<PAGE>

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

                              AMENDED FORM 10-KSB/A

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

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

                     For the period ended December 31, 2000
                         Commission file number 0-24165

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
     --------------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

          NEVADA                                              93-1108124
----------------------------                             -------------------
(State or other jurisdiction                              (I.R.S. Employer
of incorporation or                                      Identification No.)
organization)

 7504 DIPLOMAT DRIVE, SUITE 101, MANASSAS, VA                   20109
---------------------------------------------                ----------
(Address of principal executive offices)                     (Zip Code)

Issuer's Telephone number:   (703) 355-1957
                             --------------

Securities registered pursuant to Section 12(b) of the Act:

   Title of each class                 Name of each exchange on which registered
     Common Stock                                NASDAQ Bulletin Board
   -------------------                 -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, PAR VALUE $0.001 PER SHARE
                    ----------------------------------------
                                (Title of Class)

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 filings requirements for the past 90 days.
Yes [X]     No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405
ofRegulation S-B is not contained in this form, and no disclosure will
becontained, 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 the Form 10-KSB. [ ]

         State issuer's revenues for its most recent fiscal year: $28,243,016

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. There was no market
value for the common stock within the last 60 days.

                                       1

<PAGE>

PART I
--------------------------------------------------------------------------------

ITEM 1.  DESCRIPTION OF BUSINESS

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

(a)      BUSINESS DEVELOPMENT

         Mid-Atlantic Home Health Network, Inc. was originally incorporated
under the laws of the State of Utah on December 28, 1979 as U-Can Resources,
Inc.

         On January 31, 1980, the Company commenced a public offering to
residents of the State of Utah of 7,500,000 shares of its common stock for a
total of $75,000. The public offering was made pursuant to the provisions of the
exemption from registration contained in Section 3(a)(11) of the Securities Act
of 1933, as amended. The Company filed with the Utah Securities Commission of
the State of Utah a Registration Statement under the Utah Uniform Securities Act
with respect to the shares of common stock which were offered. An Offering
Circular was used in connection with the offering, which was an exhibit to the
Registration Statement. The offering was completely sold.

         The Company changed its corporate domicile from Utah to Nevada by
merging with a Nevada corporation, which was effective as of February 24, 1993
in Utah and March 26, 1993 in Nevada. The provisions of the Merger Agreement
required a change of corporate name to Trinity Gas Corporation and a twenty-five
(25) for one (1) reverse split of the Company's common stock.

         On July 8, 1993, the Company changed its name to Petro-Sers Corporation
in order to not be confused with another corporation with a similar name.

         The Company did not conduct any business activities until December
9,1994 when it executed an Exchange Agreement with Oak Springs Nursing
HomeLimited Partnership for the acquisition of all of the outstanding stock of
Hunt Country Home Health, Inc., a Virginia corporation. As a result of this
corporate reorganization, Hunt Country Home Health, Inc. became a wholly owned
subsidiary of the Company.

         The Company changed its name to Mid-Atlantic Home Health Network, Inc.
It authorized two (2) classes of stock. The present authorized capitalization is
200,000,000 shares of Class A common stock and 10,000 shares of Class B common
stock. The common stock of the Company was exchanged on a share-for-share basis
for a share of the Class A common stock, par value one mill ($0.001) per share.
The Class A common stock, voting as a class, elects one-third of the Board of
Directors and the Class B common stock, voting as a class, elects two-thirds of
the Board. The consideration for the acquisition of all of the outstanding stock
of Hunt Country Home Health, Inc. was 20,474,628 shares of Class A common stock
and 10,000 shares of Class B common stock. This transaction was exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, pursuant to the exemption contained in Section 4(2) of that Act.

                                       2

<PAGE>

         Mid-Atlantic is a regionally based home health and nurse staffing
company established to provide quality services and home medical products in a
cost-competitive manner to the Mid- Atlantic region. Since its acquisition of
Hunt Country Nursing Services and National Nurses Service in June of 1995 (See
Business of the Company), the majority of Mid-Atlantic's business has involved
the provision of nursing staff services to hospitals, nursing homes and other
facilities such as clinics, correctional facilities and schools, as well as
private duty nursing services.

         The Company has not been subject to bankruptcy, receivership or any
similar proceedings.

         The Company currently employs approximately 2,600 employees, of which
1,400 are full-time employees. The Company's principal executive office is
located at 7504 Diplomat Drive, Suite 101, Manassas, Virginia 20109. The Company
has administrative offices at the following locations:

         528 Waterloo Road, Suite A-2        1807 Libbie Avenue, Suite 206
         Warrenton, Virginia  20186          Richmond, Virginia 23226

         607B Jefferson Davis Highway        2971 Valley Avenue
         Fredericksburg, Virginia  22401     Winchester, Virginia 22601

         8630 Fenton Street, Suite 200       10760B Ambassador Drive
         Silver Spring, MD 20910             Manassas, Virginia 20109

         10800 Midlothian Turnpike           Teakwood Office Park
         Suites 152 & 154                    1413 Teakwood Dr., Suite D
         Richmond, Virginia 23225            Tappahannock, Virgina 22560

         2731-C Prosperity Avenue, Suite C   4410 Ivy Commons
         Fairfax, Virginia 22031             Charlottesville, Virginia 22903

         101 Juliad Court                    6161 Kempsville Ctr., Suite 205
         Fredericksburg, Virginia 33406      Norfolk, VA  23502

(b)      BUSINESS OF THE ISSUER:

(1)      PRINCIPAL PRODUCTS AND SERVICES AND THEIR MARKETS

THE HOME HEALTH CARE BUSINESS OF THE COMPANY

         Mid-Atlantic is a regionally based home health company established to
provide nurse staffing services and home health and medical products in a
cost-competitive manner to the Mid- Atlantic region. Mid-Atlantic delivers care
to persons in a variety of settings, including private homes, hospitals and
nursing homes. Since its acquisition of Hunt Country Nursing Services and
National Nurses Service (see discussion below), the majority of Mid-Atlantic's
business has involved providing nursing staff for clinics, long-term care
facilities, hospitals and clinics, correctional facilities and schools. Services
are provided to persons of all ages and with all levels of health or health
related needs, varying from high technology interventions to companionship and
services. Mid-Atlantic carefully seeks and hires competent staff who participate
in continuing education programs. All of Mid-Atlantic's health care providers
are licensed and bonded. This assures the Company's dedication to quality,
consistent delivery state-of-the-art services with a caring approach.

                                       3

<PAGE>

         Mid-Atlantic provides medical equipment and supplies and
around-the-clock skilled nursing. Registered nurses, Licensed Practical Nurses
and Vocational Nurses, as well as Physical, Occupational, Speech and Respiratory
Therapists work under the direction of physicians in the setting of personal
homes.

         Mid-Atlantic provides its services through four entities. These
entities are wholly-owned subsidiaries.

HUNT COUNTRY HOME HEALTH

         In the Spring of 1995, the Company acquired Hunt Country Home Health,
Inc. from the Oak Springs Nursing Home Limited Partnership, the Company's
majority shareholder.

         Hunt Country Home Health performs approximately 835 home health visits
per month. With this case load, a wide spectrum of services requiring basic
skills to high tech skills are performed. Generally, the services provided fall
into the following program priorities:

         o        Essential physical care which may require frequent visits
                  including weekends, in the absence of which the patient might
                  otherwise require hospitalization or nursing home care.

         o        Patients in need of intravenous therapy, hyperalimentation,
                  blood transfusions or other intensive skilled nursing
                  modalities.

         o        Patients with open wounds which require dressing changes or
                  irrigations, in addition to frequent skilled assessment for
                  significant infections.

         o        Patients in need of rehabilitation services which can be
                  provided in the home and which can maximize the level of
                  functioning.

         o        In-home patients whose condition has deteriorated and who
                  would otherwise require hospitalization.

         o        Homebound patients in need of blood testing. The home care
                  nurse draws the blood, evaluates the patient and carries out
                  related teaching, which allows the physician to monitor the
                  patient's condition while he remains in the home.

         The Company's home health program provides skilled nursing, physical
therapy, occupational therapy, clinical social work, speech pathology and home
health aide services. These services form the basic framework of the traditional
home health services and disciplines which include skilled nursing for the
assessment, teaching and provision of care, physical therapy for ambulation and
muscle strengthening, occupation therapy for assisting persons to restore
functions in order to perform Activities of Daily Living ("ADL"), home health
aid for personal care and assistance in ADL's, speech therapy for restoration of
communication, and social services for assessment of, and assistance with,
emotional social problems interfering with the plan of care. These services are
provided to any appropriate referral. Visit duration is usually two hours or
less, two to three times per week.

                                       4


<PAGE>

         Most visits are made to patients experiencing heart disease, cancer,
diabetes, AIDS, fractures and strokes or who have wounds that are in need of
care.

         Hunt Country Home Health has a home office located in Manassas,
Virginia and additional offices located in Fredericksburg and Warrenton. In
2000, over 835 home visits provided skilled nursing care, physical therapy,
occupational therapy, speech therapy, home health aide and medical social work.
Visit duration was usually two hours or less, two to three times per week.

CENTER FOR AMBULATORY AND HOME INFUSION SERVICES

         In November of 1999, the durable medical equipment assets of Center for
Ambulatory & Home Infusion Services were transferred to Hunt Country Nursing
Services under the name of Advantage Medical Equipment and Supply. This company
is a "trading as" name to provide predominantly adult durable medical equipment.

NATIONAL NURSES SERVICE, INC.

         On June 30, 1995, the Company acquired ATLIS Health Services, Inc.,
which then was doing business under the name National Nurses Service.
Mid-Atlantic maintained the corporate entity, but changed its name to National
Nurses Service, Inc. ("NNS").

         NNS has four offices in the Maryland-Washington, D.C. metropolitan
area, Fairfax, Richmond, and the Tidewater area of Virginia. NNS is a leading
provider of supplemental staffing, including nursing, rehabilitative therapy and
certified nursing assistant services to hospitals, nursing homes, medical
clinics, correctional facilities, schools, and other governmental facilities. It
is certified by the Medicare and Medicaid programs in Virginia as a provider of
skilled and para-professional home health care services. NNS currently has an
active roster of more than 1,500 clinical employees from which to fill its
assignments.

HUNT COUNTRY NURSING SERVICES, INC.

         In connection with its acquisition of NNS, on June 30, 1995,
Mid-Atlantic acquired Hunt Country Nursing Services, Inc. ("HCNS") from its
majority shareholder, Oak Springs Nursing Home Limited Partnership. HCNS is a
private duty nursing company that provides professional nurses and nursing
assistants to patients in the home for 4 to 24 hours per day, 7 days per week.
HCNS is located in Northern and Central Virginia and generates approximately
$8.6 million in revenues per year. With NNS, HCNS comprises the majority of
services provided by the Company and a majority of the Company's revenue is
derived from the operations of NNS and HCNS.

(2)      COMPETITIVE BUSINESS CONDITIONS

         The Company is part of a highly competitive market for nurse staffing
and private duty nursing services. In addition, the Company is faced with a
market with a shortage of nursing personnel. As a result, the Company faces
competition not in gaining and retaining clients, but gaining and retaining
nursing personnel.

                                       5

<PAGE>

(3)      GOVERNMENTAL APPROVAL, REGULATION AND ENVIRONMENTAL COMPLIANCE

         The Company relies heavily on payments made by governmental entities
for the services provided by its certified home health entities. Medicare is the
largest single payer of home care services. Effective October 1, 2000, the two
certified Medicare Agencies owned and operated by the Company were required to
switch to the Prospective Pay System (PPS) for their services to Medicare
beneficiaries. The PPS replaces the cost reimbursement system. The PPS pays Home
Health Agencies (HHA) a predetermined base payment. Payment is provided for
60-day "episodes of care" for each beneficiary regardless of the number of days
of care within the episode. The exceptions to this rule are as follows:

         1)       The beneficiary voluntarily elects to transfer to another HHA
         2)       The beneficiary is discharged because treatment goals are met
         3)       A significant change occurs in the beneficiaries' condition,
                  which was not anticipated at the start of care.

         The PPS establishes a list of Home Health Resource Groups (HHRG) which
patients are assigned. Each HHRG has a corresponding reimbursement dollar
amount. The system defines that dollar amount by using the location of the
client (rural or urban), labor, wage, clinical and functional case mix criteria.

         The combination of a fixed reimbursement by category and the use of
clinical assessment information to establish that reimbursement amount creates a
fundamental shift in how our home health agencies must be managed. Our home
health managers must focus on controlling costs while ensuring that the quality
of the care delivered does not suffer.

         A Home Health Prospective Payment Analysis (HHPPA) conducted by our
cost report consultants (Davis, Pinel and Associates, Pennsauken, New Jersey) in
June 2000, suggested that the Company could be profitable under PPS. It is
important to note that although this analysis provided vital information it did
contain some limitations in regards to scope, cost and medical review.
Management does anticipate profits from our home health divisions. The home
health divisions represent approximately 10% of the Company's revenues.

(4)      RISKS ASSOCIATED WITH OPERATIONS

         The risks associated herewith include the following: no assurance of
profitability from its operations; a potential future need for funds;
significant government regulations; reliance on current management; increase in
competition; a lack of a current market for the securities; and the
uncertainties associated with changes in the health care system. All decisions
with respect to the management of the Company are made exclusively by the
Company.

         Although the Company does not anticipate the accumulation of debts, in
the event of a dissolution and termination of the Company, the proceeds realized
from the liquidation of assets, if any, will be distributed to the shareholders
only after the satisfaction of claims of all creditors. Accordingly, the ability
of a shareholder to recover all or any portion of his investment under such
circumstances will depend on the amount of funds realized and the claims to be
satisfied.

(5)      EMPLOYEES AND FACILITIES

         As of April 16, 2001, the Company had approximately 2600 employees of
which 1,400 are full-time equivalent employees. None of the Company employees
are subject to a collective bargaining agreement and the Company believes its
relations with its employees are good.

                                       6

<PAGE>

(c)      REPORTS TO SECURITY HOLDERS

         Prior to filing its Form 10-SB, the Company had not been required to
deliver annual reports. To the extent that the Company is required to deliver
annual reports to security holders through its status as a reporting company,
the Company shall deliver annual reports. Also, to the extent the Company is
required to deliver annual reports by the rules or regulations of any exchange
upon which the Company's shares are traded, the Company shall deliver annual
reports. If the Company is not required to deliver annual reports, the Company
will not go the expense of producing and delivering such reports. If the Company
is required to deliver annual reports, they will contain audited financial
statements as required.

         Prior to the filing of its Form 10-SB, the Company had not filed
reports with the Securities and Exchange Commission. Now that the Company has
become a reporting company, it is required to file Forms 10K-SB, 10Q-SB, 8-K and
appropriate proxy materials as they come due. If the Company issues additional
shares, the Company may file additional registration statements for those
shares. The public may read and copy any materials the Company files with the
Securities and Exchange Commission at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by call the Commission
at 1-800-SEC-0330. The Commission maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. The Internet address of
the Commission's site is (http://www.sec.gov).

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

ITEM 2.  DESCRIPTION OF PROPERTY

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

         The Company is not engaged in the business of investing in real estate
or real estate mortgages, however it does own its office at 7504 and 7506
Diplomat Drive in Manassas, Virginia and at 10760 Ambassador Drive, Manassas,
Virginia.

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

ITEM 3.  LEGAL PROCEEDINGS

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

         The Company is not party to, and none of the Company's property is
subject to, any pending or threatened legal, governmental, administrative or
judicial proceeding except as described below:

         On or about December 2, 1998 the Company filed a complaint in the
Circuit Court of Hanover County, State of Virginia against Home Care Connections
and Bonnie James. In that action the Company alleged that while defendant James
was employed by the Company, the defendants acted together and wrongly
transferred patients from services provided by the Company to services provided
by defendant Home Care Connections. The Company seeks monetary damages of
$900,000. The action is pending.

         The Company was a defendant in a lawsuit for breach of contract that is
styled ATLIS SYSTEMS INC V. MID-ATLANTIC HOME HEALTH NETWORK, INC., No. 200383
filed in June of 1999 in the Circuit Court for Montgomery County, State of
Maryland. The plaintiff corporation purports to be the successor-in-interest to
Atlis Federal, Inc. On June 30, 1995, the Company acquired all of the stock of
Atlis Health Services, Inc., a wholly-owned subsidiary of Atlis Federal. As part
of the consideration of the acquisition, the Company agreed to deliver 500,000

                                       7

<PAGE>

shares of the Company's Common Stock to Atlis Federal and, on the third
anniversary of closing of the acquisition (June 30, 1998), to pay Atlis Federal
the difference, if any, between the fair value of such stock $800,000. The Stock
Purchase Agreement between the parties establishes a multi-part formula for
determining the fair value of the stock as of that date. The parties disagree
not only about the proper interpretation of the contract language but also
whether, as a result of Altis Federal's alleged breach of various disclosures
provisions of the agreement, the Company is obligated to make any payment at
all. The Complaint seeks damages in the amount of $787,000 (representing
plaintiff's view of the Company's liability to pay an adjusted purchase price
under the contract formula) plus an unspecified amount of attorneys fees and
costs under an indemnification provision of the agreement. The Company has
asserted claim in recoupment to plaintiff's claims that would, if successful,
reduce the amount of any adverse judgment significantly. This action is pending.

         On October 27, 2000, the Company settled this pending lawsuit by paying
Atlis Health Services, Inc. $900,000 in cash and buying back Atlis Health
Services, Inc.'s 500,000 shares of stock in the Company for $450,000 over three
years. The first installment is October 27, 2001.

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

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

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

         The Company did not submit any matter to a vote of the shareholders in
the past calendar year 2000.

                                       8

<PAGE>

PART II
--------------------------------------------------------------------------------

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

Market Information:

         The Company's Class A Common Stock is traded on the Over The Counter
Bulletin Board system under the symbol "MAHN". The following table sets forth
the range of high and low bid prices for the Company's Common Stock for each
quarterly period indicated as reported by the NASDAQ's Historical Research
Department. Quotations reflect inter-dealer prices without retail markup,
markdown or commissions and may not represent actual trades.

                  Quarter Ended            High Bid          Low Bid
                  -------------            --------          -------

                December 31, 2000           $ 0.375         $ 0.06
                September 30, 2000          $ 0.43          $ 0.06
                June 30, 2000               $ 0.875         $ 0.50
                March 31, 2000              $ 0.37          $ 0.125
                December 31, 1999           $ 0.25          $ 0.125
                September 30, 1999          $ 0.18          $ 0.125
                June 30, 1999               $ 0.25          $ 0.03125
                March 31, 1999              $ 0.03          $ 0.03125
                December 31, 1998           $ 0.03          $ 0.03125
                September 30, 1998          $ 0.03          $ 0.03125
                June 30, 1998               $ 0.06          $ 0.03125
                March 31, 1998              $ 0.06          $ 0.0625

         There is no market for the Company's Class B Common Stock.

HOLDERS:

         As of December 31, 2000, there were approximately 458 holders of record
of the Company's Class A Common Stock. All of the Company's 10,000 shares of its
authorized Class B Common Stock are issued and outstanding and owned by one (1)
shareholder, Oak Springs Nursing Home Limited Partnership.

DIVIDENDS:

         The Company has never paid cash dividends on its stock and does not
intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business. The
Company's continued need to retain earnings for operations and expansion are
likely to limit the Company's ability to pay dividends in the future.

OPTIONS AND WARRANTS.

         There are no outstanding options or warrants to purchase additional
stock. The Company had an incentive stock option plan that included
substantially all officers and key employees. The Series C options which expired
in 1998 originally had an exercise price of $1 per share. The Company
subsequently reduced the option price to $.50 per share. Certain of these
options were exercised and the amount due was financed by the Company through
notes bearing interest at 8%. The unpaid balance of outstanding notes receivable
for stock purchases is shown as a reduction of stockholders' equity in the
Company's financial statements.

                                       9

<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

         On or about March 31, 2000, the Company issued 15,000 shares of
itscapital stock to Dennis Light as a yearly bonus for his services in 1999.
Such shares were valued at $0.25 per share. Such shares were issued pursuant to
the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.

         On or about July 31, 2000, the Company issued 4,000 shares of its
capital stock to Carol Roy, National Nurses Services' Home Health Administrator
as part of her annual review.

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

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

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

         Statements contained herein that are not historical facts are
forward-looking statements as that term is defined by the Private Securities
Litigation Reform Act of 1995. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, the
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ from those projected. The Company cautions
investors that any forward- looking statements made by the Company are not
guarantees of future performance and that actual results may differ materially
from those in the forward-looking statements. Such risks and uncertainties
include, without limitation: well established competitors who have substantially
greater financial resources and longer operating histories, regulatory delays or
denials, ability to compete as a start-up company in a highly competitive
market, and access to sources of capital.

         Mid-Atlantic Home Health Network, Inc. (MAHN) is a holding company of
four corporate entities: National Nurses Service, Inc.; Hunt Country Home
Health, Inc.; Hunt Country Nursing Services, Inc., and The Center for Ambulatory
and Home Infusion Services. An analysis of consolidated operations as well as
each of these entities is depicted below.

MID-ATLANTIC HOME HEALTH NETWORK, INC. (MAHN)

CONSOLIDATED FINANCIAL POSITION

         The Company's consolidated total assets were $9,384,000 at December 31,
2000 versus $6,451,000 at December 31, 1999. The 45% increase in total assets
was due principally to increases in accounts receivable as a result of the
Company's 29% increase in revenue.

         Liquidity, as represented by working capital (current assets less
current liabilities), decreased from approximately $1,338,000 to $715,000 at
December 31, 2000. The Company feels that its current and anticipated liquidity
will be sufficient to fund future operations.

         The Company finances a portion of its account receivable with a lender
under terms of an agreement that advances up to 80% of qualified accounts
receivable. At December 31, 2000 advances secured by accounts receivable totaled
approximately $4,760,000.

                                       10

<PAGE>

         Due to the nature of the Company's operations, property and
equipmentare not a significant factor in planning future operational needs. At
bothDecember 31, 1999 and 1998 the company's net investment in property and
equipment was less than 5% of total assets.

CONSOLIDATED RESULTS OF OPERATIONS

         Revenues for the year ended December 31, 2000 were approximately
$28,243,000 a 49% increase over December 31, 1999 revenues of approximately
$9,216,000.

         Costs related to patient care rose to approximately $21,699,000 an
increase of 50% over the previous year total of $14,404,000. These increases
were offset by controls over general and administrative expenses. General and
administrative expenses totaled approximately $4,907,000 for the year ended
December 31, 2000 an increase of 40% over the prior period.

         Income before one time charges increased to $1,294,000 in 2000 versus
$609,000 in 1999. One time expenses were:

         a.     Recognized one time charge for legal fees         $(292,000.00)
                Pertaining to settlement of ATLIS case

         b.     Recognized full year of amortization               ( 38,000.00)
                (31,450) on additional goodwill and imputed
                interest (6,166) on note - both related to
                ATLIS settlement

         c.     Increase bad debt reserve for Woodbridge           ( 70,000.00)
                Nursing Home account - bankruptcy

         d.     CAHIS the business entity ceased operations.       ( 50,000.00)
                                                                   ------------
                However, the durable medical equipment division
                was transferred to Hunt County Nursing Services,  $(450,000.00)
                Inc. and is trading under the name Advantage
                Medical Equipment and Supply.  The $50,000
                represents a charge for cleaning up uncollectible
                accounts receivable, inventory and accruals.
                This is a one time charge that has no effect on future
                earning capacity.

         Income after one-time expenses increased to $844,000 in 2000 versus
$609,000 in 1999. After tax income increased to $512,000 in 2000 versus $426,000
in 1999. After tax income before one-time charges would have been $795,000 in
2000 versus $426,000 in 1999. Also our average tax rate increased to 39% in 2000
from 30% in 1999.

         Earnings per common share remained at .04 for 2000.

                                       11

<PAGE>

                               HEALTH CARE TRENDS

         The following is a table of the Company's approximate operating
revenues for the years 1995 through 2000.

                                     Percentage change

                                       From the prior
                         Revenue           year
                         -------           ----
           1995          9,983,000
           1996         14,269,000         42.9%
           1997         13,740,000         -3.7%
           1998         14,698,000          6.9%
           1999         18,984,000         29.2%
           2000         28,200,000         48.5%

         The Company has, as described elsewhere in this annual report on Form
10-KSB, positioned itself to benefit from changing trends in the market for
health care services.

         Management anticipates continued and increased demand for the Company's
staffing, private duty nursing services, durable medical equipment and supplies,
and home health services. MAHN does not face difficulties in the marketing of
its services. Its challenges are in the recruitment of sufficient nursing
personnel to meet the demands for its nursing care services.

         MAHN continued to expand its services in 2000 by opening up office
locations in Fairfax, Charlottesville and the Tidewater area Virginia.

         The additional outlets for nurse staffing and private duty nursing have
provided greater ease in recruitment. At the same time, continued centralization
of general and administrative functions have resulted in greater productivity.
This combination of increasing the numbers of distribution points in the
Mid-Atlantic while centralizing overhead functions will continue in the Year
2001.

         MAHN, the holding company, does not generate any income but reports the
corporate-wide administrative expenses for the four entities. For 2000 MAHN had
revenue of $25,000. Operating expenses totaled $740,000.

NATIONAL NURSES SERVICE, INC. (NNS)

OPERATING REVENUES:
-------------------

Operating revenues for the fiscal year 2000 totaled $18,452,000
versus$12,478,000 in 1999 for our nurse staffing company. The revenue increase
of $5,974,000 represents a 48 percent increase. NNS continues to experience
greater demand for its nursing personnel from hospitals, clinics, nursing homes,
schools, and correctional facilities. As the age wave continues to impact the
population, and the shortage of nursing personnel persists, we anticipate
continued strong demand for nurse staffing. A new nurse staffing outlet was
added in August,2000, in the Tidewater area of Virginia.

                                       12

<PAGE>

OPERATING EXPENSES:
-------------------

         Total operating expenses for fiscal year 2000 was $17,093,000 versus
$11,812,000 in the prior year. This represents an increase of $5,281,000 or 45%.
Operating expenses expressed as a percentage of operating revenues remained
reasonably stable at 93% in 2000 versus 94 in 1999.

         The operating income before taxes of NNS improved for fiscal year 2000.
In 2000, NNS had $1,359,000 in operating income versus $667,000 in 1999---a 104
percent increase. The increased profitability is primarily due to increased
revenues with slight improvements in its overhead costs as a percentage of
sales.

HUNT COUNTRY NURSING SERVICES, INC. (HCNS)

OPERATING REVENUES:
-------------------

         Hunt Country Nursing Services, Inc., our private duty nursing company,
Continued to show revenue growth in fiscal year 2000. Operating revenues totaled
$8,646,000 versus $5,297,000 a year ago; the increase is $3,349,000 or 63
percent.

         An additional office was opened in March 2000 in Charlottesville,
Virginia.

OPERATING EXPENSES:
-------------------

         Operating expenses for HCNS increased to $8,441,000 in 2000 versus
$5,173,000 in 1999. This represents an increase of 63 percent.

INCOME/LOSS:
------------

         HCNS generated a profit of $204,000 for fiscal year 2000 as compared to
a loss of $124,000 in 1999.

         This company continues to expect revenue and income growth, and further
expansion through the Mid-Atlantic.

HUNT COUNTRY HOME HEALTH, INC. (HCHH)

OPERATING REVENUES:
-------------------

         The operating revenues for fiscal year 2000 for this Medicare Certified
home health agency totaled $1,117,000, compared to $1,184,000 for the prior
year.

OPERATING EXPENSES:
-------------------

         Operating expenses decreased from $1,164,000 in 1999 versus $1,080,000
in 2000.

                                       13

<PAGE>

INCOME/LOSS:
------------

         In fiscal year 2000, HCHH experienced income of $37,000 versus $20,000
in 1999. This company is maintaining steady operations under the prospective pay
system which went into effect October, 2000.

THE CENTER FOR AMBULATORY AND HOME INFUSION SERVICES (CAHIS)

         The durable medical equipment operations was transferred to Hunt
Country Nursing Services in 1999.

OPERATING REVENUES:
-------------------

         The operating revenues for 2000 was $4,000.

OPERATING EXPENSES
------------------

         Total operating expense for 2000 was $44,000.

PROFIT /LOSS
------------

         CAHIS ended 2000 with a $40,000 loss.

                                       14

<PAGE>

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

ITEM 7.  FINANCIAL STATEMENTS

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

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                          CONSOLIDATED FINANCIAL REPORT

                           DECEMBER 31, 2000 AND 1999

                                       15





<PAGE>

                                    CONTENTS

                                                                       PAGES
                                                                       -----

INDEPENDENT AUDITORS' REPORT                                              17

FINANCIAL STATEMENTS

   Consolidated balance sheets                                         18-19

   Consolidated statements of income                                      20

   Consolidated statements of stockholders' equity                        21

   Consolidated statements of cash flows                                  22

   Notes to consolidated financial statements                         23- 30

                                       16





<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Mid-Atlantic Home Health Network, Inc.
  and Subsidiaries

We have audited the accompanying consolidated balance sheets of Mid-Atlantic
Home Health Network, Inc. and Subsidiaries (the Company), as of December 31,
2000 and 1999, and the related consolidated statements of income, stockholders'
equity and cash flows for the 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 audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Mid-Atlantic Home Health Network, Inc. and Subsidiaries as of December 31, 2000
and 1999, and the results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.

                                                     /s/ Eggleston Smith P.C.
                                                     ------------------------
                                                     Eggleston Smith P.C.

Newport News, Virginia
February1,2002

                                       17

<PAGE>

                              FINANCIAL STATEMENTS

                                   YEARS ENDED

                           DECEMBER 31, 2000 AND 1999
                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

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

                                                        2000             1999
                                                     -----------     -----------
                           ASSETS

CURRENT ASSETS
   Cash and cash equivalents                         $  549,812      $  548,889
   Accounts receivable, net of allowances of
     $103,187 in 2000 and $106,239 in 1999            6,640,427       4,278,363
   Due from affiliates                                   97,931         273,343
   Prepaid expenses and other current assets             31,964         187,760
   Deferred tax asset                                    26,000          72,000

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

              Total current assets                    7,346,134       5,360,355
                                                     -----------     -----------

PROPERTY AND EQUIPMENT, NET                             573,840         278,779
                                                     -----------     -----------

OTHER ASSETS
   Goodwill, net of accumulated amortization of
     $303,728 in 2000 and $269,156 in 1999            1,332,909         781,239
   Other assets                                         135,954          30,786
                                                     -----------     -----------

              Total other assets                      1,468,863         812,025

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

              Total assets                           $9,388,837      $6,451,159
                                                     ===========     ===========

See accompanying notes.

                                       18


<PAGE>
<TABLE>

                          MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                     AND SUBSIDIARIES

                                CONSOLIDATED BALANCE SHEETS
                                DECEMBER 31, 2000 AND 1999

-----------------------------------------------------------------------------------------
<CAPTION>

                                                               2000               1999
                                                           ------------      ------------
<S>                                                        <C>               <C>
       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Current maturities of long-term debt                    $   148,405       $    16,393
   Current maturities of capital leases                         53,635                 -
   Notes payable                                             4,759,680         2,993,081
   Accounts payable                                            458,104           325,605
   Accrued salaries and related employee benefits              425,882           397,881
   Other current liabilities                                   461,905           164,270
   Income taxes payable                                        343,456           125,090
                                                           ------------      ------------

              Total current liabilities                      6,651,067         4,022,320
                                                           ------------      ------------

LONG-TERM DEBT, NET OF CURRENT MATURITIES
   Notes payable                                               536,568           294,123
   Capital leases                                              194,168                 -
                                                           ------------      ------------

              Total long-term debt                             730,736           294,123
                                                           ------------      ------------

              Total liabilities                              7,381,803         4,316,443
                                                           ------------      ------------

STOCKHOLDERS; EQUITY
   Common stock, Class A, $.001 par
     value, 200,000,000 shares authorized
     12,105,142 shares issued and
     outstanding in 2000 and 12,631,202 in 1999                 12,106            12,631
   Common stock, Class B, $.001 par value,
     10,000 shares authorized, issued and
     outstanding                                                    10                10
   Additional paid-in capital                                  451,002         1,113,475
   Retained earnings                                         1,708,166         1,197,850
                                                           ------------      ------------
                                                             2,171,284         2,323,966
   Stock subscriptions receivable                             (164,250)         (189,250)
                                                           ------------      ------------

           Total stockholders' equity                        2,007,034         2,134,716
                                                           ------------      ------------

           Total liabilities and stockholders' equity      $ 9,388,837       $ 6,451,159
                                                           ============      ============
</TABLE>

See accompanying notes.

                                            19

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

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

                                                      2000              1999
                                                  ------------      ------------

REVENUES                                          $28,243,016       $18,984,218
                                                  ------------      ------------

EXPENSES
   Patient care costs                              21,699,600        14,403,802
   General and administrative                       4,907,394         3,494,086
   Amortization                                        87,405            52,997
   Interest expense, net                              704,238           424,316
                                                  ------------      ------------

              Total expenses                       27,398,637        18,375,201
                                                  ------------      ------------

              Income before income taxes              844,379           609,017

PROVISION FOR INCOME TAXES                            332,863           182,769
                                                  ------------      ------------

              Net income                          $   511,516       $   426,248
                                                  ============      ============

EARNINGS PER COMMON SHARE                         $       .04       $       .03
                                                  ============      ============

See accompanying notes.

                                       20

<PAGE>
<TABLE>

                                               MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                                          AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                               YEARS ENDED DECEMBER 31, 2000 AND 1999

------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                    Additional                           Stock
                                          Common Stock                Paid-In          Retained      Subscriptions
                                    Class A          Class B          Capital          Earnings        Receivable           Total
                                 ------------     ------------     ------------      ------------     ------------      ------------
<S>                              <C>              <C>              <C>               <C>              <C>               <C>
Balance, January 1, 1998         $    12,631      $        10      $ 1,113,475       $   772,802      $  (189,250)      $ 1,709,668

   Dividend paid                           -                -                -            (1,200)               -            (1,200)
   Net income                              -                -                -           426,248                -           426,248
                                 ------------     ------------     ------------      ------------     ------------      ------------

Balance, December 31, 1999            12,631               10        1,113,475         1,197,850         (189,250)        2,134,716

   Reacquisition of shares
     originally issued in
     purchase of
     National Nurses Service            (500)               -         (643,500)                -                -          (644,000)
   Cancelled subscriptions               (25)               -          (24,975)                -           25,000                -
   Issuance of stock to employees
     as compensation                       -                -            6,002                 -                -             6,002
   Dividend paid                           -                -                -            (1,200)               -            (1,200)
     Net income                            -                -                -           511,516                -           511,516
                                 ------------     ------------     ------------      ------------     ------------      ------------

BALANCE, DECEMBER 31, 2000       $    12,106      $        10      $   451,002       $ 1,708,166      $  (164,250)      $ 2,007,034
                                 ============     ============     ============      ============     ============      ============
</TABLE>

See accompanying notes.

                                                      21

<PAGE>
<TABLE>

                           MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                      AND SUBSIDIARIES

                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                           YEARS ENDED DECEMBER 31, 2000 AND 1999

-------------------------------------------------------------------------------------------
<CAPTION>

                                                                 2000               1999
                                                             ------------      ------------
<S>                                                          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                $   511,516       $   426,248
   Adjustments to reconcile net income
     to net cash used in operating activities:
       Depreciation                                               25,046            21,365
       Amortization                                               77,330            47,805
       Deferred taxes                                             46,000           (35,000)
       Changes in assets and liabilities:
         Accounts receivable                                  (2,362,064)       (1,279,874)
         Due from affiliates                                     175,412          (200,298)
         Prepaid expenses and other current assets               155,796           (30,311)
         Accounts payable                                        132,499           172,881
         Accrued salaries and related employee benefits           28,001           142,661
         Income taxes payable                                    218,366           125,090
         Other current liabilities                               297,635            45,108
         Other assets                                           (105,168)          (29,652)
                                                             ------------      ------------

              Net cash used in operating activities             (799,631)         (593,977)
                                                             ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of goodwill                                         (256,000)                -
   Purchases of property and equipment                           (44,209)          (46,923)
                                                             ------------      ------------

              Net cash used in investing activities             (300,209)          (46,923)
                                                             ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Increase in note payable, net                               1,766,599           386,906
   Current borrowings                                             18,000                 -
   Repayment of long-term debt                                   (16,543)          (12,211)
   Principal payments on capital leases                          (28,095)                -
   Reacquisition of stock                                       (644,000)                -
   Stock issued as employee compensation                           6,002                 -
   Dividend paid on preferred stock                               (1,200)           (1,200)
                                                             ------------      ------------

              Net cash provided by financing activities        1,100,763           373,495
                                                             ------------      ------------

              Net increase (decrease) in cash
                and cash equivalents                                 923          (267,405)

CASH AND CASH EQUIVALENTS
   Beginning                                                     548,889           816,294
                                                             ------------      ------------

   Ending                                                    $   549,812       $   548,889
                                                             ============      ============
</TABLE>

See accompanying notes.

                                             22


<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION. The consolidated financial statements include the accounts of
Mid-Atlantic Home Health Network, Inc. (MAHN) and its subsidiaries (collectively
referred to herein as the Company). The subsidiaries include Hunt Country
Nursing Services, Inc. (Hunt Country Nursing), Hunt Country Home Health, Inc.
(Home Health), National Nurses Services, Inc. and the Center for Ambulatory and
Home Infusion Services, Inc. (CAHIS).

The Company acquired the Center for Ambulatory and Home Infusion Service as of
November 1, 1999, in a non-cash transaction from an affiliate. The results of
operations for CAHIS are included in the consolidated financial statements from
that date.

Approximately 80% of MAHN's outstanding shares are owned by Oak Springs Nursing
Home Limited Partnership (Oak Springs).

The Company is engaged in the business of providing integrated home health
services with an emphasis in providing nursing staff services to hospitals,
nursing homes and other facilities. The Company operates in Virginia, Maryland,
the District of Columbia and Pennsylvania.

BASIS OF CONSOLIDATION. All significant intercompany accounts and transactions
have been eliminated.

NET REVENUES. Net revenues are reported at the estimated net realizable amounts
from patients, third party payers, and others for services rendered, including
estimated retroactive adjustments under reimbursement agreements with third
party payers. Revenue received under third-party agreements is subject to audit.
Any adjustments as a result of these audits are reflected in current operations.
Approximately 5% and 9% of the Company's net revenues for the years ended
December 31, 2000 and 1999, respectively, were from participation in Medicare
and state Medicaid programs. In addition, approximately 15% and 59% of the
Company's net revenues for the years ended December 31, 2000 and 1999,
respectively, was from contracts with state and local governmental correctional
facilities, including the Commonwealth of Virginia and the District of Columbia.

At December 31, 2000 and 1999, 3% and 8%, respectively, of net accounts
receivable were due from Medicare and Medicaid. The ability of payers to meet
their obligations depends upon their financial stability, future legislation and
regulatory actions.

The Company does not believe there are any significant credit risks associated
with receivables from Medicare and Medicaid.

PROPERTY AND EQUIPMENT. Property and equipment is recorded at cost. The cost and
the related accumulated depreciation are removed from the accounts in the year
the related asset is sold or retired. Depreciation is computed using the
straight-line method over the estimated economic lives of the assets, commencing
at the time the assets are placed into service.

                                                                     (Continued)

                                       23

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)

CASH AND CASH EQUIVALENTS. Cash and cash equivalents include cash on hand and in
the bank as well as any investment purchased with an original maturity of three
months or less. The Company maintains its cash in bank deposit accounts which,
at times, may exceed federally insured limits. The Company has not experienced
any losses in such accounts. Cash equivalents are carried at cost which
approximates fair value.

GOODWILL AND OTHER ASSETS. Goodwill arises from acquisitions and represents the
excess of purchase price over identifiable acquired net assets, and is amortized
on a straight-line basis over 20 years. Other assets principally consist of the
estimated value of the assembled workforce and capitalized fees related to other
long-term agreements and transactions. Other assets are amortized on a
straight-line basis over a period of 3 to 5 years.

INCOME TAXES. The income tax provision includes federal and state income taxes
both currently payable and deferred because of differences between financial
reporting and tax bases of assets and liabilities. Deferred tax assets and
liabilities are measured using the enacted tax rates and laws.

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

STOCKHOLDERS' EQUITY. The Company has three classes of stock. Two hundred
million shares of Class A common stock have been authorized. The Class A
shareholders have the right to elect one third of the directors of the Company.
Ten thousand shares of Class B common stock, with the right to elect two thirds
of the directors, have also been authorized. Five million shares of Class C
convertible preferred stock have been authorized. The preferred stock would be
paid a dividend of 12%. No shares of Class C convertible preferred stock are
outstanding.

EARNINGS PER SHARE. Earnings per common share are computed by dividing the
weighted average number of shares outstanding into net income. Diluted earnings
per share are not presented because the outstanding stock options are not
dilutive.

NOTE 2.  ACCOUNTS RECEIVABLE

Accounts receivable arise from the provision of staffing services to hospitals,
nursing homes and other facilities in the Virginia, Maryland, District of
Columbia and Pennsylvania areas. The principal payers for these services are the
patients, insurance companies, various state and local government agencies,
other institutional providers of healthcare, the Medicare program, and certain
Medicaid programs.

                                       24

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 3.  PROPERTY AND EQUIPMENT

As of December 31, 2000 and 1999, property and equipment consisted of the
following:

                                                   2000               1999
                                              --------------     --------------
Building and building improvements            $     321,355      $     320,818
Equipment acquired under capital leases             275,898                  -
Furniture and equipment                             512,480            348,842
                                              --------------     --------------
                                                  1,109,733            669,660
Less accumulated depreciation                       535,893            390,881
                                              --------------     --------------
                                              $     573,840      $     278,779
                                              ==============     ==============

NOTE 4.  NOTES PAYABLE

National Nurses Service, Home Health and Hunt Country Nursing borrow funds under
terms of agreements with a lender and secured by accounts receivable. These
agreements provide for advances on accounts receivable of approximately 83% of
the collateralized balances. The Company is required to refund any borrowings
for financial accounts receivable balances not collected within 180 days.
Interest is accrued at 10.25%. The funding agreements expire June 30, 2004.
Repayment of these advances requires collection directly by lender and credited
against amounts outstanding. Interest is paid separately.

                                                   2000               1999
                                              --------------     --------------
Amount of advances on accounts receivable     $   5,869,123      $   3,711,303
Less:  Lender reserves                            1,109,443            718,222
                                              --------------     --------------
           Note payable                       $   4,759,680      $   2,993,081
                                              ==============     ==============
<TABLE>

NOTE 5.  LONG-TERM DEBT

<CAPTION>

Long-term debt as of December 31, 2000 and 1999, consisted of the following:

                                                                      2000                   1999
                                                                 -------------         --------------
<S>                                                              <C>                   <C>
Note payable, C.W. Cobb, collateralized by first deed of
   trust on building and guaranteed by the general partners
   of Oak Springs.  Payable in monthly installments of $761,
   including interest at 11%.  Due April, 2021.                  $      64,946         $       65,689

Note payable, C.W. Cobb, collateralized by second deed
   of trust on building and guaranteed by the general
   partners of Oak Springs.  Payable in monthly installments
   of $221, including interest at 13%.  Due April, 2021.                18,011                 18,304

Note payable, York Federal Savings and Loan.  Payable in
   monthly installments of $1,116, including interest at 8.5%.
   A balloon payment of $86,809 is due September, 2008.                 70,472                 76,658

                                                                                          (Continued)

                                       25

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 5.  LONG-TERM DEBT (CONCLUDED)

                                                                        2000                   1999
                                                                   --------------        ---------------

Note payable, Crestar Mortgage Corp., collateralized
   by building and guaranteed by the  managing general
   partner of Oak Springs.  Payable in monthly installments
   of $772, including interest at 8%.  Due December, 2024.         $      77,862         $       79,800

Note payable, Central Fidelity Bank guaranteed by the
   general partners of Oak Springs, payable in monthly
   installments of $1,668, including interest at 11.21%.
   Due December 5, 2007.                                                  62,682                 70,065

Note payable, ATLIS Systems, Inc., collateralized by stock,
   payable in annual installments of $150,000, including
   interest at an imputed rate of 10%.  Due October 27, 2003.
   The note does not bear interest.  The face amount of $450,000
   has been discounted to $373,000.  The discount will be charged
   to interest expense over the term of the note.                        373,000                      -

Note payable, stockholder, uncollateralized, no stated
   repayment terms                                                        18,000                      -
                                                                   --------------        ---------------
                                                                         684,973                310,516
       Less current maturities                                           148,405                 16,393
                                                                   --------------        ---------------
                                                                   $     536,568         $      294,123
                                                                   ==============        ===============
</TABLE>

Annual maturities of long-term debt outstanding at December 31, 2000, are as
follows:

       2000                                                       $     148,405
       2001                                                             143,396
       2002                                                             157,651
       2003                                                              23,326
       2004                                                              25,561
       Thereafter                                                       186,634
                                                                  --------------
                                                                  $     684,973
                                                                  ==============

                                       26

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 6.  CAPITAL LEASES

The Company leases equipment under capital leases from GE Capital. Assets
obtained under capital leases total $275,898 and depreciation expense related to
those assets was $28,091 during 2000. The following is a schedule of future
minimum payments under these leases:

Year Ending
   December 31, 2000                                               $    79,848
   December 31, 2001                                                    79,848
   December 31, 2002                                                    79,848
   December 31, 2003                                                    63,185
   December 31, 2004                                                    13,014
                                                                   ------------
   Total minimum lease payments                                        315,743
   Less:  Amount representing taxes                                     13,633
                                                                   ------------
   Net minimum lease payments                                          302,110
   Less:  Amount representing interest                                  54,307
                                                                   ------------
   Present value of net minimum lease payments                         247,803
   Current portion                                                      53,635
                                                                   ------------
   Long-term portion                                               $   194,168
                                                                   ============

NOTE 7.  STOCK OPTION PLAN AND STOCK SUBSCRIPTIONS

The Company had an incentive stock option plan that included substantially all
officers and key employees. The Series C options which expired in 1998
originally had an exercise price of $1 per share. The Company subsequently
reduced the option price to $.50 per share. Certain of these options were
exercised and the amount due was financed by the Company through notes bearing
interest at 8%. The unpaid balance of outstanding notes receivable for stock
purchases is shown as a reduction of stockholders' equity.

During 2000 and 1999, the Company did not receive any payments on outstanding
notes receivable for the purchase of shares. Because the market value of the
outstanding shares is below the option price, the Company has suspended the
required payments (including interest) on these notes.

NOTE 8.  LEASE COMMITMENTS

The Company leases certain office facilities and other equipment under non-
cancelable leases for terms ranging from one to five years. Future minimum lease
payments under these operating leases are as follows:

       2001                                                           $ 248,765
       2002                                                             199,616
       2003                                                              92,884
       2004                                                              42,735
       2005                                                               7,758
                                                                      ----------
       Total future minimum lease payments                            $ 591,758
                                                                      ==========

During 2000 and 1999, rent expense for all operating leases totaled $294,730 and
$203,025, respectively.

                                       27

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 9.  INCOME TAXES

The Company files a consolidated federal income tax return, which includes the
Center for Ambulatory and Home Infusion Service, Hunt Country Nursing, Home
Health and National Nursing Service. The Company and its subsidiaries file
separate returns for state purposes.

The provision for income taxes for the years ended December 31, 2000 and 1999,
was comprised of the following:

                                                2000                  1999
                                           -------------         -------------
Current provision                          $    306,863          $    217,769
Deferred expense (benefit)                       26,000               (35,000)
                                           -------------         -------------
   Total provision                         $    332,863          $    182,769
                                           =============         =============

The provision for income taxes differed from the amount of income tax determined
by applying the applicable federal statutory tax rate to pre-tax income as a
result of the following:

                                               2000                  1999
                                           -------------        --------------
Statutory federal tax rate                      34%                  34%
State taxes, net of federal benefit              3                    3
Goodwill amortization                           (6)                  (4)
Other                                            8                   (3)
                                           -------------        --------------
Effective tax rate                              39%                  30%
                                           =============        ==============

The deferred tax asset relates to the allowance for doubtful accounts reflected
on the balance sheet, and to claims incurred but not reported that are recorded
in current earnings. Realization of the deferred tax asset is contingent on the
occurrence of a write-off of the accounts receivable for tax purposes and
payment of premiums to the insurer or payments of actual claims. No valuation
allowance was established since the Company believes it is more likely than not
that this asset will be realized.

NOTE 10.  RELATED PARTY TRANSACTIONS

Periodically, Oak Springs and its affiliates provide the Company with funds
needed for various transactions. Oak Springs also enters into debt on behalf of
the Company. Amounts due from and due to affiliates as of December 31, 2000 and
1999, are as follows:

                                                                     (Continued)

                                       28

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 10.  RELATED PARTY TRANSACTIONS (CONCLUDED)

                                                       2000            1999
                                                   -------------   -------------
Due from affiliates:
   Oak Springs Nursing Home LP                     $      7,895    $    126,500
   Oak Springs Nursing Home                             142,152          77,371
   Health Care Ventures, Inc.                           112,863         108,093
   Home Health Services of Allegheny County, Inc.             -             187
   Health Ventures Group                                      -           4,086
   All Stat Home Health, Inc.                             2,282             195
   Care Connections of Pennsylvania, Inc.                 2,177             328
                                                   -------------   -------------
                                                        267,369         316,760
                                                   -------------   -------------
Due to affiliates:
   Western Pennsylvania Home
     Health Network, Inc.                                    37              37
   Health Ventures Group                                 23,843          24,283
Care Connections of
   Pennsylvania, Inc.                                     1,145               -
All Stat Home Health, Inc.                                  153               -
Oak Springs Nursing Home LP                             105,980               -
Oak Springs Nursing Home                                 38,280          19,097
                                                   -------------   -------------
                                                        169,438          43,417
                                                   -------------   -------------
       Net due from affiliates                     $     97,931    $    273,343
                                                   =============   =============

Oak Springs maintains a workers compensation policy, which covers the Company.
The Company paid Oak Springs $160,190 and $160,190 during the years ended
December 31, 2000 and 1999, respectively, related to this policy.

NOTE 11.  LITIGATION SETTLEMENT

In October, 2000, the Company settled litigation with the former owners of
National Nurses Service, Inc. The settlement adjusted the original purchase
price of $920,000 to $1,549,000.

The settlement required the former owners of NNS to surrender it's 500,000
shares of MAHN stock received in exchange for consideration in the form of cash,
and notes with a discounted value of $373,000. As a result, stockholders equity
has been reduced by $644,000, and goodwill has been increased by $629,000.

The note issued requires three annual payments of $150,000, and has a value of
$373,000. The note is secured by the 500,000 shares surrendered and contains
provision for increasing the amount under the note to $900,000, and reclaiming
of the shares surrendered in the event of default on the note. The Company has
only recorded the discounted value of the note and the surrender of the shares.
Management is of the opinion that the potential penalties associated with the
default make it a remote possibility that the Company would fail to meet the
required payments under the note.

                                       29

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

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

NOTE 12.  SUPPLEMENTARY CASH FLOW INFORMATION

Interest paid during 2000 and 1999 was $692,535 and $423,952, respectively.
Income taxes paid during 1999 were $68,625.

The Company purchased all of the outstanding stock of CAHIS from an affiliated
Company on November 1, 1999, in exchange for settlement of certain intercompany
indebtedness. The total purchase price of $98,804 exceeded the fair market value
of assets acquired, less liabilities assumed, by $155,760. The excess
consideration is recorded as goodwill.

The Company acquired assets of $275,898 under capital leases during 2000.

The Company issued a non-interest bearing note with a face value of $450,000
(discounted to $373,000) in connection with the settlement of a dispute
concerning the purchase price of a subsidiary in 2000.

                                       30


<PAGE>

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

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

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

         There have been no disagreements with the Company's independent
accountants over any item involving the Company's financial statements. The
Company's independent accountants are Eggleston Smith, P.C. located at 603 Pilot
House Drive, Suite 400, Newport News, Virginia 23606.

PART III
-------------------------------------------------------------------------------

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

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

(a)      DIRECTORS AND EXECUTIVE OFFICERS

         As of April 16, 2001, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer, and the expiration of
the terms as directors are as follows:
                                                        (3)*
(1)                     (2)                             Period Served As
Name                    Age    Position                 Director
----                    ---    --------                 ----------------

Philip V. Warman         57    Chairman of the Board,   Dec. 9, 1994 to present
                              and CEO and Director

Tom Waugh                33    Secretary & Treasurer,   Dec., 1999 to present
                               Director

Joanne B. Warman         50    Vice President           Dec., 1999 to present

Ronald L. Messenheimer   49    President of NNS         July 1, 1995 to present

Gary Paz                 42    Vice President of NNS    Dec. 1999 to present

The Company's directors are elected at the annual meeting of stockholders and
hold office until their successors are elected and qualified. The Company's
officers are appointed annually by the Board of Directors and serve at the
pleasure of the Board.

                                       31

<PAGE>

 (b)      BUSINESS EXPERIENCE:

PHILIP V. WARMAN
----------------

         Philip V. Warman is the Chairman of the Board and has over 27 years
experience in health venture development and health care financial management.
He also serves as the Company's Treasurer and is a director. He has a degree in
Business Administration from Wake Forest University. Mr. Warman served in
various positions at Prince William Hospital culminating as Senior Vice
President. During his 18 years at Prince William Hospital, he acquired Annaburg
Manor Nursing Home, initiated home health, DME, private duty, physician billing,
a collection agency, a child care enter and an alcoholic treatment center.

         Since 1981, Mr. Warman has been Managing General Partner of Oak Springs
Nursing Home Limited Partnership, the Company's majority and controlling
shareholder.

RICHARD TOMLINSON WAUGH
-----------------------

         Tom Waugh is the Secretary and Treasurer and a director of the Company.
Mr. Waugh received his undergraduate degree from Colorado State and earned a
Masters of International Management from the American Graduate School of
International Management at Thunderbird. Mr. Waugh has worked for Bear Sterns in
the international securities division and is currently the Managing director of
Cavallo Capital Corp., a New York based hedge fund that manages $120 million. In
the capacity, Mr. Waugh is responsible for the operational activities of the
managed accounts, including personnel, execution of trades, creating trade
models and analyzing prospective deals.

JOANNE BROWNING WARMAN
----------------------

         Joanne Browning Warman is the Vice President of the Company. She has
over 29 years of nursing experience in the health care industry. She has a
Bachelors of Science degree in nursing from the University of Virginia. In
December of 1983, Mrs. Warman opened Hunt Country Home Health ("HCHH"), a
medicare-certified home health agency servicing Warrenton and the surrounding
areas. She remained the Administrator of HCHH until November of 1984, at which
time she became a part-time employee of HCHH. Mrs. Warman continues to advise
the Company on its clinical management operations.

RONALD L. MESSENHEIMER
----------------------

         Ronald L. Messenheimer is the President of National Nurses Service. Mr.
Messenheimer earned a Bachelor of Science degree in Business and Management with
a major in Accounting from the University of Maryland in 1974. From 1991 to the
present he has led the growth of ATLIS Health Services from 1991 to 1995. During
his tenure as president, NNS entered the home health market by obtaining
Medicaid certification in 1991 and Medicare certification in 1992.
Mr.Messenheimer negotiated the purchase of a small Medicare-certified home
health agency in June of 1993 established a specialized AIDS treatment program.

                                       32


<PAGE>

He created a rehabilitation service company in early 1994. Mr. Messenheimer has
direct responsibility for essentially all payroll, billing, human resources and
administrative functions, as well as day-to-day operating responsibility of NNS.
NNS currently has 75 full time employees and an additional 1,200 active
employees of which approximately 600 work each week. Prior to 1991, Mr.
Messenheimer was President of ATLIS Federal Services and served in various
capacities with UNC, Inc.

GARY PAZ
--------

         Mr. Paz is the Vice President of NNS. During the past 5 years, Mr. Paz
has been responsible for the daily operations and overall performance of NNS's
Richmond, Virginia office. In the regard, Mr. Paz duties include recruitment of
nursing staff, maintaining nurse and client files, billing for services and
tracking accounts receivable and budgeting for the Richmond office. Mr. Paz also
handles the Company's marketing program and tracks quality assurance on the
Company's accounts. Prior to working with NNS, Mr. Paz was an Assistant Vice
President of Wheat First Securities.

(c)      DIRECTORS OF OTHER REPORTING COMPANIES:

         None of the officers or directors of the Company are directors of any
other reporting company.

(d)      FAMILY RELATIONSHIPS:

         Phillip V. Warman, the Chairman of the Board and a director of the
Company, and Jo Anne Warman, the Company's Vice President, are husband and wife.

(e)      INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS:

         Except as noted below, none of the officers, directors, promoters or
control persons of the Company have been involved in the past five (5) years in
any of the following:

   (1)   Any bankruptcy petition filed by or against any business of which such
         person was a general partner or executive officer either at the time of
         the bankruptcy or within two years prior to that time;

   (2)   Any conviction in a criminal proceedings or being subject to a pending
         criminal proceeding (excluding traffic violations and other minor
         offenses);

   (3)   Being subject to any order, judgment or decree, not subsequently
         reversed, suspended or vacated, or any Court of competent jurisdiction,
         permanently or temporarily enjoining, barring, suspending or otherwise
         limiting his involvement in any type of business, securities or banking
         activities; or

   (4)   Being found by a court of competent jurisdiction (in a civil action),
         the Commission or the Commodity Futures Trading Commission to have
         violated a federal or state securities laws or commodities law, and the
         judgment has not been reversed, suspended, or vacated.

                                       33

<PAGE>

         Phillip Warman, an officer and director of the Company, served as a
director of Bayou State Home Health doing business as Care Connection Home
Health in the state of Louisiana. This Medicare certified home health agency
filed for bankruptcy in August of 1998. In addition, Oak Springs Nursing Home
Limited Partnership was an owner of Care Connections of Louisiana and Mr. Warman
is the managing general partner of Oak Springs Nursing Home Limited Partnership.
He also served as a director of Home Health Services of Allegheny County, a
non-profit home health agency in Pittsburgh, Pennsylvania, an entity which filed
for bankruptcy in December of 1998.

         Ron Messenheimer, an officer of the Company, was the Vice President of
Atlis Systems, Inc. and the chairman and CEO of Atlis Federal Services, Inc.,
entities which filed bankruptcy in May of 1996.

         The officers and directors who are identified above are significant
employees of the Company.

(g)      SECTION 16a BENEFICIAL OWNERSHIP COMPLIANCE

         The officers, directors and beneficial owners of more than 10% of the
Company's common stock have filed their initial statements of ownership on Form
3 and annual statements on Form 5, or will do so within a reasonable time
following the filing of this Form 10-KSB.

                                       34


<PAGE>

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

ITEM 10.  EXECUTIVE COMPENSATION

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

         The following table sets forth information about compensation paid or
accrued during the years ended December 31, 2000, 1999, 1998 and 1997 to the
Company's officers and directors.

<TABLE>

                                                         Summary Compensation Table
<CAPTION>

                                                                                               Long Term Compensation
                                                                            --------------------------------------------------------
                                       Annual Compensation                          Awards                Payouts
                           --------------------------------------------     -------------------------    ----------
(a)                        (b)      (c)            (d)        (e)           (f)            (g)           (h)            (i)
                                                              Other                        Securities                   All
                                                              Annual        Restricted     Under-                       Other
Name and                                                      Compen-       Stock          Lying         LTIP           Compen-
Principal                                                     Sation        Awards         Options/      Payouts        sation
Position                   Year     Salary ($)      Bonus($)    ($)           ($)          SARs (#)         ($)           ($)
-------------              ------   -----------     --------- ---------     ----------     -----------   ----------     ------------
<S>                        <C>      <C>             <C>       <C>           <C>             <C>          <C>            <C>
Philip V. Warman           2000     $54,000         $    0.00 $    0.00     $    0.00       None         $    0.00      $ 2,769 (1)
Chairman & CEO             1999     $54,000         $    0.00 $    0.00     $    0.00       None         $    0.00      $21,306 (1)
and Treasurer              1998     $24,000         $    0.00 $    0.00     $    0.00       None         $    0.00      $23,075 (2)
                           1997     $0.00           $    0.00 $    0.00     $    0.00       None         $    0.00      $23,075 (3)

Dennis S. Light            2000     $52,897         $    0.00 $    0.00     $    0.00       None         $    0.00      $16,000 (6)
President                  1999     $79,138         $   3,750 $    0.00     $    0.00       None         $    0.00      $24,000 (5)
*gone effective 8/31/00    1998     $76,313         $   1,250 $    0.00     $    0.00       None         $    0.00      $27,500 (6)
                           1997     $75,400         $    0.00 $    0.00     $    0.00       None         $    0.00      $27,500 (7)

Tom Waugh                  No compensation received
Secretary/Treasurer

Ronald L. Messenheimer     2000     $92,900         $ 2,500   $    0.00     $    0.00       None         $    0.00      $  0.00
President, NNS             1999     $95,073         $ 2,000   $    0.00     $    0.00       None         $    0.00      $  0.00
                           1998     $61,640         $   350   $    0.00     $    0.00       None         $    0.00      $  0.00
                           1997     $41,500         $  0.00   $    0.00     $    0.00       None         $    0.00      $  0.00

Gary Paz                   2000     $60,000         $ 1,000   $    0.00     $    0.00       None         $    0.00      $52,450
Vice President, NNS        1999     $60,000         $   750   $    0.00     $    0.00       None         $    0.00      $41,024
                           1998     $60,000         $  0.00   $    0.00     $    0.00       None         $    0.00      $38,258
                           1997     $60,000         $  0.00   $    0.00     $    0.00       None         $    0.00      $ 3,445
</TABLE>

-------------------------
This information is provided in regards to Mid-Atlantic Home Health Network
Agencies, Hunt Country Home Health, Hunt Country Nursing Services, and National
Nurses Service.

                                       35

<PAGE>

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

         (1) This "other compensation" is representative of partnership draws at
Hunt Country Nursing Services.

         (2) This "other compensation" is representative of partnership draws at
Hunt Country Nursing Services.

         (3) This "other compensation" is representative of partnership draws at
Hunt Country Nursing Services.

         (4) This figure represents the 15,000 shares issued to Mr. Light in
March of 2000, valued at $0.25 per share.

         (5) This "other compensation" is representative of payments made by
National Nurses Service to Creative Health Ventures, a corporation owned 100% by
Dennis Light.

         (6) This "other compensation" is representative of payments made by
National Nurses Service to Creative Health Ventures, a corporation owned 100% by
Dennis Light.

         (7) This "other compensation" is representative of payments made by
National Nurses Service to Creative Health Ventures, a corporation owned 100% by
Dennis Light.

                                       36

<PAGE>

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

(a)      5% SHAREHOLDERS:

         The following information sets forth certain information as of December
31, 1999 about each person who is known to the Company to be the beneficial
owner of more than five percent (5%) of the Company's Common Stock:

                      (2)
  (1)          Name and Address                   (3)                 (4)
Title          of Beneficial              Amount and Nature of     Percent of
of Class       Owner                      Beneficial Ownership       Class
--------       -------------------------  --------------------    -----------

Common         Oak Springs Nursing Home
Stock          Limited Partnership            10,063,778(8)          79.6%
Class A        c/o Philip V. Warman
               7504 Diplomat Drive, Suite 101
               Manassas, Virginia  20109

               Nevada Agency and Trust Co.       697,498              5.5%
               50 West Liberty Street,
               Suite 880
               Reno, Nevada 89501

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

         (8) Philip V. Warman, an officer and director of the Company, is a
General Partners of Oak Springs Nursing Home Limited Partnership.

(b)      SECURITY OWNERSHIP OF MANAGEMENT:

                      (2)
  (1)          Name and Address                   (3)                 (4)
Title          of Beneficial              Amount and Nature of     Percent of
of Class       Owner                      Beneficial Ownership       Class
--------       -------------------------  --------------------    -----------

Common         Philip V. Warman               10,092,934(9)          79.6%
Stock          7504 Diplomat Drive
Class A        Manassas, Virginia  20109

               Ronald L. Messenheimer              9,500           Less than 1%
               7504 Diplomat Drive
               Manassas, Virginia 20109

               All Directors and              10,318,434             81.6%
               Officers as a Group

                                       37

<PAGE>

----------------------
         (9) Of this amount, 10,063,778 shares are owned by Oak Springs Nursing
Home Limited Partnership, of which Mr. Warman is a general partner.

(c)      CHANGES IN CONTROL:

         There is no arrangement which may result in a change in control.

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

         Mid-Atlantic has entered into many of its lines of business since the
corporation's named was changed in December of 1994 by acquiring entities or
businesses from entities related to the Company's management. As evident from
the discussion in the preceding sections, various members of management maintain
their relationships with other entities from which the Company acquired its
businesses and with which the Company interacts as part of the Company's ongoing
business.

         The Company acquired Hunt Country Home Health from Oak Springs Nursing
Home Limited Partnership ("OSNHLP") in the Spring of 1995 for 10,224,628 shares
of the Company's Class A Common Stock and 10,000 shares of the Company's Class B
Common Stock. OSNHLP thereby became the Company's majority stockholder, now
owning approximately 80% of the Company's Class A Common Stock and 100% of the
Company's Class B Common Stock. The Company's Chairman of the Board, Philip
Warman, and the Estate of J.L. Mathews, M.D., are the general partners of
OSNHLP. Because this acquisition involved an entity related to the Company, the
Company has booked the acquisition of Hunt Country Home Health on a "processor
cost" basis. Also. OSNHLP has guaranteed a number of the Company's debt
obligations, as discussed in Note 4 of the Consolidated Financial Report..

         In March of 1995, the Company established a subsidiary corporation
named Western Pennsylvania Home Health Network, Inc. WPHHN operated as a wholly
owned subsidiary until June 30, 1998 when it was sold for book value to Care
Connections of Pennsylvania, a corporation controlled by Phillip Warman, the
Company's Chairman and a general partner of the Corporation's majority
shareholder. On November 1, 1999, the Company acquired the Center for Ambulatory
and Home Infusion Services (CAHIS) from Care Connections or Pennsylvania in a
non-cash transaction in exchange for settlement of inter-company indebtedness.
The total purchase price of $98,804 exceeded the fair market value of the assets
acquired less the liabilities assumed by $155,670. The excess consideration,
recorded as goodwill, represents the goodwill associated with CAHIS's position
in the durable medical equipment market.

         On June 30, 1995, the Company acquired ATLIS Health Services, Inc.,
which then was doing business under the name National Nurses Service. The
Company changed the subsidiary's name to National Nurses Service, Inc. ("NNS").

                                       38


<PAGE>

All of the stock in NNS was acquired by the Company from Atlis Systems, Inc. in
exchange for 500,000 shares of the Company's Class A Common Stock. As a result,
Atlis Systems, Inc. owns approximately 4% of the issued and outstanding shares
of the Company's Class A Common Stock.

         On October 27, 2000 the Company settled the lawsuit for breach of
contract that is styled ATLIS SYSTEMS INC. V. MID-ATLANTIC HOME HEALTH NETWORK,
INC. by paying Atlis Systems, Inc. $900,000 in cash and buying back the 500,000
shares of stock owned by Atlis Systems, Inc.

         When the Company acquired NNS, it also acquired Hunt Country Nursing
Services, Inc. The Company acquired HCNS from Oak Springs Nursing Home Limited
Partnership, the Company's majority shareholder. The Company paid OSNHLP book
value for all the issued and outstanding shares of HCNS, an amount equal to
approximately $1,000.

         National Nurses Services, Inc. has a consult contract with Creative
Health Ventures, Inc. under the terms of which NNS pays CHV $2,000 per month.
CHV is owned by Dennis Light, MAHN's president until August 31, 2000. The
contract with CHV ended August 31, 2000.

         The Company's business efforts are coordinated with those of other
entities related to, or controlled by, Oak Springs Nursing Home Limited
Partnership.

                                       39


<PAGE>

         Oak Springs maintains a workers compensation policy which covers the
Company. The Company paid Oak Springs $160,190 and $160,190 during the years
ended December 31, 2000 and 1999, respectively, related to this policy.

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

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

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

         The company did not file any reports on Form 8-K during the last year.

ASSIGNED
 NUMBER  DESCRIPTION
-------- -----------
(2)      Plan of acquisition, reorganization, arrangement, liquid, or
         succession:

(3)(i)   Articles of Incorporation

(3)(ii)  By-laws of the Company: Previously included with the Company's Form
         10-SB filed on April 30, 1998.

(4)      Instruments defining the rights of holders including indentures: None

(9)      Voting Trust Agreement: None

(10)     Material Contracts:

(11)     Statement regarding computation of per share earnings: Computations can
         be determined from the financial statements.

(16)     Letter on change in certifying accountant: None

(21)     Subsidiaries of the registrant: Previously included with the Company's
         Form 10-SB filed on April 30, 1998.

(24)     Power of Attorney: None

(27)     Financial Data Schedule: Included

(99)     Additional Exhibits: None

                                       40

<PAGE>

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

                                   SIGNATURES

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

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

DATED:   April 16, 2001

                                        MID-ATLANTIC HOME HEALTH
                                        NETWORK, INC.

                                        By     /S/ Philip V. Warman
                                          --------------------------
                                               PHILIP V. WARMAN
                                               CHAIRMAN OF THE BOARD
                                               AND CEO

                                       41