<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY
         PERIOD ENDED SEPTEMBER 30, 2001, OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
         PERIOD FROM            TO          .
                     ----------    ---------


                         Commission file number 0-25777
                                                -------

                  TENDER LOVING CARE HEALTH CARE SERVICES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                   <C>
                DELAWARE                                           11-3476656
     -------------------------------                  ------------------------------------
     (State or other jurisdiction of                  (I.R.S. Employer Identification No.)
      incorporation or organization)


1983 MARCUS AVENUE, LAKE SUCCESS, NEW YORK                           11042
------------------------------------------                         ----------
 (Address of principal executive offices)                          (Zip Code)
</TABLE>


                                 (516) 358-1000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


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   .
                                      ---    ---

The number of shares of common stock outstanding on November 13, 2001 was
11,819,653.


                                                                               1
<PAGE>


         TENDER LOVING CARE HEALTH CARE SERVICES, INC. AND SUBSIDIARIES


                                      INDEX
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                          PAGE NO.
                                                                          --------
<S>                  <C>                                                  <C>
PART I.              FINANCIAL INFORMATION

ITEM 1.              FINANCIAL STATEMENTS

                     Condensed Consolidated Balance Sheets -
                         September 30, 2001 and February 28, 2001                3

                     Condensed Statements of Consolidated
                         Operations - Three and Six months ended
                         September 30, 2001 and 2000                             4

                     Condensed Statements of Consolidated Cash
                         Flows - Six months ended September 30,
                         2001 and 2000                                           5

                     Notes to Condensed Consolidated Financial
                     Statements                                                6-9

ITEM 2.              MANAGEMENT'S DISCUSSION AND
                     ANALYSIS OF FINANCIAL CONDITION AND
                     RESULTS OF OPERATIONS                                   10-11

                         Forward-Looking Statements                          12-14

PART II.             OTHER INFORMATION

ITEM 6.              EXHIBITS AND REPORTS ON FORM 8-K                        15-16
</TABLE>




                                                                               2
<PAGE>


PART I.  FINANCIAL INFORMATION

TENDER LOVING CARE HEALTH CARE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                            (UNAUDITED)
                                                           SEPTEMBER 30,     FEBRUARY 28,
                                                               2001              2001
                                                           -------------     ------------
<S>                                                        <C>               <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                 $   6,045         $   4,955
   Accounts receivable, net of allowance for doubtful
      accounts of $10,400 and $10,500, respectively             70,438            71,425
   Prepaid expenses and other current assets                     2,737             2,860
                                                             ---------         ---------
Total current assets                                            79,220            79,240

FIXED ASSETS, net of accumulated
   depreciation of $9,706 and $8,434, respectively              15,029            16,338
GOODWILL, net of accumulated
   amortization of $9,123 and $8,789, respectively               4,974             5,307
OTHER ASSETS                                                     1,890             2,139
                                                             ---------         ---------
TOTAL                                                        $ 101,113         $ 103,024
                                                             =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable and accrued expense                      $  21,241         $  21,015
   Accrued payroll and payroll related expenses                 19,375            21,732
   Current portion of Medicare and Medicaid
      liabilities                                               12,909            10,713
   Current portion of long-term debt                            85,946            72,924
                                                             ---------         ---------
Total current liabilities                                      139,471           126,384

LONG-TERM DEBT                                                   7,996             9,736
LONG-TERM MEDICARE AND MEDICAID
   LIABILITIES                                                  40,139            46,357
OTHER LIABILITIES                                                2,416             2,531
                                                             ---------         ---------
TOTAL LIABILITIES                                              190,022           185,008
                                                             ---------         ---------

STOCKHOLDERS' EQUITY (DEFICIT):
   Common stock - $.01 par value;
      50,000,000 shares authorized;
      11,809,653 outstanding at September 30, 2001
      and February 28, 2001                                        118               118
   Additional paid-in capital                                   50,981            50,981
   Accumulated deficit                                        (140,008)         (133,083)
                                                             ---------         ---------
Total stockholders' equity (deficit)                           (88,909)          (81,984)
                                                             ---------         ---------
TOTAL                                                        $ 101,113         $ 103,024
                                                             =========         =========
</TABLE>


                                                                               3
<PAGE>


TENDER LOVING CARE HEALTH CARE SERVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                        Three Months Ended                  Six Months Ended
                                                           September 30,                      September 30,
                                                    ---------------------------         ---------------------------
                                                       2001             2000              2001              2000
                                                    ---------         ---------         ---------         ---------
<S>                                                 <C>               <C>               <C>               <C>

TOTAL REVENUES                                      $  65,067         $  56,198         $ 130,811         $ 112,858
                                                    ---------         ---------         ---------         ---------

OPERATING EXPENSES:
   Service costs                                       35,117            33,979            68,786            69,117
   General and administrative costs                    28,340            22,770            57,083            44,816
                                                    ---------         ---------         ---------         ---------
Total operating expenses                               63,457            56,749           125,869           113,933
                                                    ---------         ---------         ---------         ---------

INCOME (LOSS) BEFORE INTEREST, DEPRECIATION,
   AMORTIZATION AND INCOME TAXES                        1,610              (551)            4,942            (1,075)
                                                    ---------         ---------         ---------         ---------

INTEREST AND OTHER EXPENSES:
   Interest expense                                     4,672             3,323             9,290             6,629
   Interest (income)                                      (55)             (129)             (118)             (364)
   Depreciation and amortization                        1,103             1,130             2,198             2,252
   Other (income) expense, net                            308               (93)             (236)             (168)
                                                    ---------         ---------         ---------         ---------
TOTAL INTEREST AND OTHER EXPENSE                        6,028             4,231            11,134             8,349
                                                    ---------         ---------         ---------         ---------

(LOSS) BEFORE INCOME TAXES                             (4,418)           (4,782)           (6,192)           (9,424)

PROVISION FOR INCOME TAXES                                 25                25                50                50
                                                    ---------         ---------         ---------         ---------

NET (LOSS)                                          $  (4,443)        $  (4,807)        $  (6,242)        $  (9,474)
                                                    ---------         ---------         ---------         ---------

INCOME (LOSS) PER COMMON SHARE-
   BASIC                                            $   (0.38)        $   (0.41)        $   (0.53)        $   (0.80)
                                                    =========         =========         =========         =========

INCOME (LOSS) PER COMMON SHARE-
   DILUTED                                          $   (0.38)        $   (0.41)        $   (0.53)        $   (0.80)
                                                    =========         =========         =========         =========

WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING:
   BASIC                                               11,810            11,810            11,810            11,810
                                                    =========         =========         =========         =========
   DILUTED                                             11,810            11,810            11,810            11,810
                                                    =========         =========         =========         =========
</TABLE>


            See notes to condensed consolidated financial statements.


                                                                               4
<PAGE>


TENDER LOVING CARE HEALTH CARE SERVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED
                                                              SEPTEMBER 30,
                                                        -------------------------
                                                          2001             2000
                                                        --------         --------
<S>                                                     <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)                                              $ (6,242)        $ (9,474)
Adjustments to reconcile net (loss)
   to net cash used in operations:
   Depreciation and amortization of fixed assets           1,912            1,928
   Amortization of goodwill and intangibles                  286              324
   Allowance for doubtful accounts                          (218)             177
   (Gain) on sale of assets                                   --              (23)
   Decrease in other liabilities                            (123)            (270)
Change in operating assets and liabilities:
   Accounts receivable                                     3,488             (537)
   Accrued payroll and payroll related expenses           (1,798)          (1,842)
   Prepaid expenses and other current assets              (1,203)             638
   Accounts payable and accrued expenses                     (13)          (5,556)
   Decrease in Medicare and Medicaid liabilities          (2,913)          (2,885)
   Other assets                                              202              186
                                                        --------         --------
Net cash used in operating activities                     (6,622)         (17,334)
                                                        --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets                                  --               25
Purchase of fixed assets                                    (865)            (574)
                                                        --------         --------
Net cash used in investing activities                       (865)            (549)
                                                        --------         --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under secured credit facility                  11,956           10,570
Proceeds from note payable                                    --            1,000
Payments of notes payable and other long
   term liabilities                                       (3,551)          (1,953)
                                                        --------         --------
Net cash provided by financing activities                  8,405            9,617
                                                        --------         --------

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                          918           (8,266)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             5,127            9,299
                                                        --------         --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                $  6,045         $  1,033
                                                        ========         ========

SUPPLEMENTAL DATA:
Cash paid (received) for:
Interest                                                $  8,567         $  7,005
                                                        ========         ========
Income taxes, net                                       $     53         $    (36)
                                                        ========         ========
</TABLE>



                                                                               5
<PAGE>


TENDER LOVING CARE HEALTH CARE SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.       FINANCIAL STATEMENTS - Basis of Presentation: Tender Loving Care Health
         Care Services, Inc. ("TLCS" or "the Company") is a leading provider of
         home health care services with 88 locations in 22 states and the
         District of Columbia. The accompanying unaudited condensed consolidated
         financial statements reflect the results of operations of TLCS and its
         related financial position and cash flows. In the opinion of the
         Company, the accompanying unaudited condensed consolidated financial
         statements contain all adjustments (consisting of only normal and
         recurring accruals) necessary to present fairly the financial position
         of the Company and its subsidiaries as of September 30, 2001 and
         February 28, 2001 and the results of operations for the three and six
         months ended September 30, 2001 and 2000 and the cash flows for the six
         months ended September 30, 2001 and 2000. The results for the three and
         six months ended September 30, 2001 and 2000 are not necessarily
         indicative of the results for an entire year. It is suggested that
         these condensed consolidated financial statements be read in
         conjunction with the Company's audited financial statements as of
         February 28, 2001 and for the fiscal year then ended which are included
         in the Company's Annual Report on Form 10-K/A.

         Change in Reporting Period: During the fourth quarter of the fiscal
         year ended February 28, 2001, the Company's Board of Directors voted
         unanimously to change the Company's fiscal year-end to March 31 from
         February 28/29.

         The accompanying unaudited condensed consolidated financial statements
         reflect results of operations for the three and six months ended
         September 30, 2001. The results of operations for the three and six
         months ended September 30, 2001 ("the 2001 period") are comparable to
         the results of operations for the three and six months ended August 31,
         2000 ("the 2000 period"). The financial information for the comparable
         prior year period is not distorted by use of the quarterly period which
         ended on August 31, 2000. The Registrant does not believe that seasonal
         or other factors exist in any material respect that could affect the
         comparability of information or trends reflected. Accordingly, the
         Registrant has not undertaken a recasting of quarterly information for
         its prior year.

         The net loss of $683 thousand for the one month period ended March 31,
         2001 was recorded directly to Stockholders' Equity (Deficit) as a
         reduction to retained earnings. The following table presents the
         Company's condensed consolidated financial information for the one
         month period ended March 31, 2001 (dollars in thousands):




                                                                               6
<PAGE>


<TABLE>
<CAPTION>
                                                                                      One Month Ended
                                                                                      March 31, 2001
                                                                                      ---------------
         <S>                                                                          <C>
         Revenue                                                                         $   21,813
                                                                                         ==========

         Income before interest, depreciation, amortization and
            income taxes                                                                 $    1,140
                                                                                         ==========

         Interest and other expenses                                                     $    1,823
                                                                                         ==========

         Net (loss)                                                                      $     (683)
                                                                                         ==========
</TABLE>

         The following table presents the Company's condensed consolidated cash
         flow information for the one month period ended March 31, 2001:
<TABLE>
<CAPTION>
                                                                                      One Month Ended
                                                                                      March 31, 2001
                                                                                      ---------------
         <S>                                                                          <C>
         Net cash used in operating activities                                           $   (2,443)

         Net cash used in investing activities                                                  (59)

         Net cash provided by financing activities                                            2,674
                                                                                         ----------

         Net increase in cash and cash equivalents                                              172

         Cash and cash equivalents, beginning of period
                                                                                              4,955
                                                                                         ----------
         Cash and cash equivalents, end of period                                        $    5,127
                                                                                         ==========
</TABLE>

2.       EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE - The
         calculation of basic and diluted earnings (loss) per share was
         calculated for all periods in accordance with the requirements of
         Statement of Financial Accounting Standards No. 128, "Earnings per
         Share."

         The shares used in computing basic and diluted earnings (loss) per
         share were 11,809,653 shares for the three and six months ended
         September 30, 2001 and 2000. The calculations of earnings (loss) per
         share reflect the weighted average number of shares outstanding.

3.       MEDICARE REPAYMENT PLAN - The Company has obtained an amendment to its
         repayment agreement ("the Agreement") from the Federal Centers for
         Medicare and Medicaid Services ("CMS") (formerly the Federal Health
         Care Financing Administration) for the repayment of all excess PIP
         amounts and all audit liabilities relative to periods through February
         28, 2001. The Agreement, as amended, revised the terms of a prior
         repayment agreement reached in December 1999, resulting in reduced
         monthly payments in earlier periods and an extension of the maturity
         date of the repayment plan. The Agreement, as amended, provides for
         aggregate monthly payments of principal and interest from September
         2001 through May 2005. The required monthly payments are $750 thousand
         from September 2001 through February 2002, $1.0 million from



                                                                               7
<PAGE>


         March 2002 through November 2002, $1.5 million from December 2002
         through May 2004 and $1.75 million from September 2004 through April
         2005. Any remaining liabilities as of May 2005 for periods covered by
         the Agreement will then be paid in a balloon payment, the amount of
         which is to be determined no later than March 1, 2005. Any overpayments
         or audit liabilities that are successfully appealed by the Company will
         be subtracted from the total amounts owed. Interest is accrued from the
         date of each assessment at the government rate of interest (currently
         at 13.75% per annum). United Government Services LLC ("UGS"), a fiscal
         intermediary for CMS, collects amounts due under the repayment plan by
         offsetting against current remittances due to the Company.

4.       CONTINGENCIES - On December 21, 1998, H.L.N. Corporation, Frontlines
         Homecare, Inc., E.T.H.L., Inc., Phoenix Homelife Nursing, Inc., and
         Pacific Rim Health Care Services, Inc., former licensees (franchisees)
         of the Company for the territory comprising certain counties in and
         around Los Angeles, California, and their holding company, instituted
         an action against the Company subsidiaries, Staff Builders, Inc., Staff
         Builders International, Inc. and Staff Builders Services, Inc., and
         certain executive officers of the Company in the Superior Court for the
         State of California, County of Los Angeles. The action was removed to
         United States District Court for the Central District of California on
         December 22, 1998. Plaintiffs filed a First and Second Amended
         Complaint in the Central District on January 8, 1999 and September 1,
         1999, respectively, to challenge the termination of the four franchise
         agreements between the Company and certain of the named plaintiffs. The
         plaintiffs are seeking damages for violations of California franchise
         law, breach of contract, fraud and deceit, unfair trade practices,
         claims under the RICO, negligence, intentional interference with
         contractual rights, declaratory and injunctive relief and a request for
         an accounting. The plaintiffs have not specified the amount of damages
         they are seeking. Pursuant to the Company's Motion for Summary
         Judgment, the court granted all of the individual defendants' Motion
         for Summary Judgment dismissing all causes of action against these
         individuals. In addition, the court dismissed the RICO, fraud,
         negligence, California franchise investment law and implied covenant of
         good faith and fair dealing claims. The only remaining triable issues
         in the case are those relating to breach of contract, unfair business
         practices and wrongful termination under the California Franchise Law.

         The Company is a defendant in several civil actions which are routine
         and incidental to its business. The Company purchases insurance in such
         amounts which management believes to be reasonable and prudent.

         Although the Company cannot estimate the ultimate cost of its open
         legal matters with precision, it has recorded a loss accrual at
         September 30, 2001 and February 28, 2001 for the aggregate, estimated
         amount to litigate or resolve such matters. In the opinion of
         management, the outcome of pending litigation will not have a material
         adverse effect on the Company's consolidated financial position or
         results of operations.



                                                                               8
<PAGE>


5.       SALE OF THE COMPANY - On October 18, 2001, the Company entered into an
         Agreement and Plan of Merger and Reorganization with e-MedSoft.com
         ("Med Diversified") and an acquisition subsidiary of Med Diversified
         ("Purchaser") pursuant to which the Purchaser will be merged into the
         Company (the "Merger"). In the Merger, each share of Company common
         stock outstanding immediately prior to the Merger will be converted
         into the right to receive $1.00 per share. In connection with the
         Merger, the Purchaser has commenced a cash tender offer (the "Offer")
         to purchase all of the issued and outstanding shares of the Company
         common stock at a price of $1.00 per share, net to the seller in cash.
         Med Diversified is a provider of a wide range of health care products
         and home health care services. Upon completion of the Merger, the
         Company will become a wholly-owned subsidiary of Med Diversified,
         maintaining its headquarters in Lake Success, New York led by the
         current TLCS management team.

         In accordance with applicable requirements of the Federal Securities
         and Exchange Commission, the tender offer which commenced on October
         29, 2001 will be open to all holders of TLCS common stock for 20
         business days and will expire on November 27, 2001, unless terminated
         or extended.

         In connection with the Merger, the Company, Med Diversified and the
         Purchaser have entered into a Stock Option Agreement. Pursuant to the
         Stock Option Agreement the Company has granted an option to the
         Purchaser, exercisable if more than 75% but less than 90% of the
         Company's shares have been tendered in the Offer, to purchase, at $1.00
         per share, a number of shares of Company common stock which, when added
         to the number of shares of Company common stock owned by Purchaser and
         Med Diversified, will constitute 90% of the outstanding shares of
         Company common stock. If Med Diversified exercises this option, by
         acquiring 90% of the outstanding shares of the Company common stock it
         can complete the Merger without a shareholder vote. If Med Diversified
         cannot exercise its "top-up option", the final Merger would require the
         approval of TLCS' stockholders, which would be assured if Med
         Diversified acquires at least a majority of the outstanding shares in
         the tender offer. Also in connection with the Merger, Med Diversified
         and certain directors and executive officers of TLCS have entered into
         a "Shareholder Agreement" pursuant to which such directors and officers
         have agreed to tender their shares of TLCS common stock in the Offer
         and to ultimately vote their shares in favor of the Merger.





                                                                               9
<PAGE>


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

         The following discussion and analysis provides information which
         management believes is relevant to an assessment and understanding of
         the Company's results of operations and financial condition. This
         discussion should be read in conjunction with the Condensed
         Consolidated Financial Statements appearing in Item 1.

         RESULTS OF OPERATIONS

         Total revenues increased by $8.9 million, or 15.8%, to $65.1 million
         for the three months ended September 30, 2001 from $56.2 million for
         the three months ended September 30, 2000. For the six months ended
         September 30, 2001 ("the 2001 period"), total revenues increased by
         $18.0 million, or 15.9%, to $130.8 million from $112.8 million for the
         six months ended September 30, 2000 ("the 2000 period"). The increase
         in the Company's revenues is primarily due to an increase in the
         Company's Medicare revenues of $29.5 million to $84.4 million in the
         2001 period from $54.9 million in the 2000 period. This growth is
         attributable to an increase in patient admissions as well as changes in
         the Medicare payment methodology under a Prospective Payment System
         ("PPS") which became effective October 1, 2000 for providers of
         Medicare home health services. Offsetting this increase is a decrease
         in non-Medicare revenue resulting from the Company's change in revenue
         mix by eliminating business with certain payor sources that represented
         minimal profits or poor cash flow.

         The following are the Company's service revenues by payment source:

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED                SIX MONTHS ENDED
                                                       SEPTEMBER 30,                    SEPTEMBER 30,
                                                   --------------------            ----------------------
                                                   2001            2000            2001              2000
                                                   ----            ----            ----              ----
        <S>                                       <C>             <C>             <C>               <C>
        Medicare                                   64.5%           49.2%           64.5%             48.6%
        Medicaid                                   21.5            26.8            21.2              26.7
        Insurance, contracts and
        individuals                                13.6            23.8            13.8              24.1
        Other                                       0.4             0.2             0.5               0.6
                                                  -----           -----           -----             -----
        Total                                     100.0%          100.0%          100.0%            100.0%
                                                  =====           =====           =====             =====
</TABLE>

         Direct service costs were 54.0% and 60.5% of revenues for the three
         months ended September 30, 2001 and 2000 and 52.6% and 61.2% for the
         six months ended September 30, 2001 and 2000, respectively. The
         decrease in operating costs as a percentage of service revenues was
         primarily due to higher Medicare rates paid for services under PPS as
         compared to cost reimbursement previously received under the Medicare
         Interim Payment System ("IPS") which was in effect from March 1, 1998
         until September 30, 2000. Additionally, the decreases in operating
         costs as a percentage of service revenues results from a change in
         revenue mix, as the Company complies with its objective to eliminate
         unprofitable and low margin business.


                                                                              10
<PAGE>


         General and administrative costs were $28.3 million and $22.8 million
         for the three months ended September 30, 2001 and 2000 and $57.1
         million and $44.8 million, or 43.6% and 39.7% of revenues in the 2001
         and 2000 periods, respectively. The increase in general and
         administrative costs was primarily due to increased administrative
         salary costs, related in part to our sales force growth, and licensee
         distribution expense which results from higher gross margins.

         Interest expense was approximately $4.7 million and $9.3 million in the
         three and six months ended September 30, 2001 as compared to $3.3
         million and $6.6 million in the three and six months ended September
         30, 2000. The increases in interest expense in the current year periods
         were primarily due to the increase in the level of borrowings under the
         Company's accounts receivable purchase program.

         LIQUIDITY AND CAPITAL RESOURCES
         The Company finances its operations through an accounts receivable
         purchase program with an entity which provides health care accounts
         receivable financing. Under the program, the Company may sell to an
         affiliate of such entity up to $85 million of the Company's accounts
         receivable so long as the receivables meet certain qualitative and
         quantitative criteria and the Company is in compliance with the terms
         of the agreement.

         The balance of amounts outstanding under the Company's secured
         financing facility increased primarily as a result of the increase in
         the average accounts receivable balances outstanding. The Company is
         taking significant steps to reduce the time it takes to collect
         accounts receivable including the establishment of de-centralized
         billing and service centers, changes in revenue mix to more timely
         payors and expansion of a comprehensive, Company-wide quality assurance
         program to maximize the clarity and accuracy of all clinical and
         financial billing data. During the three months ended September 30,
         2001, the Company decreased its net trade accounts receivable by $5.5
         million. The Company's net trade accounts receivable were $70.4 million
         at September 30, 2001 as compared to $71.4 million at February 28,
         2001.

         Management continues to pursue various strategies including, but not
         limited to, obtaining additional financing, cost reductions, change in
         revenue mix and negotiating with new and existing payor sources. The
         Company believes that cash provided from operations and its existing
         financing facility provides adequate funds for the Company's current
         level of operations and debt obligations for at least the next twelve
         months.

         RECENTLY ISSUED ACCOUNTING STANDARDS
         In June 2001, the Financial Accounting Standards Board issued SFAS No.
         141, "Business Combinations" (effective July 1, 2001) and SFAS No. 142,
         "Goodwill and Other Intangible Assets" (effective December 15, 2001).
         SFAS No. 141 prohibits pooling-of-interests accounting for
         acquisitions. SFAS No. 142 specifies that goodwill and some intangible
         assets will no longer be amortized but instead will be subject to
         periodic impairment testing. The effect of the SFAS No. 142
         pronouncement on the Company's financial results is currently being
         evaluated.


                                                                              11
<PAGE>


         FORWARD-LOOKING STATEMENTS
         Certain statements in this report on Form 10-Q constitute
         "forward-looking statements" within the meaning of the Private
         Securities Litigation Reform Act of 1995. These statements are
         typically identified by the inclusion of phrases such as "the Company
         believes" and other phrases of similar meaning. These forward-looking
         statements are based on the Company's current expectations. Such
         forward-looking statements involve known and unknown risks,
         uncertainties, and other factors that may cause the actual results,
         performance or achievements of the Company to be materially different
         from any future results, performance or achievements expressed or
         implied by such forward-looking statements. The potential risks and
         uncertainties which could cause actual results to differ materially
         from the Company's expectations include the impact of further changes
         in the Medicare reimbursement system, including any changes to the
         current prospective payment system; government regulation; health care
         reform; pricing pressures from third-party payors, including managed
         care organizations; retroactive Medicare audit adjustments; and changes
         in laws and interpretations of laws or regulations relating to the
         health care industry.

         GOVERNMENT REGULATION. As a home health care provider, the Company is
         subject to extensive and changing state and Federal regulations
         relating to the licensing and certification of its offices and the sale
         and delivery of its products and services. The imposition of more
         stringent regulatory requirements or the denial or revocation of any
         license or permit necessary for the Company to operate in a particular
         market could have a material adverse effect on the Company's
         operations. The Federal government and Medicare fiscal intermediaries
         have become more vigilant in their review of Medicare reimbursements to
         home health care providers generally, and are preparing to conduct
         reviews of a greater number of health care claims with an increased
         focus on clinical procedures and related documentation. State and
         Federal enforcement officials also have increased their scrutiny of
         providers and are applying an increasingly expansive view of activities
         they believe to be fraudulent or abusive. Changes in the law and
         regulations as well as new interpretations enforced by the relevant
         regulatory agencies could have a material adverse effect on the
         Company's operations and the cost of doing business.

         Additionally, third-party payors have generally sought to contain costs
         by reducing payments and/or deferring payments to providers. Continued
         cost reduction efforts by third-party payors could adversely affect the
         Company's cash flow and results of operations.

         THIRD-PARTY REIMBURSEMENT AND MANAGED CARE. Because the Company is
         reimbursed for its services primarily by the Medicare/Medicaid
         programs, insurance companies, managed care companies and other
         third-party payors, the implementation of alternative payment
         methodologies for any of these payors could have an impact on revenues
         and profit margins.

         HEALTH CARE REFORM. A new prospective payment system ("PPS") became
         effective for all home health care agencies on October 1, 2000. Home
         health care providers have an opportunity to generate profits under PPS
         if costs are contained under the per-episode reimbursement amounts.
         However, unforeseen changes in health care reimbursement regulations
         could adversely affect the



                                                                              12
<PAGE>


         Company's ability to generate a profit under PPS. In addition, because
         PPS requires significant changes in billing methodology, the Company's
         systems may not be able to adapt immediately or sufficiently to all
         such changes. Further, Medicare fiscal intermediaries are implementing
         new systems which may result in slower payments than otherwise
         anticipated.

         As Congress and state reimbursement entities assess alternative health
         care delivery systems and payment methodologies, the Company cannot
         predict which additional reforms may be adopted or what impact they may
         have on the Company. Additionally, uncertainties relating to the nature
         and outcomes of health care reforms have also generated numerous
         realignments, combinations and consolidations in the health care
         industry which may also have an adverse impact on the Company's
         business strategy and results of operations.

         SALE OF THE COMPANY. On October 18, 2001, the Company entered into an
         Agreement and Plan of Merger and Reorganization with e-MedSoft.com
         ("Med Diversified") and an acquisition subsidiary of Med Diversified
         ("Purchaser") pursuant to which the Purchaser will be merged into the
         Company (the "Merger"). In the Merger, each share of Company common
         stock outstanding immediately prior to the Merger will be converted
         into the right to receive $1.00 per share. In connection with the
         Merger, the Purchaser has commenced a cash tender offer (the "Offer")
         to purchase all of the issued and outstanding shares of the Company
         common stock at a price of $1.00 per share, net to the seller in cash.
         Med Diversified is a provider of a wide range of health care products
         and home health care services. Upon completion of the Merger, the
         Company will become a wholly-owned subsidiary of Med Diversified,
         maintaining its headquarters in Lake Success, New York led by the
         current TLCS management team. In the event that Med Diversified
         completes the Offer, but the Merger is not completed, there may not be
         a public trading market for the shares of the Company.

         BUSINESS CONDITIONS. The Company must continue to establish and
         maintain close working relationships with physicians and physician
         groups, managed care organizations, hospitals, clinics, nursing homes,
         social service agencies and other health care providers. There can be
         no assurance that the Company will continue to establish or maintain
         such relationships. The Company expects additional competition will
         develop in future periods given the increasing market demand for the
         type of services offered.

         ATTRACTION AND RETENTION OF LICENSEES AND EMPLOYEES. Maintaining
         quality caregivers, managers, branch administrators and licensees will
         play a significant part in the future success of the Company. The
         Company's professional nurses and other health care personnel are key
         to the continued provision of quality care to the Company's patients.
         The possible inability to attract and retain qualified nursing
         management and sufficient numbers of credentialed health care
         professionals and para-professionals as well as office management and
         information technology personnel could adversely affect the Company's
         operations and quality of service.



                                                                              13
<PAGE>


         SATISFACTORY FINANCING. Proceeds from the Company's financing program
         provided some working capital and the ability to pay portions of
         certain accumulated indebtedness. Under the financing program, the
         Company sells its trade accounts receivable. However, the financing
         entity is not obligated to continually purchase such receivables. The
         Company is limited to selling up to $85 million of eligible accounts
         receivable under the financing facility and such facility expires on
         December 31, 2002. The ability of the Company to grow will be dependent
         on continuing to have satisfactory financing and reducing the time it
         takes to collect its accounts receivable.

         DEFERRED PAYMENT ARRANGEMENTS. The Company has negotiated deferred
         payment terms for certain of its Medicare and Medicaid liabilities and
         has made arrangements with many of its other creditors to either reduce
         its liability to them, defer and/or extend payment of the liability, or
         a combination of several of these steps. Management cannot provide
         assurance the Company's vendors will continue to extend credit.
         Pursuant to the Company's agreement with the Federal Centers for
         Medicare and Medicaid Services ("CMS") (formerly the Federal Health
         Care Financing Administration) to repay accumulated Medicare
         liabilities, the Company will be required to pay excess periodic
         interim payments received and Medicare audit liabilities on a monthly
         basis through May 2005. United Government Services LLC ("UGS"), a
         fiscal intermediary for CMS, collects amounts due under the repayment
         plan by offsetting against current remittances due to the Company. If
         no Medicare accounts receivable are available for offset as amounts
         become due under the repayment plan, then all amounts owed pursuant to
         this repayment plan may become immediately due and payable. The Company
         must generate sufficient cash to meet these obligations.





                                                                              14
<PAGE>


PART II.    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

On December 21, 1998, H.L.N. Corporation, Frontlines Homecare, Inc., E.T.H.L.,
Inc., Phoenix Homelife Nursing, Inc., and Pacific Rim Health Care Services,
Inc., former licensees (franchisees) of the Company for the territory comprising
certain counties in and around Los Angeles, California, and their holding
company, instituted an action against the Company subsidiaries, Staff Builders,
Inc., Staff Builders International, Inc. and Staff Builders Services, Inc., and
certain executive officers of the Company in the Superior Court for the State of
California, County of Los Angeles. The action was removed to United States
District Court for the Central District of California on December 22, 1998.
Plaintiffs filed a First and Second Amended Complaint in the Central District on
January 8, 1999 and September 1, 1999, respectively, to challenge the
termination of the four franchise agreements between the Company and certain of
the named plaintiffs. The plaintiffs are seeking damages for violations of
California franchise law, breach of contract, fraud and deceit, unfair trade
practices, claims under the RICO, negligence, intentional interference with
contractual rights, declaratory and injunctive relief and a request for an
accounting. The plaintiffs have not specified the amount of damages they are
seeking. Pursuant to the Company's Motion for Summary Judgment, the court
granted all of the individual defendants' Motion for Summary Judgment dismissing
all causes of action against these individuals. In addition, the court dismissed
the RICO, fraud, negligence, California franchise investment law and implied
covenant of good faith and fair dealing claims. The only remaining triable
issues in the case are those relating to breach of contract, unfair business
practices and wrongful termination under the California Franchise Law.

The Company is a defendant in several civil actions which are routine and
incidental to its business. The Company purchases insurance in such amounts
which management believes to be reasonable and prudent.


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(A)    EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.                Description
-----------                -----------
<S>           <C>
    3.1       Amended and Restated Certificate of Incorporation of the Company, filed
              with the Secretary of State of Delaware on October 14, 1999. (A)

    3.2       Amended and Restated By-laws of the Company. (A)

    2.1       Agreement and Plan of Merger and Reorganization, dated as of October
              18, 2001, by and among e-MedSoft.com, TLC Acquisition Corporation and the
              Company. (B)
</TABLE>


                                                                              15
<PAGE>


<TABLE>
<CAPTION>
Exhibit No.                Description
-----------                -----------
<S>           <C>
   10.1       Shareholder Agreement, dated as of October 18, 2001, by and among e-
              MedSoft.com, TLC Acquisition Corporation, Stephen Savitsky, Dale R.
              Clift, David Savitsky, Willard T. Derr, Renee J. Silver, Sandra Parshall,
              Jonathan Halpert, PhD., and Bernard J. Firestone, PhD. (B)

   10.2       Stock Option Agreement, dated as of October 18, 2001, by and among
              e-MedSoft.com, TLC Acquisition Corporation and the Company. (B)

   10.3       Employment Agreement, dated as of October 18, 2001, between the Company
              and Stephen Savitsky. (B)

   10.4       Employment Agreement, dated as of October 18, 2001, between the Company
              and Dale R. Clift. (B)

   10.5       Employment Agreement, dated as of October 18, 2001, between the Company
              and David Savitsky. (B)

   10.6       Agreement, dated October 18, 2001, by and among the Company, Stephen
              Savitsky, Dale R. Clift and David Savitsky. (B)

   10.7       Confidentiality Agreement, dated September 25, 2001, between
              e-MedSoft.com and the Company. (C)
</TABLE>

NOTES TO EXHIBITS

(A)      Incorporated by reference to the Company's Form 10-Q (File No. 0-25777)
         filed with the Commission on October 20, 1999.

(B)      Incorporated by reference to the Company's Form 8-K (File No. 0-25777)
         filed with the Commission on October 25, 2001.

(C)      Incorporated by reference to Schedule TO filed by TLC Acquisition
         Corporation and e-MedSoft.com/Med Diversified on October 29, 2001.


(B)      REPORTS ON FORM 8-K

During the quarter ended September 30, 2001 no reports on Form 8-K were filed by
the Registrant.

On October 25, 2001, the Registrant filed a Form 8-K relative to the sale of the
Company and execution of the Agreement and Plan of Merger and Reorganization
with e-MedSoft.com/Med Diversified.






                                                                              16
<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.



                                            TENDER LOVING CARE HEALTH CARE
                                              SERVICES, INC.

           Dated: November 19, 2001         By: /s/ Stephen Savitsky
                                               ---------------------------------
                                               Stephen Savitsky
                                               Chairman of the Board,
                                               Chief Executive Officer,
                                               (Principal Executive Officer) and
                                               Director

           Dated: November 19, 2001         By: /s/ Dale R. Clift
                                               ---------------------------------
                                               Dale R. Clift
                                               President and Chief Operating
                                               Officer

           Dated: November 19, 2001         By: /s/ Willard T. Derr
                                               ---------------------------------
                                               Willard T. Derr
                                               Chief Financial Officer,
                                               Sr. Vice President, Corporate
                                               Controller and Treasurer
                                               (Principal Financial and
                                               Accounting Officer)







                                                                              17