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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2001

                         Commission file number 0-33261

                            INTERCHANGE MEDICAL, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

              Florida                                        65-0908988
   -------------------------------                       -------------------
   (State or Other Jurisdiction of                        (I.R.S. Employer
    Incorporation or Organization)                       Identification No.)

    2821 East Commercial Boulevard, Suite 201, Fort Lauderdale, Florida 33308
    -------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                  (954)229-0900
                           --------------------------
                           (Issuer's Telephone Number)

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

          TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
          -------------------------------------------------------------
                                      None

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

                     Class a Common Stock, $.0001 Par Value
                     --------------------------------------
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $ 0.

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. NONE

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: March 31, 2002: 7,499,733 Shares of
Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                    - None -

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


<PAGE>



                                TABLE OF CONTENTS


PART I

Item 1.       Description of Business
Item 2.       Properties
Item 3.       Legal Proceedings

Item 4        Submission of Matters to a Vote of Security Holders

PART II

Item 5.       Market for Common Equity and
              Related Stockholder Matters

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

Item 7.       Financial Statements

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

PART III

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

Item 10.      Executive Compensation
Item 11.      Security Ownership of Certain Beneficial

              Owners and Management

Item 12.      Certain Relationships and Related Transactions
Item 13.      Exhibits, Lists and Reports on Form 8-K


<PAGE>



                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

OVERVIEW

         Interchange Medical, Inc. is a development stage company, incorporated
in the state of Florida in April 1999. Since inception we have been engaged in
the development of online prescription delivery. Our principal office is located
at 2821 East Commercial Boulevard, Suite 201, Fort Lauderdale, Florida 33308.
Our web site address is www.interchangemedical.com.

         We plan to provide a modern alternative to the current method of
obtaining prescribed medications by allowing physicians to place prescription
orders on a computer terminal at their office, which will be processed by our
network, filled by an independent pharmacy and delivered directly to the
patient's home or office the next day. The delivery of prescription drugs will
be done through either our own driver(s) or by an independent pharmacy's
drivers.

STRATEGY

         We want to become a leader in physician-pharmacy online prescription
delivery. Using the Internet and personal delivery service, we believe
prescribed drugs can be quickly dispensed and promptly delivered to the
patients' home or workplace.

         We will initially attempt to provide Internet access for physician
offices and recruit independent pharmacies and drug providers to fill
prescriptions. We initially chose Puerto Rico as the location for our initial
testing, however, due to inadequate Internet and communications infrastructure
in Puerto Rico, we have decided to conduct initial testing in Florida or
California. We believe that this program will be attractive to independent
pharmacies that are unable to compete with large pharmacies, such as Walgreens,
Eckerd Drugs, CVS and RiteAid. Depending on our success, we may expand our
operations to other locations.

OPERATIONS

         We are a developmental stage company. While we have not commenced
business operations, we have developed a point-of-care software system. We have
plans to establish a secured communication infrastructure to send and receive
prescriptions from doctors offices and direct the prescriptions to company owned
and independent pharmacies over a secured server located at
interchangemedical.com. To date we do not own any pharmacies nor do we have any
material relationships with independent pharmacies.

         In late December 2001, we began testing our software system. We also
decided to base our software system on the Microsoft .NET initiative.





<PAGE>



         We have developed a secured application software system called the
3P.NET System. It incorporates Internet/Intranet technologies. Our 3P.NET System
is comprised of three components:

o        3P.NET Point-Of-Care system (3P.NET POC) where every registered 3P.NET
         physician, clinic, and walk in medical center would be securely
         connected to
o        a 3P.NET Central Server Station (3P.NET CSS), where prescription orders
         would be authenticated and securely delivered to
o        a secure 3P.NET Point of Delivery (3P.NET POD) system located at a
         company owned or independent pharmacy participating in our program.

         There will be no charge for users to sign up and have access to the
3P.NET System. The 3P.Net System transmits communications through HTTPS (HTTP
with Secure Sockets Layer SSL) over TCP/IP (Telephony Communications Protocol /
Internet Protocol). In some instances a virtual private network (VPN) may be
used to enable participating physicians to connect directly to our 3P.NET System
through a secure Internet connection. A user may access our system only after
entering a password, security code, and personal identification number that has
been authenticated by 3P.NET CSS.

         Once on our 3P.NET System, a physician or nurse will be able to place a
patient's prescription order quickly and efficiently online by entering the
patient's name, address, Social Security Number, phone number, requested
medication, units of measure, insurance information, and other necessary
information. The patient will have a choice of payment methods and the ability
to elect to have the prescription filled with either brand name or generic
drugs. Once the information is entered the medication is ordered by clicking on
the send button. This feature will automatically forward the order to our data
center.

         When the order arrives at our 3P.NET CSS it will be checked for
authentication. As soon as the authentication is complete, our 3P.NET CSS will
seek out and find the nearest independent pharmacy capable of filling the
prescription. We will then send that independent pharmacy the patient's
prescription. The prescription, when received by the independent pharmacy, will
appear on the pharmacy's 3P.NET POD terminal. Upon receipt, the pharmacy will
fill the prescription and deliver it to the patient using their local delivery
service. The patient will receive their prescription either at home or work
through same day or overnight delivery service. The delivery service is
responsible for collecting the patient's co-pay and the balance is collected
later from the patient's insurance company.

PLAN OF OPERATIONS

         To date our 3P.NET System is not operational. We intend to implement
our 3P.NET System by acquiring company owned pharmacies and establishing revenue
sharing agreements with participating independent pharmacies. In addition, we
anticipate generating revenues from charges earned on claim processing, and from
banner and educational advertising on our network. To date we have not acquired
a pharmacy nor entered into a revenue sharing agreement. We will require
third party financing in order to acquire a pharmacy.


                                       -2-


<PAGE>

         We plan to take the steps necessary to bring our 3P.NET System online
by the 3rd quarter 2002. We have delayed its installation and are currently
working with a patent attorney to file patent applications to protect our 3P.NET
POC, 3P.NET POD, and 3P.NET CSS technology. In addition to securing patent
protection, we intend to acquire a pharmacy. We are currently negotiating with a
large North American pharmacy chain for the purchase of a franchise in Florida
or California. Once we have established an operational pharmacy and have filed
for patent protection we plan to implement our 3P.NET System. Once our 3P.NET
System is operational, we will seek to develop a business relationship with a
computer supplier and Internet service provider, and to lease or purchase
servers, communication lines, personal computer workstations, printers, third
party software applications and other equipment. We also intend to actively seek
relationships with doctors and pharmacies, which we need to establish our
distribution network. We will need additional funds to develop additional
features on our technology within the next 12 months.

RESEARCH AND DEVELOPMENT

         As a development stage company, we have, since inception, used
substantially all of our resources to develop our software system and establish
a secured communication infrastructure. As of this date we are not certain as to
whether these costs will be directly borne by any customer. Research and
Development expenses, if quantified, are for the most part equal to our salary
expense since inception of $1,160,844. We are also working with a patent
attorney to protect our technology and file a patent application. To date we do
not hold any patents for our technology.

GOVERNMENT REGULATION

         The prescription drug and pharmacy business is subject to extensive
federal, state and local regulations. However, we believe that we are not
subject to most of the regulatory obligations because we will only provide
ancillary services to doctors and pharmacies. Pursuant to the Omnibus Budget
Reconciliation Act of 1990 and related state and local regulations, the
pharmacists we work with will be required to offer counseling, without
additional charge, to our customers about medication, dosage, delivery systems,
common side effects, adverse effects or interactions and therapeutic
contraindications, proper storage, prescription refill, and other information
deemed significant by the pharmacists.

         Pharmacies are subject to requirements under the Controlled Substances
Act and federal Drug Enforcement Agency regulations, as well as related state
and local laws and regulations, relating to pharmacy operations, including
registration, security, record keeping, and reporting requirements related to
the purchase, storage and dispensing of controlled substances, prescription
drugs, and certain over-the-counter drugs.

         The U.S. House of Representatives Committee on Commerce and the General
Accounting Office are currently investigation online pharmacies and online
prescribing, especially focused on


                                       -3-


<PAGE>



those who prescribe drugs online and on pharmacies that fill invalid
prescriptions, including those that are written online. The committee requested
that the General Accounting Office undertake a formal review of a number of
issues pertaining to online pharmacies, including an assessment of mechanisms to
ensure that online pharmacies are obeying the various state and federal
regulations for the industry. Since we do not prescribe drugs nor fill
prescriptions, we believe that our business will not be negatively affected by
regulations resulting from the investigations. We may be subject to increased
reporting and monitoring requirements.

         The National Association of Boards of Pharmacy (NABP), a coalition of
state pharmacy boards, is in the process of developing a program, the Verified
Internet Pharmacy Practice Sites (VIPPS), as a model for self-regulation for
online pharmacies.

         Legislation and regulations currently being considered at the federal
and state level could affect our business, including legislation or regulations
relating to confidentiality of patient records, electronic access and storage.
In addition, various state legislatures are considering new legislation related
to the regulation of nonresident pharmacies. The Health Insurance Portability
and Accountability Act of 1996 mandates the use of standard transactions,
standard identifiers, security and other provisions. The Health Insurance
Portability and Accountability Act of 1996 is designed to ensure that patient's
information is electronically portable while guaranteeing its security in
storage, exchange and transmission. Since our system will utilize a secured
communications protocol between physicians and pharmacies while maintaining a
privacy policy that discloses to the patient that we will not share nor disclose
their medical and drug history information without their consent, the Health
Insurance Portability and Accountability Act of 1996 should not have any adverse
effect on our business.

         Although the FDA does not regulate the practice of pharmacy, other than
pharmacy compounding, which we will not engage in, FDA regulations may impact
some of our service offerings because the FDA regulates drug advertising and
promotion, including direct-to-consumer advertising, done by or on behalf of
drug manufacturers and marketers. If we expand our services, we may be subject
to FDA regulation.

         The inclusion of prescription drugs as a Medicare benefit has been the
subject of numerous bills in the U.S. Congress. Should legislation on
prescription drug coverage for Medicare recipients be enacted into law, we would
be subject to compliance with any corresponding rules and regulations.

         Until recently, Health Care Financing Administration guidelines
prohibited transmission of Medicare eligibility information over the Internet.
We are also subject to extensive regulation relating to the confidentiality and
release of patient records. Additional legislation governing the distribution of
medical records exists or has been proposed at both the state and federal level.



                                       -4-


<PAGE>

MATERIAL AGREEMENTS

         To date, we have not reached any agreements or business relationships
with doctors, pharmacies or computer suppliers. Our business will fail if we are
unable to develop these relationships.

EMPLOYEES

         We have four employees. Two of these employees also serve as executive
officers. All employees serve part time, contributing approximately 20 hours per
week of services since our inception. We will need to hire additional employees
to facilitate our business plan. Dr. Moradi, our chief executive officer, serves
our company in three specific areas: technical research, marketing research and
business management. He is principally responsible for our technical design,
user interface, product specifications, communications protocol, application
workflow, security issues, legal, medical, and pharmaceuticals matters. Dr.
Moradi is promoting our business model, while meeting with the physicians and
local independent pharmacies encouraging them to become a part of our network.
In addition, he controls all business planning, market research, and accounting
and legal matters to ensure compliance and disclosures are prepared in
accordance with federal, state and local laws.

COMPETITION

         The online pharmacy business is highly competitive. We will compete
with retail, mail order and web sites including, but not limited to, rx.com,
drugstore.com and walgreens.com. These competitors have greater name
recognition, longer operating histories, larger customer bases and significantly
greater financial, technical, marketing, public relations, sales, distribution
and other resources than we do. We intend to establish a niche market with
independent pharmacies or a company-owned pharmacy so we can avoid competing
directly with our larger competitors. Due to an aggressive and strong foothold
of national pharmacies, many smaller independent pharmacies have begun to feel
the threat of losing their business. We believe our business model may enable
these smaller, independent pharmacies to maintain their independence. We believe
our business model will have, at least initially, limited competition. However,
there are no assurances that our business model and technology will not be
duplicated.

ITEM 2. PROPERTIES.

         We do not own or lease any real property. We currently maintain our
offices at 2821 East Commercial Boulevard, Suite 201, Fort Lauderdale, Florida
33308. We currently occupy this space on a month to month basis for $200 per
month. We lease this space from g4, Inc., a company wholly owned by our chief
executive officer.

         We plan to lease additional facilities as our business develops.



                                       -5-


<PAGE>
ITEM 3. LEGAL PROCEEDINGS.

         None.

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

         No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.



                                       -6-


<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         There is no trading market for our shares of common stock. There are
currently 7,499,300 shares of our common stock outstanding. 998,000 of our
outstanding shares of common stock are free trading. The remaining shares of our
common stork are defined as restricted stock under the Securities Act. Of the
7,499,300 shares currently outstanding, 3,720,000 shares are owned by our
affiliates, as that term is defined under the Securities Act. Absent
registration under the Securities Act, the sale of our remaining outstanding
shares is subject to Rule 144. Under Rule 144, if certain conditions are
satisfied, a person (including any of our affiliates) who has beneficially owned
restricted shares of common stock for at least one year is entitled to sell
within any three-month period a number of shares up to the greater of 1% of the
total number of outstanding shares of common stock, or if the common stock is
quoted on Nasdaq, the average weekly trading volume during the four calendar
weeks preceding the sale. A person who has not been an affiliate of ours for at
least three months immediately preceding the sale, and who has beneficially
owned the shares of common stock for at least two years, is entitled to sell the
shares under Rule 144 without regard to any of the volume limitations described
above. As of the date of this offering, none of our shares of common stock are
eligible for resale under Rule 144.

EQUITY SECURITIES SOLD DURING THE PERIOD COVERED BY THIS REPORT

         On April 12, 2001 we issued an aggregate of 430,000 shares of our
common stock to four employees of our company. These shares are issued in lieu
of accrued salaries. The shares were valued at $.02. The issuance of these
shares was exempt from registration under Section 4(2) of the Securities Act.
These individuals had access to financial and other information regarding our
company. The shares they received are marked with the appropriate restrictive
legend.

         On April 12, 2001, we issued 375,000 shares of our common stock to a
consultant to our company for consulting services provided. These shares were
valued at $.02 per share. The issuance of these shares was exempt from
registration under Section 4(2) of the Securities Act. The consultant had access
to financial and other information regarding our company. The shares issued were
marked with the appropriate restrictive legend.

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

         As a development stage company, we have incurred a net loss from
inception through December 31, 2001 of $1,245,900. Our operating loss for the
year ended December 31, 2001 and year ended December 31, 2000 was $593,637 and
$462,969, respectively. Since our organization in April 1999 we have remained a
developmental stage company with all of our resources being used to develop our
software system and establish a secured communication infrastructure. These



                                       -7-


<PAGE>



activities have been handled by our chairman, executive vice president and
several employees and consultants. Cash compensation has been accrued for their
services.

         In 2001, we sold software for $20,000. The sale of the software during
the year 2001 was not related to our intended business and has, accordingly,
been included in our financial statements as other income.

         We anticipate that testing of our system will initially be made in
Florida or California commencing in the third quarter of 2002. We intend to
acquire a pharmacy franchise to facilitate our operations. We require third
party financing in order to acquire a pharmacy. We cannot provide any assurances
that we will acquire a franchisee.

         We cannot provide assurances that we will be able to successfully
implement our business strategy or penetrate the pharmacy market or attain a
wide following for our services, or that we will ever attain a level of
profitability. In addition, we remain subject to all the risks inherent in a
start-up enterprise. Our prospects must be considered in light of the numerous
risks, expenses, delays, problems frequently encountered in the establishment of
a new business in industries characterized by emerging markets and intense
competition.

         As of December 31, 2001, we had existing cash reserves of $13,690.
Since inception we have been dependent upon proceeds from the sale of our
securities and advances from our chief executive officer to maintain our
operations. We believe that in order to satisfy our cash requirements necessary
to facilitate our business plan and commence our operations over the next 12
months we will need to raise capital through third party financing or a private
placement of our securities. We plan on entering into a relationship with a
computer supplier and Internet service provider in order to establish a line of
communication with doctors. We intend to lease or purchase servers,
communication lines, routers, hubs, personal computer workstations, printers,
third party software applications and operating systems to create our
communication infrastructure. We also intend to actively seek relationships with
doctors and pharmacies, which we need to establish our distribution network. We
do not anticipate any future research and development costs within the next 12
months.

         To commence our business operations we will need to add employees at
various positions, including, but not limited to, technical, programming,
network administration and general administration. We will also attempt to out
source a number of activities such as computer hardware maintenance, on-sight
computer installation and personal pharmaceutical delivery.

         We have incurred significant losses and have negative cash flow from
operations. Our auditors have included a paragraph in their report on our annual
financial statements for the years ended December 31, 2001 and 2000 which
expresses concern about our ability to continue as a going concern unless we can
secure additional financing. We expect significant operating losses to continue
at least during 2002. There can be no assurances that any additional funding
will be available or, if available, that such funding can be obtained on
favorable terms.

         We will need additional financing to facilitate our business plan.
Subject to availability of funding, our burn rate for the next 12 months should
be about $1 million. We believe that in order to satisfy our cash requirements
necessary to facilitate our business plan and commence our operations over the
next 12 months we will need to raise capital through third party financing or a
private placement of our securities. Our chief executive officer intends to
provide loans to our



                                       -8-


<PAGE>



company to support operations. We can not provide any assurances that we will be
able to secure financing necessary to facilitate our business plan.

ITEM 7. FINANCIAL STATEMENTS.

         The information required by Item 310(a) of Regulation S-B is included
herein elsewhere in this annual report.

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

         None.

                                    PART III

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

OFFICERS AND DIRECTORS

         The following table sets forth certain information concerning each of
our directors and executive officers:

Name                      Age                  Positions Held
----                      ---                  --------------

Ahmad Moradi               47          Chairman of the Board of Directors,
                                       Chief Executive Officer, President
Donald S. Smith            38          Executive Vice President of Technology
                                       Development
Richard Paull              46          Comptroller

         AHMAD MORADI has served as our chief executive officer, president and
director since inception in April 1999. He has 20 years of experience in
information technology, communications, software development, marketing,
business management, mergers, acquisitions and managing public corporations.
Since 1992 he has served as president and is the sole shareholder of g4, Inc.,
an information technology and business strategy growth consulting firm serving
Fortune 500 and small companies worldwide. In addition, since September 1997 Dr.
Moradi has served as CEO of Biomed Research Technologies, Inc., a biomedical
technology company. Dr. Moradi also currently serves as chairman and CEO of
Netstairs.com, Inc. and Maxwell Rand, Inc., two development stage companies.
From August 1998 through July 2000 he was chairman and chief executive officer
of WorldCast Interactive, a company that provided telephonic and data networking
infrastructure. Dr. Moradi obtained his undergraduate degree in the fields of
mathematics, engineering and international


                                       -9-




<PAGE>



business from Florida Atlantic University. He received a Ph.D. in management
information systems from LaSalle University. Dr. Moradi has been inducted in
over 20 Who's Who Registries Worldwide.

         DONALD S. SMITH has served as executive vice president of our company
since April 1999. He has over 17 years of software development and managerial
experience in multi-platform environments for the financial, healthcare, and
engineering industries. Presently he serves as software engineering manager of
Aqueduct, Inc., an e-commerce service provider. From September 1996 to January
2000 he served as the manager of office applications for Plaid Brothers
Software, a provider of portfolio management software. Mr. Smith obtained his
bachelors of science in computer science from California State University
Fullerton.

         RICHARD PAULL has been our comptroller since inception in April 1999.
He has provided financial consulting services to several publicly held companies
during the past 5 years. These companies include, Westmark Group Holding, Inc.
and its subsidiary Westmark Mortgage; Netgates, Inc.; and WorldCast Interactive,
Inc. (formerly FutureTrak, Inc). Mr. Paull served as the controller of WorldCast
from October, 1998 to June, 2000 and was responsible for the company's financial
records, setting up policies and procedures, working with the external auditors
for the annual audit along with preparing all SEC filings. Since 1996, Mr. Paull
has been a principal of R & J Consulting of Palm Beach, Inc., an accounting and
tax firm specializing in assisting small to medium sized corporations in
obtaining financing from private or public sources. In addition, Mr. Paull
currently serves as comptroller of Biomed Research Technologies, Inc. Prior to
opening his consulting firm, he worked as a financial consultant to one of
Forbes 400 wealthiest individuals overseeing his corporate investments and
acquisitions. He worked as an auditor with Grant Thornton, LLP in Boston,
Massachusetts from 1983 through 1985. He is an active board member of various
non-profit agencies in Palm Beach County. He obtained his masters degree in
business administration with a concentration in accounting from Suffolk
University in Boston, Massachusetts and a dual bachelor of science and arts in
biology and education from Syracuse University.

ITEM 10. EXECUTIVE COMPENSATION.

         The following table sets forth compensation awarded to, earned by or
paid to our chief executive officer and each executive officer whose
compensation exceeded $100,000 for the year ended December 31, 2001. The table
excludes 2,000,000 shares of common stock Dr. Moradi received upon inception of
our company.



                                      -10-


<PAGE>



                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                 Other Annual
Name and Principal Position           Year          Salary($)             Bonus ($)            Compensation ($)
---------------------------           ----          ---------             ---------            ----------------
<S>                                  <C>             <C>                   <C>                   <C>
Ahmad Moradi, CEO,                   2001            $250,000(1)              --                   $ 5,000 (3)
and Chairman                         2000            $250,000(1)              --                   $20,000 (2)
                                     1999            $173,733(1)              --                       --

Donald Smith, EVP                    2001            $100,000(4)              --                       --

</TABLE>

(1)      Salary has been accrued.
(2)      Dr. Moradi received 1,000,000 shares of common stock in lieu of $20,000
         accrued salary.
(3)      Dr. Moradi received 250,000 shares of common stock in lieu of $5,000
         accrued salary.
(4)      Majority of salary has been accrued. Received 60,000 shares of common
         stock in lieu of $1,200 accrued salary.


OPTION GRANTS

         No options, warrants nor SARS have been granted since our inception.

EMPLOYMENT AGREEMENTS

         Ahmad Moradi, chief executive officer and chairman. We have entered
into a written five-year employment agreement with Dr. Moradi, which commenced
May 1999. Under the terms and conditions of his employment agreement, Dr. Moradi
receives an initial annual base salary of $250,000, annual bonuses of up to 1.5%
of net profits. Dr. Moradi is reimbursed for his ordinary and necessary business
expenses.

         Our executive officers have accrued salaries for the services they
performed in 2000 and 2001. Dr. Moradi and our other employees have orally
agreed to defer their pay until such a time that company has revenues and can
retire its obligation either in stock or cash. In addition, they have received
stock in lieu of their services.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth certain information as of the date of
this report regarding beneficial ownership of our common stock by (1) each
stockholder known by us to be the beneficial owner of more than 5% of our common
stock, (2) by each director and executive officer and (3) by all executive
officers and directors as a group. Each of the persons named in the table has
sole voting and investment power with respect to common stock beneficially
owned.



                                      -11-
<PAGE>


<TABLE>
<CAPTION>
                                                       Number of                Percentage of
Name and Address                                     Shares Owned               Shares Owned
----------------                                     ------------               ------------
<S>                                                     <C>                          <C>
Ahmad Moradi, CEO
2821 E. Commercial Blvd., Suite 201
Fort Lauderdale, FL 33308                               3,250,000                    43.3%

Donald S. Smith, EVP
18691 Plumosa Street
Fountain Valley, CA 92708                                 410,000                     5.5%

Richard Paull, Comptroller
12783-A Forest Boulevard
Wellington, FL 33308                                       60,000                     *

Solomon Holdings(1)
P.O. Box F42222
Freeport, Bahamas                                         500,000                     6.7%

Arshia Mehin
9512 Milden Street
La Mesa, CA 91942                                         500,000                     6.7%

Robert Kelner
10 Fairfield Drive, Suite 207
Deerfield Beach, FL 33441                                 500,000                     6.7%

Steve Krause
100 East Linton Blvd.
Delray Beach, FL 33483                                    498,000                     6.6%

Jeffrey C. Fernyhough
144 Alexander Road
Boca Raton, FL 33432                                      473,000                     6.3%

Officers and Directors
   as a group (3 persons)                               3,720,000                    49.6%

</Table>
--------------

 *    Less than 1%
(4)   Principal of Solomon Holdings is William Tessaro.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Between September 1999 and March 2000, we loaned WorldCast Interactive,
Inc. an aggregate $45,000. This loan was subsequently repaid in shares of
WorldCast Interactive, Inc. common stock. World Cast has subsequently ceased
operations and we have written off the entire value of the common stock. Ahmad
Moradi, an officer, director and principal shareholder of our company was
serving as an officer and director of WorldCast Interactive on the date of the
loan and repayment of the loan.

         Since 1999, Dr. Moradi has advanced our company funds for working
capital purposes, which amount is outstanding at this time. Advances due to Dr.
Moradi at December 31, 2001 were $25,000. In addition, William Tessaro loaned
our company $17,000 in 1999, which amount was satisfied by the



                                      -12-


<PAGE>
delivery to Mr. Tessaro of shares of Worldcast common stock. Mr. Tessaro served
as an officer of our company at the time of the loan.

         We currently occupy our executive offices from g4, Inc., a corporation
wholly owned by Ahmad Moradi, on a month to month basis at a cost of $200 per
month.

ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K.

(a)      Exhibits:

         3.0      Articles of Incorporation*
         3.2      Bylaws*
         10.0     Employment Agreement with Dr. Moradi*
         21       Subsidiaries of the Registrant*

*Previously filed on Form 10-SB Registration Statement.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed during the last quarter of the period
covered by this report.



                                      -13-




<PAGE>


                                   SIGNATURES

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

                                       INTERCHANGE MEDICAL, INC.



Date: April 1, 2002                    By: /s/ Ahmad Moradi
                                           -------------------------------------
                                             Ahmad Moradi, President

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated:

<TABLE>
<CAPTION>


<S>                                 <C>                                        <C>
/s/ Ahmad Moradi                    Chairman, CEO and President                 April 1, 2002
-------------------------------
Ahmad Moradi



/s/ Donald S. Smith                 Executive Vice President                    April 1, 2002
-------------------------------
Donald S. Smith



/s/ Richard Paull                   Principal Accounting Officer                April 1, 2002
-------------------------------
Richard Paull

</TABLE>


                                      -14-



<PAGE>








                            INTERCHANGE MEDICAL, INC.
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2001 AND 2000


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>                                                                                                              <C>
Independent Auditor's Report......................................................................................1

Financial Statements:

      Balance Sheets as of December 31, 2000 and 2001 ............................................................2

      Statements of Operations for the years ended December 31, 2000 and 2001
         and for the period from April 5, 1999 (inception) through December 31, 2001..............................3

      Statements of Changes in Stockholders' Deficit for the years ended
         December 31, 2000 and 2001 and for the period from April 5, 1999
         (inception) through December 31, 2001....................................................................4

      Statements of Cash Flows for the years ended December 31, 2000 and 2001
         and for the period from April 5, 1999 (inception) through December 31, 2001..............................5

Notes to Financial Statements..................................................................................6-10

</TABLE>



<PAGE>
<TABLE>
<S>                                                   <C>                                    <C>
Michael I. Daszkal, CPA, P.A.                                                                2401 N.W. Boca Raton Boulevard
Jeffrey A. Bolton, CPA, P.A.                                                                           Boca Raton, FL 33431
Timothy R. Devlin, CPA, P.A.                   DaszkalBolton LLP                                            t: 561.367.1040
Michael S. Kridel, CPA, P.A.               ----------------------------                                     f: 561.750.3236
Marjorie A. Horwin, CPA, P.A.              Certified Public Accountants                               www.daszkalbolton.com

</TABLE>



                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
Interchange Medical, Inc.

We have audited the accompanying balance sheets of Interchange Medical, Inc. (a
development stage company), as of December 31, 2000 and 2001, and the related
statements of operations, changes in stockholders' deficit and cash flows for
the years ended December 31, 2000 and 2001 and for the period from April 5, 1999
(inception) through December 31, 2001. 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 of America. Those standards require that we plan and
perform the audits 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 financial position of Interchange Medical, Inc., as
of December 31, 2000 and 2001, and the results of its operations and its cash
flows for the years ended December 31, 2000 and 2001 and the period from April
5, 1999 (inception) through December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company has minimal
capital resources presently available to meet obligations, which can normally be
expected to be incurred by similar companies, and with which to carry out its
planned activities. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are discussed in Note 10. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                             /S/ DASZKAL BOLTON LLP

Boca Raton, Florida
February 27, 2002




Member of American Institute of Certified Public Accountants
- SEC and Private Companies Practice Sections

<PAGE>


                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                                 BALANCE SHEETS

<Table>
<Caption>

                                                                                   December 31,          December 31,
                                                                                      2000                  2001
                                                                                   ------------          ------------
<S>                                                                                <C>                   <C>
                                                     ASSETS
Current assets:
    Cash                                                                           $    10,123           $    13,690
    Prepaid consulting fees                                                              5,000                    --
                                                                                   -----------           -----------
       Total current assets                                                             15,123                13,690
                                                                                   -----------           -----------

       Total assets                                                                $    15,123           $    13,690
                                                                                   ===========           ===========

                                    LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accrued salaries                                                               $   605,777           $ 1,132,245
    Accrued expenses                                                                     9,001                29,137
    Due to related parties                                                              20,473                29,973
                                                                                   -----------           -----------
       Total current liabilities                                                       635,251             1,191,355
                                                                                   -----------           -----------

Stockholders' deficit:
    Preferred stock, $0.0001 par value,
      50,000,000 shares authorized, -0- shares
      issued and outstanding                                                                --                    --
    Common stock, $0.0001 par value; 100,000,000
      shares authorized, issued and outstanding,
      7,499,300 shares at December 31, 2001,
      6,694,300 shares at December 31, 2000                                                669                   750
    Additional paid-in capital                                                          51,466                67,485
    Deficit accumulated during the development stage                                  (672,263)           (1,245,900)
                                                                                   -----------           -----------
       Total stockholders' deficit                                                    (620,128)           (1,177,665)
                                                                                   -----------           -----------

       Total liabilities and stockholders' deficit                                 $    15,123           $    13,690
                                                                                   ===========           ===========

</TABLE>




                 See accompanying notes to financial statements.





                                     - 2 -
<PAGE>

                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                     April 5, 1999
                                                                                                      (Inception)
                                                           Year Ended           Year Ended              Through
                                                          December 31,          December 31,          December 31,
                                                              2000                  2001                  2001
                                                          ------------          ------------          ------------
<S>                                                       <C>                   <C>                   <C>
Revenues                                                  $        --           $        --           $        --
                                                          -----------           -----------           -----------

Operating expenses:
    Salary expenses                                           452,045               535,066             1,160,844
    Selling, general and administrative expenses               10,924                58,571                77,056
                                                          -----------           -----------           -----------
                                                              462,969               593,637             1,237,900
                                                          -----------           -----------           -----------

Loss before other income (expenses)                          (462,969)             (593,637)           (1,237,900)
                                                          -----------           -----------           -----------

Other income (expenses):
    Other income                                                   --                20,000                20,000
    Impairment of investment                                  (28,000)                   --               (28,000)
                                                          -----------           -----------           -----------
    Total other income (expense)                              (28,000)               20,000                (8,000)
                                                          -----------           -----------           -----------

Net loss                                                  $  (490,969)          $  (573,637)          $(1,245,900)
                                                          ===========           ===========           ===========

Net loss per share,  basic and diluted                    $     (0.09)          $     (0.08)
                                                          ===========           ===========

Average weighted number of
  shares outstanding, basic and diluted                     5,547,451             7,263,314
                                                          ===========           ===========

</TABLE>






                 See accompanying notes to financial statements.



                                     - 3 -
<PAGE>

                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT


<TABLE>
<CAPTION>

                           Preferred Stock        Common Stock         Additional
                           ---------------     --------------------      Paid-In     Subscription     Accumulated
                            Shares  Amount     Shares        Amount      Capital      Receivable        Deficit         Total
                            ------  ------     ------        ------    ----------    ------------     -----------    -----------

<S>                          <C>     <C>      <C>          <C>          <C>          <C>              <C>            <C>
Balance, April 5, 1999
 (Inception)                  --   $    --            --   $        --   $        --   $        --    $        --    $        --

Issuance of founders'
 shares                       --        --     4,546,300           454        18,701        (2,000)            --         17,155

Issuance of common
 stock for cash               --        --       998,000           100         9,880            --             --          9,980

Net loss -
 December 31, 1999            --        --            --            --            --            --       (181,294)      (181,294)
                          ------   -------     ---------   -----------   -----------   -----------    -----------    -----------
Balance,
 December 31, 1999            --        --     5,544,300           554        28,581        (2,000)      (181,294)      (154,159)

Issuance of common
 stock for services           --        --     1,150,000           115        22,885            --             --         23,000

Cash received                 --                                                             2,000                         2,000

Net loss -
 December 31, 2000            --        --            --            --            --            --       (490,969)      (490,969)
                          ------   -------     ---------   -----------   -----------   -----------    -----------    -----------
Balance,
 December 31, 2000            --        --     6,694,300           669        51,466            --       (672,263)      (620,128)

Issuance of common
 stock for services           --        --       805,000            81        16,019                           --         16,100

Net loss -
 December 31, 2001            --        --            --            --            --            --       (573,637)      (573,637)
                          ------   -------     ---------   -----------   -----------   -----------    -----------    -----------
Balance,
 December 31, 2001            --   $    --     7,499,300           750   $    67,485   $        --    $(1,245,900)   $(1,177,665)
                          ======   =======     =========   ===========   ===========   ===========    ===========    ===========

</TABLE>




                 See accompanying notes to financial statements.








                                     - 4 -
<PAGE>


                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                                                 April 5, 1999
                                                                                                                  (Inception)
                                                                           Year Ended         Year Ended            Through
                                                                          December 31,       December 31,         December 31,
                                                                              2000               2001                2001
                                                                          -----------         -----------         -----------
<S>                                                                       <C>                 <C>                 <C>
Cash flows from operating activities:
    Net loss                                                              $  (490,969)        $  (573,637)        $(1,245,900)
    Adjustments to reconcile net loss to net
      cash used by operating activities:
        Common stock issued for services                                       23,000              16,100              39,100
        Impairment of investment                                               28,000                  --              28,000
    Changes in assets and liabilities, net effect of acquisitions:
        (Increase) decrease in prepaid consulting fees                         (5,000)              5,000                  --
        Increase in accrued salaries                                          432,044             526,468           1,132,245
        Increase in accrued expenses                                            9,001              20,136              29,137
                                                                          -----------         -----------         -----------
Net cash used in operating activities                                          (3,924)             (5,933)            (17,418)
                                                                          -----------         -----------         -----------

Cash flows from financing activities:

    Proceeds from related party loans                                          58,664               9,500              91,973
    Payments to related party loans                                           (22,101)                 --             (62,000)
    Conversion of related party receivable to investment                      (45,000)                 --             (45,000)
    Conversion of related party debt to investment                             17,000                  --              17,000
    Stock subscription receivable                                               2,000                  --                  --
    Proceeds from sale of common stock                                             --                  --              29,135
                                                                          -----------         -----------         -----------
Net cash provided by financing activities                                      10,563               9,500              31,108
                                                                          -----------         -----------         -----------

Net increase in cash                                                            6,639               3,567              13,690
                                                                          -----------         -----------         -----------

Cash at beginning of period                                                     3,484              10,123                  --
                                                                          -----------         -----------         -----------

Cash at end of period                                                     $    10,123         $    13,690         $    13,690
                                                                          ===========         ===========         ===========

SUPPLEMENTAL CASH FLOW INFORMATION:

Non-cash investing and financing activities:

    Common stock issued for services                                      $    23,000         $    16,100         $    39,100
                                                                          ===========         ===========         ===========
    Conversion of related party receivable to investment                  $    45,000         $        --         $    45,000
                                                                          ===========         ===========         ===========
    Conversion of related party debt to investment                        $    17,000         $        --         $    17,000
                                                                          ===========         ===========         ===========

</TABLE>



                 See accompanying notes to financial statements.



                                     - 5 -
<PAGE>

                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                         NOTES TO FINANCIAL STATEMENTS


NOTE 1 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK

Interchange Medical, Inc. (the "Company") is a development stage Florida
Corporation organized in April of 1999. The Company is engaged in developing
distribution technology for On Line Digital Rx Prescriptions and delivering the
ordered items via delivery services.

The Company has not generated any revenues to date. The Company has been
devoting its efforts to activities such as establishing sources of information,
and developing markets for its planned operations. As the Company has not yet
generated any revenues, it is considered a development stage company.

Since its inception, the Company has been dependent upon the receipt of capital
investment or other financing to fund its continuing activities. In addition to
the normal risks associated with a new business venture, there can be no
assurance that the Company's product development will be successfully completed
or that it will be a commercial success. Further, the Company is dependent upon
certain related parties to provide continued funding and capital resources.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents. The Company has no
cash equivalents at December 31, 2000 and 2001.

REVENUE RECOGNITION

The Company recognizes revenue when services are rendered.

RESEARCH AND DEVELOPMENT

The Company has elected to expense payroll and other costs incurred for research
and development relating to software and related methodologies.

OTHER INCOME

Sale of software during the year 2001 is not the Company's intended business and
has accordingly been included in the financial statements as other income.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

STOCK COMPENSATION

The Company has adopted Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock-Based Compensation." SFAS 123 encourages the
use of a fair-value-based method of accounting for stock-based awards under
which the fair value of stock options is determined on the date of grant and
expensed over the vesting period. Under SFAS 123, companies may, however,
measure compensation costs for those plans using the method prescribed by
Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock
Issued to Employees." Companies that apply APB No. 25 are required to include
pro forma disclosures of net earnings and earnings per share as if the
fair-value-based method of accounting had been applied. The Company elected to
account for such plans under the provisions of APB No. 25.



                                     - 6 -
<PAGE>
                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                         NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

BASIC LOSS PER SHARE

Basic loss per common share is computed by dividing the net loss by the weighted
average number of shares of common stock outstanding during the year.

DILUTED LOSS PER SHARE

Fully diluted loss per common share is computed by dividing the net loss by the
weighted average number of shares of common stock outstanding during the year.

RECLASSIFICATION

Certain amounts in the 2000 financial statements have been reclassified to
conform to the 2001 financial presentation.

NOTE 3 - CONCENTRATION OF CREDIT RISK

The Company maintains its cash with one financial institution. At times,
deposits may exceed federally insured limits. The Federal Deposit Insurance
Corporation (FDIC) guarantees accounts up to $100,000. At December 31, 2000 and
2001, the Company had no amounts in excess of FDIC insured limits. The Company
has not experienced any losses in such accounts.

NOTE 4 - RELATED PARTY TRANSACTIONS

The following summarizes the Company's outstanding payables to related parties:

                                                       2000          2001
                                                    ---------      --------

Balance at beginning of year                        $  16,090      $ (20,473)
Payments (advances) during the year                   (36,563)        (9,500)
                                                    ----------     ---------
Balance receivable (payable) at end of year         $ (20,473)     $ (29,973)
                                                    ==========     ==========

In September 2000, the Company exchanged $45,000 that was due from a related
party, Worldcast Interactive, Inc. (WRCI), for 180,000 shares of WRCI's common
stock. The value of the transaction per share was $0.25. The Company retired
$17,000 that was due to a related party with 68,000 shares of its investment in
WRCI, leaving the Company with 112,000 shares of WRCI. Subsequently, the value
of the stock declined to $0.06 per share as of December 31, 2000. Since the
Company's management deemed the decline of the stock to be other than temporary,
the value of the investment was considered to be impaired and was written down
in its entirety as of December 31, 2000, the loss of $28,000 was reflected in
the statement of operations for the year ended December 31, 2000. Subsequently,
WRCI went out of business and its operations ceased.



                                     - 7 -
<PAGE>
                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                         NOTES TO FINANCIAL STATEMENTS


NOTE 5 - COMMITMENT UNDER EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with four employees. Under
two of the four agreements, in the event employment is terminated (other than
voluntarily by the employee or by the Company for cause or upon the death of the
employee), the Company is committed to pay certain benefits. These are:

         1)       the greater of (I) three years' base salary, or (II) the base
                  salary due to Employee for the remaining term of this
                  Agreement, in either case at the greater of the rate in effect
                  at the date of the change in control of Company or at the date
                  of termination; plus

         2)       an amount equal to a multiple of two times the largest total
                  of the bonuses previously paid in any one year by the Company
                  to the Employee.


NOTE 6 - LEASES

The Company leases its administrative offices on a month-to-month basis from a
company owned by certain common stockholders. Total rent expense to the related
party was $2,400 and $2,400 for the years ended December 31, 2000 and 2001,
respectively.

NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash, prepaid expenses, accrued salaries and expenses, and
payables to related parties approximate fair value because of their short
maturities.

NOTE 8 - STOCKHOLDERS EQUITY

During the year ended December 31, 2000, the Company issued its common stock in
exchange for services as follows:

The Company issued 150,000 shares of its common stock to its outside legal
counsel and granted 1,000,000 shares of its common stock to the Company's Chief
Executive Officer as partial payment of accrued salaries. These shares were
issued in lieu of payment for services provided to the Company, and were issued
at a price of $0.02 per share, totaling $23,000.

During the year ended December 31, 2001, the Company issued its common stock in
exchange for services as follows:

The Company issued 430,000 shares of its common stock to four key employees as
consideration for a portion of their accrued salaries and 375,000 shares of its
common stock to a consultant as payment for services. These shares were issued
at $0.02 per share. The Company recorded compensation expense of $16,100.




                                     - 8 -
<PAGE>
                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                         NOTES TO FINANCIAL STATEMENTS


NOTE 9 - INCOME TAXES

The Company has an unused net operating loss carryforward of $1,245,900
available for use on its future corporate federal and state income tax returns.
The Company's evaluation of the tax benefit of its net operating loss
carryforward is presented in the following table. At December 31, the tax
amounts have been calculated using the 34% federal and 5.5% state income tax
rates.

                                                     2000           2001
                                                  ---------       ---------

Taxes currently payable                           $      --       $      --
Deferred income tax benefit                         242,436         458,296
Less: valuation allowance                          (242,436)       (458,296)
                                                  ---------       ---------
Provision (benefit) for income taxes              $      --       $      --
                                                  ==========      ==========



Reconciliation of the Federal statutory income tax rate to the Company's
effective income tax rate at December 31 is as follows:

                                                       2000           2001
                                                    ----------     ----------

Computed at the statutory rates (34%)               $ (157,409)    $ (195,037)
State income taxes, net of federal tax benefit         (16,806)      (20,823)
Change in deferred tax asset valuation allowance       174,215        215,860
                                                    ----------     ----------
Tax provision (benefit)                             $       --     $       --
                                                    ==========     ==========




The components of the deferred tax asset were as follows at December 31:

                                                      2000             2001
                                                    ---------        --------

Deferred tax assets:
     Net operating loss carryforward                $   6,956       $  32,232
     Accrued compensation                             227,954         426,064
     Stock based salaries                              7,526               --
                                                    ---------       ---------
Total deferred tax assets                             242,436         458,296
                                                    ---------       ---------

Deferred tax liabilities                                   --              --
                                                    ---------       ---------

Net deferred tax assets                               242,436         458,296
                                                    ---------       ---------

Valuation allowance, beginning of year                (68,221)       (242,436)
     Increase during the year                        (174,215)       (215,860)
                                                    ---------       ---------
Valuation allowance, end of year                     (242,436)       (458,296)
                                                    ---------       ---------

Net deferred taxes                                  $      --       $      --
                                                    =========       =========





                                     - 9 -
<PAGE>
                           INTERCHANGE MEDICAL, INC.
                         (A Development Stage Company)
                         NOTES TO FINANCIAL STATEMENTS



NOTE 9 - INCOME TAXES, CONTINUED

The net operating loss carryforward is summarized below:

Year Loss Originated                               Year Expiring       Amount
--------------------                               -------------    -----------

December 31, 1999                                      2019             181,294
December 31, 2000                                      2020             490,969
December 31, 2001                                      2021             573,637
                                                                    -----------
         Total available net operating loss                         $ 1,245,900
                                                                    ===========



The utilization of the above loss carryforwards, for federal income tax
purposes, may be subject to limitation resulting from changes in ownership.

NOTE 10 - GOING CONCERN

The Company has minimal capital available to meet future obligations and to
carry out its planned operations. The Company is dependent upon its shareholders
for its financial support. These factors raise substantial doubt about the
Company's ability to continue as a going concern.

In order to begin any significant operations, the Company will have to pursue
other sources of capital, and has plans to raise equity. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.






                                     - 10 -