<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2003

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

         For the transition period from _____________ to ______________.

                         Commission File Number 33-43423

                               NUWAY MEDICAL, INC.
                               -------------------
        (exact name of small business issuer as specified in its charter)

           Delaware                                        65-0159115
           --------                                        ----------
(State or other jurisdiction of               (IRS Employer Identification No.)
 incorporation or organization)

       23461 South Pointe Drive, Suite 200 Laguna Hills, California 92653
       ------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (949) 454-9011
                                 --------------
                           (Issuer's telephone number)


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 [ ]

Number of shares  outstanding of each of the issuer's  classes of common equity,
as of February 17, 2004:  36,386,486 shares of common stock,  $0.00067 par value
per share.



<PAGE>

<TABLE>
<CAPTION>


                                TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION                                                                PAGE NO.

<S>         <C>                                                                                  <C>
       Item 1.    Financial Statements                                                           3

                  Consolidated Balance Sheets - as of September 30, 2003 (unaudited) and
                  December 31, 2002                                                              3

                  Consolidated Statements of Operations - for the three and nine
                  months  ended  September  30,  2003  and  September  30,  2002
                  (unaudited) 4

                  Consolidated Statements of Cash Flows - for the nine months ended
                  September 30, 2003 and September 30, 2002 (unaudited)                          5

                  Notes to Consolidated Financial Statements                                     7

       Item 2.    Management's Discussion and Analysis                                           21

       Item 3.    Controls and Procedures                                                        29


PART II.   OTHER INFORMATION

       Item 5.    Other Information                                                              29

       Item 6.    Exhibits and Reports on Form 8-K                                               31

       Signatures                                                                                31

       Certifications                                                                            32
</TABLE>

                                       2
<PAGE>


                  NUWAY MEDICAL, INC. AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEETS
            AS OF SEPTEMBER 30, 2003 AND DECEMBER 31, 2002

<TABLE>
<CAPTION>

   ASSETS
                                                                       September 30, 2003      December 31, 2002
                                                                          (unaudited)
                                                                       -------------------   ---------------------
CURRENT ASSETS
<S>                                                                               <C>                       <C>
     Cash and Cash Equivalents                                                    $ 4,610                   $ 521
                                                                       -------------------   ---------------------
                 Total Current Assets                                               4,610                     521
                                                                       -------------------   ---------------------

PROPERTY AND EQUIPMENT, net                                                        22,430                  28,844
                                                                       -------------------   ---------------------

OTHER ASSETS
     Marketing Database, net                                                            -                 255,000
     Med Wireless License, net                                                  1,826,906               4,090,000
                                                                       -------------------   ---------------------
                 Total Other Assets                                             1,826,906               4,345,000
                                                                       -------------------   ---------------------

TOTAL ASSETS                                                                  $ 1,853,946             $ 4,374,365
                                                                       ===================   =====================

            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
     Accounts Payable and Accrued Expenses                                      $ 944,472             $ 1,131,579
     Notes Payable, net                                                         1,384,986               1,120,000
     Debentures Payable, net                                                      150,000                 150,000
                                                                       -------------------   ---------------------
                 Total Current Liabilities                                      2,479,458               2,401,579
                                                                       -------------------   ---------------------

COMMITMENTS AND CONTINGENCIES AND
     SUBSEQUENT EVENTS (Notes 8, 9, 10 and 11)

STOCKHOLDERS' EQUITY  (DEFICIT)
     Preferred Stock, $.00067 Par Value, 25,000,000
       Shares Authorized, 559,322 and No Shares Issued
       and Outstanding at September 30, 2003 and
       December 31, 2002, respectively                                                375                       -
     Common Stock, $.00067 Par Value, 100,000,000
       Shares Authorized, 35,761,486 and 17,137,727 Shares
       Issued and Outstanding at September 30, 2003 and
       December 31, 2002, respectively                                             23,959                  11,483
     Additional Paid-In Capital                                                22,977,835              20,289,936
     Accumulated Deficit                                                      (23,500,677)            (18,201,629)
     Treasury Stock at cost, 44,900 shares as of
       September 30, 2003 and December 31, 2002                                  (127,004)               (127,004)
                                                                       -------------------   ---------------------
                 Total Stockholders' Equity (Deficit)                            (625,512)              1,972,786
                                                                       -------------------   ---------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                          $ 1,853,946             $ 4,374,365
                                                                       ===================   =====================
</TABLE>

                                       3
<PAGE>




                       NUWAY MEDICAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 and 2002


<TABLE>
<CAPTION>

                                                            Three Months                               Nine Months
                                                         Ended September 30,                       Ended September 30,
                                                        2003             2002              2003              2002
                                                    --------------    ---------------    --------------    --------------
                                                     (unaudited)        (unaudited)        (unaudited)       (unaudited)
Revenue
<S>                                                   <C>                  <C>              <C>                <C>
        License of Software                           $         -          $       -        $   40,165         $       -
                                                    --------------    ---------------    --------------    --------------
              Total Sales
                                                                -                  -            40,165                 -
                                                    --------------    ---------------    --------------    --------------

Costs and Expenses

        Selling, General and Administration               614,075            737,317         2,618,183         1,825,205

        Depreciation and Amortization                     219,388              2,600           658,164             7,800
        Impairment of Intangible Assets (Note 4)        1,866,344                  -         1,866,344                 -
        Cancellation of Stock Warrants Previously
        Expensed                                                -                  -                 -       (1,659,750)
                                                    --------------    ---------------    --------------    --------------
              Total Costs and Expenses
                                                        2,699,807            739,917         5,142,691           173,255
                                                    --------------    ---------------    --------------    --------------


Operating (Loss)                                      (2,699,807)          (739,917)       (5,102,526)         (173,255)
                                                    --------------    ---------------    --------------    --------------

Other (Expenses) Income

        Interest (Expense) Income                       (121,567)                  -         (196,523)             6,629
                                                    --------------    ---------------    --------------    --------------

              Net Other (Expenses)                      (121,567)                  -         (196,523)             6,629
                                                    --------------    ---------------    --------------    --------------


(Loss) Income Before Income Taxes                     (2,821,374)          (739,917)       (5,299,049)         (166,626)

Income Taxes (Provision) Benefit                                -                  -                 -                 -
                                                    --------------    ---------------    --------------    --------------

Net (Loss) Income from Continuing Operations          (2,821,374)          (739,917)       (5,299,049)         (166,626)
                                                    --------------    ---------------    --------------    --------------


Discontinued Operations   (Note 2)                              -          (372,833)                 -         (600,986)

                                                    --------------    ---------------    --------------    --------------
Net (Loss)                                          $ (2,821,374)      $ (1,112,750)     $ (5,299,049)      $  (767,612)
                                                    ==============    ===============    ==============    ==============


(Loss) Earnings Per Common Share and Common Share
        Equivalents Basic and Fully Diluted


        Common Share Equivalents Outstanding           33,769,193          9,999,062        28,628,360         7,437,069
                                                    ==============    ===============    ==============    ==============
              Net (Loss) Income Per Share           $      (0.08)        $    (0.11)       $    (0.19)       $    (0.10)
                                                    ==============    ===============    ==============    ==============

</TABLE>

                                       4

<PAGE>




                       NUWAY MEDICAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                             Nine Months Ended September 30,
                                                                                  2003             2002
                                                                              -----------      -----------
<S>                                                                                <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss                                                                    $(5,299,049)     $  (767,612)
  Adjustments to Reconcile Net Loss to Cash Used in Operating Activities:
         Depreciation and Amortization                                            658,164            7,800
         Impairment of Intangible Assets (Note 4)                               1,866,344               --
         Amortization of Discount on Note                                          93,092               --
         Issuance of Stock for Services and Interest                            2,162,984          727,582
         Cash Used in Discontinued Operations                                          --          889,096
         Cancellation of Warrants Previously Recorded as Expense                       --       (1,659,750)
         Bad Debt Expense                                                          10,000               --
         Increase in Prepaid Expenses and Other Current Assets                                       5,400
         Decrease in Accounts Payable and Accrued Expenses                       (187,107)         (18,931)
                                                                              -----------      -----------
                                                                                 (695,572)        (816,415)

CASH FLOWS FROM INVESTING ACTIVITIES
      Cash Used in Discontinued Operations                                             --          (23,107)
      Increase in Other Assets                                                         --           23,703
                                                                              -----------      -----------
      Net Cash Used in Investing Activities                                            --              596
                                                                              -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES
      Repayment of Convertible Debentures                                              --          (50,000)
      Reduction of Loan from Officers & Affiliates                                     --          380,377
      Proceeds from the Sale of Securities                                             --          250,000
      Proceeds from the Sale of Preferred Stock                                   279,661               --
      Proceeds from Term Loan                                                     420,000               --
                                                                              -----------      -----------
      Net Cash Provided by  Financing Activities                                  699,661          580,377
                                                                              -----------      -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                4,089         (235,442)


CASH AND CASH EQUIVALENTS - BEGINNING                                                 521          244,344
                                                                              -----------      -----------

CASH AND CASH EQUIVALENTS - ENDING                                            $     4,610      $     8,902
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During the Period for:
                    Interest                                                  $        --      $        --
                    Income Taxes                                              $        --      $        --
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING TRANSACTIONS
     Conversion of Debentures                                                 $        --      $ 2,200,000
ISSUANCE OF STOCK FOR CAPITALIZED ASSETS
     Software                                                                 $        --      $   300,000
     Med Wireless License, net                                                $        --      $ 4,620,000
     Increase in Debt for Med Wireless License                                $        --      $ 1,120,000
Effective Discount on Note Payable                                            $   245,420      $        --
</TABLE>

                                       5

<PAGE>


NOTE  1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION


           a) Principles of Consolidation and Basis of Presentation

           In  the  opinion  of the  management  of  NuWay  Medical,  Inc.  (the
           "Company")  the   accompanying   unaudited   consolidated   financial
           statements  contain  all  adjustments  (which  are  normal  recurring
           accruals)  necessary  to present  fairly the  consolidated  financial
           position  as of  September  30,  2003;  the  consolidated  results of
           operations for the three and nine months ended September 30, 2003 and
           2002;  and the  consolidated  cash  flows for the nine  months  ended
           September 30, 2003 and 2002.  Interim  results for the three and nine
           months ended September 30, 2003 are not necessarily indicative of the
           results that may be expected  for the year ending  December 31, 2003.
           The  interim  consolidated  financial  statements  should  be read in
           conjunction with the Company's  consolidated financial statements for
           the year ended  December  31,  2002  included in the  Company's  Form
           10-KSB, filed May 23, 2003.

           The  consolidated  balance  sheets at September 30, 2003 and December
           31, 2002  include the accounts of NuWay  Medical,  Inc. and its joint
           venture subsidiary,  NuWay Sports, LLC ("NuWay Sports") (collectively
           referred to as the "Company").  NuWay Medical, Inc. owns 51% of NuWay
           Sports and the remaining  49% is owned by Rasheed &  Associates,  and
           operations  for  NuWay  Sports   commenced  in  January  2003.  Thus,
           operations are  consolidated.  As there is no equity in NuWay Sports,
           100%  of  this  entity  is  absorbed  by  NuWay  Medical,   Inc.  All
           significant   inter-company   balances   have  been   eliminated   in
           consolidation.

           b)       Management's Plans

           The  Company  had  approximately  $3,000  of cash on hand at March 1,
           2004. From June 2003 to August 2003 the Company received  $420,000 in
           the form of a Note Payable as described in Note 7 below.  On November
           20, 2003,  the Company  received  $50,000 in the form of a Promissory
           Note as described in Note 11 below.  Notwithstanding  these financing
           activities,  the  Company  will need to raise  additional  capital to
           sustain operations and implement its growth strategy until such time,
           if ever, that the Company achieves  profitability.  As of the date of
           this filing, the Company was not a party to any definitive agreements
           to provide such financing.  Although the Company is in the process of
           actively reviewing additional proposals made by private investors and

                                       6
<PAGE>

           investment  bankers,  there can be no assurance that the Company will
           be able to consummate any such transactions on terms  satisfactory to
           the Company, or at all, or if consummated,  that such financings will
           provide the Company with sufficient capital. If the Company is unable
           to secure additional financing within the next 120 days it would need
           to significantly curtail and perhaps shut down its operations.  It is
           unlikely that the Company will be able to qualify for bank debt until
           such time as the Company is able to demonstrate  sufficient financial
           strength to provide confidence for a lender.

           The Company's shares were delisted effective as of June 10, 2003 from
           trading  on the Nasdaq  SmallCap  Market.  The  shares are  currently
           quoted on the pink sheets.  Although a market maker has  submitted an
           application   for   quotation   of  the   Company's   shares  on  the
           Over-the-Counter  Bulletin Board, there can be no assurance that this
           application  will be  approved by NASD (and,  if not,  that any other
           applications that may in the future be filed), or the Company will be
           cleared to trade on the Bulletin Board, in particular in light of the
           public  interest  concerns  raised by Nasdaq in  connection  with the
           delisting of the Company's shares.  This Nasdaq delisting has made it
           more difficult to effect trades and has led to a significant  decline
           in the frequency of trades and trading  volume.  The delisting  could
           also adversely  affect the Company's  ability to obtain financing due
           to the decreased liquidity of the Company's shares.

           Although the primary  development of the Player Record Library System
           ("PRLS")  has  been  completed,   management  plans  on  periodically
           upgrading its PRLS software  application  through additional research
           and development,  including tailoring its application to the specific
           needs of its  clients as those  needs are  brought  to the  Company's
           attention.  The Company will be unable to accomplish the foregoing on
           a long-term basis, however, unless and until the additional financing
           referred to above is secured.

           Based on its current business plan, and assuming sufficient financing
           is  obtained,  management  believes  it  will  be  able  to  generate
           meaningful sales of its PRLS software  application and that it may be
           able to secure sales or license agreements as early as the first half
           of 2004. The Company has entered into an agreement with its first NBA
           franchisee  to  implement  the PRLS  system for that  franchise.  The
           Company's PRLS was introduced to the  marketplace in January 2003 and
           generated a total of  approximately  $40,000 in  revenues  during the
           first and second  quarters of 2003 through the sale of a  scaled-down
           version of the product to 18 National  Football  League ("NFL") teams
           at the 2003 NFL Combine. Pursuant to these transactions,  the Company
           digitized  over 60,000  medical  images for use by NFL teams in their
           evaluation  of potential  draft picks.  Management  believes that its
           PRLS is already being  referred by its customers and prospects as the
           best of brand for its sports industry focus. The Company is marketing
           the  PRLS  to  multiple  sports  leagues  and  is  actively   seeking
           additional vertical market opportunities.  There can be no assurance,
           however,  that  the  Company  will  be  able to  secure  any  further
           agreements for its product,  that such  agreements will ever generate
           meaningful revenue for the Company,  or that the Company will be able
           to successfully capture any such vertical market opportunities.

           Ultimately,  the Company's  ability to continue as a going concern is
           dependent  upon its ability to establish  and grow a revenue  stream,
           attain a  reasonable  threshold of  operating  efficiencies,  achieve
           profitable  operations  and  attract  new  sources  of  capital.  The
           consolidated financial statements do not include any adjustments that
           might result from the outcome of these uncertainties.

           c)       Property and Equipment

           Property and Equipment are stated at cost.  Depreciation  is provided
           on a  straight-line  basis  over  the  estimated  useful  life of the
           respective  asset.  Maintenance and repairs are charged to expense as
           incurred; major renewals and betterments are capitalized.  When items
           of property  or  equipment  are sold or retired the related  cost and
           accumulated  depreciation  are removed from the accounts and any gain
           or loss is included in the results of operations.

           d)       Impairment of Long-Lived Assets

           The Company  periodically reviews its long-lived assets for potential
           impairment as required by Statement of Financial Accounting Standards
           No. 144,  "Accounting for the Impairment of Long-Lived Assets and for
           Long-Lived  Assets to be  Disposed  of",  which  supercedes  previous
           guidance.  As discussed in Note 2, the Company  discontinued  several
           operations  during the year ended December 31, 2002.  Refer to Note 4

                                       7
<PAGE>

           for  discussion  of  impairment  of certain  intangible  assets as of
           September 30, 2003.

           e)       Revenue Recognition

           The  Company  recognizes  revenue  from  its new  medical  technology
           business in  accordance  with SEC Staff  Accounting  Bulletin No. 101
           "Revenue  Recognition in Financial  Statements."  For hardware sales,
           revenue would be recognized  upon shipment to customers.  To date, no
           such sales have been made.

           Revenue from the licensing of software  products is recognized when a
           contract is executed (when applicable), all delivery obligations have
           been met, the fee is fixed or  determinable,  and  collectability  is
           probable.   When  licenses  are  sold  together  with  services,   in
           accordance with the provisions of the American Institute of Certified
           Public  Accountants'  Statement of Position 97-2,  "Software  Revenue
           Recognition" ("SOP 97-2"), license fees are recognized upon delivery,
           provided  that (1) the above  criteria  have been met, (2) payment of
           the  license  fees  is not  dependent  upon  the  performance  of the
           services,  (3) the services do not include significant  modifications
           to the  features  and  functionality  of the  software,  and  (4) the
           services are not essential to the  functionality of the software.  If
           revenue is received from software maintenance agreements,  it will be
           recognized  ratably  over the term of the  agreement,  as will annual
           software  maintenance  charges and upgrade fees be recognized ratably
           over the period  covered.  To date, no such  maintenance  revenue has
           been received by the Company.

           f)       Earnings (Loss) Per Share

           The Company reports basic and diluted  earnings per share ("EPS") for
           common  and  common  share  equivalents.  Basic  EPS is  computed  by
           dividing   reported   earnings  by  the   weighted   average   shares
           outstanding. Diluted EPS is computed by dividing reported earnings by
           the weighted average shares outstanding  adjusted for all potentially
           dilutive  shares,  which include shares issuable upon the exercise of
           outstanding stock options,  warrants and convertible  preferred stock
           using the "if-converted"  method. For the three and nine months ended
           September  30,  2003 and 2002,  the  denominator  in the  diluted EPS
           computation was the same as the denominator for basic EPS computation
           due to the  antidilutive  effect of the warrants and stock options on
           the Company's net loss.


                                       8
<PAGE>



           For the three and nine months ended  September 30, 2003 and September
           30, 2002, the computation of basic and diluted EPS was as follows:

<TABLE>
<CAPTION>
                                                Three Months                       Nine Months
                                             Ended September 30,                Ended September 30,
                                           2003              2002               2003              2002
                                       ------------      ------------      ------------      ------------
Basic and Diluted EPS:
----------------------
<S>                                    <C>               <C>               <C>               <C>
Numerator - Net (Loss) from
   Continuing Operations               $ (2,821,374)     $   (739,917)     $ (5,299,049)     $   (166,626)
Denominator - Weighted Average
  Shares Outstanding                     33,769,193         9,999,062        28,628,360         7,437,069
                                       ------------      ------------      ------------      ------------
       (Loss) Income per Share         $      (0.08)     $      (0.07)     $      (0.19)     $      (0.02)
                                       ------------      ------------      ------------      ------------

Numerator - Net (Loss) Income from
  Discontinued Operations              $         --      $   (372,833)     $         --      $   (600,986)
Denominator - Weighted Average
  Shares Outstanding                             --         9,999,062                --         7,437,069
                                       ------------      ------------      ------------      ------------
       (Loss) Income per Share         $         --      $      (0.04)     $         --      $      (0.08)
                                       ------------      ------------      ------------      ------------

Numerator - Net (Loss) Income          $ (2,821,374)     $ (1,112,750)     $ (5,299,049)     $   (767,612)
Denominator - Weighted Average
  Shares Outstanding                     33,769,193         9,999,062        28,628,360         7,437,069
                                       ------------      ------------      ------------      ------------
       (Loss) Income per Share         $      (0.08)     $      (0.11)     $      (0.12)     $      (0.10)
                                       ------------      ------------      ------------      ------------
</TABLE>


           g)     Use of Estimates

           The preparation of financial statements in conformity with accounting
           principles  generally  accepted  in  the  United  States  of  America
           requires management to make estimates and assumptions that affect the
           reported  amounts  of  assets  and  liabilities,  the  disclosure  of
           contingent  assets  and  liabilities  at the  date  of the  financial
           statements,  and revenues and expenses  during the periods  reported.
           Actual results could differ from those estimates.  Estimates are used
           when accounting for stock-based transactions,  uncollectable accounts
           receivable,  asset  impairment,  depreciation and  amortization,  and
           taxes, among others.

           h)     Stock Options and Warrants Issued for Services

          As permitted under the Statement of Financial Accounting Standards No.
          123 ("SFAS No. 123"),  "Accounting for Stock-Based  Compensation," the
          Company  accounts  for its  stock-based  compensation  to employees in
          accordance with the provisions of Accounting  Principles Board ("APB")
          Opinion  No.  25,  "Accounting  for Stock  Issued to  Employees,"  and
          related  interpretations.  The  Company  provides  the pro  forma  net
          earnings,  pro forma earnings per share, and stock-based  compensation
          plan disclosure requirements set forth in SFAS No. 123.

                                       10
<PAGE>




           Had compensation  cost for options issued under the 1994 Stock Option
           Plan, as described more fully in Note 6, been  determined  based upon
           fair value at the grant date for options granted, consistent with the
           provision of SFAS 123, the Company's net (loss) income and net (loss)
           income  per share  would have been  reduced to the pro forma  amounts
           indicated below:
<TABLE>
<CAPTION>

                                                            Three Months                        Nine Months
                                                         Ended September 30,                Ended September 30,
                                                        2003              2002             2003            2002
                                                  --------------     -------------    ------------     ------------
<S>                                               <C>                <C>              <C>              <C>
Net (Loss) - as reported                          $   (2,821,374)    $  (1,112,750)   $ (5,299,049)    $   (767,612)
Deduct: stock based employee
  compensation expenses determined
  under fair value based method                                 -                 -               -                -
                                                  --------------     -------------    ------------     ------------
Net (Loss) - pro forma                            $   (2,821,374)    $  (1,112,750)   $ (5,299,049)    $   (767,612)
                                                  ==============     =============    ============     ============

Net (Loss) per share - as reported
Basic                                             $        (0.08)    $       (0.11)   $      (0.19)    $      (0.10)
                                                  ==============     =============    ============     ============
Diluted                                           $        (0.08)    $       (0.11)   $      (0.19)    $      (0.10)
                                                  ==============     =============    ============     ============

Net (Loss) per share - pro forma
Basic                                             $        (0.08)    $       (0.11)   $      (0.19)    $      (0.10)
                                                  ==============     =============    ============     ============
Diluted                                           $        (0.08)    $       (0.11)   $      (0.19)    $      (0.10)
                                                  ==============     =============    ============     ============
</TABLE>


           For stock issued to consultants and other non-employees for services,
           the Company records the expense based on the fair market value of the
           securities  as of the date of stock  issuance or  agreement  for such
           services.

           i)     Reclassifications

          Certain  amounts  in  the  accompanying  2002  consolidated  financial
          statements  have been  reclassified  to conform to 2003  presentation,
          primarily those items having to do with discontinued operations.  (See
          Note 2)

NOTE 2.    DISCONTINUED OPERATIONS

Effective  October 1, 2002, the Company sold its oil and gas operations,  namely
the stock of NuWay  Resources  Ltd.,  to Summit Oil and Gas,  Inc.  The purchase
price for the stock  was  $100,000  less all  outstanding  liabilities  of NuWay
Resources,  Ltd. As the offsetting  liabilities exceeded the purchase price, the
Company  received no funds.  The Company  recorded a loss from these  operations
through September 30, 2002 of $68,650 and a loss of $1,290,948 on disposal.

Effective October 1, 2002, the Company sold the stock of its wholly owned casino
rental  subsidiaries  (Latin American  Casinos del Peru S.A., and Latin American
Casinos of Colombia, LTDA) to Casino Venture Partners, a Nevada partnership. The
purchase  price for the stock was $300,000 less all  outstanding  liabilities of
the two subsidiaries. As the offsetting liabilities exceeded the purchase price,
the Company received no funds. The Company recorded a loss from these operations
through September 30, 2002 of $147,247 and a loss of $1,376,733 on disposal.

The Company  discontinued  the operations of World's Best Rated Cigar Company on
October  1,  2002 by  donating  any  remaining  inventory  and  terminating  all
outstanding  warehouse lease agreements  without penalty. A loss of $385,089 was
incurred  from  these  operations  until  the  point of  disposal  and a loss of
$179,750 was recorded upon disposal of the net assets.

                                       11
<PAGE>

The  results of  operations  of the  Company's  oil and gas,  casino,  and cigar
distribution operations have been shown as discontinued operations as follows:

<TABLE>
<CAPTION>
                                                     Three Months Ended        Nine Months Ended
                                                     September 30, 2002       September 30, 2002
                                                   ---------------------    ---------------------
<S>                                                       <C>                      <C>
Revenues                                                  $     185,605            $     629,415
Operating Expenses                                              558,438                1,230,401
                                                   ---------------------    ---------------------
Loss from Discontinued Operations                        $    (372,833)           $    (600,986)
                                                   =====================    =====================


NOTE 3.  PROPERTY AND EQUIPMENT

Property and Equipment are summarized as follows:

                                                       September 30, 2003     December 31, 2002
                                                     ---------------------    --------------------
Furniture, Fixtures & Office Equipment                      $      42,753            $     42,753
Less:  Accumulated Depreciation                                    20,323                  13,909
                                                     ---------------------    --------------------
Property and Equipment, net                                 $      22,430            $     28,844
                                                     =====================    ====================
</TABLE>


Furniture,  fixtures and office  equipment  are carried at cost and  depreciated
using the  straight-line  method over the estimated  useful lives of the assets,
which is estimated to be five years.

NOTE 4.           INTANGIBLE ASSETS

The Company  had the  following  Intangible  Assets at  September  30,  2003:  a
marketing  database  purchased from Genesis  Health Tech,  Inc. on September 28,
2002 and certain software technology licensed from Med Wireless,  Inc. on August
21, 2002. The database is a comprehensive listing of healthcare providers in the
U.S. and represents  what the Company  believes to be a valuable tool for phone,
mail and direct  marketing  activities  related  to the  Company's  new  medical
technology  products.  The technology  licensed from Med Wireless relates to the
movement of medical images and data over the Internet and via handheld  wireless
devices and is  critical  to the  Company's  PRLS  product as well as  potential
future products.  No amortization  was recorded for these  intangible  assets in
2002 as the Company did not begin to utilize the database nor generate  sales of
products  derived from this technology  until 2003. In January 2003, the Company
began to amortize both assets on a straight-line  basis over estimated five year
useful lives and a total of $217,250 and  $651,750 in  amortization  expense was
recorded for the three and nine month periods, respectively.

In Note 5 to the  Company's  audited  financial  statements  for the year  ended
December 31, 2002 appearing in the Company's Form 10-KSB filed May 23, 2003, the
Company disclosed the fact that the value of the database was discounted and the
discount  in the Med  Wireless  license was  increased  after  discussions  with
"valuation experts" and the Company's  accountants.  To clarify this disclosure,
it is noted that the  discussions  with the valuation  experts were conducted by
the Company's  accountants in the course of their audit, and not by the Company,
and that these experts did not evaluate or otherwise  pass upon the value of the
Company's  assets (nor has the Company at any time had such an evaluation from a
third party expert).

                                       12
<PAGE>

         The Company is required to assess the  impairment of goodwill and other
intangible  assets  annually,  or  whenever  events or changes in  circumstances
indicate  that the  carrying  value may not be  recoverable.  Factors that could
trigger an impairment review include  significant  underperformance  relative to
projected future operating results, significant changes in the manner of our use
of the  acquired  assets or the  strategy for the  Company's  overall  business,
significant  negative  industry or economic  trends,  and a market  value of the
Company's  common stock lower than the  Company's  assets'  book value.  The net
carrying  value of  goodwill  and other  intangible  assets not  recoverable  is
reduced to fair value.  The Company's  common stock traded at a high of $0.34 on
June 6, 2003,  four days before the stock was de-listed from the Nasdaq SmallCap
exchange on June 10, 2003. The stock value  decreased to $0.10 just after it was
delisted,  and  stayed at  approximately  $0.10  through  the end of the  second
quarter  2003.  It  traded  at a high of $0.09  on the  last  day of the  second
quarter. During the third quarter, the stock continued to decrease in price, and
traded as low as $0.38 per share.  On the last day of third  quarter  2003,  the
stock closed at $0.06. Because the Company's common stock had continually traded
lower during the third quarter  2003,  lowing the market  capitalization  of the
Company to a low of  $1,609,266  during that  period (on  September  11,  2003),
Management  determined  that it was  appropriate  during  the third  quarter  to
conduct an impairment  analysis of the intangible assets on its books that were,
in the aggregate, valued at over twice the market value of Company.

         Management  conducted  an  impairment  analysis  of the two  intangible
assets on its books: the marketing database and Med Wireless license.  These two
assets were listed on the Company's  financial  statements for the period ending
June 30, 2003 at values of $229,500 and $3,681,000,  respectively.  Depreciation
for the period  ending  September  30, 2003,  would have  decreased the value of
those assets to $216,750 and $3,476,500 respectively.

         With respect to the marketing database,  although Management intends to
use the database to market  products  offered by its recently  acquired  Premium
Medical Group, Inc. subsidiary, it has no way of predicting what success it will
have in that  marketing  effort,  and has not at this  time  used the  marketing
database to market any product or generate any revenue for the Company,  and has
thus  determined  to record a 100%  impairment  of that  asset in the  amount of
$216,750.

         With respect to the Med Wireless license, Management analyzed the sales
prospects of its PRLS system (which is based upon the  technology  licensed from
Med Wireless) to the various  professional and collegiate sports  organizations,
the limited  successes the Company's NuWay Sports subsidiary has had thus far in
its sales efforts,  and the projected  revenue from projected  future sales, and
has  determined to record an impairment  charge to the recorded value of the Med
Wireless license of $1,649,594. This amount was calculated projecting sales over
a three year period (calendar years 2004, 2005 and 2006), factoring in the costs
of sales and the  product  costs,  discounting  projected  net  revenue to their
present  value  using a 7.5%  interest  factor,  and  further  discounts  of the
Company's projections for uncertainties  relative to the timing of acceptance of
this technology.

         Management  does not believe that a further  impairment of these assets
will be necessary as of the period ending December 31, 2003.



NOTE 5.           STOCK, STOCK OPTIONS AND WARRANTS

During the nine months ended September 30, 2003, the Company issued an aggregate
of 18,623,759 shares of its common stock. Of these shares, 2,633,590 were issued
in consideration for $645,648 of obligations  previously accrued at December 31,
2002,  and  15,990,169  shares were issued as  consideration  for  $1,530,000 of
services  provided to the Company  during the nine month period ended  September
30, 2003. Of this amount approximately $1,020,600 represents consulting expense,
$394,000  represents  legal  expenses,  and the balance of  $115,000  represents
compensation, advisory board fees, and board of directors' expenses.


                                       13
<PAGE>

In March 2003,  Dennis  Calvert,  the Company's CEO and  president,  was granted
3,000,000  shares of common stock under the  Company's  2003 Stock  Compensation
Plan as a bonus for services  rendered by Mr. Calvert to the Company.  Following
this issuance, however, Mr. Calvert returned the shares to the Company pending a
shareholder  vote to approve or  disapprove  the issuance.  Mr.  Calvert and the
Company have since agreed not to seek shareholder  approval for the issuance and
to rescind  the  issuance in its  entirety.  Mr.  Calvert  and the  compensation
committee of the Board of  Directors  plan to  negotiate  an  alternative  bonus
arrangement  with Mr.  Calvert  (which  could be in the form of cash,  shares of
stock,  or a combination  thereof).  The amount and timing of such bonus has not
yet been determined.

The Company had the following  outstanding  convertible  securities at September
30, 2003:  (a) stock options issued under the 1994 Stock Option Plan to purchase
up to 65,000  shares of the  Company's  common stock (see Note 6); (b) five-year
warrants to acquire up to 300,000 shares of common stock at an exercise price of
$1.75 per share;  (c) a warrant to purchase up to 100,000 shares of common stock
at an exercise price of $0.30 per share  exercisable  through February 23, 2004,
issued  in 2002 to a  former  executive  of the  Company;  and (d)  warrants  to
purchase up to 559,322  shares of common stock at an exercise  price of $.20 per
share,  exercisable for a period of three years,  issued in conjunction with the
Company's sale of 559,322 shares of Convertible Preferred Stock during the first
quarter of 2003, and which are not  convertible  until nine months from the date
of issuance (Note 9).

At September  30,  2003,  the Company also had  outstanding  1,725,000  publicly
traded  warrants  (NMEDW) to purchase the Company's  common stock at an exercise
price of $3.00 per share. These warrants expired December 11, 2003.

See Note 7 for discussion of warrants  issued in  conjunction  with debt entered
into in September 2003.


NOTE 6.    INCENTIVE STOCK OPTION PLAN

On June 13, 1994,  the Company  adopted the 1994 Stock Option Plan providing for
the  issuance  of options to purchase up to  1,000,000  shares of the  Company's
common stock.  The term of each option may not exceed ten years from the date of
grant (five years for options  granted to employees  owning more than 10 percent
of the  outstanding  shares of the voting stock of the  Company).  The 1994 Plan
will terminate in June 2004, unless terminated earlier by action of the board of
directors.  In June 1999, the Company  increased the shares  allocated under the
plan to 1,500,000.

At September 30, 2003 and December 31, 2002, the Company had options outstanding
and exercisable as follows:

                                       14

<PAGE>

<TABLE>
<CAPTION>
                                                             Number of
                                                               Shares        Price Per Share
                                                            -------------    -----------------
<S>                                                           <C>           <C>     <C>
Options Outstanding at December 31, 2002                          65,000        $1.00 - $1.75
Options Issued                                                   -
Options Expired                                                  -
Options Exercised                                                -
                                                            -------------    -----------------
Options Outstanding at September 30, 2003                         65,000        $1.00 - $1.75
                                                            =============
</TABLE>

All outstanding stock options were fully exercisable at September 30, 2003.

NOTE 7.    NOTES PAYABLE

In conjunction with the acquisition of the technology license from Med Wireless,
Inc. on August 21, 2002, the Company  assumed a $1,120,000 note with interest at
10% per annum  payable by Med  Wireless  to Summitt  Ventures,  Inc.,  a company
controlled by Mark Anderson. The note is secured by the Company's assets and was
originally  due on June 15, 2003. On March 26, 2003,  Summitt  Ventures sold the
note,  together  with  4,182,107  shares of the Company's  common stock,  to New
Millennium Capital Partners LLC ("New Millennium"),  a limited liability company
controlled and owned in part by the Company's CEO and president, Dennis Calvert,
in exchange for a $900,000  promissory note issued by New Millennium in favor of
Summitt Ventures.  This note is secured by all of the stock of the Company owned
by New Millennium  and Mr.  Calvert.  On March 26, 2003, the Company's  board of
directors  voted to convert  the  $1,120,000  note held by New  Millennium  into
22,400,000  shares of  restricted  common  stock of the Company (at a conversion
price discounted 37.5% to the then market price of $0.08). New Millennium agreed
to this conversion. Subsequent to the vote by the board to convert the note, the
Company received  notification from Nasdaq's Listing  Qualifications  Department
that converting the note without  shareholder  approval  violated certain Nasdaq
Marketplace  Rules.  In  response  to this  notification,  the  board,  with the
concurrence  of New  Millennium,  voted to amend  its  resolution  and  withhold
issuance  of the  shares  to New  Millennium  until the  Company's  shareholders
approved the  conversion.  This  shareholder  vote has not taken place as of the
filing of this report, and the shares have not been issued to New Millennium.

The business  purpose of the  original  decision to convert the note into equity
was to  retire  $1,120,000  in  debt  owed  by the  Company  thereby  increasing
shareholder  equity by that  amount  and  avoiding a default on the note and the
insolvency and possible  liquidation of the Company. In arriving at a conversion
price,  the board of directors  determined that a 37.5% discount to market price
was  appropriate  based  on a number  of  factors,  including  that (i) with the
quantity of the shares  that would be issued,  a block of shares that size could
not be liquidated without affecting the market price of the shares, and (ii) the
shares  would be  "restricted  shares"  and could  therefore  not be sold by New
Millennium  (an  affiliate  of the Company) in the public  markets  prior to two
years from the date of the  conversion,  and thereafter  would be subject to the
volume and manner of sale  limitations  of Rule 144 under the  Securities Act of
1933.

To allow  time for a  shareholder  vote  with  respect  to the  conversion,  New
Millennium agreed to extend the terms of the note, from June 15, 2003 to October
1, 2003.

At the  Company's  June 6, 2003 board  meeting,  Mr.  Calvert,  on behalf of New
Millennium, and the Company, through the unanimous action of the Board (with Mr.
Calvert abstaining),  agreed that, in light of current market conditions (namely
the  significant  increase in the trading  price of the  Company's  common stock
since March 26, 2003, the date on which the conversion of the note to equity was
originally  approved by the Board,  from $0.08 to $0.28 as of June 6, 2003),  it
would be  inequitable  for New  Millennium to convert the note at the originally

                                       15
<PAGE>

agreed to $0.05 per share price. In this regard,  Mr. Calvert,  on behalf of New
Millennium,  and the Company  orally  agreed to rescind the agreement to convert
the note. In addition,  New Millennium  orally agreed with the Company to extend
the  maturity  date of the note to a first  payment  due  October 1, 2003 in the
amount of $100,000 and the balance of the principal  due on April 1, 2004,  with
interest due according to the original  terms of the note (to  correspond to the
payment  terms of the note  made by New  Millennium  in favor of  Summitt),  and
furthermore  to reduce the  Company's  obligation on the note to the extent that
New  Millennium  is able to  reduce  its  obligation  on its note  with  Summitt
Ventures.  While the prior holder of the note,  Summitt  Ventures,  purported to
condition New  Millennium's  purchase on the conversion of the note, Mr. Calvert
has represented to the Company that due to Mr. Anderson's actions (as previously
described  by the  Company in its Form  10-QSB for the  quarter  ended March 31,
2003),  Mr.  Calvert now  believes  that  conversion  of the note is no longer a
required term of the agreement between New Millennium and Summit.

The  Company  was unable to pay the note at the due date of October 1, 2003.  At
the board meeting on October 15, 2003, the board  determined to put the issue of
conversion of the note to the Company's shareholders at a special meeting of the
shareholders  scheduled  for December 9, 2003. On November 7, 2003, a Definitive
14a was filed by the Company  with  respect to that  meeting.  The  shareholders
meeting was held on December 9, 2003, but adjourned without a vote due to a lack
of quorum.  The meeting was  rescheduled  for December 30, 2003. At the December
30, 2003 shareholder  meeting,  the board was again advised that there was not a
quorum,  and therefore  the vote could not be held.  Because this was the second
attempt  to obtain a quorum,  and more than  4,000,000  additional  shares  were
required to be voted to obtain a quorum,  the board voted to adjourn the meeting
indefinately.  As of January 1, 2004,  the loan is in default status and has not
been repaid.

On February  10,  2004,  the board  voted and  resolved to convert the note into
shares of the Company as  required in its  acquisition  agreement  with  Premium
Medical  Group,  Inc., a privately  held  Florida  corporation.  New  Millennium
Capital  Partners,  LLC agreed to convert  its  secured  promissory  note in the
principal  amount of  $1,120,000  (together  with $114,800 in accrued but unpaid
interest  thereon)  into  30,869,992  shares of the Company's  Common Stock.  We
expect the conversion to occur within the next 60 days.

On  June  10,  2003  the  Company  entered  into a Term  Loan  Agreement  ("Loan
Agreement")  with Augustine II, LLC  ("Augustine"),  pursuant to which Augustine
agreed to loan the  Company  $420,000,  payable  in  installments  of  $250,000,
$100,000,   and  $70,000  (the  "Loan").  The  Company  received  all  scheduled
installments,  and principal and interest (at an annual rate of 10%) were due in
full on February 29, 2004.  The Company has spoken with  representatives  of the
Augustine  II, LLC,  and have advised them that the Company is unable to pay the
amount  due  under  the  note by  February  29,  2004.  The  Augustine  II,  LLC
representatives indicated a desire to restructure the terms of the note to allow
a longer time frame for the Company to repay the obligation.  Those negotiations
are yet to be finalized.  The Company recorded $11,717 of interest expense as of
September 30, 2003. The Loan Agreement is subject to certain  requirements  that
the Company  make  mandatory  prepayments  of the Loan from the  proceeds of any
asset sales  outside of the  ordinary  course of  business,  and, on a quarterly
basis, from positive cash flow. In addition,  all or any portion of the Loan may
be prepaid by the Company at any time without  premium or penalty.  The proceeds
of the Loan were used by the Company for working capital.

As additional  consideration for making the Loan,  Augustine  received five year
warrants to purchase up to 6,158,381  shares of the Company's common stock at an
exercise price of $0.16 per share.  The Company can require that the warrants be
exercised  if the  Company's  shares  trade at or above $0.60 per share for each
trading day within the 30 calendar  days prior to the maturity date of the Loan,
trading  volume of the shares  equals or exceeds  100,000  shares per day during
such  period,  and the  shares of the  Company's  common  stock  underlying  the

                                       16
<PAGE>

warrants have been included on a registration  statement filed with and declared
effective by the SEC prior to the maturity  date.  If these  conditions  are not
fully  satisfied by the maturity date, then Augustine may, at any time following
the  maturity  date and so long as the  warrants  remain  exercisable,  elect to
exercise all or any portion of the warrants pursuant to the "cashless  exercise"
provisions of the warrants.  Using the Black-Scholes  pricing model, the Company
allocated  approximately  $245,000  of the Loan  proceeds  to the  warrants  and
$175,000 to the note payable,  which  allocations  were made on a pro rata basis
based on the fair value of the warrants. The Black Scholes calculation assumed a
discount rate of  approximately  four percent,  volatility of 257 percent and no
dividends.  Given  that the  warrants  were  issued  in  conjunction  with  Loan
Agreement, such fair value represents an effective discount on the debt and will
be amortized  over the term of the loan.  Amortization  of this discount for the
quarter ended  September 30, 2003 was  approximately  $93,000 and is recorded as
effective  interest  expense  in  the  accompanying  consolidated  statement  of
operations.

As security for the Loan, New Millennium (an affiliate of Mr.  Calvert)  pledged
2.5 million shares of the Company's  common stock owned by New  Millennium,  and
the Company has granted Augustine a security interest in its ownership  interest
in the Company's subsidiary, NuWay Sports, LLC.

NOTE 8.    CONVERTIBLE DEBENTURES

In December 2000, the Company,  through a private  placement,  issued $3,500,000
principal amount of 6 percent Convertible Debentures to several investors. These
debentures  were  originally  due June  13,  2001 and  their  maturity  date was
subsequently  extended to December 13, 2001.  They are  convertible  into common
stock at a price of $1.75 per share.  The interest on the  debentures is payable
either in cash or shares of common  stock,  at the  discretion  of the  Company.
During 2001,  $1,100,000 of the debentures plus accrued  interest were converted
into 666,283 shares of the Company's  common stock.  During 2002,  $2,250,000 of
the remaining  debentures  plus accrued  interest were  converted into 1,332,570
shares of common stock. In December 2002 the Company  received a notice from the
remaining two debenture holders (the "Remaining  Debenture Holders")  requesting
conversion  of the  remaining  outstanding  $150,000 of  debentures.  The notice
provided that, as a condition to conversion,  the certificates  representing the
shares issuable upon conversion of the debentures  would need to be delivered to
the  Remaining  Debenture  Holders  prior  to the end of 2002.  Pursuant  to the
request,  and to complete the  conversion,  the Company  issued to the Remaining
Debenture  Holders  96,006  shares of common  stock and  promptly  notified  the
Remaining  Debenture  Holders'  counsel and the Company's  transfer agent of the
approval and  ratification  of the issuance.  However,  the actual  certificates
representing  the shares were not delivered to the Remaining  Debenture  Holders
until the first quarter of 2003.  The Remaining  Debenture  Holders then refused
acceptance  of  the  shares,  claiming  that  because  the  actual  certificates
representing  the  shares  were  not  delivered  in  2002  as  specified  in the
conversion notice, the conversion was invalid and the debentures would therefore
remaining  outstanding and continue to accrue interest until repaid in full. The
Remaining  Debenture  Holders have since demanded full payment on their $150,000
of debentures  (plus accrued  interest).  In June 2003, the Remaining  Debenture
Holders  filed suit in the Orange  County  Superior  Court  against  the Company
claiming it breached  the  debenture  agreement by failing to honor the terms of
the notice of conversion.  Although the Company's  financial  statements reflect
the $150,000 of debentures as still being outstanding,  the Company disputes the
Remaining  Debenture  Holders'  claims that the  conversions  were invalid.  The
Company and the Remaining  Debenture  Holders have, since the lawsuit was filed,

                                       17
<PAGE>

entered into a settlement  agreement in which the  remaining  Debenture  holders
would convert the debentures into common stock equal to  approximately  $70,000.
The settlement  agreement calls for conversion into stock over a period of three
months.  The  Company  has  partially   satisfied  the  obligations  under  this
agreement,  and expects to fully  satisfy its  obligations  in the first quarter
2004.

NOTE 9.          CONVERTIBLE PREFERRED STOCK

During the nine month period ended  September 30, 2003, the Company entered into
two Convertible  Preferred  Stock and Warrant  Purchase  Agreements  whereby the
Company  sold an  aggregate  of  559,322  shares  of a newly  created  series of
Preferred Stock, Series A Convertible  Preferred Stock, par value $.00067, for a
total  consideration of $279,661.  Each share of the Series A Preferred Stock is
convertible  into one share of the  Company's  common stock.  In addition,  each
share of preferred  sold  entitles the  purchaser to one warrant to purchase one
share of common  stock at a price of $0.20 per  share.  Using the  Black-Scholes
pricing  model,  the Company  estimated  the fair value of these  warrants to be
approximately  $35,000,  and such amount has been netted in  additional  paid in
capital on the September 30, 2003 consolidated  balance sheet. The Black Scholes
calculation assumed a discount rate of approximately five percent, volatility of
180 percent and no dividends.  The Series A Preferred  Stock may be converted by
the holder at any time after six months from the  purchase  date and the warrant
is exercisable for a period of three years from the purchase date.

NOTE 10. COMMITMENTS AND CONTINGENCIES

Litigation

During 2002, Ms. Geraldine Lyons, the Company's former Chief Financial  Officer,
sued the Company for breach of her employment contract. The lawsuit is venued in
the Circuit Court of the 11th Judicial Circuit in Miami-Dade County in the State
of Florida  and was  initiated  by the filing of a complaint  in June 2002.  The
principal  parties in the case are Ms.  Lyons,  the Company,  and the  Company's
former  president  Todd  Sanders.  Ms. Lyons  alleges that $25,000 is due to her
under her  employment  contract;  that the  contract  requires  the  Company  to
guarantee that she can sell for $300,000 the 100,000 shares of stock the Company
is required to issue her;  and, that Mr.  Sanders  promised to purchase from her
for  $4.00 per  share  100,000  shares of stock  held by her.  The  Company  has
counter-sued Ms. Lyons for breach of fiduciary duty, fraud, violation of section
12(a)(2) of the 1933 Securities Act of 1933, violation of section 517.301 of the
Florida Statutes, negligent misrepresentation, conversion, and unjust enrichment
resulting  from the  restatement of the Company's  financial  statements for the
years ended  December 31, 2000 and  December 31, 1999 that the Company  believes
was  required as a result of her  activities.  The  restatements  corrected  the
previous omission of certain material expenses related primarily to compensation
expense  arising from warrants  issued and repriced  stock  options,  as well as
other  errors.  The  case is  ongoing  at this  time.  The  Company  intends  to
vigorously  defend its actions and pursue its affirmative  claims to the fullest
extent possible.  Management does not expect that this case will have a material
adverse effect on the Company's financial position.

See  Note 8 for a  discussion  of a  claim  relating  to the  conversion  of the
Company's 6% Convertible Debentures.

Employment Agreements

In December 2002, the Company entered into a five-year employment agreement with
the Company's current President,  Dennis Calvert. His agreement calls for a base
monthly  salary  of  $14,000  plus  performance  bonuses  and  employee  related
benefits. Mr. Calvert serves as President,  Chief Executive Officer, Interim CFO
and Chairman of the Board.


                                       18
<PAGE>

In March 2003, the Company  entered into a five-year  employment  agreement with
Joseph  Provenzano who serves the Company as Secretary,  Board Member and Senior
Executive  reporting to Mr. Calvert.  His agreement calls for him to receive not
less than $10,900 per month in salary plus incentive  bonuses,  stock  ownership
participation and employee related benefits.  At the Company's  discretion,  the
Company may choose to pay up to $4,900 of this monthly salary with stock in lieu
of cash.

Lease Commitment

The Company is obligated  on a  month-to-month  office  lease at its  California
facility. This lease required monthly rentals of $7,850 through May 2003 and was
increased to $8,750 at June 2003.  All other leases are of short duration or are
on a  month-to-month  arrangement.  Rent  expense  for  the  nine  months  ended
September  30,  2003 and the year  ended  December  31,  2002 was  approximately
$74,500 and $96,500, respectively.

Stock-based Commitments

The Company  currently  utilizes the services of a number of consultants who are
compensated  with shares of common stock.  While each agreement can generally be
terminated  with  a 15  day  notice,  the  Company  may be  obligated  to  issue
additional shares to the consultants.

NOTE 11. SUBSEQUENT EVENTS

On October 29, 2003, the Company issued an unvested  warrant to an individual to
purchase  2,000,000 shares of common stock at $0.05 a share. The warrant expires
on October 29, 2004. The Warrant is not exercisable  unless and until the Holder
introduces to the Company an investor or investors  which  investor or investors
invest net proceeds in the Company of at least  $250,000  within 3 months of the
introduction.  The  closing  of any  such  investment  shall  be in the sole and
absolute  discretion  of the  Company.  In the  event  investments  of at  least
$250,000 are not so made by May 1, 2004, or are made by or through parties other
than the Holder,  the Warrant  shall expire in its entirety and be of no further
force or effect.


On November 20, 2003, the Company received proceeds of $50,000 in exchange for a
promissory  note in which it agreed to pay $65,000 to the  investor 90 days from
the date of the loan. The Company's CEO and president Dennis Calvert  personally
guaranteed  the note.  As of March 1, 2004 the Company has paid back  $23,000 to
the investor, and has made arrangements with the investor to extend the terms of
the note to allow payment of the remainder due by March 20, 2004.

On January 30, 2004,  the Company  entered into a tax free  reorganization  with
Premium Medical Group,  Inc., a Florida  corporation  ("Premium")  pursuant to a
Stock  Purchase  Agreement  (the  "Agreement")  that  called for the  Company to
acquire  100% of the  shares of Premium  from  Eduardo A. Ruiz and Luis A. Ruiz,
Premium's sole shareholders,  in exchange for 30,000,000 shares of the Company's
common stock,  subject to  adjustment  as more fully  described in the Agreement
(the  "Transaction").  Based on the closing bid price for the  Company's  common
stock on January 31,  2004,  the shares  issued to the Premium  shareholders  in
connection with the Transaction  have been valued at  approximately  $1,500,000.
The  Agreement  was attached as Exhibit 2.1 to the Form 8-K filed by the Company
on February 17, 2004, and the description of the Transaction contained herein is
qualified in its entirety by reference to the Agreement.


                                       19
<PAGE>

The  consideration  for the  Transaction  was  determined  through  arms'-length
negotiation  between the Company  and Premium and its  shareholders,  giving due
consideration  to the  market  value  of the  Company's  common  stock  and  the
estimated value of Premium.  The 30,000,000 shares issued in the Transaction are
being  held in escrow and are  subject to  downward  adjustment  pursuant  to an
agreed upon formula,  as more fully described in the Agreement.  Eduardo A. Ruiz
and Luis A. Ruiz retain the full voting  rights of these  shares  while they are
held in escrow. In addition,  the consideration for the Transaction  includes an
earn out bonus pursuant to which the Premium  shareholders  shall be entitled to
receive additional consideration equal to the following percentages of Premium's
net  income  (calculated  in  accordance  with  generally  accepted   accounting
principles)  during  calendar year 2004: (i) 20% of net income for net income of
up to  $1,000,000;  (ii) 15% of net income for net  income of  $1,000,000  up to
$2,000,000;  (iii)  10% of net  income  for net  income  over  $2,000,000.  This
additional  consideration  shall be paid in the form of warrants to purchase the
Company's common stock.

Immediately following the Transaction, the Company's capitalization consisted of
66,386,486  shares  of  common  stock   outstanding,   of  which  the  Company's
shareholders  prior to the Transaction  held 36,386,486  shares,  and the former
Premium  shareholders  held 30,000,000  shares.  The 30,000,000 shares represent
approximately  45% of the  post-Transaction  outstanding  common  shares  of the
Company.

As a condition to Premium  entering into the Agreement,  New Millennium  Capital
Partners,  LLC (a company  controlled by Dennis  Calvert,  the Company's CEO and
President),  agreed to convert  its  secured  promissory  note in the  principal
amount of  $1,120,000  (together  with  $114,800 in accrued but unpaid  interest
thereon) into 30,869,992  shares of the Company's  Common Stock.  Following this
conversion,  the Company's  capitalization  will consist of 97,256,478 shares of
common  stock  outstanding,  and Mr.  Calvert  will be the  beneficial  owner of
approximately  35,651,992  shares of common  stock or  approximately  37% of our
outstanding  stock,  which includes the 4,782,000  shares he currently  owns. We
expect the conversion to occur within the next 60 days.

Additionally,  pursuant to the Agreement, the Company agreed to appoint Mr. Luis
A. Ruiz to the  Company's  Board of  Directors,  subject  to Mr.  Ruiz's  formal
acceptance  of the  position and a standard  application  and  background  check
process that the Company  expects to be completed  within the next 30 days. Once
Mr. Ruiz has been appointed to the board, our Board of Directors will consist of
Mr. Dennis Calvert, Mr. Gary Cox, Mr. Steven Harrison, Mr. Joseph Provenzano and
Mr. Luis A. Ruiz. There are no other material  relationships  between Premium or
the shareholders thereof, and the Company or any of its affiliates or any of its
officers or directors.

On  February  23,  2004,  the  Company  issued  an  unvested  warrant  to  Sachi
International,  Inc. to purchase up to 3,000,000 shares of common stock at $0.04
a share. The Warrant vests based on the amount of investment proceeds brought to
the Company by the Holder,  with 100% vesting if the Holder  brings  $500,000 in
investment  capital.  In the event less than  $500,000 is invested,  the warrant
vests in a pro-rata  amount.  The closing of any such investment shall be in the
sole and absolute discretion of the Company.



                                       20

<PAGE>



ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS

INTRODUCTION AND FORWARD LOOKING STATEMENTS

The following  discussion and analyses  should be read in  conjunction  with our
consolidated  financial  statements  and the related  notes to the  consolidated
financial statements included elsewhere in this report.

The following  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations,  as well as other  sections of this Form 10-QSB,  contain
"forward looking statements" within the meaning of Rule 175 under the Securities
Act of 1933,  as amended,  and Rule 3b-6 under the  Securities  Act of 1934,  as
amended,  including  statements  regarding,  among other  items,  the  Company's
business strategies, continued growth in the Company's markets, projections, and
anticipated  trends  in the  Company's  business  and the  industry  in which it
operates.  The words "believe," "expect,"  "anticipate,"  "intends," "forecast,"
"project," and similar expressions identify  forward-looking  statements.  These
forward-looking  statements are based largely on the Company's  expectations and
are subject to a number of risks and uncertainties,  certain of which are beyond
the Company's  control.  The Company  cautions that these statements are further
qualified  by  important  factors  that  could  cause  actual  results to differ
materially  from  those in the  forward  looking  statements,  including,  among
others,  the following:  the Company's ability to raise additional  financing or
generate revenue sufficient to sustain the Company's operations,  demand for the
Company's products,  competitive pricing pressures,  changes in the market price
of technologies used in the Company's  products,  the level of expenses incurred
in the  Company's  operations,  the  scope,  duration  and  results of the SEC's
inquiry into the  Company,  the  possibility  that such inquiry will result in a
formal investigation of the Company by the SEC, the possibility that the Company
or its officers and directors  will become the subject of criminal  proceedings,
the  possibility  that  stockholders  or  regulatory  authorities  may  initiate
proceedings against the Company and/or its officers and directors as a result of
any  past  securities  law  violations,   the  possibility  that  the  Company's
securities will not become eligible for quotation on the OTC Bulletin Board, and
the effect of the  Company's  recent  Nasdaq  delisting on the  liquidity of the
Company's  stock and its ability to raise  capital.  In light of these risks and
uncertainties,  there can be no assurance that the  forward-looking  information
contained  herein will in fact  transpire or prove to be  accurate.  The Company
disclaims any intent or obligation to update "forward looking statements."


OVERVIEW

NuWay Medical,  Inc. (the "Company")  recently began to offer medical and health
related technology products and services with an initial focus on the health and
information  software  technology  needs of the sports  industry.  The Company's
primary  product  is  its  Player  Record  Library  System  ("PRLS"),  a  highly
specialized  electronic medical record and workflow process software application
designed  to address the  information  technology  needs of the sports  industry
relating to player health  including the need for  technology  that  facilitates
compliance  with  the  Health  Insurance   Portability  and  Accountability  Act
("HIPAA").

The Company markets its PRLS through its subsidiary  NuWay Sports,  LLC, a joint
venture  formed in December 2002 and owned 51% by the Company and 49% by Rasheed
& Associates.  NuWay Sports recently sold the scaled down version of the PRLS to
several  NFL teams and is  promoting  its  service to other NFL  teams,  the NFL
itself, the NFL Trainers  Association,  the NFL Players  Association and the NFL
Player Safety Council. NuWay Sports also markets the PRLS to teams, leagues, and

                                       21
<PAGE>

player associations in the National Basketball Association ("NBA"), Major League
Baseball ("MLB"), and other sports such as hockey, soccer, boxing, motor sports,
and entertainment  sports.  The Company believes that its PRLS would benefit not
only professional sports leagues and participants,  but also collegiate programs
and in some cases, high school athletic programs.

The  following  discussion  compares  the three  and nine  month  periods  ended
September 30, 2003 and September 30, 2002. Due to the recent  complete  material
change in the Company's business focus and operations,  this discussion will not
address the  discontinued  operations  in the areas of oil and gas  exploration,
cigar distribution,  and gaming equipment rentals which constituted the majority
of the  Company's  operations  during the nine month period ended  September 30,
2002.

ANALYSIS OF FINANCIAL CONDITION

The  Company  had  approximately  $3,000  of cash on hand at March 1,  2004.  In
September 2003, the Company received all scheduled  installments of a total loan
commitment  of  $420,000  as  described  in Note 7 to the  financial  statements
appearing  elsewhere in this report.  On November 20, 2003, the Company received
$50,000  in the  form of a  Promissory  Note  as  described  in  Note 11  above.
Notwithstanding this financing,  the Company will still need to raise additional
capital to sustain operations and implement its growth strategy until such time,
if ever, that the Company achieves profitability. As of the date of this filing,
the  Company  was not a party  to any  definitive  agreements  to  provide  such
financing.  Although  the  Company  is in  the  process  of  actively  reviewing
additional proposals made by private investors and investment bankers, there can
be  no  assurance  that  the  Company  will  be  able  to  consummate  any  such
transactions on terms satisfactory to the Company, or at all, or if consummated,
that such financings will provide the Company with  sufficient  capital.  If the
Company  is unable to secure  additional  financing  within the next 120 days it
would need to significantly curtail and perhaps shut down its operations.  It is
unlikely  that the Company will be able to qualify for bank debt until such time
as the Company is able to demonstrate  sufficient  financial strength to provide
confidence for a lender.

The Company's shares were delisted effective as of June 10, 2003 from trading on
the Nasdaq SmallCap Market.  The shares are currently quoted on the pink sheets.
Although a market  maker has  submitted  an  application  for  quotation  of the
Company's  shares  on  the  Over-the-Counter  Bulletin  Board,  there  can be no
assurance that this  application will be approved by NASD (and, if not, that any
other  applications  that may in the future be filed),  or the  Company  will be
cleared to trade on the Bulletin  Board,  in  particular  in light of the public
interest  concerns  raised by Nasdaq in  connection  with the  delisting  of the
Company's  shares.  This Nasdaq  delisting has made it more  difficult to effect
trades  and has led to a  significant  decline  in the  frequency  of trades and
trading volume.  The delisting could also adversely affect the Company's ability
to obtain financing due to the decreased liquidity of the Company's shares.

Although  the  primary  development  of the  PRLS  system  has  been  completed,
management plans on periodically upgrading its PRLS software application through
additional research and development,  including tailoring its application to the
specific  needs of its  clients  as those  needs are  brought  to the  Company's
attention. The Company will be unable to accomplish the foregoing on a long-term
basis,  however,  unless and until the additional financing referred to above is
secured.

Based on its  current  business  plan,  and  assuming  sufficient  financing  is
obtained,  management  believes it will be able to generate  meaningful sales of
its PRLS software application and that it may be able to secure sales or license
agreements  as early as the first half of 2004.  The Company has entered into an
agreement  with its first NBA  franchise to  implement  the PRLS system for that
franchise.  The Company's PRLS was introduced to the marketplace in January 2003
and generated a total of approximately  $40,000 in revenues during the first and
second quarters of 2003 through the sale of a scaled-down version of the product
to 18 NFL teams at the 2003 NFL  Combine.  Pursuant to these  transactions,  the
Company  digitized  over  60,000  medical  images  for use by NFL teams in their
evaluation  of  potential  draft  picks.  Management  believes  that its PRLS is
already  being  referred by its customers and prospects as the best of brand for
its sports industry focus.  The Company is marketing the PRLS to multiple sports
leagues and is actively seeking additional vertical market opportunities.  There
can be no  assurance,  however,  that the  Company  will be able to  secure  any
further  agreements  for its product,  that such  agreements  will ever generate
meaningful  revenue  for  the  Company,  or  that  the  Company  will be able to
successfully capture any such vertical market opportunities.

Based on its current business plan, management anticipates that the Company will
need to add additional staff over the next 12 months. Although it only had three
full time  employees  as of September  30,  2003,  the Company also relies on at
least 12 consultants  who work on behalf of the Company.  The Company intends to
add some of  these  consultants  to its full  time  staff as  employees  and add
additional staff members on an as needed basis.  Based on its anticipated growth
in  revenues,  and subject to the  availability  of  additional  financing,  the
Company expects to add up to approximately 20 full time employees before the end
of second quarter 2004.


                                       22
<PAGE>

During the latter half of 2002,  because the Company was focused on implementing
its new  business,  it  generated no  revenues,  and thus  received no cash from
operations, resulting in negative working capital. Current assets increased from
$521 at December 31, 2002 to $30,860 at September 30, 2003. The increase was due
to the sale of $279,661 of the Company's Preferred Series A shares,  $420,000 of
proceeds from the Term Loan Agreement,  and $40,000 in revenues generated by the
sale of the Company's  PRLS since its  introduction  to the  marketplace  in the
first quarter of 2003.

Other assets  declined  from  $4,345,000  at December 31, 2002 to  $3,693,250 at
September  30,  2003.  The  decrease  of  $651,750  was  primarily   related  to
amortization of our intangible assets.

Current liabilities increased from $2,401,579 at December 31, 2002 to $2,479,458
at September  30, 2003.  The increase was due to an increase in Notes Payable of
$420,000 offset by the net effective discount on note of approximately  $155,000
related to the  warrants  attached to the  Augustine  II, LLC note payable and a
reduction in accounts payable and accrued expenses of $187,000. Accounts payable
and accrued expense obligations were satisfied by cash payments and the issuance
of the Company's common stock.

Total  stockholders'  equity decreased to a deficit of $625,512 at September 30,
2003.  This  decrease was due to the net loss of  $5,299,049  for the nine month
period  ended  September  30,  2003,  net of the effect of the  issuance  of the
Company's  common  stock to  compensate  consultants  and others,  approximately
$245,000  recorded  as  Additional  Paid in  Capital  related  to the  effective
discount  on note and the sale of  shares  of Series A  Preferred  Stock,  which
generated  net  proceeds to the Company of  $279,661.  The net loss for the nine
months ended  September  30, 2003  included an  impairment  charge of $1,866,344
against the recorded value of intangible assets.


RECENT FINANCING

On  June  10,  2003  the  Company  entered  into a Term  Loan  Agreement  ("Loan
Agreement")  with Augustine II, LLC  ("Augustine"),  pursuant to which Augustine
agreed to loan the  Company  $420,000,  payable  in  installments  of  $250,000,
$100,000,  and $70,000  (the  "Loan").  The Company  received  has  received all
scheduled  installments  and  principal  and interest (at an annual rate of 10%)
were  due  in  full  on  February  29,   2004.   The  Company  has  spoken  with
representatives of the Augustine II, LLC, and have advised them that the Company
is  unable  to pay the  amount  due under the note by  February  29,  2004.  The
Augustine II, LLC representatives indicated a desire to restructure the terms of
the note to allow a longer time frame for the  Company to repay the  obligation.
Those  negotiations  are yet to be finalized.  The Company  recorded  $11,717 of
interest  expense as of  September  30, 2003.  The Loan  Agreement is subject to
certain  requirements  that the Company make  mandatory  prepayments of the Loan
from the proceeds of any asset sales outside of the ordinary course of business,
and, on a quarterly  basis,  from positive  cash flow.  In addition,  all or any
portion of the Loan may be prepaid by the Company at any time without premium or
penalty.  The  proceeds  of the Loan are being used by the  Company  for working
capital.


                                       23
<PAGE>

As additional  consideration for making the Loan,  Augustine  received five year
warrants to purchase up to 6,158,381  shares of the Company's common stock at an
exercise price of $0.16 per share.  The Company can require that the warrants be
exercised  if the  Company's  shares  trade at or above $0.60 per share for each
trading day within the 30 calendar  days prior to the maturity date of the Loan,
trading  volume of the shares  equals or exceeds  100,000  shares per day during
such  period,  and the  shares of the  Company's  common  stock  underlying  the
warrants have been included on a registration  statement filed with and declared
effective by the SEC prior to the maturity  date.  If these  conditions  are not
fully  satisfied by the maturity date, then Augustine may, at any time following
the  maturity  date and so long as the  warrants  remain  exercisable,  elect to
exercise all or any portion of the warrants pursuant to the "cashless  exercise"
provisions of the warrants.  Using the Black-Scholes  pricing model, the Company
allocated approximately $245,000 of the proceeds of the Loan to the warrants and
$175,000 to the note payable,  which  allocations  were made on a pro rata basis
based on the fair value of the warrants. The Black Scholes calculation assumed a
discount rate of  approximately  four percent,  volatility of 257 percent and no
dividends.  Given  that the  warrants  were  issued  in  conjunction  with  Loan
Agreement, such fair value represents an effective discount on the debt and will
be amortized  over the term of the loan.  Amortization  of this discount for the
quarter ended September 30, 2003 was  approximately  $93,000 and was recorded as
effective  interest  expense  in  the  accompanying  consolidated  statement  of
operations.

As security for the Loan, New Millennium (an affiliate of Mr.  Calvert)  pledged
2.5 million shares of the Company's  common stock owned by New  Millennium,  and
the Company has granted Augustine a security interest in its ownership  interest
in the Company's subsidiary, NuWay Sports, LLC.

RESULTS OF OPERATIONS
COMPARISON OF THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002

Revenues

During the three months ended  September  30, 2002,  there were no revenues from
continuing  operations,  compared  to no  revenues  in the  three  months  ended
September  30,  2003.  During the last half of 2002,  the  Company  changed  its
business  to focus on  fulfilling  information  technology  needs of the  sports
industry.   This  change  led  to  the   development  of  the  Company's   PRLS.
Consequently,  the  results  of our prior  business  line  operations  in gaming
machine  rental,  oil  and gas  development  and  distribution  of  cigars  were
reclassified  in our  consolidated  statements of  operations  as  "discontinued
operations."

Selling, General and Administration Expense ("SG&A")

During the three months ended  September 30, 2003,  SG&A increased by 10 percent
to $614,075  from $559,100 for the three months ended  September  30, 2002.  The
largest components of these expenses were:


                                       24
<PAGE>

a.       Salaries and Payroll-Related Expenses: These expenses were $129,000 for
         the three months ended September 30, 2003 as compared to $75,000 in the
         same period in 2002.  These  expenses  increased as the Company  issued
         stock for  services in lieu of salary  totaling  approximately  $52,000
         which was needed to continue its current marketing  strategy related to
         the development of PRLS vertical markets.

b.       Consulting  Expenses:  These  expenses  were  consistent  for the three
         months  ended  September  30,  2003,  totaling  $297,000 as compared to
         $300,000 for the three months ended  September 30, 2002. This amount of
         consulting   expense  is  consistent  with  management's   strategy  of
         maintaining a very low permanent  staffing level and supplementing that
         with  consultants  on  a   project-by-project   basis.   Further,   the
         development  of new products and  technology  related to the  Company's
         change of business  required  additional  consulting  assistance in the
         areas of applications development, sales, marketing and administration.
         These positions were primarily  staffed by independent  contractors who
         were compensated with shares of the Company's common stock.

c.       Legal  Expenses:  These  expenses  increased from $75,000 for the three
         months ended  September 30, 2002 to $118,000 for the three months ended
         September 30, 2003, an increase of 57 percent. This increase was due to
         the high level of legal assistance required in 2003 for matters such as
         (i)  addressing  NASDAQ  compliance  issues  (ii) a major  shift in the
         Company's core business,(iii) numerous stock issuances, (iv) addressing
         subpoenas and interview  requests by the grand jury  investigating Mark
         Anderson, and (v) addressing the SEC's request for documents as part of
         its informal investigation.

During  the three  months  ended  September  30,  2003,  the  Company  issued an
aggregate of 4,932,840 shares of its common stock as consideration  for $443,956
of services provided to the Company during the quarter. It is likely that, until
the Company has  sufficient  cash on hand, it will continue to utilize an equity
plan registered  pursuant to form S-8 to allow  compensation for consultants and
employees that provide services to the Company.

Impairment of Intangible Assets

The  Company  is  required  to  assess  the  impairment  of  goodwill  and other
intangible  assets  annually,  or  whenever  events or changes in  circumstances
indicate  that the  carrying  value may not be  recoverable.  Factors that could
trigger an impairment review include  significant  underperformance  relative to
projected future operating results, significant changes in the manner of our use
of the  acquired  assets or the  strategy for the  Company's  overall  business,
significant  negative  industry or economic  trends,  and a market  value of the
Company's  common stock lower than the  Company's  assets'  book value.  The net
carrying  value of  goodwill  and other  intangible  assets not  recoverable  is
reduced to fair value.  The Company's  common stock traded at a high of $0.34 on
June 6, 2003,  four days before the stock was de-listed from the Nasdaq SmallCap
exchange on June 10, 2003. The stock value  decreased to $0.10 just after it was
delisted,  and  stayed at  approximately  $0.10  through  the end of the  second
quarter  2003.  It  traded  at a high of $0.09  on the  last  day of the  second
quarter. During the third quarter, the stock continued to decrease in price, and
traded as low as $0.38 per share.  On the last day of third  quarter  2003,  the
stock closed at $0.06. Because the Company's common stock had continually traded
lower during the third quarter  2003,  lowing the market  capitalization  of the
Company to a low of  $1,609,266  during that  period (on  September  11,  2003),
Management  determined  that it was  appropriate  during  the third  quarter  to
conduct an impairment  analysis of the intangible assets on its books that were,
in the aggregate, valued at over twice the market value of Company.


                                       25
<PAGE>

         Management  conducted  an  impairment  analysis  of the two  intangible
assets on its books: the marketing database and Med Wireless license.  These two
assets were listed on the Company's  financial  statements for the period ending
June 30, 2003 at values of $229,500 and $3,681,000,  respectively.  Depreciation
for the period  ending  September  30, 2003,  would have  decreased the value of
those assets to $216,750 and $3,476,500 respectively.

         With respect to the marketing database,  although Management intends to
use the database to market  products  offered by its recently  acquired  Premium
Medical Group, Inc. subsidiary, it has no way of predicting what success it will
have in that  marketing  effort,  and has not at this  time  used the  marketing
database to market any product or generate any revenue for the Company,  and has
thus  determined  to record a 100%  impairment  of that  asset in the  amount of
$216,750.

         With respect to the Med Wireless license, Management analyzed the sales
prospects of its PRLS system (which is based upon the  technology  licensed from
Med Wireless) to the various  professional and collegiate sports  organizations,
the limited  successes the Company's NuWay Sports subsidiary has had thus far in
its sales efforts,  and the projected  revenue from projected  future sales, and
has  determined to record an impairment  charge to the recorded value of the Med
Wireless license of $1,649,594. This amount was calculated projecting sales over
a three year period (calendar years 2004, 2005 and 2006), factoring in the costs
of sales and the  product  costs,  discounting  projected  net  revenue to their
present  value  using a 7.5%  interest  factor,  and  further  discounts  of the
Company's projections for uncertainties  relative to the timing of acceptance of
this technology.

         Management  does not believe that a further  impairment of these assets
will be necessary as of the period ending December 31, 2003.

Discontinued Operations

As discussed above and in the notes to our  consolidated  financial  statements,
effective  October 1, 2002, the Company disposed of several  operations  through
the  sale  of  two  foreign  subsidiaries,  Latin  American  Casinos  and  NuWay
Resources,  and,  effective November 2002, ceased operations of its World's Best
Rated Cigar Company  subsidiary.  Due to the discontinuance of these operations,
the  Company  has  reclassified  the  historical  operating  results  from these
ventures  for the three  months  ended  September  30, 2002 and  disclosed  such
results  below  the  results  from  continuing  operations  in the  consolidated
statements of operations.  These businesses  generated losses from operations of
$261,173 for the three months ended September 30, 2002.

Net (Loss) Income

Net loss for the three  months  ended  September  30,  2003 was  $2,821,374,  or
$(0.08) per share  compared to a net loss of  $1,112,750,  or $(0.11) per share,
for the three months ended September 30, 2002. Besides the significant growth in
total costs and expenses and the intangible asset impairment  charge recorded as
of September 30, 2003 totaling  $1,866,344,  the net loss per share was affected
by the larger number of weighted average common share equivalents outstanding at
September  30, 2003 as compared to 2002  (33,769,193  at  September  30, 2003 as
compared to 9,999,062 at September 30, 2002).

COMPARISON OF THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002


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<PAGE>

Revenues

During the nine months ended  September  30, 2002,  there were no revenues  from
continuing  operations compared to approximately  $40,000 of revenue in the nine
month period ended  September  30, 2003 as a result of the sale of a scaled down
version of the  Company's  PRLS  product to 18 NFL teams at the 2003 NFL Combine
and to customers at the Texas High School Combine. During the last half of 2002,
the Company changed its business to focus on fulfilling  information  technology
needs  of the  sports  industry.  This  change  led to  the  development  of the
Company's PRLS. Consequently,  the results of our prior business line operations
in gaming machine rental,  oil and gas  development  and  distribution of cigars
were reclassified in our consolidated  statements of operations as "discontinued
operations."

Selling, General and Administration Expense ("SG&A")

During the nine months ended September 30, 2003, SG&A increased by 43 percent to
$2,618,183  from  $1,825,205  for the nine months ended  September 30, 2002. The
largest components of these expenses were:

a.       Salaries and Payroll-Related Expenses: These expenses were $262,000 for
         the nine months ended  September  30, 2003 versus  $225,000 in the same
         period in 2002,  an increase of $37,000.  This  increase  reflects  the
         additional expense recorded from shares issued as compensation.

b.       Consulting Expense:  These expenses increased for the nine months ended
         September 30, 2003 to $1,466,000  from  $1,084,000  for the nine months
         ended September 30, 2002, an increase of 26 percent.  This increase was
         directly related to new management's strategy of maintaining a very low
         permanent  staffing level and supplementing  that with consultants on a
         project-by-project  basis. Further, the development of new products and
         technology  related  to  the  Company's  change  of  business  required
         additional   consulting   assistance  in  the  areas  of   applications
         development, sales, marketing and administration.  These positions were
         primarily staffed by independent  contractors who were compensated with
         shares of the Company's common stock.

c.       Legal  Expenses:  These  expenses  increased from $225,000 for the nine
         months ended  September  30, 2002 to $647,000 for the nine months ended
         September 30, 2003,  an increase of 188 percent.  This increase was due
         to the high level of legal assistance required in 2003 for matters such
         as (i) addressing  NASDAQ  compliance  issues (ii) a major shift in the
         Company's  core  business,   (iii)  numerous  stock   issuances,   (iv)
         addressing   subpoenas  and  interview   requests  by  the  grand  jury
         investigating  Mark Anderson,  and (v) addressing the SEC's request for
         documents as part of its informal investigation.

During the nine months ended September 30, 2003, the Company issued an aggregate
of 18,623,759 shares of its common stock. Of these shares, 2,633,590 were issued
in consideration for $645,648 of obligations  previously incurred and 15,990,169
were issued as consideration  for $1,530,000 of services provided to the Company
during the nine month period ended September 30, 2003.

Impairment of Intangible Assets

The  Company  is  required  to  assess  the  impairment  of  goodwill  and other
intangible  assets  annually,  or  whenever  events or changes in  circumstances
indicate  that the  carrying  value may not be  recoverable.  Factors that could
trigger an impairment review include  significant  underperformance  relative to
projected future operating results, significant changes in the manner of our use

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<PAGE>

of the  acquired  assets or the  strategy for the  Company's  overall  business,
significant  negative  industry or economic  trends,  and a market  value of the
Company's  common stock lower than the  Company's  assets'  book value.  The net
carrying  value of  goodwill  and other  intangible  assets not  recoverable  is
reduced to fair value.  The Company's  common stock traded at a high of $0.34 on
June 6, 2003,  four days before the stock was de-listed from the Nasdaq SmallCap
exchange on June 10, 2003. The stock value  decreased to $0.10 just after it was
delisted,  and  stayed at  approximately  $0.10  through  the end of the  second
quarter  2003.  It  traded  at a high of $0.09  on the  last  day of the  second
quarter. During the third quarter, the stock continued to decrease in price, and
traded as low as $0.38 per share.  On the last day of third  quarter  2003,  the
stock closed at $0.06. Because the Company's common stock had continually traded
lower during the third quarter  2003,  lowing the market  capitalization  of the
Company to a low of  $1,609,266  during that  period (on  September  11,  2003),
Management  determined  that it was  appropriate  during  the third  quarter  to
conduct an impairment  analysis of the intangible assets on its books that were,
in the aggregate, valued at over twice the market value of Company.

         Management  conducted  an  impairment  analysis  of the two  intangible
assets on its books: the marketing database and Med Wireless license.  These two
assets were listed on the Company's  financial  statements for the period ending
June 30, 2003 at values of $229,500 and $3,681,000,  respectively.  Depreciation
for the period  ending  September  30, 2003,  would have  decreased the value of
those assets to $216,750 and $3,476,500 respectively.

         With respect to the marketing database,  although Management intends to
use the database to market  products  offered by its recently  acquired  Premium
Medical Group, Inc. subsidiary, it has no way of predicting what success it will
have in that  marketing  effort,  and has not at this  time  used the  marketing
database to market any product or generate any revenue for the Company,  and has
thus  determined  to record a 100%  impairment  of that  asset in the  amount of
$216,750.

         With respect to the Med Wireless license, Management analyzed the sales
prospects of its PRLS system (which is based upon the  technology  licensed from
Med Wireless) to the various  professional and collegiate sports  organizations,
the limited  successes the Company's NuWay Sports subsidiary has had thus far in
its sales efforts,  and the projected  revenue from projected  future sales, and
has  determined to record an impairment  charge to the recorded value of the Med
Wireless license of $1,649,594. This amount was calculated projecting sales over
a three year period (calendar years 2004, 2005 and 2006), factoring in the costs
of sales and the  product  costs,  discounting  projected  net  revenue to their
present  value  using a 7.5%  interest  factor,  and  further  discounts  of the
Company's projections for uncertainties  relative to the timing of acceptance of
this technology.

         Management  does not believe that a further  impairment of these assets
will be necessary as of the period ending December 31, 2003.

Net (Loss) Income

Net loss for the nine months ended September 30, 2003 was $5,299,049, or $(0.19)
per share,  compared to a net loss $767,612,  or $(0.10) per share, for the nine
month period ending September 30, 2002. In addition to the significant growth in
total costs and expenses and the intangible asset impairment  charge recorded as
of September 30, 2003 totaling  $1,866,344,  the net loss per share was affected
by the cancellation of stock warrants previously expensed of $1,659,750, and the
larger number of weighted average common share  equivalents  outstanding for the
nine month period ending  September 30, 2003 as compared to 2002  (28,628,360 at
September 30, 2003 as compared to 7,437,069 at September 30, 2002).


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<PAGE>



ITEM 3.   CONTROLS AND PROCEDURES

a) Evaluation of disclosure controls and procedures.

Pursuant to Rule  13a-15(b)  under the Exchange Act, the  Company's  management,
with the  participation  of the President,  Chief Executive  Officer and Interim
Chief Financial Officer, evaluated the effectiveness of the Company's disclosure
controls  and  procedures  as of the end of the period  covered by this  report.
Based on that  evaluation,  the President,  Chief Executive  Officer and Interim
Chief Financial  Officer  concluded that the Company's  disclosure  controls and
procedures are effective in ensuring that  information  required to be disclosed
in reports that the Company files or submits under the Exchange Act is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms.

b) Changes in internal controls.

No change in the Company's  internal control over financial  reporting  occurred
during the Company's most recent fiscal quarter that materially affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

PART II.   OTHER INFORMATION


ITEM 5.  OTHER INFORMATION


On October 29, 2003, the Company issued an unvested  warrant to an individual to
purchase  2,000,000 shares of common stock at $0.05 a share. The warrant expires
on October 29, 2004. The Warrant is not exercisable  unless and until the Holder
introduces to the Company an investor or investors  which  investor or investors
invest net proceeds in the Company of at least  $250,000  within 3 months of the
introduction.  The  closing  of any  such  investment  shall  be in the sole and
absolute  discretion  of the  Company.  In the  event  investments  of at  least
$250,000 are not so made by May 1, 2004, or are made by or through parties other
than the Holder,  the Warrant  shall expire in its entirety and be of no further
force or effect.


On November 20, 2003, the Company received proceeds of $50,000 in exchange for a
promissory  note in which it agreed to pay $65,000 to the  investor 90 days from
the date of the loan. The Company's CEO and president Dennis Calvert  personally
guaranteed the note. The Company has paid back $23,000 to the investor,  and has
made  arrangements  with the  investor  to extend the terms of the note to allow
payment of the remainder due by March 20, 2004.

On January 30, 2004,  the Company  entered into a tax free  reorganization  with
Premium Medical Group,  Inc., a Florida  corporation  ("Premium")  pursuant to a
Stock  Purchase  Agreement  (the  "Agreement")  that  called for the  Company to
acquire  100% of the  shares of Premium  from  Eduardo A. Ruiz and Luis A. Ruiz,
Premium's sole shareholders,  in exchange for 30,000,000 shares of the Company's
common stock,  subject to  adjustment  as more fully  described in the Agreement
(the  "Transaction").  Based on the closing bid price for the  Company's  common
stock on January 31,  2004,  the shares  issued to the Premium  shareholders  in
connection with the Transaction  have been valued at  approximately  $1,500,000.
The  Agreement  was attached as Exhibit 2.1 to the Form 8-K filed by the Company
on February 17, 2004, and the description of the Transaction contained herein is
qualified in its entirety by reference to the Agreement.


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<PAGE>

The  consideration  for the  Transaction  was  determined  through  arms'-length
negotiation  between the Company  and Premium and its  shareholders,  giving due
consideration  to the  market  value  of the  Company's  common  stock  and  the
estimated value of Premium.  The 30,000,000 shares issued in the Transaction are
being  held in escrow and are  subject to  downward  adjustment  pursuant  to an
agreed upon formula,  as more fully described in the Agreement.  Eduardo A. Ruiz
and Luis A. Ruiz retain the full voting  rights of these  shares  while they are
held in escrow. In addition,  the consideration for the Transaction  includes an
earn out bonus pursuant to which the Premium  shareholders  shall be entitled to
receive additional consideration equal to the following percentages of Premium's
net  income  (calculated  in  accordance  with  generally  accepted   accounting
principles)  during  calendar year 2004: (i) 20% of net income for net income of
up to  $1,000,000;  (ii) 15% of net income for net  income of  $1,000,000  up to
$2,000,000;  (iii)  10% of net  income  for net  income  over  $2,000,000.  This
additional  consideration  shall be paid in the form of warrants to purchase the
Company's common stock.

Immediately following the Transaction, the Company's capitalization consisted of
66,386,486  shares  of  common  stock   outstanding,   of  which  the  Company's
shareholders  prior to the Transaction  held 36,386,486  shares,  and the former
Premium  shareholders  held 30,000,000  shares.  The 30,000,000 shares represent
approximately  45% of the  post-Transaction  outstanding  common  shares  of the
Company.

As a condition to Premium  entering into the Agreement,  New Millennium  Capital
Partners,  LLC (a company  controlled by Dennis  Calvert,  the Company's CEO and
President),  agreed to convert  its  secured  promissory  note in the  principal
amount of  $1,120,000  (together  with  $114,800 in accrued but unpaid  interest
thereon) into 30,869,992  shares of the Company's  Common Stock.  Following this
conversion,  the Company's  capitalization  will consist of 97,256,478 shares of
common  stock  outstanding,  and Mr.  Calvert  will be the  beneficial  owner of
approximately  35,651,992  shares of common  stock or  approximately  37% of our
outstanding  stock,  which includes the 4,782,000  shares he currently  owns. We
expect the conversion to occur within the next 60 days.

Additionally,  pursuant to the Agreement, the Company agreed to appoint Mr. Luis
A. Ruiz to the  Company's  Board of  Directors,  subject  to Mr.  Ruiz's  formal
acceptance  of the  position and a standard  application  and  background  check
process that the Company  expects to be completed  within the next 30 days. Once
Mr. Ruiz has been appointed to the board, our Board of Directors will consist of
Mr. Dennis Calvert, Mr. Gary Cox, Mr. Steven Harrison, Mr. Joseph Provenzano and
Mr. Luis A. Ruiz. There are no other material  relationships  between Premium or
the shareholders thereof, and the Company or any of its affiliates or any of its
officers or directors.

On  February  23,  2004,  the  Company  issued  an  unvested  warrant  to  Sachi
International,  Inc. to purchase up to 3,000,000 shares of common stock at $0.04
a share. The Warrant vests based on the amount of investment proceeds brought to
the Company by the Holder,  with 100% vesting if the Holder  brings  $500,000 in
investment  capital.  In the event less than  $500,000 is invested,  the warrant
vests in a pro-rata  amount.  The closing of any such investment shall be in the
sole and absolute discretion of the Company.

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<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A)   EXHIBITS

EXHIBITS     DESCRIPTION OF EXHIBIT
--------     ----------------------

31.1     Certification of President,  Chief Executive  Officer and Interim Chief
         Financial  Officer  pursuant  to 15 U.S.C.  section  7241,  as  adopted
         pursuant to section 302 of the Sarbanes-Oxley Act of 2002

32.1     Certification of President,  Chief Executive  Officer and Interim Chief
         Financial  Officer  pursuant  to 18 U.S.C.  section  1350,  as  adopted
         pursuant to section 906 of the Sarbanes-Oxley Act of 2002


REPORTS ON FORM 8-K

The Company filed no reports on Form 8-K during the three months ended September
30, 2003.

                                   SIGNATURES

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


DATED: March 5, 2004                       NUWAY MEDICAL, INC.


                                           By: /s/ Dennis Calvert
                                           ----------------------------------
                                           Dennis Calvert, President,
                                           Chief Executive Officer, and
                                           Interim Chief Financial Officer


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