FORM 10-QSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal quarter ended: June 30, 2002


                         Commission file number 0-13215
                                   -----------

                        LATINOCARE MANAGEMENT CORPORATION
             (Exact name of registrant as specified in its charter)

        NEVADA                                            30-0050402
       --------                                        ---------------
(State of Incorporation)                    (I.R.S. Employer Identification No.)


             4150 Long Beach Boulevard, Long Beach, California 90807
               (Address of principal executive offices) (Zip Code)

                                 (562) 997-4420
               Registrant's telephone number, including area code

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                                    NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS                                     WHICH REGISTERED
-------------------                                 -------------------------
   COMMON STOCK                                               OTC


                                   -----------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

         The aggregate  market value of voting stock held by  non-affiliates  of
the  registrant was $1,639,055 as of June 30, 2002 (computed by reference to the
last  sale  price of a share of the  registrant's  Common  Stock on that date as
reported by the NASDAQ).

         There were 14,557,100  shares  outstanding of the  registrant's  Common
Stock as of June 30, 2002.

<PAGE>

                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----
PART I -  FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS                                  2

 Consolidated Balance Sheet as of June 30, 2002
 (unaudited) and December 31, 2001                                           2

 Consolidated Statement of Operations for the six months
 ended June 30, 2002 and the six months ended June 30, 2001                  3

 Consolidated  Statement of Changes in  Stockholders'
 Equity  (Deficit) for the year  ended  December  31,  2001
 and for the six  months  ended  June 30,  2002 (unaudited)                  4

 Consolidated Statement of Cash Flow for the six months
 ended June 30, 2002 and the six months ended June 30, 2001                  5

 Notes to Consolidated Financial Statements (unaudited)                      6

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                               20

PART II - OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                  23

          SIGNATURES                                                        24




<PAGE>
                                                                          Page 2
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                           CONSOLIDATED BALANCE SHEET
            JUNE 30, 2002 (UNAUDITED) AND DECEMBER 31, 2001 (AUDITED)

                                     ASSETS

                                                June 30,      December 31,
                                                 2002            2001
                                               ---------      ------------
                                              (Unaudited)      (Audited)

CURRENT ASSETS:
  Cash and cash equivalents                  $     7,388   $     2,604
  Accounts receivable                                298         2,922
  Prepaid expenses and other assets              119,970        49,291
                                               ---------     ---------

      TOTAL CURRENT ASSETS                       127,656        54,817
                                               ---------     ---------

PROPERTY AND EQUIPMENT:
  Net of accumulated depreciation                191,100       218,600
                                               ---------     ---------

      TOTAL PROPERTY AND EQUIPMENT               191,100       218,600
                                               ---------     ---------

OTHER ASSETS:
  Deposit                                         15,478        15,478
                                               ---------     ---------

      TOTAL OTHER ASSETS                          15,478        15,478
                                               ---------     ---------
                                             $   334,234   $   288,895
                                               =========     =========

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Accounts payable                           $   263,212   $   196,387
  Accrued expenses                               119,249       107,522
  Accrued interest payable                        98,564        46,034
  Income tax payable                               1,600         1,600
  Sue to related party                           496,485       437,756
  Note payable - shareholder                   1,750,000     1,750,000
                                               ---------     ---------

      TOTAL CURRENT LIABILITIES                2,729,110     2,539,299
                                               ---------     ---------

SHAREHOLDERS' EQUITY (DEFICIT):
  Common stock, par value $.001; 50,000,000
   shares authorized; 14,557,100 and
   14,529,100 shares issued and outstanding,
   respectively                                  997,680       997,652

  Preferred stock, par value $.001;
   2,000,000 Shares authorized, no shares
   issued and outstanding                              0             0

  ADDITIONAL PAID-IN CAPITAL                      34,972             0

  ACCUMULATED DEFICIT                         (3,427,528)   (3,248,056)
                                               ----------    ---------

      TOTAL SHAREHOLDERS' DEFICIT             (2,394,876)   (2,250,404)
                                               ---------     ---------
                                             $   334,234   $   288,895
                                               =========     =========

              See accompanying notes and accountants' review report
       which are integral parts of these consolidated financial statements


<PAGE>
                                                                         Page 3
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
                       FOR THE THREE AND SIX MONTHS ENDED
                       JUNE 30, 2002 AND 2001 (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                      <C>           <C>        <C>          <C>
                                             Three Months Ended        Six Months Ended
                                                  June 30,                  June 30,
                                             2002         2001        2002          2001
                                             ----         ----        ----          ----

REVENUE:
  Management fees- related party         $   974,812   $ 397,191  $ 1,330,368  $   908,269
  Management fees- others                      4,024      17,525       20,845       60,475
                                           ---------     -------    ---------    ---------

                                             978,836     414,716    1,351,213      968,744
                                           ---------     -------    ---------    ---------

COSTS AND EXPENSES:
  Salaries and benefits                      434,198     473,776      916,936      825,068
  Professional and consulting fees            58,640      90,724      171,774      237,557
  General and administrative                 202,760     293,895      361,129      420,519
  Depreciation                                13,750      25,782       27,500       35,682
                                          ----------     -------    ---------    ---------
                                             709,348     884,177    1,477,339    1,518,826
                                          ----------     -------    ---------    ---------

OPERATING INCOME (LOSS)                      269,488    (469,461)    (126,126)    (550,082)

OTHER INCOME (EXPENSE):
  Interest expense                           (26,275)    (13,974)     (52,545)     (26,901)
                                          ----------     -------    ---------    ---------

OTHER INCOME (LOSS) BEFORE INCOME TAXES      243,213    (483,435)    (178,671)    (576,983)

PROVISION FOR INCOME TAXES                         0           0          800          800
                                          ----------     -------    ---------    ---------

NET INCOME (LOSS)                       $    243,213  $ (483,435)  $ (179,471) $  (577,783)
                                          ==========     =======    ==========   =========


EARNINGS (LOSS) PER COMMON SHARE
  BASIC                                         0.02       (0.03)       (0.01)       (0.04)
                                          ==========     =======   ==========    =========

  DILUTED                                       0.02       (0.03)       (0.01)       (0.04)
                                          ==========     =======   ==========    =========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
    BASIC                                 14,539,100   14,529,100  14,543,100   14,529,100
                                          ==========   ==========  ==========   ==========
    DILUTED                               14,539,100   14,529,100  14,543,100   14,529,100
                                          ===========  ==========  ==========   ==========

</TABLE>
















              SEE ACCOMPANYING NOTES AND ACCOUNTANTS' REVIEW REPORT
       WHICH ARE INTEGRAL PARTS OF THESE CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>

                                                                          Page 4

                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
       CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
                                  JUNE 30, 2002

                                            Retained Earnings         Total
                           Common Stock     Additional Accumulated Shareholders'
                         Shares      Amount   Paid-in   Deficit       Equity
                       ----------  ---------  -------- ------------ ------------

Balance at December
  31, 2001              3,781,455  $ 952,727  $       $   (960,942)  $   (8,215)
Retirement of common
  stock                (3,270,000)

Reissuance of new common
  stock to existing
  shareholders of the
  acquiring company    13,471,645

Issuance of new shares of stock:

  Common stock issued
    as part of
    cost of acquiring
    JNS Marketing         260,000     26,000               (26,000)           0

  Common stock issued
    for services
    rendered              100,000     10,000                             10,000

Common stock issued
  to private investors
  prior to acquisition    186,000      8,925                (8,925)           0

Transfer of acquiring
  company's accumulated
  deficit                       0          0         0  (1,671,685)  (1,671,685)

Consolidated net loss
  for period ended
  December 31, 2001             0          0         0    (580,504)    (580,504)
                       ----------  ---------  -------- ------------ ------------
Balance at December
  31,2001              14,529,100  $ 997,652            (3,248,056)  (2,250,404)

Private placement
  Offering                 28,000         28    34,972                   35,000

Consolidated net income
  for six months
  Ended June 30, 2002                                     (179,471)    (179,471)
                       ----------  ---------  -------- ------------ ------------
Balance at
   June  30, 2002      14,557,100  $ 997,680 $  34,972 $(3,427,528) $(2,394,876)
                       ==========  =========  ======== ============ ============

         See accompanying notes and accountants review report which are
            integral parts of these consolidated financial statements


<PAGE>
                                                                          Page 5

                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
             FOR SIX MONTHS ENDED June 30, 2002 AND 2001 (UNAUDITED)

                                                               Six Months
                                                                June  30,

                                                           2002           2001
                                                           ----           ----
         CASH FLOWS FROM OPERATING ACTIVITIES:
           Net income (loss) from operations             $  (179,471)  (577,783)
           Adjustment to reconcile net income (loss) from
             operations to cash provided (used) in operating
             activities:
                Depreciation                                  27,500     35,682
           (Increase) decrease in:
              Accounts receivable                              2,624     (1,925)
              Prepayments to private placement offering      (70,680)   (34,202)
            Increase (decrease) in:
              Due to related party                            58,729    433,887
              Accounts payable                                66,825     79,752
              Accrued expense                                 11,727     29,566
              Accrued interest                                52,530   (200,469)
              Income tax                                           0        800
                                                            --------  ----------
       Net cash used from operating activities               (30,216)  (234,692)
                                                            --------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
            Purchase of Equipment                                  0    (22,472)
                                                            --------  ----------
       Net cash used from investing activities                     0    (22,472)
                                                            --------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
            Conversion of debt into equity                         0    227,723
            Private placement offering                        35,000          0
                                                           ---------  ----------
       Net cash provided from financing activities            35,000    227,723
                                                           ---------  ----------
       Net increase (decrease) in cash                         4,784    (29,441)

       Cash, beginning of the year                             2,604     65,532
                                                           ---------  ----------
       Cash, end of the year                               $   7,388 $   36,091
                                                           =========  ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
       Cash paid during the period for interest                    0         0
                                                           =========  ==========
       Cash paid during the period for income taxes              987         0
                                                           =========  ==========

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:
      Accrued interest on debt to equity conversion                0 $   27,254
      Accrued interest on the equity to debt conversion       52,530          0
                                                           =========  ==========

      Conversion of Debt to equity                         $       0 $1,040,183
                                                           =========  ==========

         See accompanying notes and accountants review report which are
            integral parts of these consolidated financial statements


<PAGE>
                                                                          Page 6
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(1)      General Background and Nature of Operations:

a.       General background:
                  Latinocare   Management   Corporation   (the   "Company")  was
         incorporated in the State of Nevada on January 22, 2002. The Company, a
         management  service  organization,  is in  the  business  of  providing
         management and administrative  services,  and has developed a system of
         operations,   management   and  marketing  for   independent   practice
         associations engaged in providing health care services.  The Company is
         authorized  to issue two classes of shares - Common Stock and Preferred
         Stock.  The total number of shares which the Company is  authorized  to
         issue is  50,000,000  common  shares at $ .001 par value and  2,000,000
         preferred shares at $ .001 par value. The preferred stock may be issued
         in such series as are  designated by the Board of Directors.  The Board
         of Directors may fix the number of authorized shares of preferred stock
         for each series,  and the rights,  preferences  and  privileges of each
         series of preferred stock.

                  The Company was formed upon the  reincorporation and change of
         name of JNS Marketing,  Inc. (JNS) which was originally incorporated in
         Colorado  in July  1983.  Prior  to  JNS's  acquisition  of  Latinocare
         Management Corporation - California in 2001, JNS was a reporting public
         shell company with no tangible assets, insignificant liabilities and no
         revenue.

                  Latinocare  Management  Corporation  -  California  (LMC)  dba
         Latino Health Care was founded and incorporated on February 23, 1995 as
         a California  for-profit  stock  corporation.  Its sole  purpose,  when
         originally  organized,  was to  manage  all  operations  of  Latinocare
         Network   Medical  Group  (IPA),   a  related  party  who  have  common
         shareholders who influence the activities of both entities.

                  LMC  acquired  JNS in November  2001  purchasing  3,270,000 or
         approximately  86% of the issued and  outstanding  common  stock of JNS
         Marketing,  Inc. in  exchange  for  $300,000.  There was a delay in the
         planned  acquisition  date due to renegotiation of the acquisition cost
         which  resulted in the issuance of an additional  260,000 new shares of
         common  stock  of the  Company  as  part  of the  purchase  price.  The
         3,270,000 shares common stock were subsequently  retired and cancelled.
         The  members  of the  Board of  Directors  of the  Company  before  the
         purchase were replaced with the members of LMC's Board of Directors.

                  LMC  and  JNS   entered   into  an   Agreement   and  Plan  of
         Reorganization   which  will  result  in  a  share   exchange   between
         shareholders  of two companies,  whereby LMC will become a wholly owned
         subsidiary  of the Company.  JNS was renamed as  Latinocare  Management
         Corporation,  reincorporated in the State of Nevada on January 2002 and
         which is referred in this report as the "Company".

                         See accountants' review report


<PAGE>
                                                                          Page 7
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(1)      General Background and Nature of Operations (Cont'd):

a.       General background (cont'd):
                  The  Company  has  a  total  of   14,557,100   shares  of  its
         outstanding common stock issued. 511,455 shares or 3% of the issued and
         outstanding  common stock consist of the original  shareholders  of the
         acquired company;  13,471,645  shares or 93% of the outstanding  common
         stock were issued to two members of the  Company's  Board of Directors;
         and new shares issued totaling  574,000 shares or 4% of the outstanding
         common stock issued  consists of 260,000  shares of common stock issued
         to  individuals  as part of LMC's  renegotiated  cost of acquiring  the
         Company,  100,0000 shares of common stock issued for services  rendered
         and  214,000  shares of common  stock  issued to  unaffiliated  private
         investors.

b.       Nature of operations:
                  The  Company  is in  the  business  of  providing  management,
         administrative   services  and  marketing  for   independent   practice
         associations engaged in providing health care services.

                  The Company has targeted and successfully reached four primary
         groups:  health  plans,   hospitals,   health  service  recipients  and
         physicians with significant focus on the Latino market.

                  Latinocare   Network  Medical  Group,   Inc.,  an  Independent
         Physician Association (IPA), was incorporated on September 30, 1994, as
         a licensed  medical group able to accept  physician  services risk from
         third-party  payors and self-insured  employers.  The IPA was organized
         for the purpose of meeting the  comprehensive  health care needs of the
         Latino  population  and the  lack to  access  to  quality  health  care
         services  available to the Latino  community.  The IPA has a network of
         private practicing  physicians who provide quality health care services
         that are accessible, friendly, affordable, and culturally sensitive. It
         offers a wide range of comprehensive  health care programs and services
         to keep its members and families healthy and productive.

                  On November  1995,  the Company has entered into a twenty-five
         (25) year Management Services Agreement with Latinocare Network Medical
         Group,  Inc.  to provide all  management  and  administrative  support,
         allowing the IPA to focus its efforts on medical governance and patient
         care   management   of  services  as  required  by  health   plans  and
         regulations.  These  services  provided by the Company  include,  among
         others, utilization management, quality improvement, claims processing,
         case  management  and  financial  services  management.  Marketing  and
         business  development  are also provided as added  services to the core
         services included in the Management  Services Agreement  (collectively,
         "Management Services").  The Company acts as the exclusive agent to the
         IPA with  regards to  seeking,  negotiating,  renewing,  and  executing
         managed care contracts.

                         See accountants' review report


<PAGE>

                                                                          Page 8

                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(2)      Summary of Significant Accounting Policies:
                  The Company has prepared  interim  financial  statements  that
         include  all  adjustments,  which,  in the opinion of  management,  are
         necessary to make the financial statements not misleading.  The Company
         believes that all  adjustments  of a normal  recurring  nature that are
         necessary for a fair presentation of the results of the interim periods
         presented in this report have been made.

                  The Company's cash and available  credit are not sufficient to
         support  operations  for the next year.  A net loss of  $3,248,056  was
         incurred from  inception on February  1995 until  December 31, 2001. In
         the first year of start-up,  an  operating  deficit of  $1,750,000  was
         funded by debt capital provided by Cedars-Sinai  Medical Center and was
         converted to capital equity in 1997. An additional $750,000 deficit has
         resulted from expenses for capital  financing  efforts beginning in the
         fourth  quarter of 2000,  and  subsequently,  in 2001. In the third and
         fourth  quarters of 2001, the Company funded capital  raising  expenses
         including the purchase and reverse merger with JNS Marketing, Inc.

                  For the six months  ended June 30,  2002,  the  Company had an
         additional net loss of $179,471.  The Company also had negative working
         capital and stockholders deficit at June 30, 2002.

                  Management  plan is to raise  enough  equity  through  private
         placements (see Note 13 - Subsequent Events) and individual  investors;
         finance  the  acquisition  of  enrollment  membership;  expand  network
         development;  acquire  networks to  increase  costs  efficiencies.  The
         resulting revenue increases will finance the pay off of the note issued
         to a related party;  shareholder's equity interest; and to raise enough
         working capital to pay off liabilities  and sustain  operations.  These
         consolidated  financial statements have been prepared on the basis that
         adequate equity financing will be obtained.

a.       Principles of Consolidation:
                  The consolidated  financial statements include the accounts of
         the Company and its subsidiary. Inter-company accounts and transactions
         have been eliminated in the consolidated financial statements.

b.       Use of Estimates:
                  The  preparation  of financial  statements in conformity  with
         generally accepted  accounting  principles  requires management to make
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities and disclosure of contingent  assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

c.       Revenue Recognition:
                  Revenues from professional services, primarily from management
         fees,  are recognized on an accrual basis of accounting as services are
         performed or the amounts earned (in compliance with SOP 00-2), based on
         a percentage of  capitation  revenues  received by the IPA,  which is a
         related party transaction.

                         See accountants' review report


<PAGE>
                                                                          Page 9
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(2)   Summary of Significant Accounting Policies (cont'd):

c.       Revenue Recognition (cont'd):

                  The  IPA  has  managed  care  contracts  with  various  Health
         Maintenance   Organizations   (HMO)  to  provide  medical  services  to
         subscribing members.  Under these agreements,  the IPA receives monthly
         capitation  payments  based on the  number  of each  HMO's  subscribing
         members  whether or not a member  requests  services to be performed by
         the IPA. The Company receives 16% of all IPA capitated revenue.

                  Revenues are also  generated  from risk pool  settlements  and
         management  services rendered such as marketing,  business  development
         and  core  operations.   Revenues  from  Risk  pool  settlements  (cash
         received) are surpluses distributed by the IPA from the HMO.

                  Currently,  two separate types of risk pools exist - specialty
         risk pools and hospital (institutional) risk pools. Specialty risk pool
         is reserved for specialist  medical expenses whereas hospital risk pool
         relate to reserves for hospital  expenses.  These  reserves are held by
         the HMO and surpluses are distributed, after year-end accounting of all
         claims,  to the  related  physicians  at fifty  percent  (50%),  IPA at
         twenty-five percent (25%) and the Company at twenty-five percent (25%).

d.       Cash and Cash Equivalents:
                  The Company considers all money market funds and highly liquid
         debt  instruments with maturities of three months or less when acquired
         to be cash equivalents.

e.       Accounts Receivable:
                  The  Company  considers   accounts   receivable  to  be  fully
         collectible;   accordingly,  no  allowance  for  doubtful  accounts  is
         required.  If  amounts  become  uncollectible,  they will be charged to
         operations when that determination is made.

f.       Prepaid Private Placement Costs:
                  Specific  incremental costs directly  attributable to proposed
         or actual  offering of securities are deferred and charged  against the
         gross proceeds of the offering.  Management  salaries and other general
         and administrative expenses are not allocated as costs of the offering.
         In the event that the offering does not take place, the prepaid private
         placement costs will be expensed immediately.

g.       Property, Equipment and Related Depreciation:
                  Property  and  equipment  are  stated  at  cost.  Maintenance,
         repairs  and  minor  renewals  and  betterment's  are  expensed;  major
         improvements are capitalized.

                         See accountants' review report


<PAGE>
                                                                         Page 10
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(2)      Summary of Significant Accounting Policies (cont'd):

g.       Property, Equipment and Related Depreciation (cont'd):

                  Depreciation  of property and  equipment is provided for using
         the straight-line  method over the estimated useful lives of the assets
         as follows:

                                                               Estimated
                                                              Useful Lives
                                                              ------------
                Leasehold improvements                        Life of lease
                Computer, equipment and office furniture      5 - 10 Years

                  Upon  retirement,  sale, or other  disposition of property and
         equipment,  the costs and accumulated  depreciation are eliminated from
         the accounts, and any resulting gain or loss is included in operations.

h.       Advertising Expenses:
                    All advertising expenses are expensed as incurred.

i.       Income Taxes:
                  The Company is taxed at C  Corporation  income tax rates.  The
         Company  recognizes  deferred  income tax under the asset and liability
         method of accounting.  This method requires the recognition of deferred
         income taxes based upon the tax consequences of "temporary differences"
         by applying  enacted  statutory tax rates applicable to future years to
         differences  between the financial  statements carrying amounts and the
         tax basis of existing assets and liabilities.

j.       Adoption of Recent Accounting Standards:

         Segment Reporting:
                  In  June  1997,  the  Financial   Accounting  Standards  Board
         ("FASB")  issued  Statement of Financial  Accounting  Standards No. 131
         ("SFAS" No. 131"),  "Disclosure  About  Segments of an  Enterprise  and
         Related  Information."  SFAS No. 131 established  standards for the way
         companies  report   information  about  operating  segments  in  annual
         financial  statement.   It  also  established   standards  for  related
         disclosures  about  products and services,  geographic  areas and major
         customers.

                  The  disclosures  prescribed in SFAS No. 131 became  effective
         for the year ended December 31, 1998.  The Company has determined  that
         it operates as one business segment.

                  The Company is not affected by the adoption of new  accounting
         standards  for  Accounting  for  Derivative   Instruments  and  Hedging
         Activities as well as the Accounting for Comprehensive  Income as these
         activities did not occur in its operations.

                         See accountants' review report


<PAGE>
                                                                         Page 11
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(2)      Summary of Significant Accounting Policies (cont'd):

j.       Adoption of Recent Accounting Standards (cont'd):

         Business Combination:

                  SFAS 142 and SFAS 141, Business Combinations,  are designed to
         improve  reporting  and  disclosure  with respect to goodwill and other
         acquired  tangible assets.  SFAS 141 eliminated the pooling of interest
         method as an accounting option for business  combination while SFAS 142
         modified  the  purchase   method  of  accounting  by  eliminating   the
         amortization of goodwill and  substituting an impairment test. The FASB
         overcame several operation  impediments to non-amortization  including:
         the reporting level at which to conduct impairment reviews, consistency
         with SFAS 121 (Accounting for the impairment of long-lived  assets) and
         finite-lived   goodwill.  The  emphasis  will  be  on  the  fair  value
         measurements  of assets and  liabilities  instead of  amortization.  An
         impairment  in the carrying  value of an asset is  recognized  when the
         fair value of the asset is less than its carrying value.

(3)      Private Placement Offering and Prepaid expenses:

         Prepaid expenses and other current assets consists of:
                                                        June 30     December 31
                                                          2002         2001
                                                       (unaudited)  (audited)
               Prepaid private placement costs         $ 119,970   $  46,896
               Other current assets                                    2,395
                                                       ---------     -------
                                                       $ 119,970   $  49,291

                  On November  30,  2001,  a Private  Placement  Memorandum  was
         issued for qualified  investors in connection  with the Company's offer
         of sale of its common stock.  This offering  terminated on May 31, 2002
         but was extended by management until August 31, 2002.

                  The above prepaid private placement costs consist of printing,
         mailing and  consulting  fees that have been incurred from the offering
         date to  June  30,  2002.  These  costs  directly  attributable  to the
         offering of  securities  are deferred  and will be charged  against the
         gross proceeds of the offering of securities  when the offering ends or
         is  terminated.  The gross  proceeds  received  as of June 30,  2002 is
         $35,000.  New shares  issued for this  offering  were 28,000  shares of
         common stock.

(4)      Property and Equipment:

         Property and equipment consists of the following:

                                                         June 30,   December 31,
                                                           2002         2001
                                                        (Unaudited) (Audited)

           Furniture, fixtures and office equipment     $  83,786    $  83,785
           Leasehold improvement                           77,157       77,157
           Computers and software                         171,013      204,058
                                                          -------      -------
                                                          331,956      365,000

           Less accumulated depreciation                  140,856      146,400
                                                          -------      -------
                                                        $ 191,100    $ 218,600

                         See accountants' review report


<PAGE>
                                                                         Page 12
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)


(4)      Property and Equipment (cont'd):

         Depreciation  expense for the three months ended June 30, 2002 and 2001
         was:

                           Three Months ended          Six Months ended
                               June 30,                     June 30
                           2002        2001            2002            2001
                         -------     -------         -------          -------
            Depreciation $13,750    $ 24,104        $ 27,500       $  35,682
                         =======     =======         =======          =======

                  The Company periodically evaluates the net realizable value of
         long-lived  assets,  including  property  and  equipment,  relying on a
         number of factors including operating results, business plans, economic
         projections and anticipated future cash flows.

(5)      Notes Payable - Related Party:

                  Notes  payable are all current and  comprised of the following
         amounts as of June 30, 2002 and December 31, 2001.

         Cedars Sinai, due July 23, 2002
         with interest at 6.0% per annum                 $ 1,750,000
                                                           =========


         The notes for Cedars Sinai matures as follows:

                  $500,000  shall be paid on or before 120 days on or before the
         date of the note;  $500,000  shall be paid on or before  240 days on or
         before the date of the note;  and  $750,000  and all accrued but unpaid
         interest shall be paid on or before the expiration of 360 days from the
         date of the note.

                  This note shall be  secured  and that in the event of a breach
         by the Company,  Cedars-Sinai's sole recourse shall be the repossession
         of that portion,  if any, of its shareholdings  (28% of the outstanding
         shares) from the Company pursuant to the following provision:

         a.       For the first seven hundred fifty thousand dollars  ($750,000)
                  repaid by the Company, recourse shareholdings shall be reduced
                  from twenty-eight  percent (28%) of the issued and outstanding
                  shares to not less than  twenty  percent  (20%) of such issued
                  and outstanding shares, or the portion thereof;

         b.       For the next one million  dollars repaid  ($1,000,000)  by the
                  Company,  recourse  shareholdings shall be reduced from twenty
                  percent  (20%) of the  issued and  outstanding  shares to zero
                  percent  (0%) of such issued and  outstanding  shares,  or the
                  portion thereof.

                         See accountants' review report


<PAGE>
                                                                         Page 13
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(5)      Notes Payable - Related Party (cont'd):

                  If this note is not paid when due,  the Company  shall pay all
         costs of  collections,  including  attorney's  fees and  costs  and all
         expenses  incurred  on  account of  collection,  whether or not suit is
         filed.

                  As of June 30, 2002,  no payments were made by the Company nor
         any collection actions from Cedar Sinai. The Company plans to amend the
         terms of the above agreement with Cedar Sinai but there is no assurance
         that an  amendment  will be  made.  Cedar  Sinai  has  not  demanded  a
         conversion of its note and management believes that it may be receptive
         to a modification.

(6)      Provision for Income Taxes:

                  The provision for taxes  consists of the following for periods
         ended June 30, 2002 and 2001 (unaudited):

                                      Federal       State         Total
                                      ------       ------        ------
         Current                    $      0     $    800      $    800
         Deferred                          0            0             0
                                      ------       ------        ------
                                    $      0     $    800      $    800
                                      ======       ======        ======

                  Other than the minimum tax due to the State of California,  no
         income tax accruals were recorded  because the Company  incurred a loss
         for the previous and current years and has available net operating loss
         (NOL) carry forwards at year ended  December 31, 2001 of  approximately
         $2,212,504,  available to offset future taxable income. These NOL carry
         forwards  expire  beginning in 2010 and ending in 2014,  fifteen  years
         from the year in which the losses were incurred.

                  Deferred tax assets and liabilities were not presented because
         the amounts were insignificant.

(7) Advertising:

          Advertising expense consists of the following:

                              Three Months Ended       Six Months Ended
                                   June 30,                 June 30,
                               2002       2001          2002       2001
                               ----       ----          ----       ----
                                 (Unaudited)               (Unaudited)

       TOTAL              $   2,765    $     0      $   4,865    $ 1,096
                              =====      =====          =====      =====


                         See accountants' review report


<PAGE>

                                                                         Page 14
                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)

(8)      Employee Savings Plan:

                  On August 1, 2000, the Company adopted a 401(K) Profit Sharing
         Plan and Trust for the benefit of its employees and beneficiaries.

                  Eligible  employees  may  contribute a portion of their pretax
         annual compensation  within specified limits. A discretionary  matching
         contribution  will be provided by the employer  which may or may not be
         limited to its current accumulated net profit.

                  There are no employer  contributions to the plan for the three
         months ended June 30, 2002 and 2001.

(9) Commitments:

                  The Company  has entered  into  various  operating  leases for
         equipment and occupies its facility under a long-term  lease  agreement
         expiring in March 31,  2010 with option to cancel  after five (5) years
         or extend.  Future  minimum  lease  payments  under the  non-cancelable
         leases for the remaining years are as follows:

                Period Ending
                  June  30,          Office Space     Equipment      Total
                --------------      -------------    ----------   ---------
                  2003              $   250,620     $  70,716   $   321,336
                  2004                  250,620        70,716       321,336
                  2005                  250,620        70,716       321,336
                  2006                  250,620        70,716       321,336
                  Thereafter            250,620        70,716       321,336
                                    -------------    ----------   ---------

                  Total             $ 1,253,100     $ 353,580   $ 1,606,680
                                    =============    ==========   =========

          Total lease and rent expense consist of the following:

                              Three Months Ended          Six Months Ended
                                  June 30,                   June  30,
                              2002        2001           2002        2001
                              ----        ----           ----        ----
                                 (Unaudited)                (Unaudited)
         Equipment lease    $ 26,839   $ 12,248         $ 40,589  $ 22,030
         Office Rent          61,810     32,351          124,098    95,975
                              ------     ------          -------   -------
                            $ 88,649   $ 44,599         $164,687  $118,005
                              ======     ======          =======   =======


(10) Related Party Transactions and Due to Related Parties:

        Due from/(to) related party consists of:
                                              June 30,      December 31,
                                                2002            2001
                                                ----            ----
                                            (Unaudited)     (Audited)

      Due to IPA (net)                    $ ( 586,482)      $ (496,211)
      Due from JJ&M Management (net)           33,276           16,478
      Due From Latino Family Care (Net)        56,721           41,977
                                             ---------        ---------

      Due to Related Party (Net)          $  (496,485)      $ (437,756)
                                             =========        =========

        a. Latinocare Network Medical Group, Inc./IPA:
                  The  CEO/President of Latinocare  Network Medical Group,  Inc.
             (IPA) is a member of the board of directors and a major stockholder
             for both the IPA and the Company until his recent death in February
             2002.  In light of this  shareholder's  death,  the Company has the
             contractual  right to acquire  his shares of stock from the IPA and
             the Company for $2.5 million  contingent on the Company making some
             milestone payments. The Company is in

                         See accountants' review report

<PAGE>
                                                                         Page 15


                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)


(10) Related Party Transactions and Due to Related Parties  (cont'd):

     a.Latinocare Network Medical Group, Inc./IPA (cont'd):

             discussions  with the heirs of the shareholder to make the purchase
             essentially  on the  same  terms  as  previously  agreed  with  the
             shareholder  before  his  death,  subject  to the  availability  of
             capital.

                  The  Company  and the IPA,  are  bound by a  twenty-five  year
             management  services agreement.  Under this agreement,  the IPA has
             effectively  transferred  total contract and management  control to
             the Company for the term of the agreement. In return for management
             and  administrative  services provided under the management service
             agreement,  the Company receives management fees of sixteen percent
             (16%) of monthly capitation payments (based on predetermined rates)
             received by the IPA.

                  The  Company  has  been  charging  the  IPA a  management  fee
             according to sliding scale based on enrollment.  The management fee
             percentage  was  charged  against  the  total  capitation  the  IPA
             receives  from  members.   The  following   matrix   reflects  this
             management fee arrangement:

                Rate                          Enrollment
                -----                       ---------------
                16%                              0 - 20,000
                15                          20,000 - 30,000
                14                          30,000 - 40,000
                12                          40,000 - 50,000


                  In addition to management fees the Company is also entitled to
           receive  fifty  percent  (50%) of the IPA's share of  hospital  (with
           hospital or HMO) and specialty  risk pool  settlements.  Hospital and
           risk pools are revenues estimated for hospital and specialist medical
           expenses  held  in  reserve  until  actual  claims  are  adjudicated.
           Surpluses are distributed accordingly after all financial obligations
           are met.

                         See accountants' review report

<PAGE>
                                                                         Page 16

                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)


(10) Related Party Transactions and Due to Related Parties  (cont'd):

    a.Latinocare Network Medical Group, Inc./IPA (cont'd):

                  The  management  fees  from   capitation;   settlement   fees;
           management  fees  from  marketing  and  business   development;   and
           management  fees for other services  (operational  core expenses) for
           the  management  of  the  IPA,  paid  and  due to  the  Company  were
           approximately:

                                 Three Months Ended     Six Months Ended
                                      June 30,               June 30,
                                  2002       2001        2002       2001
                                  ----       ----        ----       ----
                                    (Unaudited)            (Unaudited)
       Management fee-capitation  $ 304,588  $ 375,879  $  660,144  $ 771,876
       Settlement fee                 5,738     21,312       5,738    136,393
       Management fee-
           Business development     253,782          0     253,782          0
         and marketing
       Management fee-core
             operations             410,704          0     410,704          0
                                    -------    -------     -------    -------

       Total                      $ 974,812  $ 397,191  $1,330,368  $ 908,269
                                    =======    =======   =========    =======


                The IPA  accounts  for more  than  ninety  percent  (90%) of the
         Company's   revenue.   IPA  has  a   concentration   of   customers  of
         approximately  eight  (8)  customers,   which  are  health  maintenance
         organizations.

      Related party receivables and advances payable as of:

                                               June 30,      December 31,
                                                 2002            2001
                                                 ----            ----
                                              (Unaudited)     (Audited)

      Receivable from related party         $   180,652       $ 298,322
      Payable to Related Party                 (767,134)       (794,533)
                                                --------        -------

      Due to IPA (Net)                      $  (586,482)      $(496,211)
                                                ========        =======


                  The above  outstanding net payable to the IPA of approximately
         $586,482  and  $496,211  as of June 30,  2002  and  December  31,  2001
         respectively, was used as working capital.

b.       Gonzales-D'Avila Enterprise dba JJ&M Management:
                  The JJ&M's  CEO/President is a stockholder and a member of the
         board of directors for JJ&M, the IPA and the Company. The related party
         transactions involve the classification of life insurance expenses paid
         by the Company for JJ&M.

                         See accountants' review report


<PAGE>
                                                                         Page 17


                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)


(10) Related Party Transactions (cont'd):

         b. Gonzales-D'Avila Enterprise dba JJ&M Management  (cont'd):

                  The outstanding receivable from JJ&M for reimbursement of life
         insurance paid by the Company is $33,276 and $16,478 as of June 30,2002
         and December 31, 2001, respectively.

         c. Latino Family Care
                  A  shareholder  of Latino  Family Care is also a member of the
         board of directors of the IPA. The related party  transactions  involve
         reimbursement  of health  insurance  advanced by the Company for Latino
         Family Care.

                  The  outstanding   receivable  from  Latino  Family  Care  for
         reimbursement of health insurance and equipment expenses is $56,721 and
         $41,977 as of June 30, 2002 and December 31, 2001 respectively.

         d. Cedars Sinai Medical Center

                  Cedars Sinai Medical Center, the Company's  strategic partner,
         has been the largest single  investor to the Company  providing over $2
         million  including the accrued interest of approximately  $290,000 that
         was converted to equity in June 2001. Cedar Sinai's  financial  support
         consisted of a convertible note payable of $1,000,000,  issued November
         30,  1996,  and  was  converted  into a  twenty  percent  (20%)  of the
         Company's  common  stock in 1997.  The  $750,000  and  $62,460 of notes
         payable issued in 1996 and 1997 were converted into an additional eight
         percent (8%) equity interest,  including accrued interest,  on June 12,
         2001.

               The Company has existing promissory notes to Cedars Sinai payable
         on demand with the balance (including interest) as of December 31, 2000
         of $812,460.  These notes were  converted to eight  percent (8%) of the
         outstanding common stock of Company in June 2001.

               On July 23, 2001, the Company issued a convertible note to Cedars
         Sinai in the amount of $1,750,000  bearing simple  interest at the rate
         of 6% per annum  payable in full on or before July 23, 2002,  to redeem
         all shares  issued to  Cedars-Sinai.  If the note is not repaid by that
         time,  Cedar  Sinai  has  the  right  to  convert  it  into  28% of the
         outstanding  common  stock  of  the  Company,  subject  to  a  pro-rata
         adjustment if the note is partially  repaid (see Note 5 Notes Payable -
         Related  Party).  A full or partial  conversion of the note would cause
         dilution in the ownership of the Company by its existing shareholders.

                         See accountants' review report

<PAGE>
                                                                         Page 18

                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)



(10) Related Party Transactions (cont'd):

d.       Cedars Sinai Medical Center  (cont'd)

               Accordingly,  capital stock is reduced for the redeemed  value of
         the stock. For accounting purposes,  the stock redemption is treated as
         a retirement of stock.

               Client made no repayment  for the above loan as of June 30, 2002.
         The Company  plans to amend the terms of the  agreement  subsequent  to
         this balance  sheet date and the Company  believes that Cedar Sinai may
         be receptive to this amendment.

(11) Significant Management Investment:

                The current  management  and  directors as a group  beneficially
         owns  approximately  ninety  three  percent  (93%) of the total  shares
         issued and outstanding.  By virtue of such stock ownership, the current
         management and directors as a group generally exercise control over the
         affairs of the Company.

(12) Stock Option Plan:
                On January  31,  2002,  the Board of  Directors  of the  Company
         unanimously approved and the shareholders  ratified the adoption of the
         2002 Stock  Option Plan.  The Stock  Option Plan  consists of 1,200,000
         stock options for  directors,  executive  officers and key employees to
         purchase 1,200,000 shares of the Company's Common Stock. As of June 30,
         2002, the plan has not been implemented.

(13) Subsequent Events:
        a. Management agreement with IPA:
                  The Company has recently changed the management agreement from
         a sliding scale agreement to a "cost plus" agreement.  In the cost-plus
         model, the Company will charge the IPA, and all future acquired IPAs or
         IPAs managed by the  Company,  the entire cost of managing the business
         plus a fixed  amount as profit  margin.  The cost  component  will vary
         among IPAs depending on negotiated terms of management.

     b. Acquisition
                  The Company has expanded its business plan objectives and will
         seek to provide  management  services to other IPAs. This change in the
         Company's  business  plan will enable the Company to expand its revenue
         derivation  sources as well as enhancing  its revenue and future growth
         potential.

                         See accountants' review report


<PAGE>
                                                                         Page 19

                        LATINOCARE MANAGEMENT CORPORATION
                             (A NEVADA CORPORATION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE YEAR ENDED DECEMBER 31, 2001 (Audited) AND
           FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Unaudited)


(13) Subsequent Events  (cont'd):

     c. Private Placement Offering:
                  On November 30, 2001, a new Private  Placement  Memorandum was
         issued for qualified  investors in connection  with the Company's offer
         of sale of its common  stock.  The Company has extended the offering to
         August 31, 2002.  The Company is offering  800,000 Units for a purchase
         price of $1.25 per Unit (maximum  gross proceeds of  $1,000,000).  Each
         Unit includes one share of the  Company's  common stock and one Warrant
         to  purchase  one share of the  Company's  common  stock for a purchase
         price of $2.00 per share at any time until one year after the date that
         they are issued.  The Company has the option to increase a total amount
         of the offering by up to an additional $150,000 (120,000 shares). There
         is no  minimum  amount of the  offering  and the  maximum  offering  is
         $1,150,000 (if the Company exercises its option to increase the maximum
         amount of the  offering).  The  purchase  price for the shares  will be
         payable in full in cash upon subscriptions.

                  The  net  proceeds  from  the  offering  are  expected  to  be
         approximately  $900,000 after the payment of offering  costs  including
         printing,  mailing,  legal, and accounting costs, and potential selling
         commissions and finder's or referral fees that may be incurred. The net
         proceeds  from  this  offering  are  estimated  to be  utilized  to pay
         marketing  and  promotion  costs to obtain  new  enrollees;  to finance
         acquisitions of IPAs; and for working capital purposes.

                  The Company has incurred prepaid private placement costs as of
         June 30, 2002 of $119,970. These costs are deferred and will be charged
         against the gross  proceeds  of the  offering  of  securities  when the
         offering ends or is terminated.

                  As of June 30, 2002, the Company has raised minimal capital of
         $35,000 for which it has issued  28,000  shares of common  stock in the
         private  placement.  The Company is currently  engaged in  negotiations
         with  potential  financial  backers  through its  investment  bank. The
         Company  may  receive an equity  cash  infusion  that will enable it to
         execute its business plan and grow its operation.

                         See accountants' review report

<PAGE>
                                                                         Page 20

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

CAUTIONARY STATEMENTS

         This Form 10-QSB contains financial projections,  synergy estimates and
other  "forward-looking  statements" as that term is used in federal  securities
laws about Latinocare Management  Corporation's financial condition,  results of
operations and business. These statements include, among others:

         -  statements  concerning  the benefits  that the Company  expects will
result from its business  activities  and certain  transactions  the Company has
completed, such as the potential for increased revenues,  decreased expenses and
avoided expenditures; and

         - statements of the Company's  expectations,  beliefs, future plans and
strategies,  anticipated  developments and other matters that are not historical
facts.  These statements may be made expressly in this Form 10-QSB. You can find
many of these  statements  by looking for words such as  "believes,"  "expects,"
"anticipates,"  "estimates,"  or similar  expressions  used in this Form 10-QSB.
These forward-looking statements are subject to numerous assumptions,  risks and
uncertainties  that may cause the  Company's  actual  results  to be  materially
different from any future  results  expressed or implied by the Company in those
statements.  The most  important  facts  that could  prevent  the  Company  from
achieving its stated goals include, but are not limited to, the following:

         (a) volatility and/or decline of the Company's stock price;

         (b) potential fluctuation in quarterly results;

         (c)  barriers to raising the  additional  capital or to  obtaining  the
financing needed to implement its full business plans;

         (d) inadequate capital to continue business;

         (e) changes in demand for the Company's products and services;

         (f) rapid and significant changes in technology and markets;

         (g) litigation with or legal claims and allegations by outside parties;

         (h) insufficient revenue to cover operating costs.

         Because the statements are subject to risks and  uncertainties,  actual
results  may  differ   materially   from  those  expressed  or  implied  by  the
forward-looking statements. The Company cautions you not to place undue reliance
on the  statements,  which  speak only as of the date of this Form  10-QSB.  The
cautionary  statements  contained  or  referred  to in this  section  should  be
considered in connection  with any  subsequent  written or oral  forward-looking
statements  that the  Company  or persons  acting on its  behalf may issue.  The
Company  does not  undertake  any  obligation  to  review or  confirm  analysts'
expectations  or  estimates  or  to  release   publicly  any  revisions  to  any
forward-looking  statements to reflect events or circumstances after the date of
this Form 10-QSB or to reflect the occurrence of unanticipated events.


<PAGE>
                                                                         Page 21

         The  Company  has  continued  to support  the  marketing  and  business
development activities of LatinoCare Network Medical Group ("LCNMG") to increase
member lives and add  physicians to the provider  network.  Resources  needed to
provide  this  support  have  continued  to  be  made  available  after  certain
significant   events  (i.e.  Tower  Bankruptcy)   negatively   impacted  LCNMG's
membership.  The  Company  plans to  continue  to  provide  this  support  as it
endeavors  to raise  capital  to  acquire  lives.  In the event  capital  is not
available,  the Company has examined its  operations and that of LCNMG and plans
to implement  the necessary  reductions  during the third quarter of fiscal 2002
that it believes will maintain the operations of the Company and return LCNMG to
profitability.  LCNMG  achieved  profitability  in the  five  months  commencing
February  2002 through June 2002,  following  deficits in 2001 and January 2002.
The recent profitability of LCNMG was gained from the new management information
system installed,  which is expected to allow the Company to provide services in
a more cost effective manner as membership increases.

RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2002 AS COMPARED TO THE
SIX MONTHS ENDED JUNE 30, 2001

         Total  revenue  for the six months  ended June 30,  2002  increased  by
$382,470 to $1,351,213 from $968,743 for the six months ended June 30, 2001. The
increase is due to additional  management fees received by the Company from LNMG
related to marketing  and business  development  and the  management of the IPA.
These additional  management fees were calculated and booked at year end for the
fiscal year ended December 31, 2001.

         Operating and  administrative  expenses decreased by $80,916 during the
six months ended June 30, 2002 to $1,477,339  from $1,518,826 for the six months
ended June 30,  2001.  Legal  expenses  decreased  by $32,559 for the six months
ended  June  30,  2002 as  compared  to the six  months  ended  June  30,  2001.
Management  fees and service  expenses  decreased  by $72,000 for the six months
ended June 30, 2002 as compared to the six months ended June 30, 2001.  Expenses
for outside consultants  decreased by $104,960 for the six months ended June 30,
2002 as compared to the six months ended June 30, 2001.


<PAGE>

                                                                         Page 22

LIQUIDITY AND CAPITAL RESOURCES

         The  Company  had  consolidated  net cash of $7,388  for the six months
ended June 30, 2002 as compared to net cash of $36,091 for the six months  ended
of June 30,  2001.  The Company  had a net working  capital  deficit  (i.e.  the
difference between current assets and current liabilities) of $2,601,454 for the
six  months  ended  June  30,  2002 of which  $1,848,564  is a note  payable  to
Cedars-Sinai,  as compared to a working  capital deficit of $423,344 for the six
months ended June 30, 2001. Cash flow used for operating  activities was $30,216
for the six months  ended June 30,  2002 as  compared  to  $234,692  for the six
months  ended June 30,  2001.  There was no cash used for  investing  activities
during the six months ended June 30, 2002, as compared to ($22,472)  used during
the six months ended June 30, 2001.  Net Cash  provided by financing  activities
was $35,000  during the six months ended June 30, 2002 as compared to ($227,723)
during the six months ended June 30, 2001.

         The Company will have additional  capital  requirements  during 2002 if
the Company  continues with its plan of  acquisition  and incubation of new IPAs
and projects, and to pay operating costs. There is no assurance that the Company
will have  sufficient  capital to finance its growth and business  operations or
that such capital  will be available on terms that are  favorable to the Company
or at all.  The Company is  currently  incurring  operating  deficits  which are
expected to continue until LNMG increases its patient enrollment,  which depends
in part on the Company  raising  additional  working  capital for  marketing and
acquisitions.  The change is expected to be the result of adjustment to expenses
and by increased revenues due to acquisitions,  provided that the Company raises
additional capital.

         The Company expects to have material capital  requirements  during 2002
as it relates to  acquisitions  of membership by LNMG,  the IPA.  Subject to the
availability  of  capital,  LNMG  and the  Company  plan to  acquire  additional
membership through the acquisition of IPAs and from individual  physicians.  The
latter method is not the  acquisition  of  physician's  practices but rather the
transfer of these  physicians'  membership from other IPAs to LNMG. The funds to
make these acquisitions are expected to be generated from a private placement of
common  stock  and  warrants  currently  being  made  by the  Company  to  raise
approximately  $1,000,000 of capital.  The private  placement  commenced in late
2001 and involves the offer of 800,000 units at a price of $1.25 per unit.  Each
unit consists of one share of common stock and one warrant to purchase one share
of common stock for a purchase price of $2.00 per share for a period of one year
from the date of issuance,  subject to extension until the shares underlying the
warrants  are  registered  with the  Securities  and  Exchange  Commission.  The
warrantholders have registration rights after issuance of the warrants. To date,
approximately  $35,000 has been raised in the private placement and a commitment
for $25,000 was to be received in the third quarter.  There is no assurance that
the Company will raise additional capital.

<PAGE>
                                                                         Page 23

         On July 23,  2001,  the  Cedars-Sinai  Medical  Center  (CSMC) sold its
shares  of the  common  stock of Latino  Management  Corporation,  a  California
corporation  ("LMC") to LMC in  consideration  for a note in the amount of $1.75
million plus simple  interest at the rate of 6% per annum.  The note was payable
in three  installments on or before July 23, 2002. The first installment was due
in January 2002 and was not paid. As a result, CSMC has the right to convert the
note into 28% of the  outstanding  common  stock of the  Company,  or a pro rata
share if the  promissory  note is  partially  repaid.  The  Company  expects  to
negotiate an extension with CSMC on the promissory note.

         LNMG was owned by Roberto Chiprut, M.D. who was a major shareholder and
director of the Company and LMC until his recent death.  Prior to his death, the
Company and Dr.  Chiprut had reached  agreement  and executed a contract for the
Company to acquire his IPA and Company stock for $2.5 million  contingent on the
Company making certain  milestone  payments.  The Company is in discussions with
the heirs of Dr. Chiprut to make the purchase on  essentially  the same terms as
previously agreed upon with Dr. Chiprut, subject to the availability of capital.
The Company  currently does not have the funds to purchase Dr.  Chipruts's stock
and there is no  assurance  that the Company  will be able to obtain  sufficient
capital to pay the purchase price for the stock.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
None.

ITEM 2. CHANGES IN SECURITIES
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None

ITEM 5. OTHER INFORMATION
None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits.

         (b) Reports on Form 8-K.

         Report on Form 8-K, dated July 12, 2002, relating to the appointment of
Mountain Share Transfer Inc. as the company transfer agent.

<PAGE>

                                                                         Page 24
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  August 15, 2002



                                BY: /s/ Jose J. Gonzalez
                                -----------------------------------------------
                                Jose J. Gonzalez, Chairman of the Board,
                                Chief Executive Officer, President and Secretary



                                BY: /s/ Joseph Luevanos
                                ------------------------------------------------
                                Joseph Luevanos, Director and Chief
                                Financial Officer