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

                                   FORM 10-QSB

           Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934


        For the quarterly period ended           December 31, 1999


               Commission file Number                   000-28976


                               Acadia Group, Inc.

           (Exact name of registrant as specified in its charter.)



                 Colorado                              10509781
    (State or other jurisdiction of             (I.R.S. Employer
     incorporation or organization)            Identification No.)

  415 Rodman Road, Auburn , ME   U.S.A.                   04210
(Address of principal executive offices)               (Zip Code)


              Registrant's telephone number, including area code:
                                 (207) 777-3423
                                 (800) 479-3066

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                         YES [x]        NO [  ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date:

Common Stock, $0 Par Value - 11,585,125 shares as of December 31, 1999.

                                        1
<PAGE>






PART I - FINANCIAL INFORMATION

ITEM 1
<TABLE>
<CAPTION>
ACADIA GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

<S> .......................................................................................    <C>            <C>
                                                                                               December 31,   December 31,
                                                                                                 1999         1998
                                                                                              -----------    -----------

Current Assets:
  Cash-Operating ..........................................................................   $   169,494    $     8,071
  Accounts Receivable .....................................................................       488,708        779,943
  Unbilled Work at Estimated
    Realizable Value ......................................................................       405,162        275,811
  Inventories .............................................................................        48,914         41,007
  Other Current Assets ....................................................................       134,582         40,920
                                                                                              -----------    -----------
  Total Current Assets ....................................................................   $ 1,246,860    $ 1,145,752

Prop., Plant & Equip.:
  Cost ....................................................................................     1,464,195        497,775
  Less Accum. Depr ........................................................................      (227,421)      (115,263)
                                                                                              -----------    -----------
                                                                                              $ 1,236,774    $   382,512

Other Assets:
  Other ...................................................................................       739,575          5,960
  Organization Cost .......................................................................             0        127,041
  Less Accum. Amort .......................................................................       (78,273)       (19,816)
  Notes Receivable ........................................................................             0        182,803
                                                                                              -----------    -----------
Total Assets
Subtotal ..................................................................................   $   661,303    $   295,988
TOTAL .....................................................................................   $ 3,144,937    $ 1,824,252
                                                                                              ===========    ===========
Current Liabilities:
  Accounts Payable ........................................................................   $   545,843    $    62,559
  Line of Credit ..........................................................................     1,291,853        476,193
  Accrued Expense .........................................................................       120,371         69,887
  Current Portion of
  Long Term Notes .........................................................................       118,400
                                                                                              -----------    -----------

Total Current Liabilities .................................................................   $ 1,958,067    $   727,039

Long Term Liabilities:
  Long Term Debt ..........................................................................       600,590        343,888
                                                                                              -----------    -----------
Total Liabilities .........................................................................   $ 2,558,657    $ 1,070,927



                                        2
<PAGE>
                                                                                               December 31,   December 31,
                                                                                               1999           1998
                                                                                              -----------    -----------


Stockholders' Equity:
  Common Stock ............................................................................     3,903,394        644,640
  Paid In Capital & Treas .................................................................        41,992         41,993
  Unearned Stock Bonus Compensation .......................................................    (2,155,901)
  Retained Earnings .......................................................................    (1,203,205)        66,692
                                                                                              -----------    -----------
Total Equity ..............................................................................   $   586,280    $   753,325
                                                                                              -----------    -----------
Total Liabilities &
Equity ....................................................................................   $ 3,144,937    $ 1,824,252

<CAPTION>
                                                                                                ===========    ===========
See Accompanying
 Notes to Financial
 Statements

ACADIA GROUP, INC
CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS
ENDED DECEMBER 31, 1999 AND DECEMBER 31, 1998
(Unaudited)
<S> ....................................................................................           <C>            <C>

                                                                                     Three months ended  Three months ended
                                                                                     December 31 1999    December 31 1998
                                                                                           -----------    -----------
Sales ..................................................................................   $   394,694    $   523,107
Operating Expenses .....................................................................   $ 1,155,176    $   511,930
                                                                                           -----------    -----------
Net Operating Income ...................................................................      (760,482)        11,177

Other Income/(Expense), Net ............................................................       (11,000)             0
                                                                                           -----------    -----------
Net Income Before Taxes ................................................................      (749,482)        11,177
(Provision for)
Benefit From  Income Taxes .............................................................       187,500              0
                                                                                           -----------    -----------
Net Income (Loss) ......................................................................   $  (561,982)   $    11,177
                                                                                           ===========    ===========
Net Income Per
Common Share ...........................................................................   $     (.068)   $    (0.003)
Weighted Average Number
of Common Shares
Outstanding ............................................................................     8,251,948      4,004,654
</TABLE>

See Accompanying
Notes to Financial Statements

                                        3
<PAGE>

ACADIA GROUP, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
AND DECEMBER 31, 1998
(Unaudited)
<TABLE>
<S>                                                                                  <C>            <C>
                                                                                     Quarter Ending Quarter Ending
                                                                                      December 31,   December 31,
                                                                                          1999           1998
                                                                                       ---------    ---------
Net Income (Loss) ..................................................................   $(561,982)   $  11,177
Adjustments to reconcile net income
  (loss) to net cash
Depreciation & Amortization ........................................................   $  40,911    $  28,251
Stock issued as compensation .......................................................   $  97,224
 Decrease (increase) in
   Accounts Receivable .............................................................   $ 169,595    $  54,644
   Other Current Assets ............................................................     (45,743)       7,590
   Other Non-current Assets ........................................................    (155,737)    (119,316)
 Increase (decrease) in
   Accounts Payable ................................................................     418,508      (10,074)
   Other Liabilities ...............................................................         875      (56,267)
                                                                                       ---------    ---------
Net Cash (Used for) Provided
  By Operating Activities ..........................................................   $ (36,349)   $(193,283)

Investing Activities
Additions: Property Plant and Equipment ............................................    (694,704)     (33,621)

Financing Activities
Issuance of Common Stock ...........................................................     600,000      232,446

  Net Increase (repayments notes
     and Leases) ...................................................................     281,510
  Other Investment Activities ......................................................      (4,712)
                                                                                       ---------    ---------
Net Cash provided by (used for) ....................................................     881,510      198,825
    Financing activities

Net Increase (Decrease) in .........................................................   $ 150,457    $   5,542
  Cash or Cash Equivalents

Cash & Cash Equivalents:
  Beginning of Period ..............................................................      19,037        2,524
  End of Period ....................................................................   $ 169,494    $   8,071


                                                                                       =========    =========
</TABLE>


See Accompanying
 Notes to Financial
 Statements


                                        4
<PAGE>


                                        ACADIA GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999

Note 1. Summary of Significant Accounting Policies

The accompanying  consolidated financial statements have been prepared by Acadia
Group,  Inc.  ("Acadia" or "the Company") in accordance with Generally  Accepted
Accounting  Principles for interim financial information and Securities Exchange
Commission  instructions  to Form 10QSB and Rule 310 of  Regulation  S-B. In the
opinion  of  management,  the  accompanying  consolidated  financial  statements
contain all adjustments  (consisting of normal recurring  accruals),  considered
necessary for a fair presentation of the Company's financial  position,  results
of operations and cash flows at the dates and for the periods  indicated.  While
the Company  believes  that the  disclosures  presented are adequate to make the
information not misleading,  these consolidated  financial  statements should be
read in conjunction with the audited financial  statements and related notes for
the year ended  September 30, 1999 which are  contained in the Company's  Annual
Report on Form 10-KSB.  The results for the three month period  ending  December
31, 1999 is not  necessarily  indicative  of the results to be expected  for the
full fiscal year.

Note 2.  Pooling-Of-Interests.

     On November 19, 1999,  Acadia (d/b/a Acadia  Business  Group,  Inc.) (f/k/a
Acadia National Health Systems,  Inc.) completed a merger with WorldLecture.com,
Inc. (d/b/a  MedLecture.com),  and Acadia Merger Holding Company,  which changed
its name to Acadia National Health Systems, Inc. The merger was accounted for as
a pooling-of-interests. As a result of the merger, Acadia was formed as a parent
company and established two wholly owned subsidiaries; WorldLecture.com, Inc. an
Internet e-Commerce company and Acadia National Health Systems,  Inc., a medical
billing and management services organization.  Under the reorganization,  Acadia
operates  as  a  venture  capital  incubator  company  to  provide  capital  and
management services to prospective emerging growth entities.
In exchange for one hundred  percent the outstanding  shares of  MedLecture.com,
Inc.,  Acadia issued  5,363,987  shares of common stock. The transaction did not
result in a significant  change to the Company's  financial position and results
of  operations.  Cumulative  losses for  MedLecture.com,  Inc.  of $20,000  were
recorded as a result of the pooling.

WorldLecture.com,  Inc. is a newly formed Internet subsidiary in the business of
delivering  continuing  education  on the  Internet  through  the  use of  video
streaming to  professional  persons who are obligated to maintain  competency in
their  respective  expertise  to  the  satisfaction  of  governmental  or  trade
regulatory agencies. WorldLecture.com, Inc., launched its first web site product
in the medical  education market at the National  Conference of the Alliance for
Continuing  Medical Education on January 19, 2000 in New Orleans under the trade
style of MedLecture.com.

Note 3. Commitments to Management
     As part of the  merger  with  MedLexture.com  , stock was  issued to senior
management to satisfy prior commitments and to retain key senior  executives.  A
non-cash  expense of $97,224 was recorded as part of the  Company's  Stock Bonus
plan.  See  related  note  below,   Stock-based  Compensation  Plans  and  Other
Compensation.

Note 4.  Convertible Debentures

On November 1, 1999, Acadia issued $600,000 convertible  debentures as an equity
raise to  subscription  investors  pursuant to Rule 504 of the Securities Act of
1933,  as  amended  (the  "Act")  which  were  contingent  upon  the  merger  of
MedLecture.com, Inc., a Maine Corporation, with and into WorldLecture.com, Inc.,
a subsidiary  of Acadia  closing on or before  April 1, 2000.  The holder of the
debenture had the privilege to convert the debentures  into common voting shares
of Acadia at a purchase  price of eighty percent (80%) of the offering price for
the shares of Acadia as of October  7, 1999 (i.e.  80% of $.875 = $.70  exercise
price).  Notwithstanding  the  foregoing,  in the event  that the merger was not


                                       5
<PAGE>

consummated  and/or Acadia did not approve the conversion  and/or the conversion
privilege was not exercised on the effective  date of the merger (i.e.  November
19, 1999), the holders  privilege to convert was deemed null and void ab initio.
On November 19, 1999, the merger was consummated, Acadia approved the conversion
and  all  subscription  investors  exercised  their  conversion  privilege  with
Company.  In  connection  with the  conversion of such  debentures,  the Company
issued  857,151  shares of common voting stock.  All shares of stock issued upon
conversion are subject to Rule 144 restrictions.

Note 5.  Future issuance of Common Stock

     The firm has engaged Advest, Inc., an investing bank, as placement agent to
offer a minimum of 1,052,632  shares of Common Stock of the Company to a maximum
of  2,105,263 at $4.75 per share to  prospective  investors  who are  accredited
under  Regulation D of the Securities Act. Common Stock.  The offering is a best
efforts  offering by the placement agent. The use of those funds will be used to
facilitate the business of the Company.

Note 6. Net Income Per Common Share

Computation  of net income per common  share was based on the  weighted  average
number of shares  outstanding  during such periods.  These amounted to 8,251,948
shares for the three months ending  December 31, 1999 and  4,004,654  shares for
the three months ending December 31, 1998.


Note 7. Long Term Debt - Short Term Financing

The total of lines of credit  drawn upon  (outstanding)  as of December 31, 1999
was  $1,250,000  as compared  to $476,193 on a $650,000  demand line limit as of
December 31, 1998.

A total of $16,625 of equipment  was acquired at various times from October 1999
to December 31, 1999 during the under capital leases.  Capital lease obligations
at December 31, 1999 total $151,169.

All other  loans and  repayment  of lines of credit  payable  to Bank and future
borrowings under any such credit facilities have been collateralized by accounts
receivable and equipment of the Company.

Note 8. Majority Stockholders

The  following  table  sets  forth  certain  information   regarding  beneficial
ownership of common stock as of December 31, 1999 (i) all executive officers and
directors,  and (ii) each person known by the Company to own  beneficially  more
than 5% of the  outstanding  common stock.  Each person has sole voting and sole
investment  or  dispositive  power with  respect to the shares  shown  except as
noted.

                                       6
<PAGE>


<TABLE>
<CAPTION>

Name                      Position                               Shares                       % Owned
<S>                       <C>                                    <C>                             <C>
Emile L. Clavet           Chairman of the Board               1,278,326(i)                     11.0%
79 Shepley Street
Auburn, ME 04210

Kevin B. Dean             Director, Executive VP              1,278,326(i)                     11.0%
98 Davis Avenue           Business Development and
Auburn, ME 04210          Treasurer

Douglas Farrago           Director, Member Officer            2,478,080                        21.3%
94 Shepley Street         Executive VP Medical
Auburn, ME 04210           Informatics

Paul W. Chute             Beneficial Owner                    1,081,340                         9.3%
76 N. Withman Road
Buckfield, ME 04220

John W. Holt, Jr.         Chief Executive Officer               190,000                         1.6%
15 Birchwood Road         and President
Cape Elizabeth, ME
04107

John F. Raden             Executive Vice                        216,000                         1.8%
RR 1 Box 2309C            President Mergers
Kingfield, ME 04947       and Acquisitions

Judith M. Brown           Director                               40,000                          .3%
1853 Mar West
Tiburon, CA 94920

John L. Crispin           Director                               68,000                          .5%
3 Pond Ridge Road
Lewiston, ME 04240

Richard H. Hooper         Executive Vice President              178,000                         1.5%
212 Hooper Ledge Road     Internal Affairs
South Paris, ME 04281

Margaret M. Heath         Secretary                             205,493                         1.7%
357 Harris Hill Road
Poland, ME 04274

Jacquelyn J. Magno        Beneficial Owner                      785,350                         6.7%
124 Fairway Drive                                            __________
Auburn, ME 04210                                              7,798,915
<FN>
Includes 142,858 shares of the Company's stock beneficially owned by Diamond Properties, Inc. a Maine
Corporation.  Messrs. Clavet and Dean are officers and controlling shareholders of Diamond Properties, Inc.
</FN>
</TABLE>


                                       7
<PAGE>


Note 9.  Accounts Receivable Financing

The Company  offers  waivered  billing  transaction  processing  services  under
contractual  agreements with healthcare  providers.  The accounts receivable are
collateralized  by the healthcare  provider's  balance due from health insurance
entities.  This service  affords the healthcare  provider  expedited  payment on
their  reimbursement  by  approximately  two  weeks.  The  Company  assumes  the
responsibility for billing and collecting such receivables.


Note 10. Retirement Plan

During 1999 the Company adopted a defined contribution plan under Section 401(k)
of the Internal Revenue Code. The 401(k) savings plan covers  substantially  all
employees who meet certain minimum service and age requirements. Participant may
contribute  up to 15% of their annual  compensation  to the plan,  not to exceed
$7,000. At its discretion, the Company may make matching contributions,  subject
to certain  limitations.  The Company made no contribution for the period ending
December 31, 1999.

Note 11. Stock-based Compensation Plans and Other Compensation

During fiscal year 1999, the Company adopted two stock-based  compensation plans
that were adopted by the Board of Directors on March 5, 1999 and approved by the
stockholders on November 19, 1999. The plan reserves of restricted common voting
stock at no par value are 700,000 Restricted Stock Bonus Plan and 500,000 Simple
Restricted  Stock Option and are available to key employees of the Company under
the Act. The plans are administered by the Audit and  Compensation  Committee of
the Board of Directors.

Prior to the current  fiscal year,  197,000  shares of restricted  common voting
stock of the Stock Bonus Plan had been issued and were fully vested.  During the
first quarter ending December 31, 1999 there were 350,000 shares issued from the
Company's  plan  pursuant to a November  19, 1999 Board of Directors  vote.  The
Company applies APB Opinion 25 and related interpretations in accounting for the
plan. The  stock-based  compensation  is accrued over a two year vesting period,
beginning  upon the date shares are granted.  The Board of Directors may curtail
an employee's vesting period under certain significant circumstances as outlined
in the plan. Stock bonus compensation  charged against income for the period was
$97,224  and  includes  estimates  made my  management  concerning  an  employee
completing the two year vesting period.

No options have been granted as of December 31, 1999 under the Simple Restricted
Stock Option  Plan.  Options  under the plan are  exercisable  in  installments;
however, no options are exercisable within one year or later than ten years from
the date of grant.

Note 12 Severance and Non-compete Agreement

The Company entered into an agreement with an officer and major stockholder upon
termination of the individual's  employment with the Company. The individual has
agreed not to compete with the Company for a term of five years beginning May 1,
1999 and ending April 30,  2004.  In return,  the Company  will  provide  weekly
compensation  and  continuation of certain  benefits through April 30, 2004. The
liability  recorded  represents the present value of the remaining  compensation
discounted at 9.25%, the Company's borrowing rate at September 30, 1999.

                                       8
<PAGE>

ITEM 2.

                            ACADIA GROUP, INC.
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                          RESULTS OF OPERATIONS

                                December 31, 1999

RESULTS OF OPERATIONS:
=====================================
THREE MONTHS ENDING DECEMBER 31, 1999
=====================================

The Company's financial  statements and notes thereto for the current period and
the audited  financial  statements  and notes thereto for the fiscal year ending
September  30,  l999,  should  be read in  conjunction  with  this  Management's
Discussion.

FORWARD-LOOKING INFORMATION

THIS FORM 10QSB AND OTHER STATEMENTS  ISSUED OR MADE FROM TIME TO TIME BY ACADIA
GROUP,  INC. OR ITS  REPRESENTATIVES  CONTAIN  STATEMENTS  WHICH MAY  CONSTITUTE
"FORWARD-LOOKING  STATEMENTS"  WITHIN THE MEANING OF THE  SECURITIES ACT OF 1933
AND THE  SECURITIES  EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE  SECURITIES
LITIGATION REFORM ACT OF 1995. FIFTEEN U.S.C.A.  SECTIONS 77Z-2 AND 78U-5 (SUPP.
1996).  THOSE  STATEMENTS  INCLUDE  STATEMENTS  REGARDING THE INTENT,  BELIEF OR
CURRENT EXPECTATIONS OF ACADIA GROUP, INC. AND MEMBERS OF ITS MANAGEMENT TEAM AS
WELL  AS THE  ASSUMPTIONS  ON  WHICH  SUCH  STATEMENTS  ARE  BASED.  PROSPECTIVE
INVESTORS  ARE  CAUTIONED  THAT  ANY  SUCH  FORWARD-LOOKING  STATEMENTS  ARE NOT
GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND  UNCERTAINTIES,  AND THAT
ACTUAL  RESULTS  MAY  DIFFER   MATERIALLY   FROM  THOSE   CONTEMPLATED  BY  SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER  MATERIALLY  FROM THOSE IN  FORWARD-LOOKING
STATEMENTS  ARE  SET  FORTH  IN  THE  SAFE  HARBOR   COMPLIANCE   STATEMENT  FOR
FORWARD-LOOKING  STATEMENTS  INCLUDED AS EXHIBIT 99.1 TO THIS FORM 10QSB AND ARE
HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES NO OBLIGATION TO
UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS,  THE
OCCURRENCE OF UNANTICIPATED  EVENTS OR CHANGES TO FUTURE OPERATING  RESULTS OVER
TIME.

RISK FACTORS

In addition  to the other  information  contained  in this  report,  individuals
should carefully consider the following risk factors:

1. The Company  believes that its  assumptions  are based upon  reasonable  data
derived from and known about its business and operations. No assurances are made
that  actual  results  of  operations  or the  results of the  Company's  future
activities will not differ materially from its assumptions;

     2.  Additional  risks  factors  such as the  uncertainty  of the  Company's
marketing  activities,  and the results of bringing  additional  aquisitions and
affiliations  into a smooth  operation with Company are unknown;
     3.  Additional  uncertainties  regarding the ability for operating  cash to
meet the current and projected cash flow needs of the organization;

     4.   Readers  are   cautioned   not  to  place  undue   reliance  on  these
forward-looking statements, as they attempt to speak only of activities known or
anticipated as of this date.

     The Company was originally organized in 1972 and re-organized in 1996 under
the  laws of the  State  of  Colorado.  In  November  1999,  the  Company  again
reorganized   to  form  a   venture   capital   corporation.   As  part  of  the
reorganization,  the  Company  formed  two  wholly  owned  subsidiaries,  Acadia
National Health System,  Inc.  (National Health  Systems") and  WorlLecture.com,
Inc.  ("WorldLecture.com")  The Company  transferred its healthcare  billing and
management   services  to  National  Health  Systems  and  operates   e-commerce
initiatives under the subsidiary,  WorldLecture.com.  The parent company, Acadia
Group,  Inc.  ("Acadia")  serves as a management and consulting  resource to its

                                       9
<PAGE>
subsidiaries.  During the last six months  Acadia has  successfully  recruited a
management team with extensive experience in mergers and acquisitions,  finance,
real estate, business strategy and development,  sales - marketing and branding,
health services, human resources, funding, and legal.

     The Company  explores  opportunities  and is sought out by  businesses  for
possible  transactions,  including  but not limited to,  mergers,  acquisitions,
joint ventures, and strategic alliances. The Company intends to grow and develop
National Health Systems and MedLecture.com and position each of them as vehicles
with which the Company may effect future acquisitions and business  development.
WorldLecture.com is a newly formed Internet subsidiary of the Company engaged in
the business of delivering  continuing education on the Internet through the use
of video  streaming  to  professional  persons  who are  obligated  to  maintain
competency  in  their   respective   field  expertise  to  the  satisfaction  of
governmental or trade regulatory agencies.

     WorldLecture.com   developed   and  executed  a  business   model   through
MedLecture.com to facilitate  continuing medical education by physicians through
the Internet using video streaming technology. The model also utilizes exclusive
contracts with content  providers and strategic  alliances with similar  service
providers and businesses in the healthcare  industry.  Management has identified
other professions which also require continuing  education and has initiated the
replication of the MedLecture.com model to develop future Internet sites. Acadia
National  Health has  completed  a systems  conversion  designed  to  facilitate
medical billing and management services. Acadia has spent the last two months of
operation  preparing  for rapid sales growth and  expansion  We have  completely
revised our operating policies,  installed a new financial management system and
recruited experienced, operation and management personnel.

     From October 1999 to December 1999,  Acadia National  Health  developed and
adopted a medical reporting compliance program.  Acadia takes very seriously the
need for correct verification,  reporting and billing of medical services to all
payors.  Education of our  employees  and  providers is constant and critical to
remain  abreast in this very complex and rapidly  changing  medical  billing and
regulated arena.

SALES

     Sales  for the  period  were  $394,694  as  compared  to  $523,107  for the
corresponding period in 1998. The decrease in sales is primarily due to the loss
of two clients with total annual revenues of approximately  of $250,000.  During
December 1999, a management contract was signed with a new client with estimated
annual revenues of $275,000.

OPERATING EXPENSES

     Increases in operating  expenses during the period were  principally due to
increased  costs incurred in servicing the expanded  client base, in addition to
increases in  depreciation,  occupancy and  administrative  costs related to the
acquisition of Northeast Medical Billing.

OPERATING INCOME

NET INCOME

LIQUIDITY AND CAPITAL RESOURCES
     The Company's non-trade accounts receivable  increased due to the growth of
Waiver Foster Home and non-medical  billing programs.  These are clean,  secured
receivables with the majority due from the State of Maine. The Company has begun
discussions  with  financial  institutions  as related to replacing a $1,250,000
line of credit, which expires in April 2000. Notes payable includes a term loan,
which requires monthly installments of $5,200, including interest,  through June
2004. Additionally see Note 5, Future Issuance of Common Stock.

SALES TRENDS



                                       10
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.   Legal Proceedings

No material legal  proceedings to which the Company (or any of its directors and
officers  in their  capacities  as such)  is party or to which  property  of the
Company  is  subject  is pending  and no such  material  proceeding  is known by
management of the Company to be contemplated.

ITEM 2.   Changes in Securities

     On November 1, 1999, Acadia issued $600,000 convertible debentures pursuant
to Rule 504 of the Act which were contingent upon the merger of  MedLecture.com,
Inc., a Maine Corporation, with and into WorldLecture.com, Inc., a subsidiary of
Acadia  Group,  Inc.  closing  on or before  April 1,  2000.  The  holder of the
debenture had the privilege to convert the debentures  into common voting shares
of the  Corporation at a purchase  price of eighty percent  (80%)of the offering
price for the shares of the Corporation as of October 7, 1999 (i.e. 80% of $.875
= $.70 exercise  price).  Notwithstanding  the foregoing,  in the event that the
merger  was not  consummated  and/or  Acadia did not  approve of the  conversion
and/or the  conversion  privilege was not exercised on the effective date of the
merger (i.e.  November 19, 1999),  the holders'  privilege to convert was deemed
null and void ab initio.  On  November  19,  1999,  the merger was  consummated,
Acadia approved the conversion,  and all subscription  investors exercised their
conversion  privilege  with  Company.  In  connection  with  conversion  of such
debentures, the Company issued 857,151 shares of common voting stock. All shares
of stock issued upon conversion are subject to Rule 144 restrictions.

     During the current  period  ending  December  31,  1999 the Company  issued
5,363,987 shares of restricted  common stock at no par value under a exchange of
shares merger dated  November 19, 1999 between  Acadia,  Acadia  Merger  Holding
Company, Inc., in which changed its name to Acadia National Health Systems, Inc.
and   WorldLecture.com,   Inc.  The  shares  were  issued  to   shareholders  of
MedLecture.com,  Inc. and registered  under the Securities  Exchange Act of 1934
and are subject to restrictions as prescribed under Rule 144 of the Act.

ITEM 3.   Defaults Upon Senior Securities

               None

ITEM 4.   Submission of Matters to a Vote of Security Holders

     At an Annual and Special  Meeting of Stockholders of Acadia on November 19,
1999, the Stockholders  approved the following matter:  (i) a change from Acadia
National Health Systems, Inc,. to "Acadia Group, Inc." ("Name Change"); (ii) the
Plan of Merger (the "Merger"),  pursuant to Section  7-111-101 through 7-111-108
of the Colorado Business Corporation Act ("CBCA") and Section 901 & 906 of Title
13-A of the Maine Revised Statutes Annotated,  whereby  MedLecture.com,  Inc., a
Maine  corporation  (hereinafter  referred to as  "Disappearing  Corporation" or
"MED"), merged into WorldLecture.com,  Inc., a wholly-owned subsidiary of Acadia
(hereinafter  referred to as "Surviving  Corporation"  or "WORLD");  and whereby
Acadia  issued  shares  of  its  common  stock,  on a pro  rata  basis,  to  the
shareholders of MED, equal in the number to the number of shares of common stock
outstanding  immediately  prior to the Merger,  plus un-issued shares designated
for use under employment  agreements,  or other similar contractual  agreements,
whether  verbal  or  written,  or  designated  for  issuance  to  the  Company's
employees,  agents, or third parties; (iii) the election of eight (8) members to
the Company's Board of Directors for a three-year  term; (iv) a Simple Incentive
Stock Bonus Plan for  officers,  managers and key  employees;  (iv) a Restricted
Stock Option Plan for employees,  officers,  consultants and directors; (vi) the
Restated and Amended  Articles of Incorporation  and Bylaws  reflecting the Name
Change and eradication of "Shark Repellant" provisions set forth at Article VII;
and (vii) the transfer of assets of Acadia National Health Systems,  Inc., which
are used or useful in the operation of its business management services business
to a wholly-owned subsidiary; to approve of the name change of the subsidiary to
Acadia National Health Systems, Inc..

     Only  stockholders  of record at the close of  business on October 15, 1999
(the "Record Date") were entitled to notice of and to vote at the Meeting.

                                       11
<PAGE>

ITEM 5.   Other Information

     The  Company has  engaged an  investment  banking  firm to  facilitate  the
issuance of equity securities for the use of the continued development of Acadia
National Health System, MedLecture.com, and other prospective opportunities that
the Company is currently evaluating.

ITEM 6.   Exhibits and Reports on Form 8-K
1. Exhibits

3
3(i) Articles of Incorporation.  Incorporated by reference to the Form 8-K filed
by Registrant on December 7, 1999 (Exhibit 1.1) 3(ii) By-laws.  Incorporated  by
reference to the Form 8-K filed by  Registrant on December 7, 1999 (Exhibit 1.2)
4.1 Form of  Convertible  Debenture  dated  November 1, 1999 10.1  Agreement  of
Merger dated November 19, 1999.  Incorporated by reference to the Form 8-K filed
by  Registrant  on December 7, 1999  (Exhibit 2.1) 10.2 Articles of Merger dated
November 19, 1999. Incorporated by reference to the Form 8-K filed by Registrant
on December 7, 1999  (Exhibit  2.2) 27  Financial  Data  Schedule 99 Safe Harbor
under the Private  Securities  Litigation Reform Act of 1995. 2. Reports on Form
8-K.  The  Registrant  filed  electronically  the Forms 8-K listed  below.  Such
filings are incorporated  herein by reference:  a. Form 8-K filed as of December
7, 1999 which attached the following exhibits:  Exhibit 1.1 Restated Articles of
Incorporation of Acadia Group,  Inc. as of November 19, 1999; 1.2 Amended Bylaws
of Acadia  Group,  Inc. as of November 19, 1999;  2.1  Agreement of Merger dated
November 19, 1999;  2.2 Articles of Merger dated  November 19, 1999; 5.1 Opinion
on Legality of Securities  Being Issued to shareholders of  MedLecture.com  10.2
Opinion of Counsel with respect to issuance of 5,363,987  shares of common stock
of Acadia National Health Systems,  Inc. to the  shareholders of  MedLecture.com
99.1 Text of press release dated  November 19, 1999.  99.2 Text of press release
dated November 22, 1999 99.3 Promote  Securities  Litigation  Reform Act of 1995
Safe Harbor Compliance Statement for Forward-Looking Statements.

b. Form 8-K filed as October 20, 1999 which attached the following exhibits:
Exhibit
99.1                       Text of press releases dated October 4, 1999.
99.2                       Text of press releases dated October 4, 1999

                                            ACADIA GROUP, INC.

SIGNATURES

Pursuant  to the  requirement  of the  Securities  Exchange  Act  of  1934,  the
registrant  has duly  cause  this  report  to be  signed  on its  behalf  by the
undersigned thereunto duly authorized.

                    ACADIA GROUP, INC.
                    Registrant

February 19, 2000   /s/ William St. Lawrence

                              William St. Lawrence
                    Filing Agent

February 19, 2000   /s/ John W. Holt, Jr.
                    Chief Executive Officer, President


                                       12
<PAGE>


                  Exhibit 4.1

ACADIA NATIONAL HEALTH SYSTEMS, INC.

Convertible Debenture

THE SECURITIES  REPRESENTED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE
SECURlTIES  ACT OF 1933 (THE "ACT") OR  APPLICABLE  STATE  SECURITIES  LAWS (THE
"STATE  ACTS"),  AND  SHALL  NOT BE SOLD,  PLEDGED,  HYPOTHECATED,  DONATED,  OR
OTHERWISE  TRANSFERRED  (WHETHER OR NOT FOR  CONSIDERATION) BY THE HOLDER EXCEPT
UPON THE ISSUANCE TO THE  CORPORATION  OF A FAVORABLE  OPINION OF ITS COUNSEL OR
SUBMISSION TO THE  CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE  SATISFACTORY TO
COUNSEL FOR THE  CORPORATION,  TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE
IN VIOLATIONON OF THE ACT AND THE STATE ACTS.


ACADIA NATIONAL HEALTH SYSTEMS, INC.
A Colorado Corporation


November 1,1999
NO.__


ACADIA   NATIONAL   HEALTH   SYSTEMS,   INC.,   a  Colorado   corporation   (the
"Corporation"),  is indebted  and,  for value  received,  promises to pay to the
order of------------------------- on ------------ (the "Due Date"), (unless this
Debenture shall have been sooner called for redemption as herein provided), upon
presentation  of this  Debenture,  -----------------------  ($--------.--)  (the
"Principal  Amount") and to pay interest on the Principal  Amount at the rate of
fourteen percent (14%) per annum as provided herein.

The Corporation covenants, promises and agrees as follows:
     1.  Interest.  Interest  shall accrue on the Principal  Amount and shall be
payable on the Due Date except as provided below.

2. Conversion

2.1.  Subject to the provisions  below,  the holder of this Debenture shall have
the right,  at such holder's  option,  to convert all, but not less than all, of
this Debenture into such number of fully paid and nonassessable Common Shares of
the Corporation as shall be provided as follows.

         Provided  the  merger  of  MedLecture.com,  Inc.,  a Maine  corporation
("Disappearing Corporation"), with and into WorldLecture.com, Inc., a subsidiary
of the Corporation (the "Surviving  Corporation"),  as more fully described in a
Binding  Letter  of  Intent  dated   September  29,  1999  by  and  between  the
Disappearing Corporation,  the Surviving Corporation and the Corporation, as the
same may be amended or extended from time to time, receipt of a copy of which is
hereby acknowledged by the holder, is consummated on or before the Due Date, the
holder of this Debenture shall have the privilege to convert this Debenture into
Common Voting shares of the  Corporation  at a purchase  price of eighty percent
(80%) of the  offering  price for the  shares of the  corporation  as of October
7,1999;  provided,  however, that the conversion privilege set forth above shall
only arise in the event that the  Corporation  authorizes  and  approves of such
conversion.  If the  above-described  merger is  consummated,  the conversion is
approved by the Corporation, and if the conversion privilege is exercised by the
holder on the  effective  date of the  merger  between  MedLecture.com,  Inc and
WorldLecture.com,  Inc. (said date being the date that the merger is approved by
both the states of Maine and Colorado),  the principal and all accrued  interest
under the Debenture  shall be used to purchase the  Corporation's  Common Voting
Stock,  and all balances due under this Debenture  shall be deemed to be paid in
full upon the  issuance  to the holder of the  appropriate  denomination  of the
Corporation's Common Voting Stock.  Notwithstanding the foregoing,  in the event
that the merger is not  consummated,  and/or the Corporation does not approve of

                                       13
<PAGE>
the  conversion,  and/or  the  conversion  privilege  is  not  exercised  on the
effective date of the merger between  MedLecture.com,  Inc and WorldLecture.com,
Inc. (said date being the date that the merger is approved by both the states of
Maine and Colorado), the holder's conversion privilege shall be null and void ab
initio,  and the  holder  shall  receive  the  principal  balance  due under the
Debenture, plus all accrued interest, up to the date of payment.

2.2. The holder of this Debenture may exercise the conversion  right provided in
this  Section  2 by giving  written  notice  (the  "Conversion  Notice")  to the
Corporation of the exercise of such right and stating the name or names in which
the stock  certificate  or stock  certificates  for the Common  Shares are to be
issued and the  address  to which  such  certificates  shall be  delivered.  The
Conversion  Notice shall be accompanied  by the Debenture.  The number of Common
Shares that shall be issuable  upon  conversion  of the  Debenture  is set forth
above at Section 2.1 and  determined in  accordance  with Section 3 in effect on
the date the Conversion Notice is given;  provided,  however,  that in the event
that this Debenture shall have been partially  rendered,  Common Shares shall be
issued pro rata, rounded to the nearest whole share.

2.3. Conversion shall be deemed to have been effected on the date the Conversion
Notice is given (the  "Conversion  Date").  Within ten (10)  business days after
receipt of the Conversion  Notice,  the  Corporation  shall issue and deliver by
hand  against a signed  receipt  therefor  or by U.S.  registered  mail,  return
receipt requested,  to the address designated by the holder of this Debenture in
the  Conversion  Notice,  a  stock  certificate  or  stock  certificates  of the
Corporation  representing  the number of Common  Shares to which such  holder is
entitled,  which shall be equivalent to the principal and accrued interest up to
and including the Conversion Date, rounded to the next whole share.

3. Conversion Ratio.

3.1.  On the date  hereof,  the  Conversion  Ratio  shall  be set  forth as more
particularly  described at Section 2.1, provided,  however,  that the Conversion
Ratio  shall be  subject  to  adjustment  in  accordance  with and at the  times
provided in this Section 3.

3.2.  If the  Corporation  shall pay a dividend  in share of its Common  Shares,
subdivide  (split) its outstanding  Common Shares,  combine  (reverse split) its
outstanding Common Shares,  issue by  reclassification  of its Common Shares any
shares or other securities of the  Corporation,  or distribute to holders of its
Common Shares any securities of the Corporation or of another entity, the number
of Common  Shares or other  securities  the holder hereof is entitled to receive
through conversion pursuant to this Debenture immediately prior thereto shall be
adjusted so that the holder shall be entitled to receive upon or  subsequent  to
conversion the number of Common Shares or other securities which he or she would
have been entitled to receive after the happening of any of the events described
above had this Debenture been  converted  immediately  prior to the happening of
such  event,  and the  conversion  price  per  share  shall  be  correspondingly
adjusted;  provided  however,  that no adjustment in the number of shares and/or
the conversion  price shall be required unless such adjustment  would require an
increase or decrease of at least one percent (1%) in such number  and/or  price;
and provided  further,  however,  that any  adjustments  which by reason of this
Section 3.2 are not required to be made shall be carried  forward and taken into
account in any subsequent adjustment An adjustment made pursuant to this Section
3.2 shall become effective  immediately after the record date in the case of the
stock  dividend or other  distribution  and shall become  effective  immediately
after  the  effective  date  in  the  case  of  a  subdivision,  combination  or
reclassification.  If the  Corporation  is  consolidated  or merged with or into
another corporation or if all or substantially all of its assets are conveyed to
another corporation, this Debenture shall thereafter be convertible for the kind
and  number  of  shares  of stock  or  other  securities  or  property,  if any,
receivable  upon such  consolidation,  merger or  conveyance  by a holder of the
number  of  Common  Shares  of the  which  could  have  been  subscribed  on the
conversion of this Debenture immediately prior to such consolidation,  merger or
conveyance;  and, in any such case, appropriate adjustment (as determined by the
Board of Directors)  shall be made in the  application of the provisions  herein
set forth with respect to the rights and  interest:  thereafter of the holder of


                                       14
<PAGE>

this  Debenture  to the end that the  provisions  set  forth  herein  (including
provisions  with  respect to changes in and other  adjustments  of the number of
Common  Shares the holder of this  Debenture is entitled to through  conversion)
shall thereafter be applicable, as nearly as possible, in relation to any Common
Shares or other  securities or other property  thereafter  deliverable  upon the
conversion of this Debenture.

     3.3. Notice of Adjustment.  Whenever the Conversion Ratio shall be adjusted
as provided in Section 3 hereof,  the Corporation  shall prepare and send to the
holder of this Debenture a statement,  signed by the chief financial  officer of
the  Corporation,  showing in detail the facts requiring such adjustment and the
Conversion Ratio that shall be in effect after such adjustment.

3.4. Notice of Adjustment Events:. In the event the Corporation shall propose to
take any action of the types  described  in Section 3 hereof  Corporation  shall
give notice to the holder of this  Debenture,  which  notice  shall  specify the
record date,  if any, with respect to any such action and the date on which such
action is to take place.  Such notice  shall be given on or prior to the earlier
of five (5) business days prior to the record date or the date which such action
shall be taken. Such notice shall also set forth such facts with respect thereto
as shall be  reasonably  necessary to indicate the effect of such action (to the
extent  such effect may be known at the date of such  notice) on the  Conversion
Ratio and the number,  kind or class of shares or other  securities  or property
which shall be deliverable or purchasable  upon the occurrence of such action or
deliverable  upon  conversion  of this  Debenture.  Failure  to give  notice  in
accordance  with this  Section  3.4 shall not render such  action  ultra  vires,
illegal or invalid.



     3.5.  Taxes.  The  Corporation  shall pay all  documentary,  stamp or other
transactional  taxes and  charges  attributable  to the  issuance or delivery of
Common Shares of the Corporation upon conversion;  provided,  however,  that the
Corporation  shall not be  required  to pay any taxes  which may be  payable  in
respect of any transfer  involved in the issuance or delivery of any certificate
for such shares.

     3.6.  Reservation of Shares. The Corporation shall at all times reserve and
keep available,  free from preemptive rights, unissued or treasury Common Shares
sufficient to effect the conversion of this Debenture.

4. Redemption

     4.1.  This  Debenture  is  subject  to  redemption  at  the  option  of the
Corporation  in whole or in part prior to the Due Date at any time and from time
to time without  penalty or premium.  The  Corporation may exercise its right to
redeem  this  Debenture  prior to maturity  by giving  notice  (the  "Redemption
Notice")  thereof to the holder of this  Debenture as it appears on the books of
the Corporation,  which notice shall specify the terms of redemption  (including
the  place at which  the  holder  of the  Debenture  may  obtain  payment),  the
principal amount of the Debenture to be redeemed (the  "Redemption  Amount") and
shall fix a date for redemption (the "Redemption Date"), which date shall not be
less than 30 days nor more than 45 days after the date of the Redemption Notice.

     4.2. On the  Redemption  Date,  the  Corporation  shall pay all accrued and
unpaid  interest on the Debenture up to and including  the  Redemption  Date and
shall pay to the holder hereof a dollar amount equal to the Redemption Amount


     5.1. The entire unpaid and unredeemed  balance of the Principal  Amount and
all Interest  accrued and unpaid on this Debenture shall, at the election of the
holder, be and become  immediately due and payable upon the occurrence of any of
the following events (a "Default Event"):

     (a) The non-payment by the  Corporation  when due of principal and interest
or of any other  payment as provided in this  Debenture  or with  respect to any
other Debenture issued by the Corporation.

     (b) If the Corporation (i) applies for or
consents to the  appointment of, or if there shall be a taking of possession by,
a receiver,  custodian,  trustee or liquidator for the Corporation or any of its
property;  (ii)  becomes  generally  unable to pay its debts as they become due;
(iii)  makes a general  assignment  for the  benefit  of  creditors  or  becomes
insolvent;  (iv)  files or is served  with any  petition  for  relief  under the
Bankruptcy  Code or any similar  federal or state statute,  or (v) defaults with
respect to any evidence of  indebtedness or liability for borrowed money, or any
such indebtedness shall not be paid as and when due and payable.

                                       15
<PAGE>

     (c) Any failure by the  Corporation  to issue and deliver  shares of Common
Stock as provided herein upon conversion of this Debenture.

     5.2. Each right,  power or remedy of the holder hereof upon the  occurrence
of any  Default  Event as provided  for in this  Debenture  or now or  hereafter
existing at law or in equity or by statute  shall be cumulative  and  concurrent
and shall be in addition to every other right,  power or remedy  provided for in
this  Debenture or now or hereafter  existing at law or in equity or by statute,
and the exercise or beginning of the exercise by the holder or transferee hereof
of any one or more of such  rights,  powers or remedies  shall not  preclude the
simultaneous  or later  exercise  by the holder  hereof of any or all such other
rights, powers or remedies.

     6. Fair Market  Value.  The term Fair Market  Value used in this  Debenture
with respect to assets or property received by the Corporation shall be the fair
market value,  regardless of any prior accounting  treatment,  of such assets or
property,  determined  by the  Board  of  Directors  of the  Corporation,  which
determination shall be final,  conclusive and binding. If the Board of Directors
shall be unable to agree as to such fair market  value,  the fair  market  value
shall be determined by the independent  certified public accountant at that time
retained by the Corporation to audit its books and records,  and a determination
by such independent  certified public accountant shall be final,  conclusive and
binding or, if there be none, or if such accountant shall refuse or be unable to
make such a  determination  then the sole issue of fair  market  value  shall be
submitted to and settled by binding  arbitration under and pursuant to the rules
and  regulations of the American  Arbitration  Association,  and the decision or
award of the  arbitrator  or  arbitrators  in such  arbitration  shall be final,
conclusive and binding and a final judgement may be entered thereon by any court
of competent jurisdiction.

     7. Failure to Act and Waiver.  No failure or delay by the holder  hereof to
insist upon the strict  performance of any term of this Debenture or to exercise
any right,  power or remedy consequent upon a default hereunder shall constitute
a waiver of any such term or of any such breach,  or preclude the holder  hereof
from  exercising any such right,  power or remedy at any later time or times. By
accepting payment after the due date of any amount payable under this Debenture;
the  holder  hereof  shall not be deemed  to waive the right  either to  require
payment when due of all other amounts payable under this Debenture or to declare
a default for failure to effect such payment of any such other amount.

The failure of the holder of this  Debenture  to give notice of any failure
or breach of the Corporation  under this Debenture shall not constitute a waiver
of any right or remedy in  respect of such  continuing  failure or breach or any
subsequent failure or breach.

     8. Consent to Jurisdiction. The Corporation hereby agrees and consents that
any action,  suit or proceeding  arising out of this Debenture may be brought in
any  appropriate  court in the  State of  Maine,  including  the  United  States
District  Court  for  the  District  of  Maine,  or in any  other  court  having
jurisdiction  over the subject  matter,  all at the sole  election of the holder
hereof,  and by the issuance and  execution of this  Debenture  the  Corporation
irrevocably consents to the jurisdiction of each such court.

     9.  Transfer.  This  Debenture  shall be  transferred  on the  books of the
Corporation  only by the  registered  holder hereof or by his/her  attorney duly
authorized  in writing or by  delivery  to the  Corporation  of a duly  executed
Assignment  substantially  in  the  form  attached  hereto  as  Exhibit  A.  The
Corporation  shall be entitled to treat any holder of record of the Debenture as
the holder in fact thereof and shall not be bound to recognize  any equitable or
other claim to or interest in this  Debenture  in the name of any other  person,
whether or not it shall have express or other notice thereof,  save as expressly
provided by the Laws of Maine.

     10. Notices.  All notices and communications  under this Debenture shall be
in writing and shall be either  delivered in person or  accompanied  by a signed
receipt  therefor or mailed  first-class  United States  certified mail,  return
receipt  requested,  postage  prepaid,  and  addressed  as  follows:  if to  the
Corporation, to:

Acadia National Health Systems, Inc..
415 Rodman Road
Auburn, Maine 04211

and,  if to the holder of this  Debenture,  to the  address of such holder as it
appears in the books of the  Corporation  Any notice of  communication  shall be
deemed given and received as of the date of such delivery or mailing.

                                       16
<PAGE>

     11.  Governing Law. This  Debenture  shall be governed by and construed and
enforced in accordance with the laws of the State of Maine or, where applicable,
the laws of the United States.

IN WITNESS  WHEREOF,  the  Corporation  has  caused  this  Debenture  to be duly
executed under its corporate seal.

ATTEST:                                     ACADIA NATIONAL HEALTH SYSTEMS, INC.


---------------------------------         By:----------------------------------
MARGARET M. HEATH, Secretary                         JOHN RADEN, President


Exhibit A

ASSIGNMENT
     FOR   VALUE   RECEIVED,   the   undersigned   hereby   assigns   to  .  the
----------------------  - year 14%  Convertible  Debenture  of  ACADIA  NATIONAL
HEALTH  SYSTEMS,  INC.,  NO.-------  and hereby  irrevocably  appoints  American
Securities Transfer,  Inc., Attorney, to transfer said debenture on the books of
the within named  corporation,  with full power of substitution in the premises.
WITNESS my hand and seal this ---------- day of , 19-------.


                                                            -------------------
(SEAL)
                                                            -------------------

(SEAL)
WITNESS:

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

CONVERSION NOTICE

Pursuant to Item 2,  Section 2.2 of the Acadia  National  Health  Systems,  Inc.
Convertible  Debenture dated  --------------,  1999 (the "Debenture") payable to
the  undersigned,  the undersigned  hereby  exercises  his/her  conversion right
effective as of the effective date of the merger of MedLecture.com  LLC with and
into  WorldLecture.com,.Inc.,  provided  that  all  other  preconditions  to the
conversion  as specified in the Debenture  take place.  The  undersigned  hereby
gives written notice to Acadia National Health Systems,  Inc. (the "Company") of
the exercise of the  undersigned's  conversion  right and directs the Company to
issue a Stock Certificate(s) for the Common Shares of the Company as provided in
the above-described Debenture to the undersigned. The Stock Certificate(s) shall
be          delivered          to          the           undersigned          at
--------------------------------------------------------  [fill in address]. The
above-described Debenture is attached to this Conversion Notice.

In Witness  Whereof,  the  undersigned  has  hereunto  set his/her hand and seal
effective this ------ day of ----------------------------, 1999.

                                  ---------------------------------------------
Print Name: -----------------------------


Subscription Agreement

The                                                                 undersigned,
-------------------------------------------------------------------------------
hereby                     subscribes                    to                    a
---------------------------------------------------------------    and    00/100
Dollars  ($--------------),  Fourteen Percent (14%)  Convertible  Debenture from
Acadia  National Health Systems,  Inc., a Colorado  Corporation  with a place of
business in Auburn,  Maine,  its  successors  and assigns  (the  "Company"),  in
accordance  with the terms and  conditions  of the offering  made by the Company
pursuant  to the  exemptions  from  registration  afforded  by  Rule  504 of the
Securities  Act  of  1933  (the  "Act").   This   Subscription   Agreement  (the
"Agreement") may be rejected in whole or in part by the Company. The undersigned
hereby  tenders his or her personal,  certified,  bank  cashier's or treasurer's
-check made payable to the order of Acadia National Health Systems,  Inc. in the
amount of ----------------------------------------------------------------------
and  00/100  Dollars   ($------------------------)  will  be  delivered  to  the


                                       17
<PAGE>

undersigned  promptly  after the successful  completion of the Offering.  A Form
Debenture is attached hereto. To the extent that the attached  Debenture differs
from any  previous  Debenture  disclosed  to the  undersigned,  the  undersigned
acknowledges that the attached  Debenture  supersedes the previous Debenture and
represents  the form of  Debenture  that the  undersigned  will receive from the
Company.

     1.  Purpose of Company.  The purpose of the Company is to provide  practice
management for doctors' offices, foster homes, and hospital-based practices. The
Company also seeks to diversify  its business by having one of its  subsidiaries
merge  with  MedLecture.com,   Inc.,  a  Maine  Corporation,  with  the  Company
subsidiary being the surviving company.

     2.  Representations  and Warranties.  The undersigned hereby represents and
warrants to the Company,  as follows:  (i) The  undersigned  is a United  States
citizen and is at least  twenty-one (21) years of age; (ii) The residence of the
undersigned             is             -----------------------------------------
---------------------------------------------------------,  and the  undersigned
has no present  intention  of  becoming a resident or  domiciliary  of any other
state, country, or jurisdiction; (iii) The undersigned has read and received and
is familiar with the contents of all of the exhibits  attached hereto;  (iv) The
Debenture  will be acquired by the  undersigned  for  investment  only,  for the
undersigned's own account, and not with a view to, or offer for sale or for sale
in connection with the  distribution or transfer  thereof The undersigned has no
contract,  undertaking,  agreement,  or arrangement with any person or entity to
sell,  hypothecate,  pledge,  donate,  or  otherwise  transfer  (with or without
consideration)  to any such  person  or  entity  the  securities  to  which  the
undersigned  hereby  subscribes,  and the  undersigned  has no  present  plan or
intention  to enter  into  any  such  contracts,  undertakings,  agreements,  or
arrangements;  (v) The present  financial  condition of the  undersigned is such
that he or she is under no present or contemplated future need to dispose of any
portion of the securities for which the undersigned hereby subscribes to satisfy
any existing or contemplated undertakings, need, or indebtedness.

     3. Acknowledgment of Certain Facts. The undersigned acknowledges his or her
awareness and understanding of the following: (i) This Agreement may be rejected
in whole or in part by the Company, in its sole and absolute discretion; (ii) No
federal or state agency has made any finding or determination as to the fairness
for public investment, nor any recommendation or endorsement,  of the securities
subscribed for; (iii) All instruments,  documents, records, and books pertaining
to the securities  subscribed for have been made available for inspection by the
undersigned's attorneys and accountants and by the undersigned.

4.  Acknowledgement  of Risks  Attendant  Upon  Investments  of this  Kind,  THE
UNDERSIGNED  ACKNOWLEDGES  THAT  HIS/HER/ITS  INVESTMENT  IN THE  COMPANY  IS AN
INVESTMENT  IN A  BUSINESS  BNDEAVOR  AND IS  SUBJECT  TO THE  GENERAL  RISKS OF
BUSINESS  ENDEAVORS;  THESE RISKS INCLUDE VARIOUS  FACTORS  AFFECTING THE INCOME
PRODUCING  POTENTIAL OF THE ENDEAVOR  INCLUDING  (A) CHANGES IN GENERAL OR LOCAL
ECONOMIC CONDITIONS; (B) OPERATING EXPENSES OF THE BUSINESS; (C) THE POSSIBILITY
OF COMPETITION;  (D) GOVERNMENTAL RULES AND FISCAL POLICIES; AND (E) ACTS OF GOD
AND OTHER  FACTORS  WHICH ARE BEYOND THE  CONTROL OF THE COMPANY AND ITS OWNERS.
THE COST OF OPERATING  THE BUSINESS  COULD IN FUTURE YEARS EXCEED ITS  OPERATING
INCOME.  IN SUCH EVENT,  THE COMPANY  WOULD HAVE TO OBTAIN  ADDITIONAL  FUNDS TO
CONTINUE THE  OPERATION OF THE BUSINESS AND TO PREVENT  DEFAULT IN THE COMPANY'S
OBLIGATIONS TO CREDITORS.

     5. Notice to Purchasers;  Non-Registration  of Securities.  THE UNDERSIGNED
ACKNOWLEDGES  THAT THE SECURITIES WHICH ARE THE SUBJECT OF THIS SUBSCRIPTION ARE
NOT CURRENTLY  REGISTERED,  THAT THE ISSUER HAS NO INTENTION OF REGISTERING THEM
UNDER  FEDERAL  LAW (THE  SECURIES  ACT OF 1933) OR UNDER THE LAW OF ANY  STATE,
INCLUDING BUT NOT LIMITED TO  REGISTERING  THE SAME WITH THE  SUPERINTENDENT  OF
BANKING  PURSUANT TO THE REVISED MAINE SECURITES ACT OF THE STATE OF MAINE,  AND
THAT THIS  TRANSACTION  OFFERS THE  UNDERSIGNED  NO MECHANISM BY WHICH TO COMPEL
THEIR REGISTRATION, THE SECURITIES HAVING BEEN ISSUED PURSUANT TO THE PROVISIONS
OF  CERTAIN  EXEMPTIONS  PROM  FEDERAL  STATUTORY  AND  REGULATORY  REGISTRATION
REQUIREMENTS,  AND FROM THE  STATE OF MAINE  REGISTRATION  REQUIREMENTS  AND THE
REGULATIONS  RELATING  THERETO.  AS SUCH,  THIS SECURITY MAY NOT BE  TRANSFERRED
UNLESS PURSUANT TO REGISTRATION  UNDER STATE OR FEDERAL  SECURITY LAWS OR UNLESS
AN EXEMPTION EXSISTS UNDER SUCH LAWS. THE UNDERSIGNED RECOGNIZES THE SPECULATIVE
ASPECTS AND THE RISKS OF LOSS  ASSOCIATED WITH THIS  INVESTMENT,  AND REPRESENTS


                                       18
<PAGE>

THAT THE  SECURITIES  SUBSCRIBED  FOR HEREIN  CONSTITUTE AN INVESTMENT  WHICH IS
SUITABLE  FOR  AND  CONSISTENT  WITH  HIS/HER/ITS   INVESTMENT   PROGRAM,   THAT
HIS/HER/ITS  FINANCIAL  POSITION  ENABLES  HIMIHER/IT  TO BEAR THE RISKS OF THIS
INVESTMENT,  AND THAT  HIS/HER/ITS  FORESEEABLE  INCOME  IS  SUFFICIENT  TO MEET
HIS/HER/ITS NEEDS RECOGNIZING THE LACK OF LIQUIDITY IN THIS INVESTMENT.

     6. Business Sophistication.  The undersigned hereby warrants and represents
that  he/she/it  has such  knowledge  and  experience  in financial  matters and
business  matters  to be  capable  of  evaluating  the  merits  and  risks of an
investment in the Company.

     7. Company's Reliance. The undersigned  understands the significance to the
Company  of  the  acknowledgments,   representations,   and  warranties  of  the
undersigned in this Agreement,  and the undersigned makes such  acknowledgments,
representations  and  warranties  with the intention  that the Company will rely
upon them.

     8. Representations Survive Issuance. The acknowledgments,  representations,
warranties and agreements in this Agreement  shall remain  operative and in full
force  and  effect  and  shall  survive  the  payment  for and  delivery  of the
securities subscribed for herein.

9. No Public Market for  Securities.  The  undersigned is aware that there is no
public  market for the  securities,  that it may not be  possible  to  liquidate
his/her/its  investment in the Company, and that the undersigned may be required
to bear the financial risks of this investment for an indefinite period of time.

     10.  Opportunity to Pose Questions.  The undersigned  acknowledges that the
Company has made  available to him/her/it an opportunity to ask questions of and
receive  answers from the Company  concerning  the terms and  conditions  of the
offering  and to obtain  additional  information.  11.  Important  Notices.  The
undersigned hereby acknowledges receipt of the following notices:

A. The undersigned is not to construe the contents of this Subscription as legal
or investment  advice.  THE  UNDERSIGNED  SHOULD CONSULT  HIS/HER/ITS  OWN LEGAL
COUNSEL,  ACCOUNTANT,  OR  BUSINESS  ADVISOR  AS TO THE LEGAL,  TAX AND  RELATED
MATTERS  CONCERNING  HIS/HER/ITS  POSSIBLE  INVESTMENT IN THE SECURITIES OFFERED
HEREBY.  THE  DELIVERY  OF THIS  MEMORANDUM  AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION  CONTAINED  HEREIN IS CORRECT AS OF ANY TIME  SUBSEQUENT TO THE DATE
HEREOF.

B. The  undersigned  is free to  request  from the  Company  copies  of any
documents or  instruments  which the  undersigned  deems material to his/her/its
investment decision.

C. The undersigned acknowledges that it is his/her/its responsibility to satisfy
himself/herself/itself  as to the  Federal  (as well as  State  and  local)  tax
consequences of purchasing  securities by obtaining  advice from his/her/its own
tax counsel.

     12.  Governing Law. This  Agreement  shall be subject to and be governed by
the laws of the State of Maine,  and all  questions  and issues  concerning  the
meaning and  intention  of the terms of this  Agreement,  and the  validity  and
performance thereof,  shall be adjusted and resolved in accordance with the laws
of the State of Maine.  All disputes shall be resolved in courts of the State of
Maine and in federal courts located in the State of Maine.

     13.  Amendment.  This  Amendment  may not be and  shall  not be  deemed  or
construed to have been  modified,  amended,  rescinded,  canceled or waived,  in
whole or in part,  except by written  instrument  signed by the  parties  hereto
which expressly refers to this Agreement



                                       19
<PAGE>

     14. Accredited Status.  The undersigned  represents and warrants as follows
[check all applicable entries]:

     (a) The undersigned is an individual with a net worth, or a joint net worth
together with his or her spouse,  in excess of $1,000,000.  (In  calculating net
worth,  you may include equity in personal  property and real estate,  including
your personal residence,  cash,  short-term  investments,  stock and securities.
Equity in personal  property and real estate  should be based on the fair market
value of such property minus debt secured by such property).

     (b) The  undersigned is an individual  with income in excess of $200,000 in
each of the prior two years and reasonably  expects income in excess of $200,000
in the current year.

     (c) The undersigned is an individual who, with his or her spouse, had joint
income  in  excess of  $300,000  in each of the  prior two years and  reasonably
expects joint income in excess of $300,000 in the current year.

     (d)  The  undersigned  is a director or  executive  officer of the
Company.

     15. NASD  Affiliation.  The  undersigned  is not  affiliated or associated,
directly or indirectly,  with a National Association of Securities Dealers, Inc.
('NASD") member firm or person.

     16. Miscellaneous

     (a) Manner in which title is to be held: (check one)
                  ___      Individual Ownership
___      Joint Tenants with Right of Survivorship
___      Tenants in Common
         ___      Other ------------------------------------------------
         (describe)

     (b) The undersigned agrees that the undersigned understands the meaning and
legal consequences of the agreements,  representations and warranties  contained
herein,  agrees  that such  agreements,  representations  and  warranties  shall
survive  and remain in full force and effect  after the  execution  hereof,  and
further  agrees to indemnify  and hold  harmless  the Company,  each current and
future officer, director,  employee, agent, and Manager from and against any and
all  loss,  damage  or  liability  due to,  or  arising  out of, a breach of any
agreement, representation or warranty of the undersigned contained herein.

     (c) The  undersigned  agrees to  furnish to the  Company  or the Agent,  if
applicable, upon request, such additional information as may be deemed necessary
to determine the undersigned's suitability as an investor.

     17. Accuracy. The undersigned hereby affirms,  represents,  and warrants to
the Company and its Officers,  Directors,  employees,  agents, and Managers that
the information contained herein is true, correct, accurate and complete and may
be relied upon for purposes of determining the availability of an exemption from
registration for the offer and sale of the Debentures. Dated this ------- day of
----------, 1999.

Subscriber

         ---------------------------------------------
Print Name: ------------------------------


Acceptance of Subscription

The Company accepts the subscription of the above-named Subscriber.



         Acadia National Health Systems, Inc.



                  By: -----------------------------------------
                      Print Name: ----------------------------
                      Its:----------------------------------------


                                       20
<PAGE>

     Exhibit 99 PRIVATE  SECURITIES  LITIGATION  REFORM ACT OF 1995 SAFE  HARBOR
COMPLIANCE STATEMENT FOR FORWARD LOOKING STATEMENTS

In passing the Private  Securities  Litigation  Reform Act of 1995 (the  "Reform
Act"), 15 U.S.C.A.  Sections 77z 2 and 78u 5 (Supp.  1996),  Congress encouraged
public companies to make "forward looking  statements" by creating a safe harbor
to protect  companies from  securities law liability in connection  with forward
looking  statements.  Acadia Group Inc.  ("Acadia" or the "Company")  intends to
qualify  both its written and oral forward  looking  statements  for  protection
under the Reform Act and any other  similar  safe  harbor  provisions.  "Forward
looking  statements" are defined by the Reform Act.  Generally,  forward looking
statements  include expressed  expectations of future events and the assumptions
on which the expressed  expectations are based.  All forward looking  statements
are  inherently  uncertain  as  they  are  based  on  various  expectations  and
assumptions  concerning future events and they are subject to numerous known and
unknown  risks and  uncertainties  which could cause actual events or results to
differ  materially from those projected.  Due to those  uncertainties and risks,
the investment community is urged not to place undue reliance on written or oral
forward looking  statements of Acadia.  The Company  undertakes no obligation to
update or revise  this Safe Harbor  Compliance  Statement  for  Forward  Looking
Statements  (the "Safe Harbor  Statement")  to reflect future  developments.  In
addition,  Acadia  undertakes no obligation to update or revise forward  looking
statements to reflect  changed  assumptions,  the  occurrence  of  unanticipated
events or changes to future  operating  results over time.  Acadia  provides the
following risk factor  disclosure in connection  with its  continuing  effort to
qualify its  written and oral  forward  looking  statements  for the safe harbor
protection  of the  Reform Act and any other  similar  safe  harbor  provisions.
Important  factors currently known to management that could cause actual results
to differ  materially  from  those in forward  looking  statements  include  the
disclosures  contained  in the  Quarterly  Report on Form  10-QSB to which  this
statement is appended as an exhibit and also include the following:

SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT

Acacia has substantial  indebtedness and, as a result,  significant debt service
obligations.  Acacia's  ability to make  payments on its debt  obligations  will
depend on its future operating performance, which will be affected by prevailing
economic conditions and financial,  business and other factors, certain of which
are  beyond  the  Acacia's   control.   If  Acacia  is  unable  to  service  its
indebtedness,  it will be required to adopt  alternative  strategies,  which may
include  actions  such as  reducing or delaying  capital  expenditures,  selling
assets,  restructuring  or refinancing its  indebtedness  or seeking  additional
equity capital.  There can be no assurance that any of these strategies could be
effected on  satisfactory  terms.  The degree to which the Company is  leveraged
could have  important  consequences,  including:  (i) the  Company's  ability to
obtain  additional  financing  in  the  future  for  working  capital,   capital
expenditures,  acquisitions or other general corporate purposes may be impaired;
(ii) a substantial  portion of the Company's  cash flow from  operations  may be
dedicated to the payment of principal and interest on its indebtedness,  thereby
reducing  the funds  available  to the  Company  for its  operations;  (iii) the
Company's existing indebtedness  contains, and future financings are expected to
contain, financial and other restrictive covenants, including without limitation
those  restricting  the incurrence of additional  indebtedness,  the creation of
liens,  the payment of dividends,  sales of assets,  capital  expenditures,  and
prepayment of indebtedness and those requiring maintenance of minimum net worth,
minimum EBITDA and minimum interest coverage and limiting leverage; (iv) certain
of the Company's  borrowings  are and will  continue to be at variable  rates of
interest  which expose the Company to the risk of  increases in interest  rates;
and (v) the Company may be more leveraged than certain of its competitors, which
may  place the  Company  at a  relative  competitive  disadvantage  and make the
Company  more  vulnerable  to  changes in its  industry  and  changing  economic
conditions.  As a result of the Company's level of  indebtedness,  its financial
capacity to respond to market conditions,  extraordinary capital needs and other
factors may be limited.

                                       21
<PAGE>

ACADIA HAS SIGNIFICANTLY CHANGED ITS BUSINESS MODEL
In  late  1999,   Acadia   formed  a  newly   formed  an   Internet   subsidiary
WorldLecture.com  and transferred its business  management services operation to
another  wholly  owned  subsidiary,   Acadia  National  Health  Systems.  Acadia
implemented  its  change  in  corporate  structure  to  reposition  Acadia as an
incubator  for  entrepreneurs  and  start-up  companies.  Due  to  these  recent
significant  changes,  Acadia is  subject to the risk that  Acadia  will fail to
implement  its business  model and  strategy.  This risk is  heightened  because
Acadia's  WorldLecture.com  subsidiary  is  operating  in the  new  and  rapidly
evolving  e-commerce  market.  Acadia's  historical results of operations do not
reflect our e-commerce  offerings.  Consequently,  Acadia's historical operating
results and pro forma financial information may be an accurate indication of how
Acadia will perform in the future.

LITIGATION AND GOVERNMENT INVESTIGATIONS

Numerous  federal  and state civil and  criminal  laws  govern  medical  billing
activities.  In  general,  these laws  provide  for  various  fines,  penalties,
multiple damages,  assessments and sanctions for violations,  including possible
exclusion from Medicare, Medicaid and certain other federal and state healthcare
programs.  The Company and its clients  from time to time  anticipate  that they
will receive in the future,  official  inquiries  (including  subpoenas,  search
warrants,  as well as informal requests) concerning particular billing practices
related to the Company and its many clients.

EVOLVING INDUSTRY STANDARDS; RAPID TECHNOLOGICAL CHANGES

The market for the purchase of products and services  over the Internet is a new
and emerging market. As an Internet commerce business,  Acadia's future revenues
and profits are substantially  dependent upon the widespread  acceptance and use
of the Internet and other online  services as a medium for commerce by consumers
and sellers.  If acceptance and growth of Internet use does not occur,  Acadia's
business and financial  performance will suffer.  Rapid growth in the use of and
interest in the Internet and other online services is a recent phenomenon.  This
growth may not continue. A sufficiently broad base of consumers may not adopt or
continue to use,  the  Internet as a medium of  commerce.  Demand for and market
acceptance  of recently  introduced  products and services over the Internet are
subject to a high level of  uncertainty,  and there are few proven  products and
services. For Acadia's  WorldLecture.com to grow, professionals who historically
satisfied their continuing  education  requirements  through  traditional means,
such as attending  classroom lectures or conferences,  must embrace the delivery
of such services via the Internet.

The  Internet  has  experienced,  and is expected  to  continue  to  experience,
significant  growth  in the  number of users and  amount  of  traffic.  Acadia's
success  will depend upon the  development  and  maintenance  of the  Internet's
infrastructure to cope with this increased traffic. This will require a reliable
network backbone with the necessary speed,  data capacity and security,  and the
timely  development of complementary  products,  such as high-speed  modems, for
providing reliable Internet access and services.  The Internet has experienced a
variety of outages  and other  delays as a result of damage to  portions  of its
infrastructure and could face such outages and delays in the future. Outages and
delays are likely to affect the level of Internet  usage  generally,  as well as
our ability to provide services to Acadia's WorldLecture.com and Acadia National
Health Systems customers. In addition, the Internet could lose its viability due
to delays in the  development  or adoption of new standards to handle  increased
levels of activity or due to increased  government  regulation.  The adoption of
new standards or government  regulation  may,  however,  require Acadia to incur
substantial compliance costs.

The success of Acadia's subsidiary Acadia National Health Systems will depend in
part upon  Acadia  National  Health  Systems'  continued  ability to enhance its
existing  products and services,  to introduce new products and services quickly
and  cost  effectively  to meet  evolving  customer  needs,  to  achieve  market
acceptance  for new  product and  service  offerings  and to respond to emerging
industry standards and other  technological  changes.  There can be no assurance
that Acadia,  through Acadia National  Health  Systems,  will be able to respond
effectively to technological changes or new industry standards.  Moreover, there
can be no  assurance  that  competitors  of Acadia will not develop  competitive
products,  or that any such competitive products will not have an adverse effect
upon Acadia's operating results. Acadia National Health Systems' intends further
to refine,  enhance and develop  certain of its  existing  software  and billing
systems and to change all of the its billing and accounts receivable  management
services  operations over to its most proven software  systems and technology to
reduce  the number of  systems  and  technologies  that must be  maintained  and


                                       22
<PAGE>

supported.   Moreover,   management  intends  to  continue  to  implement  "best
practices" and other  established  process  improvements in its operations going
forward.  There can be no assurance that Acadia  National Health Systems will be
successful  in  refining,  enhancing  and  developing  its  software and billing
systems going forward,  that the costs  associated with refining,  enhancing and
developing such software and systems will not increase  significantly  in future
periods,  that Acadia  National  Health  Systems  will be able  successfully  to
migrate  Acadia  National  Health  Systems'  billing  and  accounts   receivable
management   services  operations  to  its  most  proven  software  systems  and
technology or that its existing software and technology will not become obsolete
as a result of ongoing technological developments in the marketplace.

YEAR 2000

It is possible that the Company's currently installed computer systems, software
products or other business systems, or those of the Company's customers, vendors
or resellers,  working  either alone or in  conjunction  with other  software or
systems,  will not accept input of, store,  manipulate  and output dates for the
year 2000 or thereafter  without error or  interruption  (commonly  known as the
"Year  2000"  problem).  The  Company  has  conducted  a review of its  business
systems, including its computer systems, and is querying its customers,  vendors
and resellers as to their progress in identifying  and addressing  problems that
their computer systems may face in correctly  interrelating  and processing date
information as the year 2000 approaches and is reached.  Through its review, the
Company has  identified a number of older legacy  systems that will be abandoned
in favor of a limited number of more efficient  processing systems,  rather than
make all the systems Year 2000 compatible. Customers, vendors and resellers have
been identified and requests for information distributed regarding the Year 2000
readiness of such parties. The estimated cost of the Company's Year 2000 efforts
is $25,000 to  $30,000  over 1998 and 1999,  the  majority  of which  represents
redirection of internal resources.  However,  there can be no assurance that the
Company  will  identify all such Year 2000  problems in its computer  systems or
those of its customers,  vendors or resellers in advance of their  occurrence or
that the  Company  will be able to  successfully  remedy any  problems  that are
discovered.  The expenses of the Company's  efforts to identify and address such
problems, or the expenses or liabilities to which the Company may become subject
as a result  of such  problems,  could  have a  material  adverse  effect on the
Company's business,  financial condition and results of operations.  The revenue
stream and financial  stability of existing  customers may be adversely impacted
by Year 2000 problems,  which could cause fluctuations in the Company's revenue.
In addition,  failure of the Company to identify  and remedy Year 2000  problems
could put the Company at a competitive  disadvantage  relative to companies that
have corrected such problems.


COMPETITION; INDUSTRY AND MARKET CHANGES

The business of providing  billing and  management  services to  physicians  and
hospitals is highly  competitive.  Acadia  competes  with  certain  national and
regional  physician  and  hospital   reimbursement   organizations  and  billing
businesses (including local independent  operating companies),  certain national
information and data processing  organizations  and certain physician groups and
hospitals  that  provide  their  own  business  management  services.  Potential
industry and market changes that could  adversely  affect the billing aspects of
Acadia's  business include (i) a significant  increase in managed care providers
relative to conventional  fee for service  providers,  potentially  resulting in
substantial  changes in the  medical  reimbursement  process,  or the  Company's
failure to respond to such  changes and (ii) new  alliances  between  healthcare
providers and third party payors in which  healthcare  providers are employed by
such third  party  payors.  The  business  of  providing  application  software,
information  technology and consulting  services is also highly  competitive and
Acadia  faces  competition  from  certain  national  and  regional  companies in
connection with its technology operations.  Certain of Acadia's competitors have
longer  operating  histories  and greater  financial,  technical  and  marketing
resources than Acadia.  There can be no assurance that  competition from current
or future  competitors will not have a material adverse effect upon Acadia.  The
Company's  business  is affected  by,  among  other  things,  trends in the U.S.
healthcare  industry.  As healthcare  expenditures have grown as a percentage of
the U.S. Gross National Product,  public and private healthcare cost containment
measures  have  applied  pressure  to  the  margins  of  healthcare   providers.


                                       23
<PAGE>

Historically,  some  healthcare  payors  have  paid the  prices  established  by
providers while other healthcare payors, notably government agencies and managed
care companies,  have paid less than established prices (in many cases less than
the average cost of providing the services). As a consequence, prices charged to
healthcare  payors willing to pay established  prices have increased in order to
recover the cost of services purchased by government agencies and others but not
paid for by them (i.e.,  "cost  shifting").  The  increasing  complexity  in the
reimbursement  system  and  assumption  of  greater  payment  responsibility  by
individuals have caused  healthcare  providers to experience  increase  accounts
receivable  and bad debt levels and higher  business  office  costs.  Healthcare
providers  historically  have  addressed  these  pressures on  profitability  by
increasing their prices, by relying on demographic  changes to support increases
in the  volume  and  intensity  of  medical  procedures  and by  cost  shifting.
Notwithstanding the providers' responses to these pressures, management believes
that the revenue  growth rate  experienced  by certain of the Company's  clients
continues to be adversely  affected by increased managed care and other industry
factors affecting  healthcare  providers in the United States. At the same time,
the process of submitting  healthcare  claims for  reimbursement  to third party
payors in accordance with applicable industry and regulatory standards continues
to grow in complexity and to become more costly.  Management believes that these
trends  have  adversely  affected  and could  continue to  adversely  affect the
revenues and profit margins of the Company's operations.

GOVERNMENTAL INVESTIGATORY RESOURCES AND HEALTHCARE REFORM

The federal  government  in recent  years has placed  increased  scrutiny on the
billing practices of healthcare providers and related entities, and particularly
on possibly fraudulent billing practices.  This heightened scrutiny has resulted
in a number of high  profile  civil and  criminal  investigations,  lawsuits and
settlements.  In 1996,  Congress  enacted the Health  Insurance  Portability and
Accounting Act of 1996, Pub. L. No. 104 191, 1996  U.S.C.C.A.N.  (110 Sat. 1936)
(codified in scattered sections of the United States Code,  including 18, 26, 29
and 42 U.S.C.),  which includes an expansion of provisions relating to fraud and
abuse,  creates  additional  criminal  offenses  relating to healthcare  benefit
programs,  provides for forfeitures and asset freezing orders in connection with
such  healthcare  offenses  and  contains  provisions  for  instituting  greater
coordination  of  federal,  state and local  enforcement  agency  resources  and
actions.  In recent  years,  the  focus of  healthcare  legislation  has been on
budgetary  and related  funding  mechanism  issues.  Both the  Congress  and the
Clinton  Administration  have made  proposals  to reduce the rate of increase in
projected  Medicare and Medicaid  expenditures and to change funding  mechanisms
and other aspects of both programs.  In late 1995,  Congress passed  legislation
that would substantially reduce projected  expenditure  increases and would make
significant changes in the Medicare and Medicaid programs. Acadia cannot predict
the effect of pending  legislation,  if adopted, on its operations.  A number of
states in which Acadia has operations either have adopted or are considering the
adoption of  healthcare  reform  proposals  at the state  level.  Acadia  cannot
predict the effect of proposed state  healthcare  reform laws on its operations.
Additionally,  certain reforms are occurring in the healthcare market, including
certain  employer  initiatives  such as  creating  purchasing  cooperatives  and
contracting for healthcare services for employees through managed care companies
(including health maintenance  organizations),  and certain provider initiatives
such as risk sharing  among  healthcare  providers  and managed  care  companies
through capitated  contracts and integration among hospitals and physicians into
comprehensive delivery systems. Consolidation of management and billing services
through  integrated  delivery  systems  may result in a  decrease  in demand for
Acadia  National  Health  Systems  billing  services  for  particular  physician
practices.

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EXISTING GOVERNMENT REGULATION

Existing  government  regulation  can adversely  affect the business of Acadia's
subsidy  through,  among other  things,  its  potential  to reduce the amount of
reimbursement received by Acadia National Health System's clients for healthcare
services.  Acadia's  medical  billing  activities  are also governed by numerous
federal and state civil and criminal  laws.  In general,  these laws provide for
various  fines,  penalties,  multiple  damages,  assessments  and  sanctions for
violations,  including  possible  exclusion from Medicare,  Medicaid and certain
other federal and state healthcare  programs.  Submission of claims for services
or procedures that are not provided as claimed,  or which otherwise  violate the
regulations, may lead to civil monetary penalties,  criminal fines, imprisonment
and/or exclusion from  participation  in Medicare,  Medicaid and other federally
funded healthcare programs.  Specifically, the Federal False Claims Act allows a
private person to bring suit alleging  false or fraudulent  Medicare or Medicaid
claims or other  violations  of the  statute and for such person to share in any
amounts  paid to the  government  in  damages  and civil  penalties.  Successful
plaintiffs  can receive up to 25 30% of the total  recovery from the  defendant.
Such qui tam actions or "whistle blower"  lawsuits have increased  significantly
in recent  years and have  increased  the risk  that a  company  engaged  in the
healthcare  industry,  such as Acadia and many of its customers,  may become the
subject of a federal or state  investigation,  may  ultimately  be  required  to
defend a false claims action,  may be subjected to government  investigation and
possible  criminal fines, may be sued by private payors and may be excluded from
Medicare, Medicaid and/or other federally funded healthcare programs as a result
of such an action.  Some  state  laws also  provide  for false  claims  actions,
including  actions  initiated by a qui tam  plaintiff.  Any such  proceeding  or
investigation  could have a material adverse effect upon the Company.  There can
be no assurance  that current or future  government  regulations  or  healthcare
reform measures will not have a material adverse effect upon Acadia's business.

VOLATILITY OF STOCK PRICE

Acadia believes factors such as the Company's liquidity and financial resources,
the general  volatility of Internet related stocks,  healthcare  reform measures
and quarter to quarter and year to year  variations  in financial  results could
cause the market price of Acadia  Common Stock to fluctuate  substantially.  Any
adverse announcement with respect to such matters or any shortfall in revenue or
earnings from levels expected by Management could have an immediate and material
adverse  effect on the trading price of Acadia Common Stock in any given period.
As a result, the market for Acadia Common Stock may experience  material adverse
price and volume fluctuations and an investment in the Company's Common Stock is
not suitable  for any  investor  who is unwilling to assume the risk  associated
with any such price and volume fluctuations.


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