<PAGE>

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

                                   FORM 10-KSB
(Mark One)

/X/         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
            EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED MARCH 31, 2000

/ /         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
            EXCHANGE ACT OF 1934 FOR THE
              TRANSITION PERIOD FROM _______________ TO ________________

                         COMMISSION FILE NUMBER 0-23514

                         ROCKPORT HEALTHCARE GROUP, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


       Delaware                                        33-0611497
--------------------------------------------------------------------------------
(State or other jurisdiction of                     (IRS Employer
incorporation or organization)                      Identification No.)

   50 Briar Hollow Lane, Suite 515W, Houston, Texas                 77027
--------------------------------------------------------------------------------
   (Address of principal executive offices)                      (Zip Code)

       Registrant's telephone number, including area code: (713) 621-9424

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

           Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock
                                ----------------
                                (Title of Class)

         Check whether the Issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing 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 is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. /X/

         Issuer's revenues for the fiscal year ended March 31, 2000, were
$293,193

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the Issuer as of May 31, 2000, based upon the average
bid and asked price as of such date, was $3,489,210.

         The Registrant's common stock outstanding as of May 31, 2000, was
6,210,127 shares

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE
--------------------------------------------------------------------------------
    Transitional Small Business Disclosure Format (Check One): Yes / / No /X/

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

         Rockport Healthcare Group, Inc. (the "Company" or "Rockport") is a
managed healthcare company that offers its proprietary network of healthcare
providers of services and products, primarily to large employers and insurance
companies for the benefit of employees with work related illnesses and injuries.
In addition to medical healthcare networks for work related illnesses and
injuries, Rockport also offers individual and group medical networks for
accidents and illnesses, medical networks for catastrophic illnesses and
injuries, and access to national medical, dental, prescription, chiropractic and
vision networks via private label or retail medical access savings cards.

         The Company's products and services are designed to reduce medical
costs while maintaining high quality medical care. The Company establishes
proprietary networks of contracted healthcare providers who agree to provide
healthcare products and services for fees which are less than the state mandated
fee under workers compensation laws and regulations and/or below usual and
customary allowables. Rockport contracts with employers and insurance companies
to provide access to these networks primarily for the benefit of their employees
with work related illnesses and injuries. When employees elect to use the
Company's network of healthcare product and service providers, the Company earns
fees equal to a percentage of the savings realized by the employer or insurance
company. These fees constitute the majority of the Company's revenue. The
proprietary networks are referred to as Preferred Provider Organizations
("PPO's") or Exclusive Provider Organizations ("EPO's").

ORGANIZATIONAL HISTORY

         The Company was incorporated in the State of Delaware on May 4, 1992,
as Protokopus Corporation. On December 17, 1997, the Company acquired all of the
issued and outstanding common stock of Rockport Group of Texas, Inc. ("Rockport
Texas"), a Nevada corporation ("Rockport Texas"), in a business combination
accounted for as a reverse acquisition. Pursuant to an Agreement and Plan of
Reorganization dated December 12, 1997, between the Company and Rockport Texas,
each outstanding share of common stock of Rockport Texas was converted to the
right to receive 961.6212 shares of common stock of the Company. On January 18,
1998, the Company changed its name from Protokopus Corporation to Rockport
Healthcare Group, Inc.

         In late November 1998, the Company filed its Form 211. The Company
received its clearance letter from the National Association of Securities
Dealers ("NASD") on January 20, 1999, to begin trading its stock via the
Over-The-Counter ("OTC") Bulletin Board. The Company began trading on the OTC
Bulletin Board under the symbol "RPHL" on February 12, 1999.


                                     -1-
<PAGE>


THE COMPANY'S PRODUCTS AND SERVICES

         The Company assists its customers in managing increased medical costs
associated with workers' compensation and group health plans by providing these
customers access to the Company's network of healthcare professionals and
facilities (the "Provider Network") consisting of PPO's and EPO's. The Company
also markets its medical access savings card. The Card offers the holder
discounted healthcare services and products throughout the United States. By
utilizing the Company's network of healthcare professionals and facilities, the
holder of a Card gets a discount on physician services, healthcare facilities,
prescriptions, dental services, chiropractic services, vision care services, and
hearing providers and other services and products.

         The Provider Network is designed to reduce the price paid by the
Company's customers for medical services. The customer realizes savings due to
the reduced cost of healthcare services provided under the Provider Network and
its PPOs and EPOs. PPOs are typically groups of hospitals, physicians and other
healthcare providers that offer services at pre-negotiated rates to employer
groups. EPOs are networks in which the healthcare providers have agreed to
certain additional administrative pathways that are appropriate for occupational
medicine in exchange for greater financial incentives found in the PPO network
of providers. The Company, through its subsidiaries, provides PPO and EPO
networks as a part of its Provider Network for work related illnesses and
injuries, for accidents and illnesses (individual and group networks), and for
catastrophic illnesses and injuries. The Provider Network is marketed to third
party administrators, managed care organizations, insurers, case and utilization
management companies, self-funded employers, and other similar organizations.
Currently, the Company provides the Provider Network primarily in the area of
work related illnesses and injuries.

         The Company's customers obtain reduced healthcare costs from the
Provider Network because the rate structure negotiated by the Company with
providers in its PPOs and EPOs are lower than the customers may otherwise be
able to obtain. For work related illnesses and injuries, employers obtain
reduced costs because the rate reductions by the providers in the Provider
Network are less than the state mandated fee schedules and/or below the usual
and customary allowables. As compensation, the Company receives a percentage of
the savings realized by the customer due to its employee's utilization of the
Provider Network. These fees constitute the majority of the Company's revenue.

         The healthcare providers selected by the Company for its Provider
Network are selected on the basis of their clinical qualifications and their
adherence to the standards of care and service developed by the Company. The
Company ensures that the providers are geographically appropriate, accessible
and consumer friendly. The providers are required to approach the provision of
healthcare services in manner that groups related diagnoses and treatment
services as collective events. The providers monitor, document and report
treatment outcomes. The Company uses the results of these reports to improve the
processes and procedures of the Provider Network so that it provides high
quality care to the customers and the reports also allow the Company to improve
the Provider Network.

         The Company has increased the number of providers that are a part of
its Provider Network. In 1999, the Company acquired a Texas PPO which has
contracts with 65 hospitals and 8,000 providers. The Company has also negotiated
access agreements with hospitals


                                     -2-
<PAGE>


and providers in Arizona, California, Florida, Indiana, Louisiana, Nevada,
Ohio, Oklahoma and Tennessee as part of its development plan to create a
nationwide PPO network. Negotiations have begun with hospitals and providers
in Arkansas, Georgia, Mississippi, North Carolina, South Carolina and
Virginia to add these states to the nationwide network.

         The Company utilizes four wholly owned subsidiaries in providing the
Provider Networks. The Company offers the Provider Network for work related
injuries and illnesses through Rockport Community Network, Inc., Rockport
Occupational Network, Inc. and Newton Healthcare Network, LLC. Through Rockport
Advanced Care, Inc., the Company intends to expand the scope of the Provider
Network in 2001 and 2002 to encompass networks with healthcare providers
servicing customers in the areas of disease, illness and injury-specific
tertiary and quartinary care (including, trauma, burns, transplants, hearts,
high-risk maternal, prenatal and neonatal, cancer, neurological and
gastrointestinal care).

         The Company, through its wholly owned subsidiary Rockport Preferred,
Inc., offers customers the ability to obtain discounts on quality medical and
healthcare services by purchasing its Medical Access Saving Card. The Card
offers customers a discount on healthcare services delivered by physicians,
healthcare facilities, dentists, chiropractors, vision care providers and
hearing providers throughout the United States and a discount on prescriptions
throughout the United States. Typically, the Card can provide users with a 30%
discount on vision, dental and chiropractic, and hearing health services and on
prescriptions. The Company charges its customers an annual fee for the Card,
based upon the particular types of services and products for which a discount is
provided under the card. The appeal of the Card to employers is that while its
employees enjoy a significant cost savings on healthcare services, the employer
is provided with a simple solution for the administration of healthcare costs.

         The market potential for the Medical Access Savings Card is large. It
is estimated that there are 110 million individuals in the United States who are
either uninsured or underinsured. These individuals could potentially benefit
from the Card. The Company plans to offer the Card both as a retail product and
as a product through private branding channels. With private branding, the Card
can be custom tailored by the sponsor or endorser to provide specific programs
and can contain branding identification of the sponsor or endorser.

         The Company also offers support services to other companies in the
healthcare industry. For a fee, the Company provides companies in the heath care
industry management information services, customer services, physician and
facility referrals, contracting services (contracting providers and payors),
credentialing services (credentialing providers), and re-pricing.

COMPETITION

         The managed healthcare industry and the Company's markets are highly
competitive. Healthcare, despite a continually changing reimbursement formula
and ten-year decline in net margins, continues to be this country's most
competitive industry. Quality and price of services and products, however,
continue to be distinguishing factors that customers and consumers will seek out
and purchase. The Company will compete by delivering comprehensive, integrated
services and/or products to defined healthcare populations with excellent
customer services and extremely competitive pricing. There are many managed
healthcare organizations, including many that are larger and have financial
resources


                                     -3-
<PAGE>


significantly greater than the Company's. Included among the Company's
competitors are CorVel Corporation, First Health Corp., CCN and Focus. Most
of the competitors are national networks.

         The Company anticipates it will only participate in one business
industry, the managed healthcare industry. This lack of diversification should
be considered a substantial risk in investing in the Company because it will not
permit the Company to offset potential losses from one venture against gains
from another. For several years the Federal government has proposed various
forms of national health insurance. Should a comprehensive national health
insurance program be enacted, the Company would have to modify its business plan
accordingly.

INTELLECTUAL PROPERTY, PROPRIETARY RIGHTS, AND LICENSES

         The Company regards certain features of its programs and services as
proprietary and relies on a combination of contract, copyright, trade secret
laws and other measures to protect its proprietary information. As part of its
confidentiality procedures, the Company generally obtains nondisclosure
agreements from its employees and hospital-clients and limits access to and
distribution of its software, documentation, and other proprietary information.
The Company believes that trade secret and copyright protection are less
significant than factors such as the knowledge, ability, and experience of the
Company's employees and the timeliness and quality of the services they provide.
The Company holds no federally registered trademarks.

GOVERNMENT REGULATION

         Managed healthcare programs for group healthcare and workers'
compensation are conducted within a regulated environment. The Company's
activities are regulated principally at the state level, which means the Company
may be required to comply with certain regulatory standards which differ from
state to state. Although the laws affecting the Company's operations vary widely
from state to state, these laws fall into four principal categories: (i) laws
that require licensing, certification or other approval of businesses that
provide managed healthcare services; (ii) laws regulating the operation of
managed care provider networks; (iii) laws that restrict the methods and
procedures that the Company may employ in its health and workers' compensation
managed care programs; and (iv) proposed laws which, if adopted, would have as
their objective the reform of the healthcare system as a whole.

         Generally, parties that actually provide or arrange for the provision
of healthcare services assume financial risk related to the provision of those
services, or undertake direct responsibility for making payment or payment
decisions for those services, are subject to a number of complex regulations
that govern many aspects of their conduct and operations. In contrast, the
services provided by the Company to its customers typically have not been the
subject of regulation by the federal government and most states. Since the
managed healthcare field is a rapidly expanding and changing industry and the
cost of providing healthcare continues to increase, it is possible that the
applicable state and federal regulatory frameworks will expand to more fully
regulate the conduct and operation of the Company's business.


                                     -4-
<PAGE>


         The Company's ability to provide comprehensive managed care services
depends in part on its ability to contract with or create networks of healthcare
facilities and providers which share the Company's objectives. The Company
offers access to networks of healthcare providers selected by the Company for
quality of care and pricing. New laws regulating the operation of managed care
provider networks have been adopted by a number of states. These laws may apply
to managed care provider networks having contracts with the Company or to
provider networks which the Company may organize or acquire. To the extent the
Company is governed by these regulations, it may be subject to additional
licensing requirements, financial oversight and procedural standards for
beneficiaries and providers. These regulations may result in increased costs of
operation for the Company, which may have an adverse impact upon the Company's
ability to compete with other available alternatives for healthcare cost
control.

         The Employee Retirement Income Security Act of 1974 ("ERISA"), governs
employee benefit plans offered by employers who self-insure. Employers opt to
self-insure as a way to underwrite their own health claims and better control
their healthcare costs. Regulation of such self-insured benefit plans falls
under the jurisdiction of the United States Department of Labor, which has
strict guidelines relative to such plans and to the Third Party Administrators
("TPA") which administer such plans. In addition to the ERISA guidelines, a TPA
may be subject to additional state requirements regarding registration.

         The Company does not engage in any professional practice or control the
cost of professional services. Likewise, the Company does not believe that
membership in the Company's programs constitutes insurance subjecting the
Company to laws and regulations governing healthcare insurers and their
operations. Certain regulations, present in most state and local jurisdictions,
relating to the standards governing licensed healthcare professionals, prohibit
such professionals from compensating any third person for soliciting patients or
patronage on their behalf.

         Regulations in the healthcare and workers' compensation insurance
fields are constantly evolving. The Company is unable to predict what additional
regulations, if any, affecting its business may be promulgated in the future.
The Company's business may be adversely affected by failure to comply with
existing laws and regulations, failure to obtain necessary licenses and
government approvals or failure to adapt to new or modified regulatory
requirements. Proposals for healthcare legislative reforms are regularly
considered at the federal and state levels. In addition, changes in workers'
compensation laws and regulations may impact demand for the Company's services,
require the Company to develop new or modified services to meet the demands of
the marketplace or modify the fees that the Company may charge for its services.

         Recently, the managed care industry has received significant amounts of
negative publicity. This publicity, in turn, has contributed to increased
legislative activity, regulation and review of industry practices. These factors
may adversely affect the Company's ability to market its products or services,
could necessitate changes in the Company's products and services, and may
increase regulatory burdens under which the Company operates, further increasing
the costs of doing business and adversely affecting profitability.


                                     -5-
<PAGE>


EMPLOYEES

         As of March 31, 2000, the Company had 18 full-time employees, with 17
employees located in Houston, Texas, and 1 employee located in Monument,
Colorado. The Company has no collective bargaining agreements with any unions
and believes that its overall relations with its employees are good.

VOLATILITY OF STOCK MARKET

         The market prices of the securities of certain publicly-held companies
in the industry in which the Company operates have shown volatility and
sensitivity in response to many factors, including general market trends, public
communications regarding managed care, legislative or regulatory actions,
healthcare cost trends, pricing trends, competition, earnings and acquisition
activity. There can be no assurance regarding the level or stability of the
Company's share price at any time or the impact of these or any other factors on
share price.


ITEM 2.            DESCRIPTION OF PROPERTY

         The Company's executive and administrative offices are located at 50
Briar Hollow Lane, Suite 515W, Houston, Texas 77027, which facilities are leased
by the Company from an unaffiliated third party. The Company's lease on these
premises covers 12,219 square feet and expires on June 30, 2005. The monthly
rental for such premises is as follow:

         July 11, 2000 to July 31, 2000:                      $0.00
         August 1, 2000 to December 31, 2000:                 $12,557.76
         January 1, 2001 to June 30, 2002:                    $16,332.55
         July 1, 2002 to June 30, 2003:                       $16,831.17
         July 1, 2003 to June 30, 2005:                       $17,340.80

           The Company believes that the current facilities are adequate for its
present needs. Furthermore, the Company believes that suitable additional or
replacement space will be available when required on terms acceptable to the
Company. The Company has no present intent to invest in real estate, real estate
mortgages or persons primarily engaged in real estate activities, however, the
Company may change this policy at any time without a vote of security holders.


ITEM 3.    LEGAL PROCEEDINGS

         None.


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

         None.


                                     -6-
<PAGE>
                                     PART II

ITEM 5.         MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                MATTERS

         One February 12, 1999, the Company's common stock began trading on
the OTC Bulletin Board market under the symbol "RPHL." The following table
sets forth the approximate high and low closing sales prices per share as
reported on the NASD OTC Bulletin Board for the Company's common stock for the
periods indicated. The quotations reflect inter-dealer prices, without retail
markups, markdowns or commissions and may not represent actual transactions.

<TABLE>
<CAPTION>

Fiscal Year 2000:                                                      High             Low
                                                                       ----             ---
         <S>                                                           <C>              <C>

         Quarter Ended March 31, 2000. . . . . . . . . . . .           $2.06            $1.38
         Quarter Ended December 31, 1999 . . . . . . . . . .           $3.81            $1.81
         Quarter Ended September 30, 1999. . . . . . . . . .           $8.25            $2.25
         Quarter Ended June 30, 1999 . . . . . . . . . . . .           $9.25            $5.00

Fiscal Year 1999:

         Quarter Ended March 31, 1999. . . . . . . . . . . .           $8.75            $2.50

</TABLE>

         As of March 31, 2000, there were approximately 400 stockholders of
record of the Company's common stock. The Company has neither declared nor
paid any cash dividends to date. The Company does not anticipate paying
dividends in the foreseeable future until such time as the Company has
sufficient cash flow from operations to justify payment of a dividend.

         During the twelve month period ended March 31, 2000, the Company
issued 1,714,358 shares of its common stock. These shares were sold for cash,
issued for services rendered to the Company, and issued as inducement for
making loans to the Company.

RECENT SALES OF UNREGISTERED SECURITIES

         Set forth below is certain information concerning all sales of
securities by the Company that were not registered under the Securities Act.

         From June 1, 1999 to March 2, 2000, pursuant to Rule 506 of
Regulation D, the Company issued and sold 527,619 shares of its common stock
to 31 accredited investors for an aggregate consideration of $672,239.

         On May 27, 1999, under the terms of a written contract executed by
the Company, the Company issued 20,000 shares of common stock to Carl Chase in
consideration of financial accounting services valued at $40,000 pursuant to
the exemption provided by Section 4(2) of the Securities Act.


                                      -7-

<PAGE>

         On July 23, 1999, the Company issued to Margaret Jones 50,000 shares
of common stock in connection with her provision of a $100,000 loan to the
Company pursuant to the exemption provided by Section 4(2) of the Securities
Act.

         On August 11, 1999, the Company issued to Warfield & Company, CPA's,
25,000 shares of common stock in consideration of consulting services valued
at $25,000 pursuant to the exemption provided by Section 4(2) of the
Securities Act.

         On September 7, 1999, the Company issued to Rolf Eidbo 25,000 shares
of common stock in consideration of his financial advisory services to the
Company valued at $50,000 pursuant to the exemption provided by Section 4(2)
of the Securities Act.

         On September 8, 1999, under the terms of a written contract executed
by the Company, the Company issued 1,575 shares of common stock to Raliegh Van
Treese in consideration of legal services valued at $1,575 pursuant to Rule
701 of the Securities Act.

         On February 8, 2000, the Company issued 30,000 shares of common stock
to Jeffrey Lehrich and 7,500 shares of common stock to Allan Burshell pursuant
to the exemption provided by Section 4(2) of the Securities Act in
consideration of their assignment of rights pursuant to certain provider
contracts valued at $37,500 by the Company.

         On February 18, 2000, under the terms of a written contract executed
by the Company, the Company issued 1,300 shares of common stock to Christopher
L. Szczepanik in consideration for financial advisory services valued at
$1,300.

         On February 18, 2000, under the terms of a written contract executed
by the Company, the Company issued 410 shares of common stock to Kenneth
Wollenberg pursuant to Section 4(2) of the Securities Act in consideration for
financial advisory services valued at $410.

         On March 22, 2000, under the terms of a written contract executed by
the Company, the Company issued 20,000 shares of common stock to A. J. Miller
in consideration of consulting services valued at $20,000 pursuant to Rule 701
of the Securities Act.

On March 31, 2000, pursuant to Rule 506 of Regulation D, the Company issued
and sold 1,005,955 shares of its common stock to John K. Baldwin in
consideration for $754,466.

         Except as otherwise indicated, the Company believes that the
transactions described above were exempt from registration under the
Securities Act pursuant to Section 4(2) thereof as transactions not involving
any public offering because such securities were sold to a limited group of
persons, each of which was believed to have been a sophisticated investor or
had a pre-existing business or personal relationship with the Company or its
management and was purchasing for investment without a view to further
distribution. The Company took steps to ensure that the purchaser was
acquiring securities for purposes of investment and not with a view to
distribution, including execution of agreements concerning such purchaser's
investment intent. Except as otherwise indicated, all sales of the Company's
securities were made by officers of the Company who received no commission or
other remuneration for the solicitation of any person in connection with the
respective sales of securities described above. Restrictive legends were
placed on stock certificates evidencing the shares and/or agreements relating
to the right to purchase such shares.


                                      -8-

<PAGE>

ITEM 6.         MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
                AND FINANCIAL CONDITION

FORWARD LOOKING STATEMENTS

         This management discussion contains certain forward-looking
statements as identified by the use of words like "expects", "believes", and
"anticipates" and other similar phrases. Such statements reflect management's
current view of future financial performance based on certain assumptions,
risks and uncertainties. If any assumption, risk or uncertainty factors
change, such changes may have a material impact on actual financial results.
The Company is under no obligation to revise any forward-looking statements
contained herein, which are as of the date hereof. Readers are cautioned to
not place undue reliance on any forward-looking statements contained in this
discussion.

         The following discussion of the results of operations and financial
condition of Rockport Healthcare Group, Inc. for the years in the two year
period ended March 31, 2000, should be read in conjunction with the Company's
Financial Statements and related notes thereto and schedules included
elsewhere herein.

RESULTS OF OPERATIONS - YEARS ENDED MARCH 31, 2000 AND 1999

         REVENUE.

         Total revenue increased by $249,365, or 569%, from $43,828 in 1999 to
$293,193 in 2000. Fees for the use of the healthcare provider network for work
related illnesses and injuries increased 687% from $32,070 in 1999 to $252,236
in 2000. Additional revenue was provided by network development charges.

         During 2000, the Company continued its efforts in developing
compensation healthcare networks for work related illnesses and injuries in
various states and began aggressively marketing these networks. The Company
receives fees from companies who access and utilize its networks based on a
percentage of the cost savings achieved by the Clients utilizing the Company's
networks. The significant increase in the Company's clients is attributable to
the savings results being obtained by the current client base. The Company
intends to continue to expand its workers' compensation networks in other
states through contracting and acquisitions.

         The Company has developed a medical access savings card, which among
other things, allows the holder of the card the right to access national
networks in the areas of physicians, dentists, providers of vision, hearing
and chiropractic services; and receive the benefits of prescription discounts
and a 24-hour nurse "hot-line". The medical access savings card was developed
for those individuals who cannot afford medical insurance, are uninsurable or
require a supplement to their current medical insurance plan. By accessing the
networks provided by the medical access savings card, the holders of the cards
obtain national discounts of care providers' rates over the non-contracted
rates. The holder of the medical access savings card pays an annual fee to the
Company for the use of the card and the Company shares a portion of the fee
with the networks accessed by the medical access savings card. The Company is
currently seeking joint venture marketing partners to sell the card.


                                      -9-

<PAGE>

         COST OF SALES.

         Cost of sales increased from $3,097 during 1999 to $63,080 in 2000.
This was comprised primarily of fees the Company pays for accessing other
healthcare networks and commissions.

         GENERAL AND ADMINISTRATIVE EXPENSES.

         General and administrative expenses increased by $401,949, or 24%,
from $1,710,216 in 1999 to $2,112,165 in 2000. Increased staffing and
associated expenses to implement the Company's business plan were the primary
reasons for the increase. The Company is currently in a position to experience
a significant increase in revenue growth without a corresponding significant
increase in associated expenses thereby adding to the profitability of the
Company.

         INTEREST EXPENSE.

         Interest expense increased by $76,251, or 378%, from $20,179 in 1999
to $96,430 in 2000. This increase was a result of accrued interest payable on
the loans received by the Company during 2000.

LIQUIDITY AND CAPITAL RESOURCES

         The Company requires additional outside capital to implement its
business plan. The Company has funded its operations through the sale of
Company common stock, borrowing funds from outside sources and conversion of
employee and director debt to common stock of the Company.

         The Company has experienced significant revenue growth from the
utilization of its work related injuries and illnesses networks, and expects
this growth to continue during the following year. However, this continued
growth is conditioned on the Company signing more payors for its networks and
obtaining greater participation by consumers who are covered by such payors.
The Company will dedicate a significant portion of its future funding to the
continuing development and marketing of this product.

         Should the Company not be able to raise the necessary funding to
implement the Company's business plan, the Company would not be able to
proceed prospectively, and therefore, would no longer anticipate being a going
concern. Should the funding of the private placement of Company common stock
not materialize, the Company is investigating alternative methods of obtaining
the funding required to implement its business plan.

YEAR 2000 ISSUES

         The Year 2000 issue is the result of computer programs being written
using two digits (rather than four) to define the applicable year. Computer
programs that have time-sensitive software may not recognize dates beginning
in the year 2000, which could result in miscalculations or system failures.


                                     -10-

<PAGE>

Since all of the Company's computer programs have been created or purchased
from major vendors within the last two years, the Company is relying on these
vendors to ascertain and correct any Year 2000 Issues with the computer
programs. Additionally, the Company is also dependent on its contracted
medical providers, payor clients, and suppliers to successfully address their
respective Year 2000 Issues in connection with their computer systems and
claims processing functions.

         The consequences of an uncorrected Year 2000 Issue could include
business interruption, exposure to monetary claims by clients and others and
loss of business goodwill. The likelihood of these events and the possible
financial impact if they occur cannot be predicted. As of March 31, 2000, the
Company has not experienced any disruptions as a result of the Year 2000 Issue.

ITEM 7.         FINANCIAL STATEMENTS

         The consolidated financial statements attached to this Annual Report
on Form 10-KSB as pages F-1 to F-11 are incorporated herein by reference.

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

         The Company selected Hein + Associates, Certified Public Accountants,
Houston, Texas as its auditors for the years ended March 31, 2000 and 1999.

                                    PART III

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

         The members of the Board of Directors of the Company serve until the
next annual meeting of stockholders, or until their successors have been
elected. The executive officers serve at the pleasure of the Board of
Directors. The following table sets forth the name, age and position of each
of the persons who were serving on the Board of Directors and executive
officers of the Company as of March 31, 2000:

<TABLE>
<CAPTION>

Name                           Age      Position
----                           ---      --------
<S>                            <C>      <C>

John K. Baldwin                66       Chairman of the Board
Harry M. Neer                  60       President, Chief Executive Officer and Director
Larry K. Hinson                54       Secretary, Treasurer and Director
William W. Wollenberg          46       President, Rockport Community Network, Inc. and Director
Eric Kolstad                   39       Director

</TABLE>

         Set forth below is biographical information about each of the
Company's executive officers and Board members.

         JOHN K. BALDWIN. Mr. Baldwin has been Chairman of the Board and a
director of the Company since 1997. Mr. Baldwin is an attorney and possesses
an MBA degree in finance. During the period 1961 through 1970, Mr. Baldwin
served as corporate counsel and held various executive positions with Litton
Industries and Dart Industries. Thereafter, as an


                                     -11-

<PAGE>

entrepreneur, he founded businesses that operated profitably in the areas of
real estate development, direct sales to consumers and providing marketing and
financial services to healthcare providers. His wholly owned Athena Company, a
direct marketing business, was sold to the Gillette Company in 1976. In 1977,
Mr. Baldwin co-founded and served as Vice Chairman of American Sterling
Corporation that engaged in providing insurance and data processing to major
financial institutions. This business was sold to Zurich Insurance Company in
1997.

         HARRY M. NEER. Mr. Neer has been President, Chief Executive Officer
and a director of the Company since 1997. Mr. Neer has a Masters degree in
Hospital Administration and his entire career has been in the healthcare
delivery and managed healthcare industry. Mr. Neer's experience includes
serving as President of USA Health Network, as Division Vice President of the
Hospital Corporation of America (HCA) and as President of the Presbyterian
Hospital System in Oklahoma City, Oklahoma. From November 1994 to November
1997, Mr. Neer was a principal of Rockport Group of Texas, Inc. From January
1993 to October 1994 Mr. Neer was President of USA Health Holding Company, a
holding company for a group of managed healthcare companies. Prior to 1993,
Mr. Neer was a consultant for USA Healthcare Network, Inc. and the Columbia
Hospital Systems.

         LARRY K. HINSON. Mr. Hinson has been Secretary, Treasurer and a
director of the Company since 1997. Mr. Hinson has a Bachelor of Business
Administration degree with a major in accounting. Mr. Hinson has 30 years
experience as a CPA in a wide variety of industries that include 30 years of
experience in the insurance and healthcare industries. He has served as Chief
Financial Officer of USA Healthcare Network, Inc. and Vice President and
Treasurer of Reserve Life Insurance Company, Dallas, Texas, and was formerly
with KPMG, LLP in Dallas and Austin, Texas. From November 1994 to November
1997 Mr. Hinson was a principal of Rockport Group of Texas, Inc. From March
1989 to October 1994, Mr. Hinson was Vice Chairman and Chief Financial Officer
of USA Health Holding Company and its subsidiaries and also served as
President of USA Health Network Company.

         WILLIAM W. WOLLENBERG. Mr. Wollenberg has been President of Rockport
Community Network, Inc. since 1998. Mr. Wollenberg has a Bachelors degree in
Criminal Justice Administration. Mr. Wollenberg has 20 years of experience in
the healthcare industry. From 1991 to 1998, Mr. Wollenberg was Senior Sales
Manager and National Accounts Director for CNN/ Medview Services, Inc. in
Monument, Colorado. From 1987 to 1991, Mr. Wollenberg was Vice President and
Co-founder of Work Reconditioning Systems, Inc., which was one of the first
nationally recognized industrial based work hardening programs. Prior to 1987,
Mr. Wollenberg held various management positions in the worker's compensation
healthcare industry.

         ERIC KOLSTAD. Mr. Kolstad is currently an investment advisor with
Capstone Investments, Newport Beach, California. In 1985, Mr. Kolstad joined
Merrill Lynch's Private Client Group in Newport Beach and then in 1997 joined
Capstone Investments. Mr. Kolstad has been responsible for securing private
placement seed capital for numerous high tech companies, including; AdForce,
Inc. (filed S1 document on March 5, 1999 with SEC for an IPO in the 2nd
quarter of 1999), 2CanMedia, Inc. (merged with AdSmart Inc., a CMGI company on
March 10, 1999, in an $80 million transaction), Omnigon, Inc. Mr. Kolstad, in
addition to his Capstone responsibilities, is currently General Partner of
Cristal Investments, LLC, the general partner of a hedge fund for accredited
investors.


                                     -12-
<PAGE>

         The Company has no arrangement, understanding or intention of entering
into any transaction for participating in any business opportunity with any
officer, director or principal stockholder or with any firm or business
organization with which such persons are affiliated, whether by reason of stock
ownership, position as an officer or director or otherwise.

ITEM 10. EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

         Non-employee directors do not receive compensation for serving on the
Board of Directors, nor are they reimbursed for their expenses in attending
meetings of the Board of Directors.

COMPENSATION OF EXECUTIVE OFFICERS

         The following table summarizes the compensation paid to the executive
officers of the Company during the two years ended March 31, 2000 and 1999.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                 Fiscal                              Conversion of Salary          Options
Name and Principal Position       Year       Salary         Bonus       to Common Stock      Restricted Stock
----------------------------     ------    ------------    -------   --------------------    ----------------
<S>                              <C>       <C>             <C>       <C>                     <C>
Harry M. Neer                     2000     $117,500 (1)    $    0         $   -0-                   $0
  President and                   1999     $ 87,500 (2)    $    0         $40,500 (4)               $0
 Chief Executive Officer

Larry K. Hinson                   2000     $119,500 (1)    $    0         $   -0-                   $0
  Secretary and Treasurer         1999     $ 88,500 (2)    $    0         $35,500 (4)               $0

William W. Wollenberg             2000     $240,000        $9,500(3)      $    --                   $0
  President, Rockport             1999     $240,000        $    0         $    --                   $0
  Network, Inc.
</TABLE>

--------------

(1)      Does not include salary that has been accrued to Messrs. Neer and
         Hinson at March 31, 2000 of $21,000 and $3,000, respectively.

(2)      Does not include salary which was accrued at March 31, 1999 to Messrs.
         Neer and Hinson of $11,000 and $10,000, respectively.

(3)      Mr. Wollenberg accrued commission during the fiscal year ended March
         31, 2000, of which $9,500 was paid.

(4)      During 1999, Messrs. Neer and Hinson converted debt amounting to
         $109,842 and accrued and unpaid salary to common stock of the Company
         at $1 per share for a total of 150,342 and 35,500 shares, respectively.


                                    -13-
<PAGE>


         Mr. Wollenberg has a three year employment agreement with the Company
expiring in January, 2001, whereby he receives a fixed annual salary, a
commission based on various percentages of revenues earned by the Company and a
bonus, comprised of stock and cash, based on a percentage of the Company's
earnings before interest, taxes, depreciation and amortization. The Company does
not have employment agreements with any of its other executive officers.

         The Company does not have an employee stock option plan.

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information relating to beneficial
ownership of Company common stock by those persons beneficially holding more
than 5% of the Company capital stock, by the Company's directors and executive
officers, and by all of the Company's directors and executive officers as a
group, as of March 31, 2000.

<TABLE>
<CAPTION>
                                                             Percentage
Name of                             Number of                of Outstanding
Stockholder                         Shares Owned (1)         Common Stock (2)
-----------                         ----------------         ----------------
<S>                                 <C>                      <C>
John K. Baldwin                       1,672,847                    26.9%
901 Highland Avenue
Del Mar, CA 92014

Harry M. Neer (3)                       548,116                     8.8%

Larry K. Hinson (3)                     324,925                     5.2%

William W. Wollenberg(3)                100,000                     1.6%

Eric Kolstad                            129,250                     2.1%
317 Stonecliffe Isle
Irvine, CA 92612

Directors and executive officers
  as a group (five persons)           2,775,138                    44.7%


Robert D. Johnson (4)                   481,905                     7.8%
3934 FM 1960 West, Suite 240
Houston, TX 77068


Primex Capital USA                      394,760                     6.4%
4617 Montrose Blvd., #C-215
Houston, TX 77006
</TABLE>


--------------------------------------------------------------------------------

(1)      As of March 31, 2000.


                                    -14-
<PAGE>


(2)      Based on the number of shares of common stock outstanding (6,210,127)
         at the close of business on March 31, 2000.

(3)      The address of such person is in care of the Company.

(4)      Giving effect to $181,905 in loans and accrued interest which are
         convertible into 181,905 shares of common stock at the election of the
         lender. The shares and convertible debt are all held in the name of
         Bannon Energy Incorporated, of which Mr. Johnson is the sole
         stockholder.


ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

         John K. Baldwin, Chairman of the Board of Directors of the Company, has
made certain advances of operating capital during the current fiscal year in the
amount of $859,500. Of this amount, $734,500 plus accrued interest was converted
to equity on March 31, 2000, by the Company's issuance of 1,005,955 shares of
its common stock to Mr. Baldwin. In addition, Mr. Baldwin has committed to fund
another $375,000 during the subsequent fiscal year to fund operations.

                                     PART V

ITEM 13.      EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.  The following exhibits of the Company are included herein.

Exhibit No.     Description
-----------     -----------

3.1             Certificate of Incorporation of Registrant, dated April 28th,
                1992, as filed with the Secretary of State of Delaware on May
                4th, 1992 (incorporated by reference to Exhibit 3.1 to
                Registrant's Registration Statement on Form 10-SB, dated July
                26, 1994, SEC File No. 0-2351)

3.2             Amendment to Certificate of Incorporation of Registrant, dated
                January 16, 1998, as filed with the Secretary of State of on
                January 16, 2000 (incorporated by reference to Exhibit 3.1 to
                Registrant's Current Report on Form 8K/A, dated December 17,
                1997, SEC File No. 0-23514).

3.3             Bylaws of Registrant, dated as of May 4, 1992 (incorporated by
                reference to Exhibit 3.2 to Registrant's Annual Report on
                Registration Statement on Form 10-SB, dated July 26, 1994, SEC
                File No. 0-23514)

4               Specimen of Registrant's Common Stock Certificate.

10.1            Employment Agreement with William Wollenberg.

10.2            Lease Agreement at 50 Briar Hollow Lane, Suite 515W Houston,
                Texas 77027.


                                    -15-
<PAGE>


22              Subsidiaries of Registrant.

27              Financial Data Schedule.

         (b)      Reports on Form 8-K. None



                                    -16-
<PAGE>


                                   SIGNATURES


         Pursuant to 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.

                                   ROCKPORT HEALTHCARE GROUP, INC.


                                   By: /s/Larry K. Hinson
                                      -----------------------------------------
                                       Larry K. Hinson, Secretary and Treasurer

                                   Date: June 29, 2000
                                        ---------------------------------------


         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 and on the dates indicated.

<TABLE>
<CAPTION>
       Signature                        Title                            Date
       ---------                        -----                            ----
<S>                              <C>                                 <C>
/s/ John K. Baldwin              Chairman of the Board               June 29, 2000
------------------------------
John K. Baldwin

/s/ Harry M. Neer                President, Chief Executive          June 29, 2000
------------------------------   Officer and Director
Harry M. Neer

/s/ Larry K. Hinson              Secretary, Treasurer                June 29, 2000
------------------------------   and Director
Larry K. Hinson

/s/ William W. Wollenberg        Director                            June 29, 2000
------------------------------
William W. Wollenberg

/s/ Eric Kolstad                 Director                            June 29, 2000
------------------------------
Eric Kolstad
</TABLE>


                                    -17-
<PAGE>














                          INDEPENDENT AUDITOR'S REPORT



The Board of Directors
Rockport Healthcare Group, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheets of Rockport
Healthcare Group, Inc. and subsidiaries as of March 31, 2000 and 1999, and the
related consolidated statements of operations, changes in shareholders'
deficit and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Rockport
Healthcare Group, Inc. and subsidiaries as of March 31, 2000 and 1999, and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that Rockport Healthcare Group, Inc. and subsidiaries will continue as a going
concern. As more fully discussed in Note 10 to the financial statements, the
Company has incurred an accumulated net loss of $4,093,588 and negative
working capital of $713,516 as of March 31, 2000. This matter raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 10.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.





HEIN + ASSOCIATES LLP


Houston, Texas
May 26, 2000



                                     F-1

<PAGE>

                                          ROCKPORT HEALTHCARE GROUP, INC.


                                            CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                                  MARCH 31,
                                                                                    ------------------------------------
                                                                                          2000                 1999
                                                                                    -----------------    ---------------
       <S>                                                                          <C>                  <C>
                                                             ASSETS
                                                             ------
       CURRENT ASSETS:
           Cash                                                                     $       133,258      $        17,320
           Accounts receivable, no allowance for doubtful accounts                          100,716               13,357
           Prepaid expenses                                                                     980                1,028
                                                                                    ---------------      ---------------
                    Total current assets                                                    234,954               31,705
                                                                                    ---------------      ---------------

       PROPERTY, PLANT AND EQUIPMENT:
           Office furniture and equipment                                                    37,729               35,097
           Computer equipment and software                                                   65,025               51,892
           Telephone equipment                                                               15,734               15,085
                                                                                    ---------------      ---------------
                                                                                            118,488              102,074
           Less accumulated depreciation                                                    (40,558)             (20,418)
                                                                                    ---------------      ---------------
                    Net property, plant and equipment                                        77,930               81,656
                                                                                    ---------------      ---------------

       OTHER ASSETS:
           Deposits                                                                           9,038               10,015
           Accounts receivable, other                                                        81,250                    -
           Capitalized loan costs, net                                                       33,333              233,056
           Intangible assets, net                                                           126,739               99,849
                                                                                    ---------------      ---------------
                    Total other assets                                                      250,360              342,920
                                                                                    ---------------      ---------------
                    Total assets                                                    $       563,244      $       456,281
                                                                                    ===============      ===============

                                             LIABILITIES AND SHAREHOLDERS' DEFICIT
                                             -------------------------------------
       CURRENT LIABILITIES:
           Notes payable                                                            $       518,165      $       428,536
           Accounts payable                                                                  84,788               91,251
           Due to shareholders, directors, officers, and employees                           66,994               35,100
           Payroll tax payable                                                              120,913              139,157
           Other current liabilities                                                        157,610               34,091
                                                                                    ---------------      ---------------
                    Total liabilities                                                       948,470              728,135
                                                                                    ---------------      ---------------

       COMMITMENTS AND CONTINGENCIES (Notes 4, 5 and 7)

       SHAREHOLDERS' DEFICIT :
            Preferred stock, $.001 par value, 1,000,000 shares authorized,
                none issued                                                                       -                    -
           Stock subscription receivable                                                          -           (1,086,487)
           Common stock, $.001 par value, 20,000,000 shares authorized,
                6,210,127 and 4,937,169 shares issued and outstanding at
                March 31, 2000 and 1999, respectively                                         6,210                4,938
           Additional paid-in capital                                                     3,702,152            2,924,802
           Accumulated deficit                                                           (4,093,588)          (2,115,107)
                                                                                    ---------------      ---------------
                    Total shareholders' deficit                                            (385,226)            (271,854)
                                                                                    ---------------      ---------------
                    Total liabilities and shareholders' deficit                     $       563,244      $       456,281
                                                                                    ===============      ===============


</TABLE>


                   SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                               F-2

<PAGE>

                                         ROCKPORT HEALTHCARE GROUP, INC.


                                       CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>

                                                                                                     YEAR ENDED MARCH 31,
                                                                                            ------------------------------------
                                                                                                  2000                  1999
                                                                                            --------------        --------------
         <S>                                                                                <C>                   <C>
         REVENUES                                                                           $      293,193        $       43,828

         COST OF SALES                                                                              63,080                 3,097
                                                                                            --------------        --------------

         GROSS PROFIT                                                                              230,113                40,731
                                                                                            --------------        --------------

         GENERAL AND ADMINISTRATIVE EXPENSES                                                     2,112,164             1,710,216

         INTEREST, NET                                                                              96,430                20,179
                                                                                            --------------        --------------

         NET LOSS                                                                           $   (1,978,481)       $   (1,689,664)
                                                                                            ==============        ==============

         NET LOSS PER SHARE - BASIC AND DILUTED                                             $         (.38)       $         (.46)
                                                                                            ==============        ==============

         WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                                    5,243,231             3,706,168
                                                                                            ==============        ==============


</TABLE>








                    SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                F-3

<PAGE>

                                   ROCKPORT HEALTHCARE GROUP, INC.


                     CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
                                  YEARS ENDED MARCH 31, 2000 AND 1999


<TABLE>
<CAPTION>


                                                                                                      ACCUMULATED
                                                                                                        DEFICIT           TOTAL
                                                               COMMON STOCK           ADDITIONAL      DURING THE      SHAREHOLDERS'
                                           STOCK        -------------------------      PAID-IN        DEVELOPMENT        EQUITY
                                        SUBSCRIPTIONS      SHARES        AMOUNT        CAPITAL           STAGE          (DEFICIT)
                                       ---------------  -----------    ----------    ------------    ------------    -------------
<S>                                    <C>              <C>            <C>           <C>             <C>             <C>
Balances March 31, 1998 (restated)     $            -     2,461,472    $    2,462    $    198,930    $   (425,443)   $    (224,051)
Common stock issued for cash                        -       674,100           674         426,076               -          426,750
Stock issued for subscription              (1,305,487)      805,487           806       1,304,681               -                -
Stock issued for services                           -       171,150           171         170,980               -          171,151
Stock issued in connection with debt                -       400,000           400         399,600               -          400,000
Stock issued to acquire Newton
  Healthcare Network, LLC                           -       100,000           100          99,900               -          100,000
Conversion of debt to equity                        -       324,960           325         324,635               -          324,960
Collection of stock subscription              219,000             -             -               -               -          219,000
Net loss                                            -             -             -               -      (1,689,664)      (1,689,664)
                                       --------------   -----------    ----------    ------------    ------------    -------------
Balances March 31, 1999                    (1,086,487)    4,937,169         4,938       2,924,802      (2,115,107)        (271,854)
Stock issued for cash                               -       527,618           527         691,684               -          692,211
Stock issued for services                           -        66,710            66         117,122               -          117,188
Stock issued in connection with loans               -        50,000            50          99,950               -          100,000
Stock issued for an acquisition                     -        37,500            38          37,462               -           37,500
Debt converted to equity                            -     1,032,530         1,032         760,043               -          761,075
Stock warrants sold                                 -             -             -          17,532               -           17,532
Reduction of stock subscription
  receivable to amounts collected             920,400      (441,400)         (441)       (940,959)              -          (21,000)
Collection of stock subscriptions             166,087             -             -          (5,484)              -          160,603
Net loss                                            -             -             -               -      (1,978,481)      (1,978,481)
                                       --------------   -----------    ----------    ------------    ------------    -------------
Balance, end of period                 $            -     6,210,127         6,210    $  3,702,152    $ (4,093,588)   $    (385,226)
                                       ==============   ===========    ==========    ============    ============    =============


</TABLE>



                   SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                                F-4


<PAGE>

                                          ROCKPORT HEALTHCARE GROUP, INC.


                                              STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           YEARS ENDED MARCH 31,
                                                                                    ------------------------------------
                                                                                          2000               1999
                                                                                    -----------------  -----------------
<S>                                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                         $    (1,978,481)   $    (1,689,664)
   Adjustments to reconcile net loss to cash flow used by operating activities:
         Depreciation                                                                        20,140             14,694
         Amortization                                                                       310,333            200,542
         Issuance of stock for services                                                     117,188            171,151
         Changes in assets and liabilities:
            Accounts receivable - trade and other                                          (168,609)           (46,955)
            Prepaid expenses                                                                     48              6,521
            Accounts payable                                                                 20,112             61,139
            Accrued expenses                                                                153,734            152,406
            Other assets                                                                        979              3,841
                                                                                    ---------------    ---------------
CASH USED BY OPERATING ACTIVITIES                                                        (1,524,556)        (1,126,325)
                                                                                    ---------------    ---------------
INVESTING ACTIVITIES:
   Purchase of fixed assets                                                                 (16,415)           (24,690)
   Proceeds from note receivable                                                                  -             20,000
   Cash acquired from acquisition of Newton Healthcare Network, LLC                               -                151
   Investments acquired                                                                     (37,500)                 -
                                                                                    ---------------    ---------------
CASH USED IN INVESTING ACTIVITIES                                                           (53,915)            (4,539)
                                                                                    ---------------    ---------------
FINANCING ACTIVITIES:
   Proceeds from sale of stock                                                      $       692,211    $       426,750
   Proceeds from notes payable                                                            1,105,496            485,536
   Repayments of notes payable                                                             (281,433)           (25,000)
   Loans from officer                                                                             -             40,500
   Sale of stock warrants                                                                    17,532                  -
   Proceeds from stock subscription                                                         160,603            219,000
                                                                                    ---------------    ---------------
CASH PROVIDED BY FINANCING ACTIVITIES                                                     1,694,409          1,146,786
                                                                                    ---------------    ---------------
NET INCREASE IN CASH                                                                        115,938             15,922
CASH AND CASH EQUIVALENTS, beginning of year                                                 17,320              1,398
                                                                                    ---------------    ---------------
CASH AND CASH EQUIVALENTS, end of year                                              $       133,258    $        17,320
                                                                                    ===============    ===============
NON-CASH TRANSACTIONS:
   Stock issued for subscriptions                                                   $       (21,000)   $     1,305,487
   Stock issued to convert debt to equity                                                   761,075            324,960
   Non-cash assets of Newton Healthcare Network, LLC                                              -             99,849
   Non-cash assets of Primary Provider Management Company                                    37,500                  -
                                                                                    ===============    ===============

</TABLE>





                   SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                              F-5
<PAGE>

                         ROCKPORT HEALTHCARE GROUP, INC.
                   (FORMERLY KNOWN AS PROTOKOPOS CORPORATION)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                 MARCH 31, 2000



1.       DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BUSINESS

         Rockport Healthcare Group, Inc., a Delaware corporation (the
"Company"), formerly Protokopos Corporation, was incorporated on May 4, 1992.
The Company had no operating history other than organizational matters until
December 17, 1997, at which time the Company acquired all of the issued and
outstanding common stock of The Rockport Group of Texas, Inc. ("Rockport").
For accounting purposes, the acquisition has been treated as a reverse
acquisition of the Company by Rockport (see Note 6, "Reverse Acquisition by
Rockport"). The capital section of the Company was restated to reflect the
reverse merger.

         The Company was established as a holding company to develop and/or
acquire business entities that deliver comprehensive, integrated products
and/or services to targeted healthcare populations. These products and
services include, but are not limited to, medical healthcare networks for
workers' compensation injuries and rehabilitation, individual and group
medical networks for accidents and illnesses, medical networks for
catastrophic illnesses and injuries and access to national medical, dental,
prescription, chiropractic and vision networks via private label or retail
medical access savings cards. The goal of the Company is to develop and
deliver high value, quality healthcare services and programs that create
provider and customer satisfaction as well as result in appropriate financial
return to investors in the Company.

         The Company had the following wholly owned subsidiaries as of March
31, 2000 :

                  Rockport Advanced Care, Inc.
                  Rockport Community Network, Inc.
                  Rockport Group of Texas, Inc.
                  Rockport Occupational Network, Inc.
                  Rockport Preferred, Inc.
                  Newton Healthcare Network, LLC

All significant intercompany balances and transactions have been eliminated
for the purpose of presenting the accompanying consolidated financial
statements.

         CASH AND CASH EQUIVALENTS

         Cash and cash equivalents consist of cash on hand and held in banks in
unrestricted accounts.

                                       F-6

<PAGE>

                         ROCKPORT HEALTHCARE GROUP, INC.
                   (FORMERLY KNOWN AS PROTOKOPOS CORPORATION)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

         PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment are stated at cost. Depreciation is
computed on the straight-line method over the estimated economic lives of the
assets which range from 3 to 7 years.

         INCOME TAXES

         The Company accounts for income taxes on the liability method, under
which the amount of deferred income taxes is based on the tax effects of the
differences between the financial and income tax basis of the Company's
assets, liabilities, and operating loss carryforwards at the balance sheet
date based upon existing tax laws. Deferred tax assets are recognized if it
is more likely than not that the future income tax benefit will be realized.
Since utilization of net operating loss carryforwards is not assured, no
benefit for future offset of taxable income has been recognized in the
accompanying financial statements.

         LONG-LIVED ASSETS

         The Company reviews for the impairment of long-lived assets whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. An impairment loss would be recognized when
estimated future cash flows expected to result from the use of the asset and
its eventual disposition are less than its carrying amount. The Company has
not identified any such impairment losses.

         USE OF ESTIMATES

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

         LOAN FEES

         Loan fees incurred to obtain financing aggregating $500,000 are
being amortized using the interest yield method over the term of the related
notes payable. Accumulated amortization aggregated $466,667 and $166,944 at
March 31, 2000 and 1999, respectively.

         PROVIDER CONTRACTS

         Amounts paid for provider contracts are amortized to expense on the
straight-line method over the estimated life of the contracts of 10 to 20
years.

                                       F-7

<PAGE>

                         ROCKPORT HEALTHCARE GROUP, INC.
                   (FORMERLY KNOWN AS PROTOKOPOS CORPORATION)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

         COMPREHENSIVE INCOME (LOSS)

         Comprehensive income is defined as all changes in stockholders'
equity, exclusive of transactions with owners, such as capital instruments.
Comprehensive income includes net income or loss, changes in certain assets
and liabilities that are reported directly in equity such as translation
adjustments on investment in foreign subsidiaries, changes in market value of
certain investments in securities, and certain changes in minimum pension
liabilities. The Company's comprehensive income was equal to its net loss for
the years ended March 31, 2000 and 1999.

         REVENUE RECOGNITION

         Revenue is recognized as products and services are delivered and
earned. Losses are recognized when reasonable estimates of the amount of the
loss can be made.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The fair values of financial instruments, primarily accounts
receivable, accounts payable and notes payable, closely approximate the
carrying values of the instruments due to the short-term maturities of such
instruments.

2.       STOCK SUBSCRIPTION RECEIVABLE

         The Company had a stock subscription receivable as of March 31, 1999
due from a third party. Of the original amount subscribed, $160,603 was
collected during the year ended March 31, 2000. The balance of the receivable
was eliminated by canceling the stock originally issued.

3.       NOTES PAYABLE

<TABLE>
<CAPTION>

         Notes payable consist of the following:

                                                                                    March 31
                                                                        --------------------------------
                                                                             2000              1999
                                                                        ---------------   --------------
       <S>                                                              <C>               <C>
       Unsecured note payable to a stockholder, due in monthly
          installments of $2,482, with interest at 8%.                  $       11,260    $      28,536

       Unsecured note payable to a stockholder, with interest at
          8%.  The note matures in December 2001. This note has
          no set payment terms.                                                125,000          549,500

       Convertible notes payable to a stockholder, with interest
          at 15%. The note is guaranteed by two officers and
          shareholders and is convertible into 100,000 shares of
          Rockport Healthcare Group, Inc. common stock at any
          time before November 2000. The Company issued 150,000
          shares of its common stock in connection with these
          notes.                                                               200,000          100,000
</TABLE>

                                       F-8

<PAGE>

                            ROCKPORT HEALTHCARE GROUP, INC.
                      (FORMERLY KNOWN AS PROTOKOPOS CORPORATION)


                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.       NOTES PAYABLE  (continued)

         Convertible notes payable to a stockholder, due in monthly
           installments of $26,725, with 18% interest, due January
           2001. The note is collateralized by all Company assets
           and is convertible into 300,000 shares of Rockport
           Healthcare Group, Inc. common stock at any time
           before January 2001. The Company issued 300,000
           shares of common stock in connection with these notes.
<TABLE>
         <S>                                                            <C>               <C>
                                                                               181,905          300,000
                                                                        --------------    -------------

         Total                                                          $      518,165    $     978,036
                                                                        ==============    =============

</TABLE>

         On March 31, 2000, $734,500 of advances due under a note to a
stockholder, plus accrued interest of $19,966, was converted into 1,005,955
shares of the Company's common stock.


4.       LEASES

         The Company's subsidiary has assumed leases for office space and
equipment under operating leases expiring at various dates through 2005.
Management expects that in the normal course of business, leases will be
renewed or replaced by similar leases. Future minimum lease payments under
noncancellable leases with terms in excess of one year are as follows:


<TABLE>
<CAPTION>

             Years Ending March 31,
             ----------------------
             <S>                                            <C>
                    2001                                    $     174,083
                    2002                                          225,428
                    2003                                          227,776
                    2004                                          232,710
                    2005                                          230,668
                                                            -------------
                             Total                          $   1,090,665
                                                            =============

</TABLE>

5.       ACQUISITIONS

         On September 19, 1999, the Company acquired Primary Provider
Management Company, Inc. ("PPMC"), a preferred provider organization in San
Antonio, Texas, for 37,500 shares of the Company's stock plus a 10% commission
on revenue generated from the healthcare provider contracts acquired. The
acquisition was accounted for under the purchase method of accounting. The
Company's stock was valued at $1 per share, and the assets acquired,
consisting of provider contracts, are being amortized over a ten-year period.

                                     F-9

<PAGE>

                            ROCKPORT HEALTHCARE GROUP, INC.
                      (FORMERLY KNOWN AS PROTOKOPOS CORPORATION)


                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.       ACQUISITIONS  (continued)

         On September 14, 1998, Rockport Community Network, Inc., a wholly
owned subsidiary of the Company, acquired 100% of the membership interests of
Newton Healthcare Network, LLC ("Newton"), a Texas limited liability company,
for 100,000 shares of the Company's restricted common stock. A company, owned
by a Director of the Company, owned 85% of the membership interest and
received a 2% overriding royalty interest on the gross revenues of Newton and
Rockport Community Network, Inc. The acquisition has been accounted for on the
purchase method of accounting. Newton had $151 of cash and no other assets or
liabilities on the date of acquisition other than healthcare provider
contracts. An intangible asset representing the estimated fair value of the
provider contracts acquired was recorded in the amount of $99,849 and is being
amortized on the straight-line method over a 20-year period.


6.       REVERSE ACQUISITION BY ROCKPORT

         On December 17, 1997, the shareholders of Rockport approved a merger
with Protokopos Corporation (the "Merger"). Pursuant to the Merger Agreement,
each outstanding share of Rockport, par value $1 per share, was converted to
the right to receive 961.6213 shares of Protokopos Corporation, par value
$.001 per share. After the completion of the Merger, Protokopos Corporation
changed its name to Rockport Healthcare Group, Inc. At the conclusion of the
Merger, the Company had 2,461,472 shares of common stock outstanding. As of
the date of the acquisition, Protokopos had no assets or liabilities.


7.       CONTINGENT LIABILITIES

         One of the Company's subsidiaries has issued 1,000 shares of its 8%,
cumulative, non-participating preferred stock. The stock is redeemable at $200
per share and is redeemable out of future cash flows of the Company.

         The Company has entered into a consulting agreement with an
individual, effective April 1, 2000, that provides for monthly payments of
$12,500 plus 2% of the Company's gross revenues. The agreement expires on
March 31, 2001.


8.       STOCK WARRANTS

         During the fiscal year ended March 31, 2000, the Company sold
warrants to purchase common stock of the Company at any time until September
1, 2002 for $1.75 a share. The warrants were sold for $.25 per share. Total
proceeds from the sale of the warrants amounted to $17,532.


9.       RELATED PARTY TRANSACTIONS

         The Company incurred management fees to various shareholders and
directors in the amount of $182,500 for the year end March 31, 2000.

         See Note 3 for a discussion of financing provided by related parties.

                                    F-10

<PAGE>

                            ROCKPORT HEALTHCARE GROUP, INC.
                      (FORMERLY KNOWN AS PROTOKOPOS CORPORATION)


                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10.      GOING CONCERN

         The accompanying financial statements have been prepared assuming
that Rockport Healthcare Group, Inc. will continue as a going concern. The
Company has incurred an accumulated net loss of $4,093,588 and has negative
working capital of $713,516 as of March 31, 2000. This matter raises
substantial doubt about the Company's ability to continue as a going concern.

         The Company has funded its operations through the sale of Company
common stock, borrowing funds from outside sources and converting employee and
director debt to common stock of the Company. Should the Company not be able
to raise the necessary funding to implement its business plan, the Company may
not be able to continue as a going concern.


11.      INCOME TAXES

         The tax effect of significant temporary differences representing
deferred tax assets and liabilities at March 31, 1999 and 2000, is as follows:


<TABLE>
<CAPTION>

                                                                March 31,
                                                   ------------------------------------
                                                         2000                 1999
                                                   ----------------     ---------------
    <S>                                            <C>                  <C>
    Net operating loss carryforwards               $     1,209,000      $       482,000
    Valuation allowance                                 (1,209,000)            (482,000)
                                                   ---------------      ---------------
             Net deferred tax asset                $             -      $             -
                                                   ===============      ===============

</TABLE>

         The increase in the valuation allowance during fiscal 2000 of
$727,000 is the result of additional losses incurred during the year.

         As of March 31, 2000, Rockport Healthcare Group, Inc. has net
operating loss carryforwards of approximately $3,224,000 which begin to expire
in 2009. Future utilization of the net operating loss carryforwards may be
limited by changes in the ownership of Rockport Healthcare Group, Inc. under
section 382 of the Internal Revenue Code.

         The difference between the actual income benefit of zero for fiscal
years 1999 and 2000 and the expected benefit using the statutory income tax
rate of 34% results from the 100% valuation allowance on Rockport Healthcare
Group Inc.'s net operating loss deferred tax asset at each year end.


12.      SIGNIFICANT CONCENTRATION

         Two customers accounted for approximately 52% and 24% of sales for
the year ended March 31, 2000 and for approximately 37% and 40% of accounts
receivable at March 31, 2000.

                                   F-11