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, 2005.





o 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 806, 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 o





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 17, 2005Common
                Stock, par value $.01 per share
            6,945,118
                Shares





Preferred
      Stock, $.01 Par.


(Title
      of
      Class)





Transitional
      Small Business Format (check one): Yes o 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 $365,433.





The
      aggregate market value of the voting stock held by nonaffiliates of the
      registrant is approximately $873,683 as of May 17, 2005.





6,970,118


(Number
      of shares of common stock outstanding as of May 17, 2005)










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.





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 is 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 are derived from fees charged for these services.
      Presently, the company has one client, which operates 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 Corporation and Med-Fin Management Services, Inc. receive, as a
      fee
      for their clinic management services, revenues that are indirectly related
      to
      the overall collections of their client practitioners' receivables. MedFin
      Management Corporation and Med-Fin Management Services, Inc. also provide
      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
      is 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. The Company provided medical business
      management services through that time to providers it managed related to
      existing patients and new patients for physical therapy only. 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 is now employing 1 person 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 expected to take several years
      as
      with previous provider receivables. The Company does not expect a significant
      change in realization rate of provider receivables that it manages. The
      valuation of the existing receivables as of March 31, 2005 takes into
      consideration the expected future collection costs. 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 is subject to various laws and regulations with respect to employee
      health and safety and the protection of the environment. The Company believes
      that it is in substantial compliance with such laws and
      regulations.





Employees:





The
      Company employs 1 person in the medical management field that is engaged in
      an
      administrative and clerical position. 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 had leased office space in Burbank, California, which
      was
      utilized by Med-Fin Management Services, Inc., under an operating lease that
      expired on February 28, 2005. Monthly rental payments were $8,580, including
      all
      utilities. 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 $500, including all
      utilities.




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, 2005 are as follows:





For
                the Quarter Ended
            
            High
            
            LowJune
                30, 2003
            
            $
            .15
            
            $
            .15September
                30, 2003
            
            $
            .20
            
            $
            .20December
                31, 2003
            
            $
            .20
            
            $
            .20March
                31, 2004
            
            $
            .20
            
            $
            .20June
                30, 2004
            
            $
            .15
            
            $
            .15September
                30, 2004
            
            $
            .15
            
            $
            .15December
                31, 2004
            
            $
            .15
            
            $
            .15March
                31, 2005
            
            $
            .15
            
            $
            .15





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
      17, 2005 the Company had approximately 136 shareholders of record. Cede &
      Co. was the registered holder of 1,041,721 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, 2005.





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 derives it management fee (discontinued operations) revenue under the
      contractual provisions between the Company as the manager and the professional
      health care provider. The Company earns its management fee based on a percentage
      of net revenue to be derived by the health care provider. This management fee
      is
      recorded in the accounting records on an accrual basis as a percentage of the
      professional health care company's net revenues, which gives effect to the
      difference between, established charges and estimated third-party payer
      payments. The Company further provides 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, 2005 Compared to Fiscal Year Ended March 31,
      2004





Revenues
      totaled $29,050 during the fiscal year ended March 31, 2005, 33% lower than
      the
      prior year's revenues of $43,675. Included in the total 2005 revenues is $25,663
      related to the Company's portion of net income of Healthcare Professional
      Billing Corp. (HPB) under the 1996 transfer agreement. The Company recorded
      $39,245 in 2004 related to its portion. This is the major reason for the
      decrease in revenues for the year. Interest expense decreased from $27,078
      for
      the fiscal year ended March 31, 2004 to $19,873 for the fiscal year ended March
      31, 2005. This was due to the convertible preferred shares of Famoice (an
      investment) being exchanged to a related entity, as per the agreement, for
      the
      cancellation for the note payable. General and Administrative expenses were
      12%
      lower for 2005 than year ending 2004, being $77,770 and $88,382
      respectively.





Fiscal
      Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31,
      2003





Revenues
      totaled $43,675 during the fiscal year ended March 31, 2004, 2% lower than
      the
      prior year's revenues of $44,622. Included in the total 2004 revenues is $39,245
      related to the Company's portion of net income of Healthcare Professional
      Billing Corp. (HPB) under the 1996 transfer agreement. The Company recorded
      $36,958 in 2003 related to its portion. Interest expense increased from $9,882
      for the fiscal year ended March 31, 2003 to $27,078 for the fiscal year ended
      March 31, 2004. This was due to note payables issued in exchange for the
      acquisition of shares in a publicly traded company in November 2002 and a full
      year of interest being accrued for the fiscal year ending March 31, 2004.
      General and Administrative expenses were $88,382 for 2004 and $89,242 for
      2003.





Statements
      of Operations for discontinued operations:





Fiscal
      Year Ended March 31, 2005 Compared to Fiscal Year Ended March 31,
      2004





Revenues
      totaled $336,383 during the fiscal year ended March 31, 2004, 61% lower than
      the
      prior year's revenues of $863,395. Management fees decreased due winding down
      of
      patient activity in December 2004. General and Administrative expenses increased
      15.9% to $916,557 from $790,733 mainly due to management’s review of its
      remaining net receivables requiring an additional adjustment to bad debt expense
      of $442,000, that reflects, in part, the additional costs of future collections.





Fiscal
      Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31,
      2003





Revenues
      totaled $863,395 during the fiscal year ended March 31, 2004, 9% lower than
      the
      prior year's revenues of $950,631. Management fees decreased due to less patient
      activity. General and Administrative expenses decreased 13.6% to $790,733 from
      $914,917 mainly due to management’s opinion that net receivables balances were
      realistic and an increase to the allowance account was not needed for the fiscal
      year ending March 31, 2004, compared to the bad debt expense of $131,065 for
      the
      fiscal year ended March 31, 2003.





Liquidity,
      Capital Resources and Income Taxes





At
      March
      31, 2005 cash amounted to $9,513 a decrease of $740 over the cash balance of
      $8,773 at March 31, 2004.





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 and its lines of credit
      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 the collections on the remaining
      receivables balance during the year ended March 31, 2006 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 operations.





The
      Company is continually 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, 2005, the Company had an operating tax loss carryforward of approximately
      $6,015,000.





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
            59
            1996
            DirectorRaffaele
                Attar
            32
            2000
            DirectorGary
                Poe
            38
            
            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 8 years of experience as an investment analyst
      including 6 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
      16 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, 2005, 2004, and 2003.





Name
                and Principal Position
            Year
            Salary
            Restricted
                Stock AwardsNone
            2005
            $  0
            $  0None
            2004
            $  0
            $  0None
            2003
            $ 
                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 17, 2005:




Name
                and Address Of
              Beneficial
                Owner
            
            
            Amount
                    and Nature OfBeneficial
                  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 806Houston,
                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 Management





Dibo
                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 806, Houston,
      Texas 77079.


ITEM
                  12.
              CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS.





During
      the years ended March 31, 2005 and March 31, 2004, the Company incurred
      management fees for facilities and services provided by Woodco Fund Management
      Inc., in the amount of $124,350 and $139,350 respectively. Such services are
      believed to have been provided on terms no less favorable than available from
      a
      third party.





On
      August
      11, 2003, the Company signed a Convertible Promissory Note (“Note”) Purchase
      Agreement, effective August 11, 2003 with Rollouts Incorporated (“Rollouts”).
      The Company has agreed to advance up to $250,000 of principal at an interest
      rate of 10%, computed on the date of the advances as simple annual interest.
      Rollouts must pay unpaid interest accrued on the Note upon conversion of such
      Note into shares of Rollouts Common Stock. Interest only payments are due on
      January 1, April 1, July 1, and October 1. Rollouts may prepay in cash the
      outstanding principal upon written notice to the Company. The Company has 60
      days to consider whether to accept or reject the prepayment. The Company may
      reject any such prepayment, provided, however, that any such rejection shall
      cause an automatic conversion of the entire principal amount outstanding under
      the Note. The Company shall also have the right at its option to convert the
      outstanding principal amount under the Note or any portion thereof, into that
      number of fully paid and non-assessable shares of Common Stock obtained by
      dividing the outstanding principal amount under the Note surrendered for
      conversion by the Conversion Price. The beginning conversion price to be $.50
      subject to certain adjustments during the term of the Note. To fund this
      investment, the Company will use existing working capital and may seek
      additional funding through short and long term notes. Mr. Raffaele Attar, the
      Company’s chairman, is a member of the board of directors of Rollouts, Inc. This
      Note was purchased by a related party on July 14, 2004. The Company was paid
      interest up through June 30, 2004.





On
      December 6, 2003 the Company borrowed $56,500 from a related entity in exchange
      for an interest-bearing, nonrecourse note. The 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 December 5, 2005. The Company will repay the Note from
      its
      working capital. With the proceeds, the Company acquired 80,000 convertible
      preference shares of Famoice (“Famoice”) Technology Pty Ltd. The purchase price
      was $56,500. The Company secured the Note with the convertible preference shares
      of Famoice. As per the agreement with the related entity the shares of Famoice
      were returned to the related entity who now takes ownership of the shares.
      The
      note was removed from the Company with this transaction.





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
      the prior fiscal year the Company entered into a formal note arrangement with
      its chairman regarding advances made by the Company to an entity controlled
      by
      the chairman. The term of the notes require annual 6% interest payments and
      all
      remaining balances are due at the end of three years (2006). The aggregate
      principal balances of the notes are $46,000.





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, 2005 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, 2005 and 2004


Consolidated
      Statements of Operations


Years
      Ended March 31, 2005 and 2004


Consolidated
      Statements of Changes in Stockholders' Equity


Years
      Ended March 31, 2005 and 2004


Consolidated
      Statements of Cash Flows


Years
      Ended March 31, 2005 and 2004


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




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:
                July 12, 2005T.H.
                LEHMAN & CO., INCORPORATED AND SUBSIDIARIESBy:
              /s/ Raffaele
                AttarRaffaele
                  Attar
                Acting
                  Chairman and
                Chief
                  Executive Officer
  By:
              /s/ Gary
                PoeGary
                  Poe
                Principal
                  Financial Officer
                and
                  Secretary





T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
      FINANCIAL STATEMENTS


YEARS
      ENDED MARCH 31, 2005 AND MARCH 31, 2004





INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS:





Report
                of Independent Registered Public Accounting
                Firm
            F-2Consolidated
                Balance SheetsAs
                of March 31, 2005 and 2004
            F-3Consolidated
                Statements of Operations and Comprehensive Income
                (Loss)Years
                Ended March 31, 2005 and 2004
            F-4Consolidated
                Statements of Stockholders'
                EquityYears
                Ended March 31, 2005 and 2004
            F-4Consolidated
                Statements of Cash FlowsYears
                Ended March 31, 2005 and 2004
            F-5Notes
                to Consolidated Financial
                Statements
            F-6


*Index
          to Consolidated Financial
          Statements:*


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, 2005 and 2004 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, 2005 and 2004 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 has 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


July
      12,
      2005


F-2
 *Index
          to Consolidated Financial
          Statements:*


T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
      BALANCE SHEETS


MARCH
      31,
      2005 AND MARCH 31, 2004





ASSETS2005
            
            2004CURRENT
                ASSETSCash
            
            $
            9,513
            
            $
            8,773Accounts
                receivable
            
            
            0
            
            
            12,000Current
                portion of non-current receivablerelated
                party
            
            
            4,305
            
            
            2,795Current
                portion of non-current receivablesfrom
                discontinued operations
            
            
            255,364
            
            
            493,160TOTAL
                CURRENT ASSETS
            
            
            269,182
            
            
            516,728OTHER
                ASSETSSecurities
                available for sale
            
            
            286,198
            
            
            366,333Investments
                in non-public companies
            
            
            0
            
            
            56,500Non-current
                receivables - related party
            
            
            46,000
            
            
            46,000Non-current
                receivables
            
            
            0
            
            
            25,000Non-current
                receivables from discontinuedOperations
            
            
            195,398
            
            
            544,044Deposits
            
            
            5,000
            
            
            16,676TOTAL
                OTHER ASSETS
            
            
            532,596
            
            
            1,054,553TOTAL
                ASSETS
            
            $
            801,778
            
            $
            1,571,281LIABILITIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESManagement
                fees - related party
            
            $
            511,375
            
            $
            461,675Accrued
                liabilities
            
            
            0
            
            
            3,450Current
                portion of long-term debt-related parties
            
            
            429,181
            
            
            36,960Amounts
                due to related parties
            
            
            0
            
            
            84,000Management
                  fees - related party from discontinued operations
            
            
            323,949
            
            
            272,262Accounts
                  payable and accrued liabilities from discontinued
                  operations
            
            
            33
            
            
            17,943TOTAL
                CURRENT LIABILITIES
            
            
            1,264,538
            
            
            876,290LONG-TERM
                LIABILITIESLong-term
                debt, less current portion related parties
            
            
            25,000
            
            
            453,848TOTAL
                LIABILITIES
            
            
            1,289,538
            
            
            1,330,138COMMITMENTS
                AND CONTINGENCIESSTOCKHOLDERS'
                EQUITYCommon
                  stock-par value $.01; authorized 20,000,000 shares, issued 6,970,118
                  shares at March 31, 2005 and 2004
            
            
            69,701
            
            
            69,701Preferred
                    stock-par value $.01; authorized 10,000,000 shares, issued
                    0
                    shares at March 31, 2005 and 2004
            
            
            0
            
            
            0Additional
                paid-in capital
            
            
            8,076,340
            
            
            8,076,340Unrealized
                gain(loss) on investments
            
            
            (
                91,235
            )
            
            (
                11,100
            )Accumulated
                deficit
            
            
            (8,494,128
            
            
            (7,845,360
            )Treasury
                stock at cost - 25,000 shares
            
            
            (
                48,438
            )
            
            (
                48,438
            )TOTAL
                STOCKHOLDERS' EQUITY (DEFICIT)
            
            
            (
                487,760
            )
            
            241,143$
            801,778
            
            $
            1,571,281








See
      accompanying Notes to Consolidated Financial Statements


F-3
 *Index
          to Consolidated Financial
          Statements:*


T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
      (LOSS)


YEARS
      ENDED MARCH 31, 2005 AND MARCH 31, 2004





2005
            
            2004REVENUESInterest
                and dividends
            
            $
            3,387
            
            $
            4,430Miscellaneous
                income
            
            
            25,663
            
            
            39,245TOTAL
                REVENUES
            
            
            29,050
            
            
            43,675OPERATING
                EXPENSESSelling,
                general and administrative
            
            
            77,770
            
            
            88,382Interest
                expense
            
            
            19,873
            
            
            27,078TOTAL
                OPERATING EXPENSES
            
            
            97,643
            
            
            115,640LOSS
                FROM CONTINUING OPERATIONS
            
            
            (
                68,593
            )
            
            (
                71,785
            )PROVISION
                FOR INCOME TAXES
            
            
            0
            
            
            0LOSS
                FROM CONTINUING OPERATIONS
            
            
            (
                68,593
            )
            
            (
                71,785
            )INCOME
                / (LOSS) FROM DISCONTINUED OPERATIONS
            
            
            (
                580,175
            )
            
            72,662NET
                INCOME / (LOSS)
            
            
            (
                648,768
            )
            
            877OTHER
                COMPREHENSIVE INCOME:Unrealized
                gain (loss) on securities
            
            
            (
                80,135
            )
            
            41,976TOTAL
                OTHER COMPREHENSIVE INCOME
            
            
            (
                80,135
            )
            
            41,976COMPREHENSIVE
                INCOME (LOSS)
            
            $
            (
                728,903
            )
            $
            42,853PER
                SHARE DATA:WEIGHTED
                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
            
            
            6,945,118
            
            
            6,945,118NET
                LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS
            
            $
            (0.01
            )
            $
            (0.01
            )NET
                  INCOME/(LOSS) PER COMMON SHARE FROM DISCONTINUED
                  OPERATIONS
            
            
            (0.08
            )
            
            0.01NET
                LOSS PER COMMON SHARE
            
            $
            (0.09
            )
            $
            0.00








See
      accompanying Notes to Consolidated Financial Statements




T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' EQUITY


YEARS
      ENDED MARCH 31, 2005 AND MARCH 31, 2004


BALANCE




Common
                  Stock
              
              
              
              
              
              
              
              Treasury
                  StockShares
              
              
              
              Additional
                Paid-in
              
              Accumulated
              
              Unreal.
                    Gain on Sec Avail.
              
              for
                  SharesIssued
              
              Amount
              
              Capital
              
              Deficit
              
              for
                  sale
              
              Held
              
              Amount
              
              Total6,970,118
              
              $
              69,701
              
              $
              8,075,850
              
              $
              (7,846,237
              )
              $
              (53,076
              )
              
              25,000
              
              $
              (48,438
              )
              $
              197,800Unrealized
                  gain on securities available for
                  sale:
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              41,976
              
              
              
              
              
              
              
              
              41,976Additional
                  paid in Capital
              
              
              
              
              
              
              
              
              490
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              490Net
                  income
              
              
              
              
              
              
              
              
              
              
              
              877
              
              
              
              
              
              
              
              
              
              
              
              877BALANCE,
                  March 31, 2004:
              
              
              6,970,118
              
              
              69,701
              
              
              8,076,340
              
              
              (7,845,360
              )
              
              (11,100
              )
              
              25,000
              
              
              (
                  48,438
              )
              
              241,143Unrealized
                  loss on securities available
                  for sale
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (80,135
              )
              
              
              
              
              
              
              
              (
                  80,135
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (
                  648,768
              )
              
              
              
              
              
              
              
              
              
              
              (
                  648,768
              )BALANCE,
                  March 31, 2005:
              
              
              6,970,118
              
              $
              69,701
              
              $
              8,076,340
              
              $
              (8,494,128
              )
              $
              (91,235
              )
              
              25,000
              
              $
              (48,438
              )
              $
              (
                  487,760
              )






See
      accompanying Notes to Consolidated Financial Statements


F-4
 *Index
          to Consolidated Financial
          Statements:*


T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


YEARS
      ENDED MARCH 31, 2005 AND MARCH 31, 2004





2005
            
            2004CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss from continuing operations
            
            $
            (
                68,593
            )
            $
            (
                71,785
            )Net
                income(loss) from discontinued operations
            
            
            (
                580,175
            )
            
            72,662Adjustments
                to reconcile net income/(loss) toNet
                cash used in operating activities:Provision
                for bad debts
            
            
            442,000
            
            
            0Deposits
                (paid) received
            
            
            11,676
            
            
            (
                5,000
            )Changes
                in operating assets and liabilities:(Increase)
                decrease in:Accounts
                receivable
            
            
            12,000
            
            
            (
                1,811
            )Value
                of marketable securities
            
            
            80,135
            
            
            (
                41,976
            )Increase
                (decrease) in:Accounts
                payable
            
            
            (
                524
            )
            
            158,414Accrued
                liabilities
            
            
            (
                63,710
            )
            
            71,128NET
                CASH FROM/(USED)OPERATING
                ACTIVITIES
            
            
            (
                167,191
            )
            
            181,632CASH
                FLOWS FROM INVESTING ACTIVITIESLoans
                made evidenced by notes receivable
            
            
            (
                772,396
            )
            
            (
                932,049
            )Collection
                of notes receivable
            
            
            568,191
            
            
            785,076(Increase)
                decrease in non-current receivables
            
            
            179,889
            
            
            (
                136,166
            )Loan
                made/(paid) evidenced by notesreceivable-related
                party
            
            
            (
                1,510
            )
            
            18,458(Increase)
                decrease in non-current receivablesrelated
                party
            
            
            0
            
            
            (
                46,000
            )Acquisition
                of investments in non-public companies
            
            
            56,500
            
            
            0Increase
                (decrease) in ownership of subsidiary
            
            
            0
            
            
            490NET
                CASH FROM/(USED)INVESTING
                ACTIVITIES
            
            
            224,431
            
            
            (
                310,191
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                of long-term debt
            
            
            0
            
            
            25,000Repayment
                of long-term debt
            
            
            (
                56,500
            )
            
            0NET
                CASH PROVIDED/(USED) BY FINANCING ACTIVITIES
            
            
            (
                56,500
            )
            
            25,000INCREASE
                (DECREASE) IN CASH
            
            
            740
            
            
            (
                103,559
            )CASH
                - BEGINNING OF YEAR
            
            
            8,773
            
            
            112,332CASH
                - END OF YEAR
            
            $
            9,513
            
            $
            8,773








See
      accompanying Notes to Consolidated Financial Statements




F-5
 *Index
          to Consolidated Financial
          Statements:*


T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2005 AND 2004




1.  SUMMARY
      OF
      SIGNIFICANT ACCOUNTING POLICIES





**Outlook**
      - As of March 31, 2005, 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
      and
      cash equivalents totaled $9,513 at March 31, 2005. The Company had nominal
      revenues from continuing operations for the twelve-month period ended March
      31,
      2005. The Company’s cash position is insufficient to meet its ongoing expenses
      including its corporate maintenance requirements. The Company will be required
      to collect receivables from its discontinued operations in sufficient amounts
      to
      sustain basic operations through the remainder of the fiscal year and/or until
      a
      merger candidate with operations of its own is located and a transaction is
      consummated. While the Company is actively seeking investments through private
      investors and other parties, there is no assurance that the Company will be
      able
      to collect adequate receivables amounts or raise additional capital sufficient
      to meet its needs for the entire period required.





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 operations.





**Description
      of the Business** - T.H. Lehman & Co., Incorporated, a Delaware
      corporation, has 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 is 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. The Company provided medical business
      management services through that time to providers it managed related to
      existing patients and new patients for physical therapy only. 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 is now employing one person 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 expected
      to
      take several years as with previous provider receivables. The Company does
      not
      expect a significant change in realization rate of provider receivables that
      it
      manages. The valuation of the existing receivables as of March 31, 2005 takes
      into consideration the expected future collection costs. 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.





**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.







**Receivables**
      - Assigned medical billings represent the contractual percentage of medical
      provider receivables of medical practices to which the Company provides
      management services. Revenues are recognized when the medical services are
      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, 2005
      and March 31, 2004 is as follows:





March
                31, 2005
            
            March
                31,2004Financial
                Position:Current
                Assets
            
            $
            86,535
            
            $
            123,613Property
                and equipment
            
            
            0
            
            
            0Total
                assets
            
            $
            86,535
            
            $
            123,613


F-6
 *Index
          to Consolidated Financial
          Statements:*


T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2005 AND 2004





Current
                liabilities(includingdue
                to the Company of $98,075)
            
            $
            212,805
            
            $
            239,442Long-term
                obligations (a)
            
            
            89,084
            
            
            103,719Stockholders'
                deficiency
            
            
            (215,354
            )
            
            (219,548
            )Total
                liabilities and stockholders'deficiency
            
            $
            86,535
            
            $
            123,613Results
                of Operations:Revenues
            
            $
            270,674
            
            $
            265,480Operating
                Expenses
            
            
            266,481
            
            
            241,673Net
                income
            
            $
            4,193
            
            $
            23,807





(a)
      Certain creditors of HPB are also creditors of the Company.





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 it's
      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
      $98,075, although fully reserved by the Company. During the year ended March
      31,
      2005 and 2004 the Company received $37,663 and $34,018, respectively from
      HPB.





3. SECURITIES
      AVAILABLE FOR SALE





2005
            
            2004KSW,
                Inc.
            
            $
            286,198
            
            $
            366,333





Unrealized
      gains and losses for marketable equity securities available for sale at March
      31, 2005 and 2004 are as follows:





2005
            
            2004Current
            
            Non-Current
            
            Current
            
            Non-CurrentAggregate
                Cost
            
            $
            0
            
            $
            377,434
            
            $
            0
            
            $
            377,434Aggregate
                Market Value
            
            
            0
            
            
            286,199
            
            
            0
            
            
            366,334Net
                Unrealized Gains
            
            $
            0
            
            $
            (91,235
            )
            $
            0
            
            $
            (
                11,100
            )





4. NON-CURRENT
      RECEIVABLES (DISCONTINUED OPERATIONS)





Non-current
      receivables at March 31, 2005 and March 31, 2004 consisted of the
      following:





2005
            
            2004Assigned
                medical billings net of allowances of which $259,669 of the unpaid
                balance
                are expected to be collected during the current fiscal
                year.
            
            $
            1,539,046
            
            $
            1,683,488Working
                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
            
            
            1,037,5302,576,576
            
            
            2,721,018Less
                Allowance for Uncollectible
            
            
            (2,125,814
            )
            
            (1,683,814
            )450,762
            
            
            1,037,204Less
                Current Portion
            
            
            (255,364
            )
            
            (493,160
            )$
            195,338
            
            $
            544,044




During
      October 2003 the Company entered into an agreement to purchase the minority
      interest shares of a medical management subsidiary that was owned by a medical
      provider (seller) whose provider entity is managed by the Company. Under the
      terms of the agreement the Company was to pay an aggregate of $137,000, an
      initial payment of $25,000 plus 12 payments without interest of $9,333 through
      October 2004. Under the terms of the agreement the seller released all claims
      against the assigned medical receivables which the Company manages. This
      agreement was satisfied during the year ended March 31, 2005.





The
      above
      receivable balances have been reduced to reflect estimated cost associated
      with
      their collections.




F-7
 *Index
          to Consolidated Financial
          Statements:*




T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2005 AND 2004





5. LONG-TERM
      DEBT





Long-term
      debt including accrued interest at March 31, 2005 and March 31, 2004 consisted
      of the following:





2005
            
            2004Related
                Party:Note
                payable of $10,000 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            $
            11,438
            
            $
            10,838Note
                payable of $121,805 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            
            139,325
            
            
            132,017Note
                payable of $97,043 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            
            111,001
            
            
            105,179Note
                payable of $34,000 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            
            38,890
            
            
            36,850Note
                payable of $13,000 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            
            14,870
            
            
            14,090Note
                payable of $17,000 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            
            19,445
            
            
            18,425Note
                payable of $79,500 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on November 6, 2005
                for
                acquisition of certain public shares.
            
            
            90,935
            
            
            86,165Note
                payable of $56,500 principal plus accrued interest at 6%, payable
                in
                annual installments of interest only, all due on December 5, 2005
                for
                acquisition of certain non-public shares.
            
            
            0
            
            
            60,967Note
                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.
            
            
            28,277
            
            
            26,277$
            454,181
            
            $
            490,808Less
                Current Portion
            
            
            (429,181
            )
            
            (
                36,960
            )$
            25,000
            
            $
            453,848





The
      amounts of long-term debt maturing in each of the years ending March 31 are
      as
      follows: 2005 - $429,181; 2006 - $25,000.




6. INCOME
      TAXES





At
      March
      31, 2005, for income tax reporting purposes, the Company has a consolidated
      net
      operating loss carryforward of approximately $6,015,000 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 histories 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 amounted to $101,296 and $107,757 for the years ended March 31, 2005
      and
      2004, respectively.




F-8
 *Index
          to Consolidated Financial
          Statements:*




T.H.
      LEHMAN & CO., INCORPORATED AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2005 AND 2004





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 $124,350 and $139,350 for the years ended
      March 31, 2005 and 2004, respectively.





On
      August
      11, 2003, the Company signed a Convertible Promissory Note (“Note”) Purchase
      Agreement, effective August 11, 2003 with Rollouts Incorporated (“Rollouts”).
      The Company had agreed to advance up to $250,000 of principal at an interest
      rate of 10%, computed on the date of the advances as simple annual interest.
      Rollouts was to pay unpaid interest accrued on the Note upon conversion of
      such
      Note into shares of Rollouts Common Stock. Interest only payments were due
      on
      January 1, April 1, July 1, and October 1. Rollouts was to prepay in cash the
      outstanding principal upon written notice to the Company. The Company had 60
      days to consider whether to accept or reject the prepayment. The Company had
      the
      rights to reject any such prepayment, provided, however, that any such rejection
      would cause an automatic conversion of the entire principal amount outstanding
      under the Note. The Company also had the right at its option to convert the
      outstanding principal amount under the Note or any portion thereof, into that
      number of fully paid and non-assessable shares of Common Stock obtained by
      dividing the outstanding principal amount under the Note surrendered for
      conversion by the Conversion Price. The beginning conversion price was to be
      $.50 per share subject to certain adjustments during the term of the Note.
      To
      fund this investment, the Company was to use existing working capital and was
      to
      seek additional funding through short and long term notes. Mr. Raffaele Attar,
      the Company’s unpaid chairman, is a member of the board of directors of
      Rollouts, Inc. This Note was purchased by a related party on July 14, 2004.
      The
      Company was paid i nterest
      up through June 30, 2004.





On
      December 6, 2003 the Company borrowed $56,500 from a related entity in exchange
      for an interest-bearing, nonrecourse note. The note was to bear interest at
      6%
      per annum and was payable in annual interest only installments and was due
      and
      payable in full on or before December 5, 2005. The Company was to repay the
      Note
      from its working capital. With the proceeds, the Company acquired 80,000
      convertible preference shares of Famoice (“Famoice”) Technology Pty Ltd. The
      purchase price was $56,500. The Company secured the Note with the convertible
      preference shares of Famoice. As per the agreement with the related entity
      the
      shares of Famoice were returned to the related entity who now takes ownership
      of
      the shares in exchange for the note.





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
      the prior fiscal year the Company entered into a formal note arrangement with
      its chairman regarding advances made by the Company to an entity controlled
      by
      the chairman. The terms of the notes require annual 6% interest payments and
      all
      remaining balances are due at the end of three years (2006). The principal
      balances of these notes total $46,000.




F-9