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**SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB**

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                                       OR

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

                         COMMISSION FILE NUMBER 0-29062

                           **AMERICARE HEALTH SCAN, INC.**
             (Exact name of registrant as specified in its charter)

                     **FLORIDA                            65-0714523**
         (State or Other Jurisdiction                (I.R.S. Employer
        of Incorporation or Organization)           Identification No.)

                **20 Northwest 181st Street, Miami, Florida 33169**
               (Address of principal executive offices) (Zip Code)

                                 **(305) 770-1141**
                           (Issuer's Telephone Number)

                                 **(305) 651-0690**
                           (Issuer's Facsimile Number)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT.

                TITLE OF EACH CLASS         NAME OF EACH EXCHANGE ON WHICH REGISTERED
                 COMMON STOCK                               N/A
                 .001 Par Value

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT.

                                 TITLE OF CLASS
                                  COMMON STOCK

                                       1
**PART I

ITEM 1.  DESCRIPTION OF BUSINESS

BACKGROUND**

Americare Health Scan, Inc. is a development stage company that was incorporated
under the laws of the State of Florida on February 3, 1994. On December 31,
1996, Americare Health Scan, Inc. completed a merger with Environmental Digital
Systems, Inc. ("EDS"), a Delaware corporation. Ninety-seven percent (97%) of the
issued and outstanding shares of the surviving corporation went to the
shareholders of Americare Health Scan, Inc., and the merged entity took the name
Americare Health Scan, Inc.

The Company previously owned 25% of the issued and outstanding shares of
Americare Diagnostics, Inc. and Americare International Diagnostics Inc. On
February 28, 2002, at the annual meeting of Americare Health Scan, Inc.,
Americare Technologies, Inc., Americare International Diagnostics, Inc., and
Americare Diagnostics, Inc. the shareholders of said companies overwhelmingly
voted that Americare Technologies, Inc., Americare International Diagnostics,
Inc., and Americare Diagnostics, Inc. be merged into Americare Health Scan, Inc.

Unless the context otherwise requires, the term "Company," as used herein,
refers to Americare Health Scan, Inc., Americare Biologicals, Inc., Americare
Diagnostics, Inc., Americare International Diagnostics, Inc., and Americare
Technologies, Inc. Americare Biologicals, Inc. was incorporated under the laws
of the state of Florida on September 9, 1992. Americare Diagnostics, Inc. was
incorporated under the laws of the state of Florida on February 19, 1996.
Americare Technologies, Inc. was incorporated under the laws of the state of
Florida on February 19, 1996. Americare International Diagnostics was
incorporated under the laws of the state of Florida on June 10, 1996.

**FORWARD LOOKING STATEMENTS INFORMATION**

Information in this Form 10-KSB, including any information incorporated by
reference herein, includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended, and is subject to the safe-harbor created by
such sections. The Company's actual results may differ significantly from the
results discussed in such forward-looking statements. Statements regarding
development and FDA clearance of future products, future prospects, business
plans and strategies, future revenues and revenue sources, the resolution of
pending litigation, future liquidity and capital resources, health care market
directions, future acceptance of the Company's products, possible
recommendations of health care professionals or governmental agencies regarding
use of diagnostic products, possible growth in markets for at-home diagnostic
testing, the possibility of additional equity investments, mergers, acquisitions
or other strategic transactions, as well as other statements contained in this
report that address activities, events or developments that the Company expects,
believes or anticipates will or may occur in the future, and similar statements
are forward-looking statements. These statements are based upon assumptions and
analyses made by the Company in light of current conditions, future developments
and other factors the Company believes are appropriate in the circumstances, or
information obtained from third parties and are subject to a number of
assumptions, risks and uncertainties. Readers are cautioned that forward-looking
statements are not guarantees of future performance and that actual results
might differ materially from those suggested or projected in the forward-looking
statements. Factors that may cause actual future events to differ significantly
from those predicted or assumed include, but are not limited to: the
satisfactory completion of clinical trials demonstrating efficacy of the
Company's products and foreign regulatory clearance of the Company's products;
delays in product development; risks associated with the Company's ability to
successfully develop and market new products on a profitable basis or at all;
availability of labor and sufficient parts and materials to complete the design,

                                       2

construction and manufacturing scale-up of required equipment; ability to
complete the design, construction and manufacturing scale-up on a timely basis
within budget parameters; receipt of any required regulatory approvals for
manufacturing equipment or related facilities; future advances in technologies
and medicine; the uncertainties of health care reform; risks related to the
early stage of the Company's existence and its products' development; the
Company's ability to execute its business plans; engineering development; lead
time for delivery of equipment; the Company's dependence on outside parties such
as its key customers, suppliers, licensing and alliance partners; competition
from major pharmaceutical, medical and diagnostic companies; risks and expense
of government regulation and effects of changes in regulation (including risks
associated with obtaining requisite FDA and other governmental approvals for the
Company's products); the limited experience of the Company in manufacturing and
marketing products; uncertainties connected with product liability exposure and
insurance; risks associated with domestic and international growth and
expansion; risks associated with international operations (including risk
associated with international economies, currencies and business conditions);
risks associated with obtaining and maintaining patents and other protections of
intellectual property; risks associated with uncertainty of litigation and
appeals, and the payment of judgments not reversed on appeal or otherwise; the
Company's limited cash reserves and sources of liquidity; uncertainties in
availability of expansion capital in the future and other risks associated with
capital markets, including funding of ongoing operations, risks associated with
the Company's ability to negotiate and obtain additional financing, equity
investments or strategic transactions on favorable terms or at all, as well as
those listed in the Company's other press releases and in its other filings with
the Securities and Exchange Commission. The Company may determine to discontinue
or delay the development of any or all of its products under development at any
time. Moreover, the Company may not be able to successfully develop and market
new products, enter into strategic alliances or implement any or all of its
operating strategy unless it is able to generate additional liquidity and
working capital.

**THE COMPANY'S PRODUCTS**

The Company is engaged in the development and marketing of diagnostic products
for point-of-care testing. The Company, by virtue of its employment, assignment
and license agreements with Dr. D'Angelo, former employees, and the
above-mentioned subsidiary, affiliate and related entities, owns and/or has
rights to technology embodied in 13 issued patents.

            ANA-SAL® SALIVA COLLECTOR - The Company's Saliva Collector Device is
designed for the collection, recovery, dispensing, and on the spot testing of
saliva samples.

The device consists of a recovery container in the shape of a small plastic test
tube, which embodies a tubular member having an open end and a closed end, and
includes an absorbent element comprised of a polymer foam that absorbs a sample
in sufficient quantity to permit analysis and testing without elaborate sample
preparation or laboratory equipment. One design allows for the application of
pressure to the flexible tube to squeeze the fluid into a reservoir so that it
may be collected for analysis. The volume of saliva collected by the absorbent
element is a function of both the size of the element and the amount of time the
element is kept in the mouth during sample collection.

                                       3

The Company's saliva collector is designed to replace more traditional and
intrusive sample collection methodologies such as drawing blood by venous
puncture or finger prick. Because of the metabolic constituents of saliva, our
saliva collector can be used with a number of diagnostic tests, including
analysis for HIV, hepatitis, peptic ulcers, and drugs of abuse.

A patent for the saliva collector was issued to the Company on June 8,
1999--Patent No. 5,910,122.

         ANA-SAL®  HIV SALIVA TEST - Rapid,  accurate and early diagnosis of HIV
infection is essential to prevent the spread of the disease, and to commence
treatment. The Company is attempting to introduce into the international market
its third generation Ana-Sal® Saliva HIV-1/HIV-2 and Subtype "O" Test. The
saliva collection and analysis procedures take approximately 10 to 20 minutes.
Efforts are currently underway to market and sell this test for professional use
only in countries outside the United States.

         ANA-SAL® PEPTIC ULCER TEST - Peptic Ulcer Disease, a condition
characterized by chronic inflammation and painful sores in the stomach or small
intestine, affects approximately 35% of the adult population of the United
States, and hundreds of millions of people worldwide. Present testing methods
include endoscopy with stomach biopsy (an invasive surgical procedure requiring
removal of stomach tissue), culture, and blood testing. Breath tests require the
patient to drink radioactive materials in some instances. These testing methods
are costly and time-consuming, and some are invasive and uncomfortable.

Upon completion of the merger with Americare International Diagnostics, Inc.,
the Company now owns the first non-invasive, rapid, non-radioactive technology
for the direct detection of the disease process known as Active Helicobacter
Pylori ("H-Pylori") for patients with Peptic Ulcer diseases. The Ana-Sal® Saliva
Test for H. Pylori is simple, provides a cost-effective means for direct
sampling, and requires only a 30 second procedure for the detection of active H.
Pylori infection.

It is estimated that almost 10 million Americans are diagnosed each year with
Peptic Ulcers.

The Company has a pending United States patent application relating to this
technology.

         BLOOD GLUCOSE TEST - Upon completion of the merger with Americare
Diagnostics, Inc., the Company now owns and is developing and obtaining patents
on a noninvasive method for testing analytes, including blood glucose levels.
Our noninvasive method of testing involves the use of a patch and reflectance
meter. The technology of the invention consists of a formulation comprising a
multi-phasic fluid composition. The device initially obtains a biological fluid
sample by extraction of interstitial fluid through the skin, and thereafter
channels such fluid along a pathway within the device so as to make it available
for analysis by contact with an analyte sensitive medium. The analyte sensitive
element will typically contain a membrane that is sensitive to the presence of
glucose or any other analyte. Upon interaction of the fluid and the chemical
within the membrane, a physical and demonstrative change occurs in the membrane,
which is quantitatively determined through the use of a reflective testing
devise, also developed by the company, to give a quantitative glucose value.

Two issued United States patents currently cover this technology.

                                       4
TRANSDERMAL DRUG DELIVERY TECHNOLOGY - Upon  completion of the merger
with Americare Technologies, Inc., the Company will have the ability to develop
transdermal drug delivery systems for high molecular weight drugs. Transdermal
drug delivery systems move a drug from the surface of skin through the skin and
into the bloodstream, typically via an adhesive bandage-like device. Such
systems provide a safe and reliable alternative for the delivery of many drugs.
The unique aspect of the Company's transdermal patch delivery system is the
ability to deliver larger molecules (high molecular weight drugs). The existing
technologies can only transdermally deliver drugs of relatively small molecular
size. The Company believes that its technology will permit transdermal delivery
of drugs of a much greater molecular weight, which would result in many more
drugs being able to be administered transdermally. For example, we believe that
our technology will permit the transdermal administration of insulin to treat
patients suffering from diabetes and then the administration of Calcitonin for
the treatment of patients suffering from osteoperisis.

The Company believes that its development of this technology will give it a
competitive advantage over competing technologies because it provides the
ability to customize the transdermal delivery systems specifically for the drug
to be delivered and the intended clinical indication, and allows for multiple
dosages or multiple drugs upon command and demand of pharmacuticals to be
administered without having to change patches.

Four United States patents have been issued that cover the active and passive
transdermal delivery technology developed by the Company.

None of the above-listed technologies or products has been approved for sale in
the United States by the Food and Drug Administration ("FDA"). Except for the
Saliva Collector and HIV Saliva Test, none of our technologies is ready for sale
outside the United States. The completion of research and development that would
be necessary to turn the Company's technologies into working prototypes and
viable products will require tens of millions of dollars. The Company does not
currently have the funds to undertake any research and development efforts with
regard to its technologies, and there is no assurance that the Company will ever
be able to obtain such funding.

**THE MARKET**

Although saliva diagnostic testing is in its infancy,  the broader diagnostic
test market is highly competitive. As a result, it will be difficult for saliva
diagnostic tests to take market share from serum and urine diagnostic tests.

Similarly, the markets for the other technologies discussed in this Annual
Report are highly competitive, and are characterized by high barriers to entry.

Management believes that the market for the ANA-SAL saliva based tests have a
significant growth potential. The Company estimates that laboratory diagnostics
alone represent $17 billion in annual sales worldwide. Demand for point of care
and field diagnostics, especially at border crossing points between countries,
is also increasing. Management believes that a saliva-based noninvasive method
of testing will expand this opportunity significantly.

**GOVERNMENT REGULATION**

Under the Federal Drug and Cosmetics Act, the FDA regulates almost all aspects
of development, marketing and sale of medical diagnostic devices in the United
States. Since we do not currently have the required funds to commence and
complete the FDA approval process for any of our products, we plan to assemble
and/or manufacture our HIV Saliva Test through subcontractors outside the United
States. Such tests will be sold outside the United States for professional use
only. If and when we obtain adequate funding, we will consider applying for FDA
approval of our products.

                                       5
**FOREIGN REGULATION**

Agencies similar to the FDA regulate medical devices in some foreign countries,
whereas other countries allow unregulated marketing of such devices. The
Company's products will be required to meet the regulations, if any, of the
foreign countries in which they are marketed.

**MANUFACTURING**

The Company believes that most components used in the manufacture of its current
and proposed products are currently available from numerous suppliers located in
the United States, Europe and Asia. However, certain components are available
only from a limited number of suppliers. Although the Company believes that it
will not encounter difficulties in obtaining these components, there can be no
assurance that the Company will be able to enter into satisfactory agreements or
arrangements for the purchase of commercial quantities of such components. The
Company does not currently manufacture, or have the capability to manufacture,
any of the products discussed in this Annual Report.

When the Company does manufacture any of its products, it will be required to
conform to the FDA's "Good Manufacturing Practices" regulations ("GMP"),
International Standard Organization ("ISO") rules, and various other statutory
and regulatory requirements applicable to the manufacture and sale of medical
devices. At this time, the Company has not applied for or received approval from
the FDA to manufacture its products at its facilities. The Company believes that
with appropriate upgrades and modifications its facilities and procedures will
be in compliance with these requirements, and the Company will be permitted to
begin manufacturing. In 1997, the Company was directed by the FDA to cease its
manufacturing at company facilities until such time as the quality control
procedures were brought into compliance. The Company currently does not
manufacture any products at its facilities.

**COMPETITION**

The markets in which we will participate are highly competitive. The Company is
aware of certain other entities, specialized biotechnology firms, as well as
universities and other research institutions, which have patented, developed, or
are developing technologies and products that are competitive with the Company's
products and technologies. These entities, most of which are established, have
substantially greater research, marketing and financial resources than the
Company. The Company expects that the number of products competing with its
actual and proposed products will increase as the potential benefits of the
Company's technologies become more widely recognized.

**PATENTS AND PROPRIETARY RIGHTS**

There is no assurance that any pending patent application will result in a
patent being issued, or that any patent obtained will be effective in excluding
all others from using our technology. Our failure to obtain patent protection,
or illegal use by others of any patents we may obtain, may have an adverse
effect on our business, financial condition and operating results. In addition,
the laws of certain foreign countries do not protect proprietary rights to the
same extent as the laws of the United States.

                                       6

The Costs of prosecuting or defending patent infringement claims are
significant. There is no assurance that patent infringement claims will not be
asserted or prosecuted against us. Even if we obtain patent protection for our
products, the validity of any patents may be challenged. Any such claims, with
or without merit, could be time-consuming and costly to defend, and could divert
management's attention and focus.

The Company directly or through one of its affiliates owns or has rights to the
following patents:

1. Patent No. 5,404,614, A Selectable Dosage Transdermal Drug Delivery System,
   issued April 11, 1993, and currently owned by Americare Technologies, Inc.;

2. Patent No. 5,443,080 Integrated System for Biological Fluid Constituent
   analysis, issued December 22, 1993, and currently owned by Americare
   Diagnostics, Inc.;

3. Patent No. 5,336,213, A Selectable Dosage Transdermal Delivery System, issued
   August 9, 1994, and currently owned by Americare Technologies, Inc.;

4. Patent No. 5,462,064 Integrated system for Biological Fluid Constituent
   Analysis, issued October 31, 1995, and currently owned by Americare
   Diagnostics, Inc.;

5. Patent No. 5,505,957, A Selectable Dosage Transdermal Delivery system, issued
   April 9, 1996, and currently owned by Americare Technologies, Inc.;

6. Patent No. 5,614,212, A Method of Transdermally Administering High Molecular
   Weight Drugs with a Polymer Skin Enhancer, issued March 25, 1997, and
   currently owned by Americare Technologies, Inc.;

7. Patent No. 5,756,117, A Multidose Transdermal Drug Delivery System,issued May
   26, 1998, and Assigned to and now owned by Americare Health Scan, Inc.;

8. Patent No. 5,910,122, Saliva Collector with Aspirating Pipette, issued June
   8, 1999, and currently owned by Americare Health Scan, Inc.

9. Patent No. 5,932,240, A Multidose Transdermal Drug Delivery System, issued
   August 3, 1999, and now owned by Dr. D'Angelo;

10. Patent No. 5,989,840, Estimation of active infection by Helicobacter Pylori,
    issued November 11, 1999, and currently owned by Americare International
    Diagnostics, Inc.; and

11. Patent 2,185,555, issued December 14, 1999, Integrated Systems for
    Biological Fluid Constituent Analysis, currently owned by Americare Health
    Scan, Inc.

12. Patent No. 6,024,975, Method for Transdermally Administering High Molecular
    Weight Drugs with a Polymer Skin Enhancer, issued February 15, 2000.

13. Patent PCT\US95\05889, Saliva Collector, currently contested before the
    Board of Patent Appeals and Interference.

                                       7
**EMPLOYEES AND DISTRIBUTORS**

The Company currently has two full-time employees and two full-time consultants.
For the past several years, the efforts of these employees and consultants have
been focused on handling the Company's legal affairs and day to day operations,
including the various pieces of litigation in which the Company and its
President have been involved as both a Plaintiff and Defendant. The Company is
not subject to any collective bargaining agreement, and believes that its
relationships with its employees are good. The officers of the Company are as
follows: Joseph P. D'Angelo, President and Chief Executive Officer; Dr. Horace
Seidel, Secretary; Dr. Bruce Greenberg, Treasurer; and Abraham Schaefer, Vice
President.

**RISK FACTORS

FACTORS AFFECTING OPERATING RESULTS**

This Annual Report contains forward-looking statements that involve risks and
uncertainties. The statements contained in this Annual Report that are not
purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, including, without limitation, statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. The
Company intends that such forward-looking statements be subject to safe harbors
created thereby. Wherever possible, we have identified these forward-looking
statements by words such as "plans," "believes," "anticipates," "expects" or
"intends" and similar language.

All forward-looking statements included in this document are based on
information available to us on the date of this document, and the Company
assumes no obligation to update any such forward-looking statements. Our actual
results may differ materially as a result of certain factors, including those
set forth hereafter and elsewhere in this Annual Report. Potential investors
should consider carefully the following factors, as well as the more detailed
information contained elsewhere in this Annual Report, before making a decision
to invest in the common stock of the Company.

**LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT; NEED FOR ADDITIONAL CAPITAL**

There is limited historical financial information about the Company upon which
to base an evaluation of our performance, or to make a decision regarding an
investment in shares of our common stock. The Company has incurred a net loss
for the year ended December 31, 2002 of $1,343,901 and for the year ended
December 31, 2001 of $1,227,107. The Company has accumulated stockholders'
deficits of $6,153,883 through December 31, 2002 and $4,948,110 through December
31, 2001. The Company's cash and equivalents balance at December 31, 2002 was $0
and $33,419 at December 31, 2001. Our use of cash in operations was $326,288 for
the year ended December 31, 2002 and $342,138 for the year ended December
31,2001.

We do not know if our products and processes will achieve significant levels of
marketing acceptance. Our business is subject to all of the problems, expenses,
delays and risks inherent in the establishment of a new business enterprise,
including limited capital resources, delays in product development, uncertain
market acceptance, and the absence of any operating history. Therefore, there is
no assurance that our business or products will be successful, or that we will
be able to achieve or maintain profitable operations. We may encounter
unforeseen difficulties that may deplete our capital resources more rapidly than
anticipated.

                                       8

The Company will be required to make huge investments in research and
development, and spend additional money to maintain and expand its marketing
efforts. We may seek equity financing to provide the necessary capital for these
efforts. We cannot be sure that any financing will be available on acceptable
terms, if at all. If such financing is not available on satisfactory terms, we
may be unable to continue, develop or expand our business, complete development
of new products, or penetrate existing markets at the rate desired, and our
operating results may be adversely affected. Equity financing could result in
additional dilution to existing shareholders.

**MARKET RISKS OF A NEW BUSINESS**

We have formulated our business strategies based on certain assumptions
regarding the marketability of our products and processes to potential
customers. Any future success of the Company may depend upon several factors
including changes in governmental regulation, increased levels of competition
within the technology fields we are attempting to penetrate, changes in general
economic conditions, and increases in operating costs.

**RELIANCE ON LIMITED NUMBER OF PRODUCTS**

All of our products are based on applications in the medical diagnostic testing
device industry. Although the applications vary from product to product, a
decline in market demand for medical diagnostic testing devices could have a
significant adverse impact on the Company. The Company currently has only one
marketable medical diagnostic test, the HIV Saliva Test, which currently cannot
be sold in the United States.

**DEPENDENCE ON MARKETING EFFORTS**

We are dependent on our ability to market our products. We must increase the
level of awareness of our products by devoting substantial management and
financial resources to our marketing efforts, and we do not know if these
efforts will be successful.

**DEPENDENCE ON KEY EMPLOYEES**

We believe that our success will depend to a significant extent upon the efforts
and abilities of Dr. D'Angelo, the Company's President. The loss of the services
of Dr. D'Angelo would have a material adverse effect on our business, financial
condition, and results of operations. In addition, our future success will
depend on our ability to attract and retain qualified technical and management
personnel. The Company does not have written employment agreements with any of
its employees or officers.

**PATENTS, LICENSES AND INTELLECTUAL PROPERTY CLAIMS**

Our success depends, in part, on our ability to obtain patents, licenses and
other intellectual property rights for our products and technology. As a result
of the recent merger, we have 13 issued U.S. patents. The process of prosecuting
and obtaining a patent is long and expensive, and we cannot be sure that we will
be able to prosecute pending and future patent applications to the point where
patents are issued, that we will be able to protect our technology, or that the
competition will not be able to develop similar technology. There are currently
no pending or threatened claims or lawsuits against the Company for patent
infringement. Although we do not believe that we have infringed on any patented
technology, any successful infringement claim would materially and adversely
affect our business, financial condition, and results of operations.

                                       9

In the past, and likely in the future, litigation may be necessary to enforce
patents issued to us, to protect trade secrets or know-how owned by us, to
defend us against claimed infringement of the rights of others, and to determine
the scope and validity of the proprietary rights of others. Any litigation could
result in substantial cost and diversion of effort, which could have a material
adverse effect on our financial condition and operating results. Adverse
determinations in any litigation could result in the Company's loss of
proprietary rights, subject us to significant liabilities to third parties,
require us to seek licenses from third parties, or prevent us from marketing our
products, any of which could have a material adverse effect on our financial
condition and results of operations. We do not know if any license under a third
party's intellectual property rights will be available to us on reasonable
terms, if at all.

**POSSIBLE VOLATILITY OF STOCK PRICE**

The Company's common stock is traded on the Pink Sheets in the Over the Counter
Bulletin Board. Selling the Company's common stock may be difficult because of
low or non-existent volume (small quantities of shares are bought and sold), and
security analyst and news media coverage of the Company is almost non-existent.
These factors could result in lower prices and larger spreads in the bid and ask
prices for our shares. We believe that factors such as announcements of
developments related to our business, fluctuations in our quarterly or annual
operating results, failure to meet securities analyst expectations, general
conditions in the marketplace and the worldwide economy, announcements of
technological innovations or enhancements by us or our competitors, developments
in patents or other intellectual property rights, and developments in our
relationships with clients and suppliers could cause the price of our common
stock to fluctuate, perhaps substantially. In recent years, the stock market has
experienced extreme price fluctuations, which have often been unrelated to the
operating performance of affected companies. These fluctuations could adversely
affect the market price of the Company's common stock.

**AUDITOR'S CONCERNS**

The report issued by the independent certified public accountants that audited
the financial statements of the Company at December 31, 2002, includes a
paragraph that raises doubts as to our ability to continue in business. The
financial statements as of that date do not include any adjustments that would
be needed if we went out of business.

**INSURANCE**

The Company currently has no Product Liability Insurance. We intend to obtain
product liability coverage before we begin to sell any of our products in large
quantities, but there is no assurance that we will be able to obtain such
liability insurance on acceptable terms. If we are unable to obtain this
insurance, we would be exposed to significant losses in the event someone is
injured due to one of our products.

The Company currently does not maintain key-man life insurance on any of its
employees. Nor does the Company maintain liability insurance for directors,
officers, or employees.

**COMPETITION**

The markets in which we are seeking to compete are very competitive. We are
aware of other companies, universities, and research institutions that have
patented, developed, or are developing products that are or may be competitive
with our existing or planned products. These potential competitors are better
established and have greater resources than we do.

                                       10
**CONTROL BY MANAGEMENT**

Dr. D'Angelo, his family, and affiliated entities currently own 89% of the
Company's issued and outstanding shares. Dr. D'Angelo, his family, and
affiliated entities also currently hold promissory notes from the Company and
its subsidiary that are secured by the Company's assets. These notes are payable
upon demand.

**Social, Political, and Economic Risks Associated with Foreign and International
Trade**
Currently, the Company's plan is to market and sell its products outside the
United States. Social, political and economic conditions inherent in foreign
operations and international trade may change, including changes in the laws and
policies that govern foreign investment and international trade. To a lesser
extent social, political and economic conditions may cause changes in U.S. laws
and regulations relating to foreign investment and trade. Social, political or
economic changes could, among other things, make it more difficult or more
expensive for us to sell our products in foreign countries. Accordingly, there
is no assurance that changes in social, political or economic conditions will
not have a substantial adverse effect on our business.

**No Dividends Anticipated**

The Company intends to retain any future earnings to fund the operation and
expansion of its business. We do not anticipate paying cash dividends on our
shares in the foreseeable future.

**ITEM 2.   DESCRIPTION OF PROPERTY**

The Company has available approximately 20,805 square feet of finished office,
laboratory and warehouse space in Miami, Florida. The current annual rent is
$221,573. The Company has executed a lease with Universal Realty and Development
Company, a division of Daycon Investors Associates, Inc., and a related entity
owned by Dr. D'Angelo, his family, and affiliated entities. The Company is
accruing rent payments at this time.

The Company owns 4,000,000 shares of Interventional Research Technologies, Inc.,
a corporation that was involved in developing patents. These shares are recorded
in the Company's financial statements as other assets, and were valued at their
original cost of $4,000. During 2000, this investment was written down to zero.

Property and equipment, including fixed assets specifically identified as office
equipment, medical equipment, automobiles, and leasehold improvements, less
accumulated depreciation, were listed at a net book value of $97,329 as of
December 31, 2002 and $113,507 as of December 31, 2001. Depreciation expense for
2002 was $32,538 and for 2001 was $34,303.

See "PATENTS AND PROPRIETARY RIGHTS" section above.

         Flood Loss

On November 26, 1999, subsequent to the installation of coffee making equipment,
there was a leak that resulted in a flood at the Company's premises. The flood
destroyed lab equipment with a cost of $439,511, and accumulated depreciation of
$164,817. The insurance company that provided the building with liability
coverage went out of business, and the damage caused by the flood has not been
repaired or reimbursed to date. The Company has filed legal actions against both
the insurance underwriter and the installer of the coffee equipment.

                                       11
**ITEM 3.  LEGAL PROCEEDINGS**

The Corporation is involved in several pieces of litigation, which are set forth
below.

In 1995, Americare Biologicals, Inc., Joseph P. D'Angelo, Americare Transtech,
Inc., and International Medical Associates, Inc. (the "Plaintiffs") filed suit
in Florida state court (Broward County) against Technical Chemicals and
Products, Inc. ("TCPI") and its then chairman Jack Aronowitz, Simplex Medical
Systems, Inc. ("Simplex") and its then officers Henry B. Schur and Nicholas
Levandoski, and Analyte Diagnostics, Inc. ("Analyte"), claiming misappropriation
of trade secrets and interference with business relationships relating to the
Company's proprietary Saliva Collection System and HIV Saliva Test. On January
25, 1999, judgment was entered in favor of Plaintiffs against Schur, Levandoski,
TCPI, Aronowitz, Simplex and Analyte. On appeal, $4.3 Million of the $4.8
Million in damages awarded against Schur, Levandoski, Aronowitz and TCPI was
affirmed. Only the $500,000 judgment against Aronowitz was reversed. In December
2000, the appeal bond that had been posted by TCPI was ordered paid, and
Americare Biologicals, Inc. received $388,890. Nicholas Levandoski, against whom
Americare Biologicals, Inc. and Americare Transtech, Inc. had judgments totaling
$1,000,000, filed for Chapter 7 Bankruptcy protection in 2000. The Plaintiffs
are currently attempting to collect the $3,000,000 judgment against Schur. Of
the $3 million judgment against Schur, $1 million each was awarded to Americare
Biologicals, Inc, Americare Transtech, Inc, and Dr. D'Angelo.

In 1997, Americare Diagnostics, Inc., Joseph P. D'Angelo, Americare Transtech,
Inc., and International Medical Associates, Inc., (the "Plaintiffs") filed suit
in federal court (Southern District of Florida) against TCPI and its then
chairman Jack Aronowitz, and Simplex and its then officers Henry B. Schur and
Nicholas Levandoski, claiming patent infringement and misappropriation of trade
secrets relating to the Company's patented biological fluids constituent
analysis system. A confidential settlement agreement was reached with TCPI on
February 3, 2001, which resolved all litigation between TCPI and the Plaintiffs.
TCPI, which filed a voluntary Chapter 11 bankruptcy petition on July 3, 2001,
still owes approximately $38,700 under the settlement agreement. The Company
settled with Simplex on June 26, 2001. The company has filed its proof of claim
and is a creditor in the bankruptcy proceedings. It is closely monitoring the
bankruptcy proceedings.

In 1997, Henry B. Schur filed suit against Dr. D'Angelo, Americare Transtech,
Inc., Americare Health Scan, Inc., Americare Biologicals, Inc., International
Medical Associates, Inc., and Americare Diagnostics, Inc. asserting claims
relating to the tape recording and use of a conversation Schur had with Dr.
D'Angelo on the street. Currently the case is not moving forward due to the
incarceration of Mr. Shur.

TCPI and Aronowitz, in 1999, filed action in federal court (Southern District of
Florida) against the Company, Joseph P. D'Angelo, and Creative Connections,
Inc., claiming that Plaintiffs had engaged in false advertising in violation of
the Lanham Act, and common law defamation. On August 2, 2001, Mr. Aronowitz's
filed a voluntary dismissal without prejudice of his Lanham Act and defamation
claims and the company is in the process of determining whether to seek
attorney's fees and costs from Aronowitz.

                                       12

In 1999, the Company, Americare Biologicals, Inc., and Joseph P. D'Angelo
("Plaintiffs") filed a defamation suit in Florida state court against TCPI, Jack
Aronowitz and Robert Zelinka. Plaintiffs settled with TCPI in February 2001. On
July 27, 2001, Plaintiffs entered into a confidential settlement with Zelinka.
The Court granted the Companies Motion to Strike and Enter Default against Mr.
Aronowitz. On February 7, 2003 the Company dismissed the action against Mr.
Aronowitz reserving the right to bring an action on damages only in the future.

In 1999, the Company, Americare Biologicals, Inc., and Joseph P. D'Angelo
("Plaintiffs") filed a defamation lawsuit in Florida state court against Warren
Vitale. The Plaintiff is currently conducting discovery and hopes to have its
Motion for Summary Judgment heard after further discovery is taken.

In November 1999, the building in which the Company is a tenant sustained
substantial damage as a result of water leakage from a coffee machine that had
been installed and maintained by Perfect Choice Coffee, Inc. Some of the
Company's equipment and work in process was damaged and/or destroyed. The
landlord's insurance company went bankrupt and did not cover the losses. As a
result, the Company, landlord, and related entities jointly filed two separate
lawsuits against the underwriter (Jackson Agency, Inc.) and the coffee machine
company (Perfect Choice Coffee, Inc.) seeking to recover their losses.
Consolidated discovery is ongoing and this matter is currently not set for
trial.

Henry B. Schur, a former employee of the Company, has filed an interference
claim with the U.S. Patent and Trademark Office alleging that he, not Dr.
D'Angelo, is the principal inventor of the Company's Saliva Collection System.
In view of the January 1999 judgment that Schur misappropriated trade secrets
relating to the Company's Saliva Collection System, and Schur's assignment of
all rights, title or interest in the Saliva Collection System to Americare
Transtech, Inc., the Company believes that its exclusive ownership of the
technology has been established.

In June, 2002, the Company filed a lawsuit against Market Surveys International,
Inc. and Bernard Schmitt, individually, Dade County, Circuit Court Case No.:
02-15173, alleging breach of contract regarding Market Surveys International,
Inc.'s agreement to provide marketing services to the Company. The case was
settled on July15, 2002 wherein the defendants agreed to return shares of stock
in the company to the Company and retain 11,500 shares of stock in the Company
to compensate it for the marketing services provided for the company. However,
pursuant to said agreement, the company retains the option to purchase the stock
from Defendant for 120 days for the price of $3.00. Pursuant to said agreement,
the case was dismissed and the Company decided not to exercise its option during
the option period.

In August 13, 2002, Terry Walcott filed a lawsuit against the Company for breach
of promissory note and money lent totally regarding promissory notes and loans
to the Company totaling $25,000. On January 28, 2003, the Plaintiff was granted
partial summary on two of the notes totally $20,000. The remainder of the case
remains ongoing and discovery is continuing.

In the normal course of business, the Company is involved in various disputes,
claims and/or litigation. Given the current financial condition of the Company,
the resolution of any of the above-discussed matters against the Company by
judgment or the award of attorney's fees and costs could have a material adverse
impact on the consolidated financial statements.

                                       13
**ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

On February 28, 2002, the Company submitted to its security holders to vote on
the merger of Americare Diagnostics, Inc., Americare International Diagnostics,
Inc., and Americare Biologicals, Inc. into AMIT. As a result of the merger of
the aforementioned companies, Americare Health Scan, Inc. now controls over
thirteen patents and other technologies. Dr. Joseph P. D'Angelo, his family, and
affiliated entities control the Company, and Dr. D'Angelo is the President of
the Company and its affiliates. The Merged Corporations agreed to accept
2,000,000 shares of stock in the Company each in exchange for shares in the
Company. The Stockholders of the Merged companies were awarded stock in
Americare Health Scan, Inc. pursuant to the number of shares owned in the Merged
companies as follows: Americare Technologies, Inc.: 8.98% of the shares of the
stock of the Merged Corporation.; Americare Diagnostics, Inc.: 8.98% of the
shares of the stock of the Merged Corporation; and, Americare International
Diagnostics, Inc.: 10.72% of the shares of the stock of the Merged Corporation.
The Stockholders of the Merged Companies were notified of the merger at the
notice of annual meeting of the corporation, annual meeting of the corporation
and by correspondence dated 3/22/02. During the period of 2002 the company
issued 4,406,301 shares to the stockholders of the merged companies pursuant to
the aforementioned merger.

                                     **PART II

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

MARKET INFORMATION**

Currently the Company's equity is publicly traded in the Over the Counter
Bulletin Board. The Company's common stock was previously on the pink sheets.
There have been extended periods of no trading of the Company's stock since it
began trading in the Pink Sheets and currently the Over the Counter Bulletin
Board. During that same period, the share price has ranged from 58 cents to
approximately $6. The current 52 week high is $3.95 and the 52 week low is 58
cents. Additional shares have been authorized for directors but not issued.

As of December 31, 2002, there were 900 shareholders of record of the Company's
common stock. The Company has a total of 19,224,970 shares of common stock
currently issued and outstanding, and 16,748,298 of those shares are restricted.

DIVIDENDS

There have been no cash dividends declared on the Company's common stock since
inception. Dividends will be declared at the sole discretion of the Company's
Board of Directors.

                                       14
**ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

PLAN OF OPERATION**

The Company's ultimate objective is to build a fully integrated research and
development, manufacturing, marketing and distribution organization capable of
providing the medical diagnostic and drug delivery markets with products that
offer accuracy, efficacy, ease of use and reduced costs. In order to accomplish
this objective, the Company has developed the following strategy:

         Provide a Broad Range of Products The Company believes that a
         diversified product base can increase potential business opportunities,
         provide a stream of new product introductions over time, and reduce the
         risks associated with reliance on a single product or technology:

         Focus on Large Market Opportunities The Company will concentrate its
         development efforts on large existing markets in which the Company
         believes there could be significant demand for its products; and

         Enter into Strategic Alliances The Company intends to enter into
         strategic alliances with large medical diagnostic and pharmaceutical
         companies for the marketing of its medical diagnostic products. Because
         these companies have significantly greater financial, marketing and
         other resources than the Company, they would be able to market the
         Company's products through a broad range of distribution channels. The
         Company's strategy with respect to the development and
         commercialization of its transdermal drug delivery products is to enter
         into strategic alliances with third parties that can, in some cases,
         fund a portion of product development costs, participate in clinical
         testing, obtain regulatory approval, and market the products. In an
         effort to exercise control over the quality of its products and capture
         a larger portion of the revenues therefrom, the Company will seek to
         retain manufacturing rights to products developed under such strategic
         alliances.

Our cash on hand is insufficient to meet our anticipated needs for working
capital, capital expenditures, and business development for the next twelve
months. At our current utilization rate of $28,000 per month, we will need
$336,000 for the next fiscal year. The Company does not currently maintain any
lines of credit, nor does it have any agreements in place for additional
capital.

Since we do not currently have the required funds to commence and complete the
FDA approval process, we plan to assemble and/or manufacture our HIV Saliva Test
Kits outside the United States. If and when we obtain adequate funding, we will
consider applying for FDA approval of our products.

The Company plans to sell its Saliva HIV Test into international markets
primarily through independent distributors with knowledge of their local
markets. The Company, through independent distributors, is currently seeking
regulatory approval of, and the right to market, its Saliva HIV Test Kit in
Brazil, Argentina, Paraguay, and Uruguay, and Venezuela. Principal international
markets for our Saliva HIV Test include insurance testing, public health and
laboratory testing.

Any orders received from the above-referenced countries for the Company's Saliva
HIV Test will be accompanied by assignable, divisible, and irrevocable letters
of credit confirmed by a major bank in the United States. The Company's plan is
to fund necessary raw material, purchasing, and manufacturing costs through the
assignment of portions of any such letters of credit to lenders or suppliers.

On October 15, 2001, the Company entered into a confidential agreement with an
independent distributor located in Miami, Florida, pursuant to which the
distributor was granted the right to market the Company's Saliva HIV Test Kits
in Brazil, Argentina, Paraguay and Uruguay. Under the terms of this agreement,
it is the distributor's responsibility to obtain all necessary regulatory
approvals from relevant government entities, and the distributor will be paid a
commission on sales of the Company's Saliva HIV Test in the relevant countries.

With respect to its other technologies, the Company is seeking to obtain equity
financing so that it can complete research and development and pursue regulatory
approvals in the United States and internationally.

                                       15
**ITEM 7.  FINANCIAL STATEMENTS**

                   AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

                   AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                           December 31, 2002 and 2001

                                                           TABLE OF CONTENTS

                                                                        Page No.

Financial Statements:

         Independent Auditors' Report                                          2

         Consolidated Balance Sheets                                           4

         Consolidated Statements of Operations                                 5

         Consolidated Statements of Changes in Stockholders' Deficit           6

         Consolidated Statements of Cash Flows                                 7

         Notes to Consolidated Financial Statements                            8

                         **INDEPENDENT AUDITORS' REPORT**

To the Board of Directors and Stockholders' of
Americare Health Scan, Inc., and its Subsidiary

We have audited the accompanying consolidated balance sheet of Americare Health
Scan, Inc., and its Subsidiary, (the "Company") as of December 31, 2002, and the
related consolidated statements of operations, changes in stockholders' deficit
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The consolidated
balance sheet of the Company as of December 31, 2001 and the consolidated
statements of operations, changes in stockholders' deficit and cash flows for
the year then ended and from February 3, 1994 (Date of inception) to December
31, 2001 were audited by other auditors whose report thereon, dated March 15,
2002 expressed a qualified opinion with respect to a going concern uncertainty.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Americare Health Scan, Inc.,
and its Subsidiary as of December 31, 2002 and the results of its operations and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements the Company's dependence on outside financing, lack of existing
commitments from lenders to provide necessary financing, lack of sufficient
working capital, and recurring losses from operations raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

April 11, 2003
Plantation, Florida

                                      F-1

**AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 and 2001****ASSETS**

                                                 December 31,    December 31,
                                                    2002            2001
                                                 ------------    ------------

**CURRENT ASSETS**
   Cash                                          $         -     $     33,419
   Notes receivable - related parties                  29,323              -
                                                 ------------    ------------
        **TOTAL CURRENT ASSETS**                           29,323          33,419
                                                 ------------    ------------

**PROPERTY AND EQUIPMENT, NET OF DEPRECIATION**            97,329         113,507
                                                 ------------    ------------

**OTHER ASSETS**
   Investments                                            615             615
   Patents and intangibles, net of amortization       122,907         129,251
                                                 ------------    ------------
       **TOTAL OTHER ASSETS**                             123,522         129,866
                                                 ------------    ------------

       TOTAL ASSETS                              $    250,174    $    276,792
                                                 ============    ============

                      **LIABILITIES AND STOCKHOLDERS' DEFICIT****CURRENT LIABILITIES**
   Accounts payable                              $    172,093    $     64,573
   Accrued officer's compensation                   1,352,000       1,144,000
   Accrued expenses                                 1,756,080       1,527,350
   Notes payable-stockholders                         444,296         431,127
   Notes payable-related parties                      847,950         710,622
   Convertible notes payable                          199,460         147,260
   Accrued interest- stockholder and
      related parties                               1,632,178       1,198,749
   Accrued interest- other                                 -            1,221
                                                 ------------    ------------
       **TOTAL CURRENT LIABILITIES**                    6,404,057       5,224,902

**STOCKHOLDERS' DEFICIT**
  Common stock, par value $0.001 per share;
     50,000,000 shares authorized;  19,224,970
     and 14,765,000 shares issued and outstanding
     in 2002 and 2001, respectively                    19,225          14,765
  Additional paid-in capital                        1,696,531       1,355,218
  Deficit accumulated during the development stage (7,869,639)     (6,318,093)
                                                  ------------    ------------
     **TOTAL SHAREHOLDERS' DEFICIT**                  (6,153,883)     (4,948,110)
                                                  ------------    ------------

     **TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT**  $    250,174    $    276,792
                                                  ============    ============

    The accompaning notes are an integral part of these financial statements.

                                      F-2

**AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATION
                 FOR THE YEARS ENDED DECEMBER 31, 2002 and 2001
 AND FOR THE PERIOD FROM FEBRUARY 3, 1994 (DATE OF INCEPTION) TO DECEMBER 31, 2002**

                                         December 31,  December 31,    Inception to
                                             2002         2001      December 31, 2002
                                         ------------  ------------  ------------

**SALES**                                   $         -   $         -   $         -

**OPERATING EXPENSES:**
   Other general and administration           381,803       374,328     2,185,990
   Wages                                      274,793       313,886     1,721,437
   Rent                                       239,075       237,634     1,192,008
   Research and development costs                  -             -      1,086,783
                                         ------------  ------------  ------------
**TOTAL OPERATING EXPENSES**                     895,671       925,848     6,186,218
                                         ------------  ------------  ------------

**OPERATING LOSS**                              (895,671)     (925,848)   (6,186,218)

**OTHER INCOME (EXPENSE)**
   Settlement and miscellaneous income          4,301            -          4,301
   Litigation-settlement proceeds                  -         70,253       459,143
   Litigation expense                         (22,500)           -        (22,500)
   Interest expense                          (430,031)     (365,374)   (1,630,523)
   Loss from investments                           -            (21)       (5,386)
   Loss from flood                                 -             -       (274,694)
   Loss on disposal of fixed asset                 -         (6,117)       (6,117)
                                         ------------  ------------  ------------
                                             (448,230)     (301,259)    (1,475,776)

**LOSS BEFORE INCOME TAXES**                   (1,343,901)    (1,227,107)   (7,661,994)

**INCOME TAX EXPENSE (BENEFIT)**                       -              -             -
                                         ------------  ------------  ------------

**NET LOSS**                                $ (1,343,901) $ (1,227,107) $ (7,661,994)
                                         ============= ============  ============

**NET LOSS PER SHARE**                     $      (0.07) $      (0.08)

**WEIGHTED AVERAGE NUMBER OF
    SHARES OUTSTANDING**                    19,224,970    14,765,148

   The accompanying notes are an integral part of these financial statements.

                                      F-3

**AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
 AND FOR THE PERIOD FROM FEBRUARY 3, 1994 (DATE OF INCEPTION) TO DECEMBER 31, 2002**

                                                                 ADDITIONAL
                                            COMMON STOCK          PAID-IN     DEFICIT
                                          SHARES      AMOUNT      CAPITAL   ACCUMULATED   TOTAL
                                        ----------- ----------- ----------- ----------- -----------

**INCEPTION, FEBRUARY 3, 1994**                  50,000 $        50 $     5,750 $        -  $     5,800

  Net loss (Inception to December 31, 1995)
                                                 -           -      (98,832)    (98,832)
                                        ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 1995**                50,000          50       5,750     (98,832)    (93,032)

Stock split (116 to 1)                    5,750,000       5,750      (5,750)         -           -

Issuance of common shares
  regarding acquisition of assets
  from Americare Transtech, Inc.,
  acquisition of subsidiary Americare
  Biologicals, Inc., and regarding
  pretrading private placements.          6,541,800       6,542   1,259,516          -     1,266,058

Issuance of common shares
  regarding merger with Enironmental Digital
  Systems, Inc.                             370,370         370        (370)         -            -

Net loss
                                                 -                        -    (765,181)    (765,181)
                                         ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 1996**           12,712,170      12,712   1,259,146    (864,013)     407,845

Issurance of common shares

  for services rendered                       5,000           5      16,245          -        16,250

Net loss
                                                 -                       -     (785,509)    (785,509)
                                        ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 1997**            12,717,170      12,717   1,275,391  (1,649,522)    (361,414)

Issuance of common shares
  to acquire 25% interest in Americare
  Diagnostics, Inc. and Americare
  International Diagnostics, Inc.
  (based on book value of affiliated

  companies)                              2,000,000       2,000          -           -         2,000

Net loss
                                                 -                       -     (846,859)    (846,859)
                                         ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 1998**            14,717,170      14,717   1,275,391  (2,496,381)  (1,206,273)

Issuance of common shares
 for private placement                       30,000          30      49,970          -        50,000

Issuance of common shares
  for services rendered
  (based on value of services)               12,278          12      23,252          -        23,264

Issuance of common shares
  for corporate counsel and director fees
  (based on trading activity at time
   of issuance)                               2,500           3       4,272          -         4,275

Net loss
                                                 -                       -   (1,471,031)  (1,471,031)
                                          ----------- ----------- ----------- ----------- -----------
**BALANCES AT DECEMBER 31, 1999**            14,761,948      14,762   1,352,885  (3,967,412)  (2,599,765)

Issuance of common shares
  for director fees (based on trading activity
  (based on trading activity at time of
  issuance)                                   3,200           3       2,333         -          2,336

Net loss
                                                 -           -           -   (1,123,574)  (1,123,574)
                                        ----------- ----------- ----------- ----------- -----------
**BALANCES AT DECEMBER 31, 2000**            14,765,148      14,765   1,355,218  (5,090,986)  (3,721,003)

Net loss
                                                 -           -           -   (1,227,107)  (1,227,107)
                                        ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 2001**            14,765,148      14,765   1,355,218  (6,318,093)  (4,948,110)

Issuance of common shares

  for conversion of note payable            340,000         340     171,124          -       171,464

Issuance of common shares in exchage

  for services performed                     10,000          10       9,490          -         9,500

Issuance of common shares
  pursuant to merger                      4,109,822       4,110     160,699    (207,645)     (42,836)

Net Loss
                                                 -           -           -   (1,343,901)  (1,343,901)
                                        ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 2002**            19,224,970 $    19,225 $ 1,696,531 $(7,869,639)$(6,153,883)
                                        =========== =========== =========== =========== ============

   The accompanying notes are an integral part of these financial statements.

                                      F-4

**AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (continued)
                                December 31, 2002
  AND THE PERIOD FROM FEBRUARY 3, 1994 (DATE OF INCEPTION) TO DECEMBER 31, 2002**

                                                                 ADDITIONAL
                                            COMMON STOCK          PAID-IN     DEFICIT
                                          SHARES      AMOUNT      CAPITAL   ACCUMULATED   TOTAL
                                        ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 1999**            14,761,948      14,762   1,352,885  (3,967,412)  (2,599,765)

Issuance of common shares
  for director fees (based on trading
  activity

  (based on trading activity at time
  of issuance)                                3,200           3       2,333          -         2,336

Net loss
                                                -            -           -   (1,123,574)  (1,123,574)
                                        ----------- ----------- ----------- ----------- ------------

**BALANCES AT DECEMBER 31, 2000**            14,765,148      14,765   1,355,218  (5,090,986)  (3,721,003)

Net loss
                                                 -            -           -  (1,227,107)  (1,227,107)
                                        ----------- ----------- ----------- ----------- ------------

**BALANCES AT DECEMBER 31, 2001**            14,765,148      14,765   1,355,218  (6,318,093)  (4,948,110)

Issuance of common shares

  for conversion of note payable            340,000         340     171,124          -       171,464

Issuance of common shares in exchage

  for services performed                     10,000          10       9,490          -         9,500

Issuance of common shares
  pursuant to merger                      4,109,822       4,110     160,699    (207,645)     (42,836)

Net Loss
                                                 -           -           -   (1,343,901)  (1,343,901)
                                         ----------- ----------- ----------- ----------- -----------

**BALANCES AT DECEMBER 31, 2002**            19,224,970      19,225   1,696,531  (7,869,639)  (6,153,883)
                                         ==========  ==========  ==========  ==========  ===========

   The accompanying notes are an integral part of these financial statements.

                                      F-5

**AMERICARE HEALTH SCAN, INC. AND SUBSIDIARY**
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                  December 31,     December 31,     Inception to
                                    2002              2001            December
                                                                      31, 2002
                                  ------------     ------------    -------------

CASH FLOWS FROM
OPERATING ACTIVITIES:
  Net loss                        $(1,343,901)     $(1,227,107)    $ (7,661,994)
  Adjustments to reconcile net
  loss to net cash
   used in operating activities:
    Depreciation and amortization       41,155           42,920          408,600
    Undepreciated cost of
     equipment lost in flood                 -                -          274,694
    Loss on disposal of fixed assets         -            6,117            6,117
    Changes in assets and liabilities:
         Other assets                        -                -                -
         Accounts payable              107,520            1,368          172,091
         Accrued officer's
          compensation                 208,000          208,000        1,352,000
         Accrued expenses              228,730          261,190        1,756,080
         Accrued
           interest-stockholder
            and related parties        432,208          364,153        1,630,957
         Accrued interest-other              -            1,221            1,221
                                  ------------     ------------    -------------

  Net cash used in operating
   activities                        (326,288)        (342,138)      (2,060,234)
                                  ------------     ------------    -------------

CASH FLOWS FROM
 INVESTING ACTIVITIES:
  Amounts loaned to related
   entities                           (29,323)                         (176,969)
  Collections of loans receivable            -                -          117,165
  Purchase of investment                     -                -          (6,000)
  Loss from investment                       -               21            5,386
  Payments for patents                       -                -        (150,793)
  Purchase of property
   and equipment                       (5,750)          (1,375)        (746,120)
                                  ------------     ------------    -------------

  Net cash used in investing
   activities                         (35,073)          (1,354)        (957,331)
                                  ------------     ------------    -------------

CASH FLOWS FROM
 FINANCING ACTIVITIES:
  Cash repaid on stockholder loan            -         (28,522)         (38,222)
  Proceeds from stockholder notes       13,169           57,048          439,296
  Proceeds from related party notes     81,609          208,385          861,084
  Proceeds from convertible notes      223,664          140,000          375,924
  Proceeds from the issuance
   of common stock                       9,500                -        1,379,483
                                  ------------     ------------    -------------

  Net cash provided by financing
   activities                          327,942          376,911        3,017,565
                                  ------------     ------------    -------------

NET INCREASE (DECREASE) IN CASH       (33,419)           33,419                -

CASH, BEGINNING                         33,419                -                -
                                  ------------     ------------    -------------

CASH, ENDING                      $          -     $     33,419    $           -
                                  ============     ============    =============

Non-cash Activity:
 Issuance of common shares        ------------
  for conversion of note payable  $    171,464
                                  ============
 Issuance of common shares
  pursuant to merger:             $    164,809
                  Assets              (12,883)
                  Liabilities           55,719
                  Retained Deficit   (207,645)
                                  ------------
                                  $    151,926
                                  ============

   The accompanying notes are an integral part of these financial statements.

                                       F-6

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF ACTIVITIES

Americare Health Scan, Inc. is a development stage company that was incorporated
under the laws of the State of Florida on February 3, 1994. Americare Health
Scan, Inc. and its subsidiary, Americare Biologicals, Inc. are engaged in the
business of developing technological solutions for medical, dental, and high
tech industries, and consequently bringing the developed technologies to the
market place. The Company has developed and patented a saliva collector that
could be used in an array of saliva based tests. The Company and entities with
which it is affiliated have also been researching other products for
development. The Company has not yet obtained necessary approvals to market the
products it is developing.

BASIS OF PRESENTATION

Since both the Company and its subsidiary are development stage companies, the
Company is required to follow Financial Accounting Standards Board Statement No.
7, "Accounting and Reporting by Development Stage Enterprises," (SFAS 7).
Pursuant to SFAS 7, the financial statements include cumulative amounts of
revenues, expenses, and cash flows from the enterprise's inception.

GOING CONCERN

As shown in the accompanying financial statements, the Company incurred a net
loss of $1,343,901 for the year ended December 31, 2002, and as of that date,
current liabilities exceeded current assets by $6,374,734 and its total
liabilities exceeded its total assets by $6,153,883. Those factors, as well as
the need to obtain additional financial resources, create an uncertainty about
the Company's ability to continue as a going concern. Management of the Company
is developing a plan to finance its continuing research and development
activities through the issuance of debt or equity securities. The ability of the
Company to continue as a going concern is dependent on the success of the plan
or the continued support of the Company's major shareholder. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Americare Health
Scan, Inc. and its subsidiary, Americare Biologicals, Inc. intercompany balances
and transactions have been eliminated in consolidation. Americare Biologicals,
Inc. was acquired by the Company on September 30, 1996 and was accounted for
under the pooling of interests method.

                                      F-7

FINANCIAL INSTRUMENTS

In accordance with Financial Accounting Standards Board Statement No. 107
"Disclosures about Fair Value of Financial Instruments," (SFAS 107), the Company
has, were appropriate, estimated the fair value of financial instruments. Where
these estimates approximate carrying value, no separate disclosure of fair value
is shown.

CREDIT RISK

All of the Company's notes receivable are from related parties and are not
considered a significant credit risk.

RECLASSIFICATION

Certain reclassifications were made to the 2001 consolidated financial
statements in order for the presentation to conform to the 2002 consolidated
financial statement presentation.

CASH

For purposes of the financial statements, the Company considers all unrestricted
highly liquid investments with an original maturity of three months or less to
be cash equivalents. Cash equivalents are carried at cost, which approximates
market value.

PROPERTY AND EQUIPMENT

All property and equipment are recorded at acquisition costs and adjusted
annually for depreciation. The Company uses the straight line method for
depreciation of newly acquired fixed assets, depreciating the assets over
useful lives based upon the type of depreciable property acquired.

Expenditures for routine maintenance and repairs are charged to expense when
incurred, and the cost of additions and betterments are capitalized.

When certain events or changes in circumstances occur regarding the use of
long-lived assets, it is management's policy to perform an impairment analysis
in accordance with Financial Accounting Standards Board Statement No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be disposed of", (SFAS 121).

PATENTS AND INTANGIBLES

Patents are accounted for at cost. Amortization of these intangible assets is
provided on a straight-line basis over their respective useful lives (i.e. their
legal lives of 17.5 years).

LOSS PER SHARE

The Company has adopted Financial Accounting Standards Board Statement No.
128,"Earnings Per Share," (SFAS 128). Under SFAS 128, basic net income (loss)
per common share is computed by dividing net income (loss) available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted income (loss) per common share reflect the maximum dilution that
would have resulted from the assumed exercise related to dilutive stock options
and is computed by dividing net income (loss) by the weighted average number of
common shares and all dilutive securities outstanding.

FINANCIAL STATEMENT ESTIMATES

The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

RECENT PRONOUNCEMENTS

The Financial Accounting Standards Board has recently issued several new
accounting pronouncements, which may apply to the Company.

Statement No. 141, Business Combinations (SFAS 141) establishes revised
standards for accounting for business combinations, using the purchase method.
Specifically, the statement eliminates the pooling method, provides new guidance
for recognizing intangible assets arising in a business combination, and calls
for disclosure of considerably more information about a business combination.
This statement is effective for business combinations initiated on or after July
1, 2001. The adoption of this pronouncement on July 1, 2001 did not have a
material effect on the Company's financial position, results of operations or
liquidity.

Statement No. 142, Goodwill and Other Intangible Assets (SFAS 142) provides new
guidance concerning the accounting for the acquisition of intangibles, except
those acquired in a business combination, which is subject to SFAS 141, and the
manner in which goodwill and other intangibles should be accounted for
subsequent to their initial recognition in the financial statements. This
statement is effective for all fiscal years beginning after December 15, 2001.
The Company is currently amortizing its patents over their useful and legal life
of 17.5 years. The Company believes that the implementation of SFAS 142 did not
have a material effect on the Company's financial position, results of
operations or liquidity.

Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets supercedes Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of (SFAS 121). Though it retains
the basic requirements of SFAS 121 regarding when and how to measure an
impairment loss, SFAS 144 provides additional implementation guidance. SFAS 144
excludes goodwill and intangibles not being amortized, among other exclusions.
SFAS 144 also supersedes the provisions of APB 30, Reporting the Results of
Operations, pertaining to discontinued operations. Separate reporting of a
discontinued operation is still required, but SFAS 144 expands the presentation
to include a component of an entity, rather than strictly a business segment as
defined in SFAS 131, Disclosures about Segments of an Enterprise and Related
Information. This statement is effective for all fiscal years beginning after
December 15, 2001. The Company believes that the implementation of SFAS 144 on
April 1, 2002 did not have a material effect on the Company's financial
position, results of operations or liquidity.

Statement No. 145, Recession of SFAS Statements No. 4 and 64, Amendment of SFAS
No. 13, and Technical Corrections," updates, clarifies and simplifies existing
accounting pronouncements. SFAS No. 4, which required all gains and losses from
the extinguishments of debt to be aggregated and, if material, classified as an
extraordinary item, net of related tax effect was rescinded, and as a result,
SFAS No. 64, which amended SFAS No. 4, was rescinded as it was no longer
necessary. SFAS No. 145 amended SFAS 13 to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications which have economic effects similar
to those of sale-leaseback transactions. The Company believes that the
implementation of SFAS 145 did not have a material effect on the Company's
financial position, results of operations or liquidity.

                                      F-8

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

                                  2002                 2001
                                ---------           ---------

Office Equipment                $  24,296           $   7,936
Medical Equipment                 190,173             190,173
Leasehold Improvements             90,470              90,470
                                ---------           ---------

 Subtotal                         304,939             288,579
Less: Accumulated
      Depreciation               (207,610)           (175,072)
                                ---------           ---------

Net Amount                      $  97,329           $ 113,507
                                =========           =========

Depreciation expense was $32,538 for 2002 and $34,303 for 2001.

NOTE 3 - INVESTMENTS

During 1996, the Company acquired 4,000,000 shares of Interventional Research
Technologies, Inc., a closely held company, for a cost of $4,000. This
corporation is no longer operating and has been dissolved by the State of
Florida. In 2000, the value of this investment was written down to zero.

The Company, effective January 1, 1998, acquired 5,563,918 shares (a 25%
interest) in Americare Diagnostics, Inc. in exchange for 1,000,000 shares of the
Company's stock. Americare Diagnostics, Inc. owns the patent for the invention
titled Integrated System for Biological Fluid Constituent Analysis. Because the
Company exercises significant influence, Americare Diagnostics is accounted for
under the equity method. The Company's share of net loss was $21 for 2001.

The Company, effective January 1, 1998, acquired 4,662,263 shares (a 25%
interest) in Americare International Diagnostics, Inc. in exchange for 1,000,000
shares of the Company's stock. Americare International Diagnostics, Inc. has a
patent pending for the invention titled Method and Device for Determination of
Saliva Constituents - estimation of active infection by Helicobater Pylori.
Because the Company exercises significant influence, Americare International
Diagnostics is accounted for under the equity method. The Company's cumulative
share of net loss exceeds the amount invested. Therefore, its carrying value
under the equity method is zero.

                                      F-9

NOTE 4 - PATENTS AND INTANGIBLES

The Company has obtained the following four patents: A Multidose Transdermal
Delivery System (issued May 26, 1998); A Method for Transdermally Administering
High Molecular Weight Drugs with a Polymer Skin Enhancer (issued February 15,
2000); Saliva Collector with Aspirating Pipette (issued June 8, 1999) and
Integrated Systems for Biological Fluid Constituent Analysis (issued December
14, 1999).

The Company and related companies have obtained eight other patents: Integrated
System for Biological Fluid Constituent Analysis (issued December 22, 1993);
Integrated System for Biological Fluid Constituent Analysis (issued October 31,
1995); A Selectable Dosage Transdermal Drug Delivery System (issued April 11,
1993); A Selectable Dosage Transdermal Delivery System (issued August 9, 1994);
A Selectable Dosage Transdermal Delivery System (issued April 9, 1996); A Method
of Transdermally Administering High Molecular Weight Drugs with a Polymer Skin
Enhancer (issued March 25, 1997); a Multidose Transdermal Drug Delivery System
(issued August 3, 1999); Estimation of Active Infection by Helicobacter Pylori,
(issued November 11, 1999).

There are currently no license agreements between the Company and its affiliates
relating to any of the above listed patents.

Intangible assets are summarized by major classification as follows:

                                                      2002              2001
                                                   ----------         ---------
                  Patent                           $  150,793         $ 150,793
                  Others                                2,273                -
                                                   ----------         ---------
                                                      153,066           150,793
                  Less accumulated amortization      ( 30,159)          (21,542)

                                                   $  122,907         $ 129,251

Amortization expense for years ended December 31, 2002 and 2001 was $8,617 and
$8,617 respectively.

NOTE 5 - DEFERRED TAXES

Deferred taxes are provided for the temporary differences in basis of the
Company's assets and liabilities and their reported amounts. These differences
relate principally to the expected benefits of net operating loss carryforwards.
Deferred tax assets and liabilities are determined based on the enacted rates
that are expected to be in effect when these differences are expected to
reverse. Deferred tax expense or benefit is the result of the changes in the
deferred tax assets and liabilities.

As of December 31, 2002 and 2001 the amount of net operating loss carryforwards
was $7,867,240 and $6,318,093 respectively.

                                      F-10

Due to uncertainty  regarding the levels of future  earnings,  the Company has
recorded a valuation  allowance to reflect the estimated amount of deferred tax
assets that may not be realized, principally due to the expiration of net
operating loss carryforwards.

The components of the net deferred tax assets are as follows:

                                         2002                 2001
                                    ------------          -----------
Deferred tax assets:

Net operating loss carryforwards    $ 1,573,448           $ 1,263,619
Less: Valuation allowance            (1,573,448)           (1,263,619)
                                     -----------           -----------

Net deferred tax asset              $         0           $         0
                                    ===========           ===========

The Company's tax benefit differs from the "expected" tax expense (benefit) for
the years ended December 31, (computed by applying the Federal Corporation tax
rate of 34% to loss before taxes), as follows:

                                                         2002         2001

         Statutory rate applied to loss
           before income taxes                      $( 457,000)     $ ( 417,000)
         State income taxes, net of
           federal income tax effect                   (71,000)         (65,000)
         Changes in valuation allowance                528,000          482,000

                                                            -       $        -

NOTE 6 - NOTES PAYABLE AND ACCRUED EXPENSES - STOCKHOLDERS

During 2002, 2001, and prior years, the President of the Company and major
stockholder has advanced funds to the Company. The loan balances as of December
31, 2002 and 2001 are $380,230 and $384,030, respectively.

In addition, on August 28, 1999 the Board of Directors approved an annual salary
of $208,000 for the President of the Company retroactive to June 30, 1996. The
amount of accrued salary as of December 31, 2002 and 2001 is $1,352,000 and
$1,144,000, respectively.

These amounts due to the President and majority stockholder are payable on
demand. The amount of accrued interest payable to the President as of December
31, 2002 and 2001 is $679,368 and $508,387, respectively.

In May 2000, the Company, as debtor, and its Subsidiary, as additional debtor,
issued a promissory note secured by a security agreement to the Company's
President and majority stockholder relating to the loans and accrued expenses
described above. The promissory note is in the principal amount of $1.4 million,
with a blanket provision for additional advances up to the principal sum of $2
million. The note bears interest at 2% over the prime rate with a minimum of 8%
and a maximum of 18%. The security agreement encumbers essentially all assets of
the Company and its Subsidiary.

In addition to the loans and accrued expenses payable to the President and
majority stockholder of the Company, additional loans were advanced to the
Company by other stockholders. These loans are partially evidenced by interest
bearing promissory notes and some of the promissory notes provide an option to
convert the loan into shares of the Company's common stock. The loan balances as
of December 31, 2002 and 2001 are $64,067 and $47,097, respectively.

                                      F-11

NOTE 7 - NOTES PAYABLE & ACCRUED EXPENSES - RELATED PARTIES

During 2002, 2001, and prior years, the Company received loans from related
parties. The loan balances as of December 31, 2002 and 2001 are $847,950 and
$710,622, respectively.

In addition, expenses for rent and management fees payable to related parties
are being accrued. The amount of accrued expenses as of December 31, 2002 and
2001 is $1,756,080 and $1,527,350 respectively (see Note 9).

These amounts due to related parties are payable on demand. The amount of
accrued interest payable to the related parties as of December 31, 2002 and 2001
is $938,103 and $689,777, respectively.

In May 2000, the Company, as debtor, and its Subsidiary, as additional debtor,
issued promissory notes secured by security agreements to two related companies,
controlled by the Company's President and majority stockholder, relating to the
loans and accrued expenses described above. The promissory notes are in the
total principal amount of $1.2 million. The notes bear interest at 2% over the
prime rate with a minimum of 8% and a maximum of 18%. The security agreements
encumber essentially all assets of the Company and its Subsidiary.

NOTE 8 - CONVERTIBLE NOTES PAYABLE

During 2002 and 2001, the Company received loans from a former employee and
unrelated third parties, in exchange for which the Company signed promissory
notes to the parties that contain an option allowing the note holder to convert
the loans into shares of the Company's common stock. These loans are payable on
demand.

In February 2002, the Company, as debtor, and its Subsidiary, as additional
debtor, entered into a security agreement with one of the note holders. The
security agreement, encumbers essentially all assets of the Company and its
Subsidiary in an amount up to $250,000 in accordance with a blanket secured
promissory note signed in 2002. The balance of funds advanced by this party as
of December 31, 2002 and 2001 were $169,460 and $122,260, respectively.

NOTE 9 - EQUITY

On February 3, 1994, the Company issued its initial 50,000 shares.

During 1996 the Board of Directors voted and approved a 116 to 1 stock split,
therefore increase shares outstanding to 5,800,000. In 199, the Company also
issued 6,912,170 shares and obtained additional funding in excess of capital of
$1,259,146 from pretrading private placements and acquisition of American
Transtech, Inc., Americare Biologicals, Inc., and Environmental Digital Systems,
Inc.

In 1997, the Company issued 5,000 shares of $0.001 par value common stock for
services rendered. The shares issued were valued and recorded on the Company's
books at the value of the service rendered.

In 1998, the Company issued 2 million common shares to acquire a 25% interest in
Americare Diagnostic, Inc., and Americare International Diagnostic, Inc. The
value of shares issued was based on the book value of the interest acquired.

During a private placement in 1999, the Company issued 30,000 common shares. The
Company also issued 12,278 shares of common stock for services rendered in 1999.
The shares issued were recorded at the value of the service rendered. During
1999, the Company issued 2,500 shares of common stock to its corporate counsel
and director for unpaid fees. The value of shares issued was equal to fair
market value based on trading activity.

                                      F-12

During 2000, the Company issued 3,200 shares of common stock to its director for
unpaid fees. The value of shares issued was based on trading activity at the
time of issuance.

During 2002, a debt holder selected to convert his notes payable to common
stock. The conversion rate and the market value of the shares were equal and no
additional value related to the conversion was necessary.

In 2002, the Company issued 10,000 shares common stock for services rendered.
The shares issued were valued and recorded on the Company's books at the value
of the service rendered.

During the fourth quarter of 2002, the Company has issued 4,109,822 of common
shares to stockholders of Americare Technologies, Inc., Americare Diagnostic,
Inc., and Americare International Diagnostic, Inc., in exchage for the net
assets of the acquired companies See Note XXX.

NOTE 10 - LOSS PER SHARE

Basic loss per share is computed by dividing loss for the period by the weighted
average number of common shares outstanding during the period. Diluted loss per
share does not include the effects of common stock equivalents as they are
antidilutive.

Basic weighted and dilutive average numbers of shares outstanding at December 31
are as follows:

                                                      2002               2001
  Basic and dilutive weighted average
    number of shares outstanding                    19,224,970      14,765,000

NOTE 11 - RELATED PARTY TRANSACTIONS

During 2002 and 2001, the Company leased production, warehouse, and office space
from a related company on a month to month basis. Rent charged is based on
square footage used. Rent charged by the related company and accrued by the
Company was $221,573 in 2002 and $221,573 in 2001. On October 15, 2001, the
Company signed a lease with the related company. Under the lease, rent remained
the same and accruals continued at the same rate until December 31, 2001, when
accrued payments of $55,390 for the quarter ending December 31, 2001 and a
$20,000 security deposit is due. Future rent is to be payable on a monthly
basis. Subsequent to December 31, 2001, payments required under the lease have
not been made.

Future minimum lease payments are as follows:

                     Production           Warehouse         Administrative
                     ----------           ---------         --------------
         2003        $ 163,637             $ 19,596            $ 38,340
         2004          163,637               19,596              38,340
         2005          163,637               19,596              38,340
         2006          163,637               19,596              38,340
         2007          163,637               19,596              38,340

In addition, the Company incurred management fees to another related corporation
for bookkeeping, janitorial, and administrative services. Fees charged are based
on an allocation of salaries and payroll taxes for employees of the related
party, based on the percentage of time spent on behalf of the Company.
Management fees of $45,453 in 2002 and $50,876 in 2001 are included in accrued
expenses.

The related corporations referred to in the previous paragraphs are controlled
by the President of the Company (see Notes 7 - Notes Payable & Accrued Expenses
- Related Party).

NOTE 12 - OFFICER'S COMPENSATION

On August 28, 1999 the Board of Directors approved an annual salary of $208,000
for the President of the Company retroactive to June 30, 1996. The amount of
accrued salary as of December 31, 2002 and 2001 is $1,352,000 and $1,144,000,
respectively (see Note 6 - Notes Payable & Accrued Expenses - Stockholders).

                                      F-13

NOTE 13 - STOCK COMPENSATION

Financial Accounting Standards Board Statement No. 123, Accounting for
Stock-Based Compensation ("Statement No. 123") encourages companies to recognize
expense for stock-based awards based on their estimated value on the date of
grant. Statement No. 123 requires the disclosure of pro forma net income or loss
in the notes to the financial statements if the fair value method is not
elected.

In 2002, the Board of Directors authorized shares be issued to Directors who
attended Board meetings as follows: Joseph P. D'Angelo 400 shares; Horace Seidel
400 shares; Joel Kallan 400 shares; Heywood Broad 300 shares; Samuel Mallis 200
shares; Eugene D'Angelo 100 shares; Abraham Schaefer 100 shares; Bruce Greenberg
100 shares; David Maya 100 shares; and Eugene Foltuz 300 shares.

NOTE 14 - LITIGATION

In 1995, Americare Biologicals, Inc., Joseph P. D'Angelo, Americare Transtech,
Inc., and International Medical Associates, Inc. (the "Plaintiffs") filed suit
in Florida state court (Broward County) against Technical Chemicals and
Products, Inc. ("TCPI") and its then chairman Jack Aronowitz, Simplex Medical
Systems, Inc. ("Simplex") and its then officers Henry B. Schur and Nicholas
Levandoski, and Analyte Diagnostics, Inc. ("Analyte"), claiming misappropriation
of trade secrets and interference with business relationships relating to the
Company's proprietary Saliva Collection System and HIV Saliva Test. On January
25, 1999, judgment was entered in favor of Plaintiffs against Schur, Levandoski,
TCPI, Aronowitz, Simplex and Analyte. On appeal, $4.3 Million of the $4.8
Million in damages awarded against Schur, Levandoski, Aronowitz and TCPI was
affirmed. Only the $500,000 judgment against Aronowitz was reversed. In December
2000, the appeal bond that had been posted by TCPI was ordered paid, and
Americare Biologicals, Inc. received $388,890. Nicholas Levandoski, against whom
Americare Biologicals, Inc. and Americare Transtech, Inc. had judgments totaling
$1,000,000, filed for Chapter 7 Bankruptcy protection in 2000. The Plaintiffs
are currently attempting to collect the $3,000,000 judgment against Schur. Of
the $3 million judgment against Schur, $1 million each was awarded to Americare
Biologicals, Inc, Americare Transtech, Inc, and Dr. D'Angelo.

In 1997, Americare Diagnostics, Inc., Joseph P. D'Angelo, Americare Transtech,
Inc., and International Medical Associates, Inc., (the "Plaintiffs") filed suit
in federal court (Southern District of Florida) against TCPI and its then
chairman Jack Aronowitz, and Simplex and its then officers Henry B. Schur and
Nicholas Levandoski, claiming patent infringement and misappropriation of trade
secrets relating to the Company's patented biological fluids constituent
analysis system. A confidential settlement agreement was reached with TCPI on
February 3, 2001, which resolved all litigation between TCPI and the Plaintiffs.
TCPI, which filed a voluntary Chapter 11 bankruptcy petition on July 3, 2001,
still owes approximately $38,700 under the settlement agreement. The Company
settled with Simplex on June 26, 2001. The company has filed its proof of claim
and is a creditor in the bankruptcy proceedings. It is closely monitoring the
bankruptcy proceedings.

In 1997, Henry B. Schur filed suit against Dr. D'Angelo, Americare Transtech,
Inc., Americare Health Scan, Inc., Americare Biologicals, Inc., International
Medical Associates, Inc., and Americare Diagnostics, Inc. asserting claims
relating to the tape recording and use of a conversation Schur had with Dr.
D'Angelo on the street. Currently the case is not moving forward due to the
incarceration of Mr. Shur.

TCPI and Aronowitz, in 1999, filed action in federal court (Southern District of
Florida) against the Company, Joseph P. D'Angelo, and Creative Connections,
Inc., claiming that Plaintiffs had engaged in false advertising in violation of
the Lanham Act, and common law defamation. On August 2, 2001, Mr. Aronowitz's
filed a voluntary dismissal without prejudice of his Lanham Act and defamation
claims and the company is in the process of determining whether to seek
attorney's fees and costs from Aronowitz.

                                      F-14

In 1999, the Company, Americare Biologicals, Inc., and Joseph P. D'Angelo
("Plaintiffs") filed a defamation suit in Florida state court against TCPI, Jack
Aronowitz and Robert Zelinka. Plaintiffs settled with TCPI in February 2001. On
July 27, 2001, Plaintiffs entered into a confidential settlement with Zelinka.
The Court granted the Companies Motion to Strike and Enter Default against Mr.
Aronowitz. On February 7, 2003, the Company dismissed the action against Mr.
Aronowitz reserving the right to bring an action on damages only in the future.

In 1999, the Company, Americare Biologicals, Inc., and Joseph P. D'Angelo
("Plaintiffs") filed a defamation lawsuit in Florida state court against Warren
Vitale. The Plaintiff is currently conducting discovery and hopes to have its
Motion for Summary Judgment heard after further discovery is taken.

In November 1999, the building in which the Company is a tenant sustained
substantial damage as a result of water leakage from a coffee machine that had
been installed and maintained by Perfect Choice Coffee, Inc. Some of the
Company's equipment and work in process was damaged and/or destroyed. The
landlord's insurance company went bankrupt and did not cover the losses. As a
result, the Company, landlord, and related entities jointly filed two separate
lawsuits against the underwriter (Jackson Agency, Inc.) and the coffee machine
company (Perfect Choice Coffee, Inc.) seeking to recover their losses.
Consolidated discovery is ongoing and this matter is currently not set for
trial.

Henry B. Schur, a former employee of the Company, has filed an interference
claim with the U.S. Patent and Trademark Office alleging that he, not Dr.
D'Angelo, is the principal inventor of the Company's Saliva Collection System.
In view of the January 1999 judgment that Schur misappropriated trade secrets
relating to the Company's Saliva Collection System, and Schur's assignment of
all rights, title or interest in the Saliva Collection System to Americare
Transtech, Inc., the Company believes that its exclusive ownership of the
technology has been established.

In June, 2002, the Company filed a lawsuit against Market Surveys International,
Inc. and Bernard Schmitt, individually, Dade County, Circuit Court Case No.:
02-15173, alleging breach of contract regarding Market Surveys International,
Inc.'s agreement to provide marketing services to the Company. The case was
settled on July 15, 2002 wherein the defendants agreed to return shares of stock
in the company to the Company and retain 11,500 shares of stock in the Company
to compensate it for the marketing services provided for the company. However,
pursuant to said agreement, the company retains the option to purchase the stock
from Defendant for 120 days for the price of $3.00. Pursuant to said agreement,
the case was dismissed and the Company decided not to exercise its option during
the option period.

In August 13, 2002, Terry Walcott filed a lawsuit against the Company for breach
of promissory note and money lent totally regarding promissory notes and loans
to the Company totaling $25,000. On January 28, 2003, the Plaintiff was granted
partial summary on two of the notes totally $20,000. The remainder of the case
remains ongoing and discovery is continuing.

                                      F-15

NOTE 15 - MERGER

On February 28, 2002, the Company's stockholders approved a Plan of Merger under
which Americare Technologies, Inc., Americare International Diagnostics, Inc.
and Americare Diagnostics, Inc. would be merged with Americare Health Scan,
Inc., the surviving corporation. The stockholders of all three merging
corporations also approved the plan. Under the terms of the Plan of Merger, the
stockholders of each corporation will receive a proportionate share of two
million shares of the common stock of Americare Health Scan, Inc. in exchange
for 100% of their shares of the merging corporation.

The actual merger took place during the fourth quarter of 2002. For accounting
purposes, the acquisition has been treated as a capital transaction an as a
recapitalization of the Company. The financial statements have been adjusted to
reflect the changes in equity structure. The operations are those of the Company
for all periods presented from the recapitalization date. All three merging
corporations were under common control and the accompanying consolidated balance
sheets reflect at historical cost the net assets of the merging corporations and
Americare Health Scan, Inc., at December 31, 2002. No proformas are shown here
since the results of operations of the merging corporations are considered
immaterial. For the recapitalization, the equity accounts of the Company have
been restated based on the shares issued in the exchange.

The historical book value of the assets and liabilities of the merging
corporations at the time of the acquisition is summarized as follows:

                       Assets                $  54,083
                       Liabilities           $  96,920

                                      F-16

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

The Company has retained Berkovits, Lago & Company, LLP to conduct independent
audits of the Company's books and records since 2002. The independent auditors'
report for the year ended December 31, 2002 is included herein in Item 7 above.

There were no disagreements between the Company and Berkovits, Lago & Company,
LLP on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedures, which disagreements, if not resolved
to the satisfaction of Berkovits, Lago & Company, LLP would have caused it to
make reference to the subject matter of the disagreements in connection with its
report. PART III

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

The Board of Directors of Americare Health Scan, Inc. currently consists of
eight members. All directors hold office until the next annual meeting of
stockholders scheduled for April 22, 2003, or until their successors are duly
elected and qualified. Officers are elected to serve, subject to the discretion
of the Board of Directors, until the successors are appointed.

The names of the directors and executive officers of the Company, their
positions with the Company, and certain biographical information follow:

**Joseph P. D'Angelo, D.D.S. (President, Chief Executive Officer and Director)** has
served as the President, Treasurer, and Chairman of the Company's Board of
Directors since its inception. He is, and has been since 1986, President and
Chairman of the Board of Americare Services, Inc., a multifaceted health care
facility serving South Florida by providing a full range of home care medical
services. These services include providing patients with pharmaceutical
supplies, nursing services, intravenous therapy, nutritional therapy, and
durable medical equipment. He has developed a variety of medical devices,
application technology, and diagnostic products. Dr. D'Angelo's research into
the production of an AIDS auto-vaccine has been recognized by the National
Institutes of Health, and he is the co-developer of the Company's transdermal
technology. He has been Knighted by the Knights of Malta, Rome, Italy, and has
had a flag flown over the United States Capital in his honor. The City of
Buffalo proclaimed June 1, 1992, as "Dr. Joseph P. D'Angelo Day" in recognition
of his many years of service and contributions to his community.

**Joel P. Kallan, M.D. (Director)** is and has been a director and shareholder since
the Company's inception. He is currently and has been a practicing orthopedic
surgeon. Since 1980, Dr. Kallan has been a clinical professor in the Department
of Orthopedics at the University of Miami School of Medicine. He is a Diplomat
of the National Board of Medical Examiners, and has served on the Advisory
Boards of many organizations. Dr. Kallan is also a member of the Company's
Product Review Board.

                                       16
**Horace  Seidel,  M.D.  (Secretary/Director)**  is  and  has  been a  director  and
shareholder since the Company's inception.  He was Director of Medical Education
at Memorial  Hospital from 1974-1994.  He graduated from the Long Island College
of Medicine, and practiced Internal Medicine from 1954 to 1970. He was professor
of  medicine  in the  Department  of  Medicine  at  Hahnemann  Medical  College,
Philadelphia.  He is a former member of the Committee on  Accreditation  for the
Florida Medical Association.

**Heywood Broad (Director)**  graduated from L.I.U.  University in 1952.  Majored in
Business  Administration.  Korean War Vet.  Worked in the retailing arena for 10
years and went into the advertising  profession,  selling and advertising  space
for the Arch Diocese of New York and the Episcopal  Diocese of New York and Long
Island. After 19 years in advertising, moved to Florida and opened a Health Care
Supply Company in 1995,  offering  products and services to the Nursing Home and
Assisted Living  Industry.  Has been in the Health Care Business for the last 16
years.  Mr. Broad is on the Board of Directors  of the Florida  Assisted  Living
Alliance which is the state association representing the ALF Industry.

**David Maya  (Director)**  currently  serves as the CEO and  President  of Medistat
Pharmacy Services,  a company he founded and grew to in excess of $15 Million of
annual sale within a three year  period.  Priior to founding  Medistat,  Mr Maya
served as  Director  of  Pharmacy  at Coram  Health  Services,  a national  home
infusion  company,  and prior to that he served as General  Branch  Manager  for
Rotech. Mr Maya has over 13 years of Pharmacy Management  experience and holds a
Doctor of Pharmacy  Degree from the  University  of Florida.  Mr. Maya also is a
licensed Consultant  Pharmacist.  Mr. Maya serves on the Board of Directors of a
number of Health  Care  Organizations  and is often  called  upon to  consult by
national nursing home entities. He is married and has three children.

**Bruce Greenberg (Treasurer/Director)** currently serves as Chief Financial Officer
for Medistat Pharmacy Services.  Prior to joining Medistat,  Mr Greenberg served
as President  and Chief  Financial  Officer for Flagship  Pharmacy and Medchoice
Pharmacy  Services.  Mr.  Greenberg  has over twenty  years of Senior  Financial
Management experience in a variety of industries.  Mr Greenberg currently serves
on the Board of  Directors  of a number of  organizations  and  consults to many
companies in the Health Care Industry.  He holds degrees in Accounting,  Finance
and Economics,  as well as a Masters In Business  Administration.  He is married
and has five children.

**Abraham Schaefer, M.S.B. (Vice President/Director)** served as Management
Assistant at S&R Ironworks, Inc, where he assisted in management and
administration of start-up of the company. He also served as Director of
Shepherds Group where he researched and analyzed approximately thirty start-up
businesses for investment purposes. Mr. Schaefer received his Master of Science
Degree in Business from the John Hopkins University. He also received a Bachelor
of Talmudic Law Degree from Ner Israel Rabbinical College. He was ordained as
Family Court Judge in Israel in 1998. Mr Schaefer is skilled in analytical
approaches to national and international business and finance, banking, market
analysis, business operations, acquisitions and forecasting.

**M. Eugene D'Angelo (Director)** Mr. D'Angelo's multi-disciplinary background gives
him a unique ability to apply advanced analytical techniques to a variety of
challenging problems. He has extensive education and experience in many areas of
science, engineering, finance and mathematics; and has been using the computer
to solve difficult problems for over 35 years. Mr. D'Angelo earned a Ph.D from
University of Central Florida in Industrial Engineering, and Masters Degrees in
Finance and Operations Research from the State University of New York at
Buffalo.

                                       17
**ITEM 10. EXECUTIVE COMPENSATION**

The Table below summarizes the annual compensation of Dr. D'Angelo, the
Company's President and sole officer during 1999-present:

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

NAME                     TITLE          SALARY/FISCAL YEAR        BONUS         AWARDS
-------------------- ---------------- ----------------------- -------------- ----------------

Joseph P. D'Angelo      President     $208,000.00 (deferred)*      N/A            N/A
-------------------- ---------------- ----------------------- -------------- ----------------

* In 1999, the Directors of the Company passed a Resolution authorizing the
accrual of salary to Dr. D'Angelo retroactive to June 1996, on a demand basis.
On the basis of an annual salary of $208,000.00 per year, it is estimated that
the Company owes Dr. D'Angelo $1,352,000 for the period of July 1996 through
December 31, 2002.

**ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.**

The following tables set forth certain information regarding the ownership of
the Company's common stock as of December 31, 2002, by the Company's directors,
officers and employees.

----------------------- -------------------- ----------------------- --------------
TITLE OF CLASS           NAME & ADDRESS         AMOUNT AND NATURE        PERCENT
                                               OF BENEFICIAL OWNER      OF CLASS
----------------------- --------------------- ----------------------- --------------
Common Par Value $.001  Joseph P. D'Angelo      17,253,518 Shares          89%
                        Individually, family,  President & Director
                        affiliated entities.
---------------------- ---------------------- ----------------------- --------------
Common Par Value $.001  Directors & Officers    17,292,076 Shares          89%
                        as a group
---------------------- ---------------------- ----------------------- --------------

No other individual or entity owns 5% or more of the Company's issued and
outstanding shares.

There are currently no arrangements that may result in "Changes in Control" of
the Company as that term is defined by the provisions of Item 403(c) of
Regulation S-B.

In 2002, the Board of Directors authorized shares be issued to Directors who
attended Board meetings as follows: Joseph P. D'Angelo 400 shares; Horace Seidel
400 shares; Joel Kallan 400 shares; Heywood Broad 300 shares; Samuel Mallis 200
shares; Eugene D'Angelo 100 shares; Abraham Schaefer 100 shares; Bruce Greenberg
100 shares; David Maya 100 shares; and Eugene Foltuz 300 shares.

**ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

The Company leases its facilities from Universal Realty Development Company, a
division of Daycon Investors, Assoc., Inc., and a company owned and controlled
by Dr. D'Angelo, his family, and affiliated entities;

The Company's financial books and records, banking and expenses are managed by
Daycon Data Management, a division of Daycon Investors, Assoc. Inc., and a
Company owned and controlled by Dr. D'Angelo, his family, and affiliated
entities.

During 2000, 2001, and 2002, the Company entered into several loan, lease, and
management fee transactions with stockholders, affiliates and related entities.
These transactions are detailed in the Independent Auditor's Report in Notes 6
and 7. Those notes are hereby adopted and incorporated as if fully set forth
here.

The Company has never commissioned any independent analysis of the fairness of
any of these related transactions.

                                       18
**TRANSFER AGENT AND REGISTRAR**

United Stock Transfer has been appointed as the transfer agent and registrar for
the Company's common stock. They are located in
Englewood, Colorado.

**ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS**

There are no Anti-Takeover provisions in the Articles of Incorporation or Bylaws
f the Company.

                                    **SIGNATURE**

In  accordance  with  requirements  of the Exchange  Act, the Issuer caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                               Americare Health Scan, Inc.

                                               /s/ Dr. Joseph P. D'Angelo
                                                   Dr. Joseph P. D'Angelo
                                                   President

DATED: April 15, 2003

                                       19
**STATEMENT REQUIRED BY 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

         In connection with the Annual Report on Form 10-KSB of AMERICARE HEALTH
SCAN, INC. (the "Company") for the year ended December 31, 2002, as filed with
the Securities and Exchange Commission of the date hereof (the "Report"), I, DR.
JOSEPH P. D'ANGELO, Chief Executive Officer and Chief Financial Officer of the
Company, certify that

         (1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities and Exchange Act of 1934; and

         (2) information  contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.

/s/ Dr. Joseph P. D'Angelo
    DR. JOSEPH P. D'ANGELO

April 15, 2003

                                       20
**CONSENT OF OFFICERS AND DIRECTORS**

We the undersigned officers and Directors of Americare Health Scan, Inc. have
reviewed the Form 10K-SB to be submitted to the U.S. Securities and Exchange
Commission and each hereby confirm that we are familiar with and aware of the
information disclosed in the 10K-SB and that the same is true and accurate.

         /s/ Joel P. Kallan                          /s/ Joseph P. D'Angelo
             Joel P. Kallan, MD,                         Joseph P. D'Angelo, DDS
             Director                                    Director

         /s/ Horace Seidel                           /s/ Eugene D'Angelo
             Horace Seidel, MD                           Eugene D'Angelo
             Director                                    Director

         /s/ Heywood Broad                           /S/ David Maya
             Heywood Broad                               David Maya
             Director                                    Director

         /s/ Bruce Greenberg                         /s/ Abraham Schaefer
             Bruce Greenberg                             Abraham Schaefer
             Director                                    Director

Dated:  April 15, 2003
```