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

                                   FORM 10-KSB

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

                   For the Fiscal Year Ended December 31, 2000

                        Commission file number 000-28790

                           MEDCARE TECHNOLOGIES, INC.
                           --------------------------
           (Name of small business issuer as specified in its charter)

Delaware                                                87-0429962 B
--------                                                ------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)

Suite 216 1628 West 1st Avenue, Vancouver, BC           V6J 1G1
---------------------------------------------           -------
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:     (604) 659-5006
                                                        --------------

Securities registered under Section 12(b) of the Act:   None

Securities registered under Section 12(g) of the Act:

         Common Stock, $.001 par value, listed on the OTC Bulletin Board

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required to file such reports),  and (2) has been subject to such filing for the
past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K [X]

Revenues for last fiscal year were $700,053.00

Aggregate market value of Common Stock, $0.001 par value, held by non-affiliates
of the  registrant  as of April 10, 2001:  $344,026.  Number of shares of Common
Stock, $0.001 par value, outstanding as of April 10, 2001: 11,564,566.

DOCUMENTS INCORPORATED BY REFERENCE

Proxy  Statement for the 2001 Annual Meeting of  Shareholders  (to be filed with
the Commission within 120 days after the registrant's fiscal year end) is hereby
incorporated by reference into Part III of this Form 10-KSB.


<PAGE>





                          ANNUAL REPORT ON FORM 10-KSB
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                TABLE OF CONTENTS



PART I                                                                      Page

Item  1. Business                                                              3

Item  2. Properties                                                            7

Item  3. Legal Proceedings                                                     8

Item  4. Submissions of Matters to a Vote of Security Holders                  8

PART II

Item  5. Market for the Registrants' Common Equity and Related Stock-
         holder Matters                                                        8

Item  6. Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                 8

Item  7. Financial Statements                                                 11

Item  8. Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure                                                 28

PART III

Item  9. Directors and Executive Officers of the Registrant                   28

Item 10. Executive Compensation                                               28

Item 11. Security Ownership of Certain Beneficial Owners and Management       28

Item 12. Certain Relationships and Related Transactions                       28

PART IV

Item 13. Exhibits and Reports on Form 8-K                                     28









<PAGE>





                                     PART I

Item 1. Business
----------------

Except for the historical  information  contained herein, the discussion in this
Annual Report on Form 10-KSB contains  certain  forward-looking  statements that
involve risk and  uncertainties,  such as  statements  of the  Company's  plans,
objectives,  expectations and intentions. The cautionary statements made in this
document  should be read as being  applicable  to all  related  forward  looking
statements  wherever they appear in this document.  The Company's actual results
could differ  materially from those discussed  herein.  Factors that could cause
differences  include those discussed  below in "Risk Factors",  as well as those
discussed elsewhere herein.

                                   THE COMPANY

MedCare Technologies, Inc. ("MedCare Technologies",  "MedCare" or the "Company")
is a  healthcare  technology service company that focuses on under-served, high-
growth markets. The Company was originally  incorporated in the state of Utah in
1986 and changed its domicile to Delaware in 1996 through a migratory merger.

In 1995, the Company  acquired the MedCare  Program  ("Program"),  a proprietary
product of the  Company,  that is made up of  equipment,  software  and services
developed to provide non- pharmaceutical,  non-invasive treatment to individuals
suffering from urinary  incontinence  and other pelvic  disorders.  In 1996, the
Company  began to offer the  Program  to  doctors  and in 1998 the  Program  was
launched  nationally.  The Company did not  generate  any  revenues  until 1997.
During  1998,  the  Company's  sole  business  was the  offering  of the MedCare
Program.  In  March,  2001,  due to the lack of  significant  revenues  and high
operating costs, the Company terminated substantially all of its MedCare Program
sites.  The Company is currently  searching for potential joint venture partners
in order to further market the MedCare  Program,  as well as seek out additional
revenue streams from the Company's current intellectual property base.

In October 1999, MedCare Technologies, Inc. launched a new, business-to-business
web site, RxSheets.com (www.rxsheets.com), which was directed exclusively at the
physician and  pharmaceutical  marketplace.  The Company changed the name of its
wholly-owned subsidiary from Medcareonline.com to RxSheets.com, Inc. On November
10, 2000 the Company sold all assets relating to its RxSheets.com  subsidiary to
WGC  Enterprises,  an investment  group,  for a nominal sum. The sale  agreement
called for WGC  Enterprises  to establish a new entity,  to issue ten percent of
the issued  and  outstanding  stock of this new entity to MedCare  Technologies,
allow  MedCare to share in the future  revenues of the new entity and for WGC to
raise capital for this new entity in order to fund the ongoing  operations.  WGC
Enterprises  was unable to raise capital and MedCare,  due to substantial  costs
and minimal revenue potential, declined to exercise its option to repurchase the
assets of RxSheets.

                            DESCRIPTION OF BUSINESS

The MedCare  Program is a discrete  package of equipment,  software and services
developed by MedCare to provide  non-pharmaceutical,  non-invasive  treatment to
patients  suffering  from  urinary  incontinence  and  other  pelvic  disorders,
including pelvic pain, chronic  constipation,  fecal incontinence and disordered
defecation.

The  Program is designed to be used by  physicians  to support a treatment  plan
based primarily on behavioral  modification  techniques such as electromyography
("EMG")  biofeedback,  pelvic  floor  muscle  exercise,  and  bladder  and bowel
retraining. Utilizing the Program, physicians can


                                       3
<PAGE>



help patients  activate and strengthen the various sensory  response  mechanisms
that maintain bladder and bowel control.  Technological developments and studies
indicate  that such  behavioral  techniques  are  effective  methods in treating
incontinence.

The MedCare Program was sold as a comprehensive  continually  supported program.
The Company  provided the  equipment,  technology  and training to the treatment
site, as well as ongoing support through its clinical and billing divisions. The
training  was  all-inclusive  in order  for the  site to  promote  a  successful
program,   including  proven  protocols  for  equipment   operation,   community
education, billing, managed care and outcomes.

Due to the lack of significant  revenues and high operating cost associated with
this supported  program model, the Company has suffered large operating  losses.
In order to reduce operating expenses, the Company terminated  substantially all
of its MedCare Program sites in March, 2001. The Company is currently  searching
for   potential   joint   venture   partners   that  have   existing   operating
infrastructures  to which  the  MedCare  Program  can be  added as an  ancillary
service with  minimal  overhead.  MedCare  plans to develop  additional  revenue
streams from the Company's current intellectual property base.

Employees
---------

At December 31, 2000, the Company employed 7 full-time and 1 part-time  persons.
To the  best of the  Company's  knowledge,  none of the  Company's  officers  or
directors is bound by restrictive  covenants from prior  employers.  None of the
Company's  employees  are  represented  by  labor  unions  or  other  collective
bargaining  groups. The Company considers its relationship with its employees to
be excellent.

Risk Factors
------------

LACK OF OPERATING HISTORY:  Because of our limited operating history and lack of
past  profitability,   you  may  lose  your  investment  if  we  are  unable  to
successfully market our services and implement our business plan.

Although we organized  Medcare in 1986,  we did not become active until 1995 and
have been  continually  developing  our MedCare  Program  since that time.  As a
result,  our business is subject to the risks inherent in the establishment of a
new business.  Specifically, in formulating our business plan, we have relied on
the judgment of our officers,  directors and  consultants but have not conducted
any formal independent market studies concerning the demand for our services.

We have had  limited  revenues  since  inception.  In 2000,  we had  revenues of
$700,053.  We have not been  profitable,  experiencing  an  accumulated  loss of
$13,307,513  through 2000. Even if we become profitable in the future, we cannot
accurately  predict  the level  of, or our  ability  to  sustain  profitability.
Because we have not yet been  profitable  and cannot predict any level of future
profitability,  you bear the risk of a complete  loss of your  investment in the
event our business plan is unsuccessful.

INABILITY TO OBTAIN  FUNDING:  We may not be able to obtain  additional  funding
when needed, which could limit future expansion and marketing  opportunities and
result in lower than anticipated  revenues.  We require additional  financing to
pursue  relationships  with joint venture  partners for the MedCare  Program and
other business opportunities.  If the market price of the common stock declines,
some  potential  financiers  may either refuse to offer us any financing or will
offer financing at unacceptable  rates or unfavorable terms. If we are unable to
obtain  financing on  favorable  terms,  or at all,  this  unavailability  could
prevent us from expanding our business, which could materially impact our future
potential revenues.

CONTINUED  CONTROL BY EXISTING  MANAGEMENT:  You may lack an  effective  vote on
corporate matters and management may be able to act contrary to your objectives.
As of April 10, 2001,  our officers and board members own 50% of the  11,564,566
of our  outstanding  common  stock.  If  management  votes  together,  it  could
influence the outcome of corporate actions requiring shareholder approval,

                                       4

<PAGE>



including the election of directors,  mergers and asset sales. As a result,  new
stockholders  may  lack an  effective  vote  with  respect  to the  election  of
directors and other corporate matters. Therefore, it is possible that management
may take  actions  with  respect  to its  ownership  interest  which  may not be
consistent with your objectives or desires.

DIVIDENDS: We have not paid and do not currently intend to pay dividends,  which
may limit the current  return you may receive on your  investment  in our common
stock.  Future dividends on our common stock will depend on our future earnings,
capital requirements, financial condition and other factors. We currently intend
to retain earnings to increase our net worth and reserves.  We do not anticipate
that any holder of common stock will receive any cash,  stock or other dividends
on his  shares of common  stock at any time in the near  future.  You should not
expect or rely on the  potential  payment  of  dividends  as a source of current
income.

DEPENDENCE  ON EXECUTIVE  OFFICERS AND TECHNICAL  PERSONNEL:  The success of our
business plan depends on attracting qualified  personnel,  and failure to retain
the necessary  personnel  could  adversely  affect our  business.  We are highly
dependent on the services of our executive officer, Raymond E. Krauss. We do not
have  any  employment  agreements  with our  executive  officers.  In  addition,
competition for qualified  personnel is intense,  and we may need to pay premium
wages to attract  and  retain  personnel.  Attracting  and  retaining  qualified
personnel  is  critical  to our  business.  Inability  to attract and retain the
qualified  personnel necessary would limit our ability to implement our business
plan successfully.

SERIES B PREFERRED  SHARES:  We have a Series B Preferred Stock that has various
rights granted to the shareholders. See Note 10 of the financial statements.

CHANGE OF CONTROL:  Conversions of shares of Series B preferred stock may result
in new majority stockholders, whose interests may be inconsistent with yours. If
the market  price of the common  stock  declines  significantly,  we may issue a
large number of shares of common stock.  As a result,  our current  stockholders
may not have an effective vote in the election of directors and other  corporate
matters.  In the  event of a change  in  control,  it is  possible  that the new
majority  stockholders  may take actions which may not be  consistent  with your
objectives or desires.

ISSUANCES AT LESS THAN MARKET PRICE: Conversions of shares of Series B preferred
stock may drive down the price of our common stock. The conversion of the Series
B preferred stock is based on a formula that varies with the market price of our
common stock. This variable formula applies the lesser of (a) 125% of the market
price of our common  stock at the time we issued the Series B  preferred  stock,
($7.80) and (b) the approximate market price of our common stock at the time the
holders convert their shares of Series B preferred  stock.  As a result,  if the
market price of our common stock increases after we issue the Series B preferred
stock, it is possible that, upon conversion of the Series B preferred  stock, we
will issue shares of common stock at a price that is less than the  then-current
market price of the common stock.

In  addition,  the  warrants  issued  with the  Series  B  preferred  stock  are
exercisable  at a price equal to 125% of the  average  closing bid prices of our
common stock on the five  consecutive  trading  days  preceding  the  applicable
vesting date of the warrants.  If the market price of our common stock increases
above the warrant  exercise  price, we will have to issue shares of common stock
upon  exercise  of the  warrants  at a price that is less than the  then-current
market  price.  Issuances  at less than  market  price pose a risk to  investors
because these issuances may drive down the market price of our common stock.

REDEMPTION  OF SERIES B PREFERRED  STOCK:  If the Series B  stockholders  redeem
their  shares of Series B  preferred  stock,  this could  divert  funds from our
operations  and  result  in  slower  growth  for  our  company.   The  Series  B
stockholders  may elect to redeem  their  Series B preferred  stock at a premium
upon the occurrence of the following events:

                                       5
<PAGE>



  . our consolidation, merger or other business combination with another entity;

  . the sale or transfer of all or substantially all of our assets;

  . a purchase,  tender or exchange offer made to and accepted by the holders of
more than 50% of the outstanding shares of our common stock;

  .  our failure to maintain the effectiveness of a registration statement;

  .  the delisting of our common stock for a period of five consecutive days; or

  . our material breach of any  representations,  warranties or covenants in the
securities purchase agreement or any related documents.

The  premium  payable  to the  Series  B  stockholders  is  equal to 115% of (a)
$10,000,  plus (b) any stock dividends that have accrued but have not been paid,
plus (c)  default  interest,  payable  at 15% per year,  for  dividends  that we
elected  to pay in cash but failed to pay on a timely  basis.  If we do not have
sufficient  funds  to pay  this  premium,  we may need to  borrow  the  funds on
unfavorable terms,  which would divert funds that could be used elsewhere.  This
would result in slower growth of our company and lower than expected earnings.

ADVERSE  EFFECT OF SHARES  ELIGIBLE FOR FUTURE SALE:  Future sales of our common
stock by existing stockholders pursuant to Rule 144 under the Securities Act, or
following the exercise of  outstanding  preferred  stock,  options and warrants,
including conversion of the Series B preferred stock and exercise of the related
warrants,  could  adversely  affect  the  market  price  of  our  common  stock.
Substantially  all of the  outstanding  shares of our  common  stock are  freely
tradable,  without  restriction or registration  under the Securities Act, other
than the  sales  volume  restrictions  of Rule 144  applicable  to  shares  held
beneficially  by persons who may be deemed to be  affiliates.  Our directors and
executive  officers  and their family  members are not under  lockup  letters or
other forms of  restriction  on the sale of their common stock.  The issuance of
any or all of these  additional  shares upon  exercise of options or warrants or
conversion  of  preferred  stock will  dilute the  voting  power of our  current
stockholders on corporate  matters and, as a result,  may cause the market price
of our common stock to decrease.

PROTECTION OF PROPRIETARY  TREATMENT PROGRAM: Our ability to effectively compete
depends  on   protection  of  our   proprietary   treatment   protocol   through
confidentiality  and  non-compete  agreements.  We have  developed this protocol
through our experiences to date in the clinical,  billing and marketing areas of
incontinence  treatment.  Others may independently develop the same or a similar
program or otherwise  obtain access to this  protocol  from former  employees or
former MedCare physicians.

In addition,  third  parties  have  published  clinical  studies  regarding  the
benefits of  biofeedback  treatment of  incontinence.  Although this is only one
component of our treatment  protocol,  others may utilize these clinical studies
to begin their own incontinence programs.

We  currently  protect  the  treatment  protocol  from  duplication  through our
confidentiality  and  non-compete  agreements  signed  with  our  employees  and
customers.  We cannot  ensure  that these  agreements  will  provide  meaningful
protection  for our  treatment  protocol  in the  event of their  expiration  or
unauthorized  use  or  disclosure.  If  our  treatment  protocol  became  widely
duplicated, larger, better-capitalized companies could instantly compete with us
in the incontinence treatment market.

GOVERNMENT REGULATION:  Unfavorable  governmental regulation in the future could
threaten our viability.  Our business is heavily regulated.  The MedCare Program
is subject to regulation under the Federal Anti-Kickback Statute and the Federal
Self- Referral Statute. In addition, legislators

                                       6
<PAGE>



continually enact new legislation. The process of obtaining regulatory approvals
can be lengthy and expensive,  and the issuance of these approvals is uncertain.
We believe that we are in  compliance  with all currently  existing  regulations
that  apply to us. If the  federal  or state  governments  were to enact any new
regulations,  we may not be able to obtain the  necessary  approvals on a timely
basis, or at all. Should  legislators  enact new legislation that is unfavorable
to our business, this could, among other things, result in fines, suspensions of
regulatory approvals, operating restrictions and criminal prosecution. We cannot
predict  whether any new reforms will be enacted,  the types of  approvals  that
will be required, or the effect of any enacted reform on our business.

COMPETITION: If we do not continually develop the MedCare Program, and any other
future  business  opportunities,  our  services  could become  uncompetitive  or
obsolete.  Healthcare is a rapidly  evolving field in which other  companies may
have greater  financial and research and  development  resources than we do. The
MedCare Program competes directly with a number of small  incontinence  clinics,
offered by doctors,  hospitals or  therapists,  that use a  combination  of non-
invasive  alternative   treatment  options  for  urinary   incontinence.   Other
alternative  treatments  for urinary  incontinence  are  available to consumers,
including  absorbent  products  and  diapers,  surgery,   indwelling  catheters,
implanting devices,  injectable materials,  electrical  stimulation,  mechanical
devices and drugs.

COMPETITIVE  TREATMENT  OPTIONS FOR  INCONTINENCE:  To the best of the Company's
knowledge,  the only direct  competitors to the MedCare  Program are a number of
small incontinence clinics, or ancillary programs, offered by doctors, hospitals
or  therapists,  scattered  across  North  America  that  use a  combination  of
currently  available   non-invasive   alternative  treatment  options  to  treat
patients.

INTELLECTUAL  PROPERTY AND OTHER  PROPRIETARY  RIGHTS:  The Company's ability to
compete and expand  effectively will depend,  in part, on its ability to develop
and maintain certain  proprietary  aspects of its treatment  program for bladder
and bowel incontinence.  The Company relies on an unpatented treatment protocol,
and there can be no  assurances  that others may not  independently  develop the
same or similar program or otherwise  obtain access to the Company's  unpatented
protocols. There can be no assurance that any confidentiality agreements between
the  Company  and its  employees  will  provide  meaningful  protection  for the
Company's  trade  secrets,  know-how  or other  information  in the event of any
unauthorized  use or  disclosure  of  such  trade  secrets,  know-how  or  other
proprietary information. While certain proprietary aspects of MedCare's clinical
and business  protocols  remain an important  part of the business,  the Company
believes its long-term success as a business will depend primarily upon its high
quality  clinical  outcomes  and  service  and its success in seeking a suitable
joint venture partner to further market the MedCare Program.

Environmental Matters
---------------------

The  Company   believes  it  conducts  its  business  in  compliance   with  all
environmental laws presently  applicable to its facilities.  To date, there have
been no expenses incurred by the Company related to environmental issues.

Item 2. Properties
------------------

On March 16th,  2001,  the Company  notified  it  landlord of its  intention  to
terminate its lease at 1515 West 22nd Street,  Suite 1210, Oak Brook,  Illinois,
60523. The Company's  principal office is now located at 1628 West First Avenue,
Suite 216,  Vancouver,  British  Columbia,  Canada,  V6J 1G1. These premises are
owned by Tajinder Chohan and Kundan S. Rayat, the wife and father, respectively,
of the Company's Chairman. At present, the Company pays no rent.


                                       7
<PAGE>


Item 3. Legal Proceedings
-------------------------

The Company is not involved in any pending legal  proceedings other than various
claims and  lawsuits  arising in the normal  course of business.  The  Company's
management  does not  believe  that any such  claims  or  lawsuits  will  have a
material adverse effect on its financial statements.

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

There were no matters  submitted to a vote of the security holders in the fourth
quarter of 2000.

                                    PART II

Item 5. Market for the Registrant's Common Equity
-------------------------------------------------
        and Related Stockholder Matters.
        --------------------------------

(a) Market Information

The Company's  Common Stock is listed on the OTC Bulletin Board under the symbol
"MCAR".  The  following  table sets  forth the high and low sale  prices for the
periods indicated:

<TABLE>
<CAPTION>

                                                     High              Low
                                                     ----              ---
<S>                                                  <C>               <C>
First Quarter 1999                                   $  7.25           $  5.56
Second Quarter 1999                                  $  6.56           $  4.69
Third Quarter 1999                                   $  3.88           $  2.50
Fourth Quarter 1999                                  $  2.88           $  1.66
First Quarter 2000                                   $  2.25           $  1.66
Second Quarter 2000                                  $  1.06           $  0.75
Third Quarter 2000                                   $  0.50           $  0.38
Fourth Quarter 2000                                  $  0.14           $  0.06

</TABLE>


(b) Holders

As of March 21, 2001, there were approximately 267 stockholders of record of the
Company's Common Stock.

(c) Dividend Policy

The  Company  has never  paid a  dividend  and does not  anticipate  paying  any
dividends in the  foreseeable  future.  It is the present policy of the Board of
Directors to retain the Company's  earnings,  if any, for the development of the
Company's business.

Item 6. Management's Discussion and Analysis of Financial Condition
-------------------------------------------------------------------
        and Results of Operations
        -------------------------

The  following  discussion  should  be read in  conjunction  with the  financial
statements and notes thereto included in Item 7 of this Form 10-KSB.  Except for
the  historical  information  contained  herein,  the  discussion in this Annual
Report on Form 10-KSB contains certain  forward-looking  statements that involve
risk and uncertainties,  such as statements of the Company's plans,  objectives,
expectations  and  intentions.  The cautionary  statements made in this document
should be read as being  applicable  to all related  forward-looking  statements
wherever they appear in this document. The Company's actual results could differ
materially  from those  discussed  here.  Factors  that could cause  differences
include  those  discussed  in "Risk  Factors",  as well as  discussed  elsewhere
herein.

                                       8
<PAGE>


Overview
--------

MedCare  Technologies,   Inc.  is  the  developer  of  the  MedCare  Program,  a
non-pharmaceutical,  non-invasive  treatment program for patients suffering from
urinary incontinence and other pelvic disorders,  including pelvic pain, chronic
constipation, fecal incontinence and disordered defecation.

Due to the lack of significant  revenues and high operating cost associated with
supporting its various  physician  office and hospital based program sites,  the
Company  has  suffered  large  operating  losses.  In order to reduce  operating
expenses, the Company terminated  substantially all of its MedCare Program sites
in March,  2001. The Company is currently  searching for potential joint venture
partners  that have  existing  operating  infrastructures  to which the  MedCare
Program  can  be  added  as  an  ancillary   service   with  minimal   overhead.
Additionally,  MedCare  plans to develop  additional  revenue  streams  from the
Company's current intellectual property base.

Results of Operations
---------------------

Revenues. During 2000, the Company generated revenues of $700,053, a decrease of
58.5% over sales of  $1,687,780  in 1999.  This  decrease is a direct  result of
lower  operating  revenues  realized from the Company's  various MedCare Program
sites.

General  and  Administrative   Expenses.   During  2000,  the  Company  incurred
$4,474,547 in general and administrative  expenses,  a decrease of 10% over 1999
expenses of $4,969,962.  The decrease is primarily  attributable to lower salary
and operating  expenses  related to the Company's  sales and marketing  efforts.
During  December  2000 and 1999,  the Company  recorded a charge of $253,131 and
$89,978,  respectively,  for damaged and obsolete  fixed  assets  related to the
unprofitable MedCare sites that were closed,  including the fixed assets related
to its offices that were closed in December 2000.

Interest  Income.  Interest  income was $83,629 and $157,405 for the years ended
December 31, 2000, and 1999, respectively. Interest earned in the future will be
dependent on Company funding cycles and prevailing interest rates.

Provision for Income Taxes.  As of December 31, 2000, the Company's  accumulated
deficit was $13,307,513 and as a result,  there has been no provision for income
taxes to date.

Preferred Stock Dividends.  Preferred stock dividends were $110,245 and $964,987
for the years  ended  December  31,  2000 and  1999,  respectively.  This  88.6%
decrease is due to a lower number of Series B preferred stock outstanding during
the year.

Liquidity and Capital Resources
-------------------------------

At December 31, 2000,  the Company had a cash balance of $34,856,  compared to a
cash balance of $3,218,228 at December 31, 1999.

During 2000, the Company used  $3,159,868 of net cash from operating  activities
as compared to $3,291,406  of net cash used in 1999.  Net cash used in investing
activities was $23,504 for 2000, compared to net cash used of $218,331 for 1999.
The  decrease  in the net cash used in  investing  activities  was due mainly to
purchasing fewer and less expensive equipment for the MedCare Program offices in
2000 versus 1999.

Net cash provided by financing activities was $0 for 2000 compared to $3,901,879
for 1999.  The Company has financed its  operations  primarily  through  private
placements of Common Shares, Preferred Shares and the exercise of stock options.

                                       9
<PAGE>



The Company's future funding requirements will depend on numerous factors. These
factors  include  the  Company's  ability to search out and enter into  suitable
joint venture partnerships in order to further market the MedCare Program,  seek
out additional revenue streams from the Company's current intellectual  property
base, to recruit and train  qualified  management  personnel,  and the Company's
ability to compete  against other,  better  capitalized  corporations  who offer
similar services.

The Company expects to raise  additional  funds through private or public equity
investment  in order to expand the range and scope of its  business  operations.
The  Company  will seek  access to  private  or  public  equity  but there is no
assurance  that such  additional  funds  will be  available  for the  Company to
finance its operations on acceptable terms, if at all.

                                       10
<PAGE>





Item 7. Financial Statements
----------------------------

                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIAIRES
                                  AUDIT REPORT

                           DECEMBER 31, 2000 AND 1999




                                       11
<PAGE>



                                    CONTENTS

INDEPENDENT AUDITORS' REPORT                                                  13

CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2000 AND 1999                     14

CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999                                                    15

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
YEARS ENDED December 31, 2000 AND 1999                                        16

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999                                                    17

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                             18-27




<PAGE>







                          INDEPENDENT AUDITORS' REPORT

To the Shareholders of
MedCare Technologies, Inc.

We have audited the consolidated  balance sheets of MedCare  Technologies,  Inc.
and Subsidiaries, (a Delaware corporation), as of December 31, 2000 and 1999 and
the related consolidated statements of operations, stockholders' equity and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  consolidated   financial  position  of  MedCare
Technologies,  Inc.  and  Subsidiaries  at December  31, 2000 and 1999,  and the
consolidated  results of their operations and their cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the Company has  incurred  significant  recurring  net losses since
inception  and has a negative  working  capital.  The ability to meet its future
financing requirements and the success of future operations cannot be determined
at this  time.  These  factors  raise  substantial  doubt  about its  ability to
continue  as a going  concern.  These  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Clancy and Co. P.L.L.C.
---------------------------
Clancy and Co. P.L.L.C.

Phoenix, Arizona
March 16, 2001

                                       13
<PAGE>





                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 2000 and 1999

<TABLE>
<CAPTION>


                                                         2000         1999
                                                      -----------  -----------
<S>                                                   <C>          <C>

                       ASSETS

Current Assets

  Cash and Cash Equivalents.......................... $    34,856  $ 3,218,228
  Accounts Receivable, net of allowance of $82,000
   at December 31, 1999..............................      17,343      201,700
  Prepaid Expenses...................................       8,346      162,140
  Stock Subscription Receivable (Note 3)                  101,329            0
                                                      -----------  -----------
    Total Current Assets.............................     161,874    3,582,068
Property and Equipment, net (Note 4).................     153,428      312,198
Intangible Assets--the MedCare Program, net of
 Accumulated amortization of $136 (Note 5)..........            0          864
                                                      -----------  -----------
    Total Assets..................................... $   315,302  $ 3,895,130
                                                      ===========  ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

  Accounts Payable and Accrued Liabilities........... $   139,798  $   187,237
  Capital Lease Obligation, Current Portion (Note 6)       84,550            0
  Deferred Revenue...................................           0       18,646
                                                      -----------  -----------
    Total Current Liabilities........................     224,348      205,883

Long-term Liablities

  Capital Lease Obligation, Noncurrent Portion (Note 6)    79,071            0
                                                        -----------  -----------
Total Liabilities                                         303,419      205,883

Stockholders' Equity

Preferred Stock (authorized  1,000,000  shares):
   Convertible Series B, $.25 Par Value, Issued
   and outstanding, 81.5 and 178 at December 31,
   2000 and 1999, respectively, at redemption
   value (Note 10)..............................        1,029,578    2,122,620

Common Stock--$0.001 Par Value, Authorized
   100,000,000;  Issued and outstanding,
   11,564,566 and 9,911,313 shares at December 31,
   2000 and 1999, respectively....................         11,565        9,911

Warrants.............................................     117,830       94,000
Additional Paid in Capital...........................  12,160,423   11,079,364
Accumulated Deficit.................................  (13,307,513)  (9,616,648)
                                                       -----------  -----------
    Total Stockholders' Equity.......................      11,883    3,689,247
                                                       -----------  -----------
    Total Liabilities and Equity....................  $   315,302  $ 3,895,130
                                                       ===========  ===========
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                       14
<PAGE>


                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2000 and 1999



<TABLE>
<CAPTION>
                                                         Year         Year
                                                         Ended        Ended
                                                       12/31/00     12/31/99
                                                      -----------  -----------
<S>                                                   <C>          <C>
Revenues............................................. $   700,053  $ 1,687,780

General and Administrative Expenses..................   2,531,718    4,664,848
                                                      -----------  -----------
Operating Loss.......................................  (1,831,665)  (2,977,068)

Interest Income......................................      83,629      157,405
                                                      -----------  -----------
Loss from Continuing Operations......................  (1,748,036)  (2,819,663)

Loss on Discontinued Operations, net of tax (Note 12)  (1,942,829)    (305,114)
                                                       ----------     --------
Net Loss.............................................  (3,690,865)  (3,124,777)

Less: Preferred Stock Deemed Dividends...............    (110,245)   ( 964,987)
                                                      -----------  -----------
Net Loss Available to Common Stockholders............ $(3,801,110) $(4,089,764)
                                                      ===========  ===========
Loss Per Share Attributable to Common Stockholders--
 Loss from Continuing Operations....................  $     (0.18) $     (0.47)
 Loss from Discontinued Operations..................  $     (0.18) $     (0.04)
                                                      -----------  -----------
 Total Basic and Diluted............................  $     (0.36) $     (0.51)
                                                      ===========  ===========

Weighted Average of Common Shares Outstanding--
  Basic and Diluted..................................  10,586,935    8,036,245

</TABLE>








   The accompanying notes are an integral part of these financial statements.

                                       15
<PAGE>




                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>

                       Series A              Series B
                    Preferred Stock      Preferred Stock      Common Stock   Additional
                    -----------------   ------------------  ----------------   Paid In             Accumulated
                    Shares    Amount    Shares   Amount      Shares   Amount   Capital    Warrants   Deficit       Total
                    -------   -------   ------ -----------  --------- ------ -----------  -------- -----------  -----------
<S>                 <C>       <C>       <C>    <C>          <C>       <C>    <C>          <C>      <C>          <C>
Balance, December
 31, 1998.........        50   $    12      0  $         0  7,825,105 $7,825 $ 9,396,179  $     0  $(6,491,871) $ 2,912,145
Issuance of Series
 B Preferred
 Stock--net of
 issuance costs...                        400    3,883,879                                                        3,883,879
Issuance of Common
 Stock for
 Series A
 Conversions......       (50)      (12)                       491,111    491        (479)
Issuance of Common
 Stock for
 Series B
 Conversions......                       (222)  (2,632,246) 1,589,097   1,589   2,630,657
Issuance of Common
 Stock Under Stock
 Option Plans.....                                              6,000      6      17,994                             18,000
Vesting of
 Warrants Issued
 With Series B
 Preferred Stock..                                 (94,000)                                 94,000
Preferred Deemed
 Dividends........                                 964,987                      (964,987)
Net Loss for the
 Year Ended
 December 31,
 1999.............                                                                                  (3,124,777)  (3,124,777)
                     -------   -------   ----  -----------  --------- ------ -----------   -------  -----------  -----------
                           0         0    178   2,122,620   9,911,313   9,911 11,079,364    94,000  (9,616,648)   3,689,247
Issuance of Common
  Stock for
  Series B
  Conversions                           (96.5) (1,179,457)  1,653,253   1,654  1,177,804
Preferred Deemed
  Dividends                                       110,245                       (110,245)
Vesting of
  Warrants Issued
  With Series B
  Preferred Stock                                 (23,830)                                  23,830
Compensation Cost                                                                 13,500                             13,500

Net Loss for the
  Year Ended
  December 31, 2000                                                                                 (3,690,865)  (3,690,865)
                     -------   -------   ----  -----------  --------- ------ -----------  -------  -----------  -----------
                           0         0   81.5 $ 1,029,578  11,564,566 $11,565 $12,160,423 $117,830 $(13,307,513)  $  11,883
                      =======   =======  ====  ===========  ========= ====== ===========  =======  ===========  ===========

</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       16
<PAGE>





                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2000 and 1999


<TABLE>
<CAPTION>
                                                        For the      For the
                                                      Year Ended   Year Ended
                                                       12/31/00     12/31/99
                                                      -----------  -----------
<S>                                                   <C>          <C>
Cash Flows from Operating Activities--Net Loss....... $(3,690,865) $(3,124,777)
  Adjustments to Reconcile Net Loss to Net Cash Used
   by Operating Activities:
    Depreciation and Amortization....................      92,831       99,853
    Excess and Obsolete Equipment Write-off..........     253,131       89,978
    Write off Intangible Asset .................. ..          796            0
    Nonemployee Stock Compensation Expense..........       13,500            0
    (Increase) Decrease in Accounts Receivable.......     184,357       69,540
    (Increase) Decrease in Prepaid Expenses..........     153,793     (162,140)
    (Increase) Decreases in Stock Subscription Receivable(101,329)           0
     Increase (Decrease) in Accounts Payable and

     Accrued Liabilities.............................     (47,436)    (282,506)
     Increase (Decrease) in Deferred Revenue.........     (18,646)      18,646
                                                      -----------  -----------
      Total Adjustments..............................     530,997     (166,629)
Net Cash Used by Operating Activities................  (3,159,868)  (3,291,406)


Cash Flow Used in Investing Activities:
  Purchase of Property & Equipment...................     (23,504)    (218,331)

Cash Flow from Financing Activity

  Proceeds from sale of common stock.................           0       18,000
  Proceeds from Series B Preferred Stock Issuance,
   net of issuance costs.............................           0    3,883,879
                                                      -----------  -----------
Net Cash Provided by (Used In) Financing Activities..           0    3,901,879
                                                      -----------  -----------
Increase (Decrease) in Cash and Cash Equivalents.....  (3,183,372)     392,142
Cash and Cash Equivalents at Beginning of Period.....   3,218,228    2,826,086
                                                      -----------  -----------
Cash and Cash Equivalents at End of Period........... $    34,856  $ 3,218,228
                                                      ===========  ===========
Supplemental Information
  Cash Paid for:

    Interest......................................... $         0  $         0
    Income taxes..................................... $         0  $         0
Non-Cash Items--Preferred Deemed Dividends........... $   110,245  $   964,987
Fixed Assets Acquired Under Capital Lease............ $   169,432  $         0

</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       17
<PAGE>


                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

Note 1--Organization and Operations
-----------------------------------

MedCare  Technologies,  Inc.  (the  Company),  a  Delaware  Corporation,  has an
authorized  capital of 101,000,000 shares of which 100,000,000 shares are common
stock with a par value of $.001 and 1,000,000  shares are preferred stock with a
par value of $.25 per share.

The Company developed The MedCare Program, a nonsurgical,  nondrug,  noninvasive
and cost-effective  treatment program for urinary and rectal  incontinence,  and
other pelvic disorders,  utilizing behavioral and biofeedback techniques such as
electromyography,  designed  to activate  and  strengthen  the  various  sensory
response mechanisms that maintain bladder and bowel control.

The Company engages in a Program Agreement with each Site, which is defined as a
hospital,  physician or group of physicians,  involved on a regular basis in the
diagnosis,  evaluation and treatment of urinary and rectal incontinence, as well
as other pelvic  dysfunction.  The  agreements  have various  expiration  dates,
typically run for a period of one to three years, and may be terminated upon the
occurrence of certain  conditions as set forth in the agreement.  Each Site also
agrees to sign a  confidentiality  and  noncompetition  agreement as a condition
precedent to the performance by the Company of its obligations.

During the second quarter of 1999, the Company introduced a franchise version of
the MedCare  Program to hospitals  and other large  healthcare  providers  which
requires  each new site to pay an  upfront  subscription  fee,  the  clinician's
salary and a set monthly management fee. Although the sales cycle is longer, the
franchise  version  allows  MedCare  to reach a  greater  number  of  healthcare
providers. Existing offices that were unprofitable were closed.

In  October  1999,  the  Company   launched  its  new  web  site,   RxSheets.com
(www.rxsheets.com),   which  is  directed   exclusively  at  the  physician  and
pharmaceutical  marketplace.  The  Company  believes  that  RxSheets.com  offers
information  and  services  that  will  enable  physicians  and   pharmaceutical
companies  to  more   efficiently  and   effectively   manage  the  sampling  of
pharmaceutical  drugs.  In  addition,  the  Company  changed  the  name  of  its
wholly-owned subsidiary from Medcareonline.com to RxSheets.com.

As of the date of issuance of these  financial  statements,  the Company  closed
down all of its Medcare sites and its offices in Oak Brook, Illinois due to lack
of  significant  revenues  and high  operating  costs.  The Company is currently
seeking a joint venture partner that have existing operating  infrastructures to
which the MedCare  program can be added as an  ancillary  service  with  minimal
overhead.

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles, which contemplates continuation of the
Company as a going  concern.  However,  the  Company has  sustained  substantial
operating losses in recent years. In addition,  the Company has used substantial
amounts  of working  capital  in its  operations  and  currently  has a negative
working capital.

In view of these  matters,  realization  of a major portion of the assets in the
accompanying  balance  sheet  is  dependent  upon  continued  operations  of the
Company,  which in turn is  dependent  upon the  Company's  ability  to meet its
financing  requirements,  and the success of its future operations.  The Company
expects to incur losses as it expands its businesses and will require additional
funding  during 2000.  The Company is currently  seeking  additional  equity and
expects to raise funds through a private or public equity investment in order to
support existing operations and expand the range and scope of its business.  The
Company  will seek access to private or public  equity but there is no assurance
that such  additional  funds will be  available  for the  Company on  acceptable
terms, if at all. Management believes that actions presently taken to revise the
Company's operating and financial  requirements  provide the opportunity for the
Company to continue as a going concern. 6

                                       18
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)

Note 2--Significant Accounting Policies
---------------------------------------

Cash and Cash Equivalents
-------------------------

The Company considers all highly liquid financial instruments with a maturity of
three months or less when acquired to be cash and cash equivalents.

Concentration of Credit Risk
----------------------------

The Company  maintains U.S.  Dollar cash balances in Canadian banks that are not
insured

Principles of Consolidation
---------------------------

The consolidated  financial  statements  include the accounts of the Company and
its   wholly-owned   subsidiaries,    MedCare   Technologies   Corporation   and
RxSheets.com,  Inc.  All  intercompany  transactions  have  been  eliminated  in
consolidation.

Property and Equipment
----------------------

Property  and  equipment  is  stated  at  cost  and  is  depreciated  under  the
straight-line  method over their  estimated  useful lives  ranging from three to
seven years.

Revenue Recognition
-------------------

The Company offered two versions of the MedCare Program:

  Program  Management--Under  program management,  the Company agrees to provide
equipment,  personnel and administrative services to the Site in connection with
the Site's  establishment and operation of the Program.  Each Site agrees to pay
the Company a management  fee for each patient  visit to the Site during which a
patient receives services under the Program. Revenues are recognized as patients
receive services.

  Program  Franchise--Under program franchise, the Company agrees to provide the
equipment,  technology  and  training  to start the  MedCare  Program as well as
ongoing support through its clinical and billing  divisions.  The Site agrees to
the pay the Company an initial subscription fee and a monthly consulting fee. In
accordance  with  Statement of Financial  Accounting  Standards  ("SFAS") No. 45
"Accounting for Franchise Fee Revenue", the initial subscription fee is deferred
and recognized upon  commencement of operations.  The monthly  consulting fee is
recognized when earned.

Advertising Costs
-----------------

Advertising  costs are expensed as incurred.  Total advertising costs charged to
operations for 2000 and 1999 was $203,204 and $294,859, respectively.

Use of Estimates
----------------

Management uses estimates and assumptions in preparing  financial  statements in
accordance with generally accepted  accounting  principles.  Those estimates and
assumptions  affect  the  reported  amounts  of  assets  and  liabilities,   the
disclosure of contingent  assets and liabilities,  and the reported revenues and
expenses.  Actual  results  could vary from the  estimates  that were assumed in
preparing the financial statements.



                                       19
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Income Taxes
------------

The Company  accounts  for income  taxes under the  provisions  of SFAS No. 109,
"Accounting for Income Taxes." Under SFAS No. 109,  deferred tax liabilities and
assets are determined  based on the difference  between the financial  statement
and tax bases of assets and liabilities, using enacted tax rates.

Earnings per Share
------------------

Basic earnings or loss per share has been computed based on the weighted average
number of common shares outstanding. Diluted earnings or loss per share has been
computed  on the  weighted  average  number of  common  shares  outstanding  and
dilutive common stock  equivalents.  All loss per share amounts in the financial
statements are basic loss per share,  as defined by SFAS No. 128,  "Earnings Per
Share." Convertible  securities such as outstanding warrants,  stock options and
common stock issuable upon conversion of preferred stock, that could potentially
dilute  basic  earnings  per  share  in  the  future  are  not  included  in the
computation   of  diluted   earnings  per  share  because  to  do  so  would  be
antidilutive.  Diluted  loss per share does not differ from basic loss per share
for all periods  presented.All  per share and per share information are adjusted
retroactively for stock splits and changes in par value.

Stock-Based Compensation
------------------------

The  Company  accounts  for  stock-based  compensation  to  employees  using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Compensation cost for stock options,
if any, is measured as the excess of the quoted  market  price of the  Company's
stock at the date of grant over the amount an  employee  must pay to acquire the
stock.

SFAS No. 123, "Accounting for Stock-Based  Compensation," established accounting
and disclosure  requirements using a  fair-value-based  method of accounting for
stock-based  employee  compensation  plans. The Company has elected to remain on
its  current  method of  accounting  as  described  above,  and has  adopted the
disclosure-only  requirements  of SFAS  No.  123 for  stock  options  issued  to
employees.

Presentation
------------

Certain  accounts  from prior years have been  reclassified  to conform with the
current year's presentation.

Pending Accounting Pronouncements
---------------------------------

It is anticipated that current pending accounting  pronouncements  will not have
an adverse impact on the financial statements of the Company.

Note 3--Preferred Series B Stock Subscription Receivable
--------------------------------------------------------

On November 29, 2000, the Company  repurchased all of the  outstanding  Series B
Convertible   Preferred   Stock  (81.5  shares)  from  the  Series  B  Preferred
Shareholders  at $1,366  per share,  or  $111,329.  During  December  2000,  the
Chairman  of the Company  bought  these same  shares and  related  warrants  for
$111,329 and 800,000 restricted common shares at $0.05 per share, or $38,671. As
of December 31, 2000, the Company  received  $10,000 in proceeds,  and as of the
date of issuance of these financial  statements the balance of the proceeds were
received in full. The transaction was approved by the Board of Directors.

The Company also  granted the  Chairman  4,000,000  share  purchase  warrants to
acquire  common shares of the Company at $0.05 per share,  expiring  January 10,
2005.

Note 4--Property and Equipment
------------------------------

Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
                                                                2000                        1999
                                                                ----                        ----
<S>                                                         <C>                            <C>
     Office Equipment...................................... $       0                      $  11,930
     Computer Equipment....................................   147,006                        174,562
     Medical Equipment.....................................         0                         99,219
     Computer Software.....................................    22,426                        130,252
     Building Improvements.................................         0                         11,665
     Furniture.............................................         0                          3,705
                                                             ---------                     ---------
       Total...............................................   169,432                        431,333
     Less Accumulated Depreciation.........................   (16,004)                      (119,135)
                                                            ---------                       ---------
     Net Book Value........................................ $ 152,428                      $ 312,198
                                                            =========                       =========
</TABLE>

                                       20
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Depreciation  charged to expense  during the years ended  December  31, 2000 and
1999 was $92,763 and $99,785,  respectively.  During December 2000 and 1999, the
Company recorded a charge of $253,131 and $89,978, respectively, for damaged and
obsolete  fixed  assets  related  to the  unprofitable  MedCare  sites that were
closed,  including  the fixed assets  related to its offices that were closed in
December 2000.

Property and equipment at December 31, 2000  consists of computer  equipment and
software  acquired  under  capital  lease,  which  was  leased  on behalf of the
Company's subsidiary  RxSheets.com,  Inc. On November 10, 2000, the Company sold
this computer  equipment and software to WGC Enterprises,  an investment  group.
The purchase price was based on the future  revenues  generated by the acquiring
entity over the twenty-four month lease period.  The investment group was unable
to raise the  appropriate  funding to continue the  operations of RxSheets.  The
Company  has since  closed its  offices and is  currently  negotiating  with the
lessor to get out of the lease and return the equipment.  The equipment  remains
idle in its vacant offices in Oak Brook,  Illinois.  No depreciation expense was
taken during the fourth quarter.

Note 5--Long-lived Assets--The MedCare Program
----------------------------------------------

On August 14, 1995, the Company acquired the rights to The MedCare Program,
a urinary incontinence  procedure in exchange for 2,000,000 shares of its common
stock.  The  transaction  was accounted  for in accordance  with the process for
valuation  of  intangible  assets  as  described  in  Statement  No.  17 of  the
Accounting  Principles  Board.  The Company  intends to amortize the cost of the
system  over 15  years,  based  on  management's  estimated  useful  life of the
protocol,  beginning  with the  first  year in  which  commercial  sales  occur.
Management  reassesses annually the estimated useful life.  Amortization expense
charged to  operations  during the years ended  December 31, 2000 and 1999,  was
$68. The remaining  unamortized  portion was written off in December 2000 due to
the Company closing its unprofitable Medcare sites.

Note 6--Commitments
-------------------

Operating  Lease  - The  Company  leases  office  space  under  a  noncancelable
operating  lease  agreement which expires in June 2003. The Company has a second
office  located in  Vancouver,  Canada,  which is owned by one of the  Company's
directors,  and is leased to the  Company for $2,000 per month.  Rental  expense
charged to  operations  during the years  ended  December  31, 2000 and 1999 was
approximately $72,000 and $92,000, respectively.

Future minimum payments under noncancelable operating lease is as follows:

        2001............................................................ $65,650
        2002............................................................ $67,103
        2003............................................................ $ 5,602


Capital Lease - On May 17, 2000,  the Company  entered into a twenty-four  month
leasing  arrangement  for the purchase of computer  equipment and software.  The
lease term began after the delivery and  installation of the computer  equipment
which occurred in September 2000. The lease agreement required a down payment of
15% of the total purchase at the signing of the lease and defers any payment for
the first six  months.  At the end of the  twenty-four  month  lease  term,  the
Company can purchase the  equipment  for $1. The Company has recorded this lease
as a capital  lease in the  financial  statements  and  included in property and
equipment is computer hardware of $147,006 and computer software of $22,426 less
accumulated depreciation of $16,004 for a net book value of $152,428.

                                       21
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)

Total                                                         200,596
Less amount representing interest                             (36,975)
                                                              -------
Present Value of Minimum Lease Payments                   $   163,621
                                                              =======
Minimum annual rentals for the next two years are:(2000:$84,550; 2001:$79,071).


Note 7--Stock Options
---------------------

The Company has five stock  option  plans that provide for the granting of stock
options to officers and key  employees.  The  objectives  of these plans include
attracting   and  retaining  the  best   personnel,   providing  for  additional
performance  incentives,  and  promoting the success of the Company by providing
employees the opportunity to acquire common stock. Options outstanding under the
Company's  five stock  option plans have been granted at prices which are either
equal to or above the market  value of the stock on the date of grant and expire
at various dates after the grant date.

The  status  of the  Company's  stock  option  plans is  summarized  below as of
December 31:

<TABLE>
<CAPTION>
                                                         Number of    Option
                                                          Shares       Price

                                                         ---------  -----------
<S>                                                      <C>        <C>
     Options Outstanding at December 31, 1998........... 1,794,000  $3.00-$9.25
     Exercised..........................................    (6,000)        3.00
     Granted............................................   816,000   3.00- 6.50
     Forfeited..........................................  (293,000)  4.50- 9.25
                                                         ---------  -----------
     Options Outstanding at December 31, 1999........... 2,311,000   3.00- 9.25
     Granted............................................ 1,230,000   0.75- 2.28
     Forfeited..........................................(3,451,000)  0.75- 9.25
                                                        ---------   ----------
     Options Outstanding at December 31, 2000           90,000      $0.75-$9.00
                                                        =========   ===========
</TABLE>


Had compensation expense for the Company's  stock-based  compensation plans been
determined  under  SFAS No.  123,  based on the fair  market  value at the grant
dates,  the  Company's pro forma net loss and pro forma net loss per share would
have been reflected as follows:

<TABLE>
<CAPTION>
                                                         2000        1999
                                                         ----------  ----------
<S>                                                      <C>         <C>
     Net Loss
       As reported...................................... $3,801,110  $4,089,764
       Pro forma........................................ $3,860,164  $4,688,123
     Net Loss Per Share
       As reported...................................... $    (0.36) $    (0.51)
       Pro forma........................................ $    (0.36) $    (0.58)
</TABLE>

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions  used for those  options  granted  in 2000 and  1999,  respectively:
dividend yield of 0%,  expected  volatility of 92% and 65%,  risk-free  interest
rates of 5% and 6.5%, and expected lives of 4 years.

                                       22
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)

Stock options outstanding and exercisable on December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                                        Weighted
                                                        Weighted        Average
     Range of                                Shares     Average         Remaining
     Exercise Price                          Under      Exercise Price  Contractual
     per Share                               Option     per Share       Life in Years
     --------------                          ---------  --------------  -------------
<S>                                          <C>        <C>             <C>
     Outstanding:
       $0.75-$2.28   ....................    40,000     $1.89           2.8
       $6.50 to $9.00....................    50,000     $7.33           2.1
                                            -------
                                             90,000

                                            =======
     Exercisable:
       $0.75 to $2.28....................     7,500     $1.93           --
       $6.50 to $9.00....................    27,250     $7.19           --
                                             ------
                                             34,750
                                             ======
</TABLE>

Note 8--Stock Warrants
----------------------

In July 1997,  the Company  issued 300,000 shares of common stock at $6.00 each.
The issuance also included warrants to purchase an additional  300,000 shares of
common  stock at $6.00  each,  exercisable  until July 7, 2002.  In March  1998,
200,000  warrants to purchase shares of common stock were exercised at $6.00 per
share,  or  $1,200,000.  As of December  31, 2000 and 1999,  there were  100,000
warrants outstanding related to this issuance.

In July 1997, the Company,  pursuant to Regulation D, Rule 506,  issued Series A
Preferred  Stock  (see  Note 7) and  related  warrants.  This  offering  granted
warrants to purchase a number of shares of common stock of the Company  equal to
33 1/3% multiplied by the aggregate purchase price of the Subscriber's preferred
stock  outstanding  on each of nine,  twelve and fifteen  months  following  the
closing date of the offering,  exercisable  at $7.346 per share.  As of December
31,  2000 and 1999,  there were  208,251  warrants  outstanding  related to this
issuance.

In November  1998,  the Company  issued  through a Rule 506 Regulation D Private
Placement,  300,000  shares of  restricted  common stock at $5.00 per share,  or
$1,500,000, and granted 300,000 common stock warrants exercisable at $5.00 until
October 14, 2004. As of December 31, 1998 and 1999,  there were 300,000 warrants
outstanding related to this issuance.

In May 1999,  the Company,  pursuant to Regulation D, Rule 506,  issued Series B
Preferred Stock and related warrants to purchase shares of common stock. Subject
to the vesting schedule described below, each warrant entitles its holder to 200
shares of Common Stock for (i) each issued share of the Series B Preferred  held
on the  applicable  vesting  date and (ii) each share of the Series B  Preferred
converted  prior to the applicable  vesting date at the fixed  conversion  price
(see Note 9). The vesting  dates of the warrants are (i) September 15, 1999 (ii)
March 13, 2000 and (iii)  September 9, 2000.  The exercise price of each warrant
is 125% of the average of the closing bid prices of the  Company's  Common Stock
for the five consecutive trading days

immediately  preceding  the  applicable  vesting  date. As of December 31, 2000,
there were 29,600  warrants  that had vested at an  exercise  price of $2.64 per
share and  16,700  warrants  that had vested at an  exercise  price of $0.59 per
share. As of December 31, 1999, there were 80,000 warrants that had vested at an
exercise price of $3.6525 per share. The value of these warrants totaled $94,000
and resulted in the recording of additional  preferred  deemed dividends for the
Series B preferred stock.

                                       23
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Note 9--Preferred Stock--Series A
---------------------------------

On June 20, 1997, the Company began a Regulation D offering under Rule 506. This
offering was for the issuance of Series A Preferred Stock of the Company and was
sold for $10,000 per share. The offering closed on July 8, 1997, with $1,650,000
placed. The preferred stock was accompanied by warrants as described in Note 6.

The Series A Preferred  Shareholder  was  entitled  to  convert,  subject to the
Company's right of redemption,  if the conversion  price is less than the $7.346
at the time of receipt of a notice of conversion. The conversion price was equal
to the lower of $7.346 or a  discount,  ranging  from 10% to 20% over a 12 month
period beginning July 8, 1997, of the average Closing Bid Price for five trading
days  immediately  preceding  the date of  conversion  divided into the original
purchase price of the preferred stock, plus an 8% per annum accretion rate equal
to the period that has passed since the closing date.

During the year ended  December  31, 1998,  140 shares of  preferred  stock were
converted to 272,736  shares of common  stock and 25 shares of  preferred  stock
were issued to an investor at $10,000 per share in accordance  with the terms of
the original offering.

During the year ended  December  31, 1999,  the  remaining 50 shares of Series A
preferred stock were converted to 491,111 shares of common stock. As of December
31, 1999, there is no Series A preferred stock outstanding.

Note 10--Preferred Stock--Series B
----------------------------------

On May 18, 1999,  the Company,  pursuant to Regulation  D, Rule 506,  issued 400
shares of Series B preferred  stock (par value $0.25) (the "Series B Preferred")
and related warrants described below for $4,000,000 ($10,000 per share). The key
provisions  regarding  the issuance and  conversion of Series B Preferred are as
follows:

Dividends
---------

     The holders of the Series B  Preferred  shall be entitled to receive a 6.0%
annual dividend, which shall be cumulative and which shall accrue daily from the
date of issuance  and be payable,  at the option of the  Company,  either (i) in
shares of Common  Stock upon  conversion  of the Series B  Preferred  or (ii) in
cash.

Conversion by Holders
---------------------

     Subject  to the  limitations  discussed  below,  each share of the Series B
Preferred  shall be  convertible  into  shares  of  Common  Stock at a  variable
conversion rate (the "Conversion  Rate") equal to the Conversion Amount (defined
below) divided by the  applicable  Conversion  Price  (defined as follows).  The
"Conversion  Price" is the lesser of (i) the fixed  conversion price (the "Fixed
Conversion  Price"),  which is $7.80 or (ii) the variable  conversion price (the
"Variable  Conversion Price"). The Variable Conversion Price is the lower of (a)
the closing bid price on the day the holder  delivers the required notice of his
intention to convert to the Company or (b) the average of the 10 lowest  closing
bid prices in the 40 trading days immediately  preceding the date such notice is
given. The "Conversion  Amount" is defined as $10,000,  plus any stock dividends
that have accrued but have not been paid out, plus any default  interest  (equal
to 15%) for  dividends  which the  Company  has  elected  to pay in cash but has
failed to pay on a timely basis.  The above formula may or may not result in the
common  stock  being  issued at a discount to the current  market  price.  As of
December 31, 1999,  all of the  outstanding  Series B Preferred may be converted
into  common  stock  subject to certain  ownership  limitations  detailed in the
agreements.

Adjustment of Conversion Price
------------------------------

     The  Conversion  Price of the Series B  Preferred  is subject to  customary
anti- dilution  provisions which take effect upon such events as the issuance by
the  Company of Common  Stock,  options  or other  convertible  securities,  the
subdivision or combination of outstanding shares of Common Stock of the Company,
the  recapitalization,  merger or other  reorganization  of the Company,  or any
other  similar  events.  However,  no such  adjustment  will be made  unless the
adjustment  would result in a cumulative  increase or decrease of at least 1% in
the Conversion Price.

                                       24
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)

Mandatory Conversion
--------------------

     The shares of Series B  Preferred  mature five years after they are issued,
and any shares of the Series B  Preferred  left  outstanding  on the  applicable
maturity date are automatically converted into shares of Common Stock.

Redemption at the Option of Investors
-------------------------------------

     Each  outstanding  share of the Series B Preferred  is  redeemable,  at the
option of the Investors, in the event of any of the following transactions (each
a  "Major  Transaction"):  (i)  the  consolidation,  merger  or  other  business
combination  of the Company,  (ii) the sale or transfer of all or  substantially
all of the Company's  assets or (iii) a purchase,  tender or exchange offer made
to and  accepted  by the holders of more than 50% of the  outstanding  shares of
Common Stock,  provided that such Major  Transaction shall have occurred or have
been the subject of a public  announcement  during the period  beginning  on the
date of  issuance  and ending on the later of (a) the first  anniversary  of the
date of issuance and (b) the date which is 270 days after the effective  date of
the Registration  Statement relating to the applicable shares. In the event of a
Major  Transaction,  the redemption  price per share shall be the greater of (i)
115% of the  Liquidation  Amount (as defined  below) and (ii) the product of (a)
the applicable  Conversion Rate and (b) the closing bid price on the date of the
public  announcement of the event. The "Liquidation  Amount" is equal to $10,000
plus any  dividends  that have  accrued  but have not been  paid  out,  plus any
default  interest  (equal to 15% per annum) for dividends  which the Company has
elected to pay in cash but has failed to pay on a timely basis.

     In  addition,  in the  event  of the  occurrence  of  certain  events  (the
"Triggering Events"),  including the failure of the Registration Statement to be
declared effective within 180 days of the date of issuance, the delisting of the
Common Stock for a period of five  consecutive  days and the Company's breach of
any  representations,  warranties or covenants in the  Documents,  the Investors
have the  right to  require  the  Company  to redeem  all or a  portion  of such
Investor's Series B Preferred. The redemption price per share is the same as the
redemption price per share in the event of a Major Transaction.

Investor Call Option
--------------------

     For every (i) unconverted Series B Preferred share held by the investors on
May 18, 2000 and (ii) preferred  share converted at the Fixed  Conversion  Price
prior to May 18,  2000,  the  investors  have  the  right  to  subscribe  for an
additional  preferred  share  and  related  warrants  under  the same  terms and
conditions  of the  original  closing  (revised  to reflect the  Company's  then
current common stock market  price).  Each investor may exercise this right only
at such time when the closing  market  price of the  Company's  common  stock is
greater than the Fixed Conversion Price.

Accounting Treatment
--------------------

     The Company has accounted for these securities as redeemable securities and
accreted to the redemption  amount of 115% of the  Liquidation  Amount as of the
balance  sheet  date.  The  accretion   reduced  income   applicable  to  common
shareholders  and is disclosed  separately as preferred  deemed dividends on the
face of the income statement.  The Company has classified the Series B Preferred
Stock as stockholders  equity due to the receipt of a contingent  equity funding
commitment.  The equity funding  commitment was received from a venture  capital
fund  controlled  by the  chairman  of the  Company  and is only  valid upon the
occurrence of the delisting of the Common Stock or a Major Transaction to fund a
redemption by the Series B Holders. The commitment is only valid while there are
any shares of Series B Preferred Stock outstanding.

Note 11--Income Taxes
---------------------

There is no current or deferred  tax expense  for the years ended  December  31,
2000 and  1999,  due to the  Company's  loss  position.  The  Company  has fully
reserved for any benefits of these losses.

                                       25
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)

The deferred tax  consequences  of temporary  differences in reporting items for
financial  statement  and income tax purposes are  recognized,  as  appropriate.
Realization  of the future tax  benefits  related to the  deferred tax assets is
dependent on many factors,  including the Company's  ability to generate taxable
income  within  the net  operating  loss  carryforward  period.  Management  has
considered  these  factors  in  reaching  its  conclusion  as to  the  valuation
allowance for financial reporting  purposes.  The income tax effect of temporary
differences  comprising the deferred tax assets and deferred tax  liabilities on
the accompanying consolidated balance sheet is a result of the following:

<TABLE>
<CAPTION>
     Deferred Taxes                                       2000         1999
     ---------------                                   -----------  -----------
     <S>                                               <C>          <C>
     NOL Carryforwards................................ $ 4,368,618  $ 3,195,904
     Organization Costs...............................     116,535      116,535
     Accrued Expenses.................................           0       42,560
                                                       -----------  -----------
       Total Deferred Tax Assets...................... $ 4,485,153  $ 3,354,999
     Deferred Tax Liabilities--Depreciation...........           0     (21,999)
                                                       -----------  -----------
       Total.......................................... $ 4,485,153  $ 3,333,000
     Valuation Allowance..............................  (4,485,153)  (3,333,000)
                                                       -----------  -----------
     Net Deferred Tax Assets.......................... $         0  $         0
                                                       ===========  ===========
</TABLE>

A  reconciliation  between the statutory  federal  income tax rate (34%) and the
effective  rate of income tax  expense  for each of the years  during the period
ended December 31 follows:

<TABLE>
<CAPTION>
                                                                 2000    1999
                                                                 ------  ------
     <S>                                                         <C>     <C>
     Statutory Federal Income Tax Rate.......................... (34.0)% (34.0)%
     Other......................................................   3.0 %   0.3 %
     Increase in Valuation Allowance............................  31.0 %  33.7 %
                                                                 ------  ------
     Effective Income Tax Rate..................................   0.0 %   0.0 %
                                                                 ======  ======
</TABLE>

The Company has available  net operating  loss  carryforwards  of  approximately
$12,850,000  for tax  purposes to offset  future  taxable  income which begin to
expire in 2002.

Note 12--Segment Information
----------------------------

The Company  was managed as two  operating  segments  during 1999 and 2000:  the
MedCare Program and RxSheets.com.  All corporate,  selling,  administrative  and
overhead expenses are included in the MedCare Program in both 1999 and 2000.

<TABLE>
<CAPTION>
                                           MedCare
                                           Program    RxSheets.com    Total
                                         -----------  ------------ -----------
<S>                                      <C>          <C>           <C>
      2000
       Revenues......................... $   700,053  $          0  $    700,053
       Segment Loss.....................  (1,831,665)   (1,942,829)   (3,774,494)
       Total assets.....................     161,874       153,428       315,302
       Capital expenditures.............      29,118       191,356       220,474
       Equipment write-off .............     253,131             0       253,131
       Depreciation and amortization....      63,181        29,650        92,831


     1999
       Revenues......................... $ 1,687,780   $       0   $ 1,687,780
       Segment Loss.....................  (2,977,068)   (305,114)   (3,282,182)
       Total assets.....................   3,659,594     235,536     3,895,130
       Capital expenditures.............     124,500      93,831       218,331
       Equipment write-off..............      89,978           0        89,978
       Depreciation and amortization....      90,058       9,795        99,853

</TABLE>

On November  10,  2000,  the Company  sold all assets  relating to  RxSheets.com
subsidiary,  which consisted  primarily of computer equipment and software under
capital lease, to WGC Enterprises,  an investment  group, for a nominal sum. The
sale agreements  called for WGC Enterprises to establish a new entity,  to issue
ten percent of the issued and  outstanding  stock of this new entity to MedCare,
allow MedCare to share in future  revenue of the new entity and to raise capital
for  this  new  entity  to  fund  the  ongoing  operations.   Subsequently,  WGC
Enterprises  was  unable  to raise  the  appropriate  funding  to  continue  the
operations  of RxSheets and the assets were  returned to MedCare,  the principal
obligor under the capital lease. The Company has since closed its offices and is
currently  negotiating  with the  lessor to get out of the lease and  return the
equipment.  The  equipment  remains  idle in its  vacant  offices  in Oak Brook,
Illinois.

As a result, the Company has discontinued its RxSheets.com operations.  The loss
of the  discontinued  segment was  $1,942,829.  Total revenues were $2,500.  The
remaining  assets and  liabilities  at the  balance  sheet date  consists of the
computer equipment and software under capital lease. There was not tax effect on
the transaction due to the Company's loss position.

                                       26
<PAGE>

                  MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Note 13 - Subsequent Events
---------------------------

On March 1, 2001, the Company accepted a private placement from its Chairman of
$150,000 in exchange for 3,000,000  restricted common shares and 3,000,000 share
purchase warrants exercisable at $0.05 until March 1, 2005.

During  March  2001,  the Company  closed down all of its MedCare  sites and its
offices in Oak Brook,  Illinois  due to lack of  significant  revenues  and high
operating costs. The Company is currently  searching for potential joint revenue
partners  that have  existing  operating  infrastructures  to which the  MedCare
Program can be added as an ancillary service with minimal overhead.

                                       27
<PAGE>

Item 8:  Changes in and Disagreements with Accountants
-------  ---------------------------------------------
         on Accounting and Financial Disclosure
         --------------------------------------

On November 10, 2000,  Arthur  Andersen LLP resigned as the  independent  public
accountants of Medcare Technologies, Inc., (the "Company"). During the course of
their work, the Company and Arthur  Andersen LLP have not had any  disagreements
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure,  or auditing scope or procedure. The Company engaged Clancy and Co.,
PLLC as its new independent public  accountants  effective as of the date of the
dismissal of its former accountants.

Item 9: Directors and Executive Officers of the Registrant
----------------------------------------------------------

The  information  required by this Item with respect to directors and Section 16
compliance is included in the Company's  definitive proxy statement for its 2001
Annual Meeting of Shareholders ("Proxy Statement") and is hereby incorporated by
reference.

Item 10: Executive Compensation
-------------------------------

The  information  required  by this  Item is  included  in the  Company's  Proxy
Statement and is hereby incorporated by reference.

Item 11: Security Ownership of Certain Beneficial Owners and Management
-----------------------------------------------------------------------

The  information  required  by this  Item is  included  in the  Company's  Proxy
Statement and is hereby incorporated by reference.

Item 12: Certain Relationships and Related Transactions
-------------------------------------------------------

The  information  required  by this  Item is  included  in the  Company's  Proxy
Statement and is hereby incorporated herein by reference.

                                    PART IV

Item 13: Exhibits and Reports on Form 8-K
-----------------------------------------

The exhibits listed in the  accompanying  index to exhibits are filed as part of
this Annual Report on Form 10KSB.

The following Form 8-Ks were filed during the Company's fourth fiscal quarter:.

November 17, 2000
-----------------

On November 10, 2000,  Arthur  Andersen LLP resigned as the  independent  public
accountants of Medcare Technologies, Inc., (the "Company").

Arthur Andersen LLP resigned after the audit for the fiscal year ending December
31, 1999.  Arthur  Andersen LLP issued an unqualified  audit opinion on the 1999
year-end  financial  statements.  The 1998 year-end  financial  statements  were
audited by Clancy and Co.,  P.L.L.C.  who issued an  unqualified  audit opinion.
During the course of their work,  the Company and Arthur  Andersen  LLP have not
had any  disagreements  on any matter of  accounting  principles  or  practices,
financial statement disclosure, or auditing scope or procedure.

The Company  has  engaged  Clancy and Co.,  PLLC as its new  independent  public
accountants   effective  as  of  the  date  of  the   dismissal  of  its  former
accountants.During   the  Company's   most  recent  fiscal  year  prior  to  the
engagement,  there have been no consultations with the newly engaged accountants
with regard to either the application of accounting principle as to any specific
transaction,  the type of audit  opinion that would be rendered on the Company's
financial statements or any matter of disagreement with the former accountants.

                                       28
<PAGE>

December 1, 2000
----------------

An  amendment  to the  November  17, 2000 8-K was filed with the addition of the
following former accountants letter

Office of the Chief Accountant                  Arthur Andersen LLP
Securities and Exchange                         33 West Monroe Street
Commission                                      Chicago IL 60603-5385
450 Fifth Street, N.W.                          Tel 312 580 0093
Washington, D.C. 20549                          www.arthurandersen.com

December 1, 2000

Dear Sir/Madam,

We have read the first two paragraphs of Item 4 included in the Form 8-K/A dated
December 1, 2000 of MedCare  Technologies,  Inc. to be filed with the Securities
and Exchange  Commission  and are in  agreement  with the  statements  contained
therein.

Very truly yours,

/s/ Arthur Andersen LLP
Arthur Andersen LLP

Copy to:

Mr. Jeffrey Aronin, MedCare Technologies, Inc.

December 6, 2000

On November 29, 2000 the Company  repurchased  all of the  outstanding  Series B
Convertible   Preferred   Stock  (81.5  shares)  from  the  Series  B  Preferred
Shareholders.  The purchase  price was $1,366 per share for a total of $111,329.
The Securities  Repurchase  Agreement governing this transaction is listed as an
exhibit to this filing.

                                       29
<PAGE>
                                   SIGNATURES

Pursuant to the  requirements  of Sections  13 or 15 (d) of the  Securities  and
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized on this 10th day of
April, 2001.

                                                      MEDCARE TECHNOLOGIES, INC.

                                                      /s/ Ray Krauss
                                                      ------------------
                                                      By: Ray Krauss
                                                      CEO and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in capacities and on the dates indicated.



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

/s/ Harmel S. Rayat      Director and Chairman          10th day of April, 2001.
-------------------      ---------------------          ------------------------
Harmel S. Rayat

/s/ Harvinder Dhaliwal   Director, Secretary/Treasurer  10th day of April, 2001.
----------------------   -----------------------------  ------------------------
Harvinder Dhaliwal

30
<PAGE>