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

                                   FORM 10-QSB

(Mark One)

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

     For the quarterly period ended March 31, 2002

                                       OR

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

     For the transition period from _________ to _________.


                        Commission file number: 333-45464


                        MEDICAL CAPITAL MANAGEMENT, INC.
        (Exact name of small business issuer as specified in its charter)


           Delaware                                               88-0473359
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)


               3770 Howard Hughes Parkway, Las Vegas, Nevada 89109
                    (Address of principal executive offices)


                    Issuer's telephone number: (800) 824-3700


     As of April 30,  2002,  there were 2,000  shares of the  registrant's  sole
class of common stock issued and outstanding.

     Transitional Small Business Disclosure Format Yes [ ] No [X]
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                        MEDICAL CAPITAL MANAGEMENT, INC.
                                  BALANCE SHEET
                                   (UNAUDITED)

                                                                     March 31,
                                                                       2002
                                                                   ------------
ASSETS:
Current assets:
  Cash and cash equivalents .....................................  $  3,434,054
  Medical receivables, net of discount reserves of $ 265,000 ....    20,926,686
  Prepaid trustee fee ...........................................        45,243
  Interest receivable on notes ..................................        29,448
  Income tax receivable .........................................        25,468
  Notes receivable ..............................................     4,045,000
                                                                   ------------
    Total current assets ........................................    28,505,899
                                                                   ------------
    Total assets ................................................  $ 28,505,899
                                                                   ============
LIABILITIES AND  STOCKHOLDER'S EQUITY

Current liabilities:
  Accrued expenses - due to Parent and affiliates ...............  $     22,554
  Accrued expenses - trade ......................................        90,958
  Interest payable ..............................................       205,285
  Notes payable - current .......................................    10,196,000
                                                                   ------------
    Total current liabilities ...................................    10,514,797

Notes payable - long term, net of deferred offering costs of
 $150,977 and commissions of $1,463,329 .........................    15,259,694
                                                                   ------------
    Total liabilities ...........................................    25,774,491
                                                                   ------------
STOCKHOLDER'S EQUITY:
  Preferred stock - par value $0.01 (10,000 shares authorized,
   no shares issued and outstanding) ............................            --
  Common stock - par value $0.01 (10,000 shares authorized,
   2,000 shares issued and outstanding) .........................            20
  Additional paid-in capital ....................................     3,000,000
  Accumulated deficit ...........................................      (268,612)
                                                                   ------------
     Total stockholder's equity .................................     2,731,408
                                                                   ------------
     Total liabilities and stockholder's equity .................  $ 28,505,899
                                                                   ============

SEE ACCOMPANYING NOTES.
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                         Three months ended  Three months ended
                                           March 31, 2002      March 31, 2001
                                           --------------      --------------
DISCOUNT REVENUES:
  Discount fees, including related party
   fees of $479,555 ......................    $ 902,243           $      --
                                              ---------           ---------
COST OF REVENUES:
  Administration fees, related party .....      407,124                  --
                                              ---------           ---------
GROSS PROFIT .............................      495,119                  --
                                              ---------           ---------
OPERATING EXPENSES:
  Interest expense, net ..................      596,173                 452
  Advertising ............................       88,731                  --
  Professional services ..................       60,647               3,750
  Service fees, related party ............       25,524                  --
  Legal expenses .........................       21,023                  --
  Directors' fees ........................       11,000                  --
  Travel and entertainment ...............       18,173                  --
  Trustee fees ...........................        9,049              14,188
  Other ..................................        6,175                  --
                                              ---------           ---------
    Total operating expenses .............      836,495              18,390
                                              ---------           ---------

LOSS BEFORE TAXES ........................     (341,376)            (18,390)
                                              ---------           ---------
Provision (benefit) for income tax .......      (25,468)                 --
                                              ---------           ---------
NET LOSS .................................    $(315,908)          $ (18,390)
                                              =========           =========
Weighted average number of common
 shares outstanding - basic and diluted ..        2,000               1,333
                                              =========           =========
Net loss per common share - basic and
 diluted .................................    $ (157.95)             (13.80)
                                              =========           =========

SEE ACCOMPANYING NOTES.
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        Three months ended   Three months ended
                                                          March 31, 2002       March 31, 2001
                                                          --------------       --------------
<S>                                                       <C>                  <C>
Cash flows used for operating activities:
  Net loss ...........................................      $  (315,908)         $   (18,390)
  Adjustments to reconcile net loss to net cash
   provided by (used for) operating activities:
    Amortization of deferred offering costs and
     commissions .....................................          223,588                   87
    Amortization of prepaid trustee fee ..............            9,049               14,188
  Changes in assets and liabilities:
    Increase in medical receivables ..................       (5,483,520)                  --
    Increase in interest receivable ..................            6,410                   --
    Decrease in prepaid trustee fee ..................          (54,292)             (56,750)
    Decrease in accrued expenses - due to Parent .....          (26,453)             (55,991)
    Increase in accrued expenses - trade .............           32,829                3,750
    Increase in interest payable .....................           66,216                  366
    Decrease in income taxes payable .................          (50,936)                  --
                                                            -----------          -----------
Net cash used for operations .........................       (5,593,017)            (112,740)
                                                            -----------          -----------
Cash flows from financing activities:
  Proceeds from issuance of debt, net ................        8,853,000               96,000
  Payments on offering costs and commissions .........         (669,826)            (137,179)
  Payment of dividend, related party .................       (1,250,000)                  --
  Proceeds from sale of common stock .................               --              249,910
  Proceeds from paid-in capital ......................               --                   10
                                                            -----------          -----------
Net cash provided by financing activities ............        6,933,174              208,741
                                                            -----------          -----------
Net increase in cash and cash equivalents ............        1,340,157               96,001
Cash at beginning of year/period .....................        2,093,897                  100
                                                            -----------          -----------
Cash and cash equivalents at end of year/period ......      $ 3,434,054          $    96,101
                                                            ===========          ===========
Supplemental disclosure of cash flow items:
  Income taxes paid ..................................      $        --          $        --
  Interest paid ......................................      $   546,246          $     1,418
</TABLE>

SEE ACCOMPANYING NOTES.
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. OPERATIONS OF THE COMPANY

ORGANIZATION:

Medical Capital  Management,  Inc. (the "Company") was incorporated in the state
of Delaware on August 4, 2000.  It maintains  its  corporate  office in Anaheim,
California.  The  Company is wholly  owned by  Medical  Capital  Holdings,  Inc.
(Parent).

BUSINESS ACTIVITY:

The Company was organized to purchase the insured portion of medical receivables
from medical providers including physicians,  clinics, hospitals,  nursing homes
and other  providers of healthcare  services  throughout the United States.  The
medical receivables are purchased at a discount to the full amount of the claim.
The  Company  also seeks  other  investments  that will  enhance  its  financial
position.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL STATEMENTS:

The accompanying  financial  statements  include all adjustments  (consisting of
only  normal  recurring  accruals)  which are,  in the  opinion  of  management,
necessary for a fair  presentation  of the results of operations for the periods
presented.  Interim results are not necessarily  indicative of the results to be
expected for the full year ending  December 31, 2002.  The financial  statements
should be read in  conjunction  with the  financial  statements  included in the
annual  report of the  Company on Form  10-KSB for the year ended  December  31,
2001.

USE OF ESTIMATES:

The preparation of financial  statements  requires  management to make estimates
and assumptions  that affect certain  reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual amounts could differ from those estimates.

The accompanying  financial  statements  include all adjustments  (consisting of
only  normal  recurring  accruals)  which are,  in the  opinion  of  management,
necessary for a fair  presentation  of the results of operations for the periods
presented.  Interim results are not necessarily  indicative of the results to be
expected for the full year ending  December 31, 2002.  The financial  statements
should be read in  conjunction  with the  financial  statements  included in the
annual  report of the  Company on Form  10-KSB for the year ended  December  31,
2001.

CASH AND CASH EQUIVALENTS:

For the  purposes  of the  statement  of cash flows,  cash and cash  equivalents
include all highly liquid debt  instruments  with  original  maturities of three
months or less that are not securing any corporate obligations.

The Company  maintains its cash in bank deposit  accounts,  which at times,  may
exceed the federally insured limits.  The Company has not experienced any losses
in its accounts.

DISCOUNTS EARNED ON MEDICAL RECEIVABLES:

Medical  receivables  are recorded at cost when purchased by the Company.  Gross
receivables are adjusted to cost for the purchase discount and reserves based on
the  estimated  ultimate  collectible  amount due to the  Company.  Discounts on
medical  receivables  are  recognized as earned over a period ranging 1-270 days
using a method that approximates the interest method.
<PAGE>
The Company has  established  a "discount  reserve" on a per client  basis based
upon its preliminary  underwriting  criteria,  collection  history,  and ongoing
credit and  underwriting  policies.  These  reserves are deducted  from discount
revenue.  The Company  anticipates the receivables upon which these reserves are
based to be collected  and earned  within the provider  contract  period.  As of
March 31, 2002 and 2001, this reserve was $265,000 and $0, respectively.

PROVIDER CONCENTRATION:

As of March 31, 2002,  medical  receivables  purchased by the Company from three
providers  amounted to  approximately  to 95% of the outstanding  balance of the
total receivables due to the Company.

RESERVE FOR LOSSES:

The reserve for losses on medical receivables is increased by provisions charged
against  operations  and reduced by  receivables  charged off, as  determined by
management.  The reserve is maintained at a level considered adequate to provide
for potential losses on medical  receivables  based on management's  evaluation.
Under the terms by which the medical receivables are purchased,  the Company has
significant  collateral,  including  substitution  of receivables  exceeding the
contractual  period ranging from 1-270 days.  Accordingly,  charge-offs  are not
expected  to be  material  to the  Company's  financial  position  or results of
operations.  During the three months ended March 31, 2002 and 2001,  no reserves
for losses were needed.

COMMISSIONS:

Commissions  paid  to  outside  and  related  parties  in  connection  with  the
origination  of  medical  receivables  are  expensed  as  incurred.  Commissions
incurred on the  acquisition of investor funds (notes  payable) are  capitalized
and amortized over the period the debt is outstanding using the interest method.
For the three  months  ended  March 31, 2002 and 2001,  the Company  capitalized
commissions of $649,931 and $1,505 respectively,  and amortized $192,191 and $87
during the periods, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

Unless  otherwise  indicated,  the fair value of all reported assets (except for
cash and cash equivalents  which  approximate fair value) and liabilities  which
represent  financial  instruments,  none of which are held for trading purposes,
approximate carrying values of such accounts.

INCOME TAXES

The Company uses the liability method of accounting for income taxes pursuant to
SFAS No.  109,  "Accounting  for Income  Taxes."  Deferred  income tax assets or
liabilities  result from  temporary  differences  when certain income or expense
amounts  are  recognized  or  deducted  for  financial  statement  purposes in a
different  reporting period than when they are recognized or deducted for income
tax  purposes.  For  Federal  and state  income  tax  purposes,  the  Company is
consolidated  with  its  Parent.  The  Company  is  allocated  its  share of the
consolidated tax liability  approximating the separate return method,  estimated
at 40% of net income  before  taxes.  As of March 31,  2002 and 2001,  Company's
provision (benefit) for income taxes was $(25,468) and $0, respectively.
<PAGE>
3. NOTES RECEIVABLE

The Company  entered into agreements  with three medical  providers  whereby the
Company  provided cash loans,  which are secured by real  property.  These notes
receivables are as follows:

                                                                    2001
                                                                 ----------
    Physician-Client, 18%, interest only paid monthly,
      due July 15, 2002 ......................................   $  300,000
    Skilled Nursing Facility, 16%, interest only paid monthly,
      due September 18, 2002 .................................      745,000
    Medical Group, 16%, interest only paid monthly,
      due November 12, 2002 ..................................    3,000,000
                                                                 ----------
                                                                 $4,045,000
                                                                 ----------

4. DEFERRED OFFERING COSTS

Deferred Offering Costs consist of costs incurred for the Company's registration
of debt  securities  on Form  SB-2 as filed  with the  Securities  and  Exchange
Commission  on February 6, 2001 and January 18, 2002.  These costs are amortized
over the weighted  term of the  securities  using the interest  method.  For the
three  months ended March 31, 2002 and 2001,  the Company  paid and  capitalized
deferred offering costs of $10,250 and $135,674 respectively,  of which, $31,397
and $0 was  amortized  and  included  in the net  interest  expense  during  the
periods, respectively.

5. NOTES PAYABLE

The Company  issues  notes,  secured by medical  receivables,  for cash  through
several   broker-dealers  as  filed  on  its  registration  statement  with  the
Securities and Exchange Commission. These notes consist of the following:

          RATE          MATURITY DATE                        MARCH 31, 2002
          ----          -------------                        --------------
Class A   9.00%  1 year from issuance date                    $ 5,569,000
Class A   8.00%  1 year from issuance date                      4,414,000
Class B   9.75%  2 years from issuance date                     3,258,000
Class B   8.75%  2 years from issuance date                     3,019,000
Class C  10.25%  3 years from issuance date                     2,650,000
Class C   9.25%  3 years from issuance date                     1,475,000
Class D  10.75%  4 years from issuance date                     3,227,000
Class D   9.75%  4 years from issuance date                     3,458,000
                                                              -----------
Total face value of notes payable.........................    $27,070,000
Less unamortized offering costs and commissions...........     (1,614,306)
                                                              -----------
                                                               25,455,694
Less current maturities...................................     10,196,000
                                                              -----------
                                                              $15,259,694
                                                              ===========
<PAGE>
The maturities of notes payable as of March 31, 2002 are as follows:

                    2002            $ 9,983,000
                    2003              6,277,000
                    2004              4,125,000
                    2005              6,685,000
                                    -----------
                                    $27,070,000
                                    ===========

6. INTEREST TO SECURED NOTEHOLDERS

Interest  on all  secured  notes is paid  monthly in arrears on the tenth of the
following  month to the  noteholder  of  record  as of the last day of the month
preceding the month in which the interest payment date occurs.  Interest is paid
without any compounding.  Each class of notes has a different  maturity date and
accrues interest at different rates. The current rates on the Company's  secured
notes are as follows:  Class A to 8.00%; Class B to 8.75%; Class C to 9.25%; and
Class D to 9.75%.  The effective  interest rates  approximate 4% higher than the
stated rates due to the amortization of deferred  offering costs and commissions
treated as interest expense.

7. STOCKHOLDER'S EQUITY

On April 23, The Company's Board of Directors  approved a dividend of $1,250,000
to our stockholder and Parent, Medical Capital Holdings, Inc.

8. RELATED PARTY TRANSACTIONS

Several  affiliates that are wholly owned by the Parent provide  services to the
Company. These related parties and services are as follows:

The Company has entered into an Administrative  Services  Agreement with Medical
Capital  Corporation  ("MCC"),  who  is  the  administrator  in  purchasing  and
monitoring the healthcare  receivables  the Company  purchases.  Medical Capital
Corporation  is  compensated  for the  underwriting  and  administration  of the
healthcare  receivables  purchased,  as well  as for  accounting  and  financial
services.  For the three  months  ended  March 31,  2002 and 2001,  the  Company
incurred administrative fees provided by MCC of $407,124 and $0, respectively.

The Company has entered into a Master Servicing  Agreement with Medical Tracking
Services,  Inc.  ("MTS").  MTS is compensated for servicing the receivables that
are purchased. Servicing fees incurred for the three months ended March 31, 2002
and 2001 were $25,524 and $0, respectively.

On January 24, 2002, the Company purchased  medical  receivables from its Parent
with a book value of  $1,193,980 in  consideration  of $955,183 in cash with the
balance  included  in the  calculation  of discount  revenue  earned and reserve
(deferred). On March 8, 2002, the Company purchased medical receivables from its
Parent with a book value of $1,111,602 in consideration of $999,186 in cash with
the balance  included in the calculation of discount  revenue earned and reserve
(deferred).  On March 20, 2002, the Company purchased  medical  receivables from
its Parent with a book value of  $1,189,113  in  consideration  of $1,060,772 in
cash with the balance included in the calculation of discount revenue earned and
reserve (deferred).
<PAGE>
9. TRUSTEE FEES

The Company  pledges  collateral to an  independent  bank  trustee.  The pledged
collateral  secures all of the Company's Series I notes,  regardless of when the
collateral  was acquired or when the notes were issued.  The fees to the trustee
are prepaid on an annual basis and amortized monthly. For the three months ended
March 31, 2002 and 2001, the Company prepaid trustee fees of $54,292 and $56,750
respectively, of which, $9,049 and $14,188 were amortized, respectively.

10. EARNINGS PER SHARE

The Company  computes  net  earnings  (loss) per share  following  SFAS No. 128,
"Earnings  Per Share." Under the  provisions  of SFAS No. 128,  basic net income
(loss) per share is computed  by dividing  the net income  (loss)  available  to
common  shareholders  for the period by the  weighted  average  number of common
shares  outstanding  during the period.  Diluted net income  (loss) per share is
computed  by  dividing  the net income  (loss)  for the  period by the  weighted
average number of common equivalent shares  outstanding during the period. As of
March 31, 2002 and 2001, there were no common stock equivalents.

11. SIGNIFICANT AGREEMENTS

The Company has entered into several broker-dealer agreements for the purpose of
offering,  selling,  and distributing  certain secured notes of the Company on a
best efforts basis. The effective term of each of the  broker-dealer  agreements
is generally for one year.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS. (UNAUDITED)

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

The Company was formed on August 4, 2000 and  operations  did not commence until
after the first quarter of 2001.  Therefore,  the Company had no revenue for the
three months ended March 31, 2001.

REVENUES.  For the three  months  ended March 31,  2002,  the Company  purchased
medical  receivables  carrying an  estimated  net  realizable  value  ("ENR") of
$8,432,415  and earned  discount fees on these  purchases of $902,243,  included
related party discount fees of $479,555 from its Parent.

The Company  presently  holds  $265,000 in discount  reserves  which reduced the
Company's  discount revenue.  Management  anticipates the receivables upon which
these  reserves  are based to be fully  collectible  and the  discount fee to be
earned within the provider contract period.

GROSS PROFIT.  The gross profit during the three months ended March 31, 2002 was
$495,119,  which arose from gross discount revenues of $971,407, less the change
in discount reserves of $69,164,  and administration  fees incurred of $407,124.
The administration fees, related party, were 4.8% of the total ENR.

OPERATING EXPENSES.  The Company's total operating expenses for the three months
ended March 31, 2002 were $836,495.  Expenses consisted primarily of $596,173 in
interest expense,  which consists of interest expense of $547,065 plus amortized
commissions  of $192,191 and  amortized  deferred  offering cost of $31,397 less
interest earned of $174,480.  Interest earned included $163,300 on the Company's
notes receivables of $4,045,000 from various medical  providers,  and $11,179 on
cash and cash  equivalents.  The Company also  incurred  $88,731 in  advertising
expense,  which is expensed as  incurred.  For the three  months ended March 31,
2001, the Company's total operating expenses were $18,390.

INCOME TAX  EXPENSE.  For the three months  ending March 31, 2002 and 2001,  the
provision  (benefit) for income taxes was $(25,468)  and $0,  respectively.  For
Federal and state income taxes, the Company is consolidated with its Parent. The
Company is  allocated  its share of the  consolidated  tax  liability  using the
separate return method.

NET LOSS.  The  Company had a net loss of $315,908 or basic and diluted net loss
per common share of $157.95 for the three  months ended March 31, 2002.  The net
loss of the  Company  resulted  primarily  from gross  profit of $495,119 on the
purchase of medical  receivables for the three months ended March 31, 2002 being
less than  administration  and operating  expenses over the same period. For the
rest of 2002, the Company  anticipates  greater  discount  revenues on purchases
from new  providers as well as additional  discount  fees on purchases  from the
present healthcare providers. Consequently, the Company expects its revenues and
profits to rise during the rest of the fiscal year ending December 31, 2002.

Still, due to numerous economic, competitive and regulatory risks, any or all of
which may have a material  adverse impact upon the Company's  operations,  there
can be no assurance  that it will be able to  successfully  purchase  healthcare
receivables  and/or acquire a business which generates  significant  revenues or
achieves a level of profits  which will permit the  Company to pay the  interest
and principal  payments on notes when due.  However,  the Company  believes cash
available from the net offering  proceeds will be sufficient to fund all general
and administrative expenses of the Company.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 2002, the Company received $8,853,000 in
cash from the issuance of notes. These funds were obtained by the Company on its
public offering of secured notes.  During the three months ended March 31, 2002,
the Company  used  $7,500,367  to purchase  medical  receivables,  and  received
collections  on medical  receivables  of  $2,460,046.  As of March 31, 2002, the
Company  maintained  $3,434,054 in cash and cash equivalents,  which it seeks to
utilize in purchasing  additional medical  receivables and in the acquisition of
other possible investments.

From the  Company's  inception on August 4, 2000 to March 31, 2002,  the Company
has  received  $27,070,000  from  the sale of its  notes,  used  $25,951,602  to
purchase  medical  receivables,  and made cash loans of $4,045,000 to providers.
The Company had $100,000 in Notes,  which matured and were not  reinvested.  The
Company received  $6,279,213 in collections on medical receivables over the same
period.

Management  believes  current  conditions  of the stock  exchanges and financial
markets are expected to have a favorable impact on the issuance of the Company's
secured  notes due to the  favorable  and fixed  interest  rates  offered on its
notes. The Company does not believe that inflation has had a significant  impact
on its operations since its inception.

The Company's  management consists of officers and employees employed by Medical
Capital  Corporation.  Their  salaries and benefits are paid by Medical  Capital
Corporation.  The Company's  operating  expenses will be reimbursed from the net
offering proceeds or from cash flow generated from its operations.

RELATED PARTY TRANSACTIONS

The Medical  Capital  Holdings Group has  substantial  experience and success in
identifying  and  evaluating   healthcare   providers  desiring  to  sell  their
healthcare receivables. The Company intends to use the services and expertise of
Medical  Capital  Holdings  and its  subsidiaries  to  purchase a  portfolio  of
healthcare  receivables.  It has entered into  contracts  with  Medical  Capital
Corporation and Medical Tracking Services,  affiliated companies, to provide the
appropriate  system for  purchasing  and  tracking its  healthcare  receivables.
Reimbursement  for these  services  approximates  the costs to these  affiliated
entities  which  management  believes  equals the  prevailing  market  rates for
comparable services of this nature.

For the three months ended March 31, 2002 and 2001, MCC was  compensated for the
underwriting and administration of the healthcare  receivables which the Company
purchased of $407,124 and $0, respectively. For the three months ended March 31,
2002 and 2001, MTS was  compensated  for servicing the Company's  receivables of
$25,524 and $0, respectively.

On January 24, 2002, the Company purchased  medical  receivables from its Parent
with a book value of  $1,193,980 in  consideration  of $955,183 in cash with the
balance  included  in the  calculation  of discount  revenue  earned and reserve
(deferred). On March 8, 2002, the Company purchased medical receivables from its
Parent with a book value of $1,111,602 in consideration of $999,186 in cash with
the balance  included in the calculation of discount  revenue earned and reserve
(deferred).  On March 20, 2002, the Company purchased  medical  receivables from
its Parent with a book value of  $1,189,113  in  consideration  of $1,060,772 in
cash with the balance included in the calculation of discount revenue earned and
reserve (deferred).
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141 "Business Combinations." SFAS No. 141 supersedes Accounting Principles Board
("APB") No. 16 and requires that any business combinations  initiated after June
30,  2001  be  accounted  for  as  a  purchase;   therefore,   eliminating   the
pooling-of-interest method defined in APB 16. The statement is effective for any
business  combination  initiated  after  June 30,  2001 and  shall  apply to all
business combinations accounted for by the purchase method for which the date of
acquisition is July 1, 2001 or later. The adoption of the statement did not have
a material impact on the Company's  financial  position or results of operations
since the Company has not  participated  in any  activities  covered  under this
pronouncement.

In July 2001,  the FASB issued SFAS No. 142,  "Goodwill and Other  Intangibles."
SFAS No. 142 addresses the initial recognition,  measurement and amortization of
intangible assets acquired individually or with a group of other assets (but not
those  acquired  in a  business  combination)  and  addresses  the  amortization
provisions for excess cost over fair value of net assets acquired or intangibles
acquired in a business combination.  The statement is effective for fiscal years
beginning  after  December  15,  2001,  and is  effective  July 1,  2001 for any
intangibles  acquired in a business  combination  initiated after June 30, 2001.
The Company  does not expect the  adoption  to have any impact on the  Company's
financial position or results of operations.

In October 2001, the FASB issued SFAS No. 143,  "Accounting for Asset Retirement
Obligations,"  which requires  companies to record the fair value of a liability
for asset retirement  obligations in the period in which they are incurred.  The
statement  applies  to  a  company's  legal  obligations   associated  with  the
retirement  of a tangible  long-lived  asset that results from the  acquisition,
construction,  and  development or through the normal  operation of a long-lived
asset. When a liability is initially recorded,  the company would capitalize the
cost,  thereby  increasing  the  carrying  amount  of  the  related  asset.  The
capitalized asset retirement cost is depreciated over the life of the respective
asset while the liability is accreted to its present value.  Upon  settlement of
the liability,  the obligation is settled at its recorded  amount or the company
incurs a gain or loss.  The  statement is effective  for fiscal years  beginning
after June 30, 2002. The Company does not expect the adoption to have any impact
to the Company's financial position or results of operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of  Long-Lived  Assets".  SFAS No. 144  addresses  the  accounting  and
reporting for the  impairment or disposal of  long-lived  assets.  The statement
provides a single  accounting  model for disposition of long-lived  assets.  New
criteria  must be met to  classify  the  asset as an asset  held-for-sale.  This
statement  also focuses on reporting the effects of a disposal of a segment of a
business.  This statement is effective for fiscal years beginning after December
15,  2001.  The Company  does not expect the  adoption to have any impact on the
Company's financial position or results of operations.

FORWARD LOOKING STATEMENTS

This  report  contains  forward  looking  statements  within the  meaning of the
Private Securities Litigation Reform Act of 1995. Forward looking statements can
be  identified  by the  use  of  words  like  "believes,"  "could,"  "possibly,"
"anticipates,"  "estimates,"  "projects,"  "expects,"  "may," "will,"  "should,"
"intend,"  "plan,"  "consider"  or the  negative of these  expressions  or other
variations,   or  by   discussions   of   strategies   that  involve  risks  and
uncertainties. The Company based these forward looking statements on its current
expectations  and  projections  about future  events and  information  currently
available to it.  Although the Company  believes that the  assumptions for these
forward looking statements are reasonable, any of the assumptions could prove to
be inaccurate.  The Company's actual results could differ  materially from those
anticipated in the forward  looking  statements due to risks,  uncertainties  or
actual events differing from the assumptions underlying these statements.
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES.

On February  6, 2001,  the  Securities  and  Exchange  Commission  declared  the
Registrant's Registration Statement on Form SB-2, File No. 333-45464, effective.
Shortly  thereafter,  the  Registrant  commenced  the  public  offering  of  its
Redeemable Secured Notes, Series I ("Notes").  The proceeds of the offering were
used primarily to acquire healthcare receivables.  At of the end of the offering
period,  the  Registrant had received net proceeds from the offering of Notes in
the amount of $22,633,451  net of deferred  offering costs of $272,138 and sales
commissions of $1,669,411.

On January  18,  2002,  the  Company  filed a  registration  statement  with the
Securities  and  Exchange   Commission,   registering  the  public  offering  of
$100,000,000 in Redeemable  Secured Notes.  The proceeds of the offering will be
used primarily to acquire  healthcare  receivables.  These Notes are offered for
sale by means  of a final  prospectus.  The  Registrant's  offering  of Notes is
currently  ongoing.  As of March 31,  2002,  the  Registrant  has  received  net
proceeds from the offering of Notes in the amount of $2,366,475  net of deferred
offering costs of $10,250 and sales commissions of $118,275.

                                   SIGNATURES

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

                                        MEDICAL CAPITAL MANAGEMENT, INC.


Date: May 15, 2001                      By /s/ Sidney M. Field
                                           -------------------------------------
                                           Sidney M. Field,
                                           President, Chief Executive Officer
                                           and Director


Date: May 15, 2001                      By /s/ Alan Meister
                                           -------------------------------------
                                           Alan Meister,
                                           Chief Accounting Officer
                                           (Chief Financial Officer)