table. Mr. Wheeler also holds a warrant to purchase up to 75,000 additional
     common  shares.

(4)  Phase  One  LLC owns 400,000 shares. Mr. Buck is the controlling partner of
     Phase  One  LLC  and is thus considered the beneficial owner of the 400,000
     shares  held  by  Phase One, LLC. Mr. Buck also holds a warrant for 125,000
     shares  of  common  stock and an option to purchase 10,000 shares of common
     stock.

(5)  Mr. Gedeon does not own any AMHR common stock but holds a warrant for up to
     75,000  shares  of  common stock and an option to purchase 10,000 shares of
     common  stock.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

On January 25, 2002, AMHR signed a $30,000 convertible note payable to Phase One
LLC.  The  note  was  due  on  January  25, 2003 and accrued interest at 10% per
annum.  On  February  27,  2002, the note was converted into 3,000,000 shares of
common  stock  and no interest was recognized on the note.  Also on February 27,
2002,  the  Company issued 8,000,0000 shares of common stock to Phase One LLC to
convert $50,000 of notes payable and for a $30,000 note receivable.  As a result
of  these  transactions,  Phase  One  LLC  gained control of the company.  Total
consideration amounted to $110,000 or $.01 per share.  One of our directors, Mr.
Mark  Buck,  is  the  controlling  member  of  Phase  One  LLC.

In  March  of  2002  we  issued  1,100,000  shares  to  Steven White, our former
president  as  compensation  for  accrued  salary  of  $20,000.

In April of 2002 we issued 2,000,000 shares of common stock to Phase One LLC for
$20,000 in cash.  One of our directors, Mr. Mark Buck, is the controlling member
of  Phase  One  LLC.

On  September  15,  2002,  AMHR signed a Purchase and Sale Agreement with Gaelic
Capital Group, an entity controlled by our Chief Executive Officer and director,
Christopher  Wheeler.  Under  the  Agreement,  AMHR  paid Gaelic $94,500 for the
rights  to  receive  6%  of  the sale price of the peripheral assets of Parkview
Community  Hospital  Medical  Center.  During  the year ended December 31, 2002,
AMHR  received  revenues  of  $123,600  under  the  Agreement.

In  December  of 2002, Phase One LLC exchanged 13,000,000 shares of common stock
for  2,600,000 shares of preferred stock.  The 13,000,000 shares of common stock
were  then cancelled.  Phase One LLC then sold the 2,600,000 shares of preferred
stock  to  our  president,  Christopher Wheeler for cash and other consideration
totaling  $1,340,000  or  approximately  $.52  per  share.  As  a result of this
transaction  Mr.  Wheeler  gained  control  of  67%  of  our  voting  stock.

On  December  31,  2002  the Board of Directors adopted an Incentive Stock Bonus
Plan.  The  plan  allows the company to grant 5-year warrants to purchase shares
of  common stock for $.25 per share.  On December 31, 2002, AMHR granted 300,000
warrants  to  purchase  common stock to directors and consultants as payment for
prior  services  collectively  valued  at  $19,577 and for future services to be
rendered.  At  the  date  of  this  report,  no  warrants  have  been exercised.


                                       13
<PAGE>

From  January  2002 through July of 2002, we rented office space in Springville,
Utah  from  our  former  president  for  $100  per month.  In October of 2002 we
relocated  our corporate headquarters to Santa Ana, California and began renting
office  space  from  our  current  president  for $500 per month.  Our office is
located  at  1912  West Bay Crest in Santa Ana, California.  Total rents paid in
2002  were  $2,100.

SUBSEQUENT  EVENT

In  February 2003, we retained Douglas A. Jackson to negotiate a line of credit.
Mr.  Jackson  will  receive $5,000 plus 5% of any proceeds we receive.  In March
2003  we  retained Mr. Jackson to negotiate a $6,000,000 loan. We have agreed to
pay  Mr.  Jackson  a  fee  of  $12,500  plus  5%  of  loan  proceeds.

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

REPORTS  ON  FORM  8-K

The  following reports were filed on Form 8-K during the last ninety days of the
period  covered  by  this  report:

<TABLE>
<CAPTION>


DATE OF REPORT     ITEM                           EVENT REPORTED
<S>                <C>                            <C>

December 30, 2002  Item 2. Acquisition of Assets  Acquisition of NIPSI Healthcare of Houston LP
                                                  and NIPSI of Houston, Inc. by American
                                                  Hospital Resources, Inc. (1)

                   Item 7. Financial Statements
</TABLE>

(1)  In  December  of  2002  we finalized an Asset Purchase Agreement with NIPSI
     Healthcare  of  Houston, LP and its general partner as reported on Form 8-K
     dated  December 30, 2002. The agreement was subsequently voided in April of
     2003  after  a  Texas  State  court  found  that  NIPSI  had  fraudulently
     transferred  the  assets  to  AMHR.

<TABLE>
<CAPTION>


EXHIBITS:

EXHIBIT NUMBER  TITLE                                                       LOCATION
<C>             <S>                                                         <C>

          99.1  Certification of Chief Executive Officer and Chief . . . .  Attached
                Financial Officer Pursuant to Section 906 of the Sarbanes-
                Oxley Act of 2002

          99.2  Certification of Chief Executive Officer and Chief . . . .  Attached
                Financial Officer Pursuant to Section 302 of the Sarbanes-
                Oxley Act of 2002

          99.3  American Hospital Resources Corporate Code of Ethics . . .  Attached
</TABLE>


                                       14
<PAGE>

ITEM  14.  CONTROLS  AND  PROCEDURES

Within  the  90-day  period  prior  to the date of this report, we evaluated the
effectiveness  and  operation of our disclosure controls and procedures pursuant
to  Rule  13a-14  of  the  Securities  Exchange  Act  of  1934.  Based  on  that
evaluation,  our  Chief  Executive  Officer  and  Chief  Financial  Officer have
concluded that our disclosure controls and procedures are effective.  There have
been  no  significant  changes  in internal controls or other factors that could
significantly affect internal controls subsequent to the date we carried out our
evaluation.  To  demonstrate  our commitment to maintaining effective disclosure
controls  and procedures, we have recently adopted a Code of Ethics and Business
Conduct.  In  pertinent  part, the Code authorizes the establishment of an audit
committee  to  oversee  the  effectiveness  of  our  disclosure  controls  and
procedures.  A  copy  of  our  Code  is  attached  as an exhibit to this report.


                                       15
<PAGE>

                                   SIGNATURES

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

                                        AMERICAN  HOSPITAL  RESOURCES,  INC.



Date:  April  24,  2003                 /s/Christopher  Wheeler,
                                        -------------------------
                                        Christopher  Wheeler
                                        Chief  Executive  Officer
                                        Chief  Financial  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.




Date:  April  24,  2003                 /s/Christopher  Wheeler
                                        -----------------------
                                        Christopher  Wheeler
                                        Director



Date:  April  24,  2003                 /s/Mark  Buck
                                        -------------
                                        Mark  Buck
                                        Director



Date:  April  24,  2003                 /s/Antione  Gedeon
                                        ------------------
                                        Antione  Gedeon
                                        Director


                                       16
<PAGE>

<TABLE>
<CAPTION>


                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY



                                    CONTENTS

                                                                    PAGE
                                                                  -------
<S>                                                               <C>
  -    Independent Auditors' Report . . . . . . . . . . . . . . .     18


  -    Consolidated Balance Sheet, December 31, 2002. . . . . . .  19-20


  -    Consolidated Statements of Operations, for the years ended
       December 31, 2002 and 2001 . . . . . . . . . . . . . . . .     21


  -    Consolidated Statement of Stockholders' Equity (Deficit),
     for the years ended December 31, 2002 and 2001 . . . . . . .  22-24


  -    Consolidated Statements of Cash Flows, for the years ended
         December 31, 2002 and 2001 . . . . . . . . . . . . . . .  25-27


  -    Notes to Consolidated Financial Statements . . . . . . . .  28-45
</TABLE>


                                       17
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


Board  of  Directors
AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY
Santa  Ana,  California

We have audited the accompanying consolidated balance sheet of American Hospital
Resources,  Inc.  and  Subsidiary  as  of  December  31,  2002,  and the related
consolidated  statements  of operations, stockholders' equity (deficit) and cash
flows  for  the  years  ended  December  31,  2002  and  2001.  These  financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

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

In  our  opinion,  the  consolidated  financial statements audited by us present
fairly,  in  all  material  respects,  the  consolidated  financial  position of
American  Hospital  Resources,  Inc. and Subsidiary as of December 31, 2002, and
the  results  of  their  operations  and  their  cash  flows for the years ended
December  31,  2002  and  2001, in conformity with generally accepted accounting
principles  in  the  United  States  of  America.

The  accompanying  financial  statements have been prepared assuming the Company
will  continue  as  a  going  concern.  As discussed in Note 12 to the financial
statements,  the Company has just recently commenced operations and all of their
revenues  have  been  from  one  customer.  Further,  the  Company  has  current
liabilities  in excess of current assets.  These factors raise substantial doubt
about  the  ability of the Company to continue as a going concern.  Management's
plans  in regards to these matters are also described in Note 12.  The financial
statements  do not include any adjustments that might result from the outcome of
these  uncertainties.



PRITCHETT,  SILER  &  HARDY,  P.C.
-----------------------------------

March  5,  2003
(except  for  Notes  2,  5,  15  and 17, as to which the date is April 17, 2003)
Salt  Lake  City,  Utah


                                       18
<PAGE>

<TABLE>
<CAPTION>


      AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                 CONSOLIDATED BALANCE SHEET


                          ASSETS


                                         December 31,
                                             2002
                                         -------------
<S>                                      <C>
CURRENT ASSETS:
  Cash. . . . . . . . . . . . . . . . .  $       6,779
  Accounts receivable, net of allowance
    for doubtful accounts of $102,300 .              -
  Advance to NIPSI. . . . . . . . . . .         15,000
  Prepaid expense . . . . . . . . . . .         30,075
                                         -------------
    Total Current Assets. . . . . . . .         51,854
                                         -------------

PROPERTY AND EQUIPMENT, net . . . . . .          1,743
                                         -------------

OTHER ASSETS:
  Goodwill. . . . . . . . . . . . . . .         60,321
  Deferred stock offering costs . . . .      1,059,424
                                         -------------
    Total Other Assets. . . . . . . . .      1,119,745
                                         -------------

                                         $   1,173,342
                                         =============
</TABLE>

                                   [Continued]


                                       19
<PAGE>

<TABLE>
<CAPTION>


      AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                   CONSOLIDATED BALANCE SHEET

                           [CONTINUED]


         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


                                                 December 31,
                                                     2002
                                                --------------
<S>                                             <C>
CURRENT LIABILITIES:
  Accounts payable . . . . . . . . . . . . . .  $   1,088,150
  Accrued expenses . . . . . . . . . . . . . .        109,940
                                                --------------
      Total Current Liabilities. . . . . . . .      1,198,090

COMMITMENTS AND CONTINGENCIES [See Note 15]. .              -
                                                --------------
      Total Liabilities. . . . . . . . . . . .      1,198,090
                                                --------------

STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred stock, no par value,
    10,000,000 shares authorized:
    Series A convertible preferred stock,
      2,600,000 shares issued and outstanding.      3,900,000
    Series B convertible preferred stock,
      no shares issued and outstanding . . . .              -
  Common stock, no par value,
    100,000,000 shares authorized,
    7,614,000 shares issued and outstanding. .      3,759,522
  Additional paid-in capital . . . . . . . . .        955,496
  Retained earnings (deficit). . . . . . . . .     (8,639,766)
                                                --------------
    Total Stockholders' Equity (Deficit) . . .        (24,748)
                                                --------------
                                                $   1,173,342
                                                ==============
</TABLE>

    The accompanying notes are an integral part of this consolidated financial
                                   statement.


                                       20
<PAGE>

<TABLE>
<CAPTION>


            AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                             For  the  Year  Ended
                                                 December  31,
                                           ------------------------
                                               2002         2001
                                           -------------  ---------
<S>                                        <C>            <C>
REVENUES. . . . . . . . . . . . . . . . .  $     52,700   $      -
                                           -------------  ---------

EXPENSES:
  General and administrative. . . . . . .     1,292,931     57,727
  Costs of unsuccessful NIPSI acquisition         5,957          -
                                           -------------  ---------
    Total Expenses. . . . . . . . . . . .     1,298,888     57,727
                                           -------------  ---------

LOSS BEFORE OTHER EXPENSE . . . . . . . .    (1,246,188)   (57,727)
                                           -------------  ---------

OTHER EXPENSE:
    Interest expense. . . . . . . . . . .        (1,122)      (948)
                                           -------------  ---------
    Total Other Expense . . . . . . . . .        (1,122)      (948)
                                           -------------  ---------

LOSS BEFORE INCOME TAXES. . . . . . . . .    (1,247,310)   (58,675)

CURRENT TAX EXPENSE . . . . . . . . . . .             -          -

DEFERRED TAX EXPENSE. . . . . . . . . . .             -          -
                                           -------------  ---------

NET LOSS. . . . . . . . . . . . . . . . .  $ (1,247,310)  $(58,675)
                                           =============  =========


LOSS PER COMMON SHARE . . . . . . . . . .  $       (.08)  $   (.02)
                                           =============  =========
</TABLE>

    The accompanying notes are an integral part of this consolidated financial
                                   statement.


                                       21
<PAGE>

<TABLE>
<CAPTION>


                                      AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                                     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                                          FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                       Series  A               Series  B                                  Additional   Retained
                                    Preferred  Stock       Preferred  Stock          Common  Stock         Paid-in     Earnings
                                  ---------------------  ---------------------  ------------------------
                                   Shares      Amount     Shares      Amount      Shares       Amount      Capital     (Deficit)
                                  ---------  ----------  ---------  ----------  -----------  -----------  ----------  ------------
<S>                               <C>        <C>         <C>        <C>         <C>          <C>          <C>         <C>
BALANCE, December 31, 2000 . . .          -  $        -          -  $        -   2,906,863   $7,269,483   $   53,519  $(7,333,781)

Issued 750,000 shares of
  common stock for cash of
  15,000, or $.02 per share,
  February 2001. . . . . . . . .          -           -          -           -     750,000       15,000            -            -

Net loss for year ended
  December 31, 2001. . . . . . .          -           -          -           -           -            -            -      (58,675)
                                  ---------  ----------  ---------  ----------  -----------  -----------  ----------  ------------
BALANCE, December 31, 2001 . . .          -           -          -           -   3,656,863    7,284,483       53,519   (7,392,456)

Issued 500,000 shares of
  common stock to convert debt
  of $21,281, or $.04256 per
  share, February 2002 . . . . .          -           -          -           -     500,000       21,281            -            -

Issued 450,000 shares of
  common stock for services
  related to the acquisition of
  AHR Subsidiary valued at
  5,000, or $.0111 per share,
  February 2002. . . . . . . . .          -           -          -           -     450,000        5,000            -            -

Issued 125,000 shares of
  common stock for services
  related to the acquisition of
  AHR Subsidiary valued at
  2,500, or $.02 per share,
  February 2002. . . . . . . . .          -           -          -           -     125,000        2,500            -            -

Issued 11,000,000 shares of
  common stock to convert debt
  of $110,000, or $.01 per share,
  February 2002. . . . . . . . .          -           -          -           -  11,000,000      110,000            -            -

Repurchased and cancelled
  3,198,736 shares of common
  stock for cash of $79,500, or
  $.02485 per share, February
  and March 2002 . . . . . . . .          -           -          -           -  (3,198,736)     (79,500)           -            -
</TABLE>

                                   [Continued]

                                       22
<PAGE>

<TABLE>
<CAPTION>


                                      AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                                     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                                          FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                            [CONTINUED]


                                       Series  A               Series  B                                  Additional   Retained
                                    Preferred  Stock       Preferred  Stock          Common  Stock         Paid-in     Earnings
                                  ---------------------  ---------------------  ------------------------
                                   Shares      Amount     Shares      Amount      Shares       Amount      Capital     (Deficit)
                                  ---------  ----------  ---------  ----------  -----------  -----------  ----------  ------------
<S>                               <C>        <C>         <C>        <C>         <C>          <C>          <C>         <C>
Granted 20,000 options to
  purchase common stock,
  March 2002. . . . . . . . . . .         -           -          -           -            -            -           -           -

Issued 1,600,000 shares of
  common stock for services of
  32,000, or $.02 per share,
  March 2002. . . . . . . . . . .         -           -          -           -     1,600,000      32,000           -           -

Issued 2,000,000 shares of
  common stock for cash of
  20,000, or $.01 per share,
  April 2002. . . . . . . . . . .         -           -          -           -     2,000,000      20,000           -           -

Issued 500,000 shares of
  common stock to convert debt
  of $40,789, or $.081578 per
  share, May 2002 . . . . . . . .         -           -          -           -       500,000      40,789           -           -

Issued 3,196,873 shares of
  common stock to acquire
  AHR Subsidiary, June 2002 . . .         -           -          -           -     3,196,873      31,969           -           -

Issued 584,000 shares of
  common stock for services of
  146,000, or $.25 per share,
  August 2002 . . . . . . . . . .         -           -          -           -       584,000     146,000           -           -

Issued 200,000 shares of
  common stock for cash of
  50,000, or $.25 per share,
  net of offering costs of $5,000,
  October 2002. . . . . . . . . .         -           -          -           -       200,000      45,000           -           -

Granted 2,000,000 options to
  purchase common stock,
  November 2002 . . . . . . . . .         -           -          -           -            -           -       882,400          -
</TABLE>

                                   [Continued]

                                       23
<PAGE>

<TABLE>
<CAPTION>


                                      AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                                    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                                         FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                           [CONTINUED]

                                     Series  A              Series  B                                   Additional   Retained
                                  Preferred  Stock       Preferred  Stock          Common  Stock         Paid-in     Earnings
                               ---------------------  --------------------  --------------------------
                                Shares      Amount     Shares     Amount       Shares        Amount      Capital     (Deficit)
                               ---------  ----------  ---------  ---------  ------------  ------------  ----------  ------------
<S>                            <C>        <C>         <C>        <C>        <C>           <C>           <C>         <C>
Granted 300,000 warrants to
  purchase common stock,
  December 2002 . . . . . . .          -           -          -          -            -             -       19,577            -

Issued 2,600,000 shares of
  Series A preferred stock in
  exchange for 13,000,000
  shares of common stock,
  December 2002 . . . . . . .  2,600,000   3,900,000          -          -  (13,000,000)   (3,900,000)           -            -

Net loss for year ended
  December 31, 2002 . . . . .          -           -          -          -            -             -            -   (1,247,310)
                               ---------  ----------  ---------  ---------  ------------  ------------  ----------  ------------
BALANCE, December 31, 2002. .  2,600,000  $3,900,000          -          -    7,614,000   $ 3,759,522   $  955,496  $(8,639,766)
                               =========  ==========  =========  =========  ============  ============  ==========  ============
</TABLE>

    The accompanying notes are an integral part of this consolidated financial
                                   statement.


                                       24
<PAGE>

<TABLE>
<CAPTION>


              AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                           For  the  Year  Ended
                                                               December  31,
                                                          ------------------------
                                                              2002         2001
                                                          -------------  ---------
<S>                                                       <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss . . . . . . . . . . . . . . . . . . . . . . .  $ (1,247,310)  $(58,675)
  Adjustments to reconcile net loss to net cash used
    by operating activities:
    Bad debt expense . . . . . . . . . . . . . . . . . .       102,300          -
    Depreciation . . . . . . . . . . . . . . . . . . . .           205          -
    Non-cash services for common stock . . . . . . . . .       116,000          -
    Non-cash services for common stock options . . . . .       882,400          -
    Non-cash services for common stock warrants. . . . .        19,577          -
    Changes in assets and liabilities:
      Decrease in accounts receivable. . . . . . . . . .       109,440          -
      (Increase) in prepaid expense. . . . . . . . . . .           (75)         -
      Increase (decrease) in accounts payable. . . . . .        18,856     (3,198)
      Increase (decrease) in accrued expenses. . . . . .        54,546     (3,456)
      Increase (decrease) in related party payable . . .        (7,165)    22,500
                                                          -------------  ---------
        Net Cash Provided (Used) by Operating Activities        48,774    (42,829)
                                                          -------------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Payments for accounts receivable . . . . . . . . . . .       (94,500)         -
  Payments for advance to NIPSI. . . . . . . . . . . . .       (50,000)         -
  Payments received on advance to NIPSI. . . . . . . . .        35,000          -
  Payments received on note receivable . . . . . . . . .        30,000          -
  Payments for property and equipment. . . . . . . . . .          (772)         -
  Payments for goodwill. . . . . . . . . . . . . . . . .       (55,020)         -
  Cash (used) by acquisition of AHR Subsidiary . . . . .       (17,283)         -
                                                          -------------  ---------
        Net Cash (Used) by Investing Activities. . . . .      (152,575)         -
                                                          -------------  ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable. . . . . . . . . . . . . .       120,000     20,000
  Proceeds from sale of common stock . . . . . . . . . .        70,000     15,000
  Payments to repurchase common stock. . . . . . . . . .       (79,500)         -
                                                          -------------  ---------
        Net Cash Provided by Financing Activities. . . .       110,500     35,000
                                                          -------------  ---------
</TABLE>

                                   [Continued]


                                       25
<PAGE>

<TABLE>
<CAPTION>


             AMERICAN  HOSPITAL  RESOURCES,  INC.  AND  SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   [CONTINUED]

                                                    For  the  Year  Ended
                                                        December  31,
                                                    ----------------------
                                                        2002        2001
                                                    ------------  --------
<S>                                                 <C>           <C>
NET INCREASE (DECREASE) IN CASH. . . . . . . . . .         6,699   (7,829)

CASH AT BEGINNING OF THE YEAR. . . . . . . . . . .            80    7,909
                                                    ------------  --------

CASH AT END OF THE YEAR. . . . . . . . . . . . . .  $      6,779  $    80
                                                    ============  ========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

  Cash paid during the period for:
    Interest . . . . . . . . . . . . . . . . . . .  $          -  $     -
    Income taxes . . . . . . . . . . . . . . . . .  $          -  $     -
</TABLE>


SUPPLEMENTAL  SCHEDULE  OF  NON-CASH  INVESTING  AND  FINANCING  ACTIVITIES:

     For  the  year  December  31,  2002:
          In February 2002, the Company issued 675,000 shares of common stock as
          payment  of  $7,500  of  services  related  to  the acquisition of AHR
          Subsidiary.

          In  February  and  May  2002,  the Company issued 11,500,000 shares of
          common  stock for a $30,000 note receivable and to convert $100,000 of
          notes  payable  and  $1,281  of  accrued  interest.

          In  March 2002, the Company issued 1,600,000 shares of common stock as
          payment  of  $10,000  of accounts payable and $22,000 of related party
          payable.

          In  March  2002, the Company granted 20,000 options to purchase common
          stock  to  attract  new  directors.

          In  May  2002,  the  Company  issued 500,000 shares of common stock to
          convert  $40,000  of  notes  payable  and  $789  of  accrued interest.



                                   [Continued]


                                       26
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   [CONTINUED]

          In  June  2002, the Company issued 3,196,873 shares of common stock to
          acquire  AHR  Subsidiary.

          In  August  2002, the Company issued 584,000 shares of common stock as
          payment  and  prepayment  of  $146,000  of  services.

          In  October 2002, the Company sold shares of common stock and recorded
          the  stock  offering  costs  of  $5,000  in  accounts  payable.

          In  November  2002,  the Company granted 2,000,000 options to purchase
          common  stock  as  payment  of  $882,400  of  services.

          In  December  2002,  the Company entered into an Equity Line of Credit
          Agreement  to  sell  shares  of  common  stock  and recorded the stock
          offering  costs  of  $1,059,424  in  accounts  payable.

          In  December  2002,  the  Company granted 300,000 warrants to purchase
          common  stock  as  payment  of  $19,577  of  services.

          In  December  2002,  the  Company  issued 2,600,000 shares of Series A
          preferred  stock  in  exchange  for  13,000,000 shares of common stock
          which  were  then  cancelled.

     For  the  year  December  31,  2001:
          None








    The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       27
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     ORGANIZATION  -  American Hospital Resources, Inc. ("Parent") was organized
     under  the laws of the State of Utah on May 9, 1972 as High-Line Investment
     &  Development  Company.  In  1977,  Parent  changed  its  name  to  Gayle
     Industries,  Inc.  In  1978, Parent merged into Swing Bike. In 1979, Parent
     changed its name to Horizon Energy Corporation. In 1992, Parent changed its
     name  to Millennium Entertainment Corp. In 1993, Parent changed its name to
     New  Horizon  Education, Inc. In 1993, Parent also organized a wholly owned
     subsidiary  with  the  sole purpose of merging with Ruff Network Marketing,
     Inc.  In 1997, Parent sold its wholly owned subsidiary to Phoenix Ink, LLC.
     On  June  17, 2002, Parent changed its name to American Hospital Resources,
     Inc.  Prior  to  2002, Parent was considered a development stage company as
     defined  in  Statement  of  Financial  Accounting  Standards  No.  7.

     American  Hospital  Resources,  Inc. ("AHR Subsidiary") was organized under
     the laws of the State of Delaware on August 27, 1999 as Frozen Enterprises,
     Inc.  On  February  16,  2002,  AHR Subsidiary changed its name to American
     Hospital  Resources,  Inc.  On  December  31,  2002, the Board of Directors
     determined  to  dissolve  AHR  Subsidiary.  AHR  Subsidiary  is not in good
     standing  with  the  State  of  Delaware  [See  Note  17].

     NIPSI  Pharmacy of Texas ("NPT Subsidiary") was organized as a wholly owned
     subsidiary  under  the  laws of the State of Nevada on December 19, 2002 to
     provide  pharmacy  services.

     American  Hospital Resources, Inc., AHR Subsidiary and NPT Subsidiary ("the
     Company")  provides hospital consulting and management. The Company has, at
     the present time, not paid any dividends and any dividends that may be paid
     in  the  future  will depend upon the financial requirements of the Company
     and  other  relevant  factors.

     CONSOLIDATION  - The consolidated financial statements include the accounts
     of  Parent,  its  wholly  owned  AHR  Subsidiary  and  its wholly owned NPT
     Subsidiary.  All significant intercompany transactions have been eliminated
     in  consolidation.

     CASH  AND  CASH  EQUIVALENTS - The Company considers all highly liquid debt
     investments  purchased  with  a maturity of three months or less to be cash
     equivalents.

     ACCOUNTS  AND  LOANS  RECEIVABLE  -  The Company records accounts and loans
     receivable  at  the lower of cost or fair value. The Company determines the
     lower  of  cost  or  fair value of nonmortgage loans on an individual asset
     basis.  The  Company  recognizes  interest  income on an account receivable
     based  on  the  stated  interest rate for past-due accounts over the period
     that  the  account is past due. The Company recognizes interest income on a
     loan  receivable  based  on  the  stated interest rate over the term of the
     loan.  The  Company  accumulates  and defers fees and costs associated with
     establishing  a  receivable  to be amortized over the estimated life of the
     related  receivable. The Company estimates allowances for doubtful accounts
     and loan losses based on the aged receivable balance and historical losses.
     The  Company  records  interest  income  on  delinquent  accounts and loans
     receivable  only  when  payment  is  received.  The  Company  first applies
     payments  received on delinquent accounts and loans receivable to eliminate
     the  outstanding  principal. The Company charges off uncollectible accounts
     and loans receivable when management estimates no possibility of collecting
     the related receivable. The Company considers accounts and loans receivable
     to  be  past  due  or  delinquent  based  on  contractual  terms.


                                       28
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  [CONTINUED]

     PROPERTY  AND  EQUIPMENT  -  Property  and  equipment  are  stated at cost.
     Expenditures  for  repairs and maintenance are charged to operating expense
     as  incurred.  Expenditures  for  additions and betterments that extend the
     useful  lives  of property and equipment are capitalized, upon being placed
     in  service.  When  assets  are sold or otherwise disposed of, the cost and
     related  accumulated  depreciation  or  amortization  is  removed  from the
     accounts  and  any  resulting  gain  or  loss  is  included  in operations.
     Depreciation  is computed using the straight-line method over the estimated
     useful  lives  of  the  assets  of  five  years  [See  Note  6].

     WEBSITE  COSTS  - The Company has adopted the provisions of Emerging Issues
     Task  Force  00-2,  "Accounting  for  Web  Site  Development  Costs." Costs
     incurred  in  the  planning stage of a website are expensed as research and
     development  while  costs incurred in the development stage are capitalized
     and amortized over the life of the asset, estimated to be five years. As of
     December  31, 2002 the Company has capitalized a total of $1,541 of website
     costs  which  are  included  in property and equipment. The Company did not
     incur  any  planning  costs and did not record any research and development
     costs  for  the  years  ended  December  31,  2002  and  2001.

     INTANGIBLE  ASSETS  -  The  Company accounts for their intangible assets in
     accordance  with  Statement  of  Financial  Accounting  Standards  No. 142,
     "Goodwill  and  Other  Intangible  Assets"  [See  Note  7].

     STOCK  OFFERING  COSTS  -  Costs  related  to  proposed stock offerings are
     deferred  and  will  be offset against the proceeds of the offering. In the
     event  a  stock offering is unsuccessful, the costs related to the offering
     will  be  written  off  to  expense.

     REVENUE  RECOGNITION  -  The Company's revenue comes from the management of
     hospitals  and  from  the  sale  of  hospital  property.  Revenue  from the
     management  of  hospitals  is  recognized  over  the  term  of the managing
     agreement.  A  portion of the managing services is subcontracted out by the
     Company  to  third  party  vendors.  These direct costs are recorded by the
     Company  as  general  and administrative expenses. Revenue from the sale of
     hospital  property  is  recorded  when  property  is  sold. The Company has
     purchased  the right to receive a portion of the revenues from a consulting
     and  asset  sale  agreement.  Revenue  derived  from the purchased contract
     rights  is  recorded  as  received on a net basis. On a net basis, only the
     share  of  revenue  belonging  to  the  Company  is  recorded  as  revenue.

     STOCK  BASED  COMPENSATION  -  The  Company  accounts for their stock based
     compensation in accordance with Statement of Financial Accounting Standards
     No.  123  "Accounting  for  Stock-Based  Compensation."  This  statement
     establishes  an  accounting  method  based  on  the  fair  value  of equity
     instruments  awarded  to  employees as compensation. However, companies are
     permitted  to  continue  applying  previous  accounting  standards  in  the
     determination  of  net income with disclosure in the notes to the financial
     statements  of the differences between previous accounting measurements and
     those  formulated  by  the new accounting standard. The Company has adopted
     the  disclosure  only  provisions of SFAS No. 123. Accordingly, the Company
     has  elected  to  determine net income using previous accounting standards.


                                       29
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  [CONTINUED]

     LOSS PER SHARE - The computation of loss per share of common stock is based
     on  the  weighted  average  number of shares outstanding during the periods
     presented,  in  accordance with Statement of Financial Accounting Standards
     No.  128,  "Earnings  Per  Share"  [See  Note  14].

     ACCOUNTING  ESTIMATES  -  The  preparation  of  financial  statements  in
     conformity  with  generally  accepted  accounting  principles in the United
     States  of  America  requires  management to make estimates and assumptions
     that effect the reported amounts of assets and liabilities, the disclosures
     of  contingent  assets  and  liabilities  at  the  date  of  the  financial
     statements,  and  the  reported amounts of revenues and expenses during the
     reporting  period.  Actual  results  could  differ  from those estimated by
     management.

     RECENTLY  ENACTED  ACCOUNTING STANDARDS - Statement of Financial Accounting
     Standards  ("SFAS")  No.  141,  "Business  Combinations",  SFAS  No.  142,
     "Goodwill and Other Intangible Assets", SFAS No. 143, "Accounting for Asset
     Retirement  Obligations",  SFAS  No. 144, "Accounting for the Impairment or
     Disposal  of  Long-Lived  Assets",  SFAS  No.  145,  "Rescission  of  FASB
     Statements  No.  4,  44,  and  64,  Amendment of FASB Statement No. 13, and
     Technical Corrections", SFAS No. 146, "Accounting for Costs Associated with
     Exit  or  Disposal  Activities",  SFAS  No.  147,  "Acquisitions of Certain
     Financial Institutions - an Amendment of FASB Statements No. 72 and 144 and
     FASB  Interpretation  No. 9", and SFAS No. 148, "Accounting for Stock-Based
     Compensation  -  Transition and Disclosure - an Amendment of FASB Statement
     No.  123", were recently issued. SFAS No. 141, 142, 143, 144, 145, 146, 147
     and 148 have no current applicability to the Company or their effect on the
     financial  statements  would  not  have  been  significant.

     RECLASSIFICATION  -  The financial statements for periods prior to December
     31,  2002  have  been  reclassified  to  conform  to  the  headings  and
     classifications  used  in  the  December  31,  2002  financial  statements.

NOTE  2  -  ACQUISITION  AND  VOIDING  OF  ACQUISITION

     On  December 13, 2002, Parent signed an asset purchase agreement with NIPSI
     Healthcare  of  Houston Limited Partnership ("NIPSI") and NIPSI of Houston,
     Inc. ("NIPSI General Partner"). The agreement provided for Parent to assume
     certain  liabilities  of  NIPSI  and to sign an unsecured 18-month $150,000
     note  payable  to  NIPSI  for  most  of  the operating assets of NIPSI. The
     agreement also included a non-compete covenant from NIPSI and NIPSI General
     Partner.  The  acquisition closed December 16, 2002; however, subsequently,
     in  a  default  judgement  against  NIPSI in favor of a creditor, the court
     voided  and nullified the transfer of NIPSI assets to the Company [See Note
     17].  Also,  NIPSI  General  Partner sent a demand letter to the Company to
     rescind  the  asset  purchase  agreement  and  claiming damages of $120,000
     against  the  Company  [See  Note 17]. The financial statements reflect the
     acquisition  as having been voided or rescinded and any expenses associated
     with  the  voided  acquisition  have  been  classified  as  a  cost  of the
     unsuccessful  NIPSI  acquisition.


                                       30
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  3  -  ACQUISITION

     On  April  3,  2002,  Parent signed an agreement and plan of reorganization
     with  Phase  One, LLC and AHR Subsidiary. The agreement provided for Parent
     to  issue  3,196,873 shares of its common stock for all 1,500 shares of AHR
     Subsidiary's  common stock. In connection with the proposed reorganization,
     Parent  previously  issued a total of 13,000,000 shares of its common stock
     to  Phase  One,  LLC  for  $130,000  in financing. The agreement called for
     former shareholders of AHR Subsidiary to receive up to 12,870,000 shares of
     the  common  stock issued to Phase One, LLC based on the performance of the
     Company.  In  connection with the agreement, Parent amended its articles of
     incorporation  to  authorize  10,000,000  shares  of preferred stock and to
     change  its  name  to  American Hospital Resources, Inc. Also in connection
     with  the  agreement,  Parent  and  AHR  Subsidiary entered into three-year
     consulting agreements with both Synergistic Connections, Inc. and Corporate
     Dynamics,  Inc.  [See  Note  15].  As a result of the agreement, the former
     officers  and  directors  of  the  Company  resigned  and  new officers and
     directors were appointed. The acquisition closed June 17, 2002 and has been
     accounted  for  as  a  purchase  of  AHR  Subsidiary.  The Company recorded
     goodwill  of  $60,321 as a result of the acquisition. On December 31, 2002,
     the  agreement  and  plan  of  reorganization  was  amended to exchange the
     13,000,000  shares  of  the  Company's common stock that had been issued to
     Phase  One,  LLC  for  2,600,000 shares of the Company's Series A preferred
     stock.  The  agreement was further amended to issue the 2,600,000 shares of
     Series A preferred stock to the Company's Chief Executive Officer for value
     received  by  Phase  One,  LLC,  which  effected a change in control of the
     Company.  The  amended  agreement also grants the Company's Chief Executive
     Officer  the  right to convert, at any time, any or all of the common stock
     that  he  received  under  the agreement into Series A preferred stock at a
     rate  of  five  shares of common stock into one share of Series A preferred
     stock.

     The following is the unaudited condensed balance sheet of AHR Subsidiary at
     June  17,  2002,  the  date  the  acquisition  closed.

<TABLE>
<CAPTION>

                                                 June 17,
                                                   2002
                                                 ---------
<S>                                              <C>
ASSETS:
  Accounts receivable . . . . . . . . . . . . .  $  64,740
  Related party receivable. . . . . . . . . . .     52,500
  Property and equipment, net . . . . . . . . .      1,176
                                                 ---------
                                                 $ 118,416
                                                 =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
  Bank overdraft. . . . . . . . . . . . . . . .  $  17,283
  Accounts payable. . . . . . . . . . . . . . .      3,784
  Accrued expenses. . . . . . . . . . . . . . .     56,516
  Related party payable . . . . . . . . . . . .      6,666
  Common stock. . . . . . . . . . . . . . . . .      1,500
  Retained earnings . . . . . . . . . . . . . .     32,667
                                                 ---------
                                                 $ 118,416
                                                 =========
</TABLE>


                                       31
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  3  -  ACQUISITION  [CONTINUED]

     The  following is an unaudited proforma condensed consolidated statement of
     operations  as  if  the  acquisition  had  occurred  on  December 31, 2001:

<TABLE>
<CAPTION>


                            For the
                           Year Ended
                          December 31,
                              2002
                         --------------
<S>                      <C>
  Revenues. . . . . . .  $     289,620
  Expenses. . . . . . .     (1,498,861)
  Other expenses. . . .         (1,122)
                         --------------
  Loss from operations.     (1,210,363)

  Tax expense . . . . .              -
                         --------------
  Net loss. . . . . . .  $  (1,210,363)
                         ==============

  Loss per common share  $        (.07)
                         ==============
</TABLE>

NOTE  4  -  ACCOUNTS  RECEIVABLE

     Accounts  receivable  consisted  of  the  following  at:

<TABLE>
<CAPTION>

                                                  December 31,
                                                      2002
                                                 --------------
<S>                                              <C>
Parkview management consulting services . . . .  $       7,800
Parkview purchased commission on sale of assets         94,500
                                                 --------------
                                                       102,300

Less: allowance for doubtful accounts . . . . .       (102,300)
                                                 --------------
Net accounts receivable . . . . . . . . . . . .  $           -
                                                 ==============
</TABLE>

     At  December 31, 2002, the Company had receivables from two agreements with
     Parkview.  Parkview  is  undergoing  bankruptcy  reorganization  and  the
     receivables  were generated as part of the reorganization. While management
     expects  to collect on both Parkview receivables, collection is not certain
     and  an  allowance  has  been  recorded.


                                       32
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  5  -  ADVANCE  TO  NIPSI

     Advance  to  NIPSI  consisted  of  the  following  at:

<TABLE>
<CAPTION>

                       December 31,
                           2002
                       -------------
<S>                    <C>
Advance to NIPSI. . .  $      15,000
                       -------------
Net advance to NIPSI.  $           -
                       =============
</TABLE>

     At  December 31, 2002, the Company had made advances to NIPSI which had not
     been  repaid.  Subsequently,  the  Company  received  $15,000  from  NIPSI;
     however,  NIPSI  General  Partner  subsequently rescinded an asset purchase
     agreement and, in a default judgement against NIPSI in favor of a creditor,
     the  court voided and nullified the transfer of NIPSI assets to the Company
     [See  Notes  2  and  17].

NOTE  6  -  PROPERTY  AND  EQUIPMENT

     Property  and  equipment  consisted  of  the  following  at:

<TABLE>
<CAPTION>

                                 December 31,
                                     2002
                                --------------
<S>                             <C>
Office equipment . . . . . . .  $         431
Website. . . . . . . . . . . .          1,541
                                --------------
                                        1,972

Less: accumulated depreciation           (229)
                                --------------
Net property and equipment . .  $       1,743
                                ==============
</TABLE>

     Depreciation  expense  for  the  years ended December 31, 2002 and 2001 was
     $205  and  $0,  respectively.

NOTE  7  -  GOODWILL

     The  Company has no indefinite-life or definite-life intangible assets. The
     following  is  a  summary  of  the  Company's  goodwill.

     Goodwill  at  December  31,  2001                        $        -
     Goodwill  from  acquisition  of  AHR  Subsidiary             60,321
                                                               ---------
     Goodwill  at  December  31,  2002                        $   60,321
                                                              ==========


                                       33
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  8  -  ACCRUED  EXPENSES

     Accrued  expenses  consist  of  the  following  at:

<TABLE>
<CAPTION>

                                        December 31,
                                            2002
                                        -------------
<S>                                     <C>
  Accrued payroll and related expenses  $     109,940
                                        -------------
  Total accrued expenses . . . . . . .  $     109,940
                                        =============
</TABLE>

NOTE  9  -  NOTES  PAYABLE

     On February 27, 2002, the Company signed a $40,000 convertible note payable
     to  McKinley  Enterprises,  Inc.  Profit  Sharing  Plan.  The  note accrued
     interest  at  8%  per  annum, was due February 27, 2003 and was convertible
     after  90  days  to  500,000  shares  of common stock. On May 30, 2002, the
     $40,000  note  payable  and  its accrued interest of $789 were converted to
     500,000  shares  of  common  stock  [See  Note  10].

     On  July  11,  2001,  the  Company  signed a $20,000 note payable to Growth
     Ventures Inc., Pension Plan and Trust. The note accrued interest at 10% per
     annum  and  was  due  October 9, 2001 but was extended through February 11,
     2002.  On  February  27,  2002, the Company issued 500,000 shares of common
     stock  as full payment of the $20,000 note payable and its accrued interest
     of  $1,281  [See  Note  10].

NOTE  10  -  CAPITAL  STOCK

     PREFERRED STOCK - The Company has authorized 10,000,000 shares of preferred
     stock,  no par value, with such rights, preferences and designations and to
     be  issued  in  such  series  as  determined  by the Board of Directors. On
     December  30,  2002,  the Company's Board of Directors designated 5,000,000
     shares  as  Series  A  and  5,000,000  shares  as  Series  B.

     SERIES  A  PREFERRED STOCK - Each share of Series A preferred stock has the
     voting  rights of 5 shares of common stock, is convertible into 5 shares of
     common  stock  and  is entitled to receive a $.0575 annual dividend payable
     monthly.  The  total  annual  dividend for all shares of Series A preferred
     stock  is  limited to 50% of the Company's earnings before interest, taxes,
     depreciation  and  amortization  for  the year and the monthly payments are
     adjusted  accordingly.  In  addition,  if  shares of the Series A preferred
     stock  are  required  to  be  converted  as part of a sale or merger of the
     Company,  then  each  share of Series A preferred stock is convertible into
     5.5  shares  of  common  stock.

     In  December  2002, the Company issued 2,600,000 shares of their previously
     authorized but unissued Series A preferred stock in exchange for 13,000,000
     shares  of  the  Company's  common  stock.

     SERIES  B  PREFERRED  STOCK  -  Each  share  of Series B preferred stock is
     convertible  into 1 share of common stock and is entitled to receive a 6.5%
     annual dividend payable quarterly. The 6.5% annual dividend is based on the
     purchase  price  paid  to  or  the  consideration  received by the Company.


                                       34
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  10  -  CAPITAL  STOCK  [CONTINUED]

     COMMON  STOCK  -  The  Company  has authorized 100,000,000 shares of common
     stock  with  no  par  value.  In December 2002, the Company repurchased and
     cancelled  13,000,000 shares of the Company's issued and outstanding common
     stock  for  2,600,000  shares  of  Series  A  preferred  stock.

     In  October  2002,  the  Company  issued 200,000 shares of their previously
     authorized  but  unissued  common  stock  for  cash of $50,000, or $.25 per
     share.  Stock  offering  costs  of $5,000 were netted against the proceeds.

     In  August  2002,  the  Company  issued  584,000 shares of their previously
     authorized  but  unissued  common stock for services valued at $146,000, or
     $.25  per  share. At December 31, 2002, services valued at $30,000 have not
     yet  been rendered and have been recorded as prepaid expense [See Note 15].

     In  June  2002, in connection with an agreement and plan of reorganization,
     the  Company  issued  3,196,873  shares  of their previously authorized but
     unissued  common  stock  to  acquire  AHR  Subsidiary  [See  Note  3].

     In  May  2002,  the  Company  issued  500,000  shares  of  their previously
     authorized  but unissued common stock to convert a $40,000 note payable and
     their  accrued  interest  of  $789,  or  $.081578  per  share.

     In  April  2002,  the  Company  issued 2,000,000 shares of their previously
     authorized but unissued common stock to Phase One, LLC for cash of $20,000,
     or  $.01  per  share.

     In  March  2002,  the  Company  issued 1,600,000 shares of their previously
     authorized  but  unissued  common  stock  as payment of $10,000 of accounts
     payable  and  $22,000  of  related  party  payable,  or  $.02  per  share.

     In February and March 2002, the Company repurchased and cancelled 3,198,736
     shares of the Company's issued and outstanding common stock for cash in the
     amount  of  $79,500, or $.024854. The Company had offered to repurchase the
     shares  for  an  amount up to the original sales price because the National
     Association  of Securities Dealers had imposed a special restriction on the
     trading  of  these  shares.

     In  February 2002, the Company issued 11,000,000 shares of their previously
     authorized  but  unissued common stock to Phase One, LLC for a $30,000 note
     receivable  and  to  convert  $80,000 of notes payable. Total consideration
     amounted to $110,000, or $.01 per share. This issuance resulted in a change
     in  control  of  the  Company.

     In  February  2002,  the  Company issued 125,000 shares of their previously
     authorized  but  unissued common stock for services rendered related to the
     acquisition  of  AHR  Subsidiary  valued  at  $2,500,  or  $.02  per share.

     In  February  2002,  the  Company issued 450,000 shares of their previously
     authorized  but  unissued common stock for services rendered related to the
     acquisition  of  AHR  Subsidiary  valued  at  $5,000,  or  $.01  per share.


                                       35
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  10  -  CAPITAL  STOCK  [CONTINUED]

     In  February  2002,  the  Company issued 500,000 shares of their previously
     authorized  but unissued common stock to convert a $20,000 note payable and
     its  accrued  interest  of  $1,281,  or  $.04256  per  share.

     In  January  2001,  the Company entered into a stock subscription agreement
     with a former director of the Company. The agreement was originally for the
     sale  of  7,500,000  shares  of  the  Company's  previously  authorized but
     unissued  common  stock for $15,000, or $.002 per share. However, on August
     3,  2001,  the  Company renegotiated the stock transaction and both parties
     agree that only 750,000 shares should have been issued for $15,000, or $.02
     per  share.  Accordingly,  the  additional  6,750,000  shares  have  been
     cancelled.  The  financial  statements  have  been  restated to reflect the
     issuance  of  750,000  shares  as  of  February  2001.

     STOCK  OPTIONS - In November 2002, the Company granted 2,000,000 options to
     purchase  common  stock  at  $.50 per share for services rendered valued at
     $882,400.  The  options  vested  immediately  and are exercisable for three
     years.  At  December  31,  2002,  none of these options had been exercised,
     forfeited  or  cancelled.

     In  March 2002, the Company granted 20,000 options to purchase common stock
     at  $.05  per share to attract new directors to Company. The options vested
     immediately  and  are exercisable for two years. At December 31, 2002, none
     of  these  options  had  been  exercised,  forfeited  or  cancelled.

     STOCK  WARRANTS - In December 2002, the Company granted 300,000 warrants to
     purchase  common  stock  to  directors  and  NIPSI  personnel  for services
     rendered  valued  at $19,577. The warrants were granted from the 2003 Stock
     Bonus  Pool,  vested  immediately and are exercisable at $.25 per share for
     five  years.  At  December  31,  2002,  none  of  these  warrants  had been
     exercised,  forfeited  or  cancelled.

     STOCK  OPTION  AND  WARRANT COMPENSATION COST - The Company has adopted the
     disclosure  only  provisions of Statement of Financial Accounting Standards
     No.  123,  "Accounting for Stock-Based Compensation." Had compensation cost
     for  the  Company's stock options and warrants been determined based on the
     fair  value  at  the  grant date consistent with the provisions of SFAS No.
     123,  the  Company's net loss and loss per share would have been reduced to
     the  pro  forma  amounts  indicated  below:

<TABLE>
<CAPTION>

                                         For  the  Year  Ended
                                             December  31,
                                        -----------------------
                                            2002        2001
                                        ------------  ---------
<S>                      <C>            <C>           <C>
  Net Loss. . . . . . .  As reported    $(1,247,310)  $(58,675)
    Pro forma . . . . .  $ (1,298,050)  $   (58,675)

  Loss Per Common Share  As reported    $      (.08)  $   (.02)
    Pro forma . . . . .  $       (.08)  $      (.02)
</TABLE>


                                       36
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  10  -  CAPITAL  STOCK  [CONTINUED]

     The  fair value of each option and warrant granted is estimated on the date
     granted  using  the  Black-Scholes option pricing model, with the following
     assumptions  used  for  the grants on December 31, 2002: risk-free interest
     rate  of  2.78%, expected dividend yield of zero, expected lives of 5 years
     and  expected  volatility  of 100%. The following assumptions were used for
     grants  on  November  1,  2002:  risk-free rate of 2.92%, expected dividend
     yield  of  zero, expected lives of 3 years and expected volatility of 100%.
     The following assumptions were used for grants on March 14, 2002: risk-free
     rate  of  3.63%, expected dividend yield of zero, expected lives of 2 years
     and  expected  volatility  of 100%. The following assumptions were used for
     grants  on  March 4, 2002: risk-free rate of 3.24%, expected dividend yield
     of  zero,  expected  lives  of  2  years  and  expected volatility of 100%.

     INCENTIVE  STOCK  BONUS PLAN - On December 31, 2002, the Board of Directors
     of  the  Company  adopted  the Incentive Stock Bonus Plan ("the Plan"). The
     Plan  provides  for  the  granting of 5-year warrants to purchase shares of
     common  stock  to  directors,  senior management and certain key employees.
     Awards  under  the  Plan  will  be  granted  as  determined by the Board of
     Directors.  The  Board of Directors further authorized the 2003 Stock Bonus
     Pool  which consists of 1,000,000 warrants to purchase common stock at $.25
     per  share.  At  December  31, 2002, total warrants available to be granted
     from  the  2003  Stock  Bonus  Pool  amounted  to  700,000.

     A  summary  of  the  status  of  the  warrants  granted under the Company's
     Incentive  Stock  Bonus  Plan  at  December  31,  2002  is presented below:

<TABLE>
<CAPTION>

                                               December  31,  2002
                                         -------------------------------
                                                         Weighted Average
                                             Shares      Exercise Price
                                         --------------  ----------------
<S>                                      <C>             <C>
Outstanding at beginning of year. . . .               -  $             -
Granted . . . . . . . . . . . . . . . .         300,000  $           .25
Exercised . . . . . . . . . . . . . . .               -  $             -
Forfeited . . . . . . . . . . . . . . .               -  $             -
Expired . . . . . . . . . . . . . . . .               -  $             -
                                         --------------  ----------------
Outstanding at end of year. . . . . . .         300,000  $           .25
                                         --------------  ----------------
Weighted average fair value of warrants
  granted during the year . . . . . . .         300,000  $           .25
                                         ==============  ================
</TABLE>

     A  summary  of  the  status of the warrants outstanding under the Company's
     Incentive  Stock  Bonus  Plan  at  December  31,  2002  is presented below:

<TABLE>
<CAPTION>

                           Warrants  Outstanding            Warrants  Exercisable
           -------------------------------------------  -------------------------------
Range  of               Weighted-Average Weighted-Average               Weighted-Average
Exercise   Number       Remaining         Exercise         Number        Exercise
Prices     Outstanding  Contractual Life  Price            Exercisable   Price
---------  -----------  ----------------  ---------------  ------------  -----------------
<S>        <C>          <C>               <C>              <C>           <C>
      .25      300,000       5.0 years     $      .25        300,000      $      .25
---------  -----------  ----------------  ---------------  ------------  -----------------
</TABLE>


                                       37
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  11  -  INCOME  TAXES

     The  Company  accounts  for  income  taxes  in accordance with Statement of
     Financial Accounting Standards No. 109, "Accounting for Income Taxes". SFAS
     No.  109  requires  the  Company  to  provide  a  net deferred tax asset or
     liability  equal to the expected future tax benefit or expense of temporary
     reporting  differences  between  book  and  tax  accounting methods and any
     available operating loss or tax credit carryforwards. At December 31, 2002,
     the  Company  has  available  unused  operating  loss  carryforwards  of
     approximately  $270,000, which may be applied against future taxable income
     and  which  expire  in  various  years through 2022. If certain substantial
     changes  in  the  Company's ownership should occur, there will be an annual
     limitation  on  the amount of net operating loss carryforwards which can be
     utilized.

     At  December  31,  2002,  the  total  of  all  deferred  tax  assets  was
     approximately  $205,000  and  the total of all deferred tax liabilities was
     $0.  The  amount  of  and  ultimate  realization  of  the benefits from the
     deferred tax assets for income tax purposes is dependent, in part, upon the
     tax  laws  in  effect, the future earnings of the Company, and other future
     events,  the  effects  of  which  cannot  be  determined.  Because  of  the
     uncertainty  surrounding  the  realization  of  the loss carryforwards, the
     Company  has  established  a valuation allowance of approximately $205,000.
     The net change in the valuation allowance was approximately $168,000 during
     the  year  ended  December  31,  2002.

     The  temporary  differences  gave  rise to the following deferred tax asset
     (liability):

<TABLE>
<CAPTION>

                                December 31,
                                    2002
                                -------------
<S>                             <C>
  Excess of tax over financial
    accounting depreciation. .  $         126
  Accrued compensation . . . .         43,794
  Capital loss carryover . . .         12,945
  Allowance for bad debt . . .         40,751
  Net operating loss carryover        107,399
</TABLE>

     The  components  of  federal  income tax expense from continuing operations
     consisted  of  the  following  for  the  year  ended:

<TABLE>
<CAPTION>

                               December 31,
                                   2002
                               -------------
<S>                            <C>
  Current income tax expense:
    Federal . . . . . . . . .  $           -
    State . . . . . . . . . .              -
                               -------------
  Net current tax expense . .  $           -
                               -------------
</TABLE>


                                       38
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  11  -  INCOME  TAXES  [CONTINUED]

     Deferred  tax  expense  (benefit)  resulted  from:
          Excess  of  tax  over  financial
            accounting  depreciation                          $     (126)
          Accrued  compensation                                  (43,794)
          Capital  loss  carryover                               (12,945)
          Allowance  for  bad  debts                             (40,751)
          Net  operating  loss  carryover                        (70,672)
          Valuation  allowance                                    168,288
                                                              -----------
     Net  deferred  tax  expense                              $         -
                                                              ===========

     Deferred  income  tax  expense  results  primarily  from  the  reversal  of
     temporary  timing  differences  between tax and financial statement income.

     The reconciliation of income tax from continuing operations computed at the
     U.S.  federal  statutory  tax  rate  to  the Company's effective rate is as
     follows  for  the  year  ended:

<TABLE>
<CAPTION>

                                              December 31,
                                                  2002
                                              -------------
<S>                                           <C>
  Computed tax at the expected
    federal statutory rate . . . . . . . . .         34.00%
  State income taxes, net of federal benefit          5.83
  Compensation due to issue of options . . .        (28.81)
  Other. . . . . . . . . . . . . . . . . . .          2.47
  Valuation allowance. . . . . . . . . . . .        (13.49)
                                              -------------
  Effective income tax rates . . . . . . . .          0.00%
                                              =============
</TABLE>

NOTE  12  -  GOING  CONCERN

     The accompanying financial statements have been prepared in conformity with
     generally  accepted  accounting principles in the United States of America,
     which  contemplate continuation of the Company as a going concern. However,
     the  Company  has  just  recently  commenced  operations  and  all of their
     revenues  have  been  from  one  customer. Further, the Company has current
     liabilities  in  excess  of current assets. These factors raise substantial
     doubt  about  the ability of the Company to continue as a going concern. In
     this  regard,  management  is  proposing  to raise any necessary additional
     funds  not  provided  by operations through loans or through sales of their
     common  stock  or  through  a  possible  business  combination with another
     company.  There  is  no  assurance  that  the Company will be successful in
     raising  this  additional  capital  or achieving profitable operations. The
     financial  statements do not include any adjustments that might result from
     the  outcome  of  these  uncertainties.


                                       39
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  13  -  RELATED  PARTY  TRANSACTIONS

     NOTE RECEIVABLE - On February 27, 2002, the Company received a $30,000 note
     receivable  from  Phase One, LLC for the issuance of common stock [See Note
     10].  The  note was due May 28, 2002 and accrued interest at 10% per annum.
     The  note  was  paid on March 31, 2002 with no interest being recognized on
     the  note.

     PAYABLES  - The Chief Executive Officer of the Company has paid expenses on
     behalf  of  the  Company.  At  December  31,  2002,  the  Company had fully
     reimbursed  the  officer/shareholder.

     NOTES  PAYABLE  -  On  January  25,  2002,  the  Company  signed  a $30,000
     convertible  note  payable  to Phase One, LLC. The note was due January 25,
     2003,  accrued  interest  at 10% per annum and was convertible to 3,000,000
     shares  of  common  stock.  On February 27, 2002, the note was converted to
     common  stock  and  no  interest  was recognized on the note [See Note 10].

     On February 11, 2002, the Company signed a $50,000 convertible note payable
     to  Phase One, LLC. The note was due February 11, 2003, accrued interest at
     10%  per  annum and was convertible to 5,000,000 shares of common stock. On
     February  27,  2002, the note was converted to common stock and no interest
     was  recognized  on  the  note  [See  Note  10].

     SERIES  A  PREFERRED STOCK FOR COMMON STOCK - In December 2002, the Company
     issued  2,600,000  shares  of Series A preferred stock to Phase One, LLC in
     exchange  for  13,000,000  shares  of  common  stock  [See  Note  10].

     COMMON STOCK ISSUANCES - In April 2002, the Company issued 2,000,000 shares
     of  common  stock  to  Phase  One,  LLC  for cash of $20,000 [See Note 10].

     In March 2002, the Company issued 1,100,000 shares of common stock to their
     former  President  as  payment  of $22,000 for services previously rendered
     [See  Note  10].

     In  February  2002, the Company issued 11,000,000 shares of common stock to
     Phase  One,  LLC  for  a  $30,000 note receivable and to convert $80,000 of
     notes  payable  [See  Note  10].

     In  February  2001,  the Company issued 750,000 shares of common stock to a
     former  director  for  cash  of  $15,000  [See  Note  10].

     OPTIONS  -  In  March  2002, the Company granted 20,000 options to purchase
     common  stock  to  attract  new  directors  to  the  Company [See Note 10].

     WARRANTS  -  In  December  2002,  the  Company  granted 275,000 warrants to
     purchase  common  stock  to  directors of the Company for services rendered
     valued  at  $13,750  [See  Note  10].


                                       40
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  13  -  RELATED  PARTY  TRANSACTIONS  [CONTINUED]

     MANAGEMENT  COMPENSATION  -  During  the  years ended December 31, 2002 and
     2001,  respectively,  the  Company expensed $67,500 and $0 as salary to the
     Chief Executive Officer. During the years ended December 31, 2002 and 2001,
     respectively,  the  Company expensed $0 and $22,500 as salary to the former
     President.  At  December  31,  2002,  the  Company owed $108,342 in accrued
     salary.  The  accrued  salary is all payable to the Chief Executive Officer
     and  includes  amounts  accrued prior to the acquisition of AHR Subsidiary.

     In  February  2002,  the  Company  paid  $1,500  to their former directors.

     In  March 2002, the Company granted 20,000 options to purchase common stock
     to  attract  new  directors  to  the  Company  [See  Note  10].

     In  December  2002, the Company granted 275,000 warrants to purchase common
     stock  to  directors of the Company for services rendered valued at $13,750
     [See  Note  10].

     OFFICE  SPACE  -  Beginning  October  1, 2002, the Company pays their Chief
     Executive  Officer  $500 per month on a month-to-month basis for use of his
     office  space.  The Company previously paid their former President $100 per
     month  on  an  as-needed,  month-to-month  basis.  Total rents to the Chief
     Executive  Officer and President amounted to $2,100 and $400, respectively,
     for  the  years  ended  December  31,  2002  and  2001.

     PURCHASE  AND  SALE AGREEMENT - On September 15, 2002, the Company signed a
     Purchase and Sale Agreement with Gaelic Capital Group ("Gaelic"), an entity
     controlled  by  the  Company's Chief Executive Officer. The agreement calls
     for  the  Company  to pay $94,500 to Gaelic for the right to receive all of
     the  receipts  that were then owed to Gaelic as part of a February 11, 2002
     agreement  ("February  Agreement")  between  Gaelic  and Parkview Community
     Hospital  Medical  Center  ("Parkview").  The  Company  had  made  advances
     totaling  $94,500  in  anticipation  of  the  agreement. Under the February
     Agreement,  the  Company will receive 6% of the sales price for the sale of
     the peripheral assets of Parkview. During the year ended December 31, 2002,
     the Company collected none of this receivable and recognized no revenues as
     part  of this agreement. At December 31, 2002, the Company was owed a total
     of  $218,100  from  this  agreement.


                                       41
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  14  -  LOSS  PER  SHARE

     The  following  data  show the amounts used in computing loss per share for
     the  periods:

<TABLE>
<CAPTION>


                                           For  the  Year  Ended
                                               December  31,
                                        --------------------------

                                            2002          2001
                                        -------------  -----------
<S>                                     <C>            <C>
  Net loss available to common
    stockholders (numerator) . . . . .  $ (1,247,310)  $  (58,675)
                                        -------------  -----------
  Weighted average number of
    common shares outstanding
    used in loss per common
    share for the period (denominator)    16,227,105    3,535,630
                                        -------------  -----------
</TABLE>

     At  December  31,  2002,  the  Company  had  2,020,000 outstanding options,
     300,000  outstanding  warrants  and  preferred  stock  convertible  into
     13,000,000 shares of common stock which were not used in the computation of
     loss  per  share because their effect would be anti-dilutive. Dilutive loss
     per  share was not presented, as the Company had no common stock equivalent
     shares  for  all  periods  presented  that  would effect the computation of
     diluted  loss  per  share.

NOTE  15  -  COMMITMENTS  AND  CONTINGENCIES

     COMMON  STOCK  CONVERSION RIGHT - On December 31, 2002, the Company's Chief
     Executive  Officer  was granted the right to convert shares of common stock
     that  he  had  received  under an agreement and plan of reorganization into
     Series  A preferred stock at a rate of five shares of common stock into one
     share  of  Series  A  preferred  stock  [See  Note  3].

     CONSULTING  AGREEMENTS  -  On  January 15, 2002, the Company entered into a
     six-month consulting agreement with Synergistic Connections, Inc. to assist
     the  Company  in  selecting  and  negotiating  the acquisition of potential
     merger  candidates.  The  Company  paid  $60,000 and issued stock valued at
     $12,500  to  Synergistic  Connections,  Inc.  as  part  of  this agreement.

     On  April 1, 2002, the Company signed three-year consulting agreements with
     both  Synergistic  Connections,  Inc.  and  Corporate  Dynamics,  Inc.
     (collectively  "Consultants").  The  agreements call for the Company to pay
     $10,000  per  month  for  consulting  services. In August 2002, the Company
     issued 480,000 shares of common stock to Consultants for services valued at
     $120,000  [See  Note  10].  During  the  year  ended December 31, 2002, the
     Company  paid  $90,000  for  services  rendered  by Consultants under these
     agreements.  At  December  31,  2002,  the  Company has paid for $30,000 of
     consulting  services which have not yet been rendered and are classified as
     prepaid  expense.


                                       42
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  15  -  COMMITMENTS  AND  CONTINGENCIES  [CONTINUED]

     EQUITY  LINE  OF CREDIT AGREEMENT - On November 4, 2002, the Company signed
     an  Equity  Line  of  Credit  Agreement  with  Cornell Capital Partners, LP
     ("Cornell").  The agreement calls for the Company to sell up to $10,000,000
     of  common  stock  to  Cornell at 95% of the closing bid price for the five
     preceding  trading  days.  The agreement requires that the shares of common
     stock  be  registered  with the Securities and Exchange Commission and that
     the  shares  be  sold  in intervals over a two-year period commencing after
     such  registration  is  effective.  The  agreement calls for the Company to
     issue  common  stock  as  payment  of  a  commitment  fee  of  $290,000 and
     associated  legal  fees  of  $10,000 which are classified as deferred stock
     offering  costs.  The agreement also states that, at the time of stock sale
     transaction,  the Company will pay $500 in legal fees and pay Cornell 7% of
     the  proceeds  received. The agreement was negotiated by consultants of the
     Company  under  finder  agreements  [See  below]. At December 31, 2002, the
     commitment  fee of $290,000 and associated legal fees of $10,000 were still
     unpaid  and  are  classified  as  accounts  payable.

     FINDER  AGREEMENTS - On April 1, 2002, the Company signed three-year finder
     agreements  with both Synergistic Connections, Inc. and Corporate Dynamics,
     Inc.  (collectively  "Consultants"). The agreements call for the Company to
     pay  finders'  fees  of  10%  of  the  first  $3,000,000,  8%  of  the next
     $3,000,000,  6%  of  the  next $3,000,000, and 4% of any additional funding
     provided  through  the efforts of Consultants. In October 2002, the Company
     sold  200,000  shares  of  common  stock  for  cash  of  $50,000  which was
     negotiated  by Consultants and the Company recorded stock offering costs of
     $5,000  which  were  offset against the proceeds [See Note 10]. In December
     2002,  the  Company  signed  a  $10,000,000 Equity Line of Credit Agreement
     which was negotiated by Consultants and the Company recorded stock offering
     costs  of  $757,000  which  are classified as deferred stock offering costs
     [See  above].  At  December  31, 2002, finders' fees of $762,000 were still
     unpaid  and  are  classified  as  accounts  payable.

     POSSIBLE  NIPSI  CLAIMS  -  For  approximately  three  months,  the Company
     operated  the  assets of NIPSI pursuant to an asset purchase agreement [See
     Notes  2  and  17].  Company  management  believes  that the Company is not
     responsible  for  any liabilities of NIPSI, but the possibility exists that
     creditors and others seeking relief from NIPSI may also include the Company
     in  claims and suits based on the previous relationship. The Company is not
     currently  named  in,  nor is it aware of, any such claims or suits against
     NIPSI.  Company management believes that the Company would be successful in
     defending  against  any  such  claims.  No  accrual  for possible losses or
     settlements  has been recorded in the accompanying financial statements. As
     further  disclosed in Note 17, NIPSI General Partner is claiming damages of
     $120,000  against  the  Company.

     OFFERS  TO PURCHASE - On September 17, 2002, the Company signed an Offer to
     Purchase  to  acquire  all of the assets of Quantum Pharmacy Alliance, Ltd.
     ("Quantum").  The offer calls for the Company to purchase all of the assets
     of  Quantum  for one of two financing alternatives at Quantum's option. The
     first  alternative  is  $250,000  cash,  $500,000  as  a five-year, 6% note
     payable and $400,000 as Series B preferred stock. The second alternative is
     $650,000 as a five-year, 6% note payable and $850,000 as Series B preferred
     stock.


                                       43
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  15  -  COMMITMENTS  AND  CONTINGENCIES  [CONTINUED]

     On  October  31,  2002,  the  Company  signed  an  Offer  to  Purchase with
     Coastalmed  Inc.  and  Coastalmed of Panama City, Inc. The offer called for
     the Company to purchase all of the assets of Coastalmed Inc. and Coastalmed
     of  Panama City, Inc. for $7,000,000 payable as $4,000,000 cash, $1,375,000
     as a five-year, 6.5% note payable with interest-only payments for the first
     18  months  and  $1,625,000 as Series B preferred stock. This offer expired
     and  was  subsequently  replaced  by a new Offer to Purchase [See Note 17].

NOTE  16  -  CONCENTRATIONS  OF  CREDIT  RISK

     ACCOUNTS  RECEIVABLE  -  At  December  31,  2002,  the Company has accounts
     receivable  of  $102,300  which  is  owed  by  only  one  customer.

     GEOGRAPHIC  REGION  -  During  the year ended December 31, 2002, all of the
     Company's  sales  and  operations  were  located  in  and around Riverside,
     California.

     SIGNIFICANT CUSTOMER - During the year ended December 31, 2002, the Company
     had one customer that accounted for all of the Company's revenues. The loss
     of  this significant customer could adversely affect the Company's business
     and  financial  position.

NOTE  17  -  SUBSEQUENT  EVENTS

     COMMON  STOCK AUTHORIZED - Although none of the shares have been issued, in
     February  2003  the  Board  of  Directors authorized the future issuance of
     720,000  shares  of  common  stock  to  consultants  and  an  attorney.

     COMMON  STOCK  ISSUANCES  -  In  January 2003, the Company issued 1,000,000
     shares  of  common  stock  as  an  enticement  on an Offer to Purchase [See
     below].

     In February 2003, the Company issued 40,000 shares of common stock for cash
     of  $10,000,  or  $.25  per  share.

     DISSOLUTION  AND  STANDING  OF  AHR  SUBSIDIARY  - The Company is currently
     working  with  the  State of Delaware to resolve the taxes due in order for
     AHR Subsidiary to be in good standing and the Company is preparing articles
     of  dissolution  for  AHR  Subsidiary.

     FINANCING  AGREEMENTS  -  In February 2003, the Company retained Douglas A.
     Jackson  to  negotiate a line of credit for the Company. The Company agreed
     to  pay  $5,000  plus  5%  of  the  proceeds  received  by  the  Company.

     In  March  2003,  the  Company  retained  Douglas A. Jackson to negotiate a
     5-year  $6,000,000  loan for the Company. The Company agreed to pay $12,500
     plus  5%  of  the  proceeds  received  by  the  Company.


                                       44
<PAGE>

                AMERICAN HOSPITAL RESOURCES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  17  -  SUBSEQUENT  EVENTS  [CONTINUED]

     JUDGEMENT  AND  VOIDING  OF  ACQUISITION  -  In March 2003, the Company was
     notified  that  they  were  to be joined as defendants in a suit brought by
     AmeriSource  Bergen Corporation ("AmeriSource") against NIPSI. The original
     suit  by  AmeriSource  sought to recover $480,335 from NIPSI for failing to
     honor  a contract. In March 2003, AmeriSource filed a supplemental petition
     to  enjoin any transfer of assets from NIPSI to the Company. In April 2003,
     the  court  entered a default judgement against NIPSI. The court found that
     NIPSI  had  fraudulently  transferred  assets  to  the Company to avoid the
     claims  of  AmeriSource.  The  court  voided  and nullified the transfer of
     assets  from  NIPSI  to  the  Company  and ordered NIPSI to pay $551,264 to
     AmeriSource. As a result of these proceedings, the asset purchase agreement
     between  the  Company,  NIPSI  and NIPSI General Partner was voided and the
     Company  was  released as a defendant. The financial statements reflect the
     acquisition  as having been voided or rescinded and any expenses associated
     with  the  voided  acquisition  have  been  classified  as  a  cost  of the
     unsuccessful  NIPSI  acquisition.

     NIPSI DEMAND LETTER - In March 2003, NIPSI and NIPSI General Partner sent a
     demand  letter  to the Company to rescind the asset purchase agreement with
     the Company because certain conditions of the agreement were not satisfied.
     NIPSI  General Partner is claiming damages of $120,000 against the Company.
     The  financial  statements reflect the acquisition as having been voided or
     rescinded and the expenses associated with the voided acquisition have been
     classified  as a cost of the unsuccessful NIPSI acquisition. No accrual for
     possible  losses  or settlements, including the $120,000 in damages claimed
     by  NIPSI  General Partner, has been recorded in the accompanying financial
     statements.

     OFFERS  TO  PURCHASE  -  In  January  2003,  the Company signed an Offer to
     Purchase  with  Coastalmed  Inc.  and  Coastalmed  of  Panama City, Inc. to
     replace  the  offer  signed  October  31, 2002. The new offer calls for the
     Company  to purchase 100% of the stock of Coastalmed Inc. and Coastalmed of
     Panama  City, Inc. for $8,400,000 payable as $4,900,000 cash, $1,625,000 as
     a five-year, 6.5% note payable with interest-only payments for the first 18
     months  and $1,875,000 as Series B preferred stock. The Company also issued
     1,000,000  shares  of  common  stock  as partial consideration [See above].

     In January 2003, the Company signed an Offer to Purchase Rx Solutions, Inc.
     The  offer  calls  for  the  Company  to  purchase  100% of the stock of Rx
     Solutions,  Inc.  for  $2,250,000 payable as $1,100,000 cash, $750,000 as a
     five-year,  6%  note  payable  with  interest-only payment for the first 18
     months  and  $400,000  as  Series  B  preferred  stock.

     POSSIBLE  LEGAL  ACTION  -  In  March  2003,  the Company was notified that
     Pre-Employment Screening, Inc., Lawrence J. Altman, Gateway Legal Services,
     Inc.  and Fun Services of Kansas City plan to file suit to seek $12,000 for
     alleged  violations  of  the Telephone Consumer Protection Act. The Company
     denies  the allegations and intends to vigorously defend themselves in this
     matter.  No accrual for possible losses or settlements has been recorded in
     the  accompanying  financial  statements.

     SERIES  A  PREFERRED  STOCK  ISSUANCE  -  In April 2003, the Company issued
     47,000  shares of Series A preferred stock for cash of $23,500, or $.50 per
     share.


                                       45
<PAGE>