<PAGE>

                      US Securities and Exchange Commission
                              Washington, DC 20549


                                   FORM 10-KSB
     (Mark One)
        [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

                  For the fiscal year ended December 31, 2001.

        [ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]

                         Commission File Number 0-12365

                            MIRACOR DIAGNOSTICS, INC.
                 (Name of small business issuer in its charter)

                      Utah                         58-1475517
                ----------------                ---------------
         (State or other jurisdiction of         (IRS Employer
         incorporation or organization)        Identification No.)

         9191 Towne Centre Drive, Suite 400, San Diego, California 92122
                    (Address of principal executive offices)

                    Issuer's telephone number: (858) 455-7127

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

         Title of each class           Name of each exchange on which registered
         -------------------           -----------------------------------------
    Common Stock, $0.15 Par Value                   Over-the-counter

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 not 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 ]

State issuer's revenues for its most recent fiscal year $9,344,867.

As of March 15, 2002, Registrant had outstanding 14,017,865 shares of the
Registrant's common stock, and the aggregate market value of such shares held by
non-affiliates of the Registrant (based upon the closing bid price of such
shares as listed on the OTC Bulletin Board on March 15, 2002) was approximately
$2,630,208.

Transitional Small Business Disclosure Format (check one):  Yes        No  X
                                                                ---       ---

DOCUMENTS INCORPORATED BY REFERENCE

Certain sections of the Registrant's definitive Proxy Statement for the 2002
Annual Meeting of Stockholders to be held on May 18, 2002, are incorporated by
reference in Part III of this Form 10-K to the extent stated herein.

<PAGE>

                                TABLE OF CONTENTS

                                     PART I

Item 1.   Description of the Business........................................1

Item 2.   Description of Property............................................6

Item 3.   Legal Proceedings..................................................7

Item 4.   Submission of Matters to a Vote of Security Holders................7


                              PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder
          Matters ...........................................................8

Item 6.   Management's Discussion and Analysis and Plan of Operation.........8

Item 7.   Financial Statements..............................................14

Item 8.   Changes In and Disagreements with Accountants on Accounting
          and Financial Disclosure..........................................14


                             PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons,
          Compliance with Section 16(a) of the Exchange Act.................15

Item 10.  Executive Compensation............................................16

Item 11.  Security Ownership of Certain Beneficial Owners and
          Management........................................................16

Item 12.  Certain Relationships and Related Transactions....................16


                              PART IV

Item 13.  Exhibits and Reports on Form 8-K..................................18

<PAGE>

                                     PART I

This Annual Report on Form 10-KSB and the documents incorporated herein by
reference contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates, and
projections about Miracor Diagnostics' industry, management beliefs, and certain
assumptions made by Miracor Diagnostics' management. Words such as
"anticipates," expects," "intends," "plans," "believes," "seeks," "estimates,"
variations of such words, and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties, and assumptions
that are difficult to predict; therefore, actual results may differ materially
from those expressed or forecasted in any such forward-looking statements.
Unless required by law, the Company undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new information, future
events, or otherwise. However, readers should carefully review the risk factors
set forth in other reports and documents that the Company files from time to
time with the Securities and Exchange Commission, particularly the Quarterly
Reports on Form 10-QSB and any Current Reports on Form 8-K. All references to
"us", "we", "Miracor", or "the Company" refer to Miracor Diagnostics, Inc., its
predecessors and its subsidiaries.


ITEM 1.  DESCRIPTION OF THE BUSINESS

Overview
--------

         Miracor Diagnostics, Inc. was previously a development stage medical
device company. In the third quarter of 1998, we redefined our business focus to
medical diagnostic imaging services and emerged as an operating company through
the acquisition of several magnetic resonance imaging (MRI) centers.
Subsequently, we focused on improvement of our capital structure and operations
of the acquired MRI centers. Additionally, we identified suitable acquisition
targets to position us for growth.

         On February 9, 2000, we closed the acquisition of 80% of three centers
located in Palm Harbor, St. Petersburg and Tampa, Florida as well as the holding
company, Ultra Open MRI Holding Corporation ("Ultra"). During 2001, the
transaction was rescinded pursuant to a settlement agreement. We relinquished
our holdings in Ultra and cancelled approximately 2.5 million shares, effective
February 28, 2001, of common stock in return.

         During June 2001, we acquired MRI centers located in California. Laguna
Niguel MRI, Inc. is an MRI center located in Laguna Niguel, California. Envision
Healthcare, LLC, is an MRI center located in Long Beach, California. We also
acquired 51% of Envision Open MRI, LLC, an MRI center located in Newport Beach,
California.

         On October 1, 2001 we opened a start-up MRI center located in
Perrysburg, Ohio. On February 11, 2002, we opened our ninth MRI center located
in Woodridge, Illinois through an asset purchase agreement.

         Our mission is to establish a growing and profitable diagnostic imaging
company based on maintaining the highest level of business integrity and
continually striving to improve the level of service to our referring physicians
and their patients.

         We utilize capital to purchase new diagnostic imaging equipment, to
upgrade and replace existing equipment, to expand within existing markets and to
enter new markets.

         We provide medical diagnostic imaging services through the operation of
our nine centers. Our principal executive office is located at 9191 Towne Centre
Drive, Suite 400, San Diego, California 92122. Our telephone number is
858/455-7127, and our website is www.miracor.net.

         We file annual, quarterly, and special reports, proxy statements, and
other information with the Securities Exchange Commission (SEC). Reports, proxy
statements and other information filed with the SEC can be inspected and copied
at the public reference facilities of the SEC at 450 Fifth Street NW,
Washington, DC 20549. Such material may also be accessed electronically by means
of the SEC's website at www.sec.gov.

         Our common stock, par value $0.15 per share, is traded over-the-counter
on the NASD Bulletin Board under the symbol "MRDG".

                                       1
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Acquisitions
------------

         During 1998, we acquired either the stock or substantially all of the
assets and liabilities of Vision Diagnostics, Inc. and Affiliates ("Vision").
Vision was in the business of providing medical diagnostic services. The
affiliated group of companies includes Vision Diagnostic, Inc., Regional MRI of
Orlando, Inc., Regional MRI of Jacksonville, Inc. and Regional MRI of Toledo,
Inc and West Regional MRI Limited Partnership. This acquisition included medical
diagnostic imaging centers in Orlando and Jacksonville, Florida, Toledo, Ohio,
and Oak Brook, Illinois.

         On February 9, 2000, we acquired 80% of Ultra Open MRI Holding
Corporation, an entity which owned three centers located in Palm Harbor, St.
Petersburg and Tampa, Florida. The purchase was in the form of a convertible
note for 20% and 80% in Restricted Rule 144 common stock. The purchase price was
$1,900,800 and goodwill associated with this transaction was recorded at
$1,544,553, which included direct costs associated with the purchase. Total
assets were approximately $1.8 million and total liabilities were approximately
$1.3 million as of February 9, 2000. The note payable to the principals was due
in variable payments totaling $380,160 plus accrued interest. The acquisition
was accounted for as a purchase in 2000. During 2001, the transaction was
rescinded pursuant to a settlement agreement. Effective February 28, 2001, we
relinquished our holdings in Ultra and cancelled approximately 2.5 million
shares of common stock in return. As a result of this rescinded transaction, the
carrying amount of our common stock and additional paid-in capital was reduced
by $2.66 million. The revenues and expenses of Ultra for the two month period
ended February 28, 2001 were $695,327 and $453,893, respectively and are
included in our consolidated financial statements for the year ended December
31, 2001. The assets and liabilities of Ultra as well as related notes payable,
goodwill associated with the acquisition, and all other Ultra related balances
are not included in our consolidated financial statements as of December 31,
2001. (see Part II, Item 7 "Notes to Consolidated Financial Statements" - Note
2).

         On June 1, 2001, we acquired Laguna Niguel MRI, Inc., an MRI center
located in Laguna Niguel, California. The acquisition was funded with a loan
from a third party. The purchase price was $1,250,000 and goodwill associated
with the transaction was recorded at $906,793, which included direct costs
associated with the purchase. Total assets were approximately $575,000 and total
liabilities were approximately $177,000. The note payable of $1,250,000 to the
third party, along with accrued interest is payable over 5 years at an interest
rate of 11.2% in monthly installments of $29,357.

         On June 1, 2001, we acquired Envision Healthcare, LLC, an MRI center
located in Long Beach, California. The center was acquired from one of our
directors/officers. The acquisition was funded via seller's financing. The
purchase price was $200,000 and goodwill associated with the transaction was
recorded at $84,773. Total assets were approximately $803,500 and total
liabilities were approximately $688,000. The convertible note payable of
$200,000 to the seller is payable over 3 years in payments of interest only at
10% for the first year with the principal to be paid down in equal installments
during the following two years.

         On June 1, 2001, we acquired 51% of Envision Open MRI, LLC, an MRI
center located in Newport Beach, California. The center also was acquired from
one of our directors/officers. The acquisition was via seller's financing. The
purchase price was $75,000 and goodwill associated with the transaction was
recorded at $7,000. Total assets were approximately $558,000 and total
liabilities were approximately $426,000. The convertible note payable of $75,000
to the seller is payable over 3 years in payments of interest only at 10% for
the first year with the principal to be paid down in equal installments during
the following two years.

         We plan to seek, investigate and, if such investigation warrants, to
acquire controlling interest in business opportunities that are similar in
nature to our existing medical diagnostic imaging centers. We plan to
concentrate our search on opportunities that are located near our existing MRI
centers. We may seek a business opportunity in the form of centers, which have
recently commenced operations or are mature businesses.

         In seeking business opportunities, we will base our decision upon the
objectives of seeking long-term appreciation in market value. We will attempt to
analyze all relevant factors and make a determination based upon reasonable
investigative measures and available data. We will utilize the services of our
present attorney and accountants in the investigation of prospective
acquisitions. We may also utilize the services of hired consultants.


                                       2
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Subsequent Event
----------------

         On February 11, 2002, we opened our ninth diagnostic center located in
Woodridge, Illinois through an asset purchase agreement. We assumed medical
equipment pledged under a capital lease with a finance company. The agreement
finances MRI equipment with a carrying amount of approximately $1,066,000 with a
monthly installment payment of $30,050 over 45 months with an interest rate of
10.75%.

Risk Factors
------------

         Investment in our securities involves a high degree of risk. Investors
should carefully consider the following factors, among others, relating to
Miracor.

Accumulated Deficit; Uncertainty of Future Profitability

         At December 31, 2001, we had an accumulated deficit of approximately
$25,469,000 which includes losses from our prior operations in the oil and gas
business, medical device industry and from our first two years of operating in
the medical diagnostic imaging business.

         Our ability to achieve profitability depends upon our ability to
successfully market our medical diagnostic imaging business, of which there can
be no assurance. In addition, we will seek to continue to acquire additional
medical diagnostic imaging operations, but there can be no assurances that we
will be able to identify any additional operations that we deem suitable for
acquisition, or that if we do identify such operations, that any of them will be
successfully acquired, developed and commercialized.

Need for Additional Capital

         We utilize capital to purchase new diagnostic imaging equipment, to
upgrade and replace existing equipment, to expand within existing markets and to
enter new markets. Our capital sources have consisted primarily of income from
operations, borrowings under our credit facility and borrowings under secured
leases. Our ability to accomplish our goals and to execute our business strategy
depend on our continued ability to access capital on appropriate terms. Our
growth could be limited and our existing operations impaired unless it is able
to obtain additional capital through subsequent debt or equity financings. There
can be no assurance that borrowing capacity under the credit facility will be
available to us when needed or that we will be able to obtain additional
financing or that, if available, such financing will be on terms acceptable to
us. As a result, there can be no assurance that we will be able to implement our
business strategy successfully.

No Assurance of Identification or Acquisition of Additional Operations

         From time to time, if our resources allow, we intend to explore the
acquisition of additional medical diagnostic imaging operations. There can be no
assurance, however, that we will be able to identify any additional magnetic
resonant imaging operations and, even if suitable operations are identified,
there can be no assurance that we will have sufficient funds to acquire any such
operations or that any such operations will ultimately be viable.

Government Regulations

         Our operations are subject to extensive government regulations in the
United States. In order to operate our medical diagnostics imaging equipment, we
must satisfy numerous mandatory procedures, regulations, and safety standards
established by the federal and state regulatory agencies. There can be no
assurance that we can successfully comply with all government regulations.

Competition

         The medical diagnostic imaging industry is intensely competitive,
particularly in terms of price, quality and marketing. Some competitors are
better established and have substantially greater financial, marketing and other
resources than us. Further, most of our competitors have been in existence for a
substantially longer period of time and may be better established in those
markets where we intend to sell our services. As a result of our relative lack
of financial, marketing and other resources, there can be no assurance that we
will be able to market our MRI services successfully, or compete in the
diagnostic imaging industry.

                                       3
<PAGE>

Health Care Reform and Related Measures; Uncertainty of Pricing and
Reimbursement

         The levels of revenues and profitability of medical diagnostic imaging
operations may be affected by the continuing efforts of governmental and third
party payors to contain or reduce the costs of health care through various means
and the initiatives of third party payors with respect to the availability of
reimbursement. In the United States, there have been, and we expect that there
will continue to be, a number of federal and state proposals to implement
similar governmental control. Although we cannot predict what legislative
reforms may be proposed or adopted or what actions federal, state or private
payors for health care services may take in response to any health care reform
proposals or legislation, the existence and pendency of such proposals could
have a material adverse effect on us.

         Whether a medical procedure is subject to reimbursement from third
party payors impacts upon the likelihood that a service will not be purchased.
Third party payors are increasingly challenging the prices charged for medical
procedures. There can be no assurance that any of our medical diagnostic imaging
services will continue to be reimbursable. To the extent any or all of our
medical procedures are not reimbursable by third party payors our ability to
sell our services on a competitive basis will be adversely affected, which could
have a material adverse effect on us.

Restrictions on Corporate Practice of Medicine

         The laws of certain states in which we operate or may operate in the
future prohibit non-physician entities from practicing medicine, exercising
control over physicians or engaging in certain practices such as fee-splitting
with physicians. Although we have structured our affiliations with physician
groups so that the physicians maintain exclusive authority regarding the
delivery of medical care, there can be no assurance that these laws will be
interpreted in a manner consistent with our practices or that other laws or
regulations will not be enacted in the future that could have a material adverse
effect on our business. If a corporate practice of medicine law is interpreted
in a manner that is inconsistent with our practices, we would be required to
restructure or terminate its relationship with the applicable physician group to
bring its activities into compliance with such law. The termination of, or
failure of us, to successfully restructure any such relationship could result in
fines or a loss of revenue that could have a material adverse effect on our
business, financial condition or operating results.

No Dividends With Respect to Common Stock; Stock Price

         We have not paid any cash dividends with respect to our common stock,
and it is unlikely that we will pay any dividends on our common stock in the
foreseeable future. Earnings, if any, that we may realize will be retained in
the business for further development and expansion.

         The trading price of our common stock could be subject to wide
fluctuations in response to quarterly variations in our operating results or
other events or factors. In addition, the stock market has, from time to time,
experienced extreme price and volume fluctuations that have particularly
affected the market prices of companies in the healthcare service industries and
that have often been unrelated to the operating performance of the affected
companies. Announcements of changes in reimbursement policies of third-party
payors, legislative or regulatory developments, economic news and other external
factors may have a significant impact on the market price of healthcare stocks.

Anti-Takeover Provisions; Poison Pill Issuance of Preferred Stock; Utah
Anti-Takeover Provisions

         Our Articles of Incorporation and By-Laws contain provisions that may
make the acquisition of control of the Company by means of tender offer,
over-the-counter market purchases, a proxy fight or otherwise, more difficult.
This could prevent security holders from realizing a premium on their
securities. We also have a staggered board of directors, which is a further
impediment to a change in control.

         We have adopted a so-called "poison pill." Specifically, the poison
pill significantly increases the cost to an unwanted party to acquire control of
Miracor upon the acquisition by such unwanted suitor of 15% of the outstanding
voting power.

                                       4
<PAGE>

         In addition, the board of directors may issue one or more series of
preferred stock without any action on the part of the shareholders of the
Company, the existence and/or terms of which may adversely affect the rights of
holders of the common stock. In addition, the issuance of any such additional
preferred stock may be used as an "anti-takeover" device without further action
on the part of the shareholders. Issuance of preferred stock, which may be
accomplished through a public offering or a private placement to parties
favorable to current management, may dilute the voting power of holders of
common stock and the preferred stock (such as by issuing preferred stock with
super voting rights) and may render more difficult the removal of current
management, even if such removal may be in the shareholders' best interests.
Miracor is subject to the provisions of Sections 61-6-3 through 61-6-12 of the
Utah Control Shares Acquisition Act, an anti-takeover statute. Sections 61-6-3
through 61-6-12 effectively provide that in the event a person acquires
ownership or the power to effect, directly or indirectly, the exercise of 20% or
more of the voting power of a Utah corporation in connection with the election
of directors, then such person shall only be entitled to vote to the extent
expressly agreed to by the majority of the other shareholders of the
corporation. Accordingly, potential acquirers of the Company may be discouraged
from attempting to effect acquisitions of the Company's voting securities,
thereby possibly depriving holders of the Company's securities of certain
opportunities to sell or otherwise dispose of such securities at above-market
prices.

Shares Eligible for Future Sale

         At December 31, 2001, there were 6,237,266 shares of common stock that
were issued and outstanding that are "restricted securities" as that term is
defined by Rule 144 of the Securities Act, all of which are currently eligible
for resale in compliance with Rule 144 of the Securities Act. Of these shares,
17% are owned by our current officers and directors.

         Rule 144 provides that, in general, a person holding restricted
securities for a minimum period of one (1) year may, every three (3) months
thereafter, sell in brokerage transactions an amount of shares which does not
exceed the greater of one percent (1%) of the Company's then outstanding common
stock or the average weekly trading volume of the common stock during the four
(4) calendar weeks immediately prior to such sale. Rule 144 also permits, under
certain circumstances, the sale of shares without any quantity limitations by a
person who is not an affiliate of the Company and was not an affiliate at any
time during the ninety (90) day period immediately prior to such sale, and who
has satisfied a two (2) year holding period. Sales of the Company's common stock
by shareholders under Rule 144 may have a depressive effect on the market price
of the Company's common stock.

Corporate History

         Miracor Diagnostics, Inc. was incorporated on February 6, 1980, under
the laws of the State of Utah.

         Prior to 1992, our business was the exploration and production of
hydrocarbons. As of June 1, 1992, we re-entered the development stage. Effective
January 1, 1994, we completed the divestiture of all oil and gas properties and
are no longer in the hydrocarbon business. Since that time, we have been
exclusively a medical based company.

         Between 1994 and 1998, we engaged in the development of the following
innovative medical devices:

         1.       The Fluid Alarm System (FAS) monitored the integrity of
                  infection control barriers, such as surgical gloves and gowns
                  worn during medical procedures. We received FDA clearance for
                  the FAS during the year ended December 31, 1995. We have the
                  patent licensing rights through 2005 with an option to extend
                  such rights through the life of the patent, 2010.

         2.       The Cell Recovery System (CRS), was a cell "brushing" and
                  retrieval system that used an automated biopsy brush for the
                  collection of specimen cells for diagnostic purposes,
                  primarily (but not limited to) cancer detection. We received
                  FDA clearance for the CRS in March 1996. We initiated further
                  clinical trials on the CRS in 1997. We own 50% of the patent.
                  Additionally, we have the patent licensing rights through the
                  life of the patent, 2008.

                                       5
<PAGE>

         In 1998, coincident with the purchase of Vision, we recorded impairment
losses associated with the FAS and the CRS licenses. However, we may elect to
reintroduce or sell either product at a later date, although we have no plans to
do so at this time.

         In 1998, the Company redefined our business focus from medical devices
to medical diagnostic imaging services and emerged as an operating company
through the acquisition of medical diagnostic imaging centers in Orlando and
Jacksonville, Florida, Toledo, Ohio, and Oak Brook, Illinois.

         Through these acquisitions of MRI centers, we redefined our business
focus to medical diagnostic imaging services and emerged as an operating
company. In October 1999, we changed our name to Miracor Diagnostics, Inc. to
reflect our focus in medical diagnostic imaging.

         On February 9, 2000, we acquired 80% of Ultra Open MRI Holding
Corporation, an entity which owned three centers located in Palm Harbor, St.
Petersburg and Tampa, Florida. During 2001, the transaction was rescinded
pursuant to a settlement agreement. Effective February 28, 2001, we relinquished
our holdings in Ultra and cancelled approximately 2.5 million shares of common
stock in return. As a result of this rescinded transaction, the carrying amount
of our common stock and additional paid-in capital was reduced by $2.66 million.
The revenues and expenses of Ultra for the two month period ended February 28,
2001 were $695,327 and $453,893, respectively and are included in our
consolidated financial statements for the year ended December 31, 2001. The
assets and liabilities of Ultra as well as related notes payable, goodwill
associated with the acquisition, and all other Ultra related balances are not
included in our consolidated financial statements as of December 31, 2001. (see
Part II, Item 7 "Notes to Consolidated Financial Statements" - Note 2).

         During June of 2001, we acquired three MRI centers located in
California. All three acquisitions were accounted for using the purchase method
of accounting. The goodwill arising from these three transactions of $998,566
was amortized on a straight-line basis over a twenty year period during 2001.
Laguna Niguel MRI, Inc. was funded via third party financing with a note payable
of $1,250,000 along with accrued interest payable at 11.23% per annum due over 5
years. Envision Healthcare, LLC was acquired from one of our directors/officers
with a convertible note payable of $200,000 due to the seller, along with
accrued interest at 10% per annum due over 3 years. We also acquired 51% of
Envision Open MRI, LLC from one of our directors/officers with a convertible
note payable of $75,000 due to the seller, along with accrued interest at 10%
per annum is payable over 3 years.

         On October 1, 2001 we opened a start-up MRI center located in
Perrysburg, Ohio. We acquired medical equipment under capital leases with a
finance company. On February 11, 2002, we opened our ninth diagnostic center
located in Woodridge, Illinois through an asset purchase agreement. We assumed
medical equipment pledged under a capital lease with a finance company.

Number of Employees

         As of December 31, 2001, we employed five full-time and one part-time
corporate employees and 47 full-time and 12 part-time employees at our eight MRI
centers. None of our employees is covered by collective bargaining contracts.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our corporate headquarters and executive offices are in San Diego, CA,
where we lease our facility. We pay $8,444 per month on a lease which expires
July 31, 2002. In addition, we lease our MRI machines and offices for our eight
MRI centers in Jacksonville FL; Orlando, FL; Sylvania, OH; Perrysburg, OH;
Laguna Niguel, CA; Long Beach, CA; Newport Beach, CA; and Oak Brook, IL. Our
total lease obligation on our MRI machines and office centers is currently
approximately $182,263 per month. The leases expire at various times through
2011.

                                       6
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS


         A suit in the Court of Common Pleas, Cuyahoga, Ohio was commenced by
Plaintiff James V. Zelch and his wholly owned entity, J.Z. Investments, Inc.,
against us and three of our MRI site subsidiary entities, namely, Regional MRI
of Orlando, Inc., Regional MRI of Toledo, Inc., and West Regional MRI Limited
Partnership, seeking the payment of fees for radiological diagnostic services
allegedly rendered to patients of the aforementioned MRI Sites at a time prior
to our purchase of these MRI site entities. We have contested this lawsuit.
However, a default judgment for $187,102 was entered which we are now seeking to
overturn and vacate. We are claiming that the judgment was improperly applied
for by the Plaintiffs and granted by the Court. In the opinion of our counsel,
the judgment will likely be set aside.

         From time to time we have been named as a defendant in a lawsuit. As of
December 31, 2001, all such lawsuits have been dismissed or settled through
agreed-upon payment terms, except for as noted above. There are no other legal
proceedings, to which we are a party, which could have a material adverse effect
on our business, financial condition or operating results.

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

         No matters were submitted to our shareholders during the fourth
quarter.


                                       7
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                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is traded over-the-counter under the symbol MRDG. The
following table sets forth, for the periods indicated, the high and low bid
prices for the common stock, as listed on the OTC Bulletin Board during 2000 and
2001.

                                                          Bid Price
                                                   High                   Low
                                                  ----------------------------
2000
----
         First Quarter                            $ 1.34              $  0.63
         Second Quarter                           $ 0.75              $  0.21
         Third Quarter                            $ 0.32              $  0.21
         Fourth Quarter                           $ 0.27              $  0.11


2001
----
         First Quarter                            $ 0.23               $ 0.13
         Second Quarter                           $ 0.20               $ 0.14
         Third Quarter                            $ 0.21               $ 0.10
         Fourth Quarter                           $ 0.27               $ 0.13


         On March 15, 2002, the closing bid and asked prices of our common
stock, as listed on the OTC Bulletin Board, were $0.24 and $0.29 per share,
respectively.

         On March 15, 2002, we had approximately 1,248 holders of record of
common stock.

         We have not paid any cash dividends with respect to our common stock,
and it is unlikely that we will pay any dividends on our common stock in the
foreseeable future. Earnings, if any, that we may realize will be retained in
the business for further development and expansion.

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

         The following discussion should be read in conjunction with, and is
qualified in its entirety by, the consolidated financial statements and notes
there included in Item 7 in this Annual Report on Form 10-KSB. This item
contains forward-looking statements that involve risks and uncertainties. Actual
results may differ materially from those indicated in such forward-looking
statements. Factors that may cause such a difference include, but are not
limited to, those discussed in "Item 1: Description of the Business - Risk
Factors."

Forward-Looking Statements
--------------------------

         When used in this discussion as well as in other Items in this Annual
Report on Form 10-KSB, words such as "anticipates," expects," "intends,"
"plans," "believes," "seeks," "estimates," variations of such words, and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties, and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
such forward-looking statements. Unless required by law, the Company undertakes
no obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise. However, readers should
carefully review the risk factors set forth in other reports and documents that
the Company files from time to time with the Securities and Exchange Commission,
particularly the Quarterly Reports on Form 10-QSB and any Current Reports on
Form 8-K.

Overview
--------

         In 1998, we redefined our business focus from medical devices to
medical diagnostic imaging services and emerged as an operating company through
the acquisition of medical diagnostic imaging centers in Orlando and
Jacksonville, Florida, Toledo, Ohio, and Oak Brook, Illinois.


                                       8
<PAGE>

         On February 9, 2000, we acquired 80% of Ultra Open MRI Holding
Corporation, an entity which owned three centers located in Palm Harbor, St.
Petersburg and Tampa, Florida. The purchase was in the form of a convertible
note for 20% and 80% in Restricted Rule 144 common stock. The purchase price was
$1,900,800 and goodwill associated with this transaction was recorded at
$1,544,553, which included direct costs associated with the purchase. Total
assets were approximately $1.8 million and total liabilities were approximately
$1.3 million as of February 9, 2000. The note payable to the principals was due
in variable payments totaling $380,160 plus accrued interest. The acquisition
was accounted for as a purchase in 2000. During 2001, the transaction was
rescinded pursuant to a settlement agreement. Effective February 28, 2001, we
relinquished our holdings in Ultra and cancelled approximately 2.5 million
shares of common stock in return. As a result of this rescinded transaction, the
carrying amount of our common stock and additional paid-in capital was reduced
by $2.66 million. The revenues and expenses of Ultra for the two month period
ended February 28, 2001 were $695,327 and $453,893, respectively and are
included in our consolidated financial statements for the year ended December
31, 2001. The assets and liabilities of Ultra as well as related notes payable,
goodwill associated with the acquisition, and all other Ultra related balances
are not included in our consolidated financial statements as of December 31,
2001.As a result of the Ultra settlement, the weighted average number of shares
outstanding computations for the year ended December 31, 2001 includes the
cancellation of approximately 2.5 million common shares as of February 28, 2001.

         During June of 2001, we acquired three MRI centers located in
California. All three acquisitions were accounted for using the purchase method
of accounting. The goodwill arising from these three transactions of $998,566 is
being amortized on a straight-line basis over a twenty year period. Laguna
Niguel MRI, Inc. was funded via third party financing with a note payable of
$1,250,000 along with accrued interest payable at 11.23% per annum due over 5
years. Envision Healthcare, LLC was acquired from one of our directors/officers
with a convertible note payable of $200,000 due to the seller, along with
accrued interest at 10% per annum due over 3 years. We also acquired 51% of
Envision Open MRI, LLC from one of our directors/officers with a convertible
note payable of $75,000 due to the seller, along with accrued interest at 10%
per annum is payable over 3 years.

         On October 1, 2001 we opened a start-up MRI center located in
Perrysburg, Ohio. We assumed medical equipment under capital leases with a
finance company. On February 11, 2002, we opened our ninth diagnostic center
located in Woodridge, Illinois through an asset purchase agreement. We assumed
medical equipment pledged under a capital lease with a finance company.

         In the immediate future, to fund expansion of our existing operations
and acquire additional MRI centers, we intend to obtain additional debt or
equity financing. Our ability to obtain additional sources of financing cannot
be assured. Our growth is dependent on our ability to obtain additional funding
to expand our existing operations and acquire other diagnostic centers.

Critical Accounting Policies
----------------------------

         The preparation of consolidated financial statements in conformity with
accounting principals generally accepted in the United States of America
requires us to make a number of estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements. Such estimates and
assumptions affect the reported amounts of revenues and expenses during the
reporting period. On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and circumstances. We
believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future
conditions.

         We believe that the estimates and assumptions that are most important
to the portrayal of our financial condition and results of operations, in that
they require our most difficult, subjective or complex judgments, form the basis
for the accounting policies deemed to be most critical to us. These critical
accounting policies relate to bad debts, impairment of intangible assets and
long lived assets, contractual adjustments to revenue, and contingencies and
litigation. We believe estimates and assumptions related to these critical
accounting policies are appropriate under the circumstances; however, should
future events or occurrences result in unanticipated consequences, there could
be a material impact on our future financial conditions or results of
operations.


                                       9
<PAGE>

Results of Operations
---------------------

         Year ended December 31, 2001 compared to year ended December 31, 2000.

Net Revenue
------------

         Net patient service revenue for the year ended December 31, 2001 was
$9,344,867 compared to $8,726,049 for the year ended December 31, 2000. The
increase of 7.1% is primarily attributed to increased scan volume and the June
1, 2001 acquisitions of Laguna Niguel MRI, Inc., Envision Healthcare, LLC and
Envision Open MRI, LLC., partly offset by the relinquishing of our holdings in
Ultra as of February 28, 2001. Revenue from MRI centers is generated by
providing scanning services for the healthcare market and accounted for all of
the net revenue during the year ended December 31, 2001 and 2000.

Operating Expenses
------------------

         Sales, general and administrative costs were $8,212,782 in 2001 as
compared to $7,797,311 in 2000, representing an increase of 5.3%. This increase
was primarily attributed to additional costs related to the increased scan
volume and to a lesser extent, the costs associated with the June 2001
acquisitions of Laguna Niguel MRI, Inc., Envision Healthcare, LLC and Envision
Open MRI, LLC. These increases were partly offset by the divesting of our
holdings in Ultra.

Net Income
-----------

         Net income for the year ended December 31, 2001 was $329,823 as
compared to the net income of $175,726 for the year ended December 31, 2000. The
increase of 87.7% was primarily attributable to increased scan volume and to the
June 2001 acquisitions of Laguna Niguel MRI, Inc., Envision Healthcare, LLC and
Envision Open MRI, LLC.

         Basic and diluted earnings per common share were $0.02 for the year
ended December 31, 2001 as compared to $0.01 for the year ended December 31,
2000. Basic and diluted earnings per share increased as the result of the 87.7%
increase in net income, partly offset by an increase in the weighted average
number of common shares outstanding for the year ended December 31, 2001 as
compared to the year ended December 31, 2000. The weighted average number of
shares outstanding calculation for the year ended December 31, 2001 includes the
cancellation of approximately 2.5 million common shares as of February 28, 2001,
resulting from the Ultra settlement.

Liquidity and Capital Resources
-------------------------------

         To date, we have funded our capital requirements for the current
medical diagnostic imaging operations from cash flows from our operations and
the public and private sale of debt and equity securities as well as from the
issuance of common stock in exchange for services. Our cash position at December
31, 2001 was $363,478 as compared to $282,337 at December 31, 2000, representing
a 28.7% increase.

         In 2001, operating activities provided $973,008 of net cash. We
received $448,534 from increases in lines of credit and $150,000 from the
proceeds of notes payable. In addition during 2001, we received $15,000 from the
gross proceeds from the issuance of restricted Rule 144 common stock. During the
year ended December 31, 2001, we made $612,512 of principal payments on notes
payable, $31,926 of principal payments on notes payable to related parties,
$833,666 of principal payments on capital lease obligations and purchased
equipment of $58,034. During the year ended December 31, 2001, we acquired cash
of $67,352 in the purchase of three companies and forfeited cash of ($36,615) as
a result of the Ultra settlement agreement. During 2001, net cash provided by
operating activities included net income of $329,823. Net income was offset by
the change in other net assets (excluding cash) of ($744,712). This decrease in
net assets (excluding cash) was compensated by

         -        $260,211 in common stock paid for services and interest in
                  lieu of cash,
         -        $1,048,508 in depreciation/amortization,
         -        $66,507 of minority interest, and
         -        $12,671 in accrued stock compensation expense.

                                       10
<PAGE>

         Changes in current assets and current liabilities resulted in a
negative working capital position of ($315,506) at December 31, 2001 as compared
to a position working capital of $201,303 at December 31, 2000. Despite being
profitable and having approximately $363,000 in cash at December 31, 2001, we
have more current liabilities than current assets. As our liquidity is limited,
we need to increase profitability and may be required to obtain funds in the
short-term and in the longer term to continue to provide services in our current
MRI centers and to acquire additional MRI centers.

         During June of 2001, we acquired three MRI centers located in
California. All three acquisitions were accounted for using the purchase method
of accounting. The goodwill arising from these three transactions of $998,566
was being amortized through December 31, 2001, on a straight-line basis over a
twenty year period. Laguna Niguel MRI, Inc. was funded via third party financing
with a note payable of $1,250,000 along with accrued interest payable at 11.23%
per annum over 5 years. Envision Healthcare, LLC was acquired from one of our
directors/officers with a convertible note payable of $200,000 due to the
seller, along with accrued interest at 10% per annum over 3 years. We also
acquired 51% of Envision Open MRI, LLC from one of our directors/officers with a
convertible note payable of $75,000 due to the seller, along with accrued
interest at 10% per annum is payable over 3 years.

         During the year ended December 31, 2001, 34,500 shares of accrued
employee common stock grants were issued pursuant to employee agreements and 536
shares of accrued common stock grants were cancelled. Accordingly, deferred
stock compensation of $51,369 was reclassified to common stock and additional
paid-in capital in during the year ended December 31, 2001. Pursuant to employee
agreements, 7,500 shares of accrued employee common stock grants were issued in
May of 2000. Accordingly, deferred stock compensation of $5,156 was reclassified
to common stock and additional paid-in capital during the year ended December
31, 2000.

         Pursuant to an investment letter dated March 5, 2001 with an
individual, the Company received $15,000 for the purchase of 83,335 shares of
Restricted Rule 144 common stock at a purchase price of $0.18 per share. All
such shares have been issued.

         During the first quarter of 2001, we issued a $150,000 note payable at
a 15% interest rate, originally due August 28, 2001, to a corporation. The
noteholder was awarded warrants to purchase 400,000 shares of common stock at an
exercise price of $0.219 per share. On August 28, 2001, we awarded the
noteholder warrants to purchase 75,000 shares of common stock at an exercise
price of $0.219 per share as consideration for extending the due date by three
months. During November 2001, the note was paid in full.

         During the third quarter of 2000, we issued $150,000 of 12% convertible
notes payable, due January 15, 2002, to six officers and directors. Upon the
ninth month anniversary of the note, each noteholder may elect to convert all
(but not part) of the note into 83,333 shares of our common stock. The aggregate
payment amount due to the noteholders was $37,500 plus accrued interest due
April 15, 2001, July 15, 2001, October 15, 2001, and January 15, 2002. In April
of 2001, we issued 56,250 shares of Restricted Rule 144 common stock valued at
$4,078 as consideration for extending each due date by six months. In October
2001, we issued 100,000 shares of Restricted Rule 144 common stock valued at
approximately $8,500 as consideration for extending the due dates of five of the
six notes by an additional twelve months. The balance of these notes was
$143,750 and $150,000 at December 31, 2001 and 2000, respectively.

         Pursuant to investment letters issued during 2000 with eight
individuals, we received a total of $190,000 for the purchase of 388,600 shares
of Restricted Rule 144 common stock at purchase prices ranging from $0.40 to
$0.65 per share. All such shares have been issued.

         In September 1999, we issued $50,000 in principal amount of 10%
promissory notes payable, due March 31, 2000, to two directors and an individual
to finance operations. Pursuant to the loan agreements, total warrants to
purchase 40,000 shares of common stock at an exercise price of $0.625 per share
were issued. In connection with the issuance of the warrants to the individuals,
we are recognizing additional interest expense of $10,938, which is being
amortized over the terms of the loans. During the second quarter of 2000, we
paid $45,000 of the $50,000 short-term promissory notes payable along with
accrued interest payable of $2,785 in the form of $5,000 cash and 120,000 shares
of Restricted Rule 144 common stock.

                                       11
<PAGE>

         In April 2000, we entered into and subsequently terminated an
investment agreement with Swartz Private Equity LLC ("Swartz"). The investment
agreement entitled us, at our option, to issue and sell our common stock for up
to an aggregate of $15 million from time-to-time during a three-year period
through April 2003, subject to certain conditions including (1) an effective
registration statement must be on file with the SEC registering the resale of
the common shares, and (2) a limitation on the number of common shares which can
be sold to Swartz within a 30 day time period based on the trading volume of the
stock, among others. Swartz could purchase the common stock from us at a
discount ranging from 9% to 25% depending on the price of the common stock. In
addition to the common stock purchase, Swartz received warrants to purchase an
additional 10% of the common stock equal to 110% of the market price as
determined during the pricing period, subject to further semi-annual adjustments
if the price of the common stock goes down. The registration statement went
effective on July 12, 2000. During 2000 pursuant to this agreement, we sold
202,430 shares of common stock and issued 779,024 warrants to purchase shares of
the common stock at exercise prices ranging from $0.23 to $0.28 with exercise
periods of five years from date of grant. As of December 31, 2001, none of the
warrants have been exercised. This equity financing agreement did not provide us
the necessary resources to pursue our acquisition strategy; therefore, the
agreement was terminated effective October 16, 2000.

PLAN OF OPERATION

Capital Requirements
--------------------

         Our greatest cash requirements during 2002 will be for funding growth
through expansion of our existing operations and for future acquisitions of
additional MRI centers and for repaying our current liabilities and long-term
debt.

         Subsequent to the next 12 months, we plan to finance our long-term
operations and capital requirements with the profits and funds generated from
the revenues of our MRI centers. We may obtain future funding through new
private financings and public offerings of debt and equity securities.

         We became profitable during the second quarter of 2000. Our growth is
dependent on the success of our MRI centers.

Recent Accounting Pronouncements
--------------------------------

         In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 141, "Business Combinations". Statement 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Statement 141 also specifies criteria that intangible
assets acquired in a purchase method business combination must meet to be
recognized and reported apart from goodwill, noting that any purchase price
allocable to an assembled workforce may not be accounted for separately. Based
upon our initial assessment, we do not expect the adoption of this statement to
have a significant impact on our financial condition or results of operations.

         In June 2001, the FASB approved SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 requires companies to cease amortizing goodwill
and other intangible assets with indefinite lives after December 31, 2001. SFAS
No. 142 also establishes a new method of testing goodwill for impairment on an
annual basis or on an interim basis if an event occurs or circumstances change
that would reduce the fair value of a reporting unit below its carrying value.
We expect that the impact to 2002 net income associated with the discontinuation
of the amortization of goodwill to be a pre-tax increase of approximately
$174,000. We have not completed our initial assessment of goodwill impairment.
Upon adoption of this standard, any resulting impairment charges recorded may
have a material impact on our results of operations.

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." The statement provides accounting and reporting
standards for recognizing the cost associated with obligations related to the
retirement of tangible long-lived assets. Under this statement, legal
obligations associated with the retirement of long-lived assets are to be
recognized at their fair value in the period in which they are incurred if a
reasonable estimate of fair value can be made. The fair value of the asset
retirement costs is capitalized as part of the carrying amount of the long-lived
asset and expensed using a systematic and rational method over the asset's
useful life. Any subsequent changes to the fair value of the liability will be
expensed. We will be required to adopt this statement no later than January 1,
2003. Based on our initial assessment, we do not expect the adoption of this
statement to have a significant impact on our financial condition or results of
operations.

                                       12
<PAGE>

         In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which is effective for fiscal
years beginning after December 15, 2001. This statement supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," and replaces the provisions of APB Opinion
No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal
of Segments of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," for the disposal of segments of a business. SFAS No.
144 retains the fundamental provisions of SFAS No. 121 for the recognition and
measurement of the impairment of long-lived assets to be held and used and the
measurement of long-lived assets to be disposed of by sale. Impairment of
goodwill is not included in the scope of SFAS No. 144 and will be treated in
accordance with SFAS No. 142. Under SFAS No. 144, long-lived assets are measured
at the lower of carrying amount or fair value less cost to sell. We are required
to adopt this statement no later than January 1, 2002. Based on our current
assessment, we do not expect the adoption of this statement to have a
significant impact on our financial condition or results of operations.


                                       13
<PAGE>


ITEM 7.  FINANCIAL STATEMENTS

                                      INDEX
                                      -----
                                                                        Page No.
                                                                        --------

Independent Auditors' Report                                                F-1

Consolidated Balance Sheets as of December 31, 2001 and 2000                F-2

Consolidated Statements of Operations for the
Years Ended December 31, 2001 and 2000                                      F-4

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

Consolidated Statements of Cash Flows for the
Years Ended December 31, 2001 and 2000                                      F-7

Notes to Consolidated Financial Statements                                  F-10



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.



                                       14
<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, on December 31, 2001, and their ages,
positions held with the Company, length of time in such positions, and term of
office are set forth below:

 Name and Age          Current Position          Director Since   Officer Since
 ------------          ----------------          --------------   -------------

 M. Lee Hulsebus       Chairman of the Board,       11/11/94          8/31/94
 Age 63                Chief Executive Officer


 Robert S. Muehlberg   President,                    3/11/99          5/14/01
 Age 48                Chief Operating Officer

 Ross S. Seibert       Chief Financial Officer                        2/21/00
 Age 39

 Don L. Arnwine        Director                      3/6/95
 Age 69

 Arthur E. Bradley     Director                      9/26/86
 Age 68

 Thomas E. Glasgow     Director                     11/11/94
 Age 49

 Stephen A McConnell   Director                      5/23/01
 Age 49

         The principal occupations and positions for the past several years of
each of the our executive officers and directors are as follows:

         M. Lee Hulsebus has been in the health care field since 1964. From
January 1990 until he joined Miracor in August 1994, he was the President and
owner of his own health care consulting firm. From 1990 to 1992, Mr. Hulsebus
also served as President and Chief Operating Officer of Sports Support, Inc., a
sports medicine company. From 1988 until 1990, he served as Medical Group
President (worldwide operations) for Teleflex, Inc. For 22 years prior to that,
Mr. Hulsebus was employed by Becton-Dickinson & Co. and C.R. Bard, Inc., both of
which are leading companies in the health care industry. Mr. Hulsebus has served
in the capacity of President/Chief Executive Officer since 1979 for
various companies.

   Robert S. Muehlberg has been President and Chief Operating Officer since May
14, 2001. Prior to joining Miracor he served as President and Chief Executive
Officer of Envision Management, Inc., a company that provided management and
consulting services to the health care industry since 1997. Mr. Muehlberg served
as Chairman and Chief Executive Officer from 1994 until 1997 of Medical Imaging
Centers of America, Inc. (MICA), a company he joined in 1985. Prior to joining
MICA, Mr. Muehlberg held various management positions at International Imaging,
Inc., Chicago, IL and American Medical International (AMI) Clearwater, FL. Mr.
Muehlberg holds a Bachelor's degree in Health Science from the University of
Missouri and a Masters degree in Business Administration from Nova Southeastern
University.

         Ross S. Seibert, CPA, joined the Company in February 2000 as the Chief
Financial Officer. Mr. Seibert was with Deloitte & Touche since 1986 and served
as Senior Manager. He worked with a wide range of clients and has experience
with SEC reporting, mergers and acquisitions, internal controls and information
systems. He received a BS in accounting from Indiana University and an MBA in
finance from San Diego State University.

         Don L. Arnwine has been President of Arnwine Associates of Irving,
Texas, a company he founded to provide specialized advisory services to the
health care industry, since 1988. Mr. Arnwine served as Chairman and Chief
Executive Officer from 1985 until 1988 of Voluntary Hospitals of America (VHA),
a company he joined in 1982. Prior to joining VHA, Mr. Arnwine served as
President and Chief Executive Officer of Charleston Area Medical Center, a
1000-bed regional facility care center in the State of West Virginia. Mr.
Arnwine holds a BS degree in Business Administration from Oklahoma Central State
University and a Masters degree in Hospital Management from Northwestern
University.

                                       15
<PAGE>

         Arthur E. Bradley, DDS has been a practicing dentist since 1961. Dr.
Bradley has been involved for his own account in real estate investments for
twenty years and has been active in oil and gas investments for fifteen years.
Dr. Bradley graduated from the University of Mississippi at Hattiesburg and
obtained his degree in Dentistry from Loyola University Dental School.

         Thomas E. Glasgow is currently the Chairman and CEO of OneSource
Technology, Inc., a NASDAQ listed technical maintenance service and
manufacturing company based in Scottsdale, Arizona and Denver, Colorado. He is
also the owner of Integrated Trade Systems, Inc., a Lombard, Illinois
international logistics software company. He serves on the board of three
publicly traded companies and is active in the venture community. Prior to these
ventures Mr. Glasgow was a Director and Vice-President at Federal Express
Corporation where he served in various senior management capacities for 12
years. He holds an MBA from J.L. Kellogg - Northwestern University.

         Stephen A McConnell has been a Director of the Company since May 2001.
He is the President of Solano Ventures, a firm involved in private capital
investments. He is currently chairman of G-L Industries, LLC, a Salt Lake
City-based manufacturer of wood glu-lam beams used in the construction industry.
He has served, between 1991 and 1997, as Chairman of the Board and majority
stockholder in Mallco Lumber & Building Materials, Inc., a wholesale distributor
of construction lumber and doors. From 1991 to 1995, Mr. McConnell was President
of Belt Perry Associates, Inc., a property tax appeal firm. He was President and
Chief Executive Officer of N-W Group, Inc., a publicly held corporation, from
1985 through 1991. Mr. McConnell presently serves on the boards of Vodavi
Technology, Inc., Mobile Mini, Inc and Capital Title Group, Inc. Mr. McConnell
holds a BA from Harvard College and an MBA from Harvard Business School.


         The information required by this Item, which will be set forth under
the captions "Proposal No. 1- Election of Directors," "Executive Officers" and
"Compliance with Section 16(a) of the Exchange Act" in the Company's definitive
Proxy Statement for the 2002 Annual Meeting of Shareholders, is incorporated
herein by reference.

ITEM 10.  EXECUTIVE COMPENSATION

         The information required by this Item, which will be set forth under
the caption "Executive Compensation" in the Company's definitive Proxy Statement
for the 2002 Annual Meeting of Shareholders, is incorporated herein by
reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item, which will be set forth under the caption
"Voting Securities and Principal Holders Thereof" in the Company's definitive
Proxy Statement for the 2002 Annual Meeting of Shareholders, is incorporated
herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During 2001, no related parties received compensation for general
corporate consulting services. During 2000, two directors received compensation
of $31,000 in aggregate for general corporate consulting services.

         In June 2001, we issued two convertible notes payable for $200,000 and
$75,000 to an officer/director related to the acquisitions of Envision
Healthcare, LLC and Envision Open MRI, LLC, respectively. At the noteholder's
option, the noteholder may elect to convert the outstanding balance of the notes
into shares of the Company's common stock at a conversion price of $0.75. The
notes are interest only at 10% for the first year with the principal to be paid
down during the following two years. The balance of these notes was $275,000 at
December 31, 2001.

         During the third quarter of 2000, we issued $150,000 of 12% convertible
notes payable, due January 15, 2002, to six officers and directors. Upon the
ninth month anniversary of the note, each noteholder may elect to convert all
(but not part) of the note into 83,333 shares of our common stock. The aggregate
payment amount due to the noteholders was $37,500 plus accrued interest due
April 15, 2001, July 15, 2001, October 15, 2001, and January 15, 2002. In April
2001, we issued 56,250 shares of Restricted Rule 144 common stock valued at
$4,078 as consideration for extending each due date by six months. In October
2001, we issued 100,000 shares of Restricted Rule 144 common stock valued at
approximately $8,500 as consideration for extending the due dates of five of the
six notes by an additional twelve months. The balance of these notes was
$143,750 and $150,000 at December 31, 2001 and 2000, respectively.

                                       16
<PAGE>

         In September 1999, we issued $50,000 in principal amount of 10%
promissory notes payable, due March 31, 2000, to two directors and an individual
to finance operations. Pursuant to the loan agreements, total warrants to
purchase 40,000 shares of common stock at an exercise price of $0.625 per share
were issued. In connection with the issuance of the warrants to the individuals,
we are recognizing additional interest expense of $10,938, which is being
amortized over the terms of the loans. During the second quarter of 2000, we
paid $45,000 of the $50,000 short-term promissory notes payable along with
accrued interest payable of $2,785 in the form of $5,000 cash and 120,000 shares
of Restricted Rule 144 common stock. The balance of these notes was $5,000 at
December 31, 2001 and 2000.

         Related to the February 2000 acquisition of Ultra, we issued notes
payable to the principals which were due in variable payments totaling $380,160
plus accrued interest through November 9, 2001. During the year ended December
31, 2000, we paid principal of $62,500 along with accrued interest of $7,603.
The balance of these notes was $317,660 at December 31, 2000. During the first
quarter of the year ended December 31, 2001, we paid principal of $25,676
along with accrued interest of $22,324. During 2001, the purchase transaction
was rescinded pursuant to a settlement agreement. Effective 28, 2001, we
relinquished our holdings in Ultra and cancelled approximately 2.5 million
shares of common stock in return. As a result of this rescinded transaction, The
notes payable associated with the acquisition were cancelled and are not
included in the consolidated financial statements of the Company as of December
31, 2001.(see Part II, Item 7 "Notes to Consolidated Financial Statements" -
Note 2).



                                       17
<PAGE>

                                     PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Reports on Form 8-K We filed current reports on Forms 8-K which were issued on
June 14, 2001 and August 13, 2001.

EXHIBITS

The following is a complete list of Exhibits as part of the Annual Report.
Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601(a) of
Regulation S-B, which are incorporated herein:



                                  EXHIBIT NO.
                                  -----------

1.5   Certificate of Designation with respect to the 6% Cumulative Convertible
      Series A Preferred Stock (1)

3.1   Articles of Incorporation of Gold Probe, Inc. a Utah corporation, filed
      February 6, 1980 (2)

3.2   Certificate of Amendment to the Articles of Incorporation of Gold Probe,
      Inc. filed January 27, 1982 (2)

3.3   Certificate of Amendment to the Articles of Incorporation of Hailey Energy
      Corporation filed October 26, 1986 (2)

3.4   Certificate of Amendment to the Articles of Incorporation of Hailey Energy
      Corporation filed November 2, 1990 (2)

3.5   Certificate of Amendment to the Articles of Incorporation of Hailey Energy
      Corporation filed November 17, 1992 (2)

3.6   Certificate of Amendment to the Articles of Incorporation of Cytoprobe
      Corporation filed May 18, 1995 (3)

3.7   Certificate of Amendment to the Articles of Incorporation of Medical
      Device Technologies, Inc. filed December 14, 1995 (3)

3.8   Certificate of Amendment to the Articles of Incorporation of Medical
      Device Technologies, Inc. filed January 17, 1996 (4)

3.9   Certificate of Amendment to the Articles of Incorporation of Medical
      Device Technologies, Inc. filed January 19, 1996 (4)

3.10  By-Laws of Medical Device Technologies, Inc. (2)

3.11  Certificate of Amendment to the Articles of Incorporation of Medical
      Device Technologies, Inc. filed August 5, 1999. (5)

3.12  By-Laws of Miracor Diagnostics, Inc. dated March, 2000. (5)

4.1   Specimen certificate for 6% Cumulative Convertible Series A Preferred
      Stock (1)

4.2   Form of Representative's Warrant Agreement, including form of Specimen
      Certificate for Representative's Warrant. (1)

4.3   Form of Warrant Agreement dated October 31, 1994 by and between the
      Company and the holders of the 1994 Unit Warrants for the purchase of
      259,375 shares. (2)

4.6   Form of Stock Purchase Warrant dated April 13, 2000 between the Company
      and Swartz Private Equity, LLC exercisable to purchase an aggregate of
      1,360,000 common shares. (5)

4.7   Registration Rights Agreement dated April 13, 2000 between the Company and
      Swartz Private Equity, LLC related to the registration of shares. (5)



                                       18
<PAGE>

4.8   Subscription Agreement dated April 13, 2000 between the Company and Swartz
      Private Equity, LLC relating to the purchase of up to $15,000,0000 of
      securities. (5)

4.9   Investment Agreement dated April 13, 2000 between the Company and Swartz
      Private Equity, LLC relating to the purchase of up to $15,000,0000 of
      securities. (5)

10.1  Agreement and Plan of Merger, dated February 9, 2000. (6)

10.2  Stock Purchase Agreement with MedSource Holdings, Ltd, dated February 9,
      2000. (6)

10.3  Stock Purchase Agreement with Jamac Enterprises, Ltd., dated February 9,
      2000. (6)

10.4  Ultra Settlement Agreement, dated August 10, 2001.

10.5  Equity Purchase Agreement with Envision Open MRI, LLC, dated May 25, 2001.

10.6  Equity Purchase Agreement with Envision Healthcare, LLC, dated May 25,
      2001.

10.7  Asset Purchase Agreement with U.S. Diagnostics, Inc, dated May 29, 2001.

10.8  Asset Purchase Agreement with Woodridge Open MRI, LLC, dated January 18,
      2002.


-------------------------------

(1)   Previously filed as an exhibit to Registration Statement on Form S-1,
      dated June 24, 1996, registration no. 333-02727 .
(2)   Previously filed as an exhibit to Registration Form S-3, dated May 15,
      1996, Registration no. 333-1150.
(3)   Previously filed as an exhibit to the Company's Form 8-K Report dated
      January 15, 1996
(4)   Previously filed as an exhibit to the Company's Form 8-K Report dated
      January 31, 1996
(5)   Previously filed as an exhibit to the Company's Form SB-2, dated June 15,
      2000, Registration no. 333-39406.
(6)   Previously filed as an exhibit to the Company's Annual Report Form 10-KSB
      Report dated April 11, 2001.


                                       19


<PAGE>

                                   SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


MIRACOR DIAGNOSTICS, INC.


      SIGNATURE                        TITLE                            DATE
      ---------                        -----                            ----

/s/ M. Lee Hulsebus        Chairman of the Board,               March 29, 2002
------------------------   Chief Executive Officer
    M. Lee Hulsebus


/s/ Robert S. Muehlberg    President,                           March 29, 2002
------------------------   Chief Operating Officer
    Robert S. Muehlberg


/s/ Ross S. Seibert        Chief Financial Officer              March 29, 2002
------------------------
    Ross S. Seibert

/s/ Don L. Arnwine         Director                             March 29, 2002
------------------------
    Don L. Arnwine


/s/ Arthur E. Bradley      Director                             March 29, 2002
------------------------
    Arthur E. Bradley


/s/ Thomas E. Glasgow      Director                             March 29, 2002
------------------------
    Thomas E. Glasgow


/s/ Stephen A McConnell   Director                             March 29, 2002
------------------------
    Stephen A McConnell


                                       20
<PAGE>


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


The Board of Directors
Miracor Diagnostics, Inc.
San Diego, California

We have audited the accompanying consolidated balance sheets of Miracor
Diagnostics, Inc. and subsidiaries (the "Company") as of December 31, 2001 and
2000, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Miracor Diagnostics,
Inc. and subsidiaries at December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.




By /s/ PARKS, TSCHOPP, WHITCOMB & ORR, P.A.
   ----------------------------------------
       PARKS, TSCHOPP, WHITCOMB & ORR, P.A.



Maitland, Florida
March 20, 2002

                                       F-1

<PAGE>
<TABLE>
                             MIRACOR DIAGNOSTICS, INC. AND SUBSIDIARIES

                                    CONSOLIDATED BALANCE SHEETS

                                     December 31, 2001 and 2000
<CAPTION>

                                                                        2001              2000
                                                                  -------------      -------------
<S>                                                               <C>                <C>
ASSETS
------
Current assets:
     Cash and cash equivalents                                    $    363,478       $    282,337
     Accounts receivable (net of contractual adjustments and
       allowances of $3,669,281 and $2,257,766)                      4,040,179          4,753,010
     Prepaid expenses and other assets                                  28,246             31,585
                                                                  -------------      -------------
               Total current assets                                  4,431,903          5,066,932
                                                                  -------------      -------------

Property and equipment:
     Equipment under capital leases                                  6,121,120          5,262,031
     Machinery and equipment                                           439,164            491,401
     Leasehold improvements                                            771,671            654,270
     Furniture and fixtures                                             66,455             77,174
                                                                  -------------      -------------
                                                                     7,398,410          6,484,876

          Less accumulated depreciation                             (3,699,021)        (2,618,595)
                                                                  -------------      -------------

Net property and equipment                                           3,699,389          3,866,281
                                                                  -------------      -------------
Goodwill                                                             5,740,737          6,286,723
    Less accumulated amortization                                     (458,989)          (340,689)
                                                                  -------------      -------------

                                                                     5,281,748          5,946,034

Other assets                                                           154,842            218,550
                                                                  -------------      -------------
               Total assets                                       $ 13,567,882       $ 15,097,797
                                                                  =============      =============

</TABLE>

See notes to consolidated financial statements.

                                                F-2
<PAGE>
<TABLE>

                            MIRACOR DIAGNOSTICS, INC. AND SUBSIDIARIES

                                   CONSOLIDATED BALANCE SHEETS

                                    December 31, 2001 and 2000
<CAPTION>

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

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
     Accounts payable                                           $    721,642       $  1,061,919
     Accrued expenses                                                763,927            727,611
     Lines of credit                                               1,292,012            917,364
     Notes payable, related parties - current portion                135,208            435,160
     Notes payable - current portion                                 630,781            586,355
     Capital lease obligations - current portion                   1,203,839          1,137,220
                                                                -------------      -------------
               Total current liabilities                           4,747,409          4,865,629

Other liabilities:
     Notes payable, related parties - long term                      288,542             37,500
     Notes payable - long term                                     1,123,873            389,054
     Capital lease obligations - long term                         3,327,165          3,530,687
                                                                -------------      -------------
               Total liabilities                                   9,486,989          8,822,870
                                                                -------------      -------------

Minority interest                                                     24,861            218,913
                                                                -------------      -------------
Commitments and contingencies (note 8)

Stockholders' equity
     Series I convertible preferred stock (247,500 shares
         authorized; 0 issued and outstanding)                            --                 --
     6% cumulative convertible Series A preferred stock,
         and $.01 par value (1,972,500 shares authorized;
         0 shares issued and outstanding)                                 --                 --
     Preferred stock, $.01 par value (10,000,000 shares
         authorized; 0 shares issued and outstanding)                     --                 --
     Common stock, $.15 par value (100,000,000 shares
         authorized; 13,783,865 and 14,039,035 outstanding)        2,067,580          2,105,855
     Warrants                                                        122,750            122,750
     Additional paid-in capital                                   27,320,340         29,573,173
     Deferred stock compensation                                      14,040             52,737
     Accumulated deficit                                         (25,468,678)       (25,798,501)
                                                                -------------      -------------
               Total stockholders' equity                          4,056,032          6,056,014
                                                                -------------      -------------
               Total liabilities and stockholders' equity       $ 13,567,882       $ 15,097,797
                                                                =============      =============



</TABLE>

See notes to consolidated financial statements.

                                               F-3
<PAGE>

                   MIRACOR DIAGNOSTICS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     Years ended December 31, 2001 and 2000

                                                    2001               2000
                                               -------------      -------------

Net patient service revenue                    $  9,344,867       $  8,726,049

Operating expenses                                8,212,782          7,797,311
                                               -------------      -------------

 Income from operations                           1,132,085            928,738

Other income (expense):
  Interest expense                                 (735,886)          (704,623)
  Other income                                          131             58,301
                                               -------------      -------------
Income before minority interest                     396,330            282,416

Minority interest                                   (66,507)          (106,690)
                                               -------------      -------------
Net Income                                     $    329,823       $    175,726
                                               =============      =============

Earnings per share:

Earnings per share-basic                       $       0.02       $       0.01
Earnings per share-diluted                     $       0.02       $       0.01
Weighted average shares outstanding-basic        13,272,926         11,993,979
Weighted average shares outstanding-diluted      13,479,941         12,410,357


See notes to consolidated financial statements.




                                       F-4


<PAGE>

<TABLE>

                                      MIRACOR DIAGNOSTICS, INC.

                                          AND SUBSIDIARIES

                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                               Years ended December 31, 2001 and 2000

 <CAPTION>
                                                                   COMMON STOCK             ADDITIONAL
                                                           ---------------------------       PAID-IN
                                                                SHARES        AMOUNT         CAPITAL
                                                           -------------  ------------    ------------
<S>                                                          <C>          <C>              <C>
Balance, January 1, 2000                                      7,980,956   $ 1,197,143      27,729,446

Common stock issued for compensation, interest,
     services and principal of trade notes payable            2,678,899       401,835         541,179

Common stock sold, net of the associated offering costs         591,030        88,654         102,346

Restricted Rule 144 common stock issued for principal
     and accrued interest notes payable - related parties       120,000        18,000          24,785

Restricted Rule 144 common stock issued for principal
     and accrued interest on capital lease obligation           125,000        18,750          30,078

Restricted Rule 144 common stock issued
     for acquisition of Ultra Open MRI Holding
     Corporation                                              2,534,400       380,160       1,140,480

Common Stock issued from the Employee Incentive Stock
     Option Plan and Deferred Stock Compensation Plan             8,750         1,313           4,859

Accrued stock compensation                                            -             -               -

Net income                                                            -             -               -
                                                           ------------  ------------    ------------
Balance, December 31, 2000                                  14,039,035   $ 2,105,855      $29,573,173
                                                           ============  ============    ============
</TABLE>
(continued below)

<TABLE>
<CAPTION>
                                                                            DEFERRED       ACCUMULATED
                                                              WARRANTS    COMPENSATION       DEFICIT          TOTAL
                                                           -------------  -------------   -------------   -----------
<S>                                                        <C>            <C>             <C>             <C>
Balance, January 1, 2000                                   $    122,750   $     30,599    $(25,974,227)   $3,105,711

Common stock issued for compensation, interest,
     services and principal of trade notes payable                    -              -               -       943,014

Common stock sold, net of the associated offering costs               -              -               -       191,000

Restricted Rule 144 common stock issued for principal
     and accrued interest on notes payable - related parties          -              -               -        42,785

Restricted Rule 144 common stock issued for principal
     and accrued interest on capital lease obligation                 -              -               -        48,828

Restricted Rule 144 common stock issued
     for acquisition of Ultra Open MRI Holding Corporation            -              -               -     1,520,640

Common Stock issued from the Employee Incentive Stock
     Option Plan and Deferred Stock Compensation Plan                 -         (5,156)              -         1,016

Accrued stock compensation                                            -         27,294               -        27,294

Net income                                                            -              -         175,726       175,726
                                                           -------------  -------------   -------------   -----------
Balance, December 31, 2000                                 $    122,750   $     52,737    $(25,798,501)   $6,056,014
                                                           =============  =============   =============   ===========

See notes to consolidated financial statements.

                                                 F-5

</TABLE>
<PAGE>

<TABLE>

                                      MIRACOR DIAGNOSTICS, INC.

                                          AND SUBSIDIARIES

                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                               Years ended December 31, 2001 and 2000

 <CAPTION>
                                                                  COMMON STOCK            ADDITIONAL
                                                           ----------------------------    PAID-IN
                                                              SHARES        AMOUNT         CAPITAL
                                                           -------------  -------------  -------------
<S>                                                          <C>          <C>            <C>
Balance, January 1, 2001                                     14,039,035   $  2,105,855   $ 29,573,173

Common stock issued for compensation, interest,
     services and principal of trade notes payable            2,161,395        324,210        (25,231)

Common stock sold                                                83,335         12,500          2,500

Common stock issued from the Employee Incentive Stock
     Option Plan and Deferred Stock Compensation Plan            34,500          5,175         46,194

Common stock cancelled related to the relinquishing of
     interest in Ultra Open MRI Holding Corporation          (2,534,400)      (380,160)    (2,276,296)

Accrued stock compensation                                           --             --             --

Net income                                                           --             --             --
                                                           -------------  -------------  -------------
Balance, December 31, 2001                                   13,783,865   $  2,067,580   $ 27,320,340
                                                           =============  =============  =============
</TABLE>
(continued below)

<TABLE>
<CAPTION>
                                                                           DEFERRED        ACCUMULATED
                                                             WARRANTS     COMPENSATION       DEFICIT         TOTAL
                                                           -------------  -------------   -------------   ------------
<S>                                                        <C>            <C>             <C>             <C>
Balance, January 1, 2001                                   $    122,750   $     52,737    $(25,798,501)   $ 6,056,014

Common stock issued for compensation, interest,
     services and principal of trade notes payable                   --             --              --        298,979

Common stock sold                                                    --             --              --         15,000

Common stock issued from the Employee Incentive Stock
     Option Plan and Deferred Stock Compensation Plan                --        (51,369)             --             --

Common stock cancelled related to the relinquishing of
     interest in Ultra Open MRI Holding Corporation                  --             --              --     (2,656,456)

Accrued stock compensation                                           --         12,672              --         12,672

Net income                                                           --             --         329,823        329,823
                                                           -------------  -------------   -------------   ------------
Balance, December 31, 2001                                 $    122,750   $     14,040    $(25,468,678)   $ 4,056,032
                                                           =============  =============   =============   ===========

See notes to consolidated financial statements.

                                                      F-6
</TABLE>

<PAGE>
<TABLE>

                                      MIRACOR DIAGNOSTICS, INC.

                                          AND SUBSIDIARIES

                                CONSOLIDATED STATEMENTS OF CASH FLOWS

                               Years ended December 31, 2001 and 2000
<CAPTION>
                                                                                     2001              2000
                                                                                 ------------      ------------
<S>                                                                              <C>               <C>
Cash flows from operating activities:
     Net income                                                                  $   329,823       $   175,726
     Adjustments to reconcile net income to net cash
         provided by operating activities:
           Stock paid for services and interest                                      260,211           809,604
           Compensation recognized relating to
              accrued employee stock grants and warrants                              12,671            27,294
           Minority interest                                                          66,507           106,690
           Depreciation and amortization                                           1,048,508           942,142
           Gain on refinance of capital lease obligation                                   -           (23,558)
           Loss on disposal of fixed assets                                                -             4,680
           Changes in assets and liabilities excluding net assets acquired:
              Accounts receivable                                                   (321,423)       (1,214,787)
              Other assets                                                           (42,058)           85,120
              Accounts payable and accrued expenses                                 (381,231)          (51,935)
                                                                                 ------------      ------------
                     Net cash provided by operating activities                       973,008           860,976
                                                                                 ------------      ------------

Cash flows from investing activities:
     Purchase of property and equipment                                              (58,034)         (203,545)
     Cash acquired in purchase of companies                                           67,352             1,083
     Cash forfeited in Ultra settlement                                              (36,615)                -
                                                                                 ------------      ------------

                     Net cash used in investing activities                           (27,297)         (202,462)
                                                                                 ------------      ------------

Cash flows from financing activities:
     Increase in lines of credit                                                     448,534           337,580
     Proceeds from notes payable, related parties                                          -           150,000
     Proceeds from notes payable                                                     150,000            65,000
     Principal payments on notes payable, related parties                            (31,926)          (67,500)
     Principal payments on notes payable                                            (612,512)         (393,430)
     Principal payments on capital lease obligations                                (833,666)         (801,076)
     Proceeds from issuing common stock                                               15,000           226,732
                                                                                 ------------      ------------

           Net cash used in financing activities                                    (864,570)         (482,694)
                                                                                 ------------      ------------

Net increase in cash and cash equivalents                                             81,141           175,820

Cash and cash equivalents, beginning of year                                         282,337           106,517
                                                                                 ------------      ------------

Cash and cash equivalents, end of year                                           $   363,478       $   282,337
                                                                                 ============      ============
</TABLE>

See notes to consolidated financial statements.

                                                 F-7
<PAGE>

                               MIRACOR DIAGNOSTICS, INC.

                                    AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                         Years ended December 31, 2001 and 2000

<TABLE>
<CAPTION>


                                                               2001            2000
                                                           -----------     -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<S>                                                        <C>             <C>
PAYMENTS FOR:
     Interest                                              $  741,334      $  587,635
     Income taxes                                          $      800      $      900

SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION:

STOCK ISSUED FOR:
     COMPENSATION AND SERVICES:
     Legal, professional and employee services             $  227,937      $  682,242
     Public relations and marketing expense                       -            64,314
     Directors' fees                                           16,043          26,896
     Interest expense on notes payable                         16,231          36,152
                                                           -----------     -----------
                                                              260,211          809,604
                                                           -----------     -----------
     OTHER:
     Principal payments on notes payable                       38,768          99,712
     Capitalized costs - Ultra/Swartz offering                    -            29,010
     Other assets                                                 -             4,688
                                                           -----------     -----------
                                                           $  298,979      $  943,014
                                                           ===========     ===========
</TABLE>

During the first quarter of 2000, the Company acquired the net assets of Ultra
Open MRI Holding Corporation ("Ultra") in exchange for 2,534,400 shares of
Restricted Rule 144 common stock and a note payable of $380,160. During 2001,
the transaction was rescinded pursuant to a settlement agreement. The Company
relinquished its holdings in Ultra, cancelled the 2,534,400 shares of the
Company's common stock and was released of the outstanding note payable
obligation in return (see note 2).

The net assets acquired were as follows:

<TABLE>
<CAPTION>
  <S>                                     <C>               <C>                          <C>
  Cash                                    $      1,083      Common stock issued          $  1,520,640
  Accounts receivable                          814,917      Due to shareholders               380,160
  Property and equipment                       970,025      Direct costs of acquisition        92,646
  Other assets                                  31,963      Minority interest                 112,223
  Accounts payable and other liabilities       (93,916)     Goodwill                       (1,544,553)
  Capital lease obligations                   (943,135)
  Notes payable                               (146,421)
  Lines of credit                              (73,400)
                                          -------------                                  -------------
                                          $    561,116                                   $    561,116
                                          =============                                  =============
</TABLE>

During the second quarter of 2001, the Company acquired the net assets of Laguna
Niguel MRI, Inc. in exchange for a note payable of $1,250,000, the net assets of
Envision Healthcare, LLC in exchange for a convertible note payable of $200,000
and the net assets of Envision Open MRI, LLC in exchange for a convertible note
payable of $75,000 (see note 2).

                                       F-8

<PAGE>

                           MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Years ended December 31, 2001 and 2000



The net assets acquired for the above three acquisitions were as follows:

<TABLE>
<CAPTION>
  <S>                                     <C>               <C>                                  <C>
  Cash                                    $     67,352      Note Payable to a finance company    $  1,250,000
  Accounts receivable                          837,694      Due to officer/director                   275,000
  Property and equipment                     1,024,646      Direct costs of acquisition                54,653
  Other assets                                   5,361      Minority interest                           6,640
  Accounts payable and other liabilities      (257,794)     Goodwill                                 (998,566)
  Capital lease obligations                   (992,021)
  Notes payable                                (97,511)
                                          -------------                                          -------------
                                          $    587,727                                           $    587,727
                                          =============                                          =============
</TABLE>
In 2001, the Company entered into three capital lease agreements with a
financing company. One of the agreements finances medical equipment with a
purchase price of $78,970 over a sixty-seven month period with interest of
11.54% and a monthly payment of $1,654. The other agreement finances leasehold
improvements of $75,500 over a sixty-seven month period with interest of 11.55%
and a monthly payment of $1,622. The third agreement finances medical equipment
with a purchase price of $1,113,000 over a sixty-seven month period with
interest of 11.54% and a monthly payment of $23,615.

In 2001, the Company entered into a capital lease agreement with a financing
company. The agreement finances medical equipment with a purchase price of
$40,800 over a Sixty month period with interest of 5.81% and a monthly payment
of $785.

During the first quarter of 2001, the Company issued a $150,000 note payable at
a 15% interest rate, originally due August 28, 2001, to a corporation. The
noteholder was awarded warrants to purchase 400,000 shares of common stock at an
exercise price of $0.219 per share. On August 28, 2001, the Company awarded the
noteholder warrants to purchase 75,000 shares of common stock at an exercise
price of $0.219 per share as consideration for extending the due date by three
months. During November 2001, the note was paid in full.

During the years ended December 31, 2001 and 2000, deferred compensation expense
of $12,672 and $27,294, respectively, were recorded relating to accrued employee
stock grants in order to value such shares at the estimated fair market value at
the date of grant.

Pursuant to employee agreements, 34,500 shares of accrued employee common stock
grants were issued and 536 shares of accrued employee common stock grants were
cancelled during the year ended December 31, 2001. Accordingly, deferred stock
compensation of $51,369 was reclassified to common stock and additional paid-in
capital during the year ended December 31, 2001.

Pursuant to employee agreements, 7,500 shares of accrued employee common stock
grants were issued in May of 2000. Accordingly, deferred stock compensation of
$5,156 was reclassified to common stock and additional paid-in capital during
May of 2000.

During the first quarter of 2000, the Company refinanced a capital lease
obligation in which the Company issued 125,000 shares of Restricted Rule 144
common stock valued at $48,828, recognized a gain of $23,558 and obtained a new
capital lease payable of $425,258. The new capital lease obligation has an
annual interest rate of 12.5% and monthly payments of $11,303 for 48 months.

During the third quarter of 2000, the Company issued $150,000 of 12% convertible
notes payable, due January 15, 2002, to six officers and directors. Upon the
nine month anniversary of the note, each noteholder may elect to convert all
(but not part) of the note into 83,333 shares of the Company's common stock. The
amount payable to the noteholders in aggregate is $37,500 plus accrued interest
originally due April 15, 2001, July 15, 2001, October 15, 2001, and January 15,
2002. In April of 2001, the Company issued 56,250 shares of Restricted Rule 144
common stock valued at $4,078 as consideration for extending each due date by
six months. In October of 2001, the Company extended five of the six notes an
additional twelve months. The balance of these notes was $143,750 and 150,000 at
December 31, 2001 and 2000.

See notes to consolidated financial statements.

                                       F-9

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    ------------------------------------------

(a) DESCRIPTION OF BUSINESS


Miracor Diagnostics, Inc. and subsidiaries (the "Company") is a public company
incorporated in Utah on February 6, 1980 and headquartered in San Diego,
California.

Prior to 1992, the Company was in the exploration and production of
hydrocarbons business. As of June 1, 1992, the Company re-entered the
development stage. Effective January 1, 1994, the Company completed the
divestiture of all oil and gas properties and was no longer in the hydrocarbon
business. Since that time, the Company has been exclusively a medical based
company.

Between 1994 and 1998, the Company engaged in the development of the following
innovative medical devices:

         1.       The Fluid Alarm System (FAS) monitored the integrity of
                  infection control barriers, such as surgical gloves and gowns
                  worn during medical procedures. The Company received FDA
                  clearance for the FAS during the year ended December 31, 1995.
                  We have the patent licensing rights through 2005 with an
                  option to extend such rights through the life of the patent,
                  2010.

         2.       The Cell Recovery System (CRS), was a cell "brushing" and
                  retrieval system that used an automated biopsy brush for the
                  collection of specimen cells for diagnostic purposes,
                  primarily (but not limited to) cancer detection. The Company
                  received FDA clearance for the CRS in March 1996. The Company
                  initiated further clinical trials on the CRS in 1997. We own
                  50% of the patent. Additionally, we have the patent licensing
                  rights through the life of the patent, 2008.

In 1998, coincident with the purchase of Vision Diagnostics, Inc. and
Affiliates, the Company recorded impairment losses associated with the FAS and
the CRS licenses. However, the Company may elect to reintroduce or sell either
product at a later date although there are no plans to do so at this time. The
Company's accumulated deficit primarily arose while in the hydrocarbon and
medical device businesses.

In 1998, the Company redefined our business focus from medical devices to
medical diagnostic imaging services and emerged as an operating company through
the acquisition of medical diagnostic imaging centers in Orlando and
Jacksonville, Florida, Toledo, Ohio, and Oak Brook, Illinois.

On February 9, 2000, the Company closed the acquisition of 80% of three centers
located in Palm Harbor, St. Petersburg and Tampa, Florida as well as the holding
company, Ultra Open MRI Holding Corporation ("Ultra"). During 2001, the
transaction was rescinded pursuant to a settlement agreement. Effective February
28, 2001, the Company relinquished its holdings in Ultra and cancelled
approximately 2.5 million shares of common stock in return, described in note 2.

During June of 2001, the Company acquired three MRI centers located in
California. Laguna Niguel MRI, Inc. is an MRI center located in Laguna Niguel,
California. Envision Healthcare, LLC, is an MRI center located in Long Beach,
California. The Company also acquired 51% of Envision Open MRI, LLC, an MRI
center located in Newport Beach, California.

On October 1, 2001 we opened a start-up MRI center located in Perrysburg, Ohio.
As of December 31, 2001, the Company provides medical diagnostic imaging
services through the operation of its eight MRI centers. Additionally, the
Company identified suitable acquisition targets to position the Company for
growth.


                                      F-10
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(1) CONTINUED
    ---------

(b) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is being provided on a
straight line basis over the estimated useful lives of the related assets which
range from three to nine years.

(c) INCOME TAXES

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes", (SFAS No. 109). This
statement employs an asset and liability approach for financial accounting and
reporting of deferred income taxes. Generally, SFAS No. 109 allows for
recognition of deferred tax assets in the current period for the future benefit
of net operating loss carryforwards and items for which expenses have been
recognized for financial statement purposes but will be deductible in future
periods. A valuation allowance is recognized if, on the weight of available
evidence, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.

(d) CASH FLOWS

For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with an original maturity of three months or less to be
cash equivalents.

(e) REVENUE RECOGNITION

During 2001 and 2000, the principal source of revenue is from diagnostic imaging
which is recognized as performed, net of contractual adjustments. The Company is
presently operating in this one business segment and only in the United States.

(f) FINANCIAL INSTRUMENTS FAIR VALUE, CONCENTRATION OF BUSINESS AND CREDIT RISKS

The carrying amount reported in the balance sheet for cash, accounts receivable,
accounts payable and accrued expenses approximates fair value because of the
immediate or short-term maturity of these financial instruments. The carrying
amount reported in the accompanying balance sheet for notes payable approximates
fair value because the actual interest rates do not significantly differ from
current rates offered for instruments with similar characteristics. Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist principally of accounts receivable. The Company operates and
grants credit to customers in California, Florida, Illinois, and Ohio. In
addition, the Company files claims with numerous insurance carriers, managed
care groups, Medicare and Medicaid located throughout the United States.

Consequently, the Company's ability to collect the amounts due from customers,
managed care groups, insurance companies and government agencies may be affected
by economic fluctuation and governmental regulations in the healthcare industry.

(g) LONG-LIVED ASSETS

The Company periodically evaluates the recoverability of its long-lived assets
based on expected undiscounted cash flows and will recognize impairment of the
carrying value of long-lived assets, if any is indicated, based on the fair
value of such assets.

                                      F-11

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(1) CONTINUED
    ---------

(h) USE OF ESTIMATES

Management of the Company has made certain estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these financial statements in conformity with
accounting principles generally accepted in the United States of America. Actual
results could differ from those estimates.

(i) EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net income available to common
stockholders by the weighted average common shares outstanding for the period.
Diluted earnings per share is computed giving effect to all potentially dilutive
common shares. Potentially dilutive common shares may consist of incremental
shares issuable upon the exercise of stock options, adjusted for the assumed
repurchase of the common stock, at the average market price, from the exercise
proceeds and also may include incremental shares issuable in connection with
convertible securities. The following table sets forth the computations of basic
and diluted earnings per share for the year ended December 31, 2001 and 2000:


                                                  2001            2000
                                              ------------    ------------
Basic earnings per share:
Net income available to common shareholders   $   329,823     $   175,726
                                              ------------    ------------
Weighted average shares outstanding            13,272,926      11,993,979

Basic earnings per share                      $      0.02     $      0.01
                                              ============    ============

Diluted earnings per share:
Net income available to common shareholders   $   329,823    $    175,726
                                              ------------    ------------
Adjusted net income available to common
   shareholders assuming conversion               329,823         175,726
                                              ------------    ------------

Weighted average shares outstanding            13,272,926      11,993,979

Effect of dilutive securities:
    Warrants                                      189,515       350,546
    Employee stock options                             --        25,002
    Employee stock-based compensation awards       17,500        40,810
                                              ------------  ------------
Adjusted weighted average shares outstanding
    and assumed conversions                    13,479,941    12,410,357
                                              ============  ============

Diluted earnings per share                    $      0.02   $      0.01
                                              ============  ============

Options and warrants to purchase 1,528,894 shares of common stock, at prices
ranging from $0.20 to $28.00 per share, were outstanding during the year but not
included in the December 31, 2001 computations of diluted earnings per share,
because the exercise prices were greater than the average market price of the
common shares. The options and warrants, which expire on dates ranging from
August 31, 2002 to August 30, 2010, were still outstanding at December 31, 2001.

Options and warrants to purchase 863,266 shares of common stock, at prices
ranging from $0.20 to $28.00 per share, were outstanding during the year but not
included in the December 31, 2000 computations of diluted earnings per share,
because the exercise prices were greater than the average market price of the
common shares.




                                      F-12
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000


(j) RECLASSIFICATION

Certain amounts in the 2000 Financial Statements have been reclassified to
conform with the 2001 presentation.

(2) ACQUISITIONS
    -------------

During 1998, the Company acquired either the stock or substantially all of
the assets and liabilities of Vision Diagnostics, Inc. and Affiliates
("Vision"). Vision was in the business of providing medical diagnostic services.
The affiliated group of companies includes Vision Diagnostic, Inc., Regional MRI
of Orlando, Inc., Regional MRI of Jacksonville, Inc. and Regional MRI of Toledo,
Inc and West Regional MRI Limited Partnership. This acquisition included medical
diagnostic imaging centers in Orlando and Jacksonville, Florida, Toledo, Ohio,
and Oak Brook, Illinois.

On February 9, 2000, the Company acquired 80% ownership in Ultra Open MRI
Holding Corporation with a combination of 20% in the form of a payable and 80%
in Restricted Rule 144 common stock. The purchase price was $1,900,800 and
goodwill associated with this transaction was recorded at $1,544,553 which
included direct costs associated with the purchase. Total assets were
approximately $1.8 million and total liabilities were approximately $1.3 million
as of February 9, 2000. The notes payable to the principals were due in variable
payments totaling $380,160 plus accrued interest through November 9, 2001.
During the year ended December 31, 2000, the Company paid principal of $62,500
along with accrued interest of $7,603. The balance of these notes was $317,660
at December 31, 2000. During the first quarter of the year ended December 31,
2001, the Company paid principal of $25,676 along with accrued interest of
$22,324. The notes payable associated with the acquisition were cancelled and
are not included in the consolidated financial statements of the Company as of
December 31, 2001.

During 2001, the Ultra purchase transaction was rescinded pursuant to a
settlement agreement. Effective February 28, 2001, the Company relinquished its
holdings in Ultra and cancelled 2,534,400 shares of the Company's common stock
in return. As a result of this rescinded transaction, common stock and
additional paid-in capital were reduced by $2,656,456. The revenues and expenses
of Ultra for the two month period ended February 28, 2001 were $695,327 and
$453,893 respectively and are included in the Company's consolidated financial
statements. The assets and liabilities of Ultra as well as related notes
payable, goodwill associated with the acquisition, and all other Ultra related
balances are not included in the consolidated financial statements of the
Company as of December 31, 2001. Resulting from the Ultra settlement, the
weighted average number of shares outstanding computations for the year ended
December 31, 2001 include the cancellation of the 2,534,400 common shares as of
February 28, 2001.

The principals' share of the shareholders' capital had been reflected as a
minority interest on the accompanying consolidated balance sheet at December 31,
2000. The principals' share of the corporation's net income has been presented
as minority interest share of income in the accompanying consolidated statements
of operations for the years ended December 31, 2001 and 2000.

The Company acquired three MRI centers located in California during June 2001.
All three acquisitions were accounted for using the purchase method of
accounting.

On June 1, 2001, the Company acquired Laguna Niguel MRI, Inc., an MRI center
located in Laguna Niguel, California. The acquisition was funded via third party
financing. The purchase price was $1,250,000 and goodwill associated with the
transaction was recorded at $906,793 which included direct costs associated with
the purchase. Total assets were approximately $575,000 and total liabilities
were approximately $177,000. The note payable to the third party, along with
accrued interest is payable over 5 years (see note 5).

                                      F-13
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(2) CONTINUED
    ---------

On June 1, 2001, the Company acquired Envision Healthcare, LLC, an MRI center
located in Long Beach, California. The center was acquired from a
director/officer of the Company. The acquisition was funded via seller's
financing. The purchase price was $200,000 and goodwill associated with the
transaction was recorded at $84,773. Total assets were approximately $803,500
and total liabilities were approximately $688,000. The note payable to the
seller, along with accrued interest is payable over 3 years (see note 6).

On June 1, 2001, the Company acquired 51% of Envision Open MRI, LLC, an MRI
center located in Newport Beach, California. The center was acquired from a
director/officer of the Company. The acquisition was funded via seller's
financing. The purchase price was $75,000 and goodwill associated with the
transaction was recorded at $7,000. Total assets were approximately $558,000 and
total liabilities were approximately $426,000. The note payable to the seller,
along with accrued interest is payable over 3 years (see note 6). The remaining
minority principal's share of the shareholders' capital had been reflected as a
minority interest on the accompanying consolidated balance sheet at December 31,
2001. This principal's share of the center's net income has been presented as
minority interest share of income in the accompanying consolidated statements of
operations for the year ended December 31, 2001.

Had the acquisitions occurred January 1, 2000, consolidated net revenue for the
year ended December 31, 2000 would have been approximately $11.2 million, net
income would have been approximately $252,000 and net income per share would
have been $0.01. These pro forma results are unaudited.

Had the acquisitions occurred January 1, 2001, consolidated net revenue for the
year ended December 31, 2001 would have been approximately $10.4 million, net
income would have been approximately $550,000 and net income per share would
have been $0.04. These pro forma results are unaudited.

(3) GOODWILL
    --------

In June 2001, the Financial Accounting Standards Board (FASB) approved SFAS No.
142, "Goodwill and Other Intangible Assets." SFAS No. 142 requires companies to
cease amortizing goodwill and other intangible assets with indefinite lives
after December 31, 2001. During the years ended December 31, 2001 and 2000, the
Company did amortize goodwill the basis noted below (see note 16 for the impact
to the Company related to adoption of this Statement).

In connection with the Vision Diagnostics Inc. and Ultra acquisitions,
consideration paid exceeded the estimated fair value of the assets acquired
(including estimated liabilities assumed as part of the transaction) by
approximately $6,100,000. The excess of the consideration paid over the fair
value of the net assets acquired has been recorded as goodwill and was amortized
on a straight line basis over 40 years. During 2001, the Ultra
transaction was rescinded pursuant to a settlement agreement. Effective February
28, 2001, the Company relinquished its holdings in Ultra and cancelled
approximately 2.5 million shares of the Company's common stock in return.
Goodwill associated with this acquisition of $1,544,553 is not included in the
consolidated financial statements of the Company as of December 31, 2001.

                                      F-14
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(3) CONTINUED
    ---------

In connection with the 2001 acquisitions of Laguna Niguel MRI, Inc., Envision
Open MRI, LLC and Envision Healthcare, LLC consideration paid exceeded the
estimated fair value of the assets acquired (including estimated liabilities
assumed as part of the transaction) by approximately $998,566. The excess of the
consideration paid over the fair value of the net assets acquired has been
recorded as goodwill which was being amortized on a straight line basis over 20
years.

In connection with the transitional goodwill impairment evaluation, Statement
142 will require the Company to perform an assessment of whether there is an
indication that goodwill (and equity-method goodwill) is impaired as of the date
of adoption. To accomplish this the Company must identify its reporting units
and determine the carrying value of each reporting unit by assigning the assets
and liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The Company will then have up to six
months from the date of adoption to determine the fair value of each reporting
unit and compare it to the reporting unit's carrying amount. To the extent a
reporting unit's carrying amount exceeds it fair value, an indication exists
that the reporting unit's goodwill may be impaired and the Company must perform
the second step of the transitional impairment test. In the second step, the
Company must compare the implied fair value of the reporting unit's goodwill,
determined by allocating the reporting unit's fair value to all of its assets
(recognized and unrecognized) and liabilities in a manner similar to a purchase
price allocation in accordance with Statement 141, to its carrying amount, both
of which would be measured as of the date of adoption. This second step is
required to be completed as soon as possible, but no later than the end of the
year of adoption. Any transitional impairment loss will be recognized as the
cumulative effect of a change in accounting principal in the Company's statement
of earnings.

As December 31, 2001, the Company has unamortized goodwill
in the amount of $5,281,748, which will be subject to the transition provisions
of Statement 142. Amortization expense related to goodwill was $153,564 and
$153,400 for the years ended December 3, 2001 and 2000, respectively. Because of
the extensive effort needed to comply with adopting Statement 142, it is not
practicable to reasonably estimate the impact of adopting this Statement on the
Company's financial statements at the date of this report, including whether any
transitional impairment losses will be required to be recognized as the
cumulative effect of a change in accounting principal.

(4) LINE OF CREDIT
    --------------

The Company has a line of credit with a finance company at prime plus 3% under
which the Company may borrow up to $1,500,000 or the "borrowing base" as
defined. Balance due December 2002, renewable for consecutive one-year periods.
At December 31, 2001 and 2000, the outstanding balance was $1,292,012 and
$848,723, respectively.

The Company had two lines of credit with two banks. At December 31, 2000, the
outstanding balance was $68,641. As these lines of credit relate to Ultra, they
are no longer obligations of the Company and they have not been included in the
Company's consolidated financial statements as of December 31, 2001 (see note
2).


                                      F-15

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(5) NOTES PAYABLE
    -------------
Notes payable consisted of the following at December 31:

<TABLE>
<CAPTION>

                                                                                       2001            2000
                                                                                   ------------   ------------
   <S>                                                                             <C>            <C>
   Note payable to a finance company, interest at 11.23%, monthly payment of
   $29,357, due May 2006                                                           $ 1,222,249             --

   Note payable to individuals, interest at 8.5%, quarterly payments of
   $41,665, due September 2002                                                         150,532        299,031

   Note payable to a finance company, interest at 10%, monthly payments of
   $10,000, paid off in February 2002.                                                  85,577        141,749

   Note payable to a finance company, interest at 10.5%, monthly payments of
   $2,975, due August 2004                                                              82,262             --

   Note payable to a finance company, interest at 10.84%, monthly payments of
   $1,434, due December 2005                                                            56,007         66,159

   Note payable to a finance company, interest at 10.5%, monthly payments of
   $2,150, due March 2004                                                               51,488         70,761

   Note payable to a bank, interest at 10.5%, monthly payments of $3,027,
   due October 2002                                                                     31,561         60,257

   Note payable to an individual, interest at 2.79%, monthly payments of $2,500,
   due December 2002                                                                    29,553         58,295

   Note payable to an individual, monthly payments of $5,000                            24,813         74,570

   Note payable to bank, interest at 12%, monthly payments of $5,283, due
   April 2002                                                                           20,612         77,748

   Note payable to a bank, interest at 4% above discount rate, quarterly
   payments of $10,724, paid in full in 2001                                                --         46,555

   Various notes payable to banks, interest ranging from 8% to 13.9%.  These
   notes relate to Ultra and are no longer obligations of the Company (see note 8)          --         80,284

                                                                                   ------------   ------------
                                                                                   $ 1,754,654    $   975,409

   Less current portion                                                               (630,781)      (586,355)
                                                                                   ------------   ------------
   Long term portion                                                               $ 1,123,873    $   389,054
                                                                                   ============   ============


</TABLE>


                                      F-16
<PAGE>

                           MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000


(5) CONTINUED
    ---------
At December 31, 2001, future minimum annual principal payments on the notes
payable are as follows:

                        Year-ending December 31,
                        ------------------------
                                  2002                           $  630,781
                                  2003                              321,711
                                  2004                              326,485
                                  2005                              332,924
                                  2006                              142,753
                                                                 -----------
                                                                 $1,754,654
                                                                 ===========


(6) NOTES PAYABLE TO RELATED PARTIES
    --------------------------------

In September 1999, the Company issued $50,000 in principal amount of 10%
short-term promissory notes payable, due March 31, 2000, to two directors and an
individual to finance operations. The individual lenders, including the
directors, were awarded total warrants to purchase 40,000 shares of common stock
at an exercise price of $0.625 per share. In connection with the issuance of the
warrants, the Company is recognizing additional interest expense of $10,938,
which is being amortized over the terms of the loans. During the second quarter
of 2000, the Company paid $45,000 of these $50,000 related party short-term
promissory notes payable along with accrued interest payable of $2,785 in the
form of $5,000 cash and 120,000 shares of Restricted Rule 144 common stock. The
balance of these notes was $5,000 at December 31, 2001 and 2000.

Related to the February 2000 acquisition of Ultra, the Company issued notes
payable to the principals which were due in variable payments totaling $380,160
plus accrued interest through November 9, 2001. During the year ended December
31, 2000, the Company paid principal of $62,500 along with accrued interest of
$7,603. The balance of these notes was $317,660 at December 31, 2000. During the
first quarter of the year ended December 31, 2001, the Company paid principal of
$25,676 along with accrued interest of $22,324. During 2001, the purchase
transaction was rescinded pursuant to a settlement agreement. Effective February
28, 2001, the Company relinquished its holdings in Ultra and cancelled
approximately 2.5 million shares of common stock in return. The notes payable
associated with the acquisition were cancelled and are not included in the
consolidated financial statements of the Company as of December 31, 2001 (see
note 2).

During the third quarter of 2000, the Company issued $150,000 of 12% convertible
notes payable, due January 15, 2002, to six officers and directors. Upon the
ninth month anniversary of the note, each noteholder may elect to convert all
(but not part) of the note into 83,333 shares of the Company's common stock. The
aggregate payment amount due to the noteholders was $37,500 plus accrued
interest due April 15, 2001, July 15, 2001, October 15, 2001, and January 15,
2002. In April 2001, the Company issued 56,250 shares of Restricted Rule 144
common stock valued at $4,078 as consideration for extending each due date by
six months. In October 2001, the Company issued 100,000 shares of Restricted
Rule 144 common stock valued at approximately $8,500 as consideration for
extending the due dates of five of the six notes by an additional twelve months.
The balance of these notes was $143,750 and $150,000 at December 31, 2001 and
2000, respectively,

In June 2001, the Company issued two convertible notes payable for $200,000 and
$75,000 to an officer/director related to its acquisition of Envision
Healthcare, LLC and Envision Open MRI, LLC, respectively. At the noteholder's
option, the noteholder may elect to convert the outstanding balance of the notes
into shares of the Company's common stock at a conversion price of $0.75. The
notes are interest only at 10% for the first year with the principal to be paid
down during the following two years. The balance of these notes was $275,000 at
December 31, 2001.


                                      F-17
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(7) LEASES
    ------

The Company is currently leasing its MRI machines under capital lease agreements
and its offices under operating leases which expire at various dates.

At December 31, 2001, future minimum annual rental commitments under
noncancellable lease obligations are as follows:

<TABLE>
<CAPTION>
                                                                       Capital           Operating
                        Year-ending December 31,                        Leases             Leases
                        ------------------------                     -----------         -----------
                               <S>                                   <C>                 <C>
                                  2002                               $1,563,598             475,573
                                  2003                                1,574,980             354,189
                                  2004                                1,093,481             349,017
                                  2005                                  615,262             230,278
                                  2006                                  373,541             103,827
                               Thereafter                               192,014             286,540
                                                                     -----------         -----------

      Total minimum lease payments                                    5,412,876          $1,799,424
      Less amounts representing interest (at rates of 4.2% to                            ===========
      12.92%)                                                           881,872
                                                                     -----------

      Present value of net minimum lease payments                     4,531,004

          Less current portion                                        1,203,839
                                                                     -----------

      Capital lease obligations - long term                          $3,327,165
                                                                     ===========
</TABLE>

Rent expense for operating leases, including month to month leases, was $509,975
and $405,862 for the years ended December 31, 2001 and 2000, respectively.

                                      F-18
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(8) COMMITMENTS AND CONTINGENCIES
    -----------------------------

EMPLOYEE AGREEMENTS

In August 1994, the Company entered into a severance agreement with the Chief
Executive Officer. The severance agreement provides, among other things, that in
the event a change in control of the Company occurs or the Chief Executive
Officer is involuntarily terminated, suffers a disability while employed by the
Company or dies while employed by the Company, then the Chief Executive Officer
is entitled to receive certain benefits from the Company. Such benefits may
include some or all of the following: an amount based on the base salary as
provided for in the employment agreement; an amount based on the bonus paid or
payable to the Chief Executive Officer as provided for in the employment
agreement; the right to receive common stock that shall vest immediately; and
the right to exercise any warrants or stock options held by or granted to the
Chief Executive Officer under the employment agreement or any stock option plan
of the Company or both, health insurance and disability insurance. The Chief
Executive Officer will not receive any benefits upon voluntarily termination of
employment with the Company or if the Company terminates the Chief Executive
Officer "for cause", which is defined as the conviction of the Chief Executive
Officer after appeal of a felony.

On May 17, 2001, the term of Mr. Hulsebus' employment agreement and severance
agreement were extended for an additional one (1) year period, or until August
31, 2004.

LEGAL MATTERS

A suit in the Court of Common Pleas, Cuyahoga, Ohio was commenced by Plaintiff
James V. Zelch and his wholly owned entity, J.Z. Investments, Inc., against the
Company and three of its MRI site subsidiary entities, namely, Regional MRI of
Orlando, Inc., Regional MRI of Toledo, Inc., and West Regional MRI Limited
Partnership, seeking the payment of fees for radiological diagnostic services
allegedly rendered to patients of the aforementioned MRI Sites at a time prior
to the Company's purchase of these MRI site entities. The Company has contested
this lawsuit. However, a default judgment for $187,102 was entered which the
Company is now seeking to overturn and vacate. The Company is claiming that the
judgment was improperly applied for by the Plaintiffs and granted by the Court.
In the opinion of the Company's counsel, the judgment will likely be set aside.

From time to time, the Company has been named as a defendant in a lawsuit. As of
December 31, 2001, all such lawsuits have been dismissed or
settled through agreed-upon payment terms, except for as noted above. There are
no other legal proceedings, to which the Company is a party, which could have a
material adverse effect on its business, financial condition or operating
results.




                                      F-19

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2000 and 1999

(9) STOCKHOLDERS' EQUITY
     --------------------

PREFERRED STOCK

In April 1995, the Company amended its Articles of Incorporation to authorize
10,000,000 shares of $.01 par value preferred stock. In December 1995, the
Company further amended its Articles of Incorporation to authorize 187,500 of
Series I convertible preferred stock in conjunction with its private placement
offering, the Company issued 153,750 shares of Series I convertible preferred
stock with an assigned value of $384,375. On January 19, 1996, the Company again
amended its Articles of Incorporation to increase the authorized shares of
Series I convertible preferred stock from 187,500 to 247,500. On January 24,
1996, the Company issued an additional 93,750 shares of Series I convertible
preferred stock. These preferred shares were considered an original issue
discount associated with the notes payable and were amortized over approximately
the first five months of 1996.

On June 24, 1996, the Company completed a public offering of 1,500,000 shares of
6% cumulative convertible Series A preferred stock (the "Preferred Stock") and
1,500,000 redeemable common stock purchase warrants resulting in gross proceeds
of $7.65 million. The Company received approximately $4 million after repayment
of short-term debt and costs associated with the offering. The Preferred Stock
is convertible into four thirty-fifths (4/35) share of common stock $43.75 per
share and for a total of $131.25. As part of the terms of this offering, the
holders of the Series I convertible preferred stock exchanged their preferred
stock for the Preferred Stock on a one for one basis at no cost. Each share of
Preferred Stock, by its terms, automatically converted into four thirty-fifths
(4/35) share of common stock on July 24, 1997.

COMMON STOCK

During 2000, pursuant to investment letters with eight individuals, the Company
received a total of $190,000 for the purchase of 388,600 shares of Restricted
Rule 144 common stock at purchase prices ranging from $0.40 to $0.65 per share.
All such shares have been issued.

During 2000, the Company refinanced a capital lease
obligation in which the Company issued 125,000 shares of Restricted Rule 144
common stock valued at $48,828, recognized a gain of $23,558 and obtained a new
capital lease payable of $425,258.


                                      F-20
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  For the years ended December 31, 2001 and 2000

(9) CONTINUED
    ---------

On February 9, 2000, the Company acquired 80% ownership in Ultra Open MRI
Holding Corporation with a payment combination of a $380,160 note payable and
2,534,400 shares of Restricted Rule 144 common stock. During 2001, the Company
relinquished its holdings in Ultra pursuant to a settlement agreement and
cancelled the 2,534,400 shares of the Company's common stock. As a result of
this transaction, common stock and additional paid-in capital were reduced by
$2,656,456 (see note 2). Resulting from the Ultra settlement, the weighted
average number of shares outstanding calculation for the year ended December 31,
2001 includes the cancellation of approximately 2.5 million common shares as of
February 28, 2001.

In 2000, the Company entered into and subsequently terminated an investment
Agreement with Swartz Private Equity LLC ("Swartz"). The investment agreement
entitled the Company, at the Company's option, to issue and sell its common
stock for up to an aggregate of $15 million from time-to-time during a
three-year period through April 2003, subject to certain conditions including
(1) an effective registration statement must be on file with the SEC registering
the resale of the common shares, and (2) a limitation on the number of common
shares which can be sold to Swartz within a 30 day time period based on the
trading volume of the stock, among others. Swartz could purchase the common
stock from the Company at a discount ranging from 9% to 25% depending on the
price of the common stock. In addition to the common stock purchase, Swartz
received warrants to purchase an additional 10% of the common stock equal to
110% of the market price as determined during the pricing period, subject to
further semi-annual adjustments if the price of the common stock goes down. The
registration statement went effective on July 12, 2000. During 2000 pursuant to
this agreement, the Company sold 202,430 shares of common stock and issued
779,024 warrants to purchase shares of the Company's common stock at exercise
prices ranging from $0.23 to $0.28 with exercise periods of five years from date
of grant. The sale of stock has been recorded net of related offering costs of
approximately $35,000. As of December 31, 2001, none of the warrants have been
exercised. This equity financing agreement did not provide the necessary
resources to pursue the Company's acquisition strategy; therefore, the agreement
was terminated effective October 16, 2000.

During the third quarter of 2000, the Company issued $150,000 of 12% convertible
notes payable, due January 15, 2002, to six officers and directors. Upon the
ninth month anniversary of the note, each noteholder may elect to convert all
(but not part) of the note into 83,333 shares of our common stock. The aggregate
payment amount due to the noteholders was $37,500 plus accrued interest due
April 15, 2001, July 15, 2001, October 15, 2001, and January 15, 2002. In April
2001, the Company issued 56,250 shares of Restricted Rule 144 common stock
valued at $4,078 as consideration for extending each due date by six months. In
October 2001, the Company issued 100,000 shares of Restricted Rule 144 common
stock valued at approximately $8,500 as consideration for extending the due
dates of five of the six notes by an additional twelve months. The balance of
these notes was $143,750 and $150,000 at December 31, 2001 and 2000,
respectively.

In May 2000, 7,500 shares of accrued employee common stock grants were issued
pursuant to an employee agreement. Accordingly, deferred stock compensation of
$5,156 was reclassified to common stock and additional paid-in capital during
the year end December 31, 2001.

During the year ended December 31, 2001, 34,500 shares of accrued employee
common stock grants were issued pursuant to employee agreements and 536 shares
of accrued common stock grants were cancelled. Accordingly, deferred stock
compensation of $51,369 was reclassified to common stock and additional paid-in
capital during the year end December 31, 2001.

During the first quarter of 2001, the Company issued a $150,000 note payable at
a 15% interest rate, originally due August 28, 2001, to a corporation. The
noteholder was awarded warrants to purchase 400,000 shares of common stock at an
exercise price of $0.219 per share. On August 28, 2001, the Company awarded the
noteholder warrants to purchase 75,000 shares of common stock at an exercise
price of $0.219 per share as consideration for extending the due date by three
months. During November 2001, the note was paid in full.

Pursuant to an investment letter dated March 5, 2001 with an individual, the
Company received $15,000 for the purchase of 83,335 shares of Restricted Rule
144 common stock at purchase price of $0.18 per share. All such shares have been
issued.


                                      F-21
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(10) OPTIONS AND WARRANTS
     --------------------

The Company has issued options and warrants in connection with various private
placements, certain debt securities and certain other agreements with
compensation to employees and consultants. The Company's options and private
warrants allow the holder to purchase one share of the Company's common stock at
a specified price.

Options and private warrants granted and issued by the Company consisted of:

                                                                      Weighted
                                                                       Average
                                                          Number       Price
                                                        -----------  -----------

Balance outstanding, December 31, 1999                     532,430         1.50
                                                        ===========

Options granted                                            702,000         0.62
Options expired                                            (97,750)        0.74
Options exercised                                           (1,250)        0.81
Warrants granted                                           954,024         0.25
Warrants expired                                            (7,143)       44.80
                                                        -----------
Balance outstanding, December 31, 2000                   2,082,311        $0.52
                                                        ===========

Options granted                                                  0
Options expired                                           (144,250)        0.74
Options exercised                                                0
Warrants granted                                           475,000         0.22
Warrants expired                                            (5,143)       28.00
                                                        -----------
Balance outstanding, December 31, 2001                   2,407,918        $0.35
                                                        ===========

Options and warrants exercisable                         1,854,793        $0.27

Compensation expense was not recorded for any issuance of options and warrants
to officers or employees in 2001 and 2000 as the fair market value of the
options and warrants was at or below the exercise price on their respective
dates of issuance.


                                      F-22

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                For the years ended December 31, 2001 and 2000

(10) CONTINUED
     ---------

Information relating to options and warrants at December 31, 2001 summarized by
exercise price is as follows:
<TABLE>
<CAPTION>

                Outstanding                                                 Exercisable
                                            Weighted Average             Weighted Average
      Exercise Price       Equiv.          Life       Exercise          Equiv.      Exercise
        Per Share          Shares         (Year)       Price            Shares       Price
        ---------          ------         ------       -----            ------       -----
      <S>                 <C>              <C>        <C>              <C>           <C>
      $    0.01           100,000          3.0       $ 0.01            100,000      $0.01
           0.10            20,413          3.8         0.10             20,413       0.10
           0.15           136,523          3.8         0.15            136,523       0.15
           0.16           620,000          3.2         0.16            620,000       0.16
           0.17             2,088          3.6         0.17              2,088       0.17
           0.20           175,000          3.9         0.20            175,000       0.20
           0.22           475,000          4.3         0.22            475,000       0.22
           0.26           165,000          8.6         0.26             41,250       0.26
           0.63            40,000          0.8         0.63             40,000       0.63
           0.69           343,750          8.0         0.69             98,125       0.69
           0.81           255,000          7.0         0.81            127,500       0.81
           1.00            75,000          8.2         1.00             18,750       1.00
          28.00               144          1.6        28.00                144       28.00
                        ---------                                    --------
                        2,407,918          5.5       $ 0.35          1,854,793       $0.27
                        =========                                    =========
</TABLE>


<PAGE>


Had compensation cost for stock-based compensation been determined based on the
fair value at the grant dates consistent with the method of SFAS No. 123, the
Company's net income and earnings per share for the years ended December 31,
2001 and 2000 would have been the pro forma amounts presented below:

<TABLE>
<CAPTION>
                                                               2001             2000
                                                           ------------     ------------
<S>                                                        <C>              <C>
Net income
     As reported                                           $   329,823      $   175,726
     Pro forma                                                 329,823          134,551

Net income attributable to common stockholders
     As reported                                               329,823          175,726
     Pro forma                                                 329,823          134,551


Basic and diluted earnings per share
     As reported                                           $      0.02      $      0.01
     Pro forma                                             $      0.02      $      0.01
</TABLE>

                                      F-23

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                For the years ended December 31, 2001 and 2000

(10) CONTINUED
     ---------

The fair value of options and warrants is estimated on the date of grants
utilizing the Black-Scholes option pricing model with the following weighted
average assumptions for years ended December 31, 2001 and 2000: expected life of
10 years; expected volatility of 90%; risk-free interest rate of 5.25%; and a 0%
dividend yield. The weighted average fair value at the date of grant of the
options and warrants granted during 2001 and 2000 approximated $0.22 and $.62
per option and warrant, respectively.

Due to the fact that the Company's warrants vest over several years and
additional awards are made each year, the above pro forma numbers are not
indicative of the financial impact had the disclosure provisions of SFAS No. 123
been applicable to all years of previous warrant grants. The above numbers do
not include the effect of warrants granted prior to 1996 that vested in 2000 and
2001.


(11) COMPENSATORY STOCK BENEFIT PLANS
     --------------------------------

On March 20, 2001, the Company's board of directors approved the registration of
1,000,000 shares of common stock under Form S-8, whereby services are obtained
in exchange for issuance of free trading stock of the Company. Shares may be
awarded under this plan until March 20, 2006.

On August 28, 2000, the Company's board of directors approved the registration
of 2,500,000 shares of common stock to be issued pursuant to the Company's 2000
Stock Compensation Plan II and the 1997 Stock Option Plan. Shares may be awarded
under this plan until August 28, 2005.

During the years ended December 31, 2001 and 2000, 1,217,845 and 1,468,649
shares, respectively, of common stock under Form S-8 registrations were issued
for directors fees, employee bonuses, compensation, interest, principal of trade
notes payable, and legal and professional services provided to the Company.

During the years ended December 31, 2001 and 2000, 978,050 and 1,464,000 shares,
respectively, of Restricted Rule 144 common stock were issued for employee
bonuses, compensation, interest, principal of trade notes payable, and legal and
professional services provided to the Company.

Compensation recognized relating to accrued employee stock grants and warrants
is based on the pro-rata common stock and warrants earned and the market value
of the Company's stock at the time of issuance (fair value method) and amortized
over the applicable period.

                                      F-24

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(12) EMPLOYEE BENEFIT PLAN
     ---------------------

On November 1, 2000, the Company adopted the 401(k) Profit Sharing Plan and
Trust (the "Plan") for employees of the Company. The Plan allows employees who
satisfy the age and service requirements to contribute up to 15% of pre-tax
wages, limited to the maximum amount permitted under federal law. The Company
has made no contributions to the Plan.

(13) RELATED PARTY TRANSACTIONS
     --------------------------

During 2001, no related parties received compensation for general corporate
consulting services. During 2000, two directors received compensation of $31,000
in aggregate for general corporate consulting services.

In June 2001, the Company issued two convertible notes payable for $200,000 and
$75,000 to an officer/director related to its acquisition of Envision
Healthcare, LLC and Envision Open MRI, LLC, respectively. At the noteholder's
option, the noteholder may elect to convert the outstanding balance of the notes
into shares of the Company's common stock at a conversion price of $0.75. The
notes are interest only at 10% for the first year with the principal to be paid
down during the following two years. The balance of these notes was $275,000 at
December 31, 2001.

During the third quarter of 2000, the Company issued $150,000 of 12% convertible
notes payable, due January 15, 2002, to six officers and directors. Upon the
ninth month anniversary of the note, each noteholder may elect to convert all
(but not part) of the note into 83,333 shares of our common stock. The aggregate
payment amount due to the noteholders was $37,500 plus accrued interest due
April
15, 2001, July 15, 2001, October 15, 2001, and January 15, 2002. In April 2001,
the Company issued 56,250 shares of Restricted Rule 144 common stock valued at
$4,078 as consideration for extending each due date by six months. In October
2001, the Company issued 100,000 shares of Restricted Rule 144 common stock
valued at approximately $8,500 as consideration for extending the due dates of
five of the six notes by an additional twelve months. The balance of these notes
was $143,750 and $150,000 at December 31, 2001 and 2000, respectively.

In September 1999, the Company issued $50,000 in principal amount of 10%
short-term promissory notes payable, due March 31, 2000, to two directors and an
individual to finance operations. As additional consideration for these loans,
the individual lenders, including the directors, were awarded total warrants to
purchase 40,000 shares of common stock at an exercise price of $0.625 per share.
In connection with the issuance of the warrants, the Company is recognizing
additional interest expense of $10,938, which is being amortized over the terms
of the loans. During the second quarter of 2000, the Company paid $45,000 of the
$50,000 short-term promissory notes payable along with accrued interest payable
of $2,785 in the form of $5,000 cash and 120,000 shares of Restricted Rule 144
common stock. Accrued interest payable and warrant amortization to interest
expense related to these loans amounted to $958 and $5,833, respectively, as of
December 31, 2000. Accrued interest payable and warrant amortization to interest
expense related to these loans amounted to $500 and $5,833, respectively, as of
December 31, 2001. The balance of these notes was $5,000 at December 31, 2001
and 2000.

Related to the February 2000 acquisition of Ultra, the Company issued notes
payable to the principals which were due in variable payments totaling $380,160
plus accrued interest through November 9, 2001. During the year ended December
31, 2000, the Company paid principal of $62,500 along with accrued interest of
$7,603. The balance of these notes was $317,660 at December 31, 2000. During the
first quarter of the year ended December 31, 2001, the Company paid principal of
$25,676 along with accrued interest of $22,324. During 2001, the purchase
transaction
was rescinded pursuant to a settlement agreement. Effective February 28, 2001,
the Company relinquished its holdings in Ultra and cancelled approximately 2.5
million shares of common stock in return. The notes payable associated with the
acquisition were cancelled and are not included in the consolidated financial
statements of the Company as of December 31, 2001 (see note 2).


                                      F-25

<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(14) INCOME TAXES
     ------------

The types of temporary differences between the tax bases of assets and
liabilities and their financial reporting amounts that give rise to the net
deferred tax asset and liability, and their approximate tax effects, are as
follows:

                                                         DECEMBER 31,
                                                    2001             2000
                                                ------------     ------------

Net operating loss carryforwards                $ 1,416,000      $ 1,365,000
                                                ------------     ------------
                                                  1,416,000        1,365,000

                       Valuation allowance       (1,416,000)      (1,365,000)
                                                ------------     ------------

          Total                                 $         -      $         -
                                                ============     ============


At December 31, 2001, the Company had approximately $3,700,000 in federal and
$6,000,000 in state net operating loss carryovers to offset future taxable
income. These carryovers will expire in various years through 2019. As a result
of a change in ownership, federal tax rules impose limitations on the use of net
operating losses. The limitations will reduce the amount of these benefits that
will be available to offset future taxable income each year, starting with the
year of an ownership change, for which the issuance of the preferred stock in
the Company's June 1996 public offering and the acquisition of Vision in 1998
was deemed to be. These net operating loss carryovers have been adjusted for
such limitations.

The Company provides a valuation allowance for deferred tax assets when it is
more likely than not, based on available evidence, that some portion or all of
the deferred tax assets will not be realized. As December 31, 2001, it cannot
determine if it is more likely than not that the Company will generate
sufficient future taxable income before 2019, the year after which all current
available net operating loss carryforwards expire, to utilize all of the
Company's deferred assets. A valuation allowance has been recognized for the
full amount of the deferred tax asset at December 31, 2001 and 2000.

Income tax expense attributable to income before income taxes differs from the
amount computed by applying the US Federal income tax rate of 34% to income from
operations before income taxes principally as a result of use of net operating
loss carryovers and changes in the valuation allowance.

                                      F-26

<PAGE>

                           MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(15) SUMMARIZED QUARTERLY DATA (UNAUDITED)

Following is a summary of the quarterly results of operations for the years
ended December 31, 2001 and 2000 (in 000's except per share data and average
shares outstanding):

<TABLE>
<CAPTION>
                                                            Quarter ended
                              ------------------------------------------------------------------------
                                 March           June        September      December
                                  31              30             30             31            Total
                              ------------   ------------   ------------   ------------   ------------
2001
----
<S>                           <C>            <C>            <C>            <C>            <C>
Net revenue                   $     2,309    $     1,961    $     2,402    $     2,673    $     9,345
Income from
   Operations                         315            275            276            266          1,132
Net income                             97            108             61             65            330
Basic earnings per share              .01            .01            .01            .01            .02
Diluted earnings per share            .01            .01            .01            .01            .02
Weighted average shares
   Outstanding                 13,496,455     12,799,044     13,184,712     13,611,202     13,272,926

2000
----
Net revenue                   $     1,750    $     2,181    $     2,329    $     2,466    $     8,726
Income (loss) from
   Operations                         105            168            276            380            929
Net income (loss)                     (45)            59             75             87            176
Basic earnings (loss) per share      (.01)           .01            .01            .01            .01
Diluted earnings(loss) per share     (.01)           .01            .01            .01            .01
Weighted average shares
   Outstanding                  8,034,824     10,984,573     12,835,603     13,971,982     11,993,979


</TABLE>

(16) Recent Accounting Pronouncements
     --------------------------------

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
No. 141, "Business Combinations". Statement 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. Statement 141 also specifies criteria that intangible assets acquired
in a purchase method business combination must meet to be recognized and
reported apart from goodwill, noting that any purchase price allocable to an
assembled workforce may not be accounted for separately. Based upon our initial
assessment, the Company does not expect the adoption of this statement to have a
significant impact on our financial condition or results of operations.

In June 2001, the FASB approved SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 requires companies to cease amortizing goodwill and other
intangible assets with indefinite lives after December 31, 2001. SFAS No. 142
also establishes a new method of testing goodwill for impairment on an annual
basis or on an interim basis if an event occurs or circumstances change that
would reduce the fair value of a reporting unit below its carrying value. The
Company expects that the impact to 2002 net income associated with the
discontinuation of the amortization of goodwill to be a pre-tax increase of
approximately $174,000. The Company has not completed our initial assessment of
goodwill impairment. Upon adoption of this standard, any resulting impairment
charges recorded may have a material impact on our results of operations.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The statement provides accounting and reporting standards for
recognizing the cost associated with obligations related to the retirement of
tangible long-lived assets. Under this statement, legal obligations associated
with the retirement of long-lived assets are to be recognized at their fair
value in the period in which they are incurred if a reasonable estimate of fair
value can be made. The fair value of the asset retirement costs is capitalized
as part of the carrying amount of the long-lived asset and expensed using a
systematic and rational method over the asset's useful life. Any subsequent
changes to the fair value of the liability will be expensed. The Company will be
required to adopt this statement no later than January 1, 2003. Based on our
initial assessment, the Company does not expect the adoption of this statement
to have a significant impact on our financial condition or results of
operations.

                                      F-27
<PAGE>

                            MIRACOR DIAGNOSTICS, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 For the years ended December 31, 2001 and 2000

(16) CONTINUED
     ---------

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which is effective for fiscal years beginning
after December 15, 2001. This statement supersedes FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and replaces the provisions of APB Opinion No. 30, "Reporting
the Results of Operations - Reporting the Effects of Disposal of Segments of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of segments of a business. SFAS No. 144 retains
the fundamental provisions of SFAS No. 121 for the recognition and measurement
of the impairment of long-lived assets to be held and used and the measurement
of long-lived assets to be disposed of by sale. Impairment of goodwill is not
included in the scope of SFAS No. 144 and will be treated in accordance with
SFAS No. 142. Under SFAS No. 144, long-lived assets are measured at the lower of
carrying amount or fair value less cost to sell. The Company is required to
adopt this statement no later than January 1, 2002. Based on our current
assessment, the company does not expect the adoption of this statement to have a
significant impact on our financial condition or results of operations.

 (17) SUBSEQUENT EVENT
     ----------------

On February 11, 2002, the Company opened our ninth diagnostic center located in
Woodridge, Illinois through an asset purchase agreement. The Company assumed
medical equipment pledged under a capital lease with a finance company. The
agreement finances MRI equipment with a carrying amount of approximately
$1,066,000 with a monthly installment payment of $30,050 over 45 months with an
interest rate of 10.75%.



                                      F-28