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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(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, 1999.

                                       OR

     [ ]  Transition Report Pursuant to Section 13 or 15(d) of the 
          Securities Exchange Act of 1934

     For the transition period from _______________ to _______________.

                         Commission file number 0-27374

                         RAINTREE HEALTHCARE CORPORATION
             (Exact name of registrant as specified in its charter)

              Delaware                                    86-0684011
     (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                  Identification No.)

                          15300 N. 90th St., Suite 100
                              Scottsdale, AZ 85260
                    (Address of principal executive offices)

                                 (602) 423-1954
              (Registrant's telephone number, including area code)

     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 [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     As of May 1, 1999,  there were 7,593,697  shares of $0.001 par value common
stock outstanding.

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<PAGE>
                         RAINTREE HEALTHCARE CORPORATION

                                      INDEX


PART I - FINANCIAL INFORMATION                                          PAGE NO.

ITEM 1.  Financial Statements:

         Consolidated Balance Sheets as of March 31, 1999 
           (unaudited) and December 31, 1998..........................     3

         Consolidated Statements of Operations for the two 
           months ended March 31, 1999, the one month ended 
           January 31, 1999, and the three months ended 
           March 31, 1998 (unaudited).................................     4

         Consolidated Statements of Cash Flows for the two 
           months ended March 31, 1999, the one month ended 
           January 31, 1999 and the three months ended 
           March 31, 1998 (unaudited).................................     5

         Notes to Consolidated Financial Statements...................     6

ITEM 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations..................................    14

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings............................................    22

ITEM 6.  Exhibits and Reports on Form 8-K.............................    24

SIGNATURES ...........................................................    28


NOTE:    Item 3 of Part I is omitted because it is not applicable.  Items 2, 
         3, 4 and 5 of Part II are omitted because they are not applicable.


                                       2
<PAGE>

                         RAINTREE HEALTHCARE CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>
                                                                             REORGANIZED  |  PREDECESSOR
                                                                               COMPANY    |    COMPANY
                                                                              MARCH 31,   |  DECEMBER 31,
                                                                                1999      |     1998
                                                                             -----------  |  -----------
                                                                             (UNAUDITED)  |
<S>                                                                          <C>          |   <C>      
ASSETS                                                                                    |
Current assets:                                                                           |
  Cash and cash equivalents ..............................................   $   4,268    |   $  16,863
  Accounts receivable ....................................................      20,245    |      22,621
  Prepaid expenses and other current assets ..............................       2,958    |       8,670
                                                                             ---------    |   ---------
     Total current assets ................................................      27,471    |      48,154
Property and equipment, net ..............................................      45,742    |      29,227
Reorganization value in excess of amounts                                                 |
  allocable to identifiable assets .......................................      50,997    |          --
Lease operating rights and other intangible assets, net ..................       1,033    |      58,960
Goodwill, net ............................................................          --    |      24,816
Deposits .................................................................       9,596    |       9,383
                                                                             ---------    |   ---------
                                                                             $ 134,839    |   $ 170,540
                                                                             =========    |   =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                            |
Current liabilities:                                                                      |
  Accounts payable .......................................................   $   8,542    |   $  10,815
  Accrued expenses .......................................................      24,521    |      15,175
  Current portion of notes payable and long-term debt ....................         540    |       1,012
                                                                             ---------    |   ---------
     Total current liabilities ...........................................      33,603    |      27,002
Liabilities subject to compromise ........................................          --    |     166,870
Notes payable and long-term debt .........................................      35,350    |       7,132
Lease financing obligation ...............................................      38,200    |      38,200
Deferred taxes ...........................................................       9,000    |       5,456
Leasehold liability, net .................................................          --    |       4,058
Other liabilities ........................................................       1,115    |         899
                                                                             ---------    |   ---------
     Total liabilities ...................................................     117,268    |     249,617
Stockholders' equity (deficit):                                                           |
  Common stock, $.001 par value; authorized 10,000,000 shares;                            |
    7,593,697 shares issued and outstanding at March 31, 1999 ............           8    |          --
  Common stock, $.001 par value; authorized 25,000,000 shares;                            |
    6,422,096 shares issued and outstanding at December 31, 1998 .........          --    |           5
  Additional paid-in capital .............................................      19,680    |      36,211
  Retained earnings (accumulated deficit) ................................      (2,117)   |    (115,293)
                                                                             ---------    |   ---------
     Net stockholders' equity (deficit) ..................................      17,571    |     (79,077)
                                                                             ---------    |   ---------
                                                                             $ 134,839    |   $ 170,540
                                                                             =========    |   =========
</TABLE>

  See accompanying Notes to Consolidated Financial Statements and Management's
   Discussion and Analysis of Financial Condition and Results of Operations.

                                       3
<PAGE>

                         RAINTREE HEALTHCARE CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (Two Months Ended March 31, 1999, One Month Ended
                                January 31, 1999
                     and Three Months Ended March 31, 1998)
                                   (Unaudited)
                    (In thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                           REORGANIZED  |  PREDECESSOR   PREDECESSOR
                                                             COMPANY    |    COMPANY       COMPANY
                                                           TWO MONTHS   |   ONE MONTH    THREE MONTHS
                                                              1999      |      1999          1998
                                                           -----------  |  -----------   ------------
<S>                                                        <C>          |  <C>           <C>      
Total revenues .........................................   $  21,934    |   $  12,893     $  54,677
                                                                        |
Expenses:                                                               |
  Wages and related ....................................      12,541    |       7,074        27,976
  Other operating ......................................       6,839    |       6,088        19,483
  Rent .................................................       2,080    |       1,112         3,964
  Interest (excludes contractual interest not accrued on                |
      prepetition debt of $1,507 in January 1999 and                    |
      $75 in the three months ended March 31, 1998 .....       1,399    |         445         5,800
  Depreciation and amortization ........................       1,192    |         622         2,273
                                                           ---------    |   ---------     ---------
       Total expenses ..................................      24,051    |      15,341        59,496
                                                           ---------    |   ---------     ---------
Loss from operations ...................................      (2,117)   |      (2,448)       (4,819)
Reorganization expenses ................................          --    |      54,597            --
                                                           ---------    |   ---------     ---------
Loss before income taxes and extraordinary credit ......      (2,117)   |     (57,045)       (4,819)
Income tax benefit .....................................          --    |          --            --
                                                           ---------    |   ---------     ---------
Loss before extraordinary credit .......................      (2,117)   |     (57,045)       (4,819)
Extraordinary credit - gain on debt discharge ..........          --    |     113,242            --
                                                           ---------    |   ---------     ---------
Net income (loss) ......................................   $  (2,117)   |   $  56,197     $  (4,819)
                                                           =========    |   =========     =========
                                                                        |
Net income (loss) per share:                                            |
  Loss before income taxes and extraordinary credit ....   $   (0.28)   |   $   (8.88)    $   (0.75)
   Extraordinary credit - gain on debt discharge .......          --    |       17.63            --
                                                           ---------    |   ---------     ---------
   Net income (loss) per share .........................   $   (0.28)   |   $    8.75     $   (0.75)
                                                           =========    |   =========     =========
Weighted average common shares used in                                  |
  per share calculation ................................       7,594    |       6,422         6,422
</TABLE>

  See accompanying Notes to Consolidated Financial Statements and Management's
   Discussion and Analysis of Financial Condition and Results of Operations.

                                       4
<PAGE>

                         RAINTREE HEALTHCARE CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (TWO MONTHS ENDED MARCH 31, 1999, ONE MONTH
                        ENDED JANUARY 31, 1999 AND THREE
                          MONTHS ENDED MARCH 31, 1998)
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                        REORGANIZED  |  PREDECESSOR   PREDECESSOR
                                                                          COMPANY    |    COMPANY       COMPANY
                                                                        TWO MONTHS   |   ONE MONTH    THREE MONTHS
                                                                           1999      |     1999           1998
                                                                        -----------  |  -----------   ------------
<S>                                                                      <C>         |  <C>            <C>
Net cash provided by (used in) operating activities (including                       |
   changes in all operating assets and liabilities) ..................   $  1,001    |   $   (307)      $  2,049
                                                                         --------    |   --------       --------
INVESTING ACTIVITIES:                                                                |
Purchase of equipment and leasehold improvements .....................       (628)   |       (218)          (492)
Increase in lease and insurance deposits .............................       (200)   |        (13)          (582)
                                                                         --------    |   --------       --------
Net cash used in investing activities ................................       (828)   |       (231)        (1,074)
                                                                         --------    |   --------       --------
FINANCING ACTIVITIES:                                                                |
Net increase (decrease) in revolving lines of credit .................      2,955    |      1,012            (93)
Proceeds from long-term borrowings ...................................         --    |         --             --
Debt payments ........................................................        (86)   |        (10)        (1,219)
Repayment of other long-term liabilities .............................         --    |         --             --
Change in bank overdrafts ............................................       (367)   |        (19)         1,515
Increase in deferred financing costs .................................        (31)   |         --            (56)
                                                                         --------    |   --------       --------
Net cash provided by financing activities ............................      2,471    |        983            147
                                                                         --------    |   --------       --------
REORGANIZATION ACTIVITIES:                                                           |
Cash paid to settle bankruptcy claims ................................         --    |    (15,684)            --
                                                                         --------    |   --------       --------
Net increase (decrease) in cash ......................................      2,644    |    (15,239)         1,122
Cash and cash equivalents at beginning of period .....................      1,624    |     16,863          5,295
                                                                         --------    |   --------       --------
Cash and cash equivalents at end of period ...........................   $  4,268    |   $  1,624       $  6,417
                                                                         ========    |   ========       ========
                                                                                     |
Cash paid for:                                                                       |
   Interest ..........................................................   $    952    |   $    410       $  1,031
   Income taxes ......................................................         22    |         --             --
</TABLE>

  See accompanying Notes to Consolidated Financial Statements and Management's
    Discussion and Analysis of Financial Condition and Results of Operations.

                                       5
<PAGE>

                         RAINTREE HEALTHCARE CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   DESCRIPTION OF BUSINESS

     RainTree is a provider of long-term and specialty healthcare  services.  At
March 31,  1999,  RainTree  operated 41  facilities,  including  six  facilities
managed on behalf of a third party.  RainTree also provides,  either directly or
through third-party contracts,  pharmaceutical services,  rehabilitation therapy
services, medical supplies and laboratory testing, both to its facilities and to
nonaffiliated entities.


2.   BASIS OF PRESENTATION

     RainTree Healthcare  Corporation  (formerly Unison HealthCare  Corporation)
(the  "Predecessor  Company")  filed a  voluntary  petition  on May 28,  1998 to
reorganize under Chapter 11 of the U.S. Bankruptcy Code (the "Bankruptcy Code").
In January  1999,  the Plan of  Reorganization  (the "Plan") was  confirmed  and
became  effective  on January 31, 1999 (the  "Effective  Date").  On January 31,
1999, RainTree Healthcare Corporation (the "Reorganized Company", "RainTree", or
the  "Company")  adopted fresh start  reporting in accordance  with Statement of
Position  90-7,  "Financial  Reporting by Entities in  Reorganization  under the
Bankruptcy  Code" ("SOP  90-7") of the American  Institute  of Certified  Public
Accountants.  Accordingly,  RainTree's  post-reorganization  balance  sheet  and
statement of operations  have not been prepared on a basis  consistent  with the
pre-reorganization  financial  statements  and are not  comparable  to financial
statements prior to reorganization.  For accounting purposes, the inception date
of the  Reorganized  Company is deemed to be January 31, 1999. A vertical  black
line is shown in the financial  statements to separate the  Reorganized  Company
from the  Predecessor  Company since they have not been prepared on a consistent
basis of accounting.

     The  consolidated  financial  statements  included  herein  (except for the
balance sheet as of December 31, 1998) are unaudited; however, in the opinion of
management, they include all adjustments which are necessary to state fairly the
financial  position,  cash flows and results of  operations  of RainTree and the
Predecessor Company as of and for the periods indicated.  RainTree presumes that
users of the interim  financial  information  herein have read or have access to
the Company's  audited  financial  statements  and  Management's  Discussion and
Analysis of Financial  Condition  and Results of  Operations  for the  preceding
fiscal year and that the adequacy of  additional  disclosures  needed for a fair
presentation,  except in regard to material contingencies,  may be determined in
that  context.   Accordingly,   footnote  and  other   disclosures  which  would
substantially  duplicate the  disclosures  contained in  RainTree's  most recent
annual report to stockholders have been omitted.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  Actual results could differ from those estimates.  Operating
results for the two months ended March 31, 1999 are not  necessarily  indicative
of the results which may be expected for the 11 months ended December 31, 1999.

     Certain  reclassifications  have been made to the 1998 financial statements
to conform to the current year presentation.

     The  provision  for  doubtful  accounts  receivable  is  included  in other
operating expenses.  Provisions totaled $431,000,  $1.4 million and $264,000 for
the two months ended March 31, 1999,  the one month ended January 31, 1999,  and
the three months ended March 31, 1998, respectively.  The allowance for doubtful
accounts  totaled  $11.0  million at March 31, 1999 and $9.7 million at December
31, 1998.

                                       6
<PAGE>

3.   PLAN OF REORGANIZATION

     The  implementation of the Plan allowed RainTree to restructure its balance
sheet,  significantly  reduce  its  debt  burden  and  dispose  of  unprofitable
facilities. Prior to the confirmation of the Plan, the Company reached agreement
with respect to its  restructuring  with its major  creditors  including,  among
others:

     o    Omega Healthcare Investors,  Inc. ("Omega"), from whom RainTree leases
          long-term care facilities;

     o    The holders of $100.0  million of 12 1/4%  Senior  Notes due 2006 (the
          "12 1/4% Senior Notes") and $20.0 million of 13% Senior Notes due 1999
          (the "13% Senior Notes");

     o    Health Care Financial  Partners ("Health  Partners"),  who provided an
          $11.0 million accounts  receivable-backed line of credit facility (the
          "HCFP DIP  Facility")  for  working  capital  during  the  Chapter  11
          proceedings;

     o    Bruce H.  Whitehead,  a major  stockholder and creditor of the Company
          and,  until  May  29,  1998,  the  Chairman  of  RainTree's  board  of
          directors; and

     o    David A. Kremser, a major stockholder and creditor of the Company and,
          until May 29, 1998, a director of RainTree.

     Prior to the  Effective  Date,  the  Company  leased  six  facilities  from
BritWill  Investments  Texas,  Ltd.  ("BritWill  Texas"),  an  affiliate  of Mr.
Whitehead,  which were  subject to a mortgage  in favor of Omega (the  "BritWill
Texas Leases").

     The major provisions of the Plan are as follows.

     o    All of RainTree's common stock was cancelled on the Effective Date. As
          described below, RainTree will issue up to 8 million new common shares
          (the "New Common Stock"). RainTree will also issue up to approximately
          $26 million of new debt  securities  (the "Senior  Secured  Notes") in
          satisfaction  of  bankruptcy  claims  held  by  unsecured   creditors,
          including  the holders of the 13% Senior  Notes and the 12 1/4% Senior
          Notes.  The Senior  Secured Notes bear interest at 11.0%,  will mature
          four years from the Effective  Date,  and are secured by the stock and
          personal property of certain RainTree subsidiaries.

     o    On December 31,  1998,  Omega  purchased  seven  facilities  owned and
          operated  by  RainTree  for a  purchase  price of $38.2  million.  The
          facilities were then leased back to RainTree (the "Sale Leaseback"). A
          portion  of the  proceeds  were used to (i) repay  the  mortgage  note
          related to six of these facilities  amounting to  approximately  $19.3
          million, including a prepayment penalty (the "Mortgage Note") and (ii)
          exercise  the  Company's  option to  purchase  The Arbors  Health Care
          Center  for  approximately  $3.2  million.  The  Arbors  facility  was
          included in the Sale Leaseback.  The remaining  proceeds from the sale
          were held in escrow until the Effective  Date,  when they were used to
          settle  bankruptcy  claims as provided  for in the Plan and  described
          below. Omega received closing costs,  financing fees and reimbursement
          of expenses in the amount of $1.0 million.  These seven facilities and
          eleven  other  facilities  leased from Omega and  BritWill  Texas were
          combined  into a single  master  lease  (the  "Omega  Master  Lease").
          RainTree  realized  no gain or loss on the Sale  Leaseback,  which was
          accounted for as a financing transaction.

     o    Six leased  facilities were returned to Omega and three BritWill Texas
          facilities  that  RainTree  disposed  of in March 1997  pursuant  to a

                                       7
<PAGE>

          sublease  agreement  are excluded  from the Master  Lease.  In return,
          Omega  received  $2.0  million in cash,  a  seven-year,  $3.0  million
          promissory  note bearing  interest at 7.0% and a guarantee by RainTree
          that supersedes and replaces all previous guarantees of BritWill Texas
          obligations.  RainTree also paid to Omega, in cash,  prepetition  rent
          payments and other  obligations  in the amount of  approximately  $2.0
          million.

     o    In settlement of  approximately  $15.8 million of allowed claims,  Mr.
          Whitehead and affiliates (the "Whitehead Affiliates) received $541,000
          in cash,  unsecured  promissory  notes  totaling $1.5 million,  Senior
          Secured Notes amounting to $292,000 and  approximately  729,000 shares
          of New Common Stock.  The unsecured  promissory notes bear interest at
          9.0%,  payable  quarterly,  and the  principal  amount will be due and
          payable at the end of four years.

     o    In settlement of  approximately  $5.4 million of allowed  claims,  Mr.
          Kremser and affiliates (the "Kremser Affiliates") received $541,000 in
          cash and a promissory  note amounting to $1.4 million.  The promissory
          note bears  interest at 9.0%,  payable  quarterly,  and the  principal
          amount will be due and  payable at the end of five years.  The Kremser
          Affiliates'  note is secured by certain  personal  property of certain
          RainTree subsidiaries.

     o    Convenience  Claims,  defined in the Plan as  payables  due to general
          unsecured  creditors  amounting  to $1,000 or less (or  $2,000 or less
          whose  holders  elect to reduce their claims to $1,000),  were paid in
          cash.  RainTree  paid  approximately  $520,000  to settle  Convenience
          Claims.  Essential Vendor Claims,  defined in the Plan as payables due
          to vendors and  suppliers  essential to RainTree's  ongoing  business,
          were  paid in cash  in the  aggregate  amount  of  approximately  $2.5
          million.

     o    Trade  Unsecured  Claims are  defined in the Plan as payables to other
          nonessential  trade  vendors.  RainTree is currently in the process of
          settling Trade Unsecured  Claims and other general  unsecured  claims.
          Each holder of a Trade  Unsecured  Claim will  receive,  in cash,  the
          lesser of 35% of the allowed amount of the claim or a pro rata portion
          of $1.4 million,  plus shares of New Common Stock. The total amount of
          Trade Unsecured Claims was approximately $3.4 million.

     o    All  other  general  unsecured   creditors  will  share  PRO  RATA  in
          approximately  91% of the New  Common  Stock  and the  Senior  Secured
          Notes.  A  subordination  agreement  related to the 13%  Senior  Notes
          resulted in a  reallocation  among the holders of the 13% Senior Notes
          and those  holders of the 12 1/4% Senior Notes who had  consented to a
          subordination agreement (the "Consenting Noteholders"). As a result of
          this reallocation, the holders of the 13% Senior Notes received Senior
          Secured  Notes equal to 100% of their allowed  claims ($22.1  million)
          and the Consenting Noteholders received only New Common Stock totaling
          approximately  6,343,000  shares.  The  holders of the 12 1/4%  Senior
          Notes who did not  consent  to the  subordination  agreement  received
          Senior Secured Notes totaling $1.8 million and  approximately  522,000
          shares of New Common  Stock.  The  aggregate  amount of these  general
          unsecured claims was approximately $137.5 million.

     o    Secured  claims  included the Mortgage  Note,  the HCFP DIP  Facility,
          claims of Omega,  property tax  liabilities  and other secured  loans.
          Secured claims were either:  (i) paid in cash;  (ii) the liability was
          continued in accordance  with its original  terms after  defaults,  if
          any, were cured;  or (iii) the collateral  securing such liability was
          returned  to the  creditor  in full  satisfaction  of the  claim.  The
          aggregate amount of secured claims was approximately $34.7 million.

                                       8
<PAGE>

     o    The Company's  stockholders and members of a shareholders class action
          lawsuit  settlement  class  will  share  pro rata in the  issuance  of
          warrants to purchase approximately 400,000 shares of New Common Stock.

     o    Shortly  after the  Effective  Date,  RainTree  obtained a substantial
          portion of a new $12.0  million  line of credit from  Health  Partners
          that replaced the HCFP DIP Facility. The remaining portion of the line
          of credit was obtained on May 14, 1999. See  "Management's  Discussion
          and    Analysis    of    Financial    Condition    and    Results   of
          Operations-Liquidity and Capital Resources."

     o    On April 28, 1999,  RainTree  entered into employment  agreements with
          four of its executive officers ("Senior Management"). These agreements
          are attached to this Quarterly Report as Exhibits 10.31 through 10.34.
          Under the terms of the employment  agreements,  Senior  Management was
          awarded  an  aggregate  of  360,000   restricted  stock  units.   Each
          restricted  stock  unit  entitles  the holder to  receive,  subject to
          vesting, one share of New Common Stock upon the earlier of February 1,
          2002 or termination of employment.


4.   FRESH START REPORTING

     In accordance with SOP 90-7,  RainTree  adopted fresh start reporting as of
the Effective  Date.  RainTree,  with the assistance of its financial  advisors,
determined its  reorganization  value, which represents the fair market value of
the Company before considering liabilities.  Reorganization value is intended to
represent  the  amount a  willing  buyer  would pay for the  assets of  RainTree
immediately  after its emergence from Chapter 11. The  reorganization  value was
based on, among other things,  discounted cash flows for the reorganized Company
over a 14-year  period.  The projected  cash flows  included  assumptions  as to
anticipated revenues,  operating expenses and capital  expenditures.  A discount
rate of 16% was used,  which  reflects the  uncertainty  of the cash flows,  the
general  inherent  risk of the long-term  care  industry,  and general  business
conditions.

     Under fresh start reporting,  the  reorganization  value of the Company has
been allocated to RainTree's  assets on a basis  substantially  consistent  with
purchase  accounting.  The excess of the reorganization  value over the value of
identifiable  assets is reported as  "reorganization  value in excess of amounts
allocable to identifiable assets." All identifiable assets were recorded at fair
value, which  approximated  carrying value. The new Senior Secured Notes and all
other  liabilities  were  recorded at fair value,  which  approximated  carrying
value.

     The  adjustments  made to  give  effect  to the  discharge  of  prepetition
liabilities and fresh start  reporting are as follows.  The reorganized  balance
sheet gives pro forma effect to New Common Stock and Senior Secured Notes yet to
be issued under the Plan (in thousands).

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                    JANUARY 31, 1999
                                                    PRECONFIRMATION     REORGANIZATION    FRESH START     REORGANIZED
                                                      BALANCE SHEET      ADJUSTMENTS      ADJUSTMENTS    BALANCE SHEET
<S>                                                 <C>                 <C>               <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents.......................     $ 17,308        $ (15,684)(a)      $     --         $  1,624
   Accounts receivable, net........................       21,459               --                --           21,459
   Prepaid expenses and other current assets.......        8,815               --            (5,456)(g)
                                                                                               (103)(h)        3,256
                                                        --------        ---------          --------         --------
      Total current assets.........................       47,582          (15,684)           (5,559)          26,339
Property and equipment, net........................       29,081           (3,117)(b)        19,751 (h)       45,715
Lease operating rights and other intangibles, net..       58,608           (4,728)(c)       (52,858)(h)        1,022
Goodwill, net......................................       24,727               --           (24,727)(h)           --
Deposits...........................................        9,675             (279)(d)            --            9,396
Reorganization value in excess of amounts
allocable to identifiable assets...................           --               --            42,568 (h)
                                                                                              9,000 (g)       51,568
                                                        --------        ---------          --------         --------
                                                        $169,673        $ (23,808)         $(11,825)        $134,040
                                                        ========        =========          ========         ========
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
   Accounts payable................................    $  10,958        $      --          $     --         $ 10,958
   Accrued expenses................................       16,321            5,955 (e)            --           22,276
   Current portion of long-term debt...............        1,012             (440)(e)            --              572
                                                        --------        ---------          --------         --------
      Total current liabilities....................       28,291            5,515                --           33,806
Liabilities subject to compromise..................      166,870         (166,870)(e)            --               --
Notes payable and long-term debt...................        8,144           24,305 (a)            --           32,449
Lease financing obligation.........................       38,200               --                --           38,200
Deferred taxes ....................................        5,456               --             3,544 (g)        9,000
Leasehold liability, net...........................        4,058               --            (4,058)(h)           --
Other liabilities..................................          897               --                --              897
                                                        --------        ---------          --------         --------
   Total liabilities...............................      251,916         (137,050)             (514)         114,352
Stockholders' equity (deficit):
   Common stock, Predecessor Company..............             5               --                (5)(i)           --
   Common stock, Reorganized Company..............            --                8 (a)            --                8
   Additional paid-in capital.....................        36,211           19,680 (a)       (36,211)(i)       19,680
   Retained earnings (accumulated deficit)........      (118,459)          93,554 (f)        24,905 (i)           --
                                                        --------        ---------          --------         --------
      Net stockholders' equity (deficit)..........       (82,243)         113,242           (11,311)          19,688
                                                        --------        ---------          --------         --------
                                                        $169,673        $ (23,808)         $(11,825)        $134,040
                                                        ========        =========          ========         ========
-----------------

(a)  To record the  settlement of  bankruptcy  claims  through  payment of cash,
     issuance of Senior Secured Notes and issuance of New Common Stock.
(b)  To reflect property and equipment  returned to creditors in satisfaction of
     bankruptcy claims.
(c)  To record the write-off of deferred debt issue costs.
(d)  To record  adjustments  to security  deposits  related to the Omega  Master
     Lease.
(e)  To record the discharge or reclassification of prepetition obligations.
(f)  To record  the gain on  discharge  of  indebtedness  ($113,242)  net of New
     Common Stock issued ($19,688).
(g)  To record adjustment to deferred tax assets and liabilities.
(h)  To record  adjustments  to reflect  assets and  liabilities  at fair market
     values and to record reorganization value in excess of amounts allocable to
     identifiable assets.
(i)  To  record  the  cancellation  of  Predecessor  Company  common  stock  and
     elimination of retained earnings.
</TABLE>

     REORGANIZATION EXPENSES. In accordance with SOP 90-7,  reorganization items
are  reported   separately  in  the   consolidated   statement  of   operations.
Reorganization items for the one month ended January 31, 1999 are as follows (in
thousands):

                                       10
<PAGE>

     Adjustments of assets and liabilities to fair value........    $53,879
     Professional fees and other expenses related to the
        Chapter 11 proceedings..................................        718
                                                                    -------
                                                                    $54,597
                                                                    =======


5.   LIABILITIES SUBJECT TO COMPROMISE

     During the Chapter 11 process, the Predecessor Company and its subsidiaries
(the  "Debtors")  operated  their  businesses  and managed  their  properties as
debtors-in-possession  under authority of the Bankruptcy Code. Under Chapter 11,
certain  claims  against  the  Debtors in  existence  prior to the filing of the
petitions for reorganization under the federal bankruptcy laws were stayed while
the Debtors were in  bankruptcy.  These claims are set forth in the December 31,
1998 balance sheet as  "liabilities  subject to  compromise." In accordance with
SOP 90-7, the accrual for interest on unsecured,  prepetition obligations of the
Debtors was discontinued from the filing date to the Effective Date.

     Liabilities subject to compromise consisted of the following as of December
31, 1998 (in thousands):

     12 1/4% Senior Notes.......................................   $100,000
     13% Senior Notes...........................................     20,000
     Notes payable and long-term debt ..........................     24,495
     Trade payables.............................................      4,661
     Accrued interest...........................................     11,486
     Other......................................................      6,228
                                                                   --------
                                                                   $166,870
                                                                   ========


6.   DISPOSITIONS

     As part of RainTree's restructuring,  the Company identified long-term care
facilities  for  disposition.  As part of  these  plans,  in  1998  the  Company
terminated the leases of 12 long-term care  facilities.  RainTree's  disposition
program was concluded in January 1999, when the Company terminated the leases of
seven facilities, six of which were leased from Omega.

     RainTree has agreed to sell certain  assets of Sunbelt  Therapy  Management
Services, Inc. and its subsidiaries ("Sunbelt"). Sunbelt provides rehabilitation
therapy services to certain RainTree  facilities and third parties.  The parties
agreed to enter into  definitive  documentation  as soon as  practicable.  It is
anticipated  that under the definitive  agreement Paul Henderson and Paige Plash
will purchase the therapy services  contracts of Sunbelt's  outpatient  clinics,
hospitals,  home  health and other  businesses  not  related to  long-term  care
facilities.   Messrs.   Henderson   and  Plash,   who  were  the  president  and
vice-president,  respectively, of Sunbelt until April 1, 1999, will also acquire
the therapy  services  contracts of two RainTree nursing  facilities.  The sales
price is  expected  to be  approximately  $1.2  million,  comprised  of cash and
promissory notes, plus the assumption of certain Sunbelt  liabilities.  RainTree
has entered into an agreement with an unrelated third party to manage  Sunbelt's
remaining long-term care therapy operations for an annual fee of $768,000.


7.   CONTINGENCIES

     RainTree is a defendant in seven  consolidated  purported  securities class
action lawsuits pending in the United States District Court in Phoenix,  Arizona
(the "Federal Action"),  and a purported securities class action lawsuit pending
in California Superior Court (the "State Action") (collectively, the "Actions").
The  Actions  arise from the  Company's  announcement  on March 11, 1997 that it

                                       11
<PAGE>

would be  restating  its  financial  results  for the  nine-month  period  ended
September 30, 1996. The Federal  Action seeks damages for alleged  violations of
federal and Arizona  securities laws; the State Action seeks damages for alleged
violations of the California  securities laws. The broadest class period is that
alleged in the Federal  Action from December 18, 1995 (the date of the Company's
initial public offering) to May 30, 1997.

     The parties in the Federal  Action have reached a  settlement  in principle
that is  expected  to  resolve  both the  Federal  and  State  Actions  in their
entirety.  The  settlement  includes  a cash  payment by the  Company's  primary
insurer  amounting to $4.25  million and  1,000,000  shares of old Common Stock.
Under the Plan, old Common Stock was converted into warrants; under the proposed
settlement,  class members who are to receive RainTree shares will receive a pro
rata share of such warrants. The settlement was approved by the Bankruptcy Court
on December  30, 1998 and by the district  court in the Federal  Action on April
28, 1999.

     The  Company  also  is a  party  to  several  other  lawsuits.  See  "Legal
Proceedings".


8.   OPERATING SEGMENTS

     During the fourth quarter of 1998,  RainTree adopted Statement of Financial
Accounting  Standards No. 131,  "Disclosures About Segments of an Enterprise and
Related Information" ("SFAS No. 131"). SFAS No. 131 requires the presentation of
descriptive  information about reportable  segments that is consistent with that
made  available  to  the  management  of  the  Company  to  assess  performance.
RainTree's  four reportable  segments are strategic  business units that involve
specialized healthcare services and require different marketing strategies.

     The long-term care segment  consists of RainTree's  nursing  facilities and
assisted and  independent  living  facilities.  Sunbelt  conducts the  Company's
rehabilitation therapy segment operations.  The pharmacy segment is comprised of
RainTree's  institutional  pharmacy  and  Medicare  Part B  billing  and  supply
business units. The laboratory  segment  represents the operations of RainTree's
medical reference laboratories.

                                       12
<PAGE>
<TABLE>
<CAPTION>
                                            REORGANIZED   |   PREDECESSOR      PREDECESSOR
                                              COMPANY     |     COMPANY          COMPANY
                                            TWO MONTHS    |    ONE MONTH      THREE MONTHS
                                               ENDED      |      ENDED            ENDED
                                          MARCH 31, 1999  |  JAN. 31, 1999   MARCH 31, 1998
                                          --------------  |  -------------   --------------
<S>                                       <C>             |  <C>             <C>
Revenues from nonrelated entities:                        |
   Long-term care .......................     $ 17,665    |      $ 10,142       $ 40,950
   Rehabilitation therapy ...............        1,472    |           715          3,500
   Pharmacy .............................        1,387    |           729          2,407
   Laboratory ...........................        1,324    |           482          1,453
   Corporate ............................           86    |            50             34
                                              --------    |      --------       --------
      Total .............................     $ 21,934    |      $ 12,118       $ 48,344
                                              ========    |      ========       ========
                                                          |
Total revenues:                                           |
   Long-term care .......................     $ 17,665    |      $ 10,142       $ 40,950
   Rehabilitation therapy ...............        2,336    |         1,152          8,352
   Pharmacy .............................        1,738    |         1,039          3,888
   Laboratory ...........................        1,383    |           510          1,453
   Corporate ............................        1,286    |           676          2,707
   Eliminations .........................       (2,474)   |          (626)        (2,673)
                                              --------    |      --------       --------
      Total .............................     $ 21,934    |      $ 12,893       $ 54,677
                                              ========    |      ========       ========
                                                          |
Operating income (loss):                                  |
   Long-term care .......................     $    204    |      $   (251)      $   (783)
   Rehabilitation therapy ...............         (360)   |        (1,476)           391
   Pharmacy .............................          (34)   |           140            767
   Laboratory ...........................          189    |          (120)           (79)
   Unallocated corporate expenses .......       (2,116)   |          (741)        (5,115)
                                              --------    |      --------       --------
      Consolidated operating loss .......       (2,117)   |        (2,448)        (4,819)
Reorganization expenses .................           --    |        54,597             --
                                              --------    |      --------       --------
Consolidated loss before income taxes                     |
   and extraordinary credit .............     $ (2,117)   |      $(57,045)      $ (4,819)
                                              ========    |      ========       ========
                                                          |
Interest expense:                                         |
   Long-term care .......................     $    738    |      $    312       $  1,049
   Rehabilitation therapy ...............           --    |            --              7
   Pharmacy .............................            2    |             1              5
   Laboratory ...........................            3    |            --              3
   Corporate ............................          656    |           132          4,736
                                              --------    |      --------       --------
      Total .............................     $  1,399    |      $    445       $  5,800
                                              ========    |      ========       ========
                                                          |
Depreciation and amortization:                            |
   Long-term care .......................     $    504    |      $    260       $  1,088
   Rehabilitation therapy ...............           18    |            51            254
   Pharmacy .............................           19    |            15             44
   Laboratory ...........................           26    |            19             54
   Corporate ............................          625    |           277            833
                                              --------    |      --------       --------
      Total .............................     $  1,192    |      $    622       $  2,273
                                              ========    |      ========       ========
                                                          |
Routine capital expenditures:                             |
   Long-term care .......................     $    622    |      $    191       $    205
   Rehabilitation therapy ...............           --    |             1             93
   Pharmacy .............................           --    |            --             42
   Laboratory ...........................            6    |            18             48
   Corporate ............................           --    |             8            104
                                              --------    |      --------       --------
      Total .............................     $    628    |      $    218       $    492
                                              ========    |      ========       ========
</TABLE>

                                       13
<PAGE>

                                             MARCH 31,     |    DECEMBER 31,
                                               1999        |        1998
                                            -----------    |    ------------
Total assets:                                              |
   Long-term care....................         $ 71,182     |      $ 79,624
   Rehabilitation therapy............            2,242     |        13,266
   Pharmacy..........................            2,454     |         5,751
   Laboratory........................            2,443     |         2,372
   Corporate.........................           56,919     |        73,732
   Eliminations......................             (401)    |        (4,205)
                                              --------     |      --------
      Total..........................         $134,939     |      $170,540
                                              ========     |      ========


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     Certain  statements  contained in this Quarterly Report,  including without
limitation statements containing the words "believes", "anticipates", "intends",
"expects" and words of similar import, are forward-looking statements within the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act") and Section 21E of the  Securities  Exchange Act of 1934,  as
amended (the "Exchange  Act").  While the Company  believes that the assumptions
underlying  these  statements are  reasonable,  such  assumptions  (and thus the
statements  based upon them) could  prove to be  inaccurate.  Important  factors
which could cause results to vary include,  among others: delays in or inability
to conclude transactions; unsuccessful implementation of RainTree's new business
strategy;  general  economic  and  business  conditions;  competition;  loss  of
customers; changes in applicable laws and regulations;  availability,  terms and
deployment  of  capital  in light of recent  losses  and cash  flow  shortfalls;
cancellation  of leases or contracts;  demand  fluctuations;  adverse  uninsured
determinations in any existing or future  litigation or regulatory  proceedings;
health care  statutory or regulatory  changes  which  disfavor the types of care
delivered by the Company;  reversal of the current  limitations in the supply of
long-term care facilities;  and Year 2000 issues.  Important factors which could
cause results to vary also include the factors  discussed in  RainTree's  Annual
Report on Form 10-K for the year ended  December 31, 1998 in "Item 1 - Business"
and "Item 7 - Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations - Risks and  Uncertainties",  as well as factors discussed
elsewhere in this report or in any document incorporated herein by reference.

     The following  material should be read in conjunction with the Consolidated
Financial  Statements  of  the  Company  and  the  related  notes  thereto.  All
references in this  discussion  and analysis to years are to fiscal years of the
Company ended December 31 of such year.

PLAN OF REORGANIZATION

     RainTree operated under the protection of Chapter 11 of the Bankruptcy Code
from May 28, 1998 until January 31, 1999. The restructuring  began on January 7,
1998,  when three of  RainTree's  subsidiaries,  BritWill  Investments-I,  Inc.,
BritWill  Investments-II,  Inc. and BritWill Indiana  Partnership (the "BritWill
Debtors"),  with  operations in Texas and Indiana,  filed for  protection  under
Chapter 11 with the United States  Bankruptcy  Court for the District of Arizona
(the "Bankruptcy  Court").  The Chapter 11 filings were  necessitated by actions
taken by  Omega  to  terminate  or  otherwise  enforce  the  terms of its  lease
agreements  with the  Company.  RainTree,  through its  subsidiaries,  leased 14
long-term care  facilities  from Omega under three master lease  agreements.  In
addition, RainTree leased six facilities from BritWill Texas, which were subject
to a mortgage  in favor of Omega.  BritWill  Texas is an  affiliate  of Bruce H.
Whitehead, a major stockholder and creditor of RainTree and formerly chairman of
its Board of Directors.

     RainTree initiated negotiations to reach a consensual  restructuring of its
debt and lease obligations with Omega, representatives of certain of the holders
of its 12 1/4% Senior Notes and 13% Senior Notes (the "Ad Hoc  Committee"),  the

                                       14
<PAGE>

Whitehead  Affiliates  and the Kremser  Affiliates.  On June 15, 1998,  RainTree
concluded an agreement in principle  with respect to a consensual  restructuring
with  some,  but not all,  of its  creditor  constituencies.  The  agreement  in
principle  formed  the  basis  of the  plan of  reorganization  filed  with  the
Bankruptcy  Court on August 10, 1998. On October 16, 1998,  the amended Plan was
filed. The significant  elements of the Plan are described in Note 3 of Notes to
Consolidated  Financial  Statements.  Under  Bankruptcy Court  supervision,  the
Company  continued to manage and operate its business as a debtor in  possession
and,  as  described  above,  developed  the Plan to  restructure  its  financial
affairs,  including  assuming or rejecting  executory  contracts and leases. The
Plan was confirmed by the Bankruptcy Court effective January 31, 1999.

EMERGENCE FROM CHAPTER 11 AND PLAN OF REORGANIZATION

     The Plan set forth a method for  repaying  or  otherwise  compensating  the
Company's creditors in order of the relative priority of their respective claims
while  seeking to maintain the Company as a going  concern.  The Plan  provided,
among  other  things,  for:  (i)  the  conversion  of  substantially  all of the
Company's  prepetition  liabilities  into  equity  interests  in the Company and
approximately $26 million of Senior Secured Notes due 2003; (ii) cancellation of
all of the prepetition equity interests in the Company, including the old common
stock;  and (iii)  restructuring  of the  Company's  master  leases for  certain
facilities  with Omega.  The Plan became  effective and the Company emerged from
Chapter 11 on the Effective Date. See Note 3 of Notes to Consolidated  Financial
Statements.

IMPACT OF FRESH START REPORTING

     When RainTree emerged from bankruptcy,  it adopted fresh start reporting in
accordance with SOP 90-7. Under fresh start reporting,  the reorganization value
of RainTree has been allocated to its assets on a basis substantially consistent
with purchase  accounting.  The portion of reorganization value not attributable
to  specific  assets has been  recorded  as  "Reorganization  Value in Excess of
Amounts  Allocable to  Identifiable  Assets."  Certain fresh start  adjustments,
primarily  related to the adjustment of the Company's  assets and liabilities to
fair market values,  will have a significant effect on RainTree's future results
of operations. The more significant adjustments relate to increased depreciation
expense on property and equipment and reduced amortization expense on intangible
assets.

     As of the Effective  Date,  Reorganized  RainTree  recorded total assets of
$134.0 million,  total debt and lease financing obligations of $71.2 million and
stockholders'  equity  of $19.7  million.  See  Note 4 of Notes to  Consolidated
Financial Statements for further detail regarding fresh start reporting.

DISPOSITIONS

     As part of RainTree's restructuring,  the Company identified long-term care
facilities  for  disposition.  As part of  these  plans,  in  1998  the  Company
terminated the leases of 12 long-term care  facilities.  RainTree's  disposition
program was concluded in January 1999, when the Company terminated the leases of
seven facilities, six of which were leased from Omega.

     RainTree has agreed to sell certain assets of Sunbelt.  The Company expects
to enter into a definitive  agreement with Paul  Henderson and Paige Plash,  who
will purchase the therapy services  contracts of Sunbelt's  outpatient  clinics,
hospitals,  home  health and other  businesses  not  related to  long-term  care
facilities.   Messrs.   Henderson   and  Plash,   who  were  the  president  and
vice-president,  respectively, of Sunbelt until April 1, 1999, will also acquire
the therapy  services  contracts of two RainTree nursing  facilities.  The sales
price is  expected  to be  approximately  $1.2  million,  comprised  of cash and
promissory notes, plus the assumption of certain Sunbelt  liabilities.  RainTree
has also  entered  into an  agreement  with a third  party to  manage  Sunbelt's
remaining long-term care therapy operations for an annual fee of $768,000.

                                       15
<PAGE>

RESULTS OF OPERATIONS

     As a result of the  reorganization  and the  implementation  of fresh start
reporting,  the  Company's  results of  operations  after  January 31, 1999 (the
cutoff date used for financial reporting purposes) are not comparable to results
reported in prior periods. See Notes 3 and 4 of Notes to Consolidated  Financial
Statements  for  information on the  implementation  of the Plan and fresh start
reporting.

     To facilitate a meaningful  comparison of  RainTree's  quarterly  operating
performance in the first quarters of 1999 and 1998, the following  discussion of
results  of  operations  is  presented  on  a  traditional   comparative  basis.
Consequently,  the current period's information  presented below does not comply
with accounting  requirements for companies that emerge from  bankruptcy.  These
requirements  call for  separate  reporting  for  Reorganized  RainTree  and the
Predecessor Company.

                RAINTREE HEALTHCARE CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED RESULTS OF OPERATIONS
                                 (In thousands)

                                                            THREE MONTHS ENDED
                                                                 MARCH 31,
                                                        ------------------------
                                                          1999 (1)       1998
                                                        -----------   ----------

Total revenues .......................................   $  34,827    $  54,677

Expenses:
  Wages and related ..................................      19,615       27,976
  Other operating ....................................      12,927       19,483
  Rent ...............................................       3,192        3,964
  Interest (excludes contractual interest not
    accrued on prepetition debt of $1,507 in 
    1999 and $75 in 1998) ............................       1,844        5,800
  Depreciation and amortization ......................       1,814        2,273
                                                         ---------    ---------
       Total expenses ................................      39,392       59,496
                                                         ---------    ---------
Loss from operations .................................      (4,565)      (4,819)
Reorganization expenses ..............................      54,597           --
                                                         ---------    ---------
Loss before income taxes and extraordinary credit ....     (59,162)      (4,819)
Income tax benefit ...................................          --           --
                                                         ---------    ---------
Loss before extraordinary credit .....................     (59,162)      (4,819)
Extraordinary credit - gain on debt discharge ........    (113,242)        --
                                                         ---------    ---------
Net income (loss) ....................................   $  54,080    $  (4,819)
                                                         =========    =========
-----------------

(1)  This column  represents the  combination of historical  results for the two
     months  ended March 31,  1999 for  Reorganized  RainTree  and the one month
     ended January 31, 1999 for the Predecessor Company.

                                       16
<PAGE>

     The following table summarizes selected operating statistics.

                                                              AT MARCH 31,    
                                                        -----------------------
                                                         1999             1998
                                                        ------           ------
Leased and Owned Facilities:
  Number of facilities...............................       35               52
  Number of licensed beds:
     Long-term care..................................    3,400            4,595
     Assisted and independent living.................      214              325

Managed Facilities:
  Number of facilities...............................        6                1
  Number of licensed beds............................      406               71

Institutional Pharmacies:
  Number of outlets..................................        2                2
  Nonaffiliated facilities served....................       40               61

Laboratory Services:
  Number of laboratories.............................        3                3
  Nonaffiliated entities served......................      318              260


      The following  table  identifies  the  Company's  sources of net operating
revenues from nonaffiliated entities.

                                                          THREE MONTHS ENDED
                                                               MARCH 31,
                                                        -----------------------
                                                         1999             1998
                                                        ------           ------
Percentage of total revenues:
   Long term care ...................................    82.1%            84.8%
   Therapy services .................................     6.4              7.2
   Pharmacy services ................................     6.2              5.0
   Laboratory services ..............................     5.3              3.0
                                                        -----            -----

       Total.....................................       100.0%           100.0%
                                                        =====            =====

     RainTree's  revenues  fluctuate  from facility to facility based on various
factors, including total capacity,  occupancy rates, reimbursement methodologies
and rates among the payor categories, payor mix and the scope and utilization of
the Company's ancillary services.  In general, the Company believes that private
pay sources are more profitable to the Company than  governmental  reimbursement
sources.

     Data for nursing center  operations  with respect to sources of net patient
revenues  and  patient  mix by payor type are set forth  below  (long-term  care
only).

                                       17
<PAGE>

                                                          THREE MONTHS ENDED
                                                               MARCH 31,
                                                        -----------------------
                                                         1999             1998
                                                        ------           ------
SOURCES OF REVENUES
Medicare ..........................................      22.4%            31.7%
Private and other..................................      17.9             16.5
                                                        -----            -----

Quality mix........................................      40.3             48.2
Medicaid ..........................................      59.7             51.8
                                                        -----            -----

     Total.........................................     100.0%           100.0%
                                                        =====            =====

AVERAGE OCCUPANCY
Nursing facilities.................................      76.6%            81.2%
Independent and assisted living facilities.........      53.4             59.5


THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998

     In the 1999 first  quarter,  RainTree  recorded net income of $54.1 million
compared to a net loss of $4.8 million in the prior year quarter. Net income for
the 1999 first quarter  includes a $113.2  million gain from debt  discharged in
the bankruptcy and reorganization expenses amounting to $54.6 million. Loss from
operations  amounted to $4.6 million in the 1999 first quarter  compared to $4.8
million in the same period in 1998.

     Total revenues  decreased $19.9 million,  or 36.3%, to $34.8 million in the
1999 first  quarter  from $54.7  million in the  comparable  1998  quarter.  Net
patient service revenues  decreased from $54.1 million in the 1998 first quarter
to $34.5 million in the current  period.  Patient days decreased from 361,992 in
the 1998 period to 254,040 in the current period.  Net patient service  revenues
recorded by the  long-term  care  facilities  decreased by  approximately  $13.0
million, of which $8.3 million is attributable to the disposition of facilities.
The long-term care facilities  experienced declines in occupancy and quality mix
(the  percentage of revenues from Medicare and private pay sources) in the first
quarter 1999. The decrease in average  occupancy in 1999 is due primarily to the
negative perception of RainTree as a result of the bankruptcy. If the Company is
unable to  increase  its average  occupancy  levels in the near  future,  it may
experience  a material  negative  impact on its results of  operations  and cash
flows.  Quality mix was  impacted by both the  bankruptcy  and the new  Medicare
Prospective  Payment  System  ("PPS"),  which  applied to RainTree on January 1,
1999. Under PPS,  skilled nursing  facilities are paid a fixed per diem rate for
virtually  all covered  services.  RainTree  estimates  that its  average  daily
Medicare rate under PPS will be  approximately  18% lower in fiscal 1999 than in
1998.

     Therapy and pharmacy  company  revenues also  decreased from the prior year
period because the companies'  nursing facility  customers have negotiated lower
contract  rates  in an  effort  to  control  costs  in the PPS  environment.  In
addition,   under  PPS  there  is  an  annual   per-patient  cap  of  $1,500  on
reimbursement  for combined Part B and  outpatient  physical and speech  therapy
services and an annual cap of $1,500 on combined Part B and occupational therapy
services. See "-Dispositions."

     Wages and related  expenses  decreased $8.4 million,  or 29.9%,  from $28.0
million in the 1998 first quarter to $19.6 million in the current  quarter.  The
decrease is due  primarily  to: (i)  facility  dispositions,  which  account for
approximately $4.5 million of the decrease; (ii) a decrease in ancillary company
expenses of approximately $3.2 million; and (iii) cost controls in the Company's
long-term care facilities.  Most of the decrease in ancillary company expense is
related to therapy operations.  Sunbelt has experienced a decrease in the volume
of services  provided as a result of PPS, and has also changed its  compensation
structure in order to control costs.  Wages and related expenses as a percentage
of revenues amounted to 56.3% in 1999 and 51.2% in 1998.

                                       18
<PAGE>

     Other  operating  expenses  decreased  $6.6 million,  or 33.6%,  from $19.5
million in the 1998 first  quarter to $12.9  million in the 1999 first  quarter.
Approximately  $3.4  million  of the  decrease  is due  to  the  disposition  of
facilities.  The remaining decrease is due primarily to a reduction in ancillary
expenses of the long-term care facilities. RainTree renegotiated its therapy and
pharmacy provider contracts in response to the reimbursement  changes under PPS.
The  provision  for doubtful  accounts  increased by $1.5 million from the prior
year  period.  The  increase  is due  to  Sunbelt  receivables  that  have  been
determined  to be  uncollectible  as well as an  increase  in the age of nursing
facility  receivables.  Other  operating  expenses as a  percentage  of revenues
amounted to 37.1% in the 1999 first quarter and 35.6% in the 1998 period.

     Rent expense  decreased from $4.0 million in the 1998 first quarter to $3.2
million in the 1999 period.  The decrease is due primarily to the disposition of
facilities.  Rent expense as a percentage of revenues was 7.2% in the 1998 first
quarter and 9.2% in the current quarter.

     Interest  expense  amounted  to $1.8  million  in the  1999  first  quarter
compared to $5.8 million in the 1998 first quarter.  The decrease is due in part
to  contractual  interest  not  accrued  on  prepetition  debt in the  amount of
approximately $1.5 million and to the decrease in RainTree's debt as a result of
emergence from bankruptcy on January 31, 1999.  Interest expense as a percentage
of revenues  was 5.3% in the 1999 first  quarter  compared to 10.6% in the prior
year period.

     Depreciation  and amortization  expense  decreased from $2.3 million in the
1998 first  quarter to $1.8 million in the 1999 first  quarter.  The decrease is
due to the net  reduction  in  intangible  assets  resulting  from  fresh  start
reporting and the  write-down of impaired  assets in the fourth quarter of 1998.
Depreciation  and  amortization as a percentage of revenues  amounted to 5.2% in
the 1999 first quarter compared to 4.2% in the prior year period.

     RainTree  did not record  income tax  expense or benefit in the  current or
prior year periods.  In both periods,  the Company  generated net losses for tax
purposes.  The discharge of debt and other  obligations  on the  Effective  Date
resulted  in  an  extraordinary   gain  for  financial   reporting  purposes  of
approximately  $113.2 million. The Company did not record tax expense related to
this gain.  The Internal  Revenue Code provides that, in a Chapter 11 bankruptcy
case,  income  normally  arising  from the  discharge  of debt is excluded  from
taxable  income.  However,  to the extent that income from discharge is excluded
from income,  taxpayers must reduce  specified tax  attributes  that include net
operating losses. The Company anticipates that, as a result of the restructuring
of its debt obligations,  its net operating losses will be substantially reduced
or limited. Therefore, the Company has established a valuation allowance against
its net operating loss carryforward benefits.

     Reorganization  expenses  recorded  in January  1999 in the amount of $54.6
million are comprised primarily of fresh start adjustments and professional fees
related to the bankruptcy and restructuring. See Note 4 of Notes to Consolidated
Financial Statements.


LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW PROVIDED BY OPERATING ACTIVITIES

     RainTree had a cash balance of $4.3 million and a working  capital  deficit
of $6.1 million at March 31, 1999.

     Net cash provided by the  Company's  long-term  care and ancillary  company
operations amounted to approximately $694,000 in the first quarter of 1999. This
cash was generated in spite of the loss from operations recorded by RainTree and
is due primarily to a net increase in accounts  payable and accrued expenses and
collection of accounts receivable.

                                       19
<PAGE>

     Gross  accounts  receivable  decreased   approximately  $1.1  million  from
December  31, 1998 to March 31,  1999,  primarily in  connection  with  facility
dispositions.  During this same period,  the  allowance  for  doubtful  accounts
increased by approximately $1.3 million. See "-Results of Operations."  RainTree
anticipates  that its allowance for doubtful  accounts may continue to fluctuate
in the future and will depend, in large part, on the mix of revenues, as well as
the timing of payments by private,  third party and governmental  payors.  While
the Company  believes that the  allowance  for doubtful  accounts is adequate at
March 31, 1999,  if the Company is not  successful  in  collecting  its accounts
receivable on a timely basis,  the Company will be required to further  increase
its provision for doubtful accounts.

CASH FLOWS FROM INVESTING AND FINANCING ACTIVITIES

     During the bankruptcy  proceedings,  RainTree  financed its working capital
needs out of its operating  cash flows and under the HCFP DIP  Facility,  an $11
million accounts  receivable-backed  revolving credit facility.  Interest on the
HCFP DIP  Facility  accrued at the prime rate plus 3.0%  (10.75% at December 31,
1998). As of January 31, 1999,  borrowings under the HCFP DIP Facility  amounted
to approximately $8.0 million.  On the Effective Date, the HCFP DIP Facility was
replaced  partially  with a new $7 million  revolving line of credit from Health
Partners (the "First  Line").  Interest on amounts  outstanding  under the First
Line  accrues at the prime rate plus  0.85%.  As of March 31,  1999,  borrowings
outstanding under the First Line totaled approximately $3.0 million, which based
on the level of eligible accounts receivable,  was the maximum amount that could
be borrowed at that time. On May 14, 1999,  the Company  entered into another $7
million line of credit with Health Partners (the "Second Line").  Total combined
borrowings  under the First  Line and Second  Line  cannot  exceed $12  million.
Availability  under the Second Line is subject to the Company having met certain
requirements,  including  sufficient  eligible accounts receivable and quarterly
financial  covenants  contained in the Omega Master Lease.  The Company believes
that it has met these covenant requirements as of March 31, 1999. Had the Second
Line  been in place on May 1,  1999,  the  Company  estimates  that its  maximum
borrowing level during the month, based on eligible accounts  receivable,  would
have been approximately $6-7 million combined under both lines of credit.

     Net cash used in investing  activities  in 1999 amounted to $1.1 million in
the first  quarter.  Routine  capital  expenditures  amounted  to  approximately
$846,000  and  approximately  $213,000  was  expended  for lease  and  insurance
deposits.

     Net cash provided by financing  activities  amounted to approximately  $3.5
million  in the  current  period,  primarily  as a result of a net  increase  in
borrowings under revolving lines of credit.

     At March 31, 1999,  RainTree had approximately  $74.1 million of total debt
and lease  financing  obligations.  The Company also has aggregate  minimum rent
obligations of approximately  $135 million (subject to certain increases) during
the remainder of the initial terms and first renewal periods under its operating
leases.

     The terms of certain of RainTree's debt and lease  obligations  require the
Company to meet certain  financial  and  reporting  covenants.  The terms of the
Omega Master Lease require that RainTree  maintain  specified  operating ratios,
levels of working  capital and net worth.  The Indenture for the Senior  Secured
Notes  includes  covenants  that  prohibit or limit asset  sales,  acquisitions,
incurrence of  additional  debt and liens,  the making of  restricted  payments,
affiliate  transactions,  engaging  in certain  mergers and  consolidations  and
entering new lines of business.  For example,  should  RainTree sell  collateral
securing the Senior Secured Notes, any cash proceeds from such sale must be used
to redeem Senior Secured Notes.

     The  Company's  future cash  requirements  and cash flow  expectations  are
closely  related  to  the  implementation  of  its  restructuring.  The  Company
generally  expects to meet its near future financing needs for the coming fiscal

                                       20
<PAGE>

year  principally  through its  revolving  line of credit.  However,  unexpected
increases  in costs or an  inability  to  increase  average  occupancy  and thus
revenues could have a material adverse effect on the Company's cash flows.

IMPACT OF THE YEAR 2000 ISSUE

     Some of RainTree's  information systems have  time-sensitive  software that
will not properly recognize the year 2000. Based on an on-going assessment,  the
Company has determined that it will be required to modify or replace significant
portions of its software so that its computer  systems  will  function  properly
with respect to dates in the year 2000 and  thereafter.  RainTree  believes that
with  modifications  to existing  software and conversions to new software,  the
Company  will be year 2000 ready by the end of 1999 and the year 2000 issue will
not pose significant operational problems for its computer systems.

     RainTree is in the process of completing a detailed  inventory and analysis
of computer hardware,  software and operating systems.  The Company will utilize
both  internal and external  resources to  reprogram,  or replace,  and test the
hardware  and  software  for year  2000  readiness.  The  scope of the year 2000
project also  encompasses  consideration  of potential  impacts on the Company's
business  operations.  The Company is reviewing internal business operations and
relationships  with  external  business  partners to assess the current level of
compliance.  The next step is to perform testing and develop  contingency  plans
with the goal of achieving year 2000 readiness by September 1999.

     During 1998 and the first quarter of 1999, RainTree replaced  substantially
all of its computer equipment in connection with implementation of the Plan. The
Company believes the new equipment is year 2000 compliant. The Company estimates
that the  incremental  cost to upgrade  existing  software  to make it year 2000
compliant will not exceed $150,000.

     RainTree has initiated formal communications with significant suppliers and
payors to determine the extent to which the Company's systems and operations are
vulnerable  to those third  parties'  failure to  remediate  their own year 2000
issues.  Examples of such  issues  include,  but are not limited to,  electronic
interfaces with external agents such as payors, suppliers and banks. The ability
of third parties with which RainTree  transacts  business to adequately  address
their year 2000 issues is outside the Company's control.  Although RainTree will
seek to replace  any of its  current  vendors who are unable to become year 2000
ready  in a  timely  manner,  there  can  be no  assurance  that  the  Company's
operations  will not be  adversely  affected  by the  ability of third  parties,
including the federal and state governments on which RainTree's operations rely,
to also manage the year 2000 issue.

     The Company will continue to assess each of its systems and their year 2000
readiness. At this time, the Company believes that appropriate actions are being
taken and expects to complete  its overall  year 2000  remediation  prior to any
anticipated  impact on its operations.  However,  there can be no assurance that
these  assumptions will be achieved,  and actual results could differ materially
from  those  anticipated.  Specific  factors  that  might  cause  such  material
differences  include,  but are not  limited  to,  the  availability  and cost of
personnel  trained in this area,  the ability to locate and correct all relevant
computer codes, third party modification plans and similar uncertainties.

LISTING OF COMMON STOCK

     RainTree is in the process of applying  for listing of the New Common Stock
on the Nasdaq Small Cap Market. However, the Company may not qualify for listing
on the Nasdaq  Small Cap  Market,  and there can be no  assurance  that any such
listing will be obtained.

ITEM 3 IS NOT APPLICABLE

                                       21
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     RainTree is, and may in the future be, party to  litigation  arising in the
ordinary  course of its business.  It is also  routinely  subject to surveys and
investigations by regulators and payors. There can be no assurance that Unison's
insurance coverage will be adequate to cover all liabilities occurring by reason
of such claims or  investigations  or that any such matters that are not covered
by insurance will not have an adverse effect on Unison's business.

     On May 28, 1998,  RainTree,  together  with 29 of its  subsidiaries,  filed
petitions for relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy
Court for the District of Arizona  (collectively,  the "RainTree  Debtors").  On
January 7, 1998, the BritWill Debtors (together with the RainTree  Debtors,  the
"Debtors")  filed  voluntary  petitions  for  relief  under  Chapter 11 with the
Bankruptcy  Court in the  District  of Arizona.  All 33 cases were  procedurally
consolidated  for  administrative  purposes and have been  jointly  administered
under Case No.  98-06583-PHX-GBN.  In November  1998,  the Plan was  accepted by
RainTree's creditors. Effective January 31, 1999, the Bankruptcy Court confirmed
RainTree's Plan and the Company emerged from bankruptcy.

     RainTree is a  defendant  in seven  consolidated  securities  class  action
lawsuits  pending in the United States  District Court in Phoenix,  Arizona (the
"Federal  Action"),  and a securities class action lawsuit pending in California
Superior  Court  (the  "State  Action")  (collectively,  the  "Securities  Class
Actions"). The Securities Class Actions arise from the Company's announcement on
March  11,  1997  that it would  be  restating  its  financial  results  for the
nine-month period ended September 30, 1996. A consolidated  amended class action
complaint  in the Federal  Action was filed on January 6, 1998 under the caption
MARTIN GROSSMAN, ET AL. V. UNISON HEALTHCARE  CORPORATION,  ET AL., USDC No. CIV
97-0583 PHX SMM. The State Action is captioned  JEFFREY D. VANDYKE V. CRUTTENDEN
ROTH, INC., WHEAT FIRST BUTCHER SINGER, INDIVIDUALLY AND AS REPRESENTATIVES OF A
DEFENDANT  UNDERWRITER  CLASS, AND BRUCE H. WHITEHEAD,  UNISON HEALTHCARE CORP.,
JOHN T. LYNCH, JR., TROUVER CAPITAL PARTNERS,  L.P., JERRY M. WALKER, PHILLIP R.
ROLLINS,  CRAIG R. CLARK,  AND PAUL J. CONTRIS,  Case No. 779111  (Orange County
Sup.  Ct.) (filed May 13,  1997).  The Federal  Action seeks damages for alleged
violations of federal and Arizona state  securities laws; the State Action seeks
damages for alleged  violations of the  California  state  securities  laws. The
broadest  class period is that alleged in the Federal  Action from  December 18,
1995 (the date of the Company's initial public offering) to May 30, 1997.

     The parties in the Federal  Action have reached a  settlement  in principle
that is  expected  to  resolve  both the  Federal  and  State  Actions  in their
entirety.  The  settlement  includes  a cash  payment by the  Company's  primary
insurer  amounting to $4.25  million and  1,000,000  shares of old Common Stock.
Under the Plan, old Common Stock was converted into warrants; under the proposed
settlement,  class members who are to receive RainTree shares will receive a pro
rata share of such warrants. The settlement was approved by the Bankruptcy Court
on December  30, 1998 and by the district  court in the Federal  Action on April
28, 1999.

     The Company and certain of its current and former officers and/or directors
were named as defendants in an action styled JOHN D. FILKOSKI,  ET AL. V. UNISON
HEALTHCARE CORPORATION, ET AL., filed in Colorado Superior Court on May 27, 1998
(the  "Colorado  Action").  The Colorado  Action  alleges causes of action under
Colorado common and statutory law in connection with the Signature  Acquisition.
The Colorado  Action arises out of the same general nexus of facts as alleged in
the Securities  Class Actions  described  above.  The plaintiffs are four former
shareholders of Signature  whose Signature  shares were acquired in exchange for

                                       22
<PAGE>

cash, notes and common stock on October 31, 1996. Essentially, plaintiffs allege
that the Company's  financial  statements  for the second and third  quarters of
1996  contained  false  and  misleading  statements  that  fraudulently  induced
plaintiffs  into entering into a merger  agreement with the Company.  Plaintiffs
further  allege that the Company failed to perform on certain  promissory  notes
made in connection  with the Signature  Acquisition.  Plaintiffs seek damages of
approximately  $3.2  million in  purported  actual  damages as well as  punitive
damages,  interest  and costs.  Plaintiffs  were  advised  that all  proceedings
against the Company,  including the Colorado Action,  were stayed as a result of
the Chapter 11 filing.

     On June 24, 1998,  plaintiffs  voluntarily  dismissed  the Company from the
Colorado Action. Plaintiffs subsequently filed a second amended complaint, which
did not name the Company but which did charge certain individual defendants with
acts of fraud, negligent misrepresentation and breach of fiduciary duty in their
capacities as current or former  officers and/or  directors of the Company.  The
Company  may be  required  to  indemnify  and/or  advance  defense  costs to the
individual  defendants.  The Company has an applicable insurance policy covering
the Colorado Action. Motions to dismiss the Colorado Action for lack of personal
jurisdiction  have been  filed by the  individual  defendants  (except  Jerry M.
Walker) and are pending before the court.  Mr. Walker filed a motion to stay the
Colorado Action pending plaintiffs' decision as to whether they will participate
in the settlement of the Securities Class Actions.

     On April 24, 1998, an action styled FRANCISCAN ELDERCARE CORPORATION,  INC.
V. SUNQUEST SPC, INC., UNISON HEALTHCARE CORPORATION,  INC. [SIC], JERRY WALKER,
PHILLIP  ROLLINS AND PAUL CONTRIS was filed in the Circuit Court of the State of
Oregon (County of Multnomah) (Case No. 9801-00050).  This action relates to four
nursing facilities that the Company previously leased from Franciscan  Eldercare
Corporation  ("FEC").  These leases were rejected by RainTree in the  Bankruptcy
Court.  The  action  alleges  breach  of  contract,  conversion  and  breach  of
promissory note against RainTree and Sunquest SPC, Inc., a RainTree  subsidiary,
and breach of guaranty  against  Messrs.  Walker,  Rollins and  Contris.  FEC is
seeking  damages  from the Company in the amount of at least $1.2  million  plus
attorney's fees,  interest and costs. This action was and continues to be stayed
as to the  Company  and  Sunquest  SPC,  Inc.  as a  result  of  the  bankruptcy
proceedings.

     On  May  4,  1998,  an  action  styled  HEALTHPRIME,   INC.,  HP/HEALTHCARE
ACQUIRORS,   INC.,  MARKLEYSBURG  HEALTHCARE  INVESTORS,  L.P.,  MARSHALL  MANOR
HEALTHCARE  SERVICES,  INC.,  AND  LAKE  CITY  NURSING  HOMES,  INC.  V.  UNISON
HEALTHCARE CORPORATION AND SUNQUEST SPC, INC. was filed in the Superior Court of
Fulton County, Georgia (Case No. E.68081). The action alleges breach of contract
related  to  a  nursing  facility  that  the  Company   previously  leased  from
Markleysburg  Healthcare  Investors,  Inc. and four nursing  facilities that the
Company  previously  managed on behalf of the plaintiff.  The facility lease was
rejected by RainTree in the Bankruptcy Court.  Plaintiffs are seeking a judgment
holding that the Company is entitled to no additional  management  fees relating
to the managed facilities and other unspecified  damages.  On November 11, 1998,
the Company filed an action in Bankruptcy Court (UNISON V. HEALTHPRIME,  INC. ET
AL.,  Adversary  Proceeding No.  98-808-GBN)  seeking to recover management fees
related to these  facilities  totaling $1.6 million plus interest and attorneys'
fees.

     On December 10, 1998, an action styled AMERICAN PROFESSIONAL HOLDINGS, INC.
[SIC] V. JOHN L. MAGUIRE,  W. JEROME MCGEE,  AND HAROLD N. MCKINNEY was filed in
the Bankruptcy Court (Adversary No. 98-861). American Professional Holding, Inc.
("Ampro"),  a wholly owned  subsidiary of RainTree,  was acquired on October 31,
1996.  Messrs.  Maguire,  McGee and McKinney are former officers,  directors and
stockholders of Ampro. The complaint alleges breach of contract related to loans
made by  Ampro  in June  1996  to the  Defendants  in the  aggregate  amount  of
$250,000.  These loans were due and payable in full on December  15,  1997.  The
Company is  seeking  damages in the amount of  $292,674,  which  represents  the
aggregate  principal amount of the loans plus accrued  interest,  and attorneys'
fees  and  costs.   Also  on  December  10,  1998,  an  action  styled  AMERICAN
PROFESSIONAL  HOLDING,  INC.  V.  ASSOCIATED  SOLUTIONS,  INC.  was filed in the
Bankruptcy Court (Adversary No. 98-862).  Associated Solutions,  Inc. ("ASI") is
an affiliate of Messrs.  Maguire,  McGee and  McKinney.  The  complaint  alleges
breach of  contract  related to a loan made by Ampro to ASI in March 1996 in the
amount of $600,000.  This loan was due and payable in full on December 15, 1997.

                                       23
<PAGE>

The Company is seeking damages in the amount of $781,106,  which  represents the
principal  amount of the loan plus accrued  interest,  and  attorneys'  fees and
costs.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

   2      Disclosure   Statement   in   Support  of   Debtors'   Joint  Plan  of
          Reorganization  Dated  August  10,  1998 and  Debtors'  Joint  Plan of
          Reorganization  Dated August 10  (incorporated by reference to Exhibit
          99.1 to Form 8-K filed on August 13, 1998)
  2.1     Disclosure  Statement in Support of Debtors'  First Amended Joint Plan
          of  Reorganization  Dated October 15, 1998 and Debtors'  First Amended
          Joint Plan of Reorganization  Dated October 15, 1998  (incorporated by
          reference to Exhibit 2.1 to the  Company's  1997 Annual Report on Form
          10-K)
  3.1     Certificate of Incorporation of RainTree  Healthcare  Corporation,  as
          amended  and  restated  (incorporated  by  reference  to  Exhibit 2 of
          Amendment No. 1 to the Form 8-A filed on April 8, 1999)
  3.2     Bylaws of RainTree  Healthcare  Corporation,  as amended and  restated
          (incorporated by reference to Exhibit 3 to Amendment No. 1 to the Form
          8-A filed on April 8, 1999)
  4.1     Indenture  dated as of January 31,  1999,  among  RainTree  Healthcare
          Corporation,  the  Guarantors  and Norwest  Bank  Minnesota,  National
          Association,  as Trustee  (incorporated by reference to Exhibit 4.1 to
          the Company's 1998 Annual Report on Form 10-K)
  10.1    First  Amendment  to Omega New Master  Lease,  dated as of February 1,
          1999,  among Omega  Healthcare  Investors,  Inc. and BritWill  Indiana
          Partnership,  BritWill  Investments I, Inc., BritWill  Investments-II,
          Inc.,  Amberwood  Court,  Inc.,  The Arbors Health Care Center,  Inc.,
          Brookshire House, Inc.,  Christopher Nursing Center,  Inc., Los Arcos,
          Inc.,  Pueblo  Norte,  Inc.,  and  Rio  Verde  Nursing  Center,   Inc.
          (incorporated  by  reference  to Exhibit  10.2 to the  Company's  1998
          Annual Report on Form 10-K)
  10.2    Revolving   Credit  Note  dated  February  8,  1999,   among  RainTree
          Healthcare Corporation, Sunquest SPC, Inc., Safford Care, Inc. Douglas
          Manor,  Inc.,  Cornerstone  Care,  Inc. and Arkansas,  Inc.,  and HCFP
          Funding,  Inc.  (incorporated  by  reference  to  Exhibit  10.3 to the
          Company's 1998 Annual Report on Form 10-K)
  10.3    Loan and Security  Agreement  dated  February 8, 1999,  among RainTree
          Healthcare Corporation, Sunquest SPC, Inc., Safford Care, Inc. Douglas
          Manor,  Inc.,  Cornerstone  Care,  Inc. and Arkansas,  Inc.,  and HCFP
          Funding,  Inc.  (incorporated  by  reference  to  Exhibit  10.4 to the
          Company's 1998 Annual Report on Form 10-K)
  10.4    Second  Amendment To Omega New Master  Lease,  dated as of February 2,
          1999 among Omega  Healthcare  Investors,  Inc.  and  BritWill  Indiana
          Partnership,  BritWill Investments-I,  Inc., BritWill  Investments-II,
          Inc.,  Amberwood  Court,  Inc.,  The Arbors Health Care Center,  Inc.,
          Brookshire House, Inc.,  Christopher Nursing Center,  Inc., Los Arcos,
          Inc.,  Pueblo  Norte,  Inc.,  and  Rio  Verde  Nursing  Center,   Inc.
          (incorporated  by  reference  to Exhibit  10.5 to the  Company's  1998
          Annual Report on Form 10-K)
  10.5    First  Amendment  To Omega New  Master  Lease  Guarantee,  dated as of
          February  2, 1999 among  RainTree  Healthcare  Corporation,  Signature
          Health  Care  Corporation,   BritWill  HealthCare  Company,   BritWill
          Investments-I,   Inc.,  Cedar  Care,  Inc.,  and  Sherwood  HealthCare
          Corporation in favor of Omega Healthcare Investors, Inc. (incorporated
          by reference to Exhibit 10.6 to the  Company's  1998 Annual  Report on
          Form 10-K)

                                       24
<PAGE>

  10.6    First  Amendment To Security  Agreement,  dated as of February 1, 1999
          among  Omega   Healthcare   Investors,   Inc.  and  BritWill   Indiana
          Partnership as successor in interest to BritWill  Investments-I,  Inc.
          (incorporated  by  reference  to Exhibit  10.7 to the  Company's  1998
          Annual Report on Form 10-K)
  10.7    Amended and Restated Security Agreement,  dated as of February 2, 1999
          among  Omega   Healthcare   Investors,   Inc.  and  BritWill   Indiana
          Partnership, BritWill Investments-II, Inc., Amberwood Court, Inc., The
          Arbors Health Care Center, Inc.,  Brookshire House, Inc.,  Christopher
          Nursing Center,  Inc., Los Arcos,  Inc.,  Pueblo Norte,  Inc., and Rio
          Verde Nursing Center, Inc.  (incorporated by reference to Exhibit 10.8
          to the Company's 1998 Annual Report on Form 10-K)
  10.8    Indiana Returned  Facilities  Agreement,  dated as of February 1, 1999
          among  Omega   Healthcare   Investors,   Inc.  and  BritWill   Indiana
          Partnership   (incorporated  by  reference  to  Exhibit  10.9  to  the
          Company's 1998 Annual Report on Form 10-K)
  10.9    Indiana  Returned  Facility  Note,  dated as of January 31, 1999 among
          Omega  Healthcare  Investors,  Inc. and BritWill  Indiana  Partnership
          (incorporated  by reference  to Exhibit  10.10 to the  Company's  1998
          Annual Report on Form 10-K)
  10.10   Indiana  Returned  Facility  Note  Guarantee,  dated as of January 31,
          1999 among RainTree Healthcare,  BritWill HealthCare Company and Omega
          Healthcare Investors, Inc. (incorporated by reference to Exhibit 10.11
          to the Company's 1998 Annual Report on Form 10-K)
  10.11   Indiana Returned Facilities Interim Management Agreement,  dated as of
          February 1, 1999 by and between  RainTree  Healthcare  Corporation and
          Omega Healthcare Investors, Inc. (incorporated by reference to Exhibit
          10.12 to the Company's 1998 Annual Report on Form 10-K)
  10.12   Amended Pledge Agreement,  dated as of February 2, 1999 by and between
          BritWill  HealthCare  Company  and Omega  Healthcare  Investors,  Inc.
          (incorporated  by reference  to Exhibit  10.13 to the  Company's  1998
          Annual Report on Form 10-K)
  10.13   Second Amended and Restated Pledge Agreement,  dated as of February 2,
          1999 by and between BritWill Investments-I,  Inc. and Omega Healthcare
          Investors,  Inc.  (incorporated  by reference to Exhibit  10.14 to the
          Company's 1998 Annual Report on Form 10-K)
  10.14   Promissory   Note  dated  as  of  January  31,  1999  among   RainTree
          Healthcare  Corporation,  American Professional  Holding,  Inc., Ampro
          Medical Services,  Inc., Gamma  Laboratories,  Inc.,  Memphis Clinical
          Laboratory,  Inc., Quest Pharmacies,  Inc., and David Kremser, Bernice
          Kremser,  Holly  Kremser,  Michael  Kremser,  Stanley  Kremser and Elk
          Meadows  Investments,  L.L.C.  (incorporated  by  reference to Exhibit
          10.15 to the Company's 1998 Annual Report on Form 10-K)
  10.15   BritWill  Acquisition  Promissory Note A dated as of January 31, 1999,
          among  RainTree  Healthcare   Corporation  and  BritWill   Investments
          Company,  Ltd.  (incorporated  by  reference  to Exhibit  10.37 to the
          Company's 1998 Annual Report on Form 10-K)
  10.16   BritWill  Acquisition  Promissory Note B dated as of January 31, 1999,
          among RainTree  Healthcare  Corporation and UNHC Real Estate Holdings,
          Ltd. (incorporated by reference to Exhibit 10.38 to the Company's 1998
          Annual Report on Form 10-K)
  10.17   Pledge   Agreement   effective   January  31,  1999,   among  RainTree
          Healthcare   Corporation   and  Norwest   Bank   Minnesota,   National
          Association  (incorporated  by  reference  to  Exhibit  10.39  to  the
          Company's 1998 Annual Report on Form 10-K)

                                       25
<PAGE>

  10.18   Registration  Rights  Agreement  dated as of January 31,  1999,  among
          RainTree  Healthcare  Corporation  and Morgan Stanley Dean Witter High
          Yield Securities,  Inc., Morgan Stanley Dean Witter Diversified Income
          Fund, Morgan Stanley Dean Witter Variable Investment Series-High Yield
          Portfolio,  High Income  Advantage  Trust II,  High  Income  Advantage
          Trust,  High Income  Advantage  Trust III,  Morgan Stanley Dean Witter
          Select Dimensions Investment  Series-The  Diversified Income Portfolio
          and Capital Research and Management Company (incorporated by reference
          to Exhibit 10.40 to the Company's 1998 Annual Report on Form 10-K)
  10.19   Security  Agreement  effective  January 31, 1999 by and between  Quest
          Pharmacies, Inc., Sunbelt Therapy Management Services,  Inc.(Arizona),
          Decatur Sports Fit & Wellness  Center,  Inc.,  Therapy Health Systems,
          Inc.,  Henderson & Associates  Rehabilitation,  Inc.,  Sunbelt Therapy
          Management Services,  Inc.(Alabama),  RainTree Healthcare  Corporation
          and Norwest Bank  Minnesota,  National  Association  (incorporated  by
          reference to Exhibit 10.41 to the Company's 1998 Annual Report on Form
          10-K)
  10.20   Security  Agreement  dated  as of  January  31,  1999  by and  between
          American  Professional  Holding,  Inc.  and  David  Kremser,   Bernice
          Kremser,  Holly  Kremser,  Michael  Kremser,  Stanley  Kremser and Elk
          Meadows  Investments,  L.L.C.  (incorporated  by  reference to Exhibit
          10.42 to the Company's 1998 Annual Report on Form 10-K)
  10.21   Stock Pledge Agreement  (American  Professional  Holding,  Inc.) dated
          January 31, 1999 by and between  RainTree  Healthcare  Corporation and
          David  Kremser,  Bernice  Kremser,  Holly  Kremser,  Michael  Kremser,
          Stanley Kremser and Elk Meadows Investments,  L.L.C.  (incorporated by
          reference to Exhibit 10.43 to the Company's 1998 Annual Report on Form
          10-K)
  10.22   Security  Agreement  dated as of January 31, 1999 by and between Ampro
          Medical  Services,  Inc. and David  Kremser,  Bernice  Kremser,  Holly
          Kremser, Michael Kremser, Stanley Kremser and Elk Meadows Investments,
          L.L.C.  (incorporated  by reference to Exhibit  10.44 to the Company's
          1998 Annual Report on Form 10-K)
  10.23   Stock Pledge  Agreement (Ampro Medical  Services,  Inc.) dated January
          31, 1999 by and between American  Professional Holding, Inc. and David
          Kremser,  Bernice Kremser,  Holly Kremser,  Michael  Kremser,  Stanley
          Kremser and Elk Meadows Investments, L.L.C. (incorporated by reference
          to Exhibit 10.45 to the Company's 1998 Annual Report on Form 10-K)
  10.24   Security  Agreement  dated as of January 31, 1999 by and between Gamma
          Laboratories,  Inc. and David Kremser, Bernice Kremser, Holly Kremser,
          Michael Kremser,  Stanley Kremser and Elk Meadows Investments,  L.L.C.
          (incorporated  by reference  to Exhibit  10.46 to the  Company's  1998
          Annual Report on Form 10-K)
  10.25   Stock Pledge  Agreement (Gamma  Laboratories,  Inc.) dated January 31,
          1999 by and between  American  Professional  Holding,  Inc.  and David
          Kremser,  Bernice Kremser,  Holly Kremser,  Michael  Kremser,  Stanley
          Kremser and Elk Meadows Investments, L.L.C. (incorporated by reference
          to Exhibit 10.47 to the Company's 1998 Annual Report on Form 10-K)
  10.26   Security  Agreement  dated  as of  January  31,  1999  by and  between
          Memphis Clinical Laboratory,  Inc. and David Kremser, Bernice Kremser,
          Holly  Kremser,  Michael  Kremser,  Stanley  Kremser  and Elk  Meadows
          Investments, L.L.C. (incorporated by reference to Exhibit 10.48 to the
          Company's 1998 Annual Report on Form 10-K)

                                       26
<PAGE>

  10.27   Stock  Pledge  Agreement  (Memphis  Clinical  Laboratory,  Inc.) dated
          January 31, 1999 by and between  RainTree  Healthcare  Corporation and
          David  Kremser,  Bernice  Kremser,  Holly  Kremser,  Michael  Kremser,
          Stanley Kremser and Elk Meadows Investments,  L.L.C.  (incorporated by
          reference to Exhibit 10.49 to the Company's 1998 Annual Report on Form
          10-K)
  10.28   Security  Agreement  dated as of January 29, 1999 by and between Quest
          Pharmacies,  Inc. and David Kremser,  Bernice Kremser,  Holly Kremser,
          Michael Kremser,  Stanley Kremser and Elk Meadows Investments,  L.L.C.
          (incorporated  by reference  to Exhibit  10.50 to the  Company's  1998
          Annual Report on Form 10-K)
  10.29   Stock Pledge  Agreement  (Quest  Pharmacies,  Inc.) dated  January 31,
          1999 by and between RainTree Healthcare Corporation and David Kremser,
          Bernice Kremser, Holly Kremser,  Michael Kremser,  Stanley Kremser and
          Elk Meadows Investments,  L.L.C. (incorporated by reference to Exhibit
          10.51 to the Company's 1998 Annual Report on Form 10-K)
  10.30   Sharing  Agreement  dated January 31, 1999,  by and between  Northwest
          Bank Minnesota, National Association, RainTree Healthcare Corporation,
          BritWill  Healthcare  Company,  BritWill Indiana Partnership and Omega
          Healthcare Investors, Inc. (incorporated by reference to Exhibit 10.52
          to the Company's 1998 Annual Report on Form 10-K)
  10.31   Employment  Agreement  dated as of April  28,  1999  between  RainTree
          Healthcare Corporation and Michael A. Jeffries
  10.32   Employment  Agreement  dated as of April  28,  1999  between  RainTree
          Healthcare Corporation and Jim Fields
  10.33   Employment  Agreement  dated as of April  28,  1999  between  RainTree
          Healthcare Corporation and Nir E. Margalit
  10.34   Employment  Agreement  dated as of April  28,  1999  between  RainTree
          Healthcare Corporation and Terry Troxell
  10.35   Third  Amendment  to Omega New Master Lease dated as of March 31, 1999
          by Omega  Healthcare  Investors,  Inc. as lessor and BritWill  Indiana
          Partnership, BritWill Investments-II, Inc., Amberwood Court, Inc., The
          Arbors Health Care Center, Inc.,  Brookshire House, Inc.,  Christopher
          Nursing Center,  Inc., Los Arcos,  Inc.,  Pueblo Norte,  Inc., and Rio
          Verde Nursing Center, Inc.
  10.36   Loan and Security  Agreement  dated May 11, 1999 by and among RainTree
          Healthcare Corporation,  BritWill Healthcare Company, BritWill Funding
          Corporation,  Cedar Care, Inc.,  Sherwood  Healthcare Corp.,  BritWill
          Investments-I,  Inc., BritWill Investments-II,  Inc., BritWill Indiana
          Partnership, Brookshire House, Inc., Christopher Nursing Center, Inc.,
          Amberwood Court, Inc., The Arbors Health Care Corporation,  Los Arcos,
          Inc., Pueblo Norte,  Inc., Rio Verde Nursing Center,  Inc.,  Signature
          Health Care Corporation,  Signature  Management Group,  Inc., and HCFP
          Funding, Inc.
  10.37   Revolving  Credit  Note  dated  May  11,  1999 by and  among  RainTree
          Healthcare Corporation,  BritWill Healthcare Company, BritWill Funding
          Corporation,  Cedar Care, Inc.,  Sherwood  Healthcare Corp.,  BritWill
          Investments-I,  Inc., BritWill Investments-II,  Inc., BritWill Indiana
          Partnership, Brookshire House, Inc., Christopher Nursing Center, Inc.,
          Amberwood Court, Inc., The Arbors Health Care Corporation,  Los Arcos,
          Inc., Pueblo Norte,  Inc., Rio Verde Nursing Center,  Inc.,  Signature
          Health Care Corporation,  Signature  Management Group,  Inc., and HCFP
          Funding, Inc.
  27      Financial Data Schedule (included only in the EDGAR filing)

                                       27
<PAGE>

     (b)  Reports filed on Form 8-K:

          None

ITEMS 2, 3, 4 AND 5 ARE NOT APPLICABLE.



                                   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.


                                          RAINTREE HEALTHCARE CORPORATION
                                                    (Registrant)



Date:   May 17, 1999                      /s/ JIMMY L. FIELDS
                                          --------------------------------------
                                          Jimmy L. Fields
                                          Executive Vice President and Chief
                                          Financial Officer (Principal Financial
                                          Officer)

                                         /s/ WARREN K. JERREMS
                                         ---------------------------------------
                                         Warren K. Jerrems
                                         Vice President and Chief Accounting
                                         Officer (Principal Accounting Officer)


                                       28