<PAGE>


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


                                   FORM 10-QSB/A
                                  AMENDMENT NO. 1


[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

            For the quarterly period ended June 30, 2003

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

            For the transition period from __________ to __________

            Commission file number  0-31459


                              Valesc Holdings Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Delaware                                       23-3048857
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                  16200 Addison Road, Suite 190, Addison, TX  75001
        -----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 931-1989
        -----------------------------------------------------------------
                           (Issuer's telephone number)

                 -----------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


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


<PAGE>

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 16,708,420 shares of common
stock, $.0001 par value per share, issued and outstanding as of August 22, 2003.
14,224 shares of Series B Convertible Preferred stock, $.0001 par value per
share, issued and outstanding as of August 22, 2003.

           Transitional Small Business Disclosure Format (check one);
           Yes [  ]  No  [X]


















                                        2

<PAGE>


                              Valesc Holdings Inc.

                                      INDEX

PART I - FINANCIAL INFORMATION

  Item 1. Financial Statements.                                           Page

          Consolidated Balance Sheet [Unaudited]                            4
          Consolidated Statements of Operations [Unaudited]                 5
          Consolidated Statements of Cash Flows [Unaudited]                 6
          Notes to Unaudited Consolidated Financial Statements              7

  Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.                                                     17

  Item 3. Controls and Procedures.                                         20

PART II - OTHER INFORMATION

  Item 2. Changes in Securities.                                           21

  Item 4. Submission of Matters to a Vote of Security Holders.             23

  Item 6. Exhibits and Reports on Form 8-K.                                24



























                                        3

<PAGE>

PART I - FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

                      VALESC HOLDINGS INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET [UNAUDITED]
                                 JUNE 30, 2003

ASSETS
Current Assets
 Cash and cash equivalents                                $   196,476
 Accounts receivable                                           29,601
 Commissions receivable, net                                   98,326
 Inventory                                                     18,171
                                                          -----------
   Total Current Assets                                       342,574
                                                          -----------

Property and Equipment - net                                   10,307
Goodwill - Morris Medical                                     200,000
Goodwill - Dimension Distributing                             249,105
Security and Deposits                                           4,488
                                                          -----------
TOTAL ASSETS                                              $   806,474
                                                          ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
 Notes payable                                            $   147,740
 Bank loan - current portion                                   10,251
 Bank - credit line payable                                    12,000
 Accounts payable and accrued expenses                        354,771
 Accrued interest payable                                      23,587
 Advance payable - related party                               66,023
 Officers' salaries payable                                    99,325
                                                          -----------
Total Current Liabilities                                     713,697
                                                          -----------


 Bank Loan - Long-Term Portion                                 20,673
                                                          -----------
TOTAL LIABILITIES                                             734,370
                                                          -----------

COMMITMENTS AND CONTINGENCIES [NOTE F]                           -

Potentially refundable common stock                            40,000

STOCKHOLDERS' DEFICIT
Preferred Stock, $0.0001 par value,
 20,000,000 shares authorized, 8,000
 issued and outstanding                                             8
Common Stock, $0.0001 par value,
 100,000,000 shares authorized,
 16,304,420 shares issued and outstanding                       1,630
Additional paid-in capital                                  1,707,758
Accumulated deficit                                        (1,677,292)
                                                          -----------
TOTAL STOCKHOLDERS' EQUITY                                     32,104
                                                          -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $   806,474
                                                          ===========


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


                                       4

<PAGE>


                      VALESC HOLDINGS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  [UNAUDITED]

<TABLE>
<CAPTION>

                                               Six Months Ended June 30,     Three Months Ended June 30,
                                                  2003          2002              2003          2002
                                                  ----          ----              ----          ----
<S>                                            <C>           <C>               <C>           <C>
Commission income                              $  415,088    $  109,180        $  215,398    $   54,556
                                               ----------    ----------        ----------    ----------
Sales                                               9,123          -                9,123          -
Cost of Sales                                       5,826          -                5,826          -
                                               ----------    ----------        ----------    ----------
Gross Profit                                        3,297          -                3,297          -
                                               ----------    ----------        ----------    ----------
Gross Income from operations                      418,385       109,180           218,695        54,556
                                               ----------    ----------        ----------    ----------


Selling, general and administrative expenses      798,411       418,437           471,256       253,597
                                               ----------    ----------        ----------    ----------
Total Operating Expenses                          798,411       418,437           471,256       253,597
                                               ----------    ----------        ----------    ----------
Loss from Operations                             (380,026)     (309,257)         (252,561)     (199,041)
                                               ----------    ----------        ----------    ----------

Other income and [Expenses]
Interest expense                                  (49,946)      (56,437)          (30,322)      (27,231)
Forgiveness of debt                               117,060          -              117,060          -
                                               ----------    ----------        ----------    ----------
NET LOSS                                       $ (312,912)   $ (365,694)       $ (165,823)   $ (226,272)
                                               ==========    ==========        ==========    ==========

Net loss per share basic and diluted           $    (0.02)   $    (0.04)       $    (0.01)   $    (0.02)
                                               ==========    ==========        ==========    ==========

Weighted average shares outstanding
basic and diluted                              13,421,424    10,177,297        14,653,222     9,708,548

</TABLE>



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




                                       5

<PAGE>


                      VALESC HOLDINGS INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
                          FOR THE PERIOD ENDED JUNE 30,



<TABLE>
<CAPTION>

                                                                                     2003            2002
                                                                                     ----            ----
<S>                                                                              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                            $(312,912)       $(365,694)
  Net Loss
  Adjustments to reconcile net income to net cash
    provided by opereating activities:
      Depreciation and amortization                                                    550           33,509
      Write off of property and equipment                                           (2,743)
      Issuance of warrants for services                                               -               6,800
      Net assets acquired in Dimension Distributing, Inc. purchase                 (43,906)
      Noncash interest accretion                                                    31,801           40,813
      Gain on forgiveness of debt                                                 (117,060)
      Changes in operating activities net of effects from acquisition
        of Dimension Distributing, Inc. (DDI)
          Decrease (Increase) in operating assets
            Accounts receivable                                                     72,270            8,886
            Commissions receivable - net                                           (30,122)
            Inventory                                                                  217
            Prepaid expenses                                                          -              (2,689)
            Security and deposits                                                   (3,723)
          Increase (Decrease) in operating liabilities
            Accounts payable and accrued expenses                                  (37,490)          32,367
            Accrued intereste                                                       12,670             -
            Officer salaries payable                                                 5,597           43,500
                                                                                 ---------        ---------
              Net cash used by operating activities                               (424,851)        (202,508)
                                                                                 ---------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of equipment                                                               -              (1,137)
  Acquisition of Dimension Distributing, Inc., net of cash acquired                 17,356
                                                                                 ---------        ---------
              Net cash used by investing activities                                 17,356           (1,137)
                                                                                 ---------        ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash payments for bank loan                                                       (5,583)
  Cash paid for settlement of notes payable                                       (129,500)
  Cash paid towards advance payable - related party                                   (504)
  Proceeds from potentially refundable common stock                                   -              40,000
  Proceeds from issuance of common stock                                           699,451          185,000
                                                                                 ---------        ---------
              Net cash provided [used] by financing activities                     563,864          225,000
                                                                                 ---------        ---------

Net increase (decrease) in cash                                                    156,369           21,355

Cash, beginning of year                                                             40,107           26,311
                                                                                 ---------        ---------
Cash, end of year                                                                $ 196,476        $  47,666
                                                                                 =========        =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest                                                           $   1,554        $    -
                                                                                 =========        =========

NON CASH DISCLOSURES
Issuance of common stock from conversion of debt and interest                    $  37,685        $    -
                                                                                 =========        =========
Issuance of common stock for the settlement of accrued officers payable          $ 105,763        $    -
                                                                                 =========        =========
Issuance of preferred stock for acquisition of Dimension Distributing, Inc.      $ 249,105        $    -
                                                                                 =========        =========

</TABLE>



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


                                       6

<PAGE>


                      VALESC HOLDINGS INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                Three and Six Months Ended June 30, 2003 and 2002

NOTE A - DESCRIPTION OF BUSINESS AND FORMATION OF COMPANY

The accompanying unaudited consolidated financial statements of Valesc Holdings
Inc. and Subsidiaries ("the Company") consisting of OJI Surgical, Inc. (acquired
on December 17, 2001), Morris Medical, Inc. (acquired on December 15, 2002) and
Dimension Distributing, Inc. (acquired on June 18, 2003) have been prepared in
accordance with Regulation S-B promulgated by the Securities and Exchange
Commission and do not include all the information and footnotes required by
generally accepted accounting principals in the United States of America for
complete financial statements. In the opinion of management, these interim
financial statements include all adjustments necessary in order to make the
financial statements not misleading. The results of operations for such interim
periods are not necessarily indicative of results for a full year. The unaudited
consolidated interim financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto of the Company and
management's discussion and analysis of financial condition and results of
operations included in the annual report on Form 10-KSB for the year ended
December 31, 2002. All material inter-company accounts and transactions between
the Company and its subsidiaries have been eliminated.

Valesc Inc., a New Jersey corporation ("Valesc NJ"), was incorporated on October
24, 2000, and at the date of inception was owned 100% by Atlas Holdings Inc
("Atlas"). Atlas was owned 50% by Jeremy Kraus, the Company's Chairman and Chief
Executive Officer, 25% by Samuel Cohen, the Company's President and Director
and, 12.5% by Garrett Miller, the Company's Director and former Vice President.

NetCentral Capital Fund, Inc. ("NetCentral") was incorporated in the State of
Delaware on June 2, 2000, for the specific purpose of providing a method,
through a merger or otherwise, for a foreign or domestic private company to
become a reporting company with a class of registered securities. NetCentral had
a single shareholder. It had no operating business from the date of inception
until March 22, 2001. At March 22, 2001, NetCentral had no assets. From
inception through March 22, 2001 NetCentral had no revenues, and expenses of
approximately $30,000 of professional fees relating to the formation.

Founded as an Oregon corporation in 1988, OJI Surgical, Inc. ("OJI") is a
manufacturer's representative for medical devices and health care products,
primarily in the orthopedic field. OJI serves customers in the Pacific Northwest
of the US from its Portland, Oregon base.

Founded as a Texas company in 1991, Morris Medical, Inc. d/b/a Medex, Inc.
("Medex") is a contract sales organization for medical devices and health care
products, primarily in the orthopedic field. Medex serves customers in the
northern parts of Texas.




                                       7

<PAGE>

Founded as a Connecticut company in 1992, Dimension Distributing, Inc. ("DDI")
is a contract sales and distribution organization for medical devices and health
care products, primarily in the wound care and urology field. DDI serves
customers throughout New England.

On June 18, 2003, TIM KAIN sold DDI to Valesc. Valesc received 100% of the
outstanding stock of DDI in exchange for 8,000 shares of its Class B preferred
stock. The acquisition expanded Valesc's sales area to the New England region
and increased the variety of products it sells. The Company recorded significant
goodwill associated with the merger (see note G).

NOTE B - LIQUIDITY AND GOING CONCERN

The accompanying financial statements of the Company have been prepared
assuming the Company will continue as a going concern. The Company has invested
a significant amount of its effort and cash in the development of its business
plan. As of June 30, 2003, the Company has a stockholders' equity of
approximately $ 32,000. The Company has incurred recurring losses including
approximately ($313,000) for the six months ended June 30, 2003. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The Company will be required to seek external financing to continue
developing its business plan and to consummate planned acquisitions, and to
cover the overhead costs associated with Valesc. Operating losses are expected
to continue throughout 2003.

During the next year, the Company intends to devote its time and resources to
the growth of its medical device sales subsidiaries. The Company currently sells
a variety of medical products, including orthopedic implants and surgical
implements and tools, wound care products and urological implants and supplies.
The Company intends to expand its sales of these products in two ways: (i) the
addition of sales personnel to increase penetration in market areas already
covered and to expand its geographic coverage, and (ii) the addition of new
product lines for sales in these areas.

In addition to normal hiring costs, medical sales companies like the Company's
subsidiaries generally "sponsor" new salespeople for a period of up to one year
during which the Company subsidizes the employee's wages until they have built a
sufficient customer base to support themselves solely on a commission basis. The
Company cannot predict at what rate these salespeople will generate significant
additional revenues to offset these costs.

In order for the Company's expansion to be successful, it will need to greatly
expand its administrative capabilities. The Company intends to invest
approximately $100,000 in the purchase, customization and installation of
accounting and back-office software to enable it to manage a larger number of
transactions, customers and suppliers without substantially increasing its
administrative staff. The Company will need to hire at least one additional
employee to perform administrative tasks. The Company also may need to rent
office space sufficient to house its expanded personnel and back office system.

The Company will need significant new financing in order to fund our expansion
plan. The total expenses of the expansion plan as outlined above will approach
$400,000 during the next year. Although the Company expects additional costs to
be offset by increased revenues, it cannot be certain whether increases in
revenues will occur and whether any such increases will offset costs.

Management's plans with respect to its liquidity issues include the following:



                                       8

<PAGE>

o  The Company recently began trading on the Over-the-Counter Bulletin Board; a
   change that management believes will increase investor interest in the
   Company.

o  Raise additional funding through the sale of debt and equity instruments to
   fund activities.

o  From January 1 through June 30, 2003, the Company received proceeds from the
   issuance of common stock of approximately $699,500.

To date, the Company has supported its activities through debt and equity
investments. Management plans to continue to seek the funding required to
finance operations as the Company commences its business plan and expansion
plan. Failure to find additional financing, create a public market for its
stock, and execute its expansion plan, could negatively impact the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. REVENUE RECOGNITION

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin 101, "Revenue Recognition," to provide guidance on the
recognition, presentation, and disclosure of revenue in financial statements.
Our policies on revenue recognition are consistent with this bulletin.
Commission income as a manufacturers' representative on new product sales are
recorded in the period during which the underlying product sale occurs. Product
returns by our customers are rare due to the specialized nature of the product,
and therefore, we have concluded that no material allowance for refundable
commission income on returned products is necessary at June 30, 2003 and June
30, 2002. Our revenues from product sales and service income are derived from
the sale of new products distributed by us, and the refurbishment of used
products. Revenue is recognized as products are delivered to our customers.

2. EARNINGS (LOSS) PER SHARE

Basic income (loss) per share is computed by dividing the income (loss) for the
period by the weighted average number of common shares outstanding during the
period. Diluted income (loss) per share is computed by dividing the loss for the
period by the weighted average number of common shares adjusted for the dilutive
effect of any potential common shares issuable during the period. The amount of
common stock equivalents not considered in the loss per share calculation
because their effect was antidilutive was 2,776,250 and 2,841,500 for the six
months ended June 30, 2003 and 2002, respectively. Equity instruments which
could dilute earnings per share in the future are listed in Note D2.

3. USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates and assumptions. Significant estimates




                                       9

<PAGE>

that affect the financial statements include, but are not limited to, the
valuation of options and warrants granted and the valuation allowance for the
deferred tax asset.

4. INCOME TAXES

The Company uses the liability method for reporting income taxes, under which
current and deferred tax liabilities and assets are recorded in accordance with
enacted tax laws and rates. Under this method, the amounts of deferred tax
liabilities and assets at the end of the period are determined using the tax
rate expected to be in effect when taxes are actually paid or recovered. Future
tax benefits are recognized to the extent that realization of such benefits is
more likely than not. The deferred assets and liabilities are determined based
upon the differences between financial reporting and tax basis of assets and
liabilities and are measured using the enacted tax rates and laws that are
expected to be in effect when the differences are assumed to reverse.

5. FINANCIAL INSTRUMENTS / CREDIT RISK

SFAS No. 107, "Disclosures about Fair Values of Financial Instruments", requires
disclosing fair value to the extent practicable for financial instruments which
are recognized or unrecognized in the balance sheet. The fair value of the
financial instruments disclosed herein is not necessarily representative of the
amount that could be realized or settled, nor does the fair value amount
consider the tax consequences of realization or settlement. For certain
financial instruments, including cash, accounts receivable, accounts payable,
accrued expenses and consultants payable, the fair values were determined based
on the near term maturities of such obligations. The fair value of debt was
determined based on current rates at which the Company could borrow or advance
funds with similar remaining maturities, which amount approximates its carrying
value.

The Company maintains cash deposits with a major bank which from time to time
may exceed the federally insured limits of $100,000. The Company exceeded this
limit at June 30, 2003 by $13,500. The Company periodically assesses the
financial condition of the bank and believes that the risk of any loss is
minimal. Sales of products from two primary suppliers provided approximately 44%
and 25% respectively, of our total revenue for the six months ended June 30,
2003. Approximately 81% of commissions receivable at June 30, 2003 is comprised
of three different customers. The Company routinely assesses the financial
strength of all its clients and, based upon factors surrounding the credit risk
of the clients may establish an allowance for uncollectible accounts in the
future. At June 30, 2003, the Company believes that it does not have an accounts
receivable credit risk, and therefore it has not established an allowance for
uncollectible accounts. As of June 30, 2003 the Company has an allowance of
$3,000 against commissions receivable. The Company does not require collateral
or other securities to support financial instruments subject to credit risk.

6. LONG-LIVED ASSETS AND IMPAIRMENT OF LONG-LIVED ASSETS

The Company records impairment losses on long-lived assets used in operations or
expected to be disposed of when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying




                                       10

<PAGE>

amounts of those assets. No impairment losses were recorded during each of the
operating periods being reported thereon.

NOTE D - CAPITAL STOCK OF THE COMPANY

Valesc Holdings Inc. authorized capital stock consists of 100,000,000 shares of
Common Stock, $.0001 par value per share, and 20,000,000 shares of preferred
stock, $.0001 par value per share. Holders of Common Stock are entitled to
receive such dividends as may be declared by the Board of Directors out of funds
legally available therefore and, in the event of liquidation, to share pro rata
in any distribution of assets after payment of liabilities. The Board of
Directors is not obligated to declare a dividend and it is not anticipated that
dividends will be paid in the foreseeable future. Holders of Common Stock do not
have preemptive rights to subscribe to any of our additional shares. There are
no conversion, redemption, sinking fund or similar provisions regarding the
Common Stock. All of the outstanding shares of Common Stock are fully paid and
non-assessable and all of the shares of Common Stock offered hereby will be,
upon issuance, fully paid and non-assessable. The Company has designated a Class
B preferred stock generally for use as consideration for acquisitions. The terms
of the Class B preferred stock are that each share is convertible at the
holder's option into 1,000 common shares divided by the then current market
price of the common stock. The Class B preferred has no voting rights, liquidity
preference or special dividend. Any Class B preferred shares which are
unconverted 3 years after issuance will be automatically converted at that time.

1. COMMON STOCK ISSUANCES BY VALESC HOLDINGS INC.

In two common stock transactions during 2002, the Company sold 62,500 shares of
common stock to Brian Kraus and 37,500 shares to Mark Walsh in sales intended to
qualify for the private placement exemption provided under Section 4(2) of the
Securities Act. In response to the due diligence requests of Mr. Kraus and Mr.
Walsh prior to the sales, the Company provided them with copies of our
registration statement on Form SB-2 currently on file with the Commission, but
not yet effective, and available publicly on the Commission's EDGAR database. By
providing copies of the Form SB-2, the Company may have engaged in a "general
solicitation" invalidating the Section 4(2) exemption from registration. Without
the Section 4(2) exemption, the sales of shares to Mr. Kraus and Mr. Walsh would
have violated Section 5 of the Securities Act, in which case the Company could
be liable to Mr. Kraus and Mr. Walsh under Section 12(a) (1) of the Securities
Act for the amount of the proceeds ($40,000) plus interest during the one year
period following the sales. If the Company is forced to repay these proceeds, it
would impact our cash flow and could cause us to have insufficient working
capital.

On January 22, 2003, we entered into an arrangement with First China Capital,
Inc., a Chinese corporation with its principal offices located in Beijing,
China, for the purchase from time to time by First China of up to 10,000,000
shares of our common stock in offshore transactions for 30% of the bid price per
share on the OTC Bulletin Board on the day of purchase. As of June 30, 2003, we
have sold 1,485,406 shares of common stock pursuant to this arrangement, with
net proceeds of approximately $105,800.

On February 25, 2003, we entered into arrangements with Simon Worship and Pan
European Investment, Spanish corporations with their principal offices located
in Madrid, Spain and


                                       11

<PAGE>

Marbella, Spain respectively, for the purchase from time to time of up to
2,000,000 shares of our common stock by each in offshore transactions at a
discount to the price per share on the OTC Bulletin Board on the day prior to
the date of purchase. As of June 30, 2003, we have sold 2,754,300 shares of
common stock pursuant to this arrangement, with net proceeds of approximately
$593,400.

2. STOCK OPTION PLAN

On April 6, 2001, the Company adopted a Stock Option Plan (the "Option Plan").
The Option Plan authorized the granting of both incentive and nonqualified stock
options for up to 1,500,000 shares of common or preferred stock to officers,
directors and key employees. The objectives of the Option Plan include
attracting and retaining the best personnel, providing for additional
performance incentives, and promoting the success of the Company by providing
employees with the opportunity to acquire both Common and Preferred Stock.
Options under the company's Option Plan generally vest over a four-year period,
and generally expire ten years after the grant date.

On January 1, 2001, 900,000 stock options were granted pursuant to employment
contracts. 300,000 of the granted shares become exercisable on each of December
31, 2001, 2002 and 2003. There were no options exercised through March 31, 2003.
300,000 options were forfeited by Garrett Miller as part of his separation
agreement with the Company. The exercise price of the first-year element of the
stock option grant is below the fair value of the Company's stock, therefore a
2001 compensation charge of $75,000, computed under the intrinsic value method,
was recognized over the one-year vesting period. The second and third-year
elements contain an exercise price at or above the fair value of the Company's
stock at the date of grant and therefore no compensatory charge has been
recorded.

NOTE E - NOTES, BANK BORROWINGS AND ADVANCE PAYABLE

The principal amount of these liabilities matures as follows:

2003      $236,014
2004      $ 11,267
2005      $  9,406
          --------
          $256,687
          --------

1. RELATED PARTY NOTES

During the year ended December 31, 2001, the Company received advances from
related parties aggregating $78,000. These notes included detachable warrants.
These loans bear interest at a rate of 14% per annum. Each of the notes is
guaranteed by the Company's officers and directors. Of the total proceeds of
this financing, approximately $49,200 was allocated to warrants.


                                       12

<PAGE>

Approximately $18,000 of the net Notes Payable of $28,800 was converted to
equity during the year ended December 31, 2002. All of these notes have been
subsequently converted to equity.

During the year ended December 31, 2002, the Company received advances from two
related parties aggregating $57,500. One loan ($50,000) bears interest at a rate
of 10% per annum and the other loan ($7,500) bears interest at a rate of 40% per
annum. The loan for $7,500 was repaid on March 31, 2003. The loan for $50,000
plus accrued interest was repaid on May 28, 2003 with a cash payment of $15,000
and the remaining $37,500 being converted into common stock at a price of $0.70
per share. Related party interest expense for the six months ended June 30, 2003
was approximately $2,000.

2. NON-RELATED PARTY NOTES

The Company is current in payments of its note for $175,000 to Christopher
Coons. As of June 30, 2003 $90,000 plus accrued interest remained outstanding.

On March 25, 2003 the Company's note for $15,000 to Dean Vilone was repaid.

On March 11, 2003, the Company's note for $5,000 to Tim Holk was repaid.

3. LINE OF CREDIT

The Company as of June 30, 2003 had an outstanding credit line balance of
approximately 12,000 due to a financial institution. The line of credit has a
ceiling amount of $50,000 and interest is floated at 1% over the prime rate. The
credit line is secured and collateralized by all of the assets of DDI [accounts
receivable, fixed assets and inventory]. The credit line expires on December 31,
2003.

4. ADVANCES PAYABLE -- RELATED PARTY


The Company from time to time is advanced funds from a shareholder who is also
an officer of the Company. As of June 30, 2003, approximately $66,000 is due to
this shareholder. The shareholder requires no collateral to secure the advance
and there are no stated provisions for accrued interest. The terms of the
advance do not provide for minimum debt payments and the advance is classified
as a short-term liability.


NOTE F - COMMITMENTS AND CONTINGENCIES

1. LEASES

The Company's OJI subsidiary entered into a lease agreement beginning March 1,
2002 which has a monthly rent expense of $880 and is on a month-to-month basis.

The Company's Medex subsidiary entered into a 22-month lease beginning February
2003 which has a monthly rent expense of $1,500.

The Company's DDI subsidiary entered into a lease ending July 2005 which has a
monthly rent expense of $750.

2. EMPLOYMENT AGREEMENTS

Effective January 1, 2001, the Company entered into three-year employment
agreements with Jeremy Kraus and Samuel Cohen containing identical terms. During
2003, these agreements provide for a salary of the greater of (a) $60,500 or (b)
2.5% of the total revenue of the Company and its subsidiaries for such year, up
to a maximum of $181,500.

Accrued salaries under these agreements were approximately $99,000 at June 30,
2003.

In addition to the foregoing, each executive was granted the option to purchase
a total of 300,000 shares of Common Stock in equal installments of 100,000
shares at the end of each year of employment. The options shall be exercisable
for a period of three years following the date of vesting, and the exercise
price shall be as follows: (i) $.25 per share for the 100,000 shares that





                                       13

<PAGE>

vest after the first year; (ii) $.50 per share for the 100,000 shares that vest
after the second year; and (iii) $.75 per share for the 100,000 shares that vest
after the third year.

On March 24, 2003 Garrett A. Miller resigned as a Vice President of the Company,
terminating his employment agreement. The Company owed Mr. Miller approximately
$30,000 in accrued but unpaid salary as of June 30, 2003.

Effective January 1, 2002 and in connection with our acquisition of OJI
Surgical, Inc., OJI entered into an employment agreement with its President,
Harry Kraus. The agreement provides as follows: (A) an initial term of one year,
with automatic one-year renewal terms thereafter; (B) a monthly salary of
$10,800; (C) all accrued and unpaid salary shall be immediately due and payable
upon the occurrence of any "change of control", defined as the sale of a
controlling interest in OJI's capital stock to one or more buyers acting in
concert, the sale of all or substantially all of our assets, or any corporate
merger or consolidation resulting in one or more parties, who did not previously
hold a controlling interest in OJI's capital stock, owning a controlling
interest in OJI's capital stock; and (D) the executive shall be eligible to
participate in bonuses awarded to senior management to the extent that such
bonuses are awarded or authorized by the Board of Directors of OJI from time to
time.

Effective January 1, 2003 and in connection with our acquisition of Medex, Medex
entered into an employment agreements with its President, Edward Kraus and its
key salesperson, Robert Kraus. The agreements provides as follows: (A) an
initial term of one year, with automatic one-year renewal terms thereafter; (B)
salary in the form of all commission income attributable to each up to $13,000,
plus 50% of amounts in excess of $13,000; (C) the executives shall be eligible
to participate in bonuses awarded to senior management to the extent that such
bonuses are awarded or authorized by the Board of Directors of Medex from time
to time.

Effective June 18, 2003 and in connection with our acquisition of DDI, DDI
entered into an employment agreement with its President, Tim Kain. The agreement
provides as follows: (A) an initial term of five years, with automatic one-year
renewal terms thereafter; (B) salary limited by the requirement that the DDI
subsidiary achieve a net income of 5% of sales below $1MM per year and 10% of
all sales above $1MM per year (C) the executive shall be eligible to participate
in bonuses awarded to senior management to the extent that such bonuses are
awarded or authorized by the Board of Directors of DDI from time to time.

3. DISTRIBUTION AGREEMENT

The Company entered into an exclusive distribution agreement with BioAccess in
December 2002 and expects to receive its first shipment of goods for sale during
the third quarter of 2003. Unlike the Company's sales representation
arrangements, the Company will carry inventory and take ownership of the
products it sells when acting as a distributor.

NOTE G - GOODWILL

The Company recorded goodwill of $200,000 associated with the acquisition of
Medex. At the date of acquisition, Medex had assets of $47,775, liabilities of
$43,369 and a book value of







                                       14

<PAGE>

$4,406. The purchase price of Medex was $204,406, based on a per share valuation
of $0.314 per share for 650,000 common shares. This per share value was arrived
at based on a comparison of recent purchases of restricted Valesc stock by
non-related party investors, as well as an evaluation of the additional
illiquidity of the stock based on shareholders agreements entered into by the
sellers. The estimated future cash flows of the Medex subsidiary exceed the
goodwill. However, those cash flows rely on several estimates including the
success of the BioAccess product line with Medex's customers and the Company's
ability to fund the expansion of Medex's sales force. If these new initiatives
are less successful than expected, Medex will fail to achieve the projected
profitability. In this case, the Company will re-evaluate the appropriateness of
the goodwill and may take a charge due to impairment of the goodwill.

The Company recorded goodwill of $249,000 associated with the acquisition of
DDI. At the date of acquisition, DDI had assets of approximately $141,300,
liabilities of approximately $97,400 and a book value of $43,900. The purchase
price of DDI was approximately $309,000, based on a common stock equivalent per
share valuation of $0.38 per share for 8,000 preferred shares. This per share
value was arrived at based on a comparison of recent purchases of restricted
Valesc stock by non-related party investors, as well as an evaluation of the
illiquidity of the stock and terms prior to conversion to common stock. The
estimated future cash flows of the DDI subsidiary exceed the goodwill. However,
those cash flows rely on several estimates including the success of new product
lines with DDI's customers and the Company's ability to fund the expansion of
DDI's sales force. If these new initiatives are less successful than expected,
DDI will fail to achieve the projected profitability. In this case, the Company
will re-evaluate the appropriateness of the goodwill and may take a charge due
to impairment of the goodwill.

NOTE H - SUBSEQUENT EVENTS

On July 11, 2003 the Company formed a new subsidiary, HSMG, Inc. to serve as a
vehicle for master representation agreements with specialty product
manufacturers and service providers. Edward Kraus, President of Medex will also
serve as the President of HSMG.

On August 7, 2003 the Company, through its HSMG, Inc. subsidiary entered into a
master representation agreement with Nuell Inc. for the national sales and
marketing of Nuell's products and services. Nuell is primarily in the business
of repairing and refurbishing

NOTE I - PRO FORMA INFORMATION

The following selected financial is presented to give effect to the DDI
acquisition as if it had occurred at the beginning of the periods presented.







                                       15

<PAGE>

                   PRO FORMA [UNAUDITED] COMBINED INFORMATION

                             6 MONTHS ENDED            3 MONTHS ENDED
                               JUNE 30,                  JUNE 30,
                            2003        2002          2003        2002

Revenues                  707,688     411,099       339,467     175,364
Net Loss                 (289,414)   (319,927)     (190,851)   (213,320)
Loss per Share:
  Basic                     (0.02)      (0.03)        (0.01)      (0.02)
  Diluted                   (0.02)      (0.03)        (0.01)      (0.02)































                                       16


<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

REVENUE

Revenues generated amounted to $424,211 for the six months ended June 30, 2003
and $109,180 for the six months ended June 30, 2002. Revenues during the three
month periods ended June 30, 2003 and 2002 were $224,521 and $54,556,
respectively. Most of these increases can be attributed to our acquisition of
Morris Medical, Inc. and the inclusion of its sales. We also experienced
an increase in sales personnel at our OJI Surgical subsidiary, where we continue
to attempt to build revenues from our newer Ascension and Hand Innovations
product lines. OJI experienced revenue increases of 29% and 23% over the year
earlier period for the three and six month periods, respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Our operating expenses increased from $418,437 for the six months ended June 30,
2002 to $798,411for the six months ended June 30, 2003. These increases were
primarily a result of the inclusion of Morris Medical's expenses. In
addition, we incurred expenses associated with the acquisition of Dimension
Distributing, primarily legal and due diligence fees. The remaining Selling,
General and Administrative expenses for Valesc and OJI were relatively
consistent for both periods. Similarly, the operating expenses increased from
$253,597 for the three months ended June 30, 2002 to $471,256 for the three
months ended June 30, 2003. This increase is also primarily a result of the
inclusion of Morris Medical's expenses.

INTEREST EXPENSE

Interest expense decreased from $56,437 in the six months ended June 30, 2002 to
$49,946 in the six months ended June 30, 2003. During the three month periods
ended June 30, 2003 and 2002 interest expenses were $30,322 and $27,231,
respectively. Interest expense was reduced by the Company's conversion of
certain loans to equity and by the repayment of other loans.
























                                       17

<PAGE>

NET INCOME (LOSS)

Our reported net loss of ($312,912) for the six months ended June 30, 2003
declined 14% as compared to a net loss of ($365,694) for the six months ended
June 30, 2002. In the three months ended June 30, 2003 we had a loss of
($165,828,) a decline from a loss of ($226,272) during the three months ended
June 30, 2002. The decline in losses was due primarily to improved results at
OJI, as well as the inclusion of DDI's profits for the final 12 days of the
current period. While the Company had improved results from its OJI subsidiary,
these were not large enough to offset the Company's significant overhead.

SIGNIFICANT COMMITMENTS

Our significant financial commitments include bank and other loans, customary
payables and employment contracts. Approximately $$213,800 of our non-bank debt
is categorized as short-term as of June 30, 2003. We expect to be able to meet
our obligations under these agreements, or to receive extensions of these
obligations as we have in the past.

Our bank loan has a current portion of approximately $10,250 and is being
retired in equal installments of approximately $1,000 monthly.

We have $99,000 in accrued officers' salaries on which we pay no interest, and
continue to be liable for $10,000 monthly in compensation to our officers.

SUMMARY OF CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin 101, "Revenue Recognition," to provide guidance on the
recognition, presentation, and disclosure of revenue in financial statements.
Our policies on revenue recognition are consistent with this bulletin.
Commission income as a manufacturers' representative on new product sales are
recorded in the period during which the underlying product sale occurs. Product
returns by our customers are rare due to the specialized nature of the product,
and therefore, we have concluded that no material allowance for refundable
commission income on returned products is necessary at June 30, 2003 and June
30, 2002. Our revenues from product sales and service income are derived from
the sale of new products distributed by us, and the refurbishment of used
products. Revenue is recognized as products are delivered to our customers.

VALUATION OF OPTIONS AND WARRANTS

The Company has issued substantial amounts of warrants to purchase common stock
in connection with financing activities and as payment to non-employees for
services and other items. We recorded the cost attributable to those issues on
the basis of the Black-Scholes option valuation model. The use of this model
requires some highly subjective assumptions including expected stock price
volatility. The lack of comparable companies in the public markets and our
limited market experience tend to make those assumptions even more subjective.





                                       18

<PAGE>

GOODWILL

The Company recorded goodwill of $200,000 associated with the acquisition of
Medex (see Note G). At the date of acquisition, Medex had assets of $47,775,
liabilities of $43,369 and a book value of $4,406. The purchase price of Medex
was $204,406, based on a per share valuation of $0.314 per share for 650,000
shares. This per share value was arrived at based on a comparison of recent
purchases of restricted Valesc stock by non-related party investors, as well as
an evaluation of the additional illiquidity of the stock based on shareholders
agreements entered into by the sellers.

The estimated future cash flows of the Medex subsidiary exceed the goodwill.
However, those cash flows rely on several estimates including the success of the
BioAccess product line with Medex's customers and the Company's ability to fund
the expansion of Medex's sales force. If these new initiatives are less
successful than expected, Medex will fail to achieve the projected
profitability. In this case, the Company will re-evaluate the appropriateness of
the goodwill and may take a charge due to impairment of the goodwill.

USE INFORMATION FROM ABOVE

The Company recorded goodwill of $249,000 associated with the acquisition of DDI
(see Note G). At the date of acquisition, DDI had assets of approximately
$141,300, liabilities of approximately $97,400 and a book value of $43,900. The
purchase price of DDI was approximately $309,000, based on a common stock
equivalent per share valuation of $.38 per share for 8,000 preferred shares.
This per share value was arrived at based on a comparison of recent purchases of
restricted Valesc stock by non-related party investors, as well as an evaluation
of the illiquidity of the stock and terms prior to conversion to common stock.
The estimated future cash flows of the DDI subsidiary exceed the goodwill.
However, those cash flows rely on several estimates including the success of new
product lines with DDI's customers and the Company's ability to fund the
expansion of DDI's sales force. If these new initiatives are less successful
than expected, DDI will fail to achieve the projected profitability. In this
case, the Company will re-evaluate the appropriateness of the goodwill and may
take a charge due to impairment of the goodwill.

STOCK-BASED COMPENSATION

As permitted by the Statement of Financial Accounting Standards No. 123 (SFAS
No. 123), Accounting for Stock-Based Compensation, the Company accounts for
stock-based employee compensation arrangements in accordance with provisions of
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees." In accordance with APB Opinion No. 25, compensation expense for
stock options issued to employees is based on the difference, on the date of
grant, between the quoted market price of the Company's stock and the exercise
price of the option. The Company accounts for equity instruments issued to
non-employees in accordance with the provisions of SFAS No. 123 and Emerging
Issues Task Force (EITF) Issue No. 96-18, "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction With
Selling, or in Conjunction With Selling, Goods or Services." All transactions in
which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. The measurement date of the fair value of
the equity instrument issued is the date on which the counter-party's
performance is complete.








                                       19


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES OF THE COMBINED ENTITY

As of June 30, 2003, we had cash of approximately $196,000, a working capital
deficit of approximately $(371,000) and stockholders' equity of approximately
$32,000. Other than as disclosed in Note E to the financial statements, we have
no unused credit or financing facility in place at the present time.

Valesc received approximately $699,500 during the six months ended June 30, 2003
from private placements of equity. Cash used in operating activities of Valesc
was approximately $425,000 during the period.

The consolidated financial statements indicate that the profitability and
operating contribution of OJI, Medex and DDI have not been sufficient to offset
the developmental and expansion expenses of Valesc. Until we can significantly
expand the businesses of the subsidiaries, we will be unlikely to achieve
profitability. As of June 30, 2003, our current assets are less than the cash
requirements of the Company for three months' activities. As a result of our
lack of profitability, our accountants, in their report on our financial
statements for the year ended December 31, 2002, included an explanatory
paragraph indicating there is substantial doubt about our ability to continue as
a going concern.

The time and money required before we can complete our expansion plan and
implement our growth strategy cannot be estimated with precision. We expect
significant expenditures associated with entering into the expansion plan,
including the cost of hiring and "sponsoring" new salespeople and the cost of
the upgraded software and administrative infrastructure necessary to manage
them, as well as travel and other expenses associated with acquiring new product
lines and territories. Our anticipated cash requirements for the next twelve
months are approximately $750,000, which includes $400,000 to fund the expansion
plan and an expected cash-flow deficit from regular operations and repayment of
debt of $300,000. Because we do not expect the expansion plan to begin
contributing significantly to revenue during the next twelve months, we
anticipate a negative cash-flow from regular operations similar to last year.
The Company has commitments under employment agreements with each of its
executive officers. Additionally, the Company has lease commitments totaling
approximately $34,250 through March 31, 2005.

We intend to seek additional capital financing in order to assist in the funding
of the above operations and expansion plan.

ITEM 3. CONTROLS AND PROCEDURES

Within 90 days prior to the filing date of this report, we carried out an
evaluation, under the supervision and with the participation of our principal
executive officer and principal









                                       20

<PAGE>

financial officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on this evaluation, our principal
executive officer and principal financial officer concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information required to be included in our periodic SEC reports. The design of
any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote.

In addition, we reviewed our internal controls, and there have been no
significant changes in our internal controls or in other factors that could
significantly affect those controls subsequent to the date of their last
evaluation.


PART II -- OTHER INFORMATION

   ITEM 2. CHANGES IN SECURITIES.

(c)  Recent Sales of Unregistered Securities

On January 22, 2003, we entered into an arrangement with First China Capital,
Inc., a Chinese corporation with its principal offices located in Beijing,
China, for the purchase from time to time by First China of up to 10,000,000
shares of our common stock in offshore transactions. As of the termination of
this arrangement on May 23, 2003, we had sold 1,485,406 shares of common stock
pursuant to this arrangement for aggregate proceeds of $105,800. The sales were
accomplished in reliance upon Regulation S promulgated under the Securities Act.
The facts relied upon for the exemption were that the purchaser was a non-U.S.
person as defined under the Securities Act.

On February 25, 2003, we entered into an arrangement with Simon Worship and Pan
European, two Spanish corporations, each with its principal offices located in
Madrid and Mirabella, Spain, for the purchase from time to time by each of up to
2,000,000 shares of our common stock in offshore transactions. As of June 30,
2003, we have sold 2,754,300 shares of common stock pursuant to those two
arrangements for aggregte proceeds of $593,400. The sales were accomplished in
reliance upon Regulation S promulgated under the Securities Act. The facts
relied upon for the exemption were that the purchasers were a non-U.S. person as
defined under the Securities Act.


On May 28, 2003, we issued 53,836 shares of common stock at $.70 per share to
Edward Kraus in exchange for the cancellation of $37,684.93 in debt owed to Mr.
Kraus. The issuance of the stock was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that the investor
is an accredited investor and a sophisticated purchaser who had full access to
the information on the company necessary to make an informed investment decision
by virtue of serving as an officer of the company's subsidiary.





                                       21

<PAGE>

On June 18, 2003, we purchased 100% of the capital stock of Dimension
Distributing, Inc. from Dimension's owner, Tim Kain, in exchange for 8,000
shares of our Series B Convertible Preferred stock. The purchase price was
determined based upon a multiple of Dimension's previous years' gross profits.
Holders of preferred stock may, beginning three months after the issue date,
convert their preferred stock into common stock by multiplying the number of
shares to be converted by $100 and then dividing the product by the "Market
Price", which means the average closing price of the common stock over the 60
trading days immediately preceding the date the shares are submitted for
conversion, as reported on the NASD OTC Bulletin Board or (if applicable) on the
primary national securities exchange over which the common stock is regularly
traded. The issuance of the preferred stock was accomplished in reliance upon
Section 4(2) of the Securities Act. The facts relied upon for exemption are that
the investor is an accredited investor and a sophisticated purchaser who had
full access to the information on the company necessary to make an informed
investment decision by virtue of the due diligence conducted by the purchaser.

On June 30, 2003, we issued 45,272 shares of common stock at $.70 per share to
Jeremy Kraus in exchange for the cancellation of $31,690.50 in unpaid accrued
salary. The issuance of the stock was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that the investor
is an accredited investor and a sophisticated purchaser who had full access to
the information on the company necessary to make an informed investment decision
by virtue of serving as a director of the company.

On June 30, 2003, we issued 49,201 shares of common stock at $.70 per share to
Samuel Cohen in exchange for the cancellation of $34,440.50 in unpaid accrued
salary. The issuance of the stock was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that the investor
is an accredited investor and a sophisticated purchaser who had full access to
the information on the company necessary to make an informed investment decision
by virtue of serving as a director of the company.

On June 30, 2003, we issued 44,141 shares of common stock at $.70 per share to
Garrett Miller in exchange for the cancellation of $30,889 in unpaid accrued
salary. The issuance of the stock was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that the investor
is an accredited investor and a sophisticated purchaser who had full access to
the information on the company necessary to make an informed investment decision
by virtue of serving as a director of the company.

On July 10, 2003, we issued 6,224 shares of Series B Convertible Preferred stock
to Edward Kraus in exchange for 622,365 shares of our common stock owned by Mr.
Kraus, or 100 shares of common for each share of preferred. The issuance of the
preferred stock was accomplished in reliance upon Section 4(2) of the Securities
Act. The facts relied upon for exemption are that the investor is an accredited
investor and a sophisticated purchaser who had full access to the information on
the company necessary








                                       22

<PAGE>

to make an informed investment decision by virtue of serving as an officer of
the company's subsidiary.


On August 22, 2003, we issued 21,299 shares of common stock at $.70 per share to
Garrett Miller in exchange for the cancellation of $14,909 in unpaid accrued
salary. The issuance of the stock was accomplished in reliance upon Section 4(2)
of the Securities Act. The facts relied upon for exemption are that the investor
is an accredited investor and a sophisticated purchaser who had full access to
the information on the company necessary to make an informed investment decision
by virtue of serving as a director of the company.


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

Effective April 21, 2003, pursuant to a vote of the shareholders at a special
meeting held on April 11, 2003, we changed our name from "Valesc Inc." to
"Valesc Holdings Inc." in order to (1) better reflect our near-term plan to
become classified as a "business development company" and (2) effect a
withdrawal of our common stock from the settlement system provided by The
Depository Trust Company, or DTC, to prevent improper short selling of our
common stock. Concurrently with the name change, we obtained a new CUSIP number
for our common stock. The only proposal at the shareholders meeting was the name
change. The votes in person were as follows: 5,621,576 for the proposal, 0
against the proposal, 0 abstained. The votes by proxy were as follows: 3,232,039
for the proposal, 20,000 against the proposal, 0 abstained. Therefore, a
plurality of the shares entitled to vote and present, by proxy or in person,
voted in favor of the proposal.

   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits: See Exhibit Index on page 28.

     (b) Reports on Form 8-K:

On June 23, 2003, the Company filed a report on Form 8-K pertaining to the
acquisition of Dimension Distributing, Inc. and reporting Items 2 and 7.

On May 15, 2003, the Company filed a report on Form 8-K pertaining to a
shareholders' vote to effect a withdrawal of the Company's common stock from the
settlement system provided by The Depository Trust Company to prevent improper
short selling of the Company's common stock, and reporting Item 5.






















                                       23

<PAGE>


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


Date: August 28, 2003
                                  Valesc Holdings Inc.
                                  (Registrant)


                                   By: /s/ Samuel Cohen
                                       -----------------------------
                                           Samuel Cohen
                                           President and Principal Financial
                                           Officer




























                                       24


<PAGE>


                                 CERTIFICATIONS
                                 --------------

I, Jeremy Kraus, certify that:


1. I have reviewed this quarterly report on Form 10-QSB/A of Valesc Holdings
Inc.;


2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and


                                       25

<PAGE>

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: August 28, 2003


/s/ Jeremy Kraus
-----------------------
Jeremy Kraus
Chief Executive Officer


I, Samuel Cohen, certify that:


1. I have reviewed this quarterly report on Form 10-QSB/A of Valesc Holdings
Inc.;


2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;



                                       26

<PAGE>

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: August 28, 2003


/s/ Samuel Cohen
-----------------------
Samuel Cohen
President and Principal
Financial Officer








                                       27

<PAGE>


EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Index of exhibits required by Item 601 of Regulation S-B:

2.1 Merger Agreement dated as of March 21, 2001 between Valesc and NetCentral
Capital Fund, Inc. (filed as part of our Form 8-K filed on March 23, 2001 and
incorporated herein by reference);

2.2 Share Purchase Agreement dated December 3, 2001 between Valesc, SMT
Enterprises Corporation and OJI Surgical, Inc. for the acquisition of OJI by
Valesc (filed as part of our Form 8-K filed on December 21, 2001 and
incorporated herein by reference);

2.3 Merger Agreement dated May 20, 2002 between Valesc and Atlas Holdings Inc.
(filed as part of our Form 8-K filed on May 22, 2002 and incorporated herein by
reference);

2.4 Share Purchase Agreement dated December 15, 2002 by and among Valesc, Medex,
and SMT Enterprises Corporation for the acquisition of Medex by Valesc (filed as
part of our Form 8-K filed on December 27, 2002 and incorporated herein by
reference);

2.5 Share Purchase Agreement dated June 18, 2003 by and among Valesc, Dimension
Distributing, Inc., and Tim Kain for the acquisition of Dimension by Valesc
(filed as part of our Form 8-K filed on June 23, 2003 and incorporated herein by
reference);

3.1 Amended and Restated Certificate of Incorporation (filed as part of our Form
8-K filed on March 23, 2001 and incorporated herein by reference);


3.2 Certificate of Amendment to Certificate of Incorporation dated April 21,
2003 (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);


3.3 Amended and Restated By-Laws (filed as part of our Form 8-K filed on March
23, 2001 and incorporated herein by reference);

4.1 Specimen Certificate for Common Stock (filed as part of our Form SB-2 on
June 27, 2002 and incorporated herein by reference);

4.2 Certificate of Designation of Series and Determination of Rights and
Preferences of the Convertible Preferred Stock, Series B, of Valesc (filed as
part of our Form 8-K filed on June 23, 2003 and incorporated herein by
reference);

10.1 2001 Stock Option Plan (filed as part of our Form S-8 filed April 6, 2001
and incorporated herein by reference);

10.2 Amended and Restated Employment Agreement between Valesc and Jeremy Kraus
dated January 1, 2002 (filed as part of our Form SB-2 on June 27, 2002 and
incorporated herein by reference);







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<PAGE>


10.3 Amended and Restated Employment Agreement between Valesc and Samuel Cohen
dated January 1, 2002 (filed as part of our Form SB-2 on June 27, 2002 and
incorporated herein by reference);

10.4 Amended and Restated Employment Agreement between OJI Surgical, Inc. and
Harry Kraus dated January 1, 2002 (filed as part of our Form SB-2 on June 27,
2002 and incorporated herein by reference);

10.5 Manufacturer's Representative Agreement dated June 1, 1996, as amended,
between OJI Surgical, Inc., and Acumed, Inc. (filed as part of our Form SB-2 on
June 27, 2002 and incorporated herein by reference);

10.6 Sales Representative Agreement dated July 1, 2000, between Harry Kraus, as
representative, and Smith & Nephew, Inc. (filed as part of our Form SB-2 on June
27, 2002 and incorporated herein by reference);

10.7 Sales Representative Agreement dated July 2, 2000, between Harry Kraus, as
representative, and Smith & Nephew Orthopaedics (filed as part of our Form SB-2
on June 27, 2002 and incorporated herein by reference);

10.8 Sales Representation Agreement dated March 1, 2002 between OJI Surgical,
Inc./Harry Kraus and Hand Innovations, Inc. (filed as part of our Form 10-QSB
filed on May 15, 2002 and incorporated herein by reference);

10.9 Lease dated as of February 13, 2002 between Harry Kraus and OJI Surgical,
Inc., and American Property Management Corp. (filed as part of our Form 10-QSB
filed on May 15, 2002 and incorporated herein by reference);

10.10 Second Amended Commitment Warrant to Purchase Common Stock between Valesc
and Swartz Private Equity, L.L.C. with an issue date of May 21, 2002 (filed as
part of our Form SB-2 on May 24, 2002 and incorporated herein by reference);

10.11 Shareholders Agreement dated May 21, 2002 by and among Valesc, Harry
Kraus, Edward Kraus, Jeremy Kraus, Garrett Miller and Samuel Cohen (filed as
part of our Form SB-2 on May 24, 2002 and incorporated herein by reference);

10.12 Termination Agreement dated May 21, 2002 by and between Valesc and Swartz
Private Equity, LLC (filed as part of our Form SB-2 on May 24, 2002 and
incorporated herein by reference);

10.13 Distribution and Purchase Agreement dated December 6, 2002 between Valesc
and Bioaccess, Inc. (filed as part of our Form 10-KSB on April 15, 2003 and
incorporated herein by reference);







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<PAGE>

10.14 Lease dated as of January 7, 2003 between Medex and The Dialog Corporation
(filed as part of our Form 10-KSB on April 15, 2003 and incorporated herein by
reference);

10.15 Shareholders Agreement dated September 18, 2002 by and among Valesc, Harry
Kraus, Edward Kraus and Milton and Golda Toorans (filed as part of our Form
10-QSB filed on November 20, 2002 and incorporated herein by reference);

10.16 Addendum to Shareholders Agreement dated September 18, 2002 amending
Shareholders Agreement dated May 21, 2002 by and among Valesc, Harry Kraus,
Edward Kraus, Jeremy Kraus, Garrett Miller and Samuel Cohen (filed as part of
our Form 10-QSB filed on November 20, 2002 and incorporated herein by
reference);

10.17 Separation Agreement dated March 24, 2003 between Garrett Miller and
Valesc (filed as part of our Form 10-KSB on April 15, 2003 and incorporated
herein by reference);


10.18 Second Amended and Restated Stock Option Agreement dated August 22, 2003
between Garrett Miller and Valesc (filed as part of our Form 10-QSB on August
27, 2003 and incorporated herein by reference);

10.19 Subscription Agreement dated June 30, 2003 between Valesc and Jeremy
Kraus (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.20 Subscription Agreement dated June 30, 2003 between Valesc and Samuel
Cohen (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.21 Subscription Agreement dated June 30, 2003 between Valesc and Garrett
Miller (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.22 Subscription Agreement dated August 22, 2003 between Valesc and Garrett
Miller (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.23 Amended and Restated Escrow Agreement dated August 22, 2003 by and among
Valesc, Garrett Miller and Hecht & Associates, P.C. (filed as part of our Form
10-QSB on August 27, 2003 and incorporated herein by reference);

10.24 Employment Agreement dated June 18, 2003 between Dimension Distributing,
Inc. and Tim Kain (filed as part of our Form 10-QSB on August 27, 2003 and
incorporated herein by reference);

10.25 Employment Agreement dated December 15, 2002 between Medex and Edward
Kraus (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.26 Subscription Agreement dated July 10, 2003 between Valesc and Edward
Kraus (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.27 Subscription Agreement dated May 28, 2003 between Valesc and Edward Kraus
(filed as part of our Form 10-QSB on August 27, 2003 and incorporated herein by
reference);

10.28 Loan Cancellation Agreement dated May 28, 2003 between Valesc and Edward
Kraus (filed as part of our Form 10-QSB on August 27, 2003 and incorporated
herein by reference);

10.29 Subscription Agreement dated April 29, 2002 between Valesc and Tim Kain;

10.30 Stock Option Agreement dated April 29, 2002 between Valesc and Tim Kain;

10.31 Manufacturer's Representative Agreement dated March 16, 1998 between
Medex and Acumed, Inc.;

10.32 Distributor Agreement dated August 31, 2001 between Medex and Arthrotek
Inc.;

10.33 Sales Representation Agreement dated February 10, 2003 between Dimension
Distributing, Inc. and RG Medical Diagnostics;

10.34 Independent Sales Representative Agreement dated August 21, 2002 between
Dimension Distributing, Inc. and Cincinnati Sub-Zero Products, Inc.;

10.35 Letter Agreement for Marketing dated June 17, 1999 between Dimension
Distributing, Inc. and EHOB, Inc.;

10.36 Independent Sales Contractor Agreement dated January 24, 2000 between
Dimension Distributing, Inc. and J.T. Posey Company, Inc.;

10.37 Representation Agreement dated April 5, 2001 between Dimension
Distributing, Inc. and Medi Man Rehabilitation Products, Inc.;

10.38 Independent Sales Representative Agreement dated April 1, 2001 between
Tim Kain, as representative, and Mentor Medical, Inc.



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