FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
- 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 0-24542
CONTINENTAL CHOICE CARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
NEW JERSEY 22-3276736
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
25-B VREELAND ROAD
FLORHAM PARK, NEW JERSEY 07932
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, Including Area Code (201) 593-0500
N.A.
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report
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 (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 No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court.
Yes _____ No _____
Applicable only to corporate issuers.
Shares outstanding as of November 12, 1997 3,237,500 shares of common
stock, no par value.
Transitional Small Business Disclosure Format: Yes ____ No X
<PAGE>
CONTINENTAL CHOICE CARE, INC. AND SUBSIDIARIES
FORM 10-QSB
SEPTEMBER 30, 1997
PART I. FINANCIAL INFORMATION
The comparative consolidated balance sheets and statements of
operations and cash flows for Continental Choice Care, Inc. and Subsidiaries
(the "Company") are presented with management's discussion and analysis of
material changes in operations on the pages which follow.
The consolidated financial statements and accompanying financial
information as of September 30, 1997 and for the three-month and nine-month
periods ended September 30, 1997 and 1996 are unaudited but, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments and accruals) which the Company considers necessary for a fair
presentation of the financial position of the Company at such dates and the
operating results and cash flows for those periods. Results for the interim
periods are not necessarily indicative of results for the entire year. The
interim consolidated financial statements and the related notes should be read
in conjunction with the notes to the consolidated financial statements of the
Company as included in its Form 10-KSB filed with the Securities and Exchange
Commission.
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<PAGE>
CONTINENTAL CHOICE CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS SEPT. 30, 1997 DEC. 31, 1996
--------------- -------------
(unaudited)
<S> <C> <C>
Current Assets:
Cash including restricted cash of $200,000................................... $ 863,404 $1,418,054
Accounts receivable, less allowance for doubtful accounts of $646,000
at September 30, 1997 and $517,000 at December 31, 1996.................. 893,882 989,363
Current portion of amounts due from consulting customers..................... 2,848,494 -0-
Supplies inventories......................................................... 38,432 52,028
Deferred tax asset........................................................... 125,000 125,000
Other current assets......................................................... 63,760 129,163
------------- ------------
Total current assets ..................................................... 4,832,972 2,713,608
Amounts due from affiliates.................................................. 186,864 779,273
Amounts due from consulting customers, less current portion.................. 1,510,183 2,872,468
Property and equipment, at cost, less accumulated depreciation............... 582,821 691,237
Other assets................................................................. 35,694 57,907
-------------- -------------
$ 7,148,534 $7,114,493
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable............................................................. $1,797,869 $1,408,939
Accrued expenses ............................................................ 942,416 611,344
Current portion of notes payable and obligations under
capital leases............................................................ 39,974 57,643
Income taxes payable......................................................... -0- 48,939
----------- -----------
Total current liabilities ................................................ 2,780,259 2,126,865
----------- -----------
Notes payable and obligations under capital leases,
less current portion...................................................... 34,338 64,319
------------- -------------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, 5,000,000 shares authorized, none issued or outstanding..... --- ---
Common stock, no par value, 10,000,000 shares authorized
3,237,500 shares issued and outstanding
at September 30, 1997 and December 31, 1996............................... 5,464,061 5,464,061
Paid-in capital.............................................................. 500 500
Accumulated deficit.......................................................... (1,130,624) (541,252)
------------ ------------
Total stockholders' equity................................................... 4,333,937 4,923,309
------------ -----------
$7,148,534 $7,114,493
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.
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<PAGE>
CONTINENTAL CHOICE CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, 1997 SEPT. 30, 1996 SEPT. 30, 1997 SEPT. 30, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Patient Revenues:
Equipment and supplies...................... $ 690,828 $ 753,958 $ 2,121,449 $2,317,871
Services.................................... 948,707 418,673 1,976,234 1,939,530
----------- ------------ ---------- -----------
Total net patient revenues............ 1,639,535 1,172,631 4,097,683 4,257,401
---------- ---------- ----------- -----------
Costs and Expenses:
Cost of goods sold.......................... 310,617 346,866 949,115 962,726
Cost of services............................ 161,392 196,786 501,495 655,724
Provision for doubtful accounts............. 12,027 56,400 149,698 298,018
Selling, general and administrative......... 994,094 1,205,540 2,973,812 3,739,592
Depreciation and amortization............... 39,074 33,040 135,573 99,228
Interest income, net........................ (6,552) (20,803) (34,548) (54,603)
------------ ----------- ---------- -----------
Total costs and expenses...... 1,510,652 1,817,829 4,675,145 5,700,685
---------- --------- ---------- ---------
Income (loss) from operations.................. 128,883 (645,198) (577,462) (1,443,284)
Gain on sale of former New Jersey in-center
facility and certain other assets........... -0- -0- -0- 1,749,080
------------ ----------- ---------- -----------
Income (loss) before income taxes.............. 128,883 (645,198) (577,462) 305,796
Provision for income taxes..................... 7,148 2,550 11,910 124,280
--------------- -------------- --------------- ----------
Net income (loss)............. $ 121,735 $(647,748) $ (589,372) $ 181,516
============ ========== ============== =========
Net income (loss) per share.................... $ .04 $ (.20) $ (.18) $ .06
============ ========== ============== =========
Weighted average number of shares
outstanding................................ 3,237,500 3,237,500 3,237,500 3,237,500
============ =========== ============= =========
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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<PAGE>
CONTINENTAL CHOICE CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPT. 30, 1997 SEPT. 30, 1996
-------------- --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) .................................................... $(589,372) $ 181,516
Adjustments to reconcile net income (loss) to net cash
used in operating activities --
Depreciation and amortization................................... 135,573 99,228
Provision for doubtful accounts................................. 149,698 298,018
Gain on sale of former New Jersey in-center facility............ -0- (1,749,080)
Decrease (increase) in accounts receivable.......................... (54,217) 657,008
Decrease in supplies inventories.................................... 13,596 6,247
Decrease (increase) in other assets................................. 87,616 (299,374)
Increase in amounts due from affiliates ............................ (29,996) (10,000)
Increase in amounts receivable from consulting customers............ (498,585) -0-
Increase (decrease) in accounts payable............................. 388,930 (382,786)
Increase (decrease) in accrued expenses............................. 331,072 (35,352)
Increase (decrease) in income taxes payable......................... (48,939) 101,111
---------- ------------
Net cash used in operating activities........................... (114,624) (1,133,464)
--------- ------------
Cash Flows From Investing Activities:
Proceeds from sale of former New Jersey in-center facility
and certain other assets ............................................. -0- 2,010,330
Amounts loaned or advanced to consulting customers.................... (812,300) (930,424)
Amounts repaid by consulting customers................................ 447,081 800,317
Purchases of property and equipment................................... (27,157) (167,591)
---------- -----------
Net cash provided from (used in) investing activities........... (392,376) 1,712,632
--------- ----------
Cash Flows From Financing Activities:
Principal payments on notes payable and obligations under
capital leases........................................................ (47,650) (47,887)
----------- -------------
Net increase (decrease) in cash.......................................... (554,650) 531,281
Cash, beginning of year.................................................. 1,418,054 1,341,955
---------- ------------
Cash, end of period...................................................... $ 863,404 $1,873,236
========== ==========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for income taxes....................... $ 24,730 $ 60,455
=========== ===========
Cash paid during the period for interest........................... $ 449 $ 354
============= =============
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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<PAGE>
CONTINENTAL CHOICE CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) EARNINGS PER SHARE:
On March 31, 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings Per Share" ("Statement 128"). Statement 128 is effective for
fiscal years ending after December 15, 1997, and, when adopted, will require
restatement of prior years' earnings per share. If the Company had adopted
Statement 128 for the period ending September 30, 1997, there would have been no
effect on net loss per common share, on either the basic or diluted basis.
(2) SALE OF ASSETS:
Effective October 8, 1997, the Company, other than its Renal
Management, Inc. subsidiary, completed the sale of substantially all of its
dialysis related assets to IHS of New York, Inc., a New York corporation
("IHS"). In addition, Alpha Administration Corp.("Alpha"), the operator of the
South Bronx Kidney Center, and Continental Dialysis Center of the Bronx, Inc.
("CDBI") sold substantially all of their respective assets to IHS. Prior to the
sale, the Company provided consulting and administrative services to Alpha and
CDBI. The assets of the Upper Manhattan Dialysis Center, Inc. ("UMDC"), a New
York corporation to which the Company also provides consulting and
administrative services, were not included in the sale transaction (the "Sale").
The aggregate price paid by IHS at the closing of the Sale was $5,120,000, of
which $500,000 was placed in an escrow to secure certain contingent obligations
of the sellers and approximately $430,000 was placed in a separate escrow to
secure the payment of certain outstanding obligations of the sellers to third
parties. The sellers retained substantially all of their cash, accounts
receivable and liabilities. The Company and IHS entered into a consulting
agreement pursuant to which the Company will provide certain consulting services
to IHS over the three-year term of the agreement in consideration of an
aggregate of $1,000,000 payable by IHS to the Company over the term of the
agreement. The Company also entered into a Non- Competition Agreement with IHS
pursuant to which the Company, CDBI, Alpha and certain officers and directors of
each of them agreed not to engage in certain activities in competition with IHS
in certain specified areas for a period of five years following October 8, 1997.
The $5,120,000 purchase price was allocated $2,620,000 to the Company,
$900,000 to Alpha and $1,600,000 to CDBI. Substantially all amounts allocated to
Alpha and CDBI, plus all accounts receivable, cash and cash equivalents retained
by Alpha and CDBI in the Sale will be used to pay outstanding liabilities of
those entities, including substantially all amounts in accrued and current
consulting and administrative fees and other amounts due to the Company. Certain
executive officers of the Company who own common stock of Alpha and CDBI
("Certain Executive Officers") previously assigned to the Company all proceeds,
if any, which they might
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<PAGE>
otherwise receive upon the sale of those entities. The Company has agreed to
indemnify the Certain Executive Officers to the extent of any taxes and certain
other liabilities resulting from the transaction contemplated by the assignment.
The following unaudited pro forma condensed consolidated statement of
operations for the nine months ended September 30, 1997 has been prepared to
illustrate the estimated effects of the Sale, as if the Sale was effective as of
January 1, 1997. This statement includes historical revenues and costs of the
Company adjusted for the effects of the Sale, including first nine months
consulting fee to be received from purchaser under contractual obligation. This
statement does not purport to represent what the Company's results of operations
would actually have been if the Sale had, in fact, occurred on such date, nor
does it purport to project the results of operations for any future period.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
Total revenues-- Consulting fees.................. $250,000
----------
Costs and Expenses:
Selling, general and administrative.......... 1,774,432
Depreciation and amortization................ 25,226
Interest income, net......................... (33,461)
----------
Total costs and expenses.......................... (1,766,197)
----------
Loss from operations.............................. (1,516,197)
Provision for income taxes........................ 575
Net loss.......................................... $(1,516,772)
----------
Net loss per share................................ $ (.47)
===========
(3) RELATED PARTY TRANSACTIONS:
As of September 30, 1997 and December 31, 1996, $1,298,930 and
$827,705, respectively, was due from Alpha, and is included in amounts due from
consulting customers in the accompanying consolidated balance sheets.
The $827,705 due from Alpha as of December 31, 1996 includes $205,300
due from the Bronx Facility as of that date, which amount was assumed by
Alpha upon its acquisition of the Bronx Facility.
The Company advanced funds to CDBI for the construction and
start-up operations of a new in-center dialysis facility in the Bronx, New York.
At September 30, 1997 and December 31, 1996, $1,549,564 and $1,176,985,
respectively, was due from CDBI and has been included in amounts due from
consulting customers. The amounts are net of certain transactions not recorded
due to realization uncertainties. CDBI commenced operations in January 1997.
The Company, as well as Certain Executive Officers, guaranteed certain
bank credit facilities of UMDC of which an aggregate of $802,000 was outstanding
as of September 30, 1997. Under the terms of the "Revolver," which was renewed
and will mature on December 31, 1997, certain amounts due the Company are
subordinated to UMDC's obligations to the bank. In
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<PAGE>
connection with the Sale and in connection with the failure of UMDC to maintain
certain debt coverage ratios contained in the loan agreements relating to the
bank credit facilities, the bank has demanded $221,000 in additional collateral.
No assurance can be given that UMDC will have sufficient funds to provide the
additional collateral or that the Company or Certain Executive Officers will not
have to provide some or all of such additional collateral to the bank. No
assurance can be given that the bank will not call upon the guarantees of the
Company or Certain Executive Officers. In addition, amounts due the Company from
UMDC may not be paid if UMDC is in default under the terms of the credit
facilities. In 1994, the Company loaned certain principals of UMDC (who are not
affiliated with the Company) $450,000 and UMDC an aggregate of $304,524 at a
designated prime rate less 1%. Certain of these loans are due on demand and
certain of these loans which were due on various stated maturity dates have been
extended by the Company to become due on November 30, 1995. These notes remain
outstanding as of September 30, 1997. The Company has advised the obligors under
the promissory notes that the notes are in default. The Company is currently
determining whether to extend the due dates further. No assurance can be given
that the Company will extend some or all of the promissory notes between the
Company and UMDC or its shareholders. In addition, the Company provided
equipment and supplies to UMDC aggregating $946,110 through September 30, 1997
at no margin. These amounts and the previously mentioned loans to UMDC and its
principals, are included in amounts due from consulting customers in the
accompanying consolidated balance sheets. The total amounts due from UMDC and
its principals of $1,510,183 and $1,490,183 as of September 30, 1997 and
December 31, 1996, respectively, are net of certain transactions not recorded
due to realization uncertainties. The Company is the guarantor of a lease for
UMDC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1997 Compared With Nine Months Ended
September 30, 1996.
NET PATIENT REVENUES
Net patient revenues of the Company were derived from providing
equipment and supplies to patients (52% for the first nine months of 1997 and
54% for 1996) and services (48% for 1997 and 46% for 1996), which services
consisted of consulting services, contract nursing services and dialysis
treatments provided by the Company's former New Jersey in-center facility and
Training Facility. In 1997 and 1996, 27% and 30%, respectively, of the Company's
cash receipts were received under the Medicare program, while approximately 73%
and 70%, respectively, of cash
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<PAGE>
receipts were received from commercial insurance companies or contracted
entities and Medicaid programs.
Net patient revenues for the nine month periods were $4,097,683 in 1997
as compared with $4,257,401 in 1996. The decrease of $159,718 is attributable to
a decrease of $274,711 due to the sale of the Company's former New Jersey
in-center facility and its former southern New Jersey equipment and supply
business in March 1996, as well as to reductions in New York sales of equipment
and supplies revenues of $175,091. In addition, there were no net patient
revenues related to the Company's Renal Management, Inc. subsidiary in 1997 as
compared to $336,604 in 1996. These reductions in revenues were partially offset
by an increase of $169,304 from the Company's Connecticut operation and $640,000
in consulting fees pertaining to the Bronx Facility.
For the nine months ended September 30, 1997, the Company recognized
$180,000 in current year consulting fees from the Bronx Facility as well as
$480,000 in such fees not recognized in prior years due to realization
uncertainties, compared to $0 for the nine months ended September 30, 1996.
Effective August 1994 and January 1997, the Company entered into agreements to
provide administrative and consulting services to UMDC and CDBI for monthly fees
of $33,333 and $20,000, respectively. The agreements with UMDC and CDBI provide
for reimbursement to the Company for services rendered and for its direct costs
of equipment and supplies. The UMDC agreement was automatically renewed in 1996,
extends for a period of two years and is automatically renewable for successive
two year periods unless either party decides to terminate. Neither the UMDC nor
the CDBI consulting fee has been recorded in 1997 or 1996 due to realization
uncertainties.
COST OF GOODS SOLD/COST OF SERVICES
Cost of goods sold was $949,115 or 45% of net patient revenues
attributable to equipment and supplies in the nine months ended September 30,
1997 as compared with $962,726 or 42% of net patient revenues attributable to
equipment and supplies in 1996. This increase in cost of goods sold as a
percentage of revenues is primarily due to price increases for equipment and
supplies.
The cost of services totaled $501,495 or 25% of net patient revenues
attributable to services in 1997, as compared with $655,724 or 34% of net
patient revenues in 1996. This decrease in cost of services as a percentage of
revenues is due to the recognition of prior year Bronx Facility consulting fees.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses totaled $2,973,812 in the
nine months ended September 30, 1997 as compared with $3,739,592 for the 1996
period. The net decrease of $765,780 is primarily comprised of a decrease in
salaries, rent and other office expenses due to the sale of the Company's former
Cape May Court House, New Jersey in-center facility in March
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1996, as well as a decrease in costs associated with the Company's Renal
Management, Inc. subsidiary.
PROVISION FOR DOUBTFUL ACCOUNTS
The provision for doubtful accounts was $149,698 for the first nine
months of 1997 as compared with $298,018 in 1996 due primarily to a decrease in
patient revenues. The provision for doubtful accounts is recorded to the extent
deemed to be adequate to absorb possible losses resulting from uncollectible
receivables. The Company reviews each individual account in detail to determine
the collectibility of each item in the account. A reserve is established to
reflect any amounts considered doubtful of collection. The calculation of
doubtful accounts is based on the Company's knowledge of specific payors, past
experience with the account under review and historic experience with accounts
having characteristics similar to the one being reviewed. Due to the unusually
long third-party reimbursement process, especially as to secondary and tertiary
payors and self-pay patients, the Company often does not write off receivables
for a year or more.
As of September 30, 1997, the allowance for doubtful accounts was
$646,000 as compared with $517,000 at December 31, 1996. As a percentage of
receivables outstanding, such allowance was 42% at September 30, 1997, and 34%
at December 31, 1996. Management continues to evaluate the collectibility of all
accounts and believes the stated allowance as of September 30, 1997 is adequate
to absorb possible losses resulting from uncollectible receivables. As of
September 30, 1997, $453,000 or 51% of net receivables were greater than 90 days
past due.
DEPRECIATION AND AMORTIZATION EXPENSE
Depreciation and amortization expense in the first nine months of 1997
totaled $135,573, an increase of $36,345 from the first nine months of 1996. The
increase is due to new dialysis equipment placed in service in mid-1996.
NET INTEREST INCOME
Net interest income was $34,548 in the nine months ended September 30,
1997 and $54,603 in 1996. Interest expense on the Company's debt obligations in
both periods was more than offset by interest earned on the remaining proceeds
from the 1996 sale of assets and rights in the Cape May Court House, New Jersey
area.
PROVISION FOR INCOME TAXES
The Federal income tax provision was $0 in 1997 and $30,000 in 1996.
The state income tax provision was $11,910 in 1997 and $94,280 in 1996.
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FORWARD LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-QSB
constitute "forward-looking statements" and involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements of the Company to be materially different from any future events,
acts, results, performance or achievements expressed or implied by such
forward-looking statements. Certain known factors are noted in this report,
including, without limitation, those set forth under the headings "Related Party
Transactions," "Sale of Assets," and Management's Discussion and Analysis of
Results of Operations and Financial Condition," as well as in the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 1996. Words
such as "expects," anticipates," "intends," "plans," "believes," "seeks, and
"estimates," are intended to identify forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions which are difficult to predict. The Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
LIQUIDITY AND CAPITAL RESOURCES
The Company experienced a negative net cash flow of $554,650 during the
first nine months of 1997 comprised of $114,624 used in operating activities,
$392,376 used in investing activities, and $47,650 used in financing activities.
Through September 30, 1997, the Company had advanced loans to certain
principals of UMDC (who are not affiliated with the Company) aggregating
$450,000 and loans to UMDC in the amount of $622,448, and had provided $946,110
of equipment and supplies to UMDC for which the Company had not yet been
reimbursed. The loans bear interest at prime less 1% and are not expected to be
repaid before December 31, 1997. The Company, Certain Executive Officers and the
shareholders of UMDC have guaranteed UMDC's credit facilities aggregating
$2,400,000, of which approximately $802,000 is outstanding as of September 30,
1997.
As of September 30, 1997, $1,298,930 was due from Alpha and the Bronx
Facility. Total repayments made by the Bronx Facility in 1997 were $377,887.
Additional 1997 advances to the Bronx Facility totaled $350,526, primarily for
supplies and equipment.
The Company has also advanced funds to CDBI for the construction and
start-up costs of a new in-center dialysis facility in the Bronx, New York. At
September 30, 1997, $1,549,564 was due from CDBI. Repayments made by CDBI in
1997 totaled $69,194, while $441,774 was advanced to CDBI.
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<PAGE>
The Company has also guaranteed a lease for UMDC for its in-center
facility in New York. The lease has a 15-year term at an annual rental of
$145,000.
The Company intends to utilize the proceeds from the Sale (see Note 2)
to acquire or merge with one or more entities, either within or outside of the
healthcare industry. In the interim, the proceeds will be invested in short to
medium term U.S. Government obligations. The Company has taken steps to reduce
its corporate payroll and expenses until such time as an increase is warranted.
The Company expects that the cash flow from the Sale and the collection of
accounts receivable will be sufficient to fund its operations at least through
1998. After such time, the Company may require additional funds. The Company has
no current commitments or arrangements for additional financing and there can be
no assurance that additional financings, through bank borrowings, debt or equity
financings or otherwise, will be available on acceptable terms, if at all.
PART II.
Item 6. Exhibits and Reports on Form 8-K.
(a) No Exhibits accompany this Form 10-QSB
(b) A report on Form 8-K was filed by the Company on October 15,
1997 concerning the completion of the Sale.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONTINENTAL CHOICE CARE, INC.
Registrant
Date: November 12, 1997 By: /s/ Steven L. Trenk
-------------------
STEVEN L. TRENK
President and Chief Operating
Officer and Director
Date: November 12, 1997 By: /s/ Ronald A. Lefkon
--------------------
RONALD A. LEFKON
Chief Financial Officer
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONTINENTAL CHOICE CARE, INC.
Registrant
Date: November 12, 1997 By: _________________________
STEVEN L. TRENK
President and Chief Operating
Officer and Director
Date: November 12, 1997 By: __________________________
RONALD A. LEFKON
Chief Financial Officer
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 863,404
<SECURITIES> 0
<RECEIVABLES> 1,539,882
<ALLOWANCES> (646,000)
<INVENTORY> 38,432
<CURRENT-ASSETS> 4,832,972
<PP&E> 1,142,118
<DEPRECIATION> (559,297)
<TOTAL-ASSETS> 7,148,543
<CURRENT-LIABILITIES> 2,780,259
<BONDS> 0
0
0
<COMMON> 5,464,061
<OTHER-SE> (1,130,124)
<TOTAL-LIABILITY-AND-EQUITY> 7,148,534
<SALES> 1,639,535
<TOTAL-REVENUES> 1,639,535
<CGS> 472,009
<TOTAL-COSTS> 472,009
<OTHER-EXPENSES> 994,094
<LOSS-PROVISION> 12,027
<INTEREST-EXPENSE> (6,552)
<INCOME-PRETAX> 128,883
<INCOME-TAX> 7,148
<INCOME-CONTINUING> 121,735
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 121,735
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
