SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

      For Quarter Ended September 30, 1998.....Commission File Number 1-155

                            FIRST MEDICAL GROUP, INC.

             (Exact name of Registrant as specified in its charter)

          Delaware                                              13-1920670
--------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S. Employer
Incorporation or Organization)                              Identification No.)

1055 Washington Boulevard, Stamford, CT                                 06901
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code               (203)327-0900
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
              Former name, former address and former fiscal year,
                          if changed since last report

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days.

                                                       YES   X        NO
                                                          --------       ------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

       Class                             Outstanding At November 11,1998
--------------------------------------------------------------------------------
Common Stock, par value                              9,567,292


<PAGE>
                   FIRST MEDICAL GROUP, INC. AND SUBSIDIARIES

                                      INDEX

                                                                          Page
                                                                         Number
                                                                         ------

PART I.          FINANCIAL INFORMATION

  Item 1.   Financial Statements

            Consolidated Statements of Operations -
            Nine Months Ended September 30, 1998 and 1997..................1

            Consolidated Balance Sheets -

            September  30, 1998 and December 31, .1997.....................2

            Consolidated Statement of Changes in
            Shareholder's Equity (Deficit)-

            Nine Months Ended September  30, 1998 and 1997.................3

            Condensed Consolidated Statements of Cash Flows -
            Nine Months Ended September  30, 1998 and 1997.................4

            Notes to Consolidated Financial Statements...................5-7

Item 2.     Management's Discussion and Analysis of

            Financial Condition and Results of Operations...............8-10

PART II.    OTHER INFORMATION

  Item 1.   Legal Proceedings.............................................11

  Item 3.   Defaults upon Senior Securities...............................11

  Item 5.   Other Information..........................................11-12

  Item 6.   Exhibits and Reports on Form 8-K..............................12


<PAGE>
PART 1 - FINANCIAL INFORMATION
FIRST MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                                   SEPTEMBER 30,                SEPTEMBER 30,
                                                                                 1998         1997            1998         1997
                                                                                 ----         ----            ----         ----
<S>                                                                           <C>           <C>           <C>           <C>        
Revenue:
  Fee for service and related revenue                                         $ 2,788,794   $ 2,304,082   $ 8,253,777   $ 6,726,784
                                                                              -----------   -----------   -----------   -----------
      Total revenue                                                             2,788,794     2,304,082     8,253,777     6,726,784
Medical expenses                                                                2,384,466     1,953,786     7,030,115     5,422,554
                                                                              -----------   -----------   -----------   -----------
          Income from operations                                                  404,328       350,296     1,223,662     1,304,230
Operating expenses:
  Salaries and related benefits                                                   143,827        72,564       549,993       499,988
  General and administrative                                                      248,137       141,773       777,943       591,470
  Depreciation and amortization                                                   136,762        97,603       152,023       192,581
                                                                              -----------   -----------   -----------   -----------
      Total operating expenses                                                    528,726       311,940     1,479,959     1,284,039
Operating income (loss)                                                          (124,398)       38,356      (256,297)       20,191
Impairment loss on intangible assets                                                 --            --      (2,014,168)         --
Interest income (expense),net                                                      15,129       (67,150)      (36,949)     (132,101)
                                                                              -----------   -----------   -----------   -----------
(Loss) before taxes, write-off of debentures and discontinued                    (109,269)      (28,794)   (2,307,414)     (111,910)
              operations
Provision for income taxes                                                         60,498          --         387,251          --
                                                                              -----------   -----------   -----------   -----------
Net (loss) before discontinued operations and write-off of                       (169,767)      (28,794)   (2,694,665)     (111,910)
              debentures
Write-off of debentures and accrued interest                                         --            --       1,218,537          --

Discontinued operations:

     (Loss) from discontinued operations                                             (626)       30,736    (1,982,864)   (2,156,696)
      Gain on sale of discontinued operations                                     976,488          --       4,645,879          --
                                                                              -----------   -----------   -----------   -----------
Total income (loss) from discontinued operations                                  975,862        30,736     2,663,015    (2,156,696)
     Net income (loss)                                                        $   806,095   $     1,942   $ 1,186,887   $(2,268,606)
(Loss)  per share before write-off and discontinued operations                $     (0.02)  $     (0.00)  $     (0.28)  $     (0.01)
Earnings (loss) per share from  write-off and discontinued operations         $      0.10   $      0.00   $      0.41   $     (0.24)
Earnings (loss)  per share                                                    $      0.08   $      0.00   $      0.13   $     (0.25)
Weighted average number of common shares
    outstanding                                                                 9,567,292     9,360,520     9,454,581     9,135,682
</TABLE>


See accompanying notes to consolidated financial statements.


                                       1
<PAGE>
FIRST MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                            SEPTEMBER 30,           DECEMBER 31,
               ASSETS                                                           1998                   1997
               ------                                                           ----                   ----

<S>                                                                          <C>                    <C>        
Current assets:

  Cash and cash equivalents                                                  $ 1,089,136            $ 1,421,250
  Other receivables                                                              751,962                 98,332
  Due from related parties                                                          --                1,139,760
  Inventories                                                                    129,259                   --
  Prepaid expenses and other current assets                                      141,480                 50,406
                                                                             -----------            -----------

     Total current assets                                                      2,111,837              2,709,748


Property and equipment, net                                                      583,056                170,281
Intangible assets,net                                                            805,703              2,014,169
Other assets                                                                     463,617                248,386
                                                                             -----------            -----------
     Total                                                                   $ 3,964,213            $ 5,142,584

  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:

  Accounts payable                                                               737,825                278,497
  Accrued expenses                                                               826,185              1,164,093
  Corporate deposits                                                             652,261                731,372
  Loans payable to banks                                                            --                3,217,812
  Net liabilities pertaining to discontinued operations                        1,444,776                804,531
                                                                             -----------            -----------
     Total current liabilities                                                 3,661,047              6,196,305

Commitments and contingencies

Shareholders' equity (deficit):

  Capital stock,par value $.001;authorized shares 100,000,000                      9,567                  9,397
  Additional paid in capital                                                   8,253,318              8,083,488
  Retained deficit                                                            (7,959,719)            (9,146,606)
                                                                             -----------            -----------
     Total shareholders' equity (deficit)                                        303,166             (1,053,721)
                                                                             -----------            -----------

     Total                                                                   $ 3,964,213            $ 5,142,584
</TABLE>


See accompanying notes to consolidated financial statements.

                                        2


<PAGE>
FIRST MEDICAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                             ADDITIONAL         RETAINED             TOTAL
                                                            COMMON            PAID-IN           EARNINGS         SHAREHOLDERS'
                                                            STOCK             CAPITAL           (DEFICIT)            EQUITY
                                                            -----             -------           ---------            ------
                         
<S>                                                    <C>                <C>                <C>                 <C>        
Balance, January 1, 1997                               $       100        $   379,685        $   323,712         $   703,497

Issuance of stock to FMG shareheolders                      23,247          2,255,911                              2,279,158

Capital contribution to FMG                                                 5,000,000                              5,000,000

Capital contribution to FMG subsidiary                                        164,954                                164,954

Net loss                                                      --                 --           (2,268,606)         (2,268,606)
                                                       -----------        -----------        -----------         -----------

Balance, September 30, 1997                            $    23,347        $ 7,800,550        $(1,944,894)        $ 5,879,003


Balance, January 1, 1998                               $     9,397        $ 8,083,488        $(9,146,606)        $(1,053,721)

Issuance of 170,000 shares                                     170            169,830                                170,000

Net income                                                    --                 --            1,186,887           1,186,887
                                                       -----------        -----------        -----------         -----------

Balance, September 30, 1998                            $     9,567        $ 8,253,318        $(7,959,719)        $   303,166
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
FIRST MEDICAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>
                                                            1998                  1997
                                                            ----                  ----

<S>                                                         <C>                   <C> 
Net income (loss)                                        $ 1,186,887          $ (2,268,606)

Add:  Depreciation and amortization                          152,023               192,581

         Loss on impairment of intangibles                 2,014,169                     -

         Proceeds of loan payable to banks                         -             2,489,733

         Issuance of common stock                            170,000             2,279,158

         Capital contribution to FMG and subsidiary                -             5,164,954

         Increase (decrease) in net liabilities relating
             to discontinued operations                      640,245               (22,073)

Less: Net assets acquired in AMC CIS, exclusive of cash     (363,549)                    -

         Increase in intangible assets                      (848,108)           (4,673,594)

         Repayment of loan payable to banks               (3,217,812)                    -

         Other changes in assets and liabilities             (65,969)             (189,370)
                                                             --------             ---------
Increase (decrease) in cash and cash equivalents            (332,114)            2,972,783
Cash and cash equivalents, beginning of the year           1,421,250               124,314
                                                           ----------              -------

Cash and cash equivalents, end of the period             $ 1,089,136           $ 3,097,097
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

FIRST MEDICAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

The financial  information  for the three months and nine months ended September
30, 1998 and 1997 is  unaudited.  The balance  sheet as of December 31, 1997 and
the income  statement  for the three months and nine months ended  September 30,
1997 has been  reclassified to reflect the managed care and HallMark  Electrical
Supplies Corp. ("HallMark") operations as discontinued operations.  However, the
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which are, in the opinion of  management,  necessary  for the fair
statement of results for the interim periods.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted.  These consolidated  financial statements should
be read in conjunction  with the consolidated  financial  statements and related
notes included in First Medical Group,  Inc.'s ("the Company") December 31, 1997
Report on Form-10K.

The  results  of  operations  for the three  month and nine month  period  ended
September 30, 1998 are not necessarily  indicative of the results to be expected
for the full year.

Earnings  (loss) per common share is calculated by dividing net income (loss) by
weighted average number of common shares and share equivalents outstanding.  For
the periods  presented,  there were no common stock equivalents  included in the
calculation, since they would be anti-dilutive.

2.       DISCONTINUED OPERATIONS

On April  14 and 15,  1998  the  Company  through  certain  of its  wholly-owned
subsidiaries  completed  the sale of its Florida  managed care  operations.  The
total  sales price was  approximately  $6.75  million for certain  assets of the
Company.

On April 17, 1998, the Company sold HallMark which was a wholly-owned subsidiary
of the  Company to a certain  member of  management  of the  Company and certain
members of management  of HallMark for a total sales price of $1.9 million.  The
purchase  price of $1.9 million  represented  a cash payment of $750,000 and the
assumption of $1.15 million of liabilities  and a covenant not to compete by the
member of the management of the Company.

On July 8, 1998 the Company through its wholly-owned  subsidiary,  First Medical
Corporation,  Inc.  sold all of its Indiana  operations  and its  contract  with
Humana Health Plan,  Inc.  ("Humana")  to provide  managed care to MCO, LLC. The
total sales price was $ 727,378.  The  proceeds of the sale were used to pay off
the  existing  loan with Devon Bank in the amount of $377,378  and  $350,000 was
applied to amounts owed to Humana.

                                       5.


<PAGE>

On July 16, 1998,  First Medical  Corporation-Texas  Division sold its assets to
Durham  Physicians Group for $90,000 and the assumption of certain  liabilities.
The note is to be paid in 36 equal installments  beginning July 1, 1999, bearing
interest per annum compounded annually. First Medical Corporation-Texas Division
and Durham Physicians Group, P.A. also terminated their Full Service  Management
Agreement.

As a result of these transactions, the Company recorded a gain on these sales of
approximately  $ 976,000  and is  reflected  in the  consolidated  statement  of
operations for the three months ended September 30, 1998.

CONDENSED FINANCIAL STATEMENTS-DISCONTINUED OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS):

CONDENSED INCOME STATEMENTS

                                          MANAGED CARE    HALLMARK      TOTAL
                                          ------------    --------      -----

Revenues                                    $ 15,514      $  4,090     $ 19,604

Medical Cost/Cost
          of Sales                            15,289         2,850       18,139
                                            --------      --------     --------

Income from operations                           225         1,240        1,465

Income (loss) from
  discontinued operations                  $   (2086)     $    103      $ (1983)


CONDENSED BALANCE SHEET

                                              MANAGED CARE
                                              ------------

Current assets                                $      5,584


Current liabilities                                  7,029
                                              ------------
Net liabilities pertaining

to discontinued operations                    $     (1,445)



                                       6.


<PAGE>

3.       WRITE-OFF OF DEBENTURES AND ACCRUED INTEREST

During the nine months ended  September 30, 1998, the Company  elected to record
the  write-off of the 13 1/2% Senior  Subordinated  Debenture  notes and 14 7/8%
Subordinated  Debentures  aggregating  $390,000 and the related accrued interest
payable  of $  828,537.  These  notes  were not  surrendered  to the  Company in
connection  with  The  Lehigh  Group  Inc.  financial   restructuring  that  was
consummated  in  1991.  Included  in the  Company's  consolidated  statement  of
operations for the nine months ended September 30, 1998, is income  amounting to
$ 1,218,537  relating to the write-off of these  debentures and accrued interest
payable.

4.       REORGANIZATION AGREEMENT-AMC CIS

Pursuant to a  reorganization  agreement,  effective  July 1, 1998, the American
Medical Clinics  Management  Company,  Ltd., a wholly-owned  subsidiary of First
Medical Group International, Ltd., which in turn is a wholly-owned subsidiary of
the Company,  acquired the stock of American  Medical Clinics  Moscow,  Inc. and
American  Medical Center- St.  Petersburg Ltd. ("AMC CIS").  The transaction was
accounted  for  under the  purchase  method of  accounting.  The total  purchase
consideration was approximately $1.3 million and is comprised of the forgiveness
of indebtedness of that amount to American Medical Clinics  Management  Company,
Inc. ("AMCMC"), a wholly-owned subsidiary of the Company, by AMC CIS. The excess
of this  amount  over the fair  value of net  assets  of AMC CIS  amounted  to $
848,000 and is amortized on a straight-line  basis over the expected  periods to
be  benefited,  5 years.  Prior to the  reorganization  agreement,  AMCMC  had a
management  service agreement with AMC CIS whereby AMC CIS would provide medical
services to AMCMC  customers.  The operating  results of AMC CIS is reflected in
the  consolidated  statement of operations for the three months ended  September
30, 1998.

5.          SUPPLEMENTARY SCHEDULE

                                             1998            1997
                                                (IN THOUSANDS)
                                                --------------

  Cash paid during the nine months ended 
  September 30, for:
  Interest                                    $  37           $ 132
  Income taxes                                  387              -



                                       7.


<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATION

RESULTS OF OPERATIONS
THIRD QUARTER OF 1998 IN COMPARISION
WITH THIRD QUARTER OF 1997

        REVENUE.  Total  revenue  of the  Company  for the  three  months  ended
September 30, 1998 and 1997 was $2.8 million and $2.3 million,  respectively, an
increase of 21%, due mainly to the opening of two new clinics in Eastern  Europe
in the  latter  half of 1996 as well as  increased  patient  visits in  existing
facilities.

        MEDICAL  EXPENSE.  Medical  expense for the three months ended September
30,  1998 and 1997 was $2.4  million  and $2.0  million,  respectively.  Medical
expense as a percentage of revenue, was 85% for the three months ended September
30, 1998 and 1997, respectively.

        OPERATING  EXPENSES.  Operating  expenses for the Company were $ 529,000
during the three  months  ended  September  30,  1998 as compared to $312,000 in
1997. Operating expenses as a percent of revenue were 19% and 14%, respectively,
in 1998 and 1997.

        LOSS/INCOME FROM  DISCONTINUED  OPERATIONS.  The loss from  discontinued
operations  for the three months ended  September 30, 1998 was  approximately  $
1,000 as compared to income of approximately  $31,000 for the first three months
ended September 30, 1997. The gain on sale of discontinued operations during the
three months ended June 30, 1998 was approximately $ 976,000.

        NET INCOME. Net income for the three months ended September 30, 1998 was
$ 806,000 as compared to $ 2,000 in the third quarter of 1997.

RESULTS OF OPERATIONS
FIRST NINE MONTHS OF 1998 IN COMPARISION
WITH FIRST NINE MONTHS OF 1997

        REVENUE.  Total  revenue  of the  Company  for  the  nine  months  ended
September  30, 1998 and 1997 was $ 8.3 million and $ 6.7 million,  respectively,
an  increase  of 23%,  due mainly to the  opening of two new  clinics in Eastern
Europe in the later half of 1996 as well as increased patient visits in existing
facilities.

        MEDICAL EXPENSE. Medical expense for the nine months ended September 30,
1998 and 1997 was $ 7.0 million and $5.4 million, respectively.  Medical expense
as a percentage of revenue,  was 85% and 81% for the nine months ended September
30, 1998 and 1997, respectively.

                                       8.
<PAGE>


        OPERATING  EXPENSES.  Operating  expenses  for  the  Company  were $ 1.5
million  during the nine months  ended  September  30, 1998 as compared to $ 1.3
million in 1997.  Operating  expenses as a percent of revenue  were 18% and 19%,
respectively, in 1998 and 1997.

        IMPAIRMENT  LOSS ON INTANGIBLE  ASSETS.  The Company  recorded a loss on
impairment of intangible  assets during the nine months ended September 30, 1998
of $ 2,014,168.

        WRITE-OFF OF DEBENTURES AND ACCRUED INTEREST  PAYABLE.  The write-off of
debentures and accrued  interest  payable during the nine months ended September
30, 1998 was $ 1,218,537.

        LOSS/INCOME FROM  DISCONTINUED  OPERATIONS.  The loss from  discontinued
operations for the nine months ended September 30, 1998 was  approximately $ 2.0
million as compared to a loss of approximately  $2.2 million for the nine months
ended September 30, 1997. The gain on sale of discontinued operations during the
nine months ended September 30, 1998 was approximately $ 4.7 million.

        NET INCOME  (LOSS).  Net income for the nine months ended  September 30,
1998 was $ 1,187,000  as compared to net loss of $ 2,269,000  in the nine months
ended September 30, 1997.






LIQUIDITY AND CAPITAL RESOURCES

        At September  30, 1998,  the Company had cash of $ 1,089,000 as compared
to $ 1,421,000 at December 31, 1997.

        As of December  31,  1997,  the  Company  had a credit  facility of $2.5
million bearing interest at 1/2% above prime, of which $500,000 is guaranteed by
certain current and former members of the Company.  The Company also borrowed an
additional  $537,000 to purchase  Lehigh  stock in  connection  with the merger.
Proceeds from the sale of the managed care operation in April, 1998 were used to
repay these facilities.

                                       9.
<PAGE>

YEAR 2000

        The company has  conducted a review of its computer  systems to identify
the systems that could be affected by the "Year 2000".  The Year 2000 problem is
the result of computer  programs being written using two digits rather than four
to define the applicable  year. The Company  primarily  utilizes  outside vendor
software   programs  in  its   operations.   The  Company   believes  that  such
modifications  to the  computer  programs  will  not  significantly  impact  the
Company's operations or its ability to conduct business.

                                       10.


<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On or about  September  16, 1998,  The Lehigh  Group,  Inc.,  now known as First
Medical Group,  Inc., was sued along with other  defendants in the United States
District Court of Northern Ohio Western Division ( STICKNEY/TYLER ADMINISTRATIVE
GROUP, ET AL. VS. EARL SCHEIB OF OHIO, INC., ET AL. Case # 3: 98CV7538) pursuant
to the Comprehensive Environmental Response, Compensation and Liability Act. The
plaintiffs  have alleged that the Company is the successor  -in-interest  to the
Hilfinger  Corporation  (a defunct  subsidiary of he Company) and claim that the
Hilfinger  Corporation arranged for the disposal or treatment of waste chemicals
containing hazardous substances or arranged with a transporter for the transport
for  disposal or treatment  of such waste  chemicals  at one or more sites.  The
plaintiffs are seeking damages, jointly and severally, against the defendants in
excess of  $25,000,000.  The  occurrence  was  alleged to have taken place on or
about the 1950s to  approximately  1972.  The Company has put several  insurance
carriers  on notice  of this  matter,  however  no  determination  has been made
regarding whether there is insurance coverage.  The Company has retained counsel
in  Ohio  to  defend  this  claim.  Accordingly,  if this  matter  is  adversely
determined,  it could have a material adverse effect on the Company's  financial
condition.

On or about June 26, 1998,  the Company was sued in the United  States  District
Court Southern District of Florida (CHARLES POSTERNACK AND ARNOLD ROSNER V FIRST
MEDICAL  GROUP,  INC., AS SUCCESSOR IN INTEREST TO FIRST  MEDICAL  CORPORATION -
Case # 98-6632-CIV-HURLEY)  .The plaintiffs claim they are entitled to an amount
in excess of $300,000,  based on a buy-out agreement the plaintiffs entered into
with First  Medical  Corporation  when the  plaintiffs  sold their  interest  in
Dominion Healthnet, Inc., to First Medical Corporation. The Company has retained
counsel  in  Florida  to  defend  this  claim.  Accordingly,  if this  matter is
adversely  determined,  it could have a material adverse effect on the Company's
financial condition.

The Company is involved in other minor  litigation,  none of which is considered
by management to be material to its business or, if adversely determined,  would
have a material adverse effect on the Company's financial condition.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

The Company continues to be in default in the payment of interest (approximately
$829,000.00  interest is past due as of March 31,  1998) on  $390,000  principal
amount of 13-1/2% Notes and 14-7/8% Debentures.

ITEM 5.  OTHER INFORMATION

It On  July  8,  1998,  First  Medical  Group,  Inc.  through  its  wholly-owned
subsidiary,  First  Medical  Corporation,  sold all of the assets of its Indiana
operations  and its contracts with Humana Health Plan,  Inc. to provide  managed
care to MCO, LLC. The total sales price was $727,378.  The proceeds of sale were
used to pay off an existing  loan with Devon Bank in the amount of $377,378  and
$350,000 was applied to money owed to Humana Health Plans, Inc.

                                       11.
<PAGE>

On July 16, 1998, First Medical Corporation - Texas Division, sold its assets to
Durham  Physicians  Group,  P.A.  for  $90,000  to be paid in 36  equal  monthly
installments  beginning July 1, 1999,  bearing 8% interest per annum  compounded
annually.  First  Medical  Corporation  - Texas  Division and Durham  Physicians
Group, P.A. also terminated their Full Service Management Agreement.

Pursuant to a reorganization,  effective July 1, 1998,  American Medical Centers
Management Company Ltd.,  ("AMCMC")  wholly-owns American Medical Clinics Moscow
Inc. and American Medical Center - St. Petersburg Ltd.

AMCMC is a wholly owned  subsidiary of First Medical Group  International  Ltd.,
which in turn is wholly owned by First Medical Group, Inc.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

No reports on form 8-K were filed during the quarter ended September 30, 1998.

                                       12.


<PAGE>

                                   SIGNATURES
                                   ----------

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

                                       FIRST MEDICAL GROUP, INC.


                                       By:   /s/ Dennis A. Sokol
                                          --------------------------------------
                                                 Dennis A. Sokol
                                                 President



        Dated November 13, 1998

                                       13.