SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter Ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-12992
NuMED HOME HEALTH CARE, INC.
(Exact name of small business issuer as specified in its charter)
STATE OF NEVADA 34-1711764
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
5770 Roosevelt Blvd., Suite, 700, Clearwater, FL 34620
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (813) 524-3227
Indicate by check mark whether the issuer (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 shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [ X ] Yes
[ ] No
The number of shares outstanding of the Issuer's common stock at $.001 par
value as of January 31, 1996 was 4,913,916 (exclusive of Treasury Shares).
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, March 31,
1996 1996
ASSETS
Current assets:
Cash and cash equivalents $ 664,059 $ 1,494,860
Cash deposits securing contractual
arrangements 1,917,014 1,417,014
---------- ----------
2,581,073 2,911,874
Accounts receivable 4,702,975 4,788,715
Notes receivable 0 106,966
Inventories 25,126 26,274
Prepaids and other current assets 222,846 201,224
---------- ----------
Total current assets 7,532,020 8,035,053
Property and equipment, net of
accumulated depreciation of
$185,411 and $117,459, respectively 366,424 259,138
Goodwill, net of amortization of
$1,392,766 in 1996 and $1,103,018
in 1995 4,754,368 4,991,154
Other intangibles assets, net of
accumulated amortization of
$1,031,600 and $926,187 respectively 98,212 203,627
Other 164,204 32,109
---------- ----------
Total assets $12,915,228 $13,521,081
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $753,644 $550,117
Accrued expenses 1,796,564 1,943,306
Short term portion on line of credit 952,387 20,000
Current portion of notes payable-
acquisitions 163,681 167,852
---------- ----------
Total current liabilities 3,666,276 2,681,275
Long term obligations:
Other 21,276 21,999
Notes payable-acquisitions, less
current portion 505,923 637,028
---------- ----------
Total long term obligations 527,199 659,027
---------- ----------
Total liabilities 4,193,475 3,340,302
Stockholders' equity:
Preferred stock, authorized 2,000,000,
no shares issued or outstanding 0 0
Common stock, $.001 par value,
authorized 48,000,000 shares,
5,010,219 shares issued 5,010 5,010
Additional paid-in capital 10,706,806 10,708,176
Treasury stock, 96,303 and 46,023
shares, respectively, at cost (193,569) (68,138)
Accumulated deficit (1,796,494) (464,269)
---------- ----------
Total stockholders' equity 8,721,753 10,180,779
---------- ----------
Total liabilities and stockholders'
equity $12,915,228 $13,521,081
========== ==========
Note: The balance sheet at March 31, 1996 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See notes to consolidated financial statements.
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Operations
Nine Months Ended December 31,
1996 1995
Net revenues $18,875,323 $17,493,948
Direct expenses 14,678,754 13,115,996
---------- ----------
Gross profit 4,196,569 4,377,952
General and administrative expenses:
Salaries and benefits 2,571,166 2,406,432
Operating expenses 589,638 480,296
Professional fees 329,981 182,922
Legal fees 0 0
Occupancy expenses 582,362 512,092
Insurance 192,386 165,452
Amortization and depreciation 453,298 468,026
Bad debt expense 37,514 5,583
---------- ----------
Total general and administrative 4,756,345 4,220,803
---------- ----------
Operating income (loss) (559,776) 157,149
Other revenues (expenses):
Interest income 72,969 76,009
Interest expense (60,871) (16,596)
Estimated contractual settlement-
FYE 6/30/95 (197,342) 0
Estimated contractual settlement-
FYE 6/30/96 (567,658) 0
Other 11,636 (7,779)
---------- ----------
Total other revenues, net (741,266) 51,634
---------- ----------
Income (loss) before income taxes (1,301,042) 208,783
Income tax (benefit) expense 31,183 8,540
---------- ----------
Net income (loss) after income taxes $(1,332,225) $ 200,243
========== ==========
Per share:
Net income (loss) after income taxes $ (0.27) $ 0.04
========== ==========
Shares used in computing per
share information 4,934,613 4,911,431
See notes to consolidated financial statements
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended December 31,
1996 1995
Net revenues $ 6,309,810 $ 5,907,603
Direct expenses 4,941,846 4,453,644
---------- ----------
Gross profit 1,367,964 1,453,959
General and administrative expenses:
Salaries and benefits 839,254 833,200
Operating expenses 204,883 149,789
Professional fees 71,044 49,885
Occupancy expenses 191,591 166,839
Insurance 21,468 55,635
Amortization and depreciation 150,687 156,260
Bad debt expense 4,966 0
---------- ----------
Total general and administrative 1,483,893 1,411,608
---------- ----------
Operating income (loss) (115,929) 42,351
Other revenues (expenses):
Interest income 13,286 24,007
Interest expense (22,085) (2,774)
Other 4,762 6,000
---------- ----------
Total other revenues, net (4,037) 27,233
---------- ----------
Income (loss) before income taxes (119,966) 69,584
Income tax (benefit) expense 19,422 5,443
---------- ----------
Net income (loss) after income taxes ($139,388) $64,141
========== ==========
Per share:
Net income (loss) after income taxes ($0.03) $0.01
========== ==========
Shares used in computing per
share information 4,918,705 4,946,173
See notes to consolidated financial statements
<PAGE>
<TABLE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
Nine Months Ended December, 1996 and Year Ended March 31, 1996
<CAPTION>
Unrealized
Gain
Additional (Loss) on
Common Stock Paid-in Accumulated Marketable Treasury Stock
Shares Dollars Capital (Deficit) Securities Shares Dollars Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
March 31,
1995 5,010,219 $5,010 $10,665,403 ($573,764) ($51,686) (409,020) ($492,000) $9,552,963
Net income 109,495 109,495
Unrealized gain
on marketable
securities 51,686 51,686
Other 6,000 6,000
Acquisition of
assets from
Rehab America,
Inc. 32,637 297,715 358,114 390,751
Shares issued
under Employee
Stock Purchase 3,275 81,282 97,772 101,047
Plan
Purchase treasury
shares (21,000) (38,038) (38,038)
Private placement
of restricted
stock for
consulting
services 861 5,000 6,014 6,875
--------- --------- ---------- ---------- ------- ------- -------- ----------
Balance at
March 31,
1996 5,010,219 $5,010 $10,708,176 ($464,269) $0 (46,023) ($68,138) $10,180,779
Net income
(loss) (1,332,225) (1,332,225)
Exercise of
options (1,684) 20,000 30,885 29,201
Purchase of
treasury
shares (100,000) (201,000) (201,000)
Shares issued
under Employee
Stock Purchase
Plan 314 29,720 44,684 44,998
--------- --------- ---------- ---------- ------- ------- -------- ---------
Balance at
December 31,
1996 5,010,219 $5,010 $10,706,806 ($1,796,494) $0 (96,303) ($193,569) $8,721,753
========= ========= ========== ========== ======= ======= ======== =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Cash Flow
Nine Months Ended December 31,
1996 1995
Cash flows from operating activities
Net Income (loss) $ (1,332,225) $ 200,243
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 453,297 468,026
Cash deposits securing contractual
arrangements (500,000) (142,014)
Loss on sale of marketable securities 0 9,235
Loss on sale or disposal of property,
plant and equipment 268 4,540
(Decrease) increase in cash due to net
changes in operating assets and
liabilities:
Accounts receivable - trade 69,634 (534,387)
Prepaid expenses and other assets (20,472) (216,154)
Deferred charges or other long term
assets (132,094) 1,062,717
Accounts payable and accrued
expenses 9,329 (32,123)
---------- ----------
Net cash provided by (used in) operating
activities (1,452,263) 820,083
Cash flows from investing activities
Sale of marketable securities held for
sale 0 40,965
(Purchase) of property and equipment, net (165,690) (106,379)
Acquisition of assets from Rehab America,
Inc., net of cash acquired 0 (5,124,818)
Purchase of accounts receivable from
factor 0 (242,327)
---------- ----------
Net cash (used in) investing activities (165,690) (5,432,559)
Cash flows from financing activities
Proceeds from short-term borrowings 2,162,483 202,384
Payments of short-term borrowings (1,223,668) (347,536)
Payments of long-term borrowings (131,828) (15,949)
Proceeds from issuance of stock 44,998 47,144
Purchase of treasury stock (201,000) 0
Exercise of options 29,201 0
Other 0 6,000
(Issuance) collection of note receivable 106,966 (100,000)
---------- ----------
Net cash (used in) provided by
financing activities 787,152 (207,957)
---------- ----------
Increase (Decrease) in cash and cash
equivalents (830,801) (4,820,433)
Cash and cash equivalents at beginning
of year 1,494,860 7,406,142
---------- ----------
Cash and cash equivalents at end of
period $ 664,059 $ 2,585,709
========== ==========
Non cash transactions:
Common stock issued for acquisition of
assets from Rehab America, Inc.
(275,000 shares) $ - $ 360,938
Common stock issued for consulting
services (22,715 shares) $ - $ 29,813
Common stock issued for consulting
services (5,000 shares) $ - $ 6,875
---------- ----------
$ - $ 397,626
========== ==========
See notes to consolidated financial statements
<PAGE>
NuMED Home Health Care Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
December 31, 1996
NOTE A-BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended December 31,
1996 are not necessarily indicative of the results that may be expected
for the year ending March 31, 1997. For further information, refer to the
consolidated financial statements and footnotes included in the Company's
and Subsidiaries' Form 10-KSB for the year ended March 31, 1996.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net Revenues for the three and nine months ended December 31, 1996
increased by 7% or $402,000 and 8% or $1,381,000, respectively over the
same periods one year ago. The acquisition of Parke Home Health Care,
Inc. (Parke) effective January 1, 1996 accounted for an increase of
$515,000 and $1,598,000, respectively, for the three and nine month
periods. The remaining business experienced a decrease of $113,000 and
$217,000 which was primarily attributable to decreased volume in the
Rehabilitation Therapy Division. During the second quarter, new contracts
as well as existing business were negatively affected by the uncertainty
as a result of pending discussions and consideration of an extraordinary
transaction involving the potential sale of the Company. During the third
quarter, the Company successfully obtained 15 new contracts in the
Rehabilitation Division and 5 new contracts in the Home Health Division.
However, the new contracts have not yet offset the diminished business
experienced in the second quarter. In December, Whole Person Home Health
Care in Erie, Pennsylvania received accreditation with commendation from
the Joint Commission on Accreditation of Healthcare Organizations (JCAHO)
which has led to increased business in Pennsylvania early in the fourth
quarter.
Direct Expenses increased approximately 11% and 12% respectively, for
the three and nine months ended December 31, 1996. As a percentage of Net
Revenues, Direct Expenses increased from 75% for the three and nine months
periods ending December 31, 1995 to 78% for the same periods ending
December 31, 1996. For the three months ended December 31, 1996, Direct
Expenses, as a percentage of Net Revenues for the Home Health Division
increased 4% to 73% while Direct Expenses for NuMED Rehabilitation
increased 3% to 85% of its Net Revenues. For the nine months ended
December 31, 1996, Direct Expenses as a percentage of Net Revenues for the
Home Health Division, increased 3% to 73% of its Net Revenues while Direct
Expenses for NuMED Rehabilitation increased 4% to 84% of its Net Revenues.
The Company's Gross Profit has been negatively impacted by five
primary factors. First, NuMED has incurred excessive legal costs of
approximately $192,000 and $50,000 of other costs relating primarily from
failed acquisitions and a class action suit (see Part II-Other
Information) during the nine month period ended December 31, 1996.
Second, during the third quarter, the Company retroactively modified its
contract with one of its key Rehabilitation customers that is undergoing a
Medicare audit (see below). As a result, the Gross Profit of NuMED
Rehabilitation has also diminished. The Company is undertaking cost
containment efforts as well as implementing new monitoring programs to
reduce the level of Direct Expenses. Third, the mix of revenue between
occupational, physical and speech therapy has shifted during the nine
months ended December 31, 1996. Physical therapy revenue, which generally
yields lower gross margins than either occupational or speech therapy,
constituted a larger percentage of Net Revenues during the nine months
ended December 31, 1996 as compared to the same period one year ago. The
Company is actively pursuing more profitable types of contracts. Fourth,
the mix of revenue between home health aides and skilled services has
shifted during the nine months ended December 31, 1996. Home health
aides, which generally yield lower gross margin than skilled services,
constituted a larger percentage of Net Revenues during the nine months
ended December 31, 1996. In general, third party payors are requiring
that care be provided by lower skilled and less expensive care givers. To
counter this trend, the Company is pursuing alternative types of business
with higher margins. Fifth, a significant portion of employees in both
the Home Health and Rehabilitation Therapy Division are full time. Salary
costs relating to these full time employees do not fluctuate with changes
in revenue. As revenue decreases, these costs result in an increased
Direct Expense percentage. The Company is currently evaluating the
proportion of full and part time employees.
General and Administrative expenses for the three and nine months
ended December 31, 1996 increased $72,000 or 5% and $536,000 or 13%
compared to the same periods one year ago. The overall increase is
primarily attributable to the acquisition of Parke ($53,000 for the three
months ended December 31, 1996 and $236,000 for the nine month period
ending December 31, 1996) and the increased professional fees incurred
with the defense of and class action litigation (see Part II-Other
Information) and the proposed acquisition of the Company by CCF Health
Care Ventures, Inc. (discussions were terminated in August, 1996).
Operating expenses increased as a result of increased travel relating to
the proposed sale and other due diligence related activities.
The Health Care Financing Administration (HCFA) has issued
reimbursement guidelines (salary equivalency) for physical therapy
services. Similar guidelines for occupational and speech therapy services
are pending, but have not yet been published. Recently, HCFA has
instructed its intermediaries to scrutinize payments for occupational and
speech therapy services using prudent buyer guidelines which generally
state that a health care provider should not pay in excess of market rates
for comparable services. The Company expects that under the general
direction of HCFA, fiscal intermediaries will continue to aggressively
scrutinize payments related to therapy service not yet subject to salary
equivalency.
One of NuMED Rehabilitation's key customers is currently undergoing a
routine Medicare audit of its cost report. The customer's fiscal
intermediary, in its interpretation of the Medicare prudent buyer
guidelines, has concluded that the cost of certain professional contract
therapy services provided by NuMED Rehabilitation exceeded these
guidelines. Management believes that the fiscal intermediary conducting
this audit has applied an overreaching and erroneous interpretation of
applicable reimbursement guidelines.
The intermediary's first calculations indicated total disallowed
costs of $2.1 million. The Company's client as well as representatives
from the Company were successful in reducing the amount of disallowed
costs from $2.1 million to $899,000. The Company was contractually
obligated to repay this key client the amount of Medicare disallowed costs
and has recorded an estimated aggregate reserve. The estimated settlement
for the first year (customer's fiscal year ending June 30, 1995) of the
contract which is currently being audited is approximately $197,000. The
estimated settlement for the second year (customer's fiscal year ending
June 30, 1996) of the contract which is still unaudited is approximately
$702,000.
During the second and third quarter of fiscal 1997, NuMED paid a
total of $899,000 to this customer, representing disallowed costs for the
client's fiscal years ending 6/30/95 and 6/30/96. The Company is
optimistic that some or all of the disallowed costs will be recovered in
the appeal process. $765,000 of the $899,000 disallowed costs has been
expensed. The Company has reached an agreement with its client that the
appeal of 1995 disallowed costs will not be pursued. However, the Company
intends to vigorously pursue all avenues of appeal to recover disallowed
costs for 1996. There is no guarantee that intermediary negotiations or
the appeals process will result in a favorable determination. An adverse
decision during negotiations with the fiscal intermediary or in the appeal
process could require NuMED Rehabilitation to further revise its estimate
and could have a material adverse effect on the Company's financial
position, liquidity and results of operations.
As a result of the above audit, the Company has retroactively
renegotiated its contract with this key customer to be consistent with
negotiated settlements of the prior years. Even though management
believes that the previous contract was well within current regulations,
management also believes that the renegotiated contract will mitigate
future large adjustments from prudent buyer interpretations at this
client.
In addition, the Company has secured a $500,000 letter of credit for
future potential disallowances (see Liquidity and Capital Resources) and
has renegotiated the original terms with the client. Because of the
anticipated success of the intermediary negotiations, the client has
agreed to revoke the $500,000 letter of credit the later of March 20, 1997
or the receipt of the Notice of Program Reimbursement (NPR) for the fiscal
year ending 6/30/96. The Company is optimistic that the NPR will be
received by March 20, 1997.
As a result of the foregoing, the Company experienced a net loss of
approximately $139,000 for the three months ended December 31, 1996 and
$1,332,000 for the nine months ended December 31, 1996 as compared to net
income of $64,000 and $200,000, respectively for the same periods one year
ago. Excluding the effect of the estimated contractual settlement,
expenses associated with the potential sale and defense of the class
action suit, the Company would have incurred a loss of $375,000 for the
nine month period ending December 31, 1996.
Liquidity and Capital Resources
The Company's working capital and current ratio were $3,866,000 and
2:1, respectively as of December 31, 1996 as compared to $5,354,000 and
3:0, respectively, as of March 31, 1996. Both working capital and the
current ratio have decreased as a result of operating losses, the payment
of the estimated Medicare settlement described above and the establishment
of a letter of credit also described above.
Cash from Operations decreased $1,452,000 for the nine months ended
December 31, 1996 primarily due to the net loss and transactions related
to the estimated Medicare settlement.
As previously discussed, a fiscal intermediary conducting a routine
Medicare audit of one of NuMED Rehabilitation's key customer's cost report
has indicated its position that the cost of certain professional contract
therapy services provided by NuMED Rehabilitation exceeded the limits
mandated by Medicare prudent buyer principles. The Company has expensed
$765,000 of the $899,000 paid to this client (see Management Discussion &
Analysis). Management believes that the position taken by the auditing
fiscal intermediary is erroneous and intends to vigorously contest and
appeal disallowed costs related to the client's year ending 6/30/96.
There can be no assurance that NuMED Rehabilitation will prevail in its
position on this matter. An adverse determination by the fiscal
intermediary could require NuMED Rehabilitation to revise its estimate and
further reimburse this customer which could have a material adverse effect
on the Company's financial position, liquidity and results of operations.
In addition, the Company has secured a one year $500,000 letter of
credit, expiring on September 30, 1997, for future potential
disallowances. This letter of credit is secured by a Certificate of
Deposit. During the third quarter and because of the anticipated success
of the intermediary negotiations, the client has agreed to revoke the
letter of credit the later of March 20, 1997 or the receipt of the Notice
of Program Reimbursement (NPR) for the client's fiscal year ending
6/30/96. The Company is optimistic that the NPR will be received by March
20, 1997. Upon revocation of the letter of credit, $500,000 will be
available for working capital.
The Company has a line of credit in the amount of $1.0 million.
Interest on this line accrues at a rate equal to the lender's certificate
of deposit rate plus 1.75%. The line of credit is secured by a $1.0
million certificate of deposit. Approximately $359,000 of this line was
utilized to pay the cash portion of the purchase price of the capital
stock of Parke. Approximately $201,000 was used to repurchase 100,000
shares of the Company's common stock on August 23, 1996 at a purchase
price of $2.01 per share. $440,000 of additional credit was utilized to
fund working capital and collaterize the letter of credit in connection
with the foregoing Medicare audit. The outstanding balance is due and
payable no later February 28, 1998.
The Company also has a $275,000 and a $150,000 line of credit.
Interest on the $275,000 line of credit accrues at a rate equal to the
lender's certificate of deposit rate plus 2%. Interest on the principal
balance outstanding on the $150,000 line of credit accrues at the prime
rate of interest plus 1/2%. Any outstanding balances existing under
either of the foregoing lines of credit are secured by accounts receivable
or certificates of deposit and other cash accounts. As of December 31,
1996, $40,000 was outstanding on the $150,000 line of credit and $272,000
was outstanding on the $275,000 line of credit. The Company is in
material compliance with all debt covenants under its lines of credit.
Parke Home Health Care currently has two lines of credit for $100,000
and $50,000. Interest accrues on each of the lines at the prime rate of
interest plus 1%. Any outstanding balances existing under either of the
foregoing lines of credit are secured by substantially all of Parke's
assets. As of December 31, 1996, there were no amounts outstanding under
either of Parke's lines of credit. Parke Home Health Care is in material
compliance with all debt covenants under its lines of credit.
The aggregate availability under all of the Company's various lines
of credit was approximately $263,000 at December 31, 1996.
Also, in connection with the Parke acquisition, the Company financed
50% of the acquisition with two 30 month term loans payable to the
previous owners of Parke. The aggregate outstanding principal balance on
the notes at December 31, 1996 was approximately $269,000. Interest
accrues on the Parke loans at the rate of 8% per annum and is secured by
the outstanding stock of Parke purchased by the Company.
The Company's net income has been and will continue to be impacted
significantly by the non-cash charge of amortization expense of goodwill
and intangible assets of the Company. At December 31, 1996, net goodwill
and intangible assets of the Company were approximately $4.9 million.
The amortization of goodwill and intangible assets in the future will
decrease net income or increase any net loss.
The Company intends to implement a management information system for
its entire operation in fiscal 1997. The cost of the system is estimated
at $1.0 million of which approximately $423,000 will be expended during
the remainder of fiscal 1997. During the second and third quarters, the
Company invested $127,000 in the system. Management intends to finance
the system either with a lease over a period of 12-60 months or with the
use of existing cash. The Company has entered into a contract totaling
$142,000 for partial installation. Twenty five percent of the contract
was due at execution and the remaining balance is payable in four
installments with the last payment due on March 1, 1997.
The Company is aggressively pursuing additional business and has
successfully replaced certain contracts lost during prior discussions
involving the potential sale of the Company. In addition, the Company
received accreditation with commendation from the Joint Commission on
Accreditation of Healthcare Organizations (JCAHO) in its Pennsylvania home
health operations. It is undertaking cost containment measures and
evaluating alternative financing arrangements to meet both its short and
long-term cash requirements. There can be no assurance that such
containment measures will be successful or that additional financing will
be available. As a result, it is uncertain at this time whether the
Company will have sufficient capital to meet its working capital needs
during the immediate 12 month period.
Part II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On January 31, 1996, Robin Fernhoff, individually and on behalf of
all others similarly situated filed a class action in the United States
District Court for the Middle District of Florida, Tampa Division against
NuMED Home Health Care, Inc., Jugal K. Taneja and A.T. Brod & Co., Inc.
(Case No. 96-200-CIV-T-21C). The plaintiff alleged that failure to
disclose the net capital position of A.T. Brod & Co. Inc., caused the
disclosure in the Company's prospectus dated February 8, 1995, to be
materially misleading. The plaintiff also alleged violations of Section
11 and 12(2) of the Securities Act of 1933, 15 U.S.C. Sections 77k and 77l
respectively, and sought damages on behalf of the class.
In response to the complaint, the Company filed its answer and a
corresponding motion to dismiss. On July 25, 1996, the United States
District Court for the Middle District of Florida, Tampa Division, granted
the Company's motion dismissing the complaint in its entirety. In
response, the Plaintiff filed a subsequent motion to alter or amend the
judgment granting the Company's motion to dismiss. The Court has not yet
ruled on this motion. Management believes that the action is frivolous
and without merit and intends to vigorously contest any restated
allegations.
Items 2 through 5. -not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a). Exhibits. There are no exhibits filed with this report
(b). Reports on Form 8-K. The Company did not file any reports on
Form 8-K during the quarter ended December 31, 1996.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NuMED Home Health Care, Inc.
Date: February 7, 1997 By: /s/Jugal K. Taneja
Jugal K. Taneja
Chairman of the Board,
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,581,073
<SECURITIES> 0
<RECEIVABLES> 4,702,975
<ALLOWANCES> 0
<INVENTORY> 25,126
<CURRENT-ASSETS> 7,532,020
<PP&E> 511,835
<DEPRECIATION> (185,411)
<TOTAL-ASSETS> 12,915,228
<CURRENT-LIABILITIES> 3,666,276
<BONDS> 527,199
0
0
<COMMON> 5,010
<OTHER-SE> 8,716,743
<TOTAL-LIABILITY-AND-EQUITY> 12,915,228
<SALES> 0
<TOTAL-REVENUES> 18,875,323
<CGS> 0
<TOTAL-COSTS> 14,678,754
<OTHER-EXPENSES> 5,497,611
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,301,042)
<INCOME-TAX> 31,183
<INCOME-CONTINUING> (1,332,225)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,332,225)
<EPS-PRIMARY> (.27)
<EPS-DILUTED> 0
</TABLE>
