<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-19600
-------
CORE, INC.
----------------
(Exact name of registrant as specified in its charter)
Pursuant to Rule 12b-15, the undersigned registrant hereby amends the
following items, financial statements, exhibits or other portions of its
Quarterly Report on Form 10-Q for the period ended March 31, 1996, as set forth
in the pages attached hereto:
Item 1. Financial Statements. Certain of the financial statements set
forth in Item 1 have been revised to condense certain presentations and
to correct transcription errors contained in the previously filed Form
10-Q.
Schedule 11.1. This schedule has been revised to include additional
information.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORE, INC.
Date: May 24, 1996 By: /s/ William E. Nixon
----------------------------------
William E. Nixon
Executive Vice President, Chief
Financial Officer, Treasurer and
Clerk (Principal Financial Officer)
<PAGE>
Part I
Item 1. Financial Statements
CORE, INC.
Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
------------ -----------
<S> <C>(Note 1) <C>(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 1,005,807 $ 18,332
Cash pledged as collateral 106,000 45,500
Customer advances 286,550 286,550
Investments available-for-sale 1,531,610 437,009
Accounts receivable, net of allowance for
doubtful accounts of $170,337 2,987,356 4,301,040
Notes receivable from officers 35,507 36,169
Notes receivable from affiliates 1,041,450
Prepaid expenses and other current assets 499,921 495,743
----------- -----------
Total current assets 6,452,751 6,661,793
Property and equipment, net 3,155,234 3,527,849
Cash pledged as collateral 192,000 192,000
Deposits and other assets 178,402 298,479
Goodwill, net of accumulated amortization of
$27,000 in 1995 and $34,600 at March 31, 1996 1,929,885 1,918,780
Intangibles, net 286,927 266,781
----------- -----------
Total assets $12,195,199 $12,865,682
=========== ===========
</TABLE>
See accompanying notes
<PAGE>
CORE, INC.
Consolidated Condensed Balance Sheets - Continued
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
----------- -----------
(Note 1) (Unaudited)
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 846,156 $ 1,252,284
Accrued expenses 1,525,623 1,416,499
Accrued payroll 184,795 455,343
Accrued restructuring costs 130,498 59,698
Deferred income taxes 68,316 68,316
Current portion of notes payable 155,994 91,995
Current portion of obligations to
former shareholders 298,509 384,484
Current portion of capital lease payments 91,159 82,894
----------- -----------
Total current liabilities 3,301,050 3,811,513
Long-term obligations to former shareholders,
net of current portion 745,106 366,824
Capital lease obligations, net of current portion 71,969 59,889
Deferred rent, net of current portion 279,317 264,622
Deferred income taxes 149,500 149,500
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value, authorized
500,000 shares; no shares issued and outstanding
Common stock, $0.10 par value per share;
authorized 10,000,000 shares; issued and
outstanding 4,794,403 and 4,815,781 shares at
December 31, 1995 and March 31, 1996,
respectively 479,440 481,573
Additional paid-in capital 18,052,547 18,104,713
Deferred compensation (51,120) (51,520)
Cumulative unrealized gain on investments
available-for-sale 30,975 6,778
Accumulated deficit (10,863,585) (10,328,620)
----------- -----------
Total stockholders' equity 7,648,257 8,213,334
----------- -----------
Total liabilities and stockholders' equity $12,195,199 $12,865,682
=========== ===========
</TABLE>
See accompanying notes
<PAGE>
CORE, INC.
Consolidated Consensed Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1995 1996
------------------------------
<S> <C> <C>
Revenues $ 4,728,653 $6,583,562
Cost of services 3,116,938 3,938,910
------------- --------------
Gross profit 1,611,715 2,644,652
Operating expenses:
General and administrative 1,190,608 1,403,074
Sales and marketing 382,033 470,234
Restructuring costs 557,515
Merger costs and expenses 427,950
Depreciation and amortization 232,562 277,911
------------- --------------
Total operating expenses 2,790,668 2,151,219
Income (loss) from operations (1,178,953) 493,433
Other income (expense):
Interest income 77,483 45,366
Interest expense (51,339) (18,451)
Realized gain (loss) on sale of investments
available-for-sale (1,663) 14,617
Other income 2,760
------------- --------------
27,241 41,532
------------- --------------
Net income (loss) $(1,151,712) $534,965
============= ===============
Net income (loss) per common share $(0.24) $0.10
============= ===============
Weighted average number of common shares
outstanding 4,739,930 5,532,000
============= ===============
</TABLE>
See accompanying notes.
<PAGE>
CORE, INC.
Consolidated Consensed Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1995 1996
--------------------------------
<S> <C> <C>
Operating activities
Net income (loss) $(1,151,712) $534,965
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 250,963 300,006
Provision for doubtful accounts 15,000
Realized gain on sale of investments
available-for-sale (14,617)
Decrease in obligations to
former shareholders (134,000)
Changes in operating assets and liabilities:
Increase in accounts receivable (187,085) (1,313,684)
Decrease in prepaid expenses and other
current assets 145,679 4,178
Decrease in cash overdraft (301,367)
Increase in accounts payable and accrued
expenses 581,843 482,057
--------------- --------------
Net cash used in operating activities (646,679) (141,095)
Investing activities
Additions to property and equipment (186,719) (634,875)
Additions to goodwill (6,495)
Decrease (increase) in cash pledged as collateral (167,098) 60,500
Increase to notes receivable from officers (662)
Advances to affiliates (1,041,450)
Increase in deposits and other assets (120,077)
Purchases of investments available-for-sale (3,989,302)
Sales of investments available-for-sale 7,879,679 1,085,021
--------------- --------------
Net cash provided by (used in) investing activities 3,536,560 (658,038)
</TABLE>
See accompanying notes
<PAGE>
CORE, INC.
Consolidated Consensed Statements of Cash Flows - Continued (unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1995 1996
--------------------------------
<S> <C> <C>
Financing activities
Net repayments under revolving line of credit (1,200,000)
Payments on officer's notes payable (200,000)
Payments on notes payable (92,454) (63,999)
Payments on capital lease obligations (21,175) (20,345)
Payments on obligations to former
shareholders (158,307)
Issuance of common stock upon exercise of stock
options and warrants 54,309
--------------- -------------
Net cash used in financing activities (1,513,629) (188,342)
--------------- -------------
Net increase (decrease) in cash and cash equivalents 1,376,252 (987,475)
Cash and cash equivalents at beginning of period -- 1,005,807
--------------- -------------
Cash and cash equivalents at end of period $1,376,252 $18,332
=============== =============
Supplemental disclosure of cash flow information:
Interest paid $54,354 $45,603
=============== =============
</TABLE>
See accompanying notes.
<PAGE>
CORE, INC.
Notes to Consolidated Condensed Financial Statements (Unaudited)
March 31, 1996
Note 1 - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission, but do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. The balance sheet at December 31, 1995 has been derived
from the audited financial statements of CORE, INC. (the "Company") at that
date.
In the opinion of management, all adjustments, (consisting of only normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the consolidated
financial statements for the year ended December 31, 1995 contained in the
Company's annual report filed on Form 10-K (File #0-19600) with the Securities
and Exchange Commission on April 1, 1996.
Note 2 - Investments
At March 31, 1996, the Company had no securities that qualified as trading or
held-to-maturity. The following is a summary of available-for-sale securities
at March 31, 1996:
<TABLE>
<CAPTION>
Amortized Unrealized Estimated
Cost Gain Fair Value
---------------------------------
<S> <C> <C> <C>
U.S. Treasury Securities $430,231 $6,778 $437,009
</TABLE>
For the three months ended March 31, 1996, the Company sold available-for-sale
securities with a fair value on the date of sale of $1,085,021. A realized gain
of $14,617 on these sales was recognized in the three months ended March 31,
1996. The net unrealized gain of $6,778 on these securities has been included
as a separate component of stockholders' equity as of March 31, 1996.
<PAGE>
Note 3 - Impairment of Long-Lived Assets
In accordance with FASB Statement No. 121, Accounting for the Impairment of
Long-Lived Assets to be Disposed Of, the Company records impairment losses on
long-lived assets used in operations when events and circumstances indicate that
the assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of those assets.
During the quarter ended March 31, 1996, events and circumstances indicated that
approximately $120,000 of intangible assets related to the Integrated Behavioral
Health division might be impaired. However, the Company's estimate of
undiscounted cash flows indicated that such carrying amounts were expected to be
recovered. Nonetheless, it is reasonably possible that the estimate of
undiscounted cash flows may change in the near term resulting in the need to
write-down those assets to fair value.
<PAGE>
Exhibit 11.1 to Form 10-Q
- ------------
COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED MARCH 31,
CORE, INC.
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Primary:
Average shares outstanding 4,807,000 4,739,930
Shares issuable on assumed exercise of
dilutive options and warrants - based
on treasury stock method using average
market price 725,000
--------------- --------------
Totals 5,532,000 4,739,930
=============== ==============
Net Income (loss) $ 534,965 $(1,151,712)
=============== ==============
Net Income (loss) per share $ 0.10 $ (0.24)
=============== ==============
Fully diluted:
Average shares outstanding 4,807,000 4,739,930
Shares issuable on assumed exercise
of dilutive options and warrants -
based on treasury stock method
using quarter-end market price
which is greater than average
market price 818,000
--------------- -------------
Totals 5,625,000 4,739,930
=============== =============
Net income (loss) $ 534,965 $(1,151,712)
=============== =============
Net income (loss) per share $ 0.10 $ (0.24)
=============== =============
</TABLE>
