<PAGE>

FORM 10QSB FOR MID-ATLANTIC HOME HEALTH NETWORK, INC. FILED ON NOVEMBER 14, 2001



                                   FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


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


For Quarter Ended September 30, 2001


Commission File Number D-24165


                     MID-ATLANTIC HOME HEALTH NETWORK, INC.

         Nevada                                                 93-1108124


                         7504 Diplomat Drive, Suite 101
                               Manassas, Virginia
                                   20109-2631

                                  703/335-1957


Check whether the issuer (1) 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
    ---      ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 12,595,142 shares of $.001 par
value common stock as of September 30, 2001.

<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.

                         PART I - FINANCIAL INFORMATION


                                                                           PAGE


Condensed Balance Sheets for September 30, 2001 and December 31, 2000.........1


Condensed Statements of Income for the Nine Months ended
September 30, 2001 and 2000...................................................2


Condensed Statements of Cash Flows for the Nine Months ended
September 30, 2001, and 2000..................................................3


Notes to Condensed Financial Statements.......................................4


Management's Discussion and Analysis or Plan of Operation.....................7


                           PART II - OTHER INFORMATION


Legal Proceedings - N/A...................................................... -

Changes in Securities and Use of Proceeds - No Change........................ -

Defaults upon Senior Securities - N/A........................................ -

Submission of Matters to a Vote of Security Holders - N/A.................... -

Other Information - N/A...................................................... -

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<TABLE>
MID-ATLANTIC HOME HEALTH NETWORK, INC.
CONSOLIDATED BALANCE SHEET
<CAPTION>

                                                                 UNAUDITED      AUDITED
                                                                 30-Sep-01     31-Dec-00
                                                               ------------   ------------
<S>                                                            <C>            <C>
Current Assets
   Cash and cash equivalents                                   $ 1,288,716    $   549,812
   Accounts receivable, net of allowances                        5,978,423      6,640,427
   Due from affiliates                                             164,441         97,931
   Prepaid expenses and other current assets                       235,078         31,964
   Deferred tax asset                                               26,000         26,000
                                                               ------------   ------------
           Total current assets                                  7,692,658      7,346,134

                                                               ------------   ------------
Property and Equipment, net                                        524,240        573,840
                                                               ------------   ------------

Other Assets

   Goodwill                                                      1,278,805      1,332,909
   Other assets                                                     95,408        135,954
                                                               ------------   ------------
           Total other assets                                    1,374,213      1,468,863
                                                               ------------   ------------
           Total assets                                        $ 9,591,111    $ 9,388,837
                                                               ============   ============

     LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Current portion of long-term debt                           $   183,292    $   208,207
   Notes payable                                                 4,953,673      4,759,680
   Accounts payable                                                417,326        458,104
   Accrued salaries and related employee benefits                  404,729        425,882
   Other current liabilities                                       398,269        455,739
   Income taxes payable                                            353,420        343,456
                                                               ------------   ------------
           Total current liabilities                             6,710,709      6,651,068
                                                               ------------   ------------
   Long-term debt                                                  728,687        730,736
                                                               ------------   ------------
           Total liabilities                                   $ 7,439,396    $ 7,381,804
                                                               ============   ============

STOCKHOLDERS' EQUITY
   Common stock, Class A, $.001 par value,
    200,000,000 shares authorized, 12,595,142 and 12,595,142
    shares issued and outstanding at 9/30/01 and 12/31/00      $    12,095    $    12,095
   Common stock, Class B, $.001 par value,
    10,000 shares authorized, issued and
    outstanding                                                         10             10
   Preferred stock, $1 par value, 5,000,000
    shares authorized, 10,000 shares issued
    and outstanding                                                 10,000         10,000
   Additional paid-in capital                                      441,012        441,012
   Retained earnings                                             1,852,848      1,708,166

   Stock subscription receivable                                  (164,250)      (164,250)
                                                               ------------   ------------
           Total stockholders' equity                            2,151,715      2,007,033

                                                               ------------   ------------
           Total liabilities and stockholders' equity          $ 9,591,111    $ 9,388,837
                                                               ============   ============

                                             1
</TABLE>
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U N A U D I T E D
MID-ATLANTIC HOME HEALTH NETWORK, INC.
CONSOLIDATED INCOME STATEMENT

                                                   30-Sep-01        30-Sep-00
                                                 -------------     -------------

REVENUES                                         $ 21,837,152      $ 20,197,382

EXPENSES
   Salaries                                        15,885,327        15,256,658
   General and administrative                       5,043,738         3,451,303
   Depreciation & amortization                        123,539            63,472
   Interest                                           554,893           475,819

                                                 -------------     -------------
           Total expenses                          21,607,497        19,247,252

                                                 -------------     -------------
           Income before income taxes                 229,655           950,130

PROVISION FOR INCOME TAXES                            (84,972)         (354,136)

                                                 -------------     -------------
           Net income                            $    144,683      $    595,994
                                                 =============     =============

EARNINGS PER COMMON SHARE                        $      0.011      $      0.047

                                        2
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<TABLE>
MID-ATLANTIC HOME HEALTH NETWORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
<CAPTION>

                                                                      2001           2000
                                                                  ------------   ------------
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
           Net Income (loss)                                      $   144,682    $   268,685
           Adjustments to reconcile net income to net
            cash provided by operating activities:
                    Depreciation and amortization                     177,643         17,413
                    Changes in assets and liabilities:
                      Accounts receivable                             662,004     (1,709,431)
                      Due from affiliates                             (66,510)        21,198
                      Prepaid expenses and other current assets      (203,114)      (242,892)
                      Other assets                                     40,546        (35,004)
                      Deferred tax asset                                    -              -
                      Accounts payable                                (40,778)       150,760
                      Accrued salaries                                (21,153)        76,652
                      Income taxes payable                              9,964        114,255
                      Other current liabilities                       (57,470)        58,827

                                                                  ------------   ------------
                    Net cash provided by operating activities         645,814     (1,279,537)

CASH FLOWS FROM INVESTING ACTIVITIES:
           Acquisition of property, plant and equipment               (89,276)       (15,934)
           Undepreciated Cost of Disposed Assets                       15,337
                                                                  ------------   ------------
                    Net cash provided by investing activities         (73,939)       (15,934)

CASH FLOWS FROM FINANCING ACTIVITIES
           Current borrowings                                          26,827
           Repayment of long term debt                                (53,790)        (2,763)
           Dividends paid on preferred stock                                            (300)
           Changes in notes payable                                   193,993      1,749,900
           Proceeds from capital stock transactions                                    1,250

                                                                  ------------   ------------
                    Net cash provided by financing activities         167,030      1,748,087

                    Net increase (decrease) in cash                   738,905        452,616

CASH AND CASH EQUIVALENTS
Cash balance, December 31,                                            549,811        548,889

                                                                  ------------   ------------
Cash balance, September 30,                                       $ 1,288,716    $ 1,001,505
                                                                  ============   ============

                                              3
</TABLE>
<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000


NOTE 1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

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

                                       4
<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000


NOTE 1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

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

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

Under the Company's cash management system, checks issued but not yet presented
to banks frequently result in overdraft balances for accounting purposes. The
overdraft balances have been netted with positive balances and are classified as
"cash and cash equivalents" in the consolidated balance sheet.

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

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

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

                                       5
<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000


NOTE 1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)

STOCKHOLDERS' EQUITY. The Company has three classes of stock. Two hundred
million shares of Class A common stock have been authorized. The Class A
shareholders have the right to elect one third of the directors of the Company.
Ten thousand shares of Class B common stock, with the right to elect two thirds
of the directors, have also been authorized. Additionally, five million shares
of Class C convertible preferred stock have been authorized. The preferred stock
is paid a dividend of 12%.

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

                                       6
<PAGE>

                     MID-ATLANTIC HOME HEALTH NETWORK, INC.

                           FILED ON NOVEMBER 14, 2001

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


         Mid-Atlantic Home Health Network, Inc. (MAHN) is a holding company of
three corporate entities: National Nurses Service, Inc., Hunt Country Nursing
Services, Inc., and Hunt Country Home Health. The analysis of consolidated
operations is presented below.

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

CONSOLIDATED RESULTS OF OPERATIONS:
-----------------------------------

         For the first nine months of 2001, MAHN had consolidated revenue of
$21,837,000 versus $20,197,000 for the first nine months of 2000. This
represents an increase of 8 percent or $1,640,000.

         Operating expenses for the first nine months of 2001 totaled
$21,607,000 versus $19,247,000 a year ago. Operating expenses increased
$2,360,000 or 12 percent.

         Through the third quarter of 2001, our operating income before taxes
totaled $230,000 versus $950,000 a year ago. This change represents a decrease
of $720,000. After taxes, MAHN had net income of $145,000 versus $596,000 a year
ago.

         Although MAHN continues to show revenue growth, profits have declined.
Our emphasis will continue to be on marketing and improving the margins on the
less profitable segments.

         MAHN, the holding company, does not generate any income but reports the
corporate-wide administrative expenses for the three entities. For the first
nine months of 2001 MAHN had revenue of $29,000. Operating expenses totaled
$219,000. The operating loss before taxes totaled $190,000.

                                       7
<PAGE>

                       NATIONAL NURSES SERVICE, INC. (NNS)
                       -----------------------------------

         National Nurses Service, Inc. (NNS) has medical staffing operations in
Silver Spring, Maryland; Fairfax, Norfolk, and Richmond, Virginia. The medical
staffing operation produces approximately 93 percent of the revenue for NNS. The
home health operation located in Richmond, Virginia produces the remaining 7
percent.

         The combined revenue for NNS for the first nine months of this fiscal
year totaled $15,257,000 versus $12,944,000 a year ago. The increase of
$2,313,000 represents an18 percent increase for NNS.

         Combined NNS operating expenses increased to $14,532,000 compared to
$11,933,000 a year ago. This represents a 22 percent increase.

         Combined income before income tax for the first nine months of this
fiscal year totaled $733,000 versus $1,011,000. The $278,000 difference
represents a decrease of 27 percent.

                   HUNT COUNTRY NURSING SERVICES, INC. (HCNS)
                   ------------------------------------------

         Hunt Country Nursing Services, Inc. (HCNS) provides private duty
nursing services from offices in Charlottesville, Fairfax, Fredericksburg,
Manassas, Richmond, Tappahannock, Warrenton, and Winchester, Virginia. HCNS also
provides durable medical equipment and supply sales from an office located in
Fredericksburg, Virginia.

         Revenue for the first nine months of 2001 totaled $5,519,000 versus
$6,350,000 a year ago. This is a decrease of approximately 13 percent or
$831,000.

         Operating expenses for 2001 totaled $5,787,000 compared to $6,161,000
for 2000. This represents a decrease of 6 percent or $374,000.

         HCNS had a loss of $228,000 for the first nine months of 2001 compared
to income of $189,000 for the same period in 2000.

         The durable medical equipment operation located in Charlottesville,
Virginia was closed in May 2001. The loss from this operation totaled $125,000
for the first nine months of 2001. Although Management anticipates additional
losses due to write-offs and billing adjustments, these write-offs and
adjustments are not expected to have a material effect on the Company's
financial position.

                                       8
<PAGE>

                      HUNT COUNTRY HOME HEATLH, INC. (HCHH)
                      -------------------------------------

         Hunt Country Home Health, Inc. (HCHH), located in Fredericksburg,
Virginia, provides home health services.

         Revenue for the first nine months of 2001 totaled $367,000 versus
$868,000 a year ago. The decrease is $501,000 or 58 percent.

         Operating expenses decreased from $867,000 in 2000 to $469,000 for the
first nine months of 2001. The decrease is $398,000 or 46 percent.

         HCHH had an $81,000 loss for the first nine months of 2001 compared to
a $1,000 profit a year ago.

                                       9
<PAGE>

                                   SIGNATURES


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


                                      MID-ATLANTIC HOME HEALTH NETWORK, INC.


Dated:  November 14, 2001             By:    /s/ Philip V. Warman
                                         --------------------------------------
                                             Philip V. Warman, Chairman & CEO


                                       10