<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  September 30, 1999
                                             ---------------------

                                      OR

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

       For the transition period from _______________ to _______________

                        Commission file number  0-21384
                                               ---------

                          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)

     7348 Bellaire, North Hollywood, California                  91605
     ----------------------------------------------------------------------
      (Address of principal executive offices)                 (Zip Code)

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

               2139 Pontius Ave., Los Angeles, California 90025
      ------------------------------------------------------------------
  (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.

                                          Outstanding at
          Class of Common Stock           September 30, 1999
          ---------------------           ------------------
             $.001 par value              59,144,616 shares

        Transitional Small Business Disclosure Format  Yes ___  No  X
                                                                    -

                                      -1-
<PAGE>

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

                          KAIRE HOLDINGS INCORPORATED

                                     Index

PART I - FINANCIAL INFORMATION

     Item 1. Consolidated Financial Statements

             Condensed Consolidated Balance Sheets at
              December 31, 1998 and September 30, 1999 (unaudited)


             Condensed Consolidated Statements of Operations
              for the three and nine months ended September 30, 1998 (unaudited)
              and 1999 (unaudited)

             Condensed Consolidated Statements of Cash Flows
              for the nine months ended  September 30, 1998 (unaudited)
              and 1999 (unaudited)

             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 4. Submission of Matters of a Vote to Security Holders

     Item 5. Other Information

     Item 6. Exhibits and Reports on Form 8-K

SIGNATURES

                                      -2-
<PAGE>

                         PART I. FINANCIAL INFORMATION
                         -----------------------------

ITEM I. FINANCIAL STATEMENTS

                 KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                   December 31, 1998 and September 30, 1999


<TABLE>
<CAPTION>
                                    ASSETS
                                    ------

                                                 December 31,  September 30,
                                                     1998           1999
                                                 ------------  -------------
                                                                (unaudited)
<S>                                              <C>           <C>
Current assets
   Cash and cash equivalents                      $     6,331  $       5,287
   Accounts receivables, net                           55,260         47,855
   Inventory                                           70,042         70,042
   Prepaid expense                                     37,904         42,514
                                                  -----------  -------------

    Total current assets                              169,537        165,698

Furniture and equipment, net                           16,036            846
Other Assets
Deposits
Patents, net
                                                  -----------  -------------
    Total assets                                  $   185,573  $     166,544
                                                  -----------  -------------

                  LIABILITIES AND SHAREHOLDERS' DEFICIT
                  -------------------------------------

Current liabilities
   Notes payable                                       25,000         25,000
   Accounts payable and accrued expenses            1,531,065        941,720
                                                  -----------  -------------

       Total current liabilities                    1,556,065        966,720

Convertible notes payable                           1,240,100        326,000
                                                  -----------  -------------

                                                  -----------  -------------
     Total liabilities                              2,796,165      1,292,720
                                                  -----------  -------------
</TABLE>

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

                                      -3-
<PAGE>

                 KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                   December 31, 1998 and  September 30, 1999

<TABLE>
<CAPTION>
                                                  December 31,   September 30,
                                                      1998           1999
                                                  ------------   -------------
                                                                  (unaudited)
<S>                                               <C>            <C>
Shareholders' deficit
  Common stock, $0.001 par value
    authorized 400,000,000 shares,
    15,387,387 shares issued and outstanding
    in 1998 and 59,144,616 shares issued and
    outstanding in 1999                                 15,387          59,147

  Additional paid-in-capital                        28,086,714      30,220,830
  Accumulated deficit                              (30,712,744)    (31,399,235)
                                                  ------------    ------------

    Total Shareholders' Deficit                     (2,610,593)     (1,126,176)

Total liabilities and stockholders' deficit       $    185,572    $    166,544
                                                  ------------    ------------
</TABLE>

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

                                      -4-
<PAGE>

             INTERACTIVE MEDICAL TECHNOLOGIES LTD. AND SUBSIDARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 and 1999

<TABLE>
<CAPTION>
                                                 Three Months Ended                 Nine Months Ended
                                                    September 30,                     September 30,
                                                    -------------                     -------------
                                                 1998           1999                1998         1999
                                                 ----           ----                ----         ----
<S>                                         <C>            <C>                  <C>          <C>
REVENUES
     Products and Services                  $   79,742     $    61,928          $  305,483   $   198,374
     Lease Rentals                                   -               -                   -             -
                                            ----------     -----------          ----------   -----------
       Total Revenue                            79,742          61,928             305,483       198,374

Cost of Revenues                                35,719          33,798             137,873        54,504

Gross Profit                                    44,023          28,130             167,610       143,870

Operating Expenses
    Research and development                     1,088)            153                   0           153
    Selling, general and administrative         68,077         158,080             691,317       479,074
                                            ----------     -----------          ----------   -----------

       Total Operating Expenses                 66,989         158,233             691,317       479,227

                                            ----------     -----------          ----------   -----------
Loss from Operations                           (22,976)       (130,102)           (523,707)     (335,357)

Other Income and (Expense)
Interest expense                               (22,855)        (16,183)            (84,710)      (68,257)
Other Expenses                                                 (10,005)                          (25,804)
Below Market Note Conversion                         -        (427,100)                  -      (662,593)
Other Income                                                       683                   -       399,800
                                            ----------     -----------          ----------   -----------
   Total interest expense and other            (22,855)       (452,605)            (84,710)     (356,854)

Loss before provision for state
                                            ----------     -----------          ----------   -----------
                                               (45,831)       (582,708)           (608,417)     (692,210)

Provision for state income taxes                   400             400               1,200         1,200

Net Loss                                       (46,231)       (583,108)          ( 609,617)     (693,410)
                                            ----------     -----------          ----------   -----------

Basic Loss per Share                        $     0.03     $      0.02          $     0.08   $      0.03

Diluted Loss per Share                      $     0.03     $      0.02          $     0.08   $      0.03

Weighted average shares outstanding          1,659,501      27,929,434           7,446,109    22,033,808
</TABLE>

          See the accompanying notes to these consolidated statements

                                      -5-
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
             For the Nine Months Ended September 30, 1998 and 1999

<TABLE>
<CAPTION>

                                                   (Unaudited)  (Unaudited)
                                                      1998         1999
                                                   -----------  -----------
<S>                                                <C>          <C>
Cash flows from operating activities
Net Loss                                            $(609,617)   $(693,410)
Adjustments to reconcile net loss to net cash
 used in operating activities:
    Amortization and Depreciation                      42,684       15,190
    Common stock issued for services                  358,530      151,500
    Common stock issued for interest on notes          65,706        4,529
    Common stock issued for Convertible notes
    Expenses related to below-market stock                         662,593
    (Increase) decrease in:
    Accounts receivable                                15,799        7,405
    Lease receivable                                        -            -
    Prepaid expenses and other assets                   5,439       (4,610)
    Inventories
Increase (decrease) in:
    Accounts payable and accrued expenses            (174,914)    (589,345)
                                                    ---------    ---------

        Net cash used in operating activities        (296,378)    (391,044)
                                                    ---------    ---------

Cash flows from investing activities
    Purchase of furniture and equipment                     -            -
    Investment in affiliates                                -            -
                                                    ---------    ---------
        Net cash used in investing activities               -            -

Cash flows from financing activities
    Payments on notes payable                         (10,000)
    Proceeds from issuance of common stock            132,688      240,000
    Proceeds from issuance of convertible notes       160,000      150,000
                                                    ---------    ---------
        Net cash provided by financing activities     282,688      390,000
                                                    ---------    ---------
</TABLE>

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

                                      -6-
<PAGE>

                  KAIRE HOLDINGS INCORPORATED AND SUBSIDARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Six Months Ended September 30, 1998 and 1999

<TABLE>
<CAPTION>

                                                       (Unaudited)  (Unaudited)
                                                          1998         1999
                                                       -----------  -----------
<S>                                                    <C>          <C>

        Net decrease in cash and cash equivalents         (13,685)      (1,044)
                                                         --------      -------

Cash and cash equivalents, beginning of period             35,928        6,331
                                                         --------      -------

Cash and cash equivalents, end of period                 $ 22,243      $ 5,287
                                                         --------      -------
</TABLE>


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

                                      -7-
<PAGE>

                 KAIRE HOLDINGS INCORPORATED and SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)
                              September 30, 1999

1.   Significant Risks
     -----------------

     The Company has incurred net losses of $12,210,263 and $1,037,608 for the
years ended December 31, 1997 and 1998, respectively and an additional loss of
$609,617 and $693,410 for the nine months ended September 30, 1998 and September
30, 1999. The loss in 1997 resulted from a combination of failed acquisitions
and the related write down of investments. The continued loss in 1998 resulted
from remaining expenses related to the failed Kaire International acquisition
attempt coupled by continuing losses in operations. The losses in 1999 are a
result of a decrease in lab revenue coupled by non-operational costs incurred in
the ongoing effort to clean up the balance sheet plus the costs in developing
the Vitaplanet e-commerce web site. The accumulative effect of the continuing
losses have adversely affected the liquidity of the Company. Future losses will
likely negatively impact the Company's ability to raise future working capital.

     As of September 30, 1999, the Company had an accumulated deficit of
$31,399,235 and negative working capital of $801,022. In addition, the Company
remains subject to various business risks including but not limited to its
ability to maintain vendor and supplier relationships by paying bills when due,
and overcoming future and ongoing product development, distribution and
marketing issues.

     The Company's condensed consolidated financial statements have been
prepared on the assumption the Company will continue as a going concern. The
Company has suffered recurring losses from operations, has an accumulated
deficit, has negative working capital and faces product development and
distribution issues that raise substantial doubt about its ability to continue
as a going concern. The financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount of liabilities that might result should the Company be unable to
continue as a going concern.

     The Company, which was formerly known as Interactive Medical Technologies
Ltd., was incorporated in Delaware in 1986. The Company's base business provides
non-radioactive diagnostic products and laboratory analysis services to private
and government research facilities, academic centers, and hospitals engaged in
studying the effects of experimental drugs and/or surgical procedures have on
regional blood flow. The Company's products and services are sold through the
Company's E-Z Trac division.

     In 1993, the Company acquired Venus Management, Incorporated, ("VMI") which
was incorporated in New York on August 1, 1989. VMI's principle assets at the
time were two MRI systems, one which was leased to an MRI service provider
operating in New York and the second unit which was not operational. The non-
operational unit was returned to the finance company upon which VMI received a
release of claims agreement. Concerning the leased system, on or about March 1,
1995, VMI entered into a transfer of interest agreement with Siemens Credit
Corp., Medical Funding of America ("MFA") and Tri-county whereby Kaire gave its
corporate guaranty for all of Venus' obligations under this agreement. MFA
defaulted on the loan and on April 2, 1997 Siemens Credit

                                      -8-
<PAGE>

Corporation filed a civil action against Kaire for the accelerated amount due
plus costs. Subsequently, a Transfer of Interest Agreement was drawn up between
Venus Management, Siemens Credit Corporation and Medical Management, Inc. (NYSE
symbol CMI) whereby CMI would take over the lease and at the same time the legal
action was put on hold. (see legal Proceedings).

     In May 1996, the Company made a proposal to acquire Pastels International,
Inc. ("Pastels"), a private California personal care products company that
manufactured several beauty and skin care formulations. Prior to June 1997, the
Company decided not to proceed with the acquisition due to Pastels not meeting
certain key performance criteria. The company had advanced $302,856 to Pastels,
of which $272,437 was expensed in 1996 and the balance of $30,419 was expensed
in 1997.

     In September 1996, the Company attempted to enter into an agreement to
acquire Nutra Quest, Incorporated ("NQI"), a start-up network marketing company,
which distributed food supplement and nutrition consumer's products. Due to
difficulties with NQI's CEO and management, the anticipated business growth
expected by NQI never materialized which lead to the termination of NQI's CEO
during the fourth quarter of 1997. Subsequently, the NQI CEO seized the
Company's headquarters along with certain assets, thus permanently damaging
NQI's business. As a result of these of chain of events, NQI operations were
terminated during the fourth quarter of 1997. At that time any remaining
distributor downlines were transferred to Kaire International, Inc. and the
remaining NONI inventory was also transferred to Kaire International, Inc. The
Company funded NQI $2,003,728 of which $502,728 and $1,501,000 was expensed in
1996 and 1997 respectively. (see Legal Proceedings).

     In December 1997 the Company entered into an agreement (the "Agreement") to
acquire 80% of Kaire International, Inc. ("KII"), a network marketing firm based
in Longmont, Colorado, with 1997 annual sales of approximately $31,000,000. In
exchange for KII's Common Stock, the Agreement called for the Company to invest
an initial $1,000,000 plus Company Common Stock, and to subsequently provide
additional capital totaling $2,000,000 by the latter of February 15, 1998 or the
completion of KII's year-end audit. Determining that the Company was not going
to raise the additional capital needed by such dates, the Company and KII
entered into an agreement whereby the Company assigned approximately two thirds
of its equity position in KII to a third party, and the third party was to fund
KII $2,000,000. For consideration, the Company received an option from KII
repurchase the same number of KII shares that it had assigned to the third party
$2,000,000. The Company was unable to raise the funds and the option expired on
August 5, 1998. After the occurrence of these events, the Company owns 24% of
KII. A write down of $2,632,003 in the KII investment was reflected in the
Company's 1997 financial statements. KII filed an S-1 Registration Statement on
February 11, 1998 and an Amended S-1 Registration Statements on July 10, 1998
and October 23, 1998. The Registration statement provides for the selling of
1,000,000 shares of KII at $6.00 a share. The under writer is the May Davis
Group Incorporated, located in Baltimore, MD, and the attorney is Gusrae, Kaplan
& Bruno located in New York, NY. Subsequent to the filing of the amended
Registration Statement, KII decided not to proceed with the offering. On
December 10, 1998, Natural Health Trends Corp., ("NHTC") (NASDAQ: Symbol NHTCC),
announced it had signed an agreement as of November 24, 1998 to purchase certain
assets of KII for a combination of Series E and Series F Preferred stock,
Acquisition Warrants and a percentage of NHTC's net income for a period of five
years. On February 19, 1999, NHTC announced that the acquisition was completed.
It is not known what effect the NHTC agreement will have on Kaire Holding's
investment in KII, thus due to the uncertainty in Kaire Holding's ability to
recover its investment in KII, its investment in KII was written

                                      -9-
<PAGE>

off for the year ending December 1997.

     On February 19, 1998, Kaire Holdings, Incorporated changed its name from
Interactive Medical Technologies, Ltd., changed its NASDAQ OTC BBS symbol to
"KAHI" from "NONI" and reverse split its Common Stock at a ratio of seventy-five
(75) to one (1).

     On or about April 19, 1999, the Company introduced its internet e-commerce
web site www.vitaplanet.com, which provides for purchase, five categories of
nutritional products. The five categories are: 1) sport nutrition, 2) executive
nutritional - nutritional products for people in high stress positions, 3)
specialty nutrition - nutritional assistance for people with special physical
needs, 4) ayueveda nutrition - products that focus on the bodies main organs,
and 5) aphrodisiac products.

     The Company's e-commerce facility will allow the Company to receive
individual customer orders through its commercial site which will alert the
designated manufacturer and fulfillment center to process the order.

     The e-commerce business provides several operational advantages for the
company including no inventory cost or related capital expenditures, no need for
warehousing, shipping, large support staffs and the various related costs.

     The next phase of the Company's plan to enhance its web site has centered
around the developing of an e-commerce on-line pharmacy to serve the late baby
boomer and senior health care market segments. When fully implemented,
Vitaplanet will provide prescription medication products, real-time interactive,
cognitive pharmacy services and a wide range of health care resources that
target specific conditions arising from the complex interrelationships between
prescription medications, age, disease states, nutrition, personal care and
other variables related to senior health care. The grand reopening of the
Company's e-commerce on-line pharmacy has been announced to occur on November
15, 1999.

     Due to the above factors, losses are expected to continue at least for the
immediate future. In the event working capital is not available to the Company,
the Company would further reduce operations while accelerating the distribution
and sale of nutritional products

     The Company carries no direct product liability insurance, relying instead
on the coverage afforded by its distributors and the manufacturers from whom it
obtains products. These coverages directly protect the insured that pay the
premiums and only secondarily the Company. There is no assurance that such
coverages will adequately cover any claims that may be brought against the
Company. In addition, the Company does not have any general liability coverage.

2.   Summary of Significant Accounting Policies
     ------------------------------------------

          Basis of Presentation
          ---------------------

     The accompanying condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. Certain
matters raise substantial doubt about the Company's ability to continue as a
going concern. As discussed in Note 1, the Company operates under

                                      -10-
<PAGE>

extreme liquidity constraints and, because of recurring losses, increasing
difficulty in raising necessary additional capital. Management's plan in regard
to these matters is described above. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.

     In the opinion of the management the accompanying consolidated financial
statements contain all adjustments necessary (consisting of only normal
recurring accruals) to present fairly the financial position at September 30,
1999, the results of its operations for the three and nine months ended
September 30, 1999 and the cash flow for nine months ended September 30, 1999.
Certain information and footnote disclosures normally included in financial
statements that would have been prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission, although management of
the Company believes that the disclosures in these financial statements are
adequate to make the information presented therein not misleading. It is
suggested that these condensed financial statements and notes thereto be read in
conjunction with the financial statements and the notes thereto included in the
Company's December 31, 1998 Form 10-KSB.

     The results of operations for the nine months ended September 30, 1999 are
not necessarily indicative of the results of operations to be expected for the
full fiscal year ending December 31, 1999.

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

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

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

     The Company measures its financial assets and liabilities in accordance
with generally accepted accounting principles. 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.

     Stock Split
     -----------

     On or about February 19, 1998, the Company effected a 1-for-75 reverse
stock split of its common stock. All share and per share data have been
retroactively restated to reflect this stock split.

                                      -11-
<PAGE>

     Stock Options
     -------------

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

     Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of state income taxes currently due. No
federal income taxes are due as a result of the Company's net operating loss
carry forwards.

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

     In 1997, the Financial Accounting Standard Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS
No. 128 replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants, and convertible securities. Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share. Basic earnings per
share is computed using the weighted-average number of common shares outstanding
during the period. Common equivalent shares are excluded from the computation if
their effect is anti-dilutive.


3.   Capital Transactions, Convertible Notes Payable and Debentures

     On December 9, 1997, the Company entered into an agreement with KII, a
multi-level marketing company, and certain KII stockholders ("KII Stockholders")
that collectively owned 3,573,351 shares, or approximately 80%, of KII's issued
and outstanding common stock. Based on the terms of the agreement, the Company
issued 1,576,122 shares of its common stock to the KII Stockholders in exchange
for 3,573,351 shares of KII's common stock. The 1,576,122 shares issued by the
Company were valued at approximately $3,694,000 which is equal to the number of
shares issued multiplied by the market price of the Company's common stock at
the date of the transaction. In addition to the exchange of shares, the Company
committed to provide $3,000,000 in additional capital to KII, or the Company
would forfeit a portion of its KII equity holdings based on certain provisions
of the agreement. The Company provided $1,000,000 in additional equity capital
and committed to provide an additional $500,000, $500,000, and $1,000,000 by
December 25, 1997, January 15, 1998, and February 15, 1998, respectively.

     The Company was unsuccessful in obtaining the additional $2,000,000 and
sold to an unrelated third party 2,500,155 shares of its KII common stock for
nominal consideration. The purchaser of these shares agreed to provide KII with
the additional $2,000,000 in capital, thereby relieving the Company of

                                      -12-
<PAGE>

its additional $2,000,000 capital commitment described above. Additionally, KII
granted the Company an option to purchase 2,500,155 shares of KII common stock
for $2,000,000, which expired on August 5, 1998. The Company was not able to
raise sufficient funds to exercise this option.

     As a result of the above transactions, the Company's ownership in KII has
been decreased from 80% to approximately 24% (1,073,196 shares), which occurred
subsequent to December 31, 1997. A $2,632,000 impairment charge related to the
Company's investment in KII was recorded in the year ended December 31, 1997 due
to the Company's subsequent loss of ownership interest and the doubtfulness of
recovering this investment. Additionally, the Company provided a full valuation
charge on the remaining balance of the Company's investment in KII equal to
$2,062,035.

     During the fiscal year ended December 31, 1997, to raise capital, 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 and pursuant to Regulation S, as follows:

     For the period beginning on or about May 5, 1997 through December 31, 1997,
there were 25,566,804 shares (340,891 shares on a post reverse split basis) of
common stock sold issued pursuant to Section 4(2) of the Securities Act of 1933
and pursuant to Regulation S for approximately $1,222,639.

     For the period beginning May 23, 1997 through December 31, 1997, $441,500
of convertible promissory notes were converted into 7,354,321 shares (98,058
shares on a post reverse split basis) of common stock. The majority of these
shares were issued in reliance on Regulation S with the remainder made pursuant
to Section 4(2) of the Securities Act of 1933.

     1997 quarterly interest payments totaling $6,417.60 due on a convertible
promissory note held by the Wolas Family Trust were paid with 134,426 shares
(1,792 shares on a post reverse split basis) of the Company's common stock,
issued pursuant to Section 4(2) of the Securities Act of 1933.

     On December 18, 1997, 118,209,200 shares (1,576,123 shares on a post
reverse split basis) of the Company's common stock were issued to the
shareholders of Kaire International Inc., in exchange for at least 80% of Kaire
International's outstanding shares of common stock. The Company's common stock
were issued pursuant to Section 4(2) of the Securities Act of 1933.

     During October through December 1997, the Company issued 8% convertible
debentures due three years from the date of issuance. The debentures are
convertible beginning with the 41st day after issuance and at a conversion price
equal to 70% of the average closing bid price of the Company's common stock
during the last five days prior to the conversion date. In connection with the
issuance of these debentures, the Company recorded additional interest amounting
to $364,000 related to the beneficial conversion feature of the debentures. The
note holders have certain registration rights. At December 31, 1997, convertible
debentures outstanding aggregated to $850,000. These funds were issued to Kaire
International Inc. As of December 31, 1998, $225,000 remains to be converted.

     During the fiscal year ended December 31, 1998, the Company issued
securities using exemptions available under the Securities Act of 1933 including
sales made pursuant to Section 4(2) of the Securities Act of 1933 and pursuant
to Regulation S, as follows (please note that the below 1998

                                      -13-
<PAGE>

shares issued reflect the 75 to 1 reverse split that occurred on February 19,
1998).

     For the period January 1, 1998 through December 31, 1998 there were 337,153
shares of common stock sold issued pursuant to pursuant to Regulation S for
approximately $43,552.

     For the period January 1, 1998 through December 31, 1998, $1,089,100 of
convertible promissory notes were converted into 11,066,292 shares of common
stock. The majority of these shares were issued in reliance on Regulation S and
pursuant to Section 5 of the Securities Act of 1933.

     During the fiscal year ended December 31, 1998, 1,394,138 registered shares
of common stock were issued for consulting services rendered.

     Certain 1998 quarterly interest payments through December 30, 1998 totaling
$48,980 due on a convertible promissory note held by various note holders were
paid with 333,310 shares of the Company's common stock, issued pursuant to
Section 4(2) of the Securities Act of 1933.

     In February 1998, as a result of a Special Shareholder Meeting, the Company
effected a 1-for-75 reverse stock split of its common stock. All share and per
share data have been retroactively restated to reflect this stock split.

     As of December 31, 1998, there were approximately 608 shareholders of
record of the company's Common Stock.

     For the period January 1, 1999 through March 31, 1999, an option for
2,000,000 shares at $0.04 per share was exercised. The corresponding shares were
issued April 20, 1999.

     On March 10, 1999, 4,000,000 shares of common stock were issued to Peter
Benz, the then President of the Company for certain debt owed him for 1996 and
1997 services.

     On March 15, 1999, 3,000,000 shares of common stock were issued to Steve
Westlund, the Chief Operating Officer of the company for certain debt owed him
for 1996 and 1997 services.

     From April 1, 1999 through June 30, 1999, consultants were issued 6,100,000
shares of common stock and an ex-employee was issued 130,000 shares of common
stock via Form S-8 registration, $835,350 of convertible promissory notes were
converted into 20,883,750 shares of common stock and Certain 1999 quarterly
interest payments totaling $4,894 due on a convertible promissory note held by
various note holders were paid with 208,482 shares of the Company's common
stock, issued pursuant to Section 4(2) of the Securities Act of 1933.

     From July 1, 1999 through September 1, 1999, $377,400 of convertible
promissory notes held by various note holders were converted into 9,435,000
shares of the Company's common stock issued pursuant to section 4(2) of the
Securities Act of 1933.

4.   Acquisitions Attempts Terminated
     --------------------------------

     In 1996 and 1997, the Company attempted to enter into the Personal Care
Products area with Pastels

                                      -14-
<PAGE>

International, Inc. ("Pastels"), and the Nutritional Supplements area with Nutra
Quest Incorporated ("NQI") through acquisitions. Pastels manufactured several
beauty and skin care formulations sold commercially under the names AloeBare, a
depilatory, and Skinnergy, an anti-aging skin treatment. The Company ended its
involvement with Pastels in early 1997 as a result of Pastels not meeting
certain key criteria necessary for the acquisition to be successful. The company
had advanced $302,856 to Pastels, all of which has been expensed in full.

     NQI was a start up operation that the Company attempted to acquire in 1996
and 1997. NQI had a broad line of products with specific emphasis on nutritional
alternatives to coffee, tea and soda, herbal supplements to more efficiently
process calories, mineral and enzyme supplements for use as digestive aids,
athletic performance products containing a blend of amino acids and rice protein
as well as a personalized profile to evaluate the health and nutritional needs
of each individual. Due to difficulties with NQI's CEO and management, the
anticipated business growth expected by NQI never materialized and by December
1997 NQI operations were terminated. The total amount advanced Nutra Quest was
$2,003,728 of which $502,728 was written off in 1996 with the remainder of
$1,501,000 being written off in 1997.

     In December 1997 the Company entered into an agreement (the "Agreement") to
acquire 80% of Kaire International, Inc. ("KII"), a network marketing firm based
in Longmont Colorado with 1997 annual sales of approximately thirty one million
dollars ($31,000,000). In exchange for KII's Common Stock, the Agreement called
for the Company to invest an initial $1,000,000 plus Company Common Stock, and
to subsequently provide additional capital totaling two million dollars
($2,000,000) by the latter of February 15, 1998 or when their independent
accountants signed off on KII's year-end audit. Determining that the Company was
not going to raise the additional capital needed, the Company and KII entered
into a third party agreement whereby the Company assigned two thirds of its
position in KII to a third party and the third party was to fund KII two million
dollars ($2,000,000). For consideration, the Company received an option from KII
to purchase back the same number of KII shares that it had assigned to the third
party, for two million dollars ($2,000,000). The Company was unable to raise the
funds and the option expired on August 5, 1998. The Company currently owns 24%
of KII and therefore is reported on the equity basis. A write down of $2,632.003
in the KII investment was reflected in the Company's financial statements based
on the Company's assignment of approximately two thirds of its equity position
to a third party for a release of $2,000,000 funding obligation. On December 10,
1998, Natural Health Trends Corp., ("NHTC") (NASDAQ: Symbol NHTCC), announced it
had signed an agreement as of November 24, 1998 to purchase certain assets of
KII for a combination of Series E and Series F Preferred stock, Acquisition
Warrants and a percentage of NHTC's net income for a period of five years. It is
not known what effect the NHTC agreement will have on Kaire Holding's investment
in KII, thus due to the uncertainty in Kaire Holding's ability to recover this
investment, the Company wrote off its investment in KII of $4,694,038 for the
year ending December 1997.

     In March 1998, the Company attempted to enter into an agreement to acquire
35% of Potomac Worldwide, Ltd. ("Potomac"), a BVI company, and its primary
subsidiary, Nanjing Potomak Beauty & Care Co. Ltd. ("Nanjing") located in
Mainland China. Nanjing retails and wholesales health foods, household
chemicals, cosmetics and shape forming underware, The basis for this agreement
was to cross license products between Potomac and KII. Due to Kaire Holdings,
Inc.'s reduced equity position in Kaire International, Inc., the Potomac
agreement was not performed and

                                      -15-
<PAGE>

is considered terminated.

5.   Contingencies
     -------------

SEC Proceeding - Settled

     Prior to June 1992, the Company, in executing a private placement, issued
approximately 2,506,982 shares of the Company's common stock to individuals.
This placement was structured in reliance upon the advice of the Company's then
securities counsel and was believed that the shares issued qualified for
exemption from registration under federal and state securities laws. However,
certain subsequent resale's of these shares, commencing in June 1992, by the
original purchasers or their transferees, raised an issue as to whether a
technical distribution occurred that might have required either the original
shares issued or the shares resold to have been registered. All of the foregoing
resales were either directly effected or arranged for by Clark M. Holcomb.

     In October 1993, the Company filed a registration statement with the SEC to
register all of the foregoing 2,506,982 shares with the SEC. Never the less, the
SEC investigated the above transactions and on October 1995, advised the Company
that it was filing a civil injunctive action against the Company, Dr. William
Shell and Clark M. Holcomb for alleged violations of the registration provisions
of the federal securities laws.

     The Company entered into a consent decree ("Decree") with the SEC in which
in the Company, without admitting or denying any wrongdoing, would be enjoined
from violating the registration provisions of the federal securities laws in the
future. The SEC accepted the Decree in June, 1997. No monetary penalties were
assessed against the Company.

Federal Trade Commission Proceeding - Settled

     The Seattle Regional Office of the Federal Trade Commission had advised the
Company that it believed the Company's fat sequesterant product, which was
marketed by KCD, a former licensee, under the name "SeQuester," had been
improperly represented in advertising claims, and that the sequesterant product,
when previously marketed by the Company under the name "Lipitrol", also was
improperly represented in advertising claims. (Note, this product is no longer
marketed by Kaire Holdings). On June 16, 1996 the FTC filed a complaint be filed
against the licensee, the Company and certain individuals in connection with the
foregoing. Subsequently the Company and the FTC agreed upon a proposed
settlement in which the Company would consent to a permanent injunction
prohibiting it from making misrepresentations relating to weight loss or weight
reduction products or services, or with respect to tests or studies relating to
such programs or services. In addition, the Company would pay consumer redress
to the FTC in an aggregate amount of $35,000 over a period of twelve months. The
Company's Board of Directors voted to accept the proposal in March 1996, which
was formally approved by the FTC in June 1997. Final payment was made to the FTC
on April 16, 1998.

Siemens Credit Corporation  - MRI Equipment Assigned to Third Party

     On or about February 19, 1992, Medical Funding of America ("MFA") leased to
Tri-County a

                                      -16-
<PAGE>

Siemens Mobile Magneton Impact MRI System with a Van. On or about June 24, 1992
Siemens and MFA entered into a loan and security agreement in the amount of
$2,019,496, which was, paid directly to Siemens Medical Systems, Inc. On or
about March 1, 1995 Siemens, MFA, Tri-County and Venus Management (an
Interactive Medical Technologies (Kaire Holdings) subsidiary ("Kaire")) entered
into a transfer of interest agreement whereby Kaire gave its corporate guaranty
of all of Venus' obligations under this agreement. Venus and MFA defaulted on
the loan and on April 2, 1997 Siemens Credit Corporation filed a civil action
for the accelerated amount due plus costs. This action is still pending. On or
about October 9, 1997, a Transfer of Interest Agreement was drawn up between
Venus Management, Siemens Credit Corporation and Medical Management, Inc.
("CMI") (NYSE: symbol CMI) whereby CMI would take over the lease. CMI took
possession of the MRI. All parties executed the agreement except Siemens who
continued to negotiate with CMI in an attempt to get CMI to pay all of the
arrearages owed Siemens. At present CMI and Siemens are still negotiating over
the terms of the agreement. It is the opinion of the Company's management that
its obligations under this agreement have been assigned and that Siemens will
not pursue this matter any further.

Nutra Quest Inc. - Counter Claim Settled

     On or about October 17, 1997, the CEO of Nutra Quest, Inc. ("CEO"),
considered a wholly owned subsidiary of Kaire Holdings (formerly Interactive
Medical Technologies, Ltd. (the "Company")) was terminated. On or about that
time, the CEO took possession of and removed certain company financial and
administrative records of the Company and disputed the Company's ownership of
Nutra Quest, Inc. The Company obtained a permanent injunction preventing CEO
from representing himself as Nutra Quest Inc. and filed a complaint concerning
ownership of Nutra Quest Inc. The CEO appealed the injunction and served the
Company a cross complaint in July 1998. Concerning the Appeal, Nutra Quest's
opening appellate brief was due on September 11, 1998. Concerning the Cross-
Complaint, on August 21, 1998, the Company filed the following motions; 1)
Demurrer to Cross-Complaint, 2) Motion to Strike Cross-Complaint and 3) Motion
to Dismiss Cross-Complaint. On November 3, 1998 the respective parties engaged
mediation and successfully and completely resolved all claims. The settlement is
a "walk away" for all involved and does not require payment or receipt of any
funds or transfer of any assets or property.

     The effect of the CEO's actions against the Company in 1998 permanently
damaged Nutra Quest's business to the extent that the Company terminated its
operation in December 1997. The amount invested in Nutra Quest was written off
in 1997.

M&A West, Inc. - Breach of Contract Claim Settled

     On or about July 2, 1998, M&A West, Inc. a Nevada corporation, filed a
Complaint against the Company claiming acts that constitute a breach of action.
M&A West, Inc. is a public relations firm that was contracted to help the
Company obtain additional funding through the creation of interest in our stock.
Kaire contends that M&A West did not perform as contracted and in turn filed an
answer and a counterclaim for return of compensation paid. The parties are
scheduled to attend Non-Binding Arbitration on March 29, 1999 where the parties
mutually decided not to pursue this matter and agreed to a "walk away"
settlement.

                                      -17-
<PAGE>

     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
September 30, 1999.

                                      -18-
<PAGE>

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

   The Company's base business is engaged in the manufacturing and marketing
diagnostic imaging products and services relating to blood flow research in
animals and the research and development of propriety diagnostic imaging
products and procedures for human applications that use existing imaging
equipment such as x-ray, CAT scan, MRI and ultra sound. The Company markets
three products, two of which are designed for animal blood flow studies, the E-Z
Trac Ultraspheres and the NuFlow fluorescent microspheres. The third product is
a service the Company provides for its clients which counts NuFlow fluorescent
microspheres used in the blood flow studies and measures regional blood flow
under laboratory conditions.

   The E-Z Trac Ultraspheres are microspheres designed for small research
studies measuring regional blood flow. The NuFlow fluorescent microspheres are
designed to measure regional blood flow for both small or large regional blood
flow research studies using E-Z Trac's Investigative Partner Service ("IPS") to
analyze the studies samples. The Company markets microsphere products to
pharmaceutical companies, universities, hospitals and other academic centers
engaged in regional blood flow studies on experimental drugs or surgical
procedures.

   On or about April 19, 1999, the Company introduced its internet e-commerce
site www.vitaplanet.com, which provides five categories of nutritional products.
The five categories are: 1) sport nutrition, 2) executive nutritional -
nutritional products for people in high stress positions, 3) specialty
nutrition - nutritional assistance for people with special physical needs, 4)
ayueveda nutrition - products that focus on the bodies main organs, and 5)
aphrodisiac products.

   The next phase of the Company's plan to enhance its web site has centered
around the developing of an e-commerce on-line pharmacy to serve the late baby
boomer and senior health care market segments. When fully implemented,
Vitaplanet will provide prescription medication products, real-time interactive,
cognitive pharmacy services and a wide range of health care resources that
target specific conditions arising from the complex interrelationships between
prescription medications, age, disease states, nutrition, personal care and
other variables related to senior health care. The grand reopening of the
Company's e-commerce on-line pharmacy has been announced to occur on November
15, 1999.

   In 1996 and 1997, the Company attempted to enter into the Personal Care
Products area with Pastels International, Inc. ("Pastels"), and the Nutritional
Supplements area with Nutra Quest Incorporated ("NQI") through acquisitions.
Pastels manufactured several beauty and skin care formulations sold commercially
under the names AloeBare, a depilatory, and Skinnergy, an anti-aging skin
treatment. The Company ended its involvement with Pastels in early 1997 as a
result of Pastels not meeting certain key criteria necessary for the acquisition
to be successful. The company had advanced $302,856 to Pastels, all of which has
been expensed in full.

   NQI was a start up operation that the Company attempted to acquire in 1996
and 1997. NQI had a broad line of products with specific emphasis on nutritional
alternatives to coffee, tea and soda, herbal supplements to more efficiently
process calories, mineral and enzyme supplements for use as digestive aids,
athletic performance products containing a blend of amino acids and rice protein
as well as a

                                      -19-
<PAGE>

personalized profile to evaluate the health and nutritional needs of each
individual. Due to difficulties with NQI's CEO and management, the anticipated
business growth expected by NQI never materialized and by December 1997 NQI
operations were terminated. The total amount advanced Nutra Quest was $2,003,728
of which $502,728 was written off in 1996 with the remainder of $1,501,000 being
written off in 1997.

   In December 1997 the Company entered into an agreement (the "Agreement") to
acquire 80% of Kaire International, Inc. ("KII"), a network marketing firm based
in Longmont Colorado with 1997 annual sales of approximately thirty one million
dollars ($31,000,000). In exchange for KII's Common Stock, the Agreement called
for the Company to invest an initial $1,000,000 plus Company Common Stock, and
to subsequently provide additional capital totaling two million dollars
($2,000,000) by the latter of February 15, 1998 or when their independent
accountants signed off on KII's year-end audit. Determining that the Company was
not going to raise the additional capital needed, the Company and KII entered
into a third party agreement whereby the Company assigned two thirds of its
position in KII to a third party and the third party was to fund KII two million
dollars ($2,000,000). For consideration, the Company received an option from KII
to purchase back the same number of KII shares that it had assigned to the third
party, for two million dollars ($2,000,000). The Company was unable to raise the
funds and the option expired on August 5, 1998. The Company currently owns 24%
of KII and therefore is reported on the equity basis. A write down of $2,632.003
in the KII investment was reflected in the Company's financial statements based
on the Company's assignment of approximately two thirds of its equity position
to a third party for a release of $2,000,000 funding obligation. On December 10,
1998, Natural Health Trends Corp., ("NHTC") (NASDAQ: Symbol NHTCC), announced it
had signed an agreement as of November 24, 1998 to purchase certain assets of
KII for a combination of Series E and Series F Preferred stock, Acquisition
Warrants and a percentage of NHTC's net income for a period of five years. It is
not known what effect the NHTC agreement will have on Kaire Holding's investment
in KII, thus due to the uncertainty in Kaire Holding's ability to recover this
investment, the Company wrote off its investment in KII of $4,694,038 for the
year ending December 1997.

   On February 19, 1998, Kaire Holdings, Incorporated changed its name from
Interactive Medical Technologies, Ltd., changed its NASDAQ OTC: BB symbol to
"KAHI" from "NONI" and reverse split its Common Stock at a ratio of one (1) to
seventy-five (75).

   In March 1998, the Company attempted to enter into an agreement to acquire
35% of Potomac Worldwide, Ltd. ("Potomac"), a BVI company, and its primary
subsidiary, Nanjing Potomak Beauty & Care Co. Ltd. ("Nanjing") located in
Mainland China. Nanjing retails and wholesales health foods, household
chemicals, cosmetics and shape forming underwear. The basis for this agreement
was to cross license products between Potomac and KII. Due to Kaire Holdings,
Inc.'s reduced equity position in Kaire International, Inc., the Potomac
agreement was not performed and is considered terminated.

                                      -20-
<PAGE>

Results of Operations

Three and Nine Months Ended September 30, 1998 Compared to September 30,
1999.

<TABLE>
<CAPTION>
                                              For the                   For the
                                         Three Months Ended        Nine Months Ended
                                            September 30,             September 30,
                                      ---------------------    ------------------------
                                         1998      1999          1998           1999
                                         ----      ----          ----           ----
<S>                                   <C>          <C>         <C>              <C>
($ Thousands)

Revenues - Products and Services
  Microspheres & Lab Services            $ 80      $  62         $ 305          $ 198
  Vitaplanet.com                            -          -                            -
                                         ----      -----         -----          -----
                                           80         62           305            198

  Cost of Revenues
  Microspheres & Lab Services              36         34           138             55
  Fat Sequestration - License Fees
      And Royalties                         -          -             -              -
                                         ----      -----         -----          -----
                                           36         34           138             55
Gross Margin Product & Services            44         28           167            144
                                         ----      -----         -----          -----
 </TABLE>

   The three and nine months ended September 30, 1999, revenues from products
and services were approximately $61,928 and $198,374, a decrease of 22% and 35%
from the same periods in 1998. The Decrease was due to a combination of
workforce reduction, decreased testing activity by the Company's current clients
and a change in focus of the Company's resources towards the e-commerce on-line
pharmacy.

   Gross profit for products and services was $28,130 and $143,870 for three and
nine months ended September 30, 1999, an decrease of $15,893 and 23,740 or 36%
and 14% over the same periods prior year. The decrease in gross margins are a
direct result of the decrease in revenue.

   Research and development expense for the three and nine month period ended
September 30, 1999 was $153, a decrease of approximately $953 from the
comparable 1998 periods. The decrease was due to no new R&D projects entered
into in 1999.

   SG&A expense increased to $158,080 from $68,077 for the three month period
ended September 30, 1999 and decreased to $479,074 from $691,317 for the nine
month period ended September 30, 1999. The three month increase is related to
the cost of obtaining outside consultants to assist in the programming and
design of the e-commerce web site. The decrease in the nine month figure is due
to large consulting expense incurred during the failed attempt to acquire Kaire
International during the first quarter of 1998.

                                      -21-
<PAGE>

   Interest expense for operations for the three and nine month period ended
September 30, 1999 was $16,183 compared to $68,257 for the comparable three
month period prior year and $63,384 compared to $84,710 for the comparable nine
month period prior year. The decrease is a result of converting a significant
amount of convertible notes into common stock during the first three quarters of
1999.

   No provision was made for Federal income tax since the Company has incurred
significant net operating losses from inception. Through September 30, 1999, the
Company incurred net operating losses for tax purposes of approximately
$693,410. The net operating loss carry forward may be used to reduce taxable
income through the year 2012. 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 September 30, 1999 the Company had assets of $166,544 compared to $185,573
on December 31, 1998. The Company had a total stockholders' deficit of
$1,126,176 on September 30, 1999 compared to a deficit of $2,610,593 on December
31, 1998, a decrease in the deficit of $1,484,417.

   As of September 30, 1999 the Company's working capital position increased
$585,506 from a negative $1,370,492 at December 31, 1998 to a negative $801,022,
primary a result of the paying up-to-date the payroll tax liabilities to the
state and federal government.

   In order to meet its current operating needs, the Company has cut all its
operations except for the products and services sold through its E-Z division,
including consolidation of operations to West Los Angeles, headcount reductions
and elimination of all consultants and financial advisors. Going forward, the
company's plan of operation is to continue its sale of its colored microspheres
and related laboratory and diagnostic services but focus most of its resources
on the enhancement as well as the promotion of its new e-commerce website
www.vitaplanet.com.

                                      -22-
<PAGE>

   Year 2000 Issue

     The Company has attempted to evaluate the impact of the year 2000 issue on
its business and does not expect the amounts, if any, to be expensed to be
material. No such costs have been expensed to date, since the Company uses off
the shelf software.

     Currently the Company anticipates commencing communication with its
significant vendors and customers to determine the extent that year 2000
compliance issues of such parties may effect the Company. At this time, the
Company believes there will be no disruption in business due to its customers'
or vendors' year 2000 readiness. The Company has not established a contingency
plan. There can be no guarantee that the systems of such other companies will be
timely converted without a material adverse effect on the Company's business,
financial condition or results of operations.



                          PART II.  OTHER INFORMATION
                          ---------------------------



   Item 1.        Legal Proceedings


SEC Proceeding - Settled

   Prior to June 1992, the Company, in executing a private placement, issued
approximately 2,506,982 shares of the Company's common stock to individuals.
This placement was structured in reliance upon the advice of the Company's then
securities counsel and was believed that the shares issued qualified for
exemption from registration under federal and state securities laws. However,
certain subsequent resale's of these shares, commencing in June 1992, by the
original purchasers or their transferees, raised an issue as to whether a
technical distribution occurred that might have required either the original
shares issued or the shares resold to have been registered. All of the foregoing
resales were either directly effected or arranged for by Clark M. Holcomb.

   In October 1993, the Company filed a registration statement with the SEC to
register all of the foregoing 2,506,982 shares with the SEC. Never the less, the
SEC investigated the above transactions and on October 1995, advised the Company
that it was filing a civil injunctive action against the Company, Dr. William
Shell and Clark M. Holcomb for alleged violations of the registration provisions
of the federal securities laws.

   The Company entered into a consent decree ("Decree") with the SEC in which in
the Company, without admitting or denying any wrongdoing, would be enjoined from
violating the registration provisions of the federal securities laws in the
future. The SEC accepted the Decree in June, 1997. No monetary penalties were
assessed against the Company.

                                      -23-
<PAGE>

Federal Trade Commission Proceeding - Settled

   The Seattle Regional Office of the Federal Trade Commission had advised the
Company that it believed the Company's fat sequesterant product, which was
marketed by KCD, a former licensee, under the name "SeQuester," had been
improperly represented in advertising claims, and that the sequesterant product,
when previously marketed by the Company under the name "Lipitrol", also was
improperly represented in advertising claims. (Note, this product is no longer
marketed by Kaire Holdings). On June 16, 1996 the FTC filed a complaint be filed
against the licensee, the Company and certain individuals in connection with the
foregoing. Subsequently the Company and the FTC agreed upon a proposed
settlement in which the Company would consent to a permanent injunction
prohibiting it from making misrepresentations relating to weight loss or weight
reduction products or services, or with respect to tests or studies relating to
such programs or services. In addition, the Company would pay consumer redress
to the FTC in an aggregate amount of $35,000 over a period of twelve months. The
Company's Board of Directors voted to accept the proposal in March 1996, which
was formally approved by the FTC in June 1997. Final payment was made to the FTC
on April 16, 1998.

Siemens Credit Corporation  - MRI Equipment Assigned to Third Party

   On or about February 19, 1992, Medical Funding of America ("MFA") leased to
Tri-County a Siemens Mobile Magneton Impact MRI System with a Van. On or about
June 24, 1992 Siemens and MFA entered into a loan and security agreement in the
amount of $2,019,496, which was, paid directly to Siemens Medical Systems, Inc.
On or about March 1, 1995 Siemens, MFA, Tri-County and Venus Management (an
Interactive Medical Technologies (Kaire Holdings) subsidiary ("Kaire")) entered
into a transfer of interest agreement whereby Kaire gave its corporate guaranty
of all of Venus' obligations under this agreement. Venus and MFA defaulted on
the loan and on April 2, 1997 Siemens Credit Corporation filed a civil action
for the accelerated amount due plus costs. This action is still pending. On or
about October 9, 1997, a Transfer of Interest Agreement was drawn up between
Venus Management, Siemens Credit Corporation and Medical Management, Inc.
("CMI") (NYSE: symbol CMI) whereby CMI would take over the lease. CMI took
possession of the MRI. All parties executed the agreement except Siemens who
continued to negotiate with CMI in an attempt to get CMI to pay all of the
arrearages owed Siemens. At present CMI and Siemens are still negotiating over
the terms of the agreement. It is the opinion of the Company's management that
its obligations under this agreement have been assigned and that Siemens will
not pursue this matter any further.


Nutra Quest Inc. - Counter Claim Settled

   On or about October 17, 1997, the CEO of Nutra Quest, Inc. ("CEO"),
considered a wholly owned subsidiary of Kaire Holdings (formerly Interactive
Medical Technologies, Ltd. (the "Company")) was terminated. On or about that
time, the CEO took possession of and removed certain company financial and
administrative records of the Company and disputed the Company's ownership of
Nutra Quest, Inc. The Company obtained a permanent injunction preventing CEO
from representing himself as Nutra Quest Inc. and filed a complaint concerning
ownership of Nutra Quest Inc. The CEO appealed the injunction and served the
Company a cross complaint in July 1998. Concerning the Appeal, Nutra Quest's
opening appellate brief was due on September 11, 1998. Concerning the Cross-
Complaint, on

                                      -24-
<PAGE>

August 21, 1998, the Company filed the following motions; 1) Demurrer to Cross-
Complaint, 2) Motion to Strike Cross-Complaint and 3) Motion to Dismiss Cross-
Complaint. On November 3, 1998 the respective parties engaged mediation and
successfully and completely resolved all claims. The settlement is a "walk away"
for all involved and does not require payment or receipt of any funds or
transfer of any assets or property.

   The effect of the CEO's actions against the Company in 1998 permanently
damaged Nutra Quest's business to the extent that the Company terminated its
operation in December 1997. The amount invested in Nutra Quest was written off
in 1997 (see financial statements for more detail).

M&A West, Inc. - Breach of Contract Claim Settled

   On or about July 2, 1998, M&A West, Inc. a Nevada corporation, filed a
Complaint against the Company claiming acts that constitute a breach of action.
M&A West, Inc. is a public relations firm that was contracted to help the
Company obtain additional funding through the creation of interest in our stock.
Kaire contends that M&A West did not perform as contracted and in turn filed an
answer and a counterclaim for return of compensation paid. The parties are
scheduled to attend Non-Binding Arbitration on March 29, 1999 where the parties
mutually decided not to pursue this matter and agreed to a "walk away"
settlement.

Ex-employee Files Various Claims against the Company - Settlement Reached May
1999

   On November 18, 1998, an ex-employee who was released from the Company on or
about January 1998 due to downsizing, filed suit against the Chief Executive
Officer and the Company for sexual harassment/discrimination, failure to
maintain a work environment free from harassment, wrongful
termination/constructive discharge in violation of public policy, breach of
implied-in fact contract, breach of covenant of good faith and fair dealing,
intentional infliction of emotional distress, negligence and retaliation. The
complaint was served the last week of December 1998.

   A settlement was reached on or about May 17, 1999 for $5,000 cash and 130,000
shares of common stock.

   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
September 30, 1999.

   The Company currently has no firm commitments for material capital
expenditures, with any such future commitments being dependent upon the
availability of funds. The Company does not anticipate that future compliance
with existing environmental and occupational safety regulations will have a
significant impact on its capital expenditures or on its financial condition or
future operating results.


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

   On or about October 1, 1997, a proposal to increase the number of authorized
shares to

                                      -25-
<PAGE>

400,000,000 for the purpose to provide for the merger with Kaire International,
Inc. was voted upon and authorized by a majority of Kaire Holdings, Inc.
shareholders.

   On or about January 30, 1998, a proposal to 1) reverse split the Company's
common stock up to and not to exceed a reverse ratio of seventy-five to one, 2)
amend the Company's Articles of Incorporation changing the Company name to Kaire
Holdings Incorporated and 3) changing the Company's NASDAQ symbol to KHI was
voted and authorized by a majority of Kaire Holdings, Inc. shareholders. These
changes became effective on February 19, 1998.

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

      (a)  Exhibits

           27  Financial Data Schedule

      (b)  The Company filed the following Reports on form 8-K:

           1.  Form 8-K dated  March 23, 1998: Items 4, 5 and 7.

           2.  Form 8-K dated April 7, 1999: Items 4 and 6.



                                  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: November 8, 1999     By: /s/ Steven R. Westlund
                               ---------------------------------
                               Steven Westlund
                               (Chief Executive Officer)



Date: November 8, 1999     By: /s/ OWEN M. NACCARATO
                               ---------------------------------
                               Owen M. Naccarato
                               (Chief Financial Officer)

                                      -26-