_________

^_________

At March 31, 2004, the Company had 2,000,000 outstanding options, 425,000 outstanding warrants, notes payable convertible into 588,346 shares, 2,213,345 shares issuable as collateral on notes payable and preferred stock convertible into 11,382,575 shares of common stock which were not used in the computation of dilutive loss per share because their effect would be anti-dilutive.  At March 31, 2003, the Company had 2,020,000 outstanding options, 300,000 outstanding warrants and preferred stock convertible into 13,000,000 shares of common stock which were not used in the computation of dilutive loss per share because their effect would be anti-dilutive.  Dilutive loss per share was not presented, as the Company had no common stock equivalent shares for all periods presented that would effect the computation of diluted loss per share.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Potential Stock Issuances - The Company has signed notes payable totaling $203,845 which call for the Company to issue 2,213,345 shares of common stock as collateral; however, none of the shares had been issued at March 31, 2004.

Consulting Agreement - On April 1, 2002, the Company signed three-year consulting agreements with both Synergistic Connections, Inc. and Corporate Dynamics, Inc. (collectively “Consultants”).  The agreements call for the Company to pay $10,000 per month for consulting services.  In August 2002, the Company issued 480,000 shares of common stock to Consultants for services valued at $120,000 [See Note 9].  During the three months ended March 31, 2004 and 2003, the services rendered by Consultants under these agreements amounted to $0 and $30,000, respectively.

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AMERICAN HOSPITAL RESOURCES, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 14 - COMMITMENTS AND CONTINGENCIES [Continued]

Equity Line of Credit Agreement - On November 4, 2002, the Company signed an Equity Line of Credit Agreement with Cornell Capital Partners, LP (“Cornell”).  The agreement calls for the Company to sell up to $10,000,000 of common stock to Cornell at 95% of the closing bid price for the five preceding trading days.  The agreement requires that the shares of common stock be registered with the Securities and Exchange Commission and that the shares be sold in intervals over a two-year period commencing after such registration is effective.  The agreement also states that, at the time of each stock sale transaction, the Company will pay $500 in legal fees and pay Cornell 7% of the proceeds received.  In 2003, the Company issued 1,200,000 shares of common stock as payment of a commitment fee of $290,000 and paid $10,000 in legal fees which are classified as deferred stock offering costs.  The Company also paid $757,000 to consultants who negotiated the agreement which are also classified as deferred stock offering costs [See Below].  At March 31, 2004, the Company had deferred stock offering costs totaling $1,069,609 consisting of $767,000 in consulting fees, a $290,000 commitment fee and $12,609 in legal fees.  At March 31, 2004, no shares had been sold under this agreement.

Financing Agreements - In March 2003, the Company retained Douglas A. Jackson to negotiate a 5-year $6,000,000 loan for the Company.  The Company agreed to pay $12,500 plus 5% of the proceeds received by the Company.  During the three months ended March 31, 2004 and 2003, respectively, the Company paid $0 and $12,500 for services rendered by Douglas A. Jackson under this agreement.

In February 2003, the Company retained Douglas A. Jackson to negotiate a line of credit for the Company.  The Company agreed to pay $5,000 plus 5% of the proceeds received by the Company.  During the three months ended March 31, 2004 and 2003, respectively, the Company paid $0 and $5,000 for services rendered by Douglas A. Jackson under this agreement.

Finder Agreements - On April 1, 2002, the Company signed three-year finder agreements with both Synergistic Connections, Inc. and Corporate Dynamics, Inc. (collectively “Consultants”).  The agreements call for the Company to pay finders’ fees of 10% of the first $3,000,000, 8% of the next $3,000,000, 6% of the next $3,000,000, and 4% of any additional funding provided through the efforts of Consultants.  In October 2002, the Company sold 200,000 shares of common stock for cash of $50,000 which was negotiated by Consultants and the Company recorded stock offering costs of $5,000 which were offset against the proceeds [See Note 9].  In December 2002, the Company signed a $10,000,000 Equity Line of Credit Agreement which was negotiated by Consultants and the Company recorded stock offering costs of $757,000 which are classified as deferred stock offering costs [See above].  In February 2003, the Company sold 40,000 shares of common stock for cash of $10,000 which was negotiated by Consultants and the Company recorded stock offering costs of $400 which were offset against the proceeds [See Note 9].  From August 2003 through March 2004, the Company signed notes payable with proceeds totaling $203,845 which were negotiated by Consultants and the Company recorded loan costs totaling $21,240 which have been deferred and are being amortized over the term of the related note [See Note 7].  In March 2004, the Company sold 8,108 shares of Class A preferred stock for cash of $15,000 which was negotiated by Consultants and the Company recorded stock offering costs of $1,563 which were offset against the proceeds [See Note 8].

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AMERICAN HOSPITAL RESOURCES, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 14 - COMMITMENTS AND CONTINGENCIES [Continued]

In March 2004, the Company signed an agreement with GunnAllen Financial (“GAF”) wherein the Company agreed to pay GAF 1-7% of any proceeds received by the Company depending upon the nature of the financing.  The agreement also provides for the issuance of warrants to GAF with similar terms as those issued in financing transactions.

Judgment and Share Cancellation - In February 2004, a shareholder of the Company filed a written stipulation for final judgment in which the shareholder sought to have certificates representing the following shares cancelled for lack of consideration: 6,250,000 shares of common stock for an anticipated financing agreement, 600,000 shares of Class B preferred stock for the proposed acquisition of RXS, 1,000,000 shares of common stock for the proposed acquisition of Coastalmed and 671,824 shares of common stock and 78,760 shares of Class A preferred stock for the acquisition of AHR Subsidiary.  The shareholder also sought to cancel the Purchase and Sale Agreement with Gaelic and to cancel 75,000 warrants to purchase common stock which had been issued to the Company’s former Chief Executive Officer.  In February 2004, the court entered a judgment against the Company and ordered that the Company cancel all the shares, the agreement and all the warrants listed in the filing.  As a result of these proceedings, the Company cancelled certificates representing 7,921,824 shares of common stock, certificates representing 78,760 shares of Class A preferred stock, certificates representing 600,000 shares of Class B preferred stock and 75,000 warrants to purchase common stock, and the Company was released as a defendant.  The financial statements reflect the stock, agreement and warrants as having been cancelled in 2003.

Possible Legal Action - In March 2003, the Company was notified that Pre-Employment Screening, Inc., Lawrence J. Altman, Gateway Legal Services, Inc. and Fun Services of Kansas City plan to file suit to seek $12,000 for alleged violations of the Telephone Consumer Protection Act.  As of March 31, 2004, the Company has not been formally served and no legal actions have commenced.  The Company denies the allegations and intends to vigorously defend themselves in this matter.  No accrual for possible losses or settlements has been recorded in the accompanying financial statements.

Judgment and Voiding of NIPSI Acquisition - In March 2003, the Company was notified that it was to be joined as defendants in a suit brought by AmeriSource Bergen Corporation (”AmeriSource”) against NIPSI.  The original suit by AmeriSource sought to recover $480,335 from NIPSI for failing to honor a contract.  In March 2003, AmeriSource filed a supplemental petition to enjoin any transfer of assets from NIPSI to the Company.  In April 2003, the court entered a default judgment against NIPSI.  The court found that NIPSI had fraudulently transferred assets to the Company to avoid the claims of AmeriSource.  The court voided and nullified the transfer of assets from NIPSI to the Company and ordered NIPSI to pay $551,264 to AmeriSource.  As a result of these proceedings, the asset purchase agreement between the Company, NIPSI and NIPSI General Partner was voided and the Company was released as a defendant.  The financial statements reflect the acquisition as having been voided or rescinded and any expenses associated with the voided acquisition have been classified as costs of the unsuccessful NIPSI acquisition.

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AMERICAN HOSPITAL RESOURCES, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 14 - COMMITMENTS AND CONTINGENCIES [Continued]

NIPSI Demand Letter - In March 2003, NIPSI and NIPSI General Partner sent a demand letter to the Company to rescind the asset purchase agreement with the Company because certain conditions of the agreement were not satisfied.  NIPSI General Partner claimed damages of $120,000 against the Company.  The financial statements reflect the acquisition as having been voided or rescinded and the expenses associated with the voided acquisition have been classified as costs of the unsuccessful NIPSI acquisition.  The Company is not currently named in, nor is it aware of, any such suit or legal action against the Company.  No accrual for possible losses or settlements, including the $120,000 in damages claimed by NIPSI General Partner, has been recorded in the accompanying financial statements.  The Company’s management believes that the Company would be successful in defending against any such claims.

Possible NIPSI Claims - For approximately three months, the Company operated the assets of NIPSI pursuant to an asset purchase agreement [See Note 3 and above].  The Company’s management believes that the Company is not responsible for any liabilities of NIPSI, but the possibility exists that creditors and others seeking relief from NIPSI may also include the Company in claims and suits based on the previous relationship.  The Company is not currently named in, nor is it aware of, any such claims or suits against NIPSI.  The Company’s management believes that the Company would be successful in defending against any such claims.  No accrual for possible losses or settlements has been recorded in the accompanying financial statements.  As further disclosed above, NIPSI General Partner is claiming damages of $120,000 against the Company.

Management Agreement - In March 2004, the Company signed a Management Agreement with Judah Feigenbaum (“JF”) to act as an agent of the Company through July 15, 2004.  The agreement calls for the Company to pay $24,000 plus 3% of the consideration of any pharmacy acquisitions completed through March 2005.

NOTE 15 - SUBSEQUENT EVENTS

Proposed Stock Offering - The Company is proposing to sell up to $10,000,000 of its previously authorized but unissued common stock through an Equity Line of Credit Agreement [See Notes 9 and 14].

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General

American Hospital Resources, Inc. (“AMHR” or the “Company”) originally incorporated in the State of Utah on May 9, 1972, under the name High-Line Investment & Development Company.  In 1977, the Company changed its name to Gayle Industries, Inc.  In 1978 the Company merged into its subsidiary, Swing Bike, keeping the Swing Bike name.  In 1979 the Company changed its name from Swing Bike to Horizon Energy Corp.  In 1992 the Company changed its name to Millennium Entertainment Corp.  

In 1993 the Company changed its name to New Horizon Education, Inc. and began focusing on marketing computer education programs.  The Company was not successful and in 1995 the Company sold its assets and suspended operations.  The Company remained essentially dormant from 1998 through 2000.  

In 2001, the Company recommenced operations and in June of 2002, finalized an Agreement and Plan of Reorganization with American Hospital Resources, Inc., a Delaware corporation founded on August 27, 1999.  Under the Agreement, American Hospital Resources Inc. became a wholly owned subsidiary of the Company and the Company changed its name from New Horizon Education, Inc. to American Hospital Resources, Inc.  The Company also authorized a class of 10,000,000 shares of Preferred Stock at no par value per share and changed its business strategy to focus on providing health care consulting and pharmaceutical outsourcing.  

The Company’s common stock is quoted on the OTCBB under the symbol “AMHR.”  

Nature of Business

American Hospital Resources provided consulting and management services hospitals and other acute care facilities.  On December 22, 2003 we discontinued our hospital management consulting business. The Company’s board of directors determined that the Company had not realized the expected benefits from the acquisition of AHR subsidiary and made the determination to seek to dispose of AHR subsidiary. As a result the Company repurchased 2,131,249 shares of common stock for $85,250 and obtained a court order to cancel the remaining 1,065,624 shares that were issued to AHR pursuant to the terms of the Reorganization agreement. AHR has since discontinued operations and has been dissolved by the State of Delaware.  All operations of AHR subsidiary have been reclassified to discontinued operations. We are continuing to focus on the acquisition and consolidation of profitable pharmacy outsourcing businesses that provide pharmacy management services and pharmaceutical supplies to acute care hospitals and long-term care facilities such as nursing homes and hospices.  

As part of our business strategy, we have structured a program designed to merge profitable regional pharmacy outsourcers into a national team.  We believe these regional providers will benefit from the enhanced buying power and market presence of a consolidated healthcare entity.  

We intend to continue seeking suitable healthcare and pharmaceutical companies for potential acquisition, consulting or management opportunities.  

Item 2.  Management’s Discussion and Analysis

Three Month Periods Ended March 31, 2004 and 2003

AMHR did not generate any revenue during the three months ended March 31, 2004 or during the three months ended March 31, 2003.  Total expenses during the three months ended March 31, 2003 period consisted of general and administrative expenses of $45,448.  For the three months ended March 31, 2004 total expenses consisted of general and administrative expenses of $743,202 and interest expense of $52,110.

For the three months ended March 31, 2004, we had a net loss of $795,312 compared to a net loss of $86,838 for the same period in 2003.  The significant increase in our net loss for the three months ended March 31, 2004 compared to the same period in 2003 is because of increased consulting and legal fees.

As of March 31, 2004, we have $312,465 in outstanding liabilities as compared to $292,460 as of December 31, 2003.  The increase in liabilities is due to additional notes payable and accumulated dividends.

Liquidity and Capital Resources

At March 31, 2004, we had $6,279 in cash on hand and $15,000 in prepaid expenses for a total of $21,279 in current assets compared to $5 in cash on hand and no prepaid expenses at December 31, 2003.   Also at March 31, 2004, we had $12,226 in deferred loan costs and $1,069,609 in deferred stock offering costs for total other assets of $1,081,835 compared to $10,503 in deferred loan costs and $1,069,609 in deferred stock offering costs totaling $1,080,112 for total  other assets at December 31, 2003.  The increase in assets is mainly attributable loan proceeds.

At March 31, 2004, we had total liabilities of $312,465 compared to $292,460 at December 31, 2003.  The increase is mainly attributable to dividends payable on our preferred stock, increased accrued interest due on loans and an increase of convertible notes payable.

During the next twelve months we hope to reduce liabilities and bring current our outstanding debts.  We anticipate that our operating expenses for the next twelve months will be approximately $120,000 consisting mainly of salaries and consulting fees.  We will also have legal and auditing expenses relating to our public reports as well as office rental and other expenses.  Management hopes to identify and acquire appropriate on-going business in the pharmacy outsourcing and consulting areas in order to generate revenue to cover operating expenses.   Should it become necessary to raise additional capital, we may consider securing loans from officers and directors, selling additional stock or entering into debt financing.  We have no material commitments for capital expenditures for the next twelve months.

The Company has entered into an Equity Line of Credit Agreement with Cornell Capital Partners, LP.  The agreement requires Cornell to purchase up to $10,000,000 of the Company’s common stock at approximately 90% of market price.  The agreement allows the Company to make requests for funds in $150,000 increments every seven trading days over the next two years following registration of the underlying securities.  The agreement also provides for a commitment fee of approximately $290,000 of the Company’s common stock and other provisions.  As of March 31, 2004, the Company has not used this line of credit nor has it filed a registration statement.

Item 3.  Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures.  The Company's management, with the participation of the chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of the Company's "disclosure, controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this quarterly report (the "Evaluation Date").  Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, the Company's disclosure, controls and procedures are effective, providing them with material information relating to the Company as required to be disclosed in the reports the Company files or submits under the Exchange Act on a timely basis.

(b)

Changes in Internal Control over Financial Reporting.  There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

Management is aware of a potential suit in the Circuit Court of the County of St. Louis, State of Missouri, Cause No. 03AC-002539TCV, dated March 25, 2003.  The suit is being brought by Pre-Employment Screening, Inc., Lawrence J. Altman, Gateway Legal Services, Inc. and Fun Services of Kansas City, Inc. against American Hospital Resources, Inc. f/k/a New Horizon Resources, Inc.  The suit is a petition for damages arising from an alleged violation of the Telephone Consumer Protection Act.  The petition alleges that the company breached the Act by sending unsolicited advertising faxes to plaintiffs and requests damages of $12,000 and such other relief as the court deems proper.  Management denies transmitting any faxes to the plaintiffs and regards the lawsuit as frivolous and opportunistic.  Should AMHR be formally served with this suit, it intends to deny all charges and defend itself appropriately. AMHR has never been formally served and no legal action has commenced as of March 31, 2004.

Item 2.  Changes in Securities and Use of Proceeds

Unless other wise noted, the following stock issues were offered in a private transaction without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid in the transaction.

In February 2004, the Company issued 1,100,000 shares of its common stock to pay accounts payable of $29,382 and for services valued at $476,618.  Of the 1,100,000 shares issued, 250,000 of the shares were registered on Form S-8.

In February 2004, the Company issued 110,000 shares of Class A preferred stock for services valued at $253,000.

In March 2004, the Company issued 20,000 shares of its common stock for $1,000 cash upon the exercise of outstanding options.

In March 2003, the Company issued 8,108 shares of Class A preferred stock for cash of $15,000.

In December 2003, the Company cancelled 1,065,624 shares of its common stock due to a court order.  In December 2003, the Company repurchased and cancelled 2,131,249 shares of the Company’s issued and outstanding common stock for $85,250, or $.04 per share.

In October 2003, the Company issued 2,537,150 shares of its previously authorized but unissued common stock upon the conversion of 353,750 shares of Class A preferred stock and 153,680 shares of Class C preferred stock.

In October 2003, the Company issued 1,200,000 shares of common stock to pay a liability of $290,000 or approximately $.2417 per share.

In September 2003, the Company issued 173,747 shares of Class C preferred stock to a third party in exchange for payment of liabilities totaling $868,735 which were owed to shareholders of the Company.  

In June and July, 2003, the Company issued 8,800 shares of Class C preferred stock for $44,000 cash.

In May 2003, shareholders of the Company converted 505,010 shares of Class A preferred stock into 2,525,050 shares of common stock.

From April through June 2003, the Company issued a total of 388,300 shares of Class A preferred stock with beneficial conversion features totaling $324,775 which have been accounted for as dividends on the day of issue.

In April and May 2003, the Company issued 570,000 shares of common stock for services valued at $131,000.

In February 2003, the Company issued 40,000 shares of common stock for $10,000 cash.

On December 31, 2002, AMHR issued 2,600,000 shares of its previously authorized but unissued Class A preferred stock in exchange for 13,000,000 shares of common stock held by Phase One LLC.  The 13,000,000 shares of common stock were then cancelled.  The preferred shares have 5 to 1 voting rights and may be converted into five shares of common stock.

In February 2002, the Company issued 11,000,000 shares of common stock for notes payable in the amount of $80,000 and a note receivable in the amount of $30,000.  The Company also issued 125,000 shares of common stock for services valued at $2,500 and 450,000 shares of common stock for services valued at $5,000.  Additionally, the Company issued 500,000 shares of common stock for a note payable of $20,000 with accrued interest of $1,281.

In February and March 2002, the Company repurchased and canceled 3,198,736 shares of its issued and outstanding common stock for $79,500.

In March 2002, the Company issued 1,600,000 shares of common stock for services valued at $32,000.

In April 2002, the Company issued 2,000,000 shares of common stock for $20,000 cash.

In May of 2002 we issued 500,000 common shares to an accredited investor to convert $40,000 in notes and accrued interest of $789.

In June 2002, the Company issued 3,196,873 shares of common stock to acquire the subsidiary, American Hospital Resources, Inc., a Delaware corporation.

In August 2002, the Company issued 584,000 shares of common stock for services valued at $146,000.

On October 31, 2002, the Company issued 200,000 shares of previously authorized but unissued restricted common stock for cash of $50,000, or $.25 per share to two accredited investors.  

Option and Warrants

Unless other wise noted, the following stock issues were offered in a private transaction without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid in the transaction.

In December 2003, the Board of Directors authorized the 2004 Stock Bonus Pool which consists of 1,000,000 warrants to purchase common stock at $0.25 per share.  The Company granted 200,000 warrants to purchase common stock from the 2004 Stock Bonus Pool to directors for services rendered valued at $4,000.  The warrants vested immediately and are exercisable at $0.25 per share for a period of five years.  As of December 31, 2003, none of these warrants had been exercised, forfeited or cancelled.

On December 31, 2002, the Board of Directors adopted an Incentive Stock Bonus Plan.  The plan allows the company to grant 5-year warrants to purchase shares of common stock to directors, senior management and certain key employees.  Awards under this plan are to be determined by the Board of Directors.

Also in December 2002, the Board of Directors authorized the 2003 Stock Bonus Pool which consisted of 1,000,000 warrants to purchase common stock at $0.25 per share.  The Company also granted 300,000 warrants to purchase common stock from the 2003 Stock Bonus Pool to directors and NIPSI personnel for services rendered valued at $19,577.  The warrants vested immediately and are exercisable at $0.25 per share for five years.  In 2004, the Company obtained a court order to cancel 75,000 of the warrants.  At December 31, 2003, none of the remaining 225,000 warrants had been exercised, forfeited or cancelled.

On November 1, 2002, the Company granted a stock option to Spice Island Products Corp.  The option allows Spice Island to purchase up to 2,000,000 shares of the Company’s common stock at $0.50 per share at any time between November 1, 2002 and November 1, 2005.  As of the date of this report, no options have been exercised.

In March 2002, AMHR granted 10,000 stock options to Mark Buck and 10,000 stock options to Antione Gedeon, for their services as directors.  The options vested immediately and are exercisable at $.05 per share through March of 2004.  As of March 31, 2004, all 20,000 options have been exercised.

Item 5.  Other Information

In March 2004, the Company issued 20,000 shares of its common stock for $1,000 cash upon the exercise of outstanding options previously issued to our directors.  Mr. Buck and Mr. Gedeon each exercised options for 10,000 shares from the options granted to them on March 2002 by the Company.

In March 2004, the Company signed a Management Agreement with Judah Feigenbaum (“JF”) to act as an agent of the Company through July 15, 2004.  The agreement calls for the Company to pay $24,000 plus 3% of the consideration of any pharmacy acquisitions completed through March 2005.

Item 6.  Exhibits and Reports on Form 8-K

The Company did not file any reports on Form 8-K during the last ninety days of the period covered by this report.

Exhibits:

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunton duly authorized.

American Hospital Resources, Inc.

Date:

May 12, 2004

/s/ Mark Buck

Mark Buck,

Chief Executive Officer

Chief Financial Officer

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