U.S.
        SECURITIES AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 FORM
        10-KSB
 
 x
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1934
                  [FEE REQUIRED]
 For
        the
        fiscal year ended March 31, 2007.
 
  ̈
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE
 ACT
        OF
        1934 [NO FEE REQUIRED]
 
 For
        the
        transition period from ____________ to
        ____________.
 
 Commission
        file number  2-87738
 
 T.H.
        LEHMAN & CO., INCORPORATED
 (Exact
        name of small business issuer as specified in its charter)
 
 Delaware
              22-2442356(State
                  or other jurisdiction of incorporation or organization)
              (I.R.S./Employer
                  Identification Number)
 
 
 1155
        Dairy Ashford Rd., Suite 650, Houston, Texas 77079
 (Address
        of principal executive offices)
 
 Issuer's
        telephone number, including area code:  (281)
        870-1197
 
 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  ̈
  State
        the
        number of shares outstanding of each of the issuer's classes of common equity,  as  of  the  latest  practicable  date.
 
 Class
              
              Outstanding
                  at May 29, 2007Common
                  Stock, par value$.01 per share
              
              6,945,118
                  Shares
 
 Preferred
        Stock, $.01 Par.
 (Title
        of
        Class)
 
 Transitional
        Small Business Format (check one):  Yes  ̈  No  x
 
 Check  if  there  is
        no disclosure of delinquent filers in response to Item
        405  of  Regulation  S-B  contained  in  this  form,  and  no
        disclosure will be
        contained,  to  the  best  of  registrant's  knowledge  in  definitive  proxy
        or information  statements  incorporated  by
        reference in Part III of this Form
        10-KSB  or  any  amendment  to  this  Form  10-KSB.  x
 
 Issuer's
        revenues for its most recent fiscal year were $1,387,264.
 
 The
        aggregate market value of the voting stock held by nonaffiliates of the
        registrant is approximately $1,164,911 as of May 29, 2007.
 
 6,970,118
 (Number
        of shares of common stock outstanding as of May 29, 2007)
  
 
  PART
          I
 
 BUSINESS
          ITEM 1.  DESCRIPTION OF BUSINESS
 
 Introduction:
 
 T.H.
          Lehman & Co., Incorporated (referred to as the "Company or Registrant"), was
          organized in March, 1983 as a Small Business Development Company ("SBDC")
          and
          was an SBDC until April, 1988. From April, 1988 to August, 1990 it operated
          through subsidiaries as a broker/dealer and investment advisor. Although
          it is
          no longer an SBDC and has sold its broker/dealer and investment advisory
          business, the Company continues to maintain certain of its
          investments.
  Non-Operating
          Reporting Entity:
 
 Currently
          the Company has closed all operations and has no continuing business operations.
          The Company is operating as a public shell and its business operations
          consist
          of management seeking merger and acquisition candidates with ongoing operations
          and the collection of receivables from its discontinued operations. The
          Company
          has no existing funding commitments and is presently under no contractual
          obligation to make any investment or acquisition.
 
 The
          history of the Company’s business is detailed below.
 
 Medical
          Financial Services:
 
 The
          Company in August 1992 began operations in the area of medical financial
          services, such services being provided through specific subsidiaries. The
          primary focus of these operations was the financing and collection of accounts
          receivable generated by medical practitioners through their provision of
          diagnostic services and patient treatment.
 
 MedFin
          Management Corp. was created to provide medical practitioners with non-
          medical
          general and administrative functions such as accounting, marketing, management,
          non-medical staffing, facilities, equipment, and billing and collection
          of
          receivables. Revenues were derived from fees charged for these services.
          The
          company had one client, which operated a specialty clinic in the Los Angeles,
          California area. This client concentrated its practice on workers' compensation
          medicine and treatment for personal injury victims, providing services
          primarily
          on a lien basis. Beginning in June 2000, the client decided to stop practicing
          medicine and transfer his clients and files to another provider. In April
          2000,
          Med-Fin Management Services, Inc. was created to provide the new client
          with the
          same service.
 
 MedFin
          Management Corp. and Med-Fin Management Services, Inc. received, as a fee
          for
          their clinic management services, revenues that were indirectly related
          to the
          overall collections of their client practitioners' receivables. MedFin
          Management Corporation and Med-Fin Management Services, Inc. also provided
          working capital on an as-needed basis to those clients with receivables
          as
          collateral for such advances and UCC filings made thereon. However, the
          Company
          was not engaged in the practice of medicine which, for non- doctor controlled
          entities, is not legally allowed in California.
 
 As
          a
          further adjunct to the financing/management services provided through
          subsidiaries to medical practitioners, effective February 1, 1993, the
          Company
          purchased Healthcare Professional Billing Corp. (HPB), in Broomfield, Colorado
          a
          billing and collection service that is utilized by doctors in the metropolitan
          Denver and surrounding areas.
 
 In
          a
          transaction that was effective October 1, 1996, the Company transferred
          50% of
          the outstanding stock and substantially all of the control of Healthcare
          Professional Billing Corp. to certain key employees of that company. Until
          that
          time, Healthcare Professional Billing Corp. was a wholly-owned subsidiary
          of the
          Company. As a result of the transfer, the subsidiary's financial position,
          results of operations and cash flows are not consolidated with that of
          the
          Company's subsequent to the transfer date, however, until advances made
          to HPB
          are paid off the Company will receive part of HPB's positive cash
          flow.
 
 The
          Company wound down its medical business management office in February 2005,
          the
          date its medical office lease expired. In February 2005 the Company had
          closed
          all its patients’ cases and final billed all the services rendered by the
          providers, and, for the patients that could not be finalized, referred
          them to
          other providers, but billed through the date that the providers had rendered
          services. The Company has engaged a consultant to follow up on collections
          for
          all its receivables that have been assigned to the medical business management
          entity. The collection of these receivables is significantly complete.
          The
          Company does not expect any significant collection of the remaining provider
          receivables that it manages. The valuation of the existing receivables
          as of
          March 31, 2007 after taking into consideration the expected future collection
          costs is zero. There were no long-lived assets related to the discontinued
          operation nor are there expected to be gains or losses from the discontinuance
          of the medical business management segment.
 
 Environmental
          Matters:
 
 The
          Company was subject to various laws and regulations with respect to employee
          health  and  safety  and the protection of the
          environment. The Company believes that it was in substantial compliance
          with
          such laws and regulations.
 
 Employees:
 
 The
          Company employs 1 person in the medical management field that is engaged
          in  the collection effort of provider receivables. The Company
          believes that its employee relations are satisfactory. Employees are not
          subject
          to any collective
          bargaining  agreement  and  work  stoppages
          have not yet materially affected the Company's  business.
 
 
 
 ITEM
                    2.
                DESCRIPTION
                    OF PROPERTY
 
 The
          Company presently has an administrative sharing arrangement which, among
          other
          things, provides use of other office facilities in Houston, Texas. MedFin
          Management Corporation currently leases office space in Sherman Oaks, California
          that is being utilized for collection and record storage purposes. Monthly
          rental payments are $615, including all utilities through March
          2008.
 
 
 ITEM
                    3.
                LEGAL
                    PROCEEDINGS
 
 Neither
          the Company nor its subsidiaries is currently party to any other material
          legal
          proceeding.
 
 
 ITEM
                    4.
                SUBMISSION
                    OF MATTERS TO A VOTE OF SECURITY
                    HOLDERS
 
 The
          Company did not have any matters to submit to a vote of the security
          holders.
 
 PART
          II
 
 ITEM
                    5.
                MARKET
                    FOR COMMON EQUITY AND RELATED STOCKHOLDER
                    MATTERS
 
 a)
                Market
                    Information
 
 The
          Company's Common Stock (symbol THLM) is traded in the Over-The-Counter
          Market,
          on the Electronic Bulletin Board. The range of high and low bid quotations
          as
          reported by the NASDAQ Inter-Dealer Quotation System for the two year period
          ended March 31, 2007 are as follows:
 
 For
                    the Quarter Ended
                
                High
                
                
                LowJune
                    30, 2005
                
                $
                .15
                
                
                $
                .15September
                    30, 2005
                
                $
                .15
                
                
                $
                .15December
                    31, 2005
                
                $
                .15
                
                
                $
                .15March
                    31, 2006
                
                $
                .11
                
                
                $
                .11June
                    30, 2006
                
                $
                .20
                
                
                $
                .20September
                    30, 2006
                
                $
                .20
                
                
                $
                .20December
                    31, 2006
                
                $
                .20
                
                
                $
                .20March
                    31, 2007
                
                $
                .20
                
                
                $
                .20
 
 The
          above
          quotations do not include commissions, markups, or markdowns and may not
          represent actual transactions.
 
 b)
                Number
                    of Holders of Common Stock
 
 As  of  May
          29, 2007 the Company had approximately 139 shareholders of record.
          Cede  &  Co.  was the registered holder of
          1,041,326 shares. Because many of the
          shares  are  registered  in  street  name,
          the Company believes that there are a
          substantially  greater  number  of  beneficial  owners.
 
 c)
                Dividends
                    on Common Stock
 
 The
          Company's Board of Directors does not currently intend to pay cash dividends
          and
          has not paid any in the two year period ended March 31, 2007.
 
 
 ITEM
                    6.
                MANAGEMENT'S
                    DISCUSSION AND ANALYSIS OR PLAN OF
                    OPERATION
 
 Critical
          Accounting Policies:
 
 The
          discussion of the financial condition and results of operations are based
          upon
          the audited consolidated condensed financial statements, which have been
          prepared in conformity with accounting principles generally accepted in
          the
          United States. As such, management is required to make certain estimates,
          judgments and assumptions that are believed to be reasonable based on the
          information available. These estimates and assumptions affect the reported
          amount of assets and liabilities, revenues and expenses, and disclosure
          of
          contingent assets and liabilities at the date of the financial statements.
          Actual results may differ from these estimates under different assumptions
          or
          conditions.
 
 Critical
          accounting policies are defined as those that are reflective of significant
          judgments and uncertainties, and potentially result in materially different
          results under different assumptions and conditions. The Company has determined
          that the following accounting policies and estimates are critical to the
          understanding of the Company's consolidated financial statements.
 
 Revenue
          Recognition and Allowance for Doubtful Accounts:
 
 The
          Company derived its management fee (discontinued operations) revenue under
          the
          contractual provisions between the Company as the manager and
          the  professional health care provider. The Company earned its
          management fee based  on a percentage of net revenue to be derived by
          the health care provider. This  management fee was recorded in the
          accounting records on an accrual basis as a  percentage of the
          professional health care company's net revenues, which gave effect to the
          difference between, established charges and estimated third-party payer
          payments. The Company further provided an allowance for doubtful accounts
          to
          reduce its receivables to their net realizable value based on estimates
          by  management for general factors such as the aging of the
          receivables and  historical collection experience.
 
 
 
 Statements
          of Operations for continuing operations:
 
 Fiscal
          Year Ended March 31, 2007 Compared to Fiscal Year Ended March 31,
          2006
 
 Revenues
          totaled $1,387,264 during the fiscal year ended March 31, 2007, 3,611%
          higher
          than the previous year’s revenues of $37,381. Included in the total 2007
          revenues is $1,346,238 of realized gain from sales of KSW, Inc. Operating
          expenses remained very comparable from $91,788 in 2006 to $91,121 in 2007.
          General and  Administrative expenses were relatively the same with
          interest expense decreasing  27.0% from $16,148 to $11,778 after all
          remaining loans were paid off in 2007.
 
 
 Fiscal
          Year Ended March 31, 2006 Compared to Fiscal Year Ended March 31,
          2005
 
 Revenues
          totaled $37,381 during the fiscal year ended March 31, 2006, 29% higher
          than the
          previous year’s revenues of $29,050. Included in the total 2006 revenues is
          $24,195 of realized gain from sales of KSW, Inc. shares offset by a decrease
          in
          the Company’s portion of net income from Healthcare Professional Billing
          Corp.  (HPB) under the 1996 transfer agreement. Operating expenses
          decreased by 6% from $97,643 in 2005 to $91,788 in 2006. General and
          Administrative expenses were relatively the same with interest expense
          decreasing 18.7% from 19,873 to 16,148 after two loans were paid off in
          2006.
 
 
 Statements
          of Operations for discontinued operations:
 
 Fiscal
          Year Ended March 31, 2007 Compared to Fiscal Year Ended March 31,
          2006
 
 Due
          to
          the collection of receivables (discontinued operations) greater
          than  previously expected, fiscal year ended March 31, 2007 had
          revenues of $133,000  compared to $0 for the prior fiscal year ended
          March 31, 2006. General and  Administrative expenses increased to
          $168,322 in 2007 compared to $134,750  in 2006 mainly due to a write
          off of the remaining receivables as uncollectible.
 
 Fiscal
          Year Ended March 31, 2006 Compared to Fiscal Year Ended March 31,
          2005
 
 Due
          to
          the winding down of patient activity in December 2004, fiscal year ended
          March
          31, 2006 had zero revenues compared to $336,383 for the prior fiscal year
          ended
          March 31, 2005. General and Administrative expenses decreased to $134,750
          in
          2006 compared to $916,557 in 2005 for the same lack of patient activity
          and
          costs associated with that not occurring. Payroll, Rent, Management Fees
          and
          Uncollectible accounts expenses are all significantly lower than in the
          previous
          year due to no patient activity.
 
 
 Liquidity,
          Capital Resources and Income Taxes
 
 At
          March
          31, 2007 cash amounted to $941,906 an increase of $895,652 over the cash
          balance
          of $46,254 at March 31, 2006. The cash will be used to fund
          operations.
 
 The
          Company's primary source of liquidity has been the cash it has obtained
          from the
          liquidation of its investment portfolio, distribution of HPB's profit,
          and
          collection of medical accounts receivable.
 
 The
          Company anticipates that internally generated cash will be sufficient to
          finance
          overall operations.
 
 The
          Company’s consolidated financial statements have been prepared
          assuming  the Company will continue as a going concern, which
          contemplates the  realization of assets and satisfaction of
          liabilities in the normal course of  business. Management of the
          Company expects that cash balances at  March 31, 2007 will be adequate
          to maintain its corporate existence. However,  no assurance can be
          provided that these results will materialize.
 
 Ultimately,
          the Company’s ability to continue as a going concern is dependent upon its
          ability to attract new sources of capital, establish an
          acquisition  or reverse merger candidate with continuing operations,
          attain a reasonable threshold of operating efficiencies and achieve profitable
          continuing operations.
 
 The
          Company is seeking to acquire businesses and may be in various stages of
          negotiations at any point in time which may or may not result in consummation
          of
          a transaction. To provide funding for such acquisitions it may take a number
          of
          actions including (i) selling of its existing investments (ii) use of available
          working capital (iii) seeking short or long term loans (iv) issuing stock.
          In
          addition, the Company may seek additional equity funds if needed. These
          sources
          of capital may be both conventional and non-traditional. The Company has
          no
          existing funding commitments and is presently under no contractual obligation
          to
          make any investment or acquisition.
 
 At
          March
          31, 2007, the Company had an operating tax loss carryforward of
 approximately
          $4,759,000.
 
 Impact
          of
          Inflation and Other Business Conditions
 
 
 
 Generally,
          increases in the Company's operating costs approximate the rate of inflation.
          In
          the opinion of management, inflation has not had a material effect on the
          operation of the Company. The Company has historically been able to react
          effectively to increases in labor or other operating costs through a combination
          of greater productivity and selective price increases where
          allowable.
 
 ITEM
                    7.
                FINANCIAL
                    STATEMENTS
 
 The
          financial statements and supplementary data are listed at "ITEM 13: EXHIBITS
          AND
          REPORTS ON FORM 10-KSB" in this document.
 
 (See
          Index Exhibits Part IV Item 13 (a) Financial Statements: F1)
 
 
 ITEM
                    8.
                CHANGES
                    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                    DISCLOSURE
 
 Not
          Applicable.
 
 PART
          III
 
 ITEM
                    9.
                DIRECTORS,
                    EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE
                    WITH
                    SECTION 16(a) OF THE EXCHANGE ACT
 
 The
          Directors and Executive Officers of the Company are as follows:
 
 Name
                Age
                Director
                    Since
                PositionElliot
                    Gerstenhaber
                61
                1996
                DirectorRaffaele
                    Attar
                34
                2000
                DirectorGary
                    Poe
                40
                
                Secretary/Treasurer
 
 
 The
          term
          of office of each director is until the next Annual Meeting of Shareholders,
          or
          until such time as their successors shall have been duly elected and qualified.
          Officers serve at the pleasure of the board. There are no family relationships
          between any of the Company's directors or officers.
 
 
 Background
          of Officers and Directors:
 
 Elliot
          Gerstenhaber is a 1968 graduate of the University of Pennsylvania. He received
          a
          juris doctorate degree from South Texas College of Law in 1975. In 1995
          he left
          the private practice of law to develop real estate throughout the southeastern
          United States. He is President of Segue, Inc., a privately-held
          company.
 
 Raffaele
          Attar graduated from St. John's College in 1995 with a degree in Philosophy
          and
          Mathematics. Mr. Attar has 10 years of experience as an investment analyst
          including 8 years experience in the medical financing industry. Mr. Attar
          currently sits on the Board of Directors of Rollouts, Inc., a privately
          held
          multi-site equipment deployment company based in Minneapolis, MN.
 
 Gary
          Poe
          is a 1989 graduate of Sam Houston State University holding a B.A. degree
          in
          General Business. Mr. Poe has been associated with Woodco Fund Management
          (WFM)
          since March 1999. Prior to joining WFM, Mr. Poe worked as an assistant
          controller with a hotel management company in Houston, Texas. Mr. Poe has
          over
          18 years of financial accounting experience.
 
 ITEM
                    10.
                EXECUTIVE
                    COMPENSATION
 
 Compensation
          of Officers and Directors:
 
 Set
          forth
          below is the aggregate remuneration paid to the Company's officers during
          the
          fiscal years ended March 31, 2007, 2006, and 2005.
 
 Name
                    andPrincipalPosition
                Year
                
                Salary
                
                
                Restricted
                    Stock
                    AwardsNone
                2007
                
                $
                0
                
                
                $
                0None
                2006
                
                $
                0
                
                
                $
                0None
                2005
                
                $
                0
                
                
                $
                0
  
  ITEM
                    11.
                SECURITY
                    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                    MANAGEMENT
 
 Principal
          Shareholders
 
 The
          following table lists, to the best of the Company's knowledge, the beneficial
          stock ownership of those persons owning beneficially more than 5% of the
          Company's outstanding common stock, as well as the stock ownership of executive
          officers and each director as of May 29, 2007:
 
 Name
                    and Address Of Beneficial Owner
                
                Amount
                    and Nature Of
                  Beneficial
                    Owner
                
                
                Percent
                    of ClassTitle
                    of Class(a)
                    Common StockMonahan
                    Corporation, N.V.   (2)Landhuis
                    Joonchi
                
                
                3,144,238
                
                
                
                45.11
                %Kaya
                    Richard J. Beaujon z/nP.O.
                    Box 837Curacao,
                    Netherlands AntillesBurton,
                    N.V.                          
                       (2)Landhuis
                    Joonchi
                
                
                281,383
                
                
                
                4.04
                %Kaya
                    Richard J. Beaujon z/nP.O.
                    Box 837Curacao,
                    Netherlands AntillesRussell
                    Molina                     
                        (3)6616
                    Sewanee
                
                
                480,000
                
                
                
                6.89
                %Houston,
                    Texas 77005Beech
                    Glen,
                    Inc.                  
                         (1)c/o
                    Capital Holdings, Inc.
                
                
                598,164
                
                
                
                8.58
                %1155
                    Dairy Ashford, Suite 650Houston,
                    TX 77079New
                    Horizons Investments Fund N.V. (2)Landhuis
                    Joonchi
                
                
                610,538
                
                
                
                8.76
                %Kaya
                    Richard J. Beaujon z/nP.O.
                    Box 837Curacao,
                    Netherlands, Antilles(b)
                    Security Ownership of ManagementDibo
                    Attar                        
                        (1)
                
                
                200,000Elliot
                    Gerstenhaber
                
                
                -0-Raffaele
                    Attar
                
                
                90,400Directors
                    and Officersas
                    Group 5 persons
                
                
                5,404,723
                
                
                
                77.54
                %(1)
                    (2) (3)
  Notes
          to
          Table of Beneficial Owners and Management:
 
 (1)
          Dibo
          Attar is a consultant to Capital Holdings, Inc., parent to Beech Glen,
          Inc. and
          father of Raffaele Attar.
 
 (2)
          Monahan Corporation, N.V., Burton, N.V., and New Horizons Investments Fund,
          N.V.
          are each Netherlands Antilles corporations whose shareholders comprise
          groups of
          European investors, none of which are otherwise affiliated with the Company.
          None of the individual shareholders holds an effective ownership of the
          Company
          exceeding 4.9%.
 
 (3)
          Russell Molina resigned as Director and President of T.H. Lehman & Co., Inc.
          effective October 3, 2002.
 
 Except
          as
          otherwise indicated, the address for each of the above persons is c/o T.H.
          Lehman & Co., Incorporated, 1155 Dairy Ashford Rd., Suite 650, Houston,
          Texas 77079.
 
 ITEM
                    12.
                CERTAIN
                    RELATIONSHIPS AND RELATED
                    TRANSACTIONS.
 
 During
          the year ended March 31, 2006 the Company deposited approximately $80,000
          in
          fees receivable in a bank account, which was controlled by the Company
          but was
          in the name of a former client/provider who also had signature authority
          over
          the account. The former client removed $73,919 from the account without
          authority from the Company and has refused to return the funds to the Company.
          The Company is considering its legal options to affect the return to the
          Company
          of these funds. The Company feels a settlement can be reached for a return
          of a
          majority  of these funds less any legal costs. As such the Company
          has  recorded an allowance based on management’s estimate of
          realization.
 
 During
          the years ended March 31, 2007 and March 31, 2006, the Company incurred
          management fees for facilities and services provided by Woodco Fund Management
          Inc., in the amount of $49,358 and $49,350 respectively. Such services
          are  believed to have been provided on terms no less favorable than
          available from a third party. Woodco Fund Management Inc. is a asset management
          company offering fee based services for accounting, record keeping and
          clerical
          services and is comtrolled by related parties.
 
 During
          previous fiscal years the Company entered into formal note arrangements
          with its
          chairman regarding advances made by the Company to an entity controlled
          by the
          chairman. The terms of the notes required annual 6% interest payments
          and  all remaining balances were due at the end of three years. The
          principal  balances of these notes total $91,000. The Company received
          an interest only  check for $10,253 on the above notes in June 2006.
          Subsequent to fiscal year end 2007, the Company received payment in full
          on
          these notes.
 
 
 
 On
          November 11,2002,
          the
          Company acquired 372,348 shares of KSW common stock  from seven
          related entities (“seller”) in consideration for
          interest-bearing,  nonrecourse notes evidencing the purchase price
          paid by the Company to each  such seller. The purchase price was $1.00
          per share, or an aggregate of  $372,348. Each note bears interest at
          6% per annum and is payable in annual  interest only installments and
          is due and payable in full on or before  November 6, 2005. The Company
          granted the seller a security interest in the  shares of KSW common
          stock purchased from such seller. As of the close of  business on
          November 7, 2002, the share price was $.80. A premium was paid  for
          these shares to insure the Company acquired at least 5% of the
          outstanding  shares of KSW. The Company was unable to make the
          interest payments as  required in the notes. Two of the seller
          entities asked that their respective shares (47,000) be returned in full
          settlement of the notes. At the time of the request (August 9, 2005), the
          share
          price was $1.65 for a value of $77,550 on the  47,000 shares. The
          pay-out amount on these shares would have been $54,834.  The Company
          determined it was in the best interest of the Company to return
          the  shares as requested and not engage in a legal battle and related
          expense which  at best would have yielded an additional $22,716 in
          revenue. This transaction  was completed on August 17, 2005. The
          Company obtained extensions on the  remaining notes. During the
          current fiscal year the Company has sold 300,348  shares for a gain of
          $1,346,238 and has paid the notes in full.
 
 
 Stock
          Transaction Reports by Officers, Directors and 10% Stockholders:
 
 Section
          16(a) of the Securities Exchange Act of 1934, as amended, requires the
          Company's
          directors, executive officers and holders of more than 10% of the Company's
          common stock to file with the Commission initial reports of ownership and
          reports of changes in ownership of common stock and other equity securities
          of
          the Company. To the Company's knowledge, based solely on copies of reports
          furnished to the Company and representation that no other reports were
          required,
          during the fiscal year ending March 31, 2007 all Section 16(a) filing
          requirements were complied with in a timely manner.
 
 
 PART
          IV
 
 ITEM
                    13.
                EXHIBITS
                    AND REPORTS ON FORM 10-KSB
 
 The
          following documents are filed as a part of this report:
 
 Independent
          Auditor's Report
 
 Consolidated
          Balance Sheets
 As
          of
          March 31, 2007 and 2006
 Consolidated
          Statements of Operations
 Years
          Ended March 31, 2007 and 2006
 Consolidated
          Statements of Changes in Stockholders' Equity
 Years
          Ended March 31, 2007 and 2006
 Consolidated
          Statements of Cash Flows
 Years
          Ended March 31, 2007 and 2006
 Notes
          to
          Consolidated Financial Statements
 
 (a)
                Financial
                    Statements - See Index to Financial Statements at Page
                    F-1.
 
 (b)
                Exhibits:
 
 Exhibit
          No. Exhibit
 
 3.1
                Certificate
                    of Incorporation of T.H. Lehman & Co., Incorporated (the
                    Company)  as amended.*
 
 3.2
                By-laws
                    of the Company. Incorporated by reference from the Company's
                    Form 8-A
                    dated October 31, 1984 for Registration of Certain Classes of
                    Securities
                    Pursuant to Section 12(b) or (g) of the Securities Exchange Act
                    of  1934.*
 
 14.1
                Code
                    of Ethics
 
 *These
          items have been previously submitted and are therefore incorporated only
          by
          reference.
 
 Individual
          financial statements of the Company are not furnished because consolidated
          financial statements are furnished.
 
 
 Controls
          and Procedures:
 
 Within
          90
          days prior to the date of this report, we carried out an evaluation, under
          the
          supervision and with the participation of our management including the
          Company's
          Acting Chief Executive Officer and Principal Financial Officer, of the
          effectiveness of the design and operation of our disclosure controls and
          procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation,
          the
          Acting Chief Executive Officer and Principal Financial Officer concluded
          that
          our disclosure controls and procedures are effective.
 
 There
          have been no significant changes in our internal controls or in other factors
          that could significantly affect these controls subsequent to the date we
          carried
          out this evaluation.
 
 
 
 SIGNATURES
 
 Pursuant
          to the requirements of the Securities Exchange Act of 1934, the registrant
          has
          duly caused this report to be signed on its behalf by the undersigned thereunto
          duly authorized.
 
 DATE:  June
          25, 2007
 
 T.H.
                    LEHMAN & CO., INCORPORATED AND SUBSIDIARIESBy:
                /s/
                    Raffaele AttarRaffaele
                    AttarActing
                    Chairman andChief
                    Executive OfficerBy:
                /s/
                    Gary PoeGary
                    PoePrincipal
                    Financial Officer and Secretary
 
 
 
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
          FINANCIAL STATEMENTS
 YEARS
          ENDED MARCH 31, 2007 AND MARCH 31, 2006
 
 INDEX
          TO
          CONSOLIDATED FINANCIAL STATEMENTS:
 
 Report
                    of Independent Registered Public Accounting Firm
                F-2Consolidated
                    Balance SheetsMarch
                    31, 2007 and 2006
                F-3Consolidated
                    Statements of Operations and Comprehensive Income (Loss)Years
                    Ended March 31, 2007 and 2006
                F-4Consolidated
                    Statements of Stockholders' EquityYears
                    Ended March 31, 2007 and 2006
                F-5Consolidated
                    Statements of Cash FlowsYears
                    Ended March 31, 2007 and 2006
                F-6Notes
                    to Consolidated Financial Statements
                F-7
 
 
 F-1
 
 REPORT
          OF
          INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
          the
          Board of Directors
 T.H.
          Lehman & Co., Incorporated
 
 I
          have audited the consolidated balance sheets of T.H. Lehman & Co.,
          Incorporated and Subsidiaries (the "Company") as of March 31, 2007 and
          2006 and
          the related consolidated statements of operations, stockholders' equity
          and cash
          flows for the years then ended. These consolidated financial statements
          are the
          responsibility of the Company's management. My responsibility is to express
          an
          opinion on these consolidated financial statements based on my
          audits.
 
 I
          conducted my audits in accordance with standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          I plan
          and perform the audit to obtain reasonable assurance about whether the
          consolidated financial statements are free of material misstatement. An
          audit  includes consideration of internal control over financial
          reporting as a basis  for designing audit procedures that are
          appropriate in the circumstances, but  not for the purpose of
          expressing an opinion on the effectiveness of the  Company's internal
          control over financial reporting. Accordingly, I express no such opinion.
          An
          audit also includes examining, on a test basis, evidence supporting the
          amounts
          and disclosures in the consolidated 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.
          I
          believe my audits provide a reasonable basis for my opinion.
 
 In
          my
          opinion, the consolidated financial statements referred to above
          present  fairly, in all material respects, the consolidated financial
          positions of  T.H. Lehman & Co., Incorporated and Subsidiaries as
          of March 31, 2007 and 2006  and the results of their operations and
          their cash flows for the years then  ended, in conformity with
          accounting principles generally accepted in the  United States of
          America.
 
 As
          discussed in Note 1 to the consolidated financial statements, the Company
          during
          2004 discontinued its remaining operations. The accompanying consolidated
          financial statements have been prepared assuming the Company will continue
          as a
          going concern. As discussed in Note 1 to the consolidated financial statements,
          the Company had limited liquid resources, recurring losses, and is seeking
          to
          implement its business plan, which  requires the Company to acquire or
          develop a business. These matters raise substantial doubt about its ability
          to
          continue as a going concern.  Management's plans in regard to these
          matters are also discussed in Note 1.  The consolidated financial
          statements do not include any adjustment that might result from the outcome
          of
          this uncertainty.
 
 /s/
          JEFFREY S. GILBERT, CPA
 
 Los
          Angeles, California
 June
          25,
          2007
 
 F-2
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
          BALANCE SHEETS
 MARCH
          31,
          2007 AND MARCH 31, 2006
 
 ASSETS2007
                
                
                2006CURRENT
                    ASSETSCash
                
                $
                941,906
                
                
                $
                46,254Accounts
                    receivable
                
                
                60
                
                
                
                0Current
                    portion of non-current receivable - related party
                
                
                98,860
                
                
                
                56,253Current
                    portion of non-current receivables  from discontinued
                    operations
                
                
                0
                
                
                
                103,951TOTAL
                    CURRENT ASSETS
                
                
                1,040,826
                
                
                
                206,458OTHER
                    ASSETSSecurities
                    available for sale
                
                
                243,580
                
                
                
                1,233,069Non-current
                    receivables – related party
                
                
                0
                
                
                
                45,000Non-current
                    receivables from discontinued operations
                
                
                0
                
                
                
                49,359TOTAL
                    OTHER ASSETS
                
                
                243,580
                
                
                
                1,327,428TOTAL
                    ASSETS
                
                $
                1,284,406
                
                
                $
                1,533,886LIABILITIES
                    AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
                    LIABILITIESManagement
                    fees – related party
                
                $
                349,575
                
                
                $
                560,775Current
                    portion of long-term debt-related parties
                
                
                0
                
                
                
                39,366Management
                    fees from discontinued operations -   related
                    party
                
                
                54,112
                
                
                
                227,742TOTAL
                    CURRENT LIABILITIES
                
                
                403,687
                
                
                
                827,883LONG-TERM
                    LIABILITIESLong-term
                    debt, less current portion due related parties
                
                
                0
                
                
                
                383,964TOTAL
                    LIABILITIES
                
                
                403,687
                
                
                
                1,211,847COMMITMENTS
                    AND CONTINGENCIESSTOCKHOLDERS'
                    EQUITYCommon
                    stock-par value $.01; authorized 20,000,000 shares, issued 6,970,118
                    shares at March 31, 2007 and 2006
                
                
                69,701
                
                
                
                69,701Preferred
                    stock-par value $.01; authorized 10,000,000 shares, issued 0
                    shares at
                    March 31, 2007 and 2006
                
                
                0
                
                
                
                0Additional
                    paid-in capital
                
                
                8,076,340
                
                
                
                8,076,340Unrealized
                    gain on investments
                
                
                205,580
                
                
                
                907,721Accumulated
                    deficit
                
                
                (7,422,464
                )
                
                
                (8,683,285
                )Treasury
                    stock at cost - 25,000 shares
                
                
                (48,438
                )
                
                
                (48,438
                )TOTAL
                    STOCKHOLDERS' EQUITY (DEFICIT)
                
                
                880,719
                
                
                
                322,039TOTAL
                    LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
                
                $
                1,284,406
                
                
                $
                1,533,886
 
 
 See
          accompanying Notes to Consolidated Financial Statements
 
 F-3
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
          STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 YEARS
          ENDED MARCH 31, 2007 AND MARCH 31, 2006
 
 2007
                  
                  
                  2006REVENUESInterest
                      and dividends
                  
                  $
                  28,218
                  
                  
                  $
                  5,981Realized
                      gain from sales of securities Available for sale
                  
                  
                  1,351,824
                  
                  
                  
                  24,195Miscellaneous
                      income
                  
                  
                  7,222
                  
                  
                  
                  7,205TOTAL
                      REVENUES
                  
                  
                  1,387,264
                  
                  
                  
                  37,381OPERATING
                      EXPENSESSelling,
                      general and administrative
                  
                  
                  79,343
                  
                  
                  
                  75,640Interest
                      expense
                  
                  
                  11,778
                  
                  
                  
                  16,148TOTAL
                      OPERATING EXPENSES
                  
                  
                  91,121
                  
                  
                  
                  91,788INCOME/(LOSS)
                      FROM CONTINUING OPERATIONSBEFORE
                      INCOME TAXES
                  
                  
                  1,296,143
                  
                  
                  
                  (54,407
                  )PROVISION
                      FOR INCOME TAXES
                  
                  
                  0
                  
                  
                  
                  0INCOME/(LOSS)
                      FROM CONTINUING OPERATIONS
                  
                  
                  1,296,143
                  
                  
                  
                  (54,407
                  )(LOSS)
                      FROM DISCONTINUED OPERATIONS
                  
                  
                  (35,322
                  )
                  
                  
                  (134,750
                  )NET
                      INCOME / (LOSS)
                  
                  
                  1,260,821
                  
                  
                  
                  (189,157
                  )OTHER
                      COMPREHENSIVE INCOME:Unrealized
                      gain on securities
                  
                  
                  649,683
                  
                  
                  
                  1,023,151Less:  reclassification
                      adjustment for gain included in net income
                  
                  
                  (1,351,824
                  )
                  
                  
                  (24,195
                  )TOTAL
                      OTHER COMPREHENSIVE INCOME/(LOSS)
                  
                  
                  (702,141
                  )
                  
                  
                  998,956COMPREHENSIVE
                      INCOME
                  
                  $
                  558,680
                  
                  
                  $
                  809,799PER
                      SHARE DATA:WEIGHTED
                      AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
                  
                  
                  6,945,118
                  
                  
                  
                  6,945,118NET
                      INCOME/LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS
                  
                  $
                  0.19
                  
                  
                  $
                  (0.01
                  )NET
                      INCOME/(LOSS) PER COMMON SHARE FROM DISCONTINUED
                      OPERATIONS
                  
                  
                  (0.01
                  )
                  
                  
                  (0.02
                  )NET
                      INCOME/LOSS PER COMMON SHARE
                  
                  $
                  0.18
                  
                  
                  $
                  (0.03
                  )
 
 See
          accompanying Notes to Consolidated Financial Statements
 
 F-4
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
          STATEMENTS OF STOCKHOLDERS' EQUITY
 YEARS
          ENDED MARCH 31, 2007 AND MARCH 31, 2006
 BALANCE
 
 Common
                    Stock
                
                
                Additional
                
                
                
                
                
                Unreal.
                  Gain
                    on
                
                
                Treasury
                    StockShares
                
                
                
                
                
                Paid-in
                
                
                Accumulated
                
                
                Sec
                    Avail.
                
                
                for
                    sharesIssued
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                for
                    sale
                
                
                Held
                
                
                Amount
                
                
                Total6,970,118
                
                
                $
                69,701
                
                
                $
                8,076,340
                
                
                $
                (8,494,128
                )
                
                $
                (91,235
                )
                
                
                25,000
                
                
                $
                (48,438
                )
                
                $
                (487,760
                )Unrealized
                    gain on securities available for sale:
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                998,956
                
                
                
                
                
                
                
                
                
                
                
                998,956Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (189,157
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (189,157
                )BALANCE,
                    March 31, 2006:
                
                
                6,970,118
                
                
                
                69,701
                
                
                
                8,076,340
                
                
                
                (8,683,285
                )
                
                
                907,721
                
                
                
                25,000
                
                
                
                (48,438
                )
                
                
                322,039Unrealized
                    gain on securities  available for sale
                
                
                
                
                
                
                
                
                
                
                (702,141
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (702,141
                )Net
                    income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,260,821
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,260,821BALANCE,
                    March 31, 2007:
                
                
                6,970,118
                
                
                $
                69,701
                
                
                $
                8,076,340
                
                
                $
                (7,422,464
                )
                
                $
                205,580
                
                
                
                25,000
                
                
                $
                (48,438
                )
                
                $
                880,719
 
 See
          accompanying Notes to Consolidated Financial Statements
 
 F-5
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
          STATEMENTS OF CASH FLOWS
 YEARS
          ENDED MARCH 31, 2007 AND MARCH 31, 2006
 
 2007
                  
                  
                  2006CASH
                      FLOWS FROM OPERATING ACTIVITIESNet
                      income/(loss) from continuing operations
                  
                  $
                  1,296,143
                  
                  
                  $
                  (54,407
                  )Net(loss)
                      from discontinued operations
                  
                  
                  (35,322
                  )
                  
                  
                  (134,750
                  )Adjustments
                      to reconcile net income/(loss) to Net cash used in operating
                      activities:Realized
                      gain from sales of securities available for sale - KSW,
                      Inc.
                  
                  
                  1,346,238
                  
                  
                  
                  24,195Deposits
                      received
                  
                  
                  0
                  
                  
                  
                  5,000Changes
                      in operating assets and liabilities:(Increase)
                      decrease in:Accounts
                      receivable
                  
                  
                  (60
                  )
                  
                  
                  0Value
                      of marketable securities
                  
                  
                  (362,335
                  )
                  
                  
                  (971,066
                  )Increase
                      (decrease) in:Accounts
                      payable –management fees-related party
                  
                  
                  (384,830
                  )
                  
                  
                  (46,839
                  )Accrued
                      liabilities
                  
                  
                  (728,122
                  )
                  
                  
                  956,488NET
                      CASH PROVIDED/(USED) FOR OPERATING ACTIVITIES
                  
                  
                  1,131,712
                  
                  
                  
                  (221,379
                  )CASH
                      FLOWS FROM INVESTING ACTIVITIESLoans
                      made evidenced by notes receivable
                  
                  
                  (98,843
                  )
                  
                  
                  (68,573
                  )Collection
                      of notes receivable
                  
                  
                  202,793
                  
                  
                  
                  219,986Decrease
                      in non-current receivables
                  
                  
                  49,359
                  
                  
                  
                  146,039Loan
                      made/(paid) evidenced by notes receivable-related party
                  
                  
                  (42,607
                  )
                  
                  
                  (51,948
                  )Decrease
                      in non-current receivables related party
                  
                  
                  45,000
                  
                  
                  
                  1,000Proceeds
                      from sale of other securities
                  
                  
                  5,586
                  
                  
                  
                  0NET
                      CASH PROVIDED FROM INVESTING ACTIVITIES
                  
                  
                  161,288
                  
                  
                  
                  246,504CASH
                      FLOWS FROM FINANCING ACTIVITIESProceeds
                      of long-term debt
                  
                  
                  0
                  
                  
                  
                  58,616Repayment
                      of long-term debt
                  
                  
                  (397,348
                  )
                  
                  
                  (47,000
                  )NET
                      CASH (USED)/PROVIDED BY FINANCING ACTIVITIES
                  
                  
                  (397,348
                  )
                  
                  
                  11,616INCREASE
                      IN CASH
                  
                  
                  895,652
                  
                  
                  
                  36,741CASH
                      – BEGINNING OF YEAR
                  
                  
                  46,254
                  
                  
                  
                  9,513CASH
                      - END OF YEAR
                  
                  $
                  941,906
                  
                  
                  $
                  46,254CASH
                      PAID DURING THE PERIODS FOR:Interest
                  
                  $
                  26,103
                  
                  
                  $
                  0
 See
          accompanying Notes to Consolidated Financial Statements
 
 F-6
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
          31,
          2007 AND 2006
 
 
 1.
                SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES
 
 **Outlook**–
          As of March 31, 2007, the Company had no continuing
          business  operations. Any perceived value in the Company is both
          speculative and  intangible in nature. The Company is operating as a
          public shell and its business operations consist of management seeking
          merger
          and acquisition candidates with ongoing operations and the collection of
          receivables from its discontinued operations.
 
 Cash
          totaled $941,906 at March 31, 2007. The Company had nominal revenues
          from  continuing operations for the year ended March 31, 2007. The
          Company’s cash  will be used to fund operations.
 
 The
          Company’s consolidated financial statements have been prepared assuming
          the  Company will continue as a going concern, which contemplates the
          realization of  assets and satisfaction of liabilities in the normal
          course of business.
 
 Ultimately,
          the Company’s ability to continue as a going concern is
          dependent  upon it’s ability to attract new sources of capital,
          establish an acquisition or  reverse merger candidate with continuing
          operations, attain a reasonable threshold of operating efficiencies, and
          achieve
          profitable continuing operations.
 
 The
          Company is seeking to acquire businesses and may be in various stages of
          negotiations at any point in time which may or may not result in consummation
          of
          a transaction. To provide funding for such acquisitions it may take a number
          of
          actions including (i) selling of its existing investments (ii) use of available
          working capital (iii) seeking short or long term loans (iv) issuing stock.
          In
          addition, the Company may seek additional equity funds if needed. These
          sources
          of capital may be both conventional and non- traditional. The Company has
          no
          existing funding commitments and is presently under no contractual obligation
          to
          make any investment or acquisition.
  **Description
          of the Business** - T.H. Lehman & Co., Incorporated, a Delaware
          corporation, had provided medical business management services including
          billing
          and collection in California through one of its wholly-owned
          subsidiaries.
 
 During
          June 2004 the management of the Company decided to disengage itself from
          the
          medical business management segment of its business. This was the
          only  significant operation of the Company. Management based its
          decision in part on the expected negative impact of California’s new workers’
compensation  legislation on the medical providers that the Company
          manages. Therefore the  medical business management operations are
          reflected on the statement of  operations as discontinued
          operations.
 
 The
          Company wound down its medical business management office in February 2005,
          the
          date its medical office lease expired. In February 2005 the Company
          had  closed all its patients’ cases and final billed all the services
          rendered by  the providers, and, for the patients that could not be
          finalized, referred  them to other providers, but billed through the
          date that the providers had  rendered services. The Company has
          engaged a consultant to follow up on  collections for all its
          receivables that have been assigned to the medical  business
          management entity. The collection of these receivables is
          significantly  complete. The Company does not expect any significant
          collection of the remaining provider receivables that it manages. The valuation
          of the existing receivables  as of March 31, 2007, after taking into
          consideration the expected future  collection costs, is
          zero.
 
 There
          were no long-lived assets related to the discontinued operation, nor
          are  there expected to be gains or losses from the discontinuance of
          the medical  business management segment.
 
 **Principles
          of Consolidation** - The consolidated financial statements include the
          accounts of the Company and its wholly-owned and majority-owned subsidiaries.
          All intercompany balances and transactions have been eliminated.
 
 **Use
          of Estimates** - The preparation of financial statements in conformity
          with  accounting principles generally accepted in the United States of
          America requires estimates and assumptions that affect the reported amounts
          of
          assets and  liabilities, the disclosure of contingent assets and
          liabilities at the date of the financial statements, and revenues and expenses
          during the period reported. Actual results could differ from those estimates.
          Estimates are used when accounting for stock-based transactions, uncollectible
          accounts receivable,  asset depreciation and amortization, and taxes,
          among others.
 
 **Cash**– Not all cash is covered by the FDIC. Extra insurance has not been
          obtained.
 
 **Securities**- Marketable securities that are bought and held principally for
          the
          purpose of selling them in the near term are classified as trading securities
          and reported at fair value, with unrealized gains and losses included in
          earnings. Marketable securities not classified as either investment securities
          (which are held to maturity) or trading securities are classified as securities
          available for sale and reported at fair value, with unrealized gains and
          losses
          affecting comprehensive income and reported in a separate component of
          stockholders' equity. Average cost is used to determine cost when calculating
          realized gains or losses from sales of securities available for
          sale.
  F-7
 Investment
          in 50% owned Corporation - Investment in 50% owned corporation is accounted
          for
          under the equity method. Currently this investment is carried at no
          value.
 
 **Receivables**
          - Assigned medical billings represented the contractual percentage of medical
          provider receivables of medical practices to which the Company provided
          management services. Revenues were recognized when the medical services
          were
          provided, according to the contractual percentage after uncollectible
          allowances.
 
 **Stock-Based
          Compensation** - There are no employee stock options.
 
 **Basic
          Income/Loss Per Share** - Basic income/loss per common share
          is  calculated by dividing earnings available to common stockholders
          by the weighted average number of common shares outstanding during the
          period.
  2.
                NON-CONSOLIDATED
                    ENTITY
 
 In
          a
          transaction that was effective October 1, 1996, the Company transferred
          50% of
          the outstanding stock and substantially all of the control of Healthcare
          Professional Billing Corp.("HPB") to certain key employees of HPB. Until
          that
          time, HPB was a wholly-owned subsidiary of the Company. As a result of
          the
          transfer, the subsidiary's financial position, results of operations and
          cash
          flows are not consolidated with that of the Company subsequent to the transfer
          date. The summarized unaudited financial information of HPB at March 31,
          2007
          and March 31, 2006 is as follows:
 
 March
                    31, 2007
                
                
                March
                    31,2006Financial
                    Position:Current
                    Assets
                
                $
                78,048
                
                
                $
                86,621Property
                    and equipment
                
                
                0
                
                
                
                0Total
                    assets
                
                $
                78,048
                
                
                $
                86,621
  F-8
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
          31,
          2007 AND 2006
 
 
 Current
                    liabilities(including due to the Company of $83,708)
                
                $
                217,893
                
                
                $
                220,136Long-term
                    obligations
                
                
                89,084
                
                
                
                89,084Stockholders'
                    deficiency
                
                
                (228,929
                )
                
                
                (222,599
                )Total
                    liabilities and stockholders' deficiency
                
                $
                78,048
                
                
                $
                86,621Results
                    of Operations:Revenues
                
                $
                290,944
                
                
                $
                271,142Operating
                    Expenses
                
                
                297,274
                
                
                
                278,387Net
                    loss
                
                $
                (6,330
                )
                
                $
                (7,245
                )
  Under
          the
          1996 transaction the Company and/or related entities of the Company are
          to
          receive 90% of HPB's net income as defined, until the advances made by
          the
          Company and/or related entities of the Company have been paid. The Company,
          with
          the concurrence of the related entities of the Company, has elected that
          its
          advances (non-interest bearing) are to be liquidated, in most part, before
          the
          other related entities. The remaining outstanding due from HPB to the Company
          is
          $83,708, although fully reserved by the Company. During the year ended
          March 31,
          2007 and 2006 the Company received $7,162 and $7,205,  respectively
          from HPB.
  3.
                SECURITIES
                    AVAILABLE FOR SALE
 
 2007
                
                
                2006KSW,
                    Inc.
                
                $
                243,580
                
                
                $
                1,233,069
 
 Unrealized
          gains and losses for marketable equity securities available for sale at
          March
          31, 2007 and 2006 are as follows:
 
 2007
                
                
                2006Current
                
                
                Non-Current
                
                
                Current
                
                
                Non-CurrentAggregate
                    Cost
                
                $
                0
                
                
                $
                38,000
                
                
                $
                0
                
                
                $
                325,348Aggregate
                    Market Value
                
                
                0
                
                
                
                243,580
                
                
                
                0
                
                
                
                1,233,069Net
                    Unrealized Gains
                
                $
                0
                
                
                $
                205,580
                
                
                $
                0
                
                
                $
                907,721
  4.
                NON-CURRENT
                    RECEIVABLES (DISCONTINUED
                    OPERATIONS)
 
 Non-current
          receivables at March 31, 2007 and March 31, 2006 consisted of the
          following:
 
 2007
                
                
                2006Assigned
                    medical billings net of allowances of which $0 of the unpaid
                    balance are
                    expected to be collected during the current fiscal year.
                
                $
                1,080,581
                
                
                $
                1,280,514Working
                    capital advances at 12% per annum interest to a provider of medical
                    services who has contracted with the Company to provide management
                    services. None of these advances are expected to be collected
                    during the
                    current fiscal year, nor is interest being accrued.
                
                
                1,037,530
                
                
                
                1,037,5302,118,111
                
                
                
                2,318,044Less
                    Allowance for Uncollectible
                
                
                (2,118,111
                )
                
                
                (2,164,734
                )0
                
                
                
                153,310Less
                    Current Portion
                
                
                0
                
                
                
                (103,951
                )$
                0
                
                
                $
                49,359
 
 The
          above
          receivable balances have been reduced to reflect estimated cost associated
          with their collections.
 
 F-9
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
          31,
          2007 AND 2006
 
 5.
                LONG-TERM
                    DEBT
 
 Long-term
          debt including  accrued  interest at March 31, 2007 and
          March 31, 2006 consisted
          of the following:
 
 2007
                
                
                2006Related
                  Party:Note
                    payable of $10,000 principal plus accrued interest at 6%, payable
                    in
                    annual installments of interest only, all due on May 6, 2007
                    for  acquisition of certain public shares.
                
                $
                0
                
                
                $
                12,081Note
                    payable of $121,805 principal plus accrued interest at 6%, payable
                    in
                    annual installments of interest only, all due on May 6, 2007
                    for  acquisition of certain public shares.
                
                
                0
                
                
                
                147,152Note
                    payable of $97,043 principal plus accrued interest at 6%, payable
                    in
                    annual installments of interest only, all due on May 6, 2007
                    for  acquisition of certain public shares.
                
                
                0
                
                
                
                117,238Note
                    payable of $17,000 principal plus accrued interest at 6%, payable
                    in
                    annual installments of interest only, all due on May 6, 2007
                    for
                    acquisition of certain public shares.
                
                
                0
                
                
                
                20,538Note
                    payable of $79,500 principal plus accrued interest at 6%, payable
                    in
                    annual installments of interest only, all due on May 6, 2007
                    for
                    acquisition of certain public shares.
                
                
                0
                
                
                
                96,044Note
                    payable of $25,000 principal plus accrued interest at 8%, payable
                    in
                    annual installments of interest only, all due on August 10, 2006
                    for  acquisition of certain non-public shares.
                
                
                0
                
                
                
                30,2770
                
                
                
                423,330Less
                    Current Portion
                
                
                0
                
                
                
                (39,366
                )$
                0
                
                
                $
                383,964
 
 The
          amounts of long-term  debt maturing in each of the years ending March
          31 are as follows: 2007 - zero
 
 Two
          of
          the seller entities asked that their respective shares (47,000)
          be  returned in full settlement of the notes. At the time of the
          request  (August 9, 2005), the share price was $1.65 for a value of
          $77,550 on the  47,000 shares. The pay-out amount on these shares
          would have been $54,834.  The Company determined it was in the best
          interest of the Company to return the  shares as requested and not
          engage in a legal battle and related expense which  at best would have
          yielded an additional $22,716 in revenue. This transaction was completed
          on
          August 17, 2005. The Company obtained extensions  on the remaining
          notes and during the current fiscal year sold 300,348 shares for a gain
          of
          $1,346,238 and paid the notes in full.
  6.
                INCOME
                    TAXES
 
 At
          March
          31, 2007, for income tax reporting purposes, the Company has a consolidated
          net
          operating loss carryforward of approximately $4,759,000 available to reduce
          future taxable income, if any, expiring through 2024. As a result of a
          51%
          change in ownership in a prior year, certain of the net operating loss
          will be
          subject to an annual limitation and may not be fully utilized in any one
          year.
          Because of a history of losses, the estimate for future tax benefits has
          been
          offset by an equal asset valuation allowance.
 
 7.
                COMMITMENTS
                    AND CONTINGENCIES
 
 Leases
          -
          The Company currently leases an office in Sherman Oaks, California on a
          month-to-month basis for collection of receivables and file
          storage  purposes. The monthly rental is $500.
 
 Rent
          expense for discontinued operations amounted to $10,746 and $9,238 for
          the years
          ended March 31, 2007 and 2006, respectively.
 
 F-10
 
 T.H.
          LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
          31,
          2007 AND 2006
 
 8.
                RELATED
                    PARTY TRANSACTIONS
 
 The
          Company has its corporate headquarters in Houston, Texas, where it shares
          office
          space and personnel with an entity for which a principal stockholder of
          the
          Company serves as an unpaid consultant. The Company has entered into agreements
          with this entity whereby that entity will provide various accounting,
          administrative and managerial services for the Company and  certain of
          its subsidiaries for stipulated monthly fees. The agreements are for 12
          months
          and they automatically renew for an additional 12 month period  if not
          terminated within 60 days of the end of the current term. The Company incurred
          fees to this entity under the agreements totaling $49,358 and
          $49,350 for the years ended March 31, 2007 and 2006, respectively.
 
 Certain
          of the Company's creditors are related as a result of one of the Company's
          principal stockholders being a consultant to these entities.
 
 During
          previous fiscal years the Company entered into formal note arrangements
          with its
          chairman regarding advances made by the Company to an entity controlled
          by the
          chairman. The terms of the notes required annual 6% interest payments and
          all
          remaining balances were due at the end of three years. The principal balances
          of
          these notes total $91,000. The Company received an interest
          only  check for $10,253 on the above notes in June 2006. Subsequent to
          fiscal year end 2007, the Company received payment in full on these
          notes.
 
 9.
                OTHER
                    TRANSACTIONS
 
 During
          the year ended March 31, 2006 the Company deposited approximately $80,000
          in
          fees receivable in a bank account, which was controlled by the Company
          but was
          in the name of a former client/provider who also had signature authority
          over
          the account. The former client removed $73,919 from the account without
          authority from the Company and has refused to return the funds to the Company.
          The Company is considering its legal options to affect the return to the
          Company
          of these funds. The Company feels a settlement can be reached for a return
          of a
          majority of these funds less any legal costs. As such the Company has recorded
          an allowance based on management’s estimate of realization.
   F-11