<PAGE>
PART I. - FINANCIAL INFORMATION
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1997 1996
-------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 784,086 $ 723,569
Accounts receivable and
third party settlement - 165,545
Prepaid expenses 23,755 901
Property held for sale - 613,198
--------------- ----------------
Total current assets 807,841 1,503,213
--------------- ----------------
Restricted escrows and other deposits - 46,979
--------------- ----------------
Total other assets - 46,979
--------------- ----------------
$ 807,841 $ 1,550,192
=============== ================
LIABILITIES AND PARTNERS' DEFICIT
Current liabilities:
Current maturities of long-term
obligations including debt in default $ - $ 1,656,836
Trade accounts payable 11,637 156,163
Accrued compensation - 103,960
Insurance payable - 58,062
Accrued interest - 17,916
Accrued real estate taxes - 29,455
-------------- --------------
Total current liabilities 11,637 2,022,392
Partners' equity (deficit):
Limited partners 1,428,706 211,038
General partners (632,502) (683,238)
--------------- ----------------
Total partners' equity 796,204 (472,200)
--------------- ----------------
$ 807,841 $ 1,550,192
=============== ================
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Operating revenues $ 316,295 $ 992,651 $ 1,992,480 $ 2,718,399
Interest income 6,527 5,833 19,074 15,457
------------- ------------- ------------- --------------
Total revenues 322,822 998,484 2,011,554 2,733,856
------------- ------------- ------------- --------------
Expenses:
Operating expenses 302,909 810,664 1,806,994 2,323,064
Interest 13,098 39,515 120,522 123,750
Depreciation and amortization 13,027 39,081 91,190 152,175
Partnership administration
costs 15,273 14,562 104,849 147,074
------------- ------------- ------------- --------------
Total expenses 344,307 903,822 2,123,555 2,746,063
------------- ------------- ------------- --------------
Income (Loss) before gain (21,485) 94,662 (112,001) (12,207)
Gain on sale of
properties (Note 5) 1,380,405 - 1,380,405 -
------------- ------------- ------------- --------------
Net income (loss) $ 1,358,920 $ 94,662 $ 1,268,404 $ (12,207)
============= ============= ============= ==============
Net income(loss) per L.P. unit
before property gain $ (0.78) 3.46 (4.09) (0.45)
Gain on properties
per L.P unit 52.00 - 52.00 -
Net income(loss) per L.P. unit 49.64 3.46 46.33 (0.45)
============= ============= ============= ==============
L.P. units outstanding 26,283 26,283 26,283 26,283
============= ============= ============= ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September 30,
1997 1996
------------- ---------------
Operating Activities:
Cash received from residents
and government agencies $ 2,158,025 $ 2,761,487
Cash paid to suppliers and employees (2,270,700) (2,540,907)
Cash paid to restricted escrows 46,979 6,037
Interest received 19,074 15,457
Interest paid (138,438) (113,890)
------------- ---------------
Cash provided by (used in) operating activities (185,060) 128,184
------------- ---------------
Investing Activities:
Additions to property and equipment
held for sale (121,278) (30,745)
Proceeds from sale of properties 2,023,691 -
--------------- -------------
Cash provided by (used in) investing activites 1,902,413 (30,745)
------------- ---------------
Financing Activities:
Principal payments on long-term obligations (1,656,836) (70,204)
------------- ---------------
Cash (used in) financing activities (1,656,836) (70,204)
------------- ---------------
Net increase (decrease) in cash
and cash equivalents 60,517 27,235
Cash and cash equivalents, beginning of period 723,569 628,543
------------- ---------------
Cash and cash equivalents, end of period $ 784,086 $ 655,778
============= ===============
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September 30,
1997 1996
--------------- ---------------
Reconciliation of Net Loss
to Cash (Used in) Operating
Activities:
Net income (loss) $ 1,268,404 $ (12,207)
Adjustments to reconcile net (loss)
to cash (used in) operating
activities:
Depreciation and amortization 91,190 152,175
Gain on sale of properties (1,380,405) -
Changes in assets and liabilities:
Accounts receivable 165,545 43,088
Other assets (22,854) (59,833)
Restricted escrow and other deposits 46,979 6,037
Trade accounts payable and
accrued liabilities (353,919) (1,076)
--------------- ---------------
Cash provided by (used in)
operating activities $ (185,060) $ 128,184
=============== ===============
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
Total
Partners'
General Limited Deficit
--------------- ----------------- ---------------
Balance, at December 31, 1995 $ (673,996) $ 432,856 $ (241,140)
Net loss (488) (11,719) (12,207)
-------------- ----------------- ---------------
Balance, at September 30, 1996 $ (674,484) $ 421,137 $ (253,347)
============== ================= ===============
Balance, at December 31, 1996 $ (683,238) $ 211,038 $ (472,200)
Net income 50,736 1,217,668 1,268,404
-------------- ----------------- ---------------
Balance, at September 30, 1997 $ (632,502) $ 1,428,706 $ 796,204
============== ================= ===============
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
NOTE 1.
The consolidated financial statements are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management necessary for a fair presentation of the financial
position and operating results for the interim periods. The results of
operations for the nine months ended September 30, 1997, are not necessarily
indicative of the results to be expected for the year ending December 31, 1997.
NOTE 2.
The consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto contained in the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1996,
as filed with the Securities and Exchange Commission, a copy of which is
available upon request by writing to WelCare Service Corporation-IV (the
"Managing General Partner"), at 400 Perimeter Center Terrace, Suite 650,
Atlanta, Georgia, 30346.
NOTE 3.
A summary of compensation paid to or accrued for the benefit of the
Partnership's general partners and their affiliates and amounts reimbursed for
costs incurred by these parties on the behalf of the Partnership are as follows:
Nine Months Ended
September 30,
1997 1996
Charged to costs and expenses:
Property management and oversight
management fees $ 113,860 $ 162,928
Financial accounting, data processing,
tax reporting, legal and compliance,
investor relations and supervision
of outside services $ 29,125 $ 45,116
NOTE 4:
Effective July 31,1997, the Partnership closed the sale of its two
remaining skilled nursing facilities Heritage Manor of Emporia ("Emporia") and
Hoisington Rehabilitation Center ("Hoisington") effective July 31, 1997. The
total sales price for both facilities net of required repairs was $2,050,000.
Proceeds from the sale were used to satisfy approximately $1,640,000 in mortgage
debt obligations secured by the facilities. The Partnership received net
proceeds of approximately $380,000 following the satisfaction of the debt and
payment of sales expenses and property taxes. The Partnership recognized a gain
on sale of approximately $1,380,000 during the third quarter of 1997.
Prior to their repayment, the Partnership's two mortgage debt obligations
secured by Emporia and Hoisington were in default since these obligations
matured on April 1, 1996. The Partnership obtained an extension from the lender
to allow for the sale of the facilities. In consideration for the extension, the
Partnership paid the lender $50,000 on January 31, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements contained in this Management Discussion and Analysis are
not based on historical facts, but are forward-looking statements that are based
upon numerous assumptions about future conditions that may ultimately prove to
be inaccurate. Actual events and results may materially differ from anticipated
results described in such statements. The Partnership's ability to achieve such
results is subject to certain risks and uncertainties. Such risks and
uncertainties include, but are not limited to, changes in healthcare
reimbursement systems and rates, the availability of prospective purchasers for
its facilities, and other factors affecting the Partnership's business that may
be beyond its control.
At September 30, 1997, the Partnership had three general partners (the
"General Partners"), WelCare Consolidated Resources Corporation of America, a
Nevada corporation, serving as the corporate general partner ("WCRCA" or the
"Corporate General Partner"), Consolidated Associates IV, and WelCare Service
Corporation-IV ("WSC-IV" or the "Managing General Partner"), a Georgia
Corporation, serving as managing general partner.
Plan of Operations
A majority in interest of the Partnership's Limited Partners approved a
proposal, on October 18, 1994, which provides for the sale of all of the
Partnership's remaining assets and the eventual dissolution of the Partnership,
as outlined in a proxy statement dated September 28, 1994. Under the approved
proposal, the Limited Partners consented for the Managing General Partner to
attempt to sell or otherwise dispose of its remaining properties. Upon the
disposition of all of its assets, the approved proposal requires that the
Managing General Partner dissolve the Partnership.
As discussed in Item 1, Note 4, the Partnership sold its two remaining
facilities and satisfied the underlying mortgage debt obligations on July 31,
1997. On October 1, 1997, the Partnership distributed $450,000 in a final
distribution to its Limited Partners. The Managing General Partner currently
anticipates the Partnership will be dissolved following issuance of final tax
statements to the partners during the first quarter of 1998.
At December 31, 1996, the Partnership held available for sale all of its
nursing home facilities. Accordingly, the Partnership has classified the
facilities as Property held for sale in the accompanying balance sheet.
Results of Operations
Revenues:
Operating revenue decreased by $676,356 for the quarter ended September 30,
1997, compared to the same period in the prior year. This significant decrease
was caused primarily by the sale of the Partnership's two remaining nursing
facilities on July 31, 1997. Due to the sale, only one month's operating results
were included in the third quarter of the current year, as compared to three
month's of operating results for the same period in the prior year.
Expenses:
Operating expenses decreased by $507,755 for the quarter ended September
30, 1997, as compared to the same period in the prior year. This significant
decrease was caused primarily by the sale of the Partnership's two remaining
nursing facilities on July 31, 1997. Due to the sale, only one month's operating
results were included in the third quarter of the current year, as compared to
three month's of operating results for the same period in the prior year.
Liquidity and Capital Resources
At September 30, 1997, the Partnership held cash and cash equivalents of
$784,086 an increase of $60,517 from the amount held at December 31, 1996. The
cash balance is being held in reserve to satisfy anticipated partnership
expenses to be incurred prior to dissolving the Partnership.
On October 1, 1997, the Partnership distributed $450,000 to the Limited
Partners representing a final distribution.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
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 duly authorized.
CONSOLIDATED RESOURCES HEALTH CARE FUND IV
By: WELCARE SERVICE CORPORATION - IV
Managing General Partner
Date: November 14, 1997 By: /s/ J. Stephen Eaton
- --------------------- -------------------------
J.Stephen Eaton,
President
Date: November 14, 1997 By: /s/ Alan C. Dahl
- --------------------- -------------------------
Alan C.Dahl,
Chief Financial Officer
of the Corporate
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS UNAUDITED SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE SEPTEMBER 30, 1997 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 784,086
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 807,841
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 807,841
<CURRENT-LIABILITIES> 11,637
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 796,204
<TOTAL-LIABILITY-AND-EQUITY> 807,841
<SALES> 316,295
<TOTAL-REVENUES> 322,822
<CGS> 331,209
<TOTAL-COSTS> 344,307
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,098
<INCOME-PRETAX> 1,358,920
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,358,920
<EPS-PRIMARY> 49.64
<EPS-DILUTED> 49.64
</TABLE>
