LOGISTICARE INC, SB-2/A, 1998-08-06

LOGISTICARE INC
SB-2/A, 1998-08-06
TRANSPORTATION SERVICES

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1998

REGISTRATION NO. 333-52327
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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LOGISTICARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 4729 13-3765416
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

ONE CROWN CENTER
SUITE 306
1895 PHOENIX BOULEVARD
COLLEGE PARK, GEORGIA 30349
(770) 907-7596
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

JOHN L. SHERMYEN
ONE CROWN CENTER
SUITE 306
1895 PHOENIX BOULEVARD
COLLEGE PARK, GEORGIA 30349
(770) 907-7596
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

-------------------
COPIES OF COMMUNICATIONS TO:

ROBERT A. CANTONE, ESQ. JEFFREY R. PATT, ESQ.
PROSKAUER ROSE LLP KATTEN MUCHIN & ZAVIS
1585 BROADWAY 525 WEST MONROE STREET
NEW YORK, NEW YORK 10036-8299 CHICAGO, ILLINOIS 60661
(212) 969-3000 (312) 902-5604

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register Additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
REGISTERED BE REGISTERED(1) PER UNIT(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share........ 3,795,000 shares $12.00 $45,540,000 $13,434.30(3)
</TABLE>
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(1) Includes 495,000 shares of Common Stock that the Underwriters have the
option to purchase to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
(3) Includes $9,363.30 previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED AUGUST 6, 1998

PROSPECTUS

3,300,000 SHARES

[LOGO] LOGISTICARE

COMMON STOCK

Of the 3,300,000 shares of Common Stock offered hereby, 2,300,000 shares are
being offered by the Company and 1,000,000 shares are being offered by the
Selling Stockholder. The Company will not receive any of the proceeds from the
sale of shares by the Selling Stockholder. See "Principal and Selling
Stockholders."

Prior to this offering, there has been no public market for the Common Stock
of the Company. It is currently estimated that the initial public offering
price will be between $10.00 and $12.00 per share. See "Underwriting" for a
discussion of the factors to be considered in determining the initial public
offering price. The Company has applied for the Common Stock to be quoted and
traded on the Nasdaq Stock Market under the symbol LGTC.

--------

THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 5.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
PUBLIC DISCOUNTS(1) COMPANY(2) STOCKHOLDER
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<S> <C> <C> <C> <C>
Per Share.............. $ $ $ $
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Total(3)............... $ $ $ $
</TABLE>
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(1) See "Underwriting" for indemnification arrangements with the several
Underwriters.

(2) Before deducting expenses payable by the Company estimated at $ .

(3) The Company and the Over-allotment Selling Stockholders have granted to the
Underwriters a 30-day option to purchase up to an aggregate of 495,000
additional shares of Common Stock (195,000 from the Company and 300,000
from the Over-allotment Selling Stockholders) solely to cover over-
allotments, if any. If all such shares are purchased, the total Price to
Public, Underwriting Discount, Proceeds to Company, Proceeds to Selling
Stockholder and Proceeds to the Over-allotment Selling Stockholders will be
$ , $ , $ , $ and $ , respectively. See "Underwriting."

--------

The shares of Common Stock are offered by the several Underwriters subject to
prior sale, receipt and acceptance by them and subject to the right of the
Underwriters to reject any order in whole or in part and certain other
conditions. It is expected that certificates for such shares will be available
for delivery on or about , 1998, at the office of the agent of Hambrecht &
Quist LLC in New York, New York.

HAMBRECHT & QUIST EVEREN SECURITIES, INC.
, 1998
<PAGE>

PAYOR

PHOTO

Provide government
agencies, managed care
organizations and
other payors a
transportation
outsourcing alternative

TRANSPORTATION
CARRIER RECIPIENT

[PHOTO] [LOGO] LOGISTICARE [PHOTO]

Establish Provide on-time, quality
networks of qualified transportation to
transportation carriers. eligible recipients

LOGISTICARE SEEKS TO ESTABLISH ITSELF AS THE CENTRAL POINT OF
CONTACT FOR THREE CONSTITUENCIES: THIRD-PARTY PAYORS,
TRANSPORTATION CARRIERS AND ELIGIBLE RECIPIENTS.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.

LogistiCare(TM), the LogistiCare(TM) logo and RealTime(TM) are trademarks of
the Company.
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and Financial Statements and Notes thereto appearing elsewhere in
this Prospectus. The Common Stock offered hereby involves a high degree of
risk. See "Risk Factors." Unless otherwise indicated, all information in this
Prospectus (i) gives effect to the five-for-one stock split of the Common Stock
effected as of March 30, 1998, (ii) gives effect to the two-for-one stock split
of the Common Stock effected as of June 11, 1998, (iii) gives effect to the
conversion of each outstanding share of the Company's preferred stock, par
value $.01 per share (the "Preferred Stock"), into 10 shares of Common Stock
which will occur upon the effectiveness of the Registration Statement and (iv)
assumes no exercise of the Underwriters' over-allotment option. See
"Description of Capital Stock," "Underwriting" and Notes to Financial
Statements.

THE COMPANY

LogistiCare, Inc. ("LogistiCare" or the "Company") manages non-emergency
transportation services for government health and human service agencies and
for managed care organizations ("MCOs"). The Company seeks to establish itself
as the central contact for three constituencies: third-party payors,
transportation carriers and individuals eligible for transportation benefits
("Recipients"). The Company believes that its management expertise and
RealTime(TM) software system ("RealTime") enable it to provide sophisticated
and efficient transportation management services. The Company currently
conducts its business through centralized operations centers ("Operations
Centers") in Georgia, Florida and Connecticut, and intends to expand into
selected new regional markets.

The Company's brokerage logistics services, contracted under both capitated
and, to a lesser extent, fee-for-service arrangements, provide third-party
payors with an outsourcing alternative for their transportation requirements.
These services include: processing requests for transportation from Recipients,
determining their eligibility for such services, coordinating and purchasing
transportation, reporting encounter data and performing other logistical and
quality-assurance activities associated with non-emergency transportation. The
Company does not own or operate any vehicles for the transportation of
individuals. Instead, the Company establishes cost-effective networks of
carriers by selecting, negotiating and contracting with qualified
transportation carriers within each region. Such independent transportation
carriers are assisted and evaluated by the Company on an ongoing basis to
ensure conformity with the Company's quality standards.

Currently, in geographic markets in which the Company does not operate, non-
emergency transportation is provided in large measure through a fragmented
delivery system consisting primarily of small transportation companies that
frequently provide only one class of service (i.e., ambulatory, wheelchair or
ambulance). In a typical transaction, an individual schedules a trip with a
transportation carrier who subsequently submits a receipt for the cost of the
trip to a third-party payor for reimbursement. The Company believes that this
system is highly inefficient and provides no incentive to manage utilization or
contain costs, while at the same time it provides an opportunity for abuses by
passengers and transportation carriers that the Company believes are difficult
for third-party payors to effectively identify and prevent.

The Company believes that the growing demand for non-emergency
transportation, combined with third-party payors' increasing dissatisfaction
with the fragmented delivery system, has created the need for a more
sophisticated alternative to manage utilization and contain costs while
providing transportation services at or above existing levels of quality. The
Company believes that government agencies, MCOs and other third-party payors
will increasingly turn to third parties, such as the Company, that are not
affiliated with transportation carriers to coordinate and manage all classes of
non-emergency transportation services.

The Company was incorporated in Delaware in March 1994. In January 1996, the
Company acquired all of the outstanding shares of Automated Dispatch Systems,
Inc. ("Systems") and subsequently merged Systems into itself. The Company's
executive offices are located at 1895 Phoenix Boulevard, Suite 306, College
Park, Georgia 30349, and its telephone number is (770) 907-7596.

3
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.... 2,300,000 shares
Common Stocks offered by the Selling
Stockholder........................... 1,000,000
Common Stock to be outstanding after
the Offering.......................... 11,321,510 shares(1) (2)
Use of proceeds........................ For internal software development
expansion of existing Operations
Centers and working capital and general
corporate purposes, including
marketing, sales force expansion,
formation of new Operations Centers,
acquisitions and providing collateral
security for performance bonds in
connection with new contracts. See "Use
of Proceeds."
Proposed Nasdaq National Market symbol. LGTC
</TABLE>

SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED
ENDED DECEMBER 31, MARCH 31,
----------------------- ---------------
1995 1996 1997 1997 1998
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<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................ $ 392 $3,636 $11,502 $1,362 $11,715
Operating expenses.................. 501 3,722 15,714 1,586 11,494
Income (loss) from operations....... (109) (86) (4,212) (224) 221
Other income (expense), net......... (18) (33) (2) (2) 7
Net income (loss)................... $ (127) $ (119) $(4,214) $ (226) $ 228
Basic net income (loss) per share... $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.03
Weighted average shares outstanding. 5,000 5,550 7,189 5,797 8,047
Diluted net income (loss) per share. $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.02
Weighted average shares and
potentially dilutive shares
outstanding........................ 5,000 5,550 7,189 5,797 10,256
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1998
-----------------------
ACTUAL AS ADJUSTED(2)
------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................ $ 3,681 $26,460
Working capital...................................... (3,367) 19,412
Total assets......................................... 6,875 29,654
Short-term debt including current portion of long-
term debt........................................... 149 149
Long-term debt, less current maturities.............. 242 242
Total stockholders' equity (deficit)................. (2,450) 20,329
</TABLE>
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(1) Based on the number of shares outstanding as of March 31, 1998. Excludes
(i) 1,000,000 shares of Common Stock reserved for issuance under the
Company's 1998 Stock Option Plan and (ii) 1,533,330 shares of Common Stock
reserved for issuance under the Company's 1995 Stock Option Plan and
subject to outstanding options as of March 31, 1998 at a weighted average
exercise price of $0.93 per share. See "Capitalization," "Management--Stock
Option Plans" and Note 7 of Notes to Financial Statements.
(2) As adjusted to reflect the sale of shares of Common Stock offered hereby at
an assumed initial public offering price of $11.00 per share and the
receipt of the estimated proceeds therefrom as if such transactions had
occurred on March 31, 1998. See "Use of Proceeds" and "Capitalization."

4
<PAGE>

RISK FACTORS

An investment in the Common Stock offered hereby involves a high degree of
risk. Prospective investors should carefully consider the following risk
factors, in addition to the other information contained in this Prospectus,
before purchasing the securities offered hereby. This Prospectus contains
forward-looking statements. Discussions containing such forward-looking
statements may be found in the material set forth below and under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," as well as in the Prospectus generally.
Prospective investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties.
Actual events or results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including, without
limitation, the risk factors set forth below and the matters set forth in this
Prospectus generally.

Limited Operating History; History of Operating Losses. The Company was
formed in 1994 and, therefore, has had a limited operating history upon which
an evaluation of the Company and its prospects can be based. From its
inception to July 1997, the Company executed five contracts with MCOs and
three contracts with transportation carriers. Since July 1997, the Company has
also executed four contracts with government agencies. The Company has had
limited experience in managing these contracts. The Company's prospects must
be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and evolving markets. There can be no assurance that the
Company will be successful in addressing such risks. The Company has incurred
net losses since inception, including losses of $4.2 million in the year ended
December 31, 1997. Although the Company has experienced revenue growth in
recent periods, such growth rates may not be sustainable and are not
indicative of future operating results.

Dependence on Limited Number of Contracts. In July 1997, the Company
executed three contracts with the Georgia Department of Administrative
Services (on behalf of the Georgia Department of Medical Assistance) ("GDMA"),
pursuant to which the Company manages, on a capitated basis, non-emergency
transportation services to Medicaid beneficiaries in certain regions of
Georgia. In February 1998, the Company began providing services under a
written memorandum of understanding with the Connecticut Department of Social
Services ("CDSS") and executed a final contract with the CDSS for such
services in May 1998. Under this contract, the Company manages, on a capitated
basis, non-emergency transportation services to Medicaid beneficiaries in
certain regions of Connecticut. The GDMA contracts accounted for approximately
48.4% of the Company's revenues in 1997 and approximately 78.8% of the
Company's revenues in the first quarter of 1998. The CDSS contract accounted
for 12.0% of the Company's revenues in the first quarter of 1998. The Company
anticipates that these contracts will continue to represent a significant
portion of its revenues in the remainder of 1998 and for the foreseeable
future. However, the capitation rates in effect under the GDMA contracts for
service periods subsequent to June 30, 1998 are 23% to 26% lower than rates
that were in effect for the period from February 1, 1998 through June 30,
1998. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Overview." Each of the GDMA contracts was originally
scheduled to expire on June 30, 1998, subject to two successive one year
options to renew, exercisable solely in the discretion of the GDMA. In May
1998, the GDMA exercised the first option to renew with respect to each of the
GDMA contracts. The GDMA contracts are terminable by the GDMA upon notice to
the Company in certain circumstances, including if the GDMA determines that
such termination is in the best interest of the State of Georgia or that
sufficient funds no longer exist to pay its obligations under such contracts.
The CDSS contract expires on January 31, 1999 and is subject to two successive
one year options to renew, exercisable solely in the discretion of the CDSS.
The CDSS contract is terminable by the CDSS upon 90-days notice to the Company
for any reason, and upon lesser notice to the Company in certain
circumstances, and the CDSS may terminate the contract or reduce the
contracted amount of compensation at any time in the event that sufficient
funds no longer exist to pay its obligations. There can be no assurance that
any of these contracts will be retained, renewed or not terminated. The loss
of any of these contracts would have a material adverse effect on the
Company's business, financial condition and results of operations.

5
<PAGE>

Capitated Nature of Revenue. Approximately 80.4% of the Company's revenues
in 1997 and approximately 97.6% of the Company's revenues in the first quarter
of 1998 relate to capitated contracts, and the Company anticipates that the
revenues received under capitated contracts will continue to represent a
substantial majority of the Company's total revenues as it expands and
implements its business strategies. The Company believes that government
agencies, MCOs and other third-party payors will continue to seek discounted
fee structures and the assumption by providers, through capitation
arrangements, of all or a portion of the financial risks relating to health
care related services, including transportation services. In a capitation
arrangement, the Company makes certain demographic, statistical and other
assumptions concerning anticipated utilization, carrier services and cost
incurred per trip. Such assumptions are based upon the Company's limited
experience in providing services under other capitated arrangements, publicly-
available information and information furnished by the party requesting a bid
or proposal from the Company. If the Company secures a capitated contract, the
Company typically agrees, in advance and often for multi-year periods, to
accept a fixed monthly fee for services based upon the number of eligible
Recipients and various transportation-related criteria. The failure of the
Company to make accurate assumptions with respect to a contract could have a
material adverse effect on the Company's business, financial condition and
results of operations. For example, if MCO enrollees covered by such contracts
require more frequent transportation than anticipated by the Company upon
entering into such a contract, there could be a material adverse effect on the
Company. Fees negotiated under such capitated contracts could be insufficient
to cover the costs of the services provided.

The Company's acceptance of risk contracts may entail the business of
insurance, to which state licensure laws apply. If the Company's activities
are deemed to require licensure, the Company may not be able to qualify for
such licensure and may be subject to penalties for its failure to obtain
licensure. If the Company were required to and did obtain licensure, it would
be subject to potentially onerous regulatory requirements. To the extent the
Company accepts capitation and is not regulated as an insurer, regulatory
provisions that might mitigate losses by insurers will not apply to reduce the
Company's risk. See "Business--Government Regulation and Supervision--
Insurance Laws."

Risks Associated with Proposed Growth Strategy. The Company's business
strategy is to expand into new and existing markets either through entering
into new contracts and forming new Operations Centers or acquiring existing
businesses. The Company does not anticipate opening a new Operations Center in
a geographic region unless and until it has one or more contracts in such
region sufficient to support a new Operations Center. There can be no
assurance that the Company will be successful in obtaining new contracts
sufficient to form new Operations Centers. Upon the execution of a contract
requiring the formation of a new Operations Center, it may be necessary for
the Company within a brief time period to lease office space, purchase office
equipment, hire and train sufficient qualified personnel, and negotiate and
execute contracts with transportation carriers in geographic regions in which
the Company has no prior experience. The Company may also be required to
modify its software system to integrate new Operations Centers. There can be
no assurance that the Company will be able to complete such activities within
the time period necessary to perform under the applicable contract. These
activities may also occur prior to the Company's receipt of any payments under
a new contract and the Company may experience a several month lag in the
collection of its accounts receivables. Integrating newly-formed and acquired
business units with the Company's operations, identifying and pursuing
opportunities for expansion, funding the formation of new Operations Centers
and managing growth will require a significant amount of management time and
skill and financial resources. There can be no assurance that the Company will
be successful in achieving and managing growth. The Company currently has no
pending agreements or understandings regarding the acquisition of any business
or the formation of new Operations Centers.

Termination of Significant Contracts. The Company's contracts typically
contain provisions that permit the third-party payor to terminate its contract
with the Company on little or no notice, with or without cause. Termination of
a significant contract between the Company and a third-party payor, whether by
expiration or otherwise, will not only cause a loss of revenue to the Company,
but may also cause the Company to expend significant resources in closing the
applicable Operations Center. Actions necessary to close an Operations

6
<PAGE>

Center may include buying-out office leases, terminating or reassigning
personnel and selling or re-deploying office equipment. Both the loss of
revenue resulting from the termination of a significant contract and the
related costs of closing an Operations Center could have a material adverse
effect on the Company's business, financial condition and results of
operations.

Risks Associated with RFPs. A high percentage of the Company's prospective
clients are state or local government authorities. Effective marketing of the
Company's services to government clients requires the ability to respond to
government requests for proposals ("RFPs"). To succeed in the RFP process, the
Company must estimate its costs for servicing the proposed contract, the time
required to establish operations and the likely terms of the proposals
submitted by competitors. The Company's ability to successfully respond in the
RFP process in the future depends in large measure upon the availability of
sufficient financial and management resources, and will have an important
impact on the Company's business, financial condition and results of
operations. There can be no assurance that the Company will have sufficient
financial and management resources to successfully respond in the RFP process
in the future or that it will secure profitable contracts pursuant to RFPs .

Risks Associated With Government Contracting. In order to establish and
maintain relationships with government agencies, the Company occasionally
engages marketing consultants, including lobbyists. In the event of a
significant political change, such consultants may lose their ability to
effectively assist the Company. The failure of the Company to manage its
relationships effectively with political consultants may have a material
adverse effect on its business, financial condition and results of operations.
No assurance can be given that the Company will be successful in managing such
relationships.

Government contracts generally are subject to audits and investigations by
appropriate government agencies. These audits and investigations involve a
review of the government contractor's performance of its contracts as well as
its compliance with applicable laws, regulations and standards. If improper or
illegal activities are discovered in the course of any audits or
investigations, the contractor may be subject to various civil, criminal and
administrative sanctions, including termination of contracts, forfeiture of
profits, suspension of payments, fines and suspension or disqualification from
doing business with the government. If the Company becomes subject to
sanctions, such sanctions could have a material adverse effect on the
Company's business, financial condition and results of operations.

Risks Associated with the Company's Inability or Failure to Perform Under
Contracts. The Company's inability or failure to satisfy its contractual
obligations in a manner consistent with the terms of a contract could have a
material adverse effect on the Company's business, financial condition and
operating results because the Company is often required to indemnify third-
party payors for its failure to meet performance standards. For example, the
Company's contracts with the GDMA contain liquidated damages provisions and
financial penalties related to performance failures. In addition, in order for
the Company to bid for certain government contracts, the Company has been, and
may continue to be, required to secure its obligations by obtaining a
performance bond from an insurer, posting a cash performance bond or obtaining
a letter of credit from a suitable financial institution. In the event that a
government agency makes a claim against such performance bond or letter of
credit, the premiums demanded by the insurers for such bonds could increase,
thereby limiting the Company's ability to bid for contracts in the future. In
addition, the Company's failure to meet a third-party payor's expectations in
the performance of its contractual obligations could have a material adverse
effect on the Company's reputation, thereby adversely affecting its business,
financial condition and results of operations.

Legislative Change and Political Development. The market for the Company's
services is largely dependent on federal and state legislative programs, any
of which may be modified or terminated by acts of the legislative or executive
branches of federal and state governments. There can be no assurance that such
legislative change will not occur or that the Company will be able to
anticipate and respond in a timely manner to any such legislative change. The
Company's failure to effectively manage its business in light of anticipated

7
<PAGE>

or unanticipated legislative change could have a material adverse effect on
the Company's business, financial condition and results of operations.

Government Regulation. The federal government and all states in which the
Company operates regulate various aspects of the businesses with which the
Company contracts, such as MCOs and transportation carriers, by establishing
licensing requirements and operating standards. Although these regulations do
not currently have a direct impact on the Company's business, changes in these
regulations or their interpretation could affect the Company's business, by,
for example, increasing the cost of transportation carrier services.
Additionally, existing and future federal and state regulation of health care
could have a material adverse effect on the Company's financial condition and
results of operations. While the Company believes that its operations are
conducted in material compliance with applicable laws, the laws applicable to
the Company are subject to evolving interpretations, and therefore there can
be no assurance that a review of the Company's operations by federal or state
judicial or regulatory authorities would not result in a determination that
the Company has violated one or more provisions of federal or state law. Any
such determination could have a material adverse effect on the Company.
Expansion of the Company into, or the continuation of the Company's operations
within, certain jurisdictions may depend on the Company's ability to modify
its operational structure to conform to such jurisdictions' regulatory
framework. Any limitation on the Company's ability to expand could have a
material adverse effect on the Company. See "Business--Government Regulation
and Supervision."

Fraud and Abuse. The anti-kickback provisions of the Social Security Act
prohibit the solicitation, payment, receipt or offering of any direct or
indirect remuneration in return for, or as an inducement for, certain
referrals of patients for items, services or equipment covered by health
benefits programs, including Medicare and Medicaid. In addition to federal
law, anti-kickback laws have been adopted by many states, including the states
in which the Company conducts business. For example, the State of Florida
prohibits kickbacks and states that "[i]t is unlawful for any health care
provider or any provider of health care services to offer, pay, solicit, or
receive a kickback, directly or indirectly, overtly or covertly, in cash or in
kind, for referring or soliciting patients." In addition, federal law and some
state laws impose significant penalties for false and improper billings. These
anti-kickback and false claims laws are commonly referred to as the fraud and
abuse laws. Violations of any of these laws may result in substantial civil or
criminal penalties, and, in the case of violations of federal laws, exclusion
from participation in the Medicare and Medicaid programs. Such exclusion and
penalties, if applied to the Company, would have a material adverse effect on
the Company. Further, the application of these laws is subject to modification
by statutory amendment or promulgation of regulations and any such change
could have a material adverse effect on the Company.

Non-emergency transportation is one of many services identified by states
and the Office of Inspector General ("OIG") of the Department of Health and
Human Services as being a source of fraud and abuse activity in the Medicaid
program. Such allegations of fraud and abuse and the resulting increasing
costs have led members of Congress to consider eliminating non-emergency
transportation as a covered Medicaid service. The elimination of non-emergency
transportation as a covered Medicaid service would have a material adverse
effect on the Company. See "Business--Government Regulation and Supervision--
False and Improper Claims."

Health Care Reform. As a result of the continued escalation of health care
costs and the inability of many individuals to obtain insurance, numerous
proposals have been or may be introduced in Congress and state legislatures
relating to health care reform. There can be no assurance as to the ultimate
content, timing or effect of any health care reform legislation, nor is it
possible at this time to estimate the impact of potential legislation, which
may be material, on the Company. Aspects of certain of these proposals, such
as reduction in funding of Medicaid programs, changes in reimbursement
regulations, and increased pressure by Medicaid and other third-party payors
to contain health care costs, could eliminate or limit the use of
transportation carriers and consequently reduce both the demand for the
Company's services and the amount of funds available for such use. In the
recently enacted Balanced Budget Act of 1997 (the "1997 Budget Bill") and

8
<PAGE>

Health Insurance Portability and Accountability Act of 1996 ("HIPAA"),
Congress has responded to perceived fraud and abuse in health care programs.
This legislation has fortified the government's enforcement authority with
increased resources and greater civil and criminal penalties for offenses. The
Company anticipates that there will be further restrictive legislative and
regulatory measures to reduce fraud, waste and abuse in the health care
programs. There can be no assurance that any such legislation will not have a
material adverse effect on the Company. See "Business--Government Regulations
and Supervision--Federal and State Initiatives."

Dependence on Software System. The successful operation of the Company's
software system, RealTime, is critical to its ability to manage transportation
services and to secure, and operate profitably under, capitated contracts. The
software industry is characterized by rapid technological changes and advances
which can result in relatively short product lifecycles. The Company's future
success may depend, in large part, on its ability to enhance RealTime and
develop new software that keeps pace with technological developments in the
marketplace. Over the next year, the Company intends to expand RealTime's data
management and interface capabilities. There can be no assurance that the
Company will be successful in developing new software products or product
enhancements, including the proposed enhancements, or that such new products
or enhancements will keep pace with competitive innovations.

Dependence on Third-Party Carriers for Transportation. The Company does not
own or operate vehicles and is therefore dependent upon third-party
transportation carriers to fulfill the Company's obligations under its
transportation management contracts. There can be no assurance that the
Company will be able to execute and maintain contracts with third-party
carriers to provide transportation services on behalf of the Company in
accordance with the Company's standards at acceptable prices. The inability of
the Company to enter into satisfactory relationships with third-party carriers
or the failure of such carriers to furnish transportation services according
to the Company's standards at acceptable prices could have a material adverse
effect on the Company's business, financial condition and results of
operations.

Variability of Quarterly Operating Results. Variations in the Company's
revenues and operating results occur from quarter to quarter as a result of a
number of factors, including the progress of contracts, levels of revenues
earned on contracts (including any adjustments in expectations of revenue
recognition on fixed price contracts), the commencement, completion or
termination of contracts during any particular quarter, the schedule of
government agencies for awarding contracts and general economic conditions.
Because a significant portion of the Company's expenses are relatively fixed,
successful contract performance and variation in the volume of activity, as
well as in the number of contracts commenced or completed during any quarter,
may cause significant variations in operating results from quarter to quarter.
Furthermore, the Company has experienced, and anticipates that it may in the
future experience, a pattern in its results of operation in which it incurs
greater operating expenses during the start-up and early stages of significant
contracts.

Competition. The market for transportation management services is new,
highly competitive and rapidly evolving. Increased outsourcing of
transportation services, low barriers to entry and other factors may attract
new entrants into the transportation management industry and result in
increased competition for the Company. Potential competitors include
independent transportation carriers, logistics companies and other companies
who currently provide unrelated services to government agencies and other
third-party payors. Many of the Company's competitors and potential
competitors have significantly greater financial, technological and marketing
resources than the Company. There can be no assurance that the Company will be
able to compete successfully against current and future sources of competition
or that competition will not have a material adverse effect on the Company's
business, financial condition and results of operations.

Reliance on Key Personnel. The success of the Company is highly dependent
upon the efforts, abilities, business generation and project execution
capabilities of certain of its executive officers and other senior employees,
most of whom have worked together for only a short period of time. The loss of
the services of

9
<PAGE>

any of its executive officers or other key employees could have a material
adverse effect on the Company's business, financial condition and results of
operations. The Company maintains a key-man life insurance policy on John L.
Shermyen in the amount of $2,000,000, with the proceeds payable to the
Company.

The Company's future success also depends on its continuing ability to
identify, hire, train and retain other highly qualified technical and
managerial personnel. Competition for such personnel is significant and there
can be no assurance that the Company will be able to attract, assimilate or
retain other highly qualified technical and managerial personnel in the
future. The inability to attract and retain the necessary personnel could have
a material adverse effect upon the Company's business, financial condition and
results of operations.

Adverse Publicity. The Company has received, and expects to continue to
receive, media attention as a result of its contracts with state and local
government authorities. There can be no assurance that the Company will not
receive adverse media attention as the result of the types of services
provided by the Company or the activities of displaced transportation
carriers. Negative coverage relating to the Company could influence government
officials, slow the issuance of RFPs or cause the termination of existing
contracts. In addition, there can be no assurance that media attention focused
on the Company will be accurate or that the Company will be able to anticipate
and respond in a timely manner to all media contacts. Adverse media coverage
or the Company's failure to manage such coverage could have a material adverse
effect on the Company's reputation or the transportation management industry,
thereby adversely affecting the Company's business, financial condition and
results of operations.

Dependence Upon Third-Party Reimbursement. A substantial majority of the
Company's revenues are attributable to reimbursement by third-party payors,
particularly government agencies who administer state Medicaid programs and
MCOs. During the year ended December 31, 1997 and the three months ended March
31, 1998, the Company derived approximately 48.4% and 90.8%, respectively, of
its total revenues from government agencies who administer state Medicaid
programs, and approximately 51.6% and 9.2%, respectively, of its total
revenues from MCOs and other non-governmental third-party payors. The
revenues, cash flows and profitability of the Company, like those of other
companies in the health care industry, are affected by the continuing efforts
of third-party payors to control expenditures for health care. In addition,
reimbursement can be influenced by the financial instability of private third-
party payors and by budget pressures and cost shifting by governmental payors.
Furthermore, any change in reimbursement regulations, policies,
interpretations or statutes could adversely affect the operations of the
Company. The health care industry is experiencing a trend toward cost
containment as third party payors, such as governmental programs (e.g.,
Medicare and Medicaid), private insurance plans and managed care plans, seek
to impose lower reimbursement and utilizations rates and to negotiate reduced
capitated payment schedules with service providers. Further reductions in
payments to health care providers or other changes in reimbursement for health
care services could have a material adverse effect on the Company. These
reductions could result from changes in current reimbursement rates. There can
be no assurance that the effect of any or all of these changes in third-party
reimbursement could be offset by the Company through cost reductions,
increased volume, introduction of new services and systems or otherwise.

Risk of Liability Claims. The Company is subject to liability claims in the
event a Recipient fails to receive, or suffers harm in connection with,
transportation arranged through the Company. Even unsuccessful claims could
result in expenditure of funds in litigation, diversion of management time and
resources or damage to the Company's reputation and the marketability of the
Company's services and systems. Although the Company takes contractual steps
to obtain indemnification for certain liabilities and maintains general
commercial liability insurance, there can be no assurance that a successful
claim could not be made against the Company, that the amount of
indemnification payments or insurance would be adequate to cover the costs of
defending against or paying such a claim or that the costs of defending
against such a claim or the payment of damages by the Company would not have a
material adverse effect on the Company.

10
<PAGE>

Broad Discretion Over Use of Proceeds. The principal purposes of the
Offering by the Company are to obtain additional capital to support
anticipated growth, expand the public market for the Common Stock, facilitate
future access for the Company to public equity markets and enhance the
Company's ability to use its Common Stock as consideration for potential
acquisitions and as a means of attracting and retaining key employees. The
Company expects to use the net proceeds to the Company from the Offering
primarily for working capital and general corporate purposes, including
marketing, sales force expansion, formation of new Operations Centers,
acquisitions and providing collateral security for performance bonds in
connection with new contracts. The cost, timing and amount of funds required
for such uses by the Company cannot be precisely determined and will be based
upon, among other things, market conditions and other factors beyond the
control of the Company. Accordingly, management will retain discretion over
the use of the proceeds. See "Use of Proceeds."

No Prior Market; Possible Volatility of Stock Price. Prior to the Offering,
there has been no public market for the Common Stock, and there can be no
assurance that an active public market for the Common Stock will develop or
continue after the Offering. The initial public offering price of the Common
Stock will be determined by negotiation between the Company and the
Underwriters and may not be indicative of the market price for the Common
Stock after the Offering. See "Underwriting" for factors considered in
determining the initial public offering price. From time to time after the
Offering, there may be significant volatility in the market price of the
Common Stock. Deviations in results of operations from estimates of securities
analysts, changes in general conditions in the economy or the health care
industry or other developments affecting the Company or its competitors could
cause the market price of the Common Stock to fluctuate substantially. The
equity markets have, on occasion, experienced significant price and volume
fluctuations that have affected the market prices for many companies'
securities and have often been unrelated to the operating performance of these
companies. Concerns about the potential effects of health care reform measures
have contributed to the volatility of stock prices of companies in health care
and related industries and may similarly affect the price of the Common Stock
following the Offering. Any such fluctuations that occur following the
completion of the Offering may adversely affect the market price of the Common
Stock.

Shares Eligible for Future Sale. Immediately after completion of the
Offering, the Company will have 11,321,510 shares of Common Stock outstanding,
of which the 3,300,000 shares sold pursuant to the Offering will be freely
tradeable without restriction or further registration under the Securities
Act, except those shares acquired by affiliates of the Company. Holders of the
remaining shares will be eligible to sell such shares pursuant to Rule 144
under the Securities Act at prescribed times and subject to the manner of
sale, volume, notice and information restrictions of Rule 144. In addition,
1,743,330 shares of Common Stock are issuable upon the exercise of outstanding
stock options, the issuance of which shares is expected to be registered by
the Company under the Securities Act and become freely tradeable without
restriction. The Company and its current stockholders (holding an aggregate of
8,021,510 shares of Common Stock upon the closing of the Offering) have agreed
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for shares of Common Stock, until 180 days after
the effective date of the Registration Statement, without the prior consent of
Hambrecht & Quist LLC. Sales of substantial amounts of these shares in the
public market or the availability of such shares for future sale could
adversely affect the market price of the shares of Common Stock and the
Company's ability to raise additional capital at a price favorable to the
Company. See "Shares Eligible for Future Sale" and "Underwriting."

Potential Anti-Takeover Effects of Charter and By-laws Provisions. Certain
provisions of the Restated Certificate of Incorporation (the "Certificate of
Incorporation") and the Amended and Restated By-laws (the "By-laws") of the
Company may be deemed to have anti-takeover effects and may delay, deter or
prevent a change in control of the Company that a stockholder might consider
in his/her best interest. These provisions (i) provide that only the Board of
Directors or certain members thereof or officers of the Company may call
special meetings of the stockholders and (ii) authorize the issuance of "blank
check" preferred stock having such designations, rights and preferences as may
be determined from time to time by the Board of Directors. See "Description of
Capital Stock."

11
<PAGE>

Control by Existing Stockholders. Following the completion of the Offering,
the officers and directors of the Company will beneficially own approximately
50.4% of the outstanding shares of Common Stock. Following the offering, such
persons may effectively be able to control the affairs of the Company,
including the ability to delay or prevent a change of control of the Company.
See "Principal and Selling Stockholders."

Immediate and Substantial Dilution. Purchasers of the Common Stock in the
Offering will incur immediate and substantial dilution in the net tangible
book value per share of Common Stock of $9.21 per share. See "Dilution."

12
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,300,000 shares of
Common Stock offered by the Company hereby at an assumed initial public
offering price of $11.00 per share, and after deducting the underwriting
discounts and estimated offering expenses, are estimated to be $22,779,000.
The Company intends to use the net proceeds it receives from the Offering
approximately as follows:

<TABLE>
<CAPTION>
APPLICATION OF PROCEEDS AMOUNT PERCENT
----------------------- ----------- -------
<S> <C> <C>
Internal software development........................ $ 2,500,000 11%
Expansion of existing Operations Centers............. 1,000,000 4%
Working capital and general corporate purposes,
including marketing, sales force expansion,
formation of new Operations Centers, acquisitions
and providing collateral security for performance
bonds in connection with new contracts.............. 19,279,000 85%
</TABLE>

The cost, timing and amount of funds required for such uses by the Company
cannot be precisely determined and will be based upon, among other things,
market conditions and other factors beyond the control of the Company.

The Company may use a portion of such net proceeds to acquire businesses,
but the Company does not have any commitments or agreements with respect to
any such transaction. Pending such uses, the net proceeds to the Company of
the Offering will be invested in short-term, interest-bearing, investment-
grade securities.

The Company and certain stockholders of the Company (the "Over-allotment
Selling Stockholders") have granted the Underwriters a 30-day option to
purchase up to an aggregate of 495,000 additional shares of Common Stock
(195,000 from the Company and 300,000 from the Over-allotment Selling
Stockholders) to cover over-allotments, if any. If the over-allotment option
is exercised, the Company will not receive any proceeds from the sale of
Common Stock by the Over-allotment Selling Stockholders. See "Principal and
Selling Stockholders."

DIVIDEND POLICY

To date, the Company has neither declared nor paid any cash dividends on
shares of its Common Stock. The Company currently intends to retain its
earnings for future growth and, therefore, does not anticipate paying any cash
dividends in the foreseeable future.

13
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of March
31, 1998 (i) on an actual basis, (ii) the pro forma capitalization of the
Company at March 31, 1998 assuming the conversion of the Preferred Stock, and
(iii) as adjusted to give effect to the sale of 2,300,000 shares of Common
Stock offered by the Company hereby at an assumed offering price of $11.00 per
share and the application of the net proceeds therefrom. This table should be
read in conjunction with the Financial Statements of the Company and Notes
thereto included elsewhere in this Prospectus. See "Use of Proceeds."

<TABLE>
<CAPTION>
MARCH 31, 1998
------------------------------------
PRO FORMA
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
------- ------------ --------------
(UNAUDITED, IN THOUSANDS)
<S> <C> <C> <C>
Short-term obligations, including current
maturities of long-term obligations...... $ 149 $ 149 $ 149
------- ------- -------
Long-term obligations, less current
maturities............................... $ 242 $ 242 $ 242
------- ------- -------
Stockholders' equity (deficit):
Preferred stock, $.01 par value,
1,000,000 shares authorized; 97,415
issued and outstanding(4).............. 1 -- --
Common stock, $.01 par value, 30,000,000
shares authorized; 8,047,360 shares
issued and outstanding actual;
11,321,510 shares issued and
outstanding as adjusted(1)(4).......... 80 90 113
Additional paid-in capital................ 2,285 2,276 25,032
Deferred option plan compensation......... (450) (450) (450)
Retained deficit.......................... (4,366) (4,366) (4,366)
------- ------- -------
Total stockholders' equity (deficit).. (2,450) (2,450) 20,329
------- ------- -------
Total capitalization................ $(2,059) $(2,059) $20,720
======= ======= =======
</TABLE>
- ---------------------
(1) Excludes (i) 1,000,000 shares of Common Stock reserved for issuance under
the Company's 1998 Stock Option Plan and (ii) 1,533,330 shares of Common
Stock reserved for issuance under the Company's 1995 Stock Option Plan and
subject to outstanding options as of March 31, 1998 at a weighted average
exercise price of $0.93 per share. See "Management--Stock Option Plans"
and Note 7 of Notes to Financial Statements.
(2) Gives effect to the conversion of the issued and outstanding shares of
Preferred Stock into 974,150 shares of Common Stock, in the aggregate.
(3) Gives effect to the sale of 2,300,000 shares of Common Stock and the
application of the estimated net proceeds of $22,779,000 (after deducting
underwriting discounts and estimated offering expenses) as set forth in
"Use of Proceeds."
(4) Give effect to the increase in the Company's authorized capital stock
effected in June 1998.

14
<PAGE>

DILUTION

As of March 31, 1998, the Company had pro forma net tangible book value
(deficit) of approximately $(2,513,000), or $(0.28) per share of Common Stock.
Pro forma net tangible book value (deficit) represents the amount of total
tangible assets less total liabilities divided by the number of shares of
Common Stock outstanding. Without taking into account any other changes in the
net tangible book value after March 31, 1998, other than to give effect to the
receipt by the Company of the net proceeds from the sale of the 2,300,000
shares of Common Stock offered by the Company hereby at an assumed initial
public offering price of $11.00 per share (after deducting underwriting
discounts and estimated offering expenses), the pro forma net tangible book
value of the Company as of March 31, 1998 would have been approximately
$20,266,000, or $1.79 per share. This represents an immediate increase in net
tangible book value of $2.07 per share to existing stockholders and an
immediate dilution of $9.21 per share to new investors. The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $11.00
Net tangible book value (deficit) per share before the Of-
fering.................................................... $(0.28)
Increase per share attributable to new investors........... 2.07
------
Pro forma net tangible book value per share after the Offer-
ing......................................................... 1.79
------
Dilution per share to new investors.......................... $ 9.21
======
</TABLE>

The following table summarizes, on a pro forma basis as of March 31, 1998,
the differences between existing stockholders and the new investors with
respect to the number of shares of Common Stock purchased from the Company,
the total consideration paid and the average price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------ ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockhold-
ers(1)................. 8,021,510 70.85% $ 1,851,443 4.85% $ 0.23
New investors(1)........ 3,300,000 29.15% $36,300,000 95.15% $11.00
---------- ------ ----------- ------
Total............... 11,321,510 100.00% $38,160,648 100.00%
========== ====== =========== ======
</TABLE>
---------------------
(1)Includes 1,000,000 shares of Common Stock to be purchased by new investors
from the Selling Stockholder, which represents 8.83% of the shares which will
be outstanding following "The Offering." See "Principal and Selling
Stockholders."

Other than as noted above, the foregoing computations assume no exercise of
stock options under the Company's 1998 Stock Option Plan and 1995 Stock Option
Plan after March 31, 1998. As of March 31, 1998, there were no options
outstanding under the 1998 Stock Option Plan and there were options
outstanding to purchase 1,533,330 shares of Common Stock under the 1995 Stock
Option Plan at a weighted average exercise price of $0.93 per share. To the
extent options granted under the Company's 1995 Stock Option Plan are
exercised, there will be further dilution to new investors. See "Management--
Stock Option Plans" and Note 7 of Notes to Financial Statements.

15
<PAGE>

SELECTED FINANCIAL INFORMATION

The following data has been derived from financial statements audited by
Price Waterhouse LLP, independent certified public accountants. Balance sheets
at December 31, 1996 and 1997 and the related statements of operations and of
cash flows for the three years ended December 31, 1997 and Notes thereto
appear elsewhere in this Prospectus. The financial data at March 31, 1998 and
for the three months ended March 31, 1997 and 1998 has been derived from
unaudited financial statements also appearing elsewhere herein and which, in
the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations for the unaudited interim periods. The
historical results are not necessarily indicative of results of any future
period.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- ---------------
1994 1995 1996 1997 1997 1998
------ ------ ------ ------- ------ -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Transportation management
services .................. $ -- $ -- $1,530 $10,768 $ 988 $11,715
Related party............... -- -- 1,668 603 374 --
Other....................... -- 392 438 131 -- --
------ ------ ------ ------- ------ -------
Total revenues............ -- 392 3,636 11,502 1,362 11,715
------ ------ ------ ------- ------ -------
Operating expenses:
Purchased transportation.... -- -- 1,296 11,213 899 9,503
Direct labor................ -- -- 1,178 1,836 369 902
Selling, general and admin-
istrative.................. 126 311 1,043 2,665 318 1,089
Other....................... -- 190 205 -- -- --
------ ------ ------ ------- ------ -------
Total operating expenses.. 126 501 3,722 15,714 1,586 11,494
------ ------ ------ ------- ------ -------
Income (loss) from opera-
tions....................... (126) (109) (86) (4,212) (224) 221
Other income (expense) net... (8) (18) (33) (2) (2) 7
------ ------ ------ ------- ------ -------
Net income (loss)............ $ (134) $ (127) $ (119) $(4,214) $ (226) $ 228
====== ====== ====== ======= ====== =======
Basic net income (loss) per
share...................... $(0.03) $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.03
Weighted average shares out-
standing................... 5,000 5,000 5,550 7,189 5,797 8,047
Diluted net income (loss)
per share.................. $(0.03) $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.02
Weighted average shares and
potentially dilutive shares
outstanding................ 5,000 5,000 5,550 7,189 5,797 10,256
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31
-------------- --------
1996 1997 1998
----- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........................... $ 71 $ 640 $ 3,681
Working capital..................................... (427) (3,519) (3,367)
Total assets........................................ 968 2,258 6,875
Long-term debt, less current maturities............. 32 239 242
Total stockholders' deficit......................... (298) (2,678) (2,450)
</TABLE>

16
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
"Selected Financial Information" and the Company's Financial Statements and
Notes thereto included elsewhere in this Prospectus. Except for the historical
information contained herein, the discussion in this Prospectus contains
certain forward-looking statements that involve risks and uncertainties such
as statements of the Company's plans, objectives, expectations and intentions.
The cautionary statements made in this Prospectus should be read as being
applicable to all related forward-looking statements where they appear in this
Prospectus. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include those discussed in "Risk Factors" as well as those discussed elsewhere
herein.

OVERVIEW

LogistiCare provides non-emergency transportation management services to
government health and human service agencies and MCOs. The Company seeks to
establish itself as the central contact for three constituencies: third-party
payors, transportation carriers and individuals eligible for transportation
benefits ("Recipients"). The Company does not own any transportation carriers
or operate any vehicles for the transportation of individuals. The Company
provides services in which the Company coordinates, and through contracts with
unaffiliated transportation carriers provides, non-emergency transportation
for Recipients who are eligible to receive such transportation pursuant to
agreements with, or plans of, government health and human service agencies and
MCOs ("Brokerage Logistics"). In addition, a small percentage of the Company's
current revenues are generated from services in which the Company manages the
internal logistics requirements of independent transportation carriers and
carrier networks ("Service Bureau Logistics").

The Company was incorporated in March 1994 in Delaware. In April 1994, the
Company acquired for $150,000 from Automated Dispatch Services, Inc.
("Services"), the owner of RealTime, royalty-free rights to use, and exclusive
rights to modify and sublicense, RealTime, a computer-aided dispatch and
transportation logistics software system, for general transportation dispatch
purposes. RealTime was first conceptualized by, and designed and developed
under the supervision of, John L. Shermyen, the President of Services at such
time and the current President and Chief Executive Officer of the Company and,
upon consummation of the Offering, the Chairman of the Board of the Company.
During 1995, the Company realized its first revenues through the performance
of transportation management consulting services and the resale of two-way
land mobile radio equipment. In January 1996, the Company purchased all of the
outstanding shares of Automated Dispatch Systems, Inc. ("Systems") for a
combination of cash, stock and debt and subsequently merged Systems into
itself. Systems' previous operations have become the Company's Florida
Operations Center. In May 1996, the Company established its Connecticut
Operations Center through which it provides non-emergency transportation
management services to various MCOs. In October 1997, the Company established
its Georgia Operations Center through which it provides non-emergency
transportation management services under three contracts with the Georgia
Department of Medical Assistance ("GDMA") with respect to approximately
500,000 Medicaid beneficiaries in certain regions of Georgia. These contracts
were awarded in July 1997 pursuant to a competitive bidding process. In
November 1997, the Company was awarded the right, pursuant to a competitive
bidding process, to negotiate with the Connecticut Department of Social
Services ("CDSS") to provide non-emergency transportation management services
with respect to approximately 40,000 beneficiaries in certain regions of
Connecticut. The Company began providing such services under a written
memorandum of understanding with the CDSS in February 1998 through the
Connecticut Operations Center and executed a final contract with the CDSS for
such services in May 1998.

The Company's revenues are generated principally from transportation
management services. The majority of these revenues are generated from
Brokerage Logistics contracts which are structured as capitated arrangements
under which the Company receives a fixed fee per eligible Recipient and, to a
lesser extent, fee-for-service arrangements under which the Company is paid a
predetermined amount per trip which

17
<PAGE>

includes the total cost of transportation. The Company also generates revenues
from Service Bureau Logistics contracts under which the Company is compensated
on a fee-for-transaction basis in which the Company receives a payment for
every transportation event processed. The Company does not earn revenues or
incur costs with respect to purchased transportation in connection with the
provision of Service Bureau Logistics. However, the Company does earn revenues
and incur costs with respect to purchased transportation in connection with
the provision of Brokerage Logistics. Revenues from transportation management
services accounted for 100% of total revenues in the quarter ended March 31,
1998 and approximately 93.6% of total revenues in the year ended December 31,
1997. Revenues under capitated contracts are recognized over the capitation
period, generally one month. Revenues earned under fee-for-service and fee-
for-transaction arrangements are recognized when the service is provided.

The Company's operations for the three month period ended December 31, 1997
resulted in losses of $3,546,000 on total revenues of $6,789,000. This loss
was primarily the result of costs associated with the contracts between the
Company and the GDMA under which the Company began providing transportation
management services on October 1, 1997. Shortly after the Company began
performing under the GDMA contracts, management realized that the
transportation utilization requirements under these contracts were materially
greater than indicated by the utilization data that was provided to the
Company by the GDMA as part of the competitive bidding process. To address
this issue, the Company conducted a series of negotiations with the GDMA from
October 1997 through February 1998 that resulted in amendments to the original
contracts. The amendments provide for substantial price increases in the
capitated rates received by the Company for the period from February 1, 1998
to June 30, 1998, substantial price increases for each of the two one-year
contract renewal periods, and the modification of certain operating
requirements in favor of the Company. In May 1998, the GDMA exercised the
first option to renew with respect to each of the GDMA contracts.

The capitation rates during the two one-year contract renewal periods, while
substantially higher than the rates in effect from October 1997 through
January 1998, are 23% to 26% lower than the rates that were in effect for the
five-month period beginning February 1, 1998. As a result, management
anticipates that revenues under the contracts between the Company and the GDMA
will be substantially greater during the three-month periods ended March 31
and June 30, 1998 than any other quarter of the current contract period or the
two subsequent one-year contract renewal periods. The pricing structure
negotiated as part of the amendments to the original contracts was developed
with a higher capitation rate in the initial months to allow, among other
things, Company management the opportunity to implement operational changes to
more aggressively control utilization and negotiate lower prices with
transportation carriers. If the capitation rates which went into effect under
the GDMA contracts as of July 1, 1998 were in effect as of January 1, 1998,
revenues for the three month period ended March 31, 1998 would have been
approximately $700,000 less than actual revenues for such period.

The Company's most significant expenses are purchased transportation and
direct labor. Purchased transportation expenses are paid under capitated and
fee-for-service contracts. The Company either purchases transportation on a
per trip basis, or subcontracts with transportation carriers to gain access to
a certain number of vehicles for a fixed fee. The price of purchased
transportation is negotiated between the Company and the transportation
carrier and is based upon (among other things) labor, gasoline and vehicle
costs. Contemporaneous with the renegotiation of the GDMA contracts, the
Company renegotiated the prices it would pay to most transportation carriers
at substantially lower rates than under the original arrangements.

Direct labor costs consist of wages paid by the Company to customer service
representatives and other individuals servicing contracts. The Company's
ability to control costs associated with purchased transportation and direct
labor will have the most direct impact on profitability under current and
future capitated and fee-for-service contracts. The Company is subject to
potential cost overruns and there can be no assurance that the Company will
maintain profitability under its current or future contracts.

18
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, selected
statement of operations data as a percentage of revenues:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
--------------------- ---------------
1995 1996 1997 1997 1998
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Revenues:
Transportation management
services .................. -- 42.1% 93.6% 72.5% 100.0%
Related Party............... -- 45.9 5.3 27.5 --
Other....................... 100.0% 12.0 1.1 -- --
----- ----- ----- ------ ------
Total revenues.......... 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ------ ------
Operating expenses:
Purchased transportation.... -- 35.7 97.4 66.0 81.1
Direct labor................ -- 32.4 16.0 27.1 7.7
Selling, general and
administrative............. 79.4 28.7 23.2 23.3 9.3
Other....................... 48.5 5.6 -- -- --
----- ----- ----- ------ ------
Total operating expenses.. 127.9 102.4 136.6 116.4 98.1
----- ----- ----- ------ ------
Income (loss) from
operations................. (27.9) (2.4) (36.6) (16.4) 1.9
Other income (expense):
Interest income............. -- -- 0.2 -- 0.2
Interest expense............ (4.5) (0.9) (0.2) (0.2) (0.2)
----- ----- ----- ------ ------
Net income (loss)............. (32.4)% (3.3)% (36.6)% (16.6)% 1.9%
===== ===== ===== ====== ======
</TABLE>

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1998 AND 1997

Revenues. Total revenues increased 760.0% to $11,715,000 for the three month
period ended March 31, 1998 as compared to $1,362,000 for the same period for
1997. This increase was primarily a result of (i) revenues of $9,230,000 from
the contracts between the Company and the GDMA, and (ii) revenues of
$1,400,000 from the contract between the Company and the CDSS. Operations
under these contracts began producing revenues for the Company on October 1,
1997 and February 1, 1998, respectively. Total revenues from transportation
management services for the three months ended March 31, 1998 also reflect an
increase in the capitation rates under the GDMA contracts, effective February
1, 1998. The capitation rates in effect under the GDMA contracts subsequent to
July 1, 1998 are 23% to 26% lower than rates that were in effect for the
period prior to July 1, 1998.

As of March 31, 1998, the Company had $4,229,406 of deferred revenue.
Deferred revenue relates to funds received from the GDMA in November 1997 and
March 1998 in the amounts of $1,250,000 and $5,236,000, respectively. The
Company received the $1,250,000 payment pursuant to a written memorandum of
understanding entered into in November 1997 between the Company and the GDMA
in connection with the Company's claim that the data provided by the GDMA
under the original contracts between the parties understated the number of
passengers to be transported under the contracts. The $5,236,000 payment was
received from the GDMA for similar reasons. Based on the increased capitation
rates, effective February 1, 1998, included in the amended contract with the
GDMA, which superseded the prior memorandum of understanding, the Company
recognized as revenue $2,257,000 of amounts previously deferred in the first
quarter of 1998, and the balance of deferred revenue as revenue in the second
quarter of 1998.

Purchased Transportation. The cost of purchased transportation increased
957.7% to $9,503,000 for the three month period ended March 31, 1998 as
compared to $899,000 for the same period for 1997. This increase was primarily
a result of the purchase by the Company of additional transportation services
as required to meet the Company's obligations under the GDMA and CDSS
contracts. As a percentage of revenues, purchased transportation increased to
81.1% for the three month period ended March 31, 1998 from 66.0% for the same
period in 1997 due, in large part, to the Company's increase in Brokerage
Logistics contracts.

19
<PAGE>

Direct Labor. The cost of direct labor increased 144.1% to $902,000 for the
three months ended March 31, 1998 as compared to $369,000 for the same period
for 1997. This increase was primarily a result of the additional direct labor
required to meet the Company's obligations under the GDMA and CDSS contracts.
As a percentage of revenues, direct labor decreased to 7.7% for the three
month period ended March 31, 1998 from 27.1% for the same period in 1997. This
is due in large part to a change in the Company's product mix from primarily
Service Bureau Logistics, pursuant to which the Company does not earn revenues
or incur costs with respect to purchased transportation, to primarily
Brokerage Logistics, pursuant to which the Company earns revenues and incurs
costs with respect to purchased transportation.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 242.1% to $1,089,000 for the three months
ended March 31, 1998 as compared to $318,000 for the same period for 1997.
This increase was primarily a result of the additional selling, general and
administrative expenses required to meet the Company's obligations under the
GDMA and CDSS contracts and increased marketing efforts. As a percentage of
revenues, selling, general and administrative expenses decreased to 9.3% for
the three month period ended March 31, 1998 from 23.3% for the same period in
1997. This is due in large part to a change in the Company's product mix from
primarily Service Bureau Logistics, pursuant to which the Company does not
earn revenues or incur costs with respect to purchased transportation, to
primarily Brokerage Logistics, pursuant to which the Company earns revenues
and incurs costs with respect to purchased transportation.

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1996

Revenues. Total revenues increased 216.3% to $11,502,000 for the year ended
December 31, 1997 as compared to $3,636,000 for the same period for 1996. This
increase was primarily a result of revenues of $5,572,000 from the contracts
between the Company and the GDMA. Operations under the GDMA contracts began
producing revenues for the Company in October 1997. Total revenues from the
sale of communications equipment decreased 100% for the year ended December
31, 1997 as compared to $226,000 for the same period for 1996. This decrease
resulted from the Company's decision in June 1997 to no longer engage in the
sale of communications equipment.

Purchased Transportation. The cost of purchased transportation increased
765.0% to $11,213,000 for the year ended December 31, 1997 as compared to
$1,296,000 for the same period for 1996. This increase was primarily a result
of the purchase by the Company of additional transportation services as
required to meet the Company's obligations under the GDMA contract. As a
percentage of revenues, purchased transportation increased to 97.5% for the
year ended December 31, 1997 from 35.7% for the same period in 1996 due, in
large part, to a change in product mix. Further, the purchased transportation
required under the contracts between the Company and the GDMA was
significantly greater than indicated by the statistical data used to develop
the contract pricing. The Company conducted a series of negotiations with the
GDMA from October 1997 through February 1998 which resulted in an increase in
the pricing under the contracts beginning February 1, 1998 which more closely
reflects the demographic makeup of the Recipient population.

Direct Labor. The cost of direct labor increased 55.8% to $1,836,000 for the
year ended December 31, 1997 as compared to $1,178,000 for the same period for
1996. This increase was primarily a result of the additional direct labor
required to meet the Company's obligations under the GDMA contracts. As a
percentage of revenues, direct labor decreased to 16.0% for the year ended
December 31, 1997 from 32.4% for the same period in 1996. This is due in large
part to a change in the Company's product mix from primarily Service Bureau
Logistics, pursuant to which the Company does not earn revenues or incur costs
with respect to purchased transportation, to primarily Brokerage Logistics,
pursuant to which the Company earns revenues and incurs costs with respect to
purchased transportation.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 155.6% to $2,665,000 for the year ended
December 31, 1997 as compared to $1,043,000 for the same period for 1996. This
increase was primarily a result of the additional selling, general and
administrative expenses, such as hiring additional employees, required to meet
the Company's obligations under the GDMA contracts

20
<PAGE>

and increased marketing efforts. As a percentage of revenues, selling, general
and administrative expenses decreased to 23.1% for 1997 from 28.7% for the
same period in 1996. This is due in large part to a change in the Company's
product mix from primarily Service Bureau Logistics, pursuant to which the
Company does not earn revenues or incur costs with respect to purchased
transportation, to primarily Brokerage Logistics, pursuant to which the
Company earns revenues and incurs costs with respect to purchased
transportation.

SELECTED QUARTERLY RESULTS OF OPERATIONS

Set forth below are selected quarterly statement of operations data for the
five fiscal quarters ended March 31, 1998. This information is derived from
unaudited quarterly financial data which include, in the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of operating results for such periods. This
information should be read in conjunction with the Financial Statements and
related Notes thereto contained elsewhere in this Prospectus. Results of
operations for any quarter are not necessarily indicative of results for any
future period.

Selling, general and administrative expenses decreased 20.2% to $1,089,000
for the three month period ended March 31, 1998 from $1,364,000 for the three
month period ended December 31, 1997 primarily as a result of costs incurred
to start operations under the GDMA contracts in the fourth quarter of 1997.

<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31,
1997 1997 1997 1997 1998
--------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Transportation
management services.. $ 987,519 $1,250,896 $1,740,561 $ 6,789,264 $11,714,962
Related Party......... 374,744 227,991 -- -- --
Other................. -- 131,000 -- -- --
--------- ---------- ---------- ----------- -----------
Total revenues....... 1,362,263 1,609,887 1,740,561 6,789,264 11,714,962
--------- ---------- ---------- ----------- -----------
Operating expenses:
Purchased
transportation....... 898,526 1,051,528 969,972 8,293,379 9,503,377
Direct labor.......... 369,471 374,879 413,322 677,833 901,837
Selling, general and
administrative....... 318,339 372,204 611,164 1,363,740 1,088,916
--------- ---------- ---------- ----------- -----------
Total operating
expenses............ 1,586,336 1,798,611 1,994,458 10,334,952 11,494,130
--------- ---------- ---------- ----------- -----------
Income (loss) from
operations.......... (224,073) (188,724) (253,897) (3,545,688) 220,832
Other income (expense):
Interest income....... -- 268 7,242 18,419 26,822
Interest expense...... (1,493) (5,540) (1,198) (19,306) (20,113)
--------- ---------- ---------- ----------- -----------
Net income (loss) ...... $(225,566) $ (193,996) $ (247,853) $(3,546,575) $ 227,541
========= ========== ========== =========== ===========
Revenues:
Transportation
management services.. 72.5% 77.7% 100.0% 100.0% 100.0%
Related Party......... 27.5 14.2 -- -- --
Other................. -- 8.1 -- -- --
--------- ---------- ---------- ----------- -----------
Total revenues....... 100.0 100.0 100.0 100.0 100.0
--------- ---------- ---------- ----------- -----------
Operating expenses:
Purchased
transportation....... 66.0 65.3 55.7 122.1 81.1
Direct labor.......... 27.1 23.3 23.7 10.0 7.7
Selling, general and
administrative....... 23.3 23.1 35.2 20.1 9.3
--------- ---------- ---------- ----------- -----------
Total operating
expenses............ 116.4 111.7 114.6 152.2 98.1
--------- ---------- ---------- ----------- -----------
Income (loss) from
operations (16.4) (11.7) (14.6) (52.2) 1.9
Other income (expense):
Interest income....... -- -- 0.4 0.3 0.2
Interest expense...... (0.2) (0.4) -- (0.3) (0.2)
--------- ---------- ---------- ----------- -----------
Net income (loss) ...... (16.6)% (12.1)% (14.2)% (52.2)% 1.9%
========= ========== ========== =========== ===========
</TABLE>

21
<PAGE>

The Company's revenues and operating results are subject to significant
variation from quarter to quarter depending on a number of factors, including
the commencement and completion of contracts during any particular quarter,
schedules of the customers awarding the contracts, and period to period
changes in contract pricing. See "Risk Factors."

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1998, and the years ended December 31, 1997 and 1996 the
Company had $3,681,000, $640,000 and $71,000 respectively, in cash and cash
equivalents. The Company's principal sources of liquidity as of March 31,
1998, and the years ended December 31, 1997 and 1996 consisted of cash and
cash equivalents and net accounts receivable of $5,686,000, $1,155,000 and
$536,000, respectively.

The Company's working capital deficit as of March 31, 1998 and December 31,
1997 was $3,367,000 and $3,519,000, respectively, and the ratio of current
assets to current liabilities was 0.63:1 and 0.25:1 on such dates,
respectively. The working capital deficit at both dates related to the
Company's contracts to provide Brokerage Logistics services to the GDMA. As of
March 31, 1998 and December 31, 1997, the Company had $4,229,000 and
$1,250,000, respectively, of deferred revenue in respect of such contracts.
The Company recognized $2,257,000 as revenue in respect of such amounts in the
first quarter of 1998 and expects to recognize the balance thereof in the
second quarter of 1998. The working capital deficit as of December 31, 1997
was also due to expenses incurred in the quarter then ended as the Company
commenced the performance of services under the GDMA contracts.

Accounts receivable increased for the three months ended March 31, 1998
primarily as a result of amounts due to the Company under its contract with
the CDSS. Although the Company has been providing services to the CDSS under a
written memorandum of understanding since February 1998, payments to the
Company for such services were delayed by the CDSS until the final contract
was executed in May 1998. As of June 30, 1998, the total accounts receivable
due to the Company under its contract with the CDSS was approximately
$652,000.

Cash provided by operating activities for the three months ended March 31,
1998 was $3,148,000 which primarily reflects net income for the quarter and
deferred revenue of $3,209,000. Cash used in operating activities of $424,000
for the year end December 31, 1997 was affected by increased deferred revenue
of $1,119,000, a net loss, and non-cash items.

The Company has financed its growth, capital expenditures and working
capital needs since inception through a series of private placements of
capital stock (approximately 76% of financing since inception), borrowings
from stockholders on a short-term basis from time to time, all of which
borrowings have been repaid (approximately 5% of financing since inception)
and capital leases (approximately 18% of financing since inception). In May
1998, the Company entered into a $1 million revolving line of credit with
NationsBank, N.A., which bears interest at a floating rate of prime plus 1%,
to provide funds for working capital and general corporate purposes. As of
July 20, 1998, the Company had not borrowed any funds under such line of
credit.

The Company's principal commitments as of March 31, 1998 were leases on its
facilities. The Company's principal capital needs are for working capital and
the expansion of its business. The Company believes that the net proceeds from
the sale of Common Stock offered hereby, together with funds generated by
operations, will provide adequate cash to fund its operations for at least the
next 18 months, which may include start-up costs associated with new contract
awards, obtaining additional office space, establishing new offices, expanding
marketing efforts, purchasing computer and telephone equipment, developing
software enhancements and providing collateral security for performance bonds
in connection with new contracts.

REIMBURSEMENT RATES

The health care industry is experiencing a trend toward cost containment as
third-party payors seek to obtain lower reimbursement and utilization rates
with health care providers. Further reductions in payments

22
<PAGE>

to health care providers or other changes in reimbursement for health care
services could adversely affect the Company's business and results of
operations.

YEAR 2000 COMPLIANCE

The Company believes that its computer systems are currently Year 2000
compliant. The Company does not anticipate any material disruption in its
operations as a result of any failure by the Company to be in compliance. The
Company does not have any information concerning the Year 2000 compliance
status of its clients or the transportation carriers with whom it contracts.

23
<PAGE>

BUSINESS

LogistiCare manages non-emergency transportation services for government
health and human service agencies and managed care organizations ("MCOs"). The
Company seeks to establish itself as the central contact for three
constituencies: third-party payors, transportation carriers and individuals
eligible for transportation benefits ("Recipients"). The Company believes that
its management expertise and RealTime software system enable it to provide
sophisticated and efficient transportation management services. The Company
currently conducts its business through centralized Operations Centers in
Georgia, Florida and Connecticut, and intends to expand into selected new
regional markets.

The Company's Brokerage Logistics services, contracted under both capitated
and, to a lesser extent, fee-for-service arrangements, provide third-party
payors with an outsourcing alternative for their transportation requirements.
These services include: processing requests for transportation from
Recipients, determining their eligibility for such services, coordinating and
purchasing transportation, reporting encounter data and performing other
logistical and quality-assurance activities associated with non-emergency
transportation. The Company does not own or operate any vehicles for the
transportation of individuals. Instead, the Company establishes cost-effective
networks of carriers by selecting and negotiating with qualified
transportation carriers within each region under contract. Such independent
transportation carriers are assisted and evaluated by the Company on an
ongoing basis to ensure conformity with the Company's quality standards.

The Company was incorporated in Delaware in March 1994 as RadioSoft, Inc. In
January 1996, the Company acquired all of the outstanding shares of Automated
Dispatch Systems, Inc., a Florida corporation ("Systems"). Systems had
previously acquired certain assets of Automated Dispatch Services, Inc., a
Delaware corporation. In September 1996, the Company changed its name to
Automated Dispatch Solutions, Inc. and subsequently merged Systems into itself
in January 1997. In October 1997, the Company changed its name to LogistiCare,
Inc.

INDUSTRY OVERVIEW

The provision of non-emergency transportation to the poor, elderly,
handicapped and other Recipients among residences, nursing homes, hospitals,
workplaces, retail outlets and other sites is subsidized by third-party payors
in certain circumstances. Third-party payors include both government entities,
such as state agencies that administer Medicaid programs, programs that
provide transportation mandated by the Americans with Disabilities Act,
programs that implement welfare-to-work initiatives and private payors, such
as MCOs, that provide non-emergency transportation benefits to commercial and
Medicare beneficiaries.

Currently, in geographic markets in which the Company does not operate, non-
emergency transportation is provided in large measure through a fragmented
delivery system consisting primarily of small transportation companies that
frequently provide only one class of service (e.g., ambulatory, wheelchair or
ambulance) to local markets. In a typical transaction, an individual schedules
a trip with a transportation carrier who subsequently submits a receipt for
the cost of the trip to a third-party payor for reimbursement. The Company
believes that this system is highly inefficient and provides no incentive to
manage utilization or contain costs, while at the same time it provides an
opportunity for abuses by passengers and transportation carriers that the
Company believes are difficult for third-party payors to effectively identify
and prevent.

The Company believes that the growing demand for non-emergency
transportation, combined with third-party payors' increasing dissatisfaction
with the current system, has created the need for a more sophisticated
alternative to manage utilization and contain costs while providing
transportation services at or above existing levels of quality. The Company
believes that government agencies, MCOs and other third-party payors will
increasingly turn to third parties, such as the Company, that are independent
of transportation carriers to coordinate and manage all classes of non-
emergency transportation services.

STRATEGY

The Company's goal is to become the nation's leading provider of non-
emergency transportation management services to government agencies, MCOs and
other third-party payors by establishing itself as the

24
<PAGE>

central contact for three constituencies: third-party payors, transportation
carriers and Recipients. Key components of the Company's strategy for
achieving these objectives include:

Build Recurring Revenue. The Company seeks to generate recurring revenue by
entering into long-term arrangements with third-party payors, including
government agencies and MCOs, to provide transportation management services.
The Company believes that the quality of its services and advanced software
system will enable it to attract such payors, and that opportunities may exist
to acquire from transportation carriers existing management service contracts
with other payors. Once the Company has entered into such arrangements or
acquired such contracts, these factors, combined with the inherent costs of
switching to another organization, will enable it to retain these clients.

Expand Within New and Existing Regional Markets. Through the establishment
of additional Operations Centers, the Company can efficiently expand its
capabilities within existing markets as well as enter new regional markets.
The Company has developed an implementation program that allows it to quickly
and inexpensively establish Operations Centers. As a result, the Company is
able to negotiate and execute a contract in a new market before it begins
incurring the costs of operating a center in that market. The Company has
demonstrated the ability to open new Operations Centers in less than 45 days
for a cost of under $400,000 per center.

Pursue Long-Term Capitated Contracts. The Company believes that government
agencies, MCOs and other third-party payors are increasingly looking to
outsource transportation management services on a capitated basis to third
parties, such as the Company, who are independent of transportation carriers.
The Company believes that its advanced software system, management expertise
and access to a substantial Recipient database enable it to accurately assess
and profitably manage these contracts.

Create Networks of Transportation Carriers. The Company coordinates and
manages transportation services through a network of unaffiliated
transportation carriers. The Company's contracts with government agencies and
MCOs enable it to gain financial control over purchasing transportation
services from local transportation carriers. As a result, the Company can
negotiate favorable long-term arrangements with the carriers it selects and
establish cost-effective networks of carriers in each region. This also
enables the Company to more effectively manage the quality and cost of
services provided to Recipients.

Realize Operational Efficiencies. As part of opening each new Operations
Center, the Company undergoes an extensive training program with its customer
service representatives and transportation carriers, which allows the Company
to recognize operational efficiencies over time. Similarly, the Company is
able to use the initial results from an Operations Center to refine its
Recipient utilization database and provide more cost-effective services. The
Company believes that these efforts allow it to provide high-quality services,
to better leverage its personnel, transportation carrier network and database
resources and to improve profitability.

TRANSPORTATION MANAGEMENT SERVICES

The Company believes that it has been a pioneer in offering government
agencies and MCOs an outsourcing alternative for managing transportation
services on a capitated basis. The Company believes that its current clients
benefit from, and its prospective clients will be attracted by, the following
strengths and differentiating characteristics:

. Capitation Contracts. The Company believes that by offering services on
a capitated basis, it allows clients to contain costs and minimize risks
associated with fluctuation in volume of transportation requests.

. Centralized Function. The Company serves as a central contact for third-
party payors, transportation carriers and Recipients. The Company
contracts with both third-party payors that have transportation-related
needs and with a selected network of transportation carriers that will

25
<PAGE>

service such needs. The geographic area covered by the third-party payor
contract is generally larger than most transportation carriers could
service individually. The Company coordinates the provision of such
services to the Recipients in a cost-effective and efficient manner.

. Quality Assurance Services. The Company provides services such as driver
and attendant training, vehicle mechanical and safety maintenance
monitoring, utilization reporting for program assessment, and federal
and state reporting compliance assessment to ensure that the highest
quality of service is furnished by transportation carriers and that
third-party payors receive the maximum benefit.

. Enhanced Perception of Health Care Services. The Company believes that a
Recipient's perception of the health care services that he or she
receives is enhanced by the Company's provision of reliable, courteous
and appropriate transportation to and from medical appointments, which
reduces defections by Recipients to other MCO plans and contributes to
an MCO's ability to attract enrollees.

. Technical Resources and Expertise. The Company believes it has the
technical resources and expertise necessary to manage large and complex
transportation programs efficiently while controlling costs. In
addition, the Company believes that its software system, RealTime,
allows it to more efficiently process and effectively analyze data and,
therefore, to provide more sophisticated transportation management
services than independent transportation carriers.

The Company provides two principal types of transportation management
services: (i) Brokerage Logistics and (ii) Service Bureau Logistics.

Brokerage Logistics

The Company principally offers non-emergency transportation management
services to government agencies, MCOs and other third-party payors in which the
Company coordinates and purchases transportation for Recipients. The Company's
broad range of services includes: processing requests for transportation from
Recipients, determining their eligibility for such services, coordinating and
purchasing transportation, reporting encounter data and performing other
logistical and quality assurance services associated with non-emergency
transportation. Transportation is furnished to Recipients pursuant to contracts
between the Company and independent transportation carriers that are selected,
assisted and evaluated on an ongoing basis. The Company does not own any
transportation carriers or operate any vehicles itself. The Company is
compensated for these services primarily on a capitated basis and, to a lesser
extent, on a fee-for-service basis.

The Company uses RealTime to monitor and analyze Recipient usage within the
service limitation parameters, which allows the Company to quickly identify and
prevent unauthorized travel. The Company's projection of the costs to be
incurred in servicing a contract is based upon, among other considerations,
relevant demographic information relating to the covered population, including
number of potential Recipients, age, residence distance from medical facilities
and information derived from their collective medical histories, as well as the
contractual conditions that restrict actual travel. Through use of its
proprietary database and independent research of publicly-available resources,
the Company believes that it can properly analyze the cost implications of the
various demographic considerations and contractual conditions applicable to
capitated contracts. Certain demographic information relating to the covered
population and used by the Company in its analysis of projected costs generally
is made available to the Company by the government agency or MCO that is
soliciting proposals.

Currently, the Company has eight contracts to provide Brokerage Logistics for
government agencies and MCOs covering approximately 700,000 persons who are
eligible under certain circumstances for some type of transportation benefits.

Three of the Company's largest contracts by revenue are with the Georgia
Department of Medical Assistance ("GDMA"). Under these contracts, the Company
coordinates and administers non-emergency transportation services with respect
to approximately 500,000 individuals in the Central, Southwest and East

26
<PAGE>

regions of Georgia who are eligible for such services under the Georgia
Medical Assistance Program (Medicaid). To ensure that transportation resources
are used in conformance with Medicaid guidelines, each contract contains
specific service parameters and Recipient eligibility criteria. The Company is
compensated for these services on a monthly basis based on negotiated
capitated rates. Each of these contracts was originally scheduled to expire on
June 30, 1998, subject to two successive one year options to renew,
exercisable solely by the GDMA in its discretion. In May 1998, the GDMA
exercised the first option to renew with respect to each of the GDMA
contracts. Since July 1, 1998, capitation rates under the GDMA contracts have
been 23% to 26% lower than the rates that were in effect from February 1, 1998
through June 30, 1998. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation--Overview." The GDMA may terminate these
contracts in certain circumstances, including if it determines that such
termination is in the State of Georgia's best interest or that sufficient
funds no longer exist to pay its obligations under such contracts.

In February 1998, the Company began providing services to the Connecticut
Department of Social Services ("CDSS"), under a written memorandum of
understanding with the CDSS and executed a final contract for such services in
May 1998. Under this contract, the Company coordinates and administers non-
emergency transportation services with respect to approximately 40,000
individuals in the South West and South Central regions of Connecticut who are
eligible for such services under the Connecticut Medicaid and General
Assistance Programs and who are not enrolled in a Medicaid Managed Care plan.
To ensure that transportation resources are used in conformance with Medicaid
guidelines, this contract contains specific service parameters and Recipient
eligibility criteria. The Company is compensated for these services on a
monthly basis based on capitated rates resulting from the RFP bidding process
and the CDSS' estimate of monthly enrollment and transportation costs that
would otherwise be incurred on a fee-for-service basis. The CDSS contract
expires on January 31, 1999 and is subject to two successive one year options
to renew, exercisable solely in the discretion of the CDSS. The CDSS contract
is terminable by the CDSS upon 90-days notice to the Company for any reason,
and upon lesser notice to the Company in certain circumstances, and the CDSS
may terminate the contract or reduce the contracted amount of compensation at
any time in the event that sufficient funds no longer exist to pay its
obligations.

Service Bureau Logistics

The Company also offers transportation management services directly to
independent transportation carriers and carrier networks where the Company
manages the internal logistics requirements of the carrier or carrier network.
The Company is compensated for these services on a fee-for- transaction basis
(i.e., based on a fixed fee for each trip administered by the Company).

Currently, the Company provides Service Bureau Logistics only through its
Florida Operations Center. The Company has three contracts under which it
manages and administers the order entry, radio dispatching, routing,
accounting, billing and other internal logistics and quality-assurance
activities for local transportation carriers that furnish non-emergency
transportation to Medicaid beneficiaries and MCO members. During 1997, the
Company managed approximately 1,000,000 trips for these clients, which
generated approximately $12,000,000 in revenues for such clients.

INFORMATION TECHNOLOGY

The Company uses a proprietary software system, RealTime, in each of its
Operations Centers to assist in the management of transportation services.
RealTime contains the program modules necessary for the Company to integrate,
and provide the services associated with, each element of its transportation
management services. These modules are as follows: order entry, dispatch,
routing, operations control and analysis, graphical mapping, mobile data
control and external interface facility.

Currently, RealTime processes approximately 16,000 calls from Recipients per
day through the Company's three Operations Centers. RealTime performs all of
the operation functions associated with the delivery of non-emergency
transportation services on a demand basis and, in the past, has been used by
the

27
<PAGE>

Florida Operations Center to manage ambulance services. However, the Company
intends to limit its application primarily to services relating to the
transportation of individuals in connection with their receipt of non-
emergency medical care. The Company believes that RealTime's sophistication
and focus on services relating to the transportation of Recipients gives the
Company a competitive advantage in this market.

The Company intends to expand RealTime's capability to (i) establish
telephonic interface, thereby improving customer service representative
efficiency, (ii) enhance internet integration, better enabling transportation
providers and Recipients to access scheduling and other information, and
better enabling client payors to access the Company's utilization and customer
service data regarding relevant Recipients, and (iii) enlarge its database
capacity to provide greater data management and analysis capabilities.

RealTime was developed by Automated Dispatch Services, Inc. ("Services")
under the supervision of John Shermyen, the President of Services at such time
and the current President and Chief Executive Officer of the Company. In 1994,
the Company entered into a license agreement with Services pursuant to which
it acquired for a lump sum payment of $150,000 royalty-free rights to use, and
exclusive rights to modify and sublicense the use of, RealTime for general
transportation dispatch purposes and for private ambulance dispatch purposes
after April 1, 1997. However, such license excludes the right to use, or
sublicense the use of, RealTime for general transportation dispatch purposes
in the counties of Monroe, Dade, Broward and Palm Beach, Florida. Such license
also excludes the right to use, or sublicense the use of, RealTime for private
ambulance dispatch purposes other than single-site usages subject to certain
limitations. In January 1996, in connection with its acquisition of Automated
Dispatch Systems, Inc., the Company acquired, for a lump sum payment of
$80,000, exclusive and royalty-free rights to use RealTime for general
transportation dispatch purposes in the counties of Monroe, Dade, Broward and
Palm Beach, Florida. Each of these licenses will terminate automatically upon
the expiration of the RealTime patent, which is scheduled to expire in 2012.
Services has no right to further license RealTime other than for private
ambulance dispatch purposes.

In March 1995, the Company entered into an agreement with E.F. Johnson
Company, a former affiliate of TGIS Partners and a manufacturer of mobile
radio equipment ("E.F. Johnson"), pursuant to which (i) the Company agreed to
assist E.F. Johnson in obtaining leads for the sale by E.F. Johnson of mobile
radio equipment and provided E.F. Johnson with 15 end-user licenses of
RealTime, with the right to resell such licenses to third parties, and (ii)
E.F. Johnson paid the Company a prepayment fee of $150,000 (the "Prepayment
Fee") for potential fees which could be earned by the Company upon the
consummation of such sales of mobile radio equipment. In June 1997, the
Company and E.F. Johnson terminated the agreement in accordance with its
terms. In connection with such termination, the Company provided E.F. Johnson
with an additional 13 end-user licenses of RealTime in lieu of returning the
unearned portion of the Prepayment Fee, bringing the total number of end-user
licenses of RealTime provided to E.F. Johnson to 28. In February 1996, the
Company entered into a license agreement with a transportation carrier,
Curtain Motor Livery Service, Inc., pursuant to which the Company granted to
the carrier for $39,000 a perpetual, non-exclusive and royalty-free license to
use RealTime at a single site in Connecticut for its internal business
purposes, without rights of modification or sublicense. Under the agreement,
the Company agreed to provide the carrier with technical support services for
an annual fee of $6,413, training services for a fee of $5,000 and
installation services. See "Certain Transactions" and Note 3 of Notes to
Financial Statements.

PRINCIPAL MARKETS SERVED

Medicaid

Medicaid, which is jointly funded by federal and state governments and
administered by state governments, represents the largest program providing
health care related services to poor residents of the United States. Most
state Medicaid programs provide beneficiaries with transportation to and from
medically necessary appointments. The Health Care Financing Administration
("HCFA") reported that the Medicaid beneficiary population in 1995 was 36.3
million. The Community Transportation Association of America estimated that
Medicaid outlays by the Federal and state governments in 1995 totaled $176
billion, of which approximately 1%, or $1.2 billion, was expended for non-
emergency transportation.

28
<PAGE>

MCOs

MCOs are managed health care companies that typically provide a
comprehensive range of health care services to individuals, employers and
association groups. Many MCO plans include some level of non-emergency
transportation services to medical facilities as a benefit for its enrolled
members. The Company believes that MCOs increasingly view transportation as an
attractive enrollment incentive for Medicare beneficiaries who are not
otherwise entitled to receive such services under Medicare. To control the
increasing costs of Medicare, the Federal government has encouraged, but not
required, Medicare beneficiaries to enroll in MCO plans. The MCOs compete for
Medicare enrollees on the basis of many factors, including their reputation
for quality services, reduced co-payments and availability of greater
benefits, such as transportation to and from medical facilities. The Company
believes that, by offering transportation management services on a capitated
basis, it is well-positioned to support the marketing efforts of MCOs and
provide a cost-effective outsourcing alternative for the management of
transportation services.

Carrier and Carrier Networks

The Company believes that its management expertise, advanced software system
and its ability to leverage these resources presents a cost-effective
alternative to transportation carriers and carrier networks to outsource
transportation management services. Once the Company has established an
Operations Center in a regional market, local carriers and carrier networks
may elect to utilize the Company's Service Bureau Logistics to manage their
internal logistics requirements. This represents an attractive opportunity for
the Company to expand its Service Bureau Logistics business into these
established markets and generate additional revenues without incurring
significant additional overhead.

Carrier and carrier networks who are potential clients of the Company's
Service Bureau Logistics business include taxi, limousine, ambulance,
ambulette and coach operators. The International Taxi Livery Association
estimated that the U.S. market for taxi and limousine services is
approximately $10 billion annually. The American Ambulance Association
estimates that the U.S. market for ambulance and ambulette services is
approximately $7 billion annually. The Company believes that transportation
logistics accounts for approximately 10% (or $1.7 billion) of the combined
U.S. markets for taxi, limousine, ambulance and ambulette services, annually.

SALES AND MARKETING

Government Agencies

The Company pursues contracts from state and local authorities by responding
to RFPs issued by such authorities. Whenever possible, prior to the issuance
of an RFP, the Company's senior executives meet with senior government
representatives, such as heads of health and human service agencies, to
encourage them to outsource their transportation-related service requirements.
When an RFP is issued by a government agency, the agency ordinarily seeks
comments on the RFP from potential service providers. The Company usually
participates in the comment process, taking the opportunity to demonstrate its
knowledge and understanding of the market to help shape the RFP. Following the
comment period, the RFP is reissued in modified form. In all cases in which
the Company has responded to an RFP, the contracting government agencies have
advised the Company that they gave greater weight to factors, such as the
experience and technical qualifications of the proposed service providers,
than to comparative costs.

MCOs

The Company pursues contracts with MCOs through direct contact by senior
executives of the Company with the marketing and member services personnel of
such organizations. Prospective client MCOs are identified by the Company on
the basis of total number and concentration of enrolled members in a
geographic area. The Company obtains from prospective client MCOs data that
helps it to make a detailed proposal directed to the cost-savings and
marketing opportunities represented by the Company's Brokerage Logistics
Services and capitated contract approach.

29
<PAGE>

OPERATIONS CENTERS

The Company's centralized Operations Centers are designed to maximize
efficiency, reliability and effectiveness. In each Operations Center, incoming
calls from Recipients requesting transportation services are routed through an
automatic call director that optimizes call queuing and records all
communications with digital taping equipment to create a verbal record for the
purposes of accountability and message verification. Customer service
representatives convert requests for transportation into orders that they
enter, through a computer keyboard at each work station, into the RealTime
system to maintain a computerized record of all transportation-related
activities managed by the Operations Center. Requests requiring immediate
attention are automatically routed to the dispatch area or to mobile data
terminals, as appropriate. Reservations for next-day or later transportation
are analyzed for optimal routing, stored, and electronically transferred to
transportation carriers daily to create vehicle manifests for the following
day.

The following table sets forth the location of the Company's primary
Operations Centers and the type of services provided by the Company, the basis
for compensation for such services, the approximate number of eligible
Recipients serviced and the approximate number of trips processed per month
through each Operations Center.

<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
NUMBER OF NUMBER OF
TYPE OF SERVICE COMPENSATION ELIGIBLE TRIPS PROCESSED
OPERATIONS CENTER PROVIDED BASIS RECIPIENTS PER MONTH
----------------- ------------------------ ------------------- ----------- ---------------
<S> <C> <C> <C> <C>
College Park, Georgia Brokerage Logistics Capitation 500,000 165,000
Yalesville, Connecticut Brokerage Logistics Capitation, 200,000 50,000
Fee-for-Service
Miami, Florida Service Bureau Logistics Fee-per-Transaction N/A 35,000
</TABLE>

POTENTIAL NEW MARKETS

In addition to its current markets, the Company believes that there is
significant potential presented by the Americans with Disabilities Act (the
"ADA") and recent "welfare-to-work" initiatives.

Americans with Disabilities Act. The ADA requires municipalities to give
disabled persons equal access to public transportation or provide
complementary paratransit services. Under the ADA, those communities that
offer public transportation must furnish handicapped-accessible transportation
to all individuals who are eligible under ADA guidelines and who live within
3/4 mile of a public transit route. The Company believes that a number of
municipalities will comply with this law by contracting with the private
sector for carrier service and related transportation logistics. The
President's Committee on Employment of People with Disabilities estimates
that, in 1996, there were approximately 49 million people with disabilities in
the United States. The Company estimates that expenditures in that year for
ADA-related transportation totaled $1.1 billion and will increase
substantially as additional municipalities come into compliance. The Company
intends to capitalize on this market by contracting with municipalities to
provide Brokerage Logistics and Service Bureau Logistics for the
transportation of ADA eligible individuals.

Welfare-to-Work Initiatives. Legislation also has been adopted or is
proposed in a number of states to compel welfare recipients to work as a
condition of their receiving continuing benefits. Government furnished or
subsidized transportation to and from the workplace is an element of some of
this legislation. The Company intends to capitalize on this market by
contracting with states to provide services as contemplated by such
legislation on a fee-for-service basis.

GOVERNMENT REGULATION AND SUPERVISION

The delivery of health care services is regulated at both the federal and
state levels. As a participant in the health care industry and as a result of
its involvement with Medicare, Medicaid and other third party payors, the
Company's operations and relationships are subject to extensive and increasing
regulation by a number of governmental entities at the federal, state and
local levels. The laws applicable to the Company

30
<PAGE>

are subject to evolving interpretations, and therefore there can be no
assurance that a review of the Company's operations by federal or state
judicial or regulatory authorities would not result in a determination that
the Company has violated one or more provisions of federal or state law. Any
such determination could have a material adverse effect on the Company.

False and Improper Claims. Under numerous federal laws, including the
Federal False Claims Act (the "False Claims Act"), the federal government is
authorized to impose criminal, civil and administrative penalties on any
health care provider that files a false claim for reimbursement from a federal
health care program. A "federal health care program" is any plan or program
that provides health benefits, whether directly, through insurance, or
otherwise, which is funded directly, in whole or in part, by the United States
Government (e.g., Medicare, Medicaid, and CHAMPUS). Excluded from the
definition of federal health care program is the Federal Employee Health
Benefits Program. The False Claims Act provides for a civil penalty of not
less than $5,000 and not more than $10,000 per false claim and between two or
three times the amount of damages depending on the facts and circumstances.
Recently enacted federal legislation also imposes federal criminal penalties
on persons who file false or fraudulent claims with private insurers. While
the criminal statutes are generally reserved for instances of fraud, the civil
and administrative penalty statutes are being applied by the government in an
increasingly broad range of circumstances. Civil sanctions may be imposed if
the claimant knew or should have known that billing was improper. The
government also has taken the position that claiming reimbursement for
services that are substandard is a violation of these false claims statutes if
the claimant knew or should have known that the care was substandard or
rendered under improper circumstances. Private persons may also bring civil
actions to enforce the False Claims Act under a qui tam or "whistle-blower"
action. If successful, the qui tam plaintiff may receive a percentage of the
government's recovery thereby increasing the incentive for such suits. Under
certain lower court decisions, claims derived from a violation of the Anti-
Kickback Statute (as defined herein) have been deemed to be, or may under
certain circumstances be construed to be, false claims.

The risk of exposure to civil actions under the False Claims Act exists
whether the contractual arrangement is fee-for-service or capitated. In a fee-
for-service system, the government has and continues to prosecute health care
providers alleging that health care providers overutilized the services and
committed fraudulent activities which include, but are not limited to, billing
for services never rendered, fictitious enrollment and illegal solicitations
and remunerations. While utilizing a managed care capitated payment system may
reduce the risks of overutilization and certain fraudulent activities, the
government is similarly active in prosecuting providers who are providing
services through a capitated arrangement and alleging claims of
underutilization and other types of fraudulent activities, including
fraudulent subcontracts and kickbacks. Furthermore, under federal law, an
entity which is found to submit requests for payment for claims which involve
excessive charges or unnecessary services or which fails to furnish medically
necessary services may be excluded from participating in a federal health care
program.

Non-emergency transportation is one of many services identified by states
and the Office of Inspector General ("OIG") as being a source of fraud and
abuse activity in the Medicaid program. Several states have reported a variety
of fraudulent activities which include billing Medicaid for more miles than
actually provided, billing Medicaid for trips never provided, and billing for
Medicaid covered transportation when the beneficiaries had other means of
transportation. Because these states concluded that such activities result in
increasing non-emergency transportation costs, HCFA created a Medicaid
Transportation Technical Advisory Group to study how such services can be
provided more efficiently and the states themselves are intensifying their
scrutiny of non-emergency transportation claims. Such allegations of fraud and
abuse and the resulting increasing costs have led members of Congress to
consider eliminating non-emergency transportation as a covered Medicaid
service. The OIG has recommended that states use brokers, such as the Company,
where appropriate to help manage non-emergency transportation.

Federal Anti-Kickback Statute. A federal law commonly known as the "Anti-
Kickback Statute" prohibits the offer, solicitation, payment or receipt of
anything of value (direct or indirect, overt or covert, in cash or in

31
<PAGE>

kind) which is intended to induce business for which payment may be made under
a federal health care program. The type of remuneration covered by the Anti-
Kickback Statute is very broad. It includes not only kickbacks, bribes and
rebates, but also proscribes any such remuneration, whether made directly or
indirectly, overtly or covertly, in cash or in kind. Moreover, prohibited
conduct includes not only remuneration intended to induce referrals, but also
remuneration intended to induce the purchasing, leasing, arranging or ordering
of any goods, facilities, services, or items paid for by a federal health care
program. The Anti-Kickback Statute has been interpreted broadly by a number of
courts to prohibit remuneration that is offered or paid for otherwise
legitimate purposes if one purpose of the payment is to induce referrals.
Payments in return for participating in a network may, under certain
circumstances, be deemed to violate the Anti-Kickback Statute. Many states,
including those in which the Company does business, have adopted similar
prohibitions against payments intended to induce referrals of Medicaid and
other third-party payor patients.

In part to address concerns regarding the implementation of the Anti-
Kickback Statute, the federal government has published regulations that
provide exceptions or "safe harbors" for certain transactions that are deemed
not to violate the Anti-Kickback Statute. Among the safe harbors included in
the regulations are transactions involving discounts offered to health plans
by providers, such as ambulance companies. Congress recently added a
significant new statutory exception related to "remuneration between an
organization and an individual or entity" if the organization is a Medicare
risk contracting organization or if the remuneration is provided pursuant to a
written agreement that places the individual or entity at substantial
financial risk for the cost or utilization of services. Regulations
implementing the foregoing statute have not yet been adopted, but are expected
to be enacted soon. Based on the Company's relationship with providers, the
Company may not satisfy all the requirements necessary to qualify for
protection under the safe harbor regulations described above. The failure of
an activity to qualify under a safe harbor provision, while potentially
leading to greater regulatory scrutiny, does not render the activity
automatically illegal under the Anti-Kickback Statute. Conduct falling outside
the safe harbors will be judged by government regulators on a case-by-case
basis based on the specific facts and circumstances.

To the extent the Company is deemed to be a referral source, the financial
arrangements under such agreements could be subject to scrutiny and
prosecution under the Anti-Kickback Statute. Each offense under the Anti-
Kickback Statute is classified as a felony and is punishable by a criminal
fine of up to twenty-five thousand dollars ($25,000) and/or imprisonment of up
to five (5) years; a civil money penalty of fifty thousand dollars ($50,000)
for each violation and/or civil damages of not more than three times the total
amount of remuneration offered, paid, solicited or received may be imposed
without regard to whether any portion of such remuneration was for a lawful
purpose. Both the offeror and the recipient of the illegal remuneration are
potentially liable. In addition, violators are subject to exclusion from
participation in the federal health care programs, regardless of whether they
also have been convicted under the criminal penalty provisions or have been
found liable under the civil monetary penalty provisions of the Anti-Kickback
Statute. Also, there is a risk that, in a civil lawsuit to enforce a contract
that contains a structure in violation of the Anti-Kickback Statute, a court
might conclude that the contract is unenforceable as against public policy.

There are several aspects of the Company's arrangements to which the Anti-
Kickback Statute may be relevant. For example, the government may construe
some of the Company's managed care contracting activities as arranging for the
referral of patients to the entities with whom the Company is providing non-
emergency transportation management services.

As a component of the recently enacted HIPAA, Congress directed the
Secretary of the U.S. Department of Health and Human Services to issue
advisory opinions regarding compliance with the Anti-Kickback Statute. The
advisory opinion mechanism is authorized for a trial period, beginning six
months after the date of enactment, August 21, 1996. Advisory opinions are
available concerning what constitutes prohibited remuneration within the
meaning of the Anti-Kickback Statute, whether an arrangement satisfies the
statutory exceptions to the Anti-Kickback Statute, whether an arrangement
meets a safe harbor, what constitutes an illegal inducement to reduce or limit
services to individuals entitled to benefits covered by the Anti-Kickback

32
<PAGE>

Statute, and whether an activity constitutes grounds for the imposition of a
civil or criminal penalty under the applicable exclusion, civil money penalty
and criminal provisions. Advisory opinions, however, will not assess fair
market value for any goods, services or property or determine whether an
individual is a bona fide employee within the meaning of the Internal Revenue
Code. The statutory language makes clear that advisory opinions are available
for both proposed and existing arrangements. The failure of a party to seek an
advisory opinion, however, may not be introduced into evidence to prove that
the party intended to violate the Anti-Kickback Statute. The Company has not
sought, and has no present intention to seek, an advisory opinion regarding
any aspect of its current operations or arrangements and physicians.

State Fraud and Abuse Laws. Numerous states have adopted laws that are
substantially similar to the federal Anti-Kickback Statute, and a few have
enacted laws similar to the False Claims Act. Virtually all states prohibit
false claims and fraudulent billing practices connected with insurance
payments, and impose substantial penalties for such insurance fraud.

Insurance Laws. Laws in all states regulate the business of insurance and
the operation of MCOs. Many states also regulate the establishment and
operation of networks of health care providers as well as utilization review
and claims adjudication activities. While these laws do not generally apply to
companies that provide management services to government agencies, MCOs and
transportation carriers, they have been construed in some states to apply to
companies which provide management services to physician networks,
particularly if there is an assumption of risk for the provision of services,
and there can be no assurance that regulatory authorities of the states in
which the Company operates would not apply these laws to require licensure of
the Company's operations as an insurer, as an MCO, as a provider network or
other regulated entity. The Company believes that its current operations are
in compliance with these laws in the states which it currently does business,
but there can be no assurance that future interpretations of insurance and
health care network laws by regulatory authorities in these states or in the
states into which the Company may expand will not require licensure or a
restructuring of some or all of the Company's operations.

The National Association of Insurance Commissioners ("NAIC"), a non-binding
advisory group, in 1995 endorsed a policy proposing the state regulation of
risk assumption by providers and opined that certain risk-transferring
arrangements may entail the business of insurance, to which state licensure
laws apply, but that licensure laws should not apply where an unlicensed
entity contracts to assume "downstream risk" from a duly licensed health
insurer or MCO for health care provided to that carrier's enrollees. The
policy proposes prohibiting providers from entering into capitated payment or
other risk sharing contracts except through MCOs, insurance companies or other
regulated entities. Several states have adopted legislation or regulations
implementing the NAIC policy in some form. In some states where such
legislation or regulations have been adopted, health care providers are
precluded from entering into capitated contracts directly with employers,
individuals and benefit plans unless they qualify to do business as MCOs or
insurance companies. The Company may not be deemed a health care provider, in
which case it may still be subject to licensure as an insurance company but
may be able to accept downstream risk from other entities, such as state
government agencies.

FEDERAL AND STATE INITIATIVES

Fraud and Abuse. In the recently enacted 1997 Budget Bill and HIPAA,
Congress has responded to perceived fraud and abuse in the Medicare and
Medicaid programs. Such legislation has fortified the government's enforcement
authority with increased resources and greater civil and criminal penalties
for offenses. The Company anticipates that there will be further restrictive
legislative and regulatory measures to reduce fraud, waste and abuse in the
Medicare and Medicaid programs. Due to uncertainties regarding the ultimate
features of reform initiatives and their enactment and implementation, the
Company cannot predict which, if any, of such reform proposals will be
adopted, when they may be adopted or what impact they may have on the Company.

Numerous Reform Initiatives. The Company anticipates that Congress and state
legislatures will continue to review and assess alternative health care
delivery and payment systems. In addition to extensive

33
<PAGE>

government health care regulations, there are numerous initiatives on the
federal and state levels for comprehensive reforms affecting the payment for,
and availability of, health care services. These initiatives include
reductions in Medicare and Medicaid payments, trends in adopting managed care
for Medicare, Medicaid and workers' compensation patients, and regulation of
entities that provide managed care.

FACILITIES

The Company's headquarters are located in College Park, Georgia in a 2,075
square foot suite leased by the Company in an office building. The Company
conducts its operations from three leased Operations Centers in College Park,
Georgia, Yalesville, Connecticut and Miami, Florida, totaling 11,545 square
feet. The Company also utilizes two leased field offices in Savannah and
Albany, Georgia to support the Georgia Operations Center, totaling 3,700
square feet. The lease terms vary from 1 to 5 years, with options to renew,
and are at market rates. The Company intends to lease an additional space in
College Park, Georgia for its operations. The Company believes that its
facilities are well-maintained and in good operating condition and, together
with such additional space in College Park, Georgia, are adequate for their
present level of operations.

EMPLOYEES

As of March 31, 1998, the Company had 155 full-time employees. None of the
Company's employees are represented by a union. The Company considers its
employee relations to be good.

LEGAL PROCEEDINGS

The Company is a defendant in three pending legal proceedings which
management believes are incidental to the Company's business. The Company does
not believe that either of these actions will have a material adverse effect
on the Company's financial position or results of operations.

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<PAGE>

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND OTHER KEY EMPLOYEES

Executive officers, directors and key employees of the Company and their
ages are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
John L. Shermyen.................... 44 Chairman of the Board of
Directors(3), President and Chief
Executive Officer
Vice President, Chief Financial
Michael E. Weksel................... 34 Officer and Director
Chief Operating Officer, Vice
John M. Whitcomb.................... 48 President of Operations
Gerald E. Souza..................... 39 Vice President of Marketing
Albert Cortina...................... 34 Corporate Controller
William C. Walter, Jr............... 37 Implementation Director
Andrew Winner....................... 38 Senior Software Engineer
John Pappajohn (1)(2)............... 69 Director
Derace L. Schaffer, M.D. (1)(2)..... 50 Director
William Weksel (1).................. 61 Director
</TABLE>
- ----------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee

(3) Effective upon the consummation of the Offering

John L. Shermyen is one of the founders of the Company's business, has been
the President and Chief Executive Officer of the Company since 1994 and,
effective upon the consummation of the Offering, will be the Chairman of the
Board of Directors of the Company. From 1987 to 1995, he was President and
Chief Executive Officer of Automated Dispatch Services, Inc. He
conceptualized, and managed the design and development of, RealTime prior to
his employment with the Company. Mr. Shermyen received a B.A. and a Master of
Science degree in geography and geographic information systems from the
University of Florida.

Michael E. Weksel is one of the founders of the Company and has been its
Vice President and Chief Financial Officer since 1994. From 1993 to 1994, he
was Vice President of Viking Mobile Communications, Inc., a radio spectrum
development and trading company. From 1992 to 1993, he provided consulting
services to E.F. Johnson Company, directing the implementation of a closed
loop MRII enterprise computing system. From 1991 to 1992, he worked as a self-
employed financial and computer consultant. Mr. Weksel received a B.S. in
computer science from the State University of New York in Albany and an M.B.A.
from Columbia University Business School.

John M. Whitcomb has been the Chief Operating Officer and Vice President of
Operations since July 1998. From 1994 to 1998, he served as Vice President of
Operations, Senior Vice President and then President of Adjustco, Inc., a
customer service call center and insurance claims operation and a division of
Value Health, Inc. From 1997 to 1998, he also served as the Chief Operating
Officer of ImEdge Technology, Inc., an intellectual property company. From
1988 to 1994, he served as President of Arraytek, Inc., a start-up software
company which he founded. Mr. Whitcomb received a B.S. from Rensselaer
Polytechnic Institute and an M.B.A. from the University of Wisconsin.

Gerald E. Souza has been the Vice President of Marketing since July 1998.
Prior to joining the Company, he worked for eight years at American Medical
Response, a transportation services company, where as Vice President of
Managed Care and Business Development, he negotiated and implemented their
first at-risk medical transportation agreement and co-developed a national
advice/demand management program. Mr. Souza received his training in Para-
medicine from Stanford University and his A.D.N. in Nursing from Cabrillo
College.

35
<PAGE>

John Pappajohn has been a Director of the Company since March 1997. Since
1969, Mr. Pappajohn has been the sole owner of Pappajohn Capital Resources, a
venture capital firm, and the President of Equity Dynamics, Inc., a financial
consulting firm, both based in Des Moines, Iowa. Mr. Pappajohn currently
serves as a director of the following public companies: American Physician
Partners, Inc., The Care Group, Inc., Core, Inc., HealthDesk Corporation, PACE
Health Systems, Inc. and Patient Infosystems, Inc.. Mr. Pappajohn received a
B.A. from the University of Iowa.

Albert Cortina has been the Corporate Controller of the Company since
November 1997. Prior to joining the Company, he worked for five years in
various executive positions at Premier Practice Management, a physician
practice management organization, and its successor, Caremark/MedPartners
Physicians Services, Inc. He received his B.S. from Florida State University
and is a certified public accountant.

William C. Walter, Jr. has been the Implementation Director of the Company
since September 1997. Prior to joining the Company, he served for five years
as Director of Communications at AMR West, a transportation services company,
where he developed and implemented a regional call center for emergency and
non-emergency transportation services and managed multiple operational units
in California.

Andrew Winner has been the Senior Software Engineer of the Company since
1996. From 1994 to 1996, he worked as a computer programmer at The Arbitrage
Group, L.P. Prior to 1994, he worked for five years as a software engineer at
Automated Dispatch Services, Inc., where he assisted in the design and
development of RealTime. He received a B.S.E. in computer and information
sciences and an M.E. in computer software engineering from the University of
Florida.

Derace L. Schaffer, M.D. has been a Director of the Company since March
1997. He is also President of The Lan Group, a venture capital firm
specializing in health care investments, and The Ide Imaging Group, P.C., a
large multispecialty medical practice. Dr. Schaffer presently serves on the
board of directors of American Physician Partners, Inc., The Care Group, Inc.
and Oncor, Inc., and he is the Chairman of Patient InfoSystems, Inc. He
received his postgraduate radiology training at the Harvard Medical School and
Massachusetts General Hospital, where he was Chief Resident. Dr. Schaffer is a
member of Alpha Omega Alpha, the national medical honor society, and is
Clinical Professor of Radiology at the University of Rochester School of
Medicine.

William Weksel is one of the founders of the Company and has been a Director
of the Company since 1994. Mr. Weksel resigned as Chairman of the Board of
Directors of the Company in July 1998 in connection with the Company's
application for approval for quotation on the Nasdaq Stock Market. Such
resignation will be effective upon the listing of the Common Stock on the
Nasdaq Stock Market. From 1992 to 1997, he was Chairman and Chief Executive
Officer of E.F. Johnson Company, a manufacturer of mobile radio communications
equipment. Mr. Weksel received a B.A. from Queens College and a Ph.D. in
communications from the University of Illinois, and was a National Science
Foundation Post Doctoral Fellow at the Massachusetts Institute of Technology.
From 1987 to 1990, Mr. Weksel was President of Brooke Group, Inc., a holding
company, which in turn held controlling interests in Western Union Corp.,
Liggett Group, Inc., and MAI Basic Four, Inc. In addition, during that period,
Mr. Weksel, at varying times was Chairman of Liggett, Vice Chairman of Western
Union and Chairman and Chief Executive Officer of MAI Basic Four, each of
which companies was listed on the New York Stock Exchange. Between 1975 and
1984, Mr. Weksel was the Chairman of the Board of Directors, President and
Chief Executive Officer of Information Displays, Inc. ("IDI"), a manufacturer
of computer assisted design and manufacturing systems. In 1986, the Securities
and Exchange Commission commenced an action against Mr. Weksel alleging
certain violations of Federal securities laws in connection with IDI and
concurrently, and solely for the purposes of settlement and without admitting
or denying the allegations of the complaint, Mr. Weksel consented to entry of
a judgment enjoining him from violating certain provisions of the Federal
securities laws. Messrs. Michael Weksel and William Weksel are son and father.

The Company intends to add two additional non-employee directors to the
Board within the next six to twelve months.

36
<PAGE>

DIRECTORS COMPENSATION AND COMMITTEES

The Board of Directors currently has five directors, two of whom--John L.
Shermyen and Michael E. Weksel--are also officers of the Company and three of
whom--William Weksel, John Pappajohn and Derace L. Schaffer--are not officers
of the Company. Each director serves a one-year term that expires at each
annual meeting of stockholders.

The directors currently receive no annual compensation for their service on
the Board of Directors. Following completion of the Offering, the Company will
pay its directors $500 for each directors' meeting attended (plus
reimbursement for out-of-pocket expenses). Under the Company's 1998 Stock
Option Plan, future non-employee directors will automatically be granted
options to purchase 10,000 shares of Common Stock at the commencement of their
service on the Board of Directors and options to purchase 7,500 shares of
Common Stock on the first and second anniversaries of the commencement of
their service on the Board of Directors, subject to certain terms regarding
vesting, exercisability and other material terms. Future non-employee
directors are not eligible to receive any awards under the 1998 Stock Option
Plan other than the automatic grants of stock options. Current non-employee
directors are not eligible to receive any awards under the Company's 1998
Stock Option Plan. In 1997, the Company granted options under the 1995 Stock
Option Plan (i) to John L. Shermyen to purchase 200,000 shares of Common Stock
at an exercise price of $0.26 per share, (ii) to Michael E. Weksel to purchase
93,330 shares of Common Stock at an exercise price of $0.26 per share, (iii)
to John Pappajohn to purchase 80,000 shares of Common Stock at an exercise
price of $2.50 per share, (iv) to Derace L. Schaffer to purchase 80,000 shares
of Common Stock at an exercise price of $2.50 per share and (v) to William
Weksel to purchase 80,000 shares of Common Stock at an exercise price of $2.50
per share. See "--Stock Option Plans."

The Board of Directors currently includes a Compensation Committee and an
Audit Committee. The Compensation Committee is composed of three directors,
Messrs. William Weksel, Pappajohn and Schaffer, and it determines compensation
for executive officers of the Company and administers the Company's Stock
Option Plans. The Audit Committee is composed of two directors, Messrs.
Pappajohn and Schaffer, and it reviews the scope and results of audits and
internal accounting controls and all other tasks performed by independent
public accountants of the Company.

EXECUTIVE COMPENSATION

The following table sets forth certain summary information concerning
compensation paid to the Company's President and Chief Executive Officer and
the Company's Vice-President and Chief Financial Officer during the fiscal
years ended December 31, 1995, 1996 and 1997. No other executive officer
received a salary exceeding $100,000 in any such fiscal year.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------
1997 ANNUAL COMPENSATION(1) AWARDS PAYOUTS
------------------------------------ ---------- -------
NAME AND OTHER ANNUAL SECURITIES LTIP ALL OTHER
PRINCIPAL FISCAL COMPENSATION UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($)(3) ($) OPTIONS ($) ($)
--------- ------ ---------- ------------ ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John L. Shermyen........ 1997 155,630 -- -- 200,000 -- --
President and Chief 1996 140,000 -- -- -- -- --
Executive Officer 1995 128,000 -- -- 1,000,000 -- --
Michael E. Weksel (2)... 1997 140,000 -- -- 93,330 -- --
Vice-President and 1996 110,000 -- -- -- -- --
Chief Financial Officer 1995 110,000 -- -- 200,000 -- --
</TABLE>

37
<PAGE>

- ---------------------
(1) The compensation described in this table does not include medical, dental
or other benefits generally available to all salaried employees of the
Company, as well as certain perquisites and other personal benefits, the
value of which does not exceed the lesser of $50,000 or 10% of the named
executive officers total salary and bonus reported in this table.
(2) During fiscal 1995 and 1996 and the period from January 1, 1997 to June
15, 1997, the salary for Mr. Weksel was paid by an affiliate of the
Company's controlling stockholder.
(3) This does not include bonuses of $50,000 and $45,000 granted by the
Company to Messrs. Shermyen and Weksel, respectively, in March 1998, which
are payable by the Company in December 1998. These bonuses were granted by
the Company's Board of Directors in its discretion and were not formula-
based.

OPTION GRANTS IN 1997

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME OPTIONS GRANTED 1997 PER SHARE DATE
- ---- --------------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
John L. Shermyen..... 200,000 27.6% $0.26 2007
Michael E. Weksel.... 93,330 12.9% $0.26 2007
</TABLE>

1997 YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED ON VALUE ---------------------------------- -------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- --------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John L. Shermyen........ 400,000 $999,200 200,000 600,000 $499,600 $1,447,800
Michael E. Weksel....... 80,000 $199,840 40,000 173,330 $ 99,920 $ 409,179
</TABLE>
- --------
(1) Based upon a value of $2.50 per share, the fair market value determined by
the Company's Board of Directors with respect to the exercise price of
employee stock options granted in November 1997.

STOCK OPTION PLANS

1998 Stock Option Plan. In June 1998, the Board of Directors and the
stockholders of the Company approved the establishment of the Company's 1998
Stock Option Plan. Under the 1998 Stock Option Plan, the Company provides for
the granting of options to key employees, non-employee directors, consultants
and independent contractors who provide services to the Company to purchase
not more than an aggregate of 1,000,000 shares of Common Stock, subject to
adjustment under certain circumstances. The 1998 Stock Option Plan is divided
into two components: (i) a discretionary option grant program and (ii) an
automatic option grant program.

Under the discretionary option grant program, both "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986 and
non-qualified stock options to purchase shares of the Common Stock may be
granted to employees, consultants and independent contractors, although
"incentive stock options" may only be granted to employees. The Compensation
Committee will, with regard to each option, determine the number of shares
subject to the option, the term of the option (which shall not exceed ten
years), the exercise price per share of Common Stock subject to the option,
the vesting schedule and other material terms of the option. The vesting
period for an option will automatically accelerate upon the acquisition of the
Company as a result of a stockholder-approved merger or asset sale, subject to
certain conditions. In addition, the 1998 Stock Option Plan authorizes the
Compensation Committee to automatically accelerate the vesting of an option in
connection with a change in control of the Company or the

38
<PAGE>

optionholder's grant. The 1998 Stock Option Plan authorizes the Compensation
Committee to grant to eligible officers limited stock appreciation rights
which allow them to surrender outstanding options, to the extent those options
are exercisable for vested shares of Common Stock, in the event of a hostile
takeover. For each option surrendered, such officer will receive a payment in
cash in an amount equal to the excess of the take-over price of the vested
shares subject to the surrendered option over the aggregate exercise price
payable for such vested shares.

Under the automatic grant program, future non-employee directors will
automatically be granted options to purchase 10,000 shares of Common Stock at
the commencement of the term of their service on the Board of Directors and
options to purchase 7,500 shares of Common Stock on the first and second
anniversaries of the commencement of their service on the Board of Directors.
The exercise price shall be the fair market value of the Common Stock on the
date that the option is granted and each option fully vests on the first
anniversary of the date of its grant. Future non-employee directors are not
eligible to receive any awards under the 1998 Stock Option Plan other than the
automatic grants of stock options. Current non-employee directors are not
eligible to receive any awards under the 1998 Stock Option Plan. The shares
subject to each option will vest immediately during the non-employee
director's service on the Board of Directors of the Company upon the
acquisition of the Company as a result of a stockholder-approved merger or
asset sale or a change in control. Each option has a maximum term of ten years
from the date of its grant. Upon cessation of a non-employee director's
service on the Board of Directors for any reason, the option granted to such
non-employee director will remain exercisable for a twelve-month period and,
during such period, such option may only be exercised for the number of shares
vested at the time of the non-employee's cessation of service. Under the 1998
Stock Option Plan, each non-employee director has limited stock appreciation
rights pursuant to which such non-employee director has a thirty-day period
upon the successful completion of a hostile tender offer for more than 50% of
the outstanding voting securities of the Company in which to surrender such
non-employee director's option. For each option surrendered, such non-employee
director will receive a payment in cash in an amount equal to the excess of
the tender offer price of the shares subject to the surrendered option over
the aggregate exercise price payable for such vested shares.

1995 Incentive Stock Option Plan. The Company's 1995 Incentive Stock Option
Plan, as amended (the "1995 Stock Option Plan" and, together with the 1998
Stock Option Plan, the "Stock Option Plans"), provides for the granting of
options to key employees and non-employee directors to purchase not more than
an aggregate of 2,166,670 shares of Common Stock, subject to adjustment under
certain circumstances. Some or all of the options granted to key employees
under the 1995 Stock Option Plan are "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, and the options
granted to non-employee directors are non-qualified stock options. No option
is exercisable until the first to occur of (i) any Sale Transaction (as
defined in the 1995 Stock Option Plan) and (ii) the first date on or after
which the Company becomes subject to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended. Notwithstanding the
foregoing, options vested prior to June 2, 1997 are exercisable at any time
after June 2, 1997 and prior to the tenth anniversary of the date of their
grant. Each option expires ten years after the date of its grant or, if
granted to a Substantial Stockholder (as defined in the 1995 Stock Option
Plan), 5 years after the date of its grant.

Grants of options under the Stock Option Plans and all questions of
interpretation with respect to the Stock Option Plans are determined by the
Board of Directors of the Company. The Board of Directors has appointed the
Compensation Committee to administer matters under the 1998 Stock Option Plan
and the 1995 Stock Option Plan relating to key employees. As of the date of
this Prospectus, no options to purchase shares of Common Stock have been
granted under the 1998 Stock Option Plan, and options to purchase 2,013,330
shares of Common Stock have been granted under the 1995 Stock Option Plan and
options to purchase 210,000 shares of Common Stock have been granted under the
1998 Stocks Option Plan. Although options under the 1995 Stock Option Plan to
purchase 153,340 shares of Common Stock are still available, no further grants
will be made pursuant to the 1995 Stock Option Plan.

39
<PAGE>

EMPLOYMENT AGREEMENTS

In July 1998, the Company entered into employment agreements (each, an
"Agreement"), with John L. Shermyen, Michael E. Weksel, John Whitcomb and
Gerald Souza (the "Executives"), pursuant to which Mr. Shermyen serves as
President and Chief Executive Officer, Mr. Weksel serves as Vice President and
Chief Financial Officer, Mr. Whitcomb serves as Chief Operating Officer and
Vice President of Operations and Mr. Souza serves as Vice President of
Marketing. Under the Agreements, Mr. Shermyen receives $200,000, Mr. Weksel
receives $185,000, Mr. Whitcomb receives $150,000 and Mr. Souza receives
$135,000, as their respective annual base salaries, subject to periodic
increases (if any) by amounts as determined by the Company's Board of
Directors in its sole discretion. The Executives are also entitled to
participate in all benefit, pension, retirement, savings, welfare and other
employee benefit plans and policies in which members of the Company's senior
management are entitled to participate.

Messrs. Shermyen and Weksel are entitled to incentive compensation in the
form of bonuses and stock option grants pursuant to the terms of the Company's
1998 Stock Option Plan and any other plans adopted by the Company, as
determined by the Board of Directors in its sole discretion. Messrs. Whitcomb
and Souza are entitled to receive guaranteed bonuses of $37,500 and $33,750,
respectively, at the end of their first year of employment with the Company.
Messrs. Whitcomb and Souza may also receive annual bonuses based on certain
performance criteria. With respect to their first year of employment with the
Company, such bonus may be up to $22,500 and $6,750, respectively, and with
respect to each year thereafter, such bonuses may be up to 40% and 30%,
respectively, of their then current annual base salaries. Mr. Whitcomb also
has received options to purchase 150,000 shares of Common Stock and Mr. Souza
has received options to purchase 60,000 shares of Common Stock under the
Company's 1998 Stock Option Plan at an average price of $10 per share. These
options become exercisable in five equal installments commencing on the first
anniversary of the date of their grant.

The initial term of each Agreement is three years, commencing in July 1998
and terminating in July 2001. Such initial term is automatically renewed for
successive one-year terms unless notice of non-renewal is given by the Company
or the Executive at least three months prior to the end of the then current
term. Each Agreement provides for a severance payment in an amount equal to
the Executive's annual base salary at the time of termination, payable in
equal monthly installments for twelve months, in the event the Executive is
terminated by the Company without Cause (as defined in the Agreement) or he
resigns for Good Reason (as defined in the Agreement) or following a Change of
Control (as defined in the Agreement). In the event that the Executive is
terminated for Cause or he dies, becomes disabled or voluntarily terminates
his employment (without Good Reason), he is not entitled to any severance
payment. In addition, each Agreement prohibits the Executive from competing
with the Company or soliciting any employees of the Company during his
employment and for a period of one year thereafter or disclosing any of the
Company's confidential information acquired during his employment at any time.
Each Agreement also provides that all designs, inventions and improvements
that the Executive develops during his employment and which relate to the
Company's business belong solely to the Company. No assurance can be given
that the restrictive covenants contained in the Agreements would be
enforceable by the Company, in whole or in part, under applicable state law.

40
<PAGE>

CERTAIN TRANSACTIONS

From March 1994 to August 1995, TGIS Partners, a New York partnership of
which William Weksel and Robert Davies were partners prior to its dissolution
in June 1998, loaned the Company an aggregate amount of $270,000, evidenced by
a promissory note bearing interest at a rate of 7% per annum and maturing on
January 31, 2002. In March 1997, TGIS Partners canceled the note and
contributed the remaining principal balance consisting of $270,000 and accrued
interest consisting of $46,000 to the Company.

In March 1995, the Company entered into an agreement with E.F. Johnson
Company, a company of which William Weksel was Chairman and Chief Executive
Officer and a manufacturer of mobile radio equipment ("E.F. Johnson"),
pursuant to which (i) the Company agreed to assist E.F. Johnson in obtaining
leads for the sale by E.F. Johnson of mobile radio equipment and provided E.F.
Johnson with 15 end-user licenses of RealTime, with the right to resell such
licenses to third parties, and (ii) E.F. Johnson paid the Company a prepayment
fee of $150,000 (the "Prepayment Fee") for potential fees which could be
earned by the Company upon the consummation of such sales of mobile radio
equipment. In June 1997, the Company and E.F. Johnson terminated the agreement
in accordance with its terms. In connection with such termination, the Company
provided E.F. Johnson with an additional 13 end-user licenses of RealTime in
lieu of returning the unearned portion of the Prepayment Fee, bringing the
total number of end-user licenses of RealTime provided to E.F. Johnson to 28.

To raise additional working capital, the Company entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") in March 1997 with John
Pappajohn and Derace L. Schaffer, M.D. (the "Purchasers") pursuant to which
the Company sold an aggregate of 1,948,300 shares of Common Stock to six
investors, including Messrs. Pappajohn and Schaffer. Such investors paid an
aggregate purchase price of $500,000 for the shares. Under the Stock Purchase
Agreement, the Purchasers also agreed to purchase an aggregate of 97,415
shares of Preferred Stock or designate substitute purchasers for some or all
of such shares of Preferred Stock. In June 1997, Mr. Pappajohn and certain
other investors designated by the Purchasers and the Company, including Mr.
Shermyen, purchased the 97,415 shares of Preferred Stock. Such investors paid
an aggregate purchase price of $1,000,000 for the shares of Preferred Stock.
Upon the effectiveness of the Registration Statement, such shares of Preferred
Stock shall convert into 974,150 shares of Common Stock.

In March 1997, the Company issued 16,250 shares of Common Stock to Mr.
Shermyen for a purchase price of $4,170.

The Company provides dispatch services to an entity (the "Client") which was
controlled by certain of the Company's minority stockholders until May 1997.
Dispatch services are provided pursuant to an agreement with the Client in
connection with a transportation contract between the Client and a
municipality in South Florida (the "Florida Contract"). Under the terms of the
agreement, the Company earned $2.65 per trip processed on behalf of the Client
under the Florida Contract. In a related agreement, the Company paid to the
principal stockholders of the Client a fee of $1.00 for each trip processed by
the Company under the Florida Contract. Effective May 31, 1997, the Company,
the Client and the principal stockholders of the Client agreed to amend the
terms of the previously described agreements. Under the revised terms
beginning in June 1997, the Company earns $1.65 per trip processed on behalf
of the Client and pays no fees to the Client or the principal stockholders of
the Client. Under the agreements, the Company recorded gross revenues from the
Client of approximately $1,925,000 and $553,000 in 1996 and 1997,
respectively, and paid fees to the principal stockholders of the Client of
approximately $726,000 and $211,000 in 1996 and 1997, respectively. Such fees
have been recorded as a reduction of revenues under the Florida Contract.

The Company provides dispatch services to another entity ("Health Trans")
which was controlled by certain of the minority stockholders until May 1997.
The agreement with Health Trans expires in December 2025. Under the terms of
the agreement, the Company earns $125 per week for each of Health Trans'
vehicles for which the Company provides dispatch services. During 1996 and
1997, the Company recorded revenues of approximately $200,000 and $271,000,
respectively in connection with this agreement.

The Company has adopted a policy providing that all future material
transactions between the Company and its officers, directors and other
affiliates must (i) be approved by a majority of the members of the Company's
Board of Directors and by a majority of the disinterested members of the
Company's Board of Directors and (ii) be on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.

41
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of March 31, 1998 and as
adjusted to reflect the sale of the shares of Common Stock offered hereby with
respect to (i) each person known by the Company to own beneficially more than
5% of the outstanding shares of Common Stock, (ii) each of the Company's
directors, (iii) each Selling Stockholder, and (iv) all directors and
executive officers as a group.

<TABLE>
<CAPTION>
BENEFICIAL BENEFICIAL
OWNERSHIP PRIOR OWNERSHIP AFTER
TO OFFERING(2)(3) NUMBER OF OFFERING(2)(4)(5)
----------------- SHARES -----------------
BENEFICIAL OWNER(1) NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
William Weksel (6)............... 3,710,774 40.6% 1,000,000 2,710,774 23.8%
John Pappajohn (7)............... 1,030,360 11.3 -- 1,030,360 9.0
Derace L. Schaffer, M.D. (8)..... 1,004,150 11.0 -- 1,004,150 8.8
John L. Shermyen (9)............. 723,370 7.8 -- 723,370 6.3
Michael E. Weksel (10)........... 514,706 5.6 -- 514,706 4.5
Directors and Executive Officers
as Group (five persons)......... 6,983,360 72.8 -- 5,983,360 50.4
Robert H. Davies................. 752,556 8.3 -- 752,556 6.6
Edgewater Private Equity Fund II,
L.P. (11)....................... 705,910 7.8 -- 705,910 6.2
Deanna Weksel and Warren
Firstenberg, as Trustee under
Trust made April 2, 1998........ 496,150 5.5 -- 496,150 4.4
Edward Steinberg (12)............ 245,960 2.7 -- 245,960 2.2
Martin Zilber.................... 232,880 2.6 -- 232,880 2.1
Ann Pappajohn Inter Vivos Trust
1989............................ 100,000 1.1 -- 100,000 *
Halkis, Ltd. (13)................ 100,000 1.1 -- 100,000 *
Thebes, Ltd. (14)................ 100,000 1.1 -- 100,000 *
Goldfield Partners............... 50,000 * -- 50,000 *
Matthew P. Kinley................ 50,000 * -- 50,000 *
Steven B. Pilavin (15)........... 48,710 * -- 48,710 *
Scott J. Weinstein (16).......... 48,710 * -- 48,710 *
David Weksel (17)................ 32,000 * -- 32,000 *
Robert S. Hirsch (18)............ 28,350 * -- 28,350 *
James W. Manzari (19)............ 13,740 * -- 13,740 *
Kari Steinberg (20).............. 8,000 * -- 8,000 *
Dana Steinberg (21).............. 8,000 * -- 8,000 *
Bertrand H. Weidberg............. 7,000 * -- 7,000 *
Leonard Levine................... 6,000 * -- 6,000 *
Joseph Handy..................... 4,000 * -- 4,000 *
Charles P. Krokel................ 4,000 * -- 4,000 *
Deanna G. Weksel (22)............ 4,000 * -- 4,000 *
Gregory A. Weksel (23)........... 4,000 * -- 4,000 *
Francis M. Sassano............... 4,000 * -- 4,000 *
William B. McLiverty............. 4,000 * -- 4,000 *
Joseph Rubino.................... 2,000 * -- 2,000 *
Eliot Abbot...................... 2,000 * -- 2,000 *
</TABLE>
- ---------------------
* Less than 1%.
(1) Unless otherwise indicated, the address for each stockholder is c/o
LogistiCare, Inc., One Crown Center, 1895 Phoenix Boulevard, Suite 306,
College Park, Georgia 30349.
(2) The persons and entities named in the table have sole voting and
investment powers with respect to all of the Common Stock shown as
beneficially owned by them, except as noted below.

42
<PAGE>

(3) The 9,620,176 shares of Common Stock deemed outstanding prior to the
Offering include:
(a) 8,047,360 shares of Common Stock outstanding;
(b) 974,150 shares of Common Stock issuable upon completion of the
Offering pursuant to the conversion of 97,415 issued and outstanding
shares of Preferred Stock; and
(c) 598,666 shares of Common Stock issuable pursuant to the exercise of
options held by the respective person or group, which may be exercised
within 60 days after the date of this Prospectus.
(4) The 11,890,176 shares of Common Stock deemed outstanding after the
Offering include:
(a) an additional 2,300,000 shares of Common Stock which are being offered
for sale by the Company in the Offering and assumes no exercise of the
over-allotment option;
(b) 974,150 shares of Common Stock issued upon completion of the Offering
pursuant to the conversion of 97,415 issued and outstanding shares of
Preferred Stock; and
(c) 598,666 shares of Common Stock issuable pursuant to the exercise of
options held by the respective person or group, which may be exercised
within 60 days after the date of this Prospectus.
(5) This assumes that the Underwriters do not exercise the over-allotment
option. If the Underwriters do exercise the over-allotment option in
full, up to an additional 300,000 shares of Common Stock may be sold as
follows: Edgewater Private Equity Fund II, L.P.--36,145 shares; John L.
Shermyen--24,750 shares; Michael E. Weksel--23,351 shares; John
Pappajohn--38,421 shares; Derace L. Schaffer, M.D.--47,319 shares; Robert
H. Davies--38,533 shares Robert S. Hirsch--1,452 shares; James W.
Manzari--1,000 shares; Steven B. Pilavin--2,494 shares; Edward
Steinberg--12,595 shares; Scott J. Weinstein--2,494 shares; Martin
Zilber--11,924 shares; Ann Pappajohn Inter Vivos Trust 1989 --5,120
shares; Halkis, Ltd.--5,120 shares; Thebes, Ltd.--5,120 shares; Goldfield
Partners--2,560 shares; Matthew P. Kinley--2,560 shares; Joseph Handy--
1,000 shares; Charles P. Krokel--1,000 shares; David Weksel--1,638
shares; Deanna G. Weksel--1,000 shares; Gregory A. Weksel--1,000 shares;
Bertrand H. Weidberg--1,000 shares; Leonard Levine--1,000 shares; Francis
M. Sassano--1,000 shares; William B. McLiverty--1,000 shares; Deanna
Weksel and Warren Firstenberg, as Trustees under Trust made April 2,
1998--25,404 shares; Kari Steinberg--1,000 shares; Dana Steinberg--1,000
shares; Joseph Rubino--1,000 shares; and Eliot Abbot--1,000 shares.

(6) William Weksel is a director of the Company and the father of Michael
Weksel. This includes 2,134,624 shares held under a Voting Trust
Agreement entered into by William Weksel in connection with the Company's
application for approval for quotation on the Nasdaq Stock Market. Under
the terms of the Voting Trust Agreement, the voting trust is effective
upon consummation of the Offering and the shares in the voting trust are
to be voted in the same proportion as the total votes cast by the holders
of all other outstanding shares of Common Stock voting on any matter
submitted to stockholders of the Company. Also includes 496,150 shares
held by Deanna Weksel and Warren Firstenberg, as Trustees under Trust
made April 2, 1998, of which Mr. Weksel is one of the beneficiaries. Also
includes 80,000 shares issuable pursuant to stock options held by Mr.
Weksel. Deanna Weksel has resigned as Trustee, effective upon the listing
of the Common Stock on the Nasdaq Stock Market.
(7) Includes:
(a) 624,150 shares for which Mr. Pappajohn is the direct beneficial owner;
(b) 80,000 shares issuable pursuant to the exercise of stock options held
by Mr. Pappajohn;
(c) 126,210 shares issuable upon completion of the Offering pursuant to
the conversion of 12,621 shares of Preferred Stock owned by Mr.
Pappajohn; and
(d) 100,000 shares of Common Stock held by Halkis, Ltd., of which Mr.
Pappajohn is the sole stockholder, and Thebes, Ltd., of which Mr.
Pappajohn's wife is the sole stockholder. Mr. Pappajohn disclaims
beneficial ownership of these shares.
(8) Includes 80,000 shares issuable pursuant to the exercise of stock options
held by Dr. Schaffer.
(9) Includes:
(a) 240,000 shares issuable upon the exercise of stock options held by Mr.
Shermyen; and
(b) 8,120 shares issuable upon completion of the Offering pursuant to the
conversion of 812 shares of Preferred Stock owned by Mr. Shermyen.
(10) Includes 58,666 shares issuable pursuant to the exercise of stock options
held by Mr. Weksel. Mr. Weksel is the Vice President, Chief Financial
Officer and a director of the Company, and the son of William Weksel, a
director.

43
<PAGE>

(11) Includes 681,910 shares issuable upon completion of the Offering pursuant
to the conversion of 68,191 shares of Preferred Stock owned by Edgewater
Private Equity Fund II, L.P.
(12) Includes 26,400 shares issuable upon completion of the Offering pursuant
to the conversion of 2,640 shares of Preferred Stock owned by Mr.
Steinberg. Mr. Steinberg is the father of Dana and Kari Steinberg.
(13) Halkis, Ltd. is wholly-owned by Mr. Pappajohn, a director of the Company.
(14) Thebes, Ltd. is wholly-owned by the wife of Mr. Pappajohn, a director of
the Company.
(15) These shares are issuable upon completion of the Offering pursuant to the
conversion of 4,871 shares of Preferred Stock owned by Mr. Pilavan.
(16) These shares are issuable upon completion of the Offering pursuant to the
conversion of 4,871 shares of Preferred Stock owned by Mr. Weinstein.
(17) David Weksel is the son of William Weksel, a director, and the brother of
Michael Weksel, the Vice President, Chief Financial Officer and a
director of the Company.
(18) Includes 24,350 shares issuable upon completion of the Offering pursuant
to the conversion of 2,435 shares of Preferred Stock owned by Mr. Hirsch.
(19) Includes 9,740 shares issuable upon completion of the Offering pursuant
to the conversion of 974 shares of Preferred Stock owned by Mr. Manzari.
(20) Kari Steinberg is the daughter of Edward Steinberg and sister of Dana
Steinberg.
(21) Dana Steinberg is the daughter of Edward Steinberg and sister of Kari
Steinberg.
(22) Deanna G. Weksel is the wife of William Weksel, a director, and step-
mother of Michael Weksel, the Vice President, Chief Financial Officer and
a director of the Company.
(23) Gregory A. Weksel is the son of William Weksel, a director, and the
brother of Michael Weksel, the Vice President, Chief Financial Officer
and a director of the Company.

44
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Upon consummation of the Offering, the Company's authorized capital stock
will consist of 30,000,000 shares of Common Stock, par value $.01 per share,
and 1,000,000 shares of Preferred Stock, par value $.01 per share, which are
subject to future issuance as determined by the Board of Directors of the
Company.

COMMON STOCK

The holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by stockholders and are entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors from funds legally available therefor. Upon liquidation or
dissolution of the Company, the holders of Common Stock are entitled to
receive all assets available for distribution, subject to any preferential or
other rights of holders of Preferred Stock. The Common Stock has no preemptive
or other subscription rights, except as set forth below in "Certain Provisions
Affecting Stockholders," and there are no conversion rights or redemption or
sinking fund provisions with respect to such shares. The holders of Common
Stock do not have cumulative voting rights in the election of directors, which
means that the holders of more than 50% of the shares of Common Stock voting
for the election of directors can elect all of the directors of the Company if
they choose to do so. All shares of Common Stock are, and the shares of Common
Stock in the Offering will be, when issued, validly issued, fully paid and
non-assessable.

PREFERRED STOCK

The Company is authorized to issue up to 1,000,000 shares of Preferred
Stock. Upon the effectiveness of the Registration Statement, the 97,415 shares
of Preferred Stock outstanding will be converted into 974,150 shares of Common
Stock. The Board of Directors may, without future action of the stockholders
of the Company, issue the remaining 902,585 shares of the Preferred Stock in
one or more classes or series and fix the rights and preferences thereof,
including the dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption (including sinking fund provisions), redemption
price or prices, liquidation preferences and the number of shares constituting
any class or series, and the designations of such class or series.

The voting and other rights of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of Preferred Stock that may be
issued in the future. Issuances of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party
to acquire, or of discouraging a third party from acquiring, a majority of the
outstanding voting stock of the Company. The Company has no present plans to
reissue shares of Preferred Stock.

CERTAIN PROVISIONS OF DELAWARE LAW

Section 203 of the Delaware General Corporation Law ("DGCL") prohibits a
Delaware corporation from engaging in a wide range of specified transactions
with any interested stockholder, which is defined to include, among others,
any person or entity who in the last three years obtained 15% or more of any
class or series of stock entitled to vote in the election of directors,
unless, among other exceptions, the transaction is approved by (i) the Board
of Directors prior to the date the interested stockholder obtained such status
or (ii) the holders of two-thirds of the outstanding shares of each class or
series of stock entitled to vote generally in the election of directors, not
including those shares owned by the interested stockholder. Because the
Company did not elect out of the statute's provisions, this statute applies to
the Company.

CERTAIN ANTI-TAKEOVER PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BYLAWS

Upon completion of the Offering, the Company's Amended and Restated Bylaws
will provide that special meetings of stockholders of the Company may be
called only by the Board of Directors or the Chairman of the Board of
Directors. This provision could have the effect of delaying, until the next
annual stockholders meeting, holder actions that are favored by the holders of
a majority of the outstanding voting securities of the Company.

45
<PAGE>

The foregoing provisions could have the effect of making it more difficult
for a third party to acquire, or of discouraging a third party from acquiring,
control of the Company.

LIMITATION OF LIABILITY

The Restated Certificate of Incorporation contains provisions that eliminate
the personal liability of its directors for monetary damages resulting from
breaches of their fiduciary duty other than liability for breaches of the duty
of loyalty, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, violations under Section 174 of the
DGCL or any transaction from which the director derived an improper personal
benefit. The Company's Amended and Restated Bylaws contain provisions
requiring the indemnification of the Company's directors and officers to the
fullest extent permitted by Section 145 of the DGCL.

46
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

After giving effect to the shares of Common Stock offered hereby, the
Company will have outstanding 11,321,510 shares of Common Stock. Of these
shares, all of the shares of Common Stock sold in the Offering will be freely
tradeable without restriction under the Securities Act, except for any shares
purchased by "affiliates," as that term is defined under the Securities Act,
of the Company. Upon the expiration of the lock-up agreements described below,
the remaining 8,021,510 shares of Common Stock will be eligible for sale,
subject to compliance with Rule 144 promulgated pursuant to the Securities Act
("Rule 144").

The Company and certain existing stockholders of the Company, including the
Company's directors and executive officers, have agreed that it/he/she will
not, subject to certain specified exceptions, without the prior written
consent of Hambrecht & Quist LLC, for a period of 180 days from the effective
date of the Registration Statement, directly or indirectly, (i) sell, offer,
contract to sell, make any short sale, pledge, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of Common
Stock or any securities convertible into or exchangeable or exercisable for or
any rights to purchase or acquire Common Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. Hambrecht & Quist LLC
may, in its sole discretion, release any of the shares subject to lock-up
agreements at any time, without prior notice.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including any person who may be deemed to be an
"affiliate" of the Company, is entitled to sell within any three-month period
"restricted" shares beneficially owned by him or her in an amount that does
not exceed the greater of (i) 1% of the then outstanding shares of Common
Stock or (ii) the average weekly trading volume in shares of Common Stock
during the four calendar weeks preceding such sale, provided that at least one
year has elapsed since such shares were acquired from the Company or an
affiliate of the Company. Sales are also subject to certain requirements as to
the manner of sale, notice and the availability of current public information
regarding the Company. However, a person who has not been an "affiliate" of
the Company at any time within three months prior to the sale is entitled to
sell his or her shares without regard to the volume limitations or other
requirements of Rule 144, provided that at least two years have elapsed since
such shares were acquired from the Company or an affiliate of the Company.

In general, under Rule 701 as currently in effect, any employee, officer,
director, consultant or advisor of the Company who purchased shares from the
Company pursuant to a written compensatory benefit plan or written contract
relating to compensation is eligible to resell such shares 90 days after the
effective date of the Offering. Shares of Common Stock obtained pursuant to
Rule 701 may be sold by non-affiliates without regard to the holding period,
volume limitations, or information or notice requirements of Rule 144, and by
affiliates without regard to the holding period requirements.

The Company intends to file a registration statement on Form S-8 under the
Securities Act to register all shares of Common Stock issuable under its Stock
Option Plans, as well as certain of the shares of Common Stock previously
issued under its Stock Option Plans. This registration statement is expected
to be filed as soon as practicable after the date of this Prospectus and is
expected to become effective immediately upon filing. Shares of Common Stock
covered by this registration statement will be eligible for sale in the public
market after the effective date of such registration statement, subject to
Rule 144 limitations applicable to affiliates of the Company. See
"Management--Stock Option Plans."

Prior to the Offering, there has been no public market for the Common Stock
and it is impossible to predict with certainty the effect, if any, that market
sales of shares or the availability of such shares for sale will have on the
market price of the Common Stock. Nevertheless, sales of substantial amounts
of Common Stock in the public market may have an adverse impact on such market
price and could impair the Company's ability to raise capital through the sale
of its equity securities.

47
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters") through their representatives
Hambrecht & Quist LLC and EVEREN Securities, Inc. (the "Representatives"),
have severally agreed to purchase from the Company and the Selling Stockholder
the following respective numbers of shares of Common Stock set forth opposite
the name of each such Underwriter below at the initial public offering price
less the underwriting discounts set forth on the cover page of this
Prospectus:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Hambrecht & Quist LLC............................................
EVEREN Securities, Inc...........................................
---
Total............................................................
===
</TABLE>

The following summaries of certain provisions of the Underwriting Agreement
are subject to, and qualified in their entirety by reference to, all of the
provisions of the Underwriting Agreement, including definitions of certain
terms. The form of Underwriting Agreement has been filed with the Commission
as an exhibit to the Registration Statement. The Underwriting Agreement
provides that the obligations of the Underwriters are subject to certain
conditions precedent, including the absence of any material adverse change in
the Company's business and the receipt of certain certificates, opinions and
letters from the Company, its counsel and the Company's independent auditors.
The nature of the Underwriters' obligation is such that they are committed to
purchase all shares of Common Stock offered hereby if any such shares are
purchased.

The Underwriters propose to offer the shares of Common Stock to the public
at the initial public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other dealers.
The Representatives have advised the Company that the Underwriters do not
intend to confirm discretionary sales in excess of 5% of the shares of Common
Stock offered hereby. After the initial public offering of the shares, the
offering price and other selling terms may be changed by the Representatives
of the Underwriters.

The Company and the Over-allotment Selling Stockholders have granted to the
Underwriters an option, exercisable no later than 30 days after the date of
this Prospectus, to purchase up to 495,000 additional shares of Common Stock
at the initial public offering price, (195,000 from the Company and 300,000
from the Over-allotment Selling Stockholders) less the underwriting discounts
set forth on the cover page of this Prospectus. To the extent the Underwriters
exercise this option, each of the Underwriters will have a firm commitment to
purchase approximately the same percentage thereof which the number of shares
of Common Stock to be purchased by it shown in the above table bears to the
total number of shares of Common Stock offered hereby. The Company and the
Over-allotment Selling Stockholders will be obligated, pursuant to the option,
to sell shares to the Underwriters to the extent the option is exercised. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of Common Stock offered hereby.

The offering of the shares is made for delivery when, as and if accepted by
the Underwriters and subject to prior sale and to withdrawal, cancellation or
modification of the Offering without notice. The Underwriters reserve the
right to reject an order for the purchase of shares in whole or in part.

48
<PAGE>

The Company, the Selling Stockholder and the Over-allotment Selling
Stockholders have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriters may be required to make in respect thereof.

Prior to the Offering, there has been no public market for the Common Stock.
The initial public offering price for the Common Stock will be determined by
negotiation among the Company and the Representatives. Among the factors
considered in determining the initial public offering price were prevailing
market and economic conditions, revenues and earnings of the Company, market
valuations of other companies engaged in activities similar to those of the
Company, estimates of the business potential and prospects of the Company, the
present state of the Company's business operations, the Company's management
and other factors deemed relevant.

Certain persons participating in the Offering may over-allot or effect
transactions which stabilize, maintain or otherwise affect the market price of
the Common Stock at levels above those which might otherwise prevail in the
open market, including by entering stabilizing bids, effecting syndicate
covering transactions or imposing penalty bids. A stabilizing bid means
placing of any bid or effecting of any purchase, for the purpose of pegging,
fixing or maintaining the price of the Common Stock. A syndicate covering
transaction means the placing of any bid on behalf of the underwriting
syndicate or the effecting of any purchase to reduce a short position created
in connection with the Offering. A penalty bid means an arrangement that
permits the Underwriters to reclaim a selling concession from a syndicate
member in connection with the Offering when shares of Common Stock sold by the
syndicate member are purchased in syndicate covering transactions. Such
transaction may be effected on the Nasdaq Stock Market, in the over-the-
counter market, or otherwise. Such stabilizing, if commenced, may be
discontinued at any time.

Hambrecht & Quist California, a wholly-owned subsidiary of Hambrecht & Quist
LLC ("H&Q California"), and certain employees and spouses of employees of the
Representatives own an aggregate of 190,000 shares of Common Stock, which
shares were purchased on April 22, 1998 from a general partner of an affiliate
of the Company in a privately-negotiated arm's-length transaction. None of the
shares of Common Stock held by H&Q California or the employees and spouses of
employees of the Representatives are being offered hereby.

LEGAL MATTERS

The validity of the Common Stock offered hereby has been passed upon by
Proskauer Rose LLP, New York, New York. Certain legal matters will be passed
upon for the Underwriters by Katten Muchin & Zavis, Chicago, Illinois.

EXPERTS

The financial statements as of December 31, 1996 and 1997 and for each of
the three years in the period ended December 31, 1997 included in this
Prospectus have been so included in reliance upon the report of Price
Waterhouse LLP, independent certified public accountants, given on the
authority of such firm as experts in auditing and accounting.

49
<PAGE>

ADDITIONAL INFORMATION

A Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended (the "Securities Act"), including amendments thereto, relating to the
Common Stock offered hereby has been filed by the Company with the Securities
and Exchange Commission (the "Commission"). This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to such
Registration Statement and exhibits and schedules filed as a part thereof. A
copy of the Registration Statement may be inspected by anyone without charge
at the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Northwest Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of all or any portion of the
Registration Statement may be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment
of prescribed fees. The Commission maintains a WorldWide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Such
reports, proxy and information statements and other information may be found
on the Commission's site address, http://www.sec.gov. Copies of such material
also can be obtained from the Company upon request.

Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.

As a result of the Offering, the Company will become subject to the
information and periodic reporting requirements of the Securities Exchange
Act, as amended, and, in accordance therewith, will file periodic reports,
proxy statements and other information with the Commission. Such periodic
reports, proxy statements and other information will be available for
inspection and copying at the public reference facilities, regional offices
and Web site referred to above.

50
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

<TABLE>
<S> <C>
Report of Independent Certified Public Accountants......................... F-2
Balance Sheets as of December 31, 1996, 1997 and March 31, 1998 (Unau-
dited).................................................................... F-3
Statements of Operations for each of the years ended December 31, 1995,
1996, and 1997, and the three month periods ended March 31, 1997 and 1998
(Unaudited)............................................................... F-4
Statement of Changes in Stockholders' Deficit for the three years ended De-
cember 31, 1997, and the three month period ended March 31, 1998 (Unau-
dited).................................................................... F-5
Statements of Cash Flows for each of the years ended December 31, 1995,
1996 and 1997, and the three month periods ended March 31, 1997 and 1998
(Unaudited)............................................................... F-6
Notes to Financial Statements.............................................. F-8
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of LogistiCare, Inc.

In our opinion, the accompanying balance sheets and the related statements
of operations, of changes in stockholders' deficit and of cash flows present
fairly, in all material respects, the financial position of LogistiCare, Inc.
(formerly Automated Dispatch Solutions, Inc.) at December 31, 1996 and 1997,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

Price Waterhouse LLP

Ft. Lauderdale, Florida
May 7, 1998, except as to Notes 1,
7 and 10 which are as of June 11, 1998

F-2
<PAGE>

LOGISTICARE, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, 1998
----------------------- ------------------------
1996 1997 HISTORICAL PRO FORMA
---------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents. $ 70,704 $ 639,598 $ 3,680,573 $ 3,680,573
Accounts receivable, net
of allowance of $17,000
and $95,000 at December
31, 1996 and 1997,
respectively............. 464,811 515,495 2,005,649 2,005,649
Prepaid expenses and other
current assets........... 2,300 22,282 30,003 30,003
---------- ----------- ----------- -----------
Total current assets.... 537,815 1,177,375 5,716,225 5,716,225
Property and equipment, net. 301,883 849,732 933,396 933,396
Proprietary software, net of
accumulated amortization of
$140,000 and $176,666 at
December 31, 1996 and 1997,
respectively............... 110,472 73,806 63,249 63,249
Other assets................ 18,154 156,593 161,935 161,935
---------- ----------- ----------- -----------
$ 968,324 $ 2,257,506 $ 6,874,805 $ 6,874,805
========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......... $ 584,433 $ 3,216,819 $ 4,459,430 $ 4,459,430
Accrued expenses.......... 92,040 94,554 245,084 245,084
Notes payable............. 50,524 -- -- --
Notes payable to stock-
holders and officers..... 100,000 -- -- --
Current portion of
obligations under capital
leases................... 6,350 134,927 149,340 149,340
Deferred revenue.......... 131,000 1,250,000 4,229,406 4,229,406
---------- ----------- ----------- -----------
Total current liabili-
ties................... 964,347 4,696,300 9,083,260 9,083,260
Long term note payable to
principal stockholder...... 270,000 -- -- --
Obligations under capital
leases, net of current
portion.................... 32,369 238,880 241,678 241,678
---------- ----------- ----------- -----------
Total liabilities....... 1,266,716 4,935,180 9,324,938 9,324,938
---------- ----------- ----------- -----------
Commitments and contingen-
cies (Note 10)
Stockholders' deficit:
Series A preferred stock,
$.01 par value, 1,000,000
shares authorized; 97,415
shares issued and
outstanding at December
31, 1997................. -- 974 974 --
Common stock, $.01 par
value, 30,000,000 shares
authorized; 5,550,000 and
8,047,360 shares issued
and outstanding at
December 31, 1996 and
1997, respectively....... 55,500 80,474 80,474 90,215
Additional paid in capi-
tal...................... 25,440 1,834,200 2,284,200 2,275,433
Deferred option plan com-
pensation................ -- -- (450,000) (450,000)
Retained deficit.......... (379,332) (4,593,322) (4,365,781) (4,365,781)
---------- ----------- ----------- -----------
Total stockholders' def-
icit................... (298,392) (2,677,674) (2,450,133) (2,450,133)
---------- ----------- ----------- -----------
$ 968,324 $ 2,257,506 $ 6,874,805 $ 6,874,805
========== =========== =========== ===========
</TABLE>

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

F-3
<PAGE>

LOGISTICARE, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ----------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Transportation manage-
ment services........ -- $1,529,817 $10,768,239 $987,519 $11,714,962
Related party......... -- 1,667,683 602,735 374,744 --
Other................. $391,702 438,602 131,000 -- --
---------- ---------- ----------- --------- -----------
391,702 3,636,102 11,501,975 1,362,263 11,714,962
---------- ---------- ----------- --------- -----------
Operating expenses:
Purchased transporta-
tion................. -- 1,296,334 11,213,405 898,526 9,503,377
Direct labor.......... -- 1,177,805 1,835,505 369,471 901,837
Selling, general and
administrative....... 311,061 1,042,670 2,665,447 318,339 1,088,916
Other................. 189,814 205,379 -- -- --
---------- ---------- ----------- --------- -----------
500,875 3,722,188 15,714,357 1,586,336 11,494,130
---------- ---------- ----------- --------- -----------
Income (loss) from op-
erations............. (109,173) (86,086) (4,212,382) (224,073) 220,832
Other income (expense):
Interest income....... -- 585 25,929 -- 26,822
Interest expense...... (17,735) (33,289) (27,537) (1,493) (20,113)
---------- ---------- ----------- --------- -----------
Net income (loss)..... $ (126,908) $ (118,790) $(4,213,990) $(225,566) $ 227,541
========== ========== =========== ========= ===========
Basic net income
(loss) per share..... $ (0.03) $ (0.02) $ (0.59) $ (0.04) $ 0.03
========== ========== =========== ========= ===========
Weighted average
shares outstanding... 5,000,000 5,550,000 7,188,589 5,796,566 8,047,360
========== ========== =========== ========= ===========
Diluted net income
(loss) per share..... $ (0.03) $ (0.02) $ (0.59) $ (0.04) $ 0.02
========== ========== =========== ========= ===========
Weighted average
shares and
potentially dilutive
shares outstanding... 5,000,000 5,550,000 7,188,589 5,796,566 10,256,459
========== ========== =========== ========= ===========
Unaudited pro forma
basic net income per
share................ $ 0.03
===========
Unaudited pro forma
weighted average
shares outstanding... 9,021,510
===========
Unaudited pro forma
diluted net income
per share............ $ 0.02
===========
Unaudited pro forma
weighted average
shares and
potentially dilutive
shares outstanding... 10,256,459
===========
</TABLE>

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

F-4
<PAGE>

LOGISTICARE, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL DEFERRED
---------------- ----------------- PAID OPTION PLAN RETAINED
SHARES AMOUNT SHARES AMOUNT IN CAPITAL COMPENSATION DEFICIT TOTAL
-------- ------- --------- ------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1995................... -- -- 5,000,000 $50,000 $ (45,000) -- $ (133,634) $ (128,634)
Net loss................ -- -- -- -- -- -- (126,908) (126,908)
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance December 31,
1995................... -- -- 5,000,000 50,000 (45,000) -- (260,542) (255,542)
Acquisition of Automated
Dispatch Systems, Inc.. -- -- 550,000 5,500 18,440 -- -- 23,940
Management services
contributed by
principal stockholder.. -- -- -- -- 52,000 -- -- 52,000
Net loss................ -- -- -- -- -- -- (118,790) (118,790)
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance, December 31,
1996................... -- -- 5,550,000 55,500 25,440 -- (379,332) (298,392)
Issuance of common
stock.................. -- -- 2,017,360 20,174 497,550 -- -- 517,724
Note contributed by
stockholder............ -- -- -- -- 316,024 -- -- 316,024
Issuance of preferred
stock.................. 97,415 $ 974 -- -- 999,026 -- -- 1,000,000
Issuance of common stock
under option plan...... -- -- 480,000 4,800 (3,840) -- -- 960
Net loss................ -- -- -- -- -- -- (4,213,990) (4,213,990)
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance, December 31,
1997................... 97,415 974 8,047,360 80,474 1,834,200 -- (4,593,322) (2,677,674)
Options granted under
stock option plan...... -- -- -- -- 450,000 (450,000) -- --
Net income.............. -- -- -- -- -- -- 227,541 227,541
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance, March 31, 1998
(unaudited)............ 97,415 $ 974 8,047,360 $80,474 $2,284,200 $(450,000) $(4,365,781) $(2,450,133)
======== ====== ========= ======= ========== ========= =========== ===========
</TABLE>

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

F-5
<PAGE>

LOGISTICARE, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31
--------------------------------- ----------------------
1995 1996 1997 1997 1998
--------- --------- ----------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income (loss)..... $(126,908) $(118,790) $(4,213,990) $(225,566) $ 227,541
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization......... 51,154 96,958 154,126 29,367 51,231
Loss on disposal of
property and
equipment............ -- -- 45,088 -- --
Management services
contributed by
principal
shareholder.......... -- 52,000 -- -- --
Changes in assets and
liabilities:
Increase in accounts
receivable.......... -- (433,164) (50,684) (113,883) (1,490,154)
(Increase) decrease
in prepaid expenses
and other current
assets.............. (17,000) 11,700 (19,982) -- (7,721)
Increase in other
assets.............. -- (3,279) (138,438) -- (5,342)
Increase in accounts
payable............. 13,386 556,196 2,632,386 83,539 1,012,587
Increase (decrease)
in accrued expenses. 26,198 (4,231) 48,537 13,118 150,530
Decrease in due to
affiliate........... (34,000) -- -- -- --
Increase (decrease)
in deferred revenue. 140,000 (9,000) 1,119,000 -- 3,209,430
--------- --------- ----------- --------- -----------
Net cash provided by
(used in) operating
activities......... 52,830 148,390 (423,957) (213,425) 3,148,102
--------- --------- ----------- --------- -----------
Cash flows from
investing activities:
Purchases of property
and equipment........ (5,769) (111,190) (329,141) (48,516) (80,939)
Purchase of Automated
Dispatch Systems,
Inc., net of cash
acquired............. -- 5,148 -- -- --
--------- --------- ----------- --------- -----------
Net cash used in
investing
activities......... (5,769) (106,042) (329,141) (48,516) (80,939)
--------- --------- ----------- --------- -----------
Cash flows from
financing activities:
Repayments on notes
payable.............. -- (161,222) (145,524) (25,524) --
Repayment of
obligations under
capital leases....... -- (2,112) (46,168) (2,882) (26,188)
Proceeds from line of
credit............... -- 25,000 -- -- --
Proceeds from issuance
of notes payable to
officer.............. -- 50,000 -- -- --
Proceeds from issuance
of note payable to
principal
stockholder.......... 25,000 -- -- -- --
Proceeds from sale of
common stock......... -- -- 517,724 517,724 --
Proceeds from sale of
preferred stock...... -- -- 1,000,000 -- --
Proceeds from exercise
of stock options..... -- -- 960 -- --
--------- --------- ----------- --------- -----------
Net cash (used in)
provided by
financing
activities......... 25,000 (88,334) 1,321,992 489,318 (26,188)
--------- --------- ----------- --------- -----------
Net (decrease) increase
in cash............... 72,061 (45,986) 568,894 227,377 3,040,975
Cash and cash
equivalents, beginning
of period............. 44,629 116,690 70,704 70,704 639,598
--------- --------- ----------- --------- -----------
Cash and cash
equivalents, end of
period................ $ 116,690 $ 70,704 $ 639,598 $ 298,081 $ 3,680,573
========= ========= =========== ========= ===========
</TABLE>

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

F-6
<PAGE>

LOGISTICARE, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31
------------------------ -------------------
1995 1996 1997 1997 1998
------- ------- -------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Supplemental disclosure of cash
flow information:
Cash paid during the year for
interest.......................... $ -- $14,389 $ 69,183 $ 1,548 $ 20,113
======= ======= ======== ========= ========
Supplemental disclosure of noncash
investing and financing
activities:
Note payable issued in connection
with acquisition of Automated
Dispatch Systems, Inc............. $ -- $50,000 $ -- $ -- $ --
======= ======= ======== ========= ========
Common stock issued in connection
with acquisition of Automated
Dispatch Systems, Inc............. $ -- $23,940 $ -- $ -- $ --
======= ======= ======== ========= ========
Contribution of note payable and
accrued interest to additional
paid in capital................... $ -- $ -- $316,024 $ 316,024 $ --
======= ======= ======== ========= ========
Property and equipment acquired un-
der capital leases................ $ -- $40,831 $385,803 $ 33,376 $ 43,399
======= ======= ======== ========= ========
Exchange of note payable for common
stock............................. $ -- $ -- $ 5,000 $ -- $ --
======= ======= ======== ========= ========
</TABLE>

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

F-7
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

LogistiCare, Inc. (the "Company" or "LogistiCare," formerly known as
Automated Dispatch Solutions, Inc.) was organized in March 1994 as a Delaware
corporation. On January 1, 1996, LogistiCare acquired 100% of the outstanding
common stock of Automated Dispatch Systems, Inc. ("Systems"). LogistiCare and
Systems were merged into a single legal entity on December 31, 1996. The
financial statements presented for 1996 are consolidated to include the
accounts of LogistiCare and Systems. All significant intercompany transactions
and balances have been eliminated in the consolidated financial statements for
1996.

The Company provides transportation management services: brokerage logistics
and service bureau logistics. Brokerage logistics consists of non-emergency
transportation management services to government agencies and managed health
care organizations ("MCOs") where the Company coordinates and, through
contracts with unaffiliated transportation carriers provides, non-emergency
transportation for individuals eligible for transportation benefits
("Recipients"). Transportation of Recipients is furnished pursuant to
contracts between the Company and independent transportation carriers. The
Company is compensated for these services primarily on a capitated basis and,
to a lesser extent, on a fee-for-service basis. Service bureau logistics are
offered directly to independent transportation carriers and carrier networks
where the Company manages the carrier's or the network's internal logistics
requirements. The Company is compensated for these services on a fee-for-
transaction basis.

A summary of the significant accounting policies followed in the preparation
of the accompanying financial statements is presented below.

INTERIM FINANCIAL STATEMENTS (UNAUDITED)

The interim financial data as of March 31, 1998 and for the three months
ended March 31, 1997 and March 31, 1998 is unaudited; however, in the opinion
of the Company, the interim data includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results
for the interim periods. The results of operations for the three month periods
are not necessarily indicative of the results for the full year.

REVENUE RECOGNITION

Revenues under capitation contracts are recognized over the capitation
period, generally one month. Revenues earned under fee-for-service and fee-
for-transaction contracts are recognized when the related service is provided.

STARTUP COSTS FOR OPERATIONS CENTERS

The Company recognizes costs associated with the startup of its operations
centers as such costs are incurred. The Company generally negotiates fees to
enable it to open new operations centers when such centers are required by the
terms of contracts with its customers. The Company recognizes the fees as
earned in accordance with contract terms. The Company recognized $600,000 of
fees in 1997 which are included in brokerage logistics revenues.

CASH AND CASH EQUIVALENTS

The Company considers those short term, highly liquid investments with
original maturities of three months or less as cash and cash equivalents.

F-8
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation.
Expenditures for replacements and betterment are capitalized while maintenance
and repairs are charged to expense as incurred. Depreciation is provided using
the straight line and declining balance methods over estimated useful lives of
five to seven years. Equipment held under capital lease obligations is
amortized using the straight-line method over the shorter of the lease term or
estimated life of the asset.

PROPRIETARY SOFTWARE

Proprietary software represents the purchase of RealTime(TM) ("RealTime"), a
computer aided vehicle dispatch system, for non-emergency transportation
management services. The software is stated at cost less accumulated
amortization. Amortization is provided using the straight line method over an
estimated useful life of 68 months. During 1996, the Company changed its
estimate of the remaining useful life of the software from 36 months to 68
months. As a result, the Company prospectively adjusted its amortization
expense in connection with the software. The effect was to reduce the
amortization from $50,000 in 1995 to $36,666 in 1996 and 1997.

In connection with its acquisition of Systems in January 1996 (see Note 2),
the Company allocated approximately $80,000 of its acquisition price to
proprietary software related to the rights obtained in the acquisition to use
RealTime in Dade, Broward, Palm Beach and Monroe counties in Florida.

USE OF ESTIMATES

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.

STOCK BASED COMPENSATION

The Company accounts for stock based compensation using the intrinsic value
method and discloses certain fair market value information with respect to its
stock option activity in the notes to the financial statements (see Note 7).
In cases where the exercise price of stock options issued to employees is less
than the estimated fair market value of the underlying shares at the date of
grant, compensation expense is recognized over the vesting period.

PER SHARE DATA

Basic net income (loss) per share is computed by dividing net income (loss)
by the weighted average number of shares of common stock outstanding during
each period. Diluted net income per share is computed by dividing net income
by the weighted average number of shares of common stock and potentially
dilutive securities outstanding during each period. All per share data have
been adjusted to reflect the Company's 5-for-1 and 2-for-1 common stock splits
(see Note 10).

Potentially dilutive shares in the amount of 500,000, 1,153,846, and
1,641,789 for the years ended December 31, 1995, 1996 and 1997, respectively,
have been excluded from the computation of diluted earnings per share as the
effect of their inclusion is antidilutive. For the three months ended March
31, 1998, 1,234,949 and 974,150 potentially dilutive shares, representing
stock options and convertible preferred stock, respectively, have been added
to the weighted average shares outstanding to compute diluted net income per
share.

F-9
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

INCOME TAXES

The Company provides income taxes using the liability method under which
deferred tax assets and liabilities are recognized for the expected future tax
consequences of temporary differences between the financial statement and
income tax bases of the Company's assets and liabilities. An allowance is
recorded, based upon currently available information, when it is more likely
than not that any or all of a deferred tax asset will not be realized. The
provision for income taxes includes taxes currently payable, if any, plus the
net change during the year in deferred tax assets and liabilities recorded by
the Company.

FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

The carrying value of the Company's financial instruments, including cash
and cash equivalents, accounts receivable, accounts payable, accrued expenses
and notes payable approximated fair value because of the short maturity of
these instruments. Accounts receivable result from contracts with a limited
number of customers in Georgia, Connecticut and Florida. At December 31, 1996
and 1997, contracts with two customers accounted for approximately 29.0% and
40.1%, respectively, of accounts receivable, and approximately 54.2% and
20.8%, respectively, of consolidated revenues. Additionally, a third customer
accounted for approximately 48.4% of consolidated revenues in 1997. The
Company routinely assesses the financial strength of its customers and records
an allowance for doubtful accounts when it determines that collection of a
particular amount is unlikely.

UNAUDITED PRO FORMA BALANCE SHEET AT MARCH 31, 1998

Upon completion of the offering, the Company will convert its preferred
stock into 974,150 shares of common stock. The unaudited pro forma balance
sheet information is presented as if such conversions had occurred as of March
31, 1998.

UNAUDITED PRO FORMA NET INCOME PER SHARE FOR THE THREE MONTHS ENDED MARCH 31,
1998

Unaudited pro forma basic net income per share for the three months ended
March 31, 1998 is computed by dividing net income by the weighted average
number of shares of common stock outstanding plus 974,150 shares of common
stock which, on a pro forma basis, are assumed to have been converted from
preferred stock during the period. Unaudited pro forma diluted net income per
share for the three months ended March 31, 1998, is computed by dividing net
income by the weighted average number of shares of common stock plus 974,150
shares of common stock which, on a pro forma basis, are assumed to have been
converted from preferred stock during the period plus 1,234,949 potentially
dilutive shares representing common stock options.

RECAPITALIZATION AND COMMON STOCK SPLIT

In connection with the contemplated initial public offering of the Company's
common stock as described in Note 10, in June 1998, the Company's Board of
Directors and stockholders approved an increase in authorized common shares to
30,000,000 and authorized a 2-for-1 common stock split, effected as of June
11, 1998. All share and per share data have been adjusted to reflect the
common stock split.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued FAS
("Financial Accounting Standard") No. 130, "Reporting Comprehensive Income,"
("FAS 130") and FAS No. 131 "Disclosures About Segments of an Enterprise and
Related Information," ("FAS 131"). FAS 130 requires an additional statement
presenting certain adjustments to equity. FAS 131 established standards for
related disclosures about products and services, geographic locations and
major customers. The Company will adopt FAS 130 and FAS 131, effective

F-10
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

December 31, 1998. The Company believes that the adoption of these standards
will not have a material impact on the disclosure of net income (loss) per
share or on the disclosures in the Company's financial statements.

2. PURCHASE OF SUBSIDIARY

On January 1, 1996, LogistiCare acquired 100% of the outstanding common
stock of Systems in exchange for $50,000 in cash, promissory notes totaling
$50,000 and 55,000 shares of the Company's common stock. The acquisition was
accounted for as a purchase and, accordingly, the results of operations of
Systems are included in the accompanying statements of operations from January
1, 1996. The following unaudited pro forma statement of operations data for
the year ended December 31, 1995 gives effect to the acquisition as if it had
occurred on January 1, 1995:

<TABLE>
<S> <C>
Revenues.......................................................... $1,822,081
Loss from operations.............................................. $ (12,089)
Net loss.......................................................... $ (45,648)
Loss per share.................................................... $ (0.01)
</TABLE>

3. RELATED PARTY TRANSACTIONS

The Company provides dispatch services to an entity (the "Client") which was
controlled by certain of the Company's minority stockholders until such
minority stockholders sold their entire interest in the Client to an unrelated
entity in May 1997. Dispatch services are provided pursuant to an agreement
with the Client in connection with a transportation contract between the
Client and a municipality in South Florida (the "Florida Contract"). Under the
terms of the agreement, the Company earned $2.65 per trip processed on behalf
of the Client under the Florida Contract. In a related agreement, the Company
paid to the principal stockholders of the Client a fee of $1.00 for each trip
processed by the Company under the Florida Contract. Effective May 31, 1997,
the Company, the Client and the principal stockholders of the Client agreed to
amend the terms of the previously described agreements. Under the revised
terms beginning in June 1997, the Company earns $1.65 per trip processed on
behalf of the Client and pays no fees to the Client or the principal
stockholders of the Client. Under the agreements the Company recorded gross
revenues from the Client of approximately $1,925,000 and $553,000 in 1996 and
1997, respectively, and paid fees to the principal stockholders of the Client
of approximately $726,000 and $211,000 in 1996 and 1997, respectively. Such
fees have been recorded as a reduction of revenues under the Florida Contract.

The Company provides dispatch services to another entity ("Health Trans")
which was controlled by certain of the minority stockholders until such
minority stockholders sold their entire interest in Health Trans to an
unrelated entity in May 1997. The agreement with Health Trans expires in
December 2025. Under the terms of the agreement, the Company earns $125 per
week for each of Health Trans' vehicles for which the Company provides
dispatch services. During 1996 and 1997, the Company recorded revenues of
approximately $200,000 and $271,000, respectively in connection with this
agreement.

During 1995, the Company entered into an agreement (the "Sales and Software
Agreement") with an affiliate of the Company's principal stockholder under
which the Company received $150,000 for 15 end-user licenses to the Company's
RealTime software, and future sales and marketing services to be provided by
the Company. In June 1997, the Company and its affiliate terminated all
commitments under the Sales and Software Agreement in accordance with its
terms. In connection with the termination, the Company made available to its
affiliate rights to an additional 13 end-user licenses of RealTime and
recognized approximately $131,000 in income during 1997 which had been
recorded as deferred revenue in the Company's balance sheet at December 31,
1996.

F-11
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

During 1995, 1996 and 1997, the Company recorded administrative charges of
$44,000, $66,000 and $0, respectively, for services provided by an affiliate
of the Company's principal stockholder. Such services were primarily
management services provided by the Company's current Chief Financial Officer
whose salary was paid by such affiliate during those years. Of the total
administrative charge of $144,000, including $34,000 in administrative charges
recorded in 1994, the Company paid $92,000 while the remainder was recorded as
a capital contribution during 1996.

During 1995, the Company paid Systems $42,000 for the rental of certain
office facilities.

During the period from March 1994 to August 1995, the Company's principal
stockholder loaned the Company a total of $270,000, evidenced by a promissory
note with interest at 7%, principal and interest due on January 31, 2002. In
March 1997, the shareholder canceled the note and contributed the principal
balance and accrued interest of $46,024 to the Company. The Company recorded
the contribution of the note as additional paid in capital.

4. PROPERTY AND EQUIPMENT, NET

At December 31, the Company's property and equipment consists of the
following:

<TABLE>
<CAPTION>
1996 1997
-------- ---------
<S> <C> <C>
Computer equipment...................................... $298,086 $ 450,771
Office furniture and fixtures........................... 7,654 43,212
Leasehold improvements.................................. 16,471 32,181
Equipment under capital lease (see Note 9).............. 40,831 426,635
-------- ---------
363,042 952,799
Less accumulated depreciation........................... (61,159) (103,067)
-------- ---------
$301,883 $ 849,732
======== =========
</TABLE>

During 1995, 1996 and 1997, the Company recorded depreciation expense
related to its property and equipment of $1,154, $60,292 and $117,458,
respectively.

5. DEFERRED REVENUE

At December 31, 1997, the $1,250,000 deferred revenue represents an interim
payment from a customer under a memorandum of understanding in connection with
the Company's claims that the data provided by such customer relating to a
transportation brokerage contract understated the number of passengers to be
transported under such contract. The payment is to be reconciled after a
reevaluation by the customer of the data provided. In event it is determined
that the payment was not due the Company, the payment will be deducted from
future amounts due under the contract.

In March 1998, the Company received an additional payment from the customer
of $5,236,333. Based on the increased capitation rates, effective February 1,
1998, included in the amended contracts with the customer which superseded the
prior written memorandum of understanding (see Note 10), the Company
recognized $2,256,927 of the payment from the customer as revenue in the first
quarter of 1998.

F-12
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

6. NOTES PAYABLE

At December 31, 1996 notes payable were as follows:

<TABLE>
<CAPTION>
NON-
AFFILIATED STOCKHOLDERS
ENTITIES AND OFFICERS
---------- ------------
<S> <C> <C>
Unsecured notes payable to officer of $25,000 each,
interest at 10% and 15%, no stated repayment terms. $ -- $ 50,000
Unsecured notes payable to minority shareholders
(former shareholders of Systems), interest at 9%
per annum, repayable in five equal monthly
installments beginning January 1, 1997............. -- 50,000
Revolving credit facility with bank, maximum amount
of $50,000 payable on demand, interest at the
bank's prime lending rate plus 2 1/2% per annum due
monthly, secured by substantially all assets of the
Company............................................ 25,000 --
Other unsecured note payable, interest at 9% per
annum, repayable in monthly installments of $12,889
including interest through February 1997........... 25,524 --
------- --------
$50,524 $100,000
======= ========
</TABLE>

During 1997, the Company paid $145,524 of notes payable outstanding at
December 31, 1996 which included $95,000 paid to stockholders and officers.
Also during 1997 a stockholder exchanged a $5,000 note payable for common
stock.

7. CAPITAL STOCK

Series A Preferred Stock

In March 1997, the Company's Board of Directors authorized the issuance of
100,000 shares of Series A Preferred Stock, $.01 par value (the "Preferred
Stock"). As of June 1998, the Company increased the number of authorized
shares of Preferred Stock from 100,000 to 1,000,000 (see Note 10). The
Preferred Stock has no stated rate; however, the Board may declare dividends
on the Preferred Stock and, if declared, no dividends or redemptions on common
or other stock that is ranking junior to the Preferred Stock may be made until
the declared dividends on the Preferred Stock are paid.

The Preferred Stock shall convert to common stock upon the effectiveness of
a registration statement filed by the Company in connection with an initial
public offering. The conversion rate is the greater of one share of common
stock per share of Preferred Stock or a rate based on various formulae
depending on the timing and offering price of the initial public offering and
subject to adjustments for stock splits. The preferred shareholders may also
elect to convert their shares into common stock at the conversion price, as
defined.

The preferred stockholders have voting rights equal to one vote for each
share of common stock into which the Preferred Stock would be convertible on
the record date of the stockholder vote. In addition, a majority of the
preferred stockholders must approve certain corporate actions such as the
authorization of any class of stock that would be on a par or senior to the
Preferred Stock as to dividends, any increase in authorized shares of the
Preferred Stock, or any amendment of the Certificate of Incorporation that
would adversely affect the rights of the preferred stockholders.

F-13
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

Common Stock

In March 1997, the Company increased the number of authorized shares of
common stock from 1,000,000 to 1,500,000. In March 1998, the Company increased
the number of authorized shares of common stock from 1,500,000 to 7,500,000
(see Note 10). As of June 11, 1998, the Company increased the number of
authorized shares of common stock from 7,500,000 to 30,000,000 (see Note 10).

Stock Option Plan

The 1995 Incentive Stock Option Plan (the "Plan") provides for the granting
of incentive and nonqualified stock options to key employee and nonemployee
directors, respectively, to purchase shares of the Company's common stock. The
Plan authorizes the issuance of options to purchase up to an aggregate of
2,166,670 shares. Incentive stock options generally vest at an annual rate of
20% starting at the grant date or one year thereafter. Nonqualified options
are fully vested at the grant date. At December 31, 1997, 243,340 shares of
common stock were reserved and available for future grants under the Plan.

Stock option activity and information about stock options is summarized in
the following tables:

<TABLE>
<CAPTION>
FAIR MARKET
AVERAGE EXERCISE VALUE AT GRANT
SHARES PRICE DATE
--------- ---------------- --------------
<S> <C> <C> <C>
Balance, January 1, 1995............. --
Granted.............................. 1,200,000 $0.01 $0.01
Exercised............................ --
---------
Balance, December 31, 1995........... 1,200,000 0.01
Granted.............................. --
Exercised............................ --
---------
Balance, December 31, 1996........... 1,200,000 0.01
Granted.............................. 723,330 1.59 1.59
Exercised............................ (480,000) 0.01
---------
Balance, December 31, 1997........... 1,443,330 $0.80
=========
</TABLE>

<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
------------------------------- ----------------
AVERAGE AVERAGE
EXERCISE EXERCISE
EXERCISE PRICE RANGE SHARES AVERAGE LIFE PRICE SHARES PRICE
-------------------- --------- ------------ -------- ------- --------
<S> <C> <C> <C> <C> <C>
$0.01--$0.26................ 1,013,330 5.3 years $0.08 -- --
$2.50 and above............. 430,000 9.6 years 2.50 270,000 $2.50
--------- -------
1,443,330 270,000
========= =======
</TABLE>

F-14
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

The Company uses the intrinsic value method of accounting for stock-based
compensation. Had the fair value based method been used to account for such
compensation, the effect would not have been significant in 1995 and 1996. The
net loss per share for 1997 would have been increased to the pro forma amounts
indicated below:

<TABLE>
<S> <C>
Net loss:
As reported.................................................. $(4,213,990)
Pro forma.................................................... (4,387,385)
Net loss per share (basic and diluted):
As reported.................................................. $ (1.17)
Pro forma.................................................... (1.22)
</TABLE>

Fair market value information for the Company's stock options for 1995, 1996
and 1997 was estimated using the Black-Scholes option pricing model assuming
risk free rates of 5.75% to 6.10%, no dividend yield, and expected terms of 2
to 4 years.

8. INCOME TAXES

During 1997, the Company changed its basis of accounting for income tax
purposes from a modified cash basis to the accrual basis. As a result, the
Company reversed approximately $173,000 of net deductible temporary
differences through its 1997 current income tax provision.

Additionally, during 1997 the Company changed its estimated tax rate from
approximately 19% to 38% as a result of the use of graduated tax rates in
1996. The effect of such change was an increase in net deferred tax assets of
approximately $51,000, prior to a corresponding increase in the valuation
allowance.

At December 31, 1996 and 1997, the Company had temporary differences between
the financial statement bases and the income tax bases of certain of its
assets and liabilities, resulting primarily from the use of the modified cash
basis of accounting for income tax purposes. Additionally, at December 31,
1996 and 1997, the Company had net operating loss carryforwards of
approximately $168,000 and $3,181,000, respectively, to offset future taxable
income. The significant components of the Company's deferred tax assets
(liabilities) are as follows:

<TABLE>
<CAPTION>
1996 1997
-------- -----------
<S> <C> <C>
Loss carryforwards................................... $ 28,926 $ 1,208,598
Effect of use of modified cash basis of accounting
for income tax purposes............................. 33,242 --
Depreciation and amortization........................ (9,666) (45,119)
Allowance for doubtful accounts...................... -- 36,100
Deferred revenue..................................... -- 475,000
Other................................................ -- 16,745
-------- -----------
Net deferred tax assets............................ 52,502 1,691,324
Valuation allowance.................................. (52,502) (1,691,324)
-------- -----------
$ -- $ --
======== ===========
</TABLE>

The Company's net operating losses at December 31, 1997 expire through 2017.

F-15
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

Presented below is a reconciliation between the Company's income tax
provision and the income tax provision which would result from applying the
federal statutory tax rate to the Company's loss before income taxes:

<TABLE>
<CAPTION>
1995 1996 1997
-------- -------- -----------
<S> <C> <C> <C>
Statutory tax benefit...................... $(19,036) $(17,818) $(1,432,757)
State and local income tax benefit......... (5,394) (5,049) (168,559)
Non-deductible contributed services........ -- 10,010 --
Other non-deductible expenses.............. 4,216 4,767 13,632
Change in valuation allowance.............. 20,214 8,090 1,587,684
-------- -------- -----------
Provision for income taxes................. $ -- $ -- $ --
======== ======== ===========
</TABLE>

9. COMMITMENTS AND CONTINGENCIES

The Company leases office space and equipment under noncancellable operating
leases with terms of two to five years. Rent expense for the years ended
December 31, 1995, 1996, and 1997 totaled $44,000, $167,000, and $287,000.

The Company leases computer and office equipment and a telephone system
under noncancellable leases classified as capital leases. The fair value of
the equipment was $40,831 and $385,803 for leases starting in 1996 and 1997,
respectively. The economic useful life of the equipment is five years.

<TABLE>
<CAPTION>
OPERATING CAPITAL
--------- --------
<S> <C> <C>
1998..................................................... $331,088 $164,280
1999..................................................... 342,932 161,072
2000..................................................... 276,233 123,999
2001..................................................... -- 6,776
-------- --------
Total minimum lease obligations.......................... 950,253 456,127
Less: imputed interest................................. -- (82,320)
-------- --------
Present value of net minimum lease obligations........... 950,253 373,807
Less: current maturities............................... -- 134,927
-------- --------
Capital lease obligations, net........................... $950,253 $238,880
======== ========
</TABLE>

10. SUBSEQUENT EVENTS

In February 1998, the Company began operations under a written memorandum of
understanding with the Connecticut Department of Social Services (the "CDSS")
to provide transportation logistics and brokerage services for approximately
40,000 Medicaid recipients. In May 1998, the Company executed a final contract
with the CDSS for such services.

In March 1998, the Company amended its contracts with the Georgia Department
of Medical Assistance ( the "GDMA") for the provision of transportation
logistics and brokerage services. The amendments included provisions which
increased the capitation rate paid and modified certain operational
requirements. The amended capitation rates are effective as of February 1,
1998 and cover specific contract service periods.

F-16
<PAGE>

LOGISTICARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

Capitation rates in effect for the contract service period from February 1,
1998 through March 31, 1998 resulted in an increase in revenues for the first
quarter of 1998 of approximately $4,200,000 compared to the revenues which
would have been recognized based on the rates in effect immediately prior to
February 1, 1998. Under the amended contract which is subject to renewal by
GDMA, capitation rates in effect for the contract service periods subsequent
to June 30, 1998 are 23% to 26% lower than the rates in effect for the period
before July 1, 1998.

In March 1998, the Company increased the number of authorized shares of
common stock from 1,500,000 to 7,500,000 and simultaneously effected a 5-for-1
stock split. In addition, in connection with the contemplated initial public
offering of the Company's common stock, in June 1998, the Company's Board of
Directors and stockholders approved an additional increase in the authorized
number of shares of common stock from 7,500,000 to 30,000,000 and an
additional increase in the authorized number of shares of Preferred Stock from
100,000 to 1,000,000 and authorized a 2-for-1 stock split, effected as of June
11, 1998. The effect of the 5-for-1 stock split and the effect of the 2-for-1
stock split have been reflected for all periods presented. All references to
the number of common shares and per share amounts elsewhere in the financial
statements and the notes thereto have been restated to reflect the effect of
the 5-for-1 and 2-for-1 stock splits for all periods presented.

F-17
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICI-
TATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................................................... 3
Risk Factors........................................................... 5
Use of Proceeds........................................................ 13
Dividend Policy........................................................ 13
Capitalization......................................................... 14
Dilution............................................................... 15
Selected Financial Information......................................... 16
Management's Discussion and Analysis of Financial Condition and Results
of Operations......................................................... 17
Business............................................................... 24
Management............................................................. 35
Certain Transactions................................................... 41
Principal and Selling Stockholders..................................... 42
Description of Capital Stock........................................... 45
Shares Eligible for Future Sale........................................ 47
Underwriting........................................................... 48
Legal Matters.......................................................... 49
Experts................................................................ 49
Additional Information................................................. 50
Index to Consolidated Financial Statements............................. F-1
</TABLE>

-----------

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDI-
TION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UN-
DERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

3,300,000 SHARES

LOGO

COMMON STOCK

--------------
PROSPECTUS
--------------

HAMBRECHT & QUIST

EVEREN SECURITIES, INC.

, 1998

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses and costs (other than
underwriting discounts and commissions) expected to be incurred by the Company
in connection with the issuance and distribution of the securities being
registered under this registration statement. Except for the SEC and NASD
filing fees, all expenses have been estimated and are subject to future
contingencies.

<TABLE>
<S> <C>
SEC registration fee............................................... $ 13,434
NASD fee........................................................... 5,000
Nasdaq Entry Fee................................................... 82,000
Legal fees and expenses............................................ 250,000
Printing and engraving expenses.................................... 150,000
Accounting fees and expenses....................................... 200,000
Blue sky fees and expenses......................................... 5,000
Transfer agent and registrar fees and expenses..................... 10,000
Miscellaneous...................................................... 34,566
--------
Total............................................................ $750,000
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article Seventh of the Company's Restated Certificate of Incorporation
provides that the Company shall indemnify and hold harmless, to the fullest
extent authorized by the Delaware General Corporation Law, its officers and
directors against all expenses, liability and loss actually and reasonably
incurred in connection with any civil, criminal, administrative or
investigative action, suit or proceeding. The Restated Certificate of
Incorporation also extends indemnification to those serving at the request of
the Company as directors, officers, employees or agents of other enterprises.

In addition, Article Seventh of the Company's Restated Certificate of
Incorporation provides that no director shall be personally liable for any
breach of fiduciary duty. Article Seventh does not eliminate a director's
liability (i) for a breach of his or her duty of loyalty to the Company or its
stockholders, (ii) for acts of intentional misconduct or knowing violations of
law, (iii) under Section 174 of the Delaware General Corporation Law for
unlawful declarations of dividends or unlawful stock purchases or redemptions,
or (iv) for any transactions from which the director derived an improper
personal benefit.

Section 145 of the General Corporation Law of the State of Delaware permits
a corporation to indemnify its directors and officers against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit
or proceeding brought by third parties, if such directors or officers acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reason to believe their conduct was unlawful. In a
derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses actually and reasonably incurred
by directors and officers in connection with the defense or settlement of an
action or suit, and only with respect to a matter as to which they shall have
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interest of the corporation, except that no
indemnification shall be made if such person shall have been adjudged liable
to the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
officers or directors are reasonably entitled to indemnity for such expenses
despite such adjudication of liability.

Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a corporation may eliminate or limit the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its

II-1
<PAGE>

stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective.

The Underwriting Agreement provides for indemnification of directors and
officers of the Company by the Underwriters against certain liabilities.

Pursuant to Section 145 of the DGCL and the Restated Certificate of
Incorporation and the Amended and Restated By-laws of the Company, the Company
maintains directors' and officers' liability insurance coverage.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since January 1, 1995, the Company has issued unregistered securities in the
transactions described below, all of which were deemed to be exempt from
registration under the Securities Act. All discussions of transactions
occurring after March 30, 1998 in this Item 15 give effect to a 5-for-1 stock
split of Common Stock that was effected in at such time (the "Stock Split").
All references to "Common Shares" refer to shares of the Company's Common
Stock, $.01 par value per share. All references to "Preferred Shares" refer to
shares of the Company's Series A Preferred Stock, $.01 par value per share.

(1) On or about January 1, 1996, in connection with the purchase of all of
the outstanding shares of Automated Dispatch Systems, Inc. ("Systems"),
the Company issued a total of 275,000 Common Shares to John L.
Shermyen, Edward Steinberg, Sigmund Zilber and Martin Zilber. The
Company relied upon the representations by Messrs. Steinberg, Zilber
and Zilber concerning their knowledge and experience in financial and
business markets and net worth.

(2) On or about March 21, 1997, the Company issued a total of 974,150
Common Shares to Derace L. Schaffer, John Pappajohn and four investors
designated by Mr. Pappajohn pursuant to the terms of a Stock Purchase
Agreement dated March 21, 1997 (the "Purchase Agreement") for an
aggregate purchase price of $500,000. Messrs. Schaffer and Pappajohn
and such investors are Accredited Investors (as defined in Rule 501
under the Securities Act of 1933, as amended ("Rule 501")). The Company
provided Messrs. Schaffer and Pappajohn with a private placement
memorandum and afforded them access to senior management of the
Company.

(3) Between March 21, 1997 and June 6, 1997, the Company issued 16,250
Common Shares to John L. Shermyen, President and Chief Executive
Officer of the Company, for an aggregate purchase price of $4,170 upon
the exercise of certain contractual preemptive rights in connection
with the issuance of Common Shares referred to in paragraph (2) above.

(4) On or about March 21, 1997, the Company issued 52,810 Common Shares to
Edward Steinberg for an aggregate purchase price of $13,553 upon the
exercise of certain contractual preemptive rights in connection with
the issuance of Common Shares referred to in paragraph (2) above. The
Company relied upon representations made by Mr. Steinberg in connection
with the issuance of Common Shares referred to in paragraph (1) above.

(5) On or about June 6, 1997, the Company issued a total of 974,150
Preferred Shares to Pappajohn and seven investors designated by Messrs.
Schaffer and Pappajohn and the Company pursuant to the terms of the
Purchase Agreement for an aggregate purchase price of approximately
$1,000,000. Messrs. Schaffer and Pappajohn and such investors are
Accredited Investors (as defined in Rule 501). The Company provided
Messrs. Schaffer and Pappajohn with a private placement memorandum and
afforded them access to senior management of the Company.

(6) On or about November 18, 1997, the Company issued 400,000 Common Shares
to John L. Shermyen, President and Chief Executive Officer of the
Company, for an aggregate purchase price of $800 as a result of his
exercise of certain stock options.

(7) On or about November 18, 1997, the Company issued 80,000 Common Shares
to Michael E. Weksel, Vice President and Chief Financial Officer of the
Company, for an aggregate purchase price of $160 as a result of his
exercise of certain stock options.

II-2
<PAGE>

No underwriters were involved in the foregoing transactions and no
underwriting discounts or commissions were paid in connection therewith. The
issuances of securities sold in the transactions reference above were not
registered under the 1933 Act in reliance on the exemption in Section 4(2) of
the 1933 Act. The Company believes that Common Shares that were issued to
existing shareholders in connection with the Stock Split were, to the extent
that the Securities Act was applicable to such transaction, exempt from
registration under the Securities Act because they involved no "sales" within
the meaning of Section 2(3) of the Securities Act.

ITEM 16. EXHIBITS

<TABLE>
<C> <S>
1.1 Revised Form of Underwriting Agreement
3.1 Certificate of Incorporation of the Company (including all amendments)
3.2 By-Laws of the Company
3.3 Restated Certificate of Incorporation of the Company, adopted by the
Company on June 10, 1998
3.4 Amended and Restated By-Laws of the Company, adopted by the Company on
June 10, 1998
4.1 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of the Company, dated June 6, 1997
5* Opinion of Proskauer Rose LLP re: validity of securities
9.1 Agreement between TGIS Partners, as nominee, and William B. McLiverty,
dated February 16, 1998
9.2 Agreement between TGIS Partners, as nominee, and Joseph Handy, dated
February 16, 1998
9.3 Agreement between TGIS Partners, as nominee, and Charles P. Krokel,
dated February 16, 1998
9.4 Agreement between TGIS Partners, as nominee, and Gregory Weksel, dated
February 16, 1998
9.5 Agreement between TGIS Partners, as nominee, and Leonard Levine, dated
February 16, 1998
9.6 Agreement between TGIS Partners, as nominee, and Bertrand H. Weidberg,
Esq., dated February 16, 1998
9.7 Agreement between TGIS Partners, as nominee, and Francis M. Sassano,
dated February 16, 1998
9.8 Agreement between TGIS Partners, as nominee, and David Weksel, dated
February 16, 1998
9.9 Agreement between TGIS Partners, as nominee, and Deanna Weksel, dated
February 16, 1998
9.10 Agreement between TGIS Partners, as nominee, and Leonor Firstenberg,
dated February 16, 1998
9.11* Voting Trust Agreement, between William Weksel and Lawrence Slater, as
Trustee, dated July 28, 1998.
10.1 Employment Agreement, dated July 14, 1998, between the Company and
John L. Shermyen
10.2 1995 Incentive Stock Option Plan of the Company (including all
amendments)
10.3 Agreement, dated June 20, 1996, between Automated Dispatch Systems,
Inc. and Health Trans, Inc.
10.4 Agreement, dated June 20, 1996, between Automated Dispatch Systems,
Inc. and Health Trans of South Florida, Inc.
10.5 Dispatch Services Agreement, dated June 20, 1996, between Automated
Dispatch Systems, Inc. and Comprehensive Paratransit Services
10.6 Management and Advisory Agreement, dated June 20, 1996, between
Automated Dispatch Systems, Inc. and SEM, Inc.
10.7 Agreement, dated June 20, 1996, among Automated Dispatch Systems, Inc.
Comprehensive Paratransit Services and SEM, Inc.
</TABLE>

II-3
<PAGE>

<TABLE>
<C> <S>
10.8 Agreement, dated May 29, 1998, between the Company and the Connecticut
Department of Social Services
10.9 Contract, dated July 17, 1997, between the Company and the Georgia
Department of Administrative Services with respect to the Central region
of Georgia (including all amendments and renewals)
10.10 Contract, dated July 17, 1997, between the Company and the Georgia
Department of Administrative Services with respect to the East region of
Georgia (including all amendments and renewals)
10.11 Contract, dated July 17, 1997, between the Company and the Georgia
Department of Administrative Services with respect to the Southwest
region of Georgia (including all amendments and renewals)
10.12 Lease Agreement, dated August 27, 1997, between the Company and
Principal Mutual Life Insurance Company (including all amendments)
10.13 Lease Agreement, dated August 7, 1997, between the Company and New World
Partners Joint Venture
10.14 Lease Agreement, dated October 8, 1996, between the Company and Gerald
A. Chase
10.15 License Agreement between Automated Dispatch Systems, Inc. and Automated
Dispatch Services, Inc., dated January 1, 1995
10.16 License Agreement between Automated Dispatch Services, Inc. and
RadioSoft, Inc. dated April 26, 1994 (including all amendments)
10.17 Agreement between E.F Johnson and RadioSoft, Inc. dated March 3, 1995
10.18 1998 Stock Option Plan of the Company
10.19 Employment Agreement, dated July 14, 1998, between the Company and
Michael E. Weksel
10.20 Credit facility and related agreements with respect to NationsBank N.A.
line of credit
10.21 Employment Agreement, dated July 13, 1998, between the Company and John
M. Whitcomb
10.22 Employment Agreement, dated July 14, 1998, between the Company and
Gerald F. Souza
23.1* Consent of PricewaterhouseCoopers LLP
23.2* Consent of Proskauer Rose LLP (contained in opinion to be filed as
Exhibit 5)
24.1 Power of Attorney (set forth on page II-22)
27.1 Financial Data Schedule
</TABLE>
- ---------------------
* Filed herewith

II-4
<PAGE>

ITEM 17. UNDERTAKINGS

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

The Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement (filed herewith as Exhibit
1.1) certificates in such denominations and registered in such names as
required by the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.

II-5
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE UNDERSIGNED
REGISTRANT CERTIFIES THAT IT HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE 6TH DAY OF
AUGUST, 1998.

LogistiCare, Inc.

/s/ John L. Shermyen
By: _________________________________
John L. Shermyen
Chairman of the Board, President
and Chief Executive Officer

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE TITLE DATE

/s/ John L. Shermyen Chairman of the Board,
_________________________ President and Chief August 6, 1998
JOHN L. SHERMYEN Executive Officer

/s/ Michael E. Weksel
_________________________ Vice President, Chief August 6, 1998
MICHAEL E. WEKSEL Financial Officer and
Director (Principal
Financial Officer)

_________________________ Director August , 1998
JOHN PAPPAJOHN

Director August , 1998
_________________________
DERACE L. SCHAFFER

/s/ William Weksel* Director
_________________________ August 6, 1998
WILLIAM WEKSEL

/s/ Albert Cortina* Corporate Controller
_________________________ (Controller or Principal August 6, 1998
ALBERT CORTINA Accounting Officer)

/s/ Michael E. Weksel
*By: ____________________
MICHAEL E. WEKSEL
ATTORNEY-IN-FACT

II-6
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
1.1 Revised Form of Underwriting Agreement
3.1 Certificate of Incorporation of the Company (including all
amendments)
3.2 By-Laws of the Company
3.3 Restated Certificate of Incorporation of the Company, adopted
by the Company on June 10, 1998
3.4 Amended and Restated By-Laws of the Company, adopted by the
Company on June 10, 1998
4.1 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of the Company, dated June 6, 1997
5* Opinion of Proskauer Rose LLP re: validity of securities
9.1 Agreement between TGIS Partners, as nominee, and William B.
McLiverty, dated February 16, 1998
9.2 Agreement between TGIS Partners, as nominee, and Joseph Handy,
dated February 16, 1998
9.3 Agreement between TGIS Partners, as nominee, and Charles P.
Krokel, dated February 16, 1998
9.4 Agreement between TGIS Partners, as nominee, and Gregory
Weksel, dated February 16, 1998
9.5 Agreement between TGIS Partners, as nominee, and Leonard
Levine, dated February 16, 1998
9.6 Agreement between TGIS Partners, as nominee, and Bertrand H.
Weidberg, Esq., dated February 16, 1998
9.7 Agreement between TGIS Partners, as nominee, and Francis M.
Sassano, dated February 16, 1998
9.8 Agreement between TGIS Partners, as nominee, and David Weksel,
dated February 16, 1998
9.9 Agreement between TGIS Partners, as nominee, and Deanna Weksel,
dated February 16, 1998
9.10 Agreement between TGIS Partners, as nominee, and Leonor
Firstenberg, dated February 16, 1998
9.11* Voting Trust Agreement, between William Weksel and Lawrence
Slater, as Trustee, dated July 28, 1998.
10.1 Employment Agreement, dated July 14, 1998, between the Company
and John L. Shermyen
10.2 1995 Incentive Stock Option Plan of the Company (including all
amendments)
10.3 Agreement, dated June 20, 1996, between Automated Dispatch
Systems, Inc. and Health Trans, Inc.
10.4 Agreement, dated June 20, 1996, between Automated Dispatch
Systems, Inc. and Health Trans of South Florida, Inc.
10.5 Dispatch Services Agreement, dated June 20, 1996, between
Automated Dispatch Systems, Inc. and Comprehensive Paratransit
Services
10.6 Management and Advisory Agreement, dated June 20, 1996, between
Automated Dispatch Systems, Inc. and SEM, Inc.
10.7 Agreement, dated June 20, 1996, among Automated Dispatch
Systems, Inc. Comprehensive Paratransit Services and SEM, Inc.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
10.8 Agreement, dated May 29, 1998, between the Company and the
Connecticut Department of Social Services
10.9 Contract, dated July 17, 1997, between the Company and the
Georgia Department of Administrative Services with respect to
the Central region of Georgia (including all amendments and
renewals)
10.10 Contract, dated July 17, 1997, between the Company and the
Georgia Department of Administrative Services with respect to
the East region of Georgia (including all amendments and
renewals)
10.11 Contract, dated July 17, 1997, between the Company and the
Georgia Department of Administrative Services with respect to
the Southwest region of Georgia (including all amendments and
renewals)
10.12 Lease Agreement, dated August 27, 1997, between the Company and
Principal Mutual Life Insurance Company (including all
amendments)
10.13 Lease Agreement, dated August 7, 1997, between the Company and
New World Partners Joint Venture
10.14 Lease Agreement, dated October 8, 1996, between the Company and
Gerald A. Chase
10.15 License Agreement between Automated Dispatch Systems, Inc. and
Automated Dispatch Services, Inc., dated January 1, 1995
10.16 License Agreement between Automated Dispatch Services, Inc. and
RadioSoft, Inc. dated April 26, 1994 (including all amendments)
10.17 Agreement between E.F Johnson and RadioSoft, Inc. dated March
3, 1995
10.18 1998 Stock Option Plan of the Company
10.19 Employment Agreement, dated July 14, 1998, between the Company
and Michael E. Weksel
10.20 Credit facility and related agreements with respect to
NationsBank N.A. line of credit
10.21 Employment Agreement, dated July 13, 1998, between the Company
and John M. Whitcomb
10.22 Employment Agreement, dated July 14, 1998, between the Company
and Gerald F. Souza
23.1* Consent of PricewaterhouseCoopers LLP
23.2* Consent of Proskauer Rose LLP (contained in opinion to be filed
as Exhibit 5)
24.1 Power of Attorney (set forth on page II-22)
27.1 Financial Data Schedule
</TABLE>
- ---------------------

* Filed herewith

<PAGE>

Exhibit 5
PROSKAUER ROSE LLP
1585 Broadway
New York, NY 10036

August 5, 1998

The Board of Directors
LogistiCare, Inc.
One Crown Center
1895 Phoenix Boulevard, Suite 306
College Park, Georgia 30349

Ladies and Gentlemen:

You have requested our opinion in connection with the filing by
LogistiCare, Inc., a Delaware corporation (the "Company"), with the Securities
and Exchange Commission of a Registration Statement on Form SB-2 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to 3,795,000 shares of common stock, $.01 par
value per share, of the Company (the "Shares").

We have examined such documents as we have considered necessary for this
opinion. In that connection, we have assumed, without investigation, the
authenticity of any document submitted to us as an original, the conformity to
originals of any document submitted to us as a copy, the authenticity of the
originals of such latter documents, the genuineness of all signatures and the
legal capacity of natural persons signing such documents.

Based upon the foregoing, it is our opinion that the Shares have been duly
authorized and are, and, in the case of the Shares to be issued by the Company,
when such Shares are issued and delivered in accordance with the underwriting
agreement described in the Registration Statement, will be, validly issued,
fully paid and nonassessable.

This opinion is limited to the General Corporation Law of the State of
Delaware and does not purport to express any opinion on any other laws.
<PAGE>

The Board of Directors
LogistiCare, Inc.
August 5, 1998
Page 2

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in the Registration Statement. In so
doing, we do not admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Securities and Exchange Commission thereunder.

Very truly yours,

PROSKAUER ROSE LLP

<PAGE>

Exhibit 9.11

VOTING TRUST AGREEMENT
----------------------

THIS VOTING TRUST AGREEMENT (the "Agreement") is made and entered into as
of the 28th day of July, 1998, between LAWRENCE SLATER, as Trustee (hereinafter,
with any successors, referred to as the "Trustee"), and WILLIAM WEKSEL, as
beneficiary (hereinafter referred to individually as a "Beneficiary" and,
together with his successors and assigns, the "Beneficiaries").

W I T N E S S E T H :
-------------------

WHEREAS, LogistiCare, Inc. (the "Company") has been organized under the
laws of the State of Delaware with an authorized capitalization of 30,000,000
shares of Common Stock, $.01 par value per share (the "Common Stock") and
1,000,000 shares of Preferred Stock, $.01 par value per share;

WHEREAS, the Beneficiary is the record and beneficial owner of 3,134,624
shares of Common Stock, 1,000,000 shares of which the Beneficiary intends to
sell pursuant to the Company's initial public offering ("IPO");

WHEREAS, the Beneficiary believes that it is advisable and in the best
interests of the Company to enter into this Agreement in connection with the
Company's application to have its Common Stock quoted and traded on the Nasdaq
Stock Market (the "Nasdaq Application"); and

WHEREAS, the Beneficiary desires to enter into this Agreement, subject to,
and effective upon, listing of the Common Stock on the Nasdaq Stock Market (the
"Listing").

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
<PAGE>

ARTICLE I

DEPOSIT OF STOCK AND ISSUANCE
OF VOTING TRUST CERTIFICATES
----------------------------

Section 1.01. Deposit of Stock.
----------------

(a) Subject to Section 6.01(a) hereof, on or prior to the Listing,
Beneficiary shall deliver to the Trustee certificates for 2,134,624 shares of
Common Stock owned by him duly endorsed for transfer or accompanied by duly
executed stock powers.

(b) Promptly upon receipt of certificates representing such shares of
Common Stock, the Trustee shall cause the certificates to be surrendered to the
Company and cancelled and new certificates therefor issued to, and in the name
of, the Trustee and shall cause the Trustee's ownership as a Trustee pursuant to
this Agreement to be entered in the stock transfer records of the Company. The
Trustee shall cause such new certificates to bear a legend on the face thereof
in the form specified in Section 2.03 hereof.

Section 1.02. Issuance of Voting Trust Certificates. The Trustee
-------------------------------------
shall issue and deliver to each Beneficiary a Voting Trust Certificate (a
"Certificate") in respect of the shares deposited with and held by the Trustee
for the benefit of each such Beneficiary under this Agreement, or which are or
become subject to this Agreement, in the form set forth in Exhibit A hereto.
Such Certificate shall be signed by the Trustee.

Section 1.03. Duplicate Certificates. If a Certificate shall be
----------------------
lost, stolen, mutilated or destroyed, the Trustee, shall issue a duplicate of
such Certificate upon receipt of (a) an indemnity agreement satisfactory to the
Trustee and (b) the existing Certificate, if mutilated.

Section 1.04. Certificate Book. The Trustee shall maintain complete
----------------
and correct records and books of account of all its transactions as Trustee, and
shall maintain a book to be known as the Certificate Book containing the name of
each Beneficiary, showing their respective addresses, the number of shares
represented by the Certificates held by them and other pertinent information.
Such records and books of account and the Certificate Book shall be available to
each Beneficiary upon written request.

2
<PAGE>

ARTICLE II

TRUSTEE'S RIGHTS AS
A STOCKHOLDER OF THE COMPANY
----------------------------

Section 2.01. Trustee's Rights and Powers. So long as the Trustee
---------------------------
shall hold stock of the Company deposited pursuant to the provisions of this
Agreement (the "Trust Stock"), the Trustee shall possess, and shall exercise in
person or by its nominees, agents, attorneys-in-fact or proxies, the right,
subject to the terms hereof, to vote thereon and to take part in any consent to
any corporate or stockholders' action of any kind whatsoever and to receive
dividends and distributions on all such stock subject to the terms and
conditions set forth in Article III herein. Notwithstanding anything to the
contrary contained in this Agreement, the Trustee shall have no discretion with
respect to voting the Trust Stock or taking part in any consent to any corporate
or stockholders' action, and shall vote the Trust Stock or take part in any
consent to any corporate or stockholders' action (whether for, against and/or
abstaining, as the case may be) in a manner as shall result in the votes
represented by the Trust Stock being cast in the same proportion as the votes
cast (whether for, against and/or abstaining, as the case may be) by the holders
of all other shares of Common Stock. Without limiting the generality of the
foregoing, the right of the Trustee to vote the Trust Stock shall include the
right to vote in any election of directors and in favor of, and/or in opposition
to, any resolution or proposed action of any character whatsoever which may be
presented at any meeting or require the consent of stockholders of the Company,
including any resolution or proposed action in which the Trustee is personally
interested, and to receive and waive any notices to stockholders as required by
law or the certificate of incorporation or by-laws of the Company.

Section 2.02. Trustee's Limited Authority to Transfer.
---------------------------------------
Notwithstanding the provisions of Section 2.01, except as set forth in this
Section 2.02, the Trustee shall have no authority to sell, transfer, otherwise
dispose of or pledge or hypothecate (in any such case, a "Disposition") any of
the Trust Stock, except that upon receipt of a written notice of a Disposition
(a "Notice of Disposition") from a Beneficiary, the Trustee shall:

(i) execute all documents and take all other action necessary
to effect such Disposition; and

(ii) upon receipt from such Beneficiary of either (A) payment of
a sum sufficient to cover any tax or government charges in respect of
the transfer or delivery of such certificates ("Transfer Taxes"), or
(B) indemnity, in form reasonably satisfactory to the Trustee, from
and against any Transfer Taxes in respect of such transfer or
delivery, cause certificates representing the Trust Stock that are the
subject of such Disposition, duly

3
<PAGE>

endorsed for transfer or accompanied by duly executed instruments of
transfer, to be delivered to the persons and place designated in the
Notice of Disposition; provided, however, that the Trustee shall have
-------- -------
no obligation to collect or receive the purchase price or other
consideration to be received by such Beneficiary; and

(iii) in the event such Disposition does not involve all the
Trust Stock, upon the consummation of such Disposition issue to such
Beneficiary a new Certificate in respect of the Trust Stock not
subject to such Disposition.

Section 2.03. Certificate Legends. The Trustee agrees that all
-------------------
certificates representing shares of stock of the Company which are, or at any
time become, subject to this Agreement shall have endorsed upon them a legend as
follows:

The securities represented by this certificate are subject to the
terms of, a Voting Trust Agreement made and entered into as of July
__, 1998 between the registered holder of these shares, as Trustee,
and the Beneficiaries named therein, copies of which are on file at
the offices of the corporation.

Section 2.04. Certain Dispositions. Notwithstanding anything to the
--------------------
contrary contained in this Agreement, the Trustee shall not effect any
Disposition, and the Beneficiary shall not deliver a Notice of Disposition, if
the purchaser, transferee, pledgee or other party in interest to a Disposition
is a member of William Weksel's immediate family, unless such purchaser,
transferee, pledgee or other party in interest to the Disposition first executes
a counterpart of this Agreement, agreeing thereby to be bound hereby as a
Beneficiary and deposits the shares of stock that are the subject of such
Disposition with the Trustee to be held by the Trustee pursuant to this
Agreement.

4
<PAGE>

ARTICLE III

DIVIDENDS AND DISTRIBUTIONS
---------------------------

Section 3.01. Cash Dividends. Each Beneficiary shall be entitled,
--------------
with respect to the Trust Stock for which Certificates have been issued to such
Beneficiary, to receive from time to time payments equal to the amount of cash
dividends, if any, collected or received by the Trustee or its successors upon
the Trust Stock in respect of which such Certificates are issued. Such payments
shall be made to the Beneficiaries as soon as practicable after the receipt of
such dividends by the Trustee. The Trustee may arrange with the Company for the
direct payment by the Company of dividends to the Beneficiaries.

Section 3.02. Non-Voting Stock and Other Distributions. If at any
----------------------------------------
time during the term of this Agreement the Trustee shall receive or collect any
monies through a distribution by the Company to the stockholders, other than in
payment of cash dividends, or shall receive any property (other than shares of
voting stock of the Company) through a distribution by the Company to its
stockholders, the Trustee shall distribute the same to the Beneficiaries.

Section 3.03. Voting Stock Dividend or Distribution. If the Trustee
-------------------------------------
shall receive, as a dividend or other distribution upon any shares of Trust
Stock, any additional shares of voting stock of the Company, the Trustee shall
hold the same subject to this Agreement for the benefit of each Beneficiary in
proportion to its interest, and said shares of stock or other securities shall
be and become subject to all of the terms and conditions hereof to the same
extent as if originally deposited hereunder. The Trustee shall issue
Certificates in respect of such shares or other securities to each Beneficiary
in proportion to its interest, and said shares of stock or other securities
shall be and become subject to all of the terms and conditions hereof to the
same extent as if originally deposited hereunder. The Trustee shall issue
Certificates in respect of such shares or other securities to the Beneficiaries.

Section 3.04. Recapitalization or Reclassification of Stock. In the
---------------------------------------------
event of a recapitalization of the Company or reclassification of shares of
Trust Stock, the Trustee shall hold, subject to the terms of this Agreement, any
shares of voting stock issued as a result of such recapitalization or
reclassification in respect of shares of Trust Stock and distribute to the
Beneficiaries any and all other securities, cash or property received by it in
respect of such recapitalization or reclassification. Certificates issued and
outstanding under this Agreement at the time of such recapitalization or
reclassification may remain outstanding or the Trustee may, in its discretion,
substitute for such Certificates new voting trust certificates in appropriate
form. Such shares of voting stock shall be and

5
<PAGE>

become subject to all of the terms and conditions hereof to the same extent as
if originally deposited hereunder.

Section 3.05. Distribution upon Dissolution of the Company. In the
--------------------------------------------
event of the dissolution and liquidation of the Company, whether voluntary or
involuntary, the Trustee as the owner of record shall receive the money,
securities, rights or property to which each Beneficiary is entitled in respect
of the Trust Stock and shall distribute or cause to be distributed the same to
the registered holder of the Certificate in accordance with the number of shares
represented by its Certificate.

Section 3.06. Distribution upon Reorganization of the Company. In
-----------------------------------------------
the event the Company is merged or consolidated into another corporation, the
Trustee shall distribute or cause to be distributed such securities, money,
rights or property, if any, received in connection therewith, to the registered
holder of the Certificates in accordance with the number of shares of Trust
Stock represented by its Certificate.

ARTICLE IV

RIGHTS TO SUBSCRIBE
-------------------

Section 4.01. Subscription Procedures. In case any securities of the
-----------------------
Company shall be offered for subscription to the Trustee in respect of the Trust
Stock, promptly upon receipt of notice of such offer, the Trustee shall mail a
copy thereof to the Beneficiaries. Upon receipt by the Trustee, prior to the
last date fixed by the Company for subscription, of a request from a Beneficiary
to subscribe on such Beneficiary's behalf, accompanied by the sum of money
required to be paid for such securities, the Trustee shall make such
subscription and payment on behalf of such Beneficiary, and upon receiving from
the Company the certificates for the securities subscribed for, shall issue to
such Beneficiary a Certificate in respect thereof if the same be securities
having any right to vote, whether absolute, contingent or otherwise, or if the
same be securities other than securities having such voting power, the Trustee
shall deliver the same to such Beneficiary.

6
<PAGE>

ARTICLE V

THE TRUSTEE
-----------

Section 5.01. Trustee's Right to Delegate. The Trustee may vote all
---------------------------
Trust Stock held hereunder in person or by such person or persons (including any
Beneficiary) as he may from time to time select as its proxy or proxies. The
Trustee may employ or use the services of accountants, attorneys, or any other
qualified personnel reasonably necessary to assist it or its agents to carry out
any of the duties undertaken pursuant to this Agreement.

Section 5.02. Trustee's Right to Indemnification. The Beneficiaries
----------------------------------
agree to indemnify and hold harmless the Trustee and each agent or attorney of
the Trustee acting hereunder from and against all liability and claims or
proceedings of any nature arising from or in connection with the acceptance or
administration of the Trust and the performance of its duties and obligations
hereunder and the exercise of its rights and powers except liability and claims
based solely upon the Trustee's individual malfeasance, and with such exception
agrees to be responsible for and to pay all damages, costs and expenses of or
assessed against the Trustee of any nature, including attorney's fees, in
connection with any such claim or proceeding.

Section 5.03. Right of Trustee to Compensation. The Trustee shall
---------------------------------
be entitled to compensation for its service as Trustee hereunder in such amount
as the Trustee and the Beneficiaries shall, from time to time, mutually agree
upon. The Trustee shall be reimbursed by the Beneficiaries for its reasonable
out-of-pocket expenses incurred in the performance of its duties hereunder.

Section 5.04. Trustee's Right to Participate. The Trustee and any
------------------------------
stockholder, director, officer, agent or employee of the Trustee may contract
with or be or become pecuniarily interested, directly or indirectly, in any
matter or transaction to which the Company or any subsidiary or controlled or
affiliated corporation may be a party or in which it may be concerned, as fully
and freely as though such Trustee were not a Trustee hereunder. The Trustee may
act as or nominate directors and officers of the Company or of any such
subsidiary or controlled or affiliated corporation and may be or become a
shareholder of the Company or of any such subsidiary or controlled or affiliated
corporation.

Section 5.05. Trustee's Powers. The Trustee is authorized and
----------------
empowered to construe this Agreement, and its reasonable construction made in
good faith shall be conclusive and binding upon the Beneficiaries.

7
<PAGE>

Section 5.06. Trustee's Liability.
-------------------

(a) The Trustee shall not be liable for any error of judgment nor for
any act done or omitted, nor for any mistake of fact or law nor for anything
which it may do or refrain from doing in good faith, nor generally shall the
Trustee have any accountability hereunder, except for its own willful default or
gross negligence. Furthermore, upon any judicial or other inquiry or
investigation of or concerning the Trustee's acts pursuant to its rights and
powers as Trustee, such acts shall be deemed reasonable unless proved to the
contrary by clear and convincing evidence.

(b) The Trustee shall always be protected and free from liability in
acting upon any notice, request, consent, certificate, declaration, telegram,
facsimile, guarantee, affidavit or other paper or document or signature believed
by it to be genuine and to have been signed by the proper party or parties or by
the party or parties purporting to have signed the same.

(c) The Trustee may consult with legal counsel, pursuant to Section
5.01 hereof, which may be counsel to the Company, and any action under this
Agreement taken or suffered in good faith by it in accordance with the opinion
of such counsel shall be conclusive upon the parties hereto and the Trustee
shall be fully protected and be subject to no liability in respect thereof.

Section 5.07. Trustee's Resignation. The Trustee may resign by
---------------------
giving notice to each Beneficiary and to the Company of its resignation at least
twenty (20) days prior to the effective date of such resignation if the Trustee
has designated a successor Trustee in accordance with the terms hereof.

Section 5.08. Appointment of Successor Trustee. At any time prior to
--------------------------------
the effective date of its resignation, the Trustee may appoint a successor
Trustee by delivering written notice to the Beneficiaries, provided that such
successor Trustee is acceptable to each of the Beneficiaries in its reasonable
judgment. Notwithstanding anything herein to the contrary, in the event
Lawrence Slater resigns or ceases to serve as Trustee hereunder and fails to
designate a successor Trustee in accordance with the terms hereof, the
Beneficiaries shall have the right to select and appoint a successor trustee
hereunder. Any successors to the Trustee named herein shall enjoy all the
rights, powers, interests and immunities of the Trustee as originally conferred
by this Agreement. All right, title and interest in stock deposited pursuant to
this Agreement of any Trustee who may resign shall, upon such resignation, vest
in the successor Trustee. Notwithstanding anything to the contrary contained in
this Agreement, neither the Trustee nor the Beneficiaries shall appoint as a
successor Trustee, William Weksel or any member of William Weksel's immediate
family.

8
<PAGE>

Section 5.09. Transfer by Successor Trustee. Notwithstanding any
-----------------------------
change in the Trustee, the certificates for shares of stock standing in the name
of the Trustee may be endorsed and transferred by any successor Trustee with the
same effect as if endorsed and transferred by the Trustee who has ceased to act.
Any successor Trustee is authorized and empowered to cause any further transfer
of said shares to be made which may be necessary by reason of a change in the
person acting as Trustee hereunder.

Section 5.10. Trustee's Acceptance of Trust. The Trustee by
-----------------------------
executing this Agreement, and each successor Trustee, upon being appointed as
such, accepts the trust created hereby and agrees to carry out the terms and
provisions hereof.

ARTICLE VI

EFFECTIVE DATE AND TERMINATION
------------------------------

Section 6.01. Effective Date; Termination.
---------------------------

(a) The voting trust created by this Agreement shall become effective
upon completion of the IPO; provided, however, that if the IPO is not completed
on or prior to October 31, 1998 or the Company withdraws the Nasdaq Application
or the Nasdaq Application is denied, this Agreement shall have no force or
effect whatsoever.

(b) The voting trust created by this Agreement shall terminate upon
the earlier of (i) the date upon which the Trust Stock constitutes less than 5%
of the total outstanding voting stock of the Company, (ii) the death or
incapacity of William Weksel or (iii) the expiration of the maximum permitted
term of voting trusts under the Delaware General Corporation Law (such period
defined as the "Term").

(c) Except as otherwise provided in this Agreement, the trust created
by this Agreement is hereby expressly declared to be irrevocable.

Section 6.02. Trustee's Rights and Duties Upon Termination. As soon
--------------------------------------------
as practicable after the termination of this Agreement with respect to any
shares deposited with the Trustee hereunder, the Trustee shall deliver to the
Beneficiaries stock certificates or instruments of transfer representing the
number of shares of the Company's stock or other securities to which each
Beneficiary is entitled upon such termination, such delivery to be contingent
upon the surrender by the Beneficiary of the Certificate issued by the Trustee
in respect of such shares, properly endorsed for transfer, and upon payment by
the Beneficiary of a sum sufficient to cover any tax or governmental charges in
respect of the transfer or delivery of such stock certificates.

9
<PAGE>

ARTICLE VII

RESTRICTIONS ON TRANSFER OF VOTING TRUST
CERTIFICATES OR ANY BENEFICIAL INTERESTS HEREUNDER
--------------------------------------------------

Section 7.01. Nature of Restrictions. Except as otherwise provided
----------------------
herein, no beneficial interests, whether or not represented by a Certificate
issued pursuant to this Agreement, in any shares of stock of the Company
deposited pursuant to this Agreement shall be sold, assigned, hypothecated,
pledged or transferred, in any manner whatsoever by the Trustee, whether by any
voluntary or involuntary act, or by gift, or by operation of law.

Section 7.02. Legend. Each Beneficiary agrees that all Certificates
------
now held or hereafter obtained by it shall have endorsed upon them a legend
substantially in the form set forth in Section 2.03.

ARTICLE VIII

MISCELLANEOUS
-------------

Section 8.01. Relationships Created Hereunder. The trust created by
-------------------------------
this Agreement is not intended to be, and shall not be treated as, a general
partnership, limited partnership, joint venture, corporation or joint stock
company or association. The relationship of the Beneficiaries to the Trustee
shall be solely that of Beneficiary of the Trust created by this Agreement and
their rights shall be limited to those conferred upon them by this Agreement.

Section 8.02. Right of Examination. An executed counterpart of this
--------------------
Agreement shall be deposited with the Company at its principal offices. This
Agreement shall be subject to the same right of examination by a stockholder of
the Company in person or by agent or attorney, as are the books and records of
the Company, and shall be subject to examination by any holder of a beneficial
interest in the voting trust created by this Agreement, either in person or by
agent or attorney, at any reasonable time for any proper purpose.

Section 8.03. Entire Agreement; Modifications. This Agreement
-------------------------------
represents the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and cannot be amended, supplemented or
changed orally, but only by an agreement in writing signed by the party or
parties against whom enforcement is sought and making specific reference to this
Agreement.

10
<PAGE>

Section 8.04. Notices. Any and all notices, requests, demands, or
-------
other communications provided for hereunder shall be given in writing and shall
be deemed to have been given (a) when received, if delivered in person, or (b)
when sent, if sent to telecopier and confirmed within 48 hours by letter mailed
or delivered to the party to be notified at its address set forth in Exhibit B
or (c) three (3) business days following the mailing thereof, if mailed by
certified first class mail, postage prepaid, return receipt requested.

Section 8.05. Successors and Assigns. This Agreement shall be
----------------------
binding upon, and inure to the benefit of, the parties hereto and their heirs,
legatees, executors, administrators, successors and assigns.

Section 8.06. Gender and Number. With respect to words used in this
-----------------
Agreement, the singular form shall include the plural form, the masculine gender
shall include the feminine or neuter gender, and vice versa, as the context
requires.

Section 8.07. Descriptive Headings. The descriptive headings of this
--------------------
Agreement are for convenience of reference only and shall not define or limit
any of the terms or provisions hereof.

Section 8.08. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one instrument.

Section 8.09. Severability. If in any judicial proceedings a court
------------
shall refuse to enforce any provision of this Agreement, then such unenforceable
provision shall be deemed eliminated from this Agreement for the purpose of
those proceedings to the extent necessary to permit the remaining provisions to
be enforced. To the full extent, however, that the provisions of any applicable
law may be waived, they are hereby waived to the end that this Agreement be
deemed to be a valid and binding agreement enforceable in accordance with its
terms.

Section 8.10. Governing Law. This Agreement shall be construed under
-------------
and its validity determined by the laws of the State of Delaware.

Section 8.11. Remedies. The parties hereto shall have all remedies
--------
for breach of this Agreement available to them provided by law or equity.
Without limiting the generality of the foregoing, the parties agree that in
addition to all other rights and remedies available at law or in equity, the
parties shall be entitled to obtain specific performance of the obligations of
each party to this Agreement and immediate injunctive relief and that in the
event any action or proceeding is brought in equity to enforce the same, no
party will urge, as a defense, that there is an adequate remedy at law.

11
<PAGE>

Section 8.12. Third Parties. Nothing in this Agreement, whether
-------------
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective permitted transferees, successors and assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or liability of
any third person to any party to this Agreement, nor shall any provision give
any third person any right of subrogation or action over or against any party to
this Agreement.

IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands as of the day and year first above written.

/s/ Lawrence Slater
---------------------------
Lawrence Slater, Trustee

/s/ William Weksel
---------------------------
William Weksel, Beneficiary

12
<PAGE>

EXHIBIT A
---------

The transfer of this Certificate is restricted by the provisions of a Voting
Trust Agreement dated July, 1998 among Lawrence Slater, as Trustee, and the
Beneficiaries named therein, copies of which are on file at the offices of the
Company and of the Trustee.

VOTING TRUST CERTIFICATE
------------------------

No. SHARES
------ -----------------
LOGISTICARE, INC.
(Incorporated under the laws of the State of Delaware)

VOTING TRUST CERTIFICATE IN RESPECT OF COMMON STOCK

THIS CERTIFIES that there have been deposited with the undersigned as
Trustee under the Voting Trust Agreement (the "Agreement") dated as of July,
1998 certificates or instruments of transfer for shares of Common Stock, $0.01
par value per share, of LogistiCare, Inc., a Delaware corporation (the
"Company"), in the number set forth above on this Certificate, and that
_________________, or registered assigns, is entitled to all the benefits
specified in the Agreement arising from said shares deposited with the Trustee,
all as provided in and subject to the terms and conditions of the Agreement to
which reference is hereby made.

Pursuant and subject to the terms of the Agreement, the Trustee or its
successor in trust shall possess and shall be entitled to vote said shares only
as provided in the Agreement and to take part in and consent to any corporate or
stockholders' action of any kind whatsoever (including, without limitation,
approval of or consent to any merger or consolidation to which the Company may
be a party, whether or not the surviving party, the dissolution of the Company
or the sale of any part or all of its business and assets), it being expressly
stipulated that no voting right passes to the above-named owner hereof or
assigns by or under this Certificate or by or under any agreement, express or
implied. The holder of this Certificate, by acceptance hereof, consents to all
the provisions of the Agreement and agrees to be bound thereby.

13
<PAGE>

This Certificate is transferable on the books of the Trustee only in
accordance with the provisions of the Agreement and only by the registered
holder hereof in person or by attorney duly authorized, and upon the surrender
hereof.

IN WITNESS WHEREOF, the Trustee has executed this Certificate this ______
day of July, 1998.

------------------------------
Lawrence Slater, Trustee

14
<PAGE>

EXHIBIT B
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ADDRESSES
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Lawrence Slater, Trustee
Seven Penn Plaza
Suite 300
New York, New York 10001-3930

William Weksel
289 Woodland Street
Tenafly, NJ 07670

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Pre-Effective Amendment No. 2 to the Registration Statement on Form SB-2 of
our report dated May 7, 1998, except as to Notes 1, 7 and 10 which are as of
June 11, 1998 relating to the financial statements of LogistiCare, Inc., which
appear in such Prospectus. We also consent to the references to us under the
headings "Experts" and "Selected Financial Data" in such Prospectus. However,
it should be noted that PricewaterhouseCoopers LLP has not prepared or
certified such "Selected Financial Data."

PRICEWATERHOUSECOOPERS LLP

Ft. Lauderdale, FL

August 6, 1998