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<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 June 30, 1997
-------------
Commission File Number 0-7667
------
NURSECARE HEALTH CENTERS, INCORPORATED
--------------------------------------
PENNSYLVANIA 23-1712311
------------ ----------
(State of Incorporation Or Organization) (I. R. S. Employer
Identification No.)
Three Station Square, Suite 205, 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 June 30, 1997
Common Stock, $.10 par value 536,571 shares
(See note 5)
Page 1
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Unaudited
ASSETS
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
---- ----
<S> <C> <C>
Current Assets:
Unrestricted Cash and Cash Equivalents $ 61,212 $ 162,957
Accounts Receivable, Net of Allowance
for Doubtful Accounts (1997 $-0-; 1996 $-0-) 1,778 --
Interest Receivable 7,164 15,429
Prepaid Expenses 3,084 3,905
----------- -----------
Total Current Assets 73,238 182,291
----------- -----------
Marketable Debt Securities 1,421,138 1,455,873
----------- -----------
Property and Equipment, at Cost
Furniture and Equipment 53,851 53,851
Less: Accumulated Depreciation (51,750) (51,193)
----------- -----------
2,101 2,658
----------- -----------
Other Assets
Advances to Related Party 96,620 96,620
Notes Receivable, Less Current Portion 200,000 200,000
----------- -----------
296,620 296,620
----------- -----------
Total Assets $ 1,793,097 $ 1,937,442
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Page 2
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
---------- ----------
<S> <C> <C>
Current Liabilities:
Accounts Payable $ 178,260 $ 177,160
Accrued Expenses and Other Liabilities
Taxes 41,792 41,792
Insurance 187,048 187,048
Other 19,197 35,288
Income Taxes Payable 127,817 127,108
Deferred Taxes Payable 81,250 81,250
---------- ----------
Total Current Liabilities 635,364 649,646
---------- ----------
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 (Losses) on Marketable Securities (85,067) (76,563)
Retained Earnings 662,913 784,472
---------- ----------
1,168,554 1,298,617
Less: Treasury Stock, at Cost (1997 & 1996 -
16,680 Shares) (10,821) (10,821)
---------- ----------
1,157,733 1,287,796
---------- ----------
Total Liabilities and Stockholders' Equity $1,793,097 $1,937,442
========== ==========
</TABLE>
See accompanying notes to financial statements.
Page 3
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS
Unaudited
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
---------------------------- ---------------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 5,900 $ 18,011 $ 1,860 $ 178
---------- --------- --------- ---------
Cost of Operations -- -- -- --
General and Administrative Expenses 222,439 276,456 98,892 117,227
Provision for Uncollectible Amounts -- -- -- --
---------- --------- --------- ---------
222,439 276,456 98,892 117,227
---------- --------- --------- ---------
Income (Loss) From Operations (216,539) (258,445) (97,032) (117,049)
---------- --------- --------- ---------
Other Income (Expenses)
Interest Expense -- (1,803) -- (1,803)
Interest Income 92,240 97,096 51,243 77,536
Gain (Loss) Realized on Sale of
Marketable Debt Securities (37,735) 19,191 (35,989) 4,475
---------- --------- --------- ---------
54,505 114,484 15,254 80,208
---------- --------- --------- ---------
Income (Loss) Before Provision for Income
Taxes (162,034) (143,961) (81,778) (36,841)
Provision for Income Taxes -- -- -- --
---------- --------- --------- ---------
Net Income (Loss) From Continuing Operations (162,034) (143,961) (81,778) (36,841)
Discontinued Operations 40,475 201,096 34,397 216,707
---------- --------- --------- ---------
Net Income (Loss) (121,559) 57,135 $ (47,381) $ 179,866
========= =========
Retained Earnings, Beginning of Year 784,472 818,424
---------- ---------
Retained Earnings at End of Quarter $ 662,913 $ 875,559
========= =========
Earnings (Loss) Per Share $ (.23) $ .11
========= =========
Weighted Average Number of Common Shares
Outstanding 536,571 536,571
========= =========
</TABLE>
See accompanying notes to financial statements.
Page 4
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------------------
June 30 June 30
1997 1996
---- ----
<S> <C> <C>
Cash Flows from Operating Activities
Net Loss $(121,559) $ 57,135
--------- ---------
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
(Used in) Discontinued Operating
Activities:
Depreciation and Amortization 557 557
(Gain) Loss Realized on Sale of
Marketable Debt Securities 37,735 (19,191)
(Increase) Decrease in Assets:
Accounts Receivable (1,778) 117,663
Interest Receivable 8,265 (48,144)
Prepaid Expenses 821 (1,588)
Increase (Decrease) in Liabilities:
Accounts Payable 1,100 (4,475)
Accrued Expenses (16,091) (58,183)
Income Taxes Payable 709 (96,582)
--------- ---------
Total Adjustments 31,318 (109,943)
--------- ---------
Net Cash Provided by (Used in) Operating Activities (90,241) (52,808)
--------- ---------
Cash Flows from Investing Activities:
Net Change in Investments (18,991)
Unrealized Loss on Investments (8,504) --
Increase in Escrowed Funds -- (3,836)
Other Receivables -- (152,890)
Purchase of Marketable Securities (492,706) (511,617)
Proceeds from Sale of Marketable Debt Securities 508,697 669,738
--------- ---------
Net Cash Provided by (Used in) Investing Activities (11,504) 1,395
Net Cash (Used in) Financing Activities -- --
--------- ---------
Net Increase (Decrease) in Unrestricted Cash and Equivalents (101,745) (51,413)
Unrestricted Cash and Cash Equivalents - Beginning of Year 162,957 108,205
--------- ---------
Unrestricted Cash and Equivalents - End of Quarter $ 61,212 $ 56,792
========= =========
</TABLE>
See accompanying notes to financial statements.
Page 5
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
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, 1996.
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) nature of
organization and summary of significant accounting policies; (2)
marketable debt securities; (3) related party transactions; (4) income
taxes; (5) discontinued nursing facility operations; (6) note
receivable; (7) non compete agreement; (8) fair values of financial
instruments, 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, 1996.
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.
Note 5 The Company offerred to purchase up to 100,000 common shares at
$3.00 per share. This was completed in July of 1997.
See accompanying notes to financial statements.
Page 6
<PAGE>
NURSECARE HEALTH CENTERS, INCORPORATED AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
June 30, 1997
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 exist of the 1996 and 1997 start
up on 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.
In addition, the Company is investigating other investment opportunities.
See accompanying notes to financial statements.
Page 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: August 11, 1997 /s/ James F. Hubbert, President
-------------------------------------
James F. Hubbert, President
Nursecare Health Centers, Inc.
Page 8
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