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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                   FORM 10-K

(MARK ONE)

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<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</Table>

                   FOR THE FISCAL YEAR ENDED JANUARY 31, 2001

<Table>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</Table>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 0-27568

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

                      INNOVATIVE CLINICAL SOLUTIONS, LTD.
             (Exact name of registrant as specified in its charter)

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<S>                                                           <C>
                          DELAWARE                                         65-0617076
                  (State of incorporation)                    (I.R.S. Employer Identification No.)

  10 DORRANCE STREET, SUITE 400, PROVIDENCE, RHODE ISLAND                    02903
          (Address of principal executive offices)                         (Zip Code)
</Table>

       Registrant's telephone number, including area code: (401) 831-6755

          Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

          Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, PAR VALUE $0.01 PER SHARE

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

    Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such Reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes / /  No /X/

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definite proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K.  / /

    On June 28, 2001, the aggregate market value of the Common Stock of the
registrant held by non-affiliates of the registrant was $3,839,671.04. On
June 28, 2001, the number of outstanding shares of the registrant's Common
Stock, par value $0.01 per share, was 11,998,972.

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                               TABLE OF CONTENTS

<Table>
<S>                                                           <C>
PART I......................................................    1
  Item 1. Business..........................................    1
    General.................................................    1
    Repositioning...........................................    1
    Recapitalization........................................    2
    The Company's Business and Opportunity..................    3
    Clinical Research.......................................    4
    Clinical Investigative Site Management Services.........    4
    Provider Network Management.............................    5
    Divestitures............................................    5
    Potential Liability and Insurance.......................    5
    Government Regulation...................................    6
    Employees...............................................    7
  Item 2. Properties........................................    7
  Item 3. Legal Proceedings.................................    7
  Item 4. Submission of Matters to a Vote of Security
    Holders.................................................    9
PART II.....................................................    9
  Item 5. Market price of and dividends on the Registrant's
    Common Equity and Related Stockholder Matters...........    9
  Item 6. Selected Financial Data...........................   10
  Item 7. Management's Discussion and Analysis of Financial
    Condition and Results of
    Operations..............................................   12
    Introduction............................................   12
    Accounting Treatment....................................   12
    Results of Operations...................................   14
    The Year Ended January 31, 2001 Compared to the Year
     Ended January 31, 2000.................................   15
    The Year Ended January 31, 2000 Compared to the Year
     Ended January 31, 1999.................................   17
    Liquidity and Capital Resources.........................   20
    Recent Accounting Pronouncements and Other Matters......   22
    Factors to be Considered................................   22
  Item 7A. Quantitative and Qualitative Disclosures About
    Market Risk.............................................   26
  Item 8. Financial Statements and Supplementary Data.......   26
  Item 9. Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure.....................   26
PART III....................................................   27
  Item 10. Directors and Executive Officers of the
    Registrant..............................................   27
  Item 11. Executive Compensation...........................   29
    Employment Agreements...................................   31
  Item 12. Security Ownership of Certain Beneficial Owners
    and Management..........................................   33
    Security Ownership of 5% Beneficial Owners..............   33
    Security Ownership of Directors and Officers............   33
    Section 16(a) Beneficial Ownership Reporting
     Compliance.............................................   34
  Item 13. Certain Relationships and Related Transactions...   34
PART IV.....................................................   35
  Item 14. Financial Statement Schedule and Reports on Form
    8-K.....................................................   35
SIGNATURES..................................................   37
Index to Consolidated Financial Statements..................  F-1
</Table>

                                       i
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                                     PART I

ITEM 1. BUSINESS

    GENERAL

    Innovative Clinical Solutions, Ltd. (together with its subsidiaries, the
"Company" or "ICSL") (formerly PhyMatrix Corp.) operates two business lines:
pharmaceutical services, including investigative site management, clinical and
outcomes research and disease management and single-specialty provider network
management. The Company began its operations in 1994 and closed the initial
public offering of its then existing common stock (the "Old Common Stock") in
January 1996. Its primary strategy was to develop management networks in
specific geographic locations by affiliating with physicians, medical providers
and medical networks. The Company affiliated with physicians by acquiring their
practices and entering into long-term physician practice management ("PPM")
agreements with the acquired practices and by managing independent physician
associations ("IPAs") and specialty care physician networks through management
service organizations ("MSOs") in which the Company had ownership interests. In
order to expand its service offerings and to take advantage of the higher
margins resulting from clinical studies, the Company acquired Clinical
Studies Ltd. ("CSL") in October 1997. By 1998, the Company had become an
integrated medical management company that provided medical management services
to the medical community, certain ancillary medical services to patients and
medical real estate development and consulting services to related and unrelated
third parties.

    REPOSITIONING

    In early 1998, the medical services industry, and in particular the PPM
industry became the subject of concerted negative scrutiny from industry
analysts. Health maintenance organizations ("HMOs") and other insurers had
reduced the amount of their reimbursements and new types of contracts had put
the managed practices at increased risk of losing money when medical costs rose.
In addition, the high profile bankruptcies of several large managed practices
and reported losses in the hundreds of millions for PPM companies resulted in a
perception that the PPM industry could not remain viable. The negative publicity
surrounding the PPM industry at that time created significant investor
skepticism from which the industry has never recovered.

    Although the Company was a diversified health care provider (its PPM sector
represented only 12.1% of its fiscal 1998 revenues), the Company was
nevertheless viewed by the market as a PPM provider, resulting in a substantial
decline in the Company's stock price. In May 1998, the Company began evaluating
various strategic alternatives available to it and in August 1998, the Company's
Board of Directors approved several strategic initiatives designed to reposition
the Company as a significant company in pharmaceutical contract research,
specifically clinical trials site management and outcomes research. In
furtherance of this goal, the Company subsequently determined to link its
physician networks with its site management and outcomes research operations.

    During the year ended January 31, 1999, the Board approved, consistent with
achieving its stated repositioning goal, a plan to divest and exit the Company's
PPM business and certain of its ancillary services businesses, including
diagnostic imaging, lithotripsy and radiation therapy, home health and infusion
therapy. In the second quarter of fiscal 2000, the Company also decided to
divest its investments in a surgery center and a physician network, and sell its
real estate service operations. All of these identified assets held for sale had
been sold as of April 30, 2000.

    Due to market conditions affecting health care services companies generally,
the Company realized lower than expected proceeds from its asset divestitures.
The Company reported a net loss for the year ended January 31, 1999 of
$130.8 million, which included an extraordinary charge of $96.8 million and a
$10.5 million nonrecurring expense related to its divestitures. The Company
reported a net loss for the fiscal year ended January 31, 2000 of
$171.2 million, which included an extraordinary charge of

                                       1
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$49.6 million which was primarily related to the divestitures. These losses and
the Company's highly leveraged position, due principally to its $100 million
6 3/4% Convertible Subordinated Debentures due 2003 (the "Debentures"), left the
Company without the financial resources to execute its strategic plan to grow
the research, clinical trials and network management sectors of its business.

    RECAPITALIZATION

    In order to reduce its indebtedness, the Company entered into discussions
with the owners of more than 50% of the principal amount of the Debentures
regarding the possible exchange of some or all of the Debentures for equity in
order to reduce the Company's debt burden and improve the Company's ability to
execute its strategy for improving its business and financial condition. These
negotiations resulted in a prepackaged plan of reorganization under Chapter 11
of the Bankruptcy Code (the "Prepackaged Plan"), which provided for the
recapitalization of the Company through the exchange of newly issued common
stock of the Company (the "New Common Stock"), representing 90% of the issued
and outstanding capital stock following the recapitalization, for all of the
Debentures. In addition, the Prepackaged Plan provided for the cancellation of
all outstanding Old Common Stock and its replacement with New Common Stock
representing 10% of the Company's issued and outstanding capital stock following
the recapitalization.

    On May 17, 2000, the Company's Board of Directors approved, and on June 12,
2000, the Company distributed, a Pre-petition Solicitation and Disclosure
Statement with Respect to Joint Prepackaged Plan of Reorganization (the
"Disclosure Statement"), which solicited acceptances of the Prepackaged Plan
from the holders of the Debentures (the "Debentureholders"). The
Debentureholders constituted the only impaired class of creditors under the
Prepackaged Plan and, accordingly, the only class entitled to vote on the
Prepackaged Plan. The voting period for the solicitation ended on July 12, 2000.
The solicitation resulted in the acceptance of the Prepackaged Plan by the
Debentureholders with respect to both the number (more than one-half of the
number of Debentureholders that actually voted) and amount (Debentureholders
holding at least two-thirds of the principal amount of the Debentures actually
voted) as required for confirmation of the Prepackaged Plan under the Bankruptcy
Code. Accordingly, on July 14, 2000 the Company and its subsidiaries filed joint
petitions under Chapter 11 of the Bankruptcy Code. Following a hearing held on
August 23, 2000, the Bankruptcy Court entered an order confirming the Company's
Prepackaged Plan on August 25, 2000. On September 21, 2000 the Company satisfied
all conditions precedent to the effectiveness of the Prepackaged Plan and,
accordingly, the Prepackaged Plan became effective on such date (the "Effective
Date").

    On the Effective Date, the Debentures, the Company's issued and outstanding
Old Common Stock and the Old Other Interests (as defined in the Prepackaged
Plan) were canceled and extinguished. Under the Prepackaged Plan, each
Debentureholder received for each $1,000 in face amount of the Debentures held
by such holder on the Effective Date, 108 shares of New Common Stock and each
existing stockholder received for each 31 shares of Old Common Stock held by
such stockholder on the Effective Date, 1 share of New Common Stock. New Common
Stock was issued in whole shares only, with any fractional share amounts rounded
up or down, as applicable. As a result of the Prepackaged Plan, 10.8 million
shares of New Common Stock are held by the former Debentureholders and
approximately 1.2 million are held by former holders of Old Common Stock.

    Under the Prepackaged Plan, claims of all other creditors, whether secured
or unsecured, were unimpaired. The Company continued to pay all general
unsecured claims during the pendency of the bankruptcy proceedings in the
ordinary course of business. On the Effective Date, the Company's existing
credit facility was repaid in full and the Company entered into a new revolving
credit facility which is secured by security interests in substantially all of
the Company's assets, including inventory, accounts receivable, general
intangibles, equipment and fixtures. (See Note 9).

                                       2
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    On the Effective Date, the Company's 2000 Stock Option Plan became effective
and the Company granted options to purchase 2,028,570 shares of its New Common
Stock to its executive officers and certain of its non-employee directors. In
addition, the Company entered into employment agreements with the Company's
President and Chief Executive Officer and four other executive officers.

    THE COMPANY'S BUSINESS AND OPPORTUNITY

    The Company's strategic goal is to become a leader in the development of
innovative healthcare solutions capable of meeting the current and emerging
research, marketing and operations demands of the pharmaceutical and managed
care industries. The Company intends to leverage its key competencies--clinical
trial site management and outcomes research--to provide solutions that benefit
pharmaceutical companies. The Company will attempt to accelerate the rate of
Food and Drug Administration ("FDA") approval of pharmaceutical products for its
clients and enhance market acceptance of such products. Since the Effective
Date, the Company has increased its existing base of Phase I through Phase IV
research locations from 42 to 53. The Company plans to carefully review its
existing sites and eliminate those sites which are not performing well. In
addition, the Company intends to achieve growth through merger or consolidation
with other companies in the clinical research management field. In this manner,
the Company believes that it will more quickly be able to achieve the critical
mass necessary to enhance profitability. The Company will also continue to seek
exclusive contractual relationships with existing locations, both dedicated
research sites and busy physician group practices.

    The Company provides its clinical and outcomes research services through its
wholly owned subsidiary, CSL, a multi-therapeutic site management organization
("SMO") based in Providence, Rhode Island and the healthcare research
organization division of CSL. CSL provides clinical investigative site
management services to 53 research facilities in 22 states and the District of
Columbia. The Company owns and centrally manages Phase I through IV research
facilities where the Company conducts clinical trials for the pharmaceutical and
biotechnology industries and contract research organizations ("CROs"). The
Company also provides a broad range of pre- and post-FDA approval services
designed to expedite new product approval and market acceptance. The Company has
participated in clinical trials and enrolled patients in studies involving
central nervous system, asthma and allergy, respiratory, oncology, endocrinology
and women's health. The Company is negotiating the sale of its oncology sites to
a potential purchaser in order to maximize stockholder value and focus on core
therapeutic areas that have the highest historical values.

    Through the healthcare research organization division, the Company also
designs and conducts customized economic and epidemiological research. The
Company provides an environment for proactively collecting medical and economic
data, thereby linking clinical with "real life" marketing considerations and
quality cost-effective patient outcomes.

    The Company currently provides network management services through specialty
care physician networks. These services include network development, medical
management and managed care contracting. The Company also currently provides
management expertise and services to managed care organizations. These services
allow managed care organizations to provide efficient, cost-effective healthcare
delivery while maintaining access to high-quality providers.

    The Company initially intended to link, and thereby leverage, its specialty
and multi-specialty networks with its clinical trials site management and
outcomes research business lines. However, the Company has not been able to
achieve the synergy it had anticipated from the integration of the two lines of
business and no longer considers the continued expansion of its network
management division to be critical to the growth and success of the clinical
trials site management operations. Moreover, the Company believes that the
market does not fairly value the network management and clinical trials business
lines on a combined basis and, accordingly, proposes to sell its network
management division

                                       3
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in order to increase stockholder value and provide resources to support growth
in its clinical studies segment. The Company believes that divestiture of the
network management division would permit increased focus on its clinical trials
and research expansion. The Company may consider other strategic alternatives to
increase stockholder value, including the possible sale or merger of the Company
or its CSL subsidiary.

    The Company's two business lines are described in more detail below.

    CLINICAL RESEARCH

    The clinical research industry is driven by the need of the pharmaceutical
and biotechnology companies to thoroughly test new drugs prior to
commercialization in accordance with strict government regulations imposed by
the FDA in the United States and various international authorities. Competitive
and cost-containment pressures are forcing the pharmaceutical and biotechnology
industries to become more efficient in developing new drugs. To improve returns
on research and development investments, pharmaceutical and biotechnology
companies ("Sponsors") are expanding their product pipelines and attempting to
shorten the product development process. In response to similar pressures in the
healthcare industry, many hospitals, physicians and other healthcare providers
have added clinical research capabilities as an additional revenue source.
Clinical research allows healthcare providers to extend their core competencies
and leverage their direct access to patients. Sponsors have attempted to create
efficiencies, control fixed costs and expand capacity by outsourcing certain
drug development and clinical research activities to CROs and SMOs. Although the
amount of clinical research that is outsourced varies by Sponsor, the Company
believes that Sponsors will continue to increase the amount of outsourcing for a
variety of reasons, including the ability to obtain temporary access to a
particular therapeutic focus and expertise to develop products for many
diseases.

    CLINICAL INVESTIGATIVE SITE MANAGEMENT SERVICES

    The Company provides clinical investigative site management services to 53
research facilities throughout the United States. The Company owns and centrally
manages Phase I through Phase IV research facilities which provide a broad range
of pre- and post-FDA approval services designed to expedite new product approval
and market acceptance. The Company conducts clinical research in a wide variety
of therapeutic areas, including central nervous system, asthma and allergy,
respiratory, oncology, endocrinology and women's health. Services include
project initiation (contracting, budgeting and regulatory approvals), program
and trial design, project management, patient recruitment and data collection.
The Company is able to provide pharmaceutical companies and CROs with access to
patients and cost-effective organization of data collection. Clinical trials
represent one of the most expensive and time-consuming parts of the overall drug
development process. A trial's success depends on the successful recruitment of
patients to participate in and experienced physicians (and other medical
professionals) to serve as investigators for the clinical trials. The Company
has direct access to approximately 220 investigators through its 53 sites. The
speed with which trials can be completed is also significantly affected by the
rate at which patients who satisfy the requirements of the trial's protocol can
be identified and enrolled.

    Clinical trials must be monitored for strict adherence to good clinical
practices ("GCP"). The Company's training programs, standard operating
procedures and quality assurance and control programs aid the clinical
investigators and their staff in following GCP and the established protocols of
the studies. The Company has adopted standard operating procedures that are
intended to satisfy regulatory requirements and serve as a tool for controlling
and enhancing the quality of the Company's nationwide clinical trial services.

                                       4
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    PROVIDER NETWORK MANAGEMENT

    The Company currently provides network management services through single
specialty provider networks for the benefit of managed care organizations. These
services allow managed care organizations to provide efficient, cost-effective
healthcare delivery while maintaining access to high-quality providers. The
Company develops specialty care networks within which the affiliated physicians
are responsible for providing all or a portion of specific healthcare services
to a particular patient population.

    The Company provides such services as initiating and completing contract
negotiations, claim adjudication processing, financial, quality assurance and
utilization management reporting, credentialing, network management (such as
provider relations and recruitment), financial management (which involves risk
pool management) and providing payment arrangements for providers and shared
member services with health plans. Currently, the Company does not share in any
downside capitation risk. Its network specialties include allergy, chiropractic,
dermatology, gastroenterology, podiatry, pulmonary, physical therapy and
urology. Because the Company believes that the market does not fairly value its
network management assets, it plans to divest itself of this division. The
Company has hired Shattuck Hammond Partners to assist it in identifying
potential buyers for the network management division. There can be no
assurances, however, that the Company will be able to find a willing buyer for
its network management division or that any such buyer will pay a price that
reflects what the Company believes to be the division's fair value.

    DIVESTITURES

    In connection with its repositioning and as part of its strategic plan,
during 1998, 1999 and the first quarter of 2000 the Company terminated
substantially all of its individual and group physician practice management
arrangements and divested itself of related assets for an aggregate sale price
of $19.7 million. This aggregate sale price reflects its retention of certain
accounts receivable and payment by it of $6.8 million in connection with the
termination of certain of its employed physicians. In addition, the Company sold
and divested itself of its ancillary medical service businesses such as
diagnostic imaging, radiation therapy, lithotripsy services and infusion therapy
and its real estate services for an aggregate sale price of $64 million. This
aggregate sale price includes $10 million of retained accounts receivable from
the imaging division.

    Since the end of the fiscal year, the Company has sold an undeveloped tract
of land in Sarasota, Florida for $1.8 million. The net proceeds of this sale
were used to pay down the Company's credit facility. The Company has entered
into an agreement to sell its 21 oncology sites for $2.5 million. The Company
plans to use the proceeds from the sale of the oncology sites to pay down its
credit facility (see Note 20--Subsequent Events). In addition, the Company plans
to divest itself of its network management assets. There can be no assurances
that the Company will be able to find a willing buyer or buyers for its assets
held for sale or that any such buyer or buyers will pay a price that reflects
what the Company believes is the fair value of such assets.

    Revenues for the assets held for sale segment (including real estate
operations for 1999) were 5.9%, 49.6%, and 53.4% of total revenues for the years
ended January 31, 2001, 2000, and 1999, respectively.

    POTENTIAL LIABILITY AND INSURANCE

    The Company is subject to medical malpractice, personal injury and other
liability claims related to the operation of its clinical studies business,
healthcare facilities and provision of other healthcare services.

                                       5
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    Clinical trials involve the testing of approved and non-approved drugs on
human beings. This testing carries with it a significant risk of liability for
personal injury or death to participants resulting from an adverse reaction to,
or improper administration of, the trial drug. Many clinical trial participants
are seriously ill and are at great risk of further illness or death as a result
of factors other than their participation in the trial. The Company contracts on
behalf of Sponsors with physicians who render professional services, including
administering the drugs being tested, to participants in these trials. Company
personnel and subcontractors also render professional services to participants
in trials and are materially involved in the patient treatment process.
Consequently, the Company may be subject to claims in the event of personal
injury or death of persons participating in clinical trials and arising from
professional malpractice of physicians with whom it has contracted and its own
employees.

    The Company believes that the risk of liability associated with clinical
trials is mitigated by various regulatory requirements, including the role of
independent review boards ("IRBs"). An IRB is an independent committee that
includes medical and non-medical personnel and is obligated to protect the
interests of patients enrolled in the trials. The FDA requires each human
clinical trial to be reviewed and approved by the IRB at each research site.
After the trial begins, the IRB monitors the protocol and the measures designed
to protect patients, such as the requirement to obtain informed consent. In
addition, regulations governing the conduct of clinical trials and the
protection of human subjects place responsibility for proper study conduct and
subject protection directly on the principal investigator at each location where
a study is performed.

    The Company maintains liability and medical professional insurance policies
with such coverage and deductibles as are deemed appropriate by management,
based upon historical claims, industry standards and the nature and risks of its
business. There can be no assurance that a future claim will not exceed
available insurance coverage or that such coverage will continue to be available
for the same scope of coverage at reasonable premium rates. Any substantial
increase in the cost of such insurance or the unavailability of any such
coverage could have a material adverse effect on the Company's business.

    GOVERNMENT REGULATION

    The clinical investigation of new drugs is highly regulated by government
agencies to ensure the products are safe and effective before broad public use.
Before a new drug may be approved and marketed, the drug must undergo extensive
testing and regulatory review in order to determine that the drug is safe and
effective. The standard for the conduct of clinical research and development
studies comprises GCP, which stipulates procedures designed to ensure the
quality and integrity of data obtained from clinical testing and to protect the
rights and safety of clinical subjects. While GCP has not been formally adopted
by the FDA, or, with certain exceptions, by similar regulatory authorities in
other countries, some provisions of GCP have been included in regulations
adopted by the FDA. Furthermore, in practice, the FDA and many other regulatory
authorities require that study results submitted to such authorities be based on
studies conducted in accordance with GCP.

    The clinical investigative site management services provided by the Company
are ultimately subject to FDA regulation in the United States. The Company is
obligated to comply with FDA requirements governing such activities as obtaining
patient informed consents, verifying qualifications of investigators, reporting
patients adverse reactions to drugs and maintaining thorough and accurate
records. The Company must maintain documents for each study for specified
periods, and the study sponsor and the FDA during audits may review such
documents. If FDA audits indicate that the Company has failed to adequately
comply with federal regulations and guidelines, it could have a material adverse
effect on the Company's results of operations, financial condition and
reputation. In addition, non-compliance with GCP can result in the
disqualification of data collected during a clinical trial.

                                       6
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EMPLOYEES

    As of June 4, 2001, the Company employed approximately 450 persons, nearly
all of whom were full-time employees. The Company believes that its labor
relations are good.

ITEM 2. PROPERTIES

    The Company leases approximately 19,000 square feet of space in Providence,
Rhode Island where the Company's headquarters are located. The lease commenced
in 1997 and expires in 2004.

    The Company also leases 19 clinical research sites in 10 states, 1 network
management site and 1 healthcare research site.

    These sites are listed below:

<Table>
<Caption>
                                                              SIZE       LEASE
                                                            (SQUARE    EXPIRATION
LOCATION                                                     FEET)        DATE
--------                                                    --------   ----------
<S>                                                         <C>        <C>
Ft. Myers, FL.............................................   11,852       2008
1st St., Ft. Lauderdale, FL...............................    5,230       2005
Broward Blvd., Ft. Lauderdale, FL.........................   10,256       2005
Boynton Beach, FL.........................................    6,147       2008
Palm Beach Gardens, FL....................................   14,991       2008
Tampa, FL.................................................    2,292       2002
Sarasota, FL..............................................    8,456       2005
St. Petersburg, FL........................................   13,100       2002
Eau Gallie Blvd., Melbourne, FL...........................    4,847       2005
Atlanta, GA...............................................    6,726       2004
Normal, IL................................................    4,096       2002
Peoria, IL................................................    1,850       2001
Yarmouth, MA..............................................    3,140       2005
Dartmouth, MA.............................................    6,809       2003
Waltham, MA...............................................   11,357       2005
Charlotte, NC.............................................    3,776       2002
Las Vegas, NV.............................................    3,000       2002
Philadelphia, PA..........................................    6,267       2004
Pittsburgh, PA............................................    3,622       2004
East Providence, RI.......................................    9,600       2004
Falls Church, VA..........................................    8,413       2005
</Table>

    In addition, the Company leases 5 other locations relating to businesses
that have been sold.

ITEM 3. LEGAL PROCEEDINGS

    The Company is subject to legal proceedings in the ordinary course of its
business. The Company does not believe that any such legal proceeding, either
singly or in the aggregate, will have a material adverse effect on the Company
although there can be no assurance to this effect.

    As described above under Part I, Item 1, Business, the Company and its
wholly owned subsidiaries emerged from bankruptcy proceedings under Chapter 11
on September 21, 2000.

    In connection with a May 1997 joint venture partnership (the "Joint
Venture") between the Company and Tenet Healthsystem Hospitals, Inc. ("Tenet")
to own and operate an ambulatory surgical center and diagnostic radiology
facility in Florida, Tenet filed suit against the Company on September 23, 1999
in the Palm Beach County Circuit Court (Florida) for (1) rescission of the Joint

                                       7
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Venture agreement and (2) damages of approximately $2.0 million for breach of
contract, breach of fiduciary duty, and breach of good faith and fair dealing
(the "Tenet Suit"). The Tenet Suit chiefly alleges that the Company engaged in
self-dealing to the detriment of Tenet and failed to meet its obligations under
the Joint Venture agreement, such obligations relating principally to certain
financial commitments concerning the Joint Venture. This litigation has been
stayed to allow the parties to negotiate an unwinding of the Joint Venture and
review the potential for a negotiated settlement. There has been no activity by
Tenet with respect to the Tenet Suit since March 29, 2000 when Tenet sent a
letter to the Company regarding a possible settlement, which was rejected by the
Company. If the parties are unable to reach agreement, the Company intends to
file counterclaims against Tenet and defend the case.

    The Company received a demand for and notice of intention for arbitration
from Ray-X Medical Imaging Center ("Ray-X") in early 2000. The matter remained
dormant until Ray-X reiterated the demand in the Fall of 2000. The demand seeks
arbitration of a dispute arising from a purchase agreement executed by the
parties in December 1997. The thrust of the claims appears to be that the
Company misrepresented the value of ICSL shares used to purchase assets from
Ray-X and/or negligently managed the acquired entity once the transaction was
complete. The Company believes that these allegations are unwarranted and plans
to defend the matter vigorously. Arbitration proceedings have commenced and
initial discovery has been exchanged.

    On May 12, 2000 ICSL filed suit against Pharmaceutical Research
Associates, Inc. ("PRA") and International Medical Technical Consultants, Inc.
("IMTC") in the Rhode Island Superior Court (C.A. No. 00-2478). The Company
alleged breach of contract and fraud arising out of the purchase of a company
known as The Crucible Group. ICSL seeks approximately $500,000 in damages. On
October 27, 2000 PRA and IMTC filed an answer and counterclaim in that action,
seeking approximately $400,000 in damages arising from The Crucible Group
transaction. The Company is exploring settlement options with PRA and IMTC. If
the Company is not able to settle this matter satisfactorily, it intends to
pursue its claim and defend the counterclaim.

    On February 20, 2001, Peter J. Almeroth, the Bond Opportunity Fund II, LLC
and Steven L. Gidumal (collectively, the "Plaintiffs") filed an adversary
proceeding (C.A. No. A-01-115) against the Company, PBG Medical Mall MOB 1
Properties, Ltd., EQSF Advisors, Inc., 3801 PGA Investors, Ltd., Third Avenue
Trust, Third Avenue Value Fund Series, Aggressive Conservative Investment Fund,
L.P. and The Chase Manhattan Bank N.A. (the "Adversary Proceeding") in the
United States Bankruptcy Court for the District of Delaware seeking to revoke
the order of confirmation (the "Confirmation Order") of the Prepackaged Plan.
The Plaintiffs allege that the Confirmation Order was procured by means of fraud
based on alleged concealment of significant actual or potential conflicts of
interest and misrepresentations. The Company has filed a motion to dismiss this
action and awaits a ruling on the matter. The Company believes that the
allegations contained in the Adversary Proceeding are without merit and intends
to continue to defend the case vigorously.

    In February 2001, Medical Office Portfolio Properties Limited Partnership
("MOPP") filed a complaint against the Company and PhyMatrix Management
Company, Inc. ("PMCI") in the Palm Beach County Florida Circuit Court (Case No.
CL01 1898AF) seeking damages of approximately $2.3 million for breach of lease
for the premises located in Jupiter, Florida. The Company currently is
evaluating its defenses to this complaint and exploring possible settlement
options.

    In February 2001, MOPP filed a complaint against the Company and PMCI in
Palm Beach County Florida Circuit Court (Case No. CL01 1901AB) seeking damages
of approximately $1.3 million for breach of lease for the premises located in
Palm Bay, Florida. The Company currently is evaluating its defenses to this
complaint and exploring possible settlement options.

                                       8
<Page>
    In March 2001, Biltmore Investors Limited Partnership filed a complaint
against CSL in Arizona Superior Court (Maricopa County) (No. CV2001-003880)
seeking damages of approximately $1.3 million for breach of lease for the
premises located in Phoenix, Arizona. The Company currently is evaluating its
defenses to this complaint and exploring possible settlement options.

    In conjunction with a physician practice management agreement with a
physician practice in Florida, the Company has filed suit against the practice
to enforce the guarantees executed in connection with the management agreement.
The practice has filed a counterclaim alleging fraudulent inducement and
illegality of the management agreement. The Company currently is in settlement
negotiations with respect to this matter. If the Company is not successful in
obtaining a satisfactory negotiated settlement, it intends to vigorously
prosecute the case and defend the counterclaim.

    In July 2001, Marvin Stein, M.D. filed a complaint against the Company,
PhyMatrix Corp., PhyMatrix Urology Network, inc. and Physicians Consultant and
Management Corporation in the Circuit Court, Palm Beach County, Florida (Case
No. CA '01-06945AH). The suit alleges breach of a November 1997 stock purchase
agreement pursuant to which the Company purchased Urology Consultants of South
Florida, Inc. The complaint also alleges breach of other related agreements. The
complaint seeks an unspecified amount of damages. The Company currently is in
settlement negotiations with Dr. Stein. Should these negotiations fail to result
in an acceptable settlement, the Company intends to defend the case vigorously
and to assert counterclaims against Dr. Stein.

    There are no other material legal proceedings pending or, to the knowledge
of management threatened against the Company.

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

    There has been no annual meeting of the Company's stockholders held for the
year ended January 31, 2001. The members of the Board of Directors were
established upon confirmation of the Prepackaged Plan and shall serve until the
next annual meeting of stockholders or until their respective successors have
been duly elected and qualified. No matters were submitted to the stockholders
of the Company in the fourth quarter of fiscal year 2001.

                                    PART II

ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
        RELATED STOCKHOLDER MATTERS

    The Company's Old Common Stock was traded on the Nasdaq Stock Market
("NASDAQ") under the symbol ICSL until December 8, 1999 at which time it was
delisted. The Company's New Common Stock traded on the Over-the-Counter Bulletin
Board (the "OTC Bulletin Board") under the symbol ICSN.OB until July 2001, when
it was delisted due to the Company's failure to timely file its annual and
quarterly reports with the SEC. The Company's Common Stock is now traded only
through the "pink sheets". The following table sets forth the range of high and
low closing prices per share of the New Common Stock for the periods indicated,
as reported on the OTC Bulletin Board.

<Table>
<Caption>
2001                                                          HIGH           LOW
----                                                        --------       --------
<S>                                                         <C>            <C>
Third Quarter.............................................   2.375(a)       1.0625(a)
Fourth Quarter............................................   .5312           .5312
</Table>

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

(a) Upon confirmation of the Company's Prepackaged Plan on September 21, 2000,
    the Company's Old Common Stock was canceled and shares of New Common Stock
    were issued in lieu thereof on the basis of 1 share of New Common Stock for
    31 shares of Old Common Stock. The prices set forth for the Third Quarter of
    fiscal year 2001 reflect trading in the New Common Stock for the 17 trading
    days in that quarter for which information is available.

                                       9
<Page>
    On June 28, 2001, the last reported sales price for the New Common Stock was
$0.32. On June 28, 2001, there were 158 record holders for the New Common Stock.

    The Company has never paid cash dividends on its capital stock and does not
anticipate paying cash dividends in the foreseeable future. The declaration of
dividends is currently restricted, in certain circumstances, by the Company's
revolving line of credit agreement, and it is anticipated that other loan
agreements the Company may enter into in the future will also contain
restrictions on the payment of dividends by the Company.

ITEM 6. SELECTED FINANCIAL DATA

    The following selected historical financial data was derived from the
Company's Financial Statements, which have been audited by independent
accountants, Arthur Andersen LLP for fiscal year ended January 31, 2001 and
PricewaterhouseCoopers LLP for fiscal years ended January 31, 1997 through 2000.
During October 1997, a subsidiary of the Company merged with CSL in a business
combination that was accounted for as a pooling of interests. Accordingly, the
financial statements for all periods prior to the effective date of the merger
have been restated to include CSL. In addition, fresh-start accounting was used
to record the fair value of assets and assumed liabilities of the reorganized
company at September 20, 2000. Accordingly, the following selected financial
data for the period ending January 31, 2001 is not comparable in certain
material respects to such financial data from any prior period, because the
financial data as of January 31, 2001 is of a reorganized company. The data
presented below should be read in conjunction with the Company's Consolidated
Financial

                                       10
<Page>
Statements and the Notes thereto, included elsewhere in this Annual Report on
Form 10-K. The amounts below are in thousands except per share data.

<Table>
<Caption>
                                                                PREDECESSOR COMPANY
                                            ------------------------------------------------------------     SUCCESSOR
                                                               YEAR ENDED JANUARY 31,                         COMPANY
                                            ------------------------------------------------------------   --------------
                                                                                          33 WEEKS ENDED   19 WEEKS ENDED
                                                                                          SEPTEMBER 20,     JANUARY 31,
                                              1997       1998       1999        2000           2000             2001
                                            --------   --------   ---------   ---------   --------------   --------------
<S>                                         <C>        <C>        <C>         <C>         <C>              <C>
STATEMENT OF OPERATIONS DATA:
Net revenues from services................  $ 98,765   $155,946   $ 179,472   $ 125,865     $  27,560         $ 12,511
Net revenues from management service
  agreements..............................    47,942     94,134     103,112      59,996        38,195           16,407
Net revenues from real estate services....    19,049     31,099       8,694         423            --               --
    Total revenue.........................   165,756    281,179     291,278     186,284        65,755           28,918
OPERATING EXPENSES:
Salaries, wages and benefits..............    58,351     88,221      94,710      61,924        18,712            6,371
Depreciation and amortization.............     7,382     10,800      14,786      11,699         1,893            1,680
Rent Expense..............................     8,519     16,649      20,671      15,279         4,049            1,066
Gain (loss) on sale of assets.............      (262)    (1,891)     (5,414)         11            --               --
Provision for write-down of notes
  receivable..............................        --         --       2,674      13,840            --               --
Merger and other noncontinuing expenses
  related to CSL..........................     1,929     11,057          --          --            --               --
Goodwill impairment write-down............        --         --       9,093      36,046            --           26,908
Nonrecurring expenses.....................        --         --      10,465       1,723         9,091                0
Other (primarily capitation expenses).....    66,694    132,177     181,813     156,969        53,196           20,268
Income (loss) from operations.............    23,143     24,166     (37,520)   (111,207)      (21,186)         (27,375)
Interest expense, net.....................     1,726      4,775       8,005      10,220        (4,616)              54
(Income) from investments in affiliates...      (709)      (731)         --         (46)           --               --
Net Income (loss) before taxes and
  extraordinary item......................    22,126     20,122     (45,525)   (121,381)      (26,468)         (27,429)
Income tax expense (benefit)..............     6,836      9,823     (11,549)        194         1,456               --
Net income (loss) before extraordinary
  item....................................    15,290     10,299     (33,976)   (121,381)      (27,924)         (27,429)
Extraordinary item, net of tax of $0......        --         --      96,784      49,632      (100,000)              --
  Net income (loss).......................  $ 15,290   $ 10,299   $(130,760)  $(171,207)    $  72,076         $(27,429)

NET INCOME (LOSS) PER SHARE-BASIC:
Income (loss) before extraordinary item...  $   0.56   $   0.35   $   (1.02)  $   (3.45)            *         $  (2.29)
Extraordinary item, net of tax of $0......  $     --   $     --   $   (2.89)  $   (1.41)            *         $   0.00
Net income (loss).........................  $   0.56   $   0.35   $   (3.91)  $   (4.86)            *         $  (2.29)
NET INCOME (LOSS) PER SHARE-DILUTED:
Income (loss) before extraordinary item...  $   0.55   $   0.35   $   (1.02)  $   (3.45)            *         $  (2.29)
Extraordinary item, net of tax of $0......  $     --   $     --   $   (2.89)  $   (1.41)            *         $   0.00
Net income (loss).........................  $   0.55   $   0.35   $   (3.91)  $   (4.86)            *         $  (2.29)
PRO FORMA INFORMATION (UNAUDITED)(1)
Adjustment to income tax expense..........  $  1,293   $    624   $      --   $      --             *         $     --
Net Income................................    13,997      9,675   $      --   $      --             *         $     --
Net income (loss) per share-basic.........  $   0.51   $   0.33   $      --   $      --             *         $     --
Net income (loss) per share-diluted.......  $   0.51   $   0.33   $      --   $      --             *         $     --
Weighted average shares
  outstanding-basic.......................    27,295     26,690      33,401      35,235             *           11,999
Weighted average shares
  outstanding-diluted.....................    27,682     30,229      33,401      35,235             *           11,999
BALANCE SHEET DATA:
Working capital...........................  $111,811   $ 86,390   $ 111,185   $ (92,716)            *         $ (8,675)
Accounts receivable, net..................    41,744     57,252      15,276      16,193             *           11,891
Total assets..............................   313,310    378,160     252,851      87,311             *           58,180
Total debt................................   118,830    134,359     117,657     115,952             *           10,459
Stockholders' equity......................   153,780    212,035     105,900     (66,722)            *           22,648
</Table>

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

(1) The pro forma net income and net income per share information reflect the
    effect on historical results (prior to the merger with CSL) as if CSL had
    been a C corporation rather than an S corporation and had paid income taxes.

*   EPS for Predecessor Company is not meaningful.

                                       11
<Page>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

    INTRODUCTION

    As discussed more fully above (see Part I, Item 1), until recently, the
Company had been an integrated medical management company that provided medical
management services to the medical community, certain ancillary medical services
to patients and medical real estate development and consulting services to
related and unrelated third parties. In August 1998, the Company announced that
it planned to change this business model. In connection with this planned change
in its business model and in order to position the Company for future growth,
the Company effected a recapitalization through Chapter 11 of the Bankruptcy
Code. (See "Business--The Recapitalization"). The Company is focusing its
operations on pharmaceutical services, including investigative site management,
clinical and outcomes research and disease management.

    ACCOUNTING TREATMENT

    FRESH-START ACCOUNTING

    As discussed above (See "Business--Recapitalization"), the Company's
Prepackaged Plan was consummated on September 21, 2000 and ICSL emerged from
Chapter 11. Pursuant to the AICPA's Statement of Position No. 90-7, FINANCIAL
REPORTING BY ENTITIES IN REORGANIZATION UNDER THE BANKRUPTCY CODE ("SOP 90-7"),
the Company adopted fresh-start reporting in the accompanying consolidated
balance sheet as of September 20, 2000 to give effect to the reorganization as
of such date. Fresh-start reporting required the Company to restate its assets
and liabilities to reflect their reorganization value, which approximates fair
value at the date of the reorganization. In so restating, SOP 90-7 required the
Company to allocate its reorganization value to its assets based upon their fair
values in accordance with the procedures specified by Accounting Principles
Board (APB) Opinion No. 16, BUSINESS COMBINATIONS, for transactions reported on
the purchase method. The amount of the reorganization value that exceeded the
amounts allocable to the specific tangible and the identifiable intangible
assets has been allocated to a specific intangible referred to as
"Reorganization value in excess of amounts allocable to identifiable assets"
("EXCESS REORGANIZATION VALUE"), which is being amortized in accordance with APB
Opinion No.17, INTANGIBLE ASSETS, over a 5 year period. Each liability existing
on the date the Prepackaged Plan was confirmed by the Bankruptcy Court, other
than deferred taxes, is stated at the present value of the amounts to be paid,
determined using an appropriate discount rate. Deferred taxes are not recorded
in the accompanying financial statements due to the uncertainty regarding future
operating results. Any benefits derived from pre-confirmation net operating
losses will first reduce the Excess Reorganization Value (Goodwill) and other
intangibles until exhausted and thereafter be reported as a direct addition to
additional paid-in capital.

    The significant consummation and fresh start reporting adjustments
(excluding the write-off of the Old Common Stock) resulted in a charge of
$666,000. (See Note 3) This charge is presented as "Reorganization items"
pursuant to adoption of fresh-start reporting in the consolidated statement of
operations for the 33-week period ended September 20, 2000.

    The fresh-start reporting reorganization equity value was primarily derived
from a discounted cash flow analysis of our business based on the Company's
projected earnings before interest, taxes and depreciation and amortization
("EBITDA") through our 2006 fiscal year and discounted to present value using
the Company's weighted average cost of capital rate of 19.5%. The discount rate
utilized by the Company reflected a relatively high-risk investment.

    The determination of equity value was derived from an estimated enterprise
value of the reorganized Company on an unleveraged basis. The enterprise value
was developed by an independent financial advisor for purposes of preparing the
Company's Disclosure Statement, which was distributed

                                       12
<Page>
to Debentureholders and filed in the Bankruptcy Court on July 14, 2000. In
developing the determination of the initial equity value, the financial advisor
used various assumptions and estimates, including revenue growth, improvements
in operating margins, earnings and cash flow, improvement in techniques for
managing working capital, expenses and other elements. As a result, the initial
equity value was assumed to be in the range of $65 to $95 million. For purposes
of the Disclosure Statement, the Company determined that an equity value of
$80 million represented a reasonable estimate of the reorganized Company for
purposes of determining distributable equity value to the creditors.

    Subsequent to the distribution of the Disclosure Statement and prior to the
Effective Date, a number of events occurred which impacted the determination of
equity value under fresh-start reporting, including but not limited to, the
initial trading prices of the New Common Stock, lack of liquidity of Company
stock and information regarding the Company's third quarter performance. The
Company employed a similar valuation method to that utilized by its independent
financial advisor in the Disclosure Statement under fresh-start reporting to
determine its equity value and arrived at the revised equity value of
$50 million as of the Effective Date. The changes in assumptions used to
calculate the revised reorganization value were primarily a reduction in assumed
growth and an increase in the discount rate.

    The reorganization equity value of $50 million as of the Effective Date was
more than the market value of its assets at September 20, 2000, which was
approximately $38.0 million. Management believes that the Debentureholders
accepted the Prepackaged Plan and the corresponding reorganization value,
despite the inherent future business risks, primarily because the Company's
reorganization value exceeded its liquidation value and the Debentureholders
believed that it was in the Company's best interest to emerge from bankruptcy at
that time. In accordance with the purchase method of accounting, the excess of
the reorganization value over revalued net assets was allocated to
"Reorganization value in excess of amount allocable to identifiable assets".

    The reorganization equity value of $50 million as of the Effective Date was
based, in part, upon the planned integration of the Company's network management
and clinical trials/site management and healthcare research operations. The
Company has not realized the synergies that it had expected from linking these
two business lines and plans to sell its network management division.
Preliminary indications of interest from potential purchasers indicate a lower
valuation for the network management division as a standalone enterprise than
when valued as an integrated component of the clinical trials and healthcare
research operations, using the methodology described above. Accordingly, the
Company concluded that the reorganized value in excess of the revalued net
assets was partially impaired and recorded a write-down of $26.9 million for the
19 weeks ended January 31, 2001.

    The calculated revised reorganization equity value was based upon a variety
of estimates and assumptions about circumstances and events that have not yet
taken place. Such estimates and assumptions are inherently subject to
significant economic and competitive uncertainties beyond the control of the
Company, including but not limited to those with respect to the future course of
the Company's business activity.

    OTHER ACCOUNTING CONSIDERATIONS

    The terms of the Company's relationships with its remaining affiliated
physicians are set forth in various asset and stock purchase agreements,
management services agreements and employment and consulting agreements. Through
the asset and/or stock purchase agreement, the Company acquired the equipment,
furniture, fixtures, supplies and, in certain instances, service agreements, of
a physician practice at the fair market value of the assets. The accounts
receivable typically were purchased at the net realizable value. The purchase
price of the practice generally consisted of cash, notes and/or Common Stock of
the Company and the assumption of certain debt, leases and other contracts

                                       13
<Page>
necessary for the operation of the practice. The management services or
employment agreements delineate the responsibilities and obligations of each
party.

    Net revenues from services is reported at the estimated realizable amounts
from patients, third-party payors and others for services rendered. Revenue
under certain third-party payor agreements is subject to audit and retroactive
adjustments. Provisions for estimated third-party payor settlements and
adjustments are estimated in the period the related services are rendered and
adjusted in future periods, as final settlements are determined. The provision
and related allowance are adjusted periodically, based upon an evaluation of
historical collection experience with specific payors for particular services,
anticipated reimbursement levels with specific payors for new services, industry
reimbursement trends, and other relevant factors. Included in net revenues from
services are revenues from the diagnostic imaging centers in New York, which the
Company operated pursuant to Administrative Service Agreements. These revenues
are reported net of payments to physicians. The Company sold these diagnostic
imaging centers in September 1999.

    RESULTS OF OPERATIONS

    Notwithstanding the recapitalization, the Company has continued to
experience losses and negative cash flows from operations. The rate at which the
Company has lost money, however, has diminished significantly. Losses in fiscal
year 2000 were $73.8 million (excluding extraordinary items, goodwill impairment
write-down and depreciation and amortization) as compared to $24.9 million
(excluding extraordinary items, goodwill impairment write-down and depreciation
and amortization) in fiscal year 2001. Nevertheless, continued losses and
negative cash flows raise substantial doubt about the Company's ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that might result from this uncertainty.

    The following table shows the percentage of net revenue represented by
various expense categories reflected in the Consolidated Statements of
Operations. The information that follows should be read in conjunction with the
Company's Consolidated Financial Statements and Notes thereto included elsewhere
herein. Despite the change in accounting basis as a result of fresh-start
accounting adopted by the Company on September 20, 2000, the Company, for the
purpose of this management discussion

                                       14
<Page>
and analysis has combined the results of operations for the 33 weeks ended
September 20, 2000 with the 19 weeks ended January 31, 2001.

<Table>
<Caption>
                                                     2001           2000           1999
                                                   --------       --------       --------
<S>                                                <C>            <C>            <C>
Net Revenues.....................................    100.0%        100.0%          100.0%
Salaries, wages and benefits.....................     26.5%         33.2%           32.5%
Professional Fees................................     12.0%         13.0%            4.0%
Utilities........................................      2.0%          2.0%            2.0%
Depreciation and amortization....................      3.8%          6.3%            5.1%
Rent expense.....................................      5.4%          8.2%            7.1%
Provision for bad debts..........................      1.2%          3.5%            2.9%
Loss (gain) on sale of assets....................      0.0%          0.0%           (1.8)%
Provision for write-down of notes receivable.....      0.0%          7.4%            0.9%
Merger and other non-continuing expenses related
  to CSL.........................................      0.0%          0.0%            0.0%
Goodwill impairment write-down...................     25.3%         19.4%            3.1%
Nonrecurring expenses............................      9.6%          0.9%            3.6%
Other (primarily capitation expense).............     62.3%         65.8%           53.5%
  Total operating costs and administrative
    expenses.....................................    148.1%        159.7%          112.9%
Interest expense, net............................      4.8%          5.5%            2.7%
(Income) from investment in affiliate............      0.0%          0.0%            0.0%
Reorganization items.............................      0.7%           --              --
Loss before taxes and extraordinary item.........    (53.6)%       (65.2)%         (15.6)%
Income tax expense (benefit).....................      1.5%          0.1%           (4.0)%
Loss before extraordinary item...................    (55.1)%       (65.3)%         (11.6)%
Extraordinary item, net of tax...................   (105.6)%        26.6%           33.2%
Net income (loss)................................     50.5%        (91.9)%         (44.8)%
</Table>

    THE YEAR ENDED JANUARY 31, 2001 COMPARED TO THE YEAR ENDED JANUARY 31, 2000

    The following discussion reviews the results of operations for the year
ended January 31, 2001 ("2001") compared to the year ended January 31, 2000
("2000"). As previously noted, despite the change in accounting basis as a
result of fresh-start accounting adopted by the Company on September 20, 2000,
the Company, for the purpose of this management discussion and analysis, has
combined the results of operations for the 33 weeks ended September 20, 2000
with the 19 weeks ended January 31, 2001.

    REVENUES

    The Company currently derives revenues primarily from the following
segments: provider network management, site management organizations, and assets
held for sale. Revenues from provider network management are derived from
management services to MSOs and administrative services to health plans which
include reviewing, processing and paying claims and subcontracting with
specialty care physicians to provide covered services. Revenues from site
management organizations are derived primarily from services provided to
pharmaceutical companies for clinical trials. Revenues from assets held for sale
were derived primarily from providing the following services: physician practice
management, diagnostic imaging, radiation therapy, home healthcare, infusion
therapy, real estate services and lithotripsy.

    Net revenues during 2001 were $94.7 million, and included $54.6 million or
57.7% attributable to provider network management; $34.1 million or 36% related
to site management organizations, and $5.6 million or 5.9% attributable to
assets held for sale.

                                       15
<Page>
    Net revenues during 2000 were $186.3 million and included $60.0 million or
32.2% attributable to provider network management, $33.8 million or 18.2%
related to site management organizations, and $92.5 million or 49.6% was
attributable to assets held for sale.

    The Company's net revenues from provider network management services
decreased by $5.4 million from $60.0 million for 2000 to $54.6 million for 2001.
The decrease is attributable to the termination of unprofitable practice
management agreements and management services agreements. The Company's net
revenues from site management organizations decreased by $0.3 million from
$33.8 million for 2000 to $34.1 million for 2001. This decrease was due to the
reduction in the number of owned sites, which were either converted to staffed
sites or closed. The Company's net revenues from assets held for sale decreased
by $86.9 million from $92.5 million for 2000 to $5.6 million for 2001, primarily
attributable to the asset divestitures, including the sale of the real estate
service operations.

    EXPENSES

    The Company's salaries, wages and benefits decreased by $36.8 million from
$61.9 million or 33.2% of net revenues during 2000 to $25.1 million or 26.5% of
net revenues in 2001. The decrease in dollars is primarily attributable to the
reductions in personnel in conjunction with the asset divestitures and to the
cost savings initiative, which include the reduction of headcount in general
corporate and network management operations that was initiated in the third
quarter of 2000.

    The Company's depreciation and amortization expense decreased by
$8.1 million from $11.7 million in 2000 or 6.3% of net revenues to $3.6 million
or 3.8% of net revenues in 2001. The decrease in dollars is due to assets sold
during the year and the decrease in percentage is due to the impact of prior
year goodwill impairment write-downs.

    The Company's rent expense decreased by $10.2 million from $15.3 million or
8.2% of net revenues during 2000 to $5.1 million or 5.4% of net revenues during
2001. The dollar decrease is primarily a result of the asset divestitures and
consolidation of administrative offices.

    The Company's provision for bad debt decreased by $5.3 million from
$6.5 million or 3.5% of net revenues during 2000 to $1.2 million or 1.2% of net
revenues during 2001. The decrease as a percentage of revenues is primarily the
result of write-offs attributable to the businesses held for sale in 2000.

    The Company's nonrecurring expenses of $1.7 million in 2000 represents
additional severance costs in conjunction with the sale of assets and the
repositioning of the Company. The Company's nonrecurring expenses of
$9.1 million in 2001 includes a $3.1 million restructuring charge, a
$3.0 million valuation reserve to recognize the decline in market value of
assets held for sale, and $3.0 million in lease commitments that are below
market value and which relate to closed sites.

    The Company's provision for the write-down on notes receivable of
$13.8 million in 2000 represents the write-down to estimated net realizable
value of several notes receivable that were collateralized by shares of Old
Common Stock of the Company. The $13.8 million provision in 2000 also includes
the write-off of the $10.9 million note guaranteed by Mr. Gosman due to the
probable insufficiency of the collateral securing the note and the guarantee.
Other notes were written off due to negotiations with the debtors to reduce
their notes in exchange for concessions, which the Company received in regards
to potential liabilities of the Company.

    For 2001, the Company wrote down $26.9 million of goodwill due to
integration and valuation issues related to its network management business
line. For 2000, the Company wrote down $36.1 million of goodwill due to the
closure of certain unprofitable operations, both in clinical studies and network
management, and the impairment of the assets of several sites. Each write-down
was in accordance with FAS 121, which requires the reduction of goodwill and
other long-term assets when

                                       16
<Page>
anticipated future cash flows are insufficient to cover the asset recorded on
the books from ongoing operations.

    The Company's other expenses (which includes capitation expenses) decreased
by $64.5 million from $123.5 million or 66.3% of net revenues during 2000 to
$59.0 million or 62.3% of net revenues during 2001. The decrease in other
expenses is due to asset divestitures and repositioning the Company in 2000, and
reflects a reduction in capitation expenses, reserves established for settlement
of litigation, the write-down of assets held for sale and legal fees relative to
asset sales.

    The Company's extraordinary gain of $100 million during 2001 arose from the
cancellation of the Debentures. The Company's extraordinary loss of
$49.6 million (net of tax of $0) during 2000 represents the charge resulting
from divestitures or disposals that had occurred subsequent to August 1998 as
well as the write-down of the assets of the businesses being held for sale at
January 31, 1999 and 2000, respectively. The carrying value of the assets of
these businesses was written down to their estimated net realizable value (less
costs to sell).

    The Company's loss prior to income taxes and extraordinary item during 2000
was $121.4 million compared to $53.9 million in 2001. The improvement in
operating results during 2001 is due to several factors including: (i) the
dispositions of certain businesses (the assets held for sale segment, including
the real estate service operation, generated a total pretax loss of
$20.9 million during 2000 compared to pretax loss of $.2 million during 2001);
(ii) significant expenses incurred in 2000 associated with repositioning and
building infrastructure to expand and integrate its provided network management
and pharmaceutical services (site management organizations) (combined these
businesses generated a pre-tax loss, prior to non-recurring charges, of
$58.6 million in 2000 compared to a pre-tax loss, prior to non-recurring charges
of $2.4 million in 2001); and (iii) the $26.9 million write-off of goodwill in
2001 related to the impairment of the reorganization value as compared to the
$36.1 million write-off of goodwill in 2000 due to the closure of certain
unprofitable operations as described above.

    The Company's income tax expense (benefit) increased by $1.3 million from
$0.2 million (prior to extraordinary item) during 2000 to $1.5 million during
2001. The $1.5 million for 2001 represents an assessment of tax for previous
years, and is currently being reviewed. The Company believes that because of the
large net operating loss for the years ended January 31, 2001 and 2000 and the
anticipated losses due to the restructuring of the Company, the Company may not
be able to fully utilize all its net operating losses.

    THE YEAR ENDED JANUARY 31, 2000 COMPARED TO THE YEAR ENDED JANUARY 31, 1999

    The following discussion reviews the results of operations for the year
ended January 31, 2000 ("2000") compared to the year ended January 31, 1999
("1999").

    REVENUES

    During 2000 and 1999, the Company derived revenues primarily from the
following segments: provider network management, site management organizations
and assets held for sale. Revenues from provider network management were derived
from management services to MSOs and administrative services to health plans
which include reviewing, processing and paying claims and subcontracting with
specialty care physicians to provide covered services. Revenues from site
management organizations were derived primarily from services provided to
pharmaceutical companies for clinical trials. Revenues from assets held for sale
were derived primarily from providing the following services: physician practice
management, diagnostic imaging, radiation therapy, home healthcare, infusion
therapy, real estate services and lithotripsy.

                                       17
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    Net revenues during 2000 were $186.3 million and included $60.0 million or
32.2% attributable to provider network management; $33.8 million or 18.2%
related to site management organizations, and $92.5 million or 49.6%
attributable to assets held for sale.

    Net revenues during 1999 were $291.3 million and included $93.5 million or
32.1% attributable to provider network management; $33.7 million or 11.6%
related to site management organizations, and $164.1 million or 56.3%
attributable to assets held for sale, including real estate services.

    The Company's net revenues from provider network management services
decreased by $33.5 million from $93.5 million for 1999 to $60.0 million for
2000. The majority of the decrease is attributable to the termination of an
unprofitable practice management agreement and the remaining decrease is the
result of restructuring a number of payor contracts. The Company's net revenues
from site management organizations increased by $0.1 million from $33.7 million
for 1999 to $33.8 million for 2000. The Company's net revenues from assets held
for sale decreased by $71.6 million from $164.1 million for 1999 to
$92.5 million for 2000, primarily attributable to the asset divestitures,
including the sale of the real estate service operations.

    EXPENSES

    The Company's salaries, wages and benefits decreased by $32.8 million from
$94.7 million or 32.5% of net revenues during 1999 to $61.9 million or 33.2% of
net revenues in 2000. The decrease in dollars is primarily attributable to the
reductions in personnel in conjunction with the asset divestitures and to the
cost savings initiative, which include the reduction of headcount in the network
management operation that was initiated in the third quarter.

    The Company's supplies expense decreased by $21.0 million from
$60.0 million or 20.6% of net revenues during 1999 compared to $39.0 million or
20.9% of net revenues during 2000. The decrease in supplies expense is a result
of the asset divestitures.

    The Company's depreciation and amortization expense decreased by
$3.1 million from $14.8 million in 1999 or 5.1% of net revenues to
$11.7 million or 6.3% of net revenues in 2000. The decrease in dollars is due to
assets sold during the year and the increase in percentage is due to the
reduction in income due to asset sales.

    The Company's rent expense decreased by $5.4 million from $20.7 million or
7.1% of net revenues during 1999 to $15.3 million or 8.2% of net revenues during
2000. The dollar decrease is primarily a result of the asset divestitures.

    The Company's provision for bad debt decreased by $1.9 million from
$8.4 million or 2.9% of net revenues during 1999 to $6.5 million or 3.5% of net
revenues during 2000. The increase as a percentage of revenues is primarily
attributable to the additional provision required on the businesses held for
sale.

    The Company's gain on sale of assets of $5.4 million during 1999 represented
gains from the sale of real estate of approximately $4.5 million during
July 1998 and from the sale of a radiation therapy center of approximately
$0.9 million during February 1998.

    The Company's nonrecurring charge of $10.5 million during 1999 represents
the charge resulting from the termination of several physician management and
employment agreements prior to the Company's decision in August 1998 to
restructure as well as write-off the remaining investment in an ambulatory
surgery center. The Company's nonrecurring charge of $1.7 million in 2000
represents additional severance costs in conjunction with the sale of assets and
the repositioning of the Company.

    The Company's provision for the write-down on notes receivable of
$13.8 million and $2.7 million in 2000 and 1999, respectively, represents the
write-down of several notes receivable that were collateralized by shares of Old
Common Stock of the Company to their net realizable value. The

                                       18
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$13.8 million provision in 2000 also includes the write-off of the
$10.9 million note guaranteed by Mr. Gosman due to the probable insufficiency of
the collateral securing the note and the guarantee. Other notes were written off
due to negotiations with the debtors to reduce their notes in exchange for
concessions the Company received with respect to potential liabilities of the
Company.

    The Company's goodwill impairment write-down of $9.1 during 1999 represents
the write-down of the remaining goodwill of the real estate services segment.
The asset of goodwill was determined to have been impaired because of the
Company's decision to significantly downsize the real estate segment and the
inability to generate future operating income without substantial revenue
growth, which was determined to be uncertain. Moreover, anticipated future cash
flows of the real estate segment indicated at that time that the recoverability
of the asset was not likely. For 2000, the Company wrote down $36.1 million of
goodwill due to the closure of certain unprofitable operations, both in clinical
studies and network management, and the impairment of the assets of several
sites as a result of SFAS 121, which requires the reduction of goodwill when
anticipated future cash flows are insufficient to cover the goodwill recorded on
the books for ongoing operations.

    The Company's other expenses which includes professional fees and utilities
decreased by $1.8 million from $113.3 million or 38.9% of net revenues during
1999 to $111.5 million or 59.9% of net revenues during 2000. The dollar decrease
in other expenses is due to the reduction in capitation expenses, which decrease
corresponds to the decrease in revenues in the network management segment of the
business. Offsetting this decrease in capitation expenses is an increase in
other expenses such as, reserves established for settlement of litigation,
increased legal fees relative to asset sales, and additional write-downs on
assets held for sale.

    The Company's extraordinary item of $96.8 million (net of tax of $0) during
1999 and $49.6 (net of tax of $0) during 2000 represents the charge resulting
from divestitures or disposals that had occurred subsequent to August 1998 as
well as the write-down of the assets of the businesses being held for sale. The
carrying value of the assets of these businesses was written down to their
estimated net realizable value (less costs to sell).

    The Company's loss prior to income taxes and extraordinary item during 1999
was $45.5 million compared to $121.4 million in 2000. The deterioration of
income during 2000 is primarily due to several factors including: (i) the
deterioration of the operating results of certain of the businesses divested or
to be divested (the assets held for sale segment, including the real estate
service operation, generated a total pretax loss of $19.9 million during 2000
compared to pretax loss of $8.0 million during 1999), (ii) costs incurred in
repositioning the Company and building infrastructure to expand and integrate
the Company's two primary business lines: provider network management and
pharmaceutical services (site management organizations) (combined these
businesses generated a pretax loss, excluding nonrecurring charges and goodwill
write-down, of $22.5 million during 2000, compared to pretax loss of
$9.6 million in 1999), (iii) the $36.1 million write-off of goodwill due to the
closure of certain unprofitable operations, both in clinical studies and network
management in 2000, and the impairment of the assets of several sites as a
result of SFAS 121, which requires the reduction of goodwill when anticipated
future cash flows are insufficient to cover the goodwill recorded on the books
for ongoing operations (the 1999 goodwill write-off was $9.1 million); and
(iv) the $13.8 million write-down of notes receivable in 2000 (described above).

    The Company's income tax expense (benefit) decreased by $11.7 million from
$(11.5) million or 25.4% of pretax loss (prior to extraordinary item) during
1999 to $0.2 million during 2000. The Company reasonably believes that because
of the large net operating loss for the years ended January 31, 2000 and 1999
and the anticipated losses due to the restructuring of the Company, the Company
may not be able to fully utilize all the net operating losses.

                                       19
<Page>
    LIQUIDITY AND CAPITAL RESOURCES

    Cash used by operating activities was $24.9 million and $28.2 million during
2001 and 2000, respectively. At January 31, 2001, the Company's principal
sources of liquidity consisted of $5.5 million in cash and $1.9 million in
assets held for sale (see below for further discussion of assets held for sale).
The Company also had $30.3 million of current liabilities as of January 31,
2001, including approximately $9.7 million of current indebtedness, which is
comprised, primarily of $6.2 million outstanding under the New Credit Facility
(defined below).

    Cash provided by investing activities was $10.4 million during 2001 and
primarily represented the net cash received from collections against notes
receivable of $6.8 million and from the sale of assets of $4.7 million, offset
by the funds required by the Company for capital expenditures of $0.8 million
and for other assets of $0.3 million. Cash provided by investing activities was
$42.5 million during 2000 and primarily represented the net cash received from
the sale of assets of $48.7 million, offset by the funds required by the Company
for capital expenditures of $4.6 million and additional purchase price on
acquisitions of $1.4 million.

    Cash used by financing activities was $5.5 million during 2001 and primarily
represented repayments on the line of credit. Cash provided by financing
activities was $1.2 million during 2000 and primarily represented the net
borrowings on the line of credit of $0.5 million and the increase in restricted
cash, offset by the purchase of treasury stock of $1.5 million.

    In conjunction with various acquisitions that have been completed, the
Company may be required to make various contingent payments in the event that
the acquired companies attain predetermined financial targets during established
periods of time following the acquisitions. If all of the applicable financial
targets were satisfied, for the periods covered, the Company would be required
to pay an aggregate of approximately $2.0 million over the next three years. The
payments, if required, are payable in cash and/or Common Stock of the Company.

    In conjunction with certain of its acquisitions, the Company has agreed to
make payments in shares of Common Stock of the Company at a predetermined future
date. The number of shares to be issued is generally determined based upon the
average price of the Company's Common Stock during the five business days prior
to the date of issuance. As of January 31, 2000, the Company had committed to
issue $1.1 million of Common Stock of the Company using the methodology
discussed above and in April 2000 issued 5,187,627 million shares of Old Common
Stock. This amount is included in the current accrued liabilities on the balance
sheet as of January 31, 2000.

    In conjunction with the repositioning during the year ended January 31,
1999, the Board of Directors approved a plan to divest and exit the Company's
PPM business and certain of its ancillary services businesses including
diagnostic imaging, lithotripsy, radiation therapy, home health and infusion
therapy. During the year ended January 31, 2000, the Company divested its
investments in a surgery center and a physician network and sold its real estate
service operations. The Company has completed the process of terminating its
management of individual and group practices and divesting itself of related
assets, and selling and divesting itself of its ancillary medical services
businesses. The Company received $3.0 million for assets divested or disposed in
fiscal 2001.

    In conjunction with a physician practice management agreement with a
physician practice in Florida, the Company has filed suit against the practice
to enforce the guarantees executed in connection with the management agreement.
The practice has filed a counterclaim alleging fraudulent inducement and
illegality of the management agreement. The Company currently is in settlement
negotiations with respect to this matter. If the Company is not successful in
obtaining a satisfactory negotiated settlement, it intends to vigorously
prosecute the case and defend the counterclaim.

                                       20
<Page>
    During fiscal 1999, the Company advanced $10.9 million to Chancellor
Development Corp. which loan was guaranteed by Abraham Gosman, a former officer
and director. To secure his obligation under the guarantee, Mr. Gosman pledged
the stock of another company principally owned by him ("Windrows") and (subject
to prior pledges) 8.2 million shares of Old Common Stock ("ICSL Pledged
Shares"). This loan was due in July 2000 but has not been paid by Chancellor
Development Corp. or by Mr. Gosman. Due to the significant decline in the
collateral pledged by Mr. Gosman and management's assessment that Mr. Gosman
would not honor his guarantee, in January 2000, the Company completely wrote off
the note. Notwithstanding the write-down, the Company filed suit against
Mr. Gosman and obtained a judgment (including interest) of approximately
$11.3 million. Mr. Gosman subsequently filed for protection under the United
States Bankruptcy Code. The Company actively participates as a member of the
creditors' committee for Mr. Gosman's bankruptcy proceedings and will take all
actions within its power to recover amounts due from Mr. Gosman.

    During March 1999, the Company obtained a $30.0 million revolving line of
credit that had a three-year term and availability based upon eligible accounts
receivable. The line of credit bore interest at prime plus 1.0% and fees of
0.0875%. Approximately $9.2 million of proceeds from the new line of credit were
used to repay the previous line of credit, and approximately $2.0 million was
used as cash collateral for a $2.0 million letter of credit. The line of credit
was collateralized by the assets of the Company, limited the ability of the
Company to incur certain indebtedness and make certain dividend payments and
required the Company to comply with customary covenants. The line required
proceeds from asset sales be used to repay the line of credit to the extent the
sold assets included eligible accounts receivable. At January 31, 2000,
approximately $10.5 million was outstanding under the line. The line was repaid
in full on the Effective Date.

    On the Effective Date, the Company entered into a $10.0 million revolving
credit facility (the "New Credit Facility") with Ableco Finance LLC ("Ableco").
The $10.0 million New Credit Facility has a two-year term and availability based
upon eligible accounts receivable. The New Credit Facility bears interest at
prime plus 2.00% but not less than 11.50% and provides for an unused line fee of
 .50%. The New Credit Facility is secured by all assets of the Company and its
subsidiaries, limits the ability of the Company and its subsidiaries to incur
certain indebtedness and make certain dividend payments and requires the Company
to comply with other customary covenants. The qualification with respect to the
Company's ability to continue as a going concern contained in the Report of
Arthur Andersen LLP constitutes an event of default under the New Credit
Facility. In addition, the Company is in default of certain non-financial and
reporting covenants contained in the New Credit Facility. The Company has
requested, and Ableco has agreed to provide, a waiver of these defaults. The
Company and Ableco are in the process of documenting the waiver. If the Company
is unable to obtain a waiver of such defaults, it may be subject to acceleration
of all outstanding indebtedness and default interest on such outstanding amounts
at the prime rate plus 5.0%.

    Prior to the Effective Date, the Company had outstanding $100 million
Debentures which bore interest at an annual rate of 6 3/4% payable semi-annually
on each June 15 and December 15. The Debentures were unsecured obligations of
the Company and were guaranteed by certain of the Company's wholly owned
subsidiaries. On the Effective Date, the Debentures were converted into New
Common Stock of the Company on the basis of 108 shares of New Common Stock for
each $1,000 in face amount of Debentures.

    On or about January 30, 2001, an arbitration panel rendered a decision
against the Company in the amount of $633,624, arising in connection with the
breach of a service contract, which was assumed by the purchaser of one of the
Company's subsidiaries. The Company has entered into a settlement agreement with
Select Data Inc. in which the Company agreed to pay $633,624 in exchange for
Select Data's agreement not to pursue interest and attorneys' fees, which,
together with the arbitration award, would have exceeded $700,000. The Company
is currently evaluating whether to attempt to recover some or all of the amounts
paid from the purchaser (See Note 20--Subsequent Events).

                                       21
<Page>
    The Company's extensive losses in the past three years and its negative cash
flow from operations raise substantial doubt about the Company's ability to
continue as a going concern.

    The Company's operating losses have declined significantly from fiscal 2000.
In addition to the operating improvements, the Company has decided to sell
non-strategic assets including land, its oncology business operations, and its
network management division. The Company has continued to improve profitability
in its CSL business unit through the closing of unprofitable sites, enhanced
training and improvements in patient recruitment efforts. However, the Company
believes that a strategic merger or sale of its CSL subsidiaries is necessary to
improve short-term and long-term profitability. The Company is actively pursuing
these alternatives. However, there can be no assurance that management plans
will be successful.

    RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER MATTERS

    In December 1999, the Staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101, "REVENUE RECOGNITION IN FINANCIAL STATEMENTS"
("SAB 101"). SAB 101 summarizes certain of the Staff's views in applying
accounting principles generally accepted in the United States to revenue
recognition in financial statements. The Company does not believe SAB 101 has a
significant impact on the financial reporting of its continuing business. The
adoption of SAB 101 did not have a material impact on the Company's financial
positioning or results of operations.

    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK
COMPENSATION-AN INTERPRETATION OF APB OPINION NO. 25" ("FIN 44"). The
application of FIN 44 did not have a material impact on the Company's financial
position or results of operations. FIN 44 is effective July 1, 2000, but certain
conclusions in FIN 44 cover specific events that occurred after either
December 15, 1998 or January 12, 2000. The application of FIN 44 did not have a
material impact on the Company's financial position or results of operations.

    In June 1998, the Financial Accounting Standards Board issued SFAS No.133,
"ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES" ("SFAS 133").
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that entities recognize all
hedging instruments as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. If certain
conditions are met, a derivative may be specifically designated as (a) a hedge
of the exposure to changes in the fair value of a recognized asset or liability
or an unrecognized firm commitment, or (b) a hedge of the exposure to variable
cash flows of a forecasted transaction. The Company adopted SFAS 133, as amended
by SFAS 137 when it emerged from bankruptcy. The adoption of SFAS 133 did not
impact the Company, as the Company has not entered into any derivative
instrument contracts.

    FACTORS TO BE CONSIDERED

    THE PARTS OF THIS ANNUAL REPORT ON FORM 10-K TITLED "BUSINESS", "LEGAL
PROCEEDINGS", AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS" CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K,
THE WORDS "MAY", "WILL", "SEEK", "PLAN", "EXPECT", "BELIEVE", "ANTICIPATE",
"CONTINUE", "ESTIMATE", "PROJECT", "INTEND", AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT REGARDING
EVENTS, CONDITIONS AND FINANCIAL TRENDS THAT MAY AFFECT THE COMPANY'S FUTURE
PLANS OF OPERATIONS, BUSINESS STRATEGY, RESULTS OF OPERATIONS AND FINANCIAL
POSITIONS. THE COMPANY WISHES TO ENSURE THAT SUCH STATEMENTS ARE ACCOMPANIED BY
MEANINGFUL CAUTIONARY STATEMENTS PURSUANT TO THE SAFE HARBOR ESTABLISHED IN THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. PROSPECTIVE

                                       22
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INVESTORS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES
OF FUTURE PERFORMANCE AND ARE SUBJECT TO RISKS AND UNCERTAINTIES AND THAT ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE INCLUDED WITHIN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. SUCH FORWARD-LOOKING STATEMENTS
SHOULD, THEREFORE, BE CONSIDERED IN LIGHT OF VARIOUS IMPORTANT FACTORS,
INCLUDING, WITHOUT LIMITATION, THOSE SET FORTH BELOW AND UNDER
"BUSINESS-POTENTIAL LIABILITY AND INSURANCE" AND "BUSINESS-GOVERNMENT
REGULATION", AND OTHERS SET FORTH FROM TIME TO TIME IN THE COMPANY'S REPORTS AND
REGISTRATION STATEMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"). THE COMPANY DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE SUCH
FORWARD-LOOKING STATEMENTS.

    References in this section "FACTORS TO BE CONSIDERED" to "ICSL," the
"Company," "we," "us," "our Company" and "ourselves" refer to Innovative
Clinical Solutions, Ltd. unless the context clearly requires otherwise.

    WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO REVERSE OUR HISTORY OF
     OPERATING LOSSES

    We have experienced and continue to experience operating losses. We have not
been able to achieve overall profitability since fiscal 1998. We had operating
losses of $27.3 million and $21.1 million for the periods ended January 31, 2001
and September 20, 2000, and $121.6 million (including a $36.1 million write-down
of goodwill and $13.8 million write-down of notes receivable), for the year
ended January 31, 2000. Our extensive losses over the past three years and our
negative cash flows from operations raise substantial doubt as to our ability to
continue as a going concern, resulting in a qualified opinion from our
independent accountants. Although we have reduced our operating losses and we
have developed plans to improve the profitability of our core business
operations, we cannot assure you that our strategic plan will lead to
profitability or that we will be able to maintain profitability, if achieved, on
a short or long-term basis.

    WE RELY ON HIGHLY QUALIFIED MANAGEMENT AND TECHNICAL PERSONNEL WHO MAY NOT
     REMAIN WITH US

    We rely on a number of key executives, including Michael T. Heffernan, our
President, Chief Executive Officer and Chairman, Gary S. Gillheeney, our Chief
Financial Officer and Treasurer, R. Adrian Otte, M.D., our Chief Operating
Officer-Clinical Studies and Healthcare Research, John Wardle, our Chief
Operating Officer-Network Management, and Bryan B. Dieter, our Chief Information
Officer. We do not maintain key-person life insurance on the members of our
executive management team. We entered into agreements containing non-competition
restrictions with our senior officers in connection with the completion of the
recapitalization. We have employment agreements with our senior officers but if
any of these key executives leaves the Company, it could have a material adverse
effect on us. In addition, in order to compete effectively, we must attract and
maintain qualified sales, professional, scientific and technical operating
personnel. Competition for these skilled personnel, particularly those with a
medical degree, a Ph.D. or equivalent degrees is intense. The continued decline
of our stock price notwithstanding the recapitalization will likely hamper our
recruitment and retention efforts. We may not be successful in attracting or
retaining key personnel.

    WE DEPEND ON A SMALL NUMBER OF INDUSTRIES AND CLIENTS FOR ALL OF OUR
     BUSINESS

    We primarily depend on research and development expenditures by
pharmaceutical and biotechnology companies. Our operations could be materially
and adversely affected if:

    - our clients experience financial problems or are affected by a general
      economic downturn;

    - consolidation in the drug or biotechnology industries leads to a smaller
      client base; or

    - our clients reduce their research and development expenditures.

                                       23
<Page>
    THE LOSS, MODIFICATION, OR DELAY OF LARGE CONTRACTS MAY NEGATIVELY IMPACT
     OUR FINANCIAL PERFORMANCE

    Although our clinical research study contracts typically provide that we are
entitled to receive fees earned through the date of termination, as well as all
non-cancelable costs, generally, our clients can terminate their contracts with
us upon short notice or can delay execution of services. Clients terminate or
delay their contracts for a variety of reasons, including:

    - products being tested fail to satisfy safety requirements;

    - products have unexpected or undesired clinical results;

    - the client decides to forego a particular study, perhaps for economic
      reasons; or

    - not enough patients enroll in the study.

    WE MAY NOT BE ABLE TO MAKE STRATEGIC ACQUISITIONS IN THE FUTURE OR INTEGRATE
     ANY FUTURE ACQUISITIONS

    We will rely on our ability to enter into strategic relationships and seek
merger and acquisition opportunities to implement our strategic plan. We may not
be able to implement this strategy on terms and conditions acceptable to us. In
addition, we face several obstacles in connection with consolidating, including:

    - difficulties and expenses in connection with the merging and the
      subsequent assimilation of the operations and services or products of the
      acquired companies;

    - limited cash resources and severely limited ability to use our stock as
      currency due to its declining price;

    - loss of customers during the integration period;

    - diversion of management attention from other business concerns; and

    - loss of some or all of the key employees of the acquired company.

    To integrate acquired companies, we must install and standardize adequate
managerial, operational and control systems, implement marketing efforts in new
and existing locations, employ qualified personnel to provide technical and
marketing support for our various operating sites, and continue to expand our
managerial, operational, technical and financial resources. Failure to integrate
our existing and future operations or successfully manage our increasing size
may result in significant operating inefficiencies and cause a significant
strain on our managerial, operational and financial resources.

    If we are unable to complete strategic acquisitions or enter into strategic
relationships, our ability to complete our strategic plan will be adversely
affected.

    OUR BUSINESS DEPENDS ON CONTINUED COMPREHENSIVE GOVERNMENTAL REGULATION OF
     THE DRUG DEVELOPMENT PROCESS AND OUR COMPLIANCE WITH THOSE REGULATIONS

    In the United States, governmental regulation of the drug development
process is extensive and complicated. A significant aspect of the value we add
for our customers is our ability to navigate the complex regulatory scheme
quickly and accurately. If these regulations were significantly reduced, our
customers might not require our services to the same extent as they do currently
and our business and results of operations could be materially and adversely
affected.

    Medical and pharmaceutical research involving human subjects is extensively
regulated by both state and federal governments. These regulations pertain to a
variety of issues, including, among others, informed consent, patient privacy
and safety. Certain categories of patients, such as people being treated for
drug or alcohol abuse and people who are HIV positive are provided special
additional

                                       24
<Page>
protections. Our failure or inability to comply with these regulations could
result in termination of our ongoing research, disqualification of research
data, or substantial monetary penalties, which could have a material adverse
effect on our business, and results of operations.

    In addition, medical and pharmaceutical research may involve the use of
radioactive material, exposure to blood borne pathogens, and the creation of
hazardous medical waste, all of which are subject to substantial state and
federal regulation. Failure to comply with applicable regulations could have a
material adverse effect on our business. Governmental agencies also could impose
costly additional requirements to ensure compliance, levy substantial monetary
penalties, terminate ongoing research or prohibit a planned project from going
forward.

    WE MAY LOSE BUSINESS OPPORTUNITIES AS A RESULT OF HEALTH CARE REFORM

    In the last few years, the U.S. Congress has entertained several
comprehensive health care reform proposals to control growing health care costs.
The proposals were generally intended to expand health care coverage for the
uninsured and reduce the growth of total health care expenditures. While none of
these proposals have been enacted into law, they may be enacted in the future.
If any of these proposals becomes law, drug and biotechnology companies may
react by spending less on research and development. If this were to occur, we
would have fewer business opportunities. We are unable to predict the likelihood
that health care reform proposals will be enacted into law or the effect such
laws would have on our business.

    WE FACE INTENSE COMPETITION

    We primarily compete against dedicated research sites, independent group
physician practices, full service contract research organizations and, to a
lesser extent, universities, teaching hospitals and other site management
organizations. Some of these competitors have greater capital, technical and
other resources than we do. Investigative site management organizations
generally compete on the basis of:

    - the ability to recruit investigators and patients;

    - previous experience;

    - medical and scientific expertise in specific therapeutic areas;

    - the quality of services;

    - the ability to integrate information technology with systems to improve
      the efficiency of clinical research;

    - financial strength and stability; and

    - price.

    WE MAY NOT HAVE ADEQUATE INSURANCE AND MAY HAVE SUBSTANTIAL EXPOSURE TO
     PAYMENT OF PERSONAL INJURY CLAIMS

    Clinical research services primarily involve the testing of experimental
drugs on consenting human volunteers pursuant to a study protocol. Such services
involve a risk of liability for personal injury or death to patients who
participate in the study or who use a drug approved by regulatory authorities
due to, among other reasons, unforeseen adverse side effects or improper
administration of the new drug by physicians. In certain cases, these patients
are already seriously ill and are at risk of further illness or death.

                                       25
<Page>
    CURRENTLY WE ARE EFFECTIVELY CONTROLLED BY A SINGLE INVESTOR

    Nearly 50% of our undiluted capital stock is controlled by one stockholder.
As a result, such stockholder may be able to exert effective control over the
outcome of corporate actions requiring stockholder approval and to control the
election of the Company's Board of Directors.

    WE MAY NOT BE ABLE TO EFFECT A SALE OF OUR NETWORK MANAGEMENT DIVISION AT AN
     ACCEPTABLE PRICE OR AT ALL

    We believe that the sale of our network management division is in our
long-term best interests and in the best interests of our stockholders. We may
not, however, receive in the sale of the network management division a price
that we believe reflects the value of the division. Further, based on current
market conditions, we may not be able to effect the sale at all. If we are
unable to effect the sale of our network management division or if we are forced
to sell it at a price below what we believe is its value, our business and
results of operations could be materially and adversely affected.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company is subject to market risk from exposure to changes in interest
rates based on its financing, investing and cash management activities. The
Company does not expect changes in interest rates to have a material effect on
income or cash flows for the year ended January 31, 2002, although there can be
no assurances that interest rates will not significantly change.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    Information with respect to Item 8 of Part II is included herein as to the
Company's financial statements and financial statement schedules filed with this
report; See Item 14 of Part IV.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.

    In August 2000, the Company appointed Arthur Andersen, LLP as its
independent public accountants.

                                       26
<Page>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The following table sets forth certain information pertaining to the
Company's directors and executive officers.

<Table>
<Caption>
NAME                            CURRENT POSITION
----                            ----------------
<S>                             <C>
Michael T. Heffernan..........  Chairman of the Board of Directors, Chief Executive Officer,
                                  President and Director
Bryan B. Dieter...............  Chief Information Officer
Gary S. Gillheeney............  Chief Financial Officer, Treasurer and Secretary
R. Adrian Otte, M.D...........  Chief Operating Officer for Clinical Studies and Healthcare
                                  Research
John Wardle...................  Chief Operating Officer for Network Management
William S. Bernstein..........  Director
Yang Lie......................  Director
David M. Livingston, M.D......  Director
Kevin E. Moley................  Director
Marvin Moser, M.D.............  Director
Eric Moskow, M.D..............  Director
</Table>

    The following table sets forth certain information for the executive
officers and members of the Company's Board of Directors

    WILLIAM S. BERNSTEIN, age 45, has served as a director since
September 2000. He is the Founder, Co-Chairman and President, Corporate
Development of Physician WebLink since 1999. From 1995 to 1999, Co-Chairman and
Co-Chief Executive Officer of Teleses Medical Management (Physician WebLink's
predecessor). Of Counsel to Kalkines, Arky, Zall, Bernstein LLP (law firm).
Mr. Bernstein was a founder and, through 1999, a director of Sterling Health
Capital Management, Inc. (healthcare consulting).

    BRYAN B. DIETER, age 43, has served as Chief Information Officer of the
Company since April 1999. From 1997 to April 1999 he was Director of Corporate
Development at IDX Systems Corporation. He also served as Senior Vice President
of Healthcare Informatics at Medaphis Corporation from 1995 until 1997. He was
also the founder and President of Decision Support Group, a healthcare
information systems consulting company from 1991 to 1995.

    GARY S. GILLHEENEY, age 46, has served as Chief Financial Officer, Treasurer
and Secretary of the Company since August 1999. Previously, he held several
senior management positions with Providence Energy Corporation, including Senior
Vice President, Chief Financial Officer, Treasurer and Assistant Secretary from
1996 until 1999, Vice President Financial Information Services and Treasurer
from 1994 until 1996, and as Controller from 1989 until 1994.

    MICHAEL T. HEFFERNAN, age 36, since July 1999 has served as Chairman of the
Board of Directors and Chief Executive Officer, as President of the Company
since December 1998, as Co-Chief Executive Officer from April 1999 to July 1999
and as a director of the Company since February 1998. He also serves as the
Chief Executive Officer of the Company's subsidiary, Clinical Studies, Ltd.
("CSL"), a multi- therapeutic site management organization acquired by the
Company in October 1997. Prior to the Company's acquisition of CSL,
Mr. Heffernan served as the President and Chief Executive Officer of CSL, a
position he held since 1995. From 1993 to 1995, Mr. Heffernan served as a
Regional Manager with Eli Lilly & Company.

    YANG LIE, age 35, has served as director since September 2000. She has been
a portfolio manager with MJ Whitman Advisers and senior analyst with Third
Avenue Funds since 1996. From

                                       27
<Page>
1995 to 1996, equity analyst for Prudential Securities, Inc. Software and
hardware design and development engineer at Motorola from 1988 to 1995.

    DAVID M. LIVINGSTON, M.D., age 60, has served as a director since
January 1996. Dr. Livingston has previously served as Director of Dana-Farber
Cancer Institute in Boston, Massachusetts and has been employed as a physician
at the Institute since 1973. He currently serves as Chairman of the Institute's
Executive Committee for Research and as a Trustee of the Institute. He is also
the Emil Frei Professor of Medicine and Genetics at Harvard Medical School where
he has taught since 1973.

    KEVIN E. MOLEY, age 54, has served as a director of the Company since
February 1999. From March to October 1998, Mr. Moley was an executive consultant
to Kinetra LLC. He served as President and Chief Executive Officer of Integrated
Medical Systems, Inc. from January 1996 to March 1998. From February 1993 to
January 1996, he served as Senior Vice President to PCS Health Systems, inc.
During the administration of President George Bush, Mr. Moley served in the
United States Department of Health and Human Services in various capacities,
including as a member of the Transition Team from February to May of 1989, as an
Assistant Secretary for Management and Budget from May 1989 to November 1991,
and as Deputy Secretary from November 1991 to January 1993. Mr. Moley served as
chairman of Patient Care Dynamics from November 1998 to December 1999.
Mr. Moley served as a director of each of Cephalon, Inc., Merge Technology Inc.
and PerSe Technology from November 1998 through December 1999. Mr. Molye served
as a director of ProxyMed from June 1999 to July 2000.

    MARVIN MOSER, M.D., age 77, has served as a director since September 2000.
He served as trustee of the Trudeau Institute, a medical research institute,
since 1992. Dr. Moser is a Clinical Professor of Medicine at Yale University
School of Medicine, a Senior Medical Consultant for the National High Blood
Pressure Education Program of the National Heart, Lung and Blood Institute and
former Chairman and member of the Joint National Committee on Detection,
Evaluation and Treatment of High Blood Pressure for the National Heart, Lung and
Blood Institute. Dr. Moser has also served as a director of AMBI Corp. since
1997.

    ERIC MOSKOW, M.D., age 42, has served as a director of the Company since
September 1996 and was Executive Vice President of Strategic Planning of the
Company from September 1996 through January 2000, at which time he became a
business and corporate development consultant for the Company. He founded
Physician's Choice Management, LLC in October 1995 and served as its Executive
Vice President from October 1995 to October 1996. Prior to establishing
Physician's Choice, he served as Medical Director for Mediplex of Ridgefield
from November 1994 to August 1996 and as Associate Medical Director for US
Healthcare in Connecticut from 1988 to 1992. Dr. Moskow is board-certified in
internal medicine and served as President of the Family Medical Associates of
Ridgefield for nine years.

    R. ADRIAN OTTE, M.D., age 45, has served as Chief Operating Officer for
Clinical Studies and Healthcare Research, of the Company since July 1999. From
1997 until 1999, he served as Vice President of Medical Research for Zeneca
Pharmaceuticals. He held various positions at PAREXEL International in Europe
and the U.S. from 1991 to 1997, including Senior Vice President of Medical and
Site Management Services. Prior to joining PAREXEL International he spent ten
years at Solvay Pharmaceuticals as the Head of Clinical Research Europe.

    JOHN WARDLE, age 46, has served as the Chief Operating Officer for Network
Management of the Company since April 1999. Previously, he served as Senior Vice
President of United Healthcare of New England from July 1997 to April 1999.
Mr. Wardle served as the General Manager for External Affairs at Southern Health
Care from November 1995 to July 1997. He also served United HealthCare
Corporation as a Vice President from May 1994 to November 1995 and as a Director
of Subsidiary Network Development from June 1993 to May 1994.

                                       28
<Page>
ITEM 11. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                             LONG TERM
                                                                            COMPENSATION
                                               ANNUAL COMPENSATION(A)       ------------
                                           ------------------------------    SECURITIES
                                            FISCAL                           UNDERLYING     ALL OTHER
NAME AND PRINCIPAL POSITION                  YEAR      SALARY     BONUS       OPTIONS      COMPENSATION
---------------------------                --------   --------   --------   ------------   ------------
<S>                                        <C>        <C>        <C>        <C>            <C>
Michael T. Heffernan, R. Ph. ............    2001     $207,800   $100,000(b)    357,143      $899,550(c)
  President, Chief Executive Officer and     2000      203,313    100,000      300,000(e)          --
  Chairman                                   1999      214,842    100,000           --             --

Bryan B. Dieter(f) ......................    2001     $200,000   $     --      357,143       $200,000(d)
  Chief Information Officer                  2000      183,333     36,667      100,000(e)      76,355

Gary S. Gillheeney(g) ...................    2001     $200,000   $     --      357,143       $202,550(d)
  Chief Financial Officer                    2000       79,768     29,088      100,000(e)          --

R. Adrian Otte, M.D.(h) .................    2001     $250,000   $     --      457,143       $202,550(d)
  Chief Operating Officer--Clinical          2000      218,710     27,542      200,000(e)          --
  Trials and Healthcare Research

John Wardle(i) ..........................    2001     $210,000   $     --      357,143       $202,550(d)
  Chief Operating Officer--Network           2000      173,519     53,050      100,000(e)          --
  Management
</Table>

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

(a) Any perquisites or other personal benefits received from the Company by the
    Named Executive Officer were substantially less than 10% of the individual's
    cash compensation.

(b) Mr. Heffernan's bonus was awarded pursuant to his employment agreement.

(c) The effectiveness of the Company's Prepackaged Plan was deemed to result in
    a "change of control" for purposes of Mr. Heffernan's then existing
    employment agreement. This amount reflects the change of control bonus to
    which Mr. Heffernan was entitled pursuant to the Prepackaged Plan, plus the
    Company's contribution under the 401(k) plan in the amount of $2,550.

(d) Pursuant to a resolution of the compensation committee of the Company's
    Board of Directors in December 1999, the Company approved a plan to ensure
    the retention of its key executives. This amount reflects payment pursuant
    to this plan plus, in care of Messrs. Gilheeney and Wardle, and Dr. Otte,
    the Company's contributions under the 401(k) plan in the amount of $2,550
    each.

(e) Represents options to purchase shares of the Company's Old Common Stock,
    which options were cancelled in connection with the effectiveness of the
    Company's Prepackaged Plan.

(f) Mr. Dieter became an executive officer in February 1999.

(g) Mr. Gillheeney became an executive officer in August 1999.

(h) Dr. Otte became an executive officer in July 1999.

(i) Mr. Wardle became an executive officer in April 1999.

                                       29
<Page>
                     OPTION/SAR GRANTS IN LAST FISCAL YEAR

    The following table provides information on option grants in fiscal 2001 to
the Named Executive Officers. The Company does not issue stock appreciation
rights.

<Table>
<Caption>
                                                 INDIVIDUAL GRANTS
                              --------------------------------------------------------
                                NUMBER
                                  OF         PERCENT OF
                              SECURITIES       TOTAL                                     POTENTIAL REALIZABLE VALUE AT
                              UNDERLYING      OPTIONS/                                      ASSUMED ANNUAL RATES OF
                               OPTIONS/         SARS                                     STOCK PRICE APPRECIATION FOR
                                 SARS        GRANTED TO       EXERCISE                          OPTION TERM (B)
                               GRANTED       EMPLOYEES      OR BASE PRICE   EXPIRATION   -----------------------------
NAME                           (#) (A)     IN FISCAL YEAR      ($/SH)          DATE         5% ($)          10% ($)
----                          ----------   --------------   -------------   ----------   -------------   -------------
<S>                           <C>          <C>              <C>             <C>          <C>             <C>
Michael T. Heffernan........    357,143         17.11%          $1.11       9/21/2010     $  853,534      $1,658,023
Brian B. Dieter.............    357,143         17.11%          $1.11       9/21/2010     $  853,534      $1,658,023
Gary S. Gillheeney..........    357,143         17.11%          $1.11       9/21/2010     $  853,534      $1,658,023
R. Adrian Otte, M.D.........    457,143         21.90%          $1.11       9/21/2010     $1,092,524      $2,122,270
John Wardle.................    357,143         17.11%          $1.11       9/21/2010     $  853,534      $1,658,023
</Table>

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

(a) All options were granted at an exercise price equal to the lesser of
    (i) the average of the closing prices on the 30th through the 60th day
    (inclusive) immediately following September 21, 2000 or (ii) $2.31482.
    Application of the foregoing produced an exercise price of $1.11

(b) The potential realizable dollar value of each grant of options is the
    product of (i) the difference between (A) the product of the per-share
    market price at the time of the grant and the sum of 1 plus the adjusted
    stock price appreciation rate (the assumed rate of appreciation compounded
    annually over the term of the option) and (B) the per share exercise price
    of the option; and (ii) the number of securities underlying the grant at
    fiscal year-end. The options were granted in conjunction with the
    effectiveness of the Company's Prepackaged Plan. On such date, there was no
    reliably reported per share market price for shares of the Company's Common
    Stock. Accordingly, for purposes of this table only, the Company has assumed
    that the per share market price of the Common Stock on the date of grant was
    equal to the per share market price on October 9, 2001, the date that
    reliably reported per share market price information was first available.
    This reported market price on this date was $2.125 per share. The dollar
    amounts under these columns are the result of calculations at 5% and 10%
    rates set by the Securities and Exchange Commission and, therefore, are not
    intended to forecast possible future appreciation, if any, of the price of
    ICSL Common Stock. At a 5% and 10% annual rate of stock price appreciation,
    the stock price would be approximately $3.50 and $5.75 respectively at the
    end of the ten-year term of the options granted on September 21, 2000.

                                       30
<Page>
  AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR
                                     VALUES

    The following table sets forth certain information regarding stock options
exercised during 2001 and currently outstanding options held by the Named
Executive Officer as of January 31, 2001:

<Table>
<Caption>
                                                               NUMBER OF SECURITIES
                                                              UNDERLYING UNEXERCISED       VALUE OF UNEXERCISED
                                                              OPTIONS/SARS AT FISCAL       IN-THE-MONEY OPTION/
                             SHARES ACQUIRED      VALUE            YEAR END 2001                SARS($)(A)
NAME                           ON EXERCISE     REALIZED($)   EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE
----                         ---------------   -----------   -------------------------   -------------------------
<S>                          <C>               <C>           <C>                         <C>
Michael T. Heffernan.......         0               0            0/357,143                    0/0
Brian B. Dieter............         0               0            0/357,143                    0/0
Gary S. Gillheeney.........         0               0            0/357,143                    0/0
R. Adrian Otte, M.D........         0               0            0/457,143                    0/0
John Wardle................         0               0            0/357,143                    0/0
</Table>

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

(a) Based on the January 31, 2001 closing sale price of the Common Stock of
    $0.5625 all options are out of the money.

    EMPLOYMENT AGREEMENTS

    On the Effective Date, the Company entered into employment agreements with
Messrs. Heffernan, Dieter, Wardle and Gillheeney and Dr. Otte. The employment
agreements provided for employment of such executives commencing on the
Effective Date of the Prepackaged Plan and continuing for a period of three
years. The agreements provide for an annual base salary of $300,000 for
Mr. Heffernan, $200,000 for Mr. Dieter, $200,000 for Mr. Gillheeney, $250,000
for Dr. Otte, and $210,000 for Mr. Wardle, respectively. Each is entitled to an
annual bonus (the payment of which may be deferred at their election with the
permission of the Company's Board of Directors). Mr. Heffernan's annual bonus
will be as determined by the Company's Board of Directors. Annual bonuses for
Messrs. Dieter, Wardle and Gillheeney and Dr. Otte will be up to 25% of their
annual salary based upon criteria established by the Board of Directors. The
employment agreements also provided for grants of options to purchase New Common
Stock to Messrs. Heffernan, Dieter, Wardle and Gillheeney and Dr. Otte as set
forth above in Part III, Item 11, Executive Compensation.

    In the event the Company implements qualified defined benefit and/or defined
contribution retirement plans, Messrs. Heffernan, Dieter, Gillheeney and Wardle
and Dr. Otte will be entitled to participate in them if they are eligible and
meet the plan requirements. In addition, each is entitled to participate in any
supplemental retirement plan and all other nonqualified retirement programs the
Company offers to executives having similar duties and responsibilities with
ICSL and all benefits to which the Company's other executives and employees are
entitled. ICSL can modify its nonqualified retirement programs so long as the
modifications apply to all executives generally. ICSL will also reimburse
Mr. Heffernan for up to $1,000 per year for the cost of his life insurance.

    If a Change of Control (as defined in the employment agreements) occurs
during the term of his employment agreement, or within six months following the
earlier termination of his employment with ICSL, due to the Company's
termination without cause or his termination for one of the reasons listed below
(other than expiration and failure to continue his employment term),
Mr. Heffernan will be entitled to receive a supplemental bonus payment from the
Company equal to 2.99 times his salary and annual bonus in a lump sum within
fifteen (15) days following the Change of Control. Under the employment
agreements with Messrs. Dieter, Gillheeney and Wardle and Dr. Otte, if a Change
of Control occurs and the executive's employment is terminated due to the
Company's termination without cause or his termination for one of the reasons
listed below (other than expiration and failure to continue his employment
term), six months prior to or within 12 months after the Change of Control, such
executive will be entitled to receive a supplemental bonus payment from the
Company

                                       31
<Page>
equal to 2.99 times his respective salary in a lump sum within fifteen
(15) days following the Change of Control or their termination of employment, if
later. If a Change of Control occurs after July 31, 2002, any supplemental bonus
will be subject to the condition that the Company has achieved a cumulative
positive comprehensive net income from operations (excluding amortization of
goodwill) for the period commencing after July 31, 2000 through the company's
quarterly fiscal period immediately prior to the date of the Change of Control,
based upon the Company's audited financial statements and interim financial
statements.

    The Company may terminate each executive's employment agreement with or
without cause effective immediately upon delivery of written notice. We may
terminate an executive for cause on the following grounds:

    - misappropriation of any of our material assets or opportunities;

    - conviction of a felony involving violence, dishonesty, conversion, theft
      or misappropriation of property, controlled substances, moral turpitude or
      our regulatory good standing;

    - abuse of drugs or alcohol in a manner which prevents him from performing
      substantially his duties;

    - failure or refusal to perform his material duties (other than by reason of
      disability) or breach of any material obligations under his employment
      agreement;

    - engaging in willful, grossly negligent or reckless misconduct which our
      Board of Directors acting in good faith determines to be materially
      injurious to us; or

    - acting in a manner which our Board of Directors acting in good faith
      determines has negatively impacted upon our reputation, name, goodwill,
      business or regulatory standing.

    Each executive may terminate his employment agreement if the Company:

    - fails to pay any sums due, grant any stock options to which the executive
      is entitled under his employment agreement or perform substantially any of
      our other material duties and obligations pursuant to his employment
      agreement after written notice has been given and we have not cured or
      begun to cure any such failure within thirty days after such notice is
      given;

    - reassigns the executive from Providence, Rhode Island without his prior
      approval (other than ordinary travel requirements);

    - materially changes his duties without prior written consent;

    - reduces his salary, or materially reduces the level of his participation
      in any of our incentive compensation plans, or employee benefit or
      retirement plans, policies, practices, or arrangements without his consent
      unless the reduced level of participation remains substantially consistent
      with the average level of participation of other executives who have
      commensurate positions; or

    - in the event that at the expiration of his three-year employment term we
      fail to make a good faith offer to continue his employment on
      substantially similar terms.

    Mr. Heffernan has the additional ability to terminate his employment
agreement if he shall cease to be a member of our Board of Directors other than
by reason of his death, disability, retirement or resignation. The employment
agreements terminate upon the occurrence of death, disability or expiration of
the term of employment unless extended.

    Each executive may also resign his employment upon thirty-days' notice,
other than for the reasons listed above, but he will not, in that case, be
entitled to the severance payments and benefits described below or the Change of
Control (as defined in the employment agreements) payments described above.

                                       32
<Page>
    Upon termination of an executive's employment for any reason other than for
cause, death or disability or his voluntary resignation other than for the
reasons listed above, the Company will continue to pay the executive's salary
(and, in the case of Mr. Heffernan, the accrued portion, if any, of any annual
bonus) for an additional period of 12 months (18 months for Mr. Heffernan) after
such termination or the remainder of the term of the employment agreement,
whichever is longer, or, at our option, a lump sum amount equal to such
payments, subject to all appropriate withholding taxes. Such an executive will
also be entitled to (i) a continuation of the welfare benefits of medical
insurance, dental insurance, and group term life insurance for two full years
after the effective date of termination and (ii) a lump-sum cash payment of the
actuarial present value equivalent of the aggregate benefits accrued as of the
effective date of termination under the terms of any and all supplemental
retirement plans in which he participates. The continuation of welfare benefits
will be discontinued prior to the end of the two (2) year period if
substantially similar benefits from a subsequent employer, as determined by our
Board of Directors, are available to the executive. In any event, each such
executive will be entitled to reimbursement for business expenses properly
incurred in connection with his duties prior to termination.

    In connection with their employment, Messrs. Heffernan, Dieter, Gillheeney
and Wardle and Dr. Otte are subject to standard confidentiality provisions and
have agreed not to compete with us during, and following termination of, their
employment term for the greater of 12 months or the period with respect to which
their severance payments are made.

    In January 2001, the Company and Mr. Wardle amended Mr. Wardle's employment
agreement to include the sale of the network management division within the
definition of the Change of Control. Mr. Wardle's employment agreement was
otherwise unchanged.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    SECURITY OWNERSHIP OF 5% BENEFICIAL OWNERS

    The following table sets forth information as of June 22, 2001, regarding
the beneficial owners of more than 5% of the Company's Common Stock:

<Table>
<Caption>
                                                                             PERCENT
                                                    AMOUNT AND NATURE OF        OF
NAME AND ADDRESS OF BENEFICIAL OWNER               BENEFICIAL OWNERSHIP(A)    CLASS
------------------------------------               -----------------------   --------
<S>                                                <C>                       <C>
EQSF Advisers, Inc.(b) ..........................         5,441,040            45.3%
  767 Third Avenue
  New York, NY 10017-2023
</Table>

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

(a) All information is based upon ownership of record as reflected on the stock
    transfer books of the Company or as reported on Schedule 13G or
    Schedule 13D filed under Rule 13d-1 under the Securities Exchange Act of
    1934, as amended (the "Exchange Act").

(b) Includes 5,146,740 shares held by EQSF Advisers,  Inc. ("EQSF") and 24,300
    shares held by M.J. Whitman Advisers, Inc. ("MJWA"). Martin J. Whitman is
    the Chief Executive Officer of EQSF and MJWA and controlling person of EQSF
    and MJWA. Mr. Whitman disclaims beneficial ownership of all such shares.

    SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS

    The following tables set forth certain information regarding the beneficial
ownership of the Company's Common Stock as of June 22, 2001 by each director,
each executive officer named in the Summary Compensation Table and all directors
and executive officers as a group. Unless otherwise

                                       33
<Page>
indicated, each person has sole voting and dispositive power over the shares
indicated as owned by such person.

<Table>
<Caption>
                                                 AMOUNT AND NATURE OF     PERCENT OF
NAME OF BENEFICIAL OWNER                        BENEFICIAL OWNERSHIP(A)    CLASS(B)
------------------------                        -----------------------   ----------
<S>                                             <C>                       <C>
William S. Bernstein..........................              --                   --
Bryan B. Dieter...............................              --                   --
Gary S. Gillheeney............................              --                   --
Michael T. Heffernan..........................           5,806                *
Yang Lie(b)...................................              --                   --
David M. Livingston, M.D......................              --                   --
Kevin E. Moley................................              --                   --
Marvin Moser..................................          10,800                *
Eric Moskow(c)................................             390                *
Adrian R. Otte................................              --                   --
John Wardle...................................              --                   --
Directors and executive officers as a group
  (11 Persons)................................          16,996                *
</Table>

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

*   Less than one percent.

(a) If applicable, beneficially owned shares include shares owned by the spouse,
    children and certain other relatives of the director or officer, as well as
    shares held by trusts of which the person is a trustee or in which he has a
    beneficial interest and shares acquirable pursuant to options which are
    presently or will become exercisable within 60 days. All information with
    respect to beneficial ownership has been furnished by the respective
    directors and officers.

(b) Ms. Lie is a portfolio manager with MJWA and a senior analyst with Third
    Avenue Funds ("TAF"), both of which are controlled by Martin J. Whitman.
    MJWA, together with EQSF, which also is controlled by Martin J. Whitman, own
    approximately 45.3% of the Company's issued and outstanding Common Stock.

(c) Includes 390 shares held by Physician's Choice, LLC.

    SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

    Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires executive officers and directors and persons who
beneficially own more than ten percent of the Company's Common Stock to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission (the "SEC") and any national securities
exchange on which the Company's securities are registered. Based solely on a
review of the copies of such forms furnished to the Company and written
representations from the executive officers and directors, the Company believes
that during 2001 its executive officers, directors and greater than ten percent
beneficial owners complied with all applicable Section 16(a) filing
requirements, other than Dr. Eric Moskow who failed to timely file a report on
Form 4 due on October 10, 2000.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    On January 27, 2000, the Company entered into a Consulting Agreement and
Release with Dr. Eric Moskow. Until the effective date of this agreement,
Dr. Moskow had been a director and employee of the Company. Pursuant to this
agreement, Dr. Moskow has ceased his employment with the Company, but remains as
a director and a consultant. As compensation for his consulting services,
Dr. Moskow receives $100,000 per year. This consultancy arrangement was
terminated in November 2000. In addition, Dr. Moskow is entitled to a bonus
equal to 2% of any earned revenue for

                                       34
<Page>
the first twelve months following the consummation of transactions he brings to
the Company. The agreement also provides for the termination of his employment
agreement and the cancellation of all outstanding stock options and the
cancellation of his indebtedness to the Company in the amount of $1.0 million.
By terminating Dr. Moskow's employment agreement, the Company avoided a payment
of $1.0 million that would have been due to Dr. Moskow under his employment
agreement upon the closing of the recapitalization. The agreement also provides
for the mutual release of any claims. Also, in August 1996, in connection with
the acquisition of his company, the Company loaned Dr. Moskow $448,000 on a
non-recourse basis secured by a pledge of 58,151 shares of Old Common Stock. On
December 29, 1999, the Company foreclosed on Dr. Moskow's shares of Old Common
Stock which were pledged by Dr. Moskow as security for this loan. Although the
pledged shares were insufficient to satisfy Dr. Moskow's obligations, they were
the Company's sole recourse with respect to the loan.

    The Company has retained Kalkines, Arky, Zall, Bernstein LLP ("KAZB") to
represent it in connection with the proposed sale the Company's network
management division. William S. Bernstein is a member of the Company's Board of
Directors and of counsel to KAZB.

                                    PART IV

ITEM 14. FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

    All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.

(a) Reports on Form 8-K

    The Predecessor filed a Current Report on Form-8-K on May 23, 2000 with the
    Security and Exchange Commission reporting under Item 5 the Predecessor's
    plan to convert its Debentures to common equity through a Prepackaged Plan
    of Reorganization.

    The Predecessor filed a Current Report on Form-8-K on June 12, 2000 with the
    Security and Exchange Commission reporting that the Predecessor had
    commenced the solicitation of acceptances to the Prepackaged Plan.

    The Predecessor filed a Current Report on Form-8-K on June 20, 2000 with the
    Security and Exchange Commission reporting that the Predecessor was informed
    by its independent accountants, PricewaterhouseCoopers LLP, that it was
    resigning as the Predecessor's independent accountants.

    The Predecessor filed a Current Report on Form-8-K/A on July 10, 2000 with
    the Security and Exchange Commission amending its June 20, 2000 report
    regarding the resignation of its independent accountants.

    The Predecessor filed a Current Report on Form-8-K on July 14, 2000 with the
    Security and Exchange Commission reporting that it and its wholly owned
    subsidiaries filed voluntary petitions for protection under Chapter 11 of
    the United States Bankruptcy Code with the United States Bankruptcy Court
    for the District of Delaware.

    The Predecessor filed a Current Report on Form-8-K on August 28, 2000 with
    the Security and Exchange Commission reporting that the United States
    Bankruptcy Court for the District of Delaware had confirmed the
    Predecessor's Prepackaged Plan.

    The Company filed a Current Report on Form-8-K on October 3, 2000 with the
    Security and Exchange Commission reporting that as of September 20, 2000
    effective date of the Predecessor's Prepackaged Plan, a change of control of
    the Company occurred.

                                       35
<Page>
(b) Exhibits

    Please see the Exhibit Index to this Report which is incorporated herein by
    reference.

(c) Financial Statements Excluded from Annual Report to Stockholders

    Not Applicable

                                       36
<Page>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.

<Table>
<S>                                                    <C>  <C>
                                                       INNOVATIVE CLINICAL SOLUTIONS, LTD

                                                       By:           /s/ MICHAEL T. HEFFERNAN
                                                            -----------------------------------------
                                                                       Michael T. Heffernan
                                                              CHAIRMAN OF THE BOARD OF DIRECTORS AND
                                                                     CHIEF EXECUTIVE OFFICER
                                                                       DATE: AUGUST 9, 2001
</Table>

    Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dated indicated.

<Table>
<Caption>
                  SIGNATURE                                    TITLE                       DATE
                  ---------                                    -----                       ----
<C>                                            <S>                                    <C>
                                               Chairman of the Board of Directors,
          /s/ MICHAEL T. HEFFERNAN               Chief Executive Officer and
    ------------------------------------         President (Principal Executive       August 9, 2001
            Michael T. Heffernan                 Officer)

           /s/ GARY S. GILLHEENEY              Chief Financial Officer and Treasurer
    ------------------------------------         (Principal Financial and Accounting  August 9, 2001
             Gary S. Gillheeney                  Officer)

          /s/ WILLIAM S. BERNSTEIN
    ------------------------------------       Director                               August 9, 2001
            William S. Bernstein

                /s/ YANG LIE
    ------------------------------------       Director                               August 9, 2001
                  Yang Lie

        /s/ DAVID M. LIVINGSTON, M.D.
    ------------------------------------       Director                               August 9, 2001
          David M. Livingston, M.D.

             /s/ KEVIN E. MOLEY
    ------------------------------------       Director                               August 9, 2001
               Kevin E. Moley

           /s/ MARVIN MOSER, M.D.
    ------------------------------------       Director                               August 9, 2001
             Marvin Moser, M.D.

            /s/ ERIC MOSKOW, M.D.
    ------------------------------------       Director                               August 9, 2001
              Eric Moskow, M.D.
</Table>

                                       37
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<Table>
<Caption>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Reports of Independent Public Accountants...................    F-2

Consolidated Balance Sheets as of January 31, 2001
  (Successor Company) and 2000 (Predecessor Company)........    F-4

Consolidated Statements of Operations for the period ended
  January 31, 2001 (Successor Company) and the period ended
  September 20, 2000 and fiscal years ended January 31,
  2000, and 1999 (Predecessor Company)......................    F-5

Consolidated Statements of Changes in Stockholders' Equity
  for the period ended January 31, 2001 (Successor Company)
  and the period ended September 20, 2000 and the fiscal
  years ended January 31, 2000, and 1999 (Predecessor
  Company)..................................................    F-6

Consolidated Statements of Cash Flows for the period ended
  January 31, 2001 (Successor Company) and the period ended
  September 20, 2000 and the fiscal years ended January 31,
  2000, and 1999 (Predecessor Company)......................    F-7

Notes to Consolidated Financial Statements..................    F-8
</Table>

                                      F-1
<Page>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Innovative Clinical Solutions, Ltd.:

    We have audited the accompanying consolidated balance sheet of Innovative
Clinical Solutions, Ltd. (a Delaware corporation) (the Company) as of
January 31, 2001, and the related consolidated statements of operations,
stockholders' equity and cash flows for the nineteen-week period then ended. We
have also audited the consolidated statements of operations, stockholders equity
and cash flows of the predecessor for the thirty-three weeks ended
September 20, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    On September 21, 2000, the Company emerged from bankruptcy. As discussed in
Note 3 to the consolidated financial statements, effective September 21, 2000
the Company accounted for the reorganization and adopted "fresh start
reporting". As a result of the reorganization and adoption of fresh start
reporting, the January 31, 2001 consolidated balance sheet is not comparable to
the Company's January 31, 2000 consolidated balance sheet since it presents the
consolidated financial position of the reorganized entity.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Innovative Clinical
Solutions Ltd. as of January 31, 2001, and the results of its operations and its
cash flows for the nineteen week period then ended and the results of operations
and cash flows for the predecessor for the thirty-three week period ended
September 20, 2000, in conformity with accounting principles generally accepted
in the United States.

    The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and negative cash flow from operations that raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

Arthur Andersen LLP

Boston, Massachusetts

June 21, 2001 (Except for the matters discussed in Note 20, as to which the date
is July 13, 2001)

                                      F-2
<Page>
                       REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of Innovative Clinical Solutions Ltd.:

    In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations and of changes in stockholders' equity and
of cash flows present fairly, in all material respects, the financial position
of Innovative Clinical Solutions Ltd. at January 31, 2000 and 1999, and the
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

    The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has experienced recurring losses from
operations, negative cash flows from operations and has net negative equity,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

PricewaterhouseCoopers LLP

Boston, Massachusetts

May 19, 2000

                                      F-3
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.
                          CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

    The purchase method of accounting was used to record the fair value of
assets and assumed liabilities of the reorganized company at September 20, 2000.
Accordingly, the accompanying balance sheet as of January 31, 2001 is not
comparable in certain material respects to such balance sheet as of any period
prior to September 20, 2000 since the balance sheet as of January 31, 2001 is
that of a reorganized entity.

<Table>
<Caption>
                                                               SUCCESSOR     PREDECESSOR
                                                                COMPANY        COMPANY
                                                              ------------   ------------
                                                              JANUARY 31,    JANUARY 31,
                                                                  2001           2000
                                                              ------------   ------------
<S>                                                           <C>            <C>
ASSETS
Current assets
Cash and cash equivalents...................................    $  5,548      $  25,558
Receivables:
  Accounts receivable and unbilled revenue, net of
    allowances of $4,000 and $3,846 at January 31, 2001 and
    2000, respectively......................................      11,891         16,193
  Other receivables.........................................         208          4,710
  Related party and other notes receivables.................       1,625          7,222
Prepaid expenses and other current assets...................         515            394
Assets held for sale........................................       1,913          2,419
                                                                --------      ---------
    Total current assets....................................      21,700         56,496
Property, plant and equipment, net..........................       3,975          9,099
Notes receivable............................................       3,093          4,892
Goodwill, net...............................................          --         12,293
Reorganization value in excess of amounts allocable to
  identifiable assets.......................................      27,000             --
Restricted cash.............................................       2,062          2,077
Other assets................................................         350          2,454
                                                                --------      ---------
    Total assets............................................    $ 58,180      $  87,311
                                                                ========      =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Bank line of credit.........................................       6,209         10,463
Current portion of debt and capital leases..................       3,460          1,255
Liabilities subject to compromise...........................          --        100,000
Accounts payable............................................       1,464         11,859
Accrued compensation........................................       1,152          2,060
Accrued and other current liabilities.......................      18,090         23,575
                                                                --------      ---------
    Total current liabilities...............................      30,375        149,212
Long-term debt and capital leases...........................         907          4,234
Other long-term liabilities.................................       4,250             95
Minority interest...........................................          --            492
                                                                --------      ---------
    Total liabilities.......................................      35,532        154,033
Commitments and contingencies
Stockholders' equity:
Common stock (new), par value $.01, 40,000 shares
  authorized, 11,999 issued and outstanding at
  September 20, 2000........................................         120
Common stock (old), par value $.01, 40,000 shares
  authorized, 33,387 issued and 32,011 outstanding at
  January 31, 2000..........................................                        320
Treasury stock (old)........................................          --         (2,664)
Additional paid in capital..................................      49,880        224,771
Accumulated other comprehensive income......................          77             --
Retained Earnings (accumulated deficit).....................     (27,429)      (289,149)
                                                                --------      ---------
    Total stockholders' equity (deficit)....................      22,648        (66,722)
                                                                --------      ---------
    Total liabilities and stockholders' equity (deficit)....    $ 58,180      $  87,311
                                                                ========      =========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      F-4
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                                   PREDECESSOR
                                                       SUCCESSOR                     COMPANY
                                                        COMPANY       --------------------------------------
                                                     --------------                         YEAR ENDED
                                                     19 WEEKS ENDED   33 WEEKS ENDED        JANUARY 31,
                                                      JANUARY 31,     SEPTEMBER 20,    ---------------------
                                                          2001             2000          2000        1999
                                                     --------------   --------------   ---------   ---------
<S>                                                  <C>              <C>              <C>         <C>
NET REVENUES (NOTE 2):
Net revenues from services.........................     $ 12,511        $  27,560      $ 125,865   $ 179,472
Net revenues from management service agreements....       16,407           38,195         59,996     103,112
Net revenues from real estate services.............           --               --            423       8,694
                                                        --------        ---------      ---------   ---------
Total revenue......................................       28,918           65,755        186,284     291,278
                                                        --------        ---------      ---------   ---------
OPERATING COSTS AND ADMINISTRATIVE EXPENSES
Salaries, wages and benefits.......................        6,371           18,712         61,924      94,710
Professional fees..................................        2,038            9,335         22,962      16,287
Utilities..........................................          609            1,292          4,037       5,501
Depreciation and amortization......................        1,680            1,893         11,699      14,786
Rent...............................................        1,066            4,049         15,279      20,671
Provision for bad debts............................          126            1,048          6,491       8,428
Loss (gain) on sale of assets (Note 6).............           --               --             11      (5,414)
Provision for write-down of notes receivable
  (Note 5).........................................           --               --         13,840       2,674
Goodwill impairment write-down (Note 2)............       26,908               --         36,046       9,093
Nonrecurring expenses (Note 4).....................           --            9,091          1,723      10,465
Capitation expenses and other......................       17,495           41,521        123,479     151,597
                                                        --------        ---------      ---------   ---------
Total operating costs and administrative
  expenses.........................................       56,293           86,941        297,491     328,798
                                                        --------        ---------      ---------   ---------
Income (loss) from operations......................      (27,375)         (21,186)      (111,207)    (37,520)
                                                        --------        ---------      ---------   ---------
Interest expense, net..............................           54            4,616         10,220       8,005
(Income) from investments in affiliates............           --               --            (46)         --
Reorganization items...............................           --              666             --          --
                                                        --------        ---------      ---------   ---------
                                                             (54)           5,282         10,174       8,005
                                                        --------        ---------      ---------   ---------
Income (loss) before provision for income taxes and
  extraordinary item...............................      (27,429)         (26,468)      (121,381)    (45,525)
Income tax expense (benefit).......................           --            1,456            194     (11,549)
Net income (loss) before extraordinary item
  (Note 2).........................................      (27,429)         (27,924)      (121,575)    (33,976)
Extraordinary (gain) loss, net of tax of $0
  (Note 4).........................................           --         (100,000)        49,632      96,784
                                                        --------        ---------      ---------   ---------
Net income (loss)..................................     $(27,429)       $  72,076      $(171,207)  $(130,760)
                                                        ========        =========      =========   =========
NET INCOME (LOSS) PER SHARE-BASIC (NOTE 17)
Income (loss) before extraordinary item............     $  (2.29)               *      $   (3.45)  $   (1.02)
Extraordinary item, net of tax of $0...............     $   0.00                *      $   (1.41)  $   (2.89)
Net income (loss)..................................     $  (2.29)               *      $   (4.86)  $   (3.91)
NET INCOME (LOSS) PER SHARE-DILUTED (NOTE 17)......                             *
Income (loss) before extraordinary item............     $  (2.29)               *      $   (3.45)  $   (1.02)
Extraordinary item, net of tax of $0...............     $   0.00                *      $   (1.41)  $   (2.89)
Net income (loss)..................................     $  (2.29)               *      $   (4.86)  $   (3.91)
PRO FORMA INFORMATION (NOTE 2).....................                             *
Weighted average shares outstanding-basic
  (Note 17)........................................       11,999                *         35,235      33,401
Weighted average shares outstanding-diluted
  (Note 17)........................................       11,999                *         35,235      33,401
</Table>

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

*   EPS for the Predecessor Company is not meaningful.

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      F-5
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED JANUARY 31, 2001, 2000, AND 1999
                                 (IN THOUSANDS)

<Table>
<Caption>
                                 COMMON STOCK                                ACCUMULATED      RETAINED
                                  OUTSTANDING                  ADDITIONAL       OTHER         EARNINGS
                              -------------------   TREASURY    PAID-IN     COMPREHENSIVE   (ACCUMULATED
                               SHARES     AMOUNT     STOCK      CAPITAL        INCOME         DEFICIT)       TOTAL
                              --------   --------   --------   ----------   -------------   ------------   ---------
<S>                           <C>        <C>        <C>        <C>          <C>             <C>            <C>
PREDECESSOR
BALANCES-JANUARY 31, 1998...  $ 31,248    $ 312     $   (75)    $198,893          --          $  12,905    $ 212,035
Purchase of treasury stock
  at cost...................      (427)      (4)     (1,127)          --          --                 --       (1,131)
Issuance of stock pursuant
  to acquisitions...........     2,059       21          --       25,785          --                 --       25,806
Issuance of stock pursuant
  to stock plans............        36       --          --          130          --                 --          130
Issuance costs and other....        --       --          --          (93)         --                (87)        (180)
Net loss for the year ended
  January 31, 1999..........        --       --          --           --          --           (130,760)    (130,760)
                              --------    -----     -------     --------         ---          ---------    ---------
BALANCES-JANUARY 31, 1999...    32,916      329      (1,202)     224,715          --           (117,942)     105,900
Issuance of stock pursuant
  to acquisitions...........        51        1          --           56          --                 --           57
Purchase of treasury stock
  at cost...................      (956)     (10)     (1,462)          --          --                 --       (1,472)
Net loss for the year ended
  January 31, 2000..........        --       --          --           --          --           (171,207)    (171,207)
                              --------    -----     -------     --------         ---          ---------    ---------
BALANCES-JANUARY 31, 2000...    32,011      320      (2,664)     224,771          --           (289,149)     (66,722)
Issuance of stock pursuant
  to acquisitions...........     5,188       52          --        1,018          --                 --        1,070
Net loss for the period
  ended September 21,
  2000......................        --       --          --           --          --             72,076       72,076
Cancellation of the former
  equity interests under
  September 21, 2000 plan of
  reorganization............   (37,199)    (372)      2,664     (225,789)         --            217,073       (6,424)
                              --------    -----     -------     --------         ---          ---------    ---------

SUCCESSOR
Issuance of new equity
  interest in connection
  with emergence from
  Chapter 11................    11,999      120          --       49,880          --                 --       50,000
Unrealized gain on
  investment................        --       --          --           --          77                 --           77
Net loss for the period
  ended January 31, 2001....        --       --          --           --          --            (27,429)     (27,429)
                              --------    -----     -------     --------         ---          ---------    ---------
Balances-January 31, 2001...  $ 11,999    $ 120     $    --     $ 49,880         $77          $ (27,429)   $  22,648
                              ========    =====     =======     ========         ===          =========    =========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      F-6
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                               SUCCESSOR COMPANY              PREDECESSOR COMPANY
                                               -----------------   ------------------------------------------
                                                                                           YEAR ENDED
                                                19 WEEKS ENDED     33 WEEKS ENDED   -------------------------
                                                  JANUARY 31,      SEPTEMBER 20,    JANUARY 31,   JANUARY 31,
                                                     2001               2000           2000          1999
                                               -----------------   --------------   -----------   -----------
<S>                                            <C>                 <C>              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................      $(27,429)         $  72,076       $(171,207)    $(130,760)
Noncash items included in net income (loss):
  Depreciation and amortization..............         1,680              1,893          11,699        14,786
  Extraordinary (gain) loss..................            --           (100,000)         49,632        96,784
  Loss (gain) on sale of assets..............            --                 --              11        (5,414)
  Nonrecurring charges.......................            --              5,074           1,723        10,465
  Write-down of notes receivable.............           547                 --          13,840         2,674
  Goodwill impairment write-down.............        26,908                 --          36,046         9,093
  Amortization of debt issuance costs........            --                 --           1,415         1,708
  Other......................................           854                 --            (173)          656
Changes in receivables.......................         2,921              6,218           7,986        (1,699)
Changes in accounts payable and accrued
  liabilities................................        (8,738)            (7,254)          5,516        (1,020)
Changes in amounts due from physicians.......            --                 --              --         3,216
Changes in other assets......................           388                990          15,305        (5,393)
                                                   --------          ---------       ---------     ---------
Net cash used by operating activities before
  reorganization items.......................        (2,869)           (21,003)        (28,207)       (4,904)
                                                   --------          ---------       ---------     ---------
Cancellation of accrued interest on
  debentures.................................            --             (4,218)             --            --
Bankruptcy-related professional fees.........            --              1,350              --            --
Write-off of unamortized balance of debenture
  finance costs..............................            --              1,838              --            --
                                                   --------          ---------       ---------     ---------
Net cash used by reorganization items........            --             (1,030)             --            --
                                                   --------          ---------       ---------     ---------
  Net cash used by operating activities......        (2,869)           (22,033)        (28,207)       (4,904)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.........................          (233)              (547)         (4,593)       (6,601)
Sale of assets...............................            --              4,672          48,669         7,888
Notes receivable, net........................           299              6,550            (198)       (2,550)
Other assets.................................          (318)                --              --          (110)
Acquisitions, net of cash acquired (Note
  15)........................................            --                 --          (1,404)      (11,164)
                                                   --------          ---------       ---------     ---------
  Net cash provided (used) by investing
    activities...............................          (252)            10,675          42,474       (12,537)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayments) under revolving lines
  of credit..................................         6,209            (11,802)         22,311            --
Repayments by (advances to) shareholders.....            --                                 44       (10,904)
Proceeds from issuance of common stock.......            --                 --             130
Dividends to shareholders....................            --                 --              --            --
Changes in restricted cash...................           (62)                --           2,077            --
Release of cash collateral...................            --                 --              --            --
Offering costs and other.....................            --                 77             (15)         (234)
Repurchase of treasury stock.................            --                             (1,472)         (769)
Borrowings (repayments) of debt--net.........            47                            (21,791)      (10,181)
                                                   --------          ---------       ---------     ---------
  Net cash provided (used) by financing
    activities...............................         6,194            (11,725)          1,154       (21,958)
                                                   --------          ---------       ---------     ---------
Increase (decrease) in cash and cash
  equivalents................................         3,073            (23,083)         15,421       (39,399)
Cash and cash equivalents, beginning of
  period.....................................         2,475             25,558          10,137        49,536
                                                   --------          ---------       ---------     ---------
Cash and cash equivalents, end of period.....      $  5,548          $   2,475       $  25,558     $  10,137
                                                   ========          =========       =========     =========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      F-7
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.
                   NOTES TO CONSLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND RECENT EVENTS

DESCRIPTION OF BUSINESS

    Innovative Clinical Solutions, Ltd. (together with its subsidiaries, the
"Company" or "ICSL") (formerly PhyMatrix Corp.) operates two business lines:
pharmaceutical services, including investigative site management, clinical and
outcomes research and disease management and single-specialty provider network
management. The Company began its operations in 1994 and closed the initial
public offering of its then existing common stock (the "Old Common Stock") in
January 1996. Its primary strategy was to develop management networks in
specific geographic locations by affiliating with physicians, medical providers
and medical networks. The Company affiliated with physicians by acquiring their
practices and entering into long-term physician practice management ("PPM")
agreements with the acquired practices and by managing independent physician
associations ("IPAs") and specialty care physician networks through management
service organizations ("MSOs") in which the Company had ownership interests. In
order to expand its service offerings and to take advantage of the higher
margins resulting from clinical studies, the Company acquired Clinical
Studies Ltd. ("CSL") in October 1997. By 1998, the Company had become an
integrated medical management company that provided medical management services
to the medical community, certain ancillary medical services to patients and
medical real estate development and consulting services to related and unrelated
third parties.

SIGNIFICANT EVENTS

    REPOSITIONING

    In early 1998, the medical services industry, and in particular the PPM
industry became the subject of concerted negative scrutiny from industry
analysts. Health maintenance organizations ("HMOs") and other insurers had
reduced the amount of their reimbursements and new types of contracts had put
the managed practices at increased risk of losing money when medical costs rose.
In addition, the high profile bankruptcies of several large managed practices
and reported losses in the hundreds of millions for PPM companies resulted in a
perception that the PPM industry could not remain viable. The negative publicity
surrounding the PPM industry at that time created significant investor
skepticism from which the industry has never recovered.

    Although the Company was a diversified health care provider (its PPM sector
represented only 12.1% of its fiscal 1998 revenues), the Company was
nevertheless viewed by the market as a PPM provider, resulting in a substantial
decline in the Company's stock price. In May 1998, the Company began evaluating
various strategic alternatives available to it and in August 1998, the Company's
Board of Directors approved several strategic initiatives designed to reposition
the Company as a significant company in pharmaceutical contract research,
specifically clinical trials site management and outcomes research.

    During the year ended January 31, 1999, the Board approved, consistent with
achieving its stated repositioning goal, a plan to divest and exit the Company's
physician practice management ("PPM") business and certain of its ancillary
services businesses, including diagnostic imaging, lithotripsy and radiation
therapy, home health and infusion therapy. In the second quarter of fiscal 2000,
the Company also decided to divest its investments in a surgery center and a
physician network, and sell its real estate service operations. All of these
identified assets held for sale had been sold as of April 30, 2000.

    Due to market conditions affecting health care services companies generally,
the Company realized lower than expected proceeds from its asset divestitures.
The Company reported a net loss for the year ended January 31, 1999 of
$130.8 million, which included an extraordinary charge of $96.8 million and a
$10.5 million nonrecurring expense related to its divestitures. The Company
reported a net loss for

                                      F-8
<Page>
the fiscal year ended January 31, 2000 of $171.2 million, which included an
extraordinary charge of $49.6 million which was primarily related to the
divestitures. These losses and the Company's highly leveraged position, due
principally to its $100 million 6 3/4% Convertible Subordinated Debentures due
2003 (the "Debentures"), left the Company without the financial resources to
execute its strategic plan to grow the research, clinical trials and network
management sectors of its business.

    RECAPITALIZATION

    In order to reduce its indebtedness, the Company entered into discussions
with the owners of more than 50% of the principal amount of the Debentures
regarding the possible exchange of some or all of the Debentures for equity in
order to reduce the Company's debt burden and improve the Company's ability to
execute its strategy for improving its business and financial condition. These
negotiations resulted in a prepackaged plan of reorganization under Chapter 11
of the Bankruptcy Code (the "Prepackaged Plan"), which provided for the
recapitalization of the Company through the exchange of newly issued common
stock of the Company (the "New Common Stock"), representing 90% of the issued
and outstanding capital stock following the recapitalization, for all of the
Debentures. In addition, the Prepackaged Plan provided for the cancellation of
all outstanding Old Common Stock and its replacement with New Common Stock
representing 10% of the Company's issued and outstanding capital stock following
the recapitalization.

    On May 17, 2000, the Company's Board of Directors approved, and on June 12,
2000, the Company distributed, a Pre-petition Solicitation and Disclosure
Statement with Respect to Joint Prepackaged Plan of Reorganization (the
"Disclosure Statement"), which solicited acceptances of the Prepackaged Plan
from the holders of the Debentures (the "Debentureholders"). The
Debentureholders constituted the only impaired class of creditors under the
Prepackaged Plan and, accordingly, the only class entitled to vote on the
Prepackaged Plan. The voting period for the solicitation ended on July 12, 2000.
The solicitation resulted in the acceptance of the Prepackaged Plan by the
Debentureholders with respect to both the number (more than one-half of the
number of Debentureholders that actually voted) and amount (Debentureholders
holding at least two-thirds of the principal amount of the Debentures actually
voted) as required for confirmation of the Prepackaged Plan under the Bankruptcy
Code. Accordingly, on July 14, 2000 the Company and its subsidiaries filed joint
petitions under Chapter 11 of the Bankruptcy Code. Following a hearing held on
August 23, 2000, the Bankruptcy Court entered an order confirming the Company's
Prepackaged Plan on August 25, 2000. On September 21, 2000 the Company satisfied
all conditions precedent to the effectiveness of the Prepackaged Plan and,
accordingly, the Prepackaged Plan became effective on such date (the "Effective
Date").

    On the Effective Date, the Debentures, the Company's issued and outstanding
Old Common Stock and the Old Other Interests (as defined in the Prepackaged
Plan) were canceled and extinguished. Under the Prepackaged Plan, each
Debentureholder received for each $1,000 in face amount of the Debentures held
by such holder on the Effective Date, 108 shares of New Common Stock and each
existing stockholder received for each 31 shares of Old Common Stock held by
such stockholder on the Effective Date, 1 share of New Common Stock. New Common
Stock was issued in whole shares only, with any fractional share amounts rounded
up or down, as applicable. As a result of the Prepackaged Plan, 10.8 million
shares of New Common Stock are held by the former Debentureholders and
approximately 1.2 million are held by former holders of Old Common Stock.

    Under the Prepackaged Plan, claims of all other creditors, whether secured
or unsecured, were unimpaired. The Company continued to pay all general
unsecured claims during the pendency of the bankruptcy proceedings in the
ordinary course of business. On the Effective Date, the Company's existing
credit facility was repaid in full and the Company entered into a new revolving
credit facility which is secured by security interests in substantially all of
the Company's assets, including inventory, accounts receivable, general
intangibles, equipment and fixtures. (See Note 8).

                                      F-9
<Page>
    On the Effective Date, the Company's 2000 Stock Option Plan became effective
and the Company granted options to purchase 2,028,570 shares of its New Common
Stock to its executive officers and certain of its non-employee directors. In
addition, the Company entered into employment agreements with the Company's
President and Chief Executive Officer and four other executive officers.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

    The Company and subsidiaries filed petitions for relief under Chapter 11 of
the United States Bankruptcy Code ("Chapter11") on July 14, 2000 (the "Filing").
Prior to emerging from Chapter 11 on September 20, 2000 (the "Effective Date"),
the Company (the "Predecessor") operated its business as a debtor-in-possession
subject to the jurisdiction of the United States Bankruptcy Court (the
"Bankruptcy Court"). The reorganized Company (the "Successor") adopted
fresh-start reporting (Note 3) and gave effect to its emergence as of
September 20, 2000.

    Under fresh-start reporting, the final consolidated balance sheet as of
September 20, 2000 became the opening consolidated balance sheet of the
reorganized Company. Since fresh-start reporting has been reflected in the
accompanying consolidated balance sheet as of January 31, 2001, the consolidated
balance as of that date is not comparable in certain material respects to any
such balance sheet for any period prior to September 20, 2000 since the balance
sheet as of January 31, 2001 is that of a reorganized entity. Accordingly, a
black line has been drawn between the Registrant's balance sheet and the
Predecessor's balance sheet. In addition, the results of the operations of the
business prior to September 20, 2000 (the Predecessor) are not comparable to the
Company's results of operations due to the emergence from bankruptcy.

PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the accounts of the Company
and its 50% or greater owned subsidiaries. Significant intercompany accounts and
transactions have been eliminated in consolidation.

ESTIMATES USED IN PREPARATION OF FINANCIAL STATEMENTS

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Estimates
are used when accounting for the estimated proceeds to be realized from the
assets held for sale, collectibility of receivables and third party settlements,
depreciation and amortization, taxes and contingencies.

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of highly liquid instruments with
maturities at the time of purchase of three months or less.

REVENUE RECOGNITION

    Net revenues from management service agreements include fees paid to the
Company by the management service agreements for providing management services.
These fees generally are either a fixed amount per enrollee or a specified
percentage of capitated revenues. In addition, the Company may be entitled to
participate in risk pools.

                                      F-10
<Page>
    Net revenues from clinical studies (which are included in net revenue from
services) equal the fees to be received, primarily from pharmaceutical
companies, as services are provided to patients enrolled in studies. Revenue is
recognized as services are provided. Unbilled accounts receivable represents
revenue recognized in excess of amounts billed. Unearned revenue is recorded for
cash received from customers for which revenue has not been recognized as of the
balance sheet date

    Net revenues from services are reported at the estimated realizable amounts
from patients, third-party payors and others for services rendered. Revenue
under certain third-party payor agreements is subject to audit and retroactive
adjustments. Provisions for estimated third-party payor settlements and
adjustments are estimated in the period the related services are rendered and
adjusted in future periods as final settlements are determined. The provision
and related allowance are adjusted periodically, based upon an evaluation of
historical collection experience with specific payors for particular services,
anticipated reimbursement levels with specific payors for new services, industry
reimbursement trends and other relevant factors.

    In accordance with EITF 97-2, which the Predecessor implemented during the
fourth quarter of fiscal 1999, net revenues from management service agreements
generally includes the net revenue generated by the physician practices net of
payments to physicians. Under the agreements, the Predecessor, in most cases, is
responsible and at risk for the operating costs which include the reimbursement
of all medical practice operating costs. For the years ended January 31, 2001,
2000, and 1999, the payments to physicians, which have been netted against
revenues, were $2.8 million, $42.5 million and $67.7 million, respectively.

    Net revenues from real estate services are recognized at the time services
are performed. In some cases fees are earned upon the achievement of certain
milestones in the development process, including the receipt of a building
permit and a certificate of occupancy of the building. Unearned revenue relates
to all fees received in advance of services being completed on development
projects.

THIRD PARTY REIMBURSEMENT

    For the years ended January 31, 2001, 2000, and 1999, approximately 6%, 17%
and 16%, respectively, of the Predecessor's net revenue was primarily from the
participation of the Predecessor's home healthcare entities and physician
practices in Medicare programs. Medicare compensated the Predecessor on a "cost
reimbursement" basis for home healthcare, meaning Medicare covers all reasonable
costs incurred in providing home healthcare. Medicare compensates the
Predecessor for physician services based on predetermined fee schedules. In
addition to extensive existing governmental healthcare regulation, there are
numerous initiatives at the federal and state levels for comprehensive reforms
affecting the payment for and availability of healthcare services. Legislative
changes to federal or state reimbursement systems could adversely and
retroactively affect recorded revenues. As of January 31, 2000, the Predecessor
had divested or disposed of its home healthcare businesses and substantially all
of its physician practices.

ASSETS HELD FOR SALE

    In connection with it's repositioning and as part of its strategic plan,
during 1998, 1999 and the first quarter of 2000, the Predecessor terminated
substantially all of its individual and group physician practice management
arrangements and divested itself of related assets for an aggregate sale price
of $19.7 million. This aggregate sale price reflects its retention of certain
accounts receivable and payment by it of $6.8 million in connection with the
termination of certain of its employed physicians. In addition, the Predecessor
sold and divested itself of its ancillary medical service businesses such as
diagnostic imaging, radiation therapy, lithotripsy services and infusion therapy
and its real estate services for an aggregate sale price of $64 million. This
aggregate sale price includes $10 million of retained accounts receivable from
the imaging division. Because of the negative perception of these

                                      F-11
<Page>
industry segments these assets were divested at prices substantially below the
Predecessor's investments. As a result, the Predecessor reported a net loss for
the fiscal year ended January 31, 1999 of $130.8 million, which included an
extraordinary non-cash charge of $96.8 million and a $10.5 million nonrecurring
expense related to these divestitures. The Predecessor reported a net loss for
the fiscal year ended January 31, 2000 of $171.2 million, which included an
extraordinary non-cash charge of $49.6 million which was primarily related to
the divestitures and a goodwill impairment write-down of $36.1 million due to
closure of certain unprofitable operations, both in clinical studies and network
management, and the impairment of the assets of several sites.

    Revenues for the assets held for sale segment, (including real estate
operations for 1999 and 1998), were 5.9%, 49.6%, and 53.4% of the Predecessor's
total revenues for the years ended January 31, 2001, 2000, and 1999,
respectively.

PROPERTY AND EQUIPMENT

    Additions are recorded at cost, or in the case of capital lease property, at
the net present value of the minimum lease payments required, and depreciation
is recorded principally by use of the straight-line method of depreciation
improvements and equipment over their useful lives. Upon disposition, the cost
and related accumulated depreciation are removed from the accounts and any gain
or loss is included in income. Maintenance and repairs are charged to expense as
incurred. Major renewals or improvements are capitalized. Assets recorded under
capital leases are amortized over the shorter of their estimated useful lives or
the lease terms.

INCOME TAXES

    The Company follows the provisions of Statement of Financial Accounting
Standards (SFAS) No. 109, "ACCOUNTING FOR INCOME TAXES." Deferred taxes arise
primarily from the recognition of revenues and expenses in different periods for
income tax and financial reporting purposes.

    Tax assets and liabilities, including loss and credit carry forwards were
valued at fair market value at the reorganization date. The Company has
concluded that its net tax assets, primarily operating loss carryforwards should
be fully reserved because of the uncertainty surrounding whether these will ever
be realized. The Company has recorded no tax benefit related to its net loss
because of uncertainty as to the ultimate realizability of this benefit.

GOING CONCERN

    The Company has generated significant negative cash flow and operating
losses over the past several years. In addition, the Company is in violation of
certain covenants of its credit facility. The Company's independent public
accountants have included a going concern opinion explanatory paragraph in their
audit report accompanying the fiscal 2001 financial statements. The paragraph
states that the Company's recurring losses and negative cash flow raise
substantial doubt as to the Company's ability to continue as a going concern and
cautions that the financial statements do not include adjustments that might
result from the outcome of this uncertainty.

    The Company's operating losses have declined significantly from fiscal 2000.
In addition to the operating improvements, the Company has decided to sell
nonstrategic assets including land, its oncology business operations, and its
network management division. The Company has continued to improve profitability
in its CSL business unit through the closing of unprofitable sites, enhanced
training and improvements in patient recruitment efforts. However, the Company
believes that a strategic merger or sale of its CSL subsidiary is necessary to
improve short-term and long-term profitability. The Company is actively pursuing
these alternatives. However, there can be no assurance that management plans
will be successful. (See Note 20)

                                      F-12
<Page>
GOODWILL AND OTHER LONG-LIVED ASSETS

    Goodwill was related to the excess of cost over the value of net assets of
the businesses acquired. Amortization was calculated on a straight-line basis
over periods ranging from ten to 36 years. Statement of Financial Accounting
Standards (SFAS) No. 121, "ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS
AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF" requires that goodwill be written
down if anticipated future undiscounted cash flows from operation are
insufficient to justify the recoverability of the goodwill asset. The amount of
impairment is calculated by comparing anticipated discounted future cash flows
with the carrying value of the related asset. In performing this analysis,
management considers such factors as current results, trends and future
prospects, in addition to other economic factors. As discussed below, the
Company recorded an impairment charge of its reorganization value in excess of
amounts allowable to identifiable assets of $26.9 million in the nineteen weeks
period ended January 31, 2001.

    In connection with the Board of Directors' plan to reposition the Company,
the Predecessor downsized its real estate services segment in 1999 and
subsequently sold the remaining real estate assets in 2000. During the fourth
quarter ended January 31, 1999, the Predecessor recorded a goodwill impairment
write-down of approximately $9.1 million, which eliminated the remaining
goodwill of the real estate services segment. The asset of goodwill was
determined to have been impaired because of the Predecessor's decision to
significantly downsize the real estate segment and the inability to generate
future operating income without substantial revenue growth, which was determined
to be uncertain. Moreover, anticipated future cash flows of the real estate
segment indicated that the recoverability of the asset was not likely. The
Predecessor sold the real estate operation in August 1999.

REORGANIZATION VALUE IN EXCESS OF AMOUNTS ALLOCABLE TO IDENTIFIABLE ASSETS

    Fresh start reporting requires the Company to restate its assets and
liabilities to reflect their reorganization value, which reflects fair value at
the date of the reorganization. The amount of the reorganization value that
exceeded the amounts allocable to the specific tangible and identifiable
intangible assets is allocated to a specific intangible referred to as
Reorganization Value in Excess of Amounts Allocable to Identifiable Assets. The
implementation of fresh start reporting resulted in a Reorganization Value in
Excess of Amounts Allocable to Identifiable Assets of approximately
$55 million. This asset is being amortized over five years.

    This reorganization value, which drives the Reorganization Value in Excess
of Amounts Allocable to Identifiable Assets, was based, in part, upon the
planned integration of the Company's network management and clinical trials/site
management and healthcare research operations. The Company has not realized the
synergies that it had expected from linking these two business lines and plans
to sell its network management division. Preliminary indications of interest
from potential purchasers indicate a lower valuation for the network management
division as a standalone enterprise than when valued as an integrated component
of the clinical trials and healthcare research operations, using the methodology
described in Note 3. The decision to sell the network management division,
coupled with a revised plan for the remainder of the business triggered an
impairment review of the Company's long lived assets. The revised plan provided
the basis for measurement of the asset impairment charge. The Company calculated
the present value of expected cash flows to determine the fair value of its
assets. Accordingly, in the fourth quarter of 2001, the Company recorded an
impairment write down of $26.9 million.

    The Company expects to continue to assess the realizability of its
intangible assets as it evaluates it business strategies and further write-downs
may be necessary.

                                      F-13
<Page>
NET INCOME (LOSS) PER COMMON SHARE

    Effective December 15, 1997, the Predecessor adopted SFAS No. 128, "EARNINGS
PER SHARE". Under SFAS No. 128, the basic earnings per share is calculated by
dividing net income (loss) by the weighted average number of shares of Common
Stock outstanding during the period. Stock to be issued at a future date
pursuant to acquisition agreements is treated as outstanding in determining
basic earnings per share. In addition, diluted earnings per share is calculated
using the weighted average number of shares of Common Stock and common stock
equivalents, if dilutive.

    Net loss per share for periods prior to September 20, 2000 is for the
Predecessor and is not comparable to net loss per share for the Company, which
reflects the exchange of New Common Stock for the Debentures and Old Common
Stock. Net loss per share for the 19 weeks ending January 31, 2001 was $(2.29).
Basic and fully diluted earnings per share are the same because the effect of
Common Stock equivalents would be anti-dilutive. Unexercised employee stock
options to purchase 2,581 shares of the Company's Common Stock were not included
in the computation of diluted shares outstanding because such inclusion would be
anti-dilutive. The Predecessor Company earnings per share for the 33-week period
ended September 20, 2000 is not meaningful and therefore has not been presented.

STOCK OPTION PLANS

    On February 1, 1996, the Predecessor adopted SFAS No. 123, "ACCOUNTING FOR
STOCK-BASED COMPENSATION", which permits entities to recognize as expense over
the vesting period, the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made during the
years ended January 31, 2001, 2000, and 1999, and future years as if the
fair-value-based method defined in SFAS No. 123 had been applied. The
Predecessor and Company have elected to continue to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.

COMPREHENSIVE INCOME

    The Company's has an investment in a marketable equity security which is
considered an available-for-sale investment in the accompanying balance sheet
and is carried at market value, with the difference between cost and market
value recorded in the "Accumulated other comprehensive items" component of
stockholders' investment.

CONCENTRATION OF CREDIT RISK

    Approximately 31% of the Company's revenue and (1%) of the Company's
operating loss are derived from one customer. In addition, approximately 4% of
accounts receivable is due from this customer. The Company does not normally
require collateral or other security to support its accounts receivable related
to this customer. Management does not believe that this concentration of risk
has or will have significant negative impact on the Company.

ACCOUNTING PRONOUNCEMENTS AND DEVELOPMENTS

    In December 1999, the Staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101, "REVENUE RECOGNITION IN FINANCIAL STATEMENTS"
("SAB 101"). SAB 101 summarizes certain of the Staff's views in applying
accounting principles generally accepted in the United States to revenue
recognition in financial statements. The adoption of SAB 101 did not have a
material impact on the financial statements.

                                      F-14
<Page>
    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK
COMPENSATION-AN INTERPRETATION OF APB OPINION NO. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 and among other issues clarifies
the following: the definition of an employee for purposes of applying APB
Opinion No. 25; the criteria for determining whether a plan qualifies as a
non-compensatory plan; the accounting consequences of various modifications to
the terms of previously fixed stock options or awards; and the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 cover specific events
that occurred after either December 15, 1998 or January 12, 2000. The
application of FIN 44 did not have a material impact on the Company's financial
position or results of operations.

    In June 1998, the Financial Accounting Standards Board issued SFAS No.133,
"ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES" ("SFAS 133").
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that entities recognize all
hedging instruments as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. If certain
conditions are met, a derivative may be specifically designated as (a) a hedge
of the exposure to changes in the fair value of a recognized asset or liability
or an unrecognized firm commitment, or (b) a hedge of the exposure to variable
cash flows of a forecasted transaction. The Company adopted SFAS 133, as amended
by SFAS 137 when it emerged from bankruptcy. The adoption of SFAS 133 did not
impact the Company, as the Company has not entered into any derivative
instrument contracts.

3. PREPACKAGED PLAN AND FRESH-START REPORTING

    As discussed above in Note 1, the Company's Prepackaged Plan was consummated
on September 21, 2000 and ICSL emerged from Chapter 11. Pursuant to the AICPA's
Statement of Position No. 90-7, FINANCIAL REPORTING BY ENTITIES IN
REORGANIZATION UNDER THE BANKRUPTCY CODE ("SOP 90-7"), the Company adopted
fresh-start reporting in the accompanying consolidated balance sheet as of
September 21, 2000 to give effect to the reorganization as of such date.
Fresh-start reporting required the Company to restate its assets and liabilities
to reflect their reorganization value, which approximates fair value at the date
of the reorganization. In so restating, SOP 90-7 required the Company to
allocate its reorganization value to its assets based upon their estimated fair
values in accordance with the procedures specified by Accounting Principles
Board (APB) Opinion No. 16, BUSINESS COMBINATIONS, for transactions reported on
the purchase method. The amount of the reorganization value that exceeded the
amounts allocable to the specific tangible and the identifiable intangible
assets has been allocated to a specific intangible referred to as
"Reorganization value in excess of amounts allocable to identifiable assets"
("EXCESS REORGANIZATION VALUE"), which is being amortized in accordance with APB
Opinion No.17, INTANGIBLE ASSETS, over a five year life. Each liability existing
on the date the Prepackaged Plan was confirmed by the Bankruptcy Court, other
than deferred taxes, is stated at the present value of the amounts to be paid,
determined using an appropriate discount rate. Deferred taxes are not recorded
in the accompanying financial statements due to the uncertainty regarding future
operating results. Any benefits derived from pre-confirmation net operating
losses will first reduce the Excess Reorganization Value (Goodwill) and other
intangibles until exhausted and thereafter be reported as a direct addition to
additional paid-in capital. Finally, any accounting principle changes required
to be adopted in the financial statements of the Company within the twelve
months following the adoption of fresh-start reporting were adopted at the time
fresh-start reporting was adopted.

    The significant consummation and fresh start reporting adjustments
(excluding the write-off of the Old Common Stock and forgiveness of
indebtedness) resulted in a charge of $666,000. This charge is

                                      F-15
<Page>
presented as "Reorganization items" pursuant to adoption of fresh-start
reporting in the consolidated statement of operations for the thirty-three week
period ended September 21, 2000.

    The Company provided for or incurred the following expenses and income items
during 2000 directly associated with the Chapter 11 reorganization proceedings
and the resulting restructuring of its operations:

<Table>
<S>                                                           <C>
Administrative and other claims.............................  $(1,100,000)
Change of control payments and emergence from bankruptcy
  bonuses...................................................   (1,697,000)
Write-off of unamortized balance of debentures finance
  costs.....................................................   (1,837,946)
Additional professional fees................................     (250,000)
Cancellation of accrued interest on Debentures..............    4,218,750
                                                              -----------
    Total reorganization items..............................  $  (666,196)
                                                              ===========
</Table>

    Administrative and other claims: Administrative and other claims represented
estimates of expenses incurred, primarily for legal, consulting and accounting
services provided to the Company and the creditors committee.

    Change of Control payment and emergence from bankruptcy bonuses: Under the
terms of the Prepackaged Plan, the Company paid Michael T. Heffernan $897,000
pursuant to his former employment contract with the Company and cash emergence
from bankruptcy bonuses aggregating $800,000 to four executive officers pursuant
to a retention plan approved by the Company's Board of Directors in
December 1999.

    The fresh-start reporting reorganization value was primarily derived from a
discounted cash flow analysis of the business based on the Company's projected
earnings before interest, taxes and depreciation and amortization ("EBITDA")
through our 2006 fiscal year and discounted to present value using the Company's
weighted average cost of capital rate of 19.5%. The discount rate utilized by
the Company reflected a relatively high-risk investment.

    The determination of equity value included in the distributable value as of
the Effective Date was derived from an estimated enterprise value of the
reorganized Company on an unleveraged basis. The enterprise value was developed
by an independent financial advisor for purposes of preparing the Company's
Disclosure Statement, which was distributed to Debentureholders and filed in the
Bankruptcy Court on July 14, 2000. In developing the determination of the
initial equity value, the financial advisor used various assumptions and
estimates, including revenue growth, improvements in operating margins, earnings
and cash flow, improvement in techniques for managing working capital, expenses
and other elements. As a result, the initial equity value was assumed to be in
the range of $65 to $95 million. For purposes of the Disclosure Statement, the
Company determined that an equity value of $80 million represented a reasonable
estimate of the reorganized Company for purposes of determining distributable
equity value to the creditors.

    Subsequent to the distribution of the Disclosure Statement and the Effective
Date, a number of events occurred which impacted the determination of equity
value under fresh-start reporting, including but not limited to, the initial
trading prices of the New Common Stock, lack of liquidity of Company stock,
information regarding the Company's third quarter performance, and the final
fiscal 2001 financial plan. The Company employed a similar valuation method to
that utilized by its independent financial advisor in the Disclosure Statement
under fresh-start reporting to determine its equity value and arrived at the
revised equity value of $50 million. The changes in assumptions used to
calculate the revised reorganization value were primarily a reduction in assumed
growth and an increase in the discount rate. Management believes these changes
are appropriate given changes at the Company and the economy since the original
reorganization value was calculated.

                                      F-16
<Page>
    The Company's reorganization value of $50 million was more than the market
value of its assets at September 20, 2000, which was approximately
$38.0 million. Management believes that the Debentureholders accepted the
Prepackaged Plan and the corresponding reorganization value, despite the
inherent future business risks, primarily because the Company's reorganization
value exceeded its liquidation value and the Debentureholders believed that it
was in the Company's best interest to emerge from bankruptcy at that time. In
accordance with the purchase method of accounting, the excess of the
reorganization value over revalued net assets was allocated to "Reorganization
Value in Excess of Amount Allocable to Identifiable Assets".

    The reorganization equity value of $50.0 million as of the Effective Date
was based, in part, upon the planned integration of the Company's network
management and clinical trials site management and healthcare research
operations. The Company has not realized the synergies that it had expected from
linking these two business lines and plans to sell its network management
division. Preliminary indications of interest from potential purchasers indicate
a lower valuation for the network management division as a standalone enterprise
than when valued as an integrated component of the clinical trials and
healthcare research operations, using the methodology described above.
Accordingly, the Company's reorganization equity value has been reduced and
reflects the lower valuation for the network management division as a standalone
enterprise. This reduction in reorganization value is reflected as a goodwill
impairment write-down of $26.9 million for the 19 weeks ended January 31, 2001.
See Note 2--"Goodwill and other long-lived assets" and "Reorganization Value in
Excess of Amount Allocable to Identifiable Assets".

    The calculated revised reorganization equity value was based upon a variety
of estimates and assumptions about circumstances and events that have not yet
taken place. Such estimates and assumptions are inherently subject to
significant economic and competitive uncertainties beyond the control of the
Company, including, but not limited to, those with respect to the future course
of the Company's business activity.

4. EXTRAORDINARY ITEMS AND NONRECURRING CHARGES

    During August 1998, the Predecessor initiated its plan to divest and exit
the PPM business and certain of its ancillary service businesses. Through the
nine months ended October 31, 1998, the Predecessor had recorded an
extraordinary charge (net of tax of $8.4 million) of $51.6 million related to
the planned divestitures. During the fourth quarter ended January 31, 1999, the
Predecessor recorded an additional extraordinary charge of $45.2 million. In
accordance with APB 16, the Predecessor is required to record these charges as
an extraordinary item since impairment losses are being recognized for
divestitures and disposals expected to be completed within two years subsequent
to a pooling of interests (the pooling of interests with CSL was effective
October 15, 1997). During the year ended January 31, 1999, the Board approved,
consistent with achieving its stated repositioning goal, a plan to divest and
exit the Company's PPM business and certain of its ancillary services
businesses, including diagnostic imaging, lithotripsy, radiation therapy, home
health and infusion therapy. During the second quarter of 2000, the Predecessor
also decided to divest its investments in a surgery center and a physician
network, and sell its real estate service operations. Net loss for the year
ended January 31, 2000 included an extraordinary item of $49.6 million (net of
tax of $0), which is primarily a non-cash charge related to these divestitures.

    During the year ended January 31, 1999, the Predecessor recorded a
nonrecurring pretax charge of $10.5 million. Of this amount, $8.7 million
related primarily to the termination of several physician management and
employment agreements prior to the Predecessor's decision in August 1998 to
reposition (see Note 1) and $1.8 million related to the write-off of the
remaining investment in an ambulatory surgery center.

                                      F-17
<Page>
    During the year ended January 31, 2000, the Predecessor recorded a
nonrecurring pretax charge of $1.7 million which represents additional severance
costs in conjunction with the sale of assets and the repositioning of the
Company.

5. NOTES RECEIVABLE

    As of January 31, 2000 and 1999, the Predecessor had non-recourse loans of
$2.7 million to the shareholders of Physicians Choice, LLC pursuant to the
agreement under which the Predecessor purchased the remaining ownership
interests in Physicians Choice Management, LLC. The notes have a variable rate
of interest, a final maturity in April 2004 and are collateralized by shares of
Old Common Stock of the Predecessor. These loans have been written down to the
net realizable value of the Common Stock of $0 and $1.0 million on January 31,
2000 and 1999. The Predecessor foreclosed on these notes and took back the stock
in December 1999. The Predecessor recorded a pretax charge of approximately
$1.0 million and $1.7 million for the years ended January 31, 2000 and 1999,
respectively.

    In connection with the sale of real estate during the years ended
January 31, 1999 and 1998, the Predecessor recorded notes receivable of
$5.2 million and $1.7 million, respectively. The outstanding balance of these
notes was $4.8 million and $6.9 million at January 31, 2000 and 1999,
respectively. The notes bear interest at 9.5% and 8.5%, respectively, and have
final maturities through August 2008. The purchaser defaulted on the
$5.2 million note and the Predecessor renegotiated a $4.8 million cash
settlement in April 2000. Accordingly, the note was written down to
$4.8 million as of January 31, 2000. In May 2000, the Predecessor received a
cash settlement of $4.5 million, which is net of settlement costs of
$0.3 million.

    In May 1998, the Predecessor made a loan in the original principal amount of
$1.0 million to Dr. Eric Moskow, a director and former employee of the
Predecessor. Originally, this loan had an interest rate of 5.56% per annum and
was due in May 2005. On January 27, 2000, the Predecessor entered into a
Consulting Agreement and Release with Dr. Moskow. Pursuant to this agreement,
Dr. Moskow has ceased his employment with the Predecessor, but remains as a
director. The agreement, among other provisions, provides for the termination of
Dr. Moskow's employment agreement, the cancellation of all outstanding stock
options and the cancellation of his indebtedness to the Predecessor in the
amount of $1 million. By terminating Dr. Moskow's employment agreement, the
Predecessor avoided a payment of $1 million that would have been due to
Dr. Moskow under his employment agreement upon the closing of the Predecessor's
recapitalization. Also, in August 1996, in connection with the acquisition of
his Predecessor, the Predecessor loaned Dr. Moskow approximately $448,000 on a
non-recourse basis, secured by the pledge of 58,151 shares of Predecessor Common
Stock. On December 29, 1999, the Predecessor foreclosed on the pledged shares
and wrote-off the balance of the note.

    As of January 31, 2000, the Predecessor had outstanding loans receivable
totaling $1.1 million to various related entities and individuals. The amount
includes a $0.9 million unsecured note due on demand bearing interest of 10%, to
a limited partnership in which Mr. Gosman (a former officer and director) is a
partner, which was paid off in April 2000. Additionally, for January 31, 2000,
the amount includes a $0.2 million non-interest bearing note to CareMatrix, a
corporation of which Mr. Gosman is an officer, which was paid off in June 2000.

    During fiscal 1999, the Predecessor advanced $10.9 million to Chancellor
Development Corp. which loan was guaranteed by Mr. Gosman. To secure his
obligation under the guarantee, Mr. Gosman pledged the stock of another company
principally owned by him ("Windrows") and (subject to prior pledges)
8.2 million shares of Predecessor Common Stock ("ICSL Pledged Shares"). This
loan was due in July 2000 but has not been paid by Chancellor Development Corp.
or by Mr. Gosman. Due to the significant decline in the collateral pledged by
Mr. Gosman and management's assessment that Mr. Gosman would not honor his
guarantee, in January 2000, the Predecessor completely wrote off the

                                      F-18
<Page>
note. Notwithstanding the write-down, the Predecessor filed suit against
Mr. Gosman and obtained a judgment (including interest) of approximately
$11.0 million. Mr. Gosman subsequently filed for protection under the United
States Bankruptcy Code. The Predecessor actively participates as a member of the
creditors' committee for Mr. Gosman's bankruptcy proceedings and will take all
actions within its power to recover amounts due from Mr. Gosman.

    During the years ended January 31, 1999, the Predecessor wrote down a note
receivable that was collateralized by shares of Old Common Stock of the
Predecessor to its estimated net realizable value. The shares of Old Common
Stock were tendered to the Predecessor in satisfaction of the notes and
accordingly the Predecessor recorded the shares as treasury stock. Based on the
estimated net realizable value of this note receivable, the Predecessor recorded
a pretax charge of approximately $1.0 million for the year ended January 31,
1999.

    In connection with the divestiture of businesses in the prior years, the
Company and Predecessor had notes receivable outstanding of approximately
$4.7 million and $6.3 million for the years ended January 31, 2001 and 2000,
respectively. These loans pay no interest and have maturities ranging from 2002
to 2005 and the Company has imputed interest and reduced the notes to their
current present value.

6. PROPERTY AND EQUIPMENT

    Property and equipment consists of the following (IN THOUSANDS):

<Table>
<Caption>
                                                             SUCCESSOR    PREDECESSOR
                                               ESTIMATED    -----------   -----------
                                              USEFUL LIFE   JANUARY 31,   JANUARY 31,
                                                (YEARS)        2001          2000
                                              -----------   -----------   -----------
<S>                                           <C>           <C>           <C>
Land........................................                   $   --        $3,090
Building....................................        15             --            --
Furniture and fixtures......................       5-7          1,284         3,538
Equipment...................................      5-10          2,191         4,276
Computer software...........................       3-5            435         1,535
Leasehold improvements......................      4-20            382           411
                                                               ------        ------
Property and equipment, gross...............                    4,292        12,850
Less accumulated depreciation...............                     (317)       (3,751)
                                                               ------        ------
Property and equipment, net.................                   $3,975        $9,099
                                                               ======        ======
</Table>

    Depreciation expense was $0.3 million, $1.1 million, $6.2 million and
$6.1 million, respectively, for the periods ended January 31, 2001 and
September 20, 2000 and for the years ended January 31, 2000 and 1999,
respectively.

    During the year ended January 31, 1999, the Company sold real estate and a
radiation therapy center for $7.8 million and $2.5 million, respectively. These
sales resulted in gains of $4.5 million and $0.9 million, respectively. In
connection with the sale of real estate, $2.6 million was paid in cash and the
Company recorded a note receivable for the balance of $5.2 million. As of
January 31, 2000 this note has been reduced to $4.8 million through
renegotiations and $0.5 million has been written off.

                                      F-19
<Page>
7. ACCRUED AND OTHER CURRENT LIABILITIES

    Accrued and other current liabilities consist of the following (IN
THOUSANDS):

<Table>
<Caption>
                                                         SUCCESSOR     PREDECESSOR
                                                        ------------   ------------
                                                        JANUARY 31,    JANUARY 31,
                                                            2001           2000
                                                        ------------   ------------
<S>                                                     <C>            <C>
Accrued rents and equipment leases....................    $ 1,462        $ 1,397
Accrued income taxes..................................        271             62
Accrued professional fees.............................        951          3,746
Accrued additional purchase price.....................        600          6,070
Accrued interest......................................         72          1,043
Unearned revenue......................................      1,636          3,276
Accrued litigation reserves...........................      3,299          3,813
Accrued capitation costs..............................      7,072             --
Other.................................................      2,727          4,168
                                                          -------        -------
Total accrued and other current liabilities...........    $18,090        $23,575
                                                          =======        =======
</Table>

8. LONG-TERM DEBT, NOTES PAYABLE AND CAPITAL LEASES

    Long-term debt, notes payable and capital leases consist of the following
(IN THOUSANDS):

<Table>
<Caption>
                                                               SUCCESSOR     PREDECESSOR
                                                              ------------   ------------
                                                              JANUARY 31,    JANUARY 31,
                                                                  2001           2000
                                                              ------------   ------------
<S>                                                           <C>            <C>
Convertible subordinated debentures, with an interest rate
  of 6.75%, a maturity date of June 15, 2003, and a
  conversion price of $28.20 per share......................         --       $ 100,000
Note payable to former shareholders of a clinical research
  company, which is non-interest bearing and has maturity
  dates through January 2004................................    $ 1,853           2,207
Convertible acquisition notes payable with various maturity
  dates through October 3, 2001 and an interest rate of
  7%........................................................      2,100           2,925
Acquisition earn-outs payable with various maturity dates
  through 2001..............................................         49              47
Capital lease obligations with maturity dates through
  September 2015 and interest rates ranging from 8.5% and
  12%.......................................................        365             310
                                                                -------       ---------
  Total.....................................................      4,367         105,489
Less current portion of capital leases......................       (112)            (63)
Less current portion of debt................................     (3,348)       (101,192)
                                                                -------       ---------
Long-term debt and capital leases...........................    $   907       $   4,234
                                                                =======       =========
</Table>

REVOLVING LINES OF CREDIT (IN THOUSANDS):

<Table>
<Caption>
                                                               SUCCESSOR     PREDECESSOR
                                                              ------------   ------------
                                                              JANUARY 31,    JANUARY 31,
                                                                  2001           2000
                                                              ------------   ------------
<S>                                                           <C>            <C>
Revolving line of credit with a financial institution with a
  maturity date of March 2002 and an interest rate of 9.5%
  at January 31, 2000.......................................         --        $10,463
Revolving line of credit with a financial institution with a
  maturity date of September 2002 and an interest rate of
  11.5% at January 31, 2001.................................     $6,209             --
                                                                 ------        -------
Revolving lines of credit...................................     $6,209        $10,463
                                                                 ======        =======
</Table>

                                      F-20
<Page>
    The convertible acquisition notes payable were convertible into Common Stock
of the Predecessor. All other convertible notes are now convertible into common
stock of the Company. At the option of the note holders, $2.9 million of the
amount outstanding at January 31, 2000 was convertible at a conversion price of
$16.425 per share. Of this amount, $1.0 million and $0.5 million was repaid in
cash during the years ended January 31, 2000 and 1999, respectively.

    During March 1999, the Predecessor obtained a $30.0 million revolving line
of credit with a three-year term and availability based upon eligible accounts
receivable. The line of credit bears interest at prime plus 1.0% and fees of
0.0875%. The line of credit was collateralized by the assets of the Predecessor,
limited the ability of the Predecessor to incur certain indebtedness and make
certain dividend payments and required the Predecessor to comply with customary
covenants. Proceeds from asset sales were to be used to repay the line of credit
to the extent the sold assets included eligible accounts receivable. Upon the
Predecessor's filing of a voluntary petition under Chapter 11 of the Bankruptcy
Code on July 14, 2000, the interest rate on the line increased to 12%. This line
was paid in full on the Effective Date with available cash.

    On the Effective Date, the Company entered into a $10.0 million revolving
credit facility (the "New Credit Facility") with Ableco Finance LLC ("Ableco").
The $10.0 million New Credit Facility has a two-year term and availability based
upon eligible accounts receivable. The New Credit Facility bears interest at
prime plus 2.00% (but never less than 11.5%) and provides for an unused line fee
of .50%. The New Credit Facility is secured by all assets of the Company and its
subsidiaries, limits the ability of the Company and its subsidiaries to incur
certain indebtedness and make certain dividend payments and requires the Company
to comply with other customary covenants. The qualification with respect to the
Company's ability to continue as a going concern contained in the Report of
Arthur Andersen LLP constitutes an event of default under this New Credit
Facility. In addition, the Company is in default of certain non-financial and
reporting covenants contained in the New Credit Facility. The Company has
requested, and Ableco has agreed to provide, a waiver of these defaults. The
Company and Ableco are currently in the process of documenting the waiver. If
the Company is unable to obtain a waiver of such defaults, it may be subject to
acceleration of all outstanding indebtedness and default interest on such
outstanding amount of prime plus 5.0%.

    The following is a schedule of future minimum principal payments of the
Company's long-term and convertible debt and the present value of the minimum
lease commitments at January 31, 2001:

<Table>
<Caption>
                                                          DEBT     CAPITAL LEASES
                                                        --------   --------------
                                                             (IN THOUSANDS)
<S>                                                     <C>        <C>
2002..................................................  $ 3,348        $ 142
2003..................................................       --          138
2004..................................................      653           91
2005..................................................       --           51
2006..................................................       --            8
Thereafter............................................       --           --
                                                        -------        -----
Total.................................................    4,001          430
Less amounts representing interest and executory
  costs...............................................                   (64)
Total long-term debt and present value of minimum
  lease payments......................................    4,001          366
                                                        -------        -----
Less current portion..................................   (3,348)        (112)
Long-term portion.....................................  $   653        $ 254
                                                        =======        =====
</Table>

                                      F-21
<Page>
9. LEASE COMMITMENTS

    The Company leases various office space and certain equipment pursuant to
operating lease agreements.

    Future minimum lease commitments (including entities held for sale)
consisted of the following at January 31 (in thousands):

<Table>
<S>                                                           <C>
2002........................................................   4,364
2003........................................................   3,739
2004........................................................   3,106
2005........................................................   2,081
2006........................................................   1,403
Thereafter..................................................   1,134
</Table>

10. COMMITMENTS AND CONTINGENCIES

    In conjunction with certain of its acquisitions, the Company has agreed to
make payments in shares of Common Stock of the Company which are generally
issued one year from the closing date of such acquisitions with number of shares
generally determined based upon the average price of the stock during the five
business days prior to the date of issuance. As of January 31, 2001, the Company
had committed to issue $1.1 million of New Common Stock of the Company using the
methodology discussed above. In April 2000 the Predecessor issued approximately
5.2 million shares of Old Common Stock in satisfaction of this commitment.

    In connection with a joint venture partnership (the "Joint Venture") between
the Predecessor and Tenet Healthsystem Hospitals, Inc. ("Tenet") to own and
operate an ambulatory surgical center and diagnostic radiology facility in
Florida, Tenet filed suit against the Company on September 23, 1999 in the Palm
Beach County Circuit Court (Florida) for (1) rescission of the Joint Venture
agreement and (2) damages of approximately $2.0 million for breach of contract,
breach of fiduciary duty, and breach of good faith and fair dealing (the "Tenet
Suit"). The Tenet Suit chiefly alleges that the Company engaged in self-dealing
to the detriment of Tenet and failed to meet its obligations under the Joint
Venture agreement, such obligations relating principally to certain financial
commitments concerning the Joint Venture. This litigation has recently been
stayed to allow the parties to negotiate an unwinding of the Joint Venture and
review the potential for a negotiated settlement. If the parties are unable to
reach agreement, the Company intends to file counterclaims against Tenet and
defend the case

    On January 11, 2001, the Bond Opportunity Fund II, LLC ("BOF") and Steven
Gidumal ("Gidumal") filed an amended complaint (the "BOF Complaint") in the
United States District Court for the District of Rhode Island. (C.A.
No. 00-609T). The BOF Complaint, filed against certain of our current and former
executive officers and directors alleges violations of provisions of the
Securities Exchange Act of 1934, breach of fiduciary duty and certain state
common law and statutory provisions. The Company is not a party to the BOF
Complaint, but it may be obligated to indemnify the officers, former officers,
directors and former directors of the Company pursuant to the terms of the
Company's charter, by-laws and certain of its agreements with its executives and
former executives. The Company believes that, except for its $250,000
deductible, any indemnification obligations will be covered by its directors and
officers insurance coverage.

    On February 20, 2001, Peter J. Almeroth, the Bond Opportunity Fund II, LLC
and Steven L. Gidumal (collectively, the "Plaintiffs") filed an adversary
proceeding (C.A. No. A-01-115) against the Company, PBG Medical Mall MOB 1
Properties, Ltd., EQSF Advisors, Inc., 3801 PGA Investors, Ltd., Third Avenue
Trust, Third Avenue Value Fund Series, Aggressive Conservative Investment Fund,
L.P. and The Chase Manhattan Bank N.A. (the "Adversary Proceeding") in the
United States Bankruptcy

                                      F-22
<Page>
Court for the District of Delaware seeking to revoke the order of confirmation
(the "Confirmation Order") of the Prepackaged Plan. The Plaintiffs allege that
the Confirmation Order was procured by means of fraud based on alleged
concealment of significant actual or potential conflicts of interest and
misrepresentations. The Company has filed a motion to dismiss this action and
awaits a ruling on the matter. The Company believes that the allegations
contained in the Adversary Proceeding are without merit and intends to continue
to defend the case vigorously.

    On October 18, 1997, the Florida Board of Medicine, which governs physicians
in Florida, declared that the payment of percentage-based fees by a physician to
a physician practice management company in connection with practice-enhancement
activities subjects a physician to disciplinary action for a violation of a
statute which prohibits fee-splitting. Some of the Predecessor's contracts with
Florida physicians include provisions providing for such payments. The
Predecessor appealed the ruling to a Florida District Court of Appeals and the
Board stayed the enforceability of its ruling pending the appeal. Oral arguments
were held on May 26, 1999, and the judge upheld the Board of Medicine's ruling.
The Company may be forced to renegotiate those provisions of the contracts that
are affected by the ruling. While these contracts call for re-negotiation in the
event that a provision is not found to comply with state law, there can be no
assurance that the Company would be able to renegotiate such provisions on
acceptable terms. The contracts affected by this ruling are with the physician
practices the Company has sold or has identified to be divested or disposed and
for which the assets are included in assets held for sale at January 31, 2000.

    In conjunction with various acquisitions that were completed during the
years ended January 31, 1999, 1998 and 1997, the Company may be required to make
various contingent payments in the event that the acquired companies attain
predetermined financial targets during established periods of time following the
acquisitions. If all of the applicable financial targets were satisfied, for the
periods covered, the Company would be required to pay an aggregate of
approximately $4.4 million and $24.9 million for the years ended January 31,
2000 and 1999, respectively. Approximately $2.3 million was paid relative to the
January 31, 1999 fiscal year. The payments, if required, shall be payable in
cash and/or Common Stock of the Company.

    In conjunction with certain of its acquisitions, the Company has agreed to
make payments in shares of Common Stock of the Company which are generally
issued one year from the closing date of such acquisitions with number of shares
generally determined based upon the average price of the stock during the five
business days prior to the date of issuance. As of January 31, 2001, the Company
had committed to issue $1.1 million of Common Stock of the Company using the
methodology discussed above. In April 2000 the Company issued approximately
5.2 million shares of Common Stock in satisfaction of this commitment.

    In conjunction with a physician practice management agreement with a
physician practice in Florida, the Company has filed suit against the practice
to enforce the guarantees executed in connection with the management agreement.
The practice has filed a counterclaim alleging fraudulent inducement and
illegality of the management agreement. The Company intends to vigorously
prosecute the case and defend the counterclaim. However, if the Company is not
successful it could be exposed to a maximum loss of $3.7 million. A reserve has
been established to reflect the probable loss.

    In February 2001, Medical Office Portfolio Properties Limited Partnership
("MOPP") filed a complaint against the Company and PhyMatrix Management
Company, Inc. ("PMCI") in the Palm Beach County Florida Circuit Court (Case No.
CL01 1898AF) seeking damages of approximately $2.3 million for breach of lease
for the premises located in Jupiter, Florida. The Company currently is
evaluating its defenses to this complaint and exploring possible settlement
options.

    In February 2001, MOPP filed a complaint against the Company and PMCI in
Palm Beach County Florida Circuit Court (Case No. CL01 1901AB) seeking damages
of approximately $1.3 million for

                                      F-23
<Page>
breach of lease for the premises located in Palm Bay, Florida. The Company
currently is evaluating its defenses to this complaint and exploring possible
settlement options.

    In March 2001, Biltmore Investors Limited Partnership filed a complaint
against CSL in Arizona Superior Court (Maricopa County) (No. CV2001-003880)
seeking damages of approximately $1.3 million for breach of lease for the
premises located in Phoenix, Arizona. The Company currently is evaluating its
defenses to this complaint and exploring possible settlement options.

    In July 2001, Marvin Stein, M.D. filed a complaint against the Company,
PhyMatrix Corp., PhyMatrix Urology Network, inc. and Physicians Consultant and
Management Corporation in the Circuit Court, Palm Beach County, Florida (Case
No. CA 01-06945AH). The suit alleges breach of a November 1997 stock purchase
agreement pursuant to which the Company purchased Urology Consultants of South
Florida, Inc. The complaint also alleges breach of other related agreements. The
complaint seeks and unspecified amount of damages. The Company currently is in
settlement negotiations with Dr. Stein. Should these negotiations fail to result
in an acceptable settlement, the Company intends to defend the case vigorously
and to assert counterclaims against Dr. Stein.

    The Company is subject to other legal proceedings in the ordinary course of
its business. While the Company cannot estimate the ultimate settlements or
awards with respect to these legal proceedings, if any, the outcome could have a
material adverse effect on the Company, its liquidity, financial position or
results of operations.

11. RELATED PARTY TRANSACTIONS

    The Company has retained Kalkines, Arky, Zall, Bernstein LLP ("KAZB") to
represent it in connection with the proposed sale the Company's network
management division. William S. Bernstein is a member of the Company's Board of
Directors and of counsel to KAZB.

    In May 1998 the Predecessor made a loan in the original principal amount of
$1.0 million to Dr. Eric Moskow, a director and former employee of the
Predecessor. Originally, this loan had an interest rate of 5.56% per annum and
was due in May 2005. On January 27, 2000, the Predecessor entered into a
Consulting Agreement and Release with Dr. Moskow. Pursuant to this agreement,
Dr. Moskow has ceased his employment with the Company, but remains as a director
and a consultant. The agreement, among other provisions, provides for the
termination of Dr. Moskow's employment agreement, the cancellation of all
outstanding stock options and the cancellation of his indebtedness to the
Predecessor in the amount of $1 million, which was written off in the fourth
quarter of 2000. By terminating Dr. Moskow's employment agreement, the
Predecessor avoided a payment of $1 million that would have been due to
Dr. Moskow under his employment agreement upon the closing of the
recapitalization. Also, in August 1996, in connection with the acquisition of
his company, the Predecessor loaned Dr. Moskow $448,000 on a non-recourse basis,
secured by the pledge of 58,151 shares of Old Common Stock. On December 29,
1999, the Predecessor foreclosed on the pledged shares.

12. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

    The methods and assumptions used to estimate the fair value of each class of
financial instruments, for which it is practicable to estimate that value and
the estimated fair values of the financial instruments are as follows:

CASH AND CASH EQUIVALENTS

    The carrying amount approximates fair value because of the short effective
maturity of these instruments.

                                      F-24
<Page>
LONG-TERM DEBT

    The fair value of the Company's long-term debt and capital leases is
estimated based on the current rates offered to the Company for debt of the same
remaining maturities or quoted market prices. At January 31, 2001, the book
value of long-term debt and capital leases, including current maturities is
$11 million and which approximates fair value.

13. EMPLOYEE BENEFIT PLAN

    The Company sponsors a 401(k) plan, covering substantially all of its
employees. Contributions under the plan equal 50% of the participants'
contributions up to a maximum of 3 percent of eligible compensation per
participant per plan year. Actual contributions under the Plan amounted to
$39,472 for the 19 week period ended January 31, 2001, $68,557 for the 33 week
period ended September 20, 2000, along with $57,845 and $111,330 for the years
ended January 31, 2000 and 1999, respectively.

14. INCOME TAXES

    Significant components of the amounts charged to expense for income taxes
for the years ended January 31, 2001, 2000 and 1999 are as follows (In
thousands):

<Table>
<Caption>
                                                    SUCCESSOR       PREDECESSOR
                                                    ---------   -------------------
                                                      2001        2000       1999
                                                    ---------   --------   --------
<S>                                                 <C>         <C>        <C>
Current...........................................  $     --      $ --     $(11,155)
Deferred..........................................        --        --         (272)
                                                    ---------     ----     --------
Total federal.....................................  $     --      $ --     $(11,427)
                                                    ---------     ----     --------
State:
Current...........................................  $     --      $194     $    (54)
Deferred..........................................        --        --          (68)
                                                    ---------     ----     --------
Total state.......................................  $     --       194     $   (122)
                                                    ---------     ----     --------
Totals............................................  $     --      $194     $(11,549)
                                                    =========     ====     ========
</Table>

    Significant components of the Company's deferred tax assets and liabilities
as of January 31, 2001 and 2000 are as follows (In thousands):

<Table>
<Caption>
                                                         SUCCESSOR   PREDECESSOR
                                                           2001         2000
                                                         ---------   -----------
<S>                                                      <C>         <C>
Deferred tax asset
Allowance for doubtful accounts, reserves and other
  accrued expenses.....................................  $  8,876      $  7,610
Net operating loss carryforward........................    87,184        76,276
Assets held for sale...................................        --         6,514
                                                         --------      --------
Total deferred tax assets..............................    96,060        90,400
                                                         --------      --------
Deferred tax liability
Property and depreciation..............................      (150)         (121)
Amortization...........................................   (11,296)         (141)
Installment gain.......................................      (455)       (1,135)
Other..................................................        --            --
                                                         --------      --------
Total deferred tax liability...........................   (11,901)       (1,397)
                                                         --------      --------
Deferred tax asset (liability).........................    84,159        89,003
Valuation allowance....................................   (84,159)      (89,003)
                                                         --------      --------
Net deferred tax liability.............................  $     --      $     --
                                                         ========      ========
</Table>

                                      F-25
<Page>
    The Company reasonably believes that because of the large net operating loss
for the years ended January 31, 2001 and 2000 and the anticipated losses due to
the restructuring of the Company, the Company may not be able to fully utilize
all the net operating losses, which approximate $200 million to $225 million.
Accordingly, the Company has established a full valuation allowance on the
Company's net deferred tax assets.

    The net operating losses attributable to OTI of $33.1 million will begin to
expire in 2005. All other operating loss carryforwards expire after 2005.

    The reconciliation of income tax computed at statutory rates to income tax
expense is as follows:

<Table>
<Caption>
                                  SUCCESSOR                    PREDECESSOR
                                 ------------   -----------------------------------------
                                 PERIOD ENDED                 PERIOD ENDED
                                 ------------   -----------------------------------------
                                 JANUARY 31,    SEPTEMBER 20,   JANUARY 31,   JANUARY 31,
                                     2001           2000           2000          1999
                                 ------------   -------------   -----------   -----------
<S>                              <C>            <C>             <C>           <C>
Statutory rate.................       (35)%          (35)%          (35)%         (35)%
Nondeductible amortization.....        36%             0%             0%            0%
Permanent differences..........        (1%)            2%            13%            0%
Basis difference, asset held
  for sale.....................         0%             0%            (9)%          10%
State income tax (net of
  federal benefit).............         0%             0%             0%            0%
Change in valuation
  allowance....................         0%            27%            32%           14%
                                      ---            ---            ---           ---
                                        0%             5%             1%           (8)%
                                      ===            ===            ===           ===
</Table>

15. SUPPLEMENTAL CASH FLOW INFORMATION

    During the years ended January 31, 2001, 2000 and 1999, the Company acquired
the assets and/or stock, entered into management and employment agreements,
assumed certain liabilities of various physician practices, ancillary service
companies, networks and organizations and sold certain assets. In addition,
during the years ended January 31, 1999 and 1998, the Predecessor issued shares
of stock, which had been committed to be issued in conjunction with acquisitions
completed during the year ended January 31, 1998. During the years ended
January 31, 2001, 2000 and 1999, the Company also recorded impairment charges,
terminated several physician management and employment agreements, wrote down
certain notes receivable to their estimated net realizable value and wrote down
certain assets that are being held for sale at January 31, 2000 to their net
realizable value (less cost to sell). The transactions had the following
non-cash impact on the balance sheets of the Company (In thousands):

<Table>
<Caption>
                                SUCCESSOR                     PREDECESSOR
                              --------------   ------------------------------------------
                              19 WEEKS ENDED   33 WEEKS ENDED   YEAR ENDED    YEAR ENDED
                               JANUARY 31,     SEPTEMBER 20,    JANUARY 31,   JANUARY 31,
                                   2001             2000           2000          1999
                              --------------   --------------   -----------   -----------
<S>                           <C>              <C>              <C>           <C>
Current assets..............     $   (547)        $     --       $ 88,652      $ 50,284
Property, plant and
  equipment.................           --               --           (171)      (33,806)
Intangibles.................      (26,908)          43,575         44,836      (105,661)
Other noncurrent assets.....           --               --          1,003        (3,052)
Current liabilities.........           --               --          4,751        (1,836)
Debt........................           --         (101,070)        (4,244)        6,520
Noncurrent liabilities......           --               --         (1,480)          339
Equity......................     $(27,455)        $144,645       $(49,562)     $ 90,489
</Table>

                                      F-26
<Page>
    Cash paid for interest during the periods ended January 31, 2001 and
September 20, 2000 and for the years ended January 31, 2000 and 1999 was
$.2 million, $1.2 million, $7.9 million and $9.3 million, respectively. Cash
paid for income taxes during the periods ended January 31,2001 and
September 20, 2000 and for the years ended January 31, 2000, and 1999 was
$.1 million, $.2 million, $1.1 million and $10.8 million, respectively.

16. STOCK OPTION PLANS

    The Predecessor adopted a stock option plan, which authorized the issuance
of 4.1 million shares of the Company's Old Common Stock to key employees and
directors of the Company. On the Effective Date, the Predecessor's stock option
plan was terminated and all the outstanding options were cancelled.

    In connection with the effectiveness of the Prepackaged Plan, the Company
adopted the Innovative Clinical Solutions, Ltd. 2000 Stock Option Plan (the
"Option Plan"). The Option Plan provides for the grant of options to purchase a
maximum of 2,285,714 shares of new common stock. In October 2000, the Company
adopted the Innovative Clinical Solutions Ltd. 2000 Non-Executive Stock Option
Plan, which provides for the grant of options to purchase a maximum of 350,000
shares of New Common Stock. In general, options become exercisable beginning in
the first year after grant in 20%-33% increments per year and expire ten years
after the date of grant. Information related to the option plans is summarized
on a combined basis as follows:

<Table>
<Caption>
                                                                   YEAR ENDED JANUARY 31,
                                               ---------------------------------------------------------------
                                                            2001                  2000                  1999
                                                          WEIGHTED              WEIGHTED              WEIGHTED
                                                          AVERAGE               AVERAGE               AVERAGE
                                                 2001     EXERCISE     2000     EXERCISE     1999     EXERCISE
                                                SHARES     PRICE      SHARES     PRICE      SHARES     PRICE
                                               --------   --------   --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>        <C>        <C>
Outstanding at beginning of period...........    2,983     $7.27       3,026     $12.11      3,909     $16.12
Options cancelled at fresh start.............   (2,983)    $7.27
  Options granted:
At fair market value.........................    2,627     $1.11         381     $ 1.43        894     $ 4.94
Above fair market value......................       --     $  --         935     $ 2.04         --     $   --
Options exercised............................       --                    --     $   --        (36)    $ 3.61
Options cancelled............................      (46)    $1.11      (1,359)    $ 6.15     (1,741)    $16.95
                                                ------     -----      ------     ------     ------     ------
Outstanding, end of period...................    2,581     $1.11       2,983     $ 7.27      3,026     $12.11
                                                ------     -----      ------     ------     ------     ------
Weighted average fair value
Of options granted during the year...........              $1.11                 $ 1.87                $ 4.94
                                                           =====                 ======                ======
</Table>

    At January 31, 2001 there were 2,581,000 options outstanding with a
remaining contractual life of 9.7 years. All options have an exercise price of
$1.11.

    The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions for grants in the periods ended January 31, 2001, 2000 and 1999:
expected volatility of 150%, 150% and 65%; risk free interest rates of 5.5%,
5.2% and 4.7%; expected option life of 5 years, 5 years and 4.5 years; and
expected dividends of $0.

                                      F-27
<Page>
    The Company continues to account for stock based compensation under
Accounting Principles Board Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES", as allowed by SFAS No. 123, Accordingly, no compensation cost has
been recognized for options granted. Had compensation for those plans been
determined based on the fair value at the grant date for awards during the years
ended January 31, 2001, 2000 and 1999, consistent with SFAS No. 123, the
Company's net income (loss) and earnings (loss) per share would have been
reduced to the following pro forma amounts:

<Table>
<Caption>
                                                       YEAR ENDED JANUARY 31,
                                               --------------------------------------
                                                  2001         1999          1999
                                               ----------   -----------   -----------
                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>          <C>           <C>
Net income (loss)
As reported..................................   $(27,429)    $(171,207)    $(130,760)
Pro Forma....................................   $(28,910)    $(176,221)    $(133,844)
Basic earnings (loss) per share
As reported..................................   $  (2.29)    $   (4.86)    $   (3.91)
Pro Forma....................................   $  (2.41)    $   (5.00)    $   (4.01)
Diluted earnings (loss) Per share
As reported..................................   $  (2.29)    $   (4.86)    $   (3.91)
Pro Forma....................................   $  (2.41)    $   (5.00)    $   (4.01)
</Table>

17. NET INCOME PER SHARE

    The following is a reconciliation of the numerators and denominators of the
basic and fully diluted earnings per share computations for net income:

<Table>
<Caption>
                                                                             PER SHARE
                                                INCOME (LOSS)     SHARES       AMOUNT
                                                --------------   ---------   ----------
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                             <C>              <C>         <C>
SUCCESSOR
19 WEEK PERIOD ENDED JANUARY 31, 2001
Basic loss per share
  Loss available to common stockholders.......    $ (27,429)      11,999       $(2.29)
Net loss available to common stockholders.....      (27,429)          --        (2.29)
Effect of dilutive securities:................           --           --           --
Diluted earnings per share....................    $ (27,429)      11,999       $(2.29)
                                                  ---------       ------       ------
PREDECESSOR
YEAR ENDED JANUARY 31, 2000
Basic loss per share
  Loss available to common stockholders.......    $(121,575)      35,235       $(3.45)
  Extraordinary item..........................      (49,632)          --        (1.41)
Net loss available to common stockholders.....     (171,207)          --        (4.86)
Effect of dilutive securities:................           --           --           --
Diluted earnings per share....................    $(171,207)      35,235       $(4.86)

YEAR ENDED JANUARY 31, 1999
Basic loss per share
  Loss available to common stockholders.......    $ (33,976)      33,401       $(1.02)
  Extraordinary item..........................      (96,784)          --        (2.89)
Net loss available to common stockholders.....     (130,760)      33,401        (3.91)
Effect of dilutive securities:................           --           --           --
Diluted earnings per share....................    $(130,760)      33,401       $(3.91)
</Table>

                                      F-28
<Page>
    For the years ended January 31, 2001, 2000 and 1999, approximately
2.6 million, 3.0 million and 3.0 million shares, respectively, related to stock
options were not included in the computation of diluted earnings per share
because the option exercise price was greater than the average market price of
the common shares.

    For the years ended January 31, 2001, 2000 and 1999, no additional
securities or related adjustments to income were made for the common stock
equivalents related to the convertible subordinated debentures since the effect
would be antidilutive.

    Earnings per share for the Predecessor for the 33-week period ended
September 20, 2000 is not meaningful.

18. SEGMENT INFORMATION

    The Company has determined that its reportable segments are those that are
based on its current method of internal reporting. The reportable segments are:
provider network management, site management organization, real estate services
(until 2000 when they became part of assets held for sale) and assets held for
sale, The accounting policies of the segments are the same as those described in
the "Summary of Significant Accounting Policies". There are no intersegment
revenues and the Company does not allocate corporate overhead to its segments.
The tables below present revenue,

                                      F-29
<Page>
pretax income (loss) prior to extraordinary item and net assets of each
reportable segment for the indicated periods:

<Table>
<Caption>
                                              SITE
                              PROVIDER     MANAGEMENT                    ASSETS
                              NETWORK     AND RESEARCH   DISCONTINUED   HELD FOR   RECONCILING   CONSOLIDATED
                             MANAGEMENT   ORGANIZATION    OPERATIONS      SALE      ITEMS(1)        TOTALS
                             ----------   ------------   ------------   --------   -----------   ------------
<S>                          <C>          <C>            <C>            <C>        <C>           <C>
SUCCESSOR
19 WEEK PERIOD ENDED
  JANUARY 31, 2001
Net revenues...............   $ 16,897       $11,879       $     --     $     --    $     142      $ 28,918
Income (loss) before Income
  taxes and Extraordinary
  items....................        841           753            (60)          31      (28,995)      (27,429)

Net assets.................    (40,903)      (44,614)       (55,200)     (13,832)     163,699        15,036
                              --------       -------       --------     --------    ---------      --------
PREDECESSOR
33 WEEK PERIOD ENDED
  SEPTEMBER 20, 2000
Net revenues...............   $ 37,705       $22,237       $     11     $  5,622    $     181      $ 65,755
Income (loss) before Income
  taxes and Extraordinary
  items....................       (154)       (3,774)          (124)        (258)     (22,168)      (26,422)

Net assets.................    (38,058)      (50,655)       (54,790)     (13,894)     197,504        40,108

YEAR ENDED JANUARY 31, 2000
Net revenues...............   $ 59,996       $33,813             --     $ 92,475    $      --      $186,284
Income (loss) before income
  Taxes and extraordinary
  Items....................    (35,490)      (23,105)            --      (20,873)     (41,913)     (121,381)

Net assets.................      7,817        15,811             --       16,122     (106,472)      (66,722)

YEAR ENDED JANUARY 31, 1999
Net revenues...............   $ 93,479       $33,695       $  8,694     $155,410    $      --      $291,278
Income (loss) before income
  Taxes and extraordinary
  Items....................     (2,907)       (6,723)        (8,471)         517      (27,941)      (45,525)

Net assets.................     44,398        20,509          9,301      100,795      (69,103)      105,900
</Table>

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

(1) Reconciling items consist of corporate expenses and corporate net assets
    which are not allocated.

(2) Due to the decision to sell the real estate operations in the year ended
    January 31, 2000, the real estate segmented information has been included in
    assets held for sale.

                                      F-30
<Page>
19. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

    The following is a summary of the unaudited quarterly results of operations
for the periods shown (in thousands, except per share data):

<Table>
<Caption>
                                                           YEAR ENDED JANUARY 31, 2001
                                           ------------------------------------------------------------
                                                       PREDECESSOR                     SUCCESSOR
                                           -----------------------------------   ----------------------
                                                                  EIGHT WEEKS    FIVE WEEKS
                                                                     ENDED          ENDED
                                            FIRST      SECOND    SEPTEMBER 20,   OCTOBER 31,    FOURTH
                                           QUARTER    QUARTER        2000           2000       QUARTER
                                           --------   --------   -------------   -----------   --------
<S>                                        <C>        <C>        <C>             <C>           <C>
Net revenues.............................  $25,654    $ 25,794      $ 14,307       $ 8,942     $ 19,976
Income (loss) before income taxes and
  extraordinary item.....................   (7,869)    (14,326)       (4,273)       (1,402)     (23,028)
Income (loss) before extraordinary
  item...................................   (7,850)    (14,299)       (5,775)       (1,402)     (23,028)
Extraordinary item.......................       --          --       100,000            --           --
Net income (loss)........................   (7,850)    (14,299)       94,225        (1,402)     (23,028)
Net income per share-basic:
Income (loss) before extraordinary
  item...................................  $ (0.21)   $  (0.38)            *       $ (0.12)    $  (1.92)
Extraordinary item.......................  $    --    $  (0.00)            *            --           --
Net income (loss)........................  $ (0.21)   $  (0.38)            *       $ (0.12)    $  (1.92)
Net income per share-diluted:
Income (loss) before extraordinary
  item...................................  $ (0.21)   $  (0.38)            *       $ (0.12)    $  (1.92)
Extraordinary item.......................  $    --    $  (0.00)            *            --           --
Net income (loss)........................  $ (0.21)   $  (0.38)            *       $ (0.12)    $  (1.92)
</Table>

* EPS for Predecessor Company is not meaningful.

<Table>
<Caption>
                                                               YEAR ENDED JANUARY 31, 2000
                                                        -----------------------------------------
                                                         FIRST      SECOND     THIRD      FOURTH
                                                        QUARTER    QUARTER    QUARTER    QUARTER
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
Net revenues..........................................  $ 60,664   $ 49,852   $44,371    $ 31,397
Income (loss) before income taxes and extraordinary
  item................................................   (11,135)   (29,489)   (9,986)    (70,771)
Income (loss) before extraordinary item...............   (11,185)   (29,539)   (9,933)    (70,918)
Extraordinary item....................................        --    (49,632)       --
Net income (loss).....................................   (11,185)   (79,171)   (9,933)    (70,918)
Net income per share-basic:
Income (loss) before extraordinary item...............  $  (0.33)  $  (0.89)  $ (0.28)   $  (1.95)
Extraordinary item....................................  $     --   $  (1.49)       --          --
Net income (loss).....................................  $  (0.33)  $  (2.38)  $ (0.28)   $  (1.95)
Net income per share-diluted:
Income (loss) before extraordinary item...............  $  (0.33)  $  (0.89)  $ (0.28)   $  (1.95)
Extraordinary item....................................  $     --   $  (1.49)       --          --
Net income (loss).....................................  $  (0.33)  $  (2.38)  $ (0.28)   $  (1.95)
</Table>

20. SUBSEQUENT EVENTS

    On July 13, 2001, the Company executed the sale of an undeveloped tract of
land in Sarasota, Florida for $1.8 million, and net proceeds were used to pay
down the Company's Line of Credit. In addition, The Company has entered into a
definitive purchase and sale agreement to sell its oncology and hematology
business operations for $2,500,000. The Company also plans to divest itself of
its network management assets. There can be no assurances that the Company will
be able to find a

                                      F-31
<Page>
willing buyer or buyers for its assets held for sale or that any such buyer or
buyers will pay a price that reflects what the Company believes is the fair
value of such assets.

    In 1997, the Company entered into a service agreement (as later amended)
(the "Service Agreement") with Select Data, Inc. ("Select Data") whereby Select
Data was to provide data management services to two of the Company's
subsidiaries. Pursuant to the Service Agreement, ICSL was jointly and severally
liable to Select Data in the event the Service Agreement was breached. On
February 9, 2000, in connection with the sale of its subsidiary, First Choice
Home Care, Inc. ("First Choice") to Millennium Health Care of America, Inc.
("Millennium"), the Company transferred to, and Millennium agreed to assume, all
of the ICSL's obligations under the Service Agreement. Millennium failed to pay
Select Data its fees pursuant to the Service Agreement. As a result of
Millennium's failure to pay, ICSL sued Millennium in state court in Florida for
breach of contract, fraud, and related claims (the "Florida Action). In a
separate action, Select Data sought to compel arbitration against First Choice,
Millennium, and ICSL, for the breach of the Service Agreement. On or about
January 30, 2001, the arbitrator rendered an arbitration award in the amount of
$633,624.36 in favor of Select Data. The Company entered into a settlement
agreement with Select Data in which the Company agreed to pay $633,624 in
exchange for Select Data's agreement not to pursue interest and attorney's fees,
which together with the arbitration award, would have exceed $700,000.

    The Company has entered into a non-binding term sheet for the consolidation
of CSL and a privately held healthcare company. The proposed transaction
involves the combining of the assets and operations of CSL and the other company
through the exchange of stock. No cash consideration is contemplated to be paid
by or to the Company or its stockholders. The Company expects to receive
approximately 48% of the stock of the combined enterprise. The stock will be
held by the Company for future distribution to ICSL's shareholders. The closing
of the sale of CSL pursuant to this term sheet is subject to significant
conditions, which may not be met including the execution of a definitive
agreement. No assurances can be made that the Company will be able to enter into
a definitive agreement or complete the proposed transaction on terms favorable
to the Company or at all.

                                      F-32
<Page>
                      INNOVATIVE CLINICAL SOLUTIONS, LTD.
                       VALUATION AND QUALIFYING ACCOUNTS
 FOR THE 19 WEEKS AND 33 WEEKS PERIOD ENDED JANUARY 31, 2001 AND SEPTEMBER 20,
                                      2000
                   AND YEARS ENDED JANUARY 31, 2000 AND 1999
                                 (IN THOUSANDS)

<Table>
<Caption>
                                            BALANCE    ADDITIONS                 RECLASSIFICATION
                                              AT       CHARGED TO   DEDUCTIONS    OF RESERVES TO                BALANCE
                                           BEGINNING   OPERATING       FROM        ASSETS HELD       OTHER      AT END
                                           OF PERIOD    EXPENSES     RESERVES        FOR SALE         (A)      OF PERIOD
                                           ---------   ----------   ----------   ----------------   --------   ---------
<S>                                        <C>         <C>          <C>          <C>                <C>        <C>
SUCCESSOR
19 weeks ended January 31, 2001..........   $ 1,707     $    393     $     56        $(1,956)         $ --      $4,000

PREDECESSOR
33 weeks ended September 30, 2000........     3,846          479        2,618             --            --       1,707
Year ended January 31, 2000..............     1,350      112,940       91,451         18,993            --       3,846
Year ended January 31, 1999..............   $48,428     $167,443     $168,685        $46,640          $804      $1,350
</Table>

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

(A) Other represents the allowances of acquired entities.

                                      S-1
<Page>

<Table>
<Caption>
     EXHIBIT NO.                               EXHIBIT INDEX
---------------------   ------------------------------------------------------------
<C>                     <S>
                  3.1   Amended and Restated Certificate of Incorporation of the
                        Company.(1)

                  3.2   Amended and Restated By-laws of the Company.(2)

                  4.1   Registration Rights Agreement dated as of September 21, 2000
                        by and among ICSL and certain securities holders set forth
                        therein.(1)

                  4.2   2000 Stock Option Plan.(1)+

                 10.1   Employment Agreement effective September 21, 2000 between
                        ICSL and Michael T. Heffernan.(1)+

                 10.2   Form of Executive Employment Agreement with attached
                        schedule of Employment Terms.(1)+

                 10.3   Amendment No. 1 to Employment Agreement dated February 9,
                        2001 between ICSL and John Wardle.*+

                 10.4   AbleCo Financing Agreement.*

                10.17   Confirmatory Revolving Note dated as of February 1, 1998 in
                        principal amount of $10.9 million payable by Chancellor
                        Development Corp. to Innovative Clinical Solutions, Ltd.(3)

                10.18   Confirmatory Guarantee of Abraham D. Gosman dated as of
                        February 1, 1998 in favor of Innovative Clinical
                        Solutions, Ltd.(3)

                10.19   Confirmatory Stock Pledge Agreement made as of November 30,
                        1999 by and among Abraham D. Gosman, Chancellor Partners
                        Limited Partnership I, Chancellor Development Corp. and
                        Innovative Clinical Solutions, Ltd.(3)

                10.20   Letter Agreement dated November 30, 1999 by and between PBG
                        Medical Mall MOB 1 Properties, Ltd. and Innovative Clinical
                        Solutions, Ltd. regarding Interest and Lease Payments.(3)

                   21   Subsidiaries of the Registrant.*
</Table>

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

*   Filed herewith.

+   Management or compensation arrangement

(1) Incorporated herein by reference to Exhibit 3.1 to the Company's report on
    Form 8-K filed with the Commission on October 4, 2000.

(2) Incorporated herein by reference to Exhibit 3.(II) to the Company's
    Registration Statement on Form 8-A filed with the Commission on
    September 21, 2000.

(3) Incorporated by reference to the Company's Form 10-Q for the period ended
    October 31, 1999.

                                      S-2