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 June 30, 2002



                         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
                                                -         ---



                                   99,794,671
        Number of shares of Common Stock outstanding as of July 31, 2002

                  Transitional Small Business Disclosure Format
                                  Yes     No X
                                      --     --









<PAGE>





                      CareAdvantage, Inc. and Subsidiaries
                                   Form 10-QSB
                     For the six months ended June 30, 2002


                                    I N D E X
                                    ---------

Part I - Financial Information

  Item 1.   Financial Statements

    o    Condensed Consolidated Balance Sheets -
         June 30, 2002 (Unaudited) and December 31, 2001....................   2

    o    Condensed Consolidated Statements of Operations -
         Three and Six-months ended June 30, 2002 (Unaudited) and
         June 30, 2001 (Unaudited)..........................................   3

    o    Condensed Consolidated Statements of Cash Flows -
         Six months ended June 30, 2002 (Unaudited) and
         June 30, 2001 (Unaudited)..........................................   4

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

  Item 2.   Management's Discussion and Analysis of
            Financial Condition and Results of Operations...................   7


Part II - Other Information

  Item 1.   Legal Proceedings...............................................  11

  Item 2.   Changes in Securities and Use of Proceeds.......................  11

  Item 3.   Defaults Upon Senior Securities.................................  11

  Item 4.   Submission of Matters to a Vote of Security Holders.............  11

  Item 5.   Other Information ..............................................  11

  Item 6.   Exhibits and Reports on Form 8-K................................  11

  Signature.................................................................  12




<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1.  Financial Statements

                       CAREADVANTAGE, INC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                 June 30,                        December 31,
                     ASSETS                                        2002                              2001
                                                                 Unaudited                          Audited
                                                                 ---------                          -------
Current assets:
<S>                                                              <C>                            <C>
     Cash and cash equivalents                                  $ 5,451,000                     $   4,297,000
     Restricted cash                                                100,000                           100,000
     Accounts receivable for services:
         Stockholder                                              1,538,000                         1,303,000
         Other                                                      502,000                           375,000
     Other current assets                                           361,000                           139,000
                                                                -----------                     -------------

                  Total current assets                            7,952,000                         6,214,000

Property and equipment, at cost less accumulated depreciation     1,096,000                           464,000
Intangible assets                                                   656,000                           836,000
Other assets                                                         75,000                            78,000
                                                                -----------                     -------------

Total Assets                                                    $ 9,779,000                     $   7,592,000
                                                                ===========                     =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable                                           $   231,000                     $     412,000
     Accrued compensation and related benefits                    1,124,000                           757,000
     Accrued expenses and other current liabilities                 763,000                           520,000
                                                                -----------                     -------------

     Total current liabilities                                    2,118,000                         1,689,000


Stockholders' equity:
     Preferred stock-par value $.10 per share;
          authorized 10,000,000 shares; none issued
     Common stock-par value $.001 per share;
         authorized 200,000,000 shares; issued
         and outstanding 99,794,671 and 99,781,663                  100,000                          100,000
     Additional capital                                          23,802,000                       23,800,000
     Accumulated deficit                                        (16,241,000)                     (17,997,000)
                                                                ------------                    -------------

Total Stockholders' Equity                                        7,661,000                        5,903,000
                                                                -----------                     ------------
Total Liabilities and Stockholders' Equity                      $ 9,779,000                     $  7,592,000
                                                                ===========                     =============


   The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>


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


                                                  Three Months Ended                           Six Months Ended
                                                        June 30,                                    June 30
                                                    2002            2001                     2002            2001
                                                   ----            ----                     ----            ----


<S>                                               <C>            <C>                    <C>             <C>
Net revenues                                      $6,300,000     $5,281,000             $11,809,000     $10,423,000

Costs of services                                  2,852,000      2,857,000               5,639,000       5,612,000
                                                 -----------     ----------             -----------     -----------

Gross margin                                       3,448,000      2,424,000               6,170,000       4,811,000
                                                 -----------     ----------             -----------     -----------

Operating expenses:

Selling, general and administration                2,109,000      1,761,000               4,003,000       3,436,000
Depreciation and amortization                        143,000        164,000                 288,000         339,000
                                                 -----------     ----------             -----------     -----------

Total operating expenses                           2,252,000      1,925,000               4,291,000       3,775,000
                                                 -----------     ----------             -----------     -----------

Operating income                                   1,196,000        499,000               1,879,000       1,036,000

Interest income - net                                 15,000         11,000                  29,000          19,000

Provision for income taxes                           104,000         45,000                 152,000          75,000
                                                 -----------     ----------             -----------     -----------

Net income                                         1,107,000        465,000               1,756,000         980,000
                                                 ===========     ==========             ===========     ===========

Net income
per share of common stock-basic and diluted             $.01           $.01                    $.02            $.01
                                                        ====           ====                    ====            ====

Weighted average number
of common shares outstanding -

     Basic                                        99,795,000     83,534,000              99,790,000      83,534,000
                                                 ===========     ==========             ===========     ===========

     Diluted                                     103,419,000     85,575,000             103,415,000      86,032,000
                                                 ===========     ==========             ===========     ===========

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3

<PAGE>



                      CAREADVANTAGE, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          Six Months Ended
                                                                June 30,                  June 30,
                                                                   2002                      2001
                                                                   ----                      ----

Cash flows from operating activities:

<S>                                                             <C>                     <C>
Net income                                                      $ 1,756,000             $ 980,000

Adjustments to reconcile net income to
net cash provided from operating activities:

     Depreciation and amortization                                  381,000               409,000
     Compensation due to option issuance                                  -                10,000

Change in assets and liabilities:

Accounts receivable                                                (362,000)              246,000
Other assets                                                       (219,000)              (86,000)
Accounts payable                                                   (181,000)             (178,000)
Accrued expenses and other liabilities                              610,000               182,000
                                                                -----------            ----------

Net cash provided by
operating activities                                              1,985,000             1,563,000
                                                                -----------            ----------

Cash flows from investing activities:

Capital expenditures                                               (833,000)             (233,000)
                                                                -----------            ----------

Cash flows from financing activities:

Transfer from restricted cash                                             -               150,000
Proceeds from issuance of Common Stock                                2,000                     -
                                                                -----------            ----------

Net cash provided by financing activities                             2,000               150,000
                                                                -----------            ----------

Net increase in cash                                              1,154,000             1,480,000

Cash - beginning of period                                        4,297,000             1,479,000
                                                                -----------            ----------

Cash - end of period                                             $5,451,000            $2,959,000
                                                                ===========            ==========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       4

<PAGE>



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

The condensed  consolidated financial statements as of June 30, 2002 and for the
three and six month  periods  ended June 30, 2002 and 2001 have been prepared by
CareAdvantage,  Inc. (the  "Company").  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 presented. All amounts contained
herein the financial statements, except per share data, have been rounded to the
nearest thousand.

Certain  information and note  disclosures  required to be included in condensed
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been omitted.  These  condensed  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements and notes thereto included with the Company's December 31,
2001 Annual  Report on Form  10-KSB.  The results of  operations  for the period
ended June 30, 2002 are not  necessarily  indicative of operating  results to be
expected for the full year.

Note B--Cancellation of Horizon BCBSNJ Contract:

In June 2002, Horizon BCBS of New Jersey ("Horizon BCBSNJ") notified the Company
that it was  terminating  the  existing  services  agreement  with the  Company,
effective January 1, 2003. The Company  recognized  approximately $14 million in
revenues in each of 2001 and 2000 from Horizon BCBSNJ on account of the services
arrangement.  After the Company  received  notice of  cancellation  from Horizon
BCBSNJ, management began discussions with Horizon BCBSNJ regarding a transaction
that would enable Horizon  BCBSNJ to perform for itself the activities  formerly
provided by the Company.

Note C--Per share data:

Basic net  income  per share has been  computed  based on the  weighted  average
number of shares  outstanding  during the periods.  Dilutive  earnings per share
reflects  the  potential  dilution  that could  occur if  dilutive  options  and
warrants outstanding were exercised and converted into common stock.

Note D--Contingencies:

Potential uninsured exposure to litigation:

On August 12, 1998,  Caruso v.  Petillo,  et al., was filed against the Company,
three of its former officers, John J. Petillo, Vincent M. Achillare and Lawrence
A.  Whipple,  and certain  others in  Superior  Court of New Jersey by Robert T.
Caruso, a former  consultant to the Company.  The complaint seeks damages in the
approximate  amount of $1.8 to $2.0 million on account of the termination of Mr.
Caruso's consulting  arrangement with the Company on a variety of legal theories
including  breach  of  contract,  fraud,  conspiracy,  promissory  estoppel  and
negligent   misrepresentation.   The  Company   received  a  written  claim  for
indemnification from defendants Petillo and Whipple and, subject to their having
acted in good  faith,  the  Company  agreed  to  indemnify  them  and  defendant
Achillare and to pay their  reasonable  defense costs. On February 16, 2001, the
court dismissed this action with prejudice with respect to defendant  Achillare.
In May 2001, the matter was scheduled for trial against the remaining defendants
-- the Company and Messrs.  Petillo and Whipple. Mr. Caruso was unable to attend
the trial due to his  incarceration in a Federal  Detention Center. As a result,
Mr.  Caruso and the  aforesaid  remaining  defendants  signed a  Stipulation  of
Dismissal, terminating the action, without prejudice, and the action was ordered
dismissed.  On April 29, 2002,  Mr. Caruso filed a motion to restore his action,
which motion was granted over the Company's  objection  and trial  scheduled for
October 2002. The Company  believes Mr.  Caruso's claims to be without merit and
plans to vigorously  contest them at trial. The Company has recorded a provision
for Mr. Caruso's claims,  but there can be no assurance that this provision will
be sufficient to satisfy these claims in the event Mr. Caruso prevails at trial.
The Company received notice from its directors and officers' liability insurance
carrier, Princeton Insurance Company, that it denied coverage in this matter; in
September 2001, the Company commenced  litigation  against  Princeton  Insurance
Company  contesting its decision to deny coverage and seeking damages therefore.
Princeton has denied liability in that lawsuit and has  counter-claimed  against
the  Company for its  attorneys'  fees in  defending  the  lawsuit.  The Company
believes the counterclaim is without merit.

                                       5

<PAGE>


Note E--Supplemental Cash Flow Information:

Below is supplemental cash flow information related to the six months ended June
30, 2002 and June 30, 2001:

                               June 30,             June 30,
                               --------             --------
                                  2002                2001
                                  ----                ----

Income taxes paid                6,000                31,000


Note F--Exercise of Stock Options

During the six months ended June 30, 2002, the exercise of certain employee
stock options resulted in the issuance of 13,000 shares of common stock.

                                       6

<PAGE>



                               CAREADVANTAGE, INC.

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 our  control,  which  could  cause  actual  results and
outcomes to differ  materially from those  expressed in this 10-QSB.  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, 2001.
Although we believe that our plans,  intentions  and  expectations  reflected in
these forward-looking  statements are reasonable,  we can give no assurance that
our plans, intentions or expectations will be achieved.



GENERAL OVERVIEW:

CareAdvantage,  Inc.  ("CAI"  or the  "Company")  and its  direct  and  indirect
subsidiaries,  CareAdvantage  Health  Systems,  Inc.  ("CAHS") and  Contemporary
HealthCare  Management,   Inc.  ("CHCM"),  are  in  the  business  of  providing
management and 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 management services include
care management program enhancement services,  executive and clinical management
services,  and training  programs;  the  healthcare  cost  containment  services
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, and independent reviews. The
Company's  management  services  have been  provided to  integrated  health care
delivery systems;  the Company's health care cost containment services have been
principally provided to several of the statewide Blue Cross/Blue Shield ("BCBS")
health service organizations in the United States.

In April 2002, the Company received  notification from Blue Cross Blue Shield of
Rhode Island  ("BCBSRI") that the existing services  arrangement  between BCBSRI
and the  Company  was  terminated,  effective  May 31,  2002.  The  Company  had
previously  given  notice in January 2002 that it was  terminating  the contract
effective July 31, 2002. This contract with BCBSRI  accounted for  approximately
9% of net revenues for the year ended December 31, 2001.

In June 2002,  the Company  received  notification  from Horizon Blue Cross Blue
Shield of New Jersey ("Horizon  BCBSNJ") that the existing services  arrangement
between  Horizon  BCBSNJ and the Company was  terminated,  effective  January 1,
2003. This contract with Horizon BCBSNJ accounted for  approximately  70% of net
revenues for the year ended December 31, 2001.



RESULTS OF OPERATIONS:

The following  discussion  compares the Company's  results of operations for the
three and six  months  ended  June 30,  2002,  with  those for the three and six
months ended June 30,  2001.  The  Company's  condensed  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 June 30, 2002, Compared to Three Months Ended June 30, 2001

Revenues:

The Company's  total operating  revenues for the three-month  periods ended June
30,  2002  and June 30,  2001  were  approximately  $6,300,000  and  $5,281,000,
respectively.  This represents an increase of  approximately  $1,019,000 for the
three-month  period  ended June 30,  2002 from the  corresponding  period of the
prior year.  The increase for the three months ended June 30, 2002 resulted from
an increase of approximately

                                       7

<PAGE>


$1,683,000   due  to  increased   business  with  Horizon   BCBSNJ,   offset  by
approximately  $324,000 of decreased  business with BCBSRI and decreased revenue
of approximately $340,000 from non-recurring consulting business.

Cost of services:

The Company's  total direct cost of services for the  three-month  periods ended
June 30, 2002 and June 30, 2001 was  approximately  $2,852,000  and  $2,857,000,
respectively.  This  represents  a  decrease  of  approximately  $5,000  for the
three-month  period  ended June 30,  2002 over the  corresponding  period of the
prior year.  The  decrease in the cost of services  for the  three-month  period
ended June 30, 2002 was primarily due to decreased professional costs and travel
costs, offset by an increase in personnel costs.

Operating expenses:

Selling, general, and administrative:

The  Company's  total  selling,   general,  and  administrative  costs  for  the
three-month  periods  ended June 30, 2002 and June 30,  2001 were  approximately
$2,109,000  and  $1,761,000,   respectively.  This  represents  an  increase  of
approximately  $348,000 for the three-month  period ended June 30, 2002 over the
corresponding period of the prior year. This increase for the three-month period
ended  June  30,  2002 is  primarily  due to  increases  in  personnel  costs of
approximately  $384,000, including  a  severance  pay  accrual of  approximately
$200,000,

Depreciation and amortization:

The Company's  total  depreciation  and  amortization  costs for the three-month
periods  ended June 30, 2002 and June 30, 2001 were  approximately  $206,000 and
$195,000, respectively.  Approximately $63,000 and $31,000 were included in cost
of services for such periods.

Interest income:

The Company's total net interest  income for the three-month  periods ended June
30, 2002 and June 30, 2001 was approximately $15,000 and $11,000,  respectively.
This represents an increase of  approximately  $4,000 in net interest income for
the three-month period ended June 30, 2001 from the corresponding  period of the
prior year.  The  increase in net  interest  income is largely due to  decreased
interest costs of approximately  $17,000 offset by decreased  interest income of
approximately $13,000 from the Company's short-term investments.



Six Months Ended June 30, 2002, Compared to Six Months Ended June 30, 2001

Revenues:

The Company's total operating  revenues for the six-month periods ended June 30,
2002  and  June  30,  2001  were  approximately   $11,809,000  and  $10,423,000,
respectively.  This represents an increase of  approximately  $1,386,000 for the
six-month period ended June 30, 2002 from the corresponding  period of the prior
year.  The  increase  for the six months  ended June 30, 2002  resulted  from an
increase of  approximately  $2,526,000  due to increased  business  with Horizon
BCBSNJ,  offset by approximately  $140,000 of decreased business with BCBSRI and
decreased  revenue of  approximately  $1,000,000 from  non-recurring  consulting
business.

Cost of services:

The Company's total direct cost of services for the six-month periods ended June
30,  2001  and  June  30,  2000 was  approximately  $5,639,000  and  $5,612,000,
respectively.  This  represents  an  increase of  approximately  $27,000 for the
six-month period ended June 30, 2002 over the corresponding  period of the prior
year.  The increase in the cost of services for the six-month  period ended June
30,  2002 was  primarily  due to  increased  personnel  costs  of  approximately
$536,000,  offset by decreased costs of approximately  $242,000 for travel costs
and professional costs of approximately $289,000.


                                       8

<PAGE>


Operating expenses:

Selling, general, and administrative:

The Company's total selling, general, and administrative costs for the six-month
periods ended June 30, 2002 and June 30, 2001 were approximately  $4,003,000 and
$3,436,000,  respectively. This represents an increase of approximately $567,000
for the six-month  period ended June 30, 2002 over the  corresponding  period of
the prior year.  The  increase for the  six-month  period ended June 30, 2002 is
primarily  due to  increases in personnel  costs of  approximately  $515,000 and
facility costs of approximately $48,000.

Depreciation and amortization:

The  Company's  total  depreciation  and  amortization  costs for the  six-month
periods  ended June 30, 2002 and June 30, 2001 were  approximately  $381,000 and
$409,000, respectively.  Approximately $93,000 and $70,000 were included in cost
of services for such periods.

Interest income:

The Company's total net interest income for the six-month periods ended June 30,
2002 and June 30, 2001 was approximately $29,000 and $19,000, respectively. This
represents an increase of  approximately  $10,000 in net interest income for the
six-month period ended June 30, 2002 from the corresponding  period of the prior
year. The increase in net interest  income is largely due to decreased  interest
costs  of  approximately   $43,000  offset  by  decreased   interest  income  of
approximately $33,000 from the Company's short-term investments.



LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES:

General overview:

At June 30, 2002, the Company had working capital of  approximately  $5,834,000,
stockholders equity of approximately $7,661,000 and an accumulated deficit since
its inception of approximately  $16,241,000.  However,  the Company's operations
have been significantly impacted by the events described below.

Significant Development:

As stated above,  in June 2002,  Horizon BCBSNJ notified the Company that it was
terminating the existing services agreement with the Company,  effective January
1, 2003. The Company recognized approximately $14 million in revenues in each of
2001  and  2000  from  Horizon  BCBSNJ  due to  the  services  arrangement.  The
termination of this services  arrangement  may have a significant  impact on the
Company's  business.  Management is currently  assessing the Company's  options,
including a transaction  that would enable  Horizon BCBSNJ to perform for itself
the  activities  formerly  provided  by the  Company,  and the Company has begun
discussions with Horizon BCBSNJ regarding that transaction.  Alternatively,  the
Company will be required to  significantly  reduce its  operations  to match its
remaining  revenues and focus on  alternate  sources of revenues to continue and
build its business. 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 June 30, 2002, the Company had cash of  approximately  $5,451,000 and working
capital of approximately  $5,834,000. At December 31, 2001, the Company had cash
of approximately $4,297,000 and working capital of approximately $4,525,000.


                                       9

<PAGE>


Net cash provided by operating  activities amounted to approximately  $1,985,000
and $1,563,000 for the six-month  periods ended June 30, 2002 and June 30, 2001,
respectively.  The increase in cash provided  from 2002  activities is primarily
due to $1,756,000 in net income.

Net cash used in investing  activities  amounted to  approximately  $833,000 and
$233,000  for the  six-month  periods  ended  June 30,  2002 and June 30,  2001,
respectively.  The increase in cash used is due to capital  expenditures  during
the six-month period ended June 30, 2002.

Net cash provided by financing  activities amounted to approximately  $2,000 and
$150,000  for the  six-month  periods  ended  June 30,  2002 and June 30,  2001,
respectively.  The decrease in cash is due to a transfer of  restricted  cash of
approximately  $150,000 and an increase of  approximately  $2,000 from of common
stock issuance.

In light of the termination of the services  agreement with BCBSNJ,  the Company
will need to reduce its operations  significantly and concentrate on building up
its remaining sources of revenues to continue to operate.  While there can be no
assurances,  management believes that its cash on hand and projected future cash
flows from operations will support the Company's  anticipated cash needs for the
next twelve months.

                                       10

<PAGE>

PART II--OTHER INFORMATION

Item 1.  Legal Proceedings

On or about March 12, 2002, the Company commenced an action in Superior Court of
the State of Rhode Island against Blue Cross & Blue Shield of Rhode Island and
Coordinated Health Partners (the defendants collectively, "Blue Cross"). The
suit arises out of the agreement among the parties, effective as of January 1,
2000 (the "Agreement"), pursuant to which the Company had been providing
services. The Company is seeking declaratory relief including judgment (i) that
the Company's failure to attain certain performance goals ("Performance Goals")
under the Agreement was as a result Blue Cross's conduct, (ii) that Blue Cross
lacks cause to terminate the Agreement based on the Company's failure to meet
the Performance Goals, and (iii) that the Company is entitled to compensation
under the Agreement, including compensation for having been deemed to have met
the Performance Goals. In addition, the suit seeks equitable relief and damages
with respect to Blue Cross's hiring a physician formerly employed by the
Company.

For a description of additional legal proceedings, see Note D to the Financial
Statements. With the exception of the legal proceedings described above and in
Note D 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 and Use of Proceeds

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 June 30, 2002.

Item 5.  Other Information

None.

Item 6. Exhibits and reports on Form 8-K

(a)      Exhibits

           None.

(b)      Reports on Form 8-K.

           On June 10, 2002, the Company filed a Report on Form 8-K, dated June
           6, 2002, under Items 4 and 7 of Form 8-K, announcing that the Company
           was notified by its auditor, Arthur Andersen LLP, that its
           client-auditor relationship with Arthur Andersen LLP was terminated
           as of that date.

           On June 27, 2002, the Company filed a Report on Form 8-K, dated June
           19, 2002, under Items 5 and 7 of Form 8-K, announcing that the
           Company was notified by Horizon BCBS of New Jersey that Horizon was
           terminating the existing services arrangement with the Company,
           effective January 1, 2003.



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<PAGE>



                                   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.



August 12, 2002             /s/ Dennis J. Mouras
                            ------------------------------
                                Dennis J. Mouras
                                Chief Executive Officer



August 12, 2002             /s/ R. Christopher Minor
                            ------------------------------
                                R. Christopher Minor
                                Chief Financial Officer


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