<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, 2001
                                                 -------------

                                       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)


             1429 Robertson Blvd.,  Los Angeles, California 90035
             ----------------------------------------------------
             (Address of principal executive offices)  (Zip Code)


       Registrant's Telephone number, including area code: (310) 273-5181
                                                           --------------

             7348 Bellaire Ave., North Hollywood California 91605
             ----------------------------------------------------
  (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, 2001
          ---------------------        ----------------------------
             $.001 par value                 162,037,851 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, 2000 and June 30, 2001 (unaudited)

              Condensed Consolidated Statements of Operations
                for the three months ended June 30, 2000 (unaudited) and 2001
                (unaudited)

              Condensed Consolidated Statements of Cash Flows
                for the three months ended June 30, 2000 (unaudited) and 2001
                (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 6.  Exhibits and Reports on Form 8-K

SIGNATURES

                                      -2-
<PAGE>

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


ITEM 1.  FINANCIAL STATEMENTS


                    KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                 June 30, 2001 and December 31, 2000 (Audited)

<TABLE>
<CAPTION>

ASSETS                                                           6/30/01                   12/31/00
------                                                         -----------              -------------
<S>                                                            <C>                      <C>
Current Assets
     Cash and Cash equivalents                                  $     3,261                $   311,716
     Accounts receivable, net of allowance for
        doubtful accounts of $397,362                             1,657,632                  1,046,682
     Inventory                                                      749,951                    385,219
     Deposits                                                         4,750                      4,750
     Other Current Assets                                           378,685                     14,179
                                                                -----------                -----------
           Total current assets                                   2,794,279                  1,762,546

Noncurrent Assets
     Debt issuance costs                                             76,541                     76,541
     Property and Equipment
           Net of Accumulated Depreciation                          268,026                    278,147
     Note Receivable - Related Party                                812,650                    280,500
     Investments                                                     30,028                     30,028
     Other Non-Current Assets                                         5,000                      5,000
     Goodwill, net                                                8,965,316                  9,202,267
                                                                -----------                -----------
                                                                 10,157,561                  9,872,483
           Total assets                                         $12,951,840                $11,635,029
                                                                ===========                ===========

</TABLE>

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


                                  (Continued)

                                      -3-
<PAGE>

                 KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                 June 30, 2001 and December 31, 2000 (Audited)

<TABLE>
<CAPTION>

LIABILITIES & STOCKHOLDER'S EQUITY                                 6/30/01                   12/31/00
----------------------------------                              ------------                -----------
<S>                                                             <C>                       <C>
Current Liabilities
     Accounts Payable and Accrued Expenses                      $ 1,854,753                $  1,960,029
     Income Tax Payable                                                 800                       4,000
     Due to Stason Biotech                                          175,000                     175,000
     Sales Tax Payable                                               19,415                       5,727
     Note Payable - Acquisition                                   1,074,881                   1,301,000
     Capital Leases-Short Term                                       30,734                      73,262
                                                               ------------                ------------
           Total Current Liabilities                              3,155,583                   3,519,018

Convertible Notes Payable and Debentures                          1,594,165                     821,000
Capital Leases-Long Term                                            166,374                     123,847
                                                               ------------                ------------
           Total Liabilities                                      4,916,122                   4,463,865
                                                               ------------                ------------
Stockholders'  Equity
     Common Stock, $0.001 par value                                 156,886                     117,765
        400,000,000 shares authorized; 126,765,036 and
        117,765,033 shares issued & outstanding, respectively

     Common Stock, Subscriptions Receivable                                                     (20,000)
     Additional Paid-In Capital                                  41,960,873                  40,671,855

     Current Earnings (Loss)                                       (483,585)                          -

     Accumulated Deficit                                        (33,598,456)                (33,598,456)
                                                               ------------                ------------
           Total Stockholders' Equity                             8,035,718                   7,171,164
                                                               ------------                ------------
                 Total Liabilities and Stockholders' Equity    $ 12,951,840                $ 11,635,029
                                                               ============                ============

</TABLE>

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

                                      -4-
<PAGE>

                 KAIRE HOLDINGS INCORPORATED AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months Ended                             Six Months Ended
                                                                 June 30,                                      June 30,
                                                         2001                 2000                    2001                  2000
                                                     -----------           ----------             -----------            ----------
<S>                                                  <C>                 <C>                    <C>                    <C>
Revenues
     Products & Services                             $ 3,687,328           $  727,785             $ 7,223,858            $  788,844
                                                     -----------           ----------             -----------            ----------
           Total Revenues                              3,687,328              727,785               7,223,858               788,844

Cost of Goods Sold                                     2,507,036              464,914               5,619,923               495,984
                                                     -----------           ----------             -----------            ----------
Gross Profit                                           1,180,292              262,871               1,603,935               292,860
                                                     -----------           ----------             -----------            ----------
Operating Expenses
     Depreciation  and Amortization                      123,579                    0                 125,884
     Selling, general and administrative                 899,807              352,491               1,678,098               587,943
                                                     -----------           ----------             -----------            ----------
           Total Operating Expenses                    1,023,386              352,491               1,803,982               587,943
                                                     -----------           ----------             -----------            ----------
Profit from Operations (loss)                            156,906              (89,620)               (200,047)             (295,083)
                                                     -----------           ----------             -----------            ----------
Other Income (Expenses)
     Interest expense                                          0                    0                 (31,533)              (14,544)
     Other Expenses                                      (15,140)             (38,171)               (251,605)             (223,171)
                                                     -----------           ----------             -----------            ----------
           Total Other Income (Expenses)                 (15,140)             (38,171)               (283,138)             (237,715)
                                                     -----------           ----------             -----------            ----------

                 Loss before provision for state         141,766             (127,791)               (483,185)             (532,798)
                                                     -----------           ----------             -----------            ----------
Provision for state income taxes                             400                  400                     400                   800

Net Income (Loss)                                    $   141,366            ($128,191)              ($483,585)            ($533,598)
                                                     -----------           ----------             -----------            ----------
Basic Loss per Share                                        0.00                 0.00                    0.00                 (0.01)
                                                     ===========           ==========             ===========            ==========
Diluted Loss per Share                                      0.00                 0.00                    0.00                 (0.01)
                                                     -----------           ----------             -----------            ----------
Weighted average shares outstanding-basic            142,595,839           77,974,715             115,928,137            76,694,180
                                                     -----------           ----------             -----------            ----------
Weighted average shares outstanding-diluted          142,595,839           77,974,715             115,928,137            76,694,180
                                                     -----------           ----------             -----------            ----------
</TABLE>

                                      -5-
<PAGE>

                 KAIRE HOLDINGS INCORPORATED AND SUBSIDARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       For the Quarters Ended June 30,
<TABLE>
<CAPTION>


                                                                Unaudited                Unaudited
                                                                   2001                     2000
                                                               -----------              -----------
<S>                                                            <C>                      <C>
Net cash used in operating activities                            (808,833)                (352,720)

Cash flows from investing activities
    Purchase of furniture, equipment and leases                    42,527                 (254,528)
    Purchase of Goodwill                                                                  (690,794)
    Investment in affiliates                                                                (5,000)
           Net cash used in investing activities                   42,527                 (950,322)
                                                               ----------               ----------
Cash flows from financing activities
    Other Investments
    Due to Stason BioTech
    Note Receivable - related party                              (532,151)
    Proceeds from issuance of common stock                         90,000                1,459,599

    Proceeds from issuance of convertible notes                   900,000
                                                               ----------               ----------
           Net cash provided by financing activities              457,849                1,459,599

Net decrease in cash and cash equivalents                        (308,457)                 156,557
                                                               ----------               ----------
Cash and cash equivalents, beginning of period                    311,718                  130,668
                                                               ----------               ----------
Cash and cash equivalents, end of period                            3,261               $  287,225
                                                               ==========               ==========
    Common Stock Issued for professional Services                 590,000                   94,500
    Common Stock Issued for Interest on Notes                       9,164                   14,543
    Common Stock for Conversion of Notes Payable                                            26,546
    Common Stock Issued for other Compensation                    240,000                  240,000
    Charge related to beneficial conversion feature
        of Convertible Notes Payable/Debentures                    88,704                   10,000
                                                               ----------               ----------
                                                                  927,868                  385,589

</TABLE>

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

                                      -6-
<PAGE>

                  KAIRE HOLDINGS INCORPORATED and SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)
                                 June 30, 2001


1. Organization and Line of Business
------------------------------------

     Since its formation in Delaware in 1986, Kaire has continuously been
involved in the health care market segment as a provider of unique quantitative
laboratory products and services to researchers, and specialized pharmacy care
to defined disease communities.

     Kaire's primary business is providing specialized pharmacy care to patients
living in board and care facilities through its Classic Care Pharmacy, and also
to HIV patients through its YesRx Health Advocate Program.

YesRx.com, Inc:

     Kaire formed YesRx in November 1999 as an Internet based e-commerce
pharmacy and drug store that provided a full range of traditional pharmacy and
drug store services supported by extensive health related information and
content. Initially, YesRx focused on providing specialized pharmacy care to
select chronic patients within the senior health care market segment. This
quarter, Kaire scaled back its YesRx.com e-commerce operations, reducing
operating expenses and reducing in headcount.

Stason Biotech, Inc:

     In May of 2000, Kaire entered into a Letter of Intent with Stason USA, Inc,
which outlined a plan to merge Kaire's EZ-Trac Microspheres and Investigator
Partner Service laboratory business with a similar business operated by Stason
into a new entity.

     In January 2001, Kaire finalized this agreement and transferred the assets
of EZ TRAC, Inc. to a new corporation, Stason Biotech, Inc., in exchange for 40%
of the outstanding common stock of the new corporation. This transaction
reflects management's strategic plan to move the Company from providing medical
testing and laboratory analysis to becoming a provider of prescription
medication and supplies to senior citizens and individuals needing chronic care
medications.

     Stason Biotech initially will be engaged in the research and development of
compounds and testing measures for the treatment of pathogenic viral infections
and other medical applications related to solid form prescription drug formation
as well as providing contract research and development services to manufacturers
of pharmaceutical drugs.

Classic Care:

     In May of 2000, Kaire acquired Los Angeles-based Classic Care pharmacy,
which, provides specialized pharmacy care services to bed and board facilities
throughout Los Angeles and Orange Counties in California.

YesRx Health Advocate Program:

     In November 2000, Kaire introduced the YesRx Health Advocate Program; which
targets the unique pharmacy needs of specific chronic care communities. This
unique specialized pharmacy care program provides the tools, the knowledge and
support systems that enable HIV patients to manage a complicated

                                      -7-
<PAGE>

drug regime simply and effectively. The range of services provided by the Health
Advocate team members extends well beyond that of a typical pharmacy. To begin,
HIV Health Advocates typically come from the communities they serve. They
process a comprehensive understanding and working knowledge of the disease and
the drugs that treat it. They are counselors, they facilitating communication
between patients and their physicians, they help patients comply with their
medication regimes, they manage patient insurance claims, and more.

     The Health Advocate program is based at Classic Care Pharmacy in Los
Angeles. From that location the program serves HIV patients in Los Angeles and
Orange counties in Southern California.

NetFame:

     In July 2000, Kaire acquired the rights to the domain name "NetFame.com."
Kaire purchased the netfame.com domain address with the intention of developing
an interactive online exchange to facilitate communication between the planned
subscriber base consisting of emerging actors, models, and musicians, with
established industry agents. Due to current market conditions and the
unsuccessful attempts by potential NetFame competitors, Kaire has terminated the
NetFame.com operations.

Principles of Consolidation:

     The consolidated financial statements include the accounts of Kaire and its
wholly owned subsidiaries (collectively the "Company"). The Company's
subsidiaries include See/Shell Biotechnology, Inc., Venus Management, Inc.,
Effective Health, Inc, and Classic Care Pharmacy, Inc. Only Classic Care
Pharmacy, Inc, has current operations; the remaining subsidiaries are recorded
as dormant. intercompany accounts and transactions have been eliminated upon
consolidation.

     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 financial statements and disclosures included herein for the three
months ended June 30, 2001 and 2000 are unaudited. These financial statements
and disclosures have been prepared by the Company in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they 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 adjustments of a normal and
recurring nature) considered necessary for a fair presentation have been
included. Operating results for the three month periods ended June 30, 2001 and
2000 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2001.

     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

                                      -8-
<PAGE>

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 had 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.

     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
carryforwards.

     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. Convertible Debentures
-------------------------

     In January 2001, Kaire issued three convertible notes for $500,000, with
simple interest accruing at the annual rate of 8%. Interest payable on the Notes
shall accrue at the annual rate of 8% and be payable quarterly commencing April
1, 2001. The Holder shall have the right to convert the principal amount and
interest due under the notes into Shares of the Kaire's common stock. Kaire also
issued common stock purchase warrants with the right to purchase 1 million
shares of Common Stock of Kaire Holdings Incorporated.

     We anticipate that the $500,000 convertible debentures will be
converted into shares in accordance with the terms of these debentures.

     In May 2001, Kaire issued a convertible note for $400,000, with simple
interest accruing at the annual

                                      -9-
<PAGE>

rate of 8%. Interest payable on the Notes shall accrue at the annual rate of 8%
and be payable quarterly commencing September 30, 2001. The Holder shall have
the right to convert the principal amount and interest due under the notes into
common shares of Kaire. Kaire also issued common stock purchase warrants with
the right to purchase 1,500,000 shares of our commons stock.

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

   Short-Term Objectives:

      . Continue the regional expansion of the Health Advocate Program.

      . Continue the regional expansion of Classic Care's Business.

      .  Make acquisitions of strategic competitors.

      .  Develop strategic Joint Venture relationships.

      .  Execute a "Contract Management Agreement" with Stason Bio Technology

     In January 2001, Kaire made the decision eliminate certain YesRx.com e-
commerce operations to focus more of its resources on its Classic Care and
Health Advocate specialized pharmacy care operations. The decision was based on
a number of factors including the poor performance of the YesRx.com online
retail pharmacy, the slow growth projected for internet pharmacies over the next
few years, the high cost of customer acquisition and retention of internet
customers as well as the high costs associated with maintaining YesRx.com at a
competitive level. These actions have reduced operating expenses with having a
nominal impact on revenues. Going forward, YesRx.com will serve as a marketing
and organizational platform for the Health Advocate program.

   Long-Term Objectives :

      .  Expand the Health Advocate Program to a national level.

      .  Secure development products and business-opportunities for Stason
         Biotech.

     There is no expected or planned sale of significant equipment by Kaire.

     Excluding any potential acquisition, our work force is expected to increase
at a rate equal to actual increases of our business operations.

     Management is of the opinion that sufficient working capital will be
available from internal operations and from outside sources during the next
twelve months thereby to meet its obligations and commitments as they become
payable. Historically, Kaire has been successful in its efforts to secure
working capital from private placements of common stock securities, bank debt,
loans from private investors and the exercise of common stock warrants.

Results of Operations

Three and Six Months Ended June 30, 2000 Compared to June 30, 2001
------------------------------------------------------------------

     For the three and six months ended June 30, 2001, revenues were
approximately $3,687,328 and $7,223,858 respectively, for an increase of
$2,959,543 and $6,436,014 respectively from the same periods in 2000. The
increase was due to the increased sales of Classic Care Pharmacy and the Health
Advocacy program. Note that the June 30, 2000 period includes just one month of
revenue from Classic Care Pharmacy operations. Classic Care's monthly revenue
run rate, increased by 40% from the periods ended June 2000 to June 2000.

     Gross profit for products and services was $1,180,292 and $1,603,935 for
three and six months ended June 30, 2001, an increase of $917,421 and $1,311,075
over the same periods prior year. The increase was due to the acquisition of
Classic Care Pharmacy. The decrease in gross margin percentage is a partially
due to an increase in

                                      -10-
<PAGE>

the Aids Advocacy program sales which has an average margin percentage ranging
from seven to eleven percent.

     SG&A expense increased to $899,806 from $352,491 for the three months
period ended June 30, 2001 versus June 30, 2000, and increased to $1,678,098
from $587,943 for the six months period ended June 30, 2001 versus June 30,
2000. The increase in SG&A was due to the following 1) the acquisition of
Classic Care which accounted for $157,242 of the increase in both the three
months and six months ended June 30, 2001 and 2) increases in the three and six
month periods ended June 30, 2001 expenditures for Kaire Holdings's base
businesses is related to consultants fees, financing costs and compensation
expense.

     Interest expense for operations for the three and six month period ended
June 30, 2001 was $0 compared to $0 for the comparable three month period prior
year and $31,533 compared to $14,544 for the comparable six month period prior
year. The increase resulted from the issuance of new convertible debt.

     No provision was made for Federal income tax since the Company has incurred
significant net operating losses from inception. Through June 30, 2001, the
Company incurred net operating losses for tax purposes of approximately
$483,585. 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, 2001 the Company had assets of $12,951,840 compared to
$11,635,029 on December 31, 2000. The Company had a total stockholders' equity
of $8,032,718 on June 30, 2001 compared to an equity of $7,171,164 on December
31, 2000, an increase of $1,313,812.

     As of June 30, 2001 the Company's working capital position increased
$1,395,168 from a negative $1,756,472 at December 31, 2000 to a negative
$361,304, primarily as a result of increase in accounts receivable of $610,950,
inventory of $364,732, prepaid consulting of $364,506 plus a decreases in notes
payable-acquisition of $226,000, accounts payable of $105,247.

     On November 30, 2000, Kaire amended the purchase of Classic Care Pharmacy
letter of intent signed in June 2000. The Amendment sets the purchase price at
$9,500,000 to be paid in a combination of cash and stock. The Amended Agreement
calls for an initial cash payment of $1,000,000 plus an additional $2,000,000 to
be paid in cash payments of $250,000 each beginning in March 2001 through
October 2001. The required amounts are to be funded through outside financing.
Thus far, $1,699,000 of the $3,000,000 has been paid. Kaire has issued
15,499,999 common shares as the initial stock portion of the Amended Agreement.
The value of the 15,499,999 shares is required to be no less than the balance of
the cash owed or at least $.42 per share in order to meet the target price of
$9,500,000. If the price of the stock is not equal to or greater than $.42 per
share during the period ended October 31, 2001, the Company will be required to
issue sufficient additional shares of common stock or pay additional cash to
insure that the total consideration paid for the acquisition is $9,500,000. The
additional stock must be issued or cash

                                      -11-
<PAGE>

must be paid by November 30, 2001.

    Kaire intends to pay the balance of this liability through equity
fundraising and by using profits from Classic Care Pharmacy. Should either of
these sources of funds fail to produce adequate capital for the payment of the
Classic Care liability, it is possible that Kaire may have to sell Classic Care
Pharmacy in order to pay off this debt.

Going Concern

     The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has experienced net losses of
$483,585 and $2,413,175 for the period ended June 30, 2001 and the year ended
December 31, 2000, respectively. The Company also had a net working deficit of
$361,304 and $1,745,642 for the period ended June 30, 2001 and the year ended
December 31, 2000, respectively. Additionally, the Company must raise additional
capital to meet its funding commitments for the acquisition of Classic Care,
Inc. These factors raise 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.



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


Item 1.  Legal Proceedings

Equipment Lease Litigation

     In February 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.

     The Company's magnetic resonance imaging ("MRI") system (the "Unit")
currently is installed in a mobile van at an operating site in Jefferson Valley,
New York and has been in use since September 1992. It is leased to Tri-County
Mobile MRI, L.P. ("Tri-County"), whose general partner is Diagnostics Resource
Funding.

     This lease provides for monthly payments of $37,926 to Venus Management,
Inc. ("VMI") through August 1999 and $68,589 in September 1999 (with such
payments being guaranteed by Medical Funding of America, Inc. ("MFA")), and VMI
is required to make monthly installment payments (which include interest at
10.5% per annum on the unpaid principal balance) for the Unit to a third party
finance company of $32,360 through August 1999 and $68,589

                                      -12-
<PAGE>

in September 1999. This lease provides for a purchase option at the expiration
of the initial term of such lease equal to the then fair market value of the
Unit.

     Tri-County was delinquent in making certain of its lease payments to VMI
under the terms of the lease agreement concerning the Unit, and MFA failed to
make these payments to VMI under its guarantee of Tri-County's payments to VMI.
Accordingly, VMI had not made certain payments due to the third-party finance
company for the Unit.

     As a result, the third-party finance company issued a notice of default to
the Company. Tri-County is currently in discussions with the third-party finance
company to restructure the obligation, to assume the debt, and to take title to
the Unit. It is expected that the third-party finance company will accept the
restructure, and the Company will release its title to the equipment in exchange
for the third-party finance company releasing the Company from its debt
obligation. However, if the parties are unable to resolve this matter, it is
likely that the third-party finance company will institute an action against the
Company, VMI, and Tri-County for the balance due, plus other costs and relief.

Patent Claim

     An individual filed a complaint against the Company alleging breach of
contract and fraud and related business torts related to certain patents that
the plaintiff transferred to the Company. The Company believes that the
plaintiff's claims are without merit and intends to vigorously defend itself.
The amount of claimed damages is not yet determined.

     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
December 31, 2001. 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.


Item 2. Changes in Securities and Use of Proceeds

     During the Quarter ending June 30, 2001, the Company issued securities
using the exceptions available under the Securities Act of 1933 including
unregistered sales made pursuant to Section 4(2) of the Securities Act of 1933,
as follows:

     In January 2001, the Company issued 3,000,000 shares of common stock for
options exercised valued at $240,000.  These options were issued to Kaire's
management.

     In February 2001 the Company issued 6,000,000 shares of common stock for
professional services valued at $420,000.

     In May 2001 the Company issued 6,000,000 shares of common stock for
professional services valued at $120,000


   Item 3. Defaults Upon Senior Securities

   None


   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 400,000,000 for the

                                      -13-
<PAGE>

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 5.  Other Information

None


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

None

                                      -14-
<PAGE>

                                   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 20, 2001                 By: /s/ Steven  R.Westlund
                                           ------------------------
                                               Steven Westlund
                                               Chief Executive Officer, Chairman



Date:  August 20, 2001                 By: /s/ OWEN M. NACCARATO
                                           ---------------------
                                               Owen M. Naccarato
                                               Chief Financial Officer, director


Date:  August 20, 2001                  By:  /s/ Asher Gottesman
                                             -------------------
                                                 Asher Gottesman
                                                 Director

                                      -15-