<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
Commission File Number 0-7667
NURSECARE HEALTH CENTERS, INCORPORATED
PENNSYLVANIA
(State of Incorporation Or Organization)
23-1712311
(I. R. S. Employer Identification No.)
Three Station Square, Paoli, Pennsylvania 19301
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 610-644-4051
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorted 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___________
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the close of the period
covered by this report.
Class Outstanding At September 30, 1996
Common Stock, $.10 par value 536,571 shares
-1-
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Unaudited
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
Current Assets:
Unrestricted Cash and Cash Equivalents $ 94,263 $ 108,205
Restricted Cash - Escrow 126,955 121,546
Accounts Receivable, Net of Allowance for
Doubtful Accounts (1996 $-0-; 1995 $-0-) 7,853 126,522
Notes Receivable, Current Portion 101,925 -
Interest Receivable 97,046 34,567
Prepaid Expenses 5,911 5,176
___________ ___________
Total Current Assets 433,953 396,016
----------- -----------
Marketable Debt Securities 1,397,162 1,642,097
----------- -----------
Property and Equipment, at Cost
Furniture and Equipment 53,851 131,144
Less: Accumulated Depreciation (50,915) (127,373)
----------- -----------
2,936 3,771
----------- -----------
Other Assets
Advances to Related Party 96,620 96,620
Notes Receivable, Less Current Portion 236,294 200,000
----------- -----------
332,914 296,620
----------- -----------
Total Assets $ 2,166,965 $ 2,338,504
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
Current Liabilities:
Accounts Payable $ 181,553 $ 186,210
Accrued Expenses and Other Liabilities
Payroll 819 6,007
Real Estate Taxes and Other Taxes 72,965 45,765
Insurance 187,048 187,048
Other 40,583 151,359
Income Taxes Payable 113,158 209,740
Deferred Taxes Payable 81,250 81,250
----------- -----------
Total Current Liabilities 677,376 867,379
----------- -----------
Stockholders' Equity (Deficiency)
Common Stock, $.10 par; Authorized
3,060,000 Shares; Issued 553,251 Shares 55,325 55,325
Additional Paid-in Capital 535,383 535,383
Unrealized Gain (Loss) on Marketable
Securities (45,414) 72,814
Retained Earnings (Deficit) 955,116 818,424
----------- -----------
1,500,410 1,481,946
Less: Treasury Stock, at Cost
(1996- 16,680 Shares and
1995 -16,680 Shares) 10,821 10,821
----------- -----------
1,489,589 1,471,125
----------- -----------
Total Liabilities and Stockholders'
Equity (Deficiency) $ 2,166,965 $ 2,338,504
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
NURSECARE HEALTH CENTERS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS
Unaudited
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30, September 30,
1996 1995
------------- -------------
<S> <C> <C>
Revenues $ 18,011 $ 6,445
----------- -----------
Cost of Operations - -
General and Administrative Expenses 400,207 361,795
Provision for Uncollectible Amounts - -
----------- -----------
400,207 361,795
----------- -----------
Income (Loss) From Operations (382,196) (355,350)
----------- -----------
Other Income (Expenses)
Interest Expense (1,803) -
Interest Income 131,813 81,495
Gain (Loss) Realized on Sale of
Marketable Debt Securities 22,264 (8,879)
Unrealized Gain (Loss) on Marketable Securities - 34,977
----------- -----------
152,274 107,593
----------- -----------
Income (Loss) Before Porvision for Income Taxes (229,922) (247,757)
Provision for Income Taxes - -
----------- -----------
Net Income (Loss) From Continuing Operations (229,922) (247,757)
Discontinued Oprations
Gain (Loss) on Disposed Nursing Facility -
(Net of Income Taxes) 366,614 628,764
----------- -----------
Net Income (Loss) 136,692 381,007
Retained Earnings, Beginning of Yeat 818,424 657,778
----------- -----------
Retained Earnings at End of Quarter $ 955,116 $ 1,038,785
=========== ===========
Earnings (Loss) Per Share $ .25 $ .70
====== ======
Weighted Average Number of Common Shares Outstanding 536,571 543,140
======= =======
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
NURSECARE HEALTH CENTERS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
Unaudited
<TABLE>
<CAPTION>
THREE MONTHS ENDED
September 30, September 30,
1996 1995
-------------- --------------
<S> <C> <C>
Revenue $ - $ 6,295
----------- -----------
Cost of Operations - -
General and Administrative Expenses 123,751 138,498
----------- -----------
Income (loss) from Operations (123,751) (132,203)
----------- -----------
Other Income (Expenses)
Interest Expense - -
Investment Income 34,717 28,501
Gain (loss) Realized on Sale of
Marketable Debt Securities 3,073 860
----------- -----------
37,790 29,361
----------- -----------
Income (Loss) Before Provision
for Income Taxes (85,961) (102,842)
Provision for Income Taxes - -
----------- -----------
Net Income (Loss) From Continuing Operations (85,961) (102,842)
Discontinued Operations
Gain (Loss) on Disposed of Nursing
Facility - (Net of Income Taxes) 165,518 (77,480)
----------- -----------
Net Income (Loss) 79,557 (180,322)
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30, September 30,
1996 1995
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income (Loss) $ 136,692 $ 381,007
----------- -----------
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Depreciation and Amortization 835 183
(Gain) Loss Realized on Sale of
Marketable Debt Securities (22,264) 8,879
Unrealized (Gain) Loss on Marketable
Debt Securities - (34,977)
Interest Receivable (62,479) -
(Increase) Decrease in Assets:
Accounts Receivable 118,669 1,149,948
Prepaid Expenses (735) 2,616
Prepaid Income Taxes - (157,499)
Estimated Third-party Payor Settlements - (567,903)
Increase (Decrease) in Liabilities:
Accounts Payable (4,657) (300,842)
Accrued Expenses (88,764) (105,098)
Income Taxes Payable (96,582) -
----------- -----------
Total Adjustments (155,977) (4,693)
----------- -----------
Net Cash Provided by (Used in)
Operating Activities (19,285) 376,314
----------- -----------
Cash Flows from Investing Activities:
Capital Expenditures - (4,163)
Increase in Escrowed Funds (5,409) -
Other Receivables (138,219) -
Purchase of Marketable Securities (646,087) (1,973,085)
Proceeds from Sale of Marketable Debt Securities 795,058 585,446
----------- -----------
Net Cash Provided by (Used in) Investing Activities 5,343 (1,391,802)
----------- -----------
Cash Flows from Finanacing Activities:
Purchase of Treasury Stock - (8,176)
----------- -----------
Net Cash (Used in) Financing Activities - (8,176)
----------- -----------
Net Increase (Decrease) in Unrestricted
Cash and Equivalents (13,942) (1,023,664)
Unrestricted Cash and Cash Equivalents
- Beginning of Year 108,205 1,072,286
----------- -----------
Unrestricted Cash and Cash Equivalents
- End of Quarter $ 94,263 $ 48,622
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30. 1996
Note 1 The Preceding financial information was prepared from
the books and records of the Company and includes all necessary
normal recurring adjustments for a fair presentation of the
results of operations on a basis consistent with the Company's
most recent annual certified financial statements filed with the
Commission for the preceding year ended December 31, 1995.
Note 2 The financial statements submitted in this report are
not prepared in conformity with generally accepted accounting
principles because the Company is not submitting all the
disclosures which are required by generally accepted accounting
principles.
Note 3 For more detailed information with respect to (1)
summary of significant accounting policies; (2) description of
business; (3) property and equipment and depreciation; (4)
investment, common stock of affiliate; (5) long-term debt; (6)
capital; (7) income taxes; and, (8) related party transactions,
see the notes to consolidated financial statements filed with
the Commission in the Company's annual Form 10-K for the year
ended December 31, 1995.
Note 4 The Company is not required to file Form 8-K to
report any unusual charges or credits to income during the most
recently completed quarter and the Company has not changed its
independent accountants.
-6-
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
September 30, 1996
Prior to November 30, 1994 the Company operated two nursing
facilities with 210 bed capacity. Of the 210 beds, 148 were in
Philadelphia, Pennsylvania (Northwood) and 62 beds were in
Clinton Township, New Jersey (Union Forge). The Union Forge was
sold on February 7, 1990. From February, 1990 to November 30,
1994 only the Northwood was operational. On November 30, 1994
the Northwood was sold.
The Company has been wrapping up the discontinued operating
affairs of the Northwood. The continuing operations primarily
consists of the 1995 and 1996 start up of The Pinnacle Healthcare
Group, Inc. The Company has been concentrating its efforts in
marketing and developing of this new venture. The Pinnacle
Healthcare Group, Inc. is a long term care consulting firm
dedicated to helping long term care facilities achieve regulatory
compliance by providing the highest level of quality care through
education and staff awareness.
The Company has settled in the Company's favoe the suits with
Continental Insurance Co. of New York and AIA Administrator, Donald
Wert wherein the Company received settlement moneys to end the dispute.
The Company has settled in the company's favor with Realty-Vest
Financial Corp. and finalized the action the Company filed and
Reality-Vest counterclaimed against the Company. The Company received
and an interest bearing note from Realty-Vest. There was no liability
to the Company.
-7-
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto fully authorized.
Date: November 4, 1996 _____________________________________
Diana J. Kerezsi, Corporate Secretary
Nursecare Health Centers, Inc.
-8-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000073354
<NAME> NURSECARE HEALTH CENTERS, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 221,218
<SECURITIES> 1,397,162
<RECEIVABLES> 346,072
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 433,953
<PP&E> 2,963
<DEPRECIATION> 835
<TOTAL-ASSETS> 2,166,965
<CURRENT-LIABILITIES> 677,376
<BONDS> 0
<COMMON> 55,325
0
0
<OTHER-SE> 1,434,264
<TOTAL-LIABILITY-AND-EQUITY> 2,166,965
<SALES> 0
<TOTAL-REVENUES> 149,824
<CGS> 0
<TOTAL-COSTS> 400,207
<OTHER-EXPENSES> 22,264
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,803
<INCOME-PRETAX> (143,961)
<INCOME-TAX> 0
<INCOME-CONTINUING> (229,922)
<DISCONTINUED> 366,614
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 136,692
<EPS-PRIMARY> .25
<EPS-DILUTED> 0
</TABLE>