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, 2002

 [ ]  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 Identification No.)
 of incorporation or organization

 1300 W. Walnut Hill Lane, Suite 275 Irving, Texas           75038
     (Address of principal executive offices)              (Zip Code)

                   Issuer's telephone number: (972) 751-1900

           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: $8,300,000

      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). $250,000 as  of
 December 31, 2002*.

                        (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, 2002, the Registrant had 88,100,766 shares outstanding
 of common stock.

 *    Based on  the  last  reported  price  of an  actual  transaction  in
      Registrant's common  stock  on  November  30,  2002 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..................................     4

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

 Item 4.   Submission of Matters to a Vote of Security Holders......     5


                                PART II

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

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

 Item 7.   Financial Statements.....................................    10

 Item 8.   Changes In and Disagreements with Accountants
             on Accounting and Financial Disclosure.................    24


                                   PART III

 Item 9.   Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the
             Exchange Act...........................................   25

 Item 10.  Executive Compensation...................................   27

 Item 11.  Security Ownership of Certain Beneficial
             Owners and Management..................................   30

 Item 12.  Certain Relationships and Related Transactions...........   31

 Item 13.  Exhibits and Reports on Form 8-K.........................   32

 Signatures     ....................................................   35

<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 thirteen  clinics.  Twelve  are
 primary care  clinics,  of  which  two  are  medical  clinics  and  ten  are
 chiropractic clinics.  The Company also  has a physical therapy facility  at
 its largest  chiropractic clinic.   The  clinics are  located in  Texas  and
 Louisiana.  The  clinic locations are  leased except for  one clinic in  San
 Antonio.  See Item 2 "Description of  Property."  At September 30, 2002  the
 Company had  a  total of  sixty-two  employees.  Of this  number,  six  were
 employed by the  Company's medical clinics,  forty-nine by the  chiropractic
 and physical therapy clinics, and seven 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 1300 West Walnut  Hill
 Lane, Suite  275, Irving,  Texas 75038.  The Company's  telephone number  is
 (972) 751-1900 and its  fax number is  (972) 751-1901.   The Company has  an
 internet website at www.americanhealthchoice.com.


 Business Strategy

      Cash Flow. The Company's  primary measurement of financial  performance
 is  earnings   before  interest,   taxes,  depreciation   and   amortization
 ("EBITDA").  In fiscal 2002, EBITDA was approximately $(1,900,000)  compared
 to the goal of $1,000,000.  The primary reason for the significant  decrease
 was an  approximately  $750,000  decline in  EBITDA  at  the  three  clinics
 acquired in September 2000.  The reasons for the decline were the opening of
 competitive clinics,  the departure  of a  doctor and  changes in  marketing
 sources.   Management has  initiated steps  to  rectify these  problems  and
 expects EBITDA of approximately $500,000 for  these three clinics in  Fiscal
 2003.

      Growth.   Management will  continues its  efforts to  increase  patient
 services at the existing clinics without significant increases in  marketing
 and clinic expenses.   The Company is actively  pursuing the acquisition  of
 other established  clinics in  Texas from  individual doctors,  who  provide
 these same services.  The Company will only consider acquiring clinics  that
 are profitable and cash flow positive.


 Primary Sources of Company Revenue

      Patient Insurance  Settlements.   The  Company's  chiropractic  clinics
 derive a significant portion of their revenue from insurance settlements  to
 injured patients treated by  the clinic.  The  medical clinics receive  some
 revenue from patient insurance settlements but are not necessarily dependent
 on these types of settlements.  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's
 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.

      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 ten primary care  chiropractic
 clinics,  which  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 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 clinic 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's compensation  cases.  The  patient
 source for  this  clinic  comes from  attorney  referrals  and  chiropractic
 clinics, including company owned clinics in San Antonio.


 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  3,500  square  feet  in  an  office
 building in  Irving, Texas  at a  monthly  rent of  $7,200  for use  as  its
 principal 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 thirteen  clinics.  Twelve  are
 primary care  clinics,  of  which  two  are  medical  clinics  and  ten  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 2002        Location       Rent    Services Provided  Date Acquired
--------------------  ---------------  -------  ----------------- --------------
United Chiropractic   Katy, TX         $3,800   Chiropractic &    October 1994
Clinic                                          physical therapy

United Chiropractic   San              $2,500   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              $1,000   Physical therapy  October 1994
(Bandera)             Antonio, TX

United Chiropractic   San              $2,000   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              $1,600   Chiropractic      July 1994
(New Orleans East)    Orleans, LA

United Chiropractic   New              $1,200   Chiropractic      July 1994
(Uptown)              Orleans, LA

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

Valley Family Health    San Benito,    $1,000   Chiropractic      September 2000
Center                  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                            $25,500
                                       ======

 ITEM 3. LEGAL PROCEEDINGS

      As of September 30, 2002, 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

      No matter was  submitted to  a vote  of security  holders, through  the
 solicitation of proxies or otherwise, during the quarter ended September 30,
 2002.

<PAGE>

                                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, 2000    $0.1562    $0.0312
                  March 31, 2001       $0.0781    $0.0312
                  June 30, 2001        $0.06      $0.01
                  September 30, 2001   $0.03      $0.01
                  December 31, 2001    $0.03      $0.01
                  March 31, 2002       $0.03      $0.01
                  June 30, 2002        $0.02      $0.01
                  September 30, 2002   $0.01      $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, 2002.

      Dividends.  The Company has paid no cash dividends since its inception,
 and it is unlikely that any cash dividend 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 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,
                                           -------------------------
                                    2000            2001              2002
                                 ----------      ----------        ----------
 Revenues:
   Patient billings             $ 5,305,000     $ 8,572,000       $ 8,302,000
   Allowance for discount         1,631,000       3,053,000         3,538,000
                                 ----------      ----------        ----------
       Net Patient Revenues       3,674,000       5,519,000         4,764,000

 Operating Expenses:
   Compensation and               2,238,000       2,892,000         2,948,000
   Allowance for doubtful                 -               -         1,810,000
   General and                      817,000       1,509,000         1,656,000
   Rent                             282,000         386,000           391,000
   Other                            247,000         588,000           144,000
                                 ----------      ----------        ----------
       Total Operating            3,584,000       5,375,000         6,949,000
                                 ----------      ----------        ----------
 Operating Income (Loss)             90,000         144,000        (2,185,000)
 Other Income (Expense):
   Interest expense and             (12,000)        (85,000)          (63,000)
   Other income, net                115,000          95,000            95,000
                                 ----------      ----------        ----------
       Total Other Income           103,000          10,000            32,000
                                 ----------      ----------        ----------
 Income (Loss)                  $   193,000     $   154,000       $(2,153,000)
                                 ==========      ==========        ==========

 Fiscal Year Ended September 30, 2002 Compared to Fiscal Year Ended September
 30, 2001

      Patient Billings.    For the  fiscal  year ended  September  30,  2002,
 patient billings decreased from  $8,572,000 for the same  period in 2001  to
 $8,302,000 in 2002.  The decrease  of $269,000 is attributable to a  decline
 in patient billings of  approximately $687,000 for  the clinics acquired  in
 September 2000 offset by an increase of $418,000 for other clinics.

      Allowance  for  Discount  on  Billings.   For  the  fiscal  year  ended
 September 30,  2002,  allowance  for discount  on  billings  increased  from
 $3,053,000 for the same period in 2001 to $3,538,000 in 2002.  The  increase
 is attributable to an upward adjustment in the allowance as a percentage  of
 patient billings from 36% in the 2001 period to 43% in the 2002 period.  The
 adjustment reflects an increase in the  number of new personal injury  cases
 written off in  the 2002 period  due primarily to  the absence of  insurance
 coverage.  The collection percentage on cases that were settled by patient's
 attorneys in 2002 was comparable to 2001.

      Compensation and Benefits.   For the  fiscal year  ended September  30,
 2002, compensation  and  benefits  increased  from  $2,892,000  in  2001  to
 $2,948,000 in 2002.   There were no material  personnel changes in the  2002
 period compared to the 2001 period.

      Allowance for doubtful accounts  at closed clinics.   The allowance  of
 $1,810,000 for  the  fiscal  year ended  September  30,  2002  is  primarily
 attributable to uncollectible patient  billings at physical therapy  clinics
 closed in 1998.  The majority of these patient accounts had previously  been
 transferred to  outside  collection  agencies.  The  Company's  estimate  of
 uncollectible accounts  increased substantially  in 2002  compared to  prior
 years and was due to several factors including the closure of one collection
 agency in 2002 with the resulting loss of records and less than  anticipated
 collections at other collection agencies.

      General and Administrative.   For the fiscal  year ended September  30,
 2002, general  and  administrative  increased from  $1,509,000  in  2001  to
 $1,656,000 in 2002. Approximately $200,000 of the increase was  attributable
 to higher  marketing  and advertising  expenses  in the  Texas  chiropractic
 clinics.

      Rent.  For  the fiscal year  ended September 30,  2002, rent  increased
 from $386,000 in 2001 to $391,000 in  2002.  There were no facility  changes
 in the 2002 period compared to the 2001 period.

      Other Operating Expenses.  For the fiscal year ended September 30, 2002
 and the same period in 2001, other operating expenses included  depreciation
 and amortization, which decreased from $588,000 in 2001 to $144,000 in 2002.
 The decrease  is primarily due to amortization of goodwill in the amount  of
 $392,000 in the 2001 period.   The 2002 period has no goodwill  amortization
 due to  a change  in accounting  policy as  required by  generally  accepted
 accounting principles.

      Other Income and Expense.  Other income, net for the fiscal year  ended
 September 30, 2002, in the  amount of $95,000 is  the net settlement from  a
 successful lawsuit  against a  former clinic  doctor for  violations of  his
 employment  contract.   Other  income,  net  in  2001  included  a  gain  on
 expiration of options  in the amount  of $200,000 offset  by $93,000 in  net
 book  value  of  clinic  equipment  dispositions  during  the  fiscal  year.
 Interest expense and other costs of borrowing decreased from $85,000 in 2000
 to $63,000 in  2002.  The  decrease is attributable  to a  reduction in  the
 principal  amount  of  the  note  payable  issued  in  connection  with  the
 acquisition of  the  three  clinics  in  September  2000  from  $950,000  to
 $837,000.


 Fiscal Year Ended September 30, 2001 Compared to Fiscal Ended September  30,
 2000


      Patient Billings.   For the  fiscal  year  ended  September  30,  2001,
 patient  billings  increased from  $5,305,000  for  the same  period in 2000
 to $8,572,000  in 2001.  Approximately   $3,075,000  of  the  increase   was
 attributable to patient billings for the three clinics acquired in September
 2000.  The increase from  the acquired clinics was  offset by a decrease  of
 $285,000 attributable to the Georgia clinics sold in fiscal 2000.

      Allowance  for  Discount  on  Billings.   For  the  fiscal  year  ended
 September 30,  2001,  allowance  for discount  on  billings  increased  from
 $1,631,000 for the same period in 2000 to $3,053,000 in 2001.  Approximately
 $1,100,000 of  the increase  is attributable  to  the allowance  on  patient
 billings for the three clinics acquired in September 2000.  The remainder of
 the increase is attributable to an  upward adjustment in the allowance as  a
 percentage  of  patient  billings  from  30%  in  the 2000 period  to 36% in
 the 2001 period.  The  adjustment reflects  a  decrease  in  the  collection
 percentage on  cases  that  were settled  by  patient's  attorneys  in  2001
 compared to 2000.

      Compensation and Benefits.   For the  fiscal year  ended September  30,
 2001, compensation  and  benefits increased  from  $2,238,000 for  the  same
 period in  2000  to $2,892,000  in  2001.   Approximately  $665,000  of  the
 increase was attributable to compensation and benefits for the three clinics
 acquired in September  2000.   The increase  from the  acquired clinics  was
 offset by a decrease of $153,000 attributable to the Georgia clinics sold in
 fiscal 2000.

      General and Administrative.   For the fiscal  year ended September  30,
 2001, general and administrative increased from $817,000 for the same period
 in 2000 to $1,509,000  in 2001. Approximately $363,000  of the increase  was
 attributable to general  and administrative expenses  for the three  clinics
 acquired in September 2000 and $163,000 was attributable to higher marketing
 expense at the Texas clinics resulting from an increase in the number of new
 patients in 2001 compared to 2000.   The increase from the acquired  clinics
 and higher marketing expense was partially  offset by a decrease of  $65,000
 attributable to the Georgia clinics sold in fiscal 2000.

      Rent.  For  the fiscal year  ended September 30,  2001, rent  increased
 from $282,000 in  2000 to  $386,000 in  2001. Approximately  $64,000 of  the
 increase was attributable to rent expenses for the three clinics acquired in
 September 2000.

      Other Operating Expenses.  For  2001 other operating expenses  included
 $588,000 of  depreciation  and  amortization.   For  2000,  other  operating
 expenses included  $102,000  of  reorganization  expenses  and  $145,000  of
 depreciation and amortization. The increase in depreciation and amortization
 in 2001 compared to  2000 was primarily due  to amortization of goodwill  in
 the amount of  $392,000 attributable to  the clinics  acquired in  September
 2000.

      Other Income and  Expense.   Other income in  2001 included  a gain  on
 expiration of  options in  the amount  of $200,000.   Other  income in  2000
 included a  $36,000 gain  related to  the sale  of the  Georgia clinics  and
 $79,000  in debt forgiveness  in connection  with the Chapter 11 Bankruptcy.
 Other expense in 2001 included $93,000 in net book value of clinic equipment
 dispositions during  the  fiscal year.   Interest  expense  other  costs  of
 borrowing increased from $12,000 in 2000  to $85,000 in 2001.  The  increase
 is attributable to  interest expense on  the note payable  in the amount  of
 $950,000 issued in connection with the  acquisition of the three clinics  in
 September 2000.


 Liquidity and Capital Resources

      For the  fiscal  year  ended  September 30,  2002,  net  cash  used  in
 operating activities was $25,000 as compared to $9,000 net cash provided  by
 operating activities for the fiscal year ended September 30, 2001.  Net cash
 used in operating activities in the  2002 period was primarily  attributable
 to a net loss of $3,053,000 plus  an increase in accounts receivable in  the
 amount of $3,700,000 offset by non-cash expenses in the amount of $5,300,000
 for  doubtful  accounts  and  goodwill impairment  of  $900,000.   Net  cash
 provided  by  operating  activities  in   the  2001  period  was   primarily
 attributable to net income of $154,000 plus non-cash expenses in the  amount
 of $3,096,000  for  allowance for  doubtful  accounts and  depreciation  and
 amortization in the amount  of $588,000 offset by  a $4,086,000 increase  in
 accounts receivable.

      Net cash used in investing activities for the years ended September 30,
 2002 and September 30, 2001 was attributable to the acquisition of  property
 and equipment in the amounts of $34,000 and $57,000, respectively.

      Net cash provided by financing activities for the years ended September
 30, 2002 and September 30, 2001 was the net difference of proceeds from  new
 notes payable  and payments  on  notes payable  and  capital leases  in  the
 amounts of $33,000 and $44,000, respectively.

      During the years ended September 30, 2002 and September 30, 2001,  cash
 generated  from  operations  was  sufficient  to  meet  current  obligations
 including capital  expenditures.   However,  funds  were  not  available  to
 satisfy  bankruptcy  plan payments due in September 2001 and September 2002.
 At September  30,  2002  the  Company was  delinquent  on  payments  due  to
 unsecured creditor claims and insider claims in the amounts of $356,000  and
 $440,000, respectively.   In addition, the  loan in the  amount of  $837,000
 issued in connection with the acquisition of three clinics in September 2000
 was due and payable  on September 1,  2002.  The  amount past due  including
 unpaid interest is approximately $970,000.

      In the case of the bankruptcy payments, fewer than five creditors  have
 pursued collection of claims due as of September 30, 2002.  The Company  was
 able to meet  these payments and  avoid legal action  on the  part of  these
 creditors.  At the present time, Management does not foresee any  individual
 creditors initiating legal action in regards to past due payment of  claims.
 The  Company  is also  in the  process of  negotiating an  extension on  the
 principal  and  interest  due  the  note  holder.   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.

      Management  does  not  anticipate  any  material  capital  expenditures
 requiring cash in the next twelve months.

      Before March 31,  2003, Management expects  to amend  the note  payable
 issued in connection  with the  acquisition of  three clinics  to allow  for
 payment over a longer period of time.  In addition, Management continues  to
 focus on  increasing  payments  on  personal  injury  case  settlements  and
 increase the number of worker's compensation  cases, which result in  higher
 settlement amounts per case compared to personal injury cases.  As a  result
 a result of these and other actions to improve cash flow, overall  liquidity
 should improve during the first six months of fiscal 2003.

 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.
<PAGE>


 ITEM 7. FINANCIAL STATEMENTS

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES


                                    INDEX


                                                                  Page
                                                                  ----

 FINANCIAL STATEMENTS:


 Independent Auditors' Report                                      11


 Consolidated Balance Sheet - September 30, 2002                   12


 Consolidated Statements of Operations - Years Ended               13
      September 30, 2001 and 2002


 Consolidated Statement of Changes in Stockholders' Equity         14
      - Years Ended September 30, 2001 and 2002


 Consolidated Statements of Cash Flows - Years Ended               15
      September 30, 2001 and 2002


 Notes to Consolidated Financial Statements                        16

<PAGE>


                      INDEPENDENT AUDITORS' REPORT


 To the Board of Directors
 American HealthChoice, Inc. and subsidiaries


 We have  audited the  accompanying consolidated  balance sheet  of  American
 HealthChoice, Inc.  and  subsidiaries as  of  September 30,  2002,  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,  2002.   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  audit in  accordance  with auditing  standards  generally
 accepted in the United States of  America.  Those standards require that  we
 plan and perform the audit to obtain reasonable assurance about whether  the
 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,
 2002, and the results of their operations  and their cash flows for each  of
 the two years in the period ended September 30, 2002 year in conformity with
 accounting principles generally accepted in the United States of America.

 The accompanying consolidated financial  statements as of  and for the  year
 ended  September  30,  2002  have  been  prepared  assuming  that   American
 HealthChoice, Inc.  will  continue  as  a  going  concern.   As  more  fully
 described in Note 3, the Company is in default on a note payment and certain
 scheduled payments under the Bankruptcy Plan of Reorganization.  This raises
 substantial doubt  about  the  Company's ability  to  continue  as  a  going
 concern.  Management's assessment in regard to this matter is also described
 in Note  3.   The  consolidated  financial  statements do  not  include  any
 adjustments that may result from the outcome of this uncertainty.


 Lane Gorman Trubitt, L.L.P.
 Dallas, Texas
 December 5, 2002

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEET
                              SEPTEMBER 30, 2002


                                    ASSETS


 Current Assets:
 Cash                                                     $       11,296
 Accounts receivable, less allowance for doubtful
   accounts of $ 7,177,798                                     6,109,248
 Other current assets                                             59,344
                                                           -------------
      Total current assets                                     6,179,888

 Property and equipment, net                                     310,700
 Goodwill, net                                                 2,348,570
 Other assets                                                     52,120
                                                           -------------
      Total assets                                        $    8,891,278
                                                           =============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities:
 Notes payable and capital lease obligation              $       917,956
 Convertible debentures                                        1,310,400
 Bankruptcy claims                                             1,176,150
 Accrued payroll and payroll taxes                               381,002
 Accounts payable and accrued expenses                           431,597
                                                           -------------
      Total current liabilities                                4,217,105

 Commitments                                                           _

 Stockholders' Equity:
 Preferred stock, $.001 par value; 5,000,000
   shares authorized; none issued                                      -
 Common stock, $.001 par value; 115,000,000 shares
   authorized; 88,100,766 shares issued and outstanding           88,100
 Options to acquire common stock                                   8,000
 Additional paid-in capital                                   20,534,684
 Accumulated deficit                                         (15,956,611)
                                                           -------------
      Total stockholders' equity                               4,674,173
                                                           -------------
      Total liabilities and stockholders' equity          $    8,891,278
                                                           =============


      See accompanying notes to these consolidated financial statements.

<PAGE>
                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS


                                                   Years Ended September 30,
                                                   -------------------------
                                                      2001            2002
                                                   ----------     ----------
 Revenues:
   Patient billings                               $ 8,572,314    $ 8,302,587
   Allowance for discount on billings               3,053,670      3,538,089
                                                   ----------     ----------
             Net revenues                           5,518,644      4,764,498

 Operating Expenses:
   Compensation and benefits                        2,892,076      2,947,786
   Depreciation and amortization                      587,610        144,395
   General and administrative                       1,508,557      1,656,190
   Allowance for doubtful accounts
     at closed clinics                                      -      1,810,034
   Rent                                               386,437        391,215
                                                   ----------     ----------
      Total operating expenses                      5,374,680      6,949,620

 Other Income (Expense):
   Interest expense and other costs of borrowing      (84,737)       (63,459)
   Other expense                                     (112,972)             -
   Other income                                       207,683         95,477
                                                   ----------     ----------
      Total other income                                9,974         32,018
                                                   ----------     ----------
 Income (Loss) Before Impairment Loss                 153,938     (2,153,104)

 Impairment Loss                                            -        900,000
                                                   ----------     ----------
 Net Income (Loss)                                $   153,938    $(3,053,104)
                                                   ==========     ==========

 Basic and Diluted Net Income (Loss) Per Share    $         -    $      (.03)

 Weighted Average Common Shares Outstanding        86,979,311     93,825,766


      See accompanying notes to these consolidated financial statements.

<PAGE>
<TABLE>
                                        AMERICAN HEALTHCHOICE, INC.
                                             AND SUBSIDIARIES

                         CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2002


                                                              Option to   Additional
                                           Common Stock        Acquire     Paid-in     Accumulated
                                        Shares      Amount     Common      Capital       Deficit          Total
                                                                Stock
                                      ----------    -------   --------    ----------   -----------    -----------
 <S>                                  <C>          <C>       <C>         <C>          <C>            <C>
 Balances at September 30, 2000       71,144,259   $ 71,144  $ 200,104   $18,645,290  $(13,057,445)  $  5,859,093

 Common stock issued in connection
   with debenture conversion          13,216,507     13,216          -     2,373,384             -      2,386,600
 Common stock issued in connection
   with employment incentives          8,965,000      8,965          -       216,410             -        225,375
 Gain recognized on cancellation of
   options                                     -          -   (200,104)            -             -       (200,104)
 Common stock issued in connection
   with financing                        500,000        500          -        12,000             -         12,500
 Issuance of director stock options            -          -      8,000             -             -          8,000
 Net income                                    -          -          -             -       153,938        153,938
                                      ---------------------------------------------------------------------------
 Balances at September 30, 2001       93,825,766     93,825      8,000    21,247,084   (12,903,507)     8,445,402

 Cancellation of common stock
   issued in connection with
   purchase of clinic assets          (5,725,000)    (5,725)         -      (712,400)            -       (718,125)
 Net loss                                      -          -          -             -    (3,053,104)    (3,053,104)
                                      ---------------------------------------------------------------------------
 Balances at September 30, 2002       88,100,766   $ 88,100  $   8,000   $20,534,684  $(15,956,611)  $  4,674,173
                                      ===========================================================================

                See accompanying notes to these consolidated financial statements.

</TABLE>
<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    Years Ended September 30,
                                                    --------------------------
                                                       2001            2002
                                                    ----------      ----------
 Cash Flows From Operating Activities:
 Net income (loss)                                 $   153,938     $(3,053,104)

 Adjustments to reconcile net income
     (loss) to net cash provided by
     (used in) operating activities:
   Allowance for doubtful accounts                   3,096,157       5,348,123
   Gain on cancellation of options                    (192,104)              -
   Net book value of equipment disposals
     and retirements                                    92,604               -
   Goodwill impairment                                       -         900,000
   Employee compensation-stock                          87,600          87,600
   Depreciation and amortization                       587,610         144,395
 Change in operating assets and liabilities, net:
   Accounts receivable-trade                        (4,086,229)     (3,670,218)
   Other assets                                         75,251           4,044
   Accounts payable and accrued expenses               194,443         214,141
                                                    ----------      ----------
        Net cash provided by (used in)
          operating activities                           9,270         (25,019)

 Cash Flows From Investing Activities:
   Property and equipment                              (57,158)        (33,957)
                                                    ----------      ----------
        Net cash used in investing activities          (57,158)        (33,957)

 Cash Flows From Financing Activities:
   Proceeds from notes payable                          69,987          51,171
   Payments on notes payable and capital leases        (25,497)        (18,202)
                                                    ----------      ----------
        Net cash provided by financing activities       44,490          32,969
                                                    ----------      ----------
 Net Decrease In Cash                                   (3,398)        (26,007)
   Cash At Beginning Of Year                            40,701          37,303
                                                    ----------      ----------
   Cash At End Of Period                           $    37,303     $    11,296
                                                    ==========      ==========

 Supplemental Disclosure Of Cash Flow Information:
   Income taxes paid                               $         -     $       610
   Interest paid                                         2,000           6,000

 Supplemental Disclosure Of Non-Cash Transactions:
   Offset cancellation of notes payable issued
     in connection with purchase of clinic
     assets against goodwill                                 -         112,500
   Offset cancellation of stock issued in
     connection with purchase of clinic assets
     against goodwill and other assets                       -         718,125
   Offset reduction in valuation of clinic
     assets acquired against goodwill                  331,339         330,000
   Issuance of stock in connection with
     financing activities                               12,500               -
   Conversion of debenture into stock                2,386,600               -
   Issuance of stock in connection with
     employment agreements                             225,375               -



      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  thirteen  clinics  providing  medical,
 physical therapy, and chiropractic services in San Antonio, McAllen, Laredo,
 San Benito,  Corpus Christi and Houston,  Texas and New Orleans,  Louisiana.
 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  services
 provided  are  recognized  in  the periods  the related  revenue is  earned.
 Allowances are  maintained at  levels considered  appropriate by  management
 based  upon  historical  charge-off  experience  and  other  factors  deemed
 pertinent by management.   Fiscal 2002 and 2001  net patient revenues; as  a
 percentage of total revenues, for medical and chiropractic services amounted
 to 12% and 88%, 7% and 93%, respectively.

 Cash Equivalents - For purposes of the 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 and Louisiana.  The bank
 accounts are  insured by  the Federal  Deposit Insurance  Corporation up  to
 $100,000.

 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 $894,000 and  $704,000 for the  years ended September  30,
 2002 and 2001 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  Board("FASB") Statement  No. 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 5 "Goodwill."

 Recent Accounting Pronouncements  _ During the  fiscal year ended  September
 30, 2002,  the FASB  released FASB  Statement No.  145, "Recission  of  FASB
 Statements No.  4,  44  and 64,  Amendment  of  FASB Statement  No.  13  and
 Technical Corrections," and  FASB No. 146  "Accounting for Costs  Associated
 with Exit or Disposal Activities."  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, management is  required to make  estimates and assumptions  that
 effect the amounts reported in  these financial statements and  accompanying
 notes.  Actual  results could  differ from  those estimates.   The  accounts
 receivable allowance is a significant estimate.

 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 and  assumed conversion  of debentures.   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,  2002  was  anti-dilutive  and  at  2001  was
 immaterial.


 2. Clinic Acquisitions

 On September  1, 2000,  the Company  acquired  for cash  and stock  all  the
 operating assets of three Texas chiropractic clinics located in Laredo,  San
 Benito and Corpus  Christi.  The  total acquisition cost  was $6,000,000  of
 which $900,000 was paid in cash and $5,100,000 was paid through the issuance
 of 34,000,000 shares of the Company's common stock.

 The  Asset  Sale  and  Purchase  Agreement  (the  "Agreement")  states  that
 20,000,000 shares  from the  34,000,000 shares  issued  shall 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 September 1,  2000.  If  the
 combined EBITDA of the acquired clinics  for the year ended August 30,  2001
 does not reach  $1,500,000, the  Company shall have  the right  to redeem  a
 proportionate number of 10,000,000 shares based on the percentage difference
 between the actual EBITDA for the period and $1,500,000.  The Company  shall
 have the same right of redemption  based on an additional 10,000,000  shares
 for the year ended August 30, 2002.  In addition, the Agreement provides for
 a purchase adjustment if the average bid  price is below $.15 per share  for
 the 90 trading  days before  September 1,  2001 and  September 1,  2002.   A
 proportionate number of additional shares will be issued for the  difference
 between the actual  average share  bid price  and $.15  based on  24,000,000
 shares  and  10,000,000  at  September  1,  2001  and  September  1,   2002,
 respectively.  The calculation  of additional shares to  be issued shall  be
 reduced for any shares redeemed per the EBITDA adjustment.

 The actual  average daily  closing bid  price for  the common  stock of  the
 Company for the 90 trading  days before September 1,  2001 was $.0273.   Per
 the Agreement,  the  Company  has the  obligation  to  issue  an  additional
 62,925,000 shares for the price difference on the initial 14,000,000  shares
 issued as of September 1, 2000 per the Agreement.  For the year ended August
 31, 2001, the combined EBITDA for the acquired clinics was $992,000.   Since
 the actual EBITDA was 34% less than $1,500,000, the Company has the right to
 redeem 3,400,000 shares of the 10,000,000 shares for this period.   Finally,
 per the agreement,  the Company has  the obligation to  issue an  additional
 29,641,000 shares for the  price difference on the  6,600,000 shares due  on
 the actual EBITDA for the year ended August 31, 2001.

 In June 2002, the Company initiated  a lawsuit against the former doctor  at
 the San Benito clinic  alleging violations of  a non-compete agreement  with
 the Company.  The  doctor had held  a 50% ownership  interest in the  Corpus
 Christi clinic.  The Company agreed to drop the lawsuit in consideration  of
 the doctor returning his portion of the proceeds from the sale of the Corpus
 Christi clinic.  As a result of  this settlement agreed to on September  30,
 2002, the cash portion of the purchase was reduced by $112,500 and the  note
 payable by  the same  amount.   In  addition, the  doctor agreed  to  return
 2,100,000 shares  from the  initial 14,000,000  shares issued  in  September
 2000, 1,250,000 from the September 2001 escrow shares and 1,250,000 from the
 September 2002 escrow shares. See Footnote 6 "Notes Payable" and Footnote  7
 "Related Party Transactions."

 The actual  average daily  closing bid  price for  the common  stock of  the
 Company for the 90 trading  days before September 1,  2002 was $.01.   Since
 the actual EBITDA was 83% less than $1,500,000, the Company has the right to
 redeem 7,262,000 shares of  the 8,750,000 shares for  this period after  the
 adjustment  discussed  above.   Per  the  agreement,  the  Company  has  the
 obligation to issue an additional 20,832,000 shares for the price difference
 on the 1,488,000 shares due on the  actual EBITDA for the year ended  August
 31, 2002.

 Based on the above calculations, the Company has the obligation to issue  an
 additional 53,487,000 shares for the initial shares, as adjusted; 25,936,000
 shares for the 2001 EBITDA, as adjusted; 13,496,000 for the 2002 EBITDA. Per
 the agreement,  the  Company  would be  obligated  to  issue  an  additional
 100,255,000 shares  in total  as of  September  30, 2002.   The  Company  is
 currently in negotiations with  the sellers to  modify the Agreement,  which
 could possibly reduce the number of  additional shares that would be  issued
 to satisfy the obligation of the Company.

 The acquisition has been accounted for as a purchase.  The fair value of net
 assets acquired, primarily patient accounts receivable, was recorded in  the
 amount of $2,150,000.   The excess  of the total  acquisition cost over  the
 fair value  of the  net assets  acquired  in the  amount of  $3,850,000  was
 recorded as goodwill on the September 1, 2000 acquisition date.  Based on  a
 subsequent review of assets acquired, the  amount of goodwill was  increased
 $656,000 and the fair value of assets was  reduced by the same amount.   See
 Footnote 5 "Goodwill."


 3. Obligations in Default

 In September 2000, the Company  issued a note in  the amount of $900,000  in
 connection with  the acquisition  of three  clinics,  which was  reduced  to
 $787,500 in connection  with a lawsuit  settlement in September  2002.   See
 Footnote 2  "Clinic Acquisitions."   An  additional note  in the  amount  of
 $50,000 was issued in December 2000.  Both notes were due September 1, 2002.
 The  total obligation in default,  including accrued interest, was  $975,750
 as of September 30, 2002.  See Footnote 7 "Related Party Transactions."

 At September 30, 2002, the Company was delinquent on payments, according  to
 the Plan of Reorganization  confirmed by the  Bankruptcy Court in  September
 2000, to unsecured  creditor claims  and insider  claims in  the amounts  of
 $356,000 and $440,000, respectively.

 In addition, the Company was delinquent on payments due under an installment
 payment plan  with the  Internal Revenue  Service  ("IRS") to  remit  unpaid
 payroll taxes and penalties for the first and second quarters of 2001.   The
 Company is  in the  process  of negotiating  a  reduction in  penalties  and
 interest for late payment of taxes due under this plan.  However, there  are
 no assurances that  the IRS will  not pursue action,  which could result  in
 adverse consequences to the Company.

 Before  March 31,  2003,  Management  expects  to  amend  the  note  payable
 issued in connection  with the  acquisition of  three clinics  to allow  for
 payment over a longer period of time.  In addition, Management continues  to
 focus on  increasing  payments  on  personal  injury  case  settlements  and
 increase the number of worker's compensation  cases, which result in  higher
 settlement amounts per case compared to personal injury cases.  As a  result
 a result of these and other actions to improve cash flow, overall  liquidity
 should improve during the first six months of fiscal 2003.


 4. Property and Equipment

 Property and equipment consists of the following:

                                                 Useful Life    9/30/2002
                                                 -----------    ----------
    Land                                                   -   $   120,000
    Building and leasehold improvements           2-39 years        56,917
    Furniture and equipment, including
      equipment under capital leases              5-15 years       540,613
    Automobiles                                      5 years        25,693
    Less accumulated depreciation
      and amortization                                            (432,523)
                                                                ----------
                                                               $   310,700
                                                                ==========

 5. Goodwill

 Following is  an  analysis  of goodwill  recorded  in  connection  with  the
 acquisition of three clinics at September 1, 2000.

              Date                        Transaction                Amount
 -----------------------------   ---------------------------       ----------
 September 1, 2000               Initial purchase allocation      $ 3,850,000
                                 Amortization expense                 (32,000)
                                                                   ----------
 Balance at September 30, 2000                                      3,818,000

                                 Adjust purchase allocation           331,000
                                 Amortization expense                (424,000)
                                                                   ----------
 Balance at September 30, 2001                                      3,725,000

                                 Adjust purchase allocation           325,000
                                 Reduce purchase price               (802,000)
                                 Impairment                          (900,000)
                                                                   ----------
 Balance at September 30, 2002                                    $ 2,348,000
                                                                   ==========

 For the fiscal year ended September 30, 2001, the Company amortized goodwill
 using the straight-line method over 10 years.  The Company elected to  adopt
 the provisions of FASB Statement No.  142 ("FASB 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.  FASB 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 test as of  December 31, 2001.  For testing  purposes
 the "reporting  unit", as  prescribed by  FASB 142,  was the  three  clinics
 acquired in September 2000 for a total purchase price of $6,000,000.

 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.
 Based on the income  approach, in the opinion  of the independent  valuation
 firm, the fair value of  the net assets of  the reporting unit exceeded  the
 carrying value as  of December 31,  2001.  Thus,  goodwill of the  reporting
 unit was not impaired.

 For the twelve month period ended  September 30, 2002, operating income  for
 the reporting unit was  $163,000 compared to $927,000  for the twelve  month
 period ended  September  30,  2001.   Due  to  the  substantial  decline  in
 operating income,  the  Company engaged  an  independent valuation  firm  to
 conduct the impairment test as of September  30, 2002.  Based on the  income
 approach, in the opinion of the  independent valuation firm, the fair  value
 of the net assets of the reporting unit was $4,000,000.  Since the  carrying
 value of  the  reporting  unit was  approximately  $4,900,000,  the  Company
 elected to record an impairment loss of $900,000.


 6. Notes Payable and Capital Lease Obligation

                                                      9/30/2001     9/30/2002
                                                      ---------     ---------
    Acquisition note payable                         $  950,000    $  837,500
    Other notes payable and capital lease obligation     27,487        80,456
                                                      ---------     ---------
                                                     $  977,487    $  917,956
                                                      =========     =========

 The acquisition note  payable is to  an investment group,  in which  certain
 officers and directors, and a beneficial owner of more than 5% of the common
 stock have a financial interest.   The note bears  interest at 8% per  annum
 and was due August  31, 2002.  As  additional consideration, the  investment
 group was issued  9,500,000 shares of  restricted common stock  with a  fair
 value of $0.025  per share.   In connection with  a lawsuit settlement,  the
 number of shares was reduced to 8,375,000  as of September 30, 2002.   These
 financing costs were amortized over  the term of the  loan.  See Footnote  2
 "Clinic Acquisitions" and Footnote 7 "Related Party Transactions."


 7. Related Party Transactions

 Belair Capital Group, Ltd. ("Belair"),  a Nevada limited liability  company,
 is the  holder of  a $900,000  note payable  issued in  connection with  the
 acquisition of three clinics in September  2000 and another loan of  $50,000
 in December  2000.   In addition,  the Company  issued 9,500,000  shares  of
 common stock to Belair  as further consideration.   The principal amount  of
 the note was reduced to  $837,500 and the number  of shares to 8,375,000  in
 connection with a lawsuit settlement as of September 30, 2002.  See Footnote
 6 "Notes Payable" and Footnote 2 "Clinic Acquisitions."

 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,
 2001 (30% member interest).

 On October 1, 2000, the Company entered into new employment agreements  with
 the President and CEO,  the Chief Financial Officer  and, a director of  the
 Company, who is also the director of the New Orleans, Louisiana clinics.  As
 consideration  for  entering  into  these  agreements,  the  Company  issued
 5,200,000 shares of common stock to the President and CEO, 500,000 shares of
 common stock to the CFO and 3,215,000 shares to the director


 8. Commitments

 Leases:

 Rent expense for  the years ended  September 30, 2001  and 2002 amounted  to
 approximately $386,000  and $391,000,  respectively.   Future minimum  lease
 payments under operating  leases with  terms in excess  of one  year are  as
 follows:

                       Years ended September 30,
                       -------------------------
                       2003                            $ 272,000
                       2004                              124,000
                       2005                                4,000
                                                       ---------
                       Total minimum lease payments   $  400,000
                                                       =========


 The Company has a three-year employment agreement ending September 30,  2003
 with its  Chief Executive  Officer.   In  the event  of termination  of  the
 agreement for any reason, he  will be entitled to  a severance pay equal  to
 six months of his full salary.  After a change of control of the Company, as
 defined in  the  employment  agreement, if  the  Chief  Executive  Officer'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 one year.


 9. 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 superceded  any
 prior debt obligation  of the  Company to the  holders of  the Regulation  D
 debentures.  The new  debentures are 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, in  satisfaction of  its obligation,  the
 Company issued 20,475,000 shares of common stock on September 19, 2000 to an
 escrow trustee designated by the debenture holders.  At any time during  the
 three year period ended August 24, 2003, upon receipt of a conversion notice
 from the debenture holders, the escrow  trustee will instruct the  Company's
 transfer agent to issue a  portion of the 20,475,000  shares in the name  of
 individual debenture holders.  Pursuant to Section 1145 of the United States
 Bankruptcy Code, the shares then issued to the debenture holders are  exempt
 from registration under the Securities Act of 1933.  Upon conversion by  the
 debenture holders of a specified number of the 20,475,000 shares held by the
 escrow trustee, the Company will transfer a proportionate amount in  dollars
 of the  $3,697,000 principal  of  the new  debentures  to common  stock  and
 additional paid in capital included in stockholders' equity.  Until the time
 of conversion, the debenture holders will  have no shareholder rights as  to
 the 20,475,000 shares issued by the Company in settlement of its  obligation
 in September 2000.

 Based on conversion  notices received, the  principal amount of  outstanding
 debentures  was  reduced  by  $2,386,600  and  the  number  of  issued   and
 outstanding common stock increased by 13,216,507 shares for the fiscal  year
 ended September 30,  2001.  There  were no conversions  for the fiscal  year
 ended September 30, 2002.


 10. Stockholders' Equity

 On October 1, 2000, the Company entered into new employment agreements  with
 the President and CEO,  the Chief Financial Officer  and, a director of  the
 Company, who is also the director of the New Orleans, Louisiana clinics.  As
 consideration  for  entering  into  these  agreements,  the  Company  issued
 5,200,000 shares of common stock to the President and CEO, 500,000 shares of
 common stock to the CFO  and 3,215,000 shares to  the director.  In  January
 2001, the Company issued 50,000 shares to a clinic employee as consideration
 for entering into an  employment agreement.  See  Footnote 7 "Related  Party
 Transactions."

 During the fiscal year ended September 30, 2001, options to purchase 250,000
 shares of common stock previously granted  to Directors under the 1995  Non-
 Employee Director Stock Option Plan ("Director Plan") were cancelled by  the
 Company.  The  cancellation resulted  in $200,104  in other  income for  the
 year.   The Company  also issued  new options  to five  directors under  the
 Director Plan to purchase 160,000 shares at a price of $.05 per share.

 The holders of any preferred stock,  which might be issued, shall have  such
 rights, preferences and  privileges as may  be determined  by the  Company's
 board of directors. Currently there are no holders of preferred stock.


 11. 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, 2001  and 2002 consist  of
 the following, stated as a percentage of total accounts receivable:

                                                        2001      2002
                                                        ----      ----
       Personal injury claims                            77%       74%
       Medical claims filed with insurance companies      8         8
       Workman's compensation claims                      8         8
       Other claims                                       7        10
                                                        ----      ----
                                                        100%      100%
                                                        ====      ====

 12. Income Taxes

 There  are  two  components of income  tax provision, current  and deferred.
 Current income tax provisions approximate taxes  to be paid or refunded  for
 the  applicable  period.   Balance  sheet  amounts  of  deferred  taxes  are
 recognized on  the temporary  differences between  the bases  of assets  and
 liabilities as  measured by  tax laws  and their  bases as  reported in  the
 financial statements.  The measurement of deferred tax assets is reduced  if
 necessary, by  the amount  of  any tax  benefits  that, based  on  available
 evidence, are not expected to be realized.  Deferred tax expense or  benefit
 is then recognized  for the  change in  deferred tax  liabilities or  assets
 between periods.

 The principal  differences resulting  in deferred  taxes are  the  financial
 statement bases versus the tax bases  of amortization of goodwill,  vacation
 accrual, interest accrual,  employee stock options,  and net operating  loss
 carryovers.

 The net deferred tax assets in  the consolidated balance sheet at  September
 30, 2002 are as follows:

                                                   Current        Non-current
                                                  ---------       -----------
   Deferred tax assets:
     Vacation accrual                            $    4,300      $          -
     Interest accrual                                56,600                 -
     Goodwill                                             -           337,900
     Contributions carry-forwards                         -               300
     Net operating loss carry-forwards                    -         5,992,400
                                                  ---------       -----------
       Total assets                                  60,900         6,330,600

   Deferred tax liabilities:
     Employee stock options                               -           (24,000)
                                                  ---------       -----------
       Net deferred tax assets                       60,900         6,306,600
       Less valuation allowance                     (60,900)       (6,306,600)
                                                  ---------       -----------
                                                 $        -      $          -
                                                  =========       ===========

 At September 30, 2002, the Company  has net operating loss and  contribution
 carry forwards  of  approximately  $16,000,000 and  $750,  respectively,  to
 offset future taxable income.  These carry forwards expire through the  year
 2015.  A valuation allowance was established to reduce the net deferred  tax
 asset for the amounts that will more likely  than not be realized.  The  net
 increase  in  valuation  allowance  for  the year  ended  September 30, 2002
 was approximately $1,130,000.  This increase  is due  to  current  year  net
 operating loss, which is more likely than not to be unrealizable.


 13. Stock Options and Warrants

 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, 2002:

                                                         Option Price
                                                   -------------------------
                                      Number of    Per Share    Total Option
                                        Shares                      Price
                                      ---------    ----------     ----------
 Outstanding at September 30, 2000    1,237,000   $0.05 - $2.34  $   403,100
   (1,237,000 exercisable)

 For the year ended September 30, 2001:
       Granted                          240,000       $0.05           12,000
       Cancelled                        250,000   $0.05 - $2.34      353,700
       Expired                          209,500       $0.05           10,500
       Exercised                              -         -                  -
                                      ---------                   ----------
 Outstanding at September 30, 2001    1,017,500       $0.05           50,900
   (1,017,500 exercisable)

 For the year ended September 30, 2002:
       Granted                                -         -                  -
       Cancelled                              -         -                  -
       Expired                                -         -                  -
       Exercised                              -         -                  -
                                      ---------                   ----------
 Outstanding at September 30, 2002    1,017,500       $0.05      $    50,900
   (1,017,500 exercisable)            =========                   ==========

 In compliance  with  FASB  No. 123,  the  Company  recognizes  and  measures
 compensation costs  related to  the Employee  Plan utilizing  the  intrinsic
 value based method.  Accordingly, no  compensation cost has been recorded.

 Had compensation  expense  been  determined on  the  fair  value  of  awards
 granted, net income and net income per share would have been as follows:

                                 2002                      2001
                                 ----                      ----
                       As Reported   Pro forma   As Reported   Pro forma
                       -----------   ----------  -----------   ---------
   Net income (loss)  $(3,053,104)  $(3,053,104)   $ 153,938   $ 144,089
   Net income (loss)
     per share        $     (0.03)  $     (0.03)   $    0.00   $    0.00


 The fair value of all options and warrants for 2001 are estimated using  the
 Black-Scholes option-pricing model with the following assumptions: risk free
 interest rate  5.75%;  expected  life 5  years;  expected  volatility  466%;
 dividend yield 0%.  The fair values generated by the Black-Scholes model may
 not  be  indicative of  the  future  benefit, if any,  which may be received
 by the  holders.  The  weighted  average  exercise  price  for  all  options
 outstanding was  $0.05.    Since  certain  options  have  an  indeterminable
 expiration, the weighted average expiration date could not be determined.


 14. 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, 2002,
 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, 2002, 190,475 shares  have been issued under  the Executive Stock  Bonus
 Plan.


 15. Disclosures About Fair Value of Financial Instruments

 Generally, the fair  value of  financial instruments  classified as  current
 assets or  liabilities  approximate carrying  value  due to  the  short-term
 maturity of the instruments.  The  fair value of the convertible  debentures
 carried at $1,310,400 is believed to  be nominal, based on the market  value
 of  7,258,000  shares  of  common  stock  into  which  the  debentures   are
 convertible.


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

 None to report

<PAGE>

                                   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.   44   President, Chief Executive      March 1995
                               Officer and Chairman of the
                               Board of Directors

 John C. Stuecheli        55   Chief Financial Officer, Vice   January 1999
                               President and Secretary

 Jeffrey Jones, D.C.      41   Director                        March 1995

 Michael R. Smith, M.D.   44   Director                        December 1996

 V. John Mansfield        55   Director                        June 1998

 James Roberts            43   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.

      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.
  He provided medical services at two of the Company's clinics and served  as
 the Medical Director for the Company's Texas clinics.  He continues to serve
 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.  Mr. 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.

<PAGE>
 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 2002  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            2002         262,950
  Chairman of the Board,          2001         262,950        130,000 (2)   20,000 (4)
  President and                   2000         262,950
  Chief Executive Officer

  John C. Stuecheli               2002         110,000
  Vice President, Chief           2001         110,000         12,500 (3)
  Financial Officer               2000         101,250                      42,500 (1)
  and Secretary
 ___________________________

 (1)  Options granted under  the Employee Plan in  connection with a  salary
      reduction during the pendency of Chapter 11 Bankruptcy.

 (2)  As  consideration  for entering  into  a  new  three  year  employment
      agreement, Dr. Stucki was issued  5,200,000 shares of restricted stock
      at a price of $0.025 per share.

 (3)  As  consideration  for entering  into  a  new  three  year  employment
      agreement, Mr. Stuecheli was issued 500,000 shares of restricted stock
      at a price of $0.025 per share.

 (4)  Options granted under the Director Plan
</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
 2002 and the value of the unexercised options held by them at September  30,
 2002.

                    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 2002 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         20,000/  -         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, 2002:


                                Options
                             Granted/Shares       Option Shares
        Plan                     Issued             Exercised
    -------------                -------            ---------
    Employee Plan                827,500                 0

    Director Plan                190,000                 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 reimburses  all  Directors  for  reasonable  out-of-pocket  expenses
 incurred in connection with attending Board of Director 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 2000, options to  purchase
 150,000 and  40,000  shares  were  granted  to  non-employee  directors  and
 employee directors, respectively.  The exercise price was $0.05 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.  As  added  consideration  for  entering  into  the  employment
 agreement, Dr. Stucki received 5,200,000 shares of common stock.  The shares
 bear a "Rule  144" restrictive legend  and are valued  at $0.025 per  share,
 which is the estimated fair market value as of October 1, 2000.  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.  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.

      Effective October 1, 2002, United Chiropractic Clinic of Uptown,  Inc.,
 a subsidiary of the  Company, entered into a  one year employment  agreement
 with Dr. Jeffrey Jones as a clinic director providing chiropractic  services
 at the New Orleans Uptown clinic for an annual base salary of $180,000.   He
 is also entitled  to standard employee  benefits and a  term life  insurance
 policy of $500,000.

      Effective October  1,  2000,  the Company  entered  into  a  three-year
 employment agreement  with John  C. Stuecheli  to serve  as Chief  Financial
 Officer and Secretary of the Company for an annual base salary of  $110,000.
 As  added  consideration for  entering into  the employment  agreement,  Mr.
 Stuecheli received 500,000 shares of common stock.  The shares bear a  "Rule
 144" restrictive legend  and are valued  at $0.025 per  share, which is  the
 estimated fair market value as of October 1, 2000.


 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, 2002,  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.  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.

                                                 Number of      Percent of
                                                  Shares           Class
                                                 ----------        -----
  David P. Voracek, D.C. (1)                     16,780,356        19.1%
  2025 Tartan Trail
  Highland Village, Texas 75077

  Joseph W. Stucki, D.C. (2)                     30,974,727        35.4%
  1300 West Walnut Hill Lane, Suite 275
  Irving, Texas 75038

  Jeffrey Jones, D.C. (3)                        11,749,151        13.3%
  807 S. Carrollton Avenue
  New Orleans, Louisiana 70118

  John C. Stuecheli (4)                             677,000            *
  1300 West Walnut Hill Lane Suite 275
  Irving, Texas 75038

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

  James Roberts (6)                                  59,500            *
  6712 Biltmore Pl.
  Plano, Texas 75023

  V. John Mansfield (7)                              50,000            *
  10956 Big Canoe
  Big Canoe, Georgia 30143

  Officers and Directors as a                    44,224,045        50.0%
  group (6persons)
 __________________________
  *   Less than one percent.
 (1)  The number of shares reported includes 1,650,000 shares owned of record
      by Mainstream Enterprises  LLC, a limited  liability company, in  which
      Dr. Voracek is the sole member, and 2,480,520 shares owned of record by
      Belair Capital Group, Ltd., a limited  liability company, in which  Dr.
      Voracek has a 30% 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 4,308,000  shares owned  of record  by Belair  Capital  Group,
      Ltd., a limited liability company, in which Dr. Stucki has a 51% member
      interest and 20,000 shares issuable upon  exercise of options at  $0.05
      per share, which are currently exercisable.

 (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 19%  member
      interest and 20,000 shares issuable upon  exercise of options at  $0.05
      per share, which are currently exercisable.

 (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. The number of shares  owned
      includes 50,000 shares issuable upon exercise  of options at $0.05  per
      share, which are currently exercisable.


 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).


 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, 2002
           (ii)  Consolidated Statements of Operations for the years
                 ended September 30, 2002 and 2001.
           (iii) Consolidated Statement of Stockholders' Equity for
                 the years ended September 30, 2002 and 2001.
           (iv)  Consolidated Statements of Cash Flows for the years
                 ended September 30, 2002 and 2001.
           (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).

           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.*

           99.1  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.*

           99.2  Certification pursuant 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 14, 2003        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 14, 2003

 /s/ John C. Stuecheli    Chief Financial Officer and
     John C. Stuecheli    Vice President-Finance
                          (Principal Financial and
                          Accounting Officer)                 January 14, 2003

 /s/ V. John Mansfield    Director, Chairman of Audit
     V. John Mansfield    Committee                           January 14, 2003

 /s/ James Roberts        Director
     James Roberts                                            January 14, 2003

 /s/ Dr. Jeff Jones       Director
     Dr. Jeff Jones                                           January 14, 2003

 /s/ Dr. Michael Smith    Director
     Dr. Michael Smith                                        January 14, 2003


<PAGE>

                 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                 --------------------------------------------

 I, Dr. J. W. Stucki, Chairman and Chief Executive Officer, certify that:

 1) I have   reviewed  this  annual  report   on  Form  10-KSB  of   American
    HealthChoice, Inc.;

 2) Based on  my knowledge,  this annual report  does not  contain any untrue
    statement of a  material fact or omit to  state a material fact necessary
    to make  the statements made,  in light of  the circumstances under which
    such statements were  made, not  misleading with  respect to  the  period
    covered by this annual report;

 3) Based  on my  knowledge, the  financial  statements, and  other financial
    information  included  in  this  annual  report,  fairly  present  in all
    material respects the financial condition, results of operations and cash
    flows of the registrant as  of, and for,  the periods  presented in  this
    annual report;

 4) The  registrant's other  certifying officer  and  I are  responsible  for
    establishing  and  maintaining  disclosure  controls  and  procedures (as
    defined in Exchange  Act Rules 13a-14 and  15d-14) for the registrant and
    we have:

   a) designed  such  disclosure  controls  and  procedures  to  ensure  that
      material  information  relating  to   the  registrant,  including   its
      consolidated subsidiaries, is made known to  us by others within  those
      entities, particularly during the period in which this annual report is
      being prepared;

   b) evaluated  the effectiveness  of the  registrant's disclosure  controls
      and procedures as of a date within 90 days prior to the filing date  of
      this annual report (the "Evaluation Date"); and

   c) presented in this annual report our conclusions about the effectiveness
      of the disclosure controls and procedures based on our evaluation as of
      the Evaluation Date;

 5) The registrant's other certifying officer and I have disclosed, based  on
    our most recent evaluation, to the  registrant's  auditors and the  audit
    committee of registrant's  board of directors (or persons performing  the
    equivalent function):

   a) all significant deficiencies  in the  design or  operation of  internal
      controls  which  could adversely  affect  the registrant's  ability  to
      record,  process,  summarize  and   report  financial  data  and   have
      identified  for the  registrant's auditors any  material weaknesses  in
      internal controls; and

   b) any fraud, whether or not material,  that involves management or  other
      employees who  have  a significant  role in  the registrant's  internal
      controls; and

 6) The registrant's  other certifying officer and  I have indicated in  this
    annual report  whether or not there  were significant changes in internal
    controls  or in  other factors  that could  significantly affect internal
    controls subsequent to the  date of our most recent evaluation, including
    any corrective  actions  with  regard  to  significant  deficiencies  and
    material weaknesses.

 Date: January 14, 2003

 Dr. J.W. Stucki
 Chairman and Chief Executive Officer

<PAGE>


                 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                 --------------------------------------------

 I, John C. Stuecheli, Vice President and Principal Financial and  Accounting
 Officer, certify that:

 1) I  have   reviewed  this  annual  report   on  Form  10-KSB  of  American
    HealthChoice, Inc.;

 2) Based on  my knowledge,  this annual report  does not  contain any untrue
    statement of a  material fact or omit to  state a material fact necessary
    to make  the statements made,  in light of  the circumstances under which
    such  statements were  made, not  misleading with  respect to  the period
    covered by this annual report;

 3) Based  on my  knowledge, the  financial  statements, and  other financial
    information  included  in  this  annual  report,  fairly  present  in all
    material respects the financial condition, results of operations and cash
    flows of the registrant as  of, and for,  the periods  presented in  this
    annual report;

 4) The  registrant's other  certifying officer  and  I are  responsible  for
    establishing  and  maintaining  disclosure  controls  and  procedures (as
    defined in Exchange Act Rules 13a-14 and  15d-14) for the registrant  and
    we have:

   a) designed  such  disclosure  controls  and  procedures  to  ensure  that
      material  information  relating  to   the  registrant,  including   its
      consolidated subsidiaries, is made known to  us by others within  those
      entities, particularly during the period in which this annual report is
      being prepared;

   b) evaluated  the effectiveness  of the  registrant's disclosure  controls
      and procedures as of a date within 90 days prior to the filing date  of
      this annual report (the "Evaluation Date"); and

   c) presented in this annual report our conclusions about the effectiveness
      of the disclosure controls and procedures based on our evaluation as of
      the Evaluation Date;

 5) The registrant's other certifying officer and I have disclosed, based  on
    our most recent evaluation, to the  registrant's  auditors and the  audit
    committee of registrant's  board of directors (or persons performing  the
    equivalent function):

   a) all significant deficiencies  in the  design or  operation of  internal
      controls which  could adversely  affect  the  registrant's  ability  to
      record,  process,  summarize  and   report  financial  data  and   have
      identified  for the  registrant's auditors any  material weaknesses  in
      internal controls; and

   b) any fraud, whether or not material,  that involves management or  other
      employees who have  a significant  role in  the  registrant's  internal
      controls; and

 6) The registrant's  other certifying officer and  I have indicated in  this
    annual report  whether or not there  were significant changes in internal
    controls  or in  other factors  that could  significantly affect internal
    controls subsequent to the  date of our most recent evaluation, including
    any corrective  actions  with  regard  to  significant  deficiencies  and
    material weaknesses.

 Date: January 14, 2003

 John C. Stuecheli
 Principal Financial and Accounting Officer