UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549


                                   FORM 10-QSB/A


(Mark  One)

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

               For  the  quarterly  period  ended  March  31,  1999
                                                  -----------------

       TRANSITION  REPORT  UNDER  SECTION  13  OR  15(d)  OF THE EXCHANGE ACT
 ---
               For  the  transition  period  from  ________  to  ________

               COMMISSIONS  FILE  NUMBER:  000-24807

                            CORECARE  SYSTEMS,  INC.
                            ------------------------
     (Name  of  small  business  issuer  as  specified  in  its  charter)

                Delaware                               23-2840367
           -------------------                        -------------
        (State of jurisdiction of                   (I.R.S. Employer
      incorporation or organization)               Identification  No.)

         c/o Kirkbride Center, 111 North 49th St., Phila., PA 19139
         ----------------------------------------------------------
                (Address  of  principal  executive  offices)

                               (215)  471-2600
                            ---------------------
                          (Issuer's Telephone Number)

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 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  No  X
                                                                            ---

           As of April 15, 1999 the issuer had issued and outstanding
               15,949,128 shares, $.001 par value, of Common Stock

<PAGE>
                               CORECARE SYSTEMS, INC.
                                   FORM 10-QSB

                                TABLE OF CONTENTS
                                -----------------


PART  I  -  FINANCIAL  INFORMATION
                                                                            PAGE

Item  1:     Financial  Statements                                             2
Item  2:     Management's  Discussion
             and  Analysis  of  Financial  Condition
             and  Results  of  Operations                                    2-4

Item  3:     Quantitative  and  Qualitative
             Disclosures  About  Market  Risk                                  4



PART  II  -  OTHER  INFORMATION
                                                                            PAGE

Item  1:     Legal  Proceedings                                                5
Item  2:     Changes  in  Securities  and  Use  of  Proceeds                   5
Item  3:     Default  and  Senior  Securities                                  5
Item  4:     Submission of Matters to a Vote of Security Holders               5
Item  5:     Other  Information                                                5
Item  6:     Exhibits  and  Reports  on  Form  8-K                             5



                          INDEX TO FINANCIAL STATEMENTS
                          -----------------------------

     Consolidated  Balance  Sheet
     Three  months  ended
     March  31,  1999  and
     Fiscal  Year  Ended
     December  31,  1998                                                    9-10

     Consolidated Statement of Operations
     Three  months  ended
     March  31,  1999  and  1998                                              11

                                      1
<PAGE>
ITEM  1.     FINANCIAL  STATEMENTS


     The  financial  statements can be found at the end of this report beginning
on  pages  7  through  11.


ITEM  2.     Management's  Discussion  and  Analysis
ITEM  1.     FINANCIAL  STATEMENTS


     CoreCare  Systems,  Inc.  (the  "Company")  (OTC  Bulletin Board: CRCS)is a
regional  behavioral  health care network  operating  in  Eastern  Pennsylvania,
which performs behavioral therapy services  and  associated clinical research in
central nervous system drugs. The Company's  headquarters  are  located  at  c/o
Kirkbride  Center, 111 North 49th Street, Philadelphia, PA  19139. Its telephone
number  at  its new  location  is  (215) 471-2600.  The  executive  suite can be
reached  at  (215)  471-2358.


     Management's  discussion  and  analysis  is  based  upon  the  unaudited
consolidated  financial  statements  of  the Company for the three month periods
ended  March  31, 1999 and 1998, and include the accounts of the Company and its
subsidiaries  after  elimination of any inter-company balances and transactions.


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

(a)  RESTATEMENT  FOR  1999

A  review  of  the  first quarter 1999 statements also revealed the necessity to
restate its first quarter results.  This is necessary to reflect the 1999 impact
of  the  above 1998 corrections and to correct certain errors.  The total effect
of  these  adjustments is to increase the first quarter 1999 loss to $1,660,250.
This  is  an  increase  of  approximately $1,039,500.  At this time, the amounts
listed  below  are approximate amounts.  The exact amounts will be determined by
the  final  audit.  The  items  that  comprise  this  adjustment  include:

-    Inadequate calculation of contractual allowances in the amount of $348,000,
     for patients with pending Medical Assistance applications.

-    Medicare  accounts  receivable  adjustments  of  $317,000  associated  with
     co-payment and deductible booking errors.

-    Physician services billings in the amount of $212,000,  which have not been
     processed.  This Start-up  Corporation is attempting to establish  provider
     numbers  with the  appropriate  payors so that these fees may be billed and
     collected in the future,  however the amounts have been fully reserved as a
     precaution.

-    Inadequate  recognition of accrued  expenses of $384,500,  associated  with
     various items including lease commissions,  expected workers'  compensation
     premium adjustments, as well as provision for certain state franchise taxes
     associated with the Company's capital structure and revenue base.

-    Inadequate  reserves to provide for  retroactive  payor changes and patient
     day denials of $270,000.


-    An over allowance for amounts due to the Medicare program of ($192,000) and
     ($300,000)  correction due to accounts  receivable  adjustments and errors.
     The effect of this  adjustment  is to increase  the first  quarter  income.
     These were 1998 items that  previously  had been  accounted for in the 1999
     income statement.

As  a  result,  the accompanying consolidated financial statements as of and for
the  quarter  ended  March  31,  1999  present  the  restated  results.

A  summary  of  the  effects  of  the  restatement  follows:

<TABLE>
<CAPTION>
                                    Quarter ended       Quarter ended
                                   March 31, 1998       March 31, 1999
                                 Previously Reported       Restated
                                ---------------------  ----------------
<S>                             <C>                    <C>

Net Revenues                    $          6,919,018   $     6,264,018

Income (Loss) from Operations   $            615,496   $      (423,997)

Net Income (Loss)               $           (620,708)  $    (1,660,251)
</TABLE>

(b)  RESTATEMENT  FOR  1998
Subsequent  to  the  issuance of the Company's consolidated financial statements
for  the  year ended December 31, 1998, it was determined that the reported 1998
results  were  overstated.  Upon  examination,  it  was  determined that certain
revenue  was  improperly  recorded,  certain expenses were under-accrued for and
certain  debt  interest  was  not  properly  accounted  for.

The  Company  restated  its  1998  loss  for  the  12  months  ended 12/31/98 to
$8,939,044.  This  is  an  increase of $4,348,423 versus the previously reported
loss  of  $4,590,621.  The  details of the components of this loss are discussed
below.:


The  1998  revenue  for  the  twelve  months  ended  12/31/98  was overstated by
$1,875,000.  This adjustment was due to the over accruing of net patient revenue
and  the  related  accounts  receivable.  This  was  primarily  caused  by:

-    Inadequate  calculation of contractual  allowances for Medicare patients of
     $700,000 and for potential Medicaid patients of $275,000.

-    Accounts receivable adjustments of $300,000 associated with computer system
     errors related to net patient revenue.

-    Inadequate  reserves to provide for  retroactive  payor changes and patient
     day denials of $600,000.

The  1998  expenses  for  the  twelve months  ended 12/31/98 were understated by
$2,475,000  due  to  the  inadequate  provision  of  accrued unpaid expenses and
incorrect  recording of journal entries.  The items in this category consist of:

-    Lack of a  provision  for the cost of tail  coverage  for the  claims  made
     malpractice insurance coverage. This amount is $128,000.

-    Interest  expense and property taxes on a  discontinued  operation were not
     accrued in the amount of $820,000.

-    A  provision  was not made for  certain  state and local taxes that are not
     related to the Corporation's net income but rather to the capital structure
     or to the net revenue of the Corporation. These amounted to $69,000.

-    Interest  expense and commission due on certain of the Company's  notes was
     not adequately provided for. These amounted to $414,000.

-    A  provision  was not  made  for  commissions  of  $84,000  to be paid on a
     terminated lease.

-    Certain  expense  items  received  after  the end of the year for  services
     rendered during the year were not provided for. These amounted to $460,000.
     The items included legal fees,  provision for  retrospective  adjustment of
     certain   insurance   expense  and  a  general   provision  for  unrecorded
     liabilities.

-    Certain  prepaid  expenses and  deposits  that should have been written off
     were not. These amounted to $300,000.

-    Pharmacy expenses in the amount of $200,000 were not recognized.


As  a  result,  the accompanying consolidated financial statements as of and for
the  year  ended  December  31,  1998  present  the  restated  results.

A  summary  of  the  effects  of  the  restatement  follows:

<TABLE>
<CAPTION>
                                 1998 Previously    1998 Restated
                                    Reported
                                -----------------  ---------------
<S>                             <C>                <C>

Net Revenues                    $     21,617,054   $   19,948,895

Income (Loss) from Operations   $     (2,734,793)  $   (6,025,624)

Net Income (Loss)               $     (4,590,621)  $   (8,939,044)
</TABLE>

RESULTS  OF  OPERATIONS:

          Revenue - Revenue in the three-month period ending March 31, 1999, was
$6,264,018,  representing an increase of approximately 45% over total revenue in
the  comparable 1998 period. The material increase in total revenue in the first
three  months of 1999, compared with the prior year period, is attributable to a
number  of  factors,  including  the  following:

          Net  Patient  Revenue     -Net  patient  revenue  increased
primarily  due  to  the following developments:

          (a)  Drug and alcohol unit (licensed for 63 beds) was opened for three
months  of  operation  at  Kirkbride  Center during 1999 and was not operational
during  the  first  quarter  1998;

          (b)  Patient  days  at  the  Kirkbride Center and Westmeade at Warwick
increased  by  80%  in  1999  from  1998;

          (c)  New  programs  at  the  Kirkbride  Center including the geriatric
partial  hospitalization;

                                      2
<PAGE>
          (d)  Dual  diagnosis  program  at the Kirkbride Center expanded during
1998  and

                    Management  Services  Revenue  -Management  services revenue
                    --------------------------------
declined due to the  expiration of a hospital management contract  on  June  30,
1998.

          Other  Revenue-  CoreCare  Management  also  experienced  revenue
          ---------------
fluctuations between periods due to the of absence of Preferred Medical Services
Revenue in the 1st Quarter of 1998 (as acquired  April 1998) as well as the loss
of several  billing  clients in first quarter 1999. The increase  includes first
time revenue productions from the Company's  subsidiary Quantum Clinical Service
Group in 1999 from  clinical  research  drug trials on behalf of  pharmaceutical
companies. Quantum has signed clinical research contracts in effect in the first
quarter,  which are projected to continue in 1999.  Additionally,  rental income
from tenant revenue doubled over the period from 1999 over 1998.

          Operating  Expenses:  The  operating  expenses of  $6,688,015  for the
          -------------------
quarter  ended  March 31,  1999  increased  39% over the first  quarter of 1998.
Operating  expenses  increased at a rate lower than the 44% increase in revenue.
The company was able to achieve the benefits of operating  leverage and improved
operating efficiency.

          Salaries  and  Employees  Benefits-  Salaries  and  Employee  Benefits
          ----------------------------------
increased  approximately  $1.2  million or 68% during the first  quarter 1999 as
compared to the first  quarter  1998.  This large  increase is mainly due to the
more  services  being  offered  at the  Kirkbride  Center  and the  addition  of
Preferred Medical Services Costs,  which were not present in the same period for
1998.  During 1999 the number of acute  patients was greater than 1998, the drug
and alcohol unit was  operational,  and the outpatient  programs have increased.
These  additional  services  required an  increase in staffing  costs along with
start-up  costs  associated  with the clinical drug  research and  restructuring
costs associated with the company's r e-engineering activities.


                                      3

<PAGE>

          Bad  Debt  Expense  -  Bad  debt  expense  increased  by $234,809.
          ------------------
This was due to an increase in the  allowance  for  doubtful  accounts  for 1998
activity.

          Interest  Expense  -  Interest  expense  increased  by $218,609.  This
          -----------------
was due to higher  outstanding  debt at March 31, 1999 versus 1998.  In 1999 all
interest was expensed  during the quarter while in 1998 interest was capitalized
on  portions of the  facility  that were under  construction  and not yet placed
inservice, consistent with generally accepted accounting principals.

          Depreciation  and Amortization expense - Depreciation and amortization
          --------------------------------------
expense  decreased  by  about  $136,291.  This  is  due  to  reduction  in  the
amortization  on  the  mortgage  costs  in  1999.

          Net  Loss declined to $(1,660,251) from $(2,036,907) a year ago.


                                      4

<PAGE>
ITEM  3.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  AND  MARKET  RISK

     Not  Applicable

<PAGE>
                           PART II - OTHER INFORMATION


ITEM  1.     LEGAL  PROCEEDINGS

          None


ITEM  2.     CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

          None


ITEM  3.     DEFAULTS  ON  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

            (a)     Exhibits.
                    --------

                    SEC
Exhibit             Reference
  No.               No.
-------             ---------
  27                Financial Data Schedule

            (b)     Reports  on  Form  8-K.
                    ----------------------
                    No  new reports on Form 8-K were filed in the quarter ended
March 31,  1999.

                                      6

<PAGE>
                                   SIGNATURES


          In  accordance  with the requirements of the Exchange Act of 1934, the
registrant  caused  this  report  to be signed on its behalf by the undersigned,
thereunto  duly  authorized.


Date:  October 12,  1999
     ----------------


                                   CORECARE  SYSTEMS,  INC.


     BY: _______________________________
         THOMAS T. FLEMING, CHAIRMAN AND CHIEF EXECUTIVE OFFICER

                                          7

<PAGE>
Notes  to  Financial  Statements

1.     Basis  of  presentation:
The accompanying unaudited financial statements have been prepared in accordance
with  generally accepted accounting principles for interim financial information
and  with  the  instructions  for  Form  10-Q  and Article 10 of Regulation S-X.
Accordingly,  they  do not include all of the information and footnotes required
by  generally  accepted accounting principles for complete financial statements.
In  the  opinion  of management, all adjustments (consisting of normal recurring
accruals)  considered  necessary  for  a  fair  presentation have been included.
Operating  results for the three months ended March 31, 1999 are not necessarily
indicative  of the results that may be expected for the year ending December 31,
1999.  The unaudited financial statements should be read in conjunction with the
financial  statements  and  footnote thereto included in the Company's report on
Form  10-SB  for  the  year  ended  December  31,  1998.

2.     The  Business:
Corecare  Systems,  Inc.  through  its  nine  operating  subsidiaries,  provides
management  services to behavioral health service providers; provides, owns, and
operates  outpatient and inpatient behavioral health services; provides clinical
trial services to the pharmaceutical industry; and develops billing software for
the  health  industry.

3.     Summary  of  significant  accounting  policies:

Principles  of  consolidation:
The  March  31,  1999  and December 31, 1998 financial statements of the Company
include  accounts  of  Corecare Systems, Inc. and its wholly owned subsidiaries.


                                      8

<PAGE>
<TABLE>
<CAPTION>
CORECARE  SYSTEMS,  INC.
CONSOLIDATED  BALANCE  SHEET


                               MARCH 31, 1999            DECEMBER 31, 1998
                             -----------------------  -----------------------
                           AS PREVIOUSLY   RESTATED  AS PREVIOUSLY   RESTATED
                               REPORTED    REPORTED     REPORTED     REPORTED
                             -----------  ----------  -----------  ----------
Current assets:
<S>                           <C>         <C>         <C>          <C>
   Cash & cash equivalents      161,382      167,126     115,242      115,242
   Accounts receivable        6,332,572    4,213,626   5,588,188    4,411,418
   Prepaid expenses             737,651      616,841     224,215      175,659
                             -----------  ----------  -----------  ----------
 Total current assets         7,231,605    4,997,593   5,927,645    4,702,319

 Contract rights                265,300    1,288,919   1,288,919    1,288,919
   Less acc. amortization       (47,013)   1,117,645  (1,023,619)   1,023,619
                             -----------  ----------  -----------  ----------
                                218,287      171,274     265,300      265,300

 Property & equipment,net    14,126,248   14,142,968  14,151,787   14,151,787

 Goodwill, net                1,742,182    1,685,300   1,527,981    1,705,231

 Deferred finance costs,net     274,659      274,659     443,172      443,172

 Long-term investments:
 Real estate held for sale
                              1,086,924    1,086,924   1,100,000    1,100,000


 Other Assets:
 Deposits                       127,313       28,447     316,375       10,467
 Other                          590,814      426,861     981,436      816,651
                             -----------  ----------  -----------  ----------
 Total Other Assets             718,127      455,308   1,297,811    2,975,927

 Total Assets                25,398,032   22,814,026  24,713,696   23,194,927
                             ===========  ==========  ===========  ==========
</TABLE>

                                      9
<PAGE>
<TABLE>
<CAPTION>
CORECARE  SYSTEMS,  INC.
CONSOLIDATED  BALANCE  SHEET


                                    MARCH 31, 1999            DECEMBER 31, 1998
                             --------------------------  --------------------------
                            AS PREVIOUSLY    RESTATED    AS PREVIOUSLY   RESTATED
                               REPORTED      REPORTED      REPORTED      REPORTED
                             ------------  ------------  ------------  ------------
Current liabilities:
<S>                            <C>           <C>         <C>           <C>
   Accounts payable            3,526,394     3,302,446     3,748,884     3,748,884
   Payrolls & related taxes    3,338,224     3,338,222     3,048,183     3,048,143
   Accrued expenses            1,493,429     2,894,926       840,354     1,851,026
   Due to Medicare             1,501,079     2,001,079     1,000,000     1,692,389
   HCFP Funding                3,626,220     4,492,720     4,308,703     4,308,703
   Notes Pay. incl.
        current portion LTD   15,994,171    16,103,455    15,199,388    16,191,983
   Current portion on capital
 lease obligations                76,521        73,478        38,565        38,565
   Advances, officers            902,489     1,332,692       910,692     1,332,692
                             ------------  ------------  ------------  ------------
 Total current liabilities    30,458,527    33,539,018    29,094,769    32,212,423

 Long-term liabilities:
 Long-term debt,
     net of current portion    2,180,904     2,192,374     2,192,374     2,192,374
                             ------------  ------------  ------------  ------------
                               2,180,904     2,192,374     2,192,374     2,192,374

 Total liabilities            32,639,431    35,731,392    31,287,143    34,404,797

 Shareholders' equity
   Preferred Stock,                   17            17            17            17
 Common Stock,                    15,949        15,949        15,949        15,949
 Additional paid in capital   11,327,095    11,039,095    11,374,340    11,086,340
 Retained earnings           (18,584,460)  (23,972,427)  (17,963,752)  (22,312,176)
                             ------------  ------------  ------------  ------------
 Total stockholders' equity   (7,241,399)  (12,917,366)  ( 6,573,446)  (11,209,870)
                             ------------  ------------  ------------  ------------

 Total liabilities and
     stockholders' equity     25,398,032    22,814,026    24,713,697   23,194,927
                             ============  ============  ============  ============
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
CORECARE  SYSTEMS,  INC.
CONSOLIDATED  BALANCE  SHEET


                                MARCH 31,     DECEMBER 31,
                                  1999           1998
                               ------------   -----------
                                 RESTATED      RESTATED
                                 REPORTED      REPORTED
<S>                            <C>           <C>

Current assets:
   Cash & cash equivalents         167,126        115,242
   Accounts receivable           4,213,626      4,411,418
   Prepaid expenses                616,841        175,659
                               ------------  ------------
 Total current assets            4,997,593      4,702,319

 Contract rights                 1,288,919      1,288,919
   Less acc. amortization        1,117,645      1,023,619
                               ------------  ------------
                                   171,274        265,300

 Property & equipment,net       14,142,968     14,151,787

 Goodwill, net                   1,685,300      1,705,231

 Deferred finance costs,net        274,659        443,172

 Long-term investments:
 Real estate held for sale
                                 1,086,924      1,100,000


 Other Assets:
 Deposits                           28,447         10,467
 Other                             426,861        816,651
                               ------------  ------------
 Total Other Assets                455,308      2,975,927

 Total Assets                   22,814,026     23,194,927
                               ============  ============
</TABLE>

                                      9
<PAGE>
<TABLE>
<CAPTION>
CORECARE  SYSTEMS,  INC.
CONSOLIDATED  BALANCE  SHEET


                                MARCH 31,     DECEMBER 31,
                                  1999           1998
                               ------------   -----------
                                 RESTATED      RESTATED
                                 REPORTED      REPORTED
<S>                            <C>            <C>

Current liabilities:
   Accounts payable               3,302,446     3,748,884
   Payrolls & related taxes       3,338,222     3,048,143
   Accrued expenses               2,894,926     1,851,026
   Due to Medicare                2,001,079     1,692,389
   HCFP Funding                   4,492,720     4,308,703
   Notes Pay. incl.
        current portion LTD      16,103,455    16,191,983
   Current portion on capital
 lease obligations                   73,478        38,565
   Advances, officers             1,332,692     1,332,692
                               -------------  ------------
 Total current liabilities       33,539,018    32,212,423

 Long-term liabilities:
 Long-term debt,
     net of current portion       2,192,374     2,192,374
                               -------------  ------------
                                  2,192,374     2,192,374

 Total liabilities               35,731,392    34,404,797

 Shareholders' equity
   Preferred Stock,                      17            17
 Common Stock,                       15,949        15,949
 Additional paid in capital      11,039,095    11,086,340
 Retained earnings              (23,972,427)  (22,312,176)
                               -------------  ------------
 Total stockholders' equity     (12,917,366)  (11,209,870)
                               -------------  ------------

 Total liabilities and
     stockholders' equity        22,814,026    23,194,927
                               =============  ============
</TABLE>

                                      10
<PAGE>
<TABLE>
<CAPTION>
 CORECARE  SYSTEMS,  INC.
 CONSOLIDATED  STATEMENT  OF  OPERATIONS
 QUARTER  ENDING  MARCH  31


                                    MARCH 31, 1999            DECEMBER 31, 1998
                             ---------------------------  -------------------------
                            AS PREVIOUSLY    RESTATED    AS PREVIOUSLY   RESTATED
                               REPORTED      REPORTED      REPORTED      REPORTED
                               ------------  -----------  ------------  -----------
<S>                            <C>           <C>         <C>           <C>
Revenue:

Net Revenue                      6,919,018    6,264,018     4,660,201    4,380,574

 Operating Expenses:
 Salaries and benefits           4,170,676    4,226,926     3,006,893    3,001,541
 Purchased services                566,199      815,449       361,851            -
 Administrative expenses           897,226      976,219       908,477    1,386,012
 Bad debt expense                  669,421      669,421       392,244      434,612
                               ------------  -----------  ------------  -----------
 Total operating expenses        6,303,522    6,688,015     4,669,465    4,822,165

 Income(loss) from operations      615,496     (423,997)       (9,263)    (513,591)

 Other expenses:
 Interest expense                  847,338      847,338       363,252      628,779
 Impaired asset write down               -         -          369,380      369,380
 Depreciation and Amortiz.         388,866      388,866       525,157      525,157
                               ------------  -----------  ------------  -----------
 Total other expenses            1,236,204    1,236,204     1,257,789    1,523,316
                               ------------  -----------  ------------  -----------

 Net income(loss)                 (620,708)  (1,660,251)   (1,267,052)  (2,036,907)
                               ============  ===========  ============  ===========

 Shares outstanding             15,949,128   15,949,128    13,118,944   13,118,944

 Loss per share-primary              (0.04)       (0.11)        (0.10)       (0.14)
 Loss per share-fully diluted
</TABLE>

                                      11
<PAGE>
<TABLE>
<CAPTION>
 CORECARE  SYSTEMS,  INC.
 CONSOLIDATED  STATEMENT  OF  OPERATIONS
 QUARTER  ENDING  MARCH  31


                                  1999           1998
                               ------------   -----------
                                 RESTATED      RESTATED
                                 REPORTED      REPORTED
<S>                            <C>            <C>

Revenue:

Net Revenue                       6,264,018    4,380,574

 Operating Expenses:
 Salaries and benefits            4,226,926    3,001,541
 Purchased services                 815,449            -
 Administrative expenses            976,219    1,386,012
 Bad debt expense                   669,421      434,612
                                ------------  -----------
 Total operating expenses         6,688,015    4,822,165

 Income(loss) from operations      (423,997)    (513,591)

 Other expenses:
 Interest expense                   847,338      628,779
 Impaired asset write down                -      369,380
 Depreciation and Amortization      388,866      525,157
                                ------------  -----------
 Total other expenses/(income)    1,236,204    1,523,316
                                ------------  -----------

 Net income(loss)                (1,660,251)  (2,036,907)
                                ============  ===========

 Shares outstanding              15,949,128   13,118,944

 Loss per share-primary               (0.11)       (0.14)
 Loss per share-fully diluted         (0.11)       (0.14)
</TABLE>


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