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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2002

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

                        Commission File Number: 000-33513

                             tds (Telemedicine) Inc.
                 (Name of Small Business Issuer in its charter)

            NEW YORK                                         11-3579554
(State or other jurisdiction of                        (I.R.S. Employer ID No.)
 incorporation or organization)

      One Riverfront Plaza, Newark, New Jersey                  07102
      (Address of principle executive offices)                (Zip Code)

      Issuers telephone number (973) 643-7000

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

                         Common Stock, par value, $.001

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. |X|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

The issuer's revenues for the fiscal year ended December 31, 2002 were
$1,114,312.

<PAGE>

The aggregate market value of the issuer's outstanding voting stock held by
non-affiliates on April 14, 2003, based on the average bid and asked price of
such common equity on the Over the Counter Bulletin Board ("OTCBB") on such
date, was approximately $20,500,000. As of April 14, 2003 there were outstanding
66,007,296 shares of the issuer's Common Stock, par value $.001 per share.

Transitional Small Business Disclosure Format (check one):

        Yes|_| No |X|

Forward Looking Statements

In addition to historical information, this Form 10-KSB contains forward looking
statements relating to such matters as anticipated financial and operational
performance, business prospects, technological developments, results of clinical
trials, new products, research and development activities and similar matters.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. The Company notes that a variety of factors could
cause the Company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in the Company's forward
looking statements. When used in this Form 10-KSB, the words or phrases
"believes," "anticipates," "expects," "intends," "will likely result,"
"estimates," "projects" or similar expressions are intended to identify such
forward looking statements, but are not the exclusive means of identifying such
statements. Such forward-looking statements are only predictions, and the actual
events or results may differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those matters discussed herein in
the sections entitled "Item 1 - Business," and "Item 6 - Management's Discussion
and Analysis or Plan of Operation" particularly the subsection of such Item 6
entitled "Factors That May Impact Future Operations."

The Company cautions readers to review the cautionary statements set forth in
this report and in the Company's other reports filed with the Securities and
Exchange Commission and cautions that other factors may prove to be important in
affecting the Company's business and results of operations. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this report. The Company undertakes no obligation
to publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date of this report.


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<PAGE>

PART I

Recent Developments

As of December 18, 2002 the Company had 3,640,072 shares issued and outstanding
and was solely engaged in the telemedicine diagnostic service business through
its subsidiary tds (Telemedicine) Inc., a Delaware corporation formed July 29,
2002 ("TDS-USA").

For accounting purposes the fiscal year end of the Company has been changed from
that of October 31st to that of December 31st.

On January 7, 2003, the Company effected a one into 18 forward stock split such
that at that time the Company had 65,521,296 shares of its Common Stock issued
and outstanding.

The Company's financial statements for the fiscal years ended October 31, 2001
and 2002 were audited by Stewart H. Benjamin CPA P.C., whose report on such
financial statements did not include any adverse opinion, or disclaimer of
opinion, nor was the report qualified or modified as to audit scope or
accounting principles. There were no disagreements with Stewart H. Benjamin CPA
P.C. on any matter of accounting principles or practices, financial statement
disclosures, or auditing scope or procedures in connection with the audit for
the fiscal year ended October 31, 2001 and 2002 or any financial statements to
be filed for subsequent interim periods preceding dismissal.

However, on February 12, 2003, our board of directors dismissed Stewart H.
Benjamin CPA P.C. as our principal independent public accountant and selected
Weaver & Tidwell of Fort Worth, Texas to serve as our independent public
accountant for the interim period November 1, 2002 to December 31, 2002 and for
the fiscal year ending December 31, 2003. At no time since its engagement has
Weaver & Tidwell had any direct or indirect financial interest in or any
connection with us or any of our subsidiaries other than as independent
accountant. Weaver & Tidwell is associated with BKR Haines Watts Manchester of
Manchester, England, the accountants for the Company's English subsidiaries.

The decision to change independent auditors was unanimously approved by the
Board of Directors of the Company in order to obtain accounting services closer
to the Company's intended initial operations in Texas. Stewart H. Benjamin CPA
P.C. continued to report on the Company's former clothing business operations
which were discontinued by the Company on December 18, 2002.

Effective February 13, 2003, the Company changed its name from Surf Group, Inc.
to tds (Telemedicine) Inc. The Company's CUSIP number was changed to 87237Q 10 4
and its former trading symbol "SRFG" was been changed to "TDST" as a result of
the name change.

Item 1. Description of Business

Historical Business Development


                                       3
<PAGE>

The Company was formed as a New York corporation on November 30, 2000 As a
result of the Company's reverse merger with TDS-USA, the Company through its
subsidiary TDS-USA conducts business only in the telemedicine diagnostic
services industry in which its predecessors have been engaged since January
1998. The Company conducts business in two initial and distinct areas of the
medical industry. The first of these is the Company's traditional base of
dermatology and the second is diabetic retinopathy.

Dermatology Services.

In many parts of the world, individuals with skin conditions are unable to
receive proper treatment because there are no dermatologists located in their
area. Most of these conditions can be treated with a simple treatment plan such
as ointments or removal of the affected area. However, because of the lack of
treatment options, the skin conditions can worsen, become more severe and
sometimes become life-threatening. In addition, the governmental administrative
process can lead to long delays before individuals with skin conditions can be
treated, which in turn, can lead to increased costs of healthcare.

Diabetic Retinopathy.

Currently, individuals with diabetic conditions can go blind if their blood
chemistry balance is not maintained within an acceptable range of tolerances.
One means of monitoring this is by regularly examining the retinal surface of
the individual's eye.

As a result of its work in the Border area of Texas it has become clear to the
Company that diabetic retinopathy screening using a very similar telemedical
service to that provided for dermatology would be welcomed by Medicaid and the
local population.

An almost identical referral pathway, clinic format and relationship with
clinical partners and Medicaid will occur. The service delivery model is almost
identical with nursing staff holding clinics and utilizing both laptops and
specialized cameras in much the same way.

The potential for diabetic retinopathy screening is arguably greater within the
USA than the dermatology service. The reason for this is that the insurance
industry welcomes any service that can demonstrate significant financial
advantages. The case for meeting the cost of screening against the known costs
of paying for the failure to treat early complications caused by diabetes is a
compelling one and one that is accepted by the insurance industry.

These and many other medical conditions exist in which the patient and the
diagnosing physician are separated by either space or time or both. The
telemedicine diagnostic services industry utilizes the internet and digital and
voice telecommunication technologies to bridge this separation of patient and
physician.

TDS-USA has a wholly owned subsidiary tds (Telemedicine) Limited, an English
limited liability entity formed November 24, 1997 ("TDS UK") which in turn has a
wholly owned subsidiary tds (Dermatology) Limited formed December 22, 1998
(TDS-UK-Sub"). Since January 1998, TDS-UK-Sub has been providing diagnostic
telemedical dermatology services to the National Health Service in the United
Kingdom. During that time, TDS-UK-Sub has become established with over 10,000
patients being treated within each of the calendar years ended December 31, 2001
and 2002.

In 2000, TDS-UK management identified an opportunity to expand its telemedicine
diagnostic services to the United States. It is currently anticipated that we
will provide our services initially in Texas, both in the fields of dermatology
and in diabetic retinopathy. Beginning in 2002, TDS-UK management has had
discussions with University of Texas-Medical Branch in Galveston, Texas, or
UTMB, which while recognized as a world leader in the field of telemedicine, has
little experience in the area of "store and forward" technology. Current Company
management continued their discussions with UTMB as to the possibility of
working together to develop suitable telemedicine diagnostic services in Texas.
In the event that TDS-USA and UTMB reach an agreement in this regard, it is not
expected that TDS-USA will be prohibited from partnering with other
universities, hospitals or physician groups (hereinafter referred to as
"Clinical Partners") if necessary due to volume and/or geographic coverage
needs.


                                       4
<PAGE>

Plan of Operations

The following format describes the anticipated association between TDS-USA and
its Clinical Partners and outlines the way in which the parties propose to
address the clinical needs of the population by initially providing telemedicine
diagnostic services within 150 miles of the border between Texas and Mexico (the
"Treatment Area"). This area has been designated by the State of Texas and
Medicaid as the area in which a pilot telemedicine program can be launched.

o     Primary Care Physicians ("PCPs") will refer patients to TDS-USA.

o     TDS-USA will have a centralized location (the "Central Office") (most
      likely in the El Paso area) where administrative staff (the "Central
      Office Staff") will make appointments for patients in medical offices that
      are located within the area of the patient's PCP ("Clinics"). TDS-USA
      expects to hire local residents who are proficient in Spanish to staff the
      Central Office.

o     TDS-USA will provide suitably qualified nursing staff (the "Clinic
      Nurses"), who will be equipped with laptop computers and specialized
      cameras to run the Clinics.

o     Clinic Nurses are expected to consult with the patient and create a
      detailed medical record complete with appropriate images.

o     Clinical Partners are expected to provide suitably qualified clinical
      specialists (the "Specialists") to review the medical records created by
      the Clinic Nurses and to offer a diagnosis and treatment plan as
      appropriate.

o     The Central Office Staff will forward the resultant diagnosis and
      treatment plans to the referring PCP.

o     If the patient requires advance treatment, the Clinical Partner will seek
      to locate suitably qualified local clinical specialists to perform such
      secondary intervention work that is specified by the Clinical Partners'
      Specialists.

It is anticipated that Medicaid will provide TDS-USA with a list of PCPs in the
Treatment Area that participate in the Medicaid program. Those PCPs will then be
made aware of the telemedicine diagnostic services that are available through
TDS-USA and its Clinical Partners.

Company Management intends to identify a variety of suitable locations across
the Treatment Area in which to locate Clinics where Clinic Nurses would be able
to see patients and create the detailed dermatology or retinal pathology medical
record along with appropriate images. These Clinics are expected to be in
existing physician practices, local health centers or hospital outpatient
departments. TDS-USA expects to hire Clinic Nurses and provide the equipment and
supplies for the telemedicine diagnostic services that will be provided at the
Clinic.


                                       5
<PAGE>

Clinic Nurses will be required to be fluent in both English and Spanish, and
have the ability to write in English. In order to allow maximum flexibility and
convenience, Clinic Nurses will provide services to Clinics that are located
near their homes.

When a PCP concludes, after an initial consultation, that a patient requires an
expert opinion by a Specialist, the PCP will create and forward to the Central
Office a standard referral letter. The Central Office Staff will create an
electronic medical record for each patient based on the limited information
contained in the referral letter provided by the PCP. This process is to be
completed on-line and utilizes secure, encrypted software that is password
protected and HIPAA compliant. The day before a patient's appointment, the
Clinic Nurse who will be seeing the patient will download the medical record
from the web site onto their laptop computer.

An appointment with a Clinic Nurse is expected to take approximately 20 minutes.
During the appointment, the Clinic Nurse will create a detailed electronic
medical record regarding the patient's condition. The Clinic Nurse will take a
number of pictures of the appropriate area or areas. The special cameras used by
the Clinic Nurses are specifically designed to allow for clear electronic images
of the condition being imaged.

At the end of the appointment, the Clinic Nurse will forward the medical record
with the images to the Company's web site. The Specialist at the Clinical
Partner who has been assigned to the case will be notified automatically by
email that medical records have been downloaded to the Company's web site. Once
the Specialist has downloaded the medical records, he will be expected to review
the medical records, draft a report and forward it to the Company's web site
within ten (10) working days.

Once the Specialist uploads the diagnosis and treatment plans, the Company web
site will generate an e-mail notifying the Central Office Staff of its
availability. The Central Office Staff will then print the report and forward it
to the originating PCP by e-mail, regular mail or fax. In the vast majority of
cases the report will be self-contained in that the PCP will be able to manage
the ongoing care of his patient according to the management plan established by
the Specialist. In some instances however, the patient will need face-to-face
secondary interventions or additional diagnostic evaluation. This is expected to
be arranged directly by the Specialist and the appropriate Clinical Partner with
notice to the PCP.

In all instances the Central Office Staff will seek to make the patient aware of
the next step in the management plan. On receipt of the original diagnosis and
management plan created by the Specialist, the Central Office Staff will send a
letter to the patient describing such treatment plan. For example, the patient
may be told to visit his PCP or to make an appointment for a secondary
evaluation. This letter is expected to be in both English and Spanish.

Where a secondary intervention is required, the Specialist and the Clinical
Partner will identify the most suitable clinical route for the patient based on
the report and recommendation, and depending on the circumstance, consultation
with the PCP. They will then forward the patient's medical records to the
appropriate clinician.


                                       6
<PAGE>

Medicaid Contract and Other Reimbursement Programs

In the first instance, it is anticipated that the TDS-USA telemedicine
diagnostic services will be offered to Medicaid for an initial period of 3
years. Invoices will be sent to Medicaid at the end of each month and will
describe the services that have been provided, including patient names, Clinic
locations, treatment dates and the names of the referring PCPs. Any treatment
provided by a secondary clinician will be billed to Medicaid by that clinician
and will not be covered by the agreement between TDS-USA and Medicaid.

It is expected that fees will be billed by TDS-USA in the name of the
appropriate Clinical Partner, and that the Service Agreement between the
Clinical Partner and TDS-USA will set forth a service fee to be paid to TDS-USA
out of the proceeds collected in recognition of the costs and expenses incurred
by TDS-USA in connection with this arrangement.

Competitive Business Conditions

Our long-term success depends on the success of adopting our current United
Kingdom telemedicine business model into the United States. Our business plan
has not yet been marketed commercially in the United States. We expect to
conclude a satisfactory resolution of operations and reimbursement issues
shortly. There can be no assurance that these issues will be concluded on a
timely basis or at all. Further, regulatory issues could cause significant
limitations on the services proposed to be rendered.

If our business model can be finalized, its commercial success may depend upon
acceptance by physicians. Physician acceptance will depend upon, among other
things, substantial favorable clinical experience, advantages over alternative
methods of evaluation, cost effectiveness, and favorable reimbursement policies
of third party payors such as insurance companies, Medicare and other
governmental programs.

Our failure to address regulatory issues or to obtain market acceptance, service
efficiency and reliable sub-contractors will materially adversely affect our
business and financial condition.


                                       7
<PAGE>

Dependence on Customers

TDS-USA has no customers or revenue generating operations to date. The largest
two customers of TDS-UK each represent approximately 25% of its revenues. No
other customer is larger than 10% of revenues.

Intellectual Property

The Company's software is licensed from E-Ceptionist Inc. for which the Company
pays a variable per service fee based on activity levels. Other proprietary
know-how is owned directly by the Company and its subsidiaries. No such
proprietary know-how is owned by or licensed from Company officers or employees.
The Company has copyrighted its treatment materials and is applying for
registration of its trademarks in the United States.

Research and Development

During the calendar year ended December 31, 2002, the Company estimates that
TDS-UK has spent (pound)89,000 on software and web site and development
activities, none of which was borne directly by its customers.

Government Regulation

The healthcare regulatory environment may change and have an effect on our
Company

U.S. federal governmental funding for health care programs is subject to
statutory and regulatory changes, administrative rulings, interpretations of
policy, intermediary determinations and governmental funding restrictions, all
of which may materially increase or decrease program reimbursement to healthcare
providers. In recent years, both Congress and state legislatures have attempted
to curb the growth of federal and state spending on such programs. Recent
actions include limitations on payments to hospitals and physicians under the
Medicare and Medicaid programs. No assurance can be given that future funding of
Medicare and Medicaid programs will remain at levels comparable to the present
levels.

Although no comprehensive federal healthcare reform legislation has been
implemented, the active discussion and issues raised by the former
administration, Congress and various other groups have impacted the healthcare
delivery system. Pressures to contain costs and cover a larger percentage of the
population have heightened public awareness and scrutiny of the healthcare
market. In particular, the Balance Budget Act of 1997 (the "Budget Act"),
provided for reimbursement changes intended to slow the increase in Medicare and
Medicaid spending and to expand healthcare coverage to over 7 million uninsured
children. The Budget Act also included a wide range of prevention benefits.
Despite the subsequent enactment of the Balanced Budget Refinement Act of 1999,
(the "BBRA 1999"), and the Balanced Budget Refinement Act of 2000, (the "BBRA
2000"), which partially reversed certain decreases in reimbursement, these
reimbursement changes may actually result in lower provider payments to our
Company. In addition, the Budget Act created a new Medicare Part C, a managed
care option that allows beneficiaries to elect private health plan options for
receiving care, including fee for service plans, PPOs, HMOs and
provider-sponsored organizations. The BBRA 1999 further provided for


                                       8
<PAGE>

increased payments to such Medicare managed care plans. It is not possible to
predict the impact on the Company of this legislation or any future reforms.
There can be no assurance that this legislation or any healthcare reform or
other changes within the healthcare market will not adversely affect the
financial position, results of operations or cash flows of our Company.

Our business needs to comply with HIPAA

The Health Insurance Portability and Accountability Act of 1996 (the "HIPAA"),
mandated, among other things, a package of rules to address so-called
"administrative simplifications." Congress required the United States Department
of Health and Human Services ("HHS") to promulgate a set of interlocking
regulations establishing standards and protections for health information
systems. The first final regulation in this set, Standards for Electronic
Transactions, 65 F.R. 50312, was published on August 17, 2000. The final
regulations regarding Standards for Privacy of Individually Identifiable Health
Information, 67 F.R. 53182, was published on August 14, 2002 and the final rule
regarding the Standard Unique Employer Identifier was published on May 31, 2002
at 67 F.R. 38009. Other regulations have been proposed establishing the unique
identifiers for providers for such transactions and a rule establishing
standards for the security of electronic information systems. All of these
regulations are intended to establish federal standards concerning the use,
disclosure, and protection of health care information which, by its nature, can
be linked to specific individuals. These regulations are highly complex and may
be costly to implement and comply with. Compliance with certain of these
regulations must be achieved by April 14, 2003. The Company believes its web
based format has fully complied with these regulations since 2002. Other related
regulations will have later compliance dates.

Compliance with the HIPAA regulations will likely require our Company to develop
and implement policies and procedures as well as electronic and mechanical
security measures to control the use and disclosure of individually identifiable
health care information, as well as to protect such information from
unauthorized access and use. Such compliance measures may entail unanticipated
costs to our Company. In addition, HIPAA contains civil and criminal fines and
penalties for improper use or disclosure of individually identifiable health
information. Although we expect to make reasonable business efforts to comply
with the HIPAA regulations, there can be no assurance that such compliance
efforts will be effective. Since the majority of entities involved in the health
care industry do not have to comply with the HIPAA regulations until 2003, and
since, therefore, there is no history of enforcement efforts by the federal
government at this time, it is not possible to ascertain the likelihood of
enforcement efforts in connection with the HIPAA regulations or the potential
for fines and penalties which may result from the violation thereof.

We are subject to restrictions on provider and physician relationships

A variety of federal and state laws affect a health care provider's ability to
enter into business arrangements with physicians and other health care
providers, suppliers and payers. The Federal Medicare/Medicaid Anti-Fraud and
Abuse Amendments to the Social Security Act, (the "Anti-Kickback Law"), make it
a felony to knowingly and willfully offer, pay, solicit or receive remuneration
in order to induce business for which reimbursement is provided under the
Medicare or Medicaid programs. In addition to criminal penalties, violations of
the Anti-Kickback Law can lead to civil monetary penalties and exclusion from
the Medicare and Medicaid programs. The scope of prohibited payments in the
Anti-Kickback law is broad and may include economic arrangements involving
hospitals, physicians and other health care providers, including joint ventures,
space and equipment rentals, purchases of physician practices, management and
personal services contracts and physician recruitment activities. HHS
regulations describe certain arrangements or "safe harbors" that will not be
deemed to constitute


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<PAGE>

violations of the Anti-Kickback Law. However, the safe harbors are narrow and do
not cover a wide range of economic relationships which many hospitals,
physicians and other health care providers consider to be legitimate business
arrangements not prohibited by the statute. The regulations describe safe
harbors and do not purport to describe comprehensively all lawful or unlawful
economic arrangements or other relationships between health care providers and
referral sources. Consequently, conduct which falls outside the safe harbors is
not necessarily violative of the Anti-Kickback Law.

Federal Medicare and Medicaid Law (Ethics in Patient Referrals Act of 1989, as
amended commonly referred to as "Stark I" and "Stark II") prohibits physicians
from making referrals of Medicare beneficiaries, Medicaid recipients and
enrollees in certain federal health care programs, for certain designated health
care services to entities in which the referring physician or any immediate
family member has financial interest including an ownership interest or
compensation arrangement, subject to certain statutory exceptions. Stark I and
Stark II also prohibit an entity from billing Medicare, Medicaid, or any other
Federal health care program for services rendered pursuant to a prohibited
referral unless one of several delineated exceptions apply. Violations can
result in denial or recoupment of payment, imposition of substantial civil
monetary penalties and exclusion from Medicare and Medicaid. Stark I and Stark
II contain a number of statutory exceptions for certain arrangements, such as
employment arrangements, personal services arrangements and physician
recruitment activities meeting specified criteria, which are not considered
violative of the Stark I and Stark II prohibitions. Regulations promulgated on
January 4, 2001 with respect to interpretation of Stark II, provide further
clarification regarding the application of the statute.

Furthermore, Texas has a law similar to the Anti-Kickback Law that prohibits a
physician from employing, paying or rewarding any person or entity for securing
or soliciting a patient or patronage.

We believe that the relationship we have with physicians, other providers and
other sources of patient referrals either qualify for safe harbor protection
under the Anti-Kickback Law or do not constitute violations of that law or the
Texas law that prohibits kickbacks. In addition, we believe the financial
relationships we have with physicians comply with the terms of Stark I and Stark
II. However, in light of the narrowness of the safe harbor regulations, and the
scarcity of case law interpreting the Anti-Kickback Law, Stark I and Stark II,
there can be no assurance that we have complied with the Anti-Kickback Law or
Stark I, Stark II or the Texas kickback prohibition, and if not, whether any
sanction imposed would have a material adverse effect on the condition of our
Company.

Enforcement of federal and state antitrust laws against health care providers is
becoming more common, and antitrust liability may arise in a wide variety of
circumstances, including medical staff privilege disputes, third party
contracting, hospital-physician and multi-physician relations and joint
ventures, and merger, affiliation and acquisition activities. Enforcement
activity by federal and state agencies appears to be increasing. Violation of
the antitrust laws could result in criminal and civil enforcement by federal and
state agencies, as well as by private litigants. Under certain circumstances,
immunity from liability for damages may be available under federal and state
peer review laws.

In Texas, a physician is prohibited from aiding or abetting the practice of
medicine by a person, partnership, association or corporation that is not
licensed to practice medicine in the State. We have attempted to structure our
arrangements with physicians in a manner that does not violate this prohibition
of the corporate practice of medicine. However, there is always the possibility


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<PAGE>

that a court may interpret this law to apply to arrangements such as the one
contemplated by our Company.

Reimbursement for Telemedicine Services

Currently, the Medicare and Medicaid programs provide reimbursement for certain
telemedicine services. Further, the Texas Department of Health and Human
Services has created a pilot program for the delivery of telemedicine services
in areas near the border with Mexico. Many private third-party payors also
provide reimbursement for certain telemedicine services. However, the policies
that govern the reimbursement of telemedicine services are always changing.
Hence, there is no guarantee that Medicare, Medicaid or third-party payors will
continue to cover telemedicine services, or that Texas will continue its
telemedicine pilot program at all, or in its current form.

Employees

As of December 31, 2002, TDS-UK maintained 14 employees of whom 11 and 3 were
full time and part time employees, respectively. In addition TDS-UK retained the
services of ten (10) clinical specialists.

Item 2. Description of Property

The Company through its subsidiaries lease 2,200 square feet of office space
from an unrelated third party at Ducie House, Ducie Street, Manchester, England
for a term through December 31, 2007, at a monthly rent of (pound)2,002.

Item 3. Legal Proceedings.

The Company was not involved in any legal proceedings during the fiscal year
ended October 31, 2002 and it and its subsidiaries TDS-USA and TDS-UK are not
involved in any legal proceedings as of the date of this report, other than
routine matters incidental to its business.

PART II

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

The Company's Common Stock traded on the Over-the Counter Electronic Bulletin
Board ("OTCBB") under the trading symbol "SRFG" from the date the Company's Form
211 was accepted by NASD on September 26, 2002 to the Company's change of name
and trading symbol on February 13, 2003. After that date, the Company's trading
symbol has been "TDST".

The following table sets forth the high and low closing bid quotations for the
Company's Common Stock since its initial commencement of trading on the OTCBB.
These quotations reflect inter-dealer prices without retail mark-up, mark-down
or commission and may not represent actual transactions.


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<PAGE>

         For the interim period
         September 2002 to
         October 31, 2002                          High              Low
                                                  $  .756           $ .108

On November 6, 2002 the Company announced that it would change its business from
retail and wholesale clothing to that of telemedicine diagnostic services. On
December 18, 2002 the Company acquired TDS-USA and its wholly owned subsidiary
TDS-UK and the prior clothing business conducted by the Company was
discontinued. Accordingly, stock price information for prior periods do not
reflect the Company's present business.

         For the interim period
         November 1, 2002 to
         December 31, 2002                          High                Low
         [Pre-Split Basis]                        $ 1.75              $ .756

         For the interim period
         January 1, 2003 to
         January 6, 2003
         [Pre-Split Basis]                        $ 4.00             $ .414

On December 18, 2002 the Company declared a one for 18 forward stock split to be
paid to shareholders of record on December 30, 2002 which was issued January 7,
2003.

         For the interim period
         January 7, 2003 to
         April 14, 2003                             High                Low
         [Post-Split Basis]                       $  2.00             $  .10

As of April 14, 2003, there were 66,007,296 shares of Company Common Stock
issued and outstanding held by approximately 26 registered holders of record.
This number excludes individual shareholders holding stock under nominee
security position listings holding in excess of 10,000,000 shares.

The trading volume of our securities fluctuates and may be limited during
certain periods. As a result, the pricing and liquidity of an investment in the
Company's securities may be adversely affected. Because of our stock price, our
Common Stock is subject to the SEC's penny stock rules which adversely affects
the ability of persons to purchase or sell our Common Stock. On April 14, 2003
the last sale on the Over-the-Counter Bulletin Board was $0.77.


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<PAGE>

Dividend Policy

The Company has not paid any dividends on its Common Stock and does not expect
to pay any such dividends in the foreseeable future. There are no restrictions
that limit the Company's ability to pay dividends on its Common Stock.

Securities Authorized for Issuance under
Equity Compensation Plans

The Company has no equity compensation plans in place but continues to evaluate
their utility for attracting and retaining qualified employees.

Recent Sales of Unregistered Securities

The Company issued unregistered securities as of November 1, 2002 as a spin off
of Espo's Ltd. pursuant to the requirements of Rule 10b-17 of the General Rules
and Regulations of the Securities and Exchange Commission. The Company believes
this transaction was exempt from registration since the number of recipients of
the spin-off and the circumstances surrounding their relationship with each
other and the Company fell within the exemption of Section 4(2) of the
Securities Act of 1933 as a transaction not involving a public offering. The
Company relies on the fact that the recipients had the financial sophistication
and had access to the material information with regards to the shares they
received from the spin off.

On October 11, 2002, TDS-USA commenced a private placement of its securities
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933
which closed as of December 3, 2002 raising $632,250 of cash for which TDS
issued 1,100,200 shares of its Common Stock, par value $.01 and 714,400 shares
of its 7 1/2% Series A Preferred Stock, par value $.01. The purchasers were all
non-U.S. resident private investors and the shares issued to them had affixed
restrictive legends as to such shares not being registered under the Securities
Act of 1933. No commissions were paid for the sale of these securities. The
TDS-USA Series A Preferred Stock bear a dividend of 7 1/2% per annum commencing
December 3, 2003 and payable semi-annually. The Series A Preferred Stock is
redeemable by TDS-USA at any time after issuance at $.50 per share plus accrued
but unpaid dividends. The holders of the Series A Preferred Stock have no voting
power whatsoever except that the holders of the Series A Preferred Stock can
elect one director by majority vote to TDS-USA if any remain outstanding after
December 31, 2005. The Series A Preferred Stock shall be converted on a
mandatory basis into Common Stock of TDS-USA on a one for one basis at December
31, 2005 if not redeemed by TDS-USA prior thereto.

On December 18, 2002, the Company acquired TDS-USA pursuant to a merger exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933 by
which the Company issued to the TDS-USA shareholders an aggregate of 2,994,072
shares of Company Common Stock in


                                       13
<PAGE>

exchange for all of the issued and outstanding shares of TDS-USA Common Stock.
The TDS-USA Series A Preferred Shares remained issued and outstanding. The
recipients of the Company's Common Stock pursuant to the merger were all non-US
resident private investors and the shares issued to them had affixed restrictive
legends as to such shares not being registered under the Securities Act of 1933.

In January 2003 the Company sold in a private placement exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933 an additional 486,000
shares of its Common Stock to third party investors for $18,750 to recognize
previously accepted subscription agreements, the funds for which were realized
by the Company only at that time. The investors were all non-US resident private
investors and the shares issued to them had affixed restrictive legends as to
such shares not being registered under the Securities Act of 1933.

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

Result of Operation:



                                       14
<PAGE>

Our revenues for the year-end, December 31, 2002 were $1,114,312. This
represents an increase from 2001 revenues of $1,085.290, a 3% increase. The
Company had a net loss of $487,099 for the year ended December 31, 2002 versus a
net loss of $31,509 for the year ending December 31, 2001. Company management
attributes the small sales growth and resulting operational losses were caused
by a number of factors. As a relatively new and lean Company the time and senior
management were obliged to commit to the procurement of investment monies meant
that their ability to develop new business opportunities was curtailed. This in
particular impacted on the UK operation where Government budgetary constraints
meant that existing contracts were limited towards the end of the year as
financial restraints were applied to activity levels. Ironically the success of
the service was the major cause of this downturn. When money became tight the
fact that the dermatology service was under control as a result of the Company
input meant that what little money was available went on more needy areas of
health care and away from the dermatology service. It is also evident that the
actual financial cost of raising funds over a considerable period of the year
had a significant adverse affect on the Company's performance. The fact that
these costs are handled from an accounting perspective in a different way in
accordance with US generally accepted accounting principles as compared to that
of England also adds to the burden carried in this first year of USA operation.
In parallel with the fund raising, management was also involved in not only
developing the dermatology opportunity in the USA but also in researching and
developing the diabetic retinopathy service. This new venture was felt to be a
critical and very attractive additional service that the Company could offer. It
takes all the experience that the Company has gained in telemedicine and applies
it sensibly to a market that is destined to expand rapidly in both the USA and
the UK. It is particularly attractive in the USA where the insurance aspect of
the market makes a screening programme that realistically and quantifiably saves
the insurer money is a very saleable product. Whilst the performance may appear
disappointing at first glance the operational foundation of the Company for the
future is in many ways stronger.

Sources of Liquidity

Subject to the Company's receipt of the $349,000 capital contribution which is
anticipated to be received in late April 2003, Company management believes the
Company will have a sufficient amount of cash to satisfy its cash requirements
through December 31, 2003.

The Company's internal source of liquidity was from operational cash flow. The
external source of liquidity came from its private placements. In December 2002,
TDS-USA raised $632,250 as a result of TDS-USA's private placement of its
securities with private investors, a further $18,750 was received in January
2003 and the Company expects to receive an additional capital contribution of
$349,000 in April 2003.

Trends

Although Company operations can be adversely affected by governmental budgetary
constraints, Company management is not aware of any known trends, events or
uncertainties that have had or that are reasonably expected to have material
impact on the net sales or revenues or income from continuing operations.


                                       15
<PAGE>

Seasonality

Management does not consider its telemedical diagnostic service business to be
seasonal.

No operating history in United States

We have no operating history in the United States. Our operations are subject to
all of the risks inherent in a development stage business in the United States.
The likelihood of our success in the United States must be considered in light
of the problems, expenses, difficulties, complications and delays frequently
encountered in connection with a new business and the competitive environment in
which we will operate. Our efforts in the United States have been limited
primarily to organizational activities and negotiations with potential partners
in the United States and we have no revenues to date from the United States. Our
operating history in the United States is insufficient for an investor to rely
on such history in making a judgment as to our future performance in the United
States. We cannot be certain that our United States business strategy will be
successful or that we will successfully address the risks and uncertainties
related to our lack of operating history in the United States.

Our reliance on international operations exposes us to additional risks.

At the current time, 100% of our sales were derived from the United Kingdom. We
expect international sales and the Middle East will continue to represent a
significant percentage of our total sales, even though we intend to increase our
operations within the United States. Our continued reliance on international
sales will subject us to fluctuations in currency exchange rates and other risks
of foreign operations, including:

      o     tariff regulations;

      o     export license requirements;

      o     unexpected changes in regulatory requirements;

      o     extended collection periods for accounts receivable;

      o     potentially inadequate protections of intellectual property rights;

      o     local taxes; and

      o     restrictions on repatriation of earnings.


                                       16
<PAGE>

These factors could have a materially adverse effect on our ability to maintain
and expand profitable sales in the United Kingdom. Our failure to create
profitable sales in the United States would have a material adverse effect on
our business and financial condition.

Our success will depend on developing and commercializing our telemedicine
business model.

Our long-term success depends on the success of adopting our current United
Kingdom telemedicine business model into the United States. Our business plan
has not yet been marketed commercially in the United States. We expect to
conclude a satisfactory resolution of operations and reimbursement issues
shortly. There can be no assurance that these issues will be concluded on a
timely basis or at all. Further, regulatory issues could cause significant
limitations on the services proposed to be rendered.

Our future operating results are unpredictable

In part because of our lack of operating history in the United States and our
unproven business model in the United States, it is difficult to accurately
forecast our future United States revenues and results of operations. We have no
meaningful historical financial data upon which to base planned operating
expenses in the United States, and our sales and operating results are difficult
to forecast. A variety of factors may cause our annual and quarterly operating
results to fluctuate significantly. Many of these factors are outside of our
control. They include: the effectiveness of our United States sales and
marketing campaign; market acceptance of our services; introductions by our
competitors of new or enhanced services; price competition and fluctuations in
the prices of the services we sell; changes in the management team and key
personnel; and fluctuations in general economic conditions and economic
conditions specific to our industry. One or more of these factors could
materially and adversely affect gross margins and operating results in future
periods. Given our stage of development in the United States, there can be no
assurance as to the attainability of the estimates, the reliability of the
assumptions on which they are based, or that we will, at any point, attain
profitability.

We may need additional funding

Management predicts that we will have sufficient capital to operate our business
for more than a year. However, it is possible that costs associated with our
business will exceed the our projections. Taking into account projected revenues
from operations, we may thereafter require additional capital to further expand
our operations, as well as for additional operating expenses in preparation for
such expansion. We do not know how much additional funding we may require. If we
do not have sufficient capital to implement our business plan and fund
operations, and may therefore be required to seek other sources of financing,
such sources (assuming we are able to locate such alternative sources of
financing) may be on terms less favorable to us than those in the offering. The
failure to secure adequate funding could have a material adverse effect on our
Company.

We are dependent upon certain key personnel

Our success depends to a significant extent on the performance and continued
service of our senior management and certain key employees. Competition for
highly skilled employees with technical, management, marketing, sales, health
care and other specialized training is intense, and there can be no assurance
that we will be successful in attracting or retaining such personnel.
Specifically, we may experience increased costs in order to attract and retain
skilled employees.


                                       17
<PAGE>

Although we intend to enter into long-term employment agreements with members of
senior management in the future, there can be no assurance that such employees
or any other employees will not leave the Company or compete against the
Company. Our failure to attract or retain qualified employees could have a
material adverse effect on our business, operating results and financial
condition.

Our success will depend, in part, on our ability to keep pace with technological
and marketplace changes.

The telemedicine market is characterized by rapidly changing technology, new
services and industry standards. Accordingly, our ability to compete depends on
our ability to develop new services and products and improve existing ones.

We face significant competition.

The telemedicine services market is highly competitive. Many of our potential
competitors in both North America and the United Kingdom have access to
significantly greater financial, marketing and other resources. Further, the
telemedicine services market is characterized by rapid product development and
technological change. Our present and future services could become obsolete or
uneconomic through technological advances by one or more of potential
competitors. Our future success will depend on our ability to remain competitive
with other developers of medical telemedicine services and therapies.

We are controlled by management

Our executive officers, directors and affiliated individuals together
beneficially own over 60% of the voting control of our capital stock. As a
result, these shareholders, acting together, will be able to influence
significantly and control most matters requiring approval by our shareholders,
including the election of directors. Such a concentration of ownership may have
the effect of delaying or preventing a change in control of our Company.

We might not be able to maintain or effectively manage our sales force.

We intend to utilize a domestic direct sales and marketing force to sell and
promote our services in the United States. We might not be able to continue to
attract and retain qualified and capable individuals who can successfully
promote our services.

Our business could be subject to liability claims.

The provision of medical services involves the risk of patient liability claims.
We currently expect to obtain liability insurance prior to providing services.
This insurance may not be available to us in the future. A successful claim
against or settlement by us in excess of our insurance coverage or our inability
to maintain insurance could have a material adverse effect on our business and
financial condition.

No dividends

To date, we have not paid any cash dividends on our shares of Common Stock, and
do not expect to declare or pay any dividends on the Common Stock in the
foreseeable future. In addition, the payment of cash dividends are limited to
the extent TDS-USA is obligated to pay 7 1/2% dividends on its Series A
Preferred Shares and redeem such preferred shares on or before December 31,
2005. Dividends may be limited or prohibited by the terms of future loan
agreements or the future authorization and issuance of preferred stock.

Broker-Dealer Restrictions

The impact of "penny stock" rules under the Securities Exchange Act of 1934 on
the ability of broker-dealer to sell Company shares. It is unlawful for a broker
or dealer to effect a transaction in any penny stock for or with the account of
a customer unless, prior to effecting such transaction, the broker or dealer has
furnished to the customer a document containing the certain required information
set forth in Section 15(g)(2) of the Securities Exchange Act of 1934 and obtains
a manually signed copy from its customer. Penny stocks can be very risky. Penny
stocks are low-priced shares of small companies not traded on an exchange or
quoted on NASDAQ. Prices often are not available. Investors in penny stocks
often are unable to sell stock back to the dealer that sold them the stock.
Thus, you may lose your investment. Be cautious of newly issued penny stock.
Your salesperson is not an impartial advisor but is paid to sell you the stock.
Do not rely on the salesperson, but seek outside advice before you buy any
stock. Federal law requires your salesperson to tell you the "offer" and the
"bid" on the stock, and the "compensation" the


                                       18
<PAGE>

salesperson and the firm receive for the trade. The "penny stock" rules under
the Securities Exchange Act of 1934 limit the broker-dealer to sell Company
shares only to customers that fill out all paper work required by the Securities
and Exchange Commission in order to purchase such shares, all of which will
limit the liquidity of the Company shares.

Item 7. Financial Statements.

The information in response to this item is set forth in the Financial
Statements beginning on page F-1 of this report on Form 10-KSB.

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.

Set forth below is information concerning our directors and officers as of
December 18, 2002 through the date hereof.

      Executive Officer    Term                    Age         Title
      -----------------    ----                    ---         -----

      Roger A. Coomber     December 2003           51    Chief Executive
                                                         Officer and Director

      Keith Freeman        December 2003           50    Chief Medical
                                                         Officer and Director

      Simon A.M. Leatham   December 2003           51    Chief Financial
                                                         Officer and Director

      Robin A. Waterer     December 2003           46    Secretary and Director

Roger Coomber - Chief Executive Officer and Director

Roger Coomber, age 51, has been Chief Executive Officer of the Company since
December 18, 2002, was Chief Executive Officer of TDS-USA since inception and
Managing Director of TDS-UK since its inception in November 1997. Mr. Coomber is
also a Director of Bentleigh Cross Limited, a company which builds and operates
nursing homes and close care developments in England.

Professor Keith Freeman - Chief Medical Officer and Director

Professor Freeman, age 50, has been Chief Medical officer and Director of the
Company since December 18, 2002, was Chief Medical Officer and a director of
TDS-USA since inception and of TDS-UK since its inception in November 1997.
Professor Freeman is the Honorary Professor of Telemedicine and Telecare at the
University of Wales, Swansea, is a member of the Teledermatology Special
Interest Groups of the American Telemedicine Association and British Association
of Dermatologists and is past Vice -Chair of the UKeHealth Association.
Professor Freeman is also a director of Avienda Ltd., an e-health consultancy
based in Wales.


                                       19
<PAGE>

Simon Leatham, FCA - Chief Financial Officer and  Director

Simon Leatham has been Chief Financial Officer and Director of the Company since
December 18, 2002 and Chief Financial Officer and Director of TDS-USA inception
and Financial Director of TDS-UK since 2002. Mr. Leatham is a chartered
accountant and is also a Director of Bentleigh Cross Limited, a company which
builds and operates nursing homes and close care developments in England.

Robin Waterer M.A., LLB - Company Secretary and Non-Executive Director

Robin Waterer has been Company Secretary and Non-Executive Director of the
Company since December 18, 2002 and Secretary and Director of TDS-USA inception
and Secretary of TDS-UK since February 1999 and Director of TDS-UK since
December 2000. Mr. Waterer is Director and co-founder of Bentleigh Cross
Limited, a company which builds and operates nursing homes and close care
developments in England.

Compliance with Section 16(a) of the Exchange Act of Current Management

The foregoing directors filed Form 3 as to their ownership of Company securities
on January 3, 2003 and have timely complied with Section 16(a) of the Exchange
Act of 1934.

Item 10. Executive Compensation

Set forth below is information with respect to compensation paid to or accrued
by the Company for the fiscal years ended December 31, 2000, 2001 and 2002 to
the Company's Chief Executive Officer and other executive officers.

--------------------------------------------------------------------------------
                                                                  Restricted
                                                                    Options
                                 Base                  Other       Principle
                                 Annual               Annual         SARs
  Name and Position     Year     Salary    Bonus    Compensation  Stock Awards
--------------------------------------------------------------------------------
Roger Coomber, Chief    2002    $ 91,000    N/A             N/A       N/A
Executive Officer and   2001    $ 62,800    N/A             N/A       N/A
Director                2000    $ 31,400    N/A             N/A       N/A
--------------------------------------------------------------------------------
Keith Freeman, Chief    2002    $111,470    N/A             N/A       N/A
Medical Officer and     2001    $ 86,350    N/A             N/A       N/A
Director                2000    $ 31,400    N/A             N/A       N/A
--------------------------------------------------------------------------------


                                       20
<PAGE>

--------------------------------------------------------------------------------
Simon Leatham, Chief    2002         N/A    N/A         $12,786       N/A
Financial Officer and   2001         N/A    N/A         $ 2,115
Director(1)(2)
--------------------------------------------------------------------------------
Robin Waterer,          2002     $28,260    N/A             N/A       N/A
Secretary and           2001     $15,700    N/A             N/A       N/A
Director(2)             2000     $15,700    N/A             N/A       N/A
--------------------------------------------------------------------------------

(1)   Paid on a daily rate estimated for an annual basis.

(2)   Employed on a part time basis.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

The principal shareholders of the Company as of December 31, 2002 are as
follows:

--------------------------------------------------------------------------------
 Title of Class    Name and Address of    Amount and Nature      Percent of
                    Beneficial Owner     of Beneficial Owner      Class(3)
--------------------------------------------------------------------------------
  Common Stock   Roger Coomber              20,148,480(1)          30.5%
  Common Stock   Keith Freeman              14,653,440(2)          22.2%
  Common Stock   Simon Leatham                      -0-              -0-
  Common Stock   Robin Waterer               4,579,200              6.9%
  Common Stock   Directors and Officers     39,381,120             59.7%
                 as a Group
--------------------------------------------------------------------------------

(1)   Roger A. Coomber disclaims the 915,840 shares of Common Stock held by his
      son, J.A. Coomber, and the 915,840 shares of Common Stock held by his
      other son, Stephen R. Coomber.

(2)   Keith Freeman disclaims the 2,747,520 shares held by K and S.E. Freeman,
      as trustees

(3)   Based on 66,007,296 shares outstanding as of March 27, 2003. The Company
      Common Stock underwent a 1 into 18 forward stock split effective January
      6, 2003.

The Company does not have any authorized preferred stock and there are no
outstanding options, warrants, rights, conversion privilege or similar
obligations. There are no arrangements that would result in a change of control
of the Company. There are no rights for any person to acquire beneficial
ownership of any other shares of the Company, except for the conversion rights
of the holders of TDS-USA Series A Preferred Stock. Company management has not
entered into any voting trust or similar agreements involving Company
securities.

Item 12. Certain Relationships and Related Transactions

Messrs. Coomber, Leatham and Waterer are directors of Bentleigh Cross Limited
which has no intercompany relationships with the Company and its subsidiaries.

Item 13. Exhibits and Reports on Form 8K.


                                       21
<PAGE>

      (a)  Index to Exhibits

                COMPANY FINANCIAL STATEMENTS                         PAGE
                Report of Independent Certified Public Accountant    F-1#

                Balance Sheets as of December 31, 2002 and 2001      F-2

                Statements of Operations for the
                years ended December 31, 2002 and December 31, 2001  F-3

                Statements of Shareholders'
                Equity for the years ended December 31, 2002
                and 2001                                             F-4

                Statements of Cash Flows for
                the years ended December 31, 2002 and 2001           F-5

                Notes to Financial Statements                        F-6 - F-10#

           #    To be filed by amendment

           3(i)  Articles of Incorporation*

            (ii) By-Laws of tds (Telemedicine) Inc.*

           4     Certificate of Designation of Series A Preferred Stock of TDS
                 (Telemedicine) Inc.

           21.   Company Subsidiaries

           23.   Consent of Accountants #

           99.1  Certification of Chief Executive Officer Pursuant to Section
                 906 of the Sarbanes-Oxley Act of 2002 (18.U.S.C 1350)#

           99.2  Certification of Chief Financial Officer Pursuant to Section
                 906 of the Sarbanes-Oxley Act of 2002 (18.U.S.C. 1350)#

      --------------
      *     Previously filed with the Company's Form 10SB12G on September 3,
            2002.

      #     To be filed by amendment

      (b)   Reports on Form 8K. Reports on Form 8K were filed during the last
            quarter of the period covered by this report as follows:

            On November 14, 2003, the Company reported that its principal
      shareholders had entered into an agreement to sell an aggregate of
      4,760,250 pre-split shares, or approximately 96% of the Company's Common
      Stock to a group


                                       22
<PAGE>

      of individual purchasers; that the Company's existing directors would
      resign and that four persons designated by the purchasers would be elected
      as the new directors and officers of the Company. Following the
      consummation of the transactions, the Company would merge with TDS
      (Telemedicine) Inc. (TDS-USA") with the Company surviving and TDS becoming
      a subsidiary of the Company.

            On January 3, 2003, the Company reported that the purchase had been
      completed on December 18, 2002, the new directors and officers of the
      Company elected, the merger between the Company and TDS-USA consummated
      and the wholesale surf clothing business in which the Company had
      historically been engaged was sold to Jeffrey Esposito, the former Company
      CEO. As a result of the sale of the wholesale clothing business, the
      Company was at that time engaged solely in the telemedicine diagnostic
      services industry in which its predecessors have been engaged since
      January 1998.


                                       23
<PAGE>

Item 14. Controls and Procedures

The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, the Chief Executive and Chief Financial officers of the Company
concluded that the Company's disclosure controls and procedures were adequate.

The Company made no significant changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation of those controls by the Chief Executive and Chief Financial
officers.


                                       24
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                          tds (TELEMEDICINE) INC.


Date: April 15, 2003                            /s/ Roger Coomber
                                                -------------------------
                                          Roger Coomber
                                          Chief Executive Officer


Date: April 15, 2003                      /s/ Simon A.M. Leatham
                                          -------------------------------
                                          Simon A.M. Leatham
                                          Principal Financial Officer and
                                          Principal Accounting Officer


                                       25
<PAGE>

                                 CERTIFICATIONS

I, Roger Coomber, certify that:

1. I have reviewed this report on Form 10-KSB of tds (Telemedicine) Inc.;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed
such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared; b) evaluated the effectiveness of the
registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this report on April 15, 2003; and c) presented in
this report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors: a) all significant deficiencies in the design
or operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal
controls; and b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

SIGNATURE                     TITLE(S)                DATE
                              Principal Executive     April 15, 2003
                              Officer
/s/ Roger Coomber
---------------------------
Roger Coomber


                                       26
<PAGE>

                                 CERTIFICATIONS

I, Simon A.M. Leatham, certify that:

1. I have reviewed this report on Form 10-KSB of tds (Telemedicine), Inc.;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed
such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared; b) evaluated the effectiveness of the
registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this report on April 15, 2003; and c) presented in
this report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors: a) all significant deficiencies in the design
or operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal
controls; and b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

SIGNATURE                     TITLE(S)                DATE
                              Chief Financial         April 15, 2003
                              Officer
/s/ Simon A.M. Leatham
-----------------------------
Simon A.M. Leatham


                                       27
<PAGE>

                             tds (TELEMEDICINE) INC.
                           CONSOLIDATED BALANCE SHEET
                           DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                             ASSETS
                                                               2002            2001
                                                             ---------      ---------
<S>                                                          <C>            <C>
CURRENT ASSETS
   Cash                                                      $  49,585      $     290
   Trade accounts receivable                                   149,820        246,996
   Receivable from directors                                    40,501         50,863
   Prepaid expenses                                                 --          8,960
   Subscriptions receivable                                     71,223             --
                                                             ---------      ---------

       Total current assets                                    311,129        307,109

PROPERTY AND EQUIPMENT, at cost
   Medical equipment                                           118,727         70,694
   Other                                                       305,334        141,909
                                                             ---------      ---------

                                                               424,061        212,603
   Less accumulated depreciation                               157,963         55,884
                                                             ---------      ---------

                                                               266,098        156,719
                                                                            ---------

TOTAL ASSETS                                                 $ 577,227      $ 463,828
                                                             =========      =========

                LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
   Notes payable                                             $  33,541      $ 112,858
   Checks issued in excess of bank balances                     31,028          1,596
   Accounts payable                                            120,600        105,409
   Taxes payable                                               147,985        133,162
   Capital lease - current                                      96,646         64,852
   Other accrued expenses                                       81,014         62,380
                                                             ---------      ---------

       Total current liabilities                               510,814        480,257

LONG-TERM LIABILITIES
   Capital lease                                                45,162         85,589
                                                             ---------      ---------

       Total liabilities                                       555,976        565,846

MINORITY INTEREST                                              357,200             --

MEMBERS' EQUITY
   Common stock, $.001 par value, 100,000,000 shares
     authorized 65,521,296 shares issued and outstanding
     at December 31, 2002                                       65,521         46,764
   Additional paid-in capital (discount)                       233,381        (22,912)
   Accumulated other comprehensive income                      (17,783)         4,099
   Accumulated deficit                                        (617,068)      (129,969)
                                                             ---------      ---------

                                                              (335,949)      (102,018)
                                                             ---------      ---------

TOTAL LIABILITIES AND MEMBERS' EQUITY                        $ 577,227      $ 463,828
                                                             =========      =========
</TABLE>

                  The Note to Consolidated Financial Statments
                    are an integral part of this statement.


                                      F-2
<PAGE>

                           tds (TELEMEDICINE) INC.
                    CONSOLIDATED STATEMENT OF OPERATIONS
                   YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                   2002                 2001
                                               ------------        ------------

OPERATING REVENUES
    Medical consultations                      $  1,114,312        $  1,085,290
                                               ------------        ------------

          Total operating revenues                1,114,312           1,085,290

COST OF SALES                                       694,949             592,320
                                               ------------        ------------

          Gross profit                              419,363             492,970

GENERAL AND ADMINISTRATIVE                          866,426             496,669
                                               ------------        ------------

          Loss from operations                     (447,063)             (3,699)

OTHER INCOME (EXPENSE)
    Interest expense                                (40,036)            (27,810)
                                               ------------        ------------

          Loss before income tax                   (487,099)            (31,509)

INCOME TAX                                               --                  --
                                               ------------        ------------

          Net loss                             ($   487,099)       ($    31,509)
                                               ============        ============

Loss per share:
    Basic                                      ($      0.01)       ($      0.00)
                                               ============        ============

Weighted average number
    of shares outstanding
      Basic                                      47,725,051          46,764,000
                                               ============        ============

                  The Note to Consolidated Financial Statments
                    are an integral part of this statement.


                                      F-3
<PAGE>

                             tds (TELEMEDICINE) INC.
              CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                   Additional        Other
                                              Common Stock          Paid-in       Accumulated
                                         ----------------------     Capital      Comprehensive  Accumulated
                                           Shares        Amount    (Discount)    Income (Loss)     Deficit         Total
                                         ----------     -------     ---------      ---------      ---------      ---------
<S>                                      <C>            <C>         <C>            <C>            <C>            <C>
Balance, January 1, 2001                 46,764,000     $46,764     ($ 22,912)     $   2,340      ($ 98,460)     ($ 72,268)

   Other comprehensive income                    --          --            --          1,759             --
   Net loss                                      --          --            --             --        (31,509)

      Total comprehensive income                 --          --            --             --             --        (29,750)
                                         ----------     -------     ---------      ---------      ---------      ---------

Balance, December 31, 2001               46,764,000     $46,764     ($ 22,912)     $   4,099      ($129,969)     ($102,018)

   Sale of common stock                   7,129,296       7,129       257,921                                      265,050

   Reverse acquisition of
     Surf Group, Inc.                    11,628,000      11,628        (1,628)                                   $  10,000

   Other comprehensive income (loss)             --          --            --        (21,882)            --
   Net loss                                      --          --            --             --       (487,099)

      Total comprehensive
          income (loss)                          --          --            --             --             --       (508,981)
                                         ----------     -------     ---------      ---------      ---------      ---------

Balance, December 31, 2002               65,521,296     $65,521     $ 233,381      ($ 17,783)     ($617,068)     ($335,949)
                                         ==========     =======     =========      =========      =========      =========
</TABLE>

                  The Note to Consolidated Financial Statments
                    are an integral part of this statement.


                                      F-4
<PAGE>

                             tds (TELEMEDICINE) INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                               2002          2001
                                                            ---------      ---------
<S>                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                               ($487,099)     ($ 31,509)

    Adjustments to reconcile net loss
     to net cash used in operating activities:
        Depreciation                                         102,079         55,496
        Gain on sale of equipment                                 --           (356)
        Changes in assets and liabilities:
          Trade accounts receivable                           97,176       (238,141)
          Prepaid expense                                      8,960         (2,842)
          Accounts payable and accrued expenses               48,648        249,480
          Other comprehensive income                         (21,882)         1,759
                                                           ---------      ---------

            Net cash provided by (used in)
                operating activities                        (252,118)        33,887

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of equipment                               --         40,777
    Advance to directors                                      10,362        (18,262)
    Purchase of property and equipment                      (161,752)       (17,946)
                                                           ---------      ---------

             Net cash provided by (used in)
                investing activities                        (151,390)         4,569


CASH FLOWS FROM FINANCING ACTIVITIES:
    Bank overdrafts                                           29,432        (35,034)
    Proceeds from debt                                            --         53,651
    Payments on debt                                        (137,656)       (56,783)
    Proceeds from sale of common stock                       203,827             --
    Proceeds from subsidiary's sale of preferred stock       357,200             --
                                                           ---------      ---------

            Net cash provided by (used in)
                financing activities                         452,803        (38,166)
                                                           ---------

            Net increase in cash and cash equivalents         49,295            290

CASH AND CASH EQUIVALENTS, beginning of year                     290             --
                                                           ---------      ---------

CASH AND CASH EQUIVALENTS, end of year                     $  49,585      $     290
                                                           =========      =========

SUPPLEMENTAL DISCLOSURES OF
CASH FLOWS INFORMATION:
    Cash paid during the year for:
      Interest                                             $  39,349      $  27,810
                                                           =========      =========

      Income taxes                                         $      --      $      --
                                                           =========      =========

NET CASH INVESTING AND FINANCING ACTIVITIES
    Capital lease acquisitions                             $  49,706      $ 199,974
                                                           =========      =========

</TABLE>

                  The Note to Consolidated Financial Statments
                    are an integral part of this statement.


                                      F-5