================================================================================
                                    FORM 10-Q
                             -----------------------
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

         (Mark One)
         [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                  FOR THE PERIOD ENDED MARCH 31, 2003

                                       OR

         [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from ________ to _________


                         Commission File Number: 0-22162

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


            DELAWARE                                    22-3209241
 (State or other jurisdiction of                     (I.R.S. Employer
 incorporation or organization)                      Identification No.)

 2625 CUMBERLAND PARKWAY, SUITE 310                       30339
        ATLANTA, GEORGIA                                (zip code)
      (Address of principal
        executive offices)

       (Registrant's telephone number, including area code) (678) 264-4400


              (Former name, former address and former fiscal year,
                         if changed since last report)


     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 whether the registrant is an  accelerated  filer (as
determined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

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

                                                   Outstanding at
          Class                                    4/30/03
          -----                                    -------
          COMMON STOCK, $.001 PAR VALUE            4,371,350 SHARES

================================================================================



<PAGE>


                                CARECENTRIC, INC.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX


PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

     Consolidated  Balance Sheets - March 31, 2003  (unaudited) and December 31,
     2002 (audited).

     Consolidated  Statements  of  Operations  - Three Months March 31, 2003 and
     2002 (unaudited).

     Consolidated  Statements of Shareholders' Equity - Three months ended March
     31, 2003 (unaudited).

     Consolidated  Statements  of Cash Flows -Three  months ended March 31, 2003
     and 2002 (unaudited).

     Notes to Consolidated Financial Statements - March 31, 2003 (unaudited).

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K



                                       2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared by CareCentric,  Inc.  ("CareCentric" or the "Company") pursuant to the
rules and  regulations of the Securities and Exchange  Commission.  Accordingly,
they do not include all of the information and footnotes  required by accounting
principles  generally  accepted  in the United  States of America  for  complete
financial statements. In the opinion of the Company, all adjustments (consisting
only of normal  recurring  entries)  necessary for the fair  presentation of the
Company's  results  of  operations,  financial  position  and cash flows for the
periods presented have been included.




                                       3
<PAGE>

<TABLE>
<CAPTION>

                                                        CARECENTRIC, INC.
                                                   CONSOLIDATED BALANCE SHEETS
<S>                                                                   <C>               <C>
                                                                          MARCH 31,         DECEMBER 31,
                                                                            2003               2002
                                                                      ----------------- --------------------
                                                                        (unaudited)          (audited)

                              ASSETS
 Current assets:
     Cash and cash equivalents                                         $     1,183,000   $          826,000
     Accounts receivable, net of allowance for doubtful
       accounts of $1,087,000 and $1,307,000 respectively                    4,318,000            4,632,000
     Prepaid expenses and other current assets                                 813,000              696,000
     Notes receivable                                                          180,000              215,000
                                                                      ----------------- --------------------
       Total current assets                                                  6,494,000            6,369,000

Purchased software, furniture and equipment, net                               931,000            1,036,000
Intangible assets, net                                                       4,026,000            4,308,000
Long term notes receivable                                                     313,000              194,000
                                                                      ----------------- --------------------
       Total assets                                                    $    11,764,000   $       11,907,000
                                                                      ================= ====================

                LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
     Line of credit                                                    $     4,125,000   $        4,525,000
     Accounts payable                                                        1,489,000            1,584,000
     Accrued compensation expense                                              480,000              556,000
     Accrued liabilities                                                     6,125,000            6,113,000
     Customer deposits                                                       1,380,000            1,495,000
     Unearned revenues                                                       4,560,000            4,223,000
                                                                      ----------------- --------------------
       Total current liabilities                                            18,159,000           18,496,000

Accrued liabilities, less current portion                                            -              150,000

Note payable long-term                                                       8,647,000            8,520,000

Commitments and contingencies

Shareholders' deficit
     Preferred Stock: 10,000,000 shares authorized
     Series B Preferred, $.001 par value;
       5,600,000  issued and outstanding; liquidation value $1.37                6,000                6,000
     Series D Preferred, $.001 par value;
       398,000  issued and outstanding; liquidation value $3.14                      -                    -
     Series E Preferred, $.001 par value;
       210,000 issued and outstanding; liquidation value $1.04                       -                    -
     Common  stock,  $.001 par value;  20,000,000  shares  authorized;
       4,371,350 shares issued and outstanding at March 31, 2003 and
       December 31, 2002                                                         4,000                4,000
     Unearned compensation                                                    (117,000)            (134,000)
     Additional paid-in capital                                             20,430,000           20,430,000
     Stock warrants                                                          1,000,000            1,000,000
     Accumulated deficit                                                   (36,365,000)         (36,565,000)
                                                                      ----------------- --------------------
       Total shareholders' deficit                                         (15,042,000)         (15,259,000)
                                                                      ----------------- --------------------

       Total liabilities and shareholders' deficit                     $    11,764,000   $       11,907,000
                                                                      ================= ====================

                               See notes to consolidated financial statements
</TABLE>


                                       4
<PAGE>


<TABLE>
<CAPTION>

                                              CARECENTRIC, INC.
                                    CONSOLIDATED STATEMENTS OF OPERATIONS

<S>                                         <C>                <C>
                                               THREE MONTHS ENDED MARCH 31,
                                            ------------------------------------
                                                 2003                2002
                                            ----------------   -----------------
                                              (unaudited)        (unaudited)

Net revenues                                 $    5,478,000     $     5,253,000

Costs and expenses:
  Cost of revenues                                1,823,000           1,676,000
  Selling, general and administrative             2,217,000           2,699,000
  Research and development                          835,000             947,000
  Amortization and depreciation                     394,000             425,000
                                            ----------------   -----------------
  Total costs and expenses                        5,269,000           5,747,000
                                            ----------------   -----------------

Income (loss) from operations                       209,000           (494,000)

Other income (expense):
  Interest expense                                 (174,000)           (168,000)
  Interest and other income                         343,000              (2,000)
                                            ----------------   -----------------
Income (loss) before taxes                          378,000            (664,000)
                                            ----------------   -----------------

  Income tax benefit (expense)                      (23,000)                  -

Net Income (loss)                                   355,000            (664,000)
                                            ----------------   -----------------

  Cumulative Preferred Dividends                   (155,000)           (180,000)
                                            ----------------   -----------------
Net Income (loss) available to common
  shareholders                               $      200,000     $      (844,000)
                                            ================   =================

Net Income (loss) per share - basic and
  diluted                                    $         0.08     $         (0.15)
                                            ================   =================

Net Income (loss) per share - basic and
  diluted available to common shareholders   $         0.05     $         (0.19)
                                            ================   =================

Weighted average common shares -
  basic and diluted                               4,371,000           4,371,000
                                            ================   =================

</TABLE>


                                       5
<PAGE>



<TABLE>
<CAPTION>
                                                             CARECENTRIC, INC.
                                              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                                                 FOR THE THREE MONTHS ENDED MARCH 31, 2003
                                                                (unaudited)

<S>                  <C>         <C>      <C>        <C>       <C>           <C>          <C>        <C>             <C>
                           COMMON               PREFERRED                     ADDITIONAL                                TOTAL
                          --------              ---------         UNEARNED     PAID-IN                ACCUMULATED    SHAREHOLDERS'
                       SHARES     STOCK     SHARES    STOCK     COMPENSATION   CAPITAL     WARRANTS     DEFICIT         DEFICIT
                     ----------  -------  ---------- --------  ------------- ------------ ---------- ------------- ---------------
Balance at
 December 31, 2002    4,371,000  $ 4,000   6,208,000  $ 6,000    $ (134,000) $ 20,430,000 $1,000,000 $(36,565,000)  $ (15,259,000)
                     ----------  -------  ---------- --------  ------------- ------------ ---------- ------------- ---------------

Amortization of
  unearned
  compensation                                                       17,000                                                17,000

Net profit                                                                                                200,000         200,000
                     ----------  -------  ---------- --------  ------------- ------------ ---------- ------------- ---------------

Balance at
  March 31, 2003      4,371,000  $ 4,000   6,208,000 $  6,000    $ (117,000) $ 20,430,000 $1,000,000 $(36,365,000)  $ (15,042,000)
                     ==========  =======  ========== ========  ============= ============ ========== ============= ===============

                                                         See notes to Consolidated Financial Statements
</TABLE>



                                       6
<PAGE>

                                CARECENTRIC, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW

                                             Three Months ended March 31,
                                            ------------------------------
                                                2003            2002
                                            -------------  ---------------
                                             (unaudited)     (unaudited)


CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income (loss)                          $   200,000    $    (844,000)

ADJUSTMENTS  TO RECONCILE NET INCOME (LOSS)
TO NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES:
   Provision for doubtful accounts                     -          157,000
   Amortization and depreciation                 394,000          425,000
   Stock based compensation charge to
     earnings                                     17,000           23,000

CHANGES IN ASSETS AND LIABILITIES:
   Accounts receivable                           314,000       (1,406,000)
   Prepaid expenses and other current
     assets                                     (117,000)          19,000
   Notes receivable                             (120,000)          37,000
   Accounts payable                              (95,000)         447,000
   Accrued compensation                          (76,000)         (50,000)
   Accrued liabilities                          (138,000)        (167,000)
   Customer deposits                            (115,000)          26,000
     Unearned revenues                           337,000          126,000
                                            -------------  ---------------
     Net cash provided by / (used in)
       operating activities                      601,000       (1,207,000)
                                            -------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of software, furniture and
  equipment                                       (6,000)         (19,000)
                                            -------------  ---------------
   Net cash provided by / (used in)
     investing activities                         (6,000)         (19,000)
                                            -------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from notes payable                   127,000        1,000,000
   Increase (decrease) in line of credit        (400,000)         395,000
   Payments on capital lease obligation                -           (9,000)
   Proceeds from Consulting note receivable       35,000           96,000
                                            -------------  ---------------
      Net cash provided by / (used in)
        financing activities                    (238,000)       1,482,000

        Net change in cash and cash
          equivalents                            357,000          256,000

Cash and cash equivalents, beginning of
  period                                         826,000          201,000
                                            -------------  ---------------

Cash and cash equivalents, end of period     $ 1,183,000    $     457,000
                                            =============  ===============

Cash paid during period for interest         $    63,000    $      81,000

                 See notes to consolidated financial statements


                                       7
<PAGE>

      CARECENTRIC NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The consolidated  financial  statements prepared by the Company include the
results of operations of the parent  company and its wholly owned  subsidiaries.
All inter-company balances and transactions have been eliminated.

     In the opinion of management, the financial statements include all material
adjustments  necessary for the presentation of the Company's financial position,
results  of  operations  and cash  flow.  The  results  of this  period  are not
necessarily indicative of the results for the entire year.

     These financial  statements do not include any adjustments  relating to the
recoverability and classification of recorded asset amounts or classification of
liabilities  that might be necessary should the Company be unable to continue to
operate  in the  normal  course  of  business.  See Note 11 to the  accompanying
Consolidated Financial Statements.

     Certain prior period amounts have been  reclassified to conform to the 2002
financial statement presentation.

DESCRIPTION OF BUSINESS

     The Company is a provider  of  information  technology  systems and related
services and consulting  services  designed to enable home health care providers
to more  effectively  operate their  businesses  and compete in the  prospective
payment system (PPS) and managed care  environments.  The Company's  focus is to
help home health care  providers  streamline  their  operations and better serve
their patients.  CareCentric offers several  comprehensive  software  solutions.
Each of these software solutions is designed to enable customers to generate and
utilize comprehensive financial, operational and clinical information.

MANAGEMENT ESTIMATES

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

REVENUE RECOGNITION

     The Company  recognizes  revenue under SOP 97-2 as amended by SOP 98-9. The
Company recognizes software license revenue when the following criteria are met:
(1) a signed and executed contract is obtained;  (2) delivery has occurred;  (3)
the license fee is fixed and determinable;  (4) collection is probable;  and (5)
remaining  obligations under the license  agreement are immaterial.  The Company
sells and invoices  software  licenses and maintenance fees as separate contract
elements,  except with  respect to first year  maintenance  which is sold in the
form of a bundled  turnkey system.  The Company has established  vendor specific
objective  evidence related to the value of maintenance  fees. Where applicable,
the Company uses the residual value method to allocate  software revenue between
licenses and first year maintenance.

     Revenues are derived from the licensing and sub-licensing of software,  the
sale of computer hardware, accessories and supplies, implementation and training
products  and  services,  forms and case plans,  and  software  maintenance  and


                                       8
<PAGE>

support  services.  For the three  months  ended  March 31,  2003,  the  Company
recorded  total  revenues of $5.5 million.  The Company's  core product lines of
STAT2 and MestaMed(R) accounted for 30.0% and 53.7%,  respectively,  of the $5.5
million in revenues.

     To the extent that  software and  services  revenues  result from  software
support,  implementation,  training  and  technical  consulting  services,  such
revenues  are  recognized  monthly as the related  services are rendered or, for
software support revenues, over the term of the related agreement. To the extent
that  software and services  revenues  result from software  licenses,  computer
hardware and third-party  software  revenues,  such revenues are recognized when
the related products are delivered and  collectability  of fees is determined to
be probable, provided that no significant obligation remains under the contract.
Limited amounts of revenues derived from the sale of software licenses requiring
significant modification or customization are recorded based upon the percentage
of completion method using labor hours or contract milestones.  Software support
or  maintenance  allows  customers  to  receive  unspecified   enhancements  and
regulatory data updates in addition to telephone support.

     Third-party software and computer hardware revenues are recognized when the
related  products are  delivered.  Software  support  agreements  are  generally
renewable  for one-year  periods,  and revenue  derived from such  agreements is
recognized  ratably  over  the  period  of  the  agreements.   The  Company  has
historically  maintained high renewal rates with respect to its software support
agreements. The Company generally charges for software implementation,  training
and technical  consulting services as well as management  consulting services on
an hourly or daily basis. The Company offers "tiered pricing" for implementation
of new systems  whereby  the  customer  pays a fixed fee for a certain  level of
packaged services and daily fees for services beyond the package.

     Revenues for post-contract customer support are recognized ratably over the
term of the support period, which is typically one year.  Post-contract customer
support  fees  typically  cover  incremental  product  enhancements,  regulatory
updates  and  correction  of  software  errors.  Separate  fees are  charged for
significant product  enhancements,  new software modules,  additional users, and
migrations to different operating system platforms.

     Subsequent to delivery, the Company frequently delivers a variety of add-on
software and hardware components.  Revenues from these sales are recognized upon
delivery.

     In addition to software  licenses,  software  maintenance and support,  and
related  hardware,  the Company  also  provides a number of  ancillary  services
including on site implementation and training,  classroom  training,  consulting
and "premium" and after-hours support.  Revenues from such products and services
are  recognized  monthly as such  products are  delivered  and such services are
performed.

PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

     Purchased   software,   furniture   and  equipment  are  carried  at  cost.
Depreciation and amortization are computed using the  straight-line  method over
the estimated  useful lives of the assets.  When assets are retired or otherwise
disposed of, the cost and related accumulated  depreciation are removed from the
accounts and any resulting gain or loss is reflected in income for the period.

SOFTWARE DEVELOPMENT EXPENSES

     Costs  incurred to  establish  the  technological  feasibility  of computer
software  products  are  expensed  as  incurred.  The  Company's  policy  is  to
capitalize  costs  incurred  between  the  point of  establishing  technological
feasibility and general release only when such costs are material. For the three
months ended March 31, 2003 and the year ended  December  31, 2002,  the Company
had no  capitalized  computer  software  and  development  costs.  Software  and
development expenses are accounted for as research and development costs.

CASH EQUIVALENTS

     All highly liquid investments  purchased with an original maturity of three
months or less are considered to be cash equivalents.



                                       9
<PAGE>

INTANGIBLE ASSETS AND LONG-LIVED ASSETS

     Statement of Financial  Accounting  Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of"  requires  impairment  losses to be  recorded on  long-lived  assets used in
operations when indicators of impairment are present and the  undiscounted  cash
flows  estimated  to be  generated  by those  assets  are less than the  asset's
carrying amount.  The application of SFAS No. 121 resulted in an impairment loss
of $11.8 million  recorded in the fourth  quarter of 2001.  See Note 4. Prior to
the   impairment   adjustment,   the   intangible   assets   arising   from  the
CareCentric/MCS  merger on March 7, 2000 were amortized using the  straight-line
method  over the  estimated  useful  lives of the  related  assets as more fully
disclosed in Notes 3 and 4. The measurement of the recorded impairment was based
upon comparing the projected  undiscounted  future cash flow from the use of the
assets  against the  unamortized  carrying  value of the assets in the financial
statements.

     Effective  July 1,  2001,  the  Company  adopted  SFAS No.  141,  "Business
Combinations"  and effective  January 1, 2002, the Company adopted SFAS No. 142,
"Goodwill  and  Intangible  Assets"  and  SFAS  No.  144,  "Accounting  for  the
Impairment or Disposal of Long-Lived Assets". These new standards superseded the
Company's  previous  accounting  for  intangible  assets  under  SFAS No. 121 as
discussed below in the section Impact of New Accounting Standards.

     In  adopting  SFAS No. 142,  the Company  ceased  amortizing  goodwill  and
reassessed  the  remaining  life for  developed  technologies  from 6 years to 4
years.  An impairment test is required to be performed upon the adoption of SFAS
No. 142 and at least  annually  thereafter.  On an  ongoing  basis  (absent  any
impairment  indicators requiring interim review), the Company expects to perform
impairment  testing  at the  end of each  fiscal  year.  Impairment  adjustments
recognized from future  impairment  tests, if any,  generally are required to be
recognized as operating expenses.  In connection with adopting SFAS No. 142, the
Company  also  reassesses  the  useful  lives  and  the  classification  of  its
identifiable   intangible   assets  to  determine   that  they  continue  to  be
appropriate.

     SFAS No. 144,  which  became  effective  for fiscal years  beginning  after
December  15,  2001,  provides a single  accounting  model for the  disposal  of
long-lived  assets.  New criteria  must be met to classify the asset as an asset
held for sale.  SFAS No. 144 also focuses on reporting the effect of a disposal.
The  adoption  of SFAS No. 144 did not have a material  impact on the  Company's
financial position or results of operations.

INCOME TAXES

     The Company  accounts  for income  taxes using the  asset/liability  method
which  requires  recognition  of  deferred  tax  liabilities  and assets for the
expected future tax consequences of temporary  differences between the financial
statement  carrying  amount  and the tax  bases of  assets  and  liabilities.  A
valuation  allowance  reducing the total net deferred tax asset to zero has been
recorded based on management's assessment that it is "more likely than not" that
this net asset is not realizable.

NET INCOME (LOSS) EARNINGS PER SHARE

     The Company calculates earnings per share under SFAS No. 128, "Earnings Per
Share."  Basic  earnings  per share  exclude  any  dilutive  effects of options,
warrants and convertible  securities.  Diluted  earnings per share for the three
months  ended March 31, 2003 and March 31, 2002  include the effects of options,
warrants and conversion rights as if they would be dilutive.

STOCK BASED COMPENSATION

     At March 31, 2003, the company has two  stock-based  employee  compensation
plans, which are described in Note 7. The Company accounts for those plans under
the recognition and measurement principles of Accounting Principle Board ("APB")
Opinion  No.  25,  "Accounting  for Stock  Issued  to  Employees",  and  related
Interpretations.  No stock-based employee  compensation cost is reflected in net
income,  as all options granted under those plans had an exercise price equal to
the  market  value of the  underlying  common  stock on the date of  grant.  The
following  table  illustrates the effect on net income and earnings per share if
the  Company  had applied the fair value  recognition  provisions  of  Financial
Accounting   Standards  Board  ("FASB")  Statement  No.  123,   "Accounting  for
Stock-Based Compensation," to stock-based employee compensation.


                                       10
<PAGE>

<TABLE>
<CAPTION>
<S>                                                      <C>                 <C>
                                                         THREE-MONTH PERIODS ENDED MARCH 31
                                                               2003               2002
                                                         --------------      --------------
Net income (loss), as reported                            $    200,000        $   (844,000)
Deduct:    Total stock-based employee
   compensation expense determined under
   fair value based method for all
   awards, net of related tax effects                     $    (28,000)       $    (79,000)
                                                         --------------      --------------
Pro forma net income                                      $    172,000        $   (923,000)
                                                         ==============      ==============
Earnings per share:
    Basic--as reported                                    $       0.05        $      (0.19)
                                                         ==============      ==============
    Basic--pro forma                                      $       0.04        $      (0.21)
                                                         ==============      ==============
    Diluted--as reported                                  $       0.05        $      (0.19)
                                                         ==============      ==============
    Diluted--pro forma                                    $       0.04        $      (0.21)
                                                         ==============      ==============
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  following  methods  and  assumptions  were  used  by  the  Company  in
estimating its fair value disclosures for financial instruments:

     Cash and cash  equivalents:  The carrying  amounts  reported in the balance
sheet for cash and cash equivalents approximate their fair value.

     Notes  receivable and payable:  The carrying amounts of the Company's notes
receivable  and payable  approximate  their fair value  assuming  interest rates
consistent with what the Company could obtain in the open market.

SEGMENTS

     The Company has one operating  segment in continuing  operations,  which is
the Software Systems segment.


NOTE 2 - NOTES RECEIVABLE

     The Company has certain Notes Receivable of varying maturities,  which have
resulted  from the sale of the assets of the  Consulting  segment  in  September
2001,  and  financing to a customer for purchase of a new software  system.  The
Consulting  segment Note Receivable is due from William Simione Jr., currently a
director  of the  Company,  the  President  and Chief  Executive  Officer of the
acquirer of the Consulting  business,  Simione  Consulting,  LLC, and past Chief
Executive Officer of the Consulting segment when it was part of the Company. The
Customer note occurred in the normal course of business.

     The amounts and term of each note are summarized in the table below:

                                              NOTES RECEIVABLE
                               -----------------------------------------------
                                CONSULTING    CUSTOMER NOTE        TOTAL
                               ------------- ----------------  ---------------

     Balance as of 12-31-02      $  409,000       $        -       $  409,000
                               ============= ================  ===============

     Balance as of 3-31-03       $  373,000       $  120,000       $  493,000
                               ============= ================  ===============

     Interest Rate                    8.50%            5.65%


                                       11
<PAGE>


NOTE 3 - PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

     Purchased software, furniture and equipment consisted of the following:

<TABLE>
<CAPTION>
<S>                                     <C>                   <C>                 <C>
                                                                                   DEPRECIATION
                                             MARCH 31,           DECEMBER 31,       ESTIMATED
                                               2003                 2002           USEFUL LIVES
                                        --------------------  ------------------  ----------------

Furniture and Fixtures                          $ 1,451,000        $  1,447,000      10 years
Computer equipment and purchased
  software                                        6,291,000           6,288,000       5 years
                                        --------------------  ------------------
                                                  7,742,000           7,735,000

Accumulated depreciation                         (6,811,000)         (6,699,000)
                                        --------------------  ------------------
                                                $   931,000        $  1,036,000
                                        ====================  ==================
</TABLE>


NOTE 4 - INTANGIBLE ASSETS

     As a  result  of the  merger  with  MCS  on  March  7,  2000,  the  Company
capitalized  $26.5 million of  intangible  assets.  Those assets were  amortized
according to various lives ranging from four to nine years.  In accordance  with
SFAS No. 121, the Company was required to  periodically  review the value of its
intangible assets. During the fourth quarter of 2001, the Company's analysis and
review,  utilizing the methodology of SFAS No. 121, resulted in an $11.8 million
impairment loss of the intangible  assets of the Company.  The major reasons for
the impairment were new technologies  being integrated in the Company's  current
and future  products  causing its  existing  product  platforms  to have reduced
future  revenue  generation  capability,   and  an  expectation  that  immediate
opportunities  for new software sales are lower than were forecasted at the time
of the merger with MCS.

     The following table  summarizes the Company's  changes in account  balances
for its intangible assets since the MCS merger on March 7, 2000.

<TABLE>
<CAPTION>
<S>                   <C>                <C>              <C>                <C>                <C>
                                                                                                  3/31/2003
                         ORIGINAL            ASSETS          IMPAIRMENT        ACCUMULATED        NET BOOK     AMORTIZATION
                           COST             DISPOSED         WRITE-DOWN       AMORTIZATION          VALUE         PERIOD
                      ---------------    ---------------  -----------------  ----------------   -------------- -------------

Developed technology   $  10,650,000      $          -     $   (4,220,000)       (3,687,000)     $  2,743,000     4 years

Customer base              1,700,000          (510,000)                 -          (407,000)     $    783,000     9 years

Goodwill                  14,151,000        (2,906,000)        (7,580,000)       (3,165,000)     $    500,000

                      ---------------    ---------------  -----------------  ----------------   --------------
                       $  26,501,000      $ (3,416,000)    $  (11,800,000)    $  (7,259,000)     $  4,026,000
                      ===============    ===============  =================  ================   ==============

</TABLE>


                                       12
<PAGE>

NOTE 5 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

     On July 1, 2002, the Company completed a recapitalization plan initiated on
April 8, 2002. The recapitalization plan was approved by the common shareholders
of the Company at the June 6, 2002 annual  stockholders'  meeting. In accordance
with the terms of the recapitalization  plan and the convertible note agreements
with B. C. O'Donnell,  Mestek, Inc. and J. E. Reed, interest earned on the notes
is accumulated since July 1, 2002 and included in the balances  presented in the
following chart at March 31, 2003 and December 31, 2002.

                   NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
<TABLE>
<CAPTION>
<S>                                           <C>                       <C>
                                                   MARCH 31, 2003            DECEMBER 31, 2002
                                              -----------------------   --------------------------
 SHORT TERM:
 Line of Credit                                $           4,125,000     $              4,525,000
                                              =======================   ==========================

 LONG TERM:
 Convertible   Payable - B. C. O'Donnell       $             628,000     $                619,000
 Convertible Note - Mestek                                 4,188,000                    4,126,000
 Convertible Note - J.E. Reed                              3,722,000                    3,668,000
 Note Payable - J.E. Reed Accrued Interest                   109,000                      107,000

                                              -----------------------   --------------------------
                                               $           8,647,000     $              8,520,000
                                              =======================   ==========================
</TABLE>

     LINE OF CREDIT:

     On July 12, 2000, the Company entered into a $6.0 million Loan and Security
Agreement  facility  with  Wainwright  Bank and Trust  Company  (the  Wainwright
Facility),  a commercial  bank, under which the Company granted a first priority
position on substantially all of its assets as security. The Wainwright Facility
was  used to pay off the  line of  credit  with  Silicon  Valley  Bank,  certain
short-term  loans from Mestek,  Inc. (a related  party,  See Note 8), and a loan
from David O. Ellis. Borrowings under the Wainwright Facility accrue interest at
the bank's prime rate per annum and require  monthly  payments of interest.  The
Wainwright  facility  currently  matures  on  October  1,  2004.  The  Company's
obligations   under  the  Wainwright   Facility  are  guaranteed  by  Mestek  in
consideration  of which  the  Company  issued a warrant  to  Mestek to  purchase
104,712  shares of the Company's  common stock.  As a result of the July 1, 2002
recapitalization, the warrant was cancelled.

     CONVERTIBLE NOTE PAYABLE - BARRETT C. O'DONNELL:

     On November 11, 1999,  Simione borrowed  $500,000 from Barrett C. O'Donnell
and  $250,000  from David O. Ellis,  both on an  unsecured  basis,  and executed
promissory  notes in  connection  therewith.  Dr.  Ellis and Mr.  O'Donnell  are
directors of the Company. When the CareCentric/MCS merger was completed on March
7, 2000, the Company succeeded to both of these obligations. The note payable to
Dr. Ellis,  which accrued interest at 9% per annum, was paid in full on July 12,
2000 in  advance  of its  August  15,  2000  maturity.  The note  payable to Mr.
O'Donnell  included interest at 9% per annum, was scheduled to mature on May 11,
2002, and required  quarterly  payments of accrued interest.  On August 8, 2000,
the $500,000 note payable to Mr.  O'Donnell,  together with $100,000 of deferred
salary, was cancelled in exchange for a $600,000 subordinated note,  convertible
into  CareCentric  common  stock at a strike  price of  $2.51  per  share,  with
interest at 9% per annum and a five-year  maturity.  In January 2002,  this loan
was amended to change the interest  rate to prime plus two percent and to change
the terms of  payment  of  interest  for 2002 to require  that  one-half  of the
accrued  interest  be timely  paid each  quarter  and the  balance to be paid on
December 31, 2003 or to be converted  into an  additional  convertible  note. In
December 2002, Mr.  O'Donnell  agreed to adjust the terms of the Note Payable to
provide  consistent  treatment with the Mestek and J.E. Reed  convertible  notes
payable as existing after the July 1, 2002 recapitalization  plan. The effect of
this  adjustment  was to reduce the interest rate on the note payable to a fixed
rate of 6.25% and to defer all  interest  earned from July 1, 2002  through June
30,  2004 at which  time  the  accumulated  interest  totaling  $75,000  will be
capitalized  into the  principal of the note payable.  After June 30, 2004,  the


                                       13
<PAGE>

principal and  capitalized  interest will  accumulate  interest at the per annum
rate equal to six and one-quarter  percent (6.25%) with interest  compounded and
payable  quarterly  beginning on September  30, 2004.  Together  with any unpaid
principal and accrued  interest,  the Barrett C.  O'Donnell note will mature and
become payable on June 30, 2007.  Additionally,  the $600,000 note together with
the value of accrued  interest  may be  converted at the rate of $1.00 per share
into  CareCentric  common stock  exercisable at any time after July 1, 2002. The
new notes are subordinated to the Wainwright Bank $6.0 million line of credit.

     CONVERTIBLE NOTE PAYABLE - MESTEK:

     Prior to the July 1, 2002 recapitalization  plan, the Company was obligated
under a) an  18-month  unsecured  promissory  note in the  principal  amount  of
$1,019,000  payable to Mestek Inc.,  that earned  interest at prime plus one and
one half percent  (1.5%),  with  interest  payable  semiannually  and matured on
September 30, 2003 and b)  additional  notes payable to Mestek in the amounts of
$40,000,  $535,000 and $350,000.  These additional notes payable earned interest
at prime plus two percent (2.0%) for the $40,000 note and prime plus one percent
(1.0%) for the  $535,000  and  $350,000  notes until all  principal  and accrued
interest  amounts  were paid in full.  These  funds were  advanced  by Mestek to
CareCentric to cover payroll and accounts  payable  obligations  incurred by the
Company,  working  capital  needs  of  the  Company  during  the  period  of its
transition of senior  lenders from Silicon  Valley Bank to  Wainwright  Bank and
Trust Company,  accrued and unpaid interest thereon and the unreimbursed portion
of Mr. Bruce Dewey's salary for the periods from November 9, 1999 to October 31,
2001 when he was Chief Executive Officer of the Company.

     On July 1, 2002,  under the terms of the  recapitalization  plan, all notes
payable to Mestek by the Company were  consolidated  together with a) $1,000,000
of Mestek's previous participation in the J. E. Reed facility, b) accrued unpaid
interest on all notes payable to Mestek aggregating  $42,560,  c) accrued unpaid
interest on Mestek's  participation  in the J. E. Reed  facility of $33,750,  d)
$850,000 of cancelled  Mestek Series C Preferred  stock, and e) $129,748 of cash
paid on July 1, 2002 by Mestek to the  Company  to create a single  consolidated
$4,000,000 convertible note payable. The terms of the single consolidated Mestek
note are that interest  accrues and accumulates at a per annum rate equal to six
and  one-quarter  percent  (6.25%)  through  June 30,  2004,  at which  time the
accumulated  interest will be capitalized  into the related note. After June 30,
2004, the principal and capitalized interest will accumulate interest at the per
annum rate equal to six and one-quarter percent (6.25%) with interest compounded
and payable quarterly  beginning on September 30, 2004. Together with any unpaid
principal and accrued  interest,  the Mestek note will mature and become payable
on June 30, 2007.  Additionally,  the new $4.0 million  Mestek note and the $3.6
million J. E. Reed note,  together  with the value of  accrued  interest  may be
converted  at the  rate  of  $1.00  per  share  into  CareCentric  common  stock
exercisable  at any time after July 1, 2002. The new notes are  subordinated  to
the Wainwright Bank $6.0 million line of credit.

     CONVERTIBLE NOTE PAYABLE - J. E. REED:

     Prior to the July 1, 2002 recapitalization  plan, the Company was obligated
under a financing  facility (the J. E. Reed Facility)  provided by John E. Reed,
Chairman of CareCentric and the Chairman and Chief Executive  Officer of Mestek,
Inc. The J. E. Reed Facility  consisted of a $6.0 million  subordinated  line of
credit,  convertible into common stock of the Company at a strike price of $2.51
per share,  with  interest at 9% per annum and a five-year  maturity.  The J. E.
Reed  Facility  was  secured by a second  position on  substantially  all of the
Company's  assets.  At  December  31,  2002 and 2001,  borrowings  were equal to
$4,668,000 and $3,500,000 respectively,  $1,000,000 of which was participated to
Mestek at December 31, 2002 and 2001.  On December  31,  2001,  the facility was
amended to change the  interest  rate to prime  plus two  percent  (2.0%) and to
change the payment term for unpaid 2001 interest to require  payment on December
31, 2003, or convert the outstanding  unpaid interest to additional  convertible
notes, in the amount of $184,438 at the option of Mr. Reed, and in the amount of
$40,463 at the option of Mestek,  and to change the terms of payment of interest
for 2002 to require that one-half be timely paid each quarter and the balance be
paid on December 31, 2003 or be converted to additional  convertible  notes.  On
March 27, 2002 the Company  received an additional  $871,117 advance on the J.E.
Reed Facility.

     On  July 1,  2002,  under  the  terms  of the  recapitalization  plan,  all
principal  amounts  advanced under the J.E. Reed  Facility,  less the $1,000,000
participation  by Mestek,  together with interest  accrued through  December 31,
2001 were consolidated into a single  consolidated  $3,555,555  convertible note
payable.  The terms of the single  consolidated J.E. Reed note are that interest
accrues and accumulates at a per annum rate equal to six and one-quarter percent
(6.25%)  through June 30, 2004, at which time the  accumulated  interest will be
capitalized  into the related  note.  After June 30,  2004,  the  principal  and


                                       14
<PAGE>

capitalized interest will accumulate interest at the per annum rate equal to six
and one-quarter  percent (6.25%) with interest  compounded and payable quarterly
beginning on September 30, 2004.  Together with any unpaid principal and accrued
interest,  the J. E. Reed note will mature and become  payable on June 30, 2007.
Additionally,  the new $3.6 million J. E. Reed note,  together with the value of
accrued  interest,  may be  converted  at the  rate  of  $1.00  per  share  into
CareCentric  common stock  exercisable  at any time after July 1, 2002.  The new
notes are subordinated to the Wainwright Bank $6.0 million line of credit.

     NOTE PAYABLE - J. E. REED ACCRUED INTEREST:

     Under the terms of the July 1, 2002  recapitalization,  $103,818 of accrued
interest  earned on all advances under the J.E. Reed Facility  during the period
from  January 1, 2002 and June 30,  2002 was  capitalized  into a separate  note
payable that accrues and  accumulates  interest at a per annum rate equal to six
and  one-quarter  percent  (6.25%)  through  September  30, 2004,  with interest
compounded quarterly. After September 30, 2004, the accumulated interest will be
capitalized  into the related note and the  principal and  capitalized  interest
will  accumulate  interest  at the per annum rate  equal to six and  one-quarter
percent (6.25%) with interest  compounded and payable  quarterly.  Together with
any unpaid  principal  and accrued  interest,  the  separate J. E. Reed  accrued
interest  note will mature and become  payable on June 30, 2007.  The J. E. Reed
accrued  interest note is  subordinated to the Wainwright Bank $6.0 million line
of credit.


     CAPITAL LEASE OBLIGATIONS:

     The Company has no capital lease obligations at March 31, 2003.

     The fair value of the Company's  long-term  debt is estimated  based on the
current  interest  rates  offered  to the  Company  for debt  offered  under the
liquidity conditions and credit profile of the Company.  Management believes the
carrying value of debt and the contractual values of the outstanding  letters of
credit approximate their fair values as of March 31, 2003.

     Cash paid  interest  was $63,000 and $81,000  during the three months ended
March 31, 2003 and 2002 respectively.

     Maturities of long-term  debt in each of the next five years are as follows
in thousands:

                2004            $       -
                2005                    -
                2006                    -
                2007                8,647
                2008                    -
                                ----------
               Total            $   8,647
                                ==========

NOTE 6 - COMMITMENTS AND CONTINGENCIES

     COMMITMENTS

     The  Company  leases its office  facilities  and  certain  equipment  under
various  operating  lease  agreements.  These leases  require the Company to pay
taxes,  insurance,  and maintenance  expenses and provide for renewal options at
the then fair market rental value of the property.

     CONTINGENCIES

     The Company is engaged in various legal and regulatory  proceedings arising
in the normal  course of  business  which  management  believes  will not have a
material adverse effect on its financial position or results of operations.

                                       15
<PAGE>

     Simione Central Holding,  Inc., a subsidiary of CareCentric now known as SC
Holding,  Inc.  ("SC  Holding"),  was  one  of  several  defendants  named  in a
"whistleblower"  lawsuit related to alleged Medicare fraud filed under the False
Claims  Act in the  Northern  District  of  Georgia  (U.S.  ex re.  McLendon  v.
Columbia/HCA  Healthcare  Corp., et al., No. 97-VC-0890 (N.D. Ga.)). The lawsuit
involves alleged claims that SC Holding  allegedly  participated in a conspiracy
with Columbia/HCA and other third parties to bill inflated and fraudulent claims
to Medicare.  On July 21, 1999, the Justice Department issued notice that it had
elected  not to join  in the  claims  asserted  against  SC  Holding  by  Donald
McLendon,  who  is a  former  employee  of  an  unrelated  service  provider  to
Columbia/HCA.  Although  the Justice  Department  joined the suit with regard to
other  defendants,  it  specifically  declined  to  intervene  with regard to SC
Holding.  In late 2000,  CareCentric was advised by Mr. McLendon's attorney that
notwithstanding the declination by the Justice Department,  Mr. McLendon intends
to pursue "whistleblower" claims against SC Holding directly.  Through April 30,
2003,  no such  action has been taken and  nothing  further  has been heard from
McLendon's  attorney in over one year.  Management  believes that this claim has
been abandoned.  In the event a claim is asserted,  however,  CareCentric and SC
Holding intend to vigorously defend against it.

NOTE 7 - SHAREHOLDERS' EQUITY

     On July 1, 2002, the Company completed a recapitalization plan initiated on
April 8, 2002. The recapitalization plan was approved by the common shareholders
of the Company at the June 6, 2002 annual stockholders' meeting. Under the terms
of the  recapitalization  plan, the Company's  preferred  stock and common stock
warrants were partially restructured. The effect of the recapitalization plan is
summarized below for each class of equity.

     The  Company's  shareholders'  equity  (all on a  split-adjusted  basis) is
comprised of the following:

     COMMON SHARES - 20,000,000 SHARES AUTHORIZED

     Common Shares - 20,000,000 shares  authorized,  $.001 par value,  4,371,350
shares  issued and  outstanding  as of March 31,  2003 and  December  31,  2002.
1,489,853  of such  shares were issued on March 7, 2000 to the former MCS common
shareholders.  606,904 of such shares were issued on March 7, 2000 to the former
preferred  shareholders  and noteholders of CareCentric  Solutions,  Inc., which
shares were converted from Series A Preferred Stock into  CareCentric  (formerly
known as Simione  Central  Holdings,  Inc.) common shares in connection with the
merger.


     PREFERRED STOCK-10,000,000 SHARES AUTHORIZED

     Series B Preferred  Stock -$.001 par value,  5,600,000  shares issued.  The
shares of Series B Preferred  Stock are held by Mestek,  Inc.  (Mestek) and were
issued in  consideration  of $6,000,000 paid to CareCentric on March 7, 2000, in
the  form of cash and debt  forgiveness.  The  Series  B  Preferred  shares,  as
originally  issued,  carried  2,240,000  common share votes (on a split-adjusted
basis) and were entitled to a 9% annual cumulative dividend, among other rights.
In connection with the Company's  application for listing on the Nasdaq SmallCap
Market,  the Company  reached an agreement  with Mestek on June 12, 2000,  under
which Mestek agreed to allow the aforementioned  number of common share votes to
be reduced to  1,120,000  in  consideration  for the  issuance by the Company to
Mestek of a warrant to acquire up to 490,396 shares of CareCentric common stock,
as more  fully  described  below.  On March 29,  2002,  in  connection  with the
refinancing  commitments  made to the  Company  by  Mestek  and John E. Reed (as
further  described in Note 12), Mestek  transferred the voting rights associated
with the Series B Preferred  Stock to Mr. Reed.  As a result of the July 1, 2002
recapitalization plan, the terms of the Series B Preferred Stock were amended to
provide that each share is convertible into 1.072 shares of common stock.

     Series C Preferred  Stock - $.001 par value,  850,000 shares  issued.  As a
result of the July 1, 2002  recapitalization  plan, the Series C Preferred Stock
was cancelled,  and the $850,000 of cash value originally  contributed by Mestek
was consolidated into a Mestek  convertible note as more fully described in Note


                                       16
<PAGE>

5 above.  Accumulated and unpaid  dividends of $208,000 through June 30, 2002 on
the Series C Preferred  Stock were  cancelled  and  recorded  as a reduction  in
preferred dividend expense and an increase in net income at June 30, 2002.

     Prior to the July 1, 2002  capital  restructuring,  the  shares of Series C
Preferred  Stock were held by Mestek and  resulted  from the  conversion  at the
March 7, 2000 merger of a  pre-existing  $850,000  convertible  note  payable to
Mestek.  The Series C Preferred  shares carried 170,000 common share votes (on a
split adjusted  basis) and were entitled to an 11% annual  cumulative  dividend,
among other rights.

     Series D Preferred  Stock - $.001 par value,  398,406  shares  issued.  The
shares of Series D  Preferred  Stock are held by John E. Reed and were issued on
June 12, 2000 in  consideration of $1.0 million paid to the Company in cash. The
Series D Preferred shares have a 9% annual cumulative dividend,  are convertible
into common stock at an initial  conversion price of $2.51 per share,  limit the
ability to issue dilutive stock options and have voting rights equal to those of
the  common  stock,  among  other  rights.  As a  result  of the  July  1,  2002
recapitalization  plan, the Series D Preferred Stock  conversion price per share
was amended from $2.51 to $1.00.

     Series E Preferred  Stock - $.001 par value,  210,000 shares issued under a
restricted  stock award. The shares of Series E Preferred Stock are held by John
R. Festa and the rights to those shares were  granted on November 10, 2001.  The
Series E  Preferred  shares  have a 3.5%  annual  non-cumulative  dividend,  are
convertible into common stock at an initial  conversion price of $1.00 per share
and have voting rights equal to those of common stock, among other rights.

     As of March 31,  2003,  the Company had a  cumulative  preferred  dividends
liability of $1,915,000  comprised of $1,655,500 for Series B Preferred  shares,
$252,000 for Series D Preferred shares and $7,500 for Series E Preferred shares.
Cumulative  preferred  dividends payable are included in the accrued liabilities
account  presented  on the  consolidated  balance  sheets  in  the  accompanying
financial statements.

     WARRANTS AND OPTIONS

     Common  Stock  Warrants - In  connection  with the issuance of the Series B
Preferred  Stock  described  above,  Mestek  received a warrant to acquire up to
400,000 shares of the Company's common stock at a per share exercise price equal
to $10.875.  In  connection  with the waiver by Mestek of certain  voting rights
previously  granted to it, Mestek received on June 12, 2000 a warrant to acquire
up to 490,396  shares of the  Company's  common stock for a term of 3 years at a
per share exercise price equal to $3.21. In connection  with Mestek's  guarantee
of the Company's  obligations  under the line of credit from Wainwright Bank and
Trust Company, as more fully explained in Note 5 to these Financial  Statements,
Mestek  received on July 12,  2000 a warrant to acquire up to 104,712  shares of
the Company's  common stock for a term of 3 years at a per share  exercise price
equal to $2.51. The aforementioned  number of shares and per share prices is all
on  a  split-adjusted  basis.  Other  warrants  existing  prior  to  the  merger
transaction to acquire up to 25,000 shares of common stock remain outstanding.

     As a result of the July 1, 2002 capital restructuring,  the warrants issued
to Mestek to purchase  490,396 and 400,000  shares of Company  common stock were
cancelled  and  reissued  with an  exercise  price of  $1.00  per  share  and an
expiration date of June 15, 2004. Additionally, the warrants issued to Mestek to
purchase 104,712 shares of the Company's common stock were cancelled.

     At March 31, 2003, the Company had outstanding  warrants to purchase shares
of the Company's common stock as follows

<TABLE>
<CAPTION>
<S>                                      <C>                <C>                     <C>              <C>
                                                  BEFORE JULY 1, 2002                        AFTER JULY 1, 2002
DESCRIPTION OF WARRANTS                  EXERCISE PRICE     EXPIRATION DATE         EXERCISE PRICE   EXPIRATION DATE
-----------------------                  --------------     ---------------         --------------   ---------------

 25,000 - Barrett C. O'Donnell               $ 5.00        February 24 ,2005            $ 5.00       February 24 ,2005
400,000 - Mestek, Inc.                       $10.88           March 7 2003              $ 1.00          June 15, 2004
490,396 - Mestek, Inc.                       $ 3.21          June 30, 2003              $ 1.00          June 15, 2004
104,712 - Mestek, Inc.                       $ 2.51          July 12, 2003             Cancelled          Cancelled
</TABLE>

                                       17
<PAGE>

     Stock Options - Options  totaling 1,000 shares were  outstanding and vested
under the now discontinued 1997 SCHI NQ (Directors) Plan at an exercise price of
$60.00.   Non-plan  options   totaling  97,933  shares,   of  which  88,024  are
exercisable,  are  outstanding at exercise  prices ranging from $2.51 to $45.00.
The Simione Central Holding Inc. 1997 Omnibus  Equity-Based Plan (the "Plan") is
the only  continuing  stock  option  plan of the  Company.  The Plan offers both
incentive  stock  options  and  non-qualified  stock  options.  The  Company  is
authorized to grant options of up to 900,000 shares of common stock. As of March
31, 2003,  options  totaling 508,914 shares were  outstanding,  of which 299,413
shares are exercisable, at exercise prices ranging from $1.00 to $73.55.

     In  connection  with the  Simione/MCS  merger on March 7, 2000,  Mestek was
granted a series of options to purchase a total of approximately  378,295 shares
of the Company's  common stock (on a split-adjusted  basis).  These options were
cancelled as a result of the July 1, 2002 capital restructuring.

NOTE 8 - RELATED PARTY TRANSACTIONS

     The Company had subleased  certain space to  Healthfield,  Inc.  which is a
MestaMed(R)  customer and has a significant  shareholder who was a former member
of the board of  directors  of the  Company.  The  original  lease  and  related
sublease  expired on December 31, 2002 and  required  annual  sublease  payments
equal to the original lease payments of approximately $730,000.

     Stewart B. Reed and Winston R. Hindle, Jr. are directors of the Company and
directors of Mestek.  Mestek has certain  investments in the Company in the form
of notes,  convertible  notes,  warrants,  stock options and preferred  stock as
described in Notes 5, 7 and 12 to these Financial Statements.

     The Company has a note receivable from Simione Consultants, LLC of $373,000
at March  31,  2003.  On  September  28,  2001,  the  Company  discontinued  its
Consulting  business segment by closing the sale of certain of the assets of its
wholly-owned  subsidiary,  Simione  Consulting,  Inc.  ("Consulting") to Simione
Consultants,  LLC, which is owned and  controlled by William J. Simione,  Jr., a
director  and  former  officer  of  CareCentric.   The  total  sales  price  was
approximately $2.0 million plus the assumption of certain liabilities.  The sale
was made  pursuant to an asset  purchase  agreement.  William  Simione,  Jr. has
resigned as an officer of, but remains a director  of,  CareCentric.  The assets
sold under the agreement included the Consulting accounts  receivable,  computer
equipment, and miscellaneous prepaid expenses.  Consideration received consisted
of approximately $1.0 million in cash and $1.0 million in notes, $770,000 with a
36-month term and $230,000  with a 5-month term.  The cash proceeds were used to
pay down CareCentric's line of credit.

     As of March 31, 2003,  the Company had a  promissory  note  outstanding  to
Barrett C. O'Donnell, a director of the Company, as described in Note 5 to these
Financial  Statements.  Mr.  O'Donnell  also owns a warrant for the  purchase of
25,000  shares of common stock of the Company at an exercise  price of $5.00 per
share.

     John  E.  Reed  is a  director  and a  significant,  but  not  controlling,
shareholder  of the  Wainwright  Bank and Trust  Company  which has provided the
Company with a $6.0 million line of credit, as more fully explained in Note 5 to
the Financial Statements.

     John E. Reed,  Chairman  of the Company and  Chairman  and Chief  Executive
Officer of Mestek, has provided the Company with a $3.6 million convertible note
and a $0.1 million  accrued  interest note as more fully  described in Note 5 to
the Financial Statements.  Mr. Reed also purchased $1.0 million of the Company's
Series D Preferred  Stock on June 12, 2000, as more fully described in Note 7 to
these Financial Statements.  Mestek has provided the Company with a $4.0 million
convertible  note. The John E. Reed and Mestek notes were  originally  part of a
$6.0 million line of credit  (unrelated  to the  Wainwright  Bank and Trust $6.0
million line of credit  described  above) which was cancelled as a result of the
July 1, 2002  recapitalization.  An independent committee of the Company's Board
of Directors,  consisting of Barrett C. O'Donnell and David O. Ellis, negotiated
the terms of Mr. Reed's debt and equity investments in the Company. The issuance
of 398,406  shares of Series D Preferred  Stock to Mr. Reed for his $1.0 million
equity  investment was based on a per share price of $2.51,  which was the 5-day
average  closing price of  CareCentric  common stock as of the date of the final
negotiation of the terms of Mr. Reed's purchase.



                                       18
<PAGE>

NOTE 9 - LICENSE AGREEMENTS

     The Company  licenses  certain  software  products  from third  parties for
incorporation  in, or other use  with,  its  products  and is  obligated  to pay
license fees in connection  with such  products.  The Company  sublicenses  such
products  to  its  customers   and  collects   fees  in  connection   with  such
sublicensees.

NOTE 10 - EXECUTIVE COMPENSATION

     The Company  entered into an  employment  agreement  with its President and
Chief Executive Officer, John Festa. Under the agreement, Mr. Festa (i) has been
granted  210,000  shares of Series E  preferred  stock,  one half of which  vest
evenly  over the  course of three  years from his hire date  dependent  upon his
continued  employment as President and CEO and one half of which are forfeitable
pro rata over a three year period if certain  financial  milestones are not met,
(ii) is entitled to payment of an annual bonus of up to 50% of his annual salary
based on completion of annual performance  objectives,  and (iii) is entitled to
the  possibility  of receiving a special  bonus which varies in dollar amount in
the event there is a sale of the Company  while Mr. Festa is  President  and CEO
and for nine  months  thereafter.  The Series E Preferred  Stock was  originally
valued at approximately  $210,000 and is being amortized as compensation expense
over  the  three-year   vesting  period.   The  amount   representing   unearned
compensation is recorded as an increase in the stockholders deficit account. For
the three  months  ended  March 31,  2003 and 2002,  approximately  $17,000  and
$23,000,  respectively, was recorded as current expense associated with earnings
under this grant.

NOTE 11 - LIQUIDITY

     As  disclosed  in the  Financial  Statements,  the Company  generated  $0.6
million of cash from  operations  during the three  months ended March 31, 2003.
This improved cash flow,  which was a continuation of improved  results reported
in the second  quarter of 2002,  was  largely  used to pay back $0.4  million of
liability on the Wainwright  Bank Credit Line between  January 1, 2003 and March
31, 2003.  As a result of the July 1, 2002  recapitalization,  and as more fully
explained in Note 5 to these Financial Statements,  the Reed Credit facility was
cancelled  and  replaced by  long-term  interest  deferred  notes that mature on
September 30, 2007. The Company has a working  capital  deficit of $11.7 million
at March 31, 2003.

     During the month of April 2003,  the Company paid back an  additional  $0.4
million of liability on the  Wainwright  Bank Credit Line. As of April 30, 2003,
the Company had unused credit  capacity of  approximately  $2.3 million from the
$6.0 million  Wainwright Bank facility.  The Company believes the combination of
the funds  available  from cash to be generated  from future  operations and the
Wainwright  Bank facility  will be  sufficient  to meet the Company's  operating
requirements  through at least March 31,  2004,  assuming  no  material  adverse
change in the operation of the Company's business.

NOTE 12  -  SUBSEQUENT EVENTS

     On January  29,  2003,  CareCentric  received an offer to merge with Borden
Associates,  Inc.,  pursuant to a letter dated January 28, 2003. In the proposed
transaction,  Borden  would merge into  CareCentric  and  purchase the shares of
shareholders  holding less than 4,000 shares for $0.55 per share.  Each share of
CareCentric  common stock owned of record by a holder of 4,000 shares or more of
CareCentric  common stock will  continue to represent  one share of common stock
after the merger.  The  outstanding  shares of Borden  Associates  capital stock
will, in the  aggregate,  be converted  into the right to receive that number of
shares of  CareCentric  common  stock  equal to the  quotient  of the total cash
consideration  paid to the  holders of fewer than  4,000  shares of  CareCentric
common stock divided by the $0.55 per share price.  CareCentric would remain the
surviving  entity.  The Company filed a Form 8-K on February 4, 2003 summarizing
the terms of the offer.  This  transaction,  if  consummated,  may result in the
Company becoming private so that it would no longer be a reporting company under
SEC regulations or be publicly  traded on the OTC Bulletin  Board.  The Board of
Directors  is  evaluating  the  proposal  and has formed a special  committee of
independent  directors,  consisting  of Winston R.  Hindle,  Jr. and  William J.
Simione,  Jr.,  to  evaluate,  respond to or  negotiate  the  proposal  with the
principals of Borden  Associates.  Borden  Associates  is an investment  company
formed for the purpose of this transaction and owned by John Reed,  Stewart Reed
and  James  Burk.  John  Reed and  Stewart  Reed are  material  shareholders  of


                                       19
<PAGE>

CareCentric and members of its Board of Directors.  As of the end of March 2003,
the special  committee of the Board had selected legal counsel and an investment
banking firm to assist in the special  committee's review of the offer by Borden
Associates.

     On April 23,  2003,  Borden  Associates  sent the Special  Committee of the
Board a revised proposal letter that increased the offer price to the holders of
less than 4,000 shares of CareCentric common stock from $0.55 to $0.75 per share
and provides that the original proposal set forth in the January 28 letter as so
amended will expire on May 23, 2003. The Company filed a Form 8-K on May 1, 2003
summarizing the terms of the revised offer.  The Special  Committee of the Board
is evaluating the revised proposal.



                                       20
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     Certain  statements  set forth in  Management's  Discussion and Analysis of
Financial  Condition  and  Results  of  Operations  constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
the Private  Securities  Litigation  Reform Act of 1995,  and are subject to the
safe  harbor  created  by such  sections.  When used in this  report,  the words
"believe,"  "anticipate,"  "estimate,"  "expect," "plans,"  "intend,"  "likely,"
"will"  and  similar  expressions  are  intended  to  identify   forward-looking
statements. All statements,  other than statements of historical facts, included
or incorporated by reference in this 10-Q which address  activities,  events, or
developments  which the Company expects or anticipates  will or may occur in the
future,  including statements regarding the Company's competitive position,  the
successful  development of its software  products,  the impact on the Company of
actual or proposed regulatory changes, the Company's  expectations regarding the
adequacy of current  financing  arrangements,  product demand and market growth,
and other statements  regarding future plans and strategies,  anticipated events
or trends and similar  expressions  concerning  matters that are not  historical
facts are  forward-looking  statements.  These  statements  are based on certain
assumptions  and analyses made by the Company in light of its experience and its
perception  of  historical  trends,  current  conditions,  and  expected  future
developments  as well as  other  factors  it  believes  are  appropriate  in the
circumstances.   The  Company's  future  financial   performance   could  differ
significantly  from  that  set  forth  herein,  and  from  the  expectations  of
management.   Important  factors  that  could  cause  the  Company's   financial
performance to differ  materially  from past results and from those expressed in
any forward looking statements  include,  without  limitation,  the inability to
obtain additional capital resources, variability in quarterly operating results,
customer concentration,  product acceptance, long sales cycles, long and varying
delivery  cycles,  the  Company's  dependence  on  business  partners,  emerging
technological standards,  changing regulatory standards,  inability to retain or
hire   experienced   and   knowledgeable   employees,   risks   associated  with
acquisitions,   increased  regulation  of  the  health  care  industry,   future
consolidation  of the health care  industry,  potential  liability in connection
with a Department of Labor  investigation  or IRS audit, the need to develop new
and  enhanced  products,  product  delays and  errors,  competition,  difficulty
protecting  intellectual  property rights,  and the risk factors detailed in the
Company's  Registration  Statement on Form S-4 (File No.  333-96529)  and in the
Company's  periodic  reports filed with the Securities and Exchange  Commission.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements, which speak only as of their dates. This Management's Discussion and
Analysis of  Financial  Condition  and Results of  Operations  should be read in
conjunction with the Company's  consolidated  financial statements and the notes
thereto.  The  Company  assumes  no  obligation  to  update  publicly  any  such
forward-looking  statements,  whether  as a result  of new  information,  future
events, or otherwise.

CRITICAL ACCOUNTING POLICIES

     Financial  Reporting  Release No. 60,  which was  recently  released by the
Securities  and  Exchange  Commission,  requires  all  companies  to  include  a
discussion of critical accounting policies or methods used in the preparation of
financial  statements.  Note  1 of  the  Notes  to  the  Consolidated  Financial
Statements includes a summary of the significant accounting policies and methods
used in the preparation of the Company's Consolidated Financial Statements.  The
following is a brief discussion of the more significant  accounting policies and
methods that we follow.

General

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
at the dates of the financial  statements  and the reported  amounts of revenues
and expenses during the reporting  periods.  The most significant  estimates and
assumptions  relate to the intangible  assets,  realization  of deferred  income
taxes and the adequacy of allowances for returns and doubtful  accounts.  Actual
amounts could differ significantly from these estimates.



                                       21
<PAGE>

Our critical accounting policies are as follows:

     o    revenue recognition;
     o    estimate of allowance for uncollectible accounts; and
     o    valuation of long-lived and intangible assets and goodwill.

Revenue Recognition

     The  Company  sells  its  software   pursuant  to   non-exclusive   license
agreements,  which  provide  for the  payment  of a  one-time  license  fee.  In
accordance with the American Institute of Certified Public Accountants Statement
of Position 97-2,  "Revenue  Recognition",  these  revenues are recognized  when
products are delivered and the collectability of fees is probable, provided that
no significant obligations remain under the contract.  Revenues derived from the
sale  of  software   products  not   requiring   significant   modification   or
customization  are recognized when products are delivered and  collectability of
fees is probable,  provided  that no  significant  obligations  remain under the
contract.  The price of the Company's software varies depending on the number of
software  modules  licensed and the number of users accessing the system and can
range from under ten  thousand  dollars to a few  million  dollars.  The Company
generally  requires payment of a deposit upon the signing of a customer order as
well as  certain  additional  payments  prior  to  delivery.  As a  result,  the
Company's balance sheet reflects significant customer deposits.

     Third-party software and computer hardware revenues are recognized when the
related  products are  delivered.  Software  support  agreements  are  generally
renewable  for one-year  periods,  and revenue  derived from such  agreements is
recognized  ratably  over  the  period  of  the  agreements.   The  Company  has
historically  maintained high renewal rates with respect to its software support
agreements. The Company generally charges for software implementation,  training
and technical  consulting services as well as management  consulting services on
an hourly or daily basis. The Company offers "tiered pricing" for implementation
of new systems  whereby  the  customer  pays a fixed fee for a certain  level of
packaged  services  and daily fees for services  beyond the package.  Revenue is
recognized  for instances  where tiered  pricing is used according to separately
defined  portions  of service  and  software as those  portions  are  completely
delivered to the customer.

     Revenues for post-contract customer support are recognized ratably over the
term of the support period,  which is typically one year. Post contract customer
support  fees  typically  cover  incremental  product  enhancements,  regulatory
updates  and  correction  of  software  errors.  Separate  fees are  charged for
significant product  enhancements,  new software modules,  additional users, and
migrations to different operating system platforms.

Estimate of Allowance for Uncollectible Accounts

     The Company  continuously reviews the status of all its accounts receivable
with its customers for current collectability. The Company recognizes that there
are  circumstances  under which  customers  will delay payment  beyond the terms
offered  by the  Company  either  because  of their  own  payment  practices  or
temporary situations which need to be resolved before the customer will continue
payment.  Reserves  for  uncollectability  are  based on  various  ages of those
accounts  receivable  past their original due date for  collection.  The Company
does not write the account off  against  the reserve for  uncollectible  account
until all efforts to collect the accounts receivable have been exhausted.

Valuation of Long-Lived and Intangible Assets and Goodwill

     The Company assesses the impairment of identifiable intangibles, long-lived
assets and related goodwill and enterprise  level goodwill  annually or whenever
events or changes in  circumstances  indicate that the carrying value may not be
recoverable.  Factors the Company  considers  important  which could  trigger an
impairment review include the following:

     o    significant   underperformance  relative  to  expected  historical  or
          projected future operating results;
     o    significant changes in the manner of the Company's use of the acquired
          assets or the strategy for its overall business; and
     o    significant negative industry or economic trends.

     When the  Company  determines  that  the  carrying  value  of  intangibles,
long-lived  assets and related goodwill and enterprise level goodwill may not be
recoverable  based upon the existence of one or more of the above  indicators of
impairment,  the Company measures any impairment based on a projected discounted
cash  flow  method  using  a  discount  rate  determined  by  management  to  be
commensurate  with the risk inherent in the current  business model. As of March
31, 2003 no event or business  situation had been identified which indicated the


                                       22
<PAGE>

carrying value of the intangibles and long-lived assets and related goodwill and
enterprise  level of goodwill  should be  adjusted.  As of December  31, 2001, a
$11.8 million  impairment  adjustment  was recorded  resulting in net intangible
assets  amounting to $5.4  million as of December  31,  2001.  See Note 4 of the
Notes to the Consolidated Financial Statements.

RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THREE MONTHS ENDED MARCH 31, 2003

     Net  Revenues.  Revenues were $5.5 million for the three months ended March
31, 2003 and $5.3  million for the three  months  ended  March 31,  2002,  or an
increase of 4.3%. The $0.2 million  increase was  attributable  to a decrease in
software system sales and related income of $0.2 million to $2.2 million in 2003
from $2.4 million in 2002 and increase in  maintenance  revenues of $0.4 million
to $3.3 in 2003 from $2.9 million in 2002.

     Cost of Revenues.  Cost of revenues increased $0.1 million, to $1.8 million
in 2003 from $1.7  million  for the three  months  ended  March 31,  2002.  As a
percentage of total net revenues,  cost of revenues  increased  1.4% to 33.3% in
2003 from 31.9% in 2002.  The $0.1 million  increase in cost of revenues and the
1.4%  increase in percentage  of total  revenues  resulted from higher sales and
changes in product mix.

     Selling,  General and Administrative.  Selling,  general and administrative
expenses decreased $0.5 million,  or 17.9%, to $2.2 million for the three months
ended March 31,  2003 from $2.7  million  for the three  months  ended March 31,
2002. As a percentage of total net revenues, selling, general and administrative
expenses  were 40.5% for the three months ended March 31, 2003 and 51.4% for the
three months ended March 31, 2002.  This decrease was  attributable to synergies
derived from cost savings  initiatives  completed during 2002. Cost savings were
primarily  realized through the  centralization of administrative  functions and
elimination of non-essential facilities and excess capacity.

     Research and  Development.  Research  and  development  expenses  decreased
approximately $0.1 million, or 11.8%, to $0.8 million for the three months ended
March 31, 2003 from $0.9 million for the three months ended March 31, 2002. As a
percentage of total net revenues, research and development expenses decreased to
11.8% for the three  months ended March 31, 2003 from 18.0% for the three months
ended March 31, 2002. The decrease in research and development  expenditures was
primarily due to the Company's  realignment of research efforts between existing
and future platform  products.  As development of new product platforms advance,
the Company expects  research and  development  expenses to rise above the 11.8%
experienced for the three months ended March 31, 2003.

     Amortization and Depreciation. Amortization and depreciation was materially
unchanged  at $0.4  million for the three  months ended March 31, 2003 and March
31, 2002.

     Operating income (Loss). The Company's net income from operations increased
from a loss of $0.5  million for the three  months ended March 31, 2002 to a net
profit of $0.2 million for the three months ended March 31, 2003. This change to
profitability  from a loss from  continuing  operations  is due to the  combined
effect of the increase in revenue and  reductions in all  components of expenses
including  selling,  general and  administrative,  research and  development and
amortization expenses.

     Other Income  (Expense).  Interest  expense related to borrowings under the
Company's  line of  credit  agreements,  loans  and  capital  lease  obligations
increased  $6,000 to $174,000 for the three months ended March 31, 2003 compared
to $168,000 for the three months  ended March 31, 2002.  Other income  increased
$345,000 to $343,000 from an expense of $2,000 in the first quarter of 2002. The
increase is principally attributable to receipt of a $295,000 cash settlement of
the Columbia  Home Health  lawsuit  combined  with  interest  income  related to
customer  finance  charges.  The  increase in net  interest  expense in 2003 was
caused by an increase in interest bearing debt in 2002.

     Income Taxes. The Company has not incurred or paid any substantial  Federal
income  taxes since  March  2000.  At December  31,  2002,  CareCentric  had net
operating loss ("NOL")  carryforwards  for federal and state income tax purposes
of $38.5 million. Such losses expire beginning in 2008, if not utilized. The Tax
Reform Act of 1986, as amended,  contains  provisions that limit the NOL and tax
credit carryforwards  available to be used in any given year when certain events


                                       23
<PAGE>

occur,  including  additional  sales of equity  securities  and other changes in
ownership.  As a result,  certain of the NOL  carryforwards may be limited as to
their  utilization in any year. The Company has concluded that it is more likely
than not that these NOL  carryforwards  will not be realized based on a weighing
of available  evidence at March 31, 2003, and  accordingly,  a 100% deferred tax
valuation allowance has been recorded against these assets.

BACKLOG

     The  Company's  backlog   associated  with  its  software   operations  was
approximately  $3.7  million  at March 31,  2003  compared  to $3.8  million  at
December 31, 2002. Backlog consists of the unrecognized portion of contractually
committed  software  license fees,  hardware,  estimated  installation  fees and
professional services. The length of time required to complete an implementation
depends on many factors outside the control of the Company,  including the state
of the customer's  existing  information  systems and the customer's  ability to
commit  the   personnel   and  other   resources   necessary   to  complete  the
implementation  process.  As a result,  the  Company  may be  unable to  predict
accurately  the amount of revenue it will  recognize in any period and therefore
can make no  assurances  that the amounts in backlog will be  recognized  in the
next three months.


LIQUIDITY AND CAPITAL RESOURCES

     In November  1999,  CareCentric,  prior to the merger with MCS and when its
pre-merger  name was Simione Central  Holdings,  Inc.  (Simione),  received $1.6
million of loans from Mestek,  Inc.  ($850,000) and two  stockholders of Simione
($750,000),  Barrett C. O'Donnell and David Ellis,  to fund operating  needs and
continue the execution of product  strategies in the fourth quarter of 1999. The
$850,000  loan from Mestek was  converted  into  850,000  shares of newly issued
Series C  Preferred  stock of  Simione at the  closing of the MCS merger  having
170,000  common  shares  votes  and  which  were  entitled  to an  11.0%  annual
cumulative dividend. The loan from Mr. O'Donnell along with $100,000 in deferred
salary were exchanged for a $600,000 subordinated note,  convertible into common
stock at $2.51 per share,  with  interest at 9% per annum and a maturity date of
August 8, 2005.  In January  2002,  this loan was amended to change the interest
rate to prime plus two  percent  and to change the terms of payment of  interest
for 2002 to require  that  one-half of the accrued  interest be timely paid each
quarter and the balance to be paid on December 31, 2003 or to be converted  into
an additional convertible note. The loan from Dr. Ellis was paid in full on July
12, 2000 from the credit facility provided by Wainwright Bank and Trust Company.
See Note 5 to the accompanying Consolidated Financial Statements.

     In February  2000,  Simione  received an  additional  $1.0  million of loan
proceeds from Mestek.  The loan proceeds were used to fund  Simione's  operating
needs until  completion  of the merger with MCS,  and carried the same terms and
security as a $3.0 million loan received from Mestek in September 1999. On March
7, 2000,  the merger with MCS was completed and Mestek's  notes  evidencing  the
$1.0 million and $3.0 million loans, together with an additional $2.0 million in
cash from Mestek,  were converted into Series B Preferred Stock and a warrant to
purchase  CareCentric  common  stock as more  fully  explained  in Note 5 to the
accompanying  Consolidated  Financial  Statements.   The  consolidation  of  the
accounts  receivable  of MCS into  the then  outstanding  balance  of  Simione's
accounts receivable provided an additional $1.5 million of borrowing capacity on
the $5.0 million bank line of credit established by Simione in September 1999.

     Immediately after the Simione/MCS  merger on March 7, 2000, the Company had
cash and cash  equivalents of $3.5 million and short and long term debt from all
sources  of  $2.5  million,   for  a  positive  net   cash/(debt)   position  of
approximately $1.0 million.  In order to supplement its capital  resources,  the
Company,  subsequent to the merger,  undertook a search for  additional  capital
resources. On June 22, 2000, the Company closed a financing with John E. Reed, a
CareCentric  director  and the Chief  Executive  Officer of Mestek,  of up to $7
million.  The  financing  consisted  of $1 million  in equity,  and a $6 million
subordinated revolving line of credit facility, convertible into common stock of
CareCentric,  with a 9% interest rate and five-year maturity.  On July 12, 2000,
the Company closed a financing with Wainwright Bank and Trust Company for access
to a $6.0 million revolving line of credit, which was guaranteed by Mestek, Inc.
These  three  transactions  are  described  in  greater  detail in Note 5 to the
accompanying  Consolidated  Financial Statements and resulted in the creation of
the following credit and debt facilities and preferred equity securities:



                                       24
<PAGE>

<TABLE>
<CAPTION>
<S>                                        <C>                 <C>                       <C>
                         CREDIT AND DEBT AND PREFERRED EQUITY SECURITIES IN JULY 2000
----------------------------------------------------------------------------------------------------------------
                 SOURCE                        FUNDING                  FORM                  DATE CLOSED
-----------------------------------------  -----------------  -------------------------  -----------------------

Barrett C. O'Donnell                        $      600,000    Convertible Note             November 11, 1999

Mestek, Inc.                                $    6,000,000    Convertible Preferred          March 7, 2000
                                                              Stock Series B; 9%
                                                              cumulative dividend

Mestek, Inc.                                $      850,000    Preferred Stock Series         March 7, 2000
                                                              C; 11% cumulative
                                                              dividend

John E. Reed                                $    1,000,000    Convertible    Preferred       June 22, 2000
                                                              Stock   Series   D;   9%
                                                              cumulative dividend

John E. Reed                                $    6,000,000    Line of Credit                 June 22, 2000

Wainwright Bank and Trust Company           $    6,000,000    Line of Credit                 July 12, 2000
                                           -----------------

                                            $   20,450,000
                                           =================
</TABLE>

     Throughout  2000 and 2001,  advances  were made on the John E. Reed line of
credit such that on December 31,  2001,  the  outstanding  amount under the Reed
Credit  Facility was $3.5  million,  $1.0 million of which was  participated  to
Mestek, and the balance of which was retained by Mr. Reed. On December 31, 2001,
the facility was amended to change the interest  rate to prime plus two percent,
to change the  payment  terms for unpaid  2001  interest  to require  payment at
December 31, 2003 or to convert the  outstanding  unpaid  interest to additional
convertible  notes in the amount of $184,438 at the option of Mr.  Reed,  and in
the  amount of  $40,463  at the  option of  Mestek,  and to change  the terms of
payment  of  interest  for 2002 to require  that  one-half  be timely  paid each
quarter and the balance to be paid on December  31, 2003 or to be  converted  to
additional convertible notes.

     During  2000 and  2001,  the  Company  became  obligated  under an 18 month
unsecured  promissory  note in the  principal  amount of  $1,019,000  payable to
Mestek which earned interest at prime plus one and one half percent (1.5%), with
interest payable semiannually and which matured on September 30, 2003. This note
covers funds  advanced by Mestek to  CareCentric  to cover  payroll and accounts
payable obligations  incurred by the Company during the period of its transition
of senior lenders from Silicon Valley Bank to Wainwright Bank and Trust Company,
accrued and unpaid interest thereon and the unreimbursed portion of Mr. R. Bruce
Dewey's salary for the periods from November 9, 1999 to October 31, 2001.

     Also during 2000, 2001 and the first quarter of 2002, the Company  incurred
operating  losses  resulting  from  numerous  factors,  including  the uncertain
operating condition of its customers due to the negative effects of implementing
the current government limits over home medical cost reimbursement,  higher than
anticipated   costs  of  developing,   implementing  and  supporting  The  Smart
Clipboard(R)   product  and  slower  than   expected   completion  of  effective
integration of the MCS and Simione  Central  organizations.  In addition,  sales
revenue in 2000 was lower than planned in the core MestaMed(R), DME VI and STAT2
products while new sales of The Smart  Clipboard(R)  and Tropical  products (now
discontinued) did not develop as quickly as projected.

     On April 8, 2002,  the  Company  secured  two  commitments  for  additional
financing,  from existing shareholders John Reed and Mestek. Mr. Reed and Mestek
provided $871,117 and $1,092,000 in short-term debt financing, respectively.

     Also on April 8, 2002,  the  Company  initiated a  recapitalization  of its
interest bearing debt and preferred  equity  instruments.  The  recapitalization
plan was  approved  by the  Company's  shareholders  at the June 6, 2002  annual
stockholders meeting and was completed on July 1, 2002. See Notes 5 and 7 to the
accompanying Financial Statements for the impact of the recapitalization plan on
each  class  of debt  and  preferred  stock.  Following  the  completion  of the
recapitalization  plan on July 1, 2002, the Company's credit and debt facilities
and related preferred equity securities consist of the following:



                                       25
<PAGE>

<TABLE>
<CAPTION>
<S>                                        <C>              <C>                              <C>
                        CREDIT AND DEBT AND PREFERRED EQUITY SECURITIES AT MARCH 31, 2003
------------------------------------------------------------------------------------------------------------------
                 SOURCE                        FUNDING                    FORM                    DATE CLOSED
-----------------------------------------  ---------------- -------------------------------- ---------------------

Barrett C. O'Donnell                        $     600,000   Convertible    Note   maturing     November 11, 1999
                                                            June 30, 2007

Mestek, Inc.                                $   6,000,000   Convertible Preferred Stock          March 7, 2000
                                                            Series B; 9% cumulative
                                                            dividend

John E. Reed                                $   1,000,000   Convertible   Preferred  Stock       June 22, 2000
                                                            Series   D;   9%    cumulative
                                                            dividend

Mestek, Inc.                                $   4,000,000   Convertible deferred interest         July 1, 2002
                                                            Note maturing June 30, 2007

John E. Reed                                $   3,555,555   Convertible deferred interest         July 1, 2002
                                                            Note maturing June 30, 2007

John E. Reed                                $     103,818   Capitalized deferred interest         July 1, 2002
                                                            Note maturing June 30, 2007

Wainwright Bank and Trust Company           $   6,000,000   Line of Credit                        July 12, 2000
                                           ----------------

                                            $  21,259,373
                                           ================
</TABLE>

     The John E. Reed and Mestek debt and equity  amounts  were fully  funded to
the  Company as of July 1, 2002.  During the third and fourth  quarters of 2002,
following  the  recapitalization  of July 1, 2002,  the  Company  paid back $1.5
million on the  Wainwright  Bank and Trust  Company  line of credit.  During the
first quarter of 2003, the Company paid back $0.4 million on the Wainwright Bank
and Trust Company line of credit,  resulting in an  outstanding  balance of $4.1
million at March 31, 2003.

     During the month of April 2003,  the  Company  has paid back an  additional
$0.4 million on the Wainwright Bank line of credit, resulting in $2.3 million of
unused  credit  capacity  as  of  April  30,  2003.  The  Company  believes  the
combination  of the  funds  available  from  cash to be  generated  from  future
operations  and the  Wainwright  Bank  facility  will be  sufficient to meet the
Company's  operating  requirements  through at least March 31, 2004, assuming no
material  adverse  change in the operation of the Company's  business.  See also
Note 11 to Financial Statements.

     The  table  below  summarizes  the  Company's  debt and  other  contractual
obligations at March 31, 2003:


<TABLE>
<CAPTION>
<S>                             <C>               <C>               <C>             <C>
                                                       PAYMENTS DUE BY PERIOD
                                ----------------  ---------------------------------------------------
   CONTRACTUAL OBLIGATIONS            TOTAL        LESS THAN 1 YEAR    2-3 YEARS       4 - 6 YEARS
                                ----------------  ---------------------------------------------------

   Long-Term Debt                $    8,647,000    $            -   $           -   $      8,647,000
   Capital Lease Obligations                  -                 -               -                  -
   Operating Leases                   2,926,000           832,000       1,366,000            728,000
   Line of Credit                     4,125,000         4,125,000               -                  -
   Other Long-Term Obligations        1,177,000         1,177,000               -                  -
                                ----------------  ---------------- --------------- ------------------
   Total Contractual Cash
     Obligations                 $   16,875,500    $    6,134,500   $   1,366,000   $      9,375,000
                                ================  ================ =============== ==================
</TABLE>

     As of March 31,  2003,  the Company had negative  working  capital of $11.7
million and cash equivalents of $1.2 million.  The Company's current liabilities
as of March 31, 2003  include  customer  deposits of $1.4  million and  unearned
revenues of $4.6 million.

     Net cash provided by operating  activities for the three months ended March
31, 2003 was $0.6 million compared to a use of cash by operating  activities for
the three months ended March 31, 2002 of $1.2 million.

                                       26
<PAGE>

     There were no cash flows from financing  activities during the three months
ended March 31,  2003.  Inflation  has not had,  and is not  expected to have, a
material impact on the Company's operations. If inflation increases, the Company
will attempt to increase its prices to offset increased  expenses.  No assurance
can be given,  however, that the Company will be able to adequately increase its
prices in response to inflation.

IMPACT OF NEW ACCOUNTING STANDARDS

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business  Combinations"  and SFAS  No.  142,  "Goodwill  and  Other  Intangible
Assets,"  SFAS No. 141  addresses  financial  accounting  and  reporting for all
business  combinations and requires that all business  combinations entered into
subsequent to June 2001 be recorded  under the purchase  method.  This statement
also  addresses  financial  accounting  and  reporting  for  goodwill  and other
intangible  assets acquired in a business  combination at acquisition.  SFAS No.
142 addresses financial  accounting and reporting for intangible assets acquired
individually or with a group of other assets at acquisition. This statement also
addresses  financial  accounting and reporting for goodwill and other intangible
assets  subsequent to their  acquisition.  These  statements were adopted by the
Company on January 1, 2002. Under SFAS No. 142, goodwill is no longer amortized.
In the place of amortization, the Company is required to periodically review the
valuation  of the  Company's  intangible  assets  using a  discounted  cash flow
estimation   approach.   Following  the  accounting  for  impairment   discussed
immediately  below,  which has been made  under the rules of SFAS No.  121,  the
effect of adopting  SFAS No. 141 and 142 was limited to changes in  amortization
expense for the periods  after  December 31, 2001.  Additionally,  the assembled
workforce intangible asset has been  recharacterized as goodwill,  which will no
longer be amortized  under the rules of SFAS No. 142. There has been no event or
indicator identified by the Company through April 30, 2003 which indicates there
has been any  impairment  in the  $500,000  value of  goodwill  included  in the
Company's Statement of Financial Condition as of March 31, 2003.

     Accounting for  impairment.  For the years ended  December 31, 2002,  2001,
2000 and 1999, the Company  reported its accounting for intangible  assets under
SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived  Assets  to  Be  Disposed  Of",  and  the  accounting  and  reporting
provisions  of APB Opinion No. 30.  Under the rules of SFAS No. 121, the Company
performs periodic analysis to determine if the Company's  intangible assets have
been impaired using a combination of discounted and undiscounted  estimated cash
flow estimations. In the fourth quarter of 2001, the Company determined that the
combination of new technologies  being  integrated in the Company's  current and
future products would result in its existing  product  platforms  having smaller
future revenue generation capability.  Additionally, the Company determined that
the continued  support of existing  products  while  migrating to new technology
platforms  would  result  in a lower  estimated  cash  value to the  Company  of
existing  products.  The resulting  impairment to the  intangible  assets of the
Company  was $11.8  million.  As  further  detailed  in Note 4 of the  Financial
Statements,  the intangible assets of the Company,  after the impairment charge,
will be Developed Technologies, Customer Base and Assembled Workforce.

     On  October  3,  2001,  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or Disposal  of  Long-Lived  Assets,"  that  replaced  SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To
Be Disposed  Of." The primary  objectives  of this  standard were to develop one
accounting  model  based  on the  framework  established  in  SFAS  No.  121 for
long-lived  assets  to be  disposed  of by  sales  and  to  address  significant
implementation issues. The accounting model for long-lived assets to be disposed
of by sale applies to all long-lived assets,  including discontinued operations,
and replaces the provisions of the Accounting  Principles Board (APB Opinion No.
30,  Reporting  Results of  Operations-Reporting  the  Effects of  Disposal of a
Segment of a Business) for the disposal of segments of a business.  SFAS No. 144
requires  that those  long-lived  assets be  measured  at the lower of  carrying
amount or fair  value  less cost to  determine  whether  such  assets  should be
reported in continuing  operations  or in  discontinued  operations.  Therefore,
discontinued  operations  will no longer be measured at net realizable  value or
include amounts for operating losses that have not yet occurred.  The provisions
of SFAS No.  144 were  adopted by the  Company  effective  January 1, 2002.  The
impact of those  provisions  were not  material to the  Company's  statement  of
financial condition and results of operations.

     In April  2002,  FASB issued SFAS No. 145.  This  Statement  rescinds  FASB
Statement No. 4, Reporting Gains and Losses from  Extinguishment of Debt, and an
amendment of that Statement, FASB Statement No. 64, Extinguishments of Debt Made
to Satisfy Sinking-Fund Requirements.  SFAS No. 145 also rescinds FASB Statement
No. 44,  Accounting  for  Intangible  Assets of Motor  Carriers  and amends FASB
Statement No. 13, Accounting for Leases,  to eliminate an inconsistency  between
the  required  accounting  for  sale-leaseback  transactions  and  the  required


                                       27
<PAGE>

accounting for certain lease  modifications  that have economic effects that are
similar to sale-leaseback transactions.  SFAS No. 145 also amends other existing
authoritative  pronouncements  to make various  technical  corrections,  clarify
meanings, or describe their applicability under changed conditions.  The Company
does not  believe  SFAS No.  145 will have a  material  effect on its  financial
statements.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal.  SFAS No. 146 eliminates the definition and  requirements
for recognition of exit costs in EITF Issue No. 94-3. SFAS No. 146 requires that
a  liability  for a cost  associated  with  an  exit  or  disposal  activity  be
recognized  and  measured  initially  at fair value only when the  liability  is
incurred.  SFAS No. 146 is effective  for exit or disposal  activities  that are
initiated  after  December 31,  2002.  The Company does not believe SFAS No. 146
will have a material effect on its financial statements.

     On December 31, 2002, FASB issued FASB No. 148, "Accounting for Stock-Based
Compensation--Transition  and Disclosure."  This Statement amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition  for companies  that  voluntarily  change to the  fair-value-based
method of accounting for stock-based employee  compensation.  In addition,  this
Statement  amends  the  disclosure  requirements  of  FASB  No.  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results.  The Company does not believe FAS 148 will have
a material effect on its financial statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

     As of March 31, 2003,  the Company's  obligations  include fixed rate notes
payable and a variable  rate line of credit bank note with  aggregate  principal
balances of approximately  $12.8 million,  which mature at various dates through
2007.  The Company is exposed to the market  risk of  significant  increases  in
future interest rates.  Each incremental point change in the prime interest rate
would  correspondingly  increase or decrease the Company's  interest  expense by
approximately $41,125 per year.

     At March 31, 2003,  the Company had accounts  receivable  of  approximately
$4.3 million net of an  allowance  for doubtful  accounts of $1.1  million.  The
Company  is  subject  to a  concentration  of credit  risk  because  most of the
accounts receivable are due from companies in the home health industry.

ITEM 4.  CONTROLS AND PROCEDURES.

     In the 90-day period before the filing of this report,  the Chief Executive
and Chief Financial  Officers of the Company have evaluated the effectiveness of
the Company's disclosure controls and procedures.  These disclosure controls and
procedures are those controls and other procedures management  maintains,  which
are designed to ensure that all of the  information  required to be disclosed by
the  Company  in all its  periodic  reports  filed  with  the  SEC is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms.  Disclosure  controls  and  procedures  include,  without
limitation, controls and procedures designed to ensure that information required
to be  disclosed  by the Company in its  reports  filed or  submitted  under the
Securities  Exchange  Act of 1934 is  accumulated  and  communicated  to Company
management,  including the Chief  Executive and Chief  Financial  Officer of the
Company,  as  appropriate  to  allow  those  persons  to make  timely  decisions
regarding required disclosure.

     Subsequent to April 30, 2003,  when the disclosure  controls and procedures
were  evaluated,  there have not been any  significant  changes in the Company's
disclosure  controls or procedures or in other factors that could  significantly
affect such controls or  procedures.  No  significant  deficiencies  or material
weaknesses in the controls or procedures were detected, so no corrective actions
needed to be taken.




                                       28
<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

     Neither CareCentric nor any of its subsidiaries is currently a party to any
legal proceedings which would be material to the business or financial condition
of the Company on a consolidated basis.

     Simione Central Holding,  Inc., a subsidiary of CareCentric now known as SC
Holding,  Inc.  ("SC  Holding")  was  one  of  several  defendants  named  in  a
"whistleblower"  lawsuit related to alleged Medicare fraud filed under the False
Claims  Act in the  Northern  District  of  Georgia  (U.S.  ex re.  McLendon  v.
Columbia/HCA  Healthcare  Corp., et al., No. 97-VC-0890 (N.D. Ga.)). The lawsuit
involves alleged claims that SC Holding  allegedly  participated in a conspiracy
with Columbia/HCA and other third parties to bill inflated and fraudulent claims
to Medicare.  On July 21, 1999, the Justice Department issued notice that it had
elected  not to join  in the  claims  asserted  against  SC  Holding  by  Donald
McLendon,  who  is a  former  employee  of  an  unrelated  service  provider  to
Columbia/HCA.  Although  the Justice  Department  joined the suit with regard to
other  defendants,  it  specifically  declined  to  intervene  with regard to SC
Holding.  In late 2000,  CareCentric was advised by Mr. McLendon's attorney that
notwithstanding the declination by the Justice Department,  Mr. McLendon intends
to pursue "whistleblower" claims against SC Holding directly.  Through April 30,
2003,  no such  action has been taken and  nothing  further  has been heard from
McLendon's  attorney for over one year.  Management believes that this claim has
been abandoned.  In the event a claim is asserted,  however,  CareCentric and SC
Holding intend to vigorously defend against it.

     In January 2003 the Company reached settlement with Columbia Home Health on
litigation  between the Company and  Columbia  which was begun before the merger
with MCS Inc. Under the final terms of settlement,  the Company  received a cash
payment in the amount of $295,000. Item 2. Change in Securities.

     On August 22, 2002, the Company's common stock was delisted from the Nasdaq
SmallCap Market and has been listed on the Over the Counter Bulletin Board since
that date.  The  delisting  from  Nasdaq  was the  result of  certain  financial
indicators, as reported in the Company's December 31, 2002 financial statements,
were below applicable minimum  requirements issued by Nasdaq to maintain listing
on the Nasdaq SmallCap Market.  The Company's  trading price during 2002 and its
write-off of certain non-cash,  impaired  intangible  assets  contributed to the
delisting by Nasdaq.

     On July 1, 2002,  the Company  cancelled and reissued  warrants to purchase
490,396 and 400,000 shares of its common stock to Mestek,  Inc., pursuant to the
terms of the  recapitalization  described in more detail in Notes 5 and 7 to the
Financial  Statements  included herein.  The reissued  warrants have an exercise
price of $1.00 per share and expire in June 2004. In reissuing  warrants without
registration,  the Company  takes the position  that this  transaction  does not
constitute  an  "offer",  "offer  to  sell" or  "sale"  under  Section  5 of the
Securities  Act  of  1933,  and  also  relies  on  the  on  the  exemption  from
registration provided in Section 4(2) of the Securities Act of 1933, as amended,
and Rule 506 of Regulation D promulgated  thereunder.  Mestek,  the recipient of
the warrants,  is an accredited  investor as defined in Regulation D, is a major
shareholder  of the  Company,  and has complete  access to  financial  and other
information pertaining to the Company.

Item 2.  Change in Securities

None

Item 3.  Defaults Upon Senior Securities.

None.

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

None.

Item 5.  Other Information.

None.


                                       29
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K.

     (a)  Exhibits:

          3.1  Amended and Restated  Certificate of Incorporation of the Company
               (Incorporated  by  reference  to  Exhibit  3.4 of  the  Company's
               Quarterly  Report on Form 10-Q for the  quarter  ended  March 31,
               2002 (File No. 000-22162)).

          3.2  Certificate of Ownership and Merger of Simione Central  Holdings,
               Inc. with and into CareCentric Inc. (Incorporated by reference to
               Exhibit 3.2 of the Company's  Current Report on Form 8-K dated as
               of January 31, 2001 (file No. 000-22162)).

          3.3  Bylaws of the Company dated as of October 25, 2002  (Incorporated
               by reference to Exhibit 3.3 of the Company's  Quarterly Report on
               Form 10-Q for the quarter ended September 30, 2002  (Registration
               Number 000-22162).

          3.4  Certificate of  Designations,  Preferences and Rights of Series E
               Preferred  Stock of the Company  (Incorporated  by  reference  to
               Exhibit 3.4 of the  Company's  Annual Report on Form 10-K for the
               year ended December 31, 2001 (File No. 000-22162)).

          3.5  Certificate  of  Amendment  of   Certificate   of   Designations,
               Preferences and Rights of Series B Preferred Stock of the Company
               (Incorporated  by  reference  to  Exhibit  3.5 of  the  Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30, 2002
               (Registration Number 000-22162)).

          3.6  Certificate  of  Amendment  of   Certificate   of   Designations,
               Preferences and Rights of Series D Preferred Stock of the Company
               (Incorporated  by  reference  to  Exhibit  3.6 of  the  Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30, 2002
               (Registration Number 00022162)).

          99.1 Certification of Periodic Financial Reports.

          99.2 Proposal Letter dated January 28, 2003 (Incorporated by reference
               to Exhibit 99.2 of the Company's Current Report on Form 8-K filed
               February 4, 2003 (Registration Number 000-22162)).

          99.3 Revised  Proposal  Letter dated April 23, 2003  (Incorporated  by
               reference to Exhibit 99.2 of the Company's Current Report on Form
               8-K filed May 1, 2003 (Registration Number 000-22162)).

     (b)  Reports on Form 8-K:

               On February 4, 2003,  the Company filed a Current  Report on Form
               8-K  reporting  an offer  had been  received  proposing  a merger
               transaction between the Company and Borden Associates, Inc.

               On February 24, 2003, CareCentric, Inc. filed a Current Report on
               Form 8-K reporting the  availability of its billing and operation
               management  system,   AC-CURA(TM),   for  the  home  health  care
               community.

               On March 12, 2003,  CareCentric,  Inc.  filed a Current Report on
               Form 8-K  regarding  the report of its Annual Report of Financial
               Results for the year ended December 31, 2002.

               On May 1, 2003, CareCentric,  Inc. filed a Current Report on Form
               8-K  reporting  a revised  offer had been  received  proposing  a
               merger  transaction  between the  Company and Borden  Associates,
               Inc.



                                       30
<PAGE>

                                   SIGNATURES

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


                                      CARECENTRIC, INC.


Dated:  May 9, 2003                   By:/s/ George M. Hare
                                         --------------------------------
                                               GEORGE M. HARE
                                               Senior Vice President and
                                               Chief Financial Officer
                                               (Principal Financial Officer)



                                       31
<PAGE>

       CareCentric, Inc., Certification for Quarterly Report on Form 10-Q


I, John R. Festa, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of CareCentric, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 9, 2003
                                   /s/ John R. Festa
                                   -----------------------------------
                                   John R. Festa
                                   President and Chief Executive Officer



                                       32
<PAGE>

       CareCentric, Inc., Certification for Quarterly Report on Form 10-Q


I, George M. Hare, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of CareCentric, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 9, 2003

                                         /s/ George M. Hare
                                         -----------------------------------
                                         George M. Hare
                                         Chief Financial Officer



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