U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

      For the fiscal year ended September 30, 2004

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

      For the transition period from _____ to _____

                      Commission File Number: 000-26740

                         AMERICAN HEALTHCHOICE, INC.
                (Name of small business issuer in its charter)

             New York                                       11-2931252
   (State or other jurisdiction                           I.R.S. Employer
 of incorporation or organization                       Identification No.)

 2221 Justin Road, Suite 119-154, Flower Mound, Texas          75028
       (Address of principal executive offices)              (Zip Code)

                     Issuer's telephone number: (972) 538-0122

            Securities registered pursuant to Section 12(b) of the Act:

      Title of each class           Name of each exchange on which registered
             None                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                   COMMON STOCK, PAR VALUE $.001 PER SHARE
                               (Title of class)

      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 disclosure of delinquent filers in response to Item 405 of
 Regulation S-B is 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: $5,263,000

      State the aggregate market value of the voting and non-voting common
 equity held by non-affiliates computed by reference to the price at which
 the common equity was sold, or the average bid and asked prices of such
 common equity, as of a specified date within the past 60 days. (See
 definition of affiliate in Rule 12b-2 of the Exchange Act). $3,200,000
 as of December 31, 2004*.

                        (ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDINGS DURING THE PAST FIVE YEARS)

      Check whether the issuer has filed all documents and reports required
 to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
 distribution of securities under a plan confirmed by a court. Yes [X] No [ ]

                  (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
 State the number of shares outstanding of each of the issuer's classes of
 common equity, as of the latest practicable date:

 As of December 31, 2004, the Registrant had 100,595,259  shares
 outstanding of common stock and 20,000 shares outstanding of Series B
 preferred stock.

   *  Based on  the  last  reported  price  of an  actual  transaction  in
      Registrant's common  stock  on  December  31,  2004 and  reports  of
      beneficial ownership filed  by directors  and executive  officers of
      Registrant  and  by  beneficial  owners  of  more  than  5%  of  the
      outstanding shares  of  common stock  of  Registrant; however,  such
      determination of shares owned  by affiliates does not  constitute an
      admission of affiliate  status or beneficial  interest in  shares of
      Registrant's common stock.

                    DOCUMENTS INCORPORATED BY REFERENCE
                                   None

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

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.

                                FORM 10-KSB

                             TABLE OF CONTENTS

                                                                        Page
                                                                        ----
                                 PART I

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

 Item 2.   Description of Property..................................     5

 Item 3.   Legal Proceedings........................................     5

 Item 4.   Submission of Matters to a Vote of Security Holders......     6



                                PART II

 Item 5.   Market for Common Equity and Related Stockholder Matters.     6

 Item 6.   Management's Discussion and Analysis or Plan of Operation     7

 Item 7.   Financial Statements.....................................    11

 Item 8.   Changes In and Disagreements with Accountants
             on Accounting and Financial Disclosure.................    25


                                   PART III

 Item 9.   Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the
             Exchange Act...........................................    26

 Item 10.  Executive Compensation...................................    28

 Item 11.  Security Ownership of Certain Beneficial
             Owners and Management..................................    31

 Item 12.  Certain Relationships and Related Transactions...........    32

 Item 13.  Exhibits and Reports on Form 8-K.........................    33

 Signatures.........................................................    36

<PAGE>

                                 PART I


 ITEM 1. DESCRIPTION OF BUSINESS


 History

      American HealthChoice, Inc.,  a  New  York  corporation  formerly known
 as  Paudan,  Inc.  (together  with  its subsidiaries,  the  "Company"),  was
 incorporated on September 14, 1988 and was initially formed with the  intent
 of acquiring a  suitable business that  management determined had  potential
 for future growth.  Until  March  1995 the Company  had  no  operations.  On
 March 31,  1995, the  Company underwent  a comprehensive  reorganization  by
 acquiring American  HealthChoice, Inc.,  a Delaware  corporation  ("American
 HealthChoice (DE)"), formed  in 1993 to  organize and  acquire primary  care
 clinics and  to  provide,  on an  ongoing  basis,  comprehensive  management
 services.  At  the  time  of  this transaction  American  HealthChoice  (DE)
 operated six clinics  which provided medical,  chiropractic, diagnostic  and
 physical therapy  services in  Texas  and  Louisiana.  The Company  acquired
 American  HealthChoice  (DE)  in  a  reverse  acquisition  in  exchange  for
 4,962,000  shares  of  the  Company's  $0.001  par  value common  stock.  In
 connection  with   the   reorganization,  the   stockholders   of   American
 HealthChoice (DE) acquired  91.6 % of the voting shares of the Company.  The
 Company changed its name  from Paudan, Inc.  to American HealthChoice,  Inc.
 during fiscal year 1995.


 General

      The Company  owns, operates  and manages  twelve  clinics.  Eleven  are
 primary care clinics, of which two  are medical clinics (Southcross and  San
 Pedro) and nine are chiropractic clinics.  The Company  also has a  physical
 therapy  facility  at  its largest  chiropractic  clinic.  The  clinics  are
 located in Texas.  The clinic locations are leased except for one clinic  in
 San Antonio.  See Item 2 "Description  of Property."  At September 30,  2004
 the Company had  a total of  fifty-one employees. Of  this number, six  were
 employed by the Company's medical  clinics, thirty-nine by the  chiropractic
 and physical therapy clinics, and six at the Company's corporate office.

      All key  employee/providers  serve  pursuant  to  employment  contracts
 covering compensation, benefits,  terms of  one year  or more  and, in  some
 cases,  agreements  not to  compete upon  termination.  All compensation  is
 based  upon  fixed  salaries  as  set  forth  in  employment  contracts  for
 identifiable services.  Some of these employee/providers are eligible for  a
 bonus; however,  bonuses are  tied directly  to the  employee's  performance
 within the clinic and are not based on referrals.

      The Company  depends  upon  third party  payors  for  reimbursement  of
 approximately  98%  of patient  services.  The  Company believes  that  this
 percentage is comparable to other organizations providing comparable patient
 services.  A  substantial  percentage  of  reimbursements for  services  are
 received  from  patient  insurance  settlements  administered  by  attorneys
 representing patients with third party claims.

      The address  of the  Company's principal  office is  2221 Justin  Road,
 Suite 119-154, Flower Mound, Texas 75028.  The Company's telephone number is
 (972) 538-0122 and its  fax number is  (972) 538-0130.  The  Company has  an
 internet website at www.americanhealthchoice.com.


 Business Strategy

      Operating  income.  The  Company's  primary  measurement  of  financial
 performance is operating income.  In fiscal year 2004, operating income  was
 $133,000 compared to  an operating  loss of $719,000  in  fiscal  2003.  The
 primary reason for the substantial improvement in operating income was a 16%
 increase in net revenue in fiscal 2004 compared to fiscal 2003.  The Company
 foresees operating income continuing to increase at a greater rate than  the
 increase in net revenue.  If the  Company can achieve revenue growth  of 15%
 in fiscal 2005, operating income should exceed $500,000 for the twelve month
 period ending September 30, 2005.

      Growth.  In  June 2003,  the Company  initiated its  Affiliated-Revenue
 program to increase patient  billings through arrangements with  established
 clinics owned and/or operated  by individual doctors.  Under  this  program,
 the Company directs patients to these clinics from its established marketing
 sources.  The Company reports patient billings as revenue and then pays  the
 treating doctor a  fee at  the time of  collection.  The  primary  financial
 benefit  is  additional operating income without  new  fixed costs  such  as
 employee salaries or office rent.  The arrangement is equally attractive  to
 the treating doctor  because of  the increased  number of  patients and  the
 resulting increased income.  To  date the  Company has  focused  on  clinics
 located in and around large Texas cities where there exists no owned clinics
 within  a 30-minute travel  time for prospective patients.  As of  September
 30, 2004, the Company had agreements with 15 doctors and expects to add  one
 new clinic per month in fiscal 2005.  By the fourth quarter of fiscal  2005,
 Management anticipates that the Company will derive 15% of its revenue  from
 affiliated clinics and 85% from company-owned clinics.

      In November  2004, the  Company launched  a Telemedicine  Program  that
 involves  providing  healthcare  to  patients  utilizing  video-conferencing
 telecommunications   and    digital   technology,    including    electronic
 stethoscopes, ophthalmoscopes and otoscopes,  to virtually connect  patients
 to health care  professionals.  The  initial  roll out  using this  emerging
 technology will  be among  company-owned clinics  and  some of  the  clinics
 participating in the Affiliated-Revenue program.  The Company also plans  to
 offer the  technology to  independent medical  clinics in  and around  Texas
 within  twelve  months  time.  The  revenue  stream will  come  from  second
 opinions provided by physicians that comprise the Company's Texas  physician
 subsidiary.   As  of  December 31, 2004,  the  Company  had  one  system  in
 operation at a company-owned clinic.  Management anticipates four systems in
 operation by March 31, 2005.

      In August 2004, the Company installed  a DRX 9000 Spinal  Decompression
 System ("DRX 9000") at its Katy, Texas clinic.  The DRX9000 was developed in
 part by NASA,  and the manufacturer claims  in most  cases it corrects,  not
 just  relieves,  problems  with herniated discs,  degenerative disc disease,
 posterior facet syndrome and sciatica, and is  a  viable and cost  effective
 alternative to surgery. The Company anticipates net revenue of approximately
 $100,000  per quarter  in  fiscal  2005  from this one system.  The  capital
 investment  for the  DRX  9000  is  approximately  $95,000  per  system.  An
 analysis  is currently  being prepared to determine the  operating profit on
 patients treated on the DRX 9000.  After completion of the  operating profit
 analysis,  the Company  will  consider  placement  of additional systems  at
 company-owned clinics.

      In  addition,  the  Company  is  currently  negotiating  a  partnership
 arrangement whereby  the DRX  9000 systems  would be  placed in  established
 clinics owned  and/or operated  by individual  doctors.  The  Company  would
 provide marketing  and  financing, and the  doctor would treat the patients.
 The doctor would be charged a fee for each patient and this fee would  cover
 the cost of marketing and financing plus a profit margin.  If the Company is
 successful  and  finalizes  an  agreement,  Management  anticipates  placing
 approximately six systems per quarter.  The location of the systems could be
 anywhere in the United States.


 Primary Sources of Company Revenue

      Patient  Insurance  Settlements.    The  Company's  clinics  derive   a
 significant portion of their revenue  from insurance settlements to  injured
 patients treated by the clinic.  Typically, a patient seeks treatment from a
 clinic based on  representations by  his/her attorney  or insurance  company
 that payment for  treating the patient  will be forthcoming  upon proof  the
 patient is entitled to  the patient's medical  claims.  The  representations
 are usually in the form of a Letter of Protection (LOP) or a Personal Injury
 Payment (PIP) from the patient/insured's insurance  policy.  Based on  these
 representations, the clinic will treat the patient without requiring payment
 at the time services are rendered.

      Due to the nature  of proving and documenting  the patient claims,  the
 patient's medical bill may not be paid  at the time services  are  rendered.
 The delay in  payment is  usually under one  year but  can be  significantly
 extended past one  year if the  attorney and insurance  company go to  trial
 over the patient's claims.  Upon  an agreement to pay the patient's  claims,
 the clinic is then paid.

      Since many insurance settlements are a compromise between the insurance
 company and the patient,  often the Company must  take a lesser amount  than
 the original fees for services rendered.  In some instances, if the  patient
 is under a LOP and their attorney decides not to pursue the claim, then  the
 clinic may have to write the account off as bad debt.  The Company  believes
 that accounts  receivable  from  patient settlements  have  been  adequately
 reserved to account  for the reduced  collections.  See Item 6 - "Management
 Discussion and Analysis or Plan of Operation."

      Health Plans.  These plans traditionally market health benefit coverage
 to employer groups,  who provide such  benefits to their  employees such  as
 HMOs or PPOs or other health care plans.  Employees can usually enroll their
 spouses and dependents  as well.  Many times employers  will pay for all  or
 nearly all of the cost of covering the employee through a health plan.  Some
 employers will pay for all of  the cost of dependent coverage, while  others
 require the employee to pay for some or all of dependent coverage.

      Once services are rendered to the patient, the clinic generates a  bill
 for the patient and his/her insurance company.  The patient usually makes  a
 nominal co-payment and then  the clinic files the  remaining claim with  the
 applicable insurance company.  Payments  from the insurance company  usually
 take less than thirty days.  Due to patient registration procedures and  set
 fees predetermined by  the insurance company,  the Company  can predict  the
 revenue earned for  the services  rendered.  If  the  clinic's service  fees
 exceed the amounts set by the insurance companies, then the excess amount is
 either paid by the patient or written off as bad debt.  The Company believes
 that accounts  receivable from  patient health  plans have  been  adequately
 reserved to  account  for the  reduced  fees to  be  paid by  the  insurance
 companies.

      Medicare/Medicaid.   The federal  government, through  the Health  Care
 Financing  Administration  ("HCFA"),  allows  federally  qualified   medical
 organizations to  enter  into  agreements to  provide  all  covered  medical
 services to  Medicare/Medicaid beneficiaries  who choose  to enroll  in  the
 program.  None  of the Company's  clinics are solely  dependent on  payments
 from Medicare/Medicaid, nor does any one clinic derive a material portion of
 its revenue from Medicare/Medicaid.

      Self-pay.  All of the Company's clinics involve some level of self-pay.
 Self-pay  is simply that the patient is responsible for payment at the  time
 the services are rendered.  The amount of self-paying patients varies widely
 depending on the specifics of a clinic, its location, and the patient  base.


 Chiropractic Services

      The Company currently owns and operates nine primary care  chiropractic
 clinics and  has fifteen  clinics in  its  Affiliated-Revenue  Program.  All
 clinics are located in suburban areas  and serve the general  population for
 their  surrounding  communities.  The  services  are based  on  preventative
 treatment and treatment of the nerve system and body structure, such as  the
 spinal column.  Most of the chiropractic clinics have a chiropractor that is
 complemented with the appropriate support staff.

      The Company's  patient base  is developed  through its  reputation  for
 quality treatment, patient  referrals, printed  advertisements, and  special
 promotion such as open houses, circulars, community participation, etc.  The
 Company obtains significant referrals  due to its  willingness to work  with
 patients and their insurance company or attorney to provide treatment during
 the pendency of the patient's injury settlement.

      Chiropractic service  is a  highly competitive  business in  which  the
 Company competes with  numerous chiropractors  in the  same suburban  areas.
 Most, if not  all of the  Company's competition comes  from privately  owned
 chiropractic clinics, usually owned by the treating doctor.

      The marketing services offered  by the Company  are designed to  assist
 the clinics  in developing  a patient  base through  promoting the  clinics'
 services.  The  Company provides advice  and assistance to  the clinics  for
 marketing and  advertising.  The  Company  believes that  marketing must  be
 integrated into all aspects of  the  clinic operations including finance and
 office administration.  The Company's patient base is developed through  its
 reputation for quality treatment, patient referrals, printed advertisements,
 and special promotion  such as  discounts, free  initial examinations,  open
 houses,  circulars,  community  participation,  etc.   The  Company  obtains
 significant referrals due to its willingness to work with patients and their
 insurance company or attorney  to provide treatment  during the pendency  of
 the patient's  injury  settlement.  As a  result, the  Company believes  the
 total management of the clinics provides  the economies of scale to  develop
 the clinics and provides the best  use of these services, therefore,  giving
 it a competitive advantage over a privately owned clinic.

      Although the Company believes that the services and benefits it  offers
 to providers make  the Company an  attractive purchaser  of such  practices,
 there can  be  no  assurance  that  the Company  will  be  able  to  compete
 effectively with competitors on terms beneficial to the Company.


 Medical Services

      The Company owns and operates two primary care medical clinics  located
 in San Antonio.  The  patient  source for the  Southcross clinic comes  from
 people  familiar  with  the  clinic's  location,  commercial  contracts  and
 referrals  from  attorneys.   The  San  Pedro  clinic  services  are  almost
 exclusively personal  injury and  worker  compensation  cases.  The  patient
 source for  this  clinic  comes from  attorney  referrals  and  chiropractic
 clinics, including Company-owned clinics in San Antonio.  In addition, these
 clinics will be the base location for the Telemedicine Program.  All billing
 and collection of patient services will be handled by these clinics.


 Government Regulation

      As a participant in the health care industry, the Company's  operations
 are  subject  to  extensive  and  increasing  regulation  by  a  number   of
 governmental entities at the federal, state  and local levels.  The  Company
 is also subject to laws and regulations relating to business corporations in
 general.  The  Company believes its  operations are  in material  compliance
 with applicable laws.


 ITEM 2. DESCRIPTION OF PROPERTY

      The Company  leases approximately  900 square  feet  in a  building  in
 Flower Mound, Texas  at a monthly  rent  $2,200 for use as its headquarters.
 The Company currently owns a parcel of land in San Antonio, Texas, on  which
 the Company's Southcross clinic is located.

      The Company  owns, operates  and manages  twelve  clinics.  Eleven  are
 primary care  clinics,  of  which  two are  medical  clinics  and  nine  are
 chiropractic clinics.  The Company also  has a physical therapy facility  at
 its largest chiropractic  clinic.  The  following table  lists the  clinics,
 locations, monthly rents, services provided, and date acquired or  commenced
 operation by the Company.


Clinics in Operation                   Monthly
   in Fiscal 2004        Location       Rent    Services Provided  Date Acquired
--------------------  ---------------  -------  ----------------- --------------

United Chiropractic   Katy, TX         $4,200   Chiropractic &    October 1994
Clinic                                          physical therapy

United Chiropractic   San              $2,600   Chiropractic &    July 1994
Clinic (Wurzbach)     Antonio, TX               physical therapy

United Chiropractic   San              $1,100   Chiropractic &    October 1994
Clinic (San Pedro)    Antonio, TX               physical therapy

Atlas Sports & Injury San              $1,100   Physical therapy  October 1994
(Bandera)             Antonio, TX

United Chiropractic   San              $2,100   Chiropractic      October 1994
Clinic (Bandera)      Antonio, TX

San Pedro Medical     San              $1,100   Primary medical   October 1994
Clinic                Antonio, TX               care

Southcross Medical    San              $2,000   Urgent & primary  December 1995
Clinic                Antonio, TX               medical care

United Chiropractic   New                   -   Chiropractic      July 1994
(Uptown)*             Orleans, LA

Valley Family Health  McAllen, TX      $3,000   Chiropractic      January 1996
Center

Valley Family Health  San              $1,100   Chiropractic      September 2000
Center                Benito, TX

Crosstown             Corpus           $1,000   Chiropractic      September 2000
Chiropractic Clinic   Christi, TX

Laredo Family Health  Laredo, TX       $4,200   Chiropractic      September 2000
Clinic

Total rent                            $23,500


 * Sold September 2004


 ITEM 3. LEGAL PROCEEDINGS

      As of September 30, 2004, there  are no legal proceedings that  involve
 material amounts of exposure for the Company.


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

      The 2004 Annual Meeting of Stockholders was held September 2, 2004.  An
 Information  Statement  was  furnished  to  all  stockholders  pursuant   to
 Regulation 14(c)  of the  Securities Act  of  1934.  Following  is  a  brief
 description of each matter voted upon:

                                                         Against
                                                           or
 Matter                                      Votes For  Withheld  Abstentions
 ------                                      ---------  --------  -----------
 Election of Directors:
   Joseph W. Stucki, D.C.                    62,223,000    None       None
   Jeffrey Jones, D.C.                       62,223,000    None       None
   Michael R. Smith, M.D.                    62,223,000    None       None
   V. John Mansfield                         62,223,000    None       None

 Approval to increase the number of
 authorized shares common stock from         62,223,000    None       None
 115,000,000 shares to 200,000,000 shares

 Approval to change the Company's state of
 incorporation from New York to Texas        62,223,000    None       None

 Ratification of the appointment of Lane
 Gorman Trubitt L.L.P. as the Company's      62,223,000    None       None
 independent auditors for 2004


                                PART II


 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Market Information. The  Company's common stock  is quoted  on the  OTC
 Bulletin Board under the symbol "AMHI".

 The following table presents the high and low bid prices for each quarter:

                  Quarter Ended        High Bid   Low Bid
                  -----------------    --------   -------
                  December 31, 2002     $0.05      $0.002
                  March 31, 2003        $0.01      $0.005
                  June 30, 2003         $0.013     $0.004
                  September 30, 2003    $0.006     $0.004
                  December 31, 2003     $0.05      $0.005
                  March 31, 2004        $0.023     $0.009
                  June 30, 2004         $0.024     $0.007
                  September 30, 2004    $0.054     $0.01

      Holders.   Based  on information  provided  by the  Company's  transfer
 agent, the Company  had approximately 100  holders of record  of its  common
 stock at September 30, 2004.

      Dividends.  The Company paid no cash dividends since its inception, and
 it is unlikely  that any cash  dividends will be  paid  in the  future.  The
 declaration in the  future of any  cash or stock  dividends will  be  at the
 discretion of the Board  of Directors depending  upon the earnings,  capital
 requirements  and  financial  position  of  the  Company,  general  economic
 conditions and other pertinent factors.  There are no dividend  restrictions
 in any creditor or other agreement to which the Company is a party.


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


 Results of Operations

      The following summary of earnings and related discussion of the results
 of operations should be read in conjunction with the Company's  Consolidated
 Financial Statements and Notes thereto included elsewhere in this document.


                                           Years Ended September 30,
                                           -------------------------
                                     2002             2003            2004
                                  ----------       ----------      ----------
 Revenues:
   Patient billings              $ 8,302,000      $ 8,175,000     $ 9,741,000
   Allowance for discount
     on billings                   3,538,000        3,652,000       4,478,000
                                  ----------       ----------      ----------
   Net Patient Revenues           4,7634,000        4,523,000       5,263,000

 Operating Expenses:
   Compensation and benefits       2,948,000        2,938,000       2,733,000
   Allowance for doubtful
     accounts at closed clinics    1,810,000          300,000               -
   General and administrative        908,000          712,000         922,000
   Marketing and advertising         893,000          949,000       1,151,000
   Rent                              391,000          343,000         324,000
                                  ----------       ----------      ----------
   Total Operating Expenses        6,950,000        5,242,000       5,130,000
                                  ----------       ----------      ----------
 Operating Income (Loss)          (2,186,000)        (719,000)        133,000
   Other Income (Expense):
   Interest expense and
     other costs of borrowing        (63,000)         (72,000)        (78,000)
   Bad debt expense                        -                -      (1,525,000)
   Other expense                           -                -         (28,000)
   Other income                       95,000                -               -
                                  ----------       ----------      ----------
   Total Other Income (Expense)       32,000          (72,000)     (1,631,000)
                                  ----------       ----------      ----------
   Loss before Impairment Loss   $(2,153,000)     $  (791,000)    $(1,498,000)
                                  ==========       ==========      ==========



 Fiscal year ended September 30, 2004 Compared to Fiscal year ended
 September 30, 2003

      Patient Billings.   For  the  fiscal  year  ended  September 30,  2004,
 patient billings increased $1,566,000 from $8,175,000 in 2003 to  $9,741,000
 in 2004.  The  increase is  attributable  to  $815,000 increase  in  patient
 billings from affiliated clinics  in the 2004 period  and a $751,000 or  10%
 increase in patient billings from owned clinics in the 2004 period  compared
 to the 2003 period.

      Allowance  for  Discount  on  Billings.   For  the  fiscal  year  ended
 September 30, 2004,  allowance  for  discount  on  billings  increased  from
 $3,652,000 for the same period in 2003  to $4,478,000 in 2004.  $700,000  of
 the increase is  attributable to  the increase  in patient  billings in  the
 amount of $1,566,000 and $126,000 to  an upward adjustment in the  allowance
 as a percentage of patient billings  from 45% in the  2003 period to 46%  in
 the  2004 period.  The adjustment reflects an  increase in the estimate  for
 amount of personal injury cases written off in the 2004 period due primarily
 to the attorney  dropping the client  for lack of  insurance  coverage.  The
 collection percentage on cases that were  settled by patient's attorneys  in
 2004 compared to 2003 was not materially different.

      Compensation and Benefits.   For the  fiscal year  ended September  30,
 2004, compensation  and  benefits  decreased  from  $2,938,000  in  2003  to
 $2,733,000  in  2004.  The  decrease  is  primarily  attributable  to  stock
 compensation in connection with the  employment agreement for the  president
 and CEO  in the  amount of  $150,000 in  the  2003  period.  The  number  of
 employees at the clinics and corporate office was unchanged in 2004 compared
 to 2003.

      General and Administrative.   For the fiscal  year ended September  30,
 2004,  general  and  administrative  increased  from  $712,000  in  2003  to
 $922,000 in 2004.  Due to  the  related increase in revenue, management fees
 attributable to patient  billings from affiliated  clinics were $179,000  in
 the  2004  period  compared  to  $24,000  in the  2003  period.   Legal  and
 professional expense increased from $84,000 in  the 2003 period to  $120,000
 in  the  2004  period  due  primarily to  investor  relation  expenses.   In
 addition, depreciation expense increased from $41,000  in the 2003 period to
 $61,000 in the 2004 period due primarily to acquisition of clinic equipment.

      Marketing and Advertising.   For the  fiscal year  ended September  30,
 2004,  marketing  and  advertising  increased  from  $949,000  in  2003   to
 $1,151,000 in 2004.  The 21% increase  is comparable to the 19% increase  in
 patient billings in the 2004 period compared to the  2003 period.  Marketing
 and advertising expense as a percentage  of patient billings was  comparable
 for both periods.

      Rent.  For the fiscal year ended September 30, 2004, rent was  $324,000
 compared  to  $343,000  in  the  2003  period.  The  decrease  is  primarily
 attributable to  the  Company  moving its  corporate  office  to  a  smaller
 location at the end of January 2003.  The monthly savings are  approximately
 $6,000 per month, which reduced rent expense for the 2004 period by  $18,000
 compared to the 2003 period.

      Other  Income  and  Expense.   Interest  expense  and  other  costs  of
 borrowing increased  from $72,000  in 2003  to  $78,000  in 2004.  Bad  debt
 expense of $1,525,000  was included  in other  expense for  the fiscal  year
 ended September 30,  2004.  $900,000  is  attributable to  the write-off  of
 certain  uncollectible  accounts  receivable acquired  in  August  in  2000.
 Approximately $300,000 of the $625,000 remainder is the result  of  specific
 accounts written off for non-recurring reasons such as attorneys withdrawing
 from practice and failing to settle  claims or withholding payment on  cases
 settled with insurance companies.  $900,000  of the $1,525,000 was  reported
 in the quarter  ended  June 30, 2004.  Since the bad  debt expense does  not
 pertain to fiscal year  2004 operations, the bad  debt expense was  reported
 after operating income as a other expense.


 Fiscal Year  Ended September  30, 2003  Compared to  the Fiscal  Year  Ended
 September 30, 2002

      Patient Billings.   For  the  fiscal  year ended  September  30,  2003,
 patient billings decreased from $8,302,000 in  2002  to  $8,175,000 in 2003.
 The decrease  is attributable  to a  decrease in  patient billings  for  the
 clinics acquired  in  September 2000  in  the  amount of  $140,000  and  the
 Louisiana clinics in the amount of $126,000 offset by an increase in patient
 billings for the other Texas chiropractic clinics of $139,000.

      Allowance  for  Discount  on  Billings.   For  the  fiscal  year  ended
 September 30, 2003,  allowance  for  discount  on  billings  increased  from
 $3,538,000 for the same period in 2002 to $3,652,000 in 2003.  The  increase
 is attributable to an upward adjustment in the allowance as a percentage  of
 patient billings from 43% in the 2002 period to 45% in the 2003 period.  The
 adjustment reflects an increase in the  number of new personal injury  cases
 written off in  the 2003 period  due primarily to  the absence of  insurance
 coverage.  The collection percentage on cases that were settled by patient's
 attorneys in 2003 is comparable to 2002.

      Compensation and Benefits.   For the  fiscal year  ended September  30,
 2003, compensation  and  benefits  decreased  from  $2,948,000  in  2002  to
 $2,938,000  in  2003.  The  decrease  is primarily  attributable  to  salary
 reductions at  the clinics  acquired  in September  2000  in the  amount  of
 $150,000. off-set by  stock compensation in  connection with the  employment
 agreement for the president and CEO in  the amount of $150,000.  The  number
 of clinic employees  is unchanged in  the 2003 period  compared to the  same
 period in 2002.

      Allowance for doubtful accounts  at closed clinics.  The  allowance  of
 $300,000 for the  fiscal year ended  September 30, 2003  is attributable  to
 uncollectible patient billings  at physical therapy  clinics closed in  1998
 and is an upward adjustment to the allowance reported in fiscal 2002.

      General and Administrative.   For the fiscal  year ended September  30,
 2003, general and administrative decreased from $908,000 in 2002 to $712,000
 in  2003.  The decrease  is attributable  to reductions  in equipment  lease
 expense and  insurance expense  at the  corporate office  in the  amount  of
 $78,000.  In addition, depreciation and amortization decreased from $144,000
 in 2002 to $41,000 in 2003.  The decrease was primarily due to  amortization
 of financing costs in the amount  of $88,000 in the  2002 period.  The  2003
 period has no amortization of financing costs since the costs were amortized
 in prior years.

      Marketing and Advertising.   For the  fiscal year  ended September  30,
 2003, marketing and advertising increased from $893,000 in 2002 to  $949,000
 in  2003.  The  increase is  attributable to  a greater  number of  personal
 injury cases in the 2003 period.

      Rent.  For the fiscal year  ended September 30, 2003, rent is  $343,000
 compared  to  $391,000  in  the  2002  period.  The  decrease  is  primarily
 attributable to  the  Company  moving its  corporate  office  to  a  smaller
 location at the end of January 2003.  The monthly savings are  approximately
 $5,000 per month.

      Other Income and  Expense.  The  2002 period includes  other income  of
 $95,000 from a  lawsuit settlement.  Interest  expense  and  other costs  of
 borrowing increased from $63,000 in 2002  to $72,000 in 2003.  The  increase
 is attributable  to interest  expense  on notes  payable  in the  amount  of
 $69,000 issued to acquire automobiles in 2003.


 Liquidity and Capital Resources

      For the fiscal  year ended  September 30,  2004, net  cash provided  by
 operating activities was $46,000 as compared to $36,000 for the fiscal  year
 ended September 30, 2003.  Net cash provided by operating activities in  the
 2004 period was primarily attributable to non-cash expenses in the amount of
 $4,478,000 for  allowance for  doubtful accounts  and  bad debt  expense  of
 $1,525,000 offset by a net loss  of $1,498,000 and a $5,185,000 increase  in
 accounts receivable.  Net cash provided  by operating activities in the 2003
 period was  primarily attributable  to non-cash  expenses in  the amount  of
 $3,952,000 for allowance  for doubtful accounts  and  goodwill impairment of
 $1,000,000 offset by a net loss  of $1,791,000 and a $3,661,000 increase  in
 accounts receivable.

      Net cash  used  in investing  activities  for the  fiscal  years  ended
 September  30,  2004  and  September  30,  2003  was  attributable  to   the
 acquisition of  clinic  equipment in  the  amounts of  $5,000  and  $11,000,
 respectively.

      Net cash  used  in financing  activities  for the  fiscal  years  ended
 September 30, 2004 and September 30, 2003 was the net difference of proceeds
 from new notes payable and payments  on notes payable and capital leases  in
 the amounts of $53,000 and $33,000, respectively.

      During  the  year  ended  September  30,  2004,  cash  generated   from
 operations was not sufficient to meet current obligations by $410,000.  As a
 result, the  Company was  unable  to pay  $110,000  in compensation  to  its
 president and $300,000  in payroll taxes  in  the 2004  period.  Due to  the
 current year shortfall  and insufficient cash  from operations  in 2003  and
 2002, the  president  was due  $500,000  in compensation  and  the  Internal
 Revenue Service  $565,000  in  delinquent payroll  taxes  and  penalties  at
 September 30, 2004.  The  Company  intends to borrow  $265,000 from  related
 parties  before  January 31, 2005 to  pay  delinquent payroll  taxes through
 June 30, 2004  and  intends  to  pay the remaining  balance  through monthly
 installment payments pending negotiations with the IRS.

      The Company must achieve minimum net revenue of approximately  $400,000
 per month  to meet  current obligations.  For  the  six  month period  ended
 September 30,  2004, net  revenue, excluding  the Louisiana  clinic sold  in
 September 30, 2004 was $2,700,000,  which exceeded the minimum.  Collections
 during  the  same period  were $2,200,000.  Since  the period  from  revenue
 recognition to collection  is approximately  180 days  for at  least 50%  of
 patient billings, the  Company believes it  will have  sufficient cash  from
 operations to meet current obligations, including payroll taxes.

      In connection with the clinic acquisition  in August 2000, the  Company
 issued a note payable, which had an original due date of September 1,  2003,
 which has been extended to December 31, 2004.  The amount due as of December
 31, 2004 including accrued interest is $1,127,500.  The Company has obtained
 an extension until December  31, 2005.  Interest  will accrue at $6,000  per
 month and interest payments will be $12,000 per month.

      At September 30, 2004,  the  Company  was  delinquent on  payments  for
 unsecured creditor claims according to the Plan of Reorganization  confirmed
 by the Bankruptcy Court in September 2000  in the amount  of $344,000.  Less
 than five creditors have  pursued collection of claims  and the Company  was
 able to meet these payments of approximately $40,000 and avoid legal  action
 on the part  of these creditors.  Per the Plan of Reorganization the  claims
 were to be paid  in three annual installments  due September 2001, 2002  and
 2003.  Since  the Bankruptcy Court  has closed the  case and  no longer  has
 jurisdiction, a creditor would have  to file a civil  suit in a Texas  state
 court.  Due to the four year statute of limitation on filings civil suits in
 Texas, a  creditor  must  initiate  a  suit  by  September  2005  to  pursue
 collection of the  September 2001  installment and  one year  later for  the
 second and third  installments.  At  the present time,  Management does  not
 foresee  any  creditors  initiating legal  action.  However,  there  are  no
 assurances that an individual creditor or group of creditors will not pursue
 legal action which could result in adverse consequences to the Company.

      In connection  with  the placement  of  DRX 9000  Spinal  Decompression
 Systems, the  Company  may  enter  into  capital  lease  obligations  up  to
 $2,500,000. The Company intends to finance 100% of the cost of the equipment
 over  a three year lease term.  Management does  not  anticipate  any  other
 material capital  expenditures requiring cash in the next twelve months.


 Forward-Looking Information

      This report contains certain forward-looking statements and information
 relating to  the Company  that are  based on  the beliefs  of the  Company's
 management  as  well  as  assumptions  made  by  and  information  currently
 available to the Company's management. When  used in the report, words  such
 as "anticipate," "believe,"  "estimate," "expect,"  "intend," "should,"  and
 similar expressions,  as  they relate  to  the Company  or  its  management,
 identify forward-looking statements.  Such  statements  reflect the  current
 views of  the Company  with respect  to  future events  and are  subject  to
 certain risks, uncertainties,  and assumptions relating  to the  operations,
 results of  operations,  liquidity,  and growth  strategy  of  the  Company,
 including competitive factors  and pricing pressures,  changes in legal  and
 regulatory requirements, interest  rate fluctuations,  and general  economic
 conditions, as well as other factors  described in this report.  Should  one
 or more of  the risks materialize,  or should  underlying assumptions  prove
 incorrect, actual  results  or  outcomes  may  vary  materially  from  those
 described herein as anticipated, believed, estimated, expected, or intended.


 ITEM 7. FINANCIAL STATEMENTS

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES


                                    INDEX


                                                                  Page
                                                                  ----
 FINANCIAL STATEMENTS:

 Report of Independent Registered Public Accounting Firm           12

 Consolidated Balance Sheet - September 30, 2004                   13

 Consolidated Statements of Operations - Years Ended               14
      September 30, 2003 and 2004

 Consolidated Statements of Changes in Stockholders' Equity        15
      - Years Ended September 30, 2003 and 2004

 Consolidated Statements of Cash Flows - Years Ended               16
      September 30, 2003 and 2004

 Notes to Consolidated Financial Statements                        17

<PAGE>


           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


 To the Board of Directors and Stockholders
 American HealthChoice, Inc. and Subsidiaries


 We have  audited the  accompanying consolidated  balance sheet  of  American
 HealthChoice, Inc.  and  Subsidiaries  as  of  September 30, 2004,  and  the
 related consolidated  statements  of operations,  changes  in  stockholders'
 equity, and  cash flows  for each  of  the two  years  in the  period  ended
 September  30,  2004.   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
 audits.

 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 audits to obtain reasonable assurance about whether the
 consolidated  financial statements  are free  of material  misstatement.  An
 audit includes examining, on a test  basis, evidence supporting the  amounts
 and  disclosures  in  the  financial statements.   An  audit  also  includes
 assessing  the  accounting  principles  used  and significant estimates made
 by  management,  as  well as  evaluating  the  overall  financial  statement
 presentation.  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  consolidated  financial
 position of American HealthChoice, Inc. and subsidiaries as of September 30,
 2004, and the results of their operations  and their cash flows for each  of
 the two years in the period ended September 30, 2004 year in conformity with
 accounting principles generally accepted in the United States of America.


 Lane Gorman Trubitt, L.L.P.
 Dallas, Texas
 December 3, 2004

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEET
                              SEPTEMBER 30, 2004


                                    ASSETS
 Current Assets:

 Cash                                                     $        9,571
 Accounts receivable, less allowance for doubtful
   accounts of $ 5,182,043                                     4,681,537
 Notes receivable                                                142,512
 Other current assets                                             56,186
                                                           -------------
      Total current assets                                     4,889,806

 Property and equipment, net                                     395,829
 Goodwill, net                                                 1,348,570
                                                           -------------
      Total assets                                        $    6,634,205
                                                           =============


                  LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities:

 Notes payable and capital lease obligations              $      201,968
 Acquisition note payable including accrued interest           1,110,500
 Bankruptcy claims of unsecured creditors                        343,801
 Bankruptcy claims of related parties                            477,256
 Accrued payroll taxes and penalties                             565,361
 Compensation due executive officer                              528,231
 Accrued expenses                                                260,743
 Accounts payable                                                315,311
                                                           -------------
      Total current liabilities                                3,803,171


 Commitments and Contingent Liabilities

 Stockholders' Equity:

 Preferred stock, $.001 par value; 5,000,000
   shares authorized; 20,000 shares issued                     2,000,000
 Common stock, $.001 par value; 200,000,000 shares
   authorized;100,595,259 shares issued and outstanding          100,595
 Options to acquire common stock                                   8,000
 Additional paid-in capital                                   19,967,989
 Accumulated deficit                                         (19,245,550)
                                                           -------------
      Total stockholders' equity                               2,831,034
                                                           -------------
      Total liabilities and stockholders' equity          $    6,634,205
                                                           =============


      See accompanying notes to these consolidated financial statements.


<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS


                                                   Years Ended September 30,
                                                   -------------------------
                                                      2003           2004
                                                   ----------     ----------
 Revenues:
   Patient billings                               $ 8,175,076    $ 9,740,645
   Allowance for discount on billings               3,652,372      4,478,107
                                                   ----------     ----------
             Net revenues                           4,522,704      5,262,538

 Operating Expenses:
   Compensation and benefits                        2,937,559      2,732,205
   Marketing and advertising                          948,700      1,151,457
   General and administrative                         712,416        922,015
   Allowance for doubtful accounts
     at closed clinics                                300,000              -
   Rent                                               343,166        323,766
                                                   ----------     ----------
      Total operating expenses                      5,241,841      5,129,443

                                                   ----------     ----------
 Operating Income (Loss)                             (719,137)       133,095

 Other Expenses:
   Interest expense and other costs of borrowing      (72,249)       (77,309)
   Bad debt expense                                         -     (1,525,000)
   Other expense                                            -        (28,339)
                                                   ----------     ----------
      Total other expenses                            (72,249)    (1,630,648)

                                                   ----------     ----------
 Loss Before Impairment Loss                         (791,386)    (1,497,553)

 Impairment Loss                                    1,000,000              -
                                                   ----------     ----------
 Net Loss                                         $(1,791,386)   $(1,497,553)
                                                   ==========     ==========

 Basic and Diluted Net Loss Per Share             $     (0.02)   $     (0.01)

 Weighted Average Common Shares Outstanding        88,100,000    104,812,000


      See accompanying notes to these consolidated financial statements.

<PAGE>
<TABLE>

                                        AMERICAN HEALTHCHOICE, INC.
                                             AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                             FOR THE YEARS ENDED SEPTEMBER 30, 2003 AND 2004


                                                                               Option to    Additional
                                         Common Stock       Preferred Stock     Acquire      Paid-in     Accumulated
                                      Shares      Amount   Shares     Amount    Common       Capital       Deficit        Total
                                                                                 Stock
                                    ----------    -------  ------    --------   --------    ----------   -----------    ----------
 <S>                               <C>           <C>      <C>       <C>        <C>         <C>          <C>            <C>
 Balances at September 30, 2002     88,100,766   $ 88,100       -   $       -  $  8,000    $20,534,684  $(15,956,611)  $ 4,674,173

 Issuance of common stock in
   connection with employment
   agreement                        15,000,000     15,000       -           -         -        135,000             -       150,000
 Net loss                                    -          -       -           -         -              -    (1,791,386)   (1,791,386)
                                   -----------------------------------------------------------------------------------------------
 Balances at September 30, 2003    103,100,766    103,100       -           -     8,000     20,669,684   (17,747,997)    3,032,787

 Issuance of common stock in
   connection with debenture
   conversion                        7,258,493      7,259       -           -         -      1,303,141             -     1,310,400
 Cancellation of common stock
   in connection with purchase
   adjustment                      (13,164,000)   (13,164)      -           -         -         13,164             -             -
 Issuance of common stock in
   connection with consulting
   and legal agreements              7,000,000      7,000       -           -         -         72,000             -        79,000
 Issuance of Series B Preferred
   Stock                                     -          -  20,000   2,000,000         -     (2,000,000)            -             -
 Cancellation of common stock in
   connection with clinic sale      (3,600,000)    (3,600)      -           -         -        (90,000)            -       (93,600)
 Net loss                                    -          -       -           -         -              -    (1,497,553)   (1,497,553)
                                   -----------------------------------------------------------------------------------------------
 Balances at September 30, 2004    100,595,259  $ 100,595  20,000  $2,000,000  $  8,000    $19,967,989  $(19,245,550)  $ 2,831,034
                                   ===============================================================================================


                                  See accompanying notes to these consolidated financial statements.

</TABLE>
<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                    Years Ended September 30,
                                                    --------------------------
                                                       2003            2004
                                                    ----------      ----------
 Cash Flows From Operating Activities:
 Net loss                                          $(1,791,386)    $(1,497,553)
 Adjustments to reconcile net loss to net cash
     provided by operating activities:
   Allowance for discount on billings                3,952,372       4,478,107
   Loss on sale and disposal of assets                       -          28,300
   Bad debt expense                                          -       1,525,000
   Impairment loss                                   1,000,000               -
   Employee compensation-stock                         200,175               -
   Depreciation and amortization                        40,969          60,779
   Other                                                     -          34,062
 Change in operating assets and liabilities, net:
   Accounts receivable-trade                        (3,660,564)     (5,185,204)
   Other assets                                          3,529               -
   Accounts payable and accrued expenses               290,870         602,684
                                                    ----------      ----------
       Net cash provided by operating activities        35,965          46,175

 Cash Flows From Investing Activities:
   Property and equipment                              (11,454)         (4,667)
                                                    ----------      ----------
        Net cash used in investing activities          (11,454)         (4,667)

 Cash Flows From Financing Activities:
   Proceeds from notes payable                          98,995         123,500
   Payments on notes payable and capital leases       (113,731)       (176,508)
                                                    ----------      ----------
        Net cash used in financing activities          (14,736)        (53,008)

                                                    ----------      ----------
 Net Increase (Decrease) In Cash                         9,775         (11,500)
 Cash At Beginning Of Year                              11,296          21,071
                                                    ----------      ----------
 Cash At End Of Year                               $    21,071     $     9,571
                                                    ==========      ==========

 Supplemental Disclosure Of Cash Flow Information:
   Income taxes paid                               $       500     $     1,500
   Interest paid                                   $     4,800     $     5,000

 Supplemental Disclosure Of Non-Cash Transactions:
   Purchase of equipment through issuance of
     notes payable and capital leases                   69,256         120,000
   Cancellation of debt and stock in connection
     with sale of clinic                                     -         212,200
   Sale of clinic assets                                     -         308,200
   Issuance of stock in connection with legal
     and consulting agreements                               -          79,000
   Conversion of debenture into stock                        -       1,310,400
   Issuance of note receivable in connection
     with sale of clinic                                     -          96,000


      See accompanying notes to these consolidated financial statements.

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


 1. Organization and Summary of Significant Accounting Policies

 Organization - American  HealthChoice, Inc. and  Subsidiaries (the  Company)
 consists of a parent company and twelve clinics providing medical,  physical
 therapy, and  chiropractic services  in San  Antonio, McAllen,  Laredo,  San
 Benito,  Corpus  Christi  and  Houston,  Texas.  Substantially  all  of  the
 Company's revenues  are  derived  from chiropractic,  physical  therapy  and
 medical services  provided to  individuals living  in  the vicinity  of  the
 clinics.

 Consolidation Policy  -  The accompanying  consolidated financial statements
 include the  accounts of the Company and its wholly-owned subsidiaries.  All
 material inter-company  accounts and  transactions have  been eliminated  in
 consolidation.

 Net Patient Revenues - Revenue is  recognized upon performance of  services.
 Substantially all of the Company's revenues are derived from personal injury
 claims and claims  filed on  major medical  policies, worker's  compensation
 policies,  Medicare  or  Medicaid.   Allowances  for  discounts  on  current
 services provided  are recognized  in the  periods  the related  revenue  is
 earned.  Net  patient revenues  are  reported at  the  estimated realizeable
 amount from patients,  third party payors and others  for services rendered.
 Allowances  are maintained at  levels considered  appropriate by  management
 based  upon  historical  charge-off  experience  and  other  factors  deemed
 pertinent  by management.  Fiscal 2004 and 2003  net patient revenues;  as a
 percentage of total revenues, for medical and chiropractic services amounted
 to 8% and 92%, 8% and 92%, respectively.  During fiscal year ended September
 30, 2004, the Company wrote-off $1,525,000 in receivables  related  to prior
 years  and  not current year operations.  Therefore, these amounts have been
 shown as  a separate  line item under  other expenses  on  the  consolidated
 statements of operations.  See Footnote 10 for  Concentration of Credit Risk
 and accounts receivable mix at September 30, 2004 and 2003.

 Cash Equivalents  - For  purposes of  the  consolidated statements  of  cash
 flows, the Company  considers all highly  liquid debt instruments  purchased
 with a maturity of three months or less to be cash equivalents.  The Company
 maintains its accounts at financial institutions located in Texas.  The bank
 accounts are  insured by  the Federal  Deposit Insurance  Corporation up  to
 $100,000.  The Company  has not  experienced  any  losses,  outside  banking
 activities, in such accounts and believes  it is not exposed to  significant
 credit risk.

 Capital Leases  -  The  assets and  related  obligations  for  property  and
 equipment under capital leases are initially recorded at an amount equal  to
 the present value of  future minimum lease payments.  Assets  under  capital
 leases are  amortized over  the life  of the  lease or  useful life  of  the
 assets.  Interest  expense is  accrued  on  the  basis  of  the  outstanding
 obligations under capital leases.

 Advertising Costs - The Company's policy is to expense all advertising costs
 in the period in which advertising  first takes place.  Advertising  expense
 was approximately $1,151,000 and $949,000 for the years ended September  30,
 2004 and 2003 respectively.

 Property and Equipment, net - Property and equipment are stated at cost less
 accumulated  depreciation.  Depreciation  is  provided  over  the  estimated
 useful lives of the related assets, primarily using straight-line methods.

 Income taxes  -  The  Company accounts  for  income  taxes  under  Financial
 Accounting Standards Board (FASB) Statement No. 109, "Accounting for  Income
 Taxes." FASB  Statement  No. 109  requires  that deferred  income  taxes  be
 recorded on  a  liability  method  for  temporary  differences  between  the
 financial reporting and tax bases of a company's assets and liabilities,  as
 adjusted when new tax rates are enacted.

 Goodwill  -  The  Company  elected  to  adopt  the  provisions  of Financial
 Accounting Standard ("FAS") 142, "Goodwill  and Other Intangible Assets"  as
 of  October 1, 2001.  This  policy requires  an impairment  test,  which  is
 performed  by  the  Company on  an  annual basis.  See  Footnote  4  to  the
 financial consolidated financial statements.

 Recent Accounting Pronouncements  - During the  fiscal year ended  September
 30, 2004, the  Financial Accounting Standards  Board ("FASB") released  FASB
 Statements No. 147 - 153.  The  Company  believes  that the impact of  these
 new standards will not have a material effect on the Company's  consolidated
 financial position, results of operations or disclosures.

 Use of  Estimates  -  In  preparing  the  Company's  consolidated  financial
 statements in conformity  with accounting principles  generally accepted  in
 the United States of America, management  is required to make estimates  and
 assumptions that affect the amounts  reported in these financial  statements
 and accompanying notes.  Actual results could differ from those estimates.

 Earnings per  Share  -  Basic earnings  per  share are  computed  using  the
 weighted-average number of common shares outstanding.  Diluted earnings  per
 share are  computed using  the  weighted-average common  shares  outstanding
 after giving effect to  potential common stock from  stock options based  on
 the  treasury  stock  method.  If  the  result  of  assumed  conversions  is
 dilutive, the average shares of common stock outstanding are increased.  The
 effect of potentially dilutive securities at September 30, 2004 and 2003 was
 ant-dilutive.


 2. Clinic Acquisitions

 In August 2000  the Company executed  an Agreement  to acquire  chiropractic
 clinics in Laredo, Corpus Christi and San Benito.  The adjusted  acquisition
 cost was $5,247,500 of  which $837,500 was paid  in cash and $4,410,000  was
 paid through  the issuance  of 29,400,000  shares  of the  Company's  common
 stock. The  Agreement  stated that  17,500,000  shares from  the  29,400,000
 shares issued  would be  placed in  escrow for  possible redemption  by  the
 Company based  on  the Earnings  before  Interest, Taxes,  Depreciation  and
 Amortization ("EBITDA") for the acquired clinics during the two year  period
 commencing October 1, 2000.  If the combined EBITDA of the acquired  clinics
 did not reach $1,500,000 for each of  the two years, the Company would  have
 the right to redeem a proportionate number of the 17,500,000 shares based on
 the percentage  difference between  the actual  EBITDA for  the periods  and
 $1,500,000.  The EBITDA was $585,000  and $165,000 for the two year  periods
 ended  September 30, 2001 and September 30, 2002,  respectively.  Therefore,
 the number  of  shares  to  be returned  from  the  original  17,500,000  is
 5,378,000 and 7,786,000 for a total of 13,164,000 shares.  These shares were
 cancelled as of May 10, 2004.

 In addition,  the Agreement  provided for  an adjustment  to the  number  of
 shares issued if the average bid price  for the common stock was below  $.15
 per share for the 90 trading days before September 1, 2001 and September  1,
 2002  respectively.  A proportionate number  of additional  shares would  be
 issued for the  difference between the  actual average share  bid price  and
 $.15 based on 17,500,000  original shares and the  number of escrow  shares,
 after adjustment for actual EBITDA, for the two year period ended  September
 30, 2002.  The average bid price was  $0.0273 for the 2001 period and  $0.01
 for the 2002 period.  To comply with the terms of the Agreement, the Company
 would be required to issue an additional 82,110,000 shares of common  stock.
  On August 6,  2004, the  Board of Directors  approved an  amendment to  the
 Agreement whereby the Company would issue  $2,000,000 in Series B  Preferred
 Stock in lieu of the 82,110,000 common shares for the price adjustment.   On
 September 30, 2004, the Company issued  20,000 shares of Series B  Preferred
 Stock.   See Footnote  5 - Notes Payable  and  Capital Leases,  Footnote 6 -
 Related Party Transactions and Footnote - 9 Stockholders' Equity.


 3. Property and Equipment

 Property and equipment consists of the following:

                                                 Useful Life    9/30/2004
                                                 -----------    ----------
    Land                                                   -   $   120,000
    Building and leasehold improvements           2-39 years        53,273
    Furniture and equipment, including
      equipment under capital leases              5-15 years       494,722
    Automobiles                                      5 years        93,355
    Less accumulated depreciation
      and amortization                                            (365,521)
                                                                ----------
                                                               $   395,829
                                                                ==========
 The following is a summary of equipment under capital leases:

      Equipment                                                $   205,521
      Less accumulated amortization                                (31,160)
                                                                ----------
                                                               $   174,361
                                                                ==========

 Substantially all assets leased are pledged as collateral under the existing
 capital lease agreements.


 4. Goodwill

 Following is  an  analysis  of goodwill  recorded  in  connection  with  the
 acquisition of three clinics at September 1, 2000.  See Footnote 2 -  Clinic
 Acquisitions.

              Date                        Transaction                Amount
 -----------------------------   ---------------------------       ----------
 Balance at September 30, 2002                                    $ 2,348,000

                                 Impairment for 2003               (1,000,000)
                                                                   ----------
 Balance at September 30, 2003                                      1,348,000

                                 Impairment for 2004                        -
                                                                   ----------
 Balance at September 30, 2004                                    $ 1,348,000
                                                                   ==========

 The Company elected to adopt the provisions of Financial Accounting Standard
 ("FAS")  142,  "Goodwill and Other Intangible Assets" as of October 1, 2001.
 This pronouncement addresses  the issue of  proper accounting and  reporting
 for intangible assets,  such as purchased  goodwill.  FAS  142 modified  the
 purchase method of  accounting by eliminating  the amortization of  goodwill
 and substituting an impairment test.  In this regard, the Company engaged an
 independent valuation firm to conduct the  impairment tests as of  September
 30, 2003 and 2004.  For testing purposes the "reporting unit", as prescribed
 by FAS 142, was  the three clinics  acquired in September  2000 for a  total
 purchase price of $5,247,500

 The first  step  of  the goodwill  impairment  testing  process  involves  a
 "carrying amount comparison" that compares the  fair value of the  reporting
 unit to its carrying value.  If  fair value exceeds carrying value, then  no
 further testing is required.  With respect to the valuation of the reporting
 unit, the firm relied on the results of the income approach.  In  connection
 with this approach, the  firm utilized the discounted  cash flow method  for
 both years.

 For the twelve month  period ended September 30,  2003 operating income  for
 the reporting units was $211,000 of which $133,000 was operating income  for
 the three months ended September 30, 2003, prior to inclusion of a corporate
 expense allocation in the fair value calculation.  Using the income approach
 and calculation  assumptions  consistent  with  the  prior  year,  with  the
 exception of the inclusion of a corporate expense allocation in the  current
 year in the  amount of $130,000,  the fair value  of the net  assets of  the
 reporting unit was estimated to be approximately $3,500,000 as of  September
 30, 2003,  in  the opinion of  the independent  valuation  firm.  This  fair
 value amount was less  than the $4,500,000 carrying  value of the  reporting
 unit.  Therefore, the Company has recorded an impairment loss of  $1,000,000
 as of September 30, 2003 and for the three month period then ended.

 For  the  twelve  month  period  ended  September 30,  2004 operating income
 for the  reporting  units  was  $377,000,  prior to inclusion of a corporate
 expense allocation.  Using the income  approach and calculation  assumptions
 consistent with the prior year, including a corporate expense allocation  in
 the current year in the amount of $157,000, the fair value of the net assets
 of the reporting  unit was estimated  to be approximately  $3,600,000 as  of
 September 30, 2004,  in the opinion of the independent valuation firm.  This
 fair value approximated the $3,555,000 carrying value of the reporting unit.
 Therefore, the Company has not recorded an impairment loss.


 5. Notes Payable and Capital Lease Obligations

                                                      9/30/2003     9/30/2004
                                                      ---------     ---------
    Acquisition note payable including
      accrued interest                               $1,043,500    $1,110,500
    Notes payable secured by automobiles                 78,588        68,687
    Capital lease obligations secured by clinic
      equipment                                           5,000       114,695
    Other notes payable                                  51,388        18,586
                                                      ---------     ---------
                                                     $1,178,476    $1,312,468
                                                      =========     =========

 The acquisition note payable is to an investment group (See Footnote 6),  in
 which certain officers and directors, and a beneficial owner of more than 5%
 of the common  stock  have a  financial interest.  The principal balance  is
 $837,500 and bears interest  at 8% per  annum with an  original due date  of
 September 1, 2003,  which  had  been  extended  to  December  31, 2004.  The
 Company  has  obtained  an  additional extension  until  December 31,  2005.
 Interest will  accrue at  $6,000 per  month and  interest payments  will  be
 $12,000 per month beginning January 31, 2005.

 Principal payments of approximately $49,000 are scheduled from 2006 to  2008
 for  the  notes payable  secured  by automobiles  and  approximately $88,000
 of  minimum  lease  payments  including interest expense of $16,000  for the
 capital lease obligations secured by clinic equipment from 2006 to 2009.


 6. Related Party Transactions

 Belair Capital Group, Ltd. ("Belair"),  a Nevada limited liability  company,
 is the holder  of an  $837,500 note payable  issued in  connection with  the
 acquisition  of three clinics  in September 2000.  In addition, the  Company
 issued 8,375,000 shares of common stock to Belair as further  consideration.
 The note payable of  $837,500 and  the 8,375,000 shares of common stock  are
 the  sole assets of Belair.  The following shareholders are also members  of
 Belair: the president and CEO (51% member interest), a principal shareholder
 and board member  (19% member interest),  and the seller  of the clinics,  a
 beneficial owner of more than 5%  of the outstanding stock  at September 30,
 2004 (30% member interest).

 On September 30,  2004, The Company  sold its Uptown  clinic located in  New
 Orleans to the clinic's director, who is a member of the Company's Board  of
 Directors.  The  sales  price was  $310,000,  of which  $96,000 was  a  note
 payable from the director with 24  equal monthly installments in the  amount
 of $4,000, $122,000 paid through the extinguishment of certain notes payable
 and other  obligations of  the  Company to  the  director and  $92,000  paid
 through the return  and cancellation of  3,600,000 shares  of the  Company's
 common stock owned by the director with a share price of $0.025.  The  sales
 price approximated the net asset value at September 20, 2004.

 On September 30, 2004  the Company issued $2,000,000  of Series B  Preferred
 Stock  in connection  with the  clinic acquisition  in September  2000.  See
 Footnote 2 "Clinic Acquisitions" and Footnote 9 "Stockholders' Equity."  The
 following  shareholders  are beneficial owners of  Series B Preferred Stock:
 the president and CEO ($875,000), a  principal shareholder and board  member
 ($250,000), and the seller of the  clinics, a beneficial owner of more  than
 5% of the outstanding stock at September 30, 2004 ($875,000).

 Since January 2003, the corporate office of the Company has been located  in
 a building leased  from the  President and CEO.  The monthly rent is  $2,200
 per month.  The agreement is informal with no specified term and  Management
 does not foresee the monthly payments exceeding $2,200 in fiscal 2005.


 7. Lease Commitments

 Rent expense for  the years ended  September 30, 2003  and 2004 amounted  to
 approximately $343,000  and $323,000,  respectively.  Future  minimum  lease
 payments under operating  leases with  terms in excess  of one  year are  as
 follows:

                       Years ending September 30,
                       --------------------------
                       2005                           $ 124,000
                       2006                              70,000
                       2007                              49,000
                       2008                              26,000
                                                       --------
                       Total minimum lease payments   $ 269,000
                                                       ========

 8. Convertible Debentures

 As part  of  the Plan  of  Reorganization  confirmed by  the  United  States
 Bankruptcy Court on  August 8,  2000 and  effective September  9, 2000,  the
 holders of  the  August  1998 Regulation  D  Debentures  agreed  to  replace
 debentures in the  principal amount of  $3,385,000 and  accrued interest  of
 $312,000 as of October 19, 1999 with new three year debentures dated  August
 24, 2000.  The issuance of these new debentures replaced and superseded  any
 prior debt obligation  of the  Company to the  holders of  the Regulation  D
 debentures.  The new debentures were  convertible into 20,475,000 shares  of
 common stock at  the holder's  option at  any time  during the  term of  the
 debentures.

 Per the new debenture agreement any  portion of the debentures which  remain
 outstanding as of the August 24,  2003 maturity date would be  automatically
 converted into shares of common stock.  Between  March 15 and April 5, 2004,
 the escrow  trustee sent  notices of  conversion to  the Company's  transfer
 agent for 5,628,449 shares  leaving 1,698,403 unconverted  shares.  Per  the
 agreement, the Company can cause the unconverted portion to be automatically
 converted if  the  balance  is less  than 2,000,000  shares.  Therefore  the
 Company issued the remaining shares on April 6, 2004.

 On July 26, 2004 the Company  received notification of termination from  the
 Office of the Secretary  of State of Texas  for the UCC Financing  Statement
 originally filed  on September 22, 2000.  The release of this lien  enhances
 the  Company's  ability to  borrow money using  its  accounts receivable  as
 collateral.


 9. Stockholders' Equity

 On September 30,  2003 the Company  issued 15,000,000  shares of  restricted
 common stock to the  president and CEO per  an employment agreement for  the
 three  year  period  ended September  30,  2003.  The  employment  agreement
 provides for the payment  of $50,000 of restricted  stock per year for  each
 year of employment.  The shares  were issued at a  price of $.01 per  share,
 which  was  based  on  the  average  market  over  the  period  and   giving
 consideration that the issued shares have a "Rule 144" restrictive legend.

 On April 18,  2004, the Company  filed a Form  S-8 with  the Securities  and
 Exchange Commission to issue 4,500,000  shares of unrestricted common  stock
 pursuant to a consulting agreement with  an attorney.  Under the  agreement,
 the attorney  is  obligated to  provide  approximately 140  hours  of  legal
 services for the Company.  The fair  market  value of  the stock issued  was
 $54,000.  At  September  30,  2004, the  attorney  is obligated  to  provide
 approximately 100 hours of legal services.

 On April 28, 2004, the Company issued 2,500,000 shares of restricted  common
 to an investor  relation firm  to provide  consulting services  for the  six
 month period ending  October 31, 2004.  The fair market  value of the  stock
 issued was $25,000.

 On September 30, 2004  the Company issued $2,000,000  of Series B  Preferred
 Stock  in  connection  with  the   clinic  acquisition  in  September  2000.
 See  Footnote  2   "Clinic  Acquisitions"  and  Footnote  6  "Related  Party
 Transactions."  The Series  B Preferred Stock has  the following terms:  (i)
 face value of $100,  (ii) 4%annual dividend,  (iii) convertible into  common
 stock at $0.05 per share or higher, (iv) automatic call conversion if  stock
 price exceeds $0.20 per  share, (v) redeemable for  cash up to $250,000  per
 year for two  years if net  income exceeds $500,000  and (vi) automatic  put
 conversion on September 30, 2007 at $0.025 per share.


 10.  Concentration of Credit Risk

 In the normal  course of  providing health  care services,  the Company  may
 extend credit to patients without  requiring collateral.  Each  individual's
 ability to  pay  balances due  the  Company  is assessed  and  reserves  are
 established to provide for management's estimate of uncollectible  balances.
 Future revenues  of the Company are largely dependent on third-party  payors
 and private insurance companies, especially  in instances where the  Company
 accepts assignment.

 The Company's trade receivables  at September 30, 2003  and 2004 consist  of
 the following, stated as a percentage of total accounts receivable:

                                                        2003      2004
                                                        ----      ----
        Personal injury claims                            70%       73%
        Medical claims filed with insurance companies     11         9
        Workman's compensation claims                      9         8
        Other claims                                      10        10
                                                        ----      ----
                                                         100%      100%
                                                        ====      ====

 11. Income Taxes

 The Company reported a net loss  before impairment and federal income  taxes
 of $792,000 for the fiscal year ended September 30, 2003 and $1,497,000  for
 the fiscal year ended September 30,  2004.  After taking into  consideration
 differences for expense deductions for financial reporting purposes and  for
 federal income  tax purposes,  the taxable  loss was  $571,000 in  2003  and
 $1,577,000 in 2004.

 At September 30, 2004, the Company has net operating loss carry forwards  of
 approximately  $18,000,000  to  offset  future  taxable  income.   The   net
 operating loss carry forwards  expire in varying  amounts from 2009  through
 2024


 12. Stock Options

 In August 1995, the Company adopted its 1995 Employee Stock Option Plan (the
 "Employee Plan") under which options to purchase shares of common stock  may
 be issued to employees and consultants of the Company.  The Company reserved
 1,000,000 shares of Common Stock for issuance under the Employee Plan.  Also
 in August 1995,  the Company adopted  the 1995  Non-Employee Director  Stock
 Option Plan (the "Director Plan") which provides for the grant of options to
 directors of up to  250,000 shares that do  not qualify as "incentive  stock
 options"  under the Internal Revenue Code of 1986.  The  following  schedule
 summarizes  the changes  in the Employee Plan and  the Director Plan for the
 two years ended September 30, 2004:

                                                          Option Price
                                        Number of    Per Share  Total Option
                                         Shares                    Price
                                       ---------     ---------  ------------
   Outstanding at September 30, 2002   1,017,500       $0.05     $ 50,900
   (1,017,500 exercisable)

   For the year ended
     September 30, 2003:
            Granted                            -           -            -
            Cancelled                          -           -            -
            Expired                            -           -            -
            Exercised                          -           -            -
   Outstanding at September 30, 2003   1,017,500       $0.05     $ 50,900
   (1,017,500 exercisable)

   For the year ended
     September 30, 2004:
            Granted                      100,000       $0.01        1,000
            Cancelled                     40,000       $0.05        2,000
            Expired                            -           -            -
            Exercised                          -           -            -
   Outstanding at September 30, 2004   1,077,500    $0.05-0.01   $ 49,900
   (1,077,500 exercisable)

 All options granted  in the  year ended September  30, 2004  were under  the
 Director Plan.  The expense attributable to the grants was immaterial.


 13. Stock Purchase Plans

 In August 1995, the  Company adopted its 1995  Employee Stock Purchase  Plan
 (the "Stock  Purchase  Plan"),  effective  October  1,  1995,  which  allows
 employees to acquire common stock of the  Company at 85% of its fair  market
 value from payroll deductions received from the employees.  The Company  has
 reserved a  total of  250,000 shares  of  its common  stock  to be  sold  to
 eligible employees under the Stock Purchase Plan.  As of September 30, 2004,
 no employees were participating in the  Stock Purchase Plan.  In July  1997,
 the Company adopted its  1997 Executive Stock  Bonus Plan ("Executive  Stock
 Bonus Plan") under which options to  purchase shares of common stock may  be
 issued to employees of the Company.  The Company reserved 260,870 shares  of
 Common Stock for issuance under the  Executive Bonus Plan.  As of  September
 30, 2004, 190,475 shares  have been issued under  the Executive Stock  Bonus
 Plan.

 14. Liquidity and Continuing Operations

 During the year ended September 30, 2004, cash generated from operations was
 not sufficient to meet  current obligations by $410,000.  As  a result,  the
 Company was unable  to pay  $110,000 in  compensation to  its president  and
 approximately $300,000 in  payroll taxes  in the 2004  period.  Due  to  the
 current year shortfall  and insufficient cash  from operations  in 2003  and
 2002, the  president  was due  $500,000  in compensation  and  the  Internal
 Revenue Service  $565,000  in  delinquent payroll  taxes  and  penalties  at
 September 30, 2004.  The  Company intends  to borrow approximately  $265,000
 from related parties before January 31, 2005 and is considering a  factoring
 agreement on its current accounts receivable to pay delinquent payroll taxes
 through June 30, 2004.  The Company intends to pay the remaining balance  of
 payroll taxes  and penalties  through monthly  installment payments  pending
 negotiations with  the IRS.  The  Company  and  its officers  have  received
 notices from the IRS regarding request for payment of the delinquent payroll
 taxes and related penalties.  For the calendar  quarter beginning  in  2005,
 the Company intends to stay current on its current payroll tax obligations.

 The Company must achieve minimum net  revenue of approximately $400,000  per
 month to meet current obligations.  For the six month period ended September
 30, 2004, net revenue, excluding the Louisiana clinic sold in September  30,
 2004 was $2,700,000,  which exceeded the  minimum.  Collections  during  the
 same period were $2,200,000.  Since  the period from revenue recognition  to
 collection is approximately 180 days for  at least 50% of patient  billings,
 the Company believes it  will have sufficient cash  from operations to  meet
 current obligations, including payroll taxes.

 At September 30, 2004, the Company was delinquent on payments for  unsecured
 creditor claims according  to the Plan  of Reorganization  confirmed by  the
 Bankruptcy Court in  September 2000 in  the amount of  $344,000.  Less  than
 five creditors have pursued collection of claims and the Company was able to
 meet these payments of approximately $40,000  and avoid legal action on  the
 part of these creditors.  Per the Plan of Reorganization the claims were  to
 be paid in  three annual  installments due  September 2001,  2002 and  2003.
 Since  the  Bankruptcy  Court  has  closed  the  case  and  no  longer   has
 jurisdiction, a creditor would have  to file a civil  suit in a Texas  state
 court.  Due to the four year statute of limitation on filings civil suits in
 Texas, a  creditor  must  initiate  a  suit  by  September  2005  to  pursue
 collection of the  September 2001  installment and  one year  later for  the
 second and third  installments.  At  the present time,  Management does  not
 foresee  any  creditors  initiating legal  action.  However,  there  are  no
 assurances that an individual creditor or group of creditors will not pursue
 legal action which could result in adverse consequences to the Company.


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

 None to report


                                   PART III


 ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT


      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 The following table sets forth information regarding the executive  officers
 and directors of the Company.

        Name             Age           Position                   Since
        ----             ---           --------                   -----
 Joseph W. Stucki, D.C.   46   President, Chief Executive      March 1995
                               Officer and Chairman of the
                               Board of Directors

 John C. Stuecheli        57   Chief Financial Officer,        January 1999
                               Vice President and Secretary

 Jeffrey Jones, D.C.      43   Director                        March 1995

 Michael R. Smith, M.D.   46   Director                        December 1996

 V. John Mansfield        57   Director                        June 1998

 James Roberts            45   Director                        June 1998


      Joseph W.  Stucki,  D.C.   Dr.  Stucki  is  Chairman of  the  Board  of
 Directors, Chief Executive Officer and President of the Company.  Dr. Stucki
 has been a licensed chiropractor for  approximately 20 years.  In May  1983,
 he founded  United  Chiropractic Clinics,  Inc.  and, as  its  Chairman  and
 President,  purchased  or  developed  and  opened  approximately  84  multi-
 disciplined   clinics   (chiropractic,   medical,   physical   therapy   and
 diagnostic).  From  1988 through  1995, Dr.  Stucki served  as Chairman  and
 Chief Executive Officer of United Health  Services.  United Health  Services
 developed approximately 150  franchises throughout the  United States.   Dr.
 Stucki has been a consultant to health care organizations on various  issues
 including  practice  management,  strategic  development,  and  mergers  and
 acquisitions.   Dr. Stucki  has  authored  several  papers  and  manuals  on
 practice management and has been a guest speaker on health care issues.  Dr.
 Stucki is a member of various national, state, and local organizations.

      John C. Stuecheli  Mr. Stuecheli  became Chief Financial Officer,  Vice
 President of Finance  and Secretary  of the Company  in January  1999.   Mr.
 Stuecheli was first employed by the Company in November 1998 as  Controller.
 From  November 1996  to October 1998,  Mr. Stuecheli was  Vice President  of
 Finance and  Chief Financial  Officer for  Irata, Inc.,  a manufacturer  and
 operator of photo booths and other  vending equipment.  From September  1993
 to October 1996, he was an independent consultant specializing in  financial
 restructuring.

      Jeffrey Jones, D.C.  Dr. Jones is a Director of the Company.  He is the
 Clinic Director  of  the United  Chiropractic  Uptown Clinic,  New  Orleans,
 Louisiana, owned by a subsidiary of the Company.  He obtained his  Louisiana
 Doctor of Chiropractic license in July 1985, and began his association  with
 the  United  Chiropractic  Uptown  clinic  shortly thereafter.  In the past,
 Dr. Jones  has  acted  as Regional Manager  of other  United  Clinics in the
 greater New Orleans  area.  He is a member of  the Chiropractic  Association
 of  Louisiana,  The  Union  of  Chiropractic Physicians  and  the   American
 Chiropractic  Association.  Dr. Jones acquired  the Uptown  Clinic from  the
 Company on September 30, 2004.

      Michael R. Smith, M.D.  Dr. Smith  became a Director of the Company  in
 December 1996.  Dr. Smith, a practicing physician board certified in  family
 practice, was employed by the Company  from September 1994 to December  2000
 and rejoined the Company in September 2003.  He provides medical services at
 two of the  Company's clinics  and serves as  the Medical  Director for  the
 Company's Texas clinics.  He  also serves on the  Board of Directors of  AHC
 Physicians Corporation, Inc., a subsidiary of  the Company.  From June  1992
 through August 1994, Dr. Smith was an employee and then partner at the Texas
 Trauma Rehabilitation Association.  Dr. Smith graduated from The  University
 of Texas Medical Branch in 1984.

      V. John Mansfield.  Mansfield became a Director of the Company in  June
 1998.  He has been the President and Chief Executive Officer of Axis Capital
 LLC since May 1997.  Axis Capital LLC, a privately owned company located  in
 Atlanta, Georgia, provides  advisory services for  companies in  transition,
 including start-ups,  turnarounds, new  growth initiatives  and mergers  and
 acquisitions.

      James Roberts.  Mr.  Roberts became a Director  of the Company in  June
 1998.  He  has been  the Managing Director  of The  Center For  Church-Based
 Training,  located  in  Dallas, Texas,  since  February  1999.  He  was  the
 President of Health Dental Plus,  Inc. from September 1993  to January 1999.
 Center  For  Church-Based  Training,  a  non-profit  organization,  provides
 advisory services to  churches and  other  religious  organizations.  Health
 Dental Plus, Inc. is  engaged in the marketing  of dental benefits plans  to
 employer groups and individuals.

      Members of the Company's Board of Directors are elected to hold  office
 until the  next  meeting of  stockholders  and until  their  successors  are
 elected  and  qualified.  Officers  are  elected  to serve  subject  to  the
 discretion of the Board  of Directors until  their successors are  appointed
 and have qualified.

      The committees of the Company's Board of Directors are as follows:

           Audit Committee          V. John Mansfield, Chairman
                                    James Roberts

           Compensation Committee   James Roberts, Chairman
                                    V. John Mansfield
                                    Dr. Joseph W. Stucki

      The Company does not have a Nominating Committee.

  Compliance With Section 16(a) Of The Securities Exchange Act Of 1934

      Section 16(a) of the Securities Exchange Act of 1934 requires that  the
 Company's officers and directors, and persons who own more than ten  percent
 (10%) of a registered class of the Company's equity securities file  reports
 of ownership  and changes  in ownership  with  the Securities  and  Exchange
 Commission ("SEC") and with the exchange  on which the Company's  securities
 are traded. Such reporting persons are required by SEC regulation to furnish
 the Company with copies of all Section  16(a) forms so filed.  Based  solely
 on a review  of Forms 3,  4 and 5  and amendments thereto  furnished to  the
 Company pursuant to Rule 16a-3(e) promulgated under the Securities  Exchange
 Act of 1934, or  upon written representations received  by the Company,  the
 Company is aware of the following failures to file by reporting persons.

      None to report.


 ITEM 10. EXECUTIVE COMPENSATION

                         Executive Compensation

      The following table sets forth information concerning all cash and non-
 cash compensation awarded  to, earned  by, or  paid to  the Company's  Chief
 Executive Officer  and Chief  Financial Officer  for the  last three  fiscal
 years.  No other executive officer of the Company who was serving at the end
 of fiscal 2004  earned more than  $100,000 of annual  base compensation  for
 services in all capacities to the Company and its subsidiaries.

<TABLE>
                    Summary Compensation Table
                                                             Long-Term Compensation
                                                             ------------------------
                               Fiscal Year     Annual        Restricted   Securities
  Name and Principal             Ending     Compensation       Stock      Under-lying     All other
    Position                  September 30    Salary ($)     Awards ($)   Options (#)  Compensation ($)
  --------------------------  ------------   -----------     -----------  -----------  ----------------
  <S>                           <C>           <C>            <C>           <C>           <C>
  Dr. Joseph W. Stucki          2004        262,950 (1)
  Chairman of the Board,        2003        262,950 (2)      150,000 (4)
  President and                 2002        262,950 (3)
  Chief Executive Officer

  John C. Stuecheli             2004        94,000
  Vice President, Chief         2003        90,500
  Financial Officer             2002       110,000
  and Secretary

 ___________________________

   (1) Dr. Stucki deferred $111,000 in compensation.

   (2) Dr. Stucki deferred $211,000 in compensation.

   (3) Dr. Stucki deferred $180,000 in compensation.

   (4) Per the three year employment agreement ended September 30, 2003,
       Dr. Stucki was issued 15,000,000 shares of restricted common stock
       at $0.01 per share, which was the average price for the period of
       the agreement.

</TABLE>

                    Stock Option and Stock Purchase Plans

      The following tables  set forth the  number of options  granted to  the
 Company's Chief Executive Officer and Chief Financial Officer during  fiscal
 2004 and the value of the unexercised options held by them at September  30,
 2004.

                    Option/SAR Grants in Last Fiscal Year
                    -------------------------------------

                          Number of      % of
                         Securities      Total
                           Under-      Options/
                            lying        SARs
                          Options/      Granted    Exercise
                            SARs          to        or Base
                           Granted     Employees     Price     Expiration
   Name                      (#)     In Fiscal Year  ($/Sh)       Date
  --------------------   -----------  ------------   -----     -----------

                            None to report.

 ___________________



              Aggregate Option/SAR Exercises in Last Fiscal Year
              --------------------------------------------------
                  And Fiscal 2004 Year-End Option/SAR Values
                  ------------------------------------------

                                                   Number of
                                                   Securities      Value of
                                                   Underlying      Unexercised
                                                   Unexercised     In-the Money
                                                   Options/SARs    Options/SARs
                           Shares                  At FY-End (#)   At FY-End ($)
                          Acquired     Value
                        On Exercise   Realized     Exercisable/     Exercisable/
   Name                     (#)         ($)       Unexercisable    Unexercisable
  --------------------  ------------  --------    --------------   -------------

  Dr. Joseph W. Stucki      None        None         None               None

  John C. Stuecheli         None        None       42,500/   -          None
  ____________________


                            Employee Benefit Plans

      In August 1995, the Company adopted its 1995 Employee Stock Option Plan
 (the "Employee Plan") under which options to purchase shares of Common Stock
 may be issued  to employees  and  consultants of  the Company.  The  Company
 reserved 1,000,000 shares of  Common Stock for  issuance under the  Employee
 Plan.  Also  in  August  1995, the  Company  adopted the  1995  Non-Employee
 Director Stock  Option Plan  (the "Director  Plan") which  provides for  the
 grant of options to directors of up to 250,000 shares that do not qualify as
 "incentive stock  options" under  the  Internal  Revenue  Code  of 1986.  In
 addition, the Company  adopted its 1995  Employee Stock  Purchase Plan  (the
 "Stock Purchase Plan"), effective October 1, 1995, which allows employees to
 acquire Common Stock of  the Company at  85% of its  fair market value  from
 payroll deductions received from the employees.  The Company has reserved  a
 total of 250,000 shares of its Common Stock to be sold to eligible employees
 under  the Stock  Purchase Plan.  In October  1996, the  Board of  Directors
 amended each of the Employee Plan, the Director Plan, and the Stock Purchase
 Plan to clarify various matters concerning the administration of such plans.
 In  July  1997, the  Company adopted  its 1997  Executive Stock  Bonus  Plan
 ("Executive Stock Bonus  Plan") under which  options to  purchase shares  of
 Common  Stock  may  be issued  to  employees of  the  Company.  The  Company
 reserved 260,870 shares  of Common Stock  for issuance  under the  Executive
 Bonus  Plan.  The following table  presents the number  of shares issued  or
 options granted under each of the Plans as of September 30, 2004:


                                      Options
                                  Granted/Shares       Option Shares
        Plan                          Issued             Exercised
    -------------                     -------            ---------

    Employee Plan                     827,500                0

    Director Plan                     250,000                0

    Stock Purchase Plan                     0                0

    Executive Stock Bonus Plan        190,475                0


                          Compensation of Directors

      The Company  pays  its Directors  $1,500  for each  Board  of  Director
 meeting  attended in person and $250 for each telephonic Board meeting.  The
 Company pays  its  Directors  $350  for  Audit  and  Compensation  Committee
 meetings.  The Company reimburses all Directors for reasonable out-of-pocket
 expenses incurred in connection  with attending meetings.  Pursuant  to  the
 Director Plan, all non-employee directors receive, at the beginning of  each
 fiscal year, a 5-year option to purchase 50,000 shares of common stock at an
 exercise  price determined  by the Board of  Directors at the time of grant.
 Also, pursuant to the Director Plan, all employee directors receive, at  the
 beginning of each fiscal year, a 5-year option to purchase 20,000 shares  of
 common stock at an  exercise price determined by  the Board of Directors  at
 the  time  of grant.  In  November 2003,  options to  purchase 100,000  were
 granted to non-employee directors.  The exercise price was $0.01 per share.


                            Employment Agreements

      Effective October  1,  2000,  the Company  entered  into  a  three-year
 employment agreement with  Dr. Joseph W.  Stucki to serve  as President  and
 Chief Executive  Officer  of  the  Company for  an  annual  base  salary  of
 $250,000.  Dr.  Stucki is also  entitled to a  car allowance  of $1,000  per
 month and reimbursement of up to $1,500 per year for continuing professional
 education.   As  consideration   for  renewing  the  contract,  he  received
 5,200,000 shares of  common stock.  On  September 30,  2003, he was  awarded
 15,000,000 shares of  common stock, which  was equivalent to  $150,000 at  a
 share price of $0.01.  In the event of termination of the agreement for  any
 reason by the Company or Dr. Stucki, he will be entitled to a severance  pay
 equal to twelve months of his full salary.  After a change of control of the
 Company, as defined in the employment agreement, if Dr. Stucki's  employment
 is terminated,  he terminates  his employment,  his  duties are  changed  or
 certain other  specified  events  take  place, he  will  be  entitled  to  a
 severance payment equal to twice his effective annual compensation, together
 with a continuation of all employee benefits for two years.  As of September
 30, 2004,  Dr. Stucki  had not yet  entered into a new employment agreement.
 During the  twelve months  ended September  30, 2004,  his compensation  and
 benefits remained unchanged. A new agreement  will be executed before  March
 31, 2005


 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth  information regarding the ownership  of
 the Company's  Common Stock  as of  December  31, 2004,  by (i)  each  known
 beneficial owner of more  than five percent (5%)  of the outstanding  Common
 Stock, (ii)  each  Director, (iii)  each  executive officer,  and  (iv)  the
 executive officers and  Directors  as  a group.  The table  also sets  forth
 information regarding  the ownership  of the  Company's Series  B  Preferred
 Stock,  which  is convertible  into  Common Stock.  All  share  numbers  are
 provided  based  on information  supplied  to  management  of the Company by
 the respective  individuals  and  members of  the  group.  Unless  otherwise
 indicated, each of  the stockholders has  sole voting  and investment  power
 with respect to the shares beneficially owned.

                                          Common Stock     Series B Preferred
                                                               Stock (8)
                                       Number of  Percent  Number of  Percent
                                        Shares   of Class   Shares   of Class
                                       --------- --------  --------- --------
   David P. Voracek, D.C. (1)          5,818,356    5.8%     8,750    43.75%
   2025 Tartan Trail
   Highland Village, Texas 75077

   Joseph W. Stucki, D.C. (2)         40,969,203   40.8%    8,750     43.75%
   2221 Justin Road, Suite 119-154
   Flower Mound, Texas 75028

   Jeffrey Jones, D.C. (3)             6,614,151    6.6%    2,500      12.5%
   807 S. Carrollton Avenue
   New Orleans, Louisiana 70118

   John C. Stuecheli (4)                739,500       *
   2221 Justin Road, Suite 119-154
   Flower Mound, Texas 75028

   Michael R. Smith, M.D. (5)           421,167       *
   118 Canyon Circle
   Boerne, Texas 78006

   James Roberts (6)                    109,500       *
   6712 Biltmore Pl.
   Plano, Texas 75023

   V. John Mansfield (7)                 60,000       *
   10956 Big Canoe
   Big Canoe, Georgia 30143

   Officers and Directors as a        48,913,521   48.7%   20,000     100%
   group (6 persons)
 __________________________

   *Less than one percent.


 (1)  The number of shares reported includes  225,000 shares owned of  record
      by Mainstream Enterprises  LLC, a limited  liability company, in  which
      Dr. Voracek has a  50% member interest, and  2,480,520 shares owned  of
      record by Belair Capital Group, Ltd.,  a limited liability company,  in
      which Dr. Voracek has a 26% member interest.

 (2)  Dr. Stucki is the  Chief Executive Officer,  President and Chairman  of
      the Board of Directors of the  Company.  The number of shares  reported
      includes 825,000 shares owned of record by Mainstream Enterprises  LLC,
      a limited  liability company,  in which  Dr. Stucki  has a  50%  member
      interest, and 4,308,000 shares owned of record by Belair Capital Group,
      Ltd., a limited liability company, in which Dr. Stucki has a 45% member
      interest.

 (3)  Dr. Jones is a Director of the Company.  The number of shares  reported
      includes 1,586,480  shares owned  of record  by Belair  Capital  Group,
      Ltd., a limited liability company, in which Dr. Jones has a 17%  member
      interest.

 (4)  Mr. Stuecheli  is the  Chief Financial  Officer  and Secretary  of  the
      Company.  The number  of shares owned  includes 42,500 shares  issuable
      upon exercise  of  options at  $0.05  per share,  which  are  currently
      exercisable.

 (5)  Dr. Smith is  a Director  of the Company.  The number  of shares  owned
      includes 50,000 shares issuable upon exercise  of options at $0.05  per
      share, which are currently exercisable.

 (6)  Mr. Roberts is a  Director of the Company.  The number of shares  owned
      includes 50,000 shares issuable upon exercise  of options at $0.05  per
      share, which are currently exercisable.

 (7)  Mr. Mansfield is a Director of the Company.

 (8)  On September  30,  2004, the  Company  issued $2,000,000  of  Series  B
      Preferred Stock, which has the following terms: (i) face value of $100,
      (ii) 4%annual dividend,  (iii) convertible into  common stock at  $0.05
      per share  or higher,  (iv) automatic  call conversion  if share  price
      exceeds $0.20, (v) redeemable for cash up to $250,000 per year for  two
      years if net income exceeds $500,000 and (vi) automatic put  conversion
      on September 30, 2007 at $0.025 per share.


 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Belair Capital  Group,  Ltd.  ("Belair"), a  Nevada  limited  liability
 company, is the holder of a $837,500 note payable issued in connection  with
 the acquisition  of  three  clinics  in September  2000.  In  addition,  the
 Company issued  8,375,000  shares  of common  stock  to  Belair  as  further
 consideration.  The  note payable of  $837,500 and the  8,375,000 shares  of
 common stock are the sole assets of Belair.  The following shareholders  are
 also members of Belair: Dr. J.W.  Stucki (51% member interest), Dr.  Jeffrey
 Jones (19% member interest) and Dr. David Voracek (30% member interest).

      On September 30, 2004,  The Company sold its  Uptown clinic located  in
 New Orleans  to Dr. Jones.  The sales price  was $310,000, of which  $96,000
 was a note payable from the  director with 24 equal monthly installments  in
 the amount of $4,000,  $122,000 paid through  the extinguishment of  certain
 notes payable  and other  obligations of  the Company  to the  director  and
 $92,000 paid through the return and cancellation of 3,600,000 shares of  the
 Company's  common  stock owned by the director with a share price of $0.025.
 The sales price approximated the net asset value at September 20, 2004.

 Since January 2003, the corporate office of the Company has been located  in
 a building leased from the Dr. J.W. Stucki.  The monthly rent is $2,200  per
 month.  The agreement is informal with no specified term.


 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

      (a)  Exhibits Required by Item 601

      (1)  The following financial statements are filed herewith in Item 7

           (i)   Consolidated Balance sheet as of September 30, 2004
           (ii)  Consolidated Statements of Operations for the years ended
                 September 30, 2004 and 2003.
           (iii) Consolidated Statements of Stockholders' Equity for
                 the years ended September 30, 2004 and 2003.
           (iv)  Consolidated Statements of Cash Flows for the years ended
                 September 30, 2004 and 2003.
           (v)   Notes to Consolidated Financial Statements.

      (2)
           2.1  Debtors American HealthChoice, Inc. and AHC Physicians Corp.,
                Inc. Amended Joint Plan of reorganization dated March 31,
                2000 (incorporated by reference to Exhibit 2.1 to Current
                Report on Form 8-K dated September 25, 2000).

           3.1  Certificate of Incorporation of American HealthChoice,
                Inc. (incorporated by reference to Exhibit 4.1 to
                Registration Statement on Form SB-2, Registration
                Number 33-09311, filed on July 31, 1996)

           3.2  Certificate of Amendment to Certificate of Incorporation
                of American HealthChoice, Inc. (incorporated by reference
                to Exhibit 3.2 to Form 10-KSB, file number 000-26740,
                filed for the fiscal year ended September 30, 1996).

           3.3  Bylaws of American HealthChoice, Inc. (incorporated by
                reference to Exhibit 3.3 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1996).

           4.1  Form of Debenture for $3,385,000 of 8% convertible
                debentures due August 24, 2001 (incorporated by reference
                to Exhibit (c)(ii) to Current Report on Form 8-K dated
                August 24, 1998).

           4.2  Form of Subscription Agreement between the Registrant and
                the holders of the debentures referenced in Exhibit 4.1
                (incorporated by reference to Exhibit (c)(ii) to Current
                Report on Form 8-K dated August 24, 1998).

           4.3  Form of Security Agreement entered into between the
                Registrant and the holders of the debentures referenced in
                Exhibit 4.1 (incorporated by reference to Exhibit (c)(ii)
                to Current Report on Form 8-K dated August 24, 1998).

           4.4  Form of Registrations Rights Agreement between the
                Registrant and the holders of the debentures referenced in
                Exhibit 4.1 (incorporated by reference to Exhibit (c)(ii)
                to Current Report on Form 8-K dated August 24, 1998).

           4.5  Security Agreement dated August 19, 2000 between American
                HealthChoice, Inc. and Southridge Capital LLC in its capacity
                as collateral agent for Sovereign Partners, L.P., Dominion
                Capital Fund, Ltd., Canadian Advantage Limited Partnership,
                and Atlantis Capital Fund. (incorporated by reference to
                Exhibit 4.1 to Current Report on Form 8-K dated September 25,
                2000).

           4.6  8% Senior Secured Convertible Debenture due August 19, 2003.
                (incorporated by reference to Exhibit 4.2 to Current Report
                on Form 8-K dated September 25, 2000).

           4.7  Stock Trust and Escrow Agreement entered into as of August
                19, 2000 by and between American HealthChoice, Inc.,
                Sovereign Partners, L.P., Dominion Capital Fund, Ltd.,
                Canadian Advantage Limited Partnership, Atlantis Capital Fund
                and Krieger & Prager, LLP. (incorporated by reference to
                Exhibit 4.3 to Current Report on Form 8-K dated September 25,
                2000).

           4.8  Series B Preferred Stock terms and condition as of September
                30, 2004*

           10.3 1995 Non-Employee Director Stock Option Plan (incorporated
                by reference to Exhibit 10.1 to Form10-QSB, file number 33-
                30677-NY, filed for the quarter ended June 30, 1995).

           10.4 1995 Employee Stock Purchase Plan (incorporated by
                reference to Exhibit 10.3 to Form 10-QSB, file number
                33-30677-NY, filed for the quarter ended June 30,1995).

           10.5 1995 Employee Stock Option Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.8 to Form 10-QSB,
                file number 000-26740, filed for the quarter ended June
                30, 1995).

           10.6 1995 Non-Employee Director Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.9 to Form
                10-KSB, file number 000-26740, filed for the fiscal
                year ended September 30, 1996).

           10.7 1995 Employee Stock Purchase Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.10 to Form
                10-KSB, file number 000-26740, filed for the fiscal
                year ended September 30, 1996).

           10.8 1997 Consultant Stock Plan, (incorporated by reference to
                Form S-8 file number 333-26065, filed for the quarter ended
                March 31, 1997).

           10.9 1997 Consultant Stock Plan, (incorporated by reference to
                Form S-8 file number 333-35581, filed for the quarter ended
                September 30, 1997).

          10.10 1997 Executive Bonus Plan, (incorporated by reference to
                Form S-8 file number 333-36475, filed for the quarter ended
                September 30, 1997).

          10.13 Employment Agreement for Chief Executive Officer dated
                June 1, 1997 between American HealthChoice, Inc. and
                Dr. Wes Stucki (incorporated by reference to Exhibit
                10.13 to Form 10-KSB, file number 000-26740, filed for
                the fiscal year ended September 30, 1998).

          10.14 Asset Purchase Agreement dated February 12, 1999 between AHC
                Physicians Corporation and Georgia Clinic LLC (incorporated
                by reference file number 000-26740, filed for the fiscal
                quarter ended March 31,1999).

          10.15 Demand Note dated June 10, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.15 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1999).

          10.16 Demand Note dated June 25, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.16 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1999).

          10.17 Demand Note dated April 30, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.17 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.18 Demand Note dated May 25, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.18 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.19 Demand Note dated May 10, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.19 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.20 Demand Note dated June 15, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.20 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.21 Demand Note dated July 1, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.21 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.22 Demand Note dated July 10, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.22 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.23 Demand Note dated August 8, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.23 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1999).

          10.24 Asset Sale and Purchase Agreement dated September 1, 2000 by
                and between Acme Corpus Chiropractic Clinic, LLC, Laredo
                Family Enterprises, LLC, Acme Chiropractic Clinic, LLC and
                American HealthChoice, Inc. (incorporated by reference to
                Exhibit 10.24 to Form 10-KSB, file number 000-26740, filed
                for the fiscal year ended September 30, 2000).

          10.25 Loan Agreement dated September 1, 2000 between Belair
                Capital, Ltd. and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.25 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.26 Employment Agreement effective October 1, 2000 between Dr.
                J. W. Stucki and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.26 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.27 Employment Agreement effective October 1, 2000 between Dr.
                Jeffrey Jones and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.27 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.28 Employment Agreement effective October 1, 2000 between John
                C. Stuecheli and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.28 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.29 Laredo Family Enterprises, LLC Financial Statements for
                the twelve months ended December 31, 1999 (incorporated
                by reference to Exhibit 10.29 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.30 San Benito Chiropractic Clinic, LLC Financial Statements for
                the twelve months ended December 31, 1999 (incorporated by
                reference to Exhibit 10.30 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.31 Acme Corpus Chiropractic Clinic, LLC Financial Statements
                for the twelve months ended December 31, 1999 (incorporated
                by reference to Exhibit 10.31 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          21    List of Subsidiaries of American HealthChoice, Inc.*

          23.1  Consent of Independent Registered Public Accounting Firm*

          31.1  Certification pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002 for Dr. J. W. Stucki, President and Chief
                Executive Officer*

          31.2  Certification pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002 for John C. Stuecheli, Vice President and Chief
                Financial Officer*

          32.1  Certification pursuant to 18 U.S.C Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
                Dr. J. W. Stucki, President and Chief Executive Officer*

          32.2  Certification pursuant to to 18 U.S.C Section 1350, as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002 for John C. Stuecheli, Vice President and Chief
                Financial Officer*

      * Filed herewith



                               SIGNATURES

      In accordance with Section 13 or  15(d) of the Securities Exchange  Act
 of 1934, the Registrant caused this Report to be signed on its behalf by the
 undersigned, thereunto duly authorized.



                               AMERICAN HEALTHCHOICE, INC.

 Date: January 13, 2005        By:  /s/ Dr. J.W. Stucki
                                        Dr. J.W. Stucki, Chief Executive
                                        Officer and President


      In accordance with the Securities Exchange Act of 1934, this Report has
 been signed below by the following  persons on behalf of the Registrant  and
 in the capacities and on the dates indicated.

 Signature                          Title                           Date
 -------------------      ----------------------------------  -----------------

 /s/ Dr. J.W. Stucki      Chief Executive Officer, President
     Dr. J.W. Stucki      and Chairman of the Board
                          (Principal Executive Officer)       January 13, 2005

 /s/ John C. Stuecheli    Chief Financial Officer and
     John C. Stuecheli    Vice President-Finance
                          (Principal Financial and
                          Accounting Officer)                 January 13, 2005

 /s/ V. John Mansfield    Director, Chairman of Audit
     V. John Mansfield    Committee                           January 13, 2005

 /s/ James Roberts        Director
     James Roberts                                            January 13, 2005

 /s/ Dr. Jeff Jones       Director
     Dr. Jeff Jones                                           January 13, 2005

 /s/ Dr. Michael Smith    Director
     Dr. Michael Smith                                        January 13, 2005