SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from:
Commission File No. 1-12451
NEW YORK HEALTH CARE, INC.
(Name of small business issuer in its charter)
New York 11-2636089
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1850 McDonald Avenue, Brooklyn, New York 11223
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (718) 375-6700
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
(ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS)
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities under
a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 3,688,230
Transitional Small Business Disclosure Format (check one);
Yes [ ] No [X]
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
A S S E T S
(Unaudited)
Current assets:
Cash and cash equivalents $ 211,731
Accounts receivable, net of allowance for uncollectible
amounts of $183,000 5,954,056
Unbilled services 248,339
Prepaid expenses 105,151
Due from affiliates 6,876
Prepaid income taxes and income tax receivable 238,550
Deferred tax asset 77,000
-----------
Total current assets 6,841,703
Property and equipment, net 494,220
Intangibles, net 3,030,342
Deposits 46,687
-----------
Total assets $10,415,952
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued payroll $ 861,520
Note payable - bank 3,100,000
Current maturities of long term debt 495,651
Accounts payable and accrued expenses 317,500
-----------
Total current liabilities 4,774,671
-----------
Deferred tax liability 59,000
Long-term debt, less current maturities 517,848
-----------
576,848
-----------
Commitments, contingencies and other comments
Shareholders' equity:
Preferred stock $.01 par value, 2,000,000
shares authorized; 480,000 issued 4,800
Common stock, $.01 par value, 12,500,000
shares authorized; 3,750,000 shares issued,
3,688,230 outstanding 37,500
Additional paid-in capital 4,659,518
Retained earnings 434,618
----------
5,136,436
Less: Treasury stock (61,770 common shares at cost) (72,003)
----------
Total shareholders' equity 5,064,433
----------
Total liabilities and shareholders' equity $10,415,952
===========
See accompanying notes to consolidated financial statements
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
1998 1999
---------- ----------
Net patient service revenue $4,575,866 $5,085,045
---------- ----------
Expenses:
Professional care of patients 3,221,661 3,645,622
General and administrative 1,106,066 1,479,660
Bad debt expense 15,000
Depreciation and amortization 37,542 62,549
---------- ----------
Total operating expenses 4,365,269 5,202,831
---------- ----------
Income (loss) from operations 210,597 (117,786)
---------- ----------
Nonoperating income (expenses):
Interest income 19,554
Other income 9,000
Interest expense (55,107) (82,432)
---------- ----------
Nonoperating (expenses) income, net (26,553) (82,432)
---------- ----------
Income (loss) before provision
(credit) for income taxes 184,044 (200,218)
---------- ----------
Provision (credit) for income taxes:
Current 70,800 (91,000)
Deferred 5,000
---------- ----------
70,800 (86,000)
---------- ----------
Net income (loss) 113,244 (114,218)
Dividends declared on preferred stock 13,500
---------- ----------
Net income (loss) applicable to common stock $ 113,244 $(127,718)
========== =========
Basic and diluted earnings (loss) per share $.03 $(.03)
==== ====
Weighted average shares outstanding 3,750,000 3,692,262
========= =========
Diluted weighted average shares outstanding 3,750,000 3,692,262
========= =========
Dividends declared per share of preferred stock $.03
====
See accompanying notes to consolidated financial statements
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Preferred Treasury
Common Stock Stock Additional Stock
------------------ -------------- Paid-In --------------- Retained
Shares Amount Shares Amount Capital Shares Amount Earnings Total
--------- ------ ------ ------ ---------- ------ ------ -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999 3,750,000 $37,500 480,000 $4,800 $4,659,518 41,970 $(50,924) $ 562,336 $5,213,230
Treasury stock purchased
during January through March
($1.06 average per share) 19,800 (21,079) (21,079)
Dividends declared on
preferred stock
($.03 per share) (13,500) (13,500)
Net loss (114,218) (114,218)
Balance at March 31, --------- ------- ------- ------ ---------- ------ -------- --------- ----------
1999 3,750,000 $37,500 480,000 $4,800 $4,659,518 61,770 $(72,003) $ 434,618 $5,064,433
========= ======= ======= ====== ========== ====== ======== ========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
---------------------------
1998 1999
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 113,244 $(114,218)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 37,542 62,549
Deferred tax expense 5,000
Deferred revenue (9,000) --
Bad debt expense 15,000
Changes in operating assets and liabilities:
Increase in accounts receivable and unbilled services (1,323,998) (201,112)
Increase in due from affiliates (15,095) (401)
Increase in prepaid taxes and income tax receivable (238,550)
Decrease in prepaid expenses 5,087 35,796
Increase in deposits (3,967) (835)
Decrease in accounts receivable due after one year 180,604 --
Increase in accrued payroll 221,182 296,563
Increase (decrease) in accounts payable and accrued expenses 159,006 (75,684)
Decrease in income taxes payable (91,910) (35,215)
----------- ---------
Net cash used in operating activities (727,305) (251,107)
----------- ---------
Cash flows from investing activities:
Acquisition of fixed assets (88,640) (40,896)
Payments for the purchase acquisitions and associated costs (537,518) (40,000)
Costs incurred for future acquisitions (37,902)
----------- ---------
Net cash used in investing activities (664,060) (80,896)
----------- ---------
Cash flows from financing activities:
Borrowings under notes payable 1,450,000 500,000
Repayment of long-term debt (25,000) (127,862)
Purchase of treasury stock (21,079)
----------- ---------
Net cash provided by financing activities 1,425,000 351,059
----------- ---------
Net increase in cash and cash equivalents 33,635 19,056
Cash and cash equivalents at beginning of period 171,859 192,675
----------- ---------
Cash and cash equivalents at end of period $ 205,494 $ 211,731
=========== =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION:
The accompanying unaudited financial statements, which are for an interim
period, do not include all disclosures provided in the annual financial
statements. These unaudited financial statements should be read in conjunction
with the financial statements and the footnotes thereto contained in the Annual
Report on Form 10-KSB for the year ended December 31, 1998 of New York
Healthcare, Inc. and Subsidiary (the "Corporation"), as filed with the
Securities and Exchange Commission.
In the opinion of the Corporation, the accompanying unaudited financial
statements contain all adjustments (which are of a normal recurring nature)
necessary for a fair presentation of the financial statements. The results of
operations for the three months ended March 31, 1999 are not necessarily
indicative of the results to be expected for the full year.
NOTE 2 - EARNINGS/LOSS PER SHARE:
Basic earnings or loss per share excludes dilution and is computed by dividing
earnings available to common shareholders by the weighted average number of
common shares outstanding for the period.
Diluted earnings or loss per share is computed by dividing earnings available to
common shareholders by the weighted average number of common shares outstanding
for the period, adjusted to reflect potentially dilutive securities. Options and
warrants were not included in the computation of diluted earnings per share
because the exercise price was greater than the market price of the stock. The
Convertible Preferred Stock is not included in the computation of diluted
earnings per share because the effect is anti-dilutive.
Net (loss) income per common share and common share equivalent for the three
months ended March 31, 1998 and 1999 is computed as follows:
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1999
-------------- --------------
<S> <C> <C>
Earnings:
Net income (loss) $ 113,244 $ (114,218)
Preferred stock dividend (13,500)
---------- -----------
$ 113,244 $ (127,718)
========== ===========
Shares:
Weighted average number of shares outstanding 3,750,000 3,692,262
========= =========
Net income (loss) per common share $.03 $(.03)
==== =====
</TABLE>
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - ACQUISITIONS:
On February 8, 1998, the Corporation purchased the customer lists and other
intangible assets of three offices in the State of New Jersey from Metro
Healthcare Services, Inc. for $500,000 cash and a promissory note in the amount
of $580,000. The acquisition was accounted for as a purchase and, accordingly,
the assets acquired have been recorded at their estimated fair values at the
date of acquisition. The excess of cost over fair values of the purchased
business has been allocated to goodwill, customer lists and other intangible
assets and is being amortized over 25 and 10 years, respectively. Operating
results of the business have been included in the consolidated financial
statements of the Corporation since the date of acquisition.
The sum of the purchase price of $1,080,000 plus costs incurred in making the
acquisition ($39,000) aggregating $1,119,000 exceeded the fair value of the net
assets of the three offices acquired at the date of acquisition by $1,089,000;
$30,000 of the purchase price was assigned to acquired furnitures and fixtures.
On March 26, 1998, the Corporation purchased the customer lists and other
intangible assets of another entity. The entity is related to the Corporation
through common ownership and management. The aggregate purchase price is
$1,150,000. This amount was paid through issuance of a promissory note. The
acquisition was accounted for as a purchase and, accordingly, the assets
acquired have been recorded at their estimated fair values at the date of
acquisition. The excess of cost over fair values of the purchased business has
been allocated to goodwill, customer lists and other intangibles assets and is
being amortized over 25 and 10 years, respectively. Operating results of the
business have been included in the consolidated financial statements of the
Corporation since the date of acquisition.
The purchase price of $1,150,000 plus costs incurred in making the acquisition
($45,000) aggregating $1,195,000 exceeded the fair value of the net assets
acquired at the date of acquisition by $1,185,000. The purchase price has been
allocated to furniture and fixtures for $10,000; $55,000 was assigned to
contract value and customers lists and $1,130,000 was assigned to goodwill.
On February 22, 1999, the Corporation purchased customer lists and other
intangible assets from Staff Builders Services, Inc. Shrewsbury office for
$65,000. The purchase price has been allocated to furniture and fixtures for
$25,000 and the remaining $40,000 to customers lists and other intangibles.
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma summary for 1998 combines the results of
operations of the Corporation and the above mentioned acquisitions as if the
acquisitions had occurred on January 1, 1997. The unaudited proforma summary is
not necessarily indicative either of the results of operations that would have
occurred had the purchase been made during the periods presented, or of future
results of operations of the combined companies.
For the Three
Months Ended
Unaudited March 31, 1998
- ------------------------------ ---------------
Proforma revenues $5,440,409
Proforma net income 159,444
Proforma basic and diluted earnings per share $.04
NOTE 4 - TREASURY STOCK:
In January 1999, the Corporation purchased 18,800 shares of common stock for the
treasury at a cost of $18,875 and in February, purchased an additional 2,000
shares of common stock for $2,204. The treasury stock is shown at cost.
NOTE 5 - PREFERRED STOCK:
On March 31, 1999, the Corporation declared a dividend (amounting to $13,500) to
holders of preferred stock.
NOTE 6 - LINE OF CREDIT:
The Corporation has $6,000,000 line of credit with a bank. The availability of
the line of credit is based on a formula of eligible accounts receivable. At
March 31, 1999 the Corporation was overadvanced on this line of credit based on
the formula. The line is collateralized by all property and assets of the
Corporation. The Corporation has also guaranteed the line of credit. At March
31, 1999, $3,100,000 was outstanding. Borrowings under the agreement are due
between March and May 1999 and bear interest between 7.8% and 7.6%.
<PAGE>
NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7 - SUPPLEMENTAL CASH FLOW DISCLOSURES:
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1999
-------------- --------------
Supplemental cash flow disclosure:
Cash paid during the period for:
Interest $ 56,162 $ 86,670
========== ========
Income taxes $ 163,335 $184,195
========== ========
Supplemental schedule of non cash investing
and financing activities:
The Company purchased customer lists,
furniture and other intangibles which
were partially acquired through the
issuance of promissory notes $1,730,000
==========
Dividends declared, not yet paid $ 13,500
========
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Three months ended March 31, 1999 compared with three months ended March 31,
1998.
Results of operations
Revenues for the three months ended March 31, 1999 increased 11.1% to
approximately $5,085,000 from approximately $4,576,000 for the three months
ended March 31, 1998. The increase is primarily the result of the New Jersey
offices, purchased in the first quarter of 1998, being fully operational in the
first quarter of 1999. Revenue from existing New York contracts decreased 13.0%
or approximately $449,000. This was offset by a gain in revenue of approximately
$447,000 from the new New York City HRA contract.
Cost of professional care of patients for the three months ended March 31, 1999
increased 11.6% to approximately $3,646,000 from approximately $3,222,000 for
the three months ended March 31, 1998. The increase resulted from hiring
additional home health care personnel to service the increased business in New
Jersey and the HRA contract offset by the loss in the existing New York
business. The cost of professional care of patients as a percentage of revenues
increased 1.7% to approximately 71.7% for the three months ended March 31, 1999
from approximately 70.4% for three months ended March 31, 1998. The increase was
primarily caused by increased wage rates to home health aides, skilled nurses
and therapists in the State of New Jersey. In addition, the HRA contract
provides a lower gross profit than other contracts.
Selling, general and administrative expenses for the three months ended March
31, 1999 increased 21.1% to approximately $1,480,000 from approximately
$1,105,000 for the three months ended March 31, 1998. The increase resulted
primarily from the New Jersey offices purchased in 1998 which became fully
operational during the first quarter of 1999. In addition, a new branch office,
New York Home Attendant Agency, was established at previously sublet space
adjacent to the Company's corporate headquarters to service the HRA contract for
the caseload being phased in during 1999. Selling, general and administrative
expenses as a percentage of revenue increased to 29.1% from 24.2% as a result of
increased wages for marketing and business development, decreased revenue from
existing contracts in New York and increased general and administrative expenses
for the New York Home Attendant branch office, which are running at
approximately 31.8% of revenue as the office builds its caseload to the
contracted level.
Interest expense for the three months ended March 31, 1999 increased to
approximately $82,000 as compared to approximately $55,000 for the three months
ended March 31, 1998, primarily as a result of increased borrowing to finance
the purchases of the New Jersey offices and to fund the newly generated
receivables.
The credit for federal, state and local taxes for the three months ended March
31, 1999 of $86,000 is the result of the loss for the period as compared to the
approximately $71,000 provision for taxes for the three months ended March 31,
1998, which was the result of the income for the period.
In view of the foregoing, net loss for the three months ended March 31, 1999
amounted to approximately $114,000 as compared to approximately $113,000 in net
income for the three months ended March 31, 1998.
Liquidity and Capital Resources
For the three months ended March 31, 1999, net cash used in operations was
$251,000 as compared to $727,000 during the three months ended March 31, 1998, a
decrease of $476,000 or 65.5%. The $251,000 used in the three months ended March
31, 1999 was principally for the funding of the HRA contract's receivables. The
$727,000 used in the three months ended March 31, 1998 was principally due to
the approximately $1,144,000 increase in accounts receivable and unbilled
services, offset by an
<PAGE>
approximately $288,000 increase in accrued payroll, accounts payable, income
taxes payable, and approximately $113,000 in net income. The increase in
accounts receivable in 1998 was primarily the result of the acquisition of the
New Jersey offices.
Net cash used in investing activities for the three months ended March 31, 1999
approximates $81,000, primarily for the acquisition of the Staff Builders office
in Shrewsbury, New Jersey. Net cash provided by financing activities for the
three months ended March 31, 1999 totaled $335,000 compared to $1,425,000
provided in the three months ended March 31, 1998.
The $500,000 borrowed in the three months ended March 31, 1999 was primarily
used to fund the start up of the New York Home Attendant Agency, which began
servicing patients on January 6, 1999. Approximately $500,000 borrowed in the
three months ended March 31, 1998 was used for the acquisition of the New Jersey
offices and an additional $600,000 was used to fund their newly generated
receivables. As of March 31, 1999, the Company has borrowings under its line of
credit which exceed its availability by approximately $290,000. The Company's
management is currently working with the lender to restructure the availability
calculation and is seeking to convert borrowings used for acquisitions to a term
note.
As of March 31, 1999, approximately $6,120,000 (approximately 59%) of the
Company's total assets consisted of accounts receivable from clients who are
reimbursed by third-party payors, as compared to $5,993,000 (approximately 60%)
as of March 31, 1998, a decrease of 1%. Such payors generally require
substantial documentation in order to process claims.
Days Sales Outstanding ("DSO") is a measure of the average number of days taken
by the Company to collect its accounts receivable, calculated from the date
services are billed. For the three months ended March 31, 1999, the Company's
DSO was 107, compared to 116 days for the three months ended March 31, 1998. The
improvement of 9 days in DSO is the net effect of combining the New Jersey DSO's
(which consist primarily of Medicaid billings) of 48 days and the New York's
DSO's which are 143 days and the HRA contract's DSO which are currently 76 days.
Once the HRA contract is operating at its full caseload, payment is expected in
less than 45 days from invoice date. The Company received its first payment
under the HRA contract on April 9, 1999 for the Company services billed through
February 28, 1999.
The Company's liquidity and long-term capital requirements depend upon a number
of factors, including the lag time to realize collections of amounts billed to
clients for services provided and the rate at which new offices and facilities
are established and acquisitions, if any, are completed. The Company believes
that the development and start-up costs for a new branch office aggregate
approximately $100,000, including leasehold improvements, lease deposits, office
equipment, marketing, recruiting, labor and operating costs during the
pre-opening and start-up phase, and also the provision of working capital to
fund accounts receivable. Such costs will vary depending upon the size and
location of each facility and, accordingly, may vary substantially from these
estimates.
The Company is actively pursuing potential acquisitions. Further expansion of
the Company's business may require the Company to incur additional debt or offer
additional equity if internally generated funds, cash on hand and amounts
available under its bank credit facilities are inadequate to meet such needs.
There can be no assurance that such additional debt or equity will be available
to the Company, or, if available, will be on terms acceptable to the Company.
Potential Regulatory Changes
There have been news reports regarding potential changes in the way the
Government will reimburse home health care companies in the future, including
the possibility of capitation. While the Company is not currently a
Medicare-Certified Home Health Agency subject to these changes, most of the
Company's referral sources are and they may be negatively impacted by future
legislation which may be adopted to control home health care costs. While it is
still premature to discern what impact, if any, the potential changes may have
on the Company's operations, there can be no assurance that future legislation
will not result in reduced reimbursement rates from referral sources.
<PAGE>
Year 2000 Issues
The "Year 2000" Issue is the result of computer systems and programs using two
digits rather than four digits to define the applicable year. Computer systems
and programs that have date-sensitive applications may recognize a date using
"00" as the year 1900 rather than the Year 2000. This can result in system
failures or miscalculations causing disruption of operations including, but not
limited to, complete system failures, erroneous results and inability to process
transactions, send invoices, make payments or otherwise conduct normal business
activities.
The Company has initiated a "Year 2000" compliance program in which it has
identified the following areas of significant risk; computer hardware, computer
software and cash flow.
The Company presently operates two independent computer networks; a Unix-based
system for payroll and billing functions and a Windows NT-based system for other
accounting, word processing and database functions. The Company's billing system
has been modified by the software vendor and is Year 2000 compliant. The Company
expects to complete testing of the software by the end of the second quarter of
1999. The Windows NT-based system for the Company's general ledger and
accounting software, as well as its Microsoft Office software package for word
processing and database functions, are already Year 2000 compliant.
The Company obtained the services of an outside consultant to make an inventory
of all of its computer hardware and software in all of its offices and to design
and implement a communications network that will link all of the Company's
facilities and computer systems. The principal focus of that assessment is on
the Company's hardware and operating systems for its computer network and
telephone system, which have the most significant effect on the Company's
ability to conduct business in a normal manner. The new communications network,
and all new hardware and software, will be Year 2000 compliant. At the present
time, all computers in the corporate headquarters have been replaced. Upgrading
and implementation of the new system has begun and is expected to be completed
at the branch office level in the second quarter of 1999, where the Company
anticipates replacing approximately 25 desktop computers which may not function
properly on the Year 2000 compliant network. The new network is expected to be
fully operational during the second quarter of 1999.
The Company has begun formal communications with its significant payors and
vendors to determine the extent to which the Company may be vulnerable to those
third parties' failures to remediate their own Year 2000 issues. The Company's
management believes that the failure of such vendors to remediate their Year
2000 issues in a timely manner will not have a material adverse effect upon the
Company. However, there can be no assurance that the computer systems of such
third parties will be remedied in a timely manner or that failures or
incompatibility issues arising out of the remediation methods of such third
parties will not have a material adverse effect on the Company. Management
believes that, so long as the Company's ability to provide its services and
process its payroll and billing is unaffected by Year 2000 issues, the Company's
available line of credit will be adequate to sustain operations in the event
significant payors are temporarily unable to make timely payment of their
obligations to the Company.
<PAGE>
At the present time, the Company has a Year 2000 remediation budget of
approximately $50,000; $25,000 of which is for the replacement of non-compliant
hardware, $15,000 for consulting services and $10,000 for software and
contingencies. As of March 31, 1999 the Company has used approximately $12,000
of its Year 2000 budget.
The Company's assessment of its Year 2000 issues is based upon management's best
estimates, which have been derived utilizing assumptions of future events,
including the availability of certain resources, third-party modification plans
and other factors, and there can be no assurance that management's assessment of
the Company's Year 2000 issues will not have to be revised as a result of Year
2000 compliance problems which may be revealed in the future and which could
have a material adverse effect on the Company.
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits required by item 601 of Regulation S-B.
Exhibit
Number Description of Exhibit
------ ----------------------
2.1 Purchase and Sale Agreement dated December 7, 1997 among NYHC
Newco Paxxon, Inc. and Metro Healthcare Services, Inc.**
2.2 Purchase and Sale Agreement dated February 8, 1998 among NYHC
Newco Paxxon, Inc. and Metro Healthcare Services, Inc.***
<PAGE>
2.3 Purchase and Sale Agreement dated February 25, 1998 among NYHC
Newco Paxxon, Inc. and Heart to Heart Healthcare Services, Inc.***
3.1 Certificate of Incorporation of the Company.*
3.2 Restated Certificate of Incorporation of the Company.*
3.3 Certificate of Correction of Restated Certificate of Incorporation
of New York Health Care, Inc.*
3.4 Amendment to the Certificate of Incorporation filed
October 17, 1996.*
3.5 By-laws of the Company.*
3.6 Amendment to the Certificate of Incorporation of the Company filed
December 4, 1996.*
3.7 Certificate of Designations, Rights and Preferences of New York
Health Care, Inc. Class A Convertible Preferred Stock.*****
4.1 Form of certificate evidencing shares of Common Stock.*
4.2 Underwriter's Warrant Agreement and Form of Underwriter's Warrant.*
10.1 Purchase and Sale Agreement by and between the Company, National
Medical Homecare, Inc., Jerry Braun and Sam Soroka dated March 18,
1988.*
10.2 Lease for 105 Stevens Avenue, White Plains, New York by and
between the Company and Vincent Rippa as receiver dated October 30,
1992.*
10.3 Lease for 175 Fulton Avenue, Suite 30IA, Hempstead, New York by
and between and the Company and Hempstead Associates Limited
Partnership dated July 22, 1993.*
10.4 Deed for 1667 Flatbush Avenue, Brooklyn, New York from Tiara
Realty Co. to the Company dated April 22, 1994.*
10.5 Agreement between Jerry Braun, Jacob Rosenberg, Samson Soroka,
Hirsch Chitrik, Sid Borenstein and the Company dated September 30,
1988.*
<PAGE>
10.6 Lease for 49 South Main Street, Spring Valley, New York by and
between the Company and Joffe Management dated November 1,
1994.*
10.7 Agreement for Provisions of Home Health Aide and Personal Care
Worker Services by and between the Company and Kingsbridge
Heights Health Facilities Long Term Home Health Care Program dated
November 2, 1994.*
10.8 State of New York Department of Health Office of Health Systems
Management Home Care Service Agency License for the Company
doing business in Rockland, Westchester and Bronx Counties dated
May 8, 1995.*
10.9 State of New York Department of Health Office of Health Systems
Management Home Care Service Agency License for the Company
doing business in Dutchess, Orange, Putnam, Sullivan and Ulster
Counties dated May 8, 1995.*
10.10 State of New York Department of Health Office of Health Systems
Management Home Care Service Agency License for the Company
doing business in Nassau, Suffolk and Queens Counties dated May 8,
1995.*
10.11 State of New York Department of Health Office of Health Systems
Management Home Care Service Agency License for the Company
doing business in Orange and Rockland Counties dated July 1. 1995.*
10.12 Lease Renewal for 45 Grand Street, Newburgh, New York by and
between the Company and Educational and Charitable Foundation of
Eastern Orange County, Inc. dated July 12, 1995.*
10.13 Lease for 91-31 Queens Boulevard, Elmhurst, New York by and
between the Company and Expressway Realty Company dated
September 15, 1995.*
10.14 Settlement Agreement and General Release by
and between the Company and Samson Soroka
dated September 28, 1995.*
10.15 Personal Care Aide Agreement by and between the Company and
Nassau County Department of Social Services dated October 18,
1995.*
<PAGE>
10.16 Lease for 1667 Flatbush Avenue, Brooklyn, New York by and between
the Company and 1667 Flatbush Avenue LLC dated November 1,
1995.*
10.17 State of New York Department of Health Office of Health Systems
Management Home Care Service Agency License for the Company doing
business in Bronx, Kings, New York, Queens and Richmond Counties
dated December 29, 1995.*
10.18 Home Health Agency Agreement by and between the Company and the
Center for Nursing and Rehabilitation dated January 1, 1996.*
10.19 Homemaker and Personal Care Agreements by and between the
Company and the County of Rockland Department of Social Services
dated January 1, 1996.*
10.20 Home Health Aide/ Personal Care Worker Services Agreement by and
between the Company and Beth Abraham Hospital dated January 12,
1996.*
10.21 Homemaker Services Agreement by and between the Company and the
Orange County Department of Social Services dated February 16,
1996.*
10.22 Personal Care Service Agreement by and between the Company and the
Orange County Department of Social Services dated February 16,
1996.*
10.23 Certified Home Health Agency Agreement by and between the
Company and New York Methodist Hospital dated February 28, 1996.*
10.24 Employment Agreement by and between the Company and Jacob
Rosenberg dated March 26, 1996.*
10.25 Employment Agreement by and between the Company and Jerry Braun
dated March 26, 1996.*
10.26 Stock Option Agreement by and between the Company and Jerry Braun
dated March 26, 1996.*
10.27 Home Health Agency Agreement by and between the Company and the
Mount Sinai Hospital Home Health Agency dated April 1, 1996.*
<PAGE>
10.28 Absolute, Unconditional, Irrevocable and Limited Continuing
Guaranty of Payment by and between Jacob Rosenberg and United
Mizrahi Bank and Trust Company dated May 9, 1996.*
10.29 Absolute, Unconditional, Irrevocable and Limited Continuing
Guaranty of Payment by and between Jerry Braun and United Mizrahi
Bank and Trust Company dated May 9, 1996.*
10.30 Continuing General Security Agreement by and between the Company
and United Mizrahi Bank and Trust Company dated May 9, 1996.*
10.31 Agreement for the Purchase of Accounts Receivable between the
Company and 1667 Flatbush Avenue LLC dated July 8, 1996.
10.32 401 (k) Plan for the Company.*
10.33 Performance Incentive Plan for the Company.*
10.34 Services Agreement between the Company and Heart to Heart Health
Care Services, Inc., dated January 1, 1996.
10.35 Employment Agreement by and between the Company and Gilbert
Barnett dated August 27, 1996.*
10.36 Assignment of lease dated October 8, 1996, lease dated
September 30, 1995 and sublease dated May 1995 among the Company,
as tenant, Prime Contracting Design Corp., as assignor, Bellox
Realty Corp., as landlord and Nutriplus Corp., as subtenant.*
10.37 Lease for 6 Gramatan Avenue, Mount Vernon, New York, 10550 by
and between the Company and 6 Gramatan Avenue Corp. dated
December 1, 1996.*
10.38 Form of Financial Consulting Agreement with
H.J. Meyers & Co., Inc.*
10.39 Forms of Merger & Acquisition Agreement and Indemnification.*
10.40 Consulting Agreement by and between the Company and H. Gene
Berger dated July 30, 1997****
10.41 Agreement between the Company and Heart To Heart Health Care
Services, Inc. dated August 6, 1998.*****
11 Computation of Earnings Per Common Share of the Company.
<PAGE>
- --------------
* Incorporated by reference to Exhibits filed as part of the Company's
Registration Statement on Form SB-2 under File No. 333-08152, which was
declared effective on December 20, 1996.
** Incorporated by reference to Exhibits filed as part of the Company's Form
8-K report with an event date of December 8, 1997.
*** Incorporated by reference to Exhibits filed as part of the Company's Form
8-K report with an event date of February 8, 1998.
**** Incorporated by reference to Exhibits filed as part of the Company's Form
10-KSB report for the year ended December 31, 1997.
***** Incorporated by reference to Exhibits filed as part of the Company's Form
10-QSB report for the quarter ended June 30, 1998.
(b) Reports on Form 8-K. The Company has not filed reports during the first
quarter ended March 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
May 14, 1999
NEW YORK HEALTH CARE, INC.
By: /s/ David Grossman
---------------------------------------
David Grossman
Chief Financial and Accounting Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE NEW YORK HEALTH CARE, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 211,731
<SECURITIES> 0
<RECEIVABLES> 6,137,056
<ALLOWANCES> (183,000)
<INVENTORY> 0
<CURRENT-ASSETS> 6,841,703
<PP&E> 799,449
<DEPRECIATION> (305,229)
<TOTAL-ASSETS> 10,415,952
<CURRENT-LIABILITIES> 4,774,671
<BONDS> 0
0
4,800
<COMMON> 37,500
<OTHER-SE> 5,022,133
<TOTAL-LIABILITY-AND-EQUITY> 10,415,952
<SALES> 0
<TOTAL-REVENUES> 5,085,045
<CGS> 0
<TOTAL-COSTS> 3,645,622
<OTHER-EXPENSES> 1,542,209
<LOSS-PROVISION> 15,000
<INTEREST-EXPENSE> 97,614
<INCOME-PRETAX> (200,218)
<INCOME-TAX> (86,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (114,218)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
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