<PAGE>

===============================================================================



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

                                   FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE
     ACT OF 1934

                   FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999

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

                         COMMISSION FILE NUMBER 1-13009

                       MEDICAL RESOURCES MANAGEMENT, INC.
           (Name of small business issuer as specified in its charter)

              NEVADA                                            95-4607643
    (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                      Identification No.)

932 GRAND CENTRAL AVENUE GLENDALE, CALIFORNIA                    91201
    (Address of principal executive offices)                  (Zip Code)

                                 (818) 240-8250
              (Registrant's telephone number, including area code)

       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 per share

Check whether the Registrant (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 ]

The Registrant's revenues for the fiscal year ended October 31, 1999 were
$11,728,537.

As of February 9, 2000, the aggregate market value of the voting stock held by
non-affiliates of the Registrant (based upon the average of the closing bid and
asked prices on such date) was approximately $1,172,000.

Documents incorporated by reference: Certain responses to Part III are
incorporated herein by reference to information contained in the Registrant's
definitive proxy statement for its 2000 Annual Meeting of Stockholders to be
filed with the Securities and Exchange Commission on or before February 29,
2000.

================================================================================

<PAGE>

                                     PART I

FORWARD-LOOKING STATEMENTS

     This Report on Form 10-KSB includes certain statements that may be deemed
to be "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The sections of this Report on Form 10-KSB
containing such forward-looking statements include "Description of Business,"
"Historical Background," "Growth," "Acquisitions," "Products and Services,"
"Marketing and Sales," "Markets," "Government Regulations," Potential Exposure
to Liability", "Competition" and "Transition to Year 2000" under Item 1 below,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" under Item 6 below. Statements in this Form 10-KSB which address
activities, events or developments that we expect or anticipate will or may
occur in the future, including such topics as future issuances of shares, future
capital expenditures (including the amount and nature thereof), expansion and
other development and technological trends of industry segments in which the
registrant is active, business strategy, expansion and growth of the
registrant's and its competitors' business and operations and other such matters
are forward-looking statements. Although we believe the expectations expressed
in such forward-looking statements are based on reasonable assumptions within
the bounds of our knowledge of our business, a number of factors could cause
actual results to differ materially from those expressed in any forward-looking
statements, whether oral or written, made by or on our behalf.

     Our operations are subject to factors outside our control. Any one, or a
combination, of these factors could materially affect the results of our
operations. These factors include: (a) changes in levels of competition from
current competitors and potential new competition; (b) loss of some significant
customers; and (c) changes in availability or terms of working capital financing
from vendors and lending institutions. The foregoing should not be construed as
an exhaustive list of all factors that could cause actual results to differ
materially from those expressed in forward-looking statements made by us.
Forward-looking statements made by or on our behalf are based on a knowledge of
our business and the environment in which we operate, but because of the factors
listed above, actual results may differ from those anticipated results described
in these forward-looking statements. Consequently, all of the forward-looking
statements made are qualified by these cautionary statements and it is possible
that the actual results or developments anticipated by us will not be realized
or, even if substantially realized, that they will not have the expected
consequences to or effects on our business or operations.



ITEM 1.  DESCRIPTION OF BUSINESS

     Medical Resources Management, Inc. makes mobile laser/surgical services
available to our customers by providing this equipment on a per procedure basis
to hospitals, out patient surgery centers, and physicians' offices. We provide
these mobile lasers with technical support to ensure the lasers are working
correctly for the physicians. We also provide other medical equipment on a
rental basis to hospitals and surgery centers. This equipment is used throughout
such facilities to supplement their requirement for certain medical equipment.
The combination of mobile laser/surgical services and medical equipment rental
illustrates our overall strategy and focus on diversification.

     Our laser/surgical services focus on two of the most rapidly growing areas
of the health care industry: managed care and cosmetic surgery. For managed
care, minimally invasive procedures can be performed by physicians at hospitals
who rent our laser equipment. The hospitals that are our customers find the
investment in the latest laser surgery equipment and trained technicians to be
uneconomical. For cosmetic surgery, by renting our equipment, the physicians
benefit from having a multitude of different laser technologies available to
offer to their patients without the burden of investing a significant amount of
money. In both instances, physicians and hospitals receive technical support and
expertise which is provided with the equipment, which allows the staff to
concentrate on their duties without the additional tasks of running a laser.


                                       2
<PAGE>

     We have approximately 600 active surgical service accounts in California,
Arizona, Utah, Colorado and Nevada and experience a high rate of repeat business
from the hospitals, surgery centers and doctors that we serve. The market
encompasses many disciplines including plastic/cosmetic surgery, dermatology,
orthopedic surgery, otolaryngology, urology, obstetrics, gynecology,
ophthalmology, general surgery, podiatry and dentistry. Equipment is becoming
more specialized to the medical procedures involved, and technical training of
the physician, regarding the use of equipment, is a significant part of our
business.

     Physiologic Reps, Inc. ("PRI") operates as our largest wholly owned
subsidiary. Throughout this document, we are referencing our business, and our
subsidiaries, including PRI, in the historical context. We are headquartered at
932 Grand Central Ave., Glendale, California.

HISTORICAL BACKGROUND

     Our largest wholly owned operating subsidiary, PRI, was incorporated in
California in 1973 and moved to its present headquarters building in 1994,
located in Glendale, California. PRI also has sales and service offices in
Stockton, CA, Dublin, CA and Phoenix, AZ. PRI produced approximately 75% and 73%
our consolidated revenues during the fiscal years ended October 31, 1999 and
1998, respectively.

     We entered the hospital equipment rental market in 1974, the mobile
laser/surgical services market in 1987, cosmetic skin resurfacing in 1994 and
leg vein treatment and tattoo removal in 1997. We began to expand our mobile
laser/surgical services to the doctors' offices and their clinics in 1995. This
business is complementary to our existing laser/surgical services which we
provide to hospitals. In 1997, we made the decision to expand our cosmetic
services to include specialized lasers for treatment of vascular lesions,
pigmented lesions and tattoo removal.

     During the past few years, revenue from our mobile laser/surgical services
business has exceeded revenue from our medical equipment rental business.
However, we have a large array of general medical equipment which we rent,
primarily to hospitals, and have acquired substantial additional general medical
equipment since fiscal 1997. Our inventory of medical equipment includes an
extensive variety of medical devices, serving a broad range of hospital
departments or needs. This wide array of medical rental equipment, delivered to
customers on very short notice, was our primary business until about 1987, when
we developed the mobile surgical laser business. During fiscal 1997, we began to
renew our emphasis on the rental of general medical equipment.

GROWTH

     We have historically focused on providing rental and other services to our
clients on an as needed basis. As a result, we have established long-term
relationships with a number of physicians, hospitals and other medical care
providers. We believe that such relationships provide an opportunity to
introduce additional products to these customers by expanding our product lines
beyond laser/surgical services and medical equipment rentals.

     Our strategic plan is to grow both (1) through internal expansion and (2)
the acquisition of other companies in the medical services and equipment rental
business to take advantage of current opportunities in the market place.
Opportunities for growth are created because a wider range of new surgical laser
equipment is coming to market with features oriented toward a wider variety of
medical specialties. This is increasing the number of surgical laser procedures
performed. Another factor favoring growth of surgical laser rentals by hospitals
is the effort by managed care to reduce costs through less invasive procedures.
The managed care effort has also reduced funds available for investment in new
equipment and training.


                                       3
<PAGE>

ACQUISITIONS

     On March 31 1997, we acquired 100% of the issued and outstanding capital
stock of Pulse Medical Products, Inc. ("Pulse"), headquartered in Boise, ID, in
exchange for 325,000 shares of our common stock. As a result, Pulse became our
wholly owned subsidiary. Pulse rents medical equipment and sells related
equipment and supplies. Pulse conducts its business in Idaho, Montana, Utah,
Colorado, Minnesota and Wyoming. Pulse has continued to operate as our wholly
owned subsidiary, with its headquarters in Boise, ID.

     On June 30 1997, we acquired 100% of the issued and outstanding capital
stock of Laser Medical, Inc. ("Laser Medical"), headquartered in Murray, UT, in
exchange for 190,000 shares of our common stock. As a result, Laser Medical
became our wholly owned subsidiary. In addition, we obtained a non-compete
agreement from the principal former shareholder of Laser Medical in
consideration of the payment of $80,000 in cash. Laser Medical provides mobile
laser/surgical services to hospitals, out patient surgery centers, and
physicians' offices. Laser Medical operates its business in Utah and Colorado.
Since the date of its acquisition, Laser Medical has operated as our wholly
owned subsidiary, with its headquarters in Murray, UT.

     Also on June 30, 1997, we acquired 100% of the issued and outstanding
capital stock of Med Surg Specialties, Inc. ("Med Surg"), located in Brea, CA,
in exchange for 214,667 shares of our common stock. As a result, Med Surg became
our wholly owned subsidiary. In addition, we obtained a non-compete agreement
from the principal former shareholder of Med Surg in consideration of the
payment of $138,000 in cash ($50,000 in July 1997, with the balance paid $50,000
in fiscal year 1998 and $38,000 in fiscal year 1999). Med Surg makes mobile
laser/surgical services available to hospitals, out patient surgery centers, and
physician's offices. Med Surg's operations, which were conducted primarily in
the Southern California area, were absorbed into PRI at the time of the
acquisition.

     Effective November 1, 1997, we acquired 100% of the issued and outstanding
capital stock of Texas Oxygen Medical Equipment Company ("Tomec"), headquartered
in Mansfield, TX, in exchange for 40,000 shares of our own common stock. As a
result, Tomec became our wholly owned subsidiary. Tomec rents medical equipment
and provides biomedical services. Tomec conducts its business in Texas, and has
continued to operate as our wholly owned subsidiary, with its headquarters
remaining in Mansfield, TX.

     We intend to selectively continue the pursuit of our strategic plan of
acquiring other companies in the medical services and equipment rental business
to take advantage of current opportunities in the market place.

PRODUCTS AND SERVICES

     Our technicians deliver equipment and provide technical support to
physicians and operating room ("O.R.") personnel as needed. Once our technician
is at the customer site, he posts required warning notices outside the O.R.,
issues safety equipment to the O.R. staff, provides any disposable materials
needed, and supplies equipment certifications or documentation required for
hospital record-keeping. Our technician sets the physician's requested power
settings and maintains a laser safe environment during the surgical procedure.
Hospitals and surgery facilities, especially those with fluctuating occupancy
levels, find this outsourcing of trained technicians, on an as-needed basis, a
cost effective alternative to training and staffing their own personnel. More
than 60% of our revenue was generated from the rental of technician supported
equipment (including related disposable sales) during each of the last two
fiscal years.

     Our lasers encompass the latest technology in CO2, Nd:YAG, Pulse Dye,
KTP/YAG, and Holmium YAG models. We have established an excellent working
relationship with the leading laser manufacturers and are often the first
service company to receive new laser technology in our markets. We are
constantly reviewing developments in the medical laser field to stay abreast of
the latest technology available.

     We also provide our customers with disposable products and/or attachments
that are needed for a given procedure. This applies primarily to laser related
rentals requiring laser drapes, masks, fibers, tubing, etc. The customers
benefit from this added service since they save the added costs that would be
incurred if they had to purchase a large inventory of these disposable products.


                                       4
<PAGE>

     Additionally, we offer a broad spectrum of general medical equipment to the
medical market that we serve. Our inventory of equipment includes an extensive
selection of devices, serving a broad range of hospital departments and needs,
such as adult and infant ventilators, CO2 monitors, defibrillators, feeding
pumps, PCA pumps, ECG monitors, infusion pumps, neo-natal monitors, and pulse
oximeters.

     Due in part to our varied inventory of equipment, we are usually capable of
offering delivery and support of rental items with only a few hours' notice.
Mobile laser/surgical services are ordered in advance and re-confirmed with the
customer the day before the procedure by the scheduling department.

MARKETING AND SALES

     The principal focus of our business is providing mobile laser/surgical
services. Additionally, we are expanding our business of renting medical
equipment to hospitals, surgery centers and physicians in their offices. Our
sales efforts are supported by a direct sales force which focuses on providing
timely service and products to our customers. In addition, we sponsor
educational seminars on new laser technology, which are attended by physicians.
This allows our direct sales force to introduce new laser technology and
procedures to our customer base as soon as new lasers are offered by
manufacturers. This method has proven to be successful in developing new
business from physicians. We benefit from the physician training which occurs at
these educational seminars because the physicians can immediately implement the
new laser technology we offer.

     Our sales representatives attend national and regional physician medical
seminars and trade shows to present our services and products. We also create
markets for our products and services through direct mailing of marketing
literature and promotional materials regarding our complete range of
laser/surgical services to hospitals, surgery centers and physicians.

MARKETS

     Our principal markets, and percent of revenue from each, during the fiscal
years ended October 31, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
                                                                       FISCAL 1999      FISCAL 1998
<S>                                                                    <C>              <C>
         Mobile laser/surgical services                                      44%             44%
         Cosmetic mobile laser/surgical services
           (primarily physician office based)                                11%              9%
         Medical equipment rentals                                           29%             30%
         Disposable and equipment sales                                      14%             14%
         Biomedical services and other revenues                               2%              3%
</TABLE>


HOSPITAL MOBILE LASER/SURGICAL SERVICES

     The Southern California market is a mature market place and growth is
dependent on new procedures and products. This situation does not exist in some
other parts of the country, providing us with a growth opportunity in other
geographic markets.

     Mobile laser/surgical services, both hospital/surgery center based and
physician office based, provide an entry into new geographic markets with
multiple strategies. Once a facility is established in a new geographic market,
the opportunity exists to use that facility as a dispatch point for equipment
rentals and new products.


                                       5
<PAGE>

COSMETIC MOBILE LASER/SURGICAL SERVICES

     The cosmetic laser business is primarily physician office based. This
market did not emerge for us until early 1995, and has been characterized by
rapid changes in specific techniques as new technology emerges.

     In recent years, skin resurfacing cosmetic laser surgery has shown
significant growth. However, price competition is emerging in this market from
smaller start up companies. In the past few years, legislation in California and
some other states restricting anesthesia in doctors' offices has redirected some
of this cosmetic surgery to hospitals and surgery centers, where we have a
strong base. As the skin rejuvenation market matures, new markets will be
emerging for the treatment of leg veins and the removal of unwanted hair.
Because of customer inquiries, we believe that recently developed laser
technology for collapsing veins so that they are no longer visible will produce
a significant increase in the number of doctors using mobile lasers. In
addition, the anticipated introduction to the market of new lasers for unwanted
hair removal will add a companion procedure to the vein procedure.

HOSPITAL MEDICAL EQUIPMENT RENTALS

     We entered the hospital equipment rental market in 1974, and maintained
that business as our primary source of revenue until the mobile laser/surgical
services became predominate in 1987. That transition took place because of
competition from national medical rental companies and high demand for the newly
developed mobile laser/surgical services.

     The hospital equipment rental market has been reduced to two dominant
national companies. The older and smaller of these companies is Universal
Hospital Services ("UHS"), which provides medical equipment within the hospital
on a fee for use basis. We believe that UHS does not focus on the larger portion
of that market which is supplemental equipment rentals. The larger company is
Mediq PRN ("Mediq"), which is dominant in the supplemental rental business
through contracts with large hospital management companies. We have identified
an excellent opportunity to service Mediq's customers on a second call basis (as
an alternative supplier to these customers) at reasonable prices.

     We believe that we have a competitive advantage in the market, since we are
one of the few companies that provide both mobile laser/surgical services and
medical equipment rental. There are a number of synergies among the mobile
laser/surgical services and the medical equipment rental business, including:

          -    Shared facilities
          -    Shared warehouse and delivery employees
          -    Shared delivery vehicles
          -    Complimentary scheduling and booking staff
          -    Common management
          -    Shared sales staff at start up

EQUIPMENT AND DISPOSABLE SALES

     We continue to evaluate several lines of disposable medical products to
introduce to our customers. As the medical rental market continues to be
challenged by smaller competitors we intend to respond by offering new products,
as well as remaining competitive on current market pricing. This is a natural
progression for us, since we have a large customer base typified by repeat
business and ongoing personal contact between our sales representatives and our
customers.

     Another source of revenue is the re-marketing of used equipment. As a
result of our practice of updating laser and medical rental equipment, we
occasionally sell used equipment.


                                       6
<PAGE>

GOVERNMENT REGULATIONS

     The healthcare industry is subject to extensive federal and state
regulation. Promulgation of new laws and regulations, or changes in or
re-interpretations of existing laws or regulations, may significantly affect our
business, operating results or financial condition. We are not currently subject
to regulation. However, a court or governmental body could make a determination
that our business should be regulated. Our profitability might be negatively
impacted if we had to comply with government regulations. Furthermore, the
manufacturers of medical equipment utilized by us are subject to extensive
regulation by the Food and Drug Administration ("FDA"). Failure of such
manufacturers to comply with FDA regulations could result in the loss of
approval by the FDA of such medical equipment, which could adversely affect our
operating results or financial condition. As consolidation among physician
groups continues and provider networks continue to be created, purchasing
decisions may shift to persons with whom we have not had prior contact. We
cannot be certain that we will be able to maintain our physician, payor or
manufacturer relationships under such circumstances.

POTENTIAL EXPOSURE TO LIABILITY

     Physicians, hospitals and other providers in the healthcare industry are
subject to lawsuits which may allege medical malpractice or other claims. Many
of these lawsuits result in substantial defense costs and judgments or
settlements. We do not engage in the practice of medicine, nor do we control the
practice of medicine by physicians utilizing our services or their compliance
with regulatory requirements directly applicable to such physicians or physician
groups. However, the services we provide to physicians, including actions by our
technicians, our establishment of protocols and our training programs, could
give rise to liability claims. Although we have not recently been a party to any
material litigation, including litigation relating to the practice of medicine,
we may become involved in such litigation in the future, and it is possible that
a claim or claims arising from such litigation might exceed our insurance
coverage. In addition, we may not be able to obtain such insurance coverage in
the future. See Item 3 "Legal Proceedings" below.

COMPETITION

     The market for our services is highly competitive. Companies, particularly
in the laser surgery industry, compete by price, thereby impacting profit
margins. In spite of such competition, we believe that we can compete
successfully. We provide surgical laser equipment to hospitals, ambulatory
surgery centers and doctors' offices, and are able to build our business on the
interrelation of these market segments.

     Our competition for mobile laser surgery equipment rental is primarily from
a number of small companies with only a few surgical lasers each. In most cases,
these competing companies are founded by technicians who have left doctors'
offices or hospitals and sell their services to a limited number of customers.

     Major competitors in the hospital medical equipment rental market include
Universal Hospital Services and Mediq PRN. We believe that, as a specialist, we
can better satisfy the hospitals' needs for medical rental equipment at
satisfactory profit margins. We have no way to know whether we will be able to
successfully compete in the marketplace in the future.


                                       7
<PAGE>

TRANSITION TO YEAR 2000

     We did not experience any interruption to our business as a result of the
transition to January 1, 2000, and we are not aware of any Year 2000 related
problems associated with our internal systems or software, or with the software
and systems of our customers or suppliers. Costs incurred related to our
assessment and modification of our internal systems and software were less than
$15,000.

     We expect most material Year 2000 compliance problems to have arisen on or
immediately after January 1, 2000, but cannot assure you that problems will not
emerge throughout the course of the year 2000 or even beyond. We intend to
maintain our efforts relating to internal Year 2000 compliance. However, we do
not anticipate any significant future costs with respect to this issue.

EMPLOYEES

     As of October 31, 1999, we employed 98 full time persons, 57 of whom
were involved in operations activities (most of these were active as field
technicians), 22 of whom were involved in sales and marketing, and 19 of whom
were involved in administration and accounting. In addition, we employ 13
part time and occasional employees as technicians to handle overload
situations. None of these employees is represented by a union. We believe
that our relationship with our employees is good.

                                       8
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

     We lease approximately 14,500 square feet of space for our headquarters in
Glendale, California on a lease that expires in 2001, for $10,880 per month,
with a CPI based rent escalation clause. This lease also provides an option to
rent this facility for an additional five years. We also lease about 2,000
square feet of space for our field and sales office in Dublin, California under
a lease that expires in 2001, for $2,740 per month, with a CPI based rent
escalation clause.

     In addition, we lease field and sales offices in Stockton, CA, Boise, ID,
Englewood, CO, Phoenix, AZ, Mansfield, TX and Las Vegas, NV. Total combined
square footage is 21,200 for approximately $8,500 per month, expiring through
2001.

ITEM 3.  LEGAL PROCEEDINGS.

     Plaintiffs Hollace Panzer and Steven Panzer (collectively, "Plaintiffs")
filed their original Complaint alleging causes of action for negligence and lost
consortium on October 26, 1996. The Complaint generally alleged that Ms. Panzer
suffered personal injury on November 2, 1995 as a result of a laser facial
resurfacing procedure. The Complaint further alleged that, as a result of Ms.
Panzer's injuries, Steven Panzer (Ms. Panzer's husband) lost consortium.

     In early 1998, Plaintiffs amended their Complaint to name as defendants
Medical Resources Management, Inc. ("MRM"), Med Surg Specialties, Inc. ("MSS")
and Physiologic Reps, Inc. ("PRI"). It is alleged that MRM, MSS and PRI were
responsible for renting the laser used in the facial resurfacing procedure. Both
MSS and PRI are wholly owned subsidiaries of MRM. However, PRI's defense was
assumed by its insurance carrier.

     MRM and MSS answered Plaintiff's Complaint on July 27, 1998 and also
asserted cross-claims for indemnity against defendants Allan Wirtzer, Sharplan
Lasers, Inc. Sun Medical, Inc. and Stephen P. Grifka. With the exception of
Grifka, all cross-defendants have answered MRM's and MSS' Cross-Complaints.
Michael Fewer, Vice President of PRI, personally negotiated a settlement with
Grifka whereby PRI agreed to purchase the laser and dismiss MRM's and MSS'
claims against Grifka without prejudice. Sharplan has cross-complained for
equitable indemnity against MRM, MSS, Wirtzer, Grifka and Sun. In addition,
Plaintiffs have asserted claims against Grifka, Sharplan and Sun. Plaintiffs
eventually agreed to dismiss Grifka and PRI from the case.

     Thereafter, the remaining parties conducted discovery. An eventual
settlement was reached whereby MRM was dismissed from the case by Plaintiffs. In
addition, for evidentiary purposes, it was agreed that MSS would bring a motion
for summary judgment in which Sun and Sharplan would join. Plaintiffs agreed not
to oppose this motion. The motion was filed and the superior court granted
summary judgment in favor of MSS and Sun and against Plaintiffs on November 8,
1999, and in favor of Sharplan and against the Plaintiffs on December 7, 1999.
We are presently awaiting the signed documents from the Court. Once the Court
provides us with those documents, the cross-complaints asserted by MSS, MRM and
Sharplan will be dismissed by agreement of the parties.

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

       None.


                                       9
<PAGE>

                                     PART II

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

MARKET INFORMATION

     Our Common Stock is traded under the symbol "MRMC" in the over-the-counter
market through the NASD's electronic OTC Bulletin Board service. The following
table sets forth the range of high and low bid prices per share of our Common
Stock for each of the periods indicated. These quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commissions, and may not
necessarily represent actual transactions.
<TABLE>
<CAPTION>

                                                             Bid Prices
                                                       ------------------------
                                                          High         Low
                                                          ----         ---
<S>                                                    <C>          <C>
          Quarter ended:

            January 31, 1998                           $  1.375     $   0.625
            April 30, 1998                             $  1.250     $   0.750
            July 31, 1998                              $  1.750     $   0.719
            October 31, 1998                           $  0.984     $   0.250

            January 31, 1999                           $  0.531     $   0.125
            April 30, 1999                             $  0.531     $   0.125
            July 31, 1999                              $  2.063     $   0.125
            October 31, 1999                           $  1.000     $   0.250
</TABLE>

HOLDERS OF COMMON STOCK

     As of October 31, 1999, the number of holders of record of our Common Stock
was 390, excluding approximately 15 accounts in "nominee" or "street" name.

DIVIDENDS

     To date, we have not paid any cash dividends on our Common Stock and do not
anticipate paying cash dividends in the foreseeable future. We anticipate that
all earnings, if any, for the foreseeable future will be retained for
development of our business.


                                       10
<PAGE>

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

     The following discussion and analysis should be read together with the
financial statements and notes thereto included elsewhere herein.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the percentage
of net sales represented by certain items included in the Statements of Income:
<TABLE>
<CAPTION>
                                                                               Year ended October
                                                                                        31,
                                                                              ---------------------
                                                                                1999          1998
                                                                              --------      -------
<S>                                                                           <C>           <C>
Net revenue ................................................................    100.0%        100.0%
Cost of revenue ............................................................     36.5          41.1
Depreciation expense .......................................................     14.4          12.6
                                                                                -----         -----
Gross profit ...............................................................     49.1          46.3
Selling expenses ...........................................................     18.8          17.7
General and administrative expenses ........................................     19.3          17.6
                                                                                -----         -----
Operating income ...........................................................     11.0          11.1
Interest expense ...........................................................     10.4           8.7
                                                                                -----         -----
Income before income taxes .................................................      0.6           2.4
Provision for income taxes .................................................      0.2           1.0
                                                                                -----         -----
Net income .................................................................      0.4%          1.4%
                                                                                =====         =====
</TABLE>


YEAR ENDED OCTOBER 31, 1999 COMPARED TO YEAR ENDED OCTOBER 31, 1998

     For the year ended October 31, 1999, net revenue was $11.73 million,
compared to $11.58 million for the fiscal year ended October 31, 1998, an
increase of $150,000, or 1.3%. The increase in net revenue is principally due to
(1) an increase in laser surgical services of $226,000 and (2) an increase in
disposable and equipment sales of $129,000, both of which increases were offset
in part by (3) a decrease in biomedical service revenue of $108,000, (4) a
decrease in other revenue of $26,000 and (5) a decrease of $71,000 in medical
rental revenue, mostly as a result of milder weather in Southern California
during fiscal year 1999 (in general, more people are hospitalized during cold,
wet weather such as that experienced during the EL NINO storms in late 1997 and
early 1998).

     Cost of revenue (excluding depreciation expense) for the year ended October
31, 1999 totaled $4.28 million, or 36.5% of net revenue, compared to $4.76
million, or 41.1% of net revenue, in the prior fiscal year, a decrease of
$485,000, or 10.2%. The decrease in cost of revenue is chiefly attributable to
(1) reductions in personnel and other operating costs since the second quarter
of fiscal year 1998 and (2) the reclassification of certain employees from
operations to sales in fiscal year 1999, both of which were offset in part by
costs associated with the increase in disposable and equipment sales.

     Depreciation expense directly attributable to net revenue for the year
ended October 31, 1999 was $1.70 million compared to $1.45 million for fiscal
year 1998, an increase of $245,000, or 16.9%. This increase in depreciation
expense is primarily the result of the addition of equipment during the latter
part of fiscal year 1998 and the first nine months of fiscal year 1999.

     Gross profit for the fiscal year ended October 31, 1999 was $5.76 million,
or 49.1% of net revenue, compared to $5.37 million, or 46.3% of net revenue, in
the year ended October 31, 1998, an increase of $390,000, or 7.3%. The increase
in gross profit is mainly the result of the factors described previously.

     For the year ended October 31, 1999, selling expenses were $2.20 million,
compared to selling expenses of $2.04 million for the prior fiscal year, an
increase of $164,000, or 8.0%. This increase is primarily due to higher
compensation for sales personnel and to the reclassification of certain
employees from operations to sales. As a percentage of net revenue, selling
expenses increased to 18.8% in the year ended October 31, 1999, compared to
17.7% in the prior fiscal year.


                                       11
<PAGE>

     General and administrative ("G&A") expenses totaled $2.26 million for
the year ended October 31, 1999, compared to $2.03 million in the year ended
October 31, 1998, an increase of $230,000, or 11.3%. As a percentage of net
revenue, G&A expenses increased from 17.6% in the fiscal year 1998 to 19.3%
in the fiscal year 1999. The increase in the amount of G&A expense is chiefly
attributable to (1) a write-off of software development costs in fiscal year
1999 in the amount of $107,000 for an abandoned project, (2) an increase of
$44,000 in expenses relating to the effort to refinance debt during fiscal
year 1999, (3) certain professional fees in the amount of $66,000 relating to
consulting services and (4) the write-off of certain investments in
non-affiliates in fiscal 1999 in the amount of $38,000, all of which
increases were offset in part by an overall decrease in other G&A expenses in
the amount of $25,000.

     Operating income for fiscal year 1999 was $1.29 million, or 11.0% of net
revenue, compared to $1.29 million in the year ended October 31, 1998, or
11.1% of net revenue. This lack of change in operating income in fiscal year
1999 from fiscal year 1998 is attributable to the factors previously cited
herein.

     For the year ended October 31, 1999, interest expense totaled $1.22
million, compared to $1.01 million in the prior fiscal year, an increase of
$205,000, or 20.3%. This increase in interest expense is principally
attributable to an increase in debt incurred to fund the acquisition of
property and equipment during the latter part of fiscal year 1998 and the
first nine months of fiscal year 1999.

     Income before income taxes was $71,000 for the year ended October 31,
1999, compared to $280,000 in the year ended October 31, 1998, a decrease of
$209,000, or 74.6%. Income before income taxes, as a percentage of revenues,
decreased from 2.4% in the year ended October 31, 1998 to 0.6% in the year
ended October 31, 1999 as a result of all of the aforementioned factors.

                                       12
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     Our liquidity requirements arise from the funding of our working capital
needs, principally accounts receivable and inventories, as well as our capital
expenditure needs. Our primary sources for working capital have historically
been borrowings under debt facilities, leasing arrangements, trade payables and
the sale of our Common Stock.

     During the year ended October 31, 1999, net cash provided by operating
activities was $1.61 million, which resulted principally from net income of
$43,000 adjusted for (a) depreciation and amortization expense of $1.88 million,
(b) a provision for doubtful accounts of $76,000 and (c) an increase in
long-term deferred income tax liabilities of $25,000, all of which were offset
in part by a net increase of approximately $412,000 in working capital items.

     Net cash used in investing activities during the fiscal year ended October
31, 1999 totaled $1.44 million, which was comprised of (a) capital expenditures
in the amount of $1.37 million, (b) an increase in other assets of $54,000 and
(c) the payment of $38,000 for non-compete agreements, all of which were offset
in part by net proceeds from the sales of assets of $27,000.

     Cash used in financing activities during the year ended October 31, 1999
was $267,000, consisting of (a) $60,000 in principal payments on notes payable,
(b) $2.00 million in principal payments on long-term debt and (c) $2.21 million
in principal payments on capital lease obligations, all of which were offset in
part by (d) $1.04 million of borrowings on notes payable to a bank, (e) $60,000
in borrowings on notes payable and (b) $2.90 million of borrowings on long-term
debt.

     On March 31, 1999 we entered into an agreement with a bank that provides
for a $2 million term loan (Bank Term Loan) and a $2 million line of credit
(Bank Line of Credit). The proceeds from the Bank Term Loan were used to repay
in full the then-existing term loan with Merrill Lynch, as well as for working
capital purposes, including payment of past-due lease payments. The Bank Term
Loan bears interest at a rate of prime plus 1.25%, with principal due in 60
equal monthly installments commencing in May 1999. The balance on the Bank Term
Loan as of October 31, 1999 was $1.8 million.

     The proceeds from the Bank Line of Credit were used for working capital
purposes. This Bank Line of Credit bears interest at a rate of prime plus 1.00%,
with borrowings based upon eligible accounts receivable as defined. The balance
outstanding under the Bank Line of Credit as of October 31, 1999 was $1.04
million.

     The Bank Line of Credit and Bank Term Loan prohibit the payment of cash
dividends and require the Company to maintain certain levels of net worth and to
generate certain ratios of cash flows to debt service. As of October 31, 1999,
the Company was not in compliance with certain financial covenants of the Bank
Line of Credit and Bank Term Loan. The lender waived the covenant violations.

     We had no material commitments for capital expenditures at October 31,
1999. However, although we have no present commitments or agreements to make
such capital expenditures, during the next 12 months we expect to make
substantial capital expenditures, in accordance with our historical practice.
The mobile laser/surgical services and medical equipment rental businesses are
capital intensive. We believe that funds generated from operations, together
with funds available from debt facilities, as well as possible strategic
alternatives such as additional debt or equity offerings, will be sufficient to
finance our working capital and capital expenditure requirements for the next 12
months.

ITEM 7.  FINANCIAL STATEMENTS.

      See financial statements included herein.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

     Not applicable.


                                       13
<PAGE>

                                    PART III

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

The information contained in our Proxy Statement to be filed with the
Securities and Exchange Commission on or before February 28, 2000 with
respect to directors, officers, promoters and control persons is hereby
incorporated by reference in response to this item.


                                       14
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

     The information contained in our Proxy Statement to be filed with the
Securities and Exchange Commission on or before February 28, 2000 with respect
to executive compensation and transactions is hereby incorporated by reference
in response to this item.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information contained in our Proxy Statement to be filed with the
Securities and Exchange Commission on or before February 28, 2000 with respect
to security ownership of certain beneficial owners and management is hereby
incorporated by reference in response to this item.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Robert Stuckelman, a member of our Board of Directors, received $44,000
from us in the form of consulting fees during the fiscal year ended October 31,
1998 as a result of having provided business and marketing consulting services
to us in connection with prior acquisitions and certain other matters, and we
may continue to retain Mr. Stuckelman to render such business and marketing
consulting services to us in the future. We believe that the terms of the
consulting services provided were no less favorable to us than those that could
have been obtained in a comparable transactions with an unrelated party.


                                       15
<PAGE>

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

(a) Documents filed herewith as part of this report:
<TABLE>
<CAPTION>
                                                                    PAGE
                                                                    ----
<S>                                                                 <C>
     1. Financial Statements:

          Report of Independent Auditors                             F-1

          Consolidated Balance Sheet - October 31, 1999              F-2

          Consolidated Statements of Income - Years Ended
               October 31, 1999 and 1998                             F-4

          Consolidated Statements of Shareholders' Equity -

               Years Ended October 31, 1999 and 1998                 F-5

          Consolidated Statements of Cash Flows - Years Ended
               October 31, 1999 and 1998                             F-6

          Notes to Consolidated Financial Statements                 F-7
</TABLE>

       2.  Exhibits:

                  See Exhibits Index. The exhibits listed in the accompanying
           Exhibit Index are filed or incorporated by reference as part of this
           report.

(b)      Reports on Form 8-K:

         None.


                                       16
<PAGE>

                                   SIGNATURES

     In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Glendale, California on the 14th day of February, 2000.

MEDICAL RESOURCES MANAGEMENT, INC.

By     /s/  Richard A. Whitman
      ----------------------------------------------------
       Richard A. Whitman, President and CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on the 14th day of February, 2000.

         SIGNATURE                                  TITLE
        ----------                                 -------

By     /s/  Richard A. Whitman
      ----------------------------------------
       Richard A. Whitman                           President and CEO

By     /s/  Allen H. Bonnifield
      ----------------------------------------
       Allen H. Bonnifield                          Chairman and Chief
                                                    Financial Officer

By     /s/  Gregory Bonnifield
      ----------------------------------------
       Gregory Bonnifield                           Director and President of
                                                    Physiologic Reps, Inc.

By     /s/  Donald G. Petrie
      ----------------------------------------
       Donald G. Petrie                             Director


                                       17
<PAGE>

                                 EXHIBITS INDEX

EXHIBIT           EXHIBIT DESCRIPTION
NUMBER

3.1               Articles of Incorporation and Amendments thereto. (1)

3.2               By-Laws of the Registrant. (1)

10.1              Copy of a Warrant Agreement and Warrant issued between
                  November 1996 and March 1997 to investors in the Registrant's
                  Private Placement. (1)

10.2              Registrant's 1996 Stock Incentive Plan. (1)

10.3              Equipment Note Loan and Security Agreement dated April 24,
                  1997 between the Registrant and LINC Capital Management, a
                  division of LINC Capital, Inc. (1)

10.4              Collateral Note No. 1 dated April 28, 1997 between the
                  Registrant and LINC Capital, Inc. (1)

10.5              Lease Modification Agreement dated April 24, 1997 between
                  Pulse Medical Products, Inc. and LINC Capital Management, a
                  division of LINC Capital, Inc. (1)

10.6              Warrant Purchase Agreement dated April 24, 1997 between the
                  Registrant and LINC Capital Management, a division of LINC
                  Capital, Inc. (1)

10.7              Warrant to Purchase Shares of Common Stock dated April 24,
                  1997 between the Registrant and LINC Capital Management, a
                  division of LINC Capital, Inc. (1)

10.8              Amendment to Warrant Agreement  - Class A Redeemable Warrant,
                  dated September 26, 1999. (5)

10.9              Amendment to Warrant Agreement  - Class B Redeemable Warrant,
                  dated September 26, 1999. (5)

10.10             Loan Agreement dated March 30, 1999 between Physiologic Reps
                  and Santa Monica Bank. (5)

10.11             Promissory Note dated March 30, 1999 between Physiologic Reps
                  and Santa Monica Bank (Line of Credit). (5)

10.12             Promissory Note dated March 30,1999 between Physiologic Reps
                  and Santa Monica Bank (Term Loan). (5)

27.0              Financial Data Schedule.  (5)


(1)  Exhibit filed with Registrant's Form 10-SB on May 16, 1997 and incorporated
     by reference herein.
(2)  Exhibit filed with Registrant's Form 10-QSB for the quarter ended July 31,
     1997 and incorporated by reference herein.
(3)  Exhibit filed with Registrant's Form 10-KSB for the fiscal year ended
     October 31, 1997 and incorporated by reference herein.
(4)  Exhibit filed with Registrant's Form 10-QSB for the quarter ended January
     31, 1998 and incorporated by reference herein.
(5)  Exhibit filed herewith.

                                       18
<PAGE>


                         Report of Independent Auditors

Board of Directors and Shareholders
Medical Resources Management, Inc.

We have audited the accompanying consolidated balance sheet of Medical Resources
Management, Inc. and subsidiaries as of October 31, 1999, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the two years in the period ended October 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Medical
Resources Management, Inc. and subsidiaries at October 31, 1999, and the
consolidated results of their operations and their cash flows for each of the
two years in the period ended October 31, 1999, in conformity with accounting
principles generally accepted in the United States.

                                                               Ernst & Young LLP

Los Angeles, California
January 20, 2000

                                                                             F-1

<PAGE>



               Medical Resources Management, Inc. and Subsidiaries

                           Consolidated Balance Sheet

                                October 31, 1999

<TABLE>
<CAPTION>

<S>                                                                 <C>
ASSETS
Current assets:
   Cash and cash equivalents                                             $    45,332
   Accounts receivable, less allowance of $90,000                          1,638,277
   Inventories                                                               820,614
   Prepaid expenses                                                          151,886
                                                                        ----------------
Total current assets                                                       2,656,109


Property and equipment:
   Rental equipment                                                       20,306,387
   Transportation equipment                                                  907,391
   Office furniture and equipment                                            423,569
   Leasehold improvements                                                     94,323
                                                                        ----------------
                                                                          21,731,670

   Less accumulated depreciation and amortization                          9,772,733
                                                                        ----------------
Net property and equipment                                                11,958,937


Other assets:
   Intangible assets, net of accumulated amortization of $298,737            586,949
   Deposits and other assets                                                 338,214
                                                                        ----------------
Total other assets                                                           925,163
                                                                        ----------------
Total assets                                                             $15,540,209
                                                                        ================
</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                                             F-2
<PAGE>

               Medical Resources Management, Inc. and Subsidiaries

                     Consolidated Balance Sheet (continued)

                                October 31, 1999

<TABLE>
<CAPTION>

<S>                                                               <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                      $   892,591
   Accrued expenses                                                          652,085
   Note payable to a bank                                                  1,042,634
   Current portion of long-term debt                                         737,785
   Current portion of obligations under capital leases                     2,225,543
                                                                     ----------------
Total current liabilities                                                  5,550,638


Long-term debt, net of current portion                                     2,449,617


Obligations under capital leases, net of current portion                   3,062,175


Deferred income taxes                                                      1,220,016


Commitments


Shareholders' equity:
   Common stock, $.001 par value:
      Authorized shares - 100,000,000
      Issued and outstanding shares - 7,406,927                                7,407
   Additional paid-in capital                                              1,693,805
   Retained earnings                                                       1,556,551
                                                                     ----------------
Total shareholders' equity                                                 3,257,763
                                                                     ----------------
Total liabilities and shareholders' equity                               $15,540,209
                                                                     ================

</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                                             F-3

<PAGE>

               Medical Resources Management, Inc. and Subsidiaries

                        Consolidated Statements of Income

<TABLE>
<CAPTION>

                                                                          YEAR ENDED OCTOBER 31
                                                                          1999             1998
                                                                   ------------------------------------
<S>                                                                <C>                  <C>
Net revenue                                                          $11,728,537         $11,578,705

Cost of revenue                                                        4,276,953           4,762,046
Depreciation expense                                                   1,696,356           1,451,193
                                                                   ------------------------------------
Gross profit                                                           5,755,228           5,365,466

Selling expenses                                                       2,203,848           2,040,271
General and administrative expenses                                    2,263,076           2,032,788
                                                                   ------------------------------------
Operating income                                                       1,288,304           1,292,407

Interest expense                                                       1,217,757           1,012,097
                                                                   ------------------------------------
Income before income taxes                                                70,547             280,310
Provision for income taxes                                                27,711             110,485
                                                                   ------------------------------------
Net income                                                           $    42,836         $   169,825
                                                                   ====================================

Net income per common share (basic and diluted)                      $       .01         $       .02
                                                                   ====================================
Weighted average common shares (basic and diluted)                     7,396,283           7,384,502
                                                                   ====================================

</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                                             F-4

<PAGE>

               Medical Resources Management, Inc. and Subsidiaries

                 Consolidated Statements of Shareholders' Equity

<TABLE>
<CAPTION>

                                                   COMMON STOCK              ADDITIONAL         RETAINED
                                               SHARES          AMOUNT       PAID-IN CAPITAL      EARNINGS           TOTAL
                                           ------------------------------------------------------------------------------------
<S>                                       <C>              <C>            <C>                <C>              <C>
Balance at October 31, 1997                  7,345,927         $7,346         $1,639,366        $1,343,890       $2,990,602
   Issuance of stock for acquisitions           40,000             40             43,960                 -           44,000
   Net income for year                               -              -                  -           169,825          169,825
                                           ------------------------------------------------------------------------------------
Balance at October 31, 1998                  7,385,927          7,386          1,683,326         1,513,715        3,204,427
   Issuance of stock as compensation            21,000             21             10,479                 -           10,500
   Net income for year                               -              -                  -            42,836           42,836
                                           ------------------------------------------------------------------------------------
Balance at October 31, 1999                  7,406,927         $7,407         $1,693,805        $1,556,551       $3,257,763
                                           ====================================================================================

</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                                             F-5

<PAGE>

               Medical Resources Management, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                           YEAR ENDED OCTOBER 31
                                                                           1999             1998

                                                                      ---------------------------------
<S>                                                                  <C>              <C>
OPERATING ACTIVITIES
Net income                                                           $    42,836           $  169,825
Adjustments to reconcile net income to cash provided
  by operating activities:
     Depreciation and amortization of property and equipment         $(1,736,088            1,556,842
     Amortization of intangibles                                         141,459              115,267
     Provision for doubtful accounts                                      76,215               41,921
     Deferred income taxes                                                25,111              246,409
     (Gain) loss on sales of assets                                       (2,390)              58,854
     Changes in operating assets and liabilities:
        Accounts receivable                                              201,667              (90,028)
        Inventories                                                      (44,879)            (132,808)
        Prepaid expenses                                                  34,374              (91,882)
        Income tax receivable                                             20,843               34,270
        Accounts payable                                                (480,068)             432,820
        Accrued expenses                                                (141,726)             215,442
                                                                      ---------------------------------
Net cash provided by operating activities                              1,609,530            2,556,932

INVESTING ACTIVITIES
Purchases of property and equipment                                   (1,372,434)            (583,179)
Net proceeds from sales of assets                                         26,900               46,251
Payments for non-compete agreements                                      (38,000)             (50,000)
Increase in deposits and other assets                                    (54,407)            (131,769)
                                                                      ---------------------------------
Net cash used in investing activities                                 (1,437,941)            (718,697)

FINANCING ACTIVITIES
Borrowings on bank line of credit                                      1,042,634                   -
Borrowings on notes payable                                               60,000              169,887
Borrowings on long-term debt                                           2,899,604              105,148
Principal payments on notes payable                                      (60,000)            (215,844)
Principal payments on long-term debt                                  (1,997,603)            (490,447)
Principal payments on capital lease obligations                       (2,212,120)          (1,330,107)
                                                                      ---------------------------------
Net cash used in financing activities                                   (267,485)          (1,761,363)


Net increase(decrease) in cash and cash equivalents                      (95,896)              76,872
Cash and cash equivalents at beginning of period                         141,228               64,356
                                                                      ---------------------------------

Cash and cash equivalents at end of period                           $    45,332          $   141,228
                                                                      =================================

SUPPLEMENTAL INFORMATION:
Cash paid during the period for:
   Interest                                                          $ 1,271,140          $   878,140
                                                                      =================================
   Taxes                                                             $     2,730          $     2,730
                                                                      =================================
Capital lease obligations entered into for equipment                 $   158,850          $ 2,389,699
                                                                      =================================
Common stock issued for acquired companies                           $         -          $    44,000
                                                                      =================================
Common stock issued as compensation                                  $    10,500          $         -
                                                                      =================================

</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                                             F-6

<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                                October 31, 1999

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Medical Resources Management, Inc. (MRM or the Company) makes mobile
laser/surgical services available on a per procedure basis to hospitals,
outpatient surgery centers and physicians' offices, and also provides other
medical equipment on a rental basis to hospitals and surgery centers. Customers
of the Company are located throughout much of the western United States. The
financial statements include MRM, the holding company, consolidated with all of
its wholly owned subsidiaries - Physiologic Reps, Inc., Pulse Medical Products,
Inc. (Pulse), Laser Medical, Inc., Med Surg Specialties, Inc. (all acquired in
fiscal year 1997) and Texas Oxygen and Medical Equipment Company (acquired in
fiscal year 1998). All significant intercompany accounts and transactions have
been eliminated.

CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with maturities of three months or less when purchased to be
cash equivalents.

INVENTORIES

Inventories, consisting primarily of supplies, are stated at the lower of cost
(first-in, first-out) or market basis.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, which vary
from five to ten years. Capitalized leases and leasehold improvements are being
amortized using the straight-line method over the shorter of the lease term or
estimated useful lives. Amortization of capital leases is included in
depreciation expense.

Expenditures for major renewals and betterments that extend the useful lives of
property and equipment are capitalized. Expenditures for maintenance and repairs
are charged to expense as incurred.

INTANGIBLE ASSETS

Intangible assets consisting of the excess of purchase price over assets
acquired and customer lists are being amortized over a period of 12 to 15 years.
Payments for non-compete agreements are capitalized and then amortized over the
period of the non-compete agreement. The carrying value of intangible assets is
reviewed if the facts and circumstances suggest that they may be impaired. If
this review indicates that the intangible assets will not be recoverable, as
determined based on estimated undiscounted cash flows of the Company over the
remaining amortization period, the carrying value would be reduced by the
estimated shortfall of discounted cash flows.

                                                                             F-7

<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

The Company utilizes the liability method to determine the provision for income
taxes. Deferred tax assets and liabilities are determined based on differences
between the tax basis of assets and liabilities and the related financial
reporting amounts using currently enacted laws and rates.

REVENUE RECOGNITION

The Company recognizes revenue at the time that the rental service is rendered
to the customer, including the providing of technical support.

STOCK-BASED COMPENSATION

The Company accounts for its stock compensation arrangements under the
provisions of Accounting Principles Board Opinion No. 25 (APB 25), "Accounting
for Stock Issued to Employees." Under APB 25, because the exercise price of the
Company's employee stock options equals or exceeds the market price of the
underlying stock on the date of grant, no compensation expense is recognized.
The Company has adopted the disclosure-only provisions of Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (SFAS 123).

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of temporary cash investments and trade
receivables. The Company places its temporary cash investments with banks.
Concentrations of credit risk with respect to trade receivables are limited due
to the Company's large number of customers primarily with small balances.
Management reviews these balances on a monthly basis and maintains reserves for
potential credit losses, which losses have historically been within management's
expectations. The Company generally sells on credit terms of 30 days and
requires no collateral.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could vary from those estimates.

                                                                             F-8

<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EARNINGS PER SHARE

Earnings per share has been computed in accordance with Statement of Financial
Accounting Standards No. 128, "Accounting for Earnings per Share." Basic
earnings per share has been computed based on the weighted average number of
shares of common stock outstanding. Stock options and warrants for the diluted
earnings per share presentation have not been considered because the effect was
either not material or antidilutive.

LONG-LIVED ASSETS

Long-lived assets used in operations are reviewed periodically to determine
whether the carrying values are impaired. If indicators of impairment are
present, or if long-lived assets are expected to be disposed of at a loss,
impairment losses are recorded.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of financial instruments such as cash, accounts receivable,
accounts payable, accrued expenses and short-term debt approximate their fair
value based on the short-term maturities of these instruments. The carrying
amount of the Company's outstanding balances under its long-term debt
instruments approximates fair value because the interest rates on outstanding
borrowings vary according to current market rates or are set to approximate
market rates.

FINANCIAL STATEMENT PRESENTATION

Certain balances from the October 31, 1998 financial statements have been
reclassified to conform to the October 31, 1999 presentation.

NEW ACCOUNTING PRINCIPLES

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (SFAS 133). This statement requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives will be recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated a
part of a hedge transaction and, if it is, the type of hedge transaction. SFAS
133 will be effective in fiscal 2000. The Company is in the process of
determining the impact of this new standard and anticipates that it will not
have a material impact on the Company's financial results when effective.

                                                                             F-9



<PAGE>

               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

2.   INVESTMENTS

The Company acquired an approximate 22% equity interest in each of six
separate limited liability companies (LLCs). The LLCs were formed by the
Company and certain physicians for an investment by the Company of between
$5,000 and $15,000. The Company manages the LLCs and provides operating and
administrative services to the LLCs. The Company accounts for its interests
in the LLCs using the equity method of accounting. During the fiscal years
ended October 31, 1999 and 1998, the Company recognized fee revenues of
$887,851 and $257,012, respectively, relating to the operations, management
and other services provided to the LLCs. In addition, $36,001 and $13,770 was
recorded for the Company's equity interests in the profit of these LLCs
during fiscal years 1999 and 1998, respectively. Additionally, the Company is
a guarantor of certain debt of three of the LLCs in the aggregate amount of
$238,145.

3.   OBLIGATIONS UNDER CAPITAL LEASES

The Company leases certain equipment under capital lease obligations which
contain purchase options. Cost and accumulated depreciation of equipment under
capital leases included in equipment as of October 31, 1999 are as follows:

<TABLE>

 <S>                                                      <C>
     Rental equipment                                        $8,878,181
     Less accumulated depreciation                            2,054,617
                                                            -----------
     Net book value                                          $6,823,564
                                                            ===========
</TABLE>

The following is a schedule by year of future minimum lease payments required
under the leases, together with their present value as of October 31, 1999:

<TABLE>

  <S>                                                                    <C>
     2000                                                                 $2,861,081
     2001                                                                  2,024,373
     2002                                                                  1,081,254
     2003                                                                    381,721
     2004                                                                          -
                                                                          -----------
     Total minimum lease payments                                          6,348,429
     Less amount representing interest                                     1,060,711
                                                                          -----------
     Present value of minimum lease payments due under capital leases      5,287,718
     Less current portion                                                  2,225,543
                                                                          -----------
     Obligations under capital leases, net of current portion             $3,062,175
                                                                          ===========

</TABLE>



                                                                            F-10

<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

4.   DEBT

In March 1999, a subsidiary of the Company entered into a $2,000,000 revolving
credit facility ("Revolver") and a $2,000,000 term loan with a bank. The
Revolver provides for borrowings using a formula based upon eligible accounts
receivable, as defined. The Revolver bears interest at the prime rate plus 1.00%
(9.50% at October 31, 1999) and matures May 2000, subject to renewal provisions.
As of October 31, 1999, there was $1,042,634 outstanding under the Revolver, and
there was no unused borrowing capacity available.

<TABLE>

<S>                                                                               <C>
Long-term debt consists of the following at October 31, 1999:

     Note payable to a bank (term loan), payable in 60 monthly installments of
       $33,333 plus interest at the prime rate plus 1.25% (9.75% at October 31,
       1999), secured by accounts receivable, inventories, equipment and the
       personal guarantee of one shareholder.                                       $1,800,000
     Notes payable to a finance company for a line of credit of
       $300,206 maturing April 2001, bearing interest at a rate of
       12% per annum, interest payable monthly, secured by the
       accounts receivable and inventories of Pulse.                                   300,206
     Various installment notes payable to a finance company
       in monthly installments totaling $21,934 including interest
       varying between 8.9% and 9.6% per annum, collateralized
       by rental equipment, maturing through July 2003.                                800,461
     Various notes payable in monthly installments totaling $8,495
       including interest varying between  7.1% and 12.5% per annum,
       collateralized by trucks, vans and automobiles, maturing
       through January 2004.                                                           173,899
     Other                                                                             112,836
                                                                                    ----------
     Total long-term debt                                                            3,187,402
     Less current portion                                                              737,785
                                                                                    ----------
     Long-term debt, net of current portion                                         $2,449,617
                                                                                    ==========
Long-term debt matures as follows during the years ending October 31:

     2000                                                                           $  737,785
     2001                                                                            1,007,486
     2002                                                                              669,253
     2003                                                                              566,476
     2004                                                                              206,402
                                                                                    ----------
                                                                                    $3,187,402
                                                                                    ==========
</TABLE>


The Revolver and term loan prohibit the payment of cash dividends and require
the Company to maintain certain levels of net worth and to generate certain
ratios of cash flows to debt service. As of October 31, 1999, the Company was
not in compliance with certain financial covenants of its revolving credit
facility and term loan. The lender waived the covenant violations.

                                                                            F-11



<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

5.   PROVISION FOR INCOME TAXES

The provisions for income taxes for the years ended October 31, 1999 and 1998
consist of the following:

<TABLE>
<CAPTION>


                                                                   YEAR ENDED OCTOBER 31, 1999
                                                             CURRENT         DEFERRED         TOTAL
                                                         ------------------------------------------------
<S>                                                     <C>              <C>            <C>
          Federal                                               $    -         $22,067       $22,067
          State                                                  2,730           2,914         5,644
                                                         ------------------------------------------------
                                                                $2,730         $24,981       $27,711
                                                         ================================================
</TABLE>

<TABLE>
<CAPTION>


                                                                   YEAR ENDED OCTOBER 31, 1998
                                                             CURRENT         DEFERRED         TOTAL
                                                         ------------------------------------------------
<S>                                                     <C>              <C>            <C>
          Federal                                               $    -        $ 88,060      $ 88,060
          State                                                  2,680          19,745        22,425
                                                         ------------------------------------------------
                                                                $2,680        $107,805      $110,485
                                                         ================================================

</TABLE>

Significant components of the Company's deferred tax assets and liabilities at
October 31, 1999 are as follows:

<TABLE>

<S>                                                                     <C>
       Deferred tax assets:
           Net operating loss carryforwards                                $ 1,168,419
           Allowance for doubtful accounts                                      35,352
           Other                                                               133,143
                                                                        --------------
       Total deferred assets                                                 1,336,914

       Deferred tax liabilities:
          Depreciation                                                      (2,532,348)
          Other                                                                (24,582)
                                                                        --------------
       Total deferred liabilities                                           (2,556,930)
                                                                        --------------
       Net deferred liabilities                                            $(1,220,016)
                                                                        ==============
</TABLE>

A reconciliation of the provision for income taxes with the amounts obtained by
applying the federal statutory tax rate is as follows:


<TABLE>
<CAPTION>
                                                                               YEAR ENDED OCTOBER 31
                                                                               1999            1998
                                                                           ------------------------------
  <S>                                                                    <C>               <C>

       Income tax based on federal statutory rate                              $23,986      $ 95,305
       State tax, net of federal tax benefit                                     3,725        14,800
       Non-deductible expenses and other                                             -           380
                                                                           ------------------------------
                                                                               $27,711      $110,485
                                                                           ==============================
</TABLE>

                                                                            F-12

<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

6.   EQUITY

Between November 1, 1996 and March 31, 1997, the Company sold 291,600 Units
in a private offering. These Units consisted of 291,600 shares of common
stock, as well as 291,600 Class A warrants and 291,600 Class B warrants to
purchase, in the aggregate, 583,200 shares of common stock. The Units were
sold at $1.25 per Unit, resulting in net proceeds of $324,480 after expenses.
The Class A and Class B warrants have an exercise price of $2.50 and $4.00,
respectively. In September 1999, the Company extended the expiration date of
all Class A and Class B warrants for a period of two years from November 1,
1999 to November 1, 2001. As of October 31, 1999 no such warrants had been
exercised.

During March 1997, the Company issued an additional 202,840 Units to certain
shareholders (including the principal officer of the Company) in exchange for
$253,550 of indebtedness owed to these shareholders. These Units consisted of
202,840 shares of common stock, as well as 202,840 Class A warrants and 202,840
Class B warrants to purchase, in the aggregate, 405,680 shares of common stock.
The Units were issued at a rate of one Unit for each $1.25 of shareholder debt
forgiven. The Class A and Class B warrants have an exercise price of $2.50 and
$4.00, respectively, and expire on November 1, 2001. As of October 31, 1999, no
such warrants had been exercised.

In April 1997, in connection with a loan from a finance company, warrants were
granted to the finance company to purchase 100,000 shares of common stock at a
price of $2.00 per share, exercisable at any time during the six years following
the date of the loan.

7.   BENEFIT PLAN

The Company has adopted a defined contribution retirement plan (Plan) which
qualifies under Section 401(k) of the Internal Revenue Code. The Plan covers
substantially all employees with over one year of service. The Company makes an
annual election to provide matching contributions of up to 50% of each
participant's deferral up to a maximum of 3% of compensation. The amounts of
matching contributions included in expense were $85,747 and $83,758 for the
years ended October 31, 1999 and 1998, respectively.


                                                                            F-13
<PAGE>



               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

8.   STOCK OPTIONS

In September 1996, the Company adopted the 1996 Stock Incentive Plan (Plan) to
allow officers, employees and certain non-employees to receive certain options
to purchase common stock and to receive grants of common stock subject to
certain restrictions. Under the Plan, regular salaried employees, including
directors, who are full time employees, may be granted options exercisable at
not less than 100 percent of the fair market value of the shares at the date of
grant. The exercise price of any option granted to an optionee who owns stock
possessing more than ten percent of the voting power of all classes of common
stock of the Company must be 110 percent of the fair market value of the common
stock on the date of grant, and the duration may not exceed five years. Options
generally become exercisable at a rate of one-third of the shares subject to
option on each of the first, second and third anniversary dates of the grant.
The duration of options may not exceed ten years. A maximum number of 1,500,000
shares of common stock may be issued under the Plan.

In October 1998, the Board of Directors adopted a resolution under which
employees with existing options had the choice to surrender all or part of such
options and receive new options issued by the Company. In general, the Company
agreed to issue two new options for each three options surrendered by an
employee, and employees who chose to surrender existing options lost any vesting
they previously had with respect to the options surrendered. In connection with
this plan, employees surrendered a total of 1,084,000 options (generally at an
exercise price of $1.50 per share) and received a total of 724,050 newly issued
options at an exercise price of $0.25 per share, which was the fair market price
on the day of the grant of the newly issued options.

The following table summarizes stock option activity:

<TABLE>
<CAPTION>

                                                                         YEAR ENDED OCTOBER 31
                                                                 1999                             1998
                                                      ----------------------------     ----------------------------
                                                                       WEIGHTED                         WEIGHTED
                                                                        AVERAGE                          AVERAGE
                                                                       EXERCISE                         EXERCISE
                                                          SHARES         PRICE             SHARES         PRICE
                                                      ----------------------------     ----------------------------
<S>                                                  <C>             <C>              <C>             <C>
Outstanding at beginning of year                          877,854        $0.37          1,246,304         $1.44
Granted                                                   379,500        $0.25            807,550         $0.34
Exercised                                                       -            -                  -             -
Forfeited or cancelled                                   (119,350)       $0.31         (1,176,000)        $1.38
                                                      --------------- ------------     --------------- ------------

Outstanding at end of year                              1,138,004        $0.34            877,854         $0.37
                                                      =============== ============     =============== ============

Options exercisable at year-end                           670,504        $0.40            337,438         $0.45
                                                      =============== ============     =============== ============

</TABLE>

The weighted average fair value of options granted during the years ended
October 31, 1999 and 1998 was $0.25 and $0.34 at October 31, 1999 and 1998,
respectively. The weighted average remaining contractual life of stock
options was 6.00 years as of October 31, 1999. The range of prices of
outstanding options under the Plan at October 31, 1999 was $0.25 to $1.50.

                                                                            F-14



<PAGE>


               Medical Resources Management, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

8.   STOCK OPTIONS (CONTINUED)

Had compensation cost for the Company's option plans been determined based on
the fair value at the grant dates for awards under those plans consistent
with SFAS 123, the Company's net income and net income per share on a pro
forma basis would have been as indicated below:

<TABLE>
<CAPTION>

                                                                               YEAR ENDED OCTOBER 31
                                                                             1999                 1998
                                                                        ---------------       --------------
<S>                                                                    <C>                   <C>
        Net income as reported                                                $ 42,836             $169,825
                                                                        ===============       ==============
        Proforma net income (loss)                                            $xxx,xxx             $105,739
                                                                        ===============       ==============
        Net income per common share as reported                               $    .01             $    .02
                                                                        ===============       ==============
        Proforma net income (loss) per common share                           $    .xx             $    .01
                                                                        ===============       ==============
</TABLE>


The Company utilized the Black-Scholes method to estimate the fair value of
options, which includes the weighted average calculation of the fair value using
the following assumptions: (i) a risk-free interest rate of 6%; (ii) an
expected life of 8 years; (iii) expected volatility of 1.40; and (iv) no
expected dividends.

9.   COMMITMENTS AND RELATED PARTY TRANSACTIONS

The Company leases premises under non-cancelable operating leases expiring in
various years through 2001. The lease on the corporate headquarters contains
provisions for cost of living increases and certain options to renew for a
period of five additional years. Other facilities are on a month to month basis.
Future minimum lease payments are as follows during the years ending October 31:


<TABLE>

               <S>                                   <C>

                    2000                                      $208,799
                    2001                                       112,605
                    2002                                             -
                    2003                                             -
                    2004                                             -
                                                        ---------------
                                                              $321,404
                                                        ===============

</TABLE>

Rent expense was $306,483 and $296,435 for the years ended October 31, 1999 and
1998, respectively.

The Company paid consulting fees to a member of the Board of Directors in the
amount of $44,000 during the fiscal year ended October 31, 1998. This consulting
arrangement was terminated effective October 1, 1998.

10.   EMPLOYEE STOCK OWNERSHIP PLAN

On August 7, 1992, the Company formed an employee stock ownership plan (ESOP)
for the benefit of all employees meeting certain minimum age and length of
service requirements. Contributions are discretionary and are determined
annually by the Board of Directors. No contribution was made for either of the
years ended October 31, 1999 or 1998. This ESOP was dissolved as of October 31,
1999.

                                                                            F-15