<PAGE>




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

                                   Form 10-KSB

              [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2002

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For the transition period from      to

                         Commission file number 0-30799

                            ONCURE TECHNOLOGIES CORP.
                 (Name of small business issuer in its charter)

<TABLE>
<S>                                                                        <C>
                  FLORIDA                                                       59-3191053
 (State or other jurisdiction of incorporation or organization)              (I.R.S. Employer
                                                                            Identification No.)
</TABLE>

          610 Newport Center Drive, Suite 350, Newport Beach, CA 92660
          (Address of principal executive offices, including zip code)

         Issuer's telephone number, including area code: (949) 721-6540

    Securities registered pursuant to Section 12(b) of the Exchange Act: None

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

                     Common Stock, $.001 par value per share
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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. [X] Yes [ ] No

Check if there is disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

The registrant's revenues for its most recent fiscal year were $25,615,025.

As of March 28, 2003, the aggregate market value of the registrant's voting and
non-voting common equity held by non-affiliates of the registrant, based on the
closing price for the registrant's Common Stock on the OTC Bulletin Board on
such date, was $2,659,153. This calculation does not reflect a determination
that certain persons are affiliates of the registrant for any other purpose.

As of March 28, 2003, the number of shares outstanding of the registrant's
common stock was 8,863,843.



<PAGE>


   TABLE OF CONTENTS

<TABLE>
<CAPTION>
     PART I                                                                                                    PAGE
<S>              <C>                                                                                          <C>
     ITEM 1.     DESCRIPTION OF BUSINESS..........................................................................1
     ITEM 2.     DESCRIPTION OF PROPERTY.........................................................................17
     ITEM 3.     LEGAL PROCEEDINGS...............................................................................19
     ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................................20

     PART II

     ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER................................................21
     ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION ......................................22
     ITEM 7.     FINANCIAL STATEMENTS............................................................................31
     ITEM 8.     CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.............31

     PART III

     ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                 COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT..............................................32
     ITEM 10.    EXECUTIVE COMPENSATION..........................................................................35
     ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                 AND RELATED STOCKHOLDER MATTERS.................................................................38
     ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS............................................44
     ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K................................................................47
     ITEM 14.    CONTROLS AND PROCEDURES.........................................................................49
</TABLE>




<PAGE>





                           FORWARD-LOOKING STATEMENTS



         Statements in this Annual Report that are not historical facts
constitute "forward-looking statements." Any statements contained herein which
are not historical facts or which contain the words "anticipate," "believe,"
"continue," "estimate," "expect," "intend," "may," "should," and similar
expressions are intended to identify forward-looking statements. Such statements
reflect the current view of the Company with respect to future events and are
subject to certain risks, uncertainties and assumptions, including, but not
limited to, the risk that the Company may not be able to implement its growth
strategy in the intended manner, including the ability to identify, finance,
complete and integrate acquisitions and joint venture opportunities, risks
regarding the Company's ability to successfully restructure under-performing
facilities, risks regarding the Company's ability to meet capital requirements,
risks regarding currently unforeseen competitive pressures and risks affecting
the Company's industry, such as increased regulatory compliance and changes in
regulatory requirements, changes in payor reimbursement levels and the
development of additional alternative treatment modalities and technological
changes. In addition, the Company's business, operations and financial condition
are subject to the risks, uncertainties and assumptions which are described in
the Company's reports and statements filed from time to time with the Securities
and Exchange Commission. Should one or more of those risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein.


                                     PART I

INTRODUCTION
------------

         Throughout this Annual Report, the terms "OnCure", the "Company", "we",
"us" and "our" refer to OnCure Technologies Corp. and its subsidiaries, except
where it is made clear that such terms mean only OnCure Technologies Corp. or an
individual subsidiary.


ITEM 1.  DESCRIPTION OF BUSINESS

HISTORY

         The Company was incorporated in June 1993 under the laws of the State
of Florida. The Company conducts its business principally through its
wholly-owned subsidiary U.S. Cancer Care, Inc. Prior to the Company's
reorganization with U.S. Cancer Care, Inc. on December 5, 2000, the Company did
not conduct substantive business operations.

         U.S. Cancer Care, Inc. was incorporated in May 1998 under the laws of
the State of Delaware for the purpose of managing and operating outpatient
radiation therapy cancer treatment centers.

OVERVIEW

         The Company owns, operates and manages twelve (12) radiation cancer
treatment centers. Our centers are designed and equipped to provide patients
locally with the latest advances in radiation therapy and diagnostic testing on
an outpatient basis. We do not own physician practices nor do we maintain any
control over the provision of medical services at our centers. We contract with
physician groups to provide all of the medical care at our facilities and we
provide to their affiliated physicians capital and management resources,
including clinical management, billing and collection, data warehousing and
other administrative services. Our relationship with our affiliated physicians
is structured based upon our earnings model, which we believe appropriately
aligns our economic interests with those of our affiliate physicians. See
"Management's Discussion and Analysis or Plan of Operations." In addition to our
fixed site centers, we also own a mobile Positron Emission Tomography unit, a
mobile CT Scan 3-Dimensional Treatment Planning system and two mobile High Dose
Rate Brachytherapy units.

         Our goal is to become a leading network provider of radiation therapy
services in the United States through strategic relationships, new center
developments, prudent acquisitions and internal growth. The services we provide
are


                                       1

<PAGE>



predicated upon state-of-the-art information systems and the delivery of
superior university level care in a cost efficient manner.

         Set forth on the charts below are the names and locations of each of
our facilities and the approximate number of patients which could be treated at
the facility on a daily basis.

CALIFORNIA

<TABLE>
<CAPTION>
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FACILITY                                                   CAPACITY TO TREAT ON A DAILY BASIS
-------------------------------------------------------------------------------------------------------
<S>                                                        <C>
EAST BAY REGIONAL CANCER CENTER                                        80 patients
1034 A Street
Hayward, CA 94541
-------------------------------------------------------------------------------------------------------
ST. TERESA COMPREHENSIVE CANCER CENTER                                 40 patients
4722 Quail Lakes Drive
Stockton, CA 95207
-------------------------------------------------------------------------------------------------------
SONORA CANCER CENTER                                                   40 patients
1 South Forest Road
Sonora, CA 95370
-------------------------------------------------------------------------------------------------------
TURLOCK REGIONAL CANCER CENTER                                         40 patients
1051 East Tuolumne Road, Suite 103
Turlock, CA 95682
-------------------------------------------------------------------------------------------------------
VALLEY REGIONAL CANCER CENTER                                          80 patients
1316 Nelson Avenue
Modesto, CA 95350
-------------------------------------------------------------------------------------------------------
</TABLE>

FLORIDA

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
FACILITY                                                  CAPACITY TO TREAT ON A DAILY BASIS
-------------------------------------------------------------------------------------------------------
<S>                                                       <C>
FL CANCER CENTER - BEACHES                                             40 patients
1375 Roberts Drive
Jacksonville Beach, FL 32250
-------------------------------------------------------------------------------------------------------
FL CANCER CENTER - ORANGE PARK                                         40 patients
2161 Kingsley Ave.
Orange Park, FL 32073
-------------------------------------------------------------------------------------------------------
FL CANCER CENTER - PALATKA                                             80 patients
600 Zeagler Drive
Palatka, FL 32178
-------------------------------------------------------------------------------------------------------
FL CANCER CENTER - ST. JOHNS                                           40 patients
300 Health Park Blvd., Suite 1008
St. Augustine, FL 32086
-------------------------------------------------------------------------------------------------------
FLORIDA CANCER CENTER - IMRT                                           40 patients
WELLS COMPLEX CLINIC
3599 University Blvd. S., Suite 1500
Jacksonville, FL 32216
-------------------------------------------------------------------------------------------------------
RADIATION ONCOLOGY CENTER OF BRADENTON                                 80 patients
6215 21st Ave. W., Suite B
Bradenton, FL 34209
-------------------------------------------------------------------------------------------------------
SOUTHSIDE CANCER CENTER                                                40 patients
5742 Booth Road
Jacksonville, FL 32216
-------------------------------------------------------------------------------------------------------
</TABLE>


                                       2


<PAGE>


         The Company's centers in Beaches, Orange Park, Palatka, Southside and
Stockton are "comprehensive" cancer treatment centers. Our comprehensive centers
provide radiation therapy and diagnostic radiology, see "Radiation Therapy
Treatment for Cancer."

         In addition to the twelve (12) treatment facilities we operate and
manage, we own a mobile Positron Emission Tomography ("PET") scanner, which is
utilized to perform diagnostic tests on our cancer patients. PET is a highly
advanced nuclear medicine diagnostic study that involves the injection of
radioactive isotopes into a patient to obtain images of the metabolic
physiologic processes. The application of PET in the detection of cancer has
become significant in the last two years, as it is the first diagnostic
procedure that can detect and monitor a patient's malignancies. Our mobile PET
scanner services all six of our facilities in the Jacksonville area and two
large hospitals in Jacksonville and is the first of its kind to be licensed in
the State of Florida.

         We also own a mobile CAT-Scan Treatment Planning ("CT") system. CT
involves the use of a computer scan to visualize tumors in a three dimensional
format. Our Mobile CT scanner services five of our facilities in the
Jacksonville area.

         We also own two High Dose Rate Brachytherapy ("HDR") units. HDR is a
time tested and safe method to treat cancer by providing high doses of radiation
directly to a tumor while sparing healthy tissue and surrounding organs. Our
mobile HDR unit services all five of our centers in Northern California: East
Bay Regional Cancer Center (Hayward), St. Teresa Comprehensive Cancer Center
(Stockton), Valley Regional Cancer Center (Modesto), Sonora Cancer Center
(Sonora) and Turlock Regional Cancer Center. Our other HDR unit is located in
our Radiation Oncology Center of Bradenton.

         We currently provide Intensity Modulated Radiation Therapy ("IMRT") at
four of our centers located in Jacksonville, Florida (Wells Complex Clinic,
Orange Park, St. Johns, and Palatka) and the Valley Regional Cancer Center
located in Modesto, California. In 2003 we plan to implement additional IMRT
services at our FL Cancer Center - Beaches and Radiation Oncology Center of
Bradenton. IMRT is a state-of-the-art cancer treatment method that delivers high
doses of radiation directly to cancer cells. By targeting tumors more precisely
than is possible with conventional radiotherapy, IMRT can deliver higher
radiation doses directly to cancer cells while sparing surrounding healthy
tissue.

         We also provide exclusive radiation oncology services to Kaiser
Permanente members in Hayward, Modesto, Stockton and Turlock, California through
several agreements with The Permanente Medical Group, Inc. Kaiser is a
not-for-profit group-practice health maintenance organization that has over
three million members in its enrollment in Northern California. Kaiser also
operates 45 hospitals and clinics in Northern California.

CANCER AND ITS TREATMENT

         We believe that the market for radiation therapy services in the United
States is large and growing. Cancer is the second leading cause of death in the
United States and is responsible for one out of every four deaths. According to
the American Cancer Society, nearly 17 million new cancer cases have been
diagnosed since 1990 and approximately 1.3 million new cancer cases will be
diagnosed in 2003. In addition, the American Cancer Society states that the
National Institutes of Health estimates that approximately $61 billion was spent
for direct medical costs (the total of all health expenditures) related to
cancer in 2002.

         Cancer consists of a group of more than 100 complex diseases
characterized by the uncontrolled growth and spread of abnormal cells.
Oncologists provide cancer care by utilizing the treatment modalities of
chemotherapy, radiation therapy, surgery and immunotherapy. Radiation therapy
involves the use of radiation energy to destroy cancer cells. Radiation therapy
is used to cure cancer by destroying cancer cells and, where curing the cancer
is not possible, as a palliative treatment to eliminate pain, avoid hemorrhage,
prevent pathological bone fractures and other symptoms associated with
metastasized cancer. Radiation therapy is often curative with patients in whom a
cancer is localized and has not metastasized. Most patients that receive
radiation therapy will experience short-term side effects. Some patients will
experience chronic or long-term side effects. The severity of both short-term
and long-term side effects varies among patients and depends on the part of the
body treated and the type of cancer involved.

                                       3
<PAGE>

         Cancer can also be treated through chemotherapy. Chemotherapy is the
use of "anticancer" drugs to destroy cancer cells by stopping them from growing
or multiplying. Chemotherapy does cause adverse side effects in some patients.
For this reason, the administration of chemotherapy requires the management of
not only the chemotherapy itself but of the potential adverse side effects as
well. Chemotherapy often cures certain leukemia, lymphomas and testicular
tumors. However, it is used mostly to palliate incurable metastasized disease.
Surgery is used in both the diagnosis and the treatment of cancer.
Immune-therapy is the treatment of cancer by enhancing the patient's own disease
fighting mechanisms, which involves advanced therapies, such as interferon (a
naturally occurring human protein capable of stopping the growth of cancer),
immunizing patients to their own cancer cells and, often, immune modifiers.
Immune-therapy is currently effective in some cases of malignant melanoma.
Increasingly, the effective treatment of cancer has involved the combination of
chemotherapy, radiation therapy and surgery.

         As a result of the complexity of cancer and the variety of cancer
therapies, physicians who treat cancer typically have had extensive, highly
specialized training. Radiation therapy is performed under the supervision of a
radiation oncologist who is thoroughly trained in clinical oncology, physics and
all of the modalities of therapeutic radiation in the treatment of cancer.

         The radiation therapy centers we own and manage focus on providing
radiation oncology treatment to cancer patients on an outpatient basis.
Radiation therapy treatment is performed with a linear accelerator, which uses
high-energy photons and/or electrons to destroy the tumor with minimal effect on
the area surrounding the tumor site. Treatment courses will usually last from
two to six weeks, during which time the patient is examined and monitored by a
radiation oncologist, a radiation therapist (a professional trained in the
planning and delivery of radiation therapy) a dosimetrist, a physicist, and an
oncology nurse (a professional nurse trained in the care and treatment of
patients undergoing cancer therapy).

COMPANY STRATEGY

Focus on Radiation Therapy
--------------------------

         We believe that an opportunity exists to build a national outpatient
radiation therapy center network company in partnership with affiliated
radiation oncologists focusing primarily on outpatient therapy. We base our
belief on several characteristics of the oncology market. First, cancer patients
are a large, well-defined and growing population that require regular costly
medical intervention over a period of months or years. Of this population,
approximately one-half of the individuals diagnosed with cancer receive at least
one radiation therapy treatment course, and sometimes several courses. Second, a
relatively small number of highly trained specialized oncologists are
responsible for treating this large portion of the cancer patient population.
Third, managed care and other payors are increasingly aware of the need for more
coordinated, cost-effective cancer care. Fourth, the outpatient radiation
therapy market is highly fragmented with no dominant providers.

OPERATING STRATEGY

         Our operating strategy consists of two key components. The first is to
affiliate with reputable radiation oncology and medical oncology groups or major
hospital and payor networks on joint venture outpatient facilities. The second
is a geographically concentrated outpatient network model.

Joint Venture Strategy
----------------------

         Under our joint venture strategy, we begin by developing a center
(preferably a comprehensive treatment center) and funding all of its development
costs except those related to the land/building. We then provide radiation
therapy services for the hospital and payor networks in that area.

         We are currently implementing this strategy in Northern California
through an agreement with Kaiser. Pursuant to the terms of this agreement, we:
(i) provide our facilities in Hayward and Stockton to Kaiser's members in this
region; (ii) provide all of the administrative services for the provision of
radiation oncology services at these facilities; and (iii) participate in, and
abide by, Kaiser's quality assessment and improvement plans.

                                       4

<PAGE>

         Our objective for our Hayward and Stockton facilities is to capture
non-Kaiser business in those regions.. This strategy will decrease our reliance
on Kaiser's patient base at those facilities. We have begun to accomplish this
objective at our Stockton facility through development of patient referral
relationships with medical oncology groups.

         We currently have implemented our strategy of affiliating with
reputable medical oncology groups by leasing space to medical oncology groups at
our cancer centers in Stockton, Southside, Orange Park, Beaches, St. Augustine
and Palatka.

Concentrated Outpatient Network Strategy
----------------------------------------

         Under our geographically concentrated outpatient network strategy,
quality radiation therapy services are provided by our affiliated physicians to
a large population of cancer patients. We accomplish this through a centralized
cancer facility that will treat a majority of the cancer patients in the area by
providing the most sophisticated cancer therapy services. Within a certain
radius of the central cancer facility, we will have smaller satellite facilities
that provide basic, less technologically advanced services. This "hub and spoke"
network model provides us with the means of facilitating managed care contracts
by providing the widespread geographic coverage that managed care providers seek
for their members.

         We are currently implementing this network model in Northern California
through our outpatient radiation therapy centers located in Hayward, Modesto,
Sonora, Stockton and Turlock. Our Modesto facility serves as our centralized
center in Northern California. The physician groups at our facilities in
Hayward, Sonora, Stockton and Turlock use the Modesto facility to provide
certain treatment modalities that are not available at their local facilities.
We are also implementing this network model in Florida where our Orange Park
center serves as our comprehensive center and our outpatient radiation therapy
centers located in St. Augustine, Palatka, Jacksonville and Jacksonville Beach
serve as our "satellite facilities."

         As noted above, we also own three (3) mobile units (PET scanner, CT
scanner and HDR treatment unit). Each of these scanners contributes to our
geographically concentrated outpatient network model by providing certain
diagnostic and treatment modalities that are not available at some of our
centers.

INTERNAL GROWTH

         After we develop or acquire an outpatient radiation therapy center and
establish an affiliation with a radiation oncology group in a particular market,
we seek to expand market share and patient volume by:

         o  offering new state-of-the-art technologies (such as 3D Treatment
            Planning, Intensity Modulated Radiation Therapy, Positron Emission
            Tomography and Brachytherapy) not available in that area.

         o  entering into new managed care contracts; and

         o  increasing and improving marketing efforts.

         In addition, the newly acquired or developed radiation therapy center
will utilize our management information system. The use of our management
information system will eliminate a significant portion of the administrative
duties associated with a radiation oncologist's practice. This enables the
radiation oncology group affiliated with the center to serve patients and payors
more effectively and increase local market presence.

MANAGEMENT INFORMATION SYSTEM

         We provide each of our treatment centers with our comprehensive
radiation oncology management information system. The system is an internet,
local area network practice tool, that provides our treatment centers with three
distinct functions: (i) clinical management; (ii) billing and collection; and
(iii) data warehousing.

         The clinical management function consists of the following major
functional areas:

         o  patient registration and demographic capture;



                                       5
<PAGE>

         o  managing and tracking health maintenance organization treatment
            authorizations;

         o  scheduling for physicians, simulations, treatments and lab
            visitation;

         o  billing capture and extraction;

         o  technical, professional and global billing capabilities;

         o  management reporting to monitor billing and utilization; and

         o  tracking of rudimentary clinical outcomes.

         The billing and collection function has a consistent internal control
function over billing charges and enables us to capture missed billable charges.
The billing and collection function consists of the following major functional
areas:

         o  automated bill creation and generation (electronic or paper form);

         o  automated carrier tracking including payments, write-offs,
            adjustments and appeals; and

         o  collection management.

         The data warehouse function is designed to report at all levels
including patient level, physician level, center level, regional level and
corporate level. The data warehouse function has the following reporting and
analysis capabilities:

         o  market analysis;

         o  managed care contracting;

         o  strategic planning;

         o  accounts receivables;

         o  profitability; and

         o  trending.

         We believe that OnCure's management system is as sophisticated and less
costly than other computerized information systems used in the radiation
oncology industry. Accordingly, we believe that the utilization of our
proprietary system will better enable us to effectively manage growth. In
addition, we believe that by allowing nonaffiliated centers to use our
management information system, we will be able to establish a relationship with
such centers, thereby increasing the potential for an acquisition or management
agreement with such centers.

         The Company plans to design numerous enhancements to the management
information system in 2003. The clinical management function will be expanded to
meet the specialized needs of medical oncology, as well as radiation oncology,
consistent with the Company's strategy to partner with medical oncologists. Our
design plans include migration of our system to a sequel server platform to
increase processing speeds and to enhance system expandability for business
growth. Our design plans also include enhancement of our system's functionality
in the following areas: billing capture and extraction, electronic interchange
with payors, clinical management, and management reporting.

MANAGEMENT SERVICES

         We provide management services to outpatient radiation therapy centers.
Our management services relate to the operation of such centers. We anticipate
that the management information systems component of these services initially
will be provided using our management information system. We believe our
management services eliminate a significant



                                       6


<PAGE>

portion of the administrative duties associated with a radiation oncologist's
provision of radiation therapy services, thereby enabling the radiation
oncologist to devote a greater percentage of his or her time to providing
high-quality medical care.

AFFILIATION WITH LEADING RADIATION ONCOLOGY GROUPS, HOSPITALS AND MEDICAL
ONCOLOGY GROUPS

         Currently, we are not in the process of establishing any additional
affiliations except with a leading radiation oncology group in Mission Viejo,
California (see Acquisitions and New Developments). However, we hope to
establish additional affiliations with leading radiation oncology groups,
medical oncology groups and hospitals in the future. We will seek the following
characteristics in potential candidates:

         o  the candidate must be affiliated with a leading radiation or medical
            oncology practice in its market, both in terms of market share and
            recognition as a provider of high quality oncology care;

         o  the candidate must incorporate comprehensive radiation therapy as an
            integral part of its care to its patients; and

         o  the candidate must recognize the need for outside managerial,
            financial and business expertise to manage the increasingly complex
            aspects of an outpatient radiation therapy practice.

         We believe our affiliation structure, which emphasizes the continuation
of local hospitals and physicians' authority and control over medical practice
decisions, will enhance the appeal of affiliation with us and our ability to
enter new markets.

NEGOTIATE/EXPAND MANAGED CARE RELATIONSHIPS

         We believe that managed care will continue to be an important factor in
the healthcare industry. We also believe that managed care companies and other
third-party payors increasingly will prefer to contract for services with fewer
vendors on a national or regional basis, and that the development of regional
networks of established radiation oncology facilities will provide our
affiliated facilities with a competitive advantage in securing such contracts on
more favorable terms. We anticipate identifying desirable managed care contracts
and network affiliations, evaluating existing third-party relationships and
assisting the groups in establishing and expanding managed care relationships.

FINANCIAL SERVICES; ADMINISTRATIVE SERVICES; PERSONNEL MANAGEMENT

         We attempt to improve the operating and financial performance of each
radiation therapy center we acquire or manage. We develop a budget that involves
the adoption of financial controls and cost containment measures. We evaluate
the addition of advanced technologies to a center from a cost/benefit
perspective. We provide comprehensive financial analyses to the affiliated
radiation oncologist group and each radiation therapy center in connection with
managed care contracting. We provide billing, collection, reimbursement, tax and
accounting services and implement a cash management system.

         We also provide an array of administrative services to improve the
operations of the group. We utilize our management information system to support
our practice management services (including billing and collection, practice
analyses, patient and physician scheduling, maintenance of insurance
authorizations and the evaluation of referral patterns and managed care
proposals). We also purchase supplies, equipment, drugs and insurance,
frequently at volume discounts.

         We employ and manage all non-physician personnel of the radiation
oncology group, including dosimetrists, medical physicists, radiation therapists
and oncology nurses, as well as management information services, human
resources, secretarial and other administrative personnel. We evaluate these
employees, make staffing decisions, provide and manage employee benefits and
implement personnel policies and procedures. We also provide administrative
services to the physician group's employees, and in certain instances provide
leased labor (non-medical) to physician groups.



                                       7
<PAGE>

COST CONTAINMENT AND OPERATING EFFICIENCIES

         The operation of an outpatient radiation therapy center includes a high
percentage of fixed costs and a low percentage of variable costs. As a result,
the operating leverage of a center may be very high with revenues in excess of
fixed costs.

         With respect to each of our outpatient radiation therapy centers, we
implement an internal financial and accounting control system to consolidate
administrative, accounting and purchasing functions. We accomplish cost
reduction by:

         o  capitalizing on economies of scale arising from our ability to
            negotiate discounts with both service, equipment and medical supply
            vendors as a result of consolidated purchasing power;

         o  centralizing human resources, accounting, billing and collection
            activities on a regional basis, resulting in a reduction of labor
            costs.

MEDICAL ADVISORY BOARD

         Our Medical Advisory Board is open to all physicians who are affiliated
with the Company's cancer centers. Currently, there are 16 members on the
Medical Advisory Board. Two of the seven members also serve on our Board of
Directors (Drs. Paryani and Wells) and the Chairman of the Medical Advisory
Board is the Chairman of our Board of Directors (Dr. Paryani). The primary
function of the Medical Advisory Board is to:

         o  develop and adopt clinical policies, procedures and protocols to be
            implemented in the independent radiation therapy centers or to be
            used by the affiliated hospitals or the affiliated radiation
            oncology groups;

         o  develop and administer quality assurance programs, ensure all
            physician and other professional licensing and implement continuing
            education programs;

         o  formulate a strategic plan for each affiliated radiation oncology
            group designed to improve the performance of the related radiation
            therapy facility.

         The Medical Advisory Board has been established to outline physician
recruiting goals, identify services and equipment to be added, identify
desirable payor relationships, identify other radiation oncology groups that are
possible affiliation candidates and to facilitate communication with other
affiliated physician groups in our network.

RADIATION THERAPY TREATMENTS FOR CANCER

         Through the use of our facilities and equipment, the radiation
oncologist medical groups with which we contract are able to offer a wide array
of radiation therapy services for outpatient cancer treatment. The radiation
oncologists (and not us) maintain full control over the provision of medical
services at our facilities.

         We seek to operate and manage additional outpatient radiation therapy
centers through various acquisitions. We anticipate that each of our centers
will be designed and equipped to provide substantially all of the outpatient
diagnostic and treatment programs necessary to treat a cancer patient with
radiation therapy. We intend for our centers to provide many oncology services,
all of which are typically found only at university medical centers, including
some or all of the following:

         o  INTENSITY MODULATED RADIATION THERAPY. IMRT is a state-of-the-art
            cancer treatment method that delivers high doses of radiation
            directly to cancer cells. By targeting tumors more precisely than is
            possible with conventional radiotherapy, IMRT can deliver higher
            radiation doses directly to cancer cells while sparing surrounding
            healthy tissue.

         o  POSITRON EMISSION TOMOGRAPHY, which involves the injection of
            radioactive isotopes into a patient to obtain images of metabolic
            physiologic processes. Positron Emission Tomography provides
            information that is not available from other imaging technologies.



                                       8

<PAGE>

         o  STEREOTACTIC RADIOSURGERY, which targets brain tissues with multiple
            arcs of radiation and is used to treat deep-seated brain tumors.

         o  FRACTIONATED STEREOTACTIC RADIOSURGERY, which is a non-invasive
            technique similar to stereotactic radiosurgery permitting treatment
            of larger brain lesions.

         o  HIGH DOSE RATE BRACHYTHERAPY, which involves the use of radioactive
            materials (isotopes) placed directly in contact with cancer tissues,
            which are then removed when a lethal dose has been delivered to the
            cancer.

         o  3-DIMENSIONAL CONFORMAL TREATMENT PLANNING, which involves the use
            of a computer scan, allowing tumors to be visualized in a
            3-dimensional format. This makes it possible to treat the cancer
            volume with very narrow margins. By greatly decreasing the amount of
            normal tissue irradiated, treatment side effects are greatly reduced
            and often largely eliminated. This also permits the delivery of a
            larger lethal dose of radiation to the cancer.

         o  COMPUTERIZED CUSTOM TISSUE COMPENSATION, which involves a treatment
            planning mechanism to deliver a homogeneous dose of radiation to the
            entire tumor volume. This technique facilitates the delivery of a
            larger dose of radiation to the tumor, more successfully killing the
            cancer, while sparing the surrounding normal tissues, which reduces
            side effects.

         o  PROSTATE IMPLANTATION, which involves the use of Palladium "seeds"
            and other radioactive implants (radioactive isotopes) in the
            treatment of prostate cancer.

         o  STRONTIUM 89 INJECTION, which is a radioactive injection therapy for
            widespread bone disease.

         o  RADIOIMMUNOTHERAPY, involves the use of specific antibodies that are
            tagged with radioactive isotopes. These antibodies seek out specific
            cancer cells and deliver large amounts of radiation to the tumor
            while doing minimal harm to normal cells. The FDA has approved the
            radioimmunotherapy agent Zevalin (ibritmomab) to treat Non-Hodgkin's
            Lymphoma. Several patients have already been treated at our centers
            in Florida with this innovative technique.

         o  ENDOVASCULAR BRACHYTHERAPY uses radioactive sources to apply
            internal radiation to the wall of a blood vessel. This type of
            radiation therapy prevents restenosis (inflammation and scarring
            that causes narrowing of the arteries after angioplasty) of coronary
            arteries or peripheral arteries. The standard therapy currently used
            for restenosis, or narrowing of the arteries, is angioplasty with or
            without the use of stents. However, the restenosis rate after
            angioplasty is over 75% in complex cases. Preliminary trials using
            radiation therapy report restenosis rates of less than 10%.
            Currently, there are two techniques being utilized to deliver this
            radiation treatment. The first involves the use of a high intensity
            Iridium-192 radioactive source that is a gamma emitter and the other
            uses a beta emitter such as Phosporous-32. The radiation oncologists
            affiliated with our facilities in Jacksonville, Florida are
            participating in clinical trials evaluating the efficacy of the use
            of endovascular radiation therapy. The Food and Drug Administration
            has approved the use of endovascular brachytherapy in certain cases
            of coronary artery disease and the technique is currently being
            utilized in Florida. In addition, the FROG doctors are participating
            in the clinical trials for the Application of Endovascular
            Brachytherapy to Dialysis Patients for the Prevention of the
            Scarring of Shunts.

         Through our existing cancer center network, the centers we manage
provide all of these services. Furthermore, most of our centers have community
rooms, facilities for patient meetings, patient self-help and support programs,
counseling and education areas and training facilities.



MEDICAL ONCOLOGY TREATMENTS FOR CANCER

         As noted above, our centers in Beaches, Orange Park, Palatka, St.
Augustine, Southside and Stockton exclusively provide radiation therapy
services; however, other cancer-related services are also available at the
buildings where these



                                       9

<PAGE>

centers are located. At these locations, we either lease to or from medical
oncologists and related entities who provide the treatment areas and equipment
necessary for the provision of medical oncology. The medical oncologists (and
not us) provide medical oncology services, including some of the following:

         o  Chemotherapy using oral or intravenous drugs to treat cancers that
            have a propensity to spread to other sites.

         o  Infusion therapy using special fluids such as blood or plasma to aid
            the cancer patient in recovering from the effects of therapy.

         o  Hormone therapy using specific drugs which are related to normal
            hormones and help fight certain cancers such as breast and prostate.

ACQUISITIONS AND NEW DEVELOPMENTS

         We believe there are, and will continue to be, many attractive
radiation therapy facility acquisition opportunities. We expect to acquire
outpatient radiation therapy centers from: (i) doctors who own and operate their
own centers and are seeking management expertise, access to managed care
contracts and other resources offered by multi-site providers, (ii) doctor
owners who are finding it increasingly difficult to remain competitive in the
face of managed care and new equipment technology upgrade demands, and (iii)
doctor owners who due to the diverse demographics and objectives of their
particular medical groups need to provide certain financial benefits, and
accordingly, seek to sell the technical component of their centers while
continuing the professional group. We also plan to enter in strategic joint
ventures with hospitals, large managed care organizations (similar to Kaiser
Permanente) and leading radiation oncology groups that desire access to advanced
radiation therapy technologies, but lack, or choose to conserve their financial
and/or managerial resources. In evaluating acquisition and joint venture
candidates, we analyze several strategic characteristics, including:

         o  the reputation of the candidate;

         o  the geographic synergy of the location to existing facilities;

         o  the nature of the market;

         o  the presence and strength of local competition;

         o  financial data, including net revenues and operating income;

         o  history of payor reimbursement;

         o  referral patterns; and

         o  volume levels.

         We seek to develop preeminence in certain geographic regions within the
United States, thus developing a network of radiation therapy centers, which
permit us to benefit from economies of scale and obtain managed care contracts
on favorable terms.

         We have created an extensive database of existing outpatient radiation
therapy facilities for potential acquisitions. We have prioritized this
database, based upon an analysis of: (i) payor reimbursement patterns; (ii)
patient demographics; (iii) state health department regulations regarding
certificates of need; (iv) the geographic synergy of the location to existing
facilities; and (v) the physician group with which we would be affiliated. We
will need to obtain additional financing in order to implement such acquisition
opportunities.

         We believe that internal growth is critical to our overall acquisition
and development strategy. Our management fosters such internal growth through:
(i) marketing; (ii) entering into managed care contracts; (iii) offering
state-of-the-art technologies; and (iv) implementing OnCure's management
information system, which historically has added to the financial management
capabilities of each facility, in some cases allowing the capture of
approximately 15-30% of missed billings.



                                       10

<PAGE>

         On January 24, 2003, we formed of a joint venture with Ninth City
Landowners, LLP named "FROG OnCure Southside, LLC", which acquired the assets
and business of Southside Cancer Center, located in Jacksonville, Florida. See
"Certain Relationships and Related Party Transactions."

         In February 2003, the Company entered into a revised letter of intent
with respect to the acquisition of all of the outstanding capital stock of
Mission Viejo Oncology Medical Group, Inc. ("Mission"). Mission owns, operates
and manages two (2) treatment centers in California. The Company expects the
purchase price of the acquisition to be approximately $5.0 million, $4.6 million
payable in cash and $400,000 payable in preferred stock of the Company. The
Company also expects to assume approximately $1.4 million of indebtedness of
Mission and acquire approximately $400,000 of accounts receivable of Mission.
The transaction contemplated by the letter of intent is subject to several
material conditions including, among others, the receipt of necessary financing,
the approval of the Company's Board, the negotiation of definitive documentation
and the satisfactory completion of due diligence. There can be no assurance that
this transaction will be completed or that if completed, the terms will not
change.

         Our joint venture with Columbia HCA Hospital ("HCA") at the Bradenton
center expired in 2002, and due to changes in policies by the management at HCA
regarding certain healthcare joint ventures, will not be renewed. Although the
joint venture agreement has expired, the Company and HCA have continued to
operate under the terms of the expired agreement. The Company intends to acquire
HCA's fifty percent (50%) interest in the joint venture for $1.1 million. The
transaction is subject to the receipt of necessary financing. The Company has
negotiated a new land lease for a five year period and medical services
agreement for a minimum ten year period with respect to the Bradenton center.
There can be no assurance that the Company will be able to obtain the necessary
financing to consummate this transaction or that the terms of the transaction
will not change.

COMPETITION

         The business of providing healthcare services generally, and of
providing oncology services specifically, is highly competitive. We are aware of
several competitors specializing in radiation oncology and medical oncology. As
a result of several market factors and of the increasing regulation of the
healthcare industry, we believe that others in the healthcare industry may adopt
strategies similar to those that we intend to adopt. These potential competitors
may have significantly greater resources than we do.

         The principal competitive factors in our industry include, among
others: patient service and satisfaction; pricing; quality of care; radiation
oncologists' reputation, experience and expertise; strength of operational and
management information systems; technologically advanced equipment; managed care
expertise; patient referrals and access; management strength; regional network
area coverage; and quality assurance programs. Our centers face competition from
sole practitioners, single and multiple specialty physician groups, physician
practice management companies, hospitals and operators of other radiation
therapy centers. We may have to compete against these entities for patient
referrals, contracts with payors and/or acquisitions.

         We believe that while there are many radiation oncology and medical
oncology companies, there is no single dominant company in the outpatient
radiation therapy sector. We believe, based on available industry data, that
approximately 10% of the existing outpatient radiation therapy centers are owned
by a few public companies (excluding hospital inpatient facilities) and that the
ownership of the remaining centers is widely dispersed. However, most of these
companies do not focus primarily on the provision of radiation therapy. The
following table sets forth estimated information about certain public and
private companies that currently own outpatient radiation therapy facilities.
There may be other private companies, which we are not fully aware of, or
information not available or public.


<TABLE>
<CAPTION>
                                            TICKER                                                ESTIMATED # OF
         COMPANY                            SYMBOL             PRINCIPAL BUSINESS                 CENTERS OWNED
         -------                            ------             ------------------                 -------------
<S>                                         <C>                <C>                                <C>
US Oncology, Inc.                           USON               Medical Oncology                             65
                                                               Physician Practice Management

21st Century Oncology, Inc.                 Private            Radiation Oncology                           35
</TABLE>



                                       11

<PAGE>
<TABLE>
<S>                                         <C>                <C>                                <C>
Universal Health Services, Inc.             UHS                Hospitals                                      9

Cancer Treatment Centers of America         Private            Cancer Center                                  4

Vantage Oncology Inc.                       Private            Radiation Oncology                             1

Dolphin Medical Inc.                        Private            Radiation Oncology                             4
</TABLE>


REIMBURSEMENT OF HEALTH CARE COSTS

         Escalating health care costs and the growing ranks of the uninsured
have become a matter of national concern, and both the state and federal
government have increasingly imposed substantial payment constraints on
expenditures for governmental healthcare programs, including Medicare and
Medicaid. The Company is heavily reliant on payments from governmental payers,
which comprised approximately 42% of Company revenues in 2002.

         Our centers are generally paid by the Medicare Program under the
Physician Fee Schedule, and Medicare payment for certain services that are
provided at our facilities was reduced by approximately 10-12% in 2002, as the
result of reductions in the fee schedule amounts payable for our services. The
recent enactment of Consolidated Appropriations Resolution of 2003 (CAR), which
was signed into law on February 20, 2003, enabled the Medicare Program to
correct methodological errors that would have resulted in a further 4.4%
decrease in 2003; however, additional reductions in Medicare payments under the
Physician Fee Schedule are projected for 2004 and beyond. In addition, the
Centers for Medicare and Medicaid Services, which administers the Medicare
Program, has indicated that it intends to modify the Medicare payment
methodology for the facilities, equipment, supplies, clinical personnel, and
other overhead ("technical component") of radiation oncology and other services,
possibly as early as 2004. For these reasons, we can provide no assurance that
Medicare Program payment will not be reduced in a manner that materially and
adversely impacts the Company.

REGULATION

         The healthcare industry is highly regulated and changes in laws and
regulations as well as new interpretations of existing laws can have a material
effect on our activities, the relative costs associated with doing business and
the amount of reimbursement by government and other third-party payors. The
federal government and all states in which we operate regulate various aspects
of our business. Failure to comply with these laws could adversely affect our
ability to receive reimbursement for our services and subject us and our
officers and agents to civil and criminal penalties.

Anti-kickback Statutes
----------------------

         We are subject to federal and state laws, which govern financial and
other arrangements between healthcare providers. These include the federal
anti-kickback statute which, among other things, prohibits the knowing and
willful solicitation, offer, payment or receipt of any remuneration, direct or
indirect, in cash or in kind, in return for or to induce the referral of
patients covered by Medicare, Medicaid and certain other governmental health
programs. Violation of the anti-kickback statute may result in civil or criminal
penalties and exclusion from the Medicare, Medicaid and other federal healthcare
programs.

         In addition, it is possible that private parties may file qui tam
actions based on claims resulting from relationships that violate this statute,
seeking significant financial rewards. Many states have enacted similar
statutes, which are not limited to items and services reimbursed under Medicare
or a federally funded healthcare program.

         In recent years, there has been increasing scrutiny by law enforcement
authorities, the Department of Health and Human Services ("HHS"), the courts and
Congress of financial arrangements between healthcare providers and potential
sources of referrals to ensure that such arrangements do not violate the
anti-kickback provisions. HHS and the federal courts interpret the anti-kickback
statues broadly to mean that an arrangement may violate the statute if one
purpose of the arrangement is to illegally induce referrals, even if there are
other legitimate reasons for the arrangement. Under this interpretation, the
anti-kickback statute may be applicable to a wide of range financial
arrangements, including, under certain circumstances, distributions of
partnership and corporate profits to investors who refer federal healthcare
program



                                       12

<PAGE>

patients to a corporation or partnership in which they have an ownership
interest. Also, law enforcement officials have focused on the fair market value
of payments for service contracts and equipment leases that are designed, even
if only in part, to provide direct or indirect remuneration for patient
referrals.

         HHS has issued "safe harbor" regulations that set forth certain
provisions which, if met, will assure that healthcare providers and other
parties who refer patients or other business opportunities, or who provide
reimbursable items or services, will be deemed not to violate the anti-kickback
statute. While efforts have been made to insure that financial arrangements with
referral sources meet safe harbor requirements to the extent practicable, a
number of our arrangements may not meet "safe harbor" requirements. However,
failure to comply with a "safe harbor" does not necessarily mean that a
transaction is illegal. We believe that our operations materially comply with
the anti-kickback statutes; however, because these provisions are interpreted
broadly by law enforcement authorities, there can be no assurance that law
enforcement officials or others will not challenge our operations under these
statutes.

Stark II; State Physician Self-Referral Laws
--------------------------------------------

         A federal law, commonly known as the "Stark Law" or "Stark II",
precludes a physician who has a "financial relationship" with an entity from
referring Medicare patients to that entity for the provision of certain
"designated health services," subject to certain exceptions. An entity that
receives a referral that violates the Stark Law is precluded from submitting a
claim for that service to the Medicare Program. "Designated health services"
include, among other things, radiology services, radiation therapy, and hospital
inpatient and outpatient services. The Stark Law applies directly to services
reimbursable by Medicare and may apply to services reimbursable under Medicaid,
depending on state law.

         Final regulations partially implementing the Stark Law were issued in
January 2001 and became effective in January 2002. It is not clear when further
regulations will be published, but the Center for Medicare Medicaid Services
("CMS") has taken the position that the Stark Law is self-effectuating and does
not require implementing regulations.

         In addition, several states in which we operate have enacted or are
considering legislation that prohibits "self-referral" arrangements or requires
physicians or other healthcare providers to disclose to their patients any
financial interest they may have with a healthcare provider whom they recommend.

          Although we believe our operations materially comply with these
federal and state physician self-referral laws, there can be no assurance that
Stark II or other physician self-referral regulations will not be interpreted or
applied in a manner that would have a material adverse effect on our business,
financial condition and results of operations. Violation of the federal
self-referral laws may result in significant civil penalties and exclusion from
the Medicare Program. Significantly, private parties may file qui tam actions
based on claims arising from relationships that violate the Stark Laws. Possible
sanctions for violating these provisions include loss of licensure of the
physician involved and civil and criminal sanctions. Such state laws vary from
state to state and seldom have been interpreted by the courts or regulatory
agencies.


Health Insurance Portability and Accountability Act
---------------------------------------------------

         In 1996, Congress passed the Health Insurance Portability and
Accountability Act ("HIPAA"), which was designed to guarantee the availability
and renewability of health insurance coverage for certain employees and
individuals, while also limiting the use of pre-existing condition restrictions.
HIPAA also made substantial amendments to federal healthcare fraud and abuse
laws, including:

         o  the establishment of fraud and abuse control programs to coordinate
            and fund the investigation and prosecution of healthcare fraud and
            abuse;

         o  the establishment of a Medicare integrity program, including
            medical, utilization and fraud review of Medicare providers;

         o  the extension of existing Medicare-Medicaid anti-fraud and abuse
            provisions to all federal healthcare programs;

         o  the provision of enhanced civil penalties; and

         o  the creation of new federal crimes of healthcare fraud and making
            false statements relating to healthcare matters.



                                       13

<PAGE>

         The healthcare fraud statute prohibits knowingly and willfully
executing a scheme to defraud any healthcare benefit program, including private
payors. A violation of this statute is a felony and may result in fines,
imprisonment or exclusion from government sponsored programs such as the
Medicare and Medicaid programs. The false statements statute prohibits knowingly
and willfully falsifying, concealing or covering up a material fact or making
any materially false fictitious or fraudulent statement in connection with the
delivery of or payment for healthcare benefits, items or services, including
those provided by non-government payors. A violation of this statute is a felony
and may result in fines or imprisonment. The enactment of these provisions
supplement and do not replace pre-existing laws pertaining to false claims and
false statements.

         HIPAA also requires health care providers to maintain the privacy and
security of health information. The requirements imposed by these provisions are
broad, including provisions relating to federal standards for electronic
transactions; provisions relating to the protection of individually identifiable
health information; and provisions imposing security standards for all
electronic health information. The Government recently finalized regulations to
implement the privacy standards under the Act, which become effective on April
14, 2003 with respect to the Company. The Company has obtained an extension to
meet the requirements for the electronic transaction standards; the effective
date with respect to the Company is October 15, 2003. The Company expects to
implement the necessary policies, procedures, and system controls to be meet the
HIPPA standards for privacy, security, and electronic standards by the effective
dates. A violation of the Act's health fraud, privacy or security provisions may
result in criminal and civil penalties, which may adversely affect our business,
financial condition and results of operations.

Federal False Claims Act
------------------------

         There has been an increase in qui tam actions brought under the federal
False Claims Act and, in particular, under the False Claims Act's
"whistleblower" provisions. Those provisions allow a private individual to bring
actions in the name of the government alleging that the defendant has made false
claims for payment from federal funds. After the individual has initiated the
lawsuit, the government must decide whether to intervene in the lawsuit and
become the primary prosecutor. Until then the lawsuit is kept secret. If the
government declines to join the lawsuit, the individual may choose to pursue the
case alone, in which case the individual's counsel will have primary control
over the prosecution, although the government must be kept apprised of the
progress of the lawsuit, and may intervene later. Whether or not the federal
government intervenes in the case, it will receive the majority of any recovery.
If the litigation is successful, the individual is entitled to no less than 15%,
but no more than 30%, of whatever amount the government recovers. The percentage
of the individual's recovery varies, depending on whether the government
intervened in the case and other factors.

          Recently, the number of suits brought against healthcare providers by
government regulators and private individuals has increased dramatically. In a
number of cases, such actions have been brought on the theory that a claim
submitted as the result of a referral that violates the anti-kickback statute or
the Stark Law is a false claim, and a number of courts have upheld this basis
for false claims act recoveries. In addition, various states are considering or
have enacted laws modeled after the federal False Claim Act, penalizing false
claims against state funds. If a whistleblower action is brought against us,
even if it is dismissed with no judgment or settlement, we may incur substantial
legal fees and other costs relating to an investigation. Actions brought under
the False Claims Act may result in significant fines and legal fees and distract
our management's attention, which would adversely affect our business, financial
condition and results of operations.

         When an entity is determined to have violated the federal False Claims
Act, it must pay three times the actual damages sustained by the government,
plus mandatory civil penalties of between $5,500 to $11,000 for each separate
false claim, as well as the government's attorneys fees. Liability arises when
an entity knowingly submits, or causes someone else to submit, a false claim for
reimbursement to the federal government or submits a false claim with reckless
disregard for, or in deliberate ignorance of, its truth or falsity. Simple
negligence should not give rise to liability. Examples of the other actions,
which may lead to liability under the Act:

         o  Failure to comply with the many technical billing requirements
            applicable to our Medicare and Medicaid business.

         o  Failure to accurately identify and report our reimbursable and
            allowable services to Medicare.

         o  Failure to comply with the prohibition against billing for services
            ordered or supervised by a physician who is excluded from any
            federal healthcare programs, or the prohibition against employing or
            contracting with any person or entity from any federal healthcare
            programs.



                                       14
<PAGE>

         o  Failure to comply with Medicare physician supervision requirements
            for the services we provide, or the Medicare documentation
            requirements concerning physician supervision.

         o  The past conduct of the businesses we have acquired.

         o  Under certain circumstances, violation of the anti-kickback
            provisions or Stark Law.

         We strive to ensure that we meet applicable billing requirements.
However, the costs of defending claims under the False Claims Act, as well as
sanctions imposed under the Act, could significantly affect our business,
financial condition and results of operations.

Fee-Splitting; Corporate Practice of Medicine
---------------------------------------------

         The laws of many states prohibit physicians from splitting professional
fees with non-physicians and prohibit non-physician entities, such as us, from
practicing medicine and from employing physicians to practice medicine. These
laws and their interpretations vary from state to state and are enforced by
regulatory authorities with broad discretion. Our contracts with the entities
that we manage provide that we do not employ physicians to practice medicine,
represent to the public that we offer medical services or control the practice
of medicine through ownership of our radiation therapy centers or any management
services rendered. For these reasons, we believe that we are not in violation of
applicable state laws prohibiting fee splitting or the corporate practice or
medicine. However, because the laws governing the corporate practice of medicine
and fee-splitting are reinterpreted from time to time, we can provide no
assurance that our current arrangements will remain in compliance with state
law. Moreover, such laws vary from state to state, and, for this reason,
expansion of our operations to a state with strict corporate practice of
medicine laws may require us to modify our operations with respect to one or
more radiation therapy centers, which may have adverse consequences on us.
Further, there can be no assurance that our arrangements will not be
successfully challenged as constituting the unauthorized practice of medicine or
that certain provisions of our agreements will be found to be unenforceable.

Physician and Facility Licensing
--------------------------------

         The physician with whom we may enter into agreements to provide
professional services are subject to licensing and related regulations by the
states, including registrations to use radioactive materials. As a result, we
require our physicians to have and maintain appropriate licensure. In addition,
some states also impose licensing or other requirements on us at our facilities
and other states may impose similar requirements in the future. Local
authorities may also require us to obtain various licenses, permits and
approvals. We believe that we have obtained all required licenses and permits;
however, there can be no assurance that additional laws and state licensure
requirements governing our facilities' operations will not be enacted.

Liability Insurance
-------------------

         The physicians and other entities that use our systems and services are
involved in the delivery of healthcare services to the public and; therefore,
are exposed to the risk of liability claims. We believe that we do not engage in
the practice of medicine, we provide only the equipment and technical components
of radiation therapy. We have not experienced any material losses due to claims
for malpractice. Nevertheless, claims for malpractice have been asserted against
us in the past and any future claims, if successful, could entail significant
defense costs and could result in substantial damage awards to the claimants,
which may exceed the limits of any applicable insurance coverage. We maintain
professional liability insurance in amounts we believe are adequate for our
business of providing cancer treatment and management services. In addition, the
physicians or other healthcare professionals with whom we contract are required
by such contracts to carry adequate medical malpractice insurance. Successful
malpractice claims asserted against us, to the extent not covered by our
liability insurance, could have a material adverse effect on our business,
financial condition and results of operations.

Certificates of Need
--------------------

         Some states require hospitals and certain other healthcare facilities
and providers to obtain a Certificate of Need ("CON") or similar regulatory
approval prior to the commencement of certain healthcare operations or services,
the incurring of certain capital expenditures and/or the acquisition of major
medical equipment. CON regulations may limit or preclude us from providing
services in certain states. We believe that we have complied or will comply with
applicable CON requirements in those states where we operate. Nevertheless, a
significant increase in the number of states regulating



                                       15

<PAGE>

our business within the CON or state licensure framework could adversely affect
our business, financial condition and results of operations. Conversely, repeal
of existing CON regulations in jurisdictions where we have obtained or operate
under a CON could also adversely affect our business, financial condition and
results of operations, since CON regulation effectively functions as a barrier
to entry. This is an area of continuing legislative activity, and there can be
no assurance that CON and licensing statutes will not be modified in the future
in a manner that may have a material adverse effect on our business and
operations.

Regulatory Compliance
---------------------

         We believe that healthcare regulations will continue to change and we
intend to regularly monitor developments in healthcare law. We expect to modify
our agreements and operations from time to time as the business and regulatory
environment changes. While we believe we will be able to structure all our
agreements and operations within applicable law, there can be no assurance that
our arrangements will not be successfully challenged.

TECHNOLOGICAL AND THERAPEUTIC CHANGES IN CANCER TREATMENT

         The treatment of cancer patients is subject to potentially
revolutionary change. Although radiation therapy equipment has remained
relatively free of technical obsolescence since the commercial introduction in
the early 1970s of the linear accelerator (which produces radiation
artificially, rather than by using the radiation emitted by natural cobalt
isotopes), future technological developments may render our equipment obsolete.
Significant costs may have to be incurred to replace or modify our existing
equipment in which we have a substantial investment. In addition, advances in
other cancer treatment methods, such as chemotherapy, surgery and immunotherapy,
or in cancer prevention techniques, may reduce demand or eliminate the need for
the radiation therapy services provided by us.

EMPLOYEES

         As of March 15, 2003, we employed approximately 157 persons. We
consider our employee relations to be satisfactory.

TERMINATION DATES OF OUR MEDICAL SERVICES AGREEMENTS

         The radiation oncologists practicing at our centers are affiliated with
a professional corporation or partnership that has contracted with us to provide
medical services at our facilities. Set forth on the chart below is the
termination date of each agreement.


<TABLE>
<CAPTION>
--------------------------------------------------- ------------------------------------------------------------------
                                                            TERMINATION DATE OF THE FACILITY'S MEDICAL
                     FACILITY                                          SERVICES AGREEMENT
--------------------------------------------------- ------------------------------------------------------------------
<S>                                                 <C>
East Bay Regional Cancer Center                     July 31, 2004  (1)
--------------------------------------------------- ------------------------------------------------------------------

Florida Cancer Center - Beaches                     October 12, 2008 with a renewal to October 12, 2018  (1)
--------------------------------------------------- ------------------------------------------------------------------

Florida Cancer Center - Orange Park                 October 12, 2008 with a renewal to October 12, 2018   (1)
--------------------------------------------------- ------------------------------------------------------------------

Florida Cancer Center - Palatka                     October 12, 2008 with a renewal to October 12, 2018  (1)
--------------------------------------------------- ------------------------------------------------------------------

Florida Cancer Center - St. Johns                   October 12, 2008 with a renewal to October 12, 2018 (1)
--------------------------------------------------- ------------------------------------------------------------------

Florida Cancer Center - Wells Complex Clinic        October 12, 2008 with a renewal to October 12, 2018  (1)
--------------------------------------------------- ------------------------------------------------------------------
</TABLE>



                                       16
<PAGE>

<TABLE>
--------------------------------------------------- ------------------------------------------------------------------
<S>                                                 <C>
Radiation Oncology Center of Bradenton              January 2, 2008 with a renewal to 2018 (1)
--------------------------------------------------- ------------------------------------------------------------------

St. Teresa Cancer Comprehensive Center              December 1, 2011, with a renewal to December 1, 2021 (1)
--------------------------------------------------- ------------------------------------------------------------------

Sonora Cancer Center                                Month to Month  (2)
--------------------------------------------------- ------------------------------------------------------------------

Southside Cancer Center                             January 31, 2008 with a renewal to 2013 (1)
--------------------------------------------------- ------------------------------------------------------------------

Turlock Regional Cancer Center                      July 1, 2012 with a renewal to 2017 (1)
--------------------------------------------------- ------------------------------------------------------------------

Valley Regional Cancer Patient Care Center          July 1, 2012 with a renewal to 2017 (1)
--------------------------------------------------- ------------------------------------------------------------------
</TABLE>

(1)      The termination date of each agreement is subject to certain conditions
         (none of which have yet to occur), which would have the effect of
         accelerating the termination date.

(2)      The Company has terminated the medical service agreement at this center
         effective July 1, 2002. The physician, which was a party to the
         terminated medical services agreement, is providing medical services to
         patients under terms of a locums agreement with a forty five (45) day
         notice cancellation provision. The Company is negotiating with Dr. John
         J. Fuery to allow the existing physician to be released from any
         non-compete provisions in order to contract with the Company on a
         long-term basis. See "Litigation."


ITEM 2.  DESCRIPTION OF PROPERTY

         The following table contains information concerning our real property
that we own or lease and which we consider important to our business.

<TABLE>
<CAPTION>
------------------------------------ -------------------------------------- --------------------------------------
          NAME & LOCATION                   GENERAL CHARACTER & USE                         OTHER
------------------------------------ -------------------------------------- --------------------------------------
<S>                                  <C>                                    <C>
CORPORATE OFFICE                     3,978 square feet.                     We lease this facility from an
610 Newport Center Drive                                                    unaffiliated company. This lease
Suite 350                                                                   expires on July 31, 2007.
Newport Beach, CA 92660
------------------------------------ -------------------------------------- --------------------------------------
EAST BAY REGIONAL CANCER CENTER      8,317 square feet, used for            We lease this facility from a
1034 A Street                        radiation therapy, diagnostic          corporation owned by one of our
Hayward, CA 94541                    radiology and brachytherapy.           stockholders, Dr. John J. Fuery.
                                                                            This lease expires on March 31, 2006.
------------------------------------ -------------------------------------- --------------------------------------
FLORIDA CANCER CENTER- BEACHES       5,876 square feet, used for medical    We lease this facility from an
1375 Roberts Drive                   oncology, radiation therapy and        unaffiliated company. This lease
Jacksonville Beach, FL 32250         diagnostic radiology.                  expires on January 31, 2007.
------------------------------------ -------------------------------------- --------------------------------------
FLORIDA CANCER CENTER- ORANGE PARK   7,500 square feet, used for medical    We lease this facility from a
2161 Kingsley Ave.                   oncology, radiation therapy,           general partnership that is
Orange Park, FL 32073                diagnostic radiology and seed          partially owned by two members of
                                     implantation.                          the Board, Drs. Shyam B. Paryani and
                                                                            John W. Wells. This lease expires on
                                                                            September 30, 2004.
------------------------------------ -------------------------------------- --------------------------------------
</TABLE>



                                       17

<PAGE>

<TABLE>
<S>                                  <C>                                    <C>
------------------------------------ -------------------------------------- --------------------------------------
FLORIDA CANCER CENTER -PALATKA       11,200 square feet, used for medical   We lease this facility from a
600 Zeagler Drive                    oncology, radiation therapy,           general partnership that is
Palatka, FL 32178                    diagnostic radiology and seed          partially owned by two members of
                                     implantation.                          the Board, Drs. Shyam B. Paryani and
                                                                            John W. Wells. This lease expires on
                                                                            October 31, 2017.
------------------------------------ -------------------------------------- --------------------------------------
FLORIDA CANCER CENTER - ST. JOHNS    7,000 square feet, used for            We lease this facility from an
300 Health Park Blvd.                radiation therapy, diagnostic          unaffiliated company. This lease
Suite 1008                           radiology and seed implantation.       expires on December 31, 2006.
St. Augustine, FL 32086
------------------------------------ -------------------------------------- --------------------------------------
FLORIDA CANCER CENTER -WELLS         3,667 square feet, used for            We lease this facility from a
COMPLEX CLINIC                       radiation therapy, diagnostic          general partnership that is
3599 University Blvd.                radiology, brachytherapy and seed      partially owned by two members of
Suite 1500                           implantation.                          the Board, Drs. Shyam B. Paryani and
Jacksonville, FL 32245                                                      John W. Wells. This lease expires on
                                                                            February 1, 2013.
------------------------------------ -------------------------------------- --------------------------------------
OPERATIONS OFFICE                    5,432 square feet, used as our         We lease this facility from an
2301 Coffee Road                     California Operations Management       unaffiliated company. This lease
Modesto, CA 95350                    Office.                                expires on October 31, 2007.
------------------------------------ -------------------------------------- --------------------------------------
RADIATION ONCOLOGY CENTER OF         13,000 square feet, used for           We own the building and lease the
BRADENTON                            radiation therapy, diagnostic          land from an unaffiliated company.
6215 21st Ave. W.                    radiology and brachytherapy.           This land lease expires on February
Suite B                                                                     28, 2007.
Bradenton, FL 34209
------------------------------------ -------------------------------------- --------------------------------------
ST. TERESA CANCER COMPREHENSIVE      6,857 square feet, used for medical    We sublease approximately half the
CENTER                               oncology, radiation therapy,           space at this facility to a medical
4722 Quail Lakes Drive               diagnostic radiology, brachytherapy    oncology group for approximately
Stockton, CA 95207                   and seed implantation.                 $4,167 per month. This lease expires
                                                                            on June 30, 2005.
------------------------------------ -------------------------------------- --------------------------------------
SONORA CANCER CENTER                 3,500 square feet, used for            We lease this facility from a
1 South Forest Road                  radiation therapy, diagnostic          corporation owned by one of our
Sonora, CA 95370                     radiology, brachytherapy and seed      shareholders, Dr. John J. Fuery. (1)
                                     implantation.
------------------------------------ -------------------------------------- --------------------------------------
SOUTHSIDE CANCER CENTER              6,400 square feet, used for medical    We lease this facility from an
5742 Booth Road                      oncology, radiation therapy,           unaffiliated company.  This lease
Jacksonville, FL 32207               diagnostic radiology and seed          expires on January 31, 2023.
                                     implantation.
------------------------------------ -------------------------------------- --------------------------------------
TURLOCK REGIONAL CANCER              2,911 square feet, used for            We lease this facility from a
CENTER                               radiation therapy and diagnostic       corporation owned by one of our
1051 East Tuolumne Road              radiology and 3,846 square feet of     shareholders, Dr. John J. Fuery.
Suite 103                            unfinished space.                      This lease expires on March 31, 2006.
Turlock, CA 95682
------------------------------------ -------------------------------------- --------------------------------------
VALLEY REGIONAL CANCER               8,100 square feet, used for            We lease this facility from an
PATIENT CARE CENTER                  radiation therapy, diagnostic          unaffiliated company. This lease
1316 Nelson Avenue                   radiology and seed implantation.       expires on July 31, 2012.
Modesto, CA 95350
------------------------------------ -------------------------------------- --------------------------------------
</TABLE>

         (1) The Company entered into a settlement agreement with Dr. John J.
Fuery, pursuant to which the Sonora lease will terminate at the earlier of (a)
the time Sonora Hospital, the master lessor, terminates the Facility Lease or
(b) anytime after June 30, 2003, at OnCure's option. See "Legal Proceedings."



                                       18
<PAGE>

         All of the above related party transactions were the result of arm's
length negotiations. We believe that each transaction was on terms fair to us
and at least as favorable to us as those available from unaffiliated third
parties.

         We believe that our centers and equipment are in good working condition
and are adequate for our needs.

         We also believe that each of our centers is adequately covered by
insurance.


ITEM 3.  LEGAL PROCEEDINGS

FUERY LITIGATION

         On October 23, 2001, the Company's wholly owned subsidiary, U.S. Cancer
Care, Inc., a Delaware corporation ("USCC"), instituted a lawsuit in the
Superior Court of the State of California for the County of Alameda against two
former directors of the Company (W. Brian Fuery and Dr. John J. Fuery) and
certain entities controlled by them (such lawsuit being referred to herein as
the "Action"). Each of the defendants in the Action filed an answer and a
cross-complaint against the Company and USCC (referred to collectively as the
"OnCure Parties").

         On February 28, 2002, the OnCure Parties entered into a settlement
agreement (the "2/28/02 Settlement Agreement") with W. Brian Fuery, and each of
the entities controlled by him, Stunner Corporation and U.S. Cancer Management
Corporation. Pursuant to the terms of the 2/28/02 Settlement Agreement, the
Company agreed to: (i) exchange its interest in the USCMC-USCC Partnership for
642,833 shares of the Company's common stock held by W. Brian Fuery, (ii) pay W.
Brian Fuery $31,120, (iii) pay $16,390 to Randall Holt (as payment of half of
the outstanding balance of an invoice), (iv) transfer title to certain furniture
and equipment to W. Brian Fuery, and (v) pay a portion of the monthly payments
for office space used by W. Brian Fuery.

         On January 24, 2003, the OnCure Parties entered into a settlement
agreement (the "1/24/03 Settlement Agreement") with Dr. John J. Fuery and an
entity controlled by him, Oncology Corporation. Pursuant to the terms of the
1/24/03 Settlement Agreement, the OnCure Parties agreed to (i) issue a
promissory note in the aggregate principal amount of $586,187 to the Oncology
Corporation (the note is unsecured and bears interest at rate of 6% per annum)
and (ii) release Dr. Fuery from his obligation not to compete with USCC under
that certain Merger Agreement by and among USCC, U.S. Cancer Care Acquisition
Corporation and US Cancer Care, Inc. (formerly a California corporation).
Pursuant to the terms of the 1/24/03 Settlement Agreement, each of Dr. Fuery and
Oncology Corporation agreed (i) to cancel and return to OnCure that certain
promissory note issued to Oncology Corporation in the aggregate principal amount
of $735,000 and (ii) not to enforce their contractual right of first refusal
under that certain lease agreement by and among Oncology Corporation and Sonora
Community Hospital (the "Lease Agreement") to lease space at the new facility
being developed by Sonora Community Hospital if OnCure decides to lease such
space from Sonora Community Hospital. In addition to the foregoing, (i) each of
the parties in the Action agreed that the sublease agreement by and among
Oncology Corporation and U.S. Cancer Care, Inc. would terminate when Sonora
Community Hospital terminates the Lease Agreement, and (ii) Dr. Fuery agreed to
(x) cancel that certain Conversion of Notes and Option to Sell Stock Agreement
by and among the Company, Dr. Fuery and Continuum Capital Partners and (y)
release Dr. Young (who is currently providing radiation oncology services at our
Sonora Cancer Center pursuant to an agreement that terminates upon 45 days prior
written notice) from his obligation not to compete with certain entities
controlled by Dr. Fuery under that certain Restated and Amended Sonora Cancer
Center Medical Partnership Agreement.

OMEGA LITIGATION

          On April 1, 2002 Omega Capital Corporation ("Omega") commenced an
action in the Law Division of the Superior Court of the State of New Jersey for
the County of Essex ("New Jersey State Court") against the Company. The
complaint alleges that the Company entered into an agreement with Omega that
required the Company to purchase 112,500 shares of the Company's Common Stock
held by Omega (the "Shares") at $2.00 per share and pay Omega ten percent (10%)
interest on a certain promissory note, if the offer and sale of the Shares were
not registered under the Securities Act of 1933, as amended, by May 1, 2001.
Omega alleges that the Company has breached the Agreement by, among other
things, not registering the Shares by May 1, 2001. Omega seeks recovery of
damages in the amount of $247,500 and attorneys' fees.



                                       19

<PAGE>

         On June 3, 2002, the Omega action was removed from New Jersey State
Court to United States District Court for the District of New Jersey ("New
Jersey Federal Court"). On June 14, 2002, the Company filed an answer which
generally denied the allegations of Omega's complaint. On October 22, 2002, the
action as transferred from New Jersey Federal Court to the Middle District of
Florida. The Company believes that it has meritorious defenses to each of the
claims asserted in the complaint and intends to vigorously defend this lawsuit.


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

         No matters were submitted to a vote of security holders during the
fourth quarter ended December 31, 2002.



                                       20
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is traded on the OTC Bulletin Board under the symbol
"ONCU." The high and low closing sale prices of our common stock, as reported by
the OTC, were as follows for the quarterly periods indicated below. The
quotations below reflect inter-dealer prices, without retail mark-up, mark-down,
or commission and may not represent actual transactions.

<TABLE>
<CAPTION>
                                                                    PRICE ($) PER SHARE
                                                               -------------------------------
FISCAL 2002                                                        HIGH               LOW
-----------                                                    -------------- ----------------
<S>                                                                <C>            <C>
First quarter                                                      $1.010         $0.460
Second quarter                                                      0.850          0.330
Third quarter                                                       0.630          0.360
Fourth quarter                                                      0.360          0.110

FISCAL 2001
-----------
First quarter                                                       2.720          0.280
Second quarter                                                      1.600          0.630
Third quarter                                                       0.900          0.150
Fourth quarter                                                      1.010          0.360
</TABLE>


NUMBER OF HOLDERS

         As of December 31, 2002, there were approximately 167 holders of record
of our common stock.

DIVIDENDS

         We have not declared or paid any cash dividends on our common stock.
The payment of cash dividends in the future will depend on our earnings,
financial condition, capital needs and other relevant factors. We do not intend
to pay dividends on our shares of common stock but intend to retain our earnings
for use in our business.

RECENT SALES OF UNREGISTERED SECURITIES

         In December 2003, certain members of the Company's Board of Directors
(i.e., Dr. Shyam Paryani, Jeffrey A. Goffman, Stanley S. Trotman, Jr., Gordon C.
Rausser, Dr. John W. Wells, Jr., and Charles J. Jacobson) purchased an aggregate
of 215 shares of Series H Cumulative Accelerating Redeemable Preferred Stock of
the Company (the "Series H Stock") for an aggregate purchase price of $430,000
in cash. Each sale was made in reliance upon an exemption from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), provided by
Section 4(2) of the Act.

         Each share of Series H Stock is convertible at any time at the option
of the holder into a number of fully paid and nonassessable shares of the
Company's Common Stock equal to the quotient of (x) $2,000 plus an amount equal
to all accrued and unpaid dividends on such share of Series H Stock being
converted divided by (y) $.75. The Certificate of Designations relating to the
Series H Stock contains customary anti-dilution protection for the shares of
Series H Stock.

         On December 23, 2002, the Company issued a convertible promissory note
in the aggregate principal amount of $500,000 to Crossbow Venture Capital
Partners, LP for an aggregate purchase price of $500,000. This transaction was
made in reliance upon an exemption from the registration requirements of the Act
provided by Section 4(2) of the Act. See "Certain Relationships and Related
Party Transactions" for a summary of the terms and conditions of the note.



                                       21

<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

INTRODUCTION

         The following discussion should be read in conjunction with the
financial statements, related notes and other financial information appearing
elsewhere in this report. In addition, see "Forward-Looking Statements."

GENERAL

         The Company has incurred net losses of approximately $1.6 million and
$7.2 million (which includes a non-recurring non-cash charge of $4.4 million to
record the impairment loss and write-down in value of certain long-lived assets)
in 2002 and 2001, respectively. As a result, the Company has undertaken certain
initiatives that it believes will increase revenues, raise cash, improve cash
flow and reduce debt obligations. The discussion below is a summary of each
initiative.

OFFERING ADVANCED TREATMENT TECHNOLOGIES TO INCREASE NET PATIENT REVENUE

         The reimbursement rates that the Company receives for procedures
performed with state-of-the-art treatment technologies, such as Intensity
Modulated Radiation Therapy ("IMRT") and 3-Dimensional Conformal Treatment
Planning (3-D Treatment Planning"), are generally higher than procedures
performed with less advanced equipment. For this reason, we invested
approximately $4.4 million in medical equipment and computer software to offer
IMRT and 3-D treatment planning services during fiscal 2002. Currently, IMRT and
3-D treatment services are being offered at our Valley Regional Cancer Center,
Wells Complex Clinic, Florida Cancer Center-Orange Park and Florida Cancer
Center-St. Johns. We also intend to offer such advanced treatment technologies
at our Radiation Oncology Center of Bradenton, Florida Cancer Center- Palatka
and Florida Cancer Center-Beaches in 2003. The Company financed the cost of its
investment in such advanced treatment technologies during 2002 by obtaining
financing from DVI Financial Services, Inc. ("DVI") and intends to obtain
financing from DVI, or another medical equipment lender, to acquire additional
advanced treatment technologies in the future.

SALE OF UNDER-PERFORMING FACILITIES

         Effective September 30, 2002, the Company sold all of its ownership
interest in its wholly-owned subsidiary Corpus Christi Acquisition, LLC ("CCA")
and recorded a gain of approximately $1.0 million on the sale. See "Certain
Relationships and Related Party Transactions." The Company sold its interest in
CCA, which operated the Company's center located in Corpus Christi, Texas,
because of CCA's history of losses. Specifically, CCA suffered losses of
$539,000 in fiscal 2001 and $274,000 for the nine months ended September 30,
2002.

 CONVERSION TO EARNINGS MODEL

         The Company has developed an "earnings model" in which the fees that
our affiliated physician groups receive are based on a center's earnings before
interest, taxes, depreciation and amortization. We believe that this fee
arrangement properly aligns our economic interests with those of our affiliated
physician groups, giving our physician groups an incentive to keep costs down
and increase revenues.

         During 2002, we embarked on a campaign to offer each of our affiliated
physicians that were not operating under the earnings model the opportunity to
terminate their existing agreements with us and enter into new arrangements
under the earnings model. Through our efforts, substantially all of our
affiliated physician groups now operate under the earnings model.

REDUCE LABOR COSTS

         Due to a labor shortage of radiation therapists and physicists, the
Company has been forced to retain locum tenens at much higher labor costs. In an
effort to reduce this operating cost, the Company launched a recruiting campaign
to replace locum tenens with permanent radiation therapists and physicists (who
generally cost less to retain). During the first



                                       22

<PAGE>

quarter of 2003, the Company has been able to reduce the number of locum tenens
it retains from 17 to 12 and anticipates that it will be able reduce this number
further during the remainder of 2003.

RENEGOTIATE FEE ARRANGEMENTS

         During 2002, the Company entered into discussions with certain third
party payors concerning reimbursement fee arrangements. As a result of these
discussions, the Company's agreement with these payors was amended to increase
the amount of fees that the Company receives. We anticipate that these new
agreements should result in increased services fees of approximately $528,000 in
2003.

ACQUISITIONS

         In May 2002, the Company acquired Positron Imaging Technologies, LLC's
20% ownership interest in JAXPET/Positech LLC ("JAXPET"). As a result of this
acquisition, the Company now owns 100% of JAXPET. JAXPET operates our mobile PET
scanning unit in Florida which recorded a profit of $349,000 in fiscal 2002.

         On January 28, 2003, the Company formed a joint venture with Ninth City
Landowners, LLP named FROG OnCure Southside, LLC (the "Venture"). On January 31,
2003, the Venture acquired certain assets of the Southside Cancer Center in
Jacksonville, Florida. The Southside Cancer Center has had a history of
profitable operations.

SALE OF PROPERTY TO RETIRE LONG TERM DEBT AND TO FUND OPERATING EXPENSES

         The Company raised approximately $2.3 million in cash through the sale
of certain properties. The Company sold and leased-back Valley Regional Cancer
Patient Care Center, Florida Cancer Center-Wells Complex Clinic and Florida
Cancer Center-Palatka. The Company also sold land located in St. Augustine,
Florida, which was not used in the Company's business. The net proceeds from the
sale of these properties were used to retire long-term debt and fund operating
expenses.

         The Company believes that the initiatives it plans to take, and the
initiatives it has taken thus far, will eventually improve the financial
performance of the Company. However, the Company cannot give any assurance that
any of the proposed initiatives will improve the financial performance of the
Company or will not have a material adverse effect on the Company in the future.

SOURCES OF REVENUE GENERALLY

         Approximately 99% of the Company's revenues consist of service fees
that the Company receives from its affiliated physician groups. Pursuant to the
service agreements that the Company has entered into with each of its affiliated
physician groups, the Company receives fees for providing clinical management,
billing and collection, data warehousing and other administrative services. As
noted above, these service fees are based upon a percentage of the earnings of
the center subject to the agreement. For this reason, the following discussion
reflects the financial performance of each of the Company's treatment centers as
well as the Company's mobile PET, CT scanners and HDR units. The following
discussion also reflects the operations of CCA (which, as noted above, was sold
by the Company effective September 30, 2002).



YEAR ENDED DECEMBER 31, 2002 AS COMPARED TO YEAR ENDED DECEMBER 31, 2001

REVENUES

         Revenue for fiscal 2002 totaled $25.6 million, an increase of $2.9
million (or 12.7%) as compared to fiscal 2001. This increase is attributable to
growth in net patient revenue in the amount of: (i) $1.7 million from our mobile
PET scanner in Florida and (ii) $1.3 million from our Florida treatment centers.
Net patient revenue from our California treatment centers declined by $250,000
due principally to a decrease in the number of treatments performed at these
centers.



                                       23

<PAGE>

OPERATING EXPENSES

         Operating expenses totaled $25.3 million for fiscal 2002, as compared
to $26.0 million in 2001. Excluding a $2.9 million impairment loss incurred in
2001, operating expenses increased by $2.2 million (or 9.6%). The Company's
operating expenses consist primarily of: (i) salary and benefits; (ii) medical
supplies and services; (iii) general and administrative expenses; and (iv)
depreciation and amortization. Set forth on the chart below is the percentage of
the Company's revenues consumed by each of its operating expenses.

<TABLE>
<CAPTION>
---------------------------------------------- ----------------------------------- -----------------------------------
EXPENSE                                        PERCENTAGE OF 2002 REVENUES         PERCENTAGE OF 2001 REVENUES
-------                                        ---------------------------         ---------------------------
---------------------------------------------- ----------------------------------- -----------------------------------
<S>                                            <C>                                 <C>
1.  Salary and Benefits                                       29%                                 28%
---------------------------------------------- ----------------------------------- -----------------------------------
2.  Medical Supplies and Services                             23%                                 23%
---------------------------------------------- ----------------------------------- -----------------------------------
3.  General and Administrative Expense                        38%                                 36%
---------------------------------------------- ----------------------------------- -----------------------------------
4.  Depreciation and Amortization                              9%                                 14%
---------------------------------------------- ----------------------------------- -----------------------------------
</TABLE>


         Expenses for salaries and benefits totaled $7.4 million for fiscal
2002, an increase of $1.1 million (or 16.6%) as compared to fiscal 2001. At our
Florida treatment centers, expenses for salaries and benefits increased by
$757,000 due to the cost of employing additional professional staff to
compensate for the growth of patient volume at these centers. At our California
treatment centers, expenses for salaries and benefits increased by $114,000 due
to the cost of replacing temporary professional staff (temporary staffing costs
are recorded as general and administrative expense) with permanent employees. In
addition, expenses for salaries and benefits increased in fiscal 2002 due to the
payment of severance benefits in the amount of $124,000 to certain employees of
the Company that were terminated as result of the relocation of the Company's
headquarters from Oakdale, California to Newport Beach, California.

         Expenses for medical supplies and services totaled $5.8 million for
fiscal 2002, an increase of $460,000 (or 8.6%) as compared to fiscal 2001. This
increase is attributable to: (i) increased medical service fees (which includes
amounts retained by our affiliated physician groups under medical services
agreements) in the amount of $188,000 due to growth in our net patient revenue,
and (ii) increased expenses in the amount of $307,000 for medical supplies for
our mobile PET scanner due to an increase in the number of scans performed.

         General and administrative expenses totaled $9.9 million for fiscal
2002, an increase of $1.6 million (or 19.0%) as compared to fiscal 2001. The
cost for temporary professional staff increased by $739,000 due to two factors:
(i) the increase in average daily treatments which required the employment of
additional professional staff; and (ii) the shortage of therapists and
physicists which required the use of temporary employees rather than permanent
employees. In addition, the increase is attributable to an increase in operating
expenses at all facilities for rent of $114,000, for insurance of $232,000, and
for repairs and maintenance of $138,000. Legal and accounting fees decreased by
$106,000 in fiscal 2002, primarily due to the costs incurred in 2001 to register
the offer and sale of securities held be certain investors. In September 2002,
the Company recorded a reserve for uncollectible accounts receivable of $488,000
for services performed in 2001.

         Operating expenses for depreciation and amortization totaled $2.3
million for fiscal 2002, a decrease of $823,000 (or 26.6%) as compared to fiscal
2001. The decrease is due to: (i) goodwill amortization recorded by the Company
in the amount of $953,000 in fiscal 2001 prior to the Company's adoption of
Statement of Financial Accounting Standards ("FAS") No. 142 (which does not
require the write-down of goodwill unless it has been determined that goodwill
has been impaired) and (ii) depreciation adjustments (principally to record
depreciation for leasehold improvements over the remaining life of the lease)
recorded by the Company in the amount of $442,000 in fiscal 2001. The Company
purchased $2.7 million of new equipment in fiscal 2001 and $4.8 million of new
equipment in fiscal 2002, which increased depreciation expense by $566,000 for
fiscal 2002.

         In 2001, the Company incurred a significant charge against earnings in
connection with the impairment of certain long-lived assets (i.e., our center
and property in Corpus Christi, Texas), goodwill related to such assets and
software



                                       24

<PAGE>

development costs. In accordance with FAS No. 121, the Company examined the
future net cash flows of the Corpus Christi assets and determined that they were
less than the carrying amount (i.e., the cost of an asset minus any accumulated
depreciation or amortization) of such assets. As required by FAS No. 121, the
Company recognized an impairment loss of $2.7 million. The impairment loss
consisted of a write-off of $2.3 million in goodwill, net of accumulated
amortization, recorded upon acquisition of the center and a write-down of
$422,000 of the carrying value of the center's land and building. The impairment
loss also includes the write-off of unamortized software development costs of
$217,000. The Company ceased using the software in the third quarter of 2001.

INCOME/LOSS FROM OPERATIONS

         Income from operations totaled $281,000 for fiscal 2002 as compared to
a loss of $3.3 million for fiscal 2001. The Company recorded an increase in
revenue of $2.9 million while comparable operating expenses for 2002, excluding
adjustments, increased by $2.2 million. The Company's operating expenses for
2002 benefited from the change in recording goodwill amortization, which reduced
operating expenses by $953,000. Operating expenses in 2002 were increased by the
recording of a reserve for uncollectible accounts receivable of $488,000. The
loss in 2001 included the recording of a $2.9 million charge for impairment of
certain long-lived assets.

OTHER INCOME/EXPENSE

         Net other expenses totaled $1.7 million for fiscal 2002, as compared to
$3.6 million for fiscal 2001. Net other expenses are comprised of interest
expense, gain/loss on the sale of assets and other income and expenses.

         Interest expense for fiscal 2002 totaled $2.6 million, an increase of
$156,000 (or 6.3%) as compared to fiscal 2001. This increase is primarily
attributable to: (i) an increase in short-term interest bearing debt and (ii)
interest expense in the amount of $288,000 recorded for amortization of the
original issue discount assigned to a warrant issued by the Company. The
interest expense assigned to the warrant was a non-cash charge.

         In 2002, the Company recorded a gain of $1.5 million on the sale of
certain assets. The gain included the sale of the following assets: (i) Corpus
Christi Acquisition, LLC, which was sold to Dolphin Medical, Inc. for a gain of
$1.0 million, (ii) Valley Regional Cancer Center, which was sold and leased-back
for a gain of $200,000, and (iii) land no longer used by the Company located in
St. Augustine, Florida for a gain of $220,000. In 2001, the Company recorded a
loss of $620,000 on the disposal of certain equipment, which had been held in
storage and deemed to have no useable value in the Company's business or any
recoverable value from sale to a third party.

         In 2002, the Company wrote-off acquisition related expenses of $673,000
related to the failed acquisition of Coastal Radiation Medical Oncology Group.
The Company also recorded a gain in 2002 of $136,000 in connection with the
settlement agreement it entered into with Dr. John J. Fuery and Oncology
Corporation (a company controlled by Dr. Fuery). In 2001, the Company incurred a
loss of $383,000 in connection with the settlement agreement it entered into
with W. Brian Fuery and each of the entities controlled by him, Stunner
Corporation and U.S. Cancer Management Corporation.

INCOME TAX

         The Company has significant net operating loss carryforwards. Certain
net operating losses are subject to maximum annual utilization of approximately
$181,000. A valuation allowance has been established for the net operating loss
carryforward asset ("NOL carryforward"). The utilization of the NOL carryforward
is uncertain due to the Company's current and expected results of operations and
the Company's annual use limitation on portions of the NOL carryforward. Due to
the NOL carryforward and corresponding valuation allowance, no income tax
expense/benefit has been recognized for fiscal 2002. The Company recorded an
income tax benefit of $291,000 in fiscal 2001.

NET LOSS

         The Company recorded a net loss of $1.6 million for fiscal 2002, as
compared to a net loss of $7.2 million for fiscal 2001. The decrease in the
amount of the net loss is principally due to the following non-operating items:
(i) gain on the sale of assets in 2002 totaling $1.5 million, (ii) a reserve of
$488,000 in 2002 for uncollectible receivables billed in 2001, (iii) a charge of
$2.7 million in 2001 for the impairment of long-lived assets, (iv)
discontinuance of goodwill



                                       25

<PAGE>

amortization, which reduced operating expenses by $953,000 in 2002, (v) a loss
of $620,000 in connection with the disposal of certain assets during fiscal
2001, and (vi) the write-down and write-off of certain assets (principally
computer software, leasehold improvements, and capitalized loan fees) in the
amount of $684,000 in 2001.

NET LOSS ATTRIBUTABLE TO HOLDERS OF THE COMPANY'S COMMON STOCK

         The net loss attributable to the holders of our common stock amounted
to $2.8 million or $.29 per common share for fiscal 2002. This loss reflects an
additional $1.2 million charge resulting from accrued cumulative preferred stock
dividends of $862,500 and cash dividends in the amount of $300,000 paid in
fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

         We had $88,000 of cash and cash equivalents on hand at December 31,
2002, a $75,000 increase compared to December 31, 2001.

         As of December 31, 2002, we had a working capital deficit of $9.6
million, compared to a deficit of $5.8 million at December 31, 2001. This
increase was attributed to: (i) our accounts receivable decreasing by $1.9
million, (ii) our lines of credit increasing by $479,000, (iii) our long-term
debt increasing by $660,000 and (iv) our issuance of notes in the aggregate
principal amount of $1.5 million. Our accounts receivable decreased due to the
collection of aged receivables, use of electronic billing and new payment terms
negotiated with certain payors. Our lines of credit, and the current portion of
our long-term debt, increased due to the financing requirements of our
operations and our purchase of new medical equipment.

CASH FLOW FROM OPERATING ACTIVITIES

         Our operating activities provided $641,000 in cash in fiscal 2002 as
compared to $1.2 million in fiscal 2001. The decrease in cash flow from
operations was primarily due to a decrease in the net change in assets and
liabilities of $348,000. The increase in accounts payable of $1.4 million was
partially offset by a decrease in accounts receivable of $1.1 million. The net
results from operations in fiscal 2002, after adjustment for depreciation and
other non-recurring adjustments, decreased by $210,000 as compared to fiscal
2001. Revenue in 2002 increased by $2.9 million compared to the prior fiscal
year while costs of operations increased by $3.1 million (excluding the
impairment loss and goodwill amortization in 2001).

         The amount of cash provided by our operating activities during fiscal
2002 was not sufficient to meet the cash requirements of the Company during this
period. Specifically, we did not have sufficient cash to pay: (i) term debt
obligations in the amount of $2.8 million (the Company's total term debt
obligations in 2002 were $6.4 million), (ii) $545,000, including accrued
interest of $30,000, to certain stockholders of the Company that exercised their
right to require the Company to purchase their shares of the Company's common
stock for $2.00 per share, (iii) accrued dividends in the amount of $300,000 on
shares of our preferred stock, or (iv) pay expenses related to acquisitions in
the amount of $673,000.

         To satisfy the foregoing obligations, the Company raised approximately
$4.2 million through the: (i) sale of certain properties for approximately $2.3
million (See "Sale of Property to Retire Long Term Debt and to Fund Operating
Expenses" under this Item 6), (ii) issuance of a convertible promissory note
(with detachable common stock warrants) in the aggregate principal amount of
$1.0 million, (iii) issuance of a convertible promissory note in the aggregate
principal amount of $500,000, and (iv) the issuance of 215 shares of the
Company's Series H Stock (having a liquidation preference of $430,000). In
addition, we increased our short-term borrowings to provide an additional
$844,000 of cash.

         During 2002, we expended $4.7 million on capital expenditures which
were financed through proceeds from long-term debt. Cash resources, including
restricted cash of $1.0 million, were utilized during 2002 for the repayment of
long-term debt totaling $5.0 million.

         Our expected cash needs on both a short and long-term basis are for
working capital, term debt reductions, capital expenditures, acquisitions and
other general purposes. In 2003, we anticipate that the cash from our operations
will not be sufficient to fund these obligations. The Company intends to secure
the additional cash necessary to fund our operating and investing needs through
the private issuance of equity and debt instruments. There is no assurance that
such additional



                                       26
<PAGE>

funding will be available on satisfactory terms, if at all. If
adequate funds are not available, we may be required to delay, scale back or
eliminate certain capital expenditures or strategic acquisitions. Accordingly,
the inability to obtain needed financing could adversely affect our business,
financial condition, and results of operations.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

         As of December 31, 2002, the Company's future contractual obligations
are as follows:

<TABLE>
<CAPTION>
                                                         ---------------------------------------------------------------
                                                                          Payments Due by Period
------------------------------------------- ------------ ----------------- ------------- ------------ ------------------
Contractual Obligations                        Total     Less than 1 yr.   2-3 years     4-5 years    After 5 years
------------------------------------------- ------------ ----------------- ------------- ------------ ------------------
<S>                                         <C>          <C>               <C>           <C>          <C>
Long Term Debt-Notes Payable (1)            $15,071,408      $4,264,256     $6,125,731    $3,601,989      $1,079,432
Convertible Notes Payable (2)                 1,500,000       1,500,000
Operating Leases (3)                          8,584,587       1,629,974      2,941,354     1,690,076       2,323,183
Securities with Put Options (4)                  49,576          49,576
Other Long-Term Obligations(5)                1,103,000         456,000        647,000
                                            ------------ ----------------- ------------- ------------ ------------------
Total Contractual Obligations               $26,308,571      $7,899,806     $9,714,085    $5,292,065      $3,402,615
                                            ============ ================= ============= ============ ==================
</TABLE>


         (1)  At December 31, 2002, the Company had thirty-eight long-term notes
              payable totaling approximately $11.6 million to DVI Financial
              Services, Inc. and approximately $2.8 million in notes payable
              with other equipment financing companies. Substantially all of the
              receivables, equipment and certain tangible assets of the Company
              collateralize the notes payable. Interest is charged at rates that
              range from 8.1% to 15.0% and the notes mature through 2009.

         (2)  The Company issued convertible notes payable to Crossbow Venture
              Capital in the principal amount of $1.0 million and $500,000 on
              May 15, 2002 and December 23, 2002, respectively. Each note bears
              interest at the rate of 8% per annum, matures on May 15, 2003 and
              is unsecured. The May note is convertible into 500 shares of the
              Company's Series H Stock. The December note is convertible into
              250 shares of the Company's Series H Stock or, at the option of
              Crossbow, such other series of preferred stock that may be issued
              by the Company prior to the maturity date of the December note.

         (3)  The Company leases certain facilities under various operating
              lease that expire through 2007. Certain real estate leases have
              options to renew for periods from 3-15 years.

         (4)  Certain of our stockholders have the right to require us to
              purchase an aggregate of 24,788 shares of common shares at $2.00
              per share.

         (5)  The Company has entered into an employment agreement with Jeffrey
              A. Goffman, Chief Executive Officer, and Richard A. Baker, Chief
              Financial Officer, which expire on May 22, 2005 and April 1, 2005,
              respectively. As of December 31, 2002, the Company is required to
              provide minimum base salaries and bonuses over the agreement term,
              including minimum annual increases. The employment agreement may
              be terminated by the Company without cause subject to a severance
              payment. See "Executive Compensation."


     As of December 31, 2002, the Company's future commercial commitments are as
follows:

<TABLE>
<CAPTION>
                                                              ----------------------------------------------------------
                                                                      Amount of Commitment Expiration per Period
------------------------------------------- ----------------- ---------------- ------------ ------------- --------------
Commercial Commitments                           Total        Less than 1 yr.  2-3 years    4-5 years     After 5 years
------------------------------------------- ----------------- ---------------- ------------ ------------- --------------
<S>                                         <C>               <C>              <C>          <C>           <C>
Lines of Credit (1)                           $4,419,930        $4,419,930
Standby Letter of Credit (2)                     427,000           427,000
                                            ----------------- ---------------- ------------ ------------- --------------
Total Commercial Commitments                  $4,846,930        $4,846,930
                                            ================= ================ ============ ============= ==============
</TABLE>

         (1)  The Company has entered into two separate loan and security
              agreements with DVI Financial Services, Inc., the beneficial owner
              of more than 5% of our voting securities, pursuant to which DVI
              provides the Company



                                       27

<PAGE>

              with revolving lines of credit. The maximum amount available under
              this credit facility is $4.8 million, with advances limited to
              eighty-five percent (85%) of eligible account receivables.
              Borrowings under the line of credit bear interest at a rate that
              ranges between 2.0% to 2.25% over the prime lending rate. On
              December 27, 2001, the Company and DVI agreed to amendments to the
              loan and security agreements, which extend the maturity dates for
              the lines of credit to June 2004. Our obligations under the credit
              facility are collateralized through a grant of a first security
              interest in the accounts receivable of several of our treatment
              centers. Our agreement with DVI Financial Services, Inc. contains
              customary affirmative and negative covenants. Borrowings under
              this credit facility are used to fund working capital needs and to
              fund the development of new centers. At December 31, 2002, we had
              approximately $4.4 million of borrowings under this credit
              facility.

              The Company was not in compliance with the certain covenant
              provisions of the credit agreement (current ratio and debt
              coverage ratios) in the third and fourth quarters of 2002. DVI
              granted the Company a waiver for the covenant provisions in both
              quarters. The Company and DVI are discussing modifying the
              covenant provisions to better reflect the Company's current and
              expected operating performance. However, the Company cannot give
              any assurance that it will reach agreement with DVI on terms
              acceptable to the Company.

         (2)  Marcap Corporation is the beneficiary of a standby letter of
              credit in the amount of $400,000 as collateral for a note payable.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

         The Company's consolidated financial statements are prepared in
accordance with generally accepted accounting principles and follow general
practices within the industries in which it operates. Application of these
principles requires management to make estimates, assumptions, and judgments
that affect the amounts reported in the financial statements and accompanying
notes. These estimates, assumptions, and judgments are based on information
available as of the date of the financial statements; accordingly, as this
information changes, the financial statements could reflect different estimates,
assumptions, and judgments. Certain policies inherently have a greater reliance
on the use of estimates, assumptions, and judgments and as such have a greater
possibility of producing results that could be materially different than
originally reported. Estimates, assumptions, and judgments are necessary when
assets and liabilities are required to be recorded at fair value, when a decline
in the value of an asset not carried on the financial statements at fair value
warrants an impairment write-down or valuation reserve to be established, or
when an asset or liability needs to be recorded contingent upon a future event.
Carrying assets and liabilities at fair value inherently results in more
financial statement volatility. The fair values and the information used to
record valuation adjustments for certain assets and liabilities are based either
on quoted market prices or are provided by other third-party sources, when
available. When third-party information is not available, valuation adjustments
are estimated in good faith by management primarily through the use of internal
cash flow modeling techniques.

         The most significant accounting policies followed by the Corporation
are presented in Note 2 to the Consolidated Financial Statements. These
policies, along with the disclosures presented in the other financial statement
notes and in this financial review, provide information on how significant
assets and liabilities are valued in the financial statements and how those
values are determined. The following are our critical accounting policies:

REVENUE RECOGNITION AND PROVISIONS FOR UNCOLLECTIBLE ACCOUNTS

         Revenues are recognized as services are provided to patients. Operating
revenues consist primarily of reimbursement for diagnostic and treatment
programs provided to cancer patients. A usual and customary fee schedule is
maintained for our diagnostic and treatment services; however, actual
collectible revenue is normally at a discount to the fee schedule. Most payors,
including managed care payors, are billed at our usual and customary rates, but
a contractual allowance is recorded to adjust to the expected net realizable
revenue for services provided. Contractual allowances along with provisions for
uncollecible accounts are estimated based upon credit risks of third-party
payors, contractual terms, collection processes, regulatory compliance issues
and historical collection experience. Net revenue recognition and allowances for
uncollectible billings require the use of estimates of the amounts that will
actually be realized considering, among other items, retroactive adjustments
that may be associated with regulatory reviews, audits, billing reviews and
other matters.



                                       28
<PAGE>

LONG-LIVED ASSETS, INCLUDING INTANGIBLES SUBJECT TO AMORTIZATION

         Depreciation and amortization of our long-lived assets is provided
using a straight-line method over their estimated useful lives. Changes in
circumstances such as the passage of new laws or changes in regulations and
technological advances could result in the actual useful lives differing from
initial estimates. In those cases where the Company determines that the useful
life of a long-lived asset should be revised, the Company will depreciate the
net book value in excess of the estimated residual value over its revised
remaining useful life.

         Long-lived assets and asset groups are evaluated for impairment
whenever events or changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. The estimated future cash flows are based
upon, among other things, assumptions about expected future operating
performance and may differ from actual cash flows. Long-lived assets evaluated
for impairment are grouped with other assets to the lowest level for which
identifiable cash flows are largely independent of the cash flows of other
groups of assets and liabilities. If the sum of the projected undiscounted cash
flows (excluding interest) is less than the carrying value of the assets, the
assets will be written down to the estimated fair value in the period in which
the determination is made.

GOODWILL AND OTHER INTANGIBLE ASSETS

         Effective January 1, 2002, we adopted the provisions of SFAS No. 142,
"Goodwill and Other Intangible Assets," and determined that our consolidated
business entity to be the reporting unit. See Note 5 to our Consolidated
Financial Statements regarding our adoption of SFAS No. 142.

         Beginning January 1, 2002, goodwill and indefinite life intangible
assets are tested annually for impairment or more frequently if events or
changes in circumstances indicate that the assets might be impaired. In
assessing the recoverability of goodwill and indefinite life intangible assets,
we must make assumptions about the estimated future cash flows and other factors
to determine the fair value of these assets.

         Assumptions about future revenue and cash flows require significant
judgment because of the fluctuation of actual revenue and the timing of
expenses. We develop future revenue estimates based on projected numbers of
patients treated and the corresponding reimbursement fees, planned timing of new
capital investments, and the benefits or costs of planned business initiatives.
Estimates of future cash flows assume that expenses will grow at rates
consistent with revenue changes and historical costs. If the expected cash flows
are not realized, impairment losses may be recorded in the future.

         The goodwill impairment evaluation includes a comparison of the
carrying value of the Company (including goodwill) to its fair value. If the
estimated fair value of the Company exceeds its carrying value, no impairment of
goodwill exists. If the fair value of the Company does not exceed its carrying
value, then an additional analysis is performed to allocate the fair value of
the Company to all of its assets and liabilities. If the excess of the fair
value of the Company's identifiable assets and liabilities is less than the
carrying value of its goodwill, an impairment charge is recorded for the
difference.

RECENT ACCOUNTING PRONOUNCEMENTS

         Statement of Financial Accounting Standards (SFAS) No. 142 Goodwill and
Other Intangible Assets became effective in 2002. Under SFAS No. 142, beginning
in 2002 goodwill is no longer amortized, but is required to be assessed for
possible valuation impairment as circumstances warrant and at least annually. An
impairment charge must be recorded against current earnings to the extent that
the book value of goodwill exceeds its fair value. In conjunction with the
implementation of SFAS No. 142, we have completed a goodwill impairment review
as of the beginning of fiscal 2003 using a fair-value based approach in
accordance with provisions of that standard and found no impairment. Application
of the goodwill non-amortization provisions resulted in a decrease in
amortization of approximately $953,000 for fiscal 2002.

         SFAS No. 144 Accounting for the Impairment or Disposal of Long-Lived
Assets became effective in 2002. SFAS No. 144 superceded SFAS No. 121 Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. SFAS No. 144 allows different approaches in cash flow estimation, and
extends discontinued operations treatment, previously applied only to operating
segments, to more discrete business components. The impairment model



                                       29
<PAGE>

under SFAS No. 144 is otherwise largely unchanged from SFAS No. 121, and
adoption of this standard did not have a material effect on our financial
statements.

         SFAS No. 145, Recission of FASB Statements No. 4, 44 and 64, Amendment
of FASB Statement No. 13, and Technical Corrections. This Statement rescinds
FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt,
and an amendment of that Statement, FASB Statement No. 64, Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements. This Statement also rescinds
FASB Statement No. 44, Accounting for Intangible Assets of Motor Carriers. This
Statement amends FASB Statement No. 13, Accounting for Leases, to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. This Statement also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. The Company implemented this statement effective April 1, 2002.
Implementation of this statement did not result in a material impact on its
financial position or results of operations.

         SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, addresses financial accounting and reporting for the treatment of
costs associated with exit or disposal activities. This Statement improves
financial reporting by requiring that a liability for a cost associated with an
exit or disposal activity be recognized and measured initially at fair value
only when the liability is incurred. This Statement replaces EITF Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity. The provisions of this Statement are to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
The Company does not expect the Statement will result in a material impact on
its financial position or results of operations.

         SFAS No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure on amendment of FASB Statement No. 123. This Statement amends FASB
No. 123, to provide alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
In addition, it amends the disclosure requirements of Statement 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. As of December 31, 2002, the Company has
adopted the disclosure requirements of the Statement and continues to follow the
intrinsic value method to account for stock-based employee compensation.


ADDITIONAL INFORMATION

         For additional information on our significant accounting policies,
please see Note 2 to Notes to the Consolidated Financial Statements.



OTHER FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

OUR OPERATING RESULTS ARE SUBJECT TO SEASONAL FLUCUATIONS

         Due to seasonal variations in population, a significant portion of the
Company's treatment centers, particularly those in the state of Florida, are
subject to seasonal fluctuations. Population levels increase during the winter
months in these locations and the demand for radiation therapy during these
months also increases. As a result, we have historically experienced, and expect
to continue to experience, quarterly fluctuations in net service revenues and
net income, with higher amounts in the first and fourth quarters. We have a high
level of fixed operating costs, which cannot be reduced at times of lower
demand. Fluctuations in seasonal demand for radiation therapy may, therefore,
affect our quarterly results. In addition, results for a given period may be
affected by expenses associated with the opening or acquisition of additional
centers in that or prior periods. Results of operations for any quarter are not
necessarily indicative of results of operations for any future period or for a
full year.



                                       30
<PAGE>

WE ARE SUBJECT TO HEALTH CARE REGULATIONS

         Recent statutory changes affecting the Medicare and Medicaid programs,
including provisions enacted as part of the Balanced Budget Act of 1997 that are
intended to reduce overall Medicare and Medicaid expenditures and that permit
states greater flexibility in the administration of their Medicaid programs, may
affect our anticipated performance.

REDUCTIONS IN THIRD PARTY REIMBURSEMENT MAY ADVERSELY AFFECT OUR NET REVENUES
AND NET INCOME

         Health care providers typically bill various third party payors, such
as governmental programs (e.g., Medicare and Medicaid), private insurance plans
and managed care plans, for the health care services provided to their patients.
These third party payors are increasingly negotiating the prices charged for
medical services, pharmaceuticals and other supplies, with the goal of lowering
reimbursement and utilization rates. Third-party payors can also deny
reimbursement for medical services, pharmaceuticals and other supplies if they
determine that a treatment was not performed in accordance with treatment
protocols established by such payors or for other reasons. Changes in
reimbursement policies of third-party payors, particularly to the extent that
any such changes affect reimbursement for radiation therapy services, will
affect our net revenues and net income.

         In addition, rates paid by non-governmental insurers, including those
which provide Medicare supplemental insurance, are based on established
physician radiation therapy and hospital charges, and are generally higher than
Medicare payment rates. Any decrease in the number of our patients covered by
private insurance will affect our net revenues and net income.



ITEM 7.  FINANCIAL STATEMENTS

         The following consolidated financial statements of the Company and its
subsidiaries are filed on the pages listed below, as part of Part II, Item 7.

<TABLE>
<S>                                                                                           <C>
         Report of Independent Auditors                                                       F-1

         Consolidated Balance Sheet as of December 31, 2002 and 2001                          F-2 - F-3

         Consolidated Statements of Operations for the years ended
         December 31, 2002 and 2001                                                           F-4

         Consolidated Statements of Stockholders' Equity for the years ended
         December 31, 2002, and 2001                                                          F-5

         Consolidated Statements of Cash Flows for the years ended
         December 31, 2002 and 2001                                                           F-6 - F-8

         Notes to Consolidated Financial Statements                                           F-9 - F-32
</TABLE>



ITEM 8.       CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE.

         None.



                                       31
<PAGE>



                                    PART III

ITEM 9.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth certain information regarding the Company's
executive officers and directors:

<TABLE>
<CAPTION>
NAME                                        AGE       POSITION
----                                        ---       --------
<S>                                         <C>       <C>
Shyam B. Paryani, MD                        47        Chairman of the Board of Directors

Jeffrey A. Goffman                          44        President, Chief Executive Officer, Secretary and Director

Richard A. Baker                            52        Senior Vice President and Chief Financial Officer

Charles J. Jacobson                         63        Director

Matthew W. Shaw                             34        Director

Stanley S. Trotman, Jr.                     56        Director

Gordon C. Rausser, Ph.D.                    57        Director

John H. Zeeman                              74        Director

John W. Wells, Jr., M.D.                    48        Director
</TABLE>

SHYAM B. PARYANI, MD., MS, MHA, FACRO, Dr. Paryani has served as Chairman of the
Board of Directors of the Company since January 2001 and a member of the Board
of Directors since October 1998. Dr. Paryani also serves as the Chairman of the
Medical Advisory Board of the Company. Dr. Paryani is Board-Certified in
radiation oncology and currently is the Director of the Florida Radiation
Oncology Group. Dr. Paryani received his undergraduate and medical degrees from
the University of Florida, Gainesville. He received his radiation oncology
training at Stanford University. Dr. Paryani also serves on the Board of
Directors of the Baptist Health Foundation, Bolles School Board of Trustees,
University of North Florida's Dean's Council, and the Cancer Control & Research
Advisory Council for the State of Florida.

JEFFREY A. GOFFMAN. Mr. Goffman serves as the Company's President, Chief
Executive Officer and Secretary. He has been a member of the Board of Directors
of the Company since May 1998. Mr. Goffman was the founder of U.S. Diagnostic,
Inc. ("USD"), a leading provider and consolidator of outpatient diagnostic
imaging facilities. From its inception in June 1993 until 1997, Mr. Goffman
served as USD's Chairman and Chief Executive Officer. In 1988 Mr. Goffman
founded Goffman and Associates, Certified Public Accountants, PC, an accounting
firm in New York, and remained a partner at this firm until 1994 (from 1988 to
1992 Mr. Goffman was the managing partner of Goffman and Associates). Mr.
Goffman is an inactive Certified Public Accountant licensed in New York and
Florida and holds a Bachelor of Science degree in Accounting from the University
of Hartford. Mr. Goffman is a member of the American Institute of Certified
Public Accountants. Mr. Goffman also serves on the Board of Directors of
Affiliated PET Systems, LLC, a private company that provides Positron Emission
Tomography services in the Washington D.C. area.

According to the SEC, during Mr. Goffman's tenure as Chief Executive Officer of
USD, the company, relying upon advice of counsel, allegedly failed to disclose
the background of a consultant to the company. In December 2000, USD and Mr.
Goffman, without admitting or denying the allegations, settled this matter with
the SEC by agreeing to a consent order pursuant to Section 8A of the Securities
Act and 21C of the Exchange Act in which each agreed to cease and desist from
committing or causing any violation and any future violation of Section 17(a)(2)
and (a)(3) of the Securities Act and from causing any violation and any future
violation of Sections 13(a) and 14(a) of the Exchange Act.

RICHARD A. BAKER. Mr. Baker is the Senior Vice President and Chief Financial
Officer of the Company. Mr. Baker has over 20 years of experience with public
and private companies, SEC reporting and investor relations, merger and
acquisition transactions, strategic planning and financial management. Prior to
joining us in May 2001, Mr. Baker served as the Chief Financial Officer of
Strategy Associates, Inc. (from May 2000 to May 2001) and the Chief Operating
Officer of International EZ-UP, Inc. (from March 1999 to January 2000). From
July 1995 to August 1998, Mr. Baker held positions as the Executive Vice
President-Administration and Executive Vice President-Operations of Tri-Valley
Growers, Inc., where he led strategic initiatives that improved operating and
financial performance. Tri-Valley Growers, Inc. was forced into bankruptcy by
its creditors in July 2000. Mr. Baker holds a Bachelor of Science degree in
Accounting and



                                       32

<PAGE>

Business Management from Tri-State University. He earned his CPA license in
Indiana in 1978 and is a member of the National Investor Relations Institute.

CHARLES J. JACOBSON. Mr. Jacobson has been a member of the Board of Directors of
the Company since May 1998. He is Chairman of the Compensation Committee and
also a member of the Company's Audit Committee. Since 1983, Mr. Jacobson has
been the Chairman and Chief Executive Officer of Jacobson Consulting, Inc., a
diversified healthcare consulting firm. From 1980 to 1983, Mr. Jacobson served
on the development team of CIGNA Healthcare in the state of Florida. From 1972
to 1980, Mr. Jacobson was the Director of New Business Development for Hospital
Affiliates, Inc. Mr. Jacobson has served on the Board of Directors of St. John's
River Rural Health Network and Provider Network Management Corporation, both of
which are management service organizations serving physician groups in the
southeastern United States. Mr. Jacobson currently serves on the board of
directors of Diversified Therapy Corporation, a national network of clinical
wound care centers, Pricare Management Services Corporation, a physician
management company, and Chiro Alliance Corp., a Florida based chiropractic
management company. In 1991 Jacobson Consulting and The Stellar Group, an
international design build company formed Stellar Health to design and develop
medical facilities. Mr. Jacobson serves as corporate vice president of the
Stellar Health division. Mr. Jacobson holds a Bachelor of Science degree from
Christian Brothers University and an MBA from De Paul University, Graduate
School of Business.

MATTHEW W. SHAW. Mr. Shaw has been a member of the Board of Directors of the
Company since January 2003. Mr. Shaw began his career with Deloitte & Touche in
1992, providing financial advisory services to clients across multiple
industries and later moved to venture capital with Prime New Ventures in 1998.
Mr. Shaw helped Prime successfully invest a $100 million fund. In 2000, Mr. Shaw
left Prime to help open the Austin office for Centennial Ventures, a venture
capital firm with over $1.0 billion under management. In 2002, Mr. Shaw became a
principal with Crossbow Ventures, a $160 million venture capital firm located in
his home state of Florida. At Crossbow, Mr. Shaw targets his investment
activities in the communications, services, and outsourcing industries. He is
active on the board of a number of Crossbow's portfolio companies. He received a
Masters of Business Administration from the Harvard Graduate School of Business
in 1998, and a Bachelor of Business Administration, Cum Laude, from the
University of Miami in 1992.


STANLEY S. TROTMAN, JR. Mr. Trotman has been a member of the Board of Directors
of the Company since May 1998 and serves on the Company's Audit and Compensation
Committees. Mr. Trotman also serves on the Board of Directors of American Shared
Hospital Services, Inc. (a public company that provides Gamma Knife stereotactic
radiosurgery). Mr. Trotman retired in December 2000 as the Managing Director of
the healthcare group at Paine Webber Inc. (an investment banking firm). Mr.
Trotman had been with PainWebber since 1995, following the consolidation of
Kidder Peabody & Company (also an investment banking firm) with PainWebber. From
April 1990 to March 1995, Mr. Trotman was co-director of Kidder Peabody &
Company's healthcare group. Prior to his tenure with Kidder Peabody & Company,
Mr. Trotman had been with Drexel Burnham Lambert, Inc. for approximately 22
years. During his tenure at Drexel Burnham Lambert, Mr. Trotman served as the
head of their healthcare group. Mr. Trotman received his undergraduate degree
from Yale University in 1965 and in 1967 received his Masters from Columbia
Business School.


GORDON C. RAUSSER, Ph.D. Dr. Rausser has been a member of the Board of Directors
of the Company since May 1998 and serves on the Company's Compensation
Committee. For more than nine years, Dr. Rausser was a principal and director at
the Law and Economics Consulting Group, Inc., an economics consulting group that
provides consulting and litigation support services primarily to Fortune 500
companies. He is Chairman of the Board of Directors of TriColor Line, Inc., a
commercial real estate and export/import company with offices in San Francisco,
London and Prague. From 1994 to 2000, Dr. Rausser served as Dean of the College
of Natural Resources at the University of California, Berkeley and since 1986 as
a Robert Gordon Sproul Distinguished Professor. He has won seventeen national
awards for his innovative economic research and strategy analysis. He has also
served as Chairman of the Department of Agriculture Resource Economics at the
University of California at Berkeley (from 1979 to 1985 and, again, from 1992 to
1994). Dr. Rausser, while on leave from the University of California, Berkeley,
served as the Senior Economist on the Council of Economic Advisors (1986-1987)
and as Chief Economist of the Agency for International Development. Dr. Rausser
also serves as a Senior Consultant at Charles River Associates, Inc., an
economic and financial consulting firm. Dr. Rausser has a Bachelor of Science
degree from California State University, Fresno, and a Master of Science degree
and Ph.D. from the University of California, Davis.


JOHN H. ZEEMAN. Mr. Zeeman has been a member of the Board of Directors of the
Company since January 2001 and is Chairman of the Company's Audit Committee.
Since 1973, Mr. Zeeman has served as Chairman of the Board of Directors



                                       33

<PAGE>

of Mariner Financial Corporation, a financial consulting firm which provides
strategic planning and financing. Mr. Zeeman currently serves as a member of the
Board of Directors of New Horizon Diagnostics, Inc., a company engaged in the
manufacturing and sale of proprietary biomedical products, and Priva
Technologies, Inc., a developer of high technology security systems. From 1989
to 1997, Mr. Zeeman served on the Board of Directors and as Chairman of the
Executive Committee of Teklicon, Inc., a high technology firm specializing in
litigation support. From 1995 to 1997, he was Chief Executive Officer of Condyne
Electronics, Inc., a company specializing in electronic energy conservation
equipment. In addition, from 1991 to 1997, Mr. Zeeman served as a member of the
Board of Directors of HDA International SA, a leading European manufacturer of
computer parts for IBM, Sony and others. From 1968 to 1973, Mr. Zeeman served as
President and Chief Executive Officer of Appolo Industries, a diversified
holding company. He resigned from Appolo after the company was sold. Mr. Zeeman
was a founding shareholder of MCI Communications, Inc. and served on its Board
of Directors until its initial public offering. Mr. Zeeman served as a financial
analyst at L.F. Rothchild, Inc. and as a corporate finance partner at Andresen
and Company, Inc. Mr. Zeeman served as an officer in the Royal Dutch Navy and he
was a graduate of its academy.

JOHN W. WELLS, JR., MD. Dr. Wells has been a member of the Board of Directors of
the Company since January 2001. Dr. Wells also serves a member of the Medical
Advisory Board of the Company. Dr. Wells is Board-Certified in radiation
oncology and currently is the Chief of Radiation Oncology at Orange Park Medical
Center in Jacksonville, Florida. Dr. Wells was a naval aviator in the United
States Marine Corps. Dr. Wells has a Bachelor of Science Degree and a Master of
Science degree in Mathematics from Auburn University. Dr. Wells received his
medical degree from the Medical College of Georgia and took his residency at
Stanford University. Dr. Wells is a member of the Duval County Medical Society
of Clinical Oncology, and the American Endocrine-Therapy Society.



SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities ("Reporting Persons") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the "SEC")
on a timely basis. Reporting Persons are required to furnish the Company with
copies of all such forms that they file. Except as provided below, the Company
believes, based solely on its review of such forms, that all filing requirements
applicable to Reporting Persons during and with respect to fiscal year 2002 were
complied with on a timely basis.



<TABLE>
<CAPTION>
                                                                 NUMBER OF LATE     NUMBER OF TRANSACTIONS
NAME                                                                 REPORTS          NOT TIMELY REPORTED
----                                                             --------------     -----------------------
<S>                                                              <C>                <C>
DVI Financial Services, Inc.                                          ***                     ***

John J. Fuery                                                         ***                     ***

Mercurius Beleggingsmaatchappij BV                                    ***                     ***

Participatie Maatschappij Avanti Limburg BV                           ***                     ***

Gordon C. Rausser                                                      1                       1

Matthew W. Shaw                                                        1                       0

John W. Wells, Jr.                                                     1                       1

John H. Zeeman                                                         1                       1
</TABLE>


***To the Company's knowledge, none of DVI Financial Services, Inc., John J.
Fuery, Mercurius Beleggingsmaatchappij BV or Participatie Maatschappij Avanti
Limburg BV has filed the report(s), pertaining to ownership of the Company's
securities, required by Section 16(a) of the Exchange Act.



                                       34
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

         The following table summarizes compensation earned by, or paid to (a)
each person serving as the Chief Executive Officer of the Company, (b) each
person serving as an executive officer of the Company, other than the Chief
Executive Officer, on December 31, 2002 and (c) each person that served as an
executive officer of the Company during fiscal year 2002 and who earned more
than $100,000 in salary and bonus during the year. Each of Jeffrey A. Goffman,
Richard A. Baker and Gerald D. Boyajian shall be referred to collectively as the
"Named Executive Officers."

<TABLE>
<CAPTION>
                                                                             COMPENSATION
                                           --------------------------------------------------------------------------------------
                                                                ANNUAL                           LONG TERM
                                           ------------------------------------------------     COMPENSATION
NAMED EXECUTIVE                   FISCAL                                                           AWARDS              ALL
  OFFICER                          YEAR          SALARY(1)          BONUS        OTHER(2)         OPTIONS(3)          OTHER
  -------                          ----          ---------          -----        --------       ---------------       -----

------------------------------ ----------- ------------------- -------------- ------------- --------------------- ---------------
<S>                            <C>         <C>                 <C>            <C>           <C>                   <C>
Jeffrey A. Goffman                2002        $275,000                                                               $12,000(6)
   President, Chief               2001        $262,000         $100,000(4)                                           $12,000
   Executive Officer              2000        $250,000                        $75,000(5)             200,000         $12,000
   & Director

Richard A. Baker                  2002        $180,000                                                               $12,000(7)
   Sr. Vice President             2001        $104,000                                               125,000
   & Chief
  Financial Officer

Gerald D. Boyajian(8)             2002        $118,000                                                               $11,000(9)
   Vice President                 2001        $ 95,000                                                45,000         $ 2,000
   & Chief Operating              2000        $ 57,000
   Officer
------------------------------ ----------- ------------------- -------------- ------------- --------------------- ---------------
</TABLE>


         (1)   The amount provided in the salary column includes amounts
               deferred by the named person pursuant to Section 401(k) of the
               Internal Revenue Code.

         (2)   Unless noted, the value of prerequisites and other personal
               benefits, securities and other property paid to or accrued for
               the Named Executive Officers did not exceed $50,000 for each such
               officer, or 10% of such officer's total reported salary and
               bonus, and thus are not included in the table.

         (3)   Represents the number of shares of common stock underlying
               options granted pursuant to the Company's stock option plans.

         (4)   Mr. Goffman received a $100,000 bonus in January 2001 in
               conjunction with the Company's reorganization with U.S. Cancer
               Care.

         (5)   Mr. Goffman received $75,000 for relocation expenses in
               conjunction with the Board's request for him to move to
               California.

         (6)   The amount provided in the "All Other Compensation" column for
               Mr. Goffman consists of: $6,000 received in 2000, 2001, and 2002
               for auto expenses; and $6,000 received in 2000, 2001, and 2002
               for premiums on life insurance for his benefit.

         (7)   The amount provided in the "All Other Compensation" column for
               Mr. Baker consists of: $6,000 received in 2002 for auto expenses;
               and $6,000 received in 2002 for premiums on life insurance for
               his benefit.



                                       35
<PAGE>

         (8)   Gerald D. Boyajian resigned from his position of Vice President
               and Chief Operating Officer on December 7, 2002.

         (9)   The amount provided in the "All Other Compensation" column for
               Mr. Boyajian consists of: $1,000 received in 2001 and $5,500
               received in 2002 for auto expenses; and $1,000 received in 2001
               and $5,500 received in 2002 for premiums on life insurance for
               his benefit.


OPTION GRANTS IN LAST FISCAL YEAR

         No stock options were granted by the Company during the fiscal year
ended December 31, 2002.

OPTION EXERCISES AND FISCAL YEAR-END VALUES

         The following table provides information about exercised stock options
held by the Named Executive Officers. During fiscal year 2002, none of the Named
Executive Officers exercised stock options.


<TABLE>
<CAPTION>
                                                            ----------------------------------- -----------------------------------
                                                                   NUMBER OF SECURITIES              VALUE OF UNEXERCISED
                                                                  UNDERLYING UNEXERCISED             IN-THE-MONEY OPTIONS
                                                                    OPTIONS AT YEAR END                    AT YEAR END
------------------------- ------------------ -------------- --------------- ------------------- --------------- -------------------
                           SHARES AQUIRED        VALUE
                             ON EXERCISE        REALIZED      EXERCISABLE      UNEXERCISABLE      EXERCISABLE      UNEXERCISABLE
------------------------- ------------------ -------------- --------------- ------------------- --------------- -------------------
<S>                       <C>                <C>            <C>             <C>                 <C>             <C>
Jeffrey A. Goffman                0                0           200,000                0
------------------------- ------------------ -------------- --------------- ------------------- --------------- -------------------
Richard A. Baker                  0                0            15,000          110,000
------------------------- ------------------ -------------- --------------- ------------------- --------------- -------------------
Gerald D. Boyajian(1)             0                0                 0                0
------------------------- ------------------ -------------- --------------- ------------------- --------------- -------------------
</TABLE>

         (1)   Gerald D. Boyajian resigned from his position of Vice President
               and Chief Operating Officer on December 7, 2002. Mr. Boyajian
               forfeited his stock option grants upon his resignation.

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

         No award was granted to any of the named Executive Officers during the
fiscal year ended December 31, 2002 under any Long-Term Incentive Plan.

BOARD COMPENSATION

         During 2002, each non-employee member of the Board earned $5,000 per
quarter for Board Meetings attended and other member duties and was reimbursed
for his reasonable expenses in connection with attending Board and committee
meetings.

EMPLOYMENT CONTRACTS

         Mr. Goffman serves as our Chief Executive Officer pursuant to the terms
of a five-year employment agreement, as amended on September 13, 2000. Mr.
Goffman's employment agreement will terminate on May 22, 2005. Under the terms
of his employment agreement, Mr. Goffman receives a base salary of $250,000 per
year, which increases by at least 5% each year. In addition, Mr. Goffman
receives a bonus ranging from a minimum of $50,000 to a maximum of $100,000. His
bonus increases on a pro rata basis based upon the amount of an investment in
our common stock. Thus, to obtain the minimum bonus there must be a $3 million
investment and to obtain the maximum bonus there must be a $5 million
investment. If Mr. Goffman's employment agreement is terminated by us for any
reason other than "cause," as defined in Mr. Goffman's employment agreement, he
is entitled to the following severance:



                                       36
<PAGE>

         (1)   One-sixth (1/6) of his then annual salary, plus one-sixth (1/6)
               of any bonus paid to him or accrued for his benefit within the
               previous twelve (12) months. In the event of a "Change of
               Control", as defined in the agreement, he shall be paid one-half
               (1/2) of his annual salary, plus one-half (1/2) of any bonus paid
               to him or accrued for his benefit with the previous twelve (12)
               months.

         (2)   All of his employee stock options will immediately vest and he
               will become entitled to a cashless exercise of his employee stock
               options. In accordance with his cashless exercise, we will issue
               shares of our common stock with a value equal to the difference
               between the fair market value of our shares and the exercise
               price of the options.

         (3)   Any and all accrued vacation pay, back wages and accrued sick
               pay; and

         (4)   Medical benefits until the earlier of (x) the sixth month
               anniversary of Mr. Goffman's termination date or (y) the date on
               which Mr. Goffman becomes eligible for another employer's health
               insurance.

         If Mr. Goffman's employment agreement is terminated by reason of death
or long-term disability, then he is entitled to one-sixth of his then annual
base salary, plus one-sixth of any bonuses paid or accrued to him within the
previous 12 months.

         Under the terms of his employment agreement, Mr. Goffman received
options to purchase 200,000 shares of common stock, at an exercise price of
$2.00 per share.

         Mr. Baker serves as our Chief Financial Officer pursuant to the terms
of a three-year employment agreement dated April 1, 2002. Mr. Baker's employment
agreement will terminate on April 1, 2005. Under the terms of his employment
agreement, Mr. Baker receives a base salary of $180,000 per year, which
increases by at least 5% each year. In addition, Mr. Baker is eligible to
receive an annual bonus as determined by the Chief Executive Officer and the
Compensation Committee and to earn an annual grant of stock options for 50,000
shares as determined by the Compensation Committee. If Mr. Baker's employment
agreement is terminated by us for any reason other than "cause," as defined in
Mr. Baker's employment agreement, he is entitled to the following severance:

         (1)   One-sixth (1/6) of his then annual salary, plus one-sixth (1/6)
               of any bonus paid to him or accrued for his benefit within the
               previous twelve (12) months. In the event of a "Change of
               Control", as defined in the agreement, he shall be paid one-half
               (1/2) of his annual salary, plus one-half (1/2) of any bonus paid
               to him or accrued for his benefit with the previous twelve (12)
               months.

         (2)   All of his employee stock options will immediately vest and he
               will become entitled to a cashless exercise of his employee stock
               options. In accordance with his cashless exercise, we will issue
               shares of our common stock with a value equal to the difference
               between the fair market value of our shares and the exercise
               price of the options.

         (3)   Any and all accrued vacation pay, back wages and accrued sick
               pay; and

         (4)   Medical benefits until the earlier of (x) the sixth month
               anniversary of Mr. Baker's termination date or (y) the date on
               which Mr. Baker becomes eligible for another employer's health
               insurance.

         If Mr. Baker's employment is terminated as a result of a change in
control, then he is entitled to receive one-half (1/2) of his annual base salary
plus one-half (1/2) of any bonuses paid or accrued within the previous twelve
months.

         If Mr. Baker's employment agreement is terminated by reason of death or
long-term disability, then he is entitled to one-sixth of his then annual base
salary, plus one-sixth of any bonuses paid or accrued to him within the previous
12 months.



                                       37
<PAGE>

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
              RELATED STOCKHOLDER MATTERS

         The following table sets forth, as of March 7, 2003, the number of
shares of OnCure Common Stock owned by (i) each person who is known by the
Company to own of record or beneficially five percent (5%) or more of OnCure
Common Stock, (ii) each director and executive officer of the Company, and (iv)
all directors and executive officers of the Company as a group. Unless otherwise
indicated, each of the persons listed below has sole voting and investment power
with respect to the shares beneficially owned by such person.

<TABLE>
<CAPTION>
                                                                                  AMOUNT AND
                                                                                    NATURE              PERCENT OF
NAME AND ADDRESS                                             TITLE               OF BENEFICIAL            COMMON
OF BENEFICIAL OWNER (1)                                    OF CLASS              OWNERSHIP (2)          STOCK OWNED
-----------------------                                    --------              -------------          -----------
<S>                                                      <C>                     <C>                    <C>
Shyam B. Paryani, MD                                     Common Stock               906,311(3)            9.8%

Jeffrey A. Goffman                                       Common Stock             1,349,500(4)           14.5%

Richard A. Baker                                         Common Stock                15,000(5)            0.2%

Gerald D. Boyajian                                       Common Stock                -                     -

Stanley S. Trotman, Jr.                                  Common Stock               225,900(7)            2.5%

Gordon C. Rausser                                        Common Stock               260,100(8)            2.9%

Matthew W. Shaw                                          Common Stock                -                     -

Charles J. Jacobson                                      Common Stock              276,433(10)            3.1%

John H. Zeeman                                           Common Stock               24,200(11)            0.3%

John W. Wells, Jr., MD                                   Common Stock              552,347(12)            6.0%

John J. Fuery, MD                                        Common Stock                2,278,303           25.9%
44 Farragut Avenue
Piedmont, CA 94610

DVI Financial Services, Inc.                             Common Stock                  948,555           10.8%
5355 Town Center Road
Boca Raton, FL 33486
</TABLE>



                                       38
<PAGE>

<TABLE>
<S>                                                      <C>                     <C>                    <C>
Mercurius Beleggingsmaatschappij BV                      Common Stock            1,538,462(13)           17.5%
and
Participatie Maatschappij Avanti Limburg BV
Akerstraat 126
6417 AG Heerlen
Netherlands

Crossbow Venture Capital Partners, LP                    Common Stock            2,538,462(14)           22.4%
One North Clematis Street, Suite 510
West Palm Beach, FL 33401

Officers and Directors as a Group (9 persons)            Common Stock            3,609,791(15)           34.6%
</TABLE>


         We believe, based on information provided by these persons, that the
persons listed have sole voting and investment power with respect to all shares
shown as beneficially owned by them. Furthermore, information presented in this
table and related notes have been obtained from the beneficial owner or from
reports filed by the beneficial owner with the SEC under Section 13 of the
Exchange Act.

(1)      Except as otherwise indicated, the address of each of the individuals
         listed is c/o OnCure Technologies, 610 Newport Center Drive, Suite 350,
         Newport Beach, CA 92660.

(2)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Shares of OnCure Common
         Stock issuable upon the exercise or conversion of options, warrants or
         preferred stock currently exercisable or convertible, or exercisable or
         convertible within 60 days of the Record Date, are deemed outstanding
         for computing the percentage ownership of the person holding such
         options, warrants or preferred stock but are not deemed outstanding for
         computing the percentage ownership of any other person.

(3)      Includes: (i) 59,390 shares of Common Stock issuable upon the exercise
         of certain stock options, (ii) 320,513 shares of Common Stock issuable
         upon conversion of 166.67 shares of Series D Stock, and (iii) 96,000
         shares of Common Stock issuable upon conversion of 36 shares of Series
         H Stock.

(4)      Includes: (i) 200,000 shares of Common Stock issuable upon the exercise
         of certain stock options, (ii) 10,000 shares of Common Stock issuable
         upon the exercise of certain warrants, and (iii) 96,000 shares of
         Common Stock issuable upon conversion of 36 shares of Series H Stock.

(5)      Includes 15,000 shares of Common Stock issuable upon the exercise of
         certain stock options.

(6)      Gerald D. Boyajian resigned from his position as Chief Operating
         Officer on December 7, 2002.

(7)      Includes: (i) 26,500 shares of Common Stock issuable upon the exercise
         of certain stock options and (ii) 96,000 shares of Common Stock
         issuable upon conversion of 36 shares of Series H Stock.

(8)      Includes: (i) 26,600 shares of Common Stock issuable upon the exercise
         of certain stock options, (ii) 10,000 shares of Common Stock issuable
         upon the exercise of certain warrants, and (iii) 96,000 shares of
         Common Stock issuable upon conversion of 36 shares of Series H Stock.

(9)      Mr. Shaw is a designee of the holders of shares of Series E Stock. Mr.
         Shaw is an employee of Crossbow Venture Capital Corp., the general
         partner of Crossbow Venture Capital Partners, LP.

(10)     Includes: (i) 38,600 shares of Common Stock issuable upon the exercise
         of certain stock options, (ii) 10,000 shares of Common Stock issuable
         upon the exercise of certain warrants, and (iii) 93,333 shares of
         Common Stock issuable upon conversion of 35 shares of Series H Stock.



                                       39
<PAGE>

(11)     Mr. Zeeman is a designee of the holders of shares of Series E Stock.
         Includes 24,200 shares of Common Stock issuable upon the exercise of
         certain stock options.

(12)     Includes: (i) 1,200 shares of Common Stock issuable upon exercise of
         certain stock options, (ii) 320,513 shares of Common Stock issuable
         upon conversion of 166.67 shares of Series D Stock, and (iii) 96,000
         shares of Common Stock issuable upon conversion of 36 shares of Series
         H Stock.

(13)     Mercurius Beleggingsmaatschappij BV ("Mercurius") and Participatie
         Maatschappij Avanti Limburg BV ("Avanti") each own 250 shares of Series
         E Stock. Such shares of Series E Stock are convertible into 769,231
         shares of Common Stock. However, based on a Schedule 13G filed by
         Mercurius and Avanti with the SEC on May 30, 2001, Mercurius and Avanti
         are deemed a "group." As such, Mercurius and Avanti are deemed to
         beneficially own each other's shares Common Stock (or an aggregate of
         1,538,462 shares of Common Stock). In addition, the Schedule 13G also
         states that Mercurius is wholly owned by Stichting Administratiekantoor
         Aandelen Stienstra, which is deemed to beneficially own the shares
         beneficially owned by Mercurius.

(14)     Includes: (i) 1,000,000 shares of Common Stock issuable upon the
         exercise of certain warrants and (ii) 1,538,462 shares of Common Stock
         issuable upon conversion of 500 shares of Series E Stock.

         Based on a Schedule 13G filed with the SEC on May 17, 2002, Crossbow
         Venture Capital Corp., the general partner of Crossbow Venture Capital
         Partners, LP, may be deemed to beneficially own all 2,538,462 shares of
         Common Stock beneficially owned by Crossbow Venture Capital Partners,
         LP.

(15)     Includes: (i) 385,990 shares of Common Stock issuable upon the exercise
         of certain stock options, (ii) 30,000 shares of Common Stock issuable
         upon the exercise of certain warrants, (iii) 641,026 shares of Common
         Stock issuable upon conversion of 333.34 shares of Series D Stock and
         (iv) 477,333 shares of Common Stock issuable upon conversion of 215
         shares of Series H Stock

 SERIES D STOCK

         The following table sets forth, as of March 7, 2003 the number of
shares of Series D Stock owned by (i) each person who is known by the Company to
own of record or beneficially five percent (5%) or more of the Series D Stock,
(ii) each director and executive officer of the Company, and (iv) all directors
and executive officers of the Company as a group. Unless otherwise indicated,
each of the persons listed below has sole voting and investment power with
respect to the shares beneficially owned by such person.




<TABLE>
<CAPTION>
                                                                                  AMOUNT AND
                                                                                    NATURE              PERCENT OF
NAME AND ADDRESS                                             TITLE               OF BENEFICIAL           SERIES D
OF BENEFICIAL OWNER (1)                                    OF CLASS              OWNERSHIP (2)          STOCK OWNED
-----------------------                                    --------              -------------          -----------
<S>                                                      <C>                     <C>                    <C>
Shyam B. Paryani, MD                                    Series D Stock                166.67              16.67%

Jeffrey A. Goffman                                      Series D Stock                   -                  -

Richard A. Baker                                        Series D Stock                   -                  -

Gerald D. Boyajian (3)                                  Series D Stock                   -                  -

Stanley S. Trotman, Jr.                                 Series D Stock                   -                  -
</TABLE>



                                       40

<PAGE>

<TABLE>
<S>                                                      <C>                     <C>                    <C>
Gordon C. Rausser                                       Series D Stock                   -                  -

Matthew W. Shaw (4)                                     Series D Stock                   -                  -

Charles J. Jacobson                                     Series D Stock                   -                  -

John H. Zeeman (5)                                      Series D Stock                   -                  -

John W. Wells, Jr., MD                                  Series D Stock                166.67              16.67%

Walter P. Scott, MD                                     Series D Stock                166.67              16.67%

Douglas W. Johnson, MD                                  Series D Stock                166.67              16.67%

Sonja Schoppel, MD                                      Series D Stock                166.66              16.66%

Abhjit Deshmukh, MD                                     Series D Stock                166.66              16.66%

Officers and Directors as a Group (9 persons)           Series D Stock                10,000               100%
</TABLE>



         We believe, based on information provided by these persons, that the
persons listed have sole voting and investment power with respect to all shares
shown as beneficially owned by them. Furthermore, information presented in this
table and related notes have been obtained from the beneficial owner or from
reports filed by the beneficial owner with the SEC under Section 13 of the
Exchange Act.

(1)      Except as otherwise indicated, the address of each of the individuals
         listed is c/o OnCure Technologies, 610 Newport Center Drive, Suite 350,
         Newport Beach, CA 92660.

(2)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Shares of OnCure Common
         Stock issuable upon the exercise or conversion of options, warrants or
         preferred stock currently exercisable or convertible, or exercisable or
         convertible within 60 days of the Record Date, are deemed outstanding
         for computing the percentage ownership of the person holding such
         options, warrants or preferred stock but are not deemed outstanding for
         computing the percentage ownership of any other person.

(3)      Gerald D. Boyajian resigned from his position as Chief Operating
         Officer on December 7, 2002.

 SERIES E STOCK

         The following table sets forth, as of March 7, 2003, the number of
shares of Series E Stock owned by (i) each person who is known by the Company to
own of record or beneficially five percent (5%) or more of the Series E Stock,
(ii) each director and executive officer of the Company, and (iv) all directors
and executive officers of the Company as a group. Unless otherwise indicated,
each of the persons listed below has sole voting and investment power with
respect to the shares beneficially owned by such person.



                                       41
<PAGE>

<TABLE>
<CAPTION>
                                                                                  AMOUNT AND
                                                                                    NATURE              PERCENT OF
NAME AND ADDRESS                                             TITLE               OF BENEFICIAL           SERIES E
OF BENEFICIAL OWNER (1)                                    OF CLASS              OWNERSHIP (2)          STOCK OWNED
-----------------------                                    --------              -------------          -----------
<S>                                                      <C>                     <C>                    <C>
Shyam B. Paryani, MD                                    Series E Stock                  -                    -

Jeffrey A. Goffman                                      Series E Stock                  -                    -

Richard A. Baker                                        Series E Stock                  -                    -

Gerald D. Boyajian (3)                                  Series E Stock                  -                    -

Stanley S. Trotman, Jr.                                 Series E Stock                  -                    -

Gordon C. Rausser                                       Series E Stock                  -                    -

Matthew W.  Shaw (4)                                    Series E Stock                  -                    -

Charles J. Jacobson                                     Series E Stock                  -                    -

John H. Zeeman (5)                                      Series E Stock                  -                    -

John W. Wells, Jr., MD                                  Series E Stock                  -                    -

Mercurius Beleggingsmaatschappij BV                     Series E Stock                500(6)                50%
and
Participatie Maatschappij Avanti Limburg BV
Akerstraat 126
6417 AG Heerlen
Netherlands

Crossbow Venture Capital Partners, LP                   Series E Stock               500(7)                  50%
One North Clematis Street, Suite 510
West Palm Beach, FL 33401

Officers and Directors as a Group (9 persons)           Series E Stock                   -                   -
</TABLE>



         We believe, based on information provided by these persons, that the
persons listed have sole voting and investment power with respect to all shares
shown as beneficially owned by them. Furthermore, information presented in this
table and related notes have been obtained from the beneficial owner or from
reports filed by the beneficial owner with the SEC under Section 13 of the
Exchange Act.



                                       42
<PAGE>

(1)      Except as otherwise indicated, the address of each of the individuals
         listed is c/o OnCure Technologies, 610 Newport Center Drive, Suite 350,
         Newport Beach, CA 92660.

(2)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Shares of OnCure Common
         Stock issuable upon the exercise or conversion of options, warrants or
         preferred stock currently exercisable or convertible, or exercisable or
         convertible within 60 days of the Record Date, are deemed outstanding
         for computing the percentage ownership of the person holding such
         options, warrants or preferred stock but are not deemed outstanding for
         computing the percentage ownership of any other person.

(3)      Gerald D. Boyajian resigned from his position as Chief Operating
         Officer on December 7, 2002.

(4)      Mr. Shaw is a designee of the holders of shares of Series E Stock. Mr.
         Shaw is an employee of Crossbow Venture Capital Corp., the general
         partner of Crossbow Venture Capital Partners, LP.

(5)      Mr. Zeeman is a designee of the holders of shares of Series E Stock.

(6)      Mercurius and Avanti each own 250 shares of Series E Stock. However,
         based on a Schedule 13G filed by Mercurius and Avanti with the SEC on
         May 30, 2001, Mercurius and Avanti are deemed a "group." As such,
         Mercurius and Avanti are deemed to beneficially own each other's shares
         of Series E Stock (or an aggregate of 500 shares of Series E Stock). In
         addition, the Schedule 13G also states that Mercurius is wholly owned
         by Stichting Administratiekantoor Aandelen Stienstra, which is deemed
         to beneficially own the shares beneficially owned by Mercurius.

(7)      Based on a Schedule 13G filed with the SEC on May 17, 2002, Crossbow
         Venture Capital Corp., the general partner of Crossbow Venture Capital
         Partners, LP, may be deemed to beneficially own all of the shares of
         Series E Stock beneficially owned by Crossbow Venture Capital Partners,
         LP.

SERIES H STOCK

         The following table sets forth, as of March 7, 2003, the number of
shares of Series H Stock owned by (i) each person who is known by the Company to
own of record or beneficially five percent (5%) or more of the Series H Stock,
(ii) each director and executive officer of the Company, and (iv) all directors
and executive officers of the Company as a group. Unless otherwise indicated,
each of the persons listed below has sole voting and investment power with
respect to the shares beneficially owned by such person.


<TABLE>
<CAPTION>
                                                                                  AMOUNT AND
                                                                                    NATURE              PERCENT OF
NAME AND ADDRESS                                             TITLE               OF BENEFICIAL           SERIES H
OF BENEFICIAL OWNER (1)                                    OF CLASS              OWNERSHIP (2)          STOCK OWNED
-----------------------                                    --------              -------------          -----------
<S>                                                      <C>                     <C>                    <C>
Shyam B. Paryani, MD                                    Series H Stock                 36                   16.74%

Jeffrey A. Goffman                                      Series H Stock                 36                   16.74%

Richard A. Baker                                        Series H Stock                  -                      -

Gerald D. Boyajian (3)                                  Series H Stock                  -                      -

Stanley S. Trotman, Jr.                                 Series H Stock                 36                   16.74%
</TABLE>



                                       43
<PAGE>

<TABLE>
<S>                                                      <C>                     <C>                    <C>
Gordon C. Rausser                                       Series H Stock                 36                   16.74%

Matthew W. Shaw                                         Series H Stock                  -                      -

Charles J. Jacobson                                     Series H Stock                 35                   16.30%

John H. Zeeman                                          Series H Stock                  -                      -

John W. Wells, Jr., MD                                  Series H Stock                  36                  16.74%

Officers and Directors as a Group (9 persons)           Series H Stock                 215                    100%
</TABLE>



         We believe, based on information provided by these persons, that the
persons listed have sole voting and investment power with respect to all shares
shown as beneficially owned by them. Furthermore, information presented in this
table and related notes have been obtained from the beneficial owner or from
reports filed by the beneficial owner with the SEC under Section 13 of the
Exchange Act.

(1)      Except as otherwise indicated, the address of each of the individuals
         listed is c/o OnCure Technologies, 610 Newport Center Drive, Suite 350,
         Newport Beach, CA 92660.

(2)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Shares of OnCure Common
         Stock issuable upon the exercise or conversion of options, warrants or
         preferred stock currently exercisable or convertible, or exercisable or
         convertible within 60 days of the Record Date, are deemed outstanding
         for computing the percentage ownership of the person holding such
         options, warrants or preferred stock but are not deemed outstanding for
         computing the percentage ownership of any other person.

(3)      Gerald D. Boyajian resigned from his position as Chief Operating
         Officer on December 7, 2002.



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     We do not believe that any of the transactions described below were made on
terms less favorable to us than those that would have been available from
unaffiliated parties and do not anticipate entering into transactions with
affiliated parties in the future on terms less favorable than those that would
be available from unaffiliated parties.

FORMATION OF THE VENTURE

         On January 24, 2003, the Company, together with Ninth City Landowners,
LLP ("Ninth City"), formed the FROG OnCure Southside, LLC (the "Venture") for
the purpose of operating and managing the Wells Complex Clinic and the Southside
Cancer Center, both in Jacksonville, FL. OnCure and Ninth City each own a 50%
interest in the Venture. The Venture will be governed by a board of managers
consisting of four members, two each from OnCure and Ninth City. The members
agreed to an initial capital contribution of $1.25 million from both Ninth City
and the Company. Ninth City contributed $1.25 million in cash. The Company
contributed its ownership interest in the Wells Complex Clinic, valued at
$700,000, and issued a promissory note in the amount of $300,000 to Ninth City,
and the Venture issued a promissory note in the amount of $ 250,000 to Ninth
City. Drs. Shyam B. Paryani and John W. Wells (each of whom is a director and
shareholder of the Company) are partners of Ninth City.



                                       44
<PAGE>

SALE AND LEASEBACK OF THE WELLS COMPLEX CLINIC

         On January 24, 2003, USCC Florida Acquisition Corp., a wholly-owned
subsidiary of the Company ("USCC Florida"), entered into a Purchase and Sale
Agreement (the "Purchase and Sale Agreement") with Ninth City pursuant to which
Ninth City purchased certain real property owned by USCC Florida, located at
3599 University Blvd. S., Suite 1500, Jacksonville, FL 32216 (the "Wells Complex
Clinic") for $500,000. The purchase price for the land and building was paid in
cash at closing. Concurrently with the sale, the Company entered into a lease
with Ninth City pursuant to which Ninth City agreed to lease the Wells Complex
Clinic to the Company for a period of 10 years at a rate of $5,885 per month,
with annual increases equal to the CPI. Drs. Shyam B. Paryani and John W. Wells
(each of whom is a director and shareholder of the Company) and Drs. Walter P.
Scott, Douglas W. Johnson, Sonja Schoppel and Abhjit Deshmukh (each of whom is a
shareholder of the Company) are practicing physicians with the Company, partners
of FROG and members of Ninth City.

ACQUISITION OF THE SOUTHSIDE CANCER CENTER

         On January 31, 2003, the Venture entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") with Florida Oncology Associates,
P.L. ("FOA") and certain of FOA's members. Pursuant to the Asset Purchase
Agreement, the Venture acquired the assets and business pertaining to the
Southside Cancer Center and, in connection therewith, entered into a lease with
Golden Pond II, LLC, a wholly-owned subsidiary of FOA.

         The purchase price for the Acquisition was $5,500,000 (the "Purchase
Price"), which was funded in part by a loan (the "Loan") in the aggregate
principal amount of $4,250,000. The Venture obtained the Loan from DVI Financial
Services, Inc., the Company's principal lender and the beneficial owner of more
than 5% of the Company's voting securities ("DVI"). The Loan (i) bears interest
at 8.75% per annum, (ii) matures on January 28, 2009, and (iii) is secured by
substantially all the receivables and equipment of the Venture. Approximately,
$2,125,000 of the Loan is guaranteed by the Company. As part of the Acquisition,
the Venture assumed accounts receivable of $363,000 and no indebtedness of FOA.

THE DECEMBER FINANCING

         In December 2003, certain member's of the Company's Board of Directors
(i.e., Dr. Shyam Paryani, Jeffrey A. Goffman, Stanley S. Trotman, Jr., Gordon C.
Rausser, Dr. John W. Wells, Jr., and Charles J. Jacobson) purchased an aggregate
of 215 shares of Series H Cumulative Accelerating Redeemable Preferred Stock of
the Company (the "Series H Stock") for an aggregate purchase price of $430,000
in cash.

         The Series H Stock bears a cumulative compounding dividend of 8% per
annum. Each share of Series H Stock is convertible at any time at the option of
the holder into a number of fully paid and non-assessable shares of the
Company's Common Stock equal to the quotient of (x) $2,000 plus an amount equal
to all accrued and unpaid dividends on such share of Series H Stock being
converted divided by (y) $.75. The Certificate of Designations relating to the
Series H Stock contains customary anti-dilution protection for the shares of
Series H Stock. The holders of the Series H Stock are entitled to full voting
rights as if their shares had been converted into shares of the Company's Common
Stock and vote as a separate class on all matters adversely affecting the Series
H Stock.

         On December 23, 2002, the Company entered into a Purchase Agreement
with Crossbow Venture Capital Partners LP, a shareholder of the Company
("Crossbow"), whereby the Company issued a note in the aggregate principal
amount of $500,000 (the "December Note") to Crossbow for an aggregate purchase
price of $500,000. The December Note (i) bears interest at the rate of 8% per
annum, (ii) matures on May 15, 2003, (iii) is unsecured, and (iv) is convertible
into 250 shares of Series H Stock, at the option of Crossbow, or such other
series of preferred stock that may be issued by the Company prior to the
maturity date of the December Note.

THE CORPUS CHRISTI TRANSACTION

         On September 30, 2002, U.S. Cancer Care, Inc., a wholly-owned
subsidiary of the Company ("USCC"), entered into an Option to Purchase Agreement
(the "Option Purchase Agreement") with DVI. Pursuant to the Option Purchase
Agreement, USCC granted DVI an option (the "Option") to purchase 100% of the
issued and outstanding membership interest (the "Interest") in Corpus Christi
Acquisition, LLC ("CCA"), in exchange for 837,758 shares (the "Shares") of the
Company's Common Stock owned by DVI. The purchase price for the Interest upon
exercise of the Option was: (i) one dollar ($1.00), (ii) the forgiveness,
release and discharge by DVI of all indebtedness (the "DVI Indebtedness")
relating to



                                       45
<PAGE>

CCA owed by the Company or its affiliates to DVI, and (iii) the assumption of
all of the indebtness (the "Assumed Indebtedness") of the Company and its
affiliates, including the DVI Indebtedness, relating to the operations of CCA.

         In accordance with the Option Purchase Agreement, DVI assigned its
right to exercise the Option to Dolphin Medical Inc. ("Dolphin"). Pursuant to a
Purchase Agreement (the "Purchase Agreement"), dated as of October 31, 2002 and
effective as of September 30, 2002, by and among Dolphin, USCC and the Company,
Dolphin exercised the Option and purchased the Interest by assuming all of the
Assumed Indebtedness and, in connection therewith, DVI released and discharged
the Company and its affiliates from their obligation to repay the DVI
Indebtedness. The Company recorded a gain of $1.0 million on the sale of the
Interest to Dolphin.

THE MAY FINANCING

         On May 15, 2002, the Company entered into a Purchase Agreement with
Crossbow, whereby the Company issued (i) a note in the aggregate principal
amount of $1.0 million (the "May Note") and (ii) a warrant to purchase up to an
aggregate of 1,000,000 shares of the Company's Common Stock (the "Warrant") for
an aggregate purchase price of $1.0 million. The May Note (i) bears interest at
the rate of 8% per annum, (ii) matures on May 15, 2003, (iii) is unsecured, and
(iv) is convertible into 500 shares of Series H Stock. The Warrants have an
exercise price of $0.75 per share and are exercisable for a period of five (5)
years.

LEASE AGREEMENTS

         The Company leases the East Bay Regional Cancer Center, the Turlock
Regional Cancer Center and the Sonora Cancer Center from a corporation owned by
Dr. John J. Fuery. The Company's annual rental payments, in accordance with the
terms of these leases, are $211,000 (East Bay), $128,000 (Turlock) and $85,000
(Sonora). Dr. John J. Fuery is a shareholder of the Company and a former member
of the Company's Board of Directors.

         The Company leases the Florida Cancer Center - Orange Park from Sixth
City Landowners, LLP and the Florida Cancer Center - Palatka from Eighth City
Landowners, LLP. The Company's annual rental payments, in accordance with the
terms of these leases, are $162,000 (Orange Park) and $90,000 (Palatka). Drs.
Shyam B. Paryani and John W. Wells, each of whom is a director and shareholder
of the Company, hold ownership interests in Sixth City Landowners and Eight City
Landowners.

         As noted above, the Company leases the Wells Complex Clinic from Ninth
City.

MEDICAL SUPPLIES AGREEMENT

         The Company and North Florida Cyclotron Center, LLC ("NFCC") are
parties to a supply agreement pursuant to which NFCC provides the Company with
medical supplies. In 2002, the Company paid NFFC an aggregate of approximately
$229,000 pursuant to the supply agreement. Drs. Shyam B. Paryani and John W.
Wells, each of whom is a director and shareholder of the Company, hold ownership
interests in NFCC.

FINANCING AGREEMENTS

         As a way of financing certain aspects of its operations, the Company
obtains financing from DVI. The Company has entered into a series of financing
agreements with DVI. At December 31, 2002, the principal amount of borrowings
under these agreements was approximately $11.6 million with interest rates
ranging from 8.8% to 15.0%. During the fiscal year 2002, the Company paid DVI
approximately $1.4 million as payment for accrued interest on these borrowings.

         DVI provides the Company with a revolving line of credit pursuant to
two loan and security agreements. The maximum amount available under this credit
facility is $4.4 million with advances limited to eighty-five percent (85%) of
eligible account receivables. Borrowings under the line of credit bear interest
at a rate that ranges between 2.0% to 2.25% over the prime lending rate. This
line of credit expires on June 30, 2004 but is renewable for a one-year term at
the expiration date. At December 31, 2002, we had approximately $4.4 million of
borrowings under this credit facility.



                                       46
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

3.1      Articles of Incorporation of the Registrant dated June 14, 1993. (2)

3.2      Certificates of Amendment to the Articles of Incorporation of the
         Registrant dated April 21, 1997. (3)

3.3      Certificate of Amendment to the Articles of Incorporation of the
         Registrant dated August 11, 1997 (3)

3.4      Articles of Amendment to the Articles of Incorporation of the
         Registrant dated December 15, 1997. (2)

3.5      Articles of Amendment to the Articles of Incorporation of the
         Registrant dated September 15, 1999. (2)

3.6      Articles of Amendment to the Articles of Incorporation of the
         Registrant dated November 13, 2000, effecting a reverse stock split.
         (4)

3.7      Articles of Amendment to the Articles of Incorporation of the
         Registrant dated March 19, 2001. (5)

3.8      Articles of Amendment to the Articles of Incorporation of the
         Registrant dated January 18, 2001. (6)

3.9      By-Laws of the Registrant. (7)

3.10     Articles of Amendment to the Articles of Incorporation of the
         Corporation dated May 15, 2002. (8)

10.1     Employment Agreement, dated as of May 22, 1998, by and between Jeffrey
         A. Goffman and U.S. Cancer Care. (3)

10.2     Amendment to Employment Agreement, dated as of September 13, 2000, by
         and between Jeffrey A. Goffman and U.S. Cancer Care. (3)

10.3     2001 OnCure Technologies Corp. Stock Option Plan. (9)

10.4     Professional Services Agreement, dated as of August 1, 1999, by and
         between The Permanente Medical Group, Inc., Radiation Oncology Medical
         Group and USCC Health Care Management Corporation. (9)

10.5     Assignment of and Amendment to Agreement, dated as of August 1, 2000,
         by and between The Permanente Medical Group, Inc., Radiation Oncology
         Medical Group, USCC Health Care Management Corporation, USCC Medical
         Group-CA, Inc. and USCMC-USCC Partnership. (10)

10.6     Second Assignment of and Amendment to Agreement, dated as of April 1,
         2001, by and among The Permanente Medical Group, Inc., Radiation
         Oncology Medical Group, USCC Health Care Management Corporation, USCC
         Medical Group-CA, Inc., USCMC-USCC Partnership and AuSam Medical Group,
         Inc. (10)

10.7     Medical Services Agreement, dated as of December 1, 2001, by and
         between U.S. Cancer Care Florida Radiation Oncology Group. (11)

10.9     Settlement Agreement and Mutual General Release, dated as of February
         28, 2002, by and among W. Brian Fuery, Stunner Corporation, U.S. Cancer
         Management Corporation, USCMC-USCC Partnership, U.S. Cancer Care, Inc.,
         and OnCure Technologies Corp.

10.10    Purchase Agreement, dated as of May 15, 2002, by and between OnCure
         Technologies Corp. and Crossbow Venture Capital Partners LP. (8)

10.11    Convertible Promissory Note dated as of May 15, 2002. (8)

10.12    Common Stock Purchase Warrant dated as of May 15, 2002. (8)

10.13    Purchase Agreement, dated as December 23, 2002, by and between OnCure
         Technologies Corp and Crossbow Venture Capital Partners LP.

10.14    Convertible Promissory Note dated as of December 23, 2002.

10.15    Subscription Agreement, dated as of December 5, 2002, by and between
         OnCure Technologies Corp. and Jeffrey A. Goffman.

10.16    Subscription Agreement, dated as of December 6, 2002, by and between
         OnCure Technologies Corp. and Charles J. Jacobson.

10.17    Subscription Agreement, dated as of December 7, 2002, by and between
         OnCure Technologies Corp. and Gordon C. Rausser.



                                       47
<PAGE>

10.18    Subscription Agreement, dated as of December 15, 2002, by and between
         OnCure Technologies Corp. and John W. Wells, Jr.

10.19    Subscription Agreement, dated as of December 18, 2002, by and between
         OnCure Technologies Corp. and Shyam B Paryani.

10.20    Subscription Agreement, dated as of December 6, 2002, by and between
         OnCure Technologies Corp. and Stanley A. Trotman, Jr.

21.1     List of Subsidiaries.

99.1     Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2     Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002.

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

(1)      Filed as an exhibit to the Current Report on Form 8-K filed by the
         Company on January 17, 2001.

(2)      Filed as an exhibit to the Registration Statement on Form 10-SB filed
         by the Company on June 13, 2000.

(3)      Filed as an exhibit to the Annual Report on Form 10-KSB filed by the
         Company on April 15, 2001.

(4)      Filed as an exhibit to the Current Report on Form 8-K filed by the
         Company on November 11, 2000.

(5)      Filed as an exhibit to the Definitive Information Statement on Schedule
         14C filed by the Company on February 27, 2001.

(6)      Filed as an exhibit to the Current Report on Form 8-K filed by the
         Company on January 18, 2001.

(7)      Filed as an exhibit to Amendment No. 1 to the Registration Statement on
         Form 10-SB filed by the Company on June 22, 2000.

(8)      Filed as an exhibit to the Quarterly Report filed by the Company on May
         15, 2002.

(9)      Filed as an exhibit to the Registration Statement on Form S-8 filed by
         the Company on January 16, 2002.

(10)     Filed as an exhibit to Amendment No. 2 of the Annual Report on Form
         10-KSB/A filed by the Company on October 18, 2001.

(11)     Filed as an exhibit to Amendment No. 4 to the Registration Statement on
         Form SB-2 filed by the Company on October 19, 2001.



(b)     Current Reports on Form 8-K.

         On October 7, 2002, the Company filed a current report on Form 8-K
reporting under Item 5 that its wholly-owned subsidiary, U.S. Cancer Care, Inc.
granted DVI Financial Services, Inc. an option to purchase 100% of the issued
and outstanding membership interest in Corpus Christi Acquisition, LLC, in
exchange for 837,758 shares of Company's common stock owned by DVI.

         On November 8, 2002, the Company filed a current report on Form 8-K
reporting under Item 5 that DVI assigned its right to exercise its option to
purchase 100% of the issued and outstanding membership interest in Corpus
Christi Acquisition, LLC to Dolphin Medical, Inc. and that Dolphin Medical, Inc.
exercised such option.



                                       48
<PAGE>

ITEM 14. CONTROLS AND PROCEDURES


CONTROLS AND PROCEDURES

         The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the Company's
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Security and Exchange Commission's rules and
forms, and that such information is accumulated and communicated to the
Company's management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures.

         Within 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and the
Company's Chief Financial Officer, of the effectiveness of the Company's
disclosure controls and procedures. Based on the foregoing, the Company's Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective.

         There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date the Company completed its evaluation










                                       49
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Exchange
Act, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


                                 ONCURE TECHNOLOGIES CORP.


Dated: April 11, 2003                     By: /s/ Jeffrey A. Goffman
                                              ----------------------
                                          Jeffrey A. Goffman
                                          Chief Executive Officer, President,
                                          Secretary and Director


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:



<TABLE>
<CAPTION>
              Name                                           Position
              ----                                           ---------
<S>                                    <C>                                                            <C>
/s/ Shyam B. Paryani, MD
------------------------
Shyam B. Paryani, MD                              Chairman of the Board of Directors                    April 11, 2003

/s/ Jeffrey A. Goffman
----------------------
Jeffrey A. Goffman                    Chief Executive Officer, President, Secretary and Director        April 11, 2003

/s/ Richard A. Baker
--------------------
Richard A. Baker                           Chief Financial Officer and Senior Vice President            April 11, 2003
                                                    (principal accounting officer)

/s/ Charles J. Jacobson
-----------------------
Charles J. Jacobson                                            Director                                 April 11, 2003

/s/ Stanley S. Trotman, Jr.
---------------------------
Stanley S. Trotman, Jr.                                        Director                                 April 11, 2003

/s/ Gordon C. Rausser, Ph.D.
----------------------------
Gordon C. Rausser, Ph.D.                                       Director                                 April 11, 2003

/s/ Matthew W. Shaw
-------------------
Matthew W. Shaw                                                Director                                 April 11, 2003

/s/ John H. Zeeman
------------------
John H. Zeeman                                                 Director                                 April 11, 2003

/s/ John W. Wells, Jr., MD
--------------------------
John W. Wells, Jr., MD                                         Director                                 April 11, 2003
</TABLE>



                                       50
<PAGE>


SECTION 302 CERTIFICATIONS

I, Jeffrey A Goffman, certify that:

(1) have reviewed this annual report on Form 10-KSB of OnCure Technologies
Corp.;

(2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):

(a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize, and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

(6) The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:  April 11, 2003

                                        By: /s/ Jeffrey A. Goffman
                                            ----------------------
                                        Jeffrey A. Goffman
                                        President and Chief Executive Officer



                                       51
<PAGE>


SECTION 302 CERTIFICATIONS

I, Richard A Baker, certify that:

(1) have reviewed this annual report on Form 10-KSB of OnCure Technologies
Corp.;

(2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):

(a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize, and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

(6) The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:  April 11, 2003

                                       By: /s/ Richard A. Baker
                                           --------------------
                                       Richard A. Baker
                                       Senior Vice President and Chief Financial
                                         Officer



                                       52

<PAGE>



FINANCIAL STATEMENTS:

<TABLE>
<S>                                                                                                                <C>
Report of Independent Auditors.....................................................................................F-1

Consolidated Balance Sheet as of December 31, 2002 and 2001........................................................F-2 - F-3

Consolidated Statements of Operations for the years ended
December 31, 2002, and 2001........................................................................................F-4

Consolidated Statements of Stockholders' Equity for the years ended
December 31, 2002, and 2001........................................................................................F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2001, and
2001...............................................................................................................F-6 - F-8

Notes to Consolidated Financial Statements.........................................................................F-9 - F-32
</TABLE>



                                       53
<PAGE>





                            ONCURE TECHNOLOGIES CORP.
                                AND SUBSIDIARIES

                          INDEPENDENT AUDITOR'S REPORT
                                       AND
                              FINANCIAL STATEMENTS

                           DECEMBER 31, 2002 AND 2001









<PAGE>


CONTENTS
--------------------------------------------------------------------------------



                                                                            PAGE


INDEPENDENT AUDITOR'S REPORT                                                 F-1

CONSOLIDATED FINANCIAL STATEMENTS
   Balance sheets                                                      F-2 - F-3
   Statements of operations                                                  F-4
   Statements of stockholders' equity                                        F-5
   Statements of cash flows                                            F-6 - F-8
   Notes to financial statements                                      F-9 - F-32





<PAGE>

INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders of
OnCure Technologies Corp. and Subsidiaries


We have audited the accompanying consolidated balance sheets of OnCure
Technologies Corp. and Subsidiaries as of December 31, 2002 and 2001 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of OnCure
Technologies Corp. and Subsidiaries as of December 31, 2002 and 2001, 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.




Stockton, California
March 6, 2003


                                      F-1
<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------

                                     ASSETS
<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                     -------------------------------------------
                                                           2002                    2001
                                                     -------------------    --------------------
<S>                                                          <C>                     <C>
CURRENT ASSETS
     Cash                                                    $   87,526              $   12,347
     Certificate of deposit                                     433,372                 400,000
     Accounts receivable - net                                3,582,026               5,464,097
     Prepaid expenses and other current assets                  586,473                 522,385
     Deferred income taxes                                      257,800                 246,711
                                                     -------------------    --------------------

                Total current assets                          4,947,197               6,645,540

RESTRICTED CASH                                                       -               1,025,000

NOTES RECEIVABLE                                                455,487                  25,000

PROPERTY AND EQUIPMENT - net                                 14,124,339              15,512,150

GOODWILL                                                     13,258,512              13,258,512

OTHER ASSETS, net                                                69,202                 471,694
                                                     -------------------    --------------------

                Total assets                                $32,854,737             $36,937,896
                                                     ===================    ====================
</TABLE>


F-2
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------    --------------------
<S>                                                                             <C>                     <C>
CURRENT LIABILITIES
     Accounts payable                                                           $ 3,134,032             $ 3,266,504
     Accrued liabilities                                                          1,185,249               1,682,793
     Lines of credit                                                              4,419,930               3,759,177
     Current portion of long-term debt                                            4,264,256               3,785,184
     Convertible notes payable                                                    1,500,000                       -
                                                                        --------------------    --------------------
                Total current liabilities                                        14,503,467              12,493,658

LONG-TERM DEBT                                                                   10,807,152              13,926,293

DEFERRED INCOME TAXES                                                               257,800                 246,711
                                                                        --------------------    --------------------
                Total liabilities                                                25,568,419              26,666,662
                                                                        --------------------    --------------------
MINORITY INTEREST                                                                   916,881                 653,425
                                                                        --------------------    --------------------
COMMITMENTS AND CONTINGENCIES (NOTE 13)

Common stock - contingent, 24,788 and 655,668 shares issued
     and outstanding at December 31, 2002 and 2001, respectively                     49,576               1,311,336
                                                                        --------------------    --------------------

Redeemable preferred stock (Series H), $.001 par value, 215
     shares issued and outstanding (liquidation preference $430,000)                430,000                        -
                                                                        --------------------    --------------------

STOCKHOLDERS' EQUITY
     Preferred stock, $.001 par value, 1,000,000 shares
         authorized, 3,000 shares issued and outstanding
         at December 31, 2002 and 2001                                           11,500,000              11,500,000

     Common stock, $.001 par value, 100,000,000 shares authorized,
         8,809,463 and 10,290,054 shares issued and outstanding
         at December 31, 2002 and 2001, respectively                                  8,809                  10,290

ADDITIONAL PAID-IN CAPITAL                                                        8,323,576               8,809,390

ACCUMULATED DEFICIT                                                             (13,942,524)            (12,013,207)
                                                                        --------------------    --------------------
                Total stockholders' equity                                        5,889,861               8,306,473
                                                                        --------------------    --------------------

                Total liabilities and stockholders' equity                      $32,854,737             $36,937,896
                                                                        ====================    ====================
</TABLE>

See accompanying notes                                                       F-3
--------------------------------------------------------------------------------
<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                 YEARS ENDED DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------    --------------------
<S>                                                                         <C>                     <C>
REVENUES
     Net patient service revenues                                           $    25,615,025            $ 22,732,308
                                                                        --------------------    --------------------

OPERATING EXPENSES
     Salaries and benefits                                                        7,416,587               6,362,267
     Medical supplies and services                                                5,784,940               5,325,242
     General and administrative                                                   9,858,581               8,281,627
     Non-cash stock option compensation                                                   -                  56,566
     Depreciation and amortization                                                2,274,265               3,097,583
     Impairment loss                                                                      -               2,893,851
                                                                        --------------------    --------------------
                Total operating expenses                                         25,334,373              26,017,136
                                                                        --------------------    --------------------
INCOME (LOSS) FROM OPERATIONS                                                       280,652              (3,284,828)
                                                                        --------------------    --------------------
OTHER INCOME (EXPENSE)
     Interest income                                                                 23,846                  74,314
     Interest expense                                                            (2,624,148)             (2,467,891)
     Amortization of deferred loan costs                                                  -                (161,077)
     Other expense, net                                                            (552,116)               (415,714)
     Gain (loss) on disposal of assets                                            1,453,789                (619,860)
                                                                        --------------------    --------------------
                Total other expense, net                                         (1,698,629)             (3,590,228)
                                                                        --------------------    --------------------

LOSS BEFORE MINORITY INTEREST
     AND INCOME TAX BENEFIT                                                      (1,417,977)              (6,875,056)

MINORITY INTEREST                                                                  (211,340)                (580,896)

INCOME TAX BENEFIT                                                                       -                   290,873
                                                                        --------------------    --------------------
NET LOSS                                                                      $  (1,629,317)           $  (7,165,079)
                                                                        ====================    ====================
NET LOSS                                                                      $  (1,629,317)           $  (7,165,079)

Deduct:     Preferred stock dividends                                             1,162,500                  834,250
                                                                        --------------------    --------------------

NET LOSS USED IN PER COMMON
     SHARE CALCULATION                                                        $  (2,791,817)           $  (7,999,329)
                                                                        ====================    ====================

BASIC AND DILUTED LOSS PER
     COMMON SHARE                                                             $       (0.29)           $       (0.89)
                                                                        ====================    ====================

WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING - basic and diluted                                              9,789,358                9,018,330
                                                                        ====================    ====================
</TABLE>


F-4                                                       See accompanying notes
--------------------------------------------------------------------------------
<PAGE>


                   ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                                    FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                                              ------------------------------------------------------------------------------
                                                     Preferred Stock                Common Stock
                                              ----------------------------- ------------------------------    Additional
                                                Number of                      Number of                        Paid-in
                                                 Shares         Amount           Shares         Amount          Capital
                                              ------------- --------------- ---------------- ------------- -----------------
<S>                                                  <C>         <C>           <C>             <C>           <C>
BALANCE, JANUARY 1, 2001                             1,000     $ 5,000,000     7,412,316       $  7,413      $  6,714,238

Preferred stock - acquisition                        1,000       2,500,000             -              -                 -
Preferred stock issued for cash, net                 1,000       4,000,000             -              -          (753,637)
Accrued dividends                                        -               -             -              -           (84,250)
Dividends paid on preferred stock                        -               -             -              -                 -
Redeemable preferred stock
    exchanged for common stock                           -               -     1,337,738          1,337         2,807,913
Common stock issued for services
    and debt                                             -               -       530,000            530            59,470
Exercise of options and warrants                         -               -     1,010,000          1,010             9,090
Amortization of deferred compensation                    -               -             -              -                 -
Variable stock options award  adjustment                 -               -             -              -          (380,134)
Compensation from issuance of stock
    options and warrant re-pricing                       -               -             -              -            436,700
Net loss                                                 -               -             -              -                  -
                                              ------------- --------------- ---------------- ------------- -----------------

Balance, December 31, 2001                           3,000      11,500,000    10,290,054         10,290          8,809,390

Common stock exchanged for
    interest in partnership                             -                -      (642,833)          (643)          (417,198)
Sale of Corpus Christi Acquisition, LLC                 -                -      (837,758)          (838)          (300,755)
Discount on convertible note                            -                -             -              -            232,139
Dividends paid                                          -                -             -              -                  -
Net loss                                                -                -             -              -                  -
                                              ------------- --------------- ---------------- ------------- -----------------
Balance, December 31, 2002                           3,000     $11,500,000     8,809,463        $  8,809      $  8,323,576
                                              ============= =============== ================ ============= =================


<CAPTION>

                                               FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                                             ----------------------------------------------------

                                                                                      Total
                                                Deferred        Accumulated       Stockholders'
                                              Compensation        Deficit             Equity
                                             --------------- ------------------ -----------------
<S>                                          <C>              <C>                     <C>
BALANCE, JANUARY 1, 2001                     $   (71,050)     $  (4,548,129)       $  7,102,472

Preferred stock - acquisition                          -                  -           2,500,000
Preferred stock issued for cash, net                   -                  -           3,246,363
Accrued dividends                                      -                  -             (84,250)
Dividends paid on preferred stock                      -           (300,000)           (300,000)
Redeemable preferred stock
    exchanged for common stock                         -                  -           2,809,250
Common stock issued for services
    and debt                                           -                  -              60,000
Exercise of options and warrants                       -                  -              10,100
Amortization of deferred compensation             71,050                  -              71,050
Variable stock options award  adjustment               -                  -            (380,134)
Compensation from issuance of stock
    options and warrant re-pricing                     -                  -             436,700
Net loss                                               -         (7,165,078)         (7,165,078)
                                             --------------- ------------------ -----------------

Balance, December 31, 2001                             -        (12,013,207)          8,306,473

Common stock exchanged for
    interest in partnership                            -                  -            (417,841)
Sale of Corpus Christi Acquisition, LLC                -                  -            (301,593)
Discount on convertible note                           -                  -             232,139
Dividends paid                                         -           (300,000)           (300,000)
Net loss                                               -         (1,629,317)         (1,629,317)
                                             --------------- ------------------ -----------------
Balance, December 31, 2002                     $       -       $ (13,942,524)       $  5,889,861
                                             =============== ================== =================
</TABLE>


F-5                                                       See accompanying notes
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                 YEARS ENDED DECEMBER 31,
                                                                        --------------------------------------------
                                                                                2002                     2001
                                                                        --------------------    --------------------
<S>                                                                           <C>                     <C>
OPERATING ACTIVITIES
     Net loss                                                                  $(1,629,317)            $(7,165,078)
     Adjustments to reconcile net loss to net
         cash from operating activities:
            Depreciation and amortization                                        2,565,791               3,258,660
            (Gain) loss on disposal of property and equipment                     (380,250)                619,860
            Gain on sale of Corpus Christi Acquisition, LLC                     (1,009,422)                      -
            Gain on litigation settlement                                         (136,336)                      -
            Provision for doubtful accounts                                        488,739                       -
            Impairment loss                                                              -               2,893,851
            Stock-based compensation expense                                             -                  71,050
            Minority interest in income of subsidiary                              211,340                 580,896
            Deferred income taxes                                                        -                (290,873)
            Non-cash stock option and warrant
                compensation                                                             -                  56,566
            Write-down of investment in partnership                                      -                 338,065
     Changes in assets and liabilities:
            Accounts receivable - net                                            1,142,234                 (21,556)
            Prepaid expenses and other
              current assets                                                       (68,431)               (193,098)
            Other assets                                                           (15,850)                231,660
            Accounts payable and accrued expenses                                 (527,127)                862,465
                                                                        -------------------     -------------------
                Net cash from operating activities                                 641,371               1,242,468
                                                                        -------------------     -------------------
INVESTING ACTIVITIES
     Purchases of property and equipment                                        (4,718,849)             (2,657,676)
     Proceeds from sale of property of equipment                                 2,276,383                       -
     Investment in certificate of deposit                                          (33,372)               (400,000)
     Investment in partnership                                                           -                (889,408)
     Restricted cash                                                             1,025,000              (1,025,000)
     Investments in notes receivable                                              (430,487)                (25,000)
                                                                        -------------------     -------------------
                Net cash from investing activities                              (1,881,325)             (4,997,084)
                                                                        -------------------     -------------------
</TABLE>

F-6
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                 YEARS ENDED DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------   ---------------------
<S>                                                                             <C>                   <C>
FINANCING ACTIVITIES
     Preferred stock issued, net of offering cost                                   430,000               3,246,363
     Common stock issued                                                                  -                  10,100
     Convertible note payable issued                                              1,267,861                       -
     Detachable common stock warrants issued                                        232,139                       -
     Proceeds from long-term debt                                                 4,363,397               2,525,603
     Repayments of long-term debt                                                (4,976,538)             (3,312,785)
     Redemption of common stock - contingent                                       (545,420)               (335,000)
     Repayment of note payable to stockholder                                             -                (300,000)
     Net increase in lines of credit                                                843,694               2,181,986
     Dividends paid                                                                (300,000)               (300,000)
                                                                        --------------------   ---------------------
                Net cash from financing activities                                1,315,133               3,716,267
                                                                        --------------------   ---------------------
NET CHANGE IN CASH                                                                   75,179                 (38,349)

CASH, beginning of year                                                              12,347                  50,696
                                                                        --------------------   ---------------------
CASH, end of year                                                                $   87,526             $    12,347
                                                                        ====================   =====================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
     Cash paid during the periods for:
       Interest                                                                  $2,435,413             $ 2,383,485
     Income taxes                                                                $   12,713             $    15,671

SUPPLEMENTAL SCHEDULES OF NONCASH
INVESTING AND FINANCING ACTIVITIES:

Effect of Acquisitions:
     Excess of purchase price over fair
         value of net assets acquired                                            $        -             $   940,967
     Other assets acquired                                                                -                 342,493
     Property  and equipment                                                              -               1,250,000
                                                                        --------------------   ---------------------
                Total assets acquired, net of cash                                        -               2,533,460

     Liabilities assumed                                                                  -                 (33,460)
     Issuance of preferred stock                                                          -              (2,500,000)
                                                                        --------------------   ---------------------
                Cash paid for acquisitions                                       $        -             $         -
                                                                        ====================   =====================
</TABLE>

                                                                             F-7
--------------------------------------------------------------------------------

<PAGE>


ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                 YEARS ENDED DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------    --------------------
<S>                                                                              <C>                       <C>
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES (continued)

Effect of Sale - Corpus Christi Acquisition, LLC:
     Assets sold:
         Accounts receivable                                                     $  251,098             $         -
         Property and equipment                                                   1,929,000                       -
         Other assets                                                                 4,843                       -
                                                                        --------------------    --------------------
            Total assets sold                                                     2,184,941                       -

     Debt assumed by Dolphin Medical, Inc.:
     Accounts payable and accrued expenses                                          102,893                       -
     Lines of credit - DVI Financial Services, Inc.                                 182,941                       -
     Notes payable - DVI Financial Services, Inc.                                 2,603,257                       -
     Other debt                                                                       3,679                       -
                                                                        --------------------    --------------------
            Total debt assumed                                                    2,892,770                       -

     Common stock exchanged - DVI Financial Services, Inc.                          301,593                       -

     Gain on sale of Corpus Christi Acquisition, LLC                              1,009,422                       -
                                                                        --------------------    --------------------
            Cash received from sale                                              $        -             $         -
                                                                        ====================    ====================

     Preferred stock issued for financing                                        $        -             $ 2,500,000
     Common stock exchanged for redeemable
         preferred stock                                                         $        -             $ 2,809,250
     Debt converted to equity                                                    $        -             $    60,000
     Debt converted to common stock - contingent                                 $        -             $   716,336
     Dividends accrued                                                           $        -             $    84,250
     Accrued redemption of common stock -
         contingent                                                              $        -             $   295,000
     Common stock exchanged for partnership interest                             $  417,841             $         -
     Common stock - contingent converted to debt                                 $  580,000             $         -
</TABLE>


F-8                                                       See accompanying notes
--------------------------------------------------------------------------------
<PAGE>


                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - ORGANIZATION AND OPERATIONS

OnCure Technologies Corp. (referred to herein as "we", the "Company" or
"OnCure") is a Florida corporation formed in 1993. OnCure is engaged in the
development, acquisition and ownership of outpatient radiation oncology
facilities. Additionally, we provide the software, management services,
facilities and equipment, administration and technical support, and ancillary
services necessary for physicians to establish and maintain a fully integrated
network of outpatient radiation oncology care.

The Company conducts its business principally through our wholly-owned
subsidiary, U.S. Cancer Care, Inc. ("USCC"). USCC operates five centers in
Florida, and the five centers in California. USCC also operates a mobile High
Dose Rate Brachytherapy ("HDR") unit, which services the five treatment
facilities in California. USCC also owns and operates a mobile CAT-Scan
Treatment Planning System, which services five of our facilities in
Jacksonville, Florida.

We are a 50% owner and managing general partner of a partnership that operates
one oncology center and a HDR unit in Florida. As the managing general partner,
we have sole decision making responsibilities related to partnership operating
and financial policies including control of partnership assets. Accordingly, the
partnership balance sheet and statement of operations have been included in our
consolidated financial statements for all years presented.

We have one mobile Positron Emission Tomography ("PET") unit servicing the
Florida cancer centers. The PET unit is owned and operated by a limited
liability company of which we own 100% (the "PET LLC"). The PET LLC was formed
on March 6, 2000 and the unit began operating in 2001. The balance sheet and
statement of operations of the PET LLC as of and for the year ended December 31,
2002 and 2001 have been included in our consolidated financial statements.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of OnCure Technologies Corp. and its wholly-owned subsidiaries, and one
entity that is 50% owned but under effective control. All significant
intercompany accounts and transactions have been eliminated.

MANAGEMENT'S OPERATING PLAN - The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. We have
incurred net losses of approximately $1.7 million and $7.2 million (including
non-recurring, non-cash charges of $4.4 million) for fiscal 2002 and 2001,
respectively. As a result, the Company has undertaken certain initiatives in
fiscal 2002 and 2003 that it believes will increase revenues, raise cash,
improve cash flow and reduce debt obligations. The following is a summary of
each initiative.

                                                                             F-9
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - ORGANIZATION AND OPERATIONS (CONTINUED)

OFFERING ADVANCED TREATMENT TECHNOLOGIES TO INCREASE NET PATIENT REVENUE

The reimbursement rates that the Company receives for procedures performed with
state-of-the art treatment technologies, such as Intensity Modulated Radiation
Therapty ("IMRT") and 3-Dimensional Conformal Treatment Planning ("3-D Treatment
Planning"), are generally higher than procedures performed with less advanced
equipment. For this reason, we invested approximately $4.4 million in medical
equipment and computer software to offer IMRT and 3-D treatment planning
services during fiscal 2002. Currently, IMRT and 3-D treatment services are
being offered at our Valley Regional Cancer Center, Wells Complex Clinic,
Florida Cancer Center-Orange Park and Florida Cancer Center - St. Johns. We also
intend to offer such advanced treatment technologies at our Radiation Oncology
Center of Bradenton, Florida Cancer Center - Palatka and Florida Cancer Center -
Beaches in 2003. The Company financed the cost of its investment in such
advanced treatment technologies during 2002 by obtaining financing from DVI
Financial Services, Inc. ("DVI") and intends to obtain financing from DVI, or
another medical equipment lender, to acquire additional advanced treatment
technologies in the future.

SALE OF UNDER-PERFORMING FACILITIES

Effective September 30, 2002, the Company sold all of its ownership interest in
its wholly-owned subsidiary Corpus Christi Acquisition, LLC ("CCA") and recorded
a gain of approximately $1.0 million on the sale (Note 12). The Company sold its
interest in CCA, which operated the Company's center located in Corpus Christ,
Texas, because of CCA's history of losses. Specifically, CCA suffered losses of
$539,000 in fiscal year 2001 and $274,000 as of the third quarter ended
September 30, 2002.

CONVERSION TO EARNINGS MODEL

The Company has developed an "earnings model" in which the fees that our
affiliated physician groups receive are based on a center's earnings before
interest, taxes, depreciation, and amortization. We believe that this fee
arrangement properly aligns our economic interests with those of our affiliated
physician groups - giving our physician groups an incentive to keep costs down
and increase revenues.

During 2002, we embarked on a campaign to offer each of our affiliated
physicians that were not operating under the earnings model to terminate their
existing agreements with us and enter into new arrangements under the earnings
model. Through our efforts, substantially all of our affiliated physician groups
now operate under the earnings model.

F-10
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - ORGANIZATION AND OPERATIONS (CONTINUED)

REDUCE LABOR COSTS

Due to a labor shortage of radiation therapists and physicists, the Company has
been forced to retain temporary contract labor at much higher labor costs. In an
effort to reduce this operating cost, the Company launched a recruiting campaign
to replace temporary contract labor with permanent radiation therapists and
physicians (who generally cost less to retain). During the first quarter of
2003, the Company has been able to reduce the number of temporary contract labor
personnel it retains from 17 to 12 and anticipates that it will be able to
reduce this number further during 2003.

RENEGOTIATE FEE ARRANGEMENTS

During 2002, the Company entered into discussions with certain third party
payors concerning reimbursement fee arrangements. As a result of these
discussions, the Company's agreement with these payors was amended to increase
the amount of fees that the Company receives. These new arrangements could
result, based on certain estimated census data, in increased services fees of
approximately $528,000 in 2003.

ACQUISITIONS

In May 2002, the Company acquired Positron Imaging Technologies, LLC's 20%
ownership interest in JAXPET/Positech LLC ("JAXPET"). As a result of this
acquisition, the Company now owns 100% of JAXPET. JAXPET operates our mobile PET
scanning unit in Florida and recorded a profit of $349,000 in fiscal 2002.

On January 28, 2003, the Company formed a joint venture with Ninth City
Landowners, LLP and FROG OnCure Southside, LLC (the "Venture"). On January 31,
2003, the Venture acquired certain assets of the Southside Cancer Center in
Jacksonville, Florida. The Southside Cancer Center has had a history of
profitable operations (Note 14).

SALE OF PROPERTY TO RETIRE LONG TERM DEBT AND TO FUND OPERATING EXPENSES

The Company raised approximately $2.3 million in cash through the sale of
certain properties. The Company sold and leased-back, under operating leases,
Valley Regional Patient Care Center, Florida Cancer Center - Wells Complex
Clinic and Florida Cancer Center - Palatka. The Company also sold land located
in St. Augustine, Florida, which was not used in the Company's business. The net
proceeds from the sale of these properties were used to retire long-term debt
and fund operating expenses.

The Company believes that the initiatives it plans to take, and the initiatives
it has taken thus far will eventually improve the financial performance of the
Company. However, the Company cannot give any assurance that any of the proposed
initiatives will improve the financial performance of the Company or will not
have a material adverse effect on the Company in the future.

                                                                            F-11
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS - OnCure considers all highly liquid investments with
original maturities of three months or less to be cash equivalents. As of
December 31, 2002 and 2001, cash consisted entirely of funds maintained in
demand deposit accounts at financial institutions.

RESTRICTED CASH - Restricted cash consisted of a money market account at Merrill
Lynch Bank USA that must be maintained to collateralize a line of credit balance
with that institution. The line of credit and the corresponding cash maintenance
requirement were terminated in 2002.

ACCOUNTS RECEIVABLE - Accounts receivable represent receivables from patients
and other third-party payors for medical services provided by OnCure through its
facilities and contracted physicians. Accounts receivable represent gross
billings for patient services less estimated contractual and other adjustments.
Accounts receivable allowances were $14,151,145 and $15,284,854 at December 31,
2002 and 2001, respectively.

PROPERTY AND EQUIPMENT - Property and equipment purchased is stated at cost.
Property and equipment acquired in a business combination is stated at estimated
fair value at the date of acquisition. Depreciation is calculated using the
straight-line method over the following estimated useful lives:

Buildings                                                      25 to  39  Years
Furniture and Equipment                                         5 to   7  Years
Medical Equipment                                               5 to  10  Years
Leasehold Improvements                                          3 to  25  Years

Depreciation expense of $2,565,791 and $2,363,528 was recognized for the years
ended December 31, 2002 and 2001, respectively. Expenditures for maintenance and
repairs, which do not improve or extend the life of the respective assets are
expensed currently while major repairs are capitalized.

GOODWILL - Goodwill consists of the cost of purchased businesses in excess of
the fair value of net assets acquired. We record goodwill and other intangible
assets in accordance with Statement of Financial Accounting Standards ("FAS")
No. 141, "Business Combinations," and "FAS" No. 142, "Goodwill and Other
Intangible Assets." According to provisions of these pronouncements, acquirers
in a business combination must allocate portions of the purchase price to
specifically identifiable intangible assets and, beginning the first quarter in
2002, goodwill and identifiable intangible assets determined to have an
indefinite useful life are no longer amortized, but are tested for impairment
annually, or earlier if indicators of potential impairment exist. All other
intangible assets determined to have finite useful lives continue to be
amortized using the straight-line method over their estimated useful lives. As
required by these pronouncements, we discontinued amortizing our goodwill asset
beginning January 1, 2002. Prior to the adoption of "FAS" 141 and 142, Goodwill
was amortized on a straight-line basis over a period of 20 years. Accumulated
amortization was $2,512,641 at December 31, 2001.

F-12
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

We evaluated long-lived assets, including the excess of cost over the net assets
of outpatient centers acquired, and performed an analysis to determine if the
expected future net cash flows (undiscounted) were less than the carrying amount
of the assets at December 31, 2001. Based on our evaluation of net future
undiscounted cash flows of each of our centers, the lowest level of asset
grouping from which separate cash flows could be identified, we determined that
the expected net future undiscounted cash flows did not support the carrying
value of the long-lived assets of the Corpus Christi center. The carrying value
of the long-lived assets was compared with fair value of those assets based upon
a discounted cash flow analysis to determine impairment. Based on the analysis,
an impairment loss of $2,893,851 was recorded as a reduction to operating income
as required by 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." The impairment loss consisted of a write-off of $2,254,478 in
goodwill, net of accumulated amortization, recorded upon acquisition of the
center and a write-down of $422,137 of the carrying value of the center's land
and building. The 2001 impairment loss also consists of a write-off of the
unamortized computer software costs of $217,236. We ceased using the software
program in the third quarter of 2001.

OTHER ASSETS - Other assets include miscellaneous capitalized costs expected to
benefit future periods. In 2001, other assets consisted primarily of our
investments in partnerships accounted for under the equity method of accounting
(see Note 12).

MINORITY INTEREST - The minority interest represents the minority percentage
ownership in the net assets of a subsidiary.

REVENUE RECOGNITION - Net patient service revenues are recorded at the estimated
net realizable amounts and consist primarily of fees for medical services
provided by the Company under fee-for-service type arrangements with various
payers including the Medicare and Medicaid programs, health maintenance
organizations (HMOs), insurance companies and private payors. Revenue under
fee-for-service arrangements is recognized as the services are rendered.
Contractual and bad debt adjustments were approximately $95.4 million and $61.0
million for the years ended December 31, 2002 and 2001, respectively. These
adjustments are recorded on an estimated basis in the period the related
services are rendered and adjusted in future periods as actual payments are
received.

STOCK OPTIONS - At December 31, 2002, the Company has a stock-based employee
compensation plan that is described more fully in Note 10. The Company accounts
for the plan under the intrinsic value method of APB Opinions No. 25, Accounting
for Stock Issued to Employees, and related Interpretations. If the computed fair
value of the 2002 and 2001 awards had been amortized to expense over the vesting
period of the awards, pro forma loss and net loss per share for 2002 and 2001
would not change materially from the amounts represented in the accompanying
statements of operations.

                                                                            F-13
--------------------------------------------------------------------------------

<PAGE>


ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES - Deferred taxes arise primarily from the recognition of revenues
and expenses in different periods for income tax and financial reporting
purposes. Deferred tax liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be settled. The effect on deferred tax liabilities
of a change in tax rates is recognized in income in the period that includes the
enactment date.

RECLASSIFICATIONS - Certain amounts in the 2001 financial statements have been
reclassified to conform with the 2002 presentation.

USE OF ESTIMATES IN THE 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. The most significant estimates relate to contractual and
bad debt allowances on accounts receivable, useful lives on medical equipment
and the valuation of long-lived and intangible assets.

FINANCIAL INSTRUMENTS - The carrying amounts of financial instruments, including
cash and cash equivalents, accounts receivable and accounts payable approximated
fair value as of December 31, 2002 and 2001 because of the relative short
maturity of these instruments. The carrying value of lines of credit
approximated fair value at December 31, 2002 and 2001 based upon quoted market
interest rates for the same or similar instruments under which the Company can
borrow funds. OnCure has approximately $14.5 million in fixed rate term debt
with interest rates between 8% and 12% at December 31, 2002. We believe based
upon our recent borrowing experience that the current market rates available for
similar instruments under similar terms would be between 8% and 10%. However, we
do not believe it is practicable to estimate the fair value of each of these
instruments because the actual rates available to us would depend on various
facts and circumstances of each instrument and costs incurred to measure this
would be excessive.

LOSS PER SHARE - Basic earnings per share represents the amount of earnings for
the period available to each share of common stock outstanding during the
reporting period. Diluted earnings per share reflects the amount of earnings for
the period available to each share of common stock outstanding during the
reporting period, while giving effect to all dilutive potential common shares
that were outstanding during the period, such as common shares that could result
from the potential exercise or conversion of securities into common stock. The
computation of diluted earnings per share does not assume conversion of exercise
of securities that would have an antidilutive effect on earnings per share. Loss
attributable to common stockholders reflects an addition to net loss resulting
from 1) preferred stock dividends declared and paid and cumulative preferred
stock dividends and 2) the imputed non-cash preferred stock dividends arising
from the amortization of the discounts on preferred stock.

F-14
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CONCENTRATIONS OF CREDIT RISK - Financial instruments which potentially subject
the Company to concentrations of credit risk consist primarily of accounts
receivable and funds maintained in demand deposit and money market accounts at
financial institutions. We generally do not require collateral or other security
in extending credit to patients; however, the Company routinely obtains
assignments of (or is otherwise entitled to receive) benefits receivable under
health insurance programs, plans, or policies of patients. We maintain our cash
balances in a financial institution. These cash balances at times may exceed
federally insured limits. The Company has not experienced any losses in such
accounts and believes it is not exposed to any significant credit risk on cash
and cash equivalents.

The Medicare and Medicaid government reimbursement programs account for a
certain amount of the Company's gross revenue. Currently, expenditure reduction
efforts within the United States Congress have created uncertainty over the
volume of future health care funding. While the health care funding reduction
issues are presently ongoing, it is at least reasonably possible that the
ultimate resolutions could have a negative impact on the Company's future
reimbursement for patient services.

NEW ACCOUNTING PRONOUNCEMENTS - During the year 2002 the Financial Accounting
Standard Board issued the following accounting standards.

Statement of Financial Standard (SFAS) No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. This Statement rescinds FASB Statement No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and an amendment of that Statement, FASB
Statement No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements. This Statement also rescinds FASB Statement No. 44, Accounting for
Intangible Assets of Motor Carriers. This Statement amends FASB Statement No.
13, Accounting for Leases, to eliminate an inconsistency between the required
accounting for sale-leaseback transactions and the required accounting for
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. This Statement also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. The Company
implemented this statement effective April 1, 2002. Implementation of this
statement did not result in a material impact on its financial position or
results of operations.

SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities,
addresses financial accounting and reporting for the treatment of costs
associated with exit or disposal activities. This Statement improves financial
reporting by requiring that a liability for a cost associated with an exit or
disposal activity be recognized and measured initially at fair value only when
the liability is incurred. This Statement replaces EITF Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity. The provisions of this Statement are to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
The Company does not expect the Statement will result in a material impact on
its financial position or results of operations.

                                                                            F-15
--------------------------------------------------------------------------------

<PAGE>


ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SFAS No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure an amendment of FASB Statement No. 123. This Statement amends FASB
No. 123, to provide alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
In addition, it amends the disclosure requirements of Statement 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. As of December 31, 2002, the Company has
adopted the disclosure requirements of the Statement and continues to follow the
intrinsic value method to account for stock-based employee compensation.

In January, 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 46, Consolidation of Variable Interest Entities, An
Interpretation of ARB No. 51 (FIN 46). FIN 46 defines variable interest entities
and prescribes under what circumstances variable interest entities would be
subject to consolidation requirements. The definition of variable interest
entities under FIN 46 and the issues related to the interpretation's
requirements are complex and management is currently evaluating the impact of
FIN 46 on the Company and certain of its related parties. However, it is at
least reasonably possible that FIN 46 will apply to the Company. Should FIN 46
apply, the interpretation would require a determination of primary beneficiary
between the Company and its related parties with the determined primary
beneficiary potentially consolidating the other company or companies in its
financial statements. FIN 46 is effective at the end of the first annual
reporting period beginning after June 15, 2003 (December, 2004).

The Company's activities with and relationship to its related parties are
discussed further at Notes 12 and 14.

OTHER EXPENSES - 2002 net other expense consists primarily of $673,327 in
acquisition costs incurred related to an unsuccessful merger effort and a
$136,336 gain from a litigation settlement (Note 9). 2001 net other expense
consists primarily of a loss on litigation settlement of $338,065 (Note 12).


NOTE 3 - MERGERS AND ACQUISITIONS

On January 12, 2001, we merged with Florida Cancer Center - Beaches, P.A., a
Florida professional association ("Beaches"). The transaction was accounted for
under the purchase method of accounting for business combinations. The Company
is the surviving entity and is considered the purchaser in this transaction. We
acquired Beaches, with identifiable assets and liabilities having an aggregate
fair value of $1,559,033, in exchange for issuance of 1,000 shares of Series D
preferred stock with a liquidation preference of $2,500 per share (Note 9) to
the owners of Beaches. Excess cost over fair value of net assets acquired of
$940,967 is recorded as goodwill in the financial statements. The operating
results of Beaches for the years ended December 31, 2002 and 2001 are included
in the consolidated financial statements.

F-16
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4 - NOTES RECEIVABLE

In October 2002, we advanced $102,000 to the DragonSlayer Oncology Medical Group
in exchange for a note receivable. The note bears interest at 8.75% and is due
October 20, 2008. The note is collateralized by a life insurance policy under
which we are the designated beneficiary.

During 2002, we made cash advances of $353,487 to DragonSlayer Oncology Medical
Group. The advances are non-interest bearing, unsecured, and are to be repaid
through deductions from future professional fees under the existing management
service agreement.


NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                             -------------------------------------------
                                                    2002                    2001
                                             --------------------    -------------------
<S>                                                   <C>                   <C>
Land                                                  $   90,000            $ 1,335,000
Building                                                 533,131              2,683,073
Furniture and fixtures                                   807,195                789,300
Medical equipment                                     16,802,795             13,359,932
Leasehold improvements                                 2,199,044              2,077,140
                                             --------------------    -------------------
Total, at cost                                        20,432,165             20,244,445
Less: accumulated depreciation                        (6,307,826)            (4,732,295)
                                             --------------------    -------------------
Property and equipment, net                          $14,124,339            $15,512,150
                                             ====================    ===================
</TABLE>






                                                                            F-17
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 6 - GOODWILL

The following is a reconciliation of reported net loss and basic and diluted net
loss per share to the adjusted amounts had FAS No. 142 been applied at the
beginning of 2001 for the year ended December 31, 2001:

<TABLE>
<CAPTION>
NET LOSS

<S>                                                                                                   <C>
Reported net loss                                                                                     $ (7,165,079)

Add back:  Goodwill amortization                                                                           923,965
                                                                                                --------------------

Adjusted net loss                                                                                       (6,241,114)

Deduct:  Preferred stock dividends                                                                        (834,250)
                                                                                                --------------------

Adjusted net loss used in per
     common share calculation                                                                         $ (7,075,364)
                                                                                                ====================

BASIC AND DILUTED LOSS PER SHARE

Reported basic and diluted loss per share                                                               $    (0.89)

Add back:  Goodwill amortization                                                                              0.10
                                                                                                --------------------

Adjusted basic and diluted loss per share                                                               $    (0.79)
                                                                                                ====================
</TABLE>



NOTE 7 - INDEBTEDNESS

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------    --------------------
     <S>                                                                      <C>                     <C>
     Notes payable, 8.17% to 15.00%, maturing between                           $14,491,408             $16,686,477
         2002 and 2009
     Merrill Lynch Bank USA line of credit                                                -               1,025,000

     Convertible notes payable, 8%, maturing 2003                                 1,500,000                       -

     Note payable to former Director, 6%, maturing 2008                             580,000                       -
                                                                        --------------------    --------------------

     Total                                                                       16,571,408              17,711,477
     Less: current maturities                                                     5,764,256               3,785,184
                                                                        --------------------    --------------------

                                                                                $10,807,152             $13,926,293
                                                                        ====================    ====================
</TABLE>


F-18
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 7 - INDEBTEDNESS (CONTINUED)

As of December 31, 2002, the maturities of notes payable and convertible
promissory notes are as follows:

                  Years ending
                  December 31,
               ------------------
                      2003                           $ 5,764,256
                      2004                             3,510,789
                      2005                             2,614,723
                      2006                             2,113,863
                      2007                             1,487,882
                   Thereafter                          1,079,895
                                              -------------------
                     Total                           $16,571,408
                                              ===================


DVI NOTES PAYABLE - At December 31, 2002 and 2001, we had thirty-eight long-term
notes payable totaling $11,639,991 and $12,970,814, respectively, to DVI
Financial Services, Inc. ("DVI"), the beneficial owner of more than 5% of our
voting securities and holder of our Series C Preferred Stock, and $2,851,417 and
$3,715,663, respectively, in notes payable with other equipment financing
companies. Substantially all of equipment and certain tangible assets
collateralize the notes payable, in addition to an interest in our receivables.
Interest is charged at annual rates ranging from 8.17% to 15.00%, and the notes
mature through 2009. Provisions of the agreements require maintenance of certain
financial ratios, periodic reporting requirements, and other covenant compliance
requirements.

LINES OF CREDIT - At December 31, 2002, we had several lines of credit with DVI
for a maximum borrowing limit of $4,750,000, subject to borrowing base
restrictions. Borrowings under each line of credit are collateralized by
accounts receivable of several treatment centers and are limited to eighty-five
percent (85%) of eligible accounts receivable, as defined in the borrowing
agreement. At December 31, 2002, the Company had borrowings of $4,419,930
outstanding under the line of credit agreements. Borrowing under the line of
credit agreements are subject to interest ranging from prime plus 2% to prime
plus 2.25%. At December 31, 2002, the interest rate under the agreements ranged
from 6.25% to 6.50%. According to amendments to the lines of credit we completed
with DVI on December 27, 2001, the lines of credit do not expire and are not due
until June 2004. However, because the terms of the agreements require the
maintenance of lockboxes whereby accounts receivable remittances pay down the
lines of credit directly and contain a subjective acceleration clause, we have
classified the balances on the lines of credit as current in accordance with
Emerging Issues Task Force (EITF) abstract 95-22, Balance Sheet Classification
of Borrowings Outstanding under Revolving Credit Agreements That Include both a
Subjective Acceleration Clause and Lock-Box Arrangement.


F-19
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 7 - INDEBTEDNESS (CONTINUED)

In March 2001, we obtained a line of credit with Merrill Lynch Bank USA. The
maximum borrowing base under the line of credit is $2,800,000. A security
deposit sufficient to support the outstanding principal amount secured
borrowings under the line of credit. At December 31, 2001, we had borrowings in
the amount of $1,025,000. The line of credit was fully repaid in the third
quarter of 2002.

CONVERTIBLE NOTE PAYABLE - The Company issued convertible notes payable to
Crossbow Venture Capital in the principal amount of $1.0 million and $500,000 on
May 15, 2002 and December 23, 2002, respectively. Each note bears interest at
the rate of 8% per annum, matures on May 15, 2003, and is unsecured. The May
note is convertible into 500 shares of the Company's Series H Stock (Note 9).
The December note is convertible into 250 shares of the Company's Series H Stock
or, at the option of Crossbow, such other series of preferred stock that may be
issued by the Company prior to the maturity date of the December note. The May
note agreement included a detachable warrant to purchase 1,000,000 shares of
common stock with an exercise price of $.75. A discount of $232,139 was
allocated to the note payable with an offset to additional paid in capital to
recognize the value of the detachable warrants issued. The discount on the note
was fully amortized to interest expense during 2002.

NOTE PAYABLE TO FORMER DIRECTOR - In conjunction with a settlement agreement
(Note 9), we issued an unsecured $580,000 note at 6% interest with monthly
payments of $10,919 due in 2008.


NOTE 8 - INCOME TAXES

The provision (benefit) for income taxes consists of the following:

                                                   DECEMBER 31,
                                    --------------------------------------------
                                           2002                    2001
                                    --------------------    --------------------
    Deferred:
     Federal                                   (791,446)             (2,794,907)
     State                                       35,407                (523,210)
                                    --------------------    --------------------
                                               (756,039)             (3,318,117)
Increase in valuation allowance                 756,039               3,027,244
                                    --------------------    --------------------
     Income tax benefit                       $       -             $  (290,873)
                                    ====================    ====================


F-20
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 8 - INCOME TAXES (CONTINUED)

A reconciliation between reported income tax (benefit) and the amount computed
by applying the statutory Federal income tax rate of 34% is as follows:

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------    --------------------
    <S>                                                                       <C>                    <C>
     Computed Federal tax (benefit) at 34%                                     $  (553,968)           $ (2,535,023)
     Computed state tax (benefit)                                                 (116,822)               (534,591)
     Federal tax benefit of state tax                                               39,719                 181,761
     Other differences                                                            (124,968)               (430,264)
     Valuation allowance                                                           756,039               3,027,244
                                                                        --------------------    --------------------
     Income tax benefit                                                        $         -            $   (290,873)
                                                                        ====================    ====================
</TABLE>

The Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                        --------------------------------------------
                                                                               2002                    2001
                                                                        --------------------    --------------------
    <S>                                                                       <C>                    <C>
Current deferred tax asset:
     Allowance for doubtful accounts                                           $   189,300            $    182,798
     Accrued wages and benefits                                                     68,500                  63,913
                                                                        --------------------    -------------------
Net current deferred tax asset                                                     257,800                 246,711
                                                                        --------------------    -------------------
Non-current deferred tax asset:
     Net operating loss carryforward                                             4,787,288               3,027,244
     Valuation allowance                                                        (3,783,283)             (3,027,244)
     Intangibles and other asset basis differences                                  36,814                 962,229
Non-current deferred tax liabilities:
     Fixed asset basis differences                                              (1,298,619)             (1,208,940)
                                                                        --------------------    -------------------
Net non-current deferred income tax liability                                     (257,800)               (246,711)
                                                                        --------------------    -------------------
         Net deferred income tax liability                                     $         -            $          -
                                                                        ====================    ===================
</TABLE>

We believe that the realization of the net current deferred tax asset is more
likely than not, based on the expectations that the Company will generate the
necessary taxable income in 2003.

                                                                            F-21
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 8 - INCOME TAXES (CONTINUED)

A valuation allowance has been established for the portion of the net operating
loss carryforward asset ("NOL carryforward") in excess of other net noncurrent
deferred liabilities. The utilization of the excess NOL carryforward is
uncertain due to our results of operations as described at Management's
Operating Plan at Note 1 and the Company's annual use limitation on portions of
the NOL carryforward.

At December 31, 2002, the Company had unused federal net operating losses of
approximately $12.9 million expiring from 2014 to 2022. Due to the Company's
reorganization, certain federal and state net operating losses are subject to
maximum aggregate annual utilization of approximately $327,000.


NOTE 9 - CAPITAL STOCK

OnCure is authorized to issue 100,000,000 shares of $.001 par value common stock
and 1,000,000 shares of $.001 par value preferred stock, of which 1,000 shares
have been designated Series B Preferred Stock and subsequently retired and
eliminated, 1,000 shares have been designated Series C Preferred Stock
(liquidation preference of $5,000,000), 1,000 shares have been designated Series
D Preferred Stock (liquidation preference of $2,500,000), 1,000 shares have been
designated Series E Preferred Stock (liquidation preference of $4,000,000), and
1,000 shares have been designated Series H Preferred Stock (liquidation
preference of $2,000,000).

SERIES B PREFERRED STOCK - In conjunction with the financing of the acquisition
of a center, the Company issued to DVI 1,000 shares of Series B preferred Stock.
In September 2001, we entered into an exchange agreement with DVI whereby DVI
exchanged 1,000 shares of Series B Preferred (together with all accrued and
unpaid dividends on the Series B Preferred Stock for an aggregate value of
$2,809,250) for 1,337,738 shares of common stock, a conversion rate of $2.10 per
common share. Common stock was increased $1,337 and the remaining $2,807,913 was
recorded as additional paid-in capital. Series B Preferred Stock has been
eliminated.

SERIES C PREFERRED STOCK - The Series C Preferred Stock is convertible into
common stock at a conversion rate calculated by dividing $5,000 by an amount
equal to 90% of the average fair market value of the Company's common stock for
the 20 days prior to the date of conversion. It is redeemable at the option of
the Company at a price equal to $5,000 per share plus all accrued and unpaid
dividends. Dividends are cumulative and are payable quarterly at an annual rate
of 9% of $5,000 per share when and as declared by the Board of Directors. The
dividend rate increased to 20% in March 2002, in accordance with the agreement,
because the Series C Preferred Stock was outstanding at such time. 1,000 shares
of Series C Preferred Stock were issued and outstanding at December 31, 2002 and
2001.

F-22
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 9 - CAPITAL STOCK (CONTINUED)

All accrued dividends at the date of conversion can be paid in kind with the
Company's common stock in lieu of cash if mutually agreed-upon by the Series C
Preferred stockholder and the Company. The Series C Preferred Stock has a
liquidation preference of $5,000 per share plus all accrued and unpaid
dividends. The Series C Preferred Stock had $2,122,500 and $1,260,000 in
cumulative, undeclared and unpaid dividends at December 31, 2002 and 2001,
respectively.

SERIES D PREFERRED STOCK - The Series D Preferred Stock is convertible into
common stock at a conversion rate of $1.30 per share. It is redeemable at the
option of the Company at a price equal to $2,500 per share plus all accrued and
unpaid dividends. Dividends are cumulative and are payable quarterly at an
annual rate of 12% when and as declared by the Board of Directors. The Company
declared and paid $300,000 in dividends in 2002 and 2001 on the Series D
Preferred Stock and accordingly has no cumulative, unpaid dividends as of
December 31, 2002 and 2001 on the Series D Preferred Stock. 1,000 shares of
Series D Preferred Stock were issued and outstanding at December 31, 2002 and
2001.

All accrued dividends at the date of conversion can be paid in kind with the
Company's common stock in lieu of cash if mutually agreed upon by the Series D
Preferred stockholder and the Company. The Series D Preferred Stock has a
liquidation preference of $2,500 per share plus cumulative unpaid dividends.

SERIES E PREFERRED STOCK - The Series E Preferred Stock is convertible into
common stock at a conversion rate of $1.30 per share ("initial conversion
price") through January 2002. At that date, if the Series E Preferred Stock has
not been otherwise converted, the stock may be converted at the option of the
holder at the lesser of the initial conversion price or a conversion rate
calculated by dividing $4,000 by an amount equal to 90% of the average fair
market value of the Company's common stock for the 20 days prior to the date of
conversion. The Series E Preferred Stock is redeemable at the option of the
Company at a price equal to 100% of the Series E stock issue price plus all
accrued and unpaid dividends upon 30 days notice to the holders. The holders
shall be able to exercise their conversion rights described above prior to the
date of redemption. The Series E Preferred Stock does not provide for any
cumulative or preferential dividends. The Series E Preferred Stock has a
liquidation preference of $4,000 per share plus all accrued and unpaid
dividends. 1,000 shares of Series E Preferred Stock were issued and outstanding
at December 31, 2002 and 2001.


                                                                            F-23
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 9 - CAPITAL STOCK (CONTINUED)

SERIES H PREFERRED STOCK - The Series H Preferred Stock is convertible into
common stock at a conversion price equal to the greater of the market price of
the common stock on the original issue date or $.75 per share ("initial
conversion price"). The Series H Preferred Stock is redeemable at the option of
the Company at a price equal to 100% of the Series H stock issue price plus all
accrued and unpaid dividends upon 30 days notice to the holders. The holders
shall be able to exercise their conversion rights described above prior to the
date of redemption. If the Company does not redeem the preferred shares or the
shares have not been converted to common stock within five years, the holders
have the right to put the shares back to the Company for the redemption price
plus all accrued and unpaid dividends. The Series H preferred stock has not been
classified as permanent equity because of the holders' rights to put the shares
back to the Company. Dividends are cumulative and payable quarterly at an annual
rate of 8% when declared by the Board of Directors. There were no cumulative
unpaid dividends at December 31, 2002. The Series H Preferred Stock has a
liquidation preference of $2,000 per share plus all accrued and unpaid
dividends. 215 shares of Series H Preferred Stock were issued and outstanding at
December 31, 2002.

COMMON STOCK - CONTINGENT - At December 31, 2002 and 2001, there were 24,788 and
297,500 shares of common stock outstanding, respectively, that were considered
contingent because the holders have the right to put these shares to the Company
at $2.00 per share plus accrued interest at 10% of the aggregate original share
exchange amount of $1,225,000. The put options are exercisable for a
twelve-month period, commencing on February 1, 2002 and ending on January 31,
2003. Each month during this twelve-month period, these stockholders may elect
to hold or to require us to purchase one twelfth of their holdings. During 2001,
315,000 shares were put to us at an aggregate redemption price of $630,000, of
which $295,000 was accrued at December 31, 2001. During 2002, 272,712 shares
were put to us at an aggregate redemption price of $545,424. Interest on all
shares has been paid or accrued through December 31, 2002.

During 2001, the Company entered into an agreement with a former officer and
director and current creditor of the Company ("creditor"), and another equity
investor ("investor"). According to the terms of the agreement, the creditor
contingently exchanged the $586,186 balance on a note payable from the Company
and the claim to additional expenses in the amount of $130,150 for 358,168
shares of common stock at a value of $2.00 per share ($716,366). The exchange
was contingent upon the investor calling the shares of stock from the creditor
at $2.25 per share. Should the investor not exercise their call option by the
specified date, the note would be reinstated along with the additional expenses
and be due upon 60 days notice. The common stock was accounted for as common
stock - contingent at the liquidating value of the stock, $716,336.

Subsequent to year end, the Company entered into a settlement agreement with the
former Director providing for, among other things, mutual releases of complaints
and cross-complaints previously filed. According to the terms of the settlement,
the former Director canceled the $716,336 contingent note. We issued a new note
payable to the Director for $580,000 that provides for interest at 6% interest,
monthly payments of $10,919 for six years and is unsecured (Note 7). In
conjunction with this settlement, a gain on the cancellation of the contingent
note of $136,336 was recorded in the 2002 Consolidated Statements of Operations.

F-24
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - STOCK OPTION PLANS

2001 STOCK OPTION PLAN - OnCure established the 2001 Stock Option Plan (the
Plan) pursuant to which the Company may issue to officers, directors, key
employees and consultants of the Company options to purchase shares of common
stock. The Plan provides for the issuance of incentive stock options ("ISO"),
non-qualified stock options ("NSO") and stock appreciation rights ("SARs").
Under terms of the Plan, a maximum of 3,000,000 shares of the Company's common
stock may be issued upon the exercise of stock options granted thereunder. The
maximum number of shares of common stock that may be granted as options or SARs
to any participant in any calendar year shall not exceed 450,000 shares. The
Board of Directors (or a committee of the Board of Directors) is responsible for
administering the Plan. The Board determines to whom grants are made, the
vesting, timing, amounts and other terms of such grants. ISO's may be granted to
participants who are key employees, while NSO's may be granted to the officers,
directors and consultants. SARs may be granted in conjunction with all or part
of any option granted under the Plan. In the case of an NSO, such rights may be
granted either at or after the time of the grant of such option. In the case of
an ISO, such rights may be granted only at the time of the grant of such option.
The exercise price of an ISO may not be less than the fair market value of the
Company's common stock on the date of the grant (110% of such fair market value
in the case of 10% stockholders) and the term of these options may not exceed 10
years (five years in the case of 10% stockholders). Options generally vest in
five years and expire in five to ten years. For the year ended December 31,
2001, 431,000 options were issued under the Plan. No options were issued under
the Plan for the year ended December 31, 2002. The 2001 Plan replaced the 1998
Stock Option Plan.

In March 2001, the Board adopted a policy pursuant to which non-employee
directors shall receive an option under the Plan to purchase 1,000 shares of
common stock with an exercise price of $2.00 per share for every Board meeting
attended and/or committee meeting attended in person or by telephone for the
year ended December 31, 2001. The Company issued 61,000 stock options relating
to this policy. In 2002, the Board amended the policy. Under the amended policy,
Board members receive cash compensation of $5,000 per quarter for meetings
attended.

During the period ended December 31, 2001, the Board of Directors granted
185,000 stock options to Company employees and 185,000 stock options to
Directors for services rendered. There was no compensation expense recognized
related to these options in accordance with APB Opinion No. 25.

                                                                            F-25
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - STOCK OPTION PLANS (CONTINUED)

The Company issued options outside of the Option Plan for the purchase of
300,000 shares of common stock at an exercise price of $.01 per share to an
officer. The option vests the earlier of certain criteria or five years. We
recognized as deferred compensation expense the excess of the fair value of the
common stock issuable upon the exercise of such options over the aggregate
exercise price of such options. The total deferred compensation expense of
$147,000 was being amortized over the vesting period of the option. In 2001, the
officer's employment was terminated and $71,050 was charged to compensation
expense.

In November 2000, the Company reduced the exercise price of stock options held
by two minority shareholders as compensation for services provided by the
minority shareholders. We recorded a non-cash stock option compensation expense
of $1,373,000 for the year ended December 31, 2000 to recognize the difference
between the reduced exercise price and the market price of the Company's stock
at the date of re-pricing. In accordance with FASB Interpretation No. 44,
Accounting for Certain Transactions involving Stock Compensation, the options
are treated as variable stock options subsequent to the date of re-pricing and
an adjustment of $380,134 was recorded during 2001 to recognize a decrease to
non-cash stock option compensation expense for the reduction in the market price
of the Company's stock from the date of re-pricing to the date of exercise,
March 2001.

On January 22, 2001, the Company issued stock options outside of the Option Plan
to two Directors of the Company for services rendered in the reorganization of
the Company. The difference between the market price of the Company's stock and
the exercise price of the options, an aggregate $258,700, was recorded as an
increase to non-cash stock option compensation expense in the accompanying 2001
statement of operations.

In June 2001, the Company re-priced warrants issued to previous debt holders of
the Company. The difference between the market price of the Company's stock and
the reduced exercise price of the warrants, an aggregate $178,000, was recorded
as an increase to non-cash stock option compensation expense in the accompanying
2001 statement of operations. The warrants were exercised subsequent to the
re-pricing in June 2001.


F-26
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - STOCK OPTION PLANS (CONTINUED)

A summary of the Company's stock option activity, and related information
follows:

<TABLE>
<CAPTION>
                                                                                                Weighted-Average
                                                                           Options               Exercise Price
                                                                   -----------------------   -----------------------
<S>                                                                             <C>                      <C>
Options outstanding
     at January 1, 2001                                                        2,001,333                $     1.52
     Granted                                                                     561,000                      1.94
     Exercised                                                                  (820,000)                     0.01
     Forfeited                                                                  (472,667)                     1.78
                                                                   -----------------------   -----------------------
Options outstanding
     at December 31, 2001                                                      1,269,666                $     1.46
     Forfeited                                                                   (90,000)                     1.81
                                                                   -----------------------   -----------------------
Options outstanding
     at December 31, 2002                                                      1,179,666                $     1.44
                                                                   =======================   =======================
Options exercisable
     at December 31, 2002                                                        765,662                $     1.15
                                                                   =======================   =======================
</TABLE>


<TABLE>
<CAPTION>
                                                                    DECEMBER 31, 2002
                                       -----------------------------------------------------------------------------
                                                Options Outstanding                    Options Exercisable
                                       -------------------------------------- --------------------------------------
                                            Average            Weighted-                              Weighted-
                                           Remaining            Average                                Average
      Range of          Number of         Contractual          Exercise           Number of           Exercise
   Exercise Price        Options             Life                Price             Options              Price
--------------------- ---------------  ------------------  ------------------ ------------------  ------------------
<S>                       <C>                    <C>             <C>                 <C>                <C>
 $           0.01         300,000                4.70            $   0.01            300,000            $   0.01
 $           1.00          75,166                1.83            $   1.00             58,391            $   1.00
 $           1.30          25,000                4.67            $   1.30              6,667            $   1.30
 $           2.00         729,500                2.40            $   2.00            384,771            $   2.00
 $           2.50          50,000                3.42            $   2.50             15,833            $   2.50
</TABLE>


                                                                            F-27
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 11 - PENSION PLAN

The Company has a 401(k) Pension Plan (the "Plan"). Under the Plan, eligible
employees may make an election to defer any amount up to 20% of their annual
eligible compensation, subject to certain limitations. We make an annual
contribution of 3% of the employee's annual eligible compensation, up to a
maximum of $1,800 per year. Participants' contributions to the Plan vest
immediately and Company contributions are 100% vested after five years of
service (40% per year after two years of service and 20% per year of service
thereafter). Contributions to the Plan totaled approximately $81,000 and $76,000
for the years ended December 31, 2002 and 2001, respectively, and were charged
to operations.


NOTE 12 - RELATED PARTY TRANSACTIONS

TRANSACTIONS WITH A BENEFICIAL OWNER OF MORE THAN 5% OF THE COMPANY'S VOTING
SECURITIES AND FORMER MEMBERS OF THE BOARD OF DIRECTORS - OnCure leases three
medical facilities and warehouse space from companies owned by two former
directors of the Company. The warehouse space lease terminated in September
2001. Rent expense of approximately $424,000 and $434,000 for the years ended
December 31, 2002 and 2001 was recorded related to these facilities.

TRANSACTIONS WITH DVI, A BENEFICIAL OWNER OF MORE THAN 5% OF THE COMPANY VOTING
SECURITIES - In September 2001, we entered into an exchange agreement with DVI
whereby DVI exchanged 1,000 shares of its Series B Preferred Stock for 1,337,738
shares of our common stock (see Note 8). DVI also agreed not to exercise its
right to convert its shares of the Series C Preferred stock to common stock
until September 7, 2002 (see Note 9).

As a way of financing certain aspects of its operations, the Company obtains
financing from DVI. The Company has entered into a series of financing
agreements with DVI. At December 31, 2002, the principal amount of borrowings
under these agreements was approximately $11.6 million with interest rates
ranging from 8.8% to 12.4%. During the fiscal year 2002, the Company paid DVI
approximately $1.4 million as payment for accrued interest on these borrowings.

DVI provides the Company with a revolving line of credit pursuant to two loan
and security agreements. The maximum amount available under this credit facility
is $4.8 million with advances limited to eighty-five percent (85%) of eligible
account receivables. Borrowings under the line of credit bear interest at a rate
that ranges between 2.0% and 2.25% over the prime lending rate. This line of
credit expires on June 30, 2004, but is renewable for a one-year term at the
expiration date. At December 31, 2002, we had approximately $4.4 million of
borrowings under this credit facility.


F-28
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 12 - RELATED PARTY TRANSACTIONS (CONTINUED)

TRANSACTIONS WITH DVI, A BENEFICIAL OWNER OF MORE THAN 5% OF THE COMPANY VOTING
SECURITIES - (CONTINUED)

On September 30, 2002, U.S. Cancer Care, Inc., a wholly-owned subsidiary of the
Company ("USCC"), entered into an Option to Purchase Agreement (the "Option
Purchase Agreement") with DVI. Pursuant to the Option Purchase Agreement, USCC
granted DVI an option (the "Option") to purchase 100% of the issued and
outstanding membership interest (the "Interest") in Corpus Christi Acquisition,
LLC ("CCA"), in exchange for 837,758 shares (the "Shares") of the Company's
Common Stock owned by DVI. The purchase price for the Interest upon exercise of
the Option was: (i) one dollar ($1.00), (ii) the forgiveness, release, and
discharge by DVI of all indebtedness (the "DVI Indebtedness") related to CCA
owed by the Company or its affiliates to DVI, and (iii) the assumption of all of
the indebtedness (the "Assumed Indebtedness") of the Company and its affiliates,
including the DVI Indebtedness, relating to the operations of CCA.

In accordance with the Option Purchase Agreement, DVI assigned its right to
exercise the Option to Dolphin Medical Inc. ("Dolpin"). Pursuant to a Purchase
Agreement (the "Purchase Agreement"), dated as of October 31, 2002, and
effective as of September 30, 2002, by and among Dolphin, USCC, and the Company,
Dolphin exercised the Option and purchased the Interest by assuming all of the
Assumed Indebtedness and, in connection therewith, DVI released and discharged
the Company and its affiliates from their obligation to repay the DVI
Indebtedness. The Company recorded a gain of $1.0 million on the sale of the
Interest to Dolphin.

TRANSACTION WITH A FORMER MEMBER OF THE BOARD OF DIRECTORS - In April 2000, the
Company through its USCC subsidiary, entered into a partnership agreement
(USCMC-USCC) with U.S. Cancer Management Corporation, a corporation wholly-owned
by a former member of the Board of Directors ("former Director"). The
partnership's purpose is to develop and build outpatient radiation therapy
centers in Northern California to service patients of a Northern California
based health insurance payor network. Terms of the agreement provide that all
profits are distributed 51% to U.S. Cancer Management Corporation and 49% to
USCC. In addition, the partnership agreement provides that USCC will be required
to provide a total of $300,000 in financing to be paid, as defined in the
agreement, over the first 24 months of partnership operations or obtain
financing for the development of certain centers. If USCC fails to provide
financing its equity interest in the partnership will be reduced from 49% to 5%.
As of December 31, 2001, USCMC-USCC had substantially no operations. On February
28, 2002, OnCure entered into a settlement agreement with the former Director
providing for, among other things, mutual general releases of the complaints and
cross-complaints filed during 2001 (see Note 13). According to the terms of the
settlement, the former Director would transfer 642,833 shares of common stock to
the Company and the Company would relinquish its interest in the USCC-USCMC
partnership. Accordingly, we have reduced the carrying value of the partnership
under the equity method of accounting to equal the market value of the shares
received on the date of the settlement, February 28, 2002. This write-off
($338,065) was recorded as other expense in the 2001 statement of operations.

                                                                            F-29
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 12 - RELATED PARTY TRANSACTIONS (CONTINUED)

TRANSACTIONS WITH THE CHAIRMAN OF THE BOARD AND A MEMBER OF THE BOARD OF
DIRECTORS - We entered into a sale lease-back agreement for land at one of our
Florida cancer centers with a general partnership that is owned by two members
of the Board. We now lease two of our centers in Florida from entities
affiliated with the Chairman of the Board and a member of the Board of
Directors. For the years ended December 31, 2002 and 2001, the Company recorded
approximately $252,000 and $221,000, respectively, of rent expense related to
these centers.

The Company purchased medical supplies totaling $229,000 in 2002 from North
Florida Cyclotron Center, an entity affiliated with the Chairman of the Board,
for the use in its JAXPet mobile unit. At December 31, 2002, we had $143,100 in
accounts payable to North Florida Cyclotron Center.

In December 2002, certain members of the Company's Board of Directors purchased
an aggregate of 215 shares of Series H Cumulative Accelerating Redeemable
Preferred Stock of the Company (the "Series H Stock") for an aggregate purchase
price of $430,000 in cash.

We had a note payable to the Chairman of the Board and minority stockholder of
the Company with a balance of $103,482 at December 31, 2001. The note was fully
repaid in 2002.

See Note 14 for further related party transactions that occurred subsequent to
year end.


NOTE 13 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASES - OnCure leases certain facilities under various operating
leases that expire through 2007. Certain real estate leases have options to
renew for periods from 3 to 15 years.

Future commitments under non-cancelable operating leases as of December 31, 2002
are as follows:

                2003                          $ 1,629,974
                2004                            1,562,331
                2005                            1,379,023
                2006                            1,073,407
                2007                              616,669
                Thereafter                      2,323,183
                                           ---------------
                          Total               $ 8,584,587
                                           ===============

Rent expense was approximately $1,490,662 and $1,394,000 for the years ended
December 31, 2002 and 2001, respectively.

F-30
--------------------------------------------------------------------------------

<PAGE>

ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 13 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

LITIGATION - Periodically, we are a party to claims, suits, or complaints
relating to services and products provided by the Company or physicians with
whom we contract for services. We maintain insurance coverage that we believe is
adequate both as to covered risks and amounts. In addition, pursuant to the
service agreements, the affiliated physician groups are required to maintain
comprehensive professional liability insurance. Successful malpractice claims
asserted against the affiliated physicians or the Company could, however, have a
material adverse effect.

The Company is a current defendant in a complaint filed April 1, 2002, in New
Jersey Superior Court. The compliant alleges that the Company entered into an
agreement with the plaintiff that required the Company to purchase 112,500
shares of the Company's common stock held by the plaintiff (the "Shares") at
$2.00 per share and pay the plaintiff ten percent (10%) interest on a certain
promissory note, if the offer and sale of the Shares were not registered under
the Securities Act of 1933, as amended, by May 1, 2001. The plaintiff alleges
that the Company has breached the Agreement by, among other things, not
registering the Shares by May 1, 2001. The plaintiff seeks recovery of damages
in the amount of $247,500 and attorneys' fees. We believe that the Company has
meritorious defenses to each of the claims asserted in the complaint and intends
to vigorously defend this lawsuit.

REGULATORY COMPLIANCE - The Company is subject to many complex federal, state,
and local laws and regulations. Compliance with these laws and regulations is
subject to government review and interpretation, and unknown or unasserted
regulatory actions. Government activity with respect to investigations and
allegations regarding possible violations of these laws and regulations by
health care providers, including those related to medical necessity, coding, and
billing for services, has increased significantly. Violations of these laws can
result in large fines and penalties, sanctions on providing future services, and
repayment of past patient service revenues. Management believes any actions that
may result from investigations of noncompliance with laws and regulations will
not have a material effect on the Company's future financial position or results
of operations.

EMPLOYMENT CONTRACT - OnCure has two employment agreements with members of
management. The agreements have terms expiring May and April 2005. As of
December 31, 2002, we were required to provide the following minimum annual base
salaries and bonuses, including minimum annual increases. OnCure can terminate
the employment agreements without cause subject to severance payments.

                2003                                  $  456,000
                2004                                     647,000
                                                 ----------------
                          Total                      $ 1,103,000
                                                 ================


F-31
--------------------------------------------------------------------------------

<PAGE>

                                      ONCURE TECHNOLOGIES CORP. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 14 - SUBSEQUENT EVENTS

FORMATION OF THE VENTURE

On January 24, 2003, the Company, together with Ninth City Landowners, LLP
("Ninth City"), formed the FROG OnCure Southside, LLC (the "Venture") for the
expressed purpose of operating and managing the Wells Complex Clinic and the
Southside Cancer Center, both in Jacksonville, Florida. OnCure and FROG each own
a 50% interest in the Venture. The Venture will be governed by a board of
managers consisting of four members, two each from OnCure and FROG. The members
agreed to an initial capital contribution of $1.25 million from both Ninth City
and the Company. Ninth City contributed $1.25 million in cash. The Company
contributed its ownership interest in the Wells Complex Clinic, valued at
$700,000 and issued a promissory note in the amount of $300,000 to Ninth City,
and the Venture issued a promissory note in the amount of $250,000 to Ninth
City. Ninth City is an entity controlled by two director-shareholders of the
Company and four other shareholders.

SALE AND LEASEBACK OF THE WELLS COMPLEX CLINIC

On January 24, 2003, USCC Florida Acquisition Corp., a wholly-owned subsidiary
of the Company ("USCC Florida"), entered into a Purchase and Sale Agreement (the
"Purchase and Sale Agreement") with Ninth City pursuant to which Ninth City
purchased certain real property owned by USCC Florida for $500,000. The purchase
price for the land and building was paid in cash at closing. Concurrently with
the sale, the Company entered into a lease with Ninth City pursuant to which
Ninth City agreed to lease the Wells Complex Clinic to the Company for a period
of 10 years at a rate of $5,885 per month, with annual increases equal to the
CPI.

ACQUISITION OF THE SOUTHSIDE CANCER CENTER

On January 31, 2003, the Venture entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with Florida Oncology Associates, P.L. ("FOA") and
certain of FOA's members. Pursuant to the Asset Purchase Agreement, the Venture
acquired the assets and business pertaining to the Southside Cancer Center and,
in connection therewith, entered into a lease with Golden Pond II, LLC, a
wholly-owned subsidiary of FOA.

The purchase price for the acquisition was $5,500,000 (the "Purchase Price"),
which was funded in part by a loan (the "Loan") in the aggregate principal
amount of $4,250,000. The Venture obtained the Loan from DVI Financial Services,
Inc. The loans bears interest at 8.75% per annum, matures on January 28, 2009,
and is secured by substantially all the receivables and equipment of the
Venture. Approximately, $2,125,000 of the Loan is guaranteed by the Company. As
part of the acquisition, the Venture assumed accounts receivable of $363,000 and
no indebtedness of FOA.


                                                                            F-32
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