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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1998
Commission File No. 0-24110
NEWCARE HEALTH CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 86-0594391
- ------------------------------ ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
6000 Lake Forrest Drive, Suite 200, Atlanta, Georgia 30328
------------------------------------------------------------------
(Address of Principal Executive Offices including zip code)
(404) 255-7500
------------------------------
(Registrant's telephone number)
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 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 ] No [ ]
There were 12,128,525 shares of the Registrant's Common Stock outstanding as
of June 30, 1998.
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NEWCARE HEALTH CORPORATION
FORM 10-Q
INDEX
-----
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Consolidated Balance Sheets as of June 30,
1998 and December 31, 1997 3
Consolidated Statements of Operations for
the Three Months Ended June 30, 1998 and 1997 5
Consolidated Statements of Operations for
the Six Months Ended June 30, 1998 and 1997 6
Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 1998 and 1997 7
Notes to Consolidated Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II. OTHER INFORMATION 13
ITEM 1. LEGAL PROCEEDINGS 13
ITEM 2. CHANGES IN SECURITIES 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
2
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NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
June 30, December 31,
1998 1997
--------- ------------
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ -- $ 2,297,599
Accounts receivable, net 8,924,556 4,569,319
Management fees receivable 977,660 --
Other receivables 91,465 160,113
Notes receivable - related parties 1,089,000 1,039,500
Due from related party 4,200,906 1,201,063
Marketable securities (available for
sale) and other investments 11,472,912 10,083,000
Restricted investments, current 551,370 469,119
Inventory 175,188 132,680
Deferred taxes 1,987,204 412,204
Acquisition deposits 6,750,000 --
Prepaid expenses and other
current assets 1,123,712 873,130
----------- -----------
Total current assets 37,343,973 21,237,727
Property and equipment, net 48,645,792 42,972,686
Deferred loan costs, net 2,086,020 999,057
Goodwill, net 1,664,100 1,057,096
Organizational costs, net 59,298 31,596
Deposits 876,087 926,511
Restricted investments,
less current portion 1,229,236 1,543,686
----------- -----------
Total assets $91,904,506 $68,768,359
=========== ===========
See Accompanying Notes
3
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NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
June 30, December 31,
1998 1997
---------- ----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft $ 409,273 $ --
Current maturities of long-term debt 811,432 1,380,735
Notes payable 11,250,000 --
Borrowings under line of credit 4,924,761 3,189,755
Brokerage investment margin payable 6,840,865 6,740,653
Accounts payable 7,581,246 6,163,548
Accrued expenses 4,909,147 3,288,527
Due to related parties 300,000 2,776,177
----------- -----------
Total current liabilities 37,026,724 23,539,395
Long-term debt 44,897,696 39,754,836
Minority interest in subsidiary 13,900 13,900
Commitments and contingencies
Convertible debentures 5,000,000 --
Shareholders' equity
Common stock, $.02 par value; 50,000,000
shares authorized; 12,128,525 and
11,372,524 issued and outstanding,
respectively 242,570 227,450
Additional paid-in capital 14,111,240 11,579,575
Accumulated deficit (10,840,716) (7,174,889)
Unrealized gain on marketable securities 1,453,092 828,092
----------- -----------
Total shareholders' equity 4,966,186 5,460,228
----------- -----------
Total liabilities and shareholders'
equity $91,904,506 $68,768,359
=========== ===========
See Accompanying Notes
4
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NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
June 30, June 30,
1998 1997
----------- ----------
(Unaudited) (Unaudited)
Revenues
Patient service revenue $17,065,027 $7,170,180
Management service revenue 738,927 --
Other income 497,522 128,604
----------- ----------
18,301,476 7,298,784
Operating expenses
Cost of patient services 13,397,700 5,604,995
Lease expense 1,248,519 137,381
General and administrative 3,978,147 906,972
Provision for bad debt 120,000 85,653
Shareholder settlements -- 668,750
Depreciation and amortization 529,659 254,031
----------- ----------
19,274,025 7,657,782
----------- ----------
Operating loss (972,549) (358,998)
Interest expense 1,772,653 637,410
----------- ----------
Loss from operations (2,745,202) (996,408)
Income tax benefit 940,000 516,000
----------- ----------
Loss before extraordinary item (1,805,202) (480,408)
Extraordinary item, net of tax
provision of $510,000 -- 508,743
----------- ----------
Net (loss) income $(1,805,202) $ 28,335
----------- ----------
Basic and diluted net income (loss)
per common share from:
Loss before extraordinary item $ (0.15) $ (0.04)
Extraordinary item $ -- $ 0.04
----------- ----------
Net (loss) income $ (0.15) $ .00
=========== ==========
Weighted average number of common
shares outstanding 12,128,525 11,604,043
=========== ==========
See Accompanying Notes
5
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NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
June 30, June 30,
1998 1997
----------- ----------
(Unaudited) (Unaudited)
Revenues
Patient service revenue $29,584,355 $13,843,073
Management service revenue 1,463,990 --
Other income 904,484 223,490
----------- ----------
31,952,829 14,066,563
Operating expenses
Cost of patient services 23,655,564 10,652,388
Lease expense 1,779,764 304,618
General and administrative 7,005,605 1,835,923
Provision for bad debts 638,940 352,803
Shareholder settlements -- 668,750
Depreciation and amortization 1,061,305 499,283
----------- ----------
34,141,178 14,313,765
----------- ----------
Operating loss (2,188,349) (247,202)
Interest expense 3,377,478 998,334
----------- ---------
Loss from continuing operations (5,565,827) (1,245,536)
Income tax benefit 1,900,000 516,000
Loss before discontinued operations
and extraordinary item (3,665,827) (729,536)
Loss from discontinued operations -- (77,852)
----------- ----------
Loss before extraordinary item (3,665,827) (807,388)
Extraordinary item, net of tax
provision of $510,000 -- 798,615
----------- ----------
Net loss $(3,665,827) $ (8,773)
----------- ----------
Basic and diluted net income (loss)
per common share from:
Loss before discontinued operations
and extraordinary item $ (0.30) $ (0.06)
Discounted operations $ -- $ (0.01)
Extraordinary item $ -- $ 0.07
----------- ----------
Net loss $ (0.30) $ .00
=========== ==========
Weighted average number of common
shares outstanding 12,035,748 11,369,662
=========== ==========
See Accompanying Notes
6
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NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
June 30, June 30,
1998 1997
----------- ------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,665,827) $ (8,773)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 1,061,305 499,283
Deferred income taxes (1,900,000) --
Provision for bad debts 638,940 275,000
Extraordinary item, net of tax
provision -- (798,615)
Decrease (increase) in assets:
Accounts receivable (4,994,177) (1,066,863)
Other receivables (909,012) --
Inventories (42,508) (236)
Prepaid expenses (250,582) 92,141
Deposits 50,424 --
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 3,038,318 1,508,339
Other liabilities -- (282,737)
----------- -----------
Net cash (used in) provided by
operating activities (6,973,119) 217,539
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (7,279,570) (3,240,606)
Payments of deferred costs (1,176,510) --
Advances to related partaies (3,049,343) --
Payment of note receivable -- 1,852,377
Change in restricted investments 232,199 (1,209,374)
Purchase of investments (339,700) --
Acquisition deposit (6,750,000) --
Increase in other accounts receivable -- (585,168)
Increase in receivables from affiliates
and shareholders -- (2,075,243)
----------- -----------
Net cash used in investing activities (18,362,924) (5,258,014)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt (4,062,387) (21,235,403)
Advances to related parties (2,476,177) --
Proceeds from long-term debt 8,635,944 22,462,500
Net borrowing on line of credit 1,735,006 1,000,000
Proceeds from notes payable 11,250,000 --
Proceeds from convertible debentures 5,000,000 --
Proceeds from issuance of common stock 2,546,785 --
Bank overdraft 409,273 --
----------- -----------
Net cash provided by financing activities 23,038,444 2,227,097
----------- -----------
Net decrease in cash (2,297,599) (2,813,378)
Cash and cash equivalents at beginning
of period 2,297,599 3,198,700
----------- -----------
Cash and cash equivalents at end of
period $ -- $ 385,322
=========== ===========
See Accompanying Notes
7
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NEWCARE HEALTH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.
These consolidated financial statements and the notes thereto should be read
in conjunction with the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997,
File No. 0-24110.
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all necessary adjustments to present
fairly the financial position, the results of operations and cash flows for
the periods reported. All adjustments are of a normal recurring nature.
NOTE 2. ACCOUNTS RECEIVABLE AND COST REIMBURSEMENTS
Accounts receivable and reported revenue include net amounts reimbursed by
Medicaid under the provisions of cost reimbursement formulas in effect. The
Company operates under a prospective payment system with Medicare, under which
annual rates are assigned based on estimated reimbursements. Differences
between estimated provisions and final settlement are reflected as adjustments
to future rates.
NOTE 3. INVENTORY
Inventory consists primarily of health care supplies and is stated at the
lower of cost (determined using the first-in, first-out method) or market
value.
NOTE 4. RELATED PARTY TRANSACTIONS
In July 1997, the Company loaned $990,000 to several of the Company's
Directors, Officers and other related parties. The proceeds were used to
purchase stock from several former shareholders. The loans bear a 10%
interest rate and were due June 30, 1998. The Company extended the loans to
June 30, 1999. As of June 30, 1998 the outstanding principal balance plus
accrued interest of $99,000 totaled $1,089,000.
The Company had net advances to related parties of $3,900,906, at June 30,
1998, and net borrowings from related parties of $1,575,114 at December 31,
1997.
8
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NOTE 5. LONG-TERM DEBT
Long-term debt consisted of the following at June 30, 1998 and December 31,
1997:
June 30, December 31,
1998 1997
----------- -----------
Amounts outstanding under
Revenue Bonds secured by a
nursing facilities $ 5,715,000 $ 5,715,000
Other debt secured by retirement,
hospitals and nursing facilities 39,910,966 35,313,535
Other debt 83,162 107,036
----------- -----------
45,709,128 41,135,571
Less: current maturities 811,432 1,380,735
----------- -----------
Total long-term debt $44,897,696 $39,754,836
=========== ===========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997
Revenues from continuing operations for the three months ended June 30, 1998
totaled $18,301,476 compared to $7,298,784 reported for the three months ended
June 30, 1997. This represents an increase of 151% and was principally the
result of an increase in the number of facilities operated in the current
period versus last year. At the end of the June 1998 quarter the Company
operated 33 facilities compared to 12 facilities at the end of the June 1997
quarter. Also included in the current period were management service revenues
of $738,927 related to the two hospitals the Company began managing in the
December 1997 quarter and four Massachusetts nursing facilities the Company
began managing in the March 1998 quarter. Other income totaled $497,522 in
the current quarter versus $128,604 reported last year, with the increase
principally the result of higher interest income.
Operating expenses for the June 1998 quarter totaled $19,274,025 compared to
$7,657,782 in the June 1997 quarter. This also represents an increase of 151%
from a year ago and is directly related to the growth in the number of
facilities operated by the Company. The cost for patient services totaled
$13,397,700 in the current period versus $5,604,995 last year. Lease expense
in the June 1998 quarter was $1,248,519 versus $137,381 in the June 1997
quarter, as the number of leased facilities grew to 12 in the current quarter
from only 2 facilities last year. Depreciation and amortization expense was
$529,659 in the June 1998 quarter versus $254,031 in 1997, and was also
impacted by the growth in owned facilities from the year earlier. The current
quarter included 15 owned facilities versus a total of 9 owned facilities last
year.
Provision for bad debts in the June 1998 quarter totaled $120,000 versus
$85,653 in the June 1997 quarter. General and administrative expense
9
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increased to $3,978,147 in the current period from $906,972 reported last
year. This significant increase reflects the rapid growth the Company has
experienced in the past year and the impact it has had on corporate personnel
and salaries, insurance, travel expenses, supplies and legal and professional
fees. The June 1997 quarter expense levels were also impacted by shareholder
settlements totaling $668,750.
Interest expense in the June 1998 quarter totaled $1,772,653 versus $637,410
in the June 1997 quarter, reflecting a higher average level of debt
outstanding.
The loss before taxes from continuing operations was $2,745,202 in the current
period versus a loss before taxes from continuing operations of $996,408
reported in 1997. After an allowance for income tax credits, net loss was
$1,805,202 ($0.15 basic and diluted per common share) in the current quarter
compared to a net income of $28,335 (less than one cent basic and diluted per
common share) in the June 1997 quarter. Included in the previous year's
results was an after-tax gain of $508,743 from the refinancing and retirement
of debt.
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
Revenues from continuing operations for the six months ended June 30, 1998
totaled $31,952,829, an increase of 127% from the $14,066,563 reported for the
six months ended June 30, 1997. The increase reflects the growth in the
number of facilities operated by the Company. The results for the current
year also reflects management fees totaling $1,463,990 stemming from the
management of two hospitals begun in the December 1997 quarter and four
Massachusetts nursing facilities begun in the March 1998 quarter. Other
income increased to $904,484 from $223,490, principally from higher interest
income.
Expenses for the six months ended June 30, 1998 totaled $34,141,178 versus
$14,313,765 for the six months ended June 30, 1997, an increase of 138%. Once
again, the primary reason for the increase was the growth in the number of
facilities operated by the facility in the current period from last year. The
cost for patient services increased 122% to $23,655,564 in the current period
from $10,652,388 reported last year, reflecting the growth in facilities.
Lease expense totaled $1,779,764 in 1998 versus $304,618 in 1997, as more
leased facilities were added during the year. Depreciation and amortization
expense totaled $1,061,305 in the current six month period compared to
$499,283 a year ago, and was directly related to the number of facilities
operated.
The provision for bad debts totaled $638,940 for the first six months of 1998
versus $352,803 for the first six months of 1997. General and administrative
expenses were $7,005,605 in the current year compared to $1,835,923 a year
earlier, and were impacted by the growth in operations and the build up of the
management team, which mainly occurred after the June 1997 quarter.
Interest expense increased to $3,377,478 in the current year from $998,334 in
1997, principally the result of a higher average level of debt outstanding.
The loss before taxes was $5,565,827 for the six months ended June 30, 1998
versus a loss before taxes of $1,245,536 for the six months ended June 30,
1997. After allowance for income tax credits, net loss for the current period
was $3,665,827 ($0.30 basic and diluted per common share) compared to a net
loss of $8,773 (less than one cent basic and diluted per common share)
10
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reported last year. Included in the previous years results was an after-tax
loss of $77,852 from a discontinued business unit and an after-tax gain of
$798,615 from the refinancing and retirement of debt.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had positive working capital of $317,249 versus
a working capital deficit of $2,301,668 at December 31, 1997. During the June
1997 quarter, the Company implemented a new $10 million line of credit, with
the available amount based on the balance of specific accounts receivable.
At June 30, 1998, the available amount was approximately $5 million, of which
all was drawn. The term of the agreement is for three years with an annual
one year roll over feature.
During the six months ended June 30, 1998, cash used in operating activities
totaled $6,973,119 versus cash provided by operations of $217,539 for the six
months ended June 30, 1997. The primary reason for the increase in cash used
in operating activities was the increase in net loss for the current six
months, an increase in accounts and other receivables, and the provision for
deferred taxes. These were offset to a certain degree by increases in
depreciation and amortization expense and provisions for bad debts.
Cash used in investing activities totaled $18,362,924 for the six months ended
June 30, 1998 versus cash used in investing activities of $5,258,014 in 1997.
The increase in investing activities was principally the result of purchases
of property and equipment, advances to related parties, payments of deferred
costs and an acquisition deposit.
Cash provided by financing activities during the six months ended June 30,
1998 totaled $23,038,444 compared to cash provided by financing activities of
$2,227,097 for the six months ended June 30, 1997. In the six months ended
June 30, 1998 cash was provided by two private placement transactions, a
convertible debenture offering and a common stock offering, which totaled
$5,000,000 and $2,546,785 respectively. In addition, proceeds from notes
payable were $11,250,000 and an additional 1,735,006 was drawn on the
Company's line of credit. Repayment of long-term debt totaled $4,062,387.
During the six months ended June 30, 1997, proceeds from long-term debt were
$22,462,500 and repayment of long-term debt totaled $21,235,403.
The Company believes that its long-term liquidity needs will generally be met
by improved cash flows from operations and it will be able to, when necessary,
obtain extensions of its current line of credit and/or secure other financing
from the private or public sector.
The Company presently has no commitments for material capital expenditures.
11
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FACILITIES
Listed below are the facilities operated by the Company at June 30, 1998:
Number Occupancy
Skilled Nursing Facilities Location Type of Beds at 6/30/98
- -------------------------- -------- ---- ------- ----------
Emory Nursing Home Georgia Owned 40 97.5%
Fitzgerald Nursing Center Georgia Owned 167 71.3
Ft. Valley Nursing Home Georgia Owned 75 94.7
Pecan Manor Nursing Home Georgia Leased 60 83.3
Pleasant View Nursing Center Georgia Leased 120 86.7
Whigham Nursing Center Georgia Leased 142 95.8
Windward Nursing Center Georgia Owned 100 90.0
Central Tampa Nursing Home Florida Owned 100 66.0
Dania Nursing Home Florida Owned 88 81.8
Oak Manor Nursing Home Florida Owned 180 87.2
Suncoast Nursing Home Florida Owned 59 78.0
Venice Nursing Pavilion Florida Owned 120 38.3
Victoria Martin Nursing Home Florida Owned 38 81.6
Wakulla Manor Florida Owned 120 95.0
Dallas Nursing & Rehab Texas Leased 185 56.2
Leisure Lodge Texas Leased 70 54.3
Park Place Nursing Center Texas Owned 118 70.3
Rosewood Rehab & Care Texas Leased 100 89.0
Woodland Park Texas Leased 100 93.0
Wortham Nursing Center Texas Leased 95 26.3
Coffeyville Nursing Home Kansas Leased 45 62.2
Great Plains Rehab Kansas Owned 104 91.3
Salina Nursing Home Kansas Leased 60 55.0
Meadowood Nursing Home Mass. Managed 120 97.5
Elms Nursing Home Mass. Managed 60 70.0
Oak Manor Nursing Home Mass. Managed 60 85.0
Pine Manor Nursing Home Mass. Managed 92 84.8
----- ------
Totals 2,618 77.0%
Assisted Living Facilities
- --------------------------
Oak Manor Village Florida Owned 224 33.2%
Remington House-New Port Richie Florida Leased 124 82.4
Remington House-Pompano Beach Florida Managed 120 70.0
Pine Valley Alabama Leased 110 96.6
----- -----
Totals 578 63.5%
Hospitals
- ---------
Meadowbrook Rehab Kansas Owned 84 31.0%
Princeton Hospital Florida Managed 150 22.0
TriCity Hospital Texas Managed 131 48.0
----- -----
Totals 365 33.6%
12
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IMPACT OF FEDERAL HEALTH CARE LEGISLATION
In August of 1997, the Federal Government enacted the Balanced Budget Act of
1997, which has a goal of achieving a balanced federal budget. Among the
numerous actions taken was a multi-billion dollar spending growth reduction
for the Medicare program over the next several years. The reductions will
partially result from the implementation of a Medicare prospective payment
system (PPS) at skilled nursing facilities. The phase-in of the PPS began on
July 1, 1998, for a limited number of the Company's facilities, with the
remaining facilities to be effective on January 1, 1999.
For nursing homes that participated in the Medicare program prior to October
1995, the Medicare PPS rates will be phased in over a four year period.
During the first three years, the rates will be established by a blend of
facility-specific costs and a federally determined acuity level rate. The
portion of the rate affected by acuity level will increase from 25% in year
one to 75% by year three. In year four, the entire PPS rate will be based on
federally determined acuity levels. Nursing homes that were not in the
Medicare program prior to October 1995 will go directly to the federally
determined acuity level rate.
In addition to the PPS, other legislative changes centered on reducing
healthcare fraud and abuse, developing new options for Medicare and Medicaid
health plans, and setting annual limits on Part B therapy charges. Also,
there will be a 10% reduction in Part B therapy costs for the calendar year
1998. On January 1, 1999, reimbursement rates for these services will be
established by the Federal Government.
For the first six months of 1998, the Company derived approximately 22.6% of
its revenues from Medicare. Since only a limited number of facilities are
currently being impacted by this new legislation, the Company has not been
able to ascertain the total impact on revenues. It is anticipated, however,
that the overall effect on Medicare revenues will tend to be negative.
However, management believes that it will be able to offset this decrease in
Medicare revenue with a corresponding decrease in operating expense.
The regulations relating to the aforementioned legislation are still within
the comment period and lobbying efforts are taking place to change certain
aspects and methodology of computing the PPS rates. At this time it is
unclear as to the effects of the changes, if any, that may occur.
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. None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 27 Financial Data Schedule Filed herewith
electronically
(b) Reports on Form 8-K. None
13
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWCARE HEALTH CORPORATION
Date: August 14, 1998 By:/s/ Darrell C. Tucker
Darrell C. Tucker, President
Date: August 14, 1998 By:/s/ James H. Sanregret
James H. Sanregret
Chief Financial Officer
14
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EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------- ------------------------------
27. Financial Data Schedule Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheets and statements of operations found on pages 3, 4 and 6 of the
Company's Form 10-Q for the year to date, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 11,472,912
<RECEIVABLES> 15,283,587
<ALLOWANCES> 0
<INVENTORY> 175,188
<CURRENT-ASSETS> 37,343,973
<PP&E> 48,645,792
<DEPRECIATION> 0
<TOTAL-ASSETS> 91,904,506
<CURRENT-LIABILITIES> 37,026,724
<BONDS> 5,000,000
<COMMON> 242,570
0
0
<OTHER-SE> 4,723,616
<TOTAL-LIABILITY-AND-EQUITY> 91,904,506
<SALES> 31,048,345
<TOTAL-REVENUES> 31,952,829
<CGS> 23,655,564
<TOTAL-COSTS> 23,655,564
<OTHER-EXPENSES> 10,485,614
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<EPS-PRIMARY> (0.30)
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</TABLE>
