<PAGE>

                                   FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  For the quarterly period ended June 30, 2003

                                       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 0-21384

                          KAIRE HOLDINGS INCORPORATED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                      13-3367421
          --------                                      ----------
 (State or other jurisdiction of                     (I.R.S. employer
  incorporation or organization)                  identification number)

                8135 Clybourn Avenue Sun Valley, California 91352
               (Address of principal executive offices) (Zip Code)

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

--------------------------------------------------------------------------------
   (former name, address and former fiscal year, if changed since last report)

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 [ ]

State the number of shares  outstanding of each of the  Registrant's  classes of
common stock, as of the latest practicable date.

Class of Common Stock                          Outstanding at June 30, 2003
---------------------                          ----------------------------
$.001 par value                                883,484,683 shares


Transitional Small Business Disclosure Format Yes [ ] No [X]


<PAGE>

                                   FORM 10-QSB
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                           KAIRE HOLDINGS INCORPORATED

                                      Index


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
<S>                                                                                     <C>
         Item 1. Consolidated Financial Statements

                  Condensed Consolidated Balance Sheets at
                     December 31, 2002 and June 30, 2003 (unaudited)

                  Condensed  Consolidated  Statements of Operations  (Unaudited)
                          for the three months ended June 30, 2002 and 2003

                  Condensed Consolidated Statements of Operations (Unaudited)
                           for the six months ended June 30, 2002 and 2003

                  Condensed  Consolidated  Statements of Cash Flows  (Unaudited)
                     for the three months ended June 30, 2002 and 2003

                  Notes to Condensed Consolidated Financial Statements


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


PART II. - OTHER INFORMATION

         Item 1.  Legal Proceedings

         Item 2   Changes in Securities and Use of Proceeds

         Item 3   Defaults Upon Senior Securities

         Item 4.  Submission of Matters of a Vote to Security Holders

         Item 5   Other Information

         Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES
</TABLE>


<PAGE>


                           KAIRE HOLDINGS INCORPORATED
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE THREE AND SIX MONTHS ENDED
                                  JUNE 30, 2003



<PAGE>

                                 C O N T E N T S
--------------------------------------------------------------------------------



Consolidated Balance Sheets                                    1 - 2

Consolidated Statements of Operations                          3

Consolidated Statements of Cash Flows                          4 - 6

Notes to Consolidated Financial Statements                     7 - 23




<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2003 AND DECEMBER 31, 2002


                                     ASSETS

<TABLE>
<CAPTION>
                                                                  June 30, 2003  December 31, 2002
                                                                  -------------  -----------------
                                                                    (unaudited)     (audited)
Current assets
<S>                                                                 <C>             <C>
   Cash and cash equivalents                                        $   86,380      $   20,356
   Accounts receivable (net of allowance for doubtful accounts
     of $0 and $0 in 2003 and 2002, respectively)                        2,471          22,267
   Other receivables                                                   133,090         156,782
   Advances to shareholders                                              2,750              --
   Inventory                                                            92,500              --
   Deposits                                                             54,789          53,919
   Prepaid expenses                                                     52,726              --
   Current assets - discontinued operations, net                            --           4,553
                                                                    ----------      ----------

     Total current assets                                              424,706         257,877
                                                                    ----------      ----------

Other assets
   Property and Equipment, net of accumulated depreciation             158,289          27,305
   Goodwill                                                          2,906,985              --
                                                                    ----------      ----------

     Total other assets                                              3,065,274          27,305
                                                                    ----------      ----------

         Total assets                                               $3,489,980      $  285,182
                                                                    ==========      ==========
</TABLE>


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



                                       1
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                       JUNE 30, 2003 AND DECEMBER 31, 2002


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                         June 30, 2003        December 31, 2002
                                                                       -------------------  -----------------------
                                                                           (unaudited)             (audited)
 Current Liabilities
<S>                                                                             <C>                       <C>
   Accounts payable and accrued expenses                                        1,363,000                 754,875
   Income tax payable                                                               6,200                   4,800
   Loans payable                                                                  232,978                       -
   Notes payable - related parties                                                  5,296                     200
   Note payable - acquisition                                                   2,500,000                       -
   Payable to shareholders                                                         39,086                  27,618
   Liabilities of discontinued operations                                         698,816                 757,868
   Convertible notes - current portion                                            888,570                 878,266
                                                                       -------------------  -----------------------

     Total current liabilities                                                  5,733,946               2,423,627

                                                                       -------------------  -----------------------
       Total liabilities                                                        5,733,946               2,423,627
                                                                       -------------------  -----------------------

Stockholders' equity
   Common stock, $0.001 par value
     900,000,000 shares authorized; 883,484,863
     and 432,738,198 shares issued and outstanding, respectively                  883,485                 432,739
   Additional paid in capital                                                  37,160,494              37,032,335
   Accumulated deficit                                                        (40,287,945)            (39,603,519)
                                                                       -------------------  -----------------------

       Total stockholders' equity                                              (2,243,966)             (2,138,445)
                                                                       -------------------  -----------------------

         Total liabilities and stockholders' equity
                                                                        $       3,489,980   $             285,182
                                                                       ===================  =======================
</TABLE>

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


                                       2
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE AND SIX MONTHS ENDED JUNE, 2003 AND 2002


<TABLE>
<CAPTION>
                                                              Three months ended June 30,         Six months ended June 30,
                                                            --------------------------------- ----------------------------------
                                                                 2003             2002             2003              2002
                                                            --------------- ----------------- ---------------- -----------------
                                                             (unaudited)       (unaudited)      (unaudited)        (unaudited)
<S>                                                         <C>             <C>               <C>               <C>
Net revenues                                                $    1,777,233  $       435,703   $    2,260,642    $     1,134,586
Cost of goods sold                                              (1,589,615)        (609,614)      (2,054,661)        (1,171,877)
                                                            --------------- ----------------- ---------------- -----------------
     Gross profit                                                  187,618         (173,911)         205,981            (37,291)
                                                            --------------- ----------------- ---------------- -----------------

Operating expenses
   Salaries                                                        162,215          128,242          245,979            194,875
   Depreciation and amortization                                     9,484           22,055           25,571             38,104
   General and administrative                                      125,234          547,353          572,770            677,767
   Selling expense                                                     871            1,341            3,005              6,003
   Rent                                                             20,550           16,197           47,629             38,074
                                                            --------------- ----------------- ---------------- -----------------
     Total operating expenses                                      318,354          715,188          894,954            954,823
                                                            --------------- ----------------- ---------------- -----------------
Loss from operations                                              (130,736)        (889,099)        (688,973)          (992,114)
                                                            --------------- ----------------- ---------------- -----------------

Other income (expenses)
   Interest expense                                                (46,804)         (64,632)         (80,030)          (115,879)
   Miscellaneous income                                             20,511            7,341           27,705              7,341
   Shareholder fees                                                   (125)           1,260             (125)           (50,520)
                                                            --------------- ----------------- ---------------- -----------------

     Total other income (expenses)                                 (26,418)         (56,031)         (52,450)          (159,058)
                                                            --------------- ----------------- ---------------- -----------------

Loss from continuing operations before income taxes               (157,154)        (945,130)        (741,423)        (1,151,172)

Provision for income taxes                                            (654)               -           (1,454)              (600)
                                                            --------------- ----------------- ---------------- -----------------

Loss from continuing operations                                   (157,808)        (945,130)        (742,877)        (1,151,772)
                                                            --------------- ----------------- ---------------- -----------------

Discontinued operations
   (Loss) Income from operations of discontinued segment
     (net of income tax expense of $200 in 2003 and 2002)           16,658           54,680           16,458            648,860

   Gain on disposal of assets of discontinued segment
     (net of income tax expense of $0 in 2003 and 2002)                  -         (100,000)          41,993           (100,000)
                                                            --------------- ----------------- ---------------- -----------------

Net Loss
                                                            $     (141,150) $      (990,450)  $     (684,426)   $      (602,912)
                                                            =============== ================= ================ =================

(Loss) earnings per weighted average share of common stock
  outstanding
     From continuing operations                             $       (0.00)  $        (0.00)   $        (0.00)   $        (0.00)
     From discontinued operations                                    0.00            (0.00)             0.00              0.00
                                                            --------------- ----------------- ---------------- -----------------
       Total (loss) earnings per share                      $       (0.00)  $        (0.00)   $        (0.00)   $        (0.00)
                                                            =============== ================= ================ =================

Weighted-average shares outstanding -basic and diluted         883,484,863      344,574,808      698,542,938        338,367,993
                                                            =============== ================= ================ =================
</TABLE>

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


                                       3
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED JUNE, 2003 AND 2002


<TABLE>
<CAPTION>
                                                                                 2003               2002
                                                                          ------------------- -----------------

Increase (decrease) in cash and cash equivalents
<S>                                                                        <C>                 <C>
   Net loss                                                                $       (684,426)   $     (602,911)
   Adjustments to reconcile net loss to net cash used
      in operating activities
         Depreciation and amortization                                               25,571            38,104


         Amortization of warrant and bond issuance discount                          12,081            45,874
         Common stock issued for professional services                              299,944           120,733
         Common stock issued for payment of interest                                    324            11,946

         Loss on disposal of assets                                                       -               937

         (Income) loss from operations of discontinued operations                   (16,458)         (648,860)
         (Gain) Loss on disposition of assets of discontinued operations            (41,993)          100,000

         Change in net assets and liabilities of discontinued operations            (54,499)        1,142,960


         Other                                                                       27,335               370
         Non-cash other income                                                        5,541            (7,341)
                                                                          ------------------- -----------------

         Total adjustments to net income                                   $       (426,580)   $      201,812
                                                                          ------------------- -----------------

Cash flow from operating activities:
   Changes in operating  assets and  liabilities net of effects from
   purchase of entreMetrix, Inc.:
      Trade accounts receivable                                            $         67,227    $            -
      Deposits                                                                         (225)                -
      Other receivables and assets                                                   40,041                 -

      Prepaids                                                                       61,310                 -
      Inventory                                                                     (76,432)                -
      Income and sales tax payable                                                    1,400               800

      Accounts payable and accrued expenses                                         345,505           (25,796)
                                                                          ------------------- -----------------

             Cash flow generated by (used in) operating activities         $         12,246    $      176,816
                                                                          ------------------- -----------------

Cash flow from investing activities:
   Purchase of property and equipment                                      $         (5,232)   $            -
   Cash acquired in acquisition of entreMetrix, Inc.                       $         27,576    $            -
                                                                          ------------------- -----------------

             Net cash generated by (used in) investing activities          $         22,344    $            -
                                                                          ------------------- -----------------

Cash flow from financing activities:
   Proceeds from notes payable - shareholders                              $         11,468    $            -
   Payments on notes payable - shareholders                                               -          (203,958)
   Proceeds from loans                                                                7,435                 -
   Proceeds from notes payable - related parties                                      5,096                 -

   Short-term notes payable                                                           7,435                 -
                                                                          ------------------- -----------------
             Net cash generated by (used in) financing activities          $         31,434    $     (203,958)
                                                                          ------------------- -----------------
</TABLE>

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



                                       4
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002



<TABLE>
<CAPTION>
                                                                                 2003               2002
             Net (decrease) increase in cash                              ------------------- -----------------
<S>                                                                        <C>                 <C>
             and cash equivalents                                          $         66,024    $       (27,142)
                                                                          ------------------- -----------------

             Cash and cash equivalents at beginning of year                          20,356             62,707
                                                                          ------------------- -----------------

             Cash and cash equivalents at end of period                    $         86,380    $        35,565
                                                                          =================== =================
Supplementary disclosures of cash flow information
   Cash paid during the year for
      Interest                                                             $              -    $         5,398
                                                                          =================== =================
      Income taxes                                                         $              -    $         3,200
                                                                          =================== =================
</TABLE>


Supplemental schedule of non-cash investing and financing activities: During the
six months ended June 30, 2003, the Company entered into the following  non-cash
transactions:

   Issued  3,000,000  shares of common stock for  conversion  of $1,776 of notes
   payable, and $324 of accrued interest.

   Issued 182,738,202  shares of common stock for legal and consulting  services
valued at $299,944

<TABLE>
   In January 2003, the Company acquired assets of
      Sespe Pharmacy
<S>                                                                        <C>
          Inventory                                                        $         81,068
          Property and equipment                                                    100,000
                                                                          -------------------
             Assets acquired                                                        181,068
                                                                          -------------------

             Cash paid                                                              (65,000)
             Notes payable                                                         (116,068)
                                                                          -------------------
             Net                                                           $              -
                                                                          ===================

   In March 2003, the Company acquired entreMetrix, Inc. for 250 million shares
   of common stock and a note payable for $2.5 million
          Cash acquired in transaction                                     $         27,576
          Accounts receivable                                                           958
          Prepaid expenses and other assets                                         135,253
          Goodwill                                                                2,906,985
          Property and equipment                                                     51,323
          Accounts payable and accrued expenses                                    (262,620)
          Notes payable                                                            (109,475)
          Issuance of common stock - acquisition                                   (250,000)
          Note payable - acquisition                                             (2,500,000)
                                                                          -------------------
                                                                           $              -
                                                                          ===================
</TABLE>

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


                                       5
<PAGE>



                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002


In March 2003, the Company  returned $26,625 of vehicles under capital leases to
the lessors.

During  the six  months  ended  June 30,  2002,  the  Company  entered  into the
following non-cash transactions:

Issued  57,872,981  shares of common stock for  conversion  of $124,994 of notes
     payable, and $11,385 of accrued interest.

Issued 15,000,000  shares of common stock for  conversion of conversion of stock
     options for consulting services valued at $45,000


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


                                       6
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


1. Summary of Significant Accounting Policies

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

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

In 1999, the Company formed  YesRx.com,  Inc., an Internet  drugstore focused on
pharmaceuticals,  health and wellness and beauty products.  YesRx.com focuses on
selling drugs for chronic care as opposed to emergency  needs,  and works mainly
with the patient who has regular medication needs and requires multiple refills.

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

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

In January 2003, the Company,  through its subsidiary  Effective  Health,  Inc.,
purchased all tangible and intangible assets of Sespe Pharmacy, a privately held
company located in Fillmore, California. The total purchase price was $181,068.




                                       7
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


1. Summary of Significant Accounting Policies (continued)

On March 18,  2003,  the Company  completed  the purchase of  entreMetrix,  Inc.
("entreMetrix"),  a privately  held  professional  employment  organization,  by
acquiring all of the outstanding capital stock of entreMetrix,  Inc. for a total
purchase  price of  $2,750,000.  The  acquisition  was  accounted  for using the
purchase method of accounting and, accordingly,  entreMetrix, Inc.'s, results of
operations have been included in the consolidated financial statements since the
date of  acquisition.  The source of funds for the acquisition was a combination
of the Company's common stock and a note payable.


Principles of Consolidation

The unaudited  consolidated  financial  statements include the accounts of Kaire
and   its   wholly-owned   subsidiaries    (collectively   the   "Company"),   a
publicly-traded  company  listed  and  traded  on the  NASDAQ  Over the  Counter
Bulletin Board ("OTCBB").  The Company's  subsidiaries include Effective Health,
Inc. (dba Sespe  Pharmacy),  Classic Care,  Inc. (dba Classic Care Pharmacy) and
entreMetrix,  Inc.  Intercompany  accounts and transactions have been eliminated
upon consolidation.

The  consolidated  financial  statements  have been prepared in accordance  with
generally accepted accounting  principles for interim financial  information and
in accordance with the  instructions to Form 10-QSB and Rule 10-01 of Regulation
S-X. Accordingly, the financial statements do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  For  further  information,   refer  to  consolidated  financial
statements  and  footnotes  thereto for the fiscal  quarter ended June 30, 2003,
included herein. The consolidated  financial  statements include the accounts of
the Company and its majority-owned subsidiaries.  All inter-company transactions
were eliminated. The Company's fiscal year ends on December 31 each year.

The results of operations for such periods are not necessarily indicative of the
results  expected  for  the  full  fiscal  year or for any  future  period.  The
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements and related notes included in the Company's  Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2002.


Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  in the US  requires  management  to make  estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosures  of contingent  assets and  liabilities at the date of the financial
statements,  as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.  Significant
estimates  include  goodwill,  allowance for doubtful  accounts and  contractual
adjustments due to third-party contractual agreements.


                                       8
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


1. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

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


Concentration of Cash

The Company at times during the year  maintained  cash balances in excess of the
federally  insured  limit of $100,000 per  institution.  There were no uninsured
balances as of June 30, 2003 and December 31, 2002.


Revenue Recognition

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

Professional  employment  services  revenue is recognized at the payroll date of
the  customer or as services are  rendered.  The payroll fee is due prior to the
payroll date, but is not considered  revenue until the date of the payroll.  The
company  reports  gross income as the total cost of the invoice for the staffing
services rendered including gross payroll,  payroll taxes, workers compensation,
administrative  fees and delivery  fees.  Amounts  received prior to the payroll
payment date are classified as deferred revenue.


Net Client Revenue

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


Third-Party Contractual Adjustments

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




                                       9
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003



1. Summary of Significant Accounting Policies (continued)

Net Loss Per Share

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


Inventory

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


Goodwill

The Company  capitalized as goodwill the excess  acquisition costs over the fair
value of net assets  acquired,  in  connection  with  business  acquisitions  in
accordance  with  provisions  of SFAS No. 142,  "Goodwill  and Other  Intangible
Assets",  and accordingly  goodwill and intangible  assets with indefinite lives
are no longer amortized but instead tested for impairment at least annually. The
carrying  amount  of  goodwill  will  be  reviewed  periodically  based  on  the
undiscounted cash flows of the entities acquired over the remaining amortization
period.


Income Taxes

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




                                       10
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


1. Summary of Significant Accounting Policies (continued)

Fair Value of Financial Instruments

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


Comprehensive Income (Loss)

In June 1999,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 130, "Reporting  Comprehensive  Income" (SFAS
130).  This  pronouncement  establishes  standards  for reporting and display of
comprehensive  income (loss) and its components in a full set of general-purpose
financial statements. Comprehensive income consists of net income and unrealized
gains (losses) on  available-for-sale  securities;  foreign currency translation
adjustments;  changes in market  values of future  contracts  that  qualify as a
hedge;  and negative equity  adjustments  recognized in accordance with SFAS No.
87. The Company,  however,  does not have any components of comprehensive income
(loss) as defined by SFAS 130 and  therefore,  for the six months ended June 30,
2003 and 2002, comprehensive loss is equivalent to the Company's net loss.


Advertising Costs

The Company  expenses  advertising  and  marketing  costs as they are  incurred.
Advertising  and marketing costs for the six months ended June 30, 2003 and 2002
were $1,801, and $17,734,respectively.


Reclassifications

Certain  amounts in the 2002  financial  statements  have been  reclassified  to
conform  to the 2003  presentations.  These  reclassifications  had no effect on
previously reported results of operations or retained earnings.




                                       11
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


1. Summary of Significant Accounting Policies (continued)

Segment and Geographic Information

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


Other Accounting Pronouncements

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

In December  2002,  the FASB issued SFAS  No.148,  "Accounting  for  Stock-Based
Compensation - Transition and  Disclosure."  This statement  amends SFAS No.123,
"Accounting for Stock-Based  Compensation,"  to provide  alternative  methods of
transition for a voluntary change to the fair  value-based  method of accounting
for stock-based employee compensation. Pursuant to SFAS No.123, the Company will
continue to report pro forma expense  amounts for the fair market value of stock
options newly granted to employees.



2. Going Concern

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  The Company has a net working deficit of $5,196,384
for the six months  ended June 30,  2003.  Additionally,  the Company must raise
additional  capital to meet its working capital needs subsequent to the spin-off
of Classic  Care. If the Company is unable to raise  sufficient  capital to fund
its  operations  for the  Health  Advocacy  program,  it  might be  required  to
discontinue  operations.   These  factors  raise  substantial  doubt  about  the
Company's  ability  to  continue  as a going  concern.  In  view of the  matters
described above, recoverability of a major portion of the recorded asset amounts
shown in the accompanying  balance sheet is dependent upon the Company's ability
to generate sufficient sales volume to cover its operating expenses and to raise
sufficient capital to meet its payment obligations.  The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts,  or amounts and classification of liabilities that might
be necessary should the Company be unable to continue in existence.



                                       12
<PAGE>


                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


2. Going Concern (continued)

Management has previously  relied on equity financing sources and debt offerings
to fund  operations.  The Company's  reliance on equity and debt  financing will
continue,  and  the  Company  will  continue  to seek to  enter  into  strategic
acquisitions.



3. Accounts Receivable - Trade

In 2003 and 2002,  approximately  2% and 80% of net revenues  were derived under
federal and state third-party  reimbursement programs. These revenues are based,
in  part,  on  cost  reimbursement  principles  and are  subject  to  audit  and
retroactive adjustment by the respective  third-party fiscal intermediaries.  In
the opinion of management, retroactive adjustments, if any would not be material
to the financial position, results of operations or cash flows of the Company.

The  Company  provides  an  allowance  for  doubtful  accounts  based  upon  its
estimation  of  uncollectible  accounts.  The  Company  bases this  estimate  on
historical  collection  experience  and a review of the current  status of trade
accounts receivable. The DHS informed the Company in December 2002 that Medi-CAL
was withholding a 100% of its payments and Classic Care's  Medi-CAL  license was
being suspended, and the operations of Classic Care ceased in January 2003.



4. Inventories

Inventories  consist of  pharmaceuticals,  medical  supplies  and  equipment  of
$92,500 at June 30, 2003.  The Company  regularly  checks its  inventory for any
expired or obsolete pharmaceuticals.



5. Common Stock Transactions

The common stock transactions  during the six months ended June 30, 2003 were as
follows:

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

     o    During the period ending June 30, 2003, the Company issued  57,746,665
          shares of its  common  stock to  various  consultants  in lieu of cash
          payments for services  rendered.  The aggregate  value of services was
          $103,944.

     o    The Company  issued  140,000,000  shares of its common stock under the
          terms of the 2003 Legal and Consulting Services Plan. The common stock
          issued had an approximate market value of $196,000.



                                       13
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003



5. Common Stock Transactions (continued)

     o    The Company issued  250,000,000  shares of its common stock, which had
          an  approximate  market  value of  $250,000,  in  connection  with the
          acquisition of entreMetrix, Inc.

The common stock transactions  during the six months ended June 30, 2002 were as
follows:

     o    The  Company  converted  $127,240  in  convertible  notes  payable and
          $11,946  of  related  interest  into  59,862,127  shares of its common
          stock.

     o    The Company issued 850,000 shares of common stock, with a market value
          of  $24,625,   for  consulting   services  provided  to  the  Company.
          Additionally,  these three officers  converted their stock options for
          6,666,667 shares of common stock, and the Company recognized  $389,216
          in compensation expense.

     o    The Company  converted  stock  options into  54,970,000  shares of its
          common  stock  in  a  cash-less   conversion.   The  Company  recorded
          consulting expense of $120,733.


6. Related Party Transactions

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

Profit Ventures, Inc.

Mr. Joel Rubenstein was the Managing Director of Classic Care, and his spouse is
a shareholder in the Company.  Mr.  Rubenstein is also a trustee of the Shagrila
Trust,  which is the parent company of Profit  Ventures,  Inc. In 2000,  Classic
Care, entered into an agreement with Profit Ventures, Inc., to purchase products
from Classic  Care.  Sales to Profit  Ventures  were $0 and $201,954 for the six
months ended June 30, 2003 and 2002,  respectively.  Sales to Profit represented
0% of the Company's total revenue from continuing  operations for the six months
ended June 30, 2003 and 2002.



                                       14
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


7. Accounts Payable and Accrued Expenses

Accounts  payable and accrued  expenses at June 30, 2003, and December 31, 2002,
consisted of the following:

<TABLE>
<CAPTION>
                                                                            2003                  2002
                                                                       -----------------    ------------------
<S>                                                                    <C>                  <C>
         Accounts payable                                              $       184,037      $        113,221
         Accrued professional and related fees                                  85,055                75,055
         Accrued compensation and related payroll taxes                        233,587               233,587
         Accrued interest payable                                              412,444               394,599
         Other accrued expenses                                                447,877               400,540
                                                                       -----------------    ------------------

                    Total                                              $     1,363,000      $      1,217,002
                                                                       =================    ==================
</TABLE>

8. Convertible Notes Payable and Debentures

Convertible  debentures consists of the following at June 30, 2003, and December
31, 2002:

<TABLE>
<CAPTION>
                                                                                         2003                2002
                                                                                   -----------------    ----------------
<C>                                                                                <C>                  <C>
8% convertible  subordinated  debentures,  due in October 2002,  convertible into  $       390,000      $      390,000
shares  of  common  stock at any time  prior to  maturity.  Interest  is  payable
quarterly, and principal is due at maturity.

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

8% convertible subordinated debentures,  due in May 2002, convertible into shares
of common  stock at any time prior to  maturity.  Interest is payable  quarterly,
and principal is due at maturity.                                                          117,570             119,347

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

                                                                                           888,570             890,347

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

Total debt                                                                                 888,570             878,266

Less: current portion                                                                     (888,570)           (878,266)
                                                                                   -----------------    ----------------

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



                                       15
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


9. Income Taxes

The  significant  reason for the difference  between the customary  relationship
between  income tax  expense and  pre-tax  accounting  income for the six months
ended June 30, 2003,  was due to net operating loss  carryforwards  available to
offset  federal and state income  taxes.  For the six months ended June 30, 2003
and 2002,  the Company had recorded a valuation  allowance  against its deferred
tax assets, thus no deferred tax benefit was recorded.



10. Commitments and Contingencies

Litigation

Department of Health Services

The  Company is a provider  of  services  under  California's  Medicaid  program
("Medi-Cal"),  which  is  administered  by the  Department  of  Health  Services
("DHS").  In a letter dated  December  2002, DHS served notice to the Company of
DHS's intent to withhold  payment of claims  submitted  by the  Company,  and to
deactivate the Company's  Medi-Cal  provider  number,  effective  December 2002,
based on alleged  violations of the California Code of Regulations.  The Company
has provided documentary evidence to contest and rebut DHS's allegations.

Except as otherwise specifically  indicated above,  management believes that the
Company  doesn't  have any material  liability  for any  lawsuits,  settlements,
judgments,  or fees of defense counsel which have not been paid or accrued as of
June 30, 2003. However,  there can be no assurance that the Company will prevail
in any of the above  proceedings.  In  addition,  the Company may be required to
continue to defend itself,  resulting in substantial  additional expense. In the
event the  Company  is  unable  to pay the  defense  costs  associated  with the
foregoing,  an unfavorable  settlement or judgment could be awarded  against the
Company, which could have a material adverse effect upon the Company.


Other Litigation

The Company was involved in various legal  actions  arising in the normal course
of  business.  Such  matters did not have a material  effect upon the  financial
position of the Company.





                                       16
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


10. Commitments and Contingencies (continued)

Leases

Operating leases

The  pharmacy was located at 1429 South  Robertson  Blvd,  Los  Angeles,  CA and
required a monthly rental  payment of $4,500.  The term of the lease was six (6)
years and was scheduled to expire in March 2004. In December 2002,  Classic Care
Pharmacy vacated the facility.  The Company obtained a lease severance effective
December 4, 2002.  All of the  equipment,  office  equipment  and  furniture was
placed into the warehouse/office leased by the Company.

In June of 2002, the Company leased a 7,334-square-foot building located at 8135
Clybourne Ave, Sun Valley,  CA 91352, to serve as their  corporate  headquarters
and storage facility.  The lease is for a period of two years, ending June 2004,
with monthly lease payments of $3,420. The Company subleases on a month-to-month
basis  approximately  one half of the facility to Digital  Media  Group,  Inc, a
related company that is owned by the Company's CEO and Chairman, Steve Westlund.

entreMetrix  leased  offices  located  at 18662  MacArthur  Boulevard,  Floor 2,
Irvine,  CA under a  non-cancelable  operating  lease  agreement that required a
monthly rental payment of $630. This lease expired in December 2002. The company
continued to lease on a month-to-month basis through March 2003.

entreMetrix  relocated its offices to 18101 Von Karman Avenue,  Irvine,  CA. The
offices  are  leased  under a  non-cancelable  operating  lease  agreement  that
requires a monthly  rental  payment  of $3,600.  This lease term runs from April
2003 through March 2004.

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

Rent expense for the six-month  periods ended June 30, 2003 and 2002 was $47,629
and $38,074, respectively.


                                       17
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


10. Commitments and Contingencies (continued)

Employment Agreements

Chief Executive Officer Compensation

On April 1, 2000, Mr. Steve Westlund signed a three-year employment agreement.

Although Mr.  Westlund's  employment  agreement  states that his salary is to be
$8,333 per month,  his actual pay was deferred during the quarter.  Mr. Westlund
is entitled to be paid the balance of his monthly compensation in either cash or
equity.

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

The Company has accrued  amounts due under the above  compensation  agreement of
$222,540 as of June 30, 2003.


Consulting Agreements

The Company has various  consulting  agreements that provide for issuance of the
Company's common stock and/or stock options/stock  purchase warrants in exchange
for services  rendered by the consultants.  These agreements relate primarily to
financial and management consulting services, and professional services rendered
in connection  with the  Company's  acquisition  efforts.  During the six months
ended  June  30,  2002,  the  Company  issued  stock  options  convertible  into
30,000,000  shares of common  stock,  and  15,000,000  these stock  options were
converted into common stock during the three-month period ended March 31, 2002.

11. Earnings per Share

Earnings per share have been  calculated  using the weighted  average  number of
shares  outstanding  during each period.  Earnings per  share-dilutive  does not
include the effect of potentially  dilutive securities for the six-month periods
ended June 30,  2003 and 2002  respectively.  The loss from  operations  for the
three- and six-month periods ended June 30, 2003 and 2002, make these securities
anti-dilutive.



                                       18
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003

12. Discontinued Operations

In December 2002, the Company  decided to discontinue  operations at its Classic
Care  subsidiary,  a pharmacy,  and conduct a voluntary  dissolution  of Classic
Care. In May 2002, the Company  transferred its long-term care services business
to the original  shareholders  of Classic  Care.  The expected  disposal date of
Classic Care is May 2003. Classic Care's sales for the six months ended June 30,
2003 and 2002,  were $8,266 and $6,684,997,  respectively.  The Company does not
anticipate  significant  operating loss during the phase-out period. The results
of Classic  Care's  operations  have been reported  separately  as  discontinued
operations in the Statements of Operations.  Prior period  financial  statements
for 2002 have been  restated  to present  the  operations  of the  division as a
discontinued operation.

In the six months ended June 30, 2003,  the Company  recognized a loss of $0 due
to the disposal value of the inventory.

The net assets  (liabilities) of the discontinued  operations have been recorded
at  their  estimated  net  realizable   value  under  the  caption  "Net  assets
(liabilities) of discontinued  operations" in the accompanying Balance Sheets at
June 30, 2003, and December 31, 2002, and consist of the following:

<TABLE>
<CAPTION>
                                                                         2003                 2002
                                                                   -----------------    -----------------
<S>                                                                <C>                  <C>
           Inventories                                             $             -      $         3,000
           Property and equipment, net                                           -                1,553
                                                                   -----------------    -----------------
            Total assets                                                         -                4,553
                                                                   -----------------    -----------------

           Accounts payable                                               (685,050)            (674,240)
           Accrued liabilities                                             (13,766)             (13,766)
           Capital leases                                                        -              (69,862)
                                                                   -----------------    -----------------
           Total liabilities                                              (698,816)            (757,868)
                                                                   -----------------    -----------------
           Net liabilities of discontinued operations              $      (698,816)     $      (753,315)
                                                                   =================    =================
</TABLE>


13. Purchase of Assets of Sespe Pharmacy

Effective  January 26, 2003, the Company concluded its agreement to purchase all
the tangible and intangible assets of Sespe Pharmacy,  a privately held company,
for a total cost of $181,068.  The Company had opened escrow in 2002, and made a
deposit of $40,000.  The final  purchase  price  consisted  of (i)) a short-term
promissory  note in the amount of $116,068  due 120 days after,  and (ii) a cash
payment of $65,000. Under the terms of the agreement,  the Company purchased the
Sespe Pharmacy name, all inventory, office and pharmacy equipment, furniture and
fixtures.

The   acquisition   was  recorded  using  the  purchase  method  of  accounting.
Accordingly,  the purchase price has been allocated to the assets acquired based
on the estimated fair values at the date of acquisition.  The operating  results
of this  acquisition  are  included  in the  Company's  Consolidated  Results of
Operations from the date of acquisition.



                                       19
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


13. Purchase of Assets of Sespe Pharmacy

The following  table  presents the allocation of the purchase  price,  including
related acquisition costs, to the assets and liabilities acquired:


Inventory                              $ 81,068
Property and equipment                  100,000
                                       --------
    Total purchase price               $181,068
                                       ========

14. Acquisition of entreMetrix, Inc.

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

entreMetrix is a Southern  California-based  company, and is a national provider
of  administrative  employer and financial  support services to small businesses
primarily   operating  in  the  medical,   life  sciences  and   high-technology
industries.  Additionally,  entreMetrix  provides outsourced human resources and
financial  support  staff.  The  acquisition  will be  accounted  for  under the
purchase method,  whereby the purchase price will be allocated to the underlying
assets and  liabilities  based on their  estimated  fair values.  The  resulting
goodwill  from this  transaction  is  currently  estimated  at  $2,906,985.  The
goodwill  estimate is preliminary,  pending the results of an audit, and further
financial analysis. entreMetrix commenced operations in July 2002.

The following table presents the allocation of the acquisition  cost,  including
professional  fees and other related  acquisition  costs, to the assets acquired
and liabilities assumed:

Cash and cash equivalents                                         $   27,576
Accounts receivable                                                      958
Other current assets                                                 134,608
Property and equipment                                                51,323
Goodwill                                                           2,906,985
Other noncurrent assets                                                  645
                                                                  ----------
      Total assets                                                $3,122,095

Accounts payable and accrued expenses                             $  262,620
Notes payable                                                        109,475
                                                                  ----------
      Total liabilities                                           $  372,095
                                                                  ----------

      Total acquisition costs                                     $2,750,000
                                                                  ==========


                                       20
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


14. Acquisition of entreMetrix, Inc. (continued)

The  allocation  of the purchase  price is based on  preliminary  data and could
change when final valuation information is obtained.

The following (unaudited) pro forma consolidated results of operations have been
prepared as if the acquisition of  entreMetrix,  Inc. had occurred at January 1,
2002:

<TABLE>
<CAPTION>
                                                                       June 30, 2003          June 30, 2002
                                                                     -------------------    ------------------
<S>                                                                  <C>                    <C>
    Sales                                                            $       2,260,642      $      1,134,586
    Net income (loss) from continuing operations                     $        (228,380)     $       (813,449)
    Net income (loss)                                                $        (211,722)     $       (754,998)

    Net earnings (loss) per share from continuing operations         $           (0.00)     $          (0.00)
                                                                     ===================    ==================
    Net total earnings (loss) per share                              $           (0.00)     $           0.00
                                                                     ===================    ==================
</TABLE>


The pro forma  information is presented for  informational  purposes only and is
not necessarily indicative of the results of operations that actually would have
been achieved had the  acquisitions  been consummated as of that time, nor is it
intended to be a projection of future results.

15. Company's  Operations Are Classified Into Two Principal Reportable Segments:
Professional Employment Organization and Pharmacy Operations

The Company manages its operations through two business  segments:  professional
employment organization and pharmacy operations.

The Company evaluates  performance based on net operating profit.  The operating
segments do not share staff or  facilities.  Additionally,  no materials  and/or
services  are  provided  to one  operating  segment by the  other.  The costs of
operating  each  segment  are  captured  discretely  within  each  segment.  The
Company's  property  and  equipment,  inventory,  and  accounts  receivable  are
captured and reported discretely within each operating segment.



                                       21
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


15. Company's  Operations Are Classified Into Two Principal Reportable Segments:
Professional Employment Organization and Pharmacy Operations (continued)

Summary financial information for the two reportable segments is as follows:

<TABLE>
<CAPTION>
                                                                   2003                     2002
                                                            --------------------    ----------------------
             Pharmacy Operations:
<S>                                                         <C>                     <C>
                 Net sales                                  $           525,028     $          1,130,346
                 Operating gain (loss)                                  (92,258)                (545,064)
                 Property and equipment                                  85,210                        -
                 Accounts receivable                                          -                  215,694
                 Inventory                                               92,500                        -

             Professional Employment Operations:
                 Net sales                                  $         1,727,193     $                  -
                 Operating gain (loss)                                 (118,000)                       -
                 Property and equipment                                  44,625                        -
                 Accounts receivable                                      2,471                        -
                 Inventory                                                    -                        -
</TABLE>




16.  Amendment to Certificate of  Incorporation to Decrease Number of Authorized
Shares

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



                                       22
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


17. 2003 Consulting and Legal Services Plan

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

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

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

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



18. Subsequent Events

The Company  issued  15,000,000  shares of its common stock to a consultant  for
providing management and financial consulting services.  The market value of the
services received were $22,500.




                                       23
<PAGE>

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


                                Plan of Operation

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

Short Terms Goals

     o    Complete the re-capitalization of Kaire.

     o    Achieve full integration of recent acquisitions

     o    Continue marketing efforts to build revenue.

     o    Redeem the outstanding convertible debentures.

     o    Develop next generation of support and benefit programs.

Long Term Goals

     o    Introduce next generation programs and services.

     o    Establish  internet based  national  program  support and  information
          network

     o    Integrate next generation support and benefit programs.

Our work force is  expected  to stay flat or  increase at a rate equal to actual
increases of our business operations.

In our opinion  sufficient  working  capital  will be  available  from  internal
operations  and from  outside  sources  during the next  twelve  months  thereby
enabling us to meet our  obligations  and  commitments  as they become  payable.
Historically,  we have been  successful in our efforts to secure working capital
from  private  placements  of common  stock  securities,  bank debt,  loans from
private investors and the exercise of warrants for common stock.

Results of Operations


      Three and Six Months Ended June 30, 2003 Compared to June 30, 2002

For the three and six months ended June 30, 2003,  revenues  were  approximately
$1,777,233  and  $2,260,642  respectively,  for an  increase of  $1,341,530  and
$1,126,056  respectively  for the same period in 2002. The increase is primarily
due to the acquisition of Entremetrix.

Cost of goods sold for the three and six month  period  ending June 30, 2003 was
$1,589,615  and  $2,054,661  respectively,  for an increase  of $980,001  and of
$882,784  over the same periods in 2002.  This  increase is primarily due to the
acquisition of Entremetrix.

Gross  profit for  products and services was $187,618 and $205,981 for the three
and six months  ended June 30, 2003,  an increase of $361,529 and $243,272  over
the same prior periods.  The gross profit  percentage rate for the three and six
month  ended June 30, 2003 was 10.6% and 9.1%  respectively  compared to a gross
profit percentage loss of 40% and 3.3% for the same period prior year.

Operating  expenses  for the three and six month  period ended June 30, 2003 was
$318,354 and $894,954 respectively for decrease of $396,834 and $89,869 from the
same period prior year. The decrease is mainly  attributable to the reduction of
General and  Administrative  expenses of $422,119 and $104,997 for the three and
six month ended June 30, 2003 compared to the same prior  periods in 2002.  This
decrease  is  slightly  offset by an increase in salaries of $33,973 and $51,104
for the three and six month ended June 30, 2003.  Interest expense the three and
six month period ended June 30, 2003 was $46,804 and $80,030  respectively for a
decrease of $17,828 and $35,849 for the  comparable  three and six month  period
prior year. The decrease is due to a reduction of the convertible debt.



                                       24
<PAGE>

No  provision  was made for Federal  income tax since the  Company has  incurred
significant  net operating  losses from  inception.  Through June 30, 2003,  the
Company  incurred  a net  operating  loss  for  tax  purposes  of  approximately
$684,426.  The net operating  loss carry  forward may be used to reduce  taxable
income through the year 2013. The Company's tax returns have not been audited by
the Internal Revenue Service. The carry forward amounts may therefore be subject
to audit and adjustment.  As a result of the Tax Reform Act, the availability of
net operating loss carry forwards can be deferred,  reduced or eliminated  under
certain circumstances.  Net operating losses in the State of California were not
available  for use during 1992 and the carry forward  period has generally  been
reduced from fifteen years to five years beginning in 1993.

Liquidity and Capital Resources

The Company's  revenues have been insufficient to cover acquisition  costs, cost
of revenues and operating expenses. Therefore, the Company has been dependent on
private  placements of common stock  securities,  bank debt,  loans from private
investors  and the  exercise  of  common  stock  warrants  in order  to  sustain
operations.  In  addition,  there can be no  assurances  that  private  or other
capital will  continue to be  available,  or that revenues will increase to meet
the Company's cash needs,  or that a sufficient  amount of the Company's  common
stock or other  securities can or will be sold or that any common stock purchase
options/warrants will be exercised to fund the operating needs of the Company.

On June 30, 2003 the Company  had assets of  $3,489,980  compared to $285,182 on
December 31, 2002, an increase of $3,204,798.  The increase  mainly  consists of
$2,906,985 of goodwill due to the Entremetrix acquisition, and increases in PP&E
of $130,984  and prepaid  expenses of $52,726 due to the  acquisitions  of Sespe
Pharmacy  and  Entremetrix.  The  Company  had a total  stockholders'  equity of
$(2,243,966) on June 30, 2003 compared to equity of $(2,138,445) on December 31,
2002, an increase of $105,521.

As of June 30, 2003 the Company's working capital position decreased  $3,143,490
from a negative $2,165,750 at December 31, 2002 to a negative $5,309,240 at June
30, 2003. The decrease is primarily a result of a $2,500,000 promissory note due
to the acquisition of EntreMetrix and an increase in loans payable of 232,978.

Net cash used by  operating  activities  for the six months  ended June 30, 2003
amounted to $12,246 which mainly  consists of the quarterly net loss  $(684,426)
offset by common stock  issued for  professional  service of $299,944,  accounts
receivables of $67,227 and accounts payables of $345,505.

Net cash used by investing  activities  for the six months  ending June 30, 2003
amounted to $22,344 which was cash acquired in the acquisition of Entremetrix of
27,576 offset by purchases of property and equipment of 5,232.

Financing  activities for the six months ending June 30, 2003 generated net cash
of $31,434, consisting of proceeds from issuing notes and a loan.

Going Concern

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  The Company has a net working deficit of $5,309,240
for the six months  ended June 30,  2003.  Additionally,  the Company must raise
additional  capital to meet its working capital needs subsequent to the spin-off
of Classic  Care. If the Company is unable to raise  sufficient  capital to fund
its  operations  for the  Health  Advocacy  program,  it  might be  required  to
discontinue  operations.   These  factors  raise  substantial  doubt  about  the
Company's  ability  to  continue  as a going  concern.  In  view of the  matters
described above, recoverability of a major portion of the recorded asset amounts
shown in the accompanying  balance sheet is dependent upon the Company's ability
to generate sufficient sales volume to cover its operating expenses and to raise
sufficient capital to meet its payment obligations.  The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts,  or amounts and classification of liabilities that might
be necessary should the Company be unable to continue in existence.

Management has previously  relied on equity financing sources and debt offerings
to fund  operations.  The Company's  reliance on equity and debt  financing will
continue,  and  the  Company  will  continue  to seek to  enter  into  strategic
acquisitions.




                                       25
<PAGE>

ITEM 3.  CONTROLS AND PROCEEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Within the 90 days prior to June 30, 2003, the Company carried out an evaluation
of the effectiveness of the design and operation of its disclosure  controls and
procedures  pursuant to Exchange Act Rule 13a-14. This evaluation was done under
the supervision and with the participation of the Company's  President and Chief
Financial Officer. Based upon that evaluation, they concluded that the Company's
disclosure  controls and  procedures  are effective in gathering,  analyzing and
disclosing  information needed to satisfy the Company's  disclosure  obligations
under the Exchange Act.

CHANGES IN INTERNAL CONTROLS

There were no significant  changes in the Company's  internal controls or in its
factors that could  significantly  affect those  controls  since the most recent
evaluation of such controls.



                                       26
<PAGE>

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Patent Claim

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

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

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

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

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

On April 29, 2002, outside counsel contacted the DHS to discuss its findings and
present the  documentation  supporting  their  position.  DHS  informed  outside
counsel  that they would  have to follow  the  standard  appeal  process,  which
normally  requires  two or  more  months  to  complete.  Classic  Care  Pharmacy
instructed  outside  counsel  to seek an ex parte  temporary  restraining  order
against the DHS for their failure to show cause regarding their actions.  On May
8, 2002, in the Superior  Court for the state of  California,  the Court granted
Classic Care's ex parte request issuing a preliminary injunction against the DHS
and reinstated  Classic Care Pharmacy's  medical provider number.  The Court set
May 24, 2002 as the date for the DHS to show cause. On May 24, 2002, the DHS was
still not prepared to show cause. The court granted a 30-day extension.

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

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

H.D.  Smith  Wholesale  Drug  Company - Action for  breach of contact  and other
various causes of action

On April 2, 2003, H.D. Smith filed a complaint against Classic Care, Inc., Kaire
Holdings,  Inc.,  Sarit  Rubenstein,  Steven  Oscherwitz  and Larisa  Vernik for
various  causes of action  relating  amounts  owed for  certain  drugs that were
delivered to Classic Care. H.D. Barnes is seeking $430,205 plus interest.  Kaire
feels this is a Classic  Care issue and very  little if any of the amount  owned
relates to Kaire Holdings. This case is still in the discovery stage.




                                       27
<PAGE>

Item 2. Changes in Securities and Use of Proceeds

During the Quarter ending March 31, 2003, the Company  issued  securities  using
the exceptions available under the Securities Act of 1933 including unregistered
sales made pursuant to Section 4(2) of the Securities Act of 1933, as follows:

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


Item 3. Defaults Upon Senior Securities

None


Item 4. Submission of Matters of a Vote to Security Holders

The following  actions were taken pursuant to the written  consent of a majority
of our  shareholders,  dated March 28, 2003, in lieu of a special meeting of the
shareholders.  The  effective  date is expected to be  approximately  August 29,
2003.

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

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


Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K:


a) Exhibits

     31.1 Certification  of  the  Chief  Executive   Officer  pursuant  to  Rule
          13a-14(a) ( Section 302 of the Sarbanes-Oxley Act of 2002)

     31.2 Certification  of  the  Chief  Financial   Officer  pursuant  to  Rule
          13a-14(a) ( Section 302 of the Sarbanes-Oxley Act of 2002)

     32.1 Certification   of  the  Chief  Executive   Officer   pursuant  to  18
          U.S.C.ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

     32.2 Certification   of  the  Chief  Financial   Officer   pursuant  to  18
          U.S.C.ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002)


(b) Reports on Form 8-K:

         January 30, 2003           Item 2:  Acquisition of Sespe Pharmacy by
                                    Kaire's  subsidiary  Effective Health on
                                    January  23, 2003.



                                       28
<PAGE>

                                    Item  5.  Change  of  address  of  Corporate
                                    office to 8135 Clyborn  Avenue,  Sun Valley,
                                    California 91352.

         March 20, 2003             Item 2:  Acquisition of Entremetrix by
                                    Kaire's  subsidiary  YesRx.com on March 14,
                                    2003.




SIGNATURES

               Pursuant  to the  requirements  of  Section  13 or  15(d)  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.


                          KAIRE HOLDINGS INCORPORATED.
                                  (Registrant)


Date: August 19, 2003           By: /s/ STEVEN  R.WESTLUND
                                    ----------------------------------------
                                    Steven Westlund
                                    Chief Executive Officer, Chairman




                                       29