UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(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, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14436
CONSOLIDATED RESOURCES HEALTH CARE FUND V
(Exact name of registrant as specified in its charter)
Georgia 58-1618135
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) (identification No.)
7000 Central Parkway, Suite 970, Atlanta, Georgia 30328
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 404-698-9040
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, and (2) has been
subject to such filing requirements for the past 90 days.
Yes x No
THERE ARE NO EXHIBITS
PAGE ONE OF 10 PAGES.
PART I. - FINANCIAL INFORMATION
CONSOLIDATED RESOURCES HEALTH CARE FUND V
CONSOLIDATED BALANCE SHEETS
March 31 December 31,
1995 1994
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 379,018 $ 716,188
Accounts receivable, net of allowance
for doubtful accounts of $168,133 1,102,933 1,199,849
Prepaid expenses 216,946 357,152
Property held for sale (Notes 5 and 7) 8,733,456 10,267,062
Total current assets 10,432,353 12,540,251
Other:
Deferred loan costs, net of accumulated
amortization of $110,613 and $94,253 20,269 23,540
Total other assets 20,269 23,540
$ 10,452,622 $ 12,563,791
LIABILITIES AND PARTNERS' DEFICIT
Current liabilities:
Current maturities of long-term debt,
including debt in default of $3,624,314
and $3,491,885 (Note 8) $ 8,574,545 $ 9,982,997
Trade accounts payable 177,390 372,530
Insurance payable 78,958 98,462
Medicaid settlement payable (Note 6) 258,969 258,969
Accrued interest (Note 7) 3,382,296 4,480,481
Accrued real estate taxes 278,944 487,613
Other liabilities 247,837 293,149
Total current liabilities 12,998,939 15,974,201
Advances from former affiliates (Note 10) - 4,348,983
Deferred gain on installment sale 278,166 278,166
Total liabilities 13,277,105 20,601,350
Partners' deficit:
Limited partners (1,962,895) (6,998,320)
General partners (861,588) (1,039,239)
Total partners' deficit (2,824,483) (8,037,559)
$ 10,452,622 $ 12,563,791
See accompanying notes to consolidated financial statements. 2
CONSOLIDATED RESOURCES HEALTH CARE FUND V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended March 31,
1995 1994
Revenues:
Operating revenue $ 2,476,195 $2,263,227
Interest income 22,009 19,838
Total revenues 2,498,204 2,283,065
Expenses:
Operating expenses 2,392,092 2,423,434
Interest 156,767 154,715
Depreciation and amortization 93,656 100,275
Partnership administration costs 20,677 19,553
Total expenses 2,663,192 2,697,977
Operating loss (164,988) (414,912)
Loss on transfer of property (Note 7) (1,465,761) -
Litigation settlement income (Note 10) - 32,354
Loss before extraordinary gains (1,630,749) (382,558)
Extraordinary gain on extinguishment
of debt (Note 7) 2,494,842 -
Extraordinary gain on settlement
of advances (Note 10) 4,348,983 -
Net income (loss) $ 5,213,076 $ (382,558)
Net income (loss) per L.P. unit
Loss before extraordinary gain $ (54.38) $ (12.41)
Extraordinary gain on extinguishment
of debt 83.45 -
Extraordinary gain on settlement
of advances 141.07 -
Net income (loss) per L.P. unit $ 170.14 $ (12.41)
L.P. units outstanding 29,596 29,596
See accompanying notes to consolidated financial statements. 3
CONSOLIDATED RESOURCES HEALTH CARE FUND V
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
Total
Partners'
General Limited Deficit
Balance, at December 31, 1993 $ (966,115) $(5,243,348) $(6,209,463)
Net loss (15,302) (367,256) (382,558)
Balance, at March 31, 1994 $ (981,417) $(5,610,604) $(6,592,021)
Balance, at December 31, 1994 $(1,039,239) $(6,998,320) $(8,037,559)
Net income 177,651 5,035,425 5,213,076
Balance, at March 31, 1995 $ (861,588) $(1,962,895) $(2,824,483)
See accompanying notes to consolidated financial statements 4
CONSOLIDATED RESOURCES HEALTH CARE FUND V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
1995 1994
Operating Activities:
Cash received from residents and
government agencies $ 2,573,111 $ 2,146,596
Cash paid to suppliers and employees (2,471,338) (2,288,049)
Interest received 22,009 19,838
Interest paid (142,539) (130,029)
Property taxes paid (269,850) (218,110)
Cash used in operating activities (288,607) (469,754)
Investing Activities:
Additions to property and equipment (22,540) (6,525)
Cash used in investing activities (22,540) (6,525)
Financing Activities:
Principal payments on long-term debt (26,023) (31,010)
Cash used in financing activities (26,023) (31,010)
Net decrease in cash and cash equivalents (337,170) (507,380)
Cash and cash equivalents, beginning of period 716,188 1,164,637
Cash and cash equivalents, end of period $ 379,018 $ 657,257
See accompanying notes to consolidated financial statements. 5
CONSOLIDATED RESOURCES HEALTH CARE FUND V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
1995 1994
Reconciliation of Net Income (Loss) to Cash
Used in Operating Activities:
Net income (loss) $ 5,213,076 $ (382,558)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation and amortization 93,656 100,275
Loss on transfer of property 1,465,761 -
Gain on extinguishment of debt (2,494,842) -
Gain on settlement of advances (4,348,983)
Changes in operating assets and liabilities:
Accounts receivable 96,916 (148,985)
Other current assets 140,206 35,962
Trade accounts payable and other
current liabilities (454,397) (74,448)
Cash used in operating activities $ (288,607) $ (469,754)
See accompanying notes to consolidated financial statements. 6
CONSOLIDATED RESOURCES HEALTH CARE FUND V
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
NOTE 1.
The 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 Partnership's financial position and
operating results for the interim periods. The results of
operations for the three months ended March 31, 1995, are not
necessarily indicative of the results to be expected for the year
ending December 31, 1995.
NOTE 2.
The 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, 1994, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by
writing to WelCare Service Corporation-V (the "Managing General
Partner"), at 7000 Central Parkway, Suite 970, Atlanta, Georgia,
30328.
NOTE 3.
A summary of compensation paid to or accrued for the benefit of
the general partners and affiliates and amounts reimbursed for
costs incurred by these parties on the behalf of the Partnership
are as follows:
Three Months Ended
March 31,
1995 1994
Charged to costs and expenses:
Property management and oversight
management fees . . . . . . . . . . $148,989 $133,570
Financial accounting, data processing,
tax reporting, legal and compliance,
investor relations and supervision
of outside services . . . . . . . . $20,677 $19,553
NOTE 4.
The Partnership's consolidated financial statements have been
presented on the basis that it is a going concern, which
contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Partnership
has working capital deficiencies, has defaulted on certain debt
and has no assurance of any financial support from the General
Partners. These conditions raise substantial doubt about the
Partnership's ability to continue as a going concern. The
Partnership's continued existence is dependent on its ability to
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generate sufficient cash flow to obtain alternative financing
from refinancing sourcesin order to meet its ongoing obligations.
NOTE 5.
At March 31, 1995 and December 31, 1994, the Partnership included
all of its remaining facilities in Property held for sale as the
Partnership intends to dispose of its remaining facilities.
Champaign Opportunity House ("Champaign") and Village Inn Nursing
Home ("Village Inn") were reclassed to Property Held for Sale in
1991. As discussed more fully in Note 7, Champaign was
transferred in March 1995, in satisfaction of a note secured by
the facility. The net book value of the Village Inn property at
March 31, 1995, was $2,279,237.
During 1994, River Hills South and Plantation Care Center were
reclassed from property and equipment to Property held for sale.
The Partnership anticipates these properties will be disposed of
during 1995. The net book values of the properties at March 31,
1995, were $4,939,705 and $1,514,513 for River Hills South and
Plantation Care Center, respectively.
NOTE 6.
In March 1994, the Partnership received notification from the
Idaho Medicaid program that the Partnership owes the state
$149,485 and $109,484, respectively, for Medicaid overpayments
made to the Partnership during 1993 and 1992. These amounts
relate to two Idaho facilities in which the Partnership sold its
interests in 1993. These settlement amounts reduced operating
revenue in 1994 and are included in Medicaid settlements payable
in the accompanying balance sheets.
NOTE 7.
On March 24 1995, the Partnership transferred a deed in lieu of
foreclosure to the holder of the note secured by a mortgage on
Champaign. This note was recourse to the Partnership. The
General Partner successfully negotiated the transfer of deed in
full satisfaction of the note with the lender. The outstanding
principal and accrued interest on the note satisfied by the
transfer was $2,494,842. In connection with the transfer, the
Partnership paid $61,882 in back property taxes on Champaign.
The net book value of the property was $1,465,761. The
Partnership recognized a loss on the transfer of the property of
$1,465,761 and an extraordinary gain on the forgiveness of debt
of $2,494,842.
NOTE 8.
The Partnership continues not to make debt service payments on
the mortgage note secured by Village Inn. Debt service payments
on this note were ceased when this facility was closed prior to
the acquisition of the Corporate General Partner by WelCare
8
Acquisition Corp. on November 20, 1990. Village Inn has tax
certificates of approximately $130,000 outstanding for accrued
real estate taxes that may require redemption by the Partnership
during 1995. The recourse note secured by Village Inn could have
an adverse effect on the Partnership and its ability to continue
as a going concern, should the holder of the note pursue its
satisfaction.
The Partnership ceased debt service on its $1,250,000 note
payable secured by a mortgage on Plantation Care Center
("Plantation"), during March 1995. The Partnership is currently
in negotiations with the lender. This note accrues interest at
7% per annum.
NOTE 9.
Effective April 1, 1995, the Partnership transferred the
operational management responsibilities for Plantation to
Westcare Management, Inc. ("Westcare"), an unaffiliated
management company. The management agreement provides for
management fees of 3.5% of gross facility revenues. The
management agreement with Westcare expires March 31, 1996.
The Partnership also signed a right of first refusal and option
agreement with Westcare with respect to Plantation. Under the
terms of the agreement, Westcare has the option to purchase
Plantation for $1,250,000, plus any unpaid interest that accrues
on the note payable secured by the facility after February 1,
1995. The purchase price is substantially equal to the
underlying secured debt on the facility. The option agreement
will continue until the management agreement is terminated.
An affiliate of the general partner, will continue to provide
accounting and data processing services to the Plantation during
the term of the Westcare management agreement.
NOTE 10.
In November 1990, the Partnership filed claims against Southmark
Corporation ("Southmark") in the Bankruptcy Court. In response
to the partnership's filing, Southmark filed suit against the
Partnership in August of 1991. The Partnership and Southmark
reached a settlement of this litigation and the partnership
received a nonappealable court order approving the settlement in
April 1994. Under this settlement, Southmark paid the partnership
$32,354, which was included in litigation settlement income in the
accompanying statements of operation.
During the first quarter of 1995, the Partnership recognized a
gain on the settlement of advances as all litigation issues have
been resolved with Southmark. Prior to the settlement, Southmark
and the Corporate General Partner of the Partnership each asserted
their position with respect to operating advances made to the
Partnership prior to 1990.
9
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 V
By: WELCARE CONSOLIDATED RESOURCES CORPORATION
OF AMERICA,
Corporate General Partner
Date: June 22, 1995 By: /s/ J. Stephen Eaton
J. Stephen Eaton,
Sole Director and
Principal Executive Officer of the
Corporate General Partner
Date: June 22, 1995 By: /s/ Alan C. Dahl
Alan C. Dahl,
Principal Financial Officer of the
Corporate General Partner
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