UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-QSB


(Mark One)

     [X]  QUARTERLY  REPORT  UNDER  SECTION  13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

         For the quarterly period ended:   December 31, 2003

     [ ]  TRANSITION  REPORT  UNDER  SECTION  13 OR 15(d)  OF THE  SECURITIES
          EXCHANGE ACT OF 1934

           For the transition period from __________ to _____________

                        Commission file number: 000-31249
                            CRITICAL HOME CARE, INC.
        (Exact name of small business issuer as specified in its charter)

                NEVADA                                      88-0331369
    (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                      Identification No.)

                                762 SUMMA AVENUE
                               WESTBURY, NY 11590
                    (Address of principal executive offices)

                                  516-997-1200
                           (Issuer's telephone number)

                                 Not Applicable
                     (Former name, former address and former
                   fiscal year, if changed since last report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable  date: March 5, 2004, Common Stock,  $0.25
par value, 24,393,026 shares outstanding

Transitional Small Business Disclosure Format (Check one): Yes [    ]   No [ X ]



<PAGE>




                    CRITICAL HOME CARE, INC. AND SUBSIDIARIES


                                      INDEX

                                                                     Page
                                                                    Number

PART I. FINANCIAL INFORMATION


   Item 1. Financial Statements
     Unaudited Consolidated Balance Sheet as of
       December 31, 2003.........................................      1
     Unaudited Consolidated Statements of Operations
       For The Three Months Ended December 31, 2003
       and December 31, 2002.....................................      2
     Unaudited Consolidated Statements of Cash Flows
       For The Three Months Ended December 31, 2003
       and December 31, 2002.....................................      3
     Notes to Unaudited Consolidated Financial Statements........      4-8

   Item 2. Management's Discussion and Analysis or
           Plan of Operations....................................      9-10
   Item 3. Controls and Procedures...............................      11

PART II. OTHER INFORMATION
   Item 1. Legal Proceedings ....................................      11
   Item 2. Changes in Securities.................................      11
   Item 3. Defaults Upon Senior Securities.......................      11
   Item 4. Submission of Matters to a Vote of Security
           Holders...............................................      11
   Item 5. Other Information ....................................      11
   Item 6. Exhibits and Reports on Form 8-K......................      11
           Signatures............................................      12
           Certifications........................................      13-15

<PAGE>

ITEM 1

<TABLE>
<CAPTION>
                    CRITICAL HOME CARE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                                                                 December 31,
                                                                                    2003
                                                                                 ------------
                                                                                 (unaudited)
                                  ASSETS
<S>                                                                         <C>

CURRENT ASSETS
   Cash and cash equivalents.................................................  $        2,000
   Accounts receivable, net of allowance for
       doubtful accounts of $953,000.........................................       1,130,000
   Inventory.................................................................         202,000
   Prepaid expenses and other current assets.................................         101,000

                                                                                  -----------

       TOTAL CURRENT ASSETS..................................................       1,435,000
                                                                                  -----------

PROPERTY AND EQUIPMENT - NET.................................................         603,000
GOODWILL.....................................................................       1,857,000
SECURITY DEPOSITS............................................................          30,000
OTHER INTANGIBLES............................................................          75,000
                                                                                  -----------

       TOTAL ASSETS..........................................................  $    4,000,000
                                                                                  ===========
                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable...........................................................        882,000
   Accrued expenses and other current liabilities.............................        444,000
   Notes payable - other, net of discount of $14,000..........................        624,000
   Notes payable - officer....................................................        654,000
                                                                                    ---------
       TOTAL CURRENT LIABILITIES..............................................      2,604,000
                                                                                    ---------
LONG-TERM DEBT
   Notes payable - asset acquisition..........................................        233,000
   Note payable - officer.....................................................         50,000
                                                                                   ----------
TOTAL LONG TERM DEBT..........................................................        283,000
                                                                                   ----------
TOTAL LIABILITIES.............................................................      2,887,000
                                                                                   ----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock, $0.25 par value, 5,000,000 shares authorized,
        none issued and outstanding
   Common stock, $0.25 par value; 100,000,000 shares authorized;
        24,393,000 shares issued and outstanding..............................      6,098,000
   Additional paid-in capital.................................................      3,272,000
   Accumulated deficit........................................................     (8,257,000)
                                                                                    ----------
       TOTAL STOCKHOLDERS' EQUITY.............................................      1,113,000
                                                                                    ----------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................  $    4,000,000
                                                                                   ===========


                       See accompanying notes to consolidated financial statements.

</TABLE>
                                                1
<PAGE>

<TABLE>
<CAPTION>



                    CRITICAL HOME CARE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                                                                           FOR THE
                                                                      THREE MONTHS ENDED
                                                                          DECEMBER 31,
                                                                     -------------------
                                                                  2003                 2002
                                                                  ----                 ----
<S>                                                         <C>               <C>



NET SALES..............................................     $  1,315,000        $    1,685,000
COST OF GOODS SOLD.....................................          408,000               541,000
                                                              ----------              ---------
GROSS PROFIT...........................................          907,000             1,144,000

OPERATING EXPENSES:
    Selling, general and administrative................        1,159,000             1,204,000
    Depreciation and amortization......................           22,000                32,000
                                                                --------              ---------

      TOTAL OPERATING EXPENSES.........................    $   1,181,000        $    1,236,000
                                                               ---------             ---------

LOSS FROM OPERATIONS...................................         (274,000)              (92,000)
                                                                ---------             ---------
OTHER INCOME (EXPENSE):

   Other income........................................             -                  138,000
   Interest expense....................................          (20,000)              (41,000)
   Amortization of deferred debt discount,
     notes payable - other.............................          (12,000)                 -

                                                               ----------            ----------
                                                                ( 32,000)               97,000
                                                               ----------            ----------

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES........         (306,000)                5,000

PROVISION FOR INCOME TAXES.............................             -                   (2,000)
                                                              ----------             ----------

NET (LOSS) INCOME......................................    $    (306,000)       $        3,000
                                                              ==========            ==========


BASIC AND DILUTED (LOSS) INCOME PER SHARE..............    $     ( 0.01)        $         0.00
                                                                ========              ========

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING.........................................       24,393,000            24,045,000
                                                              ==========            ==========
</TABLE>


                    See accompanying notes to consolidated financial statements.




                                            2

<PAGE>
<TABLE>

                  CRITICAL HOME CARE, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                                                 FOR THE
                                                                           THREE MONTHS ENDED
                                                                               DECEMBER 31,
                                                                              --------------
                                                                      2003                    2002
                                                                      ----                    ----
<S>                                                       <C>                   <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net (loss) income......................................     $   (306,000)          $       3,000
   Adjustments to reconcile net (loss) income to net
     cash used by operating activities:
       Provision for bad debts............................          125,000                    -
       Depreciation and amortization......................           48,000                  32,000
       Stock option compensation..........................            -                      57,000
       Interest paid with common stock....................            -                      25,000
       Amortization of deferred debt discount -
         notes payable - other............................           12,000                    -
   Changes in operating assets and liabilities
       Accounts receivable................................         (365,000)               (465,000)
       Inventory..........................................           64,000                  63,000
       Prepaid expenses...................................          (14,000)                 16,000
       Accounts payable...................................           97,000                  69,000
       Accrued expenses and other current liabilities.....          130,000                  19,000
                                                                  ----------              ----------
Total adjustments.........................................           97,000                (184,000)
                                                                  ----------              ----------
NET CASH (USED IN) OPERATING ACTIVITIES...................         (209,000)               (181,000)
                                                                  ----------              ----------
CASH FLOWS (USED IN) INVESTING ACTIVITIES
   Purchases of property and equipment....................          (29,000)                (43,000)
                                                                  ----------                --------
CASH FLOWS FROM FINANCING ACTIVITIES
   Cash overdrafts.........................................         (39,000)                   -
   Proceeds from insurance settlement......................          11,000                    -
   Proceeds from convertible promissory notes..............             -                   641,000
   Debt issue costs........................................             -                   (95,000)
   Payment of long-term debt...............................         (11,000)                 (2,000)
   Payment of notes payable - asset acquisitions...........            -                   (100,000)
   Payment of notes payable - other........................            -                   (189,000)
   Proceeds from note payable - officer....................         277,000                    -
                                                                   --------                 --------
NET CASH PROVIDED BY FINANCING ACTIVITIES..................         238,000                 255,000
                                                                   --------                 --------
NET INCREASE IN CASH AND CASH EQUIVALENTS..................            -                     31,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............           2,000                  54,000
                                                                  ---------                ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD...................   $       2,000          $       85,000
                                                               ============              ===========
Supplementary information:
 Cash paid during the period for:

   Interest................................................   $       2,000          $        2,000
                                                                ===========             ============


                    See accompanying notes to consolidated financial statements.
</TABLE>

                                                   3

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

     The   consolidated   balance  sheet  as  of  December  31,  2003,  and  the
consolidated  statements  of  operations  and cash flows for the  periods  ended
December 31, 2003 and 2002, have been prepared by the Company in accordance with
accounting  principles  generally  accepted in the United  States of America and
without  audit.  These interim  financial  statements  include all  adjustments,
consisting  only  of  normal  recurring  accruals,  which  management  considers
necessary  to make the  financial  statements  not  misleading.  The  results of
operations for the quarterly period ended December 31, 2003, are not necessarily
indicative of results that may be expected for any other  interim  period or for
the full year.

     The consolidated financial statements include the accounts of Critical Home
Care, Inc. and its wholly owned subsidiaries ("Critical" or the "Company").  All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

     The  consolidated  financial  information  included in this report has been
prepared on the basis that the Company  will  continue  as a going  concern.  At
December 31, 2003, the Company had a working  capital  deficiency of $1,169,000,
an accumulated  deficit of $8,257,000 and had incurred a loss for the quarter of
$306,000.  The Company's  recurring losses from operations and its difficulty in
generating  sufficient  cash  flow to  meet  its  obligations  and  sustain  its
operations  raise  substantial  doubt  about its  ability to continue as a going
concern.

     This report  should be read in  conjunction  with the  Company's  financial
statements  included  in the report on Form  10-KSB  for the  fiscal  year ended
September 30, 2003 filed with the Securities and Exchange Commission on February
18, 2004 as well as the Company's other filings with the Securities and Exchange
Commission.

     The business  plan and growth  strategy are  dependent on working  capital.
Management has been  aggressively  seeking to raise  additional  capital through
accounts receivable  financing and private sector loans, but have been unable to
secure such financing,  other than a loan from a private individual for $250,000
on  February  3, 2004.  Currently,  management  is  seeking to raise  additional
working capital from another private  individual and other investor sources.  If
the Company is unable to secure this financing, as well as other financing of at
least a combined  total of  $1,000,000,  cash on hand and cash  equivalents  and
funds from  operations  will not be sufficient  to meet our working  capital and
capital expenditure needs for the next twelve months.

     If the  Company is  successful  in securing  capital,  but fails to achieve
revenue  growth  assumptions,  the Company will have to raise further  equity or
debt financing  and/or  curtail  certain  expenditures  contained in the current
operating  plans.  Management  cannot  assure that our sales  efforts or expense
reduction programs will be successful,  or that any additional financing will be
available to the Company, or, if available, that the terms will be satisfactory.
If the  Company is not  successful  in raising  additional  capital or unable to
generate  sufficient cash flows to meet obligations as they come due and can not
renegotiate the payment terms of the debt coming due in April through June 2004,
the Company's  financial  condition and results of operations will be materially
and adversely affected and the Company may not be able to continue to operate as
a going concern.  If the Company is successful in raising additional capital but
fails to  increase  its  revenue or reduce  expenses,  the  Company's  financial
condition and results of operations may be materially and adversely affected and
the  Company  may not be able to  continue  as a going  concern.  The  Company's
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability and  reclassification of recorded asset amounts or to amounts and
classification  of  liabilities  that may be  necessary  should  we be unable to
continue as a going concern.


NOTE 2 - DESCRIPTION OF BUSINESS


     On July 12, 2002, the Company  acquired 100% of the common stock of Classic
Healthcare Solutions, Inc. ("Classic");  on August 8, 2002, the Company acquired
substantially  all of the assets and business  operations of Homecare  Alliance,
Inc. ("Alliance"); on September 13, 2002, the Company acquired substantially all
of the assets and business  operations of All Care Medical Products,  Inc. ("All
Care") and on September 26, 2002, the Company  consummated a reverse acquisition
with New York Medical, Inc. ("NYMI") and NYMI changed its name to Critical.  The
results of  operations of acquired  businesses  have been included with those of
the Company since the respective dates of acquisition.



                                           -4-


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


     For  accounting  purposes,  the  transaction  between NYMI and Critical was
considered,   in  substance,  a  capital  transaction  rather  than  a  business
combination  and has been accounted for under the purchase  method of accounting
since the former  shareholders of Critical now own a majority of the outstanding
common stock of NYMI.  Accordingly,  the  combination  of Critical with NYMI was
recorded as a recapitalization of Critical,  pursuant to which Critical has been
treated as the  continuing  entity for  accounting  purposes and the  historical
financial statements presented are those of Critical.

     Critical is incorporated in Nevada and based on Long Island,  New York. The
Company  markets,  rents and sells  surgical  supplies,  orthotic and prosthetic
products and durable medical  equipment,  such as wheelchairs and hospital beds.
The Company also  provides  oxygen and other  respiratory  therapy  services and
equipment and operates four retail  outlets in the New York  metropolitan  area.
Clients and patients are primarily  individuals  residing at home. The Company's
equipment and supplies are readily  available in the marketplace and the Company
is not dependent on a single supplier.  Reimbursement  and payor sources include
Medicare,  Medicaid,  insurance companies, managed care groups, HMO's, PPO's and
private pay. The Company had one payor  source,  Medicare,  which  accounted for
more than 10% of its revenue  during the  quarters  ended  December 31, 2003 and
2002.  Such  revenue  represented  approximately  20% and  21% of the  Company's
revenues for the three months ended December 31, 2003 and 2002, respectively.


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Revenue recognition - Revenues are recorded in the period the services were
rendered at established  rates reduced by provisions  for doubtful  accounts and
contractual  adjustments.  Such  adjustments  represent the  difference  between
charges  at  established  rates  and  estimated  recoverable  amounts  and  were
recognized in the period the services were  rendered.  Any  differences  between
estimated  contractual  adjustments and actual final settlements were recognized
as contractual  adjustments in the year final  settlements were determined.  The
Company reports  revenues in its financial  statements net of such  adjustments,
however,  appeals  are  sometimes  filed and if such  appeals are decided in the
Company's  favor,  revenues  would be  readjusted.  The  Company  estimates  the
allowance  for  uncollectible  accounts  and  contractual  adjustments  based on
historical experience.

     Concentration of credit risk - The Company  primarily  provides health care
services,   medical  need  related  equipment  and  customized  devices  and  is
reimbursed by the patient's third-party insurers or governmentally funded health
care insurance programs. The Company performs ongoing credit evaluations for its
private pay customer  patients and open  account  customers.  The ability of the
Company's  debtors to meet their  obligations  is dependent  upon the  financial
stability  of the  insurers  of  the  Company's  customer  patients  and  future
legislation and regulatory actions. The Company maintains reserves for potential
losses from these receivables that  historically  have been within  management's
expectations.

     Allowance  for  doubtful  accounts  -  The  Company  reviews  all  Accounts
Receivable balances,  and provides for an allowance for uncollectible  accounts,
and  estimates  for its bad debt  expense  based on  historical  analysis of its
records.  The basis of this analysis is from the aging of the receivable  files,
and the patient, payer provider records, and additionally their payment history.
Items that are greater than one year old are  reserved for 100%.  The balance of
any reserve, which is established,  is estimated based on the collection history
from Company records.

     Impairment of Long-lived assets - The Company reviews its long-lived assets
for  impairment  whenever  changes in  circumstances  indicate that the carrying
amount of an asset may not be  recoverable.  To determine if impairment  exists,
the Company  compares  the  estimated  future  undiscounted  cash flows from the
related long-lived assets to the net carrying amount of such assets. Once it has
been  determined that an impairment  exists,  the carrying value of the asset is
adjusted to fair value.  Factors  considered in the  determination of fair value
include  current  operating  results,  trends and the present value of estimated
expected future cash flows. During the fiscal year ended September 30, 2003, the
Company recorded a goodwill  impairment  charge of $1,500,000.  At September 30,
2003,  the Company  obtained  an  independent  valuation  from a third party and
management concluded that no additional  adjustment for impairment was required.
Management  believes  that  there is no  additional  goodwill  impairment  as of
December 31, 2003.


                                            -5-


<PAGE>



                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    (UNAUDITED)


     Earnings  (loss) per share - The Company  follows  Statement  of  Financial
Accounting  Standards,  ("SFAS")  No.  128,  "Earnings  per Share"  ("EPS")  for
computing and presenting  earnings(loss) per share, which requires,  among other
things,  dual presentation of basic and diluted earnings (loss) per share on the
face of the  statement  of  operations.  Basic EPS is computed  by dividing  net
income (loss) available to common stockholders by the weighted average number of
common  shares  outstanding  for the period.  Diluted EPS reflects the potential
dilution  that could occur if  securities,  or other  contracts  to issue common
stock were exercised or converted into common stock.  Outstanding  stock options
to acquire  1,013,100 and 325,000  common shares for the quarters ended December
31, 2003 and December 31, 2002,  respectively,  have not been  considered in the
computation  of  dilutive  earnings  per  share  since  their  effect  would  be
antidilutive.


 STOCK BASED COMPENSATION

     The  Company  accounts  for its  stock  option  plan  under  SFAS No.  148,
"Accounting  for Stock Based  Compensation  -  Transition  and  Disclosure  - an
amendment  of SFAS No.  123".  As  permitted  under SFAS No.  123,  the  Company
continues to apply the Accounting  Principles Board Opinion No. 25,  "Accounting
for Stock Issued to  Employees."  As required  under SFAS No. 148, the following
table presents pro forma net (loss) income and basic and diluted (loss) earnings
per share as if the fair value-based method had been applied to all awards.


<TABLE>
<CAPTION>

                                                                   For The Three Months Ended
                                                            ----------------------------------------
                                                            December 31, 2003      December 31, 2002
                                                            ----------------------------------------
<S>                                                        <C>                   <C>
 Net (loss) income as reported                              $    (306,000)        $      3,000
 Stock option compensation included in net (loss) income             -                  57,000
  Less: Total stock-based employee compensation expense
        determined under the fair value method, net of
        related tax effects                                        (3,000)             (99,000)
                                                             ---------------      ------------------
                     Pro Forma net loss                     $    (309,000)        $    (39,000)
                                                             ---------------      ------------------

 Net (loss) income per share:
 Basic and diluted (loss) income per share as reported      $       (0.01)        $       0.00
 Pro Forma basic and diluted loss per share                 $       (0.01)        $      (0.00)

</TABLE>

NOTE 4 - LEGAL PROCEEDINGS

     In April 2003,  Ruth Davis and Herman Davis (wife and husband)  commenced a
lawsuit in Nassau County Supreme Court against the Company's subsidiary, Classic
Healthcare  Solutions,  Inc.  ("Classic").  Plaintiff  Mrs. Davis claims to have
sustained  injuries on September 15, 2002,  from an alleged  malfunction  of the
chair lift,  which she acquired from Classic,  and claims damages of $2,000,000.
In  addition,  plaintiff  Mr.  Davis  claims  damages  of  $500,000  for loss of
services.

     The Company's  insurance  carrier is defending the lawsuit on behalf of the
Company and  management  believes  that there is sufficient  insurance  coverage
under its insurance policy to satisfy any typical  settlement of the claims.  In
addition,  any product  liability  insurance  carried by the manufacturer of the
chair lift would most likely complement that of Classic.  As the lawsuit is only
in the  discovery  stage,  management  cannot  predict  the outcome of the case,
however,  management is of the opinion that any  settlement in this matter would
not have a material  impact on the  financial  condition  or  operations  of the
Company.


                                       -6-


<PAGE>


                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                              (UNAUDITED)


NOTE 5 - ISSUANCE OF SECURITIES

     During the three months ended  December 31, 2002,  the Company sold a total
of $641,858 of convertible  promissory notes (the "Notes") pursuant to a private
placement  (the  "Private  Placement")  under  Rule 506 of  Regulation  D of the
Securities Act of 1933, as amended. The Notes were convertible into common stock
at the rate of one share for every  $1.00 of Notes at the  Company's  discretion
and in November 2002 the Company  elected to convert all such Notes into 641,858
shares of common stock. An additional 2,168 shares were issued as interest.  The
private placement terminated on February 28, 2003. As a result of the conversion
price of $1.00 being less than the fair market value on the dates the notes were
purchased,  the  Company  recorded  a  non-cash  debt  discount  and  beneficial
conversion feature charge of $666,000 in the quarter ended March 31, 2003.


NOTE 6 - NOTES PAYABLE

     In  February  2003,  the Company  borrowed  $475,000  from three  unrelated
parties.  The notes  payable  to two of the  three  unrelated  parties  included
five-year  options to acquire an  aggregate of 187,500  shares of the  Company's
common  stock at $1.00  per  share.  Using the  Black  Scholes  method of option
valuation,  these  options  were valued at $56,000  which amount was recorded as
debt discount and is being  amortized over the 14-month life of the notes (also,
see Note 8).  The  charge  for the three  months  ended  December  31,  2003 was
$12,000;  the  balance  of $14,000  has been  reflected  as a discount  to notes
payable, other.


Notes payable at December 31, 2003 are summarized as follows:
<TABLE>
<CAPTION>


<S>                                                                     <C>
Notes payable, other, issued between July 1, 2002 and September 19,
2002 pursuant to working capital loans provided by certain persons
bearing interest at 8% to 12% per annum payable March 15, 2004
through May 31, 2004. These notes are secured by certain assets of
the Company.                                                               $163,000


Notes payable, other, issued in February 2003 pursuant to working
Capital loans provided by the three unrelated parties bearing interest
at 5% per annum payable in April 2004. These notes are subject to certain
acceleration provisions which require a prepayment in the event the
Company completes an equity financing in excess of $500,000.                475,000
(See Note 8)

Less discount:                                                              (14,000)
                                                                           ---------
                                                                           $461,000
                                                                           --------
                                                                           $624,000
                                                                           ========
Notes payable, officer, issued from May 2003 through December 2003
pursuant to working capital loans from the President of the Company
bearing interest at 8% per annum and due in May 2004 through
December 2004.                                                             $654,000
                                                                           ========


</TABLE>






                                       -7-
<PAGE>



                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                              (UNAUDITED)

<TABLE>
<CAPTION>



Long Term:

<S>                                                                      <C>
Notes payable, asset acquisition, issued September 13, 2002
pursuant to the All Care Asset Acquisition Agreement as modified
on April 16, 2003, bearing interest at 7% per annum and payable
August 15, 2005.                                                           $233,000
                                                                           ========

Note payable, officer, issued in January 2003 through December
2003 pursuant to working capital loans from the President of the
Company bearing interest at 8% and payable on October 16, 2005.            $ 50,000
                                                                           ========
</TABLE>


NOTE 7 - Income Taxes

     As of December 31, 2003, the Company has net operating  loss  carryforwards
of  approximately  $1,717,000  that will be available to offset  future  taxable
income through the dates shown below:

                                 September 30,

                                     2022              $   220,000
                                     2023                1,191,000
                                     2024                  306,000
                                                        ----------
                                                       $ 1,717,000
                                                        ==========

     Tax benefits from the utilization of net operating loss  carryforwards will
be  recorded  at such  time  and to such  extent,  they  are  assured  beyond  a
reasonable  doubt.  As such,  the  resulting  estimated  deferred  tax assets of
approximately  $1,100,000  as of  December  31,  2003,  have  been  offset  by a
corresponding valuation allowance.




NOTE 8 - SUBSEQUENT EVENTS

     On  February  3, 2004,  the Company  entered  into an Amended and  Restated
Promissory  Note for a total of $500,000  (the  "Restated  Note")  with  Stephen
Garchik,  Trustee ("Garchik") and simultaneously executed a related stock option
agreement and a registration rights agreement in favor of Garchik.  The Restated
Note is comprised of $250,000  previously loaned to the Company in February 2003
and originally due in April 2004, and an additional  $250,000,  which was loaned
to the Company on February 3, 2004.


     The stock  option  agreement  provides  Garchik  with  ten-year  options to
acquire 500,000 shares of the Company's  common stock at $0.25 per share and all
such options vested upon grant and the registration  rights  agreement  provides
Garchik with certain piggyback registration rights in the event that the Company
files a registration  statement.  The Restated Note bears interest at Prime,  as
published  in the Wall Street  Journal  (4% as of March 1,  2004),  plus one and
principal  and  all  accrued  interest  is  due  June  30,  2004.  Stock  option
compensation in the amount of approximately  $125,000 will be amortized over the
five-month period ending June 30, 2004 relative to this transaction.

     On February 1, 2004, the Company executed a sublease agreement covering 750
square feet of medical office space in Lake Success, New York. The annual rental
is $33,000 and the lease terminates on February 29, 2012.



                                    -8-


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

     The following  discussion and analysis  should be read in conjunction  with
the Consolidated  Financial  Statements and Notes thereto appearing elsewhere in
this Form 10-QSB.

     Statements  contained in this report include  "forward-looking  statements"
within the meaning of such term in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.  Forward-looking  statements
involve known and unknown risks,  uncertainties  and other factors,  which could
cause actual  financial  or  operating  results,  performances  or  achievements
expressed  or implied by such  forward-  looking  statements  not to occur or be
realized.  Such  forward-looking  statements  generally  are  based  on our best
estimates of future  results,  performances  or  achievements,  predicated  upon
current  conditions  and the most recent  results of the companies  involved and
their respective industries. Forward-looking statements may be identified by the
use of  forward-looking  terminology  such as  "may,"  "can,"  "will,"  "could,"
"should," "project," "expect," "plan," "predict," "believe,"  "estimate," "aim,"
"anticipate," "intend," "continue," "potential," "opportunity" or similar terms,
variations of those terms or the negative of those terms or other  variations of
those terms or comparable words or expressions.

     Readers are urged to carefully review and consider the various  disclosures
made by us in this  Quarterly  Report on Form 10-QSB,  our Annual Report on Form
10-KSB filed on February 18, 2004 and our other filings with the  Securities and
Exchange  Commission.  These  reports and filings  attempt to advise  interested
parties  of the  risks and  factors  that may  affect  our  business,  financial
condition  and  results  of  operations  and  prospects.   The   forward-looking
statements  made in this Form  10-QSB  speak  only as of the date  hereof and we
disclaim any  obligation  to provide  updates,  revisions or  amendments  to any
forward-looking  statements  to reflect  changes in our  expectations  or future
events.

Results of Operations

     The Three Months Ended December 31, 2003 Compared to the Three Months Ended
December 31, 2002

     For the three months ended December 31, 2003,  sales decreased by $370,000,
or 22%, to  $1,315,000  as  compared to  $1,685,000  in the three  months  ended
December  31,  2002.  The  decrease  is  primarily  attributable  to a  lack  of
sufficient working capital to purchase the product needed to maintain historical
volume levels.

     Gross profit for the three months ended December 31, 2003 was 69%, a slight
increase of 1% over the 68% recorded in the prior year comparable  period.  This
was a result of the sales mix in both quarters being approximately the same.


     Selling,  general and  administrative  expenses totaled  $1,159,000 for the
three months ended December 31, 2003 compared to $1,204,000 for the three months
ended  December 31, 2002. The net decrease of $ 45,000  consists  primarily of a
reduction  of  stock  option   compensation   by  $57,000  as  no  stock  option
compensation  was incurred  during the three  months ended  December 31, 2003; a
reduction  in  advertising  and  marketing  expenses of $15,000;  a reduction of
$13,000 in certain stock transfer and filing fees and rent and related occupancy
expense reductions of approximately $27,000. The three months ended December 31,
2003 included a charge of $22,000 for  commitment  fees and due  diligence  fees
paid to two potential  asset based lenders and also included a provision for bad
debts of $125,000.  There was no comparable expense for either of these items in
the three months ended December 31, 2002. A billing and  collection  service was
contracted  with on October 1, 2003.  Start up, service and  collection  fees of
approximately $104,000 for the new service were somewhat offset by reductions of
approximately  $86,000 in payroll  and  related  expenses  and the full  savings
impact is expected to be  recognized  in the next two  quarters  and beyond.  In
addition,  there  was a net  decrease  of  approximately  $98,000  in all  other
expenses.



                                       -9-



<PAGE>


     Interest  expense was $20,000 for the three months ended  December 31, 2003
as compared to $41,000 for the three  months ended  December 31, 2002.  Interest
expense incurred in the three months ended December 31, 2002 included $25,000 of
amortization  of  deferred  interest.  The  amount of  interest  payable in cash
increased by $4,000 for the current year quarter due to higher average  balances
of outstanding debt.


     Amortization  of deferred  debt  discount  of $12,000 for the three  months
ended December 31, 2003 represents the amount of amortization for the quarter of
the  $56,000  fair value of stock  options  granted to  certain  noteholders  as
explained in Note 6 to the  consolidated  financial  statements.  Such amount is
being amortized over the 14-month life of the related notes through April 2004.


Liquidity and Capital Resources

     The Company's  primary  needs for  liquidity and capital  resources are the
funding of operating and  administrative  expenses  related to the management of
the  Company  and its  subsidiaries.  At December  31,  2003,  the Company had a
working capital deficiency of $1,169,000,  an accumulated  deficit of $8,257

..000
and had incurred a loss for the quarter of $306,000.


     At December 31, 2003, the register cash balance remained the same as it was
at the beginning of the period, however, the book overdraft of $39,000 reflected
at September  30, 2003 has been  eliminated.  The  Company's  cash of $2,000 and
estimated  funds that will be generated  from  operations  are not sufficient to
both support current levels of operations for the next twelve months, as well as
to pay current  liabilities when due. The Company,  therefore,  is attempting to
raise  capital in order to meet all of its  obligations.  The  Company  had also
instituted  various payroll and expense  reductions  during the last half of the
fiscal year ended  September 30, 2003 and has taken further cost saving measures
during the quarter ended December 31, 2003 including  contracting with a billing
and collection service organization in lieu of continuing such activities in the
corporate  office.  The expected  savings from using the billing and  collection
service should begin to have a positive  impact in the quarters ending March 31,
2004 and June 30, 2004.

     The business  plan and growth  strategy are  dependent on working  capital.
Management has been  aggressively  seeking to raise  additional  capital through
accounts receivable  financing and private sector loans, but have been unable to
secure such financing,  other than a loan from a private individual for $250,000
on February 3, 2004. In addition,  during the quarter  ended  December 31, 2003,
the President of the Company  advanced a total of $277,000 for working  capital.
Currently,  management is seeking to raise additional working capital from other
private  individuals and potential investor sources. If the Company is unable to
secure  financing of at least a combined total of  $1,000,000,  cash on hand and
cash  equivalents  and funds from  operations will not be sufficient to meet our
working capital and capital expenditure needs for the next twelve months.



     If the  Company is  successful  in securing  capital,  but fails to achieve
revenue  growth  assumptions,  the Company will have to raise further  equity or
debt financing  and/or  curtail  certain  expenditures  contained in the current
operating  plans.  Management  cannot  assure that our sales  efforts or expense
reduction programs will be successful,  or that any additional financing will be
available to the Company, or, if available, that the terms will be satisfactory.
If the  Company is not  successful  in raising  additional  capital or unable to
generate  sufficient cash flows to meet obligations as they come due and can not
renegotiate  payment  terms of debt coming due in April  through June 2004,  the
Company's  financial  condition and results of operations will be materially and
adversely  affected  and the Company may not be able to continue to operate as a
going concern.  If the Company is successful in raising  additional  capital but
fails to  increase  its  revenue or reduce  expenses,  the  Company's  financial
condition and results of operations may be materially and adversely affected and
the  Company  may not be able to  continue  as a going  concern.  The  Company's
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability and  reclassification of recorded asset amounts or to amounts and
classification  of  liabilities  that may be  necessary  should  we be unable to
continue as a going concern.



                                      -10-



<PAGE>


ITEM 3. CONTROLS AND PROCEDURES

     An evaluation was performed, as of December 31, 2003, under the supervision
and with the  participation  of our President,  who is also the Chief  Executive
Officer, and our Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure  controls and procedures  Based on such  evaluation,
these persons have concluded that our  disclosure  controls and procedures  were
effective as of December 31, 2003. There have been no significant changes in our
internal  controls  or in other  factors  that  could  significantly  affect our
internal controls subsequent to December 31, 2003.

PART II

ITEM 1.  LEGAL PROCEEDINGS

         Please see Note 4 to the consolidated financial statements

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     Subsequent to quarter end, on February 3, 2004, the Company entered into an
Amended and  Restated  Promissory  Note for a total of $500,000  (the  "Restated
Note") with Stephen Garchik,  Trustee ("Garchik") and simultaneously  executed a
related stock option  agreement and a registration  rights agreement in favor of
Garchik.  The Restated  Note is comprised of $250,000  previously  loaned to the
Company in February  2003 and  originally  due in April 2004,  and an additional
$250,000, which was loaned to the Company on February 3, 2004.

     The stock  option  agreement  provides  Garchik  with  ten-year  options to
acquire 500,000 shares of the Company's  common stock at $0.25 per share and all
such options vested upon grant and the registration  rights  agreement  provides
Garchik with certain piggyback registration rights in the event that the Company
files a registration  statement.  The Restated Note bears interest at Prime,  as
published  in the Wall Street  Journal  (4% as of March 1,  2004),  plus one and
principle  and all  accrued  interest is due June 30,  2004.  (See Note 8 to the
consolidated financial statements)

     The issuances of the Note and the stock option  agreement  were exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933 as amended.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                  None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None

ITEM 5.  OTHER INFORMATION

                  None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

     10.8 Sublease  for  premises  by and  between  the  Company  as tenant  and
          ProHealth Corp. as landlord

     31.1 Certification  of  the  Chief  Executive   Officer  required  by  rule
          13a-14(a) or rule 15d-14(a)

     31.2 Certification  of  the  Chief  Financial   Officer  required  by  rule
          13a-14(a) or rule 15d-14(a)

     32.1 Chief Executive Officer  Certification  Pursuant to 18 U.S.C.  Section
          1350, as Adopted Pursuant to Section 206 of the  Sarbanes-Oxley Act of
          2002

     32.2 Chief Financial Officer  Certification  Pursuant to 18 U.S.C.  Section
          1350, as Adopted Pursuant to Section 206 of the  Sarbanes-Oxley Act of
          2002



(B)      REPORTS ON FORM 8-K

                         NONE


                                      -11-



<PAGE>





                                    SIGNATURES

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

CRITICAL HOME CARE, INC.
March 9, 2004

         By:     /s/ David S. Bensol                /s/ Eric S. Yonenson
                 -------------------               ---------------------
                 David S. Bensol                   Eric S. Yonenson
                 Chief Executive Officer           Chief Financial Officer




















                                      -12-