GOHEALTH MD INC, 10KSB, 2000-03-30

GOHEALTH MD INC
10KSB, 2000-03-30
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. [FEE REQUIRED]
For the transition period from to

Commission File Number: 0-10201

GOHEALTH.MD, INC.
(Exact name of small business issuer as specified in its charter)

NUGGET EXPLORATION, INC.
(Former name of small business issuer)

NEVADA 83-0250943
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)

2051 Springdale Road, Cherry Hill, NJ 08003
(Address of principal executive offices and zip code)
Telephone: (800)204-1902
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
(Title of class)

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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. _

Issuer's revenues for its most recent fiscal year were $1,380.

The aggregate market value of voting stock held by non-affiliates of the small
business issuer, computed by reference to the price at which the common stock
was sold, or the average bid and asked price of the common stock on March 24,
2000 was $2,863,997.

At March 28, 2000 there were 4,239,603 shares of the Registrant's Common Stock
outstanding.

<PAGE>

PART I

Item 1. DESCRIPTION OF BUSINESS

Background

We were incorporated in the state of Nevada on July 24, 1980 under the
name Western Exploration and Mining Company. On February 5, 1981, we changed
our name to Nugget Exploration, Inc. On November 10, 1999, our wholly owned
subsidiary, Nugget Holding Company, merged into GoHealth.MD Inc., a Delaware
corporation, a development stage company (the"Merger"). Prior to the Merger, we
were looking to consummate a business combination with a company which had
operations. As a result of the Merger, GoHealth.MD Inc., the Delaware
corporation, became our wholly owned subsidiary, and the shareholders of the
Delaware corporation received 81% of our outstanding common stock. For
accounting purposes, the Merger was treated as GoHealth.MD Inc., the Delaware
corporation, acquiring Nugget Exploration, Inc. We subsequently changed our
accounting year to the calendar year from a May 31st fiscal year. On January
19, 2000, we changed our name to GoHealth.MD, Inc.

Nature of Business

For the year ended December 31, 1999, we did not conduct any significant
business. Because of this lack of prior operations, assets and industry
position, we must be considered a development stage company. Consequently,
there can be no assurance that viable commercial operations can be achieved or
sustained even if we are successful in raising all the capital we require.

Our principal business is operating Healthmall.com, an Internet-based
consumer healthcare network consisting of a consumer-focused interactive
website and affiliate relationships with certain other websites. In November
1999, we changed the principal focus of our business strategy from registration
and marketing of .MD domain names to operating healthcare websites. We intend
to derive revenues by providing advertising on our website and through
affiliations with other entities.

Our website, www.Healthmall.com, which we launched in November 1999,
currently has a focus on alternative healthcare with the following components:

- - - healthcare content on a wide variety of subjects, including information on
acute ailments, chronic illnesses, nutrition, fitness and wellness, as well as
alternative healthcare;

- - - access to healthcare practitioner databases including chiropractors, massage
therapists, naturopathic physicians, and medical physicians;

- - - an interactive chat room; and

- - - tools that permit users to personalize their on-line experience.

Our overall plan calls for the development of network affiliates, such as
health and fitness websites, to provide easy access to the information and
services we offer on www.Healthmall.com to their respective customers. We have
only established two network affiliates to date. We believe that we will
benefit from these affiliate relationships through:

- - - broader exposure of our brand;

- - - higher volumes of traffic being driven to www.Healthmall.com; and

- - - revenues derived from distribution of our websites' content.

We also provide Internet related services directed to healthcare
practitioners. To date these services have focused on chiropractors, massage
therapists and naturopathic physicians. These services include the following:

- - - developing websites;

- - - providing a directory of healthcare practitioners on our Healthmall.com
website; and

- - - registering of .MD domain names.

Developments

Prior to the Merger, GoHealth.MD Inc., the Delaware corporation, acquired
the following assets, which are an important part of our business.

- - -Healthmall.com Domain Name. This domain name was purchased on April 26, 1999
from Moiz Balkhi, trading as Computerized Professional Enrichment Services, for
$5,500 and the issuance of 2,000 shares of common stock and warrants to
purchase 2,000 shares of common stock for $2.50 per share until September 30,
2003.

- - -Hlthmall.com Domain Name and Website. This domain name and associated website
was purchased on April 26, 1999 from Robert H. Savar for $20,000 and the
issuance of 2,000 shares of common stock and warrants to purchase 2,000 shares
of common stock for $2.50 per share until September 30, 2003. As part of the
agreement with Mr. Savar, we have agreed to use his company, World Wide Web
Communications, Inc., as the host for our Healthmall.com website.

On December 13, 1999, we entered into an agreement with Dr. James Corea,
trading as James Corea's Vitalabs, under which we purchased the following
rights into perpetuity for $25,000:

- - - to operate, manage and host Dr. Corea's www.Healthyfirst.com website;

- - - to design or redesign the website;

- - - to add additional content to the website;

- - - to establish hyperlinks to the website;

- - - to solicit and sell advertising on the website and advertise and market the
website on search engine.

Under the agreement, we are to receive 50% of the gross profits after expenses
generated from the Healthyfirst.com website.

On November 16, 1999, we entered into a management consulting agreement
with MCOM Management Corp., ("MCOM") under with MCOM agreed to conduct
marketing research in the Internet health industry and perform other services.
We agreed to pay MCOM $5,000 per month through October 2000 and we issued to
MCOM 300,000 shares of our common stock and a warrant to purchase 500,000
shares of our common stock through December 31, 2001. The first 100,000 shares
exercisable under the warrant are exercisable at $1.00 per share and the
remaining 400,000 shares are exercisable at $2.00 per share. As of December
31, 1999, MCOM exercised warrants to purchase 50,000 shares for $50,000.

On January 20, 2000, we acquired all the right, title and interest to the
Healthsites.com domain name. On March 23, 2000, we introduced a new Internet
search engine service using the domain name, which assists both consumers
seeking to quickly access specific healthcare information and advertisers
seeking to increase traffic to their website as well as their visibility and
traffic to consumers. Although we have not generated any revenues to date from
this website, our search service is designed to generate revenue based on the
number of consumer click-throughs resulting from an advertiser's listing on our
Healthsites.com(TM) website.

Industry Overview

The Internet has become an important alternative to traditional media,
enabling millions of consumers to seek information, communicate with one
another and execute commercial transactions electronically. The number of
worldwide web users is expected to grow significantly in the future.

The Internet is distinct from traditional media in that it offers
real-time access to dynamic and interactive content and instantaneous
communication among users. These characteristics, combined with the fast growth
of Internet users and usage, have created a powerful, rapidly expanding direct
marketing and sales channel. Advertisers can target very specific demographic
groups, measure the effectiveness of advertising campaigns and revise them in
response to real-time feedback. We believe that all participants in the
healthcare industry will benefit from the Internet because of its unique
attributes as an open, low-cost and flexible technology for the exchange of
information and execution of electronic transactions.

Portals, such as AOL, Excite, the Go Network, Lycos, MSN and Yahoo!, have
established themselves as leading pathways for a broad variety of information.
Users are augmenting these portals with subject-specific vertical portals,
which are becoming one of the fastest growing segments of the Internet. These
vertical portals are using brand awareness driven by high quality topical
content and significant market resources to establish themselves as
destinations for highly concentrated groups of users.

In addition, on-line communities have emerged that allow users with
similar interests to engage in interactive activities. Until recently, use of
the Internet consisted mainly of users seeking one-way, static information on
topics of interest to them. Technologies have recently been developed which
allow users greater flexibility to create and personalize content, communicate
with users having similar interests and engage in other interactive activities.
We believe that on-line communities are particularly relevant to users
interested in healthcare issues, since medical information is often complex and
users value communication with peers who face, or have faced, the same health
conditions, leveraging the aggregated community to benefit each member.

Healthcare is large segment of the U.S. economy, and we believe health
and medical information is one of the fastest growing areas of interest on the
Internet. We believe that companies that establish a clear brand identity as a
trusted source of on-line consumer healthcare information and services will
have a significant opportunity to capitalize on multiple revenue sources,
including direct-to-consumer advertising and e-commerce.

Business Strategy

Our primary objectives are to establish Healthmall.com as a trusted and
comprehensive source of consumer healthcare information and services on the
Internet and to establish our new Healthsites.com search engine as a
comprehensive search engine for healthcare. Our secondary objective is to
provide various healthcare practitioner services over the Internet. Our
business strategy incorporates the following key elements:

Establish the Healthmall.com Brand. To create a strong brand by empowering
individuals to better manage their personal health. We also intend to enhance
our brand through the establishment of associations with notable leaders in the
consumer healthcare field, such as radio personality Dr. James Corea. We are
currently engaged in a campaign to increase awareness of the Healthmall.com.
brand among consumers, healthcare professionals, and other websites. We intend
to allocate significant resources to further develop and build brand
recognition through on-line advertising, general advertising, strategic
alliances and other marketing initiatives.

Provide Consumers with Healthcare Content of High Quality. On our
Healthmall.com website, we currently provide our users with high quality
healthcare content, including information on acute ailments, chronic illnesses,
nutrition, fitness and wellness, and access to medical databases, publications,
and real-time medical news.

Syndicate Content Through Affiliates to Promote Traffic Growth. We have
entered into an agreement with Dr. James Corea to operate and provide content
to the website Healthyfirst.com. We are also negotiating a nonexclusive
agreement with Pharmor Corporation, a leading pharmacy chain, to use
Healthmall.com as a source for consumer healthcare content on their website
www.pharmor.com. We plan to expand our network by continuing to establish
relationships with affiliates that have the ability to direct additional users
to our website.

Provide Consumers with Unique Features and Tools. Our Healthmall.com
website is designed to provide easy access to innovative features and tools. We
intend to continue to add useful tools to enable our users to personalize their
on-line experience. We believe that our tools and features will continue to
encourage users to visit our website frequently and increase the likelihood of
users selecting Healthmall.com. as their preferred website for health-related
issues.

Provide an Attractive Advertising Site. We believe our ability to target
specific users, the interactive nature of our website and the demographic
characteristics of our users will be attractive to pharmaceutical, healthcare
and other companies that advertise on the Internet. By identifying users
interested in a particular health-related topic or who desire to address a
particular health condition, we believe we can deliver advertising in a highly
targeted manner, thereby commanding higher advertising rates.

Healthmall.com

Healthcare Information.

Our goal is to provide consumer-focused healthcare information for the
health-conscious public, individuals with a health condition, and individuals
who have recovered from illness or injury, all at a level the average consumer
can understand. Our current focus is on alternative healthcare. We currently
provide a variety of healthcare content, including information on acute
ailments, chronic illnesses, nutrition, fitness and wellness, as well as
alternative healthcare, and access to medical databases, other publications,
and real-time medical news. To encourage interactivity, we provide links to
relevant communities and other features from each content page. Examples of
healthcare information that we currently provide include:

Information Sources
----------- --------

- - - Physician-authored articles on common Produced in house
medical conditions

- - - Updated health-related news and PRNewswire
editorials on topics of current interest

- - - Medline medical article search National Library of Medicine

- - - Information regarding the interaction Facts and Comparisons
among various drugs and other substances

- - - Information on pharmaceuticals and Facts and Comparisons
over-the-counter drugs

PR Newswire. We have a nonexclusive contract with PRNewswire under which
we are provided healthcare and pharmaceutical new releases free of charge in
exchange for having PRNewswire as the exclusive corporate newswire on our
website for a period of one year.

National Library of Medicine. We obtain public information from the
National Library of Medicine free of charge and co-branded it on
Healthmall.com.

Facts and Comparisons. We are provided content based on a deposit which we
have paid for a contract. We are currently negotiating a nonexclusive one-year
renewable contract. We do not believe that Fact and Comparison has contracted
with other websites, however, it may do so in the future.

We expect that competitive factors will create a continuing need for us to
improve and add to our healthcare content. Accordingly, we intend to seek
additional sources of healthcare information and expand the breadth of our
content offerings. We cannot provide assurances that we will be able to
maintain relationships with third parties that supply us with content. If we
lose a provider of content and are not able to replace them our Healthmall.com
website will be adversely affected.

Tools.

We currently provide several interactive tools and intend on developing
other tools. We believe our tools and features will enable us to obtain and
retain users. To enhance the experience of our current and future users, we
intend to develop additional tools and features. Examples of tools that we have
already developed include:

Drug Herb Interaction Guide. Our drug herb interaction guide, allows users
to quickly and easily search for potential interactions of prescription and
over-the-counter drugs with herbal remedies and vitamins.

Check Your Medication. This tool enables the user to search for
prescription drugs by brand or generic name, and then displaying various
information in English or Spanish about the drug. Examples of the displayed
information are: the intended clinical use of the drug, the drugs side effects,
and certain precautions about using the drug.

Body Mass Index Calculator. This tool calculates the body mass index of a
person based on information that the user provides. The body mass index is
then used to determine whether a person is overweight or obese.

Site Search. This tool allows users to search the entire Healthmall.com
website for specific health and medical information. We also provide access to
Medline, a large database of medical information provided by the National
Library of Medicine.

Physician Databases. We provide to consumers access to a database
containing over 375,000 physicians names, address and specialties. This
database is provided to us, without cost, from Med.NA, Inc.

Health Food Store Database. Healthmall.com features a large database of
health food stores. This searchable database contains more than 5,000 health
food stores in the United States and includes their name, address and phone
number. The database is routinely updated and expanded.

Contest. We recently commenced a contest on our Healthmall.com website
whereby users who register and complete a questionnaire receive a bottle of
vitamins free of charge and are eligible to win a one year supply of vitamins
of up to $600 annually. This promotion is conducted in conjunction with
Pharmor Corporation. Information from questionnaires are added to our
database. In the future we may offer other contests or change the terms of the
current contest.

Health Risk Assessments. We recently introduced an interactive
questionnaire providing users a quick and easy way to assess their health and
find corrective measures they can take to reduce health-related risks.

Listed below are some of the tools that we are presently developing.
Deployment of these tools will involve our successful acquisition and
integration of the required content and related technology. We cannot assure
you that these tools will be successfully deployed on a timely basis, or at
all, or that users will find these features attractive.

Healthmall.com Personal Medical Record. We plan to offer a personal
medical record which will allow users to establish and maintain a lifelong
record of personal health and medical information in a secure portion of our
database. We presently plan to add a personal medical record feature to our
website in the second half of 2000.

My Disease. This product is intended to allow consumers to receive email
newsletters with health news and information tailored to their specific needs.
We presently plan to add this tool to our website in the second half of 2000.

Recipe Database. This feature is intended to provide a customized,
searchable database of recipes meeting specific dietary requirements of the
user, such as low-fat, low-salt diets. We presently plan to add this tool to
our website in the second half of 2000.

Affiliate Relationships

Dr. James Corea - Healthyfirst.com. On December 13, 1999, we entered into
an agreement with Dr. James Corea, trading as James Corea's Vita-labs, under
which we have purchased the following rights into perpetuity:

- - - to operate, manage and host Dr. Corea's www.Healthyfirst.com website;

- - - to design or redesign the website;

- - - to add additional content to the website;

- - - to establish hyperlinks to the website; and

- - - to solicit and sell advertising on the website and advertise and market the
website on search engine.

Under the agreement, we are to receive 50% of the gross profits after expenses
generated from the Healthyfirst.com website.

Healthyfirst.com is a health information site that is targeted towards
listeners of Dr. James Corea's radio show which is aired in the Philadelphia
metropolitan area . The site has a shopping cart which allows the visitor to
purchase vitamins and other nutritional products. All other requests by a
visitor for information as well as use of interactive tools are linked to
Healthmall.com.

Pharmor Corporation. We are conducting a vitamin contest in conjunction
with Pharmor Corporation. We are also negotiating a nonexclusive agreement with
Pharmor Corporation to use Healthmall.com as a source for consumer healthcare
content on their web site.www.pharmor.com.

Chat Room

We currently operate a single chat room conducted by Dr. James Corea and
sponsor by Pharmor Corporation. Since January 1, 2000, we have conducted one
chat session in which 31 visitors posted questions. We plan on further
expanding the chat room and developing others.

Healthcare Practitioner Services

As a secondary objective we provide Internet related services to
healthcare practitioners through website development, directory listings and
.MD domain names. We initially believed that registering and hosting .MD domain
names would be an important revenue generation part of our business. We have
recently concluded otherwise and have changed the focus of our business
strategy to healthcare websites rather than the registration of .MD domain
names and other healthcare practitioner services that are not directly related
to the websites.

Website Development and Hosting.

We establish an online presence for the chiropractor by developing a
website as well as an e-mail account for the chiropractor. This online
presence will be performed free-of-charge for the first six months. At the end
of the six months, the chiropractor will have the option of staying online for
an annual fee of $150.00 or terminate the service. We have established, or are
in the process of establishing, websites for over 200 chiropractors. No
chiropractor has paid us any fees, since no chiropractor has had an online
presence for six months. Depending on the success of this service with
chiropractors, we may offer similar options for other healthcare practitioners.

Directory Listings

On our website www.healthmall.com, we have created directories for
licensed chiropractors, massage therapists and licensed naturopathic doctors.
The directories include the name, address and phone number of the healthcare
practitioner. We currently have approximately 3,700 licensed chiropractors,
20,000 massage therapists and 3,000 licensed naturopathic physicians listed on
these directories. The information on these directories is derived from
various professional membership directories as well as voluntary requests to be
included in the directories. To date, 175 chiropractors have requested to
included on the directory. All of the database directories are searchable by
name, address, city, state or zip code. In addition, we license from Med.NA,
Inc., at no cost to us, a directory of over 375,000 licensed medical doctors
and doctors of osteopathic medicine which includes in addition to the doctor's
name, address and telephone number, the type of insurance which the doctor
participates and which can be searched by medical specialty. A doctor can log
on our website and register with MedNA to have his/her name added to the
directory.

.MD Domain Names

We register and host .MD domain names directly from our Internet
website, located at www.GoHealth.MD. Anyone can access this site and register
for an available domain name with the .MD extension. We have a strategic
alliance with a Florida company, Domain Name Trust, Inc., which has a licensing
agreement with the country of Moldova, a small Eastern European country which
was assigned a monopoly over the ".MD" top-level domain extension by the
Internet Assigned Numbers Authority, a United States government agency, in
conjunction with the United Nations' International Organization for
Standardization.

We derive revenues from the registration of .MD domain names from our
website www.GoHealth.MD. On our www.GoHealth.MD website, a person can enter a
name that they want to register for a one year period. The annual cost is
$299. Currently under our agreement with Domain Name Trust, as a result of our
making a $10,500 prepayment ($35 per domain name), we will receive $235 for the
first 300 domain names which are registered through our website after January
1, 2000. We have registered four domain names under this program. After 300
domain names are registered, we are to receive $100 for each domain name
registered at our website. In addition, we will receive $50 per year for the
renewal of each domain name initially registered on our website.

Revenue Opportunities.

Our company is a development stage company and as of December 31, 1999 we
have not conducted any significant operations. Our operating strategy is
presently comprised of three primary means of generating revenue:

- advertising;
- content syndication; and
- electronic commerce.

Advertising. The healthcare industry spends billions of dollars every year
to market products and services to consumers. We believe that health portals
and other vertically focused websites are uniquely positioned to attract a
significant share of these advertising expenditures. By identifying users
interested in a particular health-related topic or who desire to address a
particular health condition, we believe we can sell advertising in a highly
targeted manner, thereby commanding higher advertising rates.

Merchants can purchase advertising on our website in two ways. Banner
advertising is generally sold based on the number of impressions received by
the advertisement and its position on the website. This type of advertising
frequently encourages the user to move to other web pages which describe the
advertiser's product and solicit a direct response from the user. Sponsorships
are contracts that typically grant advertisers rights to promote their products
on a specific portion of the website. Sponsorships are designed to support
broad marketing objectives, including brand awareness, product introductions,
research and transactions, generally on an exclusive basis. Accordingly,
sponsorships are sold based on their duration, the portion of the website
sponsored and the number of impressions delivered.

We have entered into an agreement with Burst Media, an advertising agency
that sells advertising space on the Internet for websites. In addition, we
directly solicit potential advertisers. The actual rates vary that we receive
vary from advertiser to advertiser. Our agreement with Burst Media provides
that Burst Media retains 40% of the advertising revenue that they generate.

We are at varying stages of establishing links with websites possessing
easy to remember domain names. Since launching the Healthmall.com website, we
have developed advertising relationships with the following companies:
Onhealth.com., Drkoop.com, Pharmor.com, Natraflex, The Simple Truth.com,
Vivacity.com, Nature's Source's, Permalean, Nutriceutical Technology
Corporation, Northeast Health Institute and Nourishing Foods, Inc.

Content Syndication. We plan to enter into agreements and establish
relationships with other companies to generate revenues and traffic growth to
our website. Our current content agreements generally stipulate that all
content provided by Healthmall.com must retain a legend indicating "Provided by
Healthmall.com: and is subject to an acceptable use policy that defines how and
where the content may be used. Editorial content and/or content control
generally remain the exclusive right of the healthmall.com network. We believe
that by allowing other high-traffic websites and portals to offer our content
we will gain broad exposure of our brand and drive high volumes of traffic to
the healthmall.com website, thereby allowing us to generate more advertising
revenues.

E-Commerce. We currently provide users with the ability to access a
nutritional and vitamin products through our operation of the Healthyfirst.com
website with Dr. James Corea. Under our agreement with Dr. Corea, we receive
50% of the gross profits after expenses generated by the website. We plan to
develop other e-commerce opportunities in the future.

Marketing

We will be seeking distribution relationships with leading search engines
and portal companies, as well as with major Internet access providers.
Distribution relationships serve to build our brand and drive traffic to the
Healthmall.com website. By increasing our brand exposure and traffic through
distribution relationships, our goal is to have Healthmall.com become an
effective means for advertising healthcare products on the Internet. We have
submitted our URL to all major search engines at no cost to us. In addition, we
have listed our Healthmall.com website on the following search engines for
which we pay a fee:

- - - Goto.com search engine. We pay a monthly fee to Goto.com for our
Healthmall.com website. Goto.com is a pay for position search engine which
allows individual websites to bid for a position in the search engine with
regard to certain key words. The highest bid goes to the top of the list for a
particular word.

- - -Alta Vista search engine. We have rankings the direct traffic to our
Healthmall.com website from the ALTA VISTA search engine as well as search
engine positioning with the entity known as REAL NAMES. We anticipate paying
approximately $1,000 on an annual basis for approximately 10 keywords which
appear on the ALTA VISTA search results.

We intend to distribute and advertise our websites and services through
major trade shows. As an example, we have participated in the Natural Health
Food Expo in October 1999 in Baltimore, Maryland, as well as the Florida
Chiropractic Association convention in December 1999 in Naples, Florida. We
also plan to attend large state medical conventions that offer large physician
attendance.

We also use mailing lists, as well as E-mail and various selective media
outlets, such as the Journal of the American Medical Association and other
largely circulated medical and speciality medical journals, such as the Journal
of the American Chiropractic Association. We may eventually expand our
marketing in the field of dentistry and podiatry.

Sales and Support Organization

We currently do not have any sales staff. All our selling efforts to date
have been conducted by our President and sole employee, Leonard F. Vernon. Our
goal is to hire four persons as sales staff. Our longer term goal is to divide
the country into four regions, each with a sales manager and a sales team of
two to four member under each sales manager. An inside sales person is also
expected to be added to handle orders from customers, as well as provide
customers with literature and product information.

Competition

A large number of Internet companies compete for users, advertisers, e-
commerce transactions and other sources of on-line revenue. The number of
Internet websites offering users healthcare content, products and services is
vast and increasing at a rapid rate. In addition, traditional media and
healthcare providers compete for consumers' attention both through traditional
means as well as through new Internet initiatives. We believe that competition
for healthcare consumers will continue to increase as the Internet grows as a
communication and commercial medium.

We compete directly for users, advertisers, e-commerce merchants,
syndication partners and other affiliates with numerous Internet and
non-Internet businesses, including:

- - -Health-related on-line services or websites targeted at consumers, such as
accesshealth.com, ahn.com, betterhealth.com, drweil.com, healthcentral.com,
healthgate.com, intelihealth.com, mayohealth.org; mediconsult.com,
onhealth.com, thriveonline.com and webmd.com;

- - -On-line and Internet portal companies, such as America Online, Inc.; drkoop,
Inc., Microsoft Network; Yahoo! Inc.; Excite, Inc.; Lycos Corporation and
Infoseek Corporation;

- - -Electronic merchants and conventional retailers that provide healthcare goods
and services competitive to those available from links on our website;

- - -Hospitals, HMOs, managed care organizations, insurance companies and other
healthcare providers and payors which offer healthcare information through the
Internet; and

- - -Other consumer affinity groups, such as the American Association of Retired
Persons, SeniorNet and ThirdAge Media, Inc. which offer healthcare-related
content to specific demographic groups.

We believe that competition in our industry is based primarily on:

- - - the quality and market acceptance of healthcare content;

- - -brand recognition;

- - -the quality and market acceptance of new enhancements to current content; and

- - - features and tools.

Our competitive position in our market as compared to our competitors is
difficult to characterize due principally to the variety of current and
potential competitors, the emerging nature of the market, and our being in the
market for only a short period of time. We believe that our markets are
still evolving, and we cannot assure you that we will be able to compete
successfully.

Additionally, many of our competitors are likely to enjoy substantial
competitive advantages compared to our company, including:

- the ability to offer a wider array of on-line products and services;
- larger production and technical staffs;
- greater name recognition;
- larger customer and user bases; and
- greater financial resources.

To be competitive, we must respond promptly and effectively to the
challenges of technological change, evolving standards and our competitors'
innovations by continuing to enhance our products and services, as well as our
sales and marketing channels. Increased competition could result in a loss of
our market share or a reduction in our prices or margins, any of which could
adversely affect our business. Competition is likely to increase significantly
as new companies enter the market and current competitors expand their services

Business Interruptions

Our operations are dependent on our ability to protect our computer
equipment against damage from fire, earthquakes, power loss, telecommunications
failures and similar events. A significant portion of our computer equipment,
including virtually all of our equipment devoted to our Internet services, is
located at the facilities of World Wide Communications, Inc. in Cherry Hill,
New Jersey. Any equipment damage or failure that causes interruptions in our
operations could have a materially adverse effect on our business. We do not
have an insurance policy covering such interruptions, although we are
investigating such coverage.

Additionally, Year 2000 problems may disrupt our operations which could
result in lost revenues and increased operating costs. Because our business
depends on computer software, we have assessed the Year 2000 readiness of our
systems. We are satisfied with our state of readiness, but we cannot make any
assurances that we will avoid the Year 2000 problem. Any problems arising from
Year 2000 complications could potentially result in lost revenues and increased
costs.

Security Risks

Our software and equipment are vulnerable to computer viruses or similar
disruptive problems caused by our customers or other Internet users. Computer
viruses or problems caused by third parties could lead to interruptions, delays
or cessation in service to our customers. Furthermore, inappropriate use of
the Internet by third parties could also potentially jeopardize the security of
confidential information stored in the computer systems of our customers. We
do not have product liability or other insurance to protect against risks
caused by computer viruses or other misuse of software or equipment by third
parties. Although we attempt to limit our liability to customers for these
types of risks through contractual provisions, no assurances can be given that
these limitations will be enforceable or effective.

We retain confidential customer information in our database. Therefore, it
is critical that our facilities and infrastructure remain secure and are
perceived by consumers to be secure. Despite the implementation of security
measures, our infrastructure may be vulnerable to physical break-ins, computer
viruses, programming errors or similar disruptive problems. A material security
breach could damage our reputation or result in liability.

Technology And Systems

Both of our websites, www.Healthmall.com and www.GoHealth.MD, are hosted
by World Wide Web Communications, Inc. at their facilities in Cherry Hill, New
Jersey, with the latest Internet hardware and software technologies. In
connection with our acquisition of the hlthmall.com website from Robert H.
Savar, we entered into a contract with World Wide Web Communications, Inc.
under which we pay a monthly fee for web hosting services.

Exodus IT-class co-location facilities provide a secure, high availability
and high bandwidth space for our servers. This includes redundant OC-3 and
OC-12 backbone connections to the Internet, uninterruptible power supplies
with diesel generator backup, all housed in a copper-lined, earthquake-proof
building. Direct connections via "T-1" and DSL lines allow the main office to
connect seamlessly and reliably to the servers and the Internet. A farm of
Intergraph IS-8000 and IS80 mission-critical servers are housed behind a
redundant F5 Big/IP switcher for complete software and hardware fault
tolerance and load leveling. These servers run Microsoft Windows NT Enterprise
Server with Internet Information Server 4.0, Active Server Pages with a
proprietary page caching system and publishing tools for Web page hosting and
production management. The resulting performance in preliminary tests shows
dominance over other competitive sites. All advertisement hosting and
reporting is handled through NetGravity Ad Server, a powerful ad management
and forecasting toolset.

Our Health Risk Assessments tool utilizes Microsoft SiteServer tools and
technologies, which provides customized web crawling, user profile management,
nightly process runs and e-mail support.

Microsoft SQL Server databases are heavily used for all content, process
management and tracking needs. Offsite backups occur regularly throughout the
day to protect against a total system failure.

While we believe World Wide Wed Communications hosting site is an
acceptable solution for current needs, we are negotiating an agreement with
another party for a more enhanced hosting site and more enhanced services for
the anticipated growth of our Healthmall.com website.

Regulation

Some computer applications and software are considered medical devices and
are subject to regulation by the United States Food and Drug Administration. We
do not believe that our current applications or services will be regulated by
the FDA. We may expand our application and service offerings into areas that
subject it to FDA regulation. We have no experience in complying with FDA
regulations.

The practice of medicine and pharmacology requires licensing under
applicable state law. We have endeavored to structure our website and affiliate
relationships to avoid violation of state licensing requirements, but a state
regulatory authority may at some point allege that some portion of our business
violates these statutes. Any such allegation could result in a material adverse
effect on our business. Further, any liability based on a determination that we
engaged in the practice of medicine without a license could expose us to civil
or criminal liability. We do not maintain insurance against such liabilities.

We may earn a service fee when users on our website purchase prescription
pharmacy products from certain of our prospective Internet partners. We
anticipate that the fee would not be based on the value of the sales
transaction but rather on a fee per visit basis. Federal and state
"anti-kickback" laws prohibit granting or receiving referral fees in connection
with sales of pharmacy products that are reimbursable under federal Medicare
and Medicaid programs and other reimbursement programs. Although there is
uncertainty regarding the applicability of these regulations to our Internet
revenue strategy, we believe that any service fees we receive are for the
primary purpose of marketing and do not constitute payments that would violate
federal or state "anti-kickback" laws. However, if our programs are deemed to
be inconsistent with federal or state law, we could face criminal or civil
penalties. Further, we would be required either not to accept any transactions
which are subject to reimbursement under federal or state healthcare programs
or to restructure our compensation to comply with any applicable anti-kickback
laws or regulations. In addition, similar laws in several states apply not
only to government reimbursement but also to reimbursement by private insurers.
If our activities were deemed to violate any of these laws or regulations, it
could cause a material adverse affect on our business, results of operations
and financial condition.

Employees/Consultants

Currently, Leonard F. Vernon, our President is our only employee. We have
entered into consulting agreements and have hired consultants from time to time
to assist in our operations.

On November 16, 1999, we entered into a Management Consulting Agreement
with MCOM Management Corp., under which MCOM agreed to conduct marketing
research in the Internet health industry. MCOM also confers with our management
daily regarding our operations and implementing our business plan. MCOM is also
expected to provide investment relations for us by interacting with brokerage
firms and investment and acquisition candidates for us. We have agreed to pay
MCOM $5,000 per month through October 2000 and we issued to MCOM 300,000 shares
of our common stock and a warrant to purchase 500,000 shares of our common
stock through December 31,2000. The first 100,000 shares exercisable under the
warrant are exercisable at $1.00 per share and the remaining 400,000 shares are
exercisable at $2.00 per share.

We have also entered into one year consulting agreements on August 23,
1999 with Dr. Harvey Benn, D.O. and Dr. Frank Gettson, a chiropractor. Under
the agreements, Dr. Benn and Dr. Gettson agreed to provide us consultancy
services from time to time and provided advisory service in designing and
formatting our website to attract other medical professionals. As part of the
agreements, we issued to Dr. Benn an option to purchase 150,000 shares of our
common stock for $1.00 per share until July 2009 and to Dr. Gettson an option
to purchase 25,000 shares for $1.00 per share until July 2009.

Forward Looking Statements

The information provided in this report may contain forward looking
statements or statements which arguably imply or suggest certain things about
the Company's future. These include, but are not limited to statements about:
(1) any competitive advantage the Company may have as a result of its installed
base of electrosurgical generators in the field of neurosurgery; (2) the
Company's belief that its products exceed industry standards or favorably
compete with other companies' new technological advancements; and (3) the
anticipated success of certain recently introduced products or products
scheduled to be released in the near future for use in neurosurgery, other
surgical disciplines, and the dental market. These statements are based on
assumptions that the Company believes are reasonable, but a number of factors
could cause the Company's actual results to differ materially from those
expressed or implied by these statements. Investors are advised to review the
Additional Cautionary Statements section, which follows the Management's
Discussion and Analysis section (Item 6) of this Report, for more information
about risks that could affect the financial results of the Company.

Item 2. DESCRIPTION OF PROPERTY.

Our offices are located at 2051 Springdale Road, Cherry Hill, New Jersey.
Also present at this location are the offices of Able Imaging, Inc., a wholly
owned entity of William D. Hanna, one of our directors. We do not pay rent to
Mr. Hanna for such facilities.

Item 3. LEGAL PROCEEDINGS.

As of December 31, 1999, there are no material pending legal proceedings
to which the Company is a party or to which any of its property is the subject.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On November 10, 1999, the holders of a majority of our common stock voted
to amend our Articles of Incorporation to change our name to GoHealth.MD, Inc.
Of the 3,799,177 shares issued and outstanding on that date, shareholders
owning 3,102,000 shares, or 81% of our outstanding common stock, voted to
approve this name change via written consent taken without a meeting pursuant
to Section 78.320 of the Nevada revised statutes. We filed an Information
Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 on
January 3, 2000 regarding the above matter.

PART II

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

Our common stock is currently traded through the over-the-counter market
on the National Association of Securities Dealers, Inc. Bulletin Board ("NASD
Bulletin Board") under the symbol "GOMD." Prior to January 19, 2000, our
common stock was traded through the NASD Bulletin Board under the symbol
"NUGT." Limited trading has occurred over the past several years.

In October 1998, our common stock experienced a 1-for-310 reverse stock
split and all fractional shares were rounded up. Immediately after the reverse
split, we had approximately 97,117 total shares of issued and outstanding.
Simultaneous with this reverse stock split the number of shares of common stock
authorized for issuance was reduced 1-for-10, from 50,000,000 to 5,000,000.

At our 1999 annual meeting, held on August 16, 1999, our Board of
Directors and the holders of a majority of the outstanding common stock
increased the number of authorized shares of our common stock to 25,000,000
from 5,000,000.

The following table set forth below lists the range of high and low bids
of our common stock for each fiscal quarter for the last two fiscal years as
reported by NASD Bulletin Board. The prices in the table reflect inter-dealer
prices, without retail markup, markdown or commission and may not represent
actual transactions.

The amounts, and all other shares and price information contained in this
document, have been adjusted to reflect the stock splits.

Period Ended December 31, 1998 High Low
First Quarter $0.02 $0.001
Second Quarter $0.02 $0.005
Third Quarter $0.02 $0.001
Fourth Quarter $7.00 $0.062

Period Ended December 31, 1999
First Quarter $6.00 $0.062
Second Quarter $3.250 $0.33
Third Quarter $4.50 $1.250
Fourth Quarter $6.00 $2.00

As of March 24, 2000, the average of the closing bid and asked price for
our common stock as reported by the NASD Bulletin Board was $3.3125. As of
March 24, 2000, we had approximately 631 shareholders of record.

We have never paid a cash dividend on our common stock. It is our present
policy to retain earnings, if any, to finance the development and growth of our
business. Accordingly, we do not anticipate declaring any cash dividends in
the foreseeable future.

Recent Sales of Unregistered Securities

All securities we sold during the last fiscal year were made pursuant to
exemptions under Section 4(2) under the Securities Act of 1933, as amended (the
"Act"), to accredited investors pursuant to Rule 506 under the Act. No
underwriting discounts or commissions were paid in connection with any of these
securities.

On June 22, 1998, for $15,100, we issued 48,709 shares of common stock to
a designee of Ken W. Kurtz, First Avenue, Ltd., a Utah limited partnership in
which Ken Kurtz is the general partner. Ken W. Kurtz is an accredited investor
and a shareholder of our company at the time of the purchase..

MCOM Management Corp. ("MCOM"), a Delaware corporation, has received
350,000 shares of our common stock pursuant to a November 16, 1999 management
consulting agreement. MCOM is wholly owned by Michael Morfit, an accredited
investor. MCOM agreed to render management consulting, strategic planning and
marketing and advisory services in exchange for (i) $5,000 per month through
October 2000, (ii) 300,000 shares of our common stock and (iii) warrants to
purchase 500,000 shares of our common stock through December 31, 2001 at
exercise prices of $1.00 for the first 100,000 shares and $2.00 per share for
the next 400,000 shares. On December 13, 1999, MCOM exercised warrants to
purchase 50,000 shares of our common stock and tendered $50,000 for the $1.00
warrant exercise price.

On January 10, 2000, MCOM also acquired a warrant for 75,000 shares of our
common stock for $75,000 and, on the same day, exercised the warrant to
purchase 75,000 shares of our common stock for another $75,000. The warrants
were purchased in our private placement described in the next paragraph.

From November 12, 1999 to January 11, 2000, we conducted a private
placement of warrants to purchase shares of our common stock to the following
persons, who were stockholders of our company as a result of the Merger. Each
of these warrants were purchased for $1.00, have an exercise price of $1.00 per
share and expire on December 31, 2002.

Stockholder Shares Issuable Upon Exercise of Warrants

Martin Ciner 20,000
Michael Marks 15,000
Scott Hankinson 100,000
Marketing Management Professionals 15,000
Joseph McGowen 15,000
Robert Lipinski 50,000
Thomas Capato 10,000
Frank Casey 15,000
Anthony Iancale 2,000
Thomas Flynn, Sr. 2,000
Thomas Flynn, III 10,000
Dawn Polizzi 5,000
Anthony Pietrafesa 10,000
Mark Keminosh 8,000
Joseph DiGaetano 25,000
Alexander Zlatnik 2,500
Only Michael Marks and MCOM have exercised their warrants.

Pursuant to our obligations under the Merger, we issued options to
purchase shares of our common stock to holders of options to purchase shares of
common stock of GoHealth.MD Inc., the Delaware corporation. The options to
purchase shares of our common stock contained the same terms as the option
holders had received from GoHealth.MD, Inc., the Delaware corporation, prior to
the Merger. The persons listed below received such options between May 1999 and
August 1999 in recognition of services they had rendered to GoHealth.MD, a
Delaware corporation, prior to the Merger. The options were granted to Drs.
Gettson and Benn, both of whom are medical professionals, for their assistance
in designing and formatting our website to attract other medical professionals.
Mr. Kishbaugh is an attorney who accepted the options in lieu of payment for
the legal services he rendered in connection with our contract with Dr. James
Corea, related to the website www.healthyfirst.com. Millennium Consulting,
Inc., and Messrs. Madden and Crooks received their options in consideration for
their services regarding the structuring of terms of our private placement.
The President of Millennium is the wife of Gary Crooks. These options are
exercisable at prices ranging from $0.50 to $1.50, with the exception of the
options held by Harvey Benn and Frank Gettson, which have an exercise price of
$1.00 per share, but which price is subject to a fair market value revision.
The options held by Millennium and Messrs. Crooks and Madden expire in May
2006, while Mr. Kishbaugh's options expire in June 2006, and Messrs. Benn and
Gettson's options expire in July 2009.

Stockholder Shares Issuable Upon Exercise of Options
Millennium Consulting, Inc 30,000

Gary Crooks 5,000

John Madden 5,000

Harvey Benn 150,000

Frank Gettson 25,000

J. Eric Kishbaugh 20,000

We issued to the following persons unregistered shares of our common stock
in connection with the Merger in exchange for an equal number of shares of
common stock of GoHealth.MD Inc., the Delaware corporation. All of these
persons were the founders of GoHealth.MD Inc., the Delaware corporation, and
were issued the aggregate 3,000,000 shares from GoHealth.MD Inc. at par value
of $0.001 per share, or $3,000.

Sandra Vernon 2,000,000

William Hanna 500,000

Kevin O'Donnell 500,000

On February 23, 1999, GoHealth.MD Inc., the Delaware corporation, granted
two of its executive officers, Kevin O'Donnell and William Hanna, stock options
to each purchase 115,000 shares of its common stock with an exercise price of
$0.50 per share. These options expire on February 23, 2006. Pursuant to the
Merger, we assumed the rights and obligations under these option agreements and
issued replacement options to Messrs. O'Donnell and Hanna under the same terms.

The remainder of securities we issued without registration under the Act
within the last fiscal year were also issued pursuant to the Merger. The
stockholders set forth below received the same number of shares of our common
stock and warrants to purchase shares of our common stock as they had held with
GoHealth.MD Inc., the Delaware corporation, at the time of the Merger. The
shares of common stock and warrants to purchase common stock were originally
issued pursuant to a private placement conducted between February 1999 and
November 1999. Pursuant to this private placement, units were offered at a
price of $5,200 per unit, with each unit entitling an investor to 2,000 shares
of common stock and a warrant entitling the holder to purchase 2,000 shares of
common stock at $2.50 per share (subject to adjustment), at any time prior to
September 30, 2003. A total of 51 units, or 102,000 shares of GoHealth's
common stock and 102,000 warrants to purchase shares of common stock, were
issued in this private placement, in exchange for: (i) proceeds of $249,600 for
96,000 shares and 96,000 warrants, (ii) Internet website assets valued at
$35,950 for 4,000 shares and 4,000 warrants and cash consideration (2,000
shares and 2,000 warrants were issued to Moiz Balkhi and 2,000 shares and 2,000
warrants were issued to Robert H. Savar in separate transactions for separate
assets); (iii) consulting services rendered by William Bromley, a doctor of
chiropractic, in connection with his assistance in the design and format of our
website, valued at $5,200 for 2,000 shares and 2,000 warrants.

Shareholder Number of Shares and Warrants Issued

Robert Deacon, Sr. 2,667
Robert Deacon, Jr. 2,667
Frank Casey 4,000
Albert DiPasquale, M.D. 2,000
Thomas Flynn, III, Esq. 4,000
Scott Hankinson, M.D. 4,000
Marc Kahn, M.D. 4,000
Michael Marks, Esq. 4,000
Joseph McGowan, Jr., Esq. 2,000
Mullica Hill-Family Practice 4,000
Anthony Pietrafesa 2,666
Moiz Balkhi 2,000
Market Management Professionals, Inc. 2,000
Alexander Zlatnik, MD 4,000
J. Erik Kishbaugh, Esq. 12,000
Martin Ciner 2,000
Harvey Benn, D.O. 10,000
Frank J. Gettson, D.C. 10,000
Market Management Professionals, Inc. 2,000
Robert Lipinski 2,000
Thomas Capato 2,000
Joseph DiGaetano 2,000
Mark Keminosh, D.C. 4,000
William Bromley, D.C. 2,000
Anthony Iancale 2,000
Dawn Polizzi 4,000
Thomas Flynn, M.D. 4,000

Item 6.MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

The following discussion of the financial condition and results of
operations of our company should be read in conjunction with the financial
statements and the notes to the statement included elsewhere in this Report.

Overview

On November 10, 1999, our wholly owned subsidiary, Nugget Holding
Company, merged into GoHealth.MD Inc., a Delaware corporation, a development
stage company (the"Merger"). Prior to the Merger, we had no operations and were
looking to consummate a business combination with another company which had
operations. As a result of the Merger, GoHealth.MD Inc., the Delaware
corporation, became our wholly owned subsidiary, and the shareholders of the
Delaware corporation received 81% of our outstanding common stock. On January
19, 2000, we changed our name to GoHealth.MD Inc. For accounting purposes, the
Merger was treated as GoHealth.MD Inc., the Delaware corporation, acquiring
Nugget Exploration, Inc., and hence for this Management's Discussion section
and accounting purposes, references to the "company," "us" and "we" refer to
the operations of GoHealth.MD Inc., the Delaware corporation. Accordingly, we
also changed our accounting year to the calendar year, the accounting year of
GoHealth.MD Inc., the Delaware corporation.

For the year ended December 31, 1999, our company had not conducted any
significant business. Because of this lack of prior operations, assets and
industry position, we must be considered a development stage company.
Consequently, there can be no assurance that viable commercial operations can
be achieved or sustained even if we are successful in raising all the capital
we require.

Our website, www.Healthmall.com, which we launched in November 1999,
currently has a focus on alternative healthcare with the following components:

- healthcare content on a wide variety of subjects, including information
on acute ailments, chronic illnesses, nutrition, fitness and wellness, as well
as alternative healthcare;

- access to healthcare practitioner databases including chiropractors,
massage therapists, naturopathic physicians, and medical physicians;

- an interactive chat room; and

- tools that permit users to personalize their on-line experience.

- developing websites;

- providing a directory of healthcare practitioners on our Healthmall.com
website; and

- registering of .MD domain names.

Plan of Operations

Our objective is to establish Healthmall.com and other websites as a
trusted and comprehensive source of consumer healthcare information and
services on the Internet. Healthmall.com was created to empower consumers to
better manage their personal health with comprehensive, relevant and timely
information. Our business model is to earn advertising and subscription
revenues from advertisers, merchants, manufacturers and healthcare providers
who desire to reach a highly targeted community of healthcare consumers on the
Internet.

Our business strategy incorporates the following key elements:

- provide consumers with high quality healthcare content to attract users
to www.Healthmall.com, and promote their loyalty to our website;

- syndicate content through affiliates to promote traffic growth;

- develop and expand on-line healthcare communities to allow users with
similar health-related experiences to exchange information and gather news and
knowledge in a secure, anonymous environment;

- provide consumers with unique features and tools; and

- provide an attractive and useful website that can deliver advertising in
a highly targeted manner, thereby commanding higher advertising rates.

In order to grow our operations and increase our revenue, we will need
incur significant advertising and promotional expenses and will need to hire
additional personnel in all phases of our operation. We would particularly like
to hire four salespersons by the end of the second quarter of fiscal 2000 in
order to further implement our primary operating strategy of generating revenue
from:

-advertising;
-content syndication; and
-electronic commerce.

There can be no assurance that we will have the resources to increase our
advertising and promotional expenses or to hire the necessary personnel and
managers in order to achieve growth in our operations and revenues, and any
failure to do so could have a material adverse effect on our operating results.

Our growth strategy relies on our ability to raise further capital and
upon the skills of our management. There can be no assurance that we will be
successful in these endeavors. Forces that can contribute to the lack of
success in implementing this growth strategy include, among other things: (i)
regulatory bodies and governmental regulations affecting our operations, (ii)
availability of funding on a timely basis, and (iii) functionality. If our
ability to expand our network infrastructure is constrained in any way we could
lose customers and suffer damage to our operating results.

We have a very limited operating history on which to base an evaluation of
our business and prospects. Our prospects must be considered in light of the
risks uncertainties, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies in new
evolving markets such as the Internet market. In view of the rapidly evolving
nature of our business and our limited operating history, we believe that
period-to-period comparisons of revenues and operating results are not
necessarily meaningful and should not be relied upon as indications of future
performance.

Results of Operations

We had advertising revenues of $80 and revenues from sales of .MD domain
names of $1,300 for the period from inception (February 23, 1999) to December
31, 1999. Our gross profit was $470, or 34% of sales.

Other expenses totaled $596,520, which consisted of the following:

-Consulting fees in the amount of $331,867, consisting primarily of
the amortization of the value of the consulting agreement entered into with
MCOM Management Corp. on November 16, 1999 under we agreed to pay MCOM $5,000
per month until October 2000 and MCOM was issued 300,000 shares of common
stock and warrants to purchase 500,000 shares of common stock, which was valued
at $1,900,000;

-Advertising and promotion expenses in the amount of $115,876;

-General and administrative expenses in the amount of $87,894;

-Marketing and licensing fees associated with the Healthmall.com
website and .MD domain names in the amount of $18,988;

-Website development costs related to our Healthmall.com website in
the amount of $40,660; and

-Interest expense in the amount of $1,235, principally from loans by
William Hanna, one of our officers and directors.

As a result of the foregoing, we had a net loss of $596,050. We also
incurred a charge of $808,500, which resulted in a net loss to common
stockholders of $1,404,550. The charge was attributable to the beneficial
conversion feature granted to the purchasers of Series A warrants, which
Series A Warrants were subscribed for in December 1999.

The loss per basic and diluted share was $0.34.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through private
equity financing. As of December 31, 1999, we received cash proceeds in the
amount of $252,600 from the sale of shares of our common stock and warrants to
purchase our common stock. In addition, we received $50,000 from the exercise
of warrants to purchase 50,000 shares of our common stock.

In order to continue to finance our operations, we will need to receive
funds from the exercise of outstanding warrants and options or through other
equity or debt financing. There can be no assurance that we will receive any
proceeds from the exercise of warrants or options or that we will be able to
obtain the necessary funds to fund our operations.

As of December 31, 1999, we had outstanding options and warrants to
purchase 1,017,000 shares of our common stock at prices from $.50 to $2.50 per
share and subscriptions to purchase Series A warrants, which will entitle the
holders to purchase 269,500 shares of common stock for $1.00 per share.

During 1999, we acquired the following assets, which are an important
part of our business:

Healthmall.com Domain Name. This domain name was purchased on April 26,
1999 from Moiz Balkhi, trading as Computerized Professional Enrichment
Services, for $5,500 and the issuance of 2,000 shares of common stock and
warrants to purchase 2,000 shares of common stock for $2.50 per share until
September 30, 2003, valued a $5,200.

Hlthmall.com Domain Name and Website. This domain name and associated
website was purchased on April 26, 1999 from Robert H. Savar for $20,000 and
the issuance of 2,000 shares of common stock and warrants to purchase 2,000
shares of common stock for $2.50 per share until September 30, 2003 valued at
$5,200. As part of the agreement with Mr. Savar, we have agreed to use his
company, World Wide Web Communications, Inc., as the host for our
Healthmall.com website.

James Corea's Vitalabs. On December 13, 1999, we entered into an agreement
with Dr. James Corea, trading as James Corea's Vitalabs, under which we
purchased certain rights regarding the www. Healthyfirst.com website into
perpetuity for $25,000. Under the agreement, we are to receive 50% of the gross
profits after expenses generated from the Healthyfirst.com website. We used
$240,727 from operating activities. We also used $90,384 in investing
activities which consisted of: the purchase of website assets for $45,300; the
purchase of furniture and equipment in the amount of $6,900; and liabilities
assumed in connection with the Merger of $39,075.

We received $369,902 from financing activities, which included proceeds
from the sale of common stock and stock warrants, proceeds of notes payable and
proceeds from officer's loan.

As a result of the foregoing, cash increased by $38,791 to $38,791.

Year 2000 Issues

The year 2000 issue arises because many computerized systems use two
digits rather than four digits to identify a year. Date sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors when
information using 2000 dates is processed. In addition, similar problems may
arise in some systems that use certain dates in 1999 to represent something
other than a date. The effects of the year 2000 issue may be experienced
before, on or after January 1, 2000, and if not addressed, the impact on
operations and financial reporting may range from minor errors to significant
systems failures which could effect an entity's ability to conduct normal
business operations. It is possible that all aspects of the Year 2000 issue
affecting us, including those related to the efforts of customers or third
parties, will not be fully resolved. We have confirmed that our significant
service providers are currently Year 2000 compliant.

There can be no assurance that governmental agencies, utility companies,
Internet access companies, third-party service providers and others outside of
our control will be Year 2000 compliant. The failure by such entities to be
Year 2000 compliant could result in a systemic failure beyond our control, such
as a prolonged Internet, telecommunications or electrical failure, which could
also prevent us from delivering Healthmall.com, decrease the use of the
Internet or prevent users from accessing Healthmall.com, any of which would
have a material adverse effect on our business, results of operations and
financial condition.

To date, we have not incurred any material costs in identifying or
evaluating Year 2000 compliance issues.

Forward Looking Statements

The information provided in this report may contain "forward looking"
statements or statements which arguably imply or suggest certain things about
our future. Statements which express that we "believe", "anticipate",
"expect", or "plan to" as well as other statements which are not historical
fact, are forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based on
assumptions that we believe are reasonable, but a number of factors could cause
our actual results to differ materially from those expressed or implied by
these statements. The Company does not intend to update these forward looking
statements. Investors are advised to review the "Additional Cautionary
Statements" section below for more information about risks that could affect
our financial results.

Additional Cautionary Statements

Our limited operating history makes an evaluation of our business difficult.

We commenced operations of our Internet operations with our
www.Healthmall.com website in November 1999 and we have only generated minimal
revenues. Prior to November 1999, our business consisted primarily of
registering .MD domain names. Accordingly, we have had a very limited operating
history. Companies, such as our company, in an early stage of development
frequently encounter enhanced risks and unexpected expenses and difficulties.
These risks and difficulties include our ability to:

-attract an audience of users to our Internet-based consumer
healthcare network;

-increase awareness of our brand;

-offer compelling on-line content, services and e-commerce
opportunities;

-attract a large number of advertisers who desire to reach our users;

-respond effectively to the offerings of competitive providers of
healthcare information on the Internet;

-continue to develop and upgrade our technology; and

-attract, retain and motivate qualified personnel.

We also depend on the growing use of the Internet for advertising, commerce and
communication, and on general economic conditions. We cannot assure you that
our business strategy will be successful or that we will successfully address
these risks or difficulties. If we fail to address adequately any of these
risks or difficulties our business would likely suffer.

We are a Development Stage Company and have a history of losses, negative cash
flow and anticipate continued losses.

Since our inception we have incurred losses and negative cash flow. As a
development stage company we have not achieved profitability and expect to
continue to incur significant operating and capital expenditures in areas such
as expansion of our advertising, brand promotion, content development, sales
and marketing, and operating infrastructure. Our business model assumes that
consumers will be attracted to and use healthcare information and related
content available on our Internet-based consumer healthcare network which will
in turn, allow us the opportunity to sell advertising designed to reach those
consumers. Our model is not yet proven, and we cannot assure you that we will
ever achieve or sustain profitability or that our operating losses will not
increase in the future. If we do not achieve profitability, we may not be able
to continue our business.

We must establish, maintain and strengthen our brand in order to attract users
to our network and generate advertising.

In order to expand our audience of users and increase our on-line traffic,
we must establish, maintain and strengthen our brand. For us to be successful
in establishing our brand, healthcare consumers must perceive us as a trusted
source of healthcare information, and advertisers, merchants and manufacturers
must perceive us as effective marketing and sales channel for their products
and services. We will need to increase substantially our marketing budget in
our efforts to establish brand recognition and brand loyalty. Our business
could be materially adversely affected if our marketing efforts are not
productive or if we cannot strengthen our brand.

Our business model relies on Internet advertising and sponsorship activities
which may not be effective or profitable marketing media.

Our future is highly dependent on increased use of the Internet as an
advertising medium. Although we have only had minimal advertising revenues to
date, our future depends on deriving revenues from advertising. The Internet
advertising market is new and rapidly evolving, and we cannot yet predict its
effectiveness as compared to traditional media advertising. As a result,
demand and market acceptance for Internet advertising solutions are uncertain.
Most of our current or potential advertising customers have little or no
experience advertising over the Internet and have allocated only a limited
portion of their advertising budgets to Internet advertising. The adoption of
Internet advertising, particularly by those entities that have historically
relied upon traditional media for advertising, requires that acceptance of a
new way of conducting business, exchanging information and advertising products
and services. Such customers may find Internet advertising to be less
effective for promoting their products and services relative to traditional
advertising media. We cannot assure you that the market for Internet
advertising will continue to emerge or become sustainable. If the market for
Internet advertising fails to develop or develops more slowly than we expect,
then our ability to generate advertising revenue would be materially adversely
affected, and we may not be able to continue our business

Various pricing models are used to sell advertising on the Internet. It
is difficult to predict which, if any, will emerge as the industry standard,
thereby making it difficult to project our future advertising rates and
revenues. Our advertising revenues could be adversely affected if we are
unable to adapt to new forms of Internet advertising. Moreover, "filter"
software programs are available that limit or prevent advertising from being
delivered to an Internet user's computer. Widespread adoption of this software
could adversely affect the commercial viability of Internet advertising.

We depend on third parties to provide content pursuant to nonexclusive
arrangements, which are short-term or terminable.

We intend to produce only a portion of the healthcare content that will be
found on the Healthmall.com network. We will rely on third-party organizations
that we believe have the appropriate expertise, technical capability, name
recognition, reputation for integrity, and willingness to syndicate product
content for branding and distribution by others. These entities currently
include PR Newswire, National Library of Medicine, and Fact and Comparisons. As
health-related content grows on the Internet, we believe that there will be
increasing competition for the best product suppliers which may result in a
competitor acquiring a key supplier on an exclusive basis, or in significantly
higher content prices. Such an outcome could make the Healthmall.com network
less attractive or useful for an end user, which could reduce our advertising
and potential e-commerce revenues.

We cannot provide assurances that we will be able to maintain
relationships with third parties that supply us with content, software or
related products or services that are crucial to our success, or that such
content, software, products or services will be able to sustain any third-party
claims or rights against their use. Also, we cannot assure that the content,
software, products or services of those companies that provide access or links
to our website will achieve market acceptance or commercial success.
Accordingly, we cannot assure that our existing relationships will result in
sustained business partnerships, successful product or service offerings or the
generation of significant revenues.

We depend on third party transactions and relationships, which are short-term
or terminable.

We depend, and will continue to depend, on a number of third-party
relationships to increase traffic on Healthmall.com and thereby generate
advertising and other revenues. Outside parties on which we depend include
unrelated website operators that provide, or which we believe will provide,
links to Healthmall.com, providers of healthcare content and Burst! Media,
L.L.C., the on-line property representation company which provides us with
advertising sales services. Our arrangements with third-party Internet sites
and other third-party service providers generally are not exclusive and are
short-term or may be terminated at the convenience of either party. We cannot
provide assurances that the third parties regard these relationships as
important to their own respective businesses and operations. They may reassess
their commitment to us at any time in the future and may develop their own
competitive services or products.

Further, in order to expand our network, we may need to enter into
strategic alliances, which may involve the payment of significant funds for
prominent or exclusive carriage of our healthcare information and services.
Such transactions are premised on the assumption that the traffic obtained from
these arrangements will permit us to earn revenues in excess of the payments
made to partners. This assumption is not yet proven, and if we are unsuccessful
in generating sufficient resources to offset these expenditures, we will likely
be unable to operate our business.

In order to execute our growth plan we must attract, retain and motivate highly
skilled employees, and we face significant competition from other Internet and
new media companies in doing so.

Our ability to execute our growth plan and be successful also depends on
our ability to attract, retain and motivate highly skilled employees. To date,
we have relied on Leonard F. Vernon, President, as our only employee, as well
as third party consultants to develop and operate our business. As we continue
to grow, we will need to hire additional personnel in all operational areas.
Competition for personnel throughout the Internet and related new-media
industry is intense. We may be unable to retain or attract, assimilate or
retain other highly qualified employees in the future. We expect to experience
in the future, difficulty in hiring and retaining highly skilled employees with
appropriate qualifications. If we do not succeed in attracting new personnel
or retaining and motivating personnel, our business will be adversely affected.

If we achieve growth, our inability to manage growth could harm our business.

If we achieve growth and are unable to manage our growth effectively, our
business, results of operations and financial condition could be adversely
affected.

If our ability to expand our infrastructure is constrained in any way we could
lose customers and suffer damage to our operating results.

Presently, a relatively limited number of consumers use our website.
Nevertheless, very soon we will need to change the host of our websites in
order to accommodate the increased traffic we have experienced on our website
as well as our projected future growth. We may not be able to accurately
project the rate or timing of increases, if any, in the use of our website or
to expand and upgrade, or afford to pay companies to expand and upgrade our
systems and infrastructure to accommodate such increases. We are currently
negotiating with a company to provide enhanced hosting services for our
website, but have not entered into an agreement as of this date. If we are
unable to change the host of our websites, our business may suffer.

We must continue to expand and adapt the network infrastructure to
accommodate additional users, increase transaction volumes and changing
consumer and customer requirements. Our systems may not accommodate increased
use while maintaining acceptable overall performance. Service lapses could
cause our users to instead use the on-line services of our competitors.

We may have liability for information we provide on our website or which is
accessed from our Website.

We may also have liability for information we provide on our website or
which is accessed from our website. Because users of the website access health
content and services relating to a condition they may have and may distribute
our content to others, third parties may sue us for defamation, negligence,
copyright or trademark infringement, personal injury or other matters. We could
also become liable if confidential information is disclosed inappropriately.
These types of claims have been brought, sometimes successfully, against
on-line entities in the past. Others could also sue us for the content and
services that are accessible from our website through links to other websites
or through content and materials that may be posted by users in our chat room
or bulletin board. Allegations of impropriety, even if unfounded, could
therefore have a material adverse effect on our reputation and business.

Consumers may also sue us if any of the products or services which we may
sell on or through our website are defective, fail to perform properly or
injure the user, even if such goods and services are provided by unrelated
third parties.

We may not be able to adequately protect our proprietary rights.

We have applied for federal registration of the mark "GoHealth.MD" and
"Healthsites.com" as well as other service and trademarks we deem important to
our business. A potentially conflicting pending application has been made with
the US Department of Commerce's Patent and Trademark Office with regard to
"GoHealth.MD." If we lose our right to use this mark, we could be forced to
change our corporate name and adopt a new domain name. These changes could
confuse current and potential customers and adversely impact our business.

We are relying upon a combination of copyright, trademark and trade secret
laws, nondisclosure and other contractual provisions to protect our proprietary
rights. Notwithstanding these safeguards, it may be possible for competitors
to imitate our products and services or to develop independently non-infringing
competing products and services. Such actions could materially and adversely
affect the number of users of our websites, which would materially and
adversely affect our business. Litigation, which could result in substantial
cost to and diversion of our efforts, may be necessary (i) to enforce any
trademarks, or copyrights, (ii) to protect trade secrets or know-how we own or
to defend ourselves against claimed infringement of the rights of others, or
(iii) to determine the scope and validity of the proprietary rights of others.
Adverse determinations in litigation could subject us to significant
liabilities to third parties, could require that we seek licenses from third
parties and could prevent us from manufacturing, selling or using our products,
any of which could have a material adverse effect on our business, financial
condition and results of operations. We are not currently a party to any
litigation.

We have limited sales, marketing and management experience.

Although our President, Leonard F. Vernon, has experience in marketing
other products, he has only limited marketing experience with Internet products
and services. We will therefore need to hire sales and marketing personnel.
There can be no assurance that such personnel will be able to work effectively
with Dr. Vernon.

Our capital requirements may require additional financing which may not be
available.

If our cash resources prove to be insufficient at that time, or prior to
that time, we may be required to seek additional debt or equity financing to
fund the costs of continuing operations until we achieve positive cash flow. We
have no current commitments or arrangements for additional financing and there
can be no assurance that any additional debt or equity financing will be
available to us on acceptable terms, or at all. If we are unable to satisfy
our capital requirements, we may not be able to effectively compete in the
marketplace or continue operations.

Rapid technological change in our industry could outdate our websites and
services.

The market for our websites is characterized by rapidly changing
technology and continuing development of customer requirements. The future
success of our business will depend in large part upon our ability to develop
and market our websites at an acceptable cost, and successfully anticipate or
respond to technological changes in customer requirements on a cost-effective
and timely basis. There can be no assurance that our development efforts will
be successful or that the emergence of new technologies, industry standards or
customer requirements will not render our technology or websites obsolete or
uncompetitive. In addition, to the extent that we determine that new
technologies or equipment are required to remain competitive, the acquisition
and implementation of such technologies and equipment are likely to require
significant capital investment. If we are not able to acquire or implement
such new technologies or equipment, we will not be able to effectively compete
in the marketplace.

One of our control persons was previously subject to disciplinary action in the
medical industry.

Dr. Vernon has a previous disciplinary action by the New Jersey State
Board of Medical Examiners in which he was given an 18-month suspension of his
license, 30 days of which were to be active with a monetary penalty of $3,000.
Dr. Vernon failed to perform the required community service and pay the fine
and the suspension was imposed for a full 18 months. This disciplinary action
was taken after the determination that Dr. Vernon's application to the
Educational Commission of Foreign Medical Graduates was misleading. Dr. Vernon
currently possesses an unrestricted license to practice chiropractic in the
State of New Jersey and there is no pending disciplinary action against him in
any of the states in which he is licensed.

We are competing in the Internet industry with a number of other companies,
including larger, well known entities who possess greater financial resources.

We compete directly for users, advertisers, e-commerce merchants,
syndication partners and other affiliates with numerous Internet and
non-Internet businesses, including:

-Health-related on-line services or websites targeted at consumers, such as
accesshealth.com, ahn.com, betterhealth.com, drweil.com, healthcentral.com,
healthgate.com, intelihealth.com, mayohealth.org; mediconsult.com,
onhealth.com, thriveonline.com and webmd.com;

-On-line and Internet portal companies, such as America Online, Inc.;
drkoop, Inc., Microsoft Network; Yahoo! Inc.; Excite, Inc.; Lycos Corporation
and Infoseek Corporation;

-Electronic merchants and conventional retailers that provide healthcare
goods and services competitive to those available from links on our website;

-Hospitals, HMOs, managed care organizations, insurance companies and other
healthcare providers and payors which offer healthcare information through the
Internet; and

-Other consumer affinity groups, such as the American Association of Retired
Persons, SeniorNet and ThirdAge Media, Inc. which offer healthcare-related
content to specific demographic groups.

Many of these actual and potential competitors are likely to enjoy substantial
competitive advantages compared to us, including:

-the ability to offer a wider array of on-line products and services;

-larger production and technical staffs;

-greater name recognition and larger marketing budgets and resources;

-larger customer and user bases; and

-substantially greater financial, technical and other resources.

Increased competition could result in a loss of revenues or a reduction in
our prices or an increase in our losses from operations. To be competitive, we
must respond promptly and effectively to challenges of technological change,
evolving standard of our competitor's innovations by continuing to enhance our
product and services. There is no assurance that we will have the financial
resources, technical expertise, marketing and support capabilities to continue
to compete successfully. Competition is likely to increase significantly as
new companies enter the market and current competitors expand their services.
Please see "Business-Competition."

Since we operate an Internet network, our business is subject to government
regulation relating to the Internet, which could impair our operations.

We are subject not only to regulations applicable to businesses generally,
but also laws and regulations directly applicable to electronic commerce.
Although there are currently few such laws and regulations, state, federal and
foreign governments may each adopt a number of these laws and regulations. Any
such legislation or regulation could dampen the growth of the Internet and
decrease its acceptance as a communications and commercial medium. If such a
decline occurs, companies may decide in the future not to use our products and
services. This decrease in the demand for our products and services would
seriously harm our business and operating results.

Any new laws and regulations may govern or restrict the following issues:

-User privacy;
-The pricing and taxation of goods and services offered over the
Internet;
-The content of websites;
-Consumer protection; and
-The characteristics and quality of products and services offered
over the Internet.

For example, the Telecommunications Act of 1986 prohibits the transmission
of certain types of information and content over the Internet. The scope of
this Act's prohibition is currently unsettled. In addition, although courts
recently held substantial portions of the Communications Decency Act
unconstitutional, federal or state governments may enact, and courts may
uphold, similar legislation in the future. Future legislation could expose
companies involved in Internet commerce to liability.

Since we operate a healthcare network over the Internet, our business is
also subject to government regulation specifically relating to medical devices,
the practice of medicine and pharmacology, healthcare regulation and other
matters unique to the healthcare area.

Laws and regulations have been or may be adopted with respect to the
provision of healthcare-related products and services on-line, covering areas
such as:

- The regulation of medical devices;
- The practice of medicine and pharmacology and the sale of
controlled products such as pharmaceuticals on-line; and
- The regulation of government and third-party cost reimbursement.

FDA Regulation of Medical Devices. Some computer applications and
software are considered medical devices and are subject to regulation by the
United States Food and Drug Administration. We do not believe that our current
applications or services will be regulated by the FDA; however, our
applications and services may become subject to FDA regulation. Additionally,
we may expand our application and service offerings into areas that subject us
to FDA regulation. We have no experience in complying with FDA regulation. We
believe that complying with FDA regulations would be time consuming, burdensome
and expensive and could delay or prevent our introduction of new applications
or services.

Regulation of the Practice of Medicine and Pharmacology. The practice of
medicine and pharmacology required licensing under applicable state law. While
we do not believe our website and affiliate relationships violate state
licensing requirements, a state regulatory authority may at some point allege
that some portion of our business violates these statutes. Any such allegation
could result in a material adverse effect on our business.

Federal and State Healthcare Regulation. We earn a fee when users on our
website purchase health food and vitamin products from a current e-commerce
partner. In addition, in the future we may earn a service fee when users on
our website purchase prescription pharmacy products. Federal and state
"anti-kickback" laws prohibit granting or receiving referral fees in connection
with sales of pharmacy products that are reimbursable under federal Medicare
and Medicaid programs and other reimbursement programs. If our program were
deemed to be inconsistent with federal or state law, we could face criminal or
civil penalties. Further, we would be required either not to accept any
transactions which are subject to reimbursement under federal or state
healthcare programs or to restructure our compensation to comply with any
applicable anti-kickback laws or regulations. In addition, similar laws in
several states apply not only to government reimbursement but also to
reimbursement by private insurers. If our activities were deemed to violate
any of these laws or regulations, it could cause a material adverse affect on
our business, results of operations and financial condition.

Our success depends on increased adoption of the Internet as a means for
commerce.

Our future success depends heavily on the acceptance and use of the
Internet as a means for commerce. The widespread acceptance and adoption of
the Internet for conducting business are likely only in the event that the
Internet provides businesses with greater efficiencies and other advantages. If
commerce on the Internet does not continue to grow, or grows more slowly than
expected, our growth would decline and our business would be seriously harmed.
Consumers and businesses may reject the Internet as a viable commercial medium
for a number of reasons, including:

- Potentially inadequate network infrastructure;
- Delays in the development of Internet enabling technologies and
performance improvements;
- Delays in the development or adoption of new standards and
protocols required to handle increased levels of Internet activity;
- Delays in the development of security and authentication
technology necessary to effect secure transmission of confidential
information;
- Changes in, or insufficient availability of, telecommunications
services to support the Internet; and
- Failure of companies to meet their customers' expectation in
delivering goods and services over the Internet.

Reliance on Internet servers.

We rely on the Internet and, accordingly, depend upon the continuous,
reliable and secure operation of Internet servers and related hardware and
software. Recently, several large Internet commerce companies suffered highly
publicized system failures which resulted in adverse reactions to their stock
prices, significant negative publicity and, in certain instances, litigation.
We have also suffered service outages from time to time, although to date none
of these interruptions has materially adversely affected our business
operations or financial condition. To the extent that our service is
interrupted, our users will be inconvenienced, our commercial customers will
suffer from a loss in advertising or transaction delivery and our reputation
may be diminished. Some of these outcomes could directly result in a reduction
in our stock price, significant negative publicity and litigation. Our computer
and communications hardware are protected through physical and software
safeguards. However, they are still vulnerable to fire, storm, flood, power
loss, telecommunications failures, physical or software break-ins and similar
events. We do not have full redundancy for all of our computer and
telecommunications facilities and do not maintain a backup data facility. We do
not have any type of business interruption insurance to protect us in the event
of a catastrophe. We also depend upon third parties to provide potential users
with web browsers and Internet and on-line services necessary for access to our
website. In the past, our users have occasionally experienced difficulties with
Internet and other on-line services due to system failures, including failures
unrelated to our systems. Any sustained disruption in Internet access provided
by third parties could adversely impact our business.

Item 7. FINANCIAL STATEMENTS.

See Index to financial statements on page F-1, herein.

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

As a result of the Merger between a subsidiary of ours and GoHealth.MD
Inc., a Delaware corporation, we have retained the services of our merger
partner's independent certified public accountant, Samuel Klein & Co., as of
December 1, 1999, for all of our needs. Jones, Jensen & Company, our previous
accountant ("Jones, Jensen"), was dismissed by our board of directors on
December 1, 1999, in connection with the November 10, 1999 merger. This
dismissal was unrelated to Jones, Jensen's competence, practices and
procedures. Jones, Jensen's financial statement reports did not contain any
adverse opinion or disclaimer of opinion, but did include a going concern
paragraph.

Jones, Jensen has informed us that it will provide the SEC a letter
containing its position with the foregoing statements regarding our change in
certifying accountant.

PART III

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

Our executive officers and directors, their respective ages and their
positions as of December 31, 1999 are as follows:

Name Age Position(s) and Office(s)

Dr. Leonard F. Vernon 44 President, Treasurer and Director
William D. Hanna 54 Vice President, Assistant Secretary and Director
Kevin O'Donnell 51 Secretary

Dr. Leonard F. Vernon, became our president, treasurer and a director on
November 10, 1999 in connection with the Merger. Dr. Vernon continues to be the
President and director of GoHealth.MD Inc., a Delaware corporation, which is
now operated as our wholly-owned subsidiary as a result of the Merger. Dr.
Vernon has managed and maintained a private practice of chiropractic for over
20 years. He is licensed to practice chiropractic in New Jersey, Delaware and
Pennsylvania.. From 1990 to 1999, Dr. Vernon was the President and Chairman of
Imaging Management Associates, Inc., a Colorado corporation, which operated
diagnostic imaging centers..

William D. Hanna became one of our directors and our vice president on
November 10, 1999 in connection with the Merger. Mr. Hanna continues to be a
director of GoHealth.MD Inc., a Delaware corporation, which is now operated as
our wholly-owned subsidiary as a result of the Merger. Mr. Hanna attended
Philadelphia Community College and has extensive experience in real estate and
site development. Previous to his retirement more than five years ago, Mr.
Hanna spent 20 years in the construction industry as a steel erector and owner
of his own business. In the past five years, Mr. Hanna has served as the chief
executive officer of a durable medical equipment company and has also been a
co-owner of a provider of discounted health care services.

Kevin O'Donnell became our Secretary on November 10, 1999 in connection
with the Merger. Mr. O'Donnell continues to be a director and secretary of
GoHealth.MD Inc., a Delaware corporation, which is now operated as our
wholly-owned subsidiary as a result of the Merger. Mr. O'Donnell is a 1976
graduate of Rutgers University (B.A. Political Science). From 1978 to 1990, he
was employed by Burlington Industries as an operations manager and then as
Northeast Regional Sales and Marketing Manager. From 1990 through 1998, Mr.
O'Donnell served as a Director and/or Director of Operations of Imaging
Management Associates, Inc, a Colorado corporation, which operated outpatient
diagnostic imaging centers.

Board of Directors

Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have qualified.
Officers are appointed to serve until the meeting of the Board of Directors
following the next annual meeting of stockholders and until their successors
have been elected and have qualified.

Section 16 Reporting

Our current directors did not timely file required Forms 3 after their
respective appointments on November 10, 1999, until December 28, 1999. Sandra
Vernon, the wife of one of our directors and our president, Dr. Leonard Vernon,
acquired more than 10% of our common stock in the GoHealth merger and filed a
Form 3 on December 28, 1999.

Based solely upon our review of Forms 3, 4 and 5 and amendments thereto
furnished to us under Rule 16a-3(a) since May 31, 1999, we are not aware of any
other person who was a director, officer, or beneficial owner of more than ten
percent of our common stock and who failed to file reports required by Section
16(a) of the Securities Exchange Act of 1934 in a timely manner.

Item 10. EXECUTIVE COMPENSATION.

The following tables set forth information with respect to the
compensation received for year ended December 31, 1999 by our President and our
other most highly compensated individuals. No compensation in excess of
$100,000 was awarded to, earned by, or paid to any executive officer or
director during the years ended December 31, 1999, 1998 or 1997.

Annual Compensation Long-Term
Compensation
Awards
Name and Principal Position Fiscal Year Salary Bonus Common Stock
Underlying
Options
Dr. Leonard Vernon, President 1999 -0-(1) -0- -0-
Tyson Schiff, President 1999 -0- $500(2) -0-
William Hanna,
Vice President 1999 -0- -0- 115,000(3)
Kevin O'Donnell, Secretary 1999 -0- -0- 115,000(3)

(1) Dr. Leonard Vernon has never received compensation for his services.
However, in the event our revenues exceed $1,000,000 or at the discretion of
the board of directors, Dr. Vernon will receive an annual salary of
approximately $145,000.

(2) In October 1998, Tyson Schiff received a $500 bonus for serving as our
president and director.

(3) Originally issued by GoHealth.MD Inc., the Delaware corporation, prior to
the Merger.

STOCK OPTIONS GRANTED IN 1999 FISCAL YEAR

Name Number of Shares Percent of Exercise Expiration
of Common Stock of Total options Price Date
underlying options granted to
granted employees

William Hanna 115,000 50% $0.50 2/23/06

Kevin O'Donnell 115,000 50% $0.50 2/23/06

Item 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information concerning ownership of
our common stock as of March 28, 2000. The table discloses each person known
to be the beneficial owner of more than five percent (5%) of our common stock.
The table also shows the stockholdings of our directors, as well as the shares
held by directors and executive officers as a group. The notes accompanying
the information in the table below are necessary for a complete understanding
of the figures provided.

Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial
Ownership

MCOM Management Corp. 608,000(1) 13.0%(2)
350 Fifth Avenue,
Suite 5807
New York, NY 10118

Michael Morfit 758,000(2) 16.2%
350 Fifth Avenue,
Suite 5807
New York, NY 10118

Sandra Vernon 2,000,000 47.2%
2051 Springdale Road
Cherry Hill, NJ 08003

William D. Hanna 615,000(3) 14.1%
2051 Springdale Road
Cherry Hill, NJ 08003

Dr. Leonard Vernon 2,000,000(4) 47.2%
2051 Springdale Road
Cherry Hill, NJ 08003

Kevin O'Donnell 615,000(5) 14.1%
2051 Springdale Road
Cherry Hill, NJ 08003

Executive Officers and
Directors as a Group 3,230,000 72.4%

(1) Includes 450,000 shares of our common stock which may be acquired upon the
exercise of outstanding warrants held by MCOM. MCOM is wholly owned by Michael
Morfit

(2) Includes 158,000 shares of our common stock and warrants to purchase
450,000 shares of our common stock held by MCOM Management Corp., which is
wholly owned by Michael Morfit. Also includes 100,000 shares of our common
stock held by MCM Stork Fund, L.P., which is managed by MCM Capital, L.L.C., a
limited liability company for which Michael Morfit is the managing member.

(3) Includes 115,000 shares of our common stock which may be acquired upon the
exercise of outstanding stock options held by Mr. Hanna.

(4) Includes 2,000,000 shares owned by Sandra Vernon, the wife of Dr. Leonard
Vernon. Dr. Vernon disclaims beneficial ownership of such shares.

(5) Includes 115,000 shares of our common stock which may be acquired upon the
exercise of outstanding stock options held by Mr. O'Donnell.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In 1983, Dr. Leonard Vernon one of our directors, our president and the
husband of Sandra Vernon, our largest shareholder, received a disciplinary
action by the New Jersey State Board of Medical Examiners in which he was given
an 18-month suspension of his license, 30 days of which were to be active with
a monetary penalty of $3000. Dr. Vernon failed to perform the required
community service and pay the fine and the suspension was imposed for a full 18
months. This disciplinary action was taken after the determination that Dr.
Vernon's application to the Educational Commission of Foreign Medical Graduates
was misleading. Dr. Vernon currently possesses an unrestricted license to
practice chiropractic in the New Jersey, Pennsylvania and Delaware and there is
no pending disciplinary action against him in any of the states in which he is
licensed.

On May 10, 1999, we rescinded a purchase and sale agreement with Imaging
Management Associates, Inc., a Colorado corporation, and an employment
agreement with Leonard F. Vernon, both dated December 9, 1998, due to Imaging
Management Associates, Inc.'s failure to satisfy a condition required for the
closing of the agreement of sale. Dr. Leonard F. Vernon, our current President,
was the President of Imaging Management Associates, Inc. at that time. Pursuant
to the rescission agreement, we agreed with Imaging Management Associates, Inc
and, Dr. Vernon to rescind and terminate ab initio the purchase and sale
agreement and the employment agreement, and all shares of our common stock
which were issued in contemplation of a closing of the transaction were return
to us and canceled.

Our offices are located at 2051 Springdale Road, Cherry Hill, New Jersey,
which also houses the offices of Able Imaging, Inc., a wholly owned entity of
William D. Hanna, one of our directors. We do not pay rent to Mr. Hanna for
such facilities.

We have obtained a total of $38,000 pursuant to three working capital
loans from William Hanna Consultants, Inc., an entity controlled by William
Hanna, one of our directors. All of these notes are unsecured, require all
interest and principal be repaid in one lump sum and bear 5% interest per
annum. A $25,000 April 26, 1999 Note was due to be repaid on May 26, 1999, and
was extended indefinitely. No additional consideration was tendered for this
indefinite extension. A $10,000 Note dated March 29, 1999, was repaid in full
on January 20, 2000. The interest on this Note was waived by Mr. Hanna. A
$3,000 Note dated May 2, 1999 matures on May 2, 2000. We have not made any
payments of interest or principal on the April 26, 1999 Note or the May 2, 1999
Note.

Ken Kurtz currently owns less than 5% of our outstanding common stock.
Prior to the November 10, 1999 Merger, however, he owned in excess of 50% of
the common stock. Mr. Kurtz received 400,000 shares pursuant to a November
30, 1998 consulting agreement with us whereby he agreed to assist in preparing
employment agreements, contracts and other filings required by the Commission
and all other necessary state and Federal regulatory bodies, and in referring
to us an independent auditor and attorney. All amounts owing to Mr. Kurtz have
been paid, all services have been rendered and the agreement is no longer in
effect.

According to a Financial Consulting Agreement us and Park Street
Investments, Inc. executed on March 5, 1998, Park Street assisted with our
administration and recapitalization. Park Street also agreed to actively
pursue and negotiate a merger or business combination with a third party on our
behalf. GoHealth.MD Inc., the Delaware corporation, was introduced to us
through the efforts of Mr. Kurtz and Park Street. Park Street paid all costs
associated with these responsibilities through the Merger. As part of this
consulting agreement, on June 22, 1998, for a $15,100 investment we issued
48,709 shares of common stock to a designee of Park Street -- First Avenue,
Ltd., a limited partnership organized under the laws of the State of Utah. Ken
Kurtz, being a general partner of First Avenue, Ltd. and the president of Park
Street, indirectly controls such shares. All amounts owing to Park Street have
been paid, all services have been rendered and the agreement is no longer in
effect.

PART IV

Item 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K.

A. Exhibits

The following is a list of exhibits filed as part of this annual report
on Form 10-KSB. Where so indicated by footnote, exhibits which were previously
filed are incorporated by reference. For exhibits incorporated by reference,
the location of the exhibit in the previous filing is indicated in parentheses.

EXHIBIT
NO. DESCRIPTION

2.1 Stock Exchange Agreement and Plan of Merger dated September 30,
1999, by and between Nugget Exploration, Inc., Nugget Holding
Company and GoHealth.MD, Inc.(1)

3.1 Articles of Incorporation of Nugget Exploration, Inc.(1)

3.2 By-Laws of Nugget Exploration, Inc.(1)

3.3 Articles of Incorporation of GoHealth.MD, Inc.(1)

3.4 By-Laws of GoHealth.MD, Inc.(1)

4.1 Management Consulting Agreement dated November 1999, by and between(1)
Nugget Exploration, Inc. and MCOM Management Corp.(1)

4.2 Stock Option Agreement dated August 27, 1999, by and between
GoHealth.MD, Inc. and Harvey Benn(1)

4.3 Stock Option Agreement dated August 27, 1999, by and between
GoHealth.MD, Inc. and Frank Gettson.(1)

4.4 Stock Option Agreement dated May 7, 1999, by and between GoHealth.MD,
Inc. and Millennium Consulting, Inc.(1)

4.5 Stock Option Agreement dated May 26, 1999, by and between GoHealth.MD,
Inc. and Gary Crooks (1)

4.6 Stock Option Agreement dated May 26, 1999, by and between GoHealth.MD,
Inc. and John Madden(1)

4.7 Stock Option Agreement dated June 12, 1999, by and between GoHealth.MD,
Inc. and J. Eric Kishbaugh(1)

4.8 Master Series A Warrant dated October 1, 1999, by and between Nugget
Exploration, Inc. and various entities as described in recent sales of
unregistered securities.(1)

4.9 Master Unit Warrant dated November 12, 1999, by and between GoHealth.MD,
Inc. and various entities as described in recent sales of unregistered
securities.(1)

10.1 $10,000 Note dated March 29, 1999, by and between GoHealth.MD, Inc. and
William Hanna Consultants, Inc.(1)

10.2 $25,000 Note dated April 26, 1999, by and between GoHealth.MD, Inc. and
William Hanna.(1)

10.3 $3,000 Note dated May 2, 1999, by and between GoHealth.MD, Inc. and
William Hanna Consultants, Inc.(1)

10.4 Contract of Sale dated April 26, 1999, and between GoHealth.MD, Inc. and
Robert H. Savar.(1)

10.5 Contract of Sale dated April 26, 1999, by and between GoHealth.MD, Inc.
and Computerized Professional Enrichment Services Contract of Sale.(1)

10.6 Independent Reseller Agreement dated March 22, 1999, by and between
GoHealth.MD, Inc. and Domain Name Trust, Inc.(1)

10.7 Agreement dated November 16, 1999, by and between GoHealth.MD, Inc. and
Domain Name Trust, Inc.(1)

10.8 Agreement dated May 5, 1999, by and between GoHealth.MD, Inc. and PR
Newswire.(1)

10.9 Agreement dated December 13, 1999, by and between GoHealth.MD, Inc. and
Company X t/a James Corea's Vita-Labs.(1)

10.10 Consulting Agreement dated August 23, 1999, by and between GoHealth.MD,
Inc. and Frank Gettson.(1)

10.11 Consulting Agreement dated August 23, 1999, by and between GoHealth.MD,
Inc. and Harvey Benn.(1)

10.12 Consulting Agreement dated November 30, 1998 by and between Nugget
Exploration, Inc. and Ken W. Kurtz.(1)

10.13 Financial Consulting Agreement dated March 5, 1998, by and between
Nugget Exploration, Inc. and Park Street Investments, Inc.(1)

10.14 Rescission Agreement and Release of Claims dated May 10, 1999 between
and among Nugget Exploration, Inc., Imaging Management Associates, Inc.
and Leonard F. Vernon. (2)

21.1 List of subsidiaries (1)

27.1 Financial Data Schedule

(1)Previously filed with the Registration Statement of the Company on Form
SB-2, Registration No. 333-94695 and incorporated herein by reference.

(2)Previously filed with the Form 10-QSB of the Company for the quarterly
period ended February 28, 1999 and incorporated herein by reference.

B.Reports on Form 8-K

On December 17, 1999, we filed a Form 8-K, reporting Items 1, 2, 4
and including financial statements.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on this 28th day of March, 2000

GOHEALTH.MD, INC.

By: /s/ Leonard F. Vernon
Leonard F. Vernon, President

Pursuant to the requirements of the Securities Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

Signature Title Date

/s/ Leonard F. Vernon President,Director March 28, 2000
Leonard F. Vernon (chief executive officer
and principal financial
accounting officer)

/s/ William Hanna Vice President, Assistant
William Hanna Secretary, Director March 28, 2000

GoHealth.MD Inc.
INDEX TO FINANCIAL STATEMENTS

Report of Independent Public Accountants

Balance Sheet

Statement of Operations

Statement of Stockholders' Equity (Deficit)

Statement of Cash Flows

Notes to Financial Statements

INDEX TO EXHIBITS*

*Only exhibits actually filed are listed. Exhibits incorporated by
reference are set forth in the exhibit listing in Item 13 on the Report on
Form 10-KSB

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of
GoHealth.MD, Inc.
(A Development Stage Company)
Cherry Hill, New Jersey 08003

We have audited the accompanying consolidated balance sheet of GoHealth.MD,
Inc. (A Development Stage Company) (formerly Nugget Exploration, Inc.) as of
December 31, 1999 and the related statements of operations, stockholders'
equity and cash flows for the period from inception (February 23, 1999) to
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GoHealth.MD, Inc. (A
Development Stage Company) as of December 31, 1999 and the results of its
operations and its cash flows for the initial period then ended in conformity
with generally accepted accounting principles.

SAMUEL KLEIN AND COMPANY

Newark, New Jersey
March 28, 2000

GOHEALTH.MD, INC.
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1999

ASSETS

Current Assets:
Cash $ 38,791
Accounts receivable 48
Subscription receivable 269,500
Prepaid expenses 3,800
Domain names - available for sale 38,834
-------
Total Current Assets 350,973
-------
Furniture and equipment, net of accumulated
depreciation of $1,488 4,521
-------
Other Assets:
Deposits 5,500
Website costs 60,900
------
Total Other Assets 66,400
------
TOTAL ASSETS $ 421,894
=======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Notes payable $ 45,380
Accounts payable 66,042
Accrued expenses 9,694
Accrued interest payable 9,614
Due to former officer 1,340
Due to officer 21,622
-------
Total Liabilities 153,692
-------
Stockholders' Equity:
Common stock ($.01 par value, 25,000,000 shares
authorized, 4,149,117 shares issued and outstanding) 41,491
Additional paid-in capital 3,214,594
Unamortized consulting expenses, net of accumulated
amortization of $316,667 (1,583,333)
Retained earnings (deficit) (1,404,550)
---------
Total Stockholders' Equity 268,202
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 421,894
=========

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

F-3GOHEALTH.MD, INC.
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE PERIOD FROM INCEPTION (FEBRUARY 23, 1999)

TO DECEMBER 31, 1999

Sales:
Advertising revenue $ 80
Domain name sales 1,300
Cost of Sales (910)
----
Gross Profit 470
----
Other Expenses:
General and administrative expenses 87,894
Marketing and licensing fees 18,988
Website costs 40,660
Advertising and promotion 115,876
Consulting fees 331,867
Interest expense 1,235
-------
596,520
-------
Net Loss (596,050)

Beneficial Conversion Feature of Warrants 808,500
-------
Net Loss on Common Stock $(1,404,550)
=========
Loss per Share:
Basic loss per share $(.34)
====
Diluted loss per share $(.34)
====
Basic common shares outstanding 4,149,117
=========
Diluted common shares outstanding 4,149,117
=========

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

GOHEALTH.MD, INC.
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM INCEPTION (FEBRUARY 23, 1999)

TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated
$.01 Par Value Additional Unamortized During the Total
Number Paid-In Consulting Development Stockholders'
of Shares Amount Capital Expense Stage Equity
<S> <C> <C> <C> <C>
At Inception on February 23, 1999 $ $ $ $ $

Issuance of Common Stock at $.01 per share 3,000,000 30,000 (27,000) 3,000

Issuance of Shares and Warrants in Private
Placement 96,000 960 247,640 248,600
Issuance of Shares and Warrants for Services 4,000 40 10,360 10,400

Issuance of Common Stock in Connection
with Reverse Merger 697,117 6,971 (46,046) (39,075)

Issuance of Common Stock and Warrants in
Connection with Consulting Agreement 300,000 3,000 1,897,000 (1,900,000) -

Issuance of Common Stock and Warrants
for Services 2,000 20 5,180 5,200

Exercise of Warrants 50,000 500 49,460 49,960

Subscription Receivable on Sale of
"Series A" Warrants 269,500 269,500

Net Loss on Common Stock for the Period from
Inception February 23, 1999 to December 31, 1999 316,667 (1,404,550) (1,087,883)

Beneficial Conversion Feature of Warrants 808,500 808,500
--------- ------ --------- --------- --------- -------
4,149,117 $ 41,491 $3,214,594 $(1,583,333) $(1,404,550) $ 268,202
========= ====== ========= ========= ========= =======

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

</TABLE>

GOHEALTH.MD, INC.
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM INCEPTION (FEBRUARY 23, 1999)

TO DECEMBER 31, 1999

Cash Flows from Operating Activities:
Net loss on common stock $(1,404,550)
Adjustment to reconcile net loss to net cash
used in operating activities:
Amortization 316,667
Depreciation 1,488
Beneficial Conversion Feature 808,500
Changes in assets and liabilities:
Increase in accounts receivable (48)
Increase in prepaid expenses (3,800)
Increase in deposits (5,500)
Increase in Domain names - available for sale (38,834)
Increase in accounts payable 66,042
Increase in accrued interest payable 9,614
Increase in accrued expenses 9,694
----------
Net cash used in operating activities (240,727)
----------
Cash Flows from Investing Activities:
Purchase of website (45,300)
Purchase of furniture and equipment (6,009)
Cost of acquisition net of cash acquired (39,075)
------
Net cash used in investing activities (90,384)
------
Cash Flows from Financing Activities:
Proceeds from sale of common stock and stock warrants 301,560
Proceeds of notes payable 45,380
Proceeds from officers loans 22,962
-------
Net cash provided by investing activities 369,902
-------
Net Increase in Cash 38,791

Cash - Inception (February 23, 1999) -

Cash - End of Period (December 31, 1999) $ 38,791
======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
======
Taxes $ -
======

Supplemental Disclosure of Noncash Investing
and Financing Activities:
Issuance of common stock and warrants for
services $ 15,600
======

Series A warrants subscribed for $269,500
-------

Acquisition:
Notes payable assumed $ (7,380)
Liabilities assumed, net of cash (30,355)
Loans from officers (1,340)
-------
Cost of acquisition, net of cash acquired $(39,075)
======

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

GOHEALTH.MD, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1999

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

GoHealth.MD, Inc. ( "GoHealth" or "Company"), a development stage company, was
incorporated under the laws of the State of Delaware on February 23, 1999.
GoHealth.MD, Inc. will be engaged in providing through the Internet an
advertising network and Internet presence for independently-owned health food
stores, health care providers and others.

On November 10, 1999, GoHealth and Nugget Exploration, Inc. (collectively with
its subsidiaries herein referred to as "Nugget") completed a planned Stock
Exchange Agreement and Plan of Merger. Under the terms of the agreement,
GoHealth became a wholly owned subsidiary of Nugget and a wholly owned
subsidiary of Nugget merged with and into GoHealth.The stockholders of
GoHealth received one share of common stock of Nugget for each share of
GoHealth common stock held, resulting in the current stockholders of GoHealth
owning approximately 81% of Nugget common stock.

The merger was accounted for as a purchase. However, since the stockholders of
GoHealth will own approximately 81% of Nugget outstanding shares, and therefore
have control, they will be deemed to be the acquirer and no step up in basis
will be reflected and no goodwill will be recorded by the company.

Principles of Consolidation

The accompanying financial statements as of December 31, 1999 and for the
period then ended consolidate the accounts of the parent company and its
wholly-owned subsidiary. All significant intercompany accounts and
transactions have been eliminated in consolidation. The financial statements
include the results of operations of Nugget since November 10, 1999.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents.

Revenue Recognition

The Company's revenues will be derived principally from advertising, content
syndication, electronic commerce and the sale of domain names.

Domain Names - Available for Sale

Domain name - available for sale, are stated at the lower of cost or market,
consists of specific domain names purchased and are valued at the purchase
price. When a domain name is sold, the purchase price for that specific name
is removed at cost.

Use of Management's Estimates

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

Impairment of Long-Lived Assets

The Company adopted Statement of Financial Accounting Standards No. 121 (SFAS
121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of". SFAS 121 requires that if facts and circumstances
indicate that the cost of fixed assets or other assets may be impaired, an
evaluation of recoverability would be performed by comparing the estimated
future undiscounted pre-tax cash flows associated with the asset to the asset's
carrying value to determine if a write-down to market value or discounted
pre-tax cash flow value would be required.

Advertising and Promotional Costs

Advertising expenditures of the Company's programs and services are expensed in
the period the advertising costs are incurred. Advertising and promotional
costs for the period from inception (February 23, 1999) to December 31, 1999
were $115,876.

Comprehensive Income

The Company adopted Statement of Financial Accounting Standards No. 130, (SFAS
130) "Reporting Comprehensive Income". This statement establishes rules for
the reporting of comprehensive income and its components which require that
certain items such as foreign currency translation adjustments, unrealized
gains and losses on certain investments in debt and equity securities, minimum
pension liability adjustments and unearned compensation expense related to
stock issuances to employees be presented as separate components of
stockholders' equity. The adoption of SFAS 130 had no impact on total
stockholders' equity for the period presented in these financial statements.

Start-Up Activities

The American Institute of Certified Public Accountants recently issued
Statement of Position ("SOP") 98-5, "Reporting the Costs of Start-Up
Activities." SOP 98-5 requires start-up costs, as defined, to be expensed as
incurred and is effective for financial statements for fiscal years after
December 15, 1998. The Company currently expenses all start-up costs as
incurred and the application of SOP 98-5 will have no material impact on the
Company's financial statements.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board Opinion No. 25,
(APB 25) "Accounting for Stock Issued to Employees" in accounting for its
employee stock option plans. Under APB 25, when the exercise price of the
Company's employee stock options equals or is above the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

In accounting for options granted to persons other than employees, the
provisions of Financial Accounting Standards Board Statement No. 123, (FASB
123) "Accounting for Stock Based Compensation" are applied in accordance with
FASB 123 at the fair value of these options.

Earnings (Loss) Per Share

The Company calculates earnings per share in accordance with SFAS No. 128,
"Computation of Earnings Per Share" and SEC Staff Accounting Bulletin No. 98.
Accordingly, basic earnings per share is computed using the weighted average
number of common and dilutive common equivalent shares outstanding during the
period. Common equivalent shares consist of the incremental common shares
issuable upon the conversion of the Preferred Stock (using the if-converted
method) and shares issuable upon the exercise of stock options (using the
treasury stock method); common equivalent shares are excluded from the
calculation if their effect is anti-dilutive.

Income Taxes

The Company follows Statement of Financial Accounting Standards No. 109, (SFAS
109) "Accounting for Income Taxes". SFAS 109 requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined based on
the difference between the financial statement carrying amounts and tax bases
of assets and liabilities using enacted tax rates in effect in the years in
which the differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.

2. PLAN OF OPERATIONS

For the year ended December 31, 1999, the Company had not conducted any
significant business. Because of this lack of prior operations, assets and
industry position, the Company must be considered a development stage company.
Consequently, there can be no assurance that viable commercial operations can
be achieved or sustained even if the Company is successful in raising all the
capital that it requires.

The principal business is operating Healthmall.com, an Internet-based consumer
healthcare network consisting of a consumer-focused interactive website and
affiliate relationships with certain other websites. In November 1999, the
Company changed the principal focus of business strategy from registration and
marketing of .MD domain names to operating the healthcare websites. The
Company intends to derive revenues by providing advertising on their website
and through affiliations with other entities.

The website, www.Healthmall.com, which was launched in November 1999, currently
has a focus on alternative healthcare with the following components:

healthcare content on a wide variety of subjects, including
information on acute ailments, chronic illnesses, nutrition,
fitness and wellness, as well as alternative healthcare;

access to healthcare practitioner databases including
chiropractors, massage therapists, naturopathic physicians, and
medical physicians;

an interactive chat room; and

tools that permit users to personalize their on-line experience.

The Company's overall plan calls for the development of network affiliates,
such as health and fitness websites to provide easy access to the information
and services offered on www.Healthmall.com to their respective customers. The
Company has only established two network affiliates to date.

The Company also provides Internet related services directed to healthcare
practitioners. To date these services have focused on chiropractors, massage
thereapists and naturopathic physicians. These services include the following:

developing websites;

providing a directory of healthcare practitioners on the
Healthmall.com website; and

registering of .MD domain names.

The Company plans to establish Healthmall.com and other websites as a trusted
and comprehensive source of consumer healthcare information and services on the
Internet. Healthmall.com. was created to empower consumers to better manage
their personal health with comprehensive, relevant and timely information. The
Company's business model is to earn advertising and subscription revenues from
advertisers, merchants, manufacturers and healthcare providers who desire to
reach a highly targeted community of healthcare consumers on the Internet.

The Company's strategy incorporates the following key elements:

provide consumers with high quality healthcare content to attract
users to www.Healthmall.com, and promote their loyalty to the
website;

syndicate content through affiliates to promote traffic growth;

develop and expand on-line healthcare communities to allow users
with similar health-related experiences to exchange information
and gather news and knowledge in a secure, anonymous environment;

provide consumers with unique features and tools; and

provide an attractive and useful website that can deliver
advertising in a highly targeted manner, thereby commanding
higher advertising rates.

In order to grow operations and increase revenue, the Company needs to incur
significant advertising and promotional expenses and the Company plans to hire
additional personnel in all phases of their operation, particularly in order to
further implement their primary operating strategy of generating revenue from:

advertising;

content syndication; and

electronic commerce.

There can be no assurance that the Company will have the resources to increase
their advertising and promotional expenses or to hire the necessary personnel
and managers in order to achieve growth in operations and revenues, and any
failure to do so could have a material adverse effect on operating results.

In addition, the Company's strategy relies on their ability to raise further
capital and upon the skills of their management. There can be no assurance
that they will be successful in these endeavors. Forces that can contribute to
the lack of success in implementing this growth strategy include, among other
things: (i) regulatory bodies and governmental regulations affecting the
Company's operations, (ii) availability of funding on a timely basis, and (iii)
functionality. If the Company's ability to expand their network infrastructure
is constrained in any way they could lose customers and suffer damage to their
operating results.

The Company has a very limited operating history on which to base an evaluation
of their business and prospects. Their prospects must be considered in light
of the risks uncertainties, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies in new
evolving markets such as the Internet market.

In order to continue to finance operations, the Company will need to receive
funds from the exercise of outstanding warrants and options or through other
equity or debt financing. There can be no assurance that the Company will
receive any proceeds from the exercise of warrants or options or that the
Company will be able to obtain the necessary funds to fund its operations.

3. NOTES PAYABLE

The following is a summary of the Company's notes payable at December 31, 1999:

Payable to William Hanna on demand, with interest accrued
at 5% per annum, unsecured $25,000

Payable to William Hanna Consultants on March 29, 2000,
with interest accrued at 5% per annum, unsecured, this was
repaid in full on January 20, 2000 10,000

Payable to William Hanna Consultants on May 2, 2000, with
interest accrued at 5% per annum, unsecured 3,000

Demand Note Payable to an individual, 9%, unsecured 2,290

Demand Note Payable to an individual, 9%, unsecured 5,090

$45,380
======
4. DUE TO OFFICER

As of December 31, 1999, the Company is indebted to an officer in the amount of
$21,622. This is a noninterest bearing loan payable on demand.

5. PROVISION FOR INCOME TAXES

For the period from inception (February 23, 1999) to December 31, 1999, the
Company had a loss on common stock of $1,449,550. No tax expense or benefit
has been reported in the financial statements due to the uncertainty of future
operations.

6. COMMON STOCK

The authorized capital stock of the Company consists of 25,000,000 shares of
Common Stock, par value $.01 per share.

The Company issued 3,000,000 shares of Common Stock to the incorporators of the
Company for $3,000.

The Company offered a total of 500 Units at a price of $5,200 per Unit, which
were offered on a "best efforts, all or none" basis with respect to the first
20 units of the Company's Common Stock and a detachable warrant entitling the
holder to purchase 2,000 shares of Common Stock. The Company conducted the
Offering in such a manner that the Shares will be sold only to certain
Accredited Investors as such term is defined in Rule 501 of Regulation D under
the Act, and to not more than 35 other nonaccredited investors, and who satisfy
any additional requirements of their state of residency. The pricing and the
terms of the securities have been arbitrarily determined by the Company and
bear no relationship to the Company's assets, book value or results of
operations or any other generally accepted criteria of value. The Units are
being offered and sold exclusively through the Company by its Officers, as well
as the selected dealers, if any, and their officers, directors and employees
may purchase the Units on the same terms and conditions as other investors.

The minimum subscription price to investors was for $10,400 for 2 units. The
Company had the discretion to accept subscription offers for lesser amounts if
deemed to be in the Company's best interest and insofar as permitted by law.

Each Unit Warrant entitled the registered holder thereof to purchase up to
2,000 shares of Common Stock at a price of $2.50 per share (subject to
adjustment as described herein) at any time prior to the earlier of (i) May 31,
2003 or (ii) the date that the respective Unit Warrant is redeemed. If the
Company is able to complete an initial public offering ("IPO") of the Common
Stock, then beginning 12 months after the IPO, the Unit Warrants will be
subject to redemption by the Company at $0.10 per share of the Common Stock
that remains, subject each Unit Warrant on thirty (30) days prior written
notice if the average closing sales price of the Common Stock over any 10
consecutive trading days equals or exceeds 150% of the IPO price per share of
Common Stock.

During 1999 and in connection with the private placement, the Company issued
96,000 shares of its Common Stock and 96,000 detachable Warrants and received
proceeds of $249,600.

Also, during 1999, the Company issued 4,000 Shares and 4,000 Warrants in
connection with a website purchase and valued these services at $10,400. The
Company also issued 2,000 shares and 2,000 warrants for consulting services
valued at $5,200.

On November 16, 1999 the Company entered into a management consulting agreement
with MCOM Management Corp. ("MCOM") for management consulting, strategic
planning and marketing and advisor services. The agreement requires the Company
to compensate the management consulting company $5,000 per month through
October 2000, issue to the consultant 300,000 shares of its common stock and
requires the Company to issue warrants to the consultant to purchase 500,000
shares of the Company's common stock at exercise prices of $1.00 for the first
100,000 shares and $2.00 per share for the next 400,000 shares.

In connection with this transaction, the Company recorded an expense of
$1,050,000 for the 300,000 shares granted, the market value of the company's
common stock at the date of the agreement, and $850,000 for the intrinsic value
of the warrants to purchase 500,000 shares of the Company's common stock.

On December 13, 1999, 50,000 of the $1.00 warrants were exercised and the
Company issued 50,000 shares of its common stock and received proceeds of
$50,000.

On December 22, 1999, the Company issued, in connection with a private
placement offering, Series A warrants to purchase 269,500 shares of its common
stock at an exercise price of $1.00 per share until December 31, 2002. The
warrants were sold for $1.00 per common stock purchase warrants and resulted in
the Company receiving subscriptions totaling $269,500. The market price of the
Company's common stock at December 22, 1999 was $5.00 per share and created a
beneficial conversion feature to the warrant holders amounting to $3.00 per
warrant. As a result of this transaction, the Company recorded $808,500 as a
charge in computing net loss on common stock.

From January 1 to January 11, 2000, the Company sold 110,000 additional Series
A warrants in connection with their private placement. This included 75,000
warrants purchased by MCOM on January 10, 2000. The total Series A warrants
sold amounted to $379,500, all of which was received during the first quarter
of 2000. In addition, $90,000 Series A warrants were exercised during the
first quarter of 2000. The Company will record an estimated $330,000 charge to
common stock in fiscal year 2000 as a result of the beneficial conversion
feature to the purchasers of the additional 110,000 Series A warrants.

7. COMMITMENTS AND CONTINGENCIES

Employee Stock Options

The Company has reserved a total of 500,000 shares of its Common Stock for
grants of stock options to employees. A total of 230,000 options with an
exercise price of $.50 per share with terms expiring seven (7) years from the
respective dates of the grant have been granted to two employees as of December
31, 1999. All future grants are to have an exercise price above $1.50 per
share.

Other Stock Options

On May 6, 1999 the Company granted 30,000 options to a consulting firm at an
exercise price of $.50 per share. These options have no expiration date and
contain two piggyback registration rights.

On May 26, 1999 the Company granted 10,000 options to investment banking
consultants at exercise prices of $.50 per share for 5,000 options and $1.00
for 5,000 options. These options contain piggyback registration rights.

On August 27, 1999 the Company granted 20,000 options to a professional
consultant. The options, which include piggyback registration rights, are
exercisable 10,000 at an exercise price of $1.00 and 10,000 at an exercise
price of $1.50.

In August 1999 the Company granted to two consultants nonqualified stock
options for the right to purchase 175,000 shares of the Company's Common Stock.
The options have an exercise price of $1.00 and expire on July 2009 and contain
piggyback registrations rights.

The fair value of these other stock options were estimated according to FASB
123 at the grant dates using the Black Scholes option pricing model and were
determined to be immaterial.

Government Regulation

The Company is subject to local state and federal laws of the jurisdiction that
it operates in. The Company also believes that it will be subject to all
jurisdictions of its participants and clients.

Litigation

The Company is not a party to any litigation, nor is the management aware of
any. is any viable litigation currently threatened against the Company or any
of its officers or directors in their capacity as such.

Employment Agreements

The current officers and directors of the Company have entered into agreements
with the Company that state that they will forego salaries until the Company's
revenues exceed $1,000,000 or at the discretion of the Board of Directors.

8. SUBSEQUENT EVENTS

On February 4, 2000, the Company granted to a consultant an option to purchase
100,000 shares of its common stock at an exercise price of $1.00 until December
31, 2001.

On January 24, 2000, the Company entered into an agreement and acquired the
right, title and interest to the Healthsites.com domain name. The Company
acquired these assets for the purchase price of $20,000, the issuance of 50,000
shares of its common stock valued at approximately $200,000 and the issuance of
an option valued at approximately $200,000, to purchase 100,000 shares at a
price of $2.00 per share until August 27, 2009.

On March 10, 2000 the Company entered into a one year consulting agreement
whereby the consultant has agreed to provide the company with the following
services:

(i) develop prospects, schedule meetings, assist in negotiation of
contracts with health related companies; (ii) provide strategic marketing and
sales expertise; (iii) assist in raising capital; (iv) consult on corporate
planning and growth; and (v) assist in identifying suitable candidates for our
management team.

In connection with this agreement, the Company will issue 10,000 shares of
its common stock and a warrant to purchase 100,000 shares of common stock at
$1.50 per share until March 10, 2005

[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-END] DEC-31-1999
[CASH] 38,791
[SECURITIES] 0
[RECEIVABLES] 48
[ALLOWANCES] 0
[INVENTORY] 38,834
[CURRENT-ASSETS] 350,973
[PP&E] 6,009
[DEPRECIATION] 1,488
[TOTAL-ASSETS] 421,894
[CURRENT-LIABILITIES] 153,692
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 41,491
[OTHER-SE] 226,711
[TOTAL-LIABILITY-AND-EQUITY] 421,894
[SALES] 1,380
[TOTAL-REVENUES] 1,380
[CGS] 910
[TOTAL-COSTS] 595,285
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 1,235
[INCOME-PRETAX] (596,050)
[INCOME-TAX] 0
[INCOME-CONTINUING] (596,050)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (1,404,550)
[EPS-BASIC] (.34)
[EPS-DILUTED] (.34)
</TABLE>