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.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
_________________________________________________________________
For Quarter Ended Commission File Number
March 31, 1996 33-29002-NY
Retirement Management Associates, Inc.
(Exact name of Small Business Issuer as specified in its charter)
Texas 75-226441
(State of other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
3770 Tansy Street, San Diego, CA. 92121
(Address of principal executive offices) (Zip Code)
(619)453-8900
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be
filed by section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 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.
Yes x or No___
As of May 10, 1996, the registrant had 142,300 shares of
Common Stock, par value $.001 per share, issued and outstanding.
Transitional Small Business Disclosure Format - (Check One):
Yes or No X
Part I - Financial Information Page
Consolidated Balance Sheets as of March 31, 1996 1
(Unaudited) and December 31, 1996 (Audited)
Consolidated Statements of Operations for three 2
months ended March 31, 1996 (Unaudited) and
March 31, 1995 (Unaudited)
Consolidated Statements of Cash Flows for three 3
months ended March 31, 1996 (Unaudited) and
March 31, 1995(Unaudited)
Notes to Consolidated Financial Statements 4-6
Item 2-Management's Discussion and Analysis 7
of Plan of Action
Part II - Other Information
Exhibits and Reports on Form 8-K 8
Signatures 9
RETIREMENT MANAGEMENT ASSOCIATES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------
ASSETS
MARCH 31,1996 DECEMBER 31, 1995
------- -------
CURRENT ASSETS
CASH $ 37 $ 172
NOTE RECEIVABLE & ACCRUED INTEREST 59,300 56,712
---------- -------
TOTAL CURRENT ASSETS 59,337 56,884
---------- -------
PROPERTY & EQUIPMENT, AT COST
AUTO 24,000 24,000
OFFICE EQUIPMENT 13,457 13,457
LESS: ACCUM DEPR (24,903) (24,296)
---------- -------
TOTAL PROPERTY & EQUIPMEN 12,554 13,161
---------- -------
OTHER ASSETS
NOTE RECEIVABLE 50,662 54,388
ORGANIZATION COSTS 14,119 14,119
INVESTMENTS, ON THE EQUITY METHOD 3,651 3,651
---------- -------
TOTAL OTHER ASSETS 68,432 72,158
---------- -------
$ 140,323 $ 142,203
========== =======
LIABILITIES STOCKHOLDERS' EQUITY (CAPITAL DEFICIT)
LIABILITIES
ACCOUNTS PAYABLE $ 12,041 $ 4,541
ACCRUED INTEREST 20,933 19,434
DUE TO AFFILIATES 79,991 72,113
---------- -------
TOTAL CURRENT LIABILITIES 112,965 96,088
NOTE PAYABLE 100,000 100,000
---------- -------
TOTAL LIABILITIES 212,965 196,088
---------- -------
STOCKHOLDERS' EQUITY (CAPITAL DEFICIT)
COMMON STOCK 142 142
PAID IN CAPITAL 111,870 111,870
RETAINED EARNINGS (165,897) (165,897)
CURRENT EARNINGS (18,757) 0
---------- -------
TOTAL STOCKHOLDERS' EQUITY (CAPITAL DEFIC (72,642) (53,885)
---------- -------
$ 140,323 $ 142,203
========== =======
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RETIREMENT MANAGEMENT ASSOCIATES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
----- ------
(UNAUDITED) (UNAUDITED)
SOURCES OF FUNDS:
PROCEEDS OF NOTE RECEIVABLE 3,725 $ 11,750
-------- --------
3,725 11,750
USES OF FUNDS:
GENERAL & ADMINISTRATIVE 11,363 11,620
DECREASE (INCREASE) IN A/P (7,500) 0
-------- --------
3,863 11,620
NET INCREASE (DECREASE)
IN CASH $ (138) $ 130
======== ========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RETIREMENT MANAGEMENT ASSOCIATES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
------ --------
(UNAUDITED) (UNAUDITED)
REVENUES
-----------
MANAGEMENT FEES 45,630 $ 49,473
INTEREST INCOME 2,588 3,347
-------- --------
48,218 52,820
EXPENSES
-----------
GENERAL & ADMINISTRATIVE 64,868 65,245
INTEREST 1,500 1,500
DEPRECIATION 607 756
-------- --------
66,975 67,501
NET LOSS (18,757) $ (14,681)
======== ========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RETIREMENT MANAGEMENT ASSOCIATES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF FINANCIAL STATEMENT PREPARATION
The accompanying financial information of Retirement Management
Associates, Inc. ("the Company") and subsidiary, should be read in
conjunction with the Notes to Consolidated Financial Statements contained in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1995. The Company, in its opinion, has included all normal recurring
adjustments which are considered necessary for a fair presentation of the
Company's financial position and results of operations for the periods
presented.
Results of operations for the interim periods covered by this
report may not necessarily be indicative of results of operations for the
full fiscal year ending December 31, 1996.
NOTE 2: GENERAL AND ADMINISTRATIVE EXPENSES
For the nine months ended March 31, 1996, general and administrative
expenses consisted of management service expenses of $53,507, officers'
consulting fees and officers' benefits of $9,401, rent of $1,500, utilities
of $270, and miscellaneous expenses of $190.
NOTE 3: RELATED PARTY TRANSACTIONS
Lease
At March 31, 1996, the Company leased office space from a Partnership, of
which a former principal shareholder and director of the Company is an
officer of the current general partnership.
Note Receivable
On July 1, 1994, The Company received $250,000 in consulting fees in the form of
a note receivable from The Cherry Hills Club. The note accrues interest at 10%
per annum due on or before June 30, 1996. At March 31, 1996, $100,662 remains
outstanding, plus accrued interest of $9,300.
Property and Equipment
During the year ended December 31, 1991 the Company paid an affiliate $12,350
for office equipment and $24,000 to Lawyers Holding Corp., the president of
which is a former shareholder and director of the company, for an automobile.
RETIREMENT MANAGEMENT ASSOCIATES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATION FINANCIAL STATEMENTS
(CONTINUED)
Notes Payable
The Company has a $100,000 unsecured note payable to Harvey Schuster, a founder
and former director of the company. The note accrues interest at 6% per annum
due on or before May 1, 1994 and extended to June 30, 1998. At March 31, 1996
$100,000 remains outstanding, plus accrued interest of $20,933.
The Cherry Hills Club is expected to provide the necessary cash, as may be
required from time to time, to fund any cash requirements of The Company in
order to sustain the operation of The Company through December 31, 1996.
The Company had a $100,000 unsecured note payable to The Cherry Hills Club.
The note accrued interest at 6% per annum due on or before May 1, 1994 and
extended to May 31, 1995. On September 30, 1994, the outstanding principal
balance on this note of $92,950 plus accrued interest of $6,513 was offset
against a note receivable from The Cherry Hills Club.
Investments
On August 31, 1991, the Company purchased from an affiliate 100% of the
outstanding stock of Congregate Management Associates, Inc. (CMA) for $9,536.
CMA assets consist of an investment in a limited partnership, in the amount of
$7,536 and other assets in the amount of $2,000. Congregate Management
Associates is a management company specializing in the management of
congregate care centers. Effective September 1, 1991 CMA began providing
management service to the Cherry Hills Club, an affiliate.
On June 1, 1994, the Company earned $100,000 in management fees form
Congregate Care Centers of America, Inc. In lieu of cash received, the Company
received a 4% limited partnership interest in Cherry Hills Club Partners,
Ltd (CHCP). The $100,000 is not in excess of historic stock to the related
parties. Due to the related party nature of this investment and the Company's
relative control influence on CHCP, this investment is being accounted for under
the equity method of accounting.
As of December 31, 1994, the Company has been allocated cumulative losses of
$132,287, $32,287 of which exceeds the Company's limited partnership
investment of $100,000 and have therefore not been recognized in the statements
of operations for 1995 and 1994. Such unrecognized losses will be offset
against future allocations of income prior to the Company recognizing any
income from this investment.
The Company anticipates positive cash flow from the management of the
Cherry Hills Club in 1996 and is seeking similar management contracts from
other entities. However, there can be no assurance of achieving the
expected cash flow levels or that management will be able to execute
similar contracts.
Item 2. Management's Discussion and Analysis of
Plan of Operation
The Company generated management fees of $194,584 in 1995 compared to
$290,422 in 1994 which represents a decrease of $95,838 primarily resulting
from an additional $100,000 earned in 1994 for reaching a stabilized
occupancy goal for the congregate care center. General and administrative
fees, consisting primarily of payroll and payroll related expenses, totalled
$267,432 in 1995 compared to $271,265 in 1994. Payroll expenses are payed on
behalf of the company by the Cherry Hills Club. The Company received
management fees totalling $45,830 for the three month period ended March 31,
1996 compared to $49,473 for the three month period ended March 31,1995.
At March 31, 1996, $79,991 is due to the Cherry Hills Club for reimbursement of
payroll and payroll related expenses. Net cash used in operations for the
period from March 14, 1989 (date ofinception) to March 31, 1996 aggregated
$219,539.
As a development stage enterprise, the Company has yet to generate
positive cash flow from operating activities and does not expect to generate
positive cash flow until at least the second half of 1996. The Company is
pursuing opportunities to manage additional congregate care centers during
1996, which management expects to consummate by September 1996. At this time
there can be no assurance that a transaction will be consummated. Should
the Company be unable to secure additional cash flows from the management of
additional congregate care centers, the Company intends to fund its 1996
cash requirements as may become necessary, from time to time, from
payments on a note receivable due from the Cherry Hills Club, and from the
management of cash disbursements made to related parties.
Item 6 - Exhibits and Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended March 31, 1996.
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.
Date: August 21, 1996
RETIREMENT MANAGEMENT ASSOCIATES, INC.
By: /s/ Harvey Schuster______________
Harvey Schuster
President and Principal Executive Officer
/s/ John W. Howard_____________
John W. Howard
Treasurer and Chief Financial Officer
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.
Date: August 21, 1996
RETIREMENT MANAGEMENT ASSOCIATES, INC.
By: _______________________________
Harvey Schuster
President and Principal Executive Officer
_______________________________
John W. Howard
Treasurer and Chief Financial Officer
