<PAGE> 1
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to .
-------------- ------------
Commission file number 0-24110
------------------.
NEWCARE HEALTH CORPORATION
--------------------------
(Exact name of small business issuer as specified in its charter)
CAMELBACK CAPITAL, INC.
-----------------------
(Former name of registrant)
NEVADA
------
(State or other jurisdiction of incorporation or organization)
86-0594391
----------
(IRS Employer Identification Number)
3600 OAK MANOR LANE, BLDG. 4, LARGO, FL 34644
---------------------------------------------
(Address of principal executive offices)
(813) 586-4262
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
Number of shares outstanding of issuer's common stock as of May 13, 1996 was
10,667,524.
<PAGE> 2
NewCare Health Corporation
Index
<TABLE>
<CAPTION>
Part I. Financial Information PAGE
<S> <C> <C>
Item 1: Financial Statements:
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Operations 2
Condensed Consolidated Statements of Cash Flows 3
Notes to the Condensed Consolidated Financial Statements 4
Item 2:
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information:
Item 1:
Legal Proceedings 11
Item 2:
Changes in Securities 11
Item 3:
Defaults Upon Senior Securities 11
Item 4:
Submission of Matters to a Vote of Security Holders 11
Item 5:
Other Information 11
Item 6:
Exhibits and Reports on Form 8-K. 11
Signature 12
Index to Exhibits 13
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. NEWCARE HEALTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
---- ----
(UNAUDITED)
ASSETS
<S> <C> <C>
Cash $ 210,122 $ 201,639
Accounts receivable, net 5,229,384 5,169,231
Inventory 1,335,099 1,169,404
Prepaid expenses 307,006 211,038
----------- -----------
TOTAL CURRENT ASSETS 7,081,611 6,751,312
Property and equipment, net 24,907,502 25,070,716
Excess of costs over net assets of
businesses acquired and other assets, net 8,203,155 8,158,675
----------- -----------
TOTAL ASSETS $40,192,268 $39,980,703
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Bank overdraft $ 318,376 $ -0-
Current portion of long-term debt 9,188,330 9,214,389
Notes payable 1,525,000 1,525,000
Line-of-credit 226,491 166,491
Accounts payable 3,301,857 3,234,521
Accrued liabilities 1,971,328 1,891,878
Deferred revenues 62,526 61,246
Estimated third-party settlements 57,500 58,000
----------- -----------
TOTAL CURRENT LIABILITIES 16,651,408 16,151,525
Estimated third-party settlements 200,980 198,639
Long-term debt 15,886,454 16,260,560
----------- -----------
TOTAL LIABILITIES 32,738,842 32,610,724
Capital stock authorized, $0.02 Par,
50,000,000 shares; issued and outstanding
1996 and 1995 - 10,667,524 213,350 213,350
Paid-in capital 9,055,724 9,055,724
Accumulated deficit (1,765,648) (1,849,095)
Less treasury stock (50,000) (50,000)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 7,453,426 7,369,979
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $40,192,268 $39,980,703
=========== ===========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
1
<PAGE> 4
NEWCARE HEALTH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
NET REVENUES $11,410,041 $8,034,332
COSTS AND EXPENSES:
Compensation and related 5,334,141 3,258,200
Operating and administrative 5,087,396 3,998,498
Interest 486,173 322,666
Depreciation and amortization 398,884 337,978
----------- ----------
TOTAL COSTS AND EXPENSES 11,306,594 7,917,342
----------- ----------
INCOME BEFORE TAXES 103,447 116,990
Provision for income tax (20,000) -0-
----------- ----------
NET INCOME $ 83,447 $ 116,990
=========== ==========
EARNINGS PER SHARE $ 0.01 $ 0.01
=========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,667,524 9,920,488
=========== ==========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
<PAGE> 5
NEWCARE HEALTH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
---- ----
<S> <C> <C>
Net income $ 83,447 $ 116,990
Depreciation and amortization 398,884 337,978
Provision for bad debt 115,498 69,901
Changes in operating assets and liabilities:
Accounts receivable (60,153) (54,801)
Prepaid expenses (95,968) 66,030
Inventory (165,695) (64,561)
Third-party settlements 1,841 (31,511)
Accounts payable 67,336 (440,948)
Other assets and liabilities, net (177,514) (444,156)
-------- --------
Net cash provided (used) by operating activities 167,676 (445,078)
INVESTING ACTIVITIES:
Purchase of property and equipment (126,269) (121,653)
-------- --------
Net cash used by investing activities (126,269) (121,653)
FINANCING ACTIVITIES:
Payments on long-term debt (900,165) (341,840)
Use of bank overdrafts 318,376
Loan proceeds 560,000
Loan costs (11,135) (2,271)
-------- --------
Net cash used by financing activities (32,924) (344,111)
-------- --------
Net increase (decrease) in cash 8,483 (910,842)
Cash at beginning of period 201,639 926,157
-------- --------
Cash at end of period $210,122 $ 15,315
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE> 6
NEWCARE HEALTH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated balance sheet as of March 31,
1996, unaudited condensed consolidated statements of operations for the three
months ended March 31, 1996 and 1995, and unaudited condensed consolidated
statements of cash flows for the three months ended March 31, 1996 and 1995
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all of the
information and note disclosures required by generally accepted accounting
principles for complete financial statements. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's annual report on Form 10-KSB for the
year ended December 31, 1995. In the opinion of management, the accompanying
unaudited condensed consolidated financial statements include all adjustments
necessary for a fair presentation of condensed consolidated financial position
and results of operations and cash flows for the periods presented. The
results of operations for the three months ended March 31, 1996 are not
necessarily indicative of the operating results for the full year.
B. EARNINGS PER SHARE
Earnings per share are based on the weighted average number of shares of common
stock outstanding. Common share equivalents are not considered in the
calculation of per share data when their inclusion would be anti-dilutive.
C. ACQUISITIONS
On May 22, 1995, the Company acquired Cimerron Health Care, Inc. and Affiliates
("Cimerron"), which operates five skilled nursing facilities in Georgia.
On September 15, 1995, NewCare acquired through a lease Padgett Nursing Home, a
100-bed skilled nursing facility located in Tampa, Florida.
D. ACCOUNTS RECEIVABLE
As of March 31, 1996, the Company's accounts receivable was $5,229,384,
including an allowance for doubtful accounts of $674,674.
E. INVENTORY
Inventory primarily consists of healthcare supplies and is stated at the lower
of cost (FIFO) or market value.
F. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. The cost of additions and
substantial betterment of property and equipment is capitalized. The cost of
maintenance and repairs of property and equipment is charged to operating
expenses. Depreciation is provided using the straight-line method to allocate
the cost of property and equipment over estimated lives, generally ranging from
3 to 40 years.
4
<PAGE> 7
G. OTHER ASSETS
Other assets consist primarily of excess of consideration paid over the fair
value of net assets acquired in business combinations (Goodwill),
organizational costs, deferred financing costs and certain other deferred
expenses. Other assets are amortized using the straight-line method over the
periods of expected benefit, generally 5 to 40 years.
H. CURRENT PORTION OF LONG-TERM DEBT
The Company's current portion of long-term debt primarily consists of
$4,273,000 relating to the Oak Manor facility's first mortgage, $420,000 for
Oak Manor's second mortgage principal payments, $1,525,000 in short-term notes
payable related to the Cimerron acquisition, and $2,667,000 notes payable
related to the acquisition of Spectrum.
I. LINE-OF-CREDIT
Spectrum has a revolving line-of-credit agreement with a financial institution
which provides, among other things, for monthly interest payments at the
financial institution's base rate plus one percent. Borrowings under the
line-of-credit are limited to a maximum of $250,000, of which $226,491 was
borrowed at March 31, 1996. Borrowings under the credit line are due on demand
and are collateralized by Spectrum's accounts receivable, inventory, equipment
and intangible assets.
J. NOTES PAYABLE
The Spectrum purchase notes payable of $4,000,000.00 are due in three (3) equal
payments of $1,333,333 on January 3, 1996 and September 1, 1996 and 1997 with
interest of 8 7/8% paid monthly. The first payment, due January 3, 1996 has
not been made and the Company is in negotiations with the Spectrum sellers to
restructure this debt. The monthly interest payments and principal payments
due September 1, 1996 and 1997 remain unchanged. At this time, no agreement
has been reached and there can be no certainty that an agreement will be
reached to renew or restructure the Spectrum notes. Management believes that
the acquisition note holders will agree to restructure the Company's obligation
on terms favorable to the Company. In the event the Company is unsuccessful in
reaching an agreement to restructure this debt, this could have a material
adverse impact upon the Company. The majority note holder is a Director and
significant shareholder of the Company.
Notes were issued to a group of individuals for $1,525,000 to fund the purchase
of the Cimerron Group in Georgia in May of 1995. The notes carry interest at
12% payable monthly, and was due on April 30, 1996 and has not been paid by the
Company. A second mortgage on the Dania Nursing Home was given to the lenders
as security for the debt. Refinancing of Dania is expected to be completed in
June 1996 and the proceeds will be used to pay these notes. No firm commitment
has been signed for this loan and there can be no certainty that such a
commitment will be received and closed. The note holders are all shareholders
of the Company and two (2) are Directors of the Company.
K. INCOME TAXES
At December 31, 1995, the Company had net operating loss carryforwards of
approximately $67,000 available to offset future taxable income through 2009.
Provisions for income taxes for the three months ended March 31, 1996 were
estimated at $20,000. As of December 31, 1994, the Company had a net operating
loss carryforward. Accordingly, there was no provision for income taxes for
the three months ended March 31, 1995.
5
<PAGE> 8
L. CAPITAL STOCK
The Company issued no shares during the three month period ended March 31,
1996.
M. STOCK OPTIONS AND WARRANTS
In connection with the acquisition of a skilled nursing home in 1990, an option
was issued to the seller to acquire up to 200,000 shares of common stock of
American Nursing Homes, Inc. (a subsidiary of NewCare), at an exercise price of
$1.00 per share. This option remains exercisable through December 1998.
During 1993, an option to acquire up to 33,500 shares of the Company's common
stock at an exercise price of $2.24 per share was granted to an officer of the
Company. This option remains exercisable through June 1998.
During September 1994, options were granted to the Company's President and
Executive Vice-President to acquire up to 50,000 shares, each, of the Company's
common stock at an exercise price of $4.75 per share. These options remain
exercisable through September 1999.
In connection with the acquisition of Cimerron on May 22, 1995, the Company
issued one (1) warrant for every $10.00 of short-term note. The Company issued
152,500 warrants which are exercisable for one (1) share each of the Company's
common stock until June 1, 1998 with a stock purchase price of $3.50.
N. RELATED PARTY TRANSACTIONS
In 1995, Karen Hagan, wife of Robert Hagan, a director of the Company, loaned
$495,000 for real property in Georgia and provided refinancing for the Suncoast
Nursing Home with a $600,000 mortgage. All notes bear interest at 10% and are
interest only through various dates in 1997 and 1998.
O. LEASE TERMINATION
In February 1996, the Company was notified by the lessor of Bay to Bay Nursing
Home that its lease, which expires May 31, 1996, will not be renewed. The loss
of this 75-bed skilled nursing facility is not expected to have an adverse
effect on the Company's results of operations. For the three months ended
March 31, 1996 this facility had an operating loss of $50,373 as compared to an
operating profit of $58,261 for the same period in 1995. Revenues and
occupancy percentages for the same periods decreased from $686,000 to $585,000
and 95.5% to 86.5% respectively.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Structure of Operations
NewCare Health Corporation currently operates through its three subsidiaries:
NewCare, Inc., Spectrum Health Services, Inc. (acquired September 1, 1994) and
Cimerron Health Care, Inc. (acquired May 22, 1995). The Company operates
eleven (11) skilled nursing facilities, six (6) in Florida by NewCare, Inc. and
five (5) in Georgia by Cimerron, and has medical supply and pharmaceutical
sales and service operations in Florida, Georgia, Kansas and Texas through
Spectrum.
Events during the Three Months Ended March 31, 1996
The Registrant had net income of $83,447 for the three months ended March 31,
1996 compared to a net income of $116,990 for the same period in 1995.
On February 27, 1996, the Company announced that it had signed definitive
agreements to be acquired through merger with Retirement Care Associates, Inc.
(NYSE-RCA) for 2,650,000 shares of RCA common stock.
On April 12, 1996, the Company and Retirement Care Associates, Inc. agreed to
cancel plans of a merger between the corporations. Retirement Care cited the
Company's fourth quarter operating results as the reason for the merger
withdrawal and indicated that the combination of the two firms would be dilutive
to Retirement Care's earnings.
On January 17, 1996, Medicare Part B Financial Services notified Spectrum
Health Services, Inc. that it was claiming a recapture of overpayments to
Spectrum from the years 1990 through 1992 in the amount of $364,391.41.
Interest is accruing at a rate 13.87% per annum. Spectrum has appealed this
demand and is going through a series of appeals and an administrative hearing
in an attempt to have this reversed. Spectrum has agreed to a series of
payments of $22,540 per month during the appeal period. If a favorable ruling
is received by Spectrum on its appeal, all monies paid in will be returned to
Spectrum. It is the opinion of Management that the recapture should be
reversed on appeal. There is no certainty that a favorable ruling will be
received. If the ruling is unfavorable to Spectrum, the entire recapture
amount plus interest must be repaid to Medicare Part B Financial Services.
Occupancy Levels and Payor Mix
The average occupancy level, based on licensed beds, for the Company's skilled
nursing facilities during the three months ended March 31, 1996 and 1995 was
90% and 94% respectively. Excluding Central Tampa Nursing facility, which was
leased in September 1995, occupancy for 1996 was 93%. As contemplated before
Central Tampa was leased, a plan for renovating and adding to patient care
areas for this facility is in process. These enhancements are expected to
enhance Central Tampa's occupancy. The financing of this project is to be
provided by the lessor.
The Company's nursing facility revenues, exclusive of assisted living, medical
supply and pharmaceutical revenues, are divided into the following classes for
payor mix:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
Medicaid 67% 60%
Medicare 12% 18%
Private pay 18% 16%
Other Payors 3% 6%
--- ---
100% 100%
</TABLE>
7
<PAGE> 10
Medicaid is a major payor for the Company and it continues to have a
significant impact in the long-term care industry. The Company received 79% of
its 1996 nursing facility revenues from Medicaid and Medicare, compared to 78%
for the same period in 1995. Future changes in these major payor programs
could have a negative impact on the Company's operations and ultimately affect
the Company's profitability.
Results of Operations
The Registrant had net income of $83,447 and $116,990 for the three months
ended March 31, 1996 and 1995 respectively. The Company's operating revenues
and expenses have increased primarily due to its acquisition of Cimerron in May
1995, which was accounted for under the purchase method of accounting.
Net Revenues Revenues of the Registrant were $11,410,041 and $8,034,332 for
the three months ended March 31, 1996 and 1995, increasing $3,375,709 or 42.0%.
The revenues were approximately comprised of: NewCare, Inc. with $4,700,000
(41%), Spectrum with $3,890,000 (34%) and Cimerron with $2,820,000 (25%).
Operating Expenses Operating expenses for the three months ended March 31,
1996 and 1995 were 99.1% and 98.5% of revenues or $11,306,594 and $7,917,342,
respectively. Operating expenses consist of compensation and related expenses,
operating and administrative expenses, interest expenses, and depreciation and
amortization expenses. Compensation and related expenses and operating and
administrative expenses are the primary operating expenses of the Company. The
operating and administrative expenses decreased, as a percentage of revenues,
from 49.8% to 44.6% for the three month periods presented. Cimerron (acquired
in May 1995), operates five (5) nursing homes in Georgia. NewCare added one
nursing home in September 1995. The addition of these labor intensive nursing
facilities primarily account for the percentage decrease in operating and and
administrative expenses mentioned above and the increase in compensation
related expenses below. As a result, the Company's compensation and related
expenses have increased from 40.6% to 46.7% of revenues for the three month
periods presented. The mix of operations, nursing home operations by NewCare
and Cimerron, and medical and pharmaceutical sales and services by Spectrum,
has significant affects on the composition of the Company's operating expenses.
Depreciation and amortization expenses for the three months ended March 31,
1996 and 1995 were $398,884 and $337,978, respectively. The change in the
depreciation and amortization expenses was primarily due to the acquisitions of
Cimerron in June 1995, as it resulted in increases in the Company's
consolidated assets. Approximately $95,000 of depreciation and amortization
expense for 1996 is related to the Cimerron acquisition. The assets of the
Company are depreciated or amortized over their expected useful lives, ranging
from 3 to 40 years.
Interest expenses were $486,173 for the three months ended March 31, 1996 and
$322,666 for the same period in 1995. Approximately $217,000 of interest
expense for 1996 is related to the Cimerron acquisition.
The Company's operating results may be affected by issues facing the long-term
care industry, such as occupancy levels, nursing personnel availability,
governmental reimbursement programs (Medicaid and Medicare), and the possible
reforms that may be taken by the federal government. The Registrant's ability
to manage costs, including compensation and related expenses, and payor mix can
significantly affect its future profitability.
Seasonality The Company's revenues may fluctuate from quarter to quarter.
Fluctuations are the result of seasonal occupancy changes, the number of
calendar days per quarter and the timing of Medicaid and Medicare reimbursement
rate changes for individual nursing facilities.
8
<PAGE> 11
Inflation and Labor Supply Nursing facilities are labor intensive and can be
affected by changes in wages and the supply of labor. Inflationary increases
in wages can have adverse affects on the Registrant's skilled nursing
operations in the short term until Medicaid and Medicare cost reports can be
filed for appropriate reimbursement rate adjustments for individual nursing
facilities. The supply of labor can have possible adverse affects on the
Company's net results of operations.
Capital Resources and Liquidity
The Company had net income of $83,447 for the three months ended March 31,
1996, with a net increase in cash of $8,483. Cash flows increased $167,676
from Operating Activities; decreased $126,269 from Investing Activities; and
decreased $32,924 from Financing Activities, resulting in an ending Cash
balance of $210,122 on March 31, 1996.
Net Cash provided by Operating Activities was $167,676 for the three months
ended March 31, 1996. The Company's accounts payable increase of $67,336 was
offset by an increase in accounts receivable of $60,153. Inventories increased
by $165,695 during the three month period ended March 31, 1996. Depreciation
and amortization was $398,884 and the provision for bad debts was $115,498.
The change in other assets and liabilities, net decreased cash by $177,514.
Net cash used by Investing Activities was $126,269 for the three months ended
March 31, 1996 which consisted of purchases of property and equipment.
For the three months ended March 31, 1996, Financing Activities used net cash
of $32,924. The Registrant made payments of $900,165 on long-term debt that
were primarily for scheduled payments on the Company's mortgage debt and
equipment loans. Included in these payments was a $500,000 note payable which
matured in February 1996 and was refinanced with a loan from Retirement Care
Associates, Inc. (RCA). In addition the Company received $60,000 from its
line of credit and incurred bank overdrafts of $318,376.
Management believes that the existing cash and cash from operations will be
sufficient to fund its continued operations, excluding debt service for the
notes payable related to the acquisitions of Cimerron and Spectrum and the Oak
Manor facility's first mortgage note due in September 1996 of $4,273,000.
Current cash reserves are not adequate to fund the Company's obligations on the
notes payable for the Spectrum acquisition, with three equal payments of
$1,333,333 due on January 3, 1996 and September 1, 1996 and 1997. The Spectrum
notes are primarily payable to a significant shareholder and Director of the
Company. In addition, the Company will not be able to fund from current cash
reserves its debt obligation of $1,525,000 in short-term notes related to the
Cimerron acquisition, which are payable to shareholders of the Company. If
needed, management believes that the Spectrum and Cimerron notes can be
modified to extend the maturities of such notes to the long-term, thus reducing
the Company's requirements on current cash reserves. There can be no certainty
such modification can be completed. Management is negotiating with several
lenders to refinance the Dania Nursing Home. The short term notes related to
the Cimerron acquisition will be paid from this refinancing which Management
expects to close in June 1996. No firm commitment has been secured by the
Company at this time for this refinancing.
The Company's working capital (current assets less current liabilities) as of
March 31, 1996 was a negative $9,569,797. Current liabilities of $16,651,408
consisted primarily of current portion of long-term debt of $9,188,330, notes
payable of $1,525,000 and accounts payable of $3,301,857. Current assets
include cash of $210,122, accounts receivable, net of $5,229,384 and inventory
of $1,335,099.
9
<PAGE> 12
Plan of Operations
As discussed above in "Capital Resources and Liquidity," management believes
that existing cash and cash from operations will be sufficient to fund its
operations through the next twelve (12) months. In addition, the Company must
make three equal principal payments of $1,333,333, on January 3, 1996 and
September 1, 1996 and 1997, as a portion of the purchase price for the Spectrum
acquisition, and has $1,525,000 in short-term notes payable on April 30, 1996
related to the acquisition of Cimerron. If needed, management believes that
the Spectrum and Cimerron notes can be modified to extend the maturities of
such notes to the long-term, thus reducing the Company's requirements on
current cash reserves. NewCare anticipates expanding operations through
acquisitions and contemplates that it may seek funding through some combination
of sales of stock, debt financing or sale-leaseback financing in order to pay
certain principal requirements, potential acquisition costs and to supply
working capital needs for any new operations. The Company has not made
arrangements for any such funding and no assurances can be given that such
funding will be available on acceptable terms. Management is currently working
with several lenders for the refinancing of its facilities to generate the
capital needed to fund certain debt obligations and have capital available for
expansion. Management is attempting to complete said financing by June 1996.
No commitments have been received to date by Management for said refinancing
and there is no certainty that such refinancing can, in fact, be obtained.
Other Matters
The Company currently has no benefits that extend to former or inactive
employees such as disability, layoff, death, or other benefits other than sick
time benefits which accrue ratably based upon hours worked with certain maximum
accrual amounts. These benefits, however, do not vest nor do they carry-over
from year to year. Accordingly, the provisions of the Financial Accounting
Standards Board Statement of Financial Accounting Standard ("FAS") no.106,
"Employers' Accounting For Post-Retirement Benefits other than Pensions," do
not apply. The Company currently does not provide any post-employment
benefits, therefore FAS no. 112 does not apply.
10
<PAGE> 13
PART II. OTHER INFORMATION
Item 1: LEGAL PROCEEDINGS
None
Item 2: CHANGES IN SECURITIES
None
Item 3: DEFAULTS UPON SENIOR SECURITIES
None
Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5: OTHER INFORMATION
On May 6, 1996, the Company filed a Registration Statement on Form
SB-1 to register 714,286 shares of the Company's Common Stock on
behalf of a selling shareholder, Karen Hagan. The shares were
registered pursuant to a contract obligation related to the Cimerron
acquisition. The Company will not receive any proceeds from the sale
of shares of Common Stock by the selling shareholder, Karen Hagan.
The SB-1 has not become effective and the Company anticipates filing
an amendment or amendments to the Form SB-1. Such amendments will
delay the effective date of the Registration Statement.
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 Articles of Incorporation are incorporated herein by reference to
Form 10-SB which was filed with the Commission on May 12, 1994.
3.2 By-Laws, as amended are incorporated herein by reference to Form
10-QSB which was filed with the Commission November 9, 1995.
13.1 The Company's annual report is incorporated herein by reference
to Form 10-KSB which was filed with the Commission on March 29, 1996.
27 Financial Data Schedule (for SEC use only)
99.1 Press release on the Company's signing of definitive agreements
to merge with Retirement Care Associates, Inc., dated February 27,
1996.
99.2 Press release on the Company's results of operations for the
year ended December 31, 1995, dated April 1, 1996.
99.3 Press release on the cancellation of the proposed merger of
the Company and Retirement Care Associates, Inc., dated April 12, 1996.
99.4 Press release on the Company's results of operations for the
three months ended March 31, 1996, dated May 10, 1996.
(b) Reports on Form 8-K:
The Company filed a current report on Form 8-K on March 4, 1996, exhibiting the
Agreement and Plan of Merger and two (2) press releases pertaining to
Retirement Care Associates, Inc.
11
<PAGE> 14
SIGNATURE
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.
NewCare Health Corporation
By: /s/ Henry H. Sherrill, Jr.
--------------------------
Henry H. Sherrill, Jr., Principal
Financial and Chief Accounting Officer
and Authorized Signatory for the
Registrant
Date: May 13, 1996
12
<PAGE> 15
INDEX TO EXHIBITS PAGE
----
Attached Exhibits
27 Financial Data Schedule (for SEC use only)
99.1 Press release on the Company's signing of definitive 14
agreements to merge with Retirement Care Associates, Inc.,
dated February 27, 1996.
99.2 Press release on the Company's results of operations for 15
the year ended December 31, 1995, dated April 1, 1996.
99.3 Press release on the cancellation of the proposed merger of 16
the Company and Retirement Care Associates, Inc., dated
April 12, 1996.
99.4 Press release on the Company's results of operations for the 17
three months ended March 31, 1996, dated May 10, 1996.
Incorporated by Reference
3.1 Articles of Incorporation are incorporated herein by reference to
Form 10-SB which was filed with the Commission on May 12, 1994.
3.2 By-laws, as amended are incorporated herein by reference to
Form 10-QSB which was filed with the Commission November 9, 1995.
13.1 The Company's annual report is incorporated herein by reference to
Form 10-KSB which was filed with the Commission on March 29, 1996.
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 210,122
<SECURITIES> 0
<RECEIVABLES> 5,904,058
<ALLOWANCES> 674,674
<INVENTORY> 1,335,099
<CURRENT-ASSETS> 7,081,611
<PP&E> 28,161,078
<DEPRECIATION> 3,253,576
<TOTAL-ASSETS> 40,192,268
<CURRENT-LIABILITIES> 16,651,408
<BONDS> 0
0
0
<COMMON> 213,350
<OTHER-SE> 7,240,076
<TOTAL-LIABILITY-AND-EQUITY> 40,192,268
<SALES> 11,410,041
<TOTAL-REVENUES> 11,410,041
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,306,594
<LOSS-PROVISION> 115,498
<INTEREST-EXPENSE> 486,173
<INCOME-PRETAX> 103,447
<INCOME-TAX> 20,000
<INCOME-CONTINUING> 83,447
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83,447
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
<PAGE> 1
FOR IMMEDIATE RELEASE
CONTACT: Todd Avery Wooten - NewCare Health Corporation - (813) 586-4262
- --------------------------------------------------------------------------------
NEWCARE HEALTH CORPORATION (NWCA)
3600 Oak Manor Lane, Largo, FL 34644
NEWS RELEASE
- --------------------------------------------------------------------------------
February 27, 1996
NEWCARE ANNOUNCES SIGNING OF DEFINITIVE AGREEMENTS
NewCare Health Corporation, a Largo, Florida company, announced that it has
signed definitive agreements to merge with Retirement Care Associates, Inc.
(NYSE-RCA) for 2,650,000 shares of RCA common stock.
14
<PAGE> 1
FOR IMMEDIATE RELEASE
CONTACT: Todd Avery Wooten - NewCare Health Corporation - (800) 409-4262
- -------------------------------------------------------------------------------
NEWCARE HEALTH CORPORATION (NWCA)
3600 Oak Manor Lane, Largo, FL 34644
NEWS RELEASE
- --------------------------------------------------------------------------------
April 1, 1996
NEWCARE ANNOUNCES RESULTS OF OPERATIONS
NewCare Health Corporation of Largo, Florida reports a new loss of $172,222 for
the twelve months ended December 31, 1995 as compared to a loss of $919,616 for
the same period in 1994. Revenues were $39.7 million compared to $20.9 million
for the same period last year.
Years Ended
December 31,
1995 1994
---- ----
Revenues $39,770,460 $20,922,846
New Income (Loss) $ (172,222) $ (919,616)
Share Earnings (Loss) $ (.02) $ (.13)
15
<PAGE> 1
FOR IMMEDIATE RELEASE
CONTACT: Todd Avery Wooten - NewCare Health Corporation - (800) 409-4262
- --------------------------------------------------------------------------------
NEWCARE HEALTH CORPORATION (NWCA)
3600 Oak Manor Lane, Largo, FL 34644
NEWS RELEASE
- --------------------------------------------------------------------------------
April 12, 1996
NEWCARE AND RETIREMENT CARE END MERGER PROPOSAL
NewCare Health Corporation (NASDAQ-NWCA) of Largo, Florida and Retirement Care
Associates, Inc. (NYSE-RCA) of Atlanta, Georgia have mutually agreed to end the
proposed merger of the two companies.
16
<PAGE> 1
FOR IMMEDIATE RELEASE
CONTACT: Robert W. Bell, Sr. - NewCare Health Corporation - (800) 409-4262
- --------------------------------------------------------------------------------
NEWCARE HEALTH CORPORATION (NWCA)
3600 Oak Manor Lane, Largo, FL 34644
NEWS RELEASE
- --------------------------------------------------------------------------------
May 10, 1996
NEWCARE ANNOUNCES 1ST QTR INCOME
NewCare Health Corporation of Largo, Florida reports earnings of $83,447 for the
three months ended March 31, 1996 as compared to earnings of $116,990 for the
same period in 1995. Income was $0.1 per share for both periods. Revenues were
$11.4 million compared to $8.0 million for the same period last year.
Three Months Ended
March 31,
1996 1995
---- ----
Revenues $11,410,041 $8,034,332
Net Income $ 83,447 $ 116,990
Share Earnings $ .01 $ .01
17
