<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20049
         --------------------------------------------------------------
                                   FORM 10-QSB
         --------------------------------------------------------------
                                   (Mark One)
                                       (X)

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

                  For the QUARTERLY PERIOD ENDED MARCH 31, 2003

                          Commission File No. 001-15179

          -------------------------------------------------------------
                                H-QUOTIENT, INC.
             (Exact name of registrant as specified in its charter)
         --------------------------------------------------------------

                               Virginia 54-1947753
                  (State or other jurisdiction (I.R.S. Employer
            of Incorporation or organization) Identification Number)

                       8150 Leesburg Pike, Suite 503 22182
                              Vienna, VA (Zip Code)
                    (Address of principal executive offices)

          Issuer's telephone number, including area code: 703-752-0690

         Securities registered under Section 12(b) of the Exchange Act:

   Title of each class                             Name of each Exchange on
  ----------------------                               which registered
         None                                        -------------------
                                                      OTC Bulletin Board


Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the last practicable date: 29,691,613 of its $.0001 par value
common stock as of April 30, 2003.

Transitional small business disclosure format (check one)  Yes:        No: X




<PAGE>


                        H-QUOTIENT, INC., AND SUBSIDIARY
                FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 2003

                                      INDEX




PART I:   FINANCIAL INFORMATION                                           Page

Item 1:  Financial Statements

Consolidated Balance Sheets as of
March 31, 2003 and December 31, 2002                                        3

Consolidated Statements of Operations
For the three-month periods ended
March 31, 2003 and 2002                                                     4

Condensed Consolidated Statements of Cash Flows for the
three month periods ended March 31, 2003 and 2002                           5

Notes to the Consolidated Financial Statements                              6

Item 2:  Management's Discussion and Analysis or Plan of Operation          7

Item 3:  Controls and Procedures                                            7

PART II: OTHER INFORMATION                                                  8

Item 1: Legal Proceedings                                                   8

Item 2:        Changes in Securities                                        8


                                      F-2
<PAGE>



H-Quotient, Inc. and Subsidiary
Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                                         December 31,
                                                                                      March 31, 2003         2002
                                                                                        (Unaudited)        (Audited)
------------------------------------------------------------------------------------- ---------------- -----------------
<S>                                                                                    <C>             <C>
Assets

Current assets
     Cash                                                                              $        1,441  $         11,503
     Investment in marketable securities                                                      648,720           486,540
       Accounts receivable, less allowance for doubtful accounts of $509,037                2,810,342         2,157,688
       Note receivable                                                                        139,869           139,869
     Prepaid expenses                                                                       2,669,000         2,629,000
------------------------------------------------------------------------------------- ---------------- -----------------

Total current assets                                                                        6,269,372         5,424,600

Property and equipment, net                                                                    39,040            51,024

Capitalized software, net                                                                     335,244            82,171

Investment                                                                                  2,213,138         2,213,138

Other Assets                                                                                   14,878            14,878
------------------------------------------------------------------------------------- ---------------- -----------------
                                                                                            2,602,300         2,361,211
Total Other assets

Total assets                                                                          $     8,871,672  $      7,785,811
------------------------------------------------------------------------------------- ---------------- -----------------

Liabilities and Shareholders' Equity

Current liabilities
     Accounts payable and accrued expenses                                                    256,836  $        361,872
     Notes payable                                                                             62,475            62,475
     Unearned revenue                                                                          35,347               990
------------------------------------------------------------------------------------- ---------------- -----------------

Total current liabilities                                                                     354,658           425,337
------------------------------------------------------------------------------------- ---------------- -----------------

Shareholders' equity
     Preferred stock, 10,000,000 shares authorized,
       100 shares issued and outstanding                                                            -                 -
     Common stock, $.0001 par value, 90,000,000 shares authorized, 29,691,613  and
     28,588,454 shares issued and outstanding at March 31, 2003 and December 31, 2002,
       respectively                                                                             2,969             2,859
     Additional paid-in capital                                                            15,123,793        14,841,065
       Subscription receivable                                                               (52,385)          (52,385)
     Accumulated deficit                                                                  (6,651,284)       (7,431,065)
------------------------------------------------------------------------------------- ---------------- -----------------

Total shareholders' equity                                                                  8,423,093         7,360,474
------------------------------------------------------------------------------------- ---------------- -----------------

Total liabilities and shareholders' equity                                            $     8,871,672  $      7,785,811
------------------------------------------------------------------------------------- ---------------- -----------------
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       F-3

<PAGE>



<TABLE>
<CAPTION>

H-Quotient, Inc. and Subsidiary
Consolidated Statements of Operations (Unaudited)

Three Months Ended March 31                                                                2003              2002

<S>                                                                                   <C>              <C>
Revenues                                                                              $       754,667  $        228,516
------------------------------------------------------------------------------------- ---------------- -----------------

Operating expenses                                                                            134,930            35,523
------------------------------------------------------------------------------------- ---------------- -----------------

Income from operations                                                                        619,737           192,993
------------------------------------------------------------------------------------- ---------------- -----------------

Other income (expenses)
     Interest expense                                                                         (2,136)           (3,836)
     Unrealized gain on securities                                                            162,180                 -
     Realized gain on sale of securities                                                                         72,997
     Interest income                                                                                -            10,500

Total other income (expense)                                                                  160,044            79,661
------------------------------------------------------------------------------------- ---------------- -----------------

Income before provision for income taxes                                                      779,781           272,654

Provision for income taxes                                                                          -                 -
------------------------------------------------------------------------------------- ---------------- -----------------



Net income                                                                            $       779,781  $        272,654
------------------------------------------------------------------------------------- ---------------- -----------------

Net income per common share
     Basic:                                                                           $          0.03  $           0.01

     Diluted:                                                                         $          0.03  $           0.01

Weighted average common shares
Basic                                                                                      28,891,138        25,670,455
------------------------------------------------------------------------------------- ---------------- -----------------
Diluted                                                                                    30,297,038        25,982,650


 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

</TABLE>
                                       F-4


<PAGE>

H-Quotient, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2003
<TABLE>
<CAPTION>


                                                                                           2003              2002
Three Months Ended March 31                                                             (Unaudited)      (Unaudited)
------------------------------------------------------------------------------------- ---------------- -----------------
<S>                                                                                       <C>               <C>
Net cash provided (used) in operating activities                                          $  (10,062)       $  (70,139)
------------------------------------------------------------------------------------- ---------------- -----------------

Net cash provided in investing activities                                                           -            69,264
------------------------------------------------------------------------------------- ---------------- -----------------

------------------------------------------------------------------------------------- ---------------- -----------------
Net cash (used) by financing activities                                                                               -
------------------------------------------------------------------------------------- ---------------- -----------------

Net (decrease) in cash                                                                       (10,062)             (875)

Cash at beginning of period                                                                    11,503             6,491
------------------------------------------------------------------------------------- ---------------- -----------------


Cash at end of period                                                                     $     1,441  $   5,616
------------------------------------------------------------------------------------- ---------------- -----------------

 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

</TABLE>
                                      F-5
<PAGE>

H-Quotient, Inc., and Subsidiary
Notes to the Unaudited Condensed Consolidated Financial Statements

1. Organization - H-Quotient, Inc. (the "Company"), was incorporated in the
Commonwealth of Virginia on May 12, 1999 as a wholly-owned subsidiary of
Integrated Healthcare Systems, Inc. ("IHS"). On June 14, 1999, IHS executed a
downstream merger with H-Quotient, Inc. in which all the issued and outstanding
shares of common stock of IHS were exchanged for an equal number of shares of
the $.0001 par value common stock of the Company. The Company develops, markets,
installs and maintains integrated hardware and software systems to private and
public healthcare facilities throughout the United States.

2. Basis of Presentation - The consolidated financial statements of the Company
include the accounts of its wholly owned subsidiary, Quotient Capital
Corporation. All significant inter-company balances and transactions have been
eliminated in consolidation.

The Consolidated Balance Sheets as of March 31, 2003 and 2002, the Consolidated
Statement of Operations for the three-month periods ended March 31, 2003 and
2002, and the Consolidated Statement of Cash Flows for the three-month periods
ended March 31, 2003 and 2002, have been prepared without audit. In the opinion
of management, all adjustments necessary to present fairly the financial
position as of March 31, 2003 and 2002, and results of operations and cash flows
for the three month period ended March 31, 2003 and 2002, and for all periods
then ended, have been recorded. All adjustments recorded were of a normal
recurring nature.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these consolidated
financial statements be read in conjunction with the financial statements and
notes thereto for the year ended December 31, 2002, included in the Company's
Annual Report on Form 10KSB for the year ended December 31, 2002.

The results of operations for the three-month period ended March 31, 2003, are
not necessarily indicative of results anticipated for the full year.


                                      F-6
<PAGE>


Item 2: Management's Discussion or Plan of Operation

Results of Operations

Three Months Ended March 31, 2003, Compared with Three Months Ended March 31,
2002:

Revenues for the three months ended March 31, 2003, increased to $754,667
compared to $228,516 for the three months ended March 31, 2002. The increase of
$526,151 is a result of increased sales. Including other income, revenues for
the three months ended March 31, 2003, increased to $914,711 compared to
$308,177 for the three months ended March 31, 2002.

Expenses

Interest expense for the three months ended March 31, 2003, was $2,136 compared
to $3,836 for the three months ended March 31, 2002. The negligible difference
is attributed to the continuity of the notes payable.

The unrealized gain on securities for the three months ended March 31, 2003, was
$162,180 as compared to $-0- for the three months ended March 31, 2002. The
difference resulted from an increase in the market value of our holdings in
Veridien Corp. stock.

Realized gains on the sale of securities were $0 for the three months ended
March 31, 2003, compared to $72,997 for the three months ended March 31, 2002.
No securities were sold in the 2003 period.

Net profit for the three months ended March 31, 2003, was $779,781 or $.03 per
share compared to $272,654 or $.01 per share for the three months ended March
31, 2002.

Liquidity and Capital Resources

We funded our operations and working capital needs through profits, payments
received from customers, and the exercise of warrants.

Working capital at March 31, 2003, was $5,914,714 as compared to $5,483,504 at
March 31, 2002. The improvement of $431,210 resulted from operations.

Cash and cash equivalents at March 31, 2003, were $1,441 as compared to $5,616
on March 31, 2002. The company maintains its liquid assets in securities.

During the quarter ended March 31, 2003, we generated $-0- from investing
activities as compared to $69,264 for the quarter ended March 31, 2002. No
securities were sold during the period.

During the quarter ended March 31, 2003, we used net cash of $-0- from financing
activities as compared to $-0- for the quarter ended March 31, 2002.

During the quarter ended March 31, 2003, we issued stock with a value of
$282,728 for software development activities that represent non-cash investing
and financing activities. There were no such activities in the quarter ended
March 31, 2002.

Item 3:  Controls and Procedures

     (a)  Evaluation of disclosure controls and procedures. See certification
          pursuant to Sarbanes-Oxley Act of 2002 attached.
     (b)  Changes in internal controls.
          None.
     (c)  Asset-Backed Issuers.
          Not Applicable.

                                      F-7
<PAGE>

PART II:  OTHER INFORMATION

Item 1:      Legal Proceedings

A suit with a previous customer is ongoing, and a $340,000 reserve has been
allocated. However, the Company expects to recover this sum and all other
amounts due from the customer.

Other suits arising in the ordinary course of business are pending against the
Company. Management believes the ultimate outcome of these actions will not
result in a material adverse effect on its consolidated financial position,
results of operations or cash flows.



Item 2:      Changes in Securities

In January, 2003, warrants were exercised for 342,796 shares of common stock
that are subject to restrictions under Rule 144 of the Securities Act of 1933 in
exchange for $78,559 in cash.

In the three month period ended March 31, 2003, the Company issued 211,011
shares of its common stock to shareholders of record as of July 31, 2000 and
August 31, 2000, respectively, who submitted proof of ownership of the Company's
common stock as of those dates in accordance with the terms and conditions
announced on July 12, 2000 and July 31, 2000 in a stock distribution program.

In the three month period ended March 31, 2003, the Company issued 1,047,142
shares of its common stock subject to restrictions under Rule 144 of the
Securities Act of 1933 in exchange for $282,728 of LabQuotient development. The
price was based upon the market price of the stock at the date of the
transaction.

In January 2003, the Company issued 600,000 options pursuant to the acquisition
of IntelliServices, Inc., exercisable at 50,000 per month until December 31,
2003, for $738,000. In February 2003, the Company issued 2,613,461 options
subject to restrictions under Rule 144 of the Securities Act of 1933 pursuant to
the acquisition of IntelliServices, Inc., exercisable until December 31, 2005,
for $3,214,557. The option price of the stock is $1.23 per share, which is
significantly above the market value of the stock. The Company expects to close
the acquisition in the second quarter.

In March 2003, the Company issued 1,200,000 warrants exercisable until December
31, 2003, as follows: $360,000 in cash for common stock in exchange for
1,200,000 shares of H-Quotient, Inc., common stock at $.30 per share which are
subject to restrictions under Rule 144 of the Securities Act of 1933. No
compensation expense was associated with the issuance of the warrants because of
their insignificant value.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized. Date: June 9, 2003.

H-QUOTIENT, INC.

By: /s/ Douglas A. Cohn
 ------------------------------------------
Chairman of the Board, Chief Executive Officer,
President and Chief Financial Officer


                                      F-8
<PAGE>

CERTIFICATION

I, Douglas Cohn, Chief Executive Officer of H-Quotient, Inc. certify that:

     1.  I have reviewed this quarterly report on Form 10-QSB of H-Quotient,
         Inc.;

     2.  Based on my knowledge, this quarterly 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 quarterly report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this quarterly 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 quarterly report.

     4.  The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Rules 13a-14 and 15d-14 of the Exchange Act) 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
              quarterly report is being prepared;

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

         c)   presented in this quarterly 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
         quarterly 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:  June 9, 2003

/s/ Douglas A. Cohn

-----------------------------------
(Douglas Cohn, Chairman of the Board,
Chief Executive Officer and Chief Financial Officer)


                                      F-9
<PAGE>

CERTIFICATION PUSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of H-Quotient, Inc., on Form 10-QSB for
the quarter ending March 31, 2003, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, the Executive Vice President of
Finance and the Chief Executive Officer of the Company, certify, pursuant to and
solely for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

          (1) The Report fully complies with the requirements of Section 13(a)
     or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all
     material respects, the financial condition and results of operations of the
     Company.


Date:  June 9, 2003

/s/ Douglas A. Cohn

-----------------------------------
(Douglas Cohn, Chairman of the Board,
Chief Executive Officer and Chief Financial Officer)


                                      F-10
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