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 JUNE 30, 2000

                                       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

                         SIMIONE CENTRAL HOLDINGS, 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.)

             6600 POWERS FERRY ROAD                     30339
             ATLANTA, GEORGIA                           (zip code)
             (Address of principal
             executive offices)

             (Registrant's telephone number,
             including area code)                       (770) 644-6700


                                       N/A
              (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  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest practicable date:

                                                Outstanding at
        Class                                   7/31/2000
        -----                                   ---------

        COMMON STOCK, $.001 PAR VALUE           3,849,816 SHARES



<PAGE>


                         SIMIONE CENTRAL HOLDINGS, INC.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX


PART I.   FINANCIAL INFORMATION

Item 1.   Consolidated Financial Statements

          Consolidated  Balance Sheets - June 30, 2000  (unaudited) and December
          31, 1999 (audited).

          Consolidated  Statements  of  Operations - Three Months and Six Months
          Ended June 30, 2000 and 1999 (unaudited).

          Consolidated  Statements  of  Shareholders'  Equity - Six Months Ended
          June 30, 2000 (unaudited).

          Consolidated  Statements  of Cash Flows - Three  Months and Six Months
          Ended June 30, 2000 and 1999 (unaudited).

          Notes  to   Consolidated   Financial   Statements   -  June  30,  2000
          (unaudited).

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


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



                                   SIGNATURES
                                   ----------


                                      2
<PAGE>



                         SIMIONE CENTRAL HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                 <C>                <C>


                                                     JUNE 30,            DECEMBER 31,
                                                    ---------------    -----------------
                                                       2000                  1999
                                                    ---------------    -----------------
                                                    (UNAUDITED)           (AUDITED)

             ASSETS

 Current assets:
     Cash and cash equivalents                       $   1,999,000         $     47,000
     Accounts receivable, net of allowance
     for doubtful accounts of $518,000 and
       and $166,000 respectively                         8,610,000            4,329,000
     Prepaid expenses and other current assets             845,000              273,000
                                                    ---------------    -----------------
       Total current assets                             11,454,000            4,649,000

Purchased software, furniture and equipment,
net                                                      2,241,000              920,000
Intangible assets, net                                  25,563,000                    -
Other assets                                               293,000            1,127,000
                                                    ---------------    -----------------
       Total assets                                  $  39,551,000        $   6,696,000
                                                    ===============    =================


             LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Line of credit                                  $   1,413,000          $         -
     Notes Payable                                       1,900,000                    -
     Accounts payable                                    2,294,000            1,137,000
     Accrued compensation expense                          621,000              393,000
     Accrued liabilities                                 6,901,000            1,334,000
     Customer deposits                                   2,367,000              419,000
     Unearned revenues                                   5,887,000            2,908,000
                                                    ---------------    -----------------
       Total current liabilities                        21,383,000            6,191,000

Accrued liabilities, less current portion                1,021,000                    -

Notes payable long-term                                    500,000                    -

Commitments and contingencies

Shareholders' equity:
Preferred Stock; 10,000,000 shares authorized
     Series B Preferred, $.001 par value;
       5,600,000  issued and outstanding                     5,000                    -
     Series C Preferred, $.001 par value;
       850,000  issued and outstanding                       1,000                    -
     Series D Preferred, $.001 par value;
       398,000  issued and outstanding                           -                    -
     Common stock, $.001 par value; 20,000,000
     shares authorized;
       3,850,000 shares issued and outstanding at
       June 30, 2000
       1,490,000 shares issued and outstanding at
       December 31, 1999                                     4,000                1,000

     Additional paid-in capital                         21,071,000            1,260,000
     Stock warrants                                      1,000,000                    -
     Accumulated deficit                                (5,434,000)            (756,000)
                                                    ---------------    -----------------
       Total shareholders' equity                       16,647,000              505,000
                                                    ---------------    -----------------

       Total liabilities and shareholders'equity     $  39,551,000        $   6,696,000
                                                    ===============    =================

</TABLE>

See notes to consolidated financial statements.
The above  financial  statements  reflect the fact that for accounting  purposes
MCS, Inc. is deemed to have acquired Simione Central Holdings,  Inc. on March 7,
2000,  the date of the merger,  as more fully  explained in Notes 1 and 2 to the
Consolidated Financial Statements.


                                       3
<PAGE>


                                              SIMIONE CENTRAL HOLDINGS, INC.
                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                                       (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                              <C>                <C>                 <C>                  <C>

                                                  THREE MONTHS ENDED JUNE 30,              SIX MONTHS ENDED JUNE 30,
                                              -----------------------------------     ------------------------------------
                                                   2000                1999                2000                 1999
                                              ---------------     ---------------     ----------------     ---------------
Net revenues:                                     $6,257,000         $ 4,682,000         $ 10,258,000         $ 8,722,000

Costs and expenses:
    Cost of revenues
                                                   3,954,000           2,923,000            6,501,000           5,330,000
    Selling, general and administrative            2,807,000           1,114,000            4,259,000           2,167,000
    Research and development                       1,780,000             135,000            2,491,000             531,000
    Amortization and depreciation                  1,183,000              56,000            1,610,000             113,000
                                              ---------------     ---------------     ----------------     ---------------
         Total costs and expenses                  9,724,000           4,228,000           14,861,000           8,141,000
                                              ---------------     ---------------     ----------------     ---------------

    (Loss) income from operations                 (3,467,000)            454,000           (4,603,000)            581,000

Other (expense) income:
    Other (expense) income                                 -                   -               (6,000)                  -
    Interest expense                                (189,000)                  -             (266,000)                  -
    Interest and other income                         28,000               6,000               40,000              15,000
                                              ---------------     ---------------     ----------------     ---------------
Net (loss)  income before taxes                   (3,628,000)            460,000           (4,835,000)            596,000
                                              ---------------     ---------------     ----------------     ---------------

    Income tax benefit (expense)                            -           (178,000)              157,000           (231,000)

                                              ---------------     ---------------     ----------------     ---------------
Net  (loss) income from continuing
operations                                        (3,628,000)            282,000            (4,678,000)           365,000
                                              ---------------     ---------------     =================    ===============
Discontinued operation
    Income from operations of discontinued
         segment before taxes                              -              69,000                     -             197,000

    Applicable tax expense                                 -              27,000                     -              77,000

Net income from operations of discontinued    ---------------     ---------------     ----------------     ---------------
     segment                                               -              42,000                     -             120,000
                                              ---------------     ---------------     ----------------     ---------------
       Net  (loss) income                        $(3,628,000)          $ 324,000         $ (4,678,000)           $ 485,000
                                              ===============     ===============     ================     ===============

Net (loss) income per share - basic and
diluted
    From continuing operations                     $   (0.94)          $    0.19           $    (1.57)           $    0.24
                                              ===============     ===============     ================     ===============
Weighted average common shares -
    basic and diluted                              3,850,000           1,490,000            2,983,000            1,490,000
                                              ===============     ===============     ================     ===============
Net (loss) income per share - basic and
diluted
    From discontinued operations                    $      -           $    0.03             $      -           $    0.08
                                              ===============     ===============     ================     ===============
Weighted average common shares -
    basic and diluted                              3,850,000           1,490,000            2,983,000           1,490,000
                                              ===============     ===============     ================     ===============
Net (loss) income per share - basic and
diluted
    From discontinued operations                   $   (0.94)          $    0.22           $    (1.57)           $    0.33
                                              ===============     ===============     ================     ===============
Weighted average common shares -
    Basic and diluted                               3,850,000          1,490,000            2,983,000            1,490,000
                                              ===============     ===============     ================     ===============

</TABLE>

See notes to consolidated financial statements.
The above  financial  statements  reflect the fact that for accounting  purposes
MCS, Inc. is deemed to have acquired Simione Central Holdings,  Inc. on March 7,
2000,  the date of the merger,  as more fully  explained in Notes 1 and 2 to the
Consolidated Financial Statements.

                                       4
<PAGE>



<TABLE>
<CAPTION>
                                                           SIMIONE CENTRAL HOLDINGS, INC.
                                              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

                                                      FOR THE SIX MONTHS ENDED JUNE 30, 2000
<S>                                 <C>        <C>        <C>          <C>     <C>         <C>          <C>            <C>
                                          Common                Preferred                   Additional                     Total
                                    -----------------     -------------------                Paid-In    Accumulated    Shareholders'
                                    Shares      Stock      Shares      Stock     Capital    Warrants      Deficit         Equity
                                    -----------------     -------------------  ----------- ----------- -------------- --------------
Balance at December 31,                        $1,000                 $    -   $ 1,260,000              $   (756,000)    $  505,000
1999                                 1,000                      -

MCS, Inc. shares
eliminated in merger                (1,000)    (1,000)                                                                       (1,000)


Simione Central Holdings, Inc.
Shares post merger, $.001
par value                        3,850,000      4,000           -          -    19,811,000    1,000,000                  20,815,000


Issuance of $.001 par value
preferred stock in connection
with merger                              -          -   6,450,000      6,000                                        -         6,000
Series B, 5,600,000 shares
Series C,  850,000 shares
Series D,  398,000 shares
                                                                           -

Net loss
                                         -          -           -          -             -            -   (4,678,000)    (4,678,000)
                                ---------- ---------- ----------- ----------   -----------  -----------  ------------  -------------

Balance at June 30, 2000         3,850,000     $4,000   6,450,000     $6,000   $21,071,000   $1,000,000  $(5,434,000)   $16,647,000
                                ========== ========== =========== ==========   ===========  ===========  ============  =============

</TABLE>


See notes to consolidated financial statements.
The above  financial  statements  reflect the fact that for accounting  purposes
MCS, Inc. is deemed to have acquired Simione Central Holdings,  Inc. on March 7,
2000,  the date of the merger,  as more fully  explained in Notes 1 and 2 to the
Consolidated Financial Statements.

                                      5
<PAGE>

                         SIMIONE CENTRAL HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
    <S>                                                   <C>              <C>


                                                           SIX MONTHS ENDED JUNE 30,
                                                        ---------------------------------
                                                             2000              1999
                                                        ----------------   --------------

    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                      $ (4,678,000)        $485,000

    ADJUSTMENTS TO RECONCILE NET LOSS
    TO NET CASH USED IN OPERATING ACTIVITIES:
       Provision for doubtful accounts                          352,000                -
       Amortization and depreciation                          1,610,000          113,000

    CHANGES IN ASSETS AND LIABILITIES, NET OF
    ACQUISITIONS:
       Accounts receivable                                     (870,000)        (387,000)
       Prepaid expenses and other current assets                 15,000          (30,000)
       Other assets                                            (136,000)               -
       Accounts payable                                        (873,000)        (147,000)
       Accrued compensation expense                             (82,000)        (284,000)
       Accrued liabilities                                     (683,000)         551,000
       Customer deposits                                        819,000         (128,000)
       Unearned revenues                                      1,612,000           38,000
                                                        ----------------   --------------
            Net cash provided by (used in)
            operating activities                             (2,914,000)         211,000
                                                        ----------------   --------------

    CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of Simione (net of cash acquired)           (12,148,000)               -
    Net cash acquired in the reverse merger                   3,547,000                -
    Purchase of software, furniture and equipment              (271,000)         (54,000)
                                                        ----------------   --------------
            Net cash used in investing activities            (8,872,000)         (54,000)
                                                        ----------------   --------------

    CASH FLOWS FROM FINANCING ACTIVITIES:
    Equity issued in Simione/MCS merger                      12,148,000                -
    Capital contribution from former parent                           -            3,000
    Proceeds from (payment on) notes payable                      7,000                -
    Proceeds from issuance of preferred stock                 1,000,000                -
    Increase (decrease) in notes payable                        583,000                -
    Dividends paid (to Mestek by MCS)                                 -         (161,000)
                                                        ----------------   --------------
            Net cash provided by (used in)
            financing activities                             13,738,000         (158,000)
                                                        ----------------   --------------
            Net change in cash and cash
            equivalents                                       1,952,000           (1,000)

    Cash and cash equivalents, beginning of period               47,000           60,000
                                                        ----------------   --------------

    Cash and cash equivalents, end of period                $ 1,999,000        $  59,000
                                                        ================   ==============

</TABLE>

See notes to consolidated financial statements.
The above  financial  statements  reflect the fact that for accounting  purposes
MCS, Inc. is deemed to have acquired Simione Central Holdings,  Inc. on March 7,
2000,  the date of the merger,  as more fully  explained in Notes 1 and 2 to the
Consolidated Financial Statements.

                                       6
<PAGE>
                         SIMIONE CENTRAL HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MCS AS DEEMED ACQUIRER OF SIMONE CENTRAL HOLDINGS, INC.

     On March 7, 2000, Simione Central Holdings,  Inc. ("Simione") and MCS, Inc.
("MCS")  merged in a  transaction  accounted  for as a reverse  acquisition  for
financial reporting purposes. In connection with the acquisition, Simione issued
1,489,853 shares of its common stock in exchange for all the outstanding  common
stock of MCS, and thereby,  the former  shareholders of MCS acquired  control of
Simione.  As a result,  MCS is considered  the  acquiring  company;  hence,  the
historical   financial   statements  of  MCS  became  the  historical  financial
statements of Simione and include the results of operations of Simione only from
the effective acquisition date.

     The weighted  average common shares for the six month period ended June 30,
2000 are recast in the  accompanying  Consolidated  Statements  of Operations to
give effect to the 1,489,853  shares of Simione common stock that were issued to
the MCS shareholders in connection with the Simione/MCS  merger on March 7, 2000
as though such shares had been outstanding for the entire period. For the period
from  January 1, 2000  through  March 6, 2000,  therefore,  1,489,853  shares of
issued and  outstanding  Simione  common stock are deemed to be owned by the MCS
shareholders.  For the period from March 7, 2000 through  June 30,  2000,  there
were  3,849,816  total  shares of issued and  outstanding  Company  common stock
(after giving effect to the Simione/MCS merger). The weighted average shares for
the six month  period  ended June 30, 1999 are also recast to give effect to the
1,489,853   shares  of  Simione  common  stock  that  were  issued  to  the  MCS
shareholders  pursuant to the Simione/MCS  merger as though such shares had been
outstanding for the entire period.

BASIS OF PRESENTATION

     The  consolidated  financial  statements  have been prepared by the Company
(which as used herein refers to Simione,  after giving effect to the merger with
MCS and, as the context requires, MCS, prior to the Simione/MCS merger), include
the  results  of  operations  of  the  parent   company  and  its  wholly  owned
subsidiaries,  and are  unaudited  (except for the  December  31,  1999  balance
sheet). In the opinion of management,  all adjustments  (which consist of normal
recurring  adjustments)  considered  necessary for a fair presentation have been
included.  All  intercompany  balances and  transactions  have been  eliminated.
Interim  results  are not  necessarily  indicative  of the  results  that may be
expected for the year ending December 31, 2000.

     Certain financial information and footnote disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  These financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
as of December 31, 1999 appearing in the Company's  Report on Form 10-K filed on
May 22, 2000.

     Certain prior period amounts have been  reclassified to conform to the 2000
financial statement presentation.

DESCRIPTION OF BUSINESS

     The  Company is a leading  provider  of  integrated  systems  and  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 offers several  comprehensive  and flexible  software
solutions,  each of which provide a core platform of software  applications  and
which incorporate  selected  specialized modules based on customer demand. These
software  solutions  are  designed to enable  customers  to generate and utilize
comprehensive  financial,  operational and clinical information.  In addition to
its software solutions and related software support services, the Company's home
health care consulting services assist providers in addressing the challenges of
reducing costs, maintaining quality,  streamlining operations and re-engineering
organizational  structures,  as well as assisting with regulatory compliance and
merger and acquisition due diligence.

                                       7
<PAGE>

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

     In 1998,  the Company  adopted the American  Institute of Certified  Public
Accountants  ("AICPA")  Statement of Position  ("SOP") 97-2,  "Software  Revenue
Recognition,"  which  supersedes  SOP 91-1  and is  effective  for  transactions
entered  into for fiscal years  beginning  after  December 31, 1997.  While some
principles  remain the same,  there are several key differences  between the two
pronouncements,  including accounting for multiple element  arrangements.  Under
SOP 97-2, the Company  recognizes  software  license  revenue when the following
criteria are met: (1) a signed and executed  contract is obtained;  (2) shipment
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  for the  Mestamed  product  which is sold in the form of a  bundled
turnkey system. Prices net of discounts are separately identified at the time of
sale for each element.  The Company has established  vendor  specific  objective
evidence related to the value of maintenance fees. The Company uses the residual
value  method to  allocate  between  licenses  and first year  maintenance.  The
adoption of SOP 97-2 did not have a material  impact on the Company's  financial
statements.

     Revenues are derived from the licensing and sub-licensing of software,  the
sale of computer hardware, accessories and supplies,  professional and technical
consulting  services,  implementation and training products and services,  forms
and case plans software maintenance and support services,  outsourcing services,
as well as home health care management consulting services.

     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  collectibility  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 percentage of
completion  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.  Consulting services revenues are
recognized monthly as the related services are performed.

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

     In addition to software  licenses,  software  maintenance and support,  and
related hardware, the Company also provides computer-based training, CD-ROMs and
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.

                                       8
<PAGE>

     Unbilled  receivables  typically represent revenues from ancillary services
performed  and earned in the  current  period but not  billed  until  subsequent
periods, usually within one month.

PROPERTY AND EQUIPMENT

     Property 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

     SFAS No. 86 requires that software development costs incurred subsequent to
the  establishment of technological  feasibility for the product be capitalized.
The  Company  has no  capitalized  development  costs as of June 30, 2000 except
those  developed  technologies  capitalized in connection  with the  Simione/MCS
merger on March 7, 2000 as more fully described in Note 5.

CONCENTRATIONS AND MAJOR CUSTOMERS

     The  Company  sells its systems and  services to various  companies  in the
health care industry.  The Company  performs  ongoing credit  evaluations of its
customers'  financial condition and, generally,  requires no collateral from its
customers.  Current  operations  are  charged  with an  allowance  for  doubtful
accounts based upon  experience and any unusual  circumstances  which affect the
collectibility of receivables.  Amounts deemed uncollectible are charged against
this allowance.

CASH EQUIVALENTS

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

PURCHASED SOFTWARE, LEASEHOLD IMPROVEMENTS

     Purchased   Software  and  Leasehold   Improvements  are  stated  at  cost.
Amortization   is  calculated  for  financial   reporting   purposes  using  the
straight-line  method over the estimated  useful lives  (ranging from one to ten
years) of the assets or lease term, whichever is shorter.

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.  SFAS No. 121 also  addresses the  accounting  for  long-lived
assets that are expected to be disposed of.

                                       9
<PAGE>

     The intangible assets,  arising from the Simione/MCS  merger, are amortized
using the  straight-line  method over the estimated  useful lives of the related
assets as more fully disclosed in Note 5. The Company reviews its long-lived and
intangible  assets for impairment  whenever  events or changes in  circumstances
indicate that the carrying  amount may not be  recoverable.  The  measurement of
possible  impairment is based upon determining  whether  projected  undiscounted
future cash flow from the use of the asset is less than the  carrying  amount of
the asset.

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.

NET LOSS PER SHARE

     In 1997, the Company  adopted SFAS No. 128,  "Earnings Per Share." SFAS No.
128 replaced the  calculation  of primary and fully  diluted  earnings per share
with basic and diluted  earnings per share.  Unlike primary  earnings per share,
basic earnings per share excludes any dilutive effects of options,  warrants and
convertible  securities.  Diluted  earnings  per share are very  similar  to the
previously  reported fully diluted earnings per share. Per share amounts for all
periods have been presented in conformity with SFAS No. 128 requirements.

STOCK BASED COMPENSATION

     Stock options are accounted for under  Accounting  Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.

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  payable:  The  carrying  amounts  of  the  Company's  notes  payable
approximates their fair value.

RECENTLY ADOPTED ACCOUNTING STANDARDS

     In 1998,  the  Financial  Accounting  Standards  Board  issued SFAS No. 133
"Accounting for Derivative  Instruments and Hedging Activities." SFAS No. 133 is
effective for the Company's first quarter of the fiscal year ending December 31,
2001.  The Company's  management  does not believe that the adoption of SFAS No.
133 will have a material impact on the Company's  financial  position or results
of operations.

DISCONTINUED OPERATIONS

     The discontinued operations reported in the Company's results of operations
for the six months ended June 30, 1999 relate to MCS's Profitworks segment which
was distributed to MCS's parent  company,  Mestek Inc., its then parent company,
on September 1, 1999.

                                       10
<PAGE>

NOTE 2 - MERGER

     On March 7, 2000, MCS completed the merger with Simione  Central  Holdings,
Inc.  (Simione).  Simione  issued  1,489,853  shares  of  common  stock  to  MCS
stockholders in exchange for all of the outstanding  shares of MCS common stock.
This number of shares has been adjusted to reflect a one-for-five  reverse stock
split  that  was  completed  by  Simione  immediately  prior to the  merger.  In
connection  with the  closing of the merger,  Mestek  invested  $6.0  million in
Simione in  exchange  for 5.6  million  shares of Series B  preferred  stock and
warrants  to  purchase  400,000  shares (on a split  adjusted  basis) of Simione
common  stock.  Additional  information  on the merger is included in  Simione's
Registration Statement on Form S-4 (Registration No. 333-96529).

     Pro-forma unaudited results assuming the merger took place as of January 1,
1999,  and further  assuming that the  acquisition  of CareCentric by Simione on
August 12, 1999 took place on January 1, 1999, are as follows:

                                                  FOR SIX MONTHS ENDED JUNE 30,
                                                --------------------------------
                                                        2000           1999
                                                ---------------- ---------------

    Net revenues                                 $  14,268,000     $ 25,025,000
    Net income (loss)                            $  (6,073,000)    $ (3,941,000)
    Net income (loss) per share - basic          $       (1.58)    $      (1.02)
    Net income (loss) per share - diluted        $       (1.58)    $      (1.02)

NOTE 3 - INVENTORIES

         Inventories  consist  principally of computer equipment held for resale
and related  operating system  licenses.  Inventories are valued at the lower of
cost or market.

NOTE 4 - FURNITURE AND EQUIPMENT

Property and equipment consisted of the following:

                                                                    DEPRECIATION
                               JUNE 30,          DECEMBER 31,         ESTIMATED
                                 2000                1999           USEFUL LIVES
                             -----------------  ------------------  ------------

  Furniture and Fixtures      $ 1,516,000       $   315,000          10 years
  Computer equipment            5,876,000         1,483,000          5 years
                             -----------------  ------------------
                                7,392,000         1,798,000
  Accumulated depreciation     (5,151,000)         (878,000)
                             -----------------  ------------------
                             $  2,241,000        $  920,000
                             =================  ==================



                                       11
<PAGE>

NOTE 5 - INTANGIBLE ASSETS

Intangible assets at June 30, 2000 consisted of the following:
<TABLE>
<CAPTION>
   <S>                                     <C>                  <C>                    <C>                <C>
                                                                 ACCUMULATED             NET BOOK      AMORTIZATION
                                             COST                AMORTIZATION              VALUE         PERIOD
                                       -----------------     ------------------   ----------------   ---------------------

    Developed technology                    $10,650,000         $    (443,000)         $ 10,207,000       8 years
    Assembled workforce                       2,300,000              (153,000)            2,147,000       5 years
    Customerb base                            1,700,000               (63,000)            1,637,000       9 years
    Goodwill                                 12,151,000              (579,000)           11,572,000       7 years
                                        ---------------      -----------------    -----------------
                                            $26,801,000         $  (1,238,000)         $ 25,563,000
                                        ================     =================   ==================
</TABLE>


     Amortization of the above  intangible  assets will reduce  operating income
(or increase operating losses) by approximately $3.1 million in the year 2000.

                                       12
<PAGE>

NOTE 6 - INCOME TAXES

     At December 31, 1999,  Simione  Central  Holdings,  Inc. had  approximately
$15.3  million of net  operating  losses for income tax  purposes  available  to
offset future taxable  income.  Such losses expire  beginning in 2010 and may be
subject  to  certain  limitations  arising  from  the  change  in  ownership  in
connection with the Simione/MCS  merger on March 7, 2000. A valuation  allowance
reducing  the net  deferred  tax  assets  to zero  has  been  recorded  based on
management's assessment that it is "more likely than not" that this net asset is
not realizable as of June 30, 2000.

     The  Company's  actual  income tax expense  (benefit)  for the three months
ended June 30, 2000 differs from the "expected" amount (computed by applying the
U.S.  Federal  corporate income tax rate of 35% to the loss before income taxes)
due to the fact that the portion of the loss  arising  after March 7, 2000,  the
date of the Simione/MCS merger, cannot be assured of generating a federal income
tax benefit in the future.

NOTE 7 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

                                        June 30, 2000      December 31, 1999
                                        -------------      -----------------
Short Term:
----------
Note Payable - David O. Ellis           $    250,000
Line of Credit                             1,413,000
Note Payable - Mestek                   $  1,650,000       $          -
                                        ============       ==================
Long Term:
---------
Notes Payable - Barrett C. O'Donnell   $     500,000       $          -
                                        =============      ==================

     On September 9, 1999, Simione Central Holdings, Inc. (Simione) entered into
a $5.0 million Loan and Security  Agreement (Line of Credit) with Silicon Valley
Bank,  a  commercial  bank,  under  which  substantially  all of its assets were
pledged  as  security.  Availability  under the Line of Credit  was based upon a
mathematical  formula applied to trade receivables.  When the Simione/MCS merger
was  completed on March 7, 2000,  the Company  succeeded to the  obligations  of
Simione under the Line of Credit and  substantially  all of the Company's assets
were  pledged as security for the Line of Credit.  Borrowings  under the Line of
Credit accrued  interest at the prime rate plus 2% per annum. On April 13, 2000,
the  Company  executed a Loan  Modification  Agreement  relative  to the Line of
Credit which required the Company to limit its net losses to certain amounts for
each  quarterly  period in the year 2000 and  further  required  the  Company to
obtain not less than $3.0 million in additional  capital prior to June 15, 2000.
The line of credit was paid off and terminated on July 12, 2000.

     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.  When the  Simione/MCS  merger  was
completed on March 7, 2000, the Company succeeded to these obligations. The note
payable to Mr.  O'Donnell  bears  interest  at 9% per annum,  matures on May 11,
2002, and requires  quarterly payment of accrued  interest.  The note payable to
Dr. Ellis bears  interest at 9% per annum,  matures on August 15, 2000, and also
requires quarterly payment of accrued interest.  Dr. Ellis and Mr. O'Donnell are
directors of the Company.

     On June 22, 2000, the Company entered into a new financing facility (the J.
E. Reed Facility)  provided by John E. Reed, a Simione director and the Chairman
and Chief Executive Officer of Mestek,  Inc. The J. E. Reed Facility consists of
a $6.0 million  subordinated  revolving 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 can be drawn down by
the Company as needed in $500,000 increments and is secured by a second position
on  substantially  all of the Company's  assets.  No borrowings were outstanding
under the J. E. Reed Facility as of June 30, 2000.

                                       13
<PAGE>

     On July 12, 2000, the Company entered into a $6.0 million Loan and Security
Agreement  facility (the  Wainwright  Facility) with  Wainwright  Bank and Trust
Company,  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., and the David O. Ellis note.  Borrowings under the
Wainwright Facility accrue interest, at the bank's prime rate per annum, require
monthly  payments  of  interest  and  mature  on July 12,  2001.  The  Company's
obligations  under the  Wainwright  Facility are  guaranteed by Mestek,  Inc. in
consideration  of which the  Company  has issued a warrant to  Mestek,  Inc.  to
purchase 104,712 shares of the Company's common stock as more fully explained in
Note 10 to these Financial Statements.

     The  Company  is  obligated  under a number of  capital  lease  obligations
originally  entered into by Simione related to computer  equipment formerly used
in Simione's business.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

     As previously  disclosed,  in the first  quarter of 2000,  the NASDAQ staff
determined that the Company should be delisted from NASDAQ due to the MCS merger
and the  Company's  inability  after the merger to satisfy the  initial  listing
criteria.  The Company appealed this decision, and NASDAQ held a hearing on this
appeal on March 3, 2000. The NASDAQ  Hearing Panel issued a written  decision on
June 2, 2000  regarding the  Company's  listing as a result of which the Company
was  removed,  effective  June 7,  2000,  from the  NASDAQ  National  Market and
transferred to the NASDAQ SmallCap Market. The continued listing on the SmallCap
Market was  conditioned  upon the Company's  submission  of a standard  SmallCap
Listing application package and NASDAQ's receipt, on or before June 13, 2000, of
executed documents  relating both to the warrant issued to Mestek,  described in
more  detail  in  Note  10 to  these  Financial  Statements,  and  the  proposed
investment by John E. Reed, a director of the Company and the Chairman and Chief
Executive Officer of Mestek, of up to $7.0 million in Simione Central,  on terms
described in more detail in Notes 7 and 10 of these Financial Statements,  which
conditions have been satisfied. The continued NASDAQ listing is also conditioned
on the Company's  ongoing  compliance with the minimum bid price requirement and
other listing criteria of the NASDAQ SmallCap  Market.  The NASDAQ staff did not
raise objections to the terms of the financing with Mr. Reed and the issuance of
the warrant to Mestek, based on its review of their summary of terms.

     The Company is engaged in various  other 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.


                                       14
<PAGE>

     The Company  reached a settlement on June 30, 2000 with IBM relative to the
early  cancellation  of the Company's  service  agreement  with IBM for services
provided to a former  customer of Simione  Central  Holdings,  Inc., and related
fees for services.  The settlement was fully reserved for in connection with the
accounting for the Simione/MCS merger on March 7, 2000 and, accordingly, did not
have a material adverse impact upon the Company's financial condition or results
of operations.

NOTE 9 - SEGMENT RESULTS

     The Company has two reportable  segments:  product  related and consulting.
The Company's product related segment sells  comprehensive and flexible software
solutions and services to enable home health care providers to more  effectively
operate their  businesses and compete in  prospective  payment (PPS) and managed
care environments.  The consulting segment assists home health care providers in
addressing the challenges of reducing costs,  maintaining quality,  streamlining
operations and re-engineering  organizational  structures,  as well as assisting
with  regulatory  compliance  and  assisting  with  merger and  acquisition  due
diligence.

     The Company evaluates  performance and allocates  resources based on profit
or loss  from  operations,  not  including  gains and  losses  on the  Company's
investment portfolio. The accounting policies of the reportable segments are the
same as those used for the  consolidated  financial  statements.  The  revenues,
operating  losses and assets of the Company by business  segment are as follows:

<TABLE>
<CAPTION>
<S>                       <C>                <C>                 <C>              <C>
                                  Three Months Ended                   Six Months Ended
                          --------------------------------     --------------------------------
                          June 30, 2000      June 30, 1999       June 30, 2000    June 30, 1999
                          --------------------------------     --------------------------------
Revenues
  Product related         $ 5,233,000        $  4,682,000        $   8,768,000    $   8,722,000
  Consulting                1,024,000                   -            1,490,000                -
                          -----------        ------------       --------------    --------------
        Total             $ 6,257,000        $  4,682,000        $  10,258,000     $  8,722,000
                          ===========        ============       ==============    ==============

 Cost of sales
     Product related      $ 2,927,000        $  2,923,000        $   5,049,000     $  5,330,000
     Consulting             1,027,000                   -            1,452,000                -
                         ------------        ------------       --------------     ------------
         Total            $ 3,954,000        $  2,923,000        $   6,501,000     $  5,330,000
                         ============        =============      ==============     ============

Research and
development
     Product Related      $ 1,780,000        $    135,000        $   2,491,000     $    531,000
                         ============        ==============      =============     ============

Depreciation and
amortization
     Product related      $ 1,040,000        $    -56,000        $   1,430,000     $     13,000
     Consulting               143,000                   -              180,000                -
                         ------------        ------------        -------------     ------------
         Total            $ 1,183,000        $     56,000        $   1,610,000     $          -
                         ============        ============        =============     ============

Net income (loss)
     from Continuing
Operations
     Product related     $(3,285,000)        $    460,000        $  (4,532,000)     $   596,000
     Consulting             (343,000)                   -             (303,000)               -
                         ------------        -------------       ---------------    ------------
         Total           $(3,628,000)        $    460,000        $  (4,835,000)     $   596,000
                         ============        =============       ===============    ============

</TABLE>
<TABLE>
<CAPTION>
<S>                                                     <C>                  <C>
                                                         JUNE 30,             DECEMBER 31,
                                                           2000                   1999
                                                    --------------------   --------------------
Assets
     Product related                                      $  34,793,000          $   6,696,000
     Consulting
                                                              4,758,000                      -
                                                    --------------------   --------------------
              Total                                       $  39,551,000          $   6,696,000
                                                    ====================   ====================
</TABLE>

     The Net Income (Loss) from  continuing  operations  reported above has been
affected by non-cash depreciation and amortization changes as reported above.

                                       15
<PAGE>

NOTE 10 - SHAREHOLDERS' EQUITY

     Subsequent  to the  Simione/MCS  Merger  on March 7,  2000,  the  Company's
Shareholders'  Equity  (all on a  split  adjusted  basis)  is  comprised  of the
following:

     Common Shares - 20,000,000 shares  authorized,  $.001 par value,  3,849,816
shares issued and outstanding.  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 holders of Simione Central Holdings,  Inc. Series
A Preferred  Stock,  which shares were  converted  into Simione common shares in
connection with the merger.  If the value of the Company's common stock does not
equal $15.00 per share on or prior to December 31, 2000, the Company is required
to issue up to an additional  606,904 common shares to the former holders of the
Series  A  Preferred   Stock  to  the  extent  of  the  price   deficiency   or,
alternatively,  to pay cash or a combination of cash and stock equal in value to
the price deficiency.

     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 Simione Central Holdings,  Inc. 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%  cumulative  dividend,  among other
rights  which are  described  in greater  detail in  Appendix  B to the  Simione
Central Holdings, Inc.-MCS, Inc. Joint Proxy Statement issued in connection with
the merger.  In  connection  with the Company's  application  for listing on the
NASDAQ  SmallCap  Market,  as more fully  described in Note 8 to these Financial
Statements,  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 Simione common stock,  as
more fully described below.

     Series C Preferred  Stock - $.001 par value,  850,000  shares  issued.  The
shares of Series C Preferred Stock are held by Mestek,  Inc. and result from the
conversion of a pre-existing  $850,000  convertible note payable to Mestek, Inc.
The Series C  Preferred  shares  carry  170,000  common  share votes (on a split
adjusted  basis) and are  entitled to an 11%  cumulative  dividend,  among other
rights  which are  described  in greater  detail in  Appendix  F to the  Simione
Central Holdings,  Inc.-Mestek,  Inc. Joint Proxy Statement issued in connection
with the merger.

     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 are entitled to other  rights which are  described in
greater detail in the Certificate of Designations, Preferences and Rights of the
Series D Preferred Stock of Simione included in Simione's  Restated  Certificate
of Incorporation,  which has been filed as an exhibit to Simione's Form 10-Q for
the period ended June 30, 2000.

     Common  Stock  Warrants - In  connection  with the issuance of the Series B
Preferred Stock described above,  Mestek,  Inc. 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,  Inc.  of certain
voting  rights  previously  granted to it, as more fully  explained in Note 8 to


                                       16
<PAGE>

these Financial Statements,  Mestek, Inc. 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 7 to these  Financial
statements,  Mestek,  Inc.  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  shares and per share
prices are all on a split adjusted basis.

     Stock  Options - The Company has  established  several  stock option plans,
under which the Company has granted  options to purchase an aggregate of 352,444
shares (on a split adjusted basis) of common stock as of July 26, 2000.  Options
granted under  Simione's 1997 Omnibus  Equity-based  Incentive Plan must have an
exercise price not less than the fair market value at the date of grant.  Of the
options granted, 56,885 were exercised prior to December 31, 1999 and 4,828 have
been cancelled as of July 26, 2000. Of the remaining  290,731  options,  276,358
are vested as of July 26, 2000 and 215,005 are  exercisable as of that date. The
exercise  prices range from $7.50 to $55.75 per share,  both on a split adjusted
basis.

     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 are
exercisable  only to the extent that outstanding  Simione  options,  warrants or
other  conversion  rights are exercised.  These options were designed to prevent
dilution of Mestek,  Inc.'s ownership  interest in the Company after the merger.
As options,  warrants and other common  rights are  cancelled,  Mestek's  option
rights are correspondingly reduced.

NOTE 11 - RELATED PARTY TRANSACTIONS

     Gateway LLC, a company owned in part by a prior Chief Executive  Officer of
Simione Central Holdings,  Inc. (Simione) and another officer of Simione, leases
an office facility to the Company under the terms of an agreement, which expires
December  31,  2001.  Gateway  LLC sold the lease to a third  party in August of
1998.

     A  shareholder  and  executive  officer  of the  Company is a partner in an
entity that leases an office  facility to the Company  under an operating  lease
that  expires in December  2002.  Annual  rental  payments  under this lease are
approximately $136,000 per year through 2002.

     The Company has subleased  certain space to  Healthfield,  Inc. which has a
significant shareholder who was a former member of the board of directors of the
Company.

     Certain  relatives  of William  Simione,  Jr. and Robert  Simione  manage a
certified public accounting  business which performs services for the Company in
conjunction with services performed for customers of Simione.

     R. Bruce Dewey remains a Senior Vice  President of Mestek while  performing
his duties as Chief  Executive  Officer,  President and director of the Company.
Stephen M. Shea remains  Senior Vice  President and Chief  Financial  Officer of
Mestek,  Inc.  while  performing  his duties as Chief  Financial  Officer of the
Company.  As of June  30,  2000,  the  Company  had  two  notes  outstanding  to
directors. These notes are described in Note 7 to these Financial Statements.

     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 7 to
the Financial Statements.

     John E. Reed,  Chairman and Chief  Executive  Officer of Mestek,  Inc., has
provided  the  Company  with a $6.0  million  line of credit  (unrelated  to the
Wainwright Bank and Trust $6.0 million line of credit  described  above) as more
fully  described in Note 7 to the Financial  Statements  and has also  purchased
$1.0 million of the Company's Series D Preferred Stock on June 12, 2000, as more
fully  described  in Note  10 to  these  Financial  Statements.  An  independent


                                       17
<PAGE>

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  Simione
common stock as of the date of the final  negotiation of the terms of Mr. Reed's
purchase.  The conversion price for Mr. Reed's $6.0 million loan, which converts
into  Simione  common  stock  as  described  in more  detail  in Note 7 to these
Financial Statements, is also $2.51 per share.

     Warrants  were granted in June 2000 and July 2000 by the Company to Mestek,
Inc. in connection with its waiver of certain voting rights  previously  granted
to it and in connection  with its guarantee of the loan from  Wainwright  Bank &
Trust  Company to the Company.  The terms of the warrants (as  described in more
detail in Note 10 to these Financial  Statements)  were based on negotiations by
independent committees of the Boards of Directors of the Company and Mestek.

NOTE 12 - 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 13 - SUBSEQUENT EVENTS

     On July 12, 2000, the Company entered into a $6.0 million Loan and Security
Agreement facility (Wainwright Facility) with Wainwright Bank and Trust Company,
a  commercial  bank,  as  more  fully  described  in Note 7 to  these  Financial
Statements.  Based  on  this  credit  facility,  and the J.  E.  Reed  Facility,
described in more detail in Note 7 to these  Financial  Statements,  the Company
believes  that it will have  sufficient  capital to meet its day to day  working
capital needs in the year 2000 as well as fund its various  product  development
initiatives during this period. In consideration with the closing by the Company
of the  Wainwright  Facility,  the  Company  issued  Mestek,  Inc.  a warrant to
purchase  104,712  shares of the  Company's  common stock in  consideration  for
Mestek's guarantee of the Wainwright loan, as more fully explained in Note 10 to
these Financial Statements.

     On August 8, 2000,  the  $500,000  note  payable  and  $100,000 of deferred
salary  compensation owed by the Company to Barrett C. O'Donnell,  a director of
the  Company,  was  cancelled  in  exchange  for a $600,000  subordinated  note,
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.


                                       18
<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
are  subject  to the safe  harbor  created by such  sections.  When used in this
report, the words "believe",  "anticipate",  "estimate",  "expect",  and similar
expressions are intended to identify forward-looking  statements.  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,  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.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company  has  recently  secured  $13.0  million in new debt and equity
capital as follows:
    <TABLE>
    <CAPTION>
    <S>                                <C>                  <C>                        <C>
    SOURCE                             FUNDING              FORM                        DATE CLOSED
    ---------------------------------  --------------       ------------------------    -------------

    John E. Reed                         $ 1,000,000        Series D Preferred Stock    June 22, 2000

    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
                                       --------------
                                        $ 13,000,000
                                       ==============
</TABLE>

Detail on these three  transactions  are described in greater  detail in Notes 7
and 10 to the accompanying Financial Statements.

     The  Wainwright  Bank and Trust  Company Line of Credit was used to pay off
the  Silicon  Valley Bank Line of Credit,  certain  short term loans from Mestek
Inc.,  and the note payable to David O. Ellis.  As of July 28, 2000,  the unused
capacity under the John E. Reed and  Wainwright  Bank and Trust Company lines of
credit are $6,000,000 and $2,901,000, respectively.

     The Company believes that the above funding sources will provide sufficient
capital  to meet its  working  capital  needs  in the year  2000 as well as fund
planned product development initiatives during this period.

     The  Company's  Net Cash  Provided by  Operating  Activities  for the three
months  ended June 30,  2000 was  ($1,501,000).  Management  believes  that this
result was  substantially  impacted by the  Company's  need to bring current the
Simione and MCS payables and accrued  expenses in the  aftermath of the March 7,
2000  Simione/MCS  merger.  The Company also  continued  its various new product
development  initiatives  during the quarter  ended June 30, 2000 which  further
impacted this figure by  approximately  $1.8 million as reflected in the Results
of Operations for the three months ended June 30, 2000.


                                       19
<PAGE>

BACKGROUND

     The  Company is a leading  provider  of  integrated  systems  and  services
designed to enable home health care providers to more effectively  operate their
businesses  and  compete  in the  prospective  payment  (PPS) and  managed  care
environments.  The Company offers several  comprehensive  and flexible  software
solutions,  each of which provide a core platform of software  applications  and
which incorporate  selected  specialized modules based on customer demand. These
software  solutions  are  designed to enable  customers  to generate and utilize
comprehensive  financial,  operational and clinical information.  In addition to
its software solutions and related software support services, the Company's home
health care consulting services assist providers in addressing the challenges of
reducing costs, maintaining quality,  streamlining operations and re-engineering
organizational structures.

     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 SOP
97-2,  these  revenues  are  recognized  when  products  are  delivered  and the
collectibility  of fees is probable,  provided that no  significant  obligations
remain under the contract that affect the  acceptance of the products.  Revenues
derived from the sale of software products requiring significant modification or
customization are recognized based upon the percentage of completion method. 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
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,  for
certain products,  some 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  shipped.   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  charges for  software  implementation,  training  and
technical  consulting  services as well as management  consulting services on an
hourly or daily basis.  The price of such services varies depending on the level
and expertise of the related professionals. These revenues are recognized as the
related services are performed.

     The Company believes that continued  enhancement of its software systems is
critical to its future success,  and anticipates that investment in existing and
new  products  will  continue  as  needed  to  support  the  Company's   product
strategies.  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 six
months ended June 30, 2000 and 1999, the Company did not capitalize any computer
software development costs.

BACKLOG

     The Company had backlog  associated with its software of approximately $3.6
million and $1.8 million on June 30, 2000 and  December 31, 1999,  respectively,
including in both cases the products of MCS and Simione. The backlog at June 30,
2000  includes  approximately  $1.3 million in new orders for  software  systems
booked in June of 2000, principally for the Company's Mestamed products. 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 although
system  orders  are  typically  installed  within  16 weeks of the date that the
initial deposit is received.  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 twelve months.


                                       20
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999

     Net  Revenues.  Total net revenues for the three months ended June 30, 2000
were  $6,257,000,  an increase of 33.6%  relative to the three months ended June
30, 1999. The financial statements for June 30, 1999, however,  include only the
operations  of MCS.  If the  historical  operations  of  Simione  (inclusive  of
CareCentric Solutions,  Inc., which Simione acquired on August 12, 1999) and MCS
were  arithmetically  combined  for the three month  period ended June 30, 1999,
revenues  (exclusive of Simione's  outsourcing  segment  which was  discontinued
prior to the end of 1999) for the three  months  ended June 30,  1999 would have
been $10,524,000.  Comparable revenues for the three months ended June 30, 2000,
therefore,   were  reduced  $4,267,000  or  40.5%,  principally  due  to  (1)  a
significant  decline in home health  consulting  revenues,  which  accounted for
approximately  $897,000 of the decrease (2) a significant  decline in new system
sales of Mestamed, which accounted for approximately $2,416,000 of the decrease,
(3) delays in installing Smart Clipboard product  bookings,  and (4) reduced new
sales of Simione's  historical STAT and Dezine  products.  The Company  believes
that   uncertainties  in  the  health  care  information   systems   marketplace
surrounding year 2000  functionality and the Simione/MCS merger on March 7, 2000
and its  effects  (or  potential  effects) on the  Company's  software  products
significantly  impaired the Company's  ability to generate  bookings in the last
quarter of 1999 and the first quarter of 2000 and led to  significantly  reduced
revenues in the first and second quarter of 2000.

     The Company believes it has made significant progress toward allaying these
concerns by re-affirming its commitment to the continued development and support
of its core products,  strengthening  its customer  support staff,  and securing
substantial new capital commitments which are described in detail in Notes 7 and
10  to  the  accompanying  Financial  Statements.  Recently,  approximately  300
customers  attended the First Annual  MCS/Simione  Central  Customer  Conference
featuring 75  educational  seminars,  presentations  by leading home health care
experts and  exhibits  by  suppliers  of  third-party  software or hardware  and
product partners of Simione.

     The Company's  operating loss from  continuing  operations,  reflecting the
same  assumptions  as  above  for  purposes  of  comparability,  increased  from
($2,567,000) in the second quarter of 1999 to ($3,467,000) in the second quarter
of 2000. Approximately $350,000 of the increased loss was attributable to higher
amortization and depreciation  resulting from the effect of purchase  accounting
which was used to account for the  Simione/MCS  merger.  On a comparable  basis,
therefore,  the Company's  operating  loss from  continuing  operations  for the
quarter increased only $550,000 despite a revenue drop of $4,267,000. Management
believes  the  relatively  small  increase  in  operating  loss from  continuing
operations is traceable to the effect of the cost saving  initiatives  which the
Company  undertook  after the  consummation  of the merger on March 7, 2000. The
Company's   Dezine  and  Mestamed  product  support  groups  have  been  largely
consolidated in Pittsburgh. The Company's executive, general and administrative,
financial  and human  resources  functions  have been  consolidated  in Atlanta,
Georgia.  Offices in San Diego,  Dallas,  Jacksonville and Huntington Beach have
been  closed,  and  offices in Houston  and New Jersey  have been  significantly
down-sized.  Two of the three floors at the Company  headquarters in Atlanta and
one of two floors at the facility in Pompano Beach have been sublet.

     Cost  of  revenues,  adjusted  as  above  for  purposes  of  comparability,
decreased  from  $6,882,000  in the second  quarter of 1999 to $3,954,000 in the
second quarter of 2000. Similarly,  selling, general and administrative expenses
decreased from $4,069,000 to $2,807,000,  over the comparable periods reflecting
in both  cases  the  effect  of the cost  saving  initiatives  described  above.
Research  and  development  expenses,  however,  increased  from  $1,313,000  to
$1,780,000.

Other  Income  (Expense).  Interest  expense for the three months ended June 30,
2000  relates  primarily  to  borrowings  under  the  Company's  line of  credit
agreement  and  capital  lease  obligations.  The  Company  was a  wholly  owned
subsidiary  of  Mestek,  Inc.  during  the  quarter  ended  June  30,  1999  and
accordingly reported no interest expense during this period. The Company expects
its interest  expense to increase  during the remainder of 2000 due to increased
borrowings. The impact of recent increases in the prime lending rate will likely
be offset by the reduced cost of funds under the Wainwright  Bank and Trust Line
of Credit,  which will be  approximately  200 basis points (2 percent) below the
rate charged by Silicon Valley Bank.


                                       21
<PAGE>

Income Taxes. At December 31, 1999,  Simione Central Holdings Inc. (Simione) had
net  operating  loss  ("NOL")  carryforwards  for federal  and state  income tax
purposes of $15.3 million, which will expire at various dates beginning in 2010,
if not  utilized.  Simione  also has research and  development  and  alternative
minimum tax credits of approximately  $90,000  available to reduce future income
tax  liabilities.  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  occur,  including  additional  sales of equity
securities and other changes in ownership.  As a result,  certain of the NOL and
tax credit carryforwards may be limited as to their utilization  subsequently to
the  Simione/MCS  merger on March 7, 2000.  The Company has concluded that it is
more  likely than not that these NOLs and tax credit  carryforwards  will not be
realized  based on a weighing of evidence at June 30, 2000,  and as a result,  a
100% deferred tax valuation allowance has been recorded against these assets.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999

Net  Revenues.  Total  net  revenues  for the six  months  ended  June 30,  2000
increased  17.6%  relative  to the six months  ended June 30,  1999.  Results of
operations  for the six months  ended June 30, 2000  include the  operations  of
Simione from March 7, 2000 to June 30, 2000,  and the  operations of MCS for the
full six months. The financial statements for the six months ended June 30, 1999
include only the  operations  of MCS. If the  historical  operations  of Simione
(inclusive of  CareCentric  Solutions,  Inc. which Simione  acquired  August 12,
1999) and MCS were arithmetically  combined for the six month periods ended June
30, 2000 and 1999,  revenues  (exclusive of Simione's  outsourcing segment which
was  discontinued  prior to the end of 1999) would have been $13,626,000 for the
six months ended June 30, 2000 and $21,562,000 for the six months ended June 30,
1999.  These  reductions in revenues were  attributable  to reduced  bookings of
software and equipment  sales in the final quarter of 1999 and the first quarter
of year 2000. The Company  believes this decrease is the result of uncertainties
in the marketplace resulting from the then pending Simione/MCS merger as well as
customer  concerns  related  to  year  2000  functionality.   The  reduction  in
comparable  sales  revenue is traceable  principally  to (1) a reduction in home
health consulting revenue of approximately  $556,000,  (2) a significant decline
in Mestamed new systems and related items sales of approximately $3,727,000, (3)
delays in installing Smart Clipboard product bookings, and (4) reduced new sales
of Simione's historical STAT and Dezine products.

     Cost of Revenues (Total). Cost of revenues,  including selling, general and
administrative expenses and research and development expenses, adjusted as above
for   purposes  of   comparability,   were  also   substantially   reduced  from
approximately   $24,769,000   for  the  six  months   ended  June  30,  1999  to
approximately $17,262,000 for the six months ended June 30, 2000, reflecting the
effect of the various cost saving initiatives  described  earlier.  Amortization
and depreciation increased from $1,506,000 to $2,267,000,  reflecting the effect
of purchase  accounting which was used to account for the Simione/MCS  merger on
March 7, 2000.

Other Income (Expense).  Interest expense for the six months ended June 30, 2000
relates primarily to borrowings under the Company's line of credit agreement and
capital lease obligations.  The Company was a wholly owned subsidiary of Mestek,
Inc.  during the six months  ended June 30,  1999 and  accordingly  reported  no
interest expense during this period. The Company expects its interest expense to
increase during the remainder of 2000 due to increased borrowings. The impact of
recent  increases in the prime lending rate will likely be offset by the reduced
cost of funds under the Wainwright Bank and Trust Line of Credit,  which will be
approximately  200 basis points (2 percent) below that charged by Silicon Valley
Bank.

Income Taxes. At December 31, 1999,  Simione Central Holdings Inc. (Simione) had
net  operating  loss  ("NOL")  carryforwards  for federal  and state  income tax
purposes of $15.3 million, which will expire at various dates beginning in 2010,
if not  utilized.  Simione  also has research and  development  and  alternative
minimum tax credits ("tax credits") of approximately $90,000 available to reduce
future income tax liabilities.  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  occur,  including  additional  sales of
equity  securities and other changes in ownership.  As a result,  certain of the
NOL  and  tax  credit  carryforwards  may be  limited  as to  their  utilization
subsequent to the Simione/MCS merger on March 7, 2000. The Company has concluded
that it is more  likely  than not that these  NOLs and tax credit  carryforwards
will not be realized  based on a weighing of evidence at June 30, 2000, and as a
result, a 100% deferred tax valuation  allowance has been recorded against these
assets.


                                       22
<PAGE>

IMPACT OF NEW ACCOUNTING STANDARDS

     In 1998, the Financial and Accounting  Standards  Board issued SFAS No. 133
("SFAS  No.  133"),   "Accounting   for  Derivative   Instruments   and  Hedging
Activities."  SFAS No. 133 is  effective  for the  Company's  fiscal year ending
December 31, 2001. The Company's  management  does not believe that the adoption
of SFAS No. 133 will have a material impact on the Company's position or results
of operations.



                                       23
<PAGE>


PART II - OTHER INFORMATION

     Item 1. Legal Proceedings.

     Neither the Company 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 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 rel.  McLendon v. Columbia/HCA  Healthcare
Corp., et al., No.  97-VC-0890  (N.D.  Ga.)).  The lawsuit  involves claims that
Simione allegedly participated in a conspiracy with Columbia/HCA and other third
parties to bill  inflated and  fraudulent  claims to  Medicare.  The Company has
learned  that the  Justice  Department  has  elected  not to join in the  claims
asserted  against  Simione 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 Simione.  The  Company  has had  indications  that Mr.
McLendon may still pursue  "whistleblower"  claims against the Company directly.
The Company does not believe that any of these claims,  if asserted  against the
Company,  will have any material  effect on the  Company's  overall  business or
financial condition. In the event these claims are asserted,  Simione intends to
vigorously defend against them.

     The Company  reached a settlement on June 30, 2000 with IBM relative to the
early  cancellation  of the Company's  service  agreement  with IBM for services
provided to a former  customer of Simione  Central  Holdings,  Inc., and related
fees for services.  The settlement was fully reserved for in connection with the
accounting for the Simione/MCS merger on March 7, 2000 and, accordingly, did not
have a material adverse impact upon the Company's financial condition or results
of operations.

     Item 2. Change in Securities.

     In June 2000, in connection with John E. Reed's  investment in the Company,
the Company issued  398,406  shares of Simione  Series D Preferred  Stock to Mr.
Reed for an aggregate  purchase  price of $1.0  million.  The Series D Preferred
Stock is convertible  into common stock at an initial  conversion price of $2.51
per share, subject to antidilution adjustments for stock splits, stock dividends
or reclassifications. In connection with Mestek, Inc.'s waiver of certain voting
rights with respect to the ownership of Simione  Series B Preferred  Stock,  the
Company  issued a warrant to Mestek in June 2000 to purchase  490,396  shares of
the  Company's  common  stock at an exercise  price of $3.21 per share.  In July
2000, the Company  issued to Mestek a warrant to purchase  104,712 shares of the
Company's  common stock in connection  with Mestek's  guarantee of the loan from
Wainwright  Bank and Trust Company to the Company at an exercise  price of $2.51
per share. In issuing the warrants and shares without registration,  the Company
relied 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.

     Item 3. Defaults Upon Senior Securities.

     None

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

     None


                                       24
<PAGE>

     Item 5. Other Information.

     None.

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

     (a)  Exhibits:

          The following  Exhibits are filed as part of this Quarterly  Report on
          Form 10-Q:

          Exhibit No.    Description
          -----------    -----------

          10.3* Merger  Option  Agreement by and between the Company and Mestek,
          Inc. dated March 7, 2000

          10.4* Series D Convertible  Preferred  Stock Purchase  Agreement dated
          June 12, 2000 between the Company and John E. Reed

          10.5* Secured Convertible Credit Facility and Security Agreement dated
          June 12, 2000 between the Company,  Simione Central National,  LLC and
          Simione Central Consulting, Inc. and John E. Reed

          10.6*  Warrant  dated June 12,  2000 by and  between  the  Company and
          Mestek, Inc.

          10.7*  Warrant  dated July 12,  2000 by and  between  the  Company and
          Mestek, Inc.

          10.8*  Restated   Certificate  of  Incorporation  of  Simione  Central
          Holdings Inc.  filed with the Secretary of State of Delaware on August
          11, 2000

          27.1 Financial Data Schedule (for SEC use only).

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

          *Filed herewith.

          (b)  Reports on Form 8-K:

          The Company  filed a Report on Form 8-K on June 14, 2000  updating its
          listing status on the NASDAQ SmallCap Market.

          The Company  filed a Report on Form 8-K on June 22, 2000  reporting on
          the closing of the debt and equity  financings  in the Company by John
          E. Reed.

          The Company filed a Report on Form 8-K/A dated May 18, 2000  reporting
          the audited financial  statements of MCS, Inc. as of December 31, 1999
          and 1998 and the pro forma  combined  financial  statements of Simione
          and MCS as of December 31, 1999.




                                       25
<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.

                                        SIMIONE CENTRAL HOLDINGS, INC.


    Dated: August 11, 2000                 By:/s/ Steve Shea
                                              --------------------------------
                                           STEVE SHEA
                                           Senior Vice President - Finance and
                                           Chief Financial Officer
                                           (Principal Financial Officer)






<PAGE>


                                  EXHIBIT INDEX
                                  -------------

     Exhibit No.  Description
     -----------  -----------

     10.3* Merger Option  Agreement by and between the Company and Mestek,  Inc.
     dated March 7, 2000

     10.4* Series D Convertible  Preferred  Stock Purchase  Agreement dated June
     12, 2000 between the Company and John E. Reed

     10.5* Secured Convertible Credit Facility and Security Agreement dated June
     12, 2000 between the Company,  Simione  Central  National,  LLC and Simione
     Central Consulting, Inc. and John E. Reed

     10.6*  Warrant  dated June 12,  2000 by and between the Company and Mestek,
     Inc.

     10.7*  Warrant  dated July 12,  2000 by and between the Company and Mestek,
     Inc.

     10.8* Restated  Certificate of Incorporation  of Simione Central  Holdings,
     Inc. filed with the Secretary of State of Delaware on August 11, 2000


     27.1* Financial Data Schedule (for SEC use only).

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

     *Filed herewith.