U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB

(Mark One)

 X  Annual  report  under  Section  13 or 15(d) of the  Securities
    Exchange Act of 1934 for the fiscal year ended ------- March 31, 2001

                                       OR

___ Transition report under Section 13 or 15(d) of the Securities Exchange Act
    of 1934 for the transition period from __________ to __________

                         Commission File Number: 0-27627

                             WORLD DIAGNOSTICS INC.
                             ----------------------
                 (Name of Small Business Issuer in Its Charter)

              Delaware                                   65-0742342
           -----------------                             ----------
   (State or Other Jurisdiction of            (IRS Employer Identification No.)
    Incorporation or Organization)

               16250 N.W. 59th Avenue, Miami Lakes, Florida 33014
               ---------------------------------------------------
                    (Address of Principal Executive Offices)

       Registrant's telephone number, including area code: (305) 827-3304

        Securities Registered Pursuant to Section 12(b) of the Act: None

           Securities Registered Pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value

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

     Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is 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. ___

     The issuer's revenues for its most recent fiscal year were $ 2,203,534.

     The aggregate market value of 5,592,530 shares of the Company's common
stock held by non-affiliates was $1,398,133 as of June 30, 2001. The market
value of the shares was calculated based on the closing sales price of a share
of common stock on The OTC Bulletin Board Market on such date.

     As of June 30, 2001, 7,255,120 shares of the registrant's common stock, par
value $.001 per share, were outstanding.

     Check whether the issuer has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes_____ No


     Not Applicable.

     Transitional Small Business Disclosure Format Yes_____  No X

<PAGE>
                             WORLD DIAGNOSTICS INC.
                                     10-KSB
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page No.


<S>                                                                                                             <C>
PART I............................................................................................................4
------
     ITEM 1.      DESCRIPTION OF BUSINESS.........................................................................4
     -------      ------------------------
     ITEM 2.      DESCRIPTION OF PROPERTY........................................................................14
     -------      -----------------------
     ITEM 3.      LEGAL PROCEEDINGS..............................................................................14
     -------      ------------------
     ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................14
     -------      ----------------------------------------------------

PART II..........................................................................................................14
-------
     ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.......................................14
     -------      ---------------------------------------------------------
     ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION......................................19
     -------      ----------------------------------------------------------
     ITEM 7.      FINANCIAL STATEMENTS...........................................................................25
     -------      ---------------------
     ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING FINANCIAL DISCLOSURES..............25
     -------      ----------------------------------------------------------------------------------

PART III.........................................................................................................26
--------
     ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTORS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
                  OF THE EXCHANGE ACT ...........................................................................26
     -------      -------------------
     ITEM 10.     EXECUTIVE COMPENSATION.........................................................................31
     --------     ----------------------
     ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................32
     ---------    --------------------------------------------------------------
     ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................34
     --------     ----------------------------------------------
     ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K...............................................................35
     --------     --------------------------------
     EXHIBIT INDEX ..............................................................................................35
     SIGNATURES  ................................................................................................37
</TABLE>

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         World Diagnostics Inc. (the "Company") (OTCBB: WDGI), based in Miami
Lakes, Florida, is an early stage business that began operations in February
1997 for the purpose of servicing the growing international demand for medical
diagnostic tests and laboratory products.

         The Company is a single source supplier and exporter of approximately
1,000 Company branded medical diagnostic test kits and laboratory products, of
which approximately 110 of these products represent approximately 84% of the
Company's revenues. The products are marketed through the Company's website,
www.GLOBALeMED.com (which is also accessible through its other Internet
addresses: www.labtestkits.com and www.worlddiagnostics.com), and its
distributor network.

         The Company distributes under its own brand name, a range of rapid
immunodiagnostic products for point-of-care testing of certain human medical
conditions and infectious diseases, in addition to other medical diagnostic
tests and laboratory products. The Company's various rapid diagnostic test kits
incorporate proprietary, genetically engineered technology to diagnose
infectious diseases, such as HIV, Cholera, Hepatitis and Tuberculosis, as well
as various sexually transmitted diseases. These products provide accurate and
cost-effective diagnosis of acute and chronic conditions in the areas of
reproductive health, viral and bacterial infectious diseases, gastrointestinal,
hormonal, and autoimmune disorders, cancer and cardiac markers, therapeutic
drugs and drugs of abuse testing. The Company's products are made to its
specifications through a network of suppliers and contract manufacturers, many
of which are interchangeable.

         The Company sells its medical diagnostic test kits and laboratory
products primarily through a network of 88 distributors covering 80 countries,
as well as through its website. The Company's GLOBALeMED business to website
serves as the Company's e-commerce solution for medical professionals to
purchase medical diagnostic products and access critical data and technology
support online. The GLOBALeMED system is a worldwide multilingual,
multi-cultural platform utilized by the Company's distributors to serve
hospitals, clinical laboratories, physician's offices and certain pharmacies
primarily in emerging market nations.

         In March 1998, the Company began to market its products by providing a
limited menu of medical diagnostic tests that it offered for sale through
international distributors. In May 1998 the Company acquired the assets of
Health Tech International, Inc., which consisted primarily of proprietary
distribution agreements and certain technology for rapid diagnostic tests. This
transaction was treated as a combination of companies under common control with
the Company being the surviving company. In July 1998 the Company achieved US
Food and Drug Administration ("FDA") Good Manufacturing Practices ("GMP")
compliance which allows for registration of the Company's products for sale in
various countries.

                                       4

<PAGE>

         In March 1999, the Company posted its initial website
(www.labkits.com), which was used by the Company to recruit new distributors. In
June 1999, the Company added a rudimentary electronic shopping cart to the
website, making it a fully transactional website for purchasing medical
diagnostic test products online.

         In September 1999, the Company began the design of its GLOBALeMED
e-commerce solution system, which became operational in November 1999. Local
sites were launched in Chile and Romania in February 2000, and in South Africa
in March 2000. As of July 2001, the Company has established twenty such
localized websites. In South America, sites have been established for Argentina,
Chile, Uruguay and Venezuela. In Europe, sites have been established for Italy
and Poland. In Eastern Europe, sites have been established for Romania, the
Czech Republic, Austria and Hungary. In the Caribbean, sites have been
established for Jamaica, Trinidad and Tobago, Dominican Republic, Aruba and
Antilles. In Africa and the Middle East, sites have been established for South
Africa, Saudi Arabia and Egypt. In Asia, localized websites are active in
Vietnam and South Korea.

         The GLOBALeMED system is designed to permit participants in each
country to purchase the Company's product offerings online, obtain technical
information, product support and training in multiple languages. These websites
provide for centralized online purchasing and serve as a resource on a local
basis with respect to news and information concerning healthcare matters of
community interests such as content provided by professional societies, event
calendars, bulletin boards, and hyperlinks to other related websites. The
GLOBALeMED system provides access to authoritative medical data through search
engines and alliances with internationally recognized organizations, enabling
professionals and businesses to obtain both local and global healthcare and
medical laboratory information. In addition, a technical staff is available by
telephone, fax, e-mail or online through the Company's website to support
customers. The continuing implementation of the Company's GLOBALeMED system is
dependent upon the Company's ability to continue to raise additional financing.

         The Company's revenues are derived primarily from South America, the
Caribbean and Eastern Europe, with the European Common Market, Asia, the Middle
East and Africa representing the Company's secondary source of revenues. The
Company's largest customer accounted for approximately 12% of the Company's
revenues in the year ended March 31, 2001 and 14% of revenues in the prior
fiscal year. The Company's annual sales grew to $ 2,203,534 in fiscal year 2001,
from approximately $1,463,417 in fiscal year 2000.

         E-Commerce

         The Internet has emerged as the fastest growing communication medium in
history and is dramatically changing how business communicates and shares
information. It has created new opportunities for conducting commerce,
streamlining complex processes, lowering costs and improving productivity.
Through the Internet, the Company is able to communicate with a large number of
buyers throughout a highly fragmented market who have significant dependence on
product range, technical information and support. The Company enables
distributors and end users of medical diagnostic tests and laboratory products
to efficiently identify, evaluate and buy over 1,000 of the Company's products
through the Company's website via a secure Internet based purchasing solution.

                                      5

<PAGE>

         The Company's GLOBALeMED system is comprised principally of the
following elements:

         o     Industry Focused Transactional Website

         o     Online Technical Support and Training Aids

         o     Multi-lingual/Multi-cultural Navigation

         o     Medical News and Information throughout the World

         o     Community of Professional Interests

         o     Global and Localized Website Orientation

         o     Links to Other Websites for Authoritative Data

         The Company's transactional website is secure, easy to use and highly
functional for ordering product. The Company's GLOBALeMED solution connects
users with global health organizations providing authoritative information from
an international database concerning clinical studies and patient results,
disease states and healthcare conditions. In addition, it has a resource program
for frequently asked questions. The Company's website is user-friendly, with a
qualifying questionnaire that captures valuable information about customer
purchasing patterns, preferences and interests. This data is automatically added
to the Company's database to improve customer service and future data mining.

         The Company's GLOBALeMED e-commerce solution seamlessly links
purchasers of medical diagnostic tests and laboratory products with its
ability to efficiently deliver a wide range of products and services unavailable
from any other single source. The Company's supply chain integrates a
manufacturing base of numerous producers that provide timely delivery of
intermediate and finished goods to the Company, which conducts final inspection
and packaging before shipping directly to its customers. The Company's
GLOBALeMED solution offers a simplified electronic catalog to access technical
and product information, product selection, pricing, and an efficient order and
order-tracking mechanism.

         The Company is continuing to establish its GLOBALeMED system in certain
target countries where management believes that its products will be in high
demand. The GLOBALeMED system is creating a growing customer base by providing
efficient online purchasing options, technical support, valuable information and
industry news, and a community of interests where professionals can access data,
obtain educational material and derive other benefits. Customers are able to
access the Company's global home page or a local website that is adapted to
local culture, languages and practices. The shopping cart option functions on a
transparent basis to facilitate centralized purchasing. The shopping cart
appears to the customer to be localized, while at the same time offering the
option to visit the Company's global website and home page, or access the
Company's GLOBALeMED websites in various other countries.

                                       6

<PAGE>

         The Company's centralized purchasing from its suppliers is based upon
orders projected and received. Buying patterns differ around the world due to
different disease states, environmental and cultural biases. Accordingly,
forecasting levels of production from the Company's manufacturing network to
meet sales expectations are closely monitored in terms of amounts, types of
products, inventory requirements and timing of delivery. The Company recently
installed a new accounting system and plans to integrate information from its
manufacturers and suppliers with its sales forecasts and inventory levels, so as
to provide prompt delivery to enhance the Company's competitive position.

         Brand Equity

         The Company is concentrating on building brand equity through its
distributor network, branded product sales, and through the GLOBALeMED system.
Management considers brand equity to be important to grow recurring revenues.

         The Company's brand equity consists of the following components:

              World Diagnostics, WDI and GLOBALeMED

              "Smart Check","Smart Strip", "Avantage", "Smartlyte" and
              "Smartwell" products are marketed under the WDI label

         The Company plans to continue building brand equity through
advertising, marketing seminars and alliances that serve to increase sales and
drive customers to its GLOBALeMED system. These include:

              Local and Global Advertising in Trade Publications, Newsletters,
              Medical Journals and Healthcare Publications

              Educational Seminars for Professional Societies on a
              Country-by-Country Basis

              Trade Shows and Special Events for Medical Professionals

              Direct Marketing Initiatives and Special Promotions for Local
              Groups

              Public Awareness Campaigns with Government and Non-Government
              Organizations

              Partnering with Local ISPs and Portals on a Global and by
              Country Basis

              Establishing Marketing Alliances with Medical Websites and
              Businesses

                                       7
<PAGE>

         Market Overview

         The 1999 worldwide market for In Vitro Diagnostic ("IVD") test products
such as urine, blood and saliva is estimated to be in excess of $20 billion
annually, of which approximately 40% is in the US, 26% is in Europe, 12% is in
Japan and 22% is in recently developed economies and emerging market countries.
(Source: Diagnostic Consulting Group, from a report commissioned by us). The
moderately developed and emerging markets, whose aggregate market size is
approximately $4.2 billion, has two components: public and private sectors It is
estimated that nearly 95% of this market is derived from imports (Source: U.S.
Department of State 1999). Tests for infectious diseases performed in emerging
markets are about 70% of the total market, with growth in infectious disease
tests exceeding 18% per annum. Of people worldwide who are HIV positive, 95% are
in emerging markets or developing countries.

         Diagnostic product sales are driven by several factors, including:

         o    The need for easier methods to diagnose disease states or medical
              disorders so as to enable effective physician response to the
              patient.

         o    Recognition that diagnostic products afford early detection of
              diseases or medical disorders.

         o    Prompt response to increases in infectious disease disorders
              through rapid diagnosis and isolation of infectious individuals.

         o    Government policies to contain (decrease) costs to the medical and
              social system and to contain epidemic situations.

         The vast majority of international end users typically buy from
numerous relatively small local distributors that often stock a limited range of
test kits and lack the expertise to provide timely delivery and technical
support. In emerging markets or moderately developed economies, the substantial
majority of medical laboratories are small in size and account for the majority
of diagnostic product sales. By contrast, diagnostic product sales in the US
are predominately to large labs. Smaller international accounts in highly
fragmented markets have been less desirable by large corporations as they are
too expensive to be managed or directly sold to by large corporations whose
equipment and diagnostic products are capital intensive and geared to larger
scale usage.

         In moderately developed economies and emerging markets, price,
availability of products, ease of use and technical support are of major
importance. The highest diagnostic priority in moderately developed economies is
improvement in the efficiency and quality of physician care. In the emerging
markets it is to identify and contain infectious disease disorders. In both
markets, price delivery time, technical support and prompt response to inquiries
are important. In these emerging markets an increasing amount of funds are being
provided by governments and development organizations, such as UNICEF, USAID,
the World Bank and the IMF, for the use of rapid diagnostic testing, often at
point of care or on-site, to identify and isolate infectious individuals. This
policy is driven by the need to minimize costs to the medical and social system
for the general health and welfare improvement of populations as well as
containing epidemic situations. Moreover, population control is the second
largest growth area in diagnostic product sales behind infectious diseases for
the emerging markets countries. International funding of rapid diagnostic
products for pregnancy and ovulation detection is also supported by UNICEF,
USAID, the World Bank and the IMF.

                                       8

<PAGE>

         Products

         The Company's current catalog of approximately 1,000 products offers a
comprehensive commonly used range of medical diagnostic test kits and laboratory
products. The kits are made in generic form and packaged under the Company's
label. The Company's emphasis on rapid tests include cardiac markers such as
Troponin I for instant point of care ("POC") myocardial infarction, cancer
markers such as Prostate Specific Antigen tests to screen for prostate cancer,
sexually transmitted disease tests for HIV, Gonorrhea, Chlamydia, Syphilis and
infectious disease tests for Cholera, Tuberculosis, Dengue Fever, Malaria,
Rotovirus, Rubella and HCV.

         The Company's diagnostic product line consists of four main groups and
are marketed under the World Diagnostics Inc. or the WDI label.

         o    Qualitative Rapid POC Diagnostic Tests

              Product brand names "Smart Check" and "Smart Strip" for HIV,
              Syphilis, Ovulation, Pregnancy, Drugs of Abuse, and others tests
              used for infectious and immune complexes.

         o    Quantitative Laboratory Tests

              Product brand name "Avantage" ELISA kits for blood banking,
              hormones, cancer markers, infectious diseases, allergy, fertility,
              gastrointestinal, immune and other disorders.

         o    Routine Urine and Latex Agglutination Tests

              These products are demanded in emerging markets, offer lower
              sensitivity; but are preferred by some governments because they
              are inexpensive.

         o    Clinical Chemistry Reagents

              This product group is fundamental to all laboratory operations.
              While it is mature, it continues to be a widespread mode of
              clinical testing.

         Technology

         The Company's products incorporate technologies utilizing some of the
most modern "formats" available in the medical laboratory diagnostics industry.
Format refers to the platform under which animal and human proteins are utilized
to determine quantitative or qualitative test results. The Company markets
diagnostic quantitative and qualitative test kits covering clinical chemistry,
amino acids and rapid diagnostic POC tests. The technology format primarily
utilized by the Company's products embodies color development for a
determination of results because most laboratories have instrumentation that can
obtain results through optical density readings.

                                       9

<PAGE>

         Protein molecules called antibodies react with, or bind to, specific
antigens, such as other antibodies, viruses, bacteria, hormones and drugs. The
antibodies produced in response to a particular antigen bind specifically to
that antigen. This characteristic allows for a wide range of diagnostic
applications. The ability to detect the binding of antibodies to target antigens
forms the basis for immunodiagnostic testing. Antibodies are typically deposited
onto a solid substrate. A chemical label is then either incorporated onto the
solid substrate or added separately once the solid substrate has been exposed to
the test sample. If the target antigen is present in the test sample, the
chemical label produces a visually identifiable color change in response to the
resulting antibody reaction with the antigen. This provides a clear color
endpoint for easy visual verification of the test results. Using this platform,
whether as a qualitative or quantitative test, allows measurement of disorders
covering product areas such as infectious diseases, cancer markers, hormones,
immune disorders, fertility, therapeutic and drugs of abuse, serology, virology
and microbiology.

         The Company's antibody and antigen tests are designed and engineered to
use sophisticated molecular biology and DNA based genetic engineering techniques
to produce proprietary and specific antigens to manufacture sensitive and
specific kits for diagnosis. Natural immune systems of the human body produce
antibodies to defend against abnormalities such as bacteria, viruses and cancer.
Antibodies are produced in specific shapes and composition to attack and
immobilize these abnormalities. Genetically engineered antibodies or antigens
are more highly specific to increase detection of such abnormalities earlier
than naturally formed antibodies. The Company offers four primary delivery
system formats using the genetically engineered antigens: (1) Dipsticks, (2)
Flow-through cassettes, (3) Microwell tests, and (4) A one-step lateral flow
delivery system. While most diagnostic test formats utilize a basic antibody
antigen concept, the four formats offered by the Company provide advanced
proprietary technology and differ in terms of speed, ease of use, sensitivity,
and specificity to address the particular needs of different tests.

         In 1998, the Company also funded the development of a one-step rapid
urine HIV 1 & 2 diagnostic test in collaboration with an outside research party.
The company paid for such research collaboration through a licensing
arrangement, whereby the research suppliers may participate in future income
streams through royalties. This agreement was terminated in September 1999 due
to non-fulfillment by the research party. The Company believes the technical
know-how it possesses is proprietary and would consider entering into other
agreements with research and development firms to continue further development
of the rapid urine HIV test should circumstances be warranted.

         Manufacturing

         The Company obtains IVD products through various contract arrangements
with approximately 36 primary manufacturers and suppliers. The Company inspects
and tests for quality control upon receipt of these products and periodically
conducts field audits of its suppliers to insure conformity to specifications
and delivery schedules. These products come in many forms, such as enzymatic
clinical chemistry products, quantitative immunodiagnostic assays and rapid
immunodiagnostic products for POC and detection of human medical conditions and
illnesses.

                                       10

<PAGE>

         It is the Company's responsibility to verify that each product
purchased from various suppliers is in conformity with FDA requirements. Dr
Martin Muy, a genetic immunologist and Vice President-Technical Affairs,
oversees the Company's quality control lab and conducts audits of the Company's
suppliers and contract manufacturers to verify that Company specifications are
met.

         Marketing and Distribution

         The Company intends to utilize its product positioning and GLOBALeMED
interactive shopping and informational website to meet the needs of its
distributors and end-user customers. The Company's strategy is to make its
distributor base into an effective network of localized representatives that
expand sales through conventional distribution methods and, at the same time,
promote and market the Company's GLOBALeMED system. Distributors typically
fulfill this function by first providing basic distribution of products within a
country and then initiating efforts to have their existing customer base
purchase products directly from the Company's website. Current sales to
distributors are direct, and, although distributors receive a discount starting
at 20% of list price if they purchase a large volume of our products, there are
no commissions. The distributors mark up the product price as they choose in
each country as long as the price does not exceed the Company's published
catalog prices. They then receive the difference in price between the Company's
cost to them and their cost to the public. There are significant benefits to
distributors when the Company's customers purchase directly from the Internet.
Not only does each distributor receive a 10% commission for each Internet sale
in such distributor's territory, regardless of the size of the sale, but because
the customer pays for the products by credit card through the website, the
distributor is no longer required to:
         pay duty, freight or VAT on the products;
         physically go to its country's customs location to have the products
         cleared through customs; deliver the products to the customer; or
         collect its receivables from the customer.

         As of June 30, 2001, the number of distributors has increased to 88
including the 20 GLOBALeMED representatives, from a total of 75 distributors in
the prior year. The Company continues to drive its traditional distribution
model until such time as worldwide acceptance emerges for online commerce which
will allow for the expansion of the interactive shopping and informational
website. Our non-distributor direct end-user customer base grew to 55 from 44 in
the prior year. Since the establishment of the Company's website, the Company
has generated a substantial database of new customer leads, of which the
majority are distributor prospects that are screened and cultivated through
e-mail and fax.

         Through its website, the Company attracts new distributors who offer
the capability for the Company to distribute increasing volumes of its products,
promote the Companys brand name in the distributors' respective countries and
service end-user customers. At present, a substantial portion of the Company's
sales are derived from the Company's distributor base, many of which use the
Company's website to place orders or to promote the Company's product line. The
Company has its highest concentration of revenues from distributors in South
America, the Caribbean, and Eastern Europe. These regions accounted for
approximately 73% of the Company's current year revenues and 75% of revenues for
the year ended March 31, 2000.

                                       11

<PAGE>

         The Company plans to continue to recruit distributors in order to
increase sales and market penetration and use its distributor network as a means
to expand its GLOBALeMED system on a country-by-country basis. The Company is
concentrating on those countries and geographic regions where it believes that
it will have the greatest opportunity to establish growing market share and
critical mass for its GLOBALeMED system. To date, the Company has established
twenty such websites. Local websites created for the Company's distributors will
be maintained by the Company. In addition to providing localized services and
information, the Company will serve as a portal to other websites aligned with
the Company's GLOBALeMED system. These distributors are becoming logistical
support centers and serve as selling organizations to promote end users to
utilize the Company's e-commerce solution. The distributor network facilitates
and drives transactions through the local website to the Company's global
website, where orders are centrally processed. Distributors are able to keep
track of order status and fulfillment on a localized basis.

         The Company concentrates on selling medical diagnostic test kits that
have significant repeat business. Once a customer's laboratory has standardized
its test menu and reference ranges for the Company's products, the Company
generally continues to be the provider of choice because of the need to maintain
consistent accurate test results.

         Customers

         The Company has recently begun efforts to convert many of its accounts
to online purchases through its GLOBALeMED e-commerce solution. Management
expects this process to grow at different rates, depending upon various factors
within each country. Approximately 74% of sales are to distributors and 26% of
sales are direct to end-users (i.e., clinics, laboratories, hospitals,
physicians' offices). The Company is actively marketing direct end users of its
products and makes presentations at medical conferences and trade shows
worldwide.

         The Company has established numerous incentives for distributors based
upon their status that include: (i) discounts for pre-payment and prompt payment
after delivery of goods; (ii) incentive coupons and cumulative value promotions
for preferred customers who have good payment records; and (ii) other discounts
relating to online and special promotional offerings. The Company plans to
commence advertising and promotional campaigns aimed at end-user customers on a
country by country base to accelerate the transition of its customer base from
distributor to end-user customer denominated.

         Competitive Conditions

         The competitive landscape for e-commerce solutions in medical
diagnostic tests and laboratory products is extremely fragmented and limited in
scope, especially in the international market. Most competitors are sellers of
equipment or medical supplies. Some sell a limited range of diagnostic test
products. Websites include a few buying groups, trade associations, some small
niche distributors or manufacturers, a few large manufacturers, some publishers,
and a handful of virtual malls. About 75% of the websites researched by the
Company were US based. None were comparable to GLOBALeMED. Major medical
diagnostic companies (typically European or US) traditionally rely upon a master

                                       12

<PAGE>

distributor to manage an umbrella distribution network for both public and
private sector sales, which does not compete with the Company's strategy. The
Company has generally found that: (i) the market is highly fragmented throughout
the distributor and end-user landscape; (ii) website links are in an early stage
of development; (iii) no company has yet to establish a critical mass or
dominant market share in any particular area concerning the markets served by
the Company; and (iv) the majority of the Company's competitors are small
medical supply companies, buying groups, virtual malls and a few manufacturers.

         Patents, Trademarks & Licenses

         The Company has not applied for patent protection with respect to any
of its products. The Company protects its trade secrets through confidentiality
and non-competition agreements executed by its employees and suppliers.

         Government Regulation

         The Company currently maintains an FDA certified Good Manufacturing
Practices facility and has FDA approval for 192 of the approximately 1000
products it offers for sale. The Company has an FDA Registration Certificate of
Foreign Commerce for its FDA approved products. The Company also has
Certificates of Exportability 801(e) for all non-FDA approved products which are
provided by the Company to distributors who have represented to the Company that
such Certificates of Exportability permit the sale of the Company's products in
the respective countries. The Company believes that the export of these products
is in compliance with applicable foreign law. An insignificant amount of the
Company's products are sold within the US which are subject to the 1976 Medical
Device Amendments to the Federal Food, Drug and Cosmetic Act, as amended and/or
provisions under the Safe Medical Act of 1990, which governs the manufacture and
marketing of medical devices, including in vitro diagnostic test kits. In
addition to the foregoing, the Company's present and future operations or
products may be subject to regulation under the Occupational Safety and Health
Act, Environmental Protection Act, Resource Conversion and Recovery Act, Toxic
Substances Control Act, Clinical Laboratory Improvement Act and other present or
possible future legislation and regulations, as well as by governmental agencies
with regulatory authority relating to the Company's business.

         Employees

         As of June 30, 2001 the Company had a total of 21 employees, 15 of
which were full-time employees and 6 of which were part-time employees.

                                       13

<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY.

         The Company's executive, administrative, technical affairs and
warehouse facilities are located in Miami Lakes, Florida, in approximately
10,000 square feet of general use space. The lease commenced March 1, 2001 and
provides for a 10-year term at $9,100 per month base rent, subject to annual
cost of living adjustments. The Company has the right to terminate the lease at
the end of years three and five upon prior notice and payment to the landlord of
approximately $170,000 and $100,000, respectively.

ITEM 3.  LEGAL PROCEEDINGS.

         From time to time, the Company may be a party to certain claims, suits
and complaints which arise in the ordinary course of business. Currently, there
are no such claims, suits or proceedings, which, in the opinion of management,
if decided against the Company would have a material adverse effect on the
Company's financial position.

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


         The majority of the stockholders took action by written consent in the
last quarter of fiscal year ended March 31, 2001 to increase the authorized
share capital of the Company. An information statement containing such action
was filed with the Securities and Exchange Commission on April 4, 2001.

                                     PART II

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

         Commencing third quarter 1998, the Company's common stock began trading
on the Over The Counter Bulletin Board under the trading symbol "WDGI." The
price set forth below reflect inter-dealer quotations, without retail markups,
markdowns or commissions, and do not necessarily represent actual transactions.
The prices in the table below represent the high and low sales price for the
common stock as reported on the OTC Bulletin Board Market for the periods
presented.

                                       14

<PAGE>
<TABLE>
<CAPTION>
         1999                                                                       HIGH              LOW
---------------------------------------------------------------------- ----------------- ----------------
<S>                                                                              <C>              <C>
         Quarter Ending March 31                                                 $ 6.75           $ 4.75
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending June 30                                                       8             6.37
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending September 30                                                9.5                8
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending December 31                                                  10                9
---------------------------------------------------------------------- ----------------- ----------------
         2000
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending March 31                                                  11.25             9.13
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending June 30                                                   11.50             1.75
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending September 30                                               4.88             2.00
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending December 31                                                2.19             0.75
---------------------------------------------------------------------- ----------------- -----------------
         2001
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending March 31                                                   1.19             0.50
---------------------------------------------------------------------- ----------------- ----------------
         Quarter Ending June 30                                                    0.75             0.19
---------------------------------------------------------------------- ----------------- ----------------
</TABLE>

         The last reported sales price of the common stock on June 30, 2001 was
$0.25 per share. The number of disclosed record holders of the Company's common
stock was 582 on June 30, 2001.

         As of June 30, 2001, the Company is authorized to issue up to
25,000,000 shares of common stock, par value $.001 per share, of which 7,255,120
shares are issued and outstanding, and 5,000,000 shares of preferred stock, par
value $.001 per share, none of which are issued. Of the outstanding shares,
2,144,000 are restricted securities within the meaning of Rule 144 of the
Securities Act of 1933, as amended (the "Securities Act").

         Dividends

         The Company has never declared or paid any cash dividends on its common
stock nor does the Company anticipate paying any in the near future.
Furthermore, the Company expects to retain any future earnings to finance the
operations and expansion of the Company. As of June 30, 2001, there are no
restrictions on the common stock that limit the ability of the Company to pay
dividends if declared by the Board of Directors. The holders of common stock are
entitled to receive dividends when and if declared by the Board of Directors,
out of funds legally available and to share pro rata in any distribution to the
stockholders. Upon liquidation, dissolution, or winding up of the Company, the
holders of common stock are entitled to receive the net assets of the Company in
proportion to the respective number of shares held by them after payment of
liabilities which may be outstanding. The holders of common stock do not have
any preemptive rights to subscribe for or purchase any shares of any class of
stock. The outstanding shares of common stock of the Company are not subject to
further call or redemption and are fully paid and non-assessable.

         Recent Sales of Unregistered Securities

         During the past three years, the Company sold the following securities
that were not registered under the Securities Act:

         In June 1998, the Company completed a private placement in which the
Company issued 400,000 shares of common stock at $0.125 per share. The issuance
was made pursuant to an exemption under Rule 504 of Regulation D of the
Securities Act.

                                       15

<PAGE>

         On August 24, 1998, we issued 200,000 shares of common stock to
MediaVest, Inc., a Delaware corporation, which is owned by Barry Peters, the
Chairman of the Board of the Company, in consideration for an extension of and
the forebearance of interest on a promissory note. The issuance was made
pursuant to an exemption under Section 4(2) of the Securities Act.

         In November 1998, the Company granted options to purchase 12,000 shares
of common stock, at an exercise price of $1.50 per share, to a consultant in
consideration for financial service rendered to the Company. The grant was made
pursuant to Rule 701 promulgated under the Securities Act.

         On December 22, 1998, the Company issued 29,237 shares of common stock
to an investor in consideration for the extinguishment of a note payable in the
amount of $17,500. The issuance was made pursuant to an exemption under Section
4(2) of the Securities Act.

         During the year ended March 31,1999, the Company issued 201,500 shares
of common stock in connection with the exercise of warrants at the price of
$1.00 per share. The issuance was made pursuant to an exemption under Rule 701
promulgated under the Securities Act.

         In April 1999, the Company issued 748,500 shares of common stock for
$.50 per share in connection with the exercise of warrants issued to certain of
the founders of the Company. The issuance was made pursuant to an exemption
under Section 4(2) of the Securities Act.

         In April 1999, the Company issued 101,090 shares of common stock in
consideration for the extinguishment of notes payable in the amount of $62,400.
The issuance was made pursuant to an exemption under Section 4(2) of the
Securities Act.

         In May 1999, the Company issued 6,000 shares of common stock to two
individuals in consideration for information technology services rendered to the
Company. The issuance was made pursuant to an exemption under Section 4(2) of
the Securities Act.

         In November 1999, the Company issued warrants to purchase 205,000
shares of common stock, at an exercise price of $2.50 per share, to fifteen
individuals in connection with the issuance of promissory notes to such
individuals in the amount of $410,000. The issuance was made pursuant to an
exemption under Section 4(2) of the Securities Act.

         During the year ended March 31, 2000, the Company issued 15,500 shares
of common stock to various consultants in consideration for website development
services rendered to the Company. The issuance was made pursuant to an exemption
under Section 4(2) of the Securities Act.

         In April 2000, the Company issued 10,000 shares of common stock to an
employee in consideration for information technology services rendered to the
Company. The issuance was made pursuant to an exemption under Section 4(2) of
the Securities Act.

                                       16

<PAGE>

         On June 1, 2000, the Company issued 8,199 shares of common stock to the
fifteen individuals in consideration for an extension of and the forebearance of
interest on promissory notes in the amount of $410,000. The issuance was made
pursuant to an exemption under Section 4(2) of the Securities Act.

         On June 1, 2000, the Company issued 182,799 shares of common stock to
fifteen individuals upon the conversion into common stock of an aggregate of
$285,000 of the principal of the $410,000 promissory notes. The common stock was
issued pursuant to an exemption under Section 3(a)(9) of the Securities Act.

         On June 19, 2000, the Company issued 71,440 shares of common stock at
$7.00 per share, and 71,440 warrants exercisable at $7.00 per share to purchase
71,440 shares of common stock. In July 2000, the Company issued 100,000 shares
of common stock at $1.00 per share as an inducement for the above warrant
holders to exercise an early exchange of their warrants for common stock. In
connection with such exchange, the Company issued an additional 71,440 shares of
common stock. The issuance was made pursuant to an exemption under Rule 506 of
Regulation D of the Securities Act.

         On June 21, 2000, the Company issued an aggregate of 16,000 shares of
common stock to two individual consultants in consideration for financial
services rendered to the Company. The common stock was issued pursuant to an
exemption under Section 4(2) of the Securities Act.

         On June 21, 2000, the Company completed a private placement of $500,000
in equity financing consisting of units for 71,440 restricted shares of common
stock at a $7.00 per share price, together with warrants exercisable for an
additional 71,440 restricted shares of common stock at an exercise price of
$7.00 per share, or exchangeable without additional cash consideration, but
subject to certain restrictions and lock-up provisions, for 71,440 restricted
shares of the Company's common stock. The private placement was made to
"accredited investors" and was exempt from registration pursuant to Section 4(2)
of the Securities Act.

         In October 2000, the Company granted options to purchase 296,000 shares
of common stock, at an exercise price of $1.22 per share, to several of the
employees of the Company in consideration for services rendered and to be
rendered in their various job capacities. The issuance was made pursuant to an
exemption under Section 4(2) of the Securities Act.

         In October 2000, the Company granted options to purchase 22,500 shares
of common stock, at an exercise price of $1.00 per share, in consideration for
financial services rendered to the Company in connection with a private
placement. The grant was made pursuant to an exemption under Section 4(2) of the
Securities Act.

         In November 2000, the Company issued warrants to purchase 4,000 shares
of common stock, at an exercise price of $3.50 per share, to a consultant in
consideration for public relations services rendered to the Company. The
issuance was made pursuant to an exemption under Section 4(2) of the Securities
Act.

                                       17

<PAGE>

         In December 2000, the Company issued 55,000 shares of common stock in
consideration for financial services rendered to the Company in connection with
a private placement. The issuance was made pursuant to an exemption under
Section 4(2) of the Securities Act.

         In December 2000, as an inducement to join the Board of Directors of
the Company, the Company granted a director, at a cost of $500, the right to
purchase warrants to purchase 10,000 shares of common stock at an exercise price
of $1.00 per share. The issuance was made pursuant to an exemption under Section
4(2) of the Securities Act.

         In December 2000, the Company issued 2,500 shares of common stock and
options to purchase 15,000 shares of common stock at an exercise price of $1.00
per share to one of the directors of the Company. The issuance was made pursuant
to an exemption under Section 4(2) of the Securities Act.

         In December 2000, the Company issued warrants to purchase 10,784 shares
of common stock at an exercise price of $1.00 per share, to consultants in
consideration for financial consulting services rendered in connection with
certain of the Company's private placements. The issuance was made pursuant to
an exemption under Section 4(2) of the Securities Act.

         In December 2000, the Company issued warrants to purchase an aggregate
of 16,000 shares of common stock at an exercise price $3.50 per share, to two
consultants in consideration for public relations services to the Company. The
issuance was made pursuant to an exemption under Section 4(2) of the Securities
Act.

         In December 2000, the Company issued warrants to purchase 1,000 shares
of common stock at an exercise price of $2.00 per share, to a consultant in
consideration for financial consulting services rendered to the Company. The
issuance was made pursuant to an exemption under Section 4(2) of the Securities
Act.

         In December 2000, the Company granted options to purchase an aggregate
of 15,000 shares of common stock, at an exercise price of $1.00 per share, to
two individuals in consideration for their services rendered as finders in
connection with one of the Company's private placements. The issuance was made
in pursuant to an exemption under Section 4(2) of the Securities Act.

         In December 2000, the Company issued 205,915 shares of common stock and
granted options to purchase 21,000 shares of common stock, at an exercise price
of $1.00 per share, to three individuals in exchange for the conversion of
$190,000 of 10% promissory notes payable and all accrued interest on the notes.
The issuance was made pursuant to an exemption under Section 3(a)(9) of the
Securities Act.

         On December 31, 2000, the Company completed a private placement of
$2,250,000 in equity financing consisting of 45 units sold at $50,000 per unit,
each unit consisting of (i) 50,000 shares of common stock, (ii) 50,000 A
warrants to purchase common stock at $1.375 per share and (iii) 50,000 B
warrants to purchase common stock at $1.625 per share. The A and B warrants are
generally exercisable for 5 years, but the A warrants are redeemable by the

                                       18

<PAGE>

Company at $0.10 per warrant under certain circumstances. The private placement
was made to "accredited investors" and was exempt from registration pursuant to
Section 4(2) of the Securities Act.

         On January 15, 2001, the Company issued warrants to purchase 4,000
shares of common stock, at an exercise price of $3.50 per share, to a consultant
in consideration for public relations services to the Company. The issuance was
made pursuant to an exemption under Section 4(2) of the Securities Act.

         Transfer Agent

         The Transfer Agent for the Company's common stock is Manhattan Transfer
Registrar Company, 58 Dorchester Rd., Lake Ronkonkoma, New York 11779, telephone
(631) 585-7341, facsimile (631) 585-7569.

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

                           Forward-Looking Statements

The statements contained in this Annual Report on Form 10-KSB that are not
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company intends that all forward-looking
statements be subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include statements in
which words such as "expect", "anticipate", "intend", "plan", "believe",
"estimate", "consider" or similar expressions are used. These forward-looking
statements reflect the Company's views as of the date they are made with respect
to future events and financial performance. Forward-looking statements are not
guarantees of future performance. They involve many risks, uncertainties and
assumptions which could cause the actual results of the Company to differ
materially from any future results expressed or implied by such forward-looking
statements. Examples of such risks and uncertainties include, but are not
limited to: obtaining sufficient financing to maintain the Company's planned
operation, the Company's ability to sustain and increase revenue, the continued
acceptance and growth of the internet, the changing of market conditions and the
other risks detailed in "Management's Discussion and Analysis or Plan of
Operation" in this Annual Report on Form 10-KSB and elsewhere herein. Because
the risks factors referred to above could cause actual results or outcome to
differ materially from those expressed in any forward-looking statements made by
the Company, you should not place undue reliance on any such forward-looking
statements. Other factors may be described from time to time in the Company's
other filings with the Securities and Exchange Commission, news releases and
other communications. Further, any

                                       19

<PAGE>

forward-looking statement speaks only as of the date on which it is made and the
Company undertakes no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time, and it is not possible for the Company to
predict which will arise. In addition, the Company cannot assess the impact of
each factor on the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

Subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements set forth above and contained elsewhere in
this Annual Report on Form 10-KSB.

          Overview

         For the year ended March 31, 2001, the Company continued implementation
of its GLOBALeMED system on a country-by-county basis. While the growth and
further development of the GLOBALeMED system continues to be an important focus,
the sales and marketing effort has been concentrated on and is still dependent
upon traditional distributors. During the year, further enhancements were made
to the GLOBALeMED system, to improve functionality, navigability and ease of
use. Although currently less than 1% of the Company's sales are derived from
direct purchases over the Internet, the GLOBALeMED system serves as a
significant lead generator for new business, recruitment of new distributors and
existing distributor sales. It is particularly important in providing online
technical support and as a marketing tool to facilitate efficiency in product
selection, product evaluation and pricing. The Company also began shipping
product under government contracts for the first time this year, which has added
a new source of revenue. In connection with our continued expansion, the Company
moved operations to a 10,000 square foot facility in Miami Lakes, Florida in
March 2001.

         Subsequent to the year-end, the Company also embarked on various
aggressive marketing promotions to move certain categories of inventory,
re-classified by management as non-core inventory. While these inventory items
will continued to be offered to customers, management has taken the position
that these will be special order items and will not be held in inventory. This
had an adverse effect on gross margins for the period. The lower gross margins
are expected to continue through the second quarter of fiscal 2002 as we
continue to move non-core inventory.

         Results of Operations

         Revenues

         Company revenues for the year ended March 31, 2001 increased by 51% to
$2,203,534, from $1,463,417 for the year ended March 31, 2000. The increase in
revenues was attributable to (i) product sales to government contracts (ii) an
increase in equipment sales and (iii) a higher level of sales to existing
customers.

                                       20

<PAGE>

         The following table details revenue breakdown by geographic region (in
000's) for the year ended March 31, 2001 and 2000:

                                                    for the year ended
                                  March 31, 2001               March 31, 2000
                                ----------------------------------------------
    South America               $             841           $             526

    Caribbean                                 517                         433

    Middle East and Africa                    321                          43

    Eastern Europe                            247                         135

    Domestic                                   92                         114

    Pacific Rim                                87                          92

    Western Europe                             52                          79

    Central America                            47                          41
                                ----------------------------------------------
           Total Revenue        $           2,204            $          1,463
                                ==============================================

         South America, the Caribbean and Eastern Europe are the strongest
established distributor markets and in combination accounted for 73% of total
revenue for the year ended March 31, 2001 compared to 75% of total revenue for
the year ended March 31, 2000. The lower percentage contribution to total
revenues for these markets points to the strong growth in both the number of
distributors and volume of sales in other markets that the Company sells to and
these regions should continue to account for an increasing percentage of total
revenue going forward. The South African government authorized the purchase by
its government hospitals and clinics of HIV diagnostic test kits from select
approved vendors. South Africa recently granted the Company approved vendor
status, which authorizes the government hospitals and clinics to purchase these
kits. This is not a contract for the sale of a specified number of test kits.
Sales to the South African government and a sale to the government of the United
Arab Emirates, accounted for the increase in sales in the Middle East and Africa
geographic region.

         The following table details revenue breakdown by product group (in
000's) for the year ended March 31, 2001 and 2000:

                                                    for the year ended
                                                         March 31,
                                                   2001           2000
                                            ---------------------------------
      Qualitative Rapid Point
      of care Diagnostic Tests                $   779         $   439

      Clinical Chemistry Reagents                 363             274

      Quantitative Laboratory Tests               332             287

      Urine & Latex Agglutination Tests           308             185

      Laboratory Equipment                        289             169

      Miscellaneous Laboratory Supplies           133             109
                                            ---------------------------------
                    Total Revenue             $ 2,204         $ 1,463
                                            =================================

                                       21

<PAGE>

         Sales of qualitative rapid point of care diagnostic tests continued to
show strong growth as a product category, increasing to 35% of revenues, for the
year ended March 31, 2001, compared to 30% of revenues, for the year ended March
31,2000. Laboratory equipment product revenues grew to 13% of revenues, compared
to 12% of revenues for the year ended March 31, 2001 and 2000 respectively.
Laboratory equipment also accounted for the largest increase in revenue in
absolute dollar terms for any product category outside of the qualitative rapid
point of care product group. These two product categories are expected to
continue as the primary drivers of overall revenue growth both in dollar terms
and as a percentage of overall revenue. In the future, revenues of the clinical
chemistry reagent category are expected to grow at the same rate as laboratory
equipment product revenues because of the use of these products when running
laboratory equipment. Revenues from the other product categories will show
growth in dollar terms but at lower growth rates, resulting in these product
categories comprising lower percentages of total revenue.

         Fluctuations in the absolute dollar amount of revenue for each of the
six main product groups during the fiscal year ended March 31, 2001 compared to
the fiscal year ended March 31, 2000 were caused by:

o        the varying need for particular product groups in different countries;

o        the addition of new distributors who chose to focus their efforts in
         certain product groups;

o        the number of distributors in a given country during such years; and

o        the Company's marketing strategy.

     The Company's marketing strategy is also the primary reason for the growth
in the qualitative rapid point of care diagnostic test product group, both in
absolute terms and as a percentage of total revenue. The marketing strategy has
affected the growth of other product groups to varying degrees.

         Sales returns have historically, and continue to be insignificant.
Because of extensive product quality control and review, which is conducted
prior to product shipment, the return rate as a percentage of sales is
anticipated to remain at a low percentage.

         The Company's gross profit on product sales increased to $450,899 in
2001 from $384,556 in 2000. This increase in gross profits was attributable to
an increase in sales. Gross profit as a percentage of sales decreased to 20.5%
during the current year, from 26.3% in the prior year. The lower gross profit
margin was the result of a change in sales mix and inventory write-downs to
adjust for inventory subject to dating as well as reserving more conservatively
for future potential dated inventory going forward. Furthermore, macro-economic
events in international markets, for example the strengthening of the United
States dollar against foreign currencies, as well as localized financial
conditions in certain South American countries have put pricing pressure on the
Company's dollar denominated product sales.

                                       22

<PAGE>

         Selling, general and administrative expense increased to $2,323,360 for
the year ended March 31, 2001 from $1,280,598 for the year ended March 31, 2000.
The increase in these expenditures is due primarily to the overall growth
experienced by the Company. The Company incurred additional expenditures of
$223,827 in employee benefits and related expenditures as a result of new hires
and improved benefits. Extensive travel and marketing expenses were incurred
relating to sales and marketing to develop new markets resulting in additional
expenditures of $194,802. Enforcement of new credit policies and close
management review of all accounts receivable resulted in an additional $81,492
in bad debt expense for the year ended March 31, 2001 versus 2000. Professional
and legal fees, and related expenses incurred in connection with various private
placements, as well as SEC reporting requirements, which began in the third
quarter of fiscal 1999, have resulted in a combined increase of $376,595 in this
category of expense for the current year. For the year ended March 31, 2001, the
Company expensed no significant expenditures for web site development costs,
compared to a previously predicted expenditure for this category of expense of
approximately 10% of revenues.

              The net loss for the year ended March 31, 2001 was $1,966,611 or
  ($0.35) per share compared to a net loss of $1,701,820 or $(0.41) per share
  for the prior year. The net loss increased as a result of lower margins
  achieved in the current year and an increase in selling, general and
  administrative expenses. Non-cash charges associated with equity adjustments
  of $53,851 and $493,938 were included in the years ended March 31, 2001 and
  2000 respectively. Excluding the effect of these extraordinary items, the
  operating loss increased to $1,912,760 or ($0.34) per share in 2001 from
  $1,207,882 or ($0.29) per share for the same period in 2000.

         Financial Condition

         The Company had cash and cash equivalents of $283,429 at March 31, 2001
compared to cash and cash equivalents of $80,817 at March 31, 2000. The Company
had total current assets of $1,314,984 and total current liabilities of $996,257
at March 31, 2001. The Company had total shareholders' equity of $710,734 at
March 31, 2001. This compares to total current assets of $634,872 and total
current liabilities of $1,307,066 at March 31, 2000, as well as total
shareholders' deficit of $522,035 at March 31, 2000.

         Liquidity and Capital Resources.

              Since beginning operations in February 1997, the Company has
continued to sustain operating losses that have resulted in the use of cash
reserves. The Company anticipates that it will continue to incur net losses for
the foreseeable future until it is able to generate sufficient revenues from
product sales to sustain operations and fund expenditures related to future
growth. The Company has also undertaken a review of all expense items and
initiated cutbacks in various areas.

              Cash used in operating activities was $1,901,377 for the year
ended March 31, 2001 and $777,150 for the year ended March 31, 2000. Cash
utilized in investing activities was $170,996 for the year ended March 31, 2001,
and $132,400 for the year ended March 31, 2000 and related to the purchase of
property and equipment.

                                       23

<PAGE>

         Net cash provided by financing activities was $2,274,985 for the year
ended March 31, 2001 and $631,772 for the year ended March 31, 2000 coming
primarily from the proceeds of promissory notes issued in the fiscal year ended
March 31, 2000 and from the proceeds of common stock issuances in year ended
March 31, 2001.

         There is no assurance that the Company will generate sufficient
revenues to cover operating overheads or that it will achieve profitability.
There is no assurance that the Company will not require additional working
capital or other funds at a later date for the maintenance and expansion of
operations. There is no assurance the Company will be successful in obtaining
additional financing or that such financing will be available, nor if such
financing becomes available that it would be upon acceptable terms to the
Company.

         Furthermore, if we are unable to raise additional funds, we may be
required to reduce our work force, reduce compensation levels, reduce dependency
on outside consultants, modify our growth and operating plans, and even be
forced to terminate operations completely.

         Our operations could also suffer:

o        if we are unable to obtain licenses from third parties for the
         components of our products,

o        if our products liability insurance is not sufficient to cover damages
         from any claim that may be asserted against us,

o        if we are unable to compete as the technology in the diagnostic test
         kit field rapidly changes,

o        due to our need to rely on telecommunications infrastructures in
         foreign countries in order to increase our operations, and due to the
         regulatory and political risks of doing business in foreign countries.

         The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

         The accompanying consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. We have incurred
recurring operating losses, and negative cash flows from operating activities.

         The report of the Company's independent certified public accounts in
connection with our audited financial statements as of March 31, 2001 and March
31, 2000 and for each of the two years then ended contains an explanatory
paragraph indicating factors which create substantial doubt about the Company's
ability to continue as a going concern. These factors include recurring net
losses since inception and uncertainty surrounding future equity financing
through anticipated offerings.

                                       24

<PAGE>

         The Company has received proposals for financing for a minimum of
$500,000, which is in the form of a loan with equity features, which the Company
has the option to convert into equity. Though all conditions to close on such
proposals have not been satisfied, management believes that it will
satisfactorily conclude this financing. In addition, the Company is in
discussion with several strategic investors concerning a minority equity
investment. The Company has also applied for financing from government agencies,
such as the Florida Export Finance Corporation that provide export guarantees.
While there can be no assurance that any of the foregoing financing options will
be concluded, management is confident that it will secure financing from one or
more of these sources.

ITEM 7.  FINANCIAL STATEMENTS.

         The financial statements listed in the accompanying Index are filed as
part of this report. See Index on page F-1.

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

         On June 15, 2000, the Company dismissed its independent accountants,
PricewaterhouseCoopers LLP, and retained Gerson, Preston & Company, P.A. as the
Company's new independent accountants. The decision to change accountants was
not as a result of any disagreement between the Company and
PricewaterhouseCoopers LLP. The decision was made by the Chairman of the Board
and President of the Company, and ratified by the Company's Board of Directors.

         PricewaterhouseCoopers LLP audited the Company's consolidated financial
statements for the fiscal years ended March 31, 1999 and 1998. Their reports on
such consolidated financial statements did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle, except that the reports of
PricewaterhouseCoopers LLP for the fiscal years ended March 31, 1999 and 1998
contained an emphasis of matter paragraph relating to the Company's ability to
continue as a "going concern."

         In connection with its audits of the Company's financial statements as
of March 31, 1999 and for each of the two years in the period ended March 31,
1999 and through June 21, 2000, there were no disagreements with the Company's
former accountants on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of the former accountants,
would have caused them to make a reference to the subject matter of such
disagreements in connection with their reports.

         During each of the two fiscal years ended March 31, 2001 and 2000 and
through June 30, 2001, there have been no reportable events (as defined in
Regulation S-K Item 304(a)(1)(v)).

                                       25

<PAGE>

         The Company's former accountants were requested to furnish the Company
with a letter, addressed to the Securities and Exchange Commission, stating
whether the former accountants agree or disagree with the statements made by the
Company concerning PricewaterhouseCoopers LLP. The letter from the former
accountants was filed as an Exhibit to an amendment to the Company's 8-K filed
on June 27, 2000, when received by the Company.

         During the Company's fiscal years ended March 31, 2001 and 1999 and
through June 30, 2001, neither the Company nor anyone on its behalf has
consulted the Company's newly engaged accountants regarding either the
application of accounting principles to a specific transaction, whether
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, and neither a written report or oral advice
was provided that the Company concluded was an important factor considered by
the Company in reaching a decision as to the accounting, auditing or financial
reporting issue. During such period, neither the Company nor anyone on its
behalf consulted its new accountants on any matter that was either the subject
of a disagreement or a reportable event as defined in Item 304 of Regulation
S-K.

                                    PART III

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

         (a) The names, ages and positions of all executive officers of the
Company as of June 30, 2001 are listed below, followed by a brief account of
their business experience during the past five years. Officers are normally
appointed annually by the Board of Directors at a meeting of the directors
immediately following the annual meeting of stockholders.

         The directors, executive officers and key management employees of the
Company are:

<TABLE>
<CAPTION>
                     NAME              AGE                           POSITION
                     ----              ---                           ---------
<S>                                    <C>          <C>
Ken M. Peters                          54           President, Chief Executive Officer and Director
Barry Peters                           60           Chairman, Treasurer and Director
Paul R. Kamps                          37           Executive Vice President - Finance and Administration
Kenneth Lambley                        61           Vice President - Sales and Marketing
Martin Muy, Ph.D.                      40           Vice President - Technical Affairs
Maureen Besson                         37           Vice President - Operations and Secretary
Trevor Campbell, MT, FMT               55           Director
Richard P. Humbert                     57           Director
Orna L. Shulman                        42           Director
Nava Swersky Sofer                     40           Director
Eliot R. J. Kalter                     50           Director
</TABLE>

                                       26

<PAGE>

         Ken Peters, Kenneth Lambley, Martin Muy and Trevor Campbell were
elected to their positions as officers and directors of the Company in February
1998; Maureen Besson was elected Secretary in February 1998 and Vice President -
Operations in October 1999; Barry Peters was elected Chairman of the Board in
October 1998; Richard P. Humbert was elected as a director in May 2000; Paul R.
Kamps was elected Vice President - Finance and Administration in June 2000; Orna
L. Shulman was elected as a director in June 2000; Nava Swersky Sofer was
elected as a director in January 2001; and Eliot R. J. Kalter was elected as a
director in April 2000.

         KEN M. PETERS is President, Chief Executive Officer and founder of
World Diagnostics, Inc. From September 1995 to August 1996 Mr. Peters was an
independent consultant specializing in health care and biotechnology. From
September 1996 to January 1998 Mr. Peters was Vice President of Sales and
Marketing for Biodiagnostica, Inc. From 1984 to 1994 Mr. Peters held senior
international marketing positions with Pharmacia, AG, American Monitor Corp. and
Flow Laboratories, Inc. Mr. Peters has extensive experience spanning a
twenty-five year period in sales and marketing of diagnostic products,
particularly in the international marketplace. From 1979 to 1982, Mr. Peters was
the General Manager of Abbott Diagnostics, a division of Abbott Laboratories,
Inc., for the Caribbean, Central and South America. Mr. Peters was instrumental
in assisting the launch of several start-up ventures in the biotech industry,
including Genus Diagnostics, Inc. and BioAssay Systems Corp. Ken Peters has
received numerous awards from the Biomedical Marketing Association, and he has
been recognized for outstanding achievements by Who's Who in American Health
Care Marketing. Mr. Peters has published several articles in national journals
concerning technology, healthcare and marketing, and he has been quoted in
national periodicals, such as the Wall Street Journal, Clinical Chemistry
Systems and others. He has spent numerous years traveling throughout South
America and Europe speaks Spanish fluently. Mr. Peters received a M.A. in
Economics from the University of New Mexico in 1972 and received his B.A. in
Business and Economics from the City University of New York in 1969. Mr. Ken
Peters, President of the Company and Mr. Barry Peters, Chairman, are brothers.

         BARRY PETERS has served as the Chairman of the Board of the Company
since October 1998. Since 1997 he has also served as the Chief Executive Officer
of MediaVest, Inc., a private-investment firm. From 1995 to 1997 Mr. Peters was
Chairman and Chief Executive Officer of All-Comm Media Corporation. Mr. Peters
has over 25 years experience in corporate development, management and finance.
He is Chairman of the Board of Appian Graphics, Inc., a company specializing in
multi-monitor computer displays. He is the founder and former Chairman and Chief
Executive Officer of All-Comm Media Corporation (Nasdaq), a direct marketing and
Internet marketing services company (now Marketing Services Group, Inc.).
Previously, Mr. Peters was instrumental in sponsoring management buyouts and
providing early stage financing for companies that included: Metpath, Inc.,
Integrated Resources, Inc., ESB Ray-O-Vac Corp., Aydin Corporation, Exide
Corporation, Avco/Embassy Pictures Corp., Time/Warner, ITT Corporation, Allied
Signal Companies, Inc., Borg-Warner Corporation and F. Schumacher & Co., Inc.
Mr. Peters began his career as a Staff Financial Analyst for RCA Corporation.
Mr. Peters received a MBA in Finance from the Baruch School of Business in 1969,
and his BA in Economics from Hofstra University in 1968, graduating magna cum
laude. Mr. Peters is the brother of Ken Peters, President of the Company.

                                       27

<PAGE>

         PAUL R. KAMPS joined the Company as Vice President - Finance and
Administration in June 2000 and became Executive Vice President - Finance and
Administration in September 2000Mr. Kamps is a CPA and Chartered Accountant,
with over 13 years of financial and operating experience at small and mid sized
companies, with particular emphasis in the international arena. From March 1999
to May 2000 Mr. Kamps was employed by Swifty Serve Convenience Stores as an
independent financial consultant. From October 1998 to February 1999 he was
employed by LKQ Corporation as Controller. From November 1996 to September 1998
he was employed by Proven Edge, Inc. as Controller, and from July 1995 to
October 1996 Mr. Kamps was employed by Medical Resources, Inc. as an Accounting
Manager. Mr. Kamps received his Bachelor of Accounting Science, with honors in
1989, from the University of South Africa, Johannesburg, South Africa, and his
Bachelor of Commerce in 1987 from the University of Witwatersrand, Johannesburg,
South Africa.

         KENNETH LAMBLEY has served as the Vice President-Sales and Marketing of
the Company since December 1998. Prior to joining the Company Mr. Lambley was
employed by Seradyn Diagnostics, Inc. from January 1968 to December 1998 in
various executive capacities. At Seradyn, Mr. Lambley was employed in various
positions beginning in sales, through marketing to a position as international
sales director for Seradyn Diagnostics a subdivision of Dow Chemical which was
later acquired by Mitsubishi. During his thirty-year career, his
responsibilities included sales and marketing management for both diagnostic and
pharmaceutical products that included direct sales to regional management of the
sales force and to distribution management, including International. Mr. Lambley
received his undergraduate diploma from Nottingham College, in the United
Kingdom in 1963 and received his graduate degree in international marketing in
1965; he studied pharmacy in the Royal Army Medical Corps from 1963 through
1966.

         MARTIN MUY, PH.D. has served as the Vice President-Technical Affairs of
the Company since April 1999. Dr. Muy has over eight years experience in
developing genetically engineered diagnostic research and health technology
products concerning microbiology and immunology, and immunology assays. From
June 1998 until 1999 Dr. Muy was employed as Senior Product Development Manager
for PharmaCorp (USA and Mexico), where he worked on commercialization of various
technologies. From September 1995 to June 19987 Dr. Muy was a post-doctoral
student of the University of Massachusetts and Oregon Health Sciences
University. Dr. Muy was also employed as Senior Product Development Manager for
PharmaCorp (USA and Mexico), where he worked on commercialization of various
technologies. In addition, Dr. Muy has been engaged by such companies BPL (UK),
Schering Plough (USA), Ortman Biomedics (Switzerland) and Epitope (USA). Dr. Muy
also has been employed at various Research Centers performing work, including:
Earles A. Chiles Institute Providence Medical Center; The Department of
Infectious Diseases at the University of Massachusetts Medical Center and Oregon
Health Sciences University. Dr. Muy received his Ph.D. in Biologic Sciences from
Mexico University in 1989, and his B.S. in 1985. Dr. Muy completed three
post-doctoral programs at the University of Oregon from 1991 through 1997.

         MAUREEN BESSON has served as Vice President - Operations and Secretary
since June 1998. Ms. Besson has over ten years experience in operations
management commencing with the Intercontinental Hotel chain in Caracas Venezuela

                                       28

<PAGE>

from 1987 until 1992. From 1992 to 1994 Ms. Besson was occupied full time with
her family in Caracas. From 1994 to 1997 Ms. Besson was in charge of asset
management for export products to South and Central America for Bio Diagnostica
Inc. Ms. Besson was first employed by the Company as Administrative Assistant to
the President in February 1997. Ms. Besson attended preparatory school in
Syracuse New York and completed her studies in business management abroad at the
University of Nuevas Profesiones in Venezuela in 1987.

         TREVOR CAMPBELL has served as a director of the Company since February
1997. Since 1983 Mr. Campbell has been the owner and been President of Microlabs
Inc., Jamaica's largest private reference laboratory, which has 14 independent
laboratories in Jamaica. From 1981 to 1982 Mr. Campbell served as the President
of CASMET, the Caribbean Society of Medical Technologists. From 1977 to 1982,
Mr. Campbell was the sales liaison for Abbott Diagnostics Jamaican distribution
business in Jamaica. Mr. Campbell received a diploma in Medical Technology in
June 1967 at the Public Health Service for Jamaica. Subsequently, he studied
business administration at the University of the West Indies, followed by a
two-year fellowship at the World Trade Institute in New York as a US AID Fellow
studying International Marketing.

         RICHARD P. HUMBERT has served as a director of the Company since May
2000. Mr. Humbert has 20 years experience in computer technology and information
systems. Mr. Humbert has been the Director of Information Technologies for
Panavision, the world's largest supplier of movie cameras and cinematography
equipment since July 1997. From August 1995 to June 1997 he was Director of MIS
for All-Comm Media Corporation. Prior thereto, he was President of MicroSystems,
Inc., a Washington D.C. based computer software engineering and consulting
company. Mr. Humbert attended Cornell University and subsequently, after serving
in the United States Marine Corps, received a B.A. degree in English from the
University of Maryland.

         ORNA L. SHULMAN has served as a director of the Company since June
2000. Ms. Shulman has been the Chief Operation Officer of Intertech Corporation,
an international private investment firm, based in New York City, overseeing
investments in real estate, manufacturing and for emerging technology and
biotechnology companies in the United States and Israel, since 1989. Ms. Shulman
serves on the Board of Directors of the Times Square B.I.D.; Women's Leadership
Board of the John F. Kennedy School of Government, Harvard University; member of
the Advisory Board, Real Estate Center, the Wharton School, University of
Pennsylvania. She is also Trustee of the Washington Institute for Near East
Policy, and is a Board member of the Association of Foreign Investors in Real
Estate. Ms. Shulman holds a J.D. degree from Washington University School of
Law, the American University, and a Bachelors degree, cum laude, from Tufts
University.

         NAVA SWERSKY SOFER has served as a director of the Company since
January 2001. Ms. Swersky Sofer is General Partner of Columbine Ventures, a
biomedical venture capital fund she founded in 2000. Since relocating to Israel
in 1999, Ms. Swersky Sofer has managed a portfolio of biotechnology companies,
including serving as chairman & CEO of ARP Biomed, an Israeli oncology company,
chairman of Vitality Biotechnologies, an American-Israeli agricultural
biotechnology company; and director and strategic advisor to Discovery
Therapeutics, Inc., an American biopharmaceutical company with products in
advanced clinical trials for neurological and cardio-renal applications. Since
1997 Ms. Swersky Sofer has also been an advisor to Renaissance Partners, a

                                       29

<PAGE>

European biomedical investment fund. Ms. Swersky Sofer is a special advisor to
the Israeli government and, since 1999, has served as head of Israel's
biotechnology consortium Da'at, a $50 million government-industry effort which
incorporates the ten leading Israeli companies and five academic institutions
and supports the creation of novel technologies in drug discovery, drug
development and bio-informatics. From 1996 to 1999, Ms. Swersky Sofer was a
partner at Sanderling, a Menlo Park, California-based venture capital firm with
over $200 million under management focused on early stage investments in the
biomedical field. Prior to joining Sanderling, Ms. Swersky Sofer was a member of
the senior management group of Ciba-Geigy Limited (now Novartis) and worldwide
Head of Pharma Policy at the company's headquarters in Basel, Switzerland,
responsible for the company's activities in this field in over 120 countries.
Ms. Swersky Sofer received her law degree (L.L.B.) in 1986 from Tel Aviv
University and an MBA in 1990 from IMD International in Lausanne, Switzerland,
as well as diplomas from the Sorbonne in Paris, the Instituto Trentino in Italy
and the Goethe Institute in Munich, Germany. She is a member of the Israel Bar
Association and a retired Captain of the Israel Defense Forces.

         ELIOT R. J. KALTER, age 50, has served as a director of the Company
since April 2001. Mr. Kalter has over 25 years experience in the field of
international economics, publishing articles on fiscal, financial sector, and
structural adjustment issues. Mr. Kalter holds a Ph. D. in international finance
from the University of Pennsylvania; an M.Sc. in international economics from
the London School of Economics and Political Science, University of London; and
Bachelors degree, cum laude, from the University of Cincinnati.

         All directors hold office until the next annual meeting of shareholders
of the Company and until there successors are elected and qualified. Officers
hold office until the first meeting of directors following the annual meeting of
shareholders and until their successors are elected and qualified, subject to
earlier removal by the Board of Directors.

         (b)      Compliance with Section 16(a) of the Exchange Act.

         To the Company's knowledge, based solely on the Company's review of
Forms 3 (Initial Statement of Beneficial Ownership of Securities), Forms 4
(Statement of Changes in Beneficial Ownership) and Forms 5 (Annual Statement of
Changes in Beneficial Ownership) furnished to the Company, all persons filed
such forms in a timely manner, except that a Form 4 was filed late by Mr. Barry
Peters and a Form 3 was filed late by each of Mr. Kamps and Mrs. Shulman and
Mrs. Sofer.

ITEM 10. EXECUTIVE COMPENSATION

         The following table presents certain specific information regarding the
compensation of the President of the Company. No executive officer of the
Company received an aggregate salary, bonus and other compensation which
exceeded $100,000 during each of the fiscal years ended March 31, 2001, 2000 and
1999.

                                       30

<PAGE>


<TABLE>
<CAPTION>
         Summary Compensation Table
------------------- ------- ------------------------------------ -----------------------------------------------------
                                    Annual Compensation                             Long Term Compensation
                            ------------------------------------ -----------------------------------------------------
                                                                             Awards                    Payouts
                            --------- -------- ----------------- ------------------------------ ----------------------
                                                                 Securities        Restricted
Name and                                       Other Annual      Underlying        Stock        LTIP       All Other
Principal                   Salary    Bonus    Compensation      Options/ SARs     Awards       Payouts    Compensation
Position(s)          Year   ($)       ($)      ($)               (#)               (#)          ($)        ($)
------------------- ------- --------- -------- ----------------- ----------------- ------------ ---------- -----------
<S>                 <C>        <C>    <C>      <C>               <C>               <C>          <C>        <C>

Ken Peters,         2001    58,000     0       0
President           2000    58,000     0       0                 60,000            0            0          0
                    1999    58,000     5000    0                 0                 0            0          0
------------------- ------- --------- -------- ----------------- ----------------- ------------ ---------- -----------
</TABLE>

<TABLE>
<CAPTION>
         Option/SAR Grants In Year 2001
-------------------- ---------------------- ------------------- ------------------- ----------------- ---------------------
                                            Percent             Exercise            Market
                     Number of              of Total            or Base Price       Price on
                     Securities             Options/SARs        ($/sh)              Date of Grant ($/sh)
                     Underlying             Granted to          -------------------------------------
                     Options/SARs           Employees in                                              Expiration Date
       Name (a)      Granted (#) (b)        Fiscal Year (c)                      (d)                          (e)
-------------------- ---------------------- ------------------- ------------------------------------- ---------------------
<S>                  <C>                    <C>                 <C>                 <C>               <C>
     Ken Peters      60,000 (1)             20.2%               $1.22               $1.22             10/16/05
-------------------- ---------------------- ------------------- ------------------- ----------------- ---------------------

</TABLE>


(1) Granted on October 16, 2000 and vest over a three year period at a
    rate of one third per year, commencing on 10/16/01.


Compensation of Directors

         The Company compensates its directors at the rate of $1,500 annually to
attend board meetings and, from time to time, grants directors warrants to
purchase shares of our common stock. No director has been granted more than
50,000 of such warrants.

         In May 2000, as an inducement to join the Board of Directors, the
Company granted Richard P. Humbert the right to purchase, for $500, warrants to
purchase 10,000 shares of common stock at an exercise price of $3.50 per share.
The warrants will be exercisable at any time for a period of 3 years. The shares
issued upon exercise of the warrants may not be transferred without the prior

                                       31

<PAGE>

written consent of the Company. The $3.50 exercise price per share is subject to
adjustment to be equal to the lowest sales price for any equity securities
issued by the Company during the period from May 2000 through September 5, 2000.
As a result, the warrant exercise price was adjusted to $1.00 per share. The
warrant shares are restricted securities under Rule 144 of the Securities Act.

             In June 2000, as an inducement to join the Board of Directors, the
Company granted Orna L. Shulman the right to purchase, for $2,500, warrants to
purchase 50,000 shares of common stock at an exercise price of $1.00 per share.
The warrants will be exercisable at any time for a period of 3 years. The shares
issued upon exercise of the warrants may not be transferred without the prior
written consent of the Company. The warrant shares will be restricted securities
under Rule 144 of the Securities Act.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth common stock, Class A Warrant and Class
  B Warrant beneficial ownership information of: (1) each person known by us to
  be the beneficial owner of more than 5% of the outstanding shares of common
  stock; (2) of our executive officers and directors; and (3) all of our
  executive officers and directors as a group.

         The information below is based on 7,255,120 shares of common stock
outstanding, 2,250,000 Class A Warrants outstanding and 2,250,000 Class B
Warrant outstanding on June 30, 2001. Except as otherwise indicated, all
securities are owned directly.

<TABLE>
<CAPTION>

                                         Amount and
                                         Nature of
             Name and Address            Beneficial Ownership               Percent of Class
             ----------------            --------------------               ----------------
<S>                                      <C>                                <C>
    Ken Peters                              717,450                                   9.88
    11269 NW 15th Place
    Pembroke Pines, FL  33026

    Barry Peters                            827,640(1)                               11.41
    680 Harbor Street
    Venice, CA 90291

    Peters Family Trust                     578,000(2)                                7.97
    680 Harbor Street
    Suite 600
    Los Angeles, CA  90064

    Trevor Campbell                          15,000                                      *
    6163 NW 182nd Terrace
    Miami, FL 33015
</TABLE>

                                       32
<PAGE>

<TABLE>
<CAPTION>

                                         Amount and
                                         Nature of
             Name and Address            Beneficial Ownership               Percent of Class
             ----------------            --------------------               ----------------
<S>                                      <C>                                <C>
    Kenneth Lambley                          10,000                                *
    6489 Hunters Green Court
    Indianapolis, IN  46276

    Martin Muy                               25,000(3)                             *
    7489 Fairway Dr., Apt #403
    Miami Lakes, FL  33014


    Richard P. Humbert                       27,500(4)                             *
    818-3010 Beach Street
    Venice, CA  90291

    Orna L. Shulman                          40,000(5)                             *
    Intertech Corporation
    1500 Broadway
    New York, NY  10036

    Nava Swersky Sofer                            0                                *
    50 Dizengoff Street
    64332 Tel Aviv, Israel

    Paul R. Kamps                                 0                                *
    7389 Fairway Drive, #149
    Miami Lakes, FL 33014

    Trefoil Tech Investors,               1,500,000(6)                          20.68
    L.P.                                    500,000 Class A                     22.22
                                            Warrants
                                            500,000 Class B                     22.22
                                            Warrants

    Greenwood Partners, L.P.                600,000(6)                           8.27
                                            200,000 Class A                      8.88
                                            Warrants
                                            200,000 Class B                      8.88
                                            Warrants

    George Szakacs                          450,000(6)(7)                        6.2
                                            150,000 Class A                      6.66
                                            Warrants (8)
                                            150,000 Class B                      6.66
                                            Warrants (9)

    All officers and directors            1,662,590                             22.92
    as a group (10 persons)
</TABLE>

                                       33
<PAGE>

*        Less than 1%
**       Assumes the exercise of the warrants and the sale of the
         shares of common stock issuable upon exercise of the warrants.
(1)      Represents:
         a. 249,640 shares held by MediaVest, Inc., a Delaware corporation
            wholly owned by Barry Peters; and
         b. 578,000 shares held by the Peters Family Trust, of which Barry
            Peters is a trustee.
(2)      Shares of the Peters Family Trust are included as beneficially owned
         by Barry Peters.
(3)      Includes 10,000 shares of common stock issuable upon exercise of
         currently exercisable options.
(4)      Includes 25,000 shares of common stock issuable upon exercise of
         currently exercisable options.
(5)      Represents 40,000 shares of common stock issuable upon exercise of
         currently exercisable options.
(6)      Includes  all  shares of common  stock  issuable  upon  exercise  of
         the Class A Warrants  and Class B  Warrants  held by such
         securityholder.
(7)      Includes 100,000 shares of common stock and 200,000 shares of
         common stock issuable upon exercise of the Class A Warrants
         and Class B Warrants owned by Gobal Wire & Cable Pension, of
         which Mr. Szakacs is the beneficiary.
(8)      Includes 100,000 Class A Warrants owned by Global Wire & Cable Pension,
         of which Mr. Szakacs is the beneficiary.
(9)      Includes 100,000 Class B Warrants owned by Global Wire & Cable Pension,
         of which Mr. Szakacs is the beneficiary.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the fiscal years ended March 31, 2001 and March 31, 2000, one of
the largest customers of the Company was Microlabs, Inc. Microlabs, Inc.
purchases represented approximately 7% and 8% of revenues for fiscal year 2001
and 2000. Trevor Campbell, one of the Company's directors, is the President and
owner of Microlabs, Inc.

         In September 2000, the Company received a $145,000 unsecured bridge
loan, bearing interest at the rate of 10% per annum, from Barry Peters, Orna
Shulman and Kimberly Peters. This loan was repaid in full in October 2000.

         There are no other material transactions between the Company and any of
its affiliates except as set forth in this report.

                                       34

<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

EXHIBIT INDEX

         The following documents are filled herewith or have been included as
         exhibits to previous filings with the Commission and are incorporated
         herein by this reference.

<TABLE>
<CAPTION>
EXHIBIT                                              DOCUMENT
NO.

<S>      <C>
3.1      Amended and Restated Certificate of Incorporation of World Diagnostics Inc.,
         filed as Exhibit 3.3 to Form SB-2 filed on March 28, 2001.

3.2      Amended and Restated By-Laws of World Diagnostics Inc., filed as Exhibit 3.3 to Form SB-2 filed on March 28, 2001.

4.0      Form of Stock Certificate, filed as Exhibit 3.0 to Form 10SB12G filed on October 13, 1999.

4.1      Promissory  Note,  filed as Exhibit 4.1 to Form 10-QSB for the period ended  September 30, 1999 filed on February 15,
         2000.

4.2      Warrant Certificate, filed as Exhibit 4.2 to Form 10-QSB for the period ended September 30, 1999 filed on
         February 15, 2000.

4.3      Form of Class A Warrant Certificate, filed as Exhibit 4 to Form 8-K filed on December 19, 2000.

4.4      Form of Class B Warrant Certificate, filed as Exhibit 4 to Form 8-K filed on December 19, 2000.

10.1     Acquisition of Health Tech International, Inc., filed as Exhibit 6.1 to Form 10SB12G filed on October 13, 1999.

10.2     Keyman Insurance For Chief Executive Officer, filed as Exhibit 6.2 to Form 10SB12G filed on October 13, 1999.

10.3     Independent  Contractor  Agreement  With  Immunodiagnostics,  Inc.,  filed as Exhibit 6.3 to Form 10SB12G filed on
         October 13, 1999.

10.4     Form Confidentiality Agreement With Management, filed as Exhibit 6.4 to Form 10SB12G filed on October 13, 1999.

10.5     Form Letter Agreement Executed By Distributors, filed as Exhibit 6.5 to Form 10SB12G filed on October 13, 1999.

10.6     Office Lease, filed As Exhibit 6.6 to Form 10SB12G filed on October 13, 1999.

10.7     Office Lease dated August 15, 2000, filed as Exhibit 10.7 to Form SB-2 filed on March 28, 2001

10.8     First  Amendment  to  Office  Lease  dated  as of  December  19,  2000,  filed as  Exhibit  10.9 to Form  SB-2
         filed on March 28, 2001

11.0     Statement Re: Computation Of Per Share Earnings

16.0     Letter On Change In Certifying Accountants, filed as Exhibit 16 to the Company's 8-K/A filed on January 26, 2001

21.0     Subsidiaries Of The Registrant, filed as Exhibit 21 to the Company's Form 10-KSB for the year ended March 31, 2000

23.1     Consent of Gerson, Preston, Robinson & Company, P.A.

         (B)      Reports On Form 8-K

         No reports on Form 8-K were filed during the quarter ended March 31, 2001.
</TABLE>

                                       35
<PAGE>

SIGNATURES

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

                                         WORLD DIAGNOSTICS INC.


Date: July 13, 2001                      By:   /s/ Ken Peters
                                             ----------------------------------
                                               Ken Peters, Director, President
                                               and Chief Executive Officer

         In accordance with 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.

         Signatures and Title                             Date
         --------------------                             --------
          /s/ Paul R. Kamps                               July 13, 2001
         -----------------------------------
         Paul R. Kamps, Executive
         Vice President-Finance and Administration

         /s/ Barry Peters                                 July 13, 2001
         -----------------------------------

         Barry Peters, Director

         /s/ Trevor Campbell                              July 13, 2001
         -----------------------------------
         Trevor Campbell, Director

         /s Richard P Humbert                             July 13, 2001
         -----------------------------------
         Richard P. Humbert, Director


                                       36
<PAGE>

                             WORLD DIAGNOSTICS INC.

                                   ----------

                          INDEPENDENT AUDITOR'S REPORT
                                       AND
                                  CONSOLIDATED
                              FINANCIAL STATEMENTS

                                   ----------

                             MARCH 31, 2001 AND 2000

CONTENTS

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


                                                                       PAGE

INDEPENDENT AUDITORS' REPORT                                            F-2


     CONSOLIDATED FINANCIAL STATEMENTS

     Consolidated Balance sheet                                         F-3
     Consolidated Statements of Operations                              F-4
     Consolidated Statements of Shareholders' Equity                    F-5
     Consolidated Statements of Cash Flows                              F-7
     Notes to Consolidated Financial Statements                         F-9



                                      F-1

<PAGE>

Board of Directors and Shareholders
World Diagnostics Inc. and Subsidiary

INDEPENDENT AUDITORS' REPORT

We have audited the accompanying consolidated balance sheet of World Diagnostics
Inc. and Subsidiary at March 31, 2001 and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the two years then
ended. These consolidated 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 of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of World Diagnostics
Inc. and Subsidiary as of March 31, 2001 and the results of its operations and
its cash flows for each of the two years then ended, in conformity with
accounting principles generally accepted in the United States of America.

The consolidated financial statements referred to above have been prepared
assuming that World Diagnostics Inc. will continue as a going concern. As more
fully described in Note 3, the Company has incurred recurring operating losses
and negative cash flows from operating activities. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans as to these matters are also described in Note 3. The
accompanying consolidated financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that might result from
the outcome of this uncertainty.

July 10, 2001                  /s/ Gerson, Preston, Robinson & Company, P.A.
Miami Beach, Florida           CERTIFIED PUBLIC ACCOUNTANTS


                                      F-2

<PAGE>

World Diagnostics, Inc. and Subsidiary
Consolidated Balance Sheet
at March 31, 2001

<TABLE>
<CAPTION>
Assets

Current Assets
<S>                                                                        <C>
   Cash and cash equivalents                                               $   283,429
   Accounts receivable, net of an allowance of $99,105                         595,084
   Inventory, net                                                              357,627
   Other current assets                                                         78,844
                                                                          ------------
       Total current assets                                                  1,314,984
Property and equipment, net of accumulated depreciation                        416,297
Other assets, includes $83,658 of web site development costs                   131,306
                                                                          ------------
      Total assets                                                         $ 1,862,587
                                                                          ============

Liabilities and Shareholders' Equity

Current Liabilities
   Accounts payable and accrued expenses                                    $  959,105
   Current portion of deferred rent                                             15,000
   Current portion of obligations under capital leases                          22,152
                                                                          ------------
     Total current liabilities                                                 996,257
Deferred rent, net of current portion                                          133,750
Obligations under capital leases, net of current portion                        21,846
                                                                          ------------
      Total Liabilities                                                      1,151,853
                                                                          ------------

Shareholders' Equity
   Common stock; $0.001 par value; 25,000,000 shares authorized
     7,255,120 shares issued and outstanding                                     7,255
   Additional paid in capital                                                5,318,430
   Accumulated deficit                                                      (4,614,951)
                                                                         -------------
      Total Shareholders' Equity                                               710,734
                                                                          ------------
      Total Liabilities and Shareholders' Equity                           $ 1,862,587
                                                                         =============
</TABLE>

Read notes to consolidated financial statements.

                                      F-3

<PAGE>

World Diagnostics, Inc. and Subsidiary
Consolidated Statements of Operations
Years Ended March 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                  2001                          2000
                                                          --------------------       ----------------------

<S>                                                          <C>                          <C>
Revenues                                                     $      2,203,534             $      1,463,417

Cost of goods sold                                                  1,752,635                    1,078,861
                                                          --------------------       ----------------------

Gross profit                                                          450,899                      384,556

Selling, general and administrative expenses                        2,323,360                    1,280,598
                                                          --------------------       ----------------------

Loss from operations before other income and expenses              (1,872,461)                    (896,042)

Other income and (expenses):
 Debt extension expense                                                (9,758)                     (67,642)

 Interest expense                                                     (32,671)                    (254,490)

 Other Income                                                           2,130                       10,292
                                                          --------------------       ----------------------

Loss before extraordinary item                                     (1,912,760)                  (1,207,882)

Extraordinary loss on extinguishments of debt                         (53,851)                    (493,938)

                                                          --------------------       ----------------------
Net Loss                                                     $    (1,966,611)            $      (1,701,820)
                                                          ====================       ======================

Basic and diluted loss per common share:
   Loss from operations before extraordinary item            $         (0.34)            $           (0.29)
   Extraordinary item                                                  (0.01)                        (0.12)
                                                          --------------------       ----------------------
   Basic and diluted loss per common share:                  $         (0.35)            $           (0.41)
                                                          --------------------       ----------------------

Weighted average number of common shares outstanding               5,578,137                     4,210,256
</TABLE>

Read notes to consolidated financial statements.

                                      F-4
<PAGE>

World Diagnostics, Inc. and Subsidiary
Consolidated Statements of Shareholders' Equity
Years Ended March 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                      Common Stock
                                                  -------------------    Additional
                                                    Number of              Paid-in         Unearned      Accum.
                                                     Shares    Amount      Capital           Comp.       Defict          Total
                                                    --------   -----      ---------         -------      ------          -----
<S>                                               <C>          <C>       <C>               <C>          <C>            <C>
Balance at March 31, 1999                         3,410,737    $3,410    $ 1,100,972       $ (7,840)    $(946,520)     $ 150,022

Issuance of common stock
for extinguishment of debt
at $5.25 per share                                  101,090       101        530,622              -             -        530,723

Issuance of common stock
from the exercise of common
stock purchase warrants                             748,500       749           (749)             -             -              -

Issuance of common stock
for extinguishment of debt
at $5.63 per share                                    6,000         6         33,744              -             -         33,750

Capital contribution from the
foregiveness of debt by shareholder/directors             -         -         37,412              -             -         37,412

Portion of the proceeds from issuance of debt
securities with detachable warrants allocable             -         -        260,350              -             -        260,350
to the warrants

Loss due to extension of debt                             -         -         67,642              -             -         67,642

Issuance of common stock
for services to non-employees
at $6.04 and $5.63 per share                         15,500        16         92,030              -             -         92,046

Amortization of unearned
Compensation                                              -         -              -          7,840             -          7,840

Net Loss                                                  -         -              -              -    (1,701,820)    (1,701,820)
                                                  -------------------------------------------------------------------------------
Balance at March 31, 2000                         4,281,827   $ 4,282    $ 2,122,023         $    -   $(2,648,340)    $ (522,035)
</TABLE>


                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                                      Common Stock
                                                  -------------------    Additional
                                                    Number of              Paid-in         Unearned      Accum.
                                                     Shares    Amount      Capital           Comp.       Defict          Total
                                                    --------   -----      ---------         -------      ------          -----
<S>                                               <C>          <C>       <C>               <C>          <C>            <C>
Issuance of common stock in a private placement      71,440        71        499,929              -             -        500,000
at $7 per share, net of issuance costs

Issuance of common stock
for services                                         73,500        74         62,666              -             -         62,740

Issuance of common stock
to an employee at $1.31 per share                    10,000        10         13,090              -             -         13,100

Conversion of debt and warrants to equity,
through issuance of common stock                    396,913       397        539,851              -             -        540,248

Issuance of common stock in a private placement
at $1 per share, plus issuance of one share for     171,440       171         99,829              -             -        100,000
each warrant exchanged

Issuance of common stock in a private placement
at $1 per share, net of issuance costs            2,250,000     2,250      1,882,921              -             -      1,885,171

Options issued for services                               -         -         71,798              -             -         71,798

Options issued for interest                               -         -         15,915              -             -         15,915

Options issued to extend debt                             -         -          9,758              -             -          9,758

Proceeds of warrant subscriptions                         -         -            650              -             -            650

Net Loss                                                  -         -              -              -    (1,966,611)    (1,966,611)
                                                  -------------------------------------------------------------------------------
Balance at March 31, 2001                         7,255,120   $ 7,255    $ 5,318,430        $     -   $(4,614,951)      $710,734
                                                  ===============================================================================
</TABLE>


                                      F-6
<PAGE>

World Diagnostics, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Years Ended March 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                       2001             2000
                                                                   -------------   ------------

<S>                                                                 <C>            <C>
Cash flows from operating activities
 Net Loss                                                           $(1,966,611)   $(1,701,820)
 Adjustment to reconcile net loss to net cash used
 in operating activities:
   Extraordinary loss on extinguishments of debt                         53,851        493,938
   Options in 2000 and common stock in 1999 issued to extend debt         9,758         67,642
   Common stock issued for compensation                                  13,100         92,046
   Common stock issued for services                                      62,740              -
   Options issued for services                                           71,798              -
   Options issued for interest                                           15,915              -
   Amortization of debt discount                                              -        239,850
   Amortization of unearned compensation                                      -          7,840
   Depreciation                                                          46,525         19,288
   Inventory Reserve                                                     29,470              -
   Bad Debt expense                                                     169,459         87,967
   Loss on disposal of property and equipment                            47,133              -
Changes in operating assets and liabilities:
    Accounts receivable                                                (373,594)      (396,804)
    Inventory                                                          (259,368)       (85,245)
    Other current assets                                                (43,467)       (25,128)
    Other assets                                                       (124,343)        (2,544)
    Accounts payable and accrued expenses                               347,507        425,820
    Deferred rent                                                        (1,250)             -
                                                                    -----------    -----------
         Net cash (used) in operating activities                     (1,901,377)      (777,150)
                                                                    -----------    -----------
Investing activity
                                                                    -----------    -----------
   Purchase of property and equipment                                  (170,996)      (132,400)
                                                                    -----------    -----------
Financing activities
  Payments under capital lease obligations                              (15,836)        (9,478)
  Proceeds from notes payable                                           145,000        745,000
  Payment of notes payable                                             (340,000)      (120,000)
  Net proceeds from issuance of common stock                          2,485,171              -
  Proceeds from issuance of warrants                                        650         16,250
                                                                    -----------    -----------
        Net cash provided by financing activities                     2,274,985        631,772
                                                                    -----------    -----------
Net increase(decrease) in cash and cash equivalents                     202,612       (277,778)
Cash and cash equivalents, beginning of year                             80,817        358,595
                                                                    -----------    -----------
Cash and cash equivalents, end of year                                  283,429         80,817
                                                                    ===========    ===========
</TABLE>


                                      F-7
<PAGE>

<TABLE>
<CAPTION>
                                                                       2001             2000
                                                                   -------------   ------------

<S>                                                                 <C>            <C>
Supplemental disclosures of cash flow information:

   Cash paid during the year for interest                            $        -      $   7,397

Supplemental disclosures of non-cash investing and
financing activities:

   Property and equipment acquired through capital and
   operating lease agreements                                        $  167,532      $  41,336

   Issuance of common stock for the extinguishment of debt           $  475,000      $  70,535

   Forgiveness of debt payable to shareholders/directors
   considered to be  a capital contribution                          $        -      $  37,412

   Issuance of warrants for other assets                             $        _      $   4,250

</TABLE>

Read notes to consolidated financial statements.




                                      F-8
<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

1.       NATURE OF OPERATIONS

         World Diagnostics, Inc. (the "Company"), sells medical diagnostic and
         laboratory products manufactured by contract suppliers. The products
         are sold predominately through distributors, dealers and through the
         Company's GLOBALeMED interactive shopping and informational website.

         Substantially all of the Company's sales are made to international
         distributors.

         The Company was organized in Delaware on February 2, 1997.
         GLOBALeMED.com, Inc. was organized in Delaware on March 9, 2000.

2.       SIGNIFICANT ACCOUNTING POLICIES

         Principles of Consolidation. The consolidated financial statements
         include the accounts of the Company and its wholly-owned subsidiary.
         All significant inter-company transactions and balances have been
         eliminated in consolidation.

         Cash and Cash Equivalents. The Company considers highly liquid
         investments with original maturities of three months or less from the
         dates of purchase to be cash equivalents.

         Inventory. Inventory is stated at the lower of cost or market using the
         specific cost method which closely approximates average cost. As of
         March 31, 2001, substantially all inventories represent finished goods
         held for sale. The Company recorded a reserve of approximately $49,000
         as of March 31, 2001, to reduce the carrying amount of the inventory to
         its net realizable value.

         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. Expenditures for repairs and maintenance are
         generally charged to expense as incurred. Retirements, sales and
         disposals of assets are recorded by removing the cost and accumulated
         depreciation from the asset and accumulated depreciation accounts with
         any resulting gain or loss reflected in income.

         Long-lived Assets. The Company reviews long-lived assets for impairment
         whenever events or changes in circumstances indicate that the carrying
         amount of an asset may not be recoverable. In performing the review for
         recoverability the Company estimates the future cash flows expected to
         result from the use of the asset and its eventual disposition. If the
         sum of the expected future cash flows is less than the carrying amount
         of the assets, an impairment loss is recognized. Accordingly,
         impairment loss is the difference between the sum of the estimated
         future cash flows and the carrying amount of the asset. Management
         believes that there is no impairment as of March 31, 2001.


                                     F-9

<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

2.       SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

         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 of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of income and
         expenses during the reported period. Actual results could differ from
         those estimates.

         Fair Value of Financial Instruments. The carrying amount of accounts
         receivable, accounts payable and accrued expenses approximate fair
         value because of their short duration. The carrying amount of debt
         approximates fair value because the interest rates are similar to the
         interest rates currently available to the Company.

         Income Taxes. The Company accounts for income taxes under Statement of
         Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
         Taxes". Under SFAS 109, deferred income tax assets and liabilities are
         determined based upon differences between financial reporting and tax
         bases of assets and liabilities and are measured using currently
         enacted tax rates. SFAS 109 requires a valuation allowance to reduce
         the deferred tax assets reported if, based on the weight of the
         evidence, it is more likely than not that some portion or all of the
         deferred tax assets will not be realized.

         Revenue  Recognition.  Revenue is  recognized  when the product is
         shipped.  Sales  returns and sales  discounts  are deducted
         from gross sales.

         Loss Per Share. Basic loss per share is computed by dividing loss
         available to common shareholders by the weighted-average number of
         common shares for the period. The computation of diluted loss per share
         is similar to basic loss per share, except that the denominator is
         increased to include the number of additional common shares that would
         have been outstanding if the potentially dilutive common shares, such
         as options, had been issued. Diluted loss per share is not presented
         because the effects would be anti-dilutive.

         Stock Based Compensation. Statement of Financial Accounting Standard
         No. 123, "Accounting for Stock Based Compensation", requires that all
         transactions with non-employees in which goods or services are the
         consideration received for the issuance of equity instruments be
         accounted for based on the fair value of the consideration received or
         the fair value of the equity instruments issued, whichever is more
         reliably measurable.

                                     F-10
<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

2.       SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

         Web-site Technology and Content. Technology and content costs consist
         principally of payroll and related costs for development, editorial
         systems, consultants and costs of acquired content for the Company's
         website. Technology and content costs related to planning, development
         and acquisition of content and operations of the Company's website are
         expensed as incurred and included in selling, general and
         administrative expenses. Costs to acquire or develop both hardware and
         software, needed to operate the site are capitalized and depreciated
         over estimated useful lives.

         Recent Accounting Pronouncements

         The Company adopted SOP 98-1, "Accounting for the Costs of Computer
         Software Developed or Obtained for Internal Use" effective April 1,
         1999. SOP 98-1 establishes criteria for determining which costs of
         developing or obtaining internal-use computer software should be
         charged to expense and which should be capitalized. Such adoption did
         not have a material effect on the Company's consolidated financial
         position or results of operations. The Emerging Issues Task Force
         (EITF) of the FASB reached a consensus on EITF Issue 00-2, "Accounting
         for Web Site Development Costs." This consensus provides guidance on
         what types of costs incurred to develop Web sites should be capitalized
         or expensed. The Company adopted this consensus on April 1, 2000. Such
         adoption did not have a material effect on the Company's consolidated
         financial position or results of operations.

         In December 1999, the Securities and Exchange Commission ("SEC") issued
         Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
         Financial Statements." SAB 101 summarizes certain of the SEC's views in
         applying generally accepted accounting principles to revenue
         recognition in financial statements. In June 2000, the SEC issued SAB
         No. 101B to defer the effective date of implementation of SAB 101. The
         Company adopted SAB 101 in the fourth quarter of fiscal 2000. The
         adoption of SAB 101 did not have a material effect on its financial
         position or results of operations.

3.       GOING CONCERN - UNCERTAINTY

         As shown in the accompanying consolidated financial statements, the
         Company has incurred recurring operating losses and negative cash flows
         from operating activities. These conditions raise substantial doubt
         about the Company's ability to continue as a going concern.

                                     F-11

<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

3.       GOING CONCERN - UNCERTAINTY (Cont'd)

         The Company has initiated several actions to generate working capital
         and improve operating performances, including equity and debt financing
         and has instituted cost reduction measures.

         There can be no assurance that the Company will be able to successfully
         implement its plans, or if such plans are successfully implemented,
         that the Company will achieve its goals.

         The accompanying consolidated financial statements have been prepared
         assuming that the Company will continue as a going concern and do not
         include any adjustments to reflect the possible future effects on the
         recoverability and classification of assets or the amounts and
         classification of liabilities that might result from the outcome of
         this uncertainty.

4.       PROPERTY AND EQUIPMENT



         Leasehold Improvements                  $    242,411
         Computer equipment and software              131,257
         Office furniture and equipment                96,029
                                               ---------------

                                                      469,697
         Less accumulated depreciation                (53,400)
                                               ---------------

                                                 $    416,297
                                               ===============

         Computer equipment and software subject to capital leases at March 31,
         2001, included above, is $68,358. Related accumulated depreciation is
         $23,195.

5.       COMMON STOCK

         Year Ended March 31, 2000

         In April 1999, the Company paid the outstanding balance due under a
         $150,000 promissory note entered into in May 1998 due to a group of
         investors, including MediaVest, Inc., a company controlled by a
         shareholder and director of the Company, through the issuance of
         101,090 shares of common stock and $45,000 in cash. MediaVest, Inc. was
         repaid in cash. The fair market value of the common stock was $7 at the
         date of extinguishments. The restricted common stock could not be sold
         for a 12 month period from the date of issuance and after that can only
         be sold in accordance with Rule 144 or other applicable exemption. Due
         to these


                                     F-12

<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

5.       COMMON STOCK (Cont'd)

         restrictions, the Company discounted the fair value of the Company's
         common stock at the date of extinguishments by 25%. An extraordinary
         loss of $468,223 was recorded in the statement of operations for the
         year ended March 31, 2000 representing the difference between the
         discounted fair market value of the common stock issued and the
         carrying amount of the note extinguished.

         In April 1999, the Company issued 748,500 shares of its common stock
         associated with the March 1999 exercise of 748,500 warrants.

         In May 1999, the Company paid the outstanding balance due to various
         vendors through the issuance of 6,000 shares of common stock. The fair
         market value of the common stock was $7.50 at the date of
         extinguishment. The restricted common stock cannot be sold for a
         12-month period from the date of issuance and after that can only be
         sold in accordance with Rule 144 or other applicable exemption. Due to
         these restrictions, the Company discounted the fair value of the
         Company's common stock at the date of extinguishment by 25%. An
         extraordinary loss of $25,715 was recorded in the statement of
         operations for the year ended March 31, 2000 representing the
         difference between the discounted fair market value of the common stock
         issued and the carrying amount of the accounts payable extinguished.

         In June 1999, two of the Company's shareholders/directors forgave
         $37,412 in notes payable and other liabilities due from the Company.
         This was treated as a capital contribution and resulted in an increase
         of $37,412 in additional paid-in capital.

         In November 1999, the Company authorized the issuance of 205,000 Common
         Stock Purchase Warrants in connection with the note payable of
         $410,000. The Warrants are exercisable at any time on or before
         September 30, 2000 at a price equal to the lower of either $6 per share
         of common stock or the most recent issue price of World Diagnostics,
         Inc.'s common stock prior to March 31, 2000. The Warrants do not have
         registration rights or other conditions. The proceeds from the issuance
         of the notes payable with the warrants, were allocated between the
         warrants and the notes payable based on their relative fair values at
         the time of issuance. The amount allocable to the warrants was
         $260,350, as calculated using the Black-Scholes Pricing Model, and was
         accounted for as additional paid-in capital. The difference between the
         amount allocable to the warrants and the proceeds received from the
         issuance of the warrants was $239,850 and was accounted for as a debt
         discount, which was amortized to interest expense.

         In March 2000, the Company authorized the issuance of 8,199 shares of
         common stock (including 1,000 shares to parties related to a member
         of the Board of Directors) to extend the due date of the $410,000
         note to May 31, 2000.  The fair market value of the common stock
         was $11 per share at the date of extension.  The


                                     F-13

<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

5.       COMMON STOCK (Cont'd)

         common stock is restricted and can only be sold in accordance with Rule
         144 or other applicable exemption. Due to these restrictions, the
         Company discounted the fair value of the Company's common stock at the
         date of extension by 25%. The Company recorded $67,642 as a loss due to
         extension of debt at March 31, 2000.

         During the year ended March 31, 2000, the Company issued 15,500 shares
         of its common stock to various non-employee consultants for past
         services rendered. Pursuant to the application of SFAS No. 123 in
         accounting for the issuance of stock to non-employee consultants, the
         Company recorded expense based on the fair market value of the shares
         issued since the fair value of the shares is more reliably measurable.
         The restricted common stock cannot be sold for a 12-month period from
         the date of issuance and after that can only be sold in accordance with
         Rule 144 or other applicable exemption. Due to these restrictions, the
         Company discounted the fair value of the Company's common stock at the
         date of issuance by 25%. Due to the issuance of the shares, the Company
         recorded $92,046 in selling, general and administrative expenses in the
         statement of operations for the year ended March 31, 2000.

         Year Ended March 31, 2001

         In June 2000, the Company completed a private placement of $500,000,
         consisting of 71,440 shares of the Company's common stock priced at $7
         per share and warrants, exercisable at $7 or exchangeable, without
         additional cash consideration but subject to certain performance
         contingencies being met, for an additional 71,440 shares of the
         Company's common stock.

         The Company issued 16,000 shares of common stock to non-employees for
         past services rendered; 55,000 shares for services in connection with a
         private placement and 2,500 shares to a Director of the Company.
         Pursuant to the application of SFAS No. 123 in accounting for the
         issuance of stock to employee and non-employee consultants, the Company
         recorded expense based on the fair market value of the shares issued
         since the fair value of the shares is more reliably measurable. The
         restricted common stock cannot be sold for a 12-month period from the
         date of issuance and after that can only be sold in accordance with
         Rule 144 or other applicable exemption. Due to these restrictions, the
         Company discounted the fair value of the Company's common stock at the
         date of issuance by 25%. Due to the issuance of the shares, the Company
         recorded $62,740 in selling, general and administrative expenses in the
         statement of operations for the year ended March 31, 2001.



                                     F-14

<PAGE>


World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

5.       COMMON STOCK (Cont'd)

         The Company issued 10,000 shares of common stock to an employee for
         past services rendered. Pursuant to the application of SFAS No. 123 in
         accounting for the issuance of stock to employee and non-employee
         consultants, the Company recorded expense based on the fair market
         value of the shares issued since the fair value of the shares is more
         reliably measurable. The restricted common stock cannot be sold for a
         12-month period from the date of issuance and after that can only be
         sold in accordance with Rule 144 or other applicable exemption. Due to
         these restrictions, the Company discounted the fair value of the
         Company's common stock at the date of issuance by 25%. Due to the
         issuance of the shares, the Company recorded $13,100 in selling,
         general and administrative expenses in the statement of operations for
         the year ended March 31, 2001.

         In June 2000, the Company issued 182,799 shares of common stock to
         convert $285,000 of 6% unsecured notes payable and 8,199 shares of
         common stock originally authorized for issuance in March 2000 to extend
         the due date of the $410,000 note to May 31, 2000. In exchange for the
         shares, the note holders waived all accrued interest and exchanged all
         outstanding common stock purchase warrants issued in conjunction with
         the debt. The Company recognized an extraordinary loss of $89,415 from
         the conversion. The remaining balance of $125,000 of the 6% unsecured
         notes payable was repaid in June 2000, of which $25,000 was to a party
         related to a member of the Board of Directors.

         In December 2000, the Company issued 205,915 shares of common stock to
         convert $190,000 of 10% promissory notes payable. In exchange for the
         shares, the note holders waived all accrued interest. The Company
         recognized an extraordinary gain of $35,564 from the conversion.
         Options to acquire 21,000 shares of common stock were issued as part of
         the conversion of the $190,000 promissory note. These options are
         exercisable at $1 per share and expire on September 30, 2003.The fair
         value of the options on the grant date was $25,673 calculated using the
         Black-Scholes Option Pricing Model.

         In August 2000, the Company received $100,000 through an exchange
         agreement with each participant in the private placement, with early
         exchange of the 71,440 warrants for 71,440 shares of the Company's
         common stock and the issuance of 100,000 shares of the Company's common
         stock priced at $1 per share.

         In November and December 2000 the Company closed upon a private
         placement of $2,250,000, consisting of 45 Units priced at $50,000
         per Units, each consisting of (i) 50,000 shares of the Company's
         Common Stock, par value $.001 per share (ii) 50,000 "A" Warrants to
         Purchase Common Stock at $1.375 per shares, and (iii) 50,000 "B"
         Warrants to Purchase Common Stock at $1.625 per share. The

                                     F-15

<PAGE>


World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

5.       COMMON STOCK (Cont'd)

         $2,250,000 private placement was completed by December 31, 2000. Under
         the subscription documents, the Company was required to register the
         Common Stock, the A Warrants, the B Warrants and the Common Stock for
         which the warrants may be exercised. The A Warrants and the B Warrants
         are generally exercisable for a period of five (5) years. However, the
         A Warrants are redeemable by the Company, at $.10 per Warrant, if not
         otherwise exercised by the warrant holder.

         Options to acquire 22,500 shares at $1 per share were issued for
         services in connection with the private placement expiring on November
         2, 2003. The fair value of the options on the grant date was $17,430
         calculated using the Black-Scholes Option Pricing Model.

         In November 2000, the Company issued warrants to acquire 4,000 shares
         of common stock at $3.50 per share expiring on November 1, 2003. The
         fair value of the warrants on the grant date was $1,816 calculated
         using the Black-Scholes Option Pricing Model.

         In December 2000, as an inducement to join our Board of Directors, the
         Company granted a director at a cost of $500 the right to purchase
         warrants to purchase 10,000 shares of common stock at an exercise price
         of $1 per share expiring on December 31, 2003. The fair value of the
         warrants on the grant date was $8,231 calculated using the
         Black-Scholes Option Pricing Model.

         In December 2000, the Company issued options to acquire 15,000 shares
         at $1 per share expiring on December 31, 2003. The fair value of the
         options on the grant date was $7,103 calculated using the Black-Scholes
         Option Pricing Model.

         In December 2000, the Company issued warrants to acquire 10,784 shares
         of common stock at $1 per share expiring on December 1, 2003. The fair
         value of the warrants on the grant date was $8,877 calculated using the
         Black-Scholes Option Pricing Model.

         In December 2000, the Company issued warrants to acquire 4,000 shares
         of common stock at $3.50 per share expiring on December 1, 2003. The
         fair value of the warrants on the grant date was $1,619 calculated
         using the Black-Scholes Option Pricing Model.


                                     F-16
<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

5.       COMMON STOCK (Cont'd)

         In December 2000, the Company issued warrants to acquire 1,000 shares
         of common stock at $2 per share expiring on October 3, 2003. The fair
         value of the warrants on the grant date was $667 calculated using the
         Black-Scholes Option Pricing Model.

         In December 2000, the Company issued warrants to acquire 12,000 shares
         of common stock at $3.50 per share expiring on December 1, 2003. The
         fair value of the options on the grant date was $6,528 calculated using
         the Black-Scholes Option Pricing Model.

         In December 2000, the Company issued options to acquire 15,000 shares
         of common stock at $1 per share expiring on July 31, 2001. The fair
         value of the options on the grant date was $18,560 calculated using the
         Black-Scholes Option Pricing Model.

         In January 2001, the Company issued warrants to acquire 4,000 shares of
         common stock at $3.50 per share expiring on January 1, 2004. The fair
         value of the warrants on the grant date was $967 calculated using the
         Black-Scholes Option Pricing Model.

         The Company has offered the right to purchase warrants to acquire
         98,500 shares of common stock. As of March 31, 2001, no rights to
         purchase warrants have been exercised.

         In January 2001, the Company filed a registration statement with the
         Securities and Exchange Commission to register:

            * 3,206,760 shares of common stock,
            * 2,250,000 Class A Warrants, at an exercise price of $1.375 per
              share,
            * 2,250,000 Class B Warrants, at an exercise price of $1.625 per
              share, and
            * 4,500,000 shares issuable upon the exercise of all 4,500,000
              Class A and Class B Warrants



                                     F-17

<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

6.       STOCK BASED COMPENSATION

         In October 2000, the Company issued options to acquire 296,000 shares
         of common stock to employees of the Company. These options are
         exercisable at $1.22 per share, the market price on the date of grant
         and vest over a three-year period commencing October 2001. The options
         expire in October 2005. The fair value of the options on the grant date
         was $255,554 calculated using the Black-Scholes Option Pricing Model.

          The Company applies Accounting Principles Board Opinion No. 25,
         "Accounting for Stock Issued to Employees," in accounting for
         stock-based employee compensation arrangements whereby no compensation
         cost related to stock options is deducted in determining net loss. Had
         compensation cost for stock option grants to the Company's employees
         been determined pursuant to SFAS No. 123, "Accounting for Stock-Based
         Compensation," the Company's net loss would have increased for the year
         ended March 31, 2001 as presented in the table below. Using the
         Black-Scholes option pricing model, the Company's pro forma net loss
         and pro forma net loss per share, with related assumptions, are as
         follows:


                                                               For the Year
                                                           Ended March 31, 2001

                 Proforma Net Loss                            ($2,005,653)
                 Proforma Loss Per Share                           ($0.36)
                 Risk Free interest rate                             5.81%
                 Expected lives                                    5 years
                 Expected volatility                                85.47%

         For purposes of these proforma disclosures, the estimated fair value of
         the options granted is amortized to expense over the options' vesting
         period.





                                     F-18



<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

7.       LEASES

         The Company leases office facilities under an operating lease and
         equipment under long-term capital leases. At March 31, 2001, future
         minimum lease payments under capital and operating leases are as
         follows:

                                            Capital             Operating
                                             Leases               Leases
                                       ------------------------------------

              2002                    $      26,051        $    101,784
              2003                           15,757             104,458
              2004                            5,817             108,042
              2005                            1,947             111,733
              2006                              -               115,535
           Thereafter                           -               638,818
                                       ------------------   ---------------

         Total minimum lease payments        49,572        $  1,180,370
                                                           ================

         Less amount representing
         interest ranging
         from 7% to 18%                      (5,574)
                                       ------------------

         Present value of net minimum
         lease payments                      43,998

         Less current portion               (22,152)
                                       ------------------

         Long-term obligations        $      21,846
                                       ==================



         Rent expense was approximately $75,000 and $46,000 for the year ended
         March 31, 2001 and 2000, respectively.

         The Company was given a tenant improvement allowance of $150,000 which
         was accounted for as deferred rent and is being amortized straight line
         over the term of the lease of 10 years.


                                     F-19

<PAGE>

World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

8.       DEFERRED INCOME TAXES

         At March 31, 2001, the Company has available net operating loss
         carryforwards of $3,983,000 which will expire through 2018.

         After consideration of all the evidence, both positive and negative,
         management has determined that a valuation allowance is necessary to
         reduce the deferred tax assets to the amount that will more likely than
         not be realized due to substantial uncertainty.

         Accordingly, components of the Company's net deferred income taxes at
         March 31, 2001 are as follows:


                                                March 31,
                                                  2001
                                                ---------

         Deferred tax assets:

         Net operating loss carryforwards      $1,354,000
         Valuation allowance                   (1,354,000)
                                               ----------
         Total                                 $      -
                                               ==========


       The benefit for income taxes differs from the amount computed by applying
       the statutory federal income tax rate to net loss due to the following:

<TABLE>
<CAPTION>



                                                              2001                    2000
                                                      --------------------    --------------------
         <S>                                          <C>                    <C>
         Income tax provision statutory rate             $     (668,647)         $     (578,619)
         State income tax, net of Federal benefit              (108,164)                (93,600)
         Change in valuation allowance                          650,000                 435,091
         Debt extinguishment expense                             21,271                 195,106
         Other                                                  105,540                  42,022
                                                      --------------------    --------------------
                                                         $            _          $            -
                                                      ====================    ====================

</TABLE>


                                     F-20
<PAGE>


World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

9.       CONCENTRATION OF CREDIT RISK

         Financial instruments, which potentially subject the Company to
         significant concentrations of credit risk, consist principally of cash
         and trade accounts receivable.

         The Company places its cash with high quality financial institutions
         and believes that the risk of loss is remote.

         The Company extends credit to its customers based upon an evaluation of
         the customer's financial condition and credit history and generally
         does not require collateral. Historically, actual losses have been
         within management's estimates.

         One customer accounted for 12% and 14% of sales for the periods ended
         March 31, 2001 and March 31, 2000, respectively. This same customer had
         an accounts receivable balance of $75,466 at March 31, 2001.

         Another customer, controlled by a director and shareholder of the
         Company, accounted for approximately 7% and 8% of sales for the periods
         ended March 31, 2001 and March 31, 2000 respectively. The accounts
         receivable from this customer was $18,497 at March 31, 2001.

         Purchases from one supplier represented 15% and 7% of purchases for the
         periods ended March 31, 2001 and 2000, respectively. This same supplier
         was owed $71,389 at March 31, 2001.





                                     F-21


<PAGE>


World Diagnostics, Inc. and Subsidiary
Notes to Consolidated Financial Statements

10.      GEOGRAPHIC AND PRODUCT GROUP INFORMATION

         The following table details revenue breakdown by geographic region (in
         000's) for the year ended March 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                                 for the year ended
                                                    March 31, 2001                March 31, 2000
                                              ----------------------------------------------------------
         <S>                                  <C>                         <C>
         South America                         $            841           $             526
         Caribbean                                          517                         433
         Middle East and Africa                             321                          43
         Eastern Europe                                     247                         135
         Domestic                                            92                         114
         Pacific Rim                                         87                          92
         Western Europe                                      52                          79
         Central America                                     47                          41
                                              ----------------------------------------------------------
                     Total Revenue             $          2,204            $          1,463
                                              ==========================================================

</TABLE>

         As of March 31, 2001, the Company has one reportable segment. The Chief
         Operating Decision Maker examines all financial information on a
         combined basis.

         The following table details revenue breakdown by product group (in
         000's) for the year ended March 31, 2001 and 2000:
<TABLE>
<CAPTION>

                                                             for the year ended
                                                                   March 31,
                                                           2001                 2000
                                                   ------------------------------------------
         <S>                                             <C>                <C>
         Qualitative Rapid Point
         of care Diagnostic Tests                       $   779              $    439

         Clinical Chemistry Reagents                        363                   274

         Quantitative Laboratory Tests                      332                   287

         Urine & Latex Agglutination Tests                  308                   185

         Laboratory Equipment                               289                   169

         Miscellaneous Laboratory Supplies                  133                   109
                                                   ------------------------------------------
                       Total Revenue                    $ 2,204              $  1,463
                                                   ==========================================
</TABLE>


                                     F-22