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, 2001.

[ ]  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
                (Name of small business issuer in its charter)

            Delaware                                            22-2442356
(state or other jurisdiction                                (I.R.S./Employer
of incorporation or organization                         Identification Number)

4900 Woodway, Suite 650, Houston, Texas                            77056
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number:  (713) 621-8404

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

                             Common Stock, $.01 Par.
                            Preferred Stock, $.01 Par.
                                (Title of Class)

Securities registered under Section 12(g) of the Exchange Act:  None.

     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 .

     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 $751,681.

     The aggregate market value of the voting stock held by nonaffiliates of the
registrant is approximately $772,044 as of May 31, 2001.

                                    6,970,118
                                    ---------
        (Number of shares of common stock outstanding as of May 31, 2001)


<PAGE>
                                     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. Effective
October  27,  1989,  the  Company  acquired all of the outstanding stock of Self
Powered Lighting, Inc. a New York corporation with offices in Elmsford, New York
("SPL") from an entity affiliated with two of the Company's directors. Effective
July  1,  1993  the  Company  sold  all  of  the  outstanding  stock  of  SPL to
Helionetics,  Inc.  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.  During  1992  the  Company entered the
business  of  medical  accounts  receivable  financing  and  furnishing  medical
providers  with  non-medical  management  services.

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.  However,  some of these subsidiaries
offer substantial additional services to medical practitioners. The services are
marketed both on an integrated and on an unbundled  basis to doctors,  depending
upon their individual needs.

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.


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 7 persons in the medical management field who are engaged in
executive,  administrative and clerical positions. 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.


                                     Page 2
<PAGE>
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  leases  office  space  in  Burbank, California under an
operating  lease  that expires on February 28, 2005. Monthly rental payments are
$7,857,  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

At the December 5, 2000 Annual Meeting of Stockholders, a new Board of Directors
were  elected  to  a term of one year and until their successors are elected and
qualified.  The  Board  members are Elliot Gerstenhaber, Richard Farkas, Michael
Lyons,  Russell  Molina  and  Raffaele  Attar.  The proposal was approved by the
majority  vote  of  shareholders.

In  addition,  at the December 5, 2000 Annual Meeting of Stockholders, the Board
of  Directors  received  approval  of  their  proposal to issue 2,227,398 Common
Shares  of  $.01  Par  Value  in  consideration  of  the  forgiveness of certain
indebtedness by the Company to a related party. The proposal was approved by the
majority  vote  of  shareholders.  In  the  course  of determining the Company's
ability to increase the number of authorized shares from 5,000,000 to 20,000,000
it was determined the Company already had this available to it as stated in item
4  of  the  Company's  Certificate of Incorporation. Disclosure on the Company's
Balance  Sheet under Stockholder's Equity beginning the quarter ending September
30,  1992  through  its  filing  for  period  ending  June 30, 2000, should have
reflected  20,000,000  shares  of  Common  Stock  and  10,000,000  shares  of
undesignated  Preferred  Stock as the correct number of authorized shares. Since
the  number  of  issued  and outstanding shares has been reported correctly, the
Company  believes  there  has  been  no  negative  impact  as  a  result  of the
inadvertent  error  in disclosure. The Board determined that a value of $.15 was
to be used to calculate the exchange of shares for $334,109.65 in debt, based on
book  value  of  the  company, at the time, and other factors. These shares were
issued  in  the  last  quarter  of  fiscal  2001.

Also,  at  the  December  5,  2000  Annual Meeting of Stockholders, the Board of
Directors  received  approval to ratify the selection of Jeffrey S. Gilbert, CPA
as  the Company's independent certified accountant. The proposal was approved by
the  majority  of  shareholders.

                                     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, 2001 are as follows:

<TABLE>
<CAPTION>
For the Quarter Ended                      High                     Low
<S>                                        <C>                     <C>

        June 30, 1999                      $ .125                  $ .125
        September 30, 1999                 $ .125                  $ .125
        December 31, 1999                  $ .125                  $ .125
        March 31, 2000                     $ .125                  $ .125

        June 30, 2000                      $ .125                  $ .125
        September 30, 2000                 $ .125                  $ .125
        December 31, 2000                  $ .125                  $ .25
        March 31, 2001                     $ .25                   $ .25
</TABLE>

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  31,  2001 the Company had approximately 135 shareholders of record.
Cede  &  Co.  was  the  registered holder of 986,755 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,  2001.

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

Statements of Operations:

Fiscal Year Ended March 31, 2001 Compared to Fiscal Year Ended March 31, 2000

Revenues  totaled  $751,681  during  the  fiscal  year ended March 31, 2001, 24%
higher  than  the  prior  year's  revenues  of  $605,521. The gain from sales of
securities increased to $157,189 from $0 in the previous year's report. Interest
expense  increased  16%  from 56,343 for the fiscal year ended March 31, 2000 to
$65,294  for  the fiscal year ended March 31, 2001. This is due to note payables
issued  in  exchange  for  the  acquisition  of  shares in three publicly traded
companies  and  two  private  companies.  General  and  Administrative  expenses
increased  85%  to  $1,258,706  mainly  due  to  uncollectible  accounts expense
increasing  by  $525,716.


                                     Page 3
<PAGE>
Fiscal Year Ended March 31, 2000 Compared to Fiscal Year Ended March 31, 1999

Revenues totaled $605,521 during the fiscal year ended March 31, 2000, 45% lower
than  the prior year's revenues of $1,106,404. The gain on investments decreased
to $0 from the previous year's $447,589 when there had been a gain attributed to
sales  of  its  investment  in  KTI,  Inc.  to settle certain notes and accounts
payable.  Income  from  Finance  Receivables also decreased 40% due to decreased
collections  on  past  receivables.  Interest expense increased $56,343 from the
prior  years  $34,637  due  to  an  increase  in  notes  payable.  General  and
Administrative  expenses  decreased  40% to $681,920 mainly due to uncollectible
accounts  expense  decreasing  and  lower  employee  expenses.

Liquidity, Capital Resources and Income Taxes

At March 31, 2001 cash amounted to $71,557 an increase of $62,476 over the cash
balance of $9,081 at March 31, 2000.

During the year, the Company issued 2,227,398 Common Shares of $.01 Par Value in
consideration of the forgiveness of certain indebtedness by the Company
aggregating $334,110 to a related party.

The Company's primary source of liquidity has been the cash it has obtained from
the liquidation of its investment  portfolio 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  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,  2001,  the  Company  had an  operating  tax loss  carryforward  of
approximately $5,937,000.

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.


                                     Page 4
<PAGE>
                                    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             Position

Elliot Gerstenhaber      54                1996   Director/Secretary/Treasurer
Richard Farkas           75                1996                       Director
Michael Lyons            39                2000                       Director
Russell S. Molina        33                2000             Director/President
Raffaele Attar           30                2000                       Director

At the December 5, 2000 Annual Meeting of Stockholders, a new Board of Directors
were elected. The Board members are Elliot Gerstenhaber, Richard Farkas, Michael
Lyons,  Russell  S. Molina and Raffaele Attar.

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.

Richard P. Farkas is a graduate of Princeton and Yale  Universities and attended
New Jersey Law School. He held corporate  executive and operating positions with
major international companies prior to acquiring his own paper products company,
which was later sold to a major consumer products  company.  He then founded IMC
International  Management  Consultants,  Inc.,  which  operates  out of  several
domestic and European offices providing services to multi-national  corporations
ranging in annual revenue size from $5 million to $4 billion.

Michael Lyons is a graduate of Northeastern University holding a B. A. degree in
Economics.  Mr.  Lyons  was  President  and  founder of both Utility Information
Systems,  Inc.  (1993)  and  Utili-Comm  Technologies,  Inc. (1994) Mr. Lyons is
currently  serving  as  President  and  Director  to  Amaroq,  Inc.

Russell  S.  Molina is a 1989 graduate of Sam Houston State University holding a
B.A.  degree  in  Marketing.  Mr.  Molina  has  been associated with Woodco Fund
Management  (WFM)  since 1990 and was promoted to President February 1999. Prior
to joining WFM, Mr. Molina worked as a venture accountant with a commercial real
estate  company in Houston, Texas and as a Contoller in the manufacturing arena.
Mr.  Molina  has over 5 years of direct investment experience in the speculative
and  income  markets.

Raffaele  Attar  graduated  from  St.  John's  College  in 1995 with a degree in
Philosophy and Mathematics. Mr. Attar has 5 years of experience as an investment
analyst  including  3  years  experience  in the medical financing industry. Mr.
Attar  currently  sits on the Board of Directors for Rollouts, Inc., a privately
held  multi-site  equipment  deployment  company  based  in  Minneapolis,  MN.

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, 2001, 2000, and 1999.

<TABLE>
<CAPTION>
     Name and                                              Restricted
     Principal                                               Stock
     Position                    Year        Salary          Awards
<S>                              <C>         <C>            <C>
None                             2001        $     0        $     0
None                             2000        $     0        $     0
None                             1999        $     0        $     0
</TABLE>

Stock Options:

In November 1990 the Board of Directors adopted, and subsequently on November 8,
1991  shareholders  approved,  the adoption of the 1990 Stock Option Plan ("1990
Plan"),  under  which options will be granted for an aggregate of 500,000 shares
of Common Stock prior to November 20, 2000. All options under the 1990 Plan have
either  expired  or  have  been  canceled  and  the  1990  Plan  has terminated.


                                     Page 5
<PAGE>
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 31, 2001:


Name and Address Of                   Amount and Nature Of   Percent of Class
 Beneficial Owner                       Beneficial Owner

Title of Class
(a) Common Stock

          Monahan Corporation, N.V.   (3)
          Landhuis Joonchi                 3,144,238                45.11%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands Antilles

          Burton, N.V.                (3)
          Landhuis Joonchi                   281,383                 4.04%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands Antilles

          Greenwich Securities, Ltd.  (1)
          Via Canc. Molo II                  985,800                14.14%
          CH-6501
          Bellinzona, Switzerland 6901


                                     Page 6
<PAGE>
          Millingway, Inc.            (2)
          c/o Capital Holdings, Inc.         598,164                 8.58%
          4900 Woodway, Suite 650
          Houston, TX 77056

          The Bridge Fund N.V.        (3)
          Landhuis Joonchi                   529,893                 7.60%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands, Antilles


(b) Security Ownership of Management

          Dibo Attar              (1) (2)         -0-

          Elliot Gerstenhaber                     -0-

          Richard Farkas                          -0-

          Michael Lyons                           -0-

          Russell S. Molina                       -0-

          Raffaele Attar                          -0-

          Directors and Officers
          as Group 5 persons               5,539,478                 79.47%
          (1) (2) (3)

Notes to Table of Beneficial Owners and Management:

(1) The securities of Greenwich Securities, Ltd. are owned by the Ezra and Linda
Attar  Family  Foundation,  which  is a family trust organized under the laws of
Lichenstein.  Mr.  Dibo  Attar,  a  former  director,  has  the  sole voting and
Investment  power with respect to the common stock owned by Greenwich Securities
Ltd.

(2) Dibo Attar is a consultant to Capital Holdings,  Inc., parent to Millingway,
Inc.

(3) Monahan Corporation,  N.V., Burton, N.V., and The Bridge 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%.

Except as otherwise indicated,  the address for each of the above persons is c/o
T.H. Lehman & Co., Incorporated, 4900 Woodway, Suite 650, Houston, Texas 77056.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the years ended March 31, 2001 and March 31, 2000,  the Company  incurred
management  fees for  facilities and services  provided by GTD Capital  Holdings
Management  Company  in  the  amount  of $131,700 and $79,200 respectively. Such
services  are  believed to have been  provided on terms no less  favorable  than
available from a third party.

During  August  2000,  the Company sold 100,000 shares of Optisystems Solutions,
Ltd.  a  publicly  traded  company,  for  $1,000,000. The Company acquired these
shares  by issuing an 8% interest bearing unsecured note. Under the terms of the
note  the  Company repaid all of the principal of the note, accrued interest and
75% of the gain (determined after adjustment for interest) from the sale. During
March  2001,  the Company sold 175 shares of Commercial Bancshares for $569,625.
The Company repaid all of the principal of the note, accrued interest and 75% of
the  gain  (determined  after  adjustment  for  interest)  from  the  sale.

As  of  March 31, 2001, 113,333 shares of KSW, Inc. and 536,158 shares of Canada
Wood  Holdings,  Inc.  shares  were  returned.  Under the terms of the note, the
Company  exchanged  the  shares  held  for  all amounts due under the respective
notes.

In addition during May 2000, the Company acquired 184,000 shares of United Media
Limited  which  were returned subsequent to the year ended March 31, 2001. Under
the  terms  of  the  note,  the  Company  exchanged  the  shares  held  for  all
amounts due under the note.

Mr.  Dibo Attar resigned from the Board of Directors and as the Company's acting
President  on  September 10, 2000. The Company filed a Form 8-K on September 19,
2000  disclosing  this  item.  Michael  J.  Lyons  was appointed to the Board of
Directors  by the remaining Board members to serve until the next Annual Meeting
to  fill this vacancy. At the December 5, 2000 Annual Meeting of Stockholders, a
new  Board  of  Directors  were  elected  to  a term of one year and until their
successors are elected and qualified. The Board members are Elliot Gerstenhaber,
Richard  Farkas,  Michael  Lyons,  Russell  Molina  and  Raffaele  Attar.

At  the  December 5, 2000 Annual Meeting of Stockholders, the Board of Directors
received approval of their proposal to issue 2,227,398 Common Shares of $.01 Par
Value in consideration of the forgiveness of certain indebtedness by the Company
to a related party.  The Board determined that a value of $.15 was to be used to
calculate the exchange of shares for $334,109.65 in debt, based on book value of
the company, at the time, and other factors.  These shares were issued in the
last fiscal quarter  of  2001.


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,  2000  all  Section  16(a)  filing
requirements  were  complied with except the reports for the following that were
not  filed  in  a  timely  manner  in  the  year  indicated.

In  June  1999, The Bridge Fund N.V. acquired an additional 10,000 common shares
of  the Company from the market place bringing their total ownership interest in
the  Company  to 529,893 shares of Common Stock or 11.2%. The Bridge Fund failed
to notify the Company and file a Form 4 for this transaction in a timely manner.
On  October  10, 2000, The Bridge Fund N.V. filed a Form 4 for this transaction.

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, 2001 all Section 16(a) filing requirements were
complied  with.


                                     Page 7
<PAGE>
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, 2001 and 2000
Consolidated Statements of Operations
          Years Ended March 31, 2001 and 2000
Consolidated Statements of Changes in Stockholders' Equity
          Years Ended March 31, 2001 and 2000
Consolidated Statements of Cash Flows
          Years Ended March 31, 2001 and 2000
Notes to Consolidated Financial Statements
     (a)  Financial  Statements - See Index to Financial Statements at Page F-1.

     (b)  Reports  on  Form  8-K.  -  Form  8-K  was  filed  September  19, 2000
          disclosing  Dibo  Attar's  resignation during fiscal year ending March
          31,  2001.

     (c)  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.*

*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.


                                     Page 8
<PAGE>
SIGNATURES

In accordance with Section 13 or 15 (d) 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.

T.H. Lehman & Co., Incorporated

Russell S. Molina, President

Date: June 26, 2001

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

Signature                     Capacities                 Date


/s/ Russell S. Molina       (President)                  June 26, 2001
Russell S. Molina


/s/ Elliot Gerstenhaber     Secretary/Treasurer          June 26, 2001
Elliot Gerstenhaber       (Principal Accounting &
                             Financial Officer)


/s/ Elliot Gerstenhaber        Director                  June 26, 2001
Elliot Gerstenhaber


/s/ Richard P. Farkas          Director                  June 26, 2001
Richard P. Farkas


/s/ Michael Lyons              Director                  June 26, 2001
Michael Lyons


/s/ Raffaele Attar             Director                  June 26, 2001
Raffaele Attar


                                     Page 9
<PAGE>
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Auditor                                          F-2

Consolidated Balance Sheets
           As of March 31, 2001 and 2000                               F-3

Consolidated Statements of Operations and Comprehensive Income (Loss)
          Years Ended March 31, 2001 and 2000                          F-4

Consolidated Statements of Stockholders' Equity
          Years Ended March 31, 2001 and 2000                          F-5

Consolidated Statements of Cash Flows
          Years Ended March 31, 2001 and 2000                          F-6

Notes to Consolidated Financial Statements                             F-7


<PAGE>
REPORT OF INDEPENDENT AUDITOR

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  as of March 31, 2001 and 2000,  and the related
consolidated   statements  of  operations  and   comprehensive   income  (loss),
stockholders'  equity and cash flows for the years then ended.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that 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 position of T.H.
Lehman & Co.,  Incorporated  and subsidiaries as of March 31, 2001 and 2000, and
the consolidated results of their operations, stockholders'equity and cash flows
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.


Jeffrey S. Gilbert, CPA


Los Angeles, California
June 14, 2001


                                F-2
<PAGE>
<TABLE>
<CAPTION>
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 AND MARCH 31, 2000

                                ASSETS

                                                          2001        2000
                                                       ----------  -----------
<S>                                                    <C>         <C>
CURRENT ASSETS

Cash                                                   $   71,557  $    9,081
Accounts receivable                                        10,096           0
Current portion of non-current receivables
(Note 4)                                                  409,962     275,023
                                                       ----------  -----------

TOTAL CURRENT ASSETS                                      491,615     284,104

PROPERTY AND EQUIPMENT AT COST,
  less accumulated depreciation of $148,531 at
  March 31, 2001 and $138,581 at March 31, 2000
  (Note 5)                                                      0       9,950

OTHER ASSETS
Securities available for sale (Notes 3 and 10)            224,862   1,265,770
Investments in non-public companies (Note 10)                   0     833,659
Non-current receivables (Note 4)                          349,644   1,080,933
Deposits                                                   12,271       6,514
                                                       ----------  -----------

TOTAL OTHER ASSETS                                        586,777   3,186,786
                                                       ----------  -----------
TOTAL ASSETS                                           $1,078,392  $3,480,930
                                                       ==========  ===========

       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable                                       $  382,106  $  308,631
Accrued liabilities                                        40,728     136,408
Current portion of long-term debt (Note 6)                215,887   1,987,265
                                                       ----------  -----------

TOTAL CURRENT LIABILITIES                                 638,721   2,432,304

LONG-TERM LIABILITIES

Long-term debt, less current portion
(Note 6)                                                        0     310,826
                                                       ----------  -----------

TOTAL LONG-TERM LIABILITIES                                     0     310,826

          TOTAL LIABILITIES                               638,721   2,743,130

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY (Note 7)
Common stock-par value $.01; authorized
  20,000,000 shares, issued 6,970,118 shares
  at March 31, 2001 and 2000                               69,701      47,427
Preferred stock-par value $.01; authorized
  10,000,000 shares, issued 0 shares
  at March 31, 2001 and 2000                                   0            0
Additional paid-in capital                              8,075,850   7,764,014
Unrealized gain on investments                              8,475      68,396
Accumulated deficit                                    (7,665,917) (7,093,599)
Treasury stock at cost - 25,000 shares                 (   48,438) (   48,438)
                                                       ----------  -----------

TOTAL STOCKHOLDERS' EQUITY                                439,671     737,800
                                                       ----------  -----------
                                                       $1,078,392  $3,480,930
                                                       ==========  ===========
</TABLE>


See accompanying Notes to Consolidated Financial Statements


                                     F-3
<PAGE>
<TABLE>
<CAPTION>
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000

                                                          2001        2000
                                                        ---------  -----------
<S>                                                     <C>        <C>
REVENUES
Management and billing fees, net of
  allowances                                           $  575,890  $  589,105
Income from finance receivables                                 0      15,440
Interest and dividends                                      8,567           0
Realized gain from sales of securities
  available for sale                                      157,189           0
Miscellaneous income                                       10,035         976
                                                        ---------  -----------

TOTAL REVENUES                                            751,681     605,521
OPERATING EXPENSES
Selling, general and administrative                     1,258,706     681,920
Interest expense                                           65,294      56,343
                                                        ---------  -----------

TOTAL OPERATING EXPENSES                                1,324,000     738,263
                                                        ---------  -----------

LOSS BEFORE INCOME TAXES                                (572,319)  (  132,742)

PROVISION FOR INCOME TAXES (Note 8)                             0           0
                                                        ---------  -----------

NET LOSS                                               ( 572,319)  (  132,742)

OTHER COMPREHENSIVE INCOME:
Unrealized gain (loss) on securities                   (   59,921)     36,317
Less: reclassification adjustment for
      Gain included in net income                               0           0
                                                        ---------  -----------

TOTAL OTHER COMPREHENSIVE INCOME                       (   59,921)     36,317
                                                        ---------  -----------

COMPREHENSIVE INCOME (LOSS)                            ($ 632,240) ($  96,425)
                                                       ==========  ===========
PER SHARE DATA:

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                      4,729,925   4,717,720
                                                       ==========  ===========

BASIC LOSS PER COMMON SHARE                            ($   0.12)  ($    0.03)
                                                       ==========  ===========
</TABLE>

See accompanying Notes to Consolidated Financial Statements


                                    F-4
<PAGE>
<TABLE>
<CAPTION>
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000
BALANCE

   Common Stock                           Unreal.     Treasury Stock
----------------  Additional              Gain on     --------------
  Shares           Paid-in   Accumulated  Sec Avail.  for Shares
  Issued   Amount  Capital     Deficit    for sale  Held    Amount     Total
--------- ------- ---------- ------------ -------  ------ --------- -----------
<S>       <C>     <C>        <C>          <C>      <C>    <C>       <C>

4,742,720 $47,427 $7,764,014 ($6,960,857)$ 32,078  25,000 ($48,438) $  834,224

Unrealized gain on securities
  available for sale:                      36,318                       36,318


Net loss                        (132,742)                             (132,742)
--------- ------- ---------- ------------ -------  ------ --------- -----------


BALANCE, March 31, 2000:

4,742,720 $47,427 $7,764,014 ($7,093,599) $68,396  25,000 ($48,438)   $737,800
--------- ------- ---------- ------------ -------  ------ --------- -----------

Unrealized gain on securities
  available for sale                      (59,921)                     (59,921)

Exchange of shares for
  foregiveness of debt
2,227,398  22,274    311,836                                           334,110

Net loss                        (572,319)                             (572,319)
--------- ------- ---------- ------------ -------  ------ --------- -----------


BALANCE, March 31, 2001:

6,970,118 $69,701 $8,075,850 ($7,665,918)$  8,475  25,000 ($48,438) $  439,670
========= ======= ========== ============ =======  ====== ========= ===========
</TABLE>

See accompanying Notes to Consolidated Financial Statements


                                    F-5
<PAGE>
<TABLE>
<CAPTION>
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 2001 AND MARCH 31, 2000

                                                           2001        2000
                                                        ---------     --------
<S>                                                     <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                              ($  572,319)($  132,742)
Adjustments to reconcile net loss to
  net cash used in operating activities:
Depreciation and amortization                               9,950      18,623
Provision for bad debts                                   525,716      75,000
Realized gain from sales of securities available
   for sale                                               157,189           0
Deposits (paid) received                                   (5,757)     (6,000)
Changes in operating assets and liabilities:
    (Increase) decrease in:
    Accounts receivable                                   (15,873)      8,278
    Prepaid expenses and other current assets                   0       2,015
    Value of marketable securities                      1,099,606           0
    Increase (decrease) in:
    Accounts payable                                       73,475      24,305
    Accrued liabilities                                  (224,600)    177,597
                                                        ---------     --------
NET CASH REQUIRED BY
  OPERATING ACTIVITIES                                  1,047,387     167,076
                                                        ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES

  Investment in 50% owned corporation                           0           0
  Loans made evidenced by notes receivable             (1,411,738)   (594,808)
  Collection of notes receivable                        1,488,149     537,968
  Acquisition of investments in non-public companies      833,659    (833,659)
  Acquisition of securities available for sale           (215,887) (1,219,166)
Acquisition of property and equipment                           0      (3,029)
                                                         ---------   ---------
NET CASH USED IN
  INVESTING ACTIVITIES                                    694,183  (2,112,694)
                                                       -----------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES

  Proceeds of loans payable - financial
     institution                                                0           0
  Proceeds of long-term debt                              215,887   1,953,816
  Repayment of long-term debt                          (1,894,981)    (19,794)
                                                        ----------  ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES              (1,679,094)  1,934,022
                                                        ----------  ----------

INCREASE (DECREASE)IN CASH                                 62,476     (11,596)
CASH - BEGINNING                                            9,081      20,677
                                                       ----------   ----------

CASH - END                                             $   71,557  $    9,081
                                                       ==========   ==========

CASH PAID DURING THE PERIODS FOR:

  Interest                                             $   79,076  $    1,341
                                                       ==========   ==========
NON CASH TRANSACTION:

  Debt relieved in exchange for common stock           $  334,110
</TABLE>


See accompanying Notes to Consolidated Financial Statements


                                F-6
<PAGE>
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description  of the  Business  - T.H.  Lehman & Co.,  Incorporated,  a  Delaware
corporation, provides medical business management services including billing and
collection in California through one of its wholly-owned subsidiaries.

Principles of Consolidation - The consolidated  financial statements include the
accounts of the  Company and its  wholly-owned  subsidiaries.  All  intercompany
balances and transactions have been eliminated.

Use of Estimates - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and  assumptions   that  affect  certain   reported   amounts  and  disclosures.
Accordingly, actual results could differ from those estimates.

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.

Investment in 50% owned  Corporation - Investment  in 50% owned  corporation  is
accounted for under the equity method.  Currently this investment is carried at
$0.

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.

Property and Equipment - Property and equipment is stated at cost.  Depreciation
is  computed  over the  estimated  useful  lives of the  assets  using  both the
accelerated and straight-line methods.  Expenditures for repairs and maintenance
are charged to expense as  incurred,  while  expenditures  for  betterments  and
renewals are capitalized.

Property  and  equipment  are  reviewed  for  impairment   whenever   events  or
circumstances indicate that the asset's undiscounted expected cash flows are not
sufficient to recover its carrying  amount.  The company  measures an impairment
loss by comparing the fair value of the asset to its carrying amount. Fair value
of an asset is calculated as the present value of expected future cash flows.

Stock-Based  Compensation  - The Company  elected to account for employee  stock
options  based on the  provisions of APB Opinion No. 25,  "Accounting  for Stock
Issued to Employees" and adopted only the disclosure  requirements of SFAS No.
123, "Accounting for Stock-Based Compensation".

Basic Loss Per Share - Basic 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.

Recent  Accounting  Pronouncements  - The  Company  has  adopted  SFAS No.  130,
"Reporting  Comprehensive Income", and SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information",  in fiscal year ended March 31, 1999.
Components  of  comprehensive  income for the Company  include items such as net
income and changes in the value of available-for-sale  securities.  SFAS No. 131
requires segments to be determined based on how management measures  performance
and makes decisions about allocating resources.  The company only has one
segment, the medical business management.

During  the  current  fiscal  year  the Company adopted the Financial Accounting
Standards Board issued Statement No. 133, "Accounting for Derivative Instruments
and  Hedging  Activities"  (SFAS  No. 133"), which, as amended, is effective for
financial statements for all fiscal quarters of all fiscal years beginning after
June  15,  2000.  SFAS  No.  133  standardizes  the  accounting  for  derivative
instruments,  including  certain  derivative  instruments  embedded  in  other
contracts,  by  requiring  that  an  entity  recognize  those items as assets or
liabilities  in  the  statement  of  financial position and measure them at fair
value.  SFAS  No.  133 also addressed the accounting for hedging activities. The
Company  does  not  have  any  derivative  instruments  nor is it engaged in any
hedging  activities,  thus the Company did not experience any material effect on
the  Company's financial statement presentation or disclosures with the adoption
of  SFAS  No.  133.


                                   F-7
<PAGE>
2.     ACQUISITIONS AND DISPOSITIONS

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  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, 2001
and March 31, 2000 is as follows:

<TABLE>
<CAPTION>
                                                         March 31,  March 31,
                                                           2001       2000
                                                        ---------  ----------
<S>                                                     <C>        <C>
Financial Position:
Current Assets                                         $  121,852  $   62,927

Property and equipment                                      1,137       1,080
                                                        ---------  ----------
Total assets                                           $  122,989  $   64,007
                                                        =========   =========
Current liabilities(including
  due to the Company of $262,567)                      $  345,757  $  339,719
Long-term obligations (a)                                 122,700     122,700
Stockholders' deficiency                                 (345,468)   (398,412)
                                                        ---------   ----------
Total liabilities and stockholders'
  deficiency                                           $  122,989  $   64,007
                                                        =========   ==========

Results of Operation:
Revenues                                               $  299,740  $  254,615
Operating Expenses                                        246,796     255,658
                                                        ---------   ---------
Net loss                                               $   52,944 $  ( 1,043)
                                                        =========   =========
</TABLE>

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

3.     SECURITIES AVAILABLE FOR SALE

<TABLE>
<CAPTION>
                                                          2001        2000
                                                       ----------  ----------
<S>                                                    <C>         <C>
Casella Waste Systems, Inc.  (formerly KTI, Inc.)      $        0  $    9,926

KSW, Inc.                                                   5,781      21,966

KSW, Inc.                                                       0      14,250

KSW, Inc.                                                       0     254,917

Netsmart Technologies, Inc                                  3,194      14,711

OptiSystems Solutions, Ltd.                                     0     950,000

United Media Limited                                      215,887           0
                                                        ---------   ---------
                                                        $ 224,862  $1,265,770
                                                        =========   =========
</TABLE>
Unrealized gains and losses for marketable equity securities at March 31, 2001
and 2000 are as follows:

<TABLE>
<CAPTION>
                                     2001                       2000
                              ---------------------      ---------------------
                               Current  Non-Current       Current  Non-Current
<S>                           <C>         <C>            <C>         <C>

Aggregate Cost                $   216,387 $        0     $ 1,083,416 $ 13,035

Aggregate Market Value        $   219,081 $    5,781     $ 1,233,878 $ 31,892

Gross Unrealized Gains        $     2,694 $    5,781     $   150,462 $ 18,857

Less: Portion to Note Holders $         0 $        0     $   102,187 $      0

Add:  Unrealized Gain in
      Non-public companies    $         0 $        0     $     1,264 $      0

Net Unrealized Gains          $     2,694 $    5,781     $    49,540 $ 18,857
</TABLE>


                                      F-8
<PAGE>
4.   NON-CURRENT  RECEIVABLES

     Non-current receivables at March 31, 2001 and March 31, 2000 consisted of
the following:

<TABLE>
<CAPTION>
                                                          2001        2000
                                                      -----------  -----------
<S>                                                   <C>          <C>
Assigned medical billings net of allowances of
which $348,145 of the unpaid is expected to be
collected during the current fiscal year.             $1,150,658   $1,411,202

Working 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      852,379
                                                      -----------  -----------

                                                       2,188,188    2,263,581
          Less Allowance for Uncollectible            (1,428,582)    (907,625)
                                                      -----------  -----------
                                                         759,606    1,355,956
          Less Current Portion                          (409,962)    (275,023)
                                                      -----------  -----------
                                                      $  349,644   $1,080,933
                                                      ===========  ===========
</TABLE>
5. PROPERTY AND EQUIPMENT

Property and equipment at March 31, 2001 and March 31, 2000 consisted of the
following:
<TABLE>
<CAPTION>
                                Life                   2001        2000
                                                   -----------  ----------
<S>                                                <C>          <C>
Machinery and Equipment       5-10 Years           $    6,730   $   6,730
Leasehold Improvements        5-10 Years                  500         500
Furniture and Fixtures        5-10 Years              141,301     141,301
                                                   -----------  ----------
                                                      148,531     148,531
         Less Accumulated Depreciation               (148,531)   (138,581)
                                                   -----------  ----------
                                                   $        0   $   9,950
                                                   ===========  ==========
</TABLE>

6. LONG-TERM DEBT

Long-term debt including  accrued  interest at March 31, 2001 and March 31, 2000
consisted of the following:

<TABLE>
<CAPTION>
                                                           2001        2000
                                                          ----------  -----------
<S>                                                       <C>         <C>
Related Party:

Note payable of $12,000 principal plus accrued
interest at 8%, all due on February 1, 2001 for
acquisition of certain public shares. (Note 10)                   0       12,155

Note payable of $214,666 principal plus accrued
interest at 8%, all due on February 1, 2001 for
acquisition of certain public shares. (Note 10)                   0      217,442

Note payable of $856,250 principal plus accrued
interest at 8%, all due on February 1, 2001 for
acquisition of certain public shares. (Note 10)                   0      867,323

Note payable of $252,901 principal plus accrued
interest at  8%, all due on March 14, 2001 for
acquisition of certain non-public shares. (Note 10)               0      253,844

Note payable of $575,699 principal plus accrued
interest at 8%, all  due on January 3, 2001 for
acquisition of certain non-public shares. (Note 10)               0      586,802

Note payable of $215,887 principal plus accrued
interest at 8%,  all  due  on  May  9, 2001 for
acquisition of certain public shares. (Note 10)             215,887            0

Non-related Parties (all unsecured):

Equipment purchase contract with a monthly payment
of $886 and an effective interest rate of 11% payable
through November, 2000.                                           0        6,749


                                    F-9
<PAGE>
Advances from an available line of credit of
$300,000.  The loan bears interest at an annual
rate of 10%.  All principal and interest is due
and payable on or before November 1, 2001.
1,168,105 shares of the Company's common stock
were issued in exchange for this note                             0      167,965

Note payable of $87,500 principal plus accrued
interest at 10%, all due on October 1, 2001.
700,000 shares of the Company's common stock
were issued in exchange for this note                             0      100,613

Note payable of $40,500 principal plus accrued
interest at 8%, all due on October 1, 2001.
308,093 shares of the Company's common stock
were issued in exchange for this note                             0       44,571

Note payable of $3,200 principal plus accrued
interest at 10%, all due on October 1, 2001.
25,600 shares of the Company's common stock
were issued in exchange for this note                             0        3,680

Note payable of $3,200 principal plus accrued
interest at 10%, all due on October 1, 2001.
25,600 shares of the Company's common stock
were issued in exchange for this note                             0        3,680

Note payable of $31,800 principal plus accrued
interest at 10%, all due on October 1, 2001.                      0       33,267
                                                          ----------  -----------
                                                            215,887    2,298,091
               Less Current Portion                        (215,887)  (1,987,265)
                                                          ----------  -----------
                                                          $       0   $  310,826
                                                          ==========   ==========
</TABLE>
The amounts of long-term  debt maturing in each of the years ending March 31 are
as follows: 2001 - $0.

7. STOCKHOLDERS' EQUITY

In  November,  1991,  the  Company  adopted a new stock option plan (1990 Plan),
under  which  options  were granted for an aggregate of 500,000 shares of common
stock  prior  to  November 20, 2000. All options under the 1990 Plan have either
expired  or  have  been  canceled  and  the  1990  Plan  has  terminated.

In  June,  1994,  the  Company  issued  105,000  additional  options  which were
exercisable  at  prices ranging from $1.50 to $2.00 per share for five years. At
March  31,  2000,  all  of  these  options  had  expired.


8. INCOME TAXES

At  March  31,  2001,  for  income  tax  reporting  purposes,  the Company has a
consolidated  net  operating  loss  carryforward  of  approximately  $5,937,000
available  to  reduce future taxable income, if any, expiring through 2015. 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.

9. COMMITMENTS AND CONTINGENCIES

Leases  -  The  Company  leases medical provider facility and a billing facility
under  noncancelable operating leases expiring February 28, 2005. Minimum annual
future  rentals  on  each  of  the  years ending March 31 are as follows: 2001 -
$94,283;  2002  -  $94,283;  2003  -  $94,283;  2004  -  $94,283: 2005 - $86,426

Rent expense  amounted to $97,603 and $95,243 for the years ended March 31, 2001
and 2000, respectively.

Medical Management  Agreement - The Company has entered into an agreement with a
medical provider whereby the Company provides  management and marketing services
and the leasing of facilities, furniture, fixtures and equipment for a fee equal
to  80%  of  the   provider's   medical  fee  revenues  (net  of  allowance  for
uncollectible  accounts).  The agreement is  automatically  renewed from year to
year  unless  either  party  gives 90 days  notice of  non-renewal  prior to the
renewal term.


                                F-10
<PAGE>
10. 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 a consultant. The Company has entered into agreements with
this  entity whereby that entity will provide various accounting, administrative
and  managerial  services  for  the  Company  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 $131,700
and  $79,200  for  the  years  ended  March  31,  2001  and  2000, respectively.

During the first and second quarter of 2000 the Company entered into a series of
transactions  with  various  entities controlled by its major shareholder. Under
these  transactions,  the  Company  acquired  shares  of  three  publicly traded
companies  and  two  private  companies  for temporary investment purposes only.
These  shares  were  acquired  at  the  fair  market  value  at  the date of the
acquisition. The fair market value for the publicly traded shares was calculated
at  the  then quoted per share price. The privately held shares were value based
on  the  percentage of the company acquired multiplied by the estimated net book
value  of  the  company  acquired.

The  company  acquired  these  shares  by  issuing 8% interest bearing unsecured
notes.  Under  the terms of the notes the Company is to repay the notes upon the
earliest occurrence of either one year or upon the sale of the respective shares
as  follows:

     If  upon  sale  of  the  shares the Company will pay all principal, accrued
interest  and  75%  of  the  gain  from  the  sale  of  the  respective  shares.

     If  the  Company  does not sell the shares, after one year it will exchange
the  shares held for all amounts due under the respective notes even if the then
value of the shares are less than the outstanding amounts due, including accrued
interest.

The shares acquired consist of 113,333 shares of KSW, Inc. for $226,666; 100,000
shares  of  Optisystems  Solutions,  Ltd. for $856,250; 536,158 shares of Canada
Wood  Holdings, Inc. for $575,698; 175 shares of Commercial Bancshares, Inc. for
$252,901  and  184,000  shares  of  United  Media  Limited  for  $215,887.

During  August  2000,  the Company sold 100,000 shares of Optisystems Solutions,
Ltd.  a  publicly  traded company, for $1,000,000. The Company repaid all of the
principal  of  the  note, accrued interest and 75% of the gain (determined after
adjustment  for interest) from the sale. During March 2001, the Company sold 175
shares  of  Commercial  Bancshares  for  $569,625. The Company repaid all of the
principal  of  the  note, accrued interest and 75% of the gain (determined after
adjustment  for  interest)  from  the  sale.

As  of  March 31, 2001, 113,333 shares of KSW, Inc. and 536,158 shares of Canada
Wood  Holdings,  Inc.  shares  were  returned.  Under the terms of the note, the
Company  exchanged  the  shares  held  for  all amounts due under the respective
notes.

Subsequent  to  fiscal  year  end  2001,  184,000  of  United Media Limited were
returned. Under the terms of the note, the Company is exchanging the shares held
for  all  amounts  due under the note. The maturity date on the note was May 10,
2001.

Mr.  Dibo Attar resigned from the Board of Directors and as the Company's acting
President  on  September 10, 2000. The Company filed a Form 8-K on September 19,
2000  disclosing  this  item.  Michael  J.  Lyons  was appointed to the Board of
Directors  by the remaining Board members to serve until the next Annual Meeting
to  fill  this  vacancy.

Certain  of  the Company's creditors (See Note 7) are related as a result of one
of  the  Company's  principal stockholders being a consultant to these entities.


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