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

                                   FORM 10-QSB

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

                  For the quarterly period ended June 30, 2001

                                       OR

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

             For the transition period from _________ to _________.

                        Commission file number: 333-45464


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


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

                       5190 Neil Road, Reno, Nevada 89502
                    (Address of principal executive offices)


                    Issuer's telephone number: (775) 825-8822

     As of July 31, 2001, there were 2,000 shares of the registrant's sole class
of common stock outstanding.

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

ITEM 1.  FINANCIAL STATEMENTS.

                        MEDICAL CAPITAL MANAGEMENT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                        June 30,        December 31,
                                                                          2001             2000
                                                                       ---------         ---------
                                                                      (Unaudited)
<S>                                                                    <C>               <C>
ASSETS:
Current assets:
  Cash ............................................................    $ 473,106         $     100
  Medical receivables .............................................           --                --
  Prepaid trustee fee .............................................       28,375                --
  Prepaid commissions .............................................       29,993                --
  Due from Parent .................................................           --                --
                                                                       ---------         ---------
         Total current assets .....................................      531,474               100

   Deferred offering costs ........................................      224,480            86,808
                                                                       ---------         ---------
         Total assets .............................................    $ 755,954         $  86,908
                                                                       =========         =========

LIABILITIES AND  STOCKHOLDER'S EQUITY
Current liabilities:
  Accrued expenses - due to Parent ................................    $      --         $  86,808
  Accrued expenses - trade ........................................       11,750                --
  Interest payable ................................................        7,485                --
                                                                       ---------         ---------
         Total current liabilities ................................       19,235            86,808

   Notes payable ..................................................      576,000                --
                                                                       ---------         ---------
         Total liabilities ........................................      595,235            86,808
                                                                       =========         =========

STOCKHOLDER'S EQUITY:
  Preferred stock - par value $.01 (10,000 shares authorized,
   no shares issued and outstanding) ..............................           --                --
  Common stock - par value $.01 (10,000 shares authorized,
   2,000 shares issued and outstanding) ...........................           20                10
  Additional paid-in capital ......................................      250,000                90
  Deficit accumulated during development stage ....................      (89,301)               --
                                                                       ---------         ---------
         Total stockholder's equity ...............................      160,719               100
                                                                       ---------         ---------
         Total liabilities and stockholder's equity ...............    $ 755,954         $  86,908
                                                                       =========         =========
</TABLE>

See accompanying notes.
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>


                                                                                                            For the period
                                                Six months ended June 30,   Three months ended June 30,   since inception on
                                                -------------------------   ---------------------------    August 4, 2000 to
                                                  2001             2000        2001              2000        June 30, 2001
                                                --------         --------    --------          --------      -------------
                                               (Unaudited)      (Unaudited) (Unaudited)       (Unaudited)      (Unaudited)
<S>                                             <C>                <C>      <C>                  <C>         <C>
REVENUES:
  Discount fees .............................   $     --         $     --    $     --          $     --         $     --
                                                --------         --------    --------          --------         --------
      Total revenues ........................         --               --          --                --               --

  Interest expense, net .....................     11,555               --      11,190                --           11,555
                                                --------         --------    --------          --------         --------
      Revenue, net of interest expense ......    (11,555)              --     (11,190)               --          (11,555)
                                                --------         --------    --------          --------         --------
OPERATING EXPENSES:
  Trustee fees ..............................     28,375               --      14,187                --           28,375
  Directors' fees ...........................     22,000               --      22,000                --           22,000
  Printing ..................................     12,499               --      12,499                --           12,499
  Professional services .....................     10,230               --       6,480                --           10,230
  Travel and entertainment ..................      3,257               --       3,257                --            3,257
  Commissions ...............................        962               --         875                --              962
  Other .....................................        423               --         423                --              423
                                                --------         --------    --------          --------         --------
      Total operating expenses ..............     77,746               --      59,721                --           77,746
                                                --------         --------    --------          --------         --------

NET INCOME (LOSS) ...........................   $(89,301)        $     --    $(70,911)         $     --         $(89,301)
                                                ========         ========    ========          ========         ========
Weighted average number of common
shares outstanding - basic and diluted ......      1,500               --       2,000                --            1,300
                                                ========         ========    ========          ========         ========
Net earnings (loss) per share of common .....   $ (59.53)        $   0.00    $ (35.46)         $   0.00         $ (68.69)
                                                ========         ========    ========          ========         ========
</TABLE>

See accompanying notes.

                                       2
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                                         For the period
                                                           Six months ended June 30,   since inception on
                                                           ------------------------     August 4, 2000 to
                                                              2001           2000         June 30, 2001
                                                           ---------      ---------       -------------
                                                          (Unaudited)    (Unaudited)      (Unaudited)
<S>                                                        <C>            <C>              <C>
Cash flows used for operating activities:
  Net loss .............................................   $ (89,301)     $      --        $ (89,301)
  Adjustments to reconcile net loss to net cash
   provided by (used for) operating activities:
    Change in deferred offering costs ..................    (137,672)            --         (224,480)
    Change in trustee fees and commissions .............     (58,368)            --          (58,368)

  Changes in assets and liabilities:
    Increase in accrued expenses .......................     (67,573)            --           19,235
                                                           ---------      ---------        ---------

Net cash provided by operations ........................    (352,914)            --         (352,914)

Cash flows from financing activities:
  Proceeds from issuance of debt .......................     576,000             --          576,000
  Proceeds from sale of common stock ...................     249,920             --          250,020
                                                           ---------      ---------        ---------
Net cash provided by financing activities ..............     825,920             --          826,020
                                                           ---------      ---------        ---------
Net increase (decrease) in cash ........................     473,006             --          473,106
Cash at beginning of year/period .......................         100             --               --
                                                           ---------      ---------        ---------
Cash at end of year/period .............................   $ 473,106      $      --        $ 473,106
                                                           =========      =========        =========

Supplemental disclosure of cash flow items:
  Income taxes paid ....................................          --             --               --
  Interest paid ........................................       6,285             --            6,285
</TABLE>

See accompanying notes.

                                       3
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDER'S EQUITY
        FOR THE PERIOD SINCE INCEPTION ON AUGUST 4, 2000 TO JUNE 30, 2001


<TABLE>
<CAPTION>
                                                                                          Deficit
                                                                                       accumulation
                                                       Common stock       Additional      during         Total
                                                   ---------------------   paid-in     development   stockholders'
                                                   Shares        Amount    capital        stage          equity
                                                   -------     ---------  ---------     ---------      ---------
<S>                                                <C>         <C>        <C>           <C>            <C>
Issuance of common stock at inception on
 August 4, 2000 .................................    1,000       $  10    $      90     $      --      $     100

Net income for the period from inception on
 August 4, 2000 to December 31, 2000 ............       --          --           --            --             --
                                                   -------       -----    ---------     ---------      ---------
Balance December 31, 2000 .......................    1,000          10           90            --            100

Sale of common stock to Parent on
 March 31, 2001 (Unaudited) .....................    1,000          10      249,910            --        249,920

Net loss for the six months ended
 June 30, 2001 (Unaudited) ......................       --          --           --       (89,301)       (89,301)
                                                   -------       -----    ---------     ---------      ---------
Balance June 30, 2001 (Unaudited) ...............    2,000       $  20    $ 250,000     $ (89,301)     $ 160,719
                                                   =======       =====    =========     =========      =========
</TABLE>

SEE ACCOMPANYING NOTES.

                                       4
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. OPERATIONS OF THE COMPANY

ORGANIZATION:

Medical Capital  Management,  Inc. was  incorporated in the state of Delaware on
August 4, 2000. It maintains its corporate office in Anaheim,  California. As of
the statement date, the Company is considered a  developmental  stage company in
accordance  with Statement of Financial  Accounting  Board  Statement No. 7. The
Company is wholly owned by Medical Capital Holdings, Inc. (Parent).

BUSINESS ACTIVITY:

The Company was organized to purchase the insured portion of medical receivables
from medical providers including physicians,  clinics, hospitals,  nursing homes
and other  providers  of medical  services.  The medical  receivables  are to be
purchased at a discount to the full amount of the claim.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION:

The accompanying  unaudited  condensed  interim  financial  statements have been
prepared in accordance  with the rules and  regulations  of the  Securities  and
Exchange Commission for the presentation of interim financial  information,  but
may not  include  all the  information  and  footnotes  required  by  accounting
principles  generally  accepted  in the United  States of America  for  complete
financial  statements.  The audited  financial  statements  for the period since
inception  on August 4, 2000 to December 31, 2000 were filed on May 1, 2001 with
the Securities and Exchange Commission and is hereby referenced.  In the opinion
of management, all adjustments considered necessary for a fair presentation have
been  included.  Operating  results for the six month period ended June 30, 2001
are not necessarily  indicative of the results that may be expected for the year
ended December 31, 2001.

USE OF ESTIMATES:

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

CASH AND CASH EQUIVALENTS:

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

                                       5
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DISCOUNTS EARNED ON MEDICAL RECEIVABLES:

Medical  receivables  are recorded at cost when purchased by the Company.  Gross
receivables are adjusted to cost for the purchase discount and reserves based on
the  estimated  ultimate  collectible  amount due to the  Company.  Discounts on
medical  receivables  are  recognized  as earned in accordance  with  applicable
generally accepted accounting principles.

RESERVE FOR LOSSES:

The reserve for losses on medical receivables is increased by provisions charged
against  operations  and reduced by  receivables  charged off as  determined  by
management.  The reserve is maintained at a level considered adequate to provide
for potential losses on medical  receivables  based on management's  evaluation.
Under the terms by which the medical receivables are purchased,  the Company has
significant   collateral,   including   substitution   of   other   receivables.
Accordingly,  loan loss  charge-offs  are not  expected  to be  material  to the
Company's financial position or results of operations.

COMMISSIONS:

Commissions to outside and related parties in connection with the origination of
medical  receivables  are  expensed  as  incurred.  Commissions  incurred on the
acquisition of investor funds (notes payable) are capitalized and amortized over
the period the debt is outstanding.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

At June 30, 2001 and December  31, 2000,  the  Company's  financial  instruments
consist of cash and  various  payables.  The  carrying  amounts  reported in the
balance sheet approximate fair value.

INCOME TAXES

The Company uses the liability method of accounting for income taxes pursuant to
SFAS No.  109,  "Accounting  for Income  Taxes."  Deferred  income tax assets or
liabilities  result from  temporary  differences  when certain income or expense
amounts  are  recognized  or  deducted  for  financial  statement  purposes in a
different  reporting period than when they are recognized or deducted for income
tax purposes.

3. DEFERRED OFFERING COSTS

Deferred Offering Costs consist of costs incurred for the Company's registration
of debt  securities  on Form  SB-2 as filed  with the  Securities  and  Exchange
Commission,  which was effective February 6, 2001. These costs will be amortized
over the offering period of the securities.

                                       6
<PAGE>
4. NOTES PAYABLE

The Company  issues  secured  notes to acquire  healthcare  receivables  through
several   broker-dealers  as  filed  on  its  registration  statement  with  the
Securities and Exchange Commission. These notes consist of the following:

          RATE          MATURITY DATE          JUNE 30, 2001   DECEMBER 31, 2000
          ----          -------------          -------------   -----------------

Class A   9.00%   1 year from issuance date       $199,000          $    --
Class B   9.75%   2 years from issuance date       242,000               --
Class C  10.25%   3 years from issuance date       110,000               --
Class D  10.75%   4 years from issuance date        25,000               --
                                                  --------          -------
                                                  $576,000          $    --
                                                  ========          =======

The maturities of notes payable as of June 30, 2001 are as follows:

              2001              $     --
              2002               199,000
              2003               242,000
              2004               110,000
              2005                25,000
                                --------
                                $576,000
                                ========

5. INTEREST TO SECURED NOTEHOLDERS

Interest  on all  secured  notes is paid  monthly in arrears on the tenth of the
following  month to the  noteholder  of  record  as of the last day of the month
preceding the month in which the interest payment date occurs.  Interest is paid
without any compounding.  Each class of notes has a different  maturity date and
accrues interest at different rates.

6. STOCKHOLDER'S EQUITY

During August 2000, the Company issued 1,000 shares of its $.01 par value common
stock to its Parent in consideration for $100 in cash. As of March 31, 2001, the
Company  issued 1,000 shares of its $.01 par value common stock to its Parent in
consideration for $249,920.

7. RELATED PARTY TRANSACTIONS

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

The Company has entered into an Administrative  Services  Agreement with Medical
Capital  Corporation,  who is the  administrator  in purchasing  and  monitoring
healthcare  receivables generated by all healthcare  providers.  Medical Capital
Corporation will be compensated for the underwriting and  administration  of the
healthcare  receivables  purchased,  as well  as for  accounting  and  financial
services.

                                       7
<PAGE>
The Company has entered into a Master Servicing  Agreement with Medical Tracking
Services,  Inc., who will be compensated for servicing the receivables  that are
purchased.

8. TRUSTEE FEES

The Company  pledges  collateral to an  independent  bank  trustee.  The pledged
collateral secures all notes,  regardless of when the collateral was acquired or
when the notes were  issued.  The fees to the  trustee  are prepaid on an annual
basis and amortized monthly.

9. EARNINGS/(NET LOSS) PER SHARE

The Company  computes net loss per share  following SFAS No. 128,  "Earnings Per
Share." Under the  provisions of SFAS No. 128, basic net income (loss) per share
is computed by dividing the net income (loss)  available to common  shareholders
for the  period by the  weighted  average  number of common  shares  outstanding
during the period.  Diluted net income  (loss) per share is computed by dividing
the net income  (loss) for the period by the weighted  average  number of common
equivalent shares outstanding during the period.

10. SIGNIFICANT AGREEMENTS

The Company has entered into several broker-dealer agreements for the purpose of
offering,  selling,  and distributing  certain secured notes of the Company on a
best efforts  basis.  The  effective  term of the  broker-dealer  agreements  is
generally for one year.

                                       8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

                                  (UNAUDITED)

RESULTS OF OPERATIONS FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2001

The Company is a development stage company.

Revenues. The Company formally began operations after the registration statement
relating to its public  offering of secured notes was declared  effective by the
Securities  and Exchange  Commission on February 6, 2001,  and has not purchased
any medical  receivables  or earned any discount  fees as of June 30, 2001.  The
Company will start to purchase  receivables in the third  quarter,  and revenues
will begin to be booked.

Operating  Expenses.  Initial operating  expenses consist of the amortization of
the annual trustee fee of $56,750,  the  amortization of (prepaid)  commissions,
the accrual for audit fees, and other operating fees. Deferred offering costs of
$224,480  will be  amortized  over  the  offering  period  beginning  after  the
Company's initial purchase of receivables. Total operating expenses were $77,746
and $59,721 for the six and three months ended June 30, 2001 respectively.

Net Loss.  The Company  had a net loss of $89,301 for the six months  ended June
30, 2001, and $70,911 for the three months ended June 30, 2001. These losses are
the results of expenses  incurred  prior to the Company  beginning  its purchase
operations and booking related revenue streams. The Company was formed on August
4, 2000, and accordingly,  no quarterly  financial  information is presented for
the six months ended June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

During the six months of 2001,  the Company  received  $576,000 in cash from the
issuance of notes. As of July 31, 2001, the Company has received over $2 million
from the sale of its notes.  These are the first initial  funds  obtained by the
Company on its $75,000,000  public  offering of secured notes.  The Company will
begin to purchase medical receivables when the funds provided by the issuance of
these notes reaches an adequate level to maintain  ongoing weekly purchases from
providers. This level will be reached in the third quarter of 2001.

Management  believes  current  conditions  of the stock  exchanges and financial
markets are expected to have a favorable impact on the issuance of the Company's
secured  notes due to the  favorable  and fixed  interest  rates  offered on its
notes.

The Company does not believe that inflation has had a significant  impact on its
operations since inception of the Company.

FUTURE PLAN OF OPERATIONS

Our primary focus over the course of the next twelve months will be concentrated
on building a portfolio of  healthcare  receivables  purchased  from  healthcare
providers.  Generally,  we will limit our purchase of healthcare  receivables to
obligations of commercial  insurance carriers and debts guaranteed by a state or
the United States government,  including Medicare and Medicaid. We will purchase
the  receivables  from our  affiliated  companies  and other third  parties.  In
addition,  our  efforts  will be directed to  identifying  prospective  "target"
businesses  for  acquisition,  with an emphasis on businesses in the  healthcare

                                       9
<PAGE>
industry located in the United States.  While we may, under some  circumstances,
seek to make  business  combinations  with more than one target  business,  as a
result of our limited resources, we will likely have the ability to acquire only
a single  business over the next year. We have not identified a target  business
but remain open to  identifying  and  selecting a prospective  target  business.
However,  we will only acquire another  business if it satisfies our fair market
value tests and strategically fits with our long-term growth plan.

We were  recently  formed to initiate the process of raising  funds to start our
proposed  business.  All activity to date has been related to our  formation and
proposed  financing,  all of which has been  funded by our  parent  corporation,
Medical Capital  Holdings.  Our ability to commence  operations  depends upon us
obtaining  adequate  financial  resources  through the offering of our notes. We
will use the net proceeds from the note  offering,  together with the income and
interest earned on those proceeds, to purchase healthcare receivables, structure
and  consummate a business  acquisition  and pay interest due under the terms of
the notes.

Our   management   consists  of  officers  and  employees  of  Medical   Capital
Corporation. Therefore, their respective salaries and benefits currently paid by
Medical Capital Corporation will be allocated and paid by us on a pro-rata share
based upon their time devoted to our business.  We expect our operating expenses
will be minimal each month and will be reimbursed from the net offering proceeds
or from cash flow  generated from our  operations.  The  non-employee  directors
serving  on our  board  of  directors  will be paid  annual  retainer  fees  and
quarterly meeting fees, which we believe to be at minimal costs to us.

Medical Capital  Holdings has substantial  experience and success in identifying
and  evaluating   healthcare   providers   desiring  to  sell  their  healthcare
receivables.  We intend to use the  services and  expertise  of Medical  Capital
Holdings and its subsidiaries to purchase a portfolio of healthcare receivables.
We have entered into  contracts  with Medical  Capital  Corporation  and Medical
Tracking Services,  affiliated companies,  to provide the appropriate system for
purchasing  and tracking our  healthcare  receivables.  Reimbursement  for these
services has been established at prevailing market rates for comparable services
of this nature.

Our future  performance and growth  potential will be impacted by our ability to
identify,  evaluate  and  successfully  acquire  a  business  in the  healthcare
industry.  It is highly likely that we will not have the resources to consummate
more than one business acquisition over the next twelve months.  Therefore,  the
lack of  diversification  in our operations may subject us to numerous economic,
competitive  and  regulatory  risks,  any or all of which  may  have a  material
adverse impact upon our operations.

There  can be no  assurance  that  we will  be  able  to  successfully  purchase
healthcare  receivables  and/or acquire a business which  generates  significant
revenues or achieves a level of profits which will permit us to pay the interest
and principal  payments on the notes when due. We believe  additional sources of
cash may be required  in  connection  with the  acquisition  of a  business.  We
believe that the general and administrative expenses of the Company's operations
will be minimal and the cash available  from the net offerings  proceeds will be
sufficient to fund these expenses.

                                       10
<PAGE>
FORWARD LOOKING STATEMENTS

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

                                       11
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES.

On February  6, 2001,  the  Securities  and  Exchange  Commission  declared  the
Registrant's Registration Statement on Form SB-2, File No. 333-45464, effective.
Shortly  thereafter,  the  Registrant  commenced  the  public  offering  of  its
Redeemable  Secured  Notes,  Series I (the  "Notes").  As of June 30, 2001,  the
Registrant  had sold  $576,000  in  aggregate  principal  amount of  Notes.  The
Registrant's  offering of Notes is currently  ongoing.  As of June 30, 2001, the
Registrant has received net proceeds from the offering of Notes in the amount of
$549,295,  net of sales  commissions  of $26,705.  The  Registrant  is currently
holding  these net  proceeds  and  intends  to use them to  purchase  healthcare
receivables.  As of June 30, 2001, the Company had incurred $224,480 in deferred
offering costs.

                                   SIGNATURES

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

                                  MEDICAL CAPITAL MANAGEMENT, INC.


Date: August 14, 2001             By /s/ Sidney M. Field
                                     ------------------------------------
                                     Sidney M. Field, President, Chief
                                     Executive Officer and Director


Date: August 14, 2001             By /s/ Alan Meister
                                     ------------------------------------
                                     Alan Meister, Treasurer and Chief
                                     Accounting Officer (Chief Financial
                                     Officer)

                                       12