<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X
---- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
---------------------------------
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 0-18158
------------
QUEST HEALTH CARE INCOME FUND I, L.P.
--------------------------------------------------------------------------------
Formerly: Southmark/CRCA Health Care Income Fund I, L.P.
--------------------------------------------------------
<TABLE>
<S> <C>
Delaware 58-1697906
-----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1117 Perimeter Center West E-120 Atlanta, GA 30338
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (770) 671-1014
----------------------------
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.
TOTAL OF 14 PAGES
1
<PAGE> 2
QUEST HEALTH CARE INCOME FUND I, L.P.
BALANCE SHEETS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
------------ ------------
1996 1995
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,489,411 $ 1,546,363
Accounts receivable, net of allowance
for doubtful accounts of $ 23,280 and
$21,780 at March 31, 1996 and
December 31, 1995, respectively 995,065 998,120
Prepaid expenses 161,110 279,088
----------- -----------
Total current assets 2,645,586 2,823,571
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Land 240,617 240,617
Buildings and improvements 1,872,215 1,872,215
Equipment and furnishings 874,613 862,217
----------- -----------
2,987,445 2,975,049
Less accumulated depreciation and amortization 2,232,686 2,221,555
----------- -----------
Net property and equipment 754,759 753,494
----------- -----------
TOTAL ASSETS $ 3,400,345 $ 3,577,065
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants. See notes to financial
statements.
2
<PAGE> 3
QUEST HEALTH CARE INCOME FUND I, L.P.
BALANCE SHEETS
LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
------------- ------------
1996 1995
------------- ------------
<S> <C> <C>
CURRENT LIABILITIES:
Note Payable $ - $ -
Current maturities of long-term debt 10,210 10,086
Trade accounts payable 276,473 315,367
Accrued compensation 238,755 254,743
Accrued insurance 81,856 204,640
Estimated third party settlements 100,742 76,029
Other 127,695 90,414
Payable to Quest and affiliates 2,826 10,490
----------- -----------
Total current liabilities 838,557 961,769
LONG-TERM DEBT, less current maturities 4,718 7,275
----------- -----------
Total liabilities 843,275 969,044
----------- -----------
PARTNERS' EQUITY:
Limited Partners 2,722,643 2,773,084
General Partner (165,573) (165,063)
----------- -----------
Total partners' equity 2,557,070 2,608,021
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 3,400,345 $ 3,577,065
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants. See notes to financial
statements.
3
<PAGE> 4
QUEST HEALTH CARE INCOME FUND I, L.P.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1996 1995
----------- ------------
<S> <C> <C>
REVENUES:
Operating revenue $1,949,784 $4,187,767
Interest income 13,670 9,094
Gain on sale - 103,988
---------- ----------
Total revenues 1,963,454 4,300,849
---------- ----------
EXPENSES:
Wages & salaries 947,425 2,146,176
Payroll tax & employee benefits 217,978 477,937
Supplies 243,272 393,044
Other operating expenses 136,714 416,173
Ancillary services 211,764 253,924
Health benefits 58,710 85,151
Management fees 96,427 204,504
Management fees-affiliate 19,285 39,280
Property taxes 16,370 33,234
Interest 393 15,270
Depreciation and amortization 11,131 18,498
Partnership administration 54,936 120,977
---------- ----------
Total expenses 2,014,405 4,204,168
---------- ----------
Net income (loss) $ (50,951) $ 96,681
========== ==========
Net income (loss) per Limited
Partnership Unit $ (.19) $ .37
========== ==========
Weighted average Limited Partnership
Units outstanding 262,183 262,183
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants. See notes to financial
statements.
4
<PAGE> 5
QUEST HEALTH CARE INCOME FUND I, L.P.
STATEMENTS OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity
--------- ---------- ----------
<S> <C> <C> <C>
Balance at December 31, 1994 $(163,756) $3,689,007 $3,525,251
Net income 967 95,714 96,681
--------- ---------- ----------
Balance at March 31, 1995 $(162,789) $3,784,721 $3,621,932
========= ========== ==========
Balance at December 31, 1995 $(165,063) $2,773,084 $2,608,021
Net loss (510) (50,441) (50,951)
--------- ---------- ----------
Balance at March 31, 1996 $(165,573) $2,722,643 $2,557,070
========= ========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants. See notes to financial
statements.
5
<PAGE> 6
QUEST HEALTH CARE INCOME FUND I, L.P.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from residents and
government agencies $1,952,839 $3,918,982
Cash paid to suppliers and
employees (2,000,263) (4,143,945)
Interest received 13,670 9,094
Interest paid (393) (15,270)
Property taxes paid (7,976) (39,696)
---------- ----------
Net cash provided by (used in)
operating activities (42,123) (270,835)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of facilities - 2,734,651
Additions/retirements to property
and equipment (12,396) (2,023)
---------- ----------
Net cash provided by (used in)
investing activities (12,396) 2,732,628
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (2,433) (605,930)
---------- ----------
Net cash used in financing
activities (2,433) (605,930)
---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (56,952) 1,855,863
Cash and cash equivalents at beginning of
period 1,546,363 270,593
---------- ----------
Cash and cash equivalents at end of period $1,489,411 $2,126,456
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants. See notes to financial
statements.
6
<PAGE> 7
QUEST HEALTH CARE INCOME FUND I, L.P.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1996 1995
---------- ----------
<S> <C> <C>
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss) $ (50,951) $ 96,681
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Gain on sale of facilities - (103,988)
Depreciation and amortization 11,131 18,498
Changes net of effect of sold
facilities:
Accounts receivable 3,055 (268,785)
Prepaid expenses 117,978 211,558
Accounts payable and accrued
liabilities (115,672) (213,083)
Payable to Quest and affiliates (7,664) (11,716)
---------- ----------
Net cash used in
operating activities $ (42,123) $ (270,835)
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants. See notes to financial
statements.
7
<PAGE> 8
QUEST HEALTH CARE INCOME FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
NOTE 1
During interim periods, Quest Health Care Income Fund I, L.P. (the
"Partnership") follows the accounting policies set forth in its Annual Report
on Form 10-K filed with the Securities and Exchange Commission. Users of
financial information provided for interim periods should refer to the annual
financial information and footnotes contained in the Annual Report on Form 10-K
when reviewing the interim financial results presented herein.
In the opinion of management, the accompanying unaudited interim financial
statements, prepared in accordance with the instructions for Form 10-Q, contain
all material adjustments, consisting only of normal recurring adjustments
necessary to present fairly the financial condition, results of operations,
changes in partners' equity and cash flows of the Partnership for the
respective interim periods presented. The results of operations for such
interim periods are not necessarily indicative of results of operations for a
full year.
NOTE 2 CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, demand deposits, money market funds and investments in certificates of
deposit with original maturities, when purchased, of three months or less.
The Partnership maintains cash accounts with a variety of unrelated banks, all
of which are covered by the Federal Deposit Insurance Corporation (FDIC). At
March 31, 1996, the Partnership maintained cash balances at these banks
aggregating $1,371,745 in excess of the $100,000 FDIC insured maximum.
Included in cash and cash equivalents is $1,393,100 invested in repurchase
agreements with underlying United States government backed securities, which
have original maturities of less than 30 days.
NOTE 3 TRANSACTIONS WITH AFFILIATES
The Partnership Agreement provides for payment of property management fees
based on 6% of gross property operating revenue. Quest Administrative
Services, L.P., (QASLP), an affiliate of Quest, receives 1% of gross operating
revenue relating to services provided directly to the facilities. Total
payments to QASLP under this contract for the periods ended March 31, 1996 and
1995 were $19,285 and $39,280, respectively.
Quest, in an effort to continue certain health benefits for Partnership
employees, created an employee benefit trust (the "Trust") in compliance with
the guidelines promulgated by VEBA and ERISA. Amounts contributed to the Trust
by the Partnership and Partnership employees are strictly for the benefit of
employees of the participating employers, payment of excess loss reinsurance,
life insurance and accidental death and dismemberment and claims and plan
administration and employee medical claims. Quest has engaged a claims
pre-certification organization to review all claims made by the Partnership's
employees. Approximately $58,710 and $85,151 were recorded under this
arrangement for the periods ended March 31, 1996 and 1995, respectively. The
Trust is administered by an affiliate of Quest, however, no profits accrue to
the benefit of either the affiliate or Quest.
8
<PAGE> 9
QUEST HEALTH CARE INCOME FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 LITIGATION
In December 1994, the Partnership received a Notice and Demand for Payment from
the Idaho State Tax Commission resulting from sales tax audits for
approximately $90,000. The Company is discussing a settlement of this matter
and has recorded a provision of approximately $67,000 in the Partnership's
Financial Statements. Management is of the opinion that the final resolution
will not have a material adverse effect on the Partnership's financial
position. As a result of selling facility interests in 1995, the liability
and reserve were reduced to $36,410 and $27,308, respectively. The Partnership
is involved in certain other routine litigation incidental to business.
Management does not expect settlements, if any, to have a material adverse
effect on the Partnership's financial position.
NOTE 5 SALE OF FACILITIES
On February 28, 1995, the Partnership sold its partnership interests in seven
of its facilities to an unaffiliated third party. The Partnership reflected an
estimated loss on the sale of these facilities of $3,470,863 at December 31,
1994, and recognized a gain of $103,988 upon closing of the sale. The contract
called for adjusting working capital, as defined, to exclude interpartnership
accounts and the current portion of long term debt and to reflect a 25%
discount on accounts receivable at closing. The contract also provided for a
cash consideration adjustment based on changes in working capital including the
change in the 25% discount proportionate to changes in accounts receivable
occurring between December 31, 1994 and the date of closing of February 28,
1995.
At closing, the Partnership received initial consideration of $2,734,651,
consisting of cash of $2,133,359 and debt retired from sales proceeds of
$601,292. Subsequently, the Partnership determined that $417,254 of additional
cash was due to the Partnership from post closing adjustments of which $377,058
was received in 1995, and the balance was collected in the first quarter of
1996. In addition the purchaser assumed debt related to equipment of
approximately $102,000. Total consideration was, therefore, $3,253,905. The
Partnership made a final determination of adjusted working capital when the
Partnership's accountants completed certain agreed upon procedures during the
third quarter of 1995. A distribution of $786,489 to the limited partners was
made during the third quarter of 1995.
The balance sheet of the Partnership reflects the effects of the sale of the
Partnership's interests in the seven facilities. The Partnership is seeking to
liquidate the Partnership's interests in its remaining facilities, subject to
the restrictions set forth in the Partnership governing documents.
NOTE 6 PRO FORMA INFORMATION (UNAUDITED)
Due to the impact of the Partnership selling its interests in seven of its
facilities in 1995, historical results of operations may not be indicative of
future results of operations and net income (loss) per limited partnership
unit. The following unaudited pro forma condensed statement of operations is
presented as if the transactions previously described occurred as of January 1,
1995. In the opinion of the Partnership's management, all adjustments necessary
to reflect the effects of the sale have been made.
The pro forma condensed financial information does not purport to present what
actual results of operations would have been if the transactions previously
described had occurred on such dates or to project results for any future
period. It is management of the Partnership's belief that all adjustments
necessary to reflect the affects of the sales have been made.
9
<PAGE> 10
QUEST HEALTH CARE INCOME FUND I, L.P.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 PRO FORMA INFORMATION (UNAUDITED) continued
PRO FORMA CONDENSED STATEMENT OF OPERATIONS (B)
For the Quarter Ended March 31, 1995
(Unaudited in thousands)
<TABLE>
<CAPTION>
Historical Adjustments Pro Forma
-------------- -------------- -------------
<S> <C> <C> <C>
Revenues: $ 4,197 $ (2,346)(A) $ 1,851
---------- --------- ----------
Expenses:
Wages and salaries $ 2,146 $ (1,225)(A) $ 921
Operating expenses 1,626 (894)(A) 732
Management fees 205 (116)(A) 89
Management fees affiliate 39 (22)(A) 17
Property taxes and interest 49 (31)(A) 18
Depreciation and amortization 18 (1)(A) 17
Partnership administration 121 - 121
---------- --------- ----------
4,204 (2,289) 1,915
---------- --------- ----------
Net income (loss) (B) $ (7) $ (57) $ (64)
========== ========= ==========
</TABLE>
(A) The pro forma adjustments remove revenues and expenses directly related to
the interests in seven nursing homes sold to an unaffiliated third party on
February 28, 1995.
(B) The historical statement of operations for the period ended March 31, 1995
includes a gain from the sale of a facility of $104, in thousands. This amount
is not included in the above pro forma condensed statement of operations due to
its non recurring nature.
NOTE 7 GOING CONCERN
The Partnership's 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 sale of the
Partnership's interests in seven nursing homes and possible future sales of any
or all of its remaining facilities will have an effect on cash flow from
operations in the future.
Management of the Partnership believes that successful control of the facility
and Partnership expenses and establishing adequate reserves from the sales of
facilities should enable the Partnership to meet its obligations and upon the
final sale of its assets, liquidate in an orderly fashion.
NOTE 8 ACCOUNTING POLICIES
In March 1995, the Financial Accounting Standards Board issued Statement of
Accounting Standard No. 121 - "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of", which is effective for
fiscal years beginning after December 15, 1995. Since the Partnership has
already recognized impairment losses, effectively adjusting the carrying value
of its long-lived assets, as of December 31, 1994, to estimated net realizable
value, no significant adjustment from net realizable value to fair value is
expected.
During 1995, the Company adopted Statement of Financial Accounting Standards
No. 107, "Disclosures about Fair Value of Financial Instruments," which
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet. The carrying value of cash and
cash equivalents, accounts receivable, accounts payable and accrued expenses
approximate fair value due to the short-term nature of these instruments.
There are no off-balance sheet financial instruments to which the Partnership
is subject.
10
<PAGE> 11
PART 1
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
Results of Operations:
In February 1995, the Partnership sold its Partnership interests in seven of
its properties to an unaffiliated third party. The proceeds from the sale were
subject to adjustment reflecting changes in elements of working capital between
December 31, 1994 and February 28, 1995.
Neither the general partner of the Partnership nor its affiliates received any
remuneration or distributions of sales proceeds.
Revenue:
In February 1995, the Partnership's interest in seven facilities were sold.
Therefore, the revenues and expenses for the three months ended March 31, 1996
are not directly comparable to the same period in 1995. On a pro forma basis,
the three remaining facilities, Burley, Hearthside and South Salem increased
revenues $112,791. Over $60,000 of this increase is related to Medicare
utilization at Hearthside. The remaining increase relates to increased
ancillary utilization and changes in patient mix. Revenue in the first quarter
of 1995 included $2,346,198 related to the interests in seven facilities sold
by the Partnership in 1995.
All resident receivables are recorded at their original face amount and are due
and payable under "normal" market terms and conditions. In the event of
non-collection, the ultimate loss to the Partnership would be limited to the
recorded balance of the receivables as shown in the balance sheet.
The significant components of accounts receivable at March 31, 1996 and
December 31, 1995 are:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Medicaid 37% 52%
Private Pay 22% 11%
VA, Medicare and Other 41% 37%
--- ---
100% 100%
=== ===
</TABLE>
Payments by both the state and federal governments are normally received within
60-90 days. The sources of patient revenues for periods ended March 31, 1996
and 1995 are:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Medicaid 55% 60%
Private Pay 14% 19%
VA, Medicare and Other 31% 21%
--- ---
100% 100%
=== ===
</TABLE>
Expenses:
On a pro forma basis expenses, excluding partner administration costs, for the
three month period ended March 31, 1996 increased $165,216, when compared to
the same period in 1995. The primary reasons for these increases were
increased ancillary and supplies utilization, salary increases and workers
compensation rate increases. Salary increases were driven by market forces and
as a result of final rules published relating to OBRA 1987 requiring increased
staffing levels. Partnership administration expense was significantly less
than the comparable period in 1995 due to a decrease in outside professional
fees.
On February 28, 1995, the Partnership sold its partnership interests in seven
of its facilities to an unaffiliated third party. The Partnership reflected an
estimated loss on the sale of these facilities of $3,470,863 at December 31,
1994, and recognized a gain of $103,988 upon closing of the sale. The contract
called for adjusting working capital, as defined, to exclude interpartnership
accounts and the current portion of long term debt and to reflect a 25%
discount on accounts receivable at closing. The contract also provided for a
11
<PAGE> 12
cash consideration adjustment based on changes in working capital including the
change in the 25% discount proportionate to changes in accounts receivable
occurring between December 31, 1994 and the date of closing of February 28,
1995.
At closing, the Partnership received initial consideration of $2,734,651,
consisting of cash of $2,133,359 and debt retired from sales proceeds of
$601,292. Subsequently, the Partnership determined that $417,254 of additional
cash was due to the Partnership from post closing adjustments of which $377,058
was received in 1995, and the balance was collected in the first quarter of
1996. In addition the purchaser assumed debt related to equipment of
approximately $102,000. Total consideration was therefore, $3,253,905. The
Partnership made a final determination of adjusted working capital when the
Partnership's accountants completed certain agreed upon procedures, during the
third quarter. A distribution of $786,489 to the limited partners was made
during the third quarter of 1995.
Ancillary Revenue and Expense is a term that describes specialized services
provided by third party unaffiliated vendors. These services include speech,
occupational, physical and occasionally intravenous therapies. These revenues
and expenses are subject to certain cost limitations and do not materially
affect the profitability of a facility. However, the ability to provide these
services enables a facility to accept residents reimbursed under the federal
Medicare system instead of the state Medicaid system. Typically, the Medicare
system reimburses at a higher daily rate than Medicaid. These Medicare
residents are people, not necessarily elderly, who, under another set of
regulations, must be discharged from hospitals before they are well enough to
go home. The result is that nursing homes that once were a final stop in
life's journey have become more like auxiliary hospitals with a substantially
shortened length of stay. The pursuit of high reimbursement Medicare residents
limits the number of Medicaid beds available to the indigent elderly. These
people will be required to live with relatives or find low skilled "foster
care" or community based services.
Liquidity and Capital Resources:
At March 31, 1996, the Partnership held cash and cash equivalents of
$1,489,411, which represents a decrease of $56,952 since December 31, 1995.
The cash decrease is due primarily to the use of cash for operating activities
and for the purchase of fixed assets. The cash position of the Partnership
remains highly variable. While the Partnership's remaining facilities have
shown improvement, cash is being conserved wherever possible to be used for
capital improvements, payment of property taxes, and any potential paybacks to
Medicare and Medicaid that may arise.
The Partnership is seeking to liquidate the Partnership's interests in its
remaining facilities. In recent months, the Partnership has received several
expressions of interest in acquiring one of the Partnership's remaining
facility interests. The Partnership is currently assessing the adequacy of
these offers and the impact upon the orderly liquidation of the Partnership.
Medicare is a federal entitlement program and Medicaid (the source of the
majority of the Partnership's revenue) represents an entitlement program
administered differently by each state which is partially funded by the Federal
government. In August 1993, Congress enacted Title XIII of OBRA 93. This act,
among other things, taxed social security benefits received by the elderly and
further limited payments under state Medicaid programs for which federal
matching would be permitted. In October 1993, the Health Care Financial
Administration (HCFA) implemented a freeze on Medicare reimbursement, which
remains today, on routine cost limits, certain Part B ancillaries and
prospective payment system rates. In addition, HCFA eliminated the return on
equity component of the reimbursement rate. Further, by the end of 1993,
several states, because of federal actions and/or budgetary difficulties, had
either taken action to curtail the growth in entitlement programs and/or had
indicated that future action was possible. The latest concept appears to be
"block grants" to the states. What this means to nursing facilities cannot
currently be determined.
12
<PAGE> 13
Despite the fact that health care reform proposals at the federal level have
been significantly reduced, activities at the state level continue and are
encouraged by HCFA. An example of state level action is Oregon's plan, the
location of the Partnership's Hearthside and South Salem facilities, to convert
its Medicaid reimbursement system to a managed care program administered by
third parties such as Blue Cross/Blue Shield. The effect on reimbursement
cannot currently be determined by management of the Partnership.
The Partnership has no established credit lines with outside lending sources
and relies solely on cash flow and cash reserves to conduct Partnership
business. There are no material commitments for capital improvements at the
remaining facilities.
The Partnership's continued existence is dependent upon its ability to: (i)
generate sufficient cash flow to meet its obligations on a timely basis; and
(ii) obtain additional sources of funding as may be required. As stated above,
the Partnership will entertain offers to sell any or all of its three remaining
facilities and, if accepted and closed, plans to liquidate in an orderly
fashion.
In March 1995, the Financial Accounting Standards Board issued Statement of
Accounting Standard No. 121 - "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of", which is effective for
fiscal years beginning after December 15, 1995. Since the Partnership has
already recognized impairment losses, effectively adjusting the carrying value
of its long-lived assets, as of December 31, 1994, to estimated net realizable
value, no significant adjustment from net realizable value to fair value is
expected.
PART II. OTHER INFORMATION
ITEMS 1-5.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits.
27 - Financial Data Schedule (for SEC use only)
(B) Reports on Form 8-K.
None during the first quarter of 1996
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
QUEST HEALTH CARE INCOME
FUND I, L.P.
(Registrant)
By: QUEST RESCUE PARTNERS I-1, L.P.
General Partner
By: QUEST RESCUE PARTNERS I-1 CORP,
Date: May 17, 1996 By:/s/ Stuart C. Berry
---------------- -------------------------------
Executive Vice President/CFO
By:/s/ Michael G. Hunter
-------------------------------
President
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF QUEST HEALTH CARE (FUND I) FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,489,411
<SECURITIES> 0
<RECEIVABLES> 1,018,345
<ALLOWANCES> 23,280
<INVENTORY> 0
<CURRENT-ASSETS> 2,645,586
<PP&E> 2,987,445
<DEPRECIATION> 2,232,686
<TOTAL-ASSETS> 3,400,345
<CURRENT-LIABILITIES> 838,557
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,557,070
<TOTAL-LIABILITY-AND-EQUITY> 3,400,345
<SALES> 0
<TOTAL-REVENUES> 1,963,454
<CGS> 0
<TOTAL-COSTS> 2,012,512
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,500
<INTEREST-EXPENSE> 393
<INCOME-PRETAX> (50,951)
<INCOME-TAX> 0
<INCOME-CONTINUING> (50,951)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (50,951)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> (.19)
</TABLE>
