SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 2000



                         COMMISSION FILE NUMBER 0-26168


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


DELAWARE                                                              52-1849794
(State or other jurisdiction of                                 (I.R.S. Employer
Incorporation or organization)                            Identification Number)

485-C Route 1 South, Iselin, New Jersey                                    08830
(Address of principal executive offices)                              (Zip Code)


       Registrant's telephone number, including area code: (732) 602-7000


      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  twelve  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
                                       ---    ---



                                   83,240,552
       Number of shares of Common Stock outstanding as of October 31, 2000

                  Transitional Small Business Disclosure Format

                                 Yes___ No_X_
<PAGE>

                      CareAdvantage, Inc. and Subsidiaries
                                   Form 10-QSB
                  For the nine months ended September 30, 2000


                                    I N D E X


Part I - Financial Information

    Item 1.    Financial Statements

         o   Condensed Consolidated Balance Sheets -
             September 30, 2000 (Unaudited) and December 31, 1999 (Audited)
             ................................................................  2

         o   Condensed  Consolidated  Statements of  Operations  (Unaudited) -
             Three and Nine-months  ended September 30, 2000 and September 30,
             1999
             ...............................................................   3

         o   Condensed  Consolidated  Statements  of Cash Flows  (Unaudited) -
             Nine months ended September 30, 2000 and September 30, 1999
             ...............................................................   4

         o   Notes to Condensed Consolidated Financial Statements...........   5
             (Unaudited)

    Item 2.    Management's Discussion and Analysis of
                Financial Condition and Results of Operations...............   6

    Item 3.    Quantitative and Qualitative Disclosures about Market Risk ..  10


Part II - Other Information

    Item 1.    Legal Proceedings............................................  10

    Item 2.    Changes in Securities........................................  10

    Item 3.    Defaults Upon Senior Securities..............................  10

    Item 4.    Submission of Matters to a Vote of Security Holders..........  10

    Item 5.    Other Information ...........................................  10

    Item 6.    Exhibits and Reports on Form 8-K.............................  10

    Signature...............................................................  11




<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1.  Financial Statements

                               CAREADVANTAGE, INC
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               September 30,                          December 31,
                     ASSETS                                        2000                                   1999
                                                                   ----                                   ----
                                                                (Unaudited)                            (Audited)
                                                                 ---------                             -------
<S>                                                              <C>                                   <C>
Current assets:
     Cash and cash equivalents                                   $1,782,000                             $  1,615,000
     Restricted Cash                                                256,000                                        -
     Accounts receivable for services:
         Stockholder                                              1,265,000                                1,135,000
         Other                                                      466,000                                  173,000
     Other current assets                                           244,000                                  220,000
                                                                    -------                                  -------

                  Total current assets                            4,013,000                                3,143,000

Property and equipment, at cost less accumulated depreciation       515,000                                  845,000
Intangible assets                                                 1,028,000                                1,283,000
Other assets                                                        110,000                                  102,000
                                                                    -------                                  -------

Total Assets                                                    $ 5,666,000                             $  5,373,000
                                                                ===========                                =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable                                            $  340,000                             $    313,000
     Due to stockholder                                             693,000                                  393,000
     Due to customer                                                839,000                                  902,000
     Accrued salaries and employee benefits                         795,000                                  841,000
     Accrued expenses and other current liabilities                 274,000                                  332,000
     Deferred revenue, current                                            -                                   98,000
                                                                 ----------                               ----------

                  Total current liabilities                       2,941,000                                2,879,000

Due to stockholder, less current portion                                  -                                  300,000
                                                                -----------                                ---------


Total Liabilities                                                 2,941,000                                3,179,000
                                                                -----------                                ---------

Stockholders' equity:
     Preferred stock-par value $.10 per share;
          authorized 10,000,000 shares; none issued
     Common stock-par value $.001 per share;
         authorized 103,600,000 shares; issued
         and outstanding 83,292,152 and 82,189,883                   83,000                                   82,000
     Additional capital                                          22,136,000                               22,062,000
     Accumulated deficit                                        (19,494,000)                             (19,950,000)
                                                               ------------                              -----------

Total Stockholders' Equity                                        2,725,000                                2,194,000
                                                                  ---------                              -----------
Total Liabilities and Stockholders' Equity                      $ 5,666,000                             $  5,373,000
                                                                ===========                              ===========


        The accompanying notes are an integral part of these statements.

</TABLE>
                                       2
<PAGE>


                               CAREADVANTAGE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                  Three Months Ended                           Nine Months Ended
                                                     September 30,                                September 30
                                                   2000            1999                     2000            1999
                                                   ----            ----                     ----            ----

<S>                                              <C>             <C>                    <C>             <C>
Net revenues                                     $4,479,000      $4,184,000             $13,367,000     $12,013,000

Costs of services                                 2,187,000       2,339,000               6,642,000       6,585,000
                                                 ----------      ----------               ---------       ---------


Gross margin                                     2,292,000        1,845,000               6,725,000       5,428,000
                                                 ---------        ---------               ---------       ---------

Operating expenses:

Selling, general and administration              1,945,000        1,643,000               5,754,000        5,435,000
Depreciation and amortization                      194,000          213,000                 553,000          629,000
                                                 ---------        ---------               ---------       ----------

Total operating expenses                         2,139,000        1,856,000               6,307,000        6,064,000
                                                 ---------        ---------               ---------        ---------

Operating income/(loss)                            153,000          (11,000)                418,000         (636,000)

Net interest income/(expense)                       15,000           14,000                  38,000           32,000
                                                 ----------       ---------               ---------        ---------


Net income/(loss)                                $ 168,000       $    3,000             $   456,000     $   (604,000)
                                                   =======        =========              ==========        =========

Net  income/(loss) per share -

    Basic                                             $.00             $.00                    $.01            ($.01)
                                                      ====             ====                    ====             ====

    Diluted                                           $.00             $.00                    $.00            ($.01)
                                                      ====             ====                    ====             ====
Weighted average number
of common shares outstanding -

     Basic                                      83,255,000       93,700,000              83,011,000       82,190,000
                                                ==========       ==========              ==========       ==========

     Diluted                                    88,205,000       93,700,000              91,210,000       82,190,000
                                                ==========       ==========              ==========       ==========

</TABLE>
                                       3


<PAGE>


                      CAREADVANTAGE, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                          Nine Months Ended
                                                               September 30,            September 30,
                                                                   2000                     1999
                                                                   ----                     -----
<S>                                                               <C>                 <C>

Cash flows from operating activities:

Net income/(loss)                                                 $ 456,000           $ (604,000)

Adjustments to reconcile net  profit/(loss)
to net cash (used  by)/provided from
operating activities:

Depreciation and amortization                                       679,000               961,000
Compensation due to option issuance                                  38,000                43,000
Deferred revenue                                                    (98,000)             (130,000)

Change in assets and liabilities:

Due to/from customers/stockholders                                 (423,000)              183,000
Other assets                                                        (32,000)              (48,000)
Accounts payable                                                     27,000               (19,000)
Accrued expenses and other liabilities                             (103,000)             (472,000)
Due to Customer                                                     (63,000)                 -
                                                                   --------              --------


Net cash  provided from/(used by)
operating activities                                                481,000               (86,000)
                                                                    -------              --------

Cash flows from investing activities:

Capital expenditures                                                (94,000)             (468,000)
                                                                    --------             --------

Net cash  (used by) investing
activities                                                          (94,000)             (468,000)
                                                                   --------              --------

Cash flows from financing activities:

Proceeds from Exercise of Stock Options                              36,000                     0
Principal payments to stockholder                                         0              (695,000)
Principal payments under long-term debt                                   0              (319,000)
                                                                          -              --------

Net cash provided from/(used by) financing
Activities                                                           36,000            (1,014,000)
                                                                    -------             ---------

Net  (decrease)/increase in cash                                    423,000            (1,568,000)

Cash - beginning of fiscal year                                   1,615,000             3,354,000
                                                                  ---------             ---------

Cash - end of period                                             $2,038,000            $1,786,000
                                                                 ==========            ==========



        The accompanying notes are an integral part of these statements.
</TABLE>
                                       4

<PAGE>


                               CAREADVANTAGE, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
Note A--Basis of preparation:

Fiscal Year Change:

On June 8, 1999, CareAdvantage, Inc. ("CAI" or the "Company") changed its fiscal
year from one ending October 31 to a calendar year ending December 31.

The consolidated financial statements have been prepared by the Company and have
not  been  audited  by the  Company's  independent  auditors.  The  accompanying
financial   statements  include  all  adjustments  (which  include  only  normal
recurring  adjustments)  which in the opinion of  management  are  necessary  to
present fairly the financial  position,  results of operations and cash flows at
September 30, 2000 and for all periods presented.

Certain  information  and  note  disclosures  required  to be  included  in  the
financial  statements  prepared in accordance with generally accepted accounting
principles have been omitted.  These consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
included with the Company's  December 31, 1999 Annual Report on Form 10-KSB. The
results  of  operations  for  the  period  ended  September  30,  2000  are  not
necessarily indicative of operating results to be expected for the full year.

Note B--Per share data:

Net income per share has been computed  based on the weighted  average number of
shares  outstanding  during the periods.  Common stock equivalents have not been
included in 1999 as they are not dilutive.

Note C--Contingencies:

Potential uninsured exposure to litigation:

a)   ROBERT T.  CARUSO V. JOHN J.  PETILLO,  VINCENT M.  ACHILLARE,  LAWRENCE A.
     WHIPPLE,  AND HORIZON  BLUE CROSS BLUE  SHIELD OF NEW JERSEY,  INC. ET AL.,
     which was filed in Superior Court of New Jersey on August 12, 1998. Messrs.
     Petillo,  Achillare  and Whipple were  officers of the Company and may have
     claims for  indemnification for expenses and for any judgments against them
     in this case.  Mr.  Caruso was a consultant  to the Company.  The complaint
     alleges  breach of contract,  fraud,  conspiracy,  promissory  estoppel and
     negligent  misrepresentation  in connection with,  among other things,  the
     termination of Mr. Caruso's  consulting  arrangement with the Company.  The
     Plaintiff  seeks treble  damages for  unspecified  amount and claims actual
     damages in the approximate amount of $1.8-2.0 million. The Company received
     notice from two of its insurance  carriers denying coverage on this matter,
     but the Company plans to vigorously contest these coverage  decisions.  The
     Company  received  a written  claim  for  indemnification  from  defendants
     Petillo and Achillare and, subject to their having acted in good faith, the
     Company has agreed to indemnify them and defendant Whipple and to pay their
     reasonable  defense  costs.  The parties to this  litigation  are currently
     taking  discovery.  Until  discovery  has been  completed,  the Company has
     insufficient information regarding its potential exposure in this matter.

Note D - Supplemental Cash Flow Information:

Below is  supplemental  cash flow  information  related to the nine months ended
September 30, 2000 and September 30, 1999:

                                                  September 30,
                                                  -------------

                                            2000                1999
                                            ----                ----

Income taxes paid                         41,000             115,000

Interest paid                                  0              53,000


Note E - Exercise of Stock Option

During the nine months ended  September 30, 2000,  certain  employees  exercised
options that resulted in the issuance of 1,102,269 shares of common stock.

                                       5

<PAGE>


                               CAREADVANTAGE, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

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

Cautionary Statements:

Statements  in this Form  10-QSB  may  constitute  "forward-looking  statements"
within  the  meaning of the  Private  Securities  Litigation  Reform Act of 1995
("PSLRA"),  including statements concerning  management's plans,  intentions and
expectations  with respect to future  financial  performance  and future events,
particularly   relating  to  revenues   from   performance-based   services  and
re-negotiations  of existing and new  contracts  with  customers.  Many of these
statements  involve known and unknown risks,  uncertainties  and  contingencies,
many of which are beyond management's control,  which could cause actual results
and outcomes to differ materially from those expressed in this 10-QSB.  Although
management  believes that its plans,  intentions and  expectations  reflected in
these forward-looking  statements are reasonable,  it can give no assurance that
its plans,  intentions  or  expectations  will be achieved.  For a more complete
discussion of these risk factors,  please see "Cautionary  Statements" in Item 6
of the Company's Form 10-KSB for the fiscal year ended December 31, 1999.

GENERAL OVERVIEW:

The Company is a holding company which, through its subsidiaries,  CareAdvantage
Health Systems,  Inc.  ("CAHS") and  Contemporary  HealthCare  Management,  Inc.
("CHCM"),  is in the business of providing health care cost containment services
designed to enable health care insurers and other health  service  organizations
to reduce the costs of  medical  services  provided  to their  subscribers.  The
services provided include  utilization  review in  medical/surgical  cases where
pre-authorization is required for hospitalization and for certain in-patient and
outpatient  procedures,  case management and disease  management.  The Company's
services have been  principally  provided to several of Blue  Cross/Blue  Shield
("BCBS") health services organizations in the Northeastern United States.

The Company had a service  agreement  with Horizon Blue Cross Blue Shield of New
Jersey  ("Horizon  BCBSNJ") that expired on June 30, 2000.  Although the precise
terms of a contract  renewal have not yet been agreed upon, the Company has been
informed by Horizon  BCBSNJ that Horizon  BCBSNJ will  continue to contract with
the  Company  for care  management  services  for the  indemnity  portion of the
business at least  until  January 1, 2001.  The  Company and Horizon  BCBSNJ are
presently negotiating an extension of their agreement to December 31, 2002.



RESULTS OF OPERATIONS:

The following  discussion  compares the Company's  results of operations for the
nine and three months  ended  September  30,  2000,  with those for the nine and
three months ended  September  30, 1999.  The Company's  consolidated  financial
statements and notes thereto included  elsewhere in this report contain detailed
information  that  should  be  referred  to in  conjunction  with the  following
discussion.



Three Months Ended September 30, 2000,  Compared to Three Months Ended September
30, 1999

Revenues:

The  Company's  total  operating  revenues  for the  three-month  periods  ended
September  30, 2000 and  September 30, 1999 were  approximately  $4,479,000  and
$4,184,000,  respectively. This represents an increase of approximately $295,000
for the  three-month  period  ended  September  30, 2000 from the  corresponding
period of the prior year. The increase for the three months ended  September 30,
2000 is largely due to increased  revenue of  approximately  $380,000 due to new
contracts  offset by a decrease  of  approximately  $85,000  in  revenue  due to
decreased membership from the Company's major customers.

Cost of services:

The Company's  total direct cost of services for the  three-month  periods ended
September  30, 2000 and  September  30, 1999 was  approximately  $2,187,000  and
$2,339,000,  respectively.  This represents a decrease of approximately $152,000
for the  three-month  period  ended  September  30, 2000 over the  corresponding
period of the prior year.

                                       6
<PAGE>

                               CAREADVANTAGE, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


This decrease in the cost of services for the three-month period ended September
30,  2000  was  primarily  due to  decreases  in  overhead  costs,  particularly
professional and personnel costs of approximately $105,000,  attained as part of
the Company's cost cutting  measures,  as well as decreases in depreciation  and
amortization expense.

Operating expenses:

Selling, general, and administrative:

The  Company's  total  selling,   general,  and  administrative  costs  for  the
three-month  periods  ended  September  30,  2000 and  September  30,  1999 were
approximately  $1,945,000  and  $1,643,000,  respectively.  This  represents  an
increase of  approximately  $302,000 for the three-month  period ended September
30, 2000 over the corresponding  period of the prior year. This increase for the
three-month  period  ended  September  30, 2000 is largely due to an increase of
approximately  $215,000 in  consulting  costs  incurred in  connection  with the
Company's  information  systems  as well as  increases  in other  sales  related
expenses.

Depreciation and amortization:

The Company's  total  depreciation  and  amortization  costs for the three-month
periods  ended  September  30, 2000 and  September  30, 1999 were  approximately
$233,000  and  $307,000,  respectively.  Approximately  $39,000 and $94,000 were
included in cost of services for such periods.

Interest income:

The  Company's  total net  interest  income for the  three-month  periods  ended
September 30, 2000 and September 30, 1999 was approximately the same, at $15,000
and $14,000, respectively.



Nine Months Ended  September 30, 2000,  Compared to Nine Months Ended  September
30, 1999

Revenues:

The  Company's  total  operating  revenues  for  the  nine-month  periods  ended
September  30, 2000 and September 30, 1999 were  approximately  $13,367,000  and
$12,013,000,   respectively.   This  represents  an  increase  of  approximately
$1,354,000  for  the  nine-month  period  ended  September  30,  2000  from  the
corresponding  period of the prior year.  The increase for the nine months ended
September 30, 2000 is largely due to increased revenue of approximately $189,000
from the realization of performance revenues, increased revenue of approximately
$895,000 due to increased  membership on a major account,  and increased revenue
of approximately  $380,000 due to new contracts,  offset by decreased revenue of
approximately  $110,000 due to decreased  membership  from the  Company's  other
customers.

Cost of services:

The  Company's  total direct cost of services for the  nine-month  periods ended
September  30, 2000 and  September  30, 1999 was  approximately  $6,642,000  and
$6,585,000,  respectively.  This represents an increase of approximately $57,000
for the nine-month period ended September 30, 2000 over the corresponding period
of the prior year.  This  increase in the cost of  services  for the  nine-month
period  ended  September  30, 2000 was  primarily  due to increases in personnel
costs,  offset by a decreases in depreciation and  amortization  costs and other
reductions in costs related to the provision of services.

Operating expenses:

Selling, general, and administrative:

The  Company's  total  selling,   general,  and  administrative  costs  for  the
nine-month  periods  ended  September  30,  2000 and  September  30,  1999  were
approximately  $5,754,000  and  $5,435,000,  respectively.  This  represents  an
increase of approximately $319,000 for the nine-month period ended September 30,
2000 over the  corresponding  period of the prior year.  This  increase  for the
nine-month  period  ended  September  30,  2000 is largely due to  increases  in
personnel  costs  of  approximately  $193,000,   including  severance  costs  of
approximately   $150,000,  and  increased  overhead  expenses  of  approximately
$112,000 and professional costs.

                                       7
<PAGE>
                               CAREADVANTAGE, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Depreciation and amortization:

The Company's  total  depreciation  and  amortization  costs for the  nine-month
periods  ended  September  30, 2000 and  September  30, 1999 were  approximately
$679,000 and $1,004,000, respectively.  Approximately $126,000 and $375,000 were
included in cost of services for such periods.

Interest income:

The  Company's  total net  interest  income  for the  nine-month  periods  ended
September 30, 2000 and September 30, 1999 was approximately the same, at $38,000
and $32,000, respectively.



LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES:

General overview:

At  September  30,  2000,  the  Company  had  working  capital of  approximately
$1,071,000,  stockholders equity of approximately  $2,725,000 and an accumulated
deficit  since its  inception of  approximately  $19,494,000.  By  continuing to
provide  high quality care cost  containment  services to its existing  customer
base of five BCBS  plans,  management  believes  it can  continue  to market its
products to other BCBS plans.  This strategy is particularly  significant  given
the current health care environment where large  third-party  payers are merging
in an effort to protect  their  respective  franchises  and expand  their market
reach.  The various BCBS plans  throughout  the country are no exception to this
phenomenon  and the Company  believes it can leverage its core  competencies  to
participate in this consolidating environment.

Management is of the opinion that it must continue to refine its current service
lines in order to  continue to add value to existing  and  potential  customers.
Additionally,  the Company  intends to broaden its services  offered with unique
and  complementary  cost-containment  strategies.  Management will evaluate each
service with regard to anticipated changes in the health care industry, the cost
to enter any such  line of  service  as well as the  availability  of  competent
resources. To further expand its line of services, the Company intends to pursue
alternatives  to its  internal  products  and  service  development  efforts  by
entering  into  strategic  alliances  and  joint  ventures  as well  as  through
acquisitions.



Financial condition:

At September  30, 2000,  the Company had cash of  approximately  $2,038,000  and
working capital of approximately  $1,071,000.  At December 31, 1999, the Company
had cash of  approximately  $1,615,000  and  working  capital  of  approximately
$264,000.

Net cash provided from/(used by) operating  activities amounted to approximately
$481,000 and $(86,000) for the nine-month  periods ended  September 30, 2000 and
September  30,  1999,  respectively.  The  cash  provided  from  2000  operating
activities  is largely due to non-cash  charges of  approximately  $717,000  and
$456,000  in net  profit,  offset  by a  increase  in  customer  receivables  of
approximately  $423,000, a decrease in accrued expenses and other liabilities of
approximately  $103,000  and a decrease  in  deferred  revenue of  approximately
$98,000.

Net cash used in  investing  activities  amounted to  approximately  $94,000 and
$468,000 for the nine-month  periods ended  September 30, 2000 and September 30,
1999,  respectively.  The  decrease  in cash used of  approximately  $374,000 is
largely due to decreased capital outlays for computer-related equipment incurred
during the nine-month period ended September 30, 2000.

Net cash  provided/(used)  in  financing  activities  amounted to  approximately
$36,000 and ($1,014,000) for the nine-month periods ended September 30, 2000 and
September  30, 1999,  respectively.  The decrease in cash used of  approximately
$1,050,000 is largely due to suspended  loan payments to a  stockholder/customer
of approximately $695,000 and decreased principal payments related to the Master
Lease  Agreement  with IBM of  approximately  $319,000,  offset by proceeds from
issuance of common stock of approximately $36,000.

                                        8

<PAGE>

                               CAREADVANTAGE, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

While there can be no assurances,  management believes that its cash on hand and
projected  future cash flows from operations (see discussion below under Capital
Resources)  will provide  adequate  capital  resources to support the  Company's
anticipated cash needs for the next twelve months.


Capital Resources:

Pursuant  to a  promissory  note dated April 1, 1997 in the  original  principal
amount of $1,862,823,  assigned to Horizon BCBSNJ,  the Company owes $693,000 to
Horizon  BCBSNJ as of September 30, 2000. In addition,  the Company is obligated
to pay $839,000 to Horizon Healthcare of New Jersey, Inc.  ("Horizon")  pursuant
to in connection with the settlement in August 2000 of a lawsuit between Horizon
and Allied Specialty Care Services,  Inc.  ("Allied"),  in which the Company was
impleaded  by  Allied  as a  third-party  defendant.  A copy  of the  settlement
agreement  is filed as Exhibit  10.1 to this  10-QSB.  The Company is  currently
participating  in discussions  with Horizon BCBSNJ to convert these  outstanding
balances from debt to equity.

The Company had a credit  facility  with a bank that  provided  for a $1,500,000
working capital revolver to be used for general working capital needs, which was
effective through June 30, 2000. The Company did not renew such credit facility.
In September  of 1998,  the bank issued an  irrevocable  letter of credit in the
amount of  $250,000,  for the  account  of the  Company  in favor of a vendor as
security for the Company's  obligation under a  non-cancelable  operating lease.
This letter of credit was issued  under the  Company's  credit  facility.  As of
September  30, 2000 the  $250,000  irrevocable  letter of credit is secured by a
certificate of deposit in the amount of $250,000.

                                       9


<PAGE>


                               CAREADVANTAGE, INC.


ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

As of September  30,  2000,  the  Company's  investments  are not  significantly
impacted by change in market interest  rates.  The Company does not believe that
changes in interest rates will have a material impact on future earnings or cash
flows during the next twelve months.



PART II--OTHER INFORMATION

Item 1.  Legal Proceedings

For a description of legal proceedings,  see Note C to the Financial Statements.
With the exception of the legal proceedings described in Note C to the Financial
Statements,  there are no material pending legal proceedings other than ordinary
routine litigation incidental to the business of the Company.

Item 2.  Changes in Securities

None.

Item 3.  Defaults Upon Senior Securities

None.

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

No matters were submitted to a vote of the Company's security holders during the
last quarter of calendar year ended September 30, 2000.

Item 5.  Other Information

None.

Item 6. Exhibits and reports on Form 8-K

(a) Exhibits

     (10.1) Settlement Agreement dated August 9, 2000 among the Company, Horizon
Healthcare of New Jersey, Inc. and Allied Specialty Care Services, Inc.

     (10.2) Employment  Agreement between the Company and R. Christopher  Minor,
dated April 17, 2000.

     (27) Financial Data Schedule


                                       10
<PAGE>
                               CAREADVANTAGE, INC.

                                   SIGNATURES



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



                                 CareAdvantage, Inc.



November 10, 2000               /s/ David G. Noone

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

                                David G. Noone

                                Chief Executive Officer



November 10, 2000               /s/ R. Christopher Minor

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

                                R. Christopher Minor

                                Chief Financial Officer