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

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

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

                  FOR THE PERIOD ENDED MARCH 31, 2001

                                       OR

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

                  For the transition period from              to
                                                 ------------    -----------


                         Commission File Number: 0-22162

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


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

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

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



     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                                   4/30/2001
        -----                                   --------------
        COMMON STOCK, $.001 PAR VALUE           4,443,504 SHARES


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




<PAGE>


                                CARECENTRIC, INC.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX


    PART I.         FINANCIAL INFORMATION
    -------         ---------------------

    Item 1.         Consolidated Financial Statements

                    Consolidated Balance Sheets - March 31, 2001 (unaudited) and
                    December 31, 2000 (audited).

                    Consolidated  Statements  of Operations - Three Months Ended
                    March 31, 2001 (unaudited) and 2000 (audited).

                    Consolidated  Statements  of  Shareholders'  Equity  - Three
                    Months Ended March 31, 2001 (unaudited).

                    Consolidated  Statements  of Cash Flows - Three Months Ended
                    March 31, 2001 (unaudited) and 2000 (audited).

                    Notes to Consolidated  Financial Statements - March 31, 2001
                    (unaudited).

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

    Item 3.         Quantitative and Qualitative Disclosure About Market Risk


    PART II.        OTHER INFORMATION
    --------        -----------------

    Item 1.         Legal Proceedings

    Item 2.         Changes in Securities

    Item 3.         Defaults Upon Senior Securities

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

    Item 5.         Other Information

    Item 6.         Exhibits and Reports on Form 8-K

                                       2
<PAGE>


PART I - FINANCIAL INFORMATION
------------------------------

Item 1.  Consolidated Financial Statements

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


                                       3
<PAGE>

                                                    CARECENTRIC, INC.
                                               CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                                        <C>                   <C>

                                                                               MARCH 31,            DECEMBER 31,
                                                                              ----------            -----------
                                                                                  2001                  2000
                                                                              ----------            -----------
                                                                             (UNAUDITED)             (AUDITED)
                                            ASSETS

Current assets:
    Cash and cash equivalents                                               $    254,000          $     362,000
    Accounts receivable, net of allowance for doubtful
      accounts of $525,000 and $237,000 respectively                           9,404,000              8,484,000
    Prepaid expenses, inventory and other current assets                       1,109,000                701,000
                                                                            ------------         --------------
      Total current assets                                                    10,767,000              9,547,000

Purchased software, furniture and equipment, net                               1,908,000              1,957,000
Intangible assets, net                                                        22,488,000             23,405,000
Other assets                                                                     204,000                211,000
                                                                            ------------         --------------
      Total assets                                                          $ 35,367,000         $   35,120,000
                                                                            ============         ==============


                             LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Line of credit                                                         $   5,996,000          $   5,996,000
    Note payable                                                                 630,000                600,000
    Accounts payable                                                           2,838,000              1,156,000
    Accrued compensation expense                                               1,013,000                616,000
    Accrued liabilities                                                        6,968,000              7,447,000
    Customer deposits                                                          2,400,000              2,496,000
    Unearned revenues                                                          4,437,000              5,001,000
                                                                            ------------          -------------
      Total current liabilities                                               24,282,000             23,312,000

Accrued liabilities, less current portion                                         36,000                128,000

Notes payable long-term                                                        2,300,000                600,000
                                                                            ------------           ------------
Total liabilities                                                             26,618,000             24,040,000

Shareholders' equity:
    Preferred stock ; 10,000,000 shares authorized
      Series B Preferred, $.001 par value; 5,600,000 issued and outstanding        6,000                  6,000
      Series C Preferred, $.001 par value;  850,000 issued and outstanding         1,000                  1,000
      Series D Preferred, $.001 par value; 398,000 issued and outstanding              -                      -
    Common stock, $.001 par value; 20,000,000 shares authorized,
      4,443,504 shares issued and outstanding at March 31, 2001, and
      3,849,816 shares issued and outstanding at December 31, 2000;                4,000                  4,000
    Additional paid-in capital                                                21,070,000             21,070,000
    Stock warrants                                                             1,000,000              1,000,000
    Accumulated deficit                                                     (13,332,000)            (11,001,000)
                                                                           -------------           -------------
      Total shareholders' equity                                               8,749,000             11,080,000
                                                                           -------------           -------------
      Total liabilities and shareholders' equity                           $  35,367,000           $ 35,120,000
                                                                           =============           ============
</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  CareCentric,  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>


                                CARECENTRIC, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                      <C>                       <C>
                                                            Three Months Ended March 31,
                                                      --------------------------------------------
                                                             2001                     2000
                                                      -------------------      -------------------
Net revenues:                                             $    6,844,000            $   4,000,000
Costs and expenses:
    Cost of revenues                                           3,268,000                2,547,000
    Selling, general and administrative                        2,825,000                1,453,000
    Research and development                                   1,767,000                  711,000
    Depreciation and amortization                              1,085,000                  426,000
                                                      -------------------      -------------------
         Total costs and expenses                              8,945,000                5,137,000
                                                      -------------------      -------------------
    Loss from operations                                      (2,101,000)              (1,137,000)

Other (expense) income:
    Interest expense                                            (356,000)                 (76,000)
    Interest and other income                                    126,000                    6,000
                                                      -------------------      -------------------
Net loss before taxes                                         (2,331,000)              (1,207,000)
                                                      -------------------      -------------------

    Income tax benefit                                                 -                 (157,000)
                                                      -------------------      -------------------
Net  loss                                                 $   (2,331,000)            $ (1,050,000)
                                                      ===================      ===================

Net loss per share - basic and diluted                    $        (0.59)            $      (0.50)
                                                      ===================      ===================

Weighted average common shares -
    basic and diluted                                          3,922,000                2,093,000
                                                      ===================      ===================
</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  CareCentric,  Inc. on March 7, 2000,  the
date of the merger, as more fully explained in Notes 1 and 2 to the Consolidated
Financial Statements.  The weighted average shares computations have been recast
to  give  effect  to the  shares  of  CareCentric  common  stock  issued  to MCS
stockholders  in connection  with the MCS merger for both periods shown, as more
fully described in Note 1 to the Consolidated Financial Statements.


                                       5
<PAGE>


                                                 CARECENTRIC, INC.
                                  CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                                    FOR THE THREE MONTHS ENDED MARCH 31, 2001
<TABLE>
<CAPTION>
<S>                  <C>       <C>           <C>        <C>         <C>            <C>           <C>
                                                                                                                    TOTAL
                                COMMON                  PREFERRED      PAID-IN                   ACCUMULATED     SHAREHOLDERS'
                      SHARES      STOCK       SHARES      STOCK        CAPITAL      WARRANTS       DEFICIT          EQUITY
                    ----------- ----------- ----------- -----------  ------------- ------------  -------------   -------------
Balance at
December 31, 2000    3,850,000  $  4,000     6,848,000   $  7,000    $21,070,000   $ 1,000,000   $(11,001,000)   $11,080,000

Issuance of
$.001 par value
common stock (1)       594,000         -             -          -              -             -               -           -

Net loss                     -         -             -          -              -             -      (2,331,000)   (2,331,000)
                    ----------  --------    ----------   ---------  ------------   -----------   --------------   -----------
Balance at
March 31, 2001       4,444,000  $  4,000     6,848,000     $ 7,000   $21,070,000    $1,000,000    $(13,332,000)    8,749,000
                    =========== ========    ==========   =========  ============   ===========    =============   ===========
</TABLE>


    (1)      See Note 7 to the consolidated financial statements.


See notes to consolidated financial statements.
The above  financial  statements  reflect the fact that for accounting  purposes
MCS, Inc. is deemed to have  acquired  CareCentric,  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>
                                                   CARECENTRIC, INC.
                                          CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
<S>                                                                       <C>                   <C>
                                                                                 THREE MONTHS ENDED MARCH 31,
                                                                          -------------------------------------
                                                                                 2001                  2000
                                                                          --------------------  ---------------

 CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                                  $   (2,331,000)       $  (1,050,000)

 ADJUSTMENTS TO RECONCILE NET LOSS
 TO NET CASH USED IN OPERATING ACTIVITIES:
    Provision for doubtful accounts                                                43,000               71,000
    Amortization and depreciation                                               1,085,000              426,000

 CHANGES IN ASSETS AND LIABILITIES, NET OF ACQUISITIONS:
    Accounts receivable                                                          (920,000)          (1,364,000)
    Prepaid expenses and other current assets                                    (401,000)            (182,000)
    Accounts payable                                                            1,223,000              172,000
    Accrued compensation expense                                                  397,000              225,000
    Accrued liabilities                                                          (112,000)            (830,000)
    Customer deposits                                                             (96,000)             105,000
    Unearned revenues                                                            (564,000)           1,015,000
                                                                       --------------------  ------------------
         Net cash used in operating activities                                 (1,676,000)          (1,412,000)
                                                                       --------------------  ------------------

 CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of software, furniture and equipment                                   (119,000)            (161,000)
                                                                       --------------------  ------------------
         Net cash used in investing activities                                   (119,000)            (161,000)
                                                                       --------------------  ------------------

 CASH FLOWS FROM FINANCING ACTIVITIES:
 Cash received in connection with MCS merger                                            -            3,547,000
 Proceeds from issuance of notes payable                                        1,700,000                7,000
 Payments on capital lease obligations                                            (13,000)                   -
                                                                       --------------------  ------------------
         Net cash provided by financing activities                              1,687,000            3,554,000
                                                                       --------------------  ------------------
         Net increase/(decrease) in cash and cash equivalents                     (108,000)          1,981,000

 Cash and cash equivalents, beginning of period                                   362,000               47,000
                                                                       --------------------  ------------------
 Cash and cash equivalents, end of period                                   $     254,000        $   2,028,000
                                                                       ====================  ==================

</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  CareCentric,  Inc. on March 7, 2000,  the
date of the merger, as more fully explained in Notes 1 and 2 to the Consolidated
Financial Statements.



                                       7
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MCS as Deemed Acquirer of CareCentric, Inc.
-------------------------------------------

     On March 7, 2000,  CareCentric,  Inc.  (formerly  known as Simione  Central
Holdings Inc.)  ("CareCentric" or the "Company") and MCS, Inc. ("MCS") merged in
a transaction  accounted for as a reverse  acquisition  for financial  reporting
purposes.  In connection  with the  acquisition,  CareCentric  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
CareCentric. As a result, for financial reporting purposes MCS is considered the
acquiring company;  hence, the historical financial statements of MCS became the
historical  financial  statements  of  CareCentric  and  include  the results of
operations of CareCentric only from the effective acquisition date.

     The  weighted  average  common  shares for the three months ended March 31,
2000 are recast in the  accompanying  Consolidated  Statements  of Operations to
give effect to the 1,489,853 shares of CareCentric common stock that were issued
to the MCS shareholders in connection with the  CareCentric/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 CareCentric common stock are deemed to be owned
by the MCS shareholders.  For the period from March 7, 2000 through December 31,
2000, there were 3,849,816 total shares of issued and outstanding Company common
stock (after giving effect to the CareCentric/MCS  merger). The weighted average
shares for the year ended  December  31,  2000 are also recast to give effect to
the  1,489,853  shares of  CareCentric  common stock that were issued to the MCS
shareholders  pursuant to the  CareCentric/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  CareCentric,  after giving effect to the merger
with  MCS and,  as the  context  requires,  MCS,  prior  to the  CareCentric/MCS
merger),  include the results of operations of the parent company and its wholly
owned  subsidiaries and are unaudited  (except for the December 31, 2000 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  inter-company  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, 2001.

     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, 2000  appearing in the Company's  Report on Form 10-K for the
year ended December 31, 2000.

     The  financial  statements do not include any  adjustments  relating to the
recoverability  and  classification  of recorded  asset  amounts and amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable  to  continue  to  operate  in the  normal  course of  business.  See the
Liquidity and Capital Resources section of Management's  Discussion and Analysis
of Financial Condition and Results of Operations herein.

     Certain prior period amounts have been  reclassified to conform to the 2001
financial statement presentation.


Description of Business
-----------------------

     The Company is a leading  provider of  information  technology  systems and
related  services  and  consulting  services  designed  to help home health care
providers more effectively operate their businesses in today's environment.  The
Company's  focus  is  to  help  home  health  care  providers  streamline  their
operations  and  better  serve  their  patients.   The  Company  offers  several
comprehensive  software solutions.  Each of these solutions provides a basic set


                                       8
<PAGE>

of software  applications  and specialized  modules that can be added based upon
customer  needs.  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.


Cash Equivalents
----------------

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


Intangible Assets and Long-Lived Assets
---------------------------------------

     Statement of Financial  Accounting  Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed
Of"  requires  impairment  losses to be  recorded on  long-lived  assets used in
operations when indicators of impairment are present and the  undiscounted  cash
flows  estimated  to be  generated  by those  assets  are less than the  asset's
carrying amount.

     The intangible assets arising from the CareCentric/MCS merger are amortized
using the  straight-line  method over the estimated  useful lives of the related
assets as more fully disclosed in Note 4. 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) Earnings Per Share
-----------------------------

     The Company has 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  exclude  any  dilutive  effects of  options,  warrants  and
convertible securities.  Diluted earnings per share for the quarters ended March
31, 2000 and 2001 exclude the effects of options, warrants and conversion rights
as they would be antidilutive,  and as a result,  basic and diluted earnings are
the same for the quarters  ended March 31, 2000 and 2001.  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 the  provisions  of
Statement of Financial  Accounting Standards No. 123, Accounting for Stock Based
Compensation (SFAS No. 123 and related interpretations).


                                       9
<PAGE>


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
became  effective for the  Company's  fiscal  quarter ended March 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.

     On December 3, 1999, the SEC released Staff  Accounting  Bulletin 101, (SAB
101) "Revenue  Recognition in Financial  Statements".  This bulletin established
more clearly  defined  revenue  recognition  criteria than  previously  existing
accounting  pronouncements.  On June 26, 2000, the SEC released SAB 101B,  which
delayed the  required  implementation  of SAB 101 until no later than the fourth
quarter of fiscal years ending December 31, 2000. The Company  believes that the
effects of this bulletin were not material to its financial position, results of
operations or cash flow.


NOTE 2 - CARECENTRIC/MCS MERGER

     On March 7, 2000,  MCS completed the merger with  CareCentric.  CareCentric
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
CareCentric  immediately  prior to the merger. In connection with the closing of
the merger,  Mestek  invested  $6.0 million in  CareCentric  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  CareCentric  common  stock.  Additional
information on the merger is included in the Company's Registration Statement on
Form S-4 (Registration No. 333-96529).

     As required by generally accepted accounting principles (GAAP), the effects
of the merger on the Company's  assets and  liabilities  have been excluded from
the operating section of the cash flow statement for reporting purposes.

     Pro-forma unaudited results assuming the merger took place as of January 1,
2000 are as follows:

                                          FOR THREE MONTHS ENDED MARCH 31,
                                    --------------------------------------------
                                             2001                    2000
                                    ---------------------- ---------------------
   Net revenues                         $  6,844,000            $    8,011,000
   Net (loss)                           $ (2,331,000)           $   (2,445,000)
   Net (loss) per share - basic         $      (0.59)           $        (0.63)
   Net (loss) per share - diluted       $      (0.59)           $        (0.63)


                                       10
<PAGE>

NOTE 3 - PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

     Purchased software, furniture and equipment consisted of the following:
<TABLE>
<CAPTION>
   <S>                                         <C>                     <C>                 <C>    <C>    <C>    <C>
                                                                                             DEPRECIATION
                                                      MARCH  31,           DECEMBER  31,       ESTIMATED
                                                         2001                  2000          USEFUL  LIVES
                                                   ----------------     ----------------- ------------------
    Software                                         $  1,633,000           $  1,635,000          3 years
    Furniture and fixtures                              1,553,000              1,551,000         10 years

    Computer equipment                                  4,534,000              4,415,000          5 years
                                                 ------------------     ------------------
                                                        7,720,000              7,601,000
    Accumulated depreciation                           (5,812,000)            (5,644,000)
                                                 ------------------     ------------------
    Net purchased software, furniture
      and equipment                                  $  1,908,000           $  1,957,000
                                                 ==================     ==================
</TABLE>

NOTE 4 - INTANGIBLE ASSETS

     Intangible assets at March 31, 2001 consisted of the following:
<TABLE>
<CAPTION>
      <S>                        <C>                 <C>                   <C>                <C>
                                                         ACCUMULATED          NET BOOK         AMORTIZATION
                                       COST             AMORTIZATION            VALUE             PERIOD
                                 -----------------   --------------------  ----------------   ----------------

      Developed technology            $10,650,000         $  (1,442,000)      $  9,208,000           8 years
      Assembled workforce               2,300,000              (498,000)         1,802,000           5 years
      Customer base                     1,700,000              (204,000)         1,496,000           9 years
      Goodwill                         11,851,000            (1,869,000)         9,982,000           7 years
                                 -----------------   --------------------  ----------------
                                      $26,501,000         $  (4,013,000)      $ 22,488,000
                                 =================   ====================  ================
</TABLE>



NOTE 5 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
<TABLE>
<CAPTION>
<S>                                                 <C>                  <C>
                                                      March 31, 2001     December 31, 2000
                                                      --------------     -----------------

SHORT TERM:
Line of Credit                                       $ 5,996,000         $ 5,996,000
Note Payable - Mestek                                $   600,000         $   600,000
                                                     ============        ============

LONG TERM:
Convertible Note Payable - Barrett C. O'Donnell      $   600,000         $   600,000
Convertible Note Payable - J.E Reed                  $ 1,700,000         $         -
                                                     ============       =============
</TABLE>


Line of Credit:

     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  initially  used to pay off the line of credit  with  Silicon  Valley  Bank,
certain short-term loans from Mestek,  Inc., and a loan from David O. Ellis, and
then to fund the Company's operations.  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


                                       11
<PAGE>

Company  expects  that  line  of  credit  will  be  renewed  at  maturity  under
substantially  equivalent terms. The Company's  obligations under the Wainwright
Facility  are  guaranteed  by Mestek in  consideration  of which the Company has
issued a warrant to Mestek to purchase  104,712  shares of the Company's  common
stock as more fully explained in Note 7 to these Financial Statements.

Convertible Note Payable - Barrett C. O'Donnell:

     On November 11, 1999,  Simione borrowed  $500,000 from Barrett C. O'Donnell
on an unsecured  basis and executed a promissory  note in connection  therewith.
Mr. O'Donnell is a director of the Company. When the CareCentric/MCS  merger was
completed on March 7, 2000, the Company  succeeded to this obligation.  The note
payable to Mr.  O'Donnell  included  interest at 9% per annum,  was scheduled to
mature on May 11, 2002, and required quarterly payments of accrued interest.  On
August 8, 2000,  the  $500,000  note  payable to Mr.  O'Donnell,  together  with
$100,000  of  deferred  salary,   was  cancelled  in  exchange  for  a  $600,000
subordinated  note,  convertible into CareCentric common stock at a strike price
of $2.51 per share, with interest at 9% per annum and a five-year maturity.

Note Payable - Mestek:

     The Company is obligated under a one year unsecured  promissory note in the
principal  amount of  $600,000  payable to Mestek Inc.  which bears  interest at
prime with  interest  payable  semiannually  and which matures on July 30, 2001.
This note covers funds  advanced by Mestek to  CareCentric  to cover payroll and
accounts  payable  obligations  incurred by the Company during the period of its
transition of senior  lenders from Silicon  Valley Bank to  Wainwright  Bank and
Trust Company.

J.E. Reed Facility:

     On June 22, 2000, the Company entered into a new financing facility (the J.
E. Reed  Facility)  provided by John E. Reed,  Chairman of  CareCentric  and the
Chairman and Chief  Executive  Officer of Mestek,  Inc. The J. E. Reed  Facility
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.  Borrowings
totaling $2.2 million were  outstanding  under the J. E. Reed Facility as of May
11, 2001.

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


NOTE 6 - COMMITMENTS AND CONTINGENCIES

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

NOTE 7 - SHAREHOLDERS' EQUITY

     Subsequent to December 31, 2000, the Company's Shareholders' Equity (all on
a split-adjusted basis) is as follows:

     Common Shares - 20,000,000 shares  authorized,  $.001 par value,  4,443,504
shares issued and outstanding. Of such shares, 1,489,853 were issued on March 7,
2000 to the former MCS common shareholders, 606,904 were issued on March 7, 2000
to the holders of  CareCentric  Series A Preferred  Stock (the former  preferred


                                       12
<PAGE>

shareholders and noteholders of CareCentric Solutions,  Inc.), which shares were
converted  into  CareCentric  common shares in connection  with the merger,  and
593,688 were issued on March 19, 2001 to the former  preferred  shareholders and
noteholders of CareCentric Solutions, Inc. as described below.

     Pursuant  to the  terms of the  July 12,  1999  Merger  Agreement  by which
Simione  acquired  the stock of  CareCentric  Solutions,  Inc.,  the Company was
required  to issue up to an  additional  606,904  shares of common  stock to the
former preferred  shareholders  and noteholders of CareCentric  Solutions if the
average  closing  price of the  Company's  stock for the period  October 1, 2000
through December 31, 2000 is not equal to $15.00 per share.  Since the Company's
average  closing stock price for the fourth quarter of 2000 was less than $15.00
per share,  on March 19, 2001,  the Company  issued 593,688 shares of its common
stock to the  former  preferred  shareholders  and  noteholders  of  CareCentric
Solutions.  The Company has  asserted  that it is not  required to issue  13,216
additional  shares of its common stock as well as 150,740 shares of common stock
currently  being  held  by it in  escrow  under  the  terms  of the  CareCentric
Solutions  Merger  Agreement  based upon  various  indemnification  and  expense
overages  claims it believes it has  against  the former  CareCentric  Solutions
preferred shareholders and noteholders.  The Company has negotiated a settlement
of these  claims with the  representative  of the former  CareCentric  Solutions
parties  pursuant to which 88,586  shares of common stock will be released  from
escrow  and   distributed  to  the  former   CareCentric   Solutions   preferred
shareholders  and  noteholders,  the  remaining  62,154  escrow  shares  will be
cancelled,  no additional shares of common stock will be issued, and the parties
will execute a comprehensive settlement agreement.

     Stock Options - The Company has granted options to purchase an aggregate of
698,819 shares (on a split adjusted basis) of common stock as of March 31, 2001.
Of the options granted,  none were exercised prior to March 31, 2000 and 117,593
have been cancelled.  Of the remaining  581,226 options,  243,426 are vested and
exercisable as of March 31, 2001. The exercise prices range from $2.51 to $73.55
per share, both on a split adjusted basis.

     On January 5, 2001,  non-qualified  options  totaling  25,000  shares  were
granted  under the Plan to the  non-employee  directors at an exercise  price of
$3.25 per share.


NOTE 8 - SEGMENT RESULTS

     The Company has two reportable  segments:  Software Systems and Consulting.
The Company's Software Systems 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)  profits and assets of the Company include the operations of
MCS only from January 1, 2000 through March 7, 2000 and  CareCentric  from March
7, 2000 forward. Accordingly, because CareCentric's 2000 results from operations
are not fully included,  comparability  between the 2000 and 2001 figures is not
meaningful.  See Management's Discussion and Analysis of Financial Condition and
Results of Operations for a discussion of revenue and results of operations on a
"comparable" basis. The revenues,  operating losses and assets of the Company by
business segment are as follows:


                                       13
<PAGE>

                                                 Three Months ended March 31,
                                             -----------------------------------
                                                2001                2000
                                             ---------------     ---------------
 Revenues:
    Software Systems                        $   5,685,000       $    3,564,000
    Consulting                                  1,159,000              436,000
                                            ---------------     ----------------
             Total                          $   6,844,000       $    4,000,000
                                            ===============     ================

 Cost of sales:
    Software Systems                        $    2,488,000      $    2,122,000
    Consulting                                     780,000             425,000
                                            ---------------     ----------------
             Total                               3,268,000       $   2,547,000
                                            ===============     ================

 Research and development:
    Software Systems                        $    1,767,000        $    711,000
                                            ===============     ================

 Depreciation and amortization:
    Software Systems                        $      957,000       $     389,000
    Consulting                                     128,000              37,000
                                            ---------------     ----------------
             Total                          $    1,085,000       $     426,000
                                            ===============     ================

 Net income (loss) from Continuing
 Operations:
    Software Systems                        $   (2,156,000)      $  (1,177,000)
    Consulting                                      55,000              40,000
                                            ----------------     ---------------
             Total                              (2,101,000)      $   (1,137,000)
                                            ================     ===============

 Interest expense
    Software Systems                        $      356,000       $     76,000
                                            ----------------     ---------------
             Total                          $      356,000       $     76,000
                                            ================     ===============

 Income taxes
    Software Systems                        $            -       $   (157,000)
                                            ----------------     ---------------
              Total                         $            -       $   (157,000)
                                            ================     ===============

 Expenditures for long-lived Assets
    Software Systems                        $      119,000       $    161,000
                                            ----------------     ---------------
              Total                         $      119,000       $    161,000
                                            ================     ===============


                                              March 31,           December 31,
                                        ----------------------------------------
                                              2001                    2000
                                        ------------------     -----------------
 Assets
 Software Systems                            $  30,865,000         $30,648,000
 Consulting                                  $   4,502,000         $ 4,472,000
                                        -------------------     ----------------
               Total                         $  35,367,000         $35,120,000
                                        ===================     ================

     Certain  categories  of expenses are omitted.  See  Consolidated  Financial
Statements above.

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

                                       14
<PAGE>

NOTE 9 - LICENSE AGREEMENTS

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


NOTE 10 - SUBSEQUENT EVENTS

     On January 31,  2001,  the Company  changed its name from  Simione  Central
Holdings,  Inc. to CareCentric,  Inc. pursuant to a Certificate of Ownership and
Merger filed under  applicable  provisions of the Delaware  General  Corporation
Law. On the same date,  the Company's two  operating  subsidiaries  also changed
their names, with Simione Central Consulting,  Inc. changing its name to Simione
Consulting,  Inc.  and  Simione  Central  National,  LLC  changing  its  name to
CareCentric National, LLC pursuant to filings made with the Georgia Secretary of
State's office.

     On March 19, 2001, the Company issued 593,688 shares of its common stock to
the former  preferred  shareholders  and  noteholders of  CareCentric  Solutions
pursuant  to the  terms of the July 12,  1999  Merger  Agreement  as more  fully
explained in Note 7 to these Financial Statements.

     In the second quarter of 2001 the Company recorded restructuring charges of
approximately  $675,000  relating  primarily  to  initiatives  to reduce  future
operating costs by focusing the software operations into two core markets - Home
Medical  Equipment - IV and Home Health Agency.  Principal costs included in the
charge  were (i)  severance  and  related  benefits  for the  elimination  of 33
positions  and the layoff of six  employees,  and (ii) the costs of closing  one
non-essential training and support location.

                                       15
<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  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 close the  transactions  required  to obtain  the  additional
capital resources described herein,  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 ,the effects of changes in regulations affecting health
care providers,  uncertainties  regarding the  restructuring  described  herein,
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  secured  $13.0 million in new debt and equity  capital  during
2000 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>

     Details on these three  transactions  are  described  in greater  detail in
Note 5 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 May 11,  2001,  the unused
capacity under the John E. Reed and  Wainwright  Bank and Trust Company lines of
credit are $3,800,000 and $0, respectively.

     Notwithstanding  the  Company's   continued   commitment  to  research  and
development,  its net borrowings  from all sources,  representing  in effect the
Company's "cash run rate",  were  significantly  reduced during the three months
ended March 31, 2001,  to  $1,700,000,  as compared  with the three months ended
December 31, 2000, during which the Company borrowed  $2,697,000.  The Company's
borrowings  from all  sources  between  April  1,  2001  and May 11,  2001  were
$500,000,  with $3,800,000 in available  capacity  remaining under the J.E. Reed
line of credit as of that date.  As disclosed in the financial  statements,  the
Company has a working capital deficit of $13,515,000 at March 31, 2001.

     In  furtherance  of the Company's plan to achieve a breakeven cash run rate
in the near term,  it  implemented a  restructuring  plan in April 2001, as more
fully described  herein, in addition to the various other ongoing cost reduction
initiatives  undertaken  subsequent  to the  MCS/CareCentric  merger on March 7,
2000.  The Company  believes in light of these cost  reduction  efforts that its
funding  sources,  as described  above,  will be  sufficient to meet its working
capital needs in 2001. The Company remains dependent,  however,  on its majority
shareholder, J. E. Reed, for its working capital financing needs.

                                       16
<PAGE>

     As part of the restructuring  plan, the Company will record a restructuring
charge of  approximately  $675,000 to cover the cost of employee  severance  and
related  benefits  for  the  elimination  of 33  positions,  the  layoff  of six
employees,  and the closing of one non-essential  training and support facility.
Total annual  payroll and  associated  benefits for the affected  employees  are
approximately  $3.8  million  and total  annual  operating  costs for the closed
facility are approximately $55,000.

     The Company's operating earnings for the three months ended March 31, 2001,
after adding back non cash charges  (amortization and depreciation) and spending
on research and development, was $751,000, computed as follows:

          (Loss) Income from operations          $     (2,101,000)
          Amortization and depreciation                 1,085,000
          Research and development                      1,767,000
                                              --------------------
                                                 $        751,000
                                              ====================

Background
----------

     CareCentric,  Inc.  (formerly  known as  Simione  Central  Holdings,  Inc.)
("CareCentric" or the "Company") is a leading provider of information technology
systems and related software support services and consulting  services  designed
to help home health care providers more effectively  operate their businesses in
today's  environment.  The Company's focus is to help home health care providers
streamline their operations and better serve their patients.  CareCentric offers
several  comprehensive  software  solutions.  Each of these solutions provides a
basic set of software  applications and specialized modules,  which can be added
based on  customer  needs.  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.

     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.  The  Company  generally
requires  payment of a deposit  upon the signing of a customer  order as well as
certain  additional  payments  prior to  delivery.  As a result,  the  Company's
balance sheet reflects significant customer deposits.

     Third party software and computer hardware revenues are recognized when the
related  products  are  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 three
months  ended  March 31,  2001 and 2000,  the  Company  did not  capitalize  any
computer software development costs.

                                       17
<PAGE>

Backlog
-------

     The  Company  had  backlog  associated  with  its  software  operations  of
approximately  $3.7  million and $4.1 million on March 31, 2001 and December 31,
2000,   respectively.   Backlog   consists  of  the   unrecognized   portion  of
contractually committed software license fees, hardware,  estimated installation
fees and  professional  services.  The length of time  required  to  complete an
implementation  depends on many  factors  outside  the  control of the  Company,
including  the state of the  customer's  existing  information  systems  and the
customer's  ability to commit the  personnel  and other  resources  necessary to
complete the implementation  process.  As a result, the Company may be unable to
predict  accurately  the amount of revenue it will  recognize  in any period and
therefore can make no assurances  that the amounts in backlog will be recognized
in the next twelve months.

     During  the first  quarter  of 2001  CareCentric  recorded  new  orders for
software and related  services of $2.1 million,  a decrease of $0.5 million,  or
19.0%, from the $2.6 million recorded in the first quarter of 2000.

Results of Operations
---------------------

     Results of operation for the three months ended March 31, 2000 included the
operations of the former MCS for three months and the  operations of CareCentric
(formerly  Simione  Central  Holdings,  Inc.) for only the period  subsequent to
March 7, 2000.  As a result,  a comparison  of the 2001 and 2000  Statements  of
Operations is not  meaningful  to an  understanding  of the  Company's  relative
performance.  Therefore, for purposes of comparability, the following discussion
reflects the assumption that the operations of CareCentric and MCS were combined
on a pro-forma  basis for the three months ended March 31, 2000, as  illustrated
in Table 1 below.

     Net Revenues.  Total net revenues for the three months ended March 31, 2001
decreased by $1.2 million,  or 15.0%,  to $6.8 million in 2001 from $8.0 million
in 2000.  Revenues from software systems decreased by $0.4 million, or 13.3%, to
$2.6  million  in 2001  from  $3.0  million  in 2000..  Revenues  from  software
maintenance  decreased by $0.3  million,  or 9.1%,  to $3.0 million in 2001 from
$3.3  million  in 2000.  Revenue  from  consulting  services  decreased  by $0.5
million, or 29.4%, to $1.2 million in 2001 from $1.7 million in 2000.

     These reduced  revenues are principally  attributable  to reduced  spending
resulting from  uncertainties  in the  marketplace  related to a new home health
care reimbursement  system, the Prospective  Payment System (PPS) implemented by
the Health Care Financing  Administration (HCFA) in October 2000. In contrast to
the former Interim Payment System which was based upon Medicare's  historic cost
reimbursement,  PPS is based  upon  pre-set  per  episode  fees.  As  such,  PPS
represented a radical  departure from past practice and  introduced  significant
uncertainty in the home health care industry.

     Cost of  Revenues.  Total cost of  revenues  decreased  approximately  $1.5
million,  or 31%, to $3.3 million for the three months ended March 31, 2001 from
$4.8  million in 2000.  As a  percentage  of total  revenues,  cost of  revenues
decreased  to  48.1% in 2001  from  59.6% in  2000.  The $1.5  million  decrease
resulted from reduced  total sales in 2001 as compared to 2000 and  efficiencies
achieved  from the  combination  of support  operations,  elimination  of excess
capacity and cost management  after the merger.  The improvement in gross margin
percentage  resulted from efficiencies  achieved from the combination of support
operations  and other cost  management  activities,  as well as a  reduction  in
hardware revenues as a percentage of total revenues.

     Selling,  General and Administrative  Expenses.  Total selling, general and
administrative expenses decreased $0.1 million to $2.9 million in 2001 from $3.0
million in 2000. This decrease is principally  attributable to synergies derived
from centralization of administrative functions and elimination of non-essential
facilities  and excess  capacity  totaling  $0.3 million,  which were  partially
offset by one-time expenditures surrounding the change in corporate identity and
increased advertising and marketing costs totaling $0.2 million. As a percentage
of total net revenues,  selling,  general and administrative expenses were 41.6%
for the three  months  ended  March 31, 2001  compared  with 37.0% for the three
months ended March 31,  2000.  The increase as a percent of revenue is primarily
attributable to the relatively fixed nature of these costs and reduced revenues.

     Research  and  Development  Expenses.  Research  and  development  expenses
increased  $0.3  million,  or 20.0% to $1.8  million in 2001 from 1.5 million in
2000. As a percentage of total net revenues,  these expenses  increased to 26.0%
for the three  months ended March 31, 2001 from 18.6% for the three months ended

                                       18
<PAGE>

March 31, 2000. This dollar increase was attributable to additional  development
costs for all products,  but  especially  for The Smart  Clipboard(R),  PharmMed
Rx(TM) and HMExpress.

     Amortization and Depreciation.  Amortization and depreciation  decreased by
$0.1  million,  or 9.5% to $1.1 million in 2001 from $1.2 million in 2000.  This
decrease resulted from the normal disposition of fully depreciated assets.

     Other Income  (Expense).  Interest expense for the three months ended March
31, 2000 relates  primarily to  borrowings  under the  Company's  line of credit
agreement  and capital  lease  obligations  and has  increased by  approximately
$177,000 as a result of increased borrowing subsequent to March 31, 2000.

     Income  Taxes.  The  Company  has not  incurred  or paid  taxes  since  its
inception.


             TABLE 1. CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
  <S>                                                       <C>                      <C>
                                                               Three Months Ended March 31,
                                                        -------------------------------------------
                                                               2001                     2000
                                                        -------------------      -------------------
  Net revenues:                                              $   6,844,000            $   8,011,000
  Costs and expenses:
      Cost of revenues                                           3,268,000                4,778,000
      Selling, general and administrative                        2,825,000                2,963,000
      Research and development                                   1,767,000                1,489,000
      Depreciation and amortization                              1,085,000                1,198,000
                                                        -------------------      -------------------
           Total costs and expenses                              8,945,000               10,428,000
                                                        -------------------      -------------------
      Loss from operations                                      (2,101,000)              (2,418,000)

  Other (expense) income:
      Interest expense                                            (356,000)                (178,000)
      Interest and other income                                    126,000                   (3,000)
                                                        -------------------      -------------------
  Net loss before taxes                                         (2,331,000)              (2,599,000)
                                                        -------------------      -------------------
      Income tax benefit                                                 -                 (154,000)
                                                        -------------------      -------------------
  Net  loss                                                  $  (2,331,000)          $   (2,445,000)
                                                        ===================      ===================

  Net loss per share - basic and diluted                      $     (0.59)             $     (0.63)
                                                        ===================      ===================

  Weighted average common shares -
      basic and diluted                                          3,927,000                3,927,000
                                                        ===================      ===================
</TABLE>

                                       19
<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.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk.

     As of March 31, 2001, the Company's obligations include variable rate notes
payable  and a line of credit  bank note with  aggregate  principal  balances of
approximately  $7.2 million,  which mature at various  dates  through 2005.  The
Company  is  exposed  to the  market  risk of  significant  increases  in future
interest rates.  Each incremental  point change in the prime interest rate would
correspondingly   increase  or  decrease  the  Company's   interest  expense  by
approximately $66,000 per year.

     At March 31, 2001,  the Company had accounts  receivable  of  approximately
$9.4 million  (net of an  allowance  for  doubtful  accounts of  $525,000).  The
Company  is  subject  to a  concentration  of credit  risk  because  most of the
accounts receivable are due from companies in the home health industry.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 2. Change in Securities.

     On March 19, 2001, the Company issued 593,688 shares of its common stock to
the former preferred shareholders and noteholders of CareCentric Solutions, Inc.
pursuant  to the terms of the July 12,  1999  Merger  Agreement.  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.

Item 5. Other Information.

     None.


                                       20
<PAGE>


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

 10.1*         First Amendment to Voting Agreement  Regarding  Simione Directors
               dated as of July 12, 2000 by and among the Company, Mestek, Inc.,
               John E.  Reed,  Stewart  B.  Reed,  E.  Herbert  Burk,  Daniel J.
               Mitchell and Jesse I. Treu.

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

*Filed herewith.


(b)           Reports on Form 8-K:

     The Company filed a Report on Form 8-K dated January 31, 2001 regarding the
change of its corporate name to CareCentric, Inc.




                                       21
<PAGE>


SIGNATURES

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

                                        CARECENTRIC, INC.


Dated: May 15, 2001                     By:/s/ Stephen M.Shea
                                        ----------------------------------------
                                           STEPHEN M. SHEA
                                           Senior Vice President - Finance and
                                           Chief Financial Officer
                                           (Principal Financial Officer)






                                       22
<PAGE>



EXHIBIT INDEX

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

    10.1       First Amendment to Voting Agreement  Regarding  Simione Directors
               dated as of July 12, 2000 by and among the Company, Mestek, Inc.,
               John E.  Reed,  Stewart  B.  Reed,  E.  Herbert  Burk,  Daniel J.
               Mitchell and Jesse I. Treu.

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

*Filed herewith.






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