****UNITED STATES****
****SECURITIES AND EXCHANGE COMMISSION****
****Washington, DC 20549****
****FORM 10-KSB****
****[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934****
**For the fiscal year ended February 29, 2004**
****[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934****
**For the transition period from       to      **
****Commission File Number 0-9587****
****HEALTH OUTCOMES MANAGEMENT, INC.****
**(Name of Small Business Issuer in its Charter)**
****          Minnesota                                                  41-1546471****
**(State or Other Jurisdiction of Incorporation or Organization)              (IRS Employer Identification Number)**
****8311 Windbreak Trail N.St. Paul, Minnesota 55042****
**(Address of Principal Executive Offices, including Zip Code)**
****(612) 245-4773****
**(Registrant's Telephone Number, including Area Code)**
****Securities registered pursuant to Section 12(b) of the Act:**  None**
****Securities registered pursuant to Section 12(g) of the Act:**  Common Stock, $0.01 par value**

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     [X]  Yes     [  ]  No

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B not contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.     [X]

The issuer's revenues for the fiscal year ended February 29, 2004 were $0.

The aggregate market value of the voting stock held by non-affiliates (persons other than officers, directors, or holders of more than 5% of the outstanding stock) of the registrant was approximately $143,195 based upon the closing price of the Common Stock as reported on the OTC:BB on May 21, 2004.

The number of shares outstanding of the registrant's Common Stock, $0.01 par value, on May 21, 2004 was 9,787,720.

****DOCUMENTS INCORPORATED BY REFERENCE****

No documents are incorporated by reference.

Transitional Small Business Disclosure Format (check one):  [  ] Yes   [X] No

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****HEALTH OUTCOMES MANAGEMENT, INC.Form 10-KSB for the Year Ended February 29, 2004****
****TABLE OF CONTENTS****
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|--|--------------------|--|-----------------------------------------------------------------------------------------------------------------|--|--|
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|  | **PART I**         |  |                                                                                                                 |  |  |
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|  | Item 1.            |  | Description of Business                                                                                         |  |  |
|  | Item 2.            |  | Description of Property                                                                                         |  |  |
|  | Item 3.            |  | Legal Proceedings                                                                                               |  |  |
|  | Item 4.            |  | Submission of Matters to a Vote of Security Holders                                                             |  |  |
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|  | **PART II**        |  |                                                                                                                 |  |  |
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|  | Item 5.            |  | Market for Common Equity and Related Stockholder Matters                                                        |  |  |
|  | Item 6.            |  | Management's Discussion and Analysis or Plan of Operation                                                       |  |  |
|  | Item 7.            |  | Financial Statements and Supplementary Data                                                                     |  |  |
|  | Item 8.            |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                            |  |  |
|  | Item 8a.           |  | Disclosure Controls and Procedures                                                                              |  |  |
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|  | **PART III**       |  |                                                                                                                 |  |  |
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|  | Item 9.            |  | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act |  |  |
|  | Item 10.           |  | Executive Compensation                                                                                          |  |  |
|  | Item 11.           |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                  |  |  |
|  | Item 12.           |  | Certain Relationships and Related Transactions                                                                  |  |  |
|  | Item 13.           |  | Exhibits and Reports on Form 8-K                                                                                |  |  |
|  | Item 14.           |  | Principal Accountant Feesand Services                                                                           |  |  |
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|  | **SIGNATURES**     |  |                                                                                                                 |  |  |
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|  | **CERTIFICATIONS** |  |                                                                                                                 |  |  |

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****PART I****

**ITEM 1 - BUSINESS**

**Introduction**Through October 31, 2001, Health Outcomes Management, Inc. (the "Company", "Health Outcomes",  or "HOMI") was engaged in licensing proprietary software services to long-term care facilities, home healthcare agencies, hospitals and retail pharmacies.Health Outcomes sold its assets to an unrelated party effective November 1, 2001 and has had no operations since that time.

**Operating Segments/Principal Products/Markets**The Company had 5 primary products until November 1, 2001.  These were: Long-Term Care Software, Home Healthcare Agency Software, Hospital Software, Pharmacy Practice Software and Continuing Support Services.  The software products were designed to help practitioners in the healthcare and pharmaceutical industries to care for patients and meet the reporting standards required by federal and state regulations.The Company currently has no operations, products or markets.

**Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts**The Company assigned its rights to its Pharmaceutical Care software during the year 2001 to an outside entity.  The Company received the right to royalties from future revenues generated by the sale of software licenses by this entity, at varying rates on gross revenues, through February 2007.  To date, the Company has received no royalties.

**Employees**The Company has had no employees since November 1, 2001, but currently has two independent contractors.

**ITEM 2 - PROPERTIES**The Company doesn't own or lease any facilities at this time.

**ITEM 3 - LEGAL PROCEEDINGS**As of May 21, 2004, the Company was not involved in any legal proceedings.

**ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**On December 4, 2003, the Company held a Special Meeting of Shareholders to approve an amendment to the Company'sArticles of Incorporation that would increase the number of authorized shares of the Company's capital stock to200,000,000 shares of undesignated capital stock and remove a prohibition on the creation of classes or series ofpreferred stock that contain voting rights in addition to those required by law.The amendment passed with 6,083,309 votes for, 339,208 votes against, and 5,400 votes abstained.

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****PART II****

**ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**The Company's Common Stock trades on the OTC Bulletin Board Market (Over-The-Counter includes OTC and OTC:BB) under the symbol "HOMI".  The following table sets forth the quarterly high and low reported last sales prices for the Company's Common Stock over the past two years.

|  |                  |  | **Period**     |  | **High** |  | **Low** |  |
|--|------------------|--|----------------|--|----------|--|---------|--|
|  | **Fiscal 2004:** |  | First Quarter  |  | $0.017   |  | $0.013  |  |
|  |                  |  | Second Quarter |  | $0.025   |  | $0.010  |  |
|  |                  |  | Third Quarter  |  | $0.095   |  | $0.016  |  |
|  |                  |  | Fourth Quarter |  | $0.090   |  | $0.020  |  |
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|  | **Fiscal 2003:** |  | First Quarter  |  | $0.015   |  | $0.013  |  |
|  |                  |  | Second Quarter |  | $0.015   |  | $0.013  |  |
|  |                  |  | Third Quarter  |  | $0.015   |  | $0.008  |  |
|  |                  |  | Fourth Quarter |  | $0.024   |  | $0.010  |  |

As of May 21, 2004, management believes that the number of share owner accounts of record was approximately 267, at which date the closing market price of the Company's common stock was $0.07 per share.To date, the Company has paid no dividends and does not intend to pay dividends in the foreseeable future.  Future dividend policy with respect to the common stock will depend on conditions existing at the time, including the Company's earnings (if any), capital needs, financial condition, general business conditions and other factors considered by the Board of Directors.

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

**General**The information appearing below relates to prior periods, the results of operations for which periods are not necessarily indicative of the results which may be expected for any subsequent periods.  Because of the sale of the Company's assets in November 2001, future periods will primarily reflect general and administrative expenses associated with the continuing administration of the Company.  No inferences as to future performance should be drawn.As it relates to future operations, the Company's intent is to acquire an interest in a business entity which desires the perceived advantages of a corporation which has a class of securities registered under the Exchange Act.  The Company will not restrict its search to any specific business, industry or geographical location and the Company may participate in a business venture of virtually any kind or nature.  The Company's management anticipates that it will be able to participate in only one potential business venture because of its nominal assets and limited financial resources.The Company may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes.The Company anticipates that the selection of a business opportunity in which to participate will be complex and extremely risky.  Management believes, but has not conducted any research to confirm, that there are business entities seeking the perceived benefits of a reporting corporation.  Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, providing liquidity for shareholders and other factors.

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The Company has, and will continue to have, no capital with which to provide the owners of business entities with any cash or other assets.  However, the Company's management believes it will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a reporting company without incurring the cost and time required to conduct an initial public offering.The Company is currently subject to all reporting requirements included in the Securities and Exchange Act of 1934.  Included in these requirements is the duty of the Company to file audited financial statements as part of or within 60 days following the due date for filing its Form 8-K which is required to be filed with the Securities and Exchange Commission within 15 days following the completion of a business combination.  The Company intends to acquire or merge with a company for which audited financial statements are available or for which it believes audited financial statements can be obtained within the required period of time.  The Company may reserve the right in the documents for the business combination to void the transaction if the audited financial statements are not timely available or if the audited financial statements provided do not conform to the representations made by the target company.The Company will not restrict its search for any specific kind of business entities, but may acquire a venture, which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its business life.  It is impossible to predict when, or if, such a transaction will be consummated.

**Results of Operations**

**Comparison of Fiscal Year 2004 vs. Fiscal Year 2003**

The Company had no revenue in 2004.  Operational expenses were incurred in connection with the administration of the Company.

**Comparison of Fiscal Year 2003 vs. Fiscal Year 2002**

The Company had no revenue in 2004.  Operational expenses were incurred in connection with the administration of the Company.

**Liquidity and Capital Resources**The Company had working capital of $2,888 compared to $17,759 for fiscal 2004 and 2003, respectively, a decrease of $14,871.  The decrease in working capital was substantially due to the Company not having any influx of cash, yet continuing to pay ongoing administrative expenses.The Company does not have commitments for any capital expenditures for the fiscal year 2005.The Company's cash flow position has deteriorated during the fiscal year.  The Company's efforts will be concentrated on finding a company to merge with or acquire.  However, no assurance can be given if or when such a transaction will occur.  The Company may not have enough cash to fund thesearch through the end of fiscal 2005.

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**ITEM 7 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

****INDEX TO CONSOLIDATED FINANCIAL STATEMENTS****
|  |                                                                                                                                                  |  |  |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------|--|--|
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|  | Independent Auditors' Report on the Financial Statements                                                                                         |  |  |
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|  | Independent Auditors' Report on the Financial Statements                                                                                         |  |  |
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|  | Consolidated Financial Statements:                                                                                                               |  |  |
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|  | Consolidated Balance Sheets as of February 29, 2004 and February 28, 2003                                                                        |  |  |
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|  | Consolidated Statements of Discontinued Operations for the fiscal years ended February 29, 2004, February 28, 2003 and February 28, 2002         |  |  |
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|  | Consolidated Statements of Cash Flows for the fiscal years ended February 29, 2004, February 28, 2003 and February 28, 2002                      |  |  |
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|  | Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended February 29, 2004, February 28, 2003 and February 28, 2002 |  |  |
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|  | Notes to the Consolidated Financial Statements                                                                                                   |  |  |
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****INDEPENDENT AUDITORS' REPORT****

The Board of Directors and Stockholders'Health Outcomes Management, Inc. and SubsidiariesMinneapolis, Minnesota

We have audited the accompanying Consolidated Balance Sheet of Health Outcomes Management, Inc. and Subsidiaries as of February 29, 2004 and the related Consolidated Statements of Discontinued Operations, Changes in Stockholders' Equity, and Cash Flows for the year ended February 29, 2004.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (U.S.).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Health Outcomes Management, Inc. and Subsidiaries as of February 29, 2004 and the results of their operations and their cash flows for the year ended February 29, 2004, in conformity with accounting principles generally accepted in the United States of America.The accompanying financial statements have been prepared assuming that Health Outcomes Management, Inc. and Subsidiaries will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company's net working capital, and lack of sufficient revenues from operations raise substantial doubt about the entity's ability to continue as a going concern.  Management's plans in regard to these matters are described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Mayer Hoffman McCann P.C.Certified Public AccountantsMinneapolis, MinnesotaMay 20, 2004

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****INDEPENDENT AUDITORS' REPORT****

The Board of Directors and Stockholders'Health Outcomes Management, Inc. and SubsidiariesMinneapolis, Minnesota

We have audited the accompanying Consolidated Balance Sheets of Health Outcomes Management, Inc. and Subsidiaries as of February 28, 2003 and the related Consolidated Statements of Discontinued Operations, Changes in Stockholders' Equity, and Cash Flows for the two years ended February 28, 2003 and February 28, 2002.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Health Outcomes Management, Inc. and Subsidiaries as of February 28, 2003 and the results of their operations and their cash flows for the two years ended February 28, 2003 and February 28, 2002, in conformity with accounting principles generally accepted in the United States of America.The accompanying financial statements have been prepared assuming that Health Outcomes Management, Inc. and Subsidiaries will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company's net working capital, and lack of sufficient revenues from operations raise substantial doubt about the entity's ability to continue as a going concern.  Management's plans in regard to these matters are described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Schweitzer karon & Bremer LLCCertified Public AccountantsMinneapolis, MinnesotaMay 13, 2003

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**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESConsolidated Balance Sheets**

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| **** |  | **Feb. 29, 2004** |  |  | **Feb. 28, 2003** |  |  |  |  |
|------|--|-------------------|--|--|-------------------|--|--|--|--|

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| **ASSETS**                            |   |       |  |   |        |  |  |  |  |
|---------------------------------------|---|-------|--|---|--------|--|--|--|--|
| **Current Assets:**                   |   |       |  |   |        |  |  |  |  |
|   Cash and Cash Equivalents | $ | 7,563 |  | $ | 26,365 |  |  |  |  |
|   Prepaid Expenses          |   | -     |  |   | 523    |  |  |  |  |

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| **Total Current Assets** |  | 7,563 |  |  | 26,888 |  |  |  |  |
|--------------------------|--|-------|--|--|--------|--|--|--|--|

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| **TOTAL ASSETS** | $ | 7,563 |  | $ | 26,888 |  |  |  |  |
|------------------|---|-------|--|---|--------|--|--|--|--|

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| **LIABILITIES AND STOCKHOLDERS' EQUITY** |   |       |  |   |       |  |  |  |  |
|------------------------------------------|---|-------|--|---|-------|--|--|--|--|
| **Current Liabilities:**                 |   |       |  |   |       |  |  |  |  |
|   Accounts Payable             | $ | 4,675 |  | $ | 9,129 |  |  |  |  |

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| **Total Current Liabilities** |  | 4,675 |  |  | 9,129 |  |  |  |  |
|-------------------------------|--|-------|--|--|-------|--|--|--|--|

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| **STOCKHOLDERS' EQUITY**                                                                                                                                        |  |                        |   |  |                        |   |  |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--|------------------------|---|--|------------------------|---|--|--|--|
| Common Stock, par value $0.01 per share;2004: Authorized 200,000,000 shares; Issued 9,787,720 shares2003: Authorized 15,000,000 shares; Issued 9,287,720 shares |  | 97,877                 |   |  | 92,877                 |   |  |  |  |
| Additional Paid-In Capital                                                                                                                                      |  | 4,830,148              |   |  | 4,815,148              |   |  |  |  |
| Accumulated Deficit                                                                                                                                             |  | (  4,925,137 | ) |  | (  4,890,266 | ) |  |  |  |

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| **Total Stockholders' Equity** |  | 2,888 |  |  | 17,759 |  |  |  |  |
|--------------------------------|--|-------|--|--|--------|--|--|--|--|

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| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $ | 7,563 |  | $ | 26,888 |  |  |  |  |
|------------------------------------------------|---|-------|--|---|--------|--|--|--|--|

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**See Accompanying Notes to the Consolidated Financial Statements**

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**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESConsolidated Statements of Discontinued Operations**

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| **For the Years Ended** |  | **Feb. 29, 2004** |  |  | **Feb. 28, 2003** |  |  | **Feb. 28, 2002** |  |
|-------------------------|--|-------------------|--|--|-------------------|--|--|-------------------|--|

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| Net Sales          | $ | - |  | $ | - |  | $ | 363,055 |  |
|--------------------|---|---|--|---|---|--|---|---------|--|
| Cost of Goods Sold |   | - |  |   | - |  |   | 115,223 |  |

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| **Gross Profit** |  | - |  |  | - |  |  | 247,832 |  |
|------------------|--|---|--|--|---|--|--|---------|--|

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| **Operating Expenses:**                |  |        |  |  |        |  |  |         |  |
|----------------------------------------|--|--------|--|--|--------|--|--|---------|--|
|   General and Administrative |  | 34,871 |  |  | 66,996 |  |  | 228,710 |  |

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| **Total Operating Expenses** |  | 34,871 |  |  | 66,996 |  |  | 228,710 |  |
|------------------------------|--|--------|--|--|--------|--|--|---------|--|

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| **Operating Income (Loss)** |  | (  34,871 | ) |  | (  66,996 | ) |  | 19,122 |  |
|-----------------------------|--|---------------------|---|--|---------------------|---|--|--------|--|

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| **Non-Operating Income (Expense):**                  |  |   |  |  |                  |   |  |                     |   |
|------------------------------------------------------|--|---|--|--|------------------|---|--|---------------------|---|
|   Interest Income                          |  | - |  |  | -                |   |  | 433                 |   |
|   Interest Expense                         |  | - |  |  | (  747 | ) |  | (  11,591 | ) |
|   Other Income (Expense)                   |  | - |  |  | -                |   |  | 8,821               |   |
|   Gain (Loss) on Sale of Assets/Operations |  | - |  |  | -                |   |  | 264,147             |   |

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| **Total Non-Operating Income (Expense)** |  | - |  |  | (  747 | ) |  | 261,810 |  |
|------------------------------------------|--|---|--|--|------------------|---|--|---------|--|

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| **Net Income (Loss)** | $ | (  34,871 | ) | $ | (  67,743 | ) | $ | 280,932 |  |
|-----------------------|---|---------------------|---|---|---------------------|---|---|---------|--|

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| **Net Income (Loss) Per Share Data:**             |   |           |  |   |                   |   |   |           |  |
|---------------------------------------------------|---|-----------|--|---|-------------------|---|---|-----------|--|
| ***Basic***                                       |   |           |  |   |                   |   |   |           |  |
|   Net Income (Loss) Per Share           | $ | 0.00      |  | $ | (  0.01 | ) | $ | 0.03      |  |
|   Shares Used in Per Share Calculations |   | 9,461,217 |  |   | 9,287,720         |   |   | 9,273,137 |  |
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| ***Diluted***                                     |   |           |  |   |                   |   |   |           |  |
|   Net Income (Loss) Per Share           | $ | 0.00      |  | $ | (  0.01 | ) | $ | 0.03      |  |
|   Shares Used in Per Share Calculations |   | 9,461,217 |  |   | 9,287,720         |   |   | 9,273,137 |  |

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**See Accompanying Notes to the Consolidated Financial Statements**

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**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows**

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| **For the Years Ended** |  | **Feb. 29, 2004** |  |  | **Feb. 28, 2003** |  |  | **Feb. 28, 2002** |  |
|-------------------------|--|-------------------|--|--|-------------------|--|--|-------------------|--|

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| **CASH FLOWS FROM OPERATING ACTIVITIES:** |   |                     |   |   |                     |   |   |         |  |
|-------------------------------------------|---|---------------------|---|---|---------------------|---|---|---------|--|
|   Net Income (Loss)             | $ | (  34,871 | ) | $ | (  67,743 | ) | $ | 280,932 |  |

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| **Adjustments to Reconcile Net Income (Loss) to NetCash Provided By (Used In) Operating Activities:** |  |                    |   |  |                    |   |  |                      |   |
|-------------------------------------------------------------------------------------------------------|--|--------------------|---|--|--------------------|---|--|----------------------|---|
|   Depreciation and Amortization                                                             |  | -                  |   |  | 9,709              |   |  | 7,513                |   |
|   Provision for Losses on Trade Receivables                                                 |  | -                  |   |  | -                  |   |  | 1,933                |   |
|   Net Recoveries (Writeoffs) of Bad Debt(s)                                                 |  | -                  |   |  | -                  |   |  | (  154     | ) |
|   Loss (Gain) on Disposal of Inventory and Equipment                                        |  | -                  |   |  | -                  |   |  | (  3,430   | ) |
|   Non-Cash Compensation                                                                     |  | -                  |   |  | -                  |   |  | 255                  |   |
|   Loss (Gain) on Sale of Assets/Operations                                                  |  | -                  |   |  | -                  |   |  | (  264,147 | ) |
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| **Changes in Operating Assets and Liabilities, Net of Acquisitions**                                  |  |                    |   |  |                    |   |  |                      |   |
|   (Increase) Decrease in Trade Receivables                                                  |  | -                  |   |  | -                  |   |  | 24,379               |   |
|   (Increase) Decrease in Prepaid Expenses                                                   |  | 523                |   |  | 3,730              |   |  | 2,790                |   |
|   (Increase) Decrease in Other Current Assets                                               |  | -                  |   |  | 7,940              |   |  | (  7,940   | ) |
|   Increase (Decrease) in Accounts Payable                                                   |  | (  4,454 | ) |  | (  3,069 | ) |  | (  59,341  | ) |
|   Increase (Decrease) in Deferred Revenue                                                   |  | -                  |   |  | -                  |   |  | (  25,115  | ) |
|   Increase (Decrease) in Accrued Expenses                                                   |  | -                  |   |  | -                  |   |  | (  49,535  | ) |
|   Increase (Decrease) in Other Current Liabilities                                          |  | -                  |   |  | (  199   | ) |  | (  7,479   | ) |

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| **Net Cash Used In Operating Activities** |  | (  38,802 | ) |  | (  49,632 | ) |  | (  99,339 | ) |
|-------------------------------------------|--|---------------------|---|--|---------------------|---|--|---------------------|---|

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| **CASH FLOWS FROM INVESTING ACTIVITIES:**                               |  |   |  |  |   |  |  |         |  |
|-------------------------------------------------------------------------|--|---|--|--|---|--|--|---------|--|
|   Net Proceeds from the Sale of Assets/Operations             |  | - |  |  | - |  |  | 265,671 |  |
|   Proceeds from the Sale of Equipment, Furniture and Fixtures |  | - |  |  | - |  |  | 3,430   |  |

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| **Net Cash Provided by Investing Activities** |  | - |  |  | - |  |  | 269,101 |  |
|-----------------------------------------------|--|---|--|--|---|--|--|---------|--|

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| **CASH FLOWS FROM FINANCING ACTIVITIES:**                      |  |        |  |  |                    |   |  |                      |   |
|----------------------------------------------------------------|--|--------|--|--|--------------------|---|--|----------------------|---|
|   Principal Payments under Capital Lease Obligations |  | -      |  |  | (  5,924 | ) |  | (  5,377   | ) |
|   Principal Payments under Notes Payable             |  | -      |  |  | -                  |   |  | (  117,500 | ) |
|   Proceeds from Convertible Debt                     |  | 20,000 |  |  | -                  |   |  | -                    |   |

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| **Net Cash Provided By (Used In) Financing Activities** |  | 20,000 |  |  | (  5,924 | ) |  | (  122,877 | ) |
|---------------------------------------------------------|--|--------|--|--|--------------------|---|--|----------------------|---|

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| **Net Increase (Decrease) in Cash and Cash Equivalents** |  | (  18,802 | ) |  | (  55,556 | ) |  | 46,885 |  |
|----------------------------------------------------------|--|---------------------|---|--|---------------------|---|--|--------|--|
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| **Cash and Cash Equivalents:**                           |  |                     |   |  |                     |   |  |        |  |
|   Beginning                                    |  | 26,365              |   |  | 81,921              |   |  | 35,036 |  |

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|   Ending | $ | 7,563 |  | $ | 26,365 |  | $ | 81,921 |  |
|--------------------|---|-------|--|---|--------|--|---|--------|--|

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| **SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:** |   |        |  |   |     |  |   |       |  |
|---------------------------------------------------------|---|--------|--|---|-----|--|---|-------|--|
| Cash Paid During the Year for Interest                  | $ | -      |  | $ | 747 |  | $ | 9,790 |  |
||
||
| **Non-Cash Financing Transactions:**                    |   |        |  |   |     |  |   |       |  |
| Conversion of Debt to Equity (Note 10)                  | $ | 20,000 |  | $ | -   |  | $ | -     |  |

----

**See Accompanying Notes to the Consolidated Financial Statements**

----

**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESConsolidated Statements of Changes in Stockholders' Equity**

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| ADD HEADINGS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|--------------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|

----

| **Balance - February 28, 2001**                     | 0 | $ | - | 9,262,130 | $ | 92,622 | $ | 4,815,148 | $ | (  5,103,455 | ) | $ | (  195,685 | ) |
|-----------------------------------------------------|---|---|---|-----------|---|--------|---|-----------|---|------------------------|---|---|----------------------|---|
|                                                     |
| Issuance of Common Stock(Convert Options to Shares) |   |   |   | 25,590    |   | 255    |   |           |   |                        |   |   | 255                  |   |
| Net Income (Loss)                                   |   |   |   |           |   |        |   |           |   | 280,932                |   |   | 280,932              |   |

----

| **Balance - February 28, 2002** | 0 | $ | - | 9,287,720 | $ | 92,877 | $ | 4,815,148 | $ | (  4,822,523 | ) | $ | 85,502              |   |
|---------------------------------|---|---|---|-----------|---|--------|---|-----------|---|------------------------|---|---|---------------------|---|
| Net Income (Loss)               |   |   |   |           |   |        |   |           |   | (  67,743    | ) |   | (  67,743 | ) |

----

| **Balance - February 28, 2003** | 0 | $ | - | 9,287,720 | $ | 92,877 | $ | 4,815,148 | $ | (  4,890,266 | ) | $ | 17,759              |   |
|---------------------------------|---|---|---|-----------|---|--------|---|-----------|---|------------------------|---|---|---------------------|---|
| Issuances of Common Stock       |   |   |   | 500,000   |   | 5,000  |   | 15,000    |   |                        |   |   | 20,000              |   |
| Net Income (Loss)               |   |   |   |           |   |        |   |           |   | (  34,871    | ) |   | (  34,871 | ) |

----

| **Balance - February 29, 2004** | 0 | $ | - | 9,787,720 | $ | 97,877 | $ | 4,830,148 | $ | (  4,925,137 | ) | $ | 2,888 |  |
|---------------------------------|---|---|---|-----------|---|--------|---|-----------|---|------------------------|---|---|-------|--|

----

**See Accompanying Notes to the Consolidated Financial Statements**

----

****HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESNotes to the Consolidated Financial Statements****

**NOTE 1.  Nature of Business and Significant Accounting PoliciesNature of Business:**Health Outcomes Management, Inc. (the "Company"), formerly known as Data Med Clinical Support Services, Inc., and its wholly owned subsidiaries, developed and supplied computer software systems and services to the healthcare industry.The Company marketed clinical and financial software systems and related services used for the management of long-term care facilities, homecare facilities, and hospital departments.  The various software systems were designed to meet the needs of the specific industry and required little or no production, modification or customization.The Company intends to acquire an interest in a business entity which desires the perceived advantages of a corporation which has a class of securities registered under the Exchange Act.  See Note 2 for additional information relating to the Company's continuation as a going concern.

**Significant Accounting Policies:****Principles of Consolidation**The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.  All intercompany transactions and balances are eliminated in consolidation.  The wholly owned subsidiaries were inactive as of February 2002.**Fair Value of Financial Instruments**The Company's financial instruments consist of cash and cash equivalents, short-term trade receivables and payables for which current carrying amounts approximate fair market value.**Uses of Estimates**The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, 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 revenue and expenses during the reported period.  Actual results could differ from those estimates.**Income Taxes**Deferred tax assets and liabilities are recognized for the future tax consequence attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.**Comprehensive Income**The Company does not have any items of other comprehensive income in any of the periods presented.**Net Income (Loss) Per Common Share**Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for that period.  Diluted net income (loss) per share is computed giving effect to all dilutive potential common shares that were outstanding during that period.  Dilutive potential shares consist of incremental common shares issuable upon exercise of stock options and warrants and conversion of preferred stock and convertible debt for all periods.

----

****HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESNotes to the Consolidated Financial Statements****

**NOTE 1.  Nature of Business and Significant Accounting Policies (continued)****Significant Accounting Policies (continued):****Cash and Cash Equivalents**For purposes of the cash flow statements, the Company considers highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.  The Company maintains its cash in bank deposit accounts and has not experienced any losses in such accounts.  The Company believes it is not exposed to any significant credit risk on cash.**Reclassifications**There were no material reclassifications for the periods presented.

**NOTE 2.  Continuation as a Going Concern**The accompanying financial statements are prepared assuming the Company will continue as a going concern.  The Company generated an operating loss of $34,871 during the year ended February 28, 2004.  The Company incurred a decrease in assets of $19,325 during the year ended February 29, 2004; net cash used in operating activities was $38,802.  As of February 29, 2004, the Company had current assets of $7,563 and working capital of $2,888.  The Company will not generate any revenues or receive any cash inflows unless management's attempts to acquire an interest in a business entity which seeks the perceived advantages of a corporation which has a class of securities registered under the Exchange Act are successful.  Accordingly, there is doubt about the Company's ability to continue in existence.  The financial statements do not include any adjustments that might result should the Company's be unable to continue as a going concern.

**NOTE 3. Income Taxes**There was no income tax expense or benefit amounts recorded for 2004, 2003 or 2002.The provisions for income taxes from continuing operations for the years ended February 29, 2004, February 28, 2003 and 2002 differs from the statutory federal tax rate applied as follows:

----

|  |  | **2004** |  | **2003** |  | **2002** |  |
|--|--|----------|--|----------|--|----------|--|

----

| Federal statutory tax rate    |  | 34%  |  | 34%  |  | 34%  |  |
|-------------------------------|--|------|--|------|--|------|--|
| State tax rate                |  | 2%   |  | 2%   |  | 2%   |  |
| Change in valuation allowance |  | -36% |  | -36% |  | -36% |  |

----

|  |  | 0% |  | 0% |  | 0% |  |
|--|--|----|--|----|--|----|--|

----

Deferred taxes consist of the following:

----

|  |  | **2004** |  | **2003** |  | **2002** |  |
|--|--|----------|--|----------|--|----------|--|

----

| Deferred tax assets:             |  |                                                                                  |  |                                                                                              |  |                                                                        |  |
|----------------------------------|--|----------------------------------------------------------------------------------|--|----------------------------------------------------------------------------------------------|--|------------------------------------------------------------------------|--|
|   Capital leases       |  | $             - |  | $               - |  | $           800 |  |
| Net operating loss carryforwards |  | 788,000                                                                          |  | 1,080,000                                                                                    |  | 1,479,200                                                              |  |

----

| Gross deferred tax assets |  | 788,000                                |   | 1,080,000              |   | 1,480,000              |   |
|---------------------------|--|----------------------------------------|---|------------------------|---|------------------------|---|
| Less valuation allowance  |  | (     788,000 | ) | (  1,080,000 | ) | (  1,480,000 | ) |

----

| Net deferred tax assets |  | $             - |  | $             - |  | $             - |  |
|-------------------------|--|----------------------------------------------------------------------------------|--|----------------------------------------------------------------------------------|--|----------------------------------------------------------------------------------|--|

----

As of February 29, 2004, the Company had net operating loss carryforwards for tax reporting purposes of approximately $2,189,000, which expire beginning in 2004.

----

****HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESNotes to the Consolidated Financial Statements****

**NOTE 4.  Net Income (Loss) Per Share**The following table presents the computation of basic and diluted net income (loss) per share:

----

|  |  | **2004** |  | **2003** |  | **2002** |  |
|--|--|----------|--|----------|--|----------|--|

----

| Net income (loss) available to common stockholders for basic earnings per share | $ | (  34,871 | )      $ | (  67,743 | )      $ | 280,932 |  |
|---------------------------------------------------------------------------------|---|---------------------|----------------------------------------|---------------------|----------------------------------------|---------|--|
| Plus interest on convertible debt                                               |   | -                   |                                        | -                   |                                        | 8,997   |  |

----

| Net income (loss) available to common stockholders for diluted earnings per share | $ | (  34,871 | )     $ | (  67,743 | )     $ | 289,929 |  |
|-----------------------------------------------------------------------------------|---|---------------------|----------------------------------|---------------------|----------------------------------|---------|--|

----

| Reconciliation of shares used in basic and diluted per share calculations:          |  |           |  |           |  |           |  |
|-------------------------------------------------------------------------------------|--|-----------|--|-----------|--|-----------|--|
| Denominator for basic income per share - weighted average common shares outstanding |  | 9,461,217 |  | 9,287,720 |  | 9,273,137 |  |
| Effect of dilutive securities:                                                      |  |           |  |           |  |           |  |
|   Stock options                                                           |  | -         |  | -         |  | -         |  |
|   Warrants                                                                |  | -         |  | -         |  | -         |  |
|   Convertible debt                                                        |  | -         |  | -         |  | -         |  |

----

| Denominator for diluted net income (loss) per share adjusted by weighted average shares and assumed converstions |  | 9,461,217 |  | 9,287,720 |  | 9,273,137 |  |
|------------------------------------------------------------------------------------------------------------------|--|-----------|--|-----------|--|-----------|--|

----

| Basic per share data:         |  |       |  |                    |   |       |  |
|-------------------------------|--|-------|--|--------------------|---|-------|--|
|   Net income (loss) |  | $0.00 |  | $(  0.01 | ) | $0.03 |  |
| Diluted per share data:       |  |       |  |                    |   |       |  |
|   Net income (loss) |  | $0.00 |  | $(  0.01 | ) | $0.03 |  |

**NOTE 5.  Stockholders' EquityPreferred Stock**The Company has authorized Series A, convertible preferred stock.  All preferred shares are non-voting, receive no dividends, and have liquidation preference over the Company's common stock.  All 1,000,000 preferred shares are unissued and are undesignated as of February 29, 2004.**Stock Option Plan**In February 1986, the Company adopted a stock option plan providing for the issuance of up to 1,200,000 shares of common stock to associates, members of the board of directors, and other non-employee agents of the Company.  The exercise price of the options must be at least 100% (110% for stockholders with 10% or more ownership) of the fair market value of the common stock as of the date of grant.  Generally, options are exercisable for a period of ten years (five years for stockholders with 10% or more ownership) commencing on the date of grant.During February 1996, the Company's 1986 stock option plan expired.  No additional stock options can be issued under this plan to associates, members of the board of directors, or other non-employee agents of the Company without stockholder approval of a new stock option plan.During 2002, the Company granted non-qualified options to various employees, directors, and non-employee agents.  No options were granted in 2003 or 2004.**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESNotes to the Consolidated Financial Statements**
**NOTE 5.  Stockholders' Equity (continued)****Stock Option Plan (continued)**Information with respect to options for the Company's common shares is summarized as follows:**Incentive Options****Non-Qualified Options****         Price Per****Stock****Wtd Avg****Stock****Wtd Avg****       Share Range****Options****Exer Price****Options****Exer Price****Balance - February 28, 2001**$0.08$0.9743,500$0.51473,500$0.16Granted0.310.59--22,5000.46Cancelled0.100.97(  43,500)0.51(  186,600)0.20**Balance - February 28, 2002**$0.08$0.97--$--309,300$0.16Cancelled0.080.31--(  75,000)0.17**Balance - February 28, 2003**$0.10$0.97--$--234,300$0.16Cancelled0.100.10--(  60,800)0.10**Balance - February 29, 2004**$0.08$0.97--$--173,500$0.18
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in fiscal 2004, 2003 and 2002:
**2004****2003****2002**Risk-free interest rateN/AN/A5.25%Expected life of optionsN/AN/A2 yearsExpected volatilityN/AN/A30%Expected dividend yieldN/AN/A0%
The Company applied APB No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its plan.  Accordingly, no compensation expense has been recognized for its stock-based compensation plan.  Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's fiscal pro forma net income (loss) and pro forma net income (loss) per share would have been as follows:
**2004****2003****2002**Pro forma net income (loss)$(  34,871)$(  67,743)$277,332Pro forma earnings per share$0.00$(  0.01)$0.03
Pro forma amounts reflect only options granted in 1996 and after.  Therefore, the full impact of calculating compensation cost for stock options under SFAS No. 123 is not reflected in the pro forma net income (loss) amounts presented because compensation cost is reflected over the options' vesting period and compensation cost for options granted prior to March 1, 1995 is not considered.
**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESNotes to the Consolidated Financial Statements**
**NOTE 5.  Stockholders' Equity (continued)****Warrants**Occasionally, the Company granted warrants to officers, employees and non-employees in consideration for loans extended to the Company and for recognition of services performed.**Average Exercise****Shares****  Price Per Share  ****Balance, February 28, 2001**-$     -Granted30,000$0.31**Balance, February 28, 2002**30,000$0.31Expired(  30,000)$0.31**Balance, February 28, 2003**-$     -No activity**Balance, February 29, 2004**-$     -
**NOTE 6.  Supplemental Cash Flow Information**Supplemental schedule of non-cash investing and financing activities:In 2004, the Company entered into a promissory note with the President, Peter J. Zugschwert, in the amount of $20,000, convertible into shares of common stock at $0.04 per share.  This note was converted to 500,000 shares of common stock.In 2003, the Company had no non-cash investing nor financing activities.In 2002, the Company (1) received $265,000, net of fees and expenses, in consideration for the sale of substantially all of its operating assets to an unrelated party effective November 1, 2001 (see Note 11); and (2) issued 25,590 shares of common stock to the Board of Directors in lieu of compensation for services rendered for fiscal years ended February 28, 1998 through February 28, 2002.

**NOTE 7.  Employment Agreement(s)**On February 1, 1991, the Company entered into employment agreements with its then President and Vice President, which provided for their employment for a term of three years with automatic renewal of the term for one year periods thereafter, unless terminated by the Company within the provisions of the agreement, or by the President or Vice President for any reason upon twelve weeks advance notice.  The Company may be required to purchase all of the employees' common shares including unregistered shares, unexercised stock options and warrants at the average fair market value price at the time of the termination.  In December 1997, the Company terminated the employment of its President, and in September 2000, the Company terminated the employment of its Vice President.  During January 2002, the Company paid $40,000 to its prior Vice President as consideration for any amounts due under the employment agreement.

**NOTE 8.  Sale of Pharmaceutical Care Software**The Company developed Pharmaceutical Care software in conjunction with an outside entity.  The Company assigned its rights to the Pharmaceutical Care software during the fiscal year 2001 to that outside entity.  The Company received consideration via extinguishment of amounts owed to this outside entity totaling $27,868 and the right to royalties from future revenues generated by the software licenses.  The Company is entitled to receive royalties at varying rates on gross revenues pertaining to Pharmaceutical Care software through February 2007.
**HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIESNotes to the Consolidated Financial Statements**
**NOTE 9.  Sale of Operating Assets**On October 30, 2001, the Company entered into an Asset Purchase Agreement to sell substantially all of its operating assets to an outside party.  Operating assets sold included fixed assets, customer lists, intellectual property, related tangible and intangible assets, and other assets.The transaction was approved by the Company's stockholders at a Special Meeting of Stockholders on January 16, 2002.  The effective date of the sale was November 1, 2001.The Company received $265,000, net of fees and expenses, in cash in consideration for the sale of substantially all of its operating assets.  The Company recorded a gain of approximately $264,000 from this sale.  With the proceeds from this sale, management reduced its liabilities, including notes and interest payable to the Company's President, that were beyond their maturity dates (see Note 10), as well as some amounts due the prior Vice President, per stipulations of his employment agreement (see Note 7).At February 28, 2002, the Company had recorded an amount in other assets due from the outside party of this transaction, which represented cash collections from receivables not sold under the transaction to the buyer.

**NOTE 10.  Related Party Transactions**On October 9, 2003, Peter J. Zugschwert, President, entered into a promissory note with the Company in the amount of $20,000, convertible into shares of common stock at $0.04 per share.  This note was converted to 500,000 shares of common stock on October 25, 2003.Due to the sale of substantially all of its operating assets in November 2001, the Company completed the following transactions to related parties:In January 2002, the Company made payments to its President for notes payable, and the related interest payable on such notes that had been in default.  The amounts due and paid by the Company for such notes was $117,500.  Amounts due and paid by the Company for interest on those notes was $12,725 (see Note 9).In January 2002, the Company made a payment to its prior Vice President for amounts due for prior expenses, as well as amounts stipulated by his employment agreement.  The total amount paid for all such expenses was $40,000 (see Notes 7 and 9).

**ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE**No changes in or disagreements with accountants, which required reporting on Form 8-K have occurred within the two-year period ended February 29, 2004.  Subsequent to February 29, 2004, the Company filed a Form 8-K on May 14, 2004, reporting a change in the Company's independent auditors.  The Company discontinued its engagement of Schweitzer Karon & Bremer LLC and engaged Mayer Hoffman McCann P.C. as the Company's independent auditors for the fiscal year ended February 29, 2004.  The Members of Schweitzer Karon & Bremer LC became shareholders of Mayer Hoffman McCann P.C.

**ITEM 8a - DISCLOSURE CONTROLS AND PROCEDURES**As of the end of the period covered by this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's CEO, who concluded that the Company's disclosure controls and procedures were effective as of the date of the evaluation.  There were no significant changes in the Company's internal controls during the quarter ended February 29, 2004, that have materially affected, or are reasonably likely to materially affect, the Company's internal controls subsequent to the date the Company carried out its evaluation.Disclosure controls and procedures are controls and other procedures that are designed to provide reasonable assurance that information required to be disclosed in Company reports filed or submitted under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures desinged to provide reasonable assurance that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the CEO as appropriate, to allow timely decisions regarding required disclosure.
**PART III**
**ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS**The following table sets forth information regarding the Company's executive officers and directors as of May 21, 2004:
**Name****Age****Position**Peter J. Zugschwert38President, Chief Executive Officer and DirectorStanford M. Baratz48DirectorJonathan R. Gordon52DirectorMatthew E. Goldberg37DirectorB. Marie Cooper36Principal Accounting Officer and Controller
**Business Experience**Peter J. Zugschwert, age 38, has served as President of the Company since December 1997 and CEO of the Company since September 1997.  Prior to joining the Company, he was the Senior Vice President of Operations for Baratz Financial, Inc. since June 1995.Stanford M. Baratz, age 48, has been the President of Baratz Financial, Inc., a Minneapolis based private investment firm, since founding the company in 1994.  Mr. Baratz has been a Director of the Company since September 1997.Jonathan R. Gordon, age 52, is the President of JR Gordon, Ltd.  Mr. Gordon is a Certified Public Accountant (CPA).  Mr. Gordon has been a Director of the Company since September 1997.Matthew E. Goldberg, age 37, is the President of Stems and Vines, a chain of retail florist shops.  Mr. Goldberg has been a Director of the Company since September 1997.B. Marie Cooper, age 36, joined the Company in April 1998 as its Principal Accounting Officer and Controller.  Prior to joining the Company, Ms. Cooper was the Accounting Manager for Newcom Group, Inc. and its subsidiaries.

**Committees and Meetings of the Board of Directors**The present standing committes and meetings of the Board of Directors are described below.  The Board of Directors does not have a standing nominating committee.The Board of Directors met two times during the last fiscal year.  No incumbent member of the Board of Directors attended fewer than 75% of the total number of meetings held by the Board of Directors and the committee(s) on which he served (during the periods that he served).The Board of Directors has determined that the Company has at least one audit committee financial expert serving on its audit committee.  The Company's audit committee financial expert is Jonathan R. Gordon and is considered independent, as required.

**ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS (continued)**

**Directors' Compensation**Effective October 23, 1997, each member of the Board of Directors receives, in lieu of compensation, 800 shares of the Company's common stock per meeting.  In addition, in consideration for their services, each of the new directors elected at the Annual Meeting of Shareholders on September 19, 1997, were granted a 5-year option to purchase 10,000 shares of the Company's common stock exercisable at a price of $0.08 per share (the price of the Company's common stock on the day of their agreement to serve, if elected).  These shares expired on September 19, 2002.During the fiscal year ended February 28, 2003, Board of Director compensation totaled 0 shares.  Board of Director compensation shares for fiscal years 1999, 2000 and 2001 were issued during the fiscal year ending February 28, 2002.
**COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT**
Section 16(a) of the Exchange Act requires the Company's executive officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (SEC).  The Company is required to disclose whether it has knowledge that any person required to file such a report may have failed to do so in a timely manner.  The Company believes that during fiscal year 2004, all officers, directors and persons owning more than 10 percent of equity securities subject to such reporting obligations have satisfied all Section 16(a) filing requirements.  In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5 and the written representations of our directors and executive officers.

**ITEM 10 - EXECUTIVE COMPENSATION**

**Compensation Summary**The following table summarizes information concerning the compensation awarded, paid to or earned by, the Company's President and Chief Executive Officer.

**SUMMARY COMPENSATION TABLE**
**                                            Long-Term Compensation                            ****                                           Awards                                           ****    Payouts    ****      Name and****************Other Annual****Restricted Stock****Securities Underlying****    LTIP****All Other****Principal Position****Year****Salary ($)****Bonus ($)****     Comp ($)****    Award(s) ($)****    Options/SARs (#)****Payouts ($)**** Comp ($)**Peter J. Zugschwert (1)2004-President and CEO200316,180 11,972  (2)200267,500  (3)
(1) Mr. Zugschwert has been Chairman of the Board of Directors since September 19, 1997.  He has been President and CEO since December 9, 1997.(2) During fiscal year 2003, Mr. Zugschwert was retained as a consultant to act as President of the Company.  Mr. Zugschwert billed the Company $16,180 during fiscal year 2003.  Of this amount, $11,972 was paid by the Company in cash and $4,208 remained due and payable at the end of fiscal year 2004.(3) During fiscal year 2002, Mr. Zugschwert was retained as a consultant to act as President of the Company.  Mr. Zugschwert billed the Company $67,500 during fiscal year 2002.  Of this amount, $67,500 was paid by the Company.

**Stock Options**The following tables set forth information concerning (1) individual grants of options to purchase Company common stock made to the named executive officer(s) during fiscal year 2004, and (2) individual exercises of stock options by the named executive officer(s) during fiscal 2004, as well as the number of options outstanding at the end of fiscal 2003 for the named executive officer(s).(1) During fiscal year 2004, no options/SARs were granted.

(2) **AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR VALUES**
**************Number of Securities Underlying Unexercised**** Value of Unexercised In-the-Money****************         Options/SARs at Final Year-End (#)****Options/SARs at Fiscal Year-End ($)********Shares Acquired****      Value********************Name****  on Exercise (#)****Realized ($)****        Exercisable****        Unexercisable****Exercisable****Unexercisable**Peter J. Zugschwert0      $-50,000-     $-       $-
**ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**The following table sets forth information regarding the beneficial ownership of the outstanding shares of Common Stock by persons known by the Company to beneficially own more than 5 percent of the outstanding shares of Common Stock, by nominees for director and directors of the Company, by the executive officers named in the Summary Compensation Table, and by all directors and executive officers of the Company as a group.  Amounts are as of May 21, 2004 for directors and executive officers.  Amounts for 5 percent stockholders are reported as of the date such stockholders reported such holdings in filings under the Securities Exchange Act of 1934, unless more recent information was provided.
**          COMMON STOCK****        Name of****   Number of Shares****Percent****Beneficial Owner****Beneficially Owned (1)****of Class**Peter J. Zugschwert1,688,249(2)17.3%Stanford M. Baratz249,8002.6%Jonathan R. Gordon68,8000.7%B. Marie Cooper30,000(3)0.3%Matthew E. Goldberg8,8000.1%All Officers and Directors as a Group2,045,649(4)20.9%
(1) Except as otherwise indicated, each person named or included in the group has the sole power to direct the disposition of all shares listed as beneficially owned by him/her.(2) Includes 50,000 shares purchasable upon exercise of options presently exercisable or exercisable within 60 days of May 21, 2004.(3) Includes 25,000 shares purchasable upon exercise of options presently exercisable or exercisable within 60 days of May 21, 2004.(4) Includes 75,000 shares purchasable upon exercise of options presently exercisable or exercisable within 60 days of May 21, 2004.

**ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**Not applicable. 

**ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K**

**Exhibits**

*3(a)    Restated Articles of Incorporation, as amended. (Filed as exhibit 3(a) to registrant's quarterly report on Form 10-Q for the quarter ended November 30,1995).*3(b)   By-laws (Filed as exhibit 3B to the Company's Registration Statement on Form S-18 [Reg. No. 33-9417C] on October 10, 1986).*3(c)    Certificate of Designation of Non-Voting Convertible Preferred Stock, Series A (Filed as exhibit 4(a) to registrant'squarterly report on Form 10-Q for the quarter ended May 31, 1990).*3(d)    Articles of Incorporation of Pharmaceutical Care Outcomes, Inc. (Filed as exhibit 3(a) to registrant's quarterly report on Form 10-Q for the quarter ended August 31, 1994). *3(e)    By-laws of Pharmaceutical Care Outcomes, Inc. (Filed as exhibit 3(b) to registrant's quarterly report on Form 10-Q for the quarter ended August 31, 1994).*3(f)    Restated Articles of Incorporation of HO Management, Inc. (Filed as exhibit 3(b) to registrant's quarterly report onForm 10-Q for the quarter ended November 30, 1995).*3(g)    By-laws of HO Management, Inc. (Filed as exhibit 3(b) to registrant's quarterly report on Form 10-Q for the quarterended August 31, 1995).*4(a)     Note receivable dated February 1, 1995, due from William A. Peter, Jr.*10(a)   Software development, installation and training agreement between OPTION Care, Inc., and Data Med Clinical Support Services, Inc., dated as of February 1, 1994 (Filed as exhibit 10(d) on Form 10-KSB for the year ended February 28, 1994).*10(b)   Consulting agreement between Data Med Clinical Support Services, Inc., and OPTION Care, Inc., dated as of February 15, 1994 for consulting services performed during the period  from July 1, 1993, through December 31,1993 (Filed as exhibit 10(e) on Form 10-KSB for the year ended February 28, 1994).*10(c)   Consulting agreement between Data Med Clinical Support Services, Inc., and OPTION Care, Inc., dated as of November 15, 1993 for consulting services performed during the period from January 1, 1993, through June 30,1993 (Filed as exhibit 10(d) on Form 10-KSB for the year ended February 28, 1994).*10(d)   Asset Purchase Agreement for the purchase of certain assets and the client list of Applied Micro Management, Inc., of Belleville, IL, on August 17, 1993. (Filed by registrant on Form 8-K dated August 30, 1993).*10(e)   Amendment I to software development, installation and training agreement between OPTION Care, Inc. and Data Med Clinical Support Services, Inc., dated as of February 1, 1995.(Filed by registrant on Form 10-KSB for the year ended February 29, 1996).*10(f)   Asset Purchase Agreement for the purchase of certain assets of Edina Pharmacy on July 19, 1996.(Filed as exhibit 10(a) to registrant's quarterly report on Form 10-QSB for the quarter ended November 30, 1996).*10(g)   Transition Agreement between Health Outcomes Management, Inc. and Option Care, Inc. dated as of October 31, 1996, for consulting services and termination of Agreement dated February 1, 1994, as amended by Amendment I effective as of February 1, 1995.(Filed as exhibit 10(b) to registrant's quarterly report on Form 10-QSB for the quarter ended November 30, 1996).*10(h)    Asset Purchase Agreement for the purchase of certain assets of Supplee Enterprises, Inc. on April 1, 1997.*10(i)    Royalty Agreement with The University of Minnesota.

**ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K (continued)**

**Exhibits (continued)**

23     Independent Auditors’ Consent31.1	Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 200231.2	Certification of Principal Accounting Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 200232.1	Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 200232.2	Certification of Principal Accounting Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002*Indicated incorporation by reference

**Reports on Form 8-K**

No reports were filed on Form 8-K during the fourth quarter of the fiscal year ended February 29, 2004.

**ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The firm of Mayer Hoffman McCann P.C. ("MHM") served as the Company's independent auditors for the fiscal year ended February 29, 2004.*Audit Fees:*  The MHM fees for the annual audit and the reviews of the financial statements included in the Company's Form 10-KSB and Forms 10-QSB for the 2004 fiscal year were $4,494 and $1,764, respectively.*Financial Informations Systems Design and Implementation Fees:*  There were no fees billed by MHM for financial information systems design and implementation for the 2004 fiscal year.*All Other Fees:*  were no other fees billed by MHM for the 2004 fiscal year.The Board of Directors has concluded that the services provided by MHM to the Company that were not related to its audit of the Company’s financial statements, if any, were at all times compatible with maintaining that firm’s independence.
**SIGNATURES**
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.**HEALTH OUTCOMES MANAGEMENT, INC.**("Registrant")By:       /s/ Peter J. Zugschwert                     Peter J. Zugschwert           Chairman and President           Chief Executive Officer           /s/ B. Marie Cooper                          B. Marie Cooper           Principal Accounting Officer           /s/ Stanford M. Baratz                          Stanford M. Baratz           Director           /s/ Jonathan R. Gordon                          Jonathan R. Gordon           Director           /s/ Matthew E. Goldberg                          Matthew E. Goldberg           DirectorDate:   May 28, 2004