U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

(Mark One)
[X]  ANNUAL  REPORT  PURSUANT SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
     OF  1934.  For  the  fiscal  year  ended  December  31,  2002.

[ ]  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 0-21384
                                                -------

                           KAIRE HOLDINGS INCORPORATED
                           ---------------------------
                 (Name of small business issuer in its charter)

<TABLE>
<CAPTION>

Delaware                                      8980                     13-3367421
--------------------------------  -----------------------------  ----------------------
<S>                               <C>                            <C>

(State or other jurisdiction of   (Primary Standard Industrial   (I.R.S. employer
incorporation or organization)    Classification Code Number)    identification number)
</TABLE>


8135 Cylbourne Avenue, Sun Valley, CA                                  91352
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                              (Zip Code)

       Registrant's Telephone number, including area code: (818) 255-4996

Securities registered under 12(b) of the Exchange Act:    None

Securities registered under Section 12(g) of the Act:     Common Stock

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
Regulation S-B is not contained herein, and will not 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 issuer had revenues of $1,891,003 for the fiscal year ended December 31,
2002.

The aggregate market value of the voting stock held by non-affiliates on
December 31, 2002 was approximately $ 389,464 based on the average of the bid
and asked prices of the issuer's common stock in the over-the-counter market on
such date as reported by the OTC Bulletin Board. As of December 31, 2002,
432,738,198 shares of the issuer's Common Stock were outstanding. As of December
31, 2002, 432,738,198 shares of the issuer's Common Stock were outstanding.   As
of April 11, 2002, 883,484,863 shares of the issuer's Common Stock were
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

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


                                      -1-
<PAGE>
PART I

ITEM 1. DESCRIPTION OF BUSINESS

Business

In 2003, Kaire Holdings, Inc., ('Kaire" or 'the Company") has two lines of
businesses; the existing pharmacy line of business is focused on developing and
marketing essential support programs and services that target a defined
healthcare segment (e.g., individuals affected by the HIV virus and long-tern
care facilities), and the employer services markets through its acquisition of
EntreMetrix, Inc., in March 2003. Each of the programs and services provided by
KAIRE or its subsidiaries are developed to meet a specific need of our target
markets.

Health Care programs include the "Health Advocate Program" which provides
specialized pharmacy services for patients and administrators of board and care
facilities, and HIV patients being treated with anti-viral medication therapies.
Health Advocate Programs utilize specialized medication packaging that improves
patient medication compliance in HIV and board and care patients, patient
med-sheets that include drug information and dispensing charts that track
patient reactions. All Health Advocate Programs manage patient insurance claims
through a wide variety of health care providers as well as facilitating
communication between patients and their health care professionals.

In March 2003, we acquired a privately-held company, EnterMetrix, Inc. that
provides administrative employer and financial support services to small
business throughout the country.  EnterMetix, Inc., provides services to
companies in the medical, life science, and technology industries.  EntreMetrix,
Inc., develops and provides outsourced Human Resources ("HR") and financial
staffing support services specifically designed for health care staffing
providers and other diversified health services providers.

History

KAIRE is a Delaware corporation, formed in 1986, and headquartered in Sun
Valley, California.

From 1986 through 1989, Kaire was primarily engaged in the research, discovery,
and development of technologies allowing for the precise measurement of blood
flow in laboratory tests using non-radioactive contrast media. We also developed
a technology for the selective entrapment or sequestration of fat from the food
in the gastrointestinal track

We began commercial operations in 1990 with the direct marketing of colored
microsphere products and laboratory services through its newly formed EZ-Trac
subsidiary. Targeted markets for our services included research laboratories,
hospitals, universities, and other facilities engaged in blood flow studies. We
also introduced a weight loss product based on its fat inhibitor concept, which
it marketed directly to doctors and weight loss clinics through a newly formed
subsidiary, Effective Health, Inc.

In 1995, having achieved only marginal success marketing the weight loss
product, we licensed the fat inhibitor technology to a marketing group in
southern California, which enabled us to concentrate fully on our EZ-Trac
businessBy the end of 1998 it had become clear that EZ-Trac could not
effectively compete against the larger established competitors or convince users
of the radioactive products to switch. We made the decision to develop products
for the larger consumer driven markets with more opportunity for us. However, we
continued to market EZ-Trac products and services through May 2000

In January 1999, we had developed a new strategic plan, which would moved us
away from further attempts to commercialize core medical technologies and toward
the development and marketing of health oriented consumer driven products and
services through e-commerce and conventional distribution channels.

In May of 1999, we implemented the first phase of this new business strategy
when we began marketing a range of health oriented consumer products through our
newly developed VitaPlanet.com e-commerce Internet site.



                                      -2-
<PAGE>
In November 1999, we implemented the next phase of our new business strategy
with the introduction of YesRx.com, an online drug store and pharmacy providing
specialized pharmacy services, over-the-counter products, and nutrition and
personal care products supported by comprehensive health information to targeted
segments of the senior health care market.

In February 2000, we announced the formation of a strategic business
relationship with Stason Pharmaceuticals Inc, (STASON USA), the United States
division of Taiwan based Standard Chemicals, Incorporated.  STASON USA is
licensed by the Food and Drug Administration to manufacture pharmaceutical drugs
as well as various over the counter health oriented consumer products. STASON
USA is also a contract developer of experimental drugs for pharmaceutical
companies and research facilities and operated from a 37,000 square foot
facility in Irvine California facility.

According to the agreement, STASON USA and us formed STASON Biotech, Inc.,
("Stason Biotech") a new entity consisting of EZ-Trac and STASON USA's
laboratory businesses.  We owned 40% of STASON Biotech while STASON USA owned
the balance of equity, and Stason, USA was responsible for its daily operations.
STASON Biotech engaged in the research and development of compounds and testing
measures for the treatment of pathogenic viral infections and other medical
applications related to solid form prescription drug formation as well as
providing contract research and development services to manufacturers of
pharmaceutical drugs  STASON Biotech was formed in May 2000 and the move and
integration of EZ-Trac to Stason Biotech completed in by the end of 2000.  All
operational and management decisions were made by Stason, USA. In November 2002,
at the benefit of both parties, we transferred our 40% interest in Stason
Biotech in exchange for a $175,000 note payable we owed Stason USA. This
transaction ended our relationship with Stason, USA.

In June of 2000, with the Dot-com industry appearing unstable, we felt that
building a fulfillment center for YesRx.com and its e-commerce initiatives was
not prudent. Therefore, we acquired Classic Care, Inc dba Classic Care Pharmacy)
instead. Classic Care Pharmacy had established itself as a rapidly growing
provider of specialized pharmacy services to bed and board facilities throughout
Southern California. In acquiring Classic Care Pharmacy, we gained substantial
revenues, increased the total number of patients served, and established a
conventional distribution center for pharmacy operations that included
fulfillment for YesRx.com's California business. The acquisition was made with a
combination of cash and stock. The purchase price consisted of (i) cash, (ii)
short-term promissory notes, and (iii) and the issuance of our common stock.
The existing Classic Care Pharmacy management was retained and continued to
operate Classic Care Pharmacy

In October of 2000, we entered into debt financing agreement with a New York
based firm calling for the issuing of convertible debentures. The proceeds of
that financing were used to pay a portion of the cash required for the Classic
Care, Inc acquisition. The terms of the financing agreement required that we
register a number of shares for conversion of the debt under a Form SB2 with the
Securities and Exchange Commission.

In January 2001, we introduced the YesRx HIV Health Advocate Program. The
program was designed to improve medication compliance for HIV patients who were
being treated with complex anti-viral medication therapies. The program
contained several elements including specialized medication packaging, one on
one patient counseling and comprehensive health and disease information and
patient education. Initially, the program served the greater Los Angeles Latino
community. Several months later the YesRx Health Advocate Program was designated
as the primary provider of pharmacy services for the Center of Disease Studies
program which was part of a Los Angeles Department of Health and Human Services
study of HIV among transient populations.

In April 2001, we relocated the e-commerce components of YesRx.com website to
the Yahoo.com e-commerce Shopping Mall, because it was more cost efficient.  The
existing YesRx.com web site would become the management and information center
for the Health Advocate Programs.

In November 2001, we sought to restructure the schedule of remaining payments
due Classic Care, Inc under the acquisition agreement due a dramatic fall in the
price of our shares (along with the rest of the market). The original
shareholders of Classic Care, Inc and us subsequently agreed to a plan, that
involved a "Spin-Off" of Classic Care, Inc. Under the terms of the "Spin Off
Agreement", we assigned approximately 54% of Classic Care, Inc back to the
original shareholders of Classic Care, Inc., and we would retain approximately a


                                      -3-
<PAGE>
35% ownership interest. The remaining 11% was reserved for management and a
Classic Care, Inc employee stock option plan. In consideration of this
assignment, all outstanding promissory notes issued for the original purchase
were deemed satisfied. A new 2 million dollar convertible note was to be issued
in favor of the original Classic care, Inc shareholdersWe had the option of
either paying the two million dollars, plus 4% interest in one year, or we could
return a portion of its 35% equity back to the original Classic Care, Inc
shareholders as full settlement of the note principal and any accrued interest.

On January 31, 2002, at the annual shareholder meeting, shareholders approved
the "Spin Off Agreement" plan.  After obtaining shareholder approval, we spent
the next 4 months completing the tasks that were required to "Spin Off" Classic
Care, Inc.

In May 2002, we were forced to abandon our plans to "Spin-Off" Classic Care
Pharmacy due to a notice we received from State of California Department of
Health Services ("DHS"), dated April 17, 2002. In this notice, we were informed
by DHS that Medi-Cal was suspending our Medi-Cal license and was withholding
100% of our Medi-Cal payments. The DHS alleged that Classic Care had fulfilled
prescriptions without proper authorization based on their investigation  Upon
review of the supporting documentation, our external and internal counsel
believed that the facts presented by the Department of Health Services were
inaccurate and that its position was unfounded.

The DHS had deactivated Classic Care Pharmacy medical provider number and
withheld a significant amount of reimbursements due us by the time we were first
notified of the action taken by DHS.  This action devastated Classic Care
Pharmacy's cash flow and made it impossible to pay the cost of medications that
Classic Care Pharmacy had used to fill these customer orders which amounted to
over $1.5 million dollars.

The action taken by the DHS, the mounting vendor payables, and the uncertainty
over the final outcome of the legal proceedings, forced us to take immediate
steps to insure that the patients who depended on Classic Care Pharmacy for
their medications would receive them.

Ultimately, we had few choices but to sell Classic Care Pharmacy's long-term
care facility business. We transferred that business, which amounted to
approximately 80% of the total revenue, back to the original Classic Care, Inc
shareholders in exchange for a release from repaying any outstanding payments
and promissory notes related to that acquisition. We retained approximately 20%
of the overall business, which primarily was the Health Advocate Program,

SUBSEQUENT EVENTS

Acquisition of Sespe Pharmacy
-----------------------------

On January 26, 2003, our subsidiary, Effective Health, Inc., announced that it
had acquired all the tangible and intangible assets of Sespe Pharmacy, which is
located in the Sespe Medical Clinic, in Fillmore, California.  The Sespe Medical
Clinic is operated by the Santa Paula Community Hospital.  Sespe Pharmacy is a
growing business dispensing on average 75 retail prescriptions per day. The
proximity to the medical clinic provides a steady stream of new patients to the
pharmacy and we plan on building on the existing base of repeat customers. We
purchased the pharmacy for $181,000, payable in a combination of cash and
short-term promissory notes. Currently, we estimate goodwill to be approximately
$100,000, which may be adjusted based on further financial analysis.

Effective Health, Inc and Sespe Pharmacy serve as our base of pharmacy
operations.  Since acquiring Sespe Pharmacy, we have resumed our board and care
marketing efforts, which has resulted in a number of new facilities becoming
customers of our specialized pharmacy service programs. Pharmacy staff includes
the manager of pharmacy operations/pharmacist in charge, pharmacy technician,
retail sales clerk, pharmacy sales manger (board & care facilities), and billing
and delivery personnel.

Closing of Classic Care Pharmacy
--------------------------------


                                      -4-
<PAGE>
On February 17, 2003, we ceased all operations at Classic Care Pharmacy and
dissolved Classic Care, IncThe loss of the medical provider number combined
with the lower margin business that remained after the sale of the Medi-Care and
Medi-Cal business we could not support ongoing operations and pay the remaining
vendor debt; despite significant efforts to keep Classic Care up and running.
In addition, we had very limited working capital available to support ongoing
operations at Classic Care or pay vendor debt and no reasonable expectation that
we could raise additional working capital for this business unit.

New  Operating  Lease  Agreement
--------------------------------

In  January  2003,  the  Company entered into an operating lease agreement for a
pharmacy  in  Fillmore,  California.  The pharmacy facility is approximately 835
square  feet.  Payments  under  the  lease  will  be  $1,170 per month, and will
commence  on  January 26, 2003, and will continue through the initial lease term
of  five  years.  The  Company  has options to renew the lease for two five-year
periods  and  to purchase the facility at its estimated fair market value at any
time  during  the  lease  term.

Acquisition  of  Entremetrix,  Inc.
-----------------------------------

In  March  2003, the Company through its subsidiary completed the acquisition of
all  the  outstanding  common shares of Entremetrix, Inc., a Nevada corporation,
for  $2,750,000.  The  agreed  purchase  price consists of (i)) a 4% convertible
promissory  note in the amount of $2.5 million due four years after closing (and
payable  in cash or in the Company's common stock at the option of the sellers),
and (ii) the issuance of 250,000,000 shares of the Company's common stock having
a  market  value  of  approximately  $250,000.

Entremetrix  is  a Southern California-based company, and is a national provider
of  administrative  employer  and financial support services to small businesses
primarily  operating  in  the  medical,  life  sciences  and  high-technology
industries.  Additionally,  Entremetrix  provides outsourced human resources and
financial  support  staff.  The  acquisition  will  be  accounted  for under the
purchase  method, whereby the purchase price will be allocated to the underlying
assets  and  liabilities  based  on  their estimated fair values.  The resulting
goodwill  from  this  transaction  is  currently  estimated  at $2,300,000.  The
goodwill  estimate  is preliminary, pending the results of an audit, and further
financial analysis.  For the year ended December 31, 2002, Entremetrix had sales
of  approximately  $1,800,000 (unaudited) and net loss of approximately $112,000
(unaudited).

Conversion  of  Debentures  into  Common  Stock
-----------------------------------------------

On February 7, 2003, a holder of the Company's 8% convertible debentures elected
to convert an aggregate of $1,776 principal amount of the debentures and $324 of
related  interest  into  3,000,000 shares of the Company's common stock on March
21,  2003.

Issuance  of  Common  Stock  for  Services
------------------------------------------

During  the period starting January 1, 2003 to April 4, 2003, the Company issued
57,746,665  shares  of  its  common stock to various consultants in lieu of cash
payments  for  services  rendered.  The aggregate value of services was $86,620.

In  March  2003,  the  Company  issued 140,000,000 shares of its common stock to
various  consultants  in  lieu  of  cash  payments  for  services rendered.  The
aggregate  value  of  services  was  $150,000.

Amendment  to  Certificate  of  Incorporation  to  Decrease Number of Authorized
--------------------------------------------------------------------------------
Shares
------

On  March  28, 2003, the Company obtained a written consent of a majority of its
shareholders  to  amend  the  Certificate  of  Incorporation  to  effect up to a
one-for-200 reverse split of common stock.  The exchange ratio is subject to the
approval of the Board of Directors.  The exchange ratio may range from one newly
issued common share for each two outstanding shares of common stock to one newly
issued  share  for  each two hundred shares of common stock.  The Amendment will
have  no  effect  on  the  par  value  of the common stock, which will remain at
$0.001.


                                      -5-
<PAGE>
Product Liability Insurance

We carry no direct product liability insurance, relying instead on the coverage
maintained by our distributors and manufacturing sources from whom we obtains
product. There is no assurance that this insurance will adequately cover any
liability claims brought against us. There also can be no assurance that we will
be able to obtain our own liability insurance (should we seek to do so) on
economically feasible terms. Our failure to maintain our own liability insurance
could materially adversely affect our ability to sell our products in the
future. Although no product liability claims have been brought against us to
date, if there were any such claims brought against us, the cost of defending
against such claims and any damages paid by us in connection with such claims
could have a materially adverse impact upon us, including our financial
position, results of operations and cash flows.

Competition

Retail and Specialized Pharmacy Services

There is significant competition among the retail independent and chain drug
stores and pharmacies. Many of these retail competitors are larger,
better-financed companies with greater resources. The majority of the larger
companies compete for individual retail customers on the basis of price and
convenience. Few offer the types of specialized programs and services that we
do.

We believe that we can successfully compete against larger better-financed
independent and chain drug stores by delivering high quality products and
services to select market segments, rather than delivering high volume average
service. However, this does preclude the possibility that the larger independent
and chain stores will not introduce their own specialized programs that target
similar market segments.

Patents, Licenses and Trademarks

     Not Applicable

Royalty Agreements

     Not Applicable

Government Regulations

     Specialized Pharmacy Services

All pharmacies, in every state are subject to the regulations of various federal
agencies, including the United States Drug Enforcement Agency, and by various
state agencies, which in our state is the California State Board of Pharmacy,
and Department of Health Services. Presently, we are compliant with all federal
and state regulations related to our businesses.

Employer Support Programs and Services

The market for outsourced employer support programs and services is not subject
to federal or state regulations that affect pricing and business operations.

Research and Development Plan

     Not Applicable


                                      -6-
<PAGE>
Employees

We currently have 3 full-time corporate employees, 7 full time employees with
Effective Health, Inc. (dba Sespe Pharmacy), and 7 full time employees with
EntreMetrix, Inc.


ITEM 2.   DESCRIPTION  OF  PROPERTY

The Classic Care pharmacy was located at 1429 South Robertson Blvd, Los Angeles,
CA and  had a monthly lease payment of $4,500.  The term of the lease was six
(6) years and the lease was to expire in March 2003.  In December 2002, Classic
Care Pharmacy vacated the facility.  The Company obtained a lease severance
effective December 4, 2002.  All of the equipment, office equipment and
furniture was taken out of service and stored in a warehouse/office leased by
the Company.

In June of 2002, we leased a 7,334-square-foot building located at 8135
Clybourne Ave, Sun Valley, CA  91352, to serve as our corporate headquarters and
storage facility.  The lease is for a period of two years, ending June 2004,
with monthly lease payments of $3,420.00.

ITEM 3.   LEGAL  PROCEEDINGS

Patent  Claim
-------------

An individual filed a complaint against us alleging breach of contract and fraud
and  related  business  torts  related  to  certain  patents  that the plaintiff
transferred  to  us.  We  believe that the plaintiff's claims are without merit.
Although  we  reached  a  tentative settlement in this matter, the Plaintiff has
failed  to  execute  the  settlement  and  the  case  was  dismissed.

Department of Health Services - Medi-Cal Action Against Classic Care Pharmacy
-----------------------------------------------------------------------------

On April 17, 2002 the Department of Health Services ("DHS") notified the
management of Classic Care Pharmacy that the Medi-Cal Program intended to
withhold 100% of payments and temporarily suspend and deactivate the Classic
Care Pharmacy Medi-Cal provider number.

The Department of Health Services ("DHS") took this action after having reviewed
the prescriptions on record at Classic Care Pharmacy. The DHS stated that they
had reviewed thirty-two prescriptions, and that two of the ten prescribing
physicians had denied treating the patients and writing the prescriptions. The
DHS cited Classic Care Pharmacy for violations of CCR, Title 22, Sec.51476.1,
(a) and 51476.1(a)(2), which states that written prescriptions must contain the
name of the prescribing physician and their provider number. Based on its
findings the DHS and the Medical Program concluded that Classic Care Pharmacy
might have intentionally committed fraud.

Classic Care management retained outside counsel shortly after receiving the DHS
notice to review the Department of Health Services findings. After reviewing the
supporting DHS material, outside counsel informed Classic Care management that
it believed the facts presented by the DHS were inaccurate and that its position
was unfounded. Classic Care management and its principle shareholders obtained
written affidavits from most of the physicians whose prescriptions had been
reviewed by the DHS confirming that they had treated the patients and did
prescribe the medications.

On April 29, 2002, outside counsel contacted the DHS to discuss its findings and
present the documentation supporting their position. DHS informed outside
counsel that they would have to follow the standard appeal process, which
normally requires two or more months to complete. Classic Care Pharmacy
instructed outside counsel to seek an ex parte temporary restraining order
against the DHS for their failure to show cause regarding their actions. On May
8, 2002, in the Superior Court for the state of California, the Court granted


                                      -7-
<PAGE>
Classic Care's ex parte request issuing a preliminary injunction against the DHS
and reinstated Classic Care Pharmacy's medical provider number. The Court set
May 24, 2002 as the date for the DHS to show cause. On May 24, 2002, the DHS was
still not prepared to show cause. The court granted a 30-day extension.

The Classic Care, Inc and Classic Care Pharmacy administrative appeal failed.
Once the appeal took place the Superior court could no longer uphold our lack
for due process claim and the DHS canceled Classic Care Pharmacy's medical
provider number.  The justice department has not taken any further action
against Classic Care Pharmacy.

Except as otherwise specifically indicated above, we believe that we do not have
any material liability for any lawsuits, settlements, judgments, or fees of
defense counsel which have not been paid or accrued as of December 31, 2002.


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

The  Annual  Shareholder  meeting  was  held  on  January  31, 2002. Shareholder
approval  was  received  on  the  following  proposals:

     1.   To re-elect the Board of Director to hold office until the next Annual
          Meeting  of  Stockholders  or  until  a  successor  is  elected;  and

     2.   To  approve  the  action  of the Board request of increasing the stock
          authorized  to  nine  hundred  million  (900,000,000)  shares.

     3.   To  approve  the  appointment of Pohl, McNabola, Berg & Company LLP as
          auditors  for  Kaire  Holdings  Incorporated.

     4.   To  approve the spin-off of Classic Care Pharmacy as a separate public
          company.

On March 28, 2003, a preliminary 14C informational proxy was filed with the
Securities and Exchange Commission in lieu of a special meeting of the
shareholders, notice was hereby given that the following actions will be taken
pursuant to the written consent of a majority of our shareholders. The following
actions will be effective on or about May 5, 2003:

     1.   amendment  of  our certificate of incorporation to provide for a stock
          combination  (reverse  split) of the Common Stock in an exchange ratio
          to  be  approved by the Board, ranging from one newly issued share for
          each  two outstanding shares of Common Stock to one newly issued share
          for  each  two  hundred  outstanding  shares  of  Common  Stock.

     2    the  ratification  of the appointment of Pohl, McNabola & Berg, LLP as
          our  independent  accountants  for  the  current  fiscal  year.

The Securities exchange commission currently reviewing the preliminary proxy.


                                      -8-
<PAGE>
                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The  Company's  Common  Stock  is  quoted on the over - the - counter market and
quoted  on  the  National  Association of Securities Dealers Electronic Bulletin
Board  ("OTC  Bulletin  Board")  under  the symbol "KAHI".  The high and low bid
prices for the Common Stock, as reported by the National Quotation Bureau, Inc.,
are  indicated  for  the  periods described below.  Such prices are inter-dealer
prices without retail markups, markdowns or commissions, and may not necessarily
represent  actual  transactions.

<TABLE>
<CAPTION>
     2000        LOW   HIGH
==============  =====  =====
<S>             <C>    <C>

First Quarter     .11   1.00
==============  =====  =====
Second Quarter    .16    .60
--------------  -----  -----
Third Quarter     .13    .22
--------------  -----  -----
Fourth Quarter  .0625    .30
--------------  -----  -----

--------------  -----  -----
    2001        LOW    HIGH
==============  =====  =====
First Quarter     .06    .19
--------------  -----  -----
Second Quarter    .01    .06
--------------  -----  -----
Third Quarter     .01    .02
--------------  -----  -----
Fourth Quarter   .004   .045
--------------  -----  -----

--------------  -----  -----
    2002        LOW    HIGH
--------------  -----  -----
First Quarter    .002  .0075
==============  =====  =====
Second Quarter  .0016  .0073
--------------  -----  -----
Third Quarter    .001  .0035
--------------  -----  -----
Fourth Quarter  .0008  .0025
--------------  -----  -----
</TABLE>


To date, the Company has not declared or paid dividends on its Common Stock.

As of December 31, 2002, there were approximately 752 shareholders of record (in
street  name)  of  the  company's  Common  Stock.

Sale  of  Unregistered  Stock
-----------------------------

During  the  fiscal  year ended December 31, 2002, the Company issued securities
using  the  exceptions  available  under  the  Securities  Act of 1933 including
unregistered  sales  made pursuant to Section 4(2) of the Securities Act of 1933
as follows:  (1) 70,727,127 shares of common stock were issued for conversion of
$138,000  of  principal  and  $13,969  of interest incurred on these convertible
notes  payable, (2) 84,970,000 shares of common stock were issued for consulting
and  professional  fees  valued  at  $253,305.

During  the  fiscal  year ended December 31, 2001, the Company issued securities
using  the  exceptions  available  under  the  Securities  Act of 1933 including
unregistered  sales  made pursuant to Section 4(2) of the Securities Act of 1933
as follows: (1) 132,109,372 shares of common stock were issued for conversion of
$992,653  of  notes payable and $33,789 of interest incurred on these notes, (2)
16,650,000  shares  of  common stock were issued for consulting and professional
fees  valued at $890,475 and $38,003 in cash, (3) 850,000 shares of common stock
were  issued  for  options  exercised  valued 24,625 and (4) 9,666,666 shares of
common  stock  were  issued  for  other  compensation  valued  at  $383,216.


                                      -9-
<PAGE>
During  the  fiscal  year ended December 31, 2000, the Company issued securities
using  the  exceptions  available  under  the  Securities  Act of 1933 including
unregistered  sales made pursuant to Section 4(2) of the Securities Act of 1933,
as  follows:  (1) 1,185,660 shares of common stock were issued for conversion of
$36,845  of  notes  payable  and  debt and $18,000 of interest incurred on these
notes,  (2)  6,262,168  shares  of  common  stock were issued for consulting and
professional  fees valued at $404,056, (3) 50,000 shares of common stock were as
part of the acquisition of the Netfame.com domain name, (4) 16,456,980 shares of
common  stock  were  issued  for $1,649,599; and (5) 15,499,999 shares of common
stock  were  issued  as  part  of  the  acquisition  of  Classic  Care,  Inc.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Critical Accounting Policies

Our critical and significant accounting policies, including the assumptions and
judgments underlying them, are disclosed in the Notes to the Financial
Statements.  These policies have been consistently applied in all material
respects and address such matters as revenue recognition and depreciation
methods.  The preparation of the financial statements in conformity with
generally accepted accounting principles in the US 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 reported period.  Actual results could differ from those estimates.

We recognize revenue at the time the product is shipped to the customer or when
services are rendered.  Outbound shipping and handling charges are included in
net sales.

Net client revenue represents the estimated net realizable amounts from clients,
third-party payors and others for sale of products or services rendered.  For
revenue recognition, revenue is recorded when the prescription is filled or when
services are performed.  A significant portion of revenue is from federal and
state reimbursement programs.

Contractual adjustments represent the difference between Classic Care Pharmacy's
established billing rate for covered products and services and amounts
reimbursed by third-party payors, pursuant to reimbursement agreements.

Plan of Operation

Our plan of operation is to: (1) expand the scope and range of existing
programs, and (2) accelerate our growth through the acquisition of select
strategic competitors that increase our existing revenues, expand the market
share of our programs, and open new channels of revenue and opportunity.

Short Terms Goals


     -    Complete  the  re-capitalization  of  Kaire.
     -    Achieve  full  integration  of  recent  acquisitions
     -    Continue  marketing  efforts  to  build  revenue.


                                      -10-
<PAGE>
     -    Redeem  the  outstanding  convertible  debentures.
     -    Develop  next  generation  of  support  and  benefit  programs.

Long Term Goals

     -    Introduce  next  generation  programs  and  services.
     -    Establish  internet  based  national  program  support and information
          network
     -    Integrate  next  generation  support  and  benefit  programs.

In our opinion, sufficient working capital will be available from internal
operations and from outside sources during the next twelve months thereby
enabling us to meet our obligations and commitments as they become payable.
Historically, we have been successful in our efforts to secure working capital
from private placements of common stock securities, bank debt, loans from
private investors and the exercise of warrants for common stock.  In addition,
we have significantly trimmed down our operations and made two key acquisitions
in 2003, which should assist in providing cash for operations.

RESULTS OF OPERATIONS

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001
---------------------------------------------------------------------

Net revenue from continuing operations for the year ended December 31, 2002 was
$1,891,003 as compared to $1,256,593 for the same period in 2001, or an increase
of $634,410.  The increase in net revenues was attributable to an increase in
the Health Advocacy Program ("HAP") revenues from the previous year. The HAP was
started in January 2001, and we achieved significant growth in 2002. We also had
a minor increase in sales to a hospice facility.

Gross profit for the year ended December 31, 2002 was $294,044 as compared to
$152,048 for the same period in 2001, or an increase of $141,996. The gross
profit percentage of 15% for the period ended December 31, 2002 increased from
12% for the same period in the prior year.  The increase was attributable to the
HAP margins being greater than the prior year.

Operating expenses for the period ending December 31, 2002 were $3,158,694 as
compared to $3,033,332 for the same period in 2001, or an increase of $125,362.
The operating expenses for the year ending 2002 includes a one-time charge of
$1,461,538 for the impairment of goodwill resulting from the Classic Care
acquisition. All other operating expenses decreased in aggregate by $1,336,176
from the same period prior year.  The decrease in expenses was mostly
attributable to the transfer of the Classic Care long term care business plus
expense reductions in  other areas, which are as follows: 1)) Salaries decreased
$533,669, 2) General administration decreased $296,068, 3) Depreciation expense
decreased $480,997 and Selling expenses decreased $33,474 offset by an increase
in rent of $8,032.

Interest expense was $284,234 for the year ended December 31, 2002 as compared
to $316,829 for the same period in 2001, or a decrease of $32,595.  The interest
expense decrease in 2002 was primarily a result of the principal repayment of
convertible notes.

During 2002, we incurred a loss on our investments in private companies of
$25,000, which was primarily due the investee not being able to obtain
additional capital for working capital needs. In 2002 we had a net non-operating
other income of $256,785, and the previous year we had no net non-operating
other income. The increase of $256,785 was mainly attributable to miscellaneous
income of $86,899, and a net gain due to the settlement on our note payable of
$169,886.


                                      -11-
<PAGE>
No deferred income tax benefit was recognized for Federal and State income tax
since we have incurred significant net operating losses. We recorded a valuation
allowance against our deferred tax assets primarily due the substantial doubt
regarding recoverability of tax benefits resulting from net operating loss carry
forwards.

The net loss for Kaire increased 49% for the year ending December 31, 2002 to
$3,587,811 from $2,401,210 for the year ending December 31, 2001.  The increase
in net loss was principally due to the costs incurred from the transfer of the
of Classic Care Pharmacy's long-term care business and charge for the impairment
of goodwill.

LIQUIDITY AND CAPITAL LOSSES

Net cash generated by (used) in operating activities for the year ended December
31, 2002 and 2001 was $203,181 and ($1,216,159), respectively.  The decrease in
cash used from operating activities in the year ended December 31, 2002 versus
2001 of $1,012,978 was principally due to reduced operations resulting from the
transfer of the Classic Care Pharmacy's board-and-care facilities business.

Net cash used in investing activities for the year ended December 31, 2002 and
2001 was $33,585 and $3,916 respectively, reflecting a change of $29,669.   This
change is due to purchases of equipment and leasehold improvements at our new
office during the year ended December 31, 2002 as compared to the same period
prior year.

Net cash generated by (used in) financing activities was $(211,947) and $971,009
for the year ended December 31, 2002 and 2001, respectively, reflecting a
decrease of $(1,182,956).  This decrease was principally due to decrease in
financing activities in 2002 versus 2001. In 2001 we received $1,200,000 in
proceeds from debt financings.

On December 31, 2002 the Company had assets of $285,182 compared to $11,528,505
on December 31, 2001. The Company had a total stockholder's (deficit) equity of
$(2,138,446) on December 31, 2002 compared to equity of $1,044,091 on December
31, 2001, a decrease of $3,182,537. The decrease in stockholders' equity for the
year ended December 31, 2002 was the result of the dissolution of Classic Care
Pharmacy. As of December 31, 2002 the Company's working capital position
increased by $5,431,041 from a working capital deficit of $7,596,792 at December
31, 2001 to a working capital deficit of $2,165,751 at December 31, 2002. This
result was attributed primarily to the settlement agreement reached with the
original shareholders of Classic Care Pharmacy and the partial principal
repayment of our note payables.

With the closing of Classic Care, our on going revenues may be insufficient to
cover the cost of revenues and operating expenses.  Therefore, we may be
dependent on private placements of our common stock and issuance of convertible
notes in order to sustain operations.  In addition, there can be no assurances
that the proceeds from private or other capital will continue to be available,
or that revenues will increase to meet our cash needs, or that a sufficient
amount of our common stock or other securities can or will be sold or that any
common stock purchase options/warrants will be exercised to fund our operating
needs.

Over the next twelve months, management is of the opinion that sufficient
working capital will be obtained from operations and external financing to meet
our operating needs.  To help in that matter we have reduced operating expenses
and has taken the following steps in 2003:

     1.   On  January 26, 2003, our subsidiary Effective Health, Inc., announced
          that  it  had  acquired  all  the  assets  of Sespe Pharmacy, which is
          located  in  the  Sespe  Medical  Clinic,  in Sespe, California. Sespe
          Pharmacy  is  a  growing  business  dispensing  on  average  75 retail
          prescriptions  per  day  and will be the base for growing another long
          term  care  business.


                                      -12-
<PAGE>
     2.   On  February  17,  2003, we ceased operations at Classic Care Pharmacy
          and  dissolved  Classic  Care,  Inc.

     3.   In  March  2003,  the  Company  through  its  subsidiary completed the
          acquisition of all the outstanding common shares of Entremetrix, Inc.,
          ("EntreMetrix')  a Southern California-based company. EntreMetrix is a
          national  provider  of  administrative  employer and financial support
          services  to small businesses primarily operating in the medical, life
          sciences  and  high-technology  industries.

GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, we have experienced net losses of
$3,587,811 and $2,401,210 for the years ended December 31, 2002 and 2001,
respectively. We have also had a net working capital deficit of $2,165,751 and
$7,596,792 for the years ended December 31, 2002 and 2001 respectively.  These
factors raise substantial doubt about our ability to continue as a going
concern.  Management has focused their efforts on the acquisition of operations
that not only operate profitably, but in a positive cash flow structure.
Subsequent to year end the Company has acquired two existing operations that fit
the profile outlined. This combined with our current negotiations to settle the
existing convertible debt; management believes these efforts will result in the
Company's ability to meet current and future obligations. However, if these
steps do not produce the required funds and Kaire is unable to obtain additional
funding in the future, it may be forced to curtail or terminate operations. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might be necessary should we be unable to
continue in existence.

We have previously relied on equity financing sources and debt offerings to fund
operations.  Our reliance on equity and debt financing will continue, and we
will continue to seek strategic acquisitions.

ITEM 7.   FINANCIAL STATEMENTS

The  report  of  independent  auditors and financial statements are set forth in
this  report  beginning  on  Page  F-1.


ITEM 8.   Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None


                                      -13-
<PAGE>
                                    PART III

ITEM 9.     Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act

     The Company's current officers and directors consist of the following
persons:

<TABLE>
<CAPTION>
------------------  ---  ----------------  -----
NAME                AGE       OFFICE       SINCE
------------------  ---  ----------------  -----
<S>                 <C>  <C>               <C>

Steven R. Westlund   58  Chairman and CEO   1995
------------------  ---  ----------------  -----
</TABLE>

Steven Westlund has been the Chief Executive Officer and a director of Kaire
since May 1995 and was elected Chairman of the Board in December 1995. Mr.
Westlund was Chairman of the Board and Chief Executive Officer of Vitafort
International Corporation from May 1993 through May 1995.  Vitafort manufactured
and sold fat free foods. From January 1991 to May 1993, Mr. Westlund was Chief
Executive Officer of Lorenz/Germaine Incorporated and concurrently from January
1991 to June 1992 he acted as Chairman and Chief Executive Officer of Auto
Giant. Mr. Westlund specializes in corporate restructuring and the development
and marketing of specialized products and services.

Directors receive no remuneration at this time. All Kaire Directors are entitled
to  reimbursement  of  funds  advanced  to  pay  expenses in connection with our
Company's  business.  Our Company has not established specific committees within
the  Board  of  Directors.
Compliance  with  Section  16(a)  of  the  Securities  Exchange  Act  of  1934

Section  16(a)  of  the  Securities  Exchange Act of 1934 requires the Company's
directors  and  executive  officers,  and  persons  who  own  more than 10% of a
registered  class of the Company's equity securities to file with the Securities
and  Exchange  Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.  Officers,
directors  and  greater than 10% shareholders are required by SEC regulations to
furnish  the  Company  with  copies  of  all  Section  16(a)  forms  they  file.

To  the  Company's  knowledge,  based solely on its review of the copies of such
reports  furnished  to  the  company  and  written representations that no other
reports  were  required  during  the  fiscal  year  ended December 31, 2001, all
Section  16(a)  filing  requirements  applicable  to its officers, directors and
greater  than  10%  beneficial  owners  were  complied  with.

ITEM 10.  Executive Compensation

The  following  table  sets  forth  certain  summary  information  regarding
compensation  paid  by the Company for services rendered during the fiscal years
ended December 31, 2002 and 2001, respectively, to the Company's Chief Executive
Officer,  President  and  Chief  Financial  Officer  during  such  period.


                                      -14-
<PAGE>
                           Summary Compensation Table

Executive Compensation:

<TABLE>
<CAPTION>
Payouts               Annual Compensation                    Long Term Compensation Awards
----------  -------------------------------------  -------------------------------------------------
(a)          (b)     (c)     (d)         (e)           (f)          (g)        (h)          (i)
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
Name        Year   Salary   Bonus   Other Annual   Restricted   Securities     LTIP      All Other
and                                 Compensation      Stock     Underlying   Payouts   Compensation
Principal                                ($)         Awards     Options/SA     ($)          ($)
Position                                               ($)         R (#)
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
<S>         <C>    <C>      <C>     <C>            <C>          <C>          <C>       <C>

CEO          2002     100K                                           33,333
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
President    2002     N/A
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
CFO          2002     N.A
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
Total:                100K
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
Directors             100K
as a
Group
----------  -----  -------  ------  -------------  -----------  -----------  --------  -------------
</TABLE>

Options/SAR  Grants  in  the  Last  Fiscal  Year

<TABLE>
<CAPTION>
------------------  --------------------  -----------------------  -----------  ---------------
                    Number of Securities  % of Total Options/SARS
                         Underlying       Granted to Employees in  Exercise or
Name                Options/SARS Granted        Fiscal Year        Base Price   Expiration Date
------------------  --------------------  -----------------------  -----------  ---------------
<S>                 <C>                   <C>                      <C>          <C>

Steven R. Westlund                     0
------------------  --------------------  -----------------------  -----------  ---------------
Owen M. Naccarato                      0
------------------  --------------------  -----------------------  -----------  ---------------
Mark L. Baum                           0
------------------  --------------------  -----------------------  -----------  ---------------
</TABLE>


Employment Agreements
---------------------

Steve Westlund: On April 1, 2000, Mr. Westlund signed a three-year employment
--------------
agreement (attached hereto as Exhibit 10.36).  The contract calls for Mr.
Westlund to be paid a base salary of $8,333.33 per month for the first year of
the term.  Mr. Westlund's base salary shall increase 15 % per year for the
second year and third years, respectively, per the agreement.

Although Mr. Westlund's Employment Agreement states that his salary is to be
$8,333.33 per month, his actual pay has been $ 4,000.00 per month. Mr. Westlund
is entitled to be paid the balance of his monthly compensation in either cash or
equity.  Additionally, Mr. Westlund has been granted an option to purchase up to
6 million shares of Kaire Common Stock over the next 5 years at an option price
of 5 cents ($ 0.05) per share.  To date, Mr. Westlund has exercised 5,966,667
shares of the Company's Common Stock.

The CEO also receives a commission of 3% of the merger price for any mergers or
acquisitions completed by the Company during the term of the agreement.

The Company has accrued amounts due under the above compensation agreement,
which is $197,541 as of December 31, 2002

Owen Naccarato:  On April 1, 2000, Mr. Naccarato signed a three-year employment
---------------
agreement (attached hereto as Exhibit 10.37).  The agreement calls for Mr.
Naccarato to be paid a base salary of $ 7,250.00 per month for the first year of
the term.  Mr. Naccarato's base salary shall increase 15 % per year for the
second year and third years, respectively, per the agreement.


                                      -15-
<PAGE>
Although Mr. Naccarato's Employment Agreement states that his salary is to be
$7,250.00 per month, his actual pay has been $ 4,000.00 per month. Mr. Naccarato
is entitled to be paid the balance of his monthly compensation in either cash or
equity.  Additionally, Mr. Naccarato has been granted an option to purchase up
to 4.5 million shares of Kaire Common Stock over the next 5 years at an option
price of 5 cents ($ 0.05) per share.  To date, Mr. Naccarato has exercised
3,500,000 shares of the Company's Common Stock.  Mr. Naccarato resigned as CFO
effective December 31, 2001.  He is still the outside general counsel for the
company and provides other financial consulting services.

Mark Baum:  On April 1, 2000, Mr. Baum signed a three-year Consulting Agreement
----------
(attached hereto as Exhibit 10.35).  The agreement calls for Mr. Baum to be paid
a base salary of $ 6,250.00 per month for the first year of the term.  Mr.
Baum's base salary shall increase 15 % per year for the second year and third
years, respectively, per the agreement.

Although Mr. Baum's Consulting Agreement stated that his salary was to be
$6250.00 per month, his actual pay was $ 4,000.00 per month. Mr. Baum was
entitled to be paid the balance of his monthly compensation in either cash or
equity.  Additionally, Mr. Baum had been granted an option to purchase up to 4.5
million shares of Kaire Common Stock over the next 5 years at an option price of
5 cents ($ 0.05) per share.  To date, Mr. Baum has exercised 3,500,000 shares of
the Company's Common Stock.  Mr. Baum resigned as President effective December
31, 2001.  The severance agreement resulted in no amounts being due to him as of
December 31, 2002.

Compensation of Directors:

Directors receive no remuneration for their services as directors at this time.
The  Company  offers  disability  insurance  to  all  its  employees  and health
insurance to certain employees.  The Company has adopted no retirement, pension,
profit  sharing  or  other  similar  programs.

ITEM 11.  Security Ownership of Certain Beneficial Owners and Management

The  following  table  sets  forth  certain information regarding the beneficial
ownership  of  the  Company's  Common  Stock  as  of  December 31, 2002 based on
information  available  to  the  Company  by (i) each person who is known by the
Company  to  own more than 5% of the outstanding Common Stock based upon reports
filed  by  such persons within the Securities and Exchange Commission; (ii) each
of the Company's directors; (iii) each of the Named Executive Officers; and (iv)
all  officers  and  directors  of  the  Company  as  a  group.

<TABLE>
<CAPTION>
Name and Address              Shares Beneficially Owned (1)  Percent of  Class
----------------------------  -----------------------------  ------------------
<S>                           <C>                            <C>
Steven R. Westlund                             4,000,000(2)                  0%
8135 Clybourne Avenue
Sun Valley, CA   91352

Officers and directors as a                      4,000,000                 .01%
group (4 persons)
</TABLE>


                                      -16-
<PAGE>
(1)  A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of the registration
statement upon the exercise of options or warrants. Each beneficial owner's
percentage ownership is determined by assuming that options or warrants that are
held by such person and which are exercisable within 60 days of the date of this
registration statement have been exercised. Unless otherwise indicated, we
believe that all persons named in the table have voting and investment power
with respect to all shares of common stock beneficially owned by them.

(2)  Represents shares purchased of our common stock in an employment agreement,
which  options  are  currently  exercisable.

ITEM 12.  Certain Relationships and Related Transaction

Profit Ventures, Inc.
---------------------

Mr. Joel Rubenstein is the Managing Director of Classic Care, and his spouse is
a shareholder in the Company.  Mr. Rubenstein is also a trustee of the Shagrila
Trust, which is the parent company of Profit Ventures, Inc.  In 2000, our
subsidiary Classic Care entered into an agreement with Profit Ventures, Inc., to
purchase products from Classic Care. Sales to Profit Ventures were $201,954 and
$3,341,524 for 2002 and 2001, respectively. Sales to Profit represented ceased
in April 2002. The amounts due from Profit Ventures, Inc. are included in
amounts due from related parties in 2001.

Joel Rubenstein
---------------

Mr. Rubenstein did not receive a portion of his compensation for serving as the
Managing Director of Classic Care.  Mr. Rubenstein has $30,000 in compensation
due from the Company for his services. The amount is included in the accrued
liabilities as of December 31, 2002. In August 2002, Mr. Rubenstein resigned his
position as managing director of Classic Care, Inc.

Mr. Rubenstein received advances from the Company totaling $26,000 and $3,500 in
2002  and  2001, respectively. In January 2002, Mr. Rubenstein advanced $150,000
to  the  Company, which was repaid by the Company. In February 2002, the Company
advanced  to  Mr.  Rubenstein  $26,000, and the Company has received payments of
$30,500 in 2002, which results in no amounts being due to or from Mr. Rubenstein
as  of  December  31,  2002.

In 2001, Mr. Rubenstein repaid to the Company $43,000, and the balance of $4,500
was  included  in  Receivable  from  Related  Parties.

Steve  Oscherowitz:
-------------------

Note  Receivable

Mr.  Steve  Oscherowitz,  a  shareholder  and  the prior majority shareholder of
Classic  Care, has an agreement with our subsidiary Classic Care, under which he
has loaned funds to and borrowed funds from the Company. In previous years, this
individual  has  loaned  to  Classic  Care  funds to meet its short-term working
capital needs. The Company advanced to this individual $338,540 during 2002, and
he  has  repaid  $749,704  in  2002.  The terms of the loans allow us to request
repayment  on  demand.  The  Company  had  a  receivable from this individual of
$411,164 as of December 31, 2001. The balance of the receivable account was paid
in  full  on  June  30,  2002.

Note  payable


                                      -17-
<PAGE>
At  December  31,  2001,  the Company has an unsecured note payable to Mr. Steve
Oscherowitz,  a shareholder and an original owner of Classic Care. The borrowing
was  due  originally in October 2000, is now due on demand and bears an interest
rate  of  6% per annum. The outstanding balance on the note of $167,250 was paid
on  June  30,  2002  through the offset of a note receivable. As of December 31,
2002,  there  are  no  outstanding  amounts  due  to  or  from  Mr. Oscherowitz.

Mrs.  Sarit  Rubenstein
-----------------------

Note  Payable

At December 31, 2001, we had an unsecured note payable to Mrs. Sarit Rubenstein,
a  shareholder  and  an  original  owner  of  Classic  Care.  The  loan  was due
originally  in October 2000, and is now due on demand, and bore an interest rate
of 6% per annum.  The outstanding balance on the note was $82,750 as of December
31,  2001. This amount was classified as a Note Payable to Related Party. During
fiscal  year  ended December 31, 2002, Classic Care, Inc. borrowed an additional
$13,000,  but  repaid  the  balance  due  in  May  2002.

In  May 2002, the Company repaid the entire principal balance of $82,750 for the
unsecured  note  payable, and the $13,000 we borrowed in April 2002. The accrued
interest  on  the  note payable was forgiven pursuant the sale agreement for the
long-term  care  services  business.


                                      -18-
<PAGE>
ITEM 13.  Exhibits, List and Reports in Form 8-K

     (a)  Exhibits

      3.    Articles of Incorporation and bylaws of the Company, as amended. (1)

      3.1   Amendment to the Articles of Incorporation dated November 25, 1997.

      3.2   Amendment to the Articles of Incorporation dated February 3, 1998.

      3.3   Amendment to the Articles of Incorporation dated January 31, 2002.

      4.1   Form of Warrant Agreement between the Company and Jersey Stock
            Transfer and Trust Company, including the Form of Warrant (as
            modified). (4)

      4.2   Form of Stock Purchase Warrant (issued with promissory note). (2)

      10.1  License Agreement between F.A.T. Co. Research, Inc. and Dynamic
            Products, Inc. (1)

      10.2  Agreements between F.A.T. Co. Research, Inc. and Dr. Shell and
            Jackie See for Development and Exploitation of Patented Invention.
            (1)

      10.3  Consulting Agreements between See/Shell and Drs. Dr. Shell and
            Jackie See. (1)

      10.4  Original Equipment Manufacturing Agreement between Olympus
            Corporation and E-Z Trac, Inc. (3)

      10.5  Distribution Agreement between E-Z Trac Inc., and Triton Technology,
            Inc. (3)

      10.6  Employment Agreement between the Company and William Peizer, Jr.
            dated December 24, 1992. (4)

      10.7  Agreement between William Peizer, Jr. and Clark M. Holcomb dated
            February 1, 1993. (4)

      10.8  Exchange of Stock Agreement and Plan of Reorganization among the
            Company, Venus Management, Inc. and the stockholders of Venus
            Management, Inc. (4)

      10.9  Co-Management Agreements dated June 30, 1993 between Venus
            Management, Inc. and Medical Funding of America, Inc. (4)

      10.10 Agreement dated June 30, 1993 between Venus Management, Inc. and
            Medical Funding of America, Inc. (4)

      10.11 Letter dated August 20, 1993 between the Company and Lewis, D'Amato,
            Brisbois & Bisgaard re Debt Conversion Agreement. (4)

      10.12 Letter agreement dated March 13, 1993 between the Company and Clark
            M. Holcomb; Sale of Stock Agreement, dated November 1, 1992 by and
            between the Company and Clark M. Holcomb; and related Promissory
            Note from Clark M. Holcomb to the Company. (4)

      10.13 Agreement concerning MRI System, dated as of February 10, 1994 by
            and between Siemens Credit Corporation, Venus Management, Inc., the
            Company, Medical Funding of America, Inc. and Tri-County Mobile MRI,
            L.P. and related Transfer of Interest Agreement, Corporate Guaranty
            by the Company, Amendment to Promissory Note of Medical Funding of
            America, Inc. payable to Siemens Credit Corporation and Agreement
            concerning Lease Payment between Venus Management, Inc. and
            Tri-County Mobile MRI, L.P. (4)

      10.14 Agreement dated August 27, 1992 by and between Dr. William Shell and
            Clark M. Holcomb related to shares of the Company's Common Stock
            owned by Dr. Shell. (4)

      10.15 Agreement dated September 23, 1993 by and between Ladenburg,
            Thalmann Co., Inc. and the Company. (4)

      10.16 Consulting Agreement for Financial Public Relations dated as of
            February 25, 1994 by and between the Company and Robert Bienstock
            and Richard Washor. (4)

      10.17 License Agreement, dated March 23, 1994 by and between Effective
            Health, Inc. and KCD Incorporated. (4)


                                      -19-
<PAGE>
      10.18 Professional Services Agreement, dated April 15, 1994 by and between
            RAI Finanz, and the Company. (4)

      10.19 Consulting Agreement and Stock Plan dated as of August 25, 1994 by
            and between the Company and Hy Ochberg. (4)

      10.20 Memorandum of Understanding dated as of August 16,1994 by and
            between the Company and Raifinanz (USA), Inc. (4)

      10.21 Resonex Equipment Lease as of June 30, 1993 between Venus Management
            Company and Medical Funding of America. (4)

      10.22 Becton Dickenson Supply Agreement dated November 2, 1994.

      10.23 Form 12b-25 dated March 30,1995.

      10.24 2nd & Final Revised Proposal to Acquire Pastels International,
            Incorporated (6)

      10.25 Revised Proposed Acquisition of Nutra Quest, Incorporated (6)

      10.26 Number skipped

      10.27 The 1998 Stock Compensation Plan (7)

      10.28 The Amendment to the 1998 Stock Compensation Plan (8)

      10.29 The 1999 Stock Compensation Plan (10)

      10.30 The 2000 Stock Compensation Plan (11)

      10.31 The Amendment to the 2000 Stock Compensation plan (12)

      10.32 Subscription Agreement (13)

      10.33 Convertible Debenture Agreement (13)

      10.34 Form of Warrant Agreement (13)

      10.35 Employment Agreement Mark Baum (13)

      10.36 Employment Agreement Steven Westlund (13)

      10.37 Employment Agreement Owen Naccarato (13)

      10.38 Modification Agreement (Modifying Exhibit 10.32)(13)

      10.39 Final Stason U.S.A. Agreement (13)

      10.40 Amended Classic Care Purchase Agreement (13)

      10.41 Subscription document dated August 20, 2001. (14)

      10.42 Classic Care Workout (spin-off) Agreement (15)

      10.43 Amendment One to the Workout Agreement (15)

      22.1  Subsidiaries of the Company & See/Shell Biotechnology, Inc. (1)

      22.2  Subsidiaries of the Company & E-Z Trac, Inc.-Articles of
            Incorporation, Amendments and By-Laws. (1)

      22.3  Subsidiaries of the Company & Effective Health, Inc.-Articles of
            Incorporation, Amendments and By-Laws. (1)

      22.4  Subsidiaries of the Company & Venus Management, Inc. Certificate of
            Incorporation, Amendments and By-Laws. (Included in Exhibit 10.9.)

      23.1  Consent of Pohl, McNabola, Berg & Company LLP.

      25.   Subsidiaries of the Company. (4)

      99.1  Sarbanes - Oxley Certification

      99.2  Sarbanes - Oxley Certification

---------------
          (1)  Previously filed as an exhibit to the Company's registration
               statement on Form S-18, file number 33-17548-NY, as amended on
               August 7, 1990, and incorporated herein by reference.

          (2)  Previously filed as an exhibit to the Company's registration
               statement on Form S-18, file number 33-17548-NY, as amended on
               February 12, 1991, and incorporated herein by reference.

          (3)  Previously filed as an exhibit to the Company's registration
               statement on Form S-1 8, file number 33-17548-NY, as amended on
               June 24, 1991, and incorporated herein by reference.


                                      -20-
<PAGE>
          (4)  Previously filed as an exhibit to the Company's Registration
               Statement on Form SB-2, file number 33-51684-NY, as amended on
               September 19, 1994, and incorporated herein by reference.

          (5)  Previously filed as an exhibit to the Company's Form 10-QSB filed
               for the quarterly period ended September 30, 1996.

          (6)  Previously filed as an exhibit to the Company's Form 10-KSB filed
               for the period ended December 31, 1996.

          (7)  Incorporated by reference to the Company's Form S-8 dated January
               9, 1998 and filed with the Commission on January 9, 1998.

          (8)  Incorporated by reference to the Company's Form S-8 dated March
               25, 1998 and filed with the Commission on March 25, 1998.

          (9)  Incorporated by reference to the Company's Form S-8 dated April
               4, 1999 and filed with the Commission on March 19, 1999.

          (10) Incorporated by reference to the Company's Form S-8 dated October
               15, 1999 and filed with the Commission on October 15, 1999.

          (11) Incorporated by reference to the Company's Form S-8 dated
               February 11, 2000 and filed with the Commission on February 11,
               2000.

          (12) Incorporated by reference to the Company's Form S-8 dated May 26,
               2000 and filed with the Commission on May 26, 2000.

          (13) Previously filed as an exhibit to the Company's Form 10-KSB filed
               for the period ended December 31, 2000.

          (14) Incorporated by reference to the Company's Form SB/2 dated and
               filed on August 27, 2001, file number 333-68444.

          (15) Previously filed as an exhibit to the Company's Form 10-KSB filed
               for the period ended December 31, 2001.

     (b)  Reports on Form 8-K:

     1.     Form 8-K dated June 7, 2002 reporting the sell its long term care
business as a result of the action taken by the Department of Health Services in
1) withholding 100 percent of payments to Classic Care, and 2) temporarily
suspending and deactivating Classic Care's Medi-Cal provider number.

     2.     Form 8-K dated November 13, 2001 reporting the spin-off Classic Care
Pharmacy  as  a  separate  public  entity.


                                      -21-
<PAGE>
ITEM 14. CONTROLS AND PROCEDURES

CEO CERTIFICATION

I, Steven Westlund, certify that:

     1.   I have reviewed this annual report on Form 10KSB of Kaire Holdings,
          Inc.,

     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 officer and I am responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we 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
               annual 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 registrant's board of directors (or persons
          performing the equivalent function):

          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 15, 2003

                          /s/ Steven Westlund
                          ---------------------------
                          Steven Westlund
                          Chief Executive Officer



                                      -22-
<PAGE>
CFO CERTIFICATION


I, Steven Westlund, certify that:

     1.   I have reviewed this annual report on Form 10KSB of Kaire Holdings,
          Inc.,

     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 officer and I am responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we 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
               annual 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 registrant's board of directors (or persons
          performing the equivalent function):

          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 15, 2003

                          /s/ Steven Westlund
                          ---------------------------
                          Steven Westlund
                          Chief Financial Officer



                                      -23-
<PAGE>
SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                         Kaire Holdings Incorporated

                         By:  /s/  Steven R. Westlund
                              ------------------------------------------
                              Steven R. Westlund Chief Executive Officer

                         Dated: April 15, 2003

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

/s/  Steven R. Westlund                             April 15, 2003
----------------------------------------------
Steven R. Westlund Chief Executive Officer and
Director


                                      -24-
<PAGE>



                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                           DECEMBER 31, 2002 AND 2001



<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2002 AND 2001




                                C O N T E N T S

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

Report of Independent Certified Public Accountants       1

Consolidated Balance Sheets                          2 - 3

Consolidated Statements of Operations                    4

Consolidated Statements of Stockholders' Equity          5

Consolidated Statements of Cash Flows                6 - 8

Notes to Consolidated Financial Statements          9 - 40


<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
Kaire Holdings Incorporated

We  have  audited the accompanying consolidated balance sheets of Kaire Holdings
Incorporated  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 financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

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

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  consolidated financial position of Kaire Holdings
Incorporated  and  subsidiaries  as  of  December  31,  2002  and  2001, and the
consolidated  results  of their operations and their consolidated cash flows for
the years then ended in conformity with accounting principles generally accepted
in  the  United  States  of  America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 2 to the
financial  statements, the Company has suffered recurring losses from operations
and  has  a  net  capital  deficiency,  which raises doubts about its ability to
continue  as  a  going concern.  Management's plans regarding those matters also
are  described  in  Note  2.  The  financial  statements  do  not  include  any
adjustments  that  might  result  from  the  outcome  of  this  uncertainty.





/s/ Pohl, McNabola, Berg & Company LLP

Pohl, McNabola, Berg & Company LLP
San Francisco, CA
March 30, 2003


<PAGE>
<TABLE>
<CAPTION>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                                 BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001



                                    ASSETS


                                                                December 31, 2002   December 31, 2001
                                                                ------------------  ------------------
<S>                                                             <C>                 <C>
Current assets
  Cash and cash equivalents                                     $           20,356  $           62,707
  Accounts receivable (net of allowance for doubtful accounts
    of $45,000 and $0 in 2002 and 2001, respectively)                       22,267             157,399
  Other receivables                                                        156,782                   -
  Deposits                                                                  53,919               4,750
  Current assets - discontinued operations, net                              4,553           2,301,133
                                                                ------------------  ------------------

    Total current assets                                                   257,877           2,525,989
                                                                ------------------  ------------------
Other assets
  Property and Equipment, net of accumulated depreciation                   27,305              13,949
  Investment                                                                     -              30,028
  Goodwill, net                                                                  -           8,958,539
                                                                ------------------  ------------------

    Total other assets                                                      27,305           9,002,516
                                                                ------------------  ------------------
        Total assets                                            $          285,182  $       11,528,505
                                                                ==================  ==================
</TABLE>

                                   (continued)



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

                                      - 2 -
<PAGE>
<TABLE>
<CAPTION>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                           BALANCE SHEETS (CONTINUED)
                           DECEMBER 31, 2002 AND 2001




                       LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                  December 31, 2002    December 31, 2001
                                                                 -------------------  -------------------
<S>                                                              <C>                  <C>
Current Liabilities
  Accounts payable and accrued expenses                                     754,876              520,195
  Income tax payable                                                          4,800                4,000
  Due to Stason Biotech                                                           -              175,000
  Note payable - acquisition                                                      -            7,419,881
  Payable to shareholders                                                    27,818                    -
  Liabilities of discontinued operations                                    757,868            1,531,533
  Convertible notes - current portion                                       878,266              472,172
                                                                 -------------------  -------------------
    Total current liabilities                                             2,423,628           10,122,781

Long term liabilities
  Convertible notes payable and debentures                                        -              361,633
                                                                 -------------------  -------------------

    Total long term liabilities                                                   -              361,633
                                                                 -------------------  -------------------

      Total liabilities                                                   2,423,628           10,484,414
                                                                 -------------------  -------------------

Stockholders' equity
  Common stock, $0.001 par value
    900,000,000 shares authorized; 432,738,198
    and 277,041,071 shares issued and outstanding, respectively             432,738              277,042
  Additional paid in capital                                             37,032,335           36,782,757
  Accumulated deficit                                                   (39,603,519)         (36,015,708)
                                                                 -------------------  -------------------
      Total stockholders' equity                                         (2,138,446)           1,044,091
                                                                 -------------------  -------------------

        Total liabilities and stockholders' equity               $          285,182   $       11,528,505
                                                                 ===================  ===================
</TABLE>



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

                                      - 3 -
<PAGE>
<TABLE>
<CAPTION>
                          KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                              2002           2001
                                                          -------------  -------------
<S>                                                       <C>            <C>
Net revenues                                              $  1,891,003   $  1,256,593
Cost of goods sold                                          (1,596,959)    (1,104,545)
                                                          -------------  -------------

    Gross profit                                               294,044        152,048
                                                          -------------  -------------

Operating expenses
  Salaries                                                     470,497      1,004,166
  Depreciation and amortization                                 98,960        579,957
  General and administrative                                 1,036,791      1,332,859
  Selling expense                                                7,323         40,797
  Rent                                                          83,585         75,553
  Impairment of goodwill                                     1,461,538              -
                                                          -------------  -------------

    Total operating expenses                                 3,158,694      3,033,332
                                                          -------------  -------------

Loss from operations                                        (2,864,650)    (2,881,284)
                                                          -------------  -------------

Other income (expenses)
  Interest expense                                            (284,234)      (316,829)
  Miscellaneous income                                          86,899              -
  Settlement of notes payable                                  169,886              -
  Shareholder fees                                                   -        (41,569)
  Gain (loss) on investment                                    (25,000)        (5,000)
                                                          -------------  -------------

    Total other income (expenses)                              (52,449)      (363,398)
                                                          -------------  -------------

Loss from continuing operations before income taxes         (2,917,099)    (3,244,682)

Provision for income taxes                                      (3,200)        (2,400)
                                                          -------------  -------------

Loss from continuing operations                             (2,920,299)    (3,247,082)
                                                          -------------  -------------

Discontinued operations
  Income (loss) from operations of discontinued segment
    (net of income tax expense of $0 in 2002 and 2001)        (459,015)       845,872

  Estimated loss on disposal of assets of discontinued
    segment (net of income tax expense of $0
    in 2002 and 2001)                                         (208,497)             -
                                                          -------------  -------------

Net Income                                                $ (3,587,811)  $ (2,401,210)
                                                          =============  =============
(Loss) earnings per weighted average share of
  common stock outstanding
    From continuing operations                            $     (0.008)  $     (0.028)
    From discontinued operations                                (0.002)         0.007
                                                          -------------  -------------
      Total loss per share                                $     (0.010)  $     (0.021)
                                                          =============  =============

Weighted-average shares outstanding - basic and diluted    361,827,811    115,928,137
                                                          =============  =============
</TABLE>


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

                                      - 4 -
<PAGE>
<TABLE>
<CAPTION>
                                KAIRE HOLDINGS INCORPORATED
                                     AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                        Common Stock       Common stock    Additional
                                   ---------------------   Subscription     Paid-In      Accumulated
                                     Shares      Amount     Receivable      Capital        Deficit         Total
<S>                                <C>          <C>       <C>             <C>           <C>            <C>

Balance, December 31, 2000         117,765,033  $117,765  $     (20,000)  $40,671,855   $(33,614,498)  $  7,155,122
                                   ===========  ========  ==============  ============  =============  =============
Issued for conversion
of notes payable                   126,680,856   126,681              -       865,972              -        992,653

Issued for convertible
note interest                        5,428,516     5,429              -        28,360              -         33,789

Issued for professional
services                               850,000     6,350              -        18,275              -         24,625

Conversion of stock options         16,650,000    11,150              -       126,853              -        138,003

Consulting expense recognized
in stock conversions                         -         -              -       790,475              -        790,475

Issued for officers' compensation    9,666,666     9,667              -       237,000              -        246,667

Recognition of deferred
compensation expense                         -         -              -       142,549              -        142,549

Stock subscriptions receivable               -         -         20,000             -              -         20,000

Adjustment for acquisition
of Classic Care                              -         -              -    (6,345,000)             -     (6,345,000)

Warrant issuance                             -         -              -       140,000              -        140,000

Bond discount                                -         -              -       106,418              -        106,418

Net loss                                     -         -              -             -     (2,401,210)    (2,401,210)
                                   -----------  --------  --------------  ------------  -------------  -------------

Balance, December 31, 2001         277,041,071   277,042              -    36,782,757    (36,015,708)     1,044,091
                                   ===========  ========  ==============  ============  =============  =============

Issued for conversion
of notes payable                    63,024,775    63,024              -        74,976              -        138,000

Issued for convertible                                                                                            -
note interest                        7,702,352     7,702              -         6,267              -         13,969

Issued for professional
Services                            84,970,000    84,970              -       168,335              -        253,305

Net loss                                     -         -              -             -     (3,587,811)    (3,587,811)
                                   -----------  --------  --------------  ------------  -------------  -------------
Balance, December 31, 2002         432,738,198   432,738              -    37,032,335    (39,603,519)    (2,138,446)
                                   ===========  ========  ==============  ============  =============  =============
</TABLE>



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

                                      - 5 -
<PAGE>
<TABLE>
<CAPTION>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                            2002          2001
                                                                        ------------  ------------
<S>                                                                     <C>           <C>
Increase (decrease) in cash and cash equivalents
  Net income (loss)                                                     $(3,587,811)  $(2,401,210)
  Adjustments to reconcile net loss to net cash used
    in operating activities
      Depreciation and amortization                                          98,960        93,521
      Amortization of goodwill                                                    -       486,436
      Allowance for bad debts                                                45,000             -
      Reserve for other receivables                                         300,000             -
      Amortization of warrant and bond issuance discount                    182,461       128,417
      Common stock issued for professional services                         253,305       915,100
      Common stock issued for payment of interest                            13,969        33,789
      Common stock issued for other compensation                                  -        77,185
      Loss on disposal of assets                                                  -         3,392
      Loss on investment                                                     25,000         5,000
      (Income) loss from operations of discontinued operations              459,015      (845,872)
      Loss on disposition of assets of discontinued operations              208,497             -
      Change in net assets and liabilities of discontinued operations     1,128,586       507,999
      Gain on settlement of note payable                                   (169,886)            -
      Impairment of goodwill                                              1,461,538             -
      Other                                                                       -       (11,583)
      Non-cash other income                                                 (35,115)            -
                                                                        ------------  ------------

      Total adjustments to net income                                   $   383,519   $(1,007,826)
                                                                        ------------  ------------

Cash flow from operating activities:
  Changes in assets and liabilities
    Trade accounts receivable                                           $    90,132   $   (63,528)
    Deposits                                                                (49,169)            -
    Other receivables                                                      (456,782)            -
    Income and sales tax payable                                                800        (5,726)
    Accrued interest on convertible notes                                    42,533        74,524
    Accrued interest on notes payable - related parties                           -             -
    Accounts payable and accrued expenses                                   192,148      (213,603)
                                                                        ------------  ------------

        Cash flow generated by (used in) operating activities           $   203,181   $(1,216,159)
                                                                        ------------  ------------
</TABLE>

                                   (continued)


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

                                      - 6 -
<PAGE>
<TABLE>
<CAPTION>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                 2002        2001
                                                              ----------  -----------
<S>                                                           <C>         <C>
Cash flow from investing activities:
  Purchase of property, equipment and leaseholds              $ (33,585)  $   (3,916)
                                                              ----------  -----------

        Net cash generated by (used in) investing activities  $ (33,585)  $   (3,916)
                                                              ----------  -----------

Cash flow from financing activities:
  Proceeds from notes payable - shareholders                  $  45,318   $        -
  Payments on note payable - shareholders                       (17,500)           -
  Proceeds from notes payable - Classic Care shareholders       222,954            -
  Payments on notes payable - Classic Care shareholders        (396,290)    (226,119)
  Capital lease payments                                        (66,429)     (60,818)
  Common stock issued for options exercised                           -       38,003
  Subscriptions received                                              -       20,000
  Proceeds from convertible debenture                                 -    1,200,000
                                                              ----------  -----------

        Net cash generated by (used in) financing activities  $(211,947)  $  971,066
                                                              ----------  -----------

        Net (decrease) increase in cash
        and cash equivalents                                  $ (42,351)  $ (249,009)
                                                              ----------  -----------

        Cash and cash equivalents at beginning of year           62,707      311,716
                                                              ----------  -----------

        Cash and cash equivalents at end of year              $  20,356   $   62,707
                                                              ==========  ===========
</TABLE>

                                   (continued)



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

                                      - 7 -
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                     2002     2001
                                                    -------  -------
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the year for
    Interest                                        $21,773  $26,957
                                                    =======  =======
    Income taxes                                    $ 3,200  $ 3,200
                                                    =======  =======


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

     During  the  year  ended  December  31,  2002, the Company entered into the
     following  non-cash  transactions:

          Issued 70,727,127 shares of common stock for conversion of $138,000 of
          notes  payable,  and  $13,969  of  accrued  interest;

          Issued 84,9700,000 shares of common stock for conversion of conversion
          of  stock  options  for  consulting  services  valued  at  $253,305;

          In  May  2002,  the  company  transferred  its long-term care services
          business  to  the  previous  shareholders of Classic Care, Inc., for a
          release  from  repaying amounts due them from the original acquisition
          and  certain  other  liabilities:


              Goodwill                                             $ (7,497,001)
              Note receivable from Classic Care shareholders           (174,578)
              Note payable - acquisition                              7,419,881
              Other liabilities                                         251,698
                                                                   -------------
                  Net assets (liabilities) transferred             $          -
                                                                   =============


     During  the  year  ended  December  31,  2001, the Company entered into the
     following  non-cash  transactions:

          Issued  132,109,372  shares of common stock for conversion of $992,653
          of  notes  payable,  and  $33,789  of  accrued  interest;

          Issued  850,000 shares of common stock for professional fees valued at
          $24,625;

          Issued  16,650,000 shares of common stock for conversion of conversion
          of  stock  options  for  consulting  services  valued  at  $890,475;

          Issued  9,666,666  shares  of  common stock for officers' compensation
          expense  valued  at  $389,216.


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

                                      - 8 -

<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
     ----------------------------------------------

Organization  and  Line  of  Business
-------------------------------------

Kaire  Holdings Incorporated ("Kaire" or "the Company"), a Delaware corporation,
was incorporated on June 2, 1986.  Effective February 3, 1998, Kaire changed its
name  to Kaire Holdings Incorporated from Interactive Medical Technologies, Ltd.
in  connection  with  its  investment  in  Kaire  International,  Inc.  ("KII").

In  1999,  the  Company formed YesRx.com, Inc., an Internet drugstore focused on
pharmaceuticals, health, and wellness and beauty products.  YesRx.Com focuses on
selling  drugs  for  chronic care as opposed to emergency needs and works mainly
with the patient who has regular medication needs and requires multiple refills.
In  November  of  2000,  the  Company  advanced  its  business strategy with the
introduction  of the YesRx Health Advocate Program.  The Health Advocate Program
provides  medication compliance programs to HIV/AIDS, diabetic and senior health
communities.

During  2000,  the  Company  completed  a  reorganization  of the Company, which
included  the  transfer  of  the  assets  of EZ TRAC, Inc. to a new corporation,
Stason Biotech, Inc., in exchange for 40% of the outstanding common stock of the
new  corporation  and  the  acquisition  of  Classic  Care  Pharmacy.  These
transactions reflected management's strategic plan to transform the Company from
a  provider of medical testing and laboratory analysis to becoming a provider of
prescription  medication and supplies to senior citizens and individuals needing
chronic  care.

In May 2000, the Company acquired Classic Care, Inc. ("Classic Care"), which was
organized  as  a  corporation  in  April  1997,  under  the Laws of the State of
California.  Classic  Care  operates  as an agency distributor of pharmaceutical
products,  via  a  unique  prescription packaging system for consumers at senior
assisted  living  and  retirement centers in the Los Angeles area.  Classic Care
purchases  prescription  drugs  in  bulk and fills prescriptions for individuals
living  in  the aforementioned facilities.  Primary sales are to individuals and
consist  of  packaged  prescription drugs in prescribed dosages.  These packaged
drug  sales  are  primarily  paid for by Medi-Cal, and the balances of the sales
that are not covered by Medi-Cal are paid directly by individuals.  Classic Care
bills  Medi-Cal  and  other  third-party  payors  on  behalf of the customer and
receives  payment  directly  from  Medi-Cal.

On  May 20, 2002, the Company and the original Classic Care Shareholders reached
an  agreement  to  settle  all amounts due them.  This agreement resulted in the
Company  selling the long-term services business clients to the original Classic
Care  shareholders  and  relinquishing  all  rights  in  the  long-term services
business  in  return  for  a  release  from  repaying  the  promissory notes and
contingent  payments resulting from the original acquisition.  In December 2002,
the  Company  was informed by the Department of Health Services ("DHS") that the
Medi-Cal  Program  was  taking  the  following  actions against Classic Care: 1)
withholding  100  percent  of  payment  to  Classic  Care;  and  2)  temporarily
suspending and deactivating Classic Care's Medi-Cal provider number.  In January
2003,  the  Company's  management  decided  to  start the process of a voluntary
dissolution  of  Classic  Care.

In  November  2002,  the Company, through its subsidiary Effective Health, Inc.,
opened  escrow to purchase all tangible and intangible assets of Sespe Pharmacy,
a privately held company located in Fillmore, California.  The asset acquisition
was  concluded  on  January  26,  2003.


                                      -9-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
     ----------------------------------------------------------

Principles  of  Consolidation
-----------------------------

The  consolidated  financial  statements  include  the accounts of Kaire and its
wholly  owned  subsidiaries  (collectively  the  "Company").  The  Company's
subsidiaries  include  See/Shell  Biotechnology,  Inc.,  Venus Management, Inc.,
EFFECTIVE Health, Inc. (dba Sespe Pharmacy), and Classic Care, Inc. (dba Classic
Care  Pharmacy).  Intercompany  accounts  and  transactions have been eliminated
upon  consolidation.


Estimates
---------

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 the disclosures of
contingent  assets  and  liabilities at the date of the financial statements, as
well  as  the  reported  amounts  of  revenues and expenses during the reporting
period.  Actual  results  could  differ  from  those  estimates.  Significant
estimates  include  valuation  of  goodwill, allowance for doubtful accounts and
third-party  contractual  agreements,  and the net realizable value of assets of
discontinued  operations.


Cash  and  Cash  Equivalents
----------------------------

For  purpose  of  the statements of cash flows, cash equivalents include amounts
invested  in  a  money market account with a financial institution.  The Company
considers  all  highly  liquid  investments  with  an original maturity of three
months  or  less  to be cash equivalents.  Cash equivalents are carried at cost,
which  approximates  market.


Concentration  of  Cash
-----------------------

The  Company  at times during the year maintained cash balances in excess of the
federally  insured  limit  of $100,000 per institution.  There were no uninsured
balances  as  of  December  31,  2002  and  2001.


Revenue  Recognition
--------------------

The  Company  recognizes  revenue  at  the  time  the  product is shipped to the
customer  or  services are rendered.  Outbound shipping and handling charges are
included  in  net  sales.


Net  Client  Revenue
--------------------

Net client revenue represents the estimated net realizable amounts from clients,
third-party  payors  and  others for sale of products or services rendered.  For
revenue recognition, revenue is recorded when the prescription is filled or when
services  are  performed.  A  significant portion of revenue is from federal and
state  reimbursement  programs.


                                      -10-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
     ----------------------------------------------------------

Third-Party  Contractual  Adjustments
-------------------------------------

Contractual adjustments represent the difference between Classic Care Pharmacy's
established  billing  rate  for  covered  products  and  services  and  amounts
reimbursed  by  third-party  payors,  pursuant  to  reimbursement  agreements.


Net  Loss  Per  Share
---------------------

Income  (loss)  per  common  share is computed on the weighted average number of
common shares outstanding during each year.  Basic EPS is computed as net income
(loss)  applicable to common stockholders divided by the weighted average number
of common shares outstanding for the period.  Diluted EPS reflects the potential
dilution  that  could  occur  from common shares issuable through stock options,
warrants  and  other  convertible  securities when the effect would be dilutive.


Inventory
---------

Inventory  consists primarily of pharmaceuticals and health care products and is
stated  at  the  lower  of  cost  or  market  on  a  first-in-first-out  basis.


Property  and  Equipment
------------------------

Property  and  equipment  are  stated  at  cost.  Depreciation  is  computed for
financial  reporting  purposes using the straight-line method over the estimated
useful  lives of the assets.  Amortization of leasehold improvements is computed
using  the  straight-line method over the shorter of the remaining lease term or
the  estimated  useful  lives  of  the  improvements.  The  Company  uses  other
depreciation  methods  (generally  accelerated)  for  tax purposes.  Repairs and
maintenance  that  do  not  extend the useful life of property and equipment are
charged  to  expense  as  incurred.  When  property and equipment are retired or
otherwise  disposed  of,  the asset and its accumulated depreciation are removed
from  the  accounts  and  the  resulting  profit or loss is reflected in income.

The  estimated  service  lives  of  property  and  equipment  are principally as
follows:

               Leasehold improvements       3-7 years
               Computers and equipment      3-5 years
               Furniture & Fixtures         5-7 years
               Software                     3-5 years

Assets  held  under  capital leases are recorded at the lower of the net present
value of the minimum lease payments or the fair value of the leased asset at the
inception  of  the  lease.  Amortization  expense  is  computed  using  the
straight-line  method  over  the  shorter  of  the estimated useful lives of the
assets  or  the  period  of  the  related  lease.


                                      -11-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
     ----------------------------------------------------------

Goodwill
--------

The  Company  capitalizes as goodwill the excess acquisition costs over the fair
value  of  net  assets acquired, in connection with business acquisitions, which
costs  were  being  amortized on a straight-line method over 20 years.  In 2002,
the  Company  adopted  the  provisions  of  SFAS  No.  142,  "Goodwill and Other
Intangible  Assets",  and  accordingly  goodwill  and  intangible  assets  with
indefinite  lives  are  no longer amortized but instead tested for impairment at
least  annually.  The  carrying amount of goodwill will be reviewed periodically
based on the undiscounted cash flows of the entities acquired over the remaining
amortization  period.

The  carrying  value of goodwill for Classic Care was deemed to be impaired as a
result  of  the  transfer  of  the long-term care pharmacy contracts back to the
original  shareholders  of  Classic  Care  operations  in  January  2003.


Income  Taxes
-------------

The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
the  recognition  of deferred tax assets and liabilities for the expected future
tax  consequences  of events that have been included in the financial statements
or tax returns.  Under this method, deferred income taxes are recognized for the
tax  consequences in future years of differences between the tax bases of assets
and  liabilities  and their financial reporting amounts at each period end based
on  enacted  tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income.  Valuation allowances are
established,  when  necessary,  to  reduce  deferred  tax  assets  to the amount
expected  to  be  realized.  The  provision  for income taxes represents the tax
payable  for  the period and the change during the period in deferred tax assets
and  liabilities.


Fair  Value  of  Financial  Instruments
---------------------------------------

The  Company  measures  its  financial assets and liabilities in accordance with
generally  accepted accounting principles.  SFAS NO. 107, "Disclosure about Fair
Value of Financial Instruments," requires certain disclosures regarding the fair
value  of  financial  instruments.  For  certain  of  the  Company's  financial
instruments,  including  cash  and  cash  equivalents  and  accounts payable and
accrued  liabilities,  the  carrying amounts approximate fair value due to their
short  maturities.  The  amounts  shown  for notes payable also approximate fair
value  because current interest rates offered to the Company for debt of similar
maturities  are  substantially  the  same.


                                      -12-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     ------------------------------------------------------

Stock-Based  Compensation
-------------------------

SFAS  No.  123,  "Accounting  for  Stock-Based  Compensation,"  establishes  and
encourages  the use of the fair value based method of accounting for stock-based
compensation  arrangements under which compensation cost is determined using the
fair value of stock-based compensation determined as of the date of grant and is
recognized  over  the  periods  in which the related services are rendered.  The
statement also permits companies to elect to continue using the current implicit
value  accounting  method  specified  in  Accounting Principles Bulletin ("APB")
Opinion  No.  25,  "Accounting  for  Stock  Issued to Employees," to account for
stock-based  compensation.

The Company determined that it will not change to the fair value method and will
continue  to  use  the  implicit  value based method for stock options issued to
employees  and  has disclosed the pro forma effect of using the fair value based
method  to  account  for  its  stock-based  compensation.

The  FASB  released  Interpretation  No.44, "Accounting for Certain Transactions
Involving  Stock  Compensation."  This Interpretation addresses certain practice
issues  related  to  APB  Opinion  No.25.  The provisions of this Interpretation
shall  be  applied  to new awards, exchanges of awards in business combinations,
modifications  to  an  outstanding  award,  and exchanges in grantee status that
occur.


Comprehensive  Income  (Loss)
-----------------------------

Statement  of  Financial  Accounting Standards No. 130, "Reporting Comprehensive
Income"  (SFAS  130)  established  standards  for  reporting  and  display  of
comprehensive  income (loss) and its components in a full set of general-purpose
financial  statements.  Comprehensive  income  consists  of  net  income  and
unrealized  gains  (losses)  on  available-for-sale securities; foreign currency
translation  adjustments;  changes  in  market  values  of future contracts that
qualify  as  a  hedge;  and negative equity adjustments recognized in accordance
with  SFAS  No.  87.  The  Company,  however,  does  not  have any components of
comprehensive  income (loss) as defined by SFAS 130 and therefore, for the years
ended  December  31,  2002  and  2001,  comprehensive  loss is equivalent to the
Company's  net  loss.


Long-Lived  Assets
------------------

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
the Company periodically evaluates the carrying value of long-lived assets to be
held  and  used,  including  intangible  assets,  when  events and circumstances
warrant  such  a review.  The carrying value of a long-lived asset is considered
impaired when the anticipated discounted cash flow from such asset is separately
identifiable  and  is  less  than  its carrying value.  In that event, a loss is
recognized  based  on  the  amount  by which the carrying value exceeds the fair
market value of the long-lived asset.  Fair market value is determined primarily
using the anticipated cash flows discounted at a rate commensurate with the risk
involved.  Losses  on  long-lived  assets  to be disposed of are determined in a
similar  manner,  except  that  fair  market  values are reduced for the cost to
dispose.

Investments in corporate equity securities of privately held companies, in which
the  Company holds a less than 20% equity interest, are classified as long-term.


                                      -13-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     ------------------------------------------------------

Equity  Method  of  Accounting  for  Investments
------------------------------------------------

The  equity  method  of  accounting  is  used  when the Company has a 20% to 50%
interest  in  other entities.  Under the equity method, original investments are
recorded  at  cost and adjusted by the Company's share of undistributed earnings
or  losses  of  these entities.  Non-marketable investments in which the Company
has  less  than  20  %  interest  and  in  which it does not have the ability to
exercise  significant influence over the investee are initially recorded at cost
and  periodically  reviewed  for  impairment.


Advertising  Costs
------------------

The  Company  expenses  advertising  and  marketing  costs as they are incurred.
Advertising  and  marketing costs for the years ended December 31, 2002 and 2001
were  $30,437  and  $25,644,  respectively.


Reclassifications
-----------------

Certain  amounts  in  the  2001  financial  statements have been reclassified to
conform  to  the  2002  presentations.  These reclassifications had no effect on
previously  reported  results  of  operations  or  retained  earnings.


Segment  and  Geographic  Information
-------------------------------------

The FASB issued SFAS No. 131 on "Disclosures about Segments of an Enterprise and
Related Information" effective in 1998.  SFAS 131 requires enterprises to report
information about operating segments in annual financial statements and selected
information  about  reportable  segments  in interim financial reports issued to
shareholders,  on  the  basis  that  is  used  internally for evaluating segment
performance  and  deciding  how  to  allocate  resources  to  segments.  It also
established  standards  for  related  disclosures  about  products and services,
geographic  areas  and  major customers.  The Company evaluated SFAS No. 131 and
determined  that  the  Company  operates  in  only  one  segment.


Accounting  for  Derivative  Instruments  and  Hedging  Activities
------------------------------------------------------------------

The  Financial Accounting Standard Board (FASB) issued SFAS No. 133, "Accounting
for  Derivative Instruments and Hedging Activities".  SFAS No. 133 requires that
an  enterprise  recognize all derivatives as either assets or liabilities in the
statement  of  financial  position  and measure those instruments at fair value.
This  statement is effective for fiscal years beginning after June 15, 2000, and
has been adopted by the Company for the year ending December 31, 2000.  SFAS No.
133  does  not  have  a  material impact on its financial position or results of
operations,  as  the  Company  does  not  have  any  derivative  instruments.


                                      -14-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
     ----------------------------------------------------------

Accounting for Derivative Instruments and Hedging Activities (continued)
------------------------------------------------------------------------

The  Financial  Accounting  Standards Board issued SFAS No. 137, "Accounting for
Derivative  Instruments and Hedging Activities-Deferral of the effective Date of
FASB  Statement No. 133," The statement is effective for periods beginning after
June 1999 and amends paragraph 48 of SFAS No. 133 and supersedes paragraph 50 of
SFAS  No.  133.  SFAS  No.  137 does not have a material impact on its financial
position  or  results  of  operations.

The  Financial  Accounting  Standards Board issued SFAS No. 138, "Accounting for
Certain  Derivative  Instruments  and Certain Hedging Activities-an amendment of
FASB  Statement  No. 133," The Statement is effective for all fiscal quarters of
all  fiscal  years  beginning after June 15, 2000.  SFAS No. 138 does not have a
material  impact  on  its  financial  position  or  results  of  operations.


Other  Accounting  Pronouncements
---------------------------------

In  July  2001,  the  Financial  Accounting Standards Board issued Statements of
Financial  Accounting Standards No. 141, "Business Combinations" ("FAS 141") and
No.  142,  "Goodwill  and  Other  Intangible  Assets" ("FAS 142").  SFAS No. 141
requires all business combinations initiated after June 30, 2001 to be accounted
for  using  the  purchase  method.  Under  SFAS No. 142, goodwill and intangible
assets  with  indefinite  lives  are  no longer amortized but instead tested for
impairment  at  least annually in accordance with the provisions of FAS No. 142.
FAS  No.  142  will  also  require that intangible assets with definite lives be
amortized over their respective useful lives to their estimated residual values,
and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the
Impairment  of  Long-Lived  Assets and for Long-Lived Assets to be Disposed Of."
The provisions of this Statement are required to be applied starting with fiscal
years  beginning  after  December  15,  2001.  The  Company will not continue to
amortize goodwill existing at December 31, 2001, and will perform an annual test
for  goodwill  impairment  in accordance with SFAS No. 121.  The Company adopted
the  standard  starting  January  1,  2002.  The  Company recorded an impairment
charge  in  2002  as  a  result  of  the  impairment  test  (see  Note  18).

In  June  2001,  the  FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations."  SFAS  No.  143  requires  liability  recognition  for obligations
associated  with  the retirement of tangible long-lived asset and the associated
asset  retirement  costs.  The  Statement  is effective for financial statements
issued  for  fiscal years beginning after June 15, 2002 with earlier application
encouraged.  The  implementation of SFAS No. 143 will not have a material affect
on  the  Company's  results  of  operations  or  financial  position.


                                      -15-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     ------------------------------------------------------

Other  Accounting  Pronouncements  (continued)
----------------------------------------------

In August 2001, the FASB issued SFAFS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  SFAS  No.  144  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed  of",  in  that  it  removes goodwill from its impairment scope and
allows  for different approaches in cash flow estimation.  However, SFAS No. 144
retains  the  fundamental  provisions  of  SFAS  No. 121 for (a) recognition and
measurement  of  long-lived  assets  to  be held and used and (b) measurement of
long-lived  assets to be disposed of.  SFAS No. 144 also supersedes the business
segment  concept  in  APB  opinion  No.  30,  "Reporting  the  Results  of
Operations-Reporting  the  Effects  of  Disposal of a Segment of a Business, and
Extraordinary,  Unusual  and Infrequently Occurring Events and Transactions," in
that  it permits presentation of a component of an entity, whether classified as
held  for  sale  or disposed of, as a discontinued operation.  However, SFAS No.
144  retains  the  requirement  of  APB  Opinion  No.  30 to report discontinued
operations  separately  from  continuing  operations.  The  provisions  of  this
Statement  are  effective  for  financial  statements  issued  for  fiscal years
beginning  after  December  15,  2001  with earlier application encouraged.  The
Company  adopted  SFAS  No.  144  effective  January  1,  2002.

On April 30, 2002, the FASB issued Statement 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  FASB  145  rescinds  Statement  4,  which  required all gains and
losses  from  extinguishments  of  debt  to  be  aggregated  and,  if  material,
classified  as  an  extraordinary item, net of related income tax effect.  Early
application  of  the  provisions  of  FASB 145 may be as of the beginning of the
fiscal  year  or  as of the beginning of the interim period in which FASB 145 is
issued.  The  Company  has  elected  to  adopt  FASB 145, but it will not have a
material  effect  on  the  December  31,  2002  financial  statements.

In July 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards No. 146 ("SFAS 146"), "Accounting for Costs
Associated  with  Exit  or  Disposal  Activities."  SFAS  146  requires  that  a
liability  for  costs associated with an exit or disposal activity be recognized
and  measured initially at fair value only when the liability is incurred.  SFAS
146  is  effective  for  exit  or  disposal  activities that are initiated after
December 31, 2002.  Management is evaluating the effect of this statement on the
Company's  results  of  operations  and  financial  position.


                                      -16-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


2.   GOING  CONCERN
     --------------

The  accompanying  financial  statements  have  been prepared in conformity with
generally  accepted accounting principles, which contemplate continuation of the
Company  as a going concern.  However, the Company has experienced net losses of
$3,587,811  and  $2,401,210  for  the  years  ended  December 31, 2002 and 2001,
respectively.  The  Company  also  had  a  net working deficit of $2,183,751 and
$7,596,792  for  the  years  ended  December  31,  2002  and  2001 respectively.
Additionally,  the  Company  must  raise  additional capital to meet its working
capital  needs  subsequent  to  the spin-off of Classic Care.  If the Company is
unable  to  raise  sufficient  capital  to  fund  its  operations for the Health
Advocacy  program,  it might be required to discontinue its pharmacy operations.
These factors raise substantial doubt about the Company's ability to continue as
a  going  concern.  In  view of the matters described above, recoverability of a
major  portion  of  the recorded asset amounts shown in the accompanying balance
sheet  is  dependent  upon  the  Company's  ability to generate sufficient sales
volume  to  cover its operating expenses and to raise sufficient capital to meet
its  payment  obligations.  The  financial  statements  do  not  include  any
adjustments  relating to the recoverability and classification of recorded asset
amounts,  or  amounts  and classification of liabilities that might be necessary
should  the  Company  be  unable  to  continue  in  existence.

Management  has previously relied on equity financing sources and debt offerings
to  fund  operations.  The  Company's reliance on equity and debt financing will
continue,  and  the  Company  will  continue  to  seek  to  enter into strategic
acquisitions.  In  March  2003,  the  Company  concluded  the  acquisition  of
EntreMetrix,  Inc.,  a  privately  held  employee  services  firm.



3.   INVESTMENTS
     -----------

Investments as of December 31, 2002 and 2001 consist of the following:



                                   2002    2001
                                   -----  -------
             Stason Biotech, Inc.  $   -  $ 5,028
             Ebility, Inc.             -   25,000
                                   -----  -------
                                   $   -  $30,028
                                   =====  =======

The investment in Stason Biotech, made during 2000, represents the Company's 40%
share  of  earnings  in  this  company  for  the year ended December 31, 2000 as
recorded under the equity method of accounting.  The investment in Ebility, made
during  2000, is recorded under the cost method of accounting.  Both investments
were  written  off  during  2002,  due to the Company's inability to continue to
finance  their  operations  and  the  investees'  inability to obtain additional
capital.

The  Company's  investment  in NetFame.Com, an Internet venture, was written off
during  2001,  due  to  NetFame.Com  ceasing  operations.


                                      -17-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


3.   INVESTMENTS  (CONTINUED)
     ------------------------

At  December 31, 2002, and 2001, "Investments" as shown on the Company's Balance
Sheet  consisted  of the cost of an investment in Stason Biotech, Inc., in which
the  Company  has a 40% interest.  Prior to 2001, the Company's 40% ownership in
this affiliate was recorded on the equity basis.  In 2001, the Company concluded
that  it could no longer and did not exert any significant influence over Stason
Biotech, Inc.'s operating and financial activities; therefore, the Company began
accounting  for this investment using the cost method effective January 1, 2001.
The  carrying  value  of this investment at December 31, 2001, was $5,028, which
approximated  the  Company's pro rata share of Stason Biotech, Inc.'s underlying
value.  In  2002,  the  Company  transferred  all of its ownership percentage in
Stason  Biotech,  Inc.,  for  a  release  from repaying the note payable owed to
Stason.

The  Company  wrote down its investments in private companies by $25,000 in 2002
and  $5,000  in  2001,  which  is  their  estimated  net realizable value due to
deterioration  in  the  investees'  financial  condition.



4.   ACCOUNTS  RECEIVABLE  -  TRADE
     ------------------------------

In  2002  and  2001,  approximately  95%  and 99% of  net revenues of continuing
operations were derived under federal, state and local third-party reimbursement
programs.  These  revenues  are based, in part, on cost reimbursement principles
and  are  subject  to  audit  and  retroactive  adjustment  by  the  respective
third-party  fiscal  intermediaries.  In  the opinion of management, retroactive
adjustments,  if any would not be material to the financial position, results of
operations  or  cash  flows  of  the  Company.

The  Company  provides  an  allowance  for  doubtful  accounts  based  upon  its
estimation  of  uncollectible  accounts.  The  Company  bases  this  estimate on
historical  collection  experience  and  a review of the current status of trade
accounts  receivable.  The  Company  has  an  allowance  of $45,000 for doubtful
accounts  as  of  December  31,  2002.  The operations of Classic Care ceased in
January  2003,  and  the DHS informed the Company in December 2002 that Medi-CAL
was  withholding  a 100% of its payments and Classic Care's Medi-CAL license was
being  suspended.  Accordingly,  the  Company  has  fully  reserved the accounts
receivable  balance $800,967 as of December 31, 2002.  It is reasonably possible
that  the Company's estimate of the allowance for doubtful accounts will change.
Accounts  receivable attributable to Classic Care business is included in assets
of discontinued operations, and accounts receivable attributable to discontinued
operations  are  presented net of an allowance for doubtful accounts of $800,967
and  $201,360  at  December  31,  2002  and  2001,  respectively.


                                      -18-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


5.   INTANGIBLE  ASSETS
     ------------------

Intangible assets consist of the following at December 31:

                                      2002      2001
                                      -----  -----------
       Goodwill, acquisition of
        Classic Care, Inc.            $   -  $9,728,732

       Less Accumulated Amortization      -    (770,193)
                                      -----  -----------
                                      $   -  $8,958,539
                                      =====  ===========


Intangible assets consist of goodwill associated with the acquisition of Classic
Care,  Inc.  The carrying value of goodwill was reduced by $7,497,001 to reflect
the  transfer  of the long-term care services business.  The Company recorded an
impairment  charge  for  goodwill  of  $1,461,538  in  December  2002 due to the
expected  closure  of Classic Care in 2003.  Amortization expense for the period
ended  December  31,  2001,  was  $486,436.


6.   COMMON  STOCK  TRANSACTIONS
     ---------------------------

The common stock transactions during 2002 were as follows:

     -    The  Company  converted  $138,000 in 8% convertible notes payable into
          63,024,775  shares of its common stock and $13,969 of related interest
          into  7,702,352  shares  of  its  common  stock.

     -    The  Company  issued  30,000,000 shares of common stock, with a market
          value  of  $54,000,  for  consulting services provided to the Company.

     -    The  Company  converted  stock  options  issued  to  consultants  into
          54,970,000  shares  of  its common stock in a cashless conversion. The
          Company  recorded  consulting  expense  of  $199,305.

The  common  stock  transactions  during  2001  were  as  follows:

     -    The  Company  converted  $992,653  in  convertible  notes payable into
          126,680,856  shares  of  its  common stock. The Company also converted
          $33,789  in  convertible  note  interest  into 5,428,516 shares of its
          common  stock.


                                      -19-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


6.   COMMON  STOCK  TRANSACTIONS  (CONTINUED)
     ----------------------------------------

     -    The  Company  allowed  three officers of the Company to exercise their
          stock  options  for  3,000,000 shares of common stock, in lieu of cash
          payments  for  services  provided  to the Company. Additionally, these
          three  officers  converted their stock options for 6,666,666 shares of
          common  stock,  and  the  Company  recognized $389,216 in compensation
          expense.

     -    The Company issued 850,000 shares of common stock, with a market value
          of  $24,625,  for  consulting  services  provided  to  the  Company.

     -    The  Company  converted  stock  options  into 16,650,000 shares of its
          common  stock.  The  Company  received  $38,003  in  cash and recorded
          consulting  expense  of  $890,475.



7.   RELATED  PARTY  TRANSACTIONS
     ----------------------------

The  following  transactions  occurred  between  the Company and certain related
parties:

Profit  Ventures,  Inc.
-----------------------

Mr.  Joel Rubenstein is the Managing Director of Classic Care, and his spouse is
a  shareholder in the Company.  Mr. Rubenstein is also a trustee of the Shagrila
Trust,  which  is  the parent company of Profit Ventures, Inc.  In 2000, Classic
Care, entered into an agreement with Profit Ventures, Inc., to purchase products
from Classic Care.  Sales to Profit Ventures, Inc., were $201,954 and $3,341,524
for 2002 and 2001, respectively.  Sales to Profit Ventures ceased in April 2002.
The  amounts  due  from  Profit  Ventures, Inc. are included in amounts due from
related  parties  for  2001.


Joel  Rubenstein
----------------

Mr.  Rubenstein did not receive a portion of his compensation for serving as the
Managing  Director  of Classic Care.  Mr. Rubenstein has $30,000 in compensation
due  from  the  Company for his services.  The amount is included in the accrued
liabilities  as  of  December 31, 2002.  In August 2002, Mr. Rubenstein resigned
his  position  as  managing  director  of  Classic  Care,  Inc.

Mr. Rubenstein received advances from the Company totaling $26,000 and $3,500 in
2002  and 2001, respectively.  In January 2002, Mr. Rubenstein advanced $150,000
to  the Company, which was repaid by the Company.  In February 2002, the Company
advanced  to  Mr.  Rubenstein  $26,000, and the Company has received payments of
$30,500  in,  2002,  which  results  in  no  amounts  being  due  to or from Mr.
Rubenstein  as  of  December  31,  2002.

In 2001, Mr. Rubenstein repaid to the Company $43,000, and the balance of $4,500
was  included  in  Receivable  from  Related  Parties.


                                      -20-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


7.   RELATED  PARTY  TRANSACTIONS  (CONTINUED)
     -----------------------------------------

Transactions  with  Shareholders
--------------------------------

Sarit  Rubenstein

In  May  2002, the Company repaid the entire principal balance of $82,750 for an
unsecured  note  payable to Mrs. Sarit Rubenstein, a shareholder and an original
owner  of  Classic  Care.  The borrowing was due originally in October 2000, and
bears  an  interest  rate  of  6%  per annum.  The accrued interest was forgiven
pursuant  the  sale  agreement  for  the  long-term  care  services  business.

At  December  31,  2001, the Company has an unsecured note payable to Mrs. Sarit
Rubenstein,  a shareholder and an original owner of Classic Care.  The borrowing
was  due  originally in October 2000, is now due on demand and bears an interest
rate  of  6%  per  annum.  The  outstanding balance on the note is $82,750 as of
December  31,  2001.  This  amount  is  classified  as a Note Payable to Related
Party.  During  fiscal  year ended December 31, 2002 Classic Care, Inc. borrowed
an  additional  $13,000,  but  repaid  the  balance  due  in  May  2002.


Steve  Oscherowitz

Mr.  Steve  Oscherowitz,  a  shareholder  of  the  Company  who was the majority
shareholder  in  Classic  Care  prior  to  its  purchase  by the Company, has an
agreement  with  the  Company, under which he loaned funds to and borrowed funds
from the Company.  In previous years, this individual has loaned to Classic Care
Pharmacy  funds  to  meet  its  short-term  working  capital needs.  The Company
advanced  to  this  individual  $338,540  during  2002, and he has repaid to the
Company  $749,704  in  2002.  The  terms  of the borrowings allow the Company to
request  repayment on demand.  The Company had a receivable from this individual
of  $411,164 as of December 31, 2001.  The balance of the receivable account was
paid  in  full  on  June  30,  2002.

At  December  31,  2001,  the Company has an unsecured note payable to Mr. Steve
Oscherowitz, a shareholder and an original owner of Classic Care.  The borrowing
was  due  originally in October 2000, is now due on demand and bears an interest
rate  of 6% per annum.  The outstanding balance on the note of $167,250 was paid
on  June  30,  2002 through the offset of a note receivable.  As of December 31,
2002,  there  are  no  outstanding  amounts  due  to  or  from  Mr. Oscherowitz.


                                      -21-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


8.   PROPERTY  AND  EQUIPMENT
     ------------------------

Property and equipment at December 31, 2002 and 2001 consisted of the following:

<TABLE>
<CAPTION>
                                                   2002        2001
                                                ----------  ----------
<S>                                             <C>         <C>
Furniture and fixtures                          $  30,694   $  29,109
Computers and equipment                           244,866     244,866
Vehicles                                                -           -
Other depreciable assets                           32,000           -
                                                ----------  ----------
                                                  307,560     273,975

Less accumulated depreciation and amortization   (280,255)   (260,026)
                                                ----------  ----------

            Total                               $  27,305   $  13,949
                                                ==========  ==========
</TABLE>

Depreciation  and amortization expense for the years ended December 31, 2002 and
2001  was  $98,960  and  $93,521,  respectively.



9.   ACCOUNTS  PAYABLE  AND  ACCRUED  EXPENSES
     -----------------------------------------

Accounts payable and accrued expenses at December 31, 2002 and 2001 consisted of
the  following:

<TABLE>
<CAPTION>
                                                  2002      2001
                                                --------  --------
<S>                                             <C>       <C>
Accounts payable                                $ 31,634  $  6,392
Accrued professional and related fees             70,055    50,000
Accrued compensation and related payroll taxes   208,588   126,096
Accrued interest payable                         377,040   334,507
Other accrued expenses                            67,559     3,200
                                                --------  --------

     Total                                      $754,876  $520,195
                                                ========  ========
</TABLE>


10.  OTHER  RECEIVABLES
     ------------------

The Company has transferred to another pharmacy a portion of its pharmaceuticals
inventory amounting to $243,487.  Additionally, the Company returned $171,670 of
pharmaceuticals  to  its  suppliers.


                                      -22-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


11.  NOTE  PAYABLE  -  ACQUISITION
     -----------------------------

As  of  December  31,  2001,  the  Company  had  a  note  payable outstanding of
$1,074,881  as  a  result of its acquisition of Classic Care Pharmacy, Inc.  The
Company  has  a  contingent  liability  of  $6,345,00  due  to  the value of the
Company's  common stock being less than $0.42 per share.  The purchase agreement
for Classic Care stipulated that the value of the common stock issued to Classic
Care  shareholders  would  be $6,500,000.  The value of the stock at the date of
the  new  settlement agreement was $155,000.  This interest-free note is payable
on  demand,  since  the original maturity date was October 1, 2001.  The Company
negotiated  a  settlement  with  the  note  holders  in  2002  (see  Note  18).



12.  CONVERTIBLE  NOTES  PAYABLE  AND  DEBENTURES
     --------------------------------------------

10%  Convertible  Debentures
----------------------------

During  January  through  May  1997,  the  Company  issued  convertible  notes
aggregating  to  $479,655,  which are due in the same months in 2000.  The notes
have  a  stated  interest  rate  of  10%  per  annum,  and  interest  is payable
semi-annually.  The notes are convertible at $9.38 per share, which approximated
the average trading price of the Company's common stock.  $71,000 of these notes
were  still  outstanding  as of December 31, 2002 and 2001.  These notes are now
due  on  demand.  Interest  is  accrued  as  of  December  31,  2002.


8%  Convertible  Debentures
---------------------------

During 2000, the Company issued convertible notes that were due in October 2002.
The  notes  have a stated interest rate of 8% per annum, and interest is payable
quarterly  and  the  principal  balance  is  due  at  maturity.  In  2001,  the
noteholders  converted  $360,000 of the outstanding principal into the Company's
common  stock, and $390,000 of these notes were still outstanding as of December
31,  2002  and  2001.

In 2001, the Company obtained additional capital financing of $1,200,000 through
the  issuance of convertible notes payable.  The Company also issued warrants to
purchase  4,000,000  shares  of the Company's common stock to various parties as
part  of  these  financing  agreements.

Total  funds  received  of  $1,200,000  were  allocated  $1,060,000  to  the  8%
convertible notes and $140,000 to the note warrants.  The value allocated to the
note  warrants  and  the  beneficial  conversion  feature  is being amortized to
interest  expense  over  the  term  of  the  notes.

The  8% convertible debentures have a conversion price that is the lesser of (1)
80%  of the average of the three lowest closing prices out of the thirty closing
prices  prior to the closing date and (2) 80% of the lowest three closing prices
during  the  sixty  trading  days,  as  reported on the NASD OTC Bulletin Board,
immediately preceding the purchase date.  Thus, the debentures will be converted
at prices below the current market price on the conversion date.  If conversions
of the debentures occur, shareholders may be subject to an immediate dilution in
their per share net tangible book value.  The current convertible debentures may
be  converted  into  common  stock  at  any time prior to their maturity date of
October  25,  2002.


                                      -23-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


12.  CONVERTIBLE  NOTES  PAYABLE  AND  DEBENTURES  (CONTINUED)
     ---------------------------------------------------------

8%  Convertible  Debentures  (continued)
----------------------------------------

Specifically,  the  Company issued warrants which are convertible into 4,000,000
shares of common stock.  Warrants for 1,000,000 shares bear an exercise price of
$0.15,  which is based upon the lowest closing price for the five days preceding
January  10,  2001.  Warrants  for  1,500,000  shares  bear an exercise price of
$0.03,  which is based upon the lowest closing price for the five days preceding
May  9,  2001.  Warrants  for  1,500,000 shares bear an exercise price of $0.01,
which  is based upon the lowest closing price for the five days preceding August
17,  2001  The  exercise price is subject to adjustment and it has to be 110% of
the  lowest  closing price for the ten trading days preceding the exercise date,
and  the  Company  has  not  repriced  any  warrants  in  2002  or  2001;

     -    During  January 2001, the Company issued convertible notes aggregating
          to  $500,000,  which  are due in January 2003. The notes have a stated
          interest  rate  of 8% per annum, and interest is payable quarterly and
          the  principal  balance  is  due  at  maturity.  In 2002 and 2001, the
          Company  converted  $105,000  into  its  common stock, and $310,000 of
          these  notes  were  still  outstanding  as  of  December  31,  2002.

     -    During  May 2001, the Company issued a convertible note aggregating to
          $400,000,  which  is  due  in May 2002. The note has a stated interest
          rate  of  8%  per  annum,  and  interest  is payable quarterly and the
          principal  balance  is  due  at  maturity.  In  2002  and  2001,  the
          noteholders  converted  $1,350  and  $398,650,  respectively, into the
          Company's common stock. There is no outstanding balance as of December
          31,  2002.

     -    During  August 2001, the Company issued a convertible note aggregating
          to  $300,000,  which  is  due  in  August  2002. The note has a stated
          interest  rate  of 8% per annum, and interest is payable quarterly and
          the  principal  balance  is  due  at  maturity.  In 2002 and 2001, the
          noteholders  converted  $31,651  and  $149,003, respectively, into the
          Company's  common  stock,  and  $119,346  of  this  note  was  still
          outstanding  as  of  December  31,  2002.


<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


12.  CONVERTIBLE  NOTES  PAYABLE  AND  DEBENTURES  (CONTINUED)
     ---------------------------------------------------------

Convertible  debentures  consists  of  the  following  at December 31, 2002, and
December  31,  2001:

<TABLE>
<CAPTION>
                                                                             2002        2001
                                                                          ----------  -----------
<S>                                                                       <C>         <C>
8% convertible subordinated debentures, due in October 2002,
convertible into shares of common stock at any time prior to maturity.
Interest is payable quarterly, and principal is due at maturity.          $ 390,000   $  390,000

8% convertible subordinated debentures, due in January 2003, convertible
into shares of common stock at any time prior to maturity.  Interest is
payable quarterly, and principal is due at maturity.                        310,000      415,000

8% convertible subordinated debentures, due in May 2002, convertible
into shares of common stock at any time prior to maturity.  Interest is
payable quarterly, and principal is due at maturity.                              -        1,350

8% convertible subordinated debentures, due in May 2002, convertible
into shares of common stock at any time prior to maturity.  Interest is
payable quarterly, and principal is due at maturity.                        119,347      150,997

10% convertible subordinated debentures, due on demand, convertible
into shares of common stock at any time prior to maturity.  Interest is
payable semi-annually, and principal is due at maturity.                     71,000       71,000
                                                                          ----------  -----------

                                                                            890,347    1,028,347

Less:  Unamortized Discount                                                 (12,081)    (194,542)
                                                                          ----------  -----------

Total debt                                                                  878,266      833,805

Less: current portion                                                      (878,266)    (560,296)
                                                                          ----------  -----------

Convertible debentures, less current portion                              $       -   $  273,509
                                                                          ==========  ===========
</TABLE>


                                      -25-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


13.  INCOME  TAXES
     -------------

Significant  components of the provision for taxes based on income for the years
ended  December  31  are  as  follows:

<TABLE>
<CAPTION>
                                           2002    2001
                                          ------  ------
<S>                                       <C>     <C>
      Current
        Federal                           $    -  $    -
        State                              3,200   2,400
                                          ------  ------

                                           3,200   2,400
                                          ------  ------
      Deferred
        Federal                                -       -
        State                                  -       -
                                          ------  ------

           Provision for income taxes     $3,200  $2,400
                                          ======  ======
</TABLE>

A  reconciliation  of  the  provision  for  income tax expense with the expected
income  tax computed by applying the federal statutory income tax rate to income
before provision for (benefit from) income taxes for the years ended December 31
is  as  follows:

<TABLE>
<CAPTION>
                                                  2002      2001
                                                --------  --------
<S>                                             <C>       <C>
      Income tax provisions (benefit) computed
        at federal statutory rate               (35.00%)  (35.00%)

      State taxes                                (8.84%)   (8.84%)

      Increase in the valuation allowance       (43.83%)  (42.83%)
                                                --------  --------

        Total                                    (0.01%)   (0.01%)
                                                ========  ========
</TABLE>



                                      -26-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


13.  INCOME  TAXES  (CONTINUED)
     --------------------------

Significant  components of the Company's deferred tax assets and liabilities for
income  taxes  consist  of  the  following:

<TABLE>
<CAPTION>
                                        2002           2001
                                    -------------  ------------
<S>                                 <C>            <C>
Deferred tax asset
  Net operating loss carryforwards  $  8,839,956   $ 7,935,602
  Impairment of assets                 2,032,518     2,032,518
  Options/warrants                       627,898       627,898
  Discontinued operations                690,344             -
  Other                                  134,439       135,439
                                    -------------  ------------

                                      12,325,155    10,731,457
                                    -------------  ------------
Deferred tax liability
  State income taxes                  (1,451,728)   (1,129,813)
                                    -------------  ------------

  Net deferred tax asset              10,873,427     9,601,644
                                    -------------  ------------

  Valuation allowance                (10,873,427)   (9,601,644)
                                    -------------  ------------

                                    $          -   $         -
                                    =============  ============
</TABLE>

At  December  31,  2002, the Company has available approximately $22,165,383 and
$10,476,415  in  Federal and State net operating loss carryforwards available to
offset  future  federal  and  state  income  taxes, respectively, which begin to
expire  in  2021.

At  December  31,  2001, the Company has available approximately $18,523,813 and
$6,834,845  in  Federal  and State net operating loss carryforwards available to
offset  future  federal  and  state  income  taxes, respectively, which begin to
expire  in  2020.

Tax  rules  impose  limitations  on  the  use  of net operating losses following
certain  changes  in  ownership.  Such a change occurred in 1999 and 2000, which
will  limit  the  utilization  of  the net operating losses in subsequent years.


                                      -27-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


14.  COMMITMENTS  AND  CONTINGENCIES
     -------------------------------

Litigation
----------

Department  of  Health  Services

The  Company  is  a  provider  of  services  under California's Medicaid program
("Medi-Cal"),  which  is  administered  by  the  Department  of  Health Services
("DHS").  DHS served notice to the Company that the Company received overpayment
of  claims  submitted  by  the  Company  for  certain  drugs,  based  on alleged
violations  of  the  California  Code  of Regulations.  The Company has provided
documentary  evidence  to  contest  and  rebut DHS's allegations and received an
extension  to  provide evidence to the contrary.  In December 2002, DHS informed
the  Company that it was suspending Classic Care's Medi-Cal license, and that it
was  withholding  all  further  payments  until  its  investigation is complete.
Classic  Care  could not successfully operate without a Medi-Cal license.  Thus,
the  Company  has  decided  to cease operations of Classic Care.  Management has
fully  reserved  the  accounts  receivable  balance regarding these allegations.

Except  as  otherwise specifically indicated above, management believes that the
Company  does  not  have  any  material liability for any lawsuits, settlements,
judgments,  or fees of defense counsel which have not been paid or accrued as of
December  31,  2000.  However,  there  can be no assurance that the Company will
prevail  in  the above proceedings.  In addition, the Company may be required to
continue  to  defend itself resulting in substantial additional expense.  In the
event  the  Company  is  unable  to  pay  the  defense costs associated with the
foregoing,  an  unfavorable  settlement or judgment could be awarded against the
Company,  which  might  have  a  material  adverse  effect  upon  the  Company.


Leases
------

Operating  leases

The  Company leased offices located at 7348 Bellaire Avenue, North Hollywood, CA
under  a non-cancelable operating lease agreement that requires a monthly rental
payment of $2,300.  This lease expired in May 2001, and the Company consolidated
its  offices  with  the  offices  of  the  pharmacy.  The  Company  leases three
automobiles  under  non-cancelable  operating  lease agreements.  The individual
automobile  leases  range  in  terms  of  thirty-six  to  thirty-nine  months.

The  Classic Care pharmacy is located at 1429 South Robertson Blvd, Los Angeles,
CA  and  requires a monthly rental payment of $4,500.  The term of the lease was
six  (6)  years  and  expires  in  March  2003.  In  December 2002, Classic Care
Pharmacy vacated the facility.  The Company obtained a lease severance effective
December  4,  2002.  All  of  the  equipment, office equipment and furniture was
placed  into  the  warehouse/office  leased  by  the  Company.

In June of 2002, the Company leased a 7,334-square-foot building located at 8135
Clybourne  Ave,  Sun Valley, CA  91352, to serve as their corporate headquarters
and storage facility.  The lease is for a period of two years, ending June 2004,
with  monthly  lease  payments  of  $3,420.00.  The  Company  subleases  on  a
month-to-month  basis  approximately  one  half of the facility to Digital Media
Group,  Inc,  a related company that is owned by the Company's CEO and Chairman,
Steve  Westlund.


                                      -28-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


14.  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
     --------------------------------------------

Leases  (continued)
-------------------

Operating  leases  (continued)

The  Company  leased  an  automobile  under  a 39-month operating lease that was
scheduled  to  expire  in  February  2005  with  monthly  payments of $415.  The
automobile  was  returned  and  the  lease  cancelled  in  April  2003.

Future  minimum lease payments due under non-cancelable operating leases consist
of  the  following  as  of  December  31,  2002:


               2003                              $     42,701
               2004                                    20,520
               2005                                         -
                                                 ------------
               Future minimum lease payments     $     63,221
                                                 ============

Rent  expense  for  the  years  ended December 31, 2002 and 2001 was $83,585 and
$75,553  respectively.


Capital  leases

The  Company  maintains  capital  leases  for  some of its medical equipment and
certain  autos.  The  following  is a schedule by year of the approximate future
minimum  lease  payments  required  under  these  leases:


        2003                                     $ 57,848
        2004                                        8,609
        2005                                        7,344
        2006                                        2,129
                                                 ---------
        Future Minimum lease payments            $ 75,930

        Less amount representing interest          (6,068)
                                                 ---------

        Present value of minimum lease payments    69,862

        Less current portion                      (69,862)
                                                 ---------

        Long-term capital lease obligation       $      -
                                                 =========


                                      -29-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


14.  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
     --------------------------------------------

Leases  (continued)
-------------------

Capital  leases  (continued)

The  property  under  capital  leases  as  of  December  31,  2002 has a cost of
$291,574,  accumulated amortization of $213,948 and a net book value of $77,626.
Amortization  of  the  leased  property is included in depreciation expense, and
amounts  to  $58,314 and $56,460 for the years ended December 31, 2002 and 2001,
respectively.  All assets under capital leases were related to the operations of
Classic  Care  and  are  included  in  assets  of  discontinued  operations.

Due  to  impending  closure of Classic Care, Inc., all amounts due under capital
lease  have  been  reclassified  as  current.  The  Company's  management  is
negotiating  with  the  lessors  regarding  the  outstanding  amounts.


Employment  Agreements
----------------------

Chief Executive Officer Compensation

On  April  1,  2000, Mr. Westlund signed a three-year employment agreement.  The
contract calls for Mr. Westlund to be paid a base salary of $8,333 per month for
the  first year of the term.  Mr. Westlund's base salary was to increase 15% per
year  for  each  of  the  second  and  third  years  per  this  agreement.

Although  Mr.  Westlund's  employment  agreement states that his salary is to be
$8,333  per  month,  his  actual pay has been $4,000 per month.  Mr. Westlund is
entitled  to  be  paid the balance of his monthly compensation in either cash or
equity.  Additionally, Mr. Westlund has been granted an option to purchase up to
6,000,000  shares of Kaire common stock over the next 5 years at an option price
of  $0.05  per  share.  To  date, Mr. Westlund has exercised options to purchase
5,966,666  shares  of  common  stock.

The  CEO also receives a commission of 3% of the merger price for any mergers or
acquisitions completed by the Company during the term of the agreement.

The  Company  has  accrued amounts due under the above compensation agreement of
$197,541  as  of  December  31,  2002.


                                      -30-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


14.  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
     --------------------------------------------

Employment  Agreements  (continued)
-----------------------------------

Chief  Financial  Officer  Compensation

On  April  1,  2000,  Mr.  Naccarato signed a three-year service agreement.  The
contract  calls for Mr. Naccarato to be paid $7,250 per month for the first year
of the term.  Mr. Naccarato's base compensation was to increase 15% per year for
each  of  the  second  and  third  years  per  this  agreement.

Although Mr. Naccarato's service agreement states that his compensation is to be
$7,250  per  month,  his  actual  remuneration  has  been $4,000 per month.  Mr.
Naccarato  is  entitled  to  be  paid the balance of his monthly compensation in
either  cash  or equity.  Additionally, Mr. Naccarato has been granted an option
to  purchase  up to 4,500,000 shares of Kaire common stock over the next 5 years
at  an  option  price  of $0.05 per share.  To date, Mr. Naccarato has exercised
options  to  purchase  3,500,000  shares  of  common  stock.

Mr. Naccarato resigned from his duties as Chief Financial Officer as of December
31,  2001.  He  is  still the general counsel for the Company and provides other
financial  consulting  services.


President's  Compensation

On  April  1,  2000,  Mr.  Baum  signed  a three-year employment agreement.  The
contract calls for Mr. Baum to be paid a base salary of $6,250 per month for the
first year of the term.  Mr. Baum's base salary was to increase 15% per year for
each  of  the  second  and  third  years  per  this  agreement.

Although  Mr. Baum's employment agreement states that his salary is to be $6,250
per month, his actual pay has been $4,000 per month.  Mr. Baum is entitled to be
paid  the  balance  of  his  monthly  compensation  in  either  cash  or equity.
Additionally,  Mr.  Baum  has been granted an option to purchase up to 4,500,000
shares  of  Kaire common stock over the next 5 years at an option price of $0.05
per share.  To date, Mr. Baum has exercised options to purchase 3,500,000 shares
of  common  stock.

The President of the Company resigned effective December 31, 2001.  There are no
amounts  due  to  Mr.  Baum  as  of  December  31,  2002.


Consulting  Agreements
----------------------

The  Company  has various consulting agreements that provide for issuance of the
Company's  common stock and/or stock options/stock purchase warrants in exchange
for  services rendered by the consultants.  These agreements relate primarily to
raising  of  capital  and  professional services rendered in connection with the
Company's  acquisition  efforts.


                                      -31-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


15.  STOCK  OPTIONS  AND  WARRANTS
     -----------------------------

The  Company  has  adopted  the  provisions  of Financial Interpretation No. 44.
Accordingly,  the Company applies APB Opinion No. 25 and related interpretations
in  accounting  for  its  plans  for  employees.  If  the Company had elected to
recognize  compensation  expense based upon the fair value at the grant date for
awards  under  this  plan consistent with the methodology prescribed by SFAS No.
123, the Company's net loss and loss per share would be reduced to the pro forma
amounts  indicated  below  for  the  years  ended  December  31:


                                                  2002          2001
                                              ------------  ------------
     Net loss
     As reported                              $(3,587,811)  $(2,401,210)
     Pro forma                                $(3,587,811)  $(2,401,210)
     Basic and diluted loss per common share
     As reported                              $    (0.006)  $    (0.028)
     Pro forma                                $    (0.004)  $     0.007


Options  are  granted  at prices that are equal to the current fair value of the
Company's  common  stock at the date of grant.  The Company records compensation
expense  on  options granted at prices below the current fair market value.  The
vesting  period  is  usually  related  to the length of employment or consulting
contract  period.  In 2001, all stock options granted were converted into common
stock,  and the Company recorded the appropriate amount as compensation expense.

The  fair value of these options and warrants was estimated at the date of grant
using the Black-Scholes option-pricing model with the following weighted-average
assumptions  for  the  years  ended  December  31,  2001;  dividend yield of 0%;
expected volatility of 400%; risk-free interest rate of 6.45%; and expected life
of  5  years.  There  were  no  options  or  warrants  granted  in  2002.

The Black-Scholes option valuation model was developed for use in estimating the
fair  value  of traded options, which have no vesting restrictions and are fully
transferable.  In  addition, option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have  characteristics  significantly
different  from  those  of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models  do  not  necessarily  provide a reliable single
measure of the fair value of its stock options.  The weighted-average fair value
of  options and warrants granted during the year ended December 31, 2001, ranged
from  $0.01  to  $0.15.


                                      -32-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


15.  STOCK  OPTIONS  AND  WARRANTS  (CONTINUED)
     ------------------------------------------

The  following  table  summarizes  information  with  respect  to  stock options
outstanding  and  exercisable  at  December  31,  2002:

<TABLE>
<CAPTION>
                   Options Outstanding          Options Exercisable
          -----------------------------------  -------------------------
            Number      Weighted
          Outstanding    Average    Weighted       Number      Weighted
Range of     as of      Remaining    Average   Exercisable as   Average
Exercise   December    Contractual  Exercise    of December    Exercise
Prices     31, 2002       Life        Price       31, 2002       Price
--------  -----------  -----------  ---------  --------------  ---------
<S>       <C>          <C>          <C>        <C>             <C>

0.05        2,033,333         2.46  $    0.05       2,033,333  $    0.05
          ===========  ===========  =========  ==============  =========
</TABLE>


<TABLE>
<CAPTION>
                  Warrants Outstanding           Warrants Exercisable
          -----------------------------------  -------------------------
            Number      Weighted
          Outstanding    Average    Weighted       Number      Weighted
Range of     as of      Remaining    Average   Exercisable as   Average
Exercise   December    Contractual  Exercise    of December    Exercise
Prices     31, 2002       Life        Price       31, 2002       Price
--------  -----------  -----------  ---------  --------------  ---------
<S>       <C>          <C>          <C>        <C>             <C>

0.01        1,500,000         1.67  $    0.01       1,500,000  $    0.01

0.03        1,500,000         1.42       0.03       1,500,000       0.03

0.15        2,500,000         0.91  $    0.15       2,500,000  $    0.15
          -----------  -----------  ---------  --------------  ---------
            5,500,000         1.26  $    0.08       5,500,000  $    0.08
          ===========  ===========  =========  ==============  =========
</TABLE>



                                      -33-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


15.  STOCK OPTIONS AND WARRANTS (CONTINUED)
     --------------------------------------

The  following  table  summarizes  information  with  respect  to  stock options
outstanding  and  exercisable  at  December  31,  2001:

<TABLE>
<CAPTION>
                   Options Outstanding          Options Exercisable
          -----------------------------------  ---------------------------
            Number      Weighted
          Outstanding    Average    Weighted       Number        Weighted
Range of     as of      Remaining    Average   Exercisable as    Average
Exercise   December    Contractual  Exercise     of December     Exercise
Prices     31, 2001       Life        Price       31, 2001        Price
--------  -----------  -----------  ---------  ---------------  ----------
<S>       <C>          <C>          <C>        <C>              <C>

0.05        2,033,333        3.46  $     0.05        2,033,333  $    0.05

0.15            6,667        0.08  $     0.15            6,667  $    0.15
          -----------  ----------  ----------  ---------------  ----------
            2,040,000        3.45  $     0.06        2,040,000  $    0.06
          ===========  ==========  ==========  ===============  ==========
</TABLE>


<TABLE>
<CAPTION>
                  Warrants Outstanding           Warrants Exercisable
          -----------------------------------  -------------------------
            Number      Weighted
          Outstanding    Average    Weighted       Number      Weighted
Range of     as of      Remaining    Average   Exercisable as   Average
Exercise   December    Contractual  Exercise    of December    Exercise
Prices     31, 2001       Life        Price       31, 2001       Price
--------  -----------  -----------  ---------  --------------  ---------
<S>       <C>          <C>          <C>        <C>             <C>

0.01        1,500,000         2.67  $    0.05       1,500,000  $    0.01

0.03        1,500,000         2.42  $    0.03       1,500,000  $    0.03

0.15        2,500,000         1.91  $    0.15       2,500,000  $    0.15
          -----------  -----------  ---------  --------------  ---------
            5,500,000         2.26  $    0.08       5,500,000  $    0.08
          ===========  ===========  =========  ==============  =========
</TABLE>


                                      -34-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


15.  STOCK OPTIONS AND WARRANTS (CONTINUED)
     --------------------------------------

Stock  Options  and  Warrants  (continued)
------------------------------------------

The following summarizes the Company's stock option and warrants activity:


<TABLE>
<CAPTION>
                                         Warrants     Weighted
                                           And         Average
                                      Stock Options   Exercise
                                       Outstanding      Price
                                      --------------  ---------
<S>                                   <C>             <C>
       Outstanding December 31, 2000     13,456,667   $    0.04

       Granted                           20,650,000   $    0.04
       Exercised                        (26,316,667)  $    0.04
       Expired/Cancelled                   (250,000)  $   45.00
                                      --------------  ---------
       Outstanding December 31, 2001      7,540,000   $    0.05

       Granted                                    -   $       -
       Exercised                                  -   $       -
       Expired/Cancelled                     (6,667)  $    0.15
                                      --------------  ---------
       Outstanding December 31, 2002      7,533,333   $    0.05
                                      ==============  =========
</TABLE>

The Company has 5,500,000 warrants outstanding as of December 31, 2002 and 2001.
The  exercise  prices  for the warrants range from $0.01 to $0.15.  During 2001,
the  Company issued warrants to purchase 4,000,000 shares of its common stock at
an  exercise  price  of  $0.01  to  $0.15.

Certain  warrants  (convertible  into  4,000,000  shares of common stock) have a
clause  that  causes the exercise price to be adjusted down, based on the quoted
share  price for the preceding 10 days measured on the exercise date.  The price
is  110% of the average quoted market price.  The warrants expire 3-5 years from
the date of grant.  The Company has not repriced any warrants as of December 31,
2002.


16.  EARNINGS  PER  SHARE
     --------------------

Earnings  per  share  have  been calculated using the weighted average number of
shares  outstanding  during  each  period.  Earnings per share-dilutive does not
include  the  effect  of  potentially  dilutive  securities  for the years ended
December  31,  2002 and 2001 respectively.  The loss from operations and the net
loss  for  the  years  ended  December  31,  2002 and 2001 make these securities
anti-dilutive.


                                      -35-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


17.  DISCONTINUED  OPERATIONS
     ------------------------

In  December  2002, the Company decided to discontinue operations at its Classic
Care  subsidiary,  a  pharmacy,  and  conduct a voluntary dissolution of Classic
Care.  In May 2002, the Company transferred its long-term care services business
to  the  original  shareholders  of Classic Care.  The expected disposal date of
Classic Care is May 2003.  Classic Care's sales for the years ended December 31,
2002,  and December 31, 2001, were $7,433,090 and $10,769,719, respectively.  In
conjunction  with  the  discontinuance  of  operations,  the  Company recorded a
provision  for  disposition  of  $208,497  (net of income tax benefit of $0) for
costs  estimated  to  be  incurred  prior  to disposition.  The Company does not
anticipate  significant operating loss during the phase-out period.  The results
of  Classic  Care's  operations  have  been  reported separately as discontinued
operations in the Statements of Operations.  Prior year financial statements for
2001  have  been  restated  to  present  the  operations  of  the  division as a
discontinued  operation.

Inventories  consist  of  pharmaceuticals,  medical  supplies  and  equipment of
$115,550  and  $728,410  for  the  years  ended  December  31,  2002  and  2001,
respectively.  The  Company  regularly  checks  its inventory for any expired or
obsolete  pharmaceuticals.  The Company recognized a loss of $112,550 due to the
write-down  to  disposal  value  of  the  inventory.  Inventory  attributable to
Classic  Care  business  is  included  in  assets  of  discontinued  operations

The  net  assets (liabilities) of the discontinued operations have been recorded
at  their  estimated  net  realizable  value  under  the  caption  "Net  assets
(liabilities)  of discontinued operations" in the accompanying Balance Sheets at
December  31,  2002,  and  December  31,  2001,  and  consist  of the following:

<TABLE>
<CAPTION>
                                                        2002         2001
                                                     ----------  ------------
<S>                                                  <C>         <C>
Accounts receivable                                  $       -   $   969,127
Inventories                                              3,000       728,410
Property and equipment, net                              1,553       187,003
Other assets                                                 -       416,593
                                                     ----------  ------------
 Total assets                                            4,553     2,301,133
                                                     ----------  ------------

Accounts payable                                      (674,240)   (1,123,569)
Accrued liabilities                                    (13,766)      (21,673)
Capital leases                                         (69,862)     (136,291)
Notes payable - related parties                              -      (250,000)
                                                     ----------  ------------
Total liabilities                                     (757,868)   (1,531,533)
                                                     ----------  ------------
Net assets (liabilities) of discontinued operations  $(753,315)  $   769,600
                                                     ==========  ============
</TABLE>


Impairment  Write-Down  Recognized  as  a  Result of Strategic Review of Certain
--------------------------------------------------------------------------------
Operations
----------

In  2002,  during  the  course of the Company's strategic review of its pharmacy
operations  conducted  through  Classic  Care,  the  Company recorded a pre- and
post-tax  charge  of  $1,461,538 relating to the impairment of goodwill, when it
was  determined  that  future  undiscounted  cash  flows associated Classic Care
operations  were  insufficient to recover their carrying value.  The Company has
ceased  all  operations  in  Classic  Care  effective  January  2003.


                                      -36-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


18.  CLASSIC  CARE  PHARMACY,  INC.
     ------------------------------

Impairment  Write-Down  Recognized  as  a  Result of Strategic Review of Certain
--------------------------------------------------------------------------------
Operations  (continued)
-----------------------

In  May  of  2000, the Company acquired Los Angeles-based Classic Care pharmacy.
Classic  Care  Pharmacy provides specialized prescription medication services to
seniors  living  in  extended care facilities in Southern California.  Under the
merger  agreement,  the  Company  paid  $1,000,000 in cash and issued 15,500,000
shares  of  common  stock  to  acquire  all the outstanding common stock (10,000
shares) of Classic Care Pharmacy.  This agreement required that additional stock
be  issued  if the price of the trading price of the stock on the OTCBB was less
than  $0.50  per  share  on  October  31,  2000.

This  agreement  was  amended  on  December  6,  2000 to include additional cash
payments  of  $2,000,000  and to defer the determination date for any additional
shares  to be issued under the merger agreement to October 31, 2001.  The target
price  of  the  acquisition was set at $9,500,000 and the value of public market
valuation  of  the  15,500,000 shares was required to be $6,500,000 or $0.42 per
share  on  or  before  that  date  to  meet  the  target  price  of  $9,500,000.

During  2001,  the Company renegotiated with the original owners of Classic Care
for  amounts  due  them  under  the  original  purchase agreement (as amended on
December 6, 2000) of their interests in Classic Care.  The original Classic Care
shareholders  negotiated  a  settlement  with  the  Company due to the Company's
common  stock  not  having  achieved  specified  levels ($0.42 per share) during
designated  periods  subsequent to the acquisition.  The revised settlement with
the  original  Classic  Care  owners  resulted  in  the  Company  increasing its
liability  to  the original Classic Care Shareholders by $6,345,000 and reducing
additional  paid-in  capital  by  an  equivalent  amount.

On  November  1,  2001,  Kaire  Holdings  entered  into a new agreement with the
original owners of Classic Care, which received shareholder approval in February
2002, whereby Kaire will assign approximately fifty-four percent (54%) ownership
of  the  Classic  Care  Pharmacy  ("CC")  back  to the original owners of the CC
pharmacy,  with  Kaire  retaining  approximately  35%  of  the equity in CC.  In
consideration  of  the  assignment,  all amounts due the CC prior owners will be
deemed  satisfied  with  the  exception  of  a one-year 4% convertible note (the
"Note")  in  the  amount  of USD $2,000,000 that the original CC owners agree to
hold.  This note is secured by the 2,000,000 shares of Classic Care common stock
held  by  Kaire.  The  note  will  mature one year from the date of the spin-off
("Maturity  Date"),  and  if  not  paid  when due, Kaire will have the option to
return  2,000,000  of  its  shares  of  Classic Care to the note holders in full
settlement  of the principal and interest related to the note.  Kaire intends to
dividend  to  Kaire  shareholders  approximately  49%  of  its  position  in CC.

Pursuant  to  this  agreement,  the  Company  has increased the note payable and
amounts  due to the original Classic Care shareholders by $6,345,000 and reduced
additional  paid-in capital by an equivalent amount due to the resolution of the
contingency  involved  with  the  original  purchase.


                                      -37-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


18.  CLASSIC  CARE  PHARMACY,  INC.  (CONTINUED)
     -------------------------------------------

Impairment  Write-Down  Recognized  as  a  Result of Strategic Review of Certain
--------------------------------------------------------------------------------
Operations  (continued)
-----------------------

In  2001,  goodwill  was  amortized  on  a  straight-line  basis  over 20 years.
Amortization expense as of December 31, 2001 amounted to $486,436.  In 2002, the
amount  of  goodwill  was adjusted to account for the transfer of Classic Care's
long-term services business and the subsequent closure of Classic Care operation
in  2003.

In December 2002, the Company decided to voluntarily dissolve Classic Care, Inc.
dba Classic Care Pharmacy as a result of sanctions by the pharmacy management of
the  Department of Health Services and the subsequent suspension of the Medi-Cal
license.



19.  SUBSEQUENT  EVENTS
     ------------------

Purchase  of  Assets  of  Sespe  Pharmacy
-----------------------------------------

Effective  January 26, 2003, the Company concluded its agreement to purchase all
the  tangible and intangible assets of Sespe Pharmacy, a privately held company,
for a total cost of $181,000.  The Company had opened escrow in 2002, and made a
deposit  of  $40,000.  The  agreed  purchase price consists of (i)) a short-term
promissory  note  in  the  amount of $81,000 due 120 days after, and (ii) a cash
payment  of  $100,000.


New  Operating  Lease  Agreement
--------------------------------

In  January  2003,  the  Company entered into an operating lease agreement for a
pharmacy  in  Fillmore,  California.  The pharmacy facility is approximately 835
square  feet.  Payments  under  the  lease  will  be  $1,170 per month, and will
commence  on  January 26, 2003, and will continue through the initial lease term
of  five  years.  The  Company  has options to renew the lease for two five-year
periods  and  to purchase the facility at its estimated fair market value at any
time  during  the  lease  term.


Acquisition  of  Entremetrix,  Inc.
-----------------------------------

In  March  2003, the Company through its subsidiary completed the acquisition of
all  the  outstanding  common shares of Entremetrix, Inc., a Nevada corporation,
for  $2,750,000.  The  agreed  purchase  price consists of (i)) a 4% convertible
promissory  note in the amount of $2.5 million due four years after closing (and
payable  in cash or in the Company's common stock at the option of the sellers),
and (ii) the issuance of 250,000,000 shares of the Company's common stock having
a  market  value  of  approximately  $250,000.


                                      -38-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


19.  SUBSEQUENT  EVENTS  (CONTINUED)
     -------------------------------

Acquisition  of  Entremetrix,  Inc.  (continued)
------------------------------------------------

Entremetrix  is  a Southern California-based company, and is a national provider
of  administrative  employer  and financial support services to small businesses
primarily  operating  in  the  medical,  life  sciences  and  high-technology
industries.  Additionally,  Entremetrix  provides outsources human resources and
financial  support  staff.  The  acquisition  will  be  accounted  for under the
purchase  method, whereby the purchase price will be allocated to the underlying
assets  and  liabilities  based  on  their estimated fair values.  The resulting
goodwill  from  this  transaction  is  currently  estimated  at $2,300,000.  The
goodwill  estimate  is preliminary, pending the results of an audit, and further
financial analysis.  For the year ended December 31, 2002, Entremetrix had sales
of  approximately  $1,800,000 (unaudited) and net loss of approximately $112,000
(unaudited).


Conversion  of  Debentures  into  Common  Stock
-----------------------------------------------

On February 7, 2003, a holder of the Company's 8% convertible debentures elected
to convert an aggregate of $1,776 principal amount of the debentures and $324 of
related  interest  into  3,000,000 shares of the Company's common stock on March
21,  2003.


Issuance  of  Common  Stock  for  Services
------------------------------------------

During  the period starting January 1, 2003 to April 4, 2003, the Company issued
57,746,665  shares  of  its  common stock to various consultants in lieu of cash
payments  for  services  rendered.  The aggregate value of services was $86,620.


Amendment  to  Certificate  of  Incorporation  to  Decrease Number of Authorized
--------------------------------------------------------------------------------
Shares
------

On  March  28, 2003, the Company obtained a written consent of a majority of its
shareholders  to  amend  the  Certificate  of  Incorporation  to  effect up to a
one-for-200 reverse split of common stock.  The exchange ratio is subject to the
approval of the Board of Directors.  The exchange ratio may range from one newly
issued common share for each two outstanding shares of common stock to one newly
issued  share  for  each two hundred shares of common stock.  The Amendment will
have  no  effect  on  the  par  value  of the common stock, which will remain at
$0.001.


                                      -39-
<PAGE>
                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


19.  SUBSEQUENT  EVENTS  (CONTINUED)
     -------------------------------

2003  Consulting  and  Legal  Services  Plan
--------------------------------------------

In  March  2003,  the  Board of Directors approved the 2003 Consulting and Legal
Services  Plan.  The  purpose  of  the  2003  Consulting and Legal Services Plan
("Plan")  is  to  provide  the Company with a means of compensating selected key
consultants  and legal service providers to the Company and its subsidiaries for
their  services  rendered  with shares of Common Stock of the Company.  The Plan
will  be  administered  by  the Company's Board of Directors (the "Board").  The
Company's  Board  shall  (a) select those consultants legal service providers to
whom  shares  of  the  Company's  Common Stock shall be awarded or sold, and (b)
determine the number of shares to be awarded or sold; the time or times at which
shares  shall  be awarded or sold; whether the shares to be awarded or sold will
be  registered with the Securities and Exchange Commission; and such conditions,
rights  of repurchase, rights of first refusal or other transfer restrictions as
the Board may determine.  Each award or sale of shares under the Plan may or may
not  be  evidenced by a written agreement between the Company and the persons to
whom  shares  of  the  Company's Common Stock are awarded or sold.  From time to
time, the Board may make such changes in or additions to the Plan as it may deem
proper and in the best interests of the Company and its Stockholders.  The Board
may  also  suspend or terminate the Plan at any time, without notice, and in its
sole  discretion.

For  purposes of the Plan, the Board of Directors is authorized to sell or award
up  to  140,000,000 shares and/or options of the Company's Common Stock.  $0.001
par  value  per  share  ("Common  Stock").

All key consultants and qualified legal service providers to the Company and any
of  its  subsidiaries  are  eligible  to  participate  in  the  Plan.

The  Board  approved  the  issuance of 140,000,000 shares to various consultants
under  the  terms  of  the  Plan.


                                      -40-
<PAGE>