SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549
                                       FORM 10-K/A


                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended December 31, 2001

                            Commission File No. 000-21684


                          THE WELLCARE MANAGEMENT GROUP, INC.
                         -------------------------------------
                (Exact name of registrant as specified in its charter.)


                New York                               14-1647239
            ----------------                     ----------------------
        (State of Incorporation)            (IRS Employer Identification No.)

                     280 Broadway, 3rd Floor, Newburgh, NY  12250
                     --------------------------------------------
                        (Address of principal executive office)

                                    (845) 440-2400
                  (Registrant's telephone number, including area code)

             Securities registered pursuant to section 12(b) of the act:  None

Indicate by check mark whether the Registrant (1) has filed all reports
Required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
Filing requirements for the past 90 days.        Yes X      No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.        Yes        No X

The aggregate market value of the voting stock (Common Stock, $.01 par value)
held by non-affiliates of the Registrant on March 15, 2002 was $5,335,184 based
on the closing sales price of the Common Stock.

There were 38,808,140 shares of the Registrant's Common Stock and 313,555
Shares of the Registrant's Class A Common Stock outstanding on March 15, 2001.

Documents incorporated by reference:  None

NOTE:  This 10-K/A amends The WellCare Management Group, Inc.'s 10-K filing for
       the year ended December 31, 2001, filed on April 1, 2002, due to a
       typographical errors on the Independent Auditors' Report on page 26 of
       Item 8 and the signatures on page 69.

NOTE:  Item 8 and signature page filed only.  Pages correspond to original
       filing.




<Page>  25
ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Reports                                      26
Consolidated Balance Sheets - December 31, 2001 and 2000           28
Consolidated Statements of Operations for the years ended
  December 31, 2001, 2000, and 1999                                29
Consolidated Statements of Shareholders' Deficiency
  for the years ended December 31, 2001, 2000, and 1999            30
Consolidated Statements of Cash Flows for the years ended
  December 31, 2001, 2000, and 1999                                32
Notes to Consolidated Financial Statements                         33

     CONSOLIDATED SUPPLEMENTAL SCHEDULES

Schedule I - Condensed Financial Information of the Registrant     56
Schedule II - Valuation and Qualifying Accounts                    59



<PAGE>  26
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
  WellCare Management Group, Inc.

We have audited the accompanying consolidated balance sheets of WellCare
Management Group, Inc. and subsidiaries (the "Company") as of December 31, 2001
and 2000, and the related consolidated statements of operations, shareholders'
deficiency, and cash flows for each of the two years in the period ended
December 31, 2001.  Our audits also included the financial statement schedules
listed in the Index at Item 14 (a) 2.  These financial statements and financial
statement schedules are the responsibility of the Company's management.  Our
responsibility is to express an opinion on the financial statements and
financial statement schedules based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31,
2001 and 2000, and the results of their operations and their cash flows for
each of the two years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America.
Also, in our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 2 to
the consolidated financial statements, the Company's recurring losses from
operations, working capital deficit, shareholders' deficiency, failure to
achieve the minimum statutory equity requirements of the State of New York
Insurance Department, and failure to maintain the minimum risk based capital
requirements of the State of Connecticut Insurance Department raise substantial
doubt about its ability to continue as a going concern.  Management's plans
concerning these matters are also described in Note 2.  The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


Deloitte & Touche LLP
Certified Public Accountants
Orlando, Florida
March 8, 2002







<PAGE>  27
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
The WellCare Management Group, Inc.
Tampa, Florida

We have audited the accompanying consolidated statements of operations,
shareholders' deficiency and cash flows of the WellCare Management Group, Inc.
and subsidiaries (the "Company") for the year ended December 31, 1999.  We have
also audited the financial statement schedules for the year ended December 31,
1999 listed in the accompanying index.  These consolidated financial statements
and financial statement schedules are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements and financial statement schedules based on our audit.

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

In our opinion, such consolidated financial statements present fairly, in
all material respects, the Company's results of operations and cash
flows for the year ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States of America.  Also, in our
opinion, the financial statement schedules for the year ended December 31,
1999, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 2 to
the consolidated financial statements, the Company's recurring losses from
operations, working capital deficit, shareholders' deficiency and failure to
maintain 100% of the contingent reserve requirement of the New York State and
Connecticut State Departments of Insurance raise substantial doubt about its
ability to continue as a going concern.  Management's plans concerning these
matters are also described in Note 2.  The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.



BDO Seidman, LLP
Miami, Florida
April 12, 2000







<PAGE>  28
               THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                  ($ In Thousands)
<TABLE>
<CAPTION>
                                                                     December 31,
                                                            ------------------------------
                                                                 2001            2000
                                                            --------------  --------------
<S>                                                         <C>              <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                  $     8,212,    $     6,025
  Accounts receivable (net of allowance for doubtful
   accounts of $0 in 2001 and $200 in 2000)                        8,122           8,247
  Advances to participating providers                              1,518             555
  Due from affiliate, net                                             59               -
  Other receivables                                                1,092             791
  Prepaid expenses and other current assets                          738             510
                                                            --------------  --------------
          Total current assets                                    19,741          16,128
Property and equipment (net of accumulated depreciation
  and amortization of $1,384 in 2001 and $4,166 in 2000)             279             640
Other Assets:
  Restricted cash                                                  2,577           3,352
                                                            --------------  --------------
          Total assets                                       $    22,597     $    20,120
                                                            ==============  ==============

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current Liabilities:
  Medical costs payable                                      $    17,537     $    16,187
  Accrued provider settlement - current portion                    1,035           1,052
  Due to affiliate, net                                                -             223
  Accounts payable and accrued expenses                            3,759           2,043
  Notes payable to affiliate                                       8,304           5,206
  Unearned revenue                                                 1,407           1,919
                                                            --------------  --------------
          Total current liabilities                               32,042          26,630

Other Liabilities:
  Accrued provider settlement - non-current portion                    -           1,052
                                                            --------------  --------------
          Total liabilities                                       32,042          27,682

Commitments and Contingencies (Note 13 and 15)

 Shareholders' Deficiency:
  Class A common stock - $0.01 par value;
    1,109,292 shares authorized; 313,555 shares
    issued and outstanding in 2001 and 2000                            3               3
  Common stock - $0.01 par value; 75,000,000 shares
    authorized; 38,807,940 shares issued in 2001 and 2000            388             388
  Additional paid-in capital                                      54,709          54,709
  Accumulated deficit                                            (64,365)        (62,460)
                                                            --------------  --------------
                                                                  (9,265)         (7,360)
  Treasury stock at cost - 11,395 shares in 2001
    and 12,850 shares in 2000                                       (180)           (202)
                                                            --------------  --------------
          Total shareholders' deficiency                          (9,445)         (7,562)
                                                            --------------  --------------
          Total liabilities and shareholders' deficiency     $    22,957     $    20,120
                                                            ==============  ==============
</TABLE>
              See Notes to Condensed Consolidated Financial Statements





<PAGE>  29
             THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  ($ In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                                      ------------------------------------
                                                         2001         2000         1999
                                                      ----------   ----------   ----------
<S>                                                   <C>          <C>          <C>
Revenue:
  Premiums earned                                     $  96,814    $  76,231    $ 110,516
  Interest income                                           390          346          693
  Insurance reimbursement                                     -          776            -
  Other income - net                                        124        1,251        1,300
                                                      ----------   ----------   ----------
Total revenue                                            97,328       78,604      112,509
Expenses:
  Medical expenses                                       81,587       70,055      101,798
  General and administrative expenses:
    Management fee expenses - affiliate                  11,186        7,799        3,046
    Other general and administrative expenses             5,437        3,863       17,523
    Depreciation and amortization                           391          420        1,147
    Bad debt expense                                          -        1,172        2,090
                                                      ----------   ----------   ----------
  Total general and administrative expenses              17,014       13,254       23,806
  Interest expense                                          632          174        3,565
                                                      ----------   ----------   ----------
Total expenses                                           99,233       83,483      129,169
                                                      ----------   ----------   ----------
Net loss before income tax benefit and
 extraordinary gain                                      (1,905)      (4,879)     (16,660)
Income tax benefit                                            -            -       (2,152)
                                                      ----------   ----------   ----------
Net loss before extraordinary gain                       (1,905)      (4,879)     (14,508)
Extraordinary gain, net of tax of $2,152 for 1999             -            -       16,116
                                                      ----------   ----------   ----------
Net (loss) income                                        (1,905)      (4,879)       1,608
Preferred stock deemed dividend                               -            -       (3,043)
                                                      ----------   ----------   ----------
Net loss available to common shareholders              $ (1,905)    $ (4,879)    $ (1,435)
                                                      ==========   ==========   ==========

Earnings per share:
  Net loss before extraordinary gain
   - basic and diluted                                 $  (0.05)    $  (0.13)    $  (1.13)

  Extraordinary gain - basic and diluted               $      -     $      -     $   1.04

  Net loss available to common shareholders
   - basic and diluted                                 $  (0.05)    $  (0.13)    $  (0.09)

Weighted average shares outstanding
   - basic and diluted                                   38,796       38,795       15,489

</TABLE>
                See Notes to Consolidated Financial Statements





<PAGE>  30
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                                ($ In Thousands)

<TABLE>
<CAPTION>
                                     Class A and B   Class A            Additional
                                       Preferred     Common    Common    Paid-in      Accumulated
                                         Stock        Stock     Stock    Capital        Deficit
                                     -------------   -------   ------   ----------    ------------
<S>                                   <C>            <C>       <C>      <C>           <C>
Balance, December 31, 1998             $      -      $   10    $   65   $  31,612      $  (59,189)
Conversion of subordinated
 convertible note and accrued
 interest into preferred stock                1           -         -      15,240               -
Subordinated convertible
 debt inducement                              -           -         -       3,043               -
Preferred stock issued for cash               1           -         -       5,002               -
Conversion of preferred stock
 to common stock                             (2)          -       314        (312)              -
Conversion of Class A common
 stock to common stock                        -          (7)        7           -               -
Net income                                    -           -         -           -           1,608
Other comprehensive income -
 unrealized holding gains                     -           -         -           -               -
Comprehensive income                          -           -         -           -               -
Repayment of loan receivable                  -           -         -           -               -
                                     -------------   -------   ------   ----------    ------------
Balance, December 31, 1999                    -           3       386      54,585         (57,581)
Net loss                                      -           -         -           -          (4,879)
Other comprehensive income -
 unrealized holding gains                     -           -         -           -               -
Comprehensive income                          -           -         -           -               -
Issuance of common stock                      -           -         2         124               -
                                     -------------   -------   ------   ----------    ------------
Balance, December 31, 2000             $      -      $    3    $  388   $  54,709      $  (62,460)
Net loss                                      -           -         -           -          (1,905)
Issuance of treasury stock                    -           -         -           -               -
                                     -------------   -------   ------   ----------    ------------
Balance, December 31, 2001             $      -      $    3    $  388   $  54,709      $  (64,365)
                                     =============   =======   ======   ==========    ============
                                                                                      Continued
 </TABLE>
                 See Notes to Consolidated Financial Statements





<PAGE>  31
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                              ($ In Thousands)
<TABLE>
<CAPTION>
                                 Accumulated                              Total (Capital
                                   Compre-          Notes                   Deficiency)
                                   Hensive       Receivables    Treasury   Shareholders'
                                Income/(Loss)    Shareholders     Stock       Equity
                                -------------    ------------   --------  --------------
<S>                              <C>             <C>           <C>        <C>
Balance, December 31, 1998       $        1       $      (5)    $  (202)   $   (27,708)
Conversion of subordinated
 convertible note and accrued
 interest into preferred stock            -               -           -         15,241
Subordinated convertible
 debt inducement                          -               -           -          3,043
Preferred stock issued for cash           -               -           -          5,003
Conversion of preferred stock
 to common stock                          -               -           -              -
Conversion of Class A common
 stock to common stock                    -               -           -              -
Net income                                -               -           -          1,608
Other comprehensive income -
 unrealized Holding gains                 -               -           -              -
Comprehensive income                      -               -           -          1,608
Repayment of loan receivable              -               5           -              5
                                -------------    ------------   --------  --------------
Balance, December 31, 1999                1               -        (202)        (2,808)
Net loss                                  -               -           -         (4,879)
Other comprehensive income -
 unrealized Holding gains                (1)              -           -             (1)
Comprehensive income                      -               -           -              -
Issuance of common stock                  -               -           -            126
                                -------------    ------------   --------  --------------
Balance, December 31, 2000                -               -        (202)        (7,562)
Net loss                                  -               -           -         (1,905)
Issuance of treasury stock                -               -          22             22
                                -------------    ------------   --------  --------------
Balance, December 31, 2001       $        -       $       -     $  (180)   $    (9,445)
                                =============    ============   ========  ==============
</TABLE>
                 See Notes to Consolidated Financial Statements





<PAGE>  32
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                               ($ In Thousands)
<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                       --------------------------------------
                                                          2001          2000          1999
                                                       ----------    ----------    ----------
<S>                                                    <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                                      $  (1,905)    $  (4,879)     $  1,608
Adjustments to reconcile net (loss) income
 to net cash used in operating activities:
  Depreciation and amortization                              391           420         1,147
  Bad debt expense                                             -         1,172         2,090
  Interest expense on inducement                               -             -         3,043
  Gain on sale of assets and other                             -             -          (218)
  Extraordinary gain on claim settlements                      -             -       (18,268)
  Changes in assets and liabilities:
    Decrease (increase) in accounts receivable               125        (4,971)       (3,667)
    (Increase) decrease in advances to
     participating providers                                (963)           31          (531)
    (Increase) decrease in due/from affiliate, net          (282)        1,022          (574)
    Decrease (increase) in other receivables - net          (302)          864        (1,024)
    (Increase) decrease in prepaid expenses and
     other current assets                                   (228)          556           590
    Decrease in restricted cash                              775           421         1,513
    Increase in medical cost payable                       1,333           801         5,776
    Increase (decrease) in accounts payable and
     accrued expenses                                      1,717         1,774        (1,370)
    (Decrease) increase in accrued provider settlement    (1,052)       (2,265)        4,369
    Decrease in unearned revenue                            (512)         (339)       (4,509)
                                                       ----------    ----------    ----------
      Net cash used in operating activities                 (903)       (5,393)      (10,025)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of assets                               -             -         5,015
    Purchase of property and equipment                       (30)         (304)          (56)
    Decrease in notes receivable                               -             -            61
                                                       ----------    ----------    ----------
      Net cash (used in) provided by
       investing activities                                  (30)         (304)        5,020

CASH FLOW FROM FINANCING ACTIVITIES:
    Proceeds from notes payable to affiliate               3,098         4,356           850
    Issuance of common stock                                   -           126             -
    Issuance of series A preferred stock                       -             -         5,002
    Issuance of treasury stock                                22             -             -
                                                       ----------    ----------    ----------
      Net cash provided by financing activities            3,120         4,482         5,852
                                                       ----------    ----------    ----------
      Net increase (decrease) in cash and
       cash equivalents                                    2,187        (1,215)          847
Cash and cash equivalents, beginning of period             6,025         7,240         6,393
                                                       ----------    ----------    ----------
Cash and cash equivalents, end of period               $   8,212     $   6,025     $   7,240
                                                       ==========    ==========    ==========

Supplemental Cash Flow Information:
  Cash paid for interest                               $       -     $       -     $     502
</TABLE>

                 See Notes to Consolidated Financial Statements





<PAGE>  33
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

1.     Organization

     The Wellcare Management Group, Inc. ("WellCare" or the "Company"), a New
York corporation, owns, operates and provides management services to health
maintenance organizations ("HMOs").  An HMO is an organization that accepts
contractual responsibility for the delivery of a stated range of health care
services to its members for a predetermined, prepaid fee.

     Well Care of New York, Inc. ("WCNY"), a wholly owned subsidiary, operates
as an HMO in New York State. WCNY has a certificate of authority under Article
44 of the New York State Public Health Law to operate in 25 counties in the
Greater Hudson River Valley, Capital District, Southern Tier and New
York/Westchester County. WCNY is a mixed IPA/Direct Contract model HMO. Under
this type of arrangement, agreements are entered into with regional health care
delivery networks currently organized as independent practice associations
("IPAs" or "Alliances"), which in turn contract with providers to render health
care services to HMO enrollees.  The HMO also contracts directly with
individual primary care physicians or physician groups for health care services
not contracted through the IPAs.

     FirstChoice HealthPlans of Connecticut, Inc. ("FirstChoice"), a wholly
owned subsidiary of WCNY, operates as an IPA model HMO in the state of
Connecticut.  Under this type of arrangement, agreements are entered into with
IPAs and Physician Hospital Organizations ("PHOs") and individual physicians
for the provision of all medical care to FirstChoice's enrollees for a
specified fee for services rendered.  FirstChoice is approved to operate
statewide in Connecticut.  Effective October 1, 2000, FirstChoice closed on its
transaction with HealthChoice of Connecticut, Inc., ("HealthChoice") to acquire
the assets of HealthChoice's Medicaid line of business, known as PreferredOne,
for a purchase price of $1.00 (one dollar) (See Note 16).  FirstChoice, which
was licensed solely as a commercial health maintenance organization in the
state of Connecticut, covering about 4,200 members, received all necessary
regulatory approval effective October 1, 2000 to assume the responsibility for
approximately 24,000 adult and child members of HealthChoice's Medicaid
business.

     Well Care Administration, Inc. ("WCA") (formerly Agente Benefit
Consultants, Inc. ("ABC")) was a wholly owned subsidiary that administered the
Company's pharmacy, vision care, dental care and other specialty care benefit
programs as stand-alone products to self-insured employer and other groups
until June 1999.  WCA was rendered inactive after June 1999 as the Company's
pharmacy, vision care, dental care and other specialty care benefit programs
were contracted with third party venders and were subsequently dissolved in
October 2000.

     Well Care Development, Inc. ("WCD") was a wholly owned subsidiary formed
to acquire, own and develop real estate.  WCD was rendered inactive as of June
1999 and was subsequently dissolved in October 2000.




<PAGE>  34
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

1.     Organization - Continued

     In June 1999, Kiran C. Patel, M.D. ("Dr. Patel"), the principal owner of
Well Care HMO, Inc., a Florida corporation, an entity previously unrelated to
WellCare, purchased a fifty-five (55%) percent ownership interest in the
Company for $5.0 million (the "Patel Transaction").  As part of the purchase
transaction, Dr. Patel received 100,000 shares (the "Shares") of a newly
authorized series of senior convertible preferred stock ("Series A Convertible
Preferred Stock"), which provided Dr. Patel with 55% of WellCare's voting
power.  The preferred stock was subject to mandatory conversion into common
stock upon the amendment of WellCare's certificate of incorporation to increase
the number of authorized shares of common stock from 20 million shares to 75
million shares.  Due to the excess of the fair value of the underlying common
stock, which totaled approximately $8 million over the purchase price, the
Company recorded a deemed dividend on the preferred stock totaling
approximately $3 million.  For financial statement purposes, the issuance of
the common stock in exchange for the preferred stock has been reflected as of
December 31, 1999; however, the physical transfer took place in April 2000.
The shares are subject to anti-dilution rights, whereby upon conversion Dr.
Patel will generally preserve his 55% interest in WellCare until there are 75
million shares of common stock issued and outstanding.  In order to preserve
his 55% interest, Dr. Patel will be required to pay the par value ($0.01 per
share) for each common share subsequently purchased.

     As a condition to the closing of the Patel Transaction, the holders of
680,747 shares of Class A common stock, which has ten votes per share, agreed
to convert their shares into shares of common stock on a share-for-share basis.
Mr. Robert W. Morey, the holder of 313,555 share of Class A common stock
outstanding, gave a two year proxy in favor of Dr. Patel to vote Mr. Morey's
shares of Class A common stock which expired in June 2001.

     In June 1999, Group Health Incorporated ("GHI") purchased WCNY's
commercial business, consisting mainly of other assets and goodwill associated
with member lives, for approximately $5.0 million (the "GHI Transaction").
During 1999, the Company recorded a gain of $352,000 in connection with the
sale.  As stipulated and agreed upon in the GHI Transaction, WCNY did not
engage in commercial HMO business in New York for a period of one year from the
June 1, 1999 closing date.

     In June 1999, as a condition to the successful closing of the Patel and
the GHI transactions, various hospitals, physicians and other health care
providers entered into settlement agreements to settle claims for services
provided to WCNY HMO members through April 30, 1999.  The various hospitals,
physicians and other health care providers agreed to accept a payment of 30% of
the balance owed by the Company to the provider in the year of settlement, plus
5% of the balance owed by the Company, payable on February 1 of the three years
subsequent to the year of settlement if they continue to be participating WCNY
providers. These claims are settled from a provider pool consisting of all the
proceeds from the Patel and GHI transactions in addition to 80% of WCNY's
premium receivables at April 30, 1999.  For the year ended December 31, 1999,
the Company recognized an extraordinary gain of $18.3 million due to the
results of the completed provider settlements.  At December 31, 2001 and 2000,
the Company maintained accruals of $1.0 million and $2.1 million respectively,
pertaining to this transaction, of which $1.0 million was included in non-
current liabilities in 2000.




<PAGE>  35
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

1.     Organization - Continued

     As a further condition to the successful closing of the Patel Transaction,
in June 1999 The 1818 Fund II, L.P. (the "Fund"), the general partner of which
is Brown Brothers Harriman & Co., converted $15.0 million in subordinated note,
plus accrued interest (8%) of approximately $0.8 million into 100,000 shares of
senior convertible preferred stock ("Series B") of the Company, which was then
converted into 10.0 million shares of common stock.  In connection with the
conversion of the Series B preferred stock, the Company recorded interest
expense of approximately $3.0 million relating to the fair value of the shares
received in excess of the shares issuable at a conversion price of $8.00 per
share.

2.     Going Concern

     The Company's consolidated financials are presented on the going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  The Company has incurred
recurring losses from operations, has a working capital deficit, a
shareholders' deficiency, failed to achieve the minimum statutory equity
requirements of the State of New York Insurance Department and has failed to
maintain the minimum risk based capital requirements of the State of
Connecticut Insurance Department.  These factors raise substantial doubt about
its ability to continue as a going concern.

     Over the next fiscal year, management is focusing on its marketing efforts
to increase membership of its Medicaid and Child Health Plus products.  The
Medicaid and Child Health Plus products have proven to be profitable in past
years.  The Company also received approval to market Family Health Plus, a new
program established by the state of New York in October 2001.  Additionally,
over the next fiscal year, management is focusing on restructuring certain
provider contracts for its Medicaid book of business in Connecticut.  The
Company's contracted rate with Yale PHO and Yale Bridgeport Hospital ("Yale")
were excessive compared to the premiums the Company received from the State of
Connecticut Department of Social Services for its HUSKY products.  As a result
of the Yale contracts, the Company lost an estimated $2.5 million during 2001.
Management has taken steps in correcting this situation and has terminated the
Company's contract with Yale effective March 31, 2002.  The Company currently
is not marketing its Medicare products and does not intend to market these
products in the near future.  The Company also does not have plans to market
its Commercial products. Additionally, the Company believes that it will be
able to capitalize on the efficiencies in claims processing and administrative
services through its management agreement with CHM.  However, there is no
assurance that the Company will be able to achieve its recovery plan.

     In the event of a cash shortage, the Company will have to implement
various cost cutting measures, including but not limited to reducing its work
force and reducing commissions to brokers and agents.  The Company may have to
obtain financing through external sources.  The Company continues to explore
the possibility of raising funds through available sources including but not
limited to the equity and debt markets.  However, resources for raising
external capital are limited due to the Company's past history and the overall
market sensitivity of the HMO business.




<PAGE>  36
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

2.     Going Concern - Continued

     At December 31, 2001, FirstChoice's statutory deficit was approximately
$792,000, which was not in compliance with the net worth requirement.
Approximately $3.3 million in surplus notes was infused on March 8, 2002 to
bring the FirstChoice's net worth just below the Regulatory Action Level of
$2.8 million as required under RBC.  Upon the completion of a review by a third
party consulting actuary engaged by the Department, the Company will have
thirty days to infuse additional funds to bring its net worth up to the Company
Action Level of $3.2 million under RBC.  The Company Action Level is the
minimum amount of surplus required under RBC.  In the event that FirstChoice
fails to comply with the minimum surplus required under RBC, FirstChoice may be
subject to, but not limited to, regulatory control by the Department.

     At December 31, 2001, the Company's statutory net worth was approximately
$742,000, which was not in compliance with the SNYID's adjusted minimum
statutory net worth requirements.  Approximately $3.3 million in surplus notes
were infused into WCNY through its parent company, WCMG, on March 8, 2002.
WCNY in turn infused the $3.3 million into its subsidiary, FirstChoice, to
bring FirstChoice's net worth just below the Regulatory Action Level.  Upon
such infusion, WCNY will be able to admit a value for its investment in
FirstChoice in the amount of up to 50% of its own statutory net worth or
approximately $371,000.  This infusion will bring WCNY's statutory net worth to
approximately $1,113,000, which is in not compliance with the NYSID's adjusted
minimum statutory net worth requirement.  Management will need to arrange to
infuse approximately $285,000 into WCNY by April 30, 2002 to bring WCNY into
compliance with the NYSID's adjusted minimum statutory net worth.  In the event
that that WCNY fails to comply with the adjusted minimum statutory net worth
requirement, WCNY may be subject to, but not limited to, regulatory control by
the SNYID.

     The consolidated financial statements do not include any adjustments to
reflect the possible future effect on the recoverability of assets and
classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

3.     Significant Accounting Policies

     Principles of Consolidation - The accompanying consolidated financial
statements include the Company's wholly owned subsidiaries, WCNY and
FirstChoice (the "WellCare HMOs").  All significant intercompany accounts and
transactions have been eliminated.

     Cash and Cash Equivalents - The Company considers all demand deposits,
overnight investments, and highly liquid investments with an original maturity
of three months or less to be cash equivalents.  The Company includes all cash
overdrafts in accounts payable.  The Company had cash overdrafts of
approximately $1.2 million at December 31, 2000.  There were no overdrafts at
December 31, 2001.

     Restricted Cash - Restricted cash includes amounts in escrow with a
provider and statutory cash reserves required by the State of New York Insurance
Department.




<PAGE>  37
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

3.     Significant Accounting Policies - Continued

     Advances to Participating Providers - Advances to participating providers
consist principally of amounts advanced to hospitals, which are under contract
with the WellCare HMOs to provide medical services to plan members.  Such
advances provide funding to these providers for claims incurred but not yet
reported or claims in the process of adjudication.  The WellCare HMOs have the
right to offset such advances against future claims payments.

     Property and Equipment - Property and equipment is stated at cost net of
accumulated depreciation.  Depreciation is computed by the straight-line method
over the estimated useful lives of the assets, which range from 3 to 10 years.
During 2000, the Company changed the estimated useful life of certain property
and equipment from five years to a range of three to ten years.  The Company
believes that estimated useful lives ranging from three to ten years more
appropriately reflect the timing of the economic benefits to be received from
such assets.  During 2000, the impact to operations due to the change in
estimated useful lives was a decrease in depreciation expense by approximately
$521,000.

     Impairment of Long-Lived Assets - The Company evaluates the recoverability
of the net carrying value of its property and equipment, and other long-lived
assets by comparing the carrying values to the estimated future undiscounted
cash flows.  A deficiency in these cash flows relative to the carrying amounts
is an indication of the need for a write-down due to impairment.  The
impairment write-down would be the difference between the carrying amounts and
the fair value of these assets.  Impairment would be recognized by a charge to
operations.

     Fair Value of Financial Instruments - The estimated fair value of amounts
reported in the consolidated financial statements have been determined by using
available market information and appropriate valuation methodologies.  The
carrying value of all current assets and current liabilities approximate their
fair value because of their short-term nature.

     Concentrations of Credit Risk - Financial instruments, which potentially
subject the Company to concentration of credit risk, consist principally of
cash equivalents and receivables. The Company limits the amount of credit
exposure to each individual financial institution and places its temporary cash
into investments of high credit quality. Concentrations of credit risk with
respect to premium receivables are limited, as the majority of the Company's
business is generated from government-sponsored programs.  As of December 31,
2001 and 2000, management believes that the Company had no significant
concentrations of credit risk.

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

     Revenue Recognition - Premiums from subscribers are recorded as revenue in
the period that subscribers are entitled to service.  Premiums received in
advance are deferred.




<PAGE>  38
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

3.     Significant Accounting Policies - Continued

     Medical Expenses - Medical expenses include estimates for physician
services, hospital services, pharmacy expenses, and other medical expenses
incurred but not yet reported ("IBNR") based on a number of factors, including
hospital admissions data and prior claims experience; adjustments, if
necessary, are made to medical expenses in the period the actual claims costs
are ultimately determined using actuarial techniques.  The Company believes the
IBNR estimates in the consolidated financial statements are adequate; however,
there can be no assurances that actual health care claims will not exceed such
estimates.

     Reinsurance - The WellCare HMOs insure excess loss for health care claims
under policies with a reinsurance company.  Under the excess loss reinsurance
policies, recoveries are made for annual claims of each member in excess of the
deductible established in the policies, subject to certain limitations.  The
Company's deductibles were $85,000 and $125,000 for the FirstChoice commercial
and Medicaid lines of business, respectively, and $115,000 and $100,000 for
WCNY's Medicaid and Medicare lines of business, respectively, during fiscal
year 2001.

     Stock-Based Compensation - As permitted by Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), the Company has elected to recognize stock-based
compensation under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees", and to disclose in the notes to consolidated
financial statements the effects of SFAS No. 123 as if its fair value
recognition provisions were adopted.  See Note 8.

     Advertising Costs - Advertising costs, which include costs for certain
marketing materials and development/implementation of public relations and
marketing campaigns, are expensed as incurred.

     Provision for Loss Contracts - It is the Company's policy to evaluate all
contracts and recognize losses on contracts when estimated future health care
costs and maintenance costs under a group of existing contracts will exceed
anticipated future premiums and stop-loss insurance recoveries.  Unpaid losses
and loss adjustment expenses include an amount determined from individual case
estimates and loss reports and an amount, based on past experience, for losses
incurred but not reported. Such liabilities are necessary based upon
assumptions and estimates and while management believes the amount is adequate,
the ultimate liability may be in excess of or less than the amount provided.
The methods for making such estimates and for establishing the resulting
liability are continually reviewed by management and company actuaries and any
adjustments are reflected in the period determined.  Management has evaluated
the contracts currently in place and has recorded a loss accrual of
approximately $300,000 at December 31, 2001 relating to FirstChoice's Medicaid
line of business.  No loss accruals were considered necessary at December 31,
2000.

     Income Taxes - The Company accounts for income taxes under the asset and
liability method as required by SFAS No. 109, "Accounting for Income Taxes".
Under this method, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities.  The
effect of a tax rate change on deferred taxes is recognized in operations in
the period that the change in the rate is enacted.




<PAGE>  39
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

3.     Significant Accounting Policies - Continued

     Earnings Per Share - Basic net income (loss) per share is computed using
the weighted average number of common shares outstanding for the applicable
period.  Diluted net income (loss) per share reflects the potential dilutive
effect of securities (which consist of stock options) that could share in
earnings of the Company, unless the inclusion of these potential dilutive
effects results in antidilution.

     New Accounting Pronouncements - In July 2001, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 141, "Business Combinations" ("SFAS
141"). SFAS 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the pooling-of-
interests method.  Goodwill and certain intangible assets with indefinite
useful lives will remain on the balance sheet and not be amortized.  The
Company implemented SFAS 141 on July 1, 2001 and has determined that there is
no impact on its consolidated financial position or results of operations.

     In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), which is effective January 1, 2002. SFAS 142 requires,
among other things, the discontinuance of goodwill amortization. In addition,
the standard includes provisions for the reclassification of certain existing
recognized intangibles as goodwill, reassessment of the useful lives of
existing recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting units for
purposes of assessing potential future impairments of goodwill. SFAS 142 also
requires the Company to complete a transitional goodwill impairment test six
months from the date of adoption. The Company does not believe that the
adoption of SFAS 142 will have an impact on its financial position and results
of operations.

     On October 3, 2001 SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-lived Assets" ("SFAS 144") was approved by the FASB.  SFAS 144
addresses the financial accounting and reporting of the impairment or disposal
of long-lived assets.  This statement supercedes SFAS No. 121, "Accounting for
the Impairment of Long-lived Assets and for Long-Lived Assets to be Disposed
of," will be effective January 1, 2002.  The Company is assessing the impact,
if any, that SFAS 144 will have on its consolidated financial statements.

     Reclassifications - Certain amounts in the 2000 and 1999 consolidated
financial statements have been reclassified to conform to the 2001 presentation.




<PAGE>  40
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

4.     Other Receivables

Other receivables consists of the following (in thousands):

                                             December 31,
                                      ---------------------------
                                          2001           2000
                                      -----------    ------------
Reinsurance receivables               $      233     $       102
Pharmacy rebate receivables                   53             125
Claims refund receivables                    227               -
Vendor receivables                           327             265
Other                                        252             299
                                      -----------    ------------
Total other receivables               $    1,092     $       791
                                      ===========    ============

5.     Property and Equipment

     Property and equipment consists of the following (in thousands):

                                               December 31,
                                        ---------------------------
                                            2001           2000
                                        -----------    ------------
Computer hardware and software          $    1,061     $     3,421
Furniture, fixtures, and equipment             593           1,385
Vehicles                                         9               -
                                        -----------    ------------
Total                                        1,663           4,806
Less accumulated depreciation                1,384           4,166
                                        -----------    ------------
Property and equipment, net             $      279     $       640
                                        ===========    ============

     Depreciation expense for the years ended December 31, 2001, 2000, and 1999
was approximately $391,000, $420,000, and $1,147,000, respectively.

     The cost and accumulated depreciation for property and equipment sold,
retired, or otherwise disposed of are relieved from the accounts and the
resulting gains or losses are reflected in income.  During 2001, the Company
retired approximately $3.2 million of fully depreciated equipment from its
operations.




<PAGE>  41
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

6.     Medical Costs Payable

     The following table summarizes the activities of medical costs payable (in
thousands):

                                            Years ended December 31,
                                         ----------------------------
                                             2001            2000
                                         ------------    ------------
Balance, beginning of year               $    16,187     $    14,386
Claims incurred:
  Current year                                81,170          69,840
  Prior year                                     276            (286)
Reinsurance pool assessment                      141             501
                                         ------------    ------------
Total incurred                                81,587          70,055
Claims paid and settled related to:
  Current year                               (64,502)        (55,472)
  Prior year                                 (15,624)        (12,782)
Reinsurance pool payment                        (111)              -
                                         ------------    ------------
Total paid                                   (80,237)        (68,254)
                                         ------------    ------------
Balance, end of year                     $    17,537     $    16,187
                                         ============    ============

     The liability for accrued medical costs payable includes management's
estimate of amounts required to settle known claims, claims in the process of
adjudication, and estimated claims incurred but not reported.  Costs in excess
of those anticipated could have a material adverse effect on the Company's
results of operations.

     During 2001 and 2000, the Company experienced unfavorable and favorable
claims expense related to its estimated reserves for claims payable at December
31, 2000 and 1999, respectively.  The accompanying financial statements reflect
a $276,000 increase and $286,000 decrease in medical expenses for 2001 and
2000, respectively, relating to a change in estimate on the prior years' claims
liabilities.





<PAGE>  42
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

7.     Notes Payable to Affiliate

     Notes payable to affiliate consists of the following (in thousands):
<TABLE>
<CAPTION>
                                                                        December 31,
                                                                  ------------------------
                                                                     2001          2000
                                                                  ----------    ----------
<S>                                                               <C>           <C>
Subordinated note payable to a related party; principle due
 on demand; interest at 8 1/2 percent per annum;
 issued September 1999                                            $     850     $     850

Subordinated note payable to a related party; principle due
 on demand; interest at 8 1/2 percent per annum;
 issued September 2000                                                2,200         2,200

Subordinated note payable to a related party; principle due
 on demand; interest at 8 1/2 percent per annum;
 issued November 2000                                                 1,356         1,356

Subordinated note payable to a related party; principle due
 on demand; interest at 8 1/2 percent per annum;
 issued September 2000                                                  800           800

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued March 2001                                                      500             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued March 2001                                                      250             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued May 2001                                                        591             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued August 2001                                                     674             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 1/2 percent per annum;
 issued June 2001                                                       163             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued May 2001                                                        270             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued July 2001                                                       150             -

Subordinated note payable to a related party; principle due
 on demand; interest at 8 percent per annum;
 issued March 2001                                                      500             -
                                                                  ----------    ----------
Notes payable to affiliate                                        $   8,304     $   5,206
                                                                  ==========    ==========
</TABLE>





<PAGE>  43
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

8.    Income Taxes

     A reconciliation of the federal statutory rate to the Company's effective
income tax rate is as follows:

<TABLE>
<CAPTION>
                                                                       December 31,
                                                              ----------------------------
                                                                2001      2000      1999
                                                              --------  --------  --------
<S>                                                           <C>       <C>       <C>
Federal statutory rate                                           34.0%     34.0%     34.0%
State income taxes - net of federal benefit                       6.4       6.4       6.4
Expense on debt inducement                                          -         -      64.5
Income on claims settlement                                         -         -    (105.2)
Limitation of NOL carryforward due to change in ownership           -         -      69.0
Other                                                            (0.5)        -     113.3
Valuation allowance                                   (39.9)    (40.4)   (182.0)
                                                              --------  --------  --------
Effective rate                                                      -%        -%        -%
                                                              ========  ========  ========
</TABLE>

The significant components of deferred taxes were as follows (in $ thousands):

                                                            December 31,
                                                     --------------------------
                                                         2001          2000
                                                     ------------  ------------
Deferred tax assets:
  Accounts receivable and other receivables -

    allowance for bad debt                           $        -    $       81
  Other                                                     717         6,546
  Net operating loss carry forward                       13,927        13,013
                                                    ------------  ------------
Total deferred tax asset before valuation allowance      14,644        19,640
Less valuation allowance                                 14,644        19,640
                                                    ------------  ------------
Net deferred tax asset                               $        -    $        -
                                                    ============  ============

     The Company has net operating loss ("NOL") carry-forwards in the amount of
approximately $72,280,000 expiring through 2021.  Of this amount, approximately
$37,800,000 of NOL carryforward has been limited by imposition of Section 382
of the Internal Revenue Code due to a change in the Company's ownership in
1999. The ability to realize the tax benefits associated with deferred tax
assets and NOLs is reliant upon the Company's ability to generate future
taxable income from operations and/or to effectuate successful tax planning
strategies.  Although management believes that profitable operations may be
achieved in the future, in view of their size and length of the expected recoup
period, the Company provided a 100% valuation allowance in both 2001 and 2000
with respect to the deferred tax assets for 2001 and 2000 respectively.






<PAGE>  44
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

9.     Stock Options

     In March 1993, the Company created the 1993 Incentive and Non-Incentive
Stock Option Plan (the "1993 Stock Option Plan") to encourage selected
employees, directors, and other persons who contribute materially to the
Company's success.  The 1993 Stock Option Plan was amended in October 1999,
which allowed for an aggregate of 5,000,000 shares of the Company's common
stock, par value $0.01 per share, to be reserved for issuance upon the exercise
of options which may be granted from time to time in accordance with the 1993
Stock Option Plan.  The options shall have a term of no more than ten years
from the date of grant but shall terminate, lapse and expire at such earlier
time or times as provided in the Option Agreement governing such option.
Options granted are not subject to review and are conclusive, although in no
event shall such purchase price be less than (i) 100% of the fair market value
of the Company's common stock on the date of grant for Incentive Options (110%
of the fair market value of the Company's common stock on the date of grant if
made to a 10% owner) and (ii) 75% of the fair market value of the Company's
common stock on the date of grant for Non-Incentive Options.  The following is
a summary of the transactions under the 1993 Stock Option Plan:

     The following table summarizes the activities related to options during
2001, 2000, and 1999:

                                         2001          2000          1999
                                     ------------  ------------  ------------
Outstanding, beginning of year         4,002,000     4,009,535       598,741
Exercised during the year                      -             -             -
Terminated during the year                     -        (7,535)     (589,206)
Granted during the year                        -             -     4,000,000
                                     ------------  ------------  ------------
Outstanding, end of year               4,002,000     4,002,000     4,009,535
                                     ============  ============  ============

Options exercisable at year end        1,144,857       573,429       580,964
Weighted average fair value of
 Options granted during the year      $        -    $        -    $     0.25

     At December 31, 2001, there were 4,002,000 options outstanding, of which
1,144,857 options were exercisable, with a weighted average exercise price of
$0.375 per share and a weighted average remaining contractual life of eight
years.

     During 1999 the Company granted 4,000,000 options to purchase common stock
at an exercise price of $0.375 per share.  The options expire in ten years and
vest over a period of seven years.

     In December 1997, the Company amended the exercise price on the 200,000
options previously granted to the President in 1996, from $10.125 to $3.01 per
share.  In September 1997, the Company granted the President options for 30,000
shares, at an exercise price of $15.00 per share.  In February 1998, the
Company amended the exercise price for the 30,000 options to $4.51 per share,
and granted additional options for 100,000 shares, at an exercise price of
$5.02 per share.  The President resigned, effective January 15, 1999, and his
qualified options terminated April 15, 1999.





<PAGE>  45
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

9.     Stock Options - Continued

     The Company has adopted the disclosure only provisions of SFAS 123.
Accordingly, no compensation cost has been recognized for the options in the
accompanying consolidated statements of operations.  Had compensation cost for
grants made under the Company's 1993 Stock Option Plan been determined based on
the fair value at the grant date in a manner consistent with SFAS 123, the
Company's pro forma net loss and pro forma net loss per share would be as
follows ($ in thousands, except per share amounts):

                                                        December 31,
                                                ----------------------------
                                                  2001      2000      1999
                                                --------  --------  --------
Net loss available to common shareholders:
  As reported                                   $ (1,905) $ (4,879) $ (1,435)
  Pro forma                                       (2,066)   (5,032)   (1,695)

Net loss available to common shareholders
 per share - basic and diluted:
  As reported                                   $  (0.05) $  (0.13) $  (0.09)
  Pro forma                                        (0.05)    (0.13)    (0.11)

     The fair value of each option granted is estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted-
average assumptions used for grants in 2001, 2000, 1999, respectively: expected
volatility of 143.0%, 131.0%, and 45.8%; expected lives of 8.0, 9.0, and 3.0
years; and risk-free interest rate of 1.98%, 4.0%, and 6.0%.  Additionally, in
each year, the dividend yield was 0%.

10.     Earnings Per Share

     Options to purchase 4,002,000, 4,002,000, and 4,009,535 shares of common
stock were outstanding, but were not included in the computation of diluted
earnings per share ("EPS") at December 31, 2001, 2000, and 1999, respectively,
due to their anti-dilutive effect.

     The 8% subordinated convertible note amounting to $15,000,000 is not
included in the computation of 1999 diluted EPS prior to its conversion due to
its anti-dilutive effect.  The note was converted during 1999.

     The Company's common stock shares are subject to anti-dilution rights
whereby upon conversion the majority shareholder will generally preserve his
55% interest in WellCare until there are 75 million shares of common stock
issued and outstanding. Accordingly, during a year when the Company is in a net
income position, earnings per share could potentially be diluted by common
stock shares totaling as much as 55% of 75 million shares less the number of
shares outstanding at any given point in time.





<PAGE>  46
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

11.     Retirement Savings Plan

     The Company sponsored a retirement plan (the "Plan") designed to qualify
under Section 401(k) of the Internal Revenue Code of 1986, as amended.  All
employees over age twenty-one (21) who have been employed by the Company for at
least one year with one thousand  (1,000) hours of service are eligible to
participate in the plan.  Employees may contribute to the plan on a tax
deferred basis generally up to 18% of their total annual salary. Under the
plan, the Company makes matching contributions at the rate of 50% of the amount
contributed by the employees up to a maximum of 2% of the employee's total
annual compensation. The employer contributions are vested after five (5) years
of service.  The Company has not made any contributions since 1999 and has no
obligations to make any future contributions under the Plan.  The Plan was
merged into the Comprehensive Health Management of Florida, LLC 401(k) and
Profit Sharing Plan, an affiliate of the majority shareholder, in May 2000.

12.     Related Party Transactions

MANAGEMENT AGREEMENT

     WCNY and FirstChoice have entered into management agreements with
Comprehensive Health Management, Inc. ("CHM"), a company that was established
by the majority shareholder to provide management, administrative services, and
claims processing services to health maintenance organizations.  During
September 1999, WCNY and FirstChoice each executed a five-year management
agreement with CHM to perform claims processing services, utilization review,
payroll services, and most of the administrative functions of the Company,
excluding certain marketing functions.  CHM is responsible for all the
administrative employees' payroll and business expenses.  Additionally, CHM is
responsible for maintaining the claims related data processing equipment and
software.

     The management fee for each Company ranged from 9.5% of premium revenue
earned when there are less than 40,000 members to 7.5% of premium revenue
earned when there are more than 80,000 members.  In June 2000, the agreements
were amended to better reflect the actual cost of administrative services
related to the provision of management services to the Company and other
affiliated HMOs.  As a result of the amended agreements, the management fee was
revised to reflect ranges of 11.5% of premium revenue earned when there are
less than 40,000 members and 9.5% of premium revenue earned when there are more
than 80,000 members.






<PAGE>  47
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

12.     Related Party Transactions - Continued

     Management fees for the years ended December 31, 2001, 2000 and 1999 were
approximately $11,186,000, $7,799,000 and $3,046,000, respectively, which were
included in general and administrative expenses.  At December 31, 2001, CHM
owed the Company approximately $59,000.  At December 31, 2000, the Company owed
CHM approximately $223,000.  As a result of the efficiencies gained through the
CHM management agreement, the Company's general and administrative expenses as
a percentage of total revenue decreased from 21.1% in 1999 to 17.0% in 2000 and
17.5% in 2001.

OTHER

     The Company has entered into various lease agreements for office space.
As part of the management agreement, CHM makes payments to the lessors on
behalf of the Company.  The payments for leased space are an integral part of
the management fee, and lease payments made by CHM to lessors amounted to
approximately $368,000, $619,000 and $332,000 during 2001, 2000 and 1999,
respectively.

     Under the management services agreement, the Company is responsible for
the direct salary cost of their marketing personnel.  However, actual payroll
processing is administered by CHM.  The Company reimbursed CHM approximately
$2,609,000, $1,620,000 and $660,000 related to these direct salary costs
administered and paid by CHM during 2001, 2000 and 1999, respectively.

     Well Care HMO, Inc., an affiliate of the majority shareholder, paid for
director and officers and errors and omissions insurance policies and allocated
the expense proportionately to various related entities.  At December 31, 2000,
WCNY owed Well Care HMO, Inc. approximately $123,000 for its proportionate
share of the policy premiums.  There were no such transactions during 2001.

NOTES PAYABLE

     The Company's majority shareholder has provided financing to the Company
through various cash infusions from related enterprises.  During 2001 and 2000,
approximately $3.1 million and $4.4 million, respectively, in surplus notes
were provided to the Company from enterprises controlled by the majority
shareholder.  The notes are due upon demand with interest accruing between 8.0%
and 8.5% per annum.  The cash infusions were primarily used by the Company to
increase the statutory net equity of WCNY and FirstChoice during the respective
years.  See Note 6 for details.





<PAGE>  48
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

13.     Commitments and Contingencies

CONTRACTUAL OBLIGATION WITH IPAS

     WCNY has entered into various contractual arrangements with a majority of
its primary care physicians and specialists through contracts with regional
health care delivery networks.  These agreements call for capitated IPAs
comprised of specialists and primary care physicians.  Under the agreements,
the Company pays the IPAs for medical services provided by primary care
physicians and specialists.  The IPAs in turn reimburse those providers for the
services that are provided by each physician.  ProMedco Hudson Valley
("ProMedco"), an IPA group that WCNY had contracted with, filed bankruptcy in
April 2001.  Based on the executed contracts with the IPAs, WCNY is not liable
for the IPAs' liabilities; however, in the event the IPAs default on their
financial obligations, the provider network could be materially affected.  This
matter did not have a material effect on the Company's provider network.

OPERATING LEASES

     Pursuant to management agreements with CHM, rental expenses are the
responsibility of CHM.  At December 31, 2001, the Company is the named lessee
on certain non-cancelable operating lease obligations.  Accordingly, future
minimum lease payments under such non-cancelable operating leases are as
follows:

           2002          $  327,020
           2003             206,252
           2004             142,483
           2005              97,488
           2006                   -
     Thereafter                   -
                         ----------
                         $  773,243
                         ==========

     The Company is not a party to any material pending legal proceedings.  The
Company at times does have routine litigation incidental to its business.  In
the opinion of the Company's management, such proceedings should not,
individually or in the aggregate, have a material adverse effect on the
Company's consolidated results of operations or consolidated financial
condition.

     The Company is currently in negotiations with a former provider group
regarding a number of outstanding and disputed claims. During 2000, the Company
established an escrow account of $450,000 relating to this matter, which is
included in restricted cash in the financial statements. The total amount in
dispute, which is under discussion for settlement but has not been settled as
of December 31, 2001, is approximately $104,000.  A formal offer of settlement
has been received from the attorney for the provider group for the amount in
question and the Company has since agreed to accept the proposed terms. A loss
provision of $104,000 has been accrued in the financial statements as of
December 31, 2001.

     In December 2001, the State of New York Department of Health ("DOH")
issued its report on the second stage review of WCNY's Child Health Plus
Program.  Based on the review findings, the DOH projected that the Company owed
approximately $1.1 million due to billing and processing errors.  The Company
disputed some of the findings and worked with the DOH to resolve the billing
and processing errors.  The DOH reviewed the disputed findings and revised its
projection to $617,000.  The Company has recorded the $617,000 in its 2001
financial statements.




<PAGE>  49
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

13.     Commitments and Contingencies - Continued

     The Company and certain of its subsidiaries, including WCNY have responded
to subpoenas issued in April and August 1997 from the United States District
Court for the Northern District of New York through the office of the United
States Attorney for that District.  These subpoenas sought the production of
various documents concerning financial and accounting systems, corporate
records, press releases and other external communications.  While the United
States Attorney has not disclosed the purposes of its inquiry, the Company has
reason to believe that neither its current management nor its current directors
are subjects or targets of the investigation.  The Company has, however,
informed the government that it will continue to cooperate fully in any way
that it can in connection with the ongoing investigation.  As of December 31,
2001 and 2000, no amounts have been accrued to the consolidated financial
statements regarding the resolution of this investigation.

     On July 31, 1996 and October 3, 1996 the Securities and Exchange
Commission ("SEC") issued subpoenas to the Company for the production of
various financial and medical claims information.  The Company fully complied
with both of these subpoenas on August 21, 1996 and October 31, 1996, and with
subsequent requests for supplementation.  The current management is unaware of
any ongoing investigation by the SEC.  As of December 31, 2001 and 2000, no
amounts have been accrued to the consolidated financial statements regarding
the resolution of this investigation.

     Between April and June 1996, the Company, its former President and Chief
Executive Officer (Edward A. Ullmann), and its former Vice President of Finance
and Chief Financial Officer (Marystephanie Corsones) were named as defendants
in twelve separate actions filed in Federal Court (the "Securities
Litigations").  Additionally, three directors were also named in one of these
actions.  Plaintiffs sought to recover damages allegedly caused by the
Company's defendants' violations of federal securities laws with regard to the
preparation and dissemination to the investing public of false and misleading
information concerning the Company's financial condition.

     In July 1996, the Securities Litigations were consolidated in the United
States District Court for the Northern District of New York, and an amended
consolidating complaint (the "Complaint") was served in August 1996.  The
Complaint did not name the three additional directors.  Deloitte & Touche LLP,
the Company's independent auditors during that period, however, was named as an
additional defendant.  In October 1996, the Company filed a motion to dismiss
the consolidated amended complaint against the Company as well as the
individual defendants.  The Company's auditor likewise filed its own motion to
dismiss.  By Memorandum Decision and Order (the "Order"), entered in April
1997, the Court (i) granted the auditor's motion to dismiss and ordered that
the claims against the auditors be dismissed with prejudice; and (ii) denied
the motion to dismiss brought by the individual defendants.  Because the Order
did not specifically address the Company's motion to dismiss, in May 1997, the
Company moved for reconsideration of its motion to dismiss and dismissal of all
claims asserted against it.  On reconsideration, the judge clarified his
previous ruling expanding it to include a denial of the Company's motion as
well.  Following the Court's decision, the Company filed its answer and defense
to the Complaint.  In September 1997, the plaintiffs' class was certified and
the parties thereafter commenced the discovery process of the litigation.  The
actions were dismissed pursuant to a court-approved settlement agreement.  The
time for appealing the approval order has not elapsed as of the date of this
report.




<PAGE>  50
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

13.     Commitments and Contingencies - Continued

     In May 1999, the Company entered into a settlement agreement for $2.5
million, all of which is being funded by the insurance carrier, which provided
coverage to the individual defendants.  The settlement agreement received
Federal Court approval in January 2000.  The Company was reimbursed by the
insurance carrier of approximately $776,000 for expenses related to fees paid
to the attorneys representing the individual defendants, less the Company's
insurance deductible.  The reimbursement was included in other revenue in
fiscal year 2000.

     The WellCare HMOs are subject to assessments from various high-risk
insurance pools administered by the states of New York and Connecticut.  The
liabilities related to these pools are not estimable at December 31, 2001.
During 2000, the Connecticut Small Employer Health Reinsurance Pool (the "Small
Employer Pool") assessed the Company approximately $501,000 relating to 1999
and 1998. This change in estimate was recorded in the Company's 2000 financial
statements.  During 2001, the Small Employer Pool assessed the Company $141,000
pertaining to 2000.  This change in estimate was recorded in the Company's 2001
financial statements.

     The Company conducts a significant portion of its HMO business with
federal and state sponsored programs.  As part of their participation, the
Company is subject to legislative and regulatory change, which is beyond
management's control.  Management continues to monitor these changes in
reimbursement levels and has made no provisions to the financial statements for
these contingencies.

14.     Primergy Settlement

     In July 1999, the Company entered into an agreement (the "Settlement
Agreement") with Primergy, Promedco of the Hudson Valley, Inc., and Promedco
Management Company to settle outstanding indebtedness to the Company from
Primergy.  Primergy's indebtedness to the Company pertains to an acquisition by
Primergy of a former subsidiary of the Company's during 1995.  Promedco of the
Hudson Valley, Inc., and Promedco Management Company are affiliates of
Primergy.  Due to uncertainty surrounding the financial condition of Primergy,
the indebtedness from Primergy was fully reserved for during the years 1995
through 1998, and was written off completely in 1999.   The Settlement
Agreement stipulated a $425,000 cash payment to the Company at closing, and
required a release to the Company from Primergy for approximately $325,000 in
past payments due to Primergy.

     The Company is a party to service agreements with five IPAs owned by
Primergy (the "Primergy IPAs").  Accordingly, the Settlement Agreement further
required Primergy to pay $2 per member per month for the period commencing from
August 31, 2000 to July 31, 2002 for members assigned to the Primergy IPAs.
Such payment is guaranteed by Promedco's Management Company.  The Primergy
IPAs' contract period was reduced and currently will terminate on July 31,
2002.  In 2000, the Company recognized approximately $118,000 in income
pertaining to this settlement.  Such amount is included in "Other income - net"
in the 2000 financial statements.  Primergy filed for bankruptcy in April 2001.
Based on the executed contracts with the IPAs, WCNY is not liable for the IPAs'
liabilities; however, in the event the IPAs default on their financial
obligations, the provider network could be materially affected.  This matter
did not have a material effect on the Company's provider network.




<PAGE>  51
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

15.     Statutory Surplus Requirements

     The State of Connecticut Insurance Department (the "Department") requires
that stipulated amounts of surplus be maintained at all times.  The Company
must maintain a minimum net worth equal to the greater of:  (A) $1,000,000; or
(B) 2% of its annual premium revenues as reported on the most recent annual
financial statement filed with the Department on the first $150,000,000 of
premium revenues plus 1% of annual premium revenues in excess of $150,000,000.
The Risk-Based Capital ("RBC") requirements for health care centers were
adopted through a regulation promulgated by the Department effective January
31, 2000.  The main purpose of the regulation is to provide a tool for
insurance regulators to evaluate the capital of insurers.  FirstChoice filed an
RBC report as of December 31, 2001 on March 1, 2002.  At December 31, 2001,
FirstChoice's statutory deficit was approximately $792,000, which was not in
compliance with the net worth requirement.  Approximately $3.3 million in
surplus notes was infused on March 8, 2002 to bring the FirstChoice's net worth
just below the Regulatory Action Level of $2.8 million as required under RBC.
Upon the completion of a review by a third party consulting actuary engaged by
the Department, the Company will have thirty days to infuse additional funds to
bring its net worth up to the Company Action Level of $3.2 million under RBC.
The Company Action Level is the minimum amount of surplus required under RBC.

     WCNY is required to accumulate and maintain a contingent reserve fund,
which shall be increased in an amount equal to at least 5% of the net premium
income of the Company during the calendar year, until such reserve fund is at
least equal to $50,000. The contingent fund at the end of any calendar year
shall not exceed 5% of the net premium income of such calendar year.  WCNY is
also required to establish a deposit in the form of an escrow account for the
protection of enrollees that may consist of cash or be otherwise financed
through bond or other means acceptable to the State of New York Insurance
Department ("SNYID"). This deposit shall be equal to the greater of (1) 5% of
the estimated expenditures for health care services for the year, or (2)
$100,000. At December 31, 2001 and 2000, WCNY had a required cash reserve of
approximately $2.2 million and $2.5 million, respectively, and a required
contingent equity reserve of approximately $2.8 million for both years.

     Notwithstanding the above, the SNYID has the authority to allow an HMO to
maintain a net worth of 50% to 100% of the contingent reserve.  On June 1,
1999, the majority shareholder submitted a program to the SNYID to restore the
WCNY's contingency reserve to 100% of its required level over a three-year
period ending June 1, 2002.  In the interim, the SNYID has allowed WCNY to
maintain a contingency reserve of no less than 50% of its required level.  At
December 31, 2001, the Company's statutory net worth was approximately
$742,000, which was not in compliance with the SNYID's adjusted minimum
statutory net worth requirements.  Approximately $3.3 million in surplus notes
were infused into WCNY through its parent company, WCMG, on March 8, 2002.
WCNY in turn infused the $3.3 million into its subsidiary, FirstChoice, to
bring FirstChoice's net worth just below the Regulatory Action Level.  Upon
such infusion, WCNY will be able to admit a value for its investment in
FirstChoice in the amount of up to 50% of its own statutory net worth or
approximately $371,000.  This infusion will bring WCNY's statutory net worth to
approximately $1,113,000, which is in not compliance with the NYSID's adjusted
minimum statutory net worth requirement.  Management will need to arrange to
infuse approximately $285,000 into WCNY by April 30, 2002 to bring WCNY into
compliance with the NYSID's adjusted minimum statutory net worth.





<PAGE>  52
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

15.     Statutory Surplus Requirements - Continued

     The Risk-Based Capital ("RBC") requirements for health maintenance
organizations have not been adopted by the New York legislature. However, the
SNYID does require that a RBC report be filed with the SNYID for informational
purposes by April 1 of each year.  WCNY filed a RBC report as of December 31,
2000 on March 31, 2001. This report disclosed that WCNY did not meet the
minimum RBC requirements and triggered a mandatory control level ("MCL") event,
as defined in the National Association of Insurance Commissioners ("NAIC")
model law for RBC. An MCL event occurred since the WCNY's total adjusted
capital was below the mandatory control level. The SNYID may take regulatory
action against WCNY as a result of filing this RBC report, including but not
limited to placing the Company under regulatory control. As of March 15, 2001,
the SNYID has not taken any action.

     WCNY underwent an examination for the period from June 1, 1999 through
September 30, 2000 conducted by the SNYID. The SNYID issued its report of
examination findings on April 13, 2001, which stated that WCNY was insolvent in
the amount of $1,465,680 its statutory minimum net worth requirement was
impaired in the amount of $5,577,278 as of September 30, 2000. The Subsequent
Events section of the report disclosed that $4,897,124 in cash was infused into
the WCNY from October 1, 2000 through May 2, 2001 in the form of Section 1307
loans from Comprehensive Health Management, Inc. and Comprehensive Health
Management of Florida, LLC, affiliated companies of the majority shareholder of
WCMG.  Management believes the cash infusion remedied the insolvency and
capital impairment determined by the examination and reduced that statutory net
worth impairment to $680,154 as of September 30, 2000.  Additionally, during
the exam certain recommendations were made by the SNYID to improve the
Company's business processes.  Management has reviewed and implemented the
applicable recommendations.

     In March 1998, the National Association of Insurance Commissioners adopted
the Codification of Statutory Accounting Principles (the Codification).  The
SNYID has adopted the Codification, with some modifications, through the
adoption of Regulation 172.  The purpose of the Codification is to enhance the
consistency of the accounting treatment of assets, liabilities, reserves,
income, and expenses of insurers, by setting forth the accounting practices and
procedures to be followed in completing annual and quarterly financial
statements required by law.  The applicable modifications that will effect the
preparation of the statutory financial statements for WCNY are as follows: 1)
no limitation with respect to the amount of EDP Equipment to be admitted, with
useful lives being recorded up to 10 years, 2) estimated Pharmaceutical Rebates
may be included as admitted assets, 3) unsecured Receivables from Health Care
Providers are non-admitted, 4) deferred income taxes are non-admitted, and 5)
WCNY's value for its investment in FirstChoice is limited to an amount up to
50% of its own statutory net worth.  The state of New York required adoption of
the Codification for the preparation of statutory financial statements
effective January 1, 2001.  The adoption of Codification has the effect of
decreasing WCNY's statutory surplus at January 1, 2001 by approximately
$1,501,000, which relates to accounting principles regarding prepaid expenses,
furniture and equipment, surplus note interest, and the cumulative effect of
Codification on its investment in FirstChoice.

     Furthermore, SB443, entitled, "An Act Concerning Statutory Accounting
Procedures", was signed by the Governor of Connecticut on May 1, 2000, which
required adoption of the Codification by the State of Connecticut for the
preparation of statutory financial statements, effective January 1, 2001.  The
adoption of Codification has the effect of decreasing FirstChoice's statutory
surplus at January 1, 2001 by approximately $689,000, which relates to
accounting principles regarding affiliate receivables and provider
overpayments.





<PAGE>  53
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

16.     Acquisition

     Effective October 1, 2000, FirstChoice closed on its transaction with
HealthChoice of Connecticut, Inc., ("HealthChoice") to acquire the assets of
HealthChoice's Medicaid line of business, known as PreferredOne for a purchase
price of $1.00 (one dollar).  With this acquisition, the Company increased its
membership by approximately 24,000 members.  The following table illustrates
the proforma result if the Company had acquired this line of business as of
January 1, 2000 (in thousands, except per share data):


                                                           Unaudited
                                                           Pro Forma
                                                            2000 (1)
                                                           ---------
Total revenue                                              $ 113,842
Net loss available to common shareholders                     (4,886)
Net loss available to common shareholders per share            (0.13)

(1) The acquired line of business' general and administrative expenses was
    adjusted using 11.5% of revenue under the management agreement with CHM,
    which resulted in savings of approximately $40.

17.     Segment Reporting

     The Company is engaged principally in one line of business, the provision
of health care coverage for enrolled members, which represents more than 97% of
the consolidated revenues for the years ended December 30, 2001, 2000 and 1999.
The Company operates in two geographic areas, the states of New York and
Connecticut.  The Company manages its business geographically, as the laws
governing the HMO industry, which affect its strategy, are state specific.
Included in the other segment in 1999 were results of WellCare Administration,
Inc. and WellCare Development, Inc. (see Note 1).  These two entities were
rendered inactive as of June 1999 and were dissolved in October 2000.
Significant transactions occurred in 1999, which materially changed the
Company's structure and operations (see discussion in Note 1).

     The following schedule presents information about the Company's segments
as of and for the years ended December 31 (in thousands):

                                          2001         2000         1999
                                       ----------   ----------   ----------
Total Revenues:
  New York                             $  55,664    $  57,415    $  80,377
  Connecticut                             41,549       20,304       29,003
  Other                                      115          885        3,129
                                       ----------   ----------   ----------
Total                                  $  97,328    $  78,604    $ 112,509
                                       ==========   ==========   ==========




<PAGE>  54
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

17.     Segment Reporting - Continued

                                          2001         2000         1999
                                       ----------   ----------   ----------
Total Expenses:
  New York                             $  54,399    $  59,567    $  91,932
  Connecticut                             44,608       23,622       30,579
  Other                                      226          294        6,658
                                       ----------   ----------   ----------
Total                                  $  99,233    $  83,483    $ 129,169
                                       ==========   ==========   ==========

Depreciation and Amortization:
  New York                             $     373    $     398    $     968
  Connecticut                                 18           17           27
  Other                                        -            5          152
                                       ----------   ----------   ----------
Total                                  $     391    $     420    $   1,147
                                       ==========   ==========   ==========

Interest Expense:
  New York                             $     582    $     174    $       -
  Connecticut                                  -            -            -
  Other                                       50            -        3,565
                                       ----------   ----------   ----------
Total                                  $     632    $     174    $   3,565
                                       ==========   ==========   ==========

Net (Loss) Income:
  New York                             $   1,265    $  (2,152)   $   7,041
  Connecticut                             (3,059)      (3,319)      (1,576)
  Other                                     (111)         592       (3,857)
                                       ----------   ----------   ----------
Total                                  $  (1,905)   $  (4,879)   $   1,608
                                       ==========   ==========   ==========

Capital Expenditures:
  New York                             $       4    $     264    $      56
  Connecticut                                 26           40            -
  Other                                        -            -            -
                                       ----------   ----------   ----------
Total                                  $      30    $     304    $      56
                                       ==========   ==========   ==========

Total Assets:
  New York                             $  14,168    $  10,045
  Connecticut                              8,238        9,705
  Other                                      191          370
                                       ----------   ----------
Total                                  $  22,597    $  20,120
                                       ==========   ==========




<PAGE>  55
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements - Continued

18.     Quarterly Results of Operations (Unaudited)

     Selected unaudited data reflecting the Company's consolidated results of
operations for each of the last eight quarters are shown in the following table
(in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                      Year Ended December 31, 2001
                                           --------------------------------------------------
                                               1st          2nd          3rd          4th
                                           -----------  -----------  -----------  -----------
<S>                                        <C>          <C>          <C>          <C>
Total revenue                              $   24,047   $   24,176   $   24,037   $   25,067
Total expenses                                 23,746       23,371       24,002       28,113
Net income (loss)                                 301          805           35       (3,046)

Net income (loss) per share:
  basic and diluted                        $     0.01   $     0.02   $     0.00   $    (0.08)
Weighted average shares of common
 Stock outstanding:
  basic and diluted                            38,795       38,796       38,797       38,797

                                                      Year Ended December 31, 2000
                                           --------------------------------------------------
                                               1st          2nd          3rd          4th
                                           -----------  -----------  -----------  -----------
<S>                                        <C>          <C>          <C>          <C>
Total revenue                              $   19,174   $   19,501   $   16,732   $   23,197
Total expenses                                 18,699       18,938       20,197       25,649
Net income (loss)                                 475          563       (3,465)      (2,452)

Net income (loss) per share:
  basic and diluted                        $     0.01   $     0.01   $    (0.09)  $    (0.06)
Weighted average shares of common
 Stock outstanding:
  basic and diluted                            39,011       39,011       39,011       38,795
</TABLE>

(1) During the fourth quarter of 2001, several events significantly impacted
    the Company's results of operations.  The Company recorded a $617,000
    estimate relating to the State of New York Department of Health audit of
    WCNY's Child Health Plus line of business.  The estimate relates to the
    audit period of February 2001 through July 2001, which the Company received
    preliminary notification of the findings in December 2001.  The audit
    findings were not estimable in previous quarters.  In January 2002, the
    Company was notified of a duplicate billing error, relating to WCNY's Child
    Health Plus line of business, of $443,000 from January 2000 through October
    2001.  The Company recorded this liability as of December 31, 2001.
    FirstChoice recorded an increase in its medical costs payable of
    approximately $1.0 million due to a change in estimate.  The changes in the
    Company's claims payment pattern adversely impacted the actuarially
    determined medical costs payable.





<PAGE>  56
            THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                                 Schedule I
                Condensed Financial Information of Registrant
                          Condensed Balance Sheets
                              ($ In Thousands)
<TABLE>
<CAPTION>
                                                                  December 31,
                                                             ----------------------
                                                                2001        2000
                                                             ----------  ----------
<S>                                                          <C>         <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                  $       -   $     155
  Other current assets                                             214         215
                                                             ----------  ----------
          Total current assets                                     214         370
  Other assets, net                                                  -           -
                                                             ----------  ----------
          Total assets                                       $     214   $     370
                                                             ==========  ==========

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current Liabilities:
  Accounts payable, accrued expenses                         $     133   $     166
  Notes payable to affiliate                                       920           -
  Other                                                          8,606       7,766
                                                             ----------  ----------
          Total liabilities                                      9,659       7,932

 Shareholders' Deficiency:
  Preferred stock                                                    3           3
  Common stock                                                     388         388
  Additional paid-in capital                                    54,709      54,709
  Accumulated deficit                                          (64,365)    (62,460)
                                                             ----------  ----------
                                                                (9,265)     (7,360)
   Treasury stock at cost -
    11,395 shares in 2001 and 12,850 shares in 2000               (180)       (202)
                                                             ----------  ----------
          Total shareholders' deficiency                        (9,445)     (7,562)
                                                             ----------  ----------
          Total liabilities and shareholders'
           deficiency                                        $     214   $     370
                                                             ==========  ==========
</TABLE>





<PAGE>  57
             THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                                 Schedule I
                Condensed Financial Information of Registrant
                     Condensed Statements of Operations
                              ($ In Thousands)
<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                         ----------------------------------
                                                            2001        2000        1999
                                                         ----------  ----------  ----------
<S>                                                      <C>         <C>         <C>
Revenue:
  Fee income                                             $       -   $       -   $   6,748
  Interest income                                                -       1,282       1,521
  Other income - net                                           115         899         186
                                                         ----------  ----------  ----------
Total revenue                                                  115       2,181       8,455
Expenses:
  General and administrative expenses                          226         294       5,750
  Interest expense and other expenses                            -           -       3,548
                                                         ----------  ----------  ----------
Total expenses                                                 226         294       9,298
                                                         ----------  ----------  ----------
(Loss) income from operations                                 (111)      1,887        (843)
Provision for income tax                                         -           -           -
                                                         ----------  ----------  ----------
(Loss) income before equity in
  (loss) income of subsidiaries                               (111)      1,887        (843)
Equity in (loss) income of subsidiaries - net of tax        (1,794)     (6,766)      2,451
                                                         ----------  ----------  ----------
Net (loss) income                                           (1,905)     (4,879)      1,608
Preferred stock deemed dividend                                  -           -      (3,043)
                                                         ----------  ----------  ----------
Net loss available to common shareholders                $  (1,905)  $  (4,879)  $  (1,435)
                                                         ==========  ==========  ==========
</TABLE>





<PAGE>  58
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                                 Schedule I
                 Condensed Financial Information of Registrant
                      Condensed Statements of Cash Flows
                              ($ In Thousands)
<TABLE>
<CATPTION>
                                                               Year Ended December 31,
                                                         ----------------------------------
                                                            2001        2000        1999
                                                         ----------  ----------  ----------
<S>                                                      <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                                        $    (111)  $   1,887   $    (843)
Adjustments to reconcile net (loss) income to net
 cash (used in) provided by operating activities:
  Depreciation and amortization                                  -           5         128
  Interest on debt inducement                                    -           -       3,043
  Other - net                                                 (986)    (19,240)     (2,289)
                                                         ----------  ----------  ----------
      Net cash (used in) provided by
       operating activities                                 (1,097)    (17,348)         39

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease (increase) in notes receivable                        -      17,283      (5,006)
                                                         ----------  ----------  ----------
      Net cash provided by (used in)
       investing activities                                      -      17,283      (5,006)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in notes payable                                    920           -           -
  Issuance of common stock                                       -         126           -
  Issuance of treasury stock                                    22           -           -
  Issuance of series A preferred stock                           -           -       5,003
                                                         ----------  ----------  ----------
      Net cash provided by financing activities                942         126       5,003
                                                         ----------  ----------  ----------
      Net increase in cash and cash equivalents                155          61          36
Cash and cash equivalents, beginning of period                 155          94          58
                                                         ----------  ----------  ----------
Cash and cash equivalents, end of period                 $       -   $     155   $      94
                                                         ==========  ==========  ==========
</TABLE>






<PAGE>  59
              THE WELLCARE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                                 Schedule II
                       Valuation and Qualifying Accounts
              For the years ended December 31, 2001, 2000, and 1999
                                ($ In Thousands)
<TABLE>
<CAPTION>
                                   Balance at                              Balance at
                                   Beginning                   Less:         End of
                                   of Period    Additions    Deductions      Period
                                   ----------   ---------    ----------    ----------
<S>                                <C>          <C>          <C>           <C>
Year ended December 31, 1999
Allowance for doubtful accounts:
  Trade receivable                 $   4,184    $  1,522     $   3,896     $   1,810
  Other receivable                     1,957           -         1,457           500
  Notes receivable                     8,882         568         6,453         2,997
                                   ----------   ---------    ----------    ----------
Total                              $  15,023    $  2,090     $  11,806     $   5,307
                                   ==========   =========    ==========    ==========

Year ended December 31, 2000
Allowance for doubtful accounts:
  Trade receivable                 $   1,810    $  1,109     $   2,719     $     200
  Other receivable                       500          63           563             -
  Notes receivable                     2,997           -         2,997             -
                                   ----------   ---------    ----------    ----------
Total                              $   5,307    $  1,172     $   6,276     $     200
                                   ==========   =========    ==========    ==========

Year ended December 31, 2001
Allowance for doubtful accounts:
  Trade receivable                 $     200    $      -     $     200     $       -
</TABLE>







<PAGE>  69
                              SIGNATURES

     Pursuant to the requirements of Section 13 or 15 (d) 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.

Dated:  March 29, 2002      /s/ Kiran C. Patel, M.D.
                            ----------------------------------------
                            Kiran C. Patel, M.D.
                            President and Chief Executive Officer
                            (Principal Executive Officer)


     Pursuant to the requirements of the Section 13 or 15 (d) of the Securities
Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.

Dated:  March 29, 2002      /s/ Kiran C. Patel, M.D.
                            ----------------------------------------
                            Kiran C. Patel, M.D.
                            President and Chief Executive Officer
                            (Principal Executive Officer)

Dated:  March 29, 2002      /s/ Carol K. McAllister
                            ----------------------------------------
                            Carol K. McAllister
                            Chief Accounting Officer
                            (Principal Accounting Officer)

Dated:  March 29, 2002      /s/ Pradip C. Patel
                            ----------------------------------------
                            Pradip C. Patel
                            Director

Dated:  March 29, 2002      /s/ Rupesh R. Shah
                            ----------------------------------------
                            Rupesh R. Shah
                            Director

Dated:  March 29, 2002      /s/ Mark D. Dean
                            ----------------------------------------
                            Mark D. Dean
                            Director