<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Commission File Number 0-7667
NURSECARE HEALTH CENTERS, INC.
A PENNSYLVANIA CORPORATION
I.R.S. EMP. I.D. #23-1712311
THREE STATION SQUARE
PAOLI, PENNSYLVANIA 19301
Registrant's telephone number: Area Code (610) 644-4051
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
Common Stock, $.10 Par Value Per Share - Class A
Registrant 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.
Yes____X____ No__________
Registrant has been subject to such filing requirements for the
past 90 days.
Yes____X____ No___________
As of December 31, 1995, the Issuer had outstanding one class of
stock totaling 536,571 shares. The Aggregate Market Value of
the shares held by Non-Affiliated Holders (180,636) is
approximately $92,124.
<PAGE>
INFORMATION REQUIRED IN REPORT
PART I
ITEM 1. BUSINESS
Nursecare Health Centers, Inc. (the "Company") was organized
in 1969 and for most of its existence provided skilled nursing,
convalescent and rehabilitation care in the operation of two
health care facilities. Virtually all of the Company's revenue
for all years of its existence had been derived from these
services.
The two facilities, Union Forge Nursing Home, Inc. and the
Northwood Nursing and Convalescent Home, Inc. were separately
incorporated and operated as wholly-owned subsidiaries of the
Company. The Union Forge Nursing Home, Inc., located in
Hunterton County, New Jersey, was sold in 1989. The Northwood
Nursing and Convalescent Home, Inc. was sold in 1994.
In 1995, the Company formed the Pinnacle Healthcare Group,
Inc., a wholly-owned subsidiary of the Company which provides
long-term care consulting to long-term care facilities. This
includes assistance in achieving regulatory compliance and
providing the highest level of quality care through education
and staff awareness. Constant new regulations in the long-term
health care industry requires continuing education of staff and
maintaining compliance with the ever changing regulations.
ITEM 2. PROPERTIES
Company's headquarters are located in leased space of Three
Station Square, Paoli, Pennsylvania, 19301. Registrant occupies
approximately one thousand and forty-five (1,045) square feet on
the second floor of this office building, which constitutes
approximately fourteen percent (14%) of the rental space on that
floor. The Registrant's lease runs for a one (1) year term from
February 1995, to February, 1996. The annual rental for the
year ending December 31, 1995, was $12,475.
ITEM 3. LEGAL PROCEEDINGS
LICENSURE
All legal proceedings previously described in the Company's
Reports to the Commission were settled before the end of the
fiscal year ending December 31, 1995 with the exception of the
following:
<PAGE>
Nursecare Health Centers, Inc., et al. v. Realty-Vest
Financial Corp., et al., Court of Common Pleas, Philadelphia
County, June Term 1993, No. 1485. This action (the "Nursecare
Action") was brought by the Company in the Philadelphia Court of
Common Pleas for compensatory and punitive damages in excess of
$50,000 arising from the allegedly inept, dishonest and
fraudulent acts and omissions of certain former managers of a
skilled care nursing home facility previously owned by Northwood
from early 1990 through March 1993 and from certain defendants'
breach of a contract for the sale of the Northwood facility.
The Company alleges that the former managers physically damaged
the Northwood facility, failed to submit properly documented
claims for reimbursement for resident services to third-party
payers, diverted Northwood funds for unauthorized uses,
committed other acts of malfeasance that caused the Company
financial loss and otherwise failed to fulfill their obligations
under the contract for sale of the Northwood facility. The
Company has sought damages for the defendants' breach of
contract, breach of trust, breach of fiduciary duty, negligence,
fraud, negligent misrepresentation, conversion, waste of
premises, and under theories of individual liability of certain
of the organizational defendants' officers and partners by
virtue of their participation in the acts and omissions which
injured the Company and piercing the corporate veil. The
Company and the other plaintiffs also seek an award of their
attorneys' fees and costs in an unspecified amount.
The defendants have asserted counterclaims against the Company
(the "Counterclaims") and a third-party action against
Northeastern Investment Company ("Northeastern") (the parent of
Nursecare) and one of Nursecare's officers, James Hubbert, in
his individual capacity (the "Third-Party Action"). Defendants
allege in the Counterclaim that the Company, among others,
breached a contract for the sale of the Northwood facility to
them and committed various torts preventing the consummation of
the sale of the Northwood facility and interfering with their
management of the facility. In particular, the defendants
allege in the Counterclaim that the Company committed fraud and
negligently misrepresented material facts in connection with the
attempt by Realty-Vest to purchase the Northwood facility
beginning in 1989. The defendants further allege that these
actions constitute a breach of the sales contract, and that the
Company is liable to indemnify defendants for financial losses
defendants allegedly incurred as a result of the Company's
alleged actions. The defendants further allege that the
Company, among others, tortuously converted Medicaid receivables
and a reserve bank account for its own purposes. Defendants
further allege that the Company, among others, tortuously
interfered with their relationship with Northwood employees.
The defendants seek compensatory and punitive damages in excess
of $50,000 and an award of their attorneys' fees and costs in an
unspecified amount.
The Nursecare Action still is in the discovery stages. The
parties are in the process of conducting settlement
negotiations. The parties tentatively have negotiated a
settlement under which the defendants would pay the Company
$280,000 plus interest over 20 months and provide certain other
consideration under the terms of the proposed tentative
settlement. Neither the Company nor any other entity or person
named in the Counterclaim or the Third-Party Action would pay
the defendants anything under the terms of the proposed
settlement.
<PAGE>
If settlement is not reached in the near future, the Company
intends to prosecute this action vigorously. At this time,
however, we are unable to express any opinion as to the likely
outcome of this litigation.
The Company believes that all of the allegations against it
and related persons and entities in the Counterclaim and the
Third-Party Action are baseless and without merit and that the
Company and all of the other persons and entities named in the
Counterclaim and the Third-Party Actions have meritorious
defenses to all such claims. If settlement is not reached in
the near future, the Company intends to resist the Counterclaim
and, to the extent that the Third-Party Action implicates the
Company's interests, the Third-Party Action vigorously. At this
time, however, we are unable to express any opinion as to the
likely outcome of this litigation.
The Company previously tendered the defense of the
Counterclaim to two of its insurers, the Continental Insurance
Company ("Continental") and Pacific Employers Insurance Company
("Pacific Employers"). Continental has denied coverage, for
which, among other acts and omissions, the Company has brought
suit against Continental. See below. Pacific Employers has not
yet determined whether it will provide the Company with a
defense or indemnity.
Northwood Nursing and Convalescent Home, Inc. and Nursecare
Health Centers, Inc. v. The Continental Insurance Co., U.S.D.C.,
E.D. Pa., C.A. No. 94-CV-6706. This action (the "Coverage
Action") was brought by the Company against one of its insurance
companies, Continental, in the United States District Court for
the Eastern District of Pennsylvania. In this action, the
Company seeks declaratory relief and damages in excess of
$50,000. The Company alleges that Continental contracted to
defend and indemnify the Company with regard to certain of the
liabilities and losses that form the basis for their claims in
the Nursecare Action (see above). The Company has alleged that
Continental breached the insurance contract and Continental's
obligations of good faith and fair dealing in its handling of
the claims. The Company has alleged further that Continental is
liable to the Company under Pennsylvania's bad faith insurance
practices statute, under which the Company can recover punitive
damages, attorneys' fees and enhanced interest.
On or about October 24, 1995, the Court entered a summary
judgment in favor of Continental and against the Company. The
Company filed an appeal of the Court's grant for the Third
Circuit, captioned Northwood Nursing and Convalescent Home, Inc.
and Nursecare, Inc. v. The Continental Insurance Co., U.S. Court
of Appeals, 3rd Circuit, No. 95-2003 (the "Appeal").
The Company has reached a settlement with Continental under
which Continental will pay the Company $10,000 and provide
certain other consideration in exchange for the Company's
withdrawal of the Appeal. Continental and the Company have
filed a stipulation for the withdrawal of the Appeal in light of
the settlement. The stipulation awaits Court approval.
<PAGE>
Nursecare Health Centers, Inc. and Northwood Health, Inc. v.
American Insurance Administrators a/k/a "AIA" and Donald R.
Wert, individually and as President of American Insurance
Administrators, Inc., Court of Common Pleas, Philadelphia Co.,
November Term 1994, No. 2112. This action was brought by the
Company against the insurance agent ("AIA") which placed the
Company's commercial coverage with Continental and Pacific
Employers during the time period that the defendants in the
Nursecare Action (see above) managed the nursing care facility
previously owned by Northwood. The Complaint was filed in the
Court of Common Pleas of Philadelphia County. The Company
alleges that AIA and its principal, Donald Wert ("Mr. Wert"),
failed to place insurance coverage adequate to insure the
nursing home facility and negligently certified that AIA had
placed adequate insurance coverage. The Company has brought
claims against AIA and Mr. Wert for breach of contract, breach
of fiduciary duty, negligent misrepresentation, fraud,
professional negligence, and tortious interference with
contractual relations. The Company seeks damages in excess of
$50,000 and an award of its attorneys' fees and costs in an
unspecified amount.
This action is in the pleading and discovery stages. The
parties have negotiated a tentative settlement under which AIA,
Mr. Wert and their insurance carrier, Utica Mutual Insurance
Company, would pay the Company $41,250 and provide certain other
consideration in exchange for a release.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SHAREHOLDERS
A shareholders meeting took place on August 10, 1995 pursuant
to notice. The only matter to be voted upon by the shareholders
was the election of Directors for the following year. The
Directors then in office were elected by a unanimous vote.PART II
<PAGE>
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDERS MATTERS
(a) Market. There is no active market for Registrant's Common
Stock. The Company is aware that private sales between security
holders occur from time to time by way of private negotiation.
The Registrant is not involved in such transactions and the
price established is between the individuals involved. The
Company is aware that securities brokers from time to time will
negotiate sales of the Company's stock. The Company does not
participate in any such transactions, has not listed any of its
shares on any securities exchange and does not know how or what
prices are established. Otherwise, to the Company's knowledge,
no stock exchange or brokerage firm makes a market in its
securities although purchases and sales of its shares reportedly
take place from time to time. As of December 31, 1995, the
Company had 484 shareholders.
(b) Dividends. The Registrant has never paid a cash, stock or
property dividend. The Company's policy has been to reinvest
its earnings.
<PAGE>
PART II
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------------------------------
1995 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Continuing
Operations
Revenues $ 63,606 $ - $ - $ - $ - $ -
========== ========== ========== ========== ========== ==========
Discontinued
Operations
Revenues $ 452,438 $4,930,930 $5,717,131 $5,041,132 $4,685,569 $3,336,607
========== ========== ========== ========== ========== ==========
Net Loss
Continuing
Operations $ (323,830)$ - $ - $ - $ - $ -
========== ========== ========== ========== ========== ==========
Net Income (Loss)
Discontinued
Operations $ 452,438 $1,745,940 $ (347,365)$ (402,333)$ (5,223)$1,108,885
========== ========== ========== ========== ========== ==========
Net Loss Per
Share $ (.60)$ - $ - $ - $ - $ -
========== ========== ========== ========== ========== ==========
Net Income (Loss)
Per Share $ .84 $ 3.16 $ (.63) $ (.73)$ (.01)$ 2.01
========== ========== ========== ========== ========== ==========
Working Capital
(Deficiency)$ (471,363)$ 750,919 $ (846,068)$ (414,112)$ (58,841)$ (34,922)
========== ========== ========== ========== ========== ==========
Total Assets $2,338,504 $2,962,357 $4,488,607 $4,680,263 $5,001,731 $5,253,246
========== ========== ========== ========== ========== ==========
Long-term Debt:
Current
Portion $ - $ - $ 111,643 $ 125,629 $ 314,280 $ 80,000
Long-term
Portion - - 2,096,913 2,184,708 2,083,257 2,165,000
---------- ---------- ---------- ---------- ---------- ----------
Total $ - $ - $2,208,556 $2,310,337 $2,397,537 $2,245,000
========== ========== ========== ========== ========== ==========
Dividends
Paid $ - $ - $ - $ - $ - $ -
========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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, 1994 only the Northwood was operational. On November
30, 1994 the Northwood was sold.
The Company has been wrapping up the affairs of the Northwood.
There is no comparison of the revenue and income from
discontinued operations of the Northwood and continuing
operation. The continuing operations primarily exist of the
1995 start up on The Pinnacle Healthcare Group, Inc. The
Company has been concentrating its efforts in the 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.
We recognize that with the advent of new regulations, survey
format and reimbursement methodology, keeping a facility's staff
educated and up to date, while remaining in compliance, is a
challenge. Therefore, we have developed a wide range of
programs that will not only educate each facility's staff on how
to identify problem areas, but will also give them the tools and
training necessary to implement interventions which will
maintain regulatory compliance and increase the facility's
profit margin.
<PAGE>
NURSECARE HEALTH CENTERS,
INCORPORATED AND SUBSIDIARIES
YEARS ENDED
DECEMBER 31, 1995, 1994, AND 1993
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
PART II - ITEM 8. Pages
Independent Auditors' Report 10
Consolidated Financial Statements
Balance Sheets as of December 31, 1995 and 1994 11 - 12
Statements of Operations for the Years Ended
December 31, 1995, 1994, and 1993 13 - 14
Statements of Changes in Stockholders' Equity
(Deficiency) for the Years Ended
December 31, 1995, 1994, and 1993 15
Statements of Cash Flows for the Years Ended
December 31, 1995, 1994, and 1993 16 - 18
Notes to Consolidated Financial Statements 19 - 30
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Nursecare Health Centers, Incorporated and Subsidiaries
Paoli, Pennsylvania
We have audited the accompanying consolidated balance sheets of
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES as of
December 31, 1995 and 1994, and the related consolidated
statements of operations, changes in stockholders' equity
(deficiency), and cash flows for each of the three years in the
period ended December 31, 1995. These consolidated financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards 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. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of NURSECARE HEALTH CENTERS, INCORPORATED AND
SUBSIDIARIES at December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three
years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
ZELENKOFSKE, AXELROD & CO., LTD.
Jenkintown, Pennsylvania
January 24, 1996
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Current Assets
Unrestricted Cash and Cash Equivalents
(Notes 2 and 10) $ 108,205 $1,072,286
Restricted Cash - Escrow (Notes 10
and 12) 121,546 122,951
Accounts Receivable, Net of Allowance
For Doubtful Accounts (Notes 1I
and 9) 126,522 287,589
Notes Receivable, Current Portion
(Notes 10 and 11) - 975,000
Interest Receivable 34,567 3,462
Prepaid Expenses 5,176 6,147
---------- ----------
Total Current Assets 396,016 2,467,435
---------- ----------
Marketable Debt Securities (Notes 3
and 10) 1,642,097 197,712
---------- ----------
Property and Equipment, at Cost (Notes 1C
and 7)
Furniture and Equipment 131,144 126,981
Less: Accumulated Depreciation (127,373) (126,391)
---------- ----------
3,771 590
---------- ----------
Other Assets
Advances to Related Party (Note 5) 96,620 96,620
Notes Receivable, Less Current Portion
(Notes 10 and 11) 200,000 200,000
---------- ----------
296,620 296,620
---------- ----------
Total Assets $2,338,504 $2,962,357
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 1995 AND 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Current Liabilities
Accounts Payable $ 186,210 $ 487,053
Accrued Expenses and Other Liabilities
Payroll 6,007 -
Real Estate Taxes and Other Taxes 45,765 57,986
Insurance 187,048 371,965
Other 151,359 44,216
Estimated Third-party Payor Settlements
(Note 4) - 400,000
Income Taxes Payable 209,740 309,500
Deferred Taxes Payable (Note 6) 81,250 45,796
---------- ----------
Total Current Liabilities 867,379 1,716,516
---------- ----------
Commitments and Contingencies (Notes 5, 8 and 13) - -
Stockholders' Equity
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 Gains and Losses on
Marketable Securities 72,814 (32,038)
Retained Earnings 818,424 689,816
---------- ----------
1,481,946 1,248,486
Less: Treasury Stock, at Cost (1995 -
15,350; 1994 - 1,330 Shares) 10,821 2,645
---------- ----------
1,471,125 1,245,841
---------- ----------
Total Liabilities and Stockholders'
Equity $2,338,504 $2,962,357
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Revenues $ 63,606 $ - $ -
Cost of Operations
General and Administrative 494,546 - -
---------- ---------- ----------
Loss From Operations (430,940) - -
Other Income (Expenses)
Investment Income 112,258 - -
Loss on Sale of Marketable
Securities (5,148) - -
---------- ---------- ----------
107,110 - -
---------- ---------- ----------
Loss Before Provision for
Income Taxes (323,830) - -
Provision for Income Taxes
(Note 6) - - -
---------- ---------- ----------
Loss From Continuing
Operations (323,830) - -
Discontinued Operations (Notes 6 and 7):
Loss From Operations
of Nursing Facility
Disposed of - (692,399) (347,365)
Gain on Disposal of
Nursing Facility,
Net of Income Taxes
(1995 - $104,956;
1994 - $355,296;
and 1993 - $-0-) 452,438 2,438,339 -
---------- ---------- ----------
452,438 1,745,940 (347,365)
---------- ---------- ----------
Net Income (Loss) $ 128,608 $1,745,940 $ (347,365)
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Earnings (Loss) Per Share
(Note 1F)
Loss From Continuing
Operations $ (.60) $ - $ -
Loss From Discontinued
Operations - (1.25) (.63)
Gain on Disposal of
Nursing Facility .84 4.41 -
---------- ---------- ----------
Net Income (Loss) $ .24 $ 3.16 $ (.63)
========== ========== ==========
Weighted Average Number of
Common Shares Outstanding 541,484 551,921 551,921
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
<TABLE>
<CAPTION>
Common Stock Unrealized Treasury Stock
-------------- Gains and -------------
Number Additional Loss on Retained Number
of Pain-in Marketable Earnings of
Shares Amount Capital Securities (Deficit) Shares Amount
------- ------- -------- ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
Jan. 1, 1993 553,251 $55,325 $535,383 $ - $ (708,759) 1,330 $ 2,645
Net Loss
for the Year - - - - (347,365) - -
Balance,
Dec. 31, 1993 553,251 55,325 535,383 - (1,056,124) 1,330 2,645
------- ------- -------- ---------- ---------- ------ -------
Unrealized
Loss on
Investments - - - (32,038) - - -
Net Income
for the Year - - - - 1,745,940 - -
------- ------- -------- ---------- ---------- ------ -------
Balance,
Dec. 31, 1994 553,251 55,325 535,383 (32,038) 689,816 1,330 2,645
Unrealized Gain
on Investments - - - 104,852 - - -
Purchase of
Treasury Stock - - - - - 14,020 8,176
Net Income
for the Year - - - - 128,608 - -
------- ------- -------- ---------- ---------- ------ -------
Balance,
Dec. 31, 1995 553,251 $55,325 $535,383 $ 72,814 $ 818,424 15,350 $10,821
======= ======= ======== ========== ========== ====== =======
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
<TABLE>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows from Operating
Activities
Net Income (Loss) $ 128,608 $1,745,940 $ (347,365)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used in)
Operating Activities:
Depreciation and
Amortization 982 159,566 168,644
(Gain) Loss Realized on
Sale of Marketable Debt
Securities 5,148 2,382 (45,692)
Deferred Charges - 39,457 -
Allowance for Doubtful
Accounts - (600,000) 500,000
Unrealized Gain on
Marketable Securities - - (8,138)
Accounts Payable
Settlements - (460,179) -
Gain on Sale of Property
and Equipment - (2,793,635) -
Covenant Not-to-Compete - (100,000) -
Deferred Taxes 35,454 45,796 -
Interest Receivable (31,105) (3,462) -
(Increase) Decrease in Assets
Accounts Receivable 161,067 995,909 (442,425)
Estimated Third-party
Payor Settlements (400,000) 1,234,434 (632,843)
Prepaid Expenses 971 (7,323) 12,981
Increase (Decrease) in
Liabilities
Accounts Payable (300,843) (68,294) 78,807
Accrued Expenses and
Other Liabilities (83,988) (31,199) 251,570
Income Taxes Payable (99,760) 309,500 -
---------- ---------- ----------
Total Adjustments (712,074) (1,277,048) (117,096)
---------- ---------- ----------
Net Cash Provided by (Used in)
Operating Activities (583,466) 468,892 (464,461)
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows From Investing
Activities
Capital Expenditures (4,163) (33,115) (168,514)
Decrease in Escrowed Funds 1,405 73,799 -
Other Receivables - 205,437 3,074
Proceeds at Maturity of
Short-term Investments - 243,750 261,957
Purchase of Short-term
Investments - (300,099) (301,632)
Proceeds from Sale of
Marketable Debt Securities 633,552 30,493 1,041,696
Purchase of Marketable Debt
Securities (1,978,233) (34,278) (458,961)
Proceeds from Notes
Receivable 975,000 - -
Net Costs and Cash
Received From Sale of
Property and Equipment - 433,337 -
---------- ---------- ----------
Net Cash Provided by (Used
in) Investing Activities (372,439) 619,324 377,620
---------- ---------- ----------
Cash Flows from Financing
Activities
Proceeds From Borrowings - 18,038 -
Payments on Note Payable - (32,297) (27,703)
Payments on Long-term Debt - (123,906) (101,781)
Purchase of Treasury Stock (8,176) - -
Net Cash Used in Financing
Activities (8,176) (138,165) (129,484)
---------- ---------- ----------
Net Increase (Decrease) in
Unrestricted Cash and Cash
Equivalents (964,081) 950,051 (216,325)
Unrestricted Cash and Cash
Equivalents - Beginning of
Year 1,072,286 122,235 338,560
---------- ---------- ----------
Unrestricted Cash and Cash
Equivalents - End of Year $ 108,205 $1,072,286 $ 122,235
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
Supplemental Disclosure of Cash Flow Information:
<TABLE>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash Paid During the Year for:
Interest $ - $ 270,394 $ 275,455
Income Taxes $ 169,262 $ 3,550 $ 3,880
</TABLE>
Supplemental Disclosure of Noncash Investing and Financing
Activities:
On November 30, 1994, the Company sold the property and
equipment of the Northwood facility for $4,800,000 resulting in
a gain of $2,793,635 as follows:
<TABLE>
<S> <C>
Property and Equipment $ 2,006,365
Covenant Not-to-Compete 100,000
Payments on Behalf of the Company for:
Long-term Debt, Net of Assets Whose
Use is Limited (1,946,724)
Notes Receivable (1,175,000)
Amounts Held in Escrow for Payment of
Accounts Payable Settlements and for
Third-party Payor Recapture of
Depreciation (196,749)
Working Capital, Other Than Cash (1,148,190)
Gain on Sale of Property and Equipment 2,793,635
-----------
Net Cash Proceeds $ 433,337
===========
</TABLE>
Unrealized gains and losses on marketable debt securities that
are available for sale for the years ended December 31, 1995 and
1994 were $104,852, and $(32,038), respectively, and are
included as a component to stockholders' equity.
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
ORGANIZATION
Nursecare Health Centers, Incorporated and Subsidiaries (the
"Company"), was incorporated in 1969 for the purpose of owning
and operating two nursing facilities (one located in
Pennsylvania with 148 beds which was sold in 1994 and the other
in New Jersey with 62 beds which was sold in 1990). The
facilities provided nursing, convalescent and rehabilitation
care to the aged.
On November 30, 1994, the Company sold its building, furniture
and fixtures, and inventories associated with the Northwood
Nursing Facility to Complete Care Services, L.P. ("CCS") for
$4,800,000, under an installment sale agreement ("Agreement").
Additionally, all of the assets and liabilities relating to the
New Jersey facility were previously sold in February, 1990.
On March 23, 1995, Pinnacle Healthcare, Inc. was incorporated in
the state of Pennsylvania to provide consulting services to
long-term care providers. The Company is the sole stockholder.
The Company's summary of significant accounting policies is
described below:
A) Principles of Consolidation
The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries, Pinnacle
Healthcare, Inc. ("Pinnacle"), Northwood Nursing & Convalescent
Home, Inc. ("Northwood") ("the facility"), and Union Forge
Nursing Home, Inc. ("Union Forge"). The operations of Northwood
and Union Forge have been inactive since the sale of their
assets. All significant intercompany transactions and balances
have been eliminated in consolidation.
<PAGE>
NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
B) Revenues From Discontinued Operations
Revenues from the facility are recorded based on standard
charges applicable to all residents. Under Medicare, Medicaid,
and other cost-based reimbursed programs, the facility is
reimbursed for services rendered to covered program residents as
determined by reimbursement formulas. Medicaid and Medicare did
not account for any revenues in 1995. In 1994 and 1993,
Medicaid revenues accounted for approximately 88%. The
differences between facility established billing rates and the
amounts reimbursable by the programs and resident payments are
recorded as contractual allowances and deducted from revenues.
Retroactively calculated third-party contractual adjustments are
accrued on an estimated basis in the period the related services
are rendered or when such amounts are determined. Differences
between estimated contractual adjustments and subsequent audits
by third-party payors are recorded in operations in the year
such amounts are determined.
Net revenue from the Northwood facility for the years ended
December 31, 1995, 1994 and 1993 were $-0-, $4,930,930, and
$5,717,131, respectively. These amounts are included in
discontinued operations in the accompanying statement of
operations.
C) Property and Equipment
Property and equipment are recorded at cost and are depreciated
over the estimated useful lives of the related assets using the
straight-line method.
Maintenance and repairs are charged to operations when incurred.
Betterments and renewals are capitalized. When property and
equipment are sold or otherwise disposed of, the asset accounts
and related accumulated depreciation accounts are relieved, and
the gain or loss included in operations.
<PAGE>
NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
C) Property and Equipment (Continued)
The useful lives of property and equipment for purposes of
computing depreciation are:
Furniture and Equipment 5 - 12 Years
Depreciation expense was $982, $144,474, and $152,180 for the
years ended December 31, 1995, 1994 and 1993, respectively.
D) Deferred Financing Costs
Costs incurred in connection with obtaining mortgage and bond
financing costs were being deferred. Mortgage costs were being
amortized using the straight-line method over a 20-year period.
Bond costs were amortized on the basis of the amount of bonds
outstanding each year. Amortization expense for each of the
years ending December 31, 1995, 1994 and 1993 was $-0-, $15,092,
and $16,464, respectively.
Upon the sale of the facility, the bonds outstanding were
redeemed. As a result of the bond redemption, the remaining
unamortized portion of these costs, $39,457, were written off
during 1994.
E) Income Taxes
Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standard (SFAS) No. 109, "Accounting for
Income Taxes." Accordingly, the Company has changed its method
of accounting for income taxes from the deferred method used in
prior years to the liability method. Under the liability
method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax
bases of assets and liabilities and their financial reporting
amounts at each year-end based on enacted tax laws and statutory
NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
<PAGE>
E) Income Taxes (Continued)
tax rates applicable to the periods in which the differences are
expected to affect taxable income. The principal difference is
the deferral of gain on sale of property and equipment for
income tax purposes. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected
to be realized. The adoption of SFAS No. 109 had no impact on
the financial statements. Income tax expense is the tax payable
for the period and the change during the period in deferred tax
assets and liabilities.
F) Earnings (Loss) Per Share
Earnings (Loss) per share is computed on the basis of weighted
average number of common shares outstanding during the
respective periods.
G) Reclassifications
Certain items in 1994 have been reclassified to conform with the
1995 presentation.
H) Investments in Debt Securities
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standard No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." SFAS No. 115
requires certain investments to be categorized as either
trading, available-for-sale, or held-to-maturity. Investments in
the trading category are carried at fair value and unrealized
gains and losses are included in net earnings. Investments in
the available-for-sale category are carried at fair value with
unrealized gains and losses recorded as a special component of
stockholders' equity. Investments in the held-to-maturity
category are carried at amortized cost. At December 31, 1995
and 1994, the Company had no investments that
<PAGE>
NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
H) Investments in Debt Securities (Continued)
qualified as trading or held-to-maturity. In accordance with
SFAS No. 115, prior years' financial statements have not been
restated to reflect the change in accounting method. There was
no cumulative effect as a result of adopting SFAS No. 115 in
1994.
I) Allowance for Doubtful Accounts
The Company provides an allowance for doubtful accounts equal to
the estimated losses that will be incurred in the collection of
all receivables. The estimated losses are based on a review of
the current status of the existing receivables. An allowance
for doubtful accounts has not been established as the amounts
are considered immaterial.
J) Use of Estimates
The preparation of financial statements in conformity with the
accounting and reporting practices prescribed by generally
accepted accounting principles, requires management to make
estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from
those estimates.
NOTE 2: CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments purchased
with a maturity of three months or less to be cash equivalents.
<PAGE>
NOTE 3: MARKETABLE DEBT SECURITIES
Marketable debt securities available for sale are stated at fair
value at December 31, 1995 and 1994 and include the following:
<TABLE>
1995 1994
---------- ----------
<S> <C> <C>
U.S. Treasury Bonds
and Notes $1,434,794 $ 93,609
Corporate Bonds 207,303 21,392
Other - 82,711
---------- ----------
$1,642,097 $ 197,712
========== ==========
</TABLE>
The fair value of debt securities held as available-for-sale at
December 31, 1995 is as follows:
<TABLE>
Due Within Due After
One Year Ten Years
---------- ----------
<S> <C> <C>
U.S. Treasury Bonds
and Notes $ - $1,434,794
Corporate Bonds - 207,303
---------- ----------
$ - $1,642,097
========== ==========
</TABLE>
At December 31, 1995 and 1994, upon adoption of SFAS No. 115
(See Note 1H), the marketable debt securities are recorded at
fair value. Unrealized gains of $104,852 in 1995 and losses of
$32,038 in 1994 are reflected as a separate component in the
stockholders' equity section.
NOTE 4: ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS
The Company rendered services to residents under contractual
agreements with the Pennsylvania Department of Public Welfare's
Medicaid Program and federally-sponsored Medicare program.
Provisions have been made for estimated adjustments under these
agreements for years in which final determinations have been
reached.
<PAGE>
NOTE 4: ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS (CONTINUED)
Final Settlements have been reached for all cost reporting
periods filed through December 31, 1991. Estimated Medicaid and
Medicare settlement payables are comprised of amounts relating
to services provided in 1994, 1993 and 1992.
NOTE 5: RELATED PARTY TRANSACTIONS
Advances to a related party consist of the following at December
31, 1995 and 1994:
Non-interest bearing amounts due from Nursecare Health
Centers' parent company, Northeastern Investment Company, Inc.
("Northeastern") with no specific repayment terms. Northeastern
owns 56% of the Company's outstanding common stock.
1995 1994
------- -------
$96,620 $96,620
The Company leases office space from Northeastern, for which
rental expenses of $13,951, $12,140, and $12,142 were incurred
during 1995, 1994, and 1993, respectively.
For the year ended December 31, 1994, the Company incurred fees
totaling $134,175 for accounting services provided by an
accounting firm for which an officer of the Company is a partner.
NOTE 6: INCOME TAXES
The provision for income taxes consists of the following for
December 31, 1995, 1994, and 1993 which are included in
discontinued operations in the accompanying statement of
operations:
<PAGE>
NOTE 6: INCOME TAXES (CONTINUED)
<TABLE>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Current
Federal $ 69,502 $ 659,600 $ -
State - 264,500 -
Deferred
Federal 21,454 (65,765) -
State 14,000 (45,773) -
Change in Valuation Allowance - (457,266) -
---------- ---------- ----------
$ 104,956 $ 355,296 $ -
========== ========== ==========
</TABLE>
A reconciliation of income tax at the statutory rate to the
Company's effective rate is as follows:
<TABLE>
1995 1994
---- ----
<S> <C> <C>
Computed at the Expected
Statutory Rate 34% 34%
Nondeductible Expenses 1 -
Surtax Exemption (2) -
Change in Valuation Allowance 6 -
Utilization of Net Operating
Loss Carryforward - (25)
State Income Tax - Net of
Federal Tax Benefit - 8
---- ----
39% 17%
==== ====
</TABLE>
The Company has available at December 31, 1995, net operating
loss carryforwards of $57,200 for federal tax purposes and
$2,091,658 for state tax purposes expiring in various years
through 2008 and 1997, respectively.
<PAGE>
NOTE 6: INCOME TAXES (CONTINUED)
The deferred tax assets and deferred tax liabilities recorded on
the balance sheet as of December 31 are as follows:
<TABLE>
1995 1994
---------- ----------
<S> <C> <C>
Deferred Tax Assets
Tax Loss Carryforwards:
Federal $ 19,500 $ 103,360
State 209,000 50,000
Alternative Minimum Tax
Credits - 45,000
---------- ----------
228,500 198,360
Valuation Allowance (228,500) -
---------- ----------
- 198,360
Deferred Tax Liability
Gain on Sale of Property
and Equipment 81,250) (244,156)
---------- ----------
Deferred Tax Liability, Net $ (81,250) $ (45,796)
========== ==========
</TABLE>
NOTE 7: DISCONTINUED NURSING FACILITY OPERATIONS
During 1988, the Commonwealth of Pennsylvania, Department of
Health would not license Northwood to operate under the
management of the officers of Nursecare Health Centers,
Incorporated. As a result of this, the Company was required to
pursue the sale of the Northwood facility. All nursing facility
operations were to have been discontinued upon either the sale
or the entering into an agreement of sale of the facilities.
In October, 1989, the Company entered into an agreement to sell
100% of the stock of Northwood to Realty-Vest for $400,000 of
which $350,000 was pledged as collateral for the buyer's
financing (for a period not to exceed five (5) years from
settlement). Realty-Vest
<PAGE>
NOTE 7: DISCONTINUED NURSING FACILITY
OPERATIONS (CONTINUED)
was to assume the obligations under the "PAID" bonds and cause
removal of the Company as guarantor. Additionally, the buyer was
to assume net liabilities at an amount not less than $900,000.
Any net liabilities not assumed by the buyer were to either
directly or indirectly be the responsibility of the Company.
In April of 1993, the Company terminated the agreement of sale
with Realty-Vest. A director and two officers of Nursecare
Health Centers, Incorporated were reinstated to manage the
Northwood facility.
On August 12, 1994, the Company entered into an asset purchase
agreement with Northwood Retirement Community, Inc. (NRCI), an
unaffiliated, Pennsylvania, nonprofit corporation. Under the
agreement, the Company sold the land, building, furniture and
fixtures, with a carrying amount of $2,006,365 associated with
the Northwood nursing facility to NRCI for approximately
$4,800,000. On October 21, 1994, NRCI assigned to CCS all
rights, title and interest of the asset purchase agreement and
on November 30, 1994, the facility was sold to CCS. The Company
received two notes, a $975,000 non-interest bearing demand note
and a $200,000, 5-year 9% interest bearing note and the
remainder of the purchase price in cash. In addition, the
Company agreed to enter into a 3-year, noncompete agreement in
conjunction with the sale (see Note 13).
NOTE 8: CONTINGENCY
The Company has filed an action against a former management
company, Realty-Vest for improper billing practices and
mismanagement of the Facility for the period October, 1989
through March, 1993. No determination can be made at this time
regarding this litigation.
<PAGE>
NOTE 9: CONCENTRATION OF CREDIT RISK
The Company is located in Southeastern, Pennsylvania and grants
credit without collateral to its customers, most of whom are
local. See Note 2 regarding other disclosure of credit risk.
NOTE 10: FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company
in estimating the fair values of its financial instruments.
Cash and cash equivalents: The carrying amounts reported in the
balance sheets approximate their fair value.
Notes receivable: The carrying amounts reported in the balance
sheets approximates their fair value.
Marketable Debt Securities: These assets consist of U.S.
Treasury Bonds and Notes, corporate bonds and mutual funds, and
are reflected at their current traded value.
<TABLE>
1995 1994
---------------------- ----------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash and Cash
Equivalents $ 229,751 $ 229,751 $1,195,237 $1,195,237
Notes Receivable 200,000 200,000 1,175,000 1,175,000
Marketable Debt
Securities 1,642,097 1,642,097 197,712 197,712
</TABLE>
NOTE 11: NOTES RECEIVABLE
The Company had outstanding two notes receivable with CCS at
December 31, 1994 which were entered into in connection with the
sale of the facility in November, 1994. Repayment of the first
note was received by the Company in January, 1995 in the amount
of $975,000.
The second note, a $200,000 subordinated note receivable with
CCS is receivable in quarterly installments of interest only at
9% with the principal payment due on November 30, 1999.
<PAGE>
NOTE 12: RESTRICTED CASH - ESCROW
At December 31, 1995, $121,546 is held in an escrow cash account
for the purpose of third-party payor recaptures of depreciation.
NOTE 13: NONCOMPETE AGREEMENT
In accordance with the terms of the asset purchase agreement
between the Company and NRCI dated August 12, 1994, the Company
received as part of the proceeds of the sale, $100,000 for a
noncompete agreement. The terms of the noncompete agreement are
that the Company cannot enter into an agreement to purchase a
nursing facility or be the sole manager of a nursing facility in
a twenty-mile radius of the Northwood facility prior to November
30, 1997.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company's accountants, Zelenkofske
& Axelrod & Co., Ltd., certified public accountants. During
1995 there was no change in the Company's accountants nor were
there any disagreements with the accountants on accounting and
financial disclosure.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company has five (5) members of its
Board of Directors who are listed below including Executive
Offices held by each, if any. As noted in the table below, four
(4) members of the Board have been serving in the capacity for
twenty-three (23) years.
Principal Director Shares Percent
Officer Name Occupation Since Age Nursecare of Class
- --------------------- -------------------- ----- --- --------- --------
James F. Hubbert President 1969 57 5,000 .9%
Nursecare Health
Centers, Inc.
Frank H. Slattery CPA 1971 56 5,000 .9%
Colucci & Slattery, P.C.
Horsham, PA
Secretary-Treasurer of
Nursecare Health Centers,
Inc. Since 1981
(and Treasurer Since 1979)
Harry Wolfington Half-A-Car, Inc. 1971 58 5,000 .9%
308 Lancaster Avenue
Wynnwood, PA
Joseph Zoll President,. Co-Owner 1971 56 40,935 7.42%
Associates For Research,
Testing and Certifying
Children and Adults
Ascertaining Learning Potential
of Disability Also, Marketing
and Analysis Survey Firm
F. Joseph Loeper, Jr. Pennsylvania 1990 52 -0- -0-
State Senator
Majority Leader
Pennsylvania Senate
<PAGE>
ITEM 11. REMUNERATION OF MANAGEMENT
Nursecare Health Centers, Inc.. does not
have any retirement benefits for its Officers or Directors. The
table following indicated the aggregate cash and cash equivalent
form of remuneration including salaries, Director fees,
commissions and bonuses of all Officers of the Company in excess
of Fifty Thousand Dollars ($50,000.00) each and all Officers and
Directors of the Company as a group.
<TABLE>
<CAPTION>
Name of Individual Capacity in Cash and Cash Equivalent
or Persons as a Group Which Served Forms of Remuneration
- --------------------- ------------ ---------------------------------------
Salaries, Director Securities or
fees, commissions property insurance
and bonuses benefits or
reimbursement,
personal benefits
<S> <C> <C> <C>
James F. Hubbert President $ 159,961 $ 20,626
All Officers an
Directors as a Group $ 296,037 $ 26,478
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The first table following sets forth the
names as of December 31, 1995, of persons owning of record,
directly, indirectly or beneficially more than five percent (5%)
of Nursecare Health Centers, Inc. Common Stock.
<TABLE> TABLE - 1
<CAPTION>
Title of Name and Address of Amount and Nature of Percent of
Class Beneficial Owner Beneficial Ownership Class
- ------- --------------------- -------------------- ----------
<S> <C> <C> <C>
Common Northeastern Investment Of Record andBeneficially: 54%
Stock Company Inc. 300,000 Shares
Class A 3 Station Square
Paoli, PA
Common Joseph C. Zoll 40,935 Shares 7.42 %
Stock 2240 Deerfield
Class A Media, PA
</TABLE>
<PAGE>
The second table following sets forth the amount of stock
owned of record, beneficially, directly or indirectly, by the Directors
and Officers of Nursecare Health Centers, Inc., as a group and
individually as appropriate of Northeastern Investment Company,
Inc. As of December 31, 1995, Northeastern Investment Company,
Inc. had one (1) class of Common Stock outstanding and the total
amount issued was one hundred seventy-three thousand five
hundred seventy-six (173,576) shares.
Title of Class Amount of Beneficially Owned Percent of Class
- -------------- ---------------------------- ----------------
Common Stock* 152,005 87.57 Percent
*James F. Hubbert, President of Nursecare Health Centers, Inc.
and Chairman of its Board of Directors, owns 140,000 shares of
the above amount. This represents 80.66 percent of the
outstanding shares. Northeastern Investment Company, Inc. has
authorized Mr. Hubbert to vote its shares of Nursecare Health
Centers, Inc., at the Annual Meeting.
ITEM 13. CERTAIN RELATIONS AND RELATED TRANSACTIONS
Frank H. Slattery, a director of the
Company and a partner in a certified public accounting firm
provided some accounting services for the Company during 1995.
During the period covered in this report he had a 50% equity
interest in the CPA firm.
ITEM 14. EXHIBITS
Previously submitted Exhibits are
incorporated herein by reference. They include the Articles of
Incorporation of the Company, its bylaws, financial statements
and material agreements concerning the sale of the Company's two
nursing homes.
<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 of be signed on its behalf by the undersigned
therefore duly authorized.
NURSECARE HEALTH CENTERS, INC.
Dated: March 27, 1996 /s/James F. Hubbert
President and Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant an in the capacities and on the
dates indicated.
Dated: March 27, 1996 /s/James F. Hubbert
President and Chairman of the Board
(Principal Executive Officer)
Dated: March 27, 1996 /s/Frank H. Slattery
Secretary, Treasurer and Director
Dated: March 27, 1996 /s/Harry Wolfington
Director
Dated: March 27, 1996 /s/Joseph Zoll
Director
Dated: March 27, 1996 /s/F. Joseph Loeper, Jr.
Director
<PAGE>
FOOTNOTES
1. Mr. Hubbert is also the President and Chairman of the Board
of Northeastern Investment Company, Inc. and by reason thereof
is beneficial owner of the shares held by Northeastern
Investment company, Inc. (See ITEM 12.)
2. 5,000 of the shares owned by Mr. Zoll and all shares owned
by the other Directors were acquired pursuant to stock options
exercised in January, 1987. No other stock options exist.
3. Mr. Hubbert and Mr. Slattery are first cousins.
4. The total percentage of shares owned by the Directors as a
group of all outstanding shares of the Company is 10.4%. .
5. The Company maintains life and health insurance for its
Officers, as well as, a ,medical and dental protection plan for
its President. The President also has use of the Company
automobile. The Company reimburses its President for travel
relating to Company business. Indirect remuneration includes
all payments on account of these benefits.
6. The Board of Directors met on eight (8) occasions in 1995.
Of the figure included above, $44,000 was paid to Directors for
meetings attended. $51,201 was paid to Colucci &
Slattery, P.C. for accounting services. The Company's Assistant
Secretary, Treasurer and Board Member Frank H. Slattery is a 50%
partner in the firm.
</PAGE>
