U.S. SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C. 20549

                           FORM 10-QSB

   [X]      Quarterly Report under Section 13 or 15(d) of the
                 Securities Exchange Act of 1934

       For the quarterly period ended September 30, 2001.

[ ]      Transition Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934

   For the transition period from ___________ to ____________

               Commission File Number   000-15379


                    Park Pharmacy Corporation
                    -------------------------
   (Exact Name of Small Business as Specified in its Charter)


           Colorado                         841029701
           ---------                        ---------
(State or Other Jurisdiction of          (I.R.S. Employer
Incorporation or Organization)           Identification Number)


       10711 Preston Road, Suite 250, Dallas, Texas 75230
       --------------------------------------------------
             Address of Principal Executive Offices


                         (972) 860-0200
                         --------------
         Issuer's Telephone Number, Including Area Code

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 [ ]

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date
(November 8, 2001):  7,813,651

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


<PAGE>
                        TABLE OF CONTENTS


                 PART I - FINANCIAL INFORMATION

                                                           Page
                                                           ----
Item 1.  Financial Statements

         Consolidated balance sheet (unaudited) -
          September 30, 2001                                 1

         Consolidated statements of operations
          (unaudited) - three months
          ended September 30, 2001 and 2000                  2

         Consolidated statements of cash flows
          (unaudited) - three months
          ended September 30, 2001 and 2000                  3

         Notes to consolidated financial statements          4

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations       7


               PART II - OTHER INFORMATION


Item 5.  Other Information                                  11

Item 6.  Exhibits and Reports on Form 8-K                   11

         Signature Page                                     13



                   PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                     CONSOLIDATED BALANCE SHEET
                             (Unaudited)

                         September 30, 2001

                               ASSETS
                               ------


CURRENT ASSETS:
 Cash and cash equivalents                               $   304,877
 Accounts receivable, net of $1,681,000 allowance
  for doubtful accounts                                   10,456,302
 Inventories                                               4,445,492
 Deferred income taxes                                       466,650
 Prepaid expenses and other                                  205,179
                                                         -----------
        Total current assets                              15,878,500

PROPERTY AND EQUIPMENT, net of $1,456,700
 accumulated depreciation                                  1,300,939

SOFTWARE COSTS                                             2,528,781

GOODWILL AND OTHER INTANGIBLE ASSETS,
 net of $339,100 accumulated amortization                  4,804,387

OTHER ASSETS                                                 144,536
                                                         -----------

        Total assets                                     $24,657,143
                                                         ===========

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

CURRENT LIABILITIES:
 Accounts payable                                        $ 7,428,042
 Accrued liabilities                                         611,909
 Income taxes payable                                        321,108
 Notes payable and current portion of long-term debt       4,349,586
                                                         -----------
        Total current liabilities                         12,710,645

DEFERRED INCOME TAXES                                        128,994

LONG-TERM DEBT, net of current portion                     3,131,134

FAIR VALUE OF NET ASSETS ACQUIRED IN EXCESS OF COST,
net of $5,000 accumulated amortization                       394,742

STOCKHOLDERS' EQUITY:
 Preferred stock                                               2,817
 Common stock                                                    780
 Additional paid-in capital                                7,942,054
 Retained earnings                                           445,863
 Deferred compensation                                      (99,886)
                                                         -----------
        Total stockholders' equity                         8,291,628
                                                         -----------

           Total liabilities and stockholders' equity    $24,657,143
                                                         ===========

 See accompanying notes to these consolidated financial statements.

                                - 1 -

<PAGE>

                CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)

                                            THREE MONTHS ENDED
                                              SEPTEMBER 30,
                                          -----------------------
                                            2001          2000
                                          ----------    ----------

REVENUES:
 Product sales and other, net            $15,485,395   $ 7,695,810
 Online sales, net                            39,362        18,260
                                         -----------   -----------
        Total revenues                    15,524,757     7,714,070

OPERATING EXPENSES:
 Cost of goods sold                        9,831,330     4,903,796
 Salaries, wages and related taxes         2,949,509     1,535,308
 Selling, general and administrative
  expenses                                 2,394,711     1,094,544
 Depreciation and amortization               117,336        65,127
                                         -----------   -----------
        Total operating expenses          15,292,886     7,598,775

        Operating income                     231,871       115,295

OTHER INCOME (EXPENSE):
 Interest expense, net                      (96,801)      (82,948)
 Financing expenses                         (17,509)      (15,067)
 Other income                                  5,219        45,960
                                         -----------   -----------
        Total other expense                (109,091)      (52,055)
                                         -----------   -----------

        Income before taxes                  122,780        63,240

INCOME TAX EXPENSE                            66,000        38,000
                                         -----------   -----------

NET INCOME                               $    56,780   $    25,240
                                         ===========   ===========

NET INCOME PER COMMON SHARE -
 Basic and diluted                       $         -   $         -
                                         ===========   ===========

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING -
  basic and diluted (Note 4)              35,965,361    34,754,361
                                         ===========   ===========


 See accompanying notes to these consolidated financial statements.

                                - 2-

<PAGE>

<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                             THREE MONTHS ENDED
                                                               SEPTEMBER 30,
                                                        ----------------------------
                                                            2001           2000
                                                        ------------  --------------
<S>                                                     <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                             $     56,780    $     25,240
Adjustments to reconcile net income to net cash used in
operating activities:
    Depreciation and amortization                            117,336          65,127
    Amortization of debt issuance costs                       17,509          15,067
    Amortization of deferred compensation                     41,400          31,826
 Amortization of fair value of net assets acquired                                 -
   in excess of cost                                          (5,000)
 Deferred income taxes                                        (5,900)              -
 Changes in operating assets and liabilities, net
   of acquisitions:
     Accounts receivable, inventories, prepaid
       expenses and other                                 (1,428,573)     (1,862,524)
     Accounts payable, accrued liabilities and income
       taxes payable                                         948,813         512,176
     Other assets                                              5,545         (13,985)
                                                         -----------    ------------
         Net cash used in operating activities              (252,090)     (1,227,073)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of property and equipment                        (129,097)        (62,346)
 Increase in software costs                                  (69,257)              -
 Payments in connection with businesses acquired                   -      (1,861,415)
                                                         -----------    ------------
         Net cash used in investing activities              (198,354)     (1,923,761)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable and long-term debt            3,407,560       3,050,000
 Repayment of notes payable and long-term debt            (4,264,162)       (700,028)
 Deferred financing costs                                          -         (11,429)
                                                         -----------    ------------
         Net cash (used in) provided by financing
          activities                                        (856,602)      2,338,543

NET DECREASE IN CASH AND CASH EQUIVALENTS                 (1,307,046)       (812,291)

CASH AND CASH EQUIVALENTS, beginning of period             1,611,923         935,946
                                                         -----------    ------------

CASH AND CASH EQUIVALENTS, end of period                 $   304,877    $    123,655
                                                         ===========    ============

SUPPLEMENTAL CASH FLOW INFORMATION:
 Cash paid for:
   Interest                                              $    72,700    $     85,000
                                                         ===========    ============
   Income taxes                                          $   250,000    $          -
                                                         ===========    ============


</TABLE>

       See accompanying notes to these consolidated financial statements.

                                       -3-

<PAGE>

1.   Unaudited Information
     ---------------------

  The balance sheet as of September 30, 2001 and the statements of
  operations for the three-month periods ended September 30, 2001 and
  2000 were taken from the Company's books and records without audit.
  However, in the opinion of management, such information includes all
  adjustments (consisting only of normal recurring accruals) which are
  necessary to properly reflect the financial position of the Company as
  of September 30, 2001 and the results of its operations for the three
  months ended September 30, 2001 and 2000.

  Certain information and footnote disclosures normally included in
  financial statements prepared in accordance with generally accepted
  accounting principles have been condensed and omitted, although
  management believes the disclosures are adequate to make the
  information presented not misleading.  These interim financial
  statements should be read in conjunction with the Company's most
  recent financial statements included in its report on Form 10-KSB for
  the year ended June 30, 2001 filed with the Securities and Exchange
  Commission.

  Certain reclassifications have been made to conform the prior year
  financial statements to the September 30, 2001 presentation.


2.   Acquisitions
     ------------

  The results of operations of the following business acquisitions have
  been included in the consolidated financial statements from their
  respective dates of acquisition.

  Effective August 1, 2000, the Company acquired the ongoing operations
  of three infusion therapy pharmacies ("Park Infusion") from
  subsidiaries of Amedisys, Inc.  Effective November 11, 2000, the
  Company acquired all the outstanding common stock of MJN Enterprises,
  Inc. d/b/a Total Health Care ("Total Health Care"), an institutional
  pharmacy located in Arlington, Texas.  Effective March 1, 2001, the
  Company acquired the Dallas office operations of Compass Healthcare
  ("Compass"), a retail pharmacy operation located at Medical City
  Hospital of Dallas which deals exclusively in the sale of therapeutic
  compression garments and supplies.  Effective June 1, 2001, the
  Company acquired the operations of Medicine Man, Inc. ("Medicine
  Man"), consisting of four retail pharmacies located near Houston,
  Texas.

                                 -4-

<PAGE>

3. Stockholder's Equity
   --------------------

   Preferred Stock
   ---------------

  In July and August of 2001, 207,710 shares of the Company's Series A
  Preferred Stock were converted into 2,077,100 shares of common stock.

  Stock Options
  -------------

  On August 1, 2001, the Company granted 1,243,000 non-qualified stock
  options under the Company's 2000 Stock Incentive Plan (the "Plan").
  These stock options were issued with an exercise price of $0.73, which
  equaled the current market price of the Company's common stock on the
  date of grant, and are exercisable over four to five years.

4.   Earnings Per Share
     ------------------

  Included in the weighted average shares computation are (a) 28,168,710
  equivalent shares, representing 2,816,871 shares of Series A Preferred
  Stock outstanding as of September 30, 2001, and (b) 30,245,810
  equivalent shares representing 3,024,581 shares of Series A Preferred
  Stock outstanding as of September 30, 2000.

  The weighted average share computation also includes the dilutive
  effect of employee stock options granted in connection with the
  Company's 2000 Stock Incentive Plan.  Stock options outstanding as of
  September 30, 2001 did not have a dilutive effect because the average
  market price of the Company's common stock did not exceed the exercise
  price.

  The following table sets forth the computation of basic and diluted
  earnings per share:

  <TABLE>
  <CAPTION>

                                                    Three Months Ended
                                                       September 30,
                                                    -------------------
                                                    2001           2000
                                                -----------    ------------
   <S>                                          <C>            <C>
   Numerator:
     Net income                                  $    56,780    $    25,240
                                                 ===========    ===========

   Denominator:
  Weighted average common shares:
   Common shares outstanding                       7,796,651      4,508,551
   Common share equivalents of Series A
     preferred stock                              28,168,710     30,245,810
                                                 -----------    -----------
Basic weighted average shares                     35,965,361     34,754,361

  Effect of dilutive securities:
      Employee stock options                               -              -
                                                 -----------    -----------

 Diluted weighted average common shares           35,965,361     34,754,361
                                                 ===========    ===========

 Basic earnings per share                        $         -    $         -
                                                 ===========    ===========

 Diluted earnings per share                      $         -    $         -
                                                 ===========    ===========
  </TABLE>

  On November 1, 2001, the Company granted 200,000 nonqualified stock
  options under the Plan.  These stock options were issued with an
  exercise price of $0.62, which equaled the current market price of the
  Company's common stock on the date of grant, and are exercisable over
  four to five years.

                                  - 5 -

<PAGE>

5.   Segment Information
     -------------------

  The Company applies Statement of Financial Accounting
  Standards No. 131, Disclosures about Segments of an Enterprise
  and Related Information, which establishes standards for
  reporting information about operating segments in financial
  statements.  The Company's business segments for the periods
  covered are comprised of retail and institutional pharmacy
  operations ("Pharmacy"); home health care infusion products
  and services ("Infusion"); Internet pharmacy websites ("Online
  Services"); and wholesale distribution of pharmacy supplies
  ("Non-Drug").

  Summarized segment information as of September 30, 2001 and
  for the three months ended September 30, 2001 and 2000 is as
  follows:
                                       Three Months Ended
                                         September 30,
                                    --------------------------
                                       2001           2000
                                    ------------    ----------
     Segment Revenues:
       Pharmacy                      $11,071,000   $5,756,000
       Infusion                        3,583,000    1,118,000
       Non-Drug                          832,000      822,000
       Online Services                    39,000       18,000
                                     -----------   ----------
     Total segment revenues          $15,525,000   $7,714,000
                                     ===========   ==========

     Segment Earnings:
       Pharmacy                      $   361,000   $  413,000
       Infusion                          682,000      130,000
       Non-Drug                          (17,000)      55,000
       Online Services                   (42,000)    (186,000)
                                     -----------   ----------
     Total segment earnings              984,000      412,000
                                     -----------   ----------

     Corporate expenses                 (630,000)    (186,000)
    Interest and financing
     expense, net                       (114,000)     (98,000)
     Depreciation and
       amortization                     (117,000)     (65,000)
                                     -----------   ----------

     Income before income taxes      $   123,000   $   63,000
                                     ===========   ==========

                                     September
                                        30,
                                       2001
                                   -------------
     Segment Assets:
       Pharmacy                      $ 9,071,000
       Infusion                        6,338,000
       Non-Drug                          715,000
       Online Services                 3,010,000
                                     -----------
     Total segment assets             19,134,000
                                     -----------

     Corporate                           719,000
     Goodwill and other intangible
      assets resulting from
        business acquisitions,
        net                            4,804,000
                                     -----------

        Total assets                 $24,657,000
                                     ===========

                         ***************

                               -6-
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

     With the exception of historical information, the matters
discussed in this Quarterly Report on Form 10-QSB include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").  Forward-looking statements are statements
other than historical information or statements of current
condition.  Some forward-looking statements may be identified by
the use of the terms "expects," "will," "anticipates,"
"estimates," "believes," "plans" and words of similar meaning.
These forward-looking statements relate to our business plans,
programs, trends, results of future operations, funding of future
growth, acquisition plans and other matters.  In light of the
risks and uncertainties inherent in all projected matters, the
inclusion of forward-looking statements in this Form 10-QSB
should not be regarded as a representation by us or any other
person that our objectives or plans would be achieved or that
operating expectations will be realized.  Revenues and results of
operations are difficult to forecast and could differ materially
from those projected in forward-looking statements, such as
statements regarding our belief with respect to the sufficiency
of capital resources, our ability to complete and assimilate
acquisitions, and our ability to compete in our pharmacy and
physician services businesses.  Actual results could differ from
those projected in any forward-looking statements for, among
others, the following reasons:  (a) increased competition from
existing or new competitors, (b) changes in government regulation
of the pharmacy industry, (c) changes in the reimbursement costs
or policies of health insurance companies or federally-funded
insurance programs, (d) the failure of health insurance companies
and federally funded insurance programs to make payments in
accordance with the time periods specified in their agreements
with third-party providers like us, (e) our failure to collect
receivables from health insurance companies who may experience
financial hardships or failure as a result of increases in the
costs of providing health care services in excess of the amount
of revenue received by insurance companies under existing
contractual commitments, (f) our failure to manage our growth and
integrate businesses acquired or to be acquired, and (g) our
failure to attract or retain key employees.  We do not undertake
to update any forward-looking statements contained herein.   For
a more complete discussion of these factors and others, please
see "Certain Business Factors" in Item 1 of the Annual Report on
Form 10-KSB for the year ended June 30, 2001 filed with the
Securities & Exchange Commission.  Readers are cautioned not to
place undue reliance on any forward-looking statements made
herein.

RESULTS OF OPERATIONS

Three Months ended September 30, 2001 and 2000

     Revenues.  For the three months ended September 30, 2001,
revenue increased 101% to $15,524,757, compared to $7,714,070
from the same period in 2000.  Our $7.8 increase revenue was
primarily attributable to (i) $2.9 million of revenue growth
from same-store operations and (ii) $4.9 million of revenue from
companies that we acquired after September 2000.  Revenue at our
same-store operations increased nearly 38% from quarter to quarter,
spurred largely by gains in infusion revenue.

     Gross Profit.  Gross profit (revenues minus cost of goods
sold) for the three months ended September 30, 2001  was
$5,693,427, representing an increase of 103% from $2,810,274 in
the prior period.  Of the $2.9 million increase in gross profit
period to period, approximately $1.4 million was attributable
to our same-store

                               -7-

<PAGE>

operations, and $1.5 million was contributed from our
acquisitions.  Gross margin on a consolidated basis was
essentially flat from period to period, with a 36.4% margin
generated in the first quarter of fiscal 2000 compared to a
36.7% margin generated in the current quarter.  Gross margin
at same-store operations improved to over 39% from the earlier
period, due principally to growth in our infusion operations,
which carry higher margins than our retail and other operations.
The make-up of our acquired revenue was weighted toward retail
business, which carries the lowest margin of our major lines of
business.  Accordingly, the gross margin gain at our same-store
operations from period to period was offset by the addition of
lower margin acquired revenue.  In the future, our gross margin
may fluctuate depending on the nature and size of our acquisitions,
along with changes in the composition of our existing business.
Accordingly, there can be no assurance that our gross margins will
remain at the level experienced during the three months ended
September 30, 2001.

     Selling, General and Administrative Expenses and
Compensation Expenses.  SG&A and compensation expenses were
$5,344,220 for the three-month period ended September 30, 2001,
representing an increase of 103% from $2,629,852 for the prior
year's period.  In general, expenses rose as companies were
acquired in the intervening period.  In the most recent quarter,
SG&A and compensation expenses were 34.4% of total revenue,
compared to 34.1% in the earlier period, as growth in operating
expenses modestly exceeded revenue growth.  For our same-store
operations, these expenses increased to 38% of revenue.  Expenses
increased nearly across the board and were not limited to any
particular operating company.  To a certain extent, some of this
growth was necessary on account of our strong revenue growth.
Some of this growth, however, represents the effects of our
acquisitions and the fact these businesses continue to be in
various stages of assimilation.  Going forward, we believe that
the proportion of corporate overhead expense to total revenue
will decline in upcoming periods, and we also anticipate
operating our various businesses more efficiently.  In the
future, to the extent that we are successful in completing
acquisitions, we expect SG&A and compensation expense margins
will fluctuate, as acquired businesses are assimilated into our
company.  As such, there can be no assurance comparisons of these
expenses from period to period will be entirely meaningful or
that we will be able to maintain SG&A and compensation expenses
in the same proportion to revenue as was experienced in the three-
month period ended September 30, 2001.

     EBITDA.  Our EBITDA, or earnings before interest and
financing expense, income taxes, depreciation and amortization,
increased 57% to $354,426 for the three months ended September
30, 2001, compared to $226,382 a year earlier. EBITDA margin
for the 2001 quarter was 2.3% compared to 2.9% in the previous
period.

     Depreciation, Amortization and Interest Expense.
Depreciation and amortization expenses were $117,336 for the
three months ended September 30, 2001, compared to $65,127 for
the prior period, representing an increase of 80%.  The increase
resulted from our acquisitions and reflects the amortization of
goodwill created through those transactions, along with
depreciation of acquired fixed assets.  Interest expense for the
current period was $96,801, compared to $82,948 in the previous
year.  This increase was a result of our higher average
outstanding loan balances in the current period relative to the
preceding year, despite the fact that our average borrowing rate
during the recent quarter was 6.5%, compared to 10% last year.
At September 30, 2001, we had outstanding bank loans totaling
$7.5 million, compared to $4.5 million at September 30, 2000.  In
undertaking acquisitions over the past twelve months, we utilized
committed bank loans to finance portions of those transactions.

     In June 2001, the Financial Accounting Standards Board
issued SFAS No. 142, Goodwill and Other Intangible Assets, which
establishes new accounting and reporting standards for acquired
goodwill and intangible assets after a business combination is
completed.  Under the provisions of SFAS No. 142, we will no longer
amortize goodwill beginning July 1, 2002.  Instead, goodwill
will be reviewed periodically for impairment and written down
when found to be impaired.  For a general description of
SFAS No. 142 and the Company's timing of adoption, please
see "Recent Accounting Pronouncements" below.

                               -8-

<PAGE>

     Net Income.  Net income for the three months ended September
30, 2001 was $56,780, compared to $25,240 a year ago.
The combined effects from acquisitions of increased revenues and
improved gross margin were largely offset by increased operating
expenses, including those related to our acquisitions, our
increased pharmacy and home office staffing and interest expense.

LIQUIDITY AND CAPITAL RESOURCES

     To date, we have funded the cash portion of our
acquisitions and our growth in revenues and working
capital requirements primarily through bank financing, operating
cash flow and, to a limited extent, asset sales.  We expect the
cash proceeds from bank financing and our operations
to be sufficient to meet our working capital needs over the next
twelve months; however, we do not expect existing cash resources
to be available for acquisitions for a least six months.
Our acquisitions have been typically financed
through bank borrowings.

     As of September 30, 2001, we had borrowed $7.5 million under
our credit facility with Bank of Texas, N.A.  As of November 15,
2001 borrowings under that facility have been reduced to $7.15
million. The borrowing capacity under the Bank of Texas credit
facility is based upon a multiple of our pro forma EBITDA over a
trailing 12-month period.  Therefore, our borrowing capacity
under the credit facility fluctuates.  Amounts advanced under the
credit facility for acquisitions are repayable in installments of
interest only over a six-month period, and thereafter the amount
of an acquisition advance is amortized over a 60-month period.
As of November 15, 2001, approximately $3.9 million of our
borrowings under the credit facility have been for acquisition
purposes, and we are currently making payments of principal and
interest on a consolidated acquisition note issued under the
credit facility on June 12, 2001. Although we anticipate the cash
flow from our acquired businesses to support the payment
obligations on the acquisition note, we cannot give any
assurances in this regard.

     In the next three to six months, we anticipate continuing to
assimilate the acquisitions we have completed to date.  Once
these businesses have been fully incorporated into our company's
operations, we expect to undertake additional acquisitions.
During this assimilation phase, we plan to actively manage our
working capital, specifically focusing on converting accounts
receivable and rationalizing inventory to desired levels.
We anticipate that these efforts will generate between
$750,000 and $1,250,000 in cash, which, in turn, will be utilized
to reduce our trade payable balances and bank debt.  Ongoing cash
requirements are expected to be satisfied through operating cash
flow.

     Thereafter, we would expect to complete additional
acquisitions. The cash necessary to fund these acquisitions will
depend, in part, upon our ability to use our common stock as
consideration for a portion of the acquisitions and available
cash flow.  We will seek to extend our credit facility with Bank
of Texas, N.A., which expires in December of 2001, to provide
us with continued liquidity for acquisitions and, to a lesser
extent, working capital.  To the extent we are unable to complete
acquisitions at attractive prices with acceptable terms and conditions,
our need for additional bank financing will be significantly reduced.

     Over the past year, several of our operating divisions have
experienced significant growth, which has necessitated additional
cash investment to support working capital requirements.
Specifically, accounts receivable and inventory have each grown
as revenue has grown, and this investment has been funded through
operating cash flow and bank borrowings.  We believe that these
operating divisions will continue to experience strong growth,
resulting in a continuing investment in working capital.  The
ultimate amount of financing needed to fund increased receivables
and inventory will depend on a number of factors, including
revenue growth and the relative amount of receivables outstanding
and inventory on hand at any time.  To the extent that we are
able to improve either the timeliness of our cash collections on
receivables or the efficiency of our inventory management, our
requirements for additional

                               -9-

<PAGE>

working capital will be generally reduced.  Alternatively, this
need will generally increase if we are unable to maintain working
capital assets at their current relative levels.

     During the next twelve months, we expect to require
additional capital to support ongoing development efforts and
commercial rollout activities at our Rx-Pro subsidiary.  We
estimate that this subsidiary will require from $2 million to $5
million to carry out its strategic objectives over that period.
Over the near term, we will evaluate various strategies with
respect to raising capital for Rx-Pro, with a view toward
maximizing proceeds and minimizing interest costs and/or equity
dilution.

     To execute our strategic plan over the next twelve
months, we expect that outside capital will be required.  To date,
our external financing needs have been met through our bank
financing arrangements.  Our current bank facility expires in
December 2001.  Although we hope to renew our bank agreement on
terms consistent with those we have enjoyed up to the present,
there can be no assurance that we will be able to renew our bank
financing on equivalent terms, if at all.  Over the past nine
months, as the economy has demonstrated signs of softening,
commercial banks have grown significantly more conservative in
their lending practices.  Given the dramatic change in the
overall credit environment and economy, we are not able to
predict the terms, if any, under which the bank would renew our
loans in December 2001.  If we are able to increase the credit
available to us, we plan to use the proceeds to pursue our
acquisition strategy and fund our working capital requirements.
On the other hand, if our lender requires us to convert our
existing loan balance to term loans, interest and principal
payments would commence and continue for a period ranging between
four to five years, reducing the likelihood that we would be able
to execute our acquisition strategy over the next 12-18 months.
Additionally, we would be required to carefully manage growth in
order to minimize the expected increased investment in working
capital.  If the Bank of Texas does not extend our credit
facility, we would seek other financing to support our working
capital requirements.  We cannot provide any assurance that
alternative financing would be available on commercially
reasonable terms, if at all.

Recent Accounting Pronouncements

  In June 2001, the Financial Accounting Standards Board
("FASB") issued Statements of Financial Accounting Standards No.
141 ("SFAS 141"), "Business Combinations" and SFAS No. 142 ("SFAS
142"), "Goodwill and Other Intangible Assets".

*    SFAS 141 requires all business combinations to be accounted
     for using the purchase method and establishes specific criteria
     for the recognition of acquired intangible assets apart from
     goodwill.  SFAS 141 also changes the treatment of the fair
     value of net assets of an acquired business in excess of
     cost ("negative goodwill").  Currently, negative goodwill
     is recorded as a deferred credit and amortized to earnings
     on a straight-line basis over estimated lives. SFAS 141 requires
     that negative goodwill be recognized as an extraordinary gain
     generally in the period in which the business combination is completed.

*    SFAS No. 142 establishes new accounting standards for
     acquired goodwill and intangible assets after a business
     combination is completed.  SFAS 142 eliminates the
     amortization of goodwill and intangible assets with
     indefinite lives.  Intangible assets with finite lives will
     continue to be amortized over their useful lives.  Adoption
     of this statement will also require the Company to reassess
     the useful lives of all intangible assets acquired, and make
     any necessary amortization period adjustments.  Goodwill and
     other intangible assets not subject to amortization must be
     periodically reviewed for impairment and written-down when
     found to be impaired.

SFAS No. 141 applies to all business combinations initiated after
June 30, 2001.  SFAS No. 142 will be adopted by the Company on
July 1, 2002.

                              -10-

<PAGE>

Goodwill and other intangible assets acquired after June 30, 2001
will be immediately subject to the amortization provisions of SFAS 142.
For goodwill and other intangible assets acquired onor before June 30,
2001, the Company is required to adopt SFAS 142 no later than the
beginning of its fiscal year starting after December 15, 2001.  The
Company will adopt SFAS 142 in its entirety on July 1, 2002.  The Company
is currently evaluating the impact of adopting these new accounting
pronouncements on its consolidated financial position and results of
operations.

  In June 2001, the FASB also approved for issuance SFAS 143
("SFAS 143"), "Asset Retirement Obligations".  SFAS 143
establishes accounting requirements for retirement obligations
associated with tangible long-lived assets, including (1) the
timing of the liability recognition, (2) initial measurement of
the liability, (3) allocation of asset retirement cost to
expense, (4) subsequent measurement of the liability and
(5) financial statement disclosures.  SFAS 143 requires that an
asset retirement cost should be capitalized as part of the cost
of the related long-lived asset and subsequently allocated to
expense using a systematic and rational method.  The Company is
required to adopt SFAS 143 no later than the beginning of its
fiscal year starting after December 15, 2001.  The Company will
adopt the statement effective no later than July 1, 2002.  The
transition adjustment resulting from the adoption of SFAS 143
will be reported as a cumulative effect of a change in accounting
principle. The Company is currently evaluating the impact of
adopting this new accounting pronouncement on its consolidated
financial position and results of operations.

  In October 2001, the FASB also approved SFAS 144 ("SFAS 144"),
"Accounting for the Impairment or Disposal of Long-Lived Assets".
SFAS 144 replaces SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".
The new accounting model for long-lived assets to be disposed of
by sale applies to all long-lived assets, including discontinued
operations, and replaces the provisions of Accounting Principles
Board Opinion No. 30, "Reporting Results of Operations-Reporting
the Effects of Disposal of a Segment of a Business", for the
disposal of segments of a business.  SFAS 144 requires that those
long-lived assets be measured at the lower of carrying amount or
fair value less cost to sell, whether reported in continuing
operations or in discontinued operations.  Therefore,
discontinued operations will no longer be measured at net
realizable value or include amounts for operating losses that
have not yet occurred.  SFAS 144 also broadens the reporting of
discontinued operations to include all components of an entity
with operations that can be distinguished from the rest of the
entity and that will be eliminated from the ongoing operations of
the entity in a disposal transaction.  The provisions of SFAS 144
are effective for financial statements issued for fiscal years
beginning after December 15, 2001 and, generally, are to be
applied prospectively.  The Company is currently evaluating the
impact of adopting this new accounting pronouncement on its
consolidated financial position and results of operations.

                   PART II - OTHER INFORMATION


ITEM 5.   OTHER INFORMATION

     On November 12, 2001, Thomas R. Baker resigned as our President,
     CEO and a director.  On November 15, 2001, Craig Mackey joined our
     company to serve as our President, Chief Operating Officer and a
     director. Attached as an exhibit to the Quarterly Report is a copy
     of the press release announcing the change in management.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits.

     99.1   Press Release.

(b)  Reports Submitted on Form 8-K:

     None.

                              -11-
<PAGE>

                           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.

                                   PARK PHARMACY CORPORATION

                                   Date: November 19, 2001

                                   /s/ Craig Mackey
                                   -----------------------------
                                   Craig Mackey,
                                   President and Chief Operating
                                   Officer

                              -12-